Document:

ASSET PURCHASE AGREEMENT

THIS AGREEMENT made as of the 6th day of October, 2004.

BETWEEN:

      WORKSTREAM USA, INC.,
      a corporation incorporated under the laws of Delaware

      (hereinafter referred to as the "Purchaser")

AND:

      WORKSTREAM INC.,
      a corporation incorporated under the laws of Canada

      (hereinafter referred to as "Workstream")
AND:

      HRSOFT, LLC

      a corporation incorporated under the laws of the State of Delaware

      (hereinafter referred to as the "Vendor")

WHEREAS:

A.    The Vendor carries on the business of providing real-time decision support
      for human capital management;

B.    The Vendor wishes to sell and assign to the Purchaser, and the Purchaser
      wishes to purchase and assume from Vendor certain of the assets of such
      business on the terms and subject to the conditions hereinafter contained.

NOW THEREFORE in consideration of the mutual covenants and agreements herein
contained and other good and valuable consideration paid by each of the parties
hereto to each of the other parties hereto (the receipt and sufficiency of which
are hereby acknowledged), it is agreed among the parties hereto as follows:

1.    INTERPRETATION

      1.1.  DEFINED TERMS. In this Agreement and in the schedules hereto, unless
            there is something in the subject-matter or context inconsistent
            therewith, the following terms and expressions will have the
            following meanings:

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            1.1.1. "Affiliate" of any person means any corporation which,
                  directly or indirectly, is controlled by, controls or is under
                  direct or indirect common control with such person;

            1.1.2. "Agreement", "hereto", "herein", "hereof", "hereunder" and
                  similar expressions refer to this Asset Purchase Agreement and
                  not any particular paragraph or any particular portion of this
                  agreement and includes all schedules attached to this
                  agreement;

            1.1.3. "Assumed Contracts" means all contracts, agreements, orders,
                  commitments and other engagements by or with third parties
                  relating to the Business which are included in the Purchased
                  Assets including, without limitation, the Customer Contracts
                  and the Leases all of which, including amounts payable
                  thereon, all of which are listed in Schedule 1.1.3 attached
                  hereto;

            1.1.4. "Assumed liabilities" means the liabilities set forth in
                  Schedule 2.6.2.

            1.1.5. "Business" means the business carried on by the Vendor which
                  primarily involves the provision of real-time decision support
                  for human capital management;

            1.1.6. "Business Day" means a day other than a Saturday, a Sunday or
                  other day on which commercial banks in Ottawa, Ontario, Canada
                  are authorized or required by law to close;

            1.1.7. "Closing Date" means October , 2004, or such other date as
                  the Vendor and Purchaser may agree upon;

            1.1.8. "Closing Time" means 2:00 o'clock in the afternoon on the
                  Closing Date or such other time on the Closing Date as the
                  parties hereto may agree upon;

            1.1.9. "Commission" means the Securities and Exchange Commission;

            1.1.10. "Commission Documents" means all of the Purchaser's filings
                  with the Commission prior to the date hereof;

            1.1.11. "Customer Contracts" means any and all agreements entered
                  into between the Vendor and one or more third parties relating
                  to the sale or provision of goods or services by the Vendor to
                  such third parties in connection with the Business, including
                  unfilled orders, commitments and other engagements by or with
                  such third parties, all of which are listed in Schedule 2.1.4
                  attached hereto;

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            1.1.12. "Encumbrances" means mortgages, charges, pledges, security
                  interests, liens, encumbrances, actions, claims, demands and
                  equities of any nature whatsoever or howsoever arising and any
                  rights or privileges capable of becoming any of the foregoing;

            1.1.13. Intentionally deleted;

            1.1.14. "Governmental Authority" means any foreign, domestic,
                  federal, territorial, state or local governmental authority,
                  quasi-governmental authority, instrumentality, court,
                  government or self-regulatory organization, commission,
                  tribunal or organization or any regulatory, administrative or
                  other agency, or any political or other subdivision,
                  department or branch of any of the foregoing;

            1.1.15. "HSR Act" means the Hart-Scott-Rodino Antitrust Improvements
                  Act of 1976, as amended;

            1.1.16. "Interim Period" means the period from and including the
                  date of this Agreement to and including the Closing Date;

            1.1.17. "License Rights" means all license and distribution rights
                  relating to the Business described in Schedule 1.1.17 attached
                  hereto;

            1.1.18. "Lien" means, with respect to any asset, any mortgage, lien,
                  claim, pledge, charge, security interest or other encumbrance
                  of any kind in respect of such asset;

            1.1.19. "Material Adverse Effect" means with respect to a Person or
                  entity, a material adverse effect on the assets, properties,
                  business, operations, financial condition or results of
                  operations of such Person or entity and its subsidiaries taken
                  as a whole;

            1.1.20. "Person" means and includes any individual, corporation,
                  general partnership, limited partnership, limited liability
                  company, limited liability partnership, joint venture,
                  syndicate, association, trust, government, governmental agency
                  or board or commission or authority, and any other form of
                  entity or organization;

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            1.1.21. "Principal" means any manufacturer which the Vendor
                  represents in the sales and service of the manufacturer's
                  products;

            1.1.22. "Purchase Price" means the sum of $1,426,000 which is the
                  amount, subject to adjustments as herein provided, payable by
                  the Purchaser to the Vendor for all of the Purchased Assets,
                  as provided herein;

            1.1.23. "Purchased Assets" means the undertaking and assets of the
                  Business which are to be sold by the Vendor to the Purchaser
                  pursuant to Section 2;

            1.1.24. Intentionally deleted.

            1.1.25. "Warranty Claim" means a claim made by either the Purchaser
                  or the Vendor based on or with respect to the inaccuracy or
                  non-performance or non-fulfilment or breach of any
                  representation or warranty made by the other party contained
                  in this Agreement or contained in any document or certificate
                  given in order to carry out the transactions contemplated
                  hereby.

      1.2.  BEST OF KNOWLEDGE. Any reference herein to "the best of the
            knowledge" of the Vendor will be deemed to mean the actual knowledge
            of the Vendor and the knowledge which it would have had if it had
            conducted an inquiry into the relevant subject matter that a
            reasonably prudent person would have conducted under similar
            circumstances.

      1.3.  SCHEDULES. The Schedules which are attached to this Agreement are
            incorporated in this Agreement by reference and are deemed to be
            part hereof.

      1.4.  CURRENCY. Unless otherwise indicated, all dollar amounts referred to
            in this Agreement are in lawful money of the United States of
            America.

      1.5.  CHOICE OF LAW AND ATTORNMENT. This Agreement shall be governed by
            and construed and enforced in accordance with the laws of the
            Province of Ontario, Canada.

      1.6.  INTERPRETATION NOT AFFECTED BY HEADINGS OR PARTY DRAFTING. The
            division of this Agreement into articles, sections, paragraphs,
            subparagraphs and clauses and the insertion of headings are for
            convenience of reference only and shall not affect the construction
            or interpretation of this Agreement. The terms "this Agreement",
            "herein", "hereunder" and similar expressions refer to this
            Agreement and the Schedules hereto and not to any particular
            article, section, paragraph, subparagraph, clause or other portion
            and include any agreement or instrument supplementary or ancillary
            hereto. Each party hereto acknowledges that it and its legal counsel
            have reviewed and participated in settling the terms of this
            Agreement, and the parties hereby agree that any rule of
            construction to the effect that any ambiguity is to be resolved
            against the drafting party shall not be applicable in the
            interpretation of this Agreement.

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      1.7.  NUMBER AND GENDER. In this Agreement, unless there is something in
            the subject matter or context inconsistent therewith:

            1.7.1. words in the singular number include the plural and such
                  words shall be construed as if the plural had been used,

            1.7.2. words in the plural include the singular and such words shall
                  be construed as if the singular had been used, and

            1.7.3. words importing the use of any gender shall include all
                  genders where the context or party referred to so requires,
                  and the rest of the sentence shall be construed as if the
                  necessary grammatical and terminological changes had been
                  made.

      1.8.  TIME OF ESSENCE. Time shall be of the essence.

2.    PURCHASE AND SALE

      2.1.  PURCHASED ASSETS. On the terms and subject to the fulfilment of the
            conditions, the Vendor hereby agrees to sell, transfer and assign to
            the Purchaser, and the Purchaser hereby agrees to purchase and
            accept from the Vendor as of the Closing Date, assets, rights and
            interests of the Vendor listed in Schedule 2.1, as attached hereto
            (the "Purchased Assets"), and will include the following assets:

            2.1.1. Accounts Receivable: all accounts receivable, trade accounts,
                  notes, receivables, book debts and other debts due or accruing
                  to the Vendor in connection with the Purchased Assets and the
                  full benefit of all securities for such accounts, notes or
                  debts described in Schedule 2.1.1 (the "Accounts Receivable");

            2.1.2. Computer Equipment: all of the Vendor's right, title and
                  interest in all computer hardware and firmware used in the
                  Business including, without limitation, that described in
                  Schedule 2.1.2 attached hereto;

            2.1.3. Customer Lists and Information: all customer lists, files,
                  data and information relating to customers and prospective
                  customers of the Business as of the Closing Time including,
                  without limitation, the customer list which has been delivered
                  by the Vendor to the Purchaser prior to the Closing Date
                  described in Schedule 2.1.3 attached hereto;

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            2.1.4. Customer Contracts: all right, title and interest of the
                  Vendor in and to all Customer Contracts, all of which are
                  listed in Schedule 2.1.4 attached hereto;

            2.1.5. Goodwill, Name, etc.: the goodwill of the Business, together
                  with the exclusive right of the Purchaser to represent itself
                  as carrying on the Business in continuation of and in
                  succession to the Vendor, and all rights in and title to the
                  name and trademark "HRSoft" or any variation of same
                  (Notwithstanding the transfer of all rights in and title to
                  the name "HRSoft", the Purchaser acknowledges that the
                  Vendor's corporate name shall continue to be "HRSoft, LLC"
                  until such time as the Vendor is able to change its corporate
                  name. The Vendor undertakes and agrees to effect the change of
                  its corporate name to something that does not contain the name
                  "HRSoft, LLC" or any variation thereof, as soon as practicably
                  possible, but in no event longer than thirty (30) days from
                  the Closing Date);

            2.1.6. Technology, Intellectual Property and Software: all of its
                  world wide right, title and interest in and to any
                  intellectual property rights including but not limited to all
                  trade secrets, research data, designs, proprietary know-how,
                  technical information, specifications and materials in
                  whatever form or media recording or evidencing technology or
                  proprietary information used in or relating to the Business,
                  and all rights and interests in and to all inventions,
                  patents, applications for patents, copyrights, trade marks,
                  trade mark registrations, trade names, logos, industrial
                  designs, design patents, and other intellectual property used
                  in or relating to the Business, and all computer software and
                  any intellectual or industrial property of any nature
                  whatsoever which it may have in any components or features of
                  the computer software used in the Business including the
                  software products known as HRM Connect, Charter and including
                  all related codes, related source, object or any application
                  codes, specifications, documentation, revisions, enhancements
                  and modifications thereto, in whatever form and media to which
                  the Vendor has any right or interest for the full duration of
                  all such rights, and any renewals or extensions thereof, all
                  of which is listed in Schedule 2.1.6 attached hereto;

            2.1.7. Licence Rights: all licence and distribution rights relating
                  to the Business granted to the Vendor by any third party under
                  all contracts and agreements (written or oral), all of which
                  are listed in Schedule 1.1.17 attached hereto;

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            2.1.8. Regulatory Licenses: all licenses, registrations and
                  qualifications of the Business required by any governmental or
                  regulatory authority, to the extent transferable;

            2.1.9. Supply Contracts: the full benefit of all contracts providing
                  for the supply of goods and services to the Business, subject
                  to the Purchaser's review and acceptance of such contracts and
                  agreements prior to the Closing Date; and

            2.1.10. Warranty Rights and Maintenance Contracts: the full benefit
                  of all warranties and warranty rights (express and implied)
                  against manufacturers or sellers which apply to any of the
                  Purchased Assets and all maintenance contracts on machinery,
                  equipment and the other Purchased Assets, subject to the
                  Purchaser's review and acceptance of such contracts and
                  agreements prior to the Closing Date.

