EMPLOYMENT AGREEMENT

     EMPLOYMENT AGREEMENT (this "Agreement"), dated May 15, 2006, between THOMAS
EQUIPMENT, INC., it successors or assigns, a Delaware corporation, (the
"Company"), and James E. Patty (the "Employee").

     1. EMPLOYMENT PERIOD. The Company shall employ the Employee, and the
Employee shall serve the Company, on the terms and conditions set forth in this
Agreement, for the period commencing on May 1, 2006 and ending on April 30,
2008, unless earlier terminated (the "Initial Term"); provided that the term of
employment hereunder shall be renewed by the Board of Directors on April 30,
2008, and at each two-year anniversary thereafter, for successive two-year terms
(each such term a "Renewal Term") unless the Company or the Employee provides
written notice to the other party, at least 90 days prior to the expiration of
the Initial Term or any Renewal Term, of the non-renewal of this Agreement. The
Initial Term and any subsequent Renewal Terms shall be referred to herein as the
"Employment Period." This agreement will only be binding upon the company after
the first funding becomes available.

     2. POSITION & DUTIES.

        (a) The Employee shall serve as CHIEF OPERATING OFFICER for the Company,
reporting to the Board of Directors and working with the President of the
Company, with such duties and responsibilities as are customarily assigned to
such position, and such other duties and responsibilities not inconsistent
therewith as may be assigned to him from time to time after agreement with the
Board of Directors.

        (b) During the Employment Period, and excluding any periods of vacation
and sick leave to which the Employee is entitled, the Employee shall devote his
full-time efforts to the business and affairs of the Company and use his best
efforts to carry out such responsibilities faithfully and efficiently.

     3. COMPENSATION.

        (a) BASE SALARY. During the first contract year of the Initial Term, the
Employee shall receive an annual base salary (the "Annual Base Salary") of
$250,000. Employee will receive an annual salary review prior to February 28
(the "Effective Date") by the Board, or an authorized committee thereof, on each
anniversary of the Effective Date, which shall result in an annual increase in
Employee's Annual Base Salary during the Initial Term and any Renewal Term at
the discretion of the Board. The Annual Base Salary shall be payable in
accordance with the Company's payroll practices as in effect from time to time.
The Board or an authorized committee thereof may increase the Annual Base Salary
above the foregoing amounts at its discretion.

        (b) SIGN-ON BONUS. Employee shall be entitled to a sign-on bonus of
$250,000 upon execution of this agreement, over the next six months.

        (c) RELOCATION EXPENSE AND CHANGE IN EXPATRIATE TAX EXCLUSION STATUS.
Reasonable relocation expenses from your foreign residence to the United States
will be reimbursed through the Company's expense reporting system. In addition,
a one time cash payment will be made to you in the amount of $70,000 by May 31,
2006 for your change in expatriate status.

        (d) SPECIAL INCENTIVE AWARD. A restricted stock grant of 250,000 shares
upon execution of this agreement. 100% vesting shall occur on the same date as
the auditors report date for the financial statements ending June 30, 2008 and
contingent upon the following conditions:


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<PAGE>


          1)   Inventory turns measured quarterly must increase from the base
               quarter March 31, 2006 inventory turns (as calculated from the
               March 31, 2006 financial statements submitted to the SEC on Form
               10-Q), for 6 of the next 9 consecutive quarters as calculated
               using from the Company's quarterly filings on Form 10-Q or the
               annual filing on Form 10-K for the fourth quarter

          2)   Gross profit percentage measured quarterly from the base quarter
               March 31, 2006, (from the forms filed SEC quarterly, Form 10-Q
               and annually Form 10-K) must exceed the base quarter by 6
               percentage points for 6 of the next 9 consecutive quarters.

          3)   If the 30 day moving average closing bid price as quoted by
               Bloomberg LP, exceeds by 4.5 times the closing bid price as
               quoted by Bloomberg LP on May 8, 2006, the warrant issue date
               shall be accelerated to that day and the conditions of 1) and 2)
               noted above no longer apply.

