QUALIFIED
      STOCK OPTION AGREEMENT

    


    THIS
      AGREEMENT (this “Agreement”), is effective as of the 25th
      day of April, 2007 (the “Grant Date”),
      between
      Manchester Inc. (the “Company”), and Stephen
      Scorgie (the
      “Optionee”).

    


    WHEREAS,
      the Board of Directors has determined that it is in the best interest of the
      Company to provide additional incentive to selected directors, officers,
      employees and consultants of the Company; and

    


    WHEREAS,
      the Company desires to grant to the Optionee an Option (as defined below) to
      purchase shares of its common capital stock under and for the purposes of the
      Company’s 2006 Equity Incentive Plan (the “Plan”); and

    


    WHEREAS,
      the Company and the Optionee understand and agree that any terms used herein
      have the same meanings as in the Plan.

    


    NOW,
      THEREFORE, in consideration of the mutual covenants hereinafter set forth and
      for other good and valuable consideration, the parties hereto agree as
      follows:

    


    1. Grant of Option.
      Effective as of the Grant Date, the Company hereby grants to the Optionee the
      right and option (the “Option”) to purchase all or any part of an aggregate of
100,000
      shares (the
      “Shares”) of the Company’s common stock, par value $.001 per share (the “Common
      Stock”), subject to, and in accordance with, the terms and conditions set forth
      in this Agreement. 

    


    2. Purchase Price.

    


    The
      price
      at which the Optionee shall be entitled to purchase the Shares upon the exercise
      of the Option shall be US$3.50
      per Share.
      

    


    3. Exerciseability
      of Option.

    


    The
      Option shall vest in accordance with the following schedule and become
      exercisable with respect to the following number of the shares covered by the
      Option so long as Optionee remains employed by the Company or continues to
      serve
      the Company in a consulting capacity as of each such vesting date: 50% of the
      Shares shall vest on the six month anniversary of the date of this Agreement
      and
      the remaining 50% of the Shares shall vest on the twelve month anniversary
      of
      the date of this Agreement.

    


    4. Duration of Option.

    


    (a) The
      Option shall be exercisable to the extent vested and in the manner provided
      herein until the fifth anniversary of the date hereof so long as Optionee
      remains in good standing with the Company as an employee or continuing in
      service as a consultant to the Company. In the event the Optionee is an employee
      of the Company and such employment of the Optionee is terminated for cause,
      the
      Option, whether or not exercisable, shall terminate on the effective date of
      the
      Optionee's termination of employment. If the employment of the Optionee is
      terminated for any reason other than cause, the Optionee may at any time within
      ninety (90) days after such termination of employment (but in no event beyond
      the expiration of the stated term of the Option), exercise the Option to the
      extent, but only to the extent, that the Option or portion thereof was
      exercisable on the date of the termination of employment, after which time
      the
      Option shall terminate in full. Nothing in this Agreement shall be interpreted
      or construed to confer upon the Optionee any right with respect to continuance
      of employment or consulting arrangements with the Company, nor shall this
      Agreement interfere in any way with the right of the Company to terminate the
      Optionee's employment or consulting services at any time.


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    QUALIFIED
      STOCK OPTION AGREEMENT

    
      
        

      

    

    


    


    (b)
       Notwithstanding
      any provision to the contrary herein, in
      the event of Optionee's death, his Option shall terminate on the date of death,
      provided that all or a portion of the Option to the extent that the right is
      exercisable but not exercised on the date of death may be exercised by
      Optionee’s survivors. Such Option must be exercised by the Optionee’s survivors,
      if at all, within six (6) months after the date of death of Optionee or, if
      earlier, within the originally prescribed term of the Option, notwithstanding
      that the decedent might have been able to exercise the Option as to some or
      all
      of the shares on a later date if the Optionee were alive and had continued
      to be
      a Optionee of the Company or of an affiliate thereof.

    


    5. Manner of Exercise and Payment.

    


    5.1 Subject
      to the terms and conditions of this Agreement the Option may be exercised by
      delivery of written notice to the Company in the form attached hereto, at its
      principal executive office. Such notice shall state that the Optionee is
      electing to exercise the Option and the number of Shares in respect of which
      the
      Option is being exercised and shall be signed by the person or persons
      exercising the Option. If requested by the Company, such person or persons
      shall
      (i) deliver this Agreement to an Officer of the Company who shall endorse
      thereon a notation of such exercise and (ii) provide satisfactory proof as
      to
      the right of such person or persons to exercise the Option.

