Document:

SECURED
      TERM NOTE

     

    FOR
      VALUE
      RECEIVED, each of PNEUTECH INC., a corporation organized under the laws of
      Canada (“Pneutech”),
      ROUSSEAU CONTROLS INC., a corporation organized under the laws of Canada
      (“Rousseau”),
      and
      HYDRAMEN FLUID POWER LIMITED, a corporation organized under the laws of Ontario
      (“Hydramen”
      together with Pneutech and Rousseau, each a “Company”
and
      collectively, the “Companies”),
      jointly and severally (solidarily), promises to pay to FEDERAL
      PARTNERS, L.P., a Delaware limited partnership
      (the
“Holder”)
      or its
      registered assigns or successors in interest, the sum of Two Million Dollars
      (Cnd.$2,000,000), together with any accrued and unpaid interest hereon, on
      May
      9, 2007 (the “Maturity
      Date”)
      if not
      sooner indefeasibly paid in full.

     

    Capitalized
      terms used herein without definition shall have the meanings ascribed to such
      terms in those certain General Security Agreements and Deeds of Hypothec, as
      the
      case may be, dated as of the date hereof by and between each of the Companies
      and the Holder (as amended, restated, modified and/or supplemented from time
      to
      time, collectively, the “Security
      Agreements”).

     

    The
      following terms shall apply to this Secured Term Note (this “Note”):

     

    ARTICLE
      I

    INTEREST
      AND REDEMPTION

     

    1.1 Contract
      Rate.
      Subject
      to Sections 2.2 and 3.10, 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
      two percent (2%) (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. Interest shall be (i) calculated on the basis of
      a 360
      day year, and (ii) payable monthly, in arrears, commencing on December 1, 2006,
      on the first business day of each consecutive calendar month thereafter through
      and including the Maturity Date, and on 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 the Companies 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, the Companies may, in their sole discretion, pay any
      PIK
      Interest Amount on any Interest Payment Date in immediately available funds
      without any premium or penalty.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    1.2 Optional
      Redemption in Cash.
      The
      Companies may prepay this Note (“Optional
      Redemption”)
      by
      paying to the Holder a sum of money equal to one hundred percent (100%) of
      the
      Principal Amount outstanding at such time 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
      Agreements or any Ancillary Agreement (the “Redemption
      Amount”)
      outstanding on the Redemption Payment Date (as defined below). The Companies
      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 within seven (7) business days after the date of the Notice of
      Redemption (the “Redemption
      Period”).
      On
      the Redemption Payment Date, the Redemption Amount must be paid in good funds
      to
      the Holder. In the event the Companies fail to pay the Redemption Amount on
      the
      Redemption Payment Date as set forth herein, then such Redemption Notice will
      be
      null and void. For purposes hereof, the term “Ancillary
      Agreement”
means
      all documents, agreements, instruments, security agreements, mortgages and
      deeds
      of hypothecs executed by or on behalf of any Company to Holder, relating to
      this
      Note or to the transactions contemplated by this Note or otherwise relating
      to
      the relationship between or among any Company and Holder, as each of the same
      may be amended, supplemented, restated or otherwise modified from time to
      time.

     

    1.3 Canada
      Interest Act.
      For the
      purpose of complying with the Interest Act (Canada), it is expressly stated
      that
      where interest is calculated pursuant hereto at a rate based upon a 360-day
      period (for the purposes of this Section, the “first rate”), the yearly rate or
      percentage of interest to which the first rate is equivalent is the first rate
      multiplied by the actual number of days in the calendar year in which the same
      is to be ascertained and divided by 360, and the parties hereto acknowledge
      that
      there is a material distinction between the nominal and effective rates of
      interest and that they are capable of making the calculations necessary to
      compare such rates and that the calculations herein are to be made using the
      nominal rate method and not on any basis that gives effect to the principle
      of
      deemed reinvestment of interest.

