Document:

REGISTRATION
      RIGHTS AGREEMENT

     

    This
      Registration Rights Agreement (this “Agreement”) is made and entered into as of
      May 2, 2007, by and between Thomas Equipment, Inc., a Delaware corporation
      (the
“Company”), and Laurus Master Fund, Ltd. (“Laurus”).

     

    This
      Agreement is made in connection with the transactions contemplated by (a) a
      Secured Term Note, dated as of the date hereof, in the original principal amount
      of $4,000,000, made by the Company and Thomas Ventures, Inc., a Delaware
      corporation (“Thomas Ventures”), in favor of Laurus (“Term Note A”) and (b) a
      Secured Term Note, dated as of the date hereof, in the original principal amount
      of $2,000,000, made by the Company and Thomas Ventures, in favor of Laurus
      (“Term Note B” together with Term Note A, collectively, the “Note”)
      .

     

    The
      Company and Laurus hereby agree as follows:

     

    1. Definitions.
      Capitalized terms used and not otherwise defined herein that are defined in
      the
      Note shall have the meanings given such terms in the Note. As used in this
      Agreement, the following terms shall have the following meanings:

     

    “Commission”
      means
      the Securities and Exchange Commission.

     

    “Common
      Stock”
      means
      shares of the Company’s common stock, par value $0.01 per share.

     

    “Effectiveness
      Date”
      means,
      (i) with respect to the Registration Statement required to be filed in
      connection with the shares of Common Stock issuable upon exercise of the
      Warrants issued on the date hereof, December 24, 2007 and (ii) with respect
      to
      each additional Registration Statement required to be filed hereunder (if any),
      a date no later than thirty (30) days following the applicable Filing
      Date.

     

    “Effectiveness
      Period”
      has the
      meaning set forth in Section 2(a).

     

    “Exchange
      Act”
      means
      the Securities Exchange Act of 1934, as amended, and any successor
      statute.

     

    “Filing
      Date”
      means,
      with respect to (1) the Registration Statement required to be filed in
      connection with the shares of Common Stock issuable to the Holder upon exercise
      of a Warrant, October 24, 2007, and (2) the Registration Statement required
      to
      be filed in connection with the shares of Common Stock issuable to the Holder
      as
      a result of adjustments to the Exercise Price made pursuant to Section 4 of
      the
      Warrant or otherwise, thirty (30) days after the occurrence of such event or
      the
      date of the adjustment of the Exercise Price.

     

    “Holder”
      or
“Holders”
      means
      Laurus or any of its affiliates or transferees to the extent any of them hold
      Registrable Securities, other then those purchasing Registrable Securities
      in a
      market transaction.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    “Indemnified
      Party”
      has the
      meaning set forth in Section 5(c).

     

    “Indemnifying
      Party”
      has the
      meaning set forth in Section 5(c).

     

    “Proceeding”
      means an
      action, claim, suit, investigation or proceeding (including, without limitation,
      an investigation or partial proceeding, such as a deposition), whether commenced
      or threatened.

     

    “Prospectus”
      means
      the prospectus included in a Registration Statement (including, without
      limitation, a prospectus that includes any information previously omitted from
      a
      prospectus filed as part of an effective registration statement in reliance
      upon
      Rule 430A promulgated under the Securities Act), as amended or supplemented
      by
      any prospectus supplement, with respect to the terms of the offering of any
      portion of the Registrable Securities covered by such Registration Statement,
      and all other amendments and supplements to the Prospectus, including
      post-effective amendments, and all material incorporated by reference or deemed
      to be incorporated by reference in such Prospectus.

     

    “Registrable
      Securities”
      means
      the shares of Common Stock issuable upon exercise of the Warrants.

     

    “Registration
      Statement”
      means
      each registration statement required to be filed hereunder, including the
      Prospectus therein, amendments and supplements to such registration statement
      or
      Prospectus, including pre- and post-effective amendments, all exhibits thereto,
      and all material incorporated by reference or deemed to be incorporated by
      reference in such registration statement.

     

    “Rule
      144”
      means
      Rule 144 promulgated by the Commission pursuant to the Securities Act, as such
      Rule may be amended from time to time, or any similar rule or regulation
      hereafter adopted by the Commission having substantially the same effect as
      such
      Rule.

     

    “Rule
      415”
      means
      Rule 415 promulgated by the Commission pursuant to the Securities Act, as such
      Rule may be amended from time to time, or any similar rule or regulation
      hereafter adopted by the Commission having substantially the same effect as
      such
      Rule.

     

    “Securities
      Act”
      means
      the Securities Act of 1933, as amended, and any successor statute.

     

    “Trading
      Market”
      means
      any of the NASD Over The Counter Bulletin Board, NASDAQ Capital Market, the
      NASDAQ National Markets System, the American Stock Exchange or the New York
      Stock Exchange

     

    “Warrants”
      means
      the Common Stock purchase warrants issued in connection with the Note, whether
      on the date thereof or thereafter.

     

    2. Registration.

     

    (a) On
      or
      prior to each Filing Date, the Company shall prepare and file with the
      Commission a Registration Statement covering the Registrable Securities for
      a
      selling stockholder resale offering to be made on a continuous basis pursuant
      to
      Rule 415. Each Registration Statement shall be on Form S-3 (except if the
      Company is not then eligible to register for resale the Registrable Securities
      on Form S-3, in which case such registration shall be on another appropriate
      form in accordance herewith). The Company shall cause each Registration
      Statement to become effective and remain effective as provided herein. The
      Company shall use its best efforts to cause each Registration Statement to
      be
      declared effective under the Securities Act as promptly as possible after the
      filing thereof, but in any event no later than the Effectiveness Date. The
      Company shall use its reasonable commercial efforts to keep each Registration
      Statement continuously effective under the Securities Act until the date which
      is the earlier date of when (i) all Registrable Securities covered by such
      Registration Statement have been sold or (ii) all Registrable Securities covered
      by such Registration Statement may be sold immediately without registration
      under the Securities Act and without volume restrictions pursuant to Rule
      144(k), as determined by the counsel to the Company pursuant to a written
      opinion letter to such effect, addressed and acceptable to the Company’s
      transfer agent and the affected Holders (each, an “Effectiveness
      Period”).

