Exhibit 10.1

PURCHASE AGREEMENT

THIS AGREEMENT is made as of the 29th day of December, 2006, by and between
NetBank, Inc. (the “Company”), a corporation organized under the laws of the
State of Georgia, with its principal offices at 1015 Windward Ridge Parkway,
Alpharetta, Georgia 30005 and the purchaser whose name and address is set forth
on the signature page hereof (the “Purchaser”).

IN CONSIDERATION of the mutual covenants contained in this Agreement, the
Company and the Purchaser agree as follows:

SECTION 1.           Authorization of Sale of the Shares.  Subject to the terms
and conditions of this Agreement, the Company has authorized the issuance and
sale of up to 6,800,000 shares (the “Shares”) of common stock, par value $0.01
per share (the “Common Stock”), of the Company.

SECTION 2.           Agreement to Sell and Purchase the Shares.  At the Closing
(as defined in Section 3), the Company will, subject to the terms of this
Agreement, issue and sell to the Purchaser and the Purchaser will buy from the
Company, upon the terms and conditions hereinafter set forth, the number of
Shares (at the purchase price) shown below:

Number of Shares to Be 
Purchased

 

Price Per
Share In
 Dollars

 

Aggregate 
Price

 

 

 

$

3.90

 

$

 

 

 

The Company proposes to enter into this same form of purchase agreement with
certain other investors (the “Other Purchasers”) and expects to complete sales
of the shares of Common Stock to them.  The Purchaser and the Other Purchasers
are hereinafter sometimes collectively referred to as the “Purchasers,” and this
Agreement and the purchase agreements executed by the Other Purchasers are
hereinafter sometimes collectively referred to as the “Agreements.”  The term
“Placement Agent” shall mean JMP Securities LLC.

SECTION 3.           Delivery of the Shares at the Closing.  The completion of
the purchase and sale of the Shares (the “Closing”) shall occur at the offices
of Morrison & Foerster LLP, 1290 Avenue of the Americas, New York, New York 
10104 as soon as practicable and as agreed to by the parties hereto, within
three business days following the execution of the Agreements, or on such later
date or at such different location as the parties shall agree in writing, but
not prior to the date that the conditions for Closing set forth below have been
satisfied or waived by the appropriate party (the “Closing Date”).

 

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At the Closing, the Purchaser shall deliver, in immediately available funds, the
full amount of the purchase price for the Shares being purchased hereunder by
wire transfer to an account designated by the Company and the Company shall
deliver to the Purchaser one or more stock certificates registered in the name
of the Purchaser, or in such nominee name(s) as designated by the Purchaser in
writing, representing the number of Shares set forth in Section 2 above and
bearing an appropriate legend referring to the fact that the Shares were sold in
reliance upon the exemption from registration under the Securities Act of 1933,
as amended (the “Securities Act”), provided by Section 4(2) thereof and Rule 506
thereunder.  At such time as Shares are sold pursuant to the Registration
Statement (as defined below) after it has become effective, the Company will
promptly substitute one or more replacement certificates without a legend with
respect to such Shares.  The name(s) in which the stock certificates are to be
registered are set forth in the Stock Certificate Questionnaire attached hereto
as part of Appendix I.

The Company’s obligation to complete the purchase and sale of the Shares and
deliver such stock certificate(s) to the Purchaser at the Closing shall be
subject to the following conditions, any one or more of which may be waived by
the Company:  (a) receipt by the Company of immediately available funds in the
full amount of the purchase price for the Shares being purchased hereunder;
(b) completion of the purchases and sales under the Agreements with the Other
Purchasers; and (c) the accuracy of the representations and warranties made by
the Purchasers and the fulfillment of those undertakings of the Purchasers to be
fulfilled prior to the Closing.  The Purchaser’s obligation to accept delivery
of such stock certificate(s) and to pay for the Shares evidenced thereby shall
be subject to the following conditions:  (a) each of the representations and
warranties of the Company made herein shall be true and correct in all material
respects as of the Closing Date; (b) the delivery to the Purchaser by counsel to
the Company and in-house counsel to the Company of legal opinions in forms
reasonably satisfactory to counsel to the Placement Agent; (c) receipt by the
Purchaser of a certificate executed by the chief executive officer and the chief
financial or accounting officer of the Company, dated as of the Closing Date, to
the effect that the representations and warranties of the Company set forth
herein are true and correct in all material respects as of the Closing Date and
that the Company has complied in all material respects with all the agreements
and satisfied in all material respects all the conditions herein on its part to
be performed or satisfied on or prior to such Closing Date; (d) the fulfillment
in all material respects of those undertakings of the Company to be fulfilled
prior to the Closing; and (e) the Company shall have sold Shares at the Closing
for an aggregate minimum of $20 million in gross proceeds.  The Purchaser’s
obligations hereunder are expressly not conditioned on the purchase by any or
all of the Other Purchasers of the Shares that they have agreed to purchase from
the Company.

SECTION 4.           Representations, Warranties and Covenants of the Company. 
The Company hereby represents and warrants to, and covenants with, the Purchaser
as follows:

4.1                Organization and Qualification.  The Company is a corporation
duly incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation and the Company is qualified to do business as a
foreign corporation in each jurisdiction in which qualification is required,
except where failure to so qualify would not  have a Material Adverse Effect (as
defined herein).  The Company’s subsidiaries (each a “Subsidiary”

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and collectively the “Subsidiaries”) are listed on Exhibit A to this Agreement. 
Each “Significant Subsidiary” of the Company, as that term is defined in Rule
1-02 of Regulation S-X under the Securities Exchange Act of 1934, as amended
(the “Exchange Act”), is listed on Exhibit A to this Agreement.  Each
Significant Subsidiary is a direct or indirect wholly owned subsidiary of the
Company.  Each Significant Subsidiary is duly organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation and is
qualified to do business as a foreign corporation in each jurisdiction in which
qualification is required, except where failure to so qualify would not have a
Material Adverse Effect.

4.2                Reporting Company; Form S-1.  The Company is not an
“ineligible issuer” (as defined in Rule 405 promulgated under the Securities
Act) and is eligible to register the Shares for resale by the Purchaser on a
registration statement on Form S-1 under the Securities Act.  The Company is
subject to the reporting requirements of the Exchange Act, and has filed all
reports required thereby.

4.3                Authorized Capital Stock.  The authorized, issued and
outstanding capital stock of the Company as of September 30, 2006 is set forth
under the heading “Capitalization” in the confidential Private Placement
Memorandum dated December 19, 2006 prepared by the Company (including all
exhibits, supplements and amendments thereto, the “Private Placement
Memorandum”); the issued and outstanding shares of Common Stock have been duly
authorized and validly issued, are fully paid and nonassessable, have been
issued in compliance with all federal and state securities laws, and were not
issued in violation of or subject to any preemptive rights or other rights to
subscribe for or purchase securities.  Except as disclosed in documents or
reports (the “Exchange Act Reports”) filed by the Company with the Securities
and Exchange Commission (the “Commission”) pursuant to the Exchange Act and the
rules and regulations of the Commission promulgated thereunder (the “1934 Act
Rules and Regulations”), the Company does not have outstanding any options to
purchase, or any preemptive rights or other rights to subscribe for or to
purchase, any securities or obligations convertible into, or any contracts or
commitments to issue or sell, shares of its capital stock or any such options,
rights, convertible securities or obligations.  With respect to each of the
Significant Subsidiaries (i) all the issued and outstanding shares of such
Subsidiary’s capital stock have been duly authorized and validly issued, are
fully paid and nonassessable, have been issued in compliance with all federal
and state securities laws, were not issued in violation of or subject to any
preemptive rights or other rights to subscribe for or purchase securities, and
(ii) there are no outstanding options to purchase, or any preemptive rights or
other rights to subscribe for or to purchase, any securities or obligations
convertible into, or any contracts or commitments to issue or sell, shares of
such Subsidiary’s capital stock or any such options, rights, convertible
securities or obligations.

4.4                Issuance, Sale and Delivery of the Shares.  The Shares have
been duly authorized and, when issued, delivered and paid for in the manner set
forth in this Agreement, will be validly issued, fully paid and nonassessable. 
No preemptive rights or other rights to subscribe for or purchase any shares of
Common Stock of the Company exist with respect to the issuance and sale of the
Shares by the Company pursuant to this Agreement.  No stockholder of the Company
has any right (which has not been waived or has not expired by reason of lapse
of time following notification of the Company’s intention to file the
Registration Statement (as hereinafter defined)) to require the Company to
register the sale of any capital

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stock owned by such stockholder under the Registration Statement.  The issuance
and sale of the Shares will not obligate the Company to issue shares of Common
Stock or other securities to any person (other than the Purchasers) and will not
result in a right of any holder of the Company’s securities to obligate the
Company to repurchase the securities held by such holder or to adjust the
exercise, conversion, exchange or reset price under such securities.  No further
approval or authority of the stockholders or the Board of Directors of the
Company will be required for the issuance and sale of the Shares to be sold by
the Company as contemplated herein.

