Execution
        Version

    

     

    STOCK
      PURCHASE AGREEMENT

     

    by
      and among

     

    MANCHESTER
      INDIANA OPERATIONS, INC.,

     

    MANCHESTER
      INDIANA ACCEPTANCE, INC.,

     

    MANCHESTER
      INC.,

     

    the

     

    SHAREHOLDERS

     

    of
      each of 

     

    F.S.
      ENGLISH, INC. AND GNAC, INC.

     

    and

     

    Rick
      Stanley, as Sellers’ Representative

     

    December
      2, 2006

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    TABLE
      OF CONTENTS

    

      

        
          	 	 	
                  Page

                
	
                  ARTICLE
                    1: 

                	
                  DEFINITIONS

                	
                  1

                
	
                  1.1

                	
                  Definitions

                	
                  1

                
	
                  1.2

                	
                  Accounting
                    Terms

                	
                  1

                
	 	 	 
	
                  ARTICLE
                    2: 

                	
                  PURCHASE
                    AND SALE

                	
                  2

                
	
                  2.1

                	
                  Purchase
                    and Sale

                	
                  2

                
	
                  2.2

                	
                  Purchase
                    Price

                	
                  2

                
	
                  2.3

                	
                  Payment
                    of Purchase Price and Adjustment for Selling Expenses

                	
                  2

                
	
                  2.4

                	
                  Payment
                    of Indebtedness and Selling Expenses

                	
                  3

                
	
                  2.5

                	
                  Allocation
                    to Sellers of the Acquisition Consideration

                	
                  3

                
	
                  2.6

                	
                  Merger
                    of the Acquired Companies into the Purchasers

                	
                  3

                
	 	 	 
	
                  ARTICLE
                    3: 

                	
                  REPRESENTATIONS
                    AND WARRANTIES CONCERNING SELLERS, SELLERS’ REPRESENTATIVE AND THE
                    TRANSACTION

                	
                  4

                
	
                  3.1

                	
                  Authority
                    and Capacity

                	
                  4

                
	
                  3.2

                	
                  Ownership
                    of Shares

                	
                  4

                
	
                  3.3

                	
                  Execution
                    and Delivery; Enforceability

                	
                  4

                
	
                  3.4

                	
                  Noncontravention

                	
                  4

                
	
                  3.5

                	
                  Legal
                    Proceedings

                	
                  5

                
	
                  3.6

                	
                  Acquisition
                    Consideration Representations

                	
                  5

                
	 	 	 
	
                  ARTICLE
                    4: 

                	
                  REPRESENTATIONS
                    AND WARRANTIES CONCERNING THE ACQUIRED COMPANIES

                	
                  8

                
	
                  4.1

                	
                  Organization
                    and Good Standing

                	
                  8

                
	
                  4.2

                	
                  Capital
                    Stock

                	
                  8

                
	
                  4.3

                	
                  Other
                    Ventures

                	
                  9

                
	
                  4.4

                	
                  Noncontravention

                	
                  9

                
	
                  4.5

                	
                  Financial
                    Statements

                	
                  10

                
	
                  4.6

                	
                  Absence
                    of Certain Changes or Events

                	
                  10

                
	
                  4.7

                	
                  Taxes

                	
                  12

                
	
                  4.8

                	
                  Employees

                	
                  13

                
	
                  4.9

                	
                  Employee
                    Benefit Plans and Other Compensation Arrangements

                	
                  14

                
	
                  4.10

                	
                  Environmental
                    Matters

                	
                  15

                
	
                  4.11

                	
                  Permits;
                    Compliance with Laws

                	
                  16

                
	
                  4.12

                	
                  Real
                    and Personal Properties

                	
                  16

                
	
                  4.13

                	
                  Accounts
                    Receivable

                	
                  18

                
	
                  4.14

                	
                  Inventories

                	
                  18

                
	
                  4.15

                	
                  Intellectual
                    Properties

                	
                  18

                
	
                  4.16

                	
                  Contracts

                	
                  19

                
	
                  4.17

                	
                  Litigation

                	
                  21

                
	
                  4.18

                	
                  Product
                    Warranty

                	
                  21

                
	
                  4.19

                	
                  Product
                    Liability

                	
                  21

                


        

         

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

         

        
          	
                  4.20

                	
                  Material
                    Suppliers and Customers

                	
                  22

                
	
                  4.21

                	
                  Insurance

                	
                  22

                
	
                  4.22

                	
                  Indebtedness

                	
                  22

                
	
                  4.23

                	
                  Books
                    and Records

                	
                  22

                
	
                  4.24

                	
                  Undisclosed
                    Liabilities

                	
                  23

                
	
                  4.25

                	
                  Related
                    Party Transactions

                	
                  23

                
	
                  4.26

                	
                  Sufficiency
                    of Assets

                	
                  23

                
	
                  4.27

                	
                  Brokerage

                	
                  23

                
	
                   

                	 	 
	
                  ARTICLE
                    5: 

                	
                  REPRESENTATIONS
                    AND WARRANTIES OF PURCHASERS AND PARENT

                	
                  24

                
	
                  5.1

                	
                  Organization;
                    Authorization

                	
                  24

                
	
                  5.2

                	
                  Execution
                    and Delivery; Enforceability

                	
                  24

                
	
                  5.3

                	
                  Governmental
                    Authorities; Consents

                	
                  24

                
	
                  5.4

                	
                  SEC
                    Filings

                	
                  24

                
	
                  5.5

                	
                  Financial
                    Statements

                	
                  25

                
	
                  5.6

                	
                  Absence
                    of Certain Changes

                	
                  25

                
	
                  5.7

                	
                  Capital
                    Stock

                	
                  25

                
	
                  5.8

                	
                  Compliance
                    with Laws and Obligations

                	
                  26

                
	
                  5.9

                	
                  Solvency

                	
                  26

                
	
                  5.10

                	
                  Franchise
                    Agreements

                	
                  26

                
	
                  5.11

                	
                  Brokerage

                	
                  26

                
	
                  5.12

                	
                  Legal
                    Proceedings

                	
                  27

                
	 	 	 
	
                  ARTICLE
                    6: 

                	
                  CLOSING
                    CONDITIONS; CLOSING

                	
                  27

                
	
                  6.1

                	
                  Conditions
                    to Purchasers’ Obligations

                	
                  27

                
	
                  6.2

                	
                  Conditions
                    to Sellers’ Obligations

                	
                  29

                
	
                  6.3

                	
                  The
                    Closing

                	
                  30

                
	
                  6.4

                	
                  Termination

                	
                  30

                
	
                  6.5

                	
                  Covenants
                    Pending Closing

                	
                  31

                
	
                  6.6

                	
                  Updates
                    to Disclosure Schedules

                	
                  32

                
	
                   

                	 	 
	
                  ARTICLE
                    7: 

                	
                  REGISTRATION
                    RIGHTS AND STOCK LEGENDS

                	
                  32

                
	
                  7.1

                	
                  Registration
                    Rights

                	
                  32

                
	
                  7.2

                	
                  Stock
                    Certificate Legends

                	
                  33

                
	 	 	 
	
                  ARTICLE
                    8: 

                	
                  COVENANTS
                    AND AGREEMENTS

                	
                  35

                
	
                  8.1

                	
                  Publicity

                	
                  35

                
	
                  8.2

                	
                  Expenses

                	
                  35

                
	
                  8.3

                	
                  No
                    Assignments

                	
                  35

                
	
                  8.4

                	
                  Sellers’
                    Representative

                	
                  35

                
	
                  8.5

                	
                  Tax
                    Matters

                	
                  36

                
	
                  8.6

                	
                  Restrictive
                    Covenants

                	
                  39

                
	 	 	 
	
                  ARTICLE
                    9: 

                	
                  INDEMNIFICATION

                	
                  42

                
	
                  9.1

                	
                  Indemnification
                    of Purchasers

                	
                  42

                
	
                  9.2

                	
                  Limitations
                    on Indemnification of Purchasers

                	
                  43

                


        

         

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

         

        
          	
                  9.3

                	
                  Indemnification
                    of Sellers

                	
                  44

                
	
                  9.4

                	
                  Limitations
                    on Indemnification of Sellers

                	
                  44

                
	
                  9.5

                	
                  Procedures
                    Relating to Indemnification

                	
                  45

                
	
                  9.6

                	
                  Exclusive
                    Remedy

                	
                  47

                
	 	 	 
	
                  ARTICLE
                    10: 

                	
                  CERTAIN
                    DEFINITIONS

                	
                  47

                
	 	 	 
	
                  ARTICLE
                    11: 

                	
                  CONSTRUCTION;
                    MISCELLANEOUS PROVISIONS

                	
                  56

                
	
                  11.1

                	
                  Notices

                	
                  56

                
	
                  11.2

                	
                  Entire
                    Agreement

                	
                  57

                
	
                  11.3

                	
                  Modification

                	
                  58

                
	
                  11.4

                	
                  Mediation,
                    Jurisdiction and Venue

                	
                  58

                
	
                  11.5

                	
                  Binding
                    Effect

                	
                  58

                
	
                  11.6

                	
                  Headings
                    and Construction

                	
                  58

                
	
                  11.7

                	
                  Number
                    and Gender; Inclusion

                	
                  59

                
	
                  11.8

                	
                  Counterparts

                	
                  59

                
	
                  11.9

                	
                  Third
                    Parties

                	
                  59

                
	
                  11.10

                	
                  Time
                    Periods

                	
                  59

                
	
                  11.11

                	
                  Governing
                    Law

                	
                  59

                
	
                  11.12

                	
                  Survival

                	
                  59

                
	
                  11.13

                	
                  Further
                    Assurances

                	
                  60

                
	
                  11.14

                	
                  Severability

                	
                  60

                


        

      

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    STOCK
      PURCHASE AGREEMENT

     

    THIS
      STOCK PURCHASE AGREEMENT (this "Agreement")
      is
      entered into as of the 2nd day of December, 2006, by and among Manchester
      Indiana Operations, Inc., a Delaware corporation ("Indiana
      Operations")
      and
      Manchester Indiana Acceptance, Inc., a Delaware corporation ("Indiana
      Acceptance,"
      and
      together with Indiana Operations, each a "Purchaser,"
      and
      collectively, the "Purchasers"),
      Manchester Inc., a Nevada corporation ("Parent"),
      each
      of the Persons identified on Schedule
      4.2.1
      (each, a
      "Seller,"
      and
      collectively, "Sellers"),
      and
      on behalf of himself and each Seller, Rick Stanley ("Sellers’
      Representative").


     

    RECITALS:

     

    1. As
      more
      particularly described in Section
      4.2.1,
      Sellers
      own all of the issued and outstanding shares of capital stock of each of F.S.
      English, Inc., an Indiana corporation ("FSE")
      and
      GNAC, Inc., an Indiana corporation ("GNAC"
      and
      together with FSE, each, an "Acquired
      Company",
      and
      together, the "Acquired
      Companies").

     

    2. Each
      Purchaser is a special purpose wholly-owned acquisition subsidiary of
      Parent.

     

    3. Indiana
      Operations desires to purchase all of the issued and outstanding capital stock
      of FSE (the "FSE
      Shares"),
      and
      Indiana Acceptance desires to purchase all of the issued and outstanding capital
      stock of GNAC (the "GNAC
      Shares,"
      and
      together with the FSE Shares, collectively the "Shares").

     

    4. Sellers’
      Representative is a direct beneficiary of the benefits and consideration
      received by Sellers as a result of the consummation of the transactions
      contemplated herein.

     

    Now,
      therefore, in consideration of the mutual representations, warranties, covenants
      and agreements set forth in this Agreement, Purchasers, Parent, Sellers and
      Sellers’ Representative hereby agree as follows:


     

    ARTICLE
      1: DEFINITIONS

     

    1.1 Definitions. 

     

    Certain
      terms used in this Agreement shall have the meanings set forth in Article 10,
      or
      elsewhere herein as indicated in Article 10.

     

    1.2 Accounting
      Terms. 

     

    Accounting
      terms used in this Agreement and not otherwise defined herein shall have the
      meanings attributed to them under GAAP except as may otherwise be specified
      herein.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      2: PURCHASE
      AND SALE

     

    2.1 Purchase
      and Sale. 

     

    (a) Subject
      to the terms and conditions of this Agreement, each Seller shall sell, assign,
      transfer and deliver to Indiana Operations, free and clear of all Liens, and
      Indiana Operations shall purchase from each Seller, all of such Seller’s right,
      title and interest in and to all of the FSE Shares owned by such
      Seller.

     

    (b) Subject
      to the terms and conditions of this Agreement, each Seller shall sell, assign,
      transfer and deliver to Indiana Acceptance, free and clear of all Liens, and
      Indiana Acceptance shall purchase from each Seller, all of such Seller’s right,
      title and interest in and to all of the GNAC Shares owned by such Seller. The
      FSE Shares and GNAC Shares of each Seller are referred to herein, as to each
      Seller, respectively, as the "Seller’s
      Respective Shares."

     

    2.2 Purchase
      Price. 

     

    The
      aggregate consideration paid to the Sellers in exchange for the Shares shall
      be
      as follows: 

     

    (a) Two
      Million U.S. Dollars ($2,000,000.00) (the "Cash
      Purchase Price");
      

     

    (b) One
      Million U.S. Dollars ($1,000,000.00)
      in the
      form of a promissory note in favor of Sellers substantially in the form attached
      hereto as Schedule
      2.2(b)
      (the
      "Seller
      Note");
      and

     

    (c) Such
      number of shares of common stock of Parent, par value $.001 per share,
      representing an aggregate amount equal to Three Million U. S. Dollars
      ($3,000,000.00) as determined by reference to the average of the closing prices
      of the common stock of Parent on the five (5) business days immediately
      preceding the Closing (the "Manchester
      Shares"
      and
      referred to collectively together with the Cash Purchase Price, the Seller
      Note
      and the Subordinated Note as the "Acquisition
      Consideration").
      

     

    2.3 Payment
      of Purchase Price and Adjustment for Selling Expenses.

     

    Sellers’
      Representative, not less than one (1) day prior to the Closing, shall have
      caused the Acquired Companies to estimate in good faith the Selling Expenses
      of
      the Acquired Companies, as of 12:01 AM on the Closing Date and delivered to
      the
      Purchasers a statement of such expenses. Subject to the terms and conditions
      of
      this Agreement, at the Closing, the Purchasers shall pay and deliver to Sellers
      (a) an amount (the "Closing
      Date Payment")
      by
      means of a wire transfer of immediately available cash funds to an account
      as
      directed by Sellers’ Representative prior to the Closing (the "Sellers’
      Account")
      equal
      to (i) the Cash Purchase Price less the Selling Expenses; and (ii) the
      Manchester Shares. The Purchasers shall, at their sole discretion, determine
      the
      allocation of Acquisition Consideration to be paid by each Purchaser in exchange
      for the FSE Shares and the GNAC Shares, respectively. 

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    2.4 Payment
      of Indebtedness and Selling Expenses. 

     

    (a) Except
      as
      provided in Section
      2.4(b),
      the
      Closing, the Purchasers shall (i) on behalf of the Acquired Companies, cause
      the
      Net Indebtedness to be repaid in full to the party or parties entitled thereto
      pursuant to the Payoff Letters, (ii) on behalf of Sellers, pay the Selling
      Expenses to the parties entitled thereto as set forth on a statement delivered
      by Sellers’ Representative to the Purchasers at Closing,
      and
      (iii) cause each personal guarantee of any Seller of any Indebtedness to be
      released.

     

    (b) Notwithstanding
      Section
      2.4(a)
      above,
      the Indebtedness held by Anthony Hamlin, Ivan Poor and Sellers' Representative
      (the "Subordinated
      Debt Holders")
      shall
      not be repaid, but shall be refinanced with the issuance of promissory notes
      to
      the Subordinated Debt Holders with an aggregate principal amount of One Million
      Five Hundred Thousand U.S. Dollars ($1,500,000.00) in the form attached hereto
      as Schedule
      2.4(b)
      (the
      "Subordinated
      Note").

     

    2.5 Allocation
      to Sellers of the Acquisition Consideration.

     

    The
      payment by Purchasers of the Acquisition Consideration into the Sellers’ Account
      shall constitute payment by each Purchaser to each Seller and satisfaction
      of
      Purchasers’ obligation to pay such amount hereunder. After such payment by
      Purchasers, Sellers’ Representative shall be solely responsible for allocating
      and distributing to each Seller his, her or its portion of the Acquisition
      Consideration based upon such Seller’s Respective Shares. Nothing in this
      Section 2.5 is intended or shall be construed to confer on any Seller any rights
      against Purchasers in respect of the portion of the Acquisition Consideration
      allocated to such Seller received after delivery of same into the Sellers’
Account.

     

    2.6 Merger
      of
      the Acquired Companies into the Purchasers.

     

    At
      the
      Closing, the officers of each Purchaser and the Acquired Companies shall
      execute, deliver and file with the Secretary of State of the State of Delaware
      the respective merger
      agreements,
      attached hereto as Exhibit A and Exhibit B (collectively, the "Delaware
      Merger Agreements"),
      and
      shall file with the Secretary of State of Indiana the Articles of Merger
      attached hereto as Exhibit C and D (collectively, the "Indiana
      Merger Filings"),
      and
      take any and all further actions reasonably necessary to cause the merger of
      FSE
      into Indiana Operations and GNAC into Indiana Acceptance, such that each of
      the
      Acquired Companies shall thereafter cease to exist and all business previously
      conducted by FSE shall thereafter be conducted by Indiana Operations and all
      business previously conducted by GNAC shall thereafter be conducted by Indiana
      Acceptance. The Purchasers acknowledge that an important consideration to the
      Sellers for this transaction is that the receipt of the Parent's stock by the
      Sellers shall be deemed to be a tax free reorganization under Section
      368(a)(2)(D) of the Code to the extent of the Acquisition Consideration which
      is
      delivered to Sellers in the form of Manchester Shares, and each of the Parent
      and Acquired Companies agree not to take any actions which would cause this
      transaction not to be a reorganization under Section 368(a)(2)(D) of the
      Code.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      3: REPRESENTATIONS
      AND WARRANTIES CONCERNING SELLERS, 

    SELLERS’
      REPRESENTATIVE AND THE TRANSACTION

     

    Each
      Seller and Sellers’ Representative, jointly and severally, represents and
      warrants to Purchasers as follows:

     

    3.1 Authority
      and Capacity.

     

    Seller
      or
      Sellers’ Representative, as applicable, possesses all requisite legal right,
      power, authority and capacity to execute, deliver and perform this Agreement,
      and each other agreement, instrument and document to be executed and delivered
      by Seller or Sellers’ Representative, as applicable, and consummate the
      transactions contemplated herein and therein. The execution, delivery and
      performance of this Agreement has been duly authorized by all requisite
      organizational action of such Seller (if such Seller is not a natural
      person).

     

    3.2 Ownership
      of Shares.

     

    Each
      Seller is the beneficial and record owner and has good and marketable title
      to
      all of such Seller’s Respective Shares free and clear of all Liens, except as
      otherwise stated on Schedule
      4.2.1(b)
      and
4.2.2(b).
      

     

    3.3 Execution
      and Delivery; Enforceability.

     

    This
      Agreement has been, and each other document, instrument or agreement to be
      executed and delivered by Seller or Sellers’ Representative, as applicable, in
      connection herewith will upon such delivery be, duly executed and delivered
      by
      such Seller or Sellers’ Representative, as applicable, and constitutes, or will
      upon such delivery constitute, the legal, valid and binding obligation of such
      Seller or Sellers’ Representative, as applicable, enforceable in accordance with
      its terms, except as such enforcement may be limited by applicable bankruptcy,
      insolvency, reorganization, moratorium or other laws of general application
      affecting enforcement of creditors’ rights or by principles of equity
      (collectively, the "Enforceability
      Exceptions").
      No
      Seller or Sellers’ Representative is a party to, subject to, or bound by any
      Order of any Governmental Authority, or any agreement which would prevent the
      execution or delivery of this Agreement by such Seller or Sellers’
Representative or the sale of such Seller’s Respective Shares to
      Purchasers.

     

    3.4 Noncontravention.

     

    (a) Except
      as
      set forth on Schedule
      3.4:
      (i) no
      Seller or Sellers’ Representative, as applicable, is required to submit any
      notice, report or other filing with any Governmental Authority in connection
      with his or its execution, delivery or performance of this Agreement or any
      other document, instrument or agreement to be executed and delivered by such
      Seller or Sellers’ Representative, as applicable, in connection herewith, (ii)
      such execution, delivery and performance will not result in a breach or
      violation of, or constitute a default (or an event that, with notice or lapse
      of
      time, or both, would constitute a default) under, or give rise to a right of
      any
      party to accelerate, amend, modify or terminate, or require payments under,
      or
      require the authorization, consent or approval from any third party or result
      in
      the creation of any Lien upon such Seller’s Respective Shares pursuant to any
      agreement to which such Seller or Sellers’ Representative, as applicable, is a
      party, and (iii) no consent, approval or authorization of any Governmental
      Authority or any other Person is required to be obtained by such Seller or
      Sellers’ Representative, as applicable, in connection with his or its execution,
      delivery and performance of this Agreement or any other document, instrument
      or
      agreement to be executed and delivered by such Seller or Sellers’
Representative, as applicable, in connection herewith or the consummation of
      the
      transactions contemplated hereby or thereby.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    (b) The
      execution and delivery by Seller or Sellers’ Representative, as applicable, of
      this Agreement and any other document, instrument or agreement to be executed
      and delivered by such Seller or Sellers’ Representative, as applicable, in
      connection herewith and the consummation by such Seller or Sellers’
Representative, as applicable, of the transactions contemplated hereby and
      thereby will not conflict with or violate any Laws applicable to such Seller
      or
      Sellers’ Representative, as applicable, or by which any of his or its properties
      or assets are bound or are subject.

     

    3.5 Legal
      Proceedings.

     

    There
      is
      no Order and no action, suit, arbitration, proceeding, investigation or claim
      of
      any kind whatsoever, at law or in equity, pending or, to the knowledge of
      Seller, threatened against such Seller, which would give a third party the
      right
      to enjoin or rescind the transactions contemplated by this Agreement or
      otherwise prevent such Seller from complying with the terms and provisions
      of
      this Agreement.

     

    3.6 Acquisition
      Consideration Representations.

     

    (a) Own
      Account. Each Seller is acquiring the Manchester Shares for his or her own
      account as principal, and not as a nominee or agent; for investment purposes
      only, and not with a view to, or for, resale, distribution or fractionalization
      thereof in whole or in part; and no other person has a direct or indirect
      beneficial interest in such Manchester Shares or any portion thereof. No Seller
      has any contract, undertaking, agreement or arrangement with any person to
      sell,
      transfer or grant participations in the Manchester Shares to such person or
      to
      any third person. 

     

    (b) No
      Advertisement. The Sellers are not acquiring the Manchester Shares as a result
      of or subsequent to any advertisement, article, notice or other communication
      published in any newspaper, magazine or similar media or broadcast over
      television or radio, or presented at any seminar or meeting, or pursuant to
      any
      solicitation of a subscription by a person not previously known to the Sellers
      in connection with investment securities generally.

