Document:

Ex-10.3

 

Exhibit 10.3

LANCE, INC.

1997 INCENTIVE EQUITY PLAN

(As amended through February 9, 2006)

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	Section 1.

	 	Purpose
	 	 	1	 
	 
	Section 2.

	 	Definitions
	 	 	1	 
	 
	Section 3.

	 	Administration
	 	 	3	 
	 
	Section 4.

	 	Duration of and Common Stock Subject to Plan
	 	 	4	 
	 
	Section 5.

	 	Eligibility
	 	 	4	 
	 
	Section 6.

	 	Stock Options
	 	 	4	 
	 
	Section 7.

	 	Stock Appreciation Rights
	 	 	5	 
	 
	Section 8.

	 	Restricted Awards
	 	 	6	 
	 
	Section 9.

	 	Performance Awards
	 	 	8	 
	 
	Section 10.

	 	Other Stock-Based and Combination Awards
	 	 	9	 
	 
	Section 11.

	 	Deferral Elections
	 	 	9	 
	 
	Section 12.

	 	Termination of Employment
	 	 	9	 
	 
	Section 13.

	 	Non-transferability of Awards
	 	 	10	 
	 
	Section 14.

	 	Adjustments Upon Changes in Capitalization, Etc.
	 	 	10	 
	 
	Section 15.

	 	Change in Control
	 	 	11	 
	 
	Section 16.

	 	Amendment and Termination
	 	 	12	 
	 
	Section 17.

	 	Miscellaneous
	 	 	12	 

 

 

LANCE, INC.

1997 INCENTIVE EQUITY PLAN

     Section 1. Purpose. The purpose of the Lance, Inc. 1997 Incentive Equity Plan (the “Plan”) is
to attract and retain managerial and other key employees, and to reward such employees for making
major contributions to the success of Lance, Inc. (the “Company”). The Plan is designed to meet
these objectives by offering performance-based stock and cash incentives and other equity-based
incentive awards, thereby providing such employees a proprietary interest in the long term growth
and performance of the Company.

     Section 2. Definitions. For purposes of the Plan, unless the context clearly indicates
otherwise, the following terms shall have the meanings set forth below:

     (a) “Award” (collectively, “Awards”) means an award or grant made to a
Participant under Sections 6 through 10, inclusive, of the Plan.

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

     (c) “Code” means the Internal Revenue Code of 1986, as in effect from time to
time, or any successor thereto, together with rules, regulations and interpretations
promulgated thereunder.

     (d) “Common Stock” means the $.83 1/3 par value Common Stock of the Company or
any security of the Company issued in substitution, exchange or lieu thereof
pursuant to Section 14 hereof.

     (e) “Company” means Lance, Inc., a North Carolina corporation, and any
subsidiary corporations within the meaning of Section 424(f) of the Code, as well as
any successor corporation or corporations thereto.

     (f) “Compensation Committee” means the committee of the Board constituted as
provided in Section 3 of the Plan.

     (g) “Disability” means the inability, by reason of physical or mental infirmity
or both, of an individual to perform satisfactorily the duties then assigned to such
individual or any other duties the Company is willing to assign to such individual
for which compensation is payable. Disability shall be determined by the
Compensation Committee based upon such evidence as the Compensation Committee shall
deem sufficient and, upon medical evidence, if available, and, in the discretion of
the Compensation Committee, upon certification of such Disability by an independent
qualified physician.

 

 

     (h) “Exchange Act” means the Securities Exchange Act of 1934, as amended and in
effect from time to time, or any successor statute.

     (i) “Fair Market Value,” with respect to a share of the Common Stock at a
particular time, shall be that value as determined by the Compensation Committee
which shall be (i) if such Common Stock is listed on a national securities exchange
or traded on the National Market System, the mean between the highest price and the
lowest price at which the Common Stock shall have been sold regular way on a
national securities exchange or the National Market System on said date, or, if no
sales occur on said date, then on the next preceding date on which there were such
sales of Common Stock, (ii) if the Common Stock shall not be listed on a national
securities exchange or traded on the National Market System, the mean between the
bid and asked prices last reported by the National Association of Securities
Dealers, Inc. for the over-the-counter market on said date or, if no bid and asked
prices are reported on said date, then on the next preceding date on which there
were such quotations, or (iii) if at any time quotations for the Common Stock shall
not be reported by the National Association of Securities Dealers, Inc. for the
over-the-counter market and the Common Stock shall not be listed on any national
securities exchange or traded on the National Market System, the fair market value
determined by the Compensation Committee in such manner as it may deem reasonable.

     (j) “Incentive Stock Option” means any Stock Option granted pursuant to the
provisions of Section 6 of the Plan that is intended to be and is specifically
designated as an “incentive stock option” within the meaning of Section 422 of the
Code.

     (k) “Non-Qualified Stock Option” means any Stock Option granted pursuant to the
provisions of Section 6 of the Plan that is not an Incentive Stock Option.

     (l) “Participant” means an employee of the Company who is granted an Award
under the Plan.

     (m) “Performance Award” means an Award granted pursuant to the provisions of
Section 9 of the Plan the vesting of which is contingent on performance attainment.

     (n) “Performance Equity Grant” means an Award of units representing shares of
Common Stock granted pursuant to the provisions of Section 9 of the Plan.

     (o) “Performance Unit Grant” means an Award of monetary units granted pursuant
to the provisions of Section 9 of the Plan.

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     (p) “Plan” means the Lance, Inc. 1997 Incentive Equity Plan as set forth
herein, as the same may be hereafter amended and from time to time in effect.

     (q) “Restricted Award” means an Award granted pursuant to the provisions of
Section 8 of the Plan.

     (r) “Restricted Stock Grant” means an Award of shares of Common Stock granted
pursuant to the provisions of Section 8 of the Plan.

     (s) “Restricted Unit Grant” means an Award of units representing shares of
Common Stock granted pursuant to the provisions of Section 8 of the Plan.

     (t) “Retirement” means the termination of an employee’s employment with the
Company at any time after the last day of the calendar month immediately preceding
the calendar month in which the employee attains the age of 60 years.

     (u) “Stock Appreciation Right” means an Award to benefit from the appreciation
of Common Stock granted pursuant to the provisions of Section 7 of the Plan.

     (v) “Stock Option” means an Award to purchase shares of Common Stock granted
pursuant to the provisions of Section 6 of the Plan.

     (w) “First Effective Amendment Date” means that date on which the stockholders
of the Company approve the amendment to the Plan to increase the number of shares of
Common Stock reserved for grants of Awards under the Plan by an additional 1,500,000
shares of Common Stock.

     Section 3. Administration.

     (a) The Plan shall be administered by those members of the Compensation Committee of the Board
who are “nonemployee directors” for purposes of Rule 16b-3 under the Exchange Act.

     (b) The Compensation Committee is authorized to grant Awards under the Plan, to construe and
interpret the Plan, to promulgate, amend and rescind rules and regulations relating to the
implementation of the Plan, and to make all other determinations necessary or advisable for the
administration of the Plan. Any determination, decision or action of the Compensation Committee in
connection with the construction, interpretation, administration or application of the Plan shall
be final, conclusive and binding upon all persons participating in the Plan and any person validly
claiming under or through persons participating in the Plan. The Company shall effect the granting
of Awards under the Plan in accordance with the determinations made by the

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Compensation Committee, by execution of instruments in writing in such form as are approved by the
Compensation Committee.

     Section 4. Duration of and Common Stock Subject to Plan.

     (a) Term. The Plan shall be effective on April 18, 1997, subject to approval by a plurality
of the shares voting on approval of the Plan at the Annual Meeting of Stockholders held on said
date or any adjournment thereof. The Plan shall terminate on March 31, 2007.

     (b) Shares of Common Stock Subject to Plan. The maximum number of shares of Common Stock with
respect to which Awards may be granted under the Plan, subject to adjustment as provided in Section
14 of the Plan, shall be 1,500,000 shares of the total authorized shares of the Common Stock.
Beginning on the First Effective Amendment Date, there is hereby reserved for grants of Awards
under the Plan, subject to adjustment as provided in Section 14 of the Plan, an additional
1,500,000 shares of Common Stock. For the purpose of computing the total number of shares of
Common Stock available for Awards under the Plan, there shall be counted against the foregoing
limitation the number of shares of Common Stock subject to issuance upon exercise or settlement of
Awards and the number of shares of Common Stock which equal the value of Restricted Unit Grants and
Performance Equity Grants and other stock-based Awards in each case determined as of the dates on
which such Awards are granted. If any Awards are forfeited, terminated, settled in cash in lieu of
stock, exchanged for other Awards, or expire unexercised, the shares of Common Stock which were
theretofore subject to such Awards shall again be available for Awards under the Plan to the extent
of such forfeiture, termination, settlement, exchange or expiration. Further, any shares of Common
Stock which are used as full or partial payment to the Company by a Participant of the purchase
price of shares of Common Stock upon exercise of Stock Options shall again be available for Awards
under the Plan, as shall any shares covered by Stock Appreciation Rights which are not issued as
payment upon exercise. Common Stock which may be issued under the Plan may be either authorized
and unissued shares or issued shares which have been reacquired by the Company. No fractional
shares of Common Stock shall be issued under the Plan.

     (c) Individual Award Limit. In no event shall a Participant receive an Award or Awards during
any one calendar year covering in the aggregate more than 150,000 shares of Common Stock.

     Section 5. Eligibility. Only managerial and other key employees shall be eligible to be
granted Awards under the Plan. The Compensation Committee shall, from time to time, (i) determine
those managerial and other key employees to whom Awards shall be granted and the conditions of each
such Award or issue and sale and (ii) grant such Awards. No member of the Compensation Committee
while serving as such shall be eligible to receive any Award hereunder.

     Section 6. Stock Options. Stock Options may be granted under the Plan in the form of
Incentive Stock Options or Non-Qualified Stock Options; and such Stock Options shall be subject to
the following terms and conditions and shall contain such additional
terms and

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conditions, not inconsistent with the
express provisions of the Plan, as the Compensation Committee shall determine:

     (a) Grant. Stock Options may be granted under the Plan on such terms and
conditions not inconsistent with the provisions of the Plan and in such form as the
Compensation Committee may from time to time approve. Stock Options may be granted
alone, in addition to or in combination with other Awards under the Plan.

     (b) Stock Option Price. The option exercise price per share of Common Stock
purchasable under a Stock Option shall be determined by the Compensation Committee
at the time of grant, but in no event shall the exercise price of an Incentive Stock
Option be less than 100% of the Fair Market Value of the Common Stock on the date of
the grant of such Incentive Stock Option.

     (c) Option Term. The term of each Stock Option shall be fixed by the
Compensation Committee; except that the term of Incentive Stock Options shall not
exceed 10 years after the date the Incentive Stock Option is granted.

     (d) Exercisability. A Stock Option shall be exercisable at such time or times
and subject to such terms and conditions as shall be determined by the Compensation
Committee at the date of grant.

     (e) Method of Exercise. A Stock Option may be exercised, in whole or in part,
by a Participant’s giving written notice of exercise to the Company specifying the
number of shares to be purchased. Such notice shall be accompanied by payment in
full of the purchase price in cash or, if acceptable to the Compensation Committee
in its sole discretion, in shares of Common Stock already owned by the Participant,
or by surrendering outstanding Awards denominated in stock or stock units.