4.5                Due Execution, Delivery and Performance of the Agreements. 
The Company has full legal right, corporate power and authority to enter into
this Agreement and perform the transactions contemplated hereby.  This Agreement
has been duly authorized, executed and delivered by the Company.  This Agreement
constitutes a legal, valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms, except as enforceability may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other laws of general application relating to or affecting the enforcement of
creditors’ rights and the application of equitable principles relating to the
availability of remedies, and except as rights to indemnity or contribution,
including but not limited to, indemnification provisions set forth in
Section 7.3 of this Agreement may be limited by federal or state securities law
or the public policy underlying such laws.  The execution and performance of
this Agreement by the Company and the consummation of the transactions herein
contemplated will not violate (i) any provision of the certificate of
incorporation or bylaws of the Company or the organizational documents of any
Subsidiary, or (ii) any statute or any authorization, judgment, decree, order,
rule or regulation of any court or any regulatory body, administrative agency or
other governmental agency or body applicable to the Company or any Significant
Subsidiary or any of their respective properties.  No consent, approval,
authorization or other order of any court, regulatory body, administrative
agency or other governmental agency or body is required for the execution and
delivery of this Agreement or the consummation of the transactions contemplated
by this Agreement, except for compliance with the Blue Sky laws and federal
securities laws applicable to the offering of the Shares.  For the purposes of
this Agreement the term “Material Adverse Effect” shall mean a material adverse
effect on the condition (financial or otherwise), properties, business,
prospects or results of operations of the Company and its Subsidiaries, taken as
a whole.

4.6                Accountants.  Ernst & Young LLP, who has expressed its
opinion with respect to the consolidated financial statements contained in the
Company’s Annual Report on Form 10-K for the year ended December 31, 2005, which
Form 10-K is attached as an exhibit to, and made a part of the Private Placement
Memorandum, were, as of the date such Form 10-K was filed with the Commission,
registered independent public accountants as required by the Securities Act and
the rules and regulations promulgated thereunder (the “1933 Act Rules and
Regulations”) and by the rules of the Public Accounting Oversight Board.

4.7                No Defaults or Consents. Neither the execution, delivery and
performance of this Agreement by the Company nor the consummation of any of the
transactions contemplated hereby (including, without limitation, the issuance
and sale by the Company of the Shares) will give rise to a right to terminate or
accelerate the due date of any payment due under, or conflict with or result in
the breach of any term or provision of, or constitute a default (or an event
which with notice or lapse of time or both would constitute a default) under,
except such

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defaults that individually or in the aggregate would not cause a Material
Adverse Effect, or require any consent or waiver under, or result in the
execution or imposition of any lien, charge or encumbrance upon any properties
or assets of the Company or its Significant Subsidiaries pursuant to the terms
of, any indenture, mortgage, deed of trust or other agreement or instrument to
which the Company or any of its Significant Subsidiaries is a party or by which
either the Company or its Significant Subsidiaries or any of their properties or
businesses is bound, or any franchise, license, permit, judgment, decree, order,
statute, rule or regulation applicable to the Company or any Significant
Subsidiary or violate any provision of the charter or by-laws of the Company or
any Significant Subsidiary, except for such consents or waivers which have
already been obtained and are in full force and effect.

4.8                Contracts.  The material contracts to which the Company is a
party have been duly and validly authorized, executed and delivered by the
Company and constitute the legal, valid and binding agreements of the Company,
enforceable by and against it in accordance with their respective terms, except
as such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws relating to enforcement of creditors’
rights generally, and general equitable principles relating to the availability
of remedies, and except as rights to indemnity or contribution may be limited by
federal or state securities laws and the public policy underlying such laws.

4.9                No Actions.  Except as otherwise set forth in the Exchange
Act Reports, there are no legal or governmental actions, suits or proceedings
pending or, to the Company’s knowledge, threatened against the Company or any
Subsidiary before or by any court, regulatory body or administrative agency or
any other governmental agency or body, domestic, or foreign, which actions,
suits or proceedings, individually or in the aggregate, might reasonably be
expected to have a Material Adverse Effect; and no labor disturbance by the
employees of the Company exists or, to the Company’s knowledge, is imminent,
that might reasonably be expected to have a Material Adverse Effect.  Neither
the Company nor any Subsidiary is a party to or subject to the provisions of any
injunction, judgment, decree or order of any court, regulatory body,
administrative agency or other governmental agency or body that might have a
Material Adverse Effect.

4.10              Properties.  The Company and each Significant Subsidiary has
good and marketable title to all the properties and assets described as owned by
it in the consolidated financial statements included in the Exchange Act
Reports, free and clear of all liens, mortgages, pledges, or encumbrances of any
kind except (i) those, if any, reflected in such consolidated financial
statements, or (ii) those that are not material in amount and do not adversely
affect the use made and proposed to be made of such property by the Company or
its Significant Subsidiaries, considered as one entity.  The Company and each
Subsidiary holds its leased properties under valid and binding leases, with such
exceptions as are not materially significant in relation to the business of the
Company and its Significant Subsidiaries, considered as one entity.  The Company
and any Significant Subsidiary owns or leases all such properties as are
necessary to its operations as now conducted.

4.11              No Material Adverse Change.  Subsequent to the dates as of
which information is given in the Private Placement Memorandum, and except as
set forth in the Exchange Act Reports, (i) the Company and its Significant
Subsidiaries have not incurred any

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material liabilities or obligations, indirect, or contingent, or entered into
any material agreement or other transaction that is not in the ordinary course
of business or that could reasonably be expected to result in a material
reduction in the future earnings of the Company; (ii) the Company and its
Significant Subsidiaries have not sustained any material loss or interference
with their businesses or properties from fire, flood, windstorm, accident or
other calamity not covered by insurance; (iii) the Company and its Significant
Subsidiaries have not paid or declared any dividends or other distributions with
respect to their capital stock and none of the Company or any Significant
Subsidiary is in default in the payment of principal or interest on any
outstanding debt obligations; (iv) there has not been any change in the capital
stock of the Company or its Significant Subsidiaries other than the sale of the
Shares hereunder and shares or options issued pursuant to employee equity
incentive plans or purchase plans approved by the Company’s Board of Directors,
or indebtedness material to the Company or its Significant Subsidiaries (other
than in the ordinary course of business and any required scheduled payments);
and (v) there has not occurred any event that has caused or could reasonably be
expected to cause a Material Adverse Effect.

4.12              Intellectual Property.  The Company and its Significant
Subsidiaries own, are licensed or otherwise possess sufficient rights to use,
all patents, patent rights, inventions, know-how (including trade secrets and
other unpatented or unpatentable or confidential information, systems, or
procedures), trademarks, service marks, trade names, copyrights and other
intellectual property rights (collectively, the “Intellectual Property”)
necessary for the conduct of their business as described in the Private
Placement Memorandum.  To the Company’s knowledge, no claims have been asserted
against the Company or any Significant Subsidiary by any person with respect to
the use of any such Intellectual Property or challenging or questioning the
validity or effectiveness of any such Intellectual Property.

4.13              Compliance.  None of the Company nor its Subsidiaries has been
advised, nor do any of them have any reason to believe, that it is not
conducting business in compliance with all applicable laws, rules and
regulations of the jurisdictions in which it is conducting business, including,
without limitation, all applicable local, state and federal environmental laws
and regulations, except where failure to be so in compliance would not have a
Material Adverse Effect.

4.14              Taxes.  The Company and its Significant Subsidiaries have
filed on a timely basis (giving effect to extensions) all required material
federal, state and foreign income and franchise tax returns and have paid or
accrued all taxes shown as due thereon, and the Company has no knowledge of any
material tax deficiency that has been or might be asserted or threatened against
it that could have a Material Adverse Effect.  All tax liabilities accrued
through the date hereof have been adequately provided for on the books of the
Company.

4.15              Transfer Taxes.  On the Closing Date, all stock transfer or
other taxes (other than income taxes) that are required to be paid in connection
with the sale and transfer of the Shares to be sold to the Purchaser hereunder
will have been, fully paid or provided for by the Company and all laws imposing
such taxes will have been fully complied with.