     

    (c) No
      Obligation to Register. Except as otherwise provided in this Agreement, the
      Sellers understand that neither the Purchasers nor the Parent is under any
      obligation to register the Manchester Shares under the Securities Act of 1933,
      as amended (the "Securities
      Act"),
      or to
      assist the Sellers in complying with the Securities Act or the securities laws
      of any state of the United States or of any foreign jurisdiction. The Sellers
      understand that the Manchester Shares must be held indefinitely unless such
      Manchester Shares are registered under the Securities Act or an exemption from
      registration is available. Each Seller acknowledges that such person is familiar
      with Rule 144 of the rules and regulations of the Commission, as amended,
      promulgated pursuant to the Securities Act ("Rule
      144"),
      and
      that each Seller has been advised that Rule 144 permits resales only under
      certain circumstances. The Sellers understand that to the extent that Rule
      144
      is not available, such Seller will be unable to sell any Manchester Shares
      without either registration under the Securities Act or the existence of another
      exemption from such registration requirement.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    (d) Experience.
      Each of the Sellers is (1) experienced in making investments of the kind
      described in this Agreement and the related documents, (2) able, by reason
      of
      the business and financial experience of its officers (if an entity) and
      professional advisors (who are not affiliated with or compensated in any way
      by
      the Purchasers, the Parent or any of their affiliates or selling agents), to
      protect its own interests in connection with the transactions described in
      this
      Agreement, and the related documents, and (3) able to afford the entire loss
      of
      its investment in the Manchester Shares.

     

    (e) Exemption
      from Registration. Each of the Sellers acknowledges his understanding that
      the
      offering and sale of Manchester Shares is intended to be exempt from
      registration under the Securities Act. In furtherance thereof, in addition
      to
      the other representations and warranties of the Sellers made herein, the Sellers
      further represent and warrant to and agree with each of the Purchasers and
      the
      Parent and their affiliates as follows:

     

    (1) Each
      Seller realizes that the basis for the exemption may not be present if,
      notwithstanding such representations, such Seller is acquiring the Manchester
      Shares for a fixed or determinable period in the future, or for a market rise,
      or for sale if the market does not rise. No Seller has any such
      intention.

     

    (2) Each
      Seller has adequate means for providing for his current needs and personal
      contingencies and has no need for liquidity with respect to the acquisition
      of
      the Manchester Shares.

     

    (3) Each
      Seller has such knowledge and experience in financial and business matters
      as to
      be capable of evaluating the merits and risks of the prospective investment
      in
      the Manchester Shares.

     

    (4) Each
      Seller has been provided an opportunity for a reasonable period of time prior
      to
      the date hereof to obtain all publicly available information concerning the
      Parent.

     

    (f) No
      General Solicitation or Advertising in Regard to this Transaction. Each Seller
      acknowledges that neither the Purchasers, the Parent, nor any of their
      affiliates nor any person acting on their behalf solicited the Seller either
      (1)
      in connection with any general solicitation (as such term is used in Rule 502(c)
      of Regulation D) or general advertising with respect to any of the Manchester
      Shares, or (2) made any offers or sales of any security or solicited any offers
      to buy any security under any circumstances that would require registration
      of
      the Manchester Shares under the Securities Act.

     

    (g) Private
      Transaction. Each Seller acknowledges that this Agreement and the transactions
      contemplated hereby have been made pursuant to the exemption from registration
      under Section 4(2) of the Securities Act, as a non-public transaction that
      was
      privately negotiated by the parties hereto and their respective legal and other
      professional advisors. Each Seller hereby acknowledges that no information
      regarding this Agreement or the offer and sale of the Manchester Shares
      contemplated hereby has been disseminated by such Seller to any third parties,
      other than such Seller’s immediate family, legal counsel and/or professional
      business advisors. 

     

    
      
        
        

      

      
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    (h) Risk.
      Each Seller understands that an investment in the Manchester Shares is a
      speculative investment which involves a high degree of risk and the potential
      loss of his entire investment. 

     

    (i) SEC
      Documents. Each Seller has reviewed or received copies of the Form 8-K filed
      by
      the Parent with the SEC on October 11, 2006 and has had an opportunity to review
      all other SEC Reports filed by the Parent under the Securities Exchange Act
      of
      1934, as amended (the "Exchange
      Act")
      which
      are publicly available on the SEC’s website at www.sec.gov.

     

    (j) Reliance.
      Other than as set forth herein, the Sellers are not relying upon any other
      information, representation or warranty by the Purchasers or the Parent, or
      any
      officer, director, stockholder, agent or representative of the Purchasers or
      the
      Parent in determining to invest in the Manchester Shares. Each Seller has
      consulted, to the extent deemed appropriate by such Seller, with such Seller’s
      own advisers as to the financial, tax, legal and related matters concerning
      an
      investment in the Manchester Shares and on that basis believes that his or
      its
      investment in the Manchester Shares is suitable and appropriate for such Seller.
      

     

    (k) No
      Governmental Review. Each Seller is aware that no federal or state agency has
      (1) made any finding or determination as to the fairness of this investment,
      (2)
      made any recommendation or endorsement of the Manchester Shares, the Purchasers,
      or the Parent or (3) guaranteed or insured any investment in the Manchester
      Shares or any investment made by the Purchasers or the Parent. 

     

    (l) Price.
      Each Seller understands that the price of the Manchester Shares offered hereby
      bear no relation to the assets, book value or net worth of the Parent and were
      determined arbitrarily by the Parent. Each Seller further understands that
      there
      is a substantial risk of further dilution on his or its investment in the
      Parent. 

     

    (m) Full
      Disclosure. No representation or warranty made by any Seller to the Purchasers
      and/or the Parent in this Agreement omits to state a material fact necessary
      to
      make the statements herein, in light of the circumstances in which they were
      made, not misleading. There is no fact known to any Seller that has specific
      application to the Shares and that materially adversely affects or, as far
      as
      can be reasonably foreseen, materially threatens the Shares that has not been
      set forth in this Agreement. 

     

    (n) Compliance
      Undertakings. Each Seller hereby acknowledges that he/she is acquainted with
      the
      requirements of Section 16 and Section 13(d) of the Securities Exchange Act
      of
      1934 and the rules and regulations issued thereunder. Each Seller understands
      that, as a result of its acquisition of Shares, and in order to comply with
      Section 16 and Section 13(d) and the rules and regulations issued thereunder,
      each Seller may be required to file a report on Form 3 and a Schedule 13D and
      each such Seller hereby undertakes and agrees to make such filing in a timely
      manner if so required, provided, however, nothing herein shall be construed
      as
      acceptance on the part of any Seller to serve as an officer or director of
      the
      Parent. 

     

    
      
        
        

      

      
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    ARTICLE
      4: REPRESENTATIONS
      AND WARRANTIES CONCERNING THE 

    ACQUIRED
      COMPANIES

     

    Sellers
      and Sellers’ Representative, jointly and severally, represent and warrant to
      Purchasers as follows:

     

    4.1 Organization
      and Good Standing.

     

    Each
      of
      the Acquired Companies is a corporation organized, validly existing and in
      good
      standing under the laws of the state of its incorporation or organization (as
      the case may be). Each of the Acquired Companies has all requisite power and
      authority to own and lease its assets and to operate its business as the same
      are now being owned, leased and operated. Each of the Acquired Companies is
      duly
      qualified or licensed to do business as a foreign corporation or foreign entity
      in, and is in good corporate standing in, each jurisdiction in which the nature
      of its business or its ownership of its properties requires it to be so
      qualified or licensed, except where a failure to be so qualified or licensed
      would not reasonably be expected to have a Material Adverse Effect. Schedule
      4.1
      sets
      forth a true and complete list of (a) all jurisdictions in which each of the
      Acquired Companies is qualified or licensed to do business as a foreign
      corporation or foreign entity, (b) all directors and officers of each of the
      Acquired Companies, (c) all bank, payroll and securities brokerage accounts
      of
      each of the Acquired Companies and all authorized signers for each such account,
      and (d) all powers of attorney granted by each of the Acquired Companies to
      any
      third party that are currently in effect. All necessary corporate action on
      the
      part of the Acquired Companies with respect to the consummation of the
      transactions contemplated hereby has been taken. Each of the Acquired Companies
      has delivered to Purchasers a true, complete and correct copy of its
      Organizational Documents, each as currently in effect and reflecting any and
      all
      amendments thereto, for each of the Acquired Companies. Each of the
      Organizational Documents of each of the Acquired Companies is in full force
      and
      effect, and none of the Acquired Companies is in violation of any provision
      thereof.

     

    4.2 Capital
      Stock.

     

    4.2.1 Capital
      Stock of the Acquired Companies.
      The
      total number of shares of capital stock of all classes which each of the
      Acquired Companies have the authority to issue is Two Thousand (2,000) common
      shares, no par value per share, of which 1,000 of such common shares are voting
      shares and 1,000 of such common shares are non-voting shares. Of such authorized
      shares, Schedule
      4.2.1(a)
      sets
      forth the true and complete record and disclosure of all shares of the Acquired
      Companies which are issued and outstanding immediately preceding the Closing.
      There are no common shares held in treasury by the Acquired Companies. All
      of
      the Shares have been duly authorized and validly issued, are fully paid and
      nonassessable, and were issued in compliance with all applicable federal and
      state securities laws and any preemptive rights or rights of first refusal
      of
      any Person. Except as set forth on Schedule
      4.2.1(b),
      (a)
      there are no voting trusts, proxies, or other agreements or understandings
      with
      respect to the voting of any shares of capital stock of the Acquired Companies,
      (b) there does not exist nor is there outstanding any right or security granted
      or issued to any Person to cause the Acquired Companies to issue or sell any
      shares of capital stock or other securities of the Acquired Companies to any
      Person (including any warrant, stock option, call, put, preemptive right,
      convertible debt obligation, subscription for stock or securities convertible
      into or exchangeable for stock of the Acquired Companies, or any other similar
      right, security, instrument or agreement), or (c) there is no obligation,
      contingent or otherwise, of the Acquired Companies to (i) repurchase, redeem
      or
      otherwise acquire any share of the capital stock or other equity interests
      of
      the Acquired Companies, or (ii) provide funds to, or make any investment in
      (in
      the form of a loan, capital contribution or otherwise), or provide any guarantee
      with respect to the obligations of any other Person. 

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    4.2.2 Subsidiaries.
      Schedule
      4.2.2
      sets
      forth each Subsidiary of the Acquired Companies (each, an "Acquired
      Companies Subsidiary",
      and
      collectively the "Acquired
      Companies Subsidiaries").
      All
      of the issued and outstanding capital stock of each Acquired Companies
      Subsidiary is wholly owned by the Acquired Companies. There are no agreements,
      options, warrants or other rights or arrangements existing or outstanding which
      provide for the sale or issuance of any equity securities by any of the Acquired
      Companies Subsidiaries. Each Acquired Companies Subsidiary is validly existing
      and in good standing under the laws of the jurisdiction of its incorporation,
      has all requisite corporate power and authority necessary to own its properties
      and to carry on its businesses as now conducted and is qualified to do business
      in every jurisdiction in which its ownership of property or the conduct of
      its
      businesses as now conducted requires it to qualify, except in each such case
      where such failure would not have a Material Adverse Effect.

     

    4.3 Other
      Ventures. 

     

    Except
      as
      set forth on Schedule
      4.3,
      none of
      the Acquired Companies (i) owns of record or beneficially any equity interest
      in
      any other Person, (ii) is a partner or member of any partnership, limited
      liability company, joint venture or similar arrangement or agreement, or (iii)
      owns or holds the right to acquire any stock, partnership interest, joint
      venture interest or other equity ownership interest in any Person other than
      an
      Acquired Company. 

     

    4.4 Noncontravention.

     

    (a) Except
      as
      set forth on Schedule
      4.4(a),
      neither
      the execution and delivery of this Agreement or any agreement or document
      executed by Sellers pursuant hereto, nor the consummation by Sellers of the
      transactions contemplated hereby or thereby, nor compliance by Sellers with
      any
      of the provisions hereof or thereof, will (i) conflict with or result in a
      breach of any provisions of the Organizational Documents of any Acquired
      Companies, (ii) except as set forth on Schedule
      4.4(a),
      constitute or result in the breach of any term, condition or provision of,
      or
      constitute a default under (with or without notice or lapse of time, or both),
      or give rise to any right of termination, cancellation or acceleration with
      respect to, or give rise to any obligation of any Acquired Companies to make
      any
      payments under, or to the increased, additional, accelerated or guaranteed
      rights or entitlements of any Person under, or result in the creation or
      imposition of a Lien upon any property or assets of any Acquired Companies
      pursuant to any Material Contract or Permit to which any Acquired Companies
      is a
      party or by which any Acquired Companies or any of its properties or assets
      may
      be subject, or (iii) subject to receipt of the requisite approvals referred
      to
      on Schedule
      4.4(b),
      violate
      in any material respect any Order or Law applicable to the Acquired Companies
      or
      any of their respective properties or assets.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    (b) Other
      than as set forth on Schedule
      4.4(b),
      no
      consent or Permit is required to be obtained by the Acquired Companies or any
      Seller in connection with (i) the execution and delivery of this Agreement
      and
      the other agreements and documents to be entered into as contemplated herein,
      (ii) the compliance by Sellers with any of the provisions hereof or thereof
      or
      the consummation of the transactions contemplated hereby or thereby, or (iii)
      the continuing validity and effectiveness, immediately following the Closing,
      of
      any Permit or Material Contract of the Acquired Companies.

     

    4.5 Financial
      Statements. 

     

    (a) Attached
      to Schedule
      4.5
      are true
      and complete copies of (i) the audited consolidated financial statements of
      each
      of the Acquired Companies as of and for the fiscal years ended December 31,
      2005, 2004 and 2003, and (ii) the unaudited consolidated financial statements
      of
      the Acquired Companies as of and for the nine (9) month period ended September
      30, 2006 (collectively, the "Financial
      Statements").
      The
      Financial Statements have been prepared in accordance with GAAP, consistently
      applied, and present fairly, in all material respects, the consolidated
      financial position of the Acquired Companies as of the dates indicated and
      the
      results of operations for the periods then ended. The Financial Statements
      are
      true, correct, and complete in all material respects, and are consistent with
      the books and records of the Acquired Companies (which books and records are
      correct and complete). The audited consolidated balance sheets of the Acquired
      Companies, as of December 31, 2005, is herein referred to as the "Acquisition
      Balance Sheet."
      

     

    (b) Schedule
      4.5(b)
      sets
      forth a true and complete list of all contract receivables due and payable
      to
      the Acquired Companies, which discloses such receivables in three (3) separate
      categories: (i) the first category sets forth all contract receivables that
      are
      not past due more than sixty (60) or more consecutive days immediately preceding
      the Closing Date and
      are
      not otherwise in default as
      of the
      Closing Date (the "Current
      Receivables");
      (ii)
      the second category sets forth a list of all other contract receivables that
      are
      past due more than sixty (60) consecutive days immediately preceding the Closing
      Date or are otherwise in default as of the Closing Date ("Default
      Receivables");
      and
      (iii) the third category sets forth all contract receivables which have been
      charged off the Financial Statements and are no longer carried as assets of
      the
      Acquired Companies but nonetheless continue to represent valid contractual
      obligations of the parties thereto (the "Charged-Off
      Receivables").

     

    4.6 Absence
      of Certain Changes or Events. 

     

    Except
      as
      set forth in Schedule
      4.6,
      since
      the date of the Acquisition Balance Sheet (i) the Acquired Companies have
      conducted their respective businesses only in the ordinary course of business
      and have used commercially reasonable efforts to preserve such businesses
      intact, to keep available the services of the employees of the Acquired
      Companies and to preserve the goodwill of the suppliers and customers of the
      Acquired Companies, and (ii) there has not been any event, occurrence,
      circumstance or development that, individually or in the aggregate, has had
      or
      would reasonably be expected to have a Material Adverse Effect. Without limiting
      the generality of the foregoing, since the date of the Acquisition Balance
      Sheet: 

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    (a) there
      has
      not been any change in the Tax reporting or accounting policies or practices
      of
      any of the Acquired Companies, including practices with respect to (i)
      depreciation or amortization polices or rates, or (ii) the payment of accounts
      payable or the collection of accounts receivable; and none of the Acquired
      Companies have settled or compromised any Tax liability or made or rescinded
      any
      Tax election;

     

    (b) none
      of
      the Acquired Companies have incurred any Indebtedness other than pursuant to
      the
      agreements, notes and instruments described on Schedule
      4.22,
      or
      assumed, guaranteed, or endorsed the Indebtedness of any other Person, or
      canceled any debt owed to it or released any claim possessed by it, other than
      in the ordinary course of business;

     

    (c) none
      of
      the Acquired Companies have suffered any theft, damage, destruction or loss
      (without regard to any insurance) of or to any tangible asset or assets having
      a
      value in excess of Ten Thousand Dollars ($10,000) individually or Thirty
      Thousand Dollars ($30,000) in the aggregate;

     

    (d) none
      of
      the Acquired Companies have (i) made, granted, or committed to make or grant:
      (A) any bonus or any wage, salary or compensation increase to any (y) director
      or officer, or (z) employee (other than in the ordinary course of business),
      independent contractor or consultant, or (B) an increase of any benefit provided
      under any Acquired Companies Plan, (ii) adopted, amended or terminated any
      employee benefit plan, program or arrangement, or (iii) entered into, amended
      or
      terminated any employment agreement, deferred compensation arrangement,
      collective bargaining agreement or other similar arrangement with any of its
      current or prospective directors, officers, employees, independent contractors,
      consultants or stockholders.

     

    (e) none
      of
      the Acquired Companies have sold, assigned, transferred, licensed, or subjected
      to any Lien, or has committed to sell, assign, transfer, license, or subject
      to
      any Lien, any tangible or intangible assets for an amount in excess of Ten
      Thousand Dollars ($10,000) in
      the
      aggregate, except for sales of inventory in the ordinary course of business
      and
      except for Permitted Liens;

     

    (f) none
      of
      the Acquired Companies have purchased or leased, or have committed to purchase
      or lease, any asset for an amount in excess of Ten Thousand Dollars ($10,000)
      alone or in the aggregate, except purchases of inventory and supplies in the
      ordinary course of business, consistent with past practice; 

     

    (g) none
      of
      the Companies have made or authorized any capital expenditures or commitment
      for
      capital expenditures in an amount more than Ten Thousand Dollars ($10,000)
      individually or Thirty Thousand Dollars ($30,000) in the aggregate for additions
      to properties, plant, equipment, or intangible capital assets or aggregate
      capital expenditures and commitments, other than those capital expenditures
      or
      commitments therefor made or authorized in the ordinary course of
      business;

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    (h) none
      of
      the Acquired Companies have engaged in any transactions with, or entered into
      any Contracts with, any Affiliates of the Acquired Companies, except to the
      extent required by Law or any then existing agreements;

     

    (i) none
      of
      the Acquired Companies have made any loans, advances or capital contributions
      to, or investments in, any Person or paid any fees or expenses to any Seller
      or
      any director, officer, partner, stockholder or Affiliate of any Seller except
      with respect to payments to, and reimbursement of, fees and expenses of
      employees, directors and officers of the Companies in the ordinary course of
      business;

     

    (j) none
      of
      the Acquired Companies have amended, canceled, terminated, relinquished, waived
      or released any Contract or right except in the ordinary course of business
      and
      which, in the aggregate, would not be material to the Acquired Companies taken
      as a whole;

     

    (k) none
      of
      the Acquired Companies have granted any license or sublicense of any rights
      under or with respect to any Acquired Companies Intellectual
      Property;

     

    (l) none
      of
      the Acquired Companies have instituted or settled any action, claim, suit or
      proceeding that involved more than Ten Thousand Dollars ($10,000);

     

    (m) none
      of
      the Acquired Companies have made any amendment to its Organizational
      Documents;

     

    (n) none
      of
      the Acquired Companies have declared or paid any dividends or distributions
      or
      repurchased or redeemed any shares of capital stock or other equity
      interests;

     

    (o) none
      of
      the Acquired Companies have issued or sold any shares of capital stock or in
      its
      capital or other equity interests or options, warrants, calls, subscriptions
      or
      other rights to purchase any capital stock or other equity interests of any
      Acquired Companies or split, combined or subdivided the capital stock or other
      equity interests of any Acquired Companies; 

     

    (p) none
      of
      the Acquired Companies have revalued any of its respective assets, including
      writing off accounts receivable or revaluing inventory except in the ordinary
      course of business; or

     

    (q) none
      of
      the Acquired Companies have agreed to take any of the actions described in
      sub-clauses (a) through (p) above.

     

    4.7 Taxes.

     

    (a) All
      Taxes
      due and payable by any of the Acquired Companies or claimed and asserted by
      any
      Taxing Authority to be due and payable by any of the Acquired Companies have
      been timely paid other than Taxes which are not yet due or owing or that are
      being contested in good faith by appropriate proceedings, and for which, in
      each
      case, adequate reserves have been established in accordance with GAAP on the
      Acquisition Balance Sheet. All Tax Returns required to be filed by or on behalf
      of the Acquired Companies in all jurisdictions in which such Tax Returns are
      required to be filed (after giving effect to any duly obtained extensions of
      time in which to make such filings) have been duly and timely filed and are
      true
      and complete in all material respects and all such Taxes have been paid. Except
      as set forth on Schedule 4.7(a),
      there
      are no Tax claims, audits or proceedings pending or, to the Knowledge of
      Sellers' threatened in connection with the Acquired Companies. There are not
      currently in force any waivers or agreements binding upon the Acquired Companies
      for the extension of time or statute of limitations within which to file any
      Tax
      Return or for the assessment, payment or collection of any Tax. Each of the
      Acquired Companies has properly and timely withheld and paid all Taxes required
      to have been withheld and paid in connection with amounts paid or owing to
      any
      Person and has complied with the rules and regulations relating to the
      withholding and remittance of Taxes. None of the Acquired Companies is a party
      to or bound by any Tax allocation or Tax sharing agreement (whether or not
      written) with any other Person or has any contractual obligation to indemnify
      any other Person with respect to Taxes. No Acquired Companies is or has ever
      been a member of an affiliated group filing or required to file an affiliated,
      consolidated, combined or unitary Tax Return nor does any Acquired Companies
      have any liability for the Taxes of any Person under Treas. Reg. § 1.1502-6 (or
      any similar provision of Law), as a transferee or successor, by
      contract.

     

    
      
        
        

      

      
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    (b) No
      Liens
      for Taxes exist with respect to any of the assets or properties of the Acquired
      Companies. No claim has been made by any Taxing Authority in a jurisdiction
      where any Acquired Companies does not file Tax Returns that it is or may be
      subject to taxation by, or required to file any Tax Return in, that
      jurisdiction. None of the Acquired Companies have executed or entered into
      any
      written agreement with, or obtained or applied for any written consents or
      written clearances or any other Tax rulings from, nor has there been any written
      agreement executed or entered into on behalf of any of them with, any Taxing
      Authority, relating to material Taxes, including any IRS private letter rulings
      or comparable rulings of any Taxing Authority and closing agreements pursuant
      to
      Section 7121 of the Code or any predecessor provision thereof or any similar
      provision of any Law. No Seller is a foreign person within the meaning of
      Section 1445 of the Code.

