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): March 30, 2007

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.

Credit Suisse First Boston Mortgage Capital LLC Amendment No. 8
Credit Suisse, New York Branch Amendment No. 3
JPMorgan Chase Bank, N.A. Amendment No. 4
Lehman Brothers Bank, FSB Sixth Amendment
Merrill Lynch Bank USA Amendment No. 2

On March 30, 2007, Fieldstone Investment Corporation ("Fieldstone") and Fieldstone Mortgage Company, a direct wholly owned subsidiary of Fieldstone ("Fieldstone Mortgage" and collectively with Fieldstone, the "Sellers") completed amendments on their existing repurchase agreements with the following lenders: Credit Suisse First Boston Mortgage Capital LLC, Credit Suisse, New York Branch, JPMorgan Chase Bank, N.A., Lehman Brothers Bank, FSB and Merrill Lynch Bank USA. Each of the amendments lowered the adjusted tangible net worth covenant to $275 million, waived or amended the net profitability covenant with respect to the first two quarters of 2007, or in the case of the Lehman and the Credit Suisse First Boston Mortgage Capital amendments, the first quarter o f 2007, set the minimum liquidity at $20 million, increased the maximum permitted combined ratio of consolidated indebtedness to adjusted tangible net worth to 18:1 and reduced the ratio of total debt excluding securitization debt to equity from 10:1 to 7:1. As a result of these amendments, Fieldstone expects to be in compliance with their warehouse and repurchase facility covenants as of March 31, 2007. The covenant amendments remain in effect until the termination date of the various credit facilities, with the exception of the Lehman facility, which expires on April 13, 2007, as Lehman and Fieldstone continue to work on a more permanent amendment.

Additionally, the maximum aggregate purchase price for the following facilities has been amended as follows (i) the Credit Suisse First Boston Mortgage Capital facility has increased its maximum aggregate purchase price from $300 million to $400 million, (ii) the Credit Suisse, New York facility has reduced its maximum aggregate purchase price from $50 0 million to $241 million and (iii) the Merrill Lynch Bank facility has reduced its maximum aggregate purchase price from $400 million to $200 million. As a result of the changes in the maximum aggregate purchase price for these facilities, Fieldstone has revised their committed level of whole loan funding capacity from $1.85 billion as of December 31, 2006 to $1.49 billion as of March 31, 2007, which Fieldstone believes is sufficient for their current level of originations. As of December 31, 2006, Fieldstone was using $908 million of their whole loan funding capacity.

The foregoing description of the amendments is qualified in its entirety by the amendments, copies of which are attached as Exhibits 10.1, 10.2, 10.3, 10.4 and 10.5 to this Current Report on Form 8-K and incorporated herein by reference.

Certain matters discussed in this current report may constitute "forward-looking statements" within the meaning of the federal securities laws including Fieldstone’s expectations with respect to its covenant compliance and whole loan funding capacity. These statements are being made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Actual results and the timing of certain events may differ materially from those indicated by such forward-looking statements due to a variety of risks and uncertainties, many of which are beyond Fieldstone’s ability to control or predict, including but not limited to (i) Fieldstone’s ability to implement or change aspects of its portfolio strategy; (ii) interest rate volatility and the level of interest rates generally; (iii) the sustainability of loan origination volumes and levels of origination costs; (iv) compliance with the covenants in Fieldstone’s credit and repurchase facilities and continued availability of credit facilities for the liquidity it needs to support its origination of mortgage loans; (v) the ability to sell or securitize mortgage loans on favorable economic terms; (vi) det erioration in the credit quality of Fieldstone’s loan portfolio; (vii) the nature and amount of competition; (viii) deterioration in the performance of Fieldstone’s loans sold and the related repurchase activity; (ix) the impact of changes to the fair value of Fieldstone’s interest rate swaps on its net income, which will vary based upon changes in interest rates and could cause net income to vary significantly from quarter to quarter; and (x) other risks and uncertainties outlined in Fieldstone’s periodic reports filed with the Securities and Exchange Commission. We undertake no obligation to update or publicly release any revisions to forward-looking statements to reflect events, circumstances or changes in expectations after the date of this current report.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

10.1 Amendment No. 8, dated as of March 30, 2007, to the Second Amended and Restated Master Repurchase Agreement, dated as of March 31, 2005, as amended, among Credit Suisse First Boston Mortgage Capital LLC, Fieldstone Mortgage Company and Fieldstone Investment Corporation.

10.2 Amendment No. 3, dated as of March 30, 2007, to the Amended and Restated Master Repurchase Agreement, dated as of November 14, 2006, as amended, among Credit Suisse, New York Branch, Fieldstone Mortgage Company and Fieldstone Investment Corporation.

10.3 Amendment No. 4, dated as of March 30, 2007, to the Master Repurchase Agreement, dated as of July 14, 2006, as amended, among JPMorgan Chase Bank, N.A., Fieldstone Mortgage Company and Fieldstone Investment Corporation.

