EXHIBIT 10.5

EXECUTION COPY

GUARANTY

        THIS GUARANTY (as the same may be amended, restated, supplemented or
otherwise modified from time to time, this “Guaranty”) is made as of June 7,
2005, by each of MIDLAND CREDIT MANAGEMENT, INC., a Kansas corporation, MIDLAND
FUNDING NCC-2 CORPORATION, a Delaware corporation, MIDLAND ACQUISITION
CORPORATION, a Delaware corporation, MIDLAND RECEIVABLES 98-1 CORPORATION, a
Delaware corporation, MIDLAND RECEIVABLES 99-1 CORPORATION, a Delaware
corporation, MIDLAND FUNDING 98-A CORPORATION, a Delaware corporation, MIDLAND
FUNDING NCC-1 CORPORATION, a Delaware corporation, MIDLAND PORTFOLIO SERVICES,
INC., a Delaware corporation and MIDLAND FUNDING LLC, a Delaware limited
liability company (each an “Initial Guarantor”, and together with any additional
Domestic Subsidiaries which become parties to this Guaranty by executing a
Supplement hereto in the form attached hereto as Annex I, the “Guarantors”), in
favor of JPMORGAN CHASE BANK, N.A., as Administrative Agent (the “Administrative
Agent”) for the benefit of the Holders of Secured Obligations under the Credit
Agreement described below. Each capitalized term used herein and not defined
herein shall have the meaning ascribed thereto in the Credit Agreement described
below.

WITNESSETH:

        WHEREAS, Encore Capital Group, Inc., a Delaware corporation (the
“Borrower”), has entered into that certain Credit Agreement, dated as of the
date hereof (as the same may be amended, restated, supplemented or otherwise
modified from time to time, the “Credit Agreement”), by and among the Borrower,
the financial institutions from time to time parties thereto as lenders (the
“Lenders”), and the Administrative Agent, which Credit Agreement provides,
subject to the terms and conditions thereof, for extensions of credit and other
financial accommodations by the Lenders to the Borrower;

        WHEREAS, it is a condition precedent to the extensions of credit by the
Lenders under the Credit Agreement that each of the Guarantors (constituting all
of the Domestic Subsidiaries of the Borrower required to execute this Guaranty
pursuant to Section 6.25 of the Credit Agreement) execute and deliver this
Guaranty, whereby each of the Guarantors, without limitation and with full
recourse, shall guarantee the payment when due of all Secured Obligations,
including, without limitation, all principal, interest, letter of credit
reimbursement obligations and other amounts that shall be at any time payable by
the Borrower under the Credit Agreement or the other Loan Documents; and

        WHEREAS, in consideration of the direct and indirect financial and other
support that the Borrower has provided, and such direct and indirect financial
and other support as the Borrower may in the future provide, to the Guarantors,
and in order to induce the Lenders and the Administrative Agent to enter into
the Credit Agreement, each of the Guarantors is willing to guarantee the Secured
Obligations under the Credit Agreement and the other Loan Documents;

--------------------------------------------------------------------------------

        NOW, THEREFORE, in consideration of the foregoing premises and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

Section 1.     Representations, Warranties and Covenants. In order to induce the
Administrative Agent and the Lenders to enter into the Credit Agreement and to
make the Loans and the other financial accommodations to the Borrower and to
issue the Facility LCs described in the Credit Agreement, each of the Guarantors
represents and warrants to each Lender and the Administrative Agent as of the
date of this Agreement, giving effect to the consummation of the transactions
contemplated by the Loan Documents on the Closing Date, and thereafter on each
date as required by Section 4.2 of the Credit Agreement that:

(a)     It (i) is a corporation, partnership or limited liability company, or
partnership duly incorporated or organized, as the case may be, validly existing
and in good standing under the laws of its jurisdiction of incorporation or
organization, (ii) is duly qualified to do business as a foreign entity and is
in good standing under the laws of each jurisdiction where the business by it
makes such qualification necessary, and (iii) has all requisite corporate,
partnership or limited liability power and authority, as the case may be, to
own, operate and encumber its Property and to conduct its business in each
jurisdiction in which its business is conducted.

