EXHIBIT 10.85
PLEDGE AND SECURITY AGREEMENT
(Borrower)
THIS PLEDGE AND SECURITY AGREEMENT (this "AGREEMENT"), dated as of
December 22, 2000, is between FIRST INVESTORS FINANCIAL SERVICES, INC., a Texas
corporation ("DEBTOR"), and BANK OF AMERICA, N.A., as Administrative Agent for
the Lenders referred to below (in such capacity, the "SECURED PARTY").
R E C I T A L S:
A. Debtor has entered into that certain Credit Agreement dated as of
December 22, 2000, with the lenders party thereto (each individually a "LENDER"
and collectively, the "LENDERS"), Secured Party, as Administrative Agent for the
Lenders and Banc of America Securities LLC, as lead arranger and sole book
manager (such agreement as it may be amended or otherwise modified from time to
time is referred to herein as the "CREDIT AGREEMENT").
B. The execution and delivery of this Agreement is required by the
Credit Agreement as a condition to making extensions of credit thereunder.
C. Terms defined in the Credit Agreement, and not otherwise defined
herein, are used herein with their meanings as set forth in the Credit
Agreement.
NOW THEREFORE, in consideration of the premises and for other good and
valuable consideration, the adequacy, receipt, and sufficiency of which are
hereby acknowledged, and in order to induce Secured Party and the Lenders to
make Loans pursuant to the Credit Agreement, the parties hereto hereby agree as
follows:
ARTICLE I.
DEFINITIONS
Section 1.1 DEFINITIONS. As used in this Agreement, the following terms
have the following meanings:
"ACCOUNT" means any "account," as such term is defined in Article or
Chapter 9 of the UCC, now owned or hereafter acquired by Debtor, and, in
any event, shall include, without limitation, each of the following,
whether now owned or hereafter acquired by Debtor: (a) all rights of
Debtor to payment for goods sold or leased, services rendered or the
license of Intellectual Property, whether or not earned by performance;
(b) all accounts receivable of Debtor; (c) all rights of Debtor to receive
any payment of money or other form of consideration; (d) all security
pledged, assigned, or granted to or held by Debtor to secure any of the
foregoing; (e) all guaranties of, or indemnifications with respect to, any
of the foregoing; (f) all rights of Debtor as an unpaid seller of goods or
services, including, but not limited to, all rights of stoppage in
transit, replevin, reclamation, and resale; and (g) all rights to
brokerage commissions.
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"AMENDMENT" means any amendment of this Agreement between Debtor and
Secured Party required hereby or entered into pursuant to the terms of the
Credit Agreement, including, without limitation, any amendment in the form
of EXHIBIT A hereto.
"CAPITAL STOCK" means corporate stock and any and all shares,
partnership interests, equity interests, rights, securities or other
equivalent evidences of ownership (however designated) issued by any
entity (whether a corporation, partnership, limited liability company,
limited partnership or other type of entity).
"CHATTEL PAPER" means any "chattel paper," as such term is defined
in Article or Chapter 9 of the UCC, now owned or hereafter acquired by
Debtor.
"COLLATERAL" has the meaning specified in SECTION 2.1 of this
Agreement.
"COPYRIGHT LICENSE" means any written agreement now or hereafter in
existence granting to Debtor any right to use any Copyright, including,
without limitation, the agreements identified on SCHEDULE 3.5.
"COPYRIGHTS" means all of the following: (a) all copyrights, works
protectable by copyright, copyright registrations, and copyright
applications, including, without limitation, those identified on SCHEDULE
3.5; (b) all renewals, extensions, and modifications thereof; (c) all
income, royalties, damages, profits, and payments relating to or payable
under any of the foregoing; (d) the right to sue for past, present, or
future infringements of any of the foregoing; and (e) all other rights and
benefits relating to any of the foregoing throughout the world; in each
case, whether now owned or hereafter acquired by Debtor.
"COPYRIGHT SECURITY AGREEMENT" means a security agreement in form
and substance satisfactory to Secured Party pursuant to which Debtor
grants to Secured Party, for the benefit of the Lenders, a first priority
security interest in its Copyrights and Copyright Licenses for purposes of
recording such security interest with any copyright office of a
Governmental Authority, as such agreement may hereafter be amended,
supplemented, or otherwise modified from time to time.
"DEPOSIT ACCOUNTS" means any and all deposit accounts, certificates
of deposit, or other bank accounts now owned or hereafter acquired or
opened by Debtor, and any account which is a replacement or substitute for
any of such accounts including, without limitation, those deposit accounts
identified on SCHEDULE 3.2.
"DOCUMENT" means any "document," as such term is defined in Article
or Chapter 9 of the UCC, now owned or hereafter acquired by Debtor,
including, without limitation, all documents of title and all receipts
covering, evidencing, or representing goods now owned or hereafter
acquired by Debtor.
"EQUIPMENT" means any "equipment," as such term is defined in
Article or Chapter 9 of the UCC, now owned or hereafter acquired by Debtor
and, in any event, shall include,
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without limitation, all machinery, furniture, trailers, rolling stock,
vessels, aircraft, and vehicles now owned or hereafter acquired by Debtor
and any and all additions, substitutions, and replacements of any of the
foregoing, wherever located, together with all attachments, components,
parts, equipment, and accessories installed thereon or affixed thereto.
"FINANCIAL ASSETS" means any "financial asset," as such term is
defined in Article or Chapter 8 of the UCC.
"FIXTURES" means any "fixtures," as such term is defined in Article
or Chapter 9 of the UCC, now owned or hereafter acquired by Debtor and in
any event shall include, without limitation, all plant fixtures, business
fixtures, other fixtures, and storage office facilities, wherever located,
and all additions and accessions thereto and replacements therefor.
