EIGHTH AMENDMENT TO FOURTH AMENDED AND RESTATED LOAN AGREEMENT
EXHIBIT 99.2
EIGHTH AMENDMENT TO
FOURTH AMENDED AND RESTATED LOAN AGREEMENT
FOURTH AMENDED AND RESTATED LOAN AGREEMENT
THIS EIGHTH AMENDMENT TO FOURTH AMENDED AND RESTATED LOAN AGREEMENT (this “Amendment”)
is executed and entered into as of July 10, 2009, 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, XXXXXXXXXXX.XXX, LLC, a Delaware limited
liability company, ASTA COMMERCIAL, LLC, a Delaware limited liability company, and VATIV RECOVERY
SOLUTIONS, LLC, a Texas limited liability company, ASTA FUNDING ACQUISITION IV, LLC, a Delaware
limited liability company, PALISADES ACQUISITION XI, LLC, a Delaware limited liability company,
PALISADES ACQUISITION XII, LLC, a Delaware limited liability company, PALISADES ACQUISITION XIII,
LLC, a Delaware limited liability company, PALISADES ACQUISITION XIV, LLC, a Delaware limited
liability company, PALISADES ACQUISITION XV, LLC, a Delaware limited liability company, PALISADES
ACQUISITION XVII, LLC, a Delaware limited liability company, PALISADES ACQUISITION XVIII, LLC, a
Delaware limited liability company, CITIZENS LENDING GROUP LLC, a Delaware limited liability
company and VENTURA SERVICES, LLC, a Delaware 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; XXXXXXX XXXXX COMMERCIAL FINANCE
CORP. (“Xxxxxxx Xxxxx”), 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 are parties to 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 to, among other things, extend the Commitment Termination Date.
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 The following definitions as contained in Annex A attached to the Credit Agreement are
amended and restated in their entirety to read as follows:
“Commitment Termination Date” means the earliest of (a) December 31, 2009, (b)
the date of termination of Lenders’ obligations to make Advances or permit the existing
Revolving Loan to remain outstanding pursuant to Section 8.2(b), and (c) the date of
indefeasible prepayment in full by Borrowers of the Revolving Loan, and the permanent
reduction of all Commitments to zero dollars ($0).
“Revolving Loan Commitment” means (a) as to any Lender, the aggregate commitment of
such Lender to make Advances as set forth on Annex J to the Agreement or in the most
recent Assignment Agreement executed by such Lender and (b) as to all Lenders, the aggregate
commitment of all Lenders to make Advances which aggregate commitment shall not exceed the
following amounts: (1) Forty Million Dollars ($40,000,000) from the date hereof through July
30, 2009; (2) Thirty Four Million Dollars ($34,000,000) from July 31, 2009 through August
30, 2009; (3) Thirty Million Eight-Hundred Thousand Dollars ($30,800,000) from August 31,
2009 through September 29, 2009; (4) Twenty Two Million Nine-Hundred Thousand Dollars
($22,900,000) from September 30, 2009 through October 30, 2009; (5) Fifteen Million Dollars
($15,000,000) from October 31, 2009 through November 29, 2009; (6) Seven Million
Four-Hundred Thousand Dollars ($7,400,000) from November 30, 2009 through December 30, 2009;
and (6) Zero Dollars ($0) on December 31, 2009.
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2.2 Annex J attached to the Credit Agreement is hereby deleted in its entirety and
replaced with the Replacement Annex J attached to this Amendment as Exhibit A.