     (f) Special Rule for Incentive Stock Options. With respect to Incentive Stock
Options granted under the Plan, the aggregate Fair Market Value (determined as of
the date the Incentive Stock Option is granted) of the number of shares with respect
to which Incentive Stock Options are exercisable for the first time by a Participant
during any calendar year shall not exceed $100,000 or such other limit as may be
required by the Code.

     Section 7. Stock Appreciation Rights. Stock Appreciation Rights may be granted under the Plan
subject to the following terms and conditions and shall contain such additional terms and
conditions, not inconsistent with the express terms of the Plan, as the Compensation Committee
shall determine:

     (a) Stock Appreciation Rights. A Stock Appreciation Right is an Award
entitling a Participant to receive an amount equal to (or if the Compensation
Committee shall so determine at the time of grant, less than) the

5

 

excess of the Fair Market Value of a share of Common Stock on the date of exercise
over the Fair Market Value of a share of Common Stock on the date of grant of the
Stock Appreciation Right, or such other price as is set by the Compensation
Committee, multiplied by the number of shares of Common Stock with respect to which
the Stock Appreciation Right shall have been exercised.

     (b) Grant. A Stock Appreciation Right may be granted in combination with, in
addition to or completely independent of a Stock Option or any other Award under the
Plan.

     (c) Exercise. A Stock Appreciation Right may be exercised by a Participant in
accordance with procedures established by the Compensation Committee, except that in
no event shall a Stock Appreciation Right be exercisable within the first six months
after the date of grant. The Compensation Committee may also provide that a Stock
Appreciation Right shall be automatically exercised on one or more specified dates.

     (d) Form of Payment. Payment upon exercise of a Stock Appreciation Right may
be made in cash, in shares of Common Stock, or any combination thereof, as the
Compensation Committee shall determine; provided, however, that any Stock
Appreciation Right exercised upon or subsequent to the occurrence of a Change in
Control (as defined in Section 15) shall be paid in cash.

     Section 8. Restricted Awards. Restricted Awards may be granted under the Plan in the form of
either Restricted Stock Grants or Restricted Unit Grants. Restricted Awards shall be subject to
the following terms and conditions and shall contain such additional terms and conditions, not
inconsistent with the express provisions of the Plan, as the Compensation Committee shall
determine:

     (a) Restricted Stock Grants. A Restricted Stock Grant is an Award of shares of
Common Stock to a Participant subject to such terms and conditions as the
Compensation Committee deems appropriate, including, without limitation,
restrictions on the sale, assignment, transfer or other disposition of such shares
and the requirement that the Participant forfeit such shares back to the Company
upon termination of employment prior to vesting.

     (b) Restricted Unit Grants. A Restricted Unit Grant is an Award of units to be
paid in cash upon vesting (with each unit having a value equivalent to the Fair
Market Value of one share of Common Stock) granted to a Participant subject to such
terms and conditions as the Compensation Committee deems appropriate, including,
without limitation, the requirement that the Participant forfeit such units upon
termination of employment prior to vesting.

     (c) Grants of Awards. Restricted Awards may be granted under the Plan in such
form and on such terms and conditions as the Compensation Committee may from time to
time approve. Restricted Awards may be granted

6

 

alone, in addition to or in combination with other Awards under the Plan. Subject
to the terms of the Plan, the Compensation Committee shall determine the number of
Restricted Awards to be granted to a Participant and the Compensation Committee may
impose different terms and conditions on any particular Restricted Award made to any
Participant. Each Participant receiving a Restricted Stock Grant shall be issued a
stock certificate in respect of such shares of Common Stock. Such certificate shall
be registered in the name of such Participant, shall be accompanied by a stock power
duly executed by such Participant, and shall bear an appropriate legend referring to
the terms, conditions and restrictions applicable to such Award; which certificate
evidencing such shares shall be held in custody by the Company until the
restrictions thereon shall have lapsed.

     (d) Restriction Period. Restricted Awards shall provide that in order for a
Participant’s rights to vest in such Awards, the Participant must remain in the
employment of the Company, subject to relief for specified reasons, for a period of
time commencing on the date of the Award and ending on such later date or dates as
the Compensation Committee may designate at the time of the Award (“Restriction
Period”). During the Restriction Period, a Participant may not sell, assign,
transfer, pledge, encumber or otherwise dispose of shares of Common Stock received
under a Restricted Stock Grant. The Compensation Committee, in its sole discretion,
may provide for the lapse of restrictions in installments during the Restriction
Period. Upon expiration of the applicable Restriction Period (or lapse of
restrictions during the Restriction Period where the restrictions lapse in
installments), the Participant shall be entitled to receive his or her Restricted
Award or portion thereof, as the case may be.

     (e) Payment of Awards. A Participant shall be entitled to receive payment for
a Restricted Unit Grant (or portion thereof) upon expiration of the applicable
Restriction Period. Payment in settlement of a Restricted Unit Grant shall be made
as soon as practicable following the expiration of the Restriction Period in cash,
in shares of Common Stock equal to the number of units granted under the Restricted
Unit Grant with respect to which such payment is made, or in any combination
thereof, as the Compensation Committee in its sole discretion shall determine. The
Compensation Committee may also, in its discretion, permit a Participant to elect to
receive, in lieu of shares of unrestricted stock at the conclusion of a Restriction
Period, a cash payment equal to the Fair Market Value of the Restricted Stock
vesting on the date the restrictions expire.

     (f) Rights as a Stockholder. A Participant shall have, with respect to the
shares of Common Stock received under a Restricted Stock Grant, all of the rights of
a Stockholder of the Company, including the right to vote the shares, and the right
to receive any cash dividends. Stock dividends issued with respect to the shares
covered by a Restricted Stock Grant shall be treated as additional shares under the
Restricted Stock Grant and shall be subject to the same restrictions and

7

 

other terms and conditions that apply to shares under the Restricted Stock Grant
with respect to which such dividends are issued.

     Section 9. Performance Awards. Performance Awards may be granted under the Plan in the form
of either Performance Equity Grants or Performance Unit Grants. Performance Awards may be subject
to the following terms and conditions and may contain such additional terms and conditions, not
inconsistent with the express provisions of the Plan, as the Compensation Committee shall
determine:

     (a) Performance Equity Grants. A Performance Equity Grant is an Award of units
(with each unit equivalent in value to one share of Common Stock as it varies
throughout the term of the designated performance period) to a Participant and may
be subject to such terms and conditions as the Compensation Committee deems
appropriate, including, without limitation, the requirement that the Participant
forfeit such units or a portion of such units in the event certain performance
criteria are not met within a designated period of time.

     (b) Performance Unit Grants. A Performance Unit Grant is an Award of units to
be paid in cash upon vesting (with each unit representing such monetary amount as
designated by the Compensation Committee) to a Participant subject to such terms and
conditions as the Compensation Committee deems appropriate, including, without
limitation, the requirement that the Participant forfeit such units or a portion of
such units in the event certain performance criteria are not met within a designated
period of time.

     (c) Grants of Awards. Performance Awards may be granted under the Plan in such
form as the Compensation Committee may from time to time approve. Performance
Awards may be granted alone, in addition to or in combination with other Awards
under the Plan. Subject to the terms of the Plan, the Compensation Committee shall
determine the number of Performance Awards to be granted to a Participant and the
Compensation Committee may impose different terms and conditions on any particular
Performance Award made to any Participant.

     (d) Performance Goals and Performance Periods. Performance Awards shall
provide that in order for a Participant’s rights to vest in such Awards the Company
or the Participant, or a combination thereof, must achieve certain performance goals
(“Performance Goals”) over a designated performance period (“Performance Period”).
The Performance Goals and Performance Period shall be established by the
Compensation Committee, in its sole discretion. The Compensation Committee shall
establish Performance Goals for each Performance Period before, or as soon as
practicable after, the commencement of the Performance Period. The Compensation
Committee may also establish a schedule or formula for such Performance Period
setting forth the portion of the Performance Award which will be earned or forfeited
based on the degree of achievement of the Performance Goals actually achieved or
exceeded. In setting

8

 

Performance Goals, the Compensation Committee may use such measures of performance
as it deems appropriate.

     (e) Payment of Awards. In the case of a Performance Equity Grant, the
Participant shall be entitled to receive payment for each unit earned in an amount
equal to the Fair Market Value of a share of Common Stock on the date on which the
Compensation Committee determines the number of units earned by the Participant. In
the case of a Performance Unit Grant, the Participant shall be entitled to receive
payment for each unit earned in an amount equal to the dollar value of each unit
times the number of units earned. Payment in settlement of a Performance Award
shall be made as soon as practicable following the conclusion of the respective
Performance Period in cash, in shares of Common Stock, or in any combination
thereof, as the Compensation Committee in its sole discretion shall determine.

     Section 10. Other Stock-Based and Combination Awards.

     (a) The Compensation Committee may grant other Awards under the Plan pursuant to which Common
Stock is or may in the future be acquired, or Awards denominated in stock units, including ones
valued using measures other than market value. Such other stock-based Awards may be granted either
alone, in addition to or in combination with any other type of Award granted under the Plan.

     (b) The Compensation Committee may also grant Awards under the Plan in combination with other
Awards or in exchange of Awards, or in combination with or as alternatives to grants or rights
under any other employee plan of the Company, including the plan of any acquired entity.

     (c) Subject to the provisions of the Plan, the Compensation Committee shall have authority to
determine the individuals to whom and the time or times at which such Awards shall be made, the
number of shares of Common Stock to be granted or covered pursuant to such Awards, and any and all
other conditions and/or terms of the Awards.

     Section 11. Deferral Elections. The Compensation Committee may permit a Participant to elect
to defer his or her receipt of the payment of cash or the delivery of shares of Common Stock that
would otherwise be due to such Participant by virtue of the exercise or earn out of an Award made
under the Plan. If any such election is permitted, the Compensation Committee may establish rules
and procedures for such payment deferrals, including the possible (a) payment or crediting of
reasonable interest on such deferred amounts credited in cash, and (b) the payment or crediting
dividend equivalents in respect of deferrals credited in units of Common Stock.

     Section 12. Termination of Employment. The terms and conditions under which an Award may be
exercised after a Participant’s termination of employment shall be determined by the Compensation
Committee.

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     Section 13. Non-transferability of Awards. No Award under the Plan, and no rights or
interests therein, shall be assignable or transferable by a Participant except by will or the laws
of descent and distribution. During the lifetime of a Participant, Stock Options and Stock
Appreciation Rights are exercisable only by, and payments in settlement of Awards will be payable
only to, the Participant or his or her legal representative.

     Section 14. Adjustments Upon Changes in Capitalization, Etc.

     (a) The existence of the Plan and the Awards granted hereunder shall not affect or restrict in
any way the right or power of the Board or the Stockholders of the Company to make or authorize any
adjustment, recapitalization, reorganization or other change in the Company’s capital structure or
its business, any merger or consolidation of the Company, any issue of bonds, other debentures,
preferred or prior preference stocks, the dissolution or liquidation of the Company or any sale or
transfer of all or any part of its assets or business, or any other corporate act or proceeding.