          4)   The restricted stock grant will be 100% vested upon consummation
               of an agreement that causes a change in majority control. If an
               agreement is consummated, conditions 1), 2) and 3) no longer
               apply.

        (e) ANNUAL BONUSES. In addition to the Annual Base Salary, Employee
shall be entitled to annual discretionary bonuses ("Bonus") (as determined by
the Board or an authorized committee thereof) based upon Employee's Annual Base
Salary, and consistent with operating and/or other financial targets established
by the Board or an authorized committee thereof, for each respective fiscal year
of Company during the Employment Period. At the end of each fiscal year of
Company during the Employment Period Employee shall be entitled to receive
annual discretionary option grants (as determined by the Board or an authorized
committee thereof) pursuant to the Company's Stock Option Plan based upon
Employee's performance, and consistent with operating and/or other financial
targets established by the Board or an authorized committee thereof. Such "Stock
Option Compensation" shall be issued to Employee on the last day of each fiscal
year during the Employment Period, unless the Employee is terminated by the
Company for Cause (as hereinafter defined) or the Employee terminates his
employment without Good Reason (as hereinafter defined), in which case Employee
shall be entitled to only that portion of Stock Option Compensation which has
accrued hereunder as of the Date of Termination.

        (f) INSURANCE. During the Employment Period the Company will provide
Employee with term life insurance in the amount of ONE MILLION DOLLARS
($1,000,000.00) or 3x annual salary, whichever is higher, payable to the
beneficiaries of Employee's choice. Employee will cooperate with the Company in
obtaining such policies. In addition, the Employee shall be entitled, at his
discretion, to increase coverage and pay that additional amount out of pocket,
and assume the ownership of and pay the premiums on any policy on the Employee's
life currently being funded by the Company.

        (g) OTHER BENEFITS. During the Employment Period, the Employee and the
Employee's immediate family shall be entitled to participate in all benefit
programs of the Company, including, but not limited to, 100% health insurance
coverage or reimbursement of the Employee's cost to maintain, as well as all
welfare benefit plans, practices, policies and programs provided by the Company,
including, but not limited to any comprehensive dental plan, retirement plans
and profit sharing programs the Company may provide to any other employees from
time to time.

        (h) EXPENSES. During the Employment Period, the Employee shall be
entitled to receive prompt reimbursement for all reasonable expenses incurred by
the Employee in carrying out the Employee's duties under this Agreement,
provided that the Employee complies with the policies, practices and procedures
of the Company for submission of expense reports, receipts and similar
documentation of such expenses.


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<PAGE>

        (i) VACATION. During the Employment Period, the Employee shall be
entitled to four (4) weeks paid vacation plus 10 U.S. national holidays per
annum.

        (j) VEHICLE. During the Employment Period, the Employee shall own or
lease for which the Employee will receive reimbursement from the Company of all
`out of pocket' expenses, including loan or lease payments, or insurance
incurred by the Employee in connection with the purchase or lease and operation
of the vehicle and to keep the vehicle in a clean, roadworthy and legal
condition including all taxes and insurances.

     4. TERMINATION OF EMPLOYMENT.

        (a) DEATH OR DISABILITY. The Employee's employment shall terminate
automatically upon the Employee's death during the Employment Period. The
Company shall be entitled to terminate the Employee's employment because of the
Employee's Disability during the Employment Period. "Disability" means that (i)
the Employee has been unable, for a period of six months or for a total of 90
days in any given period, to perform the Employee's duties under this Agreement,
as a result of physical or mental illness or injury, and (ii) a physician
selected by the Company or its insurers, and acceptable to the Employee or the
Employee's guardian or legal representative, has determined that the Employee's
incapacity is total and permanent. A termination of the Employee's employment by
the Company for Disability shall be communicated to the Employee by written
notice, and shall be effective on the 30th day after receipt of such notice by
the Employee (the "Disability Effective Date"), unless the Employee is able to,
and does, return to full-time performance of the Employee's duties before the
Disability Effective Date.



        (b) BY THE COMPANY.

