Document:

Exhibit 10.2(2)

 

EXECUTION VERSION

 

CREDIT SUISSE, NEW YORK BRANCH

 

November 8, 2005

 

Fieldstone Investment
Corporation

Fieldstone Mortgage Company

11000 Broken Land Parkway

Suite 600

Columbia, MD  21044

 

Attention: Mark C. Krebs

 

Re:  Pricing Side Letter

 

Ladies and Gentlemen:

 

Reference is hereby made
to, and this side letter (the “Pricing Side Letter”) is hereby
incorporated 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”), Fieldstone
Mortgage Company (a “Seller”) and Credit Suisse, New York Branch (the “Administrative
Agent”).  Any capitalized term used
but not defined herein shall have the meaning assigned to such term in the
Agreement.

 

Section 1.  Definitions.  The following terms shall have the meanings
set forth below.

 

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

 

(i)            a
material breach of a representation, warranty or covenant made by Seller in
this Agreement with respect to such Purchased Mortgage Loan has occurred and is
continuing;

 

(ii)           such
Purchased Mortgage Loan is a Defaulted Mortgage Loan;

 

(iii)          such
Purchased Mortgage Loan has been released from the possession of the Custodian
under the Custodial Agreement for a period in excess of ten (10) Business
Days;

 

 

(iv)          such
Purchased Mortgage Loan has been subject to a Transaction hereunder for a
period of greater than 180 days;

 

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

 

(vi)          such
Purchased Mortgage Loan is no longer acceptable for purchase by any Buyer (or
an Affiliate thereof) or the Administrative Agent (or an Affiliate thereof) under
any of the flow purchase or conduit programs for which Seller then has been
approved due to a Requirement of Law relating to consumer credit laws or
otherwise;

 

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

 

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

 

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

 

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

 

(xi)           when
the Purchase Price for such Purchased Mortgage Loan is added to other Purchased
Mortgage Loans, the Outstanding Principal Balance of all Fixed Rate Mortgage
Loans 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)          when
the Purchase Price for such Purchased Mortgage Loan is added to other Purchased
Mortgage Loans, the Outstanding Principal Balance of all Floating Rate Mortgage
Loans having FICO Scores that are less than or equal to 500 is greater than
0.50% of the Outstanding Principal Balance of all Floating Rate Mortgage Loans;

 

(xiii)         when
the Purchase Price for such Purchased Mortgage Loan is added to other Purchased
Mortgage Loans, the Outstanding Principal Balance of all Fixed Rate Mortgage
Loans 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)        when
the Purchase Price for such Purchased Mortgage Loan is added to other Purchased
Mortgage Loans, the Outstanding Principal Balance of all Floating Rate Mortgage
Loans 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;

 

2

 

(xv)         when
the Purchase Price for such Purchased Mortgage Loan is added to other Purchased
Mortgage Loans, the Outstanding Principal Balance of all Fixed Rate Mortgage
Loans 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)        when
the Purchase Price for such Purchased Mortgage Loan is added to other Purchased
Mortgage Loans, the Outstanding Principal Balance of all Floating Rate Mortgage
Loans 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)       when
the Purchase Price for such Purchased Mortgage Loan is added to other Purchased
Mortgage Loans, the Weighted Average LTV of all Fixed Rate Mortgage Loans is
greater than or equal to 87%;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

3

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

4

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

5

 

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

 

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

 

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

 

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

 

(xliv)       such
Purchased Mortgage Loan is a Floating Rate Mortgage Loan that is also a Second
Lien Mortgage Loan;

 

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

 

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

 

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

 

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

 

6

 

(xlix)        when
the Purchase Price for such Purchased Mortgage Loan is added to other Purchased
Mortgage Loans, the aggregate Purchase Price of all Fixed Rate Mortgage Loans
that are Purchased Mortgage Loans exceeds 50% of the Outstanding Principal
Balance of all Purchased Mortgage Loans; or

 

(l)            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 the greater of (i) 20% of the
Facility Outstanding Principal and (ii) $100 million.

 

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

 

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

 

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

 

1.5          “Non-Utilization
Fee” shall mean, on each Price Differential Payment Date with respect to
the immediately preceding calendar month, the Sellers agree to pay to the Administrative
Agent, in accordance with the Repurchase Agreement, a fee (the “Non-Utilization
Fee”) equal to the product of (i) 0.125% per annum multiplied by (ii) the
difference between such Buying Group’s weighted average daily Maximum Group
Purchase Price for such calendar month and such Buying Group’s aggregate pro
rata share of the weighted average daily Facility Outstanding Principal
for such calendar month.

 

1.6          “Post
Default 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          “Pricing
Rate” 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% with
respect to Transactions the subject of which are Wet-Ink Mortgage Loans.

 

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

 

7

 

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

 

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

 

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

 

Section 3.  Fees.  The Sellers agree to pay as and when billed
by the Administrative Agent all of the reasonable fees, disbursements and
expenses of counsel to the Administrative Agent and Buyers in connection with the
development, preparation and execution of this Pricing Side Letter or any other
documents prepared in connection herewith in accordance with Sections 13 and 27
of the Agreement and receipt of payment thereof shall be a condition precedent
to 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 THE
STATE OF NEW YORK, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

 

Section 5.  Counterparts.  This Pricing Side Letter 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.