10.4 The Sixth Amendment, dated as of March 30, 2007, to the Second Amended and Restated Master Repurchase Agreement Governing Purchases and Sales of Mortgage Loans, dated as of December 29, 2004, as amended, amon g Lehman Brothers Bank, FSB, Fieldstone Mortgage Company and Fieldstone Investment Corporation.

10.5 Amendment No. 2, dated as of March 30, 2007, to the Amended and Restated Master Repurchase Agreement, dated as of October 31, 2006, as amended, among Merrill Lynch Bank USA, Fieldstone Mortgage Company and Fieldstone Investment Corporation.

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
April 5, 2007	By:	/s/ Nayan V. Kisnadwala
		Name: Nayan V. Kisnadwala
		Title: Executive Vice President and Chief Financial Officer

Exhibit Index

Exhibit No.	Description
10.1	Amendment No. 8, dated as of March 30, 2007, to the Second Amended and Restated Master Repurchase Agreement, dated as of March 31, 2005, as amended, among Credit Suisse First Boston Mortgage Capital LLC, Fieldstone Mortgage Company and Fieldstone Investment Corporation.
10.2	Amendment No. 3, dated as of March 30, 2007, to the Amended and Restated Master Repurchase Agreement, dated as of November 14, 2006, as amended, among Credit Suisse, New York Branch, Fieldstone Mortgage Company and Fieldstone Investment Corporation.
10.3	Amendment No. 4, dated as of March 30, 2007, to the Master Repurchase Agreement, dated as of July 14, 2006, as amended, among JPMorgan Chase Bank, N.A., Fieldstone Mortgage Company and Fieldstone Investment Corporation.
10.4	The Sixth Amendment, dated as of March 30, 2007, to the Second Amended and Restated Master Repurchase Agreement Governing Purchases and Sales of Mortgage Loans, dated as of December 29, 2004, as amended, among Lehman Brothers Bank, FSB, Fieldstone Mortgage Company and Fieldstone Investment Corporation.
10.5	Amendment No. 2, dated as of March 30, 2007, to the Amended and Restated Master Repurchase Agreement, dated as of October 31, 2006, as amended, among Merrill Lynch Bank USA, Fieldstone Mortgage Company and Fieldstone Investment Corporation.

EX-10.1

Exhibit 10.1

EXECUTION VERSION

AMENDMENT NO. 8
TO SECOND AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT

Amendment No. 8, dated as of March 30, 2007 (this “Amendment”), among CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC (the “Buyer”), FIELDSTONE MORTGAGE COMPANY (a “Seller”) and FIELDSTONE INVESTMENT CORPORATION (a “Seller” and, together with Fieldstone Mortgage Company, the “Sellers”).

RECITALS

The Buyer and the Sellers are parties to that certain Second Amended and Restated Master Repurchase Agreement, dated as of March 31, 2005, as amended by that certain Amendment No. 1 to Second Amended and Restated Master Repurchase Agreement, dated as of October 19, 2005, Amendment No. 2 to Second Amended and Restated Master Repurchase Agreement, dated as of February 22, 2006, Amendment No. 3 to Second Amended and Restated Master Repurchase Agreement, dated as of April 27, 2006, Amendment No. 4 to Second Amended and Restated Master Repurchase Agreement, dated as of November 30, 2006, Amendment No. 5 to Second Amended and Restated Master Repurchase Agreement, dated as of December 20, 2006, Amendment No. 6 to Second Amended and Restated Master Repurchase Agreement, dated as of December 29, 2006, and Amendment No. 7 to Second Amended and Restated Master Repurchase Agreement, dated as of January 31, 2007 (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. First Amendment Period. For purposes of this Amendment, this Section 1 will be effective only for the period from and including March 30, 2007 through and including the Termination Date (the “First Amendment Period”).

(i) Section 2 of the Existing Repurchase Agreement is hereby amended by deleting the definitions of “Alt-A Mortgage Loan,” “Market Value” and “Maximum Aggregate Purchase Price” in their entirety and replacing the same with the following language, which amendment shall be effective solely during the First Amendment Period:

““Alt-A Mortgage Loan” means a Mortgage Loan originated in accordance with the criteria established by Buyer for Alt-A Mortgage Loans, as determined by Buyer in its sole discretion and which has a FICO score of at least 660.”

““Market Value” means, with respect to any Purchased Mortgage Loan as of any date, the whole-loan servicing released fair market value of such Purchased Mortgage Loan on such date as determined by Buyer (or an Affiliate thereof) in its good faith discretion. Without limiting the generality of the foregoing, each Seller acknowledges that the Market Value of a Purchased Mortgage Loan may be reduced to zero by Buyer if:

(i) a material breach of a representation, warranty or covenant made by any Seller in this Agreement with respect to such Purchased Mortgage Loan has occurred and is continuing except, with respect to Repurchased Mortgage Loans, those disclosed by such Seller and accepted by the Buyer pursuant to clause (b) of the definition of Repurchased Mortgage Loan;

(ii) a First Payment Default occurs with respect to such Purchased Mortgage Loan;

(iii) such Purchased Mortgage Loan has been released from the possession of the Custodian under the Custodial Agreement (other than to a Take-out Investor pursuant to a Bailee Letter) for a period in excess of ten (10) calendar days;