(b)     It has the requisite corporate, limited liability company or
partnership, as applicable, power and authority and legal right to execute and
deliver this Guaranty and to perform its obligations hereunder. The execution
and delivery by it of this Guaranty and the performance by each of its
obligations hereunder have been duly authorized by proper proceedings, and this
Guaranty constitutes a legal, valid and binding obligation of each Guarantor,
enforceable against such Guarantor, in accordance with its terms, except as
enforceability may be limited by (i) bankruptcy, insolvency, fraudulent
conveyances, reorganization or similar laws relating to or affecting the
enforcement of creditors’ rights generally, (ii) general equitable principles
(whether considered in a proceeding in equity or at law), and (iii) requirements
of reasonableness, good faith and fair dealing. (c) Neither the execution and
delivery by it of this Guaranty, nor the consummation by it of the transactions
herein contemplated, nor compliance by it with the terms and provisions hereof,
will (i) conflict with the charter or other organizational documents of such
Guarantor, (ii) conflict with, result in a breach of or constitute (with or
without notice or lapse of time or both) a default under any law, rule,
regulation, order, writ, judgment, injunction, decree or award (including,
without limitation, any environmental property transfer laws or regulations)
applicable to such Guarantor or any provisions of any indenture, instrument or
agreement to which such Guarantor is party or is subject or which it or its
Property is bound or affected, or require termination of any such indenture,
instrument or agreement, (iii) result in or require the creation or imposition
of any Lien whatsoever upon any of the property or assets of such Guarantor,
other than Liens permitted or created by the Loan Documents, or (iv) require any
approval of such Guarantor’s board of directors or shareholders or unitholders
except such as have been obtained. Except as set forth in Section 5.3 of the
Credit Agreement and assuming the filing of financing statements in relevant
jurisdictions as required, the execution, delivery and performance by the
Guarantors of each of the Loan Documents to which such Guarantor is a party do
not and will not require any registration with, consent or approval of, or
notice to, or other action to, with or by any governmental authority, including
under any environmental property transfer laws or regulations, except filings,
consents or notices which have been made.

--------------------------------------------------------------------------------

(d)     It has no Indebtedness other than Indebtedness permitted under Section
6.14 of the Credit Agreement.

        In addition to the foregoing, each of the Guarantors covenants that, so
long as any Lender has any Revolving Loan Commitment and Swing Line Commitment
(collectively, the “Commitments”) outstanding under the Credit Agreement or any
amount payable under the Credit Agreement or any other Secured Obligations shall
remain unpaid, it will, and, if necessary, will enable the Borrower to, fully
comply with those covenants and agreements of the Borrower applicable to such
Guarantor set forth in the Credit Agreement.

Section 2.     The Guaranty. Each of the Guarantors hereby unconditionally
guarantees, jointly and severally with the other Guarantors, the full and
punctual payment and performance when due (whether at stated maturity, upon
acceleration or otherwise) of the Secured Obligations, including, without
limitation, (i) the principal of and interest on each Advance made to the
Borrower pursuant to the Credit Agreement, (ii) any Reimbursement Obligations of
the Borrower or the performance by it of such Reimbursement Obligations, (iii)
all other amounts payable by the Borrower under the Credit Agreement and the
other Loan Documents, including, without limitation, all Rate Management
Obligations, and (iv) the punctual and faithful performance, keeping,
observance, and fulfillment by the Borrower of all of the agreements,
conditions, covenants, and obligations of the Borrower contained in the Loan
Documents (all of the foregoing being referred to collectively as the
“Guaranteed Obligations”). Upon (x) the failure by the Borrower, or any of its
Affiliates, as applicable, to pay punctually any such amount or perform such
obligation, and (y) such failure continuing beyond any applicable grace or
notice and cure period, each of the Guarantors agrees that it shall forthwith on
demand pay such amount or perform such obligation at the place and in the manner
specified in the Credit Agreement or the relevant Loan Document, as the case may
be. Each of the Guarantors hereby agrees that this Guaranty is an absolute,
irrevocable and unconditional guaranty of payment and is not a guaranty of
collection.

