Document:

ADVISORY SERVICE AGREEMENT

      THIS ADVISORY SERVICE AGREEMENT (the "Agreement") is entered into as of
this 23 day of June, 2006 (the "Effective Date") by and between INDIGO-ENERGY,
INC., a Nevada corporation (the "Company"), and HUB ENERGY, LLC, a Pennsylvania
limited liability company (the "Advisor" and together with the Company, the
"Parties" each a "Party").

                                   WITNESSETH:

      WHEREAS, the Company has requested and the Advisor has agreed to provide
exclusive advisory services in connection with the Company's contemplated
exploration and development of certain oil and gas prospects located in
Pennsylvania, West Virginia, Kentucky, and Illinois (collectively, the
"Premises");

      NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties and covenants contained herein, and other good and
valuable consideration, the adequacy and receipt thereof which is hereby
acknowledged, and intending to be legally bound hereby, the Parties to this
Agreement agree as follows:

      Section 1. Definitions; Construction. For purposes of this Agreement,
unless the context otherwise requires, the following defined terms shall have
this meanings set out below:

            (a) "Common Stock" has the meaning set forth in Section 4(a)(1)
herein;

            (b) "Deep Well" means any well drilled to a total depth of 6,000
feet or greater;

            (c) "Deposit" has the meaning set forth in Section 4(c) herein;

            (d) "Drilling and Operating Agreement" means the Drilling and
Operating Agreement by and between the Advisor and the Company or its assignees,
substantially in the form attached as Exhibit C hereto; ---------

            (e) "Drilling Services Fee" has the meaning set forth in Section
4(b) herein;

            (f) "Effective Date" has the meaning set forth in the preamble;

            (g) "Gathering Lines" has the meaning set forth in Section 9(a)
herein;

            (h) "Gross Well(s)" means the wells in which a Party or entity holds
a Working Interest (as that term is defined herein);

            (i) "Horizontal Well" means any well that is not vertically drilled;

            (j) "Landowner's Royalty Interest" means an ownership interest in
oil and gas production, or the proceeds from the sale thereof, to be received
free and clear of all costs of development, operation or maintenance, reserved
by the owner of the property where producing wells are located upon creation of
an oil and gas lease.

            (k) "Lease Acquisition(s)" has the meaning set forth in Section 6
herein;

            (l) "Losses" has the meaning set forth in Section 17 herein;

            (m) "Net Revenue Interest" means the net interest in production from
a well, or the proceeds therefrom, after payments to those holding Landowner's
Royalty Interests and Overriding Royalty Interests (as those terms are defined
herein) and subject to the proportionate participation rights of parties to any
agreements of mutual interest;

            (n) "Net Well" means the equivalent of a full Working Interest in
one well obtained by the aggregation of partial Working Interests in two (2) or
more wells;

            (o) "New Pipeline(s)" has the meaning set forth in Section 9(b)
herein;

            (p) "Operator(s)" means the party or parties responsible for the
operations of wells once they have been drilled and completed;

            (q) "Option Agreement" means the Option Agreement substantially in
the form attached as Exhibit A hereto;

            (r) "Overriding Royalty Interest" means an ownership interest in oil
and gas production, or the proceeds from the sale thereof, to be received free
and clear of all costs of development, operation or maintenance;

            (s) "Shallow Well" means any well drilled to a total depth of less
than 6,000 feet;

            (t) "Term" has the meaning set forth in Section 3 herein;

            (u) "Turnkey Drilling Price" means the amount paid to the Operator
under each Drilling and Operating Agreement, subject to the modifications set
forth in Sections 4(e) and 7(a) herein; and

            (v) "Working Interest" means an ownership interest in a lease giving
the interest owner certain rights which may include the right to develop and
receive oil and/or gas produced from a well or the revenues from the sales
thereof subject to the costs of development, production, operation and marketing
and subject to the rights and interests of the holders of the Landowner's
Royalty Interest (who do not contribute toward the cost of development).

                                       -2-

      Section 2. Engagement.

            (a) Subject to the terms and conditions of this Agreement, the
Company hereby engages the Advisor, and the Advisor hereby accepts such
engagement to be the exclusive provider to the Company of oil and gas
exploration and production operation services, and such other related services
to the Company (all of the foregoing, the "Services") as may be mutually agreed
upon between the Company and the Advisor, and as more fully set forth herein.

            (b) To the extent necessary or appropriate to perform any of the
Services contemplated under this Agreement, the Company grants to the Advisor
any and all power and authority required to execute and deliver any necessary
and/or appropriate documents and instruments on behalf of the Company with
respect to either the Services or the Premises or both.

      Section 3. Term. This Agreement shall be effective for a period of three
(3) years commencing on the Effective Date (the "Term").

      Section 4. Compensation; Advance Fee; Reimbursement; Drilling Services
Fees; and Activities.

            (a) Compensation. In consideration of the Advisor's agreement to
provide the Services, the Company shall issue to the Advisor, pursuant to the
terms and conditions set forth in the Option Agreement, options to acquire the
following securities:

                              4.a.1 9.0 million shares of common stock, par
                        value $.001 per share of the Company (the "Common
                        Stock"), at an exercise price of $2.00 per share
                        exercisable upon completion and delivery, as described
                        herein, of one hundred and fifty (150) wells capable of
                        producing oil and/or gas on the Premises, as set forth
                        in Schedule A attached hereto. The right to exercise
                        such options shall be reduced on a pro rata basis in the
                        event that Advisor delivers fewer than one hundred fifty
                        (150) wells capable of producing oil and/or gas on the
                        Premises;

                              4.a.2 3.0 million shares of Common Stock at an
                        exercise price of Two Dollar ($2.00) per share
                        exercisable upon completion and delivery, as described
                        herein, of an additional fifty (50) wells capable of
                        producing oil and/or gas on the Premises, as set forth
                        in Schedule A attached hereto. The right to exercise the
                        options shall be reduced on a pro rata basis in the
                        event that Advisor delivers fewer than fifty (50) wells
                        capable of producing oil and/or gas on the Premises; and

                              4.a.3 3.0 million shares of Common Stock at an
                        exercise price of Two Dollars ($2.00) per share
                        exerciable upon completion and delivery, as described
                        herein, of an additional fifty (50) wells capable of
                        producing oil and/or gas on the Premises, as set forth
                        in Schedule A attached hereto. The right to exercise
                        such options shall be reduced on a pro rata basis in the
                        event that Advisor delivers fewer than fifty (50) wells
                        capable of producing oil and/or gas on the Premises.

                                       -3-

The Common Stock to be issued upon exercise of the options granted pursuant to
this Section 4(a) shall be subject to certain registration rights as more fully
described in Section 13 herein and granted pursuant to a Registration Rights
Agreement between the Advisor and the Company substantially in the form attached
as Exhibit B hereto (the "Registration Rights Agreement").

            (b) Drilling Services Fee. The Advisor shall be entitled to a
nonrefundable drilling services fee in the amount of Seven Thousand Five Hundred
Dollars ($7,500) per Gross Well ("Drilling Services Fee"), payable upon the
completion of each well. The Drilling Services Fee will be reduced pro rata in
the event that the [leaseholder/owner] of the Gross Well holds less than a
sixty-two and one half percent (62.5%) Working Interest in such Gross Well.

            (c) Advance Fee. Prior to the execution of this Agreement, the
Company will have paid to the Advisor a good faith deposit in the amount of
Seventy-Five Thousand Dollars ($75,000) (the "Deposit") to pay for such services
as the Advisor deemed necessary in order to commence its obligations in
connection with this Agreement including but not limited to: hiring employees,
making payments to outside consultants including legal advisors, and
establishing an office in Indiana, PA to be used jointly by the Advisor and the
Company. The Advisor and the Company agree that the Deposit shall be amortized
over the course of the first ten (10) Net Wells drilled and applied against the
Drilling Services Fee payable hereunder for such Net Wells.

            (d) Reimbursement of Expenses. The Company shall reimburse the
Advisor for the reasonable out-of-pocket expenses incurred by the Advisor in
performing the Services hereunder, including, without limitation, drilling and
excavation activities relating to the wells.

            (e) Additional Drilling Services Fee for Shallow Wells. The Advisor
shall be entitled to increase the Drilling Services Fee per well of each oil and
gas well contracted for under this Agreement (each Operator will provide a
separate Turnkey Drilling Price under a Drilling and Operating Agreement) for
conventional Shallow Wells in Pennsylvania, West Virginia and Kentucky by an
amount of Twelve Thousand Five Hundred Dollars ($12,500) per Gross Well to cover
all general and administrative expenses that will be incurred by the Advisor.

            (f) Overriding Royalties. The Advisor shall deliver to the Company
Working Interests under leases that, in almost all cases, will result in a Net
Revenue Interest of 81.25% for a one hundred percent (100%) Working Interest. If
the Net Revenue Interest to the Company under a lease is less than 81.25%, the
Company must approve, in writing, its participation prior to the commencement of
drilling operations under that particular lease.

      Section 5. Oil and Gas Operating Company Acquisitions; Right of First
Refusal. During the Term of this Agreement, the Company shall use the Advisor on
a non-exclusive basis and the Advisor shall have a right of first refusal in
order to initiate and/or to investigate any and all potential oil and gas
acquisition opportunities then contemplated by the Company. The Company further
agrees to reimburse the Advisor for any and all reasonable out-of-pocket
expenses incurred in connection with its work regarding any such potential
acquisition of an oil and gas company or property (an "Acquisition").