(iv) such Purchased Mortgage Loan has been released from the possession of the Custodian under the Custodial Agreement to a Take-out Investor pursuant to a Bailee Letter for a period in excess of 45 calendar days;

(v) such Purchased Mortgage Loan has been subject to a Transaction for a period of greater than (a) 90 days (unless the Mortgage Loan is an Aged Loan or Repurchased Mortgage Loan) or (b) 120 days with respect to each Aged 90 Day Loan or Repurchased Mortgage Loan or (c) 180 days with respect to each Aged 120 Day Loan or (c) 364 days with respect to each Aged 180 Day Loan;

(vi) such Purchased Mortgage Loan is a Wet-Ink Mortgage Loan for which the Wet-Ink Mortgage File has not been delivered to the Custodian on or prior to the eighth Business Day after the related Purchase Date;

(vii) when the Purchase Price for such Purchased Mortgage Loan is added to other Purchased Mortgage Loans, the aggregate Purchase Price of all Wet-Ink Mortgage Loans that are Purchased Mortgage Loans exceeds (i) 40% of the Maximum Aggregate Purchase Price for the first five Business Days and the last five Business Days of each month or (ii) 30% of the Maximum Aggregate Purchase Price for the remainder of the month;

(viii) when added to other Purchased Mortgage Loans, the aggregate Purchase Price of all Sub-Prime Mortgage Loans that are Purchased Mortgage Loans exceeds $280 million dollars;

(ix) when added to other Purchased Mortgage Loans, the aggregate Purchase Price of all Second Lien Mortgage Loans and HELOCs that are Purchased Mortgage Loans (other than Portfolio Second Lien Mortgage Loans) exceeds $60 million dollars;

(x) when added to other Purchased Mortgage Loans, the aggregate Purchase Price of all Aged 90 Day Loans and Aged 120 Day Loans, combined, that are Purchased Mortgage Loans exceeds $200 million dollars;

(xi) when added to other Purchased Mortgage Loans, the aggregate Purchase Price of all Negative Amortizations Loans exceeds $4 million;

(xii) when added to other Purchased Mortgage Loans, the aggregate Purchase Price of all Portfolio Second Lien Mortgage Loans exceeds $150 million (the “Portfolio Second Lien Mortgage Loan Sublimit”);

(xiii) when added to other Purchased Mortgage Loans, the aggregate Purchase Price of all Portfolio Second Lien Mortgage Loans that are Delinquent Mortgage Loans exceeds 15% of the Portfolio Second Lien Mortgage Loan Sublimit;

(xiv) when added to other Purchased Mortgage Loans, the aggregate Purchase Price of all Delinquent Mortgage Loans (other than Portfolio Second Lien Mortgage Loans and including Delinquent Mortgage Loans which may be Repurchased Mortgage Loans) exceeds $20 million;

(xv) when added to other Purchased Mortgage Loans, the aggregate Purchase Price of all Non-Performing Mortgage Loans (including Non-Performing Mortgage Loans which may be Repurchased Mortgage Loans) exceeds $15 million;

(xvi) when added to other Purchased Mortgage Loans, the aggregate Purchase Price of all Aged 180 Day Loans, Repurchased Mortgage Loans, Reperforming Mortgage Loans, Delinquent Mortgage Loans and Non-Performing Mortgage Loans, combined, exceeds $35 million;

(xvii) such Purchased Mortgage Loan is no longer acceptable for purchase by Buyer (or an Affiliate thereof) under any of the flow purchase or conduit programs for which Sellers then have been approved due to a Requirement of Law relating to consumer credit laws or otherwise.”

““Maximum Aggregate Purchase Price” means FOUR HUNDRED MILLION DOLLARS ($400,000,000).”

SECTION 2. For purposes of this Amendment, this Section 2 will be effective only for the period from and including March 1, 2007 through and including the Termination Date (the “Second Amendment Period,” and together with the First Amendment Period, the “Amendment Periods”).

(i) Section 14(a) of the Existing Repurchase Agreement is hereby amended by deleting it in its entirety and replacing it with the following language, which amendment shall be effective solely during the Second Amendment Period:

“(a) Minimum Consolidated Adjusted Tangible Net Worth. The Sellers shall maintain a Consolidated Adjusted Tangible Net Worth of at least $275 million.”

(ii) Section 14(b) of the Existing Repurchase Agreement is hereby amended by deleting it in its entirety and replacing it with the following language, which amendment shall be effective solely during the Second Amendment Period:

“(b) Indebtedness to Consolidated Adjusted Tangible Net Worth Ratio. The Sellers’ ratio of consolidated Indebtedness to Consolidated Adjusted Tangible Net Worth shall not exceed 18:1.”

(iii) Section 14(f) of the Existing Repurchase Agreement is hereby amended by deleting it in its entirety and replacing it with the following language, which amendment shall be effective solely during the Second Amendment Period:

“(f) Maintenance of Profitability. [Reserved.]”

