Exhibit 10.7

                     SEVERANCE AGREEMENT AND MUTUAL RELEASE

THIS SEVERANCE  AGREEMENT AND MUTUAL RELEASE (the  "Agreement")  is executed and
entered  into this _____ day of  __________,  2000 by and between  Douglas  Cole
("Cole"),    and   NetAmerica.com    Corporation,    a   Delaware    corporation
("NetAmerica.com" or the "Company").

                                 R E C I T A L S

         WHEREAS,  on or about April 1, 1999,  Cole and the Company entered into
an  employment  agreement,  attached  hereto as  Attachment  A (the  "Employment
Agreement");

         WHEREAS, Cole is also a director of the Company;

         WHEREAS, the parties mutually agree that it is in their respective best
interests to bring the employment relationship between Cole and the Company to a
conclusion;

         WHEREAS,  the Company  would like Cole to provide  consulting  services
during a transition period and remain as a director of the Company; and

         WHEREAS, the parties intend to provide for such employment  termination
and transition and other services in this Agreement.

         NOW THEREFORE,  in  consideration  of the mutual covenants and promises
contained herein and other good and valuable consideration,  receipt of which is
hereby acknowledged , the parties hereto covenant and agree as follows:

         1.  Termination  of  Employment.  As of February  7, 2000,  the parties
mutually agree that Cole's employment with the Company ceased. Furthermore, Cole
delivered a written  resignation  as of such date (the  "Resignation")  from his
position as an officer of the Company.

         2. Interim  Responsibilities During Transition Period. From February 7,
2000  through  March 31,  2000 or such later  time as the  parties  agree,  Cole
continued  or will  continue to assume such  responsibilities  and perform  such
tasks as the Board of Directors shall assign.

         3. Consulting Services.  Upon execution of this Agreement,  the Company
hereby  retains  Cole as a  consultant,  to advise it with  respect  to  certain
aspects of its business. In connection therewith,  Cole hereby agrees to perform
such reasonable and necessary  consulting services relating to the restructuring
of  NetAmerica.com's  business  to focus on the  operations  of its  subsidiary,
RateXchange, Inc., as may be requested by the Company and its executive officers
from time to time  until  May 1,  2000 or such  later  time as the  parties  may
mutually agree (the "Consulting Period"). Cole hereby accepts such retention and
shall in good faith  perform  such  services,  for and on behalf and in the best
interests of the Company  during the Consulting  Period.  It is agreed that Cole
shall not be  required  to spend any  specific  period or periods of time at the
offices or premises of the Company in providing the services hereunder, but will
be  available  to consult  with the  Company at  mutually  convenient  times and
places.  Cole may  provide  the  services  hereunder  in person,  by  telephone,
facsimile, e-mail or other correspondence as he and the Company mutually agree.

<PAGE>


         4.  Directorship.  Cole agrees to continue serving as a director of the
Company  for a period of three (3)  months or such  earlier or later time as the
parties may mutually  agree.  The Company  agrees to pay Cole the standard  rate
paid to  non-employee  directors  for each director  meeting plus  out-of-pocket
expenses.

         5. Consideration. In consideration for the covenants and agreements set
forth in Sections 1-4 above, and the parties' mutual releases,  on the terms and
conditions of this Agreement, the parties acknowledge and agree as follows:

         (a) Until the  expiration of the Consulting  Period,  the Company shall
pay to Cole a consulting  fee of $14,000 per month for the  consulting  services
Cole renders to the Company during the Consulting Period.

         (b) Upon  execution of this  Agreement,  the Company agrees to pay Cole
$14,000  per  month  for  six  (6)  months  in  severance  pay  less  applicable
withholdings.  Each  payment  will be made by the fifth (5th) day of each month.
Notwithstanding the foregoing,  after the Company receives at least $7.5 million
in additional  financing,  any unpaid severance  payments will be paid in a lump
sum payment within ten (10) days of the Company's receipt of such funds.

         (c) Cole  agrees to comply with  Sections 6, 7 and 8 of the  Employment
Agreement,   which  are   incorporated   herein  by  reference,   pertaining  to
Non-Competition,  Confidentiality and Remedies.  The  Non-Competition  provision
will be limited to non-competition  with the Company's operations on the date of
the  execution  of  this  Agreement.  All  other  terms  and  provisions  of the
Employment Agreement shall terminate upon the execution of this Agreement.

         (d) Upon  execution of this  Agreement,  the Company  agrees to pay the
cost of Cole's  health  insurance  premiums  for a period of twelve (12) months.
Each payment will be made by the seventh (7th) day of each month.

