Exhibit 10.1

 

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EMPLOYMENT AGREEMENT

 

BETWEEN

 

NICOLAS V. CHATER

 

AND

 

HOMEBANC CORP.

 

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EMPLOYMENT AGREEMENT

 

1.      Effective Date

   1

2.      Employment

   1

3.      Employment Period

   1

4.      Extent of Service

   1

5.      Compensation and Benefits

   2

(a)    Base Salary

   2

(b)    Incentive, Savings and Retirement Plans

   2

(c)    Welfare Benefit Plans

   2

(d)    Expenses

   2

(e)    Fringe Benefits

   3

(f)     Vacation

   3

(g)    Office and Support Staff

   3

(h)    D&O Insurance

   3

6.      Change of Control

   3

7.      Termination of Employment

   4

(a)    Death or Retirement

   4

(b)    Disability

   4

(c)    Termination by the Company

   5

(d)    Termination by Executive

   5

(e)    Notice of Termination

   7

(f)     Date of Termination

   7

8.      Obligations of the Company upon Termination

   7

(a)    Termination by Executive for Good Reason; Termination by the Company
Other Than for Cause or Disability

   7

(b)    Death, Disability or Retirement

   9

(c)    Cause or Voluntary Termination without Good Reason

   9

(d)    Expiration of Employment Period

   9

(e)    Resignations

   10

9.      Non-exclusivity of Rights

   10

 

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10.    Full Settlement; No Obligation to Mitigate

   10

11.    Certain Additional Payment by the Company

   10

12.    Costs of Enforcement

   12

13.    Representations and Warranties

   12

14.    Restrictions on Conduct of Executive

   13

(a)    General

   13

(b)    Definitions

   13

(c)    Restrictive Covenants

   15

(d)    Enforcement of Restrictive Covenants

   16

15.    Arbitration

   17

16.    Assignment and Successors

   17

17.    Miscellaneous

   18

 

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EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into this 19th
day of August, 2005 by and between HomeBanc Corp., a Georgia corporation (the
“Company”), and Nicolas V. Chater (“Executive”), to be effective as of the
Effective Date, as defined in Section 1.

 

BACKGROUND

 

The Company desires to continue to engage Executive as an Executive Vice
President and Deputy Chief Financial Officer of the Company from and after the
Effective Date, in accordance with the terms of this Agreement. Executive is
willing to serve as such in accordance with the terms and conditions of this
Agreement.

 

NOW THEREFORE, in consideration of the foregoing and of the mutual covenants and
agreements set forth herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:

 

1. Effective Date. The effective date of this Agreement (the “Effective Date”)
shall be August 22, 2005.

 

2. Employment. Executive is hereby employed on the Effective Date as an
Executive Vice President and Deputy Chief Financial Officer of the Company and
Executive shall have the duties, responsibilities and authority as shall be
assigned to him from time to time by, the Chief Executive Officer and/or the
President and/or the Chief Financial Officer of the Company. In his capacity as
an Executive Vice President and Deputy Chief Financial Officer of the Company,
Executive will report to the Chief Financial Officer of the Company.

 

3. Employment Period. Unless earlier terminated herein in accordance with
Section 7 hereof, Executive’s employment shall be for a term beginning on the
Effective Date and ending on June 30, 2006 (the “Employment Period”). Beginning
on June 30, 2006 and on each June 30 thereafter, the Employment Period shall,
without further action by Executive or the Company, be extended by an additional
one-year period; provided, however, that either party may cause the Employment
Period to cease to extend automatically, by giving written notice to the other
not less than 90 days prior to any June 30 renewal date. Upon such notice, the
Employment Period shall terminate upon the expiration of the then-current term,
including any prior extensions.

 

4. Extent of Service. During the Employment Period, and excluding any periods of
vacation, holiday, sick leave and Company-approved leave of absence to which
Executive is entitled in accordance with Company policies, Executive agrees to
devote substantially all of his business time, attention, skill and efforts
exclusively to the faithful performance of his duties hereunder. It shall not be
a violation of this Agreement for Executive to (i) devote reasonable time to
charitable or community activities, (ii) serve on corporate, civic, educational
or charitable boards or committees, subject to the Company’s standards of
business conduct or other code of ethics, (iii) deliver lectures or fulfill
speaking engagements from time to time on an infrequent basis, and/or (iv)
manage personal business interests and investments, subject to the Company’s
standards of business conduct or other code of ethics, and so long as such
activities do not interfere in a material manner or on a routine basis with the
performance of Executive’s responsibilities under this Agreement.

 

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5. Compensation and Benefits.

 

(a) Base Salary. During the Employment Period, the Company will pay to Executive
base salary at the rate of U.S. $250,000 per year (“Base Salary”), less normal
withholdings, payable in approximately equal bi-weekly or other installments as
are or become customary under the Company’s payroll practices for its employees
from time to time. The compensation committee of the Board of Directors of the
Company (or the full Board, if there is no compensation committee) shall review
Executive’s Base Salary annually and may increase (but not decrease) Executive’s
Base Salary from year to year. Such adjusted salary then shall become
Executive’s Base Salary for purposes of this Agreement. The annual review of
Executive’s salary by the Board will consider, among other things, Executive’s
own performance, and the Company’s performance.

 

(b) Incentive, Savings and Retirement Plans. During the Employment Period,
Executive shall be entitled to participate in all incentive, savings and
retirement plans, practices, policies and programs available to senior executive
officers of the Company other than the Chief Executive Officer of the Company
and the President of the Company (“Peer Executives”), and on the same basis as
such Peer Executives. Without limiting the foregoing, the following shall apply:

 

(i) during the Employment Period, Executive will be entitled to participate in
the Company’s executive bonus plan, pursuant to which he will have an
opportunity to receive an annual cash bonus based upon the achievement of
performance goals established from year to year by the compensation committee of
the Board of Directors of the Company and payable in the manner and at the times
prescribed by such bonus plan (such bonus earned at the stated “goal” level of
achievement being referred to herein as the “Target Bonus”); and

 

(ii) during the Employment Period, Executive will be eligible for grants, under
the Company’s long-term incentive plan or plans, of stock options to acquire
common stock of the Company (or such other stock-based awards as the Company
makes to Peer Executives), having terms and determined in the same manner as
awards to other Peer Executives, unless the Executive consents to a different
type of award or different terms of such award than are applicable to other Peer
Executives.

 

(c) Welfare Benefit Plans. During the Employment Period, Executive and
Executive’s eligible dependents shall be eligible for participation in, and
shall receive all benefits under, the welfare benefit plans, practices, policies
and programs provided by the Company (including, without limitation, medical,
prescription drug, dental, disability, employee life, dependent life, accidental
death and travel accident insurance plans and programs) (“Welfare Plans”) to the
extent available to other Peer Executives.

 

(d) Expenses. During the Employment Period, Executive shall be entitled to
receive prompt reimbursement for all reasonable expenses incurred by Executive
in the course of performing his duties and responsibilities under this
Agreement, in accordance with the policies, practices and procedures of the
Company to the extent available to other Peer Executives with respect to travel,
entertainment and other business expenses. In addition to, and not in lieu of
the foregoing, Executive shall receive a monthly sum of $500.00 for incidental
expenses. Without limiting the foregoing, the Company will pay, or reimburse
Executive for, the reasonable legal fees and expenses incurred by Executive in
connection with the negotiation and execution of this Agreement.

 

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(e) Fringe Benefits. During the Employment Period, Executive shall be entitled
to fringe benefits in accordance with the plans, practices, programs and
policies of the Company available to other Peer Executives.

 

(f) Vacation. During the Employment Period, Executive will be entitled to such
paid vacation time as may be provided from time to time under any plans,
practices, programs and policies of the Company available to other Peer
Executives.

 

(g) Office and Support Staff. During the Employment Period, Executive will be
entitled to office, furnishings and equipment of similar type and quality made
available to other Peer Executives. During the Employment Period, Executive will
be entitled to secretarial and other assistance reasonably necessary for the
performance of his duties and responsibilities.

