Document:

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Exhibit 10.1

                               ASTA FUNDING, INC.

                            EQUITY COMPENSATION PLAN

         1. PURPOSES OF THE PLAN. This Asta Funding, Inc. Equity Compensation
Plan (the "Plan") is intended to attract and retain the best available personnel
for positions of substantial responsibility, to provide additional incentives to
Employees, Directors and Consultants, and to promote the success of the Company
and any Parent or Subsidiary. Options granted under the Plan may be Incentive
Stock Options or Nonstatutory Stock Options, as determined by the Committee at
the time of grant. Stock Purchase Rights, Stock Awards, Unrestricted Share
Awards and Stock Appreciation Rights may also be granted under the Plan.

         2. DEFINITIONS. As used herein, the following definitions shall apply:

            "Applicable Laws" means the requirements relating to the
administration of equity compensation plans under the applicable corporate and
securities laws of any of the states in the United States, U.S. federal
securities laws, the Code, any stock exchange or quotation system on which the
Common Stock is listed or quoted and the applicable laws of any foreign country
or jurisdiction where Awards are, or will be, granted under the Plan.

            "Award" means an Option, a Stock Purchase Right, a Stock
Appreciation Right, a Stock Award and/or the grant of Unrestricted Shares.

            "Board" means the Board of Directors of the Company.

            "Code" means the Internal Revenue Code of 1986, as amended.

            "Committee" means a committee of Directors appointed by the Board in
accordance with Section 4 of the Plan.

            "Common Stock" means the common stock, par value $0.01 per share, of
the Company.

            "Company" means Asta Funding, Inc., a Delaware corporation.

            "Consultant" means any person, including an advisor, engaged by the
Company or a Parent or Subsidiary to render services to such entity, other than
an Employee or a Director.

            "Director" means a member of the Board.

            "Employee" means any person, including officers and Directors (other
than Non-Employee Directors), serving as an employee of the Company or any
Parent or Subsidiary. An individual shall not cease to be an Employee in the
case of (i) any leave of absence approved by the Company or (ii) transfers
between locations of the Company or between the Company, its Parent, any
Subsidiary or any successor. For purposes of an Option initially granted as an
Incentive Stock Option, if a leave of absence of more than three months
precludes such Option from being treated as an Incentive Stock Option under the
Code, such Option thereafter shall be treated as a Nonstatutory Stock Option for
purposes of this Plan. Neither service as a Director nor payment of a director's
fee by the Company shall be sufficient to constitute "employment" by the
Company.

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            "Exchange Act" means the Securities Exchange Act of 1934, as
amended.

            "Fair Market Value" means, as of any date, the value of Common Stock
determined as follows:

                (i) if the Common Stock is listed on any established stock
exchange or a national market system, including without limitation the NASDAQ
National Market or The NASDAQ Small Cap Market of The NASDAQ Stock Market, the
Fair Market Value of a Share of Common Stock shall be the closing sales price of
a Share of Common Stock (or the closing bid, if no such sales were reported) as
quoted on such exchange or system for the last market trading day prior to the
time of determination, as reported in The Wall Street Journal or such other
source as the Committee deems reliable;

                (ii) if the Common Stock is regularly quoted by a recognized
securities dealer but is not listed in the manner contemplated by clause (i)
above, the Fair Market Value of a Share of Common Stock shall be the mean
between the high bid and low asked prices for the Common Stock on the last
market trading day prior to the day of determination, as reported in The Wall
Street Journal or such other source as the Committee deems reliable; or

                (iii) if neither clause (i) above nor clause (ii) above applies,
the Fair Market Value shall be determined in good faith by the Committee.

            "Incentive Stock Option" means an Option intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code and the
regulations promulgated thereunder.

            "Non-Employee Director" means a Director who is not an Employee.

            "Nonstatutory Stock Option" means an Option not intended to qualify
as an Incentive Stock Option.

            "Notice of Grant" means a written or electronic notice evidencing
certain terms and conditions of an individual Option grant, Stock Purchase Right
grant, Stock Award grant or grant of Unrestricted Shares or Stock Appreciation
Rights. The Notice of Grant applicable to Stock Options shall be part of the
Option Agreement.

            "Option" means a stock option granted pursuant to the Plan.

            "Option Agreement" means an agreement between the Company and an
Optionee evidencing the terms and conditions of an individual Option grant. Each
Option Agreement shall be subject to the terms and conditions of the Plan.

            "Optioned Stock" means the Common Stock subject to an Option or
Stock Purchase Right.

            "Optionee" means the holder of an outstanding Option or Stock
Purchase Right granted under the Plan.

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            "Parent" means a "parent corporation" of the Company (or, in the
context of Section 15(c) of the Plan, of a successor corporation), whether now
or hereafter existing, as defined in Section 424(e) of the Code.

            "Participant" shall mean any Service Provider who holds an Option, a
Stock Purchase Right, Restricted Stock, a Stock Award, Unrestricted Shares or
Stock Appreciation Rights granted or issued pursuant to the Plan.

            "Restricted Stock" means shares of Common Stock acquired pursuant to
a grant of Stock Purchase Rights under Section 11 of the Plan.

