8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D) OF

THE SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): January 18, 2011

WORKSTREAM INC.

(Exact Name of Registrant as Specified in Charter)

CANADA	001-15503	N/A
(State or Other Jurisdiction  of Incorporation)	(Commission File Number)	(I.R.S. Employer   Identification No.)

485 N. KELLER ROAD, SUITE 500, MAITLAND, FL 32751

(Address of Principal Executive Offices) (Zip Code)

(407) 475-5500

 (Registrant's Telephone Number, Including Area Code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01. Entry into a Material Definitive Agreement.

Effective as of January 18, 2011, Workstream Inc. (the “Company”), Tomahawk Merger Corporation, a wholly-owned subsidiary of the Company (“Merger Sub”), Incentives Advisors, LLC (“IA”) and the members of IA, Bill Becker (“Becker”) and Shaung Liu (“Liu,” and together with Becker, the “Selling Members”), entered into a Merger Letter Agreement (the “Merger Agreement”) pursuant to which Merger Sub merged with and into IA, whereupon the separate corporate existence of Merger Sub ceased and IA continued as the surviving entity and a wholly-owned subsidiary of the Company (the “Merger”).  The total consideration paid to the Selling Members under the Merger Agreement was $2,124,000, payable as follows: $154,000 in cash; two subordinated prom issory notes each in the face amount of $117,500 (the “Notes”); and 47,508,215 unregistered common shares of the Company. The number of common shares issued at closing was determined based on the weighted average closing price of the Company’s common shares on the OTCBB for the ten trading days ending on the tenth trading day prior to the closing date of the Merger.  The issuance of the common shares was deemed to be exempt from registration pursuant to Section 4(2) of the Securities Act of 1933.

Each Note is unsecured and matures on August 1, 2013.  Interest on each Note accrues at an annual rate of 5% beginning on February 1, 2011.  Principal and interest accruing thereon is payable in thirty equal monthly installments beginning on March 1, 2011.  Upon the occurrence of an event of default (as defined in the Notes) that is continuing, the holder of the Note may, at his option, declare the entire principal balance of the Note, together with accrued but unpaid interest thereon, immediately due and payable.  To the extent the Company is entitled to be indemnified for any reason under the Merger Agreement, the Company is entitled to offset such amounts against the principal amount of the Note and interest payments owing thereon, on a dollar-for-dollar basis.

In connection with the closing of the Merger Agreement, the Company entered into a Noncompetition Agreement with each of the Selling Members pursuant to which each Selling Member agreed, for a period of 18 months following the closing of the Merger, not to: compete with the Company, IA or any of their respective affiliates (provided, however, that with respect only to the Arizona tax credits line of business, such restriction shall continue for a period of six (6) months following the closing of the Merger); employ, solicit for employment or otherwise contract for the services of any employee of the Company, IA or any affiliate; or in any way interfere with any of the Company’s, IA’s or any affiliate’s customer, vendor, supplier or other professional or business relationships.

In connection with the closing of the Merger Agreement, IA entered into an Employment Agreement with each Selling Member pursuant to which each Selling Member became a Senior Vice President, Tax Credit and Incentive Services of IA.  Each employment agreement has a three-year term that expires on January 18, 2014.  Each Selling Member will earn an initial base salary of U.S.$145,000 and is also eligible to

receive quarterly and annual cash bonuses based on the financial performance of IA’s business during the term of the Employment Agreement.

A copy of the Merger Agreement is attached as Exhibit 10.1.  A copy of the form of Note issued to each Selling Member is attached as Exhibit 10.2.  A copy of the form of Noncompetition Agreement entered into with each Selling Member is attached as Exhibit 10.3.  A copy of the form of Employment Agreement entered into with each Selling Member is attached as Exhibit 10.4.  The descriptions of the agreements or instruments contained herein are qualified in their entirety by reference to the actual agreements or instruments attached hereto.

On January 21, 2011, the Company issued a press release announcing the Merger.  The full text of such press release is attached hereto as Exhibit 99.1.

Item 2.01. Completion of Acquisition or Disposition of Assets.

The information set forth under Item 1.01 “Entry into Material Agreement” is incorporated herein by reference.

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information set forth under Item 1.01 “Entry into Material Agreement” is incorporated herein by reference.

Item 3.02. Unregistered Sales of Equity Securities.

The information set forth under Item 1.01 “Entry into Material Agreement” is incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.

(a) Financial Statements of Businesses Acquired.

The Company will file the financial statements required by Item 9.01(a) of Form 8-K by an amendment to this Current Report on Form 8-K no later than 71 days after the date that this Current Report on Form 8-K must be filed.

(b) Pro Forma Financial Information.

The Company will file the financial statements required by Item 9.01(a) of Form 8-K by an amendment to this Current Report on Form 8-K no later than 71 days after the date that this Current Report on Form 8-K must be filed.

(d) Exhibits.

10.1 Merger Letter Agreement dated as of January 18, 2011 among the Company, IA and the Selling Members.

10.2 Form of Subordinated Promissory Note issued by the Company in favor of each of Becker and Liu as of January 18, 2011.

10.3 Form of Noncompetition Agreement dated as of January 18, 2011 between the Company, IA and each Selling Member.

10.4 Form of Employment Agreement dated as of January 18, 2011 between IA and each Selling Member.

99.1 Press release issued by the Company on January 21, 2011

 SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	WORKSTREAM INC.
Dated: January 21, 2011	By:	/s/ John Long
		Name: John Long Title: Chief Executive Officer

EX-10.1

Exhibit 10.1

Workstream Inc.

485 N. Keller Road, Suite 500

Maitland, FL  32751

www.workstreaminc.com

January 18, 2011

Mr. Bill Becker

Mr. Shaung Liu

Incentives Advisors, LLC

2141 East Broadway, Suite 103

Tempe, AZ  86282

Gentlemen:

I am pleased that we have come to terms regarding the purchase of Incentives Advisors, LLC, an Arizona limited liability company (“IA” or the “Company”).  Accordingly, upon your acceptance of this letter agreement, the following terms and conditions will constitute an agreement for the purchase by Workstream Inc., a Canadian corporation (“Workstream”), through a wholly-owned subsidiary, from Bill Becker (“Becker”) and Shaung Liu (“Liu,” and together with Becker, “you” or “your” as the context may require) of all of the issued and outstanding equity interests in the Company.

Subject to the satisfaction or waiver of conditions to closing set forth below, at the Effective Time (as defined below), the Company and Tomahawk Merger Corporation, a Delaware corporation (“Merger Sub”) and wholly-owned subsidiary of Workstream, shall consummate a merger (the “Merger”) pursuant to which (a) Merger Sub shall be merged with and into the Company and the separate corporate existence of Merger Sub shall thereupon cease, (b) the Company shall be the surviving limited liability company in the Merger (sometimes referred to herein as the “Surviving Company”) and shall continue to be governed by the laws of the State of Arizona and (c) the separate limited liability company existence of the Company, with all its rights, privileges, immunities, powers and franchises, shall continue following the Merger, except as otherwise set forth in this letter agreement.

Workstream, Merger Sub and the Company will cause a Certificate of Merger in the relevant forms attached hereto as Exhibit A (each, the “Certificate of Merger”) to be executed and filed on the closing date (or on such other date as Workstream and the Company may agree) with the Arizona Corporation Commission of the State of Arizona as provided in the Arizona Corporations Code and the Secretary of State of the State of Delaware as provided in the

Delaware General Corporation Law.  The Merger shall become effective upon the filing of the Certificate of Merger with and accepted by the Arizona Corporation Commission of the State of Arizona and the Secretary of State of the State of Delaware or at such other time as is agreed upon by Workstream and the Company and specified in the Certificate of Merger (collectively, the “Effective Time”).

In connection with the Merger, (x) the Articles of Organization of the Company, as in effect immediately prior to the Effective Time, shall be the Articles of Organization of the Surviving Company until thereafter amended as provided by law and such Articles of Organization, (y) the Operating Agreement of Surviving Company, as in effect immediately prior to the Effective Time, shall be the Operating Agreement of the Surviving Company until thereafter amended as provided by law, by such Articles of Organization or by such Operating Agreement and (z) the directors and officers of Merger Sub immediately prior to the Effective Time shall be the directors and officers, respectively, of the Surviving Company, each of such directors and officers to hold office, subject to the applicable provisions of the Articles of Organization and Operating Agreement of the Surviving Company, until their respective successors shall be duly elected or appointed and qualified.  From and after the Effective Time, the Merger shall have the effects specified in the Arizona Corporations Code.

At the Effective Time, by virtue of the Merger and without any further action on the part of the members of the Company:

1. All of the issued and outstanding membership interests in the Company (each, an “LLC Membership Unit” and collectively, the “LLC Membership Units”) shall be cancelled and converted into the right to receive a portion of the Merger Consideration (as defined below), payable to the holder thereof pursuant to the paragraph immediately following, without interest, upon surrender of the certificate representing such membership interests (each a “Company Certificate”) in the manner provided below.

2. The total consideration for which all of the LLC Membership Units shall be exchanged shall be $2,124,000 (collectively, the “Merger Consideration”).  At the Effective Time, all of the LLC Membership Units shall be converted, upon surrender of all Company Certificates held by the members as provided below, into a portion of the Merger Consideration as follows:

a. cash, by wire transfer to each of you, in the amount set forth opposite your respective names in the column entitled “Cash Consideration” on Schedule 1 attached hereto, and

b. a Subordinated Promissory Note in the form shown as Exhibit F, in the amount set forth opposite your respective names in the column entitled “Note” on Schedule 1 attached hereto (each, a “Payment Note” and together, the “Payment Notes”), and

c. such number of Common Shares, no par value, of Workstream (each such share of stock, an “Acquired Share” and, collectively, the “Acquired Shares”) issued in each of your respective names with a total value equal to the amount set forth opposite each of your respective names in the column entitled “Stock

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Consideration” on Schedule 1  attached hereto (each, the “Stock Consideration Amount”) and calculated in accordance with this letter agreement.

