GUARANTY
 
THIS GUARANTY (this “Guaranty”) is made effective as of December 28, 2006, by
Manchester Inc., a Nevada corporation (“Manchester”), Manchester Indiana
Acceptance, Inc., a Delaware corporation (“MIA”) and Manchester Indiana
Operations, Inc., a Delaware corporation (“MIO” and, together with Manchester
and MIA, “Guarantors” and each, a “Guarantor”), to and for the benefit of Palm
Beach Multi-Strategy Fund, L.P., a Delaware limited partnership (“Lender”).
 
WHEREAS, Manchester Indiana Funding, LLC, a Delaware limited liability company
(“Borrower”), and Lender have entered into that certain Loan and Security
Agreement of even date herewith (as amended, supplemented or modified from time
to time, the “Loan Agreement”), pursuant to which Borrower has agreed to borrow
from Lender, and Lender has agreed to lend to Borrower, certain amounts, all in
accordance with and subject to the terms and conditions set forth in the Loan
Agreement;
 
WHEREAS, Borrower, MIA, Manchester, MIO and Borrower have entered into that
certain Sale and Servicing Agreement of even date herewith (as amended,
supplemented or modified from time to time, the “Sale and Servicing Agreement”),
pursuant to which Borrower has agreed to purchase certain receivables
(“Receivables”) from MIA and Manchester has agreed to service such Receivables
for the benefit of Borrower.
 
WHEREAS, as security for its obligations under the Loan Agreement, the Borrower
has pledged to Lender, among other things, all of its right, title and interest
in and to the Receivables and the Sale and Servicing Agreement.
 
WHEREAS, it is a condition precedent to Lender’s obligation to make the Loan and
advances pursuant to the Loan Agreement, that Guarantor, among other things,
shall execute and deliver this Guaranty;
 
WHEREAS, Manchester and MIA own, directly or indirectly, 100% of the equity of
Borrower and Manchester owns 100% of the equity of MIA and MIO, and therefore
each Guarantor will benefit from the Loan to Borrower from Lender and each
Guarantor further acknowledges and agrees that (a) the Loan constitutes valuable
consideration to such Guarantor, (b) this Guaranty is intended to be an
inducement to Lender to execute, deliver and perform the Loan Agreement and the
other Loan Documents and to extend credit and the Loan to Borrower, and (c)
Lender is relying upon this Guaranty in making and advancing the Loan to
Borrower;
 
NOW, THEREFORE, in consideration of the foregoing and of the covenants and
agreements hereinafter set forth, the receipt and sufficiency of which are
hereby acknowledged, and as an inducement for Lender to enter into the Loan
Agreement and the other Loan Documents, Guarantors, intending to be legally
bound hereby, agrees as follows:
 
1. DEFINED TERMS.
 
(a) All capitalized terms used in this Guaranty and not defined herein shall
have the meanings given to such terms in the Loan Agreement. Whenever the
context so requires, each reference to gender includes the masculine and
feminine, the singular number includes the plural and vice versa. References to
section, article, annex, schedule, exhibit and like references are references to
this Guaranty unless otherwise specified. A Default or Event of Default shall
“continue” or be “continuing” until such Default or Event of Default has been
cured or waived by Lender in accordance with the Loan Agreement. References in
this Guaranty to any Person shall include such Person and its successors and
permitted assigns.
 

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(b) For purposes herein, the following terms shall have the following meanings:
 
“Guaranteed Obligations” means, subject to Section 2(f) below, collectively all
of the indebtedness, obligations, and undertakings that are guaranteed by the
Guarantors and described in subsections (a) and (b) of Section 2 of this
Guaranty.
 
“Loan Obligor” means any of Borrower, the Guarantors and any other endorsers,
guarantors or obligors, primary or secondary, of any or all of the Indebtedness.
 
“Security” means any rights, properties, or interests of the Secured Parties
under the Loan Documents, the Security Agreement or otherwise, which provide
recourse or other benefits to Lender in connection with the Guaranteed
Obligations or the non payment or non performance thereof, including collateral
(whether real or personal, tangible or intangible) in which the Secured Parties
have rights under or pursuant to any Loan Documents, guaranties of the payment
or performance of any Guaranteed Obligation, bonds, surety agreements, keep well
agreements, letters of credit, rights of subrogation, rights of offset, and
rights pursuant to which other claims are subordinated to the Guaranteed
Obligations.
 
