FUNDING AGREEMENT
Funding
Agreement (the “Agreement”),
dated
as of December [__],
2006,
among The Bank of New York, a New York banking corporation with its principal
corporate trust office at 000 Xxxxxxx Xxxxxx, 0xx
Xxxxx
Xxxx, Xxx Xxxx, Xxx Xxxx 00000, as Collateral Agent under the Loan Agreement
(defined below) (the “Collateral
Agent”),
Palm
Beach Multi-Strategy Fund, L.P., a Delaware limited partnership, with its
principal office at 0000 XXX Xxxx., Xxxxx 000, Xxxx Xxxxx Xxxxxxx, Xxxxxxx
00000
(the “Lender”);
Manchester Indiana Funding LLC, Delaware limited liability company with its
principal office at 000 Xxxxxxxx Xxxxx, 0xx
Xxxxx,
Xxxxxx, Xxxxx 00000 (the “Borrower”)
and
Manchester, Inc., a Nevada corporation, with its principal office at 000
Xxxxxxxx Xxxxx, 0xx
Xxxxx,
Xxxxxx, Xxxxx 00000 (the “Guarantor”).
WHEREAS,
Lender, Collateral Agent and Borrower have entered into that certain Loan and
Security Agreement (the “Loan
Agreement”)
dated
December [__],
2006,
between Borrower and Lender, and the Collection Account (as defined in the
Loan
Agreement) has been established in the name of Lender with Collateral Agent.
WHEREAS,
pursuant to the Loan Agreement, certain conditions precedent are required to
be
satisfied prior to Borrower becoming entitled to request an advance thereunder
from Lender. In this Agreement, the term “Conditions”
shall
mean all of the conditions precedent to the obligations of Lender under the
Loan
Agreement and every other Loan Document (as defined in the Loan
Agreement).
WHEREAS,
Guarantor has entered into that certain Guaranty dated December [__],
2006
(the “Guaranty”)
made
by the Guarantor and others in favor of Lender, whereby the Guarantor has
guaranteed the obligations of Borrower to Lender under the Loan Agreement and
the other Loan Documents.
WHEREAS,
as of the date hereof, not all of the Conditions have been satisfied, and
Lender, at the request of Borrower and Guarantor, is willing to make an advance
under the Loan Agreement into the Collection Account (as defined in the Loan
Agreement) on the terms, and subject to the conditions, of this Agreement.
NOW,
THEREFORE, it is agreed as follows:
Section
1.1 Deposit
into Collection Account.
(a) On
the
date hereof (the “Funding
Date”),
conditional upon Guarantor having wired an amount equal to $[_________]
to the
Collection Account, Lender shall wire an amount equal to $[_________]
(such
amount advanced by Lender, the “Advanced
Funds”)
to the
Collection Account, to be held therein by Collateral Agent on the terms of
this
Agreement. Collateral Agent shall invest the funds in the Collection Account
in
Eligible Investments (as defined in the Loan Agreement) in accordance with
Section 2.14 of the Loan Agreement, provided that any interest or other earnings
on funds earned in the Collection Account shall be retained in the Collection
Account until distributed in accordance with this Agreement.
(b) Except
as
otherwise provided in this Agreement, and subject to Section 2, below, the
Advanced Funds shall be treated as a Loan made by Lender to Borrower under
the
Loan Agreement on the Funding Date, and shall bear interest from the Funding
Date at the rate specified in the Loan Agreement.
Section
2.1 Disbursements.
(a) Upon
receipt of a written instruction executed by Lender (a “Disbursement
Notice”),
Collateral Agent shall disburse funds on deposit in the Collection Account
to
such person or persons, and in such amounts, as may be specified in the
Disbursement Notice. Collateral Agent shall not accept instructions from
Borrower, Manchester, or any other person with respect to disbursement of funds
from, or any other matter regarding, the Collection Account.
(b) Lender
agrees with Borrower that, if all of the Conditions are satisfied to the
satisfaction of Lender in its sole discretion by noon, Dallas, Texas time on
[__________],
2006,
Lender will deliver a Disbursement Notice to Collateral Agent instructing
Collateral Agent to disburse all funds on deposit in the Collection Account
in
the following order of priority: first,
to
Lender, an amount equal to (i) all interest due on the Loan pursuant to the
Loan
Agreement for the period from the Funding Date until the date of such
disbursement and (ii) an amount equal to all fees, expenses and any other
amounts payable to Lender or Collateral Agent under the Loan Agreement and
any
other Loan Documents (the “Borrower
Expenses”)
as of
such date; and second,
to
Borrower (or to such other person specified in the Disbursement Notice), the
balance of funds on deposit in the Collection Account.