 

(h) D&O Insurance. During and for a period of three (3) years after the
Employment Period, the Executive shall be entitled to director and officer
insurance coverage for his acts and omissions while an officer and director of
the Company on a basis no less favorable to him than the coverage provided
current officers and directors. The Company warrants that it shall, with
Executive’s input, periodically review such coverage to make certain it conforms
to that which is deemed appropriate at the time(s) of such review(s).

 

6. Change of Control. For the purposes of this Agreement, a “Change of Control”
shall mean the occurrence of any of the following events:

 

(a) individuals who, on the Effective Date, constitute the Board of Directors of
the Company (the “Incumbent Directors”) cease for any reason to constitute at
least a majority of such Board, provided that any person becoming a director
after the Effective Date and whose election or nomination for election was
approved by a vote of at least a majority of the Incumbent Directors then on the
Board shall be an Incumbent Director; provided, however, that no individual
initially elected or nominated as a director of the Company as a result of an
actual or threatened election contest with respect to the election or removal of
directors (“Election Contest”) or other actual or threatened solicitation of
proxies or consents by or on behalf of any “person” (such term for purposes of
this Section 6 being as defined in Section 3(a)(9) of the Securities Exchange
Act of 1934 (the “Exchange Act”) and as used in Section 13(d)(3) and 14(d)(2) of
the Exchange Act) other than the Board (“Proxy Contest”), including by reason of
any agreement intended to avoid or settle any Election Contest or Proxy Contest,
shall be deemed an Incumbent Director; or

 

(b) any person is or becomes a “beneficial owner” (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of either (i) 35% or more of
the then-outstanding shares of common stock of the Company (“Company Common
Stock”) or (ii) securities of the Company representing 35% or more of the
combined voting power of the Company’s then outstanding securities eligible to
vote for the election of directors (the “Company Voting Securities”); provided,
however, that for purposes of this paragraph (b), the following acquisitions of
Company Common Stock or Company Voting Securities shall not constitute a Change
of Control: (A) an acquisition directly from the Company, (B) an acquisition by
the Company or a subsidiary of the Company, (C) an acquisition by any employee
benefit plan (or related trust) sponsored or maintained by the Company or any
subsidiary of the Company, or (D) an acquisition pursuant to a Non-Qualifying
Transaction (as defined in paragraph (c) below); or

 

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(c) the consummation of a recapitalization, reorganization, merger,
consolidation, statutory share exchange or similar form of transaction involving
the Company or a subsidiary of the Company (a “Reorganization”), or the sale or
other disposition of all or substantially all of the Company’s assets (a “Sale”)
or the acquisition of assets or stock of another entity (an “Acquisition”),
unless immediately following such Reorganization, Sale or Acquisition: (A) all
or substantially all of the individuals and entities who were the beneficial
owners, respectively, of the outstanding Company Common Stock and outstanding
Company Voting Securities immediately prior to such Reorganization, Sale or
Acquisition beneficially own, directly or indirectly, more than 50% of,
respectively, the then outstanding shares of common stock and the combined
voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the entity
resulting from or surviving such Reorganization, Sale or Acquisition (including,
without limitation, an entity which as a result of such transaction owns the
Company or all or substantially all of the Company’s assets or stock either
directly or through one or more subsidiary entities, the “Surviving Entity”) in
substantially the same proportions as their ownership, immediately prior to such
Reorganization, Sale or Acquisition, of the outstanding Company Common Stock and
the outstanding Company Voting Securities, as the case may be, and (B) no person
(other than (x) the Company or any subsidiary of the Company, (y) the Surviving
Entity or its ultimate parent entity, or (z) any employee benefit plan (or
related trust) sponsored or maintained by any of the foregoing) is the
beneficial owner, directly or indirectly, of 35% or more of the total common
stock or 35% or more of the total voting power of the outstanding voting
securities eligible to elect directors of the Surviving Entity, and (C) at least
a majority of the members of the board of directors of the Surviving Entity were
Incumbent Directors at the time of the Board’s approval of the execution of the
initial agreement providing for such Reorganization, Sale or Acquisition (any
Reorganization, Sale or Acquisition which satisfies all of the criteria
specified in (A), (B) and (C) above shall be deemed to be a “Non-Qualifying
Transaction”); or

 

(d) approval by the shareholders of the Company of a complete liquidation or
dissolution of the Company.

 

7. Termination of Employment.

 

(a) Death or Retirement. Executive’s employment shall terminate automatically
upon Executive’s death or Retirement during the Employment Period. For purposes
of this Agreement, “Retirement” shall mean normal retirement as defined in the
Company’s then-current retirement plan, or if there is no such retirement plan,
“Retirement” shall mean voluntary termination after age 65 with at least ten
years of service.

 

(b) Disability. If the Company determines in good faith that the Disability (as
defined below) of Executive has occurred during the Employment Period, it may
give to Executive written notice of its intention to terminate Executive’s
employment. In such event, Executive’s employment with the Company shall
terminate effective on the 30th day after receipt of such written notice by
Executive (the “Disability Effective Date”), provided that, within the 30 days
after such receipt, Executive shall not have returned to full-time performance
of Executive’s duties. For purposes of this Agreement, “Disability” shall have
the same meaning as provided in the long-term disability plan or policy
maintained by the Company and covering Executive. If no such long-term
disability plan or policy is maintained, “Disability” shall mean the inability
of Executive, as determined by the Board, to perform the essential functions of
his regular duties

 

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and responsibilities, with or without reasonable accommodation, due to a
medically determinable physical or mental illness which has lasted (or can
reasonably be expected to last) for a period of six consecutive months. At the
request of Executive or his personal representative, the Board’s determination
that the Disability of Executive has occurred shall be certified by two
physicians mutually agreed upon by Executive, or his personal representative,
and the Company. Failing such independent certification (if so requested by
Executive), Executive’s termination shall be deemed a termination by the Company
without Cause and not a termination by reason of his Disability.

 

(c) Termination by the Company. The Company may terminate Executive’s employment
during the Employment Period with or without Cause. For purposes of this
Agreement, “Cause” shall mean:

 

(i) the failure or refusal of Executive to perform substantially Executive’s
duties with the Company (other than any such failure resulting from incapacity
due to physical or mental illness, or following Executive’s delivery of notice
of termination for Good Reason, and specifically excluding any failure by
Executive, after reasonable efforts, to meet performance expectations), after
within thirty (30) days immediately following a written demand for substantial
performance delivered to Executive by the Board, or by the CEO or President of
the Company, which specifically identifies the manner in which the Board, the
CEO or the President believes that Executive has not substantially performed
Executive’s duties or his failure or refusal to obey a directive from the Board
or the CEO or President of the Company after receiving written demand for
performance from the Board, the CEO or the President, or

 

(ii) the engaging by Executive in illegal conduct, intentional misconduct or
gross misconduct which has the potential to be injurious to the Company or its
reputation or to subject the Company to liability for damages, or it is
determined by the Company, in good faith, that Executive is or was a party to
any agreement which interferes with Executive’s ability to perform duties in
full conformance with the terms and provisions hereof, or

 

(iii) the commission by Executive, or a plea of guilty or nolo contendere by
Executive, to a felony or other crime involving moral turpitude.

 

The cessation of employment of Executive shall not be deemed to be for Cause
unless and until there shall have been delivered to Executive a copy of a
resolution duly adopted by the affirmative vote of not less than a majority of
the entire membership of the Board of the Company (excluding Executive, if
Executive is a member of the Board), finding that, in the good faith opinion of
such Board, Executive is guilty of the conduct described in subparagraph (i),
(ii) or (iii) above, and specifying the particulars thereof in detail. Such
finding shall be effective to terminate Executive’s employment for Cause only if
Executive was provided reasonable notice of the proposed action and was given an
opportunity, together with counsel, to be heard by the Board.