     

    ARTICLE
      II

    EVENTS
      OF DEFAULT

     

    2.1 Events
      of Default.
      The
      occurrence of any of the following events set forth in this Section 2.1 shall
      constitute an event of default (“Event
      of Default”)
      hereunder:

     

    (a) Failure
      to Pay.
      The
      Companies fail to pay when due any installment of principal, interest or other
      fees hereon in accordance herewith, or the Companies fail to pay any of the
      other Obligations when due, 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.

     

    (b) Breach
      of Covenant.
      Any
      Company breaches any covenant or any 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.

     

    (c) Breach
      of Representations and Warranties.
      Any
      representation, warranty or statement made or furnished by any Company in this
      Note, the Security Agreements or any Ancillary Agreement shall at any time
      be
      false or misleading in any material respect on the date as of which made or
      deemed made.

     

    
      
         

      

      
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    (d) Default
      Under Other Agreements.
      The
      occurrence of any default (or similar term) in the observance or performance
      of
      any agreement or condition relating to any indebtedness for borrowed money,
      including indebtedness owing by any Company to Greystone Business Credit II
      LLC
      and/or Laurus Master Fund, Ltd. beyond the period of grace (if any), the effect
      of which default is to cause, or permit the holder or holders of such
      indebtedness or beneficiary or beneficiaries of such contingent obligation
      to
      cause, such indebtedness to become due prior to its stated maturity or such
      contingent obligation to become payable.

     

    (e) Material
      Adverse Effect.
      Any
      change or the occurrence of any event which could reasonably be expected to
      have
      a Material Adverse Effect (as defined below). “Material
      Adverse Effect”
shall
      mean a material adverse effect on (a) the business, assets, liabilities,
      condition (financial or otherwise), properties, operations or prospects of
      any
      Company individually or the Companies taken as a whole, (b) any Company’s
      ability to pay or perform the Obligations in accordance with the terms hereof,
      the Security Agreement or any Ancillary Agreement, (c) the value of the
      Collateral or the Hypothecated Property, the Liens on the Collateral or the
      Hypothecated Property or the priority of any such Lien or (d) the practical
      realization of the benefits of the Holder’s rights and remedies under this Note,
      the Security Agreements and any Ancillary Agreements.

     

    (f) Bankruptcy.
      Any
      Company shall (i) apply for, consent to or suffer to exist the appointment
      of,
      or the taking of possession by, a receiver, interim receiver, custodian, trustee
      or liquidator or like official of itself or of all or a substantial part of
      its
      property, (ii) make a general assignment for the benefit of creditors, (iii)
      commence a voluntary case or proceeding under applicable federal or foreign
      bankruptcy laws (as now or hereafter in effect), save and except for the
      proceedings referred to below under Sub-Section 2.1(h), (iv) be adjudicated
      a
      bankrupt, (v) acquiesce to, without challenge within ten (10) days of the filing
      thereof, or failure to have dismissed, within thirty (30) days, any petition
      or
      proceeding filed against it in any involuntary case or proceeding under such
      bankruptcy laws, or (vi) take any action for the purpose of effecting any of
      the
      foregoing.

     

    (g) Judgments.
      Attachments or levies in excess of $50,000 in the aggregate are made upon any
      Company’s assets or a judgment is rendered against any Company’s property
      involving a liability of more than $50,000 which shall not have been vacated,
      discharged, stayed or bonded within thirty (30) days from the entry
      thereof.

     

    (h) Insolvency/CCAA
      Proceedings.
      Any
      Company shall (i) cease operations of its present business or (ii) fail to
      file
      a plan of arrangement pursuant to the Companies’ Creditors Arrangement Act
      (Canada) in the court file bearing number 500-11-028846-067 of the Quebec
      Superior Court, District of Montreal by December 5, 2006 and such plan of
      arrangement is not approved by the requisite majority of its creditors and
      sanctioned by such Court on or before February 5, 2007.

     

    (i) Change
      of Control.
      A
      Change of Control (as defined below) shall occur with respect to any Company,
      unless the Holder shall have expressly consented to such Change of Control
      in
      writing. A “Change
      of Control”
shall
      mean any event or circumstance as a result of any Company merging or
      consolidating with, or selling all or substantially all of its assets to, any
      other person or entity.