Section 3.     Guaranty Unconditional. The obligations of each of the Guarantors
hereunder shall be unconditional and absolute and, without limiting the
generality of the foregoing, shall not be released, discharged or otherwise
affected by:

(i) any extension, renewal, settlement, indulgence, compromise, waiver or
release of or with respect to the Guaranteed Obligations or any part thereof or
any agreement relating thereto, or with respect to any obligation of any other
guarantor of any of the Guaranteed Obligations, whether (in any such case) by
operation of law or otherwise, or any failure or omission to enforce any right,
power or remedy with respect to the Guaranteed Obligations or any part thereof
or any agreement relating thereto, or with respect to any obligation of any
other guarantor of any of the Guaranteed Obligations;

--------------------------------------------------------------------------------

(ii) any modification or amendment of or supplement to the Credit Agreement, any
agreement evidencing a Rate Management Transaction or any other Loan Document,
including, without limitation, any such amendment which may increase the amount
of, or the interest rates applicable to, any of the Guaranteed Obligations
guaranteed hereby;

(iii) any release, surrender, compromise, settlement, waiver, subordination or
modification, with or without consideration, of any collateral securing the
Guaranteed Obligations or any part thereof, any other guaranties with respect to
the Guaranteed Obligations or any part thereof, or any other obligation of any
person or entity with respect to the Guaranteed Obligations or any part thereof,
or any nonperfection or invalidity of any direct or indirect security for the
Guaranteed Obligations;

(iv) any change in the corporate, partnership or other existence, structure or
ownership of the Borrower or any other guarantor of any of the Guaranteed
Obligations, or any insolvency, bankruptcy, reorganization or other similar
proceeding affecting the Borrower or any other guarantor of the Guaranteed
Obligations, or any of their respective assets or any resulting release or
discharge of any obligation of the Borrower or any other guarantor of any of the
Guaranteed Obligations;

(v) the existence of any claim, setoff or other rights which the Guarantors may
have at any time against the Borrower, any other guarantor of any of the
Guaranteed Obligations, the Administrative Agent, any Holder of Secured
Obligations or any other Person, whether in connection herewith or in connection
with any unrelated transactions, provided that nothing herein shall prevent the
assertion of any such claim by separate suit or compulsory counterclaim;

(vi) the enforceability or validity of the Guaranteed Obligations or any part
thereof or the genuineness, enforceability or validity of any agreement relating
thereto or with respect to any collateral securing the Guaranteed Obligations or
any part thereof, or any other invalidity or unenforceability relating to or
against the Borrower or any other guarantor of any of the Guaranteed
Obligations, for any reason related to the Credit Agreement, any agreement
evidencing a Rate Management Transaction or any other Loan Document, or any
provision of applicable law or regulation purporting to prohibit the payment by
the Borrower or any other guarantor of the Guaranteed Obligations, of any of the
Guaranteed Obligations;

(vii) the failure of the Administrative Agent to take any steps to perfect and
maintain any security interest in, or to preserve any rights to, any security or
collateral for the Guaranteed Obligations, if any;

(viii) the election by, or on behalf of, any one or more of the Holders of
Secured Obligations, in any proceeding instituted under Chapter 11 of Title 11
of the United States Code (11 U.S.C. 101 et seq.) (the “Bankruptcy Code”), of
the application of Section 1111(b)(2) of the Bankruptcy Code;

--------------------------------------------------------------------------------

(ix) any borrowing or grant of a security interest by the Borrower, as
debtor-in-possession, under Section 364 of the Bankruptcy Code;

(x) the disallowance, under Section 502 of the Bankruptcy Code, of all or any
portion of the claims of the Holders of Secured Obligations or the
Administrative Agent for repayment of all or any part of the Guaranteed
Obligations;

(xi) the failure of any other guarantor to sign or become party to this Guaranty
or any amendment, change, or reaffirmation hereof; or

(xii) any other act or omission to act or delay of any kind by the Borrower, any
other guarantor of the Guaranteed Obligations, the Administrative Agent, any
Holder of Secured Obligations or any other Person or any other circumstance
whatsoever which might, but for the provisions of this Section 3, constitute a
legal or equitable discharge of any Guarantor’s obligations hereunder.

Section 4.     Discharge Only Upon Payment In Full; Reinstatement In Certain
Circumstances; Discharge of Guaranty Upon Sale of Guarantor.

