RECAPITALIZATION AGREEMENT

Exhibit 10.1

RECAPITALIZATION AGREEMENT

By and Among

FRIEDMAN, BILLINGS RAMSEY GROUP, INC.,

FNLC FINANCIAL SERVICES, INC.,

NLC HOLDING CORP.,

and

FIRST NLC FINANCIAL SERVICES, LLC

Dated July 25, 2007

TABLE OF CONTENTS

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Index of Exhibits

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RECAPITALIZATION AGREEMENT

This Recapitalization Agreement is made and entered into this 25th day of July 2007, by and among FRIEDMAN, BILLINGS RAMSEY GROUP, INC. , a Virginia corporation ( “FBR” ), FNLC FINANCIAL SERVICES, INC., a Delaware corporation (“ FNLC ”), NLC HOLDING CORP. , a Delaware corporation ( “NLC Holding” ), and FIRST NLC FINANCIAL SERVICES, LLC , a Florida limited liability company (the “Company,” and together with FBR, FNLC, and NLC Holding, the “Parties,” and each, a “Party” ).

RECITALS

WHEREAS , FBR is the ultimate parent of FNLC, which in turn owns all the outstanding securities of the Company. The Company is the owner of all the outstanding stock of First NLC, Inc., a Minnesota corporation (“ FNLC Inc. ”), and NLC, Inc., a Tennessee corporation (together with FNLC Inc, the “ Subsidiaries ,” and the Subsidiaries together with the Company, the “ FNLC Entities ”);

WHEREAS , the FNLC Entities are engaged in the business of originating, selling and securitizing mortgage loans;

WHEREAS , the Company has requested additional funds, and NLC Holding, and FNLC desire to provide additional funds to, and to recapitalize the equity of, the Company in two stages as more fully described below and on the terms contained herein;

NOW THEREFORE , in consideration of the foregoing premises and the mutual covenants, agreements, representations and warranties herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto, intending to be legally bound, hereby agree as follows:

ARTICLE 1

CERTAIN DEFINITIONS

As used in this Agreement, the following terms have the following meaning unless the context requires otherwise (except that capitalized terms used herein but not defined shall have the meaning set forth in the Loan Agreement (as defined below)):

“ Affiliate ” means, with respect to any specified Person, any other Person that, directly or indirectly, through one or more intermediaries, controls or is controlled by, or is under common control with, such specified Person. The term “control” means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of common stock, by contract or otherwise.

“Agreement” means this Agreement, together with all exhibits and schedules hereto, as amended, modified and in effect from time to time.

“Business” means the business and operations of the FNLC Entities as currently conducted.

“Cap” has the meaning set forth in Section 7.5(a) .

“Class A Units” has the meaning set forth in the Limited Liability Company Agreement.

“Class Action Lawsuits” mean those certain class action lawsuits pending in the U.S. District Court for the Northern District of California and styled Stanfield, et al. v. First NLC Financial Services, LLC , Case No. CO6-3892 SBA and Sparrow-Milrot, et al. v. First NLC Financial Services, LLC , Case No. SA CV 07-0019 AHS RCX.

“Class B Units” has the meaning set forth in the Limited Liability Company Agreement.

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

“Company” has the meaning set forth in the Preamble.

“ Company Cap ” has the meaning set forth in Section 7.5(b) .

“ Company Material Adverse Effect ” means any change, effect, event, matter, occurrence or state of facts that (a) has or results in, or would reasonably be expected to have or result in, a material adverse effect on the business, financial condition, assets and properties, taken as a whole, or results of operations of the FNLC Entities, taken as a whole, or (b) does, or would reasonably be expected to, impair or materially delay the Company’s, or FBR’s or FNLC’s ability to promptly perform its obligations hereunder or under the Securities Purchase Agreement, other than, in the case of clause (a), any change, effect, event, matter, occurrence or state of facts to the extent resulting from (i) a decline or worsening of the United States economy in general, (ii) a matter generally affecting the mortgage loan origination industry, which in either of cases (i) or (ii) does not have a disproportionate effect on the FNLC Entities, taken as a whole, or (iii) any action taken by FBR, FNLC or the Company expressly contemplated by this Agreement or the Securities Purchase Agreement or (iv) any action taken by FBR, FNLC or the Company for which NLC Holding has provided its written consent or (v) the announcement of the execution of this Agreement or the expected consummation of the transactions contemplated hereunder (other than any loss of employees of any of the FNLC Entities unrelated to the planned reduction in force or the loss of any mortgage loan brokers working with any of the FNLC Entities or any regulatory action or failure of compliance even if resulting from the announcement of the execution of this Agreement or the expected consummation of the transactions contemplated hereunder). For the avoidance of doubt, losses incurred by the Company in the ordinary course of business shall not be deemed to have a Company Material Adverse Effect.

