Exhibit



Exhibit 10.5



INCREMENTAL FACILITY AGREEMENT 

DNB Capital, LLC
August 15, 2017


Encore Capital Group, Inc.  
3111 Camino Del Rio North
Suite 103
San Diego, California  92108
Attention:  Chief Financial Officer    
Re:    Incremental Facility Agreement 
Ladies and Gentlemen:
Reference is hereby made to that certain Third Amended and Restated Credit Agreement, dated as of December 20, 2016 (as amended by that certain Incremental Term Loan and Extension Agreement, dated as of March 2, 2017,  that certain Incremental Facility Agreement, dated as of March 29, 2017, that certain Amendment No. 1 to Third Amended and Restated Credit Agreement, dated as of June 13, 2017, that certain Amendment No. 2 to Third Amended and Restated Credit Agreement, dated as of June 29, 2017 and as may be further amended, restated, modified, supplemented, extended or replaced from time to time, the “Credit Agreement”), by and among Encore Capital Group, Inc. (“Borrower”), the several banks and other financial institutions and lenders from time to time party thereto (the “Lenders”), SunTrust Bank, as administrative agent (in such capacity, the “Administrative Agent”) and collateral agent, issuing bank and swingline lender.  Unless otherwise defined herein, capitalized terms used herein shall have the respective meanings set forth in the Credit Agreement.  This Incremental Facility Agreement (this “Agreement”) (i) is an “Incremental Facility Amendment” (as defined in the Credit Agreement) and the Credit Agreement is hereby amended in accordance with the terms and conditions herein and (ii) shall be deemed to be a “Loan Document” under the Credit Agreement.  
At the request of the Borrower DNB Capital, LLC, a New York limited liability company (the “Incremental Lender”) hereby agrees to make an Incremental Term Loan to the Borrower in the amount of $25,000,000 (the “Incremental Term Loan”) on the Agreement Effective Date (as defined below).  The Incremental Term Loan provided pursuant to this Agreement shall be subject to all of the terms and conditions set forth in the Credit Agreement, including without limitation, Section 2.5 thereof.
The Incremental Lender, the Borrower and the Administrative Agent each acknowledges and agrees that the Incremental Term Loan provided pursuant to this Agreement shall constitute a “Term Loan” for all purposes of the Credit Agreement and the other applicable Loan Documents.  Furthermore, each of the parties to this Agreement hereby agrees that (i) the Incremental Term Loan shall be subject to the terms set forth on Annex I hereto, (ii) except as otherwise expressly set forth herein, the Incremental Term Loan shall be on the same terms and conditions as the Term Loan A-3 under the Credit Agreement and (iii) the Incremental Term Loan shall constitute a “Term Loan A-3” for all purposes of the Credit Agreement and the other applicable Loan Documents.
The Incremental Lender hereby (i) confirms that it has received a copy of the Credit Agreement and the other Loan Documents, together with copies of the financial statements referred 









to therein and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Agreement and to become a Lender under the Credit Agreement, (ii) agrees that it will, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Credit Agreement and the other Loan Documents, (iii) irrevocably authorizes the Administrative Agent to take such action on its behalf under this Agreement, the other Loan Documents and any other instruments and agreements referred to herein or therein and to exercise such powers and to perform such duties as are specifically delegated to or required of the Administrative Agent by the terms thereof and such other powers as are reasonably incidental thereto and (iv) agrees that it will perform in accordance with their terms all of the obligations which by the terms of the Credit Agreement and the other Loan Documents are required to be performed by it as a Lender.
In order to effect the Incremental Term Loan as contemplated hereby, each party hereto acting pursuant to Section 2.24(d) of the Credit Agreement hereby agrees that the Credit Agreement is hereby amended by amending and restating Section 2.9(g) in its entirety to read as follows: 
“(g)    The Borrower unconditionally promises to pay to the Administrative Agent for the account of the Lenders holding the Term Loan A-3, (i) on each of March 31, 2017 and June 30, 2017, $1,219,757.36, (ii) on the last Business Day of each of March, June, September and December commencing on September 29, 2017, a principal amount equal to $122,580,588.57 multiplied by (A) 1.25%, for the first six (6) such quarterly installments, (B) 1.875%, for the next eight (8) quarterly installments thereafter and (C) 2.5%, for the next four (4) quarterly installments thereafter; provided, that, to the extent not previously paid, the aggregate unpaid principal balance of the Term Loan A-3 shall be due and payable on the Term Loan A-3 Maturity Date.  Payments under this clause (g) shall be made to each Lender holding a Term Loan A-3 based on such Lender’s Pro Rata Share thereof and all such payments shall be adjusted from time to time to account for optional and mandatory prepayments made hereunder.”
Upon the date of (i) the execution of a counterpart of this Agreement by the Incremental Lender, the Administrative Agent, the Borrower and each Guarantor, (ii) the delivery to the Administrative Agent of a fully executed counterpart (including by way of facsimile or other form of electronic transmission permitted under the Credit Agreement) hereof, (iii) the payment of any fees as agreed between Borrower and SunTrust Robinson Humphrey, Inc. (“STRH”) set forth in paragraph C(b)(i) of that certain Engagement Letter, dated November 14, 2016 by and between Borrower and STRH, and (iv) the satisfaction (or waiver in writing) of any other conditions precedent set forth in Section 5 of Annex I hereto (such date, the “Agreement Effective Date”) the Incremental Lender shall (i) fund the Incremental Term Loan on the terms, and subject to the conditions, set forth in the Credit Agreement and in this Agreement and (ii) shall have all of the rights and obligations of a Lender under the Credit Agreement and the other Loan Documents.  As of the Agreement Effective Date, and after giving effect to the transactions contemplated by this Agreement, the aggregate outstanding principal amount of the Term Loans held by each of the Lenders are as set forth on Annex II.
Each of the Borrower and each Guarantor acknowledges and agrees that (i) it shall be liable for all Obligations with respect to the Incremental Facility (as defined in the Credit 




