Document:

THIS NOTE AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES LAWS. THIS NOTE AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF
THIS NOTE MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS NOTE UNDER SAID ACT
AND ANY APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THOMAS EQUIPMENT, INC. THAT SUCH REGISTRATION IS NOT REQUIRED.

                          SECURED CONVERTIBLE TERM NOTE

      FOR VALUE RECEIVED, each of THOMAS EQUIPMENT, INC., a Delaware corporation
("Thomas Equipment"), and THOMAS VENTURES, INC., a Delaware corporation ("Thomas
Ventures")   and  together  with  Thomas   Equipment,   each  a  "Borrower"  and
collectively  the "Borrowers")  jointly and severally  promises to pay to LAURUS
MASTER FUND, LTD., c/o M&C Corporate  Services Limited,  P.O. Box 309 GT, Ugland
House,  South Church Street,  George Town,  Grand Cayman,  Cayman Islands,  Fax:
345-949-8080 (the "Holder") or its registered assigns or successors in interest,
on order,  the sum of One Million Nine Hundred  Thousand  Dollars  ($1,900,000),
together with any accrued and unpaid interest  hereon,  on November 9, 2007 (the
"Maturity Date") if not sooner paid.

      Capitalized  terms used herein without  definition shall have the meanings
ascribed to such terms in that certain Security and Purchase  Agreement dated as
of  November 9, 2004 among  Borrowers  and the Holder (as  amended,  modified or
supplemented from time to time including,  without limitation,  pursuant to that
certain  Amendment  Agreement  dated  as  of  the  date  hereof,  the  "Security
Agreement").

The following terms shall apply to this Note:

                                   ARTICLE I
                             INTEREST & AMORTIZATION

      1.1.  Contract  Rate.  Subject to Sections  4.11 and 6.7 hereof,  interest
payable on this Note shall  accrue at a rate per annum equal to the "prime rate"
published in The Wall Street Journal from time to time (the "Prime Rate"),  plus
three percent (3%) (the "Contract  Rate").  The Prime Rate shall be increased or
decreased as the case may be for each  increase or decrease in the Prime Rate in
an amount equal to such  increase or decrease in the Prime Rate;  each change to
be  effective  as of the day of the change in such rate in  accordance  with the
terms of the Security Agreement. Subject to Section 1.2, the Contract Rate shall
not be less  than  seven  and  one-half  percent  (7.50%).

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      1.2.  Contract Rate  Adjustments and Payments.  The Contract Rate shall be
calculated on the last business day of each month  hereafter  until the Maturity
Date (each a  "Determination  Date") and shall be subject to  adjustment  as set
forth herein. If (i) Thomas Equipment shall have registered the shares of Thomas
Equipment's  common  stock  delivered  to the Holder on the Closing Date and the
shares of Thomas  Equipment's  Common Stock underlying each of the conversion of
this Note, the other Term Note and the Minimum  Borrowing Notes and the exercise
of the Options and those  certain  warrants  issued to Holder on a  registration
statement  declared  effective by the  Securities and Exchange  Commission  (the
"SEC"),  and (ii) the market price (the  "Market  Price") of the Common Stock as
reported by Bloomberg,  L.P. on the Principal  Market (as defined below) for the
five (5) trading days  immediately  preceding a  Determination  Date exceeds the
then applicable  Fixed  Conversion  Price by at least twenty five percent (25%),
the Contract  Rate for the  succeeding  calendar  month shall  automatically  be
reduced by 200 basis points (200 b.p.) (2.0%) for each  incremental  twenty five
percent  (25%)  increase in the Market  Price of the Common Stock above the then
applicable Fixed Conversion Price.  Notwithstanding  the foregoing (and anything
to the  contrary  contained in herein),  in no event shall the Contract  Rate be
less than zero percent (0%).  Interest shall be (i) calculated on the basis of a
360 day year, and (ii) payable monthly, in arrears,  commencing on March 1, 2005
and on the first  business day of each  consecutive  calendar  month  thereafter
until the Maturity Date (and on the Maturity  Date),  whether by acceleration or
otherwise (each, a "Contract Rate Payment Date").

      1.3.  Minimum  Monthly  Principal  Payments.  Amortizing  payments  of the
aggregate  principal  amount  outstanding  under  this  Note  at any  time  (the
"Principal  Amount")  shall  begin on July 1, 2005 and shall  recur on the first
business day of each succeeding  month thereafter until the Maturity Date (each,
an  "Amortization  Date").  Subject to Article 3 below,  beginning  on the first
Amortization Date, Thomas Equipment shall make monthly payments to the Holder on
each Contract Rate Payment  Date,  each in the amount of $65,517,  together with
any accrued and unpaid interest to date on such portion of the Principal  Amount
plus any and all other  amounts  which  are then  owing  under  this  Note,  the
Security  Agreement  or any  other  Ancillary  Agreement  but have not been paid
(collectively,   the  "Monthly  Amount").  Any  Principal  Amount  that  remains
outstanding on the Maturity Date shall be due and payable on the Maturity Date.

                                   ARTICLE II
                              CONVERSION REPAYMENT

      2.1. (a) Payment of Monthly Amount in Cash or Common Stock.  Each month by
the fifth  (5th)  business  day  prior to each  Amortization  Date (the  "Notice
Date"),  the Holder  shall  deliver to Borrower a written  notice in the form of
Exhibit  B  attached  hereto  (each,  a  "Repayment  Notice")  stating  whether,
according to the  Conversion  Criteria (as defined  below),  the Monthly  Amount
payable on the next  Amortization Date shall be paid in cash or Common Stock, or
a combination  of both. If a Repayment  Notice is not delivered by the Holder on
or before the applicable Notice Date for such Amortization  Date, then Borrowers
shall pay the Monthly Amount due on such  Amortization Date in cash. Any portion
of the Monthly Amount paid in cash on an Amortization Date, shall be paid to the
Holder in an amount equal to 103% of such  amount.  The number of such shares to
be issued by  Thomas  Equipment  to the  Holder  on such  Amortization  Date (in
respect of such portion of the Monthly Amount converted into in shares of Common
Stock pursuant to Section  2.1(b)),  shall be the number  determined by dividing
(x) the portion of the Monthly Amount  converted into shares of Common Stock, by
(y) the then applicable Fixed Conversion Price.

                                       2
<PAGE>

      (b) Fixed Conversion  Price.  For purposes hereof,  subject to Section 3.5
hereof, the "Fixed Conversion Price" means an amount equal to $1.50.

