Document:

Exhibit
10.19

POWER-ONE,
INC.

CHANGE IN CONTROL SEVERANCE AGREEMENT

THIS
CHANGE IN CONTROL SEVERANCE AGREEMENT (this “Agreement”) is
made and entered into by and between Power-One, Inc., a Delaware corporation
(hereinafter referred to as the “Company”) and                                
(hereinafter referred to as the “Executive”).

RECITALS

A.            The Board of Directors
of the Company has approved the Company entering into a severance agreement
with the Executive.

B.            The Executive is a key
executive of the Company.

C.            Should the possibility
of a Change in Control of the Company arise, the Board believes it is
imperative that the Company and the Board be able to rely upon the Executive to
continue in his position, and that the Company should be able to receive and
rely upon the Executive’s advice, if requested, as to the best interests of the
Company and its stockholders without concern that the Executive might be
distracted by the personal uncertainties and risks created by the possibility
of a Change in Control.

D.            Should the possibility
of a Change in Control arise, in addition to his regular duties, the Executive
may be called upon to assist in the assessment of such possible Change in
Control, advise management and the Board as to whether such Change in Control
would be in the best interests of the Company and its stockholders, and to take
such other actions as the Board might determine to be appropriate.

E.             This Agreement
provides the benefits the Executive will be entitled to receive upon certain
terminations of employment in connection with Change in Control from and after
the Effective Date and supersedes and negates any and all previous agreements
with respect to such benefits, including, without limitation, any previous
Change in Control Severance Agreement by and between the Executive and the
Company (the “Prior Change in Control Agreement”).

NOW
THEREFORE, to help assure the Company that it will have the
continued dedication of the Executive and the availability of his advice and
counsel notwithstanding the possibility, threat, or occurrence of a Change in
Control of the Company, and to induce the Executive to remain in the employ of
the Company in the face of these circumstances and for other good and valuable
consideration, the Company and the Executive agree as follows:

Article 1.               Term

This Agreement
shall be effective as of                           
(the “Effective Date”).  This Agreement
will continue in effect through the first anniversary of the Effective
Date.  However, at the end of such one
(1) year period and, if extended, at the end of each additional year
thereafter, the term of this Agreement shall be extended automatically for 

 1
 

one (1) additional year,
unless the Committee delivers written notice at least three (3) months prior to
the end of such term (or extended term, as the case may be) to the Executive
that this Agreement will not be extended, and if such notice is timely given
this Agreement will terminate at the end of the term then in progress.

Notwithstanding
the foregoing, in the event a Change in Control occurs during the original or
any extended term of this Agreement, this Agreement will remain in effect for
the longer of: (i) twenty-four (24) months beyond the month in which such
Change in Control occurred; or (ii) until all obligations of the Company
hereunder have been fulfilled, and until all benefits required hereunder have
been paid to the Executive.  For purposes
of clarity, subject to Section 4.1, benefits shall be payable to the Executive
under this Agreement only with respect to a single Change in Control of the
Company.  Accordingly, no Change in
Control after the first Change in Control shall be considered for purposes of
this Agreement.

Article 2.               ERISA

This Agreement is
intended as part of a severance program of the Company that constitutes (i) a
pension plan within the meaning of Section 3(2) of ERISA, and (ii) an unfunded
pension plan maintained by the Company for a select group of management or
highly compensated employees within the meaning of Department of Labor Regulation
2520.104-23 promulgated under ERISA, and Sections 201, 301, and 401 of ERISA.

Article 3.               Definitions

Whenever used in
this Agreement, the following terms shall have the meanings set forth below
and, when the meaning is intended, the initial letter of the word is
capitalized:

(a)                                  “Accrued
Obligations” means (i) any Base Salary that had accrued but had not been paid
(including any accrued and unpaid vacation time) prior to the Severance Date,
and (ii) any bonus earned as of the Severance Date with respect to the fiscal
year preceding the year in which the Severance Date occurs (if the Executive
was employed by the Company on the last day of that fiscal year) that had not
previously been paid.

(b)                                 “Agreement”
means this Change in Control Severance Agreement.

(c)                                  “Base
Salary” means the salary of record paid to the Executive by the Company as
annual salary (whether or not deferred), but excludes amounts received under
incentive or other bonus plans.

(d)                                 “Beneficial
Owner” and “Beneficial Ownership” shall have the meaning ascribed to such terms
in Rule 13d-3 of the General Rules and Regulations under the Exchange Act.

(e)                                  “Beneficiary”
means the persons or entities designated or deemed designated by the Executive
pursuant to Section 11.2.

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(f)                                    “Board”
means the Board of Directors of the Company.

(g)                                 “Cause”
means, as reasonably determined by a majority of the Continuing Directors (as
defined in Section 3(h)(ii) below) then in office (excluding the Executive, if
he is then a Continuing Director) based on the information then known to them,
the occurrence of either or both of the following:

(i)                                     the
Executive’s conviction for committing an act of fraud, embezzlement, theft, or
other act constituting a felony (other than traffic related offenses or as a
result of vicarious liability); or

(ii)                                  the
willful engaging by the Executive in misconduct that is significantly injurious
to the Company.  However, no act or
failure to act on the Executive’s part shall be deemed to be “willful” if the
Executive reasonably believed in good faith that such acts or omissions were in
the best interests of the Company.

If there are no Continuing Directors then in office, the determination
of Cause shall be made by a majority of the independent directors (as
determined under the listing requirements of the Nasdaq Stock Market) or, if
there are no independent directors then in office, by the full Board.

(h)                                 “Change
in Control” means any of the following:

(i)                                     The
acquisition by any individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Exchange Act (a “Person”)) of Beneficial Ownership
of twenty percent (20%) or more of either (1) the then-outstanding shares of
common stock of the Company (the “Outstanding
Company Common Stock”) or (2) the combined voting power of the
then-outstanding voting securities of the Company entitled to vote generally in
the election of directors (the “Outstanding
Company Voting Securities”); provided, however, that, for
purposes of this clause (i), the following acquisitions shall not constitute a
Change in Control: (A) any acquisition directly from the Company, (B) any
acquisition by the Company, (C) any acquisition by any employee benefit plan
(or related trust) sponsored or maintained by the Company or any affiliate of
the Company or a successor, and (D) any acquisition by any entity pursuant to a
transaction that complies with clauses (1), (2) and (3) of Section 3(h)(iii)
below; further provided, that, creditors of the Company who become
stockholders of the Company in connection with any bankruptcy of the Company
under the laws of the United States shall not, by virtue of such bankruptcy, be
deemed a “group” or a single Person for the purposes of this clause (i) (provided
that any one of such creditors may trigger a Change in Control pursuant to this
clause (i) if such 

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creditor’s
ownership of Company securities equals or exceeds the foregoing threshold);

(ii)                                  On
any day after the Effective Date (the “Measurement Date”) Continuing Directors
cease for any reason to constitute either: (A) if the Company does not have a
Parent, a majority of the Board; or (B) if the Company has a Parent, a majority
of the Board of Directors of the Controlling Parent.  A director is a “Continuing Director” if he
or she either:

(1)                                  was
a member of the Board on the applicable Initial Date (an “Initial Director”);
or

(2)                                  was
elected to the Board (or the Board of Directors of the Controlling Parent, as
applicable), or was nominated for election by the Company’s or the Controlling
Parent’s stockholders, by a vote of at least two-thirds (2/3) of the Initial
Directors then in office.

A member of the
Board (or Board of Directors of the Controlling Parent, as applicable) who was
not a director on the applicable Initial Date shall be deemed to be an Initial
Director for purposes of clause (2) above if his or her election, or nomination
for election by the Company’s or the Controlling Parent’s stockholders, was
approved by a vote of at least two-thirds (2/3) of the Initial Directors
(including directors elected after the applicable Initial Date who are deemed
to be Initial Directors by application of this provision) then in office; provided
that such member of the Board shall not be deemed to be an Initial Director if
his or her initial assumption of office occurs as a result of an actual or
threatened election contest with respect to the election or removal of
directors or other actual or threatened solicitation of proxies or consents by
or on behalf of a Person other than the Board.

“Initial Date”
means the later of (1) the Effective Date or (2) the date that is two (2) years
before the Measurement Date.

(iii)                               Consummation of a
reorganization, merger, statutory share exchange or consolidation or similar
corporate transaction involving the Company or any of its subsidiaries, a sale
or other disposition of all or substantially all of the assets of the Company,
or the acquisition of assets or stock of another entity by the Company or any
of its subsidiaries (each, a “Business Combination”), in each case unless,
following such Business Combination, (1) all or substantially all of the
individuals and entities that were the Beneficial Owners of the Outstanding
Company Common Stock and the Outstanding Company Voting 

 4
 

Securities
immediately prior to such Business Combination Beneficially Own, directly or
indirectly, more than sixty percent (60%) of 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 such Business Combination (including,
without limitation, an entity that, as a result of such transaction, is a
Parent of the Company or the successor of the Company) in substantially the
same proportions as their ownership immediately prior to such Business
Combination of the Outstanding Company Common Stock and the Outstanding Company
Voting Securities, as the case may be, (2) no Person (excluding any entity
resulting from such Business Combination or a Parent of the Company or any
successor of the Company or any employee benefit plan (or related trust) of the
Company or such entity resulting from such Business Combination or a Parent of
the Company or the successor entity) Beneficially Owns, directly or indirectly,
twenty percent (20%) or more of, respectively, the then-outstanding shares of
common stock of the entity resulting from such Business Combination or the
combined voting power of the then-outstanding voting securities of such entity,
except to the extent that the ownership in excess of twenty percent (20%)
existed prior to the Business Combination, and (3) a Change in Control is not
triggered pursuant to clause (ii) above with respect to the Company (including
any successor entity) or any Parent of the Company (or the successor entity).

Notwithstanding
the foregoing, in no event shall a transaction or other event that occurred
prior to the Effective Date constitute a Change in Control.  Notwithstanding anything to the contrary in
clause (iii) above, a change in ownership of the Company resulting from
creditors of the Company becoming stockholders of the Company in connection
with any bankruptcy of the Company under the laws of the United States shall
not trigger a Change in Control pursuant to clause (iii) above.

(i)                                     “Code”
means the United States Internal Revenue Code of 1986, as amended.

(j)                                     “Committee”
means the Compensation Committee of the Board.

(k)                                  “Company”
means Power-One, Inc., a Delaware corporation (including, for purposes of
determining whether the Executive is employed by the Company, any and all
subsidiaries specified by the Committee), or any successor thereto as provided
in Article 10.

(l)                                     “Controlling
Parent” means the Company’s Parent so long as a majority of the voting stock or
voting power of that Parent is not Beneficially Owned, 

 5
 

directly
or indirectly through one or more subsidiaries, by any other Person.  In the event that the Company has more than
one “Parent,” then “Controlling Parent” shall mean the Parent of the Company
the majority of the voting stock or voting power of which is not Beneficially
Owned, directly or indirectly through one or more subsidiaries, by any other
Person.

(m)                               “Disability”
means disability as defined in the Company’s long-term disability plan in which
the Executive participates at the relevant time or, if the Executive does not
participate in a Company long-term disability plan at the relevant time, such
term shall mean a “permanent and total disability” within the meaning of
Section 22(e)(3) of the Code.

(n)                                 “Effective
Date” has the meaning given to such term in Article 1 hereof.

(o)                                 “ERISA”
means the Employee Retirement Income Security Act of 1974, as amended.

(p)                                 “Exchange
Act” means the United States Securities Exchange Act of 1934, as amended.

(q)                                 “Executive”
means the individual identified in the first sentence, and on the signature
page, of this Agreement.

(r)                                    “Good
Reason” means, without the Executive’s express written consent, the occurrence
of any one or more of the following:

(i)                                     A
material reduction in the nature or status of the Executive’s authorities,
duties, and/or responsibilities, (when such authorities, duties, and/or
responsibilities are viewed in the aggregate) from their level in effect on the
day immediately prior to the start of the Protected Period, other than an
insubstantial and inadvertent act that is remedied by the Company promptly
after receipt of notice thereof given by the Executive.  In addition, Good Reason will be deemed to
exist if the Executive’s reporting relationship is diminished from the
Executive’s reporting relationship in effect on the day immediately prior to
the start of the Protected Period (for example, if the Executive reports
directly to the Company’s Chief Executive Officer on the day immediately prior
to the start of the Protected Period, Good Reason will be deemed to exist if
the Executive’s reporting relationship is changed such that the Executive no
longer reports directly to the Chief Executive Officer of the Company or any
Parent or directly to the Board of Directors of the Company or any
Parent).  A mere change in the Executive’s
title by itself shall not constitute Good Reason, provided that there is not a
material reduction in the nature or status of the Executive’s authorities,
duties, and/or responsibilities as contemplated above.

 6
 

In
addition, the change in status of the Company from a publicly-traded company to
a company the securities of which are not publicly-traded (including any
related termination of the Company’s reporting obligations under the Exchange
Act) shall not, in and of itself, constitute Good Reason or a material
reduction in the nature or status of the Executive’s authorities, duties,
and/or responsibilities.

(ii)                                  A
reduction by the Company in the Executive’s Base Salary as in effect immediately
prior to the start of the Protected Period or as the same shall be increased
from time to time.

(iii)                               A
significant reduction by the Company of the Executive’s aggregate incentive
opportunities under the Company’s short and/or long-term incentive programs, as
such opportunities exist immediately prior to the start of the Protected
Period, or as such opportunities may be increased from time to time.  For this purpose, a significant reduction in
the Executive’s incentive opportunities shall be deemed to have occurred in the
event his incentive opportunity levels and/or the degree of probability of
attainment of such incentive opportunities are materially diminished by the
Company from the levels and probability of attainment that existed immediately
prior to the start of the Protected Period. 
If the Company has a Parent, a significant reduction of the Executive’s
aggregate incentive opportunities under the Company’s short and/or long-term
incentive programs shall not be deemed to have occurred if there is an across-the-board
reduction in or elimination of any such program which similarly affects all
executives of the Company and the reduced or eliminated incentives are replaced
by a similar program of a Parent.

(iv)                              A
significant reduction in the Executive’s relative level of coverage and
accruals under the Company’s employee benefit and/or retirement plans,
policies, practices, or arrangements in which the Executive participates
immediately prior to the start of the Protected Period, both in terms of the
amount of benefits provided, and amounts accrued.  For this purpose, the Company may eliminate
and/or modify existing programs and coverage levels; provided, however,
that the Executive’s level of coverage under all such programs must be at least
as great as is provided to executives who have the same or lesser levels of
reporting responsibilities within the Company’s organization.

(v)                                 The
failure of the Company to obtain a satisfactory agreement from any successor to
the Company to assume and agree to perform this Agreement, as contemplated in
Article 10.

 7
 

(vi)                              The
Executive is informed by the Company that his principal place of employment for
the Company will be relocated to a location that is greater than thirty-five
(35) miles away from the Executive’s principal place of employment for the
Company at the start of the corresponding Protected Period.

The Executive’s right to terminate employment for Good Reason shall not
be affected by the Executive’s incapacity due to physical or mental
illness.  The Executive’s continued
employment shall not constitute a consent to, or a waiver of rights with
respect to, any circumstances constituting Good Reason herein; provided,
however, that if the Executive does not terminate employment and claim
Good Reason for such termination within ninety (90) days after the Executive
has knowledge of an event or circumstance that would constitute Good Reason,
then the Executive shall be deemed to have waived his right to claim Good
Reason as to that specific fact or circumstance (except that the event or
circumstance may be considered for purposes of determining whether any
subsequent, separate, event or circumstance constitutes Good Reason; for
example, and without limitation, a reduction in the Executive’s authorities
that is deemed waived by operation of this clause may be considered for
purposes of determining whether any subsequent reduction in the Executive’s
authorities (when taken into consideration with the first reduction)
constitutes a “material reduction” in the nature or status of the Executive’s
authorities from their level in effect on the day immediately prior to the
start of the Protected Period).

(s)                                  “Parent”
means an entity that Beneficially Owns a majority of the voting stock or voting
power of the Company, or all or substantially all of the Company’s assets,
directly or indirectly through one or more subsidiaries.

(t)                                    “Qualifying
Termination” has the meaning given to such term in Section 4.2(a).

(u)                                 “Severance
Benefits” means the payments and/or benefits provided in Section 4.3.

(v)                                 “Severance
Date” means the date on which the Executive’s employment with the Company and
its subsidiaries terminates for any reason (whether or not as a result of a
Qualifying Termination).

Article 4.               Severance Benefits

4.1.       Right
to Severance Benefits.  The Executive
shall be entitled to receive from the Company Severance Benefits, as described
in Section 4.3, if the Executive has incurred a Qualifying Termination.

The Executive shall not
be entitled to receive Severance Benefits if his employment terminates
(regardless of the reason) before the Protected Period (as such 

 8
 

term is defined in
Section 4.2(c)) corresponding to a Change in Control of the Company or more
than twenty-four (24) months after the date of a Change in Control of the
Company.

4.2.       Qualifying
Termination.

(a)                                  Subject
to Sections 4.2(d), 4.4, and 4.5, the occurrence of any one or more of the
following events within the Protected Period corresponding to a Change in
Control of the Company, or within twenty-four (24) calendar months following
the date of a Change in Control of the Company shall constitute a “Qualifying
Termination”:

(i)                                     An
involuntary termination of the Executive’s employment by the Company for
reasons other than Cause;

(ii)                                  A
voluntary termination of employment by the Executive for Good Reason;

(iii)                               A failure or refusal by
a successor company to assume by written instrument the Company’s obligations
under this Agreement, as required by Article 10; or

(iv)                              A
repudiation or breach by the Company or any successor company of any of the
provisions of this Agreement.

For purposes of determining any benefits payable hereunder, the date on
which the succession referred to in clause (iii) becomes effective and the date
on which the repudiation or breach referred to in clause (iv) occurs, as
applicable, shall be deemed to be the Executive’s Severance Date.

(b)                                 If
more than one of the events set forth in Section 4.2(a) occurs, such events
shall constitute but a single Qualifying Termination and the Executive shall be
entitled to but a single payment of the Severance Benefits.

(c)                                  The
“Protected Period” corresponding to a Change in Control of the Company shall be
a period of time determined in accordance with the following:

(i)                                     If
the Change in Control is triggered by a tender offer for shares of the Company’s
stock or by the offeror’s acquisition of shares pursuant to such a tender
offer, the Protected Period shall commence on the date of the initial tender
offer and shall continue through and including the date of the Change in
Control; provided that in no case will the Protected Period commence
earlier than the date that is six (6) months prior to the Change in Control.

 9
 

(ii)                                  If
the Change in Control is triggered by a merger, consolidation, or
reorganization of the Company with or involving any other corporation, the
Protected Period shall commence on the date that serious and substantial
discussions first take place to effect the merger, consolidation, or
reorganization and shall continue through and including the date of the Change
in Control; provided that in no case will the Protected Period commence
earlier than the date that is six (6) months prior to the Change in Control.

(iii)                               In the case of any
Change in Control not described in clause (i) or (ii) above, the Protected
Period shall commence on the date that is six (6) months prior to the Change in
Control and shall continue through and including the date of the Change in
Control.

(d)                                 Notwithstanding
anything else contained herein to the contrary, the Executive’s termination of
employment on account of reaching mandatory retirement age, as such age may be
defined from time to time in policies adopted by the Company prior to the
commencement of the Protected Period, and consistent with applicable law, shall
not be a Qualifying Termination.

(e)                                  Notwithstanding
anything else contained herein to the contrary (other than those provisions
that contain an express exception to this Section 4.2(e)), the Executive’s
Severance Benefits under this Agreement shall be reduced by the severance
benefits (including, without limitation, any other change-in-control severance
benefits and any other severance benefits generally) that the Executive may be
entitled to under any other plan, program, agreement or other arrangement with
the Company (including, without limitation, any such benefits provided for by
an employment agreement).  For purposes
of the foregoing, any cash severance benefits payable to the Executive under
any other plan, program, agreement or other arrangement with the Company shall
offset the cash severance benefits otherwise payable to the Executive under
this Agreement on a dollar-for-dollar basis. 
For purposes of the foregoing, non-cash severance benefits to be
provided to the Executive under any other plan, program, agreement or other
arrangement with the Company shall offset any corresponding benefits otherwise
to be provided to the Executive under this Agreement or, if there are no
corresponding benefits otherwise to be provided to the Executive under this
Agreement, the value of such benefits shall offset the cash severance benefits
otherwise payable to the Executive under this Agreement on a dollar-for-dollar
basis.  If the amount of other benefits
to be offset against the cash severance benefits otherwise payable to the
Executive under this Agreement in accordance with the preceding two sentences
exceeds the amount of cash severance benefits otherwise payable to the
Executive under this Agreement, then the excess may be used to offset other
non-cash severance benefits otherwise to be provided to the Executive under
this Agreement on a dollar-for-dollar basis. 
For 

 10
 

purposes of this paragraph, the Committee shall
reasonably determine the value of any non-cash benefits.

4.3.       Description
of Severance Benefits.  In the event
that the Executive becomes entitled to receive Severance Benefits, as provided
in Sections 4.1 and 4.2, the Company shall, subject to Section 4.7, pay to the
Executive and provide him with the following:

(a)                                  An
amount equal to                 
times the Executive’s highest annualized rate of Base Salary in effect at any
time after the commencement of the Protected Period and on or before the
Executive’s Severance Date.

(b)                                 An
amount equal to                 
times the average of the annual bonuses paid by the Company to the Executive
for the three (3) full fiscal years of the
Company immediately preceding Executive’s Severance Date.

(c)                                  Payment
or reimbursement of the Executive’s premiums charged to continue medical
coverage pursuant to the Consolidated Omnibus Budget Reconciliation Act (“COBRA”),
at the same or reasonably equivalent medical coverage for the Executive (and,
if applicable, the Executive’s eligible dependents) as in effect immediately
prior to the Executive’s Severance Date, to the extent that the Executive
elects such continued coverage; provided that the Company’s obligation to make
any payment or reimbursement pursuant to this Section 4.3(c) shall cease upon
the first to occur of (a) the                 
anniversary of the Severance Date; (b) the Executive’s death; (c) the date the
Executive becomes eligible for coverage under the health plan of a future
employer; or (d) the date the Company or its affiliates ceases to offer any
group medical coverage to its active executive employees or the Company is
otherwise under no obligation to offer COBRA continuation coverage to the
Executive.

(d)                                 A
lump-sum cash amount equal to the portion of the Executive’s account under the
Company’s qualified retirement plan (including, without limitation, any 401(k)
matching contributions) that has not become vested under the terms of such plan
as of the Severance Date.

(e)                                  A
lump-sum cash amount equal to the portion of the Executive’s account under any
Company nonqualified deferred compensation or other supplemental retirement
plan that has not become vested under the terms of such plan as of the
Severance Date.

(f)                                    The
Company shall pay or reimburse the Executive for up to $15,000 of outplacement
services obtained by the Executive during the twelve (12) month period
following the Effective Date of Termination.

4.4.       Termination
Due to Disability, Death or Retirement. 
Termination of the Executive’s employment due to the Executive’s death
or Disability is not a Qualifying Termination, and upon any such termination,
the Executive shall be entitled to payment

 11

only of the Accrued
Obligations.  However, if immediately
prior to the condition or event leading to, or the commencement of, the
Disability of the Executive (but not the death of the Executive), the Executive
would have experienced a Qualifying Termination if he had terminated at that
time, then upon termination of his employment for Disability he shall be
entitled to the benefits provided by this Agreement for a Qualifying
Termination.  A voluntary termination of
employment by the Executive due to the Executive’s retirement is not a
Qualifying Termination, and upon any such termination, the Executive shall be
entitled to payment only of the Accrued Obligations.  However, if immediately prior to the
Executive’s retirement (but not death), the Executive would have experienced a
Qualifying Termination if he had terminated at that time, then upon his
retirement he shall (subject to Section 4.2(d)) be entitled to the benefits
provided by this Agreement for a Qualifying Termination.

4.5.       Termination
for Cause or by the Executive Other Than for Good Reason Termination of the
Executive’s employment by the Company for Cause or by the Executive other than
for Good Reason does not constitute a Qualifying Termination.  Upon any such termination, the Executive
shall be entitled to payment only of the Accrued Obligations.

4.6.       Notice
of Termination.  Any termination of
the Executive’s employment by the Company for Cause or by the Executive for
Good Reason shall be communicated by a Notice of Termination.  For purposes of this Agreement, a “Notice of
Termination” shall mean a written notice which shall indicate the specific
termination provision in this Agreement relied upon, and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis for termination
of the Executive’s employment under the provision so indicated.

4.7.         Release;
Exclusive Remedy.

(a)                                  This Section 4.7
shall apply notwithstanding anything else contained in this Agreement or any
stock option, restricted stock or other equity-based award agreement to the
contrary.  As a condition precedent to
any Company obligation to the Executive pursuant to Section 4.3 or any
obligation to accelerate vesting of any equity-based award in connection with
the termination of the Executive’s employment, (i) the Executive shall, upon or
promptly following his last day of employment with the Company, provide the
Company with a valid, executed general release agreement in a form acceptable
to the Company, and such release agreement shall have not been revoked by the
Executive pursuant to any revocation rights afforded by applicable law, and
(ii) the Executive shall have complied with any and all covenants set forth in
Article 8 hereof.  The Company shall have
no obligation to make any payment to the Executive pursuant to Section 4.3 (or
otherwise accelerate the vesting of any equity-based award in the circumstances
as otherwise contemplated by the applicable award agreement) unless and until
the release agreement contemplated by this Section 4.7 becomes irrevocable by
the Executive in 

 12
 

accordance with all
applicable laws, rules and regulations, or at any time after a breach by
the Executive of any covenant set forth in Article 8.

(b)                                 The
Executive agrees that the general release agreement described in Section 4.7(a)
will require that the Executive acknowledge, as a condition to the payment of
any benefits under Section 4.3 that the payments contemplated by Section 4.3
(and any applicable acceleration of vesting of an equity-based award in
accordance with the terms of such award in connection with the termination of
the Executive’s employment) shall constitute the exclusive and sole remedy for
any termination of his employment, and the Executive will be required to
covenant, as a condition to receiving any such payment (and any such
accelerated vesting), not to assert or pursue any other remedies, at law or in
equity, with respect to any termination of employment.  The Company and Executive acknowledge and
agree that there is no duty of the Executive to mitigate damages under this
Agreement.  All amounts paid to the
Executive pursuant to Section 4.3 shall be paid without regard to whether the
Executive has taken or takes actions to mitigate damages.

4.8.         Acceleration of Equity
Awards on Change in Control.  Notwithstanding
any other provision herein or in any applicable stock incentive plan document
or award agreement, each stock option, restricted stock, or other equity or
equity-based award granted by the Company to the Executive, to the extent such
award is outstanding and unvested as of the date of a Change in Control, shall
automatically become fully vested as of such Change in Control date.  In the event that the Executive has a
Qualifying Termination during the Protected Period related to a Change in Control
and any stock option, restricted stock, or other equity or equity-based award
(or portion thereof) that had not vested as of the Severance Date was cancelled
or otherwise terminated upon or prior to the date of the related Change in
Control solely as a result of such Qualifying Termination, such award shall be
reinstated and shall automatically become fully vested and, in the case of
stock options or similar awards, the Executive shall be given a reasonable
opportunity to exercise such accelerated portion of the option or other award
before it terminates.

Article
5.                                            Form
and Timing of Severance Benefits; Tax Withholding;

5.1.         Form
and Timing of Severance Benefits. 
The Severance Benefits described in Sections 4.3(a), 4.3(b), 4.3(d) and
4.3(e) shall be paid in cash to the Executive in a single lump sum as soon as
practicable following the Severance Date, but in no event beyond thirty (30)
days from such date.  Notwithstanding the
foregoing, payment of any and all Severance Benefits are subject to the provisions
of Section 4.7 and Section 11.10.

5.2.         Withholding
of Taxes.  Notwithstanding anything else herein to the contrary, the Company may
withhold (or cause there to be withheld, as the case may be) from any amounts
otherwise due or payable under or pursuant to this Agreement such 

 13
 

federal,
state and local income, employment, or other taxes as may be required to be
withheld pursuant to any applicable law or regulation.

Article 6.               Section 280G.

6.1.       Possible
Cut-Back.  Notwithstanding anything
contained in this Agreement to the contrary, to the extent that any payment or
distribution of any type to or for the Executive by the Company or any of its
affiliates, whether paid or payable or distributed or distributable pursuant to
the terms of this Agreement or otherwise (including, without limitation, any
accelerated vesting of stock options or other equity-based awards granted by
the Company pursuant to this Agreement or otherwise) (collectively, the “Total
Payments”) is or will be subject to the excise tax imposed under Section 4999
of the Code (which reference includes, for purposes of this Agreement, any
similar successor provision to Section 4999), then the Total Payments shall be
reduced (but not below zero) so that the maximum amount of the Total Payments (after
reduction) shall be one dollar ($1.00) less than the amount which would cause
the Total Payments to be subject to the excise tax imposed by Section 4999 of
the Code; provided that such reduction to the Total Payments shall be made only
if the total after-tax benefit to the Executive is greater after giving effect
to such reduction than if no such reduction had been made.  Unless the Executive shall have given prior
written notice to the Company to effectuate a reduction in the Total Payments
if such a reduction is required, the Company shall reduce or eliminate the
Total Payments by first reducing or eliminating any cash severance benefits,
then by reducing or eliminating any accelerated vesting of stock options, then
by reducing or eliminating any accelerated vesting of other equity-based
awards, then by reducing or eliminating any other remaining Total
Payments.  The preceding provisions of
this Section 6.1 shall take precedence over the provisions of any other plan,
arrangement or agreement governing the Executive’s rights and entitlements to
any benefits or compensation; provided, however, that if the
Executive is a party to a written employment or other written agreement with
the Company that contains express provisions for a so-called “gross-up” payment
to the extent that excise taxes are imposed under Section 4999 of the Code, the
Section 280G and/or Section 4999 provisions of such employment or other
agreement shall control.

6.2.       Determination.  Any determination that Total Payments to the
Executive must be reduced or eliminated in accordance with the forgoing
provisions of this Section 6 and the assumptions to be utilized in arriving at
such determination, shall be made by a nationally recognized accounting firm or
consulting firm with experience in such matters selected by the Company (the “Accounting
Firm”), which shall provide detailed supporting calculations both to the
Company and the Executive within fifteen (15) business days after the date such
calculation is requested by the Company or the Executive.  In the event that the Accounting Firm is
serving as accountant or auditor for the individual, entity or group effecting
the Change in Control, the Executive shall appoint another nationally
recognized accounting or consulting firm with experience in such matters to
make the determinations required hereunder (which accounting firm shall then be
referred to as the Accounting Firm hereunder). 
All fees and expenses of the Accounting Firm shall be borne solely by
the Company.  If a reduction or elimination
of Total Payments to the Executive in accordance with the foregoing is
necessary based on 

 14
 

the Accounting Firm’s
determination, the Accounting Firm shall furnish the Executive with a written
opinion that failure to limit the amount of the Total Payments would result in
the imposition of a tax under Section 4999 of the Code as well as the estimates
of the Executive’s after-tax net benefits before and after giving effect to
such a reduction.  Any determination by
the Accounting Firm shall be binding upon the Company and the 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 Total Payments
to the Executive which will not have been made by the Company should have been
made (“Underpayment”).  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 the Executive.  In the event that any
Total Payment made to the Executive shall be determined by the Accounting Firm
to result in the imposition of any tax under Section 4999 of the Code and a
reduction of Total Payments was otherwise required pursuant to Section 6.1 to
avoid the imputation of such tax, the Executive shall promptly repay the amount
of such excess to the Company together with interest on such amount (at the
same rate as is applied to determine the present value of payments under
Section 280G or any successor thereto), from the date the reimbursable payment
was received by the Executive to the date the same is repaid to the Company.

Article 7.               The Company’s
Payment Obligation

7.1.       Payment
of Obligations Absolute.  Except as
provided in Sections 4.2(e), 4.7, 5.2 and in Article 6, the Company’s
obligation to make the payments and the arrangements provided for herein shall
be absolute and unconditional, and shall not be affected by any circumstances,
including, without limitation, any offset, counterclaim, recoupment, defense,
or other right which the Company may have against the Executive or anyone
else.  All amounts payable by the Company
hereunder shall be paid without notice or demand.  Each and every payment made hereunder by the
Company shall be final, and the Company shall not seek to recover all or any
part of such payment from the Executive or from whoever may be entitled
thereto, for any reasons whatsoever, except as otherwise provided in Article 6
or Article 9.

The Executive shall not
be obligated to seek other employment in mitigation of the amounts payable or
arrangements made under any provision of this Agreement, and the obtaining of
any such other employment shall in no event effect any reduction of the Company’s
obligations to make the payments and arrangements required to be made under
this Agreement, except to the extent provided in Section 4.3(c).