     (b) In the event that a dividend shall be declared upon the Common Stock payable in shares of
Common Stock, the number of shares of Common Stock then subject to any Award and the number of
shares reserved for issuance pursuant to the Plan but not yet covered by an Award shall be adjusted
by adding to each such share the number of shares which would be distributable thereon if such
share had been outstanding on the date fixed for determining the Stockholders entitled to receive
such stock dividend. In the event that the outstanding shares of Common Stock shall be changed
into or exchanged for a different number or kind of shares of stock or other securities of the
Company or of another corporation, or changed into or exchanged for cash or property or the right
to receive cash or property (but not including any dividend payable in cash or property other than
a liquidating distribution), whether through reorganization, recapitalization, stock split-up,
combination of shares, merger or consolidation, then there shall be substituted for each share of
Common Stock subject to any Award and for each share of Common Stock reserved for issuance pursuant
to the Plan but not yet covered by an Award, the number and kind of shares of stock or other
securities or cash or property or right to receive cash or property into which each outstanding
share of Common Stock shall be so changed or for which each such share shall be exchanged. In the
event there shall be any change other than as specified above in this Section 14, in the number or
kind of outstanding shares of Common Stock or of any stock or other securities into which such
Common Stock shall have been changed or for which it shall have been exchanged, then if the
Compensation Committee shall in its sole discretion determine that such change equitably requires
an adjustment in the number or kind of shares theretofore reserved for issuance pursuant to the
Plan but not yet covered by an Award and of the shares then subject to an Award or Awards, such
adjustment shall be made by the Compensation Committee and shall be effective and binding for all
purposes of the Plan and each agreement entered into with a Participant under the Plan. In the
case of any such substitution or adjustment as provided for in this Section 14, the Award price for
each share covered thereby prior to such substitution or adjustment will be the Award price for all
shares of stock or other securities or cash or property or right to receive cash or property which
shall have been substituted for such share or to which such share shall have been adjusted pursuant
to this
Section 14. No adjustment or substitution provided for in this Section 14 shall require the
Company in any agreement with a Participant to issue a fractional share and the total substitution

10

 

or adjustment with respect to each agreement with a Participant shall be limited accordingly. In
the event that the number of shares of Common Stock subject to an Award is adjusted pursuant to the
provisions of this Section 14, then any Stock Appreciation Rights related to such Award shall be
appropriately and equitably adjusted.

     (c) In the event of (i) a dissolution or liquidation of the Company, (ii) a sale of all or
substantially all of the Company’s assets, (iii) a merger or consolidation involving the Company in
which the Company is not the surviving corporation or (iv) a merger or consolidation involving the
Company in which the Company is the surviving corporation but the holders of shares of the
Company’s Common Stock receive securities of another corporation and/or other property, including
cash, the Compensation Committee shall, in its absolute discretion, have the power to cancel,
effective immediately prior to the occurrence of such event, each Stock Option and each Stock
Appreciation Right outstanding immediately prior to such event (whether or not then exercisable)
and, in consideration of such cancellation, the Company will pay to the Participant an amount in
cash for each share of Common Stock subject to such Stock Option or Stock Appreciation Right equal
to the excess of (A) the value as determined by the Compensation Committee, in its absolute
discretion, of the property (including cash) received by the holder of one share of Common Stock as
a result of such event over (B) the exercise price of such Stock Option or Stock Appreciation
Right; or provide for the exchange of each Stock Option and Stock Appreciation Right outstanding
immediately prior to such event (whether or not then exercisable) for an option on or stock
appreciation right with respect to, as appropriate, some or all of the property which a holder of
the number of shares of Common Stock subject to such Stock Option or Stock Appreciation Right would
have received in such transaction and, incident thereto, make an equitable adjustment as determined
by the Compensation Committee, in its absolute discretion, in the exercise price of the option or
stock appreciation right, or the number of shares or amount of property subject to the option or
stock appreciation right or, if appropriate, provide for a cash payment to the Participant to whom
such Stock Option or Stock Appreciation Right was granted in partial consideration for the exchange
of the Stock Option or Stock Appreciation Right.

     Section 15. Change in Control.

     (a) In the event of a Change in Control (as defined below) of the Company, (i) all Stock
Options or Stock Appreciation Rights then outstanding shall become fully exercisable as of the date
of the Change in Control, whether or not then exercisable, (ii) all restrictions and conditions of
all Restricted Stock Grants and Restricted Unit Grants then outstanding shall be deemed satisfied
as of the date of the Change in Control, and (iii) all Performance Equity Grants and Performance
Unit Grants shall be deemed to have been fully earned as of the date of the Change in Control.

     (b) “Change in Control” means the acquisition or contracting to acquire or otherwise control
beneficial ownership of in excess of thirty-five percent (35%) of the then outstanding voting
securities of the Company by any person, corporation or other entity and its “affiliates”
(as defined in Rule 13d-5(b)(1) promulgated under the Exchange Act, as amended from time to time)
excluding, however, for purposes of determining such ownership (but not the number of shares
outstanding) voting securities beneficially owned by members of the Van Every Family

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and any trust,
custodian or fiduciary account for the benefit of any one or more members of the Van Every Family.
Van Every Family means the lineal descendants of Salem A. Van Every, Sr. (whether by blood or
adoption) and their spouses.

     Section 16. Amendment and Termination. Without further approval of the Stockholders, the Board
may at any time terminate the Plan, or may amend it from time to time in such respects as the Board
may deem advisable, except that the Board may not, without approval of the Stockholders, make any
amendment which would (i) require Stockholder approval for Incentive Stock Options granted or to be
granted under the Plan to qualify as incentive stock options within the meaning of Section 422 of
the Code or (ii) require Stockholder approval under applicable law or the rules of any national
securities exchange upon which the Common Stock is listed at the time such amendment is proposed.

     Section 17. Miscellaneous.

     (a) Tax Withholding. The Company shall have the right to deduct from any settlement,
including the delivery or vesting of shares, made under the Plan any federal, state or local taxes
of any kind required by law to be withheld with respect to such payments or to take such other
action as may be necessary in the opinion of the Company to satisfy all obligations for the payment
of such taxes. If Common Stock is used to satisfy tax withholding, such stock shall be valued
based on the Fair Market Value when the tax withholding is required to be made.

     (b) No Right To Employment. Neither the adoption of the Plan nor the granting of any Award
hereunder shall confer upon any employee of the Company any right to continued employment with the
Company, nor shall it interfere in any way with the right of the Company to terminate the
employment of any of its employees at any time, with or without cause.

     (c) Unfunded Plan. The Plan shall be unfunded and the Company shall not be required to
segregate any assets that may at any time be represented by Awards under the Plan. Any liability
of the Company to any person with respect to any Award under the Plan shall be based solely upon
any contractual obligations that may be effected pursuant to the Plan. No such obligation of the
Company shall be deemed to be secured by any pledge of, or other encumbrance on, any property of
the Company.

     (d) Payments to Trust. The Compensation Committee is authorized to cause to be established a
trust agreement or several trust agreements whereunder the Company may make payments of amounts due
or to become due to Participants in the Plan.

     (e) Engaging in Competition With Company. In the event a Participant’s employment with the
Company is terminated for any reason whatsoever, and within 18 months after the date thereof such
Participant accepts employment with any competitor of, or otherwise engages in competition with,
the Company, the Compensation Committee, in its sole discretion,
may require such Participant to return to the Company the economic value of any Award which is
realized or obtained (measured at the date of exercise, vesting or payment) by such Participant at
any time during the period beginning on that date which is six months prior to the date of such
Participant’s termination of employment with the Company.

12

 

     (f) Securities Law Restrictions. No shares of Common Stock shall be issued under the Plan
unless counsel for the Company shall be satisfied that such issuance will be in compliance with
applicable Federal and state securities laws. Certificates for shares of Common Stock delivered
under the Plan may be subject to such stop-transfer orders and other restrictions as the
Compensation Committee may deem advisable under the rules, regulations, and other requirements of
the Securities and Exchange Commission, any stock exchange upon which the Common Stock is then
listed, and any applicable federal or state securities law. The Compensation Committee may cause a
legend or legends to be put on any such certificates to make appropriate reference to such
restrictions.

     (g) Award Agreement. Each Participant receiving an Award under the Plan shall enter into an
agreement with the Company in a form specified by the Compensation Committee agreeing to the terms
and conditions of the Award and such related matters as the Compensation Committee shall, in its
sole discretion, determine.

     (h) Costs of Plan. The costs and expenses of administering the Plan shall be borne by the
Company.

     (i) Governing Law. The Plan and all actions taken thereunder shall be governed by and
construed in accordance with the laws of the State of North Carolina.

13<PAGE>

                                                                    EXHIBIT 10.1

                          WAREHOUSING CREDIT AGREEMENT

     This Warehousing Credit Agreement (this "Agreement"), dated as of April 19,
2006, is by and between EBANK MORTGAGE, LLC, a Georgia limited liability company
(the "Borrower"), and U.S. BANK NATIONAL ASSOCIATION, a national banking
association (the "Bank").

                                   ARTICLE I
                        DEFINITIONS AND ACCOUNTING TERMS

          1.01 Definitions. As used herein, in each exhibit hereto and in each
other Loan Document (unless otherwise expressly defined therein), the following
terms shall have the following respective meanings (such terms to be equally
applicable to both the singular and plural forms of the terms defined):

     "Adjusted Collected Deposit Balances": the average net daily collected
deposit balances of the Borrower on interest-free deposit with the Bank after
deduction of balances necessary according to the Bank's analysis to compensate
the Bank for activity charges on the Borrower's accounts and for assessments
payable with respect to such balances by the Bank to the Federal Deposit
Insurance Corporation for insuring of time deposits in dollars made at the
domestic offices of the Bank.

     "Affiliate": with respect to any Person, any other Person directly or
indirectly controlling, controlled by, or under common control with such Person,
whether through the ownership of voting securities, by contract or otherwise.

     "Authorized Persons": each of those persons named on Exhibit B, as the same
may be amended from time to time.

     "Borrowing Base": at the time of determination, an amount equal to 100% of
the Collateral Value of the Collateral; provided, however, that such amount
shall exclude all Collateral which has lost its Collateral Value as provided in
Exhibit A hereto.

     "Business Day": a day on which the Bank is open for the transaction of
business in Minneapolis, Minnesota.

     "Collateral": as defined in the Pledge and Security Agreement.

     "Collateral Value": on the date of any determination, with respect to the
Collateral as determined by the Bank in accordance with Exhibit A hereto.

     "Confirmation of Borrowing/Paydown": a confirmation in the form of Exhibit
C.

     "Compliance Certificate": a Certificate substantially in the form of
Exhibit D, duly completed,, as delivered to the Bank periodically under the
terms of Section 5.01(c).

<PAGE>

     "Current Members' Interests": ownership by (a) Madison Mortgage Corporation
of 49% of the membership interest of the Borrower, and (b) ebank of 51% of the
membership interest of the Borrower.

     "Default": an event which would be an Event of Default with the passage of
time or the giving of notice.

     "Event of Default": as defined in Section 7.01.

     "FHA": the Federal Housing Administration, or it successor.

     "FHLMC": the Federal Home Loan Mortgage Corporation, or its successor.

     "FNMA": the Federal National Mortgage Association, or its successor.

     "Funding and Settlement Account": account number 104756215559 of the
Borrower maintained with the Bank, which account shall be under the sole
dominion and control of the Bank.

     "GAAP": generally accepted accounting principles consistently applied and
maintained throughout the period indicated, except for changes mandated by the
Financial Accounting Standard Board or similar accounting authority of
comparable standing.

     "GNMA": the Government National Mortgage Association, or its successor.

     "Guaranty": A joint and several (limited) Guaranty by the Guarantors in the
form provided by the Bank to the Guarantors, as amended, modified or replaced
from time to time.