“Conditions Subsequent” means those conditions set forth in Exhibit G.

“Company Subsidiary” means each Person that is a Subsidiary of the Company.

“Consent” means any consent, approval, authorization, waiver, permit, license, grant, agreement, exemption or order of, or registration, declaration or filing with or notice to, any Person, including any Governmental Entity, that are necessary or required in connection with: (a) the execution and delivery by the Company, FBR, FNLC or NLC Holding of the Transaction Documents; (b) the consummation by the Company, FBR, FNLC or NLC Holding of the transactions contemplated hereunder; or (c) the conduct of the Business by the FNLC Entities following such consummation.

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“Contract” means any contract, agreement, indenture, license, lease, understanding or arrangement or other legally binding contractual right or obligation (whether written or oral).

“Controlling Party” has the meaning set forth in Section 8.6(c) .

“Current Equity” means the outstanding membership interests or other equity or ownership interests of the Company.

“Deductible” has the meaning set forth in Section 7.4(a) .

“DOJ” means the United States Department of Justice.

“Equity Interests” means any capital stock, partnership or limited liability company interest (as applicable) or other equity (including equity appreciation rights) or voting interest or any security or evidence of Indebtedness convertible into or exchangeable for any capital stock, partnership or limited liability company interest or other equity interest, or any right, warrant or option to acquire or obligation to issue or deliver any of the foregoing.

“Equity Right” means any securities, options, warrants, calls, rights, conversion rights, preemptive rights, rights of first refusal, redemption rights, repurchase rights, plans, “tag-along” or “drag-along” rights, commitments, agreements, arrangements or undertakings.

“Estimated Closing Balance Sheet” has the meaning set forth in the Loan Agreement.

“Excluded Taxes” means (i) any Income Taxes of the Company or any Company Subsidiary for any Pre-Closing Period or resulting from any transaction in any Pre-Closing Period, (ii) any Taxes of FBR, FNLC, any of their Affiliates or any other Person (other than the Company and the Company Subsidiaries) for any period (whether before or after the Closing Date), including any Taxes for which the Company or any Company Subsidiary may be liable under Section 1.1502-6 of the Treasury Regulations (or any similar provision of state, local or foreign Tax law), as a transferee or successor, by contract or otherwise and (iii) any Transfer Taxes arising as a result of or otherwise incurred in connection with the transactions contemplated by this Agreement. For purposes of this Agreement, in the case of any Straddle Period, Income Taxes of the Company and the Company Subsidiaries for the Pre-Closing Tax Period shall be computed as if such taxable period ended as of the close of business on the First Closing Date.

“First Closing” shall mean the closing of the Loans as set forth in Section 2.3 .

“First Closing Date” shall mean July 25, 2007.

“FNLC Entities” has the meaning set forth in the Recitals.

“FTC” means the United States Federal Trade Commission.

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“Guaranty” has the meaning set forth in Section 2.4(a) .

“Governmental Entity” means any federal, state, local or foreign government, authority, agency, department, bureau, court, commission or other body, office or instrumentality or an arbitrator of any kind.

“HSR Act” means the Hart-Scott-Rodino Antirust Improvement Act of 1976, as amended.

“Income Tax Claim” means any claim with respect to Income Taxes made by any Taxing Authority that, if pursued successfully, would reasonably be expected to serve as the basis for a claim for indemnification under Section 8.4 .

“Income Taxes” means any federal, state, foreign or local income or franchise Tax measured by or imposed on net income (including all interest and penalties thereon or additions thereto).

“Indebtedness” means (a) all indebtedness for borrowed money or for the deferred purchase price of property or services (other than current trade liabilities incurred in the ordinary course of business and payable in accordance with customary practices), whether or not evidenced by a writing, (b) any other indebtedness that is evidenced by a note, bond, debenture, draft or similar instrument, (c) all obligations under financing or capital leases, (d) all obligations in respect of acceptances issued or created, (e) notes payable and drafts accepted representing extensions of credit, (f) all liabilities secured by any lien on any property, (g) all obligations in respect of purchase agreements, put agreements or similar agreements pursuant to which a commitment has been made to purchase mortgage loans and other property, (h) letters of credit and any other agreements relating to the borrowing of money or extension of credit and (i) any guarantee of any of the foregoing obligations.