     

    
      
        
        

      

      
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    (b) If:
      (i)
      the Registration Statement is not filed on or prior to the Filing Date; (ii)
      the
      Registration Statement is not declared effective by the Commission by the
      Effectiveness Date; (iii) after the Registration Statement is filed with and
      declared effective by the Commission, the Registration Statement ceases to
      be
      effective (by suspension or otherwise) as to all Registrable Securities to
      which
      it is required to relate at any time prior to the expiration of the
      Effectiveness Period (without being succeeded immediately by an additional
      registration statement filed and declared effective) for a period of time which
      shall exceed 30 days in the aggregate per year or more than 20 consecutive
      calendar days (defined as a period of 365 days commencing on the date the
      Registration Statement is declared effective); or (iv) the Common Stock is
      not
      listed or quoted, or is suspended from trading on any Trading Market for a
      period of three (3) consecutive Trading Days (provided the Company shall not
      have been able to cure such trading suspension within 30 days of the notice
      thereof or list the Common Stock on another Trading Market); (any such failure
      or breach being referred to as an “Event,” and for purposes of clause (i) or
      (ii) the date on which such Event occurs, or for purposes of clause (iii) the
      date which such 30 day or 20 consecutive day period (as the case may be) is
      exceeded, or for purposes of clause (iv) the date on which such three (3)
      Trading Day period is exceeded, being referred to as “Event Date”), then until
      the applicable Event is cured, the Company shall pay to each Holder an amount
      in
      cash, as liquidated damages and not as a penalty, equal to 1.0% for each thirty
      (30) day period (prorated for partial periods) on a daily basis of the original
      principal amount of the Note; provided that, the maximum aggregate amount of
      liquidated damages that may be charged to the Company pursuant to this Section
      2(b) shall not exceed 10% of the initial Principal Amount of the Note. While
      such Event continues, such liquidated damages shall be paid not less often
      than
      each thirty (30) days. Any unpaid liquidated damages as of the date when an
      Event has been cured by the Company shall be paid within three (3) days
      following the date on which such Event has been cured by the
      Company.

     

    (c) Within
      three business days of the Effectiveness Date, the Company shall cause its
      counsel to issue a blanket opinion in the form attached hereto as Exhibit A,
      to
      the transfer agent stating that the shares are subject to an effective
      registration statement and can be reissued free of restrictive legend upon
      notice of a sale by Laurus and confirmation by Laurus that it has complied
      with
      the prospectus delivery requirements, provided that the Company has not advised
      the transfer agent orally or in writing that the opinion has been withdrawn.
      Copies of the blanket opinion required by this Section 2(c) shall be delivered
      to Laurus within the time frame set forth above.

     

    
      
        
        

      

      
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    3. Registration
      Procedures.
      If and
      whenever the Company is required by the provisions hereof to effect the
      registration of any Registrable Securities under the Securities Act, the Company
      will, as expeditiously as possible:

     

    (a) prepare
      and file with the Commission a Registration Statement with respect to such
      Registrable Securities, respond as promptly as possible to any comments received
      from the Commission, and use its best efforts to cause such Registration
      Statement to become and remain effective for the Effectiveness Period with
      respect thereto, and promptly provide to Laurus copies of all filings and
      Commission letters of comment relating thereto;

     

    (b) prepare
      and file with the Commission such amendments and supplements to such
      Registration Statement and the Prospectus used in connection therewith as may
      be
      necessary to comply with the provisions of the Securities Act with respect
      to
      the disposition of all Registrable Securities covered by such Registration
      Statement and to keep such Registration Statement effective until the expiration
      of the Effectiveness Period applicable to such Registration
      Statement;

     

    (c) furnish
      to Laurus such number of copies of the Registration Statement and the Prospectus
      included therein (including each preliminary Prospectus) as Laurus reasonably
      may request to facilitate the public sale or disposition of the Registrable
      Securities covered by such Registration Statement;

     

    (d) use
      its
      best efforts to register or qualify Laurus’s Registrable Securities covered by
      such Registration Statement under the securities or “blue sky” laws of such
      jurisdictions within the United States as Laurus may reasonably request,
      provided, however, that the Company shall not for any such purpose be required
      to qualify generally to transact business as a foreign corporation in any
      jurisdiction where it is not so qualified or to consent to general service
      of
      process in any such jurisdiction;

     

    (e) list
      the
      Registrable Securities covered by such Registration Statement with any
      securities exchange on which the Common Stock of the Company is then
      listed;

     

    (f) immediately
      notify Laurus at any time when a Prospectus relating thereto is required to
      be
      delivered under the Securities Act, of the happening of any event of which
      the
      Company has knowledge as a result of which the Prospectus contained in such
      Registration Statement, as then in effect, includes an untrue statement of
      a
      material fact or omits to state a material fact required to be stated therein
      or
      necessary to make the statements therein not misleading in light of the
      circumstances then existing; and

     

    (g) make
      available for inspection by Laurus and any attorney, accountant or other agent
      retained by Laurus, all publicly available, non-confidential financial and
      other
      records, pertinent corporate documents and properties of the Company, and cause
      the Company’s officers, directors and employees to supply all publicly
      available, non-confidential information reasonably requested by the attorney,
      accountant or agent of Laurus.

