**Exhibit 10.123**

 

EXECUTION COPY

 

**AMENDMENTNO. 7 TOSECURITY AGREEMENT**

 

**AMENDMENTNO. 7 TO SECURITY AGREEMENT,**dated as of August 15, 2005 (the “*Amendment*”),**by and among FIRST INVESTORSRESIDUAL FUNDING LP (the “*Debtor*”),**FIRST INVESTORS FINANCIAL SERVICES, INC., as seller(the “*Seller*”)**andWACHOVIA CAPITAL MARKETS, LLC (successor in interest to First Union Securities, Inc.),as the deal agent (the “*Deal Agent*”)**and collateral agent (the “*Collateral Agent*”).

 

**W I T N E SS E T H****:**

 

**WHEREAS,**the parties hereto entered into the SecurityAgreement, dated as of December 6, 2001 (as amended, modified and waivedto the date hereof, the “*Security Agreement*”); and

 

**WHEREAS,**the parties to the Security Agreement desireto make certain amendments to the Security Agreement;

 

**NOW,THEREFORE,**inconsideration of the foregoing, and the respective agreements, warranties andcovenants contained herein, the parties hereto agree, covenant and warrant as follows:

 

**SECTION 1.DEFINITIONS**

 

**1.1          Interpretation. **All capitalized terms used herein (including the recitals hereto) shallhave the respective meanings assigned thereto in the Security Agreement unlessotherwise defined herein.

 

**1.2**          **Revised Definitions.**

 

(a)           Thedefinition of “Termination Date” in Section 1.1 of the Agreement ishereby modified, amended and restated to read in its entirety as follows:

 

“Termination Date: The earliest of (1) theday on which a Termination Event occurs, (2) February 15, 2006 orsuch later date to which the Termination Date may be extended, if extended, inthe sole discretion of each Noteholder or (3) the Business Day specifiedin a written notice from the Debtor to the Deal Agent and the Collateral Agent.”

 

**SECTION 2.[reserved]**

 

**SECTION 3.REPRESENTATIONS, WARRANTIES AND COVENANTS**

 

Debtor and Seller each hereby represents,warrants that each of the representations and warranties made by or on behalfof such Person in any of the Transaction Documents was true

 

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andcorrect when made and is true and correct on and as of the date of thisAmendment with the same full force and effect as if each of suchrepresentations and warranties had been made by such Person on the date hereofand in this Amendment. Debtor and the Seller each further represents andwarrants to the Deal Agent, each Secured Party and the Collateral Agent that: (i) theexecution, delivery and performance by it of this Amendment are within itscorporate powers or limited partnership powers, as the case may be, have beenduly authorized by all necessary action, will not violate any requirement oflaw or contractual obligation of Debtor or Seller and will not result in, orrequire, the creation or imposition of any lien on any of their respectiveproperties or revenues, (iii) no authorization or approval or other actionby, and no notice or filing with, any governmental authority or regulatory bodyis required for the due execution, delivery and performance by it of thisAmendment, (iv) this Amendment is its legal, valid and binding obligation,enforceable against it in accordance with its terms, except as suchenforceability may be limited by bankruptcy, insolvency, reorganization orsimilar laws affecting creditors’ rights generally and (v) it is incompliance with all applicable Requirements of Law. The representations andwarranties set forth above shall survive the execution of this Amendment.

 

**SECTION 4. EFFECTIVENESS****OF THIS AMENDMENT**

 

The terms and provisions of this Amendmentshall be effective on the last to occur of receipt by the Deal Agent of (a) anoriginal of this Amendment fully executed by each of the parties hereto, (b) receiptby the Deal Agent by wire transfer in immediately available funds of a renewalfee in the amount of $250,000, which fee shall be fully earned and notrefundable in whole or in part upon the execution and delivery of thisAmendment and (c) an original of the amendment to the Note PurchaseAgreement (in form and substance satisfactory to the Deal Agent), dated thedate hereof, fully executed by each of the parties thereto.

