FIRST INVESTORS FINANCIAL SERVICES GROUP INC
EXHIBIT 10.108(C)
<DOCUMENT>
<TYPE>EX-10.108(C)
<SEQUENCE>13
<FILENAME>a2073005zex-10_108c.txt
<DESCRIPTION>EXHIBIT 10.108(C)
<TEXT>
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                                                               Exhibit 10.108(c)

                    AMENDMENT NUMBER 4 TO SECURITY AGREEMENT

     THIS AMENDMENT NUMBER 4 TO SECURITY AGREEMENT, dated as of January 14, 2002
(this "AMENDMENT"), is entered into by and among FIRST INVESTORS AUTO
RECEIVABLES CORPORATION, a Delaware corporation (the "DEBTOR"), FIRST INVESTORS
FINANCIAL SERVICES, INC., a Texas corporation ("FIFS" or "SELLER"), FIRST
INVESTORS SERVICING CORPORATION, a Delaware corporation ("FISC" or the
"SERVICER"), VARIABLE FUNDING CAPITAL CORPORATION, a Delaware corporation,
("VFCC"), FIRST UNION SECURITIES, INC., a Delaware corporation ("FIRST UNION
SECURITIES"), MBIA INSURANCE CORPORATION, a New York stock insurance company,
("SURETY BOND PROVIDER") and WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION
("WELLS FARGO"). Capitalized terms used and not otherwise defined herein are
used as defined in the Transaction Documents (as defined below).

     WHEREAS, the parties hereto entered into that certain Security Agreement,
dated as of October 22, 1996, as amended by Amendment Number 1 to Security
Agreement, dated as of August 25, 1997, Amendment Number 2 to Security
Agreement, dated as of March 31, 1999, Amendment Number 3 to Security Agreement,
dated as of November 29, 2000 and the First Omnibus Amendment to Transaction
Documents, dated as of the date hereof (as amended, supplemented or restated to
the date hereof, the "SECURITY AGREEMENT");

     WHEREAS, the parties hereto desire to amend the Security Agreement in
certain respects as provided herein;

     NOW THEREFORE, in consideration of the premises and the other mutual
covenants contained herein, the parties hereto agree as follows:

     SECTION 1. AMENDMENTS. Effective as of the Effective Date, the Security
Agreement is hereby amended as follows:

     (a)  The definition of "Adjusted LIBOR Rate" in Section 1.1 of the Security
Agreement is hereby modified, amended and restated to read in its entirety as
follows:

          "ADJUSTED LIBOR RATE" means, with respect to any Collection Period, an
          interest rate per annum equal to a fraction, expressed as a percentage
          and rounded upwards (if necessary), to the nearest 1/100 of 1%, (i)
          the numerator of which is equal to the LIBOR Rate for such Collection
          Period and (ii) the denominator of which is equal to 100% MINUS the
          Eurodollar Reserve Percentage for such Collection Period; PROVIDED,
          however, the Adjusted LIBOR Rate shall be the Base Rate if a
          Eurodollar Disruption Event occurs."

     (b)  The definition of "Carrying Costs" in Section 1.1 of the Security
Agreement is hereby modified, amended and restated to read in its entirety as
follows:

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          "CARRYING COSTS" shall mean for any Collection Period the sum of: (a)
          the Accrued Interest; (b) without duplication of the amounts described
          in clause (a) above, any amounts necessary to pay interest, calculated
          at the Base Rate, with respect to amounts disbursed by the Credit
          Support Provider in respect of Defaulted Receivables, if the Surety
          Bond Provider shall have failed to make any required payment under the
          Surety Bond in respect of such Defaulted Receivables, outstanding at
          any time during such Collection Period accrued from the first day
          through the last day of such Collection Period whether or not such
          interest is payable during such Collection Period; (c) any past due
          amounts not paid in clauses (a) and (b); (d) the costs to the Company
          with respect to the Yield Protection Provision, which amounts are paid
          pursuant to this clause (d) shall not exceed 1.00% per annum of the
          Net Investment; and (e) the Program Fee and Unused Program Fee (the
          sum of which shall not exceed .30% per annum of the Net Investment)
          accrued from the first day through the last day of such Collection
          Period whether or not such amount is payable during such Collection
          Period.