(A)     Discharge Only Upon Payment In Full; Reinstatement In Certain
Circumstances. Except as provided in Section 4(B) below, each of the Guarantors’
obligations hereunder shall remain in full force and effect until all Guaranteed
Obligations shall have been paid in full in cash and the Commitments and all
Facility LCs issued under the Credit Agreement shall have terminated or expired
or, in the case of all Facility LCs, are fully collateralized on terms
reasonably acceptable to the Administrative Agent. If at any time any payment of
the principal of or interest on any Advance or Reimbursement Obligation or any
other amount payable by the Borrower or any other party under the Credit
Agreement, any agreement evidencing a Rate Management Transaction or any other
Loan Document is rescinded or must be otherwise restored or returned upon the
insolvency, bankruptcy or reorganization of the Borrower or otherwise, each of
the Guarantors’ obligations hereunder with respect to such payment shall be
reinstated as though such payment had been due but not made at such time.

(B)     Discharge of Guaranty Upon Sale of Guarantor. If all of the stock or
partnership or membership interests of a Guarantor or any of its successors in
interest under this Guaranty shall be sold or otherwise disposed of (including
by merger, consolidation or dissolution) in a sale or other disposition not
prohibited by the Credit Agreement or that is otherwise consented to by Required
Lenders, the obligations of such Guarantor or such successor in interest, as the
case may be, hereunder shall automatically be discharged and released without
any further action by any Credit Party or any other Person effective as of the
time of such sale or other disposition.

Section 5.     General Waivers; Additional Waivers.

(A)     General Waivers. Each of the Guarantors irrevocably waives acceptance
hereof, presentment, demand or action on delinquency, protest, the benefit of
any statutes of limitations and, to the fullest extent permitted by law, any
notice not provided for herein, as well as any requirement that at any time any
action be taken by any Person against the Borrower, any other guarantor of the
Guaranteed Obligations, or any other Person.

--------------------------------------------------------------------------------

(B)     Additional Waivers. Notwithstanding anything herein to the contrary,
each of the Guarantors hereby absolutely, unconditionally, knowingly, and
expressly waives:

(i)

any right it may have to revoke this Guaranty as to future indebtedness or
notice of acceptance hereof; 

(ii)

(1) notice of acceptance hereof; (2) notice of any loans or other financial
accommodations made or extended under the Loan Documents or the creation or
existence of any Guaranteed Obligations; (3) notice of the amount of the
Guaranteed Obligations, subject, however, to each Guarantor’s right to make
inquiry of Administrative Agent and Holders of Secured Obligations to ascertain
the amount of the Guaranteed Obligations at any reasonable time; (4) notice of
any adverse change in the financial condition of the Borrower or of any other
fact that might increase such Guarantor’s risk hereunder; (5) notice of
presentment for payment, demand, protest, and notice thereof as to any
instruments among the Loan Documents; (6) notice of any Unmatured Default or
Default; and (7) all other notices (except if such notice is specifically
required to be given to such Guarantor hereunder or under the Loan Documents)
and demands to which each Guarantor might otherwise be entitled;

(iii)

its right, if any, to require the Administrative Agent and the other Holders of
Secured Obligations to institute suit against, or to exhaust any rights and
remedies which the Administrative Agent and the other Holders of Secured
Obligations has or may have against, the other Guarantors or any third party, or
against any Collateral provided by the other Guarantors, or any third party; and
each Guarantor further waives any defense arising by reason of any disability or
other defense (other than the defense that the Guaranteed Obligations shall have
been fully and finally performed and indefeasibly paid) of the other Guarantors
or by reason of the cessation from any cause whatsoever of the liability of the
other Guarantors in respect thereof;

(iv) (a) any rights to assert against the Administrative Agent and the other
Holders of Secured Obligations any defense (legal or equitable), set-off,
counterclaim, or claim which such Guarantor may now or at any time hereafter
have against the other Guarantors or any other party liable to the
Administrative Agent and the other Holders of Secured Obligations; (b) any
defense, set-off, counterclaim, or claim, of any kind or nature, arising
directly or indirectly from the present or future lack of perfection,
sufficiency, validity, or enforceability of the Guaranteed Obligations or any
security therefor; (c) any defense such Guarantor has to performance hereunder,
and any right such Guarantor has to be exonerated, arising by reason of: the
impairment or suspension of the Administrative Agent’s and the other Holders of
Secured Obligations’ rights or remedies against the other Guarantors; the
alteration by the Administrative Agent and the other Holders of Secured
Obligations of the Guaranteed Obligations; any discharge of the other
Guarantors’ obligations to the Administrative Agent and the other Holders of
Secured Obligations by operation of law as a result of the Administrative
Agent’s and the other Holders of Secured Obligations’ intervention or omission;
or the acceptance by the Administrative Agent and the other Holders of Secured
Obligations of anything in partial satisfaction of the Guaranteed Obligations;
and (d) the benefit of any statute of limitations affecting such Guarantor’s
liability hereunder or the enforcement thereof, and any act which shall defer or
delay the operation of any statute of limitations applicable to the Guaranteed
Obligations shall similarly operate to defer or delay the operation of such
statute of limitations applicable to such Guarantor’s liability hereunder; and