            "Restricted Stock Purchase Agreement" means a written agreement
between the Company and an Optionee evidencing the terms and restrictions
applicable to stock purchased under a Stock Purchase Right. Each Restricted
Stock Purchase Agreement shall be subject to the terms and conditions of the
Plan and the applicable Notice of Grant.

            "Rule 16b-3" means Rule 16b-3 of the Exchange Act or any successor
to such Rule 16b-3, as such rule is in effect when discretion is being exercised
with respect to the Plan.

            "Section 16(b)" means Section 16(b) of the Exchange Act.

            "Service Provider" means an Employee, Director or Consultant.

            "Share" means a share of the Common Stock, as adjusted in accordance
with Section 15 of the Plan.

            "Stock Appreciation Right" means a right awarded pursuant to Section
14 of the Plan.

            "Stock Award" means an Award of Shares pursuant to Section 12 of the
Plan.

            "Stock Award Agreement" means an agreement, approved by the
Committee, providing the terms and conditions of a Stock Award.

            "Stock Award Shares" means Shares subject to a Stock Award.

            "Stock Awardee" means the holder of an outstanding Stock Award
granted under the Plan.

            "Stock Purchase Right" means the right to purchase Common Stock
pursuant to Section 11 of the Plan, as evidenced by a Notice of Grant.

            "Subsidiary" means a "subsidiary corporation" of the Company (or, in
the context of Section 15(c) of the Plan, of a successor corporation), whether
now or hereafter existing, as defined in Section 424(f) of the Code.

            "Unrestricted Shares" means a grant of Shares made on an
unrestricted basis pursuant to Section 13 of the Plan.

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         3. STOCK SUBJECT TO THE PLAN. The maximum aggregate number of Shares
that may be issued under the Plan is 1,000,000 Shares. The total number of
Shares with respect to which Incentive Stock Options may be granted shall be
1,000,000 Shares. The maximum number of Shares subject to Options and Stock
Appreciation Rights which may be issued to any Participant under this Plan
during any calendar year is 100,000 Shares. The class and aggregate number of
Shares referred to in this paragraph shall be subject to adjustment in
accordance with Section 16(a) of the Plan.

         The Shares may be authorized but unissued, or reacquired, shares of
Common Stock. If an Option, Stock Purchase Right or Stock Appreciation Right
expires or becomes unexercisable without having been exercised in full or is
canceled or terminated, or if any Shares of Restricted Stock or Shares
underlying a Stock Award are forfeited or reacquired by the Company, the Shares
that were subject thereto shall be added back to the Shares available for
issuance under the Plan.

         4. ADMINISTRATION OF THE PLAN.

            (a) Appointment of Committee. The Plan shall be administered by a
Committee to be appointed by the Board, which Committee shall consist of not
less than two members of the Board and shall be comprised solely of members of
the Board who qualify as both non-employee directors as defined in Rule
16b-3(b)(3) of the Exchange Act and outside directors within the meaning of
Department of Treasury Regulations issued under Section 162(m) of the Code. The
Board shall have the power to add or remove members of the Committee, from time
to time, and to fill vacancies thereon arising; by resignation, death, removal,
or otherwise. Meetings shall be held at such times and places as shall be
determined by the Committee. A majority of the members of the Committee shall
constitute a quorum for the transaction of business, and the vote of a majority
of those members present at any meeting shall decide any question brought before
that meeting.

            (b) Powers of the Committee. Subject to the provisions of the Plan,
the Committee shall have the authority, in its discretion:

                (i) to determine the Fair Market Value;

                (ii) to select the Service Providers to whom Options, Stock
Purchase Rights, Stock Awards, Unrestricted Shares and Stock Appreciation Rights
may be granted hereunder;

                (iii) to determine the number of shares of Common Stock to be
covered by each Award granted hereunder;

                (iv) to approve forms of agreement for use under the Plan;

                (v) to determine the terms and conditions, not inconsistent with
the terms of the Plan, of any Award granted hereunder and of any Restricted
Stock Purchase Agreement. Such terms and conditions include, but are not limited
to, the exercise price, the time or times when Options, Stock Purchase Rights
and Stock Appreciation Rights may be exercised (which may be based on
performance criteria), any vesting, acceleration or waiver of forfeiture
provisions, and any restriction or limitation regarding any Option, Stock
Purchase Right, Stock Appreciation Right or Stock Award, or the Shares of Common
Stock relating thereto, based in each case on such factors as the Committee, in
its sole discretion, shall determine;

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                (vi) to construe and interpret the terms of the Plan, Awards
granted pursuant to the Plan and agreements entered into pursuant to the Plan;

                (vii) to prescribe, amend and rescind rules and regulations
relating to the Plan, including rules and regulations relating to sub-plans
established for the purpose of qualifying for preferred tax treatment under
foreign tax laws;

                (viii) to modify or amend each Award (subject to Section 19 of
the Plan), including the discretionary authority to extend the post-termination
exercisability period of Options, Stock Appreciation Rights and/or Stock
Purchase Rights longer than is otherwise provided for in the Plan and to
accelerate the time at which any outstanding Option, Stock Purchase Right or
Stock Appreciation Right may be exercised;

