MANCHESTER INC.
PROMISSORY NOTE
U.S. $50,000.00 MARCH 21, 2006
1. FOR VALUE RECEIVED, Manchester Inc., a Nevada corporation (the "Borrower"),
hereby promises to pay to the order of Brazos Equities LLC ("Lender"), at
such time, place and in such manner as Lender may specify in writing, the
principal amount of FIFTY THOUSAND US DOLLARS (U.S.$50,000.00) (the
"Principal"). The Borrower shall pay interest on the outstanding principal
of this Note at the annual rate of 6% per annum, calculated based on a year
of 365 days and actual days elapsed (the "Interest").
2. The Borrower hereby promises to pay to the order of the Lender the
Principal and all Interest due thereon within thirty (30) days upon
delivery to the Company of written demand by the Lender (the "Due Date"),
at such place and in such manner as Lender may specify in writing.
3. Any and all fees, costs, expenses and disbursements charged by financial
institutions with respect to wire transfer or other transmittal charges
incurred in connection with delivery of the Principal from the Lender to
the Borrower shall be deemed to have been received by the Borrower from the
Lender and all such amounts shall be included in the calculation of
Principal hereunder.
4. This Note shall not be transferable by Borrower and the Borrower may not
assign, transfer or sell all or a portion of its rights and interests to
and under this Note to any persons and any such purported transfer shall be
void ab initio. The Lender may transfer and assign this Note at its sole
discretion.
5. The failure at any time of the Lender to exercise any of its options or any
other rights hereunder shall not constitute a waiver thereof, nor shall it
be a bar to the exercise of any of its options or rights at a later date.
All rights and remedies of the Lender shall be cumulative and may be
pursued singly, successively or together, at the option of the Lender. The
acceptance by the Lender of any partial payment shall not constitute a
waiver of any default or of any of the Lender's rights under this Note. No
waiver of any of its rights hereunder, and no modification or amendment of
this Note, shall be deemed to be made by the Lender unless the same shall
be in writing, duly signed on behalf of the Lender; and each such waiver
shall apply only with respect to the specific instance involved, and shall
in no way impair the rights of the Lender in any other respect at any other
time.
6. Any term or condition of this Note may be waived at any time by the party
that is entitled to the benefit thereof, but no such waiver shall be
effective unless set forth in a written instrument duly executed by or on
behalf of the party waiving such term or condition.
7. The Borrower represents and warrants that this Note is the valid and
binding obligation of the Borrower, fully enforceable in accordance with
its terms. The execution and delivery by the Borrower of this Note, the
performance by the Borrower of its obligations hereunder and the
consummation of the transactions contemplated hereby and thereby does not
and will not: (a) conflict with or result in a violation or breach of any
of the terms, conditions or provisions of the Borrower's charter
instruments; (b) conflict with or result in a violation or breach of any
term or provision of any law or order applicable to the Borrower or any of
its assets and properties; or (c) (i) conflict with or result in a
violation or breach of, or (ii) result in or give to any person any rights
or create any additional or increased liability of the Borrower under or
create or impose any lien upon, the Borrower or any of its assets and
properties under, any contract or permit to which the Borrower is a party
or by which its assets and properties are bound.
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Manchester Inc. Note
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8. If any provision of this Note is held to be illegal, invalid or
unenforceable under any present or future Law, and if the rights or
obligations of any party hereto under this Note will not be materially and
adversely affected thereby, (i) such provision will be fully severable;
(ii) this Note will be construed and enforced as if such illegal, invalid
or unenforceable provision had never comprised a part hereof; (iii) the
remaining provisions of this Note will remain in full force and effect and
will not be affected by the illegal, invalid or unenforceable provision or
by its severance here from; and (iv) in lieu of such illegal, invalid or
unenforceable provision, there will be added automatically as a part of
this Note a legal, valid and enforceable provision as similar in terms to
such illegal, invalid or unenforceable provision as may be possible.
9. Any notice, authorization, request or demand required or permitted to be
given hereunder shall be in writing and shall be deemed to have been duly
given two days after it is sent by an internationally recognized delivery
service to the address of record of the Lender or the Borrower,
respectively. Any party may change its address for such communications by
giving notice thereof to the other parties in conformity with this Section.
10. This Note shall be governed by and construed under the laws of the State of
Nevada as applied to agreements entered into and to be performed entirely
within such State. Each party hereby irrevocably consents to the
jurisdiction of the courts of any competent jurisdiction over one or more
of the parties. In any such litigation the Borrower waives personal service
of any summons, complaint or other process and agrees that the service
thereof may be made by certified or registered mail directed to the
registered corporate office of Borrower in the State of its incorporation.
The company hereby waives trial by jury in any litigation in any court with
respect to, in connection with, or arising out of this note or the
validity, protection, interpretation, collection or enforcement hereof and
the company hereby waives the right to interpose any setoff or
non-compulsory counterclaim or cross-claim in connection with any such
litigation, irrespective of the nature of such setoff, counterclaim or
cross-claim.