      (c) Monthly Amount Conversion Guidelines. Subject to Sections 2.1(a), 2.2,
and 3.2 hereof,  the Holder  shall  convert into shares of Common Stock all or a
portion of the Monthly  Amount due on each  Amortization  Date  according to the
following guidelines (the "Conversion Criteria"):  (i) the average closing price
of the Common Stock as reported by Bloomberg,  L.P. on the Principal  Market for
the five (5) trading days immediately  preceding such Amortization Date shall be
greater than or equal to 110% of the Fixed  Conversion Price and (ii) the amount
of such  conversion  does not exceed  twenty five percent (25%) of the aggregate
dollar  trading  volume of the Common  Stock for the twenty two (22) day trading
period  immediately  preceding delivery of a Repayment Notice. If the Conversion
Criteria  are not met,  the Holder  shall  convert only such part of the Monthly
Amount that meets the Conversion Criteria. Any part of the Monthly Amount due on
an Amortization Date that the Holder has not been able to convert into shares of
Common Stock due to failure to meet the  Conversion  Criteria,  shall be paid by
the Borrowers in cash at the rate of 103% of the Monthly Amount otherwise due on
such  Amortization  Date,  within  three  (3)  business  days of the  applicable
Amortization Date.

      2.2. No Effective Registration.  Notwithstanding  anything to the contrary
herein,  the  Holder  shall not be  required  accept  shares of Common  Stock as
payment  following  a  conversion  by the  Holder  if  there  fails  to exist an
effective current Registration  Statement (as defined in the Registration Rights
Agreement)  covering the shares of Common Stock to be issued,  or if an Event of
Default hereunder exists and is continuing, unless such requirement is otherwise
waived in writing by the Holder in whole or in part at the Holder's option.

      2.3.  Optional  Redemption in Cash.  The Borrowers will have the option of
prepaying  this Note  ("Optional  Redemption")  by paying to the Holder a sum of
money equal to one hundred and five percent  (105%) of the  principal  amount of
this Note  together  with  accrued but unpaid  interest  thereon and any and all
other sums due,  accrued or payable to the Holder  arising under this Note,  the
other Term  Note,  the  Security  Agreement,  or any  Ancillary  Agreement  (the
"Redemption  Amount") on the day written  notice of  redemption  (the "Notice of
Redemption") is given to the Holder.  The Notice of Redemption shall specify the
date for such Optional  Redemption  (the  "Redemption  Payment Date") which date
shall be  seven  (7)  days  after  the date of the  Notice  of  Redemption  (the
"Redemption Period"). A Notice of Redemption shall not be effective with respect
to any  portion  of this Note for which the Holder has  previously  delivered  a
Notice of Conversion (defined below) pursuant to Section 3.1, or for conversions
elected to be made by the Holder  pursuant to Section 3.1 during the  Redemption
Period. The Redemption Amount shall be determined as if such Holder's conversion
elections  had been  completed  immediately  prior to the date of the  Notice of
Redemption.  On the Redemption  Payment Date,  the  Redemption  Amount (plus any
additional interest and fees accruing on the Notes during the Redemption Period)
must be irrevocably  paid in full in immediately  available funds to the Holder.
In the event the Borrowers fail to pay the  Redemption  Amount on the Redemption
Payment Date, then such Redemption Notice will be null and void.

                                       3
<PAGE>

                                   ARTICLE III
                           HOLDER'S CONVERSION RIGHTS

      3.1.  Optional  Conversion.  Subject to the terms of this Article III, the
Holder  shall  have the  right,  but not the  obligation,  at any time until the
Maturity  Date, or thereafter  during an Event of Default (as defined in Article
IV),  and to convert  all or any  portion of the  outstanding  Principal  Amount
and/or  accrued   interest  and  fees  due  and  payable  into  fully  paid  and
nonassessable  shares of the Common  Stock at the Fixed  Conversion  Price.  The
shares of Common Stock to be issued upon such  conversion are herein referred to
as the "Conversion Shares."

      3.2. Conversion Limitation.  Notwithstanding  anything contained herein to
the contrary,  the Holder shall not be entitled to convert pursuant to the terms
of this Note an amount that would be convertible  into that number of Conversion
Shares which would exceed the difference  between the number of shares of Common
Stock beneficially owned by such Holder or issuable upon exercise of the warrant
and the option held by such Holder and 9.99% of the outstanding shares of Common
Stock  of  Thomas  Equipment.  For the  purposes  of the  immediately  preceding
sentence,  beneficial  ownership  shall be determined in accordance with Section
13(d) of the Exchange Act and Regulation 13d-3 thereunder. The Conversion Shares
limitation  described  in this Section 3.2 shall  automatically  become null and
void  without  any notice to any  Borrower  upon the  occurrence  and during the
continuance  beyond any applicable grace period of an Event of Default,  or upon
65 days prior notice to Thomas Equipment.

      3.3. Mechanics of Holder's Conversion. In the event that the Holder elects
to convert  this Note into Common  Stock,  the Holder  shall give notice of such
election by delivering an executed and completed  notice of conversion  ("Notice
of Conversion") to Thomas  Equipment and such Notice of Conversion shall provide
a breakdown in reasonable detail of the Principal  Amount,  accrued interest and
fees that are being converted.  On each Conversion Date (as hereinafter defined)
and in  accordance  with its Notice of  Conversion,  the  Holder  shall make the
appropriate  reduction to the  Principal  Amount,  accrued  interest and fees as
entered  in its  records  and shall  provide  written  notice  thereof to Thomas
Equipment on the Conversion  Date.  Each date on which a Notice of Conversion is
delivered or telecopied to Thomas  Equipment in accordance  with the  provisions
hereof  shall be deemed a Conversion  Date (the  "Conversion  Date").  A form of
Notice of Conversion  to be employed by the Holder is annexed  hereto as Exhibit
A.  Pursuant to the terms of the Notice of  Conversion,  Thomas  Equipment  will
issue  instructions  to the transfer agent  accompanied by an opinion of counsel
within two (2) business days of the date of the delivery to Thomas  Equipment of
the Notice of  Conversion  and shall cause the  transfer  agent to transmit  the
certificates  representing the Conversion  Shares to the Holder by crediting the
account of the Holder's  designated broker with the Depository Trust Corporation
("DTC") through its Deposit  Withdrawal Agent Commission  ("DWAC") system within
three (3)  business  days  after  receipt by Thomas  Equipment  of the Notice of
Conversion (the "Delivery  Date"). In the case of the exercise of the conversion
rights set forth herein the  conversion  privilege  shall be deemed to have been
exercised  and the  Conversion  Shares  issuable upon such  conversion  shall be
deemed to have been issued upon the date of receipt by Thomas  Equipment  of the
Notice of Conversion. The Holder shall be treated for all purposes as the record
holder of such Common Stock, unless the Holder provides Thomas Equipment written
instructions to the contrary.

                                       4
<PAGE>

      3.4. Late Payments. Each Borrower understands that a delay in the delivery
of the shares of Common  Stock in the form  required  pursuant  to this  Article
beyond the  Delivery  Date  could  result in  economic  loss to the  Holder.  As
compensation  to the Holder for such loss,  the each Borrower  agrees to jointly
and  severally  pay late payments to the Holder for late issuance of such shares
in the form required  pursuant to this Article III upon  conversion of the Note,
in the amount  equal to $500 per  business  day after the  Delivery  Date.  Each
Borrower  shall pay any  payments  incurred  under this  Section in  immediately
available funds upon demand.

