FCFC » Topics » Item 5. Other Information.

This excerpt taken from the FCFC 10-Q filed May 12, 2009.
Item 5.  Other Information.

 

ABL has a revolving loan facility with Wells Fargo Foothill, LLC (“WFF”) for the purpose of financing and acquiring SBA loans. The obligations under this facility are secured by substantially all of the assets of ABL. In connection with the first amendment to this facility on February 27, 2007, the maximum credit line on the loan facility was increased to $40.0 million; and FirstCity provided WFF with an unconditional guaranty, up to a maximum of $5.0 million plus enforcement cost, of the obligations of ABL under the loan facility that relates to funds advanced to ABL for the acquisition of a SBA loan portfolio in February 2007. The guaranty was to remain in effect until the obligations incurred in connection with the advance to finance the SBA loan portfolio acquisition were paid in full.

 

On February 18, 2009, ABL and WFF entered into a Third Amendment (the “Amendment”), to be effective February 1, 2009, which amended certain terms in the loan facility. Additionally, FirstCity executed an Amended and Restated General Continuing Limited Guaranty dated as of February 18, 2009 in favor of WFF which extended the guaranty to include all of ABL’s debt obligations under the loan facility, up to a maximum of $5.0 million plus enforcement costs, and provides that the guaranty will remain in place until all indebtedness under the loan facility is paid in full.

 

The Amendment made the following changes to the existing loan facility effective as of February 1, 2009: (i) reduced the maximum outstanding amount of the credit line from $40.0 million to $25.0 million, (ii) provided for the guaranty by FirstCity of all indebtedness under the loan facility up to a maximum of $5.0 million plus enforcement cost; (iii) revised the interest rates applicable to base rate loans; (iv) extended the maturity date to January 31, 2010; (v) reduced the minimum tangible net worth requirement for the fiscal quarter ending March 31, 2009, and for each quarter thereafter to $5.5 million, plus 100% of the positive amounts of ABL’s net income for each fiscal quarter after March 31, 2009; (vi) revised the facility fee of one-quarter of one percent (0.25%) per annum to be charged for non-use of the available maximum credit line to be calculated using $25 million as the amount of the maximum credit line on or after February 1, 2009; and (vii) revised the borrowing base for originating loans to be changed to an amount equal to 70% of the net eligible non-guaranteed loans originated by ABL that are borrower originated mixed collateral loans.

 

This excerpt taken from the FCFC 10-Q filed Nov 10, 2008.
Item 5. Other Information.

 

On October 17, 2008, American Business Lending, Inc. (“American”), an affiliate of FirstCity, as borrower, and Wells Fargo Foothill, LLC (“Lender”), as lender, entered into a Conditional Waiver Agreement Regarding Event of Default dated effective September 30, 2008, which waived compliance with Section 5.11(a) of the loan agreement for the fiscal quarter ending September 30, 2008, and was conditioned upon American maintaining, on a consolidated basis with American’s subsidiaries, tangible net worth of not less than $6,000,000 as of the quarter ending September 30, 2008, after taking into account any dividends paid or accrued.. The Agreement provided for the waiver of the default by American which occurred on September 30, 2008, as a result of American’s failure to meet the tangible net worth requirement of $6,500,000 under Section 5.11(a) of the loan agreement.

 

On November 10, 2008, American Business Lending, Inc., an affiliate of FirstCity, as borrower, and Wells Fargo Foothill, LLC, as lender, entered into a Conditional Waiver Under Loan Agreement dated November 10, 2008 and effective September 30, 2008, which waived compliance with Section 5.11(a) of the loan agreement for the fiscal quarters ending September 30, 2008 and December 31, 2008, with respect to a portfolio of purchased loans, and was conditioned upon American not causing or allowing, as of the fiscal quarters ending September 30, 2008 and December 31, 2008, the ratio of (i) loan losses for the twelve month period then ending, to (ii) the average amount of all non-guaranteed notes receivable outstanding during such period, to be more than three percent.

 

This excerpt taken from the FCFC 10-Q filed May 12, 2008.
Item 5.  Other Information.

 

None

 

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These excerpts taken from the FCFC 10-K filed Mar 17, 2008.

Item 9B.    Other Information.

        WAMCO 30, Ltd. and P.R.L. Developpement, SAS ("PRL") are considered to be significant subsidiaries of the Company under SEC Rule 3-09 under Regulation S-X ("Rule 3-09"). Rule 3-09 requires the Company to file separate company financial statements for its significant subsidiaries that are not consolidated with the Company's accounts. As such, separate company financial statements of WAMCO 30, Ltd. are presented in the WAMCO Partnerships combined financial statements as of December 31, 2007, 2006 and 2005 that are included in the Company's 2007 Annual Report—Financial Statements and Analysis. However, separate company financial statements for PRL are not included in this Annual Report. In accordance with Rule 3-09 for foreign equity method investments, Company management expects to file by amendment to this Annual Report any required financial statements with respect to PRL on or before June 30, 2008.

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PART III



Item 9B.    
Other Information.



        WAMCO 30, Ltd. and P.R.L. Developpement, SAS ("PRL") are considered to be significant subsidiaries of the Company under SEC
Rule 3-09 under Regulation S-X ("Rule 3-09"). Rule 3-09 requires the Company to file separate company financial statements
for its significant subsidiaries that are not consolidated with the Company's accounts. As such, separate company financial statements of WAMCO 30, Ltd. are presented in the WAMCO Partnerships
combined financial statements as of December 31, 2007, 2006 and 2005 that are included in the Company's 2007 Annual Report—Financial Statements and Analysis. However, separate
company financial statements for PRL are not included in this Annual Report. In accordance with Rule 3-09 for foreign equity method investments, Company management expects to file
by amendment to this Annual Report any required financial statements with respect to PRL on or before June 30, 2008.