“Indemnifying Party” has the meaning set forth in Section 7.6(a) .

“Indemnified Party” has the meaning set forth in Section 7.6(a) .

“Initial Capitalization” shall mean the conversion of amounts outstanding under the Loans, including those deemed outstanding under the Loan Agreement, into Class A Units or Class B Units, as applicable.

“Law” means any domestic or foreign, state or local law, constitution, rule, administrative code, administrative interpretation, ordinance, regulation, decree, policy, reporting and licensing requirement, order, statute, permit, license, certificate, judgment, writ, injunction, directive, stipulation, award, guideline or other requirement of any Governmental Entity.

“Limited Liability Company Agreement” means the Fourth Amended and Restated Operating Agreement of the Company, in the form attached hereto as Exhibit B , as amended, modified and in effect from time to time.

“ Litigation ” means any action, cause of action, claim, demand, suit, Proceeding, citation, summons, subpoena, inquiry or investigation of any nature, civil, criminal, regulatory or otherwise, in law or in equity, pending or threatened, by or before any court, tribunal, arbitrator or other Governmental Entity.

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“Loan Agreement” shall mean the Loan and Security Agreement, dated as of the First Closing Date, by and among FBR, FNLC, as lender, NLC Holding, as agent and lender, and the Company, as borrower, in the form attached hereto as Exhibit A , providing for the Loans, as amended, modified and in effect from time to time.

“Loans” shall mean the loans to be made by the lenders under the Loan Agreement.

“ Loss ” means any liability, damage, claim, demand, obligation, loss, diminution of value, fine, cost, expense, royalty, Litigation, or deficiency (whether known, unknown, disclosed, undisclosed, absolute, contingent, accrued or otherwise, whether or not resulting from third-party claims), including interest and penalties with respect thereto and out-of-pocket expenses and all attorneys’ and accountants’ fees and expenses incurred in the investigation, defense or settlement of any of the same or in asserting, preserving or enforcing any of the respective rights in connection therewith under any Transaction Document.

“Maturity Date” has the meaning given to such term in the Loan Agreement.

“Members’ Agreement” shall mean the Members’ Agreement, dated as of the Second Closing Date, by and among the Company, NLC Holding, and FNLC in the form attached hereto as Exhibit C , as amended, modified and in effect from time to time.

“ Mortgage Loan Indemnity Agreement” shall mean the Mortgage Loan Indemnity Agreement, dated as of July 25, 2007, by and among the Company and FBR.

“Mortgage Loan” has the meaning set forth in the Loan Agreement.

“Mortgage Loan Losses” shall mean those Losses incurred by the Company and accounted for in accordance with generally accepted accounting principles in the United States that result from a breach of the Company’s representations or warranties with respect to Mortgage Loans sold by the Company prior to the First Closing or from its obligation to repurchase any such Mortgage Loans as a result of an early payment default.

“ Non-Controlling Party ” has the meaning set forth in Section 8.6(c) .

“Parties” and “Party” have the meanings set forth in the Preamble.

“ Payee Party ” has the meaning set forth in Section 7.10 .

“Payor Party” has the meaning set forth in Section 7.10 .

“Person” means an individual, corporation, partnership, association, limited liability company, joint stock company, trust or trustee thereof, estate or executor thereof, unincorporated organization or joint venture, court or governmental unit or any agency or subdivision thereof, or any other legally recognizable entity.

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“Post-Closing Period” means any taxable period (or portion thereof) beginning after the First Closing Date.

“Pre-Closing Period” means any taxable period (or portion thereof) ending on or prior to the First Closing Date.

“Preferred Interests” shall mean, collectively, Class A Units and Class B Units.

“ Proceeding ” means any judicial, administrative or arbitral action, suit, claim, investigation, examination, audit, review, inquiry or proceeding brought by or on behalf of any Governmental Entity or any other Person.

“Real Estate Losses” shall mean any Losses incurred by the Company or its Subsidiaries with respect to the closing or relocation of any of the operating facilities of the Company or any of its Subsidiaries set forth on Schedule 1.1 attached hereto and the termination of the employees set forth on Schedule 1.2 ; provided that following the First Closing, Schedules 1.1 and 1.2 may be modified with the prior written consent of the Parties.

