EX-10.1



 





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.



 









 





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.



2









 






     “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.



3









 





     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 	 



 









 






	 	 	 	 	 



	 	 	 	 	 
	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 	 



 









 






	 	 	 	 	 



	 	 	 	 	 
	 	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 	 



 









 






	 	 	 	 	 



	 	 	 	 	 
	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 	 



 









 






	 	 	 	 	 



	 	 	 	 	 
	 	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 	 



 









 






	 	 	 	 	 



	 	 	 	 	 
	 	BMO CAPITAL MARKETS FINANCING, INC.,

as Lender

 	 
	 	By:  	/s/ Robert Bomben
 	 
	 	 	Print Name: 	Robert Bomben 	 
	 	 	Print Title:	Director 	 



 









 






	 	 	 	 	 



	 	 	 	 	 
	 	BANK LEUMI USA, as Lender

 	 
	 	By:  	/s/ Mary Ellen Bronco
 	 
	 	 	Print Name: 	Mary Ellen Bronco 	 
	 	 	Print Title:  	Vice President 	 



 









 






	 	 	 	 	 



	 	 	 	 	 
	 	THE BERKSHIRE BANK, as Lender

 	 
	 	By:  	/s/ Ira A. Mermelstein
 	 
	 	 	Print Name:  	Ira Mermelstein 	 
	 	 	Print Title:  	Vice President 	 



 









 






	 	 	 	 	 



	 	 	 	 	 
	 	SIGNATURE BANK, as Lender

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