          (A) The Company may terminate the Employee's employment during the
Employment Period for Cause or without Cause. "Cause" means:

                    (i)  the Employee's conviction of a crime involving some act
                         of dishonesty or moral turpitude (specifically
                         excepting simple misdemeanors not involving acts of
                         dishonesty and all traffic violations);

                    (ii) the Employee's theft, embezzlement, misappropriation of
                         or intentional and malicious infliction of damage to
                         the Company's property or business opportunity;

                    (iii) the Employee's abuse of alcohol, drugs or other
                         substances as determined by an independent medical
                         physician;

                    (iv) the Employee's engagement in gross dereliction of
                         duties, repeated refusal to perform assigned duties
                         consistent with his position, or repeated violation of
                         the Company's written policies after written warning;
                         or

                    (v)  the Employee's failure to achieve annual performance
                         goals and/or targets for his position as mutually
                         determined and agreed upon with the Company's board of
                         directors.


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<PAGE>

          (B) A termination of employment by the Company for Cause shall be
effectuated by giving the Employee written notice ("Notice of Termination for
Cause") of the termination, setting forth the conduct of the Employee that
constitutes Cause. Termination of employment by the Company for Cause shall be
effective on the date when the Notice of Termination for Cause is given, unless
the notice sets forth a later date (which date shall in no event be later than
60 days after the notice is given). Employee will be immediately advised of any
allegations of fraud, embezzlement, or other dishonesty mentioned in clause (A)
above and will be provided a period of 30 days from the date of notice to defend
himself against such allegations and to take any appropriate remedial action. If
Employee shows that the allegations are untrue or takes appropriate remedial
action to address the allegations, the Company will not terminate the Employee's
employment for Cause.

          (C) A termination of the Employee's employment by the Company without
Cause shall be effected by giving the Employee written notice of the termination
at least Ninety (90) days prior to the termination date.

     (c) BY THE EMPLOYEE.

               (A) The Employee may terminate employment in the event of a Good
Reason. "Good Reason" means:

                (i) the assignment to the Employee of any duties inconsistent in
        any respect with paragraph (a) of Section 2 of this Agreement, other
        than actions that are not taken in bad faith and are remedied by the
        Company within thirty (30) days after receipt of notice thereof from the
        Employee;

                (ii) any failure by the Company to comply with any provision of
        Section 3 of this Agreement, other than failures that are not taken in
        bad faith and are remedied by the Company within thirty (30) days after
        receipt of notice thereof from the Employee;

                (iii) the assignment of the Employee to an office more than 50
        miles away from the Company's current executive offices; or

                (iv) the occurrence of a Non-Negotiated Change in Control of the
        Company (as defined below).

For purposes of this Agreement, "Non-Negotiated Change in Control" means any one
or more of the following occurrences:

Any individual, corporation (other than the Company, any trustees or other
beneficiary holding securities under any employee benefit plan of the Company,
or any Company owned, directly or indirectly, by the stockholders of the Company
in substantially the same proportions as their ownership of stock of the
Company), partnership, trust, association, pool, syndicate, or any other entity
or any group of persons acting in concert becomes the beneficial owner (within
the meaning of Rule 13d-3 under the Securities Exchange Act of 1934) of
securities of the Company possessing more than fifty percent (50%) of the voting
power for the election of directors of the Company;


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<PAGE>

There shall be consummated any consolidation, merger, or other business
combination involving the Company or the securities of the Company in which
holders of voting securities of the Company immediately prior to such
consummation own, as a group, immediately after such consummation, voting
securities of the Company (or, if the Company does not survive such transaction,
voting securities of the entity surviving such transaction) having less than
fifty percent (50%) of the total voting power in an election of directors of the
Company (or such other surviving corporation); or

There shall be consummated any sale, lease, exchange, or other transfer (in one
transaction or a series of related transactions) of all, or substantially all,
of the assets of the Company (on a consolidated basis) to a party which is not
controlled by or under common control with the Company.

        (d) A termination of employment by the Employee for Good Reason shall be
effectuated by giving the Company written notice ("Notice of Termination for
Good Reason") of the termination, setting forth the conduct of the Company that
constitutes Good Reason. A termination of employment by the Employee for Good
Reason shall be effective on the fifth business day following the date when the
Notice of Termination for Good Reason is given, unless the notice sets forth a
later date (which date shall in no event be later than 30 days after the notice
is given).