                (ix) to allow grantees to satisfy withholding tax obligations by
having the Company withhold from the Shares to be issued upon exercise of an
Option, Stock Appreciation Rights or Stock Purchase Rights that number of Shares
having a Fair Market Value equal to the amount required to be withheld, provided
that withholding is calculated at the minimum statutory withholding level. The
Fair Market Value of the Shares to be withheld shall be determined on the date
that the amount of tax to be withheld is to be determined. All determinations to
have Shares withheld for this purpose shall be made by the Committee in its
discretion;

                (x) to authorize any person to execute on behalf of the Company
any agreement entered into pursuant to the Plan and any instrument required to
effect the grant of an Award previously granted by the Committee; and

                (xi) to make all other determinations deemed necessary or
advisable for administering the Plan.

            (c) Effect of Committee's Decision. The Committee's decisions,
determinations and interpretations shall be final and binding on all holders of
Awards and Restricted Stock. Neither the Board nor the Committee, nor any member
or delegate thereof, shall be liable for any act, omission, interpretation,
construction or determination made in good faith in connection with the Plan,
and each of the foregoing shall be entitled in all cases to indemnification and
reimbursement by the Company in respect of any claim, loss, damage or expense
(including without limitation reasonable attorneys' fees) arising or resulting
therefrom to the fullest extent permitted by law and/or under any directors' and
officers' liability insurance coverage which may be in effect from time to time.

         5. ELIGIBILITY. Nonstatutory Stock Options, Stock Purchase Rights,
Stock Appreciation Rights, Stock Awards and Unrestricted Shares may be granted
to all Service Providers. Incentive Stock Options may be granted only to
Employees. Notwithstanding anything contained herein to the contrary, an Award
may be granted to a person who is not then a Service Provider; provided,
however, that the grant of such Award shall be conditioned upon such person
becoming a Service Provider at or prior to the time of the execution of the
agreement evidencing such Award.

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          6. LIMITATIONS.

             (a) Each Option shall be designated in the Option Agreement as
either an Incentive Stock Option or a Nonstatutory Stock Option. However,
notwithstanding such designation, if a single Employee becomes eligible in any
given year to exercise Incentive Stock Options for Shares having a Fair Market
Value in excess of $100,000; those Options representing the excess shall be
treated as Nonstatutory Stock Options. In the previous sentence, "Incentive
Stock Options" include Incentive Stock Options granted under the Prior Plans and
any other plan of the Company or any Parent or any Subsidiary. For the purpose
of deciding which Options apply to Shares that "exceed" the $100,000 limit,
Incentive Stock Options shall be taken into account in the same order as
granted. The Fair Market Value of the Shares shall be determined as of the time
the Option with respect to such Shares is granted.

             (b) None of the Plan, any Award or any agreement entered into
pursuant to the Plan shall confer upon a Participant any right with respect to
continuing the grantee's relationship as a Service Provider with the Company,
nor shall they interfere in any way with the Participant's right or the
Company's right to terminate such relationship at any time, with or without
cause.

          7. TERM OF THE PLAN. Subject to Section 23 of the Plan, the Plan shall
become effective upon its adoption by the Board. Unless terminated earlier under
Section 19 of the Plan, no Awards may be granted under the Plan after
November 30, 2015.

          8. TERM OF OPTIONS. The term of each Option shall be stated in the
applicable Option Agreement. In the case of an Incentive Stock Option, the term
shall be ten (10) years from the date of grant or such shorter term as may be
provided in the applicable Option Agreement. However, in the case of an
Incentive Stock Option granted to an Optionee who, at the time the Incentive
Stock Option is granted, owns, directly or indirectly, stock representing more
than ten percent (10%) of the total combined voting power of all classes of
stock of the Company or any Parent or Subsidiary, the term of the Incentive
Stock Option shall be five (5) years from the date of grant or such shorter term
as may be provided in the applicable Option Agreement. A Nonstatutory Stock
Option shall not be exercisable after the expiration of ten (10) years from the
date it is granted.

          9. OPTION EXERCISE PRICE; EXERCISABILITY.

             (a) Exercise Price. The per share exercise price for the Shares to
be issued pursuant to exercise of an Option shall be determined by the
Committee, subject to the following:

                 (i) In the case of an Incentive Stock Option

                     (A) granted to an Employee who, at the time the Incentive
Stock Option is granted, owns stock representing more than ten percent (10%) of
the voting power of all classes of stock of the Company or any Parent or
Subsidiary, the per Share exercise price shall be no less than 110% of the Fair
Market Value per Share on the date of grant, or

                     (B) granted to any Employee other than an Employee
described in paragraph (A) immediately above, the per Share exercise price shall
be no less than 100% of the Fair Market Value per Share on the date of grant.

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                (ii) The per Share exercise price of a Nonstatutory Stock
Option shall be determined by the Committee.

             (b) Exercise Period and Conditions. At the time that an Option is
granted, the Committee shall fix the period within which the Option may be
exercised and shall determine any conditions that must be satisfied before the
Option may be exercised.