"GENERAL INTANGIBLES" means any "general intangibles," as such term
is defined in Article or Chapter 9 of the UCC, now owned or hereafter
acquired by Debtor and, in any event, shall include, without limitation,
each of the following, whether now owned or hereafter acquired by Debtor:
(a) all of Debtor's Intellectual Property together with all of Debtor's
trade secrets, proprietary information, customer lists, designs, and
inventions; (b) all of Debtor's books, records, data, plans, manuals,
computer software, computer tapes, computer disks, computer programs,
source codes, object codes, and all rights of Debtor to retrieve data and
other information from third parties; (c) all of Debtor's contract rights,
which include, without limitation, (i) all rights of Debtor to receive
moneys due and to become due under or pursuant to such agreements, (ii)
all rights of Debtor to receive proceeds of any insurance, indemnity,
warranty, or guaranty with respect to such agreements, (iii) all claims of
Debtor for damages arising out of or for breach of or default under such
agreements, (iv) all rights of Debtor to terminate such agreements, to
perform thereunder, and to compel performance and otherwise exercise all
rights and remedies thereunder, and (v) any rights to Liens securing
Pledged Collateral or Accounts, (d) all rights or interests of Debtor in
any partnership or joint venture; (e) all rights of Debtor to payment
under letters of credit and similar agreements; (f) all tax refunds and
tax refund claims of Debtor; (g) all choses in action and causes of action
of Debtor (whether arising in contract, tort, or otherwise and whether or
not currently in litigation) and all judgments in favor of Debtor; (h) all
rights and claims of Debtor under warranties and indemnities; and (i) all
rights of Debtor under any insurance, surety, or similar contract or
arrangement, including, without limitation, all claims under governmental
health care programs and claims under private insurance to which Debtor is
entitled or which have been assigned to it.
"INSTRUMENT" means any "instrument," as such term is defined in
Article or Chapter 9 of the UCC, now owned or hereafter acquired by
Debtor, and, in any event, shall include all promissory notes, drafts,
bills of exchange, and trade acceptances, whether now owned or hereafter
acquired by Debtor.
"INTELLECTUAL PROPERTY" means the Copyrights, Copyright Licenses,
Patents, Patent Licenses, Trademarks, and Trademark Licenses.
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"INVENTORY" means any "inventory," as such term is defined in
Article or Chapter 9 of the UCC, now owned or hereafter acquired by
Debtor, and, in any event, shall include, without limitation, each of the
following, whether now owned or hereafter acquired by Debtor: (a) all
goods and other personal property that are held for sale or lease or to be
furnished under any contract of service; (b) all raw materials,
work-in-process, finished goods, inventory, supplies, and materials; (c)
all wrapping, packaging, advertising, and shipping materials; (d) all
goods that have been returned to, repossessed by, or stopped in transit by
Debtor; and (e) all Documents evidencing any of the foregoing.
"INVESTMENT PROPERTY" means any "investment property" as such term
is defined in Article or Chapter 9 of the UCC, now owned or hereafter
acquired by Debtor, and, in any event, shall include, without limitation,
each of the following, whether now owned or hereafter acquired: (a) any
security, whether certificated or uncertificated; (b) any security
entitlement; (c) any securities account (including, without limitation,
those described on SCHEDULE 3.2); (d) any commodity contract; and (e) any
commodity account (including, without limitation, those identified on
SCHEDULE 3.2).
"OBLIGATIONS" means and includes the "Obligations" as such term is
defined in the Credit Agreement.
"PATENT LICENSE" means any written agreement now or hereafter in
existence granting to Debtor any right to use any invention on which a
Patent is in existence, including, without limitation, the agreements
identified on SCHEDULE 3.5.
"PATENTS" means any and all of the following: (a) all patents,
patent applications, and patentable inventions, including, without
limitation, those identified on SCHEDULE 3.5, and all of the inventions
and improvements described and claimed therein; (b) all continuations,
divisions, renewals, extensions, modifications, substitutions,
continuations-in-part, or reissues of any of the foregoing; (c) all
income, royalties, profits, damages, awards, and payments relating to or
payable under any of the foregoing; (d) the right to sue for past,
present, and future infringements of any of the foregoing; and (e) all
other rights and benefits relating to any of the foregoing throughout the
world; in each case, whether now owned or hereafter acquired by Debtor.
"PATENT SECURITY AGREEMENT" means a security agreement in form and
substance satisfactory to Secured Party pursuant to which Debtor grants to
Secured Party, for the benefit of the Lenders, a first priority security
interest in its Patents and Patent Licenses for purposes of recording such
security interest with any patent office of a Governmental Authority, as
such agreement may be amended, supplemented, or otherwise modified from
time to time.
"PLEDGED COLLATERAL" means the Pledged Shares and the Instruments
evidencing the obligations of Subsidiaries to Debtor described in SECTION
2.1(C).
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"PLEDGED SHARES" means the Capital Stock identified on SCHEDULE 1.1
attached hereto, which constitutes 100% of the Capital Stock of each
Subsidiary of Debtor listed on said SCHEDULE 1.1, or on SCHEDULE 1 to an
Amendment.
"PROCEEDS" means any "proceeds," as such term is defined in Article
or Chapter 9 of the UCC and, in any event, shall include, but not be
limited to, (a) any and all proceeds of any insurance, indemnity,
warranty, or guaranty payable to Debtor from time to time with respect to
any of the Collateral, (b) any and all payments (in any form whatsoever)
made or due and payable to Debtor from time to time in connection with any
requisition, confiscation, condemnation, seizure, or forfeiture of all or
any part of the Collateral by any Governmental Authority (or any Person
acting, or purporting to act, for or on behalf of any Governmental
Authority), and (c) any and all other amounts from time to time paid or
payable under or in connection with any of the Collateral.
"TRADEMARK LICENSE" means any written agreement now or hereafter in
existence granting to Debtor any right to use any Trademark, including,
without limitation, the agreements identified on SCHEDULE 3.5.
"TRADEMARKS" means all of the following: (a) all trademarks, trade
names, corporate names, company names, business names, fictitious business
names, trade styles, service marks, logos, other business identifiers,
prints and labels on which any of the foregoing appear, all registrations
and recordings thereof, and all applications in connection therewith,
including, without limitation, registrations, recordings, and applications
in the United States Patent and Trademark Office or in any similar office
or agency of the United States, any state thereof or any other country or
any political subdivision thereof, including, without limitation, those
identified in SCHEDULE 3.5; (b) all reissues, extensions, and renewals
thereof; (c) all income, royalties, damages, and payments now or hereafter
relating to or payable under any of the foregoing, including, without
limitation, damages or payments for past or future infringements of any of
the foregoing; (d) the right to sue for past, present, and future
infringements of any of the foregoing; (e) all rights corresponding to any
of the foregoing throughout the world; and (f) all goodwill associated
with and symbolized by any of the foregoing; in each case, whether now
owned or hereafter acquired by Debtor.