At the Effective Time, all such LLC Membership Units, when so converted, shall no longer be outstanding and automatically shall be deemed to be cancelled and retired and shall cease to exist, and each holder of any such LLC Membership Units shall cease to have any rights with respect thereto or to any Company Certificate except the right to receive the Merger Consideration therefor, without interest, upon the surrender of such Company Certificate in accordance with this letter agreement.

At the Effective Time, each issued and outstanding share of common stock, $.01 par value, of Merger Sub shall be converted into one LLC Membership Unit of the Surviving Company.

The number of Acquired Shares to be issued as part of the Merger Consideration shall be calculated by dividing the Stock Consideration Amount by the “Average Price” (as hereinafter defined).  “Average Price” means the weighted average closing price, to the fifth decimal place, of Workstream Common Shares as quoted on the OTC Bulletin Board(OTCBB) for the ten Trading Days ending on the tenth Trading Day preceding the date of this letter agreement.  A “Trading Day”, for purposes of this letter agreement, means a day on which OTCBB is open for at least one-half of its normal trading hours.  Notwithstanding the foregoing, for purposes of determining the number of Acquired Shares to be issued as part of the Merger Consideration, the Average Price of each Acquired Share shall not be less than $0.01600, even if the Average Price as calculated above is actually below $0.01600, nor more than $0.02000, even if the Average Price as calculated above is actually above $0.02000.

Each of you acknowledges and understands that the Acquired Shares will not be registered under the Securities Act of 1933 or under the securities laws of any state but instead Workstream will rely upon an exemption from registration under the Securities Act of 1933 and state securities laws.  As a result, the Acquired Shares are subject to substantial restrictions on transfer.  Each of you acknowledges and understands that the Acquired Shares must be held indefinitely unless subsequently registered under the Securities Act of 1933 and any applicable state securities or blue sky laws, or sold or otherwise transferred pursuant to exemptions from registration under the Securities Act of 1933 or such laws, and that Workstream has no obligation to register the Acquired Shares.  Each of you acknowledges and unde rstands and agrees that certificates representing the Acquired Shares will bear a legend substantially similar to the legend set forth below, in addition to any other legend that may be required by applicable law:

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE TRANSFERRED EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND APPLICABLE STATE SECURITIES LAWS, OR (B) IN A TRANSACTION WHICH IS

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EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND APPLICABLE STATE SECURITIES LAWS.

Each of you acknowledges that you have received and reviewed Workstream’s periodic, current and other reports filed with the Securities and Exchange Commission (the “Workstream Filings”), including but not limited to Workstream’s Annual Report on Form 10-K for the year ended May 31, 2010 (the “Form 10-K”) and the Quarterly Report on Form 10-Q for the quarter ended November 30, 2010, as well as the financial statements contained in such Workstream Filings.

Subject to the satisfaction of the terms and conditions of this letter agreement, this transaction will close on or prior to the close of business on January 18, 2011 or, if later, within five business days following the date on which all conditions to closing have been satisfied or waived; provided, however, that in the event this transaction has not closed on or prior to March 31, 2011, any party shall have the right, by delivery of written notice to the other parties, to terminate this letter agreement.  The obligation of Workstream to close the transactions contemplated by this letter agreement is subject to the following conditions:

1. With the exception of ordinary changes due to the normal operations of the business, the assets and liabilities of the Company, at the time of closing, shall be in all material respects the same as that shown on the December 31, 2010 (the “Balance Sheet Date”) unaudited balance sheet of the Company (a copy of which is attached to this letter agreement as Exhibit B) (the “Balance Sheet”); as of the closing date, no event or circumstance shall have occurred which would substantially and negatively affect the value of the Company or the membership interests or which would impair the value of Workstream’s rights under either Employment Agreement (as defined below) or either Non-Competition Agreement (as defined below);

2. Workstream shall have received a copy of the Articles of Organization and Operating Agreement of the Company, certified by each of you to be true, complete and accurate as of the closing date;

3. Such approvals or consents as may be necessary from all governmental entities and third parties to consummate the transactions contemplated under this letter agreement shall have been obtained;

4. All proceedings to be taken in connection with the transactions contemplated by this letter agreement and all documents incident hereto shall be satisfactory in form and substance to Workstream, and Workstream shall have received copies of all such documents and other evidences as it may reasonably request in order to establish the consummation of such transactions and the taking of all proceedings in connection therewith;

5. Each of you shall have executed and delivered to the Company an employment agreement, substantially in the form set forth hereto as Exhibit C (each such agreement, an “Employment Agreement” and, collectively, the “Employment Agreements”);

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6. Each of you shall have executed and delivered to Workstream the questionnaire set forth in the memo included in Exhibit D to this letter agreement (the “Investor Questionnaire”) and Workstream shall be satisfied in its sole discretion with the information set forth therein;

7. The Members of the Company shall have approved the Merger, this letter agreement and the other transactions contemplated hereby;

8. Each of you shall have executed and delivered to Workstream a non-competition agreement, substantially in the form attached as Exhibit E to this letter agreement (each such agreement, a “Non-Competition Agreement” and, collectively, the “Non-Competition Agreements”);

9. The representations and warranties each of you and the Company have made in this letter agreement shall be true and accurate in all material respects as of the closing date; and

10. All agreements to be performed or complied with by each of you and the Company on or prior to the closing date arising out of this Agreement shall have been performed or complied with in all material respects.

11. Each of you shall have delivered the Company Certificates to the Company.

12. No action, suit, proceeding or investigation by or before any governmental authority shall have been instituted or threatened, the effect of which could restrain, prohibit or invalidate the transactions contemplated by this letter agreement.

The obligation of each of you to close the transactions contemplated by this letter agreement is subject to the following conditions:

1. The Company shall have executed and delivered to each of you your respective Employment Agreements;

2. No stop order suspending the effectiveness of Workstream’s Common Shares shall have been issued by the SEC and no proceeding for that purpose shall have been initiated or threatened by the SEC;

3. The representations and warranties made by Workstream in this letter agreement shall be true and accurate in all material respects as of the closing date; and

4. All agreements to be performed or complied with by Workstream on or prior to the closing date arising out of this Agreement shall have been performed or complied with in all material respects.

By signing this letter agreement, the Company and each of you, jointly and severally, represent, warrant and agree as of the date of this letter agreement and as of the closing date, that:

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1. The Company is duly organized, validly existing and in good standing in the State of Arizona and is in good standing in each jurisdiction in which it conducts business; the Company has all requisite power and authority to own, lease and operate its properties and to carry on its business as now being conducted;

2. This letter agreement has been duly executed and delivered by each of you and constitutes the valid and binding agreement of each of you enforceable against each of you in accordance with its terms; as of the closing, each Non-Competition Agreement will be duly executed and delivered by Becker and Liu, respectively, and will constitute the valid and binding agreement of each Becker and Liu, respectively, enforceable against each of the foregoing, respectively, in accordance with its terms; the Members of the Company have approved this letter agreement, the Merger and the other transactions contemplated hereby; the board of managers of the Company has approved this letter agreement, the Merger and the other transactions contemplated hereby, and any and all other actions required to be taken by the Company, its Members and its board of managers to consummate the transactions contemplated hereby have been taken;

3. The Company has the requisite limited liability company power and authority to execute and deliver this letter agreement and to perform its obligations hereunder and to consummate the transactions contemplated hereunder; the execution, delivery and performance of this letter agreement by the Company has been duly authorized and approved by all necessary limited liability company action; this Agreement has been duly executed and delivered by the Company and constitutes the valid and binding agreement of the Company enforceable against the Company in accordance with its terms; the Company Certificates to be delivered to Workstream in connection with the Merger shall be free and clear of all liens, mortgages, encumbrances, security interests, voting agreements, exceptions or claims of any nature whatsoever; immediately prior to the Merger you will have good and marketable title to all of the LLC Membership Units, f ree and clear of all liens, mortgages, encumbrances, security interests, voting agreements, exceptions or claims of any nature whatsoever; the equity interests in the Company consist solely of the LLC Membership Units in the Company (the “LLC Membership Units”) owned by Becker and Liu, all of which have been duly authorized, validly issued, fully paid and nonassessable.

As of the date hereof and as of the closing, Becker owns 50% of the LLC Membership Units and Liu owns 50% of the LLC Membership Units, representing all of the issued and outstanding equity interests in the Company.  There are no outstanding agreements, subscriptions, commitments, options, warrants, calls or other rights to acquire from the Company, or other obligations or understandings or arrangements of the Company to issue, at any time, or upon the occurrence of any event, to any person or entity any interest in any membership interests or any other security of or rights in the Company, whether or not presently issued or outstanding, and there exists no rights of first refusal or any other preemptive right with respect to any membership interests or any other security of or interest in the Company.  The Com pany is not subject to any obligation (contingent or otherwise) to repurchase or otherwise retire or acquire any membership interests or any other security of or interest in the Company.  The Company has no subsidiaries;

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4. Attached as Exhibit B is the Balance Sheet and attached as Exhibit B-1 is (i) the related unaudited income statement for the twelve (12) month period ended December 31, 2010, (ii) the unaudited balance sheets for the fiscal years ended December 31, 2008 and December 31, 2009 and (iii) the related unaudited income statements for the fiscal years then ended (such balance sheets and income statements, together with Balance Sheet, collectively, the “Financial Statements”); each of the Financial Statements has been prepared from and is consistent with the books and records of the Company and fairly presents, in all material respects, the financial condition and income of the Company at such dates and for the period(s) covered thereby; since the Balance Sheet Date there have been no material chan ge in the assets or liabilities, or in the business or condition, financial or otherwise, or in the result of operations, of the Company; since the Balance Sheet Date the Company has not experienced a material adverse effect on its business, operations or financial condition;

5. There are no liabilities or obligations of the Company of any nature, whether fixed, contingent, accrued or otherwise, liquidated or unliquidated, and whether due or to become due, except (a) liabilities reflected or reserved against and disclosed in the Financial Statements and (b) liabilities which have arisen since December 31, 2010 in the ordinary course of business consistent in all material respects with past custom and practice of the Company; the Company has not guaranteed or is not otherwise primarily or secondarily liable in respect of any obligation or liability of any other person or entity, except to the extent disclosed in the Financial Statements;