         10. EXERCISE OF OPTIONS; CONSIDERATION.

             (a) Procedure for Exercise; Rights as a Shareholder. Any Option
granted hereunder shall be exercisable according to the terms of the Plan and at
such times and under such conditions as determined by the Committee and set
forth in the Option Agreement. An Option shall be deemed exercised when the
Company receives: (i) written or electronic notice of exercise (in accordance
with the Option Agreement) from the person entitled to exercise the Option, and
(ii) full payment for the Shares with respect to which the Option is exercised.
Full payment may consist of any consideration and method of payment authorized
by the Committee and permitted by the Option Agreement and Section 10(c) of the
Plan. Shares issued upon exercise of an Option shall be issued in the name of
the Optionee. Until the Shares are issued (as evidenced by the appropriate entry
on the books of the Company or of a duly authorized transfer agent of the
Company), no right to vote or receive dividends or any other rights as a
shareholder shall exist with respect to the Optioned Stock, notwithstanding the
exercise of the Option. The Company shall issue (or cause to be issued) such
Shares promptly after the Option is exercised. No adjustment will be made for a
dividend or other right for which the record date is prior to the date the
Shares are issued, except as provided in Section 16 of the Plan. Exercising an
Option in any manner shall decrease the number of Shares thereafter available,
both for purposes of the Plan and for sale under the Option, by the number of
Shares as to which the Option is exercised.

            (b) Termination of Relationship as a Service Provider. Except as may
be otherwise expressly provided herein or in the Option agreement, Options of
Participants shall terminate on the earlier of the date of the expiration of the
Option or three months after the date of the severance of the employment or
affiliation relationship between the Company and the Optionee for any reason,
for or without cause, other than death. Whether authorized leave of absence, or
absence on military or government service, shall constitute severance of the
employment or affiliation relationship between the Company and the Optionee
shall be determined by the Committee at the time thereof. Unless the Optionee's
Option agreement specifically addresses the matter and expressly provides
otherwise, after the severance of the employment or affiliation relationship
between the Company and the Optionee, the Optionee shall have the right, at any
time prior to the termination of the Option, to exercise the Option solely to
the extent the Optionee was entitled to exercise it immediately prior to the
date of such severance. In the event of the death of the holder of an Option
while in the employ or affiliation of the Company and before the date of
expiration of such Option, such Option shall terminate on the earlier of such
date of expiration or six months following the date of such death. After the
death of the Optionee, his executors, administrators or any person or persons to
whom his Option may be transferred by will or by the laws of descent and
distribution, shall have the right, at any time prior to such termination, to
exercise the Option, in whole (subject to the provisions of Paragraph 8 hereof,
but without regard to any limitation set forth in or imposed pursuant to
Paragraph 9 hereof) or in part. An employment or affiliation relationship
between the Company and the Optionee shall be deemed to exist during any period
in which the Optionee is employed by or affiliated with the Company, by any
Parent or Subsidiary, by a corporation issuing or assuming a common stock option
in a transaction to which Section 424(a) of the Code, applies, or by a Parent or
Subsidiary corporation of such corporation issuing or assuming a stock option
(and for this purpose, the phrase "corporation issuing or assuming a stock
option" shall be substituted for the word "Company" in the definitions of Parent
and Subsidiary specified in Section 2 of this Plan, and the parent-subsidiary
relationship shall be determined at the time of the corporate action described
in Section 424(a) of the Code).

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             (b) Form of Consideration. The Committee shall determine the
acceptable form of consideration for exercising an Option, including the method
of payment. In the case of an Incentive Stock Option, the Committee shall
determine the acceptable form of consideration at the time of grant. Such
consideration may consist entirely of:

                 (i) cash;

                 (ii) check;

                 (iii) other Shares which (A) have been owned by the Optionee
for more than six months on the date of surrender, and (B) have a Fair Market
Value on the date of surrender equal to the aggregate exercise price of the
Shares as to which said Option shall be exercised;

                 (iv) consideration received by the Company under a cashless
exercise program implemented by the Company in connection with the Plan;

                 (v) any combination of the foregoing methods of payment; or

                 (vi) such other consideration and method of payment for the
issuance of Shares to the extent permitted by Applicable Laws.

         11. STOCK PURCHASE RIGHTS.

             (a) Rights to Purchase. Stock Purchase Rights may be issued either
alone, in addition to, or in tandem with other Awards granted under the Plan
and/or cash awards made outside of the Plan. After the Committee determines that
it will offer Stock Purchase Rights under the Plan, it shall advise the offeree
in writing or electronically, by means of a Notice of Grant and/or a Restricted
Stock Purchase Agreement in the form determined by the Committee, of the terms,
conditions and restrictions related to the offer, including the number of Shares
that the offeree shall be entitled to purchase and the price to be paid for such
Shares. The offer shall be accepted by execution of a Restricted Stock Purchase
Agreement in the form determined by the Committee.

             (b) Repurchase Option. Unless the Committee determines otherwise,
the Restricted Stock Purchase Agreement shall grant the Company a repurchase
option exercisable upon the voluntary or involuntary termination of the
purchaser's service with the Company for any reason (including death or
disability). The purchase price for Shares repurchased pursuant to the
Restricted Stock Purchase Agreement shall be the original price paid by the
purchaser and may be paid by cancellation of any indebtedness of the purchaser
to the Company. The repurchase option shall lapse at a rate determined by the
Committee.