     (c)  The definition of "Company" is hereby modified, amended and restated
to read in its entirety as follows:

          "COMPANY" shall mean Variable Funding Capital Corporation and its
          successors and assigns.

     (d)  The definition of "Eligible Receivables" is hereby amended by deleting
subsection (q) and substituting in lieu thereof, the following:

          "(q) which has an original maturity of 66 months or less (provided,
          however, that no more than 10% of the Principal Balance of any
          Receivables pledged may have an original maturity of 61 to 66
          months);"

     (e)  The definition of "Fee Letter" is hereby modified, amended and
restated to read in its entirety as follows:

          "FEE LETTER" shall mean the letter agreement dated as of the Effective
          Date, between the Company, the Administrative Agent and the Debtor in
          respect of the payment by the Debtor of certain fees."

     (f)  The definition of "LIBOR Rate" is hereby modified, amended and
restated to read in its entirety as follows:

          "LIBOR RATE" shall mean for any day during any Collection Period, an
          interest rate per annum equal to:

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               (i) the posted rate for 30-day deposits in United States Dollars
          appearing on Telerate page 3750 as of 11:00 a.m. (London time) on the
          Business Day which is the second Business Day immediately preceding
          the first day of the applicable Collection Period; or

               (ii) if no such rate appears on Telerate page 3750 at such time
          and day, then LIBOR shall be determined by First Union National Bank
          at its principal office in Charlotte, North Carolina as its rate (each
          such determination, absent manifest error, to be conclusive and
          binding on all parties hereto and their assignees) at which 30-day
          deposits in United States Dollars are being, have been, or would be
          offered or quoted by First Union National Bank to major banks in the
          applicable interbank market for Eurodollar deposits at or about 11:00
          a.m. (Charlotte, North Carolina time) on such day.

     (g)  The definition of "Termination Date" in Section 1.1 of the Security
Agreement is hereby amended by deleting clause (i) therein and substituting in
lieu thereof, the following:

          "(i) January 13, 2003 unless such date shall be extended by the
          parties hereto pursuant to a written document,"

     (h)  The following definitions are added in appropriate alphabetical order
in Section 1.1 of the Security Agreement:

          (i)    "ACCRUED INTEREST" shall mean for any Collection Period, the
                 sum of the Interest for each day during the Collection Period.

          (ii)   "ALTERNATIVE RATE" shall mean an interest rate per annum equal
                 to the Adjusted LIBOR Rate; PROVIDED, however, that the
                 Alternative Rate shall be the Base Rate if a Eurodollar
                 Disruption Event occurs.

          (iii)  "BREAKAGE COSTS" shall mean such amount or amounts as shall
                 compensate the Company for any loss, cost or expense incurred
                 by the Company (as determined by the Company (and by the
                 Administrative Agent on behalf of the Company) in such Person's
                 sole discretion) as a result of a prepayment by the Debtor of
                 the Interest or the Net Investment.

          (iv)   "CP RATE" shall mean for any day during any Collection Period,
                 the per annum rate equivalent to the weighted average of the
                 per annum rates paid or payable by the Company from time to
                 time as interest on or otherwise (by means of interest rate
                 hedges or otherwise taking into consideration any incremental
                 carrying costs associated with short-term promissory notes
                 issued by the Company maturing on dates other than those
                 certain dates on which the Company is to receive the funds) in
                 respect of