      3.5. Conversion Mechanics.

      (a) The number of shares of Common Stock to be issued upon each conversion
of this Note shall be  determined  by dividing that portion of the principal and
interest  and  fees  to be  converted,  if any,  by the  then  applicable  Fixed
Conversion  Price.  In the event of any  conversions  of  outstanding  principal
amount under this Note in part  pursuant to this Article III,  such  conversions
shall be  deemed to  constitute  conversions  of  outstanding  principal  amount
applying  to  Monthly   Amounts  for  the   remaining   Amortization   Dates  in
chronological order.

      (b) The  Fixed  Conversion  Price and  number  and kind of shares or other
securities to be issued upon  conversion  determined  pursuant to Section 2.1(b)
shall be subject to  adjustment  from time to time upon the happening of certain
events while this conversion right remains outstanding, as follows:

            A. Reclassification,  etc. If Thomas Equipment at any time shall, by
reclassification  or  otherwise,  change  the  Common  Stock  into the same or a
different  number of  securities  of any class or classes,  this Note, as to the
unpaid Principal Amount and accrued interest thereon, shall thereafter be deemed
to evidence the right to purchase an adjusted number of such securities and kind
of  securities  as would have been  issuable  as the result of such  change with
respect to the Common Stock (i) immediately  prior to or (ii) immediately  after
such reclassification or other change at the sole election of the Holder.

            B. Stock Splits, Combinations and Dividends. If the shares of Common
Stock are  subdivided or combined into a greater or smaller  number of shares of
Common  Stock,  or if a dividend  is paid on the Common  Stock or any  preferred
stock issued by Thomas Equipment in shares of Common Stock, the Fixed Conversion
Price shall be proportionately reduced in case of subdivision of shares or stock
dividend or  proportionately  increased in the case of combination of shares, in
each  such case by the ratio  which the total  number of shares of Common  Stock
outstanding  immediately after such event bears to the total number of shares of
Common Stock outstanding immediately prior to such event.

                                       5
<PAGE>

            C. Share  Issuances.  Subject to the provisions of this Section 3.5,
if Thomas  Equipment  shall at any time prior to the  conversion or repayment in
full of the  Principal  Amount  issue any shares of Common  Stock or  securities
convertible  into  Common  Stock to a person  other than the Holder  (except (i)
pursuant to  Subsections A or B above;  (ii) pursuant to options,  warrants,  or
other obligations to issue shares outstanding on the date hereof as disclosed to
Holder in  writing;  (iii)  pursuant  to  options  that may be issued  under any
employee  incentive  stock option and/or any qualified stock option plan adopted
by Thomas  Equipment or (iv) pursuant to an  acquisition  by Borrower  permitted
under the terms of the Security  Agreement) for a  consideration  per share (the
"Offer  Price")  less than the Fixed  Conversion  Price in effect at the time of
such issuance,  then the Fixed  Conversion  Price shall be immediately  reset to
such lower Offer  Price.  For purposes  hereof,  the issuance of any security of
Thomas  Equipment  convertible  into or exercisable or  exchangeable  for Common
Stock  shall  result in an  adjustment  to the Fixed  Conversion  Price upon the
issuance of such securities.

            D.  Computation of  Consideration.  For purposes of any  computation
respecting  consideration received pursuant to Subsection C above, the following
shall apply:

                  (1) in the case of the  issuance of shares of Common Stock for
cash, the  consideration  shall be the amount of such cash,  provided that in no
case  shall  any  deduction  be made  for any  commissions,  discounts  or other
expenses  incurred  by Thomas  Equipment  for any  underwriting  of the issue or
otherwise in connection therewith;

                  (2) in the case of the  issuance of shares of Common Stock for
a  consideration  in whole or in part other than cash, the  consideration  other
than cash shall be deemed to be the fair market value  thereof as  determined in
good faith by the Board of Directors of Thomas  Equipment  (irrespective  of the
accounting treatment thereof); and

                  (3)  upon  any  such  exercise,  the  aggregate  consideration
received for such securities shall be deemed to be the consideration received by
Thomas Equipment for the issuance of such securities plus the additional minimum
consideration, if any, to be received by Thomas Equipment upon the conversion or
exchange  thereof (the  consideration  in each case to be determined in the same
manner as provided in clauses (a) and (b) of this Subsection (D)).

      3.6. Reservation of Shares. During the period the conversion right exists,
Thomas  Equipment will reserve from its  authorized and unissued  Common Stock a
sufficient number of shares to provide for the issuance of Common Stock upon the
full conversion of this Note.  Thomas  Equipment  represents that upon issuance,
such  shares  will be duly and validly  issued,  fully paid and  non-assessable.
Thomas  Equipment  agrees that its issuance of this Note shall  constitute  full
authority to its officers,  agents, and transfer agents who are charged with the
duty of  executing  and  issuing  stock  certificates  to execute  and issue the
necessary  certificates  for shares of Common Stock upon the  conversion of this
Note.

                                       6
<PAGE>

      3.7.  Registration Rights. The Holder has been granted registration rights
with respect to the shares of Common Stock issuable upon conversion of this Note
as more fully set forth in a Registration  Rights Agreement dated as of the date
hereof between Thomas Equipment and the Holder.

      3.8. Issuance of New Note. Upon any partial conversion of this Note, a new
Note  containing the same date and provisions of this Note shall, at the request
of the Holder, be issued by the Borrower to the Holder for the principal balance
of this Note and interest which shall not have been  converted or paid.  Subject
to the  provisions  of Article IV, the Borrower  will pay no costs,  fees or any
other consideration to the Holder for the production and issuance of a new Note.

                                   ARTICLE IV
                                EVENTS OF DEFAULT

      The  occurrence of any of the  following  events set forth in Sections 4.1
through 4.10, inclusive, shall be an "Event of Default":

      4.1. Failure to Pay Principal,  Interest or other Fees. Any Borrower fails
to pay when due any  installment of principal,  interest or other fees hereon or
on any other promissory note issued pursuant to the Security  Agreement,  or any
Borrower  fails to pay when due any amount due under any other  promissory  note
issued by such Borrower, when due in accordance with the terms of such note, and
in any such case,  such  failure  shall  continue for a period of three (3) days
following the date upon which any such payment was due.

      4.2. Breach of Covenant.  Any Borrower breaches any covenant or other term
or condition of this Note in any material respect and such breach, if subject to
cure, continues for a period of fifteen (15) days after the occurrence thereof.

      4.3. Breach of  Representations  and  Warranties.  Any  representation  or
warranty of any Borrower or any of its Subsidiaries made herein, or the Security
Agreement,  or in any  Ancillary  Agreement  shall be false or misleading in any
material respect.

      4.4.  Stop Trade.  An SEC stop trade  order or  Principal  Market  trading
suspension  of the Common Stock shall be in effect for 5  consecutive  days or 5
days during a period of 10 consecutive days, excluding in all cases a suspension
of all trading on a Principal  Market,  provided that Thomas Equipment shall not
have been  able to cure such  trading  suspension  within 30 days of the  notice
thereof or list the Common Stock on another  Principal  Market within 60 days of
such notice.  The "Principal Market" for the Common Stock shall include the NASD
OTC Bulletin  Board,  NASDAQ  SmallCap  Market,  NASDAQ  National Market System,
American Stock Exchange,  or New York Stock Exchange (whichever of the foregoing
is at the time the principal  trading  exchange or market for the Common Stock),
or any securities  exchange or other securities market on which the Common Stock
is then being listed or traded.