             (c) Other Provisions. The Restricted Stock Purchase Agreement shall
contain such other terms, provisions and conditions not inconsistent with the
Plan as may be determined by the Committee in its sole discretion.

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             (d) Rights as a Shareholder. Once the Stock Purchase Right is
exercised, the purchaser shall have the rights equivalent to those of a
shareholder, and shall be a shareholder when his or her purchase is entered upon
the records of the duly authorized transfer agent of the Company. No adjustment
will be made for a dividend or other right for which the record date is prior to
the date the Stock Purchase Right is exercised, except as provided in Section 16
of the Plan.

         12. STOCK AWARDS. The Committee may, in its sole discretion, grant (or
sell at par value or such higher purchase price as it determines) Shares to a
Service Provider subject to such terms and conditions as the Committee sets
forth in a Stock Award Agreement evidencing such grant. The grant of Stock
Awards shall be subject to the following provisions:

             (a) At the time a Stock Award is made, the Committee shall
establish a vesting period (the "Restricted Period") applicable to the Stock
Award Shares subject to such Stock Award. The Committee may, in its sole
discretion, at the time a grant is made, prescribe restrictions in addition to
the expiration of the Restricted Period, including the satisfaction of corporate
or individual performance objectives. None of the Stock Award Shares may be
sold, transferred, assigned, pledged or otherwise encumbered or disposed of
during the Restricted Period applicable to such Stock Award Shares or prior to
the satisfaction of any other restrictions prescribed by the Committee with
respect to such Stock Award Shares.

             (b) The Company shall issue, in the name of each Service Provider
to whom Stock Award Shares have been granted, stock certificates representing
the total number of Stock Award Shares granted to such person, as soon as
reasonably practicable after the grant. The Company, at the direction of the
Committee, shall hold such certificates, properly endorsed for transfer, for the
Stock Awardee's benefit until such time as the Stock Award Shares are forfeited
to the Company, or the restrictions lapse.

             (c) Unless otherwise provided by the Committee, holders of Stock
Award Shares shall have the right to vote such Shares and have the right to
receive any cash dividends with respect to such Shares. All distributions, if
any, received by a Stock Awardee with respect to Stock Award Shares as a result
of any stock split, stock distribution, combination of shares, or other similar
transaction shall be subject to the restrictions of this Section 12.

             (d) Unless otherwise provided by the Stock Award Agreement, any
Stock Award Shares granted to a Service Provider pursuant to the Plan shall be
forfeited if the Stock Awardee terminates employment or his consultancy
arrangement with the Company or its subsidiaries for any reason prior to the
expiration or termination of the applicable Restricted Period and the
satisfaction of any other conditions applicable to such Stock Award Shares. Upon
such forfeiture, the Stock Award Shares that are forfeited shall be retained in
the treasury of the Company and be available for subsequent awards under the
Plan.

             (e) Upon the expiration or termination of the Restricted Period and
the satisfaction of any other conditions prescribed by the Committee, the
restrictions applicable to the Stock Award Shares shall lapse and, at the Stock
Awardee's request, a stock certificate for the number of Stock Award Shares with
respect to which the restrictions have lapsed shall be delivered, free of all
such restrictions, to the Stock Awardee or his beneficiary or estate, as the
case may be.

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         13. UNRESTRICTED SHARES. The Committee may grant Unrestricted Shares in
accordance with the following provisions:

             (a) The Committee may cause the Company to grant Unrestricted
Shares to Service Providers at such time or times, in such amounts and for such
reasons as the Committee, in its sole discretion, shall determine. No payment
shall be required for Unrestricted Shares.

             (b) The Company shall issue, in the name of each Service Provider
to whom Unrestricted Shares have been granted, stock certificates representing
the total number of Unrestricted Shares granted to such individual, and shall
deliver such certificates to such Service Provider as soon as reasonably
practicable after the date of grant or on such later date as the Committee shall
determine at the time of grant.

         14. STOCK APPRECIATION RIGHTS. A Stock Appreciation Right may be
granted by the Committee either alone, in addition to, or in tandem with other
Awards granted under the Plan. Each Stock Appreciation Right granted under the
Plan shall be subject to the following terms and conditions:

             (a) Each Stock Appreciation Right shall relate to such number of
Shares as shall be determined by the Committee.

             (b) The Award Date (i.e., the date of grant) of a Stock
Appreciation Right shall be the date specified by the Committee, provided that
that date shall not be before the date on which the Stock Appreciation Right is
actually granted. The Award Date of a Stock Appreciation Right shall not be
prior to the date on which the recipient commences providing services as a
Service Provider. The term of each Stock Appreciation Right shall be determined
by the Committee, but shall not exceed ten years from the date of grant. Each
Stock Appreciation Right shall become exercisable at such time or times and in
such amount or amounts during its term as shall be determined by the Committee.
Unless otherwise specified by the Committee, once a Stock Appreciation Right
becomes exercisable, whether in full or in part, it shall remain so exercisable
until its expiration, forfeiture, termination or cancellation.