                                       -4-

            In addition, the Company agrees that any such Acquisition
consummated by the Company or its proxies during the Term of this Agreement
shall be accomplished solely through the formation of a new general partnership
acting as the acquiror, and in which the Advisor and the Company shall hold
partnership interests. Moreover, the Advisor shall also be entitled to an
undivided one-sixteenth (6.25%) interest in the oil and gas interests acquired
pursuant to any Acquisition for its expertise and guidance.

      Section 6. Oil and Gas Lease Acquisitions. During the term of this
Agreement, the Company will have a right of first refusal to match the price of
any offer on any lease acquisition opportunities brought to its attention by any
individual Operator or by the Advisor. Should the Company, in its sole
discretion, choose to avail itself of any such lease acquisition opportunity,
the Company agrees to fund such lease acquisition (each a "Lease Acquisition",
and collectively, the "Lease Acquisitions") under terms to be negotiated with
the seller on a deal-by-deal basis. The Parties hereby acknowledge and agree
that any such Lease Acquisition consummated under this Section 6 shall be
governed by the terms and conditions of a lease acquisition agreement, which
shall include, among other things, a provision substantially similar to the
following:

            "The party who wishes to begin oil and gas operations on such
            leasehold (the "Offeror") shall be obliged to offer the other party
            (the "Offeree") an opportunity to invest in up to fifty percent
            (50%) of any well on such leasehold. The Offeree shall have thirty
            (30) days from the time of notice of such opportunity to indicate
            his intentions. If he responds negatively or fails to respond within
            the thirty (30) day period, the Offeror shall have the right to
            proceed with the drilling of the well on his own or with any other
            co-venturers that the Offeror might select."

      Section 7. Drilling Activities.

            (a) All oil and gas drilling activities contemplated hereunder shall
be completed using a Drilling and Operating Agreement. The Company acknowledges
and agrees that each Operator will charge a different Turnkey Drilling Price for
wells drilled under this Agreement due to differences in depth, number of zones
framed, their internal cost structures, etc.

            (b) The Company shall provide all Operators as well as the Advisor
with the right, but not the obligation, to participate in any wells drilled
under this Agreement; provided, however, that in no case shall the Company have
less than fifty percent (50%) of the Working Interest in each well. All
participants in the well(s) must declare their participation percentages in each
well package prior to the commencement of drilling operations.

                                       -5-

      Section 8. Operating Activities

            (a) Typical Wells. The Parties agree that, with the possible
exception of Deep Wells or Horizontal Wells, all wells drilled according to this
Agreement shall be governed by a Drilling and Operating Agreement. In any such
case as may require a substantial deviation from the terms of the form Drilling
and Operating Agreement attached hereto, the Advisor agrees to consult with
Company regarding the changes that need to be made in order to execute a revised
Drilling and Operating Agreement.

            (b) Deep or Horizontal Wells.

                              8.b.1 Given the nature of the oil and gas
                        industry, the Parties recognize that any number of
                        potential oil and gas opportunities contemplated by this
                        Agreement may involve either Deep Well or Horizontal
                        Well drilling. The Parties agree that in the case of
                        either Deep Well drilling or Horizontal Well drilling,
                        the relationship between the Parties and the work
                        required to be done shall be governed by the terms and
                        conditions contained in Section 8(b)(i) of the American
                        Association of Petroleum Landmen Form 610, substantially
                        in the form attached as Exhibit D hereto.

                              8.b.2 In the case of either a Deep Well or
                        Horizontal Well, the Parties agree that all such Deep
                        Wells or Horizontal Wells drilled according to this
                        Agreement shall be governed by a deep drilling and
                        operating agreement substantially in the form attached
                        as Exhibit E hereto (the "Deep Drilling Operating
                        Agreement") In any such case as may require a
                        substantial deviation from the form Deep Drilling
                        Operating Agreement attached hereto, the Advisor agrees
                        to consult with Company regarding the changes that need
                        to be made in order to execute a revised Deep Drilling
                        Operating Agreement.

      Section 9. Pipelines. Given the nature of the oil and gas industry and the
activities contemplated by this Agreement, the Parties recognize and acknowledge
that any number of pipelines may need to be constructed for any or all wells
that are drilled under this Agreement. The terms and conditions governing the
creation of such pipelines shall be as follows:

            (a) Gathering Lines. To the extent that any oil and gas operation
under this Agreement requires the laying of new pipelines that are two inches
(2?) or less in diameter (the "Gathering Lines"), the costs of laying the
Gathering Lines shall be paid as provided in the Drilling and Operating
Agreement governing that particular well and well Operator or, in the
alternative, as provided for under any existing gas sales and marketing contract
of that Operator in that field.

            (b) New Pipelines. To the extent that any oil and gas operation
under this Agreement requires the laying of new pipelines that are greater than
2 inches (2") in diameter (the "New Pipeline"), the Parties agree in advance to
form a new partnership to be jointly owned by the Company, the Advisor, and any
combination of investors mutually agreed on by the Company and the Advisor to
acquire such things as rights of way, main line taps, compressors, separators,
pipeline, etc. in order to lay the New Pipeline, with the partners owning their
proportionate share of revenues from oil and/or gas using the New Pipeline.
Should the Company choose not to participate in such newly formed partnership,
the Advisor shall have the right, but not the obligation, to undertake the
construction of such New Pipeline, with the costs of such construction to be
borne by the Company. In any such case where the Advisor constructs New
Pipeline, it shall have the right to charge either ten percent (10%) of the
price being paid by the purchaser of the gas or $0.35/Mcf, whichever is greater,
for all gas that is transported through the New Pipeline to recover the costs of
the New Pipeline involved, gas transportation and compression charges,
desiccants and other charges that may be necessary and proper in order to
transport and market the oil and gas.

                                       -6-

      Section 10. Escrow Agreements. An escrow agreement shall be established to
administer payments to be made under this Agreement. All funds to be
administered in connection with this Agreement must be funded prior to the
commencement of operations under any Drilling and Operating Agreement or series
of agreements. The Advisor shall administer the funds in an escrow account and
shall make payments to the various persons or entities responsible for the
drilling and completion of the wells under a percentage of completion formula
based upon invoices presented to the Advisor.

      Section 11. Payment of Oil and Gas Revenues. The Advisor has no
responsibility for, and shall have no liability regarding, the payment of any of
the revenues owed to the Company by the Operators under the Drilling and
Operating Agreements (the "Revenue(s)"). The Advisor only agrees, and its only
responsibility regarding such Revenue shall be, to facilitate the payment of all
such Revenue to the Company. To that end, the Advisor shall offer to undertake a
review and inspection of all monthly production expenses, operating expenses,
payment statements, etc., from each of the various Operators for completeness
and accuracy. In no event, however, shall the Advisor be responsible for
receiving or distributing any such Revenue to the Company. In such case as any
Revenue is erroneously paid to the Advisor by any Operator, the Advisor shall
forward such Revenue to the Company in an expeditious manner; provided, however,
that the Advisor shall have no liability for any Revenue sent by it to the
Company but not received by the Company; provided the Advisor has sufficient
documentation of its sending such Revenue to the Company.

      Section 12. Oil and Gas Marketing; Transportation.

            (a) To the extent that wells drilled under this Agreement are
drilled and operated under an existing gas sales and marketing contract of an
Operator, then all sales of production of such wells shall be marketed under
that existing arrangement, unless the Company elects to take the oil and gas in
kind, in which case the prevailing charge of such Operator in the market for
transportation and marketing will apply.

            (b) If a well is drilled and there is no existing sales and
marketing contract of the Operator and a new transportation and marketing
arrangement is necessary, the Advisor and the Company may form a new company for
the purposes of transporting and marketing the oil and gas and a fee of up to
ten percent (10%) of the net revenue for providing such services may be charged
to recover the cost of the pipelines involved, gas transportation and
compression charges, desiccants and other charges that may be necessary and
proper in order to transport and market the gas. Advisor will obtain the consent
of the Company prior to entering into any agreements with respect to transport
and marketing of the oil and gas. Any royalties derived from such transport and
marketing agreements shall accrue to the benefit of the Company.

                                       -7-

      Section 13. Piggyback Registration. If at any time or from time to time,
the Company shall decide to register any of its common stock (excluding an IPO)
for sale, either for its own account or the account of a security holder or
holders under the Securities Act of 1933, as amended (the "Securities Act"), the
Advisor shall be entitled to include its shares of Common Stock in such
registration, subject to the right of the Company and its underwriters to reduce
the number of shares proposed to be registered pro rata in view of market
conditions. In the event of any such registration contemplated by this Section
13, the Company agrees that all registration expenses (exclusive of underwriting
discounts and commissions and special counsel fees of a selling shareholder)
shall be borne by the Company. The foregoing registration rights shall be
separately stated in the Registration Rights Agreement

      Section 14. Company Private Placements. To the extent that the Company is
engaged in the solicitation of funds from private investors, partnerships or
other entities under any arrangement in which well interests, tax deductions
and/or Common Stock or other Company Securities, or the Securities of any other
entity or entities, are sold, such solicitations shall be made by private
placement memorandum(a). Such private placement memorandum(a) shall be provided
to the Advisor for review and comment prior to the solicitation and acceptance
of funds by the Company and evidence of the acceptance of the terms and
conditions of such documents by the investor(s) shall be provided to the Advisor
by the Company prior to the transfer of funds under the escrow provisions of
this Agreement. The Company represents that all information contained in the
private placement memorandum(a) will be, to the best knowledge of the Company,
complete and correct in all material respects and to the best knowledge of the
Company, will not contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statement therein not
materially misleading in the light of the circumstances under which such
statements are made.

