Document:

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                        INDEPENDENT CONTRACTOR AGREEMENT

       THIS INDEPENDENT CONTRACTOR AGREEMENT ("Agreement") is made and entered
into as of May 1, 2007 between Dennis P. Gauger (hereinafter referred to as
"Contractor") whose address is 620 East 100 North, Alpine, Utah 84004, and BSD
Medical Corporation, a Delaware corporation, (hereinafter referred to as the
"Company").

                                   WITNESSETH:

       WHEREAS, the Company desires to obtain the services of Contractor as a
Chief Financial Officer and in such other capacities that the Company deems
appropriate;

       WHEREAS, Contractor desires to perform services for the Company; and

       WHEREAS, the Company and Contractor desire to set forth in the Agreement
the terms and conditions of such relationship.

       NOW, THEREFORE, in consideration of the mutual promises and covenants
hereinafter set forth, the parties hereto do promise and agree as follows:

       1.     DURATION AND TERMINATION

       This AGREEMENT shall become effective as of the date hereof and shall
continue thereafter for a period of one (1) year unless terminated in accordance
with the provisions hereof.

       2.     DUTIES OF CONTRACTOR

       2.1    During the term hereof, the Contractor agrees to use his best
efforts and devote such time as may be reasonably necessary to perform the
duties listed in Exhibit "A" hereto.

       2.2    While the Contractor has the right to enter into engagements to
perform services for other entities, the Contractor agrees that during the term
hereof he will not perform any services for any entity which directly or
indirectly competes with the Company or otherwise creates a conflict of
interest.

       2.3    The Contractor shall conduct all of his business in his own name
and in such manner as consistently exhibits high standards and integrity.

       2.4    The Contractor shall abide by the policies from time to time
established by the Company.

       3.     OBLIGATIONS OF THE COMPANY

                                       1
<PAGE>

       3.1    The Company agrees to pay Contractor in accordance with the
schedule listed in Exhibit "B" attached hereto.

       3.2    The Company shall exercise no control over the conduct of the
Contractor's business and the Company shall not be responsible for any act of
the Contractor in the conduct of such business.

       4.     AGENCY

       The parties hereto agree that the scope of the Contractor's agency
hereunder is limited to performing the services identified in Exhibit "A" and
that the Contractor is not authorized to make any representation, agreement or
contract, or incur any obligation or indebtedness on behalf of the Company of
any kind, regardless of the nature thereof, except as authorized by the Board of
Directors of the Company.

       5.     EXPENSES

       The Company shall reimburse the Contractor for all reasonable expenses
incurred by the Contractor directly related to the performance of his duties
hereunder, including, without limitation, travel, lodging, meals, long distance
telephone, SEC and Sarbanes-Oxley compliance reference services, and office
supplies. The Contractor shall be responsible for all other expenses related to
the operation of his local office, including, without limitation, insurance,
telephone, office supplies, professional licenses and dues, FICA, state and
federal taxes, unemployment tax and disability insurance.

       6.     RELATIONSHIP

       The relationship of the Contractor to the Company is that of an
independent contractor, and nothing contained herein or otherwise shall be
construed in such a manner as to create the relationship of employer-employee
between the Company and any of the contractors, agents and employees of the
Contractor. The Company shall not be responsible in any manner for the
Contractor's Social Security withholding, federal or state income tax
withholding, or any comparable unemployment law of any other appropriate state
or jurisdiction and any other amounts required to be withheld or paid by an
employer with respect to its employees under any applicable laws or regulations.
The Contractor agrees to either obtain and maintain workers compensation
insurance through out the term of this Agreement and to provide the Company with
a certificate showing coverage within 30 days of the date first written above.

       7.     TERMINATION

       This Agreement and all rights granted to the Contractor hereunder may, at
the option of either party, be terminated, with or without reason, ninety (90)
days after written notice is provided to the other party. Upon termination, all
obligations of the parties shall cease.

                                       2
<PAGE>

       8.     ASSIGNMENT

       This Agreement may not be assigned by either party without the express
prior written consent of the other; provided, however, that (i) if the Company
shall merge or consolidate with or into, or transfer substantially all of its
assets, including goodwill, in a single transaction or a series of related
transactions, to an unrelated purchaser, this Agreement shall be binding upon
and inure to the benefit of the successor from such merger, consolidation or
sale, and (ii) either party may assign this Agreement to a subsidiary, parent or
affiliated entity without obtaining such consent, and (iii) the Company may
withhold its consent to a proposed assignment in the event the Contractor shall
merge or consolidate with or into, or transfer substantially all of its assets,
including goodwill, in a single transaction or a series of related transactions,
to an unrelated purchaser or purchasers.

       9.     NOTICE

       Any notice required or permitted to be given hereunder shall be deemed to
be sufficiently given and received in all respects if personally delivered or if
deposited in the United States Mail, certified mail, postage pre-paid, return
receipt requested, addressed to the addressee at its or his last address
furnished to the sender in writing by the addressee for the purpose of receiving
notices hereunder, or, unless or until such address shall have been so
furnished, addressed to the addressee at the address indicated in the opening
paragraph of this Agreement.

       10.    AMENDMENT

       This Agreement may not be modified, amended, terminated or discharged
except in writing and signed by the parties hereto.

       11.    ENFORCEMENT FEES

       The parties hereto acknowledge and agree that in the event of any dispute
or proceeding initiated under this Agreement, the party prevailing in the
ultimate award shall, in addition to the other remedies and damages actually
awarded, be entitled to reimbursement of all reasonable attorneys' fees and
other out-of-pocket costs and disbursements incurred by the party in asserting
its claims hereunder.

       12.    ENTIRE AGREEMENT

       All terms, covenants and conditions of this Agreement are contained
herein and there are no other warranties, obligations, covenants or
understandings between the parties other than those expressed herein. Any and
all agreements for solicitation of orders, as amended, modified, or
supplemented, heretofore entered into between the parties hereto, or claims or
compensation arising therefrom, are hereby canceled, terminated and released as
of the effective date of this Agreement.

                                       3
<PAGE>

       13.    WAIVER

       The parties agree that if any provision of this Agreement shall under any
circumstance be invalid or inoperative, this Agreement shall be construed with
the invalid or inoperative provision deleted, and the rights and obligations of
the parties shall be construed and enforced accordingly.

       14.    GOVERNING LAW

       This Agreement shall be construed and interpreted in accordance with the
internal laws of the State of Utah or any successor provision thereto.

/s/ Hyrum A. Mead                              /s/ Dennis P. Gauger
---------------------------------------        ---------------------------------
Representing BSD Medical Corporation           Contractor

Date: May 1, 2007                              Date: May 1, 2007
      -----------                                    -----------

                                       4
<PAGE>

                                    EXHIBIT A
                                    ---------

                                     DUTIES
                                     ------

Supervision of Accounting Staff

   o  Directly supervise and train, as required, the accounting staff of the
      Company, currently comprised of one full time controller and clerical
      assistant(s).
   o  Perform monthly reviews of the financial statements and critical
      reconciliations or account analyses of the Company and its joint ventures
      or affiliated entities over with the Company maintains administrative or
      management responsibility.
   o  Be readily available to answer questions and provide day-to-day guidance
      to the accounting staff of the Company.

Assume the Role of Principal Accounting Officer

   o  Serve as the "Principal Accounting Officer" of the Company, as that term
      is defined by the rules and regulations of the Securities and Exchange
      Commission ("SEC").
   o  Report directly to the President and Chief Executive Officer of the
      Company and be readily available to consult with and assist the Chief
      Executive Officer and other management of the Company in the performance
      of their duties.
   o  Sign the officer certifications required of the Principal Accounting
      Officer in the Company's quarterly and annual periodic filings with the
      SEC.
   o  Attend meetings of the Audit Committee and Board of Directors as
      requested, and serve as a resource to the members of the Board of
      Directors and its committees as needed.

Under the Direction of the Audit Committee, Coordinate Relationships with the
Company's Outside Accounting and Tax Advisors

   o  Under the direction of the Audit Committee, coordinate the services
      provided by the external auditors in the quarterly reviews and the annual
      audit of the Company's financial statements, including the financial
      statements of joint ventures or other entities material to the financial
      statements of the Company for which the Company retains administrative or
      management responsibility.
   o  Under the direction of the Audit Committee, coordinate all other services
      provided by the external auditors, including consultation on accounting
      and reporting matters, income tax matters, and other required services.
   o  Assume responsibility for the preparation of federal and state corporate
      income tax returns and related consultation, and recommend to the Audit
      Committee for approval the engagement all outside tax professionals.

Under the Direction of the Audit Committee, Assume the Responsibility to Lead
the Company's Sarbanes - Oxley Section 404 Internal Control Compliance Program

                                       1
<PAGE>

   o  Under the direction of the Audit Committee, develop the plan for the
      Company's compliance with Sarbanes - Oxley Section 404 Internal Control
      Compliance.
   o  Identify the need for, select and recommend for approval to the Audit
      Committee the use of any outside consultants required to develop and
      complete the Company's 404 Internal Control Compliance Plan.
   o  Provide ongoing reports to the Chief Executive Officer and the Audit
      Committee of the Company's progress in completing and implementing its 404
      Internal Control Compliance Plan.
   o  Recommend to the Chief Executive Officer and the Audit Committee changes
      in operating and accounting procedures necessary to strengthen internal
      accounting controls.

Take the Lead in SEC Compliance for the Company's Financial Statements and SEC
Reports

   o  With assistance from the Company's accounting staff, timely complete the
      financial statements, footnotes, and all financial related sections of the
      Company's quarterly and annual reports filed with the SEC.
   o  Coordinate with the Chief Executive Officer, the Audit Committee, outside
      legal counsel, and independent auditors the timely completion of all other
      sections of the Company's quarterly and annual reports filed with the SEC.
   o  Using compliance checklist tools, perform a compliance review of each
      report prior to its filing with the SEC.
   o  In coordination with outside legal counsel, see that the Company is in
      compliance with and files all other necessary forms and reports with the
      SEC (Form 8-K, Forms 3, 4 and 5 and other miscellaneous filings).
   o  Determine the correct accounting policies and procedures and reporting
      practices of the Company, coordinating any required outside consultation
      as approved by the Audit Committee.

                                       2
<PAGE>

                                    EXHIBIT B

                              COMPENSATION SCHEDULE
                              ---------------------

$6,000 per month due as follows:
         -$3,000 paid by the 1st of each month
         -$3,000 paid by the 15th of each month

--------------------------------------------------------------------------------Exhibit
10.1

ASSET
PURCHASE AGREEMENT

by and among

NETBANK
PAYMENT SYSTEMS, INC.,

NETBANK,

NETBANK,
INC.,

PAYMENT
ALLIANCE INTERNATIONAL, INC.

and

PAI
ATM SERVICES, LLC

 

 

 

April
27, 2007

TABLE OF
CONTENTS

	
  

  	
   

  	
   

  	
   

  	
  Page

  
	
  ARTICLE I

  	
   

  	
  PURCHASE, SALE, PURCHASE PRICE AND OTHER RELATED
  MATTERS

  	
   

  	
  1

  
	
  1.1

  	
   

  	
  Purchase and Sale

  	
   

  	
  1

  
	
  1.2

  	
   

  	
  Acquired Assets

  	
   

  	
  1

  
	
  1.3

  	
   

  	
  Excluded Assets

  	
   

  	
  3

  
	
  1.4

  	
   

  	
  Assumption of Liabilities

  	
   

  	
  3

  
	
  1.5

  	
   

  	
  Excluded Liabilities

  	
   

  	
  4

  
	
  1.6

  	
   

  	
  Purchase Price

  	
   

  	
  5

  
	
  1.7

  	
   

  	
  Payment of Purchase Price

  	
   

  	
  6

  
	
  1.8

  	
   

  	
  Post Closing Adjustment

  	
   

  	
  6

  
	
  1.9

  	
   

  	
  Purchase Price Allocation

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
   

  	
  CLOSING

  	
   

  	
  6

  
	
  2.1

  	
   

  	
  Closing Date

  	
   

  	
  6

  
	
  2.2

  	
   

  	
  Deliveries by the Seller

  	
   

  	
  7

  
	
  2.3

  	
   

  	
  Deliveries by the Purchaser

  	
   

  	
  7

  
	
  2.4

  	
   

  	
  Third Party Consents

  	
   

  	
  8

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
   

  	
  REPRESENTATIONS AND WARRANTIES OF THE SELLER

  	
   

  	
  8

  
	
  3.1

  	
   

  	
  Organization, Good Standing and Power

  	
   

  	
  8

  
	
  3.2

  	
   

  	
  Authorization of Transactions

  	
   

  	
  9

  
	
  3.3

  	
   

  	
  Noncontravention

  	
   

  	
  9

  
	
  3.4

  	
   

  	
  Financial Statements

  	
   

  	
  9

  
	
  3.5

  	
   

  	
  Events Subsequent to the Financial Statement Date

  	
   

  	
  10

  
	
  3.6

  	
   

  	
  Title to Assets

  	
   

  	
  11

  
	
  3.7

  	
   

  	
  Sufficiency/Condition of Assets

  	
   

  	
  11

  
	
  3.8

  	
   

  	
  Compliance with Laws

  	
   

  	
  12

  
	
  3.9

  	
   

  	
  Contracts

  	
   

  	
  12

  
	
  3.10

  	
   

  	
  Intellectual Property

  	
   

  	
  14

  
	
  3.11

  	
   

  	
  Real Property

  	
   

  	
  15

  
	
  3.12

  	
   

  	
  Litigation

  	
   

  	
  16

  
	
  3.13

  	
   

  	
  Employees

  	
   

  	
  16

  
	
  3.14

  	
   

  	
  Environmental, Health and Safety Matters

  	
   

  	
  16

  
	
  3.15

  	
   

  	
  Brokers’ Fees

  	
   

  	
  17

  
	
  3.16

  	
   

  	
  Licenses

  	
   

  	
  17

  
	
  3.17

  	
   

  	
  ATMs and Other Tangible Property

  	
   

  	
  18

  
	
  3.18

  	
   

  	
  Intentionally Left Blank

  	
   

  	
  18

  
	
  3.19

  	
   

  	
  Intentionally Left Blank

  	
   

  	
  18

  
	
  3.20

  	
   

  	
  Affiliated Transactions

  	
   

  	
  18

  
	
  3.21

  	
   

  	
  Customers and Suppliers

  	
   

  	
  18

  
	
  3.22

  	
   

  	
  Legal Compliance

  	
   

  	
  19

  
	
  3.23

  	
   

  	
  No acceleration of Rights or Benefits

  	
   

  	
  19

  
	
  3.24

  	
   

  	
  Names and Location

  	
   

  	
  19

  

 

 i
 

 

	
  ARTICLE IV

  	
   

  	
  REPRESENTATIONS
  AND WARRANTIES OF THE PURCHASER

  	
   

  	
  20

  
	
  4.1

  	
   

  	
  Organization, Good Standing and Power

  	
   

  	
  20

  
	
  4.2

  	
   

  	
  Authorization of Transaction

  	
   

  	
  20

  
	
  4.3

  	
   

  	
  Noncontravention

  	
   

  	
  20

  
	
  4.4

  	
   

  	
  Litigation

  	
   

  	
  20

  
	
  4.5

  	
   

  	
  Brokers’ Fees

  	
   

  	
  20

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
   

  	
  COVENANTS

  	
   

  	
  20

  
	
  5.1

  	
   

  	
  Notice of Developments

  	
   

  	
  20

  
	
  5.2

  	
   

  	
  Risk of Loss

  	
   

  	
  21

  
	
  5.3

  	
   

  	
  Access to Information

  	
   

  	
  21

  
	
  5.4

  	
   

  	
  Affirmative Covenants of the Seller

  	
   

  	
  21

  
	
  5.5

  	
   

  	
  Negative Covenants of the Seller

  	
   

  	
  22

  
	
  5.6

  	
   

  	
  Satisfaction of Conditions Precedent

  	
   

  	
  24

  
	
  5.7

  	
   

  	
  Exclusivity

  	
   

  	
  24

  
	
  5.8

  	
   

  	
  Sponsorship Agreement

  	
   

  	
  24

  
	
  5.9

  	
   

  	
  Press Releases

  	
   

  	
  24

  
	
  5.10

  	
   

  	
  Tax Matters

  	
   

  	
  25

  
	
  5.11

  	
   

  	
  Confidentiality, Non-Compete; Non-Solicitation;
  Non-Disparagement

  	
   

  	
  25

  
	
  5.12

  	
   

  	
  Confidentiality of Terms of Transaction, Etc.