             (c) A Stock Appreciation Right may be exercised, in whole or in
part, by giving written notice to the Committee. As soon as practicable after
receipt of the written notice, the Company shall deliver to the person
exercising the Stock Appreciation Right stock certificates for the Shares to
which that person is entitled under Section 14(d) hereof.

             (d) A Stock Appreciation Right shall be exercisable for Shares
only. The number of Shares issuable upon the exercise of the Stock Appreciation
Right shall be determined by dividing:

                 (A) the number of Shares for which the Stock Appreciation Right
is exercised multiplied by the amount of the appreciation per Share (for this
purpose, the "appreciation per Share" shall be the amount by which the Fair
Market Value of a Share on the exercise date exceeds (x) in the case of a Stock
Appreciation Right granted in tandem with an Option, the exercise price or (y)
in the case of a Stock Appreciation Right granted alone without reference to an
Option, the Fair Market Value of a Share on the Award Date of the Stock
Appreciation Right); by

                 (B) the Fair Market Value of a Share on the exercise date.

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         15. NON-TRANSFERABILITY. Unless determined otherwise by the Committee,
an Option, Stock Purchase Right or Stock Appreciation Right may not be sold,
pledged, assigned, hypothecated, transferred, or disposed of in any manner other
than by will or by the laws of descent or distribution and may be exercised,
during the lifetime of the Participant, only by the Participant. If the
Committee makes an Option, Stock Purchase Right or Stock Appreciation Right
transferable, such Option, Stock Purchase Right or Stock Appreciation Right
shall contain such additional terms and conditions as the Committee deems
appropriate. Notwithstanding the foregoing, the Committee, in its sole
discretion, may provide in the Option Agreement regarding a given Option that
the Optionee may transfer, without consideration for the transfer, his or her
Nonstatutory Stock Options to members of his or her immediate family, to trusts
for the benefit of such family members, or to partnerships in which such family
members are the only partners, provided that the transferee agrees in writing
with the Company to be bound by all of the terms and conditions of this Plan and
the applicable Option. During the period when Shares of Restricted Stock and
Stock Award Shares are restricted (by virtue of vesting schedules or otherwise),
such Shares may not be sold, pledged, assigned, hypothecated, transferred, or
disposed of in any manner other than by will or by the laws of descent or
distribution.

         16. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION, DISSOLUTION, MERGER OR
ASSET SALE.

             (a) Changes in Capitalization. Subject to any required action by
the shareholders of the Company, the number of Shares of Common Stock covered by
each outstanding Option, Stock Purchase Right, Stock Appreciation Right and
Stock Award, the number of Shares of Restricted Stock outstanding and the number
of Shares of Common Stock which have been authorized for issuance under the Plan
but as to which no Options, Stock Purchase Rights, Stock Appreciation Rights or
Stock Awards have yet been granted or which have been returned to the Plan upon
cancellation or expiration of an Option, Stock Purchase Right, Stock
Appreciation Right, Restricted Stock Purchase Agreement or Stock Award, as well
as the price per share of Common Stock covered by each such outstanding Option,
Stock Purchase Right or Stock Appreciation Right, shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase or
decrease in the number of issued shares of Common Stock effected without receipt
of consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the
Committee, whose determination in that respect shall be final, binding and
conclusive. Except as expressly provided herein, no issuance by the Company of
shares of stock of any class, or securities convertible into shares of stock of
any class, shall affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of Shares of Common Stock subject to an Award
hereunder.

             (b) Corporate Transactions. If the Company merges or consolidates
with another corporation, whether or not the Company is a surviving corporation,
or if the Company is liquidated or sells or otherwise disposes of substantially
all its assets, or if any "person" (as that term is used in Section 13(d) and
14(d)(2) of the Exchange Act) is or becomes the beneficial owner, directly or
indirectly, of securities of the Company representing greater than 50% of the
combined voting power of the Company's then outstanding securities (each such
event a "Corporate Transaction Event") then (i) subject to the provisions of
clause (iii) below, after the effective date of such merger, consolidation,
liquidation, sale or other disposition, or change in beneficial ownership, as
the case may be, each holder of an outstanding Option, Stock Purchase Right or
Stock Appreciation Right shall be entitled, upon exercise of such Option, Stock
Purchase Right or Stock Appreciation Right to receive, in lieu of Shares of
Common Stock, the number and class or classes of shares of such stock or other
securities or property to which such holder would have been entitled if,
immediately prior to such merger, consolidation, liquidation, sale or other
disposition, or change in beneficial ownership, such holder had been the holder
of record of a number of Shares of Common Stock equal to the number of shares as
to which such Option, Stock Purchase Right and Stock Appreciation Right may be
exercised; (ii) the Board may waive any limitations set forth in or imposed
pursuant hereto so that all Options, Stock Purchase Rights and Stock
Appreciation Rights from and after a date prior to the effective date of such
Corporate Transaction Event, as specified by the Board, shall be exercisable in
full; and (iii) all outstanding Options, Stock Purchase Rights and Stock
Appreciation Rights may be canceled by the Board as of the effective date of any
such Corporate Transaction Event.