4.16              Investment Company.  The Company is not an “investment
company” or an “affiliated person” of, or “promoter” or “principal underwriter”
for an

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investment company, within the meaning of the Investment Company Act of 1940, as
amended, and the rules and regulations of the Commission promulgated thereunder.

4.17              Offering Materials.  Each of the Company, its directors and
officers has not distributed and will not distribute prior to the Closing Date
any offering material, including any “free writing prospectus” (as defined in
Rule 405 promulgated under the Securities Act), in connection with the offering
and sale of the Shares other than the Private Placement Memorandum and
associated slide presentation, or any amendment or supplement with respect to
such offering material.  The Company has not in the past nor will it hereafter
take any action independent of the Placement Agent to sell, offer for sale or
solicit offers to buy any securities of the Company that could result in the
initial sale of the Shares not being exempt from the registration requirements
of Section 5 of the Securities Act.

4.18              Insurance.  The Company maintains insurance underwritten by
insurers of recognized financial responsibility, or self-insurers, of the types
and in the amounts that the Company reasonably believes is adequate for its
business, including, but not limited to, insurance covering all real and
personal property owned or leased by the Company against theft, damage,
destruction, acts of vandalism and all other risks customarily insured against,
with such deductibles as are customary for companies in the same or similar
business, all of which insurance is in full force and effect.

4.19              Additional Information.  The information contained in the
following documents, which the Placement Agent has furnished to the Purchaser,
or will furnish prior to the Closing, as of the dates thereof, did not contain
an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein in light of the
circumstances in which they were made not misleading:

(a)                                  the Company’s Annual Report on Form 10-K
for the fiscal year ended December 31, 2005;

(b)                                 the Company’s Definitive Proxy Statement for
Annual Meeting of stockholders held on May 2, 2006;

(c)                                  the Company’s Quarterly Reports on
Form 10-Q for the fiscal quarters ended March 31, 2006, June 30, 2006 and
September 30, 2006;

(d)                                 the Company’s Current Reports on Form 8-K or
Form 8-K/A filed with the Commission on March 28, 2006, October 5, 2006, October
16, 2006 (two Form 8-Ks filed), October 26, 2006, November 8, 2006, November 9,
2006, November 20, 2006 and December 18, 2006;

(e)           the Private Placement Memorandum, including all addenda and
exhibits thereto, other than this Agreement and appendices and exhibits hereto;
and

(f)            all other documents, if any, filed by the Company with the
Commission since December 31, 2005 pursuant to the reporting requirements of the
Exchange Act.

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The documents incorporated by reference in the Private Placement Memorandum or
attached as exhibits thereto, at the time they became effective or were filed
with the Commission, as the case may be, complied in all material respects with
the requirements of the Exchange Act, as applicable, and the 1934 Act Rules and
Regulations (together with the 1933 Act Rule and Regulations, the “Rules and
Regulations”).  Since December 1, 2005, the Company has filed all documents
required to be filed by it prior to the date hereof with the Commission pursuant
to the reporting requirements of the Exchange Act.

4.20              Price of Common Stock.  The Company has not taken, and will
not take, directly or indirectly, any action designed to cause or result in, or
that has constituted or that might reasonably be expected to constitute, the
stabilization or manipulation of the price of the shares of the Common Stock to
facilitate the sale or resale of the Shares.

4.21              Use of Proceeds.  The Company shall use the proceeds from the
sale of the Shares as described under “Use of Proceeds” in the Private Placement
Memorandum.

4.22              Non-Public Information.  The Company has not disclosed to the
Purchaser, whether in the Private Placement Memorandum or otherwise, information
that would constitute material non-public information as of the Closing Date
other than the existence of the transaction contemplated hereby.

4.23              Use of Purchaser Name.  Except as otherwise required by
applicable law or regulation the Company shall not use the Purchaser’s name or
the name of any of its affiliates in any advertisement, announcement, press
release or other similar public communication unless it has received the prior
written consent of the Purchaser for the specific use contemplated which consent
shall not be unreasonably withheld.

4.24              Related Party Transactions.  No transaction has occurred
between or among the Company, on the one hand, and its affiliates, officers or
directors on the other hand, that is required to have been described under
applicable securities laws in its Exchange Act filings and is not so described,
as required, in such filings.

4.25              Off-Balance Sheet Arrangements.  There is no transaction,
arrangement or other relationship between the Company and an unconsolidated or
other off-balance sheet entity that is required to be disclosed by the Company
in its Exchange Act filings and is not so disclosed, as required or that
otherwise would be reasonably likely to have a Material Adverse Effect.  There
are no other material off-balance sheet transactions, arrangements or other
relationships involving the Company that may create contingencies or liabilities
that are not otherwise disclosed by the Company in its Exchange Act filings.

4.26              Governmental Permits, Etc.  The Company and each Subsidiary
has all franchises, licenses, certificates and other authorizations from such
federal, state or local government or governmental agency, department or body
that are currently necessary for the operation of the business of the Company as
currently conducted, except where the failure to posses currently such
franchises, licenses, certificates and other authorizations is not reasonably
expected to have a Material Adverse Effect.  Except as otherwise set forth in
the Exchange Act Reports, neither the Company nor any Subsidiary has received
any notice of proceedings relating

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to the revocation or modification of any such franchises, licenses, certificates
and other authorizations that, if the subject of an unfavorable decision, ruling
or finding, could reasonably be expected to have a Material Adverse Effect.

4.27              Financial Statements.  The consolidated financial statements
of the Company and the related notes and schedules thereto included in its
Exchange Act filings fairly present the financial position, results of
operations, stockholders’ equity and cash flows of the Company and its
consolidated Subsidiaries at the dates and for the periods specified therein. 
Such financial statements and the related notes and schedules thereto have been
prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved (except as otherwise noted
therein) and all adjustments necessary for a fair presentation of results for
such periods have been made, and comply as to form in all material respects with
applicable accounting requirements and the rules and regulations of the
Commission with respect thereto as in effect at the time of filing; provided,
however, that the unaudited financial statements are subject to normal year-end
audit adjustments (which are not expected to be material) and do not contain all
footnotes required under generally accepted accounting principles.

4.28              Listing Compliance.  The Company is in compliance with the
requirements of the Nasdaq Global Market for continued quotation of the Common
Stock thereon.  Except as otherwise set forth in the Exchange Act Reports and
the Private Placement Memorandum, the Company has taken no action designed to,
or likely to have the effect of, terminating the registration of the Common
Stock under the Exchange Act or the quotation of the Common Stock on the Nasdaq
Global Market, nor has the Company received any notification that the Commission
or the Nasdaq Global Market is contemplating terminating such registration or
quotation.  The transactions contemplated by this Agreement will not contravene
the rules and regulations of the Nasdaq Global Market.  Subject to the Company’s
ability to timely file with the Commission the Company’s upcoming Annual Report
on Form 10-K for the year ended December 31, 2006 and Quarterly Report on Form
10-Q for the quarter ended March 31, 2007, the Company will comply with all
requirements of the Nasdaq Global Market with respect to the issuance of the
Shares and shall cause the Shares to be quoted on the Nasdaq Global Market and
listed on any other exchange on which the Company’s common stock is listed on or
before the Closing Date.

4.29              Internal Accounting Controls.  The Company maintains a system
of internal accounting controls sufficient to provide reasonable assurances that
(i) transactions are executed in accordance with management’s general or
specific authorization; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets; (iii) access to
assets is permitted only in accordance with management’s general or specific
authorization; and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.  The Company has disclosure controls and procedures
(as defined in Rules 13a–14 and 15d–14 under the Exchange Act) that are designed
to ensure that material information relating to the Company is made known to the
Company’s principal executive officer and the Company’s principal financial
officer or persons performing similar functions.  The Company is otherwise in

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compliance in all material respects with all applicable provisions of the
Sarbanes-Oxley Act of 2002, as amended and the rules and regulations promulgated
thereunder.

4.30              Foreign Corrupt Practices.  Neither the Company, nor any
Significant Subsidiary, nor, to the knowledge of the Company, any director,
officer, agent, employee or other Person acting on behalf of the Company or any
Significant Subsidiary has, in the course of its actions for, or on behalf of,
the Company, in any manner that would reasonably be expected to have a Material
Adverse Effect, (i) used any corporate funds for any unlawful contribution,
gift, entertainment or other unlawful expenses relating to political activity;
(ii) made any direct or indirect unlawful payment to any foreign or domestic
government official or employee from corporate funds; (iii) violated or is in
violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as
amended; or (iv) made any unlawful bribe, rebate, payoff, influence payment,
kickback or other unlawful payment to any foreign or domestic government
official or employee.