  	
   

  	
  27

  
	
  5.13

  	
   

  	
  Further Assurances

  	
   

  	
  27

  
	
  5.14

  	
   

  	
  Post-Closing Collections

  	
   

  	
  27

  
	
  5.15

  	
   

  	
  Use of Names

  	
   

  	
  27

  
	
  5.16

  	
   

  	
  Enforcement of Confidentiality and Proprietary
  Rights Agreements

  	
   

  	
  28

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI

  	
   

  	
  CONDITIONS TO THE PURCHASER’S OBLIGATIONS

  	
   

  	
  28

  
	
  6.1

  	
   

  	
  Accuracy of Representations and Warranties

  	
   

  	
  28

  
	
  6.2

  	
   

  	
  Covenants

  	
   

  	
  28

  
	
  6.3

  	
   

  	
  No Litigation

  	
   

  	
  28

  
	
  6.4

  	
   

  	
  Consents; Approvals

  	
   

  	
  28

  
	
  6.5

  	
   

  	
  Material Adverse Change

  	
   

  	
  28

  
	
  6.6

  	
   

  	
  Delivery of Documents

  	
   

  	
  29

  
	
  6.7

  	
   

  	
  Compliance with Law

  	
   

  	
  29

  
	
  6.8

  	
   

  	
  Amendments and Waivers

  	
   

  	
  29

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII

  	
   

  	
  CONDITIONS TO THE SELLER’S OBLIGATIONS

  	
   

  	
  29

  
	
  7.1

  	
   

  	
  Accuracy of Representations and Warranties

  	
   

  	
  29

  
	
  7.2

  	
   

  	
  Covenants

  	
   

  	
  29

  
	
  7.3

  	
   

  	
  No Litigation

  	
   

  	
  29

  
	
  7.4

  	
   

  	
  Consents; Approvals

  	
   

  	
  29

  
	
  7.5

  	
   

  	
  Delivery of Documents

  	
   

  	
  29

  
	
  7.6

  	
   

  	
  Compliance with Law

  	
   

  	
  30

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VIII

  	
   

  	
  TERMINATION OF AGREEMENT

  	
   

  	
  30

  
	
  8.1

  	
   

  	
  Termination

  	
   

  	
  30

  

 

 ii
 

 

	
  8.2

  	
   

  	
  Effect of Termination

  	
   

  	
  30

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IX

  	
   

  	
  INDEMNIFICATION

  	
   

  	
  31

  
	
  9.1

  	
   

  	
  Indemnification by the Seller and the Parent

  	
   

  	
  31

  
	
  9.2

  	
   

  	
  Indemnification by the Purchaser

  	
   

  	
  31

  
	
  9.3

  	
   

  	
  Claim Procedure/Notice of Claim

  	
   

  	
  32

  
	
  9.4

  	
   

  	
  Survival of Representations, Warranties and
  Covenants; Determination of Damages

  	
   

  	
  33

  
	
  9.5

  	
   

  	
  Limitations on Indemnification Obligations

  	
   

  	
  34

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE X

  	
   

  	
  EMPLOYEE ARRANGEMENTS

  	
   

  	
  35

  
	
  10.1

  	
   

  	
  Employees

  	
   

  	
  35

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XI

  	
   

  	
  MISCELLANEOUS

  	
   

  	
  36

  
	
  11.1

  	
   

  	
  Governing Law; Resolution of Disputes

  	
   

  	
  36

  
	
  11.2

  	
   

  	
  Jurisdiction

  	
   

  	
  38

  
	
  11.3

  	
   

  	
  Binding Upon Successors and Assigns

  	
   

  	
  38

  
	
  11.4

  	
   

  	
  Severability

  	
   

  	
  38

  
	
  11.5

  	
   

  	
  Entire Agreement

  	
   

  	
  38

  
	
  11.6

  	
   

  	
  Successors and Assigns

  	
   

  	
  39

  
	
  11.7

  	
   

  	
  Third Party Beneficiaries

  	
   

  	
  39

  
	
  11.8

  	
   

  	
  Counterparts

  	
   

  	
  39

  
	
  11.9

  	
   

  	
  Expenses

  	
   

  	
  39

  
	
  11.10

  	
   

  	
  Amendment

  	
   

  	
  39

  
	
  11.11

  	
   

  	
  Waiver

  	
   

  	
  39

  
	
  11.12

  	
   

  	
  Notices

  	
   

  	
  39

  
	
  11.13

  	
   

  	
  Construction of Agreement

  	
   

  	
  40

  
	
  11.14

  	
   

  	
  No Joint Venture

  	
   

  	
  40

  
	
  11.15

  	
   

  	
  Pronouns

  	
   

  	
  40

  
	
  11.16

  	
   

  	
  Specific Performance

  	
   

  	
  40

  

 

 iii
 

Table of Contents

	
  EXHIBITS:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit A

  	
   

  	
  Certain Definitions

  
	
   

  	
   

  	
   

  
	
  Exhibit 1.7(a)

  	
   

  	
  Form of Escrow Agreement

  
	
   

  	
   

  	
   

  
	
  Exhibit 2.2(a)

  	
   

  	
  Form of Bill of Sale to be executed by Seller

  
	
   

  	
   

  	
   

  
	
  Exhibit 2.2(b)

  	
   

  	
  Form of Assignment and Assumption Agreement of Real
  Property Lease

  
	
   

  	
   

  	
   

  
	
  Exhibit 2.2(c)

  	
   

  	
  Form of Assignment and Assumption Agreement of
  Contracts

  
	
   

  	
   

  	
   

  
	
  Exhibit 2.2(d)

  	
   

  	
  Form of Sponsorship Agreement between NetBank and
  Purchaser

  
	
   

  	
   

  	
   

  
	
  Exhibit 2.2(h)

  	
   

  	
  Form of Legal Opinion

  
	
   

  	
   

  	
   

  
	
  Exhibit 2.3(f)

  	
   

  	
  Form of Assumption Agreement to be executed by
  Purchaser

  
	
   

  	
   

  	
   

  
	
  Exhibit 10.1(d)

  	
   

  	
  Form of Employment Agreement

  
	
   

  	
   

  	
   

  
	
  SCHEDULES:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 1.2(b)

  	
   

  	
  Fixed Assets

  
	
   

  	
   

  	
   

  
	
  Schedule 1.2(c)

  	
   

  	
  Assumed Contracts

  
	
   

  	
   

  	
   

  
	
  Schedule 1.2(d)

  	
   

  	
  Assumed Lease

  
	
   

  	
   

  	
   

  
	
  Schedule 1.2(l)

  	
   

  	
  Additional Assets

  
	
   

  	
   

  	
   

  
	
  Schedule 1.3(i)

  	
   

  	
  Additional Excluded Assets

  
	
   

  	
   

  	
   

  
	
  Schedule 1.4(d)

  	
   

  	
  Additional Liabilities

  
	
   

  	
   

  	
   

  
	
  Schedule 1.5(n)

  	
   

  	
  Excluded Liabilities

  
	
   

  	
   

  	
   

  
	
  Schedule 1.9

  	
   

  	
  Purchase Price Allocation

  
	
   

  	
   

  	
   

  
	
  Schedule 3.3

  	
   

  	
  Noncontravention Representations

  
	
   

  	
   

  	
   

  
	
  Schedule 3.4(a)

  	
   

  	
  Financial Statement Representations

  
	
   

  	
   

  	
   

  
	
  Schedule 3.4(b)

  	
   

  	
  Aged Accounts Receivable

  
	
   

  	
   

  	
   

  
	
  Schedule 3.5

  	
   

  	
  Events Subsequent to Financial Statement Date

  
	
   

  	
   

  	
   

  
	
  Schedule 3.9(a)

  	
   

  	
  Material Contracts

  

 

 iv
 

 

	
  Schedule 3.9(b)

  	
   

  	
  Material Contracts Representations

  
	
   

  	
   

  	
   

  
	
  Schedule 3.10(b)

  	
   

  	
  Intellectual Property

  
	
   

  	
   

  	
   

  
	
  Schedule 3.11(a)

  	
   

  	
  Real Property Options

  
	
   

  	
   

  	
   

  
	
  Schedule 3.11(b)

  	
   

  	
  Real Property Leases

  
	
   

  	
   

  	
   

  
	
  Schedule 3.12

  	
   

  	
  Litigation

  
	
   

  	
   

  	
   

  
	
  Schedule 3.13(a)

  	
   

  	
  Employment Representations

  
	
   

  	
   

  	
   

  
	
  Schedule 3.13(b)

  	
   

  	
  Employee Information

  
	
   

  	
   

  	
   

  
	
  Schedule 3.16(a)

  	
   

  	
  Licenses

  
	
   

  	
   

  	
   

  
	
  Schedule 3.17

  	
   

  	
  Purchased ATMs

  
	
   

  	
   

  	
   

  
	
  Schedule 3.20

  	
   

  	
  Affiliated Transactions

  
	
   

  	
   

  	
   

  
	
  Schedule 3.21(a)

  	
   

  	
  Material Customers

  
	
   

  	
   

  	
   

  
	
  Schedule 3.21(b)

  	
   

  	
  Material Suppliers

  
	
   

  	
   

  	
   

  
	
  Schedule 3.22

  	
   

  	
  Consents

  
	
   

  	
   

  	
   

  
	
  Schedule 3.23

  	
   

  	
  Acceleration of Rights

  
	
   

  	
   

  	
   

  
	
  Schedule 3.24

  	
   

  	
  Names and Locations

  
	
   

  	
   

  	
   

  
	
  Schedule 5.4(d)

  	
   

  	
  Designated Contracts

  
	
   

  	
   

  	
   

  
	
  Schedule 6.4

  	
   

  	
  Consents and Approvals

  
	
   

  	
   

  	
   

  
	
  Schedule 6.5

  	
   

  	
  Operating and Other Data

  
	
   

  	
   

  	
   

  
	
  Schedule 10.1(b)

  	
   

  	
  Potential Employees

  
	
   

  	
   

  	
   

  
	
  Schedule 10.1(h)

  	
   

  	
  Senior Management

  
	
   

  	
   

  	
   

  
	
  Schedule A-5

  	
   

  	
  Liens

  

 

 v

ASSET PURCHASE AGREEMENT

THIS ASSET PURCHASE AGREEMENT (this “Agreement”)
is entered into as of April 27, 2007 (the “Effective Date”), by and among
NetBank Payment Systems, Inc., a Florida corporation (the “Seller”),
NetBank, a federal savings bank (the “Owner”), NetBank, Inc., a Georgia
corporation (“Parent”), Payment Alliance International, Inc., a Delaware
corporation (“PAI”), and PAI ATM Services, LLC, a Delaware limited liability
company (the “Purchaser”). 
Certain other capitalized terms used in this Agreement are defined in Exhibit A.

RECITALS

WHEREAS, the Seller, is primarily engaged in the
business (the “Business”) of selling, installing and servicing automated
teller machines (“ATM”) and providing ATM and bankcard transaction and
payment processing services;

WHEREAS, the Seller is a wholly-owned subsidiary of
the Owner and Owner is a wholly-owned subsidiary of Parent;

WHEREAS, the Purchaser is a wholly-owned subsidiary of
PAI; and

WHEREAS, the Seller desires to sell and the Purchaser
desires to purchase substantially all of the assets of the Seller used in or
related to the Business, subject to Purchaser’s assumption of certain
liabilities, upon the terms and subject to the conditions of this Agreement;

AGREEMENT

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

ARTICLE I

PURCHASE, SALE, PURCHASE PRICE AND OTHER RELATED MATTERS

1.1           Purchase and Sale.  At the Closing on the Closing Date, the
Seller shall sell, assign, convey, transfer and deliver to the Purchaser and
the Purchaser shall purchase and acquire from the Seller all of the Seller’s
right, title and interest in and to the Acquired Assets, free and clear of all
Liens (other than Permitted Encumbrances), upon the terms and subject to the
conditions of this Agreement (including the payment by the Purchaser of the
Purchase Price and the assumption of certain liabilities by the Purchaser).

1.2           Acquired Assets.  The term “Acquired Assets” means all right,
title and interest in and to all of the assets of the Seller (other than the
Excluded Assets), and all of the assets of Owner or Parent used in or related
to the conduct of the Business, including, without limitation, all of the
right, title and interest in and to:

 1
 

(a)           Cash in the amount
of $750,000 (including any cash owned by Seller described in Section 1.2(b));

(b)           all tangible
personal property of the Seller (other than tangible personal property
constituting Excluded Assets), and all tangible personal property of Parent or
Owner used in the Business, including ATMs (including cash funds owned by
Seller, if any, maintained for withdrawal at an ATM not to exceed $750,000
including cash described in Section 1.2(a)), inventory, operating supplies,
furniture and equipment, leasehold improvements, vehicles, supplies, computers,
telephone equipment, telecopiers and photocopiers (including the fixed assets
set forth on Schedule 1.2(b));

(c)           all of the Contracts
identified on Schedule 1.2(c) and all Contracts entered into in the
Ordinary Course from the date hereof and prior to the Closing that are
identified on a schedule to the Assignment and Assumption of Contracts to be
delivered by the parties at Closing pursuant to Section 2.2(c) and 2.3(d)
(collectively, the “Assumed Contracts”); provided, that in the event
Purchaser determines following the Closing that the parties omitted a Material
Contract on Schedule 3.9(a), Purchaser shall determine whether or not
such Material Contract shall be deemed an Assumed Contract for all purposes
under this Agreement;

(d)           the lease (the “Real
Property Lease”) listed on Schedule 1.2(d) with respect to the
leased real property (the “Leased Real Property”), and all improvements,
fixtures, and fittings thereon, to the extent of the Seller’s interest, and
easements, rights-of-way, and other appurtenants with respect thereto (such as
appurtenant rights in and to public streets);

(e)           all Seller
Intellectual Property and all rights to Third Party Intellectual Property, and
all goodwill and related intangible property associated therewith, licenses and
sublicenses granted and obtained with respect thereto, and rights thereunder,
remedies against infringements thereof, and rights to protection of interests
therein under the Laws of all jurisdictions;

(f)            all approvals,
permits, licenses, orders, registrations, certificates and similar rights
obtained from any Governmental Entity and used in the Business, to the extent
permitted by applicable Law;

(g)           all telephone
numbers used in the Business;

(h)           all customer and
supplier lists and names related to the Business (in whatever form or medium);

(i)            copies of all files,
papers, documents and records relating to the Business;

(j)            catalogues and
sales literature and materials, advertising materials, marketing materials and
plans, forms, catalogues and manuals used in the Business;

(k)           all computer
hardware, software and programs, together with all users’ manuals, training
manuals and other system and operations documentation relating to such computer
programs used in the Business;

 2
 

(l)            the other assets of Seller
(the “Additional Assets”) listed on Schedule 1.2(l) which Seller
and Purchaser hereby agree are Acquired Assets;

(m)          all guaranties, warranties,
indemnities and similar rights in favor of the Seller, Parent or Owner with
respect to any Acquired Asset; and

(n)           all other property, assets and
rights owned by Seller, Owner or Parent as of the Closing Date that are used in
the Business and which are not otherwise Excluded Assets.

1.3           Excluded Assets.  The term “Excluded Assets” means:

(a)           the Purchase Price received by
the Seller for the Acquired Assets;

(b)           all rights of the Seller under
this Agreement;

(c)           Contracts that have expired by
their terms without default by either party or that are not Assumed Contracts;

(d)           all refunds of Taxes and
rights to claim such refunds;

(e)           all rights of the Seller with
respect to Excluded Liabilities, including defenses thereto and counterclaims
which may be asserted in response thereto;

(f)            except as contemplated by
Section 5.7, the name “NetBank Payment Systems” or “NetBank” and any derivative
thereof;

(g)           all Cash in excess of $750,000,
and, except to the extent listed on Schedule 1.2(l), all Accounts Receivable,
accrued revenue, deposits, prepaid expenses and other current assets;

(h)           all insurance policies of
Seller and all rights of Seller of any nature and description under or arising
out of such insurance policies; and

(i)            all rights, properties, and
assets set forth on Schedule 1.3(i).

1.4           Assumption of Liabilities.  On the terms and subject to the conditions
set forth herein and except as contemplated by Section 1.5, on the Closing
Date, Purchaser will assume the following Liabilities and obligations of the
Seller (the “Assumed Liabilities”) but no others:

(a)           Seller’s obligation under the
Real Property Lease arising on and after the Closing Date;

(b)           the current liabilities arising
out of the Business on and after the Closing Date;

(c)           the Liabilities of the Seller
with respect to performance obligations that arise out of the Business on or
after the Closing Date under the Assumed Contracts, and which do not arise from
or relate to a breach or default occurring under such Assumed Contracts prior
to the Closing Date; and

 3
 

(d)           the additional liabilities of
the Seller (the “Additional Liabilities”) as described in Schedule
1.4(d) which Seller and Purchaser hereby agree are Assumed Liabilities.

1.5           Excluded Liabilities.  Notwithstanding any disclosure in any other
Schedule or Exhibit hereto, Purchaser shall not assume any Liabilities,
obligations or commitments of the Seller relating to or arising out of the
operation of the Business or the ownership of the Acquired Assets prior to the
Closing Date other than the Assumed Liabilities.  Notwithstanding anything to the contrary in
this Agreement, Purchaser shall not assume or in any way become liable for any
of the debts, Liabilities, or obligations of any nature whatsoever (other than
the Assumed Liabilities) relating to any Seller, the Business or the Acquired
Assets, whether accrued, absolute, contingent or otherwise, whether known or
unknown, whether due or to become due, whether related to the Business or the
Acquired Assets and whether disclosed on the Schedules attached hereto, and
regardless of when or by whom asserted that are described in clauses (a)
through (p) below (collectively referred to herein as the “Excluded
Liabilities”):

(a)           any of the Seller’s
Liabilities or obligations under this Agreement, the Schedules attached hereto
and any other agreements entered into by the Seller in connection with the
transactions contemplated by this Agreement;

(b)           any of the Seller’s Liabilities
or obligations for expenses, fees or Taxes incident to or arising out of the
negotiation, preparation, approval or authorization of this Agreement or the
consummation (or preparation for the consummation) of the transactions
contemplated hereby (including all attorneys’, accountants’ and brokerage
fees);

(c)           any Liability or obligation of
the Seller for Taxes for any period, including any Taxes imposed under Code
Section 1374;

(d)           any Liability or obligation
under or with respect to any Employee Benefit Plan or any other employee
benefit plan, program, policy or arrangement presently or formerly maintained
or contributed to by Sellers or its ERISA Affiliates, or with respect to which
the Seller or any such ERISA Affiliate has any liability;

(e)           any Liability or obligation
with respect to any products delivered or developed or services performed prior
to the Closing in respect of product liability, infringement, misappropriation,
violation of any Law of any Governmental Entity or any related claims or litigation;

(f)            any of the Seller’s
Liabilities or obligations for vacation pay, sick pay, holiday pay, salary,
bonuses or other payments or Liabilities arising at or before the Closing of
any kind to any Hired Employees or current or former employee of the Seller;

(g)           any Liability or obligation
relating to workers’ compensation claims which were filed or presented at or
before the Closing or which are filed or presented after the Closing but relate
to claims and/or injuries first arising at or before the Closing;

(h)           any of the Seller’s
Liabilities or obligations (A) arising by reason of any violation or alleged
violation of any Law of any Governmental Entity or any requirement of any 

 4
 

Governmental Entity, or (B) arising by reason of any breach or alleged
breach by the Seller of any agreement, contract, lease, license, commitment,
instrument, judgment, order or decree;

(i)            any Liabilities or
obligations arising under any Environmental Law where the underlying facts,
events or conditions existed or occurred at or prior to the Closing,
irrespective of whether such Liability or obligation attaches to the Purchaser
or Seller in the first instance;

(j)            any of Seller’s Liabilities
or obligations relating to any legal action, proceeding or claim (other than
those listed on Schedule 3.12) arising out of or in connection with Sellers’
conduct of the Business at or before the Closing or any other conduct of the
Seller, the Seller’s officers, directors, employees, consultants, agents or
advisors at or prior to the Closing;

(k)           any Liabilities or obligations
in respect of any of the Excluded Assets (including under any contracts,
leases, commitments or understandings related thereto);

(l)            any of Sellers’ Liabilities
or obligations which Purchaser may become liable for solely as a result of or
in connection with the failure by Purchaser or Seller to comply with any bulk
sales or bulk transfers laws or solely as a result of any “defacto merger” or “successor-in-interest”
theories of liability;

(m)          any Liabilities or obligations
arising out of or related to any Contract other than Assumed Contracts;

(n)           any Liabilities or obligations
specifically set forth in Schedule 1.5(n) attached hereto (the “Excluded
Liabilities Schedule”); and

(o)           any other Liabilities or
obligations of Sellers other than Assumed Liabilities.