     "Guarantors": Madison Mortgage Corporation and ebank Financial Services,
Inc., and each of their corporate successors.

     "Immediately Available Funds": funds with good value on the day and in the
city in which payment is received.

     "Investor": as defined in Exhibit A hereto.

     "Leverage Ratio": at the time of any determination, the ratio of (a) Total
Liabilities to (b) member's equity (determined in accordance with GAAP).

     "Loan(s)": the ownership of, or participation in the ownership of, a
promissory note or other similar instrument evidencing indebtedness.

     "Loan Documents": this Agreement, the Warehousing Note, the Pledge and
Security Agreement, the Guaranties, UCC-1 Financing Statements and the other
documents, certificates, or exhibits executed and delivered by the Borrower, any
of the Borrower under the terms of this Agreement.

                                       2

<PAGE>

     "Maturity Date": the earlier of (i) the date on which the Bank terminates
the Warehousing Commitment pursuant to Section 7.02 hereof and (ii) December 30,
2006.

     "Month-End Period": the period beginning on the fifth to last Business Day
of each month and continuing through the fifth Business Day of the following
month.

     "Mortgage-backed Security": a security (including, without limitation,
participation certificates) that is (a) issued by the Borrower, (b) is an
interest in a pool of mortgages or is secured by such interest and is guaranteed
by GNMA or is issued or guaranteed by FNMA or FHLMC, and (c) originated by the
Borrower in exchange for Pledged Loans pledged by the Borrower to the Bank.

     "Mortgage": a mortgage, deed of trust or other security deed in land and
interests in residential real property of no more than four dwelling units
including, without limitation, leasehold interests as well as structures,
improvements, fixtures and buildings located on or used in connection with real
property or rights and interests in real property which secures a Loan.

     "Mortgage Loan" means a Loan secured by a Mortgage.

     "New York Banking Day": any day (other than a Saturday or Sunday) on which
commercial banks are open for business in New York, New York.

     "Other Assets": as defined in the Pledge and Security Agreements.

     "Person": any natural person, corporation, partnership, joint venture,
firm, association, trust, governmental agency or political subdivision or any
other entity, whether acting in an individual, fiduciary or other capacity.

     "Pledge and Security Agreements": the executed Pledge and Security
Agreement delivered to the Bank by the Borrower and granting to the Bank a
Security Interest in the Collateral to secure the Warehousing Note and the other
obligations described therein, as amended, modified, or replaced from time to
time.

     "Pledged Loan": as defined in Section 1 of the Pledge and Security
Agreement.

     "Pledged Mortgaged-backed Security": as defined in Section 1 of the Pledge
and Security Agreements.

     "Prime Rate": the rate of interest from time to time announced by the Bank
as its "prime rate." For purposes of determining any interest rate which is
based on the Prime Rate, such interest rate shall be adjusted each time that the
prime rate changes.

     "Purchase Commitment": a written commitment, in form and substance
satisfactory to the Bank, issued in favor of the Borrower by an Investor
pursuant to which that Investor commits to purchase Loans, subject to no
condition which cannot be reasonably anticipated to be satisfied before its
expiration.

                                       3

<PAGE>

     "Security Interest": each security interest, pledge, lien, hypothecation
and other encumbrance now and hereafter granted by the Borrower in favor of the
Bank.

     "Subsidiary": any corporation a majority of the shares of the outstanding
capital stock of which is owned by the Borrower, either directly or through one
or more subsidiaries.

     "Total Liabilities": total liabilities of the Borrower, as determined in
accordance with accounting practices consistent with those utilized in preparing
the Borrower's annual audited financial statements.

     "Warehousing Commitment": the obligation of the Bank to make Advances
pursuant to Section 2.01.

     "Warehousing Commitment Amount": the sum of $15,000,000, as the same may be
reduced from time to time pursuant to Section 2.02 hereof.

     "Warehousing Note": a promissory note in the form of Exhibit E hereto, in
the original principal amount of the Warehousing Commitment Amount, as the same
may be amended, modified or restated from time to time hereafter.

          1.02 Accounting Terms and Calculations. All accounting terms used
herein shall be interpreted and all accounting determinations hereunder shall be
made in accordance with GAAP. To the extent any change in GAAP after the date
hereof affects any computation or determination required to be made pursuant to
this Agreement, such computation or determination shall be made as if such
change in GAAP had not occurred unless the Borrower and the Bank agree in
writing on an adjustment to such computation or determination to account for
such change in GAAP.

          1.03 Computation of Time Periods. In this Agreement, in the
computation of a period of time from a specified date to a later specified date,
unless otherwise stated the word "from" means "from and including" and the word
"to" or "until" each means "to but excluding".

          1.04 Other Terms. The words "hereof," "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement, and
section, schedule, exhibit and like references are to this Agreement unless
otherwise clearly requires, "or" has the inclusive meaning represented by the
phrase "and/or." The singular includes the plural and the singular.

                                   ARTICLE II
                             COMMITMENT OF THE BANK

          2.01 Warehousing Commitment. Prior to the Maturity Date and subject to
the terms and conditions of this Agreement, the Bank agrees to lend to the
Borrower, secured by the Collateral, up to the Warehousing Commitment Amount in
the aggregate outstanding at any time in the form of loans ("Advances"),
provided, that the draft or wire transfer request with respect to the Loan or
Loans to be funded by such Advance has been presented to the Bank for payment
and the instruments and documents to which such Loan or Loans related have been
delivered to

                                       4

<PAGE>

the Bank in accordance with the provisions of Section 4.01 or 4.02 of the Pledge
and Security Agreement, provided however,

          (a) the aggregate principal amount of Advances at any time outstanding
     shall not exceed the Warehousing Commitment Amount; and

          (b) the aggregate principal amount of Advances at any time outstanding
     shall not exceed the Borrowing Base, as determined by the Bank.

The Bank shall not be obligated to make Advances if, after giving effect
thereto, any of the foregoing limitations would be exceeded.

          2.02 Reductions in the Warehousing Commitment. The Borrower may, at
any time on at least thirty days' prior notice to the Bank, permanently reduce
the Warehousing Commitment of the Bank by any amount which is an integral
multiple of $2,000,000.

          2.03 Maturity of Warehousing Note. The Warehousing Note shall be due
and payable in full on the Maturity Date at which time the entire unpaid
principal balance of the Warehousing Note together with all accrued interest
thereon and all other related liabilities of the Borrower under this Agreement
shall be due and payable in full.

          2.04 Time and Method of Payments. All payments and prepayments by the
Borrower of principal and all payments of interest of the Warehousing Note shall
be made in Immediately Available Funds not later than 2:00 p.m. (Minneapolis
time) on the dates called for under this Agreement at the office of the Bank.
Funds received after such hour shall be deemed to have been received by the Bank
on the next Business Day. The Borrower hereby authorizes the Bank to charge the
Funding and Settlement Account in an amount equal to any such payment or
prepayment when due and payable to the Bank under this Agreement on the date due
and agrees to maintain collected funds in the Funding and Settlement Account
sufficient to make such payments as and when due. If any payment of principal on
the Warehousing Note becomes due and payable on a day which is not a Business
Day, such payment shall be made on the next succeeding Business Day and such
extension of time shall in such case be included in the computation of any
interest on such principal payment.

          2.05 Borrowing under the Warehousing Commitment. The Borrower shall
give the Bank telephonic notice of each request for an Advance not later than
2:00 p.m. (Minneapolis time) on the date of the requested Advance, specifying
the aggregate amount requested. The Borrower shall promptly confirm any such
request by delivering to the Bank a duly completed and executed Confirmation of
Borrowing/Paydown. The Bank shall deposit into the Funding and Settlement
Account in Immediately Available Funds by not later than 3:00 p.m. (Minneapolis
time) on said date the total amount of the Advance or Advances to be made by the
Bank. Upon the deposit of the Advances in the Funding and Settlement Account,
the Bank shall transfer the portion of such Advance which was deposited in the
Funding and Settlement Account to such account or accounts as the Borrower shall
designate in its notice to the Bank and, with respect to Advances supported by
the instruments and documents identified in Section 4.01 of the Pledge and
Security Agreement, transfer the portion of such Advance which was deposited in
the Funding and Settlement Account to fund a closing requiring good funds to
such

                                       5

<PAGE>

title company, title companies or other third parties located in good funds
states involved in the funding of such Loan as the Borrower shall designate in
its notice to the Bank and as are acceptable to the Bank.

          2.06 Advances; Note Evidencing Advances. All Advances by the Bank
under the Warehousing Commitment shall be evidenced by the Warehousing Note. The
date and amount of each Advance may be noted by the Bank on a schedule annexed
to the Warehousing Note or on the Bank's ledgers or computer records. The
aggregate amount of Advances made by the Bank under the Warehousing Note less
repayments of principal thereof shall be the principal amount owing and unpaid
on such Warehousing Note. The notations made by the Bank on the schedule annexed
to the Warehousing Note or its ledgers and computer records shall be presumed to
be accurate until the contrary shall be established, provided however, that the
failure of the Bank to make such notations or to maintain such records shall not
affect the validity or enforceability of the Warehousing Note.

          2.07 Payment and Prepayment of Advances. The Borrower shall pay the
principal of the Warehousing Note as follows:

          (a) Mandatory Payments. The entire unpaid principal balance of the
     Warehousing Note shall be due and payable on the Maturity Date.

          (b) Mandatory Prepayments. If, at any time, the aggregate principal
     amount of all Advances outstanding exceeds the Borrowing Base, the Borrower
     shall immediately make principal prepayments of the Warehousing Note in an
     aggregate amount equal to the amount of such excess.

          (c) Optional Prepayments. The Borrower shall have the right to prepay
     the outstanding principal balances of the Warehousing Note in whole or in
     part at any time from time to time.

          (d) Confirmation. The Borrower shall promptly send the Bank a
     Confirmation of Borrowing/Paydown confirming any payment or repayment of
     principal made on the Warehousing Note.

          2.08 Interest Rates Applicable to the Warehousing Note.

          (a) Advances. Except as provided in Section 2.08(b) or (c) below,
     interest on each Advance hereunder shall accrue at an annual rate equal to
     1.00% plus the one-month LIBOR rate quoted by the Bank from Telerate Page
     3750 or any successor thereto, which shall be that one-month LIBOR rate in
     effect and reset each New York Banking Day, adjusted for any reserve
     requirement and any subsequent costs arising from a change in government
     regulation. The Bank's internal records of applicable interest rates shall
     be determinative in the absence of manifest error.

          (b) Balance Supported Advances. The Bank and the Borrower agree that
     as an alternative to the interest rates described in Section 2.08(a),
     interest on that portion of the unpaid principal balance of the Note equal
     to the average monthly Adjusted Collected Deposit Balances will accrue
     during such month at a rate equal to one percent (1.00%)

                                       6

<PAGE>

     per annum (calculated on the basis of actual days elapsed and a year of 360
     days). The dollar amount of the unpaid principal balance of the Note to be
     included in this interest rate alternative shall be designated by an
     Authorized Person to the Bank. Each such designation shall be in writing,
     or, if made by telephone, shall be promptly confirmed in writing by an
     Authorized Person, and shall be made prior to the first day of the month
     for which such designation shall be effective. In the event that an
     Authorized Person fails in any respect or for whatsoever reason to make a
     timely and effective designation hereunder, no portion of the unpaid
     principal balance of the Note shall accrue interest at the rate provided
     for in this paragraph. Interest on the designated dollar amount of the
     unpaid principal balance of the Note not supported by required Adjusted
     Collected Deposit Balances shall accrue during such month at a per annum
     rate equal to the rate provided in Section 2.08(a).