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Agreement) created hereunder and (ii) all such Obligations (including the Incremental Term Loan made by the Incremental Lender) shall constitute (and be included in the definition of) “Secured Obligations” under the Credit Agreement and be entitled to the benefits of the respective Collateral Documents and the Guaranty Agreement as, and to the extent, provided in the Credit Agreement and in such other Loan Documents.  
The Borrower may accept this Agreement by signing the enclosed copies in the space provided below, and returning one copy of same to the Incremental Lender and one copy to the Administrative Agent before the close of business on August 15, 2017.  If the Borrower does not so accept this Agreement by such time, the obligations of the Incremental Lender to provide the Incremental Term Loan as set forth in this Agreement shall be deemed canceled and of no force or effect.
After the execution and delivery to the Administrative Agent of a fully executed copy of this Agreement (including by way of counterparts and by facsimile transmission) by the parties hereto, this Agreement may only be changed, modified or varied by written instrument in accordance with the requirements for the modification of Loan Documents pursuant to Section 10.2 of the Credit Agreement.
THIS AGREEMENT AND THE OBLIGATIONS HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES (BUT, IN ANY EVENT, GIVING EFFECT TO SECTIONS 5-1401 AND 5‐1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW).
[Signature Pages Follow]






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	Very truly yours,

	 

	DNB Capital, LLC, a New York limited liability company

	 

	By: /s/ Philip F. Kurpiewski

	Name:  Philip F. Kurpiewski

	Title:  Senior Vice President

	 

	By:  /s/ Rune Nilsen, Jr.

	Name:  Rune Nilsen, Jr.

	Title:  Senior Vice President

	 

	 














Signature Page to  
Incremental Facility Agreement (August 2017)






Agreed and Accepted as of the date first written above:


SUNTRUST BANK, as Administrative Agent, 
  Issuing Bank and Swingline Lender
By:  /s/ Paula Mueller            
Name:  Paula Mueller
Title:    Director






Signature Page to  
Incremental Facility Agreement (August 2017)






Agreed and Accepted as of the date first written above:
ENCORE CAPITAL GROUP, INC.
By:  /s/ Jonathan Clark    
Name:  Jonathan Clark
Title:    Chief Financial Officer




Signature Page to  
Incremental Facility Agreement (August 2017)






Each Guarantor acknowledges and agrees to each the foregoing provisions of this Incremental Facility Agreement and to the establishment of the Incremental Term Loan and the Obligations incurred related thereto.


MIDLAND CREDIT MANAGEMENT, INC.
MIDLAND FUNDING LLC
MIDLAND PORTFOLIO SERVICES, INC.
MIDLAND FUNDING NCC-2 CORPORATION
MIDLAND INTERNATIONAL LLC
MRC RECEIVABLES CORPORATION
ASSET ACCEPTANCE CAPITAL CORP.
ASSET ACCEPTANCE, LLC
ATLANTIC CREDIT & FINANCE, INC.