For purposes of
this Section 1.5, “Seller” shall be deemed to include all Affiliates of the
Seller and any predecessors to Sellers and any Person with respect to which the
Seller is a successor-in-interest (including by operation of law, merger,
liquidation, consolidation, assignment, assumption or otherwise). The Seller
hereby acknowledges that it is retaining the Excluded Liabilities, and the
Seller shall pay, discharge and perform all such Excluded Liabilities promptly
when due subject to Seller’s right to contest same.

1.6           Purchase Price.  The purchase price (the “Purchase Price”)
for the Acquired Assets shall be an amount equal to Eighteen Million Dollars
($18,000,000) plus the estimated book value of the Additional Assets as set
forth on Schedule 1.2(l) less the estimated amount of Additional Liabilities
listed on Schedule 1.4(d).  A list and
the book value of the Additional Assets and Additional Liabilities as of March
31, 2007 is attached as Schedule 1.2(l) and 1.4(d). Seller shall prepare and
deliver to the Purchaser at least three (3) days prior to Closing an update of
such schedules computed in the same manner as Schedule 1.2(l) and 1.4(d).  Seller shall provide Purchaser with
appropriate detail supporting its determination.  Such determination shall be subject to
adjustment following Closing pursuant to Section 1.8.

 5
 

1.7           Payment of Purchase Price.

(a)           On
or before the close of business on the date hereof, the Purchaser shall deliver
to the Escrow Agent $500,000 (the “Deposit”) of the Purchase Price, to
be held and disbursed by the Escrow Agent pursuant to the terms and conditions
of an escrow agreement substantially in the form attached hereto as Exhibit
1.7(a) (the “Escrow Agreement”).

(b)           At
the Closing, the Purchaser shall deliver to the Seller by wire transfer in
accordance with Seller’s instructions an amount (the “Closing Payment”)
equal to the Purchase Price, minus the Deposit, and shall authorize the
Escrow Agent to deliver the Deposit to the Seller.

1.8           Post Closing Adjustment.  Within sixty (60) days following the Closing,
the Seller and the Purchaser shall determine the book value of the Additional
Assets and the Additional Liabilities as of the Closing Date.  The calculation of the book value of the Additional
Assets and Additional Liabilities shall be made in the same manner as the book
value is calculated on Schedule 1.2(l) and 1.4(d).  If such amounts differ from the estimated
amounts under Section 1.6, then the Purchase Price shall be redetermined and
the appropriate party shall pay the other party the amount overpaid or
underpaid at Closing (the “Post Closing Adjustment”).  If the Seller and the Purchaser are unable to
agree upon the amounts to be finally determined under this Section 1.8, either Seller
or Purchaser may submit the dispute to arbitration as provided in Section 11.1.

1.9           Purchase Price Allocation.  The parties agree that the Purchase Price
shall be allocated among the Acquired Assets (the “Allocation”) as set
forth on Schedule 1.9.  The
Allocation shall be adjusted in accordance with applicable Law to reflect any
adjustments to the Purchase Price arising out of the Post Closing
Adjustment.  The parties shall report the
sale and purchase of the Acquired Assets on all tax returns and tax forms
(including Form 8594 of the Internal Revenue Service) in a manner consistent
with such Allocation and shall not, in connection with the filing of such
returns or forms or in any examination, claim for refund, or any contest
(administrative or judicial) of any adjustment to any return, make any
Allocation of the Purchase Price or take any position which is inconsistent
with the Allocation.  The parties agree
to consult with one another, to the extent legally permissible, with respect to
any examination, claim for refund or any contest (administrative or judicial)
of any adjustment to any return relating to the Allocation.

ARTICLE II

CLOSING

2.1           Closing Date.

(a)           The
closing of the transactions contemplated by this Agreement (the “Closing”)
shall take place at the offices of Holland & Knight LLP, 50 North Laura
Street, Suite 3900, Jacksonville, Florida 32202 at 10:00 a.m., local time, on
(i) April 30, 2007, if all conditions (other than delivery of documents as
required by Section 2.2 and 2.3) have been satisfied or (ii) if all such
conditions have not been satisfied on April 30, 2007, then two business days
after such conditions have been satisfied or (iii) at such other date and time
as shall be agreed in writing by the parties to this Agreement (the “Closing
Date”).

 6
 

(b)           The Closing
shall be effective as of 11:59 p.m., Eastern Daylight Time, on the Closing
Date.  All of the Seller’s right, title
and interest in and to the Acquired Assets shall transfer to the Purchaser, and
Purchaser shall assume the Assumed Liabilities, on the Closing Date.

2.2           Deliveries by the Seller.  At or before the Closing, the Seller shall
execute, if applicable, and deliver, or cause to be delivered, to the Purchaser
the following items:

(a)           a Bill of
Sale in the form of Exhibit 2.2(a), duly executed by the Seller dated
and effective as of the Closing Date;

(b)           an Assignment
and Assumption Agreement of each of the Real Property Lease in the form of Exhibit
2.2(b);

(c)           an Assignment
and Assumption of Contracts in the form of Exhibit 2.2(c);

(d)           a Sponsorship
Agreement in the form of Exhibit 2.2(d), duly executed by NetBank dated
and effective as of the Closing Date;

(e)           a certificate of the Secretary
of the Seller dated as of the Closing Date and attaching copies of the Articles
of Incorporation and Bylaws of the Seller, evidence of good standing of the
Seller in the State of Florida and authorizing resolutions of the Seller
certifying as to the incumbency of the officers of the Seller executing the
documents delivered in connection with the transactions contemplated by this
Agreement;

(f)            a certificate signed by the
executive officers of the Seller in their capacity as such to the effect that
the conditions precedent set forth in Article VI have been satisfied;

(g)           all documents, certificates
and agreements necessary to transfer to the Purchaser good and marketable title
to the Acquired Assets; and

(h)           favorable opinions, dated the
Closing Date, from Holland & Knight LLP, counsel for the Seller, and
Charles E. Mapson, Chief Legal Executive of the Parent, in substantially the
form of Exhibit 2.2(h).

2.3           Deliveries by the Purchaser.  At or before the Closing, the Purchaser shall
execute, if applicable, and deliver, or cause to be delivered, to the Seller
the following items:

(a)           the Closing Payment by wire
transfer to Seller’s counsel prior to Closing for disbursement by such counsel
at Closing;

(b)           instructions to Escrow Agent
to deliver the Deposit to Seller;

(c)           an Assignment and Assumption
Agreement of each of the Real Property Lease in the form of Exhibit 2.2(b);

(d)           an Assignment and Assumption
of Contracts in the form of Exhibit 2.2(c);

 7
 

(e)           a Sponsorship Agreement in the
form of Exhibit 2.2(d), duly executed by the Purchaser dated and
effective as of the Closing Date;

(f)            an Assumption Agreement in
the form of Exhibit 2.3(f) assuming the Assumed Liabilities, duly
executed by the Purchaser dated and effective as of the Closing Date;

(g)           a certificate of the Secretary
of the Purchaser dated as of the Closing Date and attaching copies of the
Certificate of Incorporation and Bylaws of the Purchaser, evidence of good
standing of Purchaser in the State of Delaware and authorizing resolutions of
the Purchaser and certifying as to the incumbency of the officers of the
Purchaser executing the documents delivered in connection with the transactions
contemplated by this Agreement; and

(h)           a certificate signed by the
executive officers of the Purchaser in their capacity as such to the effect
that the conditions precedent set forth in Article VII have been satisfied.

2.4           Third Party Consents.  Seller and Purchaser shall cooperate to
obtain the consent of any Governmental Entity required to consummate the
Closing.  Subject to Section 6.4, to the
extent that the Seller’s rights under any Contract, permit or other asset to be
assigned to the Purchaser under this Agreement may not be assigned without the
consent of another Person which has not been obtained at or prior to Closing,
this Agreement shall not constitute an agreement to assign the same if an
attempted assignment would constitute a breach thereof or be unlawful, and the
assignor and assignee shall use commercially reasonable efforts to obtain any
such required consent(s) as promptly as possible; provided, however, that no
party shall be obligated to commence any litigation or offer or grant any
accommodation (financial or otherwise) to any Person or incur any other
Liability therefor.  If any such consent
shall not be obtained or if any attempted assignment would be ineffective or
would impair the assignee’s rights under the asset in question so that the
assignee would not in effect acquire the benefit of all such rights, the
assignor, to the maximum extent permitted by law, shall act after the Closing
as the assignee’s agent in order to obtain for it the benefits thereunder and
each party shall cooperate, to the maximum extent permitted by Law, with the
other in any other reasonable arrangement designed to provide such benefits to
the assignee.

ARTICLE
III

REPRESENTATIONS AND WARRANTIES OF THE SELLER

The Seller represents and warrants to the Purchaser
that the statements contained in this Article III are correct and complete as
of the date of this Agreement:

3.1           Organization, Good Standing and
Power.  The Seller is a corporation,
validly existing and in good standing under the laws of the State of
Florida.  The Owner is a federal savings
bank and owns all of the outstanding capital stock of the Seller.  Parent is a corporation, validly existing and
in good standing under the laws of the State of Georgia.  The Seller has all requisite power and
authority to carry on the Business and to own and use the assets and properties
owned and used by it.  The Seller has
furnished to the Purchaser true and complete copies of its Articles of
Incorporation and Bylaws, each as amended and as in effect on the date of this
Agreement.

 8
 

3.2           Authorization of Transactions.  Each of the Seller, the Parent and the Owner
has all requisite power and authority to execute and deliver this Agreement and
to perform its respective obligations hereunder.  Subject to receipt of approval by any
Governmental Entity, the execution and delivery of this Agreement by the
Seller, the Parent and the Owner and the consummation by the Seller, the Parent
and the Owner of the transactions contemplated hereby have been duly and
validly authorized by all necessary action on the part of the Seller, the
Parent and the Owner.  This Agreement has
been duly and validly executed and delivered by the Seller, the Parent and the
Owner and, assuming the due authorization, execution and delivery by the
Purchaser, constitutes a valid and binding obligation of each the Seller, the
Parent and the Owner enforceable against the Seller, the Parent and the Owner
in accordance with its terms, except as the enforceability thereof may be
limited by bankruptcy, insolvency, reorganization or other Laws or equitable
principles relating to or affecting the enforcement of creditors’ rights.  

3.3           Noncontravention.  Subject to the receipt of the consents and
approvals set forth in Section 6.4 and except as set forth on Schedule 3.3,
the execution and delivery of this Agreement by the Seller and the consummation
by the Seller of the transactions contemplated hereby, does not and will not,
as the case may be, (a) conflict with or violate any provision of the
Articles of Incorporation, Bylaws or any Contract, (b) require on the part
of the Seller any filing with, or any permit, authorization, consent or
approval of, any Governmental Entity, (c)  result in the imposition
of any Lien upon any of the Acquired Assets or (d) violate any Law
applicable to the Seller or any of the Acquired Assets.

3.4           Financial
Statements.

(a)           The Seller has delivered to
the Purchaser a true and complete copy of the following financial statements
(collectively, the “Seller Financial Statements”):  unaudited balance sheets and statements of
income of the Seller, as of and for the two month period ending February 28,
2007 (the “Interim Financial Statements”) and as of and for the years
ending December 31, 2004, 2005 and 2006. 
Except as set forth on Schedule 3.4(a), the Seller Financial
Statements (i) have been prepared in accordance with GAAP in all material
respects applied on a consistent basis throughout the periods covered thereby,
(ii) fairly present the financial condition of the Seller as of such dates
and the results of operations of the Seller for such periods, and
(iii) are consistent in all material respects with the books and records
of the Seller, except that the Seller Financial Statements do not contain
footnotes and presentation items as required by GAAP and the Interim Financial
Statements are subject to normal year-end accruals and adjustments.

(b)           Subject to any of the reserves
set forth therein, the Accounts Receivable included in the Acquired Assets
shown on the Seller Financial Statements are valid and genuine, have arisen
solely out of bona fide transactions in the Ordinary Course and are not subject
to any prior assignment or Liens.  The
Accounts Receivable included in the Acquired Assets are collectible at their
recorded amounts, subject only to the reserve for doubtful accounts shown on
the Seller Financial Statements within commercially reasonable periods of time
consistent with past experience.  Schedule
3.4(b) sets forth an aged list of the unpaid accounts receivable owing to
the Seller as of March 31, 2007, with the last known address of the trade
debtors of the Seller.  At the Closing
and during the Post-Closing Adjustment, the Seller shall provide the Purchaser
with an updated schedule of all Accounts Receivable included in the Acquired
Assets.

 9

3.5           Events Subsequent
to the Financial Statement Date. 
Except as set forth in Schedule 3.5, since the Financial
Statement Date, the Seller has conducted the Business only in the Ordinary
Course and, since such date;

(a)           there has not been any
Material Adverse Change not disclosed in writing to the Purchaser nor has there
occurred any undisclosed event or development which, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Change
and

(b)           the Seller has not taken, or
agreed to take, any of the actions set forth in Section 5.5;

(c)           subjected any of the Acquired
Assets to any Lien;

(d)           issued, sold or transferred
any notes, bonds or other debt securities or any equity securities, securities
convertible, exchangeable or exercisable into equity securities, or warrants,
options or other rights to acquire equity securities, of the Seller;

(e)           borrowed any amount or
incurred or become subject to any indebtedness or other Liabilities, except
trade payables and accrued liabilities incurred in the Ordinary Course;

(f)            sold, leased, licensed (as
licensor), assigned, disposed of or transferred (including transfers to any
Affiliates of the Seller) any of the Acquired Assets (whether tangible or
intangible), except for sales of inventory in the ordinary course of business
and sales of other assets not in excess of $25,000 in the aggregate and other
than licenses granted to customers in the Ordinary Course;

(g)           disclosed any proprietary or
confidential information to any Person that is not subject to a confidentiality
agreement that limits use or disclosure of such information solely for the
recipient’s own use for the purposes of the agreement;

(h)           suffered any extraordinary
losses or waived any rights of material value, whether or not in the Ordinary
Course;

(i)            suffered any theft, damage,
destruction or casualty loss in excess of $50,000, to the Acquired Assets,
whether or not covered by insurance;

(j)            entered into, amended,
accelerated or terminated any Material Contract or taken any other action or
entered into any other transaction involving more than $50,000 or otherwise
outside the Ordinary Course, or entered into any transaction with any Insider;

(k)           made or granted any bonus or
increase in the compensation or benefits of any employee of the Seller or (ii)
entered into, amended, modified or terminated any Employee Benefit Plan;

(l)            conducted the Business’
billing and collection of receivables and inventory purchases other than in the
Ordinary Course or changed its pricing structure;

 10
 

(m)          made any capital expenditures
or commitments therefor (other than in the Ordinary Course and in amounts
sufficient to support ongoing business operations);

(n)           delayed or postponed the
repair and maintenance of its properties or the payment of accounts payable,
accrued liabilities and other obligations and Liabilities;

(o)           made loans or advances to,
guarantees for the benefit of, or any investments in, any Persons except
payments of, and advances under, intercompany loans;

(p)           instituted or settled any
claim or lawsuit involving equitable or injunctive relief or the payment by or
on behalf of the Seller of more than $25,000 in the aggregate;

(q)           granted any performance
guarantees to the Business’ customers;

(r)            instituted or permitted any
material change in the conduct of the Business, or any material change in its
method of purchase, sale, lease, management, marketing, promotion or operation
of the Acquired Assets;

(s)           declared, set aside or paid
any dividend or made any similar distribution, redeemed, purchased or otherwise
acquired, directly or indirectly, any shares of its capital stock (or other
equity securities), or made any loan or entered into any transaction with or
distributed any of the Acquired Assets to any of its officers, directors, shareholders,
Affiliates or other Insiders, except for compensation paid in cash to Insiders
in the Ordinary Course and except payments of, and advances under, intercompany
loans;

(t)            acquired any other business
or entity (or any significant portion or division thereof), whether by merger,
consolidation or reorganization or by the purchase of its assets or stock; or

(u)           committed to do any of the
foregoing.

3.6           Title to Assets.  The Seller has good and marketable title to,
or a valid leasehold interest in, all of the Acquired Assets, tangible or
intangible, free and clear of all Liens, other than the Permitted
Encumbrances.  Subject to receipt of the
third-party consents described in Section 6.4, the Seller has the right to
convey and transfer the Acquired Assets to the Purchaser.  At the Closing, the Seller will have conveyed
good title and interest in and to the Acquired Assets, free and clear of all
Liens, other than Permitted Encumbrances.

3.7           Sufficiency/Condition of Assets.  Except for the Excluded Assets, the Acquired
Assets comprise all of the assets, properties and rights used in or related to
the Business and necessary to permit Purchaser to carry on the Business
following the Closing in substantially the same manner as conducted as of the
date hereof.  Each tangible Acquired
Asset has been maintained in accordance with normal industry practice, is in
good operating condition and repair (subject to normal wear and tear) and is
suitable for the purposes for which it presently is used.  Schedule 1.2(b) sets forth a true and
complete copy of the fixed asset ledger of the Seller as of February 28, 2007.

 11
 

3.8           Compliance with Laws.  The Seller and the conduct of the Business
are and have been in compliance in all material respects with each applicable
Law of any Governmental Entity.  No Legal
Proceeding has been filed or commenced against the Seller alleging any failure
to so comply and Seller has received no written notice that it is in violation
of any Law.

