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): February 1, 2008

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 Revolving Credit Agreement.

On February 5, 2008, FirstCity Financial Corporation (“FirstCity”) and Bank of Scotland, as agent for the lenders and as lender, entered into Amendment and Consent No. 16 dated February 4, 2008, which (i) amended Section 7.1(a) of the Revolving Credit Agreement dated November 12, 2004 (the “Credit Agreement”) to delete the requirement that FirstCity deliver the monthly financial statements and Section 7.1(e)of the Credit Agreement to provide that in the event that FirstCity fails to timely file a Form 10Q with the SEC that FirstCity will deliver to the agent and each lender a consolidated and consolidating balance sheet of FirstCity and other related statements for operations as of  the end of the quarterly period to which such Form 10Q applies, and (ii) consented to the extension of the FirstCity Stock Purchase Program to August 30, 2009, to the increase of shares under the program by 500,000 from 1,000,000 to 1,500,000, and to the application of up to $5,444,230.83 after February 1, 2008 of working capital loan proceeds under the Credit Agreement or other available cash toward payment of the price of the Buyback and to use of Subordinated Debt under the Subordinated Credit Agreement with BOS (USA) Inc. toward payment of the price of the Buyback in excess of such amount.  The foregoing description of Amendment and Consent No. 16 is qualified in its entirety by reference to the full text of Amendment and Consent No. 16 attached hereto as Exhibit 10.1 and is incorporated herein by this reference.

Amendment and Consent No. 16 also provided for the waiver of defaults by FirstCity related to the failure to deliver monthly financial statements as required under the Credit Agreement.

On November 8, 2007, FirstCity filed a Form 8-K disclosing that FirstCity and Bank of Scotland had entered into a letter agreement dated October 31, 2007, which amended Section 9.19 of the Credit Agreement 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.  Those conditions were satisfied on or prior to November 16, 2007.

Amendment to FirstCity Subordinated Delayed Draw Credit Agreement.

On February 5, 2008, FirstCity Financial Corporation (“FirstCity”) and BoS (USA) Inc., as agent for the lenders and as lender, entered into Amendment and Consent No. 3 dated February 4, 2008, which amended which (i) amended Section 7.1(a) of the Subordinated Delayed Draw Credit Agreement dated as of September 5, 2007 (the “Subordinated Credit Agreement”) to delete the requirement that FirstCity deliver monthly financial statements and Section 7.1(e)of the Subordinated Credit Agreement to provide that in the event that FirstCity fails to timely file a Form 10Q with the Securities and Exchange Commission that FirstCity will deliver to the agent and each lender a consolidated and consolidating balance sheet of FirstCity and its affiliates and other related statements for operations as of the end of the quarterly period to which such Form 10Q applies, and (ii) consented to the extension of the FirstCity Stock Purchase Program to August 30, 2009, to the increase of shares under the program by 500,000 from 1,000,000 to 1,500,000, and to the application of up to $5,444,230.83 after February 1, 2008 of working capital loan proceeds under the Revolving Credit Agreement with the Bank of Scotland or other available cash toward payment of the price of the Buyback and to use of Subordinated Debt under the Subordinated Credit Agreement toward payment of the price of the Buyback in excess of such amount.  The foregoing description of Amendment and Consent No. 3 is qualified in its entirety by reference to the full text of Amendment and Consent No. 3 attached hereto as Exhibit 10.2 and is incorporated herein by this reference.

Amendment and Consent No. 3 also provided for the waiver of defaults by FirstCity related to the failure to deliver monthly financial statements as required under the Credit Agreement.

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FirstCity reported in FirstCity’s Form 8-K filed on November 8, 2007, that FirstCity and BoS (USA) Inc. had entered into a letter agreement dated and effective October 31, 2007, which amended Section 6 of the Subordinated Credit Agreement 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.  Those conditions were satisfied on or prior to November 16, 2007.  FirstCity reported on the Subordinated Credit Agreement in the Company’s Form 8-K filed September 10, 2007.

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

On September 5, 2007, FirstCity and BoS (USA), Inc. entered into a Subordinated Delayed Draw Credit Agreement (the “Subordinated Credit Agreement”) which provides a $25,000,000 loan facility to FirstCity.  This $25,000,000 loan facility can be used to finance equity investments in new ventures approved by BoS (USA) Inc. to be funded under the facility, the senior debt and equity portion of portfolio and asset purchases, to provide for the issuance of letters of credit and for working capital loans.  The Subordinated Credit Agreement is secured by all of the assets of FirstCity and certain of its wholly-owned subsidiaries and is guaranteed by certain of the wholly-owned subsidiaries.

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

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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.

Item 5.02 Appointment of Certain Officers.

(c) On February 1, 2008, the Board of Directors of FirstCity Financial Corporation (“FirstCity”) elected  Jim W. Moore, age 57, as Executive Vice President of FirstCity and as Treasurer of FirstCity to fill the vacancy created by the resignation of James C. Holmes as Treasurer effective as of February 1, 2008, to serve in those capacities until the next annual board meeting.  Mr. Moore was also appointed as chief operating officer of FirstCity until the next annual board meeting.  Mr. Moore spent the past seven years with Santander Consumer USA Inc., formerly known as Drive Financial Services LP, a national subprime auto indirect lender.  Mr. Moore served in various capacities with Santander Consumer USA Inc including Director of Securitizations, Chief Financial Officer, and Treasurer.  Mr. Moore will receive an annual salary of $300,000, reimbursement for country club dues in the amount of $3,727.20 per year and will be entitled to participate in other plans and benefits that are available generally to all salaried employees.