      2.2.  UNASSIGNABLE CONTRACTS. If any rights, benefits or remedies (the
            "Rights") under any Assumed Contracts are not assignable by the
            Vendor to the Purchaser without the written consent of the other
            party thereto (the "Third Party") and such consent is not obtained,
            then, unless the Purchaser exercises its rights under Section 6.2,

            2.2.1. the Vendor will hold the Rights for the benefit of the
                  Purchaser,

            2.2.2. the Vendor will, at the request and expense and under the
                  direction of the Purchaser, in the name of the Vendor or
                  otherwise as the Purchaser shall specify, take all such
                  actions and do all such things as shall, in the opinion of the
                  Purchaser, be necessary or desirable in order that the
                  obligations of the Vendor under such Assumed Contracts may be
                  performed in a manner such that the value of the Rights shall
                  be preserved and shall enure to the benefit of the Purchaser
                  and such that all moneys receivable under the Assumed
                  Contracts may be received by the Purchaser,

            2.2.3. the Vendor will promptly pay over to the Purchaser all such
                  moneys collected by the Vendor in respect of such Assumed
                  Contracts, and

            2.2.4. to the extent permitted by the Third Party and provided, in
                  the Purchaser's opinion, it would not be prejudicial to the
                  Purchaser's rights to do so, the Purchaser will perform the
                  obligations under such Assumed Contracts on behalf of the
                  Vendor, and will indemnify the Vendor against all liabilities,
                  costs and expenses incurred by the Vendor in performing such
                  obligations.

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      2.3.  EXCLUDED LIABILITIES AND INDEMNITY. The Purchaser will not assume
            and will not be liable for, and the Vendor will indemnify the
            Purchaser from and against, all obligations, commitments and
            liabilities of and claims against the Vendor (whether absolute,
            accrued or contingent) relating to the Business, except the Assumed
            Liabilities. Without limiting the generality of the foregoing, it is
            agreed that the Purchaser will have no liability for any of the
            following obligations or liabilities:

            2.3.1. all liabilities in respect of all indebtedness of the Vendor
                  to all persons;

            2.3.2. all product liability claims and liabilities for warranty or
                  product return claims relating to any product or service of
                  the Business produced, sold, performed or delivered prior to
                  the Closing Date;

            2.3.3. all liabilities for all taxes, duties, levies, assessments
                  and other such charges, including any penalties, interests and
                  fines with respect thereto, payable by the Vendor to any
                  federal, state, municipal or other government or governmental
                  agency, authority, board, bureau or commission, domestic or
                  foreign, including, without limitation, any taxes in respect
                  of or measured by the sale, consumption or performance by the
                  Vendor of any product or service prior to the Closing Date or
                  any similar legislation in respect of all remuneration payable
                  to all persons employed in the Business prior to the Closing
                  Date;

            2.3.4. all liabilities with respect to leases for the Vendor's
                  facilities in Morristown, New Jersey and Fairfield, Iowa.

            2.3.5. all other liabilities of any nature whatsoever, known or
                  unknown, due or to become due, not expressly assumed by
                  Purchaser pursuant to this Agreement.

      2.4.  ASSUMED LIABILITIES. The Purchaser shall be liable for, and shall
            indemnify Vendor from and against, all obligations, commitments and
            liabilities relating to the Assumed Liabilities.

      2.5.  PURCHASE PRICE. The purchase price will not exceed the assumption of
            $1,426,000 in payables, bank debt, settlement and employee payroll
            of the Vendor by the Purchaser.

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      2.6.  PAYMENT OF PURCHASE PRICE. Purchaser and Vendor mutually agree that
            the Purchase Price will be paid and satisfied at the Closing Time as
            follows:

            2.6.1. by delivery on behalf of the Vendor certified or bank checks:
                  (i) in the amount of $XXXX to Hudson United Bank, in
                  satisfaction of Loan Number [XXXXX]; and (ii) in the amount of
                  $XXXXX to PNC Bank, in satisfaction of Loan Number [XXXXXX];

            by    assuming the outstanding liabilities of the Vendor as attached
                  in Schedule 2.6.2 hereto and 2.6.2.by application to the
                  Purchase Price of the pre-closing loan in the amount of
                  $100,000 made by the Purchaser to the Vendor in satisfaction
                  of the of the promissory note executed by the Vendor dated
                  September 30, 2004.

      2.7.  ALLOCATION OF PURCHASE PRICE. The Purchase Price shall be allocated
            among the Purchased Assets in the manner provided by Schedule 2.7
            attached hereto. The Vendor and the Purchaser shall file their
            respective tax returns prepared in accordance with such allocation.

      2.8.  PAYMENT OF TAXES. The Purchaser shall be liable for and shall pay
            all applicable federal and state sales taxes, excise taxes and all
            other taxes, duties and other like charges properly payable, except
            for any income tax payable by the Vendor, on and in connection with
            the conveyance and transfer of the Purchased Assets to the
            Purchaser. The Vendor will do and cause to be done such things as
            are reasonably requested to enable the Purchaser to comply with such
            obligation in an efficient manner.

3.    REPRESENTATIONS AND WARRANTIES

      3.1.  REPRESENTATIONS AND WARRANTIES BY THE VENDOR. The Vendor hereby
            represents and warrants to the Purchaser and Workstream as follows,
            and confirm that the Purchaser and Workstream is relying upon the
            accuracy of each of such representations and warranties in
            connection with the purchase of the Purchased Assets and the
            completion of the other transactions hereunder:

            3.1.1. Corporate Authority and Binding Obligation. The Vendor has
                  good right, full corporate power and absolute authority to
                  enter into this Agreement and to sell, assign and transfer the
                  Purchased Assets to the Purchaser in the manner contemplated
                  herein and to perform all of the Vendor's obligations under
                  this Agreement. The Vendor and its shareholders and board of
                  directors have taken all necessary or desirable actions, steps
                  and corporate and other proceedings to approve or authorize,
                  validly and effectively, the entering into of, and the
                  execution, delivery and performance of, this Agreement and the
                  sale and transfer of the Purchased Assets by the Vendor to the
                  Purchaser. This Agreement is a legal, valid and binding
                  obligation of the Vendor, enforceable against it in accordance
                  with its terms.

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            3.1.2. No Other Purchase Agreements. No person has any agreement,
                  option, understanding or commitment, or any right or privilege
                  (whether by law, pre-emptive or contractual) capable of
                  becoming an agreement, option or commitment, for the purchase
                  or other acquisition from the Vendor of any Purchased Assets,
                  or any rights or interest therein, other than in the ordinary
                  course of the Business.

            3.1.3. Contractual and Regulatory Approvals. Except as specified in
                  Schedule 3.1.3 attached hereto, the Vendor is not under any
                  obligation, contractual or otherwise, to request or obtain the
                  consent of any person, and no permits, licences,
                  certifications, authorizations or approvals of, or
                  notifications to, any federal, state, municipal or local
                  government or governmental agency, board, commission or
                  authority are required to be obtained by the Vendor,

                  3.1.3.1. in connection with the execution, delivery or
                        performance by the Vendor of this Agreement or the
                        completion of any of the transactions contemplated
                        herein,

                  3.1.3.2. to avoid the loss of any permit, licence,
                        certification or other authorization relating to the
                        Purchased Assets, or

                  3.1.3.3. in order that the authority of the Purchaser to carry
                        out the Assumed Contracts in this ordinary course and in
                        the same manner as presently carried out by the Vendor.

                  Complete and correct copies of any agreements under which the
                  Vendor is obligated to request or obtain any such consent have
                  been provided to the Purchaser.

            3.1.4. Status and Governmental Licences.

                  3.1.4.1. The Vendor is a corporation duly incorporated,
                        validly existing and in good standing in all respects
                        under the laws of its jurisdiction of incorporation. The
                        Vendor has all necessary corporate power to own, lease
                        and operate its assets, properties and business and to
                        carry on its business as it is now being conducted and
                        is in good standing in every jurisdiction in which the
                        nature of its business or the location of its properties
                        requires such qualification or licensing. Schedule 3.1.4
                        attached hereto sets forth all jurisdictions in which
                        the Vendor is qualified or licensed to do business as a
                        corporation.

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                  3.1.4.2. The Vendor holds all necessary licences,
                        registrations and qualifications in each jurisdiction in
                        which,

                        (i)   it owns or leases any of the Purchased Assets, or

                        (ii)  the nature of the Purchased Assets or any part
                              thereof, makes such qualification necessary or
                              desirable to enable the Purchased Assets to be
                              owned, leased and/or operated.

                  All of the Vendor's licences, registrations and qualifications
                  are listed in Schedule 3.1.4 attached hereto and are valid and
                  subsisting. Complete and correct copies of the licences,
                  registrations and qualifications have been delivered to the
                  Purchaser. The Vendor is in compliance with all terms and
                  conditions of the licences, registrations and qualifications.
                  There are no proceedings in progress, pending or, to the best
                  of the knowledge of the Vendor, threatened, which could result
                  in the revocation, cancellation or suspension of any of the
                  licences, registrations or qualifications.

            3.1.5. Compliance with Constating Documents, Agreements and Laws.
                  The execution, delivery and performance of this Agreement and
                  each of the other agreements contemplated or referred to
                  herein by the Vendor, and the completion of the transactions
                  contemplated hereby, will not constitute or result in a
                  violation, breach or default, or cause the acceleration of any
                  obligations under:

                  3.1.5.1. any term or provision of any of the articles, by-laws
                        or other constating documents of the Vendor,

                  3.1.5.2. subject to obtaining the contractual consents
                        referred to in Schedule 3.1.3 , the terms of any
                        indenture, agreement (written or oral), instrument or
                        understanding or other obligation or restriction to
                        which the Vendor is a party or by which it is bound
                        including, without limitation, any of the Assumed
                        Contracts, or

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                  3.1.5.3. subject to obtaining the regulatory consents referred
                        to in Schedule 3.1.3, any term or provision of any of
                        the Licences or any order of any court, governmental
                        authority or regulatory body or any law or regulation of
                        any jurisdiction in which the Business is carried on.

