LAURUS MASTER FUND, LTD.
c/o Laurus Capital Management, LLC
335 Madison Avenue, 10th Floor
New York, New York 10017
 
July27, 2007
 
Thomas Equipment, Inc.
Thomas Ventures, Inc.
1475 32nd Avenue
Lachine, Quebec H8T 3J1, Canada
 
Attention: Luigi LoBasso
 
Re: Amendment to Security and Purchase Agreement
 
Ladies and Gentlemen:
 
Reference is made to (a) the Security and Purchase Agreement dated as of
November 9, 2004 (as amended, restated, modified and supplemented from time to
time, the “Agreement”) among Thomas Equipment, Inc. (f/k/a Maxim Mortgage
Corporation) (“Thomas Equipment”) and Thomas Ventures, Inc. (“Thomas Ventures”)
(Thomas Equipment and Thomas Ventures, each a “Company” and collectively,
“Companies”) and Laurus Master Fund, Ltd. (“Laurus”) and (b) the Default Notice
dated August 17, 2006 (the “Default Notice”) from Laurus to the Companies and
certain other parties listed therein. Capitalized terms used herein that are not
defined shall have the meanings given to them in the Agreement.
 
As set forth in the Default Notice, Laurus notified Companies that various
Events of Default have occurred and are continuing under the Agreement (the
“Existing Defaults”). Companies have requested that Laurus amend the Agreement
and, notwithstanding the occurrence and continuance of the Existing Defaults,
Laurus is willing to do so on the terms and conditions set forth below.
 
In consideration of the foregoing and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
hereby agree as follows:
 
Subject to satisfaction of the conditions precedent set forth below, the
Agreement is hereby amended as follows:
 
(a)  Section 2(d) of the Agreement is hereby amended in its entirety to provide
as follows:
 
“(d) Term Loans.
 
(i) Subject to the terms and conditions set forth herein and in the Ancillary
Agreements, Laurus shall make a term loan (the “Closing Date Term Loan”) to
Company and the Eligible Subsidiaries in an aggregate amount equal to
$6,000,000. The Closing Date Term Loan shall be advanced on the Closing Date and
shall be, with respect to principal, payable in consecutive monthly installments
of principal commencing on July 1, 2005 and on the first day of each month
thereafter. The first twenty-eight principal installments shall each be in the
amount of $206,896 and the twenty-ninth and final installment shall be in an
amount equal to the unpaid principal balance of the Closing Date Term Loan plus
all accrued and unpaid interest thereon. The Closing Date Term Loan shall be
payable in full on the Closing Date Term Loan Maturity Date, together with all
accrued and unpaid interest thereon and all other amounts due and owing with
respect thereto subject to acceleration upon the occurrence of an Event of
Default or termination of this Agreement. The Closing Date Term Loan shall be
evidenced by the Closing Date Secured Convertible Term Note.
 
 
 

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(ii) Subject to the terms and conditions set forth herein and in the Ancillary
Agreements, Laurus shall make a term loan (the “Second Term Loan”) to Company
and the Eligible Subsidiaries in an aggregate amount equal to $1,900,000. The
Second Term Loan shall be advanced on February 28, 2005 and shall be, with
respect to principal, payable in consecutive monthly installments of principal
commencing on July 1, 2005 and on the first day of each month thereafter. The
first twenty-eight principal installments shall each be in the amount of $65,517
and the twenty-ninth and final installment shall be in an amount equal to the
unpaid principal balance of the Second Term Loan plus all accrued and unpaid
interest thereon. The Second Term Loan shall be payable in full on the Second
Term Loan Maturity Date, together with all accrued and unpaid interest thereon
and all other amounts due and owing with respect thereto subject to acceleration
upon the occurrence of an Event of Default or termination of this Agreement. The
Second Term Loan shall be evidenced by the Second Secured Convertible Term Note.
 
(iii) Subject to the terms and conditions set forth herein and in the Ancillary
Agreements, Laurus shall make a term loan (the “Third Term Loan”) to Company and
the Eligible Subsidiaries in an aggregate amount equal to $4,640,000. The Third
Term Loan shall be advanced on January 6, 2006 and shall be payable in full
together with all accrued and unpaid interest thereon and all other amounts due
and owing with respect thereto, subject to acceleration upon the occurrence of
an Event of Default or termination of this Agreement, upon the earlier of (A)
July 6, 2006 and (B) the consummation of any offering of Thomas Equipment’s
Common Stock to a Person other than Laurus (the “Third Term Loan Maturity
Date”). The Third Term Loan shall be evidenced by the Third Term Note.
 