7.2.       Contractual
Right to Benefits.  This Agreement
establishes and vests in the Executive a contractual right to the benefits to
which he or she is entitled hereunder. 
The Company expressly waives any ability, if possible, to deny liability
for any breach of its contractual commitment hereunder upon the grounds of lack
of consideration, accord and satisfaction or any other defense.  In any dispute arising after a Change in
Control as to whether the Executive is entitled to benefits under this
Agreement, there shall be a presumption that the Executive is entitled to such
benefits and the burden of proving otherwise shall be on the Company.  However, nothing herein contained shall
require or be deemed to require, or prohibit or be deemed to prohibit, the
Company to segregate, 

 15
 

earmark, or otherwise set
aside any funds or other assets, in trust or otherwise, to provide for any
payments to be made or required hereunder.

7.3.       Pension
Plans; Duplicate Benefits.  All
payments, benefits and amounts provided under this Agreement shall be in
addition to and not in substitution for any pension rights under the Company’s
tax-qualified pension plan, supplemental retirement plans, nonqualified
deferred compensation plans, bonus plans, and any disability, workers’
compensation or other Company benefit plan distribution that the Executive is
entitled to as of his Severance Date. 
Notwithstanding the foregoing, this Agreement shall not create an
inference that any duplicate payments shall be required.  No payments made pursuant to this Agreement
shall be considered compensation for purposes of any such benefit plan.  Payment of the Executive’s Accrued
Obligations shall be deemed to not duplicate any benefit contemplated by this
Agreement and shall not result in an offset pursuant to Section 4.2(e).

Article 8.               Trade Secrets;
Non-Solicitation and Non-Disparagement

By executing this
Agreement and again by receiving any benefits provided for by this Agreement,
the Executive agrees follows:

(a)                                  In
the course of performing his duties for the Company, the Executive will
receive, and acknowledges that he or she has received, confidential
information, including without limitation, information not available to
competitors relating to the Company’s existing and contemplated financial
plans, products, business plans, operating plans, research and development
information, and customer information, all of which is hereinafter referred to
as “Trade Secrets.”  The Executive agrees
that he or she will not, either during his employment or subsequent to the
termination of his employment with the Company, directly or indirectly
disclose, publish or otherwise divulge any Trade Secret of the Company or any
of its affiliates to anyone outside the Company, or use such information in any
manner which would adversely affect the business or business prospects of the
Company, without prior written authorization from the Company to do so.  The Executive further agrees that if, at the
time of the termination of his employment with the Company, he is in possession
of any documents or other written or electronic materials constituting,
containing or reflecting Trade Secrets, the Executive will return and surrender
all such documents and materials to the Company upon leaving its employ.  The restrictions and protection provided for
in this Section 8(a) shall be in addition to any protection afforded to Trade
Secrets by law or equity and in addition to any protection afforded to Trade
Secrets by any other agreement between the Executive and the Company.

(b)                                 For
a period of one year following the termination of the Executive’s employment
with the Company, the Executive shall not, directly or indirectly through, aid,
assistance or counsel, on the Executive’s own behalf or on behalf of another
person or entity (i) contact, solicit or offer 

 16
 

to
hire any person who was, within a period of six months prior to the termination
of the Executive’s employment with the Company, employed by any member of the
Company Group, or (ii) by any means issue or communicate any private or public
statement that may be critical or disparaging of any member of the Company
Group, or any of their respective products, services, officers, directors or
employees.

(c)                                  The
Executive represents that he (i) is familiar with the foregoing covenants,
(ii) is fully aware of his obligations hereunder, (iii) agrees to the
reasonableness of the length of time, scope and geographic coverage of the foregoing
covenants, and (iv) agrees that such covenants are necessary to protect the
Company’s confidential and proprietary information, good will, stable
workforce, and customer relations.

(d)                                 The Executive agrees that a breach of any of
the covenants in this Article 8 would cause immediate and irreparable harm to
the Company that would be difficult or impossible to measure, and that damages
to the Company for any such injury would therefore be an inadequate remedy for
any such breach.  Accordingly, the Executive
agrees that if he breaches any term of this Article 8, the Company shall be
entitled, in addition to and without limitation upon all other remedies the
Company may have under this Agreement, at law or otherwise, to obtain
injunctive or other appropriate equitable relief to restrain any such breach
upon a showing by the Company of the legal requirements to obtain such relief.

Article 9.               Claims Procedure

9.1.       Committee Review.  The Executive or, in the event of the
Executive’s death, the Executive’s Beneficiary (as applicable, the “Claimant”)
may deliver to the Committee a written claim for a determination with respect
to the amounts distributable to such Claimant from this Agreement.  Such claim shall be delivered to the
Committee care of the Company in accordance with the notice provisions of
Section 11.7.  If such a claim relates to
the contents of a notice received by the Claimant, the claim must be made
within sixty (60) days after such notice was received by the Claimant.  All other claims must be made within two
hundred and seventy (270) days of the date on which the event that caused the
claim to arise occurred (subject to any timing requirements that may apply in
the case of a purported termination for Good Reason).  The claim must state with particularity the
determination desired by the Claimant.

9.2.       Notification of Decision.  The Committee shall consider a Claimant’s
claim pursuant to Section 9.1 within a reasonable time, but no later than
ninety (90) days after receiving the claim. 
If the Committee determines that special circumstances require an
extension of time for processing the claim, written notice of the extension
shall be furnished to the Claimant prior to the termination of the initial
ninety (90) day period.  In no event
shall such extension exceed a period of ninety (90) days from the end of the
initial period.  The extension notice
shall indicate the special circumstances requiring an 

 17
 

extension of time and the
date by which the Committee expects to render the benefit determination.  The Committee shall notify the Claimant in
writing:

(a)                                  that
the Claimant’s requested determination has been made, and that the claim has
been allowed in full; or

(b)                                 that
the Committee has reached a conclusion contrary, in whole or in part, to the
Claimant’s requested determination, and such notice must set forth in a manner
calculated to be understood by the Claimant:

(i)                                     the
specific reason(s) for the denial of the claim, or any part of it;

(ii)                                  specific
reference(s) to pertinent provisions of this Agreement upon which such denial
was based;

(iii)                               a
description of any additional material or information necessary for the
Claimant to perfect the claim, and an explanation of why such material or
information is necessary;

(iv).                           a
statement that the Claimant is entitled to receive, upon request and free of
charge, reasonable access to and copies of, all documents, records and other
information relevant (as defined in applicable ERISA regulations) to the
Claimant’s claim for benefits; and

(v)                                 a
statement of the Claimant’s right to seek arbitration pursuant to Section 9.4.

9.3.       Pre and Post-Change in Control Procedures.  With respect to claims made prior to the
occurrence of a Change in Control, a Claimant’s compliance with the foregoing
provisions of this Article 9 is a mandatory prerequisite to a Claimant’s right
to commence arbitration pursuant to Section 9.4 with respect to any claim for
benefits under this Agreement.  With
respect to claims made upon and after the occurrence of a Change in Control,
the Claimant may proceed directly to arbitration in accordance with Section 9.4
and need not first satisfy the foregoing provisions of this Article 9.

9.4.       Arbitration
of Claims.  All claims or
controversies arising out of or in connection with this Agreement, that the
Company may have against any Claimant, or that any Claimant may have against
the Company or against its officers, directors, employees or agents acting in
their capacity as such, shall, subject to the initial review provided for in
the foregoing provisions of this Article 9 that are effective with respect to
claims brought prior to the occurrence of a Change in Control, be resolved
through arbitration as provided in this Section 9.4.  The decision of an arbitrator on any issue,
dispute, claim or controversy submitted for arbitration, shall be final and
binding upon the Company and the Claimant and that judgment may be entered on
the award of the arbitrator in any court having proper jurisdiction.  The arbitrator shall review de novo any claim previously considered by
the Committee pursuant to Section 9.1.

 18
 

Except as otherwise
provided in this procedure or by mutual agreement of the parties, any
arbitration shall be administered: (1) in accordance with the then-current
Model Employment Arbitration Procedures of the American Arbitration Association
(“AAA”) before an arbitrator who is licensed to practice law in the state in
which the arbitration is convened; or (2) if locally available, the Judicial
Arbitration & Mediation Services, Inc. (“JAMS”), in accordance with the
JAMS procedures then in effect.  The
party who did not initiate the claim can designate between JAMS or AAA (the “Tribunal”).  The arbitration shall be held in the city in
which the Claimant is or was last employed by the Company in the nearest
Tribunal office or at a mutually agreeable location.  Pre-hearing and post-hearing procedures may
be held by telephone or in person as the arbitrator deems necessary.

The arbitrator shall be
selected as follows: if the parties cannot agree on an arbitrator, the Tribunal
(JAMS or AAA) shall then provide the names of nine (9) available arbitrators
experienced in business employment matters along with their resumes and fee
schedules.  Each party may strike all
names on the list it deems unacceptable. 
If more than one common name remains on the list of all parties, the
parties shall strike names alternately until only one remains.  The party who did not initiate the claim
shall strike first.  If no common name
remains on the lists of the parties, the Tribunal shall furnish an additional
list or lists until an arbitrator is selected.

The arbitrator shall
interpret this Agreement, any applicable Company policy or rules and
regulations, any applicable substantive law (and the law of remedies, if
applicable) of the state in which the claim arose, or applicable federal
law.  In reaching his or her decision,
the arbitrator shall have no authority to change or modify any lawful Company
policy, rule or regulation, or this Agreement. 
The arbitrator, and not any federal, state or local court or agency,
shall have exclusive and broad authority to resolve any dispute relating to the
interpretation, applicability, enforceability or formation of this Agreement,
including but not limited to, any claim that all or any part of this Agreement
is voidable.

The arbitration shall be
conducted pursuant to California Code of Civil Procedure Sections 1282 et. seq.

Notwithstanding the foregoing provisions, the
Company and the Executive each may apply to any court of competent jurisdiction
in the state of California for a temporary restraining order, preliminary
injunction, or other interim or conservatory relief, to ensure that any relief
sought in arbitration is not rendered ineffectual through interim harm and as
necessary to enforce the provisions of this Agreement, without breach of this
arbitration agreement and without abridgement of the powers of the arbitrator.

9.5.       Claims
Expenses; Legal Fees and Expenses of Executive. The Company shall advance
and bear all reasonable expenses of any arbitration conducted under this
Article 9 and all reasonable legal fees and expenses incurred by Claimant in
pursuing a claim at and through any stage of review or dispute resolution
pursuant to this Article 9; provided, however, that if it is
finally determined that the Claimant did not pursue the 

 19
 

claim or commence the
arbitration in good faith and had no reasonable basis therefore, the Claimant
shall repay all of Claimant’s legal fees and expenses advanced by the Company
and shall reimburse the Company for its reasonable legal fees and expenses in
connection therewith (except that, in any event, the Company shall be
responsible for payment of the forum costs of any arbitration hereunder,
including the arbitrator’s fee).

Article 10.            Successors and Assignment

10.1.    Successors
to the Company.  The Company will
require any successor (whether direct or indirect, by purchase, merger,
consolidation, or otherwise) of all or substantially all of the business and/or
assets of the Company or of any division or subsidiary thereof (the business
and/or assets of which constitute at least fifty percent (50%) of the total
business and/or assets of the Company) to expressly assume and agree to perform
the Company’s obligations under this Agreement in the same manner and to the
same extent that the Company would be required to perform them if such
succession had not taken place.  Failure
of the Company to obtain such assumption and agreement in a written instrument
prior to the effective date of any such succession shall be a breach of this
Agreement and shall entitle the Executive to compensation from the Company in
the same amount and on the same terms as the Executive would be entitled to
hereunder if he had terminated his employment with the Company voluntarily for
Good Reason.  Except for the purpose of
implementing the foregoing, the date on which any such succession becomes
effective shall be deemed the Executive’s Severance Date if the Executive so
elects, but any delay or failure by the Executive to so elect shall not be a
waiver or release of any rights hereunder which may be asserted at any time.

10.2.    Assignment
by the Executive.  This Agreement
shall inure to the benefit of and be enforceable by the Executive’s personal or
legal representatives, executors, administrators, successors, heirs,
distributees, devisees, and legatees.

Article 11.            Miscellaneous

11.1.    Employment
Status.  Except as may be provided
under any other written agreement between the Executive and the Company, the
employment of the Executive by the Company is “at will,” and, prior to the
effective date of a Change in Control, may be terminated by either the
Executive or the Company at any time, subject to applicable law.

11.2.    Beneficiaries.  The Executive may designate one or more
persons or entities as the primary and/or contingent Beneficiaries of any
Severance Benefits owing to the Executive under this Agreement.  If the Executive dies while any amount would
still be payable to him hereunder had he continued to live, all such amounts,
unless otherwise provided herein, shall be paid to the Executive’s Beneficiary
in accordance with the terms of this Agreement. 
If the Executive has not named a Beneficiary, then such amounts shall be
paid to the Executive’s devisee, legatee, or other designee, or if there is no
such designee, to the Executive’s estate. 
The Executive may make or change such designation at any time, provided
that any designation or change thereto must be in the form of a signed writing
acceptable to and received by the Committee.

 20
 

11.3.    Gender
and Number; Section Headings.  Where
the context requires herein, the singular shall include the plural, the plural
shall include the singular, and any gender shall include all other
genders.  The section headings of, and titles of
paragraphs and subparagraphs contained in, this Agreement are for the purpose
of convenience only, and they neither form a part of this Agreement nor are
they to be used in the construction or interpretation thereof.

11.4.    Severability.  In the event any provision of this Agreement
shall be held illegal or invalid for any reason, the illegality or invalidity
shall not affect the remaining parts of this Agreement, and this Agreement
shall be construed and enforced as if the illegal or invalid provision had not
been included.

11.5.    Entire
Agreement.  This Agreement, together with
any employment agreement and any written agreement evidencing any stock option
or other equity-based incentive award previously granted by the Company,
embodies the entire agreement of the parties hereto respecting the matters
within its scope.  As of the Effective
Date, this Agreement shall supersede all other agreements of the parties hereto
that are prior to or contemporaneous with the Effective Date and that directly
or indirectly bear upon the subject matter hereof (including, without
limitation, any Prior Change in Control Agreement), other than any prior
agreement relating to any right to indemnification the Executive may have from
the Company or the Executive’s right to be covered under any applicable
insurance policy, with respect to any liability the Executive incurred or may
incur as an employee, officer or director of the Company or its
affiliates.  Any negotiations,
correspondence, agreements, proposals or understandings prior to the Effective
Date relating to the subject matter hereof shall be deemed to have been merged
into this Agreement, and to the extent inconsistent herewith, such
negotiations, correspondence, agreements, proposals, or understandings shall be
deemed to be of no force or effect. 
There are no representations, warranties, or agreements, whether express
or implied, or oral or written, with respect to the subject matter hereof,
except as expressly set forth herein. 
This Agreement is an integrated agreement.

11.6.    Modification.  Except as expressly provided in the
definition of “Good Reason” in Section 3 with respect to certain waivers of
circumstances that would otherwise constitute Good Reason, no provision of this
Agreement may be modified, waived, or discharged unless such modification,
waiver, or discharge is agreed to in writing and signed by the Executive and by
an authorized member of the Committee or its designee, or by the respective
parties’ legal representatives and successors.

11.7.    Notice.  For purposes of this Agreement, notices,
including a Notice of Termination, and all other communications provided for in
this Agreement shall be in writing and shall be deemed to have been duly given
when delivered or on the date stamped as received by the U.S. Postal Service
for delivery by certified or registered mail, postage prepaid and addressed:
(i) if to the Executive, to his latest address as reflected on the records of
the Company, and (ii) if to the Company: Power-One, Inc., 740 Calle Plano,
Camarillo, California 93012, Attn: Corporate Secretary, or to such other
address as the Company may furnish to the Executive in writing with specific
reference to this 

 21
 

Agreement and the
importance of the notice, except that notice of change of address shall be
effective only upon receipt.

11.8.      Counterparts.  This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original as against any party
whose signature appears thereon, and all of which together shall constitute one
and the same instrument.  This Agreement
shall become binding when one or more counterparts hereof, individually or
taken together, shall bear the signatures of all of the parties hereto
reflected hereon as the signatories. 
Photographic copies of such signed counterparts may be used in lieu of
the originals for any purpose.

11.9.      Applicable
Law.  To the extent not preempted by
the laws of the United States, the laws of the State of California shall be the
controlling law in all matters relating to this Agreement (notwithstanding any
California or other conflict of law provision to the contrary).  Any statutory reference in this Agreement
shall also be deemed to refer to all applicable final rules and final
regulations promulgated under or with respect to the referenced statutory
provision.

11.10.    Section
409A.

(a)                                  Notwithstanding
any provision of this Agreement to the contrary, if the Executive is a “specified
employee” as defined in Section 409A of the Code (“Section 409A”), the
Executive shall not be entitled to any payments in connection with a separation
from service of the Executive (within the meaning of Section 409A) until the
earlier of (i) the date which is six (6) months after his separation from
service for any reason other than death, or (ii) the date of the Executive’s
death.  Furthermore, with regard to any
benefit to be provided upon a termination of employment, to the extent required
to avoid the imputation of any tax, penalty or interest under Section 409A, the
Executive shall pay the premium for such benefit during the aforesaid period
and be reimbursed by the Company therefor promptly after the end of such
period.  The provisions of this Section
11.10 shall only apply if, and to the extent, required to avoid the imputation
of any tax, penalty or interest under Section 409A.

(b)                                 To
the extent that this Agreement or any plan, program or award of the Company in
which the Executive participates or which has been or is granted by the Company
to the Executive, as applicable, is subject to Section 409A, the Company and
the Executive agree that the terms and conditions of this Agreement and such
other plan, program or award shall be construed and interpreted to the maximum
extent reasonably possible, without altering the fundamental intent of the
agreement, to avoid the imputation of any tax, penalty or interest under
Section 409A.

 22
 

IN WITNESS WHEREOF,
the parties have executed this Agreement on this                      
day of                            ,
                   
..

	
  Power-One, Inc.

  	
  Executive

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Print Name:

  	
   

  	
   

  	
  Print Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Its:

  	
   

  	
   

  	
   

  
							

 

 23Exhibit 10.1

	
  CONFIDENTIAL

  	
  EXECUTION VERSION

  

 

ASSET PURCHASE AGREEMENT

BETWEEN

NETBANK

AND

EVERBANK

Dated
as of May 18, 2007

TABLE OF
CONTENTS

	
  

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE I

  	
  DEFINITIONS

  	
  1

  
	
   

  	
   

  	
   

  
	
  1.1

  	
  Certain Definitions

  	
  1

  
	
   

  	
   

  	
   

  
	
  1.2

  	
  Terms Defined Elsewhere in this Agreement

  	
  9

  
	
   

  	
   

  	
   

  
	
  1.3

  	
  Other Definitional and Interpretive Matters

  	
  13

  
	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
  PURCHASE AND SALE OF ASSETS; ASSUMPTION OF
  LIABILITIES

  	
  14

  
	
   

  	
   

  	
   

  
	
  2.1

  	
  Purchase and Sale of Assets

  	
  14

  
	
   

  	
   

  	
   

  
	
  2.2

  	
  Excluded Assets

  	
  15

  
	
   

  	
   

  	
   

  
	
  2.3

  	
  Assumption of Liabilities

  	
  17

  
	
   

  	
   

  	
   

  
	
  2.4

  	
  Excluded Liabilities

  	
  17

  
	
   

  	
   

  	
   

  
	
  2.5

  	
  Further Conveyances and Assumptions; Consent of
  Third Parties

  	
  18

  
	
   

  	
   

  	
   

  
	
  2.6

  	
  Bulk Sales Laws

  	
  19

  
	
   

  	
   

  	
   

  
	
  2.7

  	
  Purchase Price Allocation

  	
  19

  
	
   

  	
   

  	
   

  
	
  2.8

  	
  Right to Control Payment

  	
  20

  
	
   

  	
   

  	
   

  
	
  2.9

  	
  Proration of Certain Expenses

  	
  20

  
	
   

  	
   

  	
   

  
	
  2.10

  	
  Receivables

  	
  20

  
	
   

  	
   

  	
   

  
	
  2.11

  	
  Assumption of Deposit Liabilities

  	
  20

  
	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
  CONSIDERATION

  	
  22

  
	
   

  	
   

  	
   

  
	
  3.1

  	
  Purchase Price

  	
  22

  
	
   

  	
   

  	
   

  
	
  3.2

  	
  Estimated Purchase Price

  	
  22

  
	
   

  	
   

  	
   

  
	
  3.3

  	
  Closing Payment

  	
  22

  
	
   

  	
   

  	
   

  
	
  3.4

  	
  Final Purchase Price

  	
  22

  
	
   

  	
   

  	
   

  
	
  3.5

  	
  Holdback Amount

  	
  23

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV

  	
  CLOSING AND TERMINATION

  	
  23

  
	
   

  	
   

  	
   

  
	
  4.1

  	
  Closing Date

  	
  23

  
	
   

  	
   

  	
   

  
	
  4.2

  	
  Termination of Agreement

  	
  24

  
	
   

  	
   

  	
   

  
	
  4.3

  	
  Effect of Termination

  	
  24

  
	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
  REPRESENTATIONS AND WARRANTIES OF SELLER

  	
  25

  
	
   

  	
   

  	
   

  
	
  5.1

  	
  Organization and Good Standing

  	
  25

  
	
   

  	
   

  	
   

  
	
  5.2

  	
  Authorization of Agreement

  	
  25

  
	
   

  	
   

  	
   

  
	
  5.3

  	
  Conflicts; Consents of Third Parties

  	
  26

  
	
   

  	
   

  	
   

  
	
  5.4

  	
  Financial Statements.

  	
  26

  

 

 i
 

 

	
  5.5

  	
  No Undisclosed Liabilities

  	
  27

  
	
   

  	
   

  	
   

  
	
  5.6

  	
  Title to Purchased Assets; Sufficiency

  	
  27

  
	
   

  	
   

  	
   

  
	
  5.7

  	
  Absence of Certain Developments

  	
  28

  
	
   

  	
   

  	
   

  
	
  5.8

  	
  Taxes

  	
  29

  
	
   

  	
   

  	
   

  
	
  5.9

  	
  Real Property

  	
  29

  
	
   

  	
   

  	
   

  
	
  5.10

  	
  Tangible Personal Property

  	
  30

  
	
   

  	
   

  	
   

  
	
  5.11

  	
  Intellectual Property

  	
  30

  
	
   

  	
   

  	
   

  
	
  5.12

  	
  Material Contracts

  	
  32

  
	
   

  	
   

  	
   

  
	
  5.13

  	
  Employee Benefits

  	
  34

  
	
   

  	
   

  	
   

  
	
  5.14

  	
  Labor

  	
  34

  
	
   

  	
   

  	
   

  
	
  5.15

  	
  Litigation

  	
  35

  
	
   

  	
   

  	
   

  
	
  5.16

  	
  Compliance with Laws; Permits

  	
  35

  
	
   

  	
   

  	
   

  
	
  5.17

  	
  Environmental Matters

  	
  36

  
	
   

  	
   

  	
   

  
	
  5.18

  	
  Insurance

  	
  37

  
	
   

  	
   

  	
   

  
	
  5.19

  	
  Receivables

  	
  37

  
	
   

  	
   

  	
   

  
	
  5.20

  	
  Loan Originations

  	
  37

  
	
   

  	
   

  	
   

  
	
  5.21

  	
  Beacon Loans and Leases

  	
  38

  
	
   

  	
   

  	
   

  
	
  5.22

  	
  Related Party Transactions

  	
  38

  
	
   

  	
   

  	
   

  
	
  5.23

  	
  Financial Advisors

  	
  39

  
	
   

  	
   

  	
   

  
	
  5.24

  	
  Deposits

  	
  39

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI

  	
  REPRESENTATIONS AND WARRANTIES OF PURCHASER

  	
  40

  
	
   

  	
   

  	
   

  
	
  6.1

  	
  Organization and Good Standing

  	
  40

  
	
   

  	
   

  	
   

  
	
  6.2

  	
  Authorization of Agreement

  	
  40

  
	
   

  	
   

  	
   

  
	
  6.3

  	
  Conflicts; Consents of Third Parties

  	
  40

  
	
   

  	
   

  	
   

  
	
  6.4

  	
  Litigation

  	
  41

  
	
   

  	
   

  	
   

  
	
  6.5

  	
  Financial Advisors

  	
  41

  
	
   

  	
   

  	
   

  
	
  6.6

  	
  Financing

  	
  41

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII

  	
  COVENANTS

  	
  41

  
	
   

  	
   

  	
   

  
	
  7.1

  	
  Access to Information

  	
  41

  
	
   

  	
   

  	
   

  
	
  7.2

  	
  Conduct of Operations Pending the Closing

  	
  42

  
	
   

  	
   

  	
   

  
	
  7.3

  	
  Consents

  	
  43

  
	
   

  	
   

  	
   

  
	
  7.4

  	
  Regulatory Approvals

  	
  44

  
	
   

  	
   

  	
   

  
	
  7.5

  	
  Further Assurances

  	
  45

  

 

 ii
 

 

	
  7.6

  	
  No Shop

  	
  46

  
	
   

  	
   

  	
   

  
	
  7.7

  	
  Non-Competition; Non-Solicitation; Confidentiality

  	
  47

  
	
   

  	
   

  	
   

  
	
  7.8

  	
  Preservation of Records

  	
  48

  
	
   

  	
   

  	
   

  
	
  7.9

  	
  Publicity

  	
  49

  
	
   

  	
   

  	
   

  
	
  7.10

  	
  Notice to Borrowers and Lessees

  	
  49

  
	
   

  	
   

  	
   

  
	
  7.11

  	
  Use of Name

  	
  49

  
	
   

  	
   

  	
   

  
	
  7.12

  	
  Net Worth

  	
  49

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII

  	
  EMPLOYEES AND EMPLOYEE BENEFITS

  	
  50

  
	
   

  	
   

  	
   

  
	
  8.1

  	
  Employment

  	
  50

  
	
   

  	
   

  	
   

  
	
  8.3

  	
  Standard Procedure

  	
  52

  
	
   

  	
   

  	
   

  
	
  8.4

  	
  Terminated Employees

  	
  52

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX

  	
  CONDITIONS TO CLOSING

  	
  52

  
	
   

  	
   

  	
   

  
	
  9.1

  	
  Conditions Precedent to Obligations of Purchaser

  	
  52

  
	
   

  	
   

  	
   

  
	
  9.2

  	
  Conditions Precedent to Obligations of Seller

  	
  55

  
	
   

  	
   

  	
   

  
	
  ARTICLE X

  	
  INDEMNIFICATION

  	
  55

  
	
   

  	
   

  	
   

  
	
  10.1

  	
  Survival of Representations and Warranties

  	
  55

  
	
   

  	
   

  	
   

  
	
  10.2

  	
  Indemnification

  	
  56

  
	
   

  	
   

  	
   

  
	
  10.3

  	
  Indemnification Procedures

  	
  57

  
	
   

  	
   

  	
   

  
	
  10.4

  	
  Limitations on Indemnification for Breaches of
  Representations and Warranties

  	
  59

  
	
   

  	
   

  	
   

  
	
  10.5

  	
  Tax Treatment of Indemnity Payments

  	
  60

  
	
   

  	
   

  	
   

  
	
  ARTICLE XI

  	
  TAXES

  	
  60

  
	
   

  	
   

  	
   

  
	
  11.1

  	
  Transfer Taxes

  	
  60

  
	
   

  	
   

  	
   

  
	
  11.2

  	
  Prorations

  	
  60

  
	
   

  	
   

  	
   

  
	
  11.3

  	
  Cooperation on Tax Matters

  	
  61

  
	
   

  	
   

  	
   

  
	
  ARTICLE XII

  	
  MISCELLANEOUS

  	
  61

  
	
   

  	
   

  	
   

  
	
  12.1

  	
  Expenses

  	
  61

  
	
   

  	
   

  	
   

  
	
  12.2

  	
  Submission to Jurisdiction; Consent to Service of
  Process; Waiver of Jury Trial

  	
  61

  
	
   

  	
   

  	
   

  
	
  12.3

  	
  Entire Agreement; Amendments and Waivers

  	
  61

  
	
   

  	
   

  	
   

  
	
  12.4

  	
  Governing Law

  	
  62

  
	
   

  	
   

  	
   

  
	
  12.5

  	
  Notices

  	
  62

  
	
   

  	
   

  	
   

  
	
  12.6

  	
  Severability

  	
  63

  

 

 iii
 

 

	
  12.7

  	
  Binding Effect; Assignment

  	
  63

  
	
   

  	
   

  	
   

  
	
  12.8

  	
  Knowledge

  	
  63

  
	
   

  	
   

  	
   

  
	
  12.9

  	
  Disclosure Letter

  	
  63

  
	
   

  	
   

  	
   

  
	
  12.10

  	
  Parent Agreement and Obligations

  	
  64

  
	
   

  	
   

  	
   

  
	
  12.11

  	
  Non-Recourse

  	
  64

  
	
   

  	
   

  	
   

  
	
  12.12

  	
  Counterparts

  	
  64

  

 

 iv
 

 

 

	
  Schedules

  	
   

  	
   

  
	
  1.1(a)

  	
   

  	
  Aggregate Purchased Loan Value

  
	
  1.1(b)

  	
   

  	
  Deposit Liabilities

  
	
  1.1(c)

  	
   

  	
  Purchased Contracts

  
	
  1.1(d)

  	
   

  	
  Purchased Intellectual Property

  
	
  1.1(e)

  	
   

  	
  Purchased Technology

  
	
  2.1(a)

  	
   

  	
  NetBank Finance Assets

  
	
  2.1(b)

  	
   

  	
  Loans Held for Investment

  
	
  2.1(c)

  	
   

  	
  Leases Held for Investment

  
	
  2.1(d)(i)

  	
   

  	
  Meritage Loans Held For Investment

  
	
  2.1(d)(ii)

  	
   

  	
  Meritage Loans Held for Sale

  
	
  2.1(e)

  	
   

  	
  Beacon Loans

  
	
  2.2(b)

  	
   

  	
  Excluded Assets

  
	
  2.2(s)

  	
   

  	
  Mortgage Loans or Beacon Loans Subject to Legal
  Proceedings

  
	
  2.3(a)

  	
   

  	
  NetBank Finance Liabilities

  
	
  2.11(c)

  	
   

  	
  Routing, Transit and BIN Numbers

  
	
  5.3(a)

  	
   

  	
  Conflicts

  
	
  5.3(b)

  	
   

  	
  Consents

  
	
  5.6

  	
   

  	
  Sufficiency of Purchased Assets

  
	
  5.7

  	
   

  	
  Absence of Certain Developments

  
	
  5.9(a)

  	
   

  	
  Assumed Real Property Lease

  
	
  5.10

  	
   

  	
  Personal Property

  
	
  5.11(a)

  	
   

  	
  Intellectual Property

  
	
  5.11(b)

  	
   

  	
  Ownership of Intellectual Property

  
	
  5.11(e)

  	
   

  	
  Intellectual Property Licenses

  
	
  5.11(i)

  	
   

  	
  Intellectual Property Claims

  
	
  5.12

  	
   

  	
  Material Contracts

  
	
  5.15(a)

  	
   

  	
  Litigation

  
	
  5.15(c)

  	
   

  	
  Orders

  
	
  5.16(a)

  	
   

  	
  Compliance with Laws

  
	
  5.17

  	
   

  	
  Environmental

  
	
  5.19

  	
   

  	
  Receivables

  
	
  5.20(a)

  	
   

  	
  Agency Terminations

  
	
  5.20(b)

  	
   

  	
  Mortgage Loan Representations and Warranties

  
	
  5.20(c)

  	
   

  	
  Georgia Affordable Housing Corporation Loans and
  Habitat Loan Representations and Warranties

  
	
  5.20(d)

  	
   

  	
  HELOC Loans

  
	
  5.22

  	
   

  	
  Related Party Transactions

  
	
  5.24(f)

  	
   

  	
  Certificates of Deposit

  
	
  5.24(i)

  	
   

  	
  Term and Maturity Dates of Certificates of Deposit

  
	
  6.3

  	
   

  	
  Conflicts

  
	
  7.5(c)

  	
   

  	
  Employees to Sign Employment Agreements

  
	
  7.11

  	
   

  	
  Use of Name

  
	
  8.1(a)

  	
   

  	
  Transferred Employees

  

 

 v
 

 

	
  Exhibits

  	
   

  	
   

  
	
  5.20(b)

  	
   

  	
  Mortgage Loan Representation and Warranties

  
	
  5.20(c)

  	
   

  	
  Georgia Affordable Housing Corporation and Habitat
  Loan

  
	
  5.21

  	
   

  	
  Beacon Representations and Warranties

  
	
  A

  	
   

  	
  Transition Services Agreement

  
	
  B

  	
   

  	
  Holdback Agreement

  
	
  C

  	
   

  	
  Bill of Sale

  
	
  D

  	
   

  	
  Form of Assignment and Assumption Agreement

  
	
  E

  	
   

  	
  Licensing Agreement

  

 

 

 vi

ASSET PURCHASE AGREEMENT

ASSET PURCHASE AGREEMENT,
dated as of May 18, 2007 (the “Agreement”), between EverBank, a federal
savings bank chartered under the laws of the United States, or its designated
affiliate (“Purchaser”) and NetBank, a federal savings bank
chartered under the laws of the United States (the Bank” or “Seller”).

