Exhibit 10.2

AMENDMENT ONE TO

SEVERANCE LETTER

This amendment (the “Amendment”) to the Severance Letter entered into by and
between Midland Credit Management, Inc. (the “Company”), a wholly owned
subsidiary of Encore Capital Group, Inc., a Delaware corporation, and Paul
Grinberg (the “Executive”) dated as of September 20, 2004 (the “Severance
Letter”), is effective as of June 5, 2006. Capitalized terms not defined herein
shall have the meaning set forth in the Severance Letter.

W I T N E S S E T H :

WHEREAS, the Company and the Executive have entered into the Severance Letter,
which provides for certain payments upon the termination of the Executive’s
employment with the Company; and

WHEREAS, the Company and the Executive desire to amend the Severance Letter as
provided herein.

NOW THEREFORE, the parties hereto hereby agree as follows:

 

1. Section 4 of the Severance Letter shall be amended to delete the first two
sentences and add in substitution thereof the following:

If you are terminated without Cause or resign for Good Reason within 12 months
following a Change of Control, you will be entitled to a cash severance amount
equal to 150% of (i) your highest annual rate of base salary during the 12-month
period immediately prior to your date of termination plus (ii) the greater of
(A) the average of the most recent two annual bonuses actually paid to you prior
to the Change of Control or (B) your target annual bonus for the year in which
the Change of Control occurs, paid in equal installments over the eighteen month
period commencing with the first regular payroll date following the date of
termination, in accordance with the Company’s normal payroll practices; provided
that, if necessary to avoid tax penalties under Section 409A of the Internal
Revenue Code of 1986, as amended, the commencement of such payments shall be
delayed until the first regular payroll date which occurs more than six months
following the date of termination, with the first of such payments including all
payments which would have been made during the period of such delay without
regard thereto, without interest.

 

2. Section 6 shall be added to the Severance Letter which shall be read in its
entirety as follows:

If you remain employed through the consummation of a Change of Control, you
shall receive a lump sum payment equal to 100% of your highest annual rate of
base salary

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during the period commencing one year prior to the Change of Control and ending
on the date in which the Change of Control is consummated. Such retention bonus
shall be paid within ten (10) days following the consummation of the Change of
Control.

 

3. Section 7 shall be added to the Severance Letter which shall be read in its
entirety as follows:

Restrictive Covenants.

(a) Cessation of Rights to Certain Future, Contingent Payments Upon Entering
Competitive Employment. If you, during the one (1) year period commencing on and
following the date of termination (whether prior to or following a Change of
Control), directly or indirectly, without the prior written consent of the
Board, becomes employed by, or acts as a consultant to or in association with,
or as a director, officer, employee, partner, owner, joint venturer, member or
otherwise, of any person, firm, corporation, partnership, limited liability
company, association or other entity that engages in any business in which the
Company or any Subsidiary was engaged, or in which any of them had taken
demonstrable steps to become engaged, at the date of termination, in the same
geographical area in which any of them engage, or are planning on becoming
engaged, in such business (other than by beneficial ownership of up to 2% of the
outstanding voting stock of a publicly-traded company that is or owns such a
competitor), your right to receive severance payments then being made by the
Company pursuant to this Severance Letter shall immediately cease and the
Company’s obligation to make such payments under this Severance Letter shall
immediately terminate as of the date you enter into such employment or other
relationships as described in this Section 7.

(b) Non-Solicitation. You agree that for one (1) year commencing on and
following the date of termination (whether prior to or following a Change of
Control), you will not directly or indirectly (i) solicit or hire or encourage
the solicitation or hiring of any person who was an employee of the Company or
any Subsidiary at any time on or after the date of termination (unless more than
six (6) months shall have elapsed between the last day of such person’s
employment by the Company and any Subsidiary and the first date of such
solicitation or hiring) or (ii) induce or attempt to induce any employee of the
Company or any Subsidiary to leave the employ thereof or in any way interfere
with the relationship between the Company or any Subsidiary and any employee
thereof.