2.3 Section 1.1(a)(ii) of the Credit Agreement is amended and restated in its entirety as
follows:
(i) Use of Advances to finance Portfolio purchases in excess of $7,500,000 shall
require the consent of the Administrative Agent and use of Advances to finance Portfolio
purchases in excess of (a) $15,000,000 in the aggregate as of July 31, 2009 and August 31,
2009; (b) $8,000,000 in the aggregate as of September 30, 2009; (c) $6,000,000 in the
aggregate as of October 31, 2009 and November 30, 2009; and (d) $2,000,000 in the aggregate
as of December 31, 2009, during any 120 day period shall require the consent of the
Requisite Lenders. In connection with such purchases, Borrowers shall deliver to
Administrative Agent and Requisite Lenders, if applicable, the Portfolio Proposal relating
to such purchases. For purposes of this Section 1.1(a)(ii) only, any Requisite
Lenders that have not responded within 4 Business Days of receipt of a request for their
consent for the purchase of Portfolios in excess of such amounts set forth above shall be
deemed to have consented to such purchase. Borrowers agree not to intentionally propose,
modify or structure (or permit to be structured) any Portfolio purchases from any one or
more sellers or its affiliates, whether as a single transaction or a series of transactions,
for the purpose of evading the requirements of this Section 1.1(a)(ii) to obtain the
consent of Administrative Agent or Requisite Lenders, as the case may be. Without limiting
the foregoing, any Portfolio purchase occurring within 120 days of any other Portfolio
purchase or purchases shall be included for purposes of determining whether the consent of
the Administrative Agent or Requisite Lenders is required under this Section
1.1(a)(ii). Notwithstanding anything in this Section to the contrary, a Borrower may
acquire a Rejected Portfolio having a purchase price in excess of the amount set forth in
this Section without the consent of the Administrative Agent or the Requisite Lenders if the
purchase is made with Borrowers’ own cash or borrowings that are made without including the
Rejected Portfolio as an Eligible New Portfolio in the Borrowing Base, and if the Rejected
Portfolio is subject to a security interest or Lien in favor of Collateral Agent, for the
benefit of itself, the Agents and Lenders, to secure the Obligations. Without conferring
approval rights upon Administrative Agent (except as otherwise provided in this Section
1.1(a)(ii)), the applicable Borrower shall deliver to Administrative Agent, upon
Administrative Agent’s request, such information (as is reasonably available to the
applicable Borrower) relating to the purchase of a Portfolio as Administrative Agent may
reasonably request (including any available Portfolio Acquisition Documents) within a
reasonable period of time following the applicable Borrower’s purchase of such Portfolio.
2.4 Section 1.4(a) of the Credit Agreement is amended and restated in its entirety as follows:
(a) Borrowers shall pay interest to Administrative Agent, for the ratable benefit of
Lenders in accordance with the Revolving Loan being made by each Lender, in arrears on each
applicable Interest Payment Date, at the following rates: the Base Rate plus the Applicable
Base Rate Margin per annum or, at the election of Borrower
Representative, the applicable LIBOR Rate plus the Applicable LIBOR Margin per annum,
based on the aggregate Advances outstanding from time to time; provided, however, at no time
shall the interest rate under this Section 1.4(a) be less than five hundred fifty (550)
basis points per annum.
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Effective as of the date hereof, the Applicable Margin for (i) Base Rate Loans shall be
two hundred basis points (200) and (ii) LIBOR Loans shall be four hundred basis points
(400).
2.5 Annex G., Subsections (a) Minimum Tangible Net Worth and (d) No Net
Loss of the Credit Agreement are hereby amended and restated in their entirety as follows:
(a) Minimum Tangible Net Worth. Asta Funding and its Subsidiaries on a
consolidated basis shall maintain at all times during each Fiscal Quarter a minimum Tangible
Net Worth of not less than $175,000,000 plus fifty percent (50%) of cumulative net income
reported after June 30, 2009.
(d) No Net Loss. Asta Funding and its Subsidiaries shall have no net loss on a
consolidated basis during any Fiscal Year, provided however, for Fiscal Year ending
September 30, 2009 only, a net loss not to exceed $10,000,000 will be permitted under this
Subsection (d). For purposes of computing net loss of Asta Funding and its Subsidiaries,
the net income of any Non-Credit Party Affiliate (to the extent such net income is greater
than zero) shall be excluded from such computation.
2.6 Field Examination. Notwithstanding anything to the contrary herein, the required field examination pursuant to
the Credit Agreement scheduled for October, 2009 is hereby waived.
2.7 Rejected Portfolio Purchase/Non-Recourse Investments. Notwithstanding anything in
the Credit Agreement to the contrary, any Non-Recourse Non-Credit Party Loan and/or Non-Recourse
Investment shall require the approval of all Lenders.
2.8 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. REAFFIRMATION OF SECURITY INTEREST AND GUARANTIES.
The Credit Parties acknowledge and agree that the Lien and security interest in the Collateral
granted by the Credit Parties to the Collateral Agent, for the benefit of the Agents and the
Lenders, pursuant to the Collateral Documents is and continues to be first in priority. The
provisions of this Section 3 are intended to acknowledge the Liens and security interests granted
pursuant to the Collateral Documents. The provisions of this Section 3 shall be deemed to ratify
the existing Liens and security interests of the Collateral Agent, for the benefit of the
Agents and the Lenders, in the Collateral to the extent such Liens and security interests existed
prior to the date hereof. The Guarantors also hereby reaffirm all of the terms and conditions in
and to the Guaranties.