         (e) Upon execution of this Agreement,  the Company agrees to pay Cole a
performance  bonus of $115,000 for his services as Chief Executive Officer which
were outside his duties as defined in his Employment Agreement.

         (f) Upon  execution of this  Agreement,  the Company  agrees to pay all
amounts it owes Cole for unpaid  salary,  bonuses and/or  expenses.  The Company
also agrees to issue all  options  that were  approved  for Cole by the Board of
Directors prior to the execution of this Agreement.

         (g) Cole shall be  entitled  to keep his  current  computer  and office
equipment.

         (h) Within thirty (30) days of the expiration of the Consulting Period,
the Company  agrees to register on Form S-8, or on an  alternative  form to Form
S-8, all shares issuable upon exercise of the options issued under the Company's
1999 or 2000 Stock  Option  Plans or outside such plans and owned by Cole at the
end of the Consulting  Period.  The Company agrees to maintain the effectiveness
of this registration for a period of at least one (1) year.

                                      -2-

<PAGE>

         6. Release of Cole's Claims Against the Company.

         (a) Excluding claims for breach or enforcement of this Agreement,  Cole
does hereby irrevocably and unconditionally  release and forever discharge,  for
himself and for his heirs,  executors,  administrators and assigns,  any and all
claims of any nature  whatsoever  against  the  Company,  its current and former
officers, directors,  shareholders,  employees,  representatives,  attorneys and
agents as well as its predecessors, parent companies, subsidiaries,  affiliates,
successors  and  assigns,  which  Cole  has or had  against  them or any of them
arising out of or by reason of any cause, matter or thing whatsoever existing as
of the date of execution of this Agreement,  whether known to the parties at the
time of execution of this  Agreement or not including  without  limitation,  any
claims arising out of, or relating in any manner whatsoever to the employment of
Cole by the Company and his separation from the Company. This FULL WAIVER OF ALL
CLAIMS includes,  without limitation,  any claims,  demands, or causes of action
arising out of, or relating in any manner  whatsoever to the Civil Rights Act of
1964 and 1991, as amended,  the Age Discrimination in Employment Act of 1967, as
amend, the Older Workers Benefit  Protections Act, the Fair Labor Standards Act,
the Labor Management  Relations Act, the Employee Retirement Income Security Act
of 1974, the Americans with Disabilities  Act, or any other applicable  federal,
state,  or local  statute  or  regulation,  or any  common  law cause of action,
including  without  limitation,  claims  for  breach of any  express  or implied
contract, the covenant of good faith and fair dealing, tort, wrongful discharge,
constructive discharge, personal injury, emotional distress,  defamation, fraud,
or any claims for  attorneys'  fees or other costs.  Cole further  covenants and
agrees that upon being paid the amounts  provided  for in Section 5, above,  the
Company is not further  indebted to him in any amount for any reason,  including
any fringe benefits or other forms of compensation.

         (b) Cole represents and warrants that he has not assigned or subrogated
any of his rights, claims and causes of action,  including any claims referenced
in this Agreement, or authorized any other person or entity to assert such claim
or claims on his behalf and he agrees to indemnify and hold harmless the Company
against any assignment of said right, claims and/or causes of action.

         (c) Cole  represents  that he has not filed any  complaints  or charges
against the Company with any local,  state or federal court or agency based upon
events occurring prior to the date of execution of this Agreement.  Cole further
represents  and  agrees  that he  will  not in the  future  file,  instigate  or
encourage  the filing of any  proceeding  or lawsuit  by any party  against  the
Company in any local, state or federal court or agency.  Cole further represents
and agrees that he shall not in the future  cooperate or participate in any such
lawsuit or proceedings except in accordance with this Agreement and as otherwise
required by law. It is understood  and agreed that Cole's  promises set forth in
this Section 6 are of critical importance to this Agreement.  Any breach by Cole
of the  provisions  of this  Section  shall be deemed a material  breach of this
Agreement.

         (d) Cole agrees that he will not disclose, disseminate and/or publicize
any of the terms of this Agreement,  any of the factual  allegations  underlying
any  claims  the  Company  or Cole  may have  against  one  another,  any of the
underlying  facts of this Agreement or  negotiations  regarding this  Agreement,
directly or indirectly,  specifically or generally, to any person,  corporation,
association or  governmental  agency,  except (a) as required by law; (b) to the
extent

                                      -3-

<PAGE>

necessary to report income to appropriate  taxing  authorities;  (c) pursuant to
privileged  communications;  or  (d)  in  response  to  an  order  of  court  or
governmental  agency of competent  jurisdiction  or subpoena issued under proper
authority;  provided that notice of receipt of such judicial  order,  inquiry or
subpoena shall be immediately  communicated to the Company,  telephonically  and
confirmed  immediately  thereafter in writing, so that the Company will have the
opportunity to intervene and assert what rights it has to nondisclosure prior to
the response to the order, inquiry or subpoena.

