Attached files
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EX-10.1 - EXHIBIT 10.1 - ASTA FUNDING INC | c07556exv10w1.htm |
EX-10.2 - EXHIBIT 10.2 - ASTA FUNDING INC | c07556exv10w2.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 26, 2010
ASTA FUNDING, INC.
(Exact name of registrant as specified in its charter)
Delaware | 0-26906 | 22-3388607 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
210 Sylvan Avenue, Englewood Cliffs, New Jersey |
07632 |
|
(Address of principal executive offices) | (Zip Code) |
Registrants telephone number, including area code: 201-567-5648
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 1.01. Entry into a Material Definitive Agreement.
On October 26, 2010, Palisades Acquisition XVI, LLC (Palisades XVI), a subsidiary of Asta
Funding, Inc. (the Company, we or us) entered into the Fifth Amendment to the Receivables
Financing Agreement (the Fifth Amendment) with Palisades Collection, L.L.C. (the Servicer),
Fairway Finance Company, LLC (the Lender), BMO Capital Markets Corp., as administrator and as
collateral agent (BMO CM), and the Bank of Montreal, as liquidity agent (the Liquidity Agent).
The Fifth Amendment amends certain terms of the Receivables Financing Agreement, dated as of March
2, 2007, by and among Palisades XVI, the Servicer, the Lender, BMO CM
and the Liquidity Agent (as
amended, the Receivables Financing Agreement). The effective date of the Fifth Amendment is
October 14, 2010. The Fifth Amendment (i) extends the expiration date of the Receivables Financing
Agreement to April 30, 2014, (ii) reduces the minimum monthly total payment to $750,000, (iii)
accelerates the Companys guarantee credit enhancement of $8,700,000, which was paid upon execution
of the Fifth Amendment, (iv) eliminates the Companys guarantee of repayment of the loans
outstanding by Palisades XVI, and (v) revises the definition of
Borrowing Base Deficit, as defined in the Receivables
Financing Agreement, to mean
the excess, if any, of 105% of the loans outstanding over the borrowing base.
In
connection with the Fifth Amendment, on October 26, 2010, we entered into the Omnibus
Termination Agreement (the Termination Agreement) with Palisades XVI, BMO CM, and each guarantor
set forth therein. The Termination Agreement provides that, upon payment of $8,700,000 to the
Lender and execution of the Fifth Amendment, the following
agreements, which were entered into by the Company and certain of its
affiliated entities in connection with the guaranty of the outstanding loans under the Receivables Financing
Agreement, were terminated: (i) the Subordinated Limited Recourse Guaranty Agreement, dated February 20, 2009, among us, our
subsidiaries, and BMO CM; (ii) the Subordinated Guarantor Security Agreement, dated February 20,
2009, among us, our subsidiaries and BMO CM; (iii) the Limited Recourse Guaranty Agreement, dated
as of February 20, 2009, among us, our subsidiaries and BMO CM; and (iv) the Intercreditor
Agreement, dated as of February 20, 2009, between us and BMO CM. The Termination Agreement is
effective as of October 14, 2010.
The descriptions of the Fifth Amendment and the Termination Agreement set forth above are qualified
in their entirety by reference to copies of such agreements filed as exhibits to this report and
incorporated herein by this reference. Any capitalized terms used in this report but not otherwise
defined shall have the meanings set forth in the Fifth Amendment and the Termination Agreement, as
applicable.
Item 1.02. Termination of a Material Definitive Agreement.
The information set forth above in Item 1.01 of this current report on Form 8-K regarding the Fifth
Amendment and Termination Agreement is hereby incorporated into this Item 1.02 by reference.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet
Arrangement of a Registrant.
The information set forth above in Item 1.01 of this current report on Form 8-K regarding the Fifth
Amendment and Termination Agreement is hereby incorporated into this Item 2.03 by reference.
Item 9.01 Financial Statements and Exhibits.
Exhibit | ||||
No. | Description | |||
10.1 | Fifth Amendment to the Receivables Financing Agreement, by and
among Palisades Acquisition XVI, LLC, Palisades Collection,
L.L.C., Fairway Finance Company, LLC, BMO Capital Markets Corp.,
as administrator and as collateral agent, and the Bank of
Montreal, as liquidity agent. |
|||
10.2 | Omnibus Termination Agreement, by and among Palisades Acquisition
XVI, LLC, BMO Capital Markets Corp., as collateral agent, Asta
Group, Incorporated, and each guarantor set forth therein. |
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SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly
caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
ASTA FUNDING, INC. | ||||
Date: November 1, 2010 | ||||
By:
|
/s/ Robert J. Michel | |||
Robert J. Michel |
||||
Chief Financial Officer |
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EXHIBIT INDEX
Exhibit No. | Description | |||
10.1 | Fifth Amendment to the Receivables Financing Agreement |
|||
10.2 | Omnibus Termination Agreement |
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