          Such Adjusted Collected Deposit Balances shall be maintained in
     addition to Adjusted Collected Deposit Balances to be maintained by the
     Borrower under this Section 2.08 of this Agreement and shall be applied in
     the order set forth in Section 2.13 hereof.

          (c) Interest After Default. On and after occurrence of an Event of
     Default, all Advances shall bear interest until paid in full at a rate per
     annum equal to the Prime Rate plus 2.00% per annum.

          (d) Bank's Records. The Bank's internal records of applicable interest
     rates shall be determinative in the absence of manifest error.

          (e) Payment of Interest. Interest accrued on the Warehousing Note
     through the last day of each calendar month shall be payable on the first
     Business Day of the next succeeding calendar month.

          2.09 Collateral Handling Fees. The Borrower shall pay to the Bank a
collateral handling fee of $10.00 for each Mortgage Loan pledged to the Bank in
connection with this Agreement ("Collateral Handling Fees"), such Collateral
Handling Fees to be payable monthly in arrears on the first day of each month
hereafter and at the Maturity Date.

          2.10 Collateral Security. The Warehousing Note shall be secured by
Loans, Mortgage-backed Securities and Other Assets selected by the Borrower and
pledged and delivered to the Bank from time to time under the terms of the
Pledge and Security Agreements.

          2.11 Prepayments. The Borrower shall have the right to prepay without
penalty, in whole or in part, the unpaid principal balance of the Warehousing
Note.

          2.12 Non-Use Fee. The Borrower agree to pay the Bank an annual fee on
the average daily unused portion of the Warehousing Commitment Amount, at the
rate of one-eighth of one percent (.125%) per annum (calculated on the basis of
actual days elapsed and a year of 360 days), payable monthly in arrears on the
first day of each month and at the Maturity Date, provided however, that if
during any calendar month the average daily outstandings under the

                                       7

<PAGE>

Note equals or exceeds 50% of the Warehousing Commitment Amount, then no fee
shall be payable to the Bank with respect to such month.

          2.13 Order of Application of Adjusted Collected Deposit Balances.
Adjusted Collected Deposit Balances shall be applied in the following order for
purposes of satisfying the individual requirements of the following Sections of
this Agreement:

               First: Section 2.12
               Second: Section 2.08

          2.14 Persons Authorized to Request Advances. Until otherwise directed
in writing by an Authorized Person, the Borrower hereby authorizes the Bank,
upon receipt of telephonic instructions (confirmed in writing as soon as
practicable) from any one of the Authorized Persons, to make Advances in the
amount, in each case, designated by such Authorized Person. The list of
Authorized Persons may be changed at any time upon written notice to the Bank.
The Bank may assume, and act upon the assumption, that any person giving the
Bank instructions hereunder is the person he or she purports to be.

          2.15 Each Extension of Credit. The obligation of the Bank to make any
Advance is subject to the additional conditions precedent that, at the time the
Borrower requests each such Advance:

          (a) No Default and no Event of Default exists and is continuing and
     none will exist upon the making of the requested Advance;

          (b) The representations and warranties contained in Article IV of this
     Agreement are true and correct in all material respects with the same force
     and effect as if made on and as of the date of such request; and

          (c) The making of the requested Advance does not violate any
     applicable law or regulation.

                                  ARTICLE III
                          DOCUMENTS DELIVERED HEREWITH

          3.01 Initial Advance. The Bank shall have no obligation to make an
initial Advance hereunder, unless and until the Borrower has delivered the
following documents to the Bank, in form and substance satisfactory to the Bank:

          (a) the Warehousing Note.

          (b) The Pledge and Security Agreement, duly executed by the Borrower.

          (c) Evidence of the filing of a UCC-1 Financing Statement in the
     office of the Secretary of State of Georgia, and such other places as the
     Bank may deem necessary to perfect the Security Interest created by the
     Pledge and Security Agreement.

          (d) The Guaranties, duly executed by the Guarantors.

                                       8

<PAGE>

          (e) Certified resolutions of the Borrower and the Guarantors,
     authorizing the execution, delivery and performance of the Loan Documents
     to which the Borrower or the Guarantors are a party, identifying the
     officers authorized to execute and deliver such documents on its behalf and
     authorizing the borrowings under the Warehousing Credit Agreement, together
     with a certified copy of the Borrower's, and each Guarantors, articles of
     organization and operating, by-laws (or similar) agreement.

          (f) Certificate of Good Standing for the Borrower and each Guarantor.

          (g) An opinion(s) of counsel to the Borrower and to the Guarantors
     addressed to the Bank and in form and substance acceptable to the Bank.

          (h) Evidence of the insurance policies required under Section 5.04
     hereof.

          (i) A certified copy of the agreement(s) between the Borrower and
     Sunshine Mortgage Corporation respecting provision of operating services by
     Sunshine Mortgage Corporation to the Borrower.

                                   ARTICLE IV
                         REPRESENTATIONS AND WARRANTIES

     To induce the Bank to enter into this Agreement and to advance sums
pursuant to the Warehousing Note, the Borrower represents and warrants that:

     4.01 Organization, Standing, Etc. The Borrower is a limited liability
company, the Guarantors are corporations, and each Subsidiary is either a
limited liability company or a corporation, in each instance duly formed and
validly existing and in good standing under the laws of the jurisdiction of its
formation and has all requisite power and authority, and requisite
qualifications, to carry on its business as now conducted, to enter into the
Loan Documents to which it is party and to perform its obligations under such
Loan Documents.

     4.02 Authorization and Validity. The execution, delivery and performance by
the Borrower and the Guarantors of the Loan Documents have been duly authorized
by all necessary approval action by the Borrower and the Guarantors, and the
Loan Documents constitute the legal, valid and binding obligations of the
Borrower and the Guarantors, enforceable against the Borrower in accordance with
their terms.

     4.03 No Conflict; No Default. The execution, delivery and performance by
the Borrower of the Loan Documents will not (a) violate any provision of any
law, statute, rule or regulation or any order, writ, judgment, injunction,
decree, determination or award of any court, governmental agency or arbitrator
presently in effect having applicability to the Borrower or the Guarantors, (b)
violate or contravene any provisions of the Articles of Association or member
control agreement of the Borrower or the Guarantors, or (c) result in a breach
of or constitute a default under any indenture, loan or credit agreement or any
other agreement, lease or instrument to which the Borrower or either Guarantor
is a party or by which it or any of its properties may be bound.

                                       9

<PAGE>

     4.04 Government Consent. No order, consent, approval, license,
authorization or validation of, or filing, recording or registration with, or
exemption by, any governmental or public body or authority is required on the
part of the Borrower to authorize, or is required in connection with the
execution, delivery and performance of, or the legality, validity, binding
effect or enforceability of, the Loan Documents.

     4.05 Financial Statements and Condition. The Borrower's and the Guarantors'
audited financial statements as at December 31, 2004, and its unaudited
financial statements as at September 30, 2005, as heretofore furnished to the
Bank, have been prepared in accordance with generally accepted accounting
principles on a consistent basis and fairly present the financial condition of
the Borrower and the Guarantors and the results of their respective operations,
changes in financial position, and statement of cash flows for the respective
periods then ended. Since September 30, 2005, there has been no Adverse Event.

     4.06 Litigation and Contingent Liabilities. Schedule 4.06 lists all
material actions, suits or proceedings pending or, to the knowledge of the
Borrower, threatened against or affecting the Borrower before any court,
arbitrator, governmental department or other instrumentality and all material
contingent liabilities of the Borrower.

     4.07 Compliance. The Borrower is in material compliance with all statutes
and governmental rules and regulations applicable to them. There does not exist
any violation by the Borrower of any applicable federal, state or local law,
rule or regulation or order of any government, governmental department or other
instrumentality relating to environmental, pollution, health or safety matters
which will or threatens to impose a material liability on the Borrower or which
would require a material expenditure by the Borrower to cure. The Borrower has
not received any notice to the effect that any part of its operations or
properties is not in material compliance with any such law, rule, regulation or
order or notice that it or its property is the subject of any governmental
investigation evaluating whether any remedial action is needed to respond to any
release of any toxic or hazardous waste or substance into the environment.

     4.08 Regulation U. The Borrower is not engaged in the business of extending
credit for the purpose of purchasing or carrying margin stock (as defined in
Regulation U of the Board of Governors of the Federal Reserve System) and no
part of the proceeds of any Advance will be used to purchase or carry margin
stock or for any other purpose which would violate any of the margin
requirements of the Board of Governors of the Federal Reserve System.

     4.09 Ownership of Property; Liens. The Borrower has good and marketable
title to its real properties and good and sufficient title to its other
properties, including all properties and assets shown in the financial statement
of the Borrower referred to above (other than property disposed of since the
date of such financial statement in the ordinary course of business).

     4.10 Taxes. The Borrower has filed all federal, state and local tax returns
required to be filed and has paid or made provision for the payment of all taxes
due and payable pursuant to such returns and pursuant to any assessments made
against it or any of its property and all other taxes, fees and other charges
imposed on it or any of its property by any governmental authority (other than
taxes, fees or charges the amount or validity of which is currently being
contested in

                                       10

<PAGE>

good faith by appropriate proceedings and with respect to which reserves in
accordance with generally accepted accounting principles have been provided on
the books of the Borrower). No tax liens have been filed and no material claims
are being asserted with respect to any such taxes, fees or charges. The charges,
accruals and reserves on the books of the Borrower in respect of taxes and other
governmental charges are adequate.

     4.11 ERISA Compliance. The provisions of each Plan of the Borrower or any
affiliate comply in all material respects with all applicable requirements of
ERISA, and Borrower has not incurred any "accumulated funding deficiency" within
the meaning of ERISA and has not incurred any material liability to PBGC, in
connection with any Plan. For the purposes hereof, "Plan" means each employee
benefit plan or other class of benefits covered by Title IV of ERISA, whether
now in existence or hereafter instituted. For the purposes hereof, "PBGC" shall
mean the Pension Benefit Guaranty Corporation or any successor.

     4.12 Subsidiaries, Partnerships, etc. Schedule 4.12 sets forth as of the
date of this Agreement a list of all Subsidiaries and the number and percentage
of the shares of each class of capital stock owned beneficially or of record by
the Borrower or any Subsidiary therein, and the jurisdiction of organization of
each Subsidiary and a list of all partnerships or joint ventures in which the
Borrower or any Subsidiary is a partner (limited or general) or joint venturer.

     4.13 Eligibility. The Borrower has all requisite organizational power and
authority and all necessary licenses, permits, franchises and other
authorizations to own and operate its property and to carry on its business as
now conducted. The Borrower will maintain all approvals and will remain at all
times approved and qualified and in good standing as and meet all requirements
as a lender and seller/servicer of Mortgage Loans with each Approved Investor,
eligible to originate, purchase, hold, sell and service Mortgage Loans to be
sold to such Approved Investor.