Section 7- Regulation FD

Item 7.01 Regulation FD Disclosure.

On February 1, 2006, FirstCity Financial Corporation (“FirstCity”) issued a press release (“February 1, 2008 Press Release”) announcing that Jim W. Moore had been elected as Executive Vice President of FirstCity and as Treasurer of FirstCity to fill the vacancy created by the resignation of James C. Holmes as Treasurer effective as of February 1, 2008 and that Mr. Moore will also serve as chief operating officer of FirstCity.  A copy of this February 1, 2008 Press Release is being furnished as Exhibit 99.1 to this Current Report on Form 8-K.  The February 1, 2008 Press Release is incorporated by reference into this Item 7.01, and the foregoing description of the February 1, 2008 Press Release is qualified in its entirety by reference to the full text of Exhibit 99.1.

On February 5, 2006, FirstCity Financial Corporation issued a press release (“February 5, 2008 Press Release”) announcing that Jim W. Moore had been elected as Executive Vice President of FirstCity and as Treasurer of FirstCity to fill the vacancy created by the resignation of James C. Holmes as Treasurer effective as of February 1, 2008 and that Mr. Moore will also serve as chief operating officer of FirstCity.  A copy of this February 5, 2008 Press Release is being furnished as Exhibit 99.2 to this Current Report on Form 8-K.  The February 5, 2008 Press Release is incorporated by reference into this Item 7.01, and the foregoing description of the February 5, 2008 Press Release is qualified in its entirety by reference to the full text of Exhibit 99.2.

Pursuant to General Instruction B.2 of Form 8-K, the information in Item 7.01 this Form 8-K, including the exhibits shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, and is not incorporated by reference into any filing of FirstCity, whether made before or after the date hereof, regardless of any general incorporation language in any such filing.

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The information contained in the press releases is summary information that is intended to be considered in the context of our SEC filings and other public announcements that we may make, by press release or otherwise, from time to time.

FirstCity undertakes no duty or obligation to publicly update or revise the information contained in this report, although FirstCity may do so from time to time as management of the Company believes is warranted. Any such updating may be made through the filing of other reports or documents with the SEC, through press releases or through other public disclosure.

Section 9 - Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits.

                (d)           Exhibits.  Pursuant to General Instructions B.2 of Form 8-K, Exhibit 99.1 and Exhibit 99.2  relating to Item 7.01 are furnished with this Form 8-K.

10.1 Amendment and Consent No. 16 dated February 4, 2008 between FirstCity Financial Corporation and Bank of Scotland

10.2. Amendment and Consent No. 3 dated February 4, 2008 between FirstCity Financial Corporation and BoS (USA) Inc.

99.1 - Press release of the Company, dated February 1, 2008

99.2 - Press release of the Company, dated February 6, 2008

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: February 11, 2008	By:	/s/ J. Bryan Baker
		J. Bryan Baker
		Senior Vice President and Chief Financial Officer

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EXHIBIT INDEX

10.1 Amendment and Consent No. 16 dated February 4, 2008 between FirstCity Financial Corporation and Bank of Scotland

10.2. Amendment and Consent No. 3 dated February 4, 2008 between FirstCity Financial Corporation and BoS (USA) Inc.

99.1 - Press release of the Company, dated February 1, 2008

99.2 - Press release of the Company, dated February 6, 2008

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EX-10.1

Exhibit 10.1

AMENDMENT AND CONSENT NO. 16

Amendment and Consent No. 16 to Revolving Credit Agreement (this “Amendment”), dated as of February 4, 2008, among FirstCity Financial Corporation (the “Borrower”); the financial institutions (each a “Lender” and collectively, the “Lenders”) party to that certain Revolving Credit Agreement, dated as of November 12, 2004 (as heretofore amended or otherwise modified, the “Loan Agreement”), among the Borrower, the Lenders and Bank of Scotland acting through its New York branch, as Agent for the Lenders (the “Agent”); and the Agent.

W I T N E S S E T H :

WHEREAS, the Borrower has advised the Agent that it desires to buy back (the “Buyback”) up to 1,500,000 shares of its outstanding common stock (the “Subject Shares”); and

WHEREAS, the Borrower has advised the Agent that it desires that up to $12,000,000 of the Buyback Price be paid with proceeds of a Working Capital Loan under the Loan Agreement or other available cash; and

WHEREAS, the parties hereto previously executed and delivered Consents No. 8 and No. 14 with respect to the Buyback; and

WHEREAS, the Borrower has, through February 1, 2008, acquired 651,500 shares of common stock of Borrower for an aggregate repurchase price of $6,555,769.17 to effect the Buyback; and

WHEREAS, the Borrower has advised the Agent that it desires to extend the period for the Buyback to August 30, 2009 and use up to $5,444,230.83 of Working Capital Loan Proceeds under the Loan Agreement, other available cash or Subordinated Debt to complete the Buyback; and

WHEREAS, Section 8.11 of the Loan Agreement prohibits, among other things, the redemption or purchase by the Borrower of its outstanding common stock, and Section 2.1(b) and Section 8.15 of the Loan Agreement restrict the use of proceeds of Working Capital Loans to working capital purposes; and

WHEREAS, Section 7.1(a) of the Loan Agreement requires the Borrower to deliver to the Lenders monthly financial statements; and

WHEREAS, the Borrower has failed to deliver monthly financial statements required by such Section 7.1(a) and requests a waiver of the Event of Default resulting from such failure; and

WHEREAS, the Lenders are willing to grant such waiver and further to amend the Loan Agreement to delete Section 7.1(a) therefrom; and

WHEREAS, the Lenders are willing to consent to the foregoing on and subject to the terms hereof.