BACKGROUND

Seller and its Subsidiaries
presently engage in mortgage banking, banking and related activities and Seller
desires to sell, transfer and assign to Purchaser or Purchaser’s designated
Affiliate or Affiliates, and Purchaser desires to (or to cause its designated
Affiliate or Affiliates to) acquire and assume from Seller, all of the
Purchased Assets and Assumed Liabilities, all as more specifically provided
herein. Parent will be a party to this Agreement for the limited purposes set
forth in Section 12.10 only.

NOW, THEREFORE, in
consideration of the premises and the mutual covenants and agreements
hereinafter contained, the parties, intending to be legally bound, hereby agree
as follows:

Article I

DEFINITIONS

1.1           Certain Definitions.

For purposes of this
Agreement, the following terms shall have the meanings specified in this Section
1.1:

“Affiliate” means,
with respect to any Person, any other Person that, directly or indirectly
through one or more intermediaries, controls, or is controlled by, or is under
common control with, such Person, and the term “control” means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of such Person, whether through ownership of voting
securities, by contract or otherwise, and the terms “controlled by” and “under
common control with” have correlative meanings.

“Agency” means HUD or the applicable State Agency.

“Aggregate Purchased Loan
Value” means the aggregate amount of the value of the Purchased Loans
determined in accordance with the calculations set forth on Schedule 1.1(a).    

“Ancillary Documents” means with respect to any
Beacon Loans, Lease, Lease Agreements, or Loan Agreements, any security
agreements,  guarantees, participation
agreements, insurance loss payable endorsements, promissory notes, letters of
credit, intercreditor agreements, servicing agreements, credit agreements,
financing statements or similar documents related thereto or obtained in
connection therewith.

“Applicable Requirements” means and includes, as of the time of
reference, with respect to Seller’s and its Subsidiaries’ origination of
Mortgage Loans (including Georgia Affordable Housing Loans and the Habitat
Loan), Beacon Loans, Leases, and all related contractual obligations of Seller
and 

its Subsidiaries (including
any contained in a Mortgage Loan Document, Loan Agreement, Lease Agreement or
Ancillary Document).

“April Balance Sheet”
means the unaudited consolidated balance sheet of Parent, the Bank and the
Subsidiaries as at April 30, 2007, as delivered by Seller to Purchaser.

“Assumed Real Property
Lease” means that certain lease, as amended, of the Bank related to NetBank
Finance located at 100 Executive Center Drive, Suite 101, Columbia, South
Carolina 29210.

“Book Value” means
the book value (net of any credit reserves, as applicable) determined in
accordance with GAAP applied on a consistent basis with the same accounting
principles and practices used by Seller in the preparation of the Balance Sheet
(but only to the extent consistent with GAAP); provided, that for purposes of
this definition of Book Value, (a) Leases that are more than 120 days
delinquent shall be deemed to have a book value equal to zero; and (b) accrued
interest and principal balance amounts that are 90 days or more past due and
receivable in connection with Mortgage Loans or Beacon Loans that are 90days or
more delinquent shall be deemed to have book value equal to zero. 

“Business Day” means
any day of the year, other than a Saturday or a Sunday, on which federal
savings associations in Florida are open to the public for conducting business
and are not required or authorized to close.

“CMC Litigation”
shall be defined collectively as the following: (a) Illinois Union
Insurance Co. v. Commercial Money Center, Inc., et al., Case No. CV-01-0685-KJD-RJJ
(United States District Court for Nevada) (“Nevada Litigation”); (b) the
multidistrict litigation In re Commercial Money Center, Inc., Equipment Lease
Litigation, Case No. 1:02-CV-16000 (MDL Docket No. 1490) (United
States District Court for the Northern District of Ohio, Eastern Division) (“MDL
Litigation”); (c) the Bankruptcy proceedings of Commercial Money
Center, Inc. styled In re Commercial Money Center, Inc., Bankruptcy Case No. 02-09721
(United States Bankruptcy Court for the Southern District of California) and
the adversary proceeding brought therein, Kipperman v. NetBank FSB Adversary
Proceeding No. 03-90331 (collectively, the “Bankruptcy Matters”);
(d) Clayton v. Commercial Money Center, Inc., Case No. BC 253169
(California Superior Court, Los Angeles County) (the “LA Litigation”);
and (e) all litigation and other proceedings related to the Nevada
Litigation, the MDL Litigation, the Bankruptcy Matters, and/or the LA
Litigation.

“COBRA” means the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended.

“Code” means the
Internal Revenue Code of 1986, as amended.

“Contract” means any
contract, agreement, indenture, note, bond, loan, instrument, lease, commitment
or other arrangement or understanding, whether written or oral.

“Deposit Liabilities” means all of the Bank’s
duties, obligations and liabilities (including accrued but unpaid interest) relating
to the deposit accounts of the Bank as set forth on Schedule 1.1(b) (including,
without limitation, all checking, savings, certificate of deposit, money
market, and time deposit accounts).

“Deposit Conversion Date” means the date on
which the processing of all Deposit Liabilities is transferred to Purchaser’s
systems or the systems of a third party selected by Purchaser.  

 2
 

“Documents” means all
files, documents, loan files, Mortgage Files, deposit records, instruments,
papers, books, reports, records, tapes, microfilms, photographs, letters,
budgets, forecasts, ledgers, journals, title policies, customer lists,
regulatory filings, operating data and plans, technical documentation (design
specifications, functional requirements, operating instructions, logic manuals,
flow charts, etc.), user documentation (installation guides, user manuals,
training materials, release notes, working papers, etc.), marketing
documentation (sales brochures, flyers, pamphlets, web pages, etc.), and other
similar materials related to NetBank Finance, the Purchased Assets and the
Assumed Liabilities, in each case whether or not in electronic form.

“Employee”
means each individual (including each common law employee, independent
contractor and individual consultant), as of the date hereof, who is employed
by Seller or its Subsidiaries, together with individuals who are hired by
Seller or its Subsidiaries after the date hereof.

“Employee
Benefit Plans” means any profit-sharing, pension, severance, thrift,
savings, incentive, change of control, employment, retirement, vacation, bonus,
retention, equity, deferred compensation, life insurance and any medical,
vision, dental or other health plan, flexible spending account, cafeteria plan,
holiday, disability or any other employee benefit plan or fringe benefit plan,
agreement, arrangement or commitment, whether written or unwritten which is
maintained, contributed to or required to be contributed to by Seller or any of
the Subsidiaries.  

“Environmental Law”
means any foreign, federal, state or local statute, regulation, ordinance, rule
of common law or other legal requirement as now or hereafter in effect in any
way relating to the protection of human health and safety, the environment or
natural resources, including the Comprehensive Environmental Response,
Compensation and Liability Act (42 U.S.C. § 9601 et  seq.),
the Hazardous Materials Transportation Act (49 U.S.C. App. § 1801 et
seq.), the Resource Conservation and Recovery Act (42 U.S.C. § 6901
et  seq.), the Clean Water Act (33 U.S.C. § 1251 et  seq.),
the Clean Air Act (42 U.S.C. § 7401 et  seq.), the Toxic
Substances Control Act (15 U.S.C. § 2601 et  seq.), the
Federal Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. § 136 et
seq.), and the Occupational Safety and Health Act (29 U.S.C. § 651 et
seq.), as each has been or may be amended and the regulations
promulgated pursuant thereto.

“ERISA” means the
Employment Retirement Income Security Act of 1974, as amended.

“Excluded Contracts”
means any Contract that is not a Purchased Contract.

“Excluded Real Property
Leases” means any Real Property Lease other than the Assumed Real Property
Lease.

“Foreclosure” means the process culminating in the acquisition
of title to a Mortgaged Property in a foreclosure sale or by a deed in lieu of
foreclosure or pursuant to any other comparable procedure allowed under
applicable Law.

“Furniture and Equipment”
means all furniture, fixtures, furnishings, equipment, vehicles, leasehold
improvements and other tangible personal property owned, leased or used by
Seller in the conduct and operations of NetBank Finance, including all artwork,
desks, chairs, tables, Hardware, copiers, telephone lines and numbers, telecopy
machines and other telecommunication equipment, cubicles and miscellaneous
office furnishings and supplies.

“GAAP” means
generally accepted accounting principles in the United States.

 3
 

“Georgia Affordable
Housing Loan” means a loan that is originated in conjunction with the
Georgia Affordable Housing Corporation and secured by an interest in real
property that consists of more than four dwelling units.

“Governmental Body”
means any government or governmental or regulatory body thereof, or political
subdivision thereof, whether foreign, federal, state, or local, or any agency,
instrumentality or authority thereof, or any court or arbitrator (public or
private).

“Habitat Loan” means
the line of credit in favor of Habitat for Humanity North Central Georgia, Inc.
under which is pledged to Seller various assignments of mortgage by mortgagors
with respect to owner-occupied residential real property.

“Hardware” means any
and all computer and computer-related hardware, including computers, file
servers, facsimile servers, scanners, color printers, laser printers and
networks.

“Hazardous Material”
means any substance, material or waste that is regulated, classified, or
otherwise characterized under or pursuant to any Environmental Law as “hazardous,”
“toxic,” “pollutant,” “contaminant,” “radioactive,” or words of similar meaning
or effect, including, without limitation, petroleum and its by-products,
asbestos, polychlorinated biphenyls, radon, mold or other fungi, and urea
formaldehyde insulation.

“HELOC” means a loan that it is a home equity
line of credit.

“Holdback Amount” means the sum of the Purchase
Price Holdback Amount and the Indemnification Holdback Amount. 

“HSR Act” shall mean
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended.

“HUD” means the United States Department of Housing and Urban
Development, or any successor thereto.

“Indemnification Holdback
Amount” means $3,000,000.

“Insurer” means a Person who insures or guarantees all or any
portion of the risk of loss on any Mortgage Loan, including any provider of
PMI, standard hazard insurance, flood insurance, earthquake insurance or title insurance,
with respect to any Mortgage Loan or related Mortgaged Property.

“Intellectual Property”
means all right, title and interest in or relating to intellectual property and
industrial property, whether protected, created or arising under the Laws of
the United States or any other jurisdiction, including: (i) all patents
and applications therefor, including all continuations, divisionals, and
continuations-in-part thereof and patents issuing thereon, along
with all reissues, reexaminations and extensions thereof (collectively, “Patents”);
(ii) all trademarks, service marks, trade names, service names, brand
names, trade dress rights, logos, corporate names, trade styles, logos
and other source or business identifiers and general intangibles of a like nature, together with the goodwill
associated with any of the foregoing, along with all applications,
registrations, renewals and extensions thereof (collectively, “Marks”);
(iii) all Internet domain names, URLs and websites; (iv) all
copyrights and all mask work, database and design rights, whether or not
registered or published, all registrations and recordations thereof and all
applications in connection therewith, along with all reversions, extensions and
renewals thereof (collectively, “Copyrights”);
(v) Trade Secrets; (vi) all other intellectual property and 

 4
 

industrial property rights
arising from or relating to Technology; and (vii) all Contracts granting
any right relating to or under the foregoing.

“Intellectual Property
Licenses” means (i) any grant to a third Person of any right relating
to or under the Purchased Intellectual Property and (ii) any grant to
Seller or any Subsidiary of any right relating to or under any third Person’s
Intellectual Property, in each case which is used in connection with the
Purchased Assets, Assumed Liabilities, or NetBank Finance.

 “IRS” means the Internal Revenue
Service.

“Law” means any
federal, state, local, municipal, foreign, international, multinational, or
other constitution, law, rule, standard, requirement, administrative ruling,
order, ordinance, principle of common law, legal doctrine, code, regulation,
statute, treaty or process, including, without limitation, those relating to
consumer credit and mortgage lending or brokering (including but not limited to
the Real Estate Settlement Procedures Act, the federal Truth in Lending Act,
the Equal Credit Opportunity Act, the Fair Credit Reporting Act and the Gramm-Leach-Bliley
Act) and laws covering predatory lending, fair housing and unfair and
deceptive practices, the Code, any Environmental Law, ERISA, the Securities
Exchange Act of 1934, as amended, and the Securities Act of 1933, as amended.

“Leases” means all
leases that are Purchased Assets, including all rights to delinquent payments,
charge-offs, recoveries claims and judgments related to such leases.

“Lease Agreements”
means all Contracts related to any Leases.

“Legal Proceeding”
means any judicial, administrative or arbitral actions, suits, proceedings
(public or private) or claims or any proceedings by or before a
Governmental Body, including any civil, criminal, investigative or informal
actions, audits, demands, claims, hearings, litigations, disputes, inquiries,
investigations or other proceedings of any kind or nature.

“Liability” means any
debt, loss, damage, adverse claim, liability or obligation (whether direct or
indirect, known or unknown, asserted or unasserted, absolute or contingent,
accrued or unaccrued, liquidated or unliquidated, or due or to become due, and
whether in contract, tort, strict liability or otherwise), and including all
costs and expenses relating thereto.

“Lien” means any
lien, pledge, mortgage, deed of trust, security interest, claim, lease, charge,
option, right of first refusal, easement, servitude, proxy, voting trust or agreement,
transfer restriction under any shareholder or similar agreement, encumbrance or
any other material restriction or limitation whatsoever.

“Loan Agreements”
means all Contracts related to Beacon Loans.

“Market Street” means
Market Street Mortgage Corporation. 

 “Market Street Joint Ventures” means
each of NeuMark Mortgage Services, LLC, First Choice Lending Group, L.P. and
H&P Mortgage Financial Group, L.P.

“Material Adverse Effect”
means any event, state of facts, circumstances, developments, change or effect
that, individually or in the aggregate with all other events, states of facts,
circumstances, developments, changes and effects, is materially adverse to (i) the
condition (financial or otherwise), assets, prospects or results of operations
of NetBank Finance, the Assumed Liabilities or the Purchased Assets, taken as a
whole, including any material adverse change in the prospective revenue
generation of 

 5
 

NetBank Finance, the Assumed
Liabilities and the Purchased Assets, or (ii) the ability of the Seller or
Parent to consummate the transactions contemplated hereby or to perform their
respective obligations under this Agreement on a timely basis  provided, that none of the following shall be deemed to constitute or shall be
taken into account in determining whether there has been a “Material Adverse
Effect” pursuant to clause (i) only: any event, circumstance, change or
effect arising out of or attributable to (a) changes in the economy or
financial markets, including, prevailing interest rates and market conditions,
generally in the United States or that are the result of acts of war or
terrorism, except to the extent any of the same disproportionately affects the
Seller as compared to other companies in the industry in which Seller operates;
(b) changes that are caused by factors generally affecting the industry in
which Seller operates, except to the extent any of the same disproportionately
affects Seller; (c) changes in, or in the application of, GAAP; (d) changes
in applicable Laws, except to the extent any of the same materially
disproportionately affects Seller as compared to other companies in the
industry in which Seller operates; and (e) any loss of, or adverse change
in, the relationship of Seller with its employees or suppliers caused by the
announcement of the transactions contemplated by this Agreement.

“Mortgage” means a mortgage, deed of trust or other similar
security instrument that creates a lien on real property.

“Mortgage Loan” means
any loan that is, or upon closing or funding, will be, evidenced by a Mortgage
and a Mortgage Note and secured by a Mortgaged Property, including, without
limitation, first lien residential mortgage loans, HELOCs, junior lien home
equity loans, Loans Held for Investment, Meritage Loans Held for Investment,
Meritage Loans Held For Sale, Georgia Affordable Housing Loans and the Habitat
Loan.

“Mortgage Loan Documents” means the documents relating to
Mortgage Loans required by applicable Insurers, Agencies, investors, Law and
Applicable Requirements to originate the Mortgage Loans whether on hard copy,
microfiche or its equivalent or in electronic format and, to the extent
required by Applicable Requirements, credit and closing packages and
disclosures.

 “Mortgage
Note” means, with respect to a Mortgage Loan, a promissory note or
notes, or other evidence of indebtedness, with respect to such Mortgage Loan
secured by a Mortgage or Mortgages, together with any assignment,
reinstatement, extension, endorsement or modification thereof.

“Mortgaged Property” means a fee simple property (or such other
estate in real property as is commonly accepted as collateral for Mortgage
Loans that are subject to secondary mortgage sales or securitizations) that
secures a Mortgage Note and that is subject to a Mortgage.

“Mortgagor” means the obligor(s) on a Mortgage Note or
owners of a Mortgaged Property.

 “Order” means any order, injunction,
judgment, decree, ruling, writ, assessment or arbitration award of a
Governmental Body.

“Ordinary Course of
Business” means the ordinary and usual course of normal day-to-day
operations of Seller and the Subsidiaries through the date hereof consistent
with past practice (including consistent with applicable credit and
underwriting policies).

“Originator” means, with respect to any Mortgage Loan
(including any Georgia Affordable Housing Loan or the Habitat Loan) or
Beacon Loan, each entity or individual that (i) took the relevant loan
application or (ii) processed the relevant loan application.

 6
 

“Overdraft Accounts”
means those overdraft lines of credit extended by Seller to its deposit account
customers pursuant to a written agreement that are open as of the Closing.

“Parent” means NetBank, Inc., a Georgia
corporation. 

“Permits” means any
approvals, authorizations, consents, licenses, permits or certificates of a
Governmental Body.

“Permitted Exceptions”
means (i) all defects, exceptions, restrictions, easements, rights of way
and encumbrances disclosed in policies of title insurance which have been made
available to Purchaser; (ii) statutory liens for current Taxes,
assessments or other governmental charges not yet delinquent or the amount or
validity of which is being contested in good faith by appropriate proceedings
provided an appropriate reserve is established therefor against the carrying amount
of the related assets; (iii) mechanics’, carriers’, workers’, repairers’
and similar Liens arising or incurred in the Ordinary Course of Business that
are not material to the Purchased Assets, operations and financial condition of
the Seller and the Subsidiaries that are not resulting from a breach, default
or violation by Seller or any of the Subsidiaries of any Contract or Law; (iv) zoning,
entitlement and other land use and environmental regulations by any
Governmental Body; provided, that such regulations have not been
violated; and (v) such other imperfections in title, charges, easements,
restrictions and encumbrances which do not materially detract from the value of
or materially interfere with the present use of the Seller.

“Person” means any individual,
corporation, partnership, firm, joint venture, association, joint-stock
company, trust, unincorporated organization, Governmental Body or other entity.

“PMI” means the default insurance provided by private mortgage
insurance companies.

“Purchase Price Holdback
Amount” means two percent (2%) of the Book Value of the Leases Held
for Investment.

“Purchased Contracts”
means all leases for Furniture and Equipment, leases for other tangible
personal property, the Assumed Real Property Lease, Intellectual Property
Licenses, Leases, Beacon Loans, Loan Agreements, Mortgage Notes, Lease
Agreements, and Ancillary Documents and all other Contracts listed on Schedule
1.1(c).

“Purchased Loans”
means the Loans Held for Investment, Meritage Loans Held for Investment,
Meritage Loans Held for Sale and Beacon Loans to be acquired by Purchaser at
the Closing after accounting for adjustments in the aggregate unpaid balances
of such loans between the date of the April Balance Sheet and the close of
business on the date immediately preceding the Closing Date.

 “Purchased Intellectual Property”
means all Intellectual Property owned or licensed by Seller or its Affiliates
and used in connection with the Purchased Assets, Assumed Liabilities or
NetBank Finance as set forth on Schedule 1.1(d).

“Purchased Technology”
means all Technology owned or licensed by Seller or its Affiliates and used
exclusively in connection with the Purchased Assets, Assumed Liabilities or
NetBank Finance as set forth on Schedule 1.1(e).

“Real Property Lease”
means real property and interests in real property leased by Seller or any
Subsidiary.

 7
 

“Receivables” means, as of a particular date,
amounts due to or accruing for the benefit of Seller or any Subsidiary as of
such date pursuant to any Mortgage Loan, Beacon Loan or Lease and the related
Mortgage Notes, Loan Agreements, and Lease Agreements, including but not
limited to accrued interest receivables and corporate advances.

“Regulatory Authorities”
means, collectively, and as applicable, the Federal Trade Commission, the
United States Department of Justice, the FDIC, the OTS, the IRS, the NASDAQ
Stock Market (“Nasdaq”), the Securities and Exchange Commission (the “SEC”),
the National Labor Relations Board and any other federal, state or local
governmental authority, court, tribunal, agency, commission, public body or
other Person with jurisdiction over the parties and their respective
Subsidiaries.

“Seller Property”
means the real property subject to the Assumed Real Property Lease.

“Seller’s Former Depositors”
means those Persons who were depositors of Seller immediately prior to the
Closing and who became customers of Purchaser as a result of the transactions
contemplated by this Agreement.

“Servicing Assets”
means all of Seller’s mortgage servicing rights.

 “Software” means any and all (i) computer
programs, including any and all software implementations of algorithms, models
and methodologies, whether in source code or object code, (ii) databases
and compilations, including any and all data and collections of data, whether
machine readable or otherwise, (iii) descriptions, flow-charts and
other work product used to design, plan, organize and develop any of the
foregoing, screens, user interfaces, report formats, firmware, development
tools, templates, menus, buttons and icons, and (iv) all documentation
including user manuals and other training documentation related to any of the
foregoing, in each case with respect to clauses (i) through (iv) to
the extent that such Software is related to or used in connection with
Purchased Assets, Assumed Liabilities or NetBank Finance.

“State Agency” means any state agency or other entity with
authority to regulate the activities of Seller or any of its Subsidiaries
relating to the origination or servicing of Mortgage Loans, Beacon Loans or
Leases, or to determine the investment or servicing requirements with regard to
mortgage loan origination, purchasing, servicing, master servicing or
certificate administration performed by Seller or any of its Subsidiaries.

“Subsidiary” means
any Person of which a majority of the outstanding voting securities or other
voting equity interests is owned, directly or indirectly, by the Bank;
provided, however, that each of the Market Street Joint Ventures shall be
deemed to be a Subsidiary.

 “Tax” or “Taxes” means (i) any
and all federal, state, local or foreign taxes, charges, fees, imposts, levies
or other assessments, including, without limitation, all net income, gross
receipts, capital, sales, use, ad valorem, value added, transfer, franchise,
profits, inventory, capital stock, license, withholding, payroll, employment,
social security, unemployment, excise, severance, stamp, occupation, property
and estimated taxes, customs duties, fees, assessments and charges of any kind
whatsoever; and (ii) all interest, penalties, fines, additions to tax or
additional amounts imposed by any Taxing Authority in connection with any item
described in clause (i), and (iii) any liability in respect of any
items described in clauses (i) and/or (ii) payable by reason of
contract, assumption, transferee liability, operation of law, Treasury
Regulation Section 1.1502-6(a) (or any predecessor or successor
thereof or any analogous or similar provision under law) or otherwise.

 8
 

“Taxing Authority”
means the IRS and any other Governmental Body responsible for the
administration of any Tax.

“Tax Return” means
any return, report or statement required to be filed with respect to any Tax
(including any attachments thereto, and any amendment thereof) including,
without limitation, any information return, claim for refund, amended return or
declaration of estimated Tax, and including, where permitted or required, com­bined,
consolidated or unitary returns for any group of entities that includes Seller,
any of the Subsidiaries, or any of their Affiliates.

“Technology” means,
collectively, all Software, information, designs, formulae, algorithms,
procedures, methods, techniques, ideas, know-how, research and
development, technical data, programs, subroutines, tools, materials,
specifications, processes, inventions (whether patentable or unpatentable and
whether or not reduced to practice), apparatus, creations, improvements, works
of authorship and other similar materials, and all recordings, graphs,
drawings, reports, analyses, and other writings, and other tangible embodiments
of the foregoing, in any form whether or not specifically listed herein, and
all related technology, that are used in, incorporated in, embodied in,
displayed by or relate to, or are used in connection with the foregoing in each
case to the extent that such Technology is used in connection with Purchased
Assets, the Assumed Liabilities or NetBank Finance.

“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: (i) 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 (ii) 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 applicable common law or statutory law.

“Transition Services
Agreement” means an agreement in substantially the form attached hereto as Exhibit
A, which shall include all necessary schedules or statements of work that
Purchaser deems necessary for its receipt of services from Seller or Seller’s
Affiliates following the Closing and which schedules and statements of work
shall be mutually acceptable to Purchaser and Seller and pursuant to which
Seller will provide, or cause its Affiliates to provide, certain transition
services to Purchaser and its subsidiaries.

“WARN” means the
Worker Adjustment and Retraining Notification Act of 1988, as amended.

1.2           Terms Defined Elsewhere in this Agreement.  For
purposes of this Agreement, the following terms have meanings set forth in the
sections indicated:

	
  Term

  	
   

  	
  Section

  
	
   

  	
   

  	
   

  
	
  Acceptable
  Servicing Procedures

  	
   

  	
  Exhibit 5.20(b)

  
	
  Acquisition
  Transaction

  	
   

  	
  7.6(a)

  
	
  Agreement

  	
   

  	
  Recitals

  
	
  ACH

  	
   

  	
  2.11(h)

  
	
  Alt A Mortgage
  Loan

  	
   

  	
  Exhibit 5.20(b)

  
	
  ALTA

  	
   

  	
  Exhibit 5.20(b)

  

 

 9
 

 

	
  Term

  	
   

  	
  Section

  
	
   

  	
   

  	
   

  
	
  Anti-Money
  Laundering Laws

  	
   

  	
  Exhibit 5.20(c); Exhibit 5.20(b)

  
	
  Antitrust Laws

  	
   

  	
  7.4(b)

  
	
  Appraised Value

  	
   

  	
  Exhibit 5.20(b)

  
	
  ARM Loan

  	
   

  	
  Exhibit 5.20(b)

  
	
  Asset
  Acquisition Statement

  	
   

  	
  2.7

  
	
  Assignment of
  Leases and Rents

  	
   

  	
  Exhibit 5.20(c)

  
	
  Assignment of
  Mortgage

  	
   

  	
  7.5(e)

  
	
  Assumed
  Liabilities

  	
   

  	
  2.3

  
	
  BPO

  	
   

  	
  Exhibit 5.20(c)

  
	
  Balance Sheet

  	
   

  	
  5.4(a)

  
	
  Balance Sheet
  Date

  	
   

  	
  5.4(a)

  
	
  Balloon Payment

  	
   

  	
  Exhibit 5.20(b)

  
	
  Bank

  	
   

  	
  Recitals

  
	
  Bankruptcy
  Matters

  	
   

  	
  1.1 (in CMC Litigation definition)

  
	
  Basket

  	
   

  	
  10.4(a)

  
	
  Beacon

  	
   

  	
  2.1(e)

  
	
  Beacon Loans

  	
   

  	
  2.1(e)

  
	
  Burdensome
  Condition

  	
   

  	
  9.1(f)

  
	
  Business Marks

  	
   

  	
  7.11

  
	
  Buydown
  Agreement

  	
   

  	
  Exhibit 5.20(b)

  
	
  Buydown Fund

  	
   

  	
  Exhibit 5.20(b)

  
	
  Buydown Fund
  Account

  	
   

  	
  Exhibit 5.20(b)

  
	
  Buydown Loan

  	
   

  	
  Exhibit 5.20(b)

  
	
  Cap

  	
   

  	
  10.4(c)

  
	
  Closing

  	
   

  	
  4.1

  
	
  Closing Date

  	
   

  	
  4.1

  
	
  Closing Payment

  	
   

  	
  3.3

  
	
  Collateral
  Documents

  	
   

  	
  Exhibit 5.20(b)

  
	
  Collateral File

  	
   

  	
  Exhibit 5.20(b)

  
	
  Commercial Loan

  	
   

  	
  Exhibit 5.20(c)(b)

  
	
  Confidential
  Information

  	
   

  	
  7.7(d)

  
	
  Coop Ownership
  Interest

  	
   

  	
  Exhibit 5.20(b)

  
	
  Cooperative

  	
   

  	
  Exhibit 5.20(b)

  
	
  Cooperative
  Apartment

  	
   

  	
  Exhibit 5.20(b)

  
	
  Cooperative Lien
  Search

  	
   

  	
  Exhibit 5.20(b)

  
	
  Cooperative Loan

  	
   

  	
  Exhibit 5.20(b)

  
	
  Copyrights

  	
   

  	
  1.1 (in Intellectual Property definition)

  
	
  Credit File

  	
   

  	
  Exhibit 5.20(b)

  
	
  Credit
  Protection Instruments

  	
   

  	
  2.1

  
	
  Cut-off
  Date

  	
   

  	
  Exhibit 5.20(b)

  
	
  Cut-off
  Date Principal Balance

  	
   

  	
  Exhibit 5.20(b)

  
	
  Delinquent
  Monthly Payment

  	
   

  	
  Exhibit 5.20(b)

  
	
  Deposit
  Deductible

  	
   

  	
  10.4(b)

  
	
  Deposit
  Liabilities Amount

  	
   

  	
  3.1

  
	
  Detrimental
  Conditions

  	
   

  	
  Exhibit 5.20(b)

  
	
  Disclosure
  Letter

  	
   

  	
  Article V

  
	
  Due Date

  	
   

  	
  Exhibit 5.20(b)

  
	
  Escrow Payments

  	
   

  	
  Exhibit 5.20(b)

  
	
  Estimated
  Aggregate Purchased Loan Value

  	
   

  	
  3.2(a)

  

 

 10
 

 

	
  Term

  	
   

  	
  Section

  
	
   

  	
   

  	
   

  
	
  Estimated
  Closing Statement

  	
   

  	
  3.2(a)

  
	
  Estimated
  NetBank Finance Book Value

  	
   

  	
  3.2(a)

  
	
  Estimated
  Purchase Price

  	
   

  	
  3.2

  
	
  Excluded Assets

  	
   

  	
  2.2

  
	
  Excluded
  Employee

  	
   

  	
  8.1(b)

  
	
  Excluded Leases

  	
   

  	
  2.1(c)

  
	
  Excluded
  Liabilities

  	
   

  	
  2.4

  
	
  Executive Order

  	
   

  	
  Exhibit 5.20(c); Exhibit 5.20(b)

  
	
  FDIC

  	
   

  	
  5.3(b)

  
	
  FEMA

  	
   

  	
  Exhibit 5.20(c)

  
	
  Final Closing Statement

  	
   

  	
  3.4

  
	
  Final Purchase
  Price

  	
   

  	
  3.4

  
	
  Financial
  Statements

  	
   

  	
  5.4(a)

  
	
  FIRPTA Affidavit

  	
   

  	
  9.1(g)

  
	
  Gross Margin

  	
   

  	
  Exhibit 5.20(b)

  
	
  Hazardous
  Materials

  	
   

  	
  Exhibit 5.20(c)

  
	
  Hedging
  Instrument

  	
   

  	
  2.2(m)

  
	
  Holdback
  Agreement

  	
   

  	
  3.1

  
	
  Indemnification
  Claim

  	
   

  	
  10.3(b)

  
	
  Index

  	
   

  	
  Exhibit 5.20(b)

  
	
  Initial Rate Cap

  	
   

  	
  Exhibit 5.20(b)

  
	
  Interest Only
  Mortgage Loan

  	
   

  	
  Exhibit 5.20(b)

  
	
  Interest Rate
  Adjustment Date

  	
   

  	
  Exhibit 5.20(b)

  
	
  Interest Rate
  Decrease Maximum

  	
   

  	
  Exhibit 5.20(b)

  
	
  Interest Rate
  Increase Maximum

  	
   

  	
  Exhibit 5.20(b)

  
	
  Investor Contracts

  	
   

  	
  2.2(d)

  
	
  Knowledge

  	
   

  	
  12.8

  
	
  Knowledge of
  Parent

  	
   

  	
  12.8

  
	
  Knowledge of
  Seller

  	
   

  	
  12.8

  
	
  LA Litigation

  	
   

  	
  1.1 (in CMC Litigation definition)

  
	
  Leases Held for
  Investment

  	
   

  	
  2.1(c)

  
	
  Loans Held for
  Investment

  	
   

  	
  2.1(b)

  
	
  Loss, Losses

  	
   

  	
  10.2(a)(i)

  
	
  LPMI Loan

  	
   

  	
  Exhibit 5.20(b)

  
	
  LPMI Rate

  	
   

  	
  Exhibit 5.20(b)

  
	
  Marks

  	
   

  	
  1.1 (in Intellectual Property definition)

  
	
  Material
  Contracts

  	
   

  	
  5.12(a)

  
	
  Maturity Date

  	
   

  	
  Exhibit 5.20(b)

  
	
  Maximum Mortgage
  Interest Rate

  	
   

  	
  Exhibit 5.20(b)

  
	
  MDL Litigation

  	
   

  	
  1.1 (in CMC Litigation definition)

  
	
  Meritage

  	
   

  	
  2.1(d)

  
	
  Meritage Loan

  	
   

  	
  2.1(d)

  
	
  Meritage Loans
  Held For Investment

  	
   

  	
  2.1(d)

  
	
  Meritage Loans
  Held for Sale

  	
   

  	
  2.1(d)

  
	
  MERS

  	
   

  	
  Exhibit 5.20(b)

  
	
  MERS Loan

  	
   

  	
  Exhibit 5.20(b)

  
	
  MERS® System

  	
   

  	
  Exhibit 5.20(b)

  
	
  MIN

  	
   

  	
  Exhibit 5.20(b)

  
	
  Minimum Mortgage
  Interest Rate

  	
   

  	
  Exhibit 5.20(b)

  

 

 11
 

 

	
  Term

  	
   