     

    4.8 Employees.

     

    Except
      as
      set forth in Schedule
      4.8,
      there
      are no pending or, to the Knowledge of Sellers, threatened, controversies,
      grievances or claims by any employee or former employee of any of the Acquired
      Companies with respect to his or her employment, termination of employment
      or
      compensation and benefits that, if adversely decided, would have a Material
      Adverse Effect. Except as set forth in Schedule
      4.8,
      there
      has not been, since January 1, 2001, any controversies, grievances or
      claims by any employee or former employee of any of the Acquired Companies
      with
      respect to his or her employment, termination of employment or any compensation
      and benefits that involve more than Ten Thousand Dollars ($10,000) in claims
      or
      damages individually. Since January 1, 2001, none of the Acquired Companies
      is or has been a party to, or bound by, any collective bargaining agreement
      with
      any labor organization. Since
      January 1, 2001, the Acquired Companies have not experienced any strike,
      work stoppage, lock-up, slow-down or other material labor dispute or any attempt
      by organized labor or employees to cause the Acquired Companies to comply with
      or conform to demands of organized labor relating to its employees or recognize
      any union or collective bargaining units. Schedule
      4.8
      sets
      forth a complete list of all employees of any of the Acquired Companies as
      of
      July 31, 2006. No labor strike or stoppage is pending or to the Knowledge
      of Sellers threatened against any of the Acquired Companies. Each Acquired
      Companies is in material compliance with all Laws relating to the employment
      of
      labor, including all such Laws relating to wages, hours, the WARN Act,
      collective bargaining, discrimination, civil rights, safety and health, workers’
compensation and the collection and payment of withholding or social security
      Taxes and any similar Tax. There has been no "mass layoff" or "plant closing"
      as
      defined by the WARN Act with respect to any Acquired Companies since
      January 1, 2005.

     

    
      
        
        

      

      
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    4.9 Employee
      Benefit Plans and Other Compensation Arrangements.

     

    Set
      forth
      on Schedule
      4.9(a)
      is a
      true and complete list of all Acquired Companies Plans. Correct and complete
      copies of the following documents with respect to each Acquired Companies Plan
      have been made available to Purchasers, as applicable: (i) plans and related
      trust documents, insurance contracts or other funding arrangements and all
      amendments thereto, (ii) the Forms 5500s and all schedules thereto for the
      most
      recent two years, (iii) the most recent valuation report, (iv) the most recent
      IRS determination letter, (v) the most recent summary plan description and
      subsequent summaries of material modifications, (vi) the most recent audited
      financial statements, and (vii) written summaries of all non-written Plans.
      Except as set forth on Schedule
      4.9(b):

     

    (a) no
      Acquired Companies nor any ERISA Affiliate has, at any time during the six
      (6)
      years preceding the date hereof, sponsored, maintained, been liable under,
      terminated, participated in, been required to contribute to, or incurred
      withdrawal liability with respect of, a "multiemployer plan" within the meaning
      of Sections 3(37) or 4001(a)(3) of ERISA) or a plan subject to Section 412
      of
      the Code or Section 302 or Title IV of ERISA and no Acquired Companies nor
      any
      ERISA Affiliate has any accumulated funding deficiency (within the meaning
      of
      Section 302(a)(2) of ERISA and Section 412(a) the Code), whether or not waived,
      with respect to any such plan;

     

    (b) each
      of
      the Acquired Companies Plans and any related trusts currently satisfy in all
      material respects, and for all prior periods have satisfied in all material
      respects, in form and operation, all requirements for any Tax-favored treatment
      intended for such plan or trust or applicable to plans or trusts of its type,
      including, as applicable, requirements under Sections 105, 106, 125, 401(a),
      401(k) and 501 of the Code, and no event, transaction or condition has occurred
      or exists that is reasonably likely to result in the loss or limitation of
      such
      Tax-favored treatment;

     

    (c) all
      of
      the Acquired Companies Plans have been operated in compliance in all material
      respects with their respective terms and all Laws, and all contributions
      required under the terms of the Acquired Companies Plans or applicable Law
      have
      been timely made;

     

    (d) the
      Acquired Companies have no liability of any nature (whether known or unknown
      and
      whether absolute, accrued, contingent or otherwise) with respect to any Plan
      other than for contributions, payments or benefits due in the ordinary course
      under the current Acquired Companies Plans, none of which are
      overdue;

     

    
      
        
        

      

      
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    (e) neither
      the execution and delivery of this Agreement nor the consummation of the
      transactions contemplated hereby, will now or at any time in the future (i)
      result in any payment becoming due to any director, officer, employee, former
      employee, independent contractor, consultant or agent of any Acquired Companies
      from the Acquired Companies under any Acquired Companies Plan or otherwise,
      (ii)
      increase any benefits otherwise payable under any Acquired Companies Plan,
      (iii)
      result in any acceleration of the time of payment or vesting of any such
      benefits, or (iv) give rise to an obligation to pay any amount by any of the
      Acquired Companies or Purchasers (or any Affiliate of Purchasers) or any
      Acquired Companies Plan that would not be deductible by any of the Acquired
      Companies or Purchasers (or Affiliates of Purchasers) by reason of Section
      280G
      of the Code;

     

    (f) none
      of
      the Acquired Companies Plans provide life, medical, dental, vision or other
      welfare benefits to Persons who are not current employees of an Acquired
      Companies or their dependents or for periods longer than one month after
      termination of employment, except as required by Part 6 of Subtitle B of Title
      I
      of ERISA or any similar state Law; 

     

    (g) the
      Acquired Companies can terminate each Acquired Companies Plan without further
      material liability to the Acquired Companies (except for benefits accrued
      through the date of termination);
      and

     

    (h) each
      Acquired Companies Plan which is a "nonqualified deferred compensation plan"
      within the meaning of Code Section 409A(d)(1) has been maintained and
      administered in a manner consistent with avoiding adverse Tax consequences
      under
      Code Section 409A.

     

    4.10 Environmental
      Matters.

     

    (a) Except
      as
      set forth in Schedule
      4.10(a)
      with
      respect to each Acquired Companies:

     

    (i) there
      has
      been no generation, Treatment, Storage, Release, Disposal or transport of any
      Hazardous Material, regardless of quantity, at, on, under, or from any of the
      Real Property or any other facility or property owned, leased, occupied, or
      used
      by any Acquired Companies now or in the past;

     

    (ii) there
      are
      currently no, and have not been any, asbestos- or urea formaldehyde-containing
      materials incorporated into or used on the buildings or any improvements that
      are a part of the Real Property, or into other assets or products of any
      Acquired Companies; 

     

    (iii) there
      are
      no electrical transformers, capacitors, fluorescent light fixture with ballasts,
      or other equipment containing polychlorinated biphenyls on the Real
      Property;

     

    (iv) all
      paint
      or other Hazardous Material not in current, usable inventory has been removed
      from the Real Property and disposed of in compliance in all material respects
      with all Laws;

     

    
      
        
        

      

      
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    (v) no
      Acquired Companies has sent a Hazardous Material to a site that, pursuant to
      any
      Law (A) has been placed or proposed for placement on the National Priorities
      List or any similar state list, or (B) is subject to or the source of an Order,
      demand or request from a Government Authority to take "response," "corrective,"
      "removal," or "remedial" action, as defined in any Law, or to pay for the costs
      of any such action at any location;

     

    (vi) no
      Acquired Companies has received, any notice, Order or other communication from
      any Governmental Authority, citizens’ group, employee or other individual or
      entity claiming that it or its business is or may be liable for personal injury
      or property damage related to any Release, Treatment, Storage or Disposal of,
      or
      exposure to, any Hazardous Material; and

     

    (vii) there
      are
      no underground storage tanks or related piping, or surface impoundments located
      on, under or at the Real Property or any other facility or property owned,
      leased, occupied, or used by any Acquired Companies, now or in the past, nor
      have any underground tanks or piping been removed from any of the Real
      Property.

     

    (b) Schedule
      4.10(b)
      contains
      an accurate and complete list of all Phase I or Phase II environmental reports,
      audits and assessments prepared for and at the request of each Acquired
      Companies or in the possession of an Acquired Companies with respect to the
      Real
      Property, copies of which have been furnished to Purchasers.

     

    4.11 Permits;
      Compliance with Laws.

     

    Except
      as
      set forth on Schedule
      4.11(a),
      each of
      the Acquired Companies is in compliance with all applicable Laws, and possesses
      and is in compliance with all Permits. Except as set forth on Schedule
      4.11(b),
      since
      January 1, 2004, none of the Acquired Companies has received any written or
      oral notice from any Person alleging any material noncompliance with any
      applicable Law or Permit. Each Permit is valid and in full force and effect,
      and
      none of the Permits will lapse, terminate, expire or otherwise be impaired
      (as
      they related to the right or authorization of any Acquired Companies) as a
      result of the performance of this Agreement by Sellers, or the consummation
      of
      the transactions contemplated hereby. Each Permit is listed on Schedule
      4.11(c).
      There
      are no inquiries, demands, customer compliance or investigations with respect
      to
      any violation of Law being conducted by any Governmental Authority.

     

    4.12 Real
      and
      Personal Properties.

     

    4.12.1 Real
      Property.
      

     

    (a) Except
      as
      set forth on Schedule
      4.12.1(a),
      none of
      the Acquired Companies currently or ever has owned any real property.


     

    (b) Schedule
      4.12.1(b)
      identifies the parcels of real property that constitute the Leased Real Property
      and lists the leases relating to such Leased Real Property (the "Leases").
      The
      applicable Acquired Company as set forth on Schedule 4.12.1(b) has a valid
      and
      subsisting leasehold estate in the Leased Real Property. With respect to each
      Lease (i) such Lease is in full force and effect and all rents, required
      deposits and additional rents due to date pursuant to each Lease have been
      paid
      in full, (ii) there is no existing default by the applicable Acquired Company
      or, to Sellers' Knowledge, any default by the lessor of such Lease, (iii) such
      Acquired Companies has not received any written notice that it is in default
      under any of its Leases, and (iv) to Sellers' Knowledge, there exists no event,
      occurrence, condition or act (including the transactions contemplated by this
      Agreement), that with the giving of notice, the lapse of time or the happening
      of any further event or condition, would constitute a default by such Acquired
      Companies under any Lease. The
      Leases delivered to Purchasers are all of the leases and rental agreements,
      together with all amendments, that constitute the Leased Real Property and
      no
      Leases have been amended, modified or terminated since such
      delivery.

     

    
      
        
        

      

      
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    (c) Neither
      the whole nor any portion of the Real Property has been condemned,
      requisitioned, or otherwise taken by any public authority, and no written notice
      of any such condemnation, requisition, or taking has been received by any
      Acquired Companies. To Sellers' Knowledge, no such condemnation, requisition,
      or
      taking is threatened or contemplated. To Sellers' Knowledge, there are no public
      improvements proposed or in progress that will result in special assessments
      against or otherwise adversely affect any of the Real Property. No Acquired
      Companies has been notified in writing of future improvements by any public
      authority, any part of the cost of which would or might be asserted against
      any
      of the Real Property.

     

    (d) The
      zoning of each parcel of Real Property permits the existing improvements and
      uses of each Acquired Companies,
      subject
      to no variances, conditional use permits or other special use
      restrictions.

     

    (e) Each
      of
      the buildings, structures and improvements situated on the Real Property is
      in
      good condition and repair, reasonable wear and tear excepted. None of the
      buildings, structures and improvements situated on the Real Property, during
      the
      period of time during which such Real Property has been owned or leased by
      any
      Acquired Companies, has been damaged by fire or other casualty except for such
      damage as has been fully repaired and restored prior to the date of this
      Agreement. Each
      of
      the buildings, structures and improvements situated on the Real Property are
      located within the required set back, side yard and other conditions and
      requirements imposed by applicable Law with respect to such buildings,
      structures and improvements.

     

    (f) All
      of
      the systems located at or on the Real Property, including, without limitation,
      heating, ventilation, plumbing, electrical and air conditioning systems, and
      wiring, paving, roofing and other amenities, are in good working order. There
      has not been any recent material interruption in the delivery of adequate
      service of any utilities, including, water supply, propane gas or natural gas,
      storm and sanitary sewer facilities, electric power and telephone facilities,
      or
      other public authorities required in the operation of the business currently
      conducted at the Real Property and none of the Acquired Companies has
      experienced any material disruptions to its operations arising out of any
      recurring loss of electrical power, any water penetration, any flooding problems
      or limitations to access to public sewer and water, restrictions on septic
      service, etc. All utilities servicing the Real Property are publicly provided
      and maintained and such utilities are separately metered within each Real
      Property. To Sellers' Knowledge, all of the streets, roads and avenues adjoining
      and/or adjacent to the Real Property are publicly owned and maintained without
      assessment or charge to the Acquired Companies. To Sellers' Knowledge, no fact
      or condition exists which would result in the termination or impairment of
      the
      access of the Real Property to publicly dedicated roadways.

     

    
      
        
        

      

      
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    4.12.2 Personal
      Property.
      The
      Acquired Companies have good and marketable title to, or a valid leasehold
      interest in, each of the items of tangible personal property reflected on the
      Acquisition Balance Sheet or acquired thereafter (except for assets reflected
      thereon or acquired thereafter that have been disposed of in the ordinary course
      of business, since the date of the Acquisition Balance Sheet), free and clear
      of
      all Liens, except for Liens identified on Schedule
      4.12.2(a).
      The
      tangible personal property is free from material defects and in good operating
      condition and repair (reasonable wear and tear excepted). Except for the
      personal property leases indicated on Schedule
      4.12.2(b),
      no
      Person, other than the Acquired Companies, owns or utilizes any material
      equipment used by any of the Acquired Companies in the operation of their
      businesses. All of the tangible personal property and assets owned or leased
      by
      any of the Acquired Companies constitute all of the properties and assets used
      in the conduct of their respective businesses.

     

    4.13 Accounts
      Receivable.

     

    The
      accounts receivable reflected on the Acquisition Balance Sheet and accounts
      receivable arising after the date of the Acquisition Balance Sheet and reflected
      on the books and records of the Acquired Companies represent valid receivables
      arising from sales actually made or services actually performed and are
      collectible in the ordinary course of business, subject to reserves on the
      Acquisition Balance Sheet. Except as set forth on Schedule
      4.13,
      the
      accounts receivable reflected on the Acquisition Balance Sheet are stated
      thereon in accordance with GAAP, consistently applied, including allowances
      for
      doubtful accounts. Except as set forth on Schedule
      4.13,
      none of
      the Acquired Companies have received written notice of any contest, claim,
      or
      right of setoff with respect to its accounts receivable. As of the Closing
      Date,
      no Person will have a Lien on such receivables or any part thereof, and no
      agreement for deduction, free goods, discount or other deferred price or
      quantity adjustment will have been made to such receivables.

     

    4.14 Inventories.

     

    Subject
      to reserves on the Acquisition Balance Sheet, the inventories of the Acquired
      Companies are (i) in good and marketable condition, (ii) usable and saleable
      in
      the ordinary course of business, and (iii) stated thereon in accordance with
      GAAP, on a lower of cost or market basis, consistently applied. 

     

    4.15 Intellectual
      Properties.

     

    Schedule
      4.15(a)
      sets
      forth a complete and correct list of all of the following Acquired Companies
      Intellectual Property: registered patents and pending patent applications,
      registered trademarks and pending trademark applications, material unregistered
      trademarks, registered copyrights and Internet domain names. Schedule
      4.15(b)
      sets
      forth all material licenses (including software licenses) for which any of
      the
      Acquired Companies is a party either as a licensee or licensor (specifying
      its
      status) and any other material agreements under which the Acquired Companies
      grant or receive any rights to Intellectual Property. Except as set forth in
      Schedule
      4.15(c):

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

    (a) the
      Acquired Companies own and possess all right, title and interest in and to,
      or
      have a valid and enforceable right or license to use the Acquired Companies
      Intellectual Property as currently being used;

     

    (b) the
      Acquired Companies Intellectual Property is not subject to any Liens (other
      than
      Permitted Liens) and is not subject to any restrictions or limitations regarding
      use or disclosure other than pursuant to written license agreements applicable
      thereto;

     

    (c) to
      the
      Knowledge of Sellers, the issued patents and registered Intellectual Property,
      and the applications therefor, comprising the Acquired Companies Intellectual
      Property owned or used by any of the Acquired Companies are valid, subsisting,
      in full force and effect, and have not been cancelled, expired or
      abandoned;

     

    (d) (i)
      none
      of the Acquired Companies have infringed, misappropriated or otherwise
      conflicted with, any Intellectual Property of any third party; (ii) to the
      Knowledge of Sellers, the conduct of the businesses as currently conducted
      by
      the Acquired Companies does not infringe upon any Intellectual Property owned
      by
      any third party; and (iii) none of the Acquired Companies have received any
      written notice regarding any of the foregoing (including, without limitation,
      any demands or offers to license any Intellectual Property from any third
      party); and

     

    (e) (i)
      To
      the Knowledge of Sellers, no third party has infringed, misappropriated or
      otherwise conflicted with any of the Acquired Companies’ Intellectual Property;
      and (ii) no such claims have been brought or threatened against any third party
      by any of the Acquired Companies; and (iii) except as set forth on Schedule
      4.15(e): (x) all licenses listed on Schedule
      4.15(b)
      are in
      full force and effect and will remain in full force and effect upon the
      consummation of the transactions contemplated by this Agreement and are
      enforceable in accordance with their respective terms, subject to the
      Enforceability Exceptions; (y) the Acquired Companies have performed all
      material obligations required to be performed by them pursuant to the licenses
      and agreements listed on Schedule
      4.15(b);
      and (z)
      there is no existing or, to the Knowledge of Sellers, threatened default under
      or violation of any of the licenses or agreements listed on Schedule
      4.15(b)
      by any
      other party thereto.

     

    4.16 Contracts.

     

    Schedule
      4.16(a)
      lists
      all of the following currently effective written or oral agreements, contracts,
      leases, licenses, commitments, arrangements, letters of understanding or
      undertakings (each a "Contract"
      and
      collectively, "Contracts")
      to
      which any of the Acquired Companies are a party or by which any material assets
      of any of the Acquired Companies are bound or are subject:

     

    (a) Contracts
      or group of related Contracts, other than purchase orders entered into in the
      ordinary course of business, which involve commitments to make capital
      expenditures or which provide for the purchase of goods or services by any
      of
      the Acquired Companies from any one Person or group of related Persons under
      which the undelivered balance of such goods or services has an aggregate
      purchase price in excess of Ten Thousand Dollars ($10,000);

     

    
      
        
        

      

      
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    (b) Contracts
      or group of related Contracts, other than sales orders entered into in the
      ordinary course of business, which provide for the sale of goods or services
      by
      any of the Acquired Companies to any one Person or group of related Persons
      under which the undelivered balance of such goods or services has an aggregate
      sale price in excess of Ten Thousand Dollars ($10,000);

     

    (c) Contracts
      relating to Indebtedness or to the granting by any of the Acquired Companies
      of
      a Lien on any of their respective assets, or any guaranty by any of the Acquired
      Companies of any obligation in respect of borrowed money or
      otherwise;

     

    (d) Contracts
      with dealers, distributors or sales representatives;

     

    (e) employment,
      confidentiality and non-competition agreements with any employee, officer,
      consultant or management advisor;

     

    (f) Contracts
      which limit the freedom of any of the Acquired Companies to engage in any
      business or compete with any Person;

     

    (g) Contracts
      pursuant to which any of the Acquired Companies are a lessor or a lessee of
      any
      personal or real property, or holds or operates any tangible personal property
      owned by another Person;

     

    (h) stock
      option Contracts, warrants, convertible securities, or any other agreements,
      for
      the purchase or issuance of capital stock of any of the Acquired
      Companies;

     

    (i) Contracts
      restricting the transfer of capital stock or shares in the capital of any of
      the
      Acquired Companies, obligating any of the Acquired Companies to issue or
      repurchase shares of its capital stock or in its capital, or relating to the
      voting of stock or the election of directors of any of the Acquired
      Companies;

     

    (j) each
      partnership or joint venture Contract;

     

    (k) each
      Contract not included in subsection (e) providing for severance, retention,
      change in control or other similar payments;

     

    (l) each
      Contract with any Seller or Affiliate thereof or any current or former officer,
      director, stockholder or Affiliate of any Acquired Companies;

     

    (m) Contracts
      under which any Acquired Companies has made advances or loans to any other
      Person; and

     

    (n) any
      other
      Contract material to the businesses of the Acquired Companies.

     

    
      
        
        

      

      
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    Complete
      copies of each Contract required to be identified on Schedule
      4.16(a),
      including amendments, waivers, or other changes thereto (collectively, the
      "Material
      Contracts")
      have
      been made available to Purchasers. In the case of each oral Material Contract,
      Schedule
      4.16(a)
      also
      includes a brief description of such Contract. Each of the Material Contracts
      is
      in full force and effect and is the legal, valid and binding obligation of
      each
      party thereto and enforceable in accordance with its respective terms, subject
      to the Enforceability Exceptions. Except as set forth on Schedule
      4.16(b),
      each of
      the Acquired Companies (as the case may be) has performed in all material
      respects all obligations required to be performed by it pursuant to the Material
      Contracts, is not in breach or default thereunder (and no event has occurred
      that, with the giving of notice, lapse of time, or both, would constitute a
      breach or default) and no notice has been received that any other party to
      any
      Material Contract is in breach or default thereunder.

     

    4.17 Litigation.

     

    Except
      as
      set forth on Schedule
      4.17,
      there
      are no, and since January 1, 2001, there have been no, actions, suits,
      arbitrations, judgments, proceedings, investigations or claims of any kind
      whatsoever, at law or in equity, pending or threatened in writing, against
      any
      of the Acquired Companies involving more than Ten Thousand Dollars ($10,000)
      in
      claims or damages individually. Except as set forth on Schedule
      4.17,
      no
      Acquired Companies is a party or subject to any order, judgment, ruling,
      injunction, assessment, award, decree or writ from any Governmental Authority
      (each, an "Order").
      

     

    4.18 Product
      Warranty.

     

    Except
      for claims in the ordinary course of business, since January 1, 2006, there
      have been no claims made against the Acquired Companies alleging that any
      vehicle sold by any Acquired Company are defective and no such claims are
      currently pending or threatened against any Acquired Company. Except for
      conditions or warranties implied or imposed by applicable Laws or otherwise
      contained in any Acquired Company’s standard terms and conditions of sale, no
      Acquired Company has given a condition, warranty, or made a representation
      in
      respect of products or service supplied, manufactured, sold, leased or delivered
      by it. Each vehicle sold, leased or delivered by any Acquired Company has been
      in conformity with all applicable contractual commitments and all express and,
      to Sellers' Knowledge, implied warranties. Except as set forth on Schedule
      4.18,
      or for
      warranty claims based on the Acquired Companies’ standard terms and conditions
      of sale, no Acquired Company has any liability (and, to Sellers' Knowledge,
      there is no basis for any present or future action, suit, proceeding, hearing,
      investigation, charge, complaint, claim, or demand against any of them giving
      rise to any liability), for replacement or repair of any vehicle sold, leased
      or
      delivered by any Acquired Company or other damages in connection therewith.
      Section
      4.18
      includes
      copies of the standard terms and conditions of sale or lease for the Acquired
      Companies (containing applicable guaranty, warranty, and indemnity
      provisions).