6. The Company has good and marketable title to all of its owned assets (real and personal, tangible and intangible), including, without limitation, those assets set forth in the Balance Sheet and those assets acquired by the Company after the Balance Sheet Date, in each case subject to no lien, encumbrance, charge or other restriction of any kind or character; the Company owns no real property; each lease to which the Company is a party is in full force and effect and all rents due thereunder have been paid;

7. Except as set forth on Schedule 2, the Company is not bound by or a party to (a) any employment contract or consulting agreement, (b) any agreement or instrument containing restrictions on the payment of dividends or any other distribution with respect to its LLC Membership Units, (c) any loan or advance to, or investment in, any person or entity, or any commitment relating to the foregoing, (d) any agreement or commitment relating to a maximum possible liability or obligation on the part of the Company in excess of $5,000, (e) any guarantee or other contingent liability related to the indebtedness or obligation of any person or entity, (f) any management service or consulting agreement or arrangement, (g) any agreement or commitment limiting the ability of the Company to engage in any line of business or to compete with any pers on or entity, (h) any agreement or contract involving indebtedness of the Company or (i) any agreement or commitment not entered into in the ordinary course of business (each, a “Material Contract”);

8. Except as set forth on Schedule 3, each Material Contract to which the Company is a party is in full force and effect and, to the actual knowledge of the Company, there

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exists no (i) default or event of default by the Company or any other party to any such instrument, contract or other agreement or (ii) event, occurrence, condition or act (including the consum­mation of the transactions contemplated hereby) which, with the giving of notice, the lapse of time or the happening of any other event or condition, would become a default or event of default by the Company or any other party thereto; to your actual knowledge, the execution, delivery and performance of this letter agreement and the consummation of the transactions contemplated hereby will not (a) result in or give to any person or entity any right of termination, non-renewal, cancellation, withdrawal, acceleration or modification in or with respect to any Material Contract, (b) result in or give to any person or entity any additional rights or entitlement to increased, additional, accelerated or guaranteed payments under any Material Contract, (c) result in the creation or imposition of any encumbrance or lien upon any of the assets of the Company under the terms of any Material Contract, (d) result in or give rise to any action, claim or demand against the Company or (e) result in any restriction on the Company’s rights under any Material Contract;

9. Except as set forth on Schedule 4, between the Balance Sheet Date and the closing date, the Company has not (a) sold, transferred or otherwise disposed of any of its assets, other than in the ordinary course of business, (b) permitted any of its assets to be subjected to any mortgage, pledge, lien, security interest, encumbrance, restriction or charge of any kind, (c) made any capital expenditure or commitment therefor, (d) made or declared any distribution, dividend or similar payment to its Members, (e) increased indebtedness for borrowed money, (f) written-off as uncollectible any notes or accounts receivable without disclosure to purchaser, (g) increased the wages or salary of any employee or paid any bonuses or made any special payment to any employee, (h) cancelled or waived any claims or rights, (i) entered into any materi al transaction, (j) conducted its business other than in the ordinary course or (k) agreed, whether or not in writing, to do any of the foregoing;

10. Except as set forth on Schedule 5, there exists no inquiry, investigation, judicial or administrative claim, arbitration hearing or lawsuit, pending or threatened, against the Company or either of you or otherwise relating to either of you, the Company, or any LLC Membership Units;

11. The execution of this letter agreement, and the documents contemplated hereby, by each of you and the performance by each of you of your respective obligations hereunder and/or thereunder (a) do not require any filing with, or permit, consent or approval of, or the giving of any notice to, any governmental or regulatory body, agency or authority to which the Company or either of you is subject, other than the filing of the Certificate of Merger with the Arizona Corporation Commission of the State of Arizona, (b) do not violate any statute, ordinance, rule, regulation, order or decree of any court or any governmental or regulatory body, agency or authority applicable to the Company or either of you, (c) will not result in a breach of any contract, mortgage, indenture, agreement or understanding to which the Company or either of you is a party and (d) do not violate the Company’s Articles of Organization or Operating Agreement;

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12. The Company has all licenses and permits necessary to operate its business and is otherwise in compliance with, and to its actual knowledge, not in violation of, any applicable federal, state or local statutes, laws or regulations;

13. All property, sales, use, federal, state and local taxes, assessments and governmental charges of the Company that are required to be paid on or prior to the closing date have been paid and are not past due; you are not aware of any pending or threatened assessment with respect to such taxes; estimated accrued taxes have been fairly computed and are fairly reflected in the Financial Statements; each of you will have caused the Company to file the appropriate tax returns and reports with respect to the Company for any tax period ending on or prior to the closing date; the Company is and since October 1, 2010 has been classified as a corporation for federal and state income tax purposes; all tax returns required to be filed with any governmental authority by or on behalf of the Company have been timely filed in compliance with all applicable laws, and all such tax returns were true, correct and complete in all mat erial respects; the Company is not currently a beneficiary of any extension of time within which to file any tax return; all taxes owed by the Company (whether or not shown as due and payable on any tax return) have been timely paid to the appropriate taxing authority; no tax return of the Company with respect to any pre-closing tax period has ever been audited or is the subject of an audit by any taxing authority; there are no liens for taxes upon the assets or properties of the Company; neither the Company nor either of you has received notice of any claim by a governmental entity in a jurisdiction where the Company does not file tax returns that the Company is or may be subject to taxation by that governmental entity; the Company has withheld and remitted to the appropriate taxing authority all taxes required to have been withheld and remitted in connection with amounts paid or owing to any employee, independent contractor, creditor or other person;

14. No transfer, sales, stamp or other taxes will be imposed or levied on the Company by any governmental or taxing authority in connection with the Merger and the transactions contemplated hereby;

15. No officer, director, affiliate or employee of the Company either is or possesses, directly or indirectly, any financial interest in, or is a director, officer or employee of, any entity which is a client of, supplier to, customer of, lessor to, lessee of or competitor or potential competitor of the Company;

16. The operation and maintenance of the business of the Company requires no rights under patents, registered or unregistered trademarks, registered or unregistered, issued or pending, service marks, copyrights, trade secrets or proprietary information other than rights under patents, trademarks, service marks, copyrights, trade secrets, know-how, proprietary information, or other intellectual property owned by the Company and rights thereto granted for the benefit of the Company pursuant to license agreements (collectively, the “Intellectual Property”) that are in full force and effect; the rights of the Company in and to each item of Intellectual Property owned or licensed by the Company are free and clear of any liens, claims or encumbrances whatsoever; all of the Company’s rights in and to such Intellectual Property owned by the Company are freely

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assignable by it; the Company is under no obligation to pay any royalty, license fee or other similar consideration to any third party or to obtain any approval or consent for use of any of the Intellectual Property (except, in the case of licensed Intellectual Property, as set forth in the license therefor); the Company has made use of no rights under or with respect to any patents, trademarks, service marks, copyrights, trade secrets or proprietary information other than Intellectual Property owned by the Company and rights granted for the benefit of the Company under license agreements; no claim adverse to the Company’s interests in any Intellectual Property used in the Company’s business or the Company’s license agreements with respect thereto has been made in litigation or threatened or asserted; none of the Int ellectual Property owned by the Company is subject to any outstanding judgment, order, decree, or injunction issued by a court of competent jurisdiction; no complaint, action, suit, proceeding, or hearing, is pending or, to the knowledge of the Company, no charge, investigation, claim or demand, is threatened, which challenges the legality, validity, enforceability, or ownership of any of the Intellectual Property owned or currently used by the Company; neither of you has any knowledge of any substantial basis for any charge, claim, suit or action asserting any such infringement or asserting that the Company does not have the legal right to use any such Intellectual Property;

17. The Company does not maintain, sponsor, contribute to or have any liability under any agreement, plan, practice or program, whether written or oral, providing for bonus payments, child or dependent care benefits, death benefits, accidental death and dismemberment benefits, deferred compensation benefits, disability or other wage continuation benefits, educational assistance or tuition benefits, health benefits, paid holiday benefits, incentive compensation payments, leave of absence rights, medical expense payment or reimbursement benefits, retiree medical benefits, retiree life insurance benefits, profit sharing, pension or other retirement benefits, stock option, stock appreciation rights or stock purchase benefits or severance or termination benefits (including post-employment consulting arrangements), including without limitation any “employee benefit plan” (as such term is defined in Section 3(3 ) of the Employee Retirement Income Security Act of 1974, as amended), nor is the Company treated as a “single employer (within the meaning of Section 414(b) of the Internal Revenue Code of 1986, as amended) with respect to any such employee benefit plans; no present or former employee of the Company shall be entitled to any termination or severance payments, retirement pay or retirement benefits of any kind;

18. Each of you represents that as of the date hereof you are an “accredited investor” as such term is defined in Rule 501 promulgated under the Securities Act of 1933 and you are acquiring the Acquired Shares for investment and for your own account and not with a view to, or for resale in connection with, any distribution; the information provided by each of you on your respective Investor Questionnaire is true, complete and accurate in all respects;

19. All information regarding any of you, the Company or the LLC Membership Units provided or to be provided to Workstream is true, complete and accurate in all material respects and does not fail to state a fact which is or would be material in light of the circumstances in which such information is provided; and

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20. No person is or will be entitled to any brokers’ or finders’ fee or any other commission or similar fee, directly or indirectly, in connection with the transactions contemplated by this letter agreement.

By signing this letter agreement, Workstream represents, warrants and agrees as of the date of this letter agreement and as of the closing date, that:

A. Workstream is duly organized, validly existing and in good standing under the laws of Canada and is in good standing in each jurisdiction in which it conducts business; Workstream has all requisite power and authority to own, lease and operate its properties and to carry on its business as now being conducted; and

B. This letter agreement has been duly executed and delivered by Workstream and constitutes Workstream’s valid and binding agreement enforceable against Workstream in accordance with its terms.

C. The Acquired Shares to be issued as part of the Merger Consideration will be, when issued in accordance with the terms hereof, duly authorized and validly issued and not subject to preemptive rights.

D. Workstream has all licenses and permits necessary to operate its business and is otherwise in compliance with, and to its actual knowledge, not in violation of, any applicable federal, state or local statutes, laws or regulations.