                  3.1.5.4. Absence of Undisclosed Liabilities. There are no
                        undisclosed liabilities (contingent or otherwise) of the
                        Vendor of any kind whatsoever in respect of which the
                        Purchaser may become liable on or after the consummation
                        of the transactions contemplated by this Agreement.

            3.1.6. Litigation. Except for the matters referred to in Schedule
                  3.1.6 attached hereto, there are no actions, suits or
                  proceedings, judicial or administrative (whether or not
                  purportedly on behalf of the Vendor) pending or, to the best
                  of the knowledge of the Vendor, threatened, by or against or
                  affecting the Vendor which may affect the Purchased Assets, at
                  law or in equity, or before or by any court or any federal,
                  state, municipal or other governmental department, commission,
                  board, bureau, agency or instrumentality, domestic or foreign.
                  Except for the matters referred to in Schedule 3.1.6 there are
                  no grounds on which any such action, suit or proceeding might
                  be commenced with any reasonable likelihood of success.

            3.1.7. Title to Purchased Assets. The Vendor is the owner of and has
                  good and marketable title to all of the Purchased Assets free
                  and clear of all Liens, subject to the payment at the Closing
                  Time of the liabilities owed by Vendor to Hudson United Bank
                  and PNC (Fleet) and the subsequent filing of UCC3s by such
                  institutions releasing the Liens with respect to such
                  liabilities.

            3.1.8. Works Orders and Deficiencies. There are no outstanding work
                  orders, non-compliance orders, deficiency notices or other
                  such notices relative to the Purchased Assets which have been
                  issued by any regulatory authority, police or fire department,
                  sanitation, environment, labour, health or other governmental
                  authorities or agencies. There are no matters under discussion
                  with any such department or authority relating to work orders,
                  non-compliance orders, deficiency notices or other such
                  notices. None of the Purchased Assets are being operated, in a
                  manner which is in contravention of any statute, regulation,
                  rule, code, standard or policy.

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            3.1.9. Leases of Personal Property. Schedule 3.1.9 attached hereto
                  describes all leases of equipment and vehicles relating to or
                  included in the Purchased Assets. Complete and correct copies
                  of those leases have been provided to the Purchaser. The
                  Vendor is entitled to all rights and benefits as lessee under
                  those leases, and the Vendor has not sublet, assigned,
                  licensed or otherwise conveyed any rights in those leases or
                  in the property leased thereunder to any other person. All
                  payments and other obligations required to be paid and
                  performed by the Vendor under those leases have been duly paid
                  and performed; the Vendor is not in default of any its
                  obligations under those leases; and, to the best of the
                  knowledge of the Vendor, none of the lessors or any other
                  parties to those leases are in default of any of their
                  obligations under those leases. The Vendor is entitled to
                  assign all of its right and interest under those leases and in
                  and to the property leased thereunder to the Purchaser subject
                  to obtaining the consents referred to in Schedule 3.1.3
                  attached hereto. Subject to obtaining such consents, the terms
                  and conditions of those leases will not be affected by, nor
                  will any of those leases be in default as a result of, the
                  completion of the transaction contemplated hereunder.

            3.1.10. Intellectual Property.

                  3.1.10.1. Section 2.1.6 and Schedule 2.1.6 attached hereto
                        lists and contains a complete description of:

                        (i)   all patents, patent applications and
                              registrations, trade marks, trade mark
                              applications and registrations, copyrights,
                              copyright applications and registrations, trade
                              names and industrial designs, domestic or foreign,
                              owned or used by the Vendor and included as part
                              of the Purchased Assets,

                        (ii)  all trade secrets, know-how, inventions and other
                              intellectual property owned or used by the Vendor
                              and included as part of the Purchased Assets,

                        (iii) all computer systems and application software,
                              including without limitation all documentation
                              relating thereto and the latest revisions of all
                              related object and source codes therefor, owned or
                              used by the Vendor and included as part of the
                              Purchased Assets,

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                                       14

                        (all of the foregoing being collectively called the
                        "Intellectual Property").

                  3.1.10.2. The Vendor has good and valid title to all of the
                        Intellectual Property, free and clear of any and all
                        Encumbrances, except in the case of any Intellectual
                        Property licensed to the Vendor as disclosed in Schedule
                        2.1.6. Complete and correct copies of all agreements
                        whereby any rights in any of the Intellectual Property
                        have been granted or licensed to the Vendor have been
                        provided to the Purchaser. No royalty or other fee is
                        required to be paid by the Vendor to any other person in
                        respect of the use of any of the Intellectual Property
                        except as provided in such agreements delivered to the
                        Purchaser. The Vendor has protected its rights in the
                        Intellectual Property in the manner and to the extent
                        described in Schedule 2.1.6. Except as indicated in
                        Schedule 2.1.6, the Vendor has the exclusive right to
                        use all of the Intellectual Property and has not granted
                        any licence or other rights to any other person in
                        respect of the Intellectual Property. Complete and
                        correct copies of all agreements whereby any rights in
                        any of the Intellectual Property have been granted or
                        licensed by the Vendor to any other person have been
                        provided to the Purchaser. The Vendor is entitled to
                        assign all of its rights and interest in and to the
                        Intellectual Property to the Purchaser subject to
                        obtaining the consents referred to in Schedule 3.1.3
                        attached hereto.

                  3.1.10.3. Subject to obtaining the aforesaid consents, and
                        except as disclosed in Schedule 2.1.6, there are no
                        restrictions on the ability of the Vendor or any
                        successor to or assignee from the Vendor to use and
                        exploit all rights in the Intellectual Property. All
                        statements contained in all applications for
                        registration of the Intellectual Property were true and
                        correct as of the date of this Agreement of such
                        applications. Each of trade marks and trade names
                        included in the Intellectual Property is in use.

<PAGE>
                                       15

                  3.1.10.4. The use of the Intellectual Property does not
                        infringe, and the Vendor has not received any notice,
                        complaint, threat or claim alleging infringement of, any
                        patent, trade mark, trade name, copyright, industrial
                        design, trade secret or other Intellectual Property or
                        propriety right of any other person, and the conduct of
                        the Business does not include any activity which may
                        constitute passing off.

            3.1.11. Affiliates. None of the Purchased Assets are owned or
                  operated by any Affiliate of the Vendor.

            3.1.12. Partnerships or Joint Ventures. Except as set forth on
                  Schedule 1.1.17, the Vendor is not, in relation to any part of
                  the Purchased Assets, a partner or participant in any
                  partnership, joint venture, profit-sharing arrangement or
                  other association of any kind and is not party to any
                  agreement under which the Vendor agrees to carry on any part
                  of the Business in such manner or by which the Vendor agrees
                  to share any revenue or profit relating to the Purchased
                  Assets with any other person.

            3.1.13. Customers. The Vendor has delivered to the Purchaser a true
                  and complete list of all customers of the Business, as it
                  relates to the Purchased Assets, as of the date of this
                  Agreement. The Vendor is the sole and exclusive owner of, and
                  has the unrestricted right to use, such customer list. Other
                  than as set forth on Schedule 3.1.13, neither the customer
                  list nor any information relating to the customers of the
                  Business, as they related to the Purchased Assets, have,
                  within three years prior to the date of this Agreement, been
                  made available to any person other than the Purchaser except
                  pursuant to a written agreement containing an obligation of
                  confidentiality. The Vendor has no knowledge of any facts
                  which could reasonably be expected to result in the loss of
                  any customers or sources of revenue of the Business which, in
                  the aggregate, would materially affect the Purchased Assets.

            3.1.14. Warranties and Discounts. Except as described in Schedule
                  3.1.14 attached hereto,

                  3.1.14.1. the Vendor has not given any guarantee or warranty
                        in respect of any of the products sold or the services
                        provided as part of the Purchased Assets, except
                        warranties made in the form of the standard written
                        warranty, a copy of which has been provided to the
                        Purchaser, and except for warranties implied by law;

                  3.1.14.2. except as set forth on Schedule 3.1.14, during each
                        of the three fiscal years of the Vendor ended
                        immediately preceding the date, no claims have been made
                        against the Vendor for breach of warranty or contract
                        requirement or negligence or for a price adjustment or
                        other concession in respect of any defect in or failure
                        to perform or deliver any products, services or work in
                        connection with the Purchased Assets which had, in any
                        such year, an aggregate cost exceeding $1,000;

<PAGE>
                                       16

                  3.1.14.3. there are no repair contracts or maintenance
                        obligations in favor of the customers or users of the
                        Purchased Assets except obligations incurred in
                        accordance with standard terms, a copy of which has been
                        provided to the Purchaser;

                  3.1.14.4. the Vendor is not now subject to any agreement or
                        commitment, and the Vendor has not, within three years
                        prior to the date of this Agreement, entered into any
                        agreement with or made any commitment to any customer of
                        the Business in relation to the Purchased Assets which
                        would require the repurchase of any products sold to
                        such customers or adjustment of any price or the
                        granting of any refund, discount or other concession to
                        such customer; and

                  3.1.14.5. the Vendor is not required to provide any letters of
                        credit, bonds or other financial security arrangements
                        in connection with any transactions with any suppliers
                        or customers of the Business relating to the Purchased
                        Assets.

            3.1.15. Licences, Agency and Distributorship Agreements. Schedule
                  1.1.17 attached hereto lists all agreements to which the
                  Vendor is a party or by which it is bound under which the
                  right to manufacture, use or market any product, service,
                  technology, information, data, computer hardware or software
                  or other property used in or produced or sold by the Business
                  in relation to the Purchased Assets has been granted, licensed
                  or otherwise provided to the Vendor or by the Vendor to any
                  other person, or under which the Vendor has been appointed or
                  any person has been appointed by the Vendor as an agent,
                  distributor, licensee or franchisee for any of the foregoing.
                  Complete and correct copies of all of the agreements relating
                  to the License Rights have been provided to the Purchaser. The
                  Vendor is entitled to assign all of its interest in the
                  License Rights to the Purchaser subject to obtaining the
                  consents referred to in Schedule 3.1.3 attached hereto. None
                  of the agreements relating to the License Rights grant to any
                  person any authority to incur any liability or obligation or
                  to enter into any agreement on behalf of the Vendor.

            3.1.16. Outstanding Agreements. Other than as has been disclosed to
                  Vendor during due diligence, the Vendor is not a party to or
                  bound by any outstanding or executory agreement, contract or
                  commitment, whether written or oral, relating to the Purchased
                  Assets, except for those agreements set out in this Agreement
                  or in the Schedules hereto. Complete and correct copies of
                  each of the contracts, leases and agreements described in the
                  Schedules attached hereto have been provided to the Purchaser.