                                       7
<PAGE>

      4.5.  Receiver or Trustee.  Any Borrower or any of its Subsidiaries  shall
make an assignment for the benefit of creditors,  or apply for or consent to the
appointment  of a receiver  or trustee for it or for a  substantial  part of its
property  or  business;  or  such a  receiver  or  trustee  shall  otherwise  be
appointed.

      4.6. Judgments. Any money judgment, writ or similar final process shall be
entered or filed against any Borrower or any of its Subsidiaries or any of their
respective  property or other assets for more than $250,000 in the aggregate for
Borrower  and all such  Subsidiaries,  and shall remain  unvacated,  unbonded or
unstayed for a period of thirty (30) days.

      4.7.  Bankruptcy.  Bankruptcy,  insolvency,  reorganization or liquidation
proceedings  or other  proceedings or relief under any bankruptcy law or any law
for the relief of debtors  shall be instituted by or against any Borrower or any
of its Subsidiaries.

      4.8. Default Under Other Agreements. The occurrence of an Event of Default
under and as defined in the Security Agreement or any Ancillary Agreement or any
event of  default  (or  similar  term)  under  any  other  agreement  evidencing
indebtedness of at least $250,000.

      4.9.  Failure  to  Deliver  Common  Stock  or  Replacement   Note.  Thomas
Equipment's failure to timely deliver Common Stock to the Holder pursuant to and
in the form required by this Note and the Security Agreement, if such failure to
timely  deliver  Common  Stock  shall not be cured  within two (2) days.  If any
Borrower  is required to issue a  replacement  Note to Holder and such  Borrower
shall fail to deliver such replacement Note within seven (7) Business Days.

      4.10.  Change in Control.  The  occurrence of a change in the  controlling
ownership of any Borrower.

                           DEFAULT RELATED PROVISIONS

      4.11.  Default  Interest  Rate.  Following the  occurrence  and during the
continuance of an Event of Default, interest on this Note shall automatically be
increased by one and one-half  percent  (1.50%) per month,  and all  outstanding
Obligations,  including unpaid interest,  shall continue to accrue interest from
the date of such Event of  Default  at such  interest  rate  applicable  to such
Obligations until such Event of Default is cured or waived.

                                       8
<PAGE>

      4.12.  Conversion  Privileges.  The  conversion  privileges  set  forth in
Article  III shall  remain in full  force and effect  immediately  from the date
hereof and until this Note is paid in full.

      4.13.  Cumulative  Remedies.   The  remedies  under  this  Note  shall  be
cumulative.

                                    ARTICLE V
                                DEFAULT PAYMENTS

      5.1.  Default  Payment.  If an Event of Default  occurs and is  continuing
beyond any applicable  grace period,  the Holder,  at its option,  may elect, in
addition to all rights and remedies of Holder under the Security  Agreement  and
the Ancillary Agreements and all obligations of each Borrower under the Security
Agreement  and the  Ancillary  Agreements,  to require the  Borrowers  to make a
Default Payment  ("Default  Payment").  The Default Payment shall be 115% of the
outstanding principal amount of the Note, plus accrued but unpaid interest,  all
other fees then remaining unpaid, and all other amounts payable  hereunder.  The
Default  Payment  shall be applied  first to any fees due and  payable to Holder
pursuant to the Notes or the  Ancillary  Agreements,  then to accrued and unpaid
interest  due on the  Notes and then to  outstanding  principal  balance  of the
Notes.

      5.2.  Default  Payment Date. The Default  Payment shall be due and payable
immediately  on the date that the Holder has  exercised  its rights  pursuant to
Section 5.1 ("Default Payment Date").

                                   ARTICLE VI
                                  MISCELLANEOUS

      6.1. Failure or Indulgence Not Waiver.  No failure or delay on the part of
the Holder  hereof in the exercise of any power,  right or  privilege  hereunder
shall operate as a waiver thereof,  nor shall any single or partial  exercise of
any such power, right or privilege preclude other or further exercise thereof or
of any other  right,  power or  privilege.  All  rights  and  remedies  existing
hereunder  are  cumulative  to, and not  exclusive  of,  any rights or  remedies
otherwise available.

      6.2. Notices. Any notice herein required or permitted to be given shall be
in writing and provided in accordance with the terms of the Security Agreement.

      6.3. Amendment  Provision.  The term "Note" and all reference thereto,  as
used  throughout  this  instrument,  shall mean this  instrument  as  originally
executed,  or  if  later  amended  or  supplemented,   then  as  so  amended  or
supplemented, and any successor instrument as it may be amended or supplemented.

      6.4. Assignability.  This Note shall be binding upon each Borrower and its
successors  and  assigns,  and shall  inure to the benefit of the Holder and its
successors and assigns, and may be assigned by the Holder in accordance with the
requirements of the Security Agreement.

                                       9
<PAGE>

      6.5. Cost of  Collection.  If default is made in the payment of this Note,
each Borrower shall jointly and severally pay the Holder hereof reasonable costs
of collection, including reasonable attorneys' fees.

      6.6.  Governing  Law.  This Note shall be  governed  by and  construed  in
accordance with the laws of the State of New York,  without regard to principles
of  conflicts  of laws.  Any action  brought by either  party  against the other
concerning the transactions contemplated by this Agreement shall be brought only
in the state courts of New York or in the federal courts located in the state of
New York.  Each party hereto and the  individual  signing this Note on behalf of
each Borrower agree to submit to the jurisdiction of such courts. The prevailing
party  shall  be  entitled  to  recover  from the  other  party  its  reasonable
attorney's  fees and  costs.  In the event  that any  provision  of this Note is
invalid or unenforceable  under any applicable statute or rule of law, then such
provision  shall  be  deemed  inoperative  to the  extent  that it may  conflict
therewith  and shall be deemed  modified to conform with such statute or rule of
law. Any such provision which may prove invalid or  unenforceable  under any law
shall not affect the validity or unenforceability of any other provision of this
Note. Nothing contained herein shall be deemed or operate to preclude the Holder
from  bringing  suit or taking  other legal  action  against any Borrower in any
other  jurisdiction  to collect on such  Borrower's  obligations  to Holder,  to
realize on any  collateral  or any other  security for such  obligations,  or to
enforce a judgment or other court order in favor of Holder.

      6.7.  Maximum  Payments.  Nothing  contained  herein  shall be  deemed  to
establish  or require  the  payment of a rate of  interest  or other  charges in
excess of the maximum permitted by applicable law. In the event that the rate of
interest  required  to be paid or other  charges  hereunder  exceed the  maximum
permitted by such law, any payments in excess of such maximum  shall be credited
against  amounts  owed by  Borrowers  to the  Holder  and thus  refunded  to the
Borrowers

      6.8. Security Interest. The Holder has been granted a security interest in
certain  assets  of the  Borrowers  as  more  fully  described  in the  Security
Agreement.

