THIRD AMENDMENT TO THE RECEIVABLES FINANCING AGREEMENT
Exhibit 10.1
THIRD AMENDMENT TO THE
RECEIVABLES FINANCING AGREEMENT
RECEIVABLES FINANCING AGREEMENT
THIS THIRD AMENDMENT TO THE RECEIVABLES FINANCING AGREEMENT, dated as of May 19, 2008 (this
“Amendment”), is entered into by and among PALISADES ACQUISITION XVI, LLC, a Delaware
limited liability company (the “Borrower”), PALISADES COLLECTION, L.L.C., a Delaware
limited liability company (the “Servicer”), ASTA FUNDING, INC. (“Asta”), FAIRWAY
FINANCE COMPANY, LLC ( the “Lender”), BMO CAPITAL MARKETS CORP. (“BMO CM”), as
Administrator for the Lender (in such capacity, the “Administrator”) and as collateral
agent for the Secured Parties (in such capacity, the “Collateral Agent”), and BANK OF
MONTREAL (“BMO”), as liquidity agent for the Liquidity Providers (in such capacity, the
“Liquidity Agent”). Capitalized terms used and not otherwise defined herein are used as
defined in the Receivables Financing Agreement, dated as of March 2, 2007 (as amended, supplemented
or otherwise modified from time to time, the “Receivables Financing Agreement”), among the
Borrower, the Servicer, the Lender, the Administrator, the Collateral Agent and the Liquidity
Agent.
WHEREAS, the parties hereto desire to amend the Receivables Financing Agreement in certain
respects as provided herein;
NOW THEREFORE, in consideration of the premises and other material covenants contained herein,
the parties hereto agree as follows:
SECTION 1. Amendments. The Receivables Financing Agreement is hereby amended as
follows:
1.1 The definition of “Alternate Reference Rate” as set forth in Section 1.1 of the
Receivables Financing Agreement is hereby deleted and replaced in its entirety as follows:
““Alternate Reference Rate” means, on any date, a fluctuating rate of
interest per annum equal to the sum of (i)(a) prior to a Interest Adjustment
Date, 3.20% and (b) on or after the Interest Adjustment Date, 2.20% and (ii) the
higher of:
(A) the rate of interest most recently announced by BMO at its
principal office in Chicago, Illinois as its prime rate (it being understood
that at any one time there shall exist only one such prime rate so
announced), which rate is not necessarily intended to be the lowest rate of
interest determined by BMO in connection with extensions of credit; or
(B) the Federal Funds Rate most recently determined by BMO plus 0.50%
per annum.”
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1.2 The definition of “Bank Rate” as set forth in Section 1.1 of the Receivables
Financing Agreement is hereby deleted and replaced in its entirety as follows:
““Bank Rate” for any Interest Period means an interest rate per
annum equal to the Eurodollar Rate (Reserve Adjusted) for such Interest Period;
provided, however, that if (x) it shall become unlawful for any
Liquidity Provider to obtain funds in the London interbank eurodollar market in
order to make, fund or maintain any Loan hereunder, or if such funds shall not be
reasonably available to Administrator or any Liquidity Provider, or (y) there shall
not be time prior to the commencement of an applicable Interest Period to determine
a Eurodollar Rate in accordance with its terms or the “Bank Rate” shall apply other
than at the first day of the Interest Period, then the “Bank Rate” shall be equal to
the weighted average of the Alternate Reference Rates in effect for each day during
the remainder of such Interest Period.”
1.3 Each reference to “January 1, 2008” in the definition for “Collection Rate” is
hereby replaced with “May 1, 2008”.
1.4 The phrase “within three years” in the definition for “Discounted Balance” is
hereby replaced with “within forty-seven (47) months”.
1.5 The following definition is hereby added to Section 1.1 of the Receivables Financing
Agreement after the definition for “Indemnified Party”:
““Interest Adjustment Date” means the Borrower shall have received at
least $20,000,000 in aggregate cash capital contributions after May 9, 2008 that
have been used to repay the principal amount of the Loans.”
1.6 The reference to “2%” in the last paragraph of Section 3.1 of the Receivables Financing
Agreement is hereby replaced with “2.3%”.
1.7 Section 4.3 of the Receivables Financing Agreement is hereby deleted and replaced in its
entirety as follows:
“Section 4.3 Accounts. The Collateral Agent may, and at the direction
of the Administrator shall, at any time, take dominion and control of the Collection
Account.”
1.8 The following is hereby added as a new Section 9.1.12 of the Receivables Financing
Agreement:
“9.1.12 Additional Opinion of Counsel. The Borrower shall furnish to
the Administrator, no later than May 24, 2008, an opinion of counsel relating to
certain substantive consolidation matters, in form and substance reasonably
satisfactory to the Administrator.”
1.9 Section 10.1.14 of the Receivables Financing Agreement is hereby deleted and replaced in
its entirety as follows:
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“10.1.14 Rolling Collection Rate. The Rolling Collection Rate (i) for
(a) the May 2008 Collection Period is less than 85%, (b) the June 2008 Collection
Period is less than 85%, (c) the July 2008 Collection Period is less than 85% or (d)
any other Collection Period (commencing with the August 2008 Collection Period) is
less than 90% or (ii) (a) for the June and July 2008 Collection Period, is less than
90%, (b) for the July and August 2008 Collection Period, is less than 90%, (c) for
the August and September 2008 Collection Period, is less than 100% or (d) any two
consecutive Collection Periods (commencing with the September and October 2008
Collection Periods), is less than 100%.”