"TRADEMARK SECURITY AGREEMENT" means a security agreement in form
and substance satisfactory to Secured Party pursuant to which Debtor
grants to Secured Party, for the benefit of the Lenders, a first priority
security interest in its Trademarks and Trademark Licenses for purposes of
recording such security interest with the trademark office of any
Governmental Authority, as such agreement may be amended, supplemented, or
otherwise modified from time to time.
"UCC" means the Uniform Commercial Code as in effect in the State of
Texas and/or any other jurisdiction the laws of which may be applicable to
or in connection with the creation, perfection or priority of any Lien on
any Collateral.
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Section 1.2. OTHER DEFINITIONAL PROVISIONS. References to "Sections,"
"subsections," "Exhibits," and "Schedules" shall be to Sections, subsections,
Exhibits and Schedules, respectively, of this Agreement unless otherwise
specifically provided. All definitions contained in this Agreement are equally
applicable to the singular and plural forms of the terms defined. All references
to statutes and regulations shall include any amendments of the same and any
successor statutes and regulations. References to particular sections of the UCC
should be read to refer also to parallel sections of the Uniform Commercial Code
as enacted in each state or other jurisdiction where any portion of the
Collateral is or may be located. Terms used herein, which are defined in the
UCC, unless otherwise defined herein or in the Credit Agreement, shall have the
meanings determined in accordance with the UCC.
ARTICLE II.
SECURITY INTEREST
Section 2.1 SECURITY INTEREST. As collateral security for the prompt
payment and performance in full when due of the Obligations (whether at stated
maturity, by acceleration, or otherwise), Debtor hereby pledges and assigns to
Secured Party, and grants to Secured Party a continuing lien on and security
interest in, all of Debtor's right, title, and interest in and to the following,
whether now owned or hereafter arising or acquired and wherever located (the
"COLLATERAL"):
(a) all Accounts;
(b) all Chattel Paper;
(c) all Instruments, including, without limitation, or in addition, all
instruments evidencing indebtedness from time to time owed to Debtor
by the Subsidiaries, and all interest, cash, and other property from
time to time received, receivable, or otherwise distributed or
distributable in respect of or in exchange for any or all of such
Instruments;
(d) all General Intangibles;
(e) all Documents;
(f) all Equipment;
(g) all Fixtures;
(h) all Inventory;
(i) all Financial Assets and Investment Property, including, without
limitation, or in addition, the following:
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(1) all of the Pledged Shares and the certificates (if any)
representing the Pledged Shares, and all dividends, cash,
Instruments, and other property from time to time received,
receivable, or otherwise distributed or distributable in
respect of or in exchange for any or all of the Pledged
Shares;
(2) all additional Capital Stock from time to time owned or
acquired by Debtor in any manner, and all dividends, cash,
Instruments, and other property from time to time received,
receivable, or otherwise distributed or distributable in
respect of or in exchange for any or all of such Capital
Stock; and
(j) all of Debtor's Deposit Accounts and all funds, certificates,
Documents, Instruments, checks, drafts, wire transfer receipts, and
other earnings, profits, or other Proceeds from time to time
representing, evidencing, deposited into, or held in the Deposit
Accounts; and
(k) all products and Proceeds, in cash or otherwise, of any of the
property described in the foregoing CLAUSES (A) THROUGH (J).
Section 2.2. DEBTOR REMAINS LIABLE. Notwithstanding anything to the
contrary contained herein, (a) Debtor shall remain liable under the
documentation included in the Collateral to the extent set forth therein to
perform all of its duties and obligations thereunder to the same extent as if
this Agreement had not been executed, (b) the exercise by Secured Party of any
of its rights or remedies hereunder shall not release Debtor from any of its
duties or obligations under such documentation, (c) Secured Party shall not have
any obligation under any of such documentation included in the Collateral by
reason of this Agreement, and (d) Secured Party shall not be obligated to
perform any of the obligations of Debtor thereunder or to take any action to
collect or enforce any claim for payment assigned hereunder.
Section 2.3 RELEASE OF ACCOUNTS UPON SALE. As provided in SECTION 11.8 of
the Credit Agreement, Debtor is authorized to (i) sell its Accounts to FIRC
pursuant to the FIRC Purchase Agreement, (ii) repurchase Receivables from ACAC
Automobile Trust 1998-01 for subsequent resale to First Investors Auto Capital
Corporation, (iii) sell its Accounts to FIARC pursuant to the Enterprise
Purchase Agreement, and (iv) sell its Accounts to any other Exempt Subsidiary
for inclusion in a Securitization program and, upon completion of such sale, the
lien on and security interest in such sold Accounts shall be released
automatically and of no further force or effect until such time, if ever, that
such Accounts are reacquired by Debtor.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
To induce Secured Party and the Lenders to enter into this Agreement and
the Credit Agreement, Debtor represents and warrants as follows:
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Section 3.1. LOCATION OF EQUIPMENT, FIXTURES, AND INVENTORY; THIRD PARTIES
IN POSSESSION. All of the Equipment, Fixtures and Inventory are located at the
places specified in SCHEDULE 3.1. SCHEDULE 3.1 correctly identifies the
landlords or mortgagees, if any, of each location identified in SCHEDULE 3.1.
Except for the Persons identified on SCHEDULE 3.2, no Person other than Debtor
and Secured Party has possession of any of the Collateral. None of the
Collateral other than the Pledged Collateral has been located in any location
within the past four months other than as set forth on SCHEDULE 3.1.
Section 3.2. DEPOSIT, COMMODITY, AND SECURITIES ACCOUNTS. SCHEDULE 3.2
correctly identifies all deposit, commodity, and securities accounts owned by
Debtor and the institutions holding such accounts. No Person other than Debtor
has control over any Investment Property.
Section 3.3. OFFICE LOCATIONS; FICTITIOUS NAMES; TAX I.D. NUMBER. The
principal place of business and the chief executive office of Debtor is
identified on SCHEDULE 3.1. SCHEDULE 3.1 also sets forth all other places where
Debtor keeps its books and records and all other locations where Debtor has a
place of business. Debtor does not do business and has not done business during
the past five (5) years under any trade-name or fictitious business name except
as disclosed on SCHEDULE 3.3. Debtor's United States Federal Income Tax
Identification Number is set forth on SCHEDULE 3.3.