    


    5.2 The
      notice of exercise described in Section 5.1 shall be accompanied by payment
      of
      the full purchase price for the Shares in respect of which the Option is being
      exercised, in cash or by check.

    


    5.3 Upon
      receipt of the notice of exercise and any payment or other documentation as
      may
      be necessary pursuant to Section 5.2 relating to the Shares in respect of which
      the Option is being exercised, the Company shall, subject to this Agreement,
      take such action as may be necessary to effect the transfer to the Optionee
      of
      the number of Shares as to which such exercise was effective.

    


    5.4 The
      Optionee shall not be deemed to be the holder of, or to have any of the rights
      of a holder with respect to any Shares subject to the Option until (i) the
      Option shall have been exercised pursuant to the terms of this Agreement and
      the
      Optionee shall have paid the full purchase price for the number of Shares in
      respect of which the Option was exercised, (ii) the Company shall have issued
      and delivered the Shares to the Optionee, and (iii) the Optionee's name
      shall have been entered as a stockholder of record on the books of the Company,
      whereupon the Optionee shall have full voting and other ownership rights with
      respect to such Shares during the period of ownership thereof.

     

    
      
        
        

      

      
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    QUALIFIED
      STOCK OPTION AGREEMENT

    
      
        

      

    

    


    


    5.5 In
      lieu
      of payment upon exercise of the Option as set forth above in this Section 5,
      the
      Optionee may alternatively surrender to the Company for cancellation a portion
      of this Option representing that number of unissued shares underlying this
      Option which is equal to the quotient obtained by dividing (A) the product
      obtained by multiplying the Purchase Price by the number of shares of stock
      being purchased underlying the Option upon such exercise, by (B) the difference
      obtained by subtracting the Purchase Price from the closing price of the
      Company's common stock on the date immediately preceding such date of such
      exercise ("Cashless Exercise"); or (iii) by a combination of the foregoing
      methods of payment selected by the Holder of this Option. 

    


    6. Notices.
      All
      notices, demands, instructions and other communications required or permitted
      to
      be given to or made upon either party hereto or any other person shall be in
      writing and shall be personally delivered or sent by registered or certified
      mail, postage prepaid, return receipt requested, or by a reputable courier
      delivery service, or by telegram (with messenger delivery), or by telecopy
      (confirmed by mail), and shall be deemed to be given for purposes of this
      Agreement on the day that such writing is delivered or sent to the intended
      recipient thereof in accordance with the provisions of this Section. Unless
      otherwise specified in a notice sent or delivered in accordance with the
      foregoing provisions of this Section, notices, demands, instructions and other
      communications in writing shall be given to or made upon the respective parties
      hereto, in the case of the Optionee to
      the
      address of record on file with the Company; and in the case of the Company,
      to
      the principal executive office of the Company addressed to the Corporate
      Secretary.

    


    7. Non-Transferability.

    


    The
      Option shall not be transferable other than by will or by the laws of descent
      and distribution or pursuant to a qualified domestic relations order as defined
      in the U.S. Internal Revenue Code. During the lifetime of the Optionee, the
      Option shall be exercisable only by the Optionee, except in the case of an
      Option transferred pursuant to a qualified domestic relations order.



    8. Securities
      Act Restrictions; Sales of Shares.

    


    The
      Optionee acknowledges that neither the U.S. Securities and Exchange Commission
      (the “SEC”) nor any state securities commission has approved the Option nor any
      Shares issuable upon exercise thereof, nor passed upon or endorsed the merits
      of
      this Option or the Shares; the Optionee further understands and agrees that
      neither the Option nor the Shares have been registered (i) under with the SEC
      under the Securities Act of 1933, as amended (the “Securities Act”) or (ii) with
      any state securities commission. The Optionee understands that the neither
      the
      Option nor the Shares may be offered, sold, transferred or otherwise disposed
      of
      in the U.S., its territories or possessions, or to persons known to be residents
      of the U.S. or to a U.S. person within the meaning of the Securities Act and
      the
      rules promulgated thereunder; provided that the Shares may be so sold after
      the
      earlier to occur of the effectiveness of a registration statement registering
      the Shares under the Securities Act or the expiration of the restricted period
      under Rule 144 promulgated under the Securities Act and thereafter only if
      the
      Shares are registered under the Securities Act or an exemption from the
      registration requirements under the Securities Act is available. The Optionee
      acknowledges that the Company has no obligation to cause the registration of
      this Option or the Shares under the Securities Act. Following exercise of some
      or all of the Option, Optionee agrees not to sell or transfer more than 25%
      of
      the aggregate of all such Shares underlying the Option during any single
      calendar quarter and that the certificates representing such Shares shall bear
      a
      legend to such effect. 