NOW THEREFORE, it is agreed:

1.             Definitions.  All the capitalized terms used herein which are defined in the Loan Agreement shall have the same meanings when used herein unless otherwise defined in the recitals to this Amendment.

2.             Effect of Amendment.  As used in the Loan Agreement (including all Exhibits thereto), the Notes and the other Loan Documents and all other instruments and documents executed in connection with any of the foregoing, on and subsequent to the Amendment Closing Date, any reference to the Loan Agreement shall mean the Loan Agreement as amended hereby.

3.             Representations and Agreements.  To induce the Lenders to enter into this Amendment and to grant the consents contained herein, the Borrower hereby represents and warrants to the Lenders (which representations and warranties are made as of the date hereof and as of the Amendment Closing Date) and agrees for the benefit of the Lenders (which representations, warranties and agreements shall survive the execution, delivery and effectiveness of this Amendment), as follows:

(a)           No Default or Event of Default exists nor, after giving effect to the consents contained herein, will any Default or Event of Default arise as a result of the consummation of the Buyback.

(b)           Each representation and warranty made by the Borrower in the Loan Documents is true and correct.

(c)           The execution and delivery of this Amendment by the Borrower and the consummation of the transactions contemplated herein have been duly authorized by all necessary corporate action.  The Buyback has been duly authorized by all necessary corporate action and upon acquisition of the Subject Shares such shares shall be held as treasury stock by the Borrower and the capital of the Borrower shall be reduced accordingly.

(d)           This Amendment is the legal, valid and binding obligation of the Borrower, enforceable in accordance with its terms subject, as to enforceability, to applicable bankruptcy, insolvency, reorganization and similar laws affecting the enforcement of creditors’ rights generally and to general principles of equity (regardless of whether such enforcement is considered in a proceeding in equity or at law).

(e)           No Material Adverse Change has occurred since November 12, 2004.

4.             Requests.  Borrower hereby requests that the Lenders consent, (i) for purposes of Section 8.11 of the Loan Agreement, to the extension of the Buyback to August 30, 2009 and (ii) for purposes of Section 2.1(b) and Section 8.15 of the Loan Agreement, to the application of up to $5,444,230.83 of Working Capital Loan proceeds under the Loan Agreement, other available cash and Subordinated Debt toward payment of the price of the Buyback after the date hereof.  Borrower hereby requests that the Lenders (a) waive any Event of Default resulting from the failure of the Borrower to deliver the monthly financial statements required by Section 7.1(a) of

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the Loan Agreement and (b) agree to an amendment of the Loan Agreement to remove Section 7.1(a) therefrom.

5.             Consents and Waivers.  In reliance upon the representations, warranties and agreements set forth herein, the Lenders hereby (w) consent to the extension of the Buyback and to the application of up to $5,444,230.83 after February 1, 2008 of Working Capital Loan proceeds under the Loan Agreement or other available cash toward payment of the price of the Buyback, to use of Subordinated Debt toward payment of the price of the Buyback and waive any provision of Sections 2.1(b), 8.11 or 8.15 of the Loan Agreement to the contrary; provided, however, (i) such Buyback shall occur prior to August 30, 2009, (ii) upon acquisition of the Subject Shares such shares shall be held as treasury stock by the Borrower and the capital of the Borrower shall be reduced accordingly, (x) waive any Event of Default arising from the Borrower’s failure at any time to deliver the monthly financial statements required by Section 7.1(a) of the Loan Agreement and (y) agree to the amendment described in Section 6 of this Amendment.

6.             Amendment.  In reliance upon the representations, warranties and agreements set forth herein, as of the date hereof, the Loan Agreement is hereby amended by amending and restating in their entirety Section 7.1(a) and Section 7.1(e) thereof to read as follows:

                                “(a) Intentionally deleted.”

