Exhibit 10.21
FOURTH AMENDMENT TO THE
RECEIVABLES FINANCING AGREEMENT
     THIS FOURTH AMENDMENT TO THE RECEIVABLES FINANCING AGREEMENT, dated as of
February 20, 2009 (this “Amendment”), is entered into by and among PALISADES
ACQUISITION XVI, LLC, a Delaware limited liability company (the “Borrower”),
PALISADES COLLECTION, L.L.C., a Delaware limited liability company (the
“Servicer”), FAIRWAY FINANCE COMPANY, LLC ( the “Lender”), BMO CAPITAL MARKETS
CORP. (“BMO CM”), as Administrator for the Lender (in such capacity, the
“Administrator”) and as collateral agent for the Secured Parties (in such
capacity, the “Collateral Agent”), and BANK OF MONTREAL (“BMO”), as liquidity
agent for the Liquidity Providers (in such capacity, the “Liquidity Agent”).
Capitalized terms used and not otherwise defined herein are used as defined in
the Receivables Financing Agreement, dated as of March 2, 2007 (as amended,
supplemented or otherwise modified from time to time, the “Receivables Financing
Agreement”), among the Borrower, the Servicer, the Lender, the Administrator,
the Collateral Agent and the Liquidity Agent.
     WHEREAS, the parties hereto desire to amend the Receivables Financing
Agreement in certain respects as provided herein;
     NOW THEREFORE, in consideration of the premises and other material
covenants contained herein, the parties hereto agree as follows:
     SECTION 1. Amendments. The Receivables Financing Agreement is hereby
amended as follows:
     1.1 The definitions of “Aggregate Collection Rate”, “Applicable
Percentage”, “Collection Rate” and “Interest Adjustment Date” as set forth in
Section 1.1 of the Receivables Financing Agreement are hereby deleted.
     1.2 The following definition of “Asta Guaranties” is hereby added to
Section 1.1 of the Receivables Financing Agreement immediately following the
definition of “Asta”:
““Asta Guaranties” means (i) the guaranty, dated as of February 20, 2009, from
the guarantors from time to time party thereto in favor of the Collateral Agent
and (ii) the guaranty, dated as of February 20, 2009 from Asta Group,
Incorporated in favor of the Collateral Agent, each as amended, supplemented or
otherwise modified from time to time.”

 

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     1.3 The following definition of “Borrower Action” is hereby added to
Section 1.1 of the Receivables Financing Agreement immediately following the
definition of “Borrower”:
““Borrower Action” means any litigation, investigation or proceeding of the type
described in Section 8.1.14 (excluding ordinary course collection activity
litigation and proceedings).”
     1.4 The definition of “Borrowing Base” as set forth in Section 1.1 of the
Receivables Financing Agreement is hereby deleted and replaced in its entirety
as follows:
““Borrowing Base” means, on any Distribution Date, the GAAP balance of all
Eligible Receivables of the Borrower as determined by the Servicer and as agreed
to by the Administrator.”
     1.5 The definition of “Borrowing Base Deficit” as set forth in Section 1.1
of the Receivables Financing Agreement is hereby deleted and replaced in its
entirety as follows:
““Borrowing Base Deficit” means on any Distribution Date, the excess, if any, of
110% of the Loans outstanding over the Borrowing Base.”
     1.6 The following definition of “Executive Officer” is hereby added to
Section 1.1 of the Receivables Financing Agreement immediately following the
definition of “Event of Bankruptcy” therein:
““Executive Officer” means, for any Person, each of the chief executive officer,
chief operating officer, chief financial officer and general counsel.”
     1.7 The following definition of “Guarantor Security Agreements” is hereby
added to Section 1.1 of the Receivables Financing Agreement immediately
following the definition of “GAAP” therein:
““Guarantor Security Agreements” means (i) the guarantor security agreement,
dated as of February 20, 2009 among the guarantors from time to time party
thereto and the Collateral Agent and (ii) the security agreement, dated as of
February 20, 2009, between Asta Group, Incorporated and the Collateral Agent,
each as amended, supplemented or otherwise modified from time to time.”
     1.8 The definition of “Stated Maturity Date” as set forth in Section 1.1 of
the Receivables Financing Agreement is hereby deleted and replaced in its
entirety as follows:
““Stated Maturity Date” means April 30, 2011; provided, however, that such date
may be accelerated pursuant to Section 10.2; and provided, further, that,
subject to Section 10.2, if the aggregate principal amount of all Loans from
time to time outstanding is reduced to $25,000,000 or less on or before the
April 30, 2011 Distribution Date, the Stated Maturity Date will be extended to
April 30, 2012.”