4.31              Employee Relations.  Neither the Company nor any Significant
Subsidiary is a party to any collective bargaining agreement or employs any
member of a union.  The Company and each Significant Subsidiary believe that
their relations with their employees are good.  Except for the Company’s Chief
Risk Executive, Chief Capital Markets Executive and Chief Strategic Initiatives
Executive (i) no executive officer of the Company (as defined in Rule 501(f)
promulgated under the Securities Act) has notified the Company that such officer
intends to leave the Company or otherwise terminate such officer’s employment
with the Company, and (ii) no executive officer of the Company is, or is now
expected to be, in violation of any material term of any employment contract,
confidentiality, disclosure or proprietary information agreement,
non-competition agreement, or any other agreement or any restrictive covenant,
and the continued employment of each such executive officer does not subject the
Company or any Significant Subsidiary to any liability with respect to any of
the foregoing matters.

4.32              ERISA.  The Company is in compliance in all material respects
with all presently applicable provisions of the Employee Retirement Income
Security Act of 1974, as amended, including the regulations and published
interpretations thereunder (herein called “ERISA”); no “reportable event” (as
defined in ERISA) has occurred with respect to any “pension plan” (as defined in
ERISA) for which the Company would have any liability; the Company has not
incurred and does not expect to incur liability under (i) Title IV of ERISA with
respect to termination of, or withdrawal from, any “pension plan”; or
(ii) Sections 412 or 4971 of the Internal Revenue Code of 1986, as amended,
including the regulations and published interpretations thereunder (the “Code”);
and each “Pension Plan” for which the Company would have liability that is
intended to be qualified under Section 401(a) of the Code is so qualified in all
material respects and nothing has occurred, whether by action or by failure to
act, which would reasonably be expected to cause the loss of such qualification.

4.33              Environmental Matters.  Except as would not result in a
Material Adverse Effect, and to the knowledge of the senior executive officers
of the Company or any Significant Subsidiary, there has been no storage,
disposal, generation, manufacture, transportation, handling or treatment of
toxic wastes, hazardous wastes or hazardous substances (collectively, “Hazardous
Substances,” as defined by the Comprehensive Environmental Response Compensation
Liability Act (“CERCLA”), 42 U.S.C. 9601(14)) by the Company or

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any Significant Subsidiary (or any of their predecessors in interest) at, upon
or from any of the property now or previously owned or leased by the Company or
any Significant Subsidiary in violation of any applicable law, ordinance, rule,
regulation, order, judgment, decree or permit or that would require remedial
action under any applicable law, ordinance, rule, regulation, order, judgment,
decree or permit; and there has been no material spill, discharge, leak,
emission, injection, escape, dumping or release of any kind into such property
or into the environment surrounding such property of any Hazardous Substances
due to or caused by the Company or any Significant Subsidiary.

4.34              Integration; Other Issuances of Shares.  Neither the Company
nor its Subsidiaries or any affiliates, nor any Person acting on its or their
behalf, has issued any shares of Common Stock or shares of any series of
preferred stock or other securities or instruments convertible into,
exchangeable for or otherwise entitling the holder thereof to acquire shares of
Common Stock which would be integrated with the sale of the Shares to such
Purchaser for purposes of the Securities Act or of any applicable stockholder
approval provisions, including, without limitation, under the rules and
regulations of any exchange or automated quotation system on which any of the
securities of the Company are listed or designated, nor will the Company or its
Subsidiaries or affiliates take any action or steps that would require
registration of any of the Shares under the Securities Act or cause the offering
of the Shares to be integrated with other offerings.  Assuming the accuracy of
the representations and warranties of the Purchasers, the offer and sale of the
Shares by the Company to the Purchasers pursuant to this Agreement will be
exempt from the registration requirements of the Securities Act.

SECTION 5.           Representations, Warranties and Covenants of the
Purchaser.  The Purchaser represents and warrants to, and covenants with, the
Company that:

5.1                Experience.  (i) The Purchaser is knowledgeable,
sophisticated and experienced in financial and business maters, in making, and
is qualified to make, decisions with respect to investments in shares
representing an investment decision like that involved in the purchase of the
Shares, including investments in securities issued by the Company and comparable
entities, has the ability to bear the economic risks of an investment in the
Shares, including a complete loss of its investment, and has reviewed carefully
the Private Placement Memorandum, including exhibits thereto, and has requested,
received, reviewed and considered all information it deems relevant in making an
informed decision to purchase the Shares; (ii) the Purchaser is acquiring the
number of Shares set forth in Section 2 above in the ordinary course of its
business and for its own account with no present intention of distributing any
of such Shares or any arrangement or understanding with any other persons
regarding the distribution of such Shares (this representation and warranty not
limiting the Purchaser’s right to sell pursuant to the Registration Statement
(hereinafter defined) or in compliance with the Securities Act and the Rules and
Regulations, or, other than with respect to any claims arising out of a breach
of this representation and warranty, the Purchaser’s right to indemnification
under Section 7.3); (iii) the Purchaser will not, directly or indirectly, offer,
sell, pledge, transfer or otherwise dispose of (or solicit any offers to buy,
purchase or otherwise acquire or take a pledge of) any of the Shares, nor will
the Purchaser engage in any short sale that results in a disposition of any of
the Shares by the Purchaser, except in compliance with the Securities Act,
Exchange Act and the Rules and Regulations and any applicable state securities
laws; (iv) the Purchaser has completed or caused

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to be completed the Registration Statement Questionnaire attached hereto as part
of Appendix I, for use in preparation of the Registration Statement, and the
answers thereto are true and correct as of the date hereof and will be true and
correct as of the effective date of the Registration Statement and the Purchaser
will notify the Company immediately of any material change in any such
information provided in the Registration Statement Questionnaire until such time
as the Purchaser has sold all of its Shares or until the Company is no longer
required to keep the Registration Statement effective; (v) the Purchaser has, in
connection with its decision to purchase the number of Shares set forth in
Section 2 above, relied solely upon the Private Placement Memorandum and the
documents included or incorporated by reference therein and the representations
and warranties of the Company contained herein; (vi) the Purchaser has had an
opportunity to discuss this investment with representatives of the Company and
ask questions of them and (vii) the Purchaser is an “accredited investor” within
the meaning of Rule 501(a)(1),(2),(3) or (7) of Regulation D promulgated under
the Securities Act.

5.2                Reliance on Exemptions.  The Purchaser understands that the
Shares are being offered and sold to it in reliance upon specific exemptions
from the registration requirements of the Securities Act, the Rules and
Regulations and state securities laws and that the Company is relying upon the
truth and accuracy of, and the Purchaser’s compliance with, the representations,
warranties, agreements, acknowledgments and understandings of the Purchaser set
forth herein in order to determine the availability of such exemptions and the
eligibility of the Purchaser to acquire the Shares.

5.3                Confidentiality.  For the benefit of the Company, the
Purchaser previously agreed orally with the Placement Agent for the benefit of
the Company and the Placement Agent to keep confidential all information
concerning this private placement.  The Purchaser understands that the
information contained in the Private Placement Memorandum is strictly
confidential and proprietary to the Company and has been prepared from the
Company’s publicly available documents and other information and is being
submitted to the Purchaser solely for such Purchaser’s confidential use.  The
Purchaser agrees to use the information contained in the Private Placement
Memorandum for the sole purpose of evaluating a possible investment in the
Shares and the Purchaser acknowledges that it is prohibited from reproducing or
distributing the Private Placement Memorandum, this Agreement, or any other
offering materials or other information provided by the Company in connection
with the Purchaser’s consideration of its investment in the Company, in whole or
in part, or divulging or discussing any of their contents, except to its
financial, investment or legal advisors in connection with its proposed
investment in the Shares, each of whom shall be advised of, and agree to abide
by, the confidentiality restrictions contained in this Agreement.  Further, the
Purchaser understands that the existence and nature of all conversations and
presentations, if any, regarding the Company and this offering must be kept
strictly confidential.  The Purchaser understands that the federal securities
laws may impose restrictions on trading based on information regarding this
offering.  In addition, the Purchaser hereby acknowledges that unauthorized
disclosure of information regarding this offering may result in a violation of
Regulation FD.  The obligations under this Section 5.3 will terminate upon the
filing by the Company of a Current Report on Form 8-K or a press release or
press releases describing this offering.  In addition to the above, the
Purchaser shall maintain in confidence the receipt and content of any notice of
a Suspension (as defined in Section 5.8 below); provided, however, that the
receipt of such notice of Suspension shall not in and of itself restrict the
Purchaser from engaging in transactions in the Company’s securities in

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which the Purchaser would otherwise be entitled to engage in, including without
limitation sales pursuant to Rule 144 under the Securities Act.  The foregoing
agreements shall not apply to any information that is or becomes publicly
available through no fault of the Purchaser, or that the Purchaser is legally
required to disclose; provided, however, that if the Purchaser is requested or
ordered to disclose any such information pursuant to any court or other
government order or any other applicable legal procedure, it shall provide the
Company with prompt notice of any such request or order in time sufficient to
enable the Company to seek an appropriate protective order.