                                   ARTICLE V
                              BORROWER'S COVENANTS

          From the date hereof and until the Maturity Date and thereafter for so
long as any amount remains outstanding on the Warehousing Note, or any other
liabilities of the Borrower hereunder remain unpaid, the Borrower agrees that,
unless the Bank shall otherwise consent in writing, it will:

          5.01 Financial Statements. Furnish to the Bank:

          (a) as soon as available and in any event within 90 days after the end
     of each fiscal year, the audited financial statements of the Borrower and
     each of the Guarantors, consisting of a statement of income and
     reconciliation of capital accounts of such year and related balance sheets
     as of year-end, setting forth in each case in comparative form the
     corresponding figures for the preceding year, prepared in accordance with
     GAAP applied on a consistent basis with that of the preceding year
     certified by an independent certified public accountant selected by the
     Borrower or Guarantors, and satisfactory to the Bank (and such certificate
     shall not be qualified or limited because of restricted or limited
     examination by such accountants of any material portion of the Borrower's
     or

                                       11

<PAGE>

     either Guarantor's records), together with any management letters,
     management reports or other supplementary comments or reports to the
     Borrower or its board of directors furnished by such accountants;

          (b) as soon as available and in any event within 30 days after the end
     of each calendar month, a copy of the Borrower's internally prepared
     financial statements as of the end of such calendar month, prepared in
     conformity with accounting practices consistent with those utilized in
     preparing the annual audited financial statements required by Section
     5.01(a) above, consisting of a balance sheet and a statement of income and
     surplus for the period from the beginning of the current fiscal year to the
     end of such accounting period, certified by an authorized financial officer
     of the Borrower;

          (c) as soon as available and in any event within 45 days after the end
     of each fiscal quarter, a copy of each of the Guarantor's internally
     prepared financial statements as of the end of such calendar month,
     prepared in conformity with accounting practices consistent with those
     utilized in preparing the annual audited financial statements required by
     Section 5.01(a) above, consisting of a balance sheet and a statement of
     income and surplus for the period from the beginning of the current fiscal
     year to the end of such accounting period, certified by an authorized
     financial officer of the Guarantors;

          (d) as soon as available and in any event within 30 days of the end of
     each calendar month, a Compliance Certificate as of the last day of such
     calendar month;

          (e) as soon as available and in any event within five (5) days of the
     end of each calendar month, the Borrower internally generated "marketing
     position report" and a summary showing with respect to each Firm Commitment
     and Standby Commitment to purchase a Loan from the Borrower the type,
     expiration date, price, interest rate and/or required yield, and the
     original amount or aggregate thereof and the portions thereof that have
     been utilized and the portions thereof that remain available, together with
     a calculation of the "weighted average price" of all Commitments as of end
     of such month;

          (f) from time to time, with reasonable promptness, such further
     information regarding the business, affairs and financial condition of the
     Borrower as the Bank may reasonably request; and

          (g) Promptly after being received or sent by any of the Borrower (i)
     true and complete copies of all audits, reports, studies and similar
     documentation prepared by or on behalf of FNMA, FHLMC, GNMA, FHA, VA or the
     Department of Housing and Urban Development or similar agency relating to
     the Borrower's operations, servicing or lending practices or which have
     been done in connection with the review, extension or conditioning of any
     licenses and approvals issued to the Borrower by any of the foregoing; and
     (ii) copies of all correspondence between any of the foregoing departments
     and agencies and the Borrower related to such audits, reports, studies and
     similar documents.

                                       12

<PAGE>

          5.02 Corporate Existence. Maintain its corporate existence in good
standing under the laws of the State of its formation and maintain its right to
transact business in each jurisdiction where its assets or the nature of its
activities makes such qualification necessary.

          5.03 Taxes. Duly and punctually pay all taxes, assessments and
governmental charges or levies imposed on it or on its income or profits or on
any of its properties prior to the date on which penalties attach thereto except
for those contested in good faith by appropriate proceedings for which adequate
reserves in conformity with GAAP have been provided.

          5.04 Insurance. Maintain in full force and effect (a) adequate errors
and omissions insurance policy, (b) such other insurance coverage by financially
sound and respectable insurers, on all properties of a character usually insured
by organizations engaged in the same or similar business against loss or damage
of a kind customarily insured against by such organizations, (c) adequate public
liability insurance against tort claims which may be asserted against the
Borrower, and (d) a mortgage bankers blanket bond insurance policy in an amount
customarily maintained by organizations engaged in the same or similar business
and under similar circumstances as the Borrower; cause to be maintained in full
force and effect insurance coverage by financially sound and respectable
insurers on all real property covered by mortgages, deeds of trust or similar
security devices securing Loans owned by the Borrower to the extent normally
required by prudent mortgagees.

          5.05 Litigation. Give prompt written notice to the Bank of any
litigation or governmental proceeding pending or, to its knowledge, threatened
against the Borrower which (i) involves an uninsured claim of over $100,000 or
(ii) if adversely determined, may in its opinion have a material adverse effect
on its business or condition (financial or other) or operations.

          5.06 Access to Books and Inspection. Upon application by the Bank,
give any representative of the Bank access during normal business hours to, and
permit such representative to examine, copy or make extracts from, any and all
books, records and documents in the possession of the Borrower or under its
control relating to its affairs, and to inspect any of the properties of the
Borrower.

          5.07 Liens. Not create or permit to exist any mortgage, pledge, title
retention lien, lease, purchase or other encumbrance or security interest with
respect to any of its property and assets, except:

          (a) Security Interests in favor of the Bank,

          (b) materialmen's, mechanics', suppliers', tax, and warehousemen's
     liens, statutory liens of landlords and other like liens arising in the
     ordinary course of business securing obligations which are not yet due or
     which are being contested in good faith by appropriate proceedings,

          (c) liens incurred or deposits made in the ordinary course of business
     in connection with workers' compensation, unemployment insurance and other
     types of social security or to secure the performance of statutory
     obligations, surety or appeal

                                       13

<PAGE>

     bonds, bids, leases, performance and return of money bonds and similar
     obligations (exclusive of obligations for the payment of borrowed money),

          (d) encumbrances consisting of zoning regulations, easements, rights
     of way, survey exceptions and other similar restrictions on the use of real
     property and minor irregularities in titles thereto which do not materially
     impair their use in the operation of its business,

          (e) purchase money security interests to secure indebtedness permitted
     by Section 5.17(iv) hereof, and

          (f) existing liens and security interests existing on the date hereof
     and described on Schedule 5.07 hereto.

          5.08 ERISA Contributions. At all times, make prompt payment of
contributions required to meet the minimum funding standards set forth in ERISA
with respect to any employee benefit plan.

          5.09 Loans. Not make or permit to exist any Loans, advances or
extensions of credit to any Person, except:

          (a) Loans made and acquired in the ordinary course of its business;

          (b) existing loans described on attached Schedule 5.09.

          5.10 VA Guaranties and FHA Insurance. Not commit or suffer to be
committed any act which would invalidate the guarantee of the VA or insurance by
the FHA or cause any impairment to the validity of or priority of the lien
securing any Loan pledged to the Bank under the Pledge and Security Agreement.

          5.11 Maintenance of Qualifications. Not commit or suffer to be
committed any act which would adversely affect its eligibility to participate as
an FHA approved non-supervised and direct endorsement mortgagee, as an approved
lender under the VA guarantee program, as an approved seller/servicer of Loans
to FNMA or FHLMC, as an approved seller/servicer or issuer/servicer of Loans to
GNMA, or its eligibility to issue Mortgage-backed Securities or to service the
mortgage pools formed with respect to Mortgage-backed Securities.

          5.12 Adjusted Tangible Net Worth Stop. Maintain at all times
Borrower's members' equity (determined in accordance with GAAP) of at least
$1,000,000.

          5.13 Leverage Ratio. Maintain at all times the ratio of Indebtedness
(including without limitation any loans sold under repurchase agreements) to the
Borrower's members' equity (determined in accordance with GAAP) of not more than
15.00 to 1.00

          5.14 Profitability. Maintain the Borrower's net income (determined in
accordance with GAAP) at not less than $5,000 per fiscal quarter, commencing
with the fiscal quarter ending December 31, 2006.

                                       14

<PAGE>

          5.15 Dividends. Not declare or pay any distributions on; nor purchase,
redeem, retire, or otherwise acquire for value any of its membership interests
now or hereafter outstanding; nor make any distribution of assets to its members
as such whether in cash, assets, or obligations, or allocate or otherwise set
apart any sum for the payment of any dividend or distribution on, or for the
purchase, redemption, or retirement of, any of its membership interests; nor
make any other distribution by reduction of capital or otherwise in respect of
any shares of its membership interests; provided however, that as long as the
Borrower is treated as a partnership for purposes of the Internal Revenue Code
of 1986, as amended, the Borrower may declare and pay cash distributions to all
of the then members of the Borrower in an amount equal to the combined federal
and state income tax liability, if any, of the members arising from their
respective allocable share of the earnings and profits of the Borrower for such
year, with each member's federal and state income tax liability to be computed
on the basis of the marginal tax rate under the Internal Revenue Code of 1986,
as amended, applicable to such member's allocable share of the earnings and
profits of the Borrower, provided further however, that any such declaration and
payment shall not otherwise result in a Default or Event of Default under this
Agreement.

          5.16 Prohibition on Stock Investments. Not purchase or otherwise
acquire any capital stock, assets, obligations or other securities of, make a
capital contribution to, or otherwise invest in or acquire any interest in any
Person.

          5.17 Limitation on Indebtedness. Not incur, create, contract, waive,
assume, have outstanding, guarantee or otherwise be or become, directly or
indirectly, liable in respect of any indebtedness, except (i) indebtedness
arising out of this Agreement and the Warehousing Note, (ii) current liabilities
for taxes and assessments incurred in the ordinary course of business, (iii)
current accounts payable or accrued of other claims (other than for borrowed
funds or purchase money obligations) incurred in the ordinary course of
business, provided that all such liabilities, accounts and claims shall be
promptly paid and discharged when due or in conformity with customary trade
terms and shall not have been incurred for stock or investment purposes, and
(iv) indebtedness of the Borrower incurred for the purpose of financing the
acquisition of any fixed assets or for improvements, replacements, substitutions
or additions thereto or therefor and required to be amortized or depreciated
over the useful life of such assets, not to exceed $100,000 in the aggregate at
any time outstanding.

          5.18 Prohibition of Rebates and Referral Fees. Not pay or grant any
rebates or referral fees to any affiliated or formerly affiliated builder, real
estate agent or contractor in connection with origination, construction or
closing of a residential housing unit.

          5.19 Electronic Tracking Agreement. Deliver to the Bank within thirty
(30) days hereof, a duly executed original of the Electronic Tracking Agreement,
by and among the Borrower, MERS and MERSCORP, Inc..