     

    
      
         

      

      
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    (i) Indictment;
      Proceedings.
      The
      indictment or threatened indictment of any Company or any executive officer
      of
      any Company under any criminal statute, or commencement or threatened
      commencement of criminal or civil proceeding against any Company or any
      executive officer of any Company pursuant to which statute or proceeding
      penalties or remedies sought or available include forfeiture of any of the
      property of any Company.

     

    (j) Default
      Under Other Agreements.
      (i) An
      Event of Default shall occur under and as defined in any Security Agreement
      or
      any Ancillary Agreement, (ii) any Company shall breach any term or provision
      of
      any other agreement in any material respect and such breach, if capable of
      cure,
      continues unremedied for a period of fifteen (15) days after the occurrence
      thereof, (iii) any Company attempts to terminate, challenges the validity of,
      or
      its liability under, any other agreement, (iv) any proceeding shall be brought
      to challenge the validity, binding effect of any other agreement or (v) any
      other agreement ceases to be a valid, binding and enforceable obligation of
      any
      Company (to the extent such Company is a party thereto).

     

    (k) Use
      of
      Proceeds.
      Any
      Company shall use the proceeds of this Note for any purpose other than as
      permitted under Section 3.12 hereof.

     

    2.2 Default
      Interest.
      Following the occurrence and during the continuance of an Event of Default,
      the
      Companies shall, jointly and severally, pay additional interest on the
      outstanding principal balance of this Note in an amount equal to two percent
      (2%) per month, and all outstanding obligations under this Note, the Security
      Agreements and each Ancillary Agreement, including unpaid interest, shall
      continue to accrue interest at such additional interest rate from the date
      of
      such Event of Default until the date such Event of Default is cured or
      waived.

     

    2.3 Default
      Payment.
      Following the occurrence and during the continuance of an Event of Default,
      the
      Holder, at its option, may demand repayment in full of all obligations and
      liabilities owing by Companies to the Holder under this Note, the Security
      Agreements and/or any Ancillary Agreement and/or may elect, in addition to
      all
      rights and remedies of the Holder under the Security Agreements and any
      Ancillary Agreement and all obligations and liabilities of the Companies under
      the Debtor Agreements, to require the Companies to make a default payment
      (“Default
      Payment”).
      The
      Default Payment shall be one hundred thirty percent (130%) of the outstanding
      principal amount of this 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 the Holder
      pursuant to this Note, the Security Agreements and/or the Ancillary Agreements,
      then to accrued and unpaid interest due on this Note and then to the outstanding
      principal balance of this Note. The Default Payment shall be due and payable
      immediately on the date that the Holder has demanded payment of the Default
      Payment pursuant to this Section 2.3.

     

    
      
         

      

      
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    ARTICLE
      III

    MISCELLANEOUS

     

    3.1 Issuance
      of New Note.
      Upon
      any partial redemption of this Note, a new Note containing the same date and
      provisions of this Note shall, at the request of the Holder, be issued by the
      Companies to the Holder for the principal balance of this Note and interest
      which shall not have been paid as of such date. Subject to the provisions of
      Article III of this Note, the Companies shall not pay any costs, fees or any
      other consideration to the Holder for the production and issuance of a new
      Note.

     

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

     

    3.3 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.

     

    3.4 Notices.
      Any
      notice herein required or permitted to be given shall be in writing and shall
      be
      deemed effectively given: (a) upon personal delivery to the party notified,
      (b)
      when sent by confirmed telex or facsimile if sent during normal business hours
      of the recipient, if not, then on the next business day, (c) five days after
      having been sent by registered or certified mail, return receipt requested,
      postage prepaid, or (d) one day after deposit with a nationally recognized
      overnight courier, specifying next day delivery, with written verification
      of
      receipt. All communications shall be sent to the Companies at the address set
      forth below the signature of the Companies hereto, and to the Holder at the
      following address: Federal
      Partners, L.P. c/o The Clark Estates, Inc., 1 Rockefeller Plaza, 34th
      Floor,
      New York, New York 10020, Attn: Stephen M. Duff, facsimile number (212)
      977-3425,
      or at
      such other address as the Companies or the Holder may designate by ten days
      advance written notice to the other parties hereto.