     

    
      
        
        

      

      
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    4. Registration
      Expenses.
      All
      expenses relating to the Company’s compliance with Sections 2 and 3 hereof,
      including, without limitation, all registration and filing fees, printing
      expenses, fees and disbursements of counsel and independent public accountants
      for the Company, fees and expenses (including reasonable counsel fees) incurred
      in connection with complying with state securities or “blue sky” laws, fees of
      the NASD, transfer taxes, fees of transfer agents and registrars, fees of,
      and
      disbursements incurred by, one counsel for the Holders are called “Registration
      Expenses”. All selling commissions applicable to the sale of Registrable
      Securities, including any fees and disbursements of any special counsel to
      the
      Holders beyond those included in Registration Expenses, are called “Selling
      Expenses.” The Company shall only be responsible for all Registration
      Expenses.

     

    5. Indemnification.

     

    (a) In
      the
      event of a registration of any Registrable Securities under the Securities
      Act
      pursuant to this Agreement, the Company will indemnify and hold harmless each
      Holder, and its officers, directors and each other person, if any, who controls
      such Holder within the meaning of the Securities Act, against any losses,
      claims, damages or liabilities, joint or several, to which such Holder, or
      such
      persons may become subject under the Securities Act or otherwise, insofar as
      such losses, claims, damages or liabilities (or actions in respect thereof)
      arise out of or are based upon any untrue statement or alleged untrue statement
      of any material fact contained in any Registration Statement under which such
      Registrable Securities were registered under the Securities Act pursuant to
      this
      Agreement, any preliminary Prospectus or final Prospectus contained therein,
      or
      any amendment or supplement thereof, or arise out of or are based upon the
      omission or alleged omission to state therein a material fact required to be
      stated therein or necessary to make the statements therein not misleading,
      and
      will reimburse such Holder, and each such person for any reasonable legal or
      other expenses incurred by them in connection with investigating or defending
      any such loss, claim, damage, liability or action; provided,
      however,
      that
      the Company will not be liable in any such case if and to the extent that any
      such loss, claim, damage or liability arises out of or is based upon an untrue
      statement or alleged untrue statement or omission or alleged omission so made
      in
      conformity with information furnished by or on behalf of Laurus or any such
      person in writing specifically for use in any such document.

     

    (b) In
      the
      event of a registration of the Registrable Securities under the Securities
      Act
      pursuant to this Agreement, Laurus will indemnify and hold harmless the Company,
      and its officers, directors and each other person, if any, who controls the
      Company within the meaning of the Securities Act, against all losses, claims,
      damages or liabilities, joint or several, to which the Company or such persons
      may become subject under the Securities Act or otherwise, insofar as such
      losses, claims, damages or liabilities (or actions in respect thereof) arise
      out
      of or are based upon any untrue statement or alleged untrue statement of any
      material fact which was furnished in writing by Laurus to the Company expressly
      for use in (and such information is contained in) the Registration Statement
      under which such Registrable Securities were registered under the Securities
      Act
      pursuant to this Agreement, any preliminary Prospectus or final Prospectus
      contained therein, or any amendment or supplement thereof, or arise out of
      or
      are based upon the omission or alleged omission to state therein a material
      fact
      required to be stated therein or necessary to make the statements therein not
      misleading, and will reimburse the Company and each such person for any
      reasonable legal or other expenses incurred by them in connection with
      investigating or defending any such loss, claim, damage, liability or action,
      provided,
      however,
      that
      Laurus will be liable in any such case if and only to the extent that any such
      loss, claim, damage or liability arises out of or is based upon an untrue
      statement or alleged untrue statement or omission or alleged omission so made
      in
      conformity with information furnished in writing to the Company by or on behalf
      of Laurus specifically for use in any such document. Notwithstanding the
      provisions of this paragraph, Laurus shall not be required to indemnify any
      person or entity in excess of the amount of the aggregate net proceeds received
      by Laurus in respect of Registrable Securities in connection with any such
      registration under the Securities Act.

     

    
      
        
        

      

      
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    (c) Promptly
      after receipt by a party entitled to claim indemnification hereunder (an
“Indemnified Party”) of notice of the commencement of any action, such
      Indemnified Party shall, if a claim for indemnification in respect thereof
      is to
      be made against a party hereto obligated to indemnify such Indemnified Party
      (an
“Indemnifying Party”), notify the Indemnifying Party in writing thereof, but the
      omission so to notify the Indemnifying Party shall not relieve it from any
      liability which it may have to such Indemnified Party other than under this
      Section 5(c) and shall only relieve it from any liability which it may have
      to
      such Indemnified Party under this Section 5(c) if and to the extent the
      Indemnifying Party is prejudiced by such omission. In case any such action
      shall
      be brought against any Indemnified Party and it shall notify the Indemnifying
      Party of the commencement thereof, the Indemnifying Party shall be entitled
      to
      participate in and, to the extent it shall wish, to assume and undertake the
      defense thereof with counsel satisfactory to such Indemnified Party, and, after
      notice from the Indemnifying Party to such Indemnified Party of its election
      so
      to assume and undertake the defense thereof, the Indemnifying Party shall not
      be
      liable to such Indemnified Party under this Section 5(c) for any legal expenses
      subsequently incurred by such Indemnified Party in connection with the defense
      thereof; if the Indemnified Party retains its own counsel, then the Indemnified
      Party shall pay all fees, costs and expenses of such counsel, provided,
      however,
      that,
      if the defendants in any such action include both the Indemnified Party and
      the
      Indemnifying Party and the Indemnified Party shall have reasonably concluded
      that there may be reasonable defenses available to it which are different from
      or additional to those available to the Indemnifying Party or if the interests
      of the Indemnified Party reasonably may be deemed to conflict with the interests
      of the Indemnifying Party, the Indemnified Party shall have the right to select
      one separate counsel and to assume such legal defenses and otherwise to
      participate in the defense of such action, with the reasonable expenses and
      fees
      of such separate counsel and other expenses related to such participation to
      be
      reimbursed by the Indemnifying Party as incurred.