“Registration Rights Agreement” shall mean the Registration Rights Agreement, dated as of the Second Closing Date, by and among the Company, NLC Holding, and FNLC in the form attached hereto as Exhibit D , as amended, modified and in effect from time to time.

“Second Closing” has the meaning set forth in Section 3.1 .

“Second Closing Date” has the meaning set forth in Section 3.1 .

“Securities Purchase Agreement” means that certain Securities Purchase Agreement by and among the Parties hereto, in the form attached hereto as Exhibit E , providing for the purchase by NLC Holding of Class A Units, as amended, modified and in effect from time to time.

“ Settlement Agreement ” means all those certain settlement agreements, dated July 24, 2007, as filed with the U.S. District Court for the Northern District of California on July 24, 2007.

“Straddle Period” means any taxable period beginning on or prior to and ending after the First Closing Date.

“Subsidiary” of a Person means an Affiliate of such Person of which fifty percent (50%) or more of the voting stock (or of any general partnership or other voting or controlling equity interest in the case of a Person that is not a corporation) is beneficially owned by the Person directly or indirectly through one or more other Persons.

“Tax” means any federal, state, foreign or local net or gross income, alternative minimum, accumulated earnings, personal holding company, franchise, doing business, capital stock, net worth, capital, profits, windfall profits, gross receipts, business, securities transaction, value added, sales, use, excise, custom, transfer, registration, stamp, premium, real property, personal property, ad valorem, intangibles, rent, occupancy, license, occupational, employment,

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unemployment, social security, disability, workers’ compensation, payroll, withholding, estimated or other similar tax, duty or other governmental charge of any kind whatsoever (including all interest and penalties thereon and additions thereto).

“Tax Proceeding” has the meaning set forth in Section 8.6(b) .

“Tax Return” means any return, report, declaration, form, claim for refund or information statement relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof.

“Taxing Authority” means any governmental agency, board, bureau, body, department or authority of any United States federal, state or local jurisdiction or any foreign jurisdiction, having or purporting to exercise jurisdiction with respect to any Tax.

“Third Party Claim” has the meaning set forth in Section 7.6(b) .

“Transfer Tax” means any real or personal property transfer tax, sales, use, registration, value-added, stamp, stock transfer or other similar tax or related amounts (including any interest, penalties and additions to tax).

“Transaction Documents” means this Agreement, the Loan Agreement, the Limited Liability Company Agreement, the Members’ Agreement, the Registration Rights Agreement, the Mortgage Loan Indemnity Agreement and the other agreements, instruments and documents required to be delivered by NLC Holding, FBR, FNLC, or the Company in connection with the transactions contemplated by this Agreement.

“Treasury Regulations” means the final and temporary federal income tax regulations promulgated under the Code, as the same may be amended hereafter from time to time.

“Wage and Hour Classifications” means those Laws relating to wage and hour classifications, recordkeeping, pay practice, compensation, benefits, remuneration, withholdings, meal periods or rest periods under the Fair Labor Standards Act or any other Law that compels the Company to take into account the classification or job responsibilities of any position in determining or providing compensation, benefits, working conditions or business operations as they relate to interactions with employees (other than Litigation that is primarily unrelated to pay or that relates to employment discrimination or that relates to unfair labor practices under the National Labor Relations Act).

“WAMU Agreement” has the meaning set forth in Section 2.4(a) .

ARTICLE 2

STAGE ONE

Section 2.1. Loans .

(a) Each of the Company, NLC Holding, FBR and FNLC agrees, as of the First Closing, to enter into the Loan Agreement on the terms and conditions contained therein.

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(b) At the First Closing, subject to the terms and conditions set forth in the Loan Agreement, NLC Holding will make a Loan in a principal amount of $60,000,000 and FNLC will make a Loan in a principal amount equal to $15,000,000, as such amount may be adjusted pursuant to Section 2.1 of the Loan Agreement, to the Company.

(c) The Loans shall bear interest on the outstanding principal amounts thereof in accordance with the terms of the Loan Agreement.

(d) The Loans shall be secured by all the assets of the Company in accordance with the terms of the Loan Agreement.

Section 2.2. Repayment of Loans .

(a) The Loans shall mature no later than the Maturity Date, and shall be repaid as provided in the Loan Agreement. Payments in respect of the Loans shall be applied (i) first, to pay all accrued but unpaid interest on the Loans made by NLC Holding and FNLC and (ii) second, to repay the outstanding principal balance (for avoidance of doubt, such amounts shall exclude capitalized interest) of the Loans made by NLC Holding and FNLC. All amounts paid to NLC Holding and FNLC with respect to the Loans shall be made pro rata based on the respective Loan Percentages (as defined in the Loan Agreement).