“(e)  Concurrently with delivery to its stockholders, copies of all financial and other information delivered by Borrower to such Persons, including without limitation, its proxy statements and annual reports to stockholders.  Within two (2) Business Days after delivery to the SEC by Borrower, which in all cases shall be on a timely basis in accordance with the applicable document and the Securities Laws, copies of all reports and other filings filed by Borrower with the SEC, including without limitation, all reports on Forms 10K, 10Q or 8K promulgated under the Securities Exchange Act of 1934, as amended, and all registration statements filed under the Securities Act of 1933, as amended; provided that, without limiting or waiving any failure to comply with the delivery requirements set forth in this 7.1(e), in the event the Borrower’s Form 10Q is not timely filed with the SEC, the Borrower shall deliver to Agent and each Lender within two (2) Business Days after such Form 10Q was due, a consolidated and consolidating balance sheet of Borrower and the other members of the Consolidated Group as at the end of the quarterly period to which such 10Q applies, and the related statement of operations for such period, all certified by the CFO of Borrower and each other member of the Consolidated Group as being prepared in accordance with GAAP and to present fairly the financial position and results of operation for such period;”

7.             Effectiveness.  This Amendment shall become effective as of the date hereof when each of the following conditions (the first date on which all such conditions have been so satisfied (or so waived) is herein referred to as the “Amendment Closing Date”) has been fulfilled to the satisfaction of the Agent (or waived by the Agent in its sole discretion):

(a)           the Borrower, the Lenders and the Agent shall have executed a copy hereof,  and delivered the foregoing to the Agent at 565 Fifth Avenue, New York, New York 10017 (Attention: Loans Administration);

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(b)           on the Amendment Closing Date, both before and after giving effect to the transactions contemplated by this Amendment to be effective on the Amendment Closing Date, no Material Adverse Change shall have occurred since November 12, 2004;

(c)           no Default or Event of Default shall exist;

(d)           each representation and warranty made by the Borrower in the Loan Agreement and the other Loan Documents shall be true and correct in all material respects as of the Amendment Closing Date with the same effect as though made at and as of such date (except for those that specifically speak as of a prior date); and

                (e)           each of the Guarantors shall have executed a confirming consent, substantially in the form attached hereto as Annex A or otherwise satisfactory to the Agent, and delivered the same to the Agent at 565 Fifth Avenue, New York, New York 10017 (Attention:  Loans Administration) or such other place directed by the Agent.

8.             Ratification and Release. The Borrower does hereby remise, release and forever discharge the Agent and the Lenders and each of their respective affiliates, successors, officers, directors, employees, counsel and agents, past and present, and each of them, of and from any and all manner of actions, and causes of action, suits, debts, dues, accounts, bonds, covenants, contracts, agreements, judgments, claims and demands whatsoever in law or in equity, which against the Agent, the Lenders or any of their respective affiliates, successors, officers, directors, employees, counsel or agents, or any one or more of them, the Borrower ever had, now has, or hereafter can, shall or may have for or by reason of any cause, matter or thing that occurred or did not occur on or prior to the Amendment Closing Date with respect to the Loan Agreement, this Amendment or any Security Document or other Loan Document, any previous version hereof or thereof or any proposed amendment or waiver hereof or thereof.

9.             Limited Nature of Consents.  The consents and waivers (if any) set forth herein are limited precisely as written and shall not be deemed to prejudice any right or rights which the Agent or the Lenders may now have or may have in the future under or in connection with the Loan Agreement or any of the other Loan Documents.  Except as expressly consented to herein, the terms and provisions of the Loan Agreement and all other Loan Documents remain in full force and effect.

10.           THIS AMENDMENT 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.

11.           THIS AMENDMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES HERETO WITH RESPECT TO THE MATTERS COVERED HEREBY AND THEREBY AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.

                THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

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12.           Counterparts. This Amendment may be executed in any number of counterparts by the different parties hereto on separate counterparts, each of which when so executed and delivered shall be an original, but all the counterparts shall together constitute one and the same instrument. Telecopied signatures hereto shall be of the same force and effect as an original of a manually signed copy.

13.           Headings. The descriptive headings of the various provisions of this Amendment are for convenience of reference only and shall not be deemed to affect the meaning or construction of any of the provisions hereof.

[Signature Page Follows]

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                IN WITNESS WHEREOF,  the parties hereto have caused this Amendment to be duly executed and delivered by their respective duly authorized officers as of the date first shown.

BANK OF SCOTLAND, acting through its New York

branch, as Agent and as a Lender

By

Name:

Title:

FIRSTCITY FINANCIAL CORPORATION

By

Name:

Title:

Annex A

CONFIRMING CONSENT

                Reference is hereby made to the foregoing Amendment and Consent No. 16 (the “Amendment”) to the Revolving Credit Agreement dated as of November 29, 2007 among the Borrower, the Lenders and the Agent (said agreement, as from time to time amended or otherwise modified, the “Agreement”).

                Each Guarantor hereby consents to the terms and provisions of the Amendment and confirms and acknowledges that:

(a)  its obligations under the Loan Documents to which it is a party remain in full force and effect; and

                (b)  its consent and acknowledgement hereunder is not required under the terms of such Loan Documents and any failure to obtain its consent or acknowledgment in connection herewith or with any subsequent consent, waiver or amendment to the Agreement or any of the other Loan Documents will not affect the validity of its obligations under the aforesaid Loan Documents or any other Loan Document, and this consent and acknowledgement is being delivered for purposes of form only.

                Capitalized terms used herein and not otherwise defined have the same meanings as in the Agreement.  This Consent is dated as of the Amendment Closing Date (as defined in the Amendment).