     

    (d) In
      order
      to provide for just and equitable contribution in the event of joint liability
      under the Securities Act in any case in which either (i) Laurus, or any officer,
      director or controlling person of Laurus, makes a claim for indemnification
      pursuant to this Section 5 but it is judicially determined (by the entry of
      a
      final judgment or decree by a court of competent jurisdiction and the expiration
      of time to appeal or the denial of the last right of appeal) that such
      indemnification may not be enforced in such case notwithstanding the fact that
      this Section 5 provides for indemnification in such case, or (ii) contribution
      under the Securities Act may be required on the part of Laurus or such officer,
      director or controlling person of Laurus in circumstances for which
      indemnification is provided under this Section 5; then, and in each such case,
      the Company and Laurus will contribute to the aggregate losses, claims, damages
      or liabilities to which they may be subject (after contribution from others)
      in
      such proportion so that Laurus is responsible only for the portion represented
      by the percentage that the public offering price of its securities offered
      by
      the Registration Statement bears to the public offering price of all securities
      offered by such Registration Statement, provided,
      however,
      that,
      in any such case, (A) Laurus will not be required to contribute any amount
      in
      excess of the public offering price of all such securities offered by it
      pursuant to such Registration Statement; and (B) no person or entity guilty
      of
      fraudulent misrepresentation (within the meaning of Section 10(f) of the Act)
      will be entitled to contribution from any person or entity who was not guilty
      of
      such fraudulent misrepresentation.

     

    
      
        
        

      

      
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    6. Representations,
      Warranties and Covenants.

     

    (a) The
      Common Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange
      Act and, except with respect to certain matters which the Company has disclosed
      to Laurus on Schedule
      6(a)
      hereto,
      the Company has timely filed all proxy statements, reports, schedules, forms,
      statements and other documents required to be filed by it under the Exchange
      Act. The Company has filed (i) its Annual Report on Form 10-K for its fiscal
      year ended June 30, 2005 and (ii) its Quarterly Report on Form 10-Q for the
      fiscal quarters ended September 30, 2005, December 31, 2005 and March 31, 2006
      (collectively, the “SEC Reports”). Each SEC Report was, at the time of its
      filing or at the time of the filing of any amendment thereto, in substantial
      compliance with the requirements of its respective form and none of the SEC
      Reports, nor the financial statements (and the notes thereto) included in the
      SEC Reports, as of their respective filing dates or as of the respective filing
      dates of any amendments thereto, contained any untrue statement of a material
      fact or omitted to state a material fact required to be stated therein or
      necessary to make the statements therein, in light of the circumstances under
      which they were made, not misleading. The financial statements of the Company
      included in the SEC Reports comply as to form in all material respects with
      applicable accounting requirements and the published rules and regulations
      of
      the Commission or other applicable rules and regulations with respect thereto.
      Such financial statements have been prepared in accordance with generally
      accepted accounting principles (“GAAP”) applied on a consistent basis during the
      periods involved (except (i) as may be otherwise indicated in such financial
      statements or the notes thereto or (ii) in the case of unaudited interim
      statements, to the extent they may not include footnotes or may be condensed)
      and fairly present in all material respects the financial condition, the results
      of operations and the cash flows of the Company and its subsidiaries, on a
      consolidated basis, as of, and for, the periods presented in each such SEC
      Report.

     

    (b) The
      Common Stock is quoted for trading on the Pink Sheet and satisfies all
      requirements for the continuation of such quotation and the Company shall do
      all
      things necessary for the continuation of such quotation. The Company has not
      received any notice that its Common Stock will no longer be quoted on the Pink
      Sheets (except for prior notices which have been fully remedied) or that the
      Common Stock does not meet all requirements for the continuation of such listing
      or quotation, as applicable.

     

    (c) Neither
      the Company, nor any of its affiliates, nor any person acting on its or their
      behalf, has directly or indirectly made any offers or sales of any security
      or
      solicited any offers to buy any security under circumstances that would cause
      the offering of the Securities pursuant to the Note to be integrated with prior
      offerings by the Company for purposes of the Securities Act which would prevent
      the Company from selling the Common Stock pursuant to Rule 506 under the
      Securities Act, or any applicable exchange-related stockholder approval
      provisions, nor will the Company or any of its affiliates or subsidiaries take
      any action or steps that would cause the offering of the Common Stock to be
      integrated with other offerings (other than such concurrent offering to
      Laurus).

     

    
      
        
        

      

      
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    (d) The
      Warrants and the shares of Common Stock that Laurus may acquire pursuant to
      the
      Warrants are all restricted securities under the Securities Act as of the date
      of this Agreement. The Company will not issue any stop transfer order or other
      order impeding the sale and delivery of any of the Registrable Securities at
      such time as such Registrable Securities are registered for public sale or
      an
      exemption from registration is available, except as required by federal or
      state
      securities laws.

     

    (e) The
      Company understands the nature of the Registrable Securities issuable upon
      the
      exercise of each Warrant and recognizes that the issuance of such Registrable
      Securities may have a potential dilutive effect. The Company specifically
      acknowledges that its obligation to issue the Registrable Securities is binding
      upon the Company and enforceable regardless of the dilution such issuance may
      have on the ownership interests of other shareholders of the
      Company.

     

    (f) Except
      for agreements made in the ordinary course of business, there is no agreement
      that has not been filed with the Commission as an exhibit to a registration
      statement or to a form required to be filed by the Company under the Exchange
      Act, the breach of which could reasonably be expected to have a material and
      adverse effect on the Company and its subsidiaries, or would prohibit or
      otherwise interfere with the ability of the Company to enter into and perform
      any of its obligations under this Agreement in any material
      respect.

     

    (g) The
      Company is increasing its authorized Common Stock so that it will have
      authorized and reserved a sufficient number of shares of Common Stock for the
      full exercise of the Warrants.