(b) If prior to the Maturity Date, the Conditions Subsequent have been satisfied or waived, the total amount of the Loans made to such date, plus any and all capitalized interest and other amounts outstanding and/or due and owing as part of the Loans, shall be deemed to be repaid and converted into Class A Units and Class B Units, as applicable.

Section 2.3. First Closing .

Subject to the satisfaction or waiver of the conditions set forth in Article 6 , the First Closing shall take place on the First Closing Date at such date, time or place agreed to in writing by FNLC and NLC Holding.

Section 2.4. FBR Guaranty .

(a) The Parties acknowledge that FBR currently guaranties the Company’s obligations under that certain Mortgage Loan Repurchase Agreement (the “WAMU Agreement” ), dated as of April 12, 2006, by and among Washington Mutual Bank, FA, MHC I, Inc., First NLC, Inc., NLC, Inc., the Company and FBR, pursuant to a guaranty dated as of April 6, 2006 (the “Guaranty” ).

(b) The parties agree to use their commercially reasonable efforts to enter into a new or restructured mortgage loan repurchase agreement without a guaranty from FBR. FBR agrees that it shall maintain its Guaranty, and shall not amend the terms thereof, for three months following the First Closing Date.

(c) For each of the first three months following the First Closing Date, FBR shall receive a monthly fee from the Company equal to the product of 0.20% and the average amount drawn under such repurchase agreement during such monthly period, payable in arrears on the last day of the applicable monthly period.

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(d) If and to the extent that FBR is obligated to make any payments pursuant to the Guaranty, the Company shall promptly repay FBR the amount actually paid by FBR under the Guaranty, such amount to be payable prior to any payments made under the Loan Agreement or any Transaction Document, including the Management Services Agreement (as defined in the Securities Purchase Agreement).

(e) Notwithstanding the foregoing, the Parties acknowledge and agree that in no event shall FBR be entitled to be paid or repaid any amounts pursuant to Section 2.4(c) or (d)  with respect to Mortgage Loans outstanding as of or prior to the First Closing Date.

(f) For purposes of clarity, the Parties acknowledge that the Company shall be able to fund Mortgage Loans under the WAMU Agreement in accordance with the terms thereof if the Company does not have any availability under any secured warehouse financing provided by Credit Suisse First Boston Mortgage Capital LLC or other secured warehouse financing lenders, in each case acceptable to NLC Holding in its sole discretion.

ARTICLE 3

STAGE TWO

Section 3.1. Conditions Subsequent .

The Initial Capitalization shall occur three Business Days (or such other date as mutually agreed to by the Parties) (such date, the “ Second Closing Date ”) after receipt by FBR and FNLC, on the one hand, and NLC Holding, on the other hand, of satisfactory evidence that each of the conditions set forth in Exhibit G has been satisfied (the “ Second Closing ”). Notwithstanding the foregoing, if FBR and FNLC, on the one hand, and NLC Holding, on the other hand, receive satisfactory evidence that each of the conditions set forth in Sections (a)-(g)  of Exhibit G have been satisfied by the Party responsible therefor, or waived in writing by the Party benefited thereby, the Second Closing, including the Initial Capitalization and all actions required by Section 3.2 , shall occur within three Business Days of the satisfaction or waiver of such conditions; provided , however , that in such a Second Closing, the Current Equity will be cancelled and the Preferred Interests will be issued to FNLC and NLC Holding in exchange for the conversion of only 20% of the amount of the Loans, pro rata as between FNLC and NLC Holdings, including those amounts deemed outstanding under the Loan Agreement. The balance of the Loans shall remain outstanding until either (a) FBR and FNLC, on the one hand, and NLC Holding, on the other hand, receive satisfactory evidence that the condition set forth in Section (h) of Exhibit G has been satisfied or waived in writing by the Parties, at which time the Parties shall be issued additional Preferred Interests in exchange for the conversion of all outstanding amounts under the Loans, or (b) the Loans are otherwise due in accordance with the terms of the Loan Agreement.

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Section 3.2. Additional Actions .

At the Second Closing:

(a) The parties thereto will execute, deliver and perform the Securities Purchase Agreement.

