EXHIBIT 10.87

                          PLEDGE AND SECURITY AGREEMENT
                   (FIRST INVESTORS (VERMONT) HOLDINGS, INC.)

      THIS PLEDGE AND SECURITY AGREEMENT (this "AGREEMENT"), dated as of
December 22, 2000, is between FIRST INVESTORS (VERMONT) HOLDINGS, INC., a
Vermont 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. First Investors Financial Services, Inc. (the "BORROWER") 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 Borrower is directly or indirectly a Subsidiary of the Debtor.

      C. The execution and delivery of this Agreement is required by the Credit
Agreement as a condition to making extensions of credit thereunder.

      D. 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

PLEDGE AND SECURITY AGREEMENT (FIVH) - Page 1
<PAGE>
      limited to, all rights of stoppage in transit, replevin, reclamation, and
      resale; and (g) all rights to brokerage commissions.

            "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.

PLEDGE AND SECURITY AGREEMENT (FIVH) - Page 2
<PAGE>
            "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, 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.

PLEDGE AND SECURITY AGREEMENT (FIVH) - Page 3
<PAGE>
            "INTELLECTUAL PROPERTY" means the Copyrights, Copyright Licenses,
      Patents, Patent Licenses, Trademarks, and Trademark Licenses.

            "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 and the "Guaranteed Indebtedness" as such
      term is defined in the FIVH Guaranty to which the Debtor is a party.

            "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.

PLEDGE AND SECURITY AGREEMENT (FIVH) - Page 4
<PAGE>
            "PLEDGED COLLATERAL" means the Pledged Shares and the Instruments
      evidencing the obligations of Subsidiaries to Debtor described in SECTION
      2.1(C).

            "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 of 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.

PLEDGE AND SECURITY AGREEMENT (FIVH) - Page 5
<PAGE>
            "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.

      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;

PLEDGE AND SECURITY AGREEMENT (FIVH) - Page 6
<PAGE>
      (i)   all Financial Assets and Investment Property, including, without
            limitation, or in addition, the following:

            (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 sell its Accounts (i) to FIRC
pursuant to the FIRC Purchase Agreement, (ii) to FIACC pursuant to the FIACC
Purchase Agreement, (iii) to FIARC pursuant to the Enterprise Purchase
Agreement, and (iv) 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 and of no further
force or effect until such time, if ever, that such Accounts are reacquired by
Debtor.

PLEDGE AND SECURITY AGREEMENT (FIVH) - Page 7
<PAGE>
                                  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:

      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

PLEDGE AND SECURITY AGREEMENT (FIVH) - Page 8
<PAGE>
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 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 (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).

PLEDGE AND SECURITY AGREEMENT (FIVH) - Page 9
<PAGE>
      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 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.

PLEDGE AND SECURITY AGREEMENT (FIVH) - Page 10
<PAGE>
      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 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:

PLEDGE AND SECURITY AGREEMENT (FIVH) - Page 11
<PAGE>
      (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, 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,

PLEDGE AND SECURITY AGREEMENT (FIVH) - Page 12
<PAGE>
            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
            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.

PLEDGE AND SECURITY AGREEMENT (FIVH) - Page 13
<PAGE>
                                   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 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

PLEDGE AND SECURITY AGREEMENT (FIVH) - Page 14
<PAGE>
            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 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

PLEDGE AND SECURITY AGREEMENT (FIVH) - Page 15
<PAGE>
            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 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

PLEDGE AND SECURITY AGREEMENT (FIVH) - Page 16
<PAGE>
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.

      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

PLEDGE AND SECURITY AGREEMENT (FIVH) - Page 17
<PAGE>
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.



                  [Remainder of page intentionally left blank.]

PLEDGE AND SECURITY AGREEMENT (FIVH) - Page 18
<PAGE>
      IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the day and year first written above.

                                          DEBTOR:

                                          FIRST INVESTORS (VERMONT) HOLDINGS,
                                          INC.


                                          By: ________________________________
                                          Name: ______________________________
                                          Title: _____________________________

                                          By: ________________________________
                                          Name: ______________________________
                                          Title: _____________________________


                                          SECURED PARTY:

                                          BANK OF AMERICA, N.A.,
                                          as Administrative Agent for the
                                          Lenders


                                          By: ________________________________
                                          Name: ______________________________
                                          Title: _____________________________

PLEDGE AND SECURITY AGREEMENT (FIVH) - Page 19
<PAGE>
                                  SCHEDULE 1.1
                                       TO
                          PLEDGE AND SECURITY AGREEMENT

                                 PLEDGED SHARES


<TABLE>
<CAPTION>
                                   DESCRIPTION OF
                                     EACH CLASS                               PERCENTAGE
                       CERTIFICATE   AND SERIES                  NUMBER OF    OF SHARES
ISSUER                    NUMBER   (IF APPLICABLE) PAR VALUE  PLEDGED SHARES    ISSUED

<S>                          <C>       <C>           <C>        <C>             <C>
First Investors Financial    26        Common        $.001      1,222,223       100%
Services, Inc.
</TABLE>

<PAGE>
                                  SCHEDULE 3.1
                                       TO
                          PLEDGE AND SECURITY AGREEMENT

                                    LOCATIONS

I.  PRINCIPAL PLACE OF
    BUSINESS                      ADDRESS                    LANDLORD/MORTGAGEE

                            40 Main Street, Suite 210        AIG Captive
                            Burlington, VT  05042            Management

II.  OTHER LOCATIONS        None

<PAGE>
                                  SCHEDULE 3.2
                                       TO
                          PLEDGE AND SECURITY AGREEMENT

                   DEPOSIT, COMMODITY, AND SECURITIES ACCOUNTS

                                  ACCOUNT
NAME                              NUMBER           TYPE           DEPOSITORY

First Investors (Vermont)
Holdings                        06-0157286        Deposit         Howard Bank

<PAGE>
                                  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:              04-3370436

<PAGE>
                                  SCHEDULE 3.5
                                       TO
                          PLEDGE AND SECURITY AGREEMENT

                              INTELLECTUAL PROPERTY


                                      None
<PAGE>
                                    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 (VERMONT) HOLDINGS, INC.


                                    By: ___________________________________
                                    Name: _________________________________
                                    Title: ________________________________



                                    SECURED PARTY:

                                    BANK OF AMERICA, N.A.,
                                    as Administrative Agent for the Lenders


                                    By: ___________________________________
                                    Name: _________________________________
                                    Title: ________________________________

<PAGE>
                                   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