      Section 15. Indemnification.

            (a) Indemnification of the Advisor. The Company agrees to indemnify
and hold harmless, to the extent permitted by applicable law, the Advisor, its
members, managers, officers, directors, representatives, agents and assigns from
and against any and all losses and/or expenses including, but not limited to,
damages, costs, claims, actions, causes of action, demands, judgments, and
liabilities of every kind and description (the "Claims"), caused by, arising
from or in connection with the Advisor's obligations under or involvement in
this engagement, including reimbursement for reasonable attorneys' fees, costs
and expenses. The indemnity agreement contained in this paragraph, however,
shall not extend to any Claims or any rights to reimbursement if and to the
extent that any such Claims or right to reimbursement arises by reason of any
act or omission to act on the Advisor's part that is found in a final judicial
determination (or a settlement tantamount thereto) to constitute bad faith,
willful misconduct or gross negligence on the Advisor's part. The indemnity,
contribution and expense reimbursement agreements and obligation set forth
herein shall be in addition to any other rights, remedies or indemnification
which the Advisor may have or be entitled to at common law or otherwise, and
shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of the Advisor.

                                       -8-

            (b) Indemnification of the Company. The Advisor agrees to indemnify
and hold harmless, to the extent permitted by applicable law, the Company from
and against any and all Claims, caused by, arising from or in connection with
the Company's obligations under or involvement in this engagement, including
reimbursement for reasonable attorneys' fees, costs and expenses. The indemnity
agreement contained in this paragraph, however, shall not extend to any Claims
or any rights to reimbursement if and to the extent that any such Claims or
right to reimbursement arises by reason of any act or omission to act on the
Company's part that is found in a final judicial determination (or a settlement
tantamount thereto) to constitute bad faith, willful misconduct or gross
negligence on the Company's part. The indemnity, contribution and expense
reimbursement agreements and obligation set forth herein shall be in addition to
any other rights, remedies or indemnification which the Company may have or be
entitled to at common law or otherwise, and shall remain operative and in full
force and effect regardless of any investigation made by or on behalf of the
Company.

      Section 16. Performance. The Advisor agrees to use its best efforts to
furnish the Services to the Company on a full time basis.

      Section 17. Information. In connection with the Advisor's activities
hereunder, the Company agrees to cooperate with the Advisor and to furnish upon
the Advisor's request all information reasonably related to the transaction
contemplated by this Agreement.

      Section 18. Non-Liability of Advisor. The Advisor shall perform on behalf
of the Company only the duties that have been specifically delegated to the
Advisor in this Agreement and the Advisor shall have no implied covenants or
obligations to perform any other duties under this Agreement. The Advisor shall
not be responsible for any losses, liabilities, damages, claims or expenses
(collectively, the "Losses") incurred by the Company arising from any acts or
omissions by the Advisor in connection with the performance of its duties under
this Agreement other than Losses resulting or arising from the Advisor's gross
negligence or willful misconduct; provided, however, that the Advisor shall not
have any liability or responsibility for any Loss resulting or arising from an
act or omission by a sub-manager.

      Section 19. Relationship of the Parties. In performing the services
provided for under this Agreement, the Advisor is acting as an independent
contractor, and the Advisor's employees at all times during the term of this
Agreement shall be in the employment of and under the supervision and
responsibility of the Advisor, and no person employed by the Advisor either
directly or indirectly shall be deemed by virtue of this Agreement, or any other
agreement referenced herein, to be the servant, agent or employee of the Company
for any purpose whatsoever.

      Section 20. Mutual Representations and Warranties. Each of the Advisor and
the Company represents and warrants to the other that:

            (a) it is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization, (ii) has all power and
authority necessary to own and operate its property, [to lease the property it
operates as lessee] and to conduct the business in which it is currently
engaged, and (iii) is duly qualified as a foreign company and in good standing
under the laws of each jurisdiction where its ownership, lease or operation of
property or the conduct of its business requires such qualification;

                                       -9-

            (b) it has all power and authority necessary to make, deliver and
perform its duties under this Agreement;

            (c) this Agreement has been duly executed and delivered by it;

            (d) this Agreement constitutes a legal, valid and binding obligation
of it, enforceable against it in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law);

            (e) the execution and delivery and performance by the Company and
the Advisor do not and will not:

                        (i) violate its Certificate of Incorporation or
                        Certificate of Organization or bylaws;

                        (ii) breach or result in a default (or an event which,
                        with the giving of notice or the passage of time, or
                        both, would constitute a default) under, require any
                        consent under or give to others any rights of
                        termination, acceleration, suspension, revocation,
                        cancellation or amendment of any material note, bond,
                        mortgage, indenture, lease, license, contract, agreement
                        or other instrument or obligation to which it is a party
                        or by which it or any of their properties or assets may
                        be bound;

                        (iii) breach or otherwise violate any governmental order
                        which names it or is directed to it or any of its
                        assets;

                        (iv) violate any rule, law, or regulation applicable to
                        it or its business or assets; or

                        (v) require any consent, authorization, approval,
                        exemption or other action by, or any filing,
                        registration or qualification with, any Person.

      Section 21. Company Representations and Warranties: The Company represents
and warrants to the Advisor that:

            (a) Capitalization. The authorized capitalization of the Company
consists of (i) 1,000,000,000 shares of the Common Stock, of which 182,123,127
shares are issued and outstanding and (ii) 100,000,000 shares of the Preferred
Stock, none of which are issued and outstanding. All of the issued and
outstanding shares of the Common Stock have been duly authorized and validly
issued in compliance with applicable rules, laws and regulations relating to the
issuance of securities and are fully paid and non-assessable. The options
granted pursuant to Section 4(a) have been, and the shares of Common Stock to be
issued upon exercise of the options granted pursuant to Section 4(a), when
issued in accordance with the terms of the Option Agreement, will be, duly
authorized and validly issued in compliance with applicable United States
federal and state governmental rules relating to the issuance of securities,
fully paid and nonassessable, and the grant of such options is not and the
issuance of all such shares will not be subject to any preemptive rights.

                                      -10-

            (b) Securities Matters and Financial Statements. The Company has
filed with the Securities and Exchange Commission (the "SEC"), and has
heretofore made available to the Advisor true and complete copies of, all forms,
reports, schedules, statements and other documents required to be filed by it
and its subsidiaries, if any, since December 15, 2005 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act") or the Securities Act (as
such documents have been amended since the time of their filing, collectively,
the "Company SEC Documents"), which are all the documents (other than
preliminary material) that the Company, or any present or former subsidiary, if
any, of the Company, was required to file with the SEC since such date. As of
their respective filing dates, the Company SEC Documents complied in all
material respects with the requirements of the Exchange Act or the Securities
Act, as the case may be, and the rules and regulations of the SEC thereunder
applicable to the Company SEC Documents. As of their respective dates or, if
amended, as of the date of the last such amendment, the Company SEC Documents,
including, without limitation, any financial statements or schedules included
therein did not contain any untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading.

            (c) To the best knowledge of the Company, the financial statements
(including the related notes) of the Company included in the Company SEC
Documents (the "Company Financial Statements") comply as to form in all material
respects with all applicable accounting requirements and with the published
rules and regulations of the SEC with respect thereto, present fairly the
financial condition of Company and its consolidated Subsidiaries as at the end
of the periods covered thereby and the results of its consolidated operations
and the changes in its consolidated cash flows for the periods covered thereby,
and were prepared in accordance with generally accepted accounting principles
("GAAP") applied on a consistent basis throughout the periods covered thereby
subject, in the case of the unaudited interim statements, to year-end audit
adjustments and the lack of footnotes and other presentation items. Except as
and to the extent otherwise disclosed in the Company SEC Documents or the
Company Financial Statements, and to the best knowledge of the Company, the
Company has no liabilities of any kind, whether direct or indirect, fixed or
contingent or otherwise, other than (y) liabilities which are not required to be
set forth on the Company Financial Statements in accordance with GAAP, and (z)
liabilities incurred in the ordinary course of business since March 31, 2006.

                                      -11-

            (d) Litigation. There is no pending or, to Company's knowledge,
threatened action against the Company or any of its assets by or before any
court, governmental entity or arbitrator which, if decided adversely to the
Company, would have a material adverse effect on the assets, business, results
of operations, financial condition or prospects of the Company.

      Section 22. Notice. Any notice or other communication required or
permitted to be given under this Agreement shall be deemed given when received
in writing by the Parties at the address below or to such other address or the
attention of such other party as the Parties shall advise the other by written
notice given in conformity herewith:

            If to the Company:        Indigo-Energy, Inc.
                                      13350 Random Hills Road
                                      Suite 800
                                      Fairfax, VA 22030
                                      Tel: (703) 934-6189
                                      Fax:(703) 591-3049
                                      Attention: David Larson

            With a Copy to:           Gersten Savage, LLP
                                      600 Lexington Avenue
                                      New York, New York, 10022
                                      Attention: Arthur S. Marcus, Esq.

            If to the Advisor:        HUB Energy, LLC
                                      255 Airport Road
                                      Indiana, PA 15701
                                      Tel: (724) 349-6690
                                      Attention: Mark A. Thompson

or to such other address or the attention of such other party as the Parties
shall advise the other by notice in conformity herewith.

      Section 23. Section Headings. The section headings used in this Agreement
are inserted for convenience of reference only and are not intended to be a part
of or to affect the meaning or interpretation of this Agreement.