E. As of their respective filing dates, the Workstream Filings complied in all material respects with the requirements of the Securities Act of 1933 and the Exchange Act of 1934 applicable to such Workstream Filings.

Following the closing, Workstream will prepare and file, or cause to be prepared and filed, all income tax returns covering periods ending on or before the closing date that are due after the Effective Time, including the Final Separate Returns (collectively, the “Preacquisition Returns”). If any Preacquisition Return shows a balance due, neither Workstream nor the Company shall be responsible for such tax.  Each of you acknowledges and agrees, jointly and severally, that such tax shall be your responsibility and each of you agree, jointly and severally, to indemnify and hold Workstream and the Company harmless for any such taxes.   Each of you further agrees, jointly and severally, to pay, and agree, jointly and severally, to indemnify and hold Workstream and its affiliates, including the Company, harmless for all taxes for tax periods ending on or prior to the closing date and, with respect to tax periods beginning prior to the closing date and ending after the closing date, for taxes that would be due had such period ended on the closing date.

Until such time as this letter agreement may be terminated, each of Workstream and each of you shall reasonably cooperate and use our respective commercially reasonable best efforts to take, or cause to be taken, all appropriate action to consummate and make effective the transactions contemplated by this letter agreement, and following the closing, each of you agree to reasonably cooperate to effect the transactions contemplated hereby.

All representations and warranties made herein shall survive the closing for a period of sixteen (16) months, except that the representations and warranties set forth in Section 1, 2, 3, 13 and 18

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under the Company’s and your representations and warranties shall survive forever; provided, however, that (a) any representation or warranty as to which a claim shall have been asserted prior to the expiration of such representation or warranty shall continue in effect with respect to such claim until such claim shall have been finally resolved or settled, and (b) any representation or warranty contained in this letter agreement made by any party or any information furnished by any party that was made by such party fraudulently or in bad faith shall indefinitely survive the closing.

Each of you hereby agree, jointly and severally, to indemnify, defend and hold harmless Workstream and its affiliates and their respective employees, officers, directors, shareholders, agents and any successors thereto from any and all losses, claims, liabilities or expenses (including reasonable attorneys’ fees) (“Losses”) resulting from (a) a breach of the representations and warranties made by either of you in this letter agreement; (b) any breach or non-fulfillment of any covenant or agreement to be performed by the Company or either of you under this letter agreement; (c) all pre-closing taxes owing by the Company or either of you or any taxes owing by the Company or either of you as a result of the consummation of the Merger; provided, however that the total maximum aggregate liability that you shall be responsi ble for shall be $500,000; provided, however, that with respect to Losses arising out of a claim for fraud or for breach of the representations and warranties contained in Sections 1, 2, 3, 13 and 18 under the Company’s and your representations and warranties, the aggregate liability for indemnification shall be unlimited; provided further, that no indemnification shall be available to Workstream unless and until the amount of such indemnity exceeds $10,000, in which case you shall be responsible for all amounts back to the first dollar; provided further that in the event that indemnification is required hereunder, Workstream shall first offset any Losses against any amounts outstanding under the Payment Notes.

Workstream hereby agrees to indemnify, defend and hold you harmless from any and all Losses resulting from the breach of any representation or warranty made by Workstream in this letter agreement.

Neither the Company nor either of you shall publicly disclose (including but not limited to by means of issuing a press release) or otherwise make any public statement with respect to the transactions contemplated hereby.  Workstream shall be permitted to issue one or more such press releases or make such public statement as it determines in its sole discretion, without prior consultation with either of you or the Company.

This letter agreement is made subject to our due diligence review and audit of the books and records of the Company and any documents relating to the Company or the Stock.  So that Workstream may complete a financial audit and due diligence examination of the Company, prior to the closing date you will make available, and cause the Company to make available, to Workstream for inspection the books and records of the Company.  If Workstream is not satisfied with its due diligence review and audit, Workstream may, in its sole discretion, terminate this letter agreement and, in the event of such termination, Workstream shall be released from its obligation to acquire the LLC Membership Units and to consummate any other transaction contem plated hereby.

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Whether or not the Merger is consummated, all costs and expenses incurred in connection with this letter agreement and the Merger and the transactions contemplated by this letter agreement shall be paid by the party incurring such expense.

In the event the transactions contemplated by this letter agreement are not consummated, Workstream and its officers, agents, employees or representatives shall maintain the confidentiality of all financial and other information provided under this letter agreement and will either destroy or return to you all information provided to it, together with any analyses or reports with respect thereto and copies of any of the foregoing.

Each party to this letter agreement acknowledges and agrees that he or it has been represented by counsel in the preparation of this letter agreement and that this letter agreement is the result of negotiations among the parties.  Accordingly, this letter agreement shall not be construed against any party merely because of such party’s involvement in its preparation.

This letter agreement and the other documents referred to herein which form a part hereof, contain the entire understanding of the parties hereto with respect to the subject matter contained herein and therein.  This letter agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter.  This letter agreement may not be amended or modified orally, but only by an agreement in writing signed by each of the parties. The parties acknowledge and agree that there are no, and there shall not be any, oral agreements between or among any of the parties and that for any agreement to be binding such agreement must be in a writing executed by each party.

In the event any provision in this letter agree­ment shall be held invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining pro­visions hereof will not in any way be affected or im­paired thereby.

While this letter agreement is somewhat informal, our signatures below indicate our mutual agreement to the terms herein.  In the unlikely event that any part of this agreement is the subject of litigation, the prevailing party shall be entitled to receive attorneys’ fees and reasonable expenses from the other.  This agreement may be signed in one or more counterparts, each of which will be deemed to be an original, which together will constitute one and the same instrument.

This agreement will be governed by the laws of the State of Arizona.

[INTENTIONALLY LEFT BLANK]

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I have enjoyed working with you and we look forward to continuing to work with you and the fine people at Incentives Advisors.

Very truly yours,

/s/ John Long

John Long, CEO

Workstream Inc.

Agreed and accepted all as of the day and year first above written:

Incentives Advisors, LLC

By: /s/ Bill Becker                                            

Name: Bill Becker

Title: Chief Executive Officer

/s/ Bill Becker                                                  

Bill Becker

/s/ Shaung Lin                                                  

Shaung Liu

[SIGNATURES CONTINUE]

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 Spousal Consent

The undersigned acknowledges on her own behalf that she (a) is the spouse of  Shaung Liu (“Liu”), (b) has read the letter agreement dated as of  January 18, 2011 (the “Letter Agreement”) to which Workstream Inc. (“Workstream”) and Liu are parties and knows and understands its contents, (c) is aware that by its provisions her spouse agrees to cause the merger of Incentives Advisors LLC (“IA”) with and into a wholly-owned subsidiary of Workstream and thereby cause  IA to become a wholly-owned subsidiary of Workstream and (d) consents to such merger, approves of and agrees to be bound by the provisions of the Letter Agreement and agrees that her interest in IA, including, without limitation, any community property interest or quasi-community property interest, are subject to the provisions of the Letter Agreement and that she will take no action at any time to hinder operation of the Letter Agreement.  If the undersigned predeceases herspouse when her spouse owns the membership interest of IA entitled to vote on the merger, the undersignedhereby agrees not to devise or bequeath whatever interest, including, without limitation, any community property interest or quasi-community property interest, shemay have in such membership interest, in contravention of the Letter Agreement.

/s/ Jana Liu                                  

Spouse of Shaung Liu

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SCHEDULE 1

LLC Membership Unit Holder	Stock Consideration	Cash Consideration	Note
Bill Becker (50%)	$867,500	$77,000	$117,500
Shaung Liu (50%)	$867,500	$77,000	$117,500

Schedule 1

EXHIBIT D

ACCREDITED INVESTOR QUESTIONNAIRE

Subscriber should initial all of the following statements that are true.  Subscriber hereby represents and warrants that Subscriber’s responses to this questionnaire are true and correct.

	INITIALS
(i) Subscriber certifies that Subscriber has a net worth (jointly with Subscriber’s spouse, if any) in excess of $1,000,000, excluding the value of Subscriber’s primary residence.	_______
(ii)        Subscriber certifies that Subscriber had individual income for each of the years 2009 and 2010 in excess of $200,000 and has a reasonable expectation of reaching the same income level in 2011.	_______
(iii)        Subscriber certifies that he or she and his or her spouse had a joint income for each of the years 2009 and 2010 in excess of $300,000 and has a reasonable expectation of reaching the same income level in 2011.	_______
(iv)        If Subscriber is an entity, it certifies that all of the equity owners satisfy the standards set forth in (i), (ii) or (iii) above or that it has assets in excess of $5,000,000 and was not formed for the specific purpose of acquiring the Shares.	_______
(v)        If Subscriber is a trust, it certifies that it has total assets in excess of $5,000,000, that its investment in the Shares is being directed by a person having such knowledge and experience in financial and business matters as to evaluate the merits and risks of such an investment, and that it was not formed for the specific purpose of acquiring the Shares.	_______
(vi)        If Subscriber is an employee benefit plan within the meaning of Title I of the Employee Retirement Income Security Act of 1974, it certifies that it has total assets in excess of $5,000,000 or that the decision to invest in the Shares is being made by a plan fiduciary which is a bank, savings and loan association, insurance company or registered investment adviser.	_______
(vii)        None of the standards set forth in (i), (ii), (iii) or (iv) above apply.	_______

[Signature page to Investor Questionnaire follows—PLEASE SIGN BELOW]

State of Primary Residence/Formation/Incorporation:  

D-1

Signature of Subscriber (if an Individual)	Name of Subscriber (if an Entity)
Printed: ____________________________	By: _________________________
	Name:
Dated: _____________________________	Title:

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EX-10.2

Exhibit 10.2

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR APPLICABLE STATE SECURITIES LAWS. THIS NOTE MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THIS NOTE UNDER THE SECURITIES ACT OR PURSUANT TO AN EXEMPTION THEREFROM.