Section 3.4. DELIVERY OF COLLATERAL. Except as provided by SECTION 4.3,
Debtor has delivered to Secured Party all Collateral the possession of which is
necessary to perfect the security interest of Secured Party therein. All
certificates of title evidencing Equipment have been delivered to Secured Party
to the extent required to perfect the security interest of Secured Party
therein.
Section 3.5. INTELLECTUAL PROPERTY. All of Debtor's Intellectual Property
that is registered with or for which an application for registration has been
filed with any Governmental Authority is identified on SCHEDULE 3.5, and such
information is true, correct, and complete.
ARTICLE IV.
COVENANTS
Debtor covenants and agrees that, as long as the Obligations or any part
thereof are outstanding or any Lender has any Commitment under the Credit
Agreement, Debtor will perform and observe each of the following covenants:
Section 4.1. ACCOUNTS. Subject to SECTION 2.3 hereof and SECTION 11.8 of
the Credit Agreement, Debtor shall, in accordance with its customary business
practices, endeavor to collect or cause to be collected from each account debtor
under its Accounts, as and when due, any and all amounts owing under such
Accounts. Without the prior written consent of Secured Party, Debtor shall not,
except in the ordinary course of business and in no event when any Default
exists, (a) grant any extension of time for any payment with respect to any of
the Accounts beyond sixty (60) days after such payment's due date, (b)
compromise, compound, or settle any of the Accounts for less than the full
amount thereof, (c) release, in whole or in part, any Person liable for payment
of any of the
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Accounts, (d) allow any credit or discount for payment with respect to any
Account other than trade or other customary discounts granted in the ordinary
course of business, or (e) release any Lien or guaranty securing any Account
unless the Account has been paid.
Section 4.2. FURTHER ASSURANCES; EXCEPTIONS TO PERFECTION. At any time and
from time to time, upon the request of Secured Party, and at the sole expense of
Debtor, Debtor shall promptly execute and deliver all such further agreements,
documents, and instruments and take such further action as Secured Party may
reasonably deem necessary or appropriate to preserve and perfect its security
interest in the Collateral and carry out the provisions and purposes of this
Agreement or to enable Secured Party to exercise and enforce its rights and
remedies hereunder with respect to any of the Collateral. Without limiting the
generality of the foregoing, Debtor shall upon reasonable request by Secured
Party (a) execute and deliver to Secured Party such financing statements as
Secured Party may from time to time require, (b) take such action after a
Default as Secured Party may request to permit Secured Party to have control
over any Investment Property or any Deposit Account, (c) deliver to Secured
Party all Collateral the possession of which is necessary to perfect the
security interest therein, duly endorsed and/or accompanied by duly executed
instruments of transfer or assignment, all in form and substance satisfactory to
Secured Party; EXCEPT that, prior to the occurrence of a Default, Debtor may:
(i) retain for collection in the ordinary course of business checks representing
Proceeds of Accounts received in the ordinary course of business; (ii) retain
any letters of credit received in the ordinary course of business; (iii) retain
and utilize in the ordinary course of business all dividends and interest paid
in respect to any of the Pledged Collateral or any other Investment Property;
and (iv) retain any Documents received and further negotiated in the ordinary
course of business, (d) deliver any and all certificates of title, applications
for title or similar evidence of ownership of Equipment and cause Secured Party
to be named as lienholder thereon, and (e) execute and deliver to Secured Party
such other agreements, documents, and instruments as Secured Party may
reasonably require to perfect and maintain the validity, effectiveness, and
priority of the Liens intended to be created by this Agreement or any other Loan
Document.
Section 4.3. THIRD PARTIES IN POSSESSION OF COLLATERAL. Except in
connection with sales of Accounts permitted by SECTION 11.8 of the Credit
Agreement, Debtor shall not permit any third Person, except for the engagement
of third party contractors in connection with the administration and disposition
of receivables, (including any warehouseman, bailee, agent, consignee, or
processor) to hold any Collateral, unless Debtor shall: (a) notify such third
Person of the security interests created hereby; (b) instruct such Person to
hold all such Collateral for Secured Party's account subject to Secured Party's
instructions; and (c) take all other actions Secured Party reasonably deems
necessary to perfect and protect its and Debtor's interests in such Collateral
pursuant to the requirements of the UCC of the applicable jurisdiction where
such warehouseman, bailee, consignee, agent, processor, or other third Person is
located (including the filing of financing statements in the proper
jurisdictions naming the applicable third Person as debtor and Debtor as secured
party and notifying the third Person's secured lenders of Debtor's interest in
such Collateral before the third Person receives possession of the Collateral in
question).
Section 4.4. CORPORATE CHANGES. Debtor shall not change its name,
identity, corporate structure, or its United States Tax Identification Number in
any manner that might make any financing statement filed in connection with this
Agreement seriously misleading unless Debtor shall
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have given Secured Party not less than thirty (30) days prior written notice
thereof and shall have taken all action reasonably deemed necessary or desirable
by Secured Party to protect its Liens with the perfection and priority thereof
required by the Loan Documents. Debtor shall not change its principal place of
business, chief executive office, or the place where it keeps its books and
records unless it shall have given Secured Party not less than thirty (30) days
prior written notice thereof and shall have taken all action deemed necessary or
desirable by Secured Party to cause its security interest in the Collateral to
be perfected with the priority required by the Loan Documents.
Section 4.5. EQUIPMENT, FIXTURES, AND INVENTORY. Debtor shall keep the
Equipment, Fixtures, and Inventory at (or in transit to) any of the locations
specified on SCHEDULE 3.1 hereto or, upon not less than thirty (30) days prior
written notice to Secured Party, at such other places within the United States
of America where all actions required to perfect Secured Party's security
interest in such Collateral with the priority required by the Loan Documents
shall have been taken.
Section 4.6. WAREHOUSE RECEIPTS NON-NEGOTIABLE. Debtor agrees that if any
warehouse receipt or receipt in the nature of a warehouse receipt is issued in
respect of any portion of the Collateral, such warehouse receipt or receipt in
the nature thereof shall not be "negotiable" (as such term is used in Section
7.104 of the UCC) unless such warehouse receipt or receipt in the nature thereof
is delivered to Secured Party.
Section 4.7. VOTING RIGHTS; DISTRIBUTIONS, ETC. So long as no Event of
Default shall have occurred and be continuing, Debtor shall be entitled to
exercise any and all voting and other consensual rights (including, without
limitation, the right to give consents, waivers, and notifications) pertaining
to any of the Pledged Collateral or any other Investment Property; PROVIDED,
HOWEVER, that without the prior written consent of Secured Party no vote shall
be cast or consent, waiver, or ratification given or action taken which would be
inconsistent with or violate any provision of this Agreement or any other Loan
Document.