--------------------------------------------------------------------------------

(v) any defense arising by reason of or deriving from (a) any claim or defense
based upon an election of remedies by the Administrative Agent and the other
Holders of Secured Obligations; or (b) any election by the Administrative Agent
and the other Holders of Secured Obligations under Section 1111(b) of Title 11
of the United States Code entitled “Bankruptcy”, as now and hereafter in effect
(or any successor statute), to limit the amount of, or any collateral securing,
its claim against the Guarantors:

Section 6.     Subordination of Subrogation. Until the Guaranteed Obligations
have been fully and finally performed and indefeasibly paid (other than
contingent indemnity obligations) the Guarantors (i) shall have no right of
subrogation with respect to such Guaranteed Obligations and (ii) waive any right
to enforce any remedy which the LC Issuer, Holders of Secured Obligations or the
Administrative Agent now have or may hereafter have against the Borrower, any
endorser or any guarantor of all or any part of the Secured Obligations or any
other Person, and until such time the Guarantors waive any benefit of, and any
right to participate in, any security or collateral given to the Holders of
Secured Obligations and the Administrative Agent to secure the payment or
performance of all or any part of the Guaranteed Obligations or any other
liability of the Borrower to the Holders of Secured Obligations. Should any
Guarantor have the right, notwithstanding the foregoing, to exercise its
subrogation rights, each Guarantor hereby expressly and irrevocably (A)
subordinates any and all rights at law or in equity to subrogation,
reimbursement, exoneration, contribution, indemnification or set off that the
Guarantor may have to the payment in full in cash of the Guaranteed Obligations
until the Guaranteed Obligations are paid in full in cash (other than contingent
indemnity obligations) and (B) waives any and all defenses available to a
surety, guarantor or accommodation co-obligor until the Guaranteed Obligations
are paid in full in cash. Each Guarantor acknowledges and agrees that this
subordination is intended to benefit the Administrative Agent and the Holders of
Secured Obligations and shall not limit or otherwise affect such Guarantor’s
liability hereunder or the enforceability of this Guaranty, and that the
Administrative Agent, the Holders of Secured Obligations and their respective
successors and assigns are intended third party beneficiaries of the waivers and
agreements set forth in this Section 6.

Section 7.     Contribution with Respect to Guaranteed Obligations.

(a)     To the extent that any Guarantor shall make a payment under this
Guaranty (a “Guarantor Payment”) which, taking into account all other Guarantor
Payments then previously or concurrently made by any other Guarantor, exceeds
the amount which otherwise would have been paid by or attributable to such
Guarantor if each Guarantor had paid the aggregate Guaranteed Obligations
satisfied by such Guarantor Payment in the same proportion as such Guarantor’s
“Allocable Amount” (as defined below) (as determined immediately prior to such
Guarantor Payment) bore to the aggregate Allocable Amounts of each of the
Guarantors as determined immediately prior to the making of such Guarantor
Payment, then, following payment in full in cash of the Guarantor Payment and
the Guaranteed Obligations, and all Commitments and Facility LCs have terminated
or expired or, in the case of all Facility LCs, are fully collateralized on
terms reasonably acceptable to the Administrative Agent, such Guarantor shall be
entitled to receive contribution and indemnification payments from, and be
reimbursed by, each other Guarantor for the amount of such excess, pro rata
based upon their respective Allocable Amounts in effect immediately prior to
such Guarantor Payment.