FIRSTCITY COMMERCIAL CORPORATION
By:
	Name: James C. Holmes
	Title: Executive Vice President
FC CAPITAL CORP.
By:
	Name: James C. Holmes
	Title: Executive Vice President
FIRSTCITY CONSUMER LENDING CORPORATION
By:
	Name: James C. Holmes
	Title: Executive Vice President

FIRSTCITY EUROPE CORPORATION
By:
	Name: James C. Holmes
	Title: Executive Vice President
FIRSTCITY HOLDINGS CORPORATION
By:
	Name: James C. Holmes
	Title: Executive Vice President
FIRSTCITY HOLDINGS CORPORATION OF MINNESOTA
By:
	Name: James C. Holmes
	Title: Executive Vice President
FIRSTCITY INTERNATIONAL CORPORATION
By:
	Name: James C. Holmes
	Title: Executive Vice President
FIRSTCITY MEXICO, INC.
By:
	Name: James C. Holmes
	Title: Executive Vice President
FIRSTCITY SERVICING CORPORATION
By:
	Name: James C. Holmes
	Title: Executive Vice President
BOSQUE ASSET CORP.
By:
	Name: James C. Holmes
	Title: Executive Vice President
BOSQUE LEASING, L.P.
By:
	Name: James C. Holmes
	Title: Executive Vice President
BOSQUE LEASING GP CORP.
By:
	Name: James C. Holmes
	Title: Executive Vice President

EX-10.2

Exhibit 10.2

AMENDMENT AND CONSENT NO. 3

Amendment and Consent No. 3 to Revolving Credit Agreement (this “Amendment”), dated as of February 4, 2008, among FirstCity Financial Corporation (the “Borrower”); the financial institutions (each a “Lender” and collectively, the “Lenders”) party to that certain Subordinated Delayed Draw Credit Agreement, dated as of September 5, 2007 (as heretofore amended or otherwise modified, the “Loan Agreement”), among the Borrower, the Lenders and BoS(USA) Inc., as Agent for the Lenders (the “Agent”); and the Agent.

W I T N E S S E T H :

WHEREAS, the Borrower has advised the Agent that it has adopted a stock repurchase plan to purchase up to 1,500,000 shares of its common stock (the “Buyback”), that Borrower has, through February 1, 2008, acquired 651,500 shares of common stock of Borrower for an aggregate repurchase price of $6,555,769.17 to effect the Buyback and that Borrower desires to extend the Buyback through August 31, 2009 to purchase up to 848,500 additional  shares of its outstanding common stock (the “Subject Shares”); and

WHEREAS, the Borrower has advised the Agent that it desires that up to $12,000,000 of the purchase price for the Buyback be paid with Senior Indebtedness or other available cash and to use proceeds of a Working Capital Loan, to the extent of availability under the Borrowing Base, to pay the purchase price (the “Buyback Price”) for purchases in the Buyback after the aggregate purchase price in the Buyback exceeds $12,000,000; and

WHEREAS, Section 8.11 of the Loan Agreement prohibits, among other things, the redemption or purchase by the Borrower of its outstanding common stock, and Section 2.1(b) and Section 8.15 of the Loan Agreement restrict the use of proceeds of Working Capital Loans to working capital purposes; and

WHEREAS, the Borrower has requested that the Lenders consent to the Buyback and to the application of Working Capital Loan proceeds toward payment of the Buyback Price; and

WHEREAS, Section 7.1(a) of the Loan Agreement requires the Borrower to deliver to the Lenders monthly financial statements; and

WHEREAS, the Borrower has failed to deliver monthly financial statements required by such Section 7.1(a) and requests a waiver of the Event of Default resulting from such failure; and

WHEREAS, the Lenders are willing to grant such waiver and further to amend the Loan Agreement to delete Section 7.1(a) therefrom; and

WHEREAS, the Lenders are willing to consent to the foregoing on and subject to the terms hereof.

NOW THEREFORE, it is agreed:

1.             Definitions.  All the capitalized terms used herein which are defined in the Loan Agreement shall have the same meanings when used herein unless otherwise defined in the recitals to this Amendment.

2.             Effect of Amendment.  As used in the Loan Agreement (including all Exhibits thereto), the Notes and the other Loan Documents and all other instruments and documents executed in connection with any of the foregoing, on and subsequent to the Amendment Closing Date, any reference to the Loan Agreement shall mean the Loan Agreement as amended hereby.

3.             Representations and Agreements.  To induce the Lenders to enter into this Amendment and to grant the consents contained herein, the Borrower hereby represents and warrants to the Lenders (which representations and warranties are made as of the date hereof and as of the Amendment Closing Date) and agrees for the benefit of the Lenders (which representations, warranties and agreements shall survive the execution, delivery and effectiveness of this Amendment), as follows:

(a)           No Default or Event of Default exists nor, after giving effect to the consents contained herein, will any Default or Event of Default arise as a result of the consummation of the Buyback.

(b)           Each representation and warranty made by the Borrower in the Loan Documents is true and correct.

(c)           The execution and delivery of this Amendment by the Borrower and the consummation of the transactions contemplated herein have been duly authorized by all necessary corporate action.  The Buyback has been duly authorized by all necessary corporate action and upon acquisition of the Subject Shares such shares shall be held as treasury stock by the Borrower and the capital of the Borrower shall be reduced accordingly.

(d)           This Amendment is the legal, valid and binding obligation of the Borrower, enforceable in accordance with its terms subject, as to enforceability, to applicable bankruptcy, insolvency, reorganization and similar laws affecting the enforcement of creditors’ rights generally and to general principles of equity (regardless of whether such enforcement is considered in a proceeding in equity or at law).