     

    (h) The
      Company shall provide written notice to each Holder of (i) the occurrence of
      each Discontinuation Event (as defined below) and (ii) the declaration of
      effectiveness by the SEC of each Registration Statement required to be filed
      hereunder, in each case within one (1) business day of the date of each such
      occurrence and/or declaration.

     

    (i) The
      Company hereby agrees that:

     

    (i) No
      later
      than July 9, 2007, the Company shall deliver to Laurus evidence of the filing
      of
      a Proxy Statement with respect to an increase in the Company’s authorized common
      stock to an aggregate amount of not less than 250,000,000.

     

    (ii) No
      later
      than September 10, 2007, the Company shall deliver to Laurus evidence that
      the
      Company's Certificate of Incorporation has been amended to (a) increase the
      authorized Common Stock to an aggregate amount of not less than 250,000,000
      (the
“Stock Increase”) and (b) immediately following the Stock Increase, cause a
      twenty-five (25) to one (1) reverse stock split to be effected pursuant to
      which
      the holders of shares of Common Stock will receive one (1) share of Common
      Stock
      for every twenty-five (25) shares of Common Stock then held.

     

    
      
        
        

      

      
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    (iii) Any
      breach by the Company of this Section 6(i) shall constitute an automatic Event
      of Default (as defined in the Note) and no cure or grace period shall be
      applicable thereto notwithstanding any other provision of the Note to the
      contrary.

     

    7. Miscellaneous.

     

    (a) Remedies.
      In the
      event of a breach by the Company or by a Holder, of any of their respective
      obligations under this Agreement, each Holder or the Company, as the case may
      be, in addition to being entitled to exercise all rights granted by law and
      under this Agreement, including recovery of damages, will be entitled to
      specific performance of its rights under this Agreement.

     

    (b) No
      Piggyback on Registrations.
      Except
      as and to the extent set forth on Schedule 7(b) hereto, neither the Company
      nor
      any of its security holders (other than the Holders in such capacity pursuant
      hereto) may include securities of the Company in any Registration Statement
      other than the Registrable Securities, and the Company shall not after the
      date
      hereof enter into any agreement providing any such right for inclusion of shares
      in the Registration Statement to any of its security holders. Except as and
      to
      the extent specified in Schedule
      7(b)
      hereto,
      the Company has not previously entered into any agreement granting any
      registration rights with respect to any of its securities to any Person that
      have not been fully satisfied.

     

    (c) Compliance.
      Each
      Holder covenants and agrees that it will comply with the prospectus delivery
      requirements of the Securities Act as applicable to it in connection with sales
      of Registrable Securities pursuant to any Registration Statement.

     

    (d) Discontinued
      Disposition.
      Each
      Holder agrees by its acquisition of such Registrable Securities that, upon
      receipt of a notice from the Company of the occurrence of a Discontinuation
      Event (as defined below), such Holder will forthwith discontinue disposition
      of
      such Registrable Securities under the applicable Registration Statement until
      such Holder’s receipt of the copies of the supplemented Prospectus and/or
      amended Registration Statement or until it is advised in writing (the “Advice”)
      by the Company that the use of the applicable Prospectus may be resumed, and,
      in
      either case, has received copies of any additional or supplemental filings
      that
      are incorporated or deemed to be incorporated by reference in such Prospectus
      or
      Registration Statement. The Company may provide appropriate stop orders to
      enforce the provisions of this paragraph. For purposes of this Agreement, a
      “Discontinuation Event” shall mean (i) when the Commission notifies the Company
      whether there will be a “review” of such Registration Statement and whenever the
      Commission comments in writing on such Registration Statement (the Company
      shall
      provide true and complete copies thereof and all written responses thereto
      to
      each of the Holders); (ii) any request by the Commission or any other Federal
      or
      state governmental authority for amendments or supplements to such Registration
      Statement or Prospectus or for additional information; (iii) the issuance by
      the
      Commission of any stop order suspending the effectiveness of such Registration
      Statement covering any or all of the Registrable Securities or the initiation
      of
      any Proceedings for that purpose; (iv) the receipt by the Company of any
      notification with respect to the suspension of the qualification or exemption
      from qualification of any of the Registrable Securities for sale in any
      jurisdiction, or the initiation or threatening of any Proceeding for such
      purpose; and/or (v) the occurrence of any event or passage of time that makes
      the financial statements included in such Registration Statement ineligible
      for
      inclusion therein or any statement made in such Registration Statement or
      Prospectus or any document incorporated or deemed to be incorporated therein
      by
      reference untrue in any material respect or that requires any revisions to
      such
      Registration Statement, Prospectus or other documents so that, in the case
      of
      such Registration Statement or Prospectus, as the case may be, it will not
      contain any untrue statement of a material fact or omit to state any material
      fact required to be stated therein or necessary to make the statements therein,
      in light of the circumstances under which they were made, not
      misleading.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    (e) Piggy-Back
      Registrations.
      If at
      any time during the applicable Effectiveness Period there is not an effective
      Registration Statement covering all of the Registrable Securities required
      to be
      covered during such Effectiveness Period and the Company shall determine to
      prepare and file with the Commission a registration statement relating to an
      offering for its own account or the account of others under the Securities
      Act
      of any of its equity securities, other than on Form S-4 or Form S-8 (each
      as promulgated under the Securities Act) or their then equivalents relating
      to
      equity securities to be issued solely in connection with any acquisition of
      any
      entity or business or equity securities issuable in connection with stock option
      or other employee benefit plans, then the Company shall send to each Holder
      written notice of such determination and, if within fifteen (15) days after
      receipt of such notice, any such Holder shall so request in writing, the Company
      shall include in such registration statement all or any part of such Registrable
      Securities such Holder requests to be registered, to the extent the Company
      may
      do so without violating registration rights of others which exist as of the
      date
      of this Agreement, subject to customary underwriter cutbacks applicable to
      all
      holders of registration rights and subject to obtaining any required consent
      of
      any selling stockholder(s) to such inclusion under such registration
      statement.