SUBORDINATED PROMISSORY NOTE

US $117,500.00	Maitland, Florida
	January 18, 2011

WORKSTREAM, INC., a corporation organized and existing under the laws of Canada (the “Payor”), hereby promises to pay to the order of _________ (the “Payee”), in lawful money of the United States of America, by check to the address of Payee set forth below or such bank account as Payee shall advise Payor in writing, on or before August 1, 2013 (the “Final Maturity Date”) One Hundred Seventeen Thousand Five Hundred Dollars (US $117,500) together with interest thereon at the rate of five percent (5%) per annum based on a 365/366 day year and actual days elapsed, accruing from February 1, 2011 and pay able as follows:

(a) Thirty (30) equal monthly installments beginning on March 1, 2011, of principal, together with interest accruing on the then outstanding unpaid principal balance at a rate of five percent (5%) per annum based on a 365/366 day year and actual days elapsed until all amounts payable hereunder have been paid in full.

This Note is delivered by the Payor in accordance with that certain Letter Agreement dated as of January 18, 2011 (the “Purchase Agreement”), between Payor and Payee and certain other parties.  Capitalized terms used and not otherwise defined herein have the respective meanings assigned thereto in the Purchase Agreement.  If and to the extent that Payor is entitled to indemnification under the Purchase Agreement, Payor shall be entitled to offset against the principal amount of the Note and/or interest payments owing thereon, dollar for dollar, for amounts due to Payor, subject in all respects to the terms and conditions set forth in the Purchase Agreement.  This Note may not be ass igned or otherwise transferred by Payee without the prior written consent of Payor, such consent not to be unreasonably withheld; provided, however, that the Payor’s lender consents to such assignment.

This Note may be voluntarily prepaid, in whole or in part, by the Payor prior to the Maturity Date, without premium or penalty.  Any prepayment of less than all of the outstanding amounts due hereunder shall be applied first to accrued and unpaid interest and second to unpaid principal due hereunder.  A prepayment of less than all of the outstanding amounts due hereunder shall not relieve the Company of its obligation to make scheduled principal and interest payments on the Note when due.

An “Event of Default” shall be deemed to occur if (a) Payor fails to pay when due any principal or interest due hereunder or within ten (10) business days thereafter; or (b) Payor fails to observe or perform any obligation, covenant or agreement under this Note; provided that, except for the default described in subsection (a) above, Payor shall first be given written notice thereof and ten (10) business days to cure such failure.

Upon the occurrence of an Event of Default hereunder which is continuing and subject to the terms of the Subordination Agreement(s) described below, Payee may, at its option, (i) by written notice to Payor, declare the entire unpaid principal balance of this Note, together with all accrued and unpaid interest thereon, immediately due and payable, and (ii) exercise any and all rights and remedies available to it under applicable law, including, without limitation, the right to collect from Payor all sums due under this Note.  In the event of a dispute concerning this Note, the prevailing party shall be entitled to all reasonable costs and expenses incurred by or on behalf of the prevailing party, including, without limitation, reasonable attorneys’ fees.

Payor shall notify Payee in writing within five (5) days after the occurrence of any Event of Default of which Payor acquires knowledge.

No waiver by Payee of any right or remedy under this Note shall be effective unless in writing signed by Payee.  Neither the failure nor any delay in exercising any right, power or privilege under this Note will operate as a waiver of such right, power or privilege and no single or partial exercise of any such right, power or privilege by Payee will preclude any other or further exercise of such right, power or privilege or the exercise of any other right, power or privilege.  To the maximum extent permitted by applicable law, (a) no claim or right of Payee arising out of this Note can be discharged by Payee, in whole or in part, by a waiver or renunciation of the claim or right unless in a writing, signed by Payee; (b) no waiver that may be given by Payee will be app licable except in the specific instance for which it is given; and (c) no notice or demand on Payor will be deemed to be a waiver of any obligation of Payor or of the right of Payee to take further action without notice or demand as provided in this Note.  Payor hereby waives presentment, demand, protest and notice of dishonor and protest.

If any provision in this Note is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Note will remain in full force and effect.  Any provision of this Note held invalid or unenforceable only in part or degree will remain in full force and effect to the extent not held invalid or unenforceable.

Payee hereby agrees that the indebtedness represented by this Note will be subordinate to the indebtedness of Payor held by Coghill Capital Partners or any affiliate thereof and any bank lender.  Payee further agrees that, following the date hereof, he will enter into one or more Subordination Agreements with such other creditors of Payor as such creditors may reasonably request from time to time.

This Note shall bind Payor and its successors and assigns.

Any notice herein required or permitted to be given shall be in writing and shall be deemed effectively given:  (a) upon personal delivery to the party notified; (b) five (5) business days after having been sent by registered or certified mail, return receipt requested, postage prepaid; (c) one (1) business day after deposit with a nationally recognized overnight courier specifying next day delivery; or (d) upon transmission, if sent by facsimile with confirmation of receipt during normal business hours for the recipient or on the next business day if sent after normal business hours for the recipient.  All communications shall be sent as follows (or to such other address as Payor or Payee may designate in a notice delivered in accordance with this provision):

If to Payor:	Workstream Inc.
	485 N. Keller Road, Suite 500
	Maitland, FL  32751
	Attention:  Chief Executive Officer
	Facsimile: _____________

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If to Payee:	__________________
	__________________
	__________________
	Facsimile: _____________

This Note may not be modified or amended other than by an agreement in writing signed by Payor and Payee.

THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF FLORIDA.

WORKSTREAM INC.

By: ________________________

Name: John Long

Title:  Chief Executive Officer

Acknowledged and agreed:

__________________________________

[Payee name]

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EX-10.3

Exhibit 10.3

NONCOMPETITION AGREEMENT

This NONCOMPETITION AGREEMENT (this “Agreement”) is made as of the 18th day of January, 2011 between Workstream Inc., a Canadian corporation (“Workstream”), Incentives Advisors, LLC, an Arizona limited liability company and wholly-owned subsidiary of Workstream (the “Company”), and _____________, an individual residing in the State of Arizona (“Seller”).

W I T N E S S E T H

WHEREAS, Workstream, Seller and the other party thereto have entered into that certain letter agreement, dated January 18, 2011 (the “Purchase Agreement”), pursuant to which Workstream has acquired 100% of the outstanding Membership Units of the Company; and

WHEREAS, as a condition precedent to the consummation of the transactions contemplated by the Purchase Agreement, Workstream and Seller (each, a “Party” and collectively, the “Parties”) shall have entered into this Agreement.

NOW, THEREFORE, in consideration of the foregoing and the mutual promises, covenants and agreements contained herein, the Parties, intending to be legally bound, agree as follows:

SECTION 1.

DEFINED TERMS; CONSTRUCTION

1.1        Defined Terms.  As used in this Agreement the following terms shall have the following meanings:

“Affiliate” means, with respect to a Person, any other Person, directly or indirectly, through one or more intermediaries, controlling, controlled by, or under common control with such Person.  The term “control”, as used in the immediately preceding sentence, shall mean with respect to a corporation or a limited liability company the right to exercise, directly or indirectly, more than 50% of the voting rights attributable to the controlled corporation or limited liability company, and, with respect to any partnership, trust, or other entity or association, the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of the controlled entity.

“Agreement” has the meaning provided in the introductory paragraph.

“Business” means the business conducted by Workstream, the Company or any Relevant Company as of the date of this Agreement. With regard to the Arizona tax credit division, this includes hiring tax credit and training grant programs.

“Company” has the meaning provided in the introductory paragraph.

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“Employment Agreement” means that certain Employment Agreement between the Company and Seller dated the date hereof.

“Person” means and includes natural persons, corporations, limited liability partnerships, general partnerships, limited liability companies, joint stock companies, joint ventures, associations, companies, trusts, banks, trust companies, land trusts, business trusts or other organizations, whether or not legal entities, and governments and agencies and political subdivisions thereof.

“Purchase Agreement” has the meaning provided in the first WHEREAS paragraph.

“Relevant Company” means any Affiliate of Workstream or the Company that engages in a business that is similar to the Business.

“Seller” has the meaning provided in the introductory paragraph.

“Territory” means the State of Arizona and each other jurisdiction or marketing area in which Workstream, the Company or any Relevant Company or any of their successors or assigns has contracted to do business, is doing business, is qualified to do business, or has contracted to acquire or merge with any other Person engaged in substantially the same business as the Business.

“Workstream” has the meaning provided in the introductory paragraph.

1.2        Construction. The following rules shall apply to the construction of this Agreement unless the context requires otherwise:  (a) the singular includes the plural, and the plural the singular; (b) words importing any gender include the other gender and the neuter; (c) references to statutes are to be construed as including all statutory provisions consolidating, and all regulations promulgated pursuant to, such statutes; (d) references to “writing” include printing, photocopy, typing and other means of reproducing words in a tangible visible form; (e) the words “including”, “includes” an d “include” shall be deemed to be followed by the words “without limitation”; (f) references to the introductory paragraph, recitals, sections (or clauses or subdivisions of sections) or schedules are to those of this Agreement unless otherwise indicated; (g) references to agreements and other contractual instruments shall be deemed to include all subsequent amendments and other modifications to such instruments, but only to the extent that such amendments and other modifications are permitted or not prohibited by the terms of this Agreement; (h) section headings in this Agreement are included herein for convenience of reference only and shall not constitute a part of this Agreement for any other purpose; and (i) references to Persons include their respective permitted successors and assigns.

SECTION 2.

NONCOMPETITION

2.1        Agreement Not to Compete.  In consideration of Workstream consummating the transactions contemplated by the Purchase Agreement, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Seller agrees that for a period of eighteen (18) months following the date hereof, the Seller will not:

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(a)        within the Territory directly or indirectly own, manage, operate, control, consult with, be employed by or participate in the ownership, management, operation or control of, or be connected in any manner with, any business that (i) competes with the Business, or (ii) is engaged in substantially the same business as the Business or (iii) provides similar or comparable services as those provided by Workstream, the Company or any Relevant Company to the past or present clients and customers of such Person. Notwithstanding the foregoing, the restrictions provided under this Section 2.1(a) with respect only to the Arizona tax credits portion of the business shall continue for a period of six (6) months following the date h ereof and not the eighteen (18) months otherwise provided for hereunder.  For the purposes of this clause (a), ownership of securities of a publicly-held corporation in which Seller does not  possess beneficial ownership of more than five (5%) percent of the voting capital stock of such corporation or participate in any management or advisory capacity shall not be prohibited; or

(b)        employ, solicit for employment or otherwise contract for the services of any employee of Workstream, the Company or any Relevant Company during the effectiveness of this Agreement; or

(c)        in any way interfere with relationship of Workstream, the Company or any Relevant Company with any customer, vendor, supplier or other professional or business relation of Workstream, the Company or any Relevant Company.