         7. Release of the Company's Claims Against Cole.

         (a) Excluding  claims for breach or enforcement of this Agreement,  the
Company for itself, its legal representatives, subsidiaries, affiliates, agents,
successors in interest and assigns, irrevocably and unconditionally releases and
forever discharges Cole from any and all claims of any nature whatsoever against
Cole, or his affiliates, agents, employees,  attorneys,  successors and assigns,
which the  Company has or had  against  Cole  arising out of or by reason of any
cause,  matter or thing whatsoever  existing as of the date of execution of this
Agreement,  whether  known to the parties at the time of the  execution  of this
Agreement or not,  including without  limitation,  any claims arising out of, or
relating in any manner  whatsoever to the  employment of Cole by the Company and
his separation from the Company.  The Company  acknowledges that this release of
claims  specifically  includes,  but is not  limited  to, any and all claims for
breach of  contract,  breach of the  covenant  of good  faith and fair  dealing,
intentional or negligent misrepresentation,  conspiracy, negligence of any kind,
libel,  slander or any other wrongful  conduct based upon events occurring prior
to the date of the execution of this Agreement.

         (b) The Company  represents  and  warrants  that it has not assigned or
subrogated any of its rights,  claims and causes of action  including any claims
referenced in this  Agreement or authorized any other person or entity to assert
such claim or claims on its behalf and  agrees to  indemnify  and hold  harmless
Cole against any assignment of said rights, claims and/or causes of action.

         (c) The  Company  represents  that it has not filed any  complaints  or
charges against Cole with any local, state or federal court or agency based upon
the events  occurring  prior to the date of  execution  of this  Agreement.  The
Company  further  represents  and agrees  that it will not in the  future  file,
instigate  or  encourage  the filing of any  proceeding  or lawsuit by any party
against Cole in any local, state or federal court or agency. The Company further
represents  and agrees that it shall not in the future  cooperate or participate
in any such lawsuit or proceeding  except in accordance  with this Agreement and
as otherwise  required by law. It is  understood  and agreed that the  Company's
promises  as set forth in this  Section  7 are of  critical  importance  to this
Agreement.  Any breach by the Company of the provisions of this Section shall be
deemed a material breach of this Agreement.

         (d) The Company  agrees that it will not disclose,  disseminate  and/or
publicize  any of the terms of this  Agreement,  any of the factual  allegations
underlying  any claims the Company or Cole may have against one another,  any of
the underlying facts of this Agreement or negotiations regarding this Agreement,
directly or indirectly,  specifically or generally, to any person,  corporation,
association or  governmental  agency,  except (a) as required by law; (b) to the
extent necessary to report income to appropriate taxing  authorities;  or (c) in
response to an order

                                      -4-

<PAGE>

of a court or governmental  agency of competent  jurisdiction or subpoena issued
under proper authority;  provided that notice of receipt of such judicial order,
inquiry or subpoena shall be immediately  communicated  to Cole,  telephonically
and  confirmed  immediately  thereafter  in writing,  so that Cole will have the
opportunity to intervene and assert what rights he has to nondisclosure prior to
the response to the order, inquiry or subpoena.

         8. Tax Obligations. It is understood and agreed that Cole is liable for
all tax obligations,  if any, with respect to the payments and sums set forth in
Section 4 or 5, above.  The Company makes no warranty as to any tax consequences
of such payments,  and a determination  of the tax consequences of such payments
are the sole responsibility of Cole.

         9. Independent  Contractor Status.  With respect to Section 3 above, it
is expressly understood and agreed that Cole is an independent contractor and is
not  in  any  manner  an  agent  or  employee  of  the  Company  (or  any of its
subsidiaries), nor is Cole authorized or empowered to conduct business under the
name of, or for the account of, the Company (or any of its  subsidiaries)  or to
incur obligations of any kind, express or implied,  on behalf of the Company, or
to make any promise, warranty or representation on behalf of the Company (or any
of its subsidiaries) with respect to any of its or their products or services.

