**Exhibit 10.2(2)**

 

**EXECUTION VERSION**

 

CREDIT SUISSE, NEW YORK BRANCH

 

November 8, 2005

 

Fieldstone InvestmentCorporationFieldstone Mortgage Company11000 Broken Land ParkwaySuite 600Columbia, MD  21044

 

Attention: Mark C. Krebs

 

Re:  Pricing Side Letter

 

Ladies and Gentlemen:

 

Reference is hereby madeto, and this side letter (the “Pricing Side Letter”) is herebyincorporated by reference into, the Master Repurchase Agreement, dated as of November 8,2005, (as amended, supplemented and otherwise modified from time to time, the “Agreement”),among Fieldstone Investment Corporation (a “Seller”), FieldstoneMortgage Company (a “Seller”) and Credit Suisse, New York Branch (the “AdministrativeAgent”).  Any capitalized term usedbut not defined herein shall have the meaning assigned to such term in theAgreement.

 

**Section 1**.  **Definitions**.  The following terms shall have the meaningsset forth below.

 

**1.1****         **“AssetValue” shall mean with respect to each Eligible Mortgage Loan, the lesserof (a) the applicable Purchase Price Percentage for the related PurchasedMortgage Loan multiplied by the Market Value of such Mortgage Loan and (b) theoutstanding principal balance of such Mortgage Loan.  Without limiting the generality of theforegoing, the Sellers acknowledge that the Asset Value of a Purchased MortgageLoan may be reduced to zero by Administrative Agent if:

 

(i)            amaterial breach of a representation, warranty or covenant made by Seller inthis Agreement with respect to such Purchased Mortgage Loan has occurred and iscontinuing;

 

(ii)           suchPurchased Mortgage Loan is a Defaulted Mortgage Loan;

 

(iii)          suchPurchased Mortgage Loan has been released from the possession of the Custodianunder the Custodial Agreement for a period in excess of ten (10) BusinessDays;

 

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(iv)          suchPurchased Mortgage Loan has been subject to a Transaction hereunder for aperiod of greater than 180 days;

 

(v)           suchPurchased Mortgage Loan is a Wet-Ink Mortgage Loan for which the Mortgage Filehas not been delivered to the Custodian on or prior to the fifth Business Dayafter the related Purchase Date;

 

(vi)          suchPurchased Mortgage Loan is no longer acceptable for purchase by any Buyer (oran Affiliate thereof) or the Administrative Agent (or an Affiliate thereof) underany of the flow purchase or conduit programs for which Seller then has beenapproved due to a Requirement of Law relating to consumer credit laws orotherwise;

 

(vii)         whenthe Purchase Price for such Purchased Mortgage Loan is added to other PurchasedMortgage Loans, the Weighted Average Mortgage Interest Rate of all Fixed RateMortgage Loans is less than 7.5%;

 

(viii)        whenthe Purchase Price for such Purchased Mortgage Loan is added to other PurchasedMortgage Loans, the Weighted Average Mortgage Interest Rate of all Floating RateMortgage Loans is less than 7%;

 

(ix)           whenthe Purchase Price for such Purchased Mortgage Loan is added to other PurchasedMortgage Loans, the Weighted Average FICO Score of all Fixed Rate MortgageLoans is less than 675;

 

(x)            whenthe Purchase Price for such Purchased Mortgage Loan is added to other PurchasedMortgage Loans, the Weighted Average FICO Score of all Floating Rate MortgageLoans is less than 630;

 

(xi)           whenthe Purchase Price for such Purchased Mortgage Loan is added to other PurchasedMortgage Loans, the Outstanding Principal Balance of all Fixed Rate MortgageLoans having FICO Scores that are less than or equal to 500 is greater than 1%of the Outstanding Principal Balance of all Fixed Rate Mortgage Loans;

 

(xii)          whenthe Purchase Price for such Purchased Mortgage Loan is added to other PurchasedMortgage Loans, the Outstanding Principal Balance of all Floating Rate MortgageLoans having FICO Scores that are less than or equal to 500 is greater than0.50% of the Outstanding Principal Balance of all Floating Rate Mortgage Loans;

 