     

    
      
        
        

      

      
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      QUALIFIED
        STOCK OPTION AGREEMENT

      
        
          

        

      

      



    

    9. Adjustments.

    


    In
      the
      event of a change applicable to the entire class of shares of Common Stock,
      such
      as a stock split, stock dividend, or similar action with respect to all issued
      and outstanding shares of Common Stock, the Board of Directors shall make
      corresponding adjustments to the number of Shares subject to this Option and
      the
      purchase price for such Shares. For purposes of clarity, however, no adjustments
      shall be made with respect to issuances of Common Stock by the Company or any
      instruments exercisable or convertible into shares of Common Stock.


    


    10. Effect of a Liquidation, Merger or Consolidation.

    


    Upon
      the
      effective date of (i) the liquidation or dissolution of the Company or
      (ii) a merger or consolidation of the Company (a “Transaction”), the
      Option shall continue in effect in accordance with its terms and the Optionee
      shall be entitled to receive in respect of each Share subject to the Option,
      upon exercise of the Option, the same number and kind of stock, securities,
      cash, property or other consideration that each holder of a Share was entitled
      to receive in the Transaction in respect of a Share.

    


    11. Withholding of Taxes;
      Qualified Stock Option Treatment

    


    The
      Company shall have the right to deduct from any distribution of cash to the
      Optionee an amount equal to the federal, state and local income taxes and other
      amounts as may be required by law to be withheld (the “Withholding Taxes”) with
      respect to the Option. If the Optionee is entitled to receive Shares upon
      exercise of the Option, the Optionee shall pay the Withholding Taxes to the
      Company in cash prior to the issuance of such Shares. In satisfaction of the
      Withholding Taxes, the Optionee may make a written election, which may be
      accepted or rejected in the discretion of the Company, to have withheld a
      portion of the Shares issuable to him or her upon exercise of the Option, having
      an aggregate Fair Market Value, on the date preceding the date of such issuance,
      equal to the Withholding Taxes. This Option shall be construed as a qualified
      stock option for purposes of interpretation under the Internal Revenue Code
      of
      1986, as amended, and the rules and regulations promulgated
      thereunder.


    
      
        
        

      

      
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    QUALIFIED
      STOCK OPTION AGREEMENT

    
      
        

      

    

     

    12. No
      Assignment.

    


    Except
      as
      otherwise provided herein, the rights of the Optionee hereunder may not be
      assigned or otherwise transferred to any other party.

    


    13. Modification of Agreement.

    


    This
      Agreement may be modified, amended, suspended or terminated, and any terms
      or
      conditions may be waived, but only by a written instrument executed by the
      parties hereto.

    


    14. Severability.

    


    Should
      any provision of this Agreement be held by a court of competent jurisdiction
      to
      be unenforceable or invalid for any reason, the remaining provisions of this
      Agreement shall not be affected by such holding and shall continue in full
      force
      in accordance with their terms.

    


    15. Successors in Interest.

    


    All
      obligations imposed upon the Optionee and all rights granted to the Company
      under this Agreement shall be final, binding and conclusive upon the Optionee's
      heirs, executors, administrators, successors and (subject to Section 12 above)
      assigns of the parties hereto.

    


    16. Counterparts.
      This
      Agreement may be executed in several counterparts, each of which shall be deemed
      to be an original but all of which together will constitute one and the same
      instrument.

    


    17. Entire
      Agreement.
      This
      Agreement constitutes the entire agreement, and supersedes all prior agreements,
      of the parties hereto relating to the subject matter hereof, and there are
      no
      written or oral terms or representations made by either party hereto other
      than
      those contained herein. This Agreement cannot be modified, altered or amended
      except by a writing signed by all the parties hereto. No waiver by either party
      hereto of any provision or condition of this Agreement at any time shall be
      deemed a waiver of such provision or condition at any prior or subsequent time
      or of any other provision or condition at the same or any prior or subsequent
      time.