      Section 24. Multiple Counterparts. This Agreement may be executed in one
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.

      Section 25. Severability. In the event that any one or more of the
provisions contained in this Agreement, or in any other instrument referred to
herein, or the application of any such provision or provisions shall, for any
reason, be held to be invalid, illegal or unenforceable in any respect by a
court of competent jurisdiction, then to the maximum extent permitted by law,
such invalidity, illegality or unenforceability shall not affect any other
provision of this Agreement or any other such instrument.

      Section 26. Waiver. Waiver of any term or condition of this Agreement by
any Party shall be effective if in a writing signed by the Party against whom
such waiver is asserted. Any such waiver shall not be construed as a waiver of
any subsequent breach of failure of the same term or condition, or a waiver of
any other term of this Agreement. No failure or delay by any Party in exercising
any right, power or privilege hereunder shall operate as a waiver thereof nor
shall any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other right, power or privilege.

                                      -12-

      Section 27. Assignment. This Agreement and the rights and obligations of
the Parties hereunder shall not be assigned, delegated or otherwise transferred
by the Advisor or the Company without the prior written consent of the other
Party which such consent shall not be unreasonably withheld. This Agreement
shall inure to the benefit of the permitted successors, indorsees, transferees
and assigns of the Company and the Advisor.

      Section 28. No Third Party Beneficiaries. This Agreement is for the sole
benefit of the Parties hereto and their permitted assigns, and nothing herein
expressed or implied shall give or be construed to give to any person or entity,
other than the Parties hereto and assigns, any legal or equitable rights
hereunder.

      Section 29. Confidentiality. The Parties hereto agree not to disclose,
without the prior written consent of the other Party, to any third party the
contents of this Agreement and agree to maintain the confidentiality of this
Agreement for the Term of the Agreement; provided, however, the forgoing shall
not apply to disclosures required by law or a regulatory authority.

      Section 30. Non-Compete and Non-Solicitation. The Company agrees for the
Term of this Agreement that it shall not engage in direct or indirect
negotiations with any oil and gas company or any oil and gas opportunity which
the Advisor has in any way, either directly or indirectly, made known or made
available to the Company. The Company also agrees that it shall not solicit
either directly or indirectly any employees of the Advisor or the employees of
any oil and gas company made known to it by the Advisor for the purposes of
competing in any way with the Advisor.

      Section 31. Governing Law; Venue. This Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Pennsylvania
without giving effect to its conflict of laws provisions. Venue shall be the
court of Common Pleas, Indiana, PA.

      Section 32. Entire Agreement. This Agreement, including any other
instrument referred to herein contains the entire agreement and understanding
between the Parties hereto with respect to the subject matter hereof and
supersedes all prior agreements, negotiations, correspondence, undertakings,
oral or written, relating to such subject matter.

            [THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

                                      -13-

      IN WITNESS WHEREOF, the Parties have caused this Agreement to be entered
into as of the date first written above.

                                                    INDIGO-ENERGY, INC.

                                                    By: /s/ David Larson
                                                    ----------------------------
                                                    Name:  David Larson
                                                    Title: President

                                                    HUB ENERGY, LLC

                                                    By: /s/ Mark A. Thompson
                                                    ----------------------------
                                                    Name:  Mark A. Thompson
                                                    Title: President

                Signature Page to the Advisory Services Agreement

                                      -14-

                                   Schedule A

                            Well Production Schedule

                                    Exhibit A

                            Form of Option Agreement

Incorporated by reference as Exhibit No. 4.2 to Form 8-K filed herewith.

                                    Exhibit B

                      Form of Registration Rights Agreement

Incorporated by reference as Exhibit No. 4.1 to Form 8-K filed herewith.

                                    Exhibit C

                    Form of Drilling and Operating Agreement

                                    Exhibit D

                   American and Petroleum Institute's Form 610
           (to be completed within 30 days after wells come on line)

                                    Exhibit E

                    Form of Deep Drilling Operating Agreement

                                 See Exhibit D[FORM
      OF WARRANT]

     

    NEITHER
      THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR
      THE
      SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED
      UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
      LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED
      (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES
      UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL
      TO
      HOLDER, IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER
      SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT.
      NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION
      WITH
      A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY
      THE
      SECURITIES.

     

    WORKSTREAM
      INC.

     

    Warrant
      To Purchase Common Shares

     

    Number
      of
      Shares of Common Stock: 2,750,000

    Date
      of
      Issuance: October ___, 2006 (“Issuance
      Date”)

     

    Workstream
      Inc., a corporation existing pursuant to the Canada Business Corporations Act
      (the “Company”),
      hereby certifies that, for good and valuable consideration, the receipt and
      sufficiency of which are hereby acknowledged, Hilco Financial, LLC or its
      designees, the registered holder hereof or its permitted assigns (the
“Holder”),
      is
      entitled, subject to the terms set forth below, to purchase from the Company,
      at
      the Exercise Price (as defined below) then in effect, upon surrender of this
      Warrant to Purchase Common Shares (including any Warrants to Purchase Common
      Shares issued in exchange, transfer or replacement hereof, the “Warrant”),
      at
      any time or times on or before 11:59 p.m., Chicago time, on the Expiration
      Date
      (as defined below), 2,750,000 (subject to adjustment as provided herein) fully
      paid nonassessable Common Shares (as defined below) (the
      “Warrant
      Shares”).
      Except as otherwise defined herein, capitalized terms in this Warrant shall
      have
      the meanings set forth in Section 15.
      This
      Warrant is issued pursuant to Section 1(a) of that certain Transaction
      Agreement, dated as September 28, 2006 (the “Subscription
      Date”),
      by
      and between the Company and the lender referred to therein (the “Transaction
      Agreement”).

     

    
      
        1.
          EXERCISE
          OF WARRANT.

      

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (a) Mechanics
      of Exercise.
      Subject
      to the terms and conditions hereof (including, without limitation, the
      limitations set forth in Section 1(f)),
      this
      Warrant may be exercised by the Holder on any day on or after the date hereof,
      in whole or in part, by (i) delivery of a written notice, in the form
      attached hereto as Exhibit A (the “Exercise
      Notice”),
      of
      the Holder’s election to exercise this Warrant and (ii) (A) payment to the
      Company of an amount equal to the then-applicable Exercise Price multiplied
      by
      the number of Warrant Shares as to which this Warrant is being exercised (the
      “Aggregate
      Exercise Price”)
      in
      cash or wire transfer of immediately available funds in lawful money of the
      United States of America or (B) by notifying the Company that this Warrant
      is
      being exercised pursuant to a Cashless Exercise (as defined in Section
1(d)).
      The
      Holder shall not be required to deliver the original of this Warrant in order
      to
      effect an exercise hereunder. Execution and delivery of the Exercise Notice
      with
      respect to less than all of the Warrant Shares shall have the same effect as
      cancellation of the original of this Warrant and issuance of a new Warrant
      evidencing the right to purchase the remaining number of Warrant Shares. On
      or
      before the first (1st)
      Business Day following the date on which the Company has received each of the
      Exercise Notice and the Aggregate Exercise Price (or notice of a Cashless
      Exercise) (the “Exercise
      Delivery Documents”),
      the
      Company shall transmit by facsimile an acknowledgment of confirmation of receipt
      of the Exercise Delivery Documents to the Holder and the Company’s transfer
      agent (the “Transfer
      Agent”).
      On or
      before the third (3rd)
      Business Day following the date on which the Company has received all of the
      Exercise Delivery Documents (the “Share
      Delivery Date”),
      the
      Company shall (X) provided that the Transfer Agent is participating in The
      Depository Trust Company (“DTC”)
      Fast
      Automated Securities Transfer and the Holder has indicated on its Exercise
      Notice that it intends to immediately sell all or any portion of the Warrant
      Shares to be received upon such exercise
      pursuant
      to the registration statement covering the resale of such Warrant Shares and,
      to
      the extent applicable, in compliance with the prospectus delivery requirements
      of the Securities Act of 1933, as amended (“1933 Act”),
      upon
      the request of the Holder, credit the aggregate number of Common Shares the
      Holder so immediately intends to sell to the Holder’s or its designee’s balance
      account with DTC through its Deposit Withdrawal Agent Commission system, and/or
      (Y) if the Transfer Agent is not participating in the DTC Fast Automated
      Securities Transfer Program or if the Holder has so indicated on its Exercise
      Notice that it intends to sell less than all of the Warrant Shares to be
      received upon exercise, issue and deliver to Holder or, at Holder’s instruction
      pursuant to the Exercise Notice, Holder’s agent or designee, in each case sent
      by reputable overnight courier to the address as specified in the Exercise
      Notice, a certificate, registered in the Company’s share register in the name of
      the Holder or its designee (as indicated in the Exercise Notice), for the number
      of Common Shares to which the Holder is entitled pursuant to such exercise
      or
      the number of Warrant Shares that will not be immediately sold as indicated
      on
      such Exercise Notice (as the case may be). Upon delivery of the Exercise
      Delivery Documents, the Holder shall be deemed for all corporate purposes to
      have become the holder of record of the Warrant Shares with respect to which
      this Warrant has been exercised, irrespective of the date such Warrant Shares
      are credited to the Holder’s DTC or the date of delivery of the certificates
      evidencing such Warrant Shares, as the case may be. If this Warrant is submitted
      in connection with any exercise pursuant to this Section 1(a)
      and the
      number of Warrant Shares represented by this Warrant submitted for exercise
      is
      greater than the number of Warrant Shares being acquired upon an exercise,
      then
      the Company shall as soon as practicable and in no event later than three (3)
      Business Days after any exercise and at its own expense, issue and deliver
      to
      Holder (or its designee) a new Warrant (in accordance with Section 7(d))
      representing the right to purchase the number of Warrant Shares purchasable
      immediately prior to such exercise under this Warrant, less the number of
      Warrant Shares with respect to which this Warrant is exercised. No fractional
      Common Shares are to be issued upon the exercise of this Warrant, but rather
      the
      number of Common Shares to be issued shall be rounded up to the nearest whole
      number, subject to Section 1(f)(i).
      The
      Company shall pay any and all taxes which may be payable with respect to the
      issuance and delivery of Warrant Shares upon exercise of this Warrant.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (b) Exercise
      Price.
      For
      purposes of this Warrant, “Exercise
      Price”
means
      $0.01 USD, subject to adjustment as provided herein. 