3.9           Contracts.

(a)           Except as set forth on the Schedule
3.9(a), the Seller is not a party to or bound by any of the following (“Material
Contracts”), whether written or oral, that are primarily used in or primarily
related to the operation of the Business:

(i) collective
bargaining agreement or other Contract with any labor union;

(ii) management
agreement or other Contract for the employment of any employee or other Person
on a full time, part-time or consulting basis or providing for the payment of
any cash or other compensation or benefits upon the sale of the Acquired Assets
(other than at-will employment agreements with the Seller’s employees which do
not commit the Seller to severance, termination or other similar payments);

(iii) Contract
relating to indebtedness (including any letter of credit arrangements, bonds
and guarantees of any obligations) or to the mortgaging, pledging or otherwise
placing a Lien on any of the Acquired Assets;

(iv) Contract,
including, but not limited to, purchase orders, for the purchase, sale,
distribution or marketing of materials, supplies, products or other personal
property or for the furnishing or receipt of services which either calls for
performance over a period of more than one year or involves consideration in
excess of $25,000 per year or $25,000 in the aggregate;

(v) Contract which
prohibits it from freely engaging in the Business anywhere in the world without
any limitation or adverse consequences or from commercially exploiting any of
the Acquired Assets;

(vi) Contract
under which it has advanced or loaned any other Person any amounts;

(vii) other than
the Real Property Lease and the Lake Forest Lease, Contract under which it is
lessee of or holds or operates any property, real or personal, owned by any
other party which involves annual rental payments of greater than $25,000 or
group of such Contracts with the same Person which involve consideration in
excess of $25,000 in the aggregate;

(viii) other than
the Real Property Lease and the Lake Forest Lease, Contract under which it is
lessor of or permits any third party to hold or operate any property, real or
personal, owned or controlled by it which involves consideration in excess of
$25,000;

(ix) Intellectual
Property Contracts;

 12
 

(x) warranty
Contract with respect to its services rendered or its products sold or
delivered, where the Seller remains currently obligated to perform under such
warranty;

(xi) any Contract
by and between, or among, the Seller and any of its Affiliates, including the
Owner, or any Insider;

(xii) any profit
sharing, stock option, stock purchase, stock appreciation, deferred
compensation, severance, or other plan or arrangement for the benefit of any of
the Hired Employees;

(xiii) Contract
that provides any customer with pricing, discounts or benefits that change
based on the pricing, discounts or benefits offered to other customers of the
Business, including, without limitation, Contracts containing “most favored
nation” provisions;

(xiv) Contract
which contains performance guarantees;

(xv) Contract
involving the settlement of any Legal Proceeding or threatened Legal Proceeding
with respect to which, as of the date of this Agreement, (A) any unpaid amount
exceeds $25,000 or (B) conditions precedent to the settlement have not been
satisfied;

(xvi) Contract
appointing any agent to act on its or the Business’ behalf;

(xvii) power of
attorney;

(xviii) Contract
relating to the acquisition or sale of the Business and/or the Acquired Assets
(or any material portion thereof), whether or not consummated and including any
confidentiality agreements entered into with respect thereto;

(xix) other
Contract (or group of related Contracts) the performance of which involves
consideration in excess of $25,000 per year or $25,000 in the aggregate or
which cannot be canceled by such Seller within 30 days notice without premium
or penalty; or

(xx) any other
Contract that is material to the Business or primarily related to the Acquired
Assets, whether or not entered into in the Ordinary Course.

(b)           The Seller has performed in
all material respects all of the obligations required to be performed by it as
of the date of this Agreement and is not in default with respect to any
Material Contract.  Except as described
in Schedule 3.9(b), each of the Material Contracts is legal, valid, binding,
enforceable and in full force and effect with respect to the Seller, as
applicable, and, to the Seller’s Knowledge, with respect to the other parties
thereto.  Except as described in Schedule
3.9(b), the Seller is not, nor to the Seller’s Knowledge, is any other
Person, in material breach or default and there is no occurrence, condition or
act, with respect to the Seller, or to the Seller’s Knowledge, with respect to
any other party, which, with the giving of notice, the lapse of time or the
happening of any other event or conditions, would constitute a material breach
or a default or event of default under any Material Contract. The Seller has
made available to the Purchaser a true, correct and complete copy of each
Material Contract.

 13
 

The Seller is not renegotiating any of the Material Contracts in a
manner which would result in a Material Adverse Change.

(c)           No active merchant ATM and point of
sale processing contract (each, a “Merchant Contract”) contains any
restriction prohibiting or limiting the ability of the Seller (or the Purchaser
following the Closing) to (i) engage in any line of business, (ii) compete
with, obtain products or services from, or provide services or products to, any
Person, (iii) carry on or expand the nature or geographical scope of the
Business anywhere in the world, or (iv) enter into any Contract with any other
Person.

(d)           With the exception of Contracts
between Seller and any of the Material Suppliers listed on Schedule 3.21(b), no
supplier contract listed in Schedule 1.2(c) contains any restriction materially
prohibiting or limiting the ability of the Seller to (i) engage in the
Business, (ii) compete with any Person, obtain products or services related to
the Business from any Person, or provide services or products related to the
Business to any Person, (iii) carry on or expand the nature or geographical
scope of the Business anywhere in the United States, or (iv) enter into any
Contract material to the Business with any other Person.

3.10         Intellectual
Property.

(a)           The Seller owns, free and
clear of all Liens, legally enforceable rights to use all Intellectual Property
that is owned by it.  To the Seller’s
Knowledge, the Seller is licensed or otherwise possesses, free and clear of all
Liens, legally enforceable rights to use all other Intellectual Property that
is used by it in the conduct of the Business (“Third Party Intellectual
Property”).  Subject to the receipt
of the consents described on Schedule 6.4, each item of
Intellectual Property owned or used by the Seller will be owned or available
for use by Purchaser on identical terms and conditions immediately following
the Closing.

(b)           Schedule 3.10(b) sets
forth: (i) all Intellectual Property owned by the Seller (“Seller
Intellectual Property”); (ii) all licenses and other agreements as to which
Seller is a party and pursuant to which any Person is authorized to use any
Seller Intellectual Property; and (iii) all licenses and other agreements as to
which Seller is a party and pursuant to which Seller is authorized to use any
Third Party Intellectual Property of any third party.

(c)           To the Seller’s Knowledge,
there is no unauthorized use, disclosure, infringement or misappropriation of
any Seller Intellectual Property by any third party.

(d)           The Seller is not, nor will be
as a result of the execution and delivery of this Agreement or, subject to the
receipt of the consents described on Schedule 6.4, the performance
of its respective obligations under this Agreement, in breach of any license,
sublicense or other agreement relating to the Seller Intellectual Property or
the Third Party Intellectual Property.

(e)           The Seller: (i) has not been
sued in any suit, action or proceeding (or received any written notice or, to
the Seller’s Knowledge, threat) which involves a claim of infringement of any
Intellectual Property or other proprietary right of any third party; or (ii)
has brought any Legal Proceeding for infringement of Seller Intellectual
Property or breach of any license, sublicense or agreement involving Seller
Intellectual Property against any third party. 

 14
 

To the Seller’s Knowledge, the conduct of the Business by or on behalf
of the Seller does not infringe any Intellectual Property or other proprietary
right of any third party.

3.11         Real Property.

(a)           The Seller does not own any
real property.  Except as set forth on Schedule 3.11(a),
the Seller does not have an outstanding option or right of first refusal to
purchase any real property or any portion thereof or interest therein.

(b)           Other than the Seller’s lease
and sublease of certain real property in Lake Forest, California (the “Lake
Forest Lease”), Schedule 3.11(b) sets forth a list of all leases of
real property leased or subleased to the Seller.  Except for the Lake Forest Lease and as set
forth on Schedule 3.11(b), the Seller does not lease or sublease any
real property.  The Seller has made
available to the Purchaser correct and complete copies of the Real Property
Lease.  With respect to the Real Property
Lease:

(i)            no party to the lease has repudiated
any provision thereof;

(ii)           there are no material disputes, oral
agreements, or forbearance programs in effect as to the lease;

(iii)          the Seller has not subleased,
licensed, assigned, transferred, conveyed, mortgaged, deeded in trust, or
encumbered any interest in the leasehold;

(iv)          the Seller is current on the monthly
rent and all other charges due under such leases;

(v)           to the Seller’s Knowledge, all
facilities leased have received all required approvals of Governmental Entities
(including licenses and permits) required in connection with the operation
thereof as currently operated by the Seller, and to the Seller’s Knowledge have
been operated and maintained in accordance with applicable Laws; and

(vi)          all facilities leased are supplied
with utilities and other services necessary for the operation of said
facilities as currently operated by the Seller.

(c)           with respect to the Leased
Real Property: (i) to Seller’s knowledge, the current use of such property and
the operation of the Business and the Acquired Assets does not violate any
instrument of record or Contract affecting such property or any applicable Law
in any material respect (without any fines or monetary Liabilities attached);
(ii) all buildings, structures and other improvements located on such property,
including all material components thereof, are, to the Seller’s knowledge,
structurally sound, in good operating condition and repair, subject only to the
provision of usual and customary maintenance provided in the Ordinary Course
with respect to buildings, structures and improvements of like age and
construction and all water, gas, electrical, steam, compressed air,
telecommunication, sanitary and storm sewage lines and other utilities and
systems serving such property are sufficient to enable the continued operation
of such property as it is now operated in connection with the conduct of the
Business and the Acquired Assets; (iii) except for the Real Property Lease,
there 

 15
 

are, to the Seller’s knowledge, no leases, subleases, licenses,
concessions or other Contracts, written or oral, granting to any party or
parties the right of use or occupancy of any portion of the parcel of such
property except in favor of the Seller; and (iv) there are, to the Seller’s
Knowledge, no parties (other than the Seller) in possession of the Leased Real
Property.

3.12         Litigation.  Except as set forth on Schedule 3.12,
there is no Legal Proceeding to which the Seller or any of the Acquired Assets,
or the officers, directors or employees of the Seller (in their capacities as
such) is a party and, to the Seller’s Knowledge, no such Legal Proceeding is
threatened and, to the Seller’s Knowledge, there is no Basis for any such Legal
Proceeding.  There is no Legal Proceeding
pending or, to the Seller’s knowledge, threatened against the Seller or the
Owner which questions or challenges the validity of this Agreement or the
transactions contemplated hereby, or which could result in a Material Adverse
Change.  With respect to all Legal
Proceedings set forth on Schedule 3.12, the Seller is the plaintiff in such
Legal Proceedings and no counterclaim has been asserted against the Seller.

3.13         Employees.

(a)           The Seller is in compliance in
all material respects with all currently applicable Laws respecting labor and
employment, applicant and employee background checking, immigration,
discrimination in employment, terms and conditions of employment, wages, hours
and occupational safety and health and employment practices, and is not engaged
in any unfair labor practice.  Except as
described in Schedule 3.13(a), the Seller is not liable for any payment
to any trust or other fund or to any Governmental Entity, with respect to
unemployment compensation benefits, social security or other benefits or
obligations for employees other than routine payments to be made in the
Ordinary Course.  Except as set forth on Schedule 3.13(a),
(i) there are no pending claims against the Seller under any workers
compensation plan or policy or for long term disability, (ii) there are no
controversies pending or, to the Seller’s Knowledge, threatened, between the
Seller and any of its employees, which controversies have or could reasonably
be expected to result in a Legal Proceeding, (iii) there is no pending claim
against the Seller or complaint made by any employee of the Seller based on
actual or alleged wrongful termination or any claim of unlawful dismissal or
unfair dismissal or any claim on the basis of race, age, sex, disability or
other harassment or discrimination, nor, to the Seller’s Knowledge, any Basis
for any such claim, and (iv) none of the employees or of the Seller have given
notice prior to the Effective Date to the Seller, nor is the Seller otherwise
aware on the Effective Date, that any such employee intends to terminate his or
her employment or engagement.  The Seller
is not a party to any collective bargaining agreement or other labor union
contract nor does the Seller know of any activities or proceedings of any labor
union to organize any such employees.

(b)           Schedule 3.13(b)
contains a complete and accurate list of the following information for each
employee and independent contractor of the Seller, including each employee on
leave of absence or layoff status:  name;
job title; and current compensation or remuneration.  Except as set forth on Schedule 3.13(b),
the Seller has not made any promises for the payment of any bonuses, backpay or
other remuneration to any employees, contractors or other Persons.

 16
 

3.14         Environmental,
Health and Safety Matters.

(a)           To the Seller’s Knowledge, the
Seller has complied and is in compliance with all applicable Environmental
Laws, and has no Liability and has had no Liability arise under applicable
Environmental Laws.  Without limiting the
generality of the foregoing, the Seller has obtained and complied with, and is
in compliance with, all permits, licenses and other authorizations that are
required pursuant to Environmental Laws for the occupation of its facilities
and leased locations and the operation of its respective business.  There is no pending and, to the Seller’s
Knowledge, there is no threatened civil, criminal or administrative litigation,
written notice of violation, formal proceeding, or investigation, inquiry or
information request by any Governmental Entity, relating to any Environmental
Law involving the Seller, or any parcel of real property or any facility
formerly or currently owned, leased, operated or controlled by the Seller.

(b)           To the Seller’s Knowledge,
there have been no releases of any Materials of Environmental Concern into the
environment at any parcel of real property or any facility formerly or
currently owned, leased, operated or controlled by the Seller for which the
Seller may be liable under any Environmental Law.  To the Seller’s Knowledge, there have been no
other releases of Materials of Environmental Concern at parcels of real
property or facilities (including those owned, leased, operated or controlled
by the Seller) that could reasonably be expected to have an impact on the real
property or facilities owned, operated or controlled by the Seller.

(c)           There are no environmental
reports, investigations or audits possessed or controlled by the Seller
(whether conducted by or on behalf of the Seller or a third party, and whether
done at the initiative of the Seller or directed by any Governmental Entity or
any other third party) relating to premises currently or previously owned,
leased, or operated by the Seller.

3.15         Brokers’ Fees.  Other than Orissa Advisors Company, Inc. (“Advisors”),
the Seller does not have any Liability or obligation to pay any fees or
commissions to any broker, finder or agent with respect to the transactions
contemplated by this Agreement.  Seller
shall satisfy its obligations to Advisors.

3.16         Licenses.

(a)           The Seller currently maintains
all licenses, certificates, permits, consents, authorizations and other
governmental or regulatory approvals (the “Licenses”) necessary for the
Seller to conduct the Business.  Schedule
3.16(a) sets forth a true, correct and complete list of all Licenses held
by the Seller and the Governmental Entities granting such Licenses.

(b)           The Licenses for the Business
are in full force and effect and no event has occurred that could result in the
loss, suspension, withdrawal or limitation of such License. The Business is in
compliance with the terms and conditions of all Licenses and has not received
any notice that (i) it is in violation of any of the Licenses or (ii) that any
of the Licenses will not be renewed.  To
the Knowledge of the Seller, there is no Basis for nonrenewal of any of the
Licenses.  There are no proceedings
pending to revoke or withdraw such Licenses, and to the Knowledge of the
Seller, there are no facts, circumstances or omissions involving the Business
that could lead to such action. The Licenses constitute all the licenses,
permits or approvals 

 17
 

necessary to conduct the Business in the manner and to the full extent
that it is now being conducted.   No
application for any License has been denied by final agency action.

3.17         ATMs and Other
Tangible Property.  Schedule 3.17
lists every credit card, debit card and check point-of-sale payment terminal
and ATM owned by the Seller (collectively, the “Purchased ATMs”) and
sets forth the following information with respect to each Purchased ATM:  (i) the location by address of such
Purchased ATM, (ii) the name of the merchant related to such Purchased
ATM, (iii) the terminal identification number of such Purchased ATM,
(iv) the surcharge, revenue, transactional and cash dispensed amounts for
such Purchased ATM for the 12-month period ending December 2006 and the 2-month
period ending February 2007, (v) the merchant or landlord payments for
such Purchased ATM paid or incurred for such 12-month period and 2-month period
and (vi) the make and model of such Purchased ATM.

3.18         Intentionally Left
Blank .

3.19         Intentionally Left
Blank .

3.20         Affiliated
Transactions.  Except as set forth on
the Schedule 3.20, neither Parent, Owner, nor their respective
Affiliates and, to Seller’s knowledge, no employee of the foregoing or any
individual related by blood, marriage or adoption to any such employee or any
entity, other than a public company, in which any such Person or individual
owns any beneficial interest, (an “Insider”), is a party to any Contract
with the Seller relating to the Business or any of the Acquired Assets or has
any interest in any of the Acquired Assets or has received any funds (other
than base salary, bonuses and commissions paid to officers and employees in the
Ordinary Course) from the Seller since the Financial Statement Date.  Except as set forth on Schedule 3.20,
no portion of the Business is conducted by the Owner or Parent.

3.21         Customers and
Suppliers.

(a)           The attached Schedule
3.21(a) lists (i) each customer of the Business accounting for more than 2%
of the gross revenues of the Business for each of the two most recent fiscal
years (and the revenues generated from such customer), and (ii) any additional
current customers which the Seller reasonably anticipate shall account for more
than 2% of the gross revenues of the Business for the current fiscal year
(collectively, the “Material Customers”). Except as set forth on Schedule
3.21(a), (i) all Material Customers continue to be customers of the
Business, (ii) the Seller has not received any notice, nor is the Seller
otherwise aware, that any Material Customer will reduce materially its business
with the Business from the levels achieved during the year ended December 31,
2006 or the two-month period ended February 28, 2007; (iii) since the Financial
Statement Date, no Material Customer has terminated its relationship with the
Business or, to the Seller’s Knowledge, threatened to do so; (iv) since the
Financial Statement Date, no Material Customer has modified or, to the Seller’s
knowledge, indicated that it intends to modify its relationship with the Business
in a manner which is less favorable in any material respect to the Business or
has agreed not to or, to the Seller’s knowledge, indicated it will not agree to
do business on such terms and conditions at least as favorable as the terms and
conditions provided to the Business as of the date hereof; and (v) the Seller
is not involved in any material claim, dispute or controversy with any Material
Customers. No Material Customer has threatened to take any of the actions
described in this Section 3.21 as 

 18
 

a result of the transactions contemplated by this Agreement or
otherwise. To the Seller’s Knowledge, since the date of the Financial Statement
Date, there has been no other adverse change in the relationship between the
Business and any Material Customer.

(b)           The attached Schedule
3.21(b) lists each vendor, supplier, service provider and other similar
business relation of the Business from whom the Seller purchased greater than
$50,000 in goods and/or services over the course of the 12 months ending December
31, 2005 or December 31, 2006, the amounts owing to each such Person, and
whether such amounts are past due (the “Material Suppliers”). Except as
set forth on Schedule 3.21(b), (i) all Material Suppliers continue to be
suppliers of the Business; (ii) the Seller has not received any notice, nor is
the Seller otherwise aware, that any Material Supplier will reduce materially
its business with the Business from the levels achieved during the year ended
December 31, 2006 or the two-month period ended February 28, 2007; (iii) since
the Financial Statement Date, no Material Supplier has terminated its
relationship with the Business or, to the Seller’s Knowledge, threatened to do
so; (iv) since the date of the Financial Statement Date, no Material Supplier
has modified or, to the Seller’s Knowledge, indicated that it intends to modify
its relationship with the Business in a manner which is less favorable in any
material respect to the Business or has agreed not to or, to the Seller’s
Knowledge, indicated it will not agree to do business on such terms and
conditions at least as favorable as the terms and conditions provided to the
Business on the date of hereof; and (v) the Seller is not involved in any
material claim, dispute or controversy with any Material Supplier. No Material
Supplier has threatened to take any of the actions described in this Section
3.21(b) as a result of the transactions contemplated by this Agreement or
otherwise. To the Seller’s knowledge, since the date of the Financial Statement
Date, there has been no other adverse change in the relationship between the
Business and any Material Supplier.

3.22         Legal Compliance.  The items described on Schedule 3.22
constitute all of the material permits, filings, notices, licenses, consents,
authorizations, accreditation, waivers, approvals and  the like of, to or with any Governmental
Entity or any other Person (collectively, the “Consents”) which are
required for the assignment of the Acquired Assets (including, without
limitation, the assignment of the Assumed Contracts) and the consummation of
the transactions contemplated hereby and by the Transaction Documents.