<PAGE>
                                       17

            3.1.17. Good Standing of Agreements. The Vendor is not in material
                  default or breach of any of its obligations under any one or
                  more contracts, agreements (written or oral), commitments,
                  indentures or other instruments to which it is a party or by
                  which it is bound relating to the Purchased Assets, and there
                  exists no state of facts which, after notice or lapse of time
                  or both, would constitute such a default or breach. All such
                  contracts, agreements, commitments, indentures and other
                  instruments are now in good standing and in full force and
                  effect without amendment thereto, the Vendor is entitled to
                  all benefits thereunder and, to the best of the knowledge of
                  the Vendor, the other parties to such contracts, agreements,
                  commitments, indentures and other instruments are not in
                  material default or breach of any of their obligations
                  thereunder. There are no contracts, agreements, commitments,
                  indentures or other instruments relating to the Purchased
                  Assets under which the Vendor's rights or the performance of
                  its obligations are dependent on or supported by the guarantee
                  of or any security provided by any other person.

            3.1.18. Compliance with Laws. In relation to the Business, the
                  Vendor to the best of its knowledge is not in violation of any
                  federal, state or other law, regulation or order of any
                  government or governmental or regulatory authority, domestic
                  or foreign.

            3.1.19. Accounts Receivable. All Accounts Receivable are bona fide
                  and good and to the best of its knowledge, subject to an
                  allowance for doubtful accounts taken in accordance with
                  generally accepted accounting principles, collectible without
                  set-off or counterclaim.

            3.1.20. Copies of Documents. Complete and correct copies (including
                  all amendments) of all contracts, leases and other documents
                  referred to in this Agreement or any Schedule hereto or
                  required to be disclosed hereby have been delivered to the
                  Purchaser.

            3.1.21. Disclosure. No representation or warranty contained in this
                  Section 3.1, and no statement contained in any Schedule,
                  certificate, list, summary or other disclosure document
                  provided or to be provided to the Purchaser pursuant hereto,
                  or in connection with the transactions contemplated hereby,
                  contains or will contain any untrue statement of a material
                  fact, or omits or will omit to state any material fact which
                  is necessary in order to make the statements contained therein
                  not misleading.

<PAGE>
                                       18

            3.1.22. Recitals. The recitals set forth in the first page of this
                  Agreement are true and correct.

            3.1.23. Antitrust. Any waiting period applicable to the transactions
                  contemplated herein under the HSR Act shall have been
                  terminated or shall have expired.

      3.2.  REPRESENTATIONS AND WARRANTIES BY THE PURCHASER AND/OR WORKSTREAM.
            The Purchaser and/or Workstream hereby represents and warrants to
            the Vendor as follows, and confirms that the Vendor is relying on
            the accuracy of each of such representations and warranties in
            connection with the sale of the Purchased Assets and the completion
            of the other transactions hereunder:

            3.2.1. Corporate Authority and Binding Obligation. The Purchaser is
                  a corporation duly incorporated and validly subsisting in all
                  respects under the laws of its jurisdiction of incorporation.
                  The Purchaser has good right, full corporate power and
                  absolute authority to enter into this Agreement and to
                  purchase the Purchased Assets from the Vendor in the manner
                  contemplated herein and to perform all of the Purchaser's
                  obligations under this Agreement. The Purchaser and its
                  shareholders and board of directors have taken all necessary
                  or desirable actions, steps and corporate and other
                  proceedings to approve or authorize, validly and effectively,
                  the entering into of, and the execution, delivery and
                  performance of, this Agreement and the purchase of the
                  Purchased Assets by the Purchaser from the Vendor. This
                  Agreement is a legal, valid and binding obligation of the
                  Purchaser, enforceable against it in accordance with its
                  terms.

            3.2.2. Contractual and Regulatory Approvals. Except as specified in
                  Schedule 3.2.2 attached hereto, the Purchaser is not under any
                  obligation, contractual or otherwise to request or obtain the
                  consent of any person, and no permits, licences,
                  certifications, authorizations or approvals of, or
                  notifications to, any federal, state, municipal or local
                  government or governmental agency, board, commission or
                  authority are required to be obtained by the Purchaser in
                  connection with the execution, delivery or performance by the
                  Purchaser of this Agreement or the completion of any of the
                  transactions contemplated herein. Complete and correct copies
                  of any agreements under which the Purchaser is obligated to
                  request or obtain any such consent have been provided to the
                  Vendor.

<PAGE>
                                       19

            3.2.3. No Conflicts. Except as set forth in Schedule 3.2.3 attached
                  hereto, the execution, delivery and performance of this
                  Agreement by the Purchaser and Workstream and the consummation
                  by the Purchaser and Workstream of the transactions
                  contemplated herein and therein do not and will not (i)
                  violate any provision of the Purchaser or Workstream's
                  Articles or Bylaws, (ii) conflict with, or constitute a
                  default (or an event which with notice or lapse of time or
                  both would become a default) under, or give to others any
                  rights of termination, amendment, acceleration or cancellation
                  of, any agreement, mortgage, deed of trust, indenture, note,
                  bond, license, lease agreement, instrument or obligation to
                  which the Purchaser or Workstream is a party or by which any
                  of its respective properties or assets are bound, (iii) create
                  or impose a lien, mortgage, security interest, charge or
                  encumbrance of any nature whatsoever on any property of the
                  Purchaser or Workstream under any agreement or any commitment
                  to which the Purchaser or Workstream is a party or by which
                  the Purchaser or Workstream is bound or by which any of its
                  respective properties or assets are bound, or (iv) result in a
                  violation of any federal, state, local or foreign statute,
                  rule, regulation, order, judgment or decree (including federal
                  and state securities laws and regulations) applicable to the
                  Purchaser or Workstream or any of its subsidiaries or by which
                  any property or asset of the Purchaser or Workstream or any of
                  its subsidiaries are bound or affected, except, in all cases
                  other than violations pursuant to clause (i) above, for such
                  conflicts, defaults, terminations, amendments, acceleration,
                  cancellations and violations as would not, individually or in
                  the aggregate, have a Material Adverse Effect. The business of
                  the Purchaser or Workstream and its subsidiaries is not being
                  conducted in violation of any laws, ordinances or regulations
                  of any governmental entity, except for possible violations
                  which singularly or in the aggregate do not and will not have
                  a Material Adverse Effect. The Purchaser or Workstream is not
                  required under federal, state or local law, rule or regulation
                  to obtain any consent, authorization or order of, or make any
                  filing or registration with, any court or governmental agency
                  in order for it to execute, deliver or perform any of its
                  obligations under this Agreement, provided that, for purposes
                  of the representation made in this sentence, the Purchaser and
                  Workstream is assuming and relying upon the accuracy of the
                  relevant representations and agreements of the Vendor herein.

            3.2.4. Governmental Approvals. Except as set forth in the Commission
                  Documents or on Schedule 3.2.4 hereto, and except for the
                  filing of any notice prior or subsequent to the Closing Date
                  that may be required under applicable state or federal
                  securities laws (which if required, shall be filed on a timely
                  basis), no authorization, consent, approval, license exemption
                  of, filing or registration with any court or governmental
                  department, commission, board, bureau, agency or
                  instrumentality, domestic or foreign, is or will be necessary
                  for, or in connection with, the execution, or the performance
                  by the Purchaser or Workstream of its obligations under this
                  Agreement.

<PAGE>
                                       20

            3.2.5. Investment Company Act Status. The Purchaser and Workstream
                  is not, and as a result of and immediately upon the Closing
                  Date will not be, an "investment company" or a company
                  "controlled" by an "investment company," within the meaning of
                  the Investment Company Act of 1940, as amended

            3.2.6. Bulk Transfer Laws. The Buyer acknowledges that the Seller
                  will not comply with the provisions of the bulk transfer Laws
                  of any jurisdiction in connection with the transactions
                  contemplated by this Agreement. The Seller and Ryan Tweedie,
                  Tony Molnar, Chris Mueller and Dick Tonnemacher hereby jointly
                  and severally covenant and agree to indemnify and hold
                  harmless from and against any and all claims of the Seller's
                  creditors or others asserted against the Buyer or any of its
                  Affiliates resulting from such non-compliance

4.    SURVIVAL AND LIMITATIONS OF REPRESENTATIONS AND WARRANTIES

      4.1.  SURVIVAL OF WARRANTIES BY THE VENDOR. The representations and
            warranties made by the Vendor and contained in this Agreement, or
            contained in any document or certificate given in order to carry out
            the transactions contemplated hereby, will survive the closing of
            the purchase of the Purchased Assets provided for herein and,
            notwithstanding such closing or any investigation made by or on
            behalf of the Purchaser, Workstream or any other person or any
            knowledge of the Purchaser, Workstream or any other person, shall
            continue in full force and effect for the benefit of the Purchaser
            or Workstream, except that no Warranty Claim may be made or brought
            by the Purchaser or Workstream after the date which is two years
            following the Closing Date.

            After the expiration of the period of time referred to in this
            section 4.1, the Vendor will be released from all obligations and
            liabilities in respect of the representations and warranties made by
            the Vendor and contained in this Agreement or in any document or
            certificate given in order to carry out the transactions
            contemplated hereby except with respect to any claims made by the
            Purchaser and/or Workstream in writing prior to the expiration of
            such period.

<PAGE>
                                       21

      4.2.  SURVIVAL OF WARRANTIES BY PURCHASER AND WORKSTREAM. The
            representations and warranties made by the Purchaser and/or
            Workstream and contained in this Agreement or contained in any
            document or certificate given in order to carry out the transactions
            contemplated hereby will survive the closing of the purchase and
            sale of the Purchased Assets provided for herein and,
            notwithstanding such closing or any investigation made by or on
            behalf of the Vendor or any other person or any knowledge of the
            Vendor or any other person, shall continue in full force and effect
            for the benefit of the Vendor except that no Warranty Claim may be
            made or brought by the Vendor after the date which is two years
            following the Closing Date.

            After the expiration of the period of time referred to in this
            section 4.2, the Purchaser and Workstream will be released from all
            obligations and liabilities in respect of the representations and
            warranties made by the Purchaser and/or Workstream and contained in
            this Agreement or in any document or certificate given in order to
            carry out the transactions contemplated hereby except with respect
            to any claims made by the Purchaser and/or Workstream in writing
            prior to the expiration of such period.

      4.3.  LIMITATIONS ON WARRANTY CLAIMS.

            4.3.1. The Purchaser and/or Workstream shall not be entitled to make
                  a Warranty Claim if the Purchaser and/or Workstream has been
                  advised in writing or otherwise has actual knowledge prior to
                  the Closing Time of the inaccuracy, non-performance,
                  non-fulfilment or breach which is the basis for such Warranty
                  Claim and the Purchaser and/or Workstream completes the
                  transactions hereunder notwithstanding such inaccuracy,
                  non-performance, non-fulfilment or breach.

            4.3.2. The amount of any damages which may be claimed by the
                  Purchaser and/or Workstream pursuant to a Warranty Claim shall
                  be calculated to be the cost or loss to the Purchaser and/or
                  Workstream after giving effect to any insurance proceeds
                  available to the Purchaser and/or Workstream in relation to
                  the matter which is the subject of the Warranty Claim.