5.4                Investment Decision.  The Purchaser understands that nothing
in the Agreement or any other materials presented to the Purchaser in connection
with the purchase and sale of the Shares constitutes legal, tax or investment
advice.  The Purchaser has consulted such legal, tax and investment advisors as
it, in its sole discretion, has deemed necessary or appropriate in connection
with its purchase of the Shares.

5.5                Risk of Loss.  The Purchaser understands that its investment
in the Shares involves a significant degree of risk, including a risk of total
loss of the Purchaser’s investment, and the Purchaser has full cognizance of and
understands all of the risk factors related to the Purchaser’s purchase of the
Shares, including, but not limited to, those set forth, or referred to, under
the caption “Risk Factors” in the Private Placement Memorandum and the Exchange
Act Reports.  The Purchaser understands that the market price of the Common
Stock has been volatile and that no representation is being made as to the
future value or trading volume of the Common Stock.  The Purchaser has the
ability to bear the economic risks of an investment in the Shares.

5.6                Legend.  The Purchaser understands that, until such time as
(i) the Registration Statement has been declared effective and the Shares have
been sold pursuant to such Registration Statement or (ii) the Shares may be sold
pursuant to Rule 144 under the Securities Act without any restriction as to the
number of securities as of a particular date that can then be immediately sold,
the Shares will bear a restrictive legend in substantially the following form:

“THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE “SECURITIES ACT”) OR THE
SECURITIES LAWS OF ANY STATE OR OTHER
JURISDICTION.  THE SHARES MAY NOT BE OFFERED,
SOLD OR OTHERWISE TRANSFERRED, OR DISPOSED OF
EXCEPT (1) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OR (2)
PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, IN EACH
CASE IN ACCORDANCE WITH ALL APPLICABLE STATE
SECURITIES LAWS AND THE SECURITIES LAWS OF
OTHER JURISDICTIONS, AND IN THE CASE OF A
TRANSACTION EXEMPT FROM REGISTRATION, UNLESS
THE COMPANY HAS RECEIVED AN OPINION OF
COUNSEL REASONABLY SATISFACTORY TO IT THAT

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SUCH TRANSACTION DOES NOT REQUIRE
REGISTRATION UNDER THE SECURITIES ACT AND SUCH
OTHER APPLICABLE LAWS.  NOTWITHSTANDING THE
FOREGOING, THE SHARES MAY BE PLEDGED IN
CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR
OTHER LOAN OR FINANCING ARRANGEMENT SECURED
BY THE SHARES.”

At such time as Shares are sold pursuant to the Registration Statement (as
defined below) after it has become effective, the Company will promptly
substitute one or more replacement certificates without a legend with respect to
such Shares.

5.7                Residency.  The Purchaser’s principal executive offices are
in the jurisdiction set forth immediately below the Purchaser’s name on the
signature pages hereto.

5.8                Public Sale or Distribution.  The Purchaser hereby covenants
with the Company not to make any sale of the Shares under the Registration
Statement without complying with the provisions of this Agreement and without
effectively causing the prospectus delivery requirements under the Securities
Act to be satisfied (whether physically or through compliance with Rule 172
under the Securities Act or any similar rule).  The Purchaser also hereby
covenants with the Company that it shall be deemed to have represented at such
time that it presents a certificate to the Company’s transfer agent representing
those Shares presented to the transfer agent for resale that such resale was
made pursuant to the Registration Statement and in compliance with the
prospectus delivery requirements under the Securities Act.  The Purchaser
acknowledges that there may occasionally be times when the Company must suspend
the use of the prospectus (the “Prospectus”) forming a part of the Registration
Statement (a “Suspension”) until such time as an amendment to the Registration
Statement has been filed by the Company and declared effective by the
Commission, or until such time as the Company has filed an appropriate report
with the Commission pursuant to the Exchange Act.  Without the Company’s prior
written consent, which consent shall not unreasonably be withheld or delayed,
the Purchaser shall not use any written materials to offer the Shares for resale
other than the Prospectus, including any “free writing prospectus” as defined in
Rule 405 under the Securities Act.  The Purchaser covenants that it will not
sell any Shares pursuant to said Prospectus during the period commencing at the
time when Company gives the Purchaser written notice of the suspension of the
use of said Prospectus (which notice shall contain solely the fact that there
has been a suspension and shall not contain any facts and circumstances
regarding the suspension) and ending at the time when the Company gives the
Purchaser written notice that the Purchaser may thereafter effect sales pursuant
to said Prospectus.  Notwithstanding the foregoing, the Company agrees that no
Suspension shall be for a period of longer than 60 consecutive days, and no
Suspension shall be for a period longer than 90 days in the aggregate in any 365
day period.  The Purchaser further covenants to notify the Company promptly of
the sale of all of its Shares.

5.9                Organization; Validity; Enforcements.  The Purchaser further
represents and warrants to, and covenants with, the Company that (i) the
Purchaser has full right, power, authority and capacity to enter into this
Agreement and to consummate the transactions contemplated hereby and has taken
all necessary action to authorize the execution, delivery and performance of
this Agreement, (ii) the making and performance of this Agreement by the

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Purchaser and the consummation of the transactions herein contemplated will not
violate any provision of the organizational documents of the Purchaser or
conflict with, result in the breach or violation of, or constitute, either by
itself or upon notice or the passage of time or both, a default under any
material agreement, mortgage, deed of trust, lease, franchise, license,
indenture, permit or other instrument to which the Purchaser is a party or, any
statute or any authorization, judgment, decree, order, rule or regulation of any
court or any regulatory body, administrative agency or other governmental agency
or body applicable to the Purchaser, (iii) no consent, approval, authorization
or other order of any court, regulatory body, administrative agency or other
governmental agency or body is required on the part of the Purchaser for the
execution and delivery of this Agreement or the consummation of the transactions
contemplated by this Agreement, (iv) upon the execution and delivery of this
Agreement, this Agreement shall constitute a legal, valid and binding obligation
of the Purchaser, enforceable in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general application relating to or
the enforcement of creditor’s rights and the application of equitable principles
relating to the availability of remedies, and except as rights to indemnity or
contribution, including, but not limited to, the indemnification provisions set
forth in Section 7.3 of this Agreement, may be limited by federal or state
securities laws or the public policy underlying such laws and (v) there is not
in effect any order enjoining or restraining the Purchaser from entering into or
engaging in any of the transactions contemplated by this Agreement.

5.10              Short Sales.  Prior to the date hereof, the Purchaser has not
taken, and prior to the public announcement of the transaction after the Closing
the Purchaser shall not take, any action that has caused or will cause the
Purchaser to have, directly or indirectly, sold or agreed to sell any shares of
Common Stock, effected any short sale, whether or not against the box,
established any “put equivalent position” (as defined in Rule 16a-1(h) under the
Exchange Act with respect to the Common Stock, granted any other right
(including, without limitation, any put or call option) with respect to the
Common Stock or with respect to any security that includes, relates to or
derived any significant part of its value from the Common Stock.

SECTION 6.           Survival of Agreements; Non-Survival of Company
Representations and Warranties.  Notwithstanding any investigation made by any
party to this Agreement or by the Placement Agent, all covenants and agreements
made by the Company and the Purchaser herein and in the certificates for the
Shares delivered pursuant hereto shall survive the execution of this Agreement,
the delivery to the Purchaser of the Shares being purchased and the payment
therefor.  All representations and warranties, made by the Company and the
Purchaser herein and in the certificates for the Shares delivered pursuant
hereto shall survive for a period of two years following the later of the
execution of this Agreement, the delivery to the Purchaser of the Shares being
purchased and the payment therefor.

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SECTION 7.           Registration of the Shares; Compliance with the Securities
Act.