 

**SECTION 5.PROVISIONS OF GENERAL APPLICATION**

 

**5.1          Effect of this Amendment. **Except as modified pursuant hereto, no other changes or modificationsto the Transaction Documents are intended or implied and in all other respectseach of the Transaction Documents are hereby specifically ratified, restatedand confirmed by all parties hereto as of the effective date hereof. To theextent of conflict between the terms of this Amendment and any otherTransaction Document, the terms of this Amendment shall control. The SecurityAgreement and this Amendment shall be read and construed as one agreement.

 

**5.2          Further Assurances.  **Debtor and Seller shall execute and deliver such additional documentsand take such additional action as may, in the opinion of the Deal Agent, benecessary or desirable to effectuate the provisions and purposes of thisAmendment.

 

**5.3          Binding Effect.  **This Amendment shall be binding upon and inure to the benefit of eachof the parties hereto and their respective successors and assigns.

 

**5.4          Survival of Representations andWarranties. **All representations and warranties made inthis Amendment or any other document furnished in connection with this

 

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Amendmentshall survive the execution and delivery of this Amendment and the otherdocuments, and no investigation by the Deal Agent, the Collateral Agent or anySecured Party or any closing shall affect the representations and warranties orthe right of Lenders to rely upon them.

 

**5.5          Severability.  **Any provision of this Amendment held by a court of competent jurisdictionto be invalid or unenforceable shall not impair or invalidate the remainder ofthis Amendment.

 

**5.6          Governing Law.  THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUEDAND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLETO CONTRACTS MADE AND PERFORMED IN SUCH STATE, WITHOUT REFERENCE TO ITSCONFLICT OF LAWS PROVISIONS (OTHER THAN SECTION 5-1401 OF THE NEW YORKGENERAL OBLIGATIONS LAW).**

 

**5.8**          **Counterparts.  **ThisAmendment may be executed in any number of counterparts, but all of suchcounterparts shall together constitute but one and the same agreement.

 

 

[Remainder of Page Intentionally LeftBlank]

 

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**IN WITNESSWHEREOF,** this Amendment is executedand delivered as of the day and year firstabove written.

 

 
| **DEBTOR:** | **FIRST INVESTORS RESIDUAL FUNDING LP**                       |
|-------------|---------------------------------------------------------------|
|        |                                                          |
|        | **By: FIALAC Holdings, Inc.,  its sole general partner** |
|        |                                                          |
| ** **  | By:                                                           | /s/ Bennie H. Duck |   |
|        | Name:  Bennie H. Duck                                         |
|        | Title:  Vice President and Chief Financial  Officer           |
|        |                                                          |
|        |                                                          |
| **SELLER:** | **FIRST INVESTORS FINANCIAL SERVICES, INC.**                  |
|        |                                                          |
|        | By:                                                           | /s/ Bennie H. Duck |   |
|        | Name: Bennie H. Duck                                          |
|        | Title: Vice President and Chief Financial Officer             |

 

 

[Additional Signatures to Follow]

 

 

[Signature Page to Amendment No. 7to Security Agreement]

 

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| **NOTE INVESTOR:**   | **VARIABLE FUNDING CAPITAL CORPORATION,**     |
|----------------------|-----------------------------------------------|
|                 |                                          |
|                 | **By:  Wachovia Capital  Markets, LLC,** |
| ** **           | ** **                                    | **as attorney-in-fact** |
|                 |                                          |   |
|                 |                                          |   |
|                 | By:                                           |  /s/ Douglas  R. Wilson, SR. |   |
|                 | Name:                                         |  DOUGLAS R.  WILSON, SR. |   |
|                 | Title:                                        |  VICE PRESIDENT |   |
|                 |                                          |
|                 |                                          |
| **DEAL AGENT and**   | ** **                                    |
| **COLLATERAL AGENT** | **WACHOVIA CAPITAL MARKETS, LLC,**            |
|                 |                                          |
|                 |                                          |
|                 | By:                                           |  /s/ Justin Zakocs |   |
|                 | Name:                                         |  Justin Zakocs |   |
|                 | Title:                                        |  Vice President |   |
|                      |                                               |  |  |  |  |  |  |

 

 

[End of Signatures]

 

 

[Signature Page to Amendment No. 7to Security Agreement]

 

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