  	
  Section

  
	
   

  	
   

  	
   

  
	
  Minimum Net
  Worth

  	
   

  	
  7.2

  
	
  MOM Loan

  	
   

  	
  Exhibit 5.20(b)

  
	
  Monthly Payment

  	
   

  	
  Exhibit 5.20(b)

  
	
  Mortgage Files

  	
   

  	
  Exhibit 5.20(b)

  
	
  Mortgage
  Interest Rate

  	
   

  	
  Exhibit 5.20(b)

  
	
  Mortgage Loan
  Schedule

  	
   

  	
  Exhibit 5.20(b)

  
	
  Nasdaq

  	
   

  	
  1.1 (in Regulatory Authorities definition)

  
	
  Negative
  Amortization

  	
   

  	
  Exhibit 5.20(b)

  
	
  Negative
  Amortization Mortgage Loan

  	
   

  	
  Exhibit 5.20(b)

  
	
  Net Worth

  	
   

  	
  7.12

  
	
  Nevada
  Litigation

  	
   

  	
  1.1 (in CMC Litigation definition)

  
	
  NetBank Assumed
  Liabilities

  	
   

  	
  3.1

  
	
  NetBank Finance
  Book Value

  	
   

  	
  3.1

  
	
  NetBank Finance

  	
   

  	
  2.1(a)

  
	
  NetBank Finance
  Purchased Assets

  	
   

  	
  3.1

  
	
  Non Prime
  Mortgage Loan

  	
   

  	
  Exhibit 5.20(b)

  
	
  Nonassignable
  Assets

  	
   

  	
  2.5(d)

  
	
  OFAC

  	
   

  	
  Exhibit 5.20(b)

  
	
  OFAC Regulations

  	
   

  	
  Exhibit 5.20(b)

  
	
  OTS

  	
   

  	
  6.1

  
	
  Parent

  	
   

  	
  Recitals

  
	
  Patents

  	
   

  	
  1.1 (in Intellectual Property definition)

  
	
  Payment
  Adjustment Date

  	
   

  	
  Exhibit 5.20(b)

  
	
  Periodic Rate
  Cap

  	
   

  	
  Exhibit 5.20(b)

  
	
  Personal
  Property Leases

  	
   

  	
  5.10(b)

  
	
  Premium

  	
   

  	
  3.1

  
	
  Preliminary
  Purchase Price Estimate

  	
   

  	
  3.2(a)

  
	
  Pricing
  Adjustment

  	
   

  	
  3.2(b)

  
	
  Principal
  Prepayment

  	
   

  	
  Exhibit 5.20(b)

  
	
  Project

  	
   

  	
  Exhibit 5.20(b)

  
	
  Purchased Assets

  	
   

  	
  2.1

  
	
  Purchase Price

  	
   

  	
  3.1

  
	
  Purchaser

  	
   

  	
  Recitals

  
	
  Purchaser 401(k) Plan

  	
   

  	
  8.1(g)

  
	
  Purchaser
  Benefit Plans

  	
   

  	
  8.1(d)

  
	
  Purchaser
  Disclosure Letter

  	
   

  	
  6.3

  
	
  Purchaser
  Documents

  	
   

  	
  6.2

  
	
  Purchaser
  Indemnified Parties

  	
   

  	
  10.2(a)

  
	
  REO

  	
   

  	
  2.2(r)

  
	
  Real Property
  Lease

  	
   

  	
  5.9(a)

  
	
  Refinanced
  Mortgage Loan

  	
   

  	
  Exhibit 5.20(b)

  
	
  Regulatory
  Consents

  	
   

  	
  7.4(c)

  
	
  Representatives

  	
   

  	
  7.6(a)

  
	
  Restricted
  Business

  	
   

  	
  7.7(a)

  
	
  Revised
  Statements

  	
   

  	
  2.7

  
	
  S&P

  	
   

  	
  Exhibit 5.20(b)

  
	
  SEC

  	
   

  	
  1.1 (in Regulatory Authorities definition)

  
	
  Security Release
  Certification

  	
   

  	
  Exhibit 5.20(c)

  
	
  Seller(s)

  	
   

  	
  Recitals

  

 

 12
 

 

	
  Term

  	
   

  	
  Section

  
	
   

  	
   

  	
   

  
	
  Seller Documents

  	
   

  	
  5.2

  
	
  Seller
  Indemnified Parties

  	
   

  	
  10.2(b)

  
	
  Servicing
  Purchase Agreement

  	
   

  	
  2.2(v)

  
	
  Survival Period

  	
   

  	
  10.1

  
	
  Transfer
  Document(s)

  	
   

  	
  10.2(a)(i)

  
	
  Transfer Taxes

  	
   

  	
  11.1

  
	
  Transferred
  Employees

  	
   

  	
  8.1(a)

  
	
  Unpaid Principal
  Balance

  	
   

  	
  Exhibit 5.20(b)

  

 

1.3           Other Definitional and Interpretive Matters.

(a)           Unless otherwise expressly provided, for purposes of this Agreement,
the following rules of interpretation shall apply:

Calculation of Time Period.  When
calculating the period of time before which, within which or following which
any act is to be done or step taken pursuant to this Agreement, the date that
is the reference date in calculating such period shall be excluded.  If the last day of such period is a non-Business
Day, the period in question shall end on the next succeeding Business Day.

Dollars.  Any
reference in this Agreement to $ shall mean U.S. dollars.

Exhibits/Schedules.  The
Exhibits and Schedules to this Agreement are hereby incorporated and made a
part hereof and are an integral part of this Agreement.  All Exhibits and Schedules annexed hereto or
referred to herein are hereby incorporated in and made a part of this Agreement
as if set forth in full herein.  Any
capitalized terms used in any Schedule or Exhibit but not otherwise defined
therein shall be defined as set forth in this Agreement.

Gender and Number.  Any
reference in this Agreement to gender shall include all genders, and words
imparting the singular number only shall include the plural and vice versa.

Headings.  The
provision of a Table of Contents, the division of this Agreement into Articles,
Sections and other subdivisions and the insertion of headings are for
convenience of reference only and shall not affect or be utilized in construing
or interpreting this Agreement.  All
references in this Agreement to any “Section” are to the corresponding Section
of this Agreement unless otherwise specified.

Herein.  The
words such as “herein,” “hereinafter,” “hereof,” and “hereunder”
refer to this Agreement as a whole and not merely to a subdivision in which
such words appear unless the context otherwise requires.

Including.  The
word “including” or any variation thereof means “including, without
limitation” and shall not be construed to limit any general statement that
it follows to the specific items immediately following it.

(b)           The parties hereto have participated jointly in the negotiation and
drafting of this Agreement and, in the event an ambiguity or question of intent
or interpretation arises, this Agreement shall be construed as jointly drafted
by the parties hereto and no presumption or burden of proof shall arise
favoring or disfavoring any party by virtue of the authorship of any provision
of this Agreement.

 13

ARTICLE II

PURCHASE AND SALE OF ASSETS; ASSUMPTION OF LIABILITIES

2.1           Purchase and Sale of Assets.  On
the terms and subject to the conditions set forth in this Agreement, at the
Closing, Purchaser shall (or shall cause its designated Affiliate or Affiliates
to) purchase, acquire and accept from Seller, and Seller shall sell,
transfer, assign, convey and deliver to Purchaser (or its designated Affiliate
or Affiliates) all of Seller’s right, title and interest in, to and under
the Purchased Assets, free and clear of all Liens except, in the case of
tangible property, for Permitted Exceptions. 
“Purchased Assets” shall mean the following assets, properties,
contractual rights, goodwill, going concern value, rights and claims of Seller,
wherever situated and of whatever kind and nature, real or personal, tangible
or intangible, whether or not reflected on the books and records of Seller:

(a)           all of Seller’s assets
relating to NetBank Business Finance, a division of the Bank (“NetBank
Finance”), including those set forth on Schedule 2.1(a);

(b)           subject to Section
2.1(d), all of Seller’s Mortgage Loans classified as held for investment as
set forth on Schedule 2.1(b) (the “Loans Held for Investment”);

(c)           all of Seller’s Leases classified as held for investment as set
forth on Schedule 2.1(c) (the “Leases Held for Investment”),
except for leases related to any CMC Litigation (“Excluded Leases”);

(d)           all loans (i) originated by Meritage Mortgage Corporation (“Meritage”) and
classified as held for investment as set forth on Schedule 2.1(d)(i) (the “Meritage Loans Held for Investment”) and
(ii) originated by Meritage, sold by Meritage or Seller and repurchased by
Meritage or Seller and classified as held for sale as set forth on Schedule
2.1(d)(ii) (the “Meritage
Loans Held For Sale”);  

(e)           all recreational vehicle, aircraft and other loans originated by Beacon
Credit Services, a division of Seller (“Beacon”), and classified as held
for investment as set forth on Schedule 2.1(e) (the “Beacon
Loans”);

(f)            all rights of Seller under the Assumed Real
Property Lease, together with all improvements, fixtures and other
appurtenances thereto and rights in respect thereof;

(g)           the Purchased Intellectual Property and the Purchased Technology;

(h)           all rights of Seller under the Purchased Contracts including all claims
or causes of action with respect to the Purchased Contracts;

(i)            all Documents that are owned by Seller and
used in or related to NetBank Finance, the Purchased Assets or the Assumed
Liabilities, including Documents relating to products, services, marketing,
advertising, promotional materials, Purchased Intellectual Property,
Intellectual Property Licenses, Purchased Technology, all files, customer
files, and documents (including credit information), supplier lists, records,
literature and correspondence, whether or not physically located on any of
Seller’s premises, but excluding personnel files for Employees;

(j)            all security deposits (including security for
rent, electricity, telephone or otherwise) and prepaid charges and
expenses, including any prepaid rent, prepaid insurance premiums, 

 14
 

prepaid utility expenses and interest on
subleases, of Seller and the Subsidiaries under each Purchased Contract;

(k)           all Permits, including environmental permits, used by Seller or any
Subsidiary in connection with NetBank Finance, the Assumed Liabilities or the
Purchased Assets and the Bank’s routing and transit numbers and the BIN Numbers
set forth on Schedule 2.11(c), the prefixes for all debit cards issued
by the Bank and outstanding as of the Closing and all rights and incidents of
interest therein;

(l)            all supplies owned by Seller and used in
connection with NetBank Finance, the Assumed Liabilities or the Purchased
Assets;

(m)          all rights of Seller under non-disclosure or confidentiality, non-compete,
or non-solicitation agreements with employees and agents of Seller or any
Subsidiary or with third parties, in each case to the extent relating to
NetBank Finance, the Assumed Liabilities, or the Purchased Assets (or any
portion thereof);

(n)           all rights of Seller under or pursuant to all warranties,
representations and guarantees made by suppliers, manufacturers and contractors
to the extent relating to products sold or services provided, to Seller or any
Subsidiary or to the extent affecting the Purchased Assets, Assumed Liabilities
or NetBank Finance;

(o)           all third party property and casualty insurance proceeds, and all
rights to third party property and casualty insurance proceeds, in each case to
the extent received or receivable in respect of the Assumed Liabilities, the
Purchased Assets or NetBank Finance;

(p)           all Receivables as of
the Closing;

(q)           all goodwill and other intangible assets associated with the Assumed
Liabilities, the Purchased Assets, or NetBank Finance including customer and
supplier lists, prospective client lists, broker and correspondent lists, and
the goodwill associated with the Purchased Intellectual Property and/or the
Purchased Technology; and 

(r)            all Overdraft
Accounts.

In addition, as a Purchased Asset, Purchaser will
become the beneficiary of credit life, accidental, health and any other
insurance written on loans and any other insurance on credit obligations or
collateral securing Mortgage Loans, Beacon Loans and Leases (collectively “Credit
Protection Instruments”) to the extent such Mortgage Loans, Beacon
Loans, and Leases are Purchased Assets.

2.2           Excluded Assets. 
Nothing herein contained shall be deemed to sell, transfer, assign or
convey the Excluded Assets to Purchaser, and Seller or its Affiliates shall
retain all right, title and interest to, in and under the Excluded Assets.  “Excluded Assets” shall include any
and all assets, properties, contractual rights, goodwill, going concern value,
rights and claims of Seller, wherever situated and of whatever kind and nature,
real or personal, tangible or intangible, whether or not reflected on the books
and records of Seller, which are not Purchased Assets, including, without
limitation, the following:

(a)           the Excluded Contracts;

(b)           all assets set forth on
Schedule 2.2(b);

 15
 

(c)           any claims, assets,
receivables or potential proceeds arising from the CMC Litigation and related
lease receivables;

(d)           any and all Contracts
pursuant to which Seller or any Subsidiary sold any Mortgage Loans, Beacon
Loans or Leases to any Person or Persons, including any amounts due from such
Persons pursuant to such Contracts (“Investor Contracts”);

(e)           Mortgage Loans
originated or repurchased by Market Street, including loans held for investment
that were originated by Market Street (other than Loans Held for Investment);

(f)            shares of capital stock, units, membership interests or any other
equity interests in Seller or any of its Affiliates;

(g)           cash, cash equivalents
and restricted cash;

(h)           investment securities
available for sale;

(i)            any assets used by Meritage;

(j)            all assets from Seller’s transaction
processing segment, including, without limitation, NetBank Payment Systems,
Inc. and Seller’s ATM services, point of sale transaction processing, online
banking programs, payment and deposit processing and mortgage servicing;

(k)           all automobile loans and related contracts, promissory notes, security
agreements, or secondary interests;

(l)            all deferred tax assets and tax net operating
carryforwards;

(m)          all interest rate swaps,
caps, floors, collars and option agreements or other interest rate risk
management arrangements (collectively, “Hedging Instruments”);

(n)           all rights in connection with, and assets of, any Employee Benefit
Plan, except to the extent otherwise provided in Article VIII hereof;

(o)           Excluded Real Property Leases;

(p)           all assets arising out of, under or in connection with the Bank’s bank-owned
life insurance policies;

(q)           all of the assets of
Market Street; 

(r)            all real-estate owned property (each a “REO”);

(s)           all Mortgage Loans or Beacon Loans subject to any Legal Proceeding
(excluding bankruptcy) or any other proceeding before a Governmental Body,
and except as set forth on Schedule 2.2(s) to the Disclosure
Letter;

(t)            all minute books, organizational documents,
stock registers and such other books and records of Seller, Parent, or their
respective Subsidiaries (including, without limitation, the Market Street Joint
Ventures) as pertain to ownership, organization or existence of Seller and
each Subsidiary and duplicate copies of such records as are necessary to enable
Seller and the Subsidiaries to file Tax Returns and reports;

 16
 

(u)           any Intellectual
Property that is not Purchased Intellectual Property and any Technology that is
not Purchased Technology; and

(v)           the Servicing Assets
which may be purchased pursuant to a separate servicing purchase agreement (the
“Servicing Purchase Agreement”). 

2.3           Assumption of Liabilities.  On
the terms and subject to the conditions set forth in this Agreement, at the
Closing, Purchaser shall (or shall cause its designated Affiliate or Affiliates
to) assume, effective as of the Closing, the following Liabilities of
Seller (collectively, the “Assumed Liabilities”):

(a)           the Liabilities of
NetBank Finance set forth on Schedule 2.3(a);

(b)           all of the Deposit
Liabilities; and 

(c)           all Liabilities of
Seller under the Purchased Contracts that arise out of or relate to the period
after the Closing Date.

2.4           Excluded Liabilities. 
Purchaser will not assume or be liable for any Excluded Liabilities.  Seller shall, and shall cause the
Subsidiaries to, timely perform, satisfy and discharge in accordance with their
respective terms all Excluded Liabilities. 
“Excluded Liabilities” shall mean the Liabilities of Seller and
the Subsidiaries that are not Assumed Liabilities, including, without
limitation:

(a)           all Liabilities
associated with the Investor Contracts;

(b)           all Liabilities associated with the operations of Parent, Seller and
the Subsidiaries, except as set forth in Section 2.3;

(c)           all Liabilities in respect of any and all products sold and/or services
performed by Parent, Seller or the Subsidiaries on or before the Closing Date;

(d)           except to the extent specifically provided in Article VIII,
all Liabilities arising out of, relating to or with respect to (i) the
employment or performance of services, or termination of employment or services
by Seller or any of its Affiliates of any individual on or before the Closing
Date; (ii) workers’ compensation claims against Seller or any of its Affiliates
that relate to the period on or before the Closing Date, irrespective of
whether such claims are made prior to or after the Closing or (iii) any
Employee Benefit Plan;

(e)           all Liabilities arising out of, under or in connection with the
Excluded Real Property Leases and any Contracts that are not Purchased
Contracts and, with respect to Purchased Contracts, Liabilities in respect of a
breach by or default of Parent, Seller or any Subsidiary accruing under such
Contracts with respect to any period prior to Closing;

(f)            all Liabilities arising out of, under or in
connection with any indebtedness of Seller or any of the Subsidiaries for
borrowed money or any other indebtedness of Seller or any of its Subsidiaries
(including, without limitation, any Federal Home Loan Bank indebtedness or
indebtedness arising from the issuance of trust preferred securities);

(g)           all Liabilities arising out of, under or in connection with the Bank’s
bank-owned life insurance policies;

 17
 

(h)           all Liabilities for (i) Transfer Taxes; (ii) Taxes of Parent,
Seller or the Subsidiaries; (iii) Taxes that relate to the Purchased
Assets or the Assumed Liabilities for taxable periods (or portions thereof) ending
on or before the Closing Date, including Taxes allocable to Seller and the Subsidiaries
pursuant to Section 11.2; and (iv) payments under any Tax
allocation, sharing or similar agreement (whether oral or written);

(i)            all Liabilities in respect of any pending or
threatened Legal Proceeding, or any claim arising out of, relating to or
otherwise in respect of (i) the operations of Parent, Seller or the
Subsidiaries, including, without limitation, any claim for preferential payment
by a bankruptcy trustee in respect of payments received by Parent, Seller or
the Subsidiaries prior to or on the Closing Date or (ii) any Excluded
Asset or Excluded Liability;

(j)            all Liabilities relating to any dispute with
any client or customer of Parent, Seller or the Subsidiaries;

(k)           any derivative Liabilities and Liabilities under any Hedging Instruments;

(l)            any amounts payable for securities purchased;

(m)          any amounts due to any Affiliate of Seller; and 

(n)           all of the escrow
accounts related to the Servicing Assets, which accounts may be assumed
pursuant to the Servicing Purchase Agreement and all of the escrow accounts
relating to the subservicing of loans of IXIS Real Estate Capital, Inc.

2.5           Further Conveyances and Assumptions; Consent
of Third Parties.

(a)           From time to time following the Closing and except as prohibited by
Law, Seller shall, or shall cause its Subsidiaries to, make available to
Purchaser such data in personnel records of Transferred Employees as is
reasonably necessary for Purchaser to transition such employees into Purchaser’s
records.

(b)           From time to time following the Closing, Seller and Purchaser shall,
and shall cause their respective Affiliates to, execute, acknowledge and
deliver all such further conveyances, notices, assumptions, releases and
acquittances and such other instruments, and shall take such further actions, as
may be reasonably necessary or appropriate to assure to Purchaser and its
respective successors or assigns, all of the properties, assets, rights,
titles, interests, estates, remedies, powers and privileges intended to be
conveyed to Purchaser under this Agreement and the Seller Documents and to
assure to Seller and its Affiliates and their successors and assigns, the
assumption of the liabilities and obligations intended to be assumed by
Purchaser under this Agreement and the Seller Documents, and to otherwise make
effective the transactions contemplated hereby and thereby.

(c)           If the balance due on any Mortgage Loan, Beacon Loan or Lease to be
purchased pursuant to this Agreement has been reduced by Seller as a result of
a payment by check received prior to the Closing, which item is returned after
the Closing, the purchase price applicable to the transferred loan or lease
shall be correspondingly increased, and an amount in cash equal to such
increase shall be paid by Purchaser to Seller promptly upon receipt of funds in
the amount of such returned item.

(d)           Nothing in this Agreement nor the consummation of the transactions
contemplated hereby shall be construed as an attempt or agreement to assign any
Purchased Asset, including any Contract, Permit, certificate, approval,
authorization or other right, which by its terms or by 

 18
 

Law is nonassignable without the consent of a
third party or a Governmental Body or is cancelable by a third party in the
event of an assignment or purported assignment (“Nonassignable Assets”) unless
and until such consent shall have been obtained.  Seller shall, and shall cause its
Subsidiaries to, use commercially reasonable efforts to cooperate with
Purchaser at its request in endeavoring to obtain such consents promptly.  To the extent permitted by applicable Law, in
the event consents to the assignment thereof cannot be obtained, such
Nonassignable Assets shall be held, as of and from the Closing Date, by either
Seller or the applicable Subsidiary of Seller for the benefit of Purchaser and
the covenants and obligations thereunder shall be performed by Purchaser in
Seller’s or such Subsidiary’s name and all benefits and obligations existing
thereunder shall be for Purchaser’s account. 
Seller shall take or cause to be taken at Purchaser’s expense such
actions in its name or otherwise as Purchaser may reasonably request so as to
provide Purchaser with the benefits of the Nonassignable Assets and to effect
collection of money or other consideration that becomes due and payable under the
Nonassignable Assets, and Seller or the applicable Subsidiary of Seller shall
promptly pay over to Purchaser all money or other consideration received by it
in respect of all Nonassignable Assets. 
As of and from the Closing Date, Seller on behalf of itself and its
Subsidiaries authorizes Purchaser, to the extent permitted by applicable Law
and the terms of the Nonassignable Assets, at Purchaser’s expense, to perform
all the obligations and receive all the benefits of Seller or its Subsidiaries
under the Nonassignable Assets and appoints Purchaser its attorney-in-fact
to act in its name on its behalf or in the name of the applicable Subsidiary of
Seller and on such Subsidiary’s behalf with respect thereto.

(e)           With respect to all Credit Protection Instruments, all coverage will
continue to be the obligation of the current insurer after the Closing Date and
for the duration of such insurance as provided under the terms of the policy or
certificate to the extent permitted under such Credit Protection Instruments
and without further cost to Seller.  If
Purchaser becomes the beneficiary of the Credit Protection Instruments, Seller
and Purchaser agree to cooperate in good faith to develop a mutually
satisfactory method by which the current insurer will make rebate payments to
and satisfy claims of the holders of such Credit Protection Instruments after
the Closing Date.  The parties’
obligations in this Section 2.5 are subject to any restrictions
contained in existing insurance contracts and to applicable Law.

2.6           Bulk Sales Laws. 
Purchaser hereby waives compliance by Seller and the Subsidiaries with
the requirements and provisions of any “bulk-transfer” Laws of any
jurisdiction that may otherwise be applicable with respect to the sale of any
or all of the Purchased Assets to Purchaser; provided, that Seller
agrees (i) to pay and discharge when due or to contest or litigate all
claims of creditors which are asserted against Purchaser or the Purchased
Assets by reason of such noncompliance, (ii) to indemnify, defend and hold
harmless Purchaser from and against any and all such claims in the manner
provided in Article X and (iii) to take promptly all necessary
action to remove any Lien which is placed on the Purchased Assets by reason of
such noncompliance.  Any “bulk-transfer”
Law that addresses Taxes shall be governed by Article XI and not by this
Section 2.6.

2.7           Purchase Price Allocation.  Not
later than 90 days after the Closing Date, Purchaser shall prepare and
deliver to Seller copies of Form 8594 and any required exhibits thereto (the “Asset
Acquisition Statement”) allocating the Purchase Price among the
Purchased Assets in accordance with Code Section 1060 and the Treasury
Regulations thereunder (and any similar provision of state, local or foreign
Law, as appropriate).  Purchaser shall
prepare and deliver to Seller from time to time revised copies of the Asset
Acquisition Statement (the “Revised Statements”) so as to report
any matters on the Asset Acquisition Statement that need updating (including
purchase price adjustments, if any).  The
Purchase Price paid by Purchaser for the Purchased Assets shall be allocated in
accordance with the Asset Acquisition Statement or, if applicable, the last
Revised Statement provided by Purchaser to Seller, and all income Tax Returns
and reports filed by Purchaser and Seller, or their respective Affiliates shall
be prepared consistently with such allocation. 
For purposes of this Section 2.7, the Purchased Assets include
the covenant not to compete as set forth in Section 7.7.

 19
 

2.8           Right to Control
Payment.  Purchaser shall have the
right, but not the obligation, to make any payment due from Seller or the
Subsidiaries with respect to any Excluded Liabilities which are not paid by
Seller or the Subsidiaries within seven Business Days following written request
for payment from Purchaser if Purchaser reasonably believes that such payment
is necessary to protect Purchaser’s interest in the Purchased Assets, NetBank
Finance and/or the Assumed Liabilities; provided, that if Seller or the
Subsidiaries advise Purchaser in writing during such seven Business Day period
that a good faith payment dispute exists or Seller or the Subsidiaries have
valid defenses to non-payment with respect to such Excluded Liability,
then Purchaser shall not have the right to pay such Excluded Liability.  Seller and the Subsidiaries agree to
reimburse Purchaser promptly and in any event within seven Business Days
following written notice of such payment by Purchaser for the amount of any
payment made by Purchaser pursuant to this Section 2.8.

2.9           Proration of Certain
Expenses.  Subject to Section 11.2
with respect to Taxes, all expenses and other payments in respect of all rents
and other payments due under the Assumed Real Property Lease and any other
leases constituting part of the Purchased Assets shall be prorated between
Seller and the Subsidiaries, on the one hand, and Purchaser, on the other hand,
as of the Closing Date.  Seller shall be
responsible for all rents (including any percentage rent, additional rent and
any accrued tax and operating expense reimbursements and escalations), charges
and other payments of any kind accruing during any period under the Assumed
Real Property Lease or any such other leases up to and including the Closing
Date; provided, that Seller reserves the right to dispute any Taxes owed
with respect to any computer equipment leases assumed by Purchaser.  Subject to any disputed Tax payments as set
forth above, Purchaser shall be responsible for all such rents, charges and
other payments accruing during any period under the Assumed Real Property Lease
or any such other leases that are Purchased Assets after the Closing Date.  Purchaser shall pay the full amount of any
invoices received by it and shall submit a request for reimbursement to Seller
for Seller’s share of such expenses and Seller shall pay the full amount of any
invoices received by it and Purchaser shall reimburse Seller for Purchaser’s
share of such expenses.

2.10         Receivables.  Seller shall provide reasonable assistance to
Purchaser in the collection of Receivables. 
If Seller or any of the Subsidiaries shall receive payment in respect of
Receivables that are included in the Purchased Assets, then Seller shall
promptly forward such payment to Purchaser. 

2.11         Assumption of Deposit
Liabilities.

(a)           Purchaser agrees to pay in accordance with law and customary banking
practices all properly drawn and presented checks, drafts and withdrawal orders
presented to Purchaser by mail, through automated teller machines, over the counter
or through the check clearing system or any other clearing system of the
banking industry, by depositors of the accounts assumed, whether drawn on the
checks, withdrawal or draft forms provided by Seller or by Purchaser, and in
all other respects to discharge, in the usual course of the banking business,
the duties and obligations of Seller with respect to the balances due and owing
to the depositors whose accounts are assumed by Purchaser.

(b)           If, after the Closing Date, any depositor, instead of accepting the
obligation of Purchaser to pay the Deposit Liabilities assumed, shall demand
payment from Seller for all or any part of any such assumed Deposit
Liabilities, Seller shall not be liable or responsible for making such payment;
provided, that, for purposes of maintaining relationships with Seller’s
Former Depositors, if Seller shall pay the same pursuant to mutually agreed
upon procedures, Purchaser agrees to reimburse Seller for any such payments,
Seller shall not be deemed to have made any representations or warranties to
Purchaser with respect to any such checks, drafts or withdrawal orders, and any
such representations or warranties implied by law are hereby expressly
disclaimed.  Seller and Purchaser shall
make arrangements to provide for the daily settlement with immediately
available funds by Purchaser of checks, drafts, withdrawal 

 20
 

orders, returns and other items presented to
and paid by Seller within 60 days after the Closing Date and drawn on or
chargeable to accounts that have been assumed by Purchaser; provided,
however, that Seller shall be held harmless and indemnified by Purchaser for
acting in accordance with such arrangements.

(c)           Effective as of the Closing Date, Seller shall assign its routing and
transit number and its debit card BIN numbers, each as identified on Schedule
2.11(c) to the Disclosure Letter, to Purchaser, and Purchaser shall
employ the routing and transit number with respect to the Deposit Liabilities
and transactions relating thereto. 
Purchaser and Seller agree, at Seller’s cost and expense to notify
Seller’s Former Depositors affected thereby, on or before the Closing, in a
form and on a date mutually acceptable to Seller and Purchaser, of Purchaser’s
assumption of Deposit Liabilities.  In
addition, Purchaser and Seller will jointly notify Seller’s affected depositors
by letter of the pending assignment of Seller’s deposit accounts to Purchaser,
which notice shall be at Seller’s cost and expense and in a form mutually
agreeable to Seller and Purchaser.  The
Purchaser may provide, at its sole expense, such customers with notices of
changes in terms and other information regarding the transaction contemplated
hereby.  The parties shall cooperate and
coordinate such notices and shall, to the extent practicable, combine mailings
and share the costs of any combined mailings.

(d)           Purchaser agrees to pay promptly to Seller an amount equivalent to the
amount of any checks, drafts or withdrawal orders credited to assumed Deposit
Liabilities as of the Closing that are returned to Seller after the Closing.

(e)           On and after the Deposit Conversion Date, Purchaser will assume and
discharge Seller’s duties and obligations in accordance with the terms and
conditions and Laws, rules and regulations that apply to the certificates,
accounts and other Deposit Liabilities assumed pursuant to this Agreement at
such Closing. 

(f)            On and after the Deposit Conversion Date,
Purchaser will maintain and safeguard in accordance with applicable Law and
sound banking practices, all account documents, deposit contracts, signature
cards, deposit slips, canceled items and other records related to the Deposit
Liabilities assumed under this Agreement, subject to Seller’s right of access
to such records as provided in this Agreement.

(g)           Seller will be entitled to impose normal fees and service charges on a
per item basis through Closing, but Seller will not impose periodic fees or
blanket charges in connection therewith.

(h)           After the Closing, Purchaser shall collect from Seller’s Former
Depositors amounts equal to any debit card chargebacks connected with a Deposit
Liability, and any Visa, MasterCard or other debit card chargebacks under the
MasterCard and Visa Merchant Agreements or other chargeback agreements between
Seller and Seller’s Former Depositors or amounts equal to any deposit items
returned to Seller after the Closing which were honored by Seller prior to the
Closing and remit such amounts so collected to Seller.  Purchaser agrees to immediately remit to Seller
any funds held in the Depositor’s related transferred account of Seller’s
Former Depositor when the Purchaser receives such notice from Seller, up to the
amount of the charged back or returned item that had been previously credited
by Seller, if such funds are available at the time of notification by Seller to
Purchaser of the charged back or returned item. 
Notwithstanding the foregoing, Purchaser shall have not duty to remit
funds for any item or charge that has been improperly returned or charged to Seller.   

(i)            Any cash items paid by
Seller and not cleared prior to the Closing Date shall be the responsibility of
Seller.

 21
 

ARTICLE III

CONSIDERATION

3.1           Purchase Price.  The
purchase price (the “Purchase Price”) shall be an amount equal to
the sum of (i) the Aggregate Purchased Loan Value; less
(ii) the amount of the Deposit Liabilities (the “Deposit Liabilities
Amount”); plus (iii) the Book Value of
the Purchased Assets set forth in Section 2.1(a) as of the Closing
Date and the Book Value of the Leases Held For Investment (collectively, the “NetBank
Finance Purchased Assets”) net of the Assumed Liabilities set forth in
Section 2.3(a) as of the Closing Date (the “NetBank Assumed
Liabilities”) (collectively, the “NetBank Finance Book Value”);
plus (iv) Five Million Dollars
($5,000,000) (the “Premium”). 
The Purchaser shall withhold the Holdback Amount, which is being held
back pursuant to the holdback agreement in the form attached hereto as Exhibit
B (the “Holdback Agreement”).

3.2           Estimated Purchase Price.

(a)           Seller shall furnish to
Purchaser, at least 10 days prior to the Closing, a statement (the “Estimated
Closing Statement”) reflecting (i) the estimated unpaid balances
of the Purchased Loans as of the Closing Date and the estimated Aggregate
Purchased Loan Value (the “Estimated Aggregate Purchased Loan Value”),
(ii) the estimated Deposit Liabilities Amount, and (iii) the
estimated NetBank Finance Book Value in a form with sufficient detail to
itemize assets and liabilities (the “Estimated NetBank Finance Book Value”).  The Seller shall furnish to Purchaser a
statement detailing the estimated calculation of the Purchase Price (“Preliminary
Purchase Price Estimate”), which shall equal the sum of (1) the sum of
clauses (i) through (iii) in the immediately preceding sentence; plus (2) the Premium.

(b)           On the Closing Date,
Seller shall update the Preliminary Purchase Price Estimate to reflect the
Aggregate Purchased Loan Value, the Deposit Liabilities Amount and the NetBank
Finance Book Value each as of the night prior to Closing after the completion
of nightly processing (the “Pricing Adjustment”).  The Estimated Purchase Price shall be the
Preliminary Purchase Price Estimate, as adjusted by the Pricing Adjustment.