3.23         No Acceleration of
Rights or Benefits.  Except as set
forth in Schedule 3.23, the Seller has not made, and the Seller is not
obligated to make, any payment to any Person in connection with the
transactions contemplated by this Agreement. No rights or benefits of any
Material Suppliers or Material Customers have been (or will be) accelerated or
increased as a result of the consummation of the transactions contemplated by
this Agreement.

3.24         Names and Location.  Except as set forth on the attached Schedule
3.24, (i) during the preceding five-year period, the Seller has not used
any name or names under which it has invoiced account debtors, maintained
records concerning the Acquired Assets or otherwise conducted the business with
respect to the Business, other than the exact name under which it has executed
this Agreement, and (ii) all of the Acquired Assets (other than the Purchased
ATMs) are located at the Leased Real Property.

 19

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

The Purchaser
represents and warrants to the Seller that the statements contained in this
Article IV are correct and complete as of the date of this Agreement:

4.1           Organization,
Good Standing and Power.  The
Purchaser is a limited liability company duly organized, validly existing and
in good standing under the laws of the State of Delaware and has full power and
authority to carry on its business as now conducted.  PAI is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and has
full power and authority to carry on its business as now conducted.

4.2           Authorization
of Transaction.  Each of PAI and the
Purchaser has all requisite power and authority to execute and deliver this
Agreement and to perform its respective obligations hereunder.  The execution and delivery of this Agreement
by PAI and the Purchaser and the consummation by PAI and the Purchaser of the
transactions contemplated hereby have been duly and validly authorized by all
necessary action on the part of the Purchaser. 
This Agreement has been duly and validly executed and delivered by PAI
and the Purchaser and, assuming the due authorization, execution and delivery
by the Seller, constitutes a valid and binding obligation of PAI and the
Purchaser, enforceable against PAI and the Purchaser in accordance with its
terms except as the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization or other Laws or equitable principles relating to or
affecting the enforcement of creditors’ rights.

4.3           Noncontravention.  Neither the execution and delivery of this
Agreement by PAI and the Purchaser, nor the consummation by PAI or the
Purchaser of the transactions contemplated hereby, shall (a) conflict with or
violate any provision of the Certificate of Incorporation or the Bylaws of PAI
or the Certificate of Formation or Limited Liability Company Agreement of the
Purchaser, (b) require on the part of PAI or the Purchaser any filing with, or
any permit, authorization, consent or approval of, any Governmental Entity, or
(c) violate any Law applicable to PAI or the Purchaser or any of their
respective properties or assets.

4.4           Litigation.  There is no Legal Proceeding pending or, to
the knowledge of PAI or the Purchaser, threatened against PAI or the Purchaser
which questions or challenges the validity of this Agreement or the
transactions contemplated hereby, or which could have a material adverse effect
on PAI or the Purchaser.

4.5           Brokers’
Fees.  Other than Tremont Capital
Group, the Purchaser does not have any Liability or obligation to pay any fees
or commissions to any broker, finder or agent with respect to the transactions
contemplated by this Agreement. 
Purchaser shall satisfy its obligations to Tremont Capital Group.

ARTICLE V

COVENANTS

5.1           Notice
of Developments.  The Seller, on the
one hand, and the Purchaser, on the other hand, will give prompt written notice
to each other of any material fact or material development that arises prior to
Closing which (i) causes a material breach of any of their 

 20
 

respective
representations and warranties contained in this Agreement, (ii) causes any
such representation or warranty to be inaccurate, incomplete or untrue in any
material respect at Closing, or (iii) results in any material failure to comply
with or satisfy any covenant, condition or agreement to be complied with or
satisfied by such party hereunder.   
Notwithstanding anything to the contrary in the foregoing, (i) in the event
that the Seller gives notice in writing to the Purchaser pursuant to this
Section 5.1, the Purchaser may terminate this Agreement by notice in writing to
the Seller within ten (10) days after receipt of Seller’s notice, but if
Purchaser does not so terminate then the Purchaser shall proceed to Closing and
the Seller shall have no Liability to the Purchaser Indemnitees for Damages
relating exclusively to the matters set forth in such written notice delivered
to the Purchaser and (ii) in the event that the Purchaser gives notice in
writing to the Seller pursuant to this Section 5.1, the Seller may terminate
this Agreement by notice in writing to the Purchaser within ten (10) days after
receipt of Purchaser’s notice, but if Seller does not so terminate then the
Seller shall proceed to Closing and the Purchaser shall have no Liability to
the Seller Indemnitees for Damages relating exclusively to the matters set
forth in such written notice delivered to the Seller.

5.2           Risk
of Loss.  Except as otherwise provided
in this Agreement or to the extent caused by the Purchaser, until the Closing
Date, all risk of loss, damage or destruction to the Acquired Assets relating
to any event or circumstance occurring prior to the Closing Date shall be borne
by the Seller.

5.3           Access
to Information.  Subject to the terms
and conditions of the Confidentiality Agreement, until the Closing Date, the
Seller shall allow the Purchaser and its Representatives free access upon
reasonable notice and during normal working hours to the Seller’s files, books,
records, and offices and real property, including any and all information
relating to the Contracts and the personal and real property and financial
condition of the Seller.  As part of such
examination, but subject to the Confidentiality Agreement, the Purchaser may
make such inquiries of such Persons having business relationships with the
Seller as the Purchaser shall determine and the Seller shall cooperate fully
with the Purchaser in connection therewith; provided, however, that Purchaser
shall not contact any customer or client of the Seller without the prior
approval of the Seller which approval shall not be unreasonably withheld and
the Purchaser shall not disclose the nature and extent of the transactions
contemplated by this Agreement with any employee of the Seller without the
prior approval of the Seller which approval shall not be unreasonably
withheld.  Until the Closing Date, the
Seller shall cause its accountants, subject to customary confidentiality
requirements, to cooperate with the Purchaser and its Representatives in making
available all financial information reasonably requested, including the right
to examine all working papers pertaining to all financial statements prepared
or audited by such accountants.

5.4           Affirmative
Covenants of the Seller.  Prior to
the Closing, unless the Purchaser otherwise agrees in writing, the Seller will
at its expense:

(a)           with respect to the Business,
maintain its books, accounts and records, pay expenses and payables, bill
customers, collect Accounts Receivables, purchase inventory, perform all
maintenance and repairs necessary to maintain the Acquired Assets in good
operating condition (normal wear and tear excepted), to maintain the insurance
policies it currently has in 

 21
 

place with respect to the
Acquired Assets or the Business and to otherwise conduct the Business, in each
case only in the Ordinary Course;

(b)           keep in full force and effect
its corporate existence and all rights and franchises relating or pertaining to
the Business and use its commercially reasonable efforts to cause its current
insurance (or reinsurance) policies with respect to the Acquired Assets or the
Business not to be canceled or terminated or any of the coverage thereunder to
lapse;

(c)           use its commercially reasonable
efforts to carry on the Business in the same manner as presently conducted and
to maintain goodwill related to the Business and to keep the Business’
organization and properties intact, including its present operations, physical
facilities, working conditions, employees and contractors (other than employees
not designated as Hired Employees) and its present relationships with lessors,
licensors, suppliers and customers and others having business relations with
it;

(d)           terminate (without any Liability
to the Purchaser) all Contracts designated on Schedule 5.4(d);

(e)           (i) comply in all material
respects with all Laws and Material Contracts, (ii) maintain all existing
licenses and permits applicable to the operations of the Business (if any), and
(iii) pay all applicable Taxes (including all income Tax installments related
to Seller’s conduct of the Business) as such Taxes become due and payable;

(f)            maintain in full force and
effect, and use commercially reasonable efforts to protect, the Acquired Assets;

(g)           comply in all material
respects with all applicable Laws pertaining to the Business;

(h)           promptly inform the
Purchaser  in writing of the occurrence
or non-occurrence of any event known to the Seller which would cause the
conditions set forth in Section 6.1 hereof not to be satisfied or the breach of
any covenant hereunder by the Seller (which disclosure shall in no way be
deemed to amend or supplement any exhibit or schedule hereto or to prevent or
cure any misrepresentation, breach of warranty or breach of covenant
hereunder).

5.5           Negative
Covenants of the Seller.  From and
after the date hereof and until the Closing, unless the Purchaser otherwise
agrees in writing, the Seller shall not:

(a)           except as expressly
contemplated by this Agreement, knowingly take or omit to take any action
which, individually or in the aggregate, could be reasonably anticipated to
have a Material Adverse Effect on the Business and/or the Acquired Assets;

(b)           knowingly take any action or
omit to take any action that would require disclosure pursuant to Section
5.4(i) if each representation and warranty contained herein were remade as of
the time of such action or omission;

 22
 

(c)           (i) pay any dividend or make
any similar distribution, redeem, purchase or otherwise acquire, directly or
indirectly, any of its equity securities, or (ii) make any loan or enter into
any transaction with or distribute any assets or property to any of its
officers, directors, shareholders, Affiliates or other Insiders, except for
base salary, bonuses and commissions paid to officers and employees in the
Ordinary Course and except payments of, and advances under, intercompany loans;

(d)           with respect to the Business,
(i) incur any indebtedness (other than for purchases of inventory and trade
payables in the Ordinary Course consistent with past practices, and except
payments of, and advances under, intercompany loans), and (ii) institute any
material change in the conduct of the Business or any change in its method of
purchase, sale, lease, management, marketing, operation or accounting
(including with respect to Accounts Receivable and inventory);

(e)           sell, lease, license or
otherwise dispose of any interest in any of the material tangible or intangible
assets of the Business, including the Acquired Assets, or permit any of the
Business’ property (including the Acquired Assets) or equity securities (if
any) to be subjected to any Lien, other than sales of inventory in the Ordinary
Course and other than licenses granted to customers in the Ordinary Course;

(f)            cause or permit the Seller to
merge or consolidate with any other Person;

(g)           with respect to the Business,
acquire a material amount of assets from any other Person outside the ordinary
course of business and inconsistent with past practices;

(h)           enter into, amend or modify
any employment, severance, deferred compensation or retirement or other similar
agreement or arrangement with any employee of the Company, or grant any
increase in salary or bonus or otherwise increase the compensation payable to (whether
in cash or otherwise) any employee of the Company, advisor or agent employed in
connection with or rendering services to the Business, except wage or salary
increases required by existing contracts or by compensation policies which are
consistent with past practices and of which the Purchaser is notified in
writing;

(i)            (i) hire any new employee for
the Business other than in the Ordinary Course, (ii) promote any employee of
the Company except in order to fill a position vacated after the date of this
Agreement, or (iii) engage any consultant or independent contractor for the
Business other than in the Ordinary Course;

(j)            take any action for its
winding up, liquidation, dissolution or reorganization or for the appointment
of a receiver, administrator or administrative receiver, trustee or similar
officer of all or any of its assets or revenues;

(k)           with respect to the Business,
enter into any agreement containing any provision or covenant limiting in any
respect its ability to (i) sell or buy any products or services to or from any
other Person, (ii) engage in any line of business or (iii) compete with any
Person;

(l)            except as expressly
contemplated by this Agreement, terminate, modify or amend any Assumed Contract
or, with respect of the Business, enter into any new Material 

 23
 

Contract except, in the
case of any Contract, in the Ordinary Course consistent with past practice or
as provided in Section 5.5(e); or

(m)          commit to do any of the
foregoing.

5.6           Satisfaction
of Conditions Precedent.  The Seller
and the Purchaser shall each use commercially reasonable efforts to
satisfy or cause to be satisfied all of their conditions precedent which are
set forth in Article VI and Article VII, respectively, and to cause the
transactions contemplated by this Agreement to be consummated.  Without limiting the generality of the
foregoing, the Seller and the Purchaser shall each use commercially reasonable
efforts to obtain all consents and authorizations of Governmental Entities or
other Persons and to make all filings with, and give all notices to, third
parties which may be necessary or reasonably required on its part in order to
effect the transactions contemplated herein.

5.7           Exclusivity.  Except as set forth below, from the date of
this Agreement and until April 30, 2007 (or such date as the Closing is
extended to pursuant to Section 8.1(c)) (the “Exclusivity Period”), none
of the Seller, the Parent nor the Owner shall (and shall use commercially
reasonable efforts to assure that its Representatives and Affiliates do not)
take any action to solicit, initiate, seek, encourage or support any inquiry,
proposal or offer from, furnish any information to, or participate in any
negotiations with, any corporation, partnership, person or other entity or
group (other than discussions with the Purchaser) regarding any acquisition of
the Seller, any merger or consolidation with or involving the Seller, or any
acquisition of any material portion of the equity interests or assets of the
Seller (an “Alternative Transaction”). 
The Seller agrees that any such negotiations in progress as of the date
hereof shall be terminated or suspended during the Exclusivity Period.  Notwithstanding anything in this Agreement to
the contrary, the Seller, the Owner or the Parent may furnish information to
Paymentech, L.P. regarding the transactions contemplated by this Agreement and
may take any action necessary to comply with the right of first refusal granted
to Paymentech, L.P. under the agreement dated June 15, 2004, as amended,
between Seller and Paymentech, L.P..

5.8           Sponsorship
Agreement. Owner shall execute and deliver at Closing a Sponsorship
Agreement substantially in the form of Exhibit 2.2(d).

5.9           Press
Releases.  Except as may otherwise be
required by Law or as expressly set forth herein, the timing and content of all
press releases and other public announcements to the Business’ customers,
vendors and employees relating to the transactions contemplated by this
Agreement shall be determined jointly by the Purchaser and the Seller.  In addition, Purchaser acknowledges that
Parent is a public company, and that applicable securities laws regulate the
disclosure of information regarding transactions involving Parent and its
subsidiaries.  Notwithstanding anything
herein to the contrary, Parent may disclose, issue a press release, or make a
public announcement regarding the terms and status of the transactions
contemplated by this Agreement, as necessary or deemed advisable by legal
counsel to Parent to comply with applicable securities laws or other Law;
provided that Parent agrees to provide Purchaser with copies of such disclosure
at least one (1) business day prior to public release or announcement.

 24
 

5.10         Tax
Matters.

(a)           All transfer, documentary,
sales, use, stamp, and other such similar taxes and fees (including any
penalties and interest) (“Transfer Taxes”) incurred by the Seller or
Purchaser in connection with this Agreement (including any Transfer Tax imposed
in any state or subdivisions), shall be paid by the Seller.  The Seller will file all necessary Tax
returns and other documentation with respect to all such Transfer Taxes, and,
if required by applicable law, the Seller and the Purchaser will, and will
cause their respective Affiliates to, join in the execution of any such Tax Returns
and other documentation.

(b)           After the Closing, the Seller
shall prepare or cause to be prepared and file or cause to be filed all income
Tax returns for the Business for all periods ending at or before the Closing
which are required to be filed after such day. The Seller shall prepare such
income Tax returns in a manner consistent with past income Tax returns except
as required by applicable law or change in circumstance.

(c)           The Purchaser shall file or
cause to be filed all Tax returns that are required to be filed, and pay or
cause to be paid, all Taxes that are required to be paid by or with respect to
the Acquired Assets for any Tax period ending after the Closing.  Notwithstanding the foregoing, this Section 5.10(c)
shall in no way limit the Purchaser’s right to recover under Section 9.1(c) any
amounts relating to any Excluded Liability.

(d)           The Seller and the Purchaser
shall cooperate fully, as and to the extent reasonably requested by the other
party, in connection with the filing of Tax returns pursuant to this Section
5.10 and any audit, litigation, or other proceeding with respect to Taxes. Such
cooperation shall include the retention and (upon the other party’s request)
the provision of records and information which are reasonably relevant to any
such audit, litigation, or other proceeding, and making employees reasonably
available on a mutually convenient basis to provide additional information and
explanation of any material provided hereunder.

(e)           The Seller and the Purchaser
agree for all Tax purposes to treat and report the transactions contemplated by
the Agreement and to file all Tax returns in a manner consistent with this
Agreement.

5.11         Confidentiality;
Non-Compete; Non-Solicitation; Non-Disparagement.

(a)           Each of the Seller, the Parent
and the Owner hereby acknowledges that it is familiar with the Business’ trade
secrets and that has had access to and contributed to information and materials
of a highly sensitive nature (including Confidential Information, as defined
below) of the Business.  Each of the
Seller and the Owner agrees from and after the Closing Date it shall not use
for itself or anyone else, and shall not disclose to others, any Confidential
Information, except to the extent such use or disclosure is required by Law or
order of any governmental authority (in which event such Seller shall, to the
extent practicable, inform the Purchaser in advance of any such required
disclosure, shall cooperate with the Purchaser in all reasonable ways at
Purchaser’s expense in obtaining a protective order or other protection in
respect of such required disclosure, and shall limit such disclosure to the
extent reasonably possible while still complying with such requirements). Each
of the Seller, the Parent and the 

 25
 

Owner shall use, and
shall cause each Business Entity controlled by it to use, and shall endeavor to
cause its and their respective employees, officers, directors and
representatives to use, reasonable care to safeguard Confidential Information
and to protect it against disclosure, misuse, espionage, loss and theft.  Notwithstanding the foregoing, Owner may
share Confidential Information with any Governmental Entity regulating Owner.

(b)           In consideration of the
consideration provided by the Purchaser herein to the Seller, and the benefits
accruing to the Owner from such consideration in its capacity as the owner of
all of the outstanding capital stock of the Seller, during the period beginning
on the Closing Date and ending on the fourth (4th) anniversary of the Closing
Date (the “Noncompete Period”), each of the Seller, the Parent and the Owner
shall not and shall cause each Business Entity controlled by it to not,
directly or indirectly, either for itself or for any other Person, partnership,
corporation or company, own, manage, control, participate in, consult with,
render services for, permit its name to be used or in any other manner engage
in any business or enterprise for purposes of, or in a manner which, competes,
or plans to compete, with the Business. For purposes of this Agreement, the
term “participate” includes any direct or indirect interest in any enterprise,
whether as an officer, director, employee, partner, sole proprietor, agent,
representative, independent contractor, franchisor, franchisee, creditor, or
owner; provided that the foregoing activities shall not include passive
ownership of less than 5% of the stock of a publicly-held corporation whose
stock is traded on a national securities exchange or in the over-the-counter
market. Seller agrees that this covenant is reasonable with respect to its
duration, geographical area and scope.

(c)           During the Noncompete Period,
each of the Seller, the Parent and the Owner shall not (and shall cause each
Business Entity controlled by it to not) directly or indirectly through another
entity (i) induce or attempt to induce any Hired Employees to leave the employ
of the Purchaser or any of its Affiliates or (ii) induce or attempt to induce
any customer, supplier, licensee, licensor or other business relation of the
Business to cease doing business with the Business and/or the Purchaser or any
of its Affiliates.