     

    4.19 Product
      Liability.

     

    No
      claims
      alleging bodily injury or property damage as a result of any defect in any
      vehicle or the breach of any duty to warn, test, inspect or instruct of dangers
      therein (each a "Product
      Liability Claim"),
      have
      been made or threatened against any Acquired Company since January 1, 2001.
      To Sellers' Knowledge, there are no defects in the vehicles sold by any Acquired
      Company which could result in a Product Liability Claim, and there has not
      been
      any failure by any Acquired Company to warn, test, inspect or instruct of
      dangers which could form the basis for a product recall or any Product Liability
      Claim against such Acquired Company.

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

     

    4.20 Material
      Suppliers and Customers.

     

    Schedule
      4.20(a)
      sets
      forth the twenty (20) largest suppliers in terms of purchases ("Material
      Suppliers")
      and
      any repeat customers that are material in terms of sales ("Material
      Customers")
      of the
      Acquired Companies on a consolidated basis, in each case for the twelve (12)
      months ended December 31, 2005, 2004 and 2003. Except as set forth on
Schedule
      4.20(a),
      since
      December 31, 2005, no Material Customer has canceled or otherwise
      terminated or made any threats to cancel or otherwise terminate, its
      relationship with such Acquired Companies or to materially decrease its
      purchases from such Acquired Companies. Except as set forth on Schedule
      4.20(b),
      since
      December 31, 2005, no Material Supplier has canceled or otherwise
      terminated or to Sellers' Knowledge made any threats to cancel or otherwise
      terminate, its relationship with such Acquired Companies or to materially
      decrease its sales of supplies to such Acquired Companies. Except as set forth
      on Schedule
      4.20(c),
      since
      December 31, 2005, none of the Acquired Companies has experienced, and
      there do not exist, any material quality control or similar problems with the
      products currently being supplied or on order from the Material
      Suppliers.

     

    4.21 Insurance.

     

    Schedule
      4.21(a)
      contains
      an accurate and complete list of all insurance policies owned, held by or
      applicable to any of the Acquired Companies (or its respective assets or
      business). All such policies are in full force and effect, all premiums that
      are
      due and payable with respect thereto have been paid, and no written notice
      of
      denial of coverage, cancellation or termination has been received with respect
      to such policies. Such policies are valid, outstanding and enforceable policies.
      Except as set forth on Schedule
      4.21(b),
      To
      Sellers’ Knowledge, in the past twelve (12) months, no event specific to any of
      the Acquired Companies has occurred which could reasonably be expected to result
      in a material retroactive upward adjustment in premiums under any such insurance
      policies or which could reasonably be expected to result in a material
      prospective upward adjustment in such premiums. Except as set forth on
Schedule
      4.21(c),
      none of
      the Acquired Companies has any self-insured or co-insurance
      programs.

     

    4.22 Indebtedness.

     

    Schedule
      4.22
      sets
      forth a listing of all Indebtedness of any of the Acquired Companies and the
      Contracts and instruments under which such Indebtedness exists.

     

    4.23 Books
      and
      Records.

     

    The
      books
      and records of the Acquired Companies are true, correct and complete in all
      material respects, provided, however, nothing contained in this Section 4.23
      shall be deemed to modify or qualify any other representation or warranty set
      forth in this Agreement.

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

     

    4.24 Undisclosed
      Liabilities.

     

    Except
      as
      set forth on Schedule
      4.24,
      no
      Acquired Companies has any debt, liabilities or obligations whatsoever (whether
      or not accrued, absolute, contingent, unliquidated or otherwise, whether due
      or
      to become due and regardless of when asserted) arising out of transactions
      entered into prior to the Closing Date, any action or inaction on the part
      of
      the Acquired Companies prior to the Closing Date, or any state of facts existing
      prior to the Closing Date other than those (i) specifically reflected on and
      fully reserved against in the balance sheet contained in the Acquisition Balance
      Sheet, or (ii) incurred in the ordinary course of business since such
      date.

     

    4.25 Related
      Party Transactions.

     

    Except
      as
      set forth in Schedule
      4.25,
      no
      employee, officer, director, shareholder, partner or member of any Acquired
      Companies, any member of his or her immediate family or any beneficiary of
      any
      Seller (each a "Related
      Person")
      (a)
      owes any amount to any Acquired Companies nor does any Acquired Companies owe
      any amount to, or has any Acquired Companies committed to make any loan or
      extend or guarantee credit to or for the benefit of any Related Person (other
      than any participant loans under any Acquired Companies Plan and any payments
      to, and reimbursement of fees and expenses of, employees, directors and officers
      of the Acquired Companies in the ordinary course of business), (b) owns any
      property or right, tangible or intangible, that is used by any Acquired
      Companies or (c) has any claim or cause of action against any Acquired
      Companies, other than claims for accrued compensation or benefits arising in
      the
      ordinary course of employment or under any Acquired Companies Plans.


     

    4.26 Sufficiency
      of Assets.

     

    Except
      as
      set forth on Schedule
      4.26,
      the
      assets (tangible and intangible, real and personal) owned and leased by the
      Acquired Companies as of the date hereof and on the Closing Date are sufficient
      in all material respects for the Acquired Companies to carry their business
      as
      heretofore conducted and as proposed to be conducted hereafter.

     

    4.27 Brokerage.

     

    Except
      for fees or expenses which have already been paid, no Person is or will become
      entitled, by reason of any agreement or arrangement entered into or made by
      or
      on behalf of any of the Acquired Companies, to receive any commission,
      brokerage, finder’s fee or other similar compensation in connection with the
      consummation of the transactions contemplated by this Agreement.

     

    
      
        
        

      

      
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    ARTICLE
      5: REPRESENTATIONS
      AND WARRANTIES OF PURCHASERS
      AND 

    PARENT

     

    Each
      Purchaser and Parent, jointly and severally, represent and warrant to each
      Seller as follows:

     

    5.1 Organization;
      Authorization. 

     

    Each
      Purchaser is a corporation duly organized, validly existing and in good standing
      under the laws of the State of Delaware. Each Purchaser has all requisite power
      and authority to execute, deliver and perform this Agreement and each other
      agreement, instrument and document to be executed and delivered by or on behalf
      of such Purchaser in connection herewith. Each Purchaser was formed solely
      for
      the purpose of engaging in the transactions contemplated by this Agreement
      and
      the other documents contemplated hereby. Parent is a corporation duly organized,
      validly existing and in good standing under the laws of the State of Nevada.
      Parent has all requisite power and authority to execute, deliver and perform
      this Agreement and each other agreement, instrument and document to be executed
      and delivered by or on behalf of Parent in connection herewith.

     

    5.2 Execution
      and Delivery; Enforceability. 

     

    This
      Agreement has been, and each other document, instrument or agreement to be
      executed and delivered by each of Parent and Purchasers in connection herewith,
      will upon such delivery be, duly executed and delivered by each of Parent and
      Purchasers and constitutes, or will upon such delivery constitute, the legal,
      valid and binding obligation of each of Parent and Purchasers, enforceable
      in
      accordance with its terms, except as such enforcement may be limited by the
      Enforceability Exceptions.

     

    5.3 Governmental
      Authorities; Consents.

     

    No
      Purchaser is required to submit any notice, report or other filing with any
      Governmental Authority in connection with such Purchaser’s execution, delivery
      or performance of this Agreement or any other document, instrument or agreement
      to be executed and delivered by such Purchaser in connection herewith, and
      such
      execution, delivery and performance will not violate any Law by which Purchaser
      is bound. No consent, approval or authorization of any Governmental Authority
      or
      any other Person is required to be obtained by any Purchaser in connection
      with
      Purchaser’s execution, delivery and performance of this Agreement or any other
      document, instrument or agreement to be executed and delivered by such Purchaser
      in connection herewith or the consummation of the transactions contemplated
      hereby or thereby.

     

    5.4 SEC
      Filings. 

     

    Parent
      has filed all forms, reports and documents required to be filed by it with
      the
      SEC (collectively, the "Parent
      SEC Reports")
      on a
      timely basis in accordance with the Exchange Act and all rules and regulations
      promulgated by the SEC thereunder. The Parent SEC Reports filed prior to the
      date hereof and all similar documents filed prior to the Closing Date (i) were,
      or will be, as the case may be, prepared in all material respects in accordance
      with the requirements of the Securities Act or the Exchange Act, as the case
      may
      be, and (ii) did not, or will not, as the case may be, at the time they were
      or
      are filed (or if amended or superseded by a filing prior to the date of this
      Agreement, then on the date of such filing) contain any untrue statement of
      a
      material fact or omit to state a material fact required to be stated therein
      or
      necessary in order to make the statements therein, in the light of the
      circumstances under which they were made, not misleading. 

     

    
      
        
        

      

      
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    5.5 Financial
      Statements. 

     

    Each
      of
      the consolidated financial statements (including, in each case, any related
      notes thereto) contained in the Parent SEC Reports was prepared in accordance
      with generally accepted accounting principles applied on a consistent basis
      throughout the periods involved (except as may be indicated in the notes
      thereto), and each fairly presents in all material respects the consolidated
      financial position of Parent and its consolidated subsidiaries as at the
      respective dates thereof and the consolidated statements of income and cash
      flows for the periods indicated, except that the unaudited interim financial
      statements were or are subject to normal and recurring year-end
      adjustments. 

     

    5.6 Absence
      of Certain Changes. 

     

    Except
      as
      set forth in the Parent SEC Reports, there has not occurred since June 30,
      2006:
      (i) any Material Adverse Effect or any event, change or effect which is
      reasonably likely to have, individually or in the aggregate with other events,
      changes or effects, a Material Adverse Effect; (ii) any amendments or changes
      in
      the Certificate of Incorporation or Bylaws of Parent; (iii) any damage to,
      destruction or loss of any asset of Parent (whether or not covered by insurance)
      that is reasonably likely to individually or in the aggregate have a Material
      Adverse Effect; (iv) any material change by Parent in its accounting methods,
      principles or practices; or (v) any material revaluation by Parent of any of
      its
      assets, including, without limitation, writing off or writing down notes or
      accounts receivable or inventory other than in the ordinary course of business
      consistent with past practice. 

     

    5.7 Capital
      Stock.

     

    The
      total
      number of shares of capital stock of all classes which the Parent has the
      authority to issue is One Hundred Million (100,000,000) common shares, $0.001
      par value per share, and Ten Million (10,000,000) preferred shares, $0.001
      par
      value per share. Of such authorized shares, Thirty Two Million Seven Hundred
      and
      Eighty Seven Thousand Five Hundred (32,787,500) common shares are issued and
      outstanding as of the date hereof. There are no common shares held in treasury
      by the Purchasers or Parent. All of the common shares and preferred shares
      of
      the Parent have been duly authorized and validly issued, are fully paid and
      nonassessable, and were issued in compliance with all applicable federal and
      state securities laws and any preemptive rights or rights of first refusal
      of
      any Person. Except as set forth on Schedule
      5.7:
      (a)
      there are no voting trusts, proxies, or other agreements or understandings
      with
      respect to the voting of any shares of capital stock of the Parent, (b) there
      does not exist nor is there outstanding any right or security granted or issued
      to any Person to cause the Parent to issue or sell any shares of capital stock
      or other securities of the Parent to any Person (including any warrant, stock
      option, call, put, preemptive right, convertible debt obligation, subscription
      for stock or securities convertible into or exchangeable for stock of the
      Parent, or any other similar right, security, instrument or agreement), or
      (c)
      there is no obligation, contingent or otherwise, of the Parent to (i)
      repurchase, redeem or otherwise acquire any share of the capital stock or other
      equity interests of the Parent, or (ii) provide funds to, or make any investment
      in (in the form of a loan, capital contribution or otherwise), or provide any
      guarantee with respect to the obligations of any other Person. 

     

    
      
        
        

      

      
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    5.8 Compliance
      with Laws and Obligations. 

     

    Except
      as
      set forth on Schedule 5.8, neither Parent nor any Purchaser is in conflict
      with,
      or in default or violation of, (i) any Applicable Law or (ii) any note, bond,
      mortgage, indenture, contract, agreement, lease, license, permit, franchise
      or
      other instrument or obligation, except for any such conflicts, defaults or
      violations which is not reasonably likely to have, individually or in the
      aggregate, a Material Adverse Effect. 

     

    5.9 Solvency. 

     

    Parent
      is
      not now insolvent and will not be rendered insolvent by any of the transactions
      contemplated by this Agreement. As used in this Section
      5.9
      "insolvent" means that the sum of the debts and other probable liabilities
      of
      Parent exceeds the present fair saleable value of Parent's assets . Immediately
      after giving effect to the consummation of the transactions contemplated by
      this
      Agreement, (a) Parent will be able to pay its liabilities as they become due
      in
      the Ordinary Course of Business, (b) Parent will not have unreasonably small
      capital with which to conduct its present or proposed business, (c) Parent
      will
      have assets (calculated at fair market value) that exceed its liabilities,
      and
      (d) taking into account all pending and threatened litigation, final judgments
      against Parent, as the case may be, in actions for money damages are not
      reasonably anticipated to be rendered at a time when, or in amounts such that,
      Parent, as the case may be, will be unable to satisfy any such judgments
      promptly in accordance with their terms (taking into account the maximum
      probable amount of such judgments in any such actions and the earliest
      reasonable time at which such judgments might be rendered) as well as all other
      obligations of Parent. The cash available to Parent, after taking into account
      all other anticipated uses of the cash, will be sufficient to pay all such
      respective debts and judgments of Parent and each Purchaser promptly in
      accordance with their terms. 

     

    5.10 Franchise
      Agreements.

     

    Purchasers
      and Parent each acknowledge receipt of the three Second Renewal Franchise
      Agreements between Byrider Franchising, Inc. and F.S. English, Inc. dated
      February 23, 2006 (the "Franchise
      Agreements").
      

     

    5.11 Brokerage.

     

    No
      Person
      is or will become entitled, by reason of any agreement or arrangement entered
      into or made by or on behalf of Parent or Purchasers, to receive any commission,
      brokerage, finder’s fee or other similar compensation in connection with the
      consummation of the transactions contemplated by this Agreement.

     

    
      
        
        

      

      
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    5.12 Legal
      Proceedings. 

     

    There
      is
      no Order and no action, suit, arbitration, proceeding, investigation or claim
      of
      any kind whatsoever, in law or in equity, pending or, to the knowledge of
      Purchasers, threatened against Purchasers, which would give a third party the
      right to enjoin or rescind the transactions contemplated by this Agreement
      or
      otherwise prevent Purchasers from complying with the terms and provisions of
      this Agreement. There is no Order and no action, suit, arbitration, proceeding,
      investigation or claim of any kind whatsoever, in law or in equity, pending
      or,
      to the knowledge of Parent, threatened against Parent, which would give a third
      party the right to enjoin or rescind the transactions contemplated by this
      Agreement or otherwise prevent Parent from complying with the terms and
      provisions of this Agreement. 


     

    ARTICLE
      6: CLOSING
      CONDITIONS; CLOSING

     

    6.1 Conditions
      to Purchasers’ Obligations.

     

    The
      obligation of Purchasers to consummate the closing of the transaction
      contemplated in this Agreement is subject to the satisfaction or waiver, at
      or
      before the Closing, of the following conditions set forth in this Section
      6.1:

     

    (a) all
      filings, authorizations, approvals and consents shall have been made with or
      obtained from all applicable Governmental Authorities;

     

    (b) none
      of
      the parties hereto will be subject to any injunction, judgment, Order, decree
      or
      ruling that prohibits the consummation of the transactions contemplated by
      this
      Agreement;

     

    (c) Sellers’
      Representative, on behalf of Sellers, shall have executed and delivered to
      Purchasers a certificate stating that (i) in the aggregate, the representations
      and warranties of Sellers contained in Article 3 and Article 4 that are not
      qualified by materiality are true and correct in all material respects at and
      as
      of the Closing as though then made, and the representations and warranties
      of
      Sellers contained in Article 3 and Article 4 that are qualified by materiality
      are true and correct at and as of the Closing as though then made (except in
      each case for those representations and warranties that are as of an earlier
      date, which shall be true and correct in all respects or in all material
      respects, as applicable, as of such earlier date); and (ii) Sellers and Sellers’
Representative have performed or caused to have been performed in all material
      respects all of the covenants and agreements required by this Agreement to
      be
      performed by Sellers and Sellers’ Representative or the Acquired Companies prior
      to the Closing;

     

    (d) there
      shall not have occurred any facts, events, developments or circumstances that
      constitutes, or would reasonably be expected to constitute, a Material Adverse
      Effect with respect to the Acquired Companies;

     

    (e) delivery
      to Purchasers of all certificates for the Shares, duly endorsed for transfer
      or
      accompanied by a duly executed stock power or other appropriate instrument
      of
      assignment and transfer;

     

    
      
        
        

      

      
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    (f) delivery
      to Purchasers of the written resignation, effective as of the Closing, of each
      director and officer of the Acquired Companies; 

     

    (g) delivery
      to Purchasers of the Payoff Letters, together with terminations of any and
      all
      security interests in, and releases of any and all Liens (other than the
      Permitted Liens) on, the assets of the Acquired Companies;

     

    (h) delivery
      to Purchasers of a duly executed affidavit of non-foreign status for each Seller
      that complies with the Treasury Regulations promulgated under Section 1445
      of
      the Code;

     

    (i) delivery
      to Purchasers of certificates of corporate good standing as of the most recent
      practicable date from Secretary of State where each of the Acquired Companies
      is
      incorporated;

     

    (j) delivery
      to Purchasers of an employment agreement between Indiana Operations and Sellers’
Representative in mutually satisfactory form and substance;

     

    (k) delivery
      to Purchasers of executed lease agreements for the Leased Real Property set
      forth on Schedule
      6.2(g),
      acceptable in form and substance to Purchasers and the landlord thereof;


     

    (l) delivery
      to Purchasers of the Release Letters; 

     

    (m) delivery
      to Purchasers of the Delaware Merger Agreements executed by Sellers’
Representative, acceptable in form and substance to Purchasers; 

     

    (n) delivery
      to Purchasers of the
      Indiana Merger Filings executed
      by Sellers’ Representative,
      acceptable
      in form and substance to Purchasers; 

     

    (o) delivery
      to Purchasers of executed documentation from Byrider Franchising, Inc.
      acceptable to Purchasers relating to waiver of its right of first refusal with
      respect to the Acquired Companies;

     

    (p) delivery
      to Parent of definitive financing approval from its lender sufficient to
      consummate the Closing; 

     

    (q) Purchasers
      shall have received the written legal opinion(s) of counsel for Sellers,
      addressed to Purchaser, Parent and its lender(s) as of the Closing Date in
      the
      form to be mutually agreed upon; and

     

    (r) any
      other
      document required to be delivered to Purchasers pursuant to this Agreement
      and
      such other documents as reasonably requested by Purchasers required in
      connection with Purchasers’ financing of the transactions underlying this
      Agreement.

     

    
      
        
        

      

      
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    Any
      agreement or document to be delivered to Purchasers pursuant to this Section
      6.1, the form of which is not attached to this Agreement as an exhibit, shall
      be
      in form and substance reasonably satisfactory to Purchasers.

     

    6.2 Conditions
      to Sellers’ Obligations. 

     

    The
      respective obligations of Sellers to consummate the closing of the transaction
      contemplated in this Agreement are subject to the satisfaction, at or before
      the
      Closing, of the following conditions set forth in this Section 6.2:

     

    (a) all
      filings, authorizations approvals and consents shall have been made with or
      obtained from all applicable Governmental Authorities;

     

    (b) none
      of
      the parties hereto will be subject to any injunction, judgment, Order, decree
      or
      ruling that prohibits the consummation of the transactions contemplated by
      this
      Agreement;

     

    (c) Purchasers
      and Parent shall have executed and delivered to Sellers a certificate stating
      that (i) the representations and warranties of Purchasers and Parent contained
      in Article 5 that are not qualified by materiality are true and correct in
      all
      material respects at and as of the Closing as though then made and the
      representations and warranties of Purchasers and Parent contained in Article
      5
      that are qualified by materiality are true and correct at and as of the Closing
      as though then made (except in each case for those representations and
      warranties that are as of an earlier date, which shall be true and correct
      in
      all respects or in all material respects, as applicable, as of such earlier
      date), and (ii) Purchasers and Parent have performed or caused to have been
      performed in all material respects all of the covenants and agreements required
      by this Agreement to be performed by Purchaser and Parent prior to the
      Closing;

     

    (d) Sellers
      shall have received a certificate of corporate good standing as of the most
      recent practicable date from Secretary of State where the Purchasers and the
      Parent are incorporated;

     

    (e) Sellers’
      Representative shall have received documentation satisfactory to Sellers’
Representative that all personal guarantees related to the Indebtedness have
      been released;

     

    (f) delivery
      of the Delaware Merger Agreements executed by Purchasers, acceptable in form
      and
      substance to Sellers;

     

    (g) delivery
      of the
      Indiana Merger Filings executed by
      Purchasers, acceptable in form and substance to Sellers;

     

    (h) delivery
      of the Seller Note duly executed by Purchasers;

     

    (i) delivery
      of the Subordinated Note duly executed by Purchasers;

     

    
      
        
        

      

      
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    (j) delivery
      of the Guaranty of the Seller Note and the Subordinated Note duly executed
      by
      Parent (the "Guaranty");

     

    (k) delivery
      of the Security Agreement duly executed by Purchasers and Parent securing the
      Seller Note and the Subordinated Note (the "Security
      Agreement");
      

     

    (l) there
      shall not have occurred any facts, events, developments or circumstances that
      constitutes, or would reasonably be expected to constitute, a Material Adverse
      Effect with respect to the Parent; and 

     

    (m) Sellers
      shall have received the written legal opinion(s) of counsel for Purchasers
      and
      the Parent, addressed to the Sellers as of the Closing Date, in the form to
      be
      mutually agreed upon; and 

     

    (n) any
      other
      document required to be delivered to Sellers pursuant to this
      Agreement.

     

    Any
      agreement or document to be delivered to Sellers pursuant to this Section 6.2,
      the form of which is not attached to this Agreement as an exhibit, shall be
      in
      form and substance reasonably satisfactory to Sellers’
Representative.

     

    6.3 The
      Closing. 

     

    The
      closing of the transactions contemplated hereby (the "Closing")
      shall
      take place simultaneously at the offices of Ice Miller LLP, One American Square,
      Suite 3100, Indianapolis, Indiana, 46282-0200, and at the offices of Wuersch
      & Gering LLP, 100 Wall Street, 21st
      Floor,
      New York, New York 10005 no later than December 8, 2006, at such date and time
      as the parties mutually agree when the respective closing conditions set forth
      in this Article Six have been satisfied or waived (the "Closing
      Date").
      All
      proceedings to be taken and all documents to be executed and delivered by all
      parties at the Closing shall be deemed taken and executed simultaneously, and
      no
      proceedings shall be deemed taken nor any documents executed or delivered until
      all have been taken, executed and delivered.
      The
      parties agree to execute the Closing on facsimile signatures into escrow of
      respective counsel which shall be fully binding upon the parties, and such
      counsel shall deliver and exchange original execution copies of all such
      documentation within three (3) business days thereafter. At Closing, the parties
      shall sign and deliver this Agreement, the Delaware
      Merger
      Agreements; and the
      Indiana Merger Filings, together with the Acquisition Consideration as set
      forth
      in Article Two.
      All
      certificates for the Manchester Shares, duly endorsed for transfer or
      accompanied by a duly executed stock power or other appropriate instrument
      of
      assignment and transfer, shall be delivered within three (3) business days
      after
      Closing

     

    6.4 Termination.

     

    This
      Agreement shall terminate prior to the Closing upon the occurrence of any of
      the
      following: (i) the written agreement of the Seller's Representative and
      Purchasers; (ii) the bankruptcy, receivership or dissolution of the Acquired
      Companies or the Purchasers; (iii) by the Seller's Representative, on the one
      hand, or by Purchasers, on the other hand, if Closing shall not have occurred
      on
      or before December 8, 2006 or (iv) by Purchasers, in accordance with
Section
      6.6;
      provided that the right to terminate this Agreement under this Section shall
      not
      be available to either party whose material misrepresentations, material breach
      of warranty or failure to fulfill any material obligation under this Agreement
      has been the cause of, or resulted in, the failure of the Closing to occur
      on or
      before such date. 