(iv) Section 14(ee) of the Existing Repurchase Agreement is hereby amended by deleting it in its entirety and replacing it with the following language, which amendment shall be effective solely during the Second Amendment Period:

“(ee) Non-Structured Securities Indebtedness to Consolidated Adjusted Tangible Net Worth Ratio. The Sellers’ ratio of consolidated Indebtedness less Structured Securities Debt to Consolidated Adjusted Tangible Net Worth shall not exceed 7:1.”

(v) Section 14(ff) of the Existing Repurchase Agreement is hereby amended by deleting it in its entirety and replacing it with the following language, which amendment shall be effective solely during the Second Amendment Period:

“(ff) Maintenance of Liquidity. The Sellers shall maintain cash, Cash Equivalents as well as unencumbered Mortgage Loans held for sale or securitization of at least $20 million; provided, that for the purposes of this requirement, unencumbered Mortgage Loans held for sale or securitization shall represent an amount of not greater than $5 million (of such $20 million).”

SECTION 3. Conditions Precedent. This Amendment shall become effective on, with respect to Section 1, March 30, 2007 and, with respect to Section 2, March 1, 2007 (the “Amendment Effective Dates”), subject to the satisfaction of the following conditions precedent:

3.1 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 by a duly authorized officer of the Buyer and Sellers; and

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

SECTION 4. Representations and Warranties. Each of the Sellers hereby represents and warrants to the Buyer that they are in compliance with all the terms and provisions set forth in the Repurchase Agreement on their part to be observed or performed, and that no Event of Default has occurred or is continuing, and hereby confirm and reaffirm the representations and warranties contained in Section 13 of the Existing Repurchase Agreement.

SECTION 5. Limited Effect. Except as expressly amended and modified by this Amendment, the Repurchase Agreement shall continue to be, and shall remain, in full force and effect in accordance with its terms. The amendments set forth in Section 1 and Section 2 of this Amendment shall expire upon the expiration of the applicable Amendment 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 Program Agreement, 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 Program Agreement (whether the same or of a similar nature as the breaches identified herein or otherwise) except as expressly set forth herein.

SECTION 6. Counterparts. This Amendment may be executed by each of the parties hereto on any number of separate counterparts, each of which shall be an original and all of which taken together shall constitute one and the same instrument.

SECTION 7. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO THE CHOICE OF LAW PROVISIONS THEREOF.

[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: CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC, as Buyer

By: /s/ A. Adam Loskove
Name: A. Adam Loskove
Title: Vice President

Seller: FIELDSTONE MORTGAGE COMPANY, as Seller

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

Seller: FIELDSTONE INVESTMENT CORPORATION, as Seller

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

Exhibit 10.2

EXECUTION VERSION

AMENDMENT NO. 3
TO AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT

Amendment No. 3, dated as of March 30, 2007 (this “Amendment”), among CREDIT SUISSE, NEW YORK BRANCH (the “Administrative Agent”), THE BUYERS, FIELDSTONE MORTGAGE COMPANY and FIELDSTONE INVESTMENT CORPORATION (each a “Seller” and collectively the “Sellers”).

RECITALS

The Administrative Agent, the Buyers and the Sellers are parties to that certain Amended and Restated Master Repurchase Agreement, dated as of November 14, 2006, as amended by Amendment No. 1, dated as of December 20, 2006 and Amendment No. 2, dated as of January 31, 2007 (the “Existing Repurchase Agreement”; 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 Administrative Agent, the Buyers and 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 Administrative Agent, the Buyers 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. Profitability Amendment Period. For purposes of this Amendment, this Section 1 will be effective only for the period from and including the date hereof through and including June 30, 2007 (the “Profitability Amendment Period”). Section 14(e) of the Existing Repurchase Agreement is hereby amended by deleting it in its entirety and replacing it with the following language, which amendment shall be effective solely during the Profitability Amendment Period:

“(e) Maintenance of Profitability.

(A) FIC shall not permit, for any two consecutive Test Periods (other than with respect to the Test Periods set forth in (B) below), its consolidated Net Income for any Test Period, before income taxes for such Test Period, distributions made during such Test Period, and without regard to unrealized gains or losses from mark to market valuations resulting from Seller’s Interest Rate Protection Agreements during such Test Period, to be less than $1.00.

(B) FIC may permit, for the two consecutive Test Periods from and including January 1, 2007 through and including June 30, 2007, its consolidated Net Income for any Test Period, before income taxes for such Test Period, distributions made during such Test Period, and without regard to unrealized gains or losses from mark to market valuations resulting from Seller’s Interest Rate Protection Agreements during such Test Period, to be less than $1.00.”

SECTION 2. Covenants. Section 14 of the Existing Repurchase Agreement is hereby amended by deleting clauses a, b, ee and gg thereof in their entirety and replacing them with the following language:

“a. Minimum Consolidated Adjusted Tangible Net Worth. The Sellers shall maintain a Consolidated Adjusted Tangible Net Worth of at least $275 million.”

“b. Indebtedness to Consolidated Adjusted Tangible Net Worth Ratio. The Sellers’ (i) combined ratio of consolidated Indebtedness to Consolidated Adjusted Tangible Net Worth shall not exceed 18:1 and (ii) combined ratio of consolidated Indebtedness (net of non-recourse Indebtedness) to Consolidated Adjusted Tangible Net Worth shall not exceed 7:1.”