                                       15

<PAGE>

                                   ARTICLE VI
                           EVENTS OF DEFAULT; REMEDIES

          6.01 Events of Default. The occurrence of one or more of the following
events shall constitute an "Event of Default":

          (a) Failure of the Borrower to make any payment when due of any
     principal of or interest on the Warehousing Note, including any prepayment
     due pursuant to Section 2.07 or failure to pay when due any fee, expense or
     other payment required hereunder; or

          (b) Failure of the Borrower to perform or observe any of the covenants
     contained in Sections 5.01 through 5.21 or in the Pledge and Security
     Agreements which shall remain unremedied for five (5) Business Days after
     written notice thereof shall have been received from the Bank; or

          (c) Failure of the Borrower or either Guarantor to perform or observe
     any other covenant contained herein or in any other Loan Document (and not
     constituting a default under Sections 6.01(a) or 6.01(b) otherwise which
     shall remain unremedied for 10 days after written notice thereof shall have
     been received from the Bank; or

          (d) Any warranty made by any of the Borrower or either Guarantor is
     untrue in any material respect, or any certificate, schedule, statement,
     report, notice or writing furnished by or on behalf of the Borrower or
     either Guarantor to the Bank is untrue in any material respect on the date
     the facts set forth are stated or certified; or

          (e) Any creditor or representative of any creditor of the Borrower or
     either Guarantor for borrowed money, declares or is or becomes entitled to
     declare any indebtedness owing on any bond, debenture, note or other
     evidence of indebtedness for borrowed money in excess of $100,000 to be due
     and payable prior to its expressed maturity by reason of any default in the
     performance or observance of any obligation or condition (whether or not
     such creditor or representative shall have declared such indebtedness to be
     due and payable) or any such indebtedness becomes due by its terms and
     shall not be promptly paid or extended; or

          (f) The Borrower or either Guarantor becomes insolvent or generally
     does not pay its debts as they become due or applies for, consents to, or
     acquiesces in the appointment of trustee or receiver for it, or its
     property; or, in the absence of such application, consent or acquiescence,
     a trustee or receiver is appointed for its, or for a substantial part of
     its property; or any bankruptcy, reorganization, debt arrangement or other
     proceedings under any bankruptcy or insolvency law is instituted by or
     against the Borrower, and if instituted against the Borrower, remains
     undismissed for more than sixty (60) days after the filing thereof; or

          (g) Any dissolution or liquidation proceeding is instituted by or
     against the Borrower or either Guarantor and if instituted against the
     Borrower, remains undismissed for more than sixty (60) days after the
     filing thereof;

                                       16

<PAGE>

          (h) Any Reportable Event or any other fact or circumstance, which the
     Bank determines in good faith constitutes grounds for the termination of
     any Plan, as defined in Section 4.11 hereof, by the Pension Benefit
     Guaranty Corporation or for the appointment by an appropriate United States
     District Court of a trustee to administer any such Plan, shall have
     occurred and be continuing thirty (30) days after written notice of such
     determination shall have been given to the Borrower by the Bank, or any
     Plan shall be terminated within the meaning of Title IV of ERISA, or a
     trustee shall be appointed by the appropriate United States District Court
     to administer any Plan, or the Pension Benefit Guaranty Corporation shall
     institute proceedings to terminate any Plan, or to appoint a trustee to
     administer any such Plan and, upon the occurrence of any of the foregoing,
     the aggregate amount of the vested unfunded liability under all such Plans
     exceeds One Hundred Thousand Dollars ($100,000) and such liability is not
     covered by insurance;

          (i) Any Guaranty shall not be, or shall cease to be, enforceable in
     accordance with its terms or any Guarantor shall disclaim or disavow, or
     attempt to disclaim or disavow, its obligations thereunder;

          (j) If (i) the members and ownership interest of the Borrower shall
     not continue to be the Current Members' Interests, (ii) L. Edward Terry
     shall cease to own at least 90% of the stock of Madison Mortgage
     Corporation, or (iii) ebank Financial Services, Inc. shall ceases to own
     all of the stock of ebank.

          6.02 Remedies. If any Event of Default shall be continuing, the Bank
may terminate its Warehousing Commitment and may declare the principal of and
accrued interest on the Warehousing Note to be immediately due and payable,
whereupon the Warehousing Commitment shall terminate immediately and the
Warehousing Note shall become immediately due and payable, all without notice of
any kind. The Bank shall promptly advise the Borrower in writing of any such
termination and declaration (with a copy of such writing being sent to the
Guarantors, as provided in Section 7.03) but failure to do so shall not impair
the effect of such termination or declaration.

          6.03 Security Agreement in Accounts and Setoff. As additional security
for the payment of all of the Indebtedness of the Borrower owed to the Bank or
any other holder of the Notes (the "Obligations"), the Borrower grants to the
Bank and any such holder of the Notes a security interest in, a lien on, and an
express contractual right to set off against, each deposit account and all
deposit account balances, cash and any other property of the Borrower now or
hereafter maintained with, or in the possession of, the Bank or such holder of
the Notes. Upon the occurrence of any Event of Default (without regard to any
grace or waiting periods), the Bank or such holder of the Notes may: (a) refuse
to allow withdrawals from any such deposit account; (b) apply the amount of such
deposit account balances and the other assets of the Borrower described above to
the Obligations; and (c) offset any other obligation of the Bank or such holder
of the Notes against the Obligations; all whether or not the Obligations are
then due or have been accelerated and all without any advance or contemporaneous
notice or demand of any kind to the Borrower, such notice and demand being
expressly waived.

                                       17

<PAGE>

                                   ARTICLE VII
                                  MISCELLANEOUS

          7.01 Expenses. The Borrower agrees to reimburse the Bank, upon demand,
for all reasonable out-of-pocket expenses (including reasonable attorneys' fees
and legal expenses) incurred in connection with the preparation and amendment of
this Agreement and in attempting to enforce the obligations of the Borrower
hereunder and under the Warehousing Note and the other Loan Documents, which
obligations shall survive any termination of this Agreement.

          7.02 Waivers, etc. No failure on the part of the Bank or the holder of
the Warehousing Note to exercise and no delay in exercising, any power or right
hereunder, shall operate as a waiver thereof; nor shall any single or partial
exercise of any power or right preclude any other or further exercise thereof or
the exercise of any other power or right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.

          7.03 Notices. All notices, requests and demands will be given to or
made upon the respective parties hereto at their respective addresses specified
on the signature page hereof (or in the case of the Guarantors, as stated below)
or, as to any party, at such other address as may be designated by it in a
written notice to the other party. All notices, requests, consents and demands
hereunder will be effective when telecopied to such party or three days after
being deposited in the mails, postage prepaid, addressed as aforesaid. As
provided in Section 6.02, the Bank will send notice of termination of the
Commitment and and declaration of an Event of Default to the Borrower and the
Guarantors, but failure to do so shall not impair the effect of such termination
or declaration. The addresses and telecopy numbers of the Guarantors for
purposes of notices shall be:

     Madison Mortgage Corporation
     2401 Lake Park Drive
     Suite 300
     Smyrna, GA 30080
     Attention: Edward L. Terry
     Fax: 770-436-2153

     ebank Financial Services, Inc.,
     2410 Paces Ferry R.
     Atlanta, GA 30339
     Attention:_James Box
     Fax: 770-722-2665

          7.04 Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the Borrower and the Bank, and their respective successors and
assigns, except that the right of the Borrower to use the Warehousing Commitment
may not be assigned or transferred without the prior written consent of the
Bank.

          7.05 Taxes. The Borrower agrees to pay, and save the Bank harmless
from all liability for, any stamp or other taxes which may be payable with
respect to the execution or

                                       18

<PAGE>

delivery of this Agreement or the issuance of the Warehousing Note and the Loan
Documents, which obligation of the Borrower shall survive the termination of
this Agreement.

          7.06 Amendments. Any provision of this Agreement may be modified or
waived only by an instrument or instruments in writing signed by the Borrower
and the Bank.

          7.07 Section Titles. The section titles contained in this Agreement
shall be without substantive meaning or content of any kind whatsoever and shall
not govern the interpretation of any of the provisions of this Agreement.

          7.08 Reliance by the Bank. All covenants, agreements, representations
and warranties made herein by the Borrower shall, notwithstanding any
investigation by the Bank, be deemed to be material to and to have been relied
upon by the Bank and shall survive the execution and delivery of this Agreement.

          7.09 Severability. Any provision of this Agreement which is prohibited
or unenforceable shall be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof.

          7.10 Highest Lawful Rate. Anything herein to the contrary
notwithstanding, the obligation of the Borrower on the Warehousing Note shall be
subject to the limitation that payments of interest shall not be required, for
any period for which interest is computed hereunder, to the extent that
contracting for or receipt thereof would be contrary to provisions of any law
applicable to the Bank limiting the highest rate of interest which may be
lawfully contracted for, charged or received by such Bank.

          7.11 Counterparts; Effectiveness. This Agreement and any amendments,
waivers, consents, or supplements may be executed in any number of counterparts,
and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument. This Agreement shall
become effective upon the written or telephoned notification of such execution
and authorization of delivery thereof has been received by the Bank.

          7.12 Governing Law. THE VALIDITY, CONSTRUCTION AND ENFORCEABILITY OF
THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY THE INTERNAL LAWS OF THE STATE
OF MINNESOTA, WITHOUT GIVING EFFECT TO CONFLICT OF LAWS PRINCIPLES THEREOF, BUT
GIVING EFFECT TO FEDERAL LAWS OF THE UNITED STATES APPLICABLE TO NATIONAL BANKS.

          7.13 Consent to Jurisdiction. AT THE OPTION OF THE BANK, THIS
AGREEMENT AND THE NOTES MAY BE ENFORCED IN ANY FEDERAL COURT OR MINNESOTA STATE
COURT SITTING IN MINNEAPOLIS OR ST. PAUL, MINNESOTA; AND THE BORROWER CONSENT TO
THE JURISDICTION AND VENUE OF ANY SUCH COURT AND WAIVES ANY ARGUMENT THAT VENUE
IN SUCH FORUMS IS NOT CONVENIENT. IN THE EVENT THE BORROWER COMMENCES ANY ACTION
IN ANOTHER JURISDICTION OR VENUE UNDER ANY TORT OR CONTRACT THEORY

                                       19

<PAGE>

ARISING DIRECTLY OR INDIRECTLY FROM THE RELATIONSHIP CREATED BY THIS AGREEMENT,
THE BANK AT ITS OPTION SHALL BE ENTITLED TO HAVE THE CASE TRANSFERRED TO ONE OF
THE JURISDICTIONS AND VENUES ABOVE-DESCRIBED, OR IF SUCH TRANSFER CANNOT BE
ACCOMPLISHED UNDER APPLICABLE LAW, TO HAVE SUCH CASE DISMISSED WITHOUT
PREJUDICE.

          7.14 Waiver of Jury Trial. THE BORROWER AND THE BANK EACH WAIVE ANY
RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY
RIGHTS (a) UNDER THIS AGREEMENT OR UNDER ANY AMENDMENT, INSTRUMENT, DOCUMENT OR
AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION
HEREWITH OR (b) ARISING FROM ANY BANKING RELATIONSHIP EXISTING IN CONNECTION
WITH THIS AGREEMENT, AND AGREE THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED
BEFORE A COURT AND NOT BEFORE A JURY.

                            (signature page follows)

                                       20

<PAGE>

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.