 

(d) Termination by Executive. Executive’s employment may be terminated by
Executive for Good Reason or no reason. For purposes of this Agreement, unless
written consent of Executive is obtained, “Good Reason” shall mean:

 

(i) after a Change in Control, the assignment to Executive of duties
inconsistent in material respect with Executive’s position (including offices
and titles, but excepting reporting relationships and requirements), authority,
duties or responsibilities as in effect immediately prior to the Change in
Control, or a material diminution in such position,

 

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authority, duties or responsibilities, excluding for this purpose an isolated,
insubstantial and inadvertent action not taken in bad faith and which is
remedied by the Company promptly after receipt of notice thereof given by
Executive; provided, however, that the fact that Executive’s employment after a
Change in Control shall be with a non-publicly traded subsidiary of an entity
resulting from or surviving the Change in Control, if that is the case, shall
not of itself be deemed a material diminution in Executive’s position,
authority, duties or responsibilities for purposes of this subsection;

 

(ii) a reduction by the Company in Executive’s Base Salary as in effect on the
Effective Date as the same may be increased from time to time, unless such
reduction is pursuant to a general reduction applicable to other Peer
Executives, or a reduction in Executive’s Target Bonus in a manner inconsistent
with the Target Bonuses of other Peer Executives; or;

 

(iii) after a Change in Control, the failure by the Company (A) to continue in
effect any compensation plan in which Executive participates as of the date
immediately prior to the Change in Control that is material to Executive’s total
compensation, unless an equitable alternative or other arrangement (embodied in
an ongoing substitute or alternative plan) has been made with respect to such
plan, or (B) to continue Executive’s participation therein (or in such
substitute or alternative plan) on a basis not materially less favorable in
terms of the level of Executive’s participation relative to other participants;
or

 

(iv) the Company’s requiring Executive to be based at any office or location
other than the Company’s principal executive offices in the Greater Atlanta
Metropolitan Area (Georgia);

 

(v) any failure by the Company to comply with and satisfy 16(c) of this
Agreement; or

 

(vi) after a Change in Control, the material breach by the Company of any
provision of this Agreement not otherwise referred to in the foregoing
provisions of this Section 7(d); or

 

(vii) any termination by Executive for any reason or no reason during the 30-day
period beginning on the first anniversary of a Change in Control.

 

Good Reason shall not include Executive’s death or Disability; provided that
Executive’s mental or physical incapacity following the occurrence of an event
described in clause (i) – (vi) above shall not affect Executive’s ability to
terminate for Good Reason. In the event that “Cause” exists under this Agreement
and the Company acts to terminate Executive’s employment for Cause, Executive
shall not thereafter be entitled to exercise a termination for Good Reason or to
receive payments or benefits pursuant to Section 8 of this Agreement for
termination for Good Reason. Except as provided in Section 8(a), Executive’s
continued employment shall not constitute consent to, or a waiver of rights with
respect to, any circumstance constituting Good Reason hereunder. Any claim of
“Good Reason” under this Agreement shall be communicated by Executive to the
Company in writing within 10 days of his knowledge of its occurrence, which
writing shall specifically identify the factual details concerning all events
giving rise to Executive’s claim of Good Reason under this Section 7(d). No
general description of unspecified events shall constitute proper notice of Good
Reason or termination for Good Reason. The Company shall have an opportunity to
cure any claimed event of Good Reason described in clause (i) – (vi) above
within 30 days of such notice from Executive.

 

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(e) Notice of Termination. Any termination by the Company for Cause, or by
Executive for Good Reason, shall be communicated by Notice of Termination to the
other party hereto given in accordance with Section 17(f) of this Agreement. For
purposes of this Agreement, a “Notice of Termination” means a written notice
which (i) indicates the specific termination provision in this Agreement relied
upon, (ii) to the extent applicable, sets forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of Executive’s
employment under the provision so indicated, and (iii) specifies the termination
date. The failure by Executive or the Company to set forth in the Notice of
Termination any fact or circumstance which contributes to a showing of Good
Reason or Cause shall not waive any right of Executive or the Company,
respectively, hereunder or preclude Executive or the Company, respectively, from
asserting such fact or circumstance in enforcing Executive’s or the Company’s
rights hereunder.

 

(f) Date of Termination. “Date of Termination” means (i) if Executive’s
employment is terminated by the Company for Cause, or by Executive for Good
Reason, the date of receipt of the Notice of Termination or a date within 30
days after receipt of the Notice of Termination, as specified in such notice,
(ii) if Executive’s employment is terminated by the Company other than for Cause
or Disability, the Date of Termination shall be the date of receipt of the
Notice of Termination or a date within 90 days after receipt of the Notice of
Termination, as specified in such notice, (iii) if Executive’s employment is
terminated by reason of death or Disability, the Date of Termination shall be
the date of death of Executive or the Disability Effective Date, as the case may
be, and (iv) if Executive’s employment is terminated by Executive without Good
Reason, the Date of Termination shall be 60 days following the Company’s receipt
of the Notice of Termination, unless the Company specifies an earlier Date of
Termination.

 

8. Obligations of the Company upon Termination.

 

(a) Termination by Executive for Good Reason; Termination by the Company Other
Than for Cause or Disability. If, during the Employment Period, the Company
shall terminate Executive’s employment other than for Cause or Disability, or
Executive shall terminate employment for Good Reason during the 30-day period
provided in Section 7(d)(vii) or during the 60-day period following the
occurrence of the event described in clause (i) – (vi) of Section 7(d) giving
rise to Good Reason (subject to the restrictions set forth in those provisions,
including the limitation of certain rights to the time after the occurrence of a
Change in Control), then and, with respect to the payments and benefits
described in clauses (i)(B) and (ii) below, only if Executive executes a Release
in substantially the form of Exhibit A hereto (the “Release”) and complies fully
with that Release and with all provisions of Section 14 of this Employment
Agreement below, including maintaining compliance for any time period specified
therein:

 

(i) the Company shall provide to Executive in a single lump sum cash payment
within 30 days after the Date of Termination, or if later, within five days
after the Release becomes effective and nonrevocable, the aggregate of the
following amounts:

 

A. the sum of the following amounts, to the extent not previously paid to
Executive (the “Accrued Obligations”): (1) Executive’s Base Salary through the
Date of Termination, (2) a pro-rata bonus for the year in which the Date of
Termination occurs, computed as the product of (x) Executive’s Target Bonus for
such year and (y) a fraction, the numerator of which is the number of days in
the current fiscal year through the Date of Termination, and the denominator of
which is 365, (3) any accrued pay in lieu of unused vacation, and (4) unless
Executive has a later payout date that is required in

 

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connection with the terms of a deferral plan or agreement, any vested
compensation previously deferred by Executive (together with any amount
equivalent to accrued interest or earnings thereon); and

 

B. a severance payment as determined pursuant to clause (x) or (y) below, as
applicable:

 

(x) if the Date of Termination occurs before, or more than two years after, the
occurrence of a Change of Control, the severance payment shall be the product of
12 (the “Regular Severance Factor”) times one twelfth of the sum of (1)
Executive’s Base Salary in effect as of the Date of Termination (ignoring any
decrease in Executive’s Base Salary unless consented to by Executive), and (2)
the greater of the average of the annual bonuses earned by Executive for the two
fiscal years in which annual bonuses were paid immediately preceding the year in
which the Date of Termination occurs, or Executive’s Target Bonus for the year
in which the Date of Termination occurs; or

 

(y) if the Date of Termination occurs within two years after the occurrence of a
Change of Control, the severance payment shall be the product of 18 (the “Change
of Control Severance Factor”) times one twelfth of the sum of (1) Executive’s
Base Salary in effect as of the Date of Termination, and (2) the greater of the
average of the annual bonuses earned by Executive for the two fiscal years in
which annual bonuses were paid immediately preceding the year in which the Date
of Termination occurs, or Executive’s Target Bonus for the year in which the
Date of Termination occurs; and