(iv) Subject to the terms and conditions set forth herein and in the Ancillary
Agreements, Laurus shall make a term loan (the “Fourth Term Loan”) to Company
and the Eligible Subsidiaries in an aggregate amount equal to $8,500,000. The
Fourth Term Loan shall be advanced on May 12, 2006 and shall be, with respect to
principal, payable in consecutive monthly installments of principal in the
amounts set forth in the Fourth Term Note commencing on September 1, 2006 and on
the first day of each month thereafter. The Fourth Term Loan shall be payable in
full on the Fourth Term Loan Maturity Date, together with all accrued and unpaid
interest thereon and all other amounts due and owing with respect thereto
subject to acceleration upon the occurrence of an Event of Default or
termination of this Agreement. The Fourth Term Loan shall be evidenced by the
Fourth Term Note.
 
 
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(v) Subject to the terms and conditions set forth herein and in the Ancillary
Agreements, Laurus shall make a term loan (the “Fifth Term Loan”) to Company and
the Eligible Subsidiaries in an aggregate amount equal to $1,500,000. The Fifth
Term Loan shall be advanced on January 17, 2007 and shall be payable in full on
the Fifth Term Loan Maturity Date, together with all accrued and unpaid interest
thereon and all other amounts due and owing with respect thereto, subject to
acceleration upon the occurrence of an Event of Default or termination of this
Agreement. The Fifth Term Loan shall be evidenced by the Fifth Term Note.
 
(vi) Subject to the terms and conditions set forth herein and in the Ancillary
Agreements, Laurus shall make a term loan (the “Sixth Term Loan”) to Company and
the Eligible Subsidiaries in an aggregate amount equal to $6,000,000. The Sixth
Term Loan shall be advanced on May 2, 2007 and shall be payable in full on the
Sixth Term Loan Maturity Date, together with all accrued and unpaid interest
thereon and all other amounts due and owing with respect thereto, subject to
acceleration upon the occurrence of an Event of Default or termination of this
Agreement. The Sixth Term Loan shall be evidenced by the Sixth Term Notes.
 
(vii) Subject to the terms and conditions set forth herein and in the Ancillary
Agreements, Laurus shall make a term loan (the “Seventh Term Loan” and together
with the Closing Date Term Loan, the Second Term Loan, the Third Term Loan, the
Fourth Term Loan, the Fifth Term Loan and the Sixth Term Loan, each a “Term
Loan” and collectively the “Term Loans”) to Company and the Eligible
Subsidiaries in an aggregate amount equal to $20,800,000. The Seventh Term Loan
shall be advanced on July___, 2007 and shall be payable in full on the Seventh
Term Loan Maturity Date, together with all accrued and unpaid interest thereon
and all other amounts due and owing with respect thereto, subject to
acceleration upon the occurrence of an Event of Default or termination of this
Agreement. The Seventh Term Loan shall be evidenced by the Seventh Term Note.”
 
(b)  Section 13(e) of the Agreement is hereby amended in its entirety to provide
as follows:
 
“(e) Use of Funds. It will use the proceeds of the Loans only to fund the
transactions contemplated by the Acquisition Documentation and for each
Company’s and each Eligible Subsidiary’s working capital purposes.
Notwithstanding anything herein to the contrary, each Company and each Eligible
Subsidiary will use:
 
 
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(i) the proceeds of the Third Term Loan solely to pay for such Company’s, such
Eligible Subsidiary’s, Thomas Canada’s and/or Thomas Asia’s (A) outstanding
accounts payable owing to their suppliers, (B) the purchase of materials and
parts for the assembly of their Inventory and (C) employee gross wages, taxes
and benefits in the normal course of their businesses;
 
