Exhibit 10.20
FORM OF REVOLVING NOTE

      February 20, 2009   New York, New York                                   
 

          FOR VALUE RECEIVED, the undersigned, ASTA FUNDING ACQUISITION I, LLC,
a Delaware limited liability company, ASTA FUNDING ACQUISITION II, LLC, a
Delaware limited liability company, PALISADES COLLECTION, L.L.C., a Delaware
limited liability company, PALISADES ACQUISITION I, LLC, a Delaware limited
liability company, PALISADES ACQUISITION II, LLC, a Delaware limited liability
company, PALISADES ACQUISITION IV, LLC, a Delaware limited liability company,
PALISADES ACQUISITION V, LLC, a Delaware limited liability company, PALISADES
ACQUISITION VI, LLC, a Delaware limited liability company, PALISADES ACQUISITION
VII, LLC, a Delaware limited liability company, PALISADES ACQUISITION VIII, LLC,
a Delaware limited liability company, PALISADES ACQUISITION IX, LLC, a Delaware
limited liability company, PALISADES ACQUISITION X, LLC, a Delaware limited
liability company, CLIFFS PORTFOLIO ACQUISITION I, LLC, a Delaware limited
liability company, SYLVAN ACQUISITION I, LLC, a Delaware limited liability
company, and OPTION CARD, LLC, a Colorado limited liability company
(collectively referred to as “Borrowers”), HEREBY PROMISE TO PAY to the order of
                    , a New York banking corporation (“Lender”), at the offices
of                     , a New York banking corporation, as Administrative Agent
for Lenders (“Administrative Agent”), at its address at                     , or
at such other place as Administrative Agent may designate from time to time in
writing, in lawful money of the United States of America and in immediately
available funds, the amount of                      or, if less, the aggregate
unpaid amount of all Advances made at any time to the undersigned under the
“Loan Agreement” (as hereinafter defined), plus interest on the unpaid balance
as provided in the Loan Agreement. All capitalized terms used but not otherwise
defined herein have the meanings given to them in the Loan Agreement or in Annex
A attached thereto.
     This Revolving Note (“Note”) is one of the Revolving Notes issued pursuant
to that certain Fourth Amended and Restated Loan Agreement dated as of July 11,
2006, by and among Borrowers, the other Credit Parties signatory thereto,
Administrative Agent, and the other Agents and Lenders signatory thereto from
time to time (including all annexes, exhibits and schedules thereto, and as from
time to time amended, restated, supplemented or otherwise modified,
collectively, the “Loan Agreement”), and is one of the Revolving Notes given in
renewal of and substitution for various Revolving Notes payable to the order of
Lender. This Note is entitled to the benefit and security of the Loan Agreement,
the Collateral Documents and all of the other Loan Documents referred to
therein. Reference is hereby made to the Loan Agreement for a statement of all
of the terms and conditions under which the Revolving Loans evidenced hereby are
made and are to be repaid. The date and amount of each Advance made by Lenders
to Borrowers, the rates of interest applicable thereto and each payment made on
account of the principal thereof, shall be recorded by Administrative Agent on
its books in accordance with the terms of the Loan Agreement; provided that the
failure of Administrative Agent to make any such recordation shall not affect
the obligations of Borrowers to make a payment when due of

 