                                      -16-
<PAGE>

         In the event of a Corporate Transaction Event, then, absent a provision
to the contrary in any particular Restricted Stock Purchase Agreement or Stock
Award (in which case the terms of such Restricted Stock Purchase Agreement or
Stock Award shall supersede each of the provisions of this paragraph which are
inconsistent with such Restricted Stock Purchase Agreement or Stock Award), each
outstanding Restricted Stock Purchase Agreement and Stock Award shall be assumed
or an equivalent agreement or award substituted by the successor corporation or
a Parent or Subsidiary of the successor corporation. In the event that the
Committee determines that the successor corporation or a Parent or a Subsidiary
of the successor corporation has refused to assume or substitute an equivalent
agreement or award for each outstanding Restricted Stock Purchase Agreement and
Stock Award, all vesting periods and conditions under Restricted Stock Purchase
Agreements and Stock Awards shall be deemed to have been satisfied, so long as
at least ten days prior written notice of cancellation is provided to all
Participants and they are provided with an opportunity to exercise any Awards
simultaneously with or prior to the Corporate Transaction Event.

         Except as hereinbefore expressly provided, the issue by the Company of
shares of stock of any class, or securities convertible into shares of stock of
any class, for cash or property, or for labor or services either upon direct
sale or upon the exercise of rights or warrants to subscribe therefore, or upon
conversion of shares or obligations of the Company convertible into sub shares
or other securities, shall not affect, and no adjustment by reason thereof shall
be made with respect to, the number or price of Shares of Common Stock then
subject to outstanding Options, Stock Purchase Rights and Stock Appreciation
Rights.

         17. SUBSTITUTE OPTIONS. In the event that the Company, directly or
indirectly, acquires another entity, the Board may authorize the issuance of
stock options ("Substitute Options") to the individuals performing services for
the acquired entity in substitution of stock options previously granted to those
individuals in connection with their performance of services for such entity
upon such terms and conditions as the Board shall determine, taking into account
the conditions of Code Section 424(a), as from time to time amended or
superseded, in the case of a Substitute Option that is intended to be an
Incentive Stock Option. Shares of capital stock underlying Substitute Stock
Options shall not constitute Shares issued pursuant to the Plan for any purpose.

         18. DATE OF GRANT. The date of grant of an Option, Stock Purchase
Right, Stock Appreciation Right, Stock Award or Unrestricted Share shall be, for
all purposes, the date on which the Committee makes the determination granting
such Option, Stock Purchase Right, Stock Appreciation Right, Stock Award or
Unrestricted Share, or such other later date as is determined by the Committee.
Notice of the determination shall be provided to each grantee within a
reasonable time after the date of such grant.

                                      -17-
<PAGE>

         19. AMENDMENT AND TERMINATION OF THE PLAN. The Board may modify, revise
or terminate this Plan at any time and from time to time, subject to the
approval of the Company's stockholders to the extent required by Applicable
Laws; provided, however, that no such modification, revision, or termination of
the Plan may impair the rights of any Participant without the Participant's
written consent. All Awards granted under this Plan shall be subject to the
terms and provisions of this Plan and any amendment, modification or revision of
this Plan shall be deemed to amend, modify or revise all Awards outstanding
under this Plan at the time of such amendment, modification or revision.

         20. CONDITIONS UPON ISSUANCE OF SHARES.

             (a) Legal Compliance. Shares shall not be issued in connection with
the grant of any Stock Award or Unrestricted Share or the exercise of any
Option, Stock Purchase Right or Stock Appreciation Right unless such grant or
the exercise of such Option, Stock Purchase Right or Stock Appreciation Right
and the issuance and delivery of such Shares shall comply with Applicable Laws
and shall be further subject to the approval of counsel for the Company with
respect to such compliance.

             (b) Investment Representations. As a condition to the grant of any
Stock Award or Unrestricted Share or the exercise of any Option, Stock Purchase
Right or Stock Appreciation Right, the Company may require the person receiving
such Award or exercising such Option, Stock Purchase Right or Stock Appreciation
Right to represent and warrant at the time of any such exercise or grant that
the Shares are being purchased only for investment and without any present
intention to sell or distribute such Shares if, in the opinion of counsel for
the Company, such a representation is required.

             (c) Additional Conditions. The Committee shall have the authority
to condition the grant of any Award or rights under any Restricted Stock
Purchase Agreement in such other manner that the Committee determines to be
appropriate, provided that such condition is not inconsistent with the terms of
the Plan. Such conditions may include, among other things, obligations of
recipients to execute non-compete, non-solicitation and non-disclosure
covenants.

             (d) Trading Policy Restrictions. Option, Stock Purchase Right and
Stock Appreciation Right exercises and other Awards under the Plan shall be
subject to the terms and conditions of any insider trading policy established by
the Company or the Committee.

         21. INABILITY TO OBTAIN AUTHORITY. The inability of the Company to
obtain authority from any regulatory body having jurisdiction, which authority
is deemed by the Company's counsel to be necessary to the lawful issuance and
sale of any Shares hereunder, shall relieve the Company of any liability in
respect of the failure to issue or sell such Shares as to which such requisite
authority shall not have been obtained.