“ee. Non-Structured Securities Indebtedness to Consolidated Adjusted Tangible Net Worth Ratio. The Sellers’ ratio of consolidated Indebtedness less Structured Securities Debt to Consolidated Adjusted Tangible Net Worth shall not exceed 7:1.”

“gg. Maintenance of Liquidity. The Sellers shall maintain cash, Cash Equivalents as well as unencumbered Mortgage Loans held for sale or securitization of at least $20 million.”

SECTION 3. Officer’s Compliance Certificate. Exhibit D to the Existing Repurchase Agreement is hereby amended by deleting it in its entirety and replacing it with Exhibit A hereto.

SECTION 4. Conditions Precedent.  This Amendment shall become effective on, with respect to Sections 2, 3 and 4, on the date hereof and, with respect to Section 1, January 1, 2007 (the “Amendment Effective Dates”), subject to the satisfaction of the following conditions precedent:

4.1 Delivered Documents.  The Administrative Agent shall have received the following documents, each of which shall be satisfactory to the Administrative Agent in form and substance:

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

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

SECTION 5. Representations and Warranties.  Each Seller hereby represents and warrants to the Administrative Agent that it is in compliance with all the terms and provisions set forth in the Repurchase Agreement on its part to be observed or performed, and that no Event of Default has occurred or is continuing, and hereby confirms and reaffirms the representations and warranties contained in Section 13 of the Repurchase Agreement.

SECTION 6. Limited Effect.  Except as expressly amended and modified by this Amendment, the Repurchase Agreement shall continue to be, and shall remain, in full force and effect in accordance with its terms. The amendments set forth in Section 2 of this Amendment shall expire upon the expiration of the Amendment 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 Administrative Agent or the Buyers shall not operate as a waiver of any of its rights, powers or privileges under the Repurchase Agreement or any other Program Agreement, 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 Program Agreement (whether the same or of a similar nature as the breaches identified herein or otherwise) except as expressly set forth herein.

SECTION 7. Counterparts.  This Amendment may be executed by each of the parties hereto on any number of separate counterparts, each of which shall be an original and all of which taken together shall constitute one and the same instrument.

SECTION 8. GOVERNING LAW.  THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO THE CHOICE OF LAW PROVISIONS THEREOF.

[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.

Administrative Agent: CREDIT SUISSE, NEW YORK BRANCH, as Administrative Agent

By: /s/ Anthony Giordano
Name: Anthony Giordano
Title: Director

By: /s/ Joseph Soave
Name: Joseph Soave
Title: Director

Seller: FIELDSTONE MORTGAGE COMPANY, as a Seller

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

Seller: FIELDSTONE INVESTMENT CORPORATION, as a Seller

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

The JPMorgan Buying Group:

FALCON ASSET SECURITIZATION COMPANY LLC

By: JPMorgan Chase Bank, N.A., its attorney-in-fact

By: /s/ George S. Wilkins
Name: George S. Wilkins
Title: Vice President

JPMORGAN CHASE BANK, N.A.,

as a Group Agent and as a Committed Buyer

By: /s/ George S. Wilkins
Name: George S. Wilkins
Title: Vice President

The Alpine Buying Group:

ALPINE SECURITIZATION CORP., as a Conduit Buyer

By: /s/ Mark Lengel
Name: Mark Lengel
Title: Director

By: /s/ Alex Smith
Name: Alex Smith
Title: Vice President

CREDIT SUISSE, NEW YORK BRANCH, individually and as a Committed Buyer

By: /s/ Anthony Giordano
Name: Anthony Giordano
Title: Director

By: /s/ Joseph Soave
Name: Joseph Soave
Title: Director

Exhibit 10.3

EXECUTION VERSION

AMENDMENT NO. 4
TO MASTER REPURCHASE AGREEMENT

Amendment No. 4, dated as of March 30, 2007 (this “Amendment”), among JPMORGAN CHASE BANK, N.A. (the “Buyer”), FIELDSTONE MORTGAGE COMPANY (a “Seller”) and FIELDSTONE INVESTMENT CORPORATION (a “Seller” and, together with Fieldstone Mortgage Company, the “Sellers”).

RECITALS

The Buyer and the Sellers are parties to that certain Master Repurchase Agreement, dated as of July 14, 2006, as amended by Amendment No. 1, dated as of December 20, 2006, Amendment No. 2, dated as of January 31, 2007 and Amendment No. 3, dated as of March 6, 2007 (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. Covenants. Section 12 of the Existing Repurchase Agreement is hereby amended by deleting clause (k) thereof in its entirety and replacing it with the following:

“(k) Financial Covenants.

(i) Maintenance of Adjusted Tangible Net Worth. FIC shall at all times maintain an Adjusted Tangible Net Worth, on a consolidated basis, of at least $275,000,000.

(ii) Indebtedness to Adjusted Tangible Net Worth Ratio. The Sellers’ (i) combined ratio of consolidated Indebtedness to Adjusted Tangible Net Worth shall not exceed 18:1 and (ii) combined ratio of consolidated Indebtedness (net of non-recourse Indebtedness) to Adjusted Tangible Net Worth shall not exceed 7:1.