 

(ii) the Company shall continue to provide, for a number of months equal to the
Regular Severance Factor or the Change of Control Severance Factor (determined
in Section 8(a)(i)(B)(x) or (y) above, as applicable) after Executive’s Date of
Termination (the “Welfare Benefits Continuation Period”), or such longer period
as may be provided by the terms of the appropriate plan, program, practice or
policy, any group health benefits to which Executive and/or Executive’s eligible
dependents would otherwise be entitled to continue under COBRA, or benefits
substantially equivalent to those group health benefits which would have been
provided to them in accordance with the Welfare Plans described in Section 5(c)
of this Agreement if Executive’s employment had not been terminated, or, at the
Company’s option, shall reimburse Executive for premiums he actually incurs in
continuing such group health benefits pursuant to COBRA; provided, however, that
if Executive becomes employed with another employer (including self-employment)
and becomes eligible to receive group health benefits under another employer
provided plan, the Company’s obligation to provide group health benefits, or to
reimburse COBRA group health insurance continuation premiums, as described
herein shall cease, except as otherwise provided by law and provided, further,
that the Welfare Benefits Continuation Period shall run concurrently with any
period for which Executive is eligible to elect health coverage under COBRA; and

 

(iii) all grants of stock options and other equity awards granted by the Company
and held by Executive as of the Date of Termination will become immediately
vested and exercisable as of the Date of Termination, exercisable within thirty
(30) days thereafter and, to the extent necessary, this Agreement is hereby
deemed an amendment of any such outstanding stock option or other equity award;
and

 

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(iv) the Company shall provide Executive with reasonable outplacement services
for a period of one year; provided, that the Company shall be obligated to pay
not more than 25% of Executive’s annual Base Salary as in effect immediately
prior to the Date of Termination for such outplacement services, and that the
period of services may be shortened to such extent; and

 

(v) to the extent not theretofore paid or provided, the Company shall timely pay
or provide to Executive any other amounts or benefits required to be paid or
provided or which Executive is eligible to receive under any plan, program,
policy or practice of the Company to the extent provided to Peer Executives
prior to the Date of Termination (such other amounts and benefits shall be
hereinafter referred to as the “Other Benefits”).

 

If Executive’s employment is terminated by the Company without Cause prior to
the occurrence of a Change in Control and if it can reasonably be shown that
Executive’s termination (i) was at the direction or request of a third party
that had taken steps reasonably calculated to effect a Change in Control after
such termination, or (ii) otherwise occurred in anticipation of a Change in
Control, and in either case a Change in Control as defined hereunder does, in
fact, occur, then Executive shall have the rights described in this Section 8(a)
as if the Change in Control had occurred on the date immediately preceding the
Date of Termination.

 

(b) Death, Disability or Retirement. If Executive’s employment is terminated by
reason of his death, Disability or Retirement during the Employment Period, this
Agreement shall terminate without further obligations to Executive or his
estate, beneficiaries or legal representatives, other than for payment of
Accrued Obligations and the timely payment or provision of Other Benefits.
Accrued Obligations shall be paid to Executive or his estate, beneficiary or
legal representative, as applicable, in a lump sum in cash within 30 days of the
Date of Termination. With respect to the provision of Other Benefits, the term
Other Benefits as used in this Section 8(b) shall include, without limitation,
and Executive or his estate, beneficiaries or legal representatives, as
applicable, shall be entitled to receive, benefits under such plans, programs,
practices and policies relating to death, disability or retirement benefits, if
any, as are applicable to Executive or his family on the Date of Termination.

 

(c) Cause or Voluntary Termination without Good Reason. If Executive’s
employment shall be terminated for Cause during the Employment Period, or if
Executive voluntarily terminates employment during the Employment Period without
Good Reason, this Agreement shall terminate without further obligations to
Executive, other than for payment of Accrued Obligations (excluding the pro-rata
bonus described in clause 2 of Section 8(a)(i)(A)) and the timely payment or
provision of Other Benefits.

 

(d) Expiration of Employment Period. If this Agreement terminates due to the
normal expiration of the Employment Period through notice of non-renewal
provided by either party as described in Section 3 hereof, Executive’s
employment shall terminate automatically. If Executive provides notice of
non-renewal, or if the Company provides notice of non-renewal for Cause, then
the Agreement and Executive’s employment shall terminate without further
obligations to Executive, other than for payment of Accrued Obligations
(excluding the pro-rata bonus described in clause 2 of Section 8(a)(i)(A)) and
the timely payment or provision of Other Benefits. If, however, the Company
causes this Agreement to expire by providing notice of non-renewal of the
Agreement as provided in Section 3 hereof, without Cause, and only if Executive
executes a Release provided by the Company and complies fully with that Release
and with all provisions of Section 14 of this Employment Agreement below,
including maintaining compliance for any time period specified therein, then the
Company shall pay to Executive, in addition to the Accrued Obligations, a lump
sum amount equivalent to three (3) months of Executive’s Base Salary in effect
at the time of termination of employment.

 

9

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(e) Resignations. Termination of Executive’s employment for any reason
whatsoever shall constitute Executive’s resignation from the Board of Directors
of the Company and resignation as an officer of the Company, its subsidiaries
and affiliates.

 

9. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or limit
Executive’s continuing or future participation in any employee benefit plan,
program, policy or practice provided by the Company and for which Executive may
qualify, except as specifically provided herein. Amounts which are vested
benefits or which Executive is otherwise entitled to receive under any employee
benefit plan, policy, practice or program of the Company, its subsidiaries or
any of its affiliated companies at or subsequent to the Date of Termination
shall be payable in accordance with such plan, policy, practice or program
except as explicitly modified by this Agreement.

 

10. Full Settlement; No Obligation to Mitigate. The Company’s obligation to make
the payments provided for in this Agreement and otherwise to perform its
obligations hereunder shall not be affected by any set-off, counterclaim,
recoupment, defense or other claim, right or action which the Company may have
against Executive or others. In no event shall Executive be obligated to seek
other employment or take any other action by way of mitigation of the amounts
payable to Executive under any of the provisions of this Agreement and, except
as explicitly provided herein, such amounts shall not be reduced whether or not
Executive obtains other employment.

 

11. Certain Additional Payments by the Company.

 

(a) Anything in this Agreement to the contrary notwithstanding and except as set
forth below, in the event it shall be determined that any payment or
distribution by the Company to or for the benefit of Executive (whether paid or
payable or distributed or distributable pursuant to the terms of this Agreement
or otherwise, but determined without regard to any additional payments required
under this Section 11) (a “Payment”) would be subject to the excise tax imposed
by Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”) or
any interest or penalties are incurred by Executive with respect to such excise
tax (such excise tax, together with any such interest and penalties, are
hereinafter collectively referred to as the “Excise Tax”), then Executive shall
be entitled to receive an additional payment (a “Gross-Up Payment”) in an amount
such that after payment by Executive of all taxes (including any interest or
penalties imposed with respect to such taxes), including, without limitation,
any income taxes (and any interest and penalties imposed with respect thereto)
and Excise Tax imposed upon the Gross-Up Payment, Executive retains an amount of
the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
Notwithstanding the foregoing provisions of this Section 11(a), if it shall be
determined that Executive is entitled to a Gross-Up Payment, but that Executive,
after taking into account the Payments and the Gross-Up Payment, would not
receive a net after-tax benefit of at least $50,000 (taking into account both
income taxes and any Excise Tax) as compared to the net after-tax proceeds to
Executive resulting from an elimination of the Gross-Up Payment and a reduction
of the Payments, in the aggregate, to an amount (the “Reduced Amount”) such that
the receipt of Payments would not give rise to any Excise Tax, then no Gross-Up
Payment shall be made to Executive and the Payments, in the aggregate, shall be
reduced to the Reduced Amount. Executive may select the Payments to be limited
or reduced.