(b) The Company, FNLC, and NLC Holding will enter into the Limited Liability Company Agreement, the Members’ Agreement and the Registration Rights Agreement.

(c) Pursuant to the Limited Liability Company Agreement, the Current Equity will be cancelled and the Preferred Interests will be issued to FNLC and NLC Holding in exchange for the conversion of all outstanding amounts under the Loans, including those amounts deemed outstanding under the Loan Agreement. FNLC hereby acknowledges and agrees that, effective as of the Second Closing, (A) the Current Equity is surrendered and terminated and (B) FNLC shall no longer have any rights with respect to such Current Equity, except as set forth in the Limited Liability Company Agreement (including its rights to the Preferred Interests).

ARTICLE 4

REPRESENTATIONS AND WARRANTIES OF THE PARTIES

Each Party represents and warrants as to itself as follows:

Section 4.1. Organization and Good Standing .

Each Party is duly organized, validly existing and in good standing under the laws under which it has been incorporated or otherwise formed. Each Party has all requisite power and authority (corporate and other) to own, operate and lease its assets and properties and to carry on its business as presently conducted.

Section 4.2. Power and Authorization .

Such Party has full legal right, power and authority necessary to enter into and perform its obligations and consummate the transactions contemplated to be consummated by it under this Agreement and under the Transaction Documents to which it is a party. The execution and delivery of this Agreement and the consummation by such Party of the transactions contemplated to be consummated by it hereby have been duly authorized by all necessary corporate or organizational action and no other corporate or organizational proceedings on the part of such Party is necessary to authorize this Agreement or consummate the transactions contemplated hereby. This Agreement has been and, at the First Closing and the Second Closing, each Transaction Document to which such Party is a party will have been, duly and validly executed and delivered by such Party. Assuming the due authorization, execution and delivery of the other parties hereto and thereto, this Agreement constitutes, and each Transaction Document to which such Party is a party will constitute when executed and delivered by such Party, the legal, valid and binding obligation of such Party, enforceable against such Party in accordance with its respective terms, except as such enforceability is subject to the effect of (a) any applicable bankruptcy, insolvency, reorganization or similar laws relating to or affecting creditors’ rights generally and (b) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).

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Section 4.3. No Conflicts .

(a) The execution, delivery and performance of this Agreement and the Transaction Documents to which such Party is a party do not and will not (with or without the passage of time or the giving of notice):

(i) violate or conflict with the certificate or articles of incorporation or bylaws or other organizational document, if any, of such Party;

(ii) violate or conflict with any Law; or

(iii) violate or conflict with, result in a breach or termination of, or constitute a default or otherwise cause any loss of benefit under any Contract to which such Party is a party or by which such Party or any of its assets are bound, or give to others any rights (including rights of termination, foreclosure, cancellation or acceleration), in or with respect to such Party or any of its assets.

Section 4.4. Brokers .

No Person acting on behalf of either Party or any of their respective officers, directors or employees or any of their affiliates or under the authority of any of the foregoing is or will be entitled to any brokers’ or finders’ fee or any other commission or similar fee, directly or indirectly, from any of such Persons in connection with any of the transactions contemplated by this Agreement. Each Party shall be responsible for any such required payments to its own broker or finder, and shall fully indemnify the other Party for such payments on a dollar-for-dollar basis.

ARTICLE 5

REPRESENTATIONS AND WARRANTIES OF FBR AND FNLC

Each of FBR and FNLC, jointly and severally, represents and warrants to NLC Holding as follows:

Section 5.1. Title to Current Equity .

FNLC is the sole record and beneficial owner of all of the Current Equity as set forth on Schedule 5.1, and, except as set forth in Schedule 5.1, has good and valid title to such Current Equity, free and clear of any Liens and with no restriction on the voting rights and other incidents of record and beneficial ownership pertaining thereto. FNLC is not the subject of any bankruptcy, reorganization or similar proceeding. Except for this Agreement, the documents contemplated hereunder and as set forth on Schedule 5.1, there are no outstanding Contracts or understandings between FBR, FNLC and any other Person with respect to the acquisition, disposition, transfer, registration or voting of or any other matters in any way pertaining or relating to, or any other restrictions on any of the Current Equity and, except as contemplated by this Agreement, neither FBR nor FNLC has any right to receive or acquire any Equity Interest of any of the FNLC Entities.

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Section 5.2. Equity Rights .

Except as contemplated by this Agreement, there are no outstanding Equity Rights (a) obligating F