     

    (c) Company’s
      Failure to Timely Deliver Securities.
      If the
      Company shall fail to use its best efforts to issue to the Holder within three
      (3) Business Days of receipt of the Exercise Delivery Documents, a certificate
      for the number of Common Shares to which the Holder is entitled and register
      such Common Shares on the Company’s share register or to credit the Holder’s
      balance account with DTC for such number of Common Shares to which the Holder
      is
      entitled upon the Holder’s exercise of this Warrant, then, in addition to all
      other remedies available to the Holder, the Company shall pay in cash to the
      Holder on each day after such third (3rd)
      Business Day that the issuance of such Common Shares is not timely effected
      an
      amount equal to 3.0% of the product of (A) the sum of the number of Common
      Shares not issued to the Holder on a timely basis and to which the Holder is
      entitled and (B) the Closing Sale Price of the Common Shares on the Trading
      Day
      immediately preceding the last possible date which the Company could have issued
      such Common Shares to the Holder without violating Section 1(a).
      In
      addition to the foregoing, if within three (3) Trading Days after the Company’s
      receipt of the facsimile copy of an Exercise Notice, the Company shall fail
      to
      issue and deliver a certificate to the Holder and register such Common Shares
      on
      the Company’s share register or credit the Holder’s balance account with DTC for
      the number of Common Shares to which the Holder is entitled upon such Holder’s
      exercise hereunder, and if on or after such Trading Day the Holder purchases
      (in
      an open market transaction or otherwise) Common Shares to deliver in
      satisfaction of a sale by the Holder of Common Shares issuable upon such
      exercise that the Holder anticipated receiving from the Company (a “Buy-In”),
      then
      the Company shall, within three (3) Business Days after the Holder’s request and
      in the Holder’s discretion, either (i) pay cash to the Holder in an amount equal
      to the Holder’s total purchase price (including brokerage commissions, if any)
      for the Common Shares so purchased (the “Buy-In
      Price”),
      at
      which point the Company’s obligation to deliver such certificate (and to issue
      such Common Shares) shall terminate and the Holder shall have no further right
      to such Common Shares or the portion of this Warrant representing such Common
      Shares, or (ii) promptly honor its obligation to deliver to the Holder a
      certificate or certificates representing such Common Shares and pay cash to
      the
      Holder in an amount equal to the excess (if any) of the Buy-In Price over the
      product of (A) such number of Common Shares, times (B) the Closing Bid Price
      on
      the date of exercise. 

     

    (d) Cashless
      Exercise.
      Notwithstanding anything contained herein to the contrary, the Holder may,
      in
      its sole discretion, exercise this Warrant in whole or in part and, in lieu
      of
      making the cash payment otherwise contemplated to be made to the Company upon
      such exercise in payment of the Aggregate Exercise Price, elect instead to
      receive upon such exercise the “Net Number” of Common Shares determined
      according to the following formula (a “Cashless
      Exercise”):

     

    Net
      Number =  (A
      x
      B) - (A x C)

    B

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    For
      purposes of the foregoing formula:

     

    A=
      the
      total number of shares with respect to which this Warrant is then being
      exercised.

     

    B=
      the
      Closing Sale Price of the Common Shares (as reported by Bloomberg) on the date
      immediately preceding the date of the Exercise Notice.

     

    C=
      the
      Exercise Price then in effect for the applicable Warrant Shares at the time
      of
      such exercise.

     

    (e) Disputes.
      In the
      case of a dispute as to the determination of the Exercise Price or the
      arithmetic calculation of the number of Warrant Shares to be issued pursuant
      to
      the terms hereof, the Company shall promptly issue to the Holder the number
      of
      Warrant Shares that are not disputed and resolve such dispute in accordance
      with
      Section 13.

     

    (f) Limitations
      on Exercises.
      

     

    (i) Beneficial
      Ownership.
      Notwithstanding anything to the contrary contained in this Warrant, this Warrant
      shall not be exercisable by the Holder hereof to the extent (but only to the
      extent) that, if exercisable by the Holder, the Holder, any of its affiliates
      or
      any other Person (as defined below) who may be deemed to be acting as a group
      in
      concert with the Holder or any of its affiliates for the purposes of Section
      13(d) of the 1934 Act (as defined in the Transaction Agreement) and the rules
      and regulations promulgated thereunder would beneficially own in excess
      of 4.90% (the “Maximum
      Percentage”)
      of the
      outstanding common shares of the Company. To the extent the above
      limitation applies, the determination of whether this Warrant shall be
      exercisable (vis-a-vis other convertible, exercisable or exchangeable securities
      owned by the Holder) and of which warrants shall be exercisable (as among all
      warrants owned by the Holder) shall, subject to such Maximum Percentage
      limitation, be determined on the basis of the first submission to the Company
      for conversion, exercise or exchange (as the case may be). No prior inability
      to
      exercise this Warrant pursuant to this paragraph shall have any effect on the
      applicability of the provisions of this paragraph with respect to any
      subsequent determination of exercisability. For the purposes of this paragraph,
      beneficial ownership and all determinations and calculations (including, without
      limitation, with respect to calculations of percentage ownership) shall be
      determined by the Holder in accordance with Section 13(d) of the 1934 Act and
      the rules and regulations promulgated thereunder. The provisions of this
      paragraph shall be implemented in a manner otherwise than in strict conformity
      with the terms of this paragraph to correct this paragraph (or any portion
      hereof) which may be defective or inconsistent with the intended Maximum
      Percentage beneficial ownership limitation herein contained or to make changes
      or supplements necessary or desirable to properly give effect to such Applicable
      Percentage limitation. The limitations contained in this paragraph shall apply
      to a successor Holder of this Warrant. The holders of common shares of
      the Company shall be third party beneficiaries of this paragraph and the Company
      may not waive this paragraph without the consent of the holders of a majority
      of
      its common shares. For purposes of this Warrant, in determining the
      number of outstanding Common Shares, the Holder may rely on the number of
      outstanding Common Shares as reflected in (1) the Company’s most recent Form
      10-K, Form 10-Q, Current Report on Form 8-K or other public filing with the
      Securities and Exchange Commission, as the case may be, (2) a more recent public
      announcement by the Company or (3) any other notice by the Company or the
      Transfer Agent setting forth the number of Common Shares outstanding. For any
      reason at any time, upon the written or oral request of the Holder, the Company
      shall within one (1) Business Day confirm orally and in writing to the Holder
      the number of Common Shares then outstanding, including by virtue of any prior
      conversion or exercise of convertible or exercisable securities into Common
      Shares, including, without limitation, pursuant to this Warrant. By written
      notice to the Company, the Holder may increase or decrease the Maximum
      Percentage to any other percentage not in excess of 4.90% specified in such
      notice.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (ii) Insufficient
      Authorized Shares.
      The
      Company shall at all times keep reserved for issuance under this Warrant a
      number of Common Shares as shall be necessary to satisfy the Company’s
      obligation to issue Common Shares hereunder, without regard to any limitation
      otherwise contained herein with respect to the number of Common Shares that
      may
      be acquirable upon exercise of this Warrant. If, notwithstanding the foregoing,
      and not in limitation thereof, at any time while any portion of this Warrant
      remains outstanding the Company does not have a sufficient number of authorized
      and unreserved Common Shares to satisfy its obligation to reserve for issuance
      upon exercise of the Warrant at least a number of Common Shares equal to the
      maximum number of Common Shares as shall from time to time be necessary to
      effect the exercise of the Warrant then outstanding (the “Required
      Reserve Amount”)
      (an
“Authorized
      Share Failure”),
      then
      the Company shall immediately take all action necessary to increase the
      Company’s authorized Common Shares to an amount sufficient to allow the Company
      to reserve the Required Reserve Amount for this Warrant. Without limiting the
      generality of the foregoing sentence, as soon as practicable after the date
      of
      the occurrence of an Authorized Share Failure, but in no event later than sixty
      (60) days after the occurrence of such Authorized Share Failure, the Company
      shall hold a meeting of its shareholders for the approval of an increase in
      the
      number of authorized Common Shares. In connection with such meeting, the Company
      shall provide each shareholder with a proxy statement and shall use its best
      efforts to solicit its shareholders’ approval of such increase in authorized
      Common Shares and to cause its board of directors to recommend to the
      shareholders that they approve such proposal.

