Document:

SECURED 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 Eight Million Five Hundred  Thousand Dollars  ($8,500,000),
together  with any  accrued  and unpaid  interest  hereon,  on May 12, 2009 (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 by that certain
letter  agreement dated as of the date hereof by and among the Borrowers and the
Holder and as otherwise heretofore or hereafter amended, modified,  restated and
supplemented from time to time, the "Security Agreement").

The following terms shall apply to this Note:

                                   ARTICLE I
                              INTEREST & REDEMPTION

      1.1.  Interest  Rate.  Subject to Sections  2.9 and 4.7  hereof,  interest
payable  on the  outstanding  principal  amount  of this  Note  (the  "Principal
Amount")  shall  accrue at a rate per annum  equal to the sum of (i) the  "prime
rate" published in The Wall Street Journal from time to time (the "Prime Rate"),
plus three percent (3%) (the "Cash Contract Rate"),  plus (ii) five percent (5%)
(the "PIK  Contract  Rate") (the sum of (i) and (ii) shall be referred to as the
"Contract Rate").  The Cash Contract 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 the Prime Rate.  The Cash Contract Rate shall not at
any time be less than ten percent (10%). Interest shall be (i) calculated on the
basis of a 360 day year,  and (ii) payable  monthly,  in arrears,  commencing on
June 1, 2006 and on the first  Business Day of each  consecutive  calendar month
thereafter  through and including the Maturity Date,  whether by acceleration or
otherwise  (each date upon which  interest  shall be so  payable,  an  "Interest
Payment  Date").  Through any Interest  Payment Date,  interest on the Principal
Amount that shall have accrued at the Cash Contract Rate and shall remain unpaid
as of such  Interest  Payment  Date  (for any  Interest  Payment  Date,  a "Cash
Interest  Amount") shall be paid in immediately  available funds by Borrowers to
the Holder on such  Interest  Payment Date.  Through any Interest  Payment Date,
interest on the  Principal  Amount that shall have  accrued at the PIK  Interest
Rate and shall remain unpaid as of such Interest  Payment Date (for any Interest
Payment  Date,  a "PIK  Interest  Amount")  shall  not be paid on such  Interest
Payment Date. All outstanding  PIK Interest  Amounts shall be due and payable on
the Maturity Date.  Notwithstanding any other provision of this Note,  Borrowers
may,  in their sole  discretion,  pay any PIK  Interest  Amount on any  Interest
Payment Date in immediately available funds without any premium or penalty.

<PAGE>

      1.2. Principal Payments. Amortizing payments of the Principal Amount shall
be made,  jointly and severally,  by the Borrowers on October 1, 2006 and on the
first business day of each succeeding month thereafter through and including the
Maturity  Date  (each,  an  "Amortization   Date").   Commencing  on  the  first
Amortization  Date, the Borrowers  shall,  jointly and  severally,  make monthly
payments to the Holder on each Repayment  Date,  each such payment in the amount
of $265,625  together with any accrued and unpaid Cash  Interest  Amount on such
portion of the Principal  Amount plus any and all other unpaid amounts which are
then owing under this Note, the Security  Agreement  and/or any other  Ancillary
Agreement (collectively, the "Monthly Amount"). Any outstanding Principal Amount
together  with any  accrued and unpaid Cash  Interest  Amounts and PIK  Interest
Amounts  and any and all  other  unpaid  amounts  which  are  then  owing by the
Borrowers to the Holder under this Note, the Security Agreement and/or any other
Ancillary Agreement shall be due and payable on the Maturity Date.

      1.3.  Optional  Redemption.  The Borrowers may prepay this Note ("Optional
Redemption")  by paying to the Holder a sum of money a sum of money equal to one
hundred and five percent  (105%) of the  principal  amount of this Note together
with accrued but unpaid Cash Interest  Amounts and PIK Interest  Amounts and any
and all other sums due,  accrued or  payable  to the Holder  arising  under this
Note,  the  Security  Agreement  and/or  any  other  Ancillary   Agreement  (the
"Redemption Amount"),  in each case,  outstanding on the Redemption Payment Date
(as  defined  below).  Thomas  Equipment  shall  deliver to the Holder a written
notice of redemption (the "Notice of  Redemption")  specifying the date for such
Optional Redemption (the "Redemption  Payment Date"),  which date shall be seven
(7) Business Days after the date of the Notice of Redemption.  On the Redemption
Payment Date, the Redemption Amount must be paid in good funds to the Holder. In
the event the  Borrowers  fail to pay the  Redemption  Amount on the  Redemption
Payment Date as set forth herein,  then such Notice of  Redemption  will be null
and void.