(xiii)         whenthe Purchase Price for such Purchased Mortgage Loan is added to other PurchasedMortgage Loans, the Outstanding Principal Balance of all Fixed Rate MortgageLoans having FICO Scores that are less than or equal to 550 is greater than 3%of the Outstanding Principal Balance of all Fixed Rate Mortgage Loans;

 

(xiv)        whenthe Purchase Price for such Purchased Mortgage Loan is added to other PurchasedMortgage Loans, the Outstanding Principal Balance of all Floating Rate MortgageLoans having FICO Scores that are less than or equal to 550 is greater than 15%of the Outstanding Principal Balance of all Floating Rate Mortgage Loans;

 

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(xv)         whenthe Purchase Price for such Purchased Mortgage Loan is added to other PurchasedMortgage Loans, the Outstanding Principal Balance of all Fixed Rate MortgageLoans having FICO Scores that are less than or equal to 600 is greater than 10%of the Outstanding Principal Balance of all Fixed Rate Mortgage Loans;

 

(xvi)        whenthe Purchase Price for such Purchased Mortgage Loan is added to other PurchasedMortgage Loans, the Outstanding Principal Balance of all Floating Rate MortgageLoans having FICO Scores that are less than or equal to 600 is greater than 30%of the Outstanding Principal Balance of all Floating Rate Mortgage Loans;

 

(xvii)       whenthe Purchase Price for such Purchased Mortgage Loan is added to other PurchasedMortgage Loans, the Weighted Average LTV of all Fixed Rate Mortgage Loans isgreater than or equal to 87%;

 

(xviii)      whenthe Purchase Price for such Purchased Mortgage Loan is added to other PurchasedMortgage Loans, the Weighted Average LTV of all Floating Rate Mortgage Loans isgreater than or equal to 85%;

 

(xix)         whenthe Purchase Price for such Purchased Mortgage Loan is added to other PurchasedMortgage Loans, the Outstanding Principal Balance of all Fixed Rate MortgageLoans having an LTV that is greater than or equal to 95% but less than or equalto 100% is greater than or equal to 40% of the Outstanding Principal Balance ofall Fixed Rate Mortgage Loans;

 

(xx)          whenthe Purchase Price for such Purchased Mortgage Loan is added to other PurchasedMortgage Loans, the Outstanding Principal Balance of all Floating Rate MortgageLoans having an LTV that is greater than or equal to 95% but less than or equalto 100% is greater than or equal to 15% of the Outstanding Principal Balance ofall Floating Rate Mortgage Loans;

 

(xxi)         whenthe Purchase Price for such Purchased Mortgage Loan is added to other PurchasedMortgage Loans, the Weighted Average CLTV of all Fixed Rate Mortgage Loans isgreater than or equal to 95%;

 

(xxii)        whenthe Purchase Price for such Purchased Mortgage Loan is added to other PurchasedMortgage Loans, the Weighted Average CLTV of all Floating Rate Mortgage Loansis greater than or equal to 95%;

 

(xxiii)       whenthe Purchase Price for such Purchased Mortgage Loan is added to other PurchasedMortgage Loans, the Outstanding Principal Balance of all Fixed Rate MortgageLoans having a CLTV that is greater than or equal to 95% but less than or equalto 100% is greater than or equal to 40% of the Outstanding Principal Balance ofall Fixed Rate Mortgage Loans;

 

(xxiv)       whenthe Purchase Price for such Purchased Mortgage Loan is added to other PurchasedMortgage Loans, the Outstanding Principal Balance of all Floating Rate MortgageLoans having a CLTV that is greater than or equal to 95% but less than or

 

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equal to 100% is greater than or equal to 60% of theOutstanding Principal Balance of all Floating Rate Mortgage Loans;

 

(xxv)        whenthe Purchase Price for such Purchased Mortgage Loan is added to other PurchasedMortgage Loans, the Outstanding Principal Balance of all Fixed Rate MortgageLoans having an original Outstanding Principal Balance that is less than orequal to $50,000 is greater than or equal to 20% of the Outstanding PrincipalBalance of all Fixed Rate Mortgage Loans;

 

(xxvi)       whenthe Purchase Price for such Purchased Mortgage Loan is added to other PurchasedMortgage Loans, the Outstanding Principal Balance of all Floating Rate MortgageLoans having an original Outstanding Principal Balance that is less than orequal to $50,000 is greater than or equal to 5% of the Outstanding PrincipalBalance of all Floating Rate Mortgage Loans;