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     1.9 The following definition of “Pledged Note” is hereby added to
Section 1.1 of the Receivables Financing Agreement immediately following the
definition of “Person” therein:
““Pledged Note” means that certain promissory note, dated February 20, 2009,
executed by Asta payable to Asta Group, Incorporated in the original principal
amount of $700,000.”
     1.10 The definition of “Transaction Documents” as set forth in Section 1.1
of the Receivables Financing Agreement is hereby amended by adding “the Asta
Guaranties, the Guarantor Security Agreements” immediately after “Transfer
Agreement” therein.
     1.11 Section 9.1.8(e) of the Receivables Financing Agreement is hereby
deleted in its entirety and replaced with the following:
“(x) Within five Business Days of an Executive Officer’s knowledge thereof,
notice of (i) any material Borrower Action not previously disclosed to the
Collateral Agent and the Administrator, and (ii) any materially adverse
development in previously disclosed Borrower Action, (y) on a monthly basis, a
summary update of all Borrower Action known to any Executive Officer and (z) to
the extent reasonably requested by the Administrator, additional documents or
information relating to any Borrower Action.”
     1.12 The following Section 9.1.12 is hereby added to the Receivables
Financing Agreement:
“Financial Advisor. The Servicer shall hire (a) by March 31, 2009 (or such other
later time as is commercially reasonable) unless otherwise agreed to by the
Administrator in writing and (b) no more than once per calendar year at the
request of the Administrator, in each case, at the Borrower’s sole expense, a
financial advisor selected by the Servicer and reasonably acceptable to the
Administrator to review the collection process with respect to the Receivables
and to deliver a report to the Servicer, with a copy to the Administrator, on
financial advisor’s findings and recommendation on how, if at all, to improve
such collection process within a reasonable amount of time thereafter.”
     1.13 Section 9.2.1 of the Receivables Financing Agreement is hereby amended
by (i) replacing “true-sale” with “non-recourse true-sale in form that complies
with the requirements of this Section 9.2.1 and is reasonably satisfactory to
the Administrator” and (ii) replacing “Borrowing Base Deficiency” with
“Borrowing Base Deficit” therein.
     1.14 Section 9.2.4 is hereby deleted and replaced in its entirety as
follows:
“9.2.4 Incurrence of Indebtedness. Borrower shall not create, incur or permit to
exist, any Indebtedness except for (a) Indebtedness and liabilities incurred
pursuant to the Transaction Documents and normal trade payables incurred in the
ordinary course of its business, (b) Indebtedness

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arising under Qualifying Hedge Agreements, (c) Permitted Indebtedness not in
excess of $1,000,000 in the aggregate or (d) Indebtedness which, if applicable,
may be vacated, stayed, discharged (without payment therefore to affect such
discharge) or bonded within thirty days of the occurrence thereof. “Permitted
Indebtedness” means judgments, settlements, legal fees and other legal expenses
(and claims which give rise to GAAP liabilities related thereto) relating to the
collection and/or sale of any of the Receivable Assets, solely to the extent
such Indebtedness is paid when due and owing.
     1.15 Section 10.1.5 is hereby deleted and replaced in its entirety as
follows:
“10.1.5 Borrowing Base Deficit. At any time a Borrowing Base Deficit shall exist
and such condition shall continue unremedied for 2 Business Days.”
     1.16 Section 10.1.10 of the Receivables Financing Agreement is hereby
amended by replacing the “or” immediately before “(c)” with “,” and adding “or
(d) any breach or default shall have occurred under any of the Asta Guaranties
or the Guarantor Security Agreements.”
     1.17 Section 10.1.14 of the Receivables Financing Agreement is hereby
deleted and replaced in its entirety as follows:
“Average Monthly Payments. Average payments of principal on the Loans pursuant
to Section 4.2(b) clause fourth are less than $1,000,000 for any 3 consecutive
Distribution Dates.”
     SECTION 2. Receivables Financing Agreement in Full Force and Effect as
Amended.
     Except as specifically amended hereby, the Receivables Financing Agreement
shall remain in full force and effect. All references to the Receivables
Financing Agreement shall be deemed to mean the Receivables Financing Agreement
as modified hereby. This Amendment shall not constitute a novation of the
Receivables Financing Agreement, but shall constitute an amendment thereof. The
parties hereto agree to be bound by the terms and conditions of the Receivables
Financing Agreement, as amended by this Amendment, as though such terms and
conditions were set forth herein.
     SECTION 3. Miscellaneous.
          A. After giving effect to this Amendment, on and as of the date
hereof, except as otherwise disclosed in writing to BMO CM, the Borrower’s
representations and warranties set forth in Section 8.1 of the Receivables
Financing Agreement (as amended hereby) are true and correct in all material
respects, as though made on and as of such date (except to the extent such
representations and warranties relate solely to an earlier date and then as of
such earlier date).
          B. 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 when so executed

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and delivered shall be deemed to be an original instrument but all of which
together shall constitute one and the same agreement.
          C. The effectiveness of this Amendment is subject to the following
condition precedents:

  i.   the Administrator shall have received counterparts of this Amendment,
duly executed by all parties hereto;     ii.   the execution and delivery of the
Asta Guaranties and the Guarantor Security Agreements by all parties thereto;  
  iii.   the delivery of (a) the Pledged Note to the Collateral Agent and
(b) opinions in connection with this Amendment and related documents in form and
substance reasonably satisfactory to the Collateral Agent; and     iv.   the
Borrower shall have reimbursed the Administrator for all its reasonable
documented out-of-pocket costs and out-of-pocket expenses incurred in connection
with the preparation and delivery of this Amendment, including, without
limitation, the fees and disbursements of counsel to the Administrator.