7.1                Registration Procedures and Expenses.  The Company shall:

(a)           as soon as practicable prepare and, as soon as practicable after
filing with the Commission the Company’s Annual Report on Form 10-K for the year
ending December 31, 2006, file with the Commission a registration statement (the
“Registration Statement”) initially on Form S-1 relating to the resale of the
Shares by the Purchaser and the Other Purchasers from time to time on the Nasdaq
Global Market, or the facilities of any national securities exchange or
inter-dealer quotation system, including OTCBB, on which the Common Stock is
then traded or quoted in privately-negotiated transactions;

(b)           use its best efforts, subject to receipt of necessary information
from the Purchasers, to cause the Commission to declare the Registration
Statement effective within 150 days after the Closing Date (whether the
Registration Statement is selected for review by the Commission or not);

(c)           promptly prepare and file with the Commission such amendments and
supplements to the Registration Statement and the prospectus used in connection
therewith as may be necessary to keep the Registration Statement effective until
the earliest of (i) two years after the effective date of the Registration
Statement, (ii) such time as all of the Shares have been sold pursuant to the
Registration Statement, or (iii) such time as the Shares become eligible for
resale by non-affiliates pursuant to Rule 144(k) under the Securities Act or any
successor rule then in effect;

(d)           so long as the Registration Statement is effective covering the
resale of Shares owned by the Purchaser, furnish to the Purchaser with respect
to the Shares registered under the Registration Statement (and to each
underwriter, if any, of such Shares) such number of copies of prospectuses, each
amendment and supplement thereto and such other documents as the Purchaser may
reasonably request, in order to facilitate the public sale or other disposition
of all or any of the Shares by the Purchaser;

(e)           file documents required of the Company for normal Blue Sky
clearance in states specified in writing by the Purchaser; provided, however,
that the Company shall not be required to qualify to do business or consent to
service of process in any jurisdiction in which it is not now so qualified or
has not so consented;

(f)            bear all expenses in connection with the procedures in paragraphs
(a) through (e) of this Section 7.1 and the registration of the Shares pursuant
to the Registration Statement, other than fees and expenses, if any, of counsel
or other advisers to the Purchaser or the Other Purchasers or underwriting
discounts, brokerage fees and commissions incurred by the Purchaser or the Other
Purchasers, if any in connection with the offering of the Shares pursuant to the
Registration Statement;

(g)           notify the Purchaser at any time when a prospectus relating to the
Shares is required to be delivered under the Securities Act of the happening of
any event as a result of which the prospectus included in the Registration
Statement contains an untrue statement of a material fact or omits to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading and, subject to Section
7.6, prepare a supplement or amendment to such prospectus, so that, as
thereafter delivered to the Purchaser of such Shares, such prospectus will not
contain any untrue statement

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of a material fact or omit to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading;

(h)           advise the Purchaser promptly after receiving notice or obtaining
knowledge of the existence of any stop order by the Commission delaying or
suspending the effectiveness of the Registration Statement or of the initiation
or threat in writing of any proceeding for that purpose, use its commercially
reasonable efforts to obtain the withdrawal of any order suspending the
effectiveness of the Registration Statement at the earliest possible time, and
promptly notify the Purchaser of the lifting or withdrawal of any such order;

(i)            file a Form D with respect to the Shares as required under
Regulation D and to provide a copy thereof to the Purchaser promptly after
filing;

(j)            issue a press release or file a Current Report on Form 8-K
describing the transactions contemplated by this Agreement on or before 9:00
a.m., New York City time, on or before the second business day following the
date hereof; and

(k)           in order to enable the Purchasers to sell the Shares under
Rule 144 to the Securities Act, for a period of two years from Closing, use its
commercially reasonable efforts to comply with the requirements of Rule 144,
including without limitation, use its commercially reasonable efforts to comply
with the requirements of Rule 144(c) with respect to public information about
the Company and to timely file all reports required to be filed by the Company
under the Exchange Act, except for the Company’s upcoming Annual Report on Form
10-K for the year ended December 31, 2006 and Quarterly Report on Form 10-Q for
the quarter ended March 31, 2007, which the Company will file as soon as
practicable after the completion of the audit of the Company’s financial
statements for the year ended December 31, 2006.

After such time as the Company becomes eligible to file a registration statement
on Form S-3, the Company will file a post-effective amendment to the
Registration Statement to provide for the automatic incorporation by reference
of the Company’s reports subsequently filed pursuant to the Exchange Act.

The Company understands that the Purchaser disclaims being an underwriter, but
the Purchaser being deemed an underwriter shall not relieve the Company of any
obligations it has hereunder.  A draft of the proposed form of the questionnaire
related to the Registration Statement to be completed by the Purchaser is
attached hereto as Appendix I.

7.2                Transfer of Shares After Registration.  The Purchaser agrees
that it will not effect any disposition of the Shares or its right to purchase
the Shares that would constitute a sale within the meaning of the Securities Act
or pursuant to any applicable state securities laws, except as contemplated in
the Registration Statement referred to in Section 7.1 or as otherwise permitted
by law, and that it will promptly notify the Company of any changes in the
information set forth in the Registration Statement regarding the Purchaser or
its plan of distribution.

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7.3                Indemnification.  For the purpose of this Section 7.3:

(i)       the term “Purchaser/Affiliate” shall mean any affiliate of the
Purchaser, including a transferee who is an affiliate of the Purchaser, and any
person who controls the Purchaser or any affiliate of the Purchaser within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act;
and

(ii)      the term “Registration Statement” shall include any preliminary
prospectus and final prospectus included in the Registration Statement referred
to in Section 7.1 and any supplement or amendment thereto and any issuer free
writing prospectus as defined in Rule 405 under the Securities Act relating to
the Shares.

(a)           The Company agrees to indemnify and hold harmless the Purchaser
and each Purchaser/Affiliate, against any losses, claims, damages, liabilities
or expenses, joint or several, to which the Purchaser or Purchaser/Affiliates
may become subject, under the Securities Act, the Exchange Act, or any other
federal or state statutory law or regulation, or at common law or otherwise
(including in settlement of any litigation, if such settlement is effected with
the written consent of the Company), insofar as such losses, claims, damages,
liabilities or expenses (or actions in respect thereof as contemplated below)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in the Registration Statement, including the
Prospectus, financial statements and schedules, and all other documents filed as
a part thereof, as amended at the time of effectiveness of the Registration
Statement, including any information deemed to be a part thereof as of the time
of effectiveness pursuant to paragraph (b) of Rule 430A, or pursuant to
Rules 430B, 430C or 434, of the Rules and Regulations, or the Prospectus, in the
form first filed with the Commission pursuant to Rule 424(b) of the Regulations,
or filed as part of the Registration Statement at the time of effectiveness if
no Rule 424(b) filing is required or any amendment or supplement thereto, or
arise out of or are based upon the omission or alleged omission to state in any
of them a material fact required to be stated therein or necessary to make the
statements in the Registration Statement or any amendment or supplement thereto
not misleading or in the Prospectus or any amendment or supplement thereto not
misleading in light of the circumstances under which they were made, or arise
out of or are based in whole or in part on any inaccuracy in the representations
or warranties of the Company contained in this Agreement, or any failure of the
Company to perform its obligations hereunder or under law, and will promptly
reimburse the Purchaser and each Purchaser/Affiliate for any legal and other
expenses as such expenses are reasonably incurred by such Purchaser or such
Purchaser/Affiliate in connection with investigating, defending or preparing to
defend, settling, compromising or paying any such loss, claim, damage,
liability, expense or action; provided, however, that the Company will not be
liable for amounts paid in settlement of any such loss, claim, damage, liability
or action if such settlement is effected without the consent of the Company,
which consent shall not be unreasonably withheld, and the Company will not be
liable in any such case to the extent that any such loss, claim, damage,
liability or expense arises out of or is based upon (i) an untrue statement or
alleged untrue statement or omission or alleged omission made in the
Registration Statement, the Prospectus or any amendment or supplement thereto in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of the Purchaser expressly for use therein, or (ii) the
failure of such Purchaser to comply with the covenants and

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agreements contained in Sections 5.9 or 7.2 hereof respecting the sale of the
Shares, or (iii) the inaccuracy of any representation or warranty made by such
Purchaser herein or (iv) any statement or omission in any Prospectus that is
corrected in any subsequent Prospectus that was filed with the Commission prior
to the pertinent sale or sales by the Purchaser.