3.3           Closing Payment.  The closing payment (the “Closing Payment”) shall
be equal to the Estimated Purchase Price less the Holdback Amount.  In the event that the Closing Payment is a
positive amount, the Closing Payment will be paid by Purchaser at the Closing
by wire transfer of immediately available funds to an account of Seller designated
to Purchaser at least five Business Days prior to the Closing.  In the event that the Closing Payment is a
negative amount, the Closing Payment will be paid by Seller at the Closing by
wire transfer of immediately available funds to an account of Purchaser
designated to Seller at least five Business Days prior to the Closing.

3.4           Final Purchase Price .  As soon as practicable after the Closing, but
in no event later than 45 days after the Closing Date, Purchaser will prepare
(or cause to be prepared) and deliver to Seller a statement as of the
close of business on the Closing Date (the “Final Closing Statement”) based
on updated electronic data files and balance sheet information setting forth (i) the Aggregate Purchased Loan Value,
(ii) the Deposit Liabilities Amount and (iii) the NetBank Finance
Book Value (including changes in the unpaid balances of the Leases Held
for Investment) as of the Closing Date with a calculation of the Purchase
Price based on the sum of (1) the sum of clauses (i) through (iii) of
this sentence, plus (2) the Premium (the “Final
Purchase Price”). The Final Purchase Price will be prepared using the
methodologies set forth in this Agreement including the schedules hereto and,
in the case of Book Value determinations, by applying the same accounting
principles and procedures as are contemplated by the definition of Book Value
as contained herein.  No later than five
Business Days after the delivery of the Final Closing Statement:

 22

(a)           if the Estimated Purchase Price is greater than the Final Purchase
Price, and the amount of such difference is greater than the Purchase Price
Holdback Amount, then the Purchase Price Holdback Amount shall be reduced to
zero and Seller shall pay to Purchaser the amount by which the difference
between the Estimated Purchase Price and Final Purchase Price exceeds the
Purchase Price Holdback Amount, plus simple interest on the amount of such
difference from the Closing Date to the date of payment at an interest rate
equal to six percent (6.0%) per annum by wire transfer of immediately
available funds to such account or accounts of Purchaser designated pursuant to
Section 3.3;

(b)           if the Estimated Purchase Price is greater than the Final Purchase
Price, and the amount of such difference is less than the Purchase Price
Holdback Amount, then the Purchase Price Holdback Amount shall be reduced by
the amount of such difference and any remaining Purchase Price Holdback Amount
shall be paid by Purchaser to Seller to such account or accounts of Seller
designated pursuant to Section 3.3; or

(c)           if the Final Purchase
Price is greater than the Estimated Purchase Price, then (A) Purchaser
shall pay to Seller the amount of the difference between the Estimated Purchase
Price and the Final Purchase Price, plus simple interest on the amount of such
difference from the Closing Date to the date of payment at an interest rate
equal to six percent (6.0%) per annum and (B) the Purchase Price
Holdback Amount shall be disbursed to Seller, in each case by wire transfer of
immediately available funds to such account or accounts of Seller designated
pursuant to Section 3.3.

3.5           Holdback Amount.  On
the Closing Date, the Purchaser shall withhold or be paid by Seller in
accordance with Section 3.3: (a) the Purchase Price Holdback Amount
for disbursement in accordance with the terms of this Agreement and which will
be held for purposes of adjustment between the Estimated Purchase Price and the
Final Purchase Price, and (b) the Indemnification Holdback Amount which
will be held for purposes of making indemnification payments pursuant to Article
X. Purchaser and Seller agree that the Holdback Amount is part of the
consideration paid to Seller and the obligation to pay the Holdback Amount to
Seller is absolute and unconditional, subject only to the terms and conditions
of this Agreement.  The remaining
Indemnification Holdback Amount shall be released to Seller within five Business Days following the third anniversary of
the Closing by wire transfer of immediately available funds to such account or
accounts of Seller as Seller specifies in writing to Purchaser in the manner
specified herein for the delivery of notices; provided, that if
Purchaser has submitted a notice for indemnification on or prior to the third  anniversary of the Closing and such indemnification claim
is not finally determined until after the third anniversary of the Closing,
then the Indemnification Holdback Amount shall remain subject to
indemnification claim and any remaining portion of the Indemnification Holdback
Amount shall not be released to Seller until after such indemnification claim
shall have been finally determined and any indemnification payments to
Purchaser have been made.

ARTICLE IV

CLOSING AND TERMINATION

4.1           Closing Date. 
Subject to the satisfaction of the conditions set forth in Sections
9.1 and 9.2 hereof (or the waiver thereof by the party entitled to
waive that condition), the closing of the purchase and sale of the Purchased
Assets and the assumption of the Assumed Liabilities provided for in Article II
hereof (the “Closing”) shall take place at the offices of Alston
& Bird LLP located at the Atlantic Building, 950 F Street N.W. Washington,
D.C. 20004 (or at such other place as the parties may designate in writing) at
10:00 a.m. (New York City time) on a date to be specified by the parties,
which date shall be no later than the third Business Day after satisfaction or
waiver of the conditions set forth in Article IX (other than conditions
that by their nature are to be satisfied at the Closing, but subject to the
satisfaction or waiver of such conditions), unless another time or date, or
both, are agreed to in writing by the parties 

 23
 

hereto. 
The date on which the Closing shall be held is referred to in this
Agreement as the “Closing Date.”

4.2           Termination of Agreement.  This
Agreement may be terminated prior to the Closing as follows:

(a)           At the election of Seller or Purchaser on or after August 31, 2007 if
the Closing shall not have occurred by the close of business on such date; provided,
that the terminating party is not in material breach of any of its
representations, warranties, covenants or agreements hereunder;

(b)           by mutual written consent of Seller and Purchaser;

(c)           by Seller or Purchaser if there shall be in effect a final
nonappealable Order of a Governmental Body of competent jurisdiction
restraining, enjoining or otherwise prohibiting the consummation of the
transactions contemplated hereby, it being agreed that the parties hereto shall
promptly appeal any adverse determination which is appealable (and pursue such
appeal with reasonable diligence);

(d)           by Purchaser upon written notice from Purchaser to Seller that there
has been an event, change, occurrence or circumstance that has had or has a
reasonable likelihood of having a Material Adverse Effect;

(e)           by Purchaser upon written notice from Purchaser to Seller if Seller,
Parent or Market Street files bankruptcy, becomes insolvent or is the subject
of any involuntary bankruptcy or receivership proceeding;

(f)            by Purchaser upon written notice from Seller
to Purchaser that Seller or any of Seller’s Affiliates has executed or entered
into an agreement that would result in an Acquisition Transaction;

(g)           by Purchaser, if there shall have been a breach by any Seller of any
representation, warranty, covenant or agreement of such Seller set forth in
this Agreement, which breach would give rise to a failure of a condition set
forth in Sections 9.1(a), or 9.1(b) and is incapable of
being cured or, if capable of being cured, shall not have been cured within ten
Business Days following receipt by Seller of written notice of such breach from
Purchaser; or

(h)           by Seller, if there shall have been a breach by Purchaser of any
representation, warranty, covenant or agreement of Purchaser set forth in this
Agreement, which breach would give rise to a failure of a condition set forth
in Sections 9.2(a) or 9.2(b) and is incapable of being
cured or, if capable of being cured, shall not have been cured within ten Business
Days following receipt by Purchaser of notice of such breach from Seller.

4.3           Effect of Termination.  In
the event that this Agreement is validly terminated as provided herein, then
each of the parties shall be relieved of their duties and obligations arising
under this Agreement after the date of such termination and such termination
shall be without liability to Purchaser or Seller; provided, that (a) if
this Agreement is terminated by Purchaser pursuant to Section 4.2(e) (other
than in connection with any involuntary bankruptcy or receivership), Section
4.2(f) or Section 4.2(g), and within 12 months after such
termination, Seller executes an agreement that would result in an Acquisition
Transaction, then Seller shall, in addition to any other Liabilities accruing
hereunder, pay to Purchaser within five Business Days of consummation of such
Acquisition Transaction (i) the cost of all filing or other fees paid by
Purchaser to any Governmental Body in respect of the transactions contemplated
by 

 24
 

this Agreement and (ii) an amount equal
to $6,000,000; (b) the obligations of the parties set forth in this Section
4.3 and Articles X and XII hereof shall survive any such
termination and shall be enforceable hereunder; and (c) nothing in this Section
4.3 shall relieve Purchaser or Seller of any Liability for a breach of this
Agreement, the representations, warranties or covenants of Purchaser or Seller
contained in this Agreement or in any Seller Documents or Purchaser Documents
prior to the effective date of such termination.

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF SELLER

Except as set forth in the
Disclosure Letter provided by Seller to Purchaser as of the date of this
Agreement (the “Disclosure Letter”), Seller hereby represents and
warrants to Purchaser that:

5.1           Organization and Good Standing.

(a)           Seller and Market Street are duly organized, validly existing and in
good standing under the laws of its respective jurisdiction of incorporation or
organization, with full corporate power and authority to conduct its business
as it is now being conducted, to own or use the properties or assets that it
purports to own or use, and, with respect to Seller only, to perform all of its
respective obligations in connection with the Purchased Assets, Assumed
Liabilities, and NetBank Finance. Seller is duly qualified or licensed to do
business as a foreign corporation and is in good standing as a foreign
corporation, in each jurisdiction in which either the ownership or use of the
properties owned or used by it, or the nature of the activities conducted by
it, requires such licensing, qualification or good standing, except for such
failures to so qualify that would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on Seller.

(b)           Seller has made available or delivered to Purchaser a true and complete
copy of its certificates of incorporation and bylaws (or equivalent
organizational documents), each as amended to date, and such documents are in
full force and effect.

5.2           Authorization of Agreement. 
Seller has all requisite corporate power, authority and legal capacity
to execute and deliver this Agreement and the Seller Documents and Seller has
all requisite corporate power, authority and legal capacity to execute and
deliver each other agreement, document, or instrument or certificate to be
executed by Seller and delivered to Purchaser pursuant to this Agreement (the “Seller
Documents”), to perform their respective obligations hereunder and
thereunder and to consummate the transactions contemplated hereby and
thereby.  The execution and delivery of
this Agreement and the Seller Documents and the consummation of the
transactions contemplated hereby and thereby have been approved by the Board of
Directors of Parent and have been duly authorized by all requisite corporate
action on the part of Seller and no other corporate action is required by
Seller and its Affiliates for the authorization and execution of this Agreement
and the Seller Documents and the transactions contemplated hereby and
thereby.  This Agreement has been, and
each of the Seller Documents will be at or prior to the Closing, duly and
validly executed and delivered by the Bank and (assuming the due authorization,
execution and delivery by the other parties hereto and thereto) this
Agreement constitutes, and each of the Seller Documents when so executed and
delivered will constitute, legal, valid and binding obligations of Seller, as
the case may be, enforceable against it in accordance with their respective
terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium
and similar laws affecting creditors’ rights and remedies generally, and
subject, as to enforceability, to general principles of equity, including
principles of commercial reasonableness, good faith and fair dealing
(regardless of whether enforcement is sought in a proceeding at law or in
equity).  The fair value of the Purchased
Assets as of the date of the most recent available financial information does
not exceed two-thirds 

 25
 

of the fair value of the assets of Parent on
a consolidated basis.  The portion of
Parent’s consolidated revenues for the year ended December 31, 2006
represented or produced by the Purchased Assets does not exceed two-thirds
of Parent’s consolidated revenues for the year ended December 31, 2006.

5.3           Conflicts; Consents of Third Parties.

(a)           Except as set forth on Schedule 5.3(a) to the Disclosure
Letter, none of the execution and delivery by Seller of this Agreement or by
Seller of the Seller Documents, the consummation of the transactions
contemplated hereby or thereby, or compliance by Seller with any of the
provisions hereof or thereof will conflict with, or result in any violation of
or default (with or without notice or lapse of time, or both) under, or
give rise to a right of termination, cancellation or acceleration of any
obligation or to loss of a material benefit under, or give rise to any
obligation of Seller to make any payment under, or to the increased,
additional, accelerated or guaranteed rights or entitlements of any Person
under, or result in the creation of any Liens upon any of the properties or
assets of Seller or the Subsidiaries under, any provision of: (i) the
certificate of incorporation and by-laws or comparable organizational
documents of a Seller; (ii) any Contract or Permit to which a Seller or
any Subsidiary is a party or by which any of the properties or assets of
Seller; (iii) any Order of any Governmental Body applicable to Seller or
by which any of the properties or assets of Seller are bound; or (iv) any
applicable Law.

(b)           No consent, waiver, approval, Permit or authorization of, or filing
with, or notification to, any Person or Governmental Body is required on
the part of Seller in connection with (i) the execution and delivery of
this Agreement or the Seller Documents, the compliance by Seller with any of
the provisions hereof or thereof, the consummation of the transactions
contemplated hereby or thereby or the taking by Seller of any other action
contemplated hereby or thereby or (ii) the continuing validity and
effectiveness immediately following the Closing of any Contract or Permit of
Seller, except (A) for (1) filings of applications and notices with,
receipt of approvals or nonobjections from, and expiration of related waiting
periods required by the OTS and the Federal Deposit Insurance Corporation (“FDIC”) and
(2) compliance with the applicable requirements of the HSR Act(1) and
(B) as set forth on Schedule 5.3(b) to the Disclosure Letter.

5.4           Financial Statements.

(a)           Seller has delivered to Purchaser copies of (i) the audited
consolidated balance sheet of Parent, the Bank and the Subsidiaries as at
December 31, 2005 and the related audited consolidated statements of income and
of cash flows of Parent, the Bank and the Subsidiaries for the year then ended
and (ii) the unaudited consolidated balance sheets of Parent, the Bank and
the Subsidiaries as at December 31, 2006 and each month end from January
2007 through April 2007 and the related consolidated statements of income and
cash flows of Parent, the Bank and the Subsidiaries for the periods ending
December 31, 2006 and each month end from January 2007 through
April 2007 (such audited and unaudited statements, including the related
notes and schedules thereto, are referred to herein as the “Financial
Statements”).  Except as adjustments
are required by Parent’s or Seller’s interdependent auditor in connection with
the audited consolidated balance sheets of Parent, the Bank and the
Subsidiaries as of December 31, 2006, each of the Financial Statements is
complete and correct in all material respects, has been prepared in accordance
with GAAP consistently applied without modification of the accounting
principles used in the preparation thereof throughout the periods presented,
subject, in the case of unaudited Financial Statements, to normal recurring
year-end adjustments (the effect of which 

(1)           HSR
Act filing requirement to be discussed with Seller’s counsel.

 26
 

will not, individually or in the aggregate,
be material in amount or effect) and the absence of notes (that, if
presented, would not differ materially from those included in the audited
Financial Statements), and presents fairly in all material respects the
consolidated financial position, results of operations and cash flows of
Parent, the Bank and the Subsidiaries as at the dates and for the periods
indicated.  As of their respective dates,
the Financial Statements did not, and any financial statements subsequent to
the date hereof will not, contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements made therein, in light of the circumstances in which they
were made, not misleading.

For the purposes hereof, the
unaudited consolidated balance sheet of Parent, the Bank and the Subsidiaries
as at March 31, 2007 is referred to as the “Balance Sheet” and March 31,
2007 is referred to as the “Balance Sheet Date.”

(b)           Seller, Parent and Market Street make and keep books, records and
accounts which, in reasonable detail, accurately and fairly reflect the
acquisitions and dispositions of their respective assets.  Seller and the Subsidiaries maintain systems
of internal accounting controls sufficient to provide reasonable assurances
that:  (i) transactions are executed
in accordance with management’s general or specific authorization; (ii) transactions
are recorded as necessary to permit the preparation of financial statements in
conformity with GAAP and to maintain accountability for assets; (iii) access
to assets is permitted only in accordance with management’s general or specific
authorization; and (iv) the recorded accountability for assets is compared
with the actual levels at reasonable intervals and appropriate action is taken
with respect to any differences.  The
Financial Statements were compiled and will be compiled from and are and will
be in accordance with the books and records of Seller and the Subsidiaries. The
books and records (including the books of account, minute books, stock record
books and other records) of Seller and the Subsidiaries, all of which have
been made available to Purchaser, are true and complete, have been maintained
in accordance with sound business practices and accurately present and reflect
in all material respects all of the transactions and actions therein described.
At the Closing, all of those books and records shall be in the possession of
Seller.

(c)           The financial projections regarding NetBank Finance provided by Seller
to Purchaser prior to the date hereof were reasonably prepared on a basis
reflecting the best estimates, assumptions and judgments of management of
Seller, at the time provided to Purchaser and as of the date hereof, as to the
future financial performance of NetBank Finance.

(d)           Seller has provided to
Purchaser copies of all issued auditors’ reports, letters to management
regarding accounting practices and systems of internal control, and responses
to such letters from management, in each case to the extent relating to the
Purchased Assets and NetBank Finance and the operation thereof, whether the
same are issued to a Seller or any of its Affiliates.

(e)           Except as contemplated
by this Agreement, since April 30,
2007, there has been no change in the condition (financial or otherwise),
business, operations, assets or liabilities of Seller or any of its
Subsidiaries that has had, or could reasonably be expected to have either
individually or in the aggregate, a Material Adverse Effect.

5.5           No Undisclosed Liabilities. 
Seller does not have any indebtedness, obligations or Liabilities of any
kind other than those that do not arise out of or relate to the Purchased
Assets, Assumed Liabilities or NetBank Finance.

5.6           Title to Purchased Assets; Sufficiency. 
Seller owns and has good and marketable title to each of the Purchased
Assets, free and clear of all Liens other than Permitted Exceptions.  Except as set forth on Schedule 5.6 to
the Disclosure Letter, the Purchased Assets are sufficient for Purchaser to 

 27
 

conduct the business of NetBank Finance from and
after the Closing Date without interruption and in the Ordinary Course of
Business.

5.7           Absence of Certain Developments. 
Except as contemplated by this Agreement or as set forth on Schedule
5.7 to the Disclosure Letter, since the Balance Sheet Date (a) Seller
has used and operated the Purchased Assets, and NetBank Finance only in the
Ordinary Course of Business and (b) there has not been any event, change,
occurrence or circumstance that has had or has a reasonable likelihood of
having (i) a Material Adverse Effect or (ii) a materially adverse
effect on the condition (financial or otherwise), assets, prospects or results
of operations of Seller, Parent, or Market Street.  Without limiting the generality of the
foregoing, except as set forth on Schedule 5.7 to the Disclosure Letter,
since the Balance Sheet Date:

(i)            Seller has not incurred any
Liabilities of any nature other than items incurred in the regular and Ordinary
Course of Business, consistent with past practice, or increased (or experienced
any change in the assumptions underlying or the methods of calculating) any
bad debt, contingency, or other reserve;

(ii)           there has not been any damage, destruction or loss, whether or not
covered by insurance, with respect to the Seller Property, or the personal
property that comprises the Purchased Assets or NetBank Finance, having a
replacement cost of more than $50,000 for any single loss or $100,000 for all
such losses;

(iii)          Seller has not (A) increased the salary, bonus or other
compensation (other than compensation increases not exceeding five percent
(5.0%) per annum and otherwise made in the Ordinary Course of Business) of
any Employee; (B) increased the benefits, waivers or variations for the
benefit of any such Employee, or otherwise amended, or made payments or grants
of awards that were not required, under any Employee Benefit Plan, or adopted
or executed of any new Employee Benefit Plan (other than any such events in the
Ordinary Course of Business); or (C) established, assumed, adopted or
amended any collective bargaining agreement or recognized any labor
organization as the collective bargaining representative of any Employees;

(iv)          Seller has not executed any employment, severance, change in control or
similar agreements, other than in the Ordinary Course of Business;

(v)           Seller has not made or rescinded any election relating to Taxes,
settled or compromised any claim, action, suit, litigation, proceeding,
arbitration, investigation, audit or controversy relating to Taxes, or except
as may be required by applicable Law, made any change to any of its methods of
reporting income or deductions for federal income tax purposes from those
employed in the preparation of its most recently filed Tax Returns, in each
case, to the extent related to the Purchased Assets or NetBank Finance;

(vi)          there has not been any material change in the (A) business
organization of NetBank Finance (including all agency, brokerage and similar
relationships of NetBank Finance; (B) services provided by the advisors,
managers, officers, Employees, underwriters, agents, brokers or sales
representatives of NetBank Finance or; (C) relationships and goodwill with
customers, suppliers, correspondents, investors, credit enhancers, attorneys,
licensors, landlords, creditors, employees, agents, brokers, and others having
business relationships with NetBank Finance; or (D) existing levels of
insurance coverage of Seller;

(vii)         Seller has not failed to promptly pay and discharge current Liabilities
except for Liabilities not material in amount that are disputed in good faith
by appropriate proceedings;

 28
 

(viii)        Seller has not sold, assigned, transferred, conveyed, leased or
otherwise disposed of any assets of Seller or any Subsidiary that were material
to the Purchased Assets or NetBank Finance, except for assets acquired or sold,
assigned, transferred, conveyed, leased or otherwise disposed of in the Ordinary Course of Business;

(ix)           Seller has not written up the value of any Purchased Assets with
a book value on the Balance Sheet in excess of $5,000, determined as
collectible any Receivable in excess of $50,000, or any portion thereof in
excess of $25,000, which were previously considered uncollectible, or written
off as uncollectible any Receivable or any portion thereof, except for write-downs,
write-ups, and write-offs in the Ordinary Course of Business, none
of which is material in amount;

(x)            Seller has not instituted or settled any
material Legal Proceeding affecting the Purchased Assets or Assumed
Liabilities;

(xi)           Seller has not granted any license or sublicense of any rights under or
with respect to any Purchased Intellectual Property;

(xii)          Seller has not agreed, committed, arranged or entered into any
understanding to do anything set forth in this Section 5.7.

5.8           Taxes.  There are no Liens
relating or attributable to Taxes with respect to, or in connection with, the
Purchased Assets, the Assumed Liabilities or NetBank Finance.  Insofar as factual matters relating to Seller
or its respective Subsidiaries are concerned, there is no basis for the
assertion of any claim for Taxes which, if adversely determined, would or is
reasonably likely to result in the imposition of any Lien on the Purchased
Assets, the Assumed Liabilities or NetBank Finance or otherwise adversely
affect Purchaser, or Seller or their use of such assets.

5.9           Real Property.

(a)           The Seller Property and the buildings, fixtures and improvements
thereon owned or leased by a Seller are in good operating condition and repair
(subject to normal wear and tear). 
Seller has delivered or otherwise made available to Purchaser true,
correct and complete copy of the Assumed Real Property Lease, together with all
amendments, modifications or supplements thereto, including any assignments
thereof, and each and every instrument constituting the Assumed Real Property
Lease, including all of said amendments, modifications, supplements and
assignments, is accurate and completely identified in Schedule 5.9(a) to
the Disclosure Letter.

(b)           Seller has a valid and enforceable leasehold interest under the Assumed
Real Property Lease, subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting creditors’ rights and
remedies generally and subject, as to enforceability, to general principles of
equity (regardless of whether enforcement is sought in a proceeding at law or
in equity).  The Assumed Real Property
Lease is in full force and effect, and Seller has not received or given any
notice of any default or event that with notice or lapse of time, or both, would
constitute a default by Seller under the Assumed Real Property Lease and, to
the Knowledge of Seller, no other party is in default thereof, and no party to
the Assumed Real Property Lease has exercised any termination rights with
respect thereto.

(c)           Seller has all material certificates of occupancy and Permits of any
Governmental Body necessary or useful for the current use and operation of the
Seller Property, and Seller has fully complied with all material conditions of
the Permits applicable to them.  No
default or violation, or event 

 29
 

that with the lapse of time or giving of
notice or both would become a default or violation, has occurred in the due
observance of any Permit.

(d)           There does not exist any actual or, to the Knowledge of Seller, threatened
or contemplated condemnation or eminent domain proceedings that affect the
Seller Property or any part thereof, and Seller has not received any notice,
oral or written, of the intention of any Governmental Body or other Person to
take or use all or any part thereof.

(e)           Seller has not received any notice from any insurance company that has
issued a policy with respect to the Seller Property requiring performance of
any structural or other repairs or alterations to such Seller Property.

5.10         Tangible Personal Property.

(a)           Seller has good and marketable title to all of the items of tangible
personal property that are or will be Purchased Assets (except as sold or
disposed of subsequent to the date thereof in the Ordinary Course of Business),
free and clear of any and all Liens, other than Permitted Exceptions.  All such items of tangible personal property
are in good condition and in a state of good maintenance and repair (ordinary
wear and tear excepted) and are suitable for the purposes used.

(b)           Schedule 5.10 to the Disclosure
Letter sets forth all leases of
personal property involving annual payments in excess of $10,000 relating to
personal property used by Seller exclusively in connection with NetBank Finance
or by which the properties or assets of NetBank Finance is bound (“Personal
Property Leases”).  All of the items
of personal property under the Personal Property Leases are in good condition
and repair and are suitable for the purposes used, and such property is in all
material respects in the condition required of such property by the terms of
the lease applicable thereto during the term of the lease.  Seller has delivered or otherwise made
available to the Purchaser true, correct and complete copies of the Personal
Property Leases, together with all amendments, modifications or supplements
thereto.

(c)           Seller has a valid and enforceable leasehold interest under each of the
Personal Property Leases under which it is a lessee, subject to applicable
bankruptcy, insolvency, reorganization, moratorium and similar laws affecting
creditors’ rights and remedies generally and subject, as to enforceability, to
general principles of equity (regardless of whether enforcement is sought in a
proceeding at law or in equity).  Each of
the Personal Property Leases is in full force and effect.  There is no default under any Personal
Property Lease by Seller or, to the Knowledge of Seller, by any other party
thereto, and no event has occurred that with the lapse of time or the giving of
notice or both would constitute a default thereunder.  No party to any of the Personal Property
Leases has exercised any termination rights with respect thereto.

5.11         Intellectual Property.

(a)           Schedule 5.11(a) to the Disclosure Letter sets forth an
accurate and complete list of all Patents, registered Marks, pending
applications for registration of Marks, unregistered Marks, registered
Copyrights, and pending applications for registration of Copyrights owned by
Seller, Parent or any Subsidiary or used by such entity in the conduct of its
business.  Schedule 5.11(a) to
the Disclosure Letter lists (i) the jurisdictions in which each such item
has been issued, registered, otherwise arises or in which any such application
for such issuance and registration has been filed and (ii) the registration
or application date, as applicable.

 30
 

(b)           Except as disclosed in Schedule 5.11(b) to the Disclosure
Letter, Seller is the sole and exclusive owner of all right, title and interest
in and to all of the Purchased Intellectual Property and the Purchased Intellectual
Property includes each of the Copyrights in any works of authorship prepared by
or for a Seller that resulted from or arose out of any work performed by or on
behalf of a Seller or by any employee, officer, consultant or contractor of any
of them.  Except as disclosed in Schedule
5.11(b) to the Disclosure Letter, to the Knowledge of Seller, Seller
is the sole and exclusive owners of, or have valid and continuing rights to
use, sell and license, as the case may be, all Purchased Intellectual Property
as the same is used, sold and licensed in its business as presently conducted
and proposed to be conducted, free and clear of all Liens or obligations to
others (except for those specified licenses included in Schedule 5.11(e) to
the Disclosure Letter).

(c)           The Purchased Intellectual Property, the manufacturing, licensing,
marketing, importation, offer for sale, sale or use of any products and
services in connection with the respective business operations of the Seller as
presently and as currently proposed to be conducted in connection with the
Purchased Assets, Assumed Liabilities or NetBank Finance, and the present and
currently proposed business practices, methods and operations of Seller
relating to the Purchased Assets, Assumed Liabilities or NetBank Finance do not
infringe, constitute an unauthorized use, misappropriation or violation of any
Copyright, Trade Secret or other similar right of any Person and, to the
Knowledge of Seller, do not infringe, constitute an unauthorized use of,
misappropriate, dilute or violate any other Intellectual Property or other
right of any Person (including pursuant to any non-disclosure agreements
or obligations to which Seller or any of its Affiliates or any of their present
or former employees is a party).  The Purchased
Intellectual Property and the Intellectual Property Licenses include all of the
Intellectual Property necessary and sufficient to enable Seller to conduct its
businesses in the manner in which it is currently being conducted.

(d)           Except with respect to licenses of commercial off-the-shelf
Software available on reasonable terms for a license fee of no more than
$10,000, and except pursuant to the Intellectual Property Licenses listed in Schedule
5.11(e) to the Disclosure Letter, Seller is not required, obligated,
or under any Liability whatsoever, to make any payment by way of royalties,
fees or otherwise to any owner, licensor of, or other claimant to any Purchased
Intellectual Property, or other third Person, with respect to the use thereof
or in connection with the conduct of their respective business operations as
currently conducted or proposed to be conducted.

(e)           Schedule 5.11(e) to the Disclosure Letter sets forth a
complete and accurate list of all Contracts, excluding Contracts for off-the-shelf
Software available on reasonable terms for a license fee of no more than
$10,000, related to the Purchased Assets, Assumed Liabilities and NetBank
Finance (i) to which Seller is a party (A) granting any Intellectual
Property License, (B) containing a covenant not to compete or otherwise
limiting its ability to (x) exploit fully any of the Purchased
Intellectual Property or (y) conduct their respective business operations
in any market or geographical area or with any Person or (ii) to which
Seller is a party containing an agreement to indemnify any other Person against
any claim of infringement, unauthorized use, misappropriation, dilution or
violation of Intellectual Property.

(f)            Each of the licenses for Purchased
Intellectual Property and Intellectual Property Licenses is in full force and
effect and is the legal, valid and binding obligation of the Seller,
enforceable against it in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium and similar laws affecting
creditors’ rights and remedies generally and subject, as to enforceability, to
general principles of equity (regardless of whether enforcement is sought in a
proceeding at law or in equity).  Seller
is not in default under any Intellectual Property License, nor, to the
Knowledge of Seller, is any other party to an Intellectual Property License in
default thereunder, and no event has occurred that with the lapse of time or
the giving of notice or both would constitute a default thereunder.  No party to any of the Intellectual Property
Licenses has exercised any termination rights 

 31
 

with respect thereto.  Seller has, and will transfer to Purchaser at
the Closing, good and valid title to the Intellectual Property Licenses, free
and clear of all Liens other than Permitted Exceptions.  Seller has delivered or otherwise made
available to Purchaser true, correct and complete copies of all of the
Intellectual Property Licenses, together with all amendments, modifications or
supplements thereto.

(g)           No Trade Secret or any other non-public, proprietary information
included in the Purchased Assets material to respective businesses of the
Seller as presently conducted and proposed to be conducted has been authorized
to be disclosed or has been actually disclosed by Seller to any of their
employees or any third Person other than pursuant to a non-disclosure
agreement restricting the disclosure and use of the Purchased Intellectual
Property.  Seller has taken adequate
security measures to protect the secrecy, confidentiality and value of all the
Trade Secrets included in the Purchased Intellectual Property and any other non-public,
proprietary information included in the Purchased Technology, which measures
are reasonable in the industries in which Seller operates.  Each employee, consultant and independent
contractor of Seller has entered into a written non-disclosure and
invention assignment agreement with them in a form reasonably acceptable to
them and provided to Purchaser prior to the date hereof.

(h)           As of the date hereof, neither Seller nor Parent is the subject of any
pending or, to the Knowledge of Seller or Parent, threatened Legal Proceedings
which involve a claim of infringement, unauthorized use, misappropriation,
dilution or violation by any Person against Seller or Parent or challenging the
ownership, use, validity or enforceability of any Purchased Intellectual
Property.  Neither Seller nor Parent has
received written (including by electronic mail) notice of any such
threatened claim and, to the Knowledge of Seller or Parent, there are no facts
or circumstances that would form the basis for any such claim or
challenge.  The Purchased Intellectual
Property, and all of Seller’s or Parent’s rights in and to the Purchased
Intellectual Property, are valid and enforceable.

(i)            Except as disclosed on Schedule 5.11(i) to
the Disclosure Letter, to the Knowledge of Seller, no Person is infringing,
violating, misusing or misappropriating any Purchased Intellectual Property,
and no such claims have been made against any Person by Seller.

(j)            There are no Orders to which Seller is a
party or by which it is bound which restrict, in any material respect, any
rights to any Purchased Intellectual Property.

(k)           The consummation of the transactions contemplated hereby will not
result in the loss or impairment of Purchaser’s right to own or use any of the
Purchased Intellectual Property.

(l)            No present or former Employee has any right,
title, or interest, directly or indirectly, in whole or in part, in any
material Purchased Intellectual Property. 
To the Knowledge of Seller, no employee, consultant or independent
contractor of Seller is, as a result of or in the course of such employee’s,
consultant’s or independent contractor’s engagement, in default or breach of
any material term of any employment agreement, non-disclosure agreement,
assignment of invention agreement or similar agreement.

(m)          The Purchased Technology represents (a) all of the Software owned
exclusively by Seller that is material to the operation of NetBank Finance and
(b) all other Software used in NetBank Finance that is not exclusively
owned by Seller, excluding commercial-off-the-shelf Software
available on reasonable terms for a license fee of no more than $10,000.