(e)           No Material Adverse Change has occurred since November 12, 2004.

4.             Requests.  Borrower hereby requests that the Lenders consent, (i) for purposes of Section 8.11 of the Loan Agreement, to the Buyback through August 31, 2009 and (ii) for purposes of Section 2.1(b) and Section 8.15 of the Loan Agreement, to the application of Working Capital Loan proceeds toward payment of the price of the Buyback after the date hereof.  Borrower hereby requests that the Lenders (a) waive any Event of Default resulting from the failure of the Borrower to deliver the monthly financial statements required by Section 7.1(a) of the Loan Agreement and (b) agree to an amendment of the Loan Agreement to remove Section 7.1(a) therefrom.

5.             Consents and Waivers.  In reliance upon the representations, warranties and agreements set forth herein, the Lenders hereby (w) consent to the extension of the Buyback and to the application of Working Capital Loan proceeds, to the extent of availability under the

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Borrowing Base, toward payment of the price of the Buyback, and waive any provision of Sections 2.1(b), 8.11 or 8.15 of the Loan Agreement to the contrary; provided, however, (i) such Buyback shall occur prior to August 30, 2009, (ii) upon acquisition of the Subject Shares such shares shall be held as treasury stock by the Borrower and the capital of the Borrower shall be reduced accordingly, (x) waive any Event of Default arising from the Borrower’s failure at any time to deliver the monthly financial statements required by Section 7.1(a) of the Loan Agreement and (y) agree to the amendment described in Section 6 of this Amendment.

6.             Amendment.  In reliance upon the representations, warranties and agreements set forth herein, as of the date hereof, the Loan Agreement is hereby amended by amending and restating in their entirety Section 7.1(a) and Section 7.1(e) thereof to read as follows:

                                “(a)  Intentionally deleted.”

“(e)  Concurrently with delivery to its stockholders, copies of all financial and other information delivered by Borrower to such Persons, including without limitation, its proxy statements and annual reports to stockholders.  Within two (2) Business Days after delivery to the SEC by Borrower, which in all cases shall be on a timely basis in accordance with the applicable document and the Securities Laws, copies of all reports and other filings filed by Borrower with the SEC, including without limitation, all reports on Forms 10K, 10Q or 8K promulgated under the Securities Exchange Act of 1934, as amended, and all registration statements filed under the Securities Act of 1933, as amended; provided that, without limiting or waiving any failure to comply with the delivery requirements set forth in this 7.1(e), in the event the Borrower’s Form 10Q is not timely filed with the SEC, the Borrower shall deliver to Agent and each Lender within two (2) Business Days after such Form 10Q was due, a consolidated and consolidating balance sheet of Borrower and the other members of the Consolidated Group as at the end of the quarterly period to which such 10Q applies, and the related statement of operations for such period, all certified by the CFO of Borrower and each other member of the Consolidated Group as being prepared in accordance with GAAP and to present fairly the financial position and results of operation for such period;”

7.             Effectiveness.  This Amendment shall become effective as of the date hereof when each of the following conditions (the first date on which all such conditions have been so satisfied (or so waived) is herein referred to as the “Amendment Closing Date”) has been fulfilled to the satisfaction of the Agent (or waived by the Agent in its sole discretion):

(a)           the Borrower, the Lenders and the Agent shall have executed a copy hereof,  and delivered the foregoing to the Agent at 565 Fifth Avenue, New York, New York 10017 (Attention: Loans Administration);

(b)           on the Amendment Closing Date, both before and after giving effect to the transactions contemplated by this Amendment to be effective on the Amendment Closing Date, no Material Adverse Change shall have occurred since November 12, 2004;

(c)           no Default or Event of Default shall exist;

(d)           each representation and warranty made by the Borrower in the Loan Agreement and the other Loan Documents shall be true and correct in all material respects as of

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the Amendment Closing Date with the same effect as though made at and as of such date (except for those that specifically speak as of a prior date); and

                (e)           each of the Guarantors shall have executed a confirming consent, substantially in the form attached hereto as Annex A or otherwise satisfactory to the Agent, and delivered the same to the Agent at 565 Fifth Avenue, New York, New York 10017 (Attention:  Loans Administration) or such other place directed by the Agent.

8.             Ratification and Release. The Borrower does hereby remise, release and forever discharge the Agent and the Lenders and each of their respective affiliates, successors, officers, directors, employees, counsel and agents, past and present, and each of them, of and from any and all manner of actions, and causes of action, suits, debts, dues, accounts, bonds, covenants, contracts, agreements, judgments, claims and demands whatsoever in law or in equity, which against the Agent, the Lenders or any of their respective affiliates, successors, officers, directors, employees, counsel or agents, or any one or more of them, the Borrower ever had, now has, or hereafter can, shall or may have for or by reason of any cause, matter or thing that occurred or did not occur on or prior to the Amendment Closing Date with respect to the Loan Agreement, this Amendment or any Security Document or other Loan Document, any previous version hereof or thereof or any proposed amendment or waiver hereof or thereof.

9.             Limited Nature of Consents.  The consents and waivers (if any) set forth herein are limited precisely as written and shall not be deemed to prejudice any right or rights which the Agent or the Lenders may now have or may have in the future under or in connection with the Loan Agreement or any of the other Loan Documents.  Except as expressly consented to herein, the terms and provisions of the Loan Agreement and all other Loan Documents remain in full force and effect.