      6.9.  Construction.   Each  party  acknowledges  that  its  legal  counsel
participated in the preparation of this Note and, therefore, stipulates that the
rule of construction  that  ambiguities are to be resolved  against the drafting
party shall not be applied in the interpretation of this Note to favor any party
against the other.

       [Balance of page intentionally left blank; signature page follows.]

                                       10
<PAGE>

      IN WITNESS WHEREOF, each Borrower has caused this Secured Convertible Term
Note to be signed in its name effective as of this 28 day of February, 2005.

                                     THOMAS EQUIPMENT, INC.

                                     By: /s/ DAVID MARKS
                                         ------------------
                                         Name:  David Marks
                                         Title: Chairman

WITNESS:

-------------------------------

                                     THOMAS VENTURES, INC.

                                     By:/s/ DAVID MARKS
                                         ------------------
                                         Name:  David Marks
                                         Title: Chairman

WITNESS:

-------------------------------

                                       11
<PAGE>

                                    EXHIBIT A

                              NOTICE OF CONVERSION

    (To be executed by the Holder in order to convert all or part of the Note
                               into Common Stock)

[Name and Address of Holder]

The  undersigned  hereby  converts  $_________  of the principal due on [specify
applicable  Amortization Date] under the Secured Convertible Term Note issued by
Thomas Equipment,  Inc. ("Thomas Equipment") and Thomas Ventures,  Inc. dated as
of February 28, 2005 by delivery of shares of Common  Stock of Thomas  Equipment
on and subject to the conditions set forth in Article III of such Note.

1.    Date of Conversion _______________________

2.    Shares To Be Delivered: _______________________

                                     -------------------------------------

                                     By:
                                        ----------------------------------------
                                     Name:
                                          --------------------------------------
                                     Title:
                                           -------------------------------------

<PAGE>

                                    EXHIBIT B

                                CONVERSION NOTICE

       (To be executed by the Holder in order to convert all or part of a
                        Monthly Amount into Common Stock)

[Name and Address of Holder]

The undersigned hereby converts $_________ of the Monthly Amount due on [specify
applicable  Amortization Date] under the Secured Convertible Term Note issued by
Thomas Equipment,  Inc. ("Thomas Equipment") and Thomas Ventures,  Inc. dated as
of February 28, 2005 by delivery of shares of Common  Stock of Thomas  Equipment
on and subject to the conditions set forth in Article III of such Note.

1.    Fixed Conversion Price: $_______________________

2.    Amount to be paid: $_______________________

3.    Shares To Be Delivered (2 divided by 1): __________________

4.    Cash payment to be made by Borrowers: $_____________________

Date: ____________                   -------------------------------------

                                     By:
                                        ----------------------------------------
                                     Name:
                                          --------------------------------------
                                     Title:
                                           -------------------------------------THIS WARRANT AND THE SHARES OF COMMON STOCK  ISSUABLE  UPON EXERCISE
            OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
            1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. THIS WARRANT AND THE
            COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT BE SOLD,
            OFFERED  FOR SALE,  PLEDGED  OR  HYPOTHECATED  IN THE  ABSENCE OF AN
            EFFECTIVE  REGISTRATION  STATEMENT AS TO THIS WARRANT UNDER SAID ACT
            AND ANY APPLICABLE  STATE  SECURITIES  LAWS OR AN OPINION OF COUNSEL
            REASONABLY   SATISFACTORY  TO  THOMAS  EQUIPMENT,   INC.  THAT  SUCH
            REGISTRATION IS NOT REQUIRED.

            Right to Purchase up to 150,000 Shares of Common Stock of
                             Thomas Equipment, Inc.
                   (subject to adjustment as provided herein)

                          COMMON STOCK PURCHASE WARRANT

No. L-3                                            Issue Date: February 28, 2005

      THOMAS  EQUIPMENT,  INC., a  corporation  organized  under the laws of the
State of Delaware ("Company"), hereby certifies that, for value received, LAURUS
MASTER FUND, LTD., or assigns (the "Holder"), is entitled,  subject to the terms
set forth below, to purchase from the Company (as defined herein) from and after
the Issue Date of this  Warrant and at any time or from time to time before 5:00
p.m.,  New York time,  through  the close of  business  February  28,  2012 (the
"Expiration Date"), up to 150,000 fully paid and nonassessable  shares of Common
Stock (as  hereinafter  defined),  $0.01 par value per share,  at the applicable
Exercise  Price per share (as defined  below).  The number and character of such
shares of Common Stock and the  applicable  Exercise Price per share are subject
to adjustment as provided herein.

      As used herein the following terms, unless the context otherwise requires,
have the following respective meanings:

            (a) The term "Company" shall include Thomas  Equipment,  Inc. (f/k/a
      Maxim Mortgage  Corporation) and any corporation  which shall succeed,  or
      assume the obligations of, Thomas Equipment, Inc. hereunder.

            (b) The term "Common Stock" includes (i) the Company's Common Stock,
      par value $0.01 per share; and (ii) any other securities into which or for
      which any of the securities described in (a) may be converted or exchanged
      pursuant to a plan of  recapitalization,  reorganization,  merger, sale of
      assets or otherwise.

<PAGE>

            (c) The term  "Other  Securities"  refers to any stock  (other  than
      Common  Stock) and other  securities  of the  Company or any other  person
      (corporate or otherwise) which the holder of the Warrant at any time shall
      be entitled to receive,  or shall have  received,  on the  exercise of the
      Warrant,  in lieu of or in addition to Common Stock,  or which at any time
      shall  be  issuable  or shall  have  been  issued  in  exchange  for or in
      replacement of Common Stock or Other  Securities  pursuant to Section 4 or
      otherwise.

            (d) The "Exercise  Price"  applicable  under this Warrant shall be a
      price of $2.25.

            (e) The term "Security  Agreement"  refers to that certain  Security
      and Purchase  Agreement dated as of November 9, 2004 among the Holder, the
      Company and Thomas Ventures,  Inc., as amended,  modified and supplemented
      from time to time, including, without limitation, pursuant to that certain
      Amendment Agreement dated as of the date hereof.

      1. Exercise of Warrant.

            1.1 Number of Shares Issuable upon Exercise. From and after the date
hereof through and including the  Expiration  Date, the Holder shall be entitled
to receive, upon exercise of this Warrant in whole or in part, by delivery of an
original  or fax copy of an  exercise  notice  in the form  attached  hereto  as
Exhibit  A (the  "Exercise  Notice"),  shares of  Common  Stock of the  Company,
subject to adjustment pursuant to Section 4. Notwithstanding  anything contained
herein to the contrary, the Holder shall not be entitled to exercise pursuant to
the terms of this Warrant an amount that would be  convertible  into that number
of shares of Common Stock which would exceed the  difference  between the number
of shares of Common  Stock  beneficially  owned by such Holder or issuable  upon
exercise of the option held by such Holder and 9.99% of the  outstanding  shares
of Common Stock of the Company.  For the purposes of the  immediately  preceding
sentence,  beneficial  ownership  shall be determined in accordance with Section
13(d) of the  Exchange  Act and  Regulation  13d-3  thereunder.  The  limitation
described in this Section 1.1 shall  automatically  become null and void without
any notice to the Company upon the occurrence and during the continuance  beyond
any applicable  grace period of an Event of Default under and as defined in that
certain  Security and Purchase  Agreement  dated as of the date hereof among the
Holder,  the Company and Thomas Ventures,  Inc., or upon 65 days prior notice to
the Company.