Section 4.8. TRANSFERS AND OTHER LIENS; ADDITIONAL INVESTMENTS. Except as
provided otherwise by the Credit Agreement or this Agreement, Debtor agrees that
it will (a) cause each issuer of any of the Pledged Collateral not to issue any
Capital Stock, notes, or other securities or instruments in addition to or in
substitution for any of the Pledged Collateral, (b) pledge hereunder,
immediately upon its acquisition thereof, any and all such Capital Stock, notes,
or other securities or instruments, and (c) promptly (and in any event within
three (3) Business Days) deliver to Secured Party an Amendment, duly executed by
Debtor, in respect of such Capital Stock, notes, or other securities or
instruments, together with all certificates, notes, or other securities or
instruments representing or evidencing the same. Debtor hereby (i) authorizes
Secured Party to attach each Amendment to this Agreement, and (ii) agrees that
all such Capital Stock, notes, or other securities or instruments listed on any
Amendment delivered to Secured Party shall for all purposes hereunder constitute
Pledged Collateral.
Section 4.9. INTELLECTUAL PROPERTY COVENANTS. If, before the Obligations
are paid in full, Debtor obtains any new Intellectual Property or rights thereto
or becomes entitled to the benefit of any Intellectual Property, Debtor shall
give to Secured Party prompt written notice thereof, and shall execute and
deliver, in form and substance satisfactory to Secured Party, a Copyright
Security
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Agreement, Patent Security Agreement, or Trademark Security Agreement, as
applicable, describing any such new Intellectual Property. Debtor shall (a)
prosecute diligently any copyright, patent, or trademark application at any time
pending which is necessary for the conduct of Debtor's business, (b) make
application on all new copyrights, patents, and trademarks as reasonably deemed
appropriate by Debtor, (c) preserve and maintain all rights in the Intellectual
Property that is necessary for the conduct of Debtor's business, and (d) upon
and after the occurrence and during the continuance of an Event of Default, use
its reasonable efforts to obtain any consents, waivers, or agreements necessary
to enable Secured Party to exercise its remedies with respect to the
Intellectual Property. Debtor shall not, without the prior written consent of
Secured Party, abandon any pending copyright, patent, or trademark application,
or Copyright, Patent, Trademark, or any other Intellectual Property which is
necessary for the conduct of Debtor's business.
Section 4.10. DEPOSIT, COMMODITY, AND SECURITY ACCOUNTS. Debtor shall not
open any new deposit, commodity, or securities account or otherwise utilize any
such account other than the accounts identified on SCHEDULE 3.2 unless Debtor
shall have given Secured Party not less than thirty (30) days prior written
notice thereof and shall have taken all action deemed necessary or desirable by
Secured Party to cause its security interest therein to be perfected with the
priority required by the Loan Documents. Prior to the occurrence and continuance
of any Event of Default, Debtor may make purchases and sales of Investment
Property or Financial Assets in accordance with the restrictions on investment
set out in the Credit Agreement. After the occurrence and during the continuance
of an Event of Default, Debtor shall not be authorized to make purchases and
sales of the Investment Property or Financial Assets and Debtor shall take such
steps as Secured Party may reasonably request to give Secured Party control over
all Investment Property and Financial Assets. Debtor will not give any party
control over any Investment Property or Financial Assets.
ARTICLE V.
RIGHTS OF SECURED PARTY
Section 5.1. POWER OF ATTORNEY. DEBTOR HEREBY IRREVOCABLY CONSTITUTES AND
APPOINTS SECURED PARTY AND ANY OFFICER OR AGENT THEREOF, WITH FULL POWER OF
SUBSTITUTION, AS ITS TRUE AND LAWFUL ATTORNEY-IN-FACT WITH FULL IRREVOCABLE
POWER AND AUTHORITY IN THE NAME OF DEBTOR OR IN ITS OWN NAME, TO TAKE, WHEN A
DEFAULT EXISTS, ANY AND ALL ACTIONS AND TO EXECUTE ANY AND ALL DOCUMENTS AND
INSTRUMENTS WHICH SECURED PARTY AT ANY TIME AND FROM TIME TO TIME DEEMS
NECESSARY TO ACCOMPLISH THE PURPOSES OF THIS AGREEMENT AND, WITHOUT LIMITING THE
GENERALITY OF THE FOREGOING, DEBTOR HEREBY GIVES SECURED PARTY THE POWER AND
RIGHT ON BEHALF OF DEBTOR AND IN ITS OWN NAME TO DO ANY OF THE FOLLOWING WHEN A
DEFAULT EXISTS, WITHOUT NOTICE TO, OR THE CONSENT OF, DEBTOR:
(a) to demand, sue for, collect, or receive, in the name of Debtor or in
Secured Party's own name, any money or property at any time payable
or receivable on account of or in exchange for any of the Collateral
and, in connection therewith, endorse checks,
PLEDGE AND SECURITY AGREEMENT (Borrower) - Page 11
notes, drafts, acceptances, money orders, documents of title, or any
other instruments for the payment of money under the Collateral or
any policy of insurance;
(b) to pay or discharge taxes, Liens, or other encumbrances levied or
placed on or threatened against the Collateral;
(c) to notify post office authorities to change the address for delivery
of Debtor's mail to an address designated by Secured Party and to
receive, open, and dispose of mail addressed to Debtor;
(d) (i) to direct account debtors and any other parties liable for
any payment under any of the Collateral to make payment of any
and all monies due and to become due thereunder directly to
Secured Party or as Secured Party shall direct (Debtor agrees
that if any Proceeds of any Collateral (including payments made
in respect of Accounts) shall be received by Debtor while a
Default exists, Debtor shall promptly deliver such Proceeds to
Secured Party with any necessary endorsements, and until such
Proceeds are delivered to Secured Party, such Proceeds shall be
held in trust by Debtor for the benefit of Secured Party and
shall not be commingled with any other funds or property of
Debtor); (ii) to receive payment of and receipt for any and all
monies, claims and other amounts due and to become due at any
time in respect of or arising out of any Collateral; (iii) to
sign and endorse any invoices, freight or express bills, bills of
lading, storage or warehouse receipts, drafts against debtors,
assignments, proxies, stock powers, verifications, and notices in
connection with accounts and other documents relating to the
Collateral; (iv) to commence and prosecute any suit, action, or
proceeding at law or in equity in any court of competent
jurisdiction to collect the Collateral or any part thereof and to