 

10

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(b) Subject to the provisions of Section 11(c), all determinations required to
be made under this Section 11, including whether and when a Gross-Up Payment is
required and the amount of such Gross-Up Payment and the assumptions to be used
in arriving at such determination, shall be made by a certified public
accounting firm selected by Executive (other than the Company’s regular
accounting firm) and reasonably acceptable to the Company (the “Accounting
Firm”) which shall provide detailed supporting calculations both to the Company
and Executive within 15 business days of the receipt of notice from Executive
that there has been a Payment, or such earlier time as is reasonably requested
by the Company. All fees and expenses of the Accounting Firm shall be borne
solely by the Company. Any Gross-Up Payment, as determined pursuant to this
Section 11, shall be paid by the Company to Executive within five days of the
receipt of the Accounting Firm’s determination. Any determination by the
Accounting Firm shall be binding upon the Company and Executive. As a result of
the uncertainty in the application of Section 4999 of the Code at the time of
the initial determination by the Accounting Firm hereunder, it is possible that
Gross-Up Payments which will not have been made by the Company should have been
made (“Underpayment”), consistent with the calculations required to be made
hereunder. In the event that the Company exhausts its remedies pursuant to
Section 11(c) and Executive thereafter is required to make a payment of any
Excise Tax, the Accounting Firm shall determine the amount of the Underpayment
that has occurred and any such Underpayment shall be promptly paid by the
Company to or for the benefit of Executive.

 

(c) Executive shall notify the Company in writing of any claim by the Internal
Revenue Service that, if successful, would require the payment by the Company of
a Gross-Up Payment (or an additional Gross-Up Payment). Such notification shall
be given as soon as practicable but no later than ten business days after
Executive is informed in writing of such claim and shall apprise the Company of
the nature of such claim and the date on which such claim is requested to be
paid. Executive shall not pay such claim prior to the expiration of the 30-day
period following the date on which he gives such notice to the Company (or such
shorter period ending on the date that any payment of taxes with respect to such
claim is due). If the Company notifies Executive in writing prior to the
expiration of such period that it desires to contest such claim, Executive
shall:

 

(i) give the Company any information reasonably requested by the Company
relating to such claim,

 

(ii) take such action in connection with contesting such claim as the Company
shall reasonably request in writing from time to time, including, without
limitation, accepting legal representation with respect to such claim by an
attorney reasonably selected by the Company,

 

(iii) cooperate with the Company in good faith in order effectively to contest
such claim, and

 

(iv) permit the Company to participate in any proceedings relating to such
claim;

 

provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold Executive harmless, on an
after-tax basis, for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation and
payment of costs and expenses. Without limitation of the foregoing provisions of
this

 

11

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Section 11(c), the Company shall control all proceedings taken in connection
with such contest (to the extent applicable to the Excise Tax and the Gross-Up
Payment) and, at its sole option, may pursue or forgo any and all administrative
appeals, proceedings, hearings and conferences with the taxing authority in
respect of such claim and may, at its sole option, either direct Executive to
pay the tax claimed and sue for a refund or contest the claim in any permissible
manner, and Executive agrees to prosecute such contest to a determination before
any administrative tribunal, in a court of initial jurisdiction and in one or
more appellate courts, as the Company shall determine; provided, however, that
if the Company directs Executive to pay such claim and sue for a refund, the
Company shall advance the amount of such payment to Executive, on an
interest-free basis and shall indemnify and hold Executive harmless, on an
after-tax basis, from any Excise Tax or income tax (including interest or
penalties with respect thereto) imposed with respect to such advance or with
respect to any imputed income with respect to such advance; and further provided
that any extension of the statute of limitations relating to payment of taxes
for the taxable year of Executive with respect to which such contested amount is
claimed to be due is limited solely to such contested amount. Furthermore, the
Company’s control of the contest shall be limited to issues with respect to
which a Gross-Up Payment would be payable hereunder and Executive shall be
entitled to settle or contest, as the case may be, any other issue raised by the
Internal Revenue Service or any other taxing authority.

 

(d) If, after the receipt by Executive of an amount advanced by the Company
pursuant to Section 11(c), Executive becomes entitled to receive any refund with
respect to such claim, Executive shall (subject to the Company’s complying with
the requirements of Section 11(c)) promptly pay to the Company the amount of
such refund (together with any interest paid or credited thereon after taxes
applicable thereto). If, after the receipt by Executive of an amount advanced by
the Company pursuant to Section 11(c), a determination is made that Executive
shall not be entitled to any refund with respect to such claim and the Company
does not notify Executive in writing of its intent to contest such denial of
refund prior to the expiration of 30 days after such determination, then such
advance shall be forgiven and shall not be required to be repaid and the amount
of such advance shall offset, to the extent thereof, the amount of Gross-Up
Payment required to be paid.

 

12. Costs of Enforcement. After a Change in Control, the Company shall reimburse
Executive for all reasonable legal fees and related expenses incurred by
Executive (i) in contesting or disputing any termination of Executive’s
employment occurring after a Change in Control, or (ii) in seeking to obtain or
enforce any right or benefit provided by this Agreement based upon facts
occurring after a Change in Control, but only in the event that Executive
prevails in arbitration over such disputes, and, provided further, Executive
shall be required to repay to the Company any such amounts to the extent that an
arbitral panel or a court issues a final and non-appealable order, judgment,
decree or award denying Executive’s claims in their entirety. In addition,
Executive shall be entitled to be paid all reasonable legal fees and expenses,
if any, incurred in connection with any tax audit or proceeding to the extent
attributable to the application of Section 4999 of the Code to any payment or
benefit hereunder. All such payments shall be made within thirty (30) days after
delivery of Executive’s respective written requests for payment accompanied with
such evidence of fees and expenses incurred as the Company reasonably may
require.

 

13. Representations and Warranties. Executive hereby represents and warrants to
the Company that Executive is not a party to, or otherwise subject to, any
covenant not to compete with any person or entity, and Executive’s execution of
this Agreement and performance of his obligations hereunder will not violate the
terms or conditions of any contract or obligation, written or oral, between
Executive and any other person or entity.

 

12

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14. Restrictions on Conduct of Executive.

 

(a) General. Executive and the Company understand and agree that the purpose of
the provisions of this Section 14 is to protect legitimate business interests of
the Company, as more fully described below, and is not intended to impair or
infringe upon Executive’s right to work, earn a living, or acquire and possess
property from the fruits of his labor. Executive hereby acknowledges that
Executive has received good and valuable consideration for the post-employment
restrictions set forth in this Section 14 in the form of the compensation and
benefits provided for herein. Executive hereby further acknowledges that the
post-employment restrictions set forth in this Section 14 are reasonable and
that they do not, and will not, unduly impair his ability to earn a living after
the termination of this Agreement.

 

In addition, the parties acknowledge: (A) that Executive’s services under this
Agreement require unique expertise and talent in the provision of Competitive
Services and that Executive will have substantial contacts with customers,
suppliers, advertisers and vendors of the Company; (B) that pursuant to this
Agreement, Executive will be placed in a position of trust and responsibility
and he will have access to a substantial amount of Confidential Information and
Trade Secrets and that the Company is placing him in such position and giving
him access to such information in reliance upon his agreement not to solicit
customers during the Restricted Period; (C) that due to Executive’s unique
experience and talent, the loss of Executive’s services to the Company under
this Agreement cannot reasonably or adequately be compensated solely by damages
in an action at law; (D) that Executive is capable of competing with the
Company; and (E) that Executive is capable of obtaining gainful, lucrative and
desirable employment that does not violate the restrictions contained in this
Agreement.

 

Therefore, Executive shall be subject to the restrictions set forth in this
Section 14.

 

(b) Definitions. The following capitalized terms used in this Section 14 shall
have the meanings assigned to them below, which definitions shall apply to both
the singular and the plural forms of such terms:

 

“Competitive Services” means the business of originating, servicing or
securitizing residential mortgage loans.