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Manchester Inc. Note
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11. A default shall exist on this Note if any of the following occurs and is
continuing: (i) Failure to pay Principal and any accrued Interest on the
Note on or before the Due Date; (ii) Failure by the Borrower to perform or
observe any other covenant or agreement of the Borrower contained in this
Note; (iii) A custodian, receiver, liquidator or trustee of the Borrower,
or any other person acting under actual or purported force of law takes
ownership, possession or title to Borrower property; (iv) any of the
property of the Borrower is sequestered by court order; (v) a petition or
other proceeding, voluntary or otherwise is filed by or against the
Borrower under any bankruptcy, reorganization, arrangement, insolvency,
readjustment of indebtedness, dissolution or liquidation law of any
jurisdiction, whether now or hereafter in effect; or (vi) the Borrower
makes an assignment for the benefit of its creditors, or generally fails to
pay its obligations as they become due, or consents to the appointment of
or taking possession by a custodian, receiver, liquidator or trustee of the
Borrower or all or any part of its property. Upon any such default, the
Borrower shall immediately notify the Lender, and upon notice to the
Borrower, the Lender may declare the Principal of the Note, plus accrued
Interest, to be immediately due and payable, upon which such Principal and
accrued Interest shall become due and payable immediately. Interest upon
default shall thereafter accrue at the rate of 15% per annum, calculated
based on a year of 365 days and actual days elapsed from the date of such
default.
12. The Borrower, any endorser, or guarantor hereof or in the future
(individually an "Obligor" and collectively "Obligors") and each of them
jointly and severally: (a) waive presentment, demand, protest, notice of
demand, notice of intent to accelerate, notice of acceleration of maturity,
notice of protest, notice of nonpayment, notice of dishonor, and any other
notice required to be given under the law to any Obligor in connection with
the delivery, acceptance, performance, default or enforcement of this Note,
any endorsement or guaranty of this Note, any pledge, security, guaranty or
other documents executed in connection with this Note; (b) consent to all
delays, extensions, renewals or other modifications of this Note, or
waivers of any term hereof or thereof, or release or discharge by the
Lender of any of Obligors, or release, substitution or exchange of any
security for the payment hereof, or the failure to act on the part of the
Lender or any indulgence shown by the Lender (without notice to or further
assent from any of Obligors), and agree that no such action, failure to act
or failure to exercise any right or remedy by the Lender shall in any way
affect or impair the Obligations (as hereinafter defined) of any Obligors
or be construed as a waiver by the Lender of, or otherwise affect, any of
the Lender's rights under this Note, under any endorsement or guaranty of
this Note; (c) if the Borrower fails to fulfill its obligations hereunder
when due, agrees to pay, on demand, all costs and expenses of enforcement
of collection of this Note or of any endorsement or guaranty hereof and/or
the enforcement of the Lender's rights with respect to, or the
administration, supervision, preservation, protection of, or realization
upon, any property securing payment hereof, including, without limitation,
all attorney's fees, costs, expenses and disbursements, including, without
further limitation, any and all fees related to any legal proceeding, suit,
mediation arbitration, out of court payment agreement, trial, appeal,
bankruptcy proceedings or any other actions of any nature whatsoever
required on the part of Lender or Lender's representatives to enforce this
Note and the rights hereunder; and (d) waive the right to interpose any
defense, set-off or counterclaim of any nature or description.
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Manchester Inc. Note
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13. The Borrower will not, by amendment of its Certificate of Incorporation or
through any reorganization, recapitalization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any
other voluntary action, avoid or seek to avoid the observance or
performance of any of the terms to be observed or performed hereunder by
the Borrower, but will at all times in good faith assist in the carrying
out of all the provisions of this Agreement and in the taking of all such
action as may be necessary or appropriate in order to protect the rights of
the Lender of this Note against impairment. This Note shall be enforceable
against all successors and assigns of Borrower. Borrower hereby covenants
that all of its subsidiaries and affiliates shall jointly and severally
perform this Agreement to the same and full extent on behalf of Borrower if
Borrower is unable to perform.
14. This Note supersedes all prior discussions and agreements between the
parties with respect to the subject matter hereof and thereof and contains
the sole and entire agreement between the parties hereto with respect to
the subject matter hereof.
15. If the Lender loses this Note, the Borrower shall issue an identical
replacement note to the Lender upon the Lender's delivery to the Borrower
of a customary agreement to indemnify the Borrower reasonably satisfactory
to the Borrower for any losses resulting from issuance of the replacement
note.
16. The terms and conditions of this Note shall inure to the benefit of and be
binding upon the respective successors and assigns of the parties. Nothing
in this Note, express or implied, is intended to confer upon any party
other than the parties hereto or their respective successors and assigns
any rights, remedies, obligations, or liabilities under or by reason of
this Note, except as expressly provided in this Note.
IN WITNESS WHEREOF, the Borrower has caused this Note to be dated, executed and
issued on its behalf, by its duly appointed and authorized officer, as of the
21st day of March, 2006.
MANCHESTER INC.
By: /s/ Richard D. Gaines
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Name: Richard D. Gaines
Title: Corporate Secretary
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