(c) Non-Disclosure of Confidential Information. You recognize that the services
you perform for the Company and its affiliates are special, unique and
extraordinary in that you may acquire confidential information, trade secrets or
other competitive information concerning the operations of the Company and its
affiliates, the use or disclosure of which could cause the Company and its
affiliates substantial loss and damages which could not be readily calculated,
and for which no remedy at law would be adequate. Accordingly, you agree that
you will not at any time during your employment with the Company or any
Subsidiary or thereafter, except in performance of your obligations thereto,
disclose, either directly or indirectly, any Confidential Information (as
hereinafter defined) that you may learn by reason of his association with the
Company and its affiliates. The term “Confidential Information” shall mean any
past,

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present or future confidential or secret plans, programs, documents, agreements,
internal management reports, financial information or other material relating to
the business, strategies, services or activities of the Company and its
affiliates, including, without limitation, information with respect to the
Company’s and its affiliates’ operations, processes, products, inventions,
business practices, finances, principals, vendors, suppliers, customers,
potential customers, marketing methods, costs, prices, contractual relationships
(including leases), regulatory status, compensation paid to employees or other
terms of employment, and trade secrets, market reports, customer investigations,
customer lists and other similar information that is proprietary information of
the Company or any of its affiliates. Notwithstanding the foregoing, you may
disclose such Confidential Information when required to do so by a court of
competent jurisdiction, by any governmental agency having supervisory authority
over the business of the Company and/or its affiliates, as the case may be, or
by any administrative body or legislative body (including a committee thereof)
with jurisdiction to order you to divulge, disclose or make accessible such
information; provided, further, that in the event that you are ordered by any
such court or other government agency, administrative body or legislative body
to disclose any Confidential Information, you shall (i) promptly notify the
Company of such order, (ii) at the written request of the Company, diligently
contest such order at the sole expense of the Company as expenses occur and
(iii) at the written request of the Company, seek to obtain, at the sole expense
of the Company, such confidential treatment as may be available under applicable
laws for any information disclosed under such order.

(d) Non-disparagement. You agree (whether during or after your employment with
the Company) not to issue, circulate, publish or utter any false or disparaging
statements, remarks or rumors about the Company or the officers or directors of
the Company other than to the extent reasonably necessary in order to (i) assert
a bona fide claim against the Company arising out of your employment with the
Company, or (ii) respond in a truthful and appropriate manner to any legal
process or give truthful and appropriate testimony in a legal or regulatory
proceeding.

(e) Mutual Dependence of Covenants and Condition Subsequent. You covenant and
agree to be bound by the restrictive covenants and agreements contained in this
Section 7 to the maximum extent permitted by Delaware law, it being the intent
and spirit of the parties that the restrictive covenants and agreements
contained in this Severance Letter shall be valid and enforceable in all
respects, and, subject to the terms and conditions of this Severance Letter,
your compliance with the covenants contained in Section 7 (a) is mutually
dependent upon and a condition subsequent to the Company’s obligation to make
the payments described in this Severance Letter (as amended) and such payments
shall immediately cease upon any breach of Section 7. Likewise, if you commence
any action in court or in arbitration challenging the validity of, seeking to
invalidate or otherwise seeking some sort of declaration that the covenants and
agreements in Section 7(a) are void, voidable or invalid, the Company’s
obligations to make the payments described in this Severance Letter shall
immediately cease as of the time of the commencement of such action or
proceeding. If the Company does not discover your breach of Section 7(a) or the
commencement of any such action or arbitration proceedings until after one or
more payments under this Severance Letter have been made to you, you shall be
obligated to

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immediately return all such payments to the Company that were paid and received
after the breach of Section 7(a).