     

    3.5 Amendment
      Provision.
      The
      term “Note” and all references 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 such successor instrument may be amended or supplemented.

     

    3.6 Assignability.
      This
      Note shall be binding upon each Company and their respective successors and
      assigns, and shall inure to the benefit of the Holder and its successors and
      assigns. No Company may assign any of its obligations under this Note without
      the prior written consent of the Holder, any such purported assignment without
      such consent being null and void.

     

    3.7 Cost
      of Collection.
      In case
      of any Event of Default under this Note, the Companies shall, jointly and
      severally, pay the Holder the Holder’s reasonable costs of collection, including
      reasonable attorneys’ fees.

     

    
      
         

      

      
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    3.8 Governing
      Law, Jurisdiction and Waiver of Jury Trial.

     

    (a) THIS
      NOTE
      SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS
      OF
      THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF
      LAW.

     

    (b) EACH
      COMPANY HEREBY CONSENTS AND AGREES THAT THE STATE OR FEDERAL COURTS LOCATED
      IN
      THE COUNTY OF NEW YORK, STATE OF NEW YORK OR THE QUEBEC SUPERIOR COURT, FOR
      THE
      DISTRICT OF MONTREAL SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE
      ANY
      CLAIMS OR DISPUTES BETWEEN ANY COMPANY, ON THE ONE HAND, AND THE HOLDER, ON
      THE
      OTHER HAND, PERTAINING TO THIS NOTE OR ANY OF THE OTHER RELATED AGREEMENTS
      OR TO
      ANY MATTER ARISING OUT OF OR RELATED TO THIS NOTE, THE SECURITY AGREEMENTS
      OR
      ANY ANCILLARY AGREEMENTS; PROVIDED, THAT EACH COMPANY ACKNOWLEDGES 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 OR THE QUEBEC SUPERIOR COURT, FOR THE
      DISTRICT OF MONTREAL; AND FURTHER PROVIDED, THAT NOTHING IN THIS NOTE SHALL
      BE
      DEEMED OR OPERATE TO PRECLUDE THE HOLDER FROM BRINGING SUIT OR TAKING OTHER
      LEGAL ACTION 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 THE HOLDER. EACH COMPANY EXPRESSLY
      SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT
      COMMENCED IN ANY SUCH COURT, AND EACH COMPANY HEREBY WAIVES ANY OBJECTION WHICH
      IT MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM
      NON CONVENIENS. EACH COMPANY HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS,
      COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT
      SERVICE OF SUCH SUMMONS, COMPLAINT AND OTHER PROCESS MAY BE MADE BY REGISTERED
      OR CERTIFIED MAIL ADDRESSED TO SUCH COMPANY AT THE ADDRESS SET FORTH BENEATH
      THE
      SIGNATURE OF SUCH COMPANY HERETO AND THAT SERVICE SO MADE SHALL BE DEEMED
      COMPLETED UPON THE EARLIER OF SUCH COMPANY’S ACTUAL RECEIPT THEREOF OR THREE (3)
      DAYS AFTER DEPOSIT IN THE U.S. OR CANADIAN MAILS, PROPER POSTAGE
      PREPAID.

     

    (c) EACH
      COMPANY DESIRES THAT ITS 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, EACH COMPANY HERETO WAIVES ALL RIGHTS
      TO
      TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE,
      WHETHER ARISING IN CONTRACT, TORT, OR OTHERWISE BETWEEN THE HOLDER AND/OR ANY
      COMPANY ARISING OUT OF, CONNECTED WITH, RELATED OR INCIDENTAL TO THE
      RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS NOTE, THE SECURITY
      AGREEMENTS OR ANY ANCILLARY AGREEMENT OR THE TRANSACTIONS RELATED HERETO OR
      THERETO.

