exv10w2



 





Exhibit 10.2




November 1, 2004



FirstCity Financial Corporation

6400 Imperial Drive

Waco, Texas 76712

Attention: Mr. Jim Sartain, President


Dear Jim:



Closing Statement




     Reference is made to the letter agreement (the “Proceeds Letter”) dated as
of September 21, 2004 among FirstCity Financial Corporation (“FC”), Bank of
Scotland, acting through its New York branch, The Governor & Company of the
Bank of Scotland (“BoS-UK”) and BoS (USA) Inc. relating to the contemplated use
of the $86,800,000 in proceeds from the sale of the Subject Securities by FC
and FirstCity Consumer Lending Corporation (“CLC”) and as contemplated in
Section 2.8 of the Securities Purchase Agreement. All capitalized terms used
in this letter agreement shall have the meaning set forth in the Securities
Purchase Agreement unless such term is defined in this letter agreement in
which case such defined term shall have the meaning set forth herein.



     This letter sets forth the distribution of funds as at November 1, 2004
(the “Payment Date”) as contemplated by the Securities Purchase Agreement and
in addition provides for a Closing Statement of those loans referenced in the
Proceeds Letter.



     FC, CLC, BOS-UK, Bank of Scotland, acting through its New York branch, and
BoS (USA), Inc. acknowledge that the payments and distributions set forth below
were made and received on the Payment Date as contemplated by in Section 2.8 of
the Securities Purchase Agreement and by the Proceeds Letter.



     The Purchase Price payable to CLC by the Buying Entities and CLC’s portion
of the Funding Distributions were applied on Payment Date, as follows:




	 	(i)	 	the amount of $16,003,946.67 was paid to BOS-UK in full
satisfaction of the outstanding principal balance of $16,000,000 on
the Non-Recourse Loan and accrued interest in the amount of
$3,946.67 payable as of the Payment Date; and
	 
	 	(ii)	 	the balance of $70,796,053.33 was distributed to FCFC.




     The balance of the Purchase Price and the Funding Distributions
distributed by CLC to FCFC on the Payment Date ($70,796,053.33) was applied on
the Payment Date, as follows:



 









 






	 	(iii)	 	the amount of $12,113,993.54 was paid to BoS (USA) Inc. in
full satisfaction of the outstanding principal balance due under the
Tranche II Loans (as defined in the Restated Agreement) under the
Restated Agreement in the amount of $12,000,000, interest in the
amount of $8,767.50 accrued and payable thereon and breakage costs
in the amount of $105,226.04 as of the Payment Date);
	 
	 	(iv)	 	the amount of $24,621,688.09 was paid to BoS (USA) Inc. in
full satisfaction of the outstanding principal balance due under the
Tranche I Loans (as defined in the Restated Agreement) under the
Restated Agreement in the amount of $24,607,025.00 and interest in
the amount of $14,663.09 accrued and payable thereon as of the
Payment Date);
	 
	 	(v)	 	the amount of $500,000.00 was paid to the Bank of Scotland,
acting through its New York branch, as agent for the benefit of the
lenders under the Restated Agreement in full satisfaction of the
Repayment Fee related to the Tranche II Loans under Section 4.2 of
the Restated Agreement;
	 
	 	(vi)	 	the amount of $4,007,675.40 was paid to Bank of Scotland,
acting through its New York branch, in full satisfaction of the
outstanding principal balance due under the Revolving Credit Loans
(as defined in the PFAL) in the amount of $4,006,103.00 and interest
in the amount of $1,572.40 accrued and payable thereon as of the
Payment Date;
	 
	 	(vii)	 	the amount of $29,552,696.30 was paid to Bank of Scotland,
acting through its New York branch, as agent for the “Lenders”
pursuant to the Cash Collateral Agreement dated November 1, 2004, to
deposit the balance in the amount of $29,552,696.30 in a cash
collateral account as security for obligations under the PFAL, held
at Bank of Scotland, New York branch to be utilized by FCFC as set
forth in paragraph (viii) of the Proceeds Letter.




[End of Page]




 









 








     Executed and acknowledged effective as of November 1, 2004.

	 	 	 	 	 
	 	Very truly yours,





BANK OF SCOTLAND, acting through its

New York branch, individually and as

Agent under the PFAL and Restated

Agreement

 	 
	 	By:  	 	 
	 	 	Name:  	Joseph Fratus 	 
	 	 	Title:  	First Vice President 	 
	 


	 	 	 	 	 
	 	THE GOVERNOR & COMPANY OF

THE BANK OF SCOTLAND

 	 
	 	By:  	 	 
	 	 	Name:  	James Halley 	 
	 	 	Title:  	Executive Vice President 	 
	 


	 	 	 	 	 
	 	BoS (USA) Inc.

 	 
	 	By:  	 	 
	 	 	Name:  	Lolita M. Lazaro 	 
	 	 	Title:  	Secretary 	 
	 




CONFIRMED AND AGREED




FIRSTCITY FINANCIAL CORPORATION



	 	 	 	 
	 	 
	By:  	 	 
	 	Name:  	James T. Sartain 	 
	 	Title:  	President 	 
	 



FIRSTCITY CONSUMER LENDING CORPORATION


	 	 	 	 
	 	 
	By:  	 	 
	 	Name:  	James T. Sartain 	 
	 	Title:  	Chairman of the Board