2.2        Enforceability.  It is the desire and intent of the Parties that the provisions of this Agreement shall be enforced to the fullest extent permissible under the laws and public policies applied in each jurisdiction in which enforcement is sought.  If at the time of enforcement of any of the agreements contained in this Section 2 a court shall hold that the duration, scope or area or restrictions stated therein are unreasonable under the circumstances then existing, it is agreed that the maximum duration, scope or area reasonable under such circumstances shall be substituted for the stated duration, scope or area.

SECTION 3.

REPRESENTATIONS AND WARRANTIES

3.1        Representations and Warranties of Seller.  Seller represents and warrants that:

(a)        he has the legal capacity and full right to enter into this Agreement and to perform his obligations hereunder;

(b)        this Agreement constitutes the valid and legally binding obligation of Seller, enforceable in accordance with its terms except as may be limited by applicable bankruptcy, insolvency, reorganization, arrangement, moratorium or other similar laws, and subject to general equity principles and to limitations on availability of equitable relief, including specific performance;

(c)        neither the execution and the delivery of this Agreement, nor the consummation of the transactions contemplated hereby by Seller, will (i) violate any constitution, statute, regulation, rule, injunction, judgment, order, decree, ruling, charge, or other restriction of any government, governmental agency or court to which Seller is

3

subject or (ii) conflict with, result in a breach of, constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify, or cancel, or require any notice under any material agreement, contract, lease, license, instrument or other material arrangement to which Seller is a party or by which Seller is bound or to which any of Seller’s material assets is subject (or result in the imposition of any lien, security interest or other encumbrance upon any of Seller’s assets); and

(d)        Seller need not give any notice to, make any filing with, or obtain any authorization, consent, or approval of any Person in order to consummate the transactions contemplated by the Agreement.

3.2        Representations and Warranties of Workstream.  Workstream represents and warrants that:

(a)        it has the power and authority to enter into the Agreement and to perform its obligations hereunder;

(b)        this Agreement constitutes its valid and legally binding obligation, enforceable in accordance with its terms except as may be limited by applicable bankruptcy, insolvency, reorganization, arrangement, moratorium or other similar laws, and subject to general equity principles and to limitations on availability of equitable relief, including specific performance;

(c)        neither the execution and the delivery of this Agreement, nor the consummation of the transactions contemplated hereby by it, will (i) violate any constitution, statute, regulation, rule, injunction, judgment, order, decree, ruling, charge, or other restriction of any government, governmental agency, or court to which it is subject or any provision of its organizational documents or (ii) conflict with, result in a breach of, constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify, or cancel, or require any notice under any material agreement, contract, lease, license, instrument or other material arrangement to which it is a party or by which it is bound or to which any of its material assets is subject (or result in the imposition of any lien, security interest or other encumbrance upon any of its assets); and

(d)        it need not give any notice to, make any filing with, or obtain any authorization, consent, or approval of any Person in order to consummate the transactions contemplated by the Agreement.

SECTION 4.

MISCELLANEOUS

4.1        No Third-Party Beneficiaries.  This Agreement shall not confer any rights or remedies upon any Person other than the Parties and their respective successors and permitted transferees and assigns.

4.2        Entire Agreement.  This Agreement (including the documents referred to herein), the Purchase Agreement (including the documents referred to therein) and the Employment

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Agreement (which is a separate and distinct agreement between the Company and Seller enforceable in accordance with its own terms and which shall not be affected by the existence or terms of this Agreement) constitute the entire agreement among the Parties and supersedes any prior understandings, agreements, or representations by or among the Parties, written or oral, to the extent they relate in any way to the subject matter hereof.

4.3        Remedies.  Seller hereby acknowledges and agrees that: (a) the rights, obligations and duties of Seller under this Agreement are necessary for the protection of the legitimate business interests of Workstream and the Company at the times set forth herein; (b) the agreements of the Parties set forth in this Agreement are an integral part of the Purchase Agreement, without which transactions contemplated in and by the Purchase Agreement would not close; (c) the scope of the obligations set forth in this Agreement is reasonable in time, geography and types and limitations of activities restricted; and (d) the breach of this Agreement will be such t hat the party harmed by such breach will not have an adequate remedy at law.  The Parties recognize that the performance of the obligations under this Agreement by Seller is special, unique and extraordinary in character, and that in the event of the breach by Seller of the terms and conditions of this Agreement to be per­formed by him, Workstream and/or the Company shall be entitled, if it so elects, to institute and prose­cute proceedings in any court of competent jurisdiction, either in law or in equity, to obtain damages for any breach of this Agreement, or to enforce the specific performance thereof by Seller or to enjoin Seller from performing services for any other Person.

4.4        Succession and Assignment.  This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted transferees and assigns.  Seller may not assign either this Agreement or any of its rights, interests, or obligations hereunder without the prior written approval of Workstream or the Company.

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

4.6        Notices.  Any notice or other communication required or permitted under this Agreement shall be sufficiently given if delivered in person or sent by facsimile or by registered or certified mail, postage prepaid, addressed as follows:

(a) if to Workstream, to:

Workstream Inc.

485 N. Keller Road, Suite 500

Maitland, FL  32751

Attention: Chief Operating Officer

Facsimile: ____________________

(b) if to Seller, to:

__________________

__________________

__________________

Facsimile: _____________________

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or such other address or number as shall be furnished in writing by any such Party, and such notice or communication shall be deemed to have been given as of the date so delivered, sent by facsimile or two business days after it is mailed.

4.7        Governing Law.  THE INTERPRETATION AND CONSTRUCTION OF THIS AGREEMENT, AND ALL MATTERS RELATING HERETO, SHALL BE GOVERNED BY THE LAWS OF THE STATE OF ARIZONA (EXCLUSIVE OF CONFLICTS OF LAWS PRINCIPLES) APPLICABLE TO AGREEMENTS EXECUTED AND TO BE PERFORMED SOLELY WITHIN SUCH STATE.

4.8        Jurisdiction.  Any judicial proceeding brought against any of the Parties on any dispute arising out of this Agreement or any matter related hereto may be brought in the courts of the State of Arizona, and, by execution and delivery of this Agreement, each of the Parties accepts the exclusive jurisdiction of such courts, and irrevocably agrees to be bound by any judgment rendered thereby in connection with this Agreement.  The prevailing party in any such litigation shall be entitled to receive from the losing party all costs and expenses, including reasonable counsel fees, incurred by the prevailing party.

4.9        Amendments and Waivers.  No amendment of any provision of this Agreement shall be valid unless the same shall be in writing and signed by all of the Parties.  No waiver by any Party of any default, misrepresentation, or breach of warranty or covenant hereunder, whether intentional or not, shall be deemed to extend to any prior or subsequent default, misrepresentation, or breach of warranty or covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent such occurrence.

4.10      Severability.  Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction.

4.11      Expenses.  Each of the Parties will bear its own costs and expenses (including legal fees and expenses) incurred in connection with this Agreement and the transactions contemplated hereby.

[Signature page follows]

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IN WITNESS WHEREOF the Parties have executed this Noncompetition Agreement on and as of the date first above written.

WORKSTREAM  INC.

By: __________________________

Name:

Title:

INCENTIVES ADVISORS, LLC

By: __________________________

Name:

Title:

______________________________

[_____________]

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EX-10.4

Exhibit 10.4

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (this “Agreement”) dated as of January 18, 2011 (the “Effective Date”) by and between Incentives Advisors, LLC, an Arizona limited liability company (“Employer”), and _____________, an individual residing in the State of Arizona (“Employee”).

W I T N E S S E T H:

WHEREAS, Employer wishes to provide for the employment by Employer of Employee, and Employee wishes to serve Employer, in the capacities and on the terms and conditions set forth in this Agreement.

NOW THEREFORE, in consideration of the above recital and of the mutual promises and conditions in this Agreement, it is agreed as follows:

1. TERM OF EMPLOYMENT

The employment hereunder shall be for a period commencing on the date hereof and ending on the third anniversary of the date hereof, unless earlier terminated as provided in Section 9 below (the “Employment Term”).

2. PLACE OF EMPLOYMENT

Unless the parties agree otherwise in writing, during the Employment Term, Employee shall perform the services he is required to perform under this Agreement at such address in the State of Arizona as Employer may designate in writing from time to time.

3. DUTIES AND AUTHORITY

Employee shall serve as Employer’s Senior Vice President, Tax Credit and Incentive Services, subject to the directions and policies from time to time of John Long and David Kennedy, or their respective successors or other designees, and senior officers of Employer and Employer’s parent company, Workstream Inc. (“Workstream”), whether stated orally or in writing.  In this capacity, Employee shall perform the duties and have the responsibilities customarily performed and held by such an employee.

4. EXCLUSIVITY

During the Employment Term, Employee shall devote his full business and professional time, energy and ability to the business and interests of Employer, Workstream and subsidiaries of Workstream (collectively, the “Related Companies”), and the performance of this Agreement, and shall not, without Employer’s prior written consent, render to others services of any kind for compensation, or engage in any other business activity that would interfere with the performance of his duties under this Agreement.

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Employee hereby represents and warrants that he has the legal capacity to execute and perform this Agreement, that this Agreement is a valid and binding agreement enforceable against him according to its terms, and that the execution and performance of this Agreement by him does not violate the terms of any existing agreement or understanding, written or oral, to which Employee is a party or any judgment or decree to which Employee is subject.  In addition, Employee represents and warrants that he knows of no reason why he is not physically or legally capable of performing his obligations under this Agreement in accordance with its terms.