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PART III



This excerpt taken from the FCFC 10-Q filed Aug 10, 2007.
Item 5.  Other Information.

On June 29, 2007, FirstCity Financial Corporation (“FirstCity”) and Bank of Scotland, as agent for the lenders, entered into an Amendment No. 9 (the “FirstCity Amendment”) to the Revolving Credit Agreement dated November 12, 2004.  The FirstCity Amendment dated June 29, 2007, amended the existing $96,000,000 revolving credit facility which is used to finance acquisitions made by FirstCity, for the issuance of letters of credit and for working capital loans.  The FirstCity Amendment made the following changes to the existing loan facility: (i) amended provisions of the revolving credit agreement to allow loans to be made at fixed interest rates for periods of time agreed to by FirstCity and the Bank of Scotland; and (ii) amended the covenant for the Indebtedness to Tangible Net Worth ratio to require that the ratio be equal to or less than 3.50 to 1.00 for each fiscal quarter.  The obligations of FirstCity under the Revolving Credit Agreement are guaranteed by substantially all of the wholly-owned subsidiaries of FirstCity and are secured by security interests in substantially all of the assets of FirstCity and its wholly-owned subsidiaries.

On June 29, 2007, FH Partners, LLC, an indirect wholly-owned affiliate of FirstCity, and Bank of Scotland, acting through its New York branch, as agent for itself as lender, entered into an Amendment No. 1 (the “FH Partners Amendment”) to the Revolving Credit Agreement dated June 29, 2007.  The FH Partners Amendment dated June 29, 2007, amended the existing $50,000,000 revolving portfolio acquisition facility used by FH Partners, LLC to finance portfolio and asset purchases.  The Amendment made the following changes to the existing loan facility: (i) amended the requirement for the ratio of EBITDA to Interest Coverage to be not less than 1.50 to 1.00 for each twelve month period; and (ii) amended the requirement for the ratio of Indebtedness to Tangible Net Worth ratio to be equal to or less than 3.50 to 1.00 for each fiscal quarter.  The obligations of FH Partners, LLC under the loan facility are secured by all of the assets of FH Partners, LLC and are guaranteed by FirstCity and the primary wholly-owned subsidiaries of FirstCity.

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 provided a loan facility 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. These facilities were secured by all of the assets of FirstCity and certain of its wholly-owned subsidiaries. The outstanding balances under those facilities were converted to loans under the revolving credit agreement between FirstCity and the Bank of Scotland dated November 12, 2004.  The revolving loan facilities were subsequently amended to provide for loans up to a maximum of $175,000,000 to finance acquisitions made by FirstCity and issuance of letters of credit and working capital.  This loan facility is being amended by the FirstCity Amendment.

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”) that provides a $50,000,000 revolving portfolio acquisition facility for FH Partners, LLC to be secured by all of the assets of FH Partners, LLC. The loan facility is used by FH Partners, LLC to finance portfolio and asset purchases.  The obligations of FH Partners, LLC under the FHP Revolving Credit Agreement are guaranteed by FirstCity and the primary wholly-owned subsidiaries of FirstCity.  The FHP Revolving Credit Agreement is being amended by the FH Partners Amendment.

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

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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. 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.

This excerpt taken from the FCFC 10-Q filed Jul 31, 2007.
Item 5.  Other Information.

On May 2, 2007 the Chief Financial Officer of the Company concluded that a material charge was required for Portfolio Assets with an impact to FirstCity in the amount of $1.9 million in the first quarter of 2007. Charges with respect to Portfolio Assets owned by Acquisition Partnerships had an impact to FirstCity of $1.6 million ($.7 million in the United States, $.2 million in Europe and $.7 million in Latin America).  A material charge was also required for a Portfolio Asset owned by FH Partners, L.P., a wholly-owned subsidiary of the Company in the amount of $.3 million.  The Company does not believe that any of the impairment charges will result in future cash expenditures.

This excerpt taken from the FCFC 10-Q filed Nov 9, 2006.
Item 5.  Other Information.

On August 11, 2006, the Compensation Committee of the Board of Directors of the Company approved a bonus of $50,000.00 be paid to Richard J. Vander Woude.

On August 3, 2006, the shareholders of the Company approved the FirstCity Financial Corporation 2006 Stock Option and Award Plan (the “Plan”) at the Company’s 2006 annual meeting of shareholders. The Plan was adopted by the Company’s Board of Directors on August 3, 2006.

The Plan permits the grant of awards to employees of the Company and its subsidiaries and awards to non-employee directors of the Company. Awards under the Plan may be made in the form of nonqualified stock options, incentive stock options, performance shares and restricted stock. A total of 500,000 shares of common stock are authorized for issuance pursuant to the Plan. Additional shares subject to outstanding awards granted under other stock incentive plans of the Company may become available for issuance pursuant to the Plan if the awards are terminated without issuance of the shares, settled for cash, or exchanged for non-share awards.

The Plan will be administered by the Company’s Compensation Committee, and will terminate on the day prior to the tenth anniversary of its effective date of August 3, 2006, unless terminated earlier in specified circumstances.

A detailed description of the terms of the Plan is set forth in the Company’s definitive proxy statement for the 2006 annual meeting of shareholders, which was filed with the Securities and Exchange Commission on June 26, 2006. A copy of the Plan is incorporated by reference to exhibit 10.13 to this Report.

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