5.12         Material Contracts.

(a)           Schedule 5.12 to the Disclosure Letter sets forth all of
the following Contracts to which Seller or any of the Subsidiaries is a party
or by which Seller or any Subsidiary is bound and that 

 32
 

relate to or are used by NetBank Finance, or
that relate to the Purchased Assets or Assumed Liabilities (collectively, the “Material
Contracts”):

(i)            Contracts with any
Affiliate or current or former officer, director, stockholder or Affiliate of
Seller or any of the Subsidiaries or any agent, broker or sales representative
of Seller or any of the Subsidiaries;

(ii)           Contracts with any labor union or association representing any
employees of Seller or any of the Subsidiaries;

(iii)          Contracts for the sale of any of the assets of Seller or any of the
Subsidiaries or for the grant to any person of any preferential rights to
purchase any of their assets other than in the Ordinary Course of Business and
not material in amount in the aggregate;

(iv)          Contracts for joint ventures, strategic alliances or partnerships or
other Contracts (however named) involving a sharing of profits, losses,
costs or Liabilities by Seller or any of the Subsidiaries with any other
Person;

(v)           Contracts prohibiting or limiting the ability of Seller or any of the
Subsidiaries to (A) engage in any line of business, (B) compete with,
obtain products or services from, or provide services or products to, any
Person, (C) carry on or expand the nature or geographical scope of their
respective business operations anywhere in the world or (D) disclose any
confidential information in their possession (and not otherwise generally
available to the public);

(vi)          Contracts relating to the acquisition by Seller or any of the
Subsidiaries of any operating business or the capital stock of any other
Person;

(vii)         Contracts relating to incurrence, assumption or guarantee of any
indebtedness in excess of $100,000 or imposing a Lien on any of its assets;

(viii)        Purchased Contracts involving (A) leases by Seller or any of the
Subsidiaries from or to any other Person of any tangible personal property or
real property other than the Leases or (B) purchases or sales by Seller or
any of the Subsidiaries of materials, supplies, equipment or services and
which, in the case of clauses (A) and (B), calls for future payments in
excess of $100,000 in any year;

(ix)           Contracts under which Seller or any of the Subsidiaries have made
advances or loans to any other Person other than in the Ordinary Course of
Business;

(x)            Contracts for the employment (including “at
will” employment) of, or providing for a severance, retention, or change
in control payment to, any individual on a full-time, part-time or
consulting or other basis, in each case, providing annual compensation in
excess of $100,000;

(xi)           outstanding agreements of guaranty, surety or indemnification, direct
or indirect, by Seller or any of the Subsidiaries;

(xii)          Contracts (or a group of related contracts) which involve the
expenditure of more than $50,000 annually or $100,000 in the
aggregate or require performance by any party more than one year from the date
hereof; and

 33

(xiii)         Contracts that are otherwise material to the Purchased Assets or
NetBank Finance.

(b)           Each of the Material Contracts and the Purchased Contracts is in full
force and effect and is the legal, valid and binding obligation of the
applicable Seller and/or a Subsidiary, enforceable against it in accordance
with its terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium and similar laws affecting creditors’ rights and remedies generally
and subject, as to enforceability, to general principles of equity (regardless
of whether enforcement is sought in a proceeding at law or in equity).  Neither Seller nor any Subsidiary is in
default under any Material Contract or Purchased Contract, nor, to the
Knowledge of Seller, is any other party to any Material Contract or Purchased
Contract in default thereunder, and no event has occurred that with the lapse
of time or the giving of notice or both would constitute a default
thereunder.  No party to any Material
Contract or Purchased Contract has exercised any termination rights with
respect thereto.  Seller and its
Subsidiaries have, and will transfer to Purchaser at the Closing, good and
valid title to the Material Contracts, free and clear of all Liens other than
Permitted Exceptions.  Seller has
delivered or otherwise made available to Purchaser true, correct and complete
copies of all of the Material Contracts and all Purchased Contracts, together
with all amendments, modifications or supplements thereto.

5.13         Employee Benefits.

(a)           None of Seller, Parent nor any Subsidiary has any formal commitment, or
intention communicated to employees, to create any additional Employee Benefit
Plan or modify or change any existing Employee Benefit Plan of Seller.

(b)           With respect to each of the Employee Benefit Plans, Seller has
delivered to Purchaser true and complete copies of each of the following
documents, if applicable: (i) a signed copy of the most recent plan
document (including all amendments thereto); (ii) signed copies of trust
documents and insurance contracts; (iii) the annual reports (Form 5500 and
schedules thereto) filed for the last three years; and (v) the most
recent summary plan description, together with each summary of material
modifications.

(c)           Neither Seller nor any ERISA affiliate has ever maintained or
participated in any Employee Benefit Plan which has been subject to Title IV of
ERISA or Code Section 412 or ERISA Section 302, including, without limitation,
any “multiemployer plan” (within the meaning of Section 4001(a)(3) of
ERISA).  An ERISA affiliate for purposes
of this Section 5.13 is any person or entity that would be considered,
when combined with a Seller, a single employer pursuant to Section 414 of the
Code.

5.14         Labor.

(a)           There is no labor or collective bargaining agreement with any union or
similar labor organization covering any Employee.

(b)           No petition for certification or union election is existing or pending
with respect to any Employee and no union, labor organization or collective
bargaining unit has sought certification or recognition within the preceding
three (3) years with respect to any Employee.

(c)           All Employees who are not a party to an employee agreement with Seller
or an Affiliate of Seller are at-will employees.

 34
 

(d)           There are no (i) strikes, work stoppages, slowdowns, lockouts or
arbitrations or (ii) material grievances or other labor disputes pending
or, to the Knowledge of Seller, threatened against or involving Seller or any
of the Subsidiaries involving any Employee. 
There are no unfair labor practice charges, grievances or complaints
pending or, to the Knowledge of Seller, threatened by or on behalf of any
Employee.

5.15         Litigation.

(a)           Except as set forth on Schedule
5.15(a) to the Disclosure Letter, there is no Legal Proceeding pending
or, to the Knowledge of Seller, threatened against Seller or any of its
Affiliates (or to the Knowledge of Seller, pending or threatened, against any
of the officers, directors or key employees of Seller, pending or threatened,
against any of the officers, directors or key employees of Seller or any of its
Affiliates relating to NetBank Finance, the Assumed Liabilities or the
Purchased Assets, before any Governmental Body; nor to the Knowledge of Seller
is there any reasonable basis for any such Legal Proceeding.  Neither Seller nor any Subsidiary are subject
to any Order (other than in the Ordinary Course of Business relating to the
Purchased Assets, Assumed Liabilities or NetBank Finance).  Neither Seller nor any Subsidiary are engaged
in any legal action related to the Purchased Assets, NetBank Finance or the
Assumed Liabilities to recover monies due it or for damages sustained by it
except in the Ordinary Course of Business.

(b)           There are no Legal Proceedings or Orders issued, pending or, to the
Knowledge of Seller, threatened, against Seller or any Subsidiary or any of
their respective assets, at law, in equity or otherwise, in, before, by, or
otherwise involving, any Governmental Body, arbitrator or other Person that
question or challenge the validity or legality of, or have the effect of
prohibiting, preventing, restraining, restricting, delaying, making illegal or
otherwise interfering with, this Agreement, the Seller Documents, the
consummation of the transactions contemplated hereby or thereby or any action
taken or proposed to be taken by Seller pursuant hereto or in connection with
the transactions contemplated hereby or thereby. To the Knowledge of Seller, no
event has occurred or circumstance exists that could reasonably be expected to
give rise to or serve as a basis for the commencement of any such Legal
Proceeding or the issuance of any such Order.

(c)           Except as set forth on Schedule 5.15(c) to the
Disclosure Letter, neither Seller nor
any Subsidiary is a party to any written agreement, consent agreement or memorandum
of understanding with or a party to any commitment letter or similar
undertaking with, and the Board of Directors thereof has not adopted any
resolutions at the request of, any Governmental Body that restrict the conduct
of any of their respective business operations or activities or that are in any
manner related to its capital adequacy, its credit policies, its management,
nor have Seller or any Subsidiary
been advised by any Governmental Body that the entity is considering requesting
such an agreement, consent agreement, memorandum of understanding, commitment
letter or similar undertaking, or Board of Directors resolutions.

5.16         Compliance with Laws; Permits.

(a)           Except as set forth on Schedule 5.16(a) to the Disclosure
Letter, and except as set forth in Parent’s Annual Report on Form 10-K
for the fiscal year ended December 31, 2005, its Quarterly Report on Form 10-Q
for the quarter ended September 30, 2006, (without giving effect to any
amendment filed after the date of this Agreement), or any subsequent Current
Report on Form 8-K, as it relates to the Purchased Assets, Assumed
Liabilities or NetBank Finance, Seller (i) conducts its business in
compliance with all applicable Laws or to the employees conducting such
businesses; (ii) is in compliance in all material respects with all Laws
of every Governmental Body applicable to its operations or assets including all
licensing, lending, consumer protection and escheat laws; and (iii) has
received, since 

 35
 

December 31, 2005, no written notification
from any Governmental Body (A) asserting that it is not in compliance with
any of the Laws which such Governmental Body enforces or (B) threatening
to revoke any license, franchise, Permit or governmental authorization.  Neither Seller nor any Market Street has
received from any Governmental Body, since December 31, 2006, any written or
other notice of or been charged with the violation of any Law.  To the Knowledge of Seller, neither Seller
nor Market Street is under investigation with respect to the violation of any
Law and there are no facts or circumstances which could form the basis for any
such violation.

(b)           Seller and Market Street currently have all Permits which Seller and
Market Street are required to maintain in connection with their respective business
operations and activities as presently conducted.  Seller and Market Street have made all
filings, applications, and registrations with Regulatory Authorities that are
required to be made by it or for it to own, lease, or operate its material assets
and to carry on its business as now conducted and there has occurred no breach
or violation of, or default under any Permit applicable to its business or
employees conducting its business. 
Seller and Market Street have paid all fees and assessments due and
payable in connection therewith.  Neither Seller nor Market Street is in
default or violation, and no event has occurred which, with notice or the lapse
of time or both, would constitute a default or violation, in any material
respect of any term, condition or provision of any Permit to which it is a
party, to which the business operations and activities of Seller and Market
Street are subject or by which its properties or assets are bound and, to the
Knowledge of Seller, there are no facts or circumstances which could form the
basis for any such default or violation. 
All applications required to have been filed for the renewal of any
Permit have been duly filed on a timely basis with the appropriate Governmental
Body, and all other filings required to have been made with respect to any
Permit have been duly made on a timely basis with the appropriate Governmental
Body.

(c)           Neither Seller nor
Market Street have taken or agreed to take any action, and to Seller’s
Knowledge it is not aware of any fact, circumstance or reason that (i) is
reasonably likely to impede or delay receipt of any Consents of Regulatory
Authorities referred to in Sections 5.3(b) of this Agreement, or
(ii) would result in the imposition of a condition that would reasonably
be expected to result in a Material Adverse Effect.

(d)           Except as set forth in
Parent’s Annual Report on Form 10-K for the fiscal year ended
December 31, 2005,  its Quarterly
Report on Form 10-Q for the quarter ended September 30, 2006 (without
giving effect to any amendment filed after the date of this Agreement), or any
subsequent Current Report on Form 8-K, neither Seller nor Market Street
are subject to, have been advised or have reason to believe that it is
reasonably likely to become subject to, any written order, decree, agreement,
memorandum of understanding or similar arrangement with, or a commitment letter
or similar submission to, or extraordinary supervisory letter from, or adopted
any extraordinary board resolutions at the request of, any Governmental Body
charged with the supervision or regulation of financial institutions or issuers
of securities or engaged in the insurance of deposits or the supervision or
regulation of it.

5.17         Environmental Matters. 
Except as set forth on Schedule 5.17 to the Disclosure Letter:

(a)           no Hazardous Materials have been used, stored or otherwise handled in
any manner by Seller or any of the Subsidiaries on, in, from or affecting the
Seller Property except in compliance with applicable Environmental Laws;

(b)           to the Knowledge of Seller, no Hazardous Materials have at any time
been released into or stored on or in the Seller Property or any other
properties presently or formerly owned, operated or used by Seller or Market
Street;

 36
 

(c)           Seller has not received any notice of any violations (and, to the
Knowledge of Seller, there are no existing violations) of any applicable
Law governing the use, storage, treatment, transportation, manufacture,
refinement, handling, production or disposal of Hazardous Materials on, in,
from or affecting the Seller Property and there are no Legal Proceedings
pending or, to the Knowledge of Seller, threatened by any Person with respect
to any such violations; and

(d)           the Seller Property is currently being, and have in the past been,
operated by Seller in all material respects in accordance and in compliance
with all applicable Environmental Laws and, to the Knowledge of Seller, all
such property has been operated in the past by third parties in all material
respects in accordance with, and in compliance with, all applicable
Environmental Laws.

5.18         Insurance.  Seller and Market Street have
insurance policies in full force and effect for such amounts as are sufficient
for all requirements of Law and all agreements to which Seller or Market Street
are a party or by which they are bound and are for amounts and coverages as are
customary for similarly situated businesses. 
No event relating to Seller or Market Street has occurred which could
reasonably be expected to result in a retroactive upward adjustment in premiums
under any such insurance policies or which could reasonably be expected to
result in a prospective upward adjustment in such premiums.  Excluding insurance policies that have
expired and been replaced in the Ordinary Course of Business, no insurance
policy has been cancelled within the last two (2) years and, to the
Knowledge of Seller, no threat has been made to cancel any insurance policy of
Seller or Market Street during such period. 
All such insurance will remain in full force and effect and all such
insurance relating to the Purchased Assets, Assumed Liabilities and NetBank
Finance is assignable or transferable to Purchaser.  No event has occurred, including the failure
by Seller or Market Street to give any notice or information or Seller or
Market Street giving any inaccurate or erroneous notice or information, which
limits or impairs the rights of Seller or Market Street under any such
insurance policies.

5.19         Receivables.  All Receivables shown on the Balance Sheet
that will be Purchased Assets will represent valid and enforceable claims
against the representative account debtor and each obligor thereon (if any) and
are not subject to any defenses, counterclaims, or rights of setoff other than
those arising in the Ordinary Course of Business and for which adequate
reserves have been established, and are fully collectible to the extent not
reserved for in the balance sheet on which they are shown.  Except as disclosed on Schedule 5.19
to the Disclosure Letter, such Receivables are owned by Seller and the
Subsidiaries free and clear of all Liens, except for Permitted Exceptions.

5.20         Loan Originations.

(a)           Seller and its
Subsidiaries have been, during the last three years, and are in compliance with
all Applicable Requirements, and all applicable Laws, Agency, investor and
Insurer requirements applicable to them, their assets and their conduct of
business, except as would not be materially adverse to Seller and its
Subsidiaries. Except as would not be materially adverse to Seller and its Subsidiaries,
Seller and its Subsidiaries have timely filed, or will have timely filed by the
Closing Date, all reports that any Governmental Body or Insurer requires that
it file with respect to its mortgage origination business. Neither Seller nor
its Subsidiaries have done or caused to be done, or have failed to do or
omitted to be done, any act, the effect of which would operate to invalidate or
materially impair (i) any PMI or commitment of any private mortgage
insurer to insure; (ii) any title insurance policy; (iii) any hazard
insurance policy; (iv) any flood insurance policy; (v) any fidelity
bond, direct surety bond, or errors and omissions insurance policy required by
private mortgage insurers; or (vi) any surety or guaranty agreement, in
each case applicable to the Mortgage Loans or reasonably necessary to the
operation of their respective businesses.  
Except as disclosed in Schedule 5.20(a) to the Disclosure
Letter, no Agency has indicated to Seller or any of its Subsidiaries in
writing, or to the Knowledge of Seller, in any other manner, that it has
terminated or intends to terminate its relationship with Seller or any such 

 37
 

Subsidiary for poor performance, poor loan quality or concern with
respect to Seller’s or any Subsidiary’s compliance with Laws or that Seller or
any of its Subsidiaries is in default under or not in compliance with respect
to any Applicable Requirements, except as would not, individually or in the
aggregate, be materially adverse to Seller and its Subsidiaries.  The loan origination and underwriting processes, procedures and
guidelines of Seller and its Subsidiaries are adequate and are consistent with
generally accepted industry standards, and Seller and its Subsidiaries have not
taken any action or omitted to take any action in violation of such loan
origination and underwriting processes, procedures and guidelines with respect
to any of the Mortgage Loans or Beacon Loans.

(b)           Except as set forth on Schedule 5.20(b) to the Disclosure
Letter, the representations and warranties set forth on Exhibit 5.20(b) are
true and correct with respect to each Mortgage Loan other than a Georgia
Affordable Housing Loan or the Habitat Loan.

(c)           Except as set forth on Schedule 5.20(c) to the Disclosure
Letter, the representations and warranties set forth on Exhibit 5.20(c) are
true and correct with respect to each Georgia Affordable Housing Loan and the
Habitat Loan.

(d)           Except as set forth on Schedule
5.20(d) to the Disclosure Letter, all HELOC Loans with a zero balance
of unpaid principal on the Closing Date that are or will be Purchased Assets
have an active line of credit as of the Closing Date and should not have been
closed or terminated in accordance with the terms thereof. 

(e)           As of the Closing Date,
all advances made to Mortgagors by any servicer, Seller or its designee with
respect to HELOC Loans have been in strict accordance with the terms of the
related Mortgage and credit line agreement; further, any servicer, Seller or
its designee have not agreed, committed, arranged or entered into any
understanding in connection with such advances which render the terms of the
applicable Mortgage and credit line agreement unenforceable or which negatively
impact Purchaser’s ability to collect all advances thereunder. 

5.21         Beacon Loans and
Leases.  The representations and
warranties set forth at Exhibit 5.21 shall be true and correct with
respect to each Beacon Loan other than a Georgia
Affordable Housing Loan or the Habitat Loan.

5.22         Related Party Transactions.

(a)           Neither Seller nor the Subsidiaries, any Affiliate of Seller or any of
their respective executive officers, directors or employees (i) own any
direct or indirect interest of any kind in, or controls or is a director,
officer, employee or partner of, or consultant to, or lender to or borrower
from or has the right to participate in the profits of, any Person which is a
competitor, supplier, customer, landlord, tenant, creditor or debtor of Seller
or any of the Subsidiaries, or a participant in any transaction related to the
Purchased Assets and Assumed Liabilities to which Seller or any of the
Subsidiaries is a party or (ii) is a party to any Contract with Seller or
any of the Subsidiaries related to the Purchased Assets or Assumed Liabilities,
except with respect to clauses (i) and (ii) (A) for ownership
interests of 10% or less of any entity, (B) for business dealings or
transactions in the ordinary course of business at substantially prevailing
market prices and on substantially prevailing market terms, and (C) as set
forth on Schedule 5.22 to the Disclosure Letter.

(b)           Other than as permitted by Regulation W as modified by 12 C.F.R.
563.41, each Contract, agreement, or arrangement between Seller or any of the
Subsidiaries on the one hand, and any Affiliate of Seller or any officer, director
or employee of Seller on the other hand, is on commercially 

 38
 

reasonable terms no more favorable to the
Affiliate, director, officer or employee of Seller than what any third party
negotiating on an arms-length basis would reasonably expect.

5.23         Financial Advisors. 
Except for Sandler O’Neill LLP, whose fees, if any, shall be paid by
Seller, no Person has acted, directly or indirectly, as a broker, finder or
financial advisor for Seller or any of the Subsidiaries in connection with the
transactions contemplated by this Agreement and no Person is entitled to any
fee or commission or like payment in respect thereof.

5.24         Deposits.  

(a)           All of the deposits are
insured by the FDIC to the maximum extent provided in the rules and regulations
of the FDIC.

(b)           All of the deposits
were marketed, issued and have been continuously serviced in compliance with
all applicable Laws and the terms of the deposits themselves, including,
without limitation, Laws relating to the acceptance of deposits, the truth-in-savings
act, federal deposit insurance in general and pass-through insurance in
particular (as referenced in 12 C.F.R. Section 330.14), escheatment and/or
abandoned property and, where applicable, issuance of brokered deposits.

(c)           Seller has provided, or
shall provide as soon as reasonably practicable after the date hereof, to
Purchaser all forms that have been used for the deposits.  All deposits were issued using one of such
forms and no other form, and such forms have not been substantively modified
for any of the deposits other than as set forth in change in terms
notifications, copies of which have been provided to Purchaser.  None of the deposits restricts the assignment
and assumption contemplated by this Agreement and such deposits may be assigned
by Seller without restriction, other than the: (i) requirement of
regulatory approval which is obtained prior to Closing; and (ii) depositors’
rights of withdrawal.  

(d)           Neither Seller nor, to
Seller’s Knowledge, any deposit broker has made any promise, agreement or
commitment to any depositor in connection with a deposit, except in the
Ordinary Course of Business in connection with servicing the deposits and
recorded in the Bank’s Books and Records.

(e)           Each deposit is
enforceable in accordance with its terms.

(f)            None of the Bank’s
certificates of deposit: (i) permit additional deposits thereto; or (ii) permit
early withdrawals except: (A) upon the death or adjudication of
incompetence of the underlying Depositor; or (B) as described in Schedule 5.24(f) to the Disclosure
Letter.  All of the Bank’s
certificates of deposit constitute time deposits for purposes of Regulation D
of the Board of Governors of the Federal Reserve System, 12 C.F.R. Part 204.

(g)           All of the deposits
that constitute brokered deposits were issued in full compliance with
Section 29 of the Federal Deposit Insurance Act and 12 C.F.R. Sec. 337.6
and with the terms and conditions of the brokered deposit agreements under
which they were issued and Seller is otherwise in compliance with the terms and
conditions of such agreements.  Such
agreements do not prohibit or restrict the assignment and assumption or
substitution contemplated by this Agreement. 

(h)           Seller and/or a deposit
broker, if applicable, have performed all obligations required to be performed
under the deposits up to the Closing Date and under any additional promises,
commitments and agreements made to depositors and recorded in the Bank’s books
and records.  Seller is not in default
under any of the deposits.  Without
limiting the generality of the foregoing, Seller has paid to the depositors all
interest that is due and payable
on and before the Closing Date.

 39
 

(i)            Schedule 5.24(i) to
the Disclosure Letter accurately reflects the term and maturity dates of all
certificates of deposit, the interest rates on all deposits, the frequency of
paying interest thereon, the identities of deposit brokers, if any, and the
liabilities assumed by Purchaser in respect thereof.  Schedule 5.24(i) to the Disclosure Letter
accurately reflects notations on or reissuances of Master Certificates for
CDs.  Seller has previously provided to
Purchaser a list in electronic form that accurately represents of all Deposit
Liabilities as of April 30, 2007.  

(j)            Seller has timely paid
all deposit insurance assessments required under section of the Federal Deposit
Insurance Act and 12 C.F.R., Part 327 and all assessments, as determined by the
FDIC, to pay interest on bonds issued by the Financing Corporation.  

(k)           No error, omission,
negligence, misrepresentation, fraud, identity theft, or similar occurrence has
taken place on the part of the Seller, nor, to the Knowledge of Seller, a
depositor or any deposit broker or any other Person with respect to the
origination or servicing of any Deposit Liability.

ARTICLE VI

REPRESENTATIONS AND WARRANTIES OF PURCHASER

Purchaser hereby represents
and warrants to Seller that:

6.1           Organization and Good Standing. 
Purchaser is a federal savings and loan association chartered by the
Office of Thrift Supervision (“OTS”), and is duly organized, validly
existing and in good standing under the laws of the United States.

6.2           Authorization of Agreement. 
Purchaser has full corporate power and authority to execute and deliver
this Agreement and each other agreement, document, instrument or certificate
contemplated by this Agreement or to be executed by Purchaser in connection
with the consummation of the transactions contemplated hereby and thereby (the “Purchaser
Documents”), and to consummate the transactions contemplated hereby and
thereby.  The execution, delivery and
performance by Purchaser of this Agreement and each Purchaser Document have
been duly authorized by all necessary corporate action on behalf of Purchaser.  This Agreement has been, and each Purchaser
Document will be at or prior to the Closing, duly executed and delivered
by Purchaser and (assuming the due authorization, execution and delivery by the
other parties hereto and thereto) this Agreement constitutes, and each
Purchaser Document when so executed and delivered will constitute, legal, valid
and binding obligations of Purchaser, enforceable against Purchaser in
accordance with their respective terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium and similar laws affecting creditors’
rights and remedies generally, and subject, as to enforceability, to general
principles of equity, including principles of commercial reasonableness, good
faith and fair dealing (regardless of whether enforcement is sought in a
proceeding at law or in equity).

6.3           Conflicts; Consents of Third Parties.

(a)           Except as set forth on Schedule 6.3 of the disclosure letter
provided by Purchaser to the Seller as of the date of this Agreement (the “Purchaser
Disclosure Letter”), none of the execution and delivery by Purchaser of
this Agreement or by Purchaser of the Purchaser Documents, the consummation of
the transactions contemplated hereby or thereby, or compliance by Purchaser
with any of the provisions hereof or thereof will conflict with, or result in
any violation of or default (with or without notice or lapse of time, or both) under,
or give rise to a right of termination, cancellation or acceleration of any
obligation or to loss of a material benefit under, or give rise to any
obligation of Purchaser to make any payment under, or to the increased,
additional, accelerated or guaranteed rights or 

 40
 

entitlements of any Person under, or result
in the creation of any Liens upon any of the properties or assets of Purchaser
under, any provision of (i) the certificate of incorporation and by-laws
or comparable organizational documents of Purchaser; (ii) any Contract or
Permit to which a Purchaser is a party or by which any of the properties or
assets of Purchaser is bound; (iii) any Order of any Governmental Body
applicable to Purchaser or by which any of the properties or assets of a
Purchaser are bound; or (iv) any applicable Law, except, in the case of
clauses (ii), (iii) and (iv), for such violations, breaches or defaults as
would not, individually or in the aggregate, have a material adverse effect on
the ability of Purchaser to consummate the transactions contemplated by this
Agreement.

(b)           No consent, waiver, approval, Permit or authorization of, or filing
with, or notification to, any Person or Governmental Body is required on
the part of Purchaser in connection with (i) the execution and
delivery of this Agreement or the Purchaser Documents, the compliance by
Purchaser with any of the provisions hereof or thereof, the consummation of the
transactions contemplated hereby or thereby or the taking by Purchaser of any
other action contemplated hereby or thereby or (ii) the continuing
validity and effectiveness immediately following the Closing of any Contract or
Permit of Purchaser, except (A) (1) filings of applications and notices
with, receipt of approvals or nonobjections from, and expiration of related
waiting periods required by the OTS and the FDIC and (2) compliance with
the applicable requirements of the HSR Act,(2) and (B) as set forth
on Schedule 6.3 to the Purchaser Disclosure Letter.

6.4           Litigation.  There are no Legal Proceedings
pending or, to the Knowledge of Purchaser, threatened that are reasonably
likely to prohibit or restrain the ability of Purchaser to enter into this
Agreement or consummate the transactions contemplated hereby.

6.5           Financial Advisors.  No
Person has acted, directly or indirectly, as a broker, finder or financial
advisor for Purchaser in connection with the transactions contemplated by this
Agreement and no Person is entitled to any fee or commission or like payment in
respect thereof.

6.6           Financing.  Purchaser has available, and on the Closing Date will have
available, sufficient funds, available lines of credit or other sources of
immediately available funds to enable it to purchase the Purchased Assets and
assume the Assumed Liabilities on the terms and conditions of this
Agreement.  Purchaser’s obligations
hereunder are not subject to any conditions regarding Purchaser’s ability to
obtain financing for the consummation of the transactions contemplated hereby.

ARTICLE VII

COVENANTS

7.1           Access to Information. 
Seller shall, and shall cause the Subsidiaries to, afford Purchaser, its
officers, employees, advisors, attorneys, accountants and representatives
reasonable access to make such investigation of the properties, businesses and
operations of Seller and the Subsidiaries and such examination of the books,
records and financial condition of Seller and the Subsidiaries as it reasonably
requests and to make extracts and copies of such books and records; and access
to the members of management and personnel of Seller and the Subsidiaries.  Any such investigation, examination,
discussion and review shall be conducted during regular business hours and
under reasonable circumstances, and Seller shall cooperate fully therein.  No investigation by Purchaser prior to or
after the date of this Agreement shall diminish or obviate any of the
representations, warranties, covenants or agreements of Seller contained in this
Agreement or the Seller Documents.  In
order that Purchaser may 

(2)           HSR Act
filing requirement to be discussed with Seller’s counsel.

 41
 

have full opportunity to make such physical,
business, accounting and legal review, examination or investigation as it may
reasonably request of the affairs of Seller and the Subsidiaries, Seller shall
cause the officers, employees, consultants, agents, accountants, attorneys and
other representatives of Seller and the Subsidiaries to cooperate fully with
such representatives in connection with such review and examination.

7.2           Conduct of Operations Pending the Closing.

(a)           Except as otherwise contemplated by this Agreement, by applicable Law,
or with the prior written consent of Purchaser, and solely as it relates
directly or indirectly to NetBank Finance, the Purchased Assets or the Assumed
Liabilities, Seller prior to the Closing Date shall:

(i)            conduct its business and operations only in
the Ordinary Course of Business, including maintaining competitive deposit
rates;

(ii)           use its commercially reasonable efforts to (A) preserve its
present business operations, organization (including, without limitation,
management and the sales force) and goodwill of Seller and (B) preserve
the present relationships with Persons having business dealings with Seller
(including, without limitation, customers, suppliers, officers, employees,
underwriters, agents, brokers, sales representatives, correspondents, landlords
and investors);

(iii)          maintain (A) all of the assets and properties of Seller and the
Subsidiaries in their current condition, ordinary wear and tear excepted and (B) insurance
upon all of the assets and properties of Seller and the Subsidiaries in such
amounts and of such kinds comparable to that in effect on the date of this
Agreement;

(iv)          (A) maintain the books, accounts and records of Seller and the
Subsidiaries in the Ordinary Course of Business, (B) continue to collect
accounts receivable and pay accounts payable utilizing normal procedures and
without discounting or accelerating payment of such accounts, and (C) comply
with all contractual and other obligations applicable to the operation of
Seller and the Subsidiaries;

(v)           comply in all material respects with all applicable Laws;

(vi)          pay all maintenance and similar fees and take all other appropriate actions
as necessary to prevent the abandonment, loss or impairment of all Purchased
Intellectual Property;

(vii)         continue the existing credit collection control of delinquencies and
other policies and practices relating to the conduct of Seller and the Subsidiaries;
and

(viii)        not take any action which would adversely affect the ability of the
parties to consummate the transactions contemplated by this Agreement.

(b)           Except as otherwise contemplated by this Agreement or with the prior
written consent of Purchaser, Seller shall not, and shall not permit the
Subsidiaries to:

(i)            (A) increase the annual level of
compensation of any Employee, (B) grant any unusual or extraordinary
bonus, benefit or other direct or indirect compensation to any Employee,
director or consultant, or (C) increase the coverage or benefits with
respect to any 

 42
 

Employee
available under any Employee Benefit Plan or create or enter into any new
Employee Benefit Plan;

(ii)           make any loan or advance to any Person other than in the Ordinary Course
of Business;

(iii)          incur or assume any indebtedness other than in the Ordinary Course of
Business;

(iv)          subject to any Lien or otherwise encumber or, except for Permitted
Exceptions, permit, allow or suffer to be encumbered, any of the properties or
assets (whether tangible or intangible) of Seller or any of the
Subsidiaries;

(v)           except as in accordance with Section 7.6, sell, assign, license,
transfer, convey, lease or otherwise dispose of any assets or properties
(whether real or personal, tangible or intangible) of Seller and the
Subsidiaries;

(vi)          except as in accordance with Section 7.6, enter into or agree to
enter into any merger or consolidation with, any corporation or other entity,
or engage in any new business or invest in, make a loan (other than in the
Ordinary Course of Business), advance or capital contribution to, or otherwise
acquire the securities of any other Person;

(vii)         prior to the Closing Date, cancel or compromise any debt or claim or
waive or release any right of Seller or any of the Subsidiaries;

(viii)        prior to the Closing Date,
deviate from or change in any respect the credit or underwriting policies or
collateral eligibility standards of Seller or any Subsidiary;

(ix)           enter into any transaction or to enter into, modify, amend, terminate
or renew any Contract relating to a Purchased Asset, NetBank Finance or Assumed
Liability which by reason of its size, terms or otherwise is not in the
Ordinary Course of Business;

(x)            enter into any Contract, understanding or
commitment that restrains, restricts, limits or impedes the ability of NetBank
Finance, or the ability of Purchaser, to compete with or conduct any business
or line of business in any geographic area;

(xi)           terminate, amend, restate, supplement or waive any rights under any (A) Material
Contract relating to a Purchased Asset, NetBank Finance or Assumed Liability or
(B) Permit;

(xii)          amend the certificates of organization or incorporation or by-laws
(or other similar governing documents) of Seller or any Subsidiary; or

(xiii)         agree to do anything (A) prohibited by this Section 7.2, (B) which
would make any of the representations and warranties of Seller in this
Agreement untrue or incorrect or (C) that would reasonably be expected to
have a Material Adverse Effect.