enforce any other right in respect of any Collateral; (v) to
defend any suit, action, or proceeding brought against Debtor
with respect to any Collateral; (vi) to settle, compromise, or
adjust any suit, action, or proceeding described above and, in
connection therewith, to give such discharges or releases as
Secured Party may deem appropriate; (vii) to exchange any of the
Collateral for other property upon any merger, consolidation,
reorganization, recapitalization, or other readjustment of the
issuer thereof and, in connection therewith, deposit any of the
Collateral with any committee, depositary, transfer Agent,
registrar, or other designated agency upon such terms as Secured
Party may determine; (viii) to add or release any guarantor,
indorser, surety, or other party to any of the Collateral; (ix)
to renew, extend, or otherwise change the terms and conditions of
any of the Collateral; (x) to grant or issue any exclusive or
nonexclusive license under or with respect to any of the
Intellectual Property (subject to the rights of third parties
under pre-existing licenses); (xi) to endorse Debtor's name on
all applications, documents, papers, and instruments necessary or
desirable in order for Secured Party to use any of the
Intellectual Property; (xii) to make, settle, compromise, or
adjust any claims under or pertaining to any of the Collateral
(including claims under any policy of insurance); and (xiii) to
sell, transfer, pledge, convey, make any agreement with respect
to, or otherwise deal with any of the Collateral as fully and
completely as though Secured Party were the absolute owner
PLEDGE AND SECURITY AGREEMENT (Borrower) - Page 12
thereof for all purposes, and to do, at Secured Party's option
and Debtor's expense, at any time, or from time to time, all acts
and things which Secured Party deems necessary to protect,
preserve, maintain, or realize upon the Collateral and Secured
Party's security interest therein.
THIS POWER OF ATTORNEY IS A POWER COUPLED WITH AN INTEREST AND SHALL BE
IRREVOCABLE UNTIL TERMINATION OF THIS AGREEMENT IN ACCORDANCE WITH SECTION 7.11
HEREOF. Secured Party shall be under no duty to exercise or withhold the
exercise of any of the rights, powers, privileges, and options expressly or
implicitly granted to Secured Party in this Agreement, and shall not be liable
for any failure to do so or any delay in doing so. Neither Secured Party nor any
Person designated by Secured Party shall be liable for any act or omission or
for any error of judgment or any mistake of fact or law, except any of the same
resulting from its or their gross negligence or willful misconduct. This power
of attorney is conferred on Secured Party solely to protect, preserve, maintain,
and realize upon its security interest in the Collateral. Secured Party shall
not be responsible for any decline in the value of the Collateral and shall not
be required to take any steps to preserve rights against prior parties or to
protect, preserve, or maintain any Lien given to secure the Collateral.
Section 5.2. ASSIGNMENT BY SECURED PARTY. Secured Party and each Lender
may at any time assign or otherwise transfer all or any portion of their rights
and obligations under this Agreement and the other Loan Documents (including,
without limitation, the Obligations) to any other Person, to the extent
permitted by, and upon the conditions contained in, the Credit Agreement, and
such Person shall thereupon become vested with all the benefits thereof granted
to Secured Party or the Lenders, as applicable, herein or otherwise.
Section 5.3. POSSESSION; REASONABLE CARE. Secured Party may, from time to
time, in its sole discretion, appoint one or more agents to hold physical
custody, for the account of Secured Party, of any or all of the Collateral that
Secured Party has a right to possess. Secured Party shall be deemed to have
exercised reasonable care in the custody and preservation of the Collateral in
its possession if the Collateral is accorded treatment substantially equal to
that which Secured Party accords its own property, it being understood that
Secured Party shall not have any responsibility for (a) ascertaining or taking
action with respect to calls, conversions, exchanges, maturities, tenders, or
other matters relative to any Collateral, whether or not Secured Party has or is
deemed to have knowledge of such matters, or (b) taking any necessary steps to
preserve rights against any parties with respect to any Collateral.
ARTICLE VI.
DEFAULT
Section 6.1. RIGHTS AND REMEDIES. If an Event of Default shall have
occurred and be continuing, Secured Party shall have the following rights and
remedies:
(a) In addition to all other rights and remedies granted to Secured
Party in this Agreement or in any other Loan Document or by
applicable law, Secured Party shall
PLEDGE AND SECURITY AGREEMENT (Borrower) - Page 13
have all of the rights and remedies of a secured party under the UCC
(whether or not the UCC applies to the affected Collateral). Without
limiting the generality of the foregoing, Secured Party may (i)
without demand or notice to Debtor or any other person, collect,
receive, or take possession of the Collateral or any part thereof
and for that purpose Secured Party may enter upon any premises on
which the Collateral is located and remove the Collateral therefrom
or render it inoperable, and/or (ii) sell, lease, or otherwise
dispose of the Collateral, or any part thereof, in one or more
parcels at public or private sale or sales, at Secured Party's
offices or elsewhere, for cash, on credit, or for future delivery,
and upon such other terms as Secured Party may deem commercially
reasonable or otherwise as may be permitted by law. Secured Party
shall have the right at any public sale or sales, and, to the extent
permitted by applicable law, at any private sale or sales, to bid
(which bid may be, in whole or in part, in the form of cancellation
of indebtedness) and become a purchaser of the Collateral or any
part thereof free of any right or equity of redemption on the part
of Debtor, which right or equity of redemption is hereby expressly
waived and released by Debtor. Upon the request of Secured Party,
Debtor shall assemble the Collateral and make it available to
Secured Party at any place designated by Secured Party that is
reasonably convenient to Debtor and Secured Party. Debtor agrees
that Secured Party shall not be obligated to give more than five (5)
days prior written notice of the time and place of any public sale
or of the time after which any private sale may take place and that
such notice shall constitute reasonable notice of such matters.