     

    
      
         

      

      
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    3.9 Judgment
      Currency.
      If for
      the purpose of obtaining judgment in any court it is necessary to convert an
      amount due hereunder in the currency in which it is due (the “Original
      Currency”)
      into
      another currency (the “Second
      Currency”),
      the
      rate of exchange applied shall be that at which, in accordance with normal
      banking procedures, the Holder could purchase in the New York foreign exchange
      market, the Original Currency with the Second Currency on the date two (2)
      business days preceding that on which judgment is given. Each Company agrees
      that its obligation in respect of any Original Currency due from it hereunder
      shall, notwithstanding any judgment or payment in such other currency, be
      discharged only to the extent that, on the business day following the date
      the
      Holder receives payment of any sum so adjudged to be due hereunder in the Second
      Currency, the Holder may, in accordance with normal banking procedures,
      purchase, in the New York foreign exchange market, the Original Currency with
      the amount of the Second Currency so paid; and if the amount of the Original
      Currency so purchased or could have been so purchased is less than the amount
      originally due in the Original Currency, each Company agrees as a separate
      obligation and notwithstanding any such payment or judgment to indemnify the
      Holder against such loss. The term “rate of exchange” in this Section 3.9 means
      the spot rate at which the Holder, in accordance with normal practices, is
      able
      on the relevant date to purchase the Original Currency with the Second Currency,
      and includes any premium and costs of exchange payable in connection with such
      purchase.

     

    3.10 Severability.
      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 enforceability of any other provision of this Note.

     

    3.11 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 rate permitted by such law, any payments in excess
      of such maximum rate shall be credited against amounts owed by the Companies
      to
      the Holder and thus refunded to the Companies.

     

    3.12 Use
      of
      Proceeds.
      The
      Companies shall use the proceeds of the loans made under this Note solely to
      (a)
      purchase inventory in the ordinary course of their business, (b) make the
      Closing Payment (as defined in Section 3.13 hereof), (c) pay a portion of the
      fees and expenses of the Companies incurred in connection with the transactions
      contemplated under this Note in the amount of $50,000 and (d) pay a portion
      of
      the fees and expenses of the Holder incurred in connection with the transactions
      contemplated under this Note in the amount of $50,000.

     

    3.13 Payment.
      Upon
      execution of this Note by each Company and the Holder, the Companies shall
      jointly and severally (solidarily) pay to the Holder, a non-refundable payment
      in an amount equal to three and one-half percent (3.50%) of the original
      principal amount of this Note (the “Closing
      Payment”).
      Such
      payment shall be deemed fully earned on the date hereof and shall not be subject
      to rebate or proration for any reason.

     

    
      
         

      

      
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    3.14 Taxes.
      The
      Companies shall, jointly and severally (solidarily), pay principal, interest
      and
      all other amounts payable hereunder, or under the Security Agreements or any
      Ancillary Agreement, without any deduction whatsoever, including any deduction
      for any set-off or counterclaim or deduction or withholding for any taxes,
      levies, imposts, deductions, charges or withholdings of whatever kind or nature.
      

     

    The
      Companies agree to indemnify and hold harmless the Holder for the full amount
      of
      taxes (including any taxes imposed or assessed by any jurisdiction on amounts
      payable under the Note and any withholdings or remittances required by law
      to be
      made by the Holder on any payments made by the Companies thereunder, but
      excluding other taxes that are imposed on or measured solely by net income
      or
      profits) paid by the Holder as a result of the transactions contemplated by
      this
      Note or any other Ancillary Agreements and any liability (including penalties,
      interest, additions to tax and expenses) arising therefrom or with respect
      thereto, whether or not such taxes were correctly or legally asserted. Payment
      under this indemnification shall be made within five (5) business days after
      the
      date the Holder makes written demand therefor to the Companies.