 

(xxvii)      whenthe Purchase Price for such Purchased Mortgage Loan is added to other PurchasedMortgage Loans, the Outstanding Principal Balance of all Fixed Rate MortgageLoans having an original Outstanding Principal Balance that is less than orequal to $100,000 is greater than or equal to 45% of the Outstanding PrincipalBalance of all Fixed Rate Mortgage Loans;

 

(xxviii)     whenthe Purchase Price for such Purchased Mortgage Loan is added to other PurchasedMortgage Loans, the Outstanding Principal Balance of all Floating Rate MortgageLoans having an original Outstanding Principal Balance that is less than orequal to $100,000 is greater than or equal to 10% of the Outstanding PrincipalBalance of all Floating Rate Mortgage Loans;

 

(xxix)       whenthe Purchase Price for such Purchased Mortgage Loan is added to other PurchasedMortgage Loans, the Outstanding Principal Balance of all Fixed Rate MortgageLoans having a Credit Grade of “A” is less than 95% of the OutstandingPrincipal Balance of all Fixed Rate Mortgage Loans;

 

(xxx)        whenthe Purchase Price for such Purchased Mortgage Loan is added to other PurchasedMortgage Loans, the Outstanding Principal Balance of all Floating Rate MortgageLoans having a Credit Grade of “A” is less than 90% of the OutstandingPrincipal Balance of all Floating Rate Mortgage Loans;

 

(xxxi)       whenthe Purchase Price for such Purchased Mortgage Loan is added to other PurchasedMortgage Loans, the Outstanding Principal Balance of all Fixed Rate MortgageLoans having a Credit Grade of “D” is greater than 0.50% of the OutstandingPrincipal Balance of all Fixed Rate Mortgage Loans;

 

(xxxii)      whenthe Purchase Price for such Purchased Mortgage Loan is added to other PurchasedMortgage Loans, the Outstanding Principal Balance of all Floating Rate MortgageLoans having a Credit Grade of “D” is greater than 1% of the OutstandingPrincipal Balance of all Floating Rate Mortgage Loans;

 

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(xxxiii)     whenthe Purchase Price for such Purchased Mortgage Loan is added to other PurchasedMortgage Loans, the Outstanding Principal Balance of all Fixed Rate MortgageLoans with respect to which the related Mortgagors have provided FullDocumentation is less than or equal to 55% of the Outstanding Principal Balanceof all Fixed Rate Mortgage Loans;

 

(xxxiv)     whenthe Purchase Price for such Purchased Mortgage Loan is added to other PurchasedMortgage Loans, the Outstanding Principal Balance of all Floating Rate MortgageLoans with respect to which the related Mortgagors have provided Full Documentationis less than or equal to 40% of the Outstanding Principal Balance of allFloating Rate Mortgage Loans;

 

(xxxv)      whenthe Purchase Price for such Purchased Mortgage Loan is added to other PurchasedMortgage Loans, the Outstanding Principal Balance of all Fixed Rate MortgageLoans with respect to which the related Mortgagors are required to pay interestonly on scheduled payment dates for a particular period of time (and whichperiod of time has not ended) is greater than or equal to 10% of theOutstanding Principal Balance of all Fixed Rate Mortgage Loans;

 

(xxxvi)     whenthe Purchase Price for such Purchased Mortgage Loan is added to other PurchasedMortgage Loans, the Outstanding Principal Balance of all Floating Rate MortgageLoans with respect to which the related Mortgagors are required to pay interestonly on scheduled payment dates for a particular period of time (and whichperiod of time has not ended) is greater than or equal to 75% of theOutstanding Principal Balance of all Floating Rate Mortgage Loans;

 

(xxxvii)    whenthe Purchase Price for such Purchased Mortgage Loan is added to other PurchasedMortgage Loans, the Outstanding Principal Balance of all Fixed Rate MortgageLoans with respect to which the related Mortgagor occupies the relatedMortgaged Property is less than 93% of the Outstanding Principal Balance of allFixed Rate Mortgage Loans;

 