2.0 The following is hereby added as a new Section 10.1.15 of the Receivables Financing
Agreement:
“10.1.15 Certain Additional Financial Information. (a) The value of
the Eligible Receivables (as determined in accordance with GAAP) as of March 31,
2008 is not at least $230,000,000 or is restated downward after May 19, 2008 and (b)
the net income of Asta (as determined in accordance with GAAP) for the period
beginning on October 1, 2007 and ending on March 31, 2008 is less than $5,000,000.”
SECTION 2. Receivables Financing Agreement in Full Force and Effect as Amended.
Except as specifically amended hereby, the Receivables Financing Agreement shall remain in
full force and effect. All references to the Receivables Financing Agreement shall be deemed to
mean the Receivables Financing Agreement as modified hereby. This Amendment shall not constitute a
novation of the Receivables Financing Agreement, but shall constitute an amendment thereof. The
parties hereto agree to be bound by the terms and conditions of the Receivables Financing
Agreement, as amended by this Amendment, as though such terms and conditions were set forth herein.
SECTION 3. Miscellaneous.
A. On and as of the date hereof, the Borrower hereby confirms, reaffirms and restates the
representations and warranties set forth in Section 8.1 of the Receivables Financing Agreement
mutatis mutandis, except to the extent that such representations and warranties
expressly relate to a specific earlier date in which case the Borrower hereby confirms, reaffirms
and restates such representations and warranties as of such earlier date. Each of the Borrower,
the Servicer and Asta hereby represent and warrant, as of the date hereof, that the value of the
Eligible Receivables (as determined in accordance with GAAP) owned by the Borrower as of March 31,
2008 is at least $230,000,000. Asta hereby represents and warrants, as of the date hereof, that
its net income (as determined in accordance with GAAP) for the period beginning on October 1, 2007
and ending on March 31, 2008 is not less than $5,000,000.
B. This Amendment may be executed in any number of counterparts, and by the different parties
hereto on the same or separate counterparts, each of which when so executed
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and delivered shall be deemed to be an original instrument but all of which together shall
constitute one and the same agreement.
C. The effectiveness of this Amendment is subject to the following condition precedents:
| i. | the Administrator shall have received counterparts of this Amendment, duly executed by all parties hereto; and | ||
| ii. | the Borrower shall have reimbursed the Administrator for all its reasonable costs and out-of-pocket expenses incurred in connection with the preparation and delivery of this Amendment, including, without limitation, the reasonable fees and disbursements of counsel to the Administrator. |
D. The descriptive headings of the various sections of this Amendment are inserted for
convenience of reference only and shall not be deemed to affect the meaning or construction of any
of the provisions hereof.
E. This Amendment may not be amended or otherwise modified except as provided in the
Receivables Financing Agreement.
F. Each of the Administrator and the Lender do not waive and have not waived, and hereby
expressly reserve, its right at any time to take any and all actions, and to exercise any and all
remedies, authorized or permitted under the Receivables Financing Agreement, as amended, or any of
the other Transaction Documents, or available at law or equity or otherwise.
G. Any provision in this Amendment which is prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction.
H. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO ANY OTHERWISE APPLICABLE CONFLICTS OF LAW
PRINCIPLES (OTHER THAN THOSE SET FORTH IN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE
STATE OF NEW YORK).
I. EACH OF THE PARTIES HERETO HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY
RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF,
UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT, OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF BORROWER, ASTA,
THE ORIGINATOR, THE SERVICER, THE ADMINISTRATOR, THE COLLATERAL AGENT, LENDER OR ANY OTHER AFFECTED
PARTY. EACH OF BORROWER AND THE SERVICER ACKNOWLEDGES AND AGREES THAT IT HAS
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RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION (AND EACH OTHER PROVISION OF
EACH OTHER TRANSACTION DOCUMENT TO WHICH IT IS A PARTY) AND THAT THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE OTHER PARTIES ENTERING INTO THIS AGREEMENT AND EACH SUCH OTHER TRANSACTION
DOCUMENT.
J. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT MAY BE BROUGHT IN THE COURTS
OF THE STATE OF NEW YORK OR OF THE UNITED STATES FEDERAL COURT SITTING IN NEW YORK, NEW YORK, AND
BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE BORROWER AND THE SERVICER CONSENTS, FOR
ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF
THE BORROWER AND THE SERVICER IRREVOCABLY WAIVES, TO THE MAXIMUM EXTENT PERMITTED BY LAW, ANY
OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS, THAT IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH
JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO.
[Signature Pages Follow]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and
delivered by their proper and duly authorized officers as of the 21st of December, 2007.
| PALISADES ACQUISITION XVI, LLC, as Borrower |
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| By: | /s/ Xxxxxxxx Xxxxx | |||
| Name: | Xxxxxxxx Xxxxx | |||
| Title: | Manager | |||
| BMO CAPITAL MARKET CORP., as Administrator and as Collateral Agent |
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| By: | /s/ Xxxx Xxxxxxx | |||
| Name: | Xxxx Xxxxxxx | |||
| Title: | Managing Director | |||
| FAIRWAY FINANCE COMPANY, LLC, as Lender |
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| By: | /s/ Xxxxxx X. Xxxxxxx | |||
| Name: | Xxxxxx X. Xxxxxxx | |||
| Title: | Vice President | |||
| PALISADES COLLECTION, L.L.C, as Servicer |
||||
| By: | /s/ Xxxxxxxx Xxxxx | |||
| Name: | Xxxxxxxx Xxxxx | |||
| Title: | Manager | |||
| ASTA FUNDING, INC. |
||||
| By: | /s/ Xxxxxxxx Xxxxx | |||
| Name: | Xxxxxxxx Xxxxx | |||
| Title: | Chief Financial Officer | |||
| BANK OF MONTREAL, as Liquidity Agent |
||||
| By: | /s/ Xxxxxx Xxxx | |||
| Name: | Xxxxxx Xxxx | |||
| Title: | Vice President | |||