 

“Confidential Information” means all information regarding the Company, its
activities, business or clients that is the subject of reasonable efforts by the
Company to maintain its confidentiality and that is not generally disclosed by
practice or authority to persons not employed by the Company, but that does not
rise to the level of a Trade Secret. “Confidential Information” shall include,
but is not limited to, financial plans and data concerning the Company;
management planning information; business plans; operational methods; market
studies; marketing plans or strategies; product development techniques or plans;
customer lists; customer files, data and financial information, details of
customer contracts; current and anticipated customer requirements; identifying
and other information pertaining to business referral sources; past, current and
planned research and development; business acquisition plans; and new personnel
acquisition plans. “Confidential Information” shall not include information that
has become generally available to the public by the act of one who has the right
to disclose such information without violating any right or privilege of the
Company. This definition shall not limit any definition of “confidential
information” or any equivalent term under state or federal law.

 

13

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“Determination Date” means the date of termination of Executive’s employment
with the Company for any reason whatsoever or any earlier date (during the
Employment Period) of an alleged breach of the Restrictive Covenants by
Executive.

 

“Person” means any individual or any corporation, partnership, joint venture,
limited liability company, association or other entity or enterprise.

 

“Principal or Representative” means a principal, owner, partner, stockholder,
joint venturer, investor, member, trustee, director, officer, manager, employee,
agent, representative or consultant.

 

“Protected Customers” means any Person to whom the Company has sold its products
or services or solicited to sell its products or services, other than through
general advertising targeted at consumers, during the 12 months prior to the
Determination Date.

 

“Protected Employees” means employees of the Company who were employed by the
Company or its affiliates at any time within six months prior to the
Determination Date, other than those who were discharged by the Company or such
affiliated employer without cause.

 

“Restricted Period” means the Employment Period plus the 12-month period
following the Date of Termination; provided, however, that the Restricted Period
shall end with respect to the covenants in clauses (ii) and (iii) of Section
14(c) on the 60th day after the Date of Termination in the event the Company
breaches its obligation, if any, to make any payment required under Section
8(a)(i).

 

“Restrictive Covenants” means the restrictive covenants contained in Section
14(c) hereof.

 

“Third Party Information” means confidential or proprietary information subject
to a duty on the Company’s and its affiliates’ part to maintain the
confidentiality of such information and to use it only for certain limited
purposes.

 

“Trade Secret” means all information, without regard to form, including, but not
limited to, technical or nontechnical data, a formula, a pattern, a compilation,
a program, a device, a method, a technique, a drawing, a process, financial
data, financial plans, product plans, distribution lists or a list of actual or
potential customers, advertisers or suppliers which is not commonly known by or
available to the public and which information: (A) derives economic value,
actual or potential, from not being generally known to, and not being readily
ascertainable by proper means by, other persons who can obtain economic value
from its disclosure or use; and (B) is the subject of efforts that are
reasonable under the circumstances to maintain its secrecy. Without limiting the
foregoing, Trade Secret means any item of confidential information that
constitutes a “trade secret(s)” under the common law or statutory law of the
State of Georgia.

 

“Work Product” means all inventions, innovations, improvements, developments,
methods, processes, programs, designs, analyses, drawings, reports, and all
similar or related information (whether or not patentable) that relate to the
Company’s or its affiliates’ actual or anticipated business, research and
development, or existing or future products or services and that are conceived,
developed, contributed to, made, or reduced to practice by Executive (either
solely or jointly with others) while employed by the Company or its affiliates.

 

14

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(c) Restrictive Covenants.

 

(i) Restriction on Disclosure and Use of Confidential Information and Trade
Secrets. Executive understands and agrees that the Confidential Information and
Trade Secrets constitute valuable assets of the Company and its affiliated
entities, and may not be converted to Executive’s own use. Accordingly,
Executive hereby agrees that Executive shall not, directly or indirectly, at any
time during the Restricted Period reveal, divulge, or disclose to any Person not
expressly authorized by the Company any Confidential Information, and Executive
shall not, directly or indirectly, at any time during the Restricted Period use
or make use of any Confidential Information in connection with any business
activity other than that of the Company. Throughout the term of this Agreement
and at all times after the date that this Agreement terminates for any reason,
Executive shall not directly or indirectly transmit or disclose any Trade Secret
of the Company to any Person, and shall not make use of any such Trade Secret,
directly or indirectly, for himself or for others, without the prior written
consent of the Company. The parties acknowledge and agree that this Agreement is
not intended to, and does not, alter either the Company’s rights or Executive’s
obligations under any state or federal statutory or common law regarding trade
secrets and unfair trade practices.

 

Anything herein to the contrary notwithstanding, Executive shall not be
restricted from disclosing or using Confidential Information or any Trade Secret
that is required to be disclosed by law, court order or other legal process;
provided, however, that in the event disclosure is required by law, Executive
shall provide the Company with prompt notice of such requirement so that the
Company may seek an appropriate protective order prior to any such required
disclosure by Executive.

 

Executive acknowledges that any and all Confidential Information is the
exclusive property of the Company and agrees to deliver to the Company on the
Date of Termination, or at any other time the Company may request in writing,
any and all Confidential Information which he may then possess or have under his
control in whatever form same may exist, including, but not by way of
limitation, hard copy files, soft copy files, computer disks, and all copies
thereof.

 

(ii) Nonsolicitation of Protected Employees. Executive understands and agrees
that the relationship between the Company and each of its Protected Employees
constitutes a valuable asset of the Company and may not be converted to
Executive’s own use. Accordingly, Executive hereby agrees that during the
Restricted Period, Executive shall not directly or indirectly on Executive’s own
behalf or as a Principal or Representative of any Person or otherwise solicit or
induce any Protected Employee to terminate his employment relationship with the
Company or to enter into employment with any other Person.

 

(iii) Restriction on Relationships with Protected Customers. Executive
understands and agrees that the relationship between the Company and each of its
Protected Customers constitutes a valuable asset of the Company and may not be
converted to Executive’s own use. Accordingly, Executive hereby agrees that,
during the Restricted Period, Executive shall not, without the prior written
consent of the Company, directly or indirectly, on Executive’s own behalf or as
a Principal or Representative of any Person, solicit, divert, take away or
attempt to solicit, divert or take away a Protected Customer for the purpose of
providing or selling Competitive Services; provided, however, that the
prohibition of this covenant shall apply only to Protected Customers with whom
Executive had Material Contact on the Company’s behalf during the 12 months
immediately preceding the Date of Termination; and, provided further, that the
prohibition of this covenant shall not apply to the conduct of general
advertising activities. For

 

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purposes of this Agreement, Executive had “Material Contact” with a Protected
Customer if (a) he had business dealings with the Protected Customer on the
Company’s behalf; (b) he was responsible for supervising or coordinating the
dealings between the Company and the Protected Customer; or (c) he obtained
Trade Secrets or Confidential Information about the customer as a result of his
association with the Company.

 

(iv) Ownership of Work Product. Executive acknowledges that the Work Product
belongs to the Company or its affiliates and Executive hereby assigns, and
agrees to assign, all of the Work Product to the Company or its affiliates. Any
copyrightable work prepared in whole or in part by Executive in the course of
his work for any of the foregoing entities shall be deemed a “work made for
hire” under the copyright laws, and the Company or such affiliate shall own all
rights therein. To the extent that any such copyrightable work is not a “work
made for hire,” Executive hereby assigns and agrees to assign to the Company or
such affiliate all right, title, and interest, including without limitation,
copyright in and to such copyrightable work. Executive shall promptly disclose
such Work Product and copyrightable work to the Board and perform all actions
reasonably requested by the Board (whether during or after the Employment
Period) to establish and confirm the Company’s or such affiliate’s ownership
(including, without limitation, assignments, consents, powers of attorney, and
other instruments).