10.           THIS AMENDMENT 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.

11.           THIS AMENDMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES HERETO WITH RESPECT TO THE MATTERS COVERED HEREBY AND THEREBY AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.

                THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

12.           Counterparts. This Amendment may be executed in any number of counterparts by the different parties hereto on separate counterparts, each of which when so executed and delivered shall be an original, but all the counterparts shall together constitute one and the same instrument. Telecopied signatures hereto shall be of the same force and effect as an original of a manually signed copy.

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13.           Headings. The descriptive headings of the various provisions of this Amendment are for convenience of reference only and shall not be deemed to affect the meaning or construction of any of the provisions hereof.

[Signature Page Follows]

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                IN WITNESS WHEREOF,  the parties hereto have caused this Amendment to be duly executed and delivered by their respective duly authorized officers as of the date first shown.

BoS(USA) INC., as Agent and as a Lender
By
	Name:
	Title:
FIRSTCITY FINANCIAL CORPORATION
By
	Name:
	Title:

Annex A

CONFIRMING CONSENT

                Reference is hereby made to the foregoing Amendment and Consent No. 3 (the “Amendment”) to the Subordinated Delayed Draw Credit Agreement dated as of November 29, 2007 among the Borrower, the Lenders and the Agent (said agreement, as from time to time amended or otherwise modified, the “Agreement”).

                Each Guarantor hereby consents to the terms and provisions of the Amendment and confirms and acknowledges that:

(a)  its obligations under the Loan Documents to which it is a party remain in full force and effect; and

                (b)  its consent and acknowledgement hereunder is not required under the terms of such Loan Documents and any failure to obtain its consent or acknowledgment in connection herewith or with any subsequent consent, waiver or amendment to the Agreement or any of the other Loan Documents will not affect the validity of its obligations under the aforesaid Loan Documents or any other Loan Document, and this consent and acknowledgement is being delivered for purposes of form only.

                Capitalized terms used herein and not otherwise defined have the same meanings as in the Agreement.  This Consent is dated as of the Amendment Closing Date (as defined in the Amendment).

FIRSTCITY COMMERCIAL CORPORATION
By:
	Name: James C. Holmes
	Title: Executive Vice President
FC CAPITAL CORP.
By:
	Name: James C. Holmes
	Title: Executive Vice President
FIRSTCITY CONSUMER LENDING CORPORATION
By:
	Name: James C. Holmes
	Title: Executive Vice President

FIRSTCITY EUROPE CORPORATION
By:
	Name: James C. Holmes
	Title: Executive Vice President
FIRSTCITY HOLDINGS CORPORATION
By:
	Name: James C. Holmes
	Title: Executive Vice President
FIRSTCITY HOLDINGS CORPORATION OF MINNESOTA
By:
	Name: James C. Holmes
	Title: Executive Vice President

FIRSTCITY INTERNATIONAL CORPORATION
By:
	Name: James C. Holmes
	Title: Executive Vice President
FIRSTCITY MEXICO, INC.
By:
	Name: James C. Holmes
	Title: Executive Vice President
FIRSTCITY SERVICING CORPORATION
By:
	Name: James C. Holmes
	Title: Executive Vice President

BOSQUE ASSET CORP.
By:
	Name: James C. Holmes
	Title: Executive Vice President

BOSQUE LEASING, L.P.
By:
	Name: James C. Holmes
	Title: Executive Vice President
BOSQUE LEASING GP CORP.
By:
	Name: James C. Holmes
	Title: Executive Vice President

EX-99.1

Exhibit 99.1

N E W S  R E L E A S E

Contact:	Suzy W. Taylor
	866-652-1810

FirstCity Financial Names Jim W. Moore Chief Operating Officer

                 Waco, Texas February 1, 2008…..FirstCity Financial Corporation (NASDAQ: FCFC) is pleased to announce that Jim W. Moore, who has 38 years of banking and financial services experience, has been appointed Executive Vice President, Chief Operating Officer, and Treasurer of the company.   Mr. Moore rejoins the company after spending the past seven years with Santander Consumer USA Inc., formerly known as Drive Financial Services LP, a national subprime auto indirect lender with a managed portfolio exceeding $5 billion.  Moore served in various capacities including Director of Securitizations, Chief Financial Officer, and Treasurer.

Jim had a long term association with FirstCity as a senior officer prior to the formation of the Drive entity which resulted as a part of a sale to Bank of Scotland and reorganizations of FirstCity which occurred in 2000 and 2004.

In his role as Chief Operating Officer Mr. Moore will manage the administrative functions of the company. James T. Sartain, President and CEO of FirstCity said, “We are pleased to have Jim rejoin the company. Jim is a strong leader and team builder with impeccable credibility in the financial services industry. His knowledge and experience in the financial markets will add significant value to FirstCity.

James C. Holmes, who previously held the position of Chief Operating Officer and Treasurer, will be promoted to Managing Director of U.S. Operations. James T. Sartain said, “The increased management depth that Jim Moore brings to FirstCity allows Jim Holmes to focus 100% of his time and talent on the abundant opportunities we are seeing in our main business line, the U.S Asset Acquisition and Management.”