     

    (f) Amendments
      and Waivers.
      The
      provisions of this Agreement, including the provisions of this sentence, may
      not
      be amended, modified or supplemented, and waivers or consents to departures
      from
      the provisions hereof may not be given, unless the same shall be in writing
      and
      signed by the Company and the Holders of the then outstanding Registrable
      Securities. Notwithstanding the foregoing, a waiver or consent to depart from
      the provisions hereof with respect to a matter that relates exclusively to
      the
      rights of certain Holders and that does not directly or indirectly affect the
      rights of other Holders may be given by Holders of at least a majority of the
      Registrable Securities to which such waiver or consent relates; provided,
      however,
      that
      the provisions of this sentence may not be amended, modified, or supplemented
      except in accordance with the provisions of the immediately preceding
      sentence.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    (g) Notices.
      Any
      notice or request hereunder may be given to the Company or Laurus at the
      respective addresses set forth below or as may hereafter be specified in a
      notice designated as a change of address under this Section 7(g). Any notice
      or
      request hereunder shall be given by registered or certified mail, return receipt
      requested, hand delivery, overnight mail, Federal Express or other national
      overnight next day carrier (collectively, “Courier”) or telecopy (confirmed by
      mail). Notices and requests shall be, in the case of those by hand delivery,
      deemed to have been given when delivered to any party to whom it is addressed,
      in the case of those by mail or overnight mail, deemed to have been given three
      (3) business days after the date when deposited in the mail or with the
      overnight mail carrier, in the case of a Courier, the next business day
      following timely delivery of the package with the Courier, and, in the case
      of a
      telecopy, when confirmed. The address for such notices and communications shall
      be as follows:

     

    
      	
              If
                to the Company:

            	
              Thomas
                Equipment, Inc.

              1475
                32nd Avenue

              Lachine,
                Quebec H8T 3J1, Canada

              Attention: Luigi
                LoBasso

              Facsimile: (514)
                635-7010

            
	 	 
	
              with
                a copy to:

            	
              Sichenzia
                Ross Friedman Ference LLP

              1665
                Avenue of the Americas

              New
                York, New York 10018

              Attention: Thomas
                A. Rose, Esq.

              Facsimile: (212)
                930-9725

            
	 	 
	
              If
                to a Purchaser:

            	
              To
                the address set forth under such Purchaser name on the signature
                pages
                hereto

            
	 	 
	
              If
                to any other Person who is

              then
                the registered Holder:

            	
              To
                the address of such Holder as it appears in the stock transfer books
                of
                the Company

            

    

     

    or
      such
      other address as may be designated in writing hereafter in accordance with
      this
      Section 7(g) by such Person.

     

    (h) Successors
      and Assigns.
      This
      Agreement shall inure to the benefit of and be binding upon the successors
      and
      permitted assigns of each of the parties and shall inure to the benefit of
      each
      Holder. The Company may not assign its rights or obligations hereunder without
      the prior written consent of each Holder. Each Holder may assign their
      respective rights hereunder to any person or entity.

     

    (i) Execution
      and Counterparts.
      This
      Agreement may be executed in any number of counterparts, each of which when
      so
      executed shall be deemed to be an original and, all of which taken together
      shall constitute one and the same agreement. In the event that any signature
      is
      delivered by facsimile transmission, such signature shall create a valid binding
      obligation of the party executing (or on whose behalf such signature is
      executed) the same with the same force and effect as if such facsimile signature
      were the original thereof.

     

    (j) Governing
      Law, Jurisdiction and Waiver of Jury Trial.
      THIS
      AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH
      THE
      LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN
      SUCH
      STATE, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. The Company hereby
      consents and agrees that the state or federal courts located in the County
      of
      New York, State of New York shall have exclusion jurisdiction to hear and
      determine any Proceeding between the Company, on the one hand, and Laurus,
      on
      the other hand, pertaining to this Agreement or to any matter arising out of
      or
      related to this Agreement; provided,
      that
      Laurus and the Company acknowledge that any appeals from those courts may have
      to be heard by a court located outside of the County of New York, State of
      New
      York, and further provided,
      that
      nothing in this Agreement shall be deemed or operate to preclude Laurus from
      bringing a Proceeding in any other jurisdiction to collect the obligations,
      to
      realize on the Collateral or any other security for the obligations, or to
      enforce a judgment or other court order in favor of Laurus. The Company
      expressly submits and consents in advance to such jurisdiction in any Proceeding
      commenced in any such court, and the Company hereby waives any objection which
      it may have based upon lack of personal jurisdiction, improper venue or
forum
      non conveniens.
      The
      Company hereby waives personal service of the summons, complaint and other
      process issued in any such Proceeding and agrees that service of such summons,
      complaint and other process may be made by registered or certified mail
      addressed to the Company at the address set forth in Section 7(g) and that
      service so made shall be deemed completed upon the earlier of the Company’s
      actual receipt thereof or three (3) days after deposit in the U.S. mails, proper
      postage prepaid. The parties hereto desire that their disputes be resolved
      by a
      judge applying such applicable laws. Therefore, to achieve the best combination
      of the benefits of the judicial system and of arbitration, the parties hereto
      waive all rights to trial by jury in any Proceeding brought to resolve any
      dispute, whether arising in contract, tort, or otherwise between Laurus and/or
      the Company arising out of, connected with, related or incidental to the
      relationship established between then in connection with this Agreement. If
      either party hereto shall commence a Proceeding to enforce any provisions of
      this Agreement, then the prevailing party in such Proceeding shall be reimbursed
      by the other party for its reasonable attorneys’ fees and other costs and
      expenses incurred with the investigation, preparation and prosecution of such
      Proceeding.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    (k) Cumulative
      Remedies.
      The
      remedies provided herein are cumulative and not exclusive of any remedies
      provided by law.