Secured Party shall not be obligated to make any sale of Collateral
if it shall determine not to do so, regardless of the fact that
notice of sale of Collateral may have been given. Secured Party may,
without notice or publication, adjourn any public or private sale or
cause the same to be adjourned from time to time by announcement at
the time and place fixed for sale, and such sale may, without
further notice, be made at the time and place to which the same was
so adjourned. Debtor shall be liable for all reasonable expenses of
retaking, holding, preparing for sale, or the like, and all
reasonable attorneys' fees, legal expenses, and other costs and
expenses incurred by Secured Party in connection with the collection
of the Obligations and the enforcement of Secured Party's rights
under this Agreement. Debtor shall remain liable for any deficiency
if the Proceeds of any sale or other disposition of the Collateral
applied to the Obligations are insufficient to pay the Obligations
in full. Secured Party may apply the Collateral against the
Obligations as provided in the Credit Agreement. Debtor waives all
rights of marshaling, valuation, and appraisal in respect of the
Collateral. Any cash held by Secured Party as Collateral and all
cash proceeds received by Secured Party in respect of any sale of,
collection from, or other realization upon all or any part of the
Collateral may, in the discretion of Secured Party, be held by
Secured Party as collateral for, and then or at any time thereafter
applied in whole or in part by Secured Party against, the
Obligations in the order permitted by the Credit Agreement. Any
surplus of such cash or cash proceeds and interest accrued thereon,
if any, held by Secured Party and remaining after payment in full of
all the Obligations shall be promptly paid over to Debtor or to
whomsoever may be lawfully entitled to receive such surplus;
PROVIDED
PLEDGE AND SECURITY AGREEMENT (Borrower) - Page 14
that Secured Party shall have no obligation to invest or otherwise
pay interest on any amounts held by it in connection with or
pursuant to this Agreement.
(b) Secured Party may cause any or all of the Collateral held by it to
be transferred into the name of Secured Party or the name or names
of Secured Party's nominee or nominees.
(c) Secured Party may exercise any and all rights and remedies of
Debtor under or in respect of the Collateral, including, without
limitation, any and all rights of Debtor to demand or otherwise
require payment of any amount under, or performance of any
provision of, any of the Collateral and any and all voting rights
and corporate powers in respect of the Collateral. Debtor shall
execute and deliver (or cause to be executed and delivered) to
Secured Party all such proxies and other instruments as Secured
Party may reasonably request for the purpose of enabling Secured
Party to exercise the voting and other rights which it is
entitled to exercise pursuant to this CLAUSE (C) and to receive
the dividends, interest, and other distributions which it is
entitled to receive hereunder.
(d) Secured Party may collect or receive all money or property at any
time payable or receivable on account of or in exchange for any of
the Collateral, but shall be under no obligation to do so.
(e) On any sale of the Collateral, Secured Party is hereby authorized to
comply with any limitation or restriction with which compliance is
necessary, in the opinion of Secured Party's counsel, in order to
avoid any violation of applicable law or in order to obtain any
required approval of the purchaser or purchasers by any applicable
Governmental Authority.
(f) For purposes of enabling Secured Party to exercise its rights and
remedies under this SECTION 6.1 and enabling Secured Party and
its successors and assigns to enjoy the full benefits of the
Collateral in each case as Secured Party shall be entitled to
exercise its rights and remedies under this SECTION 6.1, Debtor
hereby grants to Secured Party an irrevocable, nonexclusive
license (exercisable without payment of royalty or other
compensation to Debtor) to use, assign, license, or sublicense
any of the Intellectual Property, including in such license
reasonable access to all media in which any of the licensed items
may be recorded or stored and all computer programs used for the
completion or printout thereof and further including in such
license such rights of quality control and inspection as are
reasonably necessary to prevent the Trademarks included in such
license from claims of invalidation. This license shall also
inure to the benefit of all successors, assigns, and transferees
of Secured Party.
Section 6.2. PRIVATE SALES. Debtor recognizes that Secured Party may be
unable to effect a public sale of any or all of the Collateral by reason of
certain prohibitions contained in the laws of any jurisdiction outside the
United States or in the Securities Act of 1933, as amended from time to time
(the "SECURITIES ACT") and applicable state securities laws, but may be
compelled to resort to one
PLEDGE AND SECURITY AGREEMENT (Borrower) - Page 15
or more private sales thereof to a restricted group of purchasers who will be
obliged to agree, among other things, to acquire such Collateral for their own
account for investment and not with a view to the distribution or resale
thereof. Debtor acknowledges and agrees that any such private sale may result in
prices and other terms less favorable to the seller than if such sale were a
public sale and, notwithstanding such circumstances, agrees that any such
private sale shall, to the extent permitted by law, be deemed to have been made
in a commercially reasonable manner. Neither Secured Party nor the Lenders shall
be under any obligation to delay a sale of any of the Collateral for the period
of time necessary to permit the issuer of such securities to register such
securities under the laws of any jurisdiction outside the United States, under
the Securities Act, or under any applicable state securities laws, even if such
issuer would agree to do so. Debtor further agrees to do or cause to be done, to
the extent that Debtor may do so under applicable law, all such other reasonable
acts and things as may be necessary to make such sales or resales of any portion
or all of the Collateral valid and binding and in compliance with any and all
applicable laws, regulations, orders, writs, injunctions, decrees, or awards of
any and all courts, arbitrators, or governmental instrumentalities, domestic or
foreign, having jurisdiction over any such sale or sales, all at Debtor's
expense.
ARTICLE VII.
MISCELLANEOUS
Section 7.1. NO WAIVER; CUMULATIVE REMEDIES. No failure on the part of
Secured Party to exercise and no delay in exercising, and no course of dealing
with respect to, any right, power, or privilege under this Agreement shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, power, or privilege under this Agreement preclude any other or further
exercise thereof or the exercise of any other right, power, or privilege. The
rights and remedies provided for in this Agreement are cumulative and not
exclusive of any rights and remedies provided by law.
Section 7.2. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
and inure to the benefit of Debtor and Secured Party and their respective
successors and assigns, except that Debtor may not assign any of its rights or
obligations under this Agreement without the prior written consent of Secured
Party, and Secured Party may not appoint a successor as Secured Party except in
accordance with the Credit Agreement.
Section 7.3. AMENDMENT; ENTIRE AGREEMENT. THIS AGREEMENT AND THE OTHER
LOAN DOCUMENTS EMBODY THE FINAL, ENTIRE AGREEMENT AMONG THE PARTIES HERETO AND
SUPERSEDES ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS, AND
UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THE SUBJECT MATTER HEREOF
AND MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR
SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES HERETO. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES HERETO. THE PROVISIONS OF THIS
AGREEMENT MAY BE AMENDED OR WAIVED ONLY BY AN INSTRUMENT IN WRITING SIGNED BY
THE PARTIES HERETO.
