EX-10.3: FOURTH AMENDMENT TO FOURTH AMENDED AND RESTATED LOAN AGREEMENT

EXHIBIT 10.3

EXECUTION COPY

FOURTH AMENDMENT TO
FOURTH AMENDED AND RESTATED LOAN AGREEMENT

     THIS FOURTH AMENDMENT TO FOURTH AMENDED AND RESTATED LOAN AGREEMENT (this “Amendment”) is executed and entered into as of May 10, 2007, by and among ASTA FUNDING ACQUISITION I, LLC, a Delaware limited liability company, ASTA FUNDING ACQUISITION II, LLC, a Delaware limited liability company, PALISADES COLLECTION, L.L.C., a Delaware limited liability company, PALISADES ACQUISITION I, LLC, a Delaware limited liability company, PALISADES ACQUISITION II, LLC, a Delaware limited liability company, PALISADES ACQUISITION IV, LLC, a Delaware limited liability company, PALISADES ACQUISITION V, LLC, a Delaware limited liability company, PALISADES ACQUISITION VI, LLC, a Delaware limited liability company, PALISADES ACQUISITION VII, LLC, a Delaware limited liability company, PALISADES ACQUISITION VIII, LLC, a Delaware limited liability company, PALISADES ACQUISITION IX, LLC, a Delaware limited liability company, PALISADES ACQUISITION X, LLC, a Delaware limited liability company, CLIFFS PORTFOLIO ACQUISITION I, LLC, a Delaware limited liability company, SYLVAN ACQUISITION I, LLC, a Delaware limited liability company, and OPTION CARD, LLC, a Colorado limited liability company (sometimes collectively referred to herein as “Borrowers” and individually as a “Borrower”); ASTA FUNDING, INC., a Delaware corporation, COMPUTER FINANCE, LLC, a Delaware limited liability company, ASTAFUNDING.COM, LLC, a Delaware limited liability company, ASTA COMMERCIAL, LLC, a Delaware limited liability company, and VATIV RECOVERY SOLUTIONS, LLC, a Texas limited liability company (collectively, “Guarantor”); ISRAEL DISCOUNT BANK OF NEW YORK, a New York banking corporation (“IDB”), as collateral agent for itself and the lenders signatory hereto from time to time (together with any successor collateral agent appointed pursuant to Section 9.7, the “Collateral Agent”), as administrative agent (together with any successor administrative agent appointed pursuant to Section 9.7, the “Administrative Agent”, and together with the Collateral Agent, the “Agents”), and as co-lead arranger; MIDDLE MARKET FINANCE, a division of Merrill Lynch Business Financial Services Inc. (“Merrill Lynch”), as co-lead arranger and as co-administrative agent; and the Lenders (as defined below).

RECITALS:

     A. Borrowers and Guarantor (collectively, the “Credit Parties”), along with Administrative Agent and Lenders entered into a certain Fourth Amended and Restated Loan and Security Agreement dated as of July 11, 2006 (as amended, modified, supplemented or restated from time to time, the “Credit Agreement”). All capitalized terms used in this Amendment, unless specifically defined herein, shall have the meanings attributed to them in the Credit Agreement.

     B. The Credit Parties have requested that the Lenders amend certain terms of the Credit Agreement, pursuant to the terms of this Amendment.

AGREEMENT:

     For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Credit Parties, Administrative Agent and Lenders agree as follows:

SECTION 1. ACCURACY OF RECITALS.

     The Credit Parties acknowledge, represent, warrant and agree that the Recitals stated above are true and complete in all respects.

SECTION 2. MODIFICATION.

     2.1 Borrowing Base Definition. As of the date hereof, the definition of “Borrowing Base” as set forth on Annex A to the Credit Agreement, is amended and restated in its entirety to read as follows:

     “Borrowing Base” means, as of any date of determination by Agent from time to time, an amount equal to the sum at such time of:

     i. the Applicable Advance Rate times the Loan Value of Eligible New Portfolios, plus

     ii. the lesser of:

     1. the sum of the Loan Value of Eligible Existing Portfolios, or

     2. $40,000,000 from May 10, 2007 through October 7, 2007 and $20,000,000 from October 8, 2007 and thereafter;

in each case, less any Reserves established by Administrative Agent at such time; and provided, that, at no time shall Advances against (1) Telecom Receivables exceed thirty-five percent (35%) of the sum of (a) and (b) of this definition at the date of determination, (2) any receivables or receivable classes relating to payments by consumers for computers and furniture exceed twenty percent (20%) of the sum of (a) and (b) of this definition, or (3) any other receivables or receivables class not specifically permitted under this Agreement exceed twenty percent (20%) of the sum of (a) and (b) of this definition.

     2.2 No Other Modifications. Except as otherwise specifically modified by this Amendment, all terms, conditions, covenants, rights, duties, obligations and liabilities of the Credit Parties under the Credit Agreement remain in full force and effect and unmodified.