                                        EBANK MORTGAGE, LLC,
                                        a Georgia limited liability company

                                        By /s/ Lucien J. Barrette
                                           -------------------------------------
                                        Title: President

                                        ebank Mortgage, LLC
                                        2401 Lake Park Dr.
                                        Suite 200
                                        Smyrna, Ga. 30080
                                        Attention: Mr. Lucien J. Barrette
                                        Telephone:
                                                   -----------------------------
                                        Fax:
                                             -----------------------------------

                                        U.S. BANK NATIONAL ASSOCIATION,
                                        a national banking association

                                        By /s/ William J. Umscheid
                                           -------------------------------------
                                           William J. Umscheid
                                           Its Vice President

                                        U.S. Bank National Association
                                        Mortgage Banking Services
                                        Mail Station BC-MN-H03B
                                        U.S. Bancorp Center
                                        800 Nicollet Mall
                                        Minneapolis, Minnesota 55402
                                        Attention: William J. Umscheid
                                        Telephone: (612) 303-3575
                                        Fax: (612) 303-2253

                                       21

<PAGE>

                                                        Exhibit A to Warehousing
                                                                Credit Agreement

                                   FORMULA FOR
                         COLLATERAL VALUE DETERMINATION

     "Collateral Value": at the time of any determination by the Bank,
Collateral Value of any Mortgage Loan shall equal ninety-eight percent (98%) of
the least of: (a) the Origination Price or the Acquisition Price, as the case
may be, of such Mortgage Loan, (b) the purchase price under the Firm Commitment
or Standby Commitment to which such Mortgage Loan has been assigned or in lieu
thereof, the weighted average price under all Commitments, or (c) at the
election of the Bank, the Fair Market Value of such Mortgage Loan. Determination
of Collateral Value shall be further subject to the following provisions:

     1. Mortgage Loans Not having Collateral Value. A Mortgage Loan shall not,
or shall cease to, have Collateral Value:

     (a) If such Mortgage Loan is not or ceases to be an Eligible Jumbo Loan,
     Eligible Mortgage Loan, Eligible Second Mortgage Loan, Eligible HELOC Asset
     or Eligible Subprime Mortgage Loan, as the case may be;

     (b) One hundred twenty (120) days from the date on which such Mortgage Loan
     is pledged to the Bank if it is an Eligible Jumbo Loan or Eligible Mortgage
     Loan;

     (c) Ninety (90) days from the date on which such Mortgage Loan is pledged
     to the Bank if it is an Eligible Second Mortgage Loan, Eligible HELOC Asset
     or Eligible Subprime Mortgage Loan;

     (d) Forty five (45) days from the date such Mortgage Loan is delivered to
     an Investor for examination and purchase and such Mortgage Loan has not
     been returned to the Bank;

     (e) Nineteen (19) days from the date a Collateral Document in connection
     with any Mortgage Loan included in Collateral was delivered to the Borrower
     for correction or completion, without being returned to the Bank, corrected
     or completed;

     (f) Seven (7) Business Days from the date a Wet Advance was made without
     receipt of all Collateral Documents relating to such Mortgage Loan funded
     by a Advance, unless the Collateral Documents required to be delivered for
     such Mortgage Loan shall be delivered during such period;

     (g) If at any time such Mortgage Loan is foreclosed;

     (h) If at any time such Mortgage Loan is sold, whether under a Purchase
     Commitment or otherwise;

                                       1

<PAGE>

     (i) If at any time after receipt by the Bank of the documents respecting
     such Mortgage Loan if the Bank shall determine that such documents do not
     comply with all requirements in this Agreement or the related Purchase
     Commitment;

     (j) If the Bank notifies the Borrower that in its reasonable opinion such
     Mortgage Loan is not marketable and will not therefore be given Collateral
     Value hereunder; or

     (k) If the Borrower fails to deliver any document relating to a Mortgage
     Loan under Section 4.02 of the Pledge and Security Agreement within the
     time period set forth therein or under Section 4.03 of the Pledge Agreement
     within five (5) Business Days after being requested to do so by the Bank.

     2. Mortgage Loans Remain as Collateral. Notwithstanding any of the
foregoing, a Mortgage Loan shall remain a part of the Collateral pledged under
the Pledge and Security Agreement until it is released by the Bank pursuant to
Section 10.04 hereof, notwithstanding any determination that such Mortgage Loan
does not have, or has ceased to have, Collateral Value, and a Mortgage Loan
which has been delivered to a custodian for inclusion in a pool of Mortgage
Loans backing a Mortgaged-backed Security pursuant to Section 10.03 of the
Pledge and Security Agreement shall remain a part of the Collateral pledged
under the Pledge and Security Agreement and, to the extent provided in the prior
sentence of this paragraph, shall retain its Collateral Value until it is
released pursuant to Section 10.04 of the Pledge and Security Agreement.

     3. Limits on Aggregate Collateral Value. Aggregate Collateral Value which
may be assigned to Mortgage Loans shall not exceed the following:

     (a) For Wet Advances, 50% of the Warehousing Commitment Amount for the
     first five and the last five Business Days of each month, and 35% of the
     Warehousing Commitment Amount at all other times;

     (b) For Eligible Jumbo Loans, 50% of the Warehousing Commitment Amount at
     any time;

     (c) For Eligible Mortgage Loans, 100% of the Warehousing Commitment Amount
     at any time;

     (d) For Eligible Second Mortgage Loans plus Eligible HELOC Assets, 15% of
     the Warehousing Commitment Amount at any time;

     (e) For Eligible Subprime Mortgage Loans, 15% of the Warehousing Commitment
     Amount at any time.

     3. Definitions. As used in the foregoing definition of Collateral Value, in
addition to the capitalized terms defined in the text of the Agreement, the
following terms shall have the following respective meanings:

     "Acquisition Price": with respect to a Mortgage Loan which is purchased by
the Borrower, the purchase price paid by the Borrower for said Mortgage Loan
(but not more than

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<PAGE>

the unpaid principal balance thereof) less any discounts received by the
Borrower in connection with said Mortgage Loan.

     "Appraised Value": with respect to an interest in real estate, the then
current fair market value thereof as of a recent date, as determined by the FHA
or the VA, if applicable, or, if there is no such determination, then as
determined in accordance with accepted methods of appraising by a qualified
appraiser who is a member of the American Institute of Real Estate Appraisers or
other group of professional appraisers and who is approved by the Bank.

     "Conventional Mortgage Loan": a Mortgage Loan secured by a First Mortgage
on improved real estate, in an amount not in excess of eighty percent (80%) of
the Appraised Value of such real estate unless the amount of the Mortgage Loan
in excess of such Appraised Value is insured, or is subject to a commitment to
be insured, against credit losses by an insurer approved by FHLMC or FNMA and
which satisfies FHLMC's or FNMA's underwriting standards and is eligible for
purchase by FHLMC or FNMA.

     "Eligible HELOC Asset": a HELOC Asset owned by the Borrower that would be
an Eligible Mortgage Loan(a) would be an Eligible Mortgage Loan, except for
subsection (a) or (i) of the definition thereof; and (b) has not been included
in Collateral as an Eligible HELOC Asset for more than ninety (90) days.

     "Eligible Jumbo Loan": a Jumbo Loan owned by the Borrower that would be an
Eligible Mortgage Loan, except that it exceeds the dollar limits applicable to
Conventional Mortgage Loans, FHA Loans or VA Loans.

     "Eligible Mortgage Loan": a Mortgage Loan owned by the Borrower that:

     (a) is, without duplication, a Conventional Mortgage Loan, an FHA Loan, or
     a VA Loan;

     (b) is validly pledged to the Bank, subject to no other Liens;

     (c) is covered by a Purchase Commitment;

     (d) is not in default in the payment of principal and interest or in the
     performance of any obligation under the Mortgage and other documents
     evidencing or securing such Mortgage Loan for a period of more than thirty
     (30) days;

     (e) has closed or been acquired by the Borrower (which ever came first)
     less than sixty (60) days prior to the date of the Advance made in
     connection with such Mortgage Loan;

     (f) the representations and warranties of the Borrower in this Agreement
     and in the Pledge and Security Agreement applicable to such Mortgage Loan
     are accurate and complete and the Borrower has complied with all covenants
     in this Agreement and in the Pledge and Security Agreement applicable to
     such Mortgage Loan;

     (g) has a combined loan-to-value ratio, taking into account first and
     second liens, not greater than one hundred percent (100%) and unless it is
     a HELOC Asset, if it has a loan-

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<PAGE>

     to-value ratio greater than eighty percent (80%), is covered by a private
     mortgage insurance policy meeting all requirements and guidelines of the
     Agencies;

     (h) is not a Subprime Mortgage Loan;

     (i) is not a Second Mortgage Loan or an Eligible HELOC Asset;

     (j) it is secured by a Mortgage on property the improvements on which are
     completed and not under construction; and

     (k) is in all other respects acceptable to the Bank.

     "Eligible Second Mortgage Loan": a Second Mortgage Loan owned by the
Borrower that: (a) would be an Eligible Mortgage Loan, except for subsection (h)
or (i) of the definition thereof; and (b) has not been included in Collateral as
an Eligible Second Mortgage Loan for more than ninety (90) days.

     "Eligible Subprime Mortgage Loan": a Subprime Mortgage Loan that: (a) would
be an Eligible Mortgage Loan, except for subsection (h) or (i) of the definition
thereof and except that it may not comply with the maximum dollar amount
applicable to Conventional Mortgage Loans, but in all cases will be in the
principal amount of $500,000 or less; and (b) has not been included in
Collateral as an Eligible Subprime Mortgage Loan for more than ninety (90) days.

     "Fair Market Value": at any date with respect to any Mortgage Loan, the
market price for FNMA thirty-day mandatory future delivery of such Mortgage Loan
quoted by Telerate or, if not so quoted, the bid price quoted in writing to the
Bank as of the computation date by two nationally recognized dealers selected by
the Bank who at the time are making a market in similar loans, multiplied, in
each case, by the outstanding principal thereof.

     "FHA Mortgage Loan": a Loan secured by a First Mortgage which is insured,
or is to be insured subject to submission of supporting documents, by the
Federal Housing Administration pursuant to the provisions of the National
Housing Act, as amended.

     "First Mortgage": a Mortgage which is subject to no prior or superior
mortgage, deed of trust or other security deed in the land and interests in real
property covered by such Mortgage.

     "HELOC Asset": a Mortgage Loan owned by the Borrower that is subject to
documents permitting periodic multiple advances, periodic repayments, and may
permit relending of amounts so repaid and that complies with all applicable
requirements for purchase under an Agency's purchase contract then in effect for
such types of Mortgage Loans.

     "Investor": the persons listed on Exhibit F, including, without limitation,
FNMA, FHLMC and GNMA, any bank, trust company, savings and loan association,
pension fund, governmental authority, insurance company or other responsible and
substantial institutional investor, dealer or securities broker designated by
the Borrower and approved by the Bank.

                                       4

<PAGE>

     "Jumbo Loan": a Mortgage Loan that complies with all applicable
requirements for purchase under an Agency's standard form of conventional
mortgage purchase contract then in effect except that the amount of such
Mortgage Loan exceeds the maximum amount under those requirements, but unless
the Bank shall otherwise approve in writing for a specific Jumbo Loan, no Jumbo
Loan may exceed $1,000,000 in principal amount.

     "Origination Price": with respect to a Mortgage Loan originated by the
Borrower, the unpaid principal amount of said Loan less all discounts collected
by the Borrower in connection with said Mortgage Loan.

     "Second Mortgage Loan": a Mortgage Loan that satisfies the underwriting
guidelines or other applicable standards of the Approved Investor that issued
the related Purchase Commitment for a second lien.

     "Subprime Mortgage Loan": a Mortgage Loan that satisfies the underwriting
guidelines or other applicable standards of the Approved Investor that issued
the related Purchase Commitment for a risk rating below "A" but equal to or
above "C", and being a Loan the borrower of which has a "FICO" or similar credit
rating score not less than 550.

     "VA Mortgage Loan": a Loan secured by a First Mortgage which is guaranteed,
or is to be guaranteed subject to submission of supporting documents, by the
Veterans Administration pursuant to the provisions of the Servicemen's
Readjustment Act of 1944, as amended.

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