            1.2 Fair Market Value. For purposes hereof,  the "Fair Market Value"
of a share of Common Stock as of a particular  date (the  "Determination  Date")
shall mean:

            (a) If the  Company's  Common Stock is traded on the American  Stock
      Exchange  or another  national  exchange  or is quoted on the  National or
      SmallCap  Market of The  Nasdaq  Stock  Market,  Inc.("Nasdaq"),  then the
      closing or last sale price,  respectively,  reported for the last business
      day immediately preceding the Determination Date.

                                       2
<PAGE>

            (b) If the  Company's  Common  Stock is not  traded on the  American
      Stock Exchange or another national exchange or on the Nasdaq but is traded
      on the NASD OTC  Bulletin  Board,  then  the  mean of the  average  of the
      closing  bid  and  asked  prices   reported  for  the  last  business  day
      immediately preceding the Determination Date.

            (c) Except as provided in clause (d) below, if the Company's  Common
      Stock is not publicly traded,  then as the Holder and the Company agree or
      in the absence of agreement by  arbitration  in accordance  with the rules
      then in effect of the American  Arbitration  Association,  before a single
      arbitrator to be chosen from a panel of persons qualified by education and
      training to pass on the matter to be decided.

            (d)  If  the  Determination  Date  is  the  date  of a  liquidation,
      dissolution  or  winding  up,  or any event  deemed  to be a  liquidation,
      dissolution  or winding up pursuant  to the  Company's  charter,  then all
      amounts to be payable per share to holders of the Common Stock pursuant to
      the charter in the event of such  liquidation,  dissolution or winding up,
      plus all other  amounts to be  payable  per share in respect of the Common
      Stock in liquidation under the charter,  assuming for the purposes of this
      clause  (d) that all of the  shares of Common  Stock  then  issuable  upon
      exercise of the Warrant are outstanding at the Determination Date.

            1.3 Company  Acknowledgment.  The Company  will,  at the time of the
exercise of the Warrant,  upon the request of the holder hereof  acknowledge  in
writing its  continuing  obligation to afford to such holder any rights to which
such holder shall continue to be entitled after such exercise in accordance with
the  provisions  of this  Warrant.  If the  holder  shall  fail to make any such
request,  such failure shall not affect the continuing obligation of the Company
to afford to such holder any such rights.

            1.4 Trustee for Warrant  Holders.  In the event that a bank or trust
company  shall have been  appointed  as trustee  for the  holders of the Warrant
pursuant to Subsection 3.2, such bank or trust company shall have all the powers
and duties of a warrant agent (as  hereinafter  described) and shall accept,  in
its own name for the account of the Company or such  successor  person as may be
entitled  thereto,  all  amounts  otherwise  payable  to  the  Company  or  such
successor,  as the case may be, on  exercise  of this  Warrant  pursuant to this
Section 1.

      2. Procedure for Exercise.

            2.1 Delivery of Stock Certificates,  Etc., on Exercise.  The Company
agrees that the shares of Common Stock  purchased  upon exercise of this Warrant
shall be deemed to be issued to the Holder as the record owner of such shares as
of the close of  business  on the date on which  this  Warrant  shall  have been
surrendered and payment made for such shares in accordance herewith.  As soon as
practicable  after the exercise of this  Warrant in full or in part,  and in any
event  within  three (3) business  days  thereafter,  the Company at its expense
(including  the payment by it of any  applicable  issue  taxes) will cause to be
issued in the name of and  delivered  to the  Holder,  or as such  Holder  (upon
payment  by  such  Holder  of any  applicable  transfer  taxes)  may  direct  in
compliance with applicable  securities  laws, a certificate or certificates  for
the number of duly and validly issued,  fully paid and  nonassessable  shares of
Common  Stock (or Other  Securities)  to which such Holder  shall be entitled on
such exercise,  plus, in lieu of any fractional share to which such holder would
otherwise be entitled,  cash equal to such fraction  multiplied by the then Fair
Market  Value  of one  full  share,  together  with  any  other  stock  or other
securities and property  (including cash, where applicable) to which such Holder
is entitled upon such exercise pursuant to Section 1 or otherwise.

                                       3
<PAGE>

            2.2 Exercise.

            (a) Subject to subsection  (b) below,  payment shall be made in cash
      or by certified or official bank check payable to the order of the Company
      equal to the applicable  aggregate Exercise Price for the number of Common
      Shares specified in such Exercise Notice (as such exercise number shall be
      adjusted to reflect any adjustment in the total number of shares of Common
      Stock issuable to the Holder per the terms of this Warrant) and the Holder
      shall  thereupon  be entitled  to receive  the number of duly  authorized,
      validly issued,  fully-paid and non-assessable  shares of Common Stock (or
      Other Securities) determined as provided herein.

            (b)  Notwithstanding  any provisions herein to the contrary,  in the
      event there is no  effective  registration  statement  with respect to the
      shares  issuable upon exercise of this Warrant or a Default or an Event of
      Default (as such terms are defined in the Security Agreement) has occurred
      and is  continuing,  if the Fair Market Value of one share of Common Stock
      is greater  than the  Exercise  Price (at the date of  calculation  as set
      forth below),  in lieu of exercising this Warrant for cash, the Holder may
      elect to receive shares equal to the value (as  determined  below) of this
      Warrant (or the portion  thereof  being  exercised)  by  surrender of this
      Warrant at the principal  office of the Company together with the properly
      endorsed  Exercise  Notice in which event the  Company  shall issue to the
      Holder a number of shares of Common  Stock  computed  using the  following
      formula:

      X=Y       (A-B)
               -------
                  A

      Where X =   the number of shares of Common Stock to be issued to the
                  Holder

      Y =         the number of shares of Common Stock purchasable under
                  the Warrant or, if only a portion of the Warrant is
                  being exercised, the portion of the Warrant being
                  exercised (at the date of such calculation)

      A =         the Fair Market Value of one share of the Company's
                  Common Stock (at the date of such calculation)

      B =         Exercise Price (as adjusted to the date of such calculation)

                                       4
<PAGE>

      3. Effect of Reorganization, Etc.; Adjustment of Exercise Price.

            3.1 Reorganization,  Consolidation, Merger, Etc. In case at any time
or from  time to time,  the  Company  shall  (a)  effect a  reorganization,  (b)
consolidate  with or  merge  into  any  other  person,  or (c)  transfer  all or
substantially all of its properties or assets to any other person under any plan
or arrangement  contemplating the dissolution of the Company, then, in each such
case,  as a condition  to the  consummation  of such a  transaction,  proper and
adequate  provision  shall be made by the  Company  whereby  the  Holder of this
Warrant,  on the exercise  hereof as provided in Section 1 at any time after the
consummation of such  reorganization,  consolidation  or merger or the effective
date of such  dissolution,  as the case may be,  shall  receive,  in lieu of the
Common  Stock (or Other  Securities)  issuable  on such  exercise  prior to such
consummation or such effective date, the stock and other securities and property
(including  cash) to which  such  Holder  would  have  been  entitled  upon such
consummation or in connection with such dissolution, as the case may be, if such
Holder had so exercised this Warrant,  immediately prior thereto, all subject to
further adjustment thereafter as provided in Section 4.