 

8

 

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

 

	
   

  	
  Credit Suisse, New York
  Branch, as

  Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
						

 

 

	
   

  	
  Fieldstone Mortgage
  Company, as Seller

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Fieldstone Investment
  Corporation, as Seller

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:Exhibit 10.3(1)

AMENDMENT
NO. 1 

TO MASTER REPURCHASE AGREEMENT

                This FIRST AMENDMENT TO MASTER REPURCHASE AGREEMENT (this “Amendment”)
is dated as of May 10, 2005 and is entered into by and among FIELDSTONE
INVESTMENT CORPORATION (“FIC” and a “Seller”), FIELDSTONE
MORTGAGE COMPANY (“FMC” and a “Seller”, and together with FIC,
the “Sellers””) and MERRILL LYNCH BANK USA (the “Buyer”) to that
certain Master Repurchase Agreement dated as of November 12, 2004 (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.

RECITALS

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 promises and
mutual obligations set forth herein, that the Existing Repurchase Agreement is
hereby amended as follows:

SECTION 1.           Existing
Indebtedness.  Schedule 2 of the
Existing Repurchase Agreement is hereby deleted in its entirety and replaced
with Exhibit A hereto.

SECTION 2.           Takeout
Investors.  Schedule 3 of the
Existing Repurchase Agreement is hereby deleted in its entirety and replaced
with Exhibit B hereto.

SECTION 3.           Future
Amendments.  As of the Amendment
Effective Date, Buyer and Sellers agree that further amendments to Schedule 2
and Schedule 3 of the Existing Repurchase Agreement may be consented to by
Buyer in writing (which may include electronic transmissions).

SECTION 4.           Conditions
Precedent.  This Amendment shall
become effective on May 10, 2005 (the “Amendment Effective Date”)
subject to the satisfaction of the following conditions precedent:

4.1           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,
the Sellers and the Guarantor; and

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

 

 

SECTION 5.           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 6.           Fees.  The Seller agrees 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 7.           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 8.           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 9.           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 10.         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]

 

2

 

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: 

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Seller:

  	
  FIELDSTONE INVESTMENT
  CORPORATION,

  	
   

  
	
   

  	
  as Seller

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Seller:

  	
  FIELDSTONE MORTGAGE COMPANY,

  	
   

  
	
   

  	
  as Seller

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

 

EXHIBIT A
TO AMENDMENT NO. 1

 

 

SCHEDULE 2

 

 

EXISTING
INDEBTEDNESS

 

Indebtedness pursuant to
the Revolving Credit and Security Agreement, dated March 13, 2001, by and
between Countrywide Warehouse Lending and Fieldstone Mortgage Company as
amended from time to time

 

Indebtedness pursuant to
the 4/04 Amended and Restated Senior Secured Credit Agreement, dated April 21,
2004, among Fieldstone Investment Corporation, Fieldstone Mortgage Company and
JPMorgan Chase Bank

 

Indebtedness pursuant to
the Credit Agreement, dated July 23, 2003, between Fieldstone Mortgage Company
and Guaranty Bank as amended from time to time

 

Indebtedness pursuant to
the Mortgage Loan Purchase and Sale Agreement, dated July 23, 2003, by and
between Fieldstone Mortgage Company and Guaranty Bank as amended from time to
time

 

Indebtedness pursuant to
the Amended and Restated Master Repurchase Agreement, dated March 31, 2005,
among Credit Suisse First Boston Mortgage Capital LLC, Fieldstone Mortgage
Company and Fieldstone Investment Corporation as amended from time to time

 

Indebtedness pursuant to
the Amended and Restated Master Repurchase Agreement Governing Purchases and
Sales of Mortgage Loans, dated December 31, 2003, among Lehman Brothers Bank,
FSB, Fieldstone Investment Corporation and Fieldstone Mortgage Company as
amended from time to time

 

Indebtedness pursuant to
(i) the Subordinated Amended and Restated Revolving Promissory Note made by FIC
to the order of FMC dated as of March 31, 2005 in the original principal amount
of Fifty Million Dollars ($50,000,000) and (ii) the Subordinated Amended and
Restated Revolving Promissory Note made by FMC to the order of FIC dated as of
March 31, 2005 in the original principal amount of Two Hundred Million Dollars
($200,000,000).

 

Indebtedness in
connection with Acceptable SPVs relating to Structured Securities Debt:

•              Fieldstone Mortgage Investment
Corporation — Series 2003-1

•              Fieldstone Mortgage Investment
Trust — Series 2004-1

•              Fieldstone Mortgage Investment
Trust — Series 2004-2

•              Fieldstone Mortgage Investment
Trust — Series 2004-3

•              Fieldstone Mortgage Investment
Trust — Series 2004-4

 

Ex. A-1

 

EXHIBIT B
TO AMENDMENT NO. 1

 

SCHEDULE 3

 

 

TAKEOUT INVESTORS

 

 

Auroa Loan Services

Countrywide Home Loans

CSFB

Household

Leader Mortgage

Lehman Bros.

Morgan Stanley

National City Mortgage

Regions Mortgage

WAMU

Wells Fargo

GMAC RFC

Suntrust

Chase

RBMG

Bear Stearns

EMC Mortgage

Irwin Mortgage

Citi Mortgage

Fieldstone Investment Corporation

J.P. Morgan Mortgage Acquisition Corp.

 

Ex. B-1

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