(ii) the proceeds of the Fourth Term Loan as follows: (A) $5,336,000 to repay in
full the Third Term Loan and (B) $3,164,000 (net of all fees payable by each
Company and each Eligible Subsidiary in connection with the closing and funding
of the Fourth Term Loan) solely to pay for Company’s, such Eligible
Subsidiary’s, Thomas Canada’s and/or Thomas Asia’s (x) outstanding accounts
payable owing to their suppliers, (y) the purchase of materials and parts for
the assembly of their Inventory and (z) employee gross wages, taxes and benefits
in the normal course of their businesses;
 
(iii) the proceeds of the Fifth Term Loan solely to pay for Thomas Asia’s
working capital purposes;
 
(iv) the proceeds of the Sixth Term Loan (net of all fees payable by each
Company and each Eligible Subsidiary in connection with the closing and funding
of the Sixth Term Loan) to restricted account no. 2704059403 maintained by
Thomas Equipment at North Fork Bank to be distributed to the Companies by Laurus
in its sole discretion in accordance with the terms of that certain restricted
account letter agreement dated the date hereof from Laurus to the Companies; and
 
(v) the proceeds of the Seventh Term Loan (in each case, net of all fees payable
by Company and each Eligible Subsidiary in connection with the closing and
funding of the Seventh Term Loan) to deposit $9,624,206.99 to restricted account
no. 2704059043 maintained by Thomas Equipment at North Fork Bank to be
distributed to the Companies by Laurus in its sole discretion in accordance with
the terms of that certain restricted account letter agreement dated May 2, 2007
from Laurus to the Companies.
 
Company and each Eligible Subsidiary hereby acknowledge that breach of this
Section 13(e) shall constitute an automatic Event of Default and no cure or
grace period shall be applicable thereto notwithstanding any other provision of
this Agreement to the contrary.”
 
(c)  The following definitions in Annex A to the Agreement are hereby amended in
their entirety to provide as follows:
 
“Initial Term” means (a) with respect to the Revolving Loans, the Closing Date
through the Revolving Loan Maturity Date, (b) with respect to the Original
Closing Date Term Loan, the Closing Date through the Original Closing Date
Maturity Date, (c) with respect to the Second Term Loan, the Closing Date
through the Second Term Loan Maturity Date, (d) with respect to the Third Term
Loan, the Closing Date through the Third Term Loan Maturity Date, (e) with
respect to the Fourth Term Loan, the Closing Date through the Fourth Term Loan
Maturity Date, (f) with respect to the Fifth Term Loan Maturity Date, the
Closing Date through the Fifth Term Loan Maturity Date, (g) with respect to the
Sixth Term Loan, the Closing Date through the Sixth Term Loan Maturity Date and
(h) with respect to the Seventh Term Loan, the Closing Date through the Seventh
Term Loan Maturity Date, in each case, subject to acceleration at the option of
Laurus upon the occurrence of an Event of Default hereunder or other termination
hereunder.
 
 
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“Notes” means each of the Minimum Borrowing Notes, the Revolving Note, the
Secured Convertible Term Notes, the Third Term Note, the Fourth Term Note, the
Fifth Term Note, the Sixth Term Notes and the Seventh Term Note made by Company
and each Eligible Subsidiary in favor of Laurus in connection with the
transactions contemplated hereby, as the same may be amended, modified,
supplemented and restated from time to time, as applicable.
 
“Term Loans” has the meaning set forth in Section 2(d)(vii).
 
“Total Investment Amount” means $66,700,000.
 
(d)  the following definitions are hereby added to Annex A to the Agreement in
their appropriate alphabetical order:
 
“Seventh Term Loan Maturity Date” means July ___, 2009.
 
“Seventh Term Note” means the Secured Term Note dated as of July___, 2007 made
by Company and each Eligible Subsidiary in favor of Laurus in the aggregate
principal amount of Twenty Million Eight Hundred Thousand Dollars ($20,800,000),
as the same may be amended, modified, supplemented and restated from time to
time.
 
This letter agreement shall become effective upon satisfaction of the following
conditions precedent: Laurus shall have received (i) a management fee for the
benefit of Laurus Capital Management, LLC in the amount of $728,000 which fee
shall be deducted from the proceeds of the Seventh Term Loan, be fully earned as
of the date hereof and shall not be subject to reduction, rebate or proration
whatsoever, (ii) a copy of this Amendment executed by Companies, (iii) fully
executed originals of all documents instruments and agreements set forth on the
transaction checklist attached hereto as Exhibit A and (iv) all such other
certificates, instruments, documents, agreements and opinions of counsel as may
be required by Laurus or its counsel, each of which shall be in form and
substance satisfactory to Laurus and its counsel.
 