          D. 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.
          E. This Amendment may not be amended or otherwise modified except as
provided in the Receivables Financing Agreement.
          F. Each of the Administrator and the Lender do not waive and have not
waived, and hereby expressly reserve, its right at any time to take any and all
actions, and to exercise any and all remedies, authorized or permitted under the
Receivables Financing Agreement, as amended, or any of the other Transaction
Documents, or available at law or equity or otherwise.
          G. Any provision in this Amendment which is 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 hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
          H. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO ANY
OTHERWISE APPLICABLE CONFLICTS OF LAW PRINCIPLES (OTHER THAN THOSE SET FORTH IN
SECTION 5- 1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).

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          I. EACH OF THE PARTIES HERETO HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS
AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF BORROWER, ASTA,
THE ORIGINATOR, THE SERVICER, THE ADMINISTRATOR, THE COLLATERAL AGENT, LENDER OR
ANY OTHER AFFECTED PARTY. EACH OF BORROWER AND THE SERVICER ACKNOWLEDGES AND
AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION
(AND EACH OTHER PROVISION OF EACH OTHER TRANSACTION DOCUMENT TO WHICH IT IS A
PARTY) AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE OTHER PARTIES
ENTERING INTO THIS AGREEMENT AND EACH SUCH OTHER TRANSACTION DOCUMENT.
          J. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT MAY
BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES
FEDERAL COURT SITTING IN NEW YORK, NEW YORK, AND BY EXECUTION AND DELIVERY OF
THIS AGREEMENT, EACH OF THE BORROWER AND THE SERVICER CONSENTS, FOR ITSELF AND
IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS.
EACH OF THE BORROWER AND THE SERVICER IRREVOCABLY WAIVES, TO THE MAXIMUM EXTENT
PERMITTED BY LAW, ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE
OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, THAT IT MAY NOW OR HEREAFTER
HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT
OF THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO.
          K. The parties hereto hereby acknowledge the following breaches of the
Transaction Documents may have occurred: (i) the failure of the Borrower to
notify the Administrator, the Collateral Agent and the Liquidity Agent, in
accordance with Section 9.18 of the Receivables Financing Agreement of certain
proceedings, (ii) the failure of the Borrower to deliver to the Administrator an
opinion of counsel described in Section 9.1.11 of the Receivables Financing
Agreement for the 2008 calendar year, (iii) the failure to comply with
Section 9.2.1 of the Receivables Financing Agreement, (iv) the failure of the
Borrower to satisfy the Rolling Collection Rate test set forth in
Section 10.1.14 of the Receivables Financing Agreement for the November 2008,
December 2008 and January 2009 Collection Periods and (v) the failure of the
Borrower to deliver amendments to a Subservicing Agreement and a related
Management Agreement in accordance with Section 3.01 of the Servicing Agreement
(collectively, the “Potential Breaches”). The Lender, the Administrator, the
Collateral Agent and the Liquidity Agent each hereby agree to waive the
Termination Events and Servicer Termination Events, if any, relating to the
Potential Breaches that occurred prior to the date hereof.
[Signature Pages Follow]

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          IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed and delivered by their proper and duly authorized officers as
of the 20th of February, 2009.

            PALISADES ACQUISITION XVI, LLC,
as Borrower
      By:   /s/ Gary Stern         Name:   Gary Stern        Title:   Manager   
 

Signature Page to Fourth Amendment

 

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            BMO CAPITAL MARKET CORP.,
as Administrator and as Collateral Agent
      By:   /s/ John Pappano       Name:   John Pappano       Title:   Managing
Director    

Signature Page to Fourth Amendment

         

 

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            FAIRWAY FINANCE COMPANY, LLC,
as Lender
      By:   /s/ Phillip A. Martone       Name:   Phillip A. Martone      
Title:   Vice President    

Signature Page to Fourth Amendment

         

 

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            PALISADES COLLECTION, L.L.C.,
as Servicer
      By:   /s/ Gary Stern         Name:   Gary Stern        Title:   Manager   
 

Signature Page to Fourth Amendment

 

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            BANK OF MONTREAL, as Liquidity Agent
      By:   /s/ John Pappano       Name:   John Pappano       Title:   Managing
Director    

Signature Page to Fourth Amendment