(c) If
all of
the Conditions are not satisfied to the satisfaction of Lender in its sole
discretion by noon, Dallas, Texas time on [_____________],
2006,
Lender and Borrower agree that, notwithstanding any other provision of the
Loan
Agreement, Lender may declare an Event of Default (as defined in the Loan
Agreement) to have occurred and the Loan, all interest accrued thereon and
all
Borrower Expenses to be immediately repayable, and in such circumstances Lender
may deliver a Disbursement Notice to Collateral Agent instructing Collateral
Agent to disburse all funds on deposit in the Collection Account to Lender,
which Lender will apply in accordance with Section 2.9 of the Loan Agreement,
except that the Borrower Expenses shall first be paid. In the event that such
funds are insufficient to pay or repay (as the case may be) the Loan, all
interest accrued thereon and all Borrower Expenses (the amount of such
insufficiency, a “Shortfall”),
Borrower shall be liable to pay the amount of such Shortfall to Lender, which
shall be due and payable immediately.
(d) The
parties hereto agree that, until all funds have been disbursed from the
Collection Account pursuant to a Disbursement Notice, no payments shall be
made
from the Collection Account pursuant to Section 2.11 of the Loan Agreement,
or
otherwise.
(e) The
Guarantor hereby irrevocably, absolutely and unconditionally guarantees the
payment by Borrower of any Shortfall on the terms of the Guaranty (and, for
the
avoidance of doubt, such Shortfall shall be a “Guaranteed Obligation” for the
purposes of the Guaranty), provided that the limitation on the Guarantor’s
liability in Section 2(f) of the Guaranty shall not apply to the Guarantor’s
obligations with respect to the Shortfall.
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Section
3.1 Notices.
Any
notice or other communication to any party in connection with this Agreement
shall be in writing and shall be sent by manual delivery, telegram, facsimile
transmission, overnight courier or United States mail (postage prepaid)
addressed to such party at the address specified on Schedule A to the Loan
Agreement, or at such other address as such party shall have specified to the
other party hereto in writing.
Section
3.2 Assignment.
No
Related Party shall assign its rights or duties hereunder without the consent
of
Lender.
Section
3.3 Execution
in Counterparts.
This
Agreement may be executed in any number of counterparts and by the parties
hereto in separate counterparts, each of which when so executed and delivered
shall be deemed to be an original, and all of which taken together shall
constitute but one and the same instrument.
Section
3.4 GOVERNING
LAW.
THIS
AGREEMENT SHALL BE DEEMED A CONTRACT AND INSTRUMENT MADE UNDER THE LAWS OF
THE
STATE OF NEW YORK AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK AND THE LAWS OF THE UNITED STATES
OF AMERICA. EACH PARTY HERETO HEREBY AGREES THAT ANY LEGAL ACTION OR PROCEEDING
AGAINST IT WITH RESPECT TO THIS AGREEMENT MAY BE BROUGHT IN THE COURTS OF THE
STATE OF NEW YORK OR OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT
OF NEW YORK AS LENDER MAY ELECT, AND, BY EXECUTION AND DELIVERY HEREOF, EACH
PARTY HERETO ACCEPTS AND CONSENTS FOR ITSELF AND IN RESPECT TO ITS PROPERTY,
GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID
COURTS. EACH PARTY HERETO AGREES THAT SECTIONS 5-1401 AND 5.1402 OF THE GENERAL
OBLIGATIONS LAW OF THE STATE OF NEW YORK SHALL APPLY TO THIS AGREEMENT AND
WAIVES ANY RIGHT TO STAY OR TO DISMISS ANY ACTION OR PROCEEDING BROUGHT BEFORE
SAID COURTS ON THE BASIS OF FORUM NON CONVENIENS.
Section
3.5 Waiver
of Jury Trial.
EACH
PARTY HERETO WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING
TO
ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT AND AGREE THAT ANY SUCH ACTION
OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.
IN
WITNESS WHEREOF, the parties have executed this Agreement on the day and year
first set forth above.
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PALM
BEACH MULTI-STRATEGY FUND, L.P.
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| BY: | PALM BEACH LINKS CAPITAL, L.P., | |
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its
general partner
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BY: PBL
HOLDINGS, LLC,
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its
general partner
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By:
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Managing
Director
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By:
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MANCHESTER
INDIANA FUNDING LLC
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Name: |
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Name: |
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