--------------------------------------------------------------------------------

(b)     As of any date of determination, the “Allocable Amount” of any Guarantor
shall be equal to the maximum amount of the claim which could then be recovered
from such Guarantor under this Guaranty without rendering such claim voidable or
avoidable under Section 548 of Chapter 11 of the Bankruptcy Code or under any
applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent Conveyance
Act or similar statute or common law.

(c) This Section 7 is intended only to define the relative rights of the
Guarantors, and nothing set forth in this Section 7 is intended to or shall
impair the obligations of the Guarantors, jointly and severally, to pay any
amounts as and when the same shall become due and payable in accordance with the
terms of this Guaranty.

(d) The parties hereto acknowledge that the rights of contribution and
indemnification hereunder shall constitute assets of the Guarantor or Guarantors
to which such contribution and indemnification is owing.

(e) The rights of the indemnifying Guarantors against other Guarantors under
this Section 7 shall be exercisable upon the full and indefeasible payment of
the Guaranteed Obligations in cash and the termination or expiry (or in the case
of all Facility LCs full collateralization) on terms reasonably acceptable to
the Administrative Agent of the Commitments and all Facility LCs issued under
the Credit Agreement.

Section 8.     Stay of Acceleration. If acceleration of the time for payment of
any amount payable by the Borrower under the Credit Agreement, any counterparty
to any agreement evidencing a Rate Management Transaction or any other Loan
Document is stayed upon the insolvency, bankruptcy or reorganization of the
Borrower or any of their Affiliates, all such amounts otherwise subject to
acceleration under the terms of the Credit Agreement, any agreement evidencing a
Rate Management Transaction or any other Loan Document shall nonetheless be
payable by each of the Guarantors hereunder forthwith on demand by the
Administrative Agent.

Section 9.     Notices. All notices, requests and other communications to any
party hereunder shall be given in the manner prescribed in Article XIII of the
Credit Agreement with respect to the Administrative Agent at its notice address
therein and, with respect to any Guarantor, in the care of the Borrower at the
address of the Borrower set forth in the Credit Agreement, or such other address
or telecopy number as such party may hereafter specify for such purpose by
notice to the Administrative Agent in accordance with the provisions of such
Article XIII.

--------------------------------------------------------------------------------

Section 10.     No Waivers. No failure or delay by the Administrative Agent or
any Holders of Secured Obligations in exercising any right, power or privilege
hereunder shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. The rights and remedies provided in this
Guaranty, the Credit Agreement, any agreement evidencing a Rate Management
Transaction and the other Loan Documents shall be cumulative and not exclusive
of any rights or remedies provided by law.

Section 11.     Successors and Assigns. This Guaranty is for the benefit of the
Administrative Agent and the Holders of Secured Obligations and their respective
successors and permitted assigns, provided, that no Guarantor shall have any
right to assign its rights or obligations hereunder without the consent of all
of the Lenders, and any such assignment in violation of this Section 11 shall be
null and void; and in the event of an assignment of any amounts payable under
the Credit Agreement, any agreement evidencing a Rate Management Transaction or
the other Loan Documents in accordance with the respective terms thereof, the
rights hereunder, to the extent applicable to the indebtedness so assigned, may
be transferred with such indebtedness. This Guaranty shall be binding upon each
of the Guarantors and their respective successors and assigns.

Section 12.     Changes in Writing. Other than in connection with the addition
of additional Subsidiaries, which become parties hereto by executing a
Supplement hereto in the form attached as Annex I, neither this Guaranty nor any
provision hereof may be changed, waived, discharged or terminated orally, but
only in writing signed by each of the Guarantors and the Administrative Agent
with the consent of the Required Lenders under the Credit Agreement (or all of
the Lenders if required pursuant to the terms of Section 8.2 of the Credit
Agreement).

Section 13.     CHOICE OF LAW. THIS GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD
TO THE CONFLICTS OF LAWS PROVISIONS) BUT GIVING EFFECT TO FEDERAL LAWS
APPLICABLE TO NATIONAL BANKS.

Section 14.     CONSENT TO JURISDICTION; JURY TRIAL.

(A)     CONSENT TO JURISDICTION. EACH GUARANTOR HEREBY IRREVOCABLY SUBMITS TO
THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR NEW YORK STATE
COURT SITTING IN NEW YORK CITY, NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT
OF OR RELATING TO ANY LOAN DOCUMENTS AND EACH GUARANTOR HEREBY IRREVOCABLY
AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR
HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN
SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL
LIMIT THE RIGHT OF ANY PARTY HERETO TO BRING PROCEEDINGS IN THE COURTS OF ANY
OTHER JURISDICTION.

