EXHIBIT 10.1
FIFTH AMENDMENT TO
FOURTH AMENDED AND RESTATED LOAN AGREEMENT
     THIS FIFTH AMENDMENT TO FOURTH AMENDED AND RESTATED LOAN AGREEMENT (this
“Amendment”) is executed and entered into as of June 27, 2007, by and among 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 (sometimes collectively referred to herein as “Borrowers” and
individually as a “Borrower”); ASTA FUNDING, INC., a Delaware corporation,
COMPUTER FINANCE, LLC, a Delaware limited liability company, ASTAFUNDING.COM,
LLC, a Delaware limited liability company, ASTA COMMERCIAL, LLC, a Delaware
limited liability company, and VATIV RECOVERY SOLUTIONS, LLC, a Texas limited
liability company (collectively, “Guarantors”); ISRAEL DISCOUNT BANK OF NEW
YORK, a New York banking corporation (“IDB”), as collateral agent for itself and
the lenders signatory hereto from time to time (together with any successor
collateral agent appointed pursuant to Section 9.7, the “Collateral Agent”), as
administrative agent (together with any successor administrative agent appointed
pursuant to Section 9.7, the “Administrative Agent”, and together with the
Collateral Agent, the “Agents”), and as co-lead arranger; MIDDLE MARKET FINANCE,
a division of Merrill Lynch Business Financial Services Inc. (“Merrill Lynch”),
as co-lead arranger and as co-administrative agent; and the Lenders (as defined
below).
RECITALS:
     A. Borrowers and Guarantors (collectively, the “Credit Parties”), along
with Administrative Agent and Lenders entered into a certain Fourth Amended and
Restated Loan and Security Agreement dated as of July 11, 2006 (as amended,
modified, supplemented or restated from time to time, the “Credit Agreement”).
All capitalized terms used in this Amendment, unless specifically defined
herein, shall have the meanings attributed to them in the Credit Agreement.
     B. The Credit Parties have requested that the Lenders amend certain terms
of the Credit Agreement, pursuant to the terms of this Amendment.

 

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AGREEMENT:
     For good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Credit Parties, Administrative Agent and Lenders
agree as follows:
SECTION 1. ACCURACY OF RECITALS.
     The Credit Parties acknowledge, represent, warrant and agree that the
Recitals stated above are true and complete in all respects.
SECTION 2. MODIFICATION.
     2.1 Definitions. As of the date hereof, the definition of “Applicable
Advance Rate”, “Borrowing Base”, “Collections Value Multiple”, “Existing
Portfolio” and “New Portfolio” as set forth on Annex A to the Credit Agreement,
are amended and restated in their entirety to read as follows:
     “Applicable Advance Rate” means, as of any date of determination by Agent
from time to time, as to each Eligible New Portfolio acquired by a Borrower:
     (a) during the first six months such Eligible New Portfolio is owned by
that Borrower, 80%; and
     (b) during the seventh through thirty-third months such Eligible New
Portfolio is owned by that Borrower, 80% less (i) 2.962963% per month, for each
of months seven through thirty-two and (ii) 2.962962% for month thirty-three.
     “Borrowing Base” means, as of any date of determination by Agent from time
to time, an amount equal to the sum at such time of:
     (a) the sum of the Loan Value of Eligible New Portfolios times their
Applicable Advance Rate, plus
     (b) the lesser of:
     (i) the sum of the Loan Value of Eligible Existing Portfolios, or
     (ii) $15,000,000;
in each case, less any Reserves established by Administrative Agent at such
time; and provided, that, at no time shall Advances against (1) Telecom
Receivables exceed thirty-five percent (35%) of the sum of (a) and (b) of this
definition at the date of determination, (2) any receivables or receivable
classes relating to payments by consumers for computers and furniture exceed
twenty percent (20%) of the sum of (a) and (b) of this definition, or (3) any
other receivables or receivables class not specifically permitted under this
Agreement exceed twenty percent (20%) of the sum of (a) and (b) of this
definition.