(d)           If, at the time of enforcement
of this Agreement, a court or arbitrator’s award holds that the restrictions
stated in this Section 5.11 are unreasonable under circumstances then existing,
the parties hereto agree that the maximum period, scope or geographical area
reasonable under such circumstances shall be substituted for the stated period,
scope or area. The parties hereto agree that money damages would not be an adequate
remedy for any breach of this Agreement. Therefore, in the event of a breach or
threatened breach of any provisions of this Section 5.11 that is continuing,
the Purchaser, its successors and assigns may, in addition to other rights and
remedies existing in their favor, apply to any court of competent jurisdiction
for specific performance and/or injunctive or other relief in order to enforce,
or prevent any violations of, the provisions hereof (without posting a bond or
other security). In addition, in the event of a breach of violation by either
Seller or the Owner of this Section 5.11, the Noncompete Period shall be tolled
until such breach or violation has been duly cured.  Each of the Seller and the Owner agrees that
the restrictions contained in this Section 5.11 are reasonable.

(e)           Each of the Seller and the
Owner acknowledges and represents that: (i) sufficient consideration has been
given by each party to this Agreement to the other as it relates hereto; (ii)
it has consulted with independent legal counsel regarding its rights and
obligations 

 26
 

under this Section 5.11,
(iii) that the agreements in this Section 5.11 are reasonable and necessary for
the protection of the Purchaser and its Affiliates and are an essential
inducement to the Purchaser to enter into this Agreement and (iv) that that the
agreements in this Section 5.11 are in addition to, rather than in lieu of, any
similar or related covenants to which either Seller or the Owner is party or by
which it is bound.

5.12         Confidentiality
of Terms of Transaction, Etc.  
Except as may otherwise be required by Law or as expressly set forth
herein, the parties hereto agree to keep confidential the terms and status of
this Agreement and the transactions contemplated hereby; provided, however,
that each of the parties hereto shall have the right to communicate and discuss
with, and provide to, its legal advisors, representatives, officers or
employees, directors, consultants and agents, who have a need to know in order
to carry out the terms of this Agreement and who are under an obligation to
hold in confidence, any information regarding the terms and status of this
Agreement and the transactions contemplated hereby, and, provided further, (i)
that the parties hereto shall also have the right to (x) communicate and
discuss with, and provide to, their lenders, and such lenders’ legal advisors,
representatives, officers or employees, directors, consultants and agents such
information, (y) to communicate with each other’s employees, customers,
suppliers, officers, directors and other business associates concerning the
Business and (z) to make such disclosures pursuant to Section 5.9 deemed
advisable by legal counsel under any Law.

5.13         Further
Assurances.  At any time and from
time to time after the Closing Date, at the request of the other party and
without further consideration, each party will execute and deliver such other
instruments of sale, transfer, conveyance, assignment, confirmation and
assumption and take such action as the other party may reasonably determine is
necessary to transfer, convey and assign to the Purchaser the Acquired Assets
and to cause the Purchaser to assume the Assumed Liabilities, as the case may
be, and to confirm the Purchaser’s title to or interest in the Acquired Assets
and liability for the Assumed Liabilities and the Seller’s title to or interest
in the Excluded Assets and liability for the Excluded Liabilities and to put
the applicable party in actual possession and operating control thereof and to
assist such party in exercising all rights with respect thereto.

5.14         Post-Closing
Collections.  After the Closing, (a)
the Seller shall promptly pay to the Purchaser as and when received any and all
cash, monies, checks or other property that the Seller receives (i) with
respect to the Acquired Assets, and/or (ii) in connection with or relating to
the operation of the Business after Closing and (b) the Purchaser shall
promptly pay to the Seller as and when received any and all cash, monies,
checks or other property that the Purchaser receives (i) with respect to the
Excluded Assets and/or (ii) in connection with or relating to the Operation of
the Business before Closing unless an Acquired Asset.

5.15         Use
of Names.  To the extent permitted by
law, the Purchaser shall be permitted to continue to use the “NetBank” name and
all adaptations, derivations and combinations of the foregoing (“NetBank Name”)
as provided in the Sponsorship Agreement. 
Subject to Seller’s approval which shall not be unreasonably withheld,
the Purchaser may also use the NetBank Name in correspondence to third parties,
in order to inform third parties of the separation of the Business from the
Seller.  For a period of six (6) months
after Closing, the Seller shall display an announcement of the transaction, in
form and substance acceptable to both parties, on the 

 27
 

homepage of its website,
along with a link to a website designated by the Purchaser.  Notwithstanding the foregoing, the Purchaser
shall not, by virtue or during the course of its activity under this Section
5.15, create or impose upon any Seller or their Affiliates any binding
obligation of any kind to any unaffiliated Person.

5.16         Enforcement
of Confidentiality and Proprietary Rights Agreements.  Seller agrees that it shall use its
reasonable commercial efforts, and shall cooperate with the Purchaser, to
enforce any and all provisions set forth in all written confidentiality
agreements and written proprietary rights agreements entered into by Seller
with all of the current and former consultants, contractors and employees of
Seller related to the Business.

ARTICLE VI

CONDITIONS TO THE PURCHASER’s OBLIGATIONS

The obligations of
the Purchaser to consummate the transactions contemplated by this Agreement are
subject to the fulfillment or satisfaction on and as of the Closing Date of
each of the following conditions (any one or more of which may be waived by the
Purchaser, but only in a writing signed by the Purchaser):

6.1           Accuracy
of Representations and Warranties. 
The representations and warranties of the Seller set forth in this
Agreement that are qualified as to materiality shall be true and correct in all
respects, and all other representations and warranties of the Seller set forth
in this Agreement shall be true and correct in all material respects, in each
case as of the Closing Date as though made as of the Closing Date, except to
the extent such representations and warranties are specifically made as of a
particular date or as of the date of this Agreement (in which case such
representations and warranties shall be true and correct as of such date).

6.2           Covenants.  The Seller shall have performed or complied
in all respects with their agreements and covenants required to be performed or
complied with under this Agreement as of or prior to the Closing Date.

6.3           No
Litigation.  No Law entered, enacted,
promulgated, enforced or issued by any Governmental Entity or other legal
restraint or prohibition shall be in effect, and no Legal Proceeding shall be
pending or threatened by or before any Governmental Entity, that seeks to
prohibit, restrain or obtain Damages or other relief in connection with the
consummation of the transactions contemplated by this Agreement.

6.4           Consents;
Approvals.  Each of the consents,
authorizations or approvals set forth on Schedule 6.4, shall have
been obtained in form and substance reasonably satisfactory to the Purchaser,
other than the consents, authorizations or approvals governed by Section
2.4.  Without limiting the foregoing, all
required approvals of Governmental Entities that are required to be obtained
shall have been obtained prior to the Closing.

6.5           Material
Adverse Change.  A Material Adverse
Change shall not have occurred and be continuing and the Seller shall have
satisfied the operating results and maintained the portfolios of assets and
ATMs set forth on Schedule 6.5.

 28

 

6.6           Delivery of Documents.  The Seller shall have delivered, or caused to
be delivered, all of the items required by Section 2.2.

6.7           Compliance with
Law.  The consummation of the
transactions contemplated by this Agreement, including, without limitation, the
sale of the Acquired Assets by the Seller to the Purchaser hereunder, will not
be prohibited by any Law.

6.8           Amendments and Waivers.  The Seller shall have obtained at Seller’s
expense an amendment to delete, and a release of any former or future claims or
obligations against Seller under, Section 2.4 of that certain Processing
Agreement dated February 1, 2003, as amended, between the Seller and Genpass
Technologies, LLC.

ARTICLE VII

CONDITIONS TO THE SELLER’S OBLIGATIONS

The obligations of the Seller to consummate the
transactions contemplated by this Agreement are subject to the fulfillment or
satisfaction on and as of the Closing of each of the following conditions (any
one or more of which may be waived by the Seller, but only in a writing signed by
the Seller):

7.1           Accuracy of Representations and
Warranties.  The representations and
warranties of the Purchaser set forth in this Agreement that are qualified as
to materiality shall be true and correct in all respects, and all other
representations and warranties of the Purchaser set forth in this Agreement
shall be true and correct in all material respects, in each case as of the
Closing as though made as of the Closing, except to the extent such
representations and warranties are specifically made as of a particular date or
as of the date of this Agreement (in which case such representations and
warranties shall be true and correct as of such date).

7.2           Covenants.  The Purchaser shall have performed or
complied in all respects with its agreements and covenants required to be
performed or complied with under this Agreement as of or prior to the Closing.

7.3           No Litigation.  No Law, entered, enacted, promulgated,
enforced or issued by any Governmental Entity or other legal restraint or
prohibition shall be in effect, and no Legal Proceeding shall be pending or
threatened by or before any Governmental Entity, that seeks to prohibit,
restrain or obtain Damages or other relief in connection with the consummation
of the transaction contemplated by this Agreement.

7.4           Consents; Approvals.  Each of the consents, authorizations or
approvals set forth on Schedule 6.4, shall have been obtained in
form and substance reasonably satisfactory to the Seller, other than the
consents, authorizations or approvals governed by Section 2.4.  Without limiting the foregoing, all required
approvals of Governmental Entities that are required to be obtained shall have
been obtained prior to the Closing.

7.5           Delivery of Documents.  The Purchaser shall have delivered to the
Seller all of the items required by Section 2.3.

 29
 

 

7.6           Compliance with
Law.  The consummation of the
transactions contemplated by this Agreement, including, without limitation, the
sale of the Acquired Assets by the Seller to the Purchaser hereunder will not
be prohibited by any Law.

ARTICLE VIII

TERMINATION OF AGREEMENT

8.1           Termination.  This Agreement may be terminated at any time
prior to the Closing:

(a)           by mutual written consent of
the parties;

(b)           as provided in Section 5.1;

(c)           by the Purchaser or the Seller
for any reason if the Closing has not occurred by the close of business on May
11, 2007, or such later date as the parties may agree in writing; provided that
the Purchaser cannot terminate under this provision if the failure of the
Closing to occur is the result of the failure on the part of the Purchaser to
perform any of its obligations hereunder and the Seller cannot terminate under
this provision if the failure of the Closing to occur is the result of the
failure on the part of the Seller to perform any of its obligations hereunder;

(d)           by either the Purchaser or the
Seller if any Governmental Entity shall have issued an order, injunction,
decree or ruling or taken any other action permanently enjoining, restraining
or otherwise prohibiting the transactions contemplated by this Agreement and
such order, injunction, decree, ruling or other action shall have become final
and nonappealable;

(e)           by the Purchaser in the event
the Seller has breached in any material respect any representation, warranty,
or covenant of the Seller contained in this Agreement, the Purchaser has
notified the Seller of the breach, and the breach has continued without cure
for a period of five (5) days after the notice of breach; or

(f)            by the Seller in the event
the Purchaser has breached in any material respect any representation,
warranty, or covenant of the Purchaser contained in this Agreement, the Seller
has notified the Purchaser of the breach, and the breach has continued without
cure for a period of five (5) days after the notice of breach.

8.2           Effect of Termination.  Any termination of this Agreement under
Section 8.1 shall be effective by the delivery of written notice of the
terminating party to the Seller or the Purchaser, as appropriate.  In the event of termination of this Agreement
pursuant to this Article VIII, this Agreement shall forthwith become void and
there shall be no Liability under this Agreement on the part of any party
hereto or any of its respective Affiliates and all rights and obligations of
the parties shall cease; provided, however, that nothing herein shall relieve
any party hereto from liability for the breach of any provision of this
Agreement prior to termination (subject to the provisions of Section 5.1);
provided, further, that the provisions set forth in this Section 8.2 and in
Sections 11.1 (Governing Law), 11.2 (Jurisdiction), 11.9 (Expenses) and 11.12
(Notice) shall remain in full force and effect and survive any termination of
this Agreement.

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ARTICLE IX

INDEMNIFICATION

9.1           Indemnification by the Seller and
the Parent.  Subject to the
provisions of Section 9.4 and Section 9.5, each of the Seller and the Parent,
jointly and severally, covenant and agree to indemnify, defend and hold
harmless the Purchaser and its Representatives and Affiliates (collectively,
the “Purchaser Indemnitees”), from and against any and all Damages
incurred or suffered by the Purchaser Indemnitees arising or resulting from,
directly or indirectly, any of the following:

(a)           any inaccuracy in or breach of
any representation or warranty of the Seller or the Owner set forth in this
Agreement (or the Schedules hereto) or in any document or certificate delivered
by the Seller or the Owner in connection with this Agreement;

(b)           any breach of any covenant of
the Seller or the Owner set forth herein;

(c)           any Excluded Liabilities;

(d)           any Tax attributable to the
ownership of the Acquired Assets or the operation of the Business for all
taxable periods ending on or before the Closing Date; or

(e)           any Legal Proceeding relating
to any inaccuracy, breach or expense of the type referred to in clause (a),
(b), (c) or (d) hereof (including any Legal Proceeding commenced by a Purchaser
Indemnitee for the purpose of enforcing its rights under this Article IX if
such Purchaser Indemnitee is the prevailing party in any such Legal
Proceeding).

9.2           Indemnification by the Purchaser.  Subject to the provisions of Section 9.4 and
Section 9.5, each of PAI and the Purchaser, jointly and severally, covenants
and agrees to indemnify, defend and hold harmless the Seller and their
Representatives and Affiliates (collectively, the “Seller Indemnitees”)
from and against any and all Damages incurred or suffered by the Seller
Indemnitees arising or resulting from, directly or indirectly, any of the
following:

(a)           any inaccuracy in or breach of
any representation or warranty of the Purchaser set forth in this Agreement or
in any document or certificate delivered by the Purchaser in connection with
this Agreement;

(b)           any breach of any covenant of
the Purchaser set forth herein;

(c)           the Assumed Liabilities;

(d)           any Liabilities arising out of
the operation of the Business or the Acquired Assets after the Closing;

(e)           any Liabilities relating to
the sponsorship of the Business by a Seller Indemnitee pursuant to the Sponsorship
Agreement; or

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(f)            any Legal Proceeding relating
to any inaccuracy, breach or expense of the type referred to in clause (a),
(b), (c), (d) or (e) hereof (including any Legal Proceeding commenced by a
Seller Indemnitee for the purpose of enforcing its rights under this Article IX
if such Seller Indemnitee is the prevailing party in any such Legal
Proceeding).

9.3           Claim
Procedure/Notice of Claim.

(a)           A party entitled, or seeking
to assert rights, to indemnification under this Article IX (an “Indemnified
Party”) shall give written notification (a “Claim Notice”) to the
party from whom indemnification is sought (an “Indemnifying Party”)
which contains (i) a description and the amount (the “Claimed Amount”)
of any Damages incurred or reasonably expected to be incurred by the
Indemnified Party, (ii) a statement that the Indemnified Party is entitled to
indemnification under this Article IX for such Damages and a reasonable
explanation of the basis therefor, and (iii) a demand for payment in the amount
of such Damages.

(b)           Within twenty (20) days after
delivery of a Claim Notice, the Indemnifying Party shall deliver to the
Indemnified Party a written response (the “Response”) in which the
Indemnifying Party shall either: (i) agree that the Indemnified Party is
entitled to receive all of the Claimed Amount or (ii) dispute that the
Indemnified Party is entitled to receive any or all of the Claimed Amount (in
such an event, the Response shall be referred to as an “Objection Notice”).  If no Response is delivered by the
Indemnifying Party to the Indemnified Party within such 20-day period, the
Indemnifying Party shall be deemed to have agreed that an amount equal to the
entire Claimed Amount shall be payable to the Indemnified Party and such
Claimed Amount shall be promptly payable to the Indemnified Party.

(c)           In the event that the parties
are unable to agree on whether Damages exist or on the amount of such Damages
within the 20-day period after delivery of an Objection Notice, either the
Purchaser or the Seller may (but are not required to do so) demand that such
dispute be resolved by arbitration pursuant to Section 11.1.

(d)           In the event that the
Indemnified Party is entitled, or is seeking to assert rights, to
indemnification under this Article IX relating to a third party claim, the
Indemnified Party shall give written notification to the Indemnifying Party of
the commencement of any Legal Proceeding relating to such third party
claim.  Such notification shall be given
within twenty (20) days after receipt by the Indemnified Party of notice of
such suit or proceeding, shall be accompanied by reasonable supporting
documentation submitted by such third party (to the extent then in the
possession of the Indemnified Party) and shall describe in reasonable detail (to
the extent known by the Indemnified Party) the facts constituting the basis for
such suit or proceeding and the amount of the claimed Damages; provided,
however, that no delay or deficiency on the part of the Indemnified Party in so
notifying the Indemnifying Party shall relieve the Indemnifying Party of any
Liability or obligation hereunder except to the extent of any Liability caused
by or arising out of such failure. 
Within twenty (20) days after delivery of such notification, the
Indemnifying Party may, upon written notice thereof to the Indemnified Party,
assume control of the defense of such suit or proceeding with counsel
reasonably satisfactory to the Indemnified Party; provided, however, that (i)
the Indemnifying Party may only assume control of such defense if it
acknowledges in writing to the Indemnified Party that any Damages that may be
assessed against the Indemnified Party in connection with such suit or

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proceeding constitute
Damages for which the Indemnified Party shall be indemnified pursuant to this
Article IX, and (ii) the Indemnifying Party may not assume control of the
defense of a suit or proceeding involving criminal liability or in which any
relief other than monetary damages is sought against the Indemnified Party.  If the Indemnifying Party does not so assume
control of such defense, the Indemnified Party shall control such defense.  The party not controlling such defense (the “Non-controlling
Party”) may participate therein at its own expense; provided, however, that
if the Indemnifying Party assumes control of such defense and the Indemnified
Party reasonably concludes that the Indemnifying Party and the Indemnified
Party have conflicting interests or different defenses available with respect
to such suit or proceeding, the reasonable fees and expenses of counsel to the
Indemnified Party shall be considered “Damages” for purposes of this
Agreement.  The party controlling such
defense (the “Controlling Party”) shall keep the Non-controlling Party
reasonably advised of the status of such suit or proceeding and the defense
thereof and shall consider in good faith recommendations made by the
Non-controlling Party with respect thereto. 
The Non-controlling Party shall furnish the Controlling Party with such
information as it may have with respect to such suit or proceeding (including
copies of any summons, complaint or other pleading which may have been served
on such party and any written claim, demand, invoice, billing or other document
evidencing or asserting the same) and shall otherwise cooperate with and assist
the Controlling Party in the defense of such suit or proceeding.  The Indemnifying Party shall not agree to any
settlement of, or the entry of any judgment arising from, any such suit or
proceeding without the prior written consent of the Indemnified Party, which
shall not be unreasonably withheld or delayed. 
The Indemnified Party shall not agree to any settlement of, or the entry
of any judgment arising from, any such suit or proceeding without the prior
written consent of the Indemnifying Party, which shall not, be unreasonably
withheld or delayed.