7.3           Consents.  Seller shall use (and shall
cause each of the Subsidiaries to use) its reasonable best efforts, and
Purchaser shall cooperate with Seller, to obtain at the earliest practicable
date all consents and approvals required to consummate the transactions contemplated
by this Agreement, 

 43
 

including, without limitation, the consents
and approvals referred to in Section 5.3(b).  Seller and Purchaser shall equally share the
cost of obtaining such consents and approvals.

7.4           Regulatory Approvals.

(a)           Each of Purchaser and Seller shall use commercially reasonable efforts
to (i) make or cause to be made all filings required of each of them or
any of their respective Subsidiaries or Affiliates under the HSR Act or other
Antitrust Laws with respect to the transactions contemplated hereby as promptly
as practicable and, in any event, within ten days after the date of this
Agreement, (ii) comply at the earliest practicable date with any request
under the HSR Act or other Antitrust Laws for additional information,
documents, or other materials received by each of them or any of their
respective Subsidiaries from the FTC, the Antitrust Division or any other
Governmental Body in respect of such filings or such transactions and (iii) cooperate
with each other in connection with any such filing (including, to the extent
permitted by applicable Law, providing copies of all such documents to the non-filing
parties prior to filing and considering all reasonable additions, deletions or
changes suggested in connection therewith) and in connection with
resolving any investigation or other inquiry of any of the FTC, the Antitrust
Division or other Governmental Body under any Antitrust Laws with respect to
any such filing or any such transaction. 
Each of Purchaser on the one hand and Seller on the other hand shall be
responsible for and shall pay one-half of all filing fees for required
filings under the HSR Act.  Each such
party shall use commercially reasonable efforts to furnish to each other all
information required for any application or other filing to be made pursuant to
any applicable Law in connection with the transactions contemplated by this
Agreement.  Each such party shall
promptly inform the other parties hereto of any oral communication with, and
provide copies of written communications with, any Governmental Body regarding
any such filings or any such transaction. 
Subject to applicable Law, no party hereto shall independently
participate in any formal meeting with any Governmental Body in respect of any
such filings, investigation, or other inquiry without giving the other parties
hereto prior notice of the meeting and, to the extent permitted by such
Governmental Body, the opportunity to attend and/or participate.  Subject to applicable Law, the parties hereto
will consult and cooperate with one another in connection with any analyses,
appearances, presentations, memoranda, briefs, arguments, opinions and
proposals made or submitted by or on behalf of any party hereto relating to
proceedings under the HSR Act or other Antitrust Laws.

(b)           Each of Purchaser and Seller shall use commercially reasonable efforts
to resolve such objections, if any, as may be asserted by any Governmental Body
with respect to the transactions contemplated by this Agreement under the HSR
Act, the Sherman Act, as amended, the Clayton Act, as amended, the Federal
Trade Commission Act, as amended, and any other United States federal or state
or foreign statutes, rules, regulations, orders, decrees, administrative or
judicial doctrines or other laws that are designed to prohibit, restrict or
regulate actions having the purpose or effect of monopolization or restraint of
trade (collectively, the “Antitrust Laws”).  In connection therewith, if any Legal
Proceeding is instituted (or threatened to be instituted) challenging any
transaction contemplated by this Agreement as in violation of any Antitrust
Law, Seller shall use commercially reasonable efforts, and Purchaser shall
cooperate with Seller and its Affiliates, to contest and resist any such Legal
Proceeding, and to have vacated, lifted, reversed, or overturned any decree,
judgment, injunction or other order whether temporary, preliminary or
permanent, that is in effect and that prohibits, prevents, or restricts consummation
of the transactions contemplated by this Agreement, including by pursuing all
available avenues of administrative and judicial appeal and all available
legislative action, unless, by mutual agreement, Purchaser and Seller decide
that litigation is not in their respective best interests.  Each of Purchaser and Seller shall use
commercially reasonable efforts to take such action as may be required to cause
the expiration of the notice periods under the HSR Act or other Antitrust Laws
with respect to such transactions as promptly as possible after the execution
of this Agreement.  Notwithstanding
anything to the contrary provided herein, neither Purchaser nor any of its
Affiliates shall be required (i) to hold 

 44
 

separate (including by trust or otherwise) or
divest any of its businesses, product lines or assets, or any of the Purchased
Assets, (ii) to agree to any limitation on the operation or conduct of
NetBank Finance, or any of Purchaser’s business or operations, or (iii) to
waive any of the conditions to this Agreement set forth in Section 9.1.

(c)           Without
limiting the foregoing, Seller and Purchaser shall cooperate with the other and
use their commercially reasonable efforts to promptly: (i) file
applications and notices, as applicable, with the OTS under the Bank Merger
Act, the Home Owners’ Loan Act, as amended, and the regulations promulgated
thereunder, and obtain approval of, or non-objection to, such
applications and notices, (ii) file any required applications or notices
with any foreign or state banking, insurance or other Regulatory Authorities
and obtaining approval of such applications and notices, (iii) make any
notices to or filings with the Small Business Administration, (iv) make
any notices or filings under the HSR Act, and (v) make any filings with
and obtain any consents and approvals in connection with compliance with the
applicable provisions of the rules and regulations of any applicable industry
self-regulatory organization, or that are required under consumer
finance, mortgage banking and other similar Laws (collectively, the “Regulatory
Consents”).

7.5           Further Assurances.

(a)           Subject to Section
7.4, each of Seller and Purchaser shall use commercially reasonable efforts
to (i) take all actions necessary or appropriate to consummate the
transactions contemplated by this Agreement and (ii) cause the fulfillment
at the earliest practicable date of all of the conditions to their respective
obligations to consummate the transactions contemplated by this Agreement.

(b)           Seller and the
Subsidiaries shall execute such additional documents and take such other
actions as may be reasonably necessary or desirable to secure, record or
perfect the assignment of the Purchased Intellectual Property and Purchased
Technology to Purchaser and to allow Purchaser to register, maintain, defend, enforce
and otherwise obtain the full benefits of the Purchased Intellectual Property
and Purchase Technology.

(c)           Seller shall cooperate
with Purchaser’s efforts to cause each of the individuals listed on Schedule
7.5(c) to the Disclosure Letter to enter into mutually acceptable
employment agreements prior to the Closing.

(d)           Seller agrees to
forward promptly to the Purchaser: (i) any payments (properly endorsed
without recourse as necessary) which are received by Seller on or after
the Closing Date that relate to the Mortgage Loans, Beacon Loans and Leases and
to provide sufficient information so that any such payments may be properly
applied to the extent such information is available to Seller; and (ii) any
notices or other correspondence received on or after the Closing Date that
relate to the Mortgage Loans, Beacon Loans, Leases or other Purchased Assets.

(e)           (i)  For all
Mortgage Loans that are not MERS Loans and except to the extent otherwise
directed by Purchaser, prior to the Closing Date, Seller shall prepare and, on
the Closing Date, Seller shall cause an Assignment of Mortgage to be properly
recorded in each public recording office where mortgage loans are
recorded.  An “Assignment of Mortgage”
means an assignment, notice of transfer or equivalent instrument in recordable
form, of the Mortgage, securing a Mortgage Loan which creates a lien on an
estate in fee simple in real property, that is sufficient under the laws of the
jurisdiction wherein the applicable real property is located to reflect the transfer
of such Mortgage to Purchaser, which assignment, notice of transfer or
equivalent instrument may be in the form of one or more blanket assignments
covering the Mortgage Loans secured by real property located in the same
jurisdiction, if 

 45
 

permitted by law.  Additionally,
Seller shall prior to the Closing prepare and execute any note endorsements
relating to any of the Mortgage Loans.

(ii)  For all
Mortgage Loans that are MERS Loans, Seller shall take, at Seller’s cost and
expense, such steps as are necessary to reflect Purchaser as owner of the
underlying Mortgage.

(f)            Seller shall (i) prior
to the Closing Date (to be effective as of the Closing Date), endorse the
promissory notes, notes, instruments or other evidence of indebtedness with
respect to the Beacon Loans and Leases in favor of Purchaser, (ii) prepare,
prior to the Closing Date and in such manner as is necessary to perfect the
sale of the Beacon Loans and Leases to the Purchaser and the proceeds thereof,
and on the Closing Date file all UCC-3 forms or other similar forms or
notices that evidence that all UCC-1 financing statements, that evidence
Beacon Loans and Leases in favor of the Bank or its Subsidiaries have been
assigned to Purchaser, (iii) deliver a file-stamped copy to the
Purchaser of each such financing statement (or continuation statement) or
other evidence of such filings (which may, for purposes of this Section,
consist of telephone confirmation of such filings with the file stamped copy of
each such filings to be provided to the Purchaser in due course), as soon as is
practicable after receipt by the Seller thereof, and (iv) prepare and
execute all assignments relating to the Loan Agreements, Lease Agreements and
related Ancillary Documents necessary to assign the Loan Agreements, Lease
Agreements and related Ancillary Documents to Purchaser as of the Closing Date.

(g)           Seller shall deliver to
Purchaser audited financial statements for the year ending December 31, 2006 as
soon as practicable.

7.6           No Shop.

(a)           Neither Seller nor any of Seller’s Affiliates will, and will not
permit any of their respective directors, officers, employees, representatives
or agents (collectively, the “Representatives”) to, directly or
indirectly, (i) discuss, negotiate, undertake, authorize, recommend,
propose or enter into, either as the proposed surviving, merged, acquiring or
acquired corporation, any transaction involving a merger, consolidation,
business combination (excluding a merger or business combination with Parent or
a wholly owned direct or indirect subsidiary of Parent that is conditioned on
the Closing under this Agreement), purchase, assumption or disposition of any
amount of the Purchased Assets, NetBank Finance, the Deposit Liabilities or the
capital stock of Seller (excluding a merger or business combination with Parent
or a wholly owned direct or indirect subsidiary of Parent that is conditioned
on the Closing under this Agreement) other than the transactions
contemplated by this Agreement (an “Acquisition Transaction”), (ii) facilitate,
encourage, solicit or initiate discussions, negotiations or submissions of
proposals or offers in respect of an Acquisition Transaction, (iii) furnish
or cause to be furnished, to any Person, any information concerning operations,
properties, assets or liabilities of Seller in connection with an Acquisition
Transaction, or (iv) otherwise cooperate in any way with, or assist or
participate in, facilitate or encourage, any effort or attempt by any other
Person to do or seek any of the foregoing.

(b)           Seller shall notify Purchaser orally and in writing promptly (but in no
event later than 24 hours) after receipt of any proposal or offer from any
Person other than Purchaser to effect an Acquisition Transaction or any request
for non-public information relating to Seller or any of the Subsidiaries
or for access to the properties, books or records of Seller or any Subsidiary
by any Person other than Purchaser.  Such
notice shall indicate the identity of the Person making the proposal or offer,
or intending to make a proposal or offer or requesting non-public
information or access to the books and records of Seller, the material terms of
any such proposal or offer, or modification or amendment to such proposal or
offer and copies of any written proposals or offers or amendments or
supplements thereto.  Seller shall keep
Purchaser informed, on a current basis, of any material changes in the status
and any material changes or modifications in the material terms of any such
proposal, offer, indication or request.

 46

(c)           Seller shall (and shall
cause its Representatives to) immediately cease and cause to be terminated any
existing discussions or negotiations with any Persons (other than Purchaser)
conducted heretofore with respect to any of the foregoing; provided that Seller may continue discussions that
relate to a merger or business combination with Parent or a wholly owned direct
or indirect subsidiary of Parent that is conditioned on the Closing under this
Agreement.  Seller agrees not to
release any third party from the confidentiality and standstill provisions of
any agreement to which Seller or any of the Subsidiaries is a party.

7.7           Non-Competition; Non-Solicitation;
Confidentiality.

(a)           For a period from the
date hereof until the third anniversary of the Closing Date, Seller shall not
and shall cause Parent and its
Subsidiaries not to (other than Market Street, the Market Street Joint
Ventures, River City Mortgage Services, LLC and any other joint venture in
which Market Street has an ownership interest or for which Market Street
provides origination, marketing, warehouse or administrative services in the
Ordinary Course of Business) not to, directly or indirectly, own, manage,
operate, control or participate in the ownership, management, operation or
control of any business, whether in corporate, proprietorship or partnership
form or otherwise, engaged in the business conducted or engaged in by NetBank
Finance, accepting any deposits, originating, purchasing, selling, retaining or
servicing any loans or leases which are of a type originated, purchased, sold,
retained or serviced by Purchaser or Seller, providing any banking or related
services or otherwise competing with Purchaser other than any business or
operations relating to the Excluded Assets (a “Restricted Business”) in
North America; provided, however, that the restrictions contained in
this Section 7.7(a) shall not restrict Seller from acquiring, directly
or indirectly, less than 2% of the outstanding capital stock of any publicly
traded company engaged in a Restricted Business.  

(b)           For a period from the date hereof to the third anniversary of the
Closing Date, Seller shall not and each shall cause each Parent and its
Subsidiaries not to, cause,
solicit, induce or encourage any Employees who are or become employees of
Purchaser or its Affiliates to leave such employment or hire, employ or
otherwise engage any such individual.

(c)           For a period from the date hereof to the third anniversary of the
Closing Date, Seller shall not, and each shall cause Parent and its
Subsidiaries not to, directly or
indirectly, cause, induce or encourage any Person who is an actual or
prospective client, customer, broker, correspondent, supplier, or licensor of
Seller or the Subsidiaries as of the date hereof or of the Closing Date to
terminate or modify any such actual or prospective relationship.  Further, for a period of three years
after the Closing Date, Seller shall not (i) maintain any list of the Seller’s
Former Depositors for the purpose of marketing loans or attracting deposits,
(ii) specifically target and solicit customers of Seller or Purchaser using any
customer or mailing list which consists primarily of customers of Seller; provided,
however, that these restrictions shall not restrict general mass
mailings, telemarketing calls, statement stuffers and other similar
communications directed to all customers of Seller or Seller’s Affiliates, or
to the public or newspaper, radio, television or Internet advertisements of a
general nature or otherwise prevent Seller from taking such actions as may be
required to comply with any applicable Law. 

(d)           Confidentiality For a period from the date hereof to the third
anniversary of the Closing Date, Seller shall not and shall cause Parent and
its Subsidiaries and Parent and
its and such Subsidiaries’ respective officers, and directors not to, directly
or indirectly, disclose, reveal, divulge or communicate to any Person other
than authorized officers, directors and employees of Purchaser or use or
otherwise exploit for its own benefit or for the benefit of anyone other than
the Purchaser, any Confidential Information (as defined below).  Neither Seller nor its respective officers,
directors and Parent or its Subsidiaries shall have any obligation to keep
confidential any Confidential Information if and to the extent disclosure
thereof is specifically required by Law; provided, that in the event
disclosure 

 47
 

is required by applicable Law, Seller shall,
to the extent reasonably possible, provide Purchaser with prompt notice of such
requirement prior to making any disclosure so that Purchaser may seek an
appropriate protective order.  For
purposes of this Section 7.7(d), “Confidential Information” shall
mean any confidential information with respect to the Purchased Assets, Assumed
Liabilities and NetBank Finance including, methods of operation, customers,
customer lists, broker and correspondent lists, products, prices, fees, costs,
Technology, inventions, know-how, Software, marketing methods, plans,
personnel, suppliers, competitors, markets or other specialized information or
proprietary matters.  “Confidential
Information” does not include, and there shall be no obligation hereunder
with respect to, information that (i) is generally available to the public on
the date of this Agreement or (ii) becomes generally available to the public
other than as a result of a disclosure not otherwise permissible
hereunder.  

From
and after the date hereof, Seller shall not, and each shall cause its
Subsidiaries and its and such Subsidiaries’ respective officers, and directors
not to, directly or indirectly, disclose, reveal, divulge or communicate to any
Person other than authorized officers, directors and employees of Purchaser or
use or otherwise exploit for its own benefit or for the benefit of anyone other
than the Purchaser, any Trade Secrets (as defined below).  

(e)           The covenants and undertakings contained in this Section 7.7
relate to matters which are of a special, unique and extraordinary character
and a violation of any of the terms of this Section 7.7 will cause
irreparable injury to the parties, the amount of which will be impossible to
estimate or determine and which cannot be adequately compensated.  Therefore, Purchaser will be entitled to an
injunction, restraining order or other equitable relief from any court of
competent jurisdiction in the event of any breach of this Section 7.7.  The rights and remedies provided by this Section
7.7 are cumulative and in addition to any other rights and remedies which
Purchaser may have hereunder or at law or in equity.  In the event that Purchaser were to seek
damages for any breach of this Section 7.7, the portion of the Purchase
Price which is allocated by the parties to the foregoing covenants shall not be
considered a measure of or limit on such damages.

(f)            The parties agree that
the covenants contained in this Section 7.7 are reasonable and valid in
time and scope and in all other respects. 
The covenants set forth herein shall be considered and construed as
separate and independent covenants.  Should any part or provision of any covenant
be held invalid, void or unenforceable in any court of competent jurisdiction,
such invalidity, voidness or unenforceability shall not render invalid, void or
unenforceable any other part or provision of this Agreement.  The
parties hereto further agree that, if any court of competent jurisdiction
determines that a specified time period, a specified geographical area, a
specified business limitation or any other relevant feature of this Section
7.7 is unreasonable, arbitrary or against public policy, then a lesser time
period, geographical area, business limitation or other relevant feature which
is determined to be reasonable, not arbitrary and not against public policy may
be enforced against the applicable party.

7.8           Preservation of Records. 
Subject to this Section 7.8, Seller and Purchaser each agrees
that it shall preserve and keep the records held by it or its Affiliates
relating to the Purchased Assets and Assumed Liabilities for a period of seven
years from the Closing Date and shall make such records and personnel available
to the other as may be reasonably required by such party in connection with,
among other things, any insurance claims by, legal proceedings against or
governmental investigations of Seller or any of their Affiliates or Purchaser
or any of its Affiliates or in order to enable Seller or Purchaser to comply
with its obligations under this Agreement and each other agreement, document or
instrument contemplated hereby or thereby. 
Notwithstanding the foregoing, in the event Seller or Purchaser wish to
destroy (or permit to be destroyed) such records after three years and before
seven years, such party may destroy (or permit to be destroyed) such records
without liability or obligation to the other party provided that such party
wishing to destroy the records shall first give 90 days prior written notice to
the other, receipt of which notice must be acknowledged, and such other party
shall have the right at its option and 

 48
 

expense, upon prior written notice given to
such party within that 90 day period, to take possession of the records within
180 days after the date of such notice.

7.9           Publicity.

(a)           Except for the issuance of a press release upon the signing of this
Agreement, none of Parent, Seller, their Affiliates nor Purchaser shall issue
any press release or public announcement concerning the terms of this Agreement
or the transactions contemplated hereby without obtaining the prior written
approval of the other party hereto, which approval will not be unreasonably
withheld or delayed, unless, in the reasonable judgment of the respective
counsel of such party, disclosure is otherwise required by applicable Law or by
the applicable rules of any stock exchange on which such party’s securities are
traded; provided, that, to the extent required by applicable Law, such
party shall use its reasonable best efforts consistent with such applicable Law
to consult with the other party with respect to the timing and content thereof.

(b)           Each of Purchaser, Parent and Seller agrees that the terms of this
Agreement shall not be disclosed or otherwise made available to the public and
that copies of this Agreement shall not be publicly filed or otherwise made
available to the public, except where such disclosure, availability or filing
is required by applicable Law and only to the extent required by such Law.  In the event that such disclosure,
availability or filing is required by applicable Law, each of Purchaser and Seller
(as applicable) agrees to use its reasonable best efforts to obtain “confidential
treatment” of this Agreement with the U.S. Securities and Exchange Commission
(or the equivalent treatment by any other Governmental Body) and to redact such
terms of this Agreement the other party shall request.

7.10         Notice to Borrowers and Lessees. 
Purchaser and Seller shall notify each Mortgagor under the Mortgage
Loans of the sale of the Mortgage Loans and each borrower and guarantor under
the Beacon Loans and Leases in accordance with applicable Laws.  As promptly as reasonably practicable after
the Closing Date or at such other times as may be required by applicable Law,
Purchaser and Seller shall jointly notify the appropriate casualty and title
insurance companies and agents, escrow companies, credit reporting agencies,
appraisers and other service providers that the Mortgage Loans, Beacon Loans
and Leases have been transferred, and instruct such entities to deliver all
payments, notices, insurance statements and reports to Purchaser after the
Closing Date.

7.11         Use of Name.  Except as set forth on Schedule 7.11
to the Disclosure Letter, Seller hereby agrees that upon the consummation of
the transactions contemplated hereby, Purchaser will have the sole right to the
use of the trade name “NetBank” and any other trade names used by Seller and
the Subsidiaries and all similar names or any service marks, trademarks, trade
names, identifying symbols, logos, emblems or signs containing or comprising
the phrase “NetBank,” including any name or mark confusingly similar thereto
(collectively, the “Business Marks”) and Seller shall not, and shall not
permit any Affiliate to, use such name or any variation or simulation thereof; provided,
that Seller may continue to use the name “NetBank” until the first anniversary
of the Closing Date pursuant to the terms of the Licensing Agreement attached
hereto as Exhibit E and the Seller and the Subsidiaries may continue to
use the trade names, trademarks, service marks and logos set forth on Schedule
7.11 to the Disclosure Letter.  In
furtherance thereof, as promptly as practicable but in no event later than one
hundred eighty (180) days following the Closing Date, Seller and the
Subsidiaries shall remove, strike over or otherwise obliterate all Business
Marks from all materials owned by Parent and Seller and used or displayed
publicly including, without limitation, any sales and marketing materials,
displays, signs, promotional materials and other materials.

7.12         Net
Worth.   For a period of three years after the
Closing Date, Seller shall maintain a Net Worth equal to at least the Minimum
Net Worth and shall maintain liquidity in an amount that is 

 49
 

reasonably
sufficient to enable Seller to satisfy its indemnification obligations under Article
X of this Agreement.  During such
three year period, Seller shall not make any distributions to its shareholder
or transfer any of its assets if such actions would cause Seller’s net worth to
fall below the Minimum Net Worth or would cause Seller’s liquidity to fall
below an amount that is reasonably sufficient to enable Seller to satisfy its
indemnification obligations under Article X of this Agreement.  For purposes of this Agreement, (i) “Minimum
Net Worth” means an amount equal to $7,000,000 less the amount of any
indemnification payments actually paid to the Purchaser under Article X
of this Agreement and (ii) “Net Worth” means the difference between the
book value of Seller’s assets and Seller’s liabilities, in each case determined
in accordance with GAAP as of the applicable date for which such determination
is to be made.

ARTICLE VIII

EMPLOYEES AND EMPLOYEE BENEFITS

8.1           Employment.

(a)           Transferred Employees.  At
least 15 Business Days prior to Closing, Purchaser shall deliver Schedule
8.1(a) to the Disclosure Letter to Seller identifying those Employees that
will be offered employment with Purchaser following the Closing.  At least five days prior to the
Closing, Purchaser shall deliver, in writing, an offer of employment (on an “at
will” basis) to each of those Employees identified by Purchaser on Schedule
8.1(a) to the Disclosure Letter to commence such employment immediately
upon the Closing Date, which shall include the following: (i) substantially all
of the employees of NetBank Finance, (ii) certain employees of Seller’s corporate
support, banking and servicing divisions such as finance, accounting and
marketing), and (iii) certain other employees of Seller.  Such individuals who accept such offer by the
Closing Date are hereinafter referred to as the “Transferred Employees.”  Subject to applicable Laws, on and after the
Closing Date, Purchaser shall have the right to dismiss any or all Transferred
Employees at any time, with or without cause, and to change the terms and
conditions of their employment (including compensation and employee benefits
provided to them).

(b)           Excluded Employees.  Any Employee who is not offered employment by
Purchaser prior to Closing or who does not accept an offer of employment by
Purchaser and commence work with Purchaser immediately after the Closing, in
each case pursuant to Section 8.1(a), is hereinafter referred to as an “Excluded
Employee.”

(c)           Purchaser shall provide
compensation and employee benefits (including,
without limitation, salary or wages (as appropriate), bonus, health, life and
disability insurance, but specifically excluding stock options, restricted
stock or other plans involving the potential issuance of securities or equity
rights) to Transferred Employees that are no less favorable in the
aggregate to such Transferred Employees and any dependents and beneficiaries of
such Transferred Employees, as appropriate, than those provided to a similarly
situated employee of Purchaser or its Affiliates who is not a Transferred
Employee taking into account the employee’s performance and geographic
location; provided, that if Purchaser terminates any Transferred
Employee’s employment without cause within six (6) months after hiring the
individual, the employee shall be entitled to any severance payment that such
individual would have received had he or she been terminated by the Seller as a
result of the Closing.  Except as
specifically set forth in the immediately preceding sentence with respect to
compensation and benefits for Transferred Employees, nothing in this Agreement
shall be construed as restricting Purchaser, Seller or any Affiliate of the
Purchaser, in the exercise of its independent business judgment, in modifying
any of the terms and conditions of the employment of any employee following the
Closing or terminating the employment of any employee, including any
Transferred Employee, following the Closing.

 50
 

(d)           With respect to the benefit plans of Purchaser in which any Transferred Employee
participates after the Closing (each, a “Purchaser Benefit Plan”),
Purchaser shall cause each such Purchaser Benefit Plan to recognize the service
of each such Transferred Employee prior to the Closing with Seller and its
Affiliates as employment with Purchaser and its Affiliates for purposes of
eligibility and benefit entitlement, but not for purposes of benefit accrual,
under each such Purchaser Benefit Plan.  With
respect to medical, dental and other health and welfare Purchaser Benefit Plans
covering Transferred Employees as required herein, Purchaser shall waive any waiting periods or limitations or
exclusions relating to pre-existing conditions to the extent that such periods,
limitations or exclusions were not applicable to or had been satisfied by such
Transferred Employees immediately prior to the Closing Date under applicable
Employee Benefit Plans of Seller or their Affiliate.

(e)           Purchaser shall not be
responsible (and Seller shall be responsible) for any health and accident
claims and expenses with respect to services provided to the Transferred
Employees prior to the Closing.  Seller
shall not be responsible (and Purchaser shall be responsible) for any health
and accident claims and expenses with respect to services provided to
Transferred Employees from and after the Closing Date.  Purchaser agrees to provide continuation
coverage required by COBRA to all Transferred Employees and their covered
beneficiaries who become entitled to COBRA coverage in connection with a “qualifying
event” (as such term is defined in ERISA) that occurs after the Closing
Date.  Seller shall provide continuation
coverage required by COBRA to all Transferred Employees and their covered
beneficiaries who became entitled to COBRA coverage in connection with a “qualifying
event” that occurred on or before the Closing Date.

(f)            Nothing in this Article
VIII shall require Purchaser or Seller to provide or continue any specific
plans, programs, policies or arrangements. 
Furthermore, Purchaser shall not assume any Employee Benefit Plan which is maintained, contributed to or
required to be contributed to by Seller, and Seller shall retain all
Liabilities and obligations for all benefits incurred, accrued, or legally
committed to, if any, under such Employee Benefit Plans including, without
limitation, responsibility for all welfare plan claims incurred by Employees
and all long or short-term disability claims arising from disabilities.  For this purpose, a claim is incurred when
the medical or other service giving rise to the claim is performed, except that
in the case of death, a claim is incurred upon death.  Seller shall retain all Liabilities and
obligations to provide post-retirement health and life insurance benefits to
former and current Employees (and their covered spouses and dependents)
incurred under the terms of the Employee Benefit Plans which are maintained, contributed to or required to be contributed to
Seller.  Any obligation to provide
employee benefits to Excluded Employees shall remain the obligation of the
Seller. 

(g)           The Transferred Employees will be
eligible within a period that is consistent with other employees participating
in the Purchaser 401(k) Plan after the Closing Date to participate in a plan
established, maintained or adopted by Purchaser which is described in Section
401(k) of the Code (individually a “Purchaser 401(k) Plan”).  To the extent permitted under Section 401(k)
of the Code and the regulations promulgated thereunder, the Purchaser 401(k)
Plan will provide that the Transferred Employees will have the right to make
direct rollovers from Seller’s 401(k) plans to the applicable plan of their
vested accounts in the Purchasers’ 401(k) Plan to the extent those rollovers
constitute “eligible rollover distributions” within the meaning of Section
402(c)(4) of the Code.  Such rollover
distributions received by the Purchaser 401(k) Plan shall not include any
participant loans.  None of the assets
involved in such rollover shall include shares of Parent stock.  The Transferred Employees will receive credit
under the Purchaser 401(k) Plan for all service with Seller or the Subsidiaries
for purposes of satisfying any service requirement to participate in the
applicable plan and any service requirement to earn a vested benefit under the
applicable plan; however, such service shall not be credited for any other
purpose under the Purchaser 401(k) Plan.

 51
 

(h)           Seller shall remain
liable and pay, perform and discharge any and all employment, compensation and
employee benefit liabilities, responsibilities and obligations of Seller and
its Affiliates including, without limitation, any and all claims of employment discrimination
under any local, state, or federal law or ordinance, including, without
limitation, Title VII of the Civil Rights Act of 1964, as amended; the Civil
Rights Act of 1991; the Americans with Disabilities Act of 1990; the Age
Discrimination in Employment Act of 1967, as amended by the Older Workers
Benefit Protection Act of 1990; and Section 510 of ERISA, which Liabilities,
responsibilities and obligations are incurred as the result of incidents
occurring prior to the Closing, regardless of whether claims are made or
reported prior to the Closing.  In the
event that Purchaser or its Affiliate or any benefit plan maintained by
Purchaser or any of its Affiliates directly or indirectly incurs any costs,
liabilities, obligations or legal expenses related to any such incidents
occurring prior to the Closing, Seller shall reimburse and indemnify Purchaser
and its Affiliates for any and all such costs, liabilities, obligations and
expenses immediately upon the demand of Purchaser.

(i)            Notwithstanding anything in this
Agreement to the contrary, the terms of this Agreement shall not amend or have
the effect of amending the terms of any Employee Benefit Plan or Purchaser
Benefit Plan.

8.2           Standard Procedure.  Pursuant to the “Standard Procedure” provided
in Section 4 of Revenue Procedure 96-60, 1996-2 C.B. 399, as
amended and expanded by Rev. Proc. 2004-53, IRS 2004-34 (August 18, 2004),
(i) Purchaser and Seller shall report on a predecessor/successor basis as
set forth therein, (ii) Seller will not be relieved from filing a Form W-2
with respect to any Transferred Employees, and (iii) Purchaser will
undertake to file (or cause to be filed) a Form W-2 for each such
Transferred Employee only with respect to the portion of the year during which
such Employees are employed by the Purchaser that includes the Closing Date,
excluding the portion of such year that such Employee was employed by Seller or
the Subsidiaries.

8.3           Terminated Employees.  At
the Closing, Seller shall deliver to Purchaser a true and complete list of all
Employees who suffered an “employment loss” as defined in WARN within 90 days
prior to the Closing Date.

