Document:

Exhibit

Exhibit 10.3

ENCORE CAPITAL GROUP, INC. 
PERFORMANCE STOCK GRANT NOTICE - EXECUTIVE
(ADJUSTED EARNINGS PER SHARE) 
(2013 INCENTIVE COMPENSATION PLAN)
Encore Capital Group, Inc. (the “Company”), pursuant to its 2013 Incentive Compensation Plan (as amended, the “2013 Plan”), hereby awards to Participant a Performance Stock Award for the number of shares of the Company’s Common Stock set forth below (the “Award”).  The Award is subject to all of the terms and conditions as set forth herein and in the Performance Stock Agreement and the 2013 Plan, which are attached hereto as Attachments I and II, respectively, and incorporated herein in their entirety. Capitalized terms not otherwise defined herein shall have the meanings set forth in the 2013 Plan or the Performance Stock Agreement.  In the event of any conflict between the terms in the Award and the 2013 Plan, the terms of the 2013 Plan shall control.	
		
	Participant:
	[FIRST NAME] [LAST NAME]

	Date of Grant:
	 

	Vesting Date:
	See Vesting Schedule below

	Number of Shares Subject to Award:
	Threshold: 1/2 number of Target shares

	 
	Target: [TOTAL SHARES GRANTED]

	 
	Maximum: 2x number of Target shares

	Consideration:
	Participant’s Services

	Vesting Schedule:
	1/3 of Threshold shares will vest if FY 2016 EPS equals $___;

	 
	1/3 of Target shares will vest if FY 2016 EPS equals $___; or

	 
	1/3 of Maximum shares will vest if FY 2016 EPS equals $___.

	 
	If FY 2016 EPS is between $___ and $___, then the number of shares between 1/3 of Threshold and 1/3 of Target that will vest will be determined by linear interpolation.

	 
	If FY 2016 EPS is between $___ and $___, then the number of  shares between 1/3 of Target and 1/3 of Maximum that will vest will be determined by linear interpolation. 

	 
	1/3 of Threshold shares will vest if FY 2017 EPS equals $___;

	 
	1/3 of Target shares will vest if FY 2017 EPS equals $___; or

	 
	1/3 of Maximum shares will vest if FY 2017 EPS equals $___.

	 
	If FY 2017 EPS is between $___ and $___, then the number of shares between 1/3 of Threshold and 1/3 of Target that will vest will be determined by linear interpolation.

	 
	If FY 2017 EPS is between $___ and $___, then the number of shares between 1/3 of Target and 1/3 of Maximum that will vest will be determined by linear interpolation.

	 
	1/3 of Threshold shares will vest if FY 2018 EPS equals $___;

	 
	1/3 of Target shares will vest if FY 2018 EPS equals $___; or

	 
	1/3 of Maximum shares will vest if FY 2018 EPS equals $___.

	 
	If FY 2018 EPS is between $___ and $___, then the number of shares between 1/3 of Threshold and 1/3 of Target that will vest will be determined by linear interpolation.

	 
	If FY 2018 EPS is between $___ and $___, then the number of shares between 1/3 of Target and 1/3 of Maximum that will vest will be determined by linear interpolation.

        

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	In addition, if the sum of FY 2016 EPS, FY 2017 EPS and FY 2018 EPS equals $___, then Threshold shares will vest (less any shares already vested).  If the sum of FY 2016 EPS, FY 2017 EPS and FY 2018 EPS equals $___, then Target shares will vest (less any shares already vested). If the sum of FY 2016 EPS, FY 2017 EPS and FY 2018 EPS equals $___, then Maximum shares will vest (less any shares already vested).  If the sum of FY 2016 EPS, FY 2017 EPS and FY 2018 EPS is between $___ and $___, then the number of shares that will vest will be determined by linear interpolation (less any already vested shares).  If the sum of FY 2016 EPS, FY 2017 EPS and FY 2018 EPS is between $___ and $___, then the number of shares that will vest will be determined by linear interpolation (less any already vested shares).

	 
	Within 15 days of the release of the Company’s audited financial statements for the applicable fiscal year (or, in the case of the calculation of the sum of FY 2016 EPS, FY 2017 EPS and FY 2018 EPS, within 15 days of the release of the Company’s audited financial statements for FY 2018), the Committee will certify in writing whether the EPS goal for such fiscal year has been met and determine the number of shares, if any, that will vest based on the EPS achieved for such fiscal year. If the shares have not already been distributed to the Participant, the Company shall distribute such shares to the Participant within 10 days of the Committee’s written certification. 

	 
	In addition, the vesting of the shares may accelerate in the sole discretion of the Committee and upon certain events described in the Performance Stock Agreement.  Notwithstanding the foregoing, but except as otherwise provided in the Performance Stock Agreement, vesting shall terminate upon the Participant’s termination of Continuous Service.