(f) Remedies Upon Breach. If you breach the provisions of Section 7(b), (c) or
(d), the Company shall have the right to have such restrictive covenants
specifically enforced by any court of competent jurisdiction, it being agreed
that any breach of such restrictive covenants would cause irreparable injury to
the Company and that money damages would not provide an adequate remedy for such
injury. Accordingly, the Company shall be entitled to injunctive relief to
enforce the terms of such restrictive covenants and to restrain you from any
violation thereof. The rights and remedies set forth in this Section 7(f) shall
be independent of all other others rights and remedies available to the Company
for a breach of such restrictive covenants, and shall be severally enforceable
from, in addition to, and not in lieu of, any other rights and remedies
available at law or in equity.

 

4. Section 8 shall be added to the Severance Letter which shall be read in its
entirety as follows:

Survival. The respective obligations and benefits afforded to the Company and
you as provided in Sections 4 (to the extent that payments or benefits are owed
as a result of a termination of employment that occurs during the term of the
Severance Letter (as amended)) and 7 of the Severance Letter (as amended) shall
survive the termination of this Severance Letter.

 

5. Section 9 shall be added to the Severance Letter which shall be read in its
entirety as follows:

Dispute Resolution. You and the Company agree that any controversy or claim
arising out of or relating to this Severance Letter (as amended) (other than a
controversy under Section 7 of this Severance Letter), or the breach thereof,
shall be settled by arbitration administered by the American Arbitration
Association in accordance with its Employment Arbitration Rules then in effect.
Venue for any arbitration pursuant to this Severance Letter will lie in San
Diego, California. One of the arbitrators shall be appointed by the Company, one
shall be appointed by you and the third shall be appointed by the first two
arbitrators. If the first two arbitrators cannot agree on the third arbitrator
within 30 days following the appointment of the second arbitrator, then the
third arbitrator shall be appointed by the Association. All three arbitrators
shall be experienced in the resolution of disputes under employment agreements
for senior executives of major corporations. Any award entered by the
arbitrators shall be final, binding and nonappealable and judgment may be
entered thereon by either party in accordance with applicable law in any court
of competent jurisdiction. This arbitration provision shall be specifically
enforceable. The arbitrators shall have no authority to modify any provision of
this Severance Letter or to award a remedy for a dispute involving this
Severance Letter other than a benefit specifically provided under or by virtue
of the Severance Letter. Each party shall be responsible for its own expenses
relating to the conduct of the arbitration (including reasonable attorneys’ fees
and expenses). The Company shall pay the fees of the American Arbitration
Association and the arbitrators, if applicable.

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6. Section 9 shall be added to the Severance Letter which shall be read in its
entirety as follows:

GOVERNING LAW; CONSENT TO JURISDICTION. THIS SEVERANCE LETTER WILL BE GOVERNED
BY, AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE
APPLICABLE TO AGREEMENTS MADE AND TO BE WHOLLY PERFORMED WITHIN THAT STATE,
WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS OF ANY JURISDICTION WHICH
WOULD CAUSE THE APPLICATION OF ANY LAW OTHER THAN THAT OF THE STATE OF DELAWARE.
ANY ACTION TO ENFORCE THIS SEVERANCE LETTER (OTHER THAN AN ACTION WHICH MUST BE
BROUGHT BY ARBITRATION PURSUANT TO SECTION 14) MUST BE BROUGHT IN, AND THE
PARTIES HEREBY CONSENT TO THE JURISDICTION OF, A COURT SITUATED IN NEW YORK, NEW
YORK. EACH PARTY HEREBY WAIVES THE RIGHTS TO CLAIM THAT ANY SUCH COURT IS AN
INCONVENIENT FORUM FOR THE RESOLUTION OF ANY SUCH ACTION.

 

7. All other provisions of the Severance Letter shall remain unchanged and in
full force and effect.

 

8. This Amendment may be signed in counterparts, each of which shall be an
original, with the same effect as if the signatures thereto and hereto were upon
the same instrument.

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

 

EXECUTIVE     Midland Credit Management, Inc. By:   /s/ Paul Grinberg     By:  
/s/ J. Brandon Black   Paul Grinberg     Title:   President