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any amount owing under the Loan Agreement or this Note in respect of the
Advances made by Lender to Borrowers.
          The principal amount of the indebtedness evidenced hereby shall be
payable in the amounts and on the dates specified in the Loan Agreement, the
terms of which are hereby incorporated herein by reference. Interest thereon
shall be paid until such principal amount is paid in full at such interest rates
and at such times, and pursuant to such calculations, as are specified in the
Loan Agreement. The entire unpaid balance shall be immediately due and payable
in full on the Commitment Termination Date.
          If any payment on this Note becomes due and payable on a day other
than a Business Day, the maturity thereof shall be extended to the next
succeeding Business Day (except as set forth in the definition of LIBOR Period)
and, with respect to payments of principal, interest thereon shall be payable at
the then applicable rate during such extension.
          This Note is secured by the Collateral. Borrowers shall have no right
to prepay this Note, except as expressly permitted or required under the Loan
Agreement.
          Upon the occurrence and during the continuance of any Default, which
is not reasonably capable of being cured, or Event of Default, this Note may,
when and as provided in the Loan Agreement, and without demand, notice or legal
process of any kind, be declared, and immediately shall become, due and payable.
          Time is of the essence of this Note.
          In the event of any conflict between the terms of this Note and the
terms of the Loan Agreement, the terms of the Loan Agreement shall prevail. All
of the terms, covenants, provisions, conditions, stipulations, promises and
agreements contained in the Loan Agreement to be kept, observed and/or performed
by the undersigned are made a part of this Note and are incorporated into this
Note by this reference to the same extent and with the same force and effect as
if they were fully set forth in this Note; the undersigned promise and agree to
keep, observe and perform them or cause them to be kept, observed and performed,
strictly in accordance with the terms and provisions thereof.
          Each party liable on this Note in any capacity, whether as maker,
endorser, surety, guarantor or otherwise, (i) waives presentment for payment,
demand, protest and notice of presentment, notice of protest, notice of
non-payment and notice of dishonor of this debt and each and every other notice
of any kind respecting this Note and all lack of diligence or delays in
collection or enforcement hereof; (ii) agrees that Lender at any time or times,
without notice to the undersigned or its consent, may grant extensions of time,
without limit as to the number of the aggregate period of such extensions, for
the payment of any principal, interest or other sums due hereunder; (iii) to the
extent permitted by law, waives all exemptions under the laws of the State of
New York and/or any state or territory of the United States; (iv) to the extent
permitted by law, waives the benefit of any law or rule of law intended for its
advantage or protection as an obligor under this Note or providing for its
release or discharge from liability on this Note, in whole or in part, on
account of any facts or circumstances other than full and complete payment of
all amounts due under this Note; and (v) in accordance with, and to the extent
provided in, the

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Loan Agreement, agrees to pay, in addition to all other sums of money due, all
cost of collection and attorney’s fees, whether suit be brought or not, if this
Note is not paid in full when due, whether at the stated maturity or by
acceleration.
          If any term, provision, covenant or condition of this Note or the
application of any term, provision, covenant or condition of this Note to any
party or circumstance shall be found by a court of competent jurisdiction to be,
to any extent, invalid or unenforceable, then the remainder of this Note and the
application of such term, provision, covenant, or condition to parties or
circumstances other than those as to which it is held invalid or unenforceable,
shall not be affected thereby, and each term, provision, covenant or condition
shall be valid and enforced to the fullest extent permitted by law. Upon
determination that any such term, provision, covenant or condition is invalid,
illegal or unenforceable, Lender may, but is not obligated to, advance funds to
Borrowers under this Note until Borrowers and Lender amend this Note so as to
effect the original intent of the parties as closely as possible in a valid and
enforceable manner.
          Except as provided in the Loan Agreement, this Note may not be
assigned by Lender to any Person.
          THIS REVOLVING NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND
PERFORMED IN THAT STATE.
[SIGNATURE PAGE FOLLOWS]

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     IN WITNESS WHEREOF, the parties hereto have executed this Note as of the
date first above written.
ASTA FUNDING ACQUISITION I, LLC
ASTA FUNDING ACQUISITION II, LLC
PALISADES COLLECTION, L.L.C.
CLIFFS PORTFOLIO ACQUISITION I, LLC
PALISADES ACQUISITION I, LLC
PALISADES ACQUISITION II, LLC
PALISADES ACQUISITION IV, LLC
PALISADES ACQUISITION V, LLC
PALISADES ACQUISITION VI, LLC
PALISADES ACQUISITION VII, LLC
PALISADES ACQUISITION VIII, LLC
PALISADES ACQUISITION IX, LLC
PALISADES ACQUISITION X, LLC
SYLVAN ACQUISITION I, LLC
OPTION CARD, LLC

             
 
  By:   /s/ Mitchell Cohen    
 
                Name: Mitchell Cohen         Title: Manager