            3.2  Dissolution.  In the event of any  dissolution  of the  Company
following the transfer of all or substantially  all of its properties or assets,
the Company,  concurrently with any distributions  made to holders of its Common
Stock,  shall at its expense  deliver or cause to be delivered to the Holder the
stock and other  securities  and property  (including  cash,  where  applicable)
receivable  by the Holder of the  Warrant  pursuant to Section  3.1,  or, if the
Holder shall so instruct the Company,  to a bank or trust  company  specified by
the Holder and having its  principal  office in New York,  NY as trustee for the
Holder of the Warrant (the "Trustee").

            3.3 Continuation of Terms. Upon any  reorganization,  consolidation,
merger or transfer (and any dissolution  following any transfer)  referred to in
this  Section 3, this  Warrant  shall  continue in full force and effect and the
terms hereof shall be applicable to the shares of stock and other securities and
property  receivable on the exercise of this Warrant after the  consummation  of
such   reorganization,   consolidation  or  merger  or  the  effective  date  of
dissolution  following  any such  transfer,  as the case  may be,  and  shall be
binding upon the issuer of any such stock or other securities, including, in the
case of any such transfer,  the person acquiring all or substantially all of the
properties  or assets of the  Company,  whether  or not such  person  shall have
expressly  assumed  the terms of this  Warrant as  provided in Section 4. In the
event  this  Warrant  does not  continue  in full  force  and  effect  after the
consummation of the transactions described in this Section 3, then the Company's
securities and property  (including  cash, where  applicable)  receivable by the
Holders  of  the  Warrant  will  be  delivered  to  Holder  or  the  Trustee  as
contemplated by Section 3.2.

      4.  Extraordinary  Events  Regarding  Common Stock.  In the event that the
Company shall (a) issue  additional  shares of the Common Stock as a dividend or
other  distribution on outstanding  Common Stock,  (b) subdivide its outstanding
shares of Common  Stock,  or (c)  combine its  outstanding  shares of the Common
Stock into a smaller  number of shares of the Common  Stock,  then, in each such
event,  the Exercise  Price  shall,  simultaneously  with the  happening of such
event,  be adjusted by multiplying  the then Exercise  Price by a fraction,  the
numerator  of which  shall be the number of shares of Common  Stock  outstanding
immediately prior to such event and the denominator of which shall be the number
of shares of Common  Stock  outstanding  immediately  after such event,  and the
product so obtained shall  thereafter be the Exercise Price then in effect.  The
Exercise Price, as so adjusted,  shall be readjusted in the same manner upon the
happening of any successive  event or events described herein in this Section 4.
The  number of shares of Common  Stock  that the  holder of this  Warrant  shall
thereafter,  on the  exercise  hereof as  provided  in Section 1, be entitled to
receive shall be increased to a number  determined by multiplying  the number of
shares of Common  Stock that would  otherwise  (but for the  provisions  of this
Section 4) be issuable on such exercise by a fraction of which (a) the numerator
is the  Exercise  Price that would  otherwise  (but for the  provisions  of this
Section 4) be in effect, and (b) the denominator is the Exercise Price in effect
on the date of such exercise.

                                       5
<PAGE>

      5.  Certificate  as to  Adjustments.  In each  case of any  adjustment  or
readjustment in the shares of Common Stock (or Other Securities) issuable on the
exercise of the  Warrant,  the Company at its expense  will  promptly  cause its
Chief Financial Officer or other appropriate designee to compute such adjustment
or  readjustment  in  accordance  with the terms of the  Warrant  and  prepare a
certificate  setting forth such adjustment or readjustment and showing in detail
the facts upon which such  adjustment  or  readjustment  is based,  including  a
statement of (a) the consideration received or receivable by the Company for any
additional shares of Common Stock (or Other Securities) issued or sold or deemed
to have been issued or sold,  (b) the number of shares of Common Stock (or Other
Securities) outstanding or deemed to be outstanding,  and (c) the Exercise Price
and the number of shares of Common  Stock to be received  upon  exercise of this
Warrant,  in effect  immediately prior to such adjustment or readjustment and as
adjusted or readjusted as provided in this Warrant.  The Company will  forthwith
mail a copy of each  such  certificate  to the  holder  of the  Warrant  and any
Warrant agent of the Company (appointed pursuant to Section 10 hereof).

      6.  Reservation  of Stock,  Etc.,  Issuable on  Exercise  of Warrant.  The
Company will at all times  reserve and keep  available,  solely for issuance and
delivery  on the  exercise  of the  Warrant,  shares of  Common  Stock (or Other
Securities) from time to time issuable on the exercise of the Warrant.

      7. Assignment;  Exchange of Warrant. Subject to compliance with applicable
securities  laws,  this  Warrant,  and  the  rights  evidenced  hereby,  may  be
transferred  by any  registered  holder hereof (a  "Transferor")  in whole or in
part.  On the  surrender  for exchange of this  Warrant,  with the  Transferor's
endorsement  in  the  form  of  Exhibit  B  attached  hereto  (the   "Transferor
Endorsement  Form") and together with evidence  reasonably  satisfactory  to the
Company  demonstrating  compliance with applicable  securities laws, which shall
include,  without  limitation,  the  provision  of  a  legal  opinion  from  the
Transferor's  counsel (at the  Company's  expense)  that such transfer is exempt
from the  registration  requirements  of applicable  securities  laws,  and with
payment by the  Transferor  of any  applicable  transfer  taxes)  will issue and
deliver  to or on the  order of the  Transferor  thereof a new  Warrant  of like
tenor, in the name of the Transferor and/or the transferee(s)  specified in such
Transferor  Endorsement Form (each a "Transferee"),  calling in the aggregate on
the face or faces thereof for the number of shares of Common Stock called for on
the  face  or  faces  of  the  Warrant  so  surrendered  by the  Transferor.

                                       6
<PAGE>

      8. Replacement of Warrant. On receipt of evidence reasonably  satisfactory
to the Company of the loss,  theft,  destruction  or  mutilation of this Warrant
and, in the case of any such loss,  theft or  destruction  of this  Warrant,  on
delivery of an indemnity agreement or security  reasonably  satisfactory in form
and amount to the Company or, in the case of any such  mutilation,  on surrender
and  cancellation  of this Warrant,  the Company at its expense will execute and
deliver, in lieu thereof, a new Warrant of like tenor.