SECTION 4. 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.
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SECTION 5. FEES.
The Borrowers shall pay to Administrative Agent, for the account of the Lenders, the fees
described in the fee letter of even date herewith. In addition, the Borrowers shall reimburse
Agents for all reasonable out-of-pocket fees, costs and expenses, including reasonable attorneys’
fees, costs and expenses of counsel in connection with the preparation and negotiation of this
Amendment and related documents.
SECTION 6. COVENANTS.
6.1 This Amendment shall be governed by the terms and provisions of the Credit Agreement.
6.2 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.
6.3 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.
6.4 In order for this Amendment to become effective, the following conditions must be
satisfied and the following items must be received by Administrative Agent in form and substance
satisfactory to Administrative Agent on or prior to the date that the Credit Parties shall execute
and deliver this Amendment to Lenders:
A. Amended and Restated Revolving Notes. Duly executed originals of amended and restated Revolving Notes payable to the order of
each Revolving Lender dated the date of the Amendment.
B. Other Documents. Such other information, confirmations, certificates, documents and agreements respecting
any Credit Party as Administrative Agent may, in its reasonable discretion, request.
C. Amendment Fee. Administrative Agent, shall have received, on behalf of Lenders, an executed copy of the fee
letter and payment of the amendment fee described therein.
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SECTION 7. 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 8. 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.
[Signature Pages Follow]
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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 |
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| By: | /s/ Xxxx Xxxxx | |||
| Name: | Xxxx Xxxxx | |||
| Title: | Manager | |||
| GUARANTORS: | ASTA FUNDING, INC. |
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| By: | /s/ Xxxx Xxxxx | |||
| Name: | Xxxx Xxxxx | |||
| Title: | President and Chief Executive Officer | |||
| COMPUTER FINANCE, LLC XXXXXXXXXXX.XXX, LLC ASTA COMMERCIAL, LLC VATIV RECOVERY SOLUTIONS, LLC ASTA FUNDING ACQUISITION IV, LLC PALISADES ACQUISITION XI, LLC PALISADES ACQUISITION XII, LLC PALISADES ACQUISITION XIII, LLC PALISADES ACQUISITION XIV, LLC PALISADES ACQUISITION XV, LLC PALISADES ACQUISITION XVII, LLC PALISADES ACQUISITION XVIII, LLC CITIZENS LENDING GROUP, LLC VENTURA SERVICES, LLC |
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| By: | /s/ Xxxx Xxxxx | |||
| Name: | Xxxx Xxxxx | |||
| Title: | Manager | |||
Eighth Amendment to Fourth Amended and Restated Loan Agreement
| AGENT: | ISRAEL DISCOUNT BANK OF NEW YORK,
as Administrative Agent, Collateral Agent and Co-Lead Arranger |
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| By: | /s/ Xxxxxxx Xxxxx | |||
| Name: | Xxxxxxx Xxxxx | |||
| Title: | FVP | |||
| By: | /s/ Xxxxxxx X. Xxxxxxxx | |||
| Name: | Xxxxxxx X. Xxxxxxxx | |||
| Title: | Senior Vice President | |||
Eighth Amendment to Fourth Amended and Restated Loan Agreement
|
XXXXXXX XXXXX COMMERCIAL FINANCE CORP., as Co-Administrative Agent and Co-Lead Arranger |
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| By: | /s/ Xxxxxx X. Xxxxxx | |||
| Name: | Xxxxxx X. Xxxxxx | |||
| Title: | Vice President | |||
Eighth Amendment to Fourth Amended and Restated Loan Agreement
| LENDERS: | ISRAEL DISCOUNT BANK OF NEW YORK, as Lender |
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| By: | /s/ Xxxxxxx Xxxxx | |||
| Name: | Xxxxxxx Xxxxx | |||
| Title: | FVP | |||
| By: | /s/ Xxxxxxx X. Xxxxxxxx | |||
| Name: | Xxxxxxx X. Xxxxxxxx | |||
| Title: | Senior Vice President | |||
Eighth Amendment to Fourth Amended and Restated Loan Agreement
|
XXXXXXX XXXXX COMMERCIAL FINANCE CORP., as Lender |