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                 promissory notes issued by the Company in the commercial paper
                 market that are allocated, in whole or in part, by the
                 Administrative Agent (on behalf of the Company) to fund or
                 maintain the Company's investment in the Note during such
                 Collection Period, as determined by the Administrative Agent
                 (on behalf of the Company) and reported to the Debtor which
                 rate shall reflect and give effect to (i) commissions of
                 placement agents and dealers in respect of such promissory
                 notes, to the extent such commissions are allocated, in whole
                 or in part, to such promissory notes by the Administrative
                 Agent (on behalf of the Deal Agent) and (ii) other borrowings
                 by the Company, including, without limitation, borrowings to
                 fund small or odd dollar amounts that are not easily
                 accommodated in the commercial paper market; PROVIDED, however,
                 that if any component -------- of such rate is a discount rate,
                 in calculating the CP Rate, the Administrative Agent shall for
                 such component use the rate resulting from converting such
                 discount rate to an interest bearing equivalent rate per annum.

          (v)    "EUROCURRENCY LIABILITIES": shall have the meaning specified in
                 Regulation D.

          (vi)   "EURODOLLAR DISRUPTION EVENT" shall mean the occurrence of any
                 of the following: (A) any Liquidity Provider shall have
                 notified the Administrative Agent of a determination by such
                 Liquidity Provider or any of its assignees or participants that
                 it would be contrary to law or to the directive of any central
                 bank or other governmental authority (whether or not having the
                 force of law) to obtain United States dollars in the London
                 interbank market to fund the Note or any interest therein, (B)
                 any Liquidity Provider shall have notified the Administrative
                 Agent of the inability, for any reason, of such Liquidity
                 Provider or any of its assignees or participants to determine
                 the Adjusted LIBOR Rate, (C) any Liquidity Provider shall have
                 notified the Administrative Agent of a determination by such
                 Liquidity Provider or any of its assignees or participants that
                 the rate at which deposits of United States dollars are being
                 offered to such Liquidity Provider or any of its assignees or
                 participants in the London interbank market does not accurately
                 reflect the cost to such Liquidity Provider, such assignee or
                 such participant of making, funding or maintaining any
                 Purchased Interest or (D) any Liquidity Provider shall have
                 notified the Administrative Agent of the inability of such
                 Liquidity Provider or any of its assignees or participants to
                 obtain United States dollars in the London interbank market to
                 make, fund or maintain the Note.

          (vii)  "EURODOLLAR RESERVE PERCENTAGE" with respect to any Reference
                 Bank for any period, shall mean the percentage applicable
                 during such period (or, if more than one such percentage shall
                 be so applicable, the daily average of such percentages for
                 those days in such period during which any such percentage
                 shall be so applicable) under regulations issued from time to

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                 time by the Board of Governors of the Federal Reserve System
                 (or any successor) for determining the maximum reserve
                 requirement (including, without limitation, any emergency,
                 supplemental or other marginal reserve requirement) with
                 respect to liabilities or assets consisting of or including
                 Eurocurrency Liabilities having a term of one month.

          (viii) "INSURANCE AGREEMENT AMORTIZATION EVENT shall have the meaning
                 set forth in the Insurance Agreement.

          (ix)   "INTEREST" shall mean for any Collection Period with respect to
                 the Note, the sum of the products (for each day during such
                 Collection Period) of:

                 IR x NI x 1/360

                 where:

                 IR = the Interest Rate; and

                 NI = the Net Investment.

          (x)    "INTEREST RATE" shall mean with respect to the Notes, on any
                 day, (i) for the portion of the Net Investment that is funded
                 on such day through the issuance of Commercial Paper, the CP
                 Rate and (ii) for the portion of the Net Investment that is not
                 funded through the issuance of commercial paper, the
                 Alternative Rate.

          (xi)   "REFERENCE BANK" means any bank, which furnishes information
                 for purposes of determining the Adjusted LIBOR Rate.

     (i)  The following definitions in Section 1.1 of the Security Agreement are
hereby deleted:

          (i)    "Accrued Interest Component"

          (ii)   "Interest Component"

          (iii)  "Interest Rate"

          (iv)   "Principal Component"

          (v)    "Related Commercial Paper"

     (j)  Section 2.5 of the Security Agreement is hereby amended by deleting
clause (iv) and substituting in lieu thereof, the following:

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          "after giving effect to any such increase, the Net Investment would
          not exceed the Facility Limit;"

     (k)  Section 2.6 of the Security Agreement is hereby amended by deleting
the last two sentences of the first paragraph therein.