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     “Collections Multiple Value” means the Average Collections for an Eligible
Existing Portfolio, multiplied by three (3).
     “Existing Portfolio” shall mean a Portfolio that a Borrower has owned for
more than thirty-three (33) months as to which such Borrower has all right,
title and interest in the Accounts comprising the Portfolio.
     “New Portfolio” shall mean a Portfolio that any Borrower has owned for
thirty-three (33) months or less as to which such Borrower has all right, title
and interest in the Accounts comprising the Portfolio.
     2.2 No Other Modifications. Except as otherwise specifically modified by
this Amendment, all terms, conditions, covenants, rights, duties, obligations
and liabilities of the Credit Parties under the Credit Agreement remain in full
force and effect and unmodified.
SECTION 3. REPRESENTATIONS AND WARRANTIES.
     The execution and delivery of this Amendment and the documents and
instruments contemplated by this Amendment have been duly authorized by all
requisite action by or on behalf of the members of the Credit Parties.
SECTION 4. COVENANTS.
     4.1 This Amendment shall be governed by the terms and provisions of the
Credit Agreement.
     4.2 In the event of a conflict between the terms of this Amendment and the
terms of the Credit Agreement, the terms of this Amendment shall govern and
control.
     4.3 The Credit Parties hereby confirm and agree that the terms, conditions,
covenants, guaranties, assurances, promises and provisions contained in the Loan
Documents to which each is a party remain in full force and effect without
amendment or modification as a result of this Amendment and that the
obligations, liabilities and duties of the Credit Parties remain unimpaired as a
result of this Amendment and are in full force and effect.
SECTION 5. BINDING EFFECT.
     The Credit Agreement as modified herein shall be binding upon and shall
inure to the benefit of the members of the Credit Parties and their successors
and assigns.
SECTION 6. COUNTERPART EXECUTION; FACSIMILES.
     This Amendment may be executed in one or more counterparts, each of which
shall be deemed an original and all of which together shall constitute one and
the same document. Signature pages may be detached from the counterparts and
attached to a single copy of this Amendment to physically form one document.
Signatures may be exchanged by facsimile, with the original signature to follow.
Each party to this Amendment agrees to be bound by its own faxed signature and
to accept the faxed signature of the other parties to this Amendment.

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     IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of
the date first above written.

          BORROWERS:  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      GUARANTORS:  ASTA FUNDING, INC.
      By:   /s/ Mitchell Cohen         Name:   Mitchell Cohen        Title:  
Chief Financial Officer        COMPUTER FINANCE, LLC
ASTAFUNDING.COM, LLC
ASTA COMMERCIAL, LLC
VATIV RECOVERY SOLUTIONS, LLC
      By:   /s/ Mitchell Cohen         Name:   Mitchell Cohen        Title:  
Manager   

 

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          AGENT:  ISRAEL DISCOUNT BANK OF NEW YORK,
as Administrative Agent, Collateral Agent and
Co-Lead Arranger
      By:   /s/ Robert Fainelli         Name:   Robert Fainelli        Title:  
First Vice President              By:   /s/ Jeffrey S. Ackerman         Name:  
Jeffrey Ackerman        Title:   Senior Vice President   

 

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            MIDDLE MARKET FINANCE, a division of MERRILL LYNCH BUSINESS
FINANCIAL
SERVICES INC., as Co-Administrative Agent and
Co-Lead Arranger
      By:   /s/ Kenneth R. Geiger         Name:   Kenneth R. Geiger       
Title:   Vice President   

 

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          LENDERS:  ISRAEL DISCOUNT BANK OF NEW YORK,
as Lender
      By:   /s/ Robert J. Fainelli         Name:   Robert J. Fainelli       
Title:   First Vice President              By:   /s/ Jeffrey S. Ackerman        
Name:   Jeffrey S. Ackerman        Title:   Senior Vice President   

 

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            MIDDLE MARKET FINANCE, a division of
MERRILL LYNCH BUSINESS FINANCIAL
SERVICES INC., as Lender
      By:   /s/ Kenneth R. Geiger         Print Name:  Kenneth R. Geiger       
Print Title: Vice President   

 

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            BMO CAPITAL MARKETS FINANCING, INC.,
as Lender
      By:   /s/ Robert Bomben         Print Name:  Robert Bomben       
Print Title: Director   

 

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            BANK LEUMI USA, as Lender
      By:   /s/ Mary Ellen Bronco         Print Name:  Mary Ellen Bronco       
Print Title:   Vice President   

 

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            THE BERKSHIRE BANK, as Lender
      By:   /s/ Ira A. Mermelstein         Print Name:   Ira Mermelstein       
Print Title:   Vice President   

 

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            SIGNATURE BANK, as Lender
      By:   /s/ Thomas J. D’Antona         Print Name:  Thomas J. D’Antona     
  Print Title:   Senior Vice President & Senior Lender