        (e) A termination of the Employee's employment by the Employee without
Good Reason shall be effected by giving the Company written notice of the
termination at least thirty (30) days prior to the termination date.

        (f) Notwithstanding anything in this Agreement to the contrary, in no
event will any amount which otherwise would be payable under or pursuant to this
Agreement be payable to Employee to the extent such amount, together with all
other amounts payable and benefits provided to Employee under or pursuant to
this Agreement and/or under any other plan(s), agreements and/or arrangement(s)
arising out of Employee's employment relationship with Company and/or any direct
or indirect subsidiary of Company (including without limitation any such amounts
payable by any affiliate of Company or any acquirer of any of the stock or
assets of Company or any affiliate of such acquirer), if paid to Employee, would
result in Employee receiving an "excess parachute payment" for purposes of
Section 280G of the Internal Revenue Code of 1986, as amended. The determination
of whether a payment under or pursuant to this Agreement would result in
Employee receiving an excess parachute payment (but for the provisions of this
Section 4) shall be made by counsel for Company reasonably selected by Company,
after consultation with Company's independent auditor

        (g) No Waiver. The failure to set forth any fact or circumstance in a
Notice of Termination for Cause or a Notice of Termination for Good Reason shall
not constitute a waiver of the right to assert, and shall not preclude the party
giving notice from asserting, such fact or circumstance in an attempt to enforce
any right under or provision of this Agreement.

        (h) Date of Termination. The "Date of Termination" means the date of the
Employee's death, the Disability Effective Date, the date on which the
termination of the Employee's employment by the Company for Cause or by the
Employee for Good Reason is effective, or the date on which the Company gives
the Employee notice of a termination of employment without Cause or the Employee
gives the Company notice of a termination of employment without Good Reason, as
the case may be.


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<PAGE>

     5. OBLIGATIONS OF THE COMPANY UPON TERMINATION.

        (a) Termination for Reasons Other Than for Cause, Death or Disability,
or Good Reason. If, during the Employment Period, the Company terminates the
Employee's employment, for any reason other than for Cause, Death or Disability,
or the Employee terminates his employment for Good Reason, the Company shall pay
the Employee's accrued but unpaid portion of the Annual Base Salary (the
"Accrued Obligations"). In addition, the Employee shall be entitled to a bonus
(the "Bonus") in an amount equal to the Annual Base Salary for the remainder of
the Employment Period payable 30 days after the Date of Termination, in which
case such Bonus is to be paid 90 days after the Date of Termination. The
payments provided pursuant to this paragraph (a) of Section 5 are intended as
liquidated damages for a termination of the Employee's employment by the Company
other than for Cause or Disability or for the actions of the Company leading to
a termination of the Employee's employment by the Employee for Good Reason, and
shall be the sole and exclusive remedy therefore.

        (b) Termination as a Result of Employee's Death or Disability. If the
Employee's employment is terminated by reason of the Employee's death or
Disability during the Employment Period, (i) the Company shall pay the Accrued
Obligations to the Employee or the Employee's estate or legal representative, as
applicable, in a lump sum in cash within 30 days after the Date of Termination.
In addition, if the Employee's employment is terminated by reason of Disability,
the Company will continue to pay to Employee until the earlier of: (i)
expiration of the Employment Period, or (ii) the date of Employee's death, the
Annual Base Salary, less any amounts received by Employee under any disability
insurance coverage maintained for Employee by the Company.

        (c) Termination for Cause or Other than for Good Reason. If the
Employee's employment is terminated by the Company for Cause during the
Employment Period, or if the Employee terminates his employment during the
Employment Period other than for Good Reason, the Company shall pay Employee the
Accrued Obligations.