         10.  Indemnification.  With respect to Sections 2, 3 and 4 above,  Cole
shall  indemnify  the Company from and against any and all  expenses  (including
attorneys' fees),  judgments,  fines, claims, causes of action,  liabilities and
other amounts paid (whether in settlement or otherwise  actually and  reasonably
incurred) by the Company in connection  with such action,  suit or proceeding if
(i) the Company was made a part to any action,  suit or  proceeding by reason of
the fact that Cole rendered advice or services  pursuant to this Agreement,  and
(ii) Cole did not act in good faith and in a manner reasonably  believed by Bole
to be in or not opposed to the  interests of the Company,  and,  with respect to
any criminal  action or proceeding,  did not reasonably  believe his conduct was
lawful.

         11. Survival of Representations, Etc. All representations,  warranties,
and  agreements  made  herein  shall  survive  for a period  of five  (5)  years
following execution of this Agreement.

         12. Twenty-One Day Consideration  Period. Cole acknowledges that he has
been allowed  twenty-one  (21) days to consider this  Agreement and the releases
and waivers contained herein. Cole further acknowledges that he has been advised
to consult with counsel and that he has consulted  with counsel  regarding  this
Agreement.

         13. Seven Day Revocation Period. The parties agree that Cole shall have
a period of seven (7) days following the execution of this Agreement in which to
revoke  the  Agreement  and that the  Agreement  shall not become  effective  or
enforceable until the revocation period has expired (See Attachment B).

         14. Civil Code Section  1542.  Each party  expressly  waives all rights
under  Section  1542 of the Civil  Code of the State of  California,  which each
party understands provides as follows:

                                      -5-

<PAGE>

                  A general release does not extend to claims which the creditor
                  does not know or  suspect  to exist in his favor a the time of
                  executing  the  release,  which  if  known  by him  must  have
                  materially affected his settlement with the debtor.

         15. Miscellaneous.

         (a)  Binding  Effect;  Assignment.  This  Agreement  shall inure to the
benefit  of and be binding  upon the  parties  hereto,  their  respective  legal
representatives and successors. This Agreement may not be assigned.

         (b) Further Assurances;  Cooperation. Each party shall, upon reasonable
request  by the other  party,  execute  and  deliver  any  additional  documents
necessary  or  desirable  to  complete  the  transactions  contemplated  by this
Agreement, pursuant to and in the manner contemplated by this Agreement.

         (c) Entire Agreement.  This Agreement  constitutes the entire agreement
between the parties hereto and supersedes all prior arrangements, understandings
and agreements,  oral or written, between the parties hereto with respect to the
subject matter hereof.

         (d) Dispute Resolution.  Except as otherwise expressly provided in this
Agreement,  any civil  claim  which  arises out of or relates in any way to this
Agreement  shall be settled by binding and exclusive  arbitration in California,
in accordance with the following terms and procedures:

                  (i) The party with a civil  claim must  notify the other party
in writing by certified  mail within the times set forth by statute for filing a
civil claim of its desire to have the claim resolved by arbitration.

                  (ii) Upon notice of a timely  civil  claim,  the parties  will
agree upon an  arbitrator  or, if unable to agree,  will request a list from the
Federal Mediation and Conciliation Service from which the parties will alternate
strikes  until  only  one name  remains.  The last  remaining  name  will be the
arbitrator.

                  (iii)  The  arbitrator  shall  have  no  authority  to add to,
subtract from, or otherwise modify the terms of this Agreement or to make awards
beyond  those  provided  for by the statute or other cause of action under which
the claim arises.

                  (iv)  Any  party  to the  arbitration  may be  represented  by
counsel.  All decisions of the  arbitrator  made in accordance  with this policy
shall be final and conclusively binding upon the parties. The parties agree that
the  arbitrator's  award may be entered as a judgment by any court of  competent
jurisdiction, unless the award is vacated, modified or corrected.

                  (i)   Issues   of   procedure,   arbitrability,   appeal,   or
confirmation,  vacation or  correction of award shall be governed by the Federal
Arbitration Action, 9 U.S.C. ss.ss.1-16.

         (e)  Attorney  Fees.  In any  action or  proceeding  arising  out of or
related  to this  Agreement,  the  prevailing  party  shall be  entitled  to its
reasonable  attorney fees and related  costs,

                                      -6-

<PAGE>


including fees and costs  incurred  prior to formal  initiation of any action or
proceeding,  and including  fees and costs incurred for collecting or attempting
to collect any judgment or award.