--------------------------------------------------------------------------------

(B)     WAIVER OF JURY TRIAL. EACH GUARANTOR HEREBY WAIVES TRIAL BY JURY IN ANY
JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER
SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO,
OR CONNECTED WITH THIS GUARANTY OR ANY OTHER LOAN DOCUMENT OR THE RELATIONSHIP
ESTABLISHED THEREUNDER.

Section 15.     No Strict Construction. The parties hereto have participated
jointly in the negotiation and drafting of this Guaranty. In the event an
ambiguity or question of intent or interpretation arises, this Guaranty shall be
construed as if drafted jointly by the parties hereto and no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any provisions of this Guaranty.

Section 16.     Expenses of Enforcement, Etc. Subject to the terms of the Credit
Agreement, after the occurrence of a Default under the Credit Agreement, the
Lenders shall have the right at any time to direct the Administrative Agent to
commence enforcement proceedings with respect to the Guaranteed Obligations. The
Guarantors agree to reimburse the Administrative Agent and the Holders of
Secured Obligations for any costs and out-of-pocket expenses (including
reasonable attorneys’ fees and time charges of attorneys for the Administrative
Agent and the Holders of Secured Obligations), paid or incurred by the
Administrative Agent or any Holders of Secured Obligations in connection with
the collection and enforcement of amounts due under the Loan Documents,
including without limitation this Guaranty. The Administrative Agent agrees to
distribute payments received from any of the Guarantors hereunder to the Holders
of Secured Obligations on a pro rata basis for application in accordance with
the terms of the Credit Agreement.

Section 17.     Setoff. At any time after all or any part of the Guaranteed
Obligations have become due and payable (by acceleration or otherwise), each
Holder of Secured Obligations and the Administrative Agent may, without notice
to any Guarantor and regardless of the acceptance of any security or collateral
for the payment hereof, appropriate and apply toward the payment of all or any
part of the Guaranteed Obligations (i) any indebtedness due or to become due
from such Holder of Secured Obligations or the Administrative Agent to any
Guarantor, and (ii) any moneys, credits or other property belonging to any
Guarantor, at any time held by or coming into the possession of such Holder of
Secured Obligations or the Administrative Agent or any of their respective
affiliates.

Section 18.     Financial Information. Each Guarantor hereby assumes
responsibility for keeping itself informed of the financial condition of the
Borrower and any and all endorsers and/or other Guarantors of all or any part of
the Guaranteed Obligations, and of all other circumstances bearing upon the risk
of nonpayment of the Guaranteed Obligations, or any part thereof, that diligent
inquiry would reveal, and each Guarantor hereby agrees that none of the Holders
of Secured Obligations or the Administrative Agent shall have any duty to advise
such Guarantor of information known to any of them regarding such condition or
any such circumstances. In the event any Holder of Secured Obligations or the
Administrative Agent, in its sole discretion, undertakes at any time or from
time to time to provide any such information to a Guarantor, such Holder of
Secured Obligations or the Administrative Agent shall be under no obligation (i)
to undertake any investigation not a part of its regular business routine, (ii)
to disclose any information which such Holder of Secured Obligations or the
Administrative Agent, pursuant to accepted or reasonable commercial finance or
banking practices, wishes to maintain confidential or (iii) to make any other or
future disclosures of such information or any other information to such
Guarantor.

--------------------------------------------------------------------------------

Section 19.     Severability. Wherever possible, each provision of this Guaranty
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Guaranty shall be prohibited by or
invalid under such law, such provision shall be ineffective to the extent of
such prohibition or invalidity without invalidating the remainder of such
provision or the remaining provisions of this Guaranty.

Section 20.     Merger. This Guaranty represents the final agreement of each of
the Guarantors with respect to the matters contained herein and may not be
contradicted by evidence of prior or contemporaneous agreements, or subsequent
oral agreements, between the Guarantor and any Holder of Secured Obligations or
the Administrative Agent.

Section 21.     Headings. Section headings in this Guaranty are for convenience
of reference only and shall not govern the interpretation of any provision of
this Guaranty.