SECTION 3. REPRESENTATIONS AND WARRANTIES.

     The execution and delivery of this Amendment and the documents and instruments contemplated by this Amendment have been duly authorized by all requisite action by or on behalf of the members of the Credit Parties.

SECTION 4. COVENANTS.

     4.1 This Amendment shall be governed by the terms and provisions of the Credit Agreement.

     4.2 In the event of a conflict between the terms of this Amendment and the terms of the Credit Agreement, the terms of this Amendment shall govern and control.

     4.3 The Credit Parties hereby confirm and agree that the terms, conditions, covenants, guaranties, assurances, promises and provisions contained in the Loan Documents to which each is a party remain in full force and effect without amendment or modification as a result of this Amendment and that the obligations, liabilities and duties of the Credit Parties remain unimpaired as a result of this Amendment and are in full force and effect.

SECTION 5. BINDING EFFECT.

     The Credit Agreement as modified herein shall be binding upon and shall inure to the benefit of the members of the Credit Parties and their successors and assigns.

SECTION 6. COUNTERPART EXECUTION; FACSIMILES.

     This Amendment may be executed in one or more counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same document. Signature pages may be detached from the counterparts and attached to a single copy of this Amendment to physically form one document. Signatures may be exchanged by facsimile, with the original signature to follow. Each party to this Amendment agrees to be bound by its own faxed signature and to accept the faxed signature of the other parties to this Amendment.

[SIGNATURES PAGES TO FOLLOW]

IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date first above written.

BORROWERS:		ASTA FUNDING ACQUISITION I, LLC
		ASTA FUNDING ACQUISITION II, LLC
		PALISADES COLLECTION, L.L.C.
		CLIFFS PORTFOLIO ACQUISITION I, LLC
		PALISADES ACQUISITION I, LLC
		PALISADES ACQUISITION II, LLC
		PALISADES ACQUISITION IV, LLC
		PALISADES ACQUISITION V, LLC
		PALISADES ACQUISITION VI, LLC
		PALISADES ACQUISITION VII, LLC
		PALISADES ACQUISITION VIII, LLC
		PALISADES ACQUISITION IX, LLC
		PALISADES ACQUISITION X, LLC
		SYLVAN ACQUISITION I, LLC
		OPTION CARD, LLC
		By: Name:		/s/ Mitchell Cohen   Mitchell Cohen
		Title:		Manager
GUARANTORS:		ASTA FUNDING, INC.
		By: Name:		/s/ Mitchell Cohen   Mitchell Cohen
		Title:		Chief Financial Officer
		COMPUTER FINANCE, LLC
		ASTAFUNDING.COM, LLC
		ASTA COMMERCIAL, LLC
		VATIV RECOVERY SOLUTIONS, LLC
		By:		/s/ Mitchell Cohen
		Name:		Mitchell Cohen
		Title:		Manager

AGENT:		ISRAEL DISCOUNT BANK OF NEW YORK,
		as Administrative Agent, Collateral Agent and
		Co-Lead Arranger
		By: Name:		/s/ Robert J. Fainelli   Robert J. Fainelli
		Title:		First Vice President
		By: Name:		/s/ Jeffrey S. Ackerman   Jeffrey S. Ackerman
		Title:		Senior Vice President

		MIDDLE MARKET FINANCE, a division of MERRILL
		LYNCH BUSINESS FINANCIAL SERVICES INC.,
		as Co-Administrative Agent and Co-Lead Arranger
		By: Name:		/s/ Kenneth R. Geiger   Kenneth R. Geiger
		Title:		Vice President

LENDERS:		ISRAEL DISCOUNT BANK OF NEW YORK,
		as Lender
		By: Name:		/s/ Robert J. Fainelli   Robert J. Fainelli
		Title:		First Vice President
		By: Name:		/s/ Jeffrey S. Ackerman   Jeffrey S. Ackerman
		Title:		Senior Vice President

		MIDDLE MARKET FINANCE, a division of MERRILL
		LYNCH BUSINESS FINANCIAL SERVICES INC., as Lender
		By:		/s/ Kenneth R. Geiger
		Print Name:				Kenneth R. Geiger
		Print Title:				Vice President

		BMO CAPITAL MARKETS FINANCING, INC.,
		as Lender
		By:		/s/ Robert G. Bomben
		Print Name:				Robert G. Bomben
		Print Title:				Director

		BANK LEUMI USA, as Lender
		By:		/s/ Mary Ellen Bianco
		Print Name:				Mary Ellen Bianco
		Print Title:				Vice President

		THE BERKSHIRE BANK, as Lender
		By:		/s/ Ira A. Mermelstein
		Print Name:				Ira Mermelstein
		Print Title:				Vice President

		SIGNATURE BANK, as Lender
		By:		/s/ Morey Danon
		Print Name:				Morey Danon
		Print Title:				Senior Vice President