     6. NON-EXCLUSIVITY OF RIGHTS. Nothing in this Agreement shall prevent or
limit the Employee's continuing or future participation in any plan, program,
policy or practice provided by the Company or any of its affiliated companies
for which the Employee may qualify, nor, subject to paragraph (f) of Section 4,
shall anything in this Agreement limit or otherwise affect such rights as the
Employee may have under any contract or agreement with the Company or any of its
affiliated companies. Vested benefits and other amounts that the Employee is
otherwise entitled to receive under any plan, policy, practice or program of, or
any contract or agreement with, the Company or any of its affiliated companies
on or after the Date of Termination shall be payable in accordance with such
plan, policy, practice, program, contract or agreement, as the case may be,
except as explicitly modified by this Agreement.

     7. EXCLUSIVITY OF SERVICES AND RESTRICTIONS. During the Employment Period
and for a further period of 2 years following termination of Employee's
employment (other than termination without Cause or for Good Reason), Employee
shall not, directly or indirectly, (a) be or become interested in or associated
with (as an officer, director, stockholder, partner, consultant, owner,
employee, agent, creditor or otherwise) any business that is then, or which then
proposes to become, a direct competitor of the Company anywhere in the world;
provided, that the foregoing shall not restrict Employee from the ownership,
solely as an investment, of securities of any business if such ownership is (i)
not as controlling person of such business, (ii) not as a member of a group that
controls such business, and (iii) not as a direct or indirect beneficial owner
of 5% or more of any class of securities of such business.


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<PAGE>

     8. CONFIDENTIALITY; RETURN OF PROPERTY; NON-SOLICITATION OF EMPLOYEES:

        (a) The Employee acknowledges that during the Employment Period he will
receive confidential information from the Company and affiliates of the Company
(each a "Relevant Entity"). Accordingly, the Employee agrees that during the
Employment Period and thereafter for a period of two years, the Employee and his
affiliates shall not, except in the performance of his obligations to the
Company hereunder or as may otherwise be approved in advance by the Company,
directly or indirectly, disclose or use (except for the direct benefit of the
Company) any confidential information that he may learn or has learned by reason
of his association with any Relevant Entity. Upon termination of this Agreement,
the Employee shall promptly return to the Company any and all properties,
records or papers of any Relevant Entity, that may have been in his possession
at the time of termination, whether prepared by the Employee or others,
including, but not limited to, confidential information and keys. For purposes
of this Agreement, "confidential information" includes all data, analyses,
reports, interpretations, forecasts, documents and information concerning a
Relevant Entity and its affairs, including, without limitation with respect to
clients, products, policies, procedures, methodologies, trade secrets and other
intellectual property, systems, personnel, confidential reports, technical
information, financial information, business transactions, business plans,
prospects or opportunities, (i) that the Company reasonably believes are
confidential or (ii) the disclosure of which could be injurious to a Relevant
Entity or beneficial to competitors of a Relevant Entity, but shall exclude any
information that (x) the Employee is required to disclose under any applicable
laws, regulations or directives of any government agency, tribunal or authority
having jurisdiction in the matter or under subpoena or other process of law, (y)
is or becomes publicly available prior to the Employee's disclosure or use of
the information in a manner violative of the second sentence of this Section
8(a), or (z) is rightfully received by Employee without restriction or
disclosure from a third party legally entitled to possess and to disclose such
information without restriction (other than information that he may learn or has
learned by reason of his association with any Relevant Entity). For purposes of
this Agreement, "affiliate" means any entity that, directly or indirectly, is
controlled by, or under common control with, the Employee. For purposes of this
definition, the terms "controlled" and "under common control with" means the
possession, direct or indirect, of the power to direct or cause the direction of
the management and policies of such person, whether through the ownership of
voting stock, by contract or otherwise.

        (b) Employee shall not, at any time during the twenty-four (24) month
period following the Employment Period, directly or indirectly solicit or
otherwise encourage any third party or representative thereof, who was at the
end of the Employment Period, a customer of the Company, for the purpose of
causing such customer or customers to purchase, lease or otherwise use any
competitive product or service offered by Employee or any organization with
which Employee is affiliated.

        (c) For a period of one (1) year following the termination of Employee's
employment with the Company for any reason, Employee shall not, without the
Company's express written consent, either on his own behalf or on behalf of
another, solicit employees of the Company or any subsidiary of the Company for
the purpose of hiring them or inducing them to leave the Company.