     (l)  Section 5.1(b) of the Security Agreement is hereby deleted.

     (m)  Section 5.1(c) of the Security Agreement is hereby amended by deleting
the word "Related" in clause (ii) in the second to last sentence therein.

     (n)  Section 5A.1(d)(iii) is hereby amended by deleting the word "Related"
in the first sentence therein.

     (o)  Section 6.1(d)(ii) is hereby modified, amended and restated to read in
its entirety as follows:

          "(ii) the Net Investment equals or exceeds the Facility Limit or"

     (p)  Section 6.3 of the Security Agreement is hereby amended by adding a
new subsection (j) as follow:

          "(j) the occurrence of an Insurance Agreement Amortization Event."

     (q)  Section 6.4 of the Security Agreement is hereby amended by deleting
the word "Related" in the second sentence therein.

     (r)  A new Section 8.13 is hereby added to the Security Agreement to read
as follows:

          "Section 8.13 NO RECOURSE AGAINST CERTAIN PERSONS.

          (a)  No recourse under or with respect to any obligation, covenant or
          agreement (including, without limitation, the payment of any fees or
          any other obligations) of any Secured Party as contained in this
          Agreement or any other agreement, instrument or document entered into
          by it pursuant hereto or in connection herewith shall be had against
          any administrator of such Secured Party or any incorporator,
          affiliate, stockholder, officer, employee or director of such Secured
          Party or of any such administrator, as such, by the enforcement of any
          assessment or by any legal or equitable proceeding, by virtue of any
          statute or otherwise; IT BEING EXPRESSLY AGREED AND UNDERSTOOD that
          the agreements of such Secured Party contained in this Agreement and
          all of the other agreements, instruments and documents entered into by
          it pursuant hereto or in connection herewith are, in each case, solely
          the corporate obligations of such Secured Party, and that no personal
          liability whatsoever shall attach to or be incurred by any
          administrator of such Secured Party or any incorporation,

                                        6
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          stockholder, affiliate, officer, employee or director of such Secured
          Party or of any such administrator, as such, or any other of them,
          under or by reason of any of obligations, covenants or agreements of
          such Secured Party contained in this Agreement or in any other such
          instruments, documents or agreements, or that are implied therefrom,
          and that any and all personal liability of every such administrator of
          such Secured Party and each incorporator, stockholder, affiliate,
          officer, employee or director of such Secured Party or of any such
          administrator, or any of them, for breaches by such Secured Party or
          any such obligations, covenants or agreements, which liability may
          arise either at common law or at equity, by statute or constitution or
          otherwise, is hereby expressly waived as a condition of an in
          consideration for the execution of this Agreement. The provisions of
          this Section 5.9 shall survive the termination of this Agreement.

          (b)  Notwithstanding anything in this Agreement to the contrary, the
          Company shall not have any obligation to pay any amount required to be
          paid by it hereunder in excess of any amount available to the Company
          after paying or making provision for the payment of its Commercial
          Paper. All payment obligations of the Company hereunder are contingent
          on the availability of funds in the excess of amounts necessary to pay
          its Commercial Paper and each of the other parties hereto agrees that
          it will not have a claim under Section 101(5) of the Bankruptcy Code
          if and to the extent that any such payment obligation owed to it by
          the Company exceeds the amount available to the Company to pay such
          amount after paying or making the provision for the payment of its
          Commercial Paper."

     SECTION 2. EFFECTIVE DATE. This Amendment shall become effective as of the
date (the "EFFECTIVE DATE") on which each of the following conditions precedent
shall have been satisfied:

     (a) AMENDMENT. The Company, the Surety Bond Provider and the
Administrative Agent shall have received multiple counterparts, as requested, of
this Amendment, executed and delivered by a duly authorized officer of each
party hereto.