     

    2. ADJUSTMENT
      OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES.
      If the
      Company at any time on or after the Subscription Date subdivides (by any stock
      split, stock dividend, recapitalization or otherwise) one or more classes of
      its
      outstanding Common Shares into a greater number of shares, the Exercise Price
      in
      effect immediately prior to such subdivision will be proportionately reduced
      and
      the number of Warrant Shares will be proportionately increased. If the Company
      at any time on or after the Subscription Date combines (by combination, reverse
      stock split or otherwise) one or more classes of its outstanding Common Shares
      into a smaller number of shares, the Exercise Price in effect immediately prior
      to such combination will be proportionately increased and the number of Warrant
      Shares will be proportionately decreased. Any adjustment under this Section
      2
      shall
      become effective at the close of business on the date the subdivision or
      combination becomes effective.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    3. RIGHTS
      UPON DISTRIBUTION OF ASSETS.
      If the
      Company shall declare or make any dividend or other distribution of its assets
      (or rights to acquire its assets) to holders of Common Shares, by way of return
      of capital or otherwise (including, without limitation, any distribution of
      cash, stock or other securities, property or options by way of a dividend,
      spin
      off, reclassification, corporate rearrangement, scheme of arrangement or other
      similar transaction) (a “Distribution”),
      at
      any time after the issuance of this Warrant, then, in each such case the Holder
      will be entitled to participate in such Distribution to the same extent that
      the
      Holder would have participated therein if the Holder had held the number of
      Common Shares acquirable upon complete exercise of this Warrant (without regard
      to any limitations on such exercise hereof, including without limitation, the
      Maximum Percentage) immediately before the date on which a record is taken
      for
      such Distribution, or, if no such record is taken, the date as of which the
      record holders of Common Shares are to be determined for participation in such
      Distribution (provided, however, that to the extent that the Holder’s right to
      participate in any such Distributions would result in the Holder exceeding
      the
      Maximum Percentage, then Holder shall not be entitled to participate in such
      Distribution to such extent (or the beneficial ownership of any such Common
      Shares as a result of such Distribution to such extent) and such Distribution
      to
      such extent shall be held in abeyance for the benefit of the Holder until such
      time, if ever, as its right thereto would not result in the Holder exceeding
      the
      Maximum Percentage).

     

    
      
        4.
          PURCHASE
          RIGHTS; FUNDAMENTAL CHANGE.

      

    

     

    (a) Purchase
      Rights.
      In
      addition to any adjustments pursuant to Section 2
      above,
      if at any time the Company grants, issues or sells any Options, Convertible
      Securities or rights to purchase stock, warrants, securities or other property
      pro rata to the record holders of all Common Shares (the “Purchase
      Rights”),
      then
      the Holder will be entitled to acquire, upon the terms applicable to such
      Purchase Rights, the aggregate Purchase Rights which the Holder could have
      acquired if the Holder had held the number of Common Shares acquirable upon
      complete exercise of this Warrant (without regard to any limitations on such
      exercise hereof, including without limitation, the Maximum Percentage)
      immediately before the date on which a record is taken for the grant, issuance
      or sale of such Purchase Rights, or, if no such record is taken, the date as
      of
      which the record holders of Common Shares are to be determined for the grant,
      issue or sale of such Purchase Rights (provided, however, that to the extent
      that the Holder’s right to participate in any such Purchase Right would result
      in the Holder exceeding the Maximum Percentage, then the Holder shall not be
      entitled to participate in such Purchase Right to such extent (or beneficial
      ownership of such Common Shares as a result of such Purchase Right to such
      extent) and such Purchase Right to such extent shall be held in abeyance for
      the
      Holder until such time, if ever, as its right thereto would not result in the
      Holder exceeding the Maximum Percentage).

     

    (b) Major
      Transaction.
      In
      addition to and not in substitution for any other rights hereunder, in the
      event
      that the Company shall enter into any Change of Control Transaction or
      recapitalization or merger or share exchange or other transaction, in each
      case
      pursuant to which holders of Common Shares are entitled to receive securities,
      cash or other assets or property (or any combination of the foregoing) with
      respect to or in exchange for Common Shares (a “Corporate
      Event”),
      then
      the Holder will thereafter have the right to receive upon an exercise of this
      Warrant at
      any
      time after the consummation of
      such
transaction
      (but prior to the Expiration Date),
      such
      securities, cash or other assets or property (or such combination of the
      foregoing and including any shares of Common Stock) which the Holder would
      have
      been entitled to receive (and, in the case of Common Stock, retain) upon the
      happening of such transaction had this Warrant been exercised in full (and
      without regard to any limitations on conversion herein contained) immediately
      prior to such transaction.
      The Company shall not enter into or be party to any such Change of Control
      Transaction or recapitalization or merger or share exchange or other transaction
      unless (i) proper provision in connection with such transaction is made for
      the foregoing in writing for the benefit of, and to the reasonable satisfaction
      of, the Holder, including, without limitation, and to the extent appropriate,
      a
      security of the Successor Entity evidenced by a written instrument substantially
      similar in form and substance to this Warrant, including, without limitation,
      which is exercisable for a corresponding number of shares of capital stock
      equivalent to the Common Shares acquirable and receivable upon exercise of
      this
      Warrant (without regard to any limitations on the exercise of this Warrant)
      prior to such transaction, and with an exercise price which applies the exercise
      price hereunder to such shares of capital stock (but taking into account the
      relative value of the Common Shares pursuant to such transaction and the value
      of such shares of capital stock, such adjustments to the number of shares of
      capital stock and such exercise price being for the purpose of protecting the
      economic value of this Warrant immediately prior to the consummation of such
      transaction), and which is reasonably satisfactory in form and substance to
      the
      Holder. The provisions of this Section 4(b)
      shall
      apply similarly and equally to successive Change of Control Transactions and
      other Corporate Events and shall be applied without regard to any limitations
      on
      the exercise of this Warrant (provided that the Holder shall continue to be
      entitled to the benefit of the Maximum Percentage, applied however with respect
      to shares of capital stock registered under the 1934 Act and thereafter
      receivable upon exercise of this Warrant (or any such other
      warrant)).

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (c) Notwithstanding
      the foregoing and the provisions of Section 4(b)
      above or
      any other provision of this Warrant, in the event of a Fundamental Change,
      if
      the Holder has not exercised the Warrant in full prior to the occurrence of
      such
      Fundamental Change, then, at the written request of the Holder delivered at
      any
      time after such Fundamental Change, the Company (or the Successor Entity, as
      the
      case may be) shall purchase
      20% of the unexercised portion of this Warrant from the Holder by paying to
      the
      Holder, within five (5) Business Days,
      cash in
      an amount equal to the difference between the greater of (x) the weighted
      average Closing Sales Price of the Common Shares over the thirty (30) Business
      Days preceding the announcement of the applicable Fundamental Change and (y)
      the
      Closing Sale Price on the day immediately following the public announcement
      of
      the applicable Fundamental Change, and the Exercise Price multiplied by the
      number of Warrant Shares underlying the 20%
      of
      the unexercised portion of this Warrant being purchased; provided that, the
      Company (or
      the
      Successor Entity, as the case may be) may choose not to make the foregoing
      purchase
      at any time after the Registration Statement (as defined in the Registration
      Rights Agreement) is declared effective by the SEC and is available for
      use.

     

    5. NONCIRCUMVENTION.
      The
      Company hereby covenants and agrees that the Company will not, by amendment
      of
      its Articles of Incorporation, Bylaws or through any reorganization, transfer
      of
      assets, consolidation, merger, scheme of arrangement, dissolution, issue or
      sale
      of securities, or any other voluntary action, avoid or seek to avoid the
      observance or performance of any of the terms of this Warrant, and will at
      all
      times in good faith carry out all the provisions of this Warrant and take all
      action as may be required to protect the rights of the Holder. Without limiting
      the generality of the foregoing, the Company (i) shall not increase the par
      value of any Common Shares receivable upon the exercise of this Warrant above
      the Exercise Price then in effect, (ii) shall take all such actions as may
      be necessary or appropriate in order that the Company may validly and legally
      issue fully paid and nonassessable Common Shares upon the exercise of this
      Warrant, and (iii) shall, so long as any portion of this Warrant is outstanding,
      take all action necessary to reserve and keep available out of its authorized
      and unissued Common Shares, solely for the purpose of effecting the exercise
      of
      this Warrant, the maximum number of Common Shares as shall from time to time
      be
      necessary to effect the exercise of this Warrant then outstanding (without
      regard to any limit on exercise of this Warrant).

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    6. WARRANT
      HOLDER NOT DEEMED A SHAREHOLDER.
      Except
      as otherwise specifically provided herein, the Holder, solely in such Person’s
      capacity as a holder of this Warrant, shall not be entitled to vote or receive
      dividends or be deemed the holder of share capital of the Company for any
      purpose, nor shall anything contained in this Warrant be construed to confer
      upon the Holder, solely in such Person’s capacity as the Holder of this Warrant,
      any of the rights of a shareholder of the Company or any right to vote, give
      or
      withhold consent to any corporate action (whether any reorganization, issue
      of
      stock, reclassification of stock, consolidation, merger, conveyance or
      otherwise), receive notice of meetings, receive dividends or subscription
      rights, or otherwise, prior to the issuance to the Holder of the Warrant Shares
      which such Person is then entitled to receive upon the due exercise of this
      Warrant. In addition, nothing contained in this Warrant shall be construed
      as
      imposing any liabilities on the Holder to purchase any securities (upon exercise
      of this Warrant or otherwise) or as a shareholder of the Company, whether such
      liabilities are asserted by the Company or by creditors of the Company.
      Notwithstanding this Section 6,
      the
      Company shall provide the Holder with copies of the same notices and other
      information given to the shareholders of the Company generally,
      contemporaneously with the giving thereof to the shareholders.