PLEDGE AND SECURITY AGREEMENT (Borrower) - Page 16
Section 7.4. NOTICES. All notices and other communications provided for in
this Agreement shall be given or made in accordance with the Credit Agreement.
Section 7.5. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS AND APPLICABLE LAWS
OF THE UNITED STATES OF AMERICA.
Section 7.6. HEADINGS. The headings, captions, and arrangements used in
this Agreement are for convenience only and shall not affect the interpretation
of this Agreement.
Section 7.7. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties made in this Agreement or in any certificate
delivered pursuant hereto shall survive the execution and delivery of this
Agreement, and no investigation by Secured Party shall affect the
representations and warranties or the right of Secured Party to rely upon them.
Section 7.8. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same agreement.
Section 7.9. WAIVER OF BOND. In the event Secured Party seeks to take
possession of any or all of the Collateral by judicial process, Debtor hereby
irrevocably waives any bonds and any surety or security relating thereto that
may be required by applicable law as an incident to such possession, and waives
any demand for possession prior to the commencement of any such suit or action.
Section 7.10. SEVERABILITY. Any provision of this Agreement which is
determined by a court of competent jurisdiction to be prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions of this Agreement, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
Section 7.11. TERMINATION. If all of the Obligations shall have been paid
and performed in full and all Commitments of Secured Party and the Lenders shall
have expired or terminated, Secured Party shall, upon the written request of
Debtor, execute and deliver to Debtor a proper instrument or instruments
acknowledging the release and termination of the security interests created by
this Agreement, and shall duly assign and deliver to Debtor (without recourse
and without any representation or warranty) such of the Collateral as may be in
the possession of Secured Party and has not previously been sold or otherwise
applied pursuant to this Agreement; notwithstanding anything to the contrary
contained in this Agreement, if the payment of any amount of the Obligations is
rescinded, voided or must otherwise be refunded by Secured Party or any Lender
upon the insolvency, bankruptcy or reorganization of the Borrower or any other
Loan Party or otherwise for any reason whatsoever, then the security interests
created by this Agreement will be automatically reinstated and become
automatically effective and in full force and effect, all to the extent that and
as though such payment so rescinded, voided or otherwise refunded had never been
made and such release and termination of such security interest had never been
given.
PLEDGE AND SECURITY AGREEMENT (Borrower) - Page 17
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PLEDGE AND SECURITY AGREEMENT (Borrower) - Page 18
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the day and year first written above.
DEBTOR:
FIRST INVESTORS FINANCIAL SERVICES,
INC.
By: ________________________________
Name: ______________________________
Title: _____________________________
SECURED PARTY:
BANK OF AMERICA, N.A.,
as Administrative Agent for the
Lenders
By: ________________________________
Name: ______________________________
Title: _____________________________
PLEDGE AND SECURITY AGREEMENT (Borrower) - Page 19
SCHEDULE 1.1
TO
PLEDGE AND SECURITY AGREEMENT
PLEDGED SHARES
DESCRIPTION OF
EACH CLASS PERCENTAGE
CERTIFICATE AND SERIES NUMBER OF OF SHARES
ISSUER NUMBER (IF APPLICABLE) PAR VALUE PLEDGED SHARES ISSUED
Farragut Financial
Corporation 1 Common Stock $1.00 1,000 100%
First Investors Servicing
Corporation 4 Common Stock $0.01 100 100%
SCHEDULE 3.1
TO
PLEDGE AND SECURITY AGREEMENT
LOCATIONS
I. PRINCIPAL PLACE OF
BUSINESS ADDRESS LANDLORD/MORTGAGEE
Farragut Financial 675 Bering Drive, AIG Realty Services, Inc.
Corporation Suite 710
Houston, TX 77057
II. OTHER LOCATIONS None
SCHEDULE 3.2
TO
PLEDGE AND SECURITY AGREEMENT
DEPOSIT, COMMODITY, AND SECURITIES ACCOUNTS
ACCOUNT
NAME NUMBER TYPE DEPOSITORY
First Investors Financial
Services - Operating Account 375-047-7757 Deposit Bank of America, N.A.
First Investors Financial
Services - Dealer Account 375-047-1960 Deposit Bank of America, N.A.
FIFS Exception Account 2000006185639 Deposit First Union National Bank
SCHEDULE 3.3
TO
PLEDGE AND SECURITY AGREEMENT
TRADE AND OTHER NAMES; TAX IDENTIFICATION NUMBER
Trade and Other Names: None
United States Income Tax Identification Number: 76-0273052
SCHEDULE 3.5
TO
PLEDGE AND SECURITY AGREEMENT
INTELLECTUAL PROPERTY
None.
EXHIBIT A
TO
PLEDGE AND SECURITY AGREEMENT
FORM OF AMENDMENT
This Amendment, dated _______________, _____, is delivered pursuant to
SECTION 4.8 of the Pledge and Security Agreement referred to below. The
undersigned hereby agrees that this Amendment may be attached to that certain
Pledge and Security Agreement, dated as of December 22, 2000, between the
undersigned and Bank of America, N.A., as Administrative Agent for the Lenders
referred to therein (the "PLEDGE AND SECURITY AGREEMENT"), and that the Capital
Stock, notes, or other securities or instruments listed on SCHEDULE 1 annexed
hereto shall be and become part of the Collateral referred to in the Pledge and
Security Agreement and shall secure payment and performance of all Obligations
as provided in the Pledge and Security Agreement.
Capitalized terms used herein but not defined herein shall have the
meanings therefor provided in the Pledge and Security Agreement.
DEBTOR:
FIRST INVESTORS FINANCIAL SERVICES, INC.
By:_____________________________________
Name:___________________________________
Title:__________________________________
SECURED PARTY:
BANK OF AMERICA, N.A.,
as Administrative Agent for the Lenders
By:_____________________________________
Name:___________________________________
Title:__________________________________
SCHEDULE 1
TO
AMENDMENT TO PLEDGE AND SECURITY AGREEMENT
DESCRIPTION OF EACH PERCENTAGE
CERTIFICATE CLASS AND SERIES NUMBER OF OF SHARES
ISSUER NUMBER (IF APPLICABLE) PAR VALUE PLEDGED SHARES ISSUED