      9.  Registration  Rights.  The  Holder of this  Warrant  has been  granted
certain  registration  rights by the Company.  These registration rights are set
forth  in a  Registration  Rights  Agreement  entered  into by the  Company  and
Purchaser  dated as of November 9, 2004, as amended,  modified and  supplemented
from time to time.

      10. Warrant  Agent.  The Company may, by written notice to the each Holder
of the  Warrant,  appoint an agent for the purpose of issuing  Common  Stock (or
Other  Securities)  on the  exercise  of this  Warrant  pursuant  to  Section 1,
exchanging  this  Warrant  pursuant  to Section 7, and  replacing  this  Warrant
pursuant  to  Section  8,  or any of the  foregoing,  and  thereafter  any  such
issuance,  exchange or  replacement,  as the case may be,  shall be made at such
office by such agent.

      11. Transfer on the Company's Books.  Until this Warrant is transferred on
the books of the Company,  the Company may treat the registered holder hereof as
the absolute  owner hereof for all purposes,  notwithstanding  any notice to the
contrary.

      12. Notices, Etc. All notices and other communications from the Company to
the  Holder  of this  Warrant  shall be  mailed  by first  class  registered  or
certified mail,  postage prepaid,  at such address as may have been furnished to
the Company in writing by such Holder or, until any such Holder furnishes to the
Company an  address,  then to, and at the  address  of, the last  Holder of this
Warrant who has so furnished an address to the Company.

                                       7
<PAGE>

      13.  Miscellaneous.  This  Warrant  and any term  hereof  may be  changed,
waived,  discharged or terminated only by an instrument in writing signed by the
party against which enforcement of such change, waiver, discharge or termination
is sought.  This Warrant shall be governed by and  construed in accordance  with
the laws of State of New York without regard to principles of conflicts of laws.
Any action brought  concerning  the  transactions  contemplated  by this Warrant
shall be brought only in the state  courts of New York or in the federal  courts
located in the state of New York; provided,  however, that the Holder may choose
to waive this  provision and bring an action  outside the state of New York. The
individuals  executing  this Warrant on behalf of the Company agree to submit to
the  jurisdiction  of such courts and waive trial by jury. The prevailing  party
shall be entitled to recover from the other party its reasonable attorney's fees
and  costs.  In the event  that any  provision  of this  Warrant  is  invalid or
unenforceable  under any applicable  statute or rule of law, then such provision
shall be deemed  inoperative  to the extent that it may conflict  therewith  and
shall be deemed  modified to conform  with such statute or rule of law. Any such
provision  which  may prove  invalid  or  unenforceable  under any law shall not
affect the validity or  enforceability  of any other  provision of this Warrant.
The headings in this Warrant are for purposes of reference  only,  and shall not
limit  or  otherwise  affect  any  of  the  terms  hereof.   The  invalidity  or
unenforceability  of any provision hereof shall in no way affect the validity or
enforceability  of any other provision  hereof.  The Company  acknowledges  that
legal counsel  participated in the  preparation of this Warrant and,  therefore,
stipulates  that the rule of  construction  that  ambiguities are to be resolved
against the drafting  party shall not be applied in the  interpretation  of this
Warrant to favor any party against the other party.

                   [BALANCE OF PAGE INTENTIONALLY LEFT BLANK;
                            SIGNATURE PAGE FOLLOWS.]

                                       8
<PAGE>

      IN WITNESS  WHEREOF,  the Company has executed this Warrant as of the date
first written above.

                                     THOMAS EQUIPMENT, INC.

WITNESS:
                                     By:     /s/ DAVID MARKS
                                             ---------------
                                     Name:   David Marks
-------------------------------      Title:  Chairman

                                       9
<PAGE>

                                    EXHIBIT A

                              FORM OF SUBSCRIPTION
                   (To Be Signed Only On Exercise Of Warrant)

TO:   Thomas Equipment, Inc.

      Attention:   Chief Financial Officer

      The  undersigned,  pursuant to the  provisions  set forth in the  attached
Warrant (No. L-3), hereby irrevocably elects to purchase (check applicable box):

________      ________ shares of the Common Stock covered by such Warrant; or

________      the maximum number of shares of Common Stock covered by such
              Warrant pursuant to the cashless exercise procedure set forth
              in Section 2.

      The undersigned herewith makes payment of the full Exercise Price for such
shares  at  the  price  per  share  provided  for  in  such  Warrant,  which  is
$___________. Such payment takes the form of (check applicable box or boxes):

________    $__________ in lawful money of the United States; and/or

________    the cancellation of such portion of the attached Warrant as is
            exercisable  for a total of  _______  shares of  Common  Stock
            (using a Fair Market  Value of $_______ per share for purposes
            of this calculation); and/or

________    the  cancellation  of such number of shares of Common Stock as
            is  necessary,  in  accordance  with the  formula set forth in
            Section  2.2, to exercise  this  Warrant  with  respect to the
            maximum number of shares of Common Stock purchasable  pursuant
            to the cashless exercise procedure set forth in Section 2.

      The undersigned  requests that the  certificates for such shares be issued
in the name of, and delivered to _____________________________ whose address is
____________________________________________________________.

      The  undersigned  represents and warrants that all offers and sales by the
undersigned of the securities issuable upon exercise of the within Warrant shall
be made pursuant to registration of the Common Stock under the Securities Act of
1933,  as amended  (the  "Securities  Act") or  pursuant  to an  exemption  from
registration under the Securities Act.

Dated:
       ------------------------       ------------------------------------------
                                      (Signature  must conform to name of holder
                                      as specified on the face of the Warrant)

                                      Address:
                                               ---------------------------------

                                               ---------------------------------

<PAGE>

                                    EXHIBIT B

                         FORM OF TRANSFEROR ENDORSEMENT
                   (To Be Signed Only On Transfer Of Warrant)

      For value received,  the undersigned hereby sells,  assigns, and transfers
unto the  person(s)  named  below  under  the  heading  "Transferees"  the right
represented  by the within  Warrant to  purchase  the  percentage  and number of
shares of Common Stock of Thomas  Equipment,  Inc. into which the within Warrant
relates  specified  under the  headings  "Percentage  Transferred"  and  "Number
Transferred," respectively,  opposite the name(s) of such person(s) and appoints
each such  person  Attorney  to transfer  its  respective  right on the books of
Thomas Equipment, Inc. with full power of substitution in the premises.

                                                 Percentage          Number
Transferees              Address                 Transferred        Transferred

-------------------      ------------------     ------------       ------------

-------------------      ------------------     ------------       ------------

-------------------      ------------------     ------------       ------------

-------------------      ------------------     ------------       ------------

Dated
       ------------------------       ------------------------------------------
                                      (Signature must conform to name of holder
                                      as specified on the face of the Warrant)

                                      Address:
                                               ---------------------------------

                                               ---------------------------------

                                      SIGNED IN THE PRESENCE OF:

                                      ------------------------------------------
                                                         (Name)

ACCEPTED AND AGREED:
[TRANSFEREE]

-------------------------------
              (Name)

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00079-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00079-of-00352.parquet"}]]