     

    
      
        7.
          REISSUANCE
          OF WARRANTS.

      

    

     

    (a) Transfer
      of Warrant.
      If this
      Warrant is to be transferred, the Holder shall surrender this Warrant to the
      Company, whereupon the Company will forthwith issue and deliver upon the order
      of the Holder a new Warrant (in accordance with Section 7(d)),
      registered as the Holder may request, representing the right to purchase the
      number of Warrant Shares being transferred by the Holder and, if less than
      the
      total number of Warrant Shares then underlying this Warrant is being
      transferred, a new Warrant (in accordance with Section 7(d))
      to the
      Holder representing the right to purchase the number of Warrant Shares not
      being
      transferred. This Warrant shall not be transferred unless and until (i) the
      Company has received the opinion of counsel for the Holder that the securities
      may be transferred pursuant to an exemption from registration under the 1933
      Act
      and applicable state securities laws, the availability of which is established
      to the reasonable satisfaction of the Company, or (ii) a registration statement
      has been filed by the Company and declared effective by the Securities and
      Exchange Commission and compliance with applicable state securities law has
      been
      established, or (iii) the Holder provides the Company with reasonable assurance
      that the Warrant can be transferred pursuant to Rule 144 or Rule 144A
      promulgated under the 1933 Act (or a successor rule thereto).

     

    (b) Lost,
      Stolen or Mutilated Warrant.
      Upon
      receipt by the Company of evidence reasonably satisfactory to the Company of
      the
      loss, theft, destruction or mutilation of this Warrant (as to which a written
      certification and the indemnification contemplated below shall suffice as such
      evidence), and, in the case of loss, theft or destruction, of any
      indemnification undertaking by the Holder to the Company in customary form
      and,
      in the case of mutilation, upon surrender and cancellation of this Warrant,
      the
      Company shall execute and deliver to the Holder a new Warrant (in accordance
      with Section 7(d))
      representing the right to purchase the Warrant Shares then underlying this
      Warrant.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (c) Exchangeable
      for Multiple Warrants.
      This
      Warrant is exchangeable, upon the surrender hereof by the Holder at the
      principal office of the Company, for a new Warrant or Warrants (in accordance
      with Section 7(d))
      representing in the aggregate the right to purchase the number of Warrant Shares
      then underlying this Warrant, and each such new Warrant will represent the
      right
      to purchase such portion of such Warrant Shares as is designated by the Holder
      at the time of such surrender; provided, however, that no Warrants for
      fractional Common Shares shall be given.

     

    (d) Issuance
      of New Warrants.
      Whenever the Company is required to issue a new Warrant pursuant to the terms
      of
      this Warrant, such new Warrant (i) shall be of like tenor with this Warrant,
      (ii) shall represent, as indicated on the face of such new Warrant, the right
      to
      purchase the Warrant Shares then underlying this Warrant (or in the case of
      a
      new Warrant being issued pursuant to Section 7(a)
      or
      Section 7(c),
      the
      Warrant Shares designated by the Holder which, when added to the number of
      Common Shares underlying the other new Warrants issued in connection with such
      issuance, does not exceed the number of Warrant Shares then underlying this
      Warrant), (iii) shall have an issuance date, as indicated on the face of such
      new Warrant which is the same as the Issuance Date, and (iv) shall have the
      same
      rights and conditions as this Warrant.

     

    8. NOTICES.
      Whenever notice is required to be given under this Warrant, unless otherwise
      provided herein, such notice shall be given in accordance with Section 9(g)
      of
      the Transaction Agreement. The Company shall provide the Holder with prompt
      written notice of all actions taken pursuant to this Warrant, including in
      reasonable detail a description of such action and the reason therefor. Without
      limiting the generality of the foregoing, the Company will give written notice
      to the Holder (i) immediately upon any adjustment of the Exercise Price, setting
      forth in reasonable detail, and certifying, the calculation of such adjustment
      and (ii) at least fifteen (15) days prior to the date on which the Company
      closes its books or takes a record (A) with respect to any dividend or
      distribution upon the Common Shares, (B) with respect to any grants, issuances
      or sales of any Options, Convertible Securities or rights to purchase stock,
      warrants, securities or other property to all of the holders of Common Shares
      or
      (C) for determining rights to vote with respect to any Fundamental Change
      requiring notice to the Company’s shareholders, dissolution or liquidation,
      provided in each case that such information shall be made known to the public
      prior to or in conjunction with such notice being provided to the Holder. To
      the
      extent that any notice provided hereunder constitutes, or contains, material,
      non-public information, the Company shall simultaneously file such notice with
      the SEC (as defined in the Transaction Agreement) pursuant to a Current Report
      on Form 8-K.

     

    9. AMENDMENT
      AND WAIVER.
      Except
      as otherwise provided herein, the provisions of this Warrant may be amended
      and
      the Company may take any action herein prohibited, or omit to perform any act
      herein required to be performed by it, only if the Company has obtained the
      written consent of the Holder. 

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    10. SEVERABILITY.
      If any
      provision of this Warrant or the application thereof becomes or is declared
      by a
      court of competent jurisdiction to be illegal, void or unenforceable, the
      remainder of the terms of this Warrant will continue in full force and
      effect.

     

    11. GOVERNING
      LAW.
      This
      Warrant shall be governed by and construed and enforced in accor-dance with,
      and
      all questions concerning the construction, validity, interpretation and
      performance of this Warrant shall be governed by, the internal laws of the
      State
      of Illinois, without giving effect to any choice of law or conflict of law
      provision or rule (whether of the State of Illinois or any other jurisdictions)
      that would cause the application of the laws of any jurisdictions other than
      the
      State of Illinois.

     

    12. CONSTRUCTION;
      HEADINGS.
      This
      Warrant shall be deemed to be jointly drafted by the Company and the Holder
      and
      shall not be construed against any person as the drafter hereof. The headings
      of
      this Warrant are for convenience of reference and shall not form part of, or
      affect the interpretation of, this Warrant.

     

    13. DISPUTE
      RESOLUTION.
      In the
      case of a dispute as to the determination of the Exercise Price or the
      arithmetic calculation of the Warrant Shares, the Company shall submit the
      disputed determinations or arithmetic calculations via facsimile within two
      (2)
      Business Days of receipt of the Exercise Notice giving rise to such dispute,
      as
      the case may be, to the Holder. If the Holder and the Company are unable to
      agree upon such determination or calculation of the Exercise Price or the number
      of Warrant Shares within three (3) Business Days of such disputed determination
      or arithmetic calculation being submitted to the Holder, then the Company shall,
      within two (2) Business Days submit via facsimile (a) the disputed determination
      of the Exercise Price to an independent, reputable investment bank selected
      by
      the Company and approved by the Holder or (b) the disputed arithmetic
      calculation of the Warrant Shares to the Company’s independent, outside
      accountant. The Company shall cause at its expense the investment bank or the
      accountant, as the case may be, to perform the determinations or calculations
      and notify the Company and the Holder of the results no later than ten (10)
      Business Days from the time it receives the disputed determinations or
      calculations. Such investment bank’s or accountant’s determination or
      calculation, as the case may be, shall be binding upon all parties absent
      demonstrable error.

     

    14. REMEDIES,
      OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF.
      The
      remedies provided in this Warrant shall be cumulative and in addition to all
      other remedies available under this Warrant and the other Transaction Documents,
      at law or in equity (including a decree of specific performance and/or other
      injunctive relief), and nothing herein shall limit the right of the Holder
      to
      pursue actual damages for any failure by the Company to comply with the terms
      of
      this Warrant. The Company acknowledges that a breach by it of its obligations
      hereunder will cause irreparable harm to the Holder and that the remedy at
      law
      for any such breach may be inadequate. The Company therefore agrees that, in
      the
      event of any such breach or threatened breach, the holder of this Warrant shall
      be entitled, in addition to all other available remedies, to an injunction
      restraining any breach, without the necessity of showing economic loss and
      without any bond or other security being required. The issuance of shares and
      certificates for shares as contemplated hereby upon the exercise of this Warrant
      shall be made without charge to the Holder or such shares for any issuance
      tax
      or other costs in respect thereof, provided that the Company shall not be
      required to pay any tax which may be payable in respect of any transfer involved
      in the issuance and delivery of any certificate in a name other than the Holder
      or its agent on its behalf.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    15. TRANSFER. This
      Warrant may be offered for sale, sold, transferred or assigned in whole or
      in
      part without the consent of the Company.
      In
      connection with any such transfer, the Holder shall be entitled to disclose
      to
      the transferee any information about the Company, its subsidiaries, and its
      and
      their securities, in the Holder’s possession.

     

    16. CERTAIN
      DEFINITIONS.
      For
      purposes of this Warrant, the following terms shall have the following
      meanings:

     

    (a) “Bloomberg”
means
      Bloomberg Financial Markets.

     

    (b) “Business
      Day”
means
      any day other than Saturday, Sunday or other day on which commercial banks
      in
      Chicago, Illinois are authorized or required by law to remain
      closed.

     

    (c) “Change
      of Control Transaction”
shall
      mean (x) a Fundamental Change under clauses (ii) or (iii) of the definition
      thereof or (y) a Fundamental Change under clause (i) or (vi) of the definition
      thereof and which results in any “person” or “group” (as these terms are used
      for purposes of Sections 13(d) and 14(d) of the Exchange Act) beneficially
      owning directly or indirectly (within the meaning of Section 13(d) of the
      Exchange Act) more than the 50% of the outstanding Common Shares of the
      Company.

