THE CORPORATE LIBRARY

Related Party Transactions and Outside Related Director Information

NetBank, Inc. (NTBK)

3/31/2006 Proxy Information

Some of our directors, officers, principal shareholders and their associates were customers of, or had transactions with, the Company or the Bank in the ordinary course of business during 2005. Some of our directors are directors, officers, trustees or principal securities holders of corporations or other organizations that also were customers of, or had transactions with, the Company or the Bank in the ordinary course of business during 2005.

All outstanding loans and other transactions with our directors, officers and principal shareholders were made in the ordinary course of business on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with other persons and, when made, did not involve more than the normal risk of collectability or present other unfavorable features.

In 2004, we purchased the Atlanta residence of Douglas K. Freeman, our Chairman and Chief Executive Officer, in connection with his relocation from Atlanta, Georgia to Jacksonville, Florida, pursuant to the terms of his employment agreement. We purchased the property at the appraised value of $1,750,000 plus an additional $9,430 in capital improvements. In the fourth quarter of 2005, the property was sold to an unrelated third party for $1,275,000. The expense related to the subsequent sale was recorded in other expenses for the year ended December 31, 2005.

3/28/2005 Proxy Information

Some of our directors, officers, principal shareholders and their associates were customers of, or had transactions with, the Company or the Bank in the ordinary course of business during 2004 and 2003. Some of our directors are directors, officers, trustees or principal securities holders of corporations or other organizations that also were customers of, or had transactions with, the Company or the Bank in the ordinary course of business during 2004 and 2003.

All outstanding loans and other transactions with our directors, officers and principal shareholders were made in the ordinary course of business on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with other persons and, when made, did not involve more than the normal risk of collectability or present other unfavorable features.

On April 23, 2002, the Bank entered into an Account Relationship and Processing Agreement (as amended, the "Processing Agreement") with Directo, Inc., providing for the processing of certain deposit accounts established for employees of clients of Directo. The employees that participate in the Directo program maintain deposit accounts at the Bank that are accessible only through debit card transactions. During 2004, fees from the participant employees in the amount of $1,315,206 collected by the Bank on behalf of Directo were paid to Directo, after deduction of $56,963 in fees due to the Bank. Messrs, T. S. Johnson and Robin Kelton are members of both the Bank and Directo's Boards of Directors. Each holds less than 10 percent of Directo's capital stock. In April 2004, the Bank gave Directo notice of termination of the Processing Agreement, which notice of termination was subsequently extended several times in order for Directo to secure a replacement bank. On February 15, 2005, the Processing Agreement officially terminated and all the deposit accounts that were part of this relationship were transferred to a new bank. The escrow account that had been funded by Directo was replaced by the joint and several guaranty of Messrs. T. S. Johnson and Kelton, as provided in the Processing Agreement, which guaranty covers any potential transactional losses by the Bank with respect to the program.