     

    
      
        
        

      

      
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    6.5 Covenants
      Pending Closing.

     

    (a) The
      Sellers agree that from the date hereof to the Closing Date, they covenant
      and
      agree to undertake the following actions: 

     

    (i) operate
      the respective businesses of the Acquired Companies substantially as now
      operated and only in the ordinary course and, to the extent of and consistent
      with such operation, use reasonable efforts to preserve intact the present
      business organization and the relationships with persons having business
      dealings with the Acquired Companies; 

     

    (ii) maintain
      the books, accounts and records of the Acquired Companies in the usual, regular
      and ordinary manner and consistent with past practice; 

     

    (iii) shall
      not
      sell, lease or dispose of any material business assets of the Acquired Companies
      or encumber the Acquired Companies with liabilities, in either case other than
      in the ordinary course of business except as set forth on Schedule
      6.5(a)(iii);
      or

     

    (iv) not
      amend, adversely modify or terminate any Contract, other than in the ordinary
      course of business.

     

    (b) The
      Sellers’ Representative and the Purchasers will use their respective reasonable
      efforts (i) to obtain all necessary consents and approvals of governmental
      and
      regulatory authorities to the consummation of the transactions contemplated
      by
      this Agreement, (ii) to obtain all other waivers and/or consents necessary
      or
      advisable in connection with the transactions contemplated by this Agreement,
      including, without limitation, waivers and/or consents pertaining to the
      Franchise Agreements, and (iii) to perform, comply with and fulfill all
      obligations, covenants and conditions required by this Agreement to be
      performed, complied with and fulfilled by them prior to or at the Closing Date.
      All transactional matters, corporate ministerial actions, regulatory filings
      or
      consent payments prior to Closing shall be at Sellers’ sole cost and
      expense.

    


    (c) Prior
      to
      the Closing, the Sellers agree to permit the Purchasers and their respective
      employees, agents and representatives to have reasonable access to the
      properties, assets, books and records, contracts and other documents of the
      Acquired Companies, on reasonable prior notice, during regular business hours.
      

    


    (d) Prior
      to
      the Closing, neither the Sellers, on the one hand, nor the Purchasers, on the
      other hand, nor any of their agents or affiliates, shall either directly or
      indirectly make any press release or other public communication after the date
      hereof with respect to the transaction contemplated hereby without the prior
      written consent of all other parties hereto (which shall not be unreasonably
      withheld) unless required by applicable law, rule or regulation (including
      the
      rules and regulations of the SEC and any securities quotation system or
      securities exchange) to make such a communication. 

     

    
      
        
        

      

      
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    (e) Prior
      to
      Closing, the Acquired Companies shall fully, faithfully and promptly discharge
      each of their ordinary course liabilities as and when due and dischargeable,
      according to the terms of the respective liability. 

    


    (f) The
      Sellers hereby agree that they shall conduct the on-going business operations
      of
      the Acquired Companies in the ordinary course and shall take no action to
      liquidate or distribute their respective business assets except as set forth
      on
Section
      6.5(a)(iii)
      or
      dissolve or otherwise reclassify their respective corporate identity, and shall
      promptly notify the Purchasers if any third party attempts or executes any
      action which interferes with the consummation of the transactions contemplated
      by this Agreement.

     

    6.6 Updates
      to Disclosure Schedules. 

     

    Seller's
      Representative shall deliver to Purchasers, as soon as possible after discovery
      thereof, but not later than one (1) Business Day prior to the Closing Date,
      written notice of supplemental information updating the information set forth
      in
      the representations and warranties of Sellers set forth in Article
      IV
      of this
      Agreement so that such representations and warranties of Sellers, as
      supplemented by such information, will be true and correct as of the Closing
      Date (the "Disclosure
      Schedule Updates").
      If
      such Disclosure Schedule Updates reflect an occurrence which could reasonably
      be
      expected to cause one or both of the Acquired Companies to recognize or accrue
      previously undisclosed liabilities which
      individually or in the aggregate are more
      than
      $50,000.00, Purchasers shall have the right to terminate this Agreement pursuant
      to and in accordance with Section
      6.4
      of this
      Agreement by delivering a written notice of such termination of Seller prior
      to
      the Closing in accordance with Section
      11.1.


     

    ARTICLE
      7: REGISTRATION
      RIGHTS AND STOCK LEGENDS

     

    7.1 Registration
      Rights. 

     

    (a) The
      Parent and the Sellers agree that if at any time after the date hereof the
      Parent shall propose to file a registration statement with respect to any of
      its
      common stock on a form suitable for a secondary offering, it will give notice
      in
      writing to such effect to the Sellers at least thirty (30) days prior to such
      filing, and, at the written request of the Sellers, made within ten (10) days
      after the receipt of such notice, will include therein at the Parent's cost
      and
      expense (including the reasonable fees and expenses of one counsel to all such
      holder(s), but excluding underwriting discounts, commissions and filing fees
      attributable to the common stock included therein) such of the Manchester Shares
      as the Sellers shall request; provided, however, that if the offering being
      registered by the Parent is underwritten and if the representative of the
      underwriters certifies in writing that the inclusion therein of the Manchester
      Shares would materially and adversely affect the sale of the securities to
      be
      sold by the Parent thereunder, then the Parent shall be required to include
      in
      the offering only that number of securities, including the Manchester Shares,
      which the underwriters determine in their sole discretion will not jeopardize
      the success of the offering (the securities so included to be apportioned pro
      rate among all selling holders of shares according to the total amount of
      securities entitled to be included therein owned by each selling holder of
      shares, but in no event shall the total amount of Manchester Shares included
      in
      the offering be less than the number of securities included in the offering
      by
      any other single selling holder of shares unless all of the Manchester Shares
      are included in the offering).

     

    
      
        
        

      

      
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    (b) The
      Parents obligations hereinabove with respect to the Manchester Shares are
      expressly conditioned upon the Sellers furnishing to the Parent in writing
      such
      information concerning the Sellers as the Parent shall reasonably request for
      inclusion in the registration statement. If any registration statement including
      any of the Manchester Shares is filed, the Parent shall indemnify the Sellers
      from any loss, claim, damage or liability arising out of, based upon or in
      any
      way relating to any untrue statement of a material fact contained in such
      registration statement or any omission to state therein a material fact required
      to be stated therein or necessary to make the statements therein not misleading,
      except for any such statement or omission based on information furnished in
      writing by the Sellers expressly for use in connection with such registration
      statement; and the Sellers shall indemnify the Parent (and each of its officers
      and directors who has signed such registration statement, each director, each
      person, if any, who controls the Parent within the meaning of the Securities
      Act, each underwriter for the Parent and each person, if any, who controls
      such
      underwriter within the meaning of the Securities Act) and each other such
      Sellers against any loss, claim, damage or liability arising from any such
      statement or omission which was made in reliance upon information furnished
      in
      writing to the Parent by the Sellers expressly for use in connection with such
      registration statement.

     

    7.2 Stock
      Certificate Legends. 

     

    (a) Each
      certificate representing the Manchester Shares shall be stamped or otherwise
      imprinted with legends substantially in the following form (in addition to
      any
      legend required by applicable state securities or "blue sky" laws):

     

    THE
      SECURITIES REPRESENTED BY THIS CERTIFICATE (THE "SECURITIES") HAVE NOT BEEN
      REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") OR ANY
      STATE
      SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT
      (1)(A) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER
      THE ACT (IF AVAILABLE) OR ANOTHER THEN AVAILABLE EXEMPTION UNDER THE ACT AND
      STATE SECURITIES LAWS, OR (B) IN A TRANSACTION THAT DOES NOT REQUIRE
      REGISTRATION UNDER THE ACT OR ANY APPLICABLE STATE LAWS, AND WHEREIN MANCHESTER
      INC. SHALL HAVE RECEIVED AN OPINION OF COUNSEL THAT REGISTRATION OF SUCH
      SECURITIES UNDER THE ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES
      LAWS IS NOT REQUIRED, OR (C) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS
      BEEN
      DECLARED EFFECTIVE UNDER THE ACT (AND WHICH CONTINUES TO BE EFFECTIVE AT THE
      TIME OF SUCH TRANSFER); AND (2) PRIOR TO ANY SUCH TRANSFER, IT WILL FURNISH
      TO
      MANCHESTER INC. AND THE TRANSFER AGENT FOR THE COMMON STOCK SUCH CERTIFICATIONS,
      LEGAL OPINIONS, OR OTHER INFORMATION AS MANCHESTER INC. OR SUCH TRANSFER AGENT
      MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT
      TO
      AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
      REQUIREMENTS OF THE ACT OR STATE SECURITIES LAWS; AND (3) IT WILL DELIVER TO
      EACH PERSON TO WHOM THE SECURITIES EVIDENCED HEREBY IS TRANSFERRED A NOTICE
      SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. FURTHERMORE, HEDGING TRANSACTIONS
      INVOLVING THE SECURITIES EVIDENCED HEREBY MAY NOT BE CONDUCTED UNLESS IN
      COMPLIANCE WITH THE ACT.

     

    
      
        
        

      

      
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    (b) The
      Parent agrees to reissue certificates representing any of the Manchester Shares
      without the legend set forth above if at such time, prior to making any transfer
      of any such Manchester Shares, such holder thereof shall give written notice
      to
      the Parent describing the manner and terms of such transfer and removal as
      the
      Parent may reasonably request. Such proposed transfer and removal will not
      be
      effected until: (a) either (i) the Parent has received an opinion of counsel
      reasonably satisfactory to the Parent, to the effect that the registration
      of
      the Manchester Shares under the Securities
      Act
      is
      not required in connection with such proposed transfer; (ii) a registration
      statement under the Securities
      Act
      covering such proposed disposition has been filed by the Parent with the
      Commission and has become effective under the Securities
      Act;
      (iii) the Parent has received other evidence reasonably satisfactory to the
      Parent that such registration and qualification under the Securities
      Act
      and
      state securities laws are not required; or (iv) the holder provides the Parent
      with reasonable assurances that such security can be sold pursuant to Rule
      144
      under the Securities
      Act;
      and
      (b) either (i) the Parent has received an opinion of counsel reasonably
      satisfactory to the Parent, to the effect that registration or qualification
      under the securities or "blue sky" laws of any state is not required in
      connection with such proposed disposition; or (ii) compliance with applicable
      state securities or "blue sky" laws has been effected or a valid exemption
      exists with respect thereto. The Parent will respond to any such notice from
      a
      holder within five (5) business days. In the case of any proposed transfer
      under
      this section, the Parent will use reasonable efforts to comply with any such
      applicable state securities or "blue sky" laws, but shall in no event be
      required, (x) to qualify to do business in any state where it is not then
      qualified; (y) to take any action that would subject it to tax or to the general
      service of process in any state where it is not then subject; or (z) to comply
      with state securities or "blue sky" laws of any state for which registration
      by
      coordination is unavailable to the Parent. The restrictions on transfer
      contained in this section shall be in addition to, and not by way of limitation
      of, any other restrictions on transfer contained in any other section of this
      Agreement. Whenever
      a
      certificate representing the Manchester Shares is required to be issued to
      a
      Seller without a legend, in lieu of delivering physical certificates
      representing the Manchester Shares, provided the Parent's transfer agent is
      participating in the Depository Trust Company ("DTC")
      Fast Automated Securities Transfer program, the Parent shall use its
      commercially reasonable efforts to cause its transfer agent to electronically
      transmit the Manchester Shares to a Seller by crediting the account of such
      Seller's Prime Broker with DTC through its Deposit Withdrawal Agent Commission
      ("DWAC") system (to the extent not inconsistent with any provisions of this
      Agreement).

     

    
      
        
        

      

      
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    ARTICLE
      8: COVENANTS
      AND AGREEMENTS

     

    8.1 Publicity. 

     

    Any
      disclosures or announcements relating to this Agreement or the transactions
      contemplated hereby will be made only as may be agreed upon in writing by
      Sellers’ Representative and Purchasers, or as may be required by Law or by any
      Governmental Authority. 

     

    8.2 Expenses. 

     

    Each
      of
      the parties shall pay all costs and expenses incurred by it in the negotiation,
      preparation and consummation of this Agreement and the other documents
      contemplated hereby and carrying out of the contemplated transactions, except
      as
      otherwise expressly provided in this Agreement. At the Closing, Sellers’
Representative shall deliver to Purchasers letters, reasonably satisfactory
      in
      form and substance to Purchasers, from all attorneys, accountants, consultants
      and all other service-providers to the Acquired Companies and the Sellers (the
      "Release
      Letters")
      stating that, to the extent such parties are not paid at the Closing the fees,
      costs or expenses owing to such parties with respect to the transactions
      contemplated by this Agreement, such parties shall hold only Sellers responsible
      for any fees, costs and expenses owing to such parties and the Acquired
      Companies shall be released from any and all obligations to such parties.


     

    8.3 No
      Assignments. 

     

    No
      assignment of all or any part of this Agreement or any right or obligation
      hereunder may be made by any party hereto without the prior written consent
      of
      all other parties hereto, and any attempted assignment without such consent
      shall be void and of no force or effect; provided,
      however,
      that
      (a) Each Purchaser may assign any of its rights or delegate any of its duties
      under this Agreement to any controlled Affiliate of such Purchaser provided,
      further, that no such assignment shall relieve such Purchaser of its obligations
      hereunder; (b) Each Purchaser may assign its rights, but not its obligations,
      under this Agreement to any of its financing sources; and (c) Each Purchaser
      and
      its successors and permitted assigns may assign their rights, but not their
      obligations, under this Agreement in connection with a transfer of all or
      substantially all of the assets of such Purchaser or any of the Acquired
      Companies. 

     

    8.4 Sellers’
      Representative. 

     

    (a) By
      the
      execution and delivery of this Agreement, each Seller hereby irrevocably
      constitutes and appoints Rick Stanley as the initial true and lawful agent
      and
      attorney-in-fact (the "Sellers'
      Representative")
      of the
      Sellers with full authority and power of substitution to act in the name, place
      and stead of such Sellers with respect to the consummation of the transactions
      contemplated hereunder.

     

    
      
        
        

      

      
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    (b) Purchasers,
      Parent and any other person, may conclusively and absolutely rely, without
      inquiry, upon any consent, approval or action of the Sellers' Representative
      as
      the consent, approval or action, as the case may be, of each Seller individually
      and all Sellers as a group in all matters referred to herein, and each Seller
      confirms all that the Sellers' Representative shall do or cause to be done
      by
      virtue of his or her appointment as the Sellers' Representative.

     

    (c) Each
      Seller covenants and agrees that he or she will not voluntarily revoke the
      power
      of attorney conferred in this Section
      8.4.
      If any
      Seller dies or becomes incapacitated, disabled or incompetent (such deceased,
      incapacitated, disabled or incompetent Seller being a "Former
      Seller")
      and,
      as a result, the power of attorney conferred by this Section
      8.4
      is
      revoked by operation of law, it shall not be a breach by such Former Seller
      under this Agreement if the heirs, beneficiaries, estate, administrator,
      executor, guardian, conservator or other legal representative of such Former
      Seller (each a "Successor
      Seller")
      confirm the appointment of the Sellers' Representative as agent and
      attorneys-in-fact for such Successor Seller.

     

    (d) Sellers'
      Representative hereby acknowledges and agrees that he has a fiduciary duty
      to
      act in good faith in connection with this Article
      8.
      Each of
      the Sellers hereby consents and agrees to all actions or inactions taken or
      omitted to be taken in good faith by the Sellers' Representative in accordance
      with this Article
      8.

     

    8.5 Tax
      Matters. 

     

    8.5.1 Cooperation
      on Tax Matters.
      Following the Closing, Sellers and Purchasers shall cause the Acquired Companies
      to, cooperate fully, as and to the extent reasonably requested by any other
      party, in connection with any audit, litigation or other proceeding with respect
      to Taxes or the preparation and filing of any Tax Return. Such cooperation
      shall
      include the retention and (upon any other party’s request) the provision of
      records and information which are reasonably relevant to any such Tax matter
      or
      required by the Code or other applicable Law and making employees available
      on a
      mutually convenient basis to provide additional information and explanation
      of
      any material provided hereunder. Sellers and Purchasers agree (a) to retain
      all
      books and records with respect to Tax matters pertinent to the Acquired
      Companies relating to any taxable period beginning before the Closing Date
      until
      the expiration of the statute of limitations (and, to the extent notified by
      Purchasers or Sellers, any extensions thereof) of the respective taxable
      periods, and to abide by all record retention agreements entered into with
      any
      Taxing authority, and (b) to give the other party reasonable written notice
      prior to transferring, destroying or discarding any such books and records
      and,
      if the other party so requests, Sellers or Purchasers, as the case may be,
      shall
      allow such party to take possession of such books and records. Purchasers and
      Sellers further agree, upon request, to use commercially reasonable efforts
      to
      obtain any certificate or other document from any governmental authority or
      any
      other Person as may be necessary to mitigate, reduce or eliminate any Tax that
      could be imposed (including, but not limited to, with respect to the
      transactions contemplated hereby). Purchasers and Sellers further agree, upon
      request, to provide the other party with all information that any party may
      be
      required to report pursuant to the Code or other applicable Law and all
      regulations promulgated thereunder. All Tax sharing agreements or similar
      agreements with respect to or involving the Companies shall be deemed terminated
      as of the Closing Date and, after the Closing Date, Sellers and the Acquired
      Companies shall not be bound thereby or have any liability
      thereunder.

     

    
      
        
        

      

      
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    8.5.2 Tax
      Returns.

     

    (a) Sellers
      or their designee shall prepare and timely file or shall cause to be prepared
      and timely filed all income Tax Returns of the Acquired Companies for
      Pre-Closing Tax Periods ("Seller
      Tax Returns"),
      and
      shall pay or shall cause to be paid any and all Taxes due with respect to such
      Tax Returns. Sellers shall have the exclusive authority and obligation to
      prepare or cause to be prepared all Seller Tax Returns. Such authority shall
      include the determination of the manner in which any items of income, gain,
      deduction, loss or credit arising out of the income, properties and operations
      of the Acquired Companies shall be reported or disclosed in such Tax Returns;
      provided, however, that such Tax Returns shall be prepared by treating items
      on
      such Tax Returns in a manner consistent with past practice with respect to
      such
      items, unless otherwise required by Law. If any such Seller Tax Returns are
      due
      after the Closing and Sellers are not authorized by Law to file such Sellers
      Tax
      Returns, Sellers shall submit drafts of such Seller Tax Returns to Purchasers
      for Purchasers’ review at least 30 days prior to the due date of any such Tax
      Return. Such drafts of any Sellers Tax Returns shall be subject to Purchasers’
review and approval, which approval shall not be unreasonably withheld, and
      Purchasers shall timely file, or cause to be timely filed, such Seller Tax
      Returns with the appropriate Taxing Authority. 

     

    (b) Purchasers
      shall prepare and timely file or cause to be prepared and timely filed all
      Tax
      Returns that are not Seller Tax Returns, Purchasers shall pay or cause to be
      paid any and all Taxes due with respect to such Tax Returns. Purchasers shall
      provide to Sellers drafts of all Tax Returns that reflect any Pre-Closing Tax
      Period described in the preceding sentence required to be prepared and filed
      by
      any Acquired Companies and a statement certifying the amount of Taxes shown
      on
      such Tax Return that is allocable to the Seller pursuant to Section 8.5.3 or
      Section 9.1(c), together with appropriate supporting information and schedules,
      at least 30 days prior to the due date for the filing of such Tax Returns
      (including extensions). Within 15 days after the receipt of the draft Tax
      Returns, Sellers shall notify Purchasers of the existence of any objection
      (specifying in reasonable detail the nature and basis of such objection) Sellers
      may have to any items set forth on such draft Tax Returns (a "Dispute
      Notice").
      Purchasers and Sellers agree to consult and resolve in good faith any such
      objection. However, if Purchasers and Sellers cannot resolve any such objection,
      the objection shall be referred to the Arbiter Accountants for prompt
      resolution. Purchasers and Sellers shall share equally all costs of hiring
      the
      Arbiter Accountants. Purchasers shall not file any Tax Return subject to this
      Section 8.5.2(b) without the prior written consent of Sellers, which consent
      shall not be unreasonably withheld or delayed; provided, however, that no such
      consent shall be required if Sellers shall not have timely delivered a Dispute
      Notice or the objections contained in such Dispute Notice shall have been
      finally resolved.

     

    8.5.3 Apportionment
      of Taxes.
      All
      Taxes and Tax liabilities with respect to the Acquired Companies that relate
      to
      a Straddle Tax Period shall be apportioned between the Pre-Closing Tax Period
      and the Post-Closing Tax Period as follows: (A) in the case of Taxes that are
      either (1) based upon or measured by reference to income, receipts or profits
      (but not including sales and use Taxes), (2) imposed in connection with any
      sale
      or other transfer or assignment of property (real or personal, tangible or
      intangible) (other than conveyances pursuant to this Agreement, as provided
      under Section 8.5.5), or (3) required to be withheld such Taxes shall be deemed
      equal to the amount which would be payable if the Tax year ended at the end
      of
      the day on the Closing Date; and (B) in the case of Taxes imposed on a periodic
      basis with respect to the Acquired Companies, or otherwise measured by the
      level
      of any item, such Taxes shall be deemed to be the amount of such Taxes for
      the
      entire period (or, in the case of such Taxes determined on an arrears basis,
      the
      amount of such Taxes for the immediately preceding period), multiplied by a
      fraction the numerator of which is the number of calendar days in the period
      ending on the Closing Date and the denominator of which is the number of
      calendar days in the entire period. Sellers shall be liable for all Taxes
      attributable to a Pre-Closing Tax Period. Purchasers shall be liable for all
      Taxes attributable to a Post-Closing Tax Period.