            4.3.3. The Purchaser and/or Workstream shall not be entitled to make
                  any Warranty Claim until the aggregate amount of all damages,
                  losses, liabilities and expenses incurred by the Purchaser
                  and/or Workstream as a result of all misrepresentations and
                  breaches of warranties contained in this Agreement or
                  contained in any document or certificate given in order to
                  carry out the transactions contemplated hereby, after taking
                  into account section 4.3.2 of this section, is equal to
                  $20,000. After the aggregate amount of such damages, losses,
                  liabilities and expenses incurred by the Purchaser and/or
                  Workstream exceeds $20,000, the Purchaser and/or Workstream
                  shall only be entitled to make Warranty Claims to the extent
                  that such aggregate amount, after taking into account the
                  provisions of section 4.3.2 of this section, exceeds $20,000.

<PAGE>
                                       22

            4.3.4. Notwithstanding any other provisions of this Agreement or of
                  any agreement, certificate or other document made in order to
                  carry out the transactions contemplated hereby, the maximum
                  aggregate liability of the Vendor together in respect of all
                  Warranty Claims by the Purchaser and/or Workstream will be
                  limited to an amount equal to the Purchase Price.

5.    COVENANTS

      5.1.  COVENANTS BY THE VENDOR. The Vendor covenants to the Purchaser and
            Workstream that it will do or cause to be done the following:

            5.1.1. Investigation of Business and Examination of Documents.
                  During the Interim Period, the Vendor will provide access to
                  and will permit the Purchaser, through its representatives, to
                  make such investigation of, the operations, properties, assets
                  and records of the Business and of its financial and legal
                  condition as the Purchaser deems necessary or advisable to
                  familiarize itself with such operations, properties, assets,
                  records and other matters relating to the Purchased Assets.
                  Without limiting the generality of the foregoing, during the
                  Interim Period the Vendor will permit the Purchaser and its
                  representatives to have access to the premises used in
                  connection with the Business and will produce for inspection
                  and provide copies to the Purchaser of:

                  5.1.1.1. all agreements and other documents referred to in
                        Section 3.1 or in any of the Schedules attached hereto
                        and all other documents of or in the possession of the
                        Vendor relating to the Purchased Assets; and

                  5.1.1.2. all other information which, in the reasonable
                        opinion of the Purchaser's representatives, is required
                        in order to make an examination of the Purchased Assets.

            5.1.2. Continuation of Representations and Warranties. Any
                  investigations and inspections conducted by Purchaser shall
                  not mitigate or affect the representations and warranties of
                  the Vendor hereunder, which shall continue in full force and
                  effect.

<PAGE>
                                       23

            5.1.3. Transfer of Purchased Assets. At or before the Closing Time,
                  the Vendor will cause all necessary steps and corporate
                  proceedings to be taken in order to permit the Purchased
                  Assets to be duly and regularly transferred to the Purchaser.

            5.1.4. Forms of Conveyance. At the Closing Time, the Vendor will
                  deliver to the Purchaser good and marketable title to and
                  exclusive possession of the Purchased Assets, free and clear
                  of any and all Encumbrances. At the Closing Time, the Vendor
                  will execute and deliver to the Purchaser one or more forms of
                  general conveyance, or bills of sale, deeds, transfers and
                  other documents reasonably requested by the Purchaser in
                  respect of the assignment, conveyance, transfer and delivery
                  of the Purchased Assets to the Purchaser in form which is
                  registrable and acceptable to the Purchaser.

            5.1.5. Transfer of Assumed Contracts. At the Closing Time, the
                  Vendor will deliver to the Purchaser:

                  5.1.5.1. an executed original or certified to copy of each of
                        the Assumed Contracts and, as to any copy to which
                        authenticity is certified, an officer's certificate
                        attesting thereto and to the absence of an original,

                  5.1.5.2. one or more forms of assignment of the Assumed
                        Contracts in form acceptable to the Purchaser, and

                  5.1.5.3. consents to the assignment of all of the Assumed
                        Contracts under which consent is required executed by
                        all persons whose consent is required in form acceptable
                        to the Purchaser.

      5.2.  COVENANTS BY THE PURCHASER AND/OR WORKSTREAM. The Purchaser and/or
            Workstream covenants to the Vendor that it will do or cause to be
            done the following:

            5.2.1. Confidentiality. Prior to the Closing Time and, if the
                  transaction contemplated hereby is not completed, at all times
                  after the Closing Time, the Purchaser will keep confidential
                  all information obtained by it relating to the Purchased
                  Assets and Business, except such information which:

                  5.2.1.1. prior to the date of this Agreement was already in
                        the possession of the Purchaser not pursuant to any
                        obligation of confidentiality, as demonstrated by
                        written records,

<PAGE>
                                       24

                  5.2.1.2. is generally available to the public, other than as a
                        result of a disclosure by the Purchaser, or

                  5.2.1.3. is made available to the Purchaser on a
                        non-confidential basis from a source other than the
                        Vendor, or its representatives.

                  5.2.1.4. The Purchaser further agrees that such information
                        will be disclosed only to those of its employees and
                        representatives of its advisors who need to know such
                        information for the purposes of evaluating and
                        implementing the transaction contemplated hereby.
                        Notwithstanding the foregoing provisions of this
                        paragraph, the obligation to maintain the
                        confidentiality of such information will not apply to
                        the extent that disclosure of such information is
                        required in connection with governmental or other
                        applicable filings relating to the transactions
                        hereunder, provided that, in such case, unless the
                        Vendor otherwise agrees, the Purchaser will, if
                        possible, request confidentiality in respect of such
                        governmental or other filings. If the transactions
                        contemplated hereby are not consummated for any reason,
                        the Purchaser will return forthwith, without retaining
                        any copies, all information and documents obtained from
                        the Vendor.

6.    CONDITIONS

      6.1.  CONDITIONS TO THE OBLIGATIONS OF THE PURCHASER. Notwithstanding
            anything herein contained, the obligation of the Purchaser and/or
            Workstream to complete the transactions provided for herein will be
            subject to the fulfilment of the following conditions by the Vendor
            at or prior to the Closing Time and the Vendor covenants to ensure
            that such conditions are fulfilled.

            6.1.1. Accuracy of Representations and Warranties and Performance of
                  Covenants. The representations and warranties of the Vendor
                  contained in this Agreement or in any documents delivered in
                  order to carry out the transactions contemplated hereby shall
                  be true and accurate on the date and at the Closing Time with
                  the same force and effect as though such representations and
                  warranties had been made as of the Closing Time (regardless of
                  the date as of which the information in this Agreement or in
                  any Schedule or other document made pursuant hereto is given).
                  In addition, the Vendor shall have complied with all covenants
                  and agreements herein agreed to be performed or caused to be
                  performed by them at or prior to the Closing Time. In
                  addition, the Vendor shall have delivered to the Purchaser a
                  certificate in the form of Schedule 6.1.1 attached hereto
                  confirming that the facts with respect to each of such
                  representations and warranties by the Vendor are as set out
                  herein at the Closing Time and that the Vendor has performed
                  all covenants required to be performed by them hereunder.

<PAGE>
                                       25

            6.1.2. Material Adverse Changes. During the Interim Period there
                  will have been no change in the Purchased Assets, howsoever
                  arising, except changes which have occurred in the ordinary
                  course of the Business and which, individually or in the
                  aggregate, have not affected and may not affect the Purchased
                  Assets in any material adverse respect. Without limiting the
                  generality of the foregoing, during the Interim Period no
                  damage to or destruction of any material part of the Purchased
                  Assets shall have occurred, whether or not covered by
                  insurance.

            6.1.3. No Restraining Proceedings. No order, decision or ruling of
                  any court, tribunal or regulatory authority having
                  jurisdiction shall have been made, and no action or proceeding
                  shall be pending or threatened which, in the opinion of
                  counsel to the Purchaser, is likely to result in an order,
                  decision or ruling,

                  6.1.3.1. to disallow, enjoin, prohibit or impose any
                        limitations or conditions on the purchase and sale of
                        the Purchased Assets contemplated hereby or the right of
                        the Purchaser to own the Purchased Assets; or

                  6.1.3.2. to impose any limitations or conditions which may
                        have a Material Adverse Effect on the Purchased Assets.

            6.1.4. Consents. All consents required to be obtained in order to
                  carry out the transactions contemplated hereby in compliance
                  with all laws and agreements binding on the parties hereto
                  shall have been obtained, including the consents referred to
                  in Schedules 3.1.3 and 3.2.2 attached hereto.

            6.1.5. Deliveries at Closing. At the Closing Time, the Vendor shall
                  have delivered and/or Purchaser shall have received, all in
                  form satisfactory to Purchaser:

                  6.1.5.1. an opinion of legal counsel for the Vendor in the
                        form of the draft opinion attached hereto as Schedule
                        6.1.5, which opinion may rely on certificates of one or
                        more senior officers of the Vendor as to factual matters
                        and may rely upon opinions of local counsel with respect
                        to matters governed by laws other than the laws of the
                        State of New Jersey and the federal laws of United
                        States applicable in the State of New Jersey;

<PAGE>
                                       26

                  6.1.5.2. a certificate of the Vendor in the form of the draft
                        attached hereto as Schedule 6.1.5.2, whereby the Vendor
                        assigns all of its intellectual property rights in the
                        assets listed in Schedule 2.1.6;

                  6.1.5.3. form of assignment and assumption agreement whereby
                        the Vendor assigns, and the Purchaser assumes, all of
                        the Assumed Contracts;

                  6.1.5.4. bill of sale for the Purchased Assets

                  6.1.5.5. employment agreements for Ryan Tweedie, Tony Molnar,
                        Chris Mueller and Dick Tonnemacher are to be negotiated
                        by Ryan Tweedie CEO and Mike Mullarkey CEO pursuant to
                        existing and ongoing discussions;

                  6.1.5.6. a promissory note in the amount of $325,000, executed
                        by the Vendor ("Promissory Note");

                  6.1.5.7. a guarantee of the Promissory Note, in an amount not
                        to exceed $100,000; and

                  6.1.5.8. any other documents required to be delivered under
                        this Agreement.

            6.1.6. Further Assurances. On and at any time after the Closing
                  Time, the Vendor shall furnish the Purchaser at no additional
                  charge with such further written documentation in order to
                  enable the Purchaser to establish, prove or perfect the
                  Purchaser's ownership of any of the assets herein conveyed.

      6.2.  WAIVER OR TERMINATION BY PURCHASER AND/OR WORKSTREAM. The conditions
            contained in Section 6.1 are inserted for the exclusive benefit of
            the Purchaser and/or Workstream and may be waived in whole or in
            part by the Purchaser and/or Workstream at any time. The Vendor
            acknowledges that the waiver by the Purchaser and/or Workstream of
            any condition or any part of any condition shall constitute a waiver
            only of such condition or such part of such condition, as the case
            may be, and shall not constitute a waiver of any covenant,
            agreement, representation or warranty made by the Vendor herein that
            corresponds or is related to such condition or such part of such
            condition, as the case may be. If any of the conditions contained in
            Section 6.1 are not fulfilled or complied with as herein provided,
            the Purchaser and/or Workstream may, at or prior to the Closing Time
            at its option, rescind this Agreement by notice in writing to the
            Vendor and in such event the Purchaser and Workstream shall be
            released from all obligations hereunder and, unless the condition or
            conditions which have not been fulfilled are reasonably capable of
            being fulfilled or caused to be fulfilled by the Vendor, then the
            Vendor shall also be released from all obligations hereunder.