(iii) Non-Structured Securities Indebtedness to Adjusted Tangible Net Worth Ratio. The Sellers’ ratio of consolidated Indebtedness less Structured Securities Debt to Adjusted Tangible Net Worth shall not exceed 7:1.

(iv) Maintenance of Liquidity. FIC, on a consolidated basis, shall at all times have unencumbered cash, Cash Equivalents and Available Borrowing Capacity on unencumbered assets that could be drawn against (taking into account required haircuts) under committed warehouse and repurchase facilities in an amount equal to not less than $20,000,000.

(v) Reserved.”

SECTION 2. Schedule I. Schedule I to the Existing Repurchase Agreement is deleted in its entirety and replaced by Exhibit A hereto.

SECTION 3. Conditions Precedent. This Amendment shall become effective on the date hereof, subject to the satisfaction of the following conditions precedent:

3.1 Delivered Documents. 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 by a duly authorized officer of the Buyer and Sellers;

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

SECTION 4. Representations and Warranties. Each of the Sellers hereby represents and warrants to the Buyer that they are in compliance with all the terms and provisions set forth in the Repurchase Agreement on their part to be observed or performed, and that no Event of Default has occurred or is continuing, and hereby confirm and reaffirm the representations and warranties contained in Section 11 of the Existing Repurchase Agreement.

SECTION 5. Limited Effect. Except as expressly amended and modified by this Amendment, the Repurchase Agreement shall continue to be, and shall remain, in full force and effect in accordance with its terms.

SECTION 6. Counterparts. This Amendment may be executed by each of the parties hereto on any number of separate counterparts, each of which shall be an original and all of which taken together shall constitute one and the same instrument.

SECTION 7. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO THE CHOICE OF LAW PROVISIONS THEREOF.

[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: JPMORGAN CHASE BANK, N.A., as Buyer

By: /s/ Stephanie K. Rudd
Name: Stephanie K. Rudd
Title: Managing Director

Seller: FIELDSTONE MORTGAGE COMPANY, as Seller

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

Seller: FIELDSTONE INVESTMENT CORPORATION, as Seller

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

Exhibit 10.4

EXECUTION VERSION

SIXTH AMENDMENT TO
SECOND AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT
GOVERNING PURCHASES AND SALES OF MORTGAGE LOANS

This Sixth Amendment, dated as of March 30, 2007 (this “Amendment”), to the Second Amended and Restated Master Repurchase Agreement Governing Purchases and Sales of Mortgage Loans, dated as of December 29, 2004 and amended as of December 28, 2005, October 31, 2006, December 19, 2006, December 27, 2006 and January 26, 2007 (as amended, the “Repurchase Agreement”), is made by and among LEHMAN BROTHERS BANK, FSB (“Buyer”), FIELDSTONE INVESTMENT CORPORATION (“FIC”) and FIELDSTONE MORTGAGE COMPANY (“FMC”) (FIC and FMC shall be individually and collectively referred to as “Seller”). Buyer, FMC and FIC may be collectively referred to herein as the “Parties”.

RECITALS

WHEREAS, pursuant to the Repurchase Agreement, Buyer has agreed, subject to the terms and conditions set forth in the Repurchase Agreement, to purchase certain Mortgage Loans owned by Seller, including, without limitation, all rights of Seller to service and administer such Mortgage Loans; and

WHEREAS, Buyer is entering into this Amendment on the condition that Seller, on or before April 30, 2007, repurchases all Mortgage Loans then subject to a Transaction; and

WHEREAS, the Parties desire to amend the Repurchase Agreement as set forth herein.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto agree as follows:

Section 1. Definitions. Capitalized terms used but not otherwise defined herein have the meanings given them in the Repurchase Agreement.

Section 2. Amendment Period. For purposes of this Amendment, this Section 2 will be effective only for the period from and including the date hereof through and including April 13, 2007 (the “Amendment Period”). Subject to Section 5 hereof, the Repurchase Agreement shall be amended as follows:

(a) Section 12(m) is hereby amended by deleting the “Adjusted Tangible Net Worth” covenant therein in its entirety and replacing it with the following:

Adjusted
Tangible
Net Worth Adjusted Tangible Net Worth shall, at all times, exceed
the greater of (i) $275,000,000 (two hundred and
seventy-five million dollars) and (ii) the dollar amount
set forth in the most restrictive covenant measuring
Adjusted Tangible Net Worth contained in any agreement
between Seller and any purchaser or lender to whom Seller
sells mortgage loans or obtains financing pursuant to a
mortgage loan repurchase, warehouse lending or similar
facility.

(b) Section 12(m) is hereby further amended by deleting the “Profitability” financial covenant therein in its entirety and replacing it with the following:

Profitability Seller shall not, for the fiscal quarter ending on
March 30, 2007, have Net Income of less than negative
$65,000,000 (i.e., a loss of more than $65,000,000)
without regard to unrealized gains or losses from
Hedges during such period.