     

    
      
        
        

      

      
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    8.5.4 Controversies.
      Purchasers shall notify Sellers in writing within 10 days of the receipt by
      Purchasers or any affiliate of Purchasers (including the Acquired Companies
      after the Closing Date) of written notice of any inquiries, claims, assessments,
      audits or similar events with respect to Taxes relating to a Pre-Closing Tax
      Period for which Sellers may be liable under this Agreement (any such inquiry,
      claim, assessment, audit or similar event, a "Tax
      Matter").
      For
      Tax Matters relating solely to a Pre-Closing Tax Period, Sellers, at their
      own
      expense, shall have the exclusive authority to represent the interests of the
      Acquired Companies with respect to any Tax Matter before the IRS, any other
      Taxing Authority, any other Governmental Authority or any court and shall have
      the sole right to extend or waive the statute of limitations with respect to
      such Tax Matter, including responding to inquiries, filing Tax Returns and
      settling audits or lawsuits; provided, however, that Sellers shall not enter
      into any settlement of or otherwise compromise any such Tax Matter that
      adversely affects or may adversely affect the Tax liability of Purchasers or
      any
      Acquired Companies for any Post-Closing Tax Period, including any Straddle
      Tax
      Period, without the prior written consent of Purchasers, which consent shall
      not
      be unreasonably withheld. Sellers shall keep Purchasers fully and timely
      informed with respect to the commencement, status and nature of any Tax Matter.
      Sellers shall, in good faith, allow Purchasers or Purchasers’ counsel to consult
      with it regarding the conduct of or positions taken in any such proceeding.
      For
      Tax Matters relating to Straddle Tax Periods, each of Sellers and Purchasers
      may
      participate, at their own expense, in representing the interests of the Acquired
      Companies; provided, however, that the representation shall be controlled by
      that party which would bear the burden of the greater portion of the sum of
      the
      adjustments that may reasonably be anticipated and the controlling party shall
      not settle or otherwise compromise any such Tax Matter without the prior written
      consent of the non-controlling party, which consent shall not be unreasonably
      withheld.

     

    8.5.5 Transfer
      Taxes.
      Sellers
      shall pay any and all sales, use, value added, transfer, stamp, registration,
      real property transfer or gains and similar Taxes ("Transfer
      Taxes")
      incurred as a result of the transactions contemplated by this Agreement when
      due, and Purchasers shall file or cause to be filed all necessary Tax Returns
      and other documentation with respect to all such Transfer Taxes. Sellers and
      Purchasers shall provide reasonable assistance in connection with such filings.
      To the extent that any Taxes described in the second preceding sentence are
      required to be collected by one party, the other party shall pay its share
      of
      such Taxes to the first party and the first party shall remit such Taxes to
      the
      Taxing Authority.

     

    
      
        
        

      

      
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    8.6 Restrictive
      Covenants.

     

    (a) Acknowledgments
      by Sellers'.
      Each
      Seller acknowledges and agrees that as a result and as a part of their
      relationship with the Acquired Companies (including the ownership of the
      Shares), each: (i) may have had access to Confidential Information (as defined
      below) which could have an adverse effect on Purchasers and Purchasers’ business
      if it is disclosed, and that as a condition to the consummation of the
      transactions contemplated hereby it is reasonable and necessary for each Seller
      to promise and agree, subject to the terms and conditions herein, not to
      disclose such Confidential Information; and (ii) may have knowledge and
      expertise in the business conducted by the Acquired Companies that is special
      and unique, and that as a condition to Purchasers’ consummation of the
      transactions contemplated hereby, it is reasonable and necessary for each Seller
      to promise and agree, subject to the terms and conditions herein, not to compete
      or interfere with the conduct of the business purchased by Purchasers hereunder.
      Each Seller further acknowledges and agrees that the benefits provided to such
      Seller under this Agreement, constitute good and sufficient consideration for
      the agreements and covenants in this Section 8.6.

     

    (b) Nondisclosure.
      Each
      Seller covenants and agrees that from and after the Closing Date, he shall
      not
      disclose, directly or indirectly, any Confidential Information. If the
      disclosure of Confidential Information is required by Law or compelled by any
      Governmental Authority, each Seller agrees to provide Purchasers with as much
      prior written notice of such disclosure as is reasonably possible. For purposes
      of this Section 8.6, "Confidential
      Information"
      means
      (i) all information belonging to, used by, or which is in the possession of
      any
      Acquired Company, Sellers’ Representative or any Seller relating to any Acquired
      Company's business or assets specifically including, but not limited to,
      information relating to any Acquired Company's products, services, strategies,
      pricing, customers, representatives, suppliers, distributors, technology,
      finances, employee compensation, computer software and hardware, inventions,
      developments, or Trade Secrets, and (ii) all information relating to the
      acquisition of the Acquired Companies by Purchasers hereunder, including without
      limitation all strategies, negotiations, discussions, terms, conditions and
      other information relating to this Agreement and each other document and
      agreement delivered in connection herewith, in each case to the extent that
      such
      information is not required to be disclosed by applicable Law or compelled
      to be
      disclosed by any Governmental Authority. Notwithstanding the foregoing, the
      term
      "Confidential
      Information"
      does
      not include information that (i) is or becomes generally available to or known
      by the public (other than as a result of a disclosure by a Seller); (ii) is
      or
      becomes available to a Seller on a nonconfidential basis prior to its disclosure
      to Sellers’ Representative or a Seller by an Acquired Company; provided,
      that
      the
      source of such information is not known by Seller to be bound by a
      confidentiality agreement with an Acquired Company; or (iii) is independently
      developed by Seller without violating this Agreement. Each Seller acknowledges
      that following the Closing all of the Confidential Information will be the
      exclusive proprietary property of the Acquired Companies, whether or not
      prepared in whole or in part by any Seller and whether or not disclosed to
      or
      entrusted to the custody of any Seller.

     

    
      
        
        

      

      
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    (c) Noncompetition.

     

    (1)
      Sellers’ Representative covenants and agrees that during the period from the
      date of this Agreement through the third (3rd)
      anniversary of the Closing Date (the "Non-Competition
      Period for Sellers’ Representative"),
      Sellers’ Representative will not, without the prior written consent of
      Purchasers, either directly or indirectly, whether or not for consideration,
      (i)
      in any way, directly or indirectly, solicit, divert, or take away the business
      of any Person who is or was a customer of any Acquired Company, or in any manner
      influence such Person to cease doing business in part or in whole with Sellers’
Representative; (ii) take orders from, or sell Competing Products to any Person,
      or (iii) except for investments or ownership in public entities, mutual
      funds and similar investments, none of which constitute more than 5% of the
      ownership or control of such entities, own, operate, control, finance, manage,
      advise, be employed by or engaged by, perform any services for, invest or
      otherwise become associated in any capacity with any Person engaged in the
      manufacturing, importing, distribution or selling of Competing Products in
      the
      United States; or (iv) engage in any practice the purpose or effect of which
      is
      to intentionally evade the provisions of this covenant. For purposes of this
      Section 8.6(c), "Competing
      Products"
      means
      the buy-here/pay-here used car business and/or selling used cars or trucks
      and/or financing the purchase of used cars or trucks. Notwithstanding the
      foregoing, if Sellers’ Representative's employment is terminated without Cause
      (as defined in that certain Employment Agreement by and between Sellers’
Representative and Indiana Operations (the "Employment
      Agreement"))
      or the Sellers’ Representative resigns for Good Reason (as defined in the
      Employment Agreement), and Indiana Operations does not make the Severance
      Payment (as defined in the Employment Agreement), the Non-Competition Period
      for
      Sellers’ Representative shall expire on the Termination Date (as defined in the
      Employment Agreement).

     

    (2)
      Each
      Seller other than Sellers' Representative who directly or indirectly owns more
      than five percent (5%) of the issued and outstanding shares of FSE and/or GNAC
      immediately prior to the Closing, (each, a "Material
      Seller"
      and
      collectively, the "Material
      Sellers"),
      covenants and agrees that during the period from the date of this Agreement
      through the third (3rd)
      anniversary of the Closing Date (the "Non-Competition
      Period for Material Sellers"),
      Material Seller will not, without the prior written consent of Purchasers,
      either directly or indirectly, whether or not for consideration, (i) within
      the
      territory defined by the Franchise Agreements in any way, directly or
      indirectly, solicit, divert, or take away the business of any Person who is
      or
      was a customer of any Acquired Company, or in any manner influence such Person
      to cease doing business in part or in whole with Sellers' Representative; (ii)
      within the territory defined by the Franchise Agreements, take orders from,
      or
      sell Competing Products to any Person, or (iii) except for investments or
      ownership in public entities, mutual funds and similar investments, none of
      which constitute more than five percent (5%) of the ownership or control of
      such
      entities, own, operate, control, finance, manage, advise, be employed by or
      engaged by, perform any services for, invest or otherwise become associated
      in
      any capacity with any Person engaged in the manufacturing, importing,
      distribution or selling of Competing Products within the territory defined
      by
      the Franchise Agreements; or (iv) engage in any practice the purpose or effect
      of which is to intentionally evade the provisions of this covenant.
      Notwithstanding anything to the contrary in the foregoing, if any Material
      Seller is a party to a franchise agreement with Byrider Franchising, Inc.,
      other
      than a Franchise Agreement, nothing contained in this Section
      8.6
      shall in
      any way be construed to restrict such Material Sellers rights and/or obligations
      under any such franchise agreement with Byrider Franchising, Inc.

     

    
      
        
        

      

      
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    (3)
      Each
      Seller other than Sellers’ Representative and Material Sellers (each, a
      "Non-Material
      Seller"),
      covenants and agrees that during the period from the date of this Agreement
      through the first (1st)
      anniversary of the Closing Date (the "Non-Competition
      Period for Non-Material Sellers"
      and
      referred to herein collectively with the Non-Competition Period for Material
      Sellers and the Non-Competition Period for the Sellers' Representative, the
      "Non-Competition
      Period"),
      the
      Non-Material Seller will not, without the prior written consent of Purchasers,
      either directly or indirectly, whether or not for consideration, (i) within
      the
      territory defined by the Franchise Agreements, in any way, directly or
      indirectly, solicit, divert, or take away the business of any Person who is
      or
      was a customer of any Acquired Company, or in any manner influence such Person
      to cease doing business in part or in whole with Sellers’ Representative; (ii)
      within the territory defined by the Franchise Agreements, take orders from,
      or
      sell Competing Products to any Person, or (iii) except for investments or
      ownership in public entities, mutual funds and similar investments, none of
      which constitute more than 5% of the ownership or control of such entities,
      own,
      operate, control, finance, manage, advise, be employed by or engaged by, perform
      any services for, invest or otherwise become associated in any capacity with
      any
      Person engaged in the manufacturing, importing, distribution or selling of
      Competing Products within the territory defined by the Franchise Agreements;
      or
      (iv) engage in any practice the purpose or effect of which is to intentionally
      evade the provisions of this covenant. Notwithstanding the foregoing, the
      restrictions of this clause (3) of Section 8.6(c) shall not apply to each
      Non-Material Seller set forth on Schedule 8.6(c).

     

    (d) Noninterference.
      Each
      Seller covenants and agrees that during the applicable Non-Competition Period,
      such Seller will not (i) solicit, induce or attempt to solicit or induce,
      whether or not for consideration, any employee of any Acquired Company to
      terminate his or her relationship with any Acquired Company; or (ii) induce
      or
      attempt to induce any customer or supplier of any Acquired Company to terminate
      or adversely change its relationship with the Acquired Company.

     

    (e) Equitable
      Relief.
      Each
      Seller agrees that money damages alone will not be a sufficient remedy for
      any
      breach of the provisions of Section 8.4, and that in addition to all other
      remedies Purchasers will be entitled to specific performance and injunctive
      or
      other equitable relief as a remedy for any such breach, and each Seller waives
      the securing or posting of any bond in connection with such remedy.

     

    (f) Reformation
      of Agreement.
      If any
      of the covenants contained in Section 8.4, or any portion thereof, is found
      by a
      court of competent jurisdiction to be invalid or unenforceable as against public
      policy or for any other reason, such court shall exercise its discretion to
      reform such covenant to the end that Sellers shall be subject to nondisclosure,
      noncompetition, noninterference, or other covenants that are reasonable under
      the circumstances and are enforceable by Purchasers. In any event, if any
      provision of Section 8.6 is found unenforceable for any reason, such provision
      shall remain in force and effect to the maximum extent allowable and all
      non-affected provisions shall remain fully valid and enforceable.

     

    
      
        
        

      

      
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    (g) Reasonableness
      of Terms.
      Purchasers and each Seller stipulate and agree that the covenants and other
      terms contained in Section 8.6 are reasonable in all respects, including time
      period, geographical area and scope of restricted activities, that Purchasers
      would not have purchased the Shares had Sellers not agreed to these covenants,
      and that the restrictions contained herein are designed to protect the
      businesses of the Acquired Companies and ensure that no Sellers engages in
      unfair competition against the Acquired Companies.

     

    ARTICLE
      9: INDEMNIFICATION

     

    9.1 Indemnification
      of Purchasers.

     

    From
      and
      after the Closing, Rick Stanley, Ivan Poor and Anthony Hamlin (the "Indemnifying
      Shareholders"),
      severally, shall indemnify the Purchasers, the Acquired Companies and their
      respective directors, officers, employees, Affiliates, stockholders, agents,
      attorneys, representatives, successors and permitted assigns (collectively, the
      "Purchaser
      Indemnitees"),
      against and hold the Purchaser Indemnitees harmless from:

     

    (a) any
      Losses based upon, resulting from, arising out of, caused by or in connection
      with the failure of, any inaccuracy in, or breach of, any of the representations
      and warranties in Article 3 or in Article 4 to be true and correct on the date
      hereof or the Closing Date;

     

    (b) any
      Losses based upon, resulting from, arising out of, caused by or in connection
      with any breach or nonperformance of any covenant, agreement or obligation
      of
      the Acquired Companies, Sellers or Sellers’ Representative in this
      Agreement;

     

    (c) notwithstanding
      any disclosure contained herein or otherwise known to the Purchaser Indemnitees,
      Losses based on, resulting from, arising out, caused by or in connection with
      (i) any Taxes payable by any Acquired Companies with respect to any Pre-Closing
      Tax Period or for the Straddle Period, to the extent allocable or attributable
      to the portion of such period beginning before or ending on the Closing Date,
      (ii) any liability of any Acquired Companies for Taxes of another Person (for
      example, by reason of transferee liability), (iii) any transfer Taxes for which
      Sellers are liable under this Agreement, or (iv) any Taxes of any Acquired
      Companies that are attributable to the Taxes of any member of an affiliated,
      consolidated, combined or unitary group (other than any of the Acquired
      Companies) of which any Acquired Companies is or was a member on or prior to
      the
      Closing Date; or

     

    (d) any
      Losses based upon, resulting from, arising out of, caused by or in connection
      with any failure of Sellers to comply with the provisions of this Article
      9.

     

    
      
        
        

      

      
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    9.2 Limitations
      on Indemnification of Purchasers.

     

    Notwithstanding
      any other provision of this Agreement, the indemnification of the Purchaser
      Indemnitees provided for in this Agreement shall be subject to the following
      limitations and conditions set forth in this Section 9.2:

     

    (a) except
      as
      set forth below, any claim by a Purchasers Indemnitee for indemnification
      pursuant to Section 9.1(a) of this Agreement shall be required to be made by
      delivering notice to Sellers’ Representative no later than the expiration of
      twenty-four (24) months after the Closing Date; provided,
      that,
      any
      claim for indemnification with respect to Section 9.1(a) based upon, resulting
      from, arising out of, caused by or in connection with any inaccuracy in or
      breach of any representation or warranty contained in (i) Section 3.1 [Authority
      and Capacity], Section 3.2 [Ownership of Shares], Section 4.2 [Capital Stock],
      or Section 4.27 [Brokerage] may be made at any time, or (ii) Section 4.10
      [Environmental Matters], Section 4.7 [Taxes] and Section 4.11 [Permits;
      Compliance with Laws] may be made at any time prior to the thirtieth (30th)
      day
      following the expiration of the applicable statute of limitations (including
      valid extensions thereof);

     

    (b) except
      for claims for indemnification relating to fraud or with respect to Section
      9.1(a) based upon, resulting from, arising out of, caused by or in connection
      with any breach of any representation or warranty contained in Section 3.1
      [Authority and Capacity], Section 3.2 [Ownership of Shares], Section 4.2
      [Capital Stock], Section 4.7 [Taxes], Section 4.10 [Environmental Matters],
      Section 4.11 [Permits; Compliance with Laws], or Section 4.27 [Brokerage],
      the
      Purchaser Indemnitees shall not be entitled to indemnification pursuant to
      Section 9.1(a) set forth above, (i) in excess of an aggregate of three million
      dollars ($3,000,000.00) (the "Indemnification
      Cap");
      (ii)
      for any individual item, or group of related items which shall include claims
      by
      unrelated parties arising out of the same or substantially similar factual
      allegations (e.g., class action claims) to the extent all Losses with respect
      to
      such item or series of related items are less than $1,000 (the "Sub-Basket"),
      and
      (iii) in respect of each item or series of related items for which all Losses
      are equal to or greater than the Sub-Basket, unless the aggregate amount of
      all
      such Losses exceeds $5,000 (the "Indemnification
      Threshold"),
      and
      thereafter the Purchaser Indemnitees shall be entitled to indemnification only
      for amounts in excess of the Indemnification Threshold, except in the case
      of
      any breach of Section 4.5(b) [contract receivables], as to which Purchaser
      Indemnitees shall be entitled to indemnification for all amounts as calculated
      from the first dollar of Losses;

     

    (c) the
      payment of any indemnification to Purchaser Indemnitees shall be paid: (i)
      in
      cash, up to an aggregate of five hundred thousand dollars ($500,000.00)
      ("Minimum
      Cash Indemnity");
      and
      (ii) above the Minimum Cash Indemnity amount, indemnification may be paid
      one-half in cash and one-half in Manchester Shares, or all in cash, in each
      case
      at the election of the indemnifying Seller; provided, however, (iii) any and
      all
      indemnification paid to Purchaser Indemnitees in respect of any breach of
      Section 4.5(b) [contract receivables] shall in all instances be paid in cash,
      but any payments in such regard shall count towards the calculation of the
      Minimum Cash Indemnity threshold in respect of all other indemnification
      purposes and the Indemnification Cap, and provided, further, any and all
      indemnification under this Agreement required, or elected, to be paid in cash
      to
      Purchaser Indemnitees shall first be deemed satisfied against any and all unpaid
      remaining principal on the Seller Note and the Subordinated Note which amounts
      shall correspondingly be offset therefrom;

     

    
      
        
        

      

      
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    (d) the
      value
      of Manchester Shares for purposes of satisfying any indemnification payment
      shall be deemed to be the same price per share as at the Closing of this
      Agreement.

     

    (e) for
      purposes of determining whether (i) there has been any breach of or inaccuracy
      in representations and warranties contained in this Agreement (including the
      schedules and exhibits attached hereto and the certificates delivered pursuant
      hereto), and (ii) calculating Losses hereunder, any materiality or Material
      Adverse Effect qualifications in such representations and warranties shall
      be
      disregarded; and

     

    (f) the
      indemnification responsibilities of any Indemnifying Shareholder hereunder
      shall
      be construed as being several in accordance with such Indemnifying Shareholder's
      relative pro-rata ownership of the Shares. No Seller other than the Indemnifying
      Shareholders shall have any liability or obligation to Purchasers and/or Parent
      under this Article
      9.

     

    9.3 Indemnification
      of Sellers.

     

    From
      and
      after the Closing Date, Purchasers and Parent shall jointly and severally
      indemnify Sellers and their successors and assigns (collectively, the
      "Seller
      Indemnitees"),
      against and hold the Seller Indemnitees harmless from:

     

    (a) any
      Losses based upon, resulting from, arising out of, caused by or in connection
      with the failure of, any inaccuracy in, or breach of, any of the representations
      and warranties in Article 5 to be true and correct on the date hereof or the
      Closing Date;

     

    (b) any
      Losses based upon, resulting from, arising out of, caused by or in connection
      with any breach or nonperformance of any covenant, agreement or obligation
      of
      Purchasers in this Agreement; or

     

    (c) any
      Losses based upon, resulting from, arising out of, caused by or in connection
      with any failure of Purchasers to comply with the provisions of this Article
      9.

     

    9.4 Limitations
      on Indemnification of Sellers.

     

    Notwithstanding
      any other provisions of this Agreement, the indemnification of Seller
      Indemnitees provided for in this Agreement shall be subject to the following
      limitations and conditions set forth in this Section 9.4:

     

    (a) except
      as
      set forth below, any claim by a Seller Indemnitee for indemnification pursuant
      to Section 9.3(a) of this Agreement shall be required to be made by delivering
      notice to Purchasers no later than the expiration of twenty-four (24) months
      after the Closing Date; provided,
      that:
      any
      claim for indemnification resulting from or arising out of any inaccuracy in
      or
      breach of any representation or warranty made by Purchasers in Section 5.1
      [Organization; Authorization], Section 5.2 [Execution and Delivery;
      Enforceability] or Section 5.4 [Brokerage] may be made at any time;

     

    
      
        
        

      

      
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    (b) except
      for claims for indemnification with respect to any inaccuracy in or breach
      of
      any representation or warranty contained in Section 5.1 [Organization;
      Authorization], Section 5.2 [Execution and Delivery; Enforceability] or Section
      5.4 [Brokerage], Seller Indemnitees shall not be entitled to indemnification
      pursuant to Section 9.3(a) until the aggregate amount of all of Seller
      Indemnitees’ claims for indemnification exceeds the Sub-Basket and the
      Indemnification Threshold and thereafter Seller Indemnitees shall be entitled
      to
      indemnification pursuant to Section 9.3(a) only for amounts in excess of the
      Indemnification Threshold; and

     

    (c) for
      purposes of determining whether (i) there has been any breach of or inaccuracy
      in representations and warranties contained in this Agreement (including the
      schedules and exhibits attached hereto and the certificates delivered pursuant
      hereto) and (ii) calculating Losses hereunder, any materiality or Material
      Adverse Effect qualifications in such representations and warranties shall
      be
      disregarded. 

     

    9.5 Procedures
      Relating to Indemnification.

     

    9.5.1 Third-Party
      Claims.
      

     

    (a) In
      order
      for a party (the "Indemnitee")
      to be
      entitled to any indemnification provided for under this Agreement in respect
      of,
      arising out of, or involving a claim or demand made by any Person against the
      Indemnitee (a "Third-Party
      Claim"),
      such
      Indemnitee must notify the party from whom indemnification hereunder is sought
      (the "Indemnitor")
      in
      writing of the Third-Party Claim no later than thirty (30) days after such
      claim
      or demand is first asserted (a "Third-Party
      Claim Notice").
      A
      Third-Party Claim Notice shall state in reasonable detail the amount or
      estimated amount of such claim, and shall identify the specific basis (or bases)
      for such claim, including the representations, warranties or covenants in this
      Agreement alleged to have been breached. Failure to give a Third-Party Claim
      Notice shall not affect the indemnification provided hereunder except to the
      extent the Indemnitor shall have been actually prejudiced as a result of such
      failure. Thereafter, the Indemnitee shall deliver to the Indemnitor, without
      undue delay, copies of all notices and documents (including court papers
      received by the Indemnitee) relating to the Third-Party Claim so long as any
      such disclosure could not reasonably be expected to have an adverse effect
      on
      the attorney-client or any other privilege that may be available to the
      Indemnitee in connection therewith.

