8-K

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): December 29, 2006

FIELDSTONE INVESTMENT CORPORATION
__________________________________________
(Exact name of registrant as specified in its charter)

Maryland	000-50938	74-2874689
_____________________ (State or other jurisdiction	_____________ (Commission	______________ (I.R.S. Employer
of incorporation)	File Number)	Identification No.)
11000 Broken Land Parkway, Columbia, Maryland		21044
_________________________________ (Address of principal executive offices)		___________ (Zip Code)

Registrant’s telephone number, including area code: (410) 772-7200

Not Applicable
______________________________________________
Former name or former address, if changed since last report

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[  ]  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[  ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[  ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[  ]  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into a Material Definitive Agreement.

On December 29, 2006, Fieldstone Investment Corporation ("Fieldstone" or the "Company") and Fieldstone Mortgage Company, a direct wholly owned subsidiary of Fieldstone, entered into Amendment No. 1 (the "First Amendment") to that certain Amended and Restated Master Repurchase Agreement (the "Master Repurchase Agreement") with Merrill Lynch Bank USA, dated as of October 31, 2006. The First Amendment amended the net worth covenant. The First Amendment did not change any other material terms of the Master Repurchase Agreement.

The foregoing description of the First Amendment is qualified in its entirety by the First Amendment, a copy of which is attached as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

As of December 29, 2006, Cynthia L. Harkness, Senior Vice President – General Counsel and Secretary will be leaving the Company effective January 15, 2007.

Thomas S. Brennan, the Company’s Assistant Corporate Secretary and Senior Counsel will assume the general counsel duties on an interim basis while the Company conducts a search for a general counsel. Mr. Brennan has been an employee of the Company since November 2005 focusing on corporate and securities matters.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

10.1 Amendment No. 1, dated as of December 29, 2006, to the Amended and Restated Master Repurchase Agreement, dated October 31, 2006, by and among Fieldstone Investment Corporation, Fieldstone Mortgage Company and Merrill Lynch Bank USA.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	FIELDSTONE INVESTMENT CORPORATION
January 8, 2007	By:	/s/ Michael J. Sonnenfeld
		Name: Michael J. Sonnenfeld
		Title: President and Chief Executive Officer

Exhibit Index

Exhibit No.	Description
10.1	Amendment No. 1, dated as of December 29, 2006, to the Amended and Restated Master Repurchase Agreement, dated October 31, 2006, by and among Fieldstone Investment Corporation, Fieldstone Mortgage Company and Merrill Lynch Bank USA.

EX-10.1

Exhibit 10.1

EXECUTION VERSION

AMENDMENT NO. 1
TO AMENDED AND RESTATED MASTER
REPURCHASE AGREEMENT

Amendment No. 1, dated as of December 29, 2006 (this “Amendment”) is entered into by and among FIELDSTONE MORTGAGE COMPANY, a Maryland corporation (“FMC” and a “Seller”), FIELDSTONE INVESTMENT CORPORATION, a Maryland corporation (“FIC” and a “Seller” and, together with FMC, the “Sellers”), and MERRILL LYNCH BANK USA, a Utah industrial loan corporation (the “Buyer”).

RECITALS

The Buyer and the Sellers are parties to that certain Amended and Restated Master Repurchase Agreement, dated as of October 31, 2006, (as the same may have been amended and supplemented from time to time, the “Existing Repurchase Agreement” and as amended by this Amendment, the “Repurchase Agreement”). Capitalized terms used but not otherwise defined herein shall have the meanings given to them in the Existing Repurchase Agreement.

The Buyer and the Sellers have agreed, subject to the terms and conditions of this Amendment, that the Existing Repurchase Agreement be amended to reflect certain agreed upon revisions to the terms of the Existing Repurchase Agreement.