Forward Looking Statements

Certain statements in this press release, which are not historical in fact, including, but not limited to, statements relating to future performance, may be deemed to be forward-looking statements under the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include, without limitation, statements based on management’s expectations and statements regarding revenues, earnings guidance and future projected cash collections, as well as any  statement that may project, indicate or imply future results, performance or achievements, and may contain the “expect,” “intend,” “plan,” “estimate,” “believe,” “will be,” “will continue,” “will likely result,” “indication” and similar expressions. Such statements inherently are subject to a variety of risks and uncertainties that could cause actual results to differ materially from those projected. There are many important factors that could cause the Company’s actual results to differ materially.

These factors include, but are not limited to, those factors more discussed and identified under Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and risk factors and other risks identified in the Company’s Annual Report on Form 10-K for the year ended December 31, 2006, filed with the SEC on July 24, 2007, as well as in the Company’s other filings with the SEC.

Many of these factors are beyond the Company’s control. In addition, it should be noted that past financial and operational performance of the Company is not necessarily indicative of future financial and operational performance. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements.

The forward-looking statements in this release speak only as of the date of this release. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement to reflect any change in the Company’s expectations with regard thereto or any change in events, conditions or circumstances on which any forward-looking statement is based.

The Company is a diversified financial services company with operations dedicated to portfolio asset acquisition and resolution with offices in the U.S. and with affiliate organizations in Europe and Latin America. Its common stock is listed on the NASDAQ Stock Market, LLC under the symbol “FCFC.”

EX-99.2

Exhibit 99.2

N E W S  R E L E A S E

Contact:	Suzy W. Taylor
	866-652-1810

FirstCity Financial Increases and Extends Stock Repurchase Plan

Waco, Texas February 6, 2008…….. FirstCity Financial Corporation (NASDAQ:FCFC) announced today that it is increasing and extending its stock repurchase plan.  The Board of Directors approved the purchase of 500,000 shares of the Company’s common stock in addition to the purchase of up to 1,000,000 shares of the common stock previously approved by the Board of Directors on August 11, 2006.  The Board of Directors authorized the purchases to be made through August 30, 2009.  The timing, price and volume of repurchases will be based on market conditions and other factors. The stock repurchases may be made from time to time on the open market or in privately negotiated transactions. The stock repurchase program does not require the company to repurchase any specific number of shares, and the company may terminate the repurchase program at any time.

FirstCity has purchased 652,800 shares of its common stock pursuant to the stock repurchase plan for an aggregate purchase price of $6,566,884.17 during the period from August 14, 2006 through February 4, 2008.

FirstCity currently has 10,786,837 shares of common stock outstanding.  The closing sale price of its common stock on February 4, 2008, as reported on the NASDAQ Stock Market, was $8.508 per share.

James T. Sartain, President and CEO, said, “We believe that our common shares are undervalued at current prices, and that, at the present stock price, the repurchase program represents a good alternative to achieve our strategy of building long term shareholder value. Our available resources will allow the company to repurchase these shares, while at the same time preserve adequate liquidity to continue growing our earning asset base.”

Forward Looking Statements

Certain statements in this press release, which are not historical in fact, including, but not limited to, statements relating to future performance, may be deemed to be forward-looking statements under the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include, without limitation, statements based on management’s expectations and statements regarding revenues, earnings guidance and future projected cash collections, as well as any  statement that may project, indicate or imply future results, performance or achievements, and may contain the “expect,” “intend,” “plan,” “estimate,” “believe,” “will be,” “will continue,” “will likely result,” “indication” and similar expressions. Such statements inherently are subject to a variety of risks and uncertainties that could cause actual results to differ materially from those projected. There are many important factors that could cause the Company’s actual results to differ materially.

These factors include, but are not limited to, the performance of the Company’s subsidiaries and affiliates, availability of portfolio assets, assumptions underlying portfolio asset performance, risks associated with start up of new businesses and entry into new foreign markets, risks associated with foreign operations, currency exchange rate fluctuations, interest rate risk, risks of declining value of loans, collateral or assets, the degree to which the Company is leveraged, the Company’s continued need for financing, availability of the Company’s credit facilities, ability to obtain additional financing from the Bank of Scotland or any other lender, the impact of certain covenants in loan agreements of the Company and its subsidiaries, fluctuation in residential and commercial real estate values, capital markets conditions, including  the markets for asset-backed securities, uncertainties of any litigation arising from discontinued operations, factors more fully discussed and identified under Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and risk factors and other risks identified in the Company’s Annual Report on Form 10-K for the year ended December 31, 2006, filed with the SEC on July 24, 2007, as well as in the Company’s other filings with the SEC.

Many of these factors are beyond the Company’s control. In addition, it should be noted that past financial and operational performance of the Company is not necessarily indicative of future financial and operational performance. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements.

The forward-looking statements in this release speak only as of the date of this release. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement to reflect any change in the Company’s expectations with regard thereto or any change in events, conditions or circumstances on which any forward-looking statement is based.

The Company is a diversified financial services company with operations dedicated to portfolio asset acquisition and resolution with offices in the U.S. and with affiliate organizations in Europe and Latin America. Its common stock is listed on the NASDAQ Stock Market, LLC under the symbol “FCFC.”

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