(b)           Each Purchaser will severally, but not jointly, indemnify and hold
harmless the Company, each of its directors, each of its officers who signed the
Registration Statement and each person, if any, who controls the Company within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act, against any losses, claims, damages, liabilities or expenses to which the
Company, each of its directors, each of its officers who signed the Registration
Statement or controlling person may become subject, under the Securities Act,
the Exchange Act, or any other federal or state statutory law or regulation, or
at common law or otherwise (including in settlement of any litigation, but only
if such settlement is effected with the written consent of such Purchaser, which
consent shall not be unreasonably withheld) insofar as such losses, claims,
damages, liabilities or expenses (or actions in respect thereof as contemplated
below) arise out of or are based upon (i) any failure to comply with the
covenants and agreements contained in Sections 5.9 or 7.2 hereof respecting the
sale of the Shares or (ii) the inaccuracy of any representation or warranty made
by such Purchaser herein or (iii) any untrue or alleged untrue statement of any
material fact contained in the Registration Statement, the Prospectus, or any
amendment or supplement thereto, or arising out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements in the Registration Statement
or any amendment or supplement thereto not misleading or in the Prospectus or
any amendment or supplement thereto not misleading in the light of the
circumstances under which they were made, in each case to the extent, but only
to the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in the Registration Statement, the
Prospectus, or any amendment or supplement thereto, in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
any Purchaser expressly for use therein; and will reimburse the Company, each of
its directors, each of its officers who signed the Registration Statement or
controlling person for any legal and other expense reasonably incurred by the
Company, each of its directors, each of its officers who signed the Registration
Statement or controlling person in connection with investigating, defending,
settling, compromising or paying any such loss, claim, damage, liability,
expense or action; provided, however, that each Purchaser’s aggregate liability
under this Section 7 shall not exceed the amount of net proceeds received by
such Purchaser on the sale of the Shares pursuant to the Registration Statement.

(c)           Promptly after receipt by an indemnified party under this
Section 7.3 of notice of the threat or commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made against an
indemnifying party under this Section 7.3 promptly notify the indemnifying party
in writing thereof, but the omission to notify the indemnifying party will not
relieve it from any liability that it may have to any indemnified party for
contribution or otherwise under the indemnity agreement contained in this
Section 7.3 to the extent it is not prejudiced as a result of such failure.  In
case any such action is brought against any indemnified party and such
indemnified party seeks or intends to seek indemnity from an indemnifying party,
the indemnifying party will be entitled to participate in, and, to the extent
that it may wish, jointly with all other indemnifying parties similarly
notified, to assume the defense thereof with counsel reasonably satisfactory to
such indemnified party; provided,

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however, if the defendants in any such action include both the indemnified
party, and the indemnifying party and the indemnified party shall have
reasonably concluded, based on an opinion of counsel reasonably satisfactory to
the indemnifying party, that there may be a conflict of interest between the
positions of the indemnifying party and the indemnified party in conducting the
defense of any such action or that there may be legal defenses available to it
and/or other indemnified parties that are different from or additional to those
available to the indemnifying party, the indemnified party or parties shall have
the right to select separate counsel to assume such legal defenses and to
otherwise participate in the defense of such action on behalf of such
indemnified party or parties.  Upon receipt of notice from the indemnifying
party to such indemnified party of its election to assume the defense of such
action and approval by the indemnified party of counsel, the indemnifying party
will not be liable to such indemnified party under this Section 7.3 for any
legal or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof unless (i) the indemnified party shall have
employed such counsel in connection with the assumption of legal defenses in
accordance with the proviso to the preceding sentence (it being understood,
however, that the indemnifying party shall not be liable for the expenses of
more than one separate counsel, reasonably satisfactory to such indemnifying
party, representing all of the indemnified parties who are parties to such
action) or (ii) the indemnifying party shall not have employed counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party within a reasonable time after notice of commencement of action, in each
of which cases the reasonable fees and expenses of counsel shall be at the
expense of the indemnifying party. The indemnifying party shall not be liable
for any settlement of any action without its written consent.  In no event shall
any indemnifying party be liable in respect of any amounts paid in settlement of
any action unless the indemnifying party shall have approved in writing the
terms of such settlement; provided that such consent shall not be unreasonably
withheld.  No indemnifying party shall, without the prior written consent of the
indemnified party (which consent shall not be unreasonably withheld), effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnification could have
been sought hereunder by such indemnified party from all liability on claims
that are the subject matter of such proceeding.

(d)           If the indemnification provided for in this Section 7.3 is
required by its terms but is for any reason held to be unavailable to or
otherwise insufficient to hold harmless an indemnified party under paragraphs
(a), (b) or (c) of this Section 7.3 in respect to any losses, claims, damages,
liabilities or expenses referred to herein, then each applicable indemnifying
party shall contribute to the amount paid or payable by such indemnified party
as a result of any losses, claims, damages, liabilities or expenses referred to
herein (i) in such proportion as is appropriate to reflect the relative benefits
received by the Company and the Purchaser from the private placement of Common
Stock hereunder or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but the relative
fault of the Company and the Purchaser in connection with the statements or
omissions or inaccuracies in the representations and warranties in this
Agreement and/or the Registration Statement that resulted in such losses,
claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations.  The relative benefits received by the Company on the
one hand and each Purchaser on the other shall be deemed to be in the same
proportion as the amount paid by such Purchaser to the Company pursuant to this
Agreement for the Shares

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purchased by such Purchaser that were sold pursuant to the Registration
Statement bears to the difference (the “Difference”) between the amount such
Purchaser paid for the Shares that were sold pursuant to the Registration
Statement and the amount received by such Purchaser from such sale.  The
relative fault of the Company on the one hand and each Purchaser on the other
shall be determined by reference to, among other things, whether the untrue or
alleged statement of a material fact or the omission or alleged omission to
state a material fact or the inaccurate or the alleged inaccurate representation
and/or warranty relates to information supplied by the Company or by such
Purchaser and the parties’ relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.  The amount paid
or payable by a party as a result of the losses, claims, damages, liabilities
and expenses referred to above shall be deemed to include, subject to the
limitations set forth in paragraph (c) of this Section 7.3, any legal or other
fees or expenses reasonably incurred by such party in connection with
investigating or defending any action or claim.  The provisions set forth in
paragraph (c) of this Section 7.3 with respect to the notice of the threat or
commencement of any threat or action shall apply if a claim for contribution is
to be made under this paragraph (d); provided, however, that no additional
notice shall be required with respect to any threat or action for which notice
has been given under paragraph (c) for purposes of indemnification.  The Company
and the Purchaser agree that it would not be just and equitable if contribution
pursuant to this Section 7.3 were determined solely by pro rata allocation (even
if all of the Purchasers were treated as one entity for such purpose) or by any
other method of allocation which does not take account of the equitable
considerations referred to in this paragraph.  Notwithstanding the provisions of
this Section 7.3, no Purchaser shall be required to contribute any amount in
excess of the amount by which the Difference exceeds the amount of any damages
that such Purchaser has otherwise been required to pay by reason of such untrue
or alleged untrue statement or omission or alleged omission.  No person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.  The Purchasers’ obligations to
contribute pursuant to this Section 7.3 are several and not joint.

7.4                Termination of Conditions and Obligations.  The restrictions
imposed by Section 5.9 or Section 7.2 upon the transferability of the Shares
shall cease and terminate as to any particular number of the Shares upon the
earlier of (i) the passage of two years from the effective date of the
Registration Statement covering such Shares and (ii) at such time as an opinion
of counsel satisfactory in form and substance to the Company shall have been
rendered to the effect that such conditions are not necessary in order to comply
with the Securities Act.

7.5                Information Available.  The Company, upon the reasonable
request of the Purchaser, shall make available for inspection by each Purchaser,
any underwriter participating in any disposition pursuant to the Registration
Statement and any attorney, accountant or other agent retained by the Purchaser
or any such underwriter, all financial and other records, pertinent corporate
documents and properties of the Company, and cause the Company’s officers,
employees and independent accountants to supply all information reasonably
requested by the Purchaser or any such underwriter, attorney, accountant or
agent in connection with the Registration Statement.