By:  /s/ Jonathan Clark                
Name:  Jonathan Clark
Title:  Treasurer




MIDLAND INDIA LLC




By:  /s/ Ashish Masih                 
Name:  Ashish Masih
Title:  President




ASSET ACCEPTANCE RECOVERY SERVICES, LLC
ASSET ACCEPTANCE SOLUTIONS GROUP, LLC
LEGAL RECOVERY SOLUTIONS, LLC




By:  /s/ Darin Herring                 
Name:  Darin Herring
Title:    Vice President, Operations




ATLANTIC CREDIT & FINANCE SPECIAL FINANCE UNIT, LLC
ATLANTIC CREDIT & FINANCE SPECIAL FINANCE UNIT III, LLC






By:  /s/ Greg Call                     
Name:  Greg Call
Title:    Secretary  


Signature Page to  
Incremental Facility Agreement (August 2017)






ANNEX I
TERMS AND CONDITIONS FOR  
INCREMENTAL FACILITY AGREEMENT
1.  Name of Borrower: Encore Capital Group, Inc., a Delaware corporation.
2. Date upon which the Incremental Term Loan is to be made:    August 15, 2017.
3.  Date upon which the Incremental Term Loan matures:  the Term Loan A-3 Maturity Date.
4.  Applicable Margin: Identical to the “Applicable Margin” as defined in the Credit Agreement.
5.  Other Conditions Precedent:
(a)    No Default or Event of Default has occurred and is continuing or will result from the incurrence by the Borrower of the Incremental Term Loan provided by the Incremental Lender as of the date hereof as contemplated by the Incremental Facility Agreement; 
(b)    the Borrower and its Restricted Subsidiaries are in pro forma compliance with each of the covenants set forth in Article VI of the Credit Agreement as of the last date of the most recently ended Fiscal Quarter after giving effect to the Incremental Term Loan provided by the Incremental Lender under the Incremental Facility Agreement on the date hereof; and 
(c)     each of the conditions in Section 3.2 of the Credit Agreement have been satisfied.


































Annex I






ANNEX II


TERM LOAN AMOUNTS, ADDITIONAL TERM LOAN A-3 COMMITMENT AMOUNTS AND INCREMENTAL OR EXTENDED TERM LOAN A-3 AMOUNTS OF INCREASING LENDERS, EXTENDING LENDERS AND NON-EXTENDING LENDERS


Extending Lenders (including any Incremental Lender joining after the Closing Date):


	
													
	Lender
	Aggregate Amount of Term Loan A-2 of Existing Lender Converted to Term Loan A-3 on the Closing Date
	Additional Term Loan A-3 Commitment of Increasing Lenders as of the Closing Date
	Incremental or Extended Term Loan A-3 made or Extended after the Closing Date
	Total Term Loan A-3 as of the Agreement Effective Date1

	SunTrust Bank
	

	$12,690,361.06
	

	

	$2,331,019.21
	

	 
	

	$14,645,845.77
	


	Bank of America
	13,469,866.33
	

	1,551,513.94
	

	 
	14,645,845.77
	


	ING Capital
	7,533,482.17
	

	142,787.76
	

	 
	7,484,363.19
	


	MUFG Union Bank, NA
	2,260,044.66
	

	2,337,004.18
	

	 
	4,482,122.62
	


	Citibank, NA
	5,273,437.52
	

	 
	 
	5,141,601.58
	


	California Bank and Trust
	6,428,571.75
	

	 
	 
	6,267,857.45
	


	Flagstar Bank
	 
	25,000,000.00
	

	 
	24,375,000.00
	


	Bank Leumi USA
	3,570,870.47
	

	661,272.39
	

	 
	4,126,339.26
	


	Northwest Bank
	4,656,250.00
	

	343,750.00
	

	 
	4,875,000.00
	


	Umpqua Bank
	 
	 
	2,578,124.98
	

	2,513,671.86
	


	Cathay Bank
	 
	 
	1,752,232.15
	

	1,708,426.35
	


	Woodforest National Bank
	 
	 
	5,000,000.00
	

	4,875,000.00
	


	DNB Capital, LLC
	 
	 
	25,000,000.00
	

	25,000,000.00
	


	Total
	

	$55,882,883.96
	

	

	$32,367,347.48
	

	

	$34,330,357.13
	

	$
	120,141,073.85
	







Non-Extending Lenders:


	
							
	Lender
	Term Loan A as of the Agreement Effective Date1
	Term Loan A-2 as of the Agreement Effective Date1

	Fifth Third Bank
	 
	

	$6,920,602.37
	


	Raymond James Bank, N.A.
	 
	7,265,625.00
	


	Chang Hwa
	 
	1,383,928.58
	


	Israel Discount Bank
	

	$2,544,642.85
	

	 

	Amalgamated Bank
	1,908,482.12
	

	 

	Manufacturers Bank
	________________
	

	1,383,928.58
	


	Total
	

	$4,453,124.97
	

	$
	16,954,084.53
	





1 Amounts reflect reductions to the outstanding Term Loan principal resulting from amortization prior to the Agreement Effective Date.


Annex II