9.4           Survival of
Representations, Warranties, and Covenants; Determination of Damages.

(a)           Except as
set forth in Section 9.4(b), the representations and warranties of the Seller,
the Parent and the Purchaser contained in this Agreement and the
certificates delivered pursuant to this Agreement will survive for a period of
twelve (12) months following the Closing Date, at which point such
representations and warranties and any cause of action based thereon will
terminate.

(b)           The representations and
warranties of the Seller and Parent contained in Section 3.1 (Organization,
Good Standing and Power), Section 3.2 (Authorization of Transaction), Section
3.6 (Title to Assets), and Section 3.15  (Brokers’
Fees), will survive indefinitely (the “Seller’s Unlimited Representations”).  The representations and warranties of the
Purchaser in Section 4.1 (Organization, Good Standing and Power), Section 4.2
(Authorization of Transaction) and Section 4.5 (Brokers’ Fees) will survive
indefinitely.

(c)           If an Indemnified Party
delivers to an Indemnifying Party, before expiration of a representation or
warranty, either a Claim Notice based upon a breach of such representation or
warranty, or a notice that, as a result of a Legal Proceeding instituted by or
claim made by a third party, the Indemnified Party reasonably expects to incur
Damages, then the applicable representation or warranty shall survive until,
but only for purposes of, the resolution of the matter covered by such notice.

 33
 

 

(d)           All covenants and agreements
contained in this Agreement and the documents and certificates delivered
pursuant to this Agreement will survive the Closing Date in accordance with
their terms.  The rights and remedies of the
parties set forth in this Agreement are the exclusive remedies of the parties.

(e)           The amount of any Damages
suffered by an Indemnified Party shall be net of any tax benefits or insurance
proceeds (or indemnity, contribution or other similar payment) realized or to
be realizable by an Indemnified Party.

9.5           Limitations on
Indemnification Obligations.

(a)           The Seller and Parent shall
have no obligation to indemnify or reimburse the Purchaser Indemnitees with
respect to Damages arising under Section 9.1(a) (other than the Seller’s
Unlimited Representations) until the aggregate amount of all Damages under
Section 9.1(a) exceeds $50,000, (the “Basket”) in which event the
Seller or Parent shall reimburse the Purchaser Indemnitees for all
Damages.  Notwithstanding the foregoing,
(i) the aggregate indemnification obligation of the Seller and Parent,
collectively, to the Purchaser Indemnitees with respect to Damages arising
under Section 9.1(a) (other than the Seller’s Unlimited Representations) shall
not exceed $1,500,000.

(b)           Notwithstanding anything to
the contrary in this Agreement, the Purchaser Indemnitees’ rights to
indemnification (and the Seller’s indemnification obligations) with respect to
Damages arising under Section 9.1(b), (c), (d) and (e) the Seller’s Unlimited
Representations, or fraud or intentional misrepresentation shall not be subject
to the limitations set forth in Section 9.5(a); provided, that Damages arising
under Section 9.1(e) shall be subject to the limitations set forth in Section
9.5(a) to the extent such Damages arise from or relate to an inaccuracy or
breach of Section 9.1(a).

(c)           In the event that the Seller
terminates this Agreement pursuant to Section 8.1(f) (a “Liquidated Damages
Event”), the Purchaser shall cause the Escrow Agent to deliver the Deposit
to the Seller from the funds held pursuant to the Escrow Agreement, which
payment shall constitute liquidated damages (the “Liquidated Damages Amount”)
and shall be the sole and exclusive remedy of the Seller Indemnitees for any
and all Damages arising under or in connection with a Liquidated Damages
Event.  Upon payment of the Liquidated
Damages Amount, neither the Purchaser, nor any Affiliate or Representative of
the Purchaser shall have any Liability or further obligation to the Seller
Indemnitees under or in connection with a Liquidated Damages Event.  The parties hereto expressly acknowledge and
agree that, in light of the difficulty of accurately determining actual damages
with respect to a Liquidated Damages Event, the Liquidated Damages Amount
constitutes a reasonable estimate of the Damages that will be suffered by the
Seller Indemnitees as a result of a Liquidated Damages Event and (ii) shall be
in full and complete satisfaction of any and all Damages arising as a result of
a Liquidated Damages Event.  The Seller
agrees that upon the payment of the Liquidated Damages Amount, no Seller
Indemnitee shall (i) seek to obtain any recovery or judgment against the
Purchaser or any Affiliates or Representatives of the Purchaser or (ii) be
entitled to seek or obtain any other Damages of any kind, including, without
limitation, consequential, indirect or punitive Damages.  In the event that this Agreement is
terminated for any other reason, the

 34
 

 

Escrow Agent shall return
the Deposit and all other funds held pursuant to the Escrow Agreement to the
Purchaser.

ARTICLE X

EMPLOYEE ARRANGEMENTS

10.1         Employees.

(a)           The Seller has provided the
Purchaser with a true, correct and complete list of all of the employees
engaged primarily in the Business as of February 28, 2007 and shall provide
such a list five days (and as of five days) prior to the Closing Date, in each
case indicating the most recent rate of pay of each such employee during the
twelve (12) months preceding the date hereof, the date of employment and title
or job position of each such employee, and the status of each such employee as
active, on leave, full-time, part-time or otherwise.

(b)           Purchaser acknowledges and
agrees that it will offer employment to the employees of the Seller set forth
on Schedule 10.1(b) (“Potential Employees”) in comparable
positions with comparable salaries with credit for time served.  Provided that the Closing occurs, the Seller
gives its full authorization and consent for (i) Purchaser to employ the
Potential Employees effective as of the Closing Date (the “Hire Date”),
and (ii) for the Potential Employees to accept and commence employment with
Purchaser on the Hire Date.  The Seller
agrees that it will assist Purchaser as reasonably requested in communicating
with the Potential Employees.  All
Potential Employees who accept employment with Purchaser will become employees
of Purchaser effective as of the Hire Date (each a “Hired Employee”).  Purchaser shall not terminate any Hired
Employees for a period of three (3) months after the Closing Date unless such
termination is for cause or Purchaser provides such employee severance benefits
comparable to severance benefits such employee would have received under an
applicable severance policy with Seller as of January 31, 2007.  Potential Employees who do not accept
employment with Purchaser will not become employees of the Purchaser and will
not be entitled to any employee severance benefit from either Seller or
Purchaser.

(c)           The Seller will be responsible
for (i) all amounts of wages, bonuses and other remuneration (including,
without limitation, discretionary benefits, incentive compensation and bonuses)
payable to (or accrued on Seller’s books for) Hired Employees with respect to
work performed prior to the Closing Date, regardless of whether such employee
is actively employed by the Seller on the date such payments are made to the
Seller’s other employees, (ii) any workers’ compensation claims, amounts
payable under any employee benefit plans, programs or arrangements maintained
by the Seller and other amounts payable on an ongoing basis to such Employees
in connection with events or incidents occurring prior to the Closing Date,
except to the extent that such amounts are paid under insurance, a trust,
contract or fund (iii)  fifty-percent of
any unused vacation pay, sick leave pay and floating holiday pay for 2007
earned by or granted to Hired Employees prior to the Closing Date (up to a
maximum of 40 hours for each exempt Hired Employee) except to the extent constituting
Assumed Liabilities or Additional Liabilities, and (iv) all retention,
change-of-control, severance payments or deferred compensation account
balances, including, without, limitation, seniority premiums and unpaid
holidays, if any, due to such Hired Employees as a result of the termination of
their employment

 35
 

 

with the Seller. The
Seller shall also be responsible for and shall pay any related payroll burden
(including, without limitation, FICA, IMSS and other employment taxes) with
respect to payments made under this Section 10.1(c).  Notwithstanding anything herein to the
contrary, and unless otherwise required under Seller’s employee benefit
policies or Law, Seller shall not be responsible for any “sick bank” pay
accumulated by any Hired Employee as of the close of business on the Closing
Date.

(d)           The Purchaser shall be solely
responsible for all wages, bonuses and other remuneration payable to the Hired
Employees with respect to work performed on and after the Closing Date,
including any amounts payable with respect to such period in respect of
vacation pay, sick leave pay and floating holiday pay, and any severance
payments payable to such Hired Employees in respect of their employment by the
Purchaser. The Purchaser shall also be responsible for and shall pay any
related payroll burden (including, without limitation, FICA, IMSS and other
employment taxes) with respect to payments made under this Section 10.1(d).

(e)           The Seller shall prior to or
on the Seller’s next payroll date, make all matching contributions that would
otherwise be made for the period prior to Closing (without regard to any
year-end employment requirements) with respect to the Hired Employees’
contributions to the NetBank, Inc. 401(k) Plan.

(f)            The Seller shall remain
solely responsible and liable for (i) satisfying the continuation coverage
requirements for group health plans under Part 6 of Subtitle B of Title I of
ERISA and Section 4980B of the Code (“COBRA”) for all of its former employees
(and their respective beneficiaries and dependents) who are receiving COBRA
continuation coverage as of the Severance Date and for all current and former
employees of the Seller (and their respective beneficiaries and dependents) who
are entitled to elect such coverage on account of a qualifying event occurring
on or before the Hire Date.

(g)           This Agreement is a covenant
between Purchaser and the Seller and shall not, in any manner, create any
contractual right of employment for any employee of the Seller.

(h)           Purchaser shall offer all senior management of Seller listed on Schedule
10.1(h) Purchaser’s standard senior management employment agreement in the
form of Exhibit 10.1(h).  To the
extent not inconsistent with the employment agreement, the provisions of
Section 10.1(a), (b) and (c) shall apply with respect to senior management.

ARTICLE XI

MISCELLANEOUS

11.1         Governing Law;
Resolution of Disputes.

(a)           This Agreement and any other
ancillary agreements to be entered into by and among the parties to this
Agreement pursuant hereto shall be governed by and construed in accordance with
the internal laws of the State of Delaware without reference to such state’s
principles of conflicts of law.

(b)           Except for claims for
injunctive or equitable relief or suit to compel compliance with the dispute resolution
process set forth in this Section 11.1, any dispute,

 36
 

 

controversy, or claim arising under or relating to
this Agreement or any breach or threatened breach hereof, including claims for
indemnification pursuant to Article IX (each an “Arbitrable Dispute”)
shall be resolved by final and binding arbitration administered by the American
Arbitration Association (“AAA”) under its Commercial Arbitration Rules,
subject to the following:

(i)            Any party may demand that any
Arbitrable Dispute be submitted to binding arbitration.  The demand for arbitration shall be in
writing, shall be served on the other parties in the manner prescribed herein
for the giving of notices, and shall set forth a short statement of the factual
basis for the claim, specifying the matter or matters to be arbitrated.

(ii)           The arbitration shall be conducted by
a panel of three arbitrators, one selected by the Purchaser, one selected by
the Seller and the third to be selected jointly by the arbitrators selected by
the Purchaser and the Seller (collectively, the “Arbitrators”) who shall
conduct such evidentiary or other hearings as they deem necessary or
appropriate and thereafter shall make their determination as soon as
practicable.  Any arbitration pursuant
hereto shall be conducted by the Arbitrators under the guidance of the Federal
Rules of Civil Procedure and the Federal Rules of Evidence, except that (i) the
Arbitrators shall not be required to comply strictly with such rules in
conducting any such arbitration and (ii) any arbitration shall include limited
discovery, as determined by the Arbitrators, with no depositions without the
written consent of the Purchaser and the Seller.  All arbitration proceedings shall take place
in Louisville, Kentucky if initiated by the Seller or Jacksonville, Florida if
initiated by the Purchaser or such other location as may be agreed by the
parties.

(c)           The Arbitrators shall have the
authority to award any remedy or relief that a Court of the jurisdiction in
which the arbitration is conducted could order or grant, including specific
performance of any obligation created under this Agreement, the awarding of
Damages, the issuance of an injunction, or the imposition of sanctions for
abuse or frustration of the arbitration process; provided, however, that the
Arbitrators shall have no authority to award punitive or other damages not
measured by the prevailing party’s actual damages.  The Arbitrators shall render their decision
and award upon the concurrence of at least two (2) of their number.  Such decision and award shall be in writing
and counterpart copies thereof shall be delivered to each party.  The decision and award of the Arbitrators
shall be final, binding and non-appealable (except upon an allegation of fraud)
on all parties.  Any party to the
arbitration may seek to have judgment upon the award rendered by the
Arbitrators entered in any court having jurisdiction thereof.

(d)           The award of the Arbitrators
shall be the sole and exclusive remedy among the parties hereto regarding any
claim, counterclaims or issues presented or pled to the Arbitrators.  Any monetary award by the Arbitrators shall
be paid by the party against whom such award is assessed within twenty (20)
Business Days after such award becomes final, free of any Tax, deduction or set-off.  To the extent not paid to whom such final
award is granted within twenty (20) Business Days, such award shall accrue
interest for the benefit of such party at a rate of ten percent (10%) per annum
from the date of award until such award and accrued interest is paid in full to
the party entitled thereto.  Any costs,
fees, expenses or taxes incident to the

 37
 

 

arbitration proceedings
and enforcing the award (including the costs of production of documents) shall
be charged against the party losing the arbitration proceedings or resisting
such enforcement, as the case may be, to the extent determined appropriate by
the Arbitrators.

(e)           Each party agrees that it will
not file any suit, motion, petition or otherwise commence any legal action or
proceeding for any matter which is required to be submitted to arbitration as
contemplated herein except in connection with the enforcement of an award
rendered by the Arbitrators.  Upon the
entry of an order dismissing or staying any action or proceeding filed contrary
to the preceding sentence, the party that filed such action or proceeding shall
promptly pay to the other party the attorney’s fees, costs and expenses
incurred by such other party prior to the entry of such order.

11.2         Jurisdiction.  SUBJECT TO THE PROVISIONS OF ARTICLE XI, EACH
OF THE PARTIES HERETO (I) CONSENTS TO SUBMIT ITSELF TO THE PERSONAL
JURISDICTION OF ANY FEDERAL OR STATE COURT LOCATED IN DUVAL COUNTY, FLORIDA IF
INITIATED BY THE PURCHASER OR JEFFERSON COUNTY, KENTUCKY IF INITIATED BY THE
SELLER (AND ELSEWHERE WITH RESPECT TO APPELLATE COURTS WITH JURISDICTION OVER
SUCH MATTER) IN THE EVENT ANY DISPUTE ARISES OUT OF THIS AGREEMENT OR ANY OF
THE TRANSACTIONS CONTEMPLATED HEREBY, (II) AGREES THAT IT WILL NOT ATTEMPT TO
DENY OR DEFEAT SUCH PERSONAL JURISDICTION BY MOTION OR OTHER REQUEST FOR LEAVE
FROM ANY SUCH COURT AND (III) AGREES THAT IT WILL NOT BRING ANY ACTION RELATING
TO THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY IN ANY COURT
OTHER THAN A FEDERAL OR STATE COURT SITTING IN DUVAL COUNTY, FLORIDA OR
JEFFERSON COUNTY, KENTUCKY, AS APPLICABLE.

11.3         Binding Upon Successors and Assigns.  Subject to, and unless otherwise provided in,
this Agreement, each and all of the covenants, terms, provisions, and
agreements contained herein shall be binding upon, and inure to the benefit of,
the permitted successors, executors, heirs, representatives, administrators and
assigns of the parties hereto.

11.4         Severability.  If any provision of this Agreement, or the
application thereof, shall for any reason and to any extent be invalid or
unenforceable, the remainder of this Agreement and application of such
provision to other Persons or circumstances shall be interpreted so as best to
effect reasonably the intent of the parties hereto.  The parties further agree to replace such
void or unenforceable provision of this Agreement with a valid and enforceable
provision which shall achieve, to the extent possible, the economic, business
and other purposes of the void or unenforceable provision.

11.5         Entire Agreement.  This Agreement (with all of the exhibits,
appendices and schedules appended hereto and thereto) and the documents and
instruments and other agreements among the parties hereto referenced herein
constitute the entire agreement among the parties with respect to the subject
matter hereof and supersede all prior agreements and understandings both
written and oral, among the parties with respect to the subject matter hereof;
provided, however, that the Confidentiality Agreement shall survive this Agreement
in accordance with its terms.

 38

11.6         Successors and
Assigns.  This Agreement is binding
upon and inures to the benefit of the parties to this Agreement and their
respective successors and assigns, but is not assignable by any of the parties
without the prior written consent of the other parties; provided, that, without
the consent of the Purchaser, the Seller may assign this Agreement or any part
thereof to any Affiliate of the Seller.

11.7         Third Party Beneficiaries.  Except as set forth in Article IX, each party
intends that this Agreement does not benefit or create any right or cause of
action in or on behalf of any Person other than the parties to this Agreement.

11.8         Counterparts.  This Agreement may be executed in any number
of counterparts, including counterparts transmitted by facsimile or electronic
transmission, each of which shall be 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 reflected
hereon as signatories.

11.9         Expenses.  Except as otherwise specifically provided
herein, all expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such expenses.

11.10       Amendment.  This
Agreement may be amended or modified only by an instrument in writing duly
executed by the parties to this Agreement.

11.11       Waiver.  At any time prior to the Closing, any party
hereto may (a) extend the time for or waive compliance with the performance of
any obligation or other act of any other party hereto, (b) waive any inaccuracy
in the representations and warranties contained herein or in any document
delivered pursuant hereto, and (c) waive compliance by the other party with any
of the agreements or conditions contained herein.  Any such extension or waiver shall be valid
if set forth in an instrument in writing signed by the party or parties to be
bound thereby.  Any waiver shall
constitute a waiver only with respect to the specific matter described in such
writing and shall in no way impair the rights of the party granting such waiver
in any other respect at any other time. 
Neither the waiver by any of the parties hereto of a breach of or a
default under any of the provisions of this Agreement, nor the failure by any
of the parties, on one or more occasions, to enforce any of the provisions of
this Agreement or to exercise any right or privilege hereunder, shall be
construed as a waiver of any other breach or default of a similar nature, or as
a waiver of any of such provision, right or privilege hereunder.

11.12       Notices.  Any notice provided for or permitted under
this Agreement shall be treated as having been given when (a) delivered
personally, (b) sent by commercial overnight courier with written
verification of receipt, or (c) mailed postage prepaid by certified or
registered mail, return receipt requested, to the party to be notified, at the address
set forth below, or at such other place of which the other party has been
notified in accordance with the provisions of this Section 11.12.