     

    If
      any
      Company shall be required by law to deduct or withhold any taxes from or in
      respect of any sum payable hereunder to the Holder, then:

    

    (a) the
      sum
      payable to the Holder shall be increased as necessary so that after making
      all
      required deductions and withholdings, the Holder receives an amount equal to
      the
      sum it would have received had no such deductions or withholdings been
      made;

     

    (b) such
      Company shall make such deductions and withholdings;

     

    (c) such
      Company shall pay the full amount deducted or withheld to the relevant taxing
      authority or other authority in accordance with applicable law;

     

    (d) without
      duplication of amounts paid under clause (a) above, each Company shall also
      pay
      to the Holder for the account of the Holder, at the time interest is paid,
      all
      additional amounts which the Holder specifies as necessary to preserve the
      after-tax yield the Holder would have received if such taxes had not been
      imposed; and

     

    (e) without
      duplication of amounts paid under clauses (a) and (d), the applicable Company
      shall indemnify and save harmless the Holder from and in respect of any taxes
      required by them to be paid, deducted or withheld and remitted.

     

    Each
      Company shall file when due all tax returns and other reports which it is
      required to file, pay or provide for the payment, on or prior to the time when
      due or delinquent, of all taxes, fees, assessments, and other governmental
      charges against it or upon its property, income and franchises, make all
      required withholding and other tax remittances and deposits, and establish
      adequate reserves for the payment of all such items, and shall provide to the
      Holder, upon request, satisfactory evidence of its timely compliance with the
      foregoing.

     

    
      
         

      

      
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    Notwithstanding
      anything contained herein to the contrary, the provisions of this Section 3.14
      shall survive the expiration or termination of this Note and the other Ancillary
      Agreements.

     

    3.15 Joint
      and Several Liability.

     

    (a) All
      obligations and liabilities under this Note (the “Obligations”)
      shall
      be joint and several (solidary), and the Companies shall make payment upon
      the
      maturity of the Obligations by acceleration or otherwise, and the Obligations
      on
      the part of the Companies shall in no way be affected by any extensions,
      renewals and forbearance granted by the Holder to any Company, failure of the
      Holder to give any Company any notice, any failure of the Holder to pursue
      to
      preserve its rights against any Company, the release by the Holder of any
      collateral now or hereafter acquired by any Company, and such agreement by
      any
      Company to pay upon any notice issued pursuant hereto is unconditional and
      unaffected by prior recourse by the Holder to any Company or any collateral
      for
      such Company’s Obligations or the lack thereof.

     

    (b) Each
      Company expressly waives any and all rights of subrogation, reimbursement,
      indemnity, exoneration, contribution or any other claim which such Company
      may
      now or hereafter have against the other or other person or entity directly
      or
      contingently liable for the Obligations, or against or with respect to any
      other’s property (including, without limitation, any property which is
      collateral for the Obligations), arising from the existence or performance
      of
      this Note, until all Obligations have been indefeasibly paid in full and this
      Note and the Ancillary Agreements have been irrevocably terminated.

     

    (c) Each
      Company represents and warrants to the Holder that (i) Companies have one or
      more common shareholders, directors and officers, (ii) the businesses and
      corporate activities of Companies are closely related to, and substantially
      benefit, the business and corporate activities of Companies, (iii) the financial
      and other operations of Companies are performed on a combined basis as if
      Companies constituted a consolidated corporate group, (iv) Companies will
      receive a substantial economic benefit from entering into this Note and will
      receive a substantial economic benefit from the application of each amount
      hereunder, in each case, whether or not such amount is used directly by any
      Company and (v) all loans hereunder are for the exclusive and indivisible
      benefit of the Companies as though, for purposes of this Note, the Companies
      constituted a single entity.

     

    3.16 Security
      Interest/Hypothec.
      The
      Holder has been granted (i) a security interest in certain assets of each
      Company and (ii) a hypothec on certain assets of Pneutech and Rousseau as more
      fully described in the Security Agreements to secure, inter
      alia,
      each of
      the Companies’ joint and several (solidary) obligations under this
      Note.

     

    3.17 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.

     

    3.18 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 each Company (or its agent) shall
      register this 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
      Companies of this Note to the new holder or the issuance by the Companies of
      a
      new instrument to the new holder, or (ii) transfer through a book entry system
      maintained by each Company (or its agent), within the meaning of Treasury
      Regulation Section 1.871-14(c)(1)(i)(B).