                                      -18-
<PAGE>

         22. RESERVATION OF SHARES. The Company, during the term of this Plan,
will at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.

         23. SHAREHOLDER APPROVAL. The Plan shall be subject to approval by the
shareholders of the Company within twelve (12) months after the date the Plan is
adopted. Such shareholder approval shall be obtained in the manner and to the
degree required under Applicable Laws. Notwithstanding any provision in the Plan
to the contrary, any exercise of an Option, Stock Purchase Right or Stock
Appreciation Right granted before the Company has obtained shareholder approval
of the Plan in accordance with this Section 23 shall be conditioned upon
obtaining such shareholder approval of the Plan in accordance with this Section
23.

         24. WITHHOLDING; NOTICE OF SALE. The Company shall be entitled to
withhold from any amounts payable to an Employee any amounts which the Company
determines, in its discretion, are required to be withheld under any Applicable
Law as a result of any action taken by a holder of an Award.

         25. ARBITRATION OF DISPUTES. Any controversy arising out of or relating
to this Plan or an Option or other Award Agreement shall be resolved by
arbitration conducted pursuant to the arbitration rules of the American
Arbitration Association. The arbitration shall be final and binding on the
parties.

         26. GOVERNING LAW. This Plan shall be governed by the laws of the State
of Delaware, without regard to conflict of law principles.

                                      -19-<PAGE>

Exhibit 10.2

                              CONSULTING AGREEMENT

This Agreement is made as of March 1, 2006 between Asta Funding, Inc. (the
"Company") and Herman Badillo, Esq., a non-independent director of the Company
(the "Consultant"). The Consultant has extensive experience regarding matters
related to the Company's business, and the Company seeks to benefit from the
Consultant's expertise by retaining the Consultant. The Consultant wishes to
perform consulting services for the Company. Accordingly, the Company and the
Consultant agree as follows:

   1. Services

      a. The Consultant will provide advice and consulting services to the
         Company as requested with respect to various matters related to the
         Company's business.

      b. The Consultant is an independent contractor and not an employee of the
         Company, and the relationship between the Company and the Consultant
         shall not be deemed a partnership or joint venture.

   2. Compensation

      As full consideration for the consulting services provided by the
      Consultant, the Company shall pay to the Consultant the sum of $5,000.00
      per month commencing March 1, 2006 with an initial payment of $15,000.00
      upon execution of the agreement.

   3. Competition

      The Consultant represents to the Company that the Consultant does not have
      any agreement to provide consulting services to any other party, firm, or
      company on matters relating to the scope of this Agreement, and will not
      enter into any such agreement during the term of this Agreement.

   4. Confidentiality

      a. The Company may, from time to time, in connection with work
         contemplated under this Agreement, disclose to Consultant certain
         confidential or proprietary information ("Confidential Information").
         Consultant agrees to use reasonable efforts to prevent the disclosure
         of any such Confidential Information to third parties. This obligation
         shall survive the termination of this Agreement.

      b. Confidential Information subject to paragraph 4(a) does not include
         information that (i) is or later becomes available to the public
         through no breach of this Agreement by the Consultant; (ii) is obtained
         by the Consultant from a third party who had the legal right to
         disclose the information to the Consultant; (iii) is already in the
         possession of the Consultant on the date this Agreement becomes
         effective; or (iv) is required to be disclosed by law, government
         regulation, or court order.

   5. Defense and Indemnification

      Consultant agrees to defend the Company against, and to indemnify and hold
      the Company harmless from, any claims or suits by a third party against
      the Company or any liabilities or judgments based thereon, arising from
      the Consultant's acts or omissions in the performance of this Agreement.

                                      -20-
<PAGE>

   6. Term and Termination

      a. This Agreement shall be for a term of twelve (12) months, renewable
         upon reasonable terms and conditions as may be agreed upon by the
         Company and the Consultant.

      b. Termination of the Agreement under paragraph 6(a) above shall not
         affect the Company's obligation to pay for services previously
         performed by the Consultant or expenses reasonably incurred by the
         Consultant for which the Consultant is entitled to reimbursement under
         this Agreement.

   7. Miscellaneous

      a. This Agreement constitutes the entire agreement between the Company and
         the Consultant with respect to the subject matters of this Agreement,
         and this Agreement replaces any previous agreements and discussions
         between the Company and Consultant relating to the subject matters
         hereof. This Agreement may not be modified in any respect by any verbal
         statement, representation, or agreement made by any employee, officer,
         or representative of the Company, or by any written documents unless it
         is signed by an officer of the Company and by the Consultant.

      b. If any term or provision of this Agreement is determined to be invalid,
         contrary to, or prohibited under applicable laws or regulation of any
         jurisdiction, such term or provision shall not be enforced but the
         remainder of the Agreement shall be valid and enforceable.

IN WITNESS WHEREOF, the parties have executed this Agreement effective the date
first stated above.

                                          ASTA FUNDING, INC.

                                      By: /s/Gary Stern
                                          -------------------
                                          Gary Stern
                                          President & Chief Executive Officer

                                          HERMAN BADILLO, ESQ.

                                      By: /s/ Herman Badillo
                                          -------------------
                                          Herman Badillo, Esq.

                                      -21-

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