Additional Terms/Acknowledgments:  Participant acknowledges receipt of, and understands and agrees to, this Performance Stock Grant Notice, the Performance Stock Agreement and the 2013 Plan.  Participant further acknowledges that as of the Date of Grant, this Performance Stock Grant Notice, the Performance Stock Agreement and the 2013 Plan set forth the entire understanding between Participant and the Company regarding the Award and supersede all prior oral and written agreements on that subject. 
Participant further agrees that the Company may deliver by e-mail all documents relating to the 2013 Plan or this Award (including without limitation, prospectuses required by the Securities and Exchange Commission) and all other documents that the Company is required to deliver to its security holders (including without limitation, annual reports and proxy statements).  Participant also agrees that the Company may deliver these documents by posting them on a website maintained by the Company or by a third party under contract with the Company.  If the Company posts these documents on a website, it will notify Participant by e-mail.
	
					
	ENCORE CAPITAL GROUP, INC.:
	 
	PARTICIPANT:

	__________________________________
	 
	 ___________________________________________

	Kenneth A. Vecchione
	 
	[FIRST NAME] [LAST NAME]

	Title: President and Chief Executive Officer    
	 
	Date: ________________________________________

	Date: __________________________________ 
	 
	 
	 

	
			
	ATTACHMENT: 
	Performance Stock Agreement
	 

	 
	2013 Incentive Compensation Plan
	 

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ATTACHMENT I
ENCORE CAPITAL GROUP, INC.
2013 INCENTIVE COMPENSATION PLAN
PERFORMANCE STOCK AGREEMENT - EXECUTIVE
(ADJUSTED EARNINGS PER SHARE)
Pursuant to the Performance Stock Grant Notice (“Grant Notice”) and this Performance Stock Agreement and in consideration of your services, Encore Capital Group, Inc. (the “Company”) has awarded you a performance stock award (the “Award”) under its 2013 Incentive Compensation Plan (as amended, the “2013 Plan”) for the number of shares of the Company’s Common Stock as indicated in the Grant Notice. Your Award is granted to you effective as of the Date of Grant set forth in the Grant Notice for this Award.  Defined terms not explicitly defined in this Performance Stock Agreement shall have the same meanings given to them in the 2013 Plan.  In the event of any conflict between the terms in this Performance Stock Agreement and the 2013 Plan, the terms of the 2013 Plan shall control.
In consideration of the mutual covenants herein contained and other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto do hereby agree that the details of your Award are as follows:
1.    VESTING.  
(a)    In General.  Subject to the limitations contained herein, your Award will vest in accordance with the vesting schedule provided in the Grant Notice, provided that, except as set forth in Section 1(b), vesting will cease upon the termination of your Continuous Service.   For purposes of this Award, “Continuous Service” means that your service with the Company or an Affiliate (as defined below), whether as an employee, director or consultant, is not interrupted or terminated.  A change in the capacity in which you render service to the Company or an Affiliate as an employee, consultant or director or a change in the entity for which you render such service shall not terminate your Continuous Service, provided that there is no interruption or termination of your service with the Company or an Affiliate.  For example, a change in status from an employee of the Company to a consultant to an Affiliate or to a director shall not constitute an interruption of Continuous Service.  To the extent permitted by law, the Board or its compensation committee or any officer designated by the Board or its compensation committee, in that party’s sole discretion, may determine whether Continuous Service shall be considered interrupted in the case of any leave of absence approved by that party, including sick leave, military leave or any other personal leave.  Notwithstanding the foregoing, a leave of absence shall be treated as Continuous Service for purposes of vesting to such extent as may be provided in the Company’s leave of absence policy, in the written terms of any leave of absence agreement or policy applicable to you, or as otherwise required by law.  For purposes of this Performance Stock Agreement, “Affiliate” means: (i) any Subsidiary; and (ii) any other entity in which the Company has an equity interest or significant 

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business relationship and which has been designated as an “Affiliate” by the Committee for purposes of the 2013 Plan. 
(b)    Vesting Acceleration. Notwithstanding the foregoing, in the event (i) of the termination of your Continuous Service to the Company as a result of your death or disability, or (ii) your employment is terminated without Cause (as defined below) or you resign your employment for Good Reason (as defined below) in connection with a Change of Control (as defined below) or within 12 months after a Change of Control, the Award shall be deemed to be fully (100%) vested and eligible for settlement as of immediately prior to your death or disability or as of your termination of employment without Cause or for Good Reason as a result of or following a Change of Control. The consummation of a Change of Control transaction in itself shall not be deemed a termination of employment entitling you to vesting acceleration hereunder even if such event results your being employed by a different entity. 
For purposes of this Performance Stock Agreement, “Cause” is defined as (i) your failure to adhere to any written policy of the Company that is legal and generally applicable to employees of the Company; (ii) your failure to substantially perform your duties, which failure amounts to a repeated and consistent neglect of your duties; (iii) the appropriation (or attempted appropriation) of a material business opportunity of the Company, including attempting to secure or securing any personal profit in connection with any transaction entered into on behalf of the Company; (iv) the misappropriation (or attempted misappropriation) of any of the Company’s funds or property; (v) the conviction of, or the entering of a guilty plea or plea of no contest with respect to, a felony, the equivalent thereof, a crime of moral turpitude or any other crime with respect to which imprisonment is a possible punishment; (vi) conduct materially injurious to the Company’s reputation or business; or (vii) willful misconduct. 

For purposes of this Performance Stock Agreement, “Change of Control” means: (i) any sale, lease