<PAGE>
                                       27

      6.3.  CONDITIONS TO THE OBLIGATIONS OF THE VENDOR. Notwithstanding
            anything herein contained, the obligations of the Vendor to complete
            the transactions provided for herein will be subject to the
            fulfilment of the following conditions at or prior to the Closing
            Time, and the Purchaser and/or Workstream will use its best efforts
            to ensure that such conditions are fulfilled.

            6.3.1. Accuracy of Representations and Warranties and Performance of
                  Covenants. The representations and warranties of the Purchaser
                  and Workstream contained in this Agreement or in any documents
                  delivered in order to carry out the transactions contemplated
                  hereby will be true and accurate on the date and at the
                  Closing Time with the same force and effect as though such
                  representations and warranties had been made as of the Closing
                  Time (regardless of the date as of which the information in
                  this Agreement or any such Schedule or other document made
                  pursuant hereto is given). In addition, the Purchaser and
                  Workstream shall have complied with all covenants and
                  agreements herein agreed to be performed or caused to be
                  performed by it at or prior to the Closing Time. In addition,
                  the Purchaser and Workstream shall have delivered to the
                  Vendor a certificate in the form of Schedule 6.3.1 attached
                  hereto confirming that the facts with respect to each of the
                  representations and warranties of the Purchaser and Workstream
                  are as set out herein at the Closing Time and that the
                  Purchaser and Workstream has performed each of the covenants
                  required to be performed by it hereunder.

            6.3.2. No Restraining Proceedings. No order, decision or ruling of
                  any court, tribunal or regulatory authority having
                  jurisdiction shall have been made, and no action or proceeding
                  shall be pending or threatened which, in the opinion of
                  counsel to the Vendor, is likely to result in an order,
                  decision or ruling, to disallow, enjoin or prohibit the
                  purchase and sale of the Purchased Assets contemplated hereby.

<PAGE>
                                       28

            6.3.3. Consents. All consents required to be obtained in order to
                  carry out the transactions contemplated hereby in compliance
                  with all laws and agreements binding upon the parties hereto
                  shall have been obtained, including the consents referred to
                  in Schedules 3.1.3 and 3.2.2 attached hereto.

            6.3.4. Resolutions. Prior to the Closing, the Board of Directors of
                  the Purchaser and Workstream shall have adopted resolutions
                  consistent with this Agreement in a form reasonably acceptable
                  to the Vendor.

            6.3.5. Deliveries at Closing. At the Closing Time, the Purchaser
                  shall have delivered and/or Vendor shall have received, all in
                  form satisfactory to Vendor:

                  6.3.5.1. form of assignment and assumption agreement whereby
                        the Vendor assigns, and the Purchaser assumes, all of
                        the Assumed Contracts;

                  6.3.5.2. form of assumption agreement whereby the Purchaser
                        assumes all of the Assumed Liabilities;

                  6.3.5.3. employment agreements for Ryan Tweedie, Tony Molnar,
                        Chris Mueller and Dick Tonnemacher are to be negotiated
                        by Ryan Tweedie CEO and Mike Mullarkey CEO pursuant to
                        existing and ongoing discussions;

                  6.3.5.4. certified or bank check payable to Vendor in the
                        amount of $325,000 in connection with the delivery of
                        the Promissory Note; and

                  6.3.5.5. any other documents required to be delivered under
                        this Agreement.

      6.4.  WAIVER OR TERMINATION BY VENDOR. The conditions contained in Section
            6.3 are inserted for the exclusive benefit of the Vendor and may be
            waived in whole or in part by the Vendor at any time. The Purchaser
            and Workstream acknowledges that the waiver by the Vendor of any
            condition or any part of any condition shall constitute a waiver
            only of such condition or such part of such condition, as the case
            may be, and shall not constitute a waiver of any covenant,
            agreement, representation or warranty made by the Purchaser and/or
            Workstream herein that corresponds or is related to such condition
            or such part of such condition, as the case may be. If any of the
            conditions contained in Section 6.3 are not fulfilled or complied
            with as herein provided, the Vendor may, at or prior to the Closing
            Time at their option, rescind this Agreement by notice in writing to
            the Purchaser and Workstream and in such event the Vendor shall each
            be released from all obligations hereunder and, unless the condition
            or conditions which have not been fulfilled are reasonably capable
            of being fulfilled or caused to be fulfilled by the Purchaser and/or
            Workstream, then the Purchaser and Workstream shall also be released
            from all obligations hereunder.

<PAGE>
                                       29

7.    CLOSING

      7.1.  CLOSING ARRANGEMENTS. Subject to the terms and conditions , the
            transactions contemplated herein shall be closed at the Closing Time
            at the offices of Perley-Robertson, Hill & McDougall LLP, 90 Sparks
            Street, 4th Floor, Ottawa, ON K1P 1E2, Canada or at such other place
            or places as may be mutually agreed on by the Vendor and the
            Purchaser.

      7.2.  DOCUMENTS TO BE DELIVERED. At or before the Closing Time, the Vendor
            shall execute, or cause to be executed, and shall deliver, or cause
            to be delivered, to the Purchaser all documents set forth in Section
            6 and all other documents, instruments and things which are to be
            delivered by the Vendor pursuant to the provisions of this
            Agreement, and the Purchaser and/or Workstream shall execute, or
            cause to be executed, and shall deliver, or cause to be delivered,
            to the Vendor all cheques or bank drafts and all documents,
            instruments and things which the Purchaser and/or Workstream is to
            deliver or to cause to be delivered pursuant to the provisions of
            this Agreement.

8.    INDEMNIFICATION AND SET-OFF

      8.1.  INDEMNITY BY THE VENDOR AND THE PURCHASER.

            8.1.1. The parties hereto (in this Section 8, an "Indemnifying
                  Party") covenant and agree to indemnify and save each other
                  (in this Section 8, each being referred to as an "Indemnified
                  Party") harmless from and against any claims, demands,
                  actions, causes of action, damage, loss, deficiency, cost,
                  liability and expense which may be made or brought against the
                  Indemnified Party or which the Indemnified Party may suffer or
                  incur as a result of, in respect of or arising out of:

                  8.1.1.1. any non-performance or non-fulfilment of any covenant
                        or agreement on the part of the Indemnifying Party
                        contained in this Agreement or in any document given in
                        order to carry out the transactions contemplated hereby;

<PAGE>
                                       30

                  8.1.1.2. any misrepresentation, inaccuracy, incorrectness or
                        breach of any representation or warranty made by the
                        Indemnifying Party contained in this Agreement or
                        contained in any document or certificate given in order
                        to carry out the transactions contemplated hereby;

                  8.1.1.3. any non-compliance with any federal, state, local,
                        municipal, foreign, international or other
                        administrative order, constitution, law, ordinance,
                        statute, or treaty applicable to Indemnifying Party in
                        the carrying out of the transaction contemplated herein;
                        and

                  8.1.1.4. all costs and expenses including, without limitation,
                        reasonable attorney's fees, incidental to, arising from
                        or in respect of the foregoing.

            8.1.2. The obligations of indemnification by the Indemnifying Party
                  pursuant to paragraph 8.1.1 of this section will be:

                  8.1.2.1. subject to the limitations referred to in Sections
                        4.1 and 4.2 with respect to the survival of the
                        representations and warranties by the Indemnifying
                        Party;

                  8.1.2.2. subject to the limitations referred to in Section
                        4.3; and

                  8.1.2.3. subject to the provisions of Section 8.3.

      8.2.  INDEMNITY OF THE PURCHASER.

            8.2.1. The Vendor hereby further agrees to indemnify and save the
                  Purchaser and Workstream (collectively, in this Section 8, the
                  "Purchaser") harmless from and against any claims, demands,
                  actions, causes of action, damage, loss, deficiency, cost,
                  liability and expense which may be made or brought against the
                  Purchaser or which the Purchaser may suffer or incur as a
                  result of, in respect of or arising out of:

                        8.2.1.1. any claim for a debt, obligation or liability
                              which is not specifically assumed by the Purchaser
                              pursuant to this Agreement;

<PAGE>
                                       31

                        8.2.1.2. any suit, action, proceeding, claim,
                              investigation pending or threatened against or
                              affecting the Purchased Assets or the Business,
                              regardless of whether such is disclosed in a
                              Schedule hereto, that arises from the conduct of
                              the Business prior to the Closing Date; and

                        8.2.1.3. all costs and expenses including, without
                              limitation, reasonable attorney's fees, incidental
                              to, arising from or in respect of the foregoing.

            8.2.2. The obligations of indemnification by the Vendor pursuant to
                  paragraph 8.2.1 of this section will be:

                        8.2.2.1. subject to the limitations referred to in
                              Section 4.1 with respect to the survival of the
                              representations and warranties by the Vendor;

                        8.2.2.2. subject to the limitations referred to in
                              Section 4.3; and

                        8.2.2.3. subject to the provisions of Section 8.3.

      8.3.  PROVISIONS RELATING TO INDEMNITY CLAIMS. The following provisions
            will apply to any claim by the Indemnified Party or the Purchaser,
            whatever the case may be, for indemnification by the Indemnifying
            Party or the Vendor, whatever the case may be, pursuant to Sections
            8.1 and 8.2 (an "Indemnity Claim").

            8.3.1. Promptly after becoming aware of any matter that may give
                  rise to an Indemnity Claim, the Indemnified Party or the
                  Purchaser will provide to the Indemnifying Party or the Vendor
                  written notice of the Indemnity Claim specifying (to the
                  extent that information is available) the factual basis for
                  the Indemnity Claim and the amount of the Indemnity Claim or,
                  if an amount is not then determinable, an estimate of the
                  amount of the Indemnity Claim, if an estimate is feasible in
                  the circumstances.

            8.3.2. If an Indemnity Claim relates to an alleged liability to any
                  other person (a "Third Party Liability"), including without
                  limitation any governmental or regulatory body or any taxing
                  authority, which is of a nature such that the Indemnified
                  Party or the Purchaser is required by applicable law to make a
                  payment to a third party before the relevant procedure for
                  challenging the existence or quantum of the alleged liability
                  can be implemented or completed, then the Indemnified Party or
                  the Purchaser may, notwithstanding the provisions of sections
                  8.3.3. and 8.3.4 of this section, make such payment and
                  forthwith demand reimbursement for such payment from the
                  Indemnifying Party or the Vendor in accordance with this
                  Agreement; provided that, if the alleged Third Party Liability
                  as finally determined on completion of settlement negotiations
                  or related legal proceedings is less than the amount which is
                  paid by the Indemnifying Party or the Vendor in respect of the
                  related Indemnity Claim, then the Indemnified Party or the
                  Purchaser shall forthwith following the final determination
                  pay to the Indemnifying Party or the Vendor the amount by
                  which the amount of the Third Party Liability as finally
                  determined is less than the amount which is so paid by the
                  Indemnifying Party or the Vendor.