 

(v) Third Party Information. Executive understands that the Company and its
affiliates will receive Third Party Information. During the Employment Period
and thereafter, and without in any way limiting the provisions of Section
14(c)(i) above, Executive will hold Third Party Information in the strictest
confidence and will not disclose to anyone (other than personnel of the Company
or its affiliates who need to know such information in connection with their
work for the Company or its affiliates) or use, except in connection with his
work for the Company or its affiliates, Third Party Information unless expressly
authorized by a member of the Board (other than Executive) in writing.

 

(vi) Use of Information of Prior Employers. During the Employment Period,
Executive will not improperly use or disclose any confidential information or
trade secrets, if any, of any former employers or any other person to whom
Executive has an obligation of confidentiality, and will not bring onto the
premises of the Company or any of its affiliates any unpublished documents or
any property belonging to any former employer or any other person to whom
Executive has an obligation of confidentiality unless consented to by in writing
the former employer or person. Executive will use in the performance of his
duties only information which is (i) generally known and used by persons with
training and experience comparable to Executive’s and which is (x) common
knowledge in the industry or (y) is otherwise legally in the public domain, (ii)
is otherwise provided or developed by the Company or its affiliates or (iii) in
the case of materials, property or information belonging to any former employer
or other person to whom Executive has an obligation of confidentiality, approved
for such use in writing by such former employer or person.

 

(d) Enforcement of Restrictive Covenants.

 

(i) Rights and Remedies Upon Breach. In the event Executive breaches, or
threatens to commit a breach of, any of the provisions of the Restrictive
Covenants, the Company shall have the right and remedy to enjoin, preliminarily
and permanently, Executive from violating or threatening to violate the
Restrictive Covenants and to have the Restrictive Covenants specifically
enforced by any court or tribunal of competent jurisdiction, it being agreed
that any breach or threatened breach of the Restrictive Covenants would cause
irreparable injury

 

16

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to the Company and that money damages would not provide an adequate remedy to
the Company. Such right and remedy shall be independent of any others and
severally enforceable, and shall be in addition to, and not in lieu of, any
other rights and remedies available to the Company at law or in equity.

 

(ii) Severability of Covenants. Executive acknowledges and agrees that the
Restrictive Covenants are reasonable and valid in time and scope and in all
other respects. The covenants set forth in this Agreement shall be considered
and construed as separate and independent covenants. Should any part or
provision of any covenant be held invalid, void or unenforceable, such
invalidity, voidness or unenforceability shall not render invalid, void or
unenforceable any other part or provision of this Agreement. If any portion of
the foregoing provisions is found to be invalid or unenforceable because its
duration, the territory, the definition of activities or the definition of
information covered is considered to be invalid or unreasonable in scope, the
invalid or unreasonable term shall be redefined, or a new enforceable term
provided, such that the intent of the Company and Executive in agreeing to the
provisions of this Agreement will not be impaired and the provision in question
shall be enforceable to the fullest extent of the applicable laws.

 

(iii) Reformation. The parties hereunder agree that it is their intention that
the Restrictive Covenants be enforced in accordance with their terms to the
maximum extent possible under applicable law. The parties further agree that, in
the event any tribunal of competent jurisdiction shall find that any provision
hereof is not enforceable in accordance with its terms, the tribunal shall
reform the Restrictive Covenants such that they shall be enforceable to the
maximum extent permissible at law.

 

15. Arbitration. Any claim or dispute arising under or relating to this
Agreement or the breach, termination, or validity of any term of this Agreement,
including, but not by way of limitation, the legality and enforceability of the
Restrictive Covenants, shall be subject to arbitration, and prior to commencing
any court action, the parties agree that they shall arbitrate all controversies;
provided, however, that nothing in this Section 15 shall prohibit the Company
from exercising its right under Section 14(d)(i) to pursue injunctive remedies
with respect to a breach or threatened breach of the Restrictive Covenants. The
arbitration shall be conducted in Atlanta, Georgia, in accordance with the
Employment Dispute Rules of the American Arbitration Association and the Federal
Arbitration Act, 9 U.S.C. §1, et. seq. The arbitrator(s) shall be authorized to
award both liquidated and actual damages, in addition to injunctive relief, but
no punitive damages. The arbitrator(s) may also award attorney’s fees and costs,
without regard to any restriction on the amount of such award under Georgia or
other applicable law. Such an award shall be binding and conclusive upon the
parties hereto, subject to 9 U.S.C. §10. Each party shall have the right to have
the award made the judgment of a court of competent jurisdiction.

 

/s/ NVC

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/s/ CWM

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Exec. Initials

            Co. Initials

 

16. Assignment and Successors.

 

(a) This Agreement is personal to Executive and without the prior written
consent of the Company shall not be assignable by Executive otherwise than by
will or the laws of descent and distribution. This Agreement shall inure to the
benefit of and be enforceable by Executive’s legal representatives.

 

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(b) This Agreement shall inure to the benefit of and be binding upon the Company
and its successors and assigns.

 

(c) The Company will require any Surviving Entity resulting from a
Reorganization, Sale or Acquisition (if other than the Company) to assume
expressly and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no Reorganization,
Sale or Acquisition had taken place. As used in this Agreement, “Company” shall
mean the Company as hereinbefore defined and any successor to its business
and/or assets as aforesaid which assumes and agrees to perform this Agreement by
operation of law, or otherwise.

 

17. Miscellaneous.

 

(a) Waiver. Failure of either party to insist, in one or more instances, on
performance by the other in strict accordance with the terms and conditions of
this Agreement shall not be deemed a waiver or relinquishment of any right
granted in this Agreement or of the future performance of any such term or
condition or of any other term or condition of this Agreement, unless such
waiver is contained in a writing signed by the party making the waiver.

 

(b) Severability. If any provision or covenant, or any part thereof, of this
Agreement should be held by any tribunal of competent jurisdiction to be
invalid, illegal or unenforceable, either in whole or in part, such invalidity,
illegality or unenforceability shall not affect the validity, legality or
enforceability of the remaining provisions or covenants, or any part thereof, of
this Agreement, all of which shall remain in full force and effect.

 

(c) Other Agents. Nothing in this Agreement is to be interpreted as limiting the
Company from employing other personnel on such terms and conditions as may be
satisfactory to it, except that this Section 17(c) shall not override the
provision of Section 7(d)(i).

 

(d) Entire Agreement. Except as provided herein, this Agreement contains the
entire agreement between the Company and Executive with respect to the subject
matter hereof and, from and after the Effective Date, this Agreement shall
supersede any other agreement between the parties with respect to the subject
matter hereof, including without limitation, the Prior Agreement.

 

(e) Governing Law. Except to the extent preempted by federal law, and without
regard to conflict of laws principles, the laws of the State of Georgia shall
govern this Agreement in all respects, whether as to its validity, construction,
capacity, performance or otherwise.

 

(f) Notices. All notices, requests, demands and other communications required or
permitted hereunder shall be in writing and shall be deemed to have been duly
given if delivered or three days after mailing if mailed, first class, certified
mail, postage prepaid:

 

To the Company:   HomeBanc Corp.     2002 Summit Boulevard     Suite 100    
Atlanta, Georgia 30319-1497     Attention: General Counsel To Executive:  
Nicolas V. Chater     570 Valley Hall Drive     Atlanta, Georgia 30350

 

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Any party may change the address to which notices, requests, demands and other
communications shall be delivered or mailed by giving notice thereof to the
other party in the same manner provided herein.

 

(g) Amendments and Modifications. This Agreement may be amended or modified only
by a writing signed by both parties hereto, which makes specific reference to
this Agreement.

 

(h) Construction. Each party and his or its counsel have reviewed this Agreement
and have been provided the opportunity to revise this Agreement and accordingly,
the normal rule of construction to the effect that any ambiguities are to be
resolved against the drafting party shall not be employed in the interpretation
of this Agreement. Instead, the language of all parts of this Agreement shall be
construed as a whole, and according to its fair meaning, and not strictly for or
against either party.