(xxxviii)   whenthe Purchase Price for such Purchased Mortgage Loan is added to other PurchasedMortgage Loans, the Outstanding Principal Balance of all Floating Rate MortgageLoans with respect to which the related Mortgagor occupies the relatedMortgaged Property is less than 90% of the Outstanding Principal Balance of allFloating Rate Mortgage Loans;

 

(xxxix)      whenthe Purchase Price for such Purchased Mortgage Loan is added to other PurchasedMortgage Loans, the Outstanding Principal Balance of all Fixed Rate MortgageLoans with respect to which the related Mortgaged Property is designated for single-familyuse is less than 65% of the Outstanding Principal Balance of all Fixed RateMortgage Loans;

 

(xl)           whenthe Purchase Price for such Purchased Mortgage Loan is added to other PurchasedMortgage Loans, the Outstanding Principal Balance of all Floating Rate MortgageLoans with respect to which the related Mortgaged Property is designated for

 

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single-family use is less than 65% of the OutstandingPrincipal Balance of all Floating Rate Mortgage Loans;

 

(xli)          whenthe Purchase Price for such Purchased Mortgage Loan is added to other PurchasedMortgage Loans, the Outstanding Principal Balance of all Fixed Rate MortgageLoans with respect to which the related Mortgaged Property is designated forother than single-family use is greater than 35% of the Outstanding PrincipalBalance of all Fixed Rate Mortgage Loans;

 

(xlii)         whenthe Purchase Price for such Purchased Mortgage Loan is added to other PurchasedMortgage Loans, the Outstanding Principal Balance of all Floating Rate MortgageLoans with respect to which the related Mortgaged Property is designated forother than single-family use is greater than 35% of the Outstanding PrincipalBalance of all Fixed Rate Mortgage Loans;

 

(xliii)        whenthe Purchase Price for such Purchased Mortgage Loan is added to other PurchasedMortgage Loans, the Outstanding Principal Balance of all Fixed Rate MortgageLoans that are also Second Lien Mortgage Loans is greater than 40% of theOutstanding Principal Balance of all Fixed Rate Mortgage Loans;

 

(xliv)       suchPurchased Mortgage Loan is a Floating Rate Mortgage Loan that is also a SecondLien Mortgage Loan;

 

(xlv)        whenthe Purchase Price for such Purchased Mortgage Loan is added to other PurchasedMortgage Loans, the Outstanding Principal Balance of all Fixed Rate MortgageLoans with respect to which the related Mortgaged Property is located in theState of California is greater than 42% of the Outstanding Principal Balance ofall Fixed Rate Mortgage Loans;

 

(xlvi)       whenthe Purchase Price for such Purchased Mortgage Loan is added to other PurchasedMortgage Loans, the Outstanding Principal Balance of all Floating Rate MortgageLoans with respect to which the related Mortgaged Property is located in theState of California is greater than 55% of the Outstanding Principal Balance ofall Floating Rate Mortgage Loans;

 

(xlvii)      whenthe Purchase Price for such Purchased Mortgage Loan is added to other PurchasedMortgage Loans, the Outstanding Principal Balance of all Fixed Rate MortgageLoans with respect to which the related Mortgaged Property is located in aparticular state of the United States or the District of Columbia (other thanthe State of California) is greater than 12% of the Outstanding PrincipalBalance of all Fixed Rate Mortgage Loans;

 

(xlviii)     whenthe Purchase Price for such Purchased Mortgage Loan is added to other PurchasedMortgage Loans, the Outstanding Principal Balance of all Floating Rate MortgageLoans with respect to which the related Mortgaged Property is located in a particularstate of the United States or the District of Columbia (other than the State ofCalifornia) is greater than 15% of the Outstanding Principal Balance of allFloating Rate Mortgage Loans;

 

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(xlix)        whenthe Purchase Price for such Purchased Mortgage Loan is added to other PurchasedMortgage Loans, the aggregate Purchase Price of all Fixed Rate Mortgage Loansthat are Purchased Mortgage Loans exceeds 50% of the Outstanding PrincipalBalance of all Purchased Mortgage Loans; or

 

(l)            whenthe Purchase Price for such Purchased Mortgage Loan is added to other PurchasedMortgage Loans, the aggregate Purchase Price of all Wet-Ink Mortgage Loans thatare Purchased Mortgage Loans exceeds the greater of (i) 20% of theFacility Outstanding Principal and (ii) $100 million.