     

    (b) If
      a
      Third-Party Claim is made against an Indemnitee, the Indemnitor shall be
      entitled to participate, at its expense, in the defense thereof. Notwithstanding
      the foregoing, if (i) the Indemnification Threshold has been exceeded, (ii)
      no
      claim for injunctive relief is being made against Indemnitee, and (iii) it
      is
      reasonably likely that Indemnitee will not suffer a Loss in excess of
      Indemnitor’s indemnification obligation hereunder, the Indemnitor may elect to
      assume and control the defense thereof with counsel selected by the Indemnitor
      that is reasonably acceptable to Indemnitee. If the Indemnitor assumes such
      defense, the Indemnitee shall have the right to participate in the defense
      thereof and to employ counsel, at its own expense, separate from the counsel
      employed by the Indemnitor, it being understood that the Indemnitor shall
      control such defense; provided,
      that,
      Indemnitee’s expenses of counsel shall be an indemnified Loss for purposes of
      this Article 9 if such counsel reasonably concludes that a conflict or potential
      conflict exists between Indemnitee and Indemnitor that would make separate
      representation advisable. If the Indemnitor so assumes the defense of any
      Third-Party Claim, all of the indemnified parties shall reasonably cooperate
      with the Indemnitor in the defense or prosecution thereof. Such cooperation
      shall include, at the expense of the Indemnitor, the retention and (upon the
      Indemnitor’s request) the provision to the Indemnitor of records and information
      which are reasonably relevant to such Third-Party Claim, and making employees
      available on a mutually convenient basis to provide additional information
      and
      explanation of any material provided hereunder. If the Indemnitor has assumed
      the defense of a Third-Party Claim, (i) the Indemnitee shall not admit any
      liability with respect to, or settle, compromise or discharge, such Third-Party
      Claim without the Indemnitor’s prior written consent (which consent shall not be
      unreasonably withheld or delayed); (ii) the Indemnitee shall agree to any
      settlement, compromise or discharge of a Third-Party Claim which the Indemnitor
      may recommend and which by its terms releases the Indemnitee from any liability
      in connection with such Third-Party Claim without cost or expense and without
      any admission of violation, injunction or agreement to take or restrain from
      taking any action; and (iii) the Indemnitor shall not, without the written
      consent of the Indemnitee, enter into any settlement, compromise or discharge
      or
      consent to the entry of any judgment which imposes any expense, obligation
      or
      restriction upon the Indemnitee or requires the Indemnitee to admit or
      acknowledge to any fact or event, including any violation of Law. 

     

    
      
        
        

      

      
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    9.5.2 Other
      Claims.
      In the
      event any Indemnitee should have a claim against any Indemnitor under this
      Agreement that does not involve a Third-Party Claim, the Indemnitee shall
      deliver notice of such claim to the Indemnitor promptly following discovery
      of
      any indemnifiable Loss, but in any event not later than the last date set forth
      in Section 9.2 or 9.4, as the case may be, for making such claim (a
      "Claim
      Notice"
      and,
      together with the Third-Party Claim Notices, an "Indemnification
      Notice").
      Such
      Claim Notice shall, to the extent known by Indemnitee at the time, state in
      reasonable detail the amount or an estimated amount of such claim, and shall
      specify the facts and circumstances, to the extent known by Indemnitee at the
      time, which form the basis (or bases) for such claim, and shall further specify
      the representations, warranties or covenants alleged to have been breached.
      Failure to give a Claim Notice shall not affect the indemnification provided
      hereunder except to the extent the Indemnitor shall have been actually
      prejudiced as a result of such failure. Upon receipt of any a Claim Notice,
      the
      Indemnitor shall notify the Indemnitee as to whether the Indemnitor accepts
      liability for any Loss and shall make payment to the Indemnitee within ten
      business days of receipt of such notice. If the Indemnitor disputes its
      liability with respect to such claim, as provided above, the Indemnitor and
      the
      Indemnitee shall attempt to resolve such dispute in accordance with the terms
      and provisions of Section 11.4, provided, however, if the Indemnitor disputes
      liability and does not pay such indemnification claim within ten business days
      of such receipt, and Indemnitor is ultimately determined to be liable for such
      indemnification, interest shall apply to the total amount of such claim at
      the
      highest legally permissible rate and shall be due and payable in addition to
      any
      claim for indemnification, which interest shall be calculated from the date
      of
      receipt of such Claim Notice by the Indemnitor, and Indemnitor shall furthermore
      be liable for any and all subsequent Losses incurred by Indemnitee as a
      consequence of the failure to pay such indemnification within ten business
      days,
      including, without limitation, any and all fees, costs, expenses and
      disbursements of counsel to Indemnitee in connection with the enforcement of
      this Agreement. 

     

    
      
        
        

      

      
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    9.6 Exclusive
      Remedy. 

     

    From
      and
      after the Closing, except (i) in the event of fraud (in which case the parties
      shall be entitled to exercise all of their rights, and seek all damages
      available to them, under law or equity), or (ii) for specific performance of
      obligations to be performed after the Closing Date, the sole and exclusive
      remedy of the parties hereto for breach of this Agreement shall be
      indemnification in accordance with this Article 9. In
      furtherance of the foregoing, effective as of the Closing Date, each Seller,
      on
      behalf of himself, herself or itself and each of its past, present and future
      Affiliates, beneficiaries and assigns ("Related
      Persons")
      hereby
      releases and forever discharges each Acquired Companies and each of its past,
      present and future Affiliates, shareholders, members, successors and assigns
      and
      their respective officers, directors and employees (each, a "Releasee"
      and
      collectively, "Releasees"),
      from
      any and all claims, demands, proceedings, causes of action, (including rights
      of
      contribution, if any, court orders, obligations, contracts and agreements
      (express or implied), debts or liabilities under or related to the Shares,
      the
      Acquired Companies or their respective predecessors in interest, including
      any
      liability or obligation arising under or pursuant to any shareholder agreement,
      indemnity agreements, employment agreement or other compensation agreement,
      accrued and unpaid compensation or any claim for indemnification pursuant to
      the
      Organizational Documents of any Acquired Companies, in each case, whether known
      or unknown, suspected or unsuspected, both at law and in equity, which such
      Seller or any of its Related Persons now has, has ever had or hereafter has
      against the respective Releasees. Notwithstanding anything in this Agreement
      to
      the contrary, Sellers agree that, should they become liable for indemnification
      to any Purchasers Indemnitee pursuant to Section 9.1, none of the Acquired
      Companies shall have any liability to any Seller for reimbursement,
      indemnification, subrogation or otherwise as a result of such breach. No Seller
      shall have any right, whether by way of indemnification, contribution or
      otherwise, to reimbursement from Purchasers or any of its Affiliates (including
      any of the Acquired Companies) for any indemnification payments made by such
      Seller pursuant to Section 9.1. 

     

    ARTICLE
      10: CERTAIN
      DEFINITIONS

     

    When
      used
      in this Agreement, the following terms in all of their singular or plural,
      tenses, cases and correlative forms shall have the meanings assigned to them
      in
      this Article 10, or elsewhere in this Agreement as indicated in this Article
      10:

     

    "Acquired
      Company"
      means
      each of FSE and GNAC individually, and "Acquired
      Companies"
      means
      each of FSE and GNAC collectively with the Acquired Companies Subsidiaries,
      and
      includes any Person merged with or into, or was liquidated into, any Acquired
      Companies.

     

    "Acquisition
      Balance Sheet"
      is
      defined in Section 4.5.

     

    "Acquisition
      Consideration"
      is
      defined in Section 2.2.

     

    "Acquired
      Companies Intellectual Property"
      means
      the Intellectual Property owned or used by any of the Acquired
      Companies.

     

    
      
        
        

      

      
        47

        
          

        

      

      
        
        

      

    

     

    "Acquired
      Companies Plan"
      means
      any
      Plan to which any of the Acquired Companies (or any ERISA Affiliate on behalf
      of
      an Acquired Companies) contributes to, is a party to, is bound under or may
      have
      liability with respect to
      (or
      at
      any time during the six (6) year period preceding the date hereof has
      contributed, been a party to, been bound under or had liability with respect
      to)
and
      under
      which directors, employees,
      independent contracts, consultants or other members of the workforce of an
      Acquired Companies are eligible to participate or derive a benefit.

     

    "Acquired
      Companies Subsidiary"
      and
      "Acquired
      Companies Subsidiaries"
      is
      defined in Section 4.2.2.

     

    "Affiliate"
      of a
      specified Person means any other Person which, directly or indirectly, through
      one or more intermediaries, controls, is controlled by, or is under common
      control with such specified Person. For purposes of this definition,
      "Control"
      of any
      Person means possession, directly or indirectly, of the power to direct or
      cause
      the direction of the management and policies of such Person, whether through
      the
      ownership of voting capital stock, by contract, or otherwise.

     

    "Agreement"
      means
      this Stock Purchase Agreement, as may be amended from time to time.


     

    "Arbiter
      Accountants"
      is
      defined in Section 2.4.3.

     

    "Business
      Day"
      means
      any day other than a Saturday, Sunday or a day on which banks in New York,
      New
      York are authorized or obligated by Law to close.

     

    "Cash"
      means
      the cash and cash equivalents of the Acquired Companies minus
      any
      checks issued by any Acquired Companies and outstanding at the time of
      determination. 

     

    "Cash
      Purchase Price"
      is
      defined in Section 2.2.

     

    "Charged-Off
      Receivables"
      is
      defined in Section 4.5(b).

     

    "Claim
      Notice"
      is
      defined in Section 9.5.2.

     

    "Closing"
      and
      "Closing
      Date"
      are
      defined in Section 6.1.

     

    "Closing
      Certificate"
      is
      defined in Section 2.3.1.

     

    "Closing
      Date Payment"
      is
      defined in Section 2.3.

     

    "Closing
      Net Indebtedness"
      means
      the Net Indebtedness of the Acquired Companies as reflected on the Final
      Adjustment Statement.

     

    "Code"
      means
      the United States Internal Revenue Code of 1986, as amended, and the regulations
      thereunder.

     

    "Competing
      Products"
      is
      defined in Section 8.6(c).

     

    
      
        
        

      

      
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    "Confidential
      Information"
      is
      defined in Section 8.6.

     

    "Contract"
      and
      "Contracts"
      is
      defined in Section 4.16.

     

    "Current
      Receivables"
      is
      defined in Section 4.5(b).

     

    "CPR"
      is
      defined in Section 11.4.

     

    "Default
      Receivables"
      is
      defined in Section 4.5(b).

     

    "Delaware
      Merger Agreements"
      is
      defined in Section 2.6.

     

    "Disposal,"
      "Storage"
      and
      "Treatment"
      shall
      have the meanings assigned them at 42 U.S.C. § 6903(3)(33) and (34),
      respectively, but the terms shall be applied to all "Hazardous Materials,"
      regardless of quantity, not solely to "Hazardous Waste" as defined in such
      statute. 

     

    "Dispute
      Notice"
      is
      defined in Section 8.5.2.

     

    "Enforceability
      Exceptions"
      is
      defined in Section 3.3.

     

    "ERISA"
      means
      the Employee Retirement Income Security Act of 1974, as amended, and the
      regulations thereunder.

     

    "ERISA
      Affiliate"
      means
      any Person that is (or at any relevant time was) a member of a "controlled
      group
      of corporations" with or under "common control" with, or a member of an
      "affiliated service group" with, or otherwise required to be aggregated with,
      any Acquired Companies as set forth in Section 414(b), (c), (m) or (o) of the
      Code or Section 4001(b) of ERISA.

     

    "Estimated
      Closing Net Indebtedness"
      is
      defined in Section 2.3.1.

     

    "Estimated
      Closing Working Capital"
      is
      defined in Section 2.3.1.

     

    "Exchange
      Act"
      is
      defined in Section 3.6.

     

    "Financial
      Statements"
      is
      defined in Section 4.5.

     

    "Franchise
      Agreements"
      is
      defined in Section 5.10.

     

    "FSE"
      means
      F.S. English, Inc., an Indiana corporation.

     

    "FSE
      Shares"
      is
      defined in the recitals.

     

    "GAAP"
      means
      generally accepted accounting principles, as in effect in the United
      States.

     

    "GNAC"
      means
      GNAC, Inc., an Indiana corporation.

     

    "GNAC
      Shares"
      is
      defined in the recitals.

     

    
      
        
        

      

      
        49

        
          

        

      

      
        
        

      

    

     

    "Governmental
      Authority"
      means
      any domestic, foreign or multi-national federal, state, provincial, regional,
      municipal or local governmental or administrative authority, including any
      court, tribunal, agency, bureau, committee, board, regulatory body,
      administration, commission or instrumentality constituted or appointed by any
      such authority.

     

    "Hazardous
      Material"
      means
      any chemical, substance, waste, material, pollutant, or contaminant, regardless
      of quantity, the use, Storage, Disposal, Treatment or transportation of which
      is
      regulated under Law.

     

    "Indebtedness"
      means,
      as at any date of determination thereof (without duplication): (a) all
      obligations (other than intercompany obligations) of the Acquired Companies
      for
      borrowed money or funded indebtedness or issued in substitution for or exchange
      for borrowed money or funded indebtedness (including obligations in respect
      of
      principal, accrued interest, any applicable prepayment charges or premiums
      and
      any unpaid fees, expenses or other monetary obligations in respect thereof);
      (b)
      any indebtedness evidenced by any note, bond, debenture or other debt security;
      (c) the lease obligations required to be listed on Schedule 4.22
      or
      required to be capitalized in accordance with GAAP; (d) all obligations for
      reimbursement then required to be made of any obligor on any banker’s acceptance
      or similar transactions (but excluding standby letters of credit); (e) all
      obligations for the deferred purchase price of property, all conditional sale
      obligations of any Acquired Companies under any title retention agreement (but
      exceeding trade accounts payable and other accrued liability arising in the
      ordinary course of business); (f) any obligations with respect to the
      termination of any interest rate hedging or swap agreements; (g) all obligations
      of the type referred to in clauses (a) through (f) of any Person for the payment
      of which any Acquired Companies is responsible or liable, directly or
      indirectly, as guarantor, obligor, surety or otherwise (excluding intercompany
      debt); (h) obligations of the type referred to in clauses (a) through (g) of
      other Persons secured by any Lien on any property or asset of any Acquired
      Companies but only to the extent of the value of the property or asset that
      is
      subject to such Lien. 

     

    "Indemnitee"
      and
      "Indemnitor"
      are
      defined in Section 9.5.1.

     

    "Indemnification
      Cap"
      is
      defined in Section 9.2.

     

    "Indemnification
      Notice"
      is
      defined in Section 9.5.2.

     

    "Indemnification
      Threshold"
      is
      defined in Section 9.2.

     

    "Indiana
      Acceptance"
      means
      Manchester Indiana Acceptance, Inc., a Delaware corporation.

     

    "Indiana
      Merger Filings"
      is
      defined in Section 2.6.

     

    "Indiana
      Operations"
      means
      Manchester Indiana Operations, Inc., a Delaware corporation. 

     

    "Intellectual
      Property"
      means
      all rights arising from or in respect of any of the following in any
      jurisdiction throughout the world: (i) patents, patent applications, patent
      disclosures and inventions, including any continuations, divisionals,
      continuations-in-part, renewals and reissues for any of the foregoing, (ii)
      Internet domain names, trademarks, service marks, service names, trade dress
      rights, trade names, brand marks and names, slogans, logos and corporate names
      and registrations and applications for registration thereof together with all
      of
      the goodwill associated therewith, (iii) copyrights (registered or unregistered)
      and copyrightable works and registrations and applications for registration
      thereof, and mask works and registrations and applications for registration
      thereof, (iv) computer software, (specifically excluding all shrink wrap
      software), data, data bases and documentation thereof, (v) trade secrets and
      other confidential and proprietary information (including ideas, formulas,
      compositions, inventions (whether patentable or unpatentable and whether or
      not
      reduced to practice), know-how, manufacturing and production processes and
      techniques, research and development information, drawings, specifications,
      designs, plans, proposals, technical data, copyrightable works, financial and
      marketing plans and customer and supplier lists and information) (collectively,
      "Trade
      Secrets"),
      and
      (vi) copies and tangible embodiments thereof (in whatever form or
      medium).

     

    
      
        
        

      

      
        50

        
          

        

      

      
        
        

      

    

     

    "IRS"
      means
      the United States Internal Revenue Service and, to the extent relevant, the
      United States Department of Treasury. 

     

    "Law"
      means
      any federal, state, provincial, regional, local or foreign law (including common
      law), statute, code, ordinance, rule, regulation or other similar pronouncement
      binding upon or effecting any Acquired Companies issued by a Governmental
      Authority.

     

    "Leased
      Real Property"
      means
      all real property leased by any Acquired Companies together with all
      improvements, buildings, fixtures located thereon and appurtenant rights and
      interests associated therewith.

     

    "Leases"
      is
      defined in Section 4.12.1.

     

    "Lien"
      means
      any lien, charge, mortgage, deeds of trust, pledge, easement, encumbrance or
      security interest.

     

    "Loss"
      or
      "Losses"
      means
      any and all losses (direct or indirect), liabilities, claims, demands,
      judgments, damages, fines, costs, expenses, penalties, actions, notices of
      violation, and notices of liability and any claims in respect thereof (including
      the costs of reasonable investigation, remediation, accountants and attorney’s
      fees).

     

    "Manchester
      Shares"
      is
      defined in Section 2.2.

     

    "Material
      Adverse Effect"
      means
      any effect or change which has had a material adverse or material negative
      impact on the properties, assets, operations, prospects or financial condition
      of the Acquired Companies or the Parent, as the case may be, or its business
      taken as a whole as conducted by the Acquired Companies or the Parent, as the
      case may be, immediately prior to the Closing, or the ability of any party
      hereto to consummate any of the transactions contemplated by this Agreement;
      provided, however, that in no event shall any of the following constitute a
      Material Adverse Effect: any adverse change, event, development, or effect
      arising from or relating to (i) the announcement or pendency of any of the
      transactions contemplated by this Agreement or (ii) compliance by Sellers with
      the terms of, or the taking of any action contemplated or permitted by, this
      Agreement; provided,
      however, that the following shall not be considered a "Material Adverse Effect":
      changes, events, violations, inaccuracies, circumstances and effects that are
      caused by conditions affecting the United States economy as a whole or affecting
      the industry in which such entity competes as a whole, and any
      reduction in the trading price of Parent's Common Stock, whether occurring
      at
      any time or from time to time, as reported by any automated quotation system
      or
      exchange shall not constitute a Material Adverse Effect.

     

    
      
        
        

      

      
        51

        
          

        

      

      
        
        

      

    

     

    "Material
      Contracts"
      is
      defined in Section 4.16.

     

    "Material
      Customers"
      is
      defined in Section 4.20.

     

    "Material
      Seller"
      is
      defined in Section 8.6.

     

    "Material
      Suppliers"
      is
      defined in Section 4.20. 

     

    "Minimum
      Cash Indemnity"
      is
      defined in Section 9.2.

     

    "Net
      Indebtedness"
      means
      an amount equal to Cash minus
      Indebtedness.

     

    "Non-Competition
      Period"
      is
      defined in Section 8.6(c).

     

    "Non-Competition
      Period for Sellers’ Representative"
      is
      defined in Section 8.6(c).

     

    "Non-Competition
      Period for Material Sellers"
      is
      defined in Section 8.6(c).

     

    "Non-Competition
      Period for Non-Material Sellers"
      is
      defined in Section 8.6(c).

     

    "Non-Material
      Seller"
      is
      defined in Section 8.6(c).

     

    "Order"
      is
      defined in Section 4.17.

     

    "Organizational
      Documents"
      means
      (a) the articles or certificate of incorporation, the memorandum of association,
      the articles of association and the bylaws of a corporation, as applicable;
      (b)
      the partnership agreement and any statement of partnership of a general
      partnership; (c) the limited partnership agreement and the certificate of
      limited partnership of a limited partnership; (d) any charter or similar
      document adopted or filed in connection with the creation, formation, or
      organization of a Person; (e) the declaration of trust and trust agreement
      of
      any trust; and (f) any amendment to any of the foregoing.

     

    "Parent"
      means
      Manchester Inc., a Nevada corporation.

     

    "Parent
      SEC Reports"
      is
      defined in Section 5.4.

     

    "Payoff
      Letters"
      means
      the letters provided by the lenders or other holders of Indebtedness to the
      Acquired Companies in connection with the repayment of the Indebtedness as
      contemplated hereby.

     

    "Permits"
      means
      any and all of the approvals, authorizations, consents, licenses, permits or
      certificates (including applications or negotiations thereof) required by any
      Governmental Authority for the ownership of, leasing or operation of the
      business or any assets of any Acquired Companies.

     

    
      
        
        

      

      
        52

        
          

        

      

      
        
        

      

    

     

    "Permitted
      Liens"
      means
      (i) mechanics’, carriers’, workmen’s, repairmen’s or other like Liens arising or
      incurred in the ordinary course of business for sums that are not yet due and
      payable or being contested in good faith, if a reserve as required by GAAP
      shall
      have been made therefor, (ii) Liens arising under original purchase price
      conditional sales contracts and equipment leases with third parties entered
      into
      in the ordinary course of business, included in the definition of Indebtedness
      and under which the Acquired Companies are not in default, (iii) easements,
      covenants, rights-of-way and other similar restrictions or conditions disclosed
      in policies of insurance provided to Purchasers prior to the date hereof, or
      (iv) statutory liens for current Taxes, assessments or other governmental
      charges not yet delinquent or the amount or validity of which is being contested
      in good faith by appropriate proceedings.

     

    "Person"
      means
      an individual, a corporation, a limited liability company, a partnership, a
      trust, an unincorporated association, a government or any agency,
      instrumentality or political subdivision of a government, or any other entity
      or
      organization.

     

    "Plan"
      means
      (i) all employee benefit plans (as defined in Section 3(3) of ERISA, whether
      domestic or foreign), and (ii) all bonus (including transaction bonus),
      incentive compensation, stock appreciation right, phantom stock, restricted
      stock, restricted stock unit, performance stock, performance stock unit,
      employee stock ownership, stock purchase, equity or equity-based, deferred
      compensation, change in control, employment, noncompetition, nondisclosure,
      vacation, holiday, sick leave, retention, severance, retirement, pension, money
      purchase, target benefit, cash balance, excess benefit supplemental executive
      retirement, profit sharing, life insurance, cafeteria (Section 125), adoption
      assistance, dependent care assistance, voluntary employees beneficiary, multiple
      employer welfare, accident, disability, fringe benefit, welfare benefit, paid
      time off, employee loan, and salary continuation plans, programs, policies,
      agreements, arrangements, commitments, practices, contracts and understandings
      (written or unwritten) including without limitation, any trust, escrow or other
      agreement related thereto and any similar plans, programs, policies, agreements,
      arrangements, commitments, practices, contracts and understandings (written
      or
      unwritten).

     

    "Post-Closing
      Tax Period"
      means
      any taxable period that begins after the Closing Date; if a taxable period
      begins on or prior to the Closing Date and ends after the Closing Date, then
      the
      portion of the taxable period that begins immediately after the Closing Date
      shall constitute a Post-Closing Tax Period.

     

    "Pre-Closing
      Tax Period"
      means
      any taxable period or portion thereof that ends on or prior to the Closing
      Date;
      if a taxable period begins on or prior to the Closing Date and ends after the
      Closing Date, then the portion of the taxable period that ends on and includes
      the Closing Date shall constitute a Pre-Closing Tax Period.

     

    "Preliminary
      Adjustment Statement"
      is
      defined in Section 2.4.1.

     

    "Preliminary
      Post-Closing Adjustment"
      is
      defined in Section 2.4.1.

     

    "Product
      Liability Claim"
      is
      defined in Section 4.19.

     

    
      
        
        

      

      
        53

        
          

        

      

      
        
        

      

    

     

    "Purchaser"
      and
      "Purchasers"
      are
      defined in the introductory statements of this Agreement.