2. THE GUARANTEED DEBT.
 
(a) Subject to Section 2(f) below, the Guarantors hereby jointly and severally,
irrevocably, absolutely, and unconditionally guarantee to Lender the prompt,
complete, and full payment when due, and no matter how the same shall become
due, of: (i) the Loan, including the Note and any other note that may be issued
from time to time to evidence the Loan and all principal thereof, all interest
thereon and all other sums payable thereunder; (ii) all obligations or
liabilities of any Loan Obligor; (iii) all other sums payable under the Loan
Documents, whether for principal, interest, fees or otherwise; and (iv) any and
all other indebtedness, obligations or liabilities which may at any time be owed
to Lender, whether incurred heretofore or hereafter or concurrently herewith,
under or pursuant to any of the Loan Documents. Without limiting the generality
of the foregoing, the Guarantors’ liability hereunder shall extend to and
include all post-petition interest, expenses, and other duties and liabilities
of Borrower described above in this subsection (a), or below in the following
subsection (b), which would be owed by Borrower but for the fact that they are
unenforceable or not allowable due to the existence of a bankruptcy,
reorganization, or similar proceeding involving Borrower.
 
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(b) (i) Subject to Section 2(f) below, the Guarantors hereby jointly and
severally irrevocably, absolutely, and unconditionally guarantee to Lender the
prompt, complete and full performance, when due, and no matter how the same
shall become due, of all obligations and undertakings of Borrower to Lender
under, by reason of, or pursuant to any of the Loan Documents.
 
(ii) Manchester and MIO hereby irrevocably, absolutely and unconditionally
guarantee to Lender the prompt, complete and full performance, when due, and no
matter how the same shall become due, of all obligations and undertakings of MIA
to Borrower and Lender in its capacity as Seller under the Sale and Servicing
Agreement.
 
(iii) MIA and MIO hereby irrevocably, absolutely, and unconditionally guarantee
to Lender the prompt, complete and full performance, when due, and no matter how
the same shall become due, of all obligations and undertakings of Manchester to
Borrower and Lender in its capacity as Servicer under the Sale and Servicing
Agreement.
 
(c) If the party liable therefor shall for any reason fail to pay any Guaranteed
Obligation, as and when such Guaranteed Obligation shall become due and payable,
whether at its stated maturity, as a result of the exercise of any power to
accelerate, or otherwise, the Guarantors will forthwith, upon demand by Lender,
pay such Guaranteed Obligation in full to Lender. If the party responsible
therefor shall for any reason fail to perform promptly any Guaranteed
Obligation, the Guarantors will forthwith, upon demand by Lender, cause such
Guaranteed Obligation to be performed or, if specified by Lender, provide
sufficient funds, in such amount and manner as Lender shall in good faith
determine, for the prompt, full and faithful performance of such Guaranteed
Obligation by Lender or such other Person as Lender shall designate.
 
(d) If either the party responsible therefor or the Guarantors fail to pay or
perform any Guaranteed Obligation as described in the immediately preceding
subsections (a), (b), or (c), the Guarantors will incur the additional
obligation to pay to Lender, and the Guarantors will forthwith upon demand by
Lender pay to Lender, the amount of any and all expenses, including reasonable
fees and disbursements of Lender’s counsel and of any experts or agents retained
by Lender, which Lender may incur as a result of such failure.
 
(e) As between each Guarantor and Lender, this Guaranty shall be considered a
primary and liquidated liability of such Guarantor.
 
(f) Notwithstanding any other provision of this Guaranty, the aggregate
liability of the Guarantors to Lender hereunder with respect to any Guaranteed
Obligations of the Borrower to Lender under the Loan Documents shall not exceed
ten percent (10%) of the amount of the Indebtedness from time to time. For the
avoidance of doubt, the limitation in the previous sentence shall not limit the
liability of the Guarantors hereunder with respect to the Guaranteed Obligations
of MIA as Seller to Borrower or Lender under the Sale and Servicing Agreement or
the Guaranteed Obligations of Manchester as Servicer to Borrower or Lender under
the Sale and Servicing Agreement, as provided in Section 2(b)(ii) and (iii),
above.
 
