8-K

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): November 5, 2007

FIRSTCITY FINANCIAL CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	033-19694	76-0243729
(State of incorporation)	(Commission File No.)	(IRS Employer Identification No.)

6400 Imperial Drive

Waco, Texas 76712

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code:  (254) 761-2800

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

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Section 1 - Registrant’s Business and Operations

Item 1.01 Entry into a Material Definitive Agreement.

Amendment to FirstCity Subordinated Delayed Draw Credit Agreement.

On November 5, 2007, FirstCity Financial Corporation (“FirstCity”) and BoS (USA) Inc., as agent for the lenders and as lender, entered into a letter agreement dated and effective October 31, 2007, which amended  Section 6 of the Subordinated Delayed Draw Credit Agreement (the “Subordinated Credit Agreement”) dated as of September 5, 2007, to extend the time period to satisfy certain conditions precedent, including consents of certain third parties to the pledge of assets by FirstCity and its subsidiaries and information required to be delivered by FirstCity under the Subordinated Credit Agreement from October 31, 2007, to November 16, 2007, and amended Section 4.1 of the Subordinate Credit Agreement to provide that the commitment commission will be payable for the period commencing on October 31, 2007, to and including the Maturity Date (as defined in the Agreement), the first such payment to be due and payable on December 26, 2007.  The foregoing description of the letter agreement dated October 31, 2007, is qualified in its entirety by reference to the full text of the letter agreement dated October 31, 2007, attached hereto as Exhibit 10.1 and incorporated herein by this reference.  FirstCity reported on the Subordinated Credit Agreement in the Company’s Form 8-K filed September 10, 2007.

Amendment to FirstCity Revolving Credit Agreement.

On November 5, 2007, FirstCity Financial Corporation (“FirstCity”) and Bank of Scotland, as agent for the lenders and as lender, entered into a letter agreement dated October 31, 2007, which amended Section 9.19 of the Revolving Credit Agreement dated November 12, 2004, to extend the time period to deliver documents evidencing and effecting a closing of the subordinate debt facility between FirstCity and BoS (USA) Inc. contemplated by the Subordinated Credit Agreement from October 31, 2007, to November 16, 2007.  The foregoing description of the letter agreement dated October 31, 2007, is qualified in its entirety by reference to the full text of the letter agreement dated October 31, 2007, attached hereto as Exhibit 10.2 and is incorporated herein by this reference.

Nature of Material Relationship with Bank of Scotland.

FirstCity has had a significant relationship with Bank of Scotland and The Governor and The Company of the Bank of Scotland (“BoS-UK”) and their subsidiaries since September 1997. FirstCity and its wholly-owned subsidiaries have entered into loan agreements with Bank of Scotland, BoS (USA) Inc. and BoS-UK from time to time since 1997.

Since December 2002, the Bank of Scotland has provided to FirstCity and its subsidiaries a loan facility under the Revolving Credit Agreement consisting of (i) a revolving acquisition loan facility providing for a maximum principal balance of loans outstanding at any time of $45,000,000, and (ii) a revolving loan facility in the maximum principal amount of $5,000,000 for corporate purposes. This facility is secured by all of the assets of FirstCity and certain of its wholly-owned subsidiaries. The outstanding balances under this facility were converted to loans under the revolving credit agreement between FirstCity and the Bank of Scotland dated November 12, 2004, which amended and restated the revolving loan facility and increased the loan facility to a maximum loan amount of $96,000,000.  This revolving facility was most recently amended on August 22, 2007, to increase the maximum available commitment under the revolving credit facility from $175,000,000 to $225,000,000.

On August 26, 2005, FH Partners LLC, an indirect wholly-owned affiliate of FirstCity, and Bank of Scotland entered into a Revolving Credit Agreement (the “FHP Revolving Credit Agreement”) which provided a $50,000,000 revolving loan facility to be used to finance portfolio and asset purchases made by FH Partners LLC.  The FHP Revolving Credit Agreement was amended on August 22, 2007, to increase the maximum loan amount under the revolving loan facility to $100,000,000.  The FHP Revolving Credit Agreement is secured by all of the assets of FH Partners LLC. The obligations of FH Partners LLC under

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the FHP Revolving Credit Agreement are guaranteed by FirstCity and the primary wholly-owned subsidiaries of FirstCity.

In December 2002, in connection with an exchange offer to the holders of FirstCity’s New Preferred Stock, BoS-UK provided a non-recourse loan in the amount of $16,000,000 to FirstCity, which was used to pay the cash portion of the exchange offer to the holders of the New Preferred Stock, to pay expenses of the exchange offer and recapitalization, and to reduce FirstCity’s debt to Bank of Scotland and BoS (USA) Inc. (the “Senior Lenders”).  The $16,000,000 loan was secured by a 20% interest in Drive Financial Services LP (“Drive”) (64.51% of FirstCity’s remaining 31% interest in Drive) and other assets of FirstCity Consumer Corporation (“Consumer Corp.”) as were necessary and only to the extent to allow BoS-UK to realize the security interest in the 20% interest in Drive. In connection with the $16,000,000 loan, FirstCity agreed to pay a contingent fee to BoS-UK equal to 20% of all amounts received by FirstCity and Consumer Corp. upon any sale of the 20% interest in Drive or any receipt of distributions from Drive related to the 20% ownership interest, once such payments exceeded $16,000,000 in the aggregate.  The outstanding principal and accrued interest of $16,003,947 under the $16,000,000 loan was paid in full on November 1, 2004, in connection with the sale of the 31% beneficial interest in Drive.