(c) Section 12(m) is hereby further amended by deleting the “Total Leverage Ratio” financial covenant therein in its entirety and replacing it with the following:

Total
Leverage
Ratio

Total Leverage Ratio shall not, at any time, exceed 18:1.

(d) Section 12(m) is hereby further amended by deleting the “Recourse Debt Leverage Ratio” financial covenant therein in its entirety and replacing it with the following:

Recourse
Debt
Leverage
Ratio


Recourse Debt Leverage Ratio shall not, at any time, exceed 7:1.

(e) Section 12(m) is hereby further amended by deleting the “Minimum Liquidity” financial covenant therein in its entirety and replacing it with the following:

Minimum
Liquidity Liquidity of Seller shall, at all times, exceed
$20,000,000. For purposes of the calculation of Liquidity
for this covenant, cash and/or Cash Equivalents shall
comprise at least 50% of Liquidity.

Section 3. Events of Default. Subject to Section 5 hereof, the Repurchase Agreement shall be further amended as follows:

(a) Section 13 is hereby amended by adding the following at the end thereof:

“(xv) Seller shall fail to repurchase on or before April 30, 2007 the Mortgage Loans then subject to a Transaction.”

(b) Notwithstanding anything in the Repurchase Agreement to the contrary, each Transaction from the date hereof shall be in the sole discretion of Buyer.

Section 4. Representations and Warranties. Seller hereby represents and warrants to Buyer that (a) both immediately before and after giving effect to the amendments set forth in Sections 2 and 3 of this Amendment, no Event of Default shall have occurred and be continuing, (b) the representations and warranties of Seller set forth in Section 10 of the Repurchase Agreement are true and complete as if made on and as of such date and as if each reference in said Section 10 to “this Agreement” included reference to the Repurchase Agreement as amended hereby, (c) this Amendment constitutes the legal, valid and binding obligation of Seller, enforceable against Seller in accordance with its terms and (d) the execution and delivery by Seller of this Amendment has been duly authorized by all requisite corporate action on the part of Seller and will not violate any provision of Seller’s organizational documents.

Section 5. Conditions Precedent. The amendments set forth in Sections 2 and 3 above shall not become effective unless on or before the date hereof,

(a) Buyer shall have received all of the following documents, each of which shall be satisfactory in form and substance to Buyer and its counsel:

(i) Amendment. This Amendment, duly completed, executed and delivered by Seller;

(ii) Other Documents. Such other documents as Buyer may reasonably request.

(b) Seller shall have received a waiver or amendment under each warehouse financing agreement or related finance agreement of Seller for breach of any (i) profitability covenant, (ii) net worth covenant and (iii) total leverage ratio.

Section 6. Miscellaneous.

(a) Except as expressly amended by Sections 2 and 3 hereof, the Repurchase Agreement remains unaltered and in full force and effect. Each of the Parties hereby reaffirms all terms and covenants made in the Repurchase Agreement as amended hereby.

(b) The execution, delivery and effectiveness of this Amendment shall not operate as a waiver of any right, power or remedy of any Party under the Repurchase Agreement, or any other document, instrument or agreement executed and/or delivered in connection therewith.

(c) THIS AMENDMENT SHALL BE CONSTRUED, INTERPRETED AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF.

(d) This Amendment may be executed in any number of counterparts, and all such counterparts shall together constitute the same agreement. Any signature delivered by a party via facsimile shall be deemed to be an original signature hereto.

[SIGNATURE PAGE TO FOLLOW]

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

SELLER:

FIELDSTONE MORTGAGE COMPANY

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

FIELDSTONE INVESTMENT CORPORATION

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

BUYER:

LEHMAN BROTHERS BANK, FSB

By: /s/ Fred C. Madonna
Name: Fred C. Madonna
Title:

Exhibit 10.5

EXECUTION VERSION

AMENDMENT NO. 2
TO AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT

Amendment No. 2, dated as of March 30, 2007 (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 amended by Amendment No. 1, dated as of December 29, 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. Definitions. Section 2 of the Existing Repurchase Agreement is hereby amended by

1.1 inserting the following defined terms in their appropriate alphabetical order:

““Adjusted Tangible Net Worth” shall mean for the Sellers, the amount that would, in conformity with GAAP, equal the stockholder’s equity included on the balance sheet of the Sellers and their Subsidiaries, plus any preferred stock not already included in the calculation of stockholder’s equity, plus any Indebtedness of the Sellers and their Subsidiaries that is fully subordinated to any obligations arising under this Repurchase Agreement, provided that such indebtedness is subordinated until after the maturity of any Transaction under the Repurchase Agreement, plus other comprehensive loss arising from the FASB 133, minus any intangibles or goodwill (as defined under GAAP), minus any advances between the Sellers and their Affiliates (other than consolidated subsidiaries or between FIC and FMC), minus any loans or advances to officers or directors of the Sellers (as reported under GAAP), minus other comprehensive income arising from FASB 133; provided, however, that the non-cash effect (gain or loss) of any mark-to-market adjustments impacting stockholder’s equity for fluctuation of the value of financial instruments as mandated under FASB 133 shall be excluded from the calculation of Adjusted Tangible Net Worth.”