ARTICLE IX

CONDITIONS TO CLOSING

9.1           Conditions Precedent to Obligations of
Purchaser.  The obligation of Purchaser to consummate the
transactions contemplated by this Agreement is subject to the fulfillment, on
or prior to the Closing Date, of each of the following conditions (any or all
of which may be waived by Purchaser in whole or in part to the extent permitted
by applicable Law):

(a)           the representations and warranties of Seller set forth in this
Agreement qualified as to materiality shall be true and correct, and those not
so qualified shall be true and correct in all material respects, as of the date
of this Agreement and as of the Closing as though made at and as of the
Closing, except to the extent such representations and warranties expressly
relate to an earlier date (in which case such representations and warranties
qualified as to materiality shall be true and correct, and those not so
qualified shall be true and correct in all material respects, on and as of such
earlier date);

(b)           Seller, and Parent in the case of Section 7.6 only, shall have
performed and complied in all material respects with all obligations and
agreements required in this Agreement to be performed or complied with by it
prior to the Closing Date;

 52
 

(c)           there shall not have been or occurred any event, change, occurrence or
circumstance that has had or has a reasonable likelihood of having a Material
Adverse Effect since the Balance Sheet Date;

(d)           Purchaser shall have received a certificate or certificates signed by
the chief executive officer and chief financial officer of Seller each in form
and substance reasonably satisfactory to Purchaser, dated the Closing Date, to
the effect that each of the conditions specified above in Sections
9.1(a)-(c) have been satisfied in all respects;

(e)           no Legal Proceedings shall have been instituted or threatened or claim
or demand made against Seller or Purchaser seeking to restrain or prohibit or
to obtain substantial damages with respect to the consummation of the
transactions contemplated hereby, and there shall not be in effect any Order by
a Governmental Body of competent jurisdiction restraining, enjoining or
otherwise prohibiting the consummation of the transactions contemplated hereby
or imposing a Burdensome Condition;

(f)            (i) the waiting periods under the HSR Act, as
applicable, and the Bank Merger Act shall have expired or early termination
shall have been granted and Seller shall have obtained any other Regulatory
Consent, Order or authorization of, or non-objection to, or registration,
declaration or filing with, any Governmental Body including the OTS and FDIC,
required to be obtained or made in connection with the execution and delivery
of this Agreement or the performance and consummation of the transactions
contemplated hereby and such Regulatory Consents, Orders, authorizations,
non-objections, registrations, declarations and filings shall be in full force
and effect and shall not contain any conditions or restrictions that may be
reasonably expected to materially impair the ability of Purchaser to consummate
the transactions contemplated hereby or operate NetBank Finance or any business
operated by Purchaser or its Affiliates following the Closing in substantially
the same manner it has been operated prior to the date of this Agreement or to
otherwise enjoy the benefits of the Purchased Assets following the Closing
(each a “Burdensome Condition”) and (ii) Seller shall have obtained all
consents, non-objections, waivers and approvals under all Antitrust Laws and
those consents, waivers and approvals referred to in Section 5.3(b) in a
form and substance satisfactory to Purchaser;

(g)           Seller shall have provided Purchaser with affidavits of non-foreign
status of Seller and the Subsidiaries that complies with Section 1445 of the
Code (a “FIRPTA Affidavit”);

(h)           Seller shall have delivered, or caused to be delivered, to Purchaser a
duly executed bill of sale in the form of Exhibit C;

(i)            Seller shall have delivered, or caused to be
delivered, to Purchaser a duly executed assignment and assumption agreement in
the form of Exhibit D and duly executed assignments of the registrations
and applications included in the Purchased Intellectual Property, in a form
reasonably acceptable to Purchaser and suitable for recording in the U.S.
Patent and Trademark Office, U.S. Copyright Office or equivalent foreign
agency, as applicable, and general assignments of all other Purchased Intellectual
Property;

(j)            Seller shall have delivered, or caused to be
delivered, to Purchaser a duly executed Transition Services Agreement;

(k)           Seller shall have delivered, or caused to be delivered, to Purchaser
original execution copies of all documents evidencing and/or securing the
Mortgage Loans, and all Leases and Beacon Loans, Contracts relating to Mortgage
Loans (excluding Investor Contracts and any other contracts relating to
Excluded Assets), Loan Agreements, Lease Agreements and Ancillary Documents, 

 53
 

along with the credit and transaction files
(including all information stored on discs, tapes, or other media) relating to
such Mortgage Loans, Leases or Beacon Loans;

(l)            Seller shall have delivered, or caused to be
delivered, to Purchaser original execution copies of all other documents,
instruments and affidavits needed to transfer the Purchased Assets and the
Assumed Liabilities;

(m)          Seller shall have delivered, or caused to be delivered, to Purchaser
evidence of the release or assignment to Purchaser of the UCC-1 financing
statement(s) filed by Seller or its Affiliates;

(n)           Seller shall have delivered, or caused to be delivered, to Purchaser
evidence that (i) Mortgage Loans, Mortgage Notes, Loan Agreements, Lease
Agreements and Ancillary Documents to be assigned and delivered to Purchaser at
the Closing have been so assigned and delivered, (ii) all UCC-1 financing
statements in favor of Seller or the Subsidiaries relating to any Purchased
Assets have been assigned to Purchaser, (iii) except as otherwise directed by
Purchaser in writing, all Assignments of Mortgages have been executed and
properly filed and recorded in the applicable public recording offices, and
(iv) all lockbox agreements and blocked account agreements have been assigned
to Purchaser;

(o)           Seller shall have delivered, or caused to be delivered, to Purchaser a
duly executed Holdback Agreement;

(p)           Each of the individuals listed on Schedule 7.5(c) to the
Disclosure Letter shall have entered into an employment agreement acceptable to
Purchaser and such agreement shall be in full force and effect;

(q)           Seller shall have delivered, or caused to be delivered, to Purchaser
(i) certified copies of the resolutions of the Board of Directors of the
Bank and Parent, in each case authorizing and approving this Agreement and the
consummation of the transactions contemplated hereby; (ii) a copy of the
certificate of incorporation or any other similar organizational or governing
document of Seller certified as of a recent date by the Secretary of State of the
jurisdiction of incorporation or organization of each such Person; (iii) a copy
of the bylaws, partnership or limited liability company agreement, or any other
similar organizational or governing document of Seller and the Subsidiaries
certified by the Secretary of Seller; and (iv) certificates of good standing
for Seller and the Subsidiaries from the Secretary of State of the state of
their respective incorporation or organization, in each case dated not more
than ten days prior to the Closing Date;

(r)            Seller shall have delivered, or caused to be
delivered, to Purchaser such other documents as Purchaser may reasonably
request; 

(s)           Seller or any of the
Subsidiaries (i) have not entered into a Contract relating to, or consummated,
an Acquisition Transaction and (ii) complied in all material respects with
their covenants, obligations, agreements and undertakings set forth in Section
7.6; 

(t)            Seller shall have delivered, or caused to be
delivered, to Purchaser evidence of the wire transfer referred to in Section
3.3, if applicable; and 

(u)           Seller shall have
caused the Purchased Intellectual Property set forth on Schedule 1.1(d)
and the Purchased Technology set forth on Schedule 1.1(e) to be assigned
to Purchaser.

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9.2           Conditions Precedent to Obligations of Seller.  The
obligations of Seller to consummate the transactions contemplated by this
Agreement are subject to the fulfillment, prior to or on the Closing Date, of
each of the following conditions (any or all of which may be waived by Seller
in whole or in part to the extent permitted by applicable Law):

(a)           the representations and warranties of Purchaser set forth in this
Agreement qualified as to materiality shall be true and correct, and those not
so qualified shall be true and correct in all material respects, as of the date
of this Agreement and as of the Closing as though made at and as of the
Closing, except to the extent such representations and warranties expressly
relate to an earlier date (in which case such representations and warranties
qualified as to materially shall be true and correct, and those not so
qualified shall be true and correct in all material respects, on and as of such
earlier date);

(b)           Purchaser shall have performed and complied in all respects with all
obligations and agreements required by this Agreement to be performed or
complied with by Purchaser on or prior to the Closing Date;

(c)           there shall not be in effect any Order by a Governmental Body of
competent jurisdiction restraining, enjoining or otherwise prohibiting the consummation
of the transactions contemplated hereby;

(d)           the waiting periods under the HSR Act and the Bank Merger Act shall
have expired or early termination shall have been granted and Purchaser shall
have obtained any other consent, approval, order or authorization of,
non-objection to, or registration, declaration or filing with, any Governmental
Body, including the OTS and FDIC, required to be obtained or made in connection
with the execution and delivery of this Agreement or the performance of the transactions
contemplated herein;

(e)           Purchaser shall have delivered, or caused to be delivered, to Seller
evidence of the wire transfer referred to in Section 3.3, if applicable;
and

(f)            Purchaser shall have delivered, or caused to
be delivered, to Seller a duly executed assignment and assumption agreement in
the form attached hereto as Exhibit E. 

ARTICLE X

INDEMNIFICATION

10.1         Survival of Representations and Warranties.  The
representations and warranties of the parties contained in Articles V
and VI of this Agreement or in any Seller Document or Purchaser Document
shall survive the Closing through and including the third anniversary of the
Closing Date; provided, that the representations and warranties (a) of
Seller set forth in Sections 5.1 (organization), 5.2
(authorization), 5.6 (title), and 5.23 (financial advisors) shall
survive the Closing indefinitely, (b) of Seller set forth in Sections 5.8
(taxes), 5.13 (employee benefits), and 5.17 (environmental
matters) shall survive the Closing until sixty (60) days following the
expiration of the applicable statute of limitations with respect to the
particular matter that is the subject matter thereof and (c) of Purchaser set
forth in Sections 6.1 (organization), 6.2 (authorization) and 6.5
(financial advisors) shall survive the Closing indefinitely (in each case, the “Survival
Period”); provided, further that any obligation to indemnify and
hold harmless shall not terminate with respect to any Losses as to which the
Person to be indemnified shall have given notice (stating in reasonable detail
the basis of the claim for indemnification) to the indemnifying party in
accordance with Section 10.3(a) before the termination of the applicable
Survival Period.  Unless a specified
period is set forth in this Agreement (in which event such specified period
will 

 55
 

control), the covenants and other agreements
in this Agreement will survive the Closing and remain in effect indefinitely.

10.2         Indemnification.

(a)           Subject to Sections 10.1, Section 10.4 and Section 10.5,
Seller and Parent hereby agree, jointly and severally, to indemnify and hold
Purchaser and its directors, officers, employees, Affiliates, stockholders,
agents, attorneys, representatives, successors and assigns (collectively, the “Purchaser
Indemnified Parties”) harmless from and against:

(i)            any and all losses,
Taxes, Liabilities, claims, demands, judgments, obligations, damages, costs and
expenses (including costs of investigation and defense and reasonable attorneys’
and other professionals’ fees) or diminution in value whether or not involving
a third party claim (individually, a “Loss” and, collectively, “Losses”)
directly related to the failure of Seller’s representations and warranties set
forth in Section 5.20, or otherwise based upon, attributable to or resulting
from the failure of any of the other representations or warranties of Seller
set forth in this Agreement or in any Seller Document, to be true and correct
in all respects at the date hereof and at the Closing Date (without giving
effect to any materiality, Material Adverse Effect or Knowledge qualifier
contained therein) or in any document purporting to assign, convey or transfer
Purchased Assets or Assumed Liabilities in connection with the transactions
contemplated hereby (each a “Transfer Document” and collectively the “Transfer
Documents”);

(ii)           any and all Losses based upon, attributable to or resulting from the
breach of any covenant or other agreement on the part of Seller under this
Agreement or any Seller Document;

(iii)          any and all Losses attributable to any Transferred Employee resulting
from or based upon (A) any employment-related liability (statutory or
otherwise) with respect to employment or termination of employment on or prior
to the Closing Date, (B) except as set forth in the Transition Services
Agreement, any liability relating to, arising under or in connection with any
Employee Benefit Plan, including any liability under COBRA, whether arising
prior to, on or after the Closing Date and (C) any liability under WARN;

(iv)          any and all Losses arising out of, based upon or relating to any
Excluded Asset, Excluded Liability or Excluded Employee;

(v)           any Losses caused by or
arising out of the absence of or any defect or deficiency in the contents of
filings or recordings in any public office of financing statements,
continuations statements or mortgages or other documents or instruments or
notices necessary under the provisions of the Uniform Commercial Code, any real
property law or any comparable statute in all places where required on, before
or after the Closing, to perfect, preserve and protect the interests in all
Mortgage Loans, Beacon Loans and Leases transferred to Purchaser pursuant to
this Agreement; and

(vi)          Any Losses caused by or
arising out of the obligations of Seller under Article XI.

(b)           Subject to Sections 10.1 and 10.4, Purchaser hereby
agrees to indemnify and hold Seller and its Affiliates, stockholders, agents,
attorneys, representatives, successors and permitted assigns (collectively, the
“Seller Indemnified Parties”) harmless from and against:

 56

(i)            any and all Losses based upon, attributable
to or resulting from the failure of any of the representations or warranties of
Purchaser set forth in this Agreement or any Purchaser Document, to be true and
correct at the date hereof and at the Closing Date (without giving
effect to any materiality, Material Adverse Effect or Knowledge qualifier
contained therein);

(ii)           any and all Losses based upon, attributable to or resulting from the
breach of any covenant or other agreement on the part of Purchaser under this
Agreement or any Purchaser Document; and

(iii)          any and all Losses arising out of, based upon or relating to any
Assumed Liability.

(c)           The right to indemnification or any other remedy based on
representations, warranties, covenants and agreements in this Agreement shall
not be affected by any investigation conducted with respect to, or any
knowledge acquired (or capable of being acquired) at any time, whether before
or after the execution and delivery of this Agreement or the Closing Date, with
respect to the accuracy or inaccuracy of or compliance with, any such
representation, warranty, covenant or agreement.  The waiver of any condition based on the
accuracy of any representation or warranty, or on the performance of or
compliance with any covenant or agreements, will not affect the right to
indemnification or any other remedy based on such representations, warranties,
covenants and agreements.

(d)           From and after the
Closing, indemnification pursuant to this Article X shall be the
exclusive remedy of the parties hereto for any Losses arising out of or
relating to this Agreement, except in the case of fraud, bad faith, willful
misconduct or willful breach of this Agreement.    

(e)           The amount of any
Losses for which indemnification is provided under this Article 10 shall
be net of any insurance proceeds (net of applicable policy deductibles and
associated premium increases) that are actually received as an offset against
such Losses.

(f)            No Person shall be entitled to collect
punitive damages, special damages or consequential damages by operation of this
Article X or any other provision of this Agreement, except insofar as
such punitive, special or consequential damages are owed to a third party and
otherwise constitute Losses hereunder 

10.3         Indemnification Procedures.

(a)           A claim for indemnification for any matter not involving a third party
claim may be asserted by notice to the party from whom indemnification is
sought.

(b)           In the event that any Legal Proceedings shall be instituted or that any
claim or demand shall be asserted by any third party in respect of which
payment may be sought under Section 10.2 hereof (regardless of the
limitations set forth in Section 10.4) (“Indemnification Claim”),
the indemnified party shall reasonably and promptly cause written notice of the
assertion of any Indemnification Claim of which it has knowledge which is
covered by this indemnity to be forwarded to the indemnifying party.  The indemnifying party shall have the right,
at its sole expense, to be represented by counsel of its choice, which must be
reasonably satisfactory to the indemnified party, and to defend against,
negotiate, settle or otherwise deal with any Indemnification Claim which
relates to any Losses indemnified against hereunder; provided, that the
indemnifying party shall have acknowledged in writing to the indemnified party
its unqualified obligation to indemnify the indemnified party as provided 

 57
 

hereunder. 
If the indemnifying party elects to defend against, negotiate, settle or
otherwise deal with any Indemnification Claim which relates to any Losses
indemnified against hereunder, it shall within five days (or sooner, if the
nature of the Indemnification Claim so requires) notify the indemnified party
of its intent to do so.  If the
indemnifying party elects not to defend against, negotiate, settle or otherwise
deal with any Indemnification Claim which relates to any Losses indemnified
against hereunder, fails to notify the indemnified party of its election as
herein provided or contests its obligation to indemnify the indemnified party
for such Losses under this Agreement, the indemnified party may defend against,
negotiate, settle or otherwise deal with such Indemnification Claim, and in
such event, the indemnifying party shall reimburse the indemnified party for
the reasonable expenses of defending such Indemnification Claim upon submission
of periodic bills.  If the indemnifying
party shall assume the defense of any Indemnification Claim, the indemnified
party may participate, at his or its own expense, in the defense of such
Indemnification Claim; provided, that such indemnified party shall be
entitled to participate in any such defense with separate counsel at the
expense of the indemnifying party if (i) so requested by the indemnifying party
to participate or (ii) in the reasonable opinion of counsel to the indemnified
party a conflict or potential conflict exists between the indemnified party and
the indemnifying party that would make such separate representation advisable;
and provided, further, that the indemnifying party shall not be required
to pay for more than one such counsel (and any appropriate local counsel) for
all indemnified parties in connection with any Indemnification Claim.  The parties hereto agree to cooperate fully
with each other in connection with the defense, negotiation or settlement of
any such Indemnification Claim. 
Notwithstanding anything in this Section 10.3 to the contrary,
neither the indemnifying party nor the indemnified party shall, without the
written consent of the other party, settle or compromise any Indemnification
Claim or permit a default or consent to entry of any judgment unless the
claimant and such party provide to such other party an unqualified release from
all liability in respect of the Indemnification Claim.  Notwithstanding the foregoing, if a
settlement offer solely for money damages is made by the applicable third party
claimant, and the indemnifying party notifies the indemnified party in writing
of the indemnifying party’s willingness to accept the settlement offer and,
subject to the applicable limitations of Section 10.4, pay the amount
called for by such offer, and the indemnified party declines to accept such
offer, the indemnified party may continue to contest such Indemnification Claim,
free of any participation by the indemnifying party, and the amount of any
ultimate liability with respect to such Indemnification Claim that the
indemnifying party has an obligation to pay hereunder shall be limited to the
lesser of (A) the amount of the settlement offer that the indemnified
party declined to accept plus the Losses of the indemnified party relating to
such Indemnification Claim through the date of its rejection of the settlement
offer or (B) the aggregate Losses of the indemnified party with respect to
such Indemnification Claim.  If the
indemnifying party makes any payment on any Indemnification Claim, the
indemnifying party shall be subrogated, to the extent of such payment, to all
rights and remedies of the indemnified party to any insurance benefits or other
claims of the indemnified party with respect to such Indemnification Claim.

(c)           Notwithstanding the foregoing, if an indemnified party determines
in good faith that there is a reasonable probability that an Indemnification
Claim related to a third party claim (i) may adversely affect it, the Assumed
Liabilities, NetBank Finance, the Purchased Assets or any of its Affiliates
other than solely as a result of monetary damages for which it could be
entitled to indemnification under this Agreement, (ii) may have a material and
adverse effect upon the conduct or reputation of the indemnified party after
the Closing Date (which shall include any purported class action claim against
Purchaser and/or its Affiliates and any claim based on an investigation,
inquiry or other proceeding by a Governmental Body), or (iii) relates to Taxes
and involves matters that are not indemnified hereunder or is reasonably
anticipated to increase the Tax Liability for any post-closing tax period, the
indemnified party may, by notice to the indemnifying party, assume the
exclusive right to defend, compromise or settle such Indemnification Claim at
the indemnifying party’s expense; provided, that  no such compromise, discharge or settlement
of, or admission of Liability in connection with, such 

 58
 

claims may be
effected by the indemnified party without the indemnifying party’s written
consent (which shall not be unreasonably withheld, conditioned or delayed).

(d)           After any final judgment or award shall have been rendered by a
Governmental Body of competent jurisdiction and the expiration of the time in
which to appeal therefrom, or a settlement shall have been consummated, or the
indemnified party and the indemnifying party shall have arrived at a mutually
binding agreement with respect to an Indemnification Claim hereunder, the
indemnified party shall forward to the indemnifying party notice of any sums
due and owing by the indemnifying party pursuant to this Agreement with respect
to such matter and the indemnifying party shall be required to pay all of the
sums so due and owing to the indemnified party by wire transfer of immediately
available funds within five Business Days after the date of such notice. If
Seller is the indemnifying party and fails to make payment of amounts due in
accordance with this Article X, Purchaser may, at its option, (i) reduce
the Indemnification Holdback Amount by any sums due and owning to Purchaser
pursuant to this Article X in partial or total satisfaction of one or
more indemnification payments due from Seller to Purchaser under this Article
X or (ii) take any and all necessary actions to enforce its right to
payment of any amounts due and owing Purchaser by Seller under this Article
X including bringing any Legal Proceeding against Seller or Parent or both.

(e)           The failure of the indemnified party to give reasonably prompt notice
of any Indemnification Claim or the indemnifying party to give reasonably
prompt notice of its election as to whether to assume the defense of any
Indemnification Claim shall not release, waive or otherwise affect the parties’
rights and obligations with respect thereto except to the extent that the
indemnifying party can demonstrate actual loss and prejudice as a result of
such failure.

10.4         Limitations on Indemnification for Breaches
of Representations and Warranties.

(a)           An indemnifying party shall not have any liability under Section
10.2(a)(i) or Section 10.2(b)(i) hereof unless the aggregate amount
of Losses to the indemnified parties finally determined to arise thereunder
based upon, attributable to or resulting from the failure of any of the
representations or warranties (other than the representations and warranties
set forth in Sections 5.1 (organization), 5.2 (authorization), 5.6
(title), 5.8 (taxes), 5.20 (loan originations), 5.21
(Beacon loans), 5.23 (financial advisors), 5.24 (deposits), 6.1
(organization), 6.2 (authorization), 6.5 (financial advisors) and
the obligations under Section 11.1 hereof) to be true and correct exceeds
$250,000 (the “Basket”) and, in such event, the indemnifying party shall
be required to pay the entire amount of such Losses.

(b)           Seller and Parent shall not have any liability under Section
10.2(a)(i) with respect to the failure of the representations and
warranties set forth in Section 5.24 (deposits) unless the aggregate
amount of Losses to Purchaser finally determined to arise thereunder based
upon, attributable to or resulting from the failure of such representations or
warranties to be true and correct exceeds $250,000 (the “Deposit Deductible”)
and, in such event, the indemnifying party shall be required to pay the amount
of such Losses in excess of the Deposit Deductible.

(c)           Neither Seller nor Purchaser shall be required to indemnify any Person
under Section 10.2(a)(i) or 10.2(b)(i) for an aggregate amount of
Losses exceeding $10,000,000 (the “Cap”) in connection with Losses
related to the breach of any of the representations and warranties of Seller or
Purchaser in Articles V and VI, respectively; provided,
that the Cap limitation shall not apply to Losses related to the failure of any
representation or warranty contained in Sections 5.1 (organization), 5.2
(authorization), 5.6 (title), 5.8 (taxes) 5.20 (loan
origination), 5.21 (Beacon loans), 5.23 (financial advisors), 5.24
(deposits), 6.1 (organization), 6.2 (authorization), 6.5
(financial advisors) and the obligations under Section 11.1 to be true and
correct.

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(d)           The indemnification
obligations of any party hereunder shall be reduced to the extent that the
Indemnified Party, through willful or grossly negligent action, inaction or
omission contributes to the Loss.

10.5         Tax Treatment of Indemnity Payments. 
Seller and Purchaser agree to treat any indemnity payment made pursuant
to this Article X as an adjustment to the Purchase Price for all Tax
purposes.  If, notwithstanding the
treatment required by the preceding sentence, any indemnification payment is
determined to be taxable to the Purchaser Indemnified Parties by any Taxing
Authority, Seller shall also indemnify the Purchaser Indemnified Parties for
any Taxes incurred by reason of the receipt of such payment and any expenses
incurred by the party receiving such payment in connection with such Taxes (or
any asserted deficiency, claim, demand, action, suit, proceeding, judgment or
assessment, including the defense or settlement thereof, relating to such
Taxes).

ARTICLE XI

TAXES

11.1         Transfer Taxes. 
Seller shall (i) be responsible for any and all sales, use, stamp,
documentary, filing, recording, transfer, real estate transfer, stock transfer,
gross receipts, registration, duty, securities transactions or similar fees or
Taxes or governmental charges (together with any interest or penalty, addition
to tax or additional amount imposed) as levied by any Taxing Authority in
connection with the transactions contemplated by this Agreement (collectively, “Transfer
Taxes”), regardless of the Person liable for such Transfer Taxes under
applicable Law and (ii) timely file or caused to be filed all necessary
documents (including all Tax Returns) with respect to Transfer Taxes.

11.2         Prorations.  Seller shall bear all property
and ad valorem Tax Liability with respect to the Purchased Assets if the Lien
or assessment date arises prior to the Closing Date irrespective of the reporting
and payment dates of such taxes.  All
other real property Taxes, personal property Taxes, or ad valorem obligations
and similar recurring Taxes and fees on the Purchased Assets for taxable
periods beginning before, and ending after, the Closing Date, shall be prorated
between Purchaser and Seller as of the Closing Date.  The portion to be paid by the Seller will be
based on a fraction, the numerator of which is the number of days in the
Taxable period ending on the Closing Date and the denominator of which is the
total number of days in such Taxable Period. 
With respect to Taxes described in this Section 11.2, Seller
shall timely file all Tax Returns due before the Closing Date with respect to
such Taxes and Purchaser shall prepare and timely file all Tax Returns due
after the Closing Date with respect to such Taxes.  If one party remits to the appropriate Taxing
Authority payment for Taxes, which are subject to proration under this Section
11.2 and such payment includes the other party’s share of such Taxes, such
other party shall promptly reimburse the remitting party for its share of such
Taxes.

 60
 

11.3         Cooperation on Tax Matters.  Purchaser
and Seller shall furnish or cause to be furnished to each other, as promptly as
practicable, such information and assistance relating to the Purchased Assets
and the Assumed Liabilities as is reasonably necessary for the preparation and
filing of any Tax Return, claim for refund or other filings relating to Tax
matters, for the preparation for any Tax audit, for the preparation for any Tax
protest, for the prosecution or defense of any suit or other proceeding
relating to Tax matters.

ARTICLE XII

MISCELLANEOUS

12.1         Expenses.  Except as otherwise provided
in this Agreement, each of Seller and Purchaser shall bear its own expenses
incurred in connection with the negotiation and execution of this Agreement and
each other agreement, document and instrument contemplated by this Agreement
and the consummation of the transactions contemplated hereby and thereby.

12.2         Submission to Jurisdiction; Consent to
Service of Process; Waiver of Jury Trial.

(a)           The parties hereto hereby irrevocably submit to the non-exclusive
jurisdiction of any federal or state court located within the State of Florida
over any dispute arising out of or relating to this Agreement or any of the
transactions contemplated hereby and each party hereby irrevocably agrees that
all claims in respect of such dispute or any suit, action proceeding related
thereto may be heard and determined in such courts.  The parties hereby irrevocably waive, to the
fullest extent permitted by applicable Law, any objection which they may now or
hereafter have to the laying of venue of any such dispute brought in such court
or any defense of inconvenient forum for the maintenance of such dispute.  Each of the parties hereto agrees that a
judgment in any such dispute may be enforced in other jurisdictions by suit on
the judgment or in any other manner provided by Law.

(b)           EACH PARTY HERETO HEREBY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY
WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND
DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO
THIS AGREEMENT, ANY DOCUMENT REFERRED TO IN THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY AND THEREBY. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (i)
NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) EACH SUCH PARTY
UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii) EACH SUCH
PARTY MAKES THIS WAIVER VOLUNTARILY, AND (iv) EACH SUCH PARTY HAS BEEN INDUCED
TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 12.2.

(c)           Each of the parties hereto hereby consents to process being served by
any party to this Agreement in any suit, action or proceeding by the delivery
of a copy thereof in accordance with the provisions of Section 12.5.

12.3         Entire Agreement; Amendments and Waivers.  This
Agreement (including the schedules and exhibits hereto) represents the entire
understanding and agreement between the parties hereto with respect to the
subject matter hereof.  This Agreement
can be amended, supplemented or changed, and any 

 61
 

provision hereof can be waived, only by
written instrument making specific reference to this Agreement signed by the
party against whom enforcement of any such amendment, supplement, modification
or waiver is sought.  No action taken
pursuant to this Agreement, including any investigation by or on behalf of any
party, shall be deemed to constitute a waiver by the party taking such action
of compliance with any representation, warranty, covenant or agreement
contained herein.  The waiver by any
party hereto of a breach of any provision of this Agreement shall not operate
or be construed as a further or continuing waiver of such breach or as a waiver
of any other or subsequent breach.  No
failure on the part of any party to exercise, and no delay in exercising, any
right, power or remedy hereunder shall operate as a waiver thereof, nor shall
any single or partial exercise of such right, power or remedy by such party
preclude any other or further exercise thereof or the exercise of any other
right, power or remedy.  All remedies
hereunder are cumulative and are not exclusive of any other remedies provided
by Law.

12.4         Governing Law.  This
Agreement shall be governed by and construed in accordance with the law of the
State of New York applicable to contracts made and performed in such State.

12.5         Notices.  All notices and other
communications under this Agreement shall be in writing and shall be deemed
given (i) when delivered personally by hand (with written confirmation of
receipt), (ii) when sent by facsimile (with written confirmation of
transmission) or (iii) one Business Day following the day sent by overnight
courier (with written confirmation of receipt), in each case at the following
addresses and facsimile numbers (or to such other address or facsimile number
as a party may have specified by notice given to the other party pursuant to
this provision):

If to Seller, to:

NetBank

9710 Two Notch Road

Columbia, South Carolina

Facsimile:

Attention: Steven F.
Herbert, Chief Executive Officer

With
a copy to:

Powell Goldstein LLP

1201 West Peachtree Street, 14th Floor

Atlanta, Georgia  30303

Facsimile: (404) 572-6999

Attention: Walter G.
Moeling, IV

If
to Purchaser, to:

EverBank

8100 Nations Way

Jacksonville, Florida 32256

Facsimile: (904)
281-6443

Attention:
General Counsel

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With a copy to:

Alston & Bird LLP

The Atlantic Building

950 F Street, N.W.

Washington, D.C. 20004

Facsimile: (202) 756-3333

Attention: Michael P. Reed

12.6         Severability.  If
any term or other provision of this Agreement is invalid, illegal, or incapable
of being enforced by any law or public policy, all other terms or provisions of
this Agreement shall nevertheless remain in full force and effect so long as
the economic or legal substance of the transactions contemplated hereby is not
affected in any manner materially adverse to any party.  Upon such determination that any term or
other provision is invalid, illegal, or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible in an acceptable
manner in order that the transactions contemplated hereby are consummated as
originally contemplated to the greatest extent possible.

12.7         Binding Effect; Assignment.  This
Agreement shall be binding upon and inure to the benefit of the parties and
their respective successors and permitted assigns.  Nothing in this Agreement shall create or be
deemed to create any third party beneficiary rights in any Person not a party
to this Agreement except as provided below. 
No assignment of this Agreement or of any rights or obligations
hereunder may be made by either Seller or Purchaser (by operation of law or
otherwise) without the prior written consent of the other parties hereto and
any attempted assignment without the required consents shall be void; provided,
that Purchaser may assign this Agreement and any or all rights or obligations
hereunder (including, without limitation, Purchaser’s rights to purchase the
Purchased Assets and assume the Assumed Liabilities and Purchaser’s rights to
seek indemnification hereunder) to any Affiliate of Purchaser, or any Person to
which Purchaser or any of its Affiliates proposes to sell all or substantially
all of Purchased Assets.  Upon any such
permitted assignment, the references in this Agreement to Purchaser shall also
apply to any such assignee unless the context otherwise requires.

12.8         Knowledge.  When references are made in
this Agreement to information being to the  “Knowledge of Parent”
or “Knowledge of Seller” or similar language, such knowledge shall refer
to the knowledge of any current or previous officer or director of Parent or
the Bank, as applicable. Such individuals shall be deemed to have “knowledge”
of a particular fact or other matter if: (a) such individual is actually aware
of such fact or other matter; or (b) a prudent individual in such person’s
capacity with Seller could be expected to discover or otherwise become aware of
such fact or other matter in the course of conducting a reasonably
comprehensive investigation concerning the existence of such fact or other
matter.

12.9         Disclosure Letter.

(a)           The disclosures in the
Disclosure Letter must relate, and notwithstanding anything to the contrary
therein, shall be deemed to relate, only to the specific section (or subsection
thereof, if applicable) of the Agreement to which they expressly relate and not
to any other section or subsection of the Agreement.

(b)           In the event of an
inconsistency between the statements in the body of this Agreement and those in
such Disclosure Letter (other than an exception expressly set forth in the
Disclosure Letter with respect to a specifically identified section or
subsection), the statements in the body of this Agreement will control.

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12.10       Parent Agreement and
Obligations

(a)           Parent hereby agrees to
be jointly and severally liable for the prompt and complete performance of
Seller’s obligations under this Agreement, including its no shop covenants
under Section 7.6 and indemnification obligations under Article X,
subject to the same terms, conditions, procedural requirements and limitations
that apply to Seller’s indemnification obligations hereunder, as if Parent had
delivered or made the same representations, warranties, covenants and
agreements that Seller has delivered or made hereunder, on a joint and several
basis.  Parent’s obligations hereunder
are unconditional (other than with respect to the conditions applicable to
Seller hereunder) irrespective of any circumstances which might otherwise
constitute, by operation of law, a discharge of a guarantor and it shall not be
necessary for Purchaser to institute or exhaust any remedies or causes of
action against Seller or any other Person as a condition to the obligations of
Parent hereunder.  In addition, Parent
agrees to be, and agrees to cause its Affiliates to be, subject to the
restrictions, limitations, prohibitions and other covenants set forth in Section
7.6

(b)           Parent hereby
irrevocably waives any right to receive a separate formal notification or to
request that any other formalities or protest be accomplished as a condition to
its obligations hereunder, and expressly undertakes not to exercise, and waives
to the fullest extent lawful, any rights that it may have under applicable law

12.11       Non-Recourse.  No past, present or future director, officer,
employee, incorporator, member, partner, stockholder, Affiliate, agent,
attorney or representative of Purchaser or its Affiliates shall have any
liability for any obligations or liabilities of Purchaser under this Agreement
or the Purchaser Documents of or for any claim based on, in respect of, or by
reason of, the transactions contemplated hereby and thereby.

12.12       Counterparts.  This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original copy of this
Agreement and all of which, when taken together, will be deemed to constitute
one and the same agreement.

[Signatures on following page]

 64

IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be executed by their respective officers thereunto duly
authorized as of the date first written above.

	
  

  	
  EVERBANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert M. Clements

  	
   

  
	
   

  	
   

  	
   Name: Robert M. Clements

  
	
   

  	
   

  	
   Title: Chairman and Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  NETBANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Steven F. Herbert

  	
   

  
	
   

  	
   

  	
   Name: Steven F. Herbert

  
	
   

  	
   

  	
   Title: President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  NETBANK, INC. (with respect to Section 12.10 only)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Steven F. Herbert

  	
   

  
	
   

  	
   

  	
   Name: Steven F. Herbert

  
	
   

  	
   

  	
   Title: Chief Executive Officer

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00124-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00124-of-00352.parquet"}]]