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

     

    3.19 Language.
      The
      parties have requested that this Note and the other documents contemplated
      hereby or relating hereto be drawn up in the English language. Les parties
      ont
      requis que cette convention ainsi que tous les documents qui y sont envisagés ou
      qui s’y rapportent soient rédigés en langue anglaise.

     

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

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

    IN
      WITNESS WHEREOF,
      each
      Company has caused this Secured Term Note to be signed in its name effective
      as
      of this 8th day of November, 2006.

    
      	 	 	 
	 	
              PNEUTECH
                INC.

            
	 
 	 
 	 
 
	 	By:  	
              /s/
                MICHAEL LUTHER

            
	 	
              

              Name:
                Michael Luther

            
	 	
              Title:
                CEO

            

    

     

    
      	 	 	 
	 	
              ROUSSEAU
                CONTROLS INC.

            
	 
 	 
 	 
 
	 	By:  	
              /s/
                MICHAEL LUTHER

            
	 	
              

              Name:
                Michael Luther

            
	 	
              Title:
                CEO

            

    

     

    
      	 	 	 
	 	
              HYDRAMEN
                FLUID POWER LIMITED

            
	 
 	 
 	 
 
	 	By:  	
              /s/
                MICHAEL LUTHER

            
	 	
              

              Name:
                Michael Luther

            
	 	
              Title:
                CEO

            

    

     

    
      
         

      

      
        11THIS
        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 79,333,341 Shares of Common Stock of

      Thomas
        Equipment, Inc.

      (subject
        to adjustment as provided herein)

       

      COMMON
        STOCK PURCHASE WARRANT

       

      
        	No. L-5	
                Issue
                  Date: November 8, 2006

              

      

       

      THOMAS
        EQUIPMENT, INC., a corporation organized under the laws of the State of Delaware
        (“Company”), hereby certifies that, for value received, ______________, 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 November 8, 2016 (the “Expiration Date”), up
        to 79,333,341 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.

       

      (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 $0.01 per
        share.

       

      (e)  The
        term
“Note” refers to that certain Secured Term Note dated as of the date hereof
        among the Holder, Pneutech Inc., Rousseau Controls Inc. and Hydramen Fluid
        Power
        Limited in the original principal amount of $2,000,000, as amended, restated,
        modified and/or supplemented from time to time.

       

      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.

       

      (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.

       

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

       

      (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.

       

      2.2  Exercise.
        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), the Holder shall 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

       

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

       

      
        	
              	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)

              

      

       

      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

          
            

          

        

        
           

        

      

       

      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.  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.

       

      
        
           

        

        
          5

          
            

          

        

        
           

        

      

       

      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.

       

      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.

       

      
        
           

        

        
          6

          
            

          

        

        
           

        

      

       

      [BALANCE
        OF PAGE INTENTIONALLY LEFT BLANK;

      SIGNATURE
        PAGE FOLLOWS.]

       

      
        
           

        

        
          7

          
            

          

        

        
           

        

      

       

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

      
        	 	 	 
	 	
                THOMAS
                  EQUIPMENT, INC.

              
	 

                WITNESS:

              	 
 	 
 
	
              	By:  	
              
	

                 

                 

                 

                 

                
                  

                

                
                   

                

              	
                

                Name:

                
                  

                

                Title:

                
                  
 

              

      

       

      
        
           

        

        
          8

          
            

          

        

        
           

        

      

       

      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-5), hereby irrevocably elects to purchase the maximum number of shares
        of
        Common Stock covered by such Warrant pursuant to the 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):

       

      
        	________	
                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, to exercise
                  this
                  Warrant with respect to the maximum number of shares of Common
                  Stock
                  purchasable pursuant to the 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

          
            

          

        

        
           

        

      

       

      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.

       

      
        	
                Transferees

              	
                Address

              	
                Percentage
                  

                Transferred

              	
                Number

                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)

       

      
        
           

        

        
          10

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