     

    "Purchaser
      Indemnitees"
      is
      defined in Section 9.1.

     

    "Real
      Property"
      means
      the Leased Real Property and the Owned Real Property. 

     

    "Release"
      shall
      have the meaning assigned it at 42 U.S.C. Section 9601(22) without giving effect
      to exception (A). 

     

    "Release
      Letter"
      is
      defined in Section 8.2.

     

    "Releasee"
      and
      "Releasees"
      are
      defined in Section 9.6.

     

    "Related
      Person"
      is
      defined in Section 4.25.

     

    "Related
      Persons"
      are
      defined in Section 9.6.

     

    "Removal,"
      "Remedial"
      and
      "Response"
      actions
      shall include the types of activities covered by CERCLA, RCRA, and other
      comparable Environmental Laws, and whether the activities are those that might
      be taken by a Governmental Authority or those that a Governmental Authority
      might seek to require of third parties under "removal," "remedial" or other
      "response" actions.

     

    "Rule
      144"
      is
      defined in Section 3.6.

     

    "SEC"
      means
      the U.S. Securities and Exchange Commission.

     

    "Securities
      Act"
      is
      defined in Section 3.6.

     

    "Seller"
      and
      "Sellers"
      are
      defined in the introductory statements of this Agreement.

     

    "Seller
      Indemnitees"
      is
      defined in Section 9.3.

     

    "Seller
      Note"
      is
      defined in Section 2.2(b).

     

    "Seller’s
      Respective Shares"
      is
      defined in Section 2.1.

     

    "Seller
      Tax Returns"
      is
      defined in Section 8.5.2.

     

    "Sellers’
      Account"
      is
      defined in Section 2.3.

     

    "Sellers’
      Representative"
      is
      defined in the introductory statements of this Agreement.

     

    "Seller’s
      Respective Shares"
      is
      defined in Section 2.1(b).

     

    
      
        
        

      

      
        54

        
          

        

      

      
        
        

      

    

     

    "Selling
      Expenses"
      means
      all (a) unpaid costs, fees and expenses of outside professionals incurred by
      the
      Acquired Companies and Sellers relating to the process of selling the Shares,
      including all legal fees, accounting, tax, investment banking fees and expenses
      and (b) all change in control payment obligations of any of the Acquired
      Companies resulting from the consummation of the transactions contemplated
      herein.

     

    "Shares"
      means
      all of the FSE Shares and the GNAC Shares.

     

    "Straddle
      Period"
      means
      any taxable period that begins before the Closing Date and ends after the
      Closing Date.

     

    "Sub-Basket"
      is
      defined in Section 9.2(b).

     

    "Subordinated
      Note"
      is
      defined in Section 2.4(b).

     

    "Subsidiary"
      means,
      with respect to any Person, any corporation of which a majority of the total
      voting power of shares of stock entitled (without regard to the occurrence
      of
      any contingency) to vote in the election of directors, managers or trustees
      thereof is at the time owned or controlled, directly or indirectly, by such
      Person or one or more of the other Subsidiaries of such Person or a combination
      thereof, or any partnership, association or other business entity of which
      a
      majority of the partnership or other similar ownership interest is at the time
      owned or controlled, directly or indirectly, by such Person or one or more
      Subsidiaries of such Person or a combination thereof. For purposes of this
      definition, a Person is deemed to have a majority ownership interest in a
      partnership, association or other business entity if such Person is allocated
      a
      majority of the gains or losses of such partnership, association or other
      business entity or is or controls the managing director or general partner
      of
      such partnership, association or other business entity.

     

    "Tax"
      or
      "Taxes"
      "shall
      mean any federal, national, state, local or foreign income, gross receipts,
      franchise, estimated, alternative minimum, add-on minimum, sales, use, transfer,
      real property gains, registration, value added, excise, natural resources,
      severance, stamp, occupation, premium, windfall profit, customs, duties, real
      property, personal property, capital stock, social security, unemployment,
      disability, payroll, license, employee or other withholding, Unclaimed Funds
      or
      other tax, of any kind whatsoever, including any interest, penalties or
      additions to tax or additional amounts or required contributions in respect
      of
      the foregoing; the foregoing shall include any transferee or secondary liability
      for a Tax and any liability assumed by agreement or arising as a result of
      being
      (or ceasing to be) a member of any affiliated group (or being included (or
      required to be included) in any Tax Return relating thereto).

     

    "Taxing
      Authority"
      means
      any domestic or foreign national, state, provincial, multi-state or municipal
      or
      other local executive, legislative or judicial government, court, tribunal,
      official, board, subdivision, agency, commission or authority thereof, or any
      other governmental body exercising any regulatory or taxing authority thereunder
      having jurisdiction over the assessment, determination, collection or other
      imposition of any Tax.

     

    "Tax
      Matter"
      is
      defined in Section 8.5.4.

     

    
      
        
        

      

      
        55

        
          

        

      

      
        
        

      

    

     

    "Tax
      Return"
      shall
      mean any return, declaration, report, claim for refund, information return
      or
      other document (including any related or supporting schedule, statement or
      information) filed or required to be filed in connection with the determination,
      assessment or collection of any Tax of any party or the administration of any
      Laws, regulations or administrative requirements relating to any
      Tax.

     

    "Third-Party
      Claim"
      is
      defined in Section 9.5.1.

     

    "Third-Party
      Claim Notice"
      is
      defined in Section 9.5.1.

     

    "To
      Sellers’ Knowledge"
      means
      those facts or circumstances actually known by each Seller or any of the
      directors or officers and management level employees of any Acquired Companies
      or any facts or circumstances which would be known by such individual after
      due
      inquiry. 

     

    "Trade
      Secrets"
      is
      defined in the definition of Intellectual Property.

     

    "Transfer
      Taxes"
      is
      defined in Section 8.5.5.

     

    "Unclaimed
      Funds" shall
      mean any customer deposit, customer credit or other financial asset held by
      any
      Acquired Companies that has been left inactive by such Acquired Companies and
      such financial asset is required by applicable Law to be either reported,
      escheated or otherwise remitted to the applicable Governmental Authority that
      administers unclaimed funds.

     

    "WARN
      Act"
      means
      the Worker Adjustment and Retraining Notification Act, as amended, and the
      regulations thereunder.


     

    ARTICLE
      11: CONSTRUCTION;
      MISCELLANEOUS PROVISIONS

     

    11.1 Notices. 

     

    Any
      notice to be given or delivered pursuant to this Agreement shall be ineffective
      unless given or delivered in writing, and shall be given or delivered in writing
      as follows:

     

    (a) If
      to
      Purchasers or Parent, to:

     

    Manchester
      Indiana Acceptance, Inc.

    Manchester
      Indiana Operations, Inc.

    Manchester
      Inc.

    


    100
      Crescent Court, 7th
      Floor

    Dallas,
      Texas, 75201

    Attention:
      Richard Gaines

    Telecopy
      Number: (214) 459-8035

     

    
      
        
        

      

      
        56

        
          

        

      

      
        
        

      

    

    


    With
      a
      copy to:

    


    Wuersch
      & Gering LLP

    100
      Wall
      Street, 21st
      Floor

    New
      York,
      New York 10005

    Attention:
      Travis L. Gering, Esq.

    Telecopy
      Number: (212) 509-9559

    


    (b) If
      to
      Sellers’ Representative, Sellers or to any Seller, to Sellers or such Seller in
      care of:

     

    Rick
      Stanley

    13533
      Marjac Way

    McCordsville,
      Indiana 46055

    Telecopy
      Number: (317) 624-0556 

    


    With
      a
      copy to:

    


    Ice
      Miller LLP

    One
      American Square

    Suite
      3100

    Indianapolis,
      Indiana 46282-0200

    Attention:
      Steven K. Humke, Esq.

    Telecopy
      number: (317) 592-4675

    


    or
      in any
      case, to such other address for a party as to which notice shall have been
      given
      to Purchasers and Sellers’ Representative in accordance with this Section.
      Notices so addressed shall be deemed to have been duly given (i) on the third
      Business Day after the day of registration, if sent by registered or certified
      mail, postage prepaid, (ii) on the next Business Day following the documented
      acceptance thereof for next-day delivery by a national overnight air courier
      service, if so sent, or (iii) on the date sent by facsimile transmission or
      personal delivery, if electronically confirmed. Otherwise, notices shall be
      deemed to have been given when actually received at such address.

     

    11.2 Entire
      Agreement.

     

    This
      Agreement and the schedules and exhibits hereto constitute the exclusive
      statement of the agreement among Purchasers and each Seller concerning the
      subject matter hereof, and supersedes all other prior agreements, oral or
      written, among or between any of the parties hereto concerning such subject
      matter, including without limitation the Letter Agreement previously entered
      into among certain of the parties. All negotiations among or between any of
      the
      parties hereto are superseded by this Agreement, and there are no
      representations, warranties, promises, understandings or agreements, oral or
      written, in relation to the subject matter hereof among or between any of the
      parties hereto other than those expressly set forth or expressly incorporated
      herein. The recitals, schedules and exhibits to this Agreement are incorporated
      herein and, by this reference, made a part hereof as if fully set forth at
      length herein.

     

    
      
        
        

      

      
        57

        
          

        

      

      
        
        

      

    

     

    11.3 Modification. 

     

    No
      amendment, modification, or waiver of this Agreement or any provision hereof,
      including the provisions of this sentence, shall be effective or enforceable
      as
      against a party hereto unless made in a written instrument that specifically
      references this Agreement and that is signed by the party waiving compliance,
      or
      in the case of the Seller, by Sellers’ Representative.

     

    11.4 Mediation,
      Jurisdiction and Venue.

     

    11.4.1 Mandatory
      Mediation.
      Unless
      and except to the extent otherwise expressly agreed in writing by Sellers’
Representative and Purchasers, in the event of any dispute arising out of or
      related to this Agreement or any of the transactions contemplated hereby, the
      parties shall be required to enter into mediation of such dispute or
      disagreement for a minimum of ten (10) hours prior to the initiation of any
      action or proceeding against the other. Upon notice by either party to the
      other
      of the initiating party’s desire to mediate, the parties shall endeavor to
      settle the dispute by mediation under the then current Center for Public
      Resources ("CPR")
      Model
      procedure for mediation of business disputes. The location for the mediation
      shall be in New York City, New York, and the neutral third party will be
      selected from the CPR Panel of Neutrals applicable to such geographical area.
      If
      the parties encounter difficulty in agreeing on a Neutral, they will seek the
      assistance of CPR in the selection process. A mediation proceeding shall
      thereafter be scheduled at a time mutually convenient to the parties involved.
      The mediation shall be held within thirty (30) days following the notification
      by a party of a desire for mediation. If the parties cannot agree on a date
      for
      mediation, then the CPR shall select a date it believes is reasonable for the
      parties, given all of the alleged conflicts in dates. The parties shall equally
      share the cost of the mediator.

     

    11.4.2 Jurisdiction
      and Venue.
      The
      parties agree that no action, suit or proceeding at law, in equity or otherwise
      which in any way arises out of or relates to this Agreement or the transactions
      contemplated hereby shall be brought prior to the parties’ compliance with
      Section 11.4.1, and after such compliance each party hereto agrees that any
      claim relating to this Agreement shall be brought solely in the state or federal
      courts in New York and all objections to personal jurisdiction and venue in
      any
      action, suit or proceeding so commenced are hereby expressly waived by all
      parties hereto. The parties waive personal service of any and all process on
      each of them and consent that all such service of process shall be made in
      the
      manner, to the party and at the address set forth in Section 11.1 of this
      Agreement, and service so made shall be complete as stated in such
      section.

     

    11.5 Binding
      Effect. 

     

    This
      Agreement shall be binding upon and shall inure to the benefit of each
      Purchaser, each Seller, and the respective successors and permitted assigns
      of
      each Purchaser and of each Seller.

     

    11.6 Headings
      and Construction. 

     

    The
      article and section headings used in this Agreement are intended solely for
      convenience of reference, do not themselves form a part of this Agreement,
      and
      may not be given effect in the interpretation or construction of this Agreement.
      No party shall be deemed to be the drafter of this Agreement and in the event
      this Agreement is ever construed by a court of law, such court of law shall
      not
      construe this Agreement or any provision thereof against any of the parties
      as
      the drafter of this Agreement. The Purchasers, the Sellers, the Parent, and
      the
      Sellers’ Representative acknowledge and agree that all of the parties have
      contributed substantially and materially to the preparation of this
      Agreement.

     

    
      
        
        

      

      
        58

        
          

        

      

      
        
        

      

    

     

    11.7 Number
      and Gender; Inclusion. 

     

    Whenever
      the context requires in this Agreement, the masculine gender includes the
      feminine or neuter, the neuter gender includes the masculine or feminine, the
      singular number includes the plural, and the plural number includes the
      singular. In every place where it is used in this Agreement, the word
      "including" is intended and shall be construed to mean "including, without
      limitation."

     

    11.8 Counterparts. 

     

    This
      Agreement may be executed and delivered in multiple counterparts, each of which
      shall be deemed an original, and all of which together shall constitute one
      and
      the same instrument. A facsimile or other copy of a signature shall be deemed
      an
      original for purposes of this Agreement. Only one counterpart of this Agreement
      executed by the party against which it will be enforced need be provided to
      evidence this Agreement.

     

    11.9 Third
      Parties. 

     

    Except
      as
      may otherwise be expressly stated herein, no provision of this Agreement is
      intended or shall be construed to confer on any Person, other than the parties
      hereto, any rights hereunder. Purchaser Indemnitees and Seller Indemnitees
      who
      are not otherwise parties to this Agreement shall be third party beneficiaries
      of this Agreement.

     

    11.10 Time
      Periods. 

     

    Any
      action required hereunder to be taken within a certain number of days shall,
      except as may otherwise be expressly provided herein, be taken within that
      number of calendar days; provided, however, that if the last day for taking
      such
      action falls on a Saturday, a Sunday, or a legal holiday, the period during
      which such action may be taken shall automatically be extended to the next
      Business Day.

     

    11.11 Governing
      Law. 

     

    This
      Agreement shall be governed by and construed in accordance with the Laws of
      the
      State of New York, without regard to the choice-of-laws or conflicts-of-laws
      provisions thereof.

     

    11.12 Survival. 

     

    
      
        
        

      

      
        59

        
          

        

      

      
        
        

      

    

     

    The
      representations and warranties in this Agreement shall survive the Closing
      Date
      until the termination of the indemnification obligations under Article Nine.
      The
      covenants contained in this Agreement shall survive until performed in
      accordance with their respective terms. 

     

    11.13 Further
      Assurances.

     

    Each
      party hereto agrees to use such party's reasonable best efforts to cause the
      conditions to such party's obligations herein set forth to be satisfied at
      or
      prior to the Closing insofar as such matters are within its control. Each of
      the
      parties agrees to execute and deliver any and all further agreements, documents
      or instruments necessary to effectuate this Agreement and the transactions
      referred to herein or contemplated hereby or reasonably requested by any other
      party to evidence its rights hereunder. 

     

    11.14 Severability. 

     

    Any
      provision of this Agreement which is invalid or unenforceable in any
      jurisdiction shall be ineffective to the extent of such invalidity or
      unenforceability without invalidating or rendering unenforceable the remaining
      provisions hereof, and any such invalidity or unenforceability in any
      jurisdiction shall not invalidate or render unenforceable such provision in
      any
      other jurisdiction. If any provision is held to be invalid or unenforceable,
      such provision shall be construed by the appropriate judicial body by limiting
      or reducing it to the minimum extent necessary to make it legally enforceable.
      

     

    
      
        
        

      

      
        60

        
          

        

      

      
        
        

      

    


    IN
      WITNESS WHEREOF, Purchasers, Parent, Sellers and Sellers’ Representative have
      executed and delivered this Stock Purchase Agreement, or have caused this Stock
      Purchase Agreement to be executed and delivered by their duly authorized
      representatives, as of the date first written above.

     

    
      	 	 	 	 
	MANCHESTER INDIANA OPERATIONS,
              INC. 	 	 	 
	 	 	 	 
	 	 	 	 
	By: /s/
              Richard D. Gaines	 	 	
            
	
              
                

              

              Name:
                Richard D. Gaines

            	 	 	
            
	
              Title:
                President

            	 	 	
            


       

      
        	 	 	 	 
	MANCHESTER INDIANA ACCEPTANCE,
                INC. 	 	 	 
	 	 	 	 
	 	 	 	 
	By: /s/
                Richard D. Gaines	 	 	
              
	
                
                  

                

                Name:
                  Richard D. Gaines

              	 	 	
              
	
                Title:
                  President

              	 	 	
              


         

        
          	 	 	 	 
	
                  MANCHESTER
                    INC. 

                	 	 	 
	 	 	 	 
	 	 	 	 
	By: /s/
                  Richard D. Gaines	 	 	
                
	
                  
                    

                  

                  Name:
                    Richard D. Gaines

                	 	 	
                
	
                  Title:
                    Corporate Secretary

                	 	 	
                


           

          
            	 	 	 	 
	
                    F.S.
                      ENGLISH, INC. 

                  	 	 	 
	 	 	 	 
	 	 	 	 
	By:	 	 	
                  
	
                    
                      

                    

                    Name:


                  	 	 	
                  
	
                    Title:
                      

                  	 	 	
                  


             

            
              	 	 	 	 
	
                      GNAC,
                        INC. 

                    	 	 	 
	 	 	 	 
	 	 	 	 
	By:	 	 	
                    
	
                      
                        

                      

                      Name:


                    	 	 	
                    
	
                      Title:
                        

                    	 	 	
                    


               

              
                	 	 	 	 
	
                        SELLERS’
                          REPRESENTATIVE 

                      	 	 	 
	 	 	 	 
	 	 	 	 
	
                        /s/
                          Rick Stanley

                      	 	 	
                      
	
                        
                          
Rick
                          Stanley

                      	 	 	
                      




              
                
                  
                  

                

                
                  61

                  
                    

                  

                

                
                  
                  

                

              

            

          

        

      

    

     

    SELLERS:

     

    
      	 	 	 	 
	/s/ Rick L. Stanley	 	 	
            
	
              
Rick
              L. Stanley	 	 	
            


       

      
        	 	 	 	 
	/s/ Blake A. Jackson	 	 	
              
	
                
Blake
                A. Jackson	 	 	
              


         

        
          	 	 	 	 
	/s/ Wesley E. Jackson	 	 	
                
	
                  
Wesley
                  E. Jackson	 	 	
                


           

          
            	 	 	 	 
	/s/ Kyle E. Jackson	 	 	
                  
	
                    
Kyle
                    E. Jackson	 	 	
                  


             

            
              	 	 	 	 
	/s/ Ken Beabout	 	 	
                    
	
                      
Ken
                      Beabout	 	 	
                    


               

              
                	 	 	 	 
	/s/ Anthony W. Hamlin	 	 	
                      
	
                        
Anthony
                        W. Hamlin	 	 	
                      


                 

                
                  	 	 	 	 
	/s/ William Hatch	 	 	
                        
	
                          
William
                          Hatch	 	 	
                        


                   

                  
                    	 	 	 	 
	/s/ Ivan Poor	 	 	
                          
	
                            
Ivan
                            Poor	 	 	
                          


                     

                    
                      	 	 	 	 
	/s/ Todd A. Simerman	 	 	
                            
	
                              
Todd
                              A. Simerman	 	 	
                            


                       

                      
                        	 	 	 	 
	EJJ6900 LLC	 	 	
                              
	 	 	 	 
	
                                By: 

                              	 	 	 
	
                                
                                  

                                

                                Name:
                                  

                                Title:

                              	 	 	
                              




                      
                        
                          
                          

                        

                        
                          62

                          
                            

                          

                        

                        
                          
                          

                        

                      

                    

                  

                

              

            

          

        

      

    

       

    Schedules

    

      
        	
                2.2(b)

              	
                Sellers
                  Note

              
	 	 
	
                2.4(b)

              	
                Subordinated
                  Note

              
	 	 
	
                3.4

              	
                Noncontravention

              
	 	 
	
                4.1

              	
                Organization
                  and Good Standing

              
	 	 
	
                4.2.1

              	
                Capital
                  Stock of the Acquired Companies

              
	 	 
	
                4.2.2

              	
                Subsidiaries

              
	 	 
	
                4.3

              	
                Other
                  Ventures

              
	 	 
	
                4.4(a)
                  & (b)

              	
                Noncontravention

              
	 	 
	
                4.5

              	
                Financial
                  Statements

              
	 	 
	
                4.6

              	
                Absence
                  of Changes

              
	 	 
	
                4.7(a)

              	
                Taxes

              
	 	 
	
                4.8

              	
                Employees

              
	 	 
	
                4.9(a)
                  & (b)

              	
                Employee
                  Benefit Plans and Other Compensation Agreements

              
	 	 
	
                4.10(a)

              	
                Environmental
                  Matters

              
	 	 
	
                4.10(b)

              	
                Environmental
                  Reports

              
	 	 
	
                4.11(a),
                  (b) & (c)

              	
                Permits;
                  Compliance with Laws

              
	 	 
	
                4.12.1(b)

              	
                Leased
                  Real Property

              
	 	 
	
                4.12.2(a)
                  & (b)

              	
                Personal
                  Property

              
	 	 
	
                4.13

              	
                Accounts
                  Receivable

              
	 	 
	
                4.15(a)(b)(c)
                  & (e)

              	
                Intellectual
                  Properties

              
	 	 
	
                4.16(a)
                  & (b)

              	
                Contracts

              


      

       

       

      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

       

       

      
        	
                4.17

              	
                Litigation

              
	 	 
	
                4.18

              	
                Product
                  Warranty

              
	 	 
	
                4.20(a)(b)
                  & (c)

              	
                Customers
                  and Suppliers

              
	 	 
	
                4.21(a),
                  (b) & (c)

              	
                Insurance

              
	 	 
	
                4.22

              	
                Indebtedness

              
	 	 
	
                4.24

              	
                Undisclosed
                  Liabilities

              
	 	 
	
                4.25

              	
                Related
                  Party Transactions

              
	 	 
	
                4.26

              	
                Sufficiency
                  of Assets

              
	 	 
	
                5.7

              	
                Capital
                  Stock of Parent and Purchasers

              
	 	 
	
                5.8

              	
                Compliance
                  with Laws and Obligations by Parent and Purchasers

              
	 	 
	
                6.2(g)

              	
                Lease
                  Agreements

              
	 	 
	
                6.2(j)

              	
                Guaranty

              
	 	 
	
                6.2(k)

              	
                Security
                  Agreement

              
	 	 
	
                8.6(c)

              	
                Non-Material
                  Seller Exceptions

              


      

    

     

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    

      
        	
                Exhibits

              
	 	 
	
                A

              	
                Delaware
                  Merger Agreement - F.S. English, Inc. and Manchester Indiana Operations,
                  Inc.

              
	 	 
	
                B

              	
                Delaware
                  Merger Agreement - GNAC, Inc. and Manchester Indiana Acceptance,
                  Inc.

              
	 	 
	
                C

              	
                Indiana
                  Articles of Merger - F.S.
                  English, Inc. and Manchester Indiana Operations, Inc.

              
	 	 
	
                D

              	
                Indiana
                  Articles of Merger - F.S.
                  English, Inc. and Manchester Indiana Acceptance,
                  Inc.

              


      



    
      
        
        

      

      
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