<PAGE>
                                       32

            8.3.3. The Indemnified Party or the Purchaser shall not negotiate,
                  settle, compromise or pay (except in the case of payment of a
                  judgement) any Third Party Liability as to which it proposes
                  to assert an Indemnity Claim, except with the prior consent of
                  the Indemnifying Party or the Vendor (which consent shall not
                  be unreasonably withheld or delayed), unless there is a
                  reasonable possibility that such Third Party Liability may
                  materially and adversely affect the Purchased Assets or the
                  Indemnified Party or the Purchaser, in which case the
                  Indemnified Party or the Purchaser shall have the right, after
                  notifying the Indemnifying Party or the Vendor, to negotiate,
                  settle, compromise or pay such Third Party Liability without
                  prejudice to its rights of indemnification hereunder. The
                  Indemnified Party or the Purchaser shall notify the
                  Indemnifying Party or the Vendor within one (1) week of any
                  third party claims being asserted.

            8.3.4. With respect to any Third Party Liability, provided the
                  Indemnifying Party or the Vendor first admit the Indemnified
                  Party's or the Purchaser's right to indemnification for the
                  amount of such Third Party Liability which may at any time be
                  determined or settled, then, in any legal, administrative or
                  other proceedings in connection with the matters forming the
                  basis of the Third Party Liability, the following procedures
                  will apply:

                        8.3.4.1. except as contemplated by subparagraph 8.3.4.3
                              of this section, the Indemnifying Party or the
                              Vendor will have the right to assume carriage of
                              the compromise or settlement of the Third Party
                              Liability and the conduct of any related legal,
                              administrative or other proceedings, but the
                              Indemnified Party or the Purchaser shall have the
                              right and shall be given the opportunity to
                              participate in the defence of the Third Party
                              Liability, to consult with the Indemnifying Party
                              or the Vendor in the settlement of the Third Party
                              Liability and the conduct of related legal,
                              administrative and other proceedings (including
                              consultation with counsel) and to disagree on
                              reasonable grounds with the selection and
                              retention of counsel, in which case counsel
                              satisfactory to the Indemnifying Party or the
                              Vendor and the Indemnified Party or the Purchaser
                              shall be retained by the Indemnifying Party or the
                              Vendor;

<PAGE>
                                       33

                        8.3.4.2. the Indemnifying Party or the Vendor will
                              co-operate with the Indemnified Party or the
                              Purchaser in relation to the Third Party
                              Liability, will keep it fully advised with respect
                              thereto, will provide it with copies of all
                              relevant documentation as it becomes available,
                              will provide it with access to all records and
                              files relating to the defence of the Third Party
                              Liability and will meet with representatives of
                              the Indemnified Party or the Purchaser at all
                              reasonable times to discuss the Third Party
                              Liability; and

                        8.3.4.3. notwithstanding subparagraphs 8.3.4.1 and
                              8.3.4.2 of this paragraph, the Indemnifying Party
                              or the Vendor will not settle the Third Party
                              Liability or conduct any legal, administrative or
                              other proceedings in any manner which could, in
                              the reasonable opinion of the Indemnified Party or
                              the Purchaser, have a material adverse affect on
                              the Purchased Assets or the Indemnified Party or
                              the Purchaser, except with the prior written
                              consent of the Indemnified Party or the Purchaser.

            8.3.5. If, with respect to any Third Party Liability, the
                  Indemnifying Party or the Vendor does not admit the
                  Indemnified Party's or the Purchaser's right to
                  indemnification or decline to assume carriage of the
                  settlement or of any legal, administrative or other
                  proceedings relating to the Third Party Liability, then the
                  following provisions will apply:

                        8.3.5.1. the Indemnified Party or the Purchaser, at its
                              discretion, may assume carriage of the settlement
                              or of any legal, administrative or other
                              proceedings relating to the Third Party Liability
                              and may defend or settle the Third Party Liability
                              on such terms as the Indemnified Party or the
                              Purchaser, acting in good faith, considers
                              advisable; and

                        8.3.5.2. any cost, lost, damage or expense incurred or
                              suffered by the Indemnified Party or the Purchaser
                              in the settlement or defence of such Third Party
                              Liability or the conduct of any legal,
                              administrative or other proceedings shall be added
                              to the amount of the Indemnity Claim.

<PAGE>
                                       34

            8.3.6. RIGHT OF SET-OFF. The Purchaser shall have the right to
                  satisfy any amount from time to time owing by it to the Vendor
                  by way of set-off against any amount from time to time owing
                  by the Vendor to the Purchaser, including any amount owing to
                  the Purchaser pursuant to the Vendor's, or the Vendor's as
                  Indemnifying Party, indemnification pursuant to Sections 8.1
                  and/or 8.2.

9.    GENERAL PROVISIONS

      9.1.  FURTHER ASSURANCES. Each of the Vendor and the Purchaser hereby
            covenants and agrees that at any time and from time to time after
            the Closing Date it will, on the request of the others, do, execute,
            acknowledge and deliver or cause to be done, executed, acknowledged
            and delivered all such further acts, deeds, assignments, transfers,
            conveyances and assurances as may be required for the better
            carrying out and performance of all the terms of this Agreement.

      9.2.  NOTICES

            9.2.1. Any notice, designation, communication, request, demand or
                  other document, required or permitted to be given or sent or
                  delivered hereunder to any party hereto shall be in writing
                  and shall be sufficiently given or sent or delivered if it is:

                        9.2.1.1. delivered personally to an officer or director
                              of such party,

                        9.2.1.2. sent to the party entitled to receive it by
                              registered mail, postage prepaid, or

                        9.2.1.3. sent by facsimile.

            9.2.2. Notices shall be sent to the following addresses or telecopy
                  numbers:

            in the case of the Vendor:

            HRSOFT, LLC

            10 Madison Avenue, 3rd Floor
            Morristown, NJ

            Attention:  Ryan Tweedie
            Facsimile:   973-984-5427

            With a copy to:

            OlenderFeldman, LLP
            2840 Morris Avenue
            Union, New Jersey 07083

            Attention:  Kurt D. Olender, Esq.
            Facsimile:  908-845-0362

<PAGE>
                                       35

            in the case of the Purchaser or Workstream:

            495 March Road, Suite 300
            Ottawa, ON  K2K 3G1

            Attention:  Michael F. Mullarkey
            Facsimile: 613-270-0774

            With a copy to:

            Perley-Robertson, Hill & McDougall LLP
            90 Sparks Street, 4th Floor
            Ottawa, ON  K1P 1E2

            Attention: Michael A. Gerrior
            Facsimile: 613-238-8775

            or to such other address or telecopier number as the party entitled
            to or receiving such notice, designation, communication, request,
            demand or other document shall, by a notice given in accordance with
            this section, have communicated to the party giving or sending or
            delivering such notice, designation, communication, request, demand
            or other document.

            9.2.3. Any notice, designation, communication, request, demand or
                  other document given or sent or delivered as aforesaid shall:

                        9.2.3.1. if delivered as aforesaid, be deemed to have
                              been given, sent, delivered and received on the
                              date of delivery;

                        9.2.3.2. if sent by mail as aforesaid, be deemed to have
                              been given, sent, delivered and received (but not
                              actually received) on the fourth Business Day
                              following the date of mailing, unless at any time
                              between the date of mailing and the fourth
                              Business Day thereafter there is a discontinuance
                              or interruption of regular postal service, whether
                              due to strike or lockout or work slowdown,
                              affecting postal service at the point of dispatch
                              or delivery or any intermediate point, in which
                              case the same shall be deemed to have been given,
                              sent, delivered and received in the ordinary
                              course of the mails, allowing for such
                              discontinuance or interruption of regular postal
                              service; and

<PAGE>
                                       36

                        9.2.3.3. if sent by telecopy machine, be deemed to have
                              been given, sent, delivered and received on the
                              date the sender receives the telecopy answer back
                              confirming receipt by the recipient.

      9.3.  COUNTERPARTS. This Agreement may be executed in several
            counterparts, each of which so executed shall be deemed to be an
            original, and such counterparts together shall constitute but one
            and the same instrument.

      9.4.  EXPENSES OF PARTIES. Each of the parties hereto shall bear all
            expenses incurred by it in connection with this Agreement including,
            without limitation, the charges of their respective counsel,
            accountants, financial advisors and finders.

      9.5.  BROKERAGE AND FINDER'S FEES. The Vendor jointly and severally agree
            to indemnify the Purchaser and hold it harmless in respect of any
            claim for brokerage or other commissions relative to this Agreement
            or the transactions contemplated hereby which is caused by actions
            of the Vendor. The Purchaser will indemnify the Vendor and hold them
            harmless in respect of any claim for brokerage or other commissions
            relative to this Agreement or to the transactions contemplated
            hereby which is caused by actions of the Purchaser.

      9.6.  ANNOUNCEMENTS. No announcement with respect to this agreement will
            be made by any party hereto without the prior approval of the other
            parties. The foregoing will not apply to any announcement by any
            party required in order to comply with laws pertaining to timely
            disclosure, provided that such party consults with the other parties
            before making any such announcement.

      9.7.  ASSIGNMENT. The rights of the Vendor hereunder shall not be
            assignable without the written consent of the Purchaser. The
            Purchaser may assign this contract without the written consent of
            the Vendor.

      9.8.  SUCCESSORS AND ASSIGNS. This Agreement shall be binding on and enure
            to the benefit of the parties hereto and their respective successors
            and permitted assigns. Nothing herein, express or implied, is
            intended to confer on any person, other than the parties hereto and
            their respective successors and assigns, any rights, remedies,
            obligations or liabilities under or by reason of this Agreement.

<PAGE>
                                       37

      9.9.  ENTIRE AGREEMENT. This Agreement and the Schedules referred to
            herein constitute the entire agreement between the parties hereto
            and supersede all prior agreements, representations, warranties,
            statements, promises, information, arrangements and understandings,
            whether oral or written, express or implied, with respect to the
            subject matter herein. None of the parties hereto shall be bound or
            charged with any oral or written agreements, representations,
            warranties, statements, promises, information, arrangements or
            understandings not specifically set forth in this Agreement or in
            the Schedules, documents and instruments to be delivered on or
            before the Closing Date pursuant to this Agreement. The parties
            hereto further acknowledge and agree that, in entering into this
            Agreement and in delivering the Schedules, documents and instruments
            to be delivered on or before the Closing Date, they have not in any
            way relied, and will not in any way rely, on any oral or written
            agreements, representations, warranties, statements, promises,
            information, arrangements or understandings, express or implied, not
            specifically set forth in this Agreement or in such Schedules,
            documents or instruments.

      9.10. WAIVER. Any party hereto which is entitled to the benefits of this
            Agreement may, and has the right to, waive any term or condition at
            any time on or prior to the Closing Time; provided, however, that
            such waiver shall be evidenced by written instrument duly executed
            on behalf of such party.

