Document:

SECURED
      TERM NOTE

     

    FOR
      VALUE
      RECEIVED, each of THOMAS EQUIPMENT, INC., a Delaware corporation (“Thomas
      Equipment”),
      and
      THOMAS VENTURES, INC., a Delaware corporation (“Thomas
      Ventures”)
      and
      together with Thomas Equipment, each a “Borrower”
and
      collectively the “Borrowers”)
      jointly and severally promises to pay to LAURUS MASTER FUND, LTD., c/o M&C
      Corporate Services Limited, P.O. Box 309 GT, Ugland House, South Church Street,
      George Town, Grand Cayman, Cayman Islands, Fax: 345-949-8080 (the “Holder”)
      or its
      registered assigns or successors in interest, on order, the sum of Four Million
      Dollars ($4,000,000), together with any accrued and unpaid interest hereon,
      on
      May 2, 2008 (the “Maturity
      Date”)
      if not
      sooner paid.

     

    Capitalized
      terms used herein without definition shall have the meanings ascribed to such
      terms in that certain Security and Purchase Agreement dated as of November
      9,
      2004 among Borrowers and the Holder (as amended by that certain letter agreement
      dated as of the date hereof by and among the Borrowers and the Holder and as
      otherwise heretofore or hereafter amended, modified, restated and supplemented
      from time to time, the “Security
      Agreement”).

     

    The
      following terms shall apply to this Note:

     

    ARTICLE
      I 

    INTEREST
      & REDEMPTION

     

    1.1. Interest
      Rate.
      Subject
      to Sections 2.9 and 4.7 hereof, interest payable on the outstanding principal
      amount of this Note (the “Principal
      Amount”)
      shall
      accrue at a rate per annum equal to the sum of (i) the “prime rate” published in
The
      Wall Street Journal
      from
      time to time (the “Prime
      Rate”),
      plus
      two percent (2%) (the “Contract
      Rate”).
      The
      Contract Rate shall be increased or decreased as the case may be for each
      increase or decrease in the Prime Rate in an amount equal to such increase
      or
      decrease in the Prime Rate; each change to be effective as of the day of the
      change in the Prime Rate. The Contract Rate shall not at any time be less than
      nine percent (9%). Interest shall be (i) calculated on the basis of a 360 day
      year, and (ii) payable monthly, in arrears, commencing on June 1, 2007 and
      on
      the first Business Day of each consecutive calendar month thereafter through
      and
      including the Maturity Date, whether by acceleration or otherwise (each date
      upon which interest shall be so payable, an “Interest
      Payment Date”).

     

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

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    ARTICLE
      II 

    EVENTS
      OF DEFAULT

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    
      
         

      

      
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    DEFAULT
      RELATED PROVISIONS

     

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

     

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

     

    ARTICLE
      III 

    DEFAULT
      PAYMENTS

     

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

     

    3.2. Default
      Payment Date.
      The
      Default Payment shall be due and payable immediately on the date that the Holder
      has exercised its rights pursuant to Section 3.1.

     

    ARTICLE
      IV 

    MISCELLANEOUS

     

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

     

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

     

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

     

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

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

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

     

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

     

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

     

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

     

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

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

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

     

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

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    IN
      WITNESS WHEREOF,
      each
      Borrower has caused this Secured Term Note to be signed in its name effective
      as
      of this 2nd
      day of
      May, 2007.

     

    
      	 	 	 
	 	
              THOMAS
                EQUIPMENT, INC. 

            
	 
 	 
 	 
 
	
            	By:  	/s/
              MICHAEL LUTHER
	 	
              

              Name:
                Michael Luther

            
	 	
              Title:
                CRO

            

    

     

    
      	 	 	 
	 	
              
                THOMAS
                  VENTURES,
                  INC.

              

            
	 
 	 
 	 
 
	
            	By:  	/s/
              MICHAEL LUTHER
	 	
              

              Name:
                Michael Luther

            
	 	
              Title:
                CRO

            

    

     

    
      
         

      

      
        6THIS
      WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT
      HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY
      STATE SECURITIES LAWS. THIS WARRANT AND THE COMMON STOCK ISSUABLE UPON EXERCISE
      OF THIS WARRANT MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED
      IN
      THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS WARRANT UNDER
      SAID
      ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY
      SATISFACTORY TO THOMAS EQUIPMENT, INC. THAT SUCH REGISTRATION IS NOT
      REQUIRED.

     

    Right
      to
      Purchase up to 562,998,132 Shares of Common Stock of

    Thomas
      Equipment, Inc.

    (subject
      to adjustment as provided herein)

     

    COMMON
      STOCK PURCHASE WARRANT

     

    
      	
              No.
                L-7

            	
              Issue
                Date: May 2, 2007

            

    

     

    THOMAS
      EQUIPMENT, INC., a corporation organized under the laws of the State of Delaware
      (“Company”), hereby certifies that, for value received, LAURUS MASTER FUND,
      LTD., or assigns (the “Holder”), is entitled, subject to the terms set forth
      below, to purchase from the Company (as defined herein) from and after the
      Issue
      Date of this Warrant and at any time or from time to time before 5:00 p.m.,
      New
      York time, through the close of business May 2, 2017 (the “Expiration Date”), up
      to 562,998.132 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. 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.

     

    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.

     

    
      
         

      

      
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    (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.

     

    
      
         

      

      
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    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.

     

    [BALANCE
      OF PAGE INTENTIONALLY LEFT BLANK;

    SIGNATURE
      PAGE FOLLOWS]

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

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

    
      	 	 	 
	 	
              THOMAS
                EQUIPMENT, INC.

            
	 
 	 
 	 
 
	
            	By:  	
              /s/
                MICHAEL LUTHER

            
	 	
              

              Name:
                Michael
                Luther

            
	 	
              Title:
                CRO

            

    

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    EXHIBIT
      A

     

    FORM
      OF SUBSCRIPTION

    (To
      Be
      Signed Only On Exercise Of Warrant)

     

    
      	
              TO:

            	
              Thomas
                Equipment, Inc.

              
                1475
                  32nd Avenue

              

              
                Lachine,
                  Quebec H8T 3J1, Canada

                Attention:
                  Luigi
                  LoBasso

              

            

    

     

    The
      undersigned, pursuant to the provisions set forth in the attached Warrant (No.
      L-7), 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.

    
      	 	 	 
	Date: _____________________	
            	
              _______________________________________

              
                (Signature
                  must conform to name of holder as 

                specified
                  on the face of the Warrant)

              

            
	 	
            
	 	
              Address:
                ______________________________
                
                               ______________________________

              

            

    

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

     

    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

            
	
              ________________________

            	 	
              
                ________________________

              

            	 	
              
                ________________________

              

            	 	
              
                ________________________

              

            
	
              
                ________________________

              

            	 	
              
                ________________________

              

            	 	
              
                ________________________

              

            	 	
              
                ________________________

              

            
	
              
                ________________________

              

            	 	
              
                ________________________

              

            	 	
              
                ________________________

              

            	 	
              
                ________________________

              

            
	
              
                ________________________

              

            	 	
              
                ________________________

              

            	 	
              
                ________________________

              

            	 	
              
                ________________________

              

            

    

     

    
      	 	 	 
	Date: _____________________	
            	
              ______________________________________

              
                
                  (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)

     

    
      
         

      

      
        9

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