 

(i) Withholding. The Company or its subsidiaries, if applicable, shall be
entitled to deduct or withhold from any amounts owing from the Company or any
such affiliate to Executive any federal, state, local or foreign withholding
taxes, excise taxes, or employment taxes (“Taxes”) imposed with respect to
Executive’s compensation or other payments from the Company or any of its
affiliates. In the event the Company or its affiliates do not make such
deductions or withholdings, Executive shall indemnify the Company and its
affiliates for any amounts paid with respect to any such Taxes.

 

IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this
Employment Agreement as of the date first above written.

 

HOMEBANC CORP.   EXECUTIVE: By:  

/s/ Charles W. McGuire

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/s/ Nicolas V. Chater

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Title:   Executive Vice President   Nicolas V. Chater

 

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EXHIBIT A

Form of Release

 

THIS RELEASE (“Release”) is granted effective as of the              day of
                    ,             , by Nicolas V. Chater (“Executive”) in favor
of HomeBanc Corp. (the “Company”). This is the Release referred to in that
certain Employment Agreement dated as of                                  , 2005
by and between the Company and Executive (the “Employment Agreement”), with
respect to which this Release is an integral part.

 

FOR AND IN CONSIDERATION of the payments and benefits provided by Section 8 of
the Employment Agreement and the Company’s other promises and covenants as
recited in the Employment Agreement, the receipt and sufficiency of which are
hereby acknowledged, Executive, for himself, his successors and assigns, now and
forever hereby releases and discharges the Company and all its past and present
officers, directors, stockholders, employees, agents, parent corporations,
predecessors, subsidiaries, affiliates, estates, successors, assigns, benefit
plans, consultants, administrators, and attorneys (hereinafter collectively
referred to as “Releasees”) from any and all claims, charges, actions, causes of
action, sums of money due, suits, debts, covenants, contracts, agreements,
promises, demands or liabilities (hereinafter collectively referred to as
“Claims”) whatsoever, in law or in equity, whether known or unknown, which
Executive ever had or now has from the beginning of time up to the date this
Release (“Release”) is executed, including, but not limited to, claims under the
Age Discrimination in Employment Act, as amended by the Older Workers Benefit
Protection Act, Title VII of the Civil Rights Act of 1964 (and all of its
amendments), the Americans with Disabilities Act, as amended, or any other
federal or state statutes, all tort claims, all claims for wrongful employment
termination or breach of contract, and any other claims which Executive has,
had, or may have against the Releasees on account of or arising out of
Executive’s employment with or termination from the Company; provided, however,
that nothing contained in this Release shall in any way diminish or impair (i)
any rights of Executive to the benefits conferred or referenced in the
Employment Agreement, (ii) any rights to indemnification that may exist from
time to time under any Indemnification Agreement between Executive and the
Company, or the Company’s certificate of incorporation or bylaws, or Delaware
law, or (iii) Executive’s ability to raise an affirmative defense in connection
with any lawsuit or other legal claim or charge instituted or asserted by the
Company against Executive (collectively, the “Excluded Claims”).

 

Without limiting the generality of the foregoing, Executive hereby acknowledges
and covenants that in consideration for the sums being paid to him he has
knowingly waived any right or opportunity to assert any claim that is in any way
connected with any employment relationship or the termination of any employment
relationship which existed between the Company and Executive. Executive further
understands and agrees that, except for the Excluded Claims, he has knowingly
relinquished, waived and forever released any and all remedies arising out of
the aforesaid employment relationship or the termination thereof, including,
without limitation, claims for backpay, front pay, liquidated damages,
compensatory damages, general damages, special damages, punitive damages,
exemplary damages, costs, expenses and attorneys’ fees.

 

Executive specifically acknowledges and agrees that he has knowingly and
voluntarily released the Company and all other Releasees from any and all claims
arising under the Age Discrimination in Employment Act (“ADEA”), 29 U.S.C. §
621, et seq., which Executive ever had or now has from the beginning of time up
to the date this Release is executed, including but not limited to those claims
which are in any way connected with any employment relationship or

 

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the termination of any employment relationship which existed between the Company
and Executive. Executive further acknowledges and agrees that he has been
advised to consult with an attorney prior to executing this Release and that he
has been given twenty-one (21) days to consider this Release prior to its
execution. Executive also understands that he may revoke this Release at any
time within seven (7) days following its execution. Executive understands,
however, that this Release shall not become effective and that none of the
consideration described above shall be paid to him until the expiration of the
seven-day revocation period.

 

Executive agrees never to seek reemployment or future employment with the
Company or any of the other Releasees.

 

Executive acknowledges that the terms of this Release must be kept confidential.
Accordingly, Executive agrees not to disclose or publish to any person or entity
the terms and conditions or sums being paid in connection with this Release,
except as required by law, as necessary to prepare tax returns, or as necessary
to enforce the Excluded Claims.

 

It is understood and agreed by Executive that the payment made to him is not to
be construed as an admission of any liability whatsoever on the part of the
Company or any of the other Releasees, by whom liability is expressly denied.

 

Executive agrees and covenants that he will not make any derogatory or
disparaging statements about or relating to the Company, its business practices,
its products, its services or its employment practices and that he will not
engage in any harassing conduct directed at Company. For purposes of this
provision, “Company” means and includes the Company and its officers, directors,
agents, representatives and employees. Nothing in this provision is intended to
prohibit Executive from testifying truthfully in any judicial or quasi-judicial
proceeding.

 

This Release is executed by Executive voluntarily and is not based upon any
representations or statements of any kind made by the Company or any of the
other Releasees as to the merits, legal liabilities or value of his claims.
Executive further acknowledges that he has had a full and reasonable opportunity
to consider this Release and that he has not been pressured or in any way
coerced into executing this Release.

 

Executive acknowledges and agrees that this Release may not be revoked at any
time after the expiration of the seven-day revocation period and that he will
not institute any suit, action, or proceeding, whether at law or equity,
challenging the enforceability of this Release. Executive further acknowledges
and agrees that, with the exception of an action to challenge his waiver of
claims under the ADEA, he shall not ever attempt to challenge the terms of this
Release, attempt to obtain an order declaring this Release to be null and void,
or institute litigation against the Company or any other Releasee based upon a
claim which is covered by the terms of the release contained herein, without
first repaying all monies paid to him under Section 8 of the Employment
Agreement. Furthermore, with the exception of an action to challenge his waiver
of claims under the ADEA, if Executive does not prevail in an action to
challenge this Release, to obtain an order declaring this Release to be null and
void, or in any action against the Company or any other Releasee based upon a
claim which is covered by the release set forth herein, Executive shall pay to
the Company and/or the appropriate Releasee all their costs and attorneys’ fees
incurred in their defense of Executive’s action.

 

This Release and the rights and obligations of the parties hereto shall be
governed and construed in accordance with the laws of the State of Georgia. If
any provision hereof is unenforceable or is held to be unenforceable, such
provision shall be fully severable, and this

 

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document and its terms shall be construed and enforced as if such unenforceable
provision had never comprised a part hereof, the remaining provisions hereof
shall remain in full force and effect, and the court or tribunal construing the
provisions shall add as a part hereof a provision as similar in terms and effect
to such unenforceable provision as may be enforceable, in lieu of the
unenforceable provision.

 

This document contains all terms of the Release and supersedes and invalidates
any previous agreements or contracts. No representations, inducements, promises
or agreements, oral or otherwise, which are not embodied herein shall be of any
force or effect.

 

IN WITNESS WHEREOF, the undersigned acknowledges that he has read these three
pages and he sets his hand and seal this              day of
                    , 20    .

 

 

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Nicolas V. Chater

 

Sworn to and subscribed before me this              day of                     ,
20    .

 

 

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Notary Public

 

My Commission Expires:

 

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