**Exhibit 10.2**

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| **FIELDSTONE INVESTMENT CORPORATION** |
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**RE:         EXTENDED SEVERANCE BENEFIT**

Dear Cynthia:

FieldstoneInvestment Corporation (“Fieldstone” or “the Company”) greatly values yourcontributions as a senior manager of Fieldstone and the quality of the servicesthat you provide the Company.

Because of the importanceof your role and in order to reduce any uncertainty you may feel regarding yourfuture with the Company, we are very pleased to offer to you an extendedseverance benefit. It is our expectation that you and Fieldstone will have apositive long term relationship. However, because Fieldstone is a publiclytraded company, no one can predict whether there ever will be a “change incontrol” regarding Fieldstone.

The Company wishes tominimize the uncertainties that may arise in connection with a Change inControl (as defined in Exhibit A to this letter) by providing youwith an extended severance benefit payable in connection with a Change inControl, subject to the terms and conditions of this letter as set forth in theattachment entitled “Terms and Conditions” (the “Extended Severance Benefit”)as follows:

If a Change in Control occurs while you are employed by the Company andyou undergo or are subject to a Qualifying Termination during the one yearperiod following the Change in Control, you will be eligible for a single, “lumpsum” severance payment in an amount equal to **twelve (12)months of your then current base salary**.

In the event of a Changein Control, this Extended Severance Benefit will apply in lieu of any otherseverance pay to which you may be entitled under any Company severance plan,program, practice or arrangement.

Sincerely,

/s/ Michael J. Sonnenfeld

Michael J. Sonnenfeld,President and Chief Executive Officer

Accepted and Agreed:

/s/ Cynthia L. Harkness

Date: February 27,2006

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Terms &Conditions

You must be in theemploy of the Company at the time of the Change in Control to be eligible forthe Extended Severance Benefit. Your Extended Severance Benefit will be paid ina single lump sum payment within thirty (30) days following your QualifyingTermination, subject to any delay in payment required to avoid the additionaltax imposed by Section 409A of the Internal Revenue Code.

For the purpose ofyour Extended Severance Benefit, a “Qualifying Termination” means: (i) youterminate your employment with the Company or its successor for Good Reason (asdefined in herein) or (ii) your employment with the Company or itssuccessor is terminated by the Company or its successor for a reason other thanfor Cause (as defined in the Company’s Equity Incentive Plan as of the date ofthis letter). Your termination of employment must occur within one yearfollowing a Change in Control to be a Qualifying Termination. Further, you willnot be considered to have undergone a Qualifying Termination if upon yourtermination of employment you are immediately thereafter reemployed by theCompany’s successor (or a parent or affiliate of the Company or its successor).For the purpose of this letter agreement and your Extended Severance Benefithereunder, “Good Reason” means, without your consent, a material reduction inyour base salary or responsibilities, or a required relocation of yourprincipal place of employment immediately preceding the Change in Control bymore than 25 miles.

If a Change inControl occurs and you do not undergo a Qualifying Termination within the oneyear period following the closing of the Change in Control, you will not beentitled to the Extended Severance Benefit.

The Company’sCompensation Committee will make all decisions and interpretations regardingyour Extended Severance Benefit, and the decisions and interpretations of theCompensation Committee are final, binding and conclusive.

Your ExtendedSeverance Benefit will be reduced by any taxes or other amounts required to bewithheld by the Company under applicable law. You remain an employee-at-will ofthe Company. Nothing in this letter constitutes, and shall not be construed toprovide, any assurance of your continuing employment with the Company, itsaffiliates or successors.

Prior to theoccurrence of a Change in Control, the Company has the right, in its solecontrol and discretion, to amend or terminate this letter agreement and yourSeverance Benefit at any time and for any reason and without consideration toyou, upon sixty (60) days written notice to you.

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Exhibit A

For purposes of your Severance Benefit, a “Change inControl” means:

(1)           The acquisition byany individual, entity or group (within the meaning of Section 13(d)(3) or14(d)(2) of the Securities Exchange Act of 1934, as amended (the “ExchangeAct”)) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3promulgated under the Exchange Act) of more than 50% of either (i) the thenoutstanding shares of common stock of the Company (the “Outstanding CompanyCommon Stock”) or (ii) the combined voting power of the then outstandingvoting securities of the Company entitled to vote generally in the election ofdirectors (the “Outstanding Company Voting Securities”); provided, however,that for purposes of this Section 1, the following acquisitions shall notconstitute a Change in Control: (i) any acquisition by the Company; (ii) anyacquisition by any employee benefit plan (or related trust) sponsored ormaintained by the Company or any corporation controlled by the Company; and (iii) anyacquisition by any entity pursuant to a transaction which complies with clauses(i), (ii) and (iii) of Section (3) of this Exhibit A;or

(2)           Individuals who, asof the date hereof, constitute the Company’s Board of Directors (the “IncumbentBoard”) cease for any reason to constitute at least a majority of the Board;provided, however, that any individual becoming a director subsequent to thedate hereof whose election, or nomination for election by the Company’sshareholders, was approved by a vote of at least a majority of the directorsthen comprising the Incumbent Board shall be considered as though suchindividual were a member of the Incumbent Board, but excluding, for thispurpose, any such individual whose initial assumption of office occurs as aresult of an actual or threatened election contest with respect to the electionor removal of directors or other actual or threatened solicitation of proxiesor consents by or on behalf of a Person other than the Board; or

(3)           Consummation of areorganization, merger or consolidation or sale or other disposition of all orsubstantially all of the assets of the Company (a “Business Combination”), ineach case unless, following such Business Combination, (i) all orsubstantially all of the individuals and entities who were the beneficialowners, respectively, of the Outstanding Company Common Stock and OutstandingCompany Voting Securities immediately prior to such Business Combinationbeneficially own, directly or indirectly, more than 50% of, respectively, thethen outstanding shares of common stock 

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and the combined voting power of the then outstanding voting securitiesentitled to vote generally in the election of directors, as the case may be, ofthe entity resulting from such Business Combination (including, withoutlimitation, a corporation which as a result of such transaction owns theCompany or all or substantially all of the Company’s assets either directly orthrough one or more subsidiaries) in substantially the same proportions astheir ownership, immediately prior to such Business Combination of theOutstanding Company Common Stock and Outstanding Company Voting Securities, asthe case may be, and (ii) no Person (excluding any corporation resultingfrom such Business Combination or any employee benefit plan (or related trust)of the Company or such corporation resulting from such Business Combination)beneficially owns, directly or indirectly, 35% or more of, respectively, thethen outstanding shares of common stock of the corporation resulting from suchBusiness Combination or the combined voting power of the then outstandingvoting securities of such corporation except to the extent that such ownershipexisted prior to the Business Combination and (iii) at least a majority ofthe members of the board of directors of the corporation resulting from suchBusiness Combination were members of the Incumbent Board at the time of theexecution of the initial agreement, or of the action of the Board, providingfor such Business Combination; or

(4)           Approval by theshareholders of the Company of a complete liquidation or dissolution of theCompany.

(5)           This letteragreement shall apply only to the first Change in Control that occurs followingthe date of this letter.

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