                                   ARTICLE II
                               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":

      2.1. 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.

                                       2

<PAGE>

      2.2. 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.

      2.3. 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.

      2.4.  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.

      2.5. 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.

      2.6.  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.

      2.7. 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.

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

                           DEFAULT RELATED PROVISIONS

      2.9.  Default  Interest  Rate.  Following  the  occurrence  and during the
continuance  of an Event of Default,  the Contract Rate 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.

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

                                       3

<PAGE>

                                  ARTICLE III
                                DEFAULT PAYMENTS

      3.1.  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.

      3.2.  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 3.1.

                                   ARTICLE IV
                                  MISCELLANEOUS

      4.1. 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.

      4.2. 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.

      4.3. 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.

      4.4. 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.

      4.5. 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.

      4.6.  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.

                                       4

<PAGE>

      4.7.  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

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

      4.9.  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.

      4.10.  Registered  Obligation.  This Note is intended  to be a  registered
obligation within the meaning of Treasury  Regulation Section  1.871-14(c)(1)(i)
and the Borrowers (or its agent) shall register the Note (and  thereafter  shall
maintain  such  registration)  as to both  principal  and any  stated  interest.
Notwithstanding  any document,  instrument or agreement relating to this Note to
the  contrary,  transfer of this Note (or the right to any payments of principal
or stated  interest  thereunder)  may only be effected by (i)  surrender of this
Note and either the  reissuance  by the Borrowers of this Note to the new holder
or the issuance by the Borrowers of a new instrument to the new holder,  or (ii)
transfer through a book entry system maintained by the Borrowers (or its agent),
within the meaning of Treasury Regulation Section 1.871-14(c)(1)(i)(B).

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

                                       5

<PAGE>

      IN WITNESS WHEREOF,  each Borrower has caused this Secured Term Note to be
signed in its name effective as of this 12th day of May, 2006.

                                          THOMAS EQUIPMENT, INC.

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

                                          THOMAS VENTURES, INC.

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

                                       6THIS  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 1,416,667 Shares of Common Stock of
                             Thomas Equipment, Inc.
                             ----------------------
                   (subject to adjustment as provided herein)

                          COMMON STOCK PURCHASE WARRANT

No. L-4                                                 Issue Date: May 12, 2006

         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 May 12, 2013 (the "Expiration
Date"), up to 1,416,667 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 this Warrant at any
         time shall be  entitled  to  receive,  or shall have  received,  on the
         exercise of this 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 $3.00 per share.

                  (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 the Holder or  issuable  upon
exercise of the option held by the 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  this  Warrant  are   outstanding  at  the
         Determination  Date.

         1.3  Company  Acknowledgment.  The  Company  will,  at the  time of the
exercise of this Warrant,  upon the request of the Holder acknowledge in writing
its continuing obligation to afford to the Holder any rights to which the 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 the 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  Holder  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 the  Holder  (upon
payment by the 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 the Holder shall be entitled on such exercise,  plus,
in lieu of any fractional share to which the 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 the 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 this
                  Warrant  or,  if only a  portion  of  this  Warrant  is  being
                  exercised, the portion of this 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  the  Holder  would  have  been  entitled  upon  such
consummation or in connection with such dissolution,  as the case may be, if the
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 this  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 this 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
Holder  of this  Warrant  will be  delivered  to the  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 this  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 this  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 this  Warrant  and any
Warrant  agent of the  Company  (appointed  pursuant  to Section 9  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 this  Warrant,  shares of Common  Stock (or Other
Securities) from time to time issuable on the exercise of this 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 this 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. Warrant  Agent.  The Company may, by written notice to the Holder of
this 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.

         10. 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.

         11. 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 the  Holder  or,  until any 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.

         12.  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.]

                                       7
<PAGE>

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

                                        THOMAS EQUIPMENT, INC.

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

                                       8
<PAGE>

                                    EXHIBIT A

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

TO:      Thomas Equipment, Inc.
         1818 North Farwell Avenue
         Milwaukee, Wisconsin 53202
         Attention:        Chief Financial Officer

         The  undersigned,  pursuant to the provisions set forth in the attached
Warrant (No. L-4), 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:
                                                 --------------------
                                                 --------------------

                                       9
<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)

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