““Available Borrowing Capacity” shall mean available and unused borrowing capacity which may be drawn upon by the Sellers on a next Business Day basis. Borrowing capacity shall not be deemed part of the Available Borrowing Capacity if any event or circumstance has occurred which would prevent the Sellers from drawing on the borrowing capacity or cause the related lender to have no obligation to make funds available.”

““Cash Equivalents” shall mean (a) securities with maturities of 90 days or less from the date of acquisition issued or fully guaranteed or insured by the United States Government or any agency thereof, (b) certificates of deposit and eurodollar time deposits with maturities of 90 days or less from the date of acquisition and overnight bank deposits of Buyer or of any commercial bank having capital and surplus in excess of $500,000,000, (c) repurchase obligations of Buyer or of any commercial bank satisfying the requirements of clause (b) of this definition, having a term of not more than seven days with respect to securities issued or fully guaranteed or insured by the United States Government, (d) commercial paper of a domestic issuer rated at least A-1 or the equivalent thereof by S&P or P-1 or the equivalent thereof by Moody’s and in either case maturing within 90 days after the day of acquisition, (e) securities with maturities of 90 days or less from the date of acquisition issued or fully guaranteed by any state, commonwealth or territory of the United States, by any political subdivision or taxing authority of any such state, commonwealth or territory or by any foreign government, the securities of which state, commonwealth, territory, political subdivision, taxing authority or foreign government (as the case may be) are rated at least A by S&P or A by Moody’s, (f) securities with maturities of 90 days or less from the date of acquisition backed by standby letters of credit issued by Buyer or any commercial bank satisfying the requirements of clause (b) of this definition or (g) shares of money market mutual or similar funds which invest exclusively in assets satisfying the requirements of clauses (a) through (f) of this definition.”

1.2 deleting the defined terms “Change in Control” and “Maximum Purchase Price” in their entirety and replacing them with the following:

““Change in Control” shall mean:

(a) any transaction or event as a result of which FIC ceases to own, directly or indirectly, 100% of the stock of FMC;

(b) the sale, transfer, or other disposition of all or substantially all of a Seller’s assets (excluding any such action taken in connection with any securitization transaction); or

(c) the consummation of a merger or consolidation of FIC with or into another entity or any other corporate reorganization, if more than 50.1% of the combined voting power of the continuing or surviving entity’s stock outstanding immediately after such merger, consolidation or such other reorganization is owned by persons who were not stockholders of the Seller immediately prior to such merger, consolidation or other reorganization.

Provided that the acquisition of FIC by Credit-Based Asset Servicing and Securitization LLC (C-BASS), by itself, shall not constitute a Change in Control.”

““Maximum Purchase Price” shall mean $200,000,000.”

SECTION 2. Waiver. For purposes of this Amendment, this Section 2 will be effective only for the period from and including the date hereof through and including July 31, 2007 (the “Waiver Period”).

2.1 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 Adjusted Tangible Net Worth. FIC shall maintain a Adjusted Tangible Net Worth of not less than $275,000,000.”

SECTION 3. Financial Covenants Conditions. Section 12(k) of the Existing Repurchase Agreement is hereby amended by

3.1 deleting clause (ii) thereto in its entirety and replacing it with the following language:

“(ii) Maintenance of Ratio of Indebtedness to Adjusted Tangible Net Worth. FIC shall maintain the ratio of Indebtedness to Adjusted Tangible Net Worth no greater than 18:1.”

3.2 adding the following to the end thereof:

“(iii) Maintenance of Ratio of Recourse Indebtedness to Adjusted Tangible Net Worth. FIC shall maintain the ratio of Indebtedness (net of non-recourse Indebtedness) to Adjusted Tangible Net Worth no greater than 7:1.”

“(iv) Maintenance of Liquidity. FIC shall at all times have unencumbered cash, Cash Equivalents and Available Borrowing Capacity on unencumbered assets that could be drawn against (taking into account required haircuts) under committed warehouse and repurchase facilities in an amount equal to not less than $20,000,000.”

SECTION 4. Early Payment Defaults. Section 12 is further amended by adding the following to the end thereof:

““(dd) Early Payment Defaults. Sellers shall resolve any “early payment default” requests with respect to certain mortgage loans in Merrill Lynch inventory MLMI 2006-HE5 and MLMI 2006 SL2 by April 4, 2007 and MLMI 2006-HE6 by April 18, 2007.”

SECTION 5. Early Payments Default. Section 13.01 is amended by deleting clause (b) thereof and replacing it with the following:

“(b) the failure of either Seller to perform, comply with or observe any term, covenant or agreement applicable to it contained in Sections 12(a)(i), (h), (j), (k), (q), (r), (s), (t), (u), (v), (w), (y), (z), (aa), (cc) or (dd); or”

SECTION 6. Conditions Precedent. This Amendment shall become effective on the date hereof (the “Amendment Effective Date”) subject to the satisfaction of the following conditions precedent:

6.1 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 7. 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 2 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 8. 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 9. 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 10. 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 11. 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 12. 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 B. Cason
Name: James B. 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