[SIGNATURE PAGES TO FOLLOW]

 

 

 

--------------------------------------------------------------------------------

Signature Page to Guaranty

        IN WITNESS WHEREOF, each Initial Guarantor has caused this Guaranty to
be duly executed by its authorized officer as of the day and year first above
written.

MIDLAND CREDIT MANAGEMENT, INC. , as a Guarantor MIDLAND FUNDING NCC-2
CORPORATION, as a Guarantor /s/ J. Brandon Black
Name: J. Brandon Black
Title: President& Chief Operating Officer
/s/ J. Brandon Black
Name: J. Brandon Black
Title: President & Chief Operating Officer

MIDLAND ACQUISITION CORPORATION, as a Guarantor MIDLAND RECEIVABLES 98-1
CORPORATION, as a Guarantor /s/ J. Brandon Black
Name: J. Brandon Black
Title: President& Chief Operating Officer
/s/ J. Brandon Black
Name: J. Brandon Black
Title: President & Chief Operating Officer

MIDLAND RECEIVABLES 99-1 CORPORATION, as a Guarantor MIDLAND FUNDING 98-A
CORPORATION, as a Guarantor /s/ J. Brandon Black
Name: J. Brandon Black
Title: President& Chief Operating Officer
/s/ J. Brandon Black
Name: J. Brandon Black
Title: President & Chief Operating Officer

MIDLAND FUNDING NCC-1 CORPORATION,as a Guarantor MIDLAND PORTFOLIO SERVICES,
INC., as a Guarantor /s/ J. Brandon Black
Name: J. Brandon Black
Title: President& Chief Operating Officer
/s/ J. Brandon Black
Name: J. Brandon Black
Title: President & Chief Operating Officer

MIDLAND FUNDING LLC, as a Guarantor /s/ J. Brandon Black
Name: J. Brandon Black
Title: President & Chief Operating Officer

Acknowledged and Agreed to:

JPMORGAN CHASE BANK, N.A.,
as Administrative Agent

By: /s/ Steven J. Krakoski
——————————
Name: Steven J. Krakoski
Title:  Senior Vice President

--------------------------------------------------------------------------------

ANNEX I TO GUARANTY

        Reference is hereby made to the Guaranty (as the same may be amended,
restated, supplemented or otherwise modified from time to time, the “Guaranty”),
dated as of June 7, 2005, made by each of MIDLAND CREDIT MANAGEMENT, INC., a
Kansas corporation, MIDLAND FUNDING NCC-2 CORPORATION, a Delaware corporation,
MIDLAND ACQUISITION CORPORATION, a Delaware corporation, MIDLAND RECEIVABLES
98-1 CORPORATION, a Delaware corporation, MIDLAND RECEIVABLES 99-1 CORPORATION,
a Delaware corporation, MIDLAND FUNDING 98-A CORPORATION, a Delaware
corporation, MIDLAND FUNDING NCC-1 CORPORATION, a Delaware corporation, MIDLAND
PORTFOLIO SERVICES, INC., a Delaware corporation and MIDLAND FUNDING LLC, a
Delaware limited liability company (each an “Initial Guarantor”, and together
with any additional Domestic Subsidiaries which become parties to the Guaranty
by executing a Supplement thereto substantially similar in form and substance
hereto, the “Guarantors”), in favor of the Administrative Agent, for the ratable
benefit of the Holders of Secured Obligations, under the Credit Agreement. Each
capitalized term used herein and not defined herein shall have the meaning given
to it in the Guaranty. By its execution below, the undersigned, [NAME OF NEW
GUARANTOR], a [corporation] [partnership] [limited liability company], agrees to
become, and does hereby become, a Guarantor under the Guaranty and agrees to be
bound by such Guaranty as if originally a party thereto. By its execution below,
the undersigned represents and warrants as to itself that all of the
representations and warranties contained in Section 1 of the Guaranty are true
and correct in all respects as of the date hereof.

        IN WITNESS WHEREOF, [NAME OF NEW GUARANTOR], a [corporation]
[partnership] [limited liability company] has executed and delivered this Annex
I counterpart to the Guaranty as of this __________ day of _________, ____.

[NAME OF NEW GUARANTOR]

By:____________________________________

Title:__________________________________