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| By: | /s/ Xxxxxx X. Xxxxxx | |||
| Print Name: | Xxxxxx X. Xxxxxx | |||
| Print Title: | Vice President | |||
Eighth Amendment to Fourth Amended and Restated Loan Agreement
| BMO CAPITAL MARKETS FINANCING, INC., as Lender |
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| By: | /s/ Xxxx Xxxxxx | |||
| Print Name: | Xxxx Xxxxxx | |||
| Print Title: | Vice President | |||
Eighth Amendment to Fourth Amended and Restated Loan Agreement
| BANK LEUMI USA, as Lender |
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| By: | /s/ Xxxx XxXxxxx | |||
| Print Name: | Xxxx XxXxxxx | |||
| Print Title: | Vice President | |||
Eighth Amendment to Fourth Amended and Restated Loan Agreement
| THE BERKSHIRE BANK, as Lender |
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| By: | /s/ Xxxxx Xxxxxx | |||
| Print Name: | Xxxxx Xxxxxx | |||
| Print Title: | VP | |||
Eighth Amendment to Fourth Amended and Restated Loan Agreement
| SIGNATURE BANK, as Lender |
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| By: | /s/ Xxxxxx X. X’Xxxxxx | |||
| Print Name: | Xxxxxx X. X'Xxxxxx | |||
| Print Title: | Senior Vice President & Senior Lender | |||
Eighth Amendment to Fourth Amended and Restated Loan Agreement
| PROVIDENT BANK, as Lender |
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| By: | /s/ Xxxxxx Xxxxx | |||
| Print Name: | Xxxxxx Xxxxx | |||
| Print Title: | Vice President | |||
Eighth Amendment to Fourth Amended and Restated Loan Agreement
EXHIBIT A
TO EIGHTH AMENDMENT TO
FOURTH AMENDED AND RESTATED LOAN
AGREEMENT
REPLACEMENT ANNEX J
(from Annex A – Commitments definition)
to
FOURTH AMENDED AND RESTATED LOAN AGREEMENT
| Revolving Loan | Revolving Loan | Revolving Loan | Revolving Loan | Revolving Loan | Revolving Loan | |||||||||||||||||||
| Commitment | Commitment as | Commitment as of | Commitment as of | Commitment as of | Commitment as of | |||||||||||||||||||
| from the date | of July 31, 2009, | August 31, 2009, | September 30, 2009, | October 31, 2009, | November 30, 2009, | |||||||||||||||||||
| hereof through | through | through | through | through | through | |||||||||||||||||||
| Lender | July 30, 2009 | August 30, 2009 | September 29, 2009 | October 30, 2009 | November 29, 2009 | December 30, 2009 | ||||||||||||||||||
|
Israel Discount Bank of New York
|
$ | 10,285,714.28 | $ | 8,742,857.14 | $ | 7,920,000.00 | $ | 5,888,571.42 | $ | 3,857,142.86 | $ | 1,902,857.14 | ||||||||||||
|
|
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Xxxxxxx Xxxxx Commercial Finance Corp.
|
$ | 6,857,142.86 | $ | 5,828,571.43 | $ | 5,280,000.00 | $ | 3,925,714.29 | $ | 2,571,428.57 | $ | 1,268,571.43 | ||||||||||||
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Bank Leumi USA
|
$ | 4,571,428.57 | $ | 3,885,714.29 | $ | 3,520,000.00 | $ | 2,617,142.86 | $ | 1,714,285.71 | $ | 845,714.29 | ||||||||||||
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BMO Capital Markets Financing, Inc.
|
$ | 8,000,000.00 | $ | 6,800,000.00 | $ | 6,160,000.00 | $ | 4,580,000.00 | $ | 3,000,000.00 | $ | 1,480,000.00 | ||||||||||||
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The Berkshire Bank
|
$ | 2,285,714.29 | $ | 1,942,857.14 | $ | 1,760,000.00 | $ | 1,308,571.43 | $ | 857,142.86 | $ | 422,857,14 | ||||||||||||
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Signature Bank
|
$ | 4,571,428.57 | $ | 3,885,714.29 | $ | 3,520,000.00 | $ | 2,617,142.86 | $ | 1,714,285.71 | $ | 845,714.29 | ||||||||||||
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Provident Bank
|
$ | 3,428,571.43 | $ | 2,914,285.71 | $ | 2,640,000.00 | $ | 1,962,857.14 | $ | 1,285,714.29 | $ | 634,285.71 | ||||||||||||
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Total
|
$ | 40,000,000.00 | $ | 34,000,000.00 | $ | 30,800,000.00 | $ | 22,900,000.00 | $ | 15,000,000.00 | $ | 7,400,000.00 | ||||||||||||
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On December 31, 2009, all Commitments will be Zero ($0) Dollars.