5. NON-COMPETITION AND NON-SOLICITATION

(a)        Noncompetition.  During the term of this Agreement and for the eighteen (18) month period immediately following the effective date of the termination of this Agreement if it is terminated by Employee for any reason or by the Employer for “Cause” or “disability” (such period is referred to herein as the "Restricted Period"), Employee shall not, directly or indirectly, own, manage, control, participate in, consult with, render services for, or in any manner engage in any business which competes anywhere in the United States or Canada (the “Territory”) w ith any of the businesses of the Employer or any of the Related Companies as of the date of this Agreement; provided, however, if such termination occurs on or prior to the second anniversary of the date hereof, then with respect only to the Arizona tax credits portion of the business, the Restricted Period with respect thereto shall be for a period of six (6) months following the effective date of such termination; and provided further that, if such termination occurs following the second anniversary of the date hereof, then with respect only to the Arizona tax credits portion of the business, the Restricted Period with respect thereto shall be for a period of three (3) months following the effective date of such termination.  Nothing herein shall prohibit Employee from being a passive owner of not more than 2% of the outstanding stock of any class of a corporation that is publicly traded, so long as Employee has no active participation in the business of such corporation.

(b)        Non-solicitation.  During the Restricted Period, Employee shall not directly or indirectly through another entity (i) induce or attempt to induce any employee of the Employer or any Related Company to leave the employ of the Employer or such Related Company, or in any way interfere with the relationship between the Employer or any Related Company and any employee thereof, (ii) hire any employee of the Employer or any Related Company or hire any former employee of the Employer or any Related Company within one year after such person ceased to be an employee of the Employer or any Related Company, or (iii) induce or attempt to induce any customer, supplier, licensee or other business relation of the Employer or any Related Company to cease doing business with the Employer or such Related Company or in any way interfere with the relationship between any such customer, supplier, licensee or business relation and the Employer or any such Related Company.

(c)        Enforcement.  If, at the time of enforcement of this Section 5, a court holds that the restrictions stated herein are unreasonable under circumstances then existing, the parties hereto agree that the maximum duration, scope or geographical area reasonable under such circumstances shall be substituted for the stated period, scope or area and that the court shall be allowed to revise the restrictions contained herein to cover the maximum duration, scope and area permitted by law.  Because Employee's services are unique and because Employee has access to confidential information, the parties hereto agree that money damages would be an

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inadequate remedy for any breach of this Agreement.  Therefore, in the event a breach or threatened breach of this Agreement, the Employer, its Related Companies and/or their respective successors or assigns may, in addition to other rights and remedies existing in their favor, apply to any court of competent jurisdiction for specific performance and/or injunctive or other relief in order to enforce, or prevent any violations of, the provisions hereof (without posting a bond or other security).

(d)        Additional Acknowledgments.  Employee acknowledges that the provisions of this Section 5 are in consideration of: (i) employment with the Employer, and  (ii) additional good and valuable consideration as set forth in this Agreement.  In addition, Executive agrees and acknowledges that the restrictions contained in this Agreement do not preclude Employee from earning a livelihood, nor do they unreasonably impose limitations on Employee's ability to earn a living.  In addition, Employee acknowledges that (x) the business of the Employer and its Related Companies w ill be conducted throughout the Territory and other jurisdictions where the Employer or any of its Related Companies conduct business during the term of employment, (y) notwithstanding the state of organization or principal office of the Employer or any of its Related Companies, or any of their respective executives or employees (including the Employee), it is expected that the Employer and its Related Companies will have business activities and have valuable business relationships within its industry throughout the Territory and other jurisdictions where the Employer or any of its Related Companies conduct business during the term of employment, and (z) as part of his responsibilities, Employee will be traveling throughout the Territory and other jurisdictions where the Employer or any of its Related Companies conduct business during the term of employment in furtherance of Employer's business and its relationships.  Employee agrees and acknowledges that the potential harm to the Employer and its Relat ed Companies of the non-enforcement of any provision of Section 5 outweighs any potential harm to Employee of its enforcement by injunction or otherwise.  Employee acknowledges that he has carefully read this Agreement and consulted with legal counsel of his choosing regarding its contents, has given careful consideration to the restraints imposed upon Employee by this Agreement and is in full accord as to their necessity for the reasonable and proper protection of confidential and proprietary information of the Employer and its Related Companies now existing or to be developed in the future.  Employee expressly acknowledges and agrees that each and every restraint imposed by this Agreement is reasonable with respect to subject matter, time period and geographical area.

6. COMPENSATION AND BENEFITS

(a)        Salary.  During the Employment Term, Employer shall pay Employee a base salary in the annual amount of $145,000 (the “Salary”).  The Salary shall be payable as current salary with such frequency as is standard for similarly situated employees of Employer.  The Salary shall be prorated for any partial pay period that occurs during the term of this Agreement in accordance with Employer’s standard payroll policies applied to similarly situated employees of Employer.  The Employer shall review the Salary at least annually to determine, in its sole discretion, whether the Salary should be increased and, if so, the amount of such increase and the time in which the increase shall take effect. All payments due to Employee hereunder shall be made subject to such withholdings and deductions as are required to be made under applicable law.

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(b)        Bonus.  In addition, the Employee will be eligible to receive bonuses based on the financial performance of the Incentives Advisors business unit. In Calendar Year 2011, the plan shall be as follows:

(i)           Quarterly Bonus.  $15,000 in a cash bonus in each calendar quarter in Calendar Year (“CY”) 2011 if quarterly Employer’s EBITDA in such quarter is equal to or greater than $100,000.  Each such Quarterly Bonus is to be paid within 30 days following the accounting and financial closing of the quarterly period.

(ii)           Annual Bonus.  If Employer’s EBITDA for CY 2011 is greater than $400,000, a bonus of 12.5% of the difference between $400,000 and the CY 2011 EBITDA will be payable to each Employee as the annual bonus. The Annual Bonus is to be paid within 30 days following the accounting and financial closing of the Calendar Year.    For example, if EBITDA in CY 2011 is $600,000, the Annual Bonus will be ($600,000 - $400,000) x 12.5%  = $200,000 x 12.5% = $25,000 payable to Employee.

For the purposes of the above calculations, EBITDA shall be adjusted for any incremental investments in the business agreed upon between the parties. For the second and third year of this agreement, the parties shall mutually agree on the EBITDA thresholds required to attain a Quarterly Bonus and an Annual Bonus, taking into account the performance of the business unit.

(c)        Benefits.  During the Employment Term, Employee shall be entitled to receive all benefits of employment generally available to other similar employees of the Related Companies when and as he becomes eligible for them, including medical, dental, life and disability insurance benefits.  Employer reserves the right to modify, suspend or discontinue any and all of the above benefit plans, policies, and practices at any time upon notice to Employee, so long as such action is taken generally with respect to other similarly situated employees of Employer and does not single out Employee.

7. OWNERSHIP OF INTANGIBLE PROPERTY

All processes, inventions, patents, copyrights, trademarks and other intangible rights that may be conceived or developed by Employee, either alone or with others, during the Employment Term, whether or not conceived or developed during Employee’s working hours, and with respect to which the equipment, supplies, facilities or trade secret information of any Related Company was used, or that relate at the time of conception or reduction to practice of the invention to the business of any Related Company or to any Related Company’s actual or demonstrably anticipated research and development, or that result from any work performed by Employee for any Related Company, shall be the sole property of Employer.  Employee shall disclose to Employer all inventions conceived during the term of employment, whether or not the property of any Related Company under the terms of the preceding sentence, provided that such disclosure shall be received by Employer in confidence.  Employee shall execute all documents, including patent applications and assignments, reasonably required by Employer to establish Employer’s rights under this Section.

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8. INDEMNIFICATION

Employer shall, to the maximum extent permitted by law and its articles of organization and operating agreement, indemnify and hold Employee harmless for any acts or decisions made in good faith while performing services for Employer.  To the same extent, Employer will pay, and subject to any legal limitations, advance all expenses, including reasonable attorneys’ fees and costs of court-approved settlements, actually and necessarily incurred by Employee in connection with the defense of any action, suit or proceeding and in connection with any appeal, which has been brought against Employee by reason of his good faith service as an employee or agent of Employer.

9. TERMINATION

(a)        For Cause.  This Agreement shall be terminated upon the discharge of Employee by Employer in writing for Cause.  For purposes of this Agreement, an event or occurrence constituting “Cause” shall mean:

(i)           Employee’s willful failure or refusal after notice thereof, to perform specific directives of John Long, or his successor or designee, or senior officers of Employer or Workstream;

(ii)           Dishonesty of Employee affecting Employer or any other Related Company;

(iii)          Drunkenness or use of drugs which interferes with the performance of Employee’s duties and responsibilities under this Agreement;

(iv)          Employee’s conviction of a felony or of any crime involving moral turpitude, fraud or misrepresentation;

(v)           Any gross or willful conduct of Employee resulting in material loss to Employer or any other Related Company, material damage to the reputation of Employer or any other Related Company or theft or defalcation from Employer or any other Related Company;

(vi)          Gross incompetence on the part of Employee in the performance of his duties and responsibilities under this Agreement; and

(vii)         Any material breach (not covered by any of clauses (i) through (vi) above) of any of the provisions of this Agreement if such breach is not cured within five days after written notice thereof to Employee by Employer.

(b)        Retirement or Resignation.  This Agreement shall be terminated by Employee’s voluntary retirement, which retirement shall be effective two weeks after Employee provides Employer notice of such voluntary retirement.  This Agreement shall be terminated upon Employee’s resignation, which shall be effective two weeks after Employee provides notice of such resignation unless the Employer accepts such resignation prior to such notice period.

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(c)        Disability.  If, at the end of any calendar month during the Employment Term, Employee is and has been for the four consecutive full calendar months then ending, or for 80 percent or more of the normal working days during the six consecutive full calendar months then ending, unable due to mental or physical illness or injury to perform his duties under this Agreement in his normal and regular manner, the Employer may, in its sole discretion, terminate this Agreement.

(d)        Death.  This Agreement shall be terminated immediately upon the death of the Employee.