 

**1.2****         **“AdministrativeFee” shall mean on each Price Differential Payment Date with respect to theimmediately preceding calendar month, the Seller agrees to pay to theAdministrative Agent, for its own account in accordance with the RepurchaseAgreement, a fee (the “Administrative Fee”) equal to the product of (i) 0.02%per annum multiplied by (ii) the weighted average daily Facility OutstandingPrincipal for such calendar month.

 

**1.3****         **“MaximumAggregate Purchase Price” shall mean, SIX HUNDRED MILLION DOLLARS ($600,000,000);provided that such amount may not at any time exceed the MaximumCommitted Purchase Price then in effect.

 

**1.4**          “MaximumGroup Purchase Price” shall mean (i) in the case of the Buying Grouprelated to the Administrative Agent and Alpine, SIX HUNDRED MILLION DOLLARS($600,000,000) and (ii) in the case of any other Buying Group, such amountas is specified in the related assumption agreement or other agreement pursuantto which the Persons in such Buying Group become parties to the RepurchaseAgreement and assume all of the rights and obligations, as applicable, of “CommittedBuyers” and “Conduit Buyers” hereunder.

 

**1.5****         **“Non-UtilizationFee” shall mean, on each Price Differential Payment Date with respect tothe immediately preceding calendar month, the Sellers agree to pay to the AdministrativeAgent, in accordance with the Repurchase Agreement, a fee (the “Non-UtilizationFee”) equal to the product of (i) 0.125% per annum multiplied by (ii) thedifference between such Buying Group’s weighted average daily Maximum GroupPurchase Price for such calendar month and such Buying Group’s aggregate prorata share of the weighted average daily Facility Outstanding Principalfor such calendar month.

 

**1.6****         **“PostDefault Rate” shall mean an annual rate of interest equal to the greater of(a) the Pricing Rate plus 4% or (b) the Mortgage Interest Rate.

 

**1.7**          “PricingRate” shall mean LIBOR plus:

 

(a)           0.23%with respect to Transactions the subject of which are Purchased Mortgage Loans(other than Wet-Ink Mortgage Loans); and

 

(b)           0.43% withrespect to Transactions the subject of which are Wet-Ink Mortgage Loans.

 

The Pricing Rate shallchange in accordance with LIBOR, as provided in Section 5(a).

 

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**1.8**          “PurchasePrice Percentage” shall mean, with respect to each Mortgage Loan, 92.5%.

 

**1.9**          “TerminationDate” shall mean the earliest of (i) the Business Day designated bythe Sellers to the Administrative Agent as the Termination Date at any timefollowing thirty (30) days’ written notice to the Administrative Agent, (ii) theday upon which a Termination Date is declared or automatically occurs relatingto an Event of Default pursuant to Section 15 hereof, or (iii) July 26,2006.

 

**Section 2.  Computations**.  The Non-Utilization Fee and theAdministration Fee shall be computed on the basis of the actual number ofcalendar days in the related calendar month elapsed in a year of 360 days.

 

**Section 3.  Fees.**  The Sellers agree to pay as and when billedby the Administrative Agent all of the reasonable fees, disbursements andexpenses of counsel to the Administrative Agent and Buyers in connection with thedevelopment, preparation and execution of this Pricing Side Letter or any otherdocuments prepared in connection herewith in accordance with Sections 13 and 27of the Agreement and receipt of payment thereof shall be a condition precedentto the Buyer entering into any Transaction pursuant hereto.

 

**Section 4**.  **GOVERNING LAW.THIS PRICING SIDE LETTER SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THESTATE OF NEW YORK, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIESHEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.**

 

**Section 5.  Counterparts**.  This Pricing Side Letter may be executed inone or more counterparts and by different parties hereto on separatecounterparts, each of which, when so executed, shall constitute one and thesame agreement.

 

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IN WITNESS WHEREOF, the Sellers and the Administrative Agent havecaused their names to be signed hereto by their respective officers thereuntoduly authorized as of the date first above written.

 
|   | Credit Suisse, New York  Branch, as  Administrative Agent |
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|   | Fieldstone Mortgage  Company, as Seller       |
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|   | Fieldstone Investment  Corporation, as Seller |
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