By their signatures below, each Company acknowledges that (a) the occurrence and
continuance of the Existing Defaults entitles Laurus to exercise its rights and
remedies under the Agreement, the Ancillary Agreements and applicable law
including, without limitation, (i) the right to declare all Obligations due and
payable and (ii) the right to enforce and exercise any and all of its rights,
remedies, Liens and security interests under the Agreement and the Ancillary
Agreements and (b) Laurus’ (i) entering into this letter agreement, (ii)
continuing to provide financial accommodations to the Companies and (iii)
voluntary forbearance, if any, from exercising any of its rights or remedies is
not intended (and should not be construed) as a waiver of the Existing Defaults
or Laurus’ rights and remedies with respect thereto, all of which are reserved
and preserved by Laurus. Any waiver of any Existing Default shall only be
effective if set forth in a written instrument executed and delivered in
accordance with the terms of the Agreement.
 
 
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Nothing contained herein shall (a) limit in any manner whatsoever each
Company’s, each guarantor’s and each other Person’s obligation to comply with,
and Laurus’ right to insist on such Company’s, such guarantor’s and such other
Person’s compliance with, each and every term of the Agreement and the Ancillary
Agreements, or (b) constitute a waiver of any Event of Default (including,
without limitation, any Existing Default) or any right or remedy available to
Laurus, or of any Company’s, any guarantor’s or any other Person’s obligation to
pay and perform all of its obligations, in each case whether arising under the
Agreement, the Ancillary Agreements, applicable law and/or in equity, all of
which rights and remedies howsoever arising are hereby expressly reserved, are
not waived and may be exercised by Laurus at any time.
 
Thomas Equipment acknowledges that it has an affirmative obligation to make
prompt public disclosure of material agreements and material amendments to the
Agreement and the Ancillary Agreements. It is Thomas Equipment’s determination
that, except as shall be set forth in Thomas Equipment’s Form 8-K to be filed no
later than two (2) Business Days following the date hereof, a copy of which
shall be delivered to Laurus, neither this letter agreement nor the terms and
provisions of this letter agreement (collectively, the “Information”) are
material. Thomas Equipment has had an opportunity to consult with counsel
concerning this determination. Thomas Equipment hereby agrees that Laurus shall
not be in violation of any duty to Thomas Equipment or its shareholders, nor
shall Laurus be deemed to be misappropriating any information of Thomas
Equipment, if Laurus sells shares of common stock of Thomas Equipment, or
otherwise engages in transactions with respect to securities of Thomas
Equipment, while in possession of the Information.
 
Except as specifically amended herein, the Agreement and the Ancillary
Agreements shall remain in full force and effect, and are hereby ratified and
confirmed. The execution, delivery and effectiveness of this letter agreement
shall not operate as a waiver of any right, power or remedy of Laurus, nor
constitute a waiver of any provision of the Agreement or any of the Ancillary
Agreements. This letter agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and assigns and shall be
governed by and construed in accordance with the laws of the State of New York.
 

 
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This letter agreement may be executed by the parties hereto in one or more
counterparts, each of which shall be deemed an original and all of which when
taken together shall constitute one and the same agreement. Any signature
delivered by a party by facsimile transmission shall be deemed to be an original
signature hereto.
 
 

        Very truly yours,       LAURUS MASTER FUND, LTD.  
   
   
    By:   /s/ DAVID GRIN  

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Name: David Grin   Title: Fund Manager

 
 
CONSENTED AND AGREED TO:
 
THOMAS EQUIPMENT, INC.
 

By:
/s/ MICHAEL LUTHER

  Name: Michael Luther

  Title: CEO

 
THOMAS VENTURES, INC.
 

By:
/s/ MICHAEL LUTHER

  Name: Michael Luther

  Title: CEO

 
 
Signature Page to Amendment to Security and Purchase Agreement]
 
 
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Exhibit A
 
Transaction Checklist

 
 
 
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