     

    (l) Severability.
      If any
      term, provision, covenant or restriction of this Agreement is held by a court
      of
      competent jurisdiction to be invalid, illegal, void or unenforceable, the
      remainder of the terms, provisions, covenants and restrictions set forth herein
      shall remain in full force and effect and shall in no way be affected, impaired
      or invalidated, and the parties hereto shall use their reasonable efforts to
      find and employ an alternative means to achieve the same or substantially the
      same result as that contemplated by such term, provision, covenant or
      restriction. It is hereby stipulated and declared to be the intention of the
      parties that they would have executed the remaining terms, provisions, covenants
      and restrictions without including any of such that may be hereafter declared
      invalid, illegal, void or unenforceable.

     

    (m) Headings.
      The
      headings in this Agreement are for convenience of reference only and shall
      not
      limit or otherwise affect the meaning hereof.

     

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

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF, the parties have executed this Registration Rights Agreement
      as
      of the date first written above.

     

    
      	 	 	 
	 	
              THOMAS
                EQUIPMENT, INC.

            
	 
 	 
 	 
 
	
            	By:  	/s/
              MICHAEL LUTHER
	 	
              

              Name:
                Michael Luther 

            
	 	
              Title:
                CRO

            

    

     

    
      	 	 	 
	 	
              LAURUS
                MASTER FUND, LTD.

            
	 
 	 
 	 
 
	
            	By:  	
              /s/
                DAVID GRIN

            
	 	
              

              Name:
                David Grin 

              Title:
                Fund Manager

            
	 	 
	 	
              Address
                for Notices:

            
	 	 
	 	
              Laurus
                Master Fund, Ltd.

              c/o
                M&C Corporate Services Limited

              P.O.
                Box 309 GT

              Ugland
                House 

              George
                Town

              South
                Church Street

              Grand
                Cayman, Cayman Islands

              Facsimile:
                345-949-8080

            
	 	 
	 	
              with
                copy to:

            
	 	 
	 	
              Laurus
                Capital Management, LLC

              335
                Madison Avenue, 10th Floor

              New
                York, New York 10017

              Attention:
                Portfolio Services

              Facsimile:
                212-541-4410

            

    

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      A

     

    ____________,
      200___

    [Continental
      Stock Transfer

    &
      Trust Company

    Two
      Broadway

    New
      York,
      New York 10004

    Attn:
      William Seegraber]

     

    Re: Thomas
      Equipment, Inc. Registration Statement on Form [S-3]

     

    Ladies
      and Gentlemen:

     

    As
      counsel to Thomas Equipment, Inc., a Delaware corporation (the “Company”), we
      have been requested to render our opinion to you in connection with the resale
      by the individuals or entitles listed on Schedule
      A
      attached
      hereto (the “Selling Stockholders”), of an aggregate of __________ shares (the
“Shares”) of the Company’s Common Stock.

     

    A
      Registration Statement on Form [S-3] under the Securities Act of 1933, as
      amended (the “Act”), with respect to the resale of the Shares was declared
      effective by the Securities and Exchange Commission on [date]. Enclosed is
      the
      Prospectus dated [date]. We understand that the Shares are to be offered and
      sold in the manner described in the Prospectus.

     

    Based
      upon the foregoing, upon request by the Selling Stockholders at any time while
      the registration statement remains effective, it is our opinion that the Shares
      have been registered for resale under the Act and new certificates evidencing
      the Shares upon their transfer or re-registration by the Selling Stockholders
      may be issued without restrictive legend. We will advise you if the registration
      statement is not available or effective at any point in the future.

     

    Very
      truly yours,

     

    [Company
      counsel]

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Schedule
      A to Exhibit A

     

    
      	
              Selling
                Stockholder

            	 	
              R/N/O

            	 	
              Shares

              Being
                Offered

            
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    SCHEDULE
      6(a)

     

    None

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    SCHEDULE
      7(b)

     

    1. Common
      Stock Purchase Warrant dated November 8, 2006 issued by the Company to Federal
      Partners, L.P. exercisable into 52,500,000 shares of Common Stock at an exercise
      price of $0.125.

     

    2. Common
      Stock Purchase Warrant dated November 8, 2006 issued by the Company to Federal
      Partners, L.P. exercisable into 52,500,000 shares of Common Stock at an exercise
      price of $0.01.

     

    3. Common
      Stock Purchase Warrant dated November 8, 2006 issued by the Company to Laurus
      exercisable into 52,500,000 shares of Common Stock at an exercise price of
      $0.125.

     

    4. Common
      Stock Purchase Warrant dated November 8, 2006 issued by the Company to Laurus
      exercisable into 52,500,000 shares of Common Stock at an exercise price of
      $0.01.

     

    5. 4,854,426
      shares of Common Stock held by certain former shareholders of Pneutech Inc.
      

     

    6. 168,283,341
      shares of Common Stock held by the preferred shareholders.

     

    7. Warrants
      held by the preferred shareholders exercisable into 11,500,000 shares of Common
      Stock.

     

    8. Warrants
      held by the preferred shareholders exercisable into 8,063,658 shares of Common
      Stock.

     

    9. Warrants
      held by the preferred shareholders exercisable into 60,416,657 shares of Common
      Stock.AGREEMENT

     

    THIS
      AGREEMENT
      is made
      as of May 2, 2007 by and among Tcomt, Inc., a Delaware corporation
      (“Tcomt”),
      Thomas Ventures, Inc., a Delaware corporation (the “Shareholder”),
      and
      Laurus Master Fund, Ltd. (“Laurus”).