(e)        Rights and Obligations Upon Termination.  If Employee gives notice of termination of this Agreement under this Section, or if it becomes known that this Agreement will otherwise terminate in accordance with its provisions, Employer may, in its sole discretion and subject to its other obligations under this Agreement, relieve Employee of his duties under this Agreement and assign Employee other reasonable duties and responsibilities to be performed until the termination becomes effective.  All salary and benefits shall cease at the effective time of any such termination hereunder, and Employee shall not be entitled to any salary, benefi ts or other payments following such date.

10. SURVIVAL

Each of the representations, warranties and covenants set forth in Sections 4, 5, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22 and 23 of this Agreement shall survive and shall continue to be binding upon the Employee notwithstanding the termination of this Agreement for any reason whatsoever.

11. UNFAIR COMPETITION; CONFIDENTIALITY

Because of his employment by Employer, Employee will have access to trade secrets and confidential information about the Employer and the Related Companies, including but not limited to with respect to their products, their customers, their financial performance, pricing and their methods of doing business.  All such information is considered secret and is disclosed to Employee in strict confidence.  During and after his employment by Employer, Employee shall not directly or indirectly disclose to any third party or use any such information except as required in the course of his employment by Employer and not for his own benefit or any other purpose.

12. DISPUTE RESOLUTION

Any dispute regarding any aspect of this Agreement or any act which allegedly has or would violate any provision of this Agreement (an “Arbitrable Dispute”) will be exclusively submitted to binding arbitration before a neutral arbitrator (the “Arbitrator”).  If Employee and Employer are unable to agree upon the Arbitrator, Employer will obtain a list of five arbitra­tors from the American Arbitration Association.  Employee (first) and then Employer will alternately strike names from the list until only one name remains; the remaining person shall be the Arbitrator.  The Arbitrator shall be bound by the qualifications and disclosure provisions and th e procedures set forth in the then-current Model Employ­ment Arbitration Procedures of the

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American Arbitration Association and shall order such discovery as is appropriate to the nature of the claim and necessary to the adjudication thereof.

Arbitration proceedings shall be held in Phoenix, Arizona.  The Arbitrator shall determine the prevailing party in the arbitration.  The Arbitrator shall be permitted to award only those remedies in law or equity that are requested by the parties, appropriate for the claims and supported by credible, relevant evidence.  There shall be no right to appeal the decision of the arbitrator.

EMPLOYEE AND EMPLOYER AGREE THAT THE FOREGOING ARBITRATION PROCEDURE SHALL BE THE EXCLUSIVE MEANS OF RESOLVING ANY ARBITRABLE DISPUTE AND THAT NO OTHER ACTION WILL BE BROUGHT BY EMPLOYEE IN ANY COURT OR OTHER FORUM.  THIS AGREEMENT IS A WAIVER OF ALL RIGHTS TO A CIVIL COURT ACTION AND APPEAL FOR AN ARBITRABLE DISPUTE; ONLY THE ARBITRA­TOR, NOT A JUDGE OR JURY, WILL DECIDE SUCH DISPUTE.

13. BREACH BY EMPLOYEE

Employee is obligated under this Agreement to render services of a special, unique, unusual, extraordinary, and intellectual character, which give this Agreement peculiar value.  The loss of these services cannot be reasonably or adequately compensated in damages in an action at law.  Accordingly, in addition to other remedies provided by law or this Agreement, Employer shall have the right to obtain injunctive relief against the breach of this Agreement by Employee or the performance of services by Employee in violation of this Agreement, or both.

14. ENTIRE AGREEMENT

This Agreement (together with a separate non-compete agreement between Workstream and Employee, which is a separate and distinct agreement between the parties enforceable in accordance with its own terms and which shall not be affected by the existence or terms of this Agreement) contains the entire agreement between the parties regarding the subject matter hereof and supersedes all prior oral and written agreements, understandings, commitments, and practices between them.

15. AMENDMENTS

No oral modifications, express or implied, may alter or vary the terms of this Agreement.  No amendments or modifications to this Agreement and no waiver of any provision of this Agreement may be made except by a writing signed by both parties.

16. GOVERNING LAW

THE FORMATION, CONSTRUCTION, AND PERFORMANCE OF THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF ARIZONA (EXCLUSIVE OF CONFLICTS OF LAWS PRINCIPLES) APPLICABLE TO AGREEMENTS EXECUTED AND TO BE PERFORMED SOLELY WITHIN SUCH STATE.

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17. NOTICES

Any notice to Employer required or permitted under this Agreement shall be given in writing to Employer, either by personal service or by registered or certified mail, postage prepaid, addressed to the Chief Executive Officer of Employer at 485 North Keller Road, Suite 500, Maitland, FL  32751, or its then principal place of business.  Any such notice to Employee shall be given in a like manner and, if mailed, shall be addressed to Employee at his home address then shown in Employer’s files.  For the purpose of determining compliance with any time limit in this Agreement, a notice shall be deemed to have been duly given (a) on the date of service, if served personally on the party to whom notice is to be given, or (b) on the third business day after mailing, if mailed to the party to whom the notice is to be given in the manner provided in this section.

18. RIGHT TO PAYMENTS

Employee shall under no circumstances have any option or right to require payments hereunder otherwise than in accordance with the terms of this Agreement.

19. BINDING AGREEMENT

Except as otherwise expressly provided herein, this Agreement shall be binding upon, and shall inure to the benefit of, Employer, its successors and assigns.  This Agreement, as it relates to Employee, is a personal contract and the rights and interest of Employee hereunder may not be sold, transferred, assigned, pledged or hypothecated.

20. SEVERABILITY

If any provision of this Agreement is held invalid or unenforceable, the remainder of this Agreement shall nevertheless remain in full force and effect.  If any provision is held invalid or unenforceable with respect to particular circumstances, it shall nevertheless remain in full force and effect in all other circumstances.

21. CAPTIONS

Section headings are for convenience of reference only and shall not be considered a part of this Agreement.

22. COUNTERPARTS

This Agreement may be executed in any number of counterparts, each of which when executed shall be deemed to be an original and all of which together shall be deemed to be one and the same instrument.

23. THIRD-PARTY BENEFICIARIES

This Agreement shall not confer any rights or remedies upon any party other than Employer, Employee, the Related Companies and their respective successors and permitted assigns.

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement, on and as of the day and year first above written.

INCENTIVES ADVISORS, LLC

By: 

Name:

Title:

[]

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EX-99.1

www.WorkstreamInc.com

News Release

January 21, 2011

Workstream Adds Hiring Tax Credit and Incentives Management Solutions:

Incentives Advisors, LLC of Phoenix Arizona is Combined with Workstream

MAITLAND, FL…. Jan 21, 2011 (GLOBE NEWSWIRE) -- Workstream (OTCBB:WSTM-News), a leading provider of human capital management software and services,  announced  today that it has acquired Incentives Advisors, LLC of Phoenix, Arizona.   This combination adds solutions for obtaining hiring tax credits, training grants and other incentives to the Workstream offering.  Incentives Advisors specializes in managing the process of procuring employment-related tax credits and incentives for employers.

In announcing the acquisition, John Long, CEO of Workstream, noted:  “Incentives Advisors is a growing company with the most advanced technology available to manage tax credits and incentives programs for employers.  Adding the Incentives Advisors service to Workstream is an exciting step in our plans to make Workstream a premier supplier of software solutions and essential services for human resource managers.”

William Becker and Shaung Liu, co-founders of Incentives Advisors, will remain with the company and continue to drive its growth.  The business will continue to be based in Phoenix.  Commenting on the combination with Workstream, Becker stated:  “We believe in the strategy of Workstream and embrace the opportunity to join forces with this exciting company to offer a wider set of tools and solutions.  It is a case of bringing added value to employers as we grow together.”

Long added:  “We have a shared vision with the Incentives Advisors management team and staff.  Today, HR departments are lean and seek to have relationships with select vendors that deliver meaningful solutions to help meet their goals.  This is often a mixture of technology solutions and critical services.”

Commenting on the market opportunity, Becker said, “Each year, billions of dollars in Federal and state tax credits and incentives are available to qualifying employers.  The process to apply for and claim these credits is complex and time-consuming.  Incentives Advisors automates and simplifies the process of obtaining credits and incentives for employers using proprietary technology that is fast and easy to implement.  For some companies that pursue these tax credits, it represents millions of dollars in benefits and has a meaningful impact on financial results.   Importantly, the programs help certain groups of people gain employment and receive training that otherwise might not have been available.    Both employers and employees win.”

-End-

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About Incentives Advisors, LLC:  Based in Tempe, Arizona, Incentives Advisors is a leading supplier of services to manage hiring tax credits, incentives and grants for employers across the country.   More information is available at http://www.incentivesadvisors.com.

About Workstream:Workstream provides a variety of solutions for recruitment, compensation planning, performance management, and talent management solutions and services that help companies manage the employee lifecycle.   Workstream's Talent Center enables employers to align their talent strategy with their business strategy.  Solutions are offered as Software as a Service (SaaS.)

This press release contains forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These statements are based on the current expectations or beliefs of Workstream's management and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. The following factors, among others, could cause actual results to differ materially from those described in the forward-looking statements: inability to grow our client base and revenue because of the number of competitors and the variety of sources of competition we face; client attrition; inability to identify or complete the acquisition of quality target businesses; inability to integrate acquired businesses; inability to offer services that are superior and cost effective when compared to the services being offered by our competitors; inability to further identify, develop and achieve success for new products, services and technologies; increased competition and its effect on pricing, spending, third-party relationships and revenues; as well as the inability to enter into successful strategic relationships and other risks detailed from time to time in filings with the Securities and Exchange Commission, including but not limited to those set forth under “Risk Factors” in Workstream’s annual report on Form 10-K.  The forward-looking statements herein reflect the company's expectations as at the date of this press release and are subject to change after this date.

Workstream Inc.

485 N. Keller Road, Suite 500

Maitland, FL 32751

For more information:    Ezra Schneier

Ezra.Schneier@workstreaminc.com

Tel: 407-475-5500  Ext. 709

Mobile: 267-980-6095

www.workstreaminc.com

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