Accordingly, the Buyer and the Sellers hereby agree, in consideration of the mutual premises and mutual obligations set forth herein, that the Existing Repurchase Agreement is hereby amended as follows:

SECTION 1. Waiver. For purposes of this Amendment, this Section 1 will be effective only for the period from and including October 1, 2006 through and including December 31, 2006 (the “Waiver Period”).

1.1 Covenants. Section 12(k) of the Existing Repurchase Agreement is hereby temporarily amended by deleting clause (i) thereto in its entirety and replacing it with the following language:

“(i) Maintenance of Consolidated Tangible Net Worth. FIC shall maintain a Consolidated Tangible Net Worth of not less than $375,000,000.”

SECTION 2. Conditions Precedent. This Amendment shall become effective on October 1, 2006 (the “Amendment Effective Date”) subject to the satisfaction of the following conditions precedent:

2.1 Delivered Documents. On the Amendment Effective Date, the Buyer shall have received the following documents, each of which shall be satisfactory to the Buyer in form and substance:

(a) this Amendment, executed and delivered and duly authorized officers of the Buyer and the Sellers; and

(b) such other documents as the Buyer or counsel to the Buyer may reasonably request.

SECTION 3. Limited Effect. Except as expressly amended and modified by this Amendment, the Existing Repurchase Agreement shall continue to be, and shall remain, in full force and effect in accordance with its terms. Section 1 of this Amendment shall expire upon the expiration of the Waiver Period at which time the terms of the Existing Repurchase Agreement shall revert to that set forth in the Existing Repurchase Agreement and be applied on a prospective basis thereafter. Other than as expressly set forth herein, the execution of this Amendment by the Buyer shall not operate as a waiver of any of its rights, powers or privileges under the Repurchase Agreement or any other Repurchase Document, including without limitation, any rights, powers or privileges relating to other existing or future breaches of, or Defaults or Events of Default under, the Repurchase Agreement or any other Repurchase Document (whether the same or of a similar nature as the breaches identified herein or otherwise) except as expressly set forth herein.

SECTION 4. Fees. The Sellers agree to pay as and when billed by the Buyer all of the reasonable fees, disbursements and expenses of counsel to the Buyer in connection with the development, preparation and execution of, this Amendment or any other documents prepared in connection herewith and receipt of payment thereof shall be a condition precedent to the Buyer entering into any Transaction pursuant hereto.

SECTION 5. Confidentiality. The parties hereto acknowledge that this Amendment, the Existing Repurchase Agreement, and all drafts thereof, documents relating thereto and transactions contemplated thereby are confidential in nature and the Seller agree that, unless otherwise directed by a court of competent jurisdiction or as is necessary to do so in working with governmental agencies or regulatory bodies in order to comply with any applicable federal or state laws, they shall limit the distribution of such documents and the discussion of such transactions to such of its officers, employees, attorneys, accountants and agents as is required in order to fulfill its obligations under such documents and with respect to such transactions.

SECTION 6. GOVERNING LAW. THIS AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

SECTION 7. Counterparts. This Amendment may be executed in one or more counterparts and by different parties hereto on separate counterparts, each of which, when so executed, shall constitute one and the same agreement.

SECTION 8. Conflicts. The parties hereto agree that in the event there is any conflict between the terms of this Amendment, and the terms of the Existing Repurchase Agreement, the provisions of this Amendment shall control.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the parties have caused their names to be signed hereto by their respective officers thereunto duly authorized as of the day and year first above written.

Buyer: MERRILL LYNCH BANK USA, as Buyer

By: /s/ James Cason
Name: James Cason
Title: Vice President

Seller: FIELDSTONE INVESTMENT CORPORATION, as Seller

By: /s/ Mark C. Krebs
Name: Mark C. Krebs
Title: Sr. Vice President & Treasurer

Seller: FIELDSTONE MORTGAGE COMPANY, as Seller

By: /s/ Mark C. Krebs
Name: Mark C. Krebs
Title: Sr. Vice President & Treasurer