      9.11. AMENDMENTS. No modification or amendment to this Agreement may be
            made unless agreed to by the parties hereto in writing.

      9.12. GOVERNING LAW. This Agreement shall be governed by and construed in
            accordance with the internal laws of the Province of Ontario,
            without giving effect to the choice of law provisions.

                            [SIGNATURE PAGE FOLLOWS]

<PAGE>
                                       38

      IN WITNESS WHEREOF the parties hereto have duly executed this Agreement
under seal as of the day and year first above written.

                                      WORKSTREAM USA, INC.

                                      Per:
                                               ---------------------------------
                                      Name:
                                      Title:

                                      I have authority to bind the corporation.

                                      WORKSTREAM INC.

                                      Per:
                                               ---------------------------------
                                      Name:
                                      Title:

                                      I have authority to bind the corporation.

                                      HRSOFT, LLC

                                      Per:
                                               ---------------------------------
                                      Name:
                                      Title:

                                      I have authority to bind the corporation.

<PAGE>

                                    SCHEDULESTHESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR OFFERED FOR
SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES OR
AN OPINION OF COUNSEL OR OTHER EVIDENCE ACCEPTABLE TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED.

                              CONVERSION AGREEMENT

      THIS CONVERSION AGREEMENT, dated as of January 6, 2004, is made by and
between Infinium Labs, Inc., a Delaware corporation ("Company"), and Phoenix
Capital Opportunity Fund, LP ("Holder").

      WHEREAS, the Company issued to Holder that certain 15% Secured Debenture,
dated September 10, 2004 ("Note"); and

      WHEREAS, Company and Holder wish to provide for the terms and conditions
pursuant to which the Note may be converted to common stock, par value $0.0001
per share ("Common Stock"), of the Company;

      NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which the parties hereby acknowledge, the parties agree as
follows:

      1. Conversion of Note. The Company and Holder hereby agree that the
outstanding principal balance of the Note and all interest accrued and unpaid
thereon ("Balance") shall convert into shares of the Company's Common Stock at a
per share price equal to ten cents ($.10). The Company and Holder agree that the
Balance is $704,375 and that upon conversion of the Note in full and the
issuance by the Company of (i) 7,043,750 shares of Common Stock ("Conversion
Shares") as full payment of the Balance and (ii) 175,000 shares of Common Stock
("Interest Shares") pursuant to the letter agreement between Holder and the
Company dated December 20, 2004, the Company shall be forever released from all
its obligations and liabilities under the Note.

      2. Closing. At the Closing, Holder shall deliver the Note to the Company
and the Company shall deliver the Conversion Shares and the Interest Shares to
Holder.

      3. Further Assurances. In connection with the conversion of the Note, the
Holder, by entering into this Conversion Agreement, agrees to execute all
agreements and other documents as reasonably requested by the Company.

      4. Investor Representations and Warranties and Covenants. The Holder
represents, warrants and covenants to the Company as follows:

            a. No Registration. Such Holder understands that the Note, the
Conversion Shares and the Interest Shares have not been, and will not be,
registered under the Securities Act of 1933, as amended (the "Securities Act")
by reason of a specific exemption from the registration provisions of the
Securities Act, the availability of which depends upon, among other things, the
bona fide nature of the investment intent and the accuracy of such Holder's
representations as expressed herein or otherwise made pursuant hereto.

                                                                    Company:____
                                                                     Holder:____
<PAGE>

            b. Investment Intent. Such Holder has acquired the Note, and is
acquiring the Conversion Shares and Interest Shares, for investment for its own
account, not as a nominee or agent, and not with the view to, or for resale in
connection with, any distribution thereof, and such Holder has no present
intention of selling, granting any participation in, or otherwise distributing
the same. Such Holder further represents that it will not violate the Securities
Act and does not have any contract, undertaking, agreement or arrangement with
any person or entity to sell, transfer or grant participation to such person or
entity or to any third person or entity with respect to the Note, Conversion
Shares and Interest Shares.

            c. Investment Experience. Such Holder has substantial experience in
evaluating and investing in private placement transactions of securities in
companies similar to the Company and acknowledges that such Holder can protect
its own interests. Such Holder has such knowledge and experience in financial
and business matters so that such Holder is capable of evaluating the merits and
risks of its investment in the Company.

            d. Residency. The residency of the Holder (or, in the case of a
partnership or corporation, such entity's principal place of business) is
correctly set forth on the signature page hereto.

            e. Speculative Nature of Investment. Such Holder understands and
acknowledges that the Company has a limited financial and operating history and
that an investment in the Company is highly speculative and involves substantial
risks. Such Holder can bear the economic risk of such Holder's investment and is
able, without impairing such Holder's financial condition, to hold the
Conversion Shares and Interest Shares for an indefinite period of time and to
suffer a complete loss of such Holder's investment.

            f. Access to Data. The Holder and its advisors, if any, have been
furnished with or have been given access to all materials relating to the
business, finances and operations of the Company and any reasonably requested
materials requested by the Holder. The Holder and its advisors, if any, have
been afforded the opportunity to ask questions of the Company and its management
and have received complete and satisfactory answers to any such inquiries.
Without limiting the generality of the foregoing, the Holder has had the
opportunity to obtain and to review the Company's filings available on the EDGAR
web site of the Securities and Exchange Commission (www.sec.gov).

            g. Accredited Investor. The Holder is an "accredited investor"
within the meaning of Regulation D, Rule 501(a), promulgated by the Securities
and Exchange Commission under the Securities Act and shall submit to the Company
such further assurances of such status as may be reasonably requested by the
Company.

            h. Rule 144. Such Holder acknowledges that the Conversion Shares and
Interest Shares must be held indefinitely unless subsequently registered under
the Securities Act or an exemption from such registration is available. Such
Holder is aware of the provisions of Rule 144 promulgated under the Securities
Act which permit limited resale of shares purchased in a private placement
subject to the satisfaction of certain conditions, including among other things,
the existence of a public market for the shares, the availability of certain
current public information about the Company, the resale occurring not less than
one year after a party has purchased and paid for the security to be sold, the
sale being effected through a "broker's transaction" or in transactions directly
with a "market maker" and the number of shares being sold during any three-month
period not exceeding specified limitations. Such Holder acknowledges that, in
the event all of the requirements of Rule 144 are not met, registration under
the Securities Act or an exemption from registration will be required for any
disposition of the Conversion Shares or Interest Shares. Such Holder understands
that, although Rule 144 is not exclusive, the Securities and Exchange Commission
has expressed its opinion that persons proposing to sell restricted securities
received in a private offering other than in a registered offering or pursuant
to Rule 144 will have a substantial burden of proof in establishing that an
exemption from registration is available for such offers or sales and that such
persons and the brokers who participate in the transactions do so at their own
risk.

                                                                    Company:____
                                                                     Holder:____
<PAGE>

            i. Authorization.

                  i. Such Holder has all requisite power and authority to
execute and deliver this Conversion Agreement, and to carry out and perform its
obligations under the terms hereof. All action on the part of the Holder
necessary for the authorization, execution, delivery and performance of this
Conversion Agreement, and the performance of all of the Holder's obligations
herein, has been taken.

                  ii. This Conversion Agreement, when executed and delivered by
the Holder, will constitute valid and legally binding obligations of the Holder,
enforceable in accordance with its terms except: (i) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium and other laws of general
application affecting enforcement of creditors' rights generally, and (ii) as
limited by laws relating to the availability of specific performance, injunctive
relief or other equitable remedies or by general principles of equity.

                  iii. No consent, approval, authorization, order, filing,
registration or qualification of or with any court, governmental authority or
third person is required to be obtained by the Holder in connection with the
execution and delivery of this Conversion Agreement by the Holder or the
performance of the Holder's obligations hereunder.

            j. Brokers or Finders. Such Holder has not engaged any brokers,
finders or agents, and the Company has not, and will not, incur, directly or
indirectly, as a result of any action taken by the Holder, any liability for
brokerage or finders' fees or agents' commissions or any similar charges in
connection with this Conversion Agreement and the transactions related hereto.

            k. Tax Advisors. Such Holder has reviewed with its own tax advisors
the U.S. federal, state, local and foreign tax consequences of this investment
and the transactions contemplated by this Conversion Agreement. With respect to
such matters, such Holder relies solely on such advisors and not on any
statements or representations of the Company or any of its agents, written or
oral. The Holder understands that it (and not the Company) shall be responsible
for its own tax liability that may arise as a result of this investment or the
transactions contemplated by this Conversion Agreement.

                                                                    Company:____
                                                                     Holder:____
<PAGE>

            l. Legends. Such Holder understands and agrees that the certificates
evidencing the Conversion Shares and Interest Shares shall bear a legend in
substantially the form as follows (in addition to any legend required by any
other applicable agreement or under applicable state securities laws):

            "THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
            UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS
            OF ANY STATE, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED OR
            HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER SUCH ACT AND/OR
            APPLICABLE STATE SECURITIES LAWS, OR UNLESS THE COMPANY HAS RECEIVED
            AN OPINION OF COUNSEL OR OTHER EVIDENCE, REASONABLY SATISFACTORY TO
            THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT
            REQUIRED."

      5. Registration Rights. In the event that the Company enters into a
definitive agreement to complete a Qualified Financing on or before March 1,
2005, the Company shall grant Holder "piggyback" registration rights with
respect to the Conversion Shares and Interest Shares in connection with the
Qualified Financing (as defined herein), provided that the investors in the
Qualified Financing may reasonably limit the registration rights granted
hereunder to pro-rata participation based on Holder's percentage ownership in
the Company. A "Qualified Financing" shall be the closing of a transaction (or
series of related transactions) after the date hereof in which the Company
issues and sells shares of its capital stock in exchange for aggregate gross
proceeds of at least $12,000,000. If the Company has not entered into a
Definitive Agreement to complete a Qualified Financing on or before March 5,
2004, Holder may make a written request for registration of the Conversion
Shares and Interest Shares under the Securities Act of 1933 for sale in an
offering (a "Demand Registration"). Upon a request for a Demand Registration,
the Company shall use commercially reasonable efforts to effect such Demand
Registration in accordance with the terms of this Section 6. The Company shall
have no obligation to register Conversion Shares or Interest Shares under this
Section 6 on more than two occasions.

                                      * * *

                                                                    Company:____
                                                                     Holder:____
<PAGE>

      IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed by their respective officers thereonto duly authorized as of the day
and year first above written.

INFINIUM LABS, INC.

By: /s/ Timothy M. Roberts
    -------------------------------------------------
    Timothy M. Roberts
    Chief Executive Officer

PHOENIX CAPITAL OPPORTUNITY FUND, LP

By: /s/ David Rosenberg
    -------------------------------------------------
    David Rosenberg
    Managing Director

By: /s/ Roger Tichenor
    -------------------------------------------------
    Roger Tichenor
    Managing Director

Address:   One Sarasota Tower
           2 N. Tamiami Trail, Suite 310
           Sarasota, FL  34236

                                                                    Company:____
                                                                     Holder:____

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