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(g) The liability of the Guarantors hereunder shall be limited to the maximum
amount of liability that can be incurred without rendering this Guaranty, as it
relates to the Guarantors, voidable under applicable law relating to fraudulent
conveyance or fraudulent transfer, and not for any greater amount.
 
3. DURATION. This Guaranty shall be irrevocable until all of the Guaranteed
Obligations have been completely and finally paid and performed and Lender has
no obligation to make any loans or other advances to Borrower, and all
obligations and undertakings of Borrower and MIA under, by reason of, or
pursuant to the Loan Documents have been completely performed, and this Guaranty
is thereafter subject to reinstatement as provided in Section 4(d). All
extensions of credit and financial accommodations heretofore or hereafter made
by Lender to Borrower pursuant to the Loan Agreement shall be conclusively
presumed to have been made in acceptance hereof and in reliance hereon. This
Guaranty shall be binding upon the undersigned Guarantors and their respective
successors and assigns, jointly and severally, and shall inure to the benefit of
Lender and its successors and assigns.
 
4. UNCONDITIONAL GUARANTY.
 
(a) This is an unconditional Guaranty; it is unlimited as to time, until
termination. Each Guarantor warrants that there are no conditions, oral or
otherwise, on the effectiveness of this Guaranty. This is a continuing guaranty
and shall apply to and cover all Guaranteed Obligations and renewals and
extensions thereof and substitutions therefor from time to time. No action which
Lender may take or omit to take in connection with any of the Loan Documents,
any of the Guaranteed Obligations (or any other indebtedness owing by Borrower
to Lender), or any Security, and no course of dealing of any Secured Party with
any Loan Obligor or any other Person, shall release or diminish the Guarantors’
obligations, liabilities, agreements or duties hereunder, affect this Guaranty
in any way, or afford the Guarantors any recourse against any Secured Party,
regardless of whether any such action or inaction may increase any risks to or
liabilities of any Secured Party or any Loan Obligor or increase any risk to or
diminish any safeguard of any Security. Without limiting the foregoing, the
Guarantors hereby expressly agree that Lender, directly or through the
Collateral Agent, may, from time to time, without notice to or the consent of
the Guarantors, do any or all of the following: (i) amend, change or modify, in
whole or in part, any one or more of the other Loan Documents and give or refuse
to give any waivers or other indulgences with respect thereto; (ii) neglect,
delay, fail, or refuse to take or prosecute any action for the collection or
enforcement of any of the Guaranteed Obligations, to foreclose or take or
prosecute any action in connection with any Security or Loan Document, to bring
suit against any Loan Obligor or any other Person, or to take any other action
concerning the Guaranteed Obligations or the Loan Documents; (iii) accelerate,
change, rearrange, extend, or renew the time, rate, terms, or manner for payment
or performance of any one or more of the Guaranteed Obligations (whether for
principal, interest, fees, expenses, indemnifications, affirmative or negative
covenants, or otherwise); (iv) compromise or settle any unpaid or unperformed
Guaranteed Obligation or any other obligation or amount due or owing, or claimed
to be due or owing, under any one or more of the Loan Documents; (v) take,
exchange, amend, eliminate, surrender, release, or subordinate any or all
Security for any or all of the Guaranteed Obligations, accept additional or
substituted Security therefor, and perfect or fail to perfect Lender’s rights in
any or all Security; (vi) discharge, release, substitute or add Loan Obligors;
(vii) apply all monies received from Loan Obligors or others, or from any
Security for any of the Guaranteed Obligations, as Lender may determine to be in
its best interest, without in any way being required to marshall Security or
assets or to apply all or any part of such monies upon any particular Guaranteed
Obligations;
 
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(b) No action or inaction of any Loan Obligor or any other Person, and no change
of law or circumstances, shall release or diminish the Guarantors’ obligations,
liabilities, agreements, or duties hereunder, affect this Guaranty in any way,
or afford any Guarantor any recourse against Lender. Without limiting the
foregoing, the obligations, liabilities, agreements, and duties of the
Guarantors under this Guaranty shall not be released, diminished, impaired,
reduced, or affected by the occurrence of any or all of the following from time
to time, even if occurring without notice to or without the consent of the
Guarantors: (i) any voluntary or involuntary liquidation, dissolution, sale of
all or substantially all assets, marshalling of assets or liabilities,
receivership, conservatorship, assignment for the benefit of creditors,
insolvency, bankruptcy, reorganization, arrangement, or composition of any other
Loan Obligor or any other proceedings involving any other Loan Obligor or any of
the assets of any other Loan Obligor under laws for the protection of debtors,
or any discharge, impairment, modification, release, or limitation of the
liability of, or stay of actions or lien enforcement proceedings against, any
other Loan Obligor, any properties of any other Loan Obligor, or the estate in
bankruptcy of any other Loan Obligor in the course of or resulting from any such
proceedings; (ii) the failure by Lender to file or enforce a claim in any
proceeding described in the immediately preceding subsection (i) or to take any
other action in any proceeding to which any other Loan Obligor is a party; (iii)
the release by operation of law of any other Loan Obligor from any of the
Guaranteed Obligations or any other obligations to Lender; (iv) the invalidity,
deficiency, illegality, or unenforceability of any of the Guaranteed Obligations
of any other Loan Obligor or any other Loan Document, in whole or in part, any
bar by any statute of limitations or other law of recovery on any of the
Guaranteed Obligations of any other Loan Obligor, or any defense or excuse of
any other Loan Obligor for failure to perform on account of force majeure, act
of God, casualty, impossibility, impracticability, or other defense or excuse
whatsoever; (v) the failure of any other Loan Obligor or any other Person to
sign any guaranty or other instrument or agreement within the contemplation of
any other Loan Obligor or Lender; (vi) the fact that the Guarantors may have
incurred directly part of the Guaranteed Obligations or is otherwise primarily
liable therefor; (vii) without limiting any of the foregoing, any fact or event
(whether or not similar to any of the foregoing) which in the absence of this
provision would or might constitute or afford a legal or equitable discharge or
release of or defense to a guarantor or surety other than the actual payment and
performance by the Guarantors under this Guaranty.
 
(c) Lender may invoke the benefits of this Guaranty before pursuing any remedies
against any Loan Obligor or any other Person and before proceeding against any
Security now or hereafter existing for the payment or performance of any of the
Guaranteed Obligations. Lender may maintain an action against the Guarantors on
this Guaranty without joining any other Loan Obligor therein and without
bringing a separate action against any other Loan Obligor.
 
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(d) If any payment to Lender by any Loan Obligor is held to constitute a
preference or a voidable transfer under applicable state or federal laws, or if
for any other reason Lender is required to refund such payment to the payor
thereof or to pay the amount thereof to any other Person, such payment to Lender
shall not constitute a release of any Guarantor from any liability hereunder,
and the Guarantors agree to pay such amount to Lender on demand and agree and
acknowledge that this Guaranty shall continue to be effective or shall be
reinstated, as the case may be, to the extent of any such payment or payments.
Any transfer by subrogation which is made as contemplated in Section 8 prior to
any such payment or payments shall (regardless of the terms of such transfer) be
automatically voided upon the making of any such payment or payments, and all
rights so transferred shall thereupon revert to and be vested in Lender.
 
5. DISCLOSURE OF CONDITION OF LOAN OBLIGORS. Each Guarantor warrants and
represents to Lender that: (a) this Guaranty is executed at the Borrower’s
request; (b) such Guarantor has established adequate means of obtaining from the
Loan Obligors on a continuing basis financial and other information pertaining
to the Loan Obligors’ affairs or business; and (c) such Guarantor is now and
will be familiar with the affairs, business, operation and condition of the Loan
Obligors and their assets. Each Guarantor hereby waives any duty on the part of
Lender to disclose to the Guarantors any matter relating to the affairs,
business, operation or condition of any Loan Obligor and its assets now known or
hereafter known to Lender. With respect to any debt of a Loan Obligor to Lender,
Lender need not inquire into the powers of the Borrower or the officers,
directors or agents acting or purporting to act on its behalf, and any debt
created in reliance upon the professed exercise of such powers shall be
guaranteed hereunder.
 
6. WAIVERS REGARDING THE GUARANTEED DEBT. Each Guarantor hereby waives, with
respect to the Guaranteed Obligations, this Guaranty, and the other Loan
Documents:
 
(a) notice of the incurrence of any Guaranteed Obligation by any Loan Obligor,
and notice of any kind concerning the assets, liabilities, financial condition,
creditworthiness, businesses, prospects, or other affairs of any Loan Obligor
(it being understood and agreed that: (i) each Guarantor shall take full
responsibility for informing itself of such matters, (ii) Lender shall have no
responsibility of any kind to inform the Guarantors of such matters, and (iii)
Lender is hereby authorized to assume that each Guarantor, by virtue of its
relationships with the Loan Obligors which are independent of this Guaranty, has
full and complete knowledge of such matters whenever Lender extends credit to
Borrower or takes any other action which may change or increase such Guarantor’s
liabilities or losses hereunder);
 
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(b) notice that Lender, any Loan Obligor, or any other Person has taken or
omitted to take any action under any Loan Document or any other agreement or
instrument relating thereto or relating to any Guaranteed Obligation;
 
(c) notice of acceptance of this Guaranty and all rights of any Guarantor under
any statute or law discharging such Guarantor from liability hereunder for
failure to sue on this Guaranty;
 
(d) default, demand, presentment for payment, and notice of default, demand,
dishonor, nonpayment, or nonperformance;
 
(e) notice of intention to accelerate, notice of acceleration, protest, notice
of protest, notice of any exercise of remedies (as described in this Guaranty or
otherwise), and all other notices of any kind whatsoever;
 
The Guarantors hereby consent and agree that renewals and extensions of time of
payment (including interest rate adjustments), surrender, release, exchange,
substitution, dealing with or taking of additional collateral, modifying any
obligations of, taking or releasing any other Loan Obligors, abstaining from
taking advantage of or realizing upon any Security and any and all other
forbearances or indulgences granted by Lender to the Borrower or any other Loan
Obligor or other Person may be made, granted or effected by Lender without
notice to the Guarantors and without affecting in any manner Guarantors’
liability hereunder. Each Guarantor hereby expressly consents to any impairment
of Security including, but not limited to, failure to perfect a security
interest and release of Security.
 
Any adjustment or compromise may be made by Lender with the Borrower or any
other party to the Indebtedness, and a lesser sum than the face amount thereof
may be accepted in full payment and discharge. Any of the Security granted by
the Borrower or any other Loan Obligor or other Person which Lender may hold or
which may come to it or its possession may be released or otherwise dealt with
by Lender in all respects as if this Guaranty were not in existence and the
obligation of the Guarantors shall in no way be affected thereby. Each Guarantor
hereby waives and foregoes any right in respect of any such action by Lender.
 
7. EXERCISE OF REMEDIES. Lender shall have the right to enforce, from time to
time, in any order and at Lender’s sole discretion, any rights, powers and
remedies which Lender may have under the Loan Documents or otherwise, including
judicial foreclosure, the exercise of rights of power of sale, the taking of a
deed or assignment in lieu of foreclosure, the appointment of a receiver to
collect rents, issues and profits, the exercise of remedies against personal
property, or the enforcement of any assignment of leases, rentals, or other
properties or rights, whether real or personal, tangible or intangible; and each
Guarantor shall be liable to Lender hereunder for any deficiency resulting from
the exercise by Lender of any such right or remedy even though any rights that
such Guarantor may have against Borrower or others may be destroyed or
diminished by exercise of any such right or remedy. No failure on the part of
Lender to exercise, and no delay in exercising, any right hereunder or under any
other Loan Document shall operate as a waiver thereof; nor shall any single or
partial exercise of any right preclude any other or further exercise thereof or
the exercise of any other right. The rights, powers and remedies of Lender
provided herein and in the other Loan Documents are cumulative and are in
addition to, and not exclusive of, any other rights, powers or remedies provided
by law or in equity. The rights of Lender hereunder are not conditional or
contingent on any attempt by Lender to exercise any of its rights under any
other Loan Document against any Loan Obligor or any other Person.
 
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8. LIMITED SUBROGATION.
 
(a) Until all of the Guaranteed Obligations have been paid and performed in
full, Guarantors shall have no right to exercise any right of subrogation,
reimbursement, indemnity, exoneration, contribution or any other claim which
they may now or hereafter have against or to any Loan Obligor or any Security in
connection with this Guaranty (including any right of subrogation under any Law,
as amended), and each Guarantor hereby waives any rights to enforce any remedy
which such Guarantor may have against Borrower and any right to participate in
any Security until such time. If any amount shall be paid to any Guarantor on
account of any such subrogation or other rights, any such other remedy, or any
Security at any time when all of the Guaranteed Obligations and all other
expenses guaranteed pursuant hereto shall not have been paid in full, such
amount shall be held in trust for the benefit of Lender, shall be segregated
from the other funds of the Guarantors and shall forthwith be paid over to
Lender to be held by Lender as collateral for, or then or at any time thereafter
applied in whole or in part by Lender against, all or any portion of the
Guaranteed Obligations, whether matured or unmatured, in such order as Lender
shall elect.
 
(b) If any Guarantor shall make payment to Lender of all or any portion of the
Guaranteed Obligations and if all of the Guaranteed Obligations shall be finally
paid in full, Lender will, at such Guarantor’s request and expense, execute and
deliver to such Guarantor (without recourse, representation or warranty)
appropriate documents necessary to evidence the transfer by subrogation to such
Guarantor of an interest in the Guaranteed Obligations resulting from such
payment by such Guarantor; provided that such transfer shall be subject to
Section 4(d) above and that without the consent of Lender (which Lender may
withhold in its discretion) such Guarantor shall have the right to be subrogated
to any claim or right against any Loan Obligor if: (i) such Loan Obligor has
become owned by Lender, (ii) the ownership of such Loan Obligor has otherwise
changed in the course of enforcement of the Loan Documents, or (iii) Lender has
otherwise released or wishes to release such Loan Obligor from its Guaranteed
Obligations.
 
9. SUCCESSORS AND ASSIGNS. None of the Guarantors’ rights or obligations
hereunder may be assigned or delegated, but this Guaranty and such obligations
shall pass to and be fully binding upon the successors of each Guarantor and its
assigns, jointly and severally, as well as the Guarantors. This Guaranty shall
apply to and inure to the benefit of Lender and its successors or assigns.
Without limiting the generality of the immediately preceding sentence, Lender
may, to the extent and in the manner provided for in the Loan Agreement, assign,
grant a participation in, or otherwise transfer any Guaranteed Obligation held
by it or any portion thereof, and Lender may, to the extent and in the manner
provided for in the Loan Agreement, assign or otherwise transfer its rights or
any portion thereof under any Loan Document, to any other Person, and such other
Person shall thereupon become entitled to all of the benefits in respect thereof
granted to Lender hereunder unless otherwise expressly provided by Lender in
connection with such assignment or transfer.
 
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10. SUBORDINATION AND OFFSET. Each Guarantor hereby subordinates and makes
inferior to the Guaranteed Obligations any and all indebtedness now or at any
time hereafter owed by a Loan Obligor to such Guarantor. Each Guarantor agrees
that upon the occurrence and during the continuation of any Event of Default it
will neither permit any Loan Obligor to repay such indebtedness or any part
thereof nor accept payment from any Loan Obligor of such indebtedness or any
part thereof without the prior written consent of Lender. If any Guarantor
receives any such payment without the prior written consent of Lender, the
amount so paid shall be held in trust for the benefit of Lender, shall be
segregated from the other funds of such Guarantor, and shall forthwith be paid
over to Lender to be held by Lender as collateral for, or then or at any time
thereafter applied in whole or in part by Lender against, all or any portions of
the Guaranteed Obligations, whether matured or unmatured, in such order as
Lender shall elect. Each Guarantor hereby grants to Lender a right of offset to
secure the payment of the Guaranteed Obligations and such Guarantor’s
obligations and liabilities hereunder, which right of offset shall be upon any
and all monies, securities and other property (and the proceeds therefrom) of
such Guarantor now or hereafter held or received by or in transit to Lender from
or for the account of such Guarantor, whether for safekeeping, custody, pledge,
transmission, collection or otherwise, and also upon any and all deposits
(general or special), credits and claims of such Guarantor at any time existing
against Lender. Upon the occurrence and during the continuation of any Default
or Event of Default, Lender is hereby authorized at any time and from time to
time, without notice to any Guarantor, to offset, appropriate and apply any and
all items hereinabove referred to against the Guaranteed Obligations and the
Guarantors’ obligations and liabilities hereunder irrespective of whether or not
Lender shall have made any demand under this Guaranty and although such
obligations and liabilities may be contingent or unmatured, Lender agrees
promptly to notify the Guarantors after any such offset and application made by
Lender, provided that the failure to give such notice shall not affect the
validity of such offset and application. The rights of Lender under this section
are in addition to, and shall not be limited by, any other rights and remedies
(including other rights of offset) which Lender may have.
 
11. REPRESENTATIONS AND WARRANTIES. The Guarantors hereby jointly and severally
represent and warrant to Lender as follows:
 
(a) The Recitals at the beginning of this Guaranty are true and correct in all
respects.
 
(b) The execution, delivery and performance by each Guarantor of this Guaranty
does not and will not contravene any law or governmental regulation or any
contractual restriction binding on or affecting each Guarantor or any of its
properties, and does not and will not result in or require the creation of any
Lien upon or with respect to any of its properties.
 
(c) No authorization or approval or other action by, and no notice to or filing
with, any governmental authority or other regulatory body or third party is
required for the due execution, delivery and performance by each Guarantor of
this Guaranty.
 
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(d) This Guaranty is a legal, valid and binding obligation of each Guarantor,
enforceable against such Guarantor in accordance with its terms except as
limited by bankruptcy, insolvency or similar laws of general application
relating to the enforcement of creditors’ rights.
 
(e) There is no action, suit or proceeding pending or, to the knowledge of the
Guarantors, threatened against or otherwise affecting any Guarantor before any
court, arbitrator or governmental department, commission, board, bureau, agency
or instrumentality which may materially and adversely affect the Guarantor’s
financial condition or its ability to perform its obligations hereunder.
 
12. COVENANTS. Each Guarantor hereby agrees to observe and comply with each of
the covenants and agreements made in the Loan Agreement, insofar as they refer
to such Guarantor, or the assets, obligations, conditions, agreements, business,
or actions of such Guarantor, or to the Loan Documents to which the Guarantors
are party.
 
13. NO ORAL CHANGE; AMENDMENTS. No amendment of any provision of this Guaranty
shall be effective unless it is in writing and signed by each Guarantor and
Lender, and no waiver of any provision of this Guaranty, and no consent to any
departure by any Guarantor therefrom, shall be effective unless it is in writing
and signed by Lender, and then such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given.
 
14. INVALIDITY OF PARTICULAR PROVISIONS. If any term or provision of this
Guaranty shall be determined to be illegal or unenforceable all other terms and
provisions hereof shall nevertheless remain effective and shall be enforced to
the fullest extent permitted by applicable law.
 
15. HEADINGS AND REFERENCES. The headings used herein are for purposes of
convenience only and shall not be used in construing the provisions hereof. The
words “this Guaranty,” “this instrument,” “herein,” “hereof,” “hereby” and words
of similar import refer to this Guaranty as a whole and not to any particular
subdivision unless expressly so limited. The phrases “this section” and “this
subsection” and similar phrases refer only to the subdivisions hereof in which
such phrases occur. The word “or” is not exclusive, and the word “including” (in
its various forms) means “including without limitation.” Pronouns in masculine,
feminine and neuter genders shall be construed to include any other gender, and
words in the singular form shall be construed to include the plural and vice
versa, unless the context otherwise requires.
 
16. NOTICES. Any notice or communication required or permitted hereunder shall
be given in the manner as provided in the Loan Agreement or in the case of any
party to such other address or to the attention of such other individual as
hereafter shall be designated in writing by such party if sent in accordance
herewith.
 
17. LIMITATION ON INTEREST. Lender and the Guarantors intend to contract in
strict compliance with applicable usury law from time to time in effect, and the
provisions of the Loan Agreement limiting the interest for which the Guarantors
are obligated are expressly incorporated herein by reference.
 
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18. LOAN DOCUMENT. This Guaranty is a Loan Document, as defined in the Loan
Agreement, and is subject to the provisions of the Loan Agreement governing Loan
Documents.
 
19. COUNTERPARTS; FAX. This Guaranty may be executed in any number of
counterparts, each of which when so executed shall be deemed to constitute one
and the same Guaranty. This Guaranty may be validly executed and delivered by
facsimile or other electronic transmission.
 
20. GOVERNING LAW; SUBMISSION TO PROCESS. THIS GUARANTY SHALL BE DEEMED A
CONTRACT AND INSTRUMENT MADE UNDER THE LAWS OF THE STATE OF NEW YORK AND SHALL
BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE
STATE OF NEW YORK AND THE LAWS OF THE UNITED STATES OF AMERICA, WITHOUT REGARD
TO PRINCIPLES OF CONFLICTS OF LAW. EACH GUARANTOR HEREBY AGREES THAT ANY LEGAL
ACTION OR PROCEEDING AGAINST SUCH GUARANTOR WITH RESPECT TO THIS GUARANTY MAY BE
BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES OF
AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK AS LENDER MAY ELECT, AND, BY
EXECUTION AND DELIVERY HEREOF, EACH GUARANTOR ACCEPTS AND CONSENTS FOR ITSELF
AND IN RESPECT TO ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE NON EXCLUSIVE
JURISDICTION OF THE AFORESAID COURTS. EACH GUARANTOR AGREES THAT SECTIONS 5-1401
AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK SHALL APPLY
TO THE LOAN DOCUMENTS AND WAIVES ANY RIGHT TO STAY OR TO DISMISS ANY ACTION OR
PROCEEDING BROUGHT BEFORE SAID COURTS ON THE BASIS OF FORUM NON CONVENIENS. EACH
GUARANTOR HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT, AND
AGREES THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE BY REGISTERED MAIL DIRECTED
TO IT AT THE ADDRESS SET FORTH IN SECTION 9.1 OF SCHEDULE A TO THE LOAN
AGREEMENT AND SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED UPON ACTUAL
RECEIPT THEREOF.
 
21. WAIVER OF JURY TRIAL. EACH GUARANTOR HEREBY COVENANTS AND AGREES THAT IN ANY
SUIT, ACTION OR PROCEEDING IN RESPECT OF ANY MATTER ARISING OUT OF THIS
GUARANTY, THE DOCUMENTS EXECUTED IN CONNECTION HEREWITH, ANY WRITTEN AGREEMENT
BETWEEN THE PARTIES HERETO, WHETHER NOW EXISTING OR HEREAFTER ARISING OR IN ANY
WAY RELATED TO, CONNECTED WITH OR INCIDENTAL TO THE DEALINGS OF THE PARTIES
HERETO OR TRANSACTIONS CONTEMPLATED HEREBY OR BY THE LOAN AGREEMENT OR OTHER
LOAN DOCUMENTS, WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE, TRIAL SHALL
BE TO A COURT OF COMPETENT JURISDICTION AND NOT TO A JURY; EACH GUARANTOR HEREBY
EXPRESSLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY. ANY PARTY MAY FILE AN
ORIGINAL COUNTERPART OR A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO
TRIAL BY JURY.
 
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22. ADVICE OF COUNSEL. Each Guarantor acknowledges that it has been advised by
counsel with respect to this Guaranty and the transactions governed hereby.
 
23. FINAL AGREEMENT. THIS WRITTEN AGREEMENT AND THE OTHER LOAN DOCUMENTS
REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES HERETO AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR OR CONTEMPORANEOUS ORAL AGREEMENTS OF THE
PARTIES HERETO. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES
HERETO.
 
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IN WITNESS WHEREOF, each Guarantor has executed and delivered this Guaranty as
of the date first written above.
 

       
MANCHESTER INC.,
a Nevada corporation
 
   
   
  By:    

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  Name:       

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  Title:     

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MANCHESTER INDIANA ACCEPTANCE, INC.,
a Delaware corporation
 
   
   
  By:    

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  Name:       

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  Title:     

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MANCHESTER INDIANA OPERATIONS, INC.,
a Delaware corporation
 
   
   
  By:    

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  Name:       

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  Title:     

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