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7.6                Delay in Filing and Effectiveness of Registration Statement. 
In the event the Registration Statement is not filed and declared effective
within 150 days of the Closing Date (whether the Registration Statement is
selected for review by the Commission or not), after the 150th day after the
Closing Date until such time as the Registration Statement is declared
effective, the Company shall pay to the Purchaser an amount, as liquidated
damages and not as a penalty, equal to 0.75% per month for the first two months
after the 150th day after the Closing Date, and thereafter, 1.00% per month, of
the aggregate purchase price paid by such Purchaser pursuant to this Agreement
for any Shares then held by such Purchaser (pro rata on a 30-day basis for any
portion of a calendar month).  If the Purchaser shall be prohibited from selling
Shares under the Registration Statement as a result of a Suspension of more than
60 consecutive days or Suspensions of more than 90 days in the aggregate in any
12-month period, then for each day on which a Suspension is in effect that
exceeds the maximum allowed period for a Suspension or Suspensions, but not
including any day on which a Suspension is lifted, the Company shall pay the
Purchaser, as liquidated damages and not as a penalty, an amount equal to 0.75%
for the first two months, and thereafter, 1.00% per month, of the purchase price
paid by such Purchaser for its Shares pursuant to this Agreement for any Shares
then held by such Purchaser (pro rata on a 30-day basis for any portion of a
calendar month).  For purposes of this Section 7.6, a Suspension shall be deemed
lifted on the date that notice that the Suspension has been lifted is delivered
to the Purchaser pursuant to Section 10 of this Agreement.  All liquidated
damages under this Section 7.6 shall be payable monthly in cash, in arrears and
shall be due within five business days after the end of each calendar month, and
any unpaid liquidated damages under this Section 7.6 shall bear interest at
1.50% per month.  In no event shall the aggregate amount of such liquidated
damages or interest thereon exceed 12.0% of the aggregate purchase price paid by
the Purchaser pursuant to this Agreement for any Shares then held by such
Purchaser.  Such damages described in this Section 7.6 shall not be the
exclusive remedy for the failure of the Registration Statement to be filed and
declared effective or to maintain the effectiveness of the Registration
Statement.  Notwithstanding anything to the contrary in this Section 7.6, in no
event shall a Suspension be deemed to have occurred under this Section 7.6 where
such suspension is the result of any misstatement or omission of information
regarding the Purchaser in the Registration Statement or any amendment or
supplement thereto.

SECTION 8.           Broker’s Fee.  The Purchaser acknowledges that the Company
intends to pay to the Placement Agent a fee in respect of the sale of the Shares
to the Purchaser.  The Purchaser and the Company agree that the Purchaser shall
not be responsible for such fee and that the Company will indemnify and hold
harmless the Purchaser and each Purchaser/Affiliate against any losses, claims,
damages, liabilities or expenses, joint or several, to which such Purchaser or
Purchaser/Affiliate may become subject with respect to such fee.  Each of the
parties hereto represents that, on the basis of any actions and agreements by
it, there are no other brokers or finders entitled to compensation in connection
with the sale of the Shares to the Purchaser.

SECTION 9.           Independent Nature of Purchasers’ Obligations and Rights. 
The obligations of the Purchaser under this Agreement are several and not joint
with the obligations of any Other Purchaser, and no Purchaser shall be
responsible in any way for the performance of the obligations of any Other
Purchaser under the Agreements.  The decision of each Purchaser to purchase the
Shares pursuant to the Agreements has been made by such Purchaser independently
of any other Purchaser.  Nothing contained in the Agreements, and no

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action taken by any Purchaser pursuant thereto, shall be deemed to constitute
the Purchasers as a partnership, an association, a joint venture or any other
kind of entity, or create a presumption that the Purchasers are in any way
acting in concert or as a group with respect to such obligations or with respect
to the acquisition, disposition or voting of the Shares or the transactions
contemplated by the Agreements.  Each Purchaser acknowledges that no other
Purchaser has acted as agent for such Purchaser in connection with making its
investment hereunder and that no Purchaser will be acting as agent of such
Purchaser in connection with monitoring its investment in the Shares or
enforcing its rights under this Agreement.  Each Purchaser shall be entitled to
independently protect and enforce its rights, including without limitation the
rights arising out of this Agreement, and it shall not be necessary for any
other Purchaser to be joined as an additional party in any proceeding for such
purpose.  No consideration shall be offered or paid to any person to amend or
consent to a waiver or modification of any provision of the Agreements unless
the same consideration is also offered to all of the parties to the Agreements.

SECTION 10.         Notices.  All notices, requests, consents and other
communications hereunder shall be in writing, shall be mailed by first-class
registered or certified airmail, e-mail, confirmed facsimile or nationally
recognized overnight express courier postage prepaid, and shall be deemed given
when so mailed and shall be delivered as addressed as follows:

(a)           if to the Company, to:

 

NetBank, Inc.
1015 Windward Ridge Parkway
Alpharetta, GA 30005
Attention: Stephen F. Herbert
Facsimile: 803-462-7623
E-mail: sherbert@netbank.com

 

 

with a copy to:

 

 

Holland & Knight LLP

 

50 North Laura Street, Suite 3900

 

Jacksonville, FL 32202

 

Attention: Ivan A. Colao

 

Facsimile: 904-358-1872

 

E-mail: ivan.colao@hklaw.com

 

or to such other person at such other place as the Company shall designate to
the Purchaser in writing; and

(B)           IF TO THE PURCHASER, AT ITS ADDRESS AS SET FORTH AT THE END OF
THIS AGREEMENT, OR AT SUCH OTHER ADDRESS OR ADDRESSES AS MAY HAVE BEEN FURNISHED
TO THE COMPANY IN WRITING.

SECTION 11.         Changes.  This Agreement may not be modified or amended
except pursuant to an instrument in writing signed by the Company and the
Purchaser.

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Any amendment or waiver effected in accordance with this Section 11 shall be
binding upon each holder of any securities purchased under this Agreement at the
time outstanding, each future holder of all such securities, and the Company.

SECTION 12.         Headings.  The headings of the various sections of this
Agreement have been inserted for convenience of reference only and shall not be
deemed to be part of this Agreement.

SECTION 13.         Severability.  In case any provision contained in this
Agreement should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby.

SECTION 14.         Governing Law; Venue.  This Agreement is to be construed in
accordance with and governed by the federal law of the United States of America
and the internal laws of the State of New York without giving effect to any
choice of law rule that would cause the application of the laws of any
jurisdiction other than the internal laws of the State of New York to the rights
and duties of the parties.  Each of the Company and the Purchaser submits to the
nonexclusive jurisdiction of the United States District Court for the Southern
District of New York and of any New York State court sitting in New York City
for purposes of all legal proceedings arising out of or relating to this
Agreement and the transactions contemplated hereby.  Each of the Company and the
Purchaser irrevocably waives, to the fullest extent permitted by law, any
objection that it may now or hereafter have to the laying of the venue of any
such proceeding brought in such a court and any claim that any such proceeding
brought in such a court has been brought in an inconvenient forum.

SECTION 15.         Counterparts.  This Agreement may be executed in
counterparts, each of which shall constitute an original, but all of which, when
taken together, shall constitute but one instrument, and shall become effective
when one or more counterparts have been signed by each party hereto and
delivered to the other parties.  Facsimile signatures shall be deemed original
signatures.

SECTION 16.         Entire Agreement.  This Agreement and the instruments
referenced herein contain the entire understanding of the parties with respect
to the matters covered herein and therein and, except as specifically set forth
herein or therein, neither the Company nor the Purchaser makes any
representation, warranty, covenant or undertaking with respect to such matters. 
Each party expressly represents and warrants that it is not relying on any oral
or written representations, warranties, covenants or agreements outside of this
Agreement.

SECTION 17.         Fees and Expenses.  Except as set forth herein, each of the
Company and the Purchaser shall pay its respective fees and expenses related to
the transactions contemplated by this Agreement.

SECTION 18.         Parties.  This Agreement is made solely for the benefit of
and is binding upon the Purchaser and the Company and to the extent provided in
Section 7.3, any person controlling the Company or the Purchaser, the officers
and directors of the Company, and their respective executors, administrators,
successors and assigns and subject to the

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provisions of Section 7.3, no other person shall acquire or have any right under
or by virtue of this Agreement. The term “successors and assigns” shall not
include any subsequent purchaser, as such purchaser, of the Shares sold to the
Purchaser pursuant to this Agreement.

SECTION 19.         Further Assurances.  Each party agrees to cooperate fully
with the other party and to execute such further instruments, documents and
agreements and to give such further written assurance as may be reasonably
requested by any other party to evidence and reflect the transactions described
herein and contemplated hereby and to carry into effect the intents and purposes
of this Agreement.

[Remainder of Page Left Intentionally Blank]

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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized representatives as of the day and year first above
written.

Net Bank, Inc.

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

Print or Type:

 

 

 

Name of Purchaser

 

 

(Individual or Institution)

 

 

 

 

 

Jurisdiction of Purchaser’s Executive Offices

 

 

 

 

 

 

 

 

Name of Individual representing

 

 

Purchaser (if an Institution)

 

 

 

 

 

 

Title of Individual representing

 

 

Purchaser (if an Institution)

 

 

 

 

 

 

 

 

 

 

 

Number of Shares to be purchased

 

Signature by:

Individual Purchaser or Individual
representing Purchaser:

 

 

 

 

 

 

 

 

 

Address:

 

 

 

 

 

Telephone:

 

 

 

 

 

Facsimile:

 

 

E-mail:

 

 

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