On November 1, 2004, FirstCity and certain of its subsidiaries completed the sale of a 31% beneficial ownership interest in Drive and its general partner, Drive GP LLC, to IFA Drive GP Holdings LLC (“IFA-GP”), IFA Drive LP Holdings LLC (“IFA-LP”) and Drive Management LP (“MG-LP”) for a total purchase price of $108,478,300 in cash, which resulted in distributions and payments to FirstCity and Consumer Corp. in the aggregate amount of $86,800,000 in cash, from various sources. As is noted above, the proceeds of the sale were used in part to pay indebtedness owed to the Senior Lenders and BoS-UK.

BoS (USA) Inc. has a warrant to purchase 425,000 shares of FirstCity’s voting Common Stock at $2.3125 per share, which is subject to adjustment in the number of shares in the event of certain changes in the Common Stock, grants of options or issuance of convertible securities by FirstCity or certain corporate changes or reorganizations.  The warrant will expire on August 31, 2010, if it is not exercised prior to that date.

Section 9 - Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits.

(d)	Exhibits
	10.1 Letter agreement, dated October 31, 2007, between FirstCity and BoS (USA) extending time period for closing of subordinate credit facility to be provided by BoS (USA) Inc.
	10.2 Letter agreement, dated October 31, 2007, between Bank of Scotland, acting through its New York branch, and FirstCity extending time period for closing of subordinate credit facility to be provided by BoS (USA) Inc.

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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.

	FIRSTCITY FINANCIAL CORPORATION
Date: November 8, 2007	By:	/s/ J. Bryan Baker
		J. Bryan Baker
		Senior Vice President and Chief Financial Officer

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EXHIBIT INDEX

10.1 Letter agreement, dated October 31, 2007, between FirstCity and BoS (USA) Inc. extending time period for closing of subordinate credit facility to be provided by BoS (USA) Inc.

10.2 Letter agreement, dated October 31, 2007, between Bank of Scotland, acting through its New York branch, and FirstCity extending time period for closing of subordinate credit facility to be provided by BoS (USA) Inc.

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EX-10.1

Exhibit 10.1

BoS (USA) INC.

565 Fifth Avenue

New York, New York 10017

                                                                                                                October 31, 2007

FirstCity Financial Corporation

6400 Imperial Drive

Waco, Texas 76712

Gentlemen:

We refer to the Subordinated Delayed Draw Credit Agreement dated as of September 5, 2007 (the “Agreement”) among FirstCity Financial Corporation (the “Borrower”), the financial institutions which are parties to the Agreement (the “Lenders”) and BoS (USA) Inc., as agent (the “Agent”).

The Agent and the Borrower hereby agree and confirm that (1) the date in the introductory paragraph of Section 6 of the Agreement is amended to be November 16, 2007 and (2) Section 4.1 of the Agreement is hereby amended to provide that the Commitment Commission (as defined in such Section 4.1) shall be payable for the period commencing on the date of this letter (October 31, 2007) to and including the Maturity Date (as defined in the Agreement), the first such payment to be due and payable on December 26, 2007 (for the full period from the date of this letter to December 26, 2007).

Except as expressly amended hereby, the Agreement remains in full force and effect in accordance with its terms.

Please sign below to confirm the terms of this letter, which may be executed in counterparts, which when taken together shall constitute one and the same instrument.  This letter shall be governed by, and construed in accordance with, the laws of the State of New York without reference to choice of law doctrine that would result in the application of the laws of another jurisdiction.  The execution and delivery of this letter shall not obligate the Agent to agree to any further amendments, waivers or consents.

This letter may be executed in counterparts, which when taken together shall constitute one and the same instrument.

Very truly yours,

BoS (USA) Inc.

Individually and as Agent

By:

Name:

Title:

AGREED:

FIRSTCITY FINANCIAL CORPORATION

By:

Name:

Title:

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EX-10.2

Exhibit 10.2

BANK OF SCOTLAND

NEW YORK BRANCH

565 Fifth Avenue

New York, New York 10017

                                                                                                                October 31, 2007

FirstCity Financial Corporation

6400 Imperial Drive

Waco, Texas 76712

Gentlemen:

We refer to Amendment No.10 and Consent to Revolving Credit Agreement dated as of August 22, 2007 (the “Amendment”) among FirstCity Financial Corporation (the “Borrower”), the financial institutions which are parties to the Agreement hereinafter referred to (the “Lenders”) and Bank of Scotland, as agent (the “Agent”), for the Lenders under the Revolving Credit Agreement dated as of November 12, 2004, among the Borrower, the Lenders and the Agent (as amended to date, the “Agreement”).

The Agent and the Borrower hereby agree and confirm that the date in Section 9.19 of the Agreement is amended to be November 16, 2007.

Except as expressly amended hereby, the Agreement remains in full force and effect in accordance with its terms.

Please sign below to confirm the terms of this letter, which may be executed in counterparts, which when taken together shall constitute one and the same instrument.  This letter shall be governed by, and construed in accordance with, the laws of the State of New York without reference to choice of law doctrine that would result in the application of the laws of another jurisdiction.  The execution and delivery of this letter shall not obligate the Agent to agree to any further amendments, waivers or consents.

On and after September 17, 2007, the “appointed day” for the registration of the Bank of Scotland as a public limited company under the United Kingdom Companies Act 1985, all references in this document to the Bank of Scotland however expressed shall be deemed to be references to Bank of Scotland plc.  Bank of Scotland plc is registered in Scotland and has its registered office at The Mound, Edinburgh EH1 1YZ.

This letter may be executed in counterparts, which when taken together shall constitute one and the same instrument.

Very truly yours,

BANK OF SCOTLAND,

Individually and as Agent

By:

Name:

Title:

AGREED:

FIRSTCITY FINANCIAL CORPORATION

By:

Name:

Title:

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