     (b) LIQUIDITY AGREEMENT. The Liquidity Purchase Agreement shall have been
duly executed by the parties thereto.

     (c) FIRST OMNIBUS AMENDMENT TO TRANSACTION DOCUMENTS. Each of the
conditions set forth in Section 6 of the First Omnibus Amendment to Transaction
Documents shall have been satisfied.

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     (d) OTHER INFORMATION. The Debtor shall have taken such other action,
including delivery of approvals, consents, opinions, documents and instruments,
as the Company, the Administrative Agent or the Surety Bond Provider may
reasonably request.

     SECTION 3. MISCELLANEOUS.

     (a) REFERENCES IN SECURITY AGREEMENT. Upon the effectiveness of this
Amendment, each reference in the Security Agreement to "this Agreement",
"hereunder", "hereof", "herein", or words of like import shall mean and be a
reference to the Security Agreement as amended hereby, and each reference to the
Security Agreement in any other Transaction Document or any other document,
instrument or agreement, executed and/or delivered in connection with any
Transaction Document shall mean and be a reference to the Security Agreement as
amended hereby.

     (b) EFFECT ON SECURITY AGREEMENT. Except as specifically amended hereby,
the Security Agreement shall remain in full force and effect. This Amendment
shall not constitute a novation of the Security Agreement, but shall constitute
an amendment thereof.

     (c) NO WAIVER. The execution, delivery and effectiveness of this Amendment
shall not operate as a waiver of any right, power or remedy of any Person under
the Security Agreement or any other document, instrument or agreement executed
in connection therewith, nor constitute a waiver of any provision contained
therein.

     (d) SUCCESSORS AND ASSIGNS. This Amendment shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors and
assigns.

     (e) COUNTERPARTS. This Amendment may be executed in any number of
counterparts, and by the different parties hereto on the same or separate
counterparts, each of which shall be deemed to be an original instrument but all
of which together shall constitute one and the same agreement. Delivery of an
executed counterpart of a signature page by facsimile shall be effective as
delivery of a manually executed counterpart of this Amendment.

     (f) HEADINGS. The descriptive headings of the various sections of this
Amendment are inserted for convenience of reference only and shall not be deemed
to affect the meaning or construction of any of the provisions hereof.

     (g) AMENDMENTS. This Amendment may not be amended or otherwise modified
except as provided in the Security Agreement.

     (h) GOVERNING LAW. THIS AMENDMENT (INCLUDING, BUT NOT LIMITED TO, THE
VALIDITY AND ENFORCEABILITY HEREOF) SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH,THE LAWS OF THE STATE OF NEY YORK, OTHER THAN THE CONFLICT OF
LAW RULES THEREOF.

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     IN WITNESS WHEREOF, the parties have caused this Amendment to be executed
by their respective officers thereunto duty authorized, as of the date first
above written.

                                        FIRST INVESTORS AUTO RECEIVABLES
                                        CORPORATION.

                                        By:
                                            ------------------------------------
                                              Name:
                                              Title:

                                        FIRST INVESTORS FINANCIAL SERVICES, INC.

                                              By:
                                                  ------------------------------
                                                    Name:
                                                    Title:

                                        FIRST INVESTORS SERVICING CORPORATION

                                              By:
                                                  ------------------------------
                                                    Name:
                                                    Title:

                                        FIRST UNION SECURITIES, INC.

                                              By:
                                                  ------------------------------
                                                    Name:
                                                    Title:

                                        VARIABLE FUNDING CAPITAL CORPORATION

                                        By First Union Securities, Inc.
                                           as attorney-in-fact

                                              By:
                                                  ------------------------------
                                                    Name:
                                                    Title:

                                        WELLS FARGO BANK MINNESOTA,
                                        NATIONAL ASSOCIATION

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                                              By:
                                                  ------------------------------
                                                    Name:
                                                    Title:

                                        MBIA INSURANCE CORPORATION

                                              By:
                                                  ------------------------------
                                                    Name:
                                                    Title:

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