     

    (d) “Closing
      Bid Price”
and
      “Closing
      Sale Price”
means,
      for any security as of any date, the last closing bid price and last closing
      trade price, respectively, for such security on the Principal Market, as
      reported by Bloomberg, or, if the Principal Market begins to operate on an
      extended hours basis and does not designate the closing bid price or the closing
      trade price, as the case may be, then the last bid price or last trade price,
      respectively, of such security prior to 4:00:00 p.m., New York time, as reported
      by Bloomberg, or, if the Principal Market is not the principal securities
      exchange or trading market for such security, the last closing bid price or
      last
      trade price, respectively, of such security on the principal securities exchange
      or trading market where such security is listed or traded as reported by
      Bloomberg, or if the foregoing do not apply, the last closing bid price or
      last
      trade price, respectively, of such security in the over-the-counter market
      on
      the electronic bulletin board for such security as reported by Bloomberg, or,
      if
      no closing bid price or last trade price, respectively, is reported for such
      security by Bloomberg, the average of the bid prices, or the ask prices,
      respectively, of any market makers for such security as reported in the “pink
      sheets” by Pink Sheets LLC (formerly the National Quotation Bureau, Inc.). If
      the Closing Bid Price or the Closing Sale Price cannot be calculated for a
      security on a particular date on any of the foregoing bases, the Closing Bid
      Price or the Closing Sale Price, as the case may be, of such security on such
      date shall be the fair market value as mutually determined by the Company and
      the Holder. If the Company and the Holder are unable to agree upon the fair
      market value of such security, then such dispute shall be resolved pursuant
      to
      Section 13.
      All
      such determinations to be appropriately adjusted for any stock dividend, stock
      split, stock combination or other similar transaction during the applicable
      calculation period.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (e) “Common
      Shares”
means
      (i) the Company’s common shares, no par value, and (ii) any capital
      stock into which such common shares shall have been changed or any share capital
      resulting from a reclassification of such common shares.

     

    (f) “Convertible
      Securities”
means
      any stock or securities (other than Options) directly or indirectly convertible
      into or exercisable or exchangeable for Common Shares.

     

    (g) “Eligible
      Market”
means
      the Principal Market, The New York Stock Exchange, Inc., the Nasdaq Global
      Market or The Nasdaq Global Select Market.

     

    (h) “Expiration
      Date”
means
      the date sixty (60) months

     

    after
      the
      Issuance Date or, if such date falls on a day other than a Business Day or
      on
      which trading does not take place on the Principal Market (a “Holiday”),
      the
      next date that is not a Holiday. 

     

    (i) “Fundamental
      Change”
means
      that the Company shall, directly or indirectly, in one or more related
      transactions, (i) consolidate
      or merge with or into (whether or not the Company is the surviving corporation)
      another Person (provided that for the purposes of Section 4(c), such
      consolidation or merger shall not be deemed to be a Fundamental Change if the
      Company is the surviving corporation, the Common Shares continue to be publicly
      traded and the Obligations (as defined in the Loan Agreement (as defined in
      the
      Transaction Agreement)) continue to be secured by a first priority security
      interest in all of the assets of the Borrowers and the Guarantors (each as
      defined in the Loan Agreement) including all of the assets of the acquired
      Person and its direct and indirect subsidiaries, or
      (ii)
      sell, assign, transfer, convey or otherwise dispose of all or substantially
      all
      of the properties or assets of the Company or any of its direct or indirect
      Subsidiaries to another Person, or (iii) consummate a stock purchase agreement
      or other business combination (including, without limitation, a reorganization,
      recapitalization, spin-off or scheme of arrangement) with another Person whereby
      such other Person acquires more than the 50% of the outstanding Common Shares
      (not including any Common Shares held by the other Person or other Persons
      making or party to, or associated or affiliated with the other Persons making
      or
      party to, such stock purchase agreement or other business combination), or
      (iv)
      materially change or be subject to a material change in the business operations
      of the Company, or (v) Michael Mullarkey ceases to serve (whether by resignation
      and/or termination) as both Chief Executive Officer and Chairman of the Board
      of
      the Company, or (vi) reorganize, recapitalize or reclassify its Common Shares
      (provided
      that for the purposes of Section 4(c) hereof and Section 7.1(c) of the Loan
      Agreement, such reorganization,
      recapitalization or reclassification shall
      not
      be deemed to be a Fundamental Change so long as such reorganization,
      recapitalization or reclassification would not otherwise constitute a
      Fundamental Change hereunder, the Common Shares remain publicly-traded
      securities after the consummation thereof and the Holder receives any applicable
      adjustments under this Warrant in connection therewith),
      or
      (vii) be subject to an Event of Default (as defined in the Loan
      Agreement).

     

    (j) “Options”
means
      any rights, warrants or options to subscribe for or purchase Common Shares
      or
      Convertible Securities.

     

    (k) “Parent
      Entity”
of
      a
      Person means an entity that, directly or indirectly, controls the applicable
      Person and whose common shares or equivalent equity security is quoted or listed
      on an Eligible Market, or, if there is more than one such Person or Parent
      Entity, the Person or Parent Entity with the largest public market
      capitalization as of the date of consummation of the Change of Control
      Transaction.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (l) “Person”
means
      an individual, a limited liability company, a partnership, a joint venture,
      a
      corporation, a trust, an unincorporated organization, any other entity and
      a
      government or any department or agency thereof.

     

    (m) “Principal
      Market”
means
      The Nasdaq Capital Market.

     

    (n) “Registration
      Rights Agreement”
means
      that certain registration rights agreement, dated as of the Issuance Date,
      by
      and between the Company and the Holder.

     

    (o) “Successor
      Entity”
means
      the Person (or, if so elected by the Holder, the Parent Entity) formed by,
      resulting from or surviving any Change of Control Transaction or the Person
      (or,
      if so elected by the Holder, the Parent Entity) with which such Change of
      Control Transaction shall have been entered into.

     

    (p) “Trading
      Day”
means
      any day on which the Common Shares is traded on the Principal Market, or, if
      the
      Principal Market is not the principal trading market for the Common Shares,
      then
      on the principal securities exchange or securities market on which the Common
      Shares is then traded; provided that “Trading Day” shall not include any day on
      which the Common Shares is scheduled to trade on such exchange or market for
      less than 4.5 hours or any day that the Common Shares is suspended from trading
      during the final hour of trading on such exchange or market (or if such exchange
      or market does not designate in advance the closing time of trading on such
      exchange or market, then during the hour ending at 4:00:00 p.m., New York
      time).

     

    (q) “USD”
means
      United States Dollars.

     

    [signature
      page follows]

     

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    IN
      WITNESS WHEREOF,
      the
      Company has caused this Warrant to Purchase Common Shares to be duly executed
      as
      of the Issuance Date set out above.

     

    
      	 	 	 
	 	WORKSTREAM
              INC.
	 
 	 
 	 
 
	 	By:  	 
	 	
              
Name: 
	 	Title:

    

     

     

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
      A

     

    EXERCISE
      NOTICE

    TO
      BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS

    WARRANT
      TO PURCHASE COMMON SHARES

     

    WORKSTREAM
      INC.

    The
      undersigned holder hereby exercises the right to purchase _________________
      of
      the Common Shares (“Warrant
      Shares”)
      of
      Workstream Inc., a corporation existing pursuant to the Canada Business
      Corporations Act (the “Company”),
      evidenced by the attached Warrant to Purchase Common Shares (the “Warrant”).
      Capitalized terms used herein and not otherwise defined shall have the
      respective meanings set forth in the Warrant.

     

    1. Form
      of
      Exercise Price. The Holder intends that payment of the Exercise Price shall
      be
      made as:

     

    ____________ a
      “Cash
      Exercise”
with
      respect to _________________ Warrant Shares; and/or

     

    ____________ a
      “Cashless
      Exercise”
with
      respect to _______________ Warrant Shares.

     

    2. Payment
      of Exercise Price. In the event that the holder has elected a Cash Exercise
      with
      respect to some or all of the Warrant Shares to be issued pursuant hereto,
      the
      holder shall pay the Aggregate Exercise Price in the sum of $___________________
      to the Company in accordance with the terms of the Warrant.

     

    3. Delivery
      of Warrant Shares. The Company shall deliver to holder, or its designee or
      agent
      as specified below, __________ Warrant Shares in accordance with the terms
      of
      the Warrant. Delivery shall be made to holder, or for its benefit, to the
      following address:

     

    
      	 	
              _______________________

              _______________________

              _______________________

              _______________________

            	 

    

    

    

    4. The
      holder intends to immediately sell ___________ Warrant Shares pursuant to the
      registration statement covering the resale of such Warrant Shares and, to the
      extent applicable, in compliance with the prospectus delivery requirements
      of
      the Securities Act of 1933, as amended.

     

    Date:
      _______________ __, ______

     

    _____________________________

    Name
      of
      Registered Holder

     

    By:         
      ______________________    

    Name:

    Title:

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    ACKNOWLEDGMENT

     

    The
      Company hereby acknowledges this Exercise Notice and hereby directs
      ______________ to issue the above indicated number of Common Shares in
      accordance with the Transfer Agent Instructions dated ___________ __, 2006
      from
      the Company and acknowledged and agreed to by _______________.

     

    
       

      
        	 	 	 
	 	WORKSTREAM
                INC.
	 
 	 
 	 
 
	 	By:  	 
	 	
                
Name: 
	 	Title:

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