        (d) Injunction. Notwithstanding any other provisions of this Agreement,
Employee acknowledges and agrees that in the event of a violation or threatened
violation of any of the provisions of this Section 8, the Company shall have no
adequate remedy at law and shall therefore be entitled to enforce each such
provision by temporary or permanent injunctive or mandatory relief obtained in
any court of competent jurisdiction without the necessity of proving damage or
posting any bond or other security, and without prejudice to any other remedies
that may be available at law or in equity.

     9. NO MITIGATION. In no event shall the Employee be obligated to seek other
employment or take any other action by way of mitigation of the amounts payable
to the Employee under any of the provisions of this Agreement and such amounts
shall not be reduced, regardless of whether the Employee obtains other
employment.


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<PAGE>

     10. SUCCESSORS.

        (a) This Agreement is personal to the Employee and, without the prior
written consent of the Company, shall not be assignable by the Employee
otherwise than by will or the laws of descent and distribution. This Agreement
shall inure to the benefit of and be enforceable by the Employee's legal
representatives.

        (b) This Agreement shall inure to the benefit of and be binding upon the
Company and its successors and assigns.

     11. MISCELLANEOUS.

        (a) This Agreement shall be governed by, and construed in accordance
with, the laws of the State of Delaware, without reference to principles of
conflict of laws. The captions of this Agreement are not part of the provisions
hereof and shall have no force or effect. This Agreement may not be amended or
modified except by a written agreement executed by the parties hereto or their
respective successors and legal representatives.

        (b) All notices and other communications under this Agreement shall be
in writing and shall be given by hand delivery to the other party or by
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:


        IF TO THE EMPLOYEE:             JAMES E. PATTY
                                        1459 ARROYO SECO DRIVE
                                        CAMPBELL, CALIFORNIA 95008



        IF TO THE COMPANY:              THOMAS EQUIPMENT, INC.
                                        1818 NORTH FARWELL AVE,
                                        MILWAUKEE, WI 53202


or to such other address as either party furnishes to the other in writing in
accordance with this paragraph (b) of Section 10. Notices and communications
shall be effective when actually received by the addressee.

        (c) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement. If any provision of this Agreement shall be held invalid or
unenforceable in part, the remaining portion of such provision, together with
all other provisions of this Agreement, shall remain valid and enforceable and
continue in full force and effect to the fullest extent consistent with law.

        (d) Notwithstanding any other provision of this Agreement, the Company
may withhold from amounts payable under this Agreement all federal, state, local
and foreign taxes that are required to be withheld by applicable laws or
regulations.

        (e) The failure of the Employee or the Company to insist upon strict
compliance with any provision of, or to assert any right under, this Agreement
shall not be deemed to be a waiver of such provision or right or of any other
provision of or right under this Agreement.

        (f) The Employee and the Company acknowledge that this Agreement
supersedes any other agreement between them concerning the subject matter
hereof.


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<PAGE>

        (g) This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, and which together shall constitute one
instrument.



IN WITNESS WHEREOF, the Employee has hereunto set the Employee's hand and,
pursuant to the authorization of the Company's board of directors, the Company
has caused this Agreement to be executed in its name on its behalf, all as of
the day and year first above written.


                                        /s/ JAMES E. PATTY
                                        -----------------------------
                                        JAMES E. PATTY



                                        THOMAS EQUIPMENT, INC.
                                        1818 NORTH FARWELL AVE.
                                        MILWAUKEE, WI 53202


                                        /s/ CLIFFORD RHEE
                                        -----------------------------
                                        BY: CLIFFORD RHEE
                                        TITLE: PRESIDENT & DIRECTOR


                                        /s/ DAVID MARKS
                                        -----------------------------
                                        BY: DAVID MARKS
                                        TITLE: DIRECTOR


                                        /s/ KENNETH SHIRLEY
                                        -----------------------------
                                        BY: KENNETH SHIRLEY
                                        TITLE: DIRECTOR


                                        /s/ MICHAEL W. WOODS
                                        -----------------------------
                                        BY: MICHAEL W. WOODS
                                        TITLE: DIRECTOR


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