         (f)  Amendments  and  Waivers.  This  Agreement  may not be modified or
amended  except by an instrument or  instruments  in writing signed by the party
against whom enforcement of any such  modification or amendment is sought.  Cole
may, by an instrument in writing,  waive compliance by the Company with any term
or  provision  of this  Agreement  on the part of the Company to be performed or
complied with. The Company may, by an instrument in writing, waive compliance by
Cole,  with any term or  provision  of this  Agreement on the part of Cole to be
performed or complied  with.  Any waiver of a breach of any term or provision of
this Agreement shall not be construed as a waiver of any subsequent breach.

         (g) Headings:  Severability.  The headings  contained in this Agreement
are for convenience of reference only and shall not affect the interpretation or
construction hereof. Any term or provision of this Agreement which is invalid or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such invalidity or  unenforceability  without rendering invalid
or  unenforceable  the  remaining  terms and  provisions  of this  Agreement  or
affecting  the validity or  enforceability  of any of the terms or provisions of
this Agreement in any other jurisdiction.  If any provision of this Agreement is
so broad as to be unenforceable,  such provision shall be interpreted to be only
so broad as is enforceable.

         (h)  Jurisdiction.  This  Agreement  shall be governed in all respects,
whether as to validity,  construction,  capacity,  performance, or otherwise, by
the laws of the State of California. The parties to this Agreement hereby submit
to the jurisdiction of the courts of the State of California.

         (i) Voluntary  Agreement.  This Agreement is freely entered into by the
undersigned parties upon advice of counsel.

         (j) Agreement not an Admission.  The parties  hereby  acknowledge  that
neither this Agreement nor the payments made hereunder nor the acceptance of the
same,  may be treated as an  admission of any legal  responsibility,  liability,
wrongdoing  or fault of any kind  whatsoever.  Such  responsibility,  liability,
wrongdoing and fault being expressly denied.

         (k)  Execution  in  Counterparts.  This  Agreement  may be  executed in
counterparts,  each of which shall be deemed an original  and all of which shall
be deemed to be one and the same instrument.

         (l)  Construction.  It is agreed and  understood  that the general rule
that  "ambiguities  are to be construed  against the drafter" shall not apply to
this  Agreement.  The parties agree that this Agreement is a part of negotiation
and was drafted by all parties.  In the event any language of this  Agreement is
found to be ambiguous,  each party shall have an opportunity to present evidence
as to the  actual  intent of the  parties  with  respect  to any such  ambiguous
language.

         (m) Amendments and Modifications. Any amendment or modification of this
Agreement must be in writing and signed by each party.

                                      -7-

<PAGE>


                           THE  SIGNATORIES  HAVE  CAREFULLY  READ  THIS  ENTIRE
                           AGREEMENT.  ITS CONTENTS HAVE BEEN FULLY EXPLAINED BY
                           THE  RESPECTIVE  ATTORNEYS.   THE  SIGNATORIES  FULLY
                           UNDERSTAND  THE  FINAL  AND  BINDING  EFFECT  OF THIS
                           AGREEMENT.  THE ONLY  PROMISES  MADE TO ANY SIGNATORY
                           ABOUT THIS AGREEMENT, AND TO SIGN THIS AGREEMENT, ARE
                           CONTAINED  IN THIS  AGREEMENT.  THE  SIGNATORIES  ARE
                           SIGNING  THIS  AGREEMENT  VOLUNTARILY.   PLEASE  READ
                           CAREFULLY:   THIS  SEVERANCE   AGREEMENT  AND  MUTUAL
                           RELEASE  INCLUDES A RELEASE OF ALL KNOWN AND  UNKNOWN
                           CLAIMS.

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


                                  DOUGLAS COLE


                                  -----------------------------
                                  Douglas Cole


                                  NETAMERICA.COM CORPORATION



                                  By:_______________________________

                                  Its:______________________________


                                       -8-
<PAGE>


                                  ATTACHMENT A

                              EMPLOYMENT AGREEMENT


<PAGE>


                                  ATTACHEMENT B

                                 NON-REVOCATION
                        AS OF THE DATE SHOWN ON THIS FORM


         By  signing  below,  I  verify  that I have  chosen  not to  revoke  my
agreement to and execution of the Severance  Agreement  and Mutual  Release.  My
signature  confirms  my  renewed  agreement  to the  terms  of  that  Agreement,
including the release and waiver of any and all claims relating to my employment
with  NetAmerica.com  Corporation  and its successors,  assigns,  and affiliated
companies, and/or the termination of that employment.


------------------------                    ---------------------------
Signature*                                  Date


*Do not sign,  date, or return this document until seven (7) days after you sign
the Severance  Agreement and Mutual Release.  The Severance Agreement was signed
on __________________.