     

    WHEREAS,
      Tcomt
      has issued a Common Stock Purchase Warrant (as amended, restated, modified
      or
      supplemented from time to time, the “Warrant”)
      to
      Laurus to purchase up to twenty five percent (25%) of the common stock of Tcomt
      (subject to increase and adjustment as set forth therein).

     

    NOW
      THEREFORE,
      for
      good and valuable consideration, the receipt and sufficiency of which is hereby
      acknowledged, the parties agree as follows:

     

    
      	
              1.

            	
              Shareholders
                Agreement.
                Forthwith following the exercise of the Warrant in whole or in part
                pursuant to Section 1.1 of the Warrant, each of Tcomt, the Shareholder
                and
                Laurus agree to negotiate in good faith the terms of a shareholders
                agreement mutually agreeable to each of them, which such shareholder
                agreement shall include, without limitation, (a) such matters commonly
                provided for in a shareholders agreement, such as governance and
                transfer
                restrictions and (b) Laurus’ required consent to any of the Designated
                Actions (as hereafter defined). For purposes hereof, the term “Designated
                Actions” shall have the meaning set forth on Schedule
                A
                hereto.

            

    

     

    
      	
              2.

            	
              Term
                of Agreement.
                This Agreement shall be effective for so long as Laurus holds the
                Warrant
                or any portion thereof or any shares of Tcomt’s common stock acquired upon
                the exercise of the Warrant in whole or in
                part.

            

    

     

    
      	
              3.

            	
              Governing
                Law.
                This Agreement shall be governed by and construed and enforced in
                all
                respects in accordance with the laws of the State of New
                York.

            

    

     

    
      	
              4.

            	
              Counterparts.
                This Agreement may be executed in one or more counterparts, each
                of which
                shall be deemed an original and all of which when taken together
                shall
                constitute one and the same agreement. Any signature delivered by
                a party
                by facsimile transmission or by sending a scanned copy by electronic
                mail
                shall be deemed an original signature
                hereto.

            

    

     

    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK,

    SIGNATURE
      PAGES ON FOLLOWING PAGES]

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

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

    
      	 	 	 
	 	
              TCOMT,
                INC.

            
	 
 	 
 	 
 
	
            	By:  	/s/
              MICHAEL LUTHER
	 	
              

              Name:
                Michael Luther

            

    

    
      	 	 	
              Title:
                Vice President

            
	 	
              THOMAS
                VENTURES, INC.

            
	 
 	 
 	 
 
	
            	By:  	/s/
              MICHAEL LUTHER
	 	
              

              Name:
                Michael Luther

            
	 	
              Title:
                CRO

            

    

    
      	 	 	 
	 	
              LAURUS
                MASTER FUND, LTD.

            
	 
 	 
 	 
 
	
            	By:  	/s/
              DAVID GRIN 
	 	
              

              Name:
                David Grin

            
	 	
              Title:
                Fund Manager

            

    

    

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    SCHEDULE
      A

     

    DESIGNATED
      ACTIONS

     

    Tcomt
      and/or the Shareholder, acting on behalf of Tcomt, shall not implement or effect
      (or otherwise resolve or agree to implement or effect) any of the following
      actions without the prior written approval of Laurus (which approval shall
      not
      be unreasonably withheld):

     

    
      	 	
              (a)

            	
              (i)
                declare or pay any dividends or make any other distribution in respect
                of
                any securities of Tcomt or (ii) make any distribution of any nature
                (including repayment of loans) to any
                person;

            

    

     

    
      	 	
              (b)

            	
              sell
                or dispose of any assets or property, other than in the ordinary
                course of
                business consistent with past
                practice;

            

    

     

    
      	 	
              (c)

            	
              establish,
                acquire or otherwise become an equity holder (including, for greater
                certainty, a holder of securities convertible into equity) in any
                corporate entity or any partnership, equity joint venture or similar
                arrangements;

            

    

     

    
      	 	
              (d)

            	
              enter
                into any transactions outside the ordinary course with officers,
                directors
                or employees or Shareholder of their families or other persons with
                whom
                they do not act at arm’s length;

            

    

     

    
      	 	
              (e)

            	
              enter
                into (other than in the ordinary course to fund working capital needs)
                or
                materially modify any credit
                facility;

            

    

     

    
      	 	
              (f)

            	
              create
                any mortgage, lien, charge or other form of encumbrance with respect
                to
                any of Tcomt’s assets;

            

    

     

    
      	 	
              (g)

            	
              materially
                alter the fundamental nature of its business or otherwise engage
                in other
                businesses or activities that are not incidental to the businesses
                or
                activities presently undertaken by Tcomt;

            

    

     

    
      	 	
              (h)

            	
              enter
                into any agreement with any third party except within the ordinary
                course
                of its business; 

            

    

     

    
      	 	
              (i)

            	
              issue
                or sell any capital stock of, or any rights, warrants or securities
                convertible into or exercisable or exchangeable for any capital stock
                of,
                Tcomt, including by way of initial public
                offering;

            

    

     

    
      	 	
              (j)

            	
              wind
                up, dissolve or liquidate;

            

    

     

    
      	 	
              (k)

            	
              continue
                under the laws of a jurisdiction other than the jurisdiction under
                which
                it was formed;

            

    

     

    
      	 	
              (l)

            	
              change
                its fiscal year; 

            

    

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    
      	 	
              (m)

            	
              amend
                its articles or by-laws;

            

    

     

    
      	 	
              (n)

            	
              merge
                with or into any other company;

            

    

     

    
      	 	
              (o)

            	
              take
                any action which would make it impossible to carry on the ordinary
                business of Tcomt;

            

    

     

    
      	 	
              (p)

            	
              take
                any action which would place Tcomt into bankruptcy;
                or

            

    

     

    
      	 	
              (q)

            	
              appoint
                or replace any outside accountants and/or
                auditors.

            

    

     

     

    
      
         

      

      
        4

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