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  If to PAI or the Purchaser:

  	
   

  	
  Payment Alliance International, Inc. 

  11857 Commonwealth Drive 

  Louisville, KY 40299-2310 

  Attention: John J. Leehy, III, President

  
	
   

  	
   

  	
   

  
	
  With a copy (which
  shall 

  not constitute notice) to:

  	
   

  	
  Frost Brown Todd LLC 

  400 West Market Street, 32nd Floor
  Louisville, KY 40202 

  Attention: William G. Strench

  
	
   

  	
   

  	
   

  
	
  If to the Parent, the Owner or 

  the Seller:

  	
   

  	
  NetBank, Inc. 

  1019 Windward Ridge Parkway

  Alpharetta, GA 30005

  Attention: Legal Department

  
	
   

  	
   

  	
   

  
	
  With copy (which shall
  not

  constitute notice) to:

  	
   

  	
  Holland & Knight LLP

  50 North Laura Street, Suite 3900

  Jacksonville, Florida 32202

  Attention:James L. Main

  
	
   

  	
   

  	
   

  

Such notice shall be treated as having been received
upon actual receipt.

11.13       Construction of Agreement.  This Agreement has been negotiated by the
respective parties hereto and their attorneys, and the language hereof shall
not be construed for or against any party based on which party drafted any of
the provisions of this Agreement.  The
titles and headings herein are for reference purposes only and shall not in any
manner limit the construction of this Agreement which shall be considered as a
whole.  For purposes of this Agreement,
the words “include,” “includes,” and “including” shall be deemed to be followed
by “without limitation” whether or not they are in fact followed by such words
or words of similar import.

11.14       No Joint Venture.  Nothing contained in this Agreement shall be
deemed or construed as creating a joint venture or partnership between any of
the parties hereto.  No party is by
virtue of this Agreement authorized as an agent, employee or legal
representative of any other party.  No
party shall have the power to control the activities and operations of any
other and their status is, and at all times shall continue to be, that of
independent contractors with respect to each other.  No party shall have any power or authority to
bind or commit any other.  No party shall
hold itself out as having any authority or relationship in contravention of this
Section 11.14.

11.15       Pronouns.  All pronouns and any variations thereof shall
be deemed to refer to the masculine, feminine or neuter, singular or plural, as
the identity of the person, persons, entity or entities may require.

11.16       Specific
Performance.  Each of the parties
hereto acknowledges and agrees that the other parties would be damaged
irreparably in the event any of the provisions of this Agreement are not
performed in accordance with their specific terms or otherwise are breached. 

 40
 

Accordingly, each of the parties hereto agrees that the other parties
shall be entitled to an injunction or injunctions to prevent breaches of the
provisions of this Agreement and, subject to Section 11.2, to enforce
specifically this Agreement and the terms and provisions hereof in any court of
the United States or any state thereof having jurisdiction over the parties
hereto and the matter in addition to any other remedy to which they may be
entitled, at law or equity).

(This space intentionally left blank)

 41
 

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

	
  

  	
   

  	
  NETBANK PAYMENT SYSTEMS, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ De Lone Wilson

  
	
   

  	
   

  	
   

  	
  De Lone Wilson

  
	
   

  	
   

  	
   

  	
  President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  NETBANK

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Steven F. Herbert

  
	
   

  	
   

  	
   

  	
  Steven F. Herbert

  
	
   

  	
   

  	
   

  	
  President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  NETBANK, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Steven F. Herbert

  
	
   

  	
   

  	
   

  	
  Steven F. Herbert

  
	
   

  	
   

  	
   

  	
  Chief Executive Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  PAYMENT ALLIANCE INTERNATIONAL, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ John J. Leehy, III

  
	
   

  	
   

  	
   

  	
  John J. Leehy, III

  
	
   

  	
   

  	
   

  	
  President and Chief Executive Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  PAI ATM SERVICES, LLC

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ John J. Leehy, III

  
	
   

  	
   

  	
   

  	
  John J. Leehy, III

  
	
   

  	
   

  	
   

  	
  Manager and Chief Executive Officer

  
	
   

  	
   

  	
   

  	
   

  

 

 

 42

 

EXHIBIT A

CERTAIN DEFINITIONS

“AAA” shall have the meaning set forth in
Section 11.1(b).

“Accounts Receivables” shall mean all accounts
receivables due and payable to the Seller, whether or not written off on the
books of the Seller.

“Acquired Assets” shall have the meaning set
forth in Section 1.2.

“Advisor” shall have the meaning set forth in
Section 3.15

“Additional Assets” shall have the meaning set
forth in Section 1.2(l).

“Additional Liabilities” shall have the meaning
set forth in Section 1.4(d).

“Affiliate” shall mean (A) in the case of an
individual, the members of the immediate family (including parents, siblings
and children) of (i) the individual and (ii) the individual’s spouse,
and (iii) any Business Entity that directly or indirectly, through one or
more intermediaries controls, or is controlled by, or is under common control
with any of the foregoing individuals, or (B) in the case of a Business Entity,
another Business Entity or a Person that directly or indirectly, through one or
more intermediaries controls, or is controlled by, or is under common control
with the Business Entity.

“Agreement” shall have the meaning set forth in
the introductory paragraph.

“Allocation” shall have the meaning set forth
in Section 1.9.

“Alternative Transaction” shall have the
meaning set forth in Section 5.6.

“Arbitrable Dispute” shall have the meaning set
forth in Section 11.1(b).

“Arbitrators” shall have the meaning set forth
in Section 11.1(b)(ii).

“Assumed Contracts” shall have the meaning set
forth in Section 1.2(c).

“Assumed Liabilities” shall have the meaning
set forth in Section 1.4.

“Basis” shall mean any past or present fact,
situation, circumstance, status, condition, activity, practice, plan,
occurrence, event, incident, action, failure to act, or transaction that forms
or could form the basis for any specified consequence.

“Basket” shall have the meaning set forth in
Section 9.5(a).

“Business” shall have the meaning set forth in
the recitals to this Agreement.

 A-1
 

 

“Business Entity” shall mean any corporation
(including any non-profit corporation), general partnership, limited
partnership, limited liability partnership, joint venture, estate, trust,
company (including any limited liability company or joint stock company), firm
or other enterprise, association, organization or entity.

“Cash” shall mean cash and cash equivalents
(including money market accounts and equivalent short term investments)
calculated in accordance with GAAP.

 “CERCLA”
shall mean the federal Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended.

“Claim Notice” shall have the meaning set forth
in Section 9.3(a).

“Claimed Amount” shall have the meaning set
forth in Section 9.3(a).

“Closing” shall have the meaning set forth in
Section 2.1.

“Closing Date” shall have the meaning set forth
in Section 2.1.

“Closing Payment” shall have the meaning set
forth in Section 1.7(b).

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

“Confidentiality Agreement” shall mean that
certain Agreement dated as of December 12, 2006, by and between Owner and the
Purchaser.

“Consents” shall have the meaning set forth in
Section 3.22.

“Contracts” shall mean, with respect to any
Person, any executory contract, agreement, deed, mortgage, lease, license,
commitment, undertaking, arrangement or understanding, written or oral, or
other document or instrument to which or by which such Person is a party or
otherwise subject or bound or to which or by which any asset, property or right
of such Person is subject or bound, provided, however, that Contracts shall not
include Contracts which have otherwise been fully performed.

“Controlling Party” shall have the meaning set
forth in Section 9.3(d).

“Damages” shall mean (i) any actual monetary
loss, damage, injury, Liability, claim, demand, settlement, judgment, award,
fine, penalty, tax, fee (including fees and expenses of attorneys, accountants,
financial advisors and other experts and other expenses of litigation), charge,
costs (including reasonable costs of investigation) or reasonable expenses of
any nature.

“Deposit” shall have the meaning set forth in
Section 1.7.

“Employee Benefit Plan” shall mean any “employee
pension benefit plan” (as defined in Section 3(2) of ERISA), any “employee
welfare benefit plan” (as defined in Section 3(1) of ERISA), and any other
written or oral plan, agreement or arrangement involving direct or indirect
compensation or benefits, including insurance coverage, severance benefits,
change of 

 A-2
 

 

control, retention,
performance, holiday pay, vacation pay, paid time off, fringe benefit,
disability benefits, pension, retirement plans, profit sharing, deferred
compensation, bonuses, stock options, stock purchase, phantom stock, stock
appreciation or other forms of incentive compensation or post-retirement
compensation, that the Seller maintains, or to which the Seller contributes, or
under which the Seller has or may have any Liability.

 “Environmental
Law” shall mean any Law of any Governmental Entity or the common law
relating to the environment or occupational health and safety, including any
statute, regulation or order pertaining to (i) treatment, storage,
disposal, generation, transportation, manufacture, processing, use,
distribution or handling of toxic or hazardous substances or solid or hazardous
waste or pollutants, contaminants, chemicals or industrial, substances or oil
or petroleum products; (ii) air, water and noise pollution;
(iii) groundwater and soil contamination; (iv) the release or
threatened release into the environment of toxic or hazardous substances, or
solid or hazardous waste, including emissions, discharges, injections, spills,
escapes or dumping of pollutants, contaminants or chemicals; (v) the
protection of wild life, marine sanctuaries and wetlands, including all endangered
and threatened species; (vi) storage tanks, vessels and containers;
(vii) underground and other storage tanks or vessels, abandoned, disposed
or discarded barrels, containers and other closed receptacles; and
(viii) health and safety of employees and other Persons.  As used above, the terms “release” and “environment”
shall have the meaning set forth in the CERCLA.

“ERISA” shall mean the Employee Retirement
Income Security Act of 1974, as amended.

“Escrow Agent” shall mean Fifth Third Bank.

“Escrow Agreement” shall mean an Escrow
Agreement among Purchaser and the Escrow Agent pursuant to which the Deposit is
held and disbursed.

“Escrow Amount” shall mean the sum of all
amounts delivered to the Escrow Agent pursuant to Section 1.7 and pursuant to
the Escrow Agreement.

“Excluded Assets” shall have the meaning set
forth in Section 1.3.

“Excluded Liabilities” shall have the meaning
set forth in Section 1.5.

“Exclusivity Period” shall have the meaning set
forth in Section 5.6.

“Financial Statement Date” shall mean December
31, 2006.

“GAAP” shall mean generally accepted accounting
principles in the United States, consistently applied in accordance with the
past practice of the Seller to the extent such practices are consistent with
GAAP.

“Governmental Entity” shall mean any of the
following: (i) nation, state, commonwealth, province, territory, county,
municipality, district or other jurisdiction of any nature; (ii) federal,
state, local, municipal, foreign or other government; or
(iii) governmental or quasi-governmental authority of any nature
(including any governmental division, department,

 A-3
 

 

agency, commission,
instrumentality, official, organization, unit, body or entity and any court or
other tribunal).

“Hire Date” shall have the meaning set forth in
Section 10.1(b).

“Hired Employee” shall have the meaning set
forth in Section 10.1(b).

“Indemnified Party” shall have the meaning set
forth in Section 9.3(a).

“Indemnifying Party” shall have the meaning set
forth in Section 9.3(a).

“Insider” has the meaning set forth in Section
3.20.

“Intellectual Property” shall mean (i) all
patents, patent applications, patent disclosures and all related continuations,
continuations in part, divisionals, reissues, reexaminations, utility models,
certificates of invention and design patents, patent applications,
registrations and applications for registrations, (ii) all copyrights and
registrations and applications for registration thereof, (iii) all computer
software, data and documentation, internet domain names and registration rights,
uniform resource locators, internet or worldwide web sites and all related
content and programming, (iv) all trade secrets and confidential business
information, whether patentable or unpatentable and whether or not reduced to
practice, know-how, manufacturing and production processes and techniques,
research and development information, copyrightable works, financial, marketing
and business data, pricing and cost information, business and marketing plans
and customer and supplier lists and information, (v) all other proprietary
rights relating to any of the foregoing and (vi) all copies and tangible
embodiments thereof.  Intellectual
Property shall not include any NetBank trademarks, service marks, domain
names, trade dress, logos, trade names and corporate names and registrations
and applications for registration thereof, including the name “NetBank Payment
Systems” or “NetBank” and any derivative thereof and also shall not include
any Financial Technologies trademarks, service marks, domain names, trade
dress, logos, trade names and corporate names and registrations and
applications for registration thereof, including the name “Financial
Technologies” or “FTI” or any derivative thereof.

“Interim Financial Statements” shall have the
meaning set forth in Section 3.4(a).

“Knowledge” or words of similar import, shall
mean the actual knowledge or notice that a Person (a) currently has, (b) has
after having made a good faith effort to ascertain the fact in question
pursuant to an inquiry directed to such managers, members, officers, directors,
shareholders, supervisors, employees, representatives, agents and advisors of
such Person as would be reasonably likely to have information relating to the
fact in question, and (c) in the case of any failure to make such a good
faith effort, should have had after having made a good faith effort to
ascertain the fact in question pursuant to an inquiry directed to such
managers, members, officers, directors, shareholders, supervisors, employees,
representatives, agents and advisors of such Person as would be reasonably
likely to have information relating to the fact in question.

“Law” shall mean any federal, state, regional,
local or foreign law, constitution, rule, statute, ordinance, regulation,
order, code, judgment, charge, writ, injunction or decree.

 A-4
 

 

“Leased Real Property” shall have the meaning
set forth in Section 1.2(d).

“Legal Proceeding” shall mean any action, suit,
litigation, arbitration or proceeding (including any civil, criminal,
administrative, investigative or appellate proceeding), hearing, inquiry,
audit, examination or investigation commenced, brought, conducted or heard by
or before, or otherwise involving any court or other Governmental Entity or any
arbitrator or arbitration panel.

“Liability” shall mean any liability (whether
known or unknown, whether asserted or unasserted, whether absolute or
contingent, whether accrued or unaccrued, whether liquidated or unliquidated,
and whether due or to become due).

“Licenses” shall have the meaning set forth in
Section 3.16.

“Lien” means any mortgage, pledge, security
interest, encumbrance, charge or other lien (whether arising by contract or by
operation of law), other than (i) mechanic’s, materialmen’s and similar
liens arising or incurred in the Ordinary Course if the underlying obligations
are not delinquent, (ii) liens for Taxes that arise solely by operation of law
but are not yet due and payable; and (iii) liens set forth on Schedule A-5;
provided, that none of the foregoing will individually or in the aggregate
impair the continued use and operation of the Acquired Assets or materially
impair the value or marketability of the Acquired Assets.

“Material Adverse Change” shall mean an event
occurred that is or could reasonably be expected to be materially adverse to
the Business, the Acquired Assets, or the Assumed Liabilities, including,
without limitation, a material reduction in the Company’s revenues, margins or
other operating results for the month ending March 31, 2007 as compared to the
month ending February 28, 2007, other than as a result of any condition
occurring as a result of general economic or financial conditions.

“Material Contracts” shall have the meaning set
forth in Section 3.9(a).

“Material Customer” has the meaning set forth
in Section 3.21(a).

“Material Supplier” has the meaning set forth
in Section 3.21(b).

“Materials of Environmental Concern” shall mean
any chemicals, pollutants or contaminants, hazardous substances (as such term
is defined under CERCLA or any Environmental Law), solid wastes and hazardous
wastes (as such terms are defined under the federal Resources Conservation and
Recovery Act or any Environmental Law), toxic materials, oil or petroleum and
petroleum products or byproducts or constituents thereof, asbestos, or any other
material subject to regulation under any Environmental Law.

“Merchant Contracts” shall have the meaning set
forth in Section 3.9(c).

“Multiemployer Plan” shall have the meaning set
forth in Section 3(37) of ERISA.

“NetBank Name” shall have the meaning set forth
in Section 5.15.

 A-5
 

 

“Noncompete Period” shall have the meaning set
forth in Section 5.11(b).

“Non-controlling Party” shall have the meaning
set forth in Section 9.3(d).

“Objection Notice” shall have the meaning set
forth in Section 9.3(b).

“Ordinary Course” shall mean the ordinary
course of business of the Seller consistent with past custom and practice
(including with respect to frequency and amount).

“Owner” shall mean NetBank, a federal savings
bank and the parent company of the Seller.

“PAI” shall have the meaning set forth in the
introductory paragraph.

“Parent” shall have the meaning set forth in
the introductory paragraph.

“Permitted Encumbrances” shall mean liens for
Taxes not yet due and payable, encumbrances of the Leased Real Property and the
Real Property Lease which do not prevent Seller from using the Leased Real
Property for its present use, liens arising by statute for amounts not yet due
and payable and other similar liens and encumbrances which arise in the
Ordinary Course.

“Person” shall mean any individual, Business
Entity or Governmental Entity.

“Potential Employees” shall have the meaning
set forth in Section 10.1(a).

 “Purchaser”
shall have the meaning set forth in the introductory paragraph.

“Purchase Price” shall have the meaning set
forth in Section 1.6.

“Purchased ATMs” shall have the meaning set
forth in Section 3.17.

“Purchaser Indemnitees” shall have the meaning
set forth in Section 9.1.

“Real Property Lease” shall have the meaning
set forth in Section 1.2(d).

“Representatives” shall mean, with respect to
any Person, the partners, members, directors, officers, employees, agents or
other representatives of such specified Person, including financial advisors,
consultants and counsel.

“Response” shall have the meaning set forth in
Section 9.3(b).

“Seller” shall have the meaning set forth in
the introductory paragraph.

“Seller Financial Statements” shall have the
meaning set forth in Section 3.4.

“Seller Indemnitees” shall have the meaning set
forth in Section 9.2.

“Seller Intellectual Property” shall have the
meaning set forth in Section 3.10(b).

 A-6
 

 

“Seller’s Unlimited Representations” shall have
the meaning set forth in Section 9.4(b)

“Taxes” shall mean all taxes, and any and all
other charges, fees, levies, duties, deficiencies, customs or other similar
assessments or liabilities, including any income, gross receipts, ad valorem,
premium, value-added, excise, severance, escheat, stamp, occupation, windfall
profits, real property, personal property, sales, use, transfer, transfer gains,
withholding, employment, unemployment, insurance, social security, medicare,
business license, business organization, environmental, workers compensation,
payroll, profits, license, lease, service, service use, and franchise taxes,
imposed by any federal, state, local, or foreign government, or any agency or
political subdivision thereof; any interest, fines, penalties, assessments, or
additions resulting from, attributable to, or incurred in connection with any
items described in this paragraph or any contest or dispute thereof; any items
described in this paragraph that are attributable to another Person but that
the Seller is liable to pay by law, by contract, or otherwise; regardless of
whether disputed.

“Third Party Intellectual Property” shall have
the meaning set forth in Section 3.10(b).

“Transfer Taxes” shall have the meaning set
forth in Section 5.10(a).

 A-7

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