    18. Governing
      Law; Arbitration.

    


    (a)
      This
      Agreement shall be governed by and construed in accordance with the domestic
      laws of the State of Texas without giving effect to any choice of law or
      conflict of law provision or rule (whether of the State of Texas or any other
      jurisdiction) that would cause the application of the laws of any jurisdiction
      other than the State of Texas.

     

    
      
        
        

      

      
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      QUALIFIED
        STOCK OPTION AGREEMENT

      
        
          

        

      

      



    

    (b)
      The
      parties hereto agree to submit to arbitration any and all matters in dispute
      or
      in controversy among them concerning the terms and provisions of this Agreement.
      All such disputes and controversies shall be determined and adjudged by the
      decision of an arbitrator (hereinafter sometimes called the “Arbitrator”)
      selected by mutual agreement of the parties hereto or if the parties hereto
      fail
      to reach agreement on the Arbitrator within ten days after a party hereto has
      notified the other of its interest to submit a matter to arbitration, the
      Arbitrator shall be selected by the American Arbitration Association upon
      application made to it for such purpose by the parties hereto. Arbitration
      shall
      take place in Dallas, Texas or such other place as the parties hereto may agree
      in writing. The Arbitrator shall reach and render a decision in writing with
      respect to the amount, if any, of payment respecting the disputed matter.
      Notwithstanding anything to the contrary herein, in no event will any award
      include consequential or punitive damages of any kind or nature. The arbitration
      proceedings shall be held in accordance with the applicable rules of the
      American Arbitration Association. Any award rendered shall be final and
      conclusive upon the parties and adjudgment thereon may be entered in the highest
      court of the forum, state or federal, having jurisdiction. The fees and expenses
      of the Arbitrator and the respective fees and expenses of the parties hereto
      in
      connection with any such arbitration (including, without limitation, reasonable
      fees and expenses of legal counsel and consultants) shall be paid by the party
      against whom a decision by the Arbitrator is rendered. 

    


    [Signature
      Page Follows]


    
      
        
        

      

      
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      QUALIFIED
        STOCK OPTION AGREEMENT

      
        
          

        

      

      



    

    IN
      WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
      date
      first written above with the understanding that this Agreement shall constitute
      a legal, valid, binding and enforceable obligation of the Company and the
      Optionee, respectively. 

    


    
      	 	 	 
	 	MANCHESTER
              INC.
	 
 	 
 	 
 
	 	By:  	/s/ 
	 	
              
Name:
              Richard Gaines
	 	Title:  
              Corporate Secretary




    
      	 	 	 
	 	OPTIONEE
	 
 	 
 	 
 
	 	/s/   	Stephen
              Scorgie 
	 	
              

            


    

     


    
      
        
        

      

      
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    MANCHESTER
      INC. 

    


    STOCK
      OPTION AGREEMENT

    


    Notice
      of Exercise

    


    

      
        	
                Optionee

              	
                     
                  

              
	
                 

              	
                 

              
	
                Number
                  of Shares purchased pursuant

              
	
                to
                  Exercise of Option

              	
                     
                  

              
	
                 

              	
                 

              
	
                Exercise
                  Date

              	
                     
                  

              
	
                 

              	
                 

              
	
                Exercise
                  Price per Share

              	
                        
                  

              
	
                 

              	
                 

              
	
                Aggregate
                  Purchase Price

              	
                     
                  

              
	
                 

              	
                 

              
	
                Form
                  of Payment

              	
                              
                  

              


      



    


    By
      this
      exercise, the Optionee agrees to (i) promptly provide such additional documents
      as the Company may reasonably require and (ii) provide for the payment to the
      Company (in the manner designated by the Company) of tax withholding
      obligations, if any, relating to the exercise of this Option.

     

    

      
        	
                Optionee:
                  

              	
                         
                       

              


      

    

     

    
      	 	 	 
	 	By:  	 
	 	
              
Name:
              _____________________________________       
              
	 	Title: 
              _____________________________________


    

     

    Accepted:

    


    MANCHESTER
      INC.

    
       

      
        	 	 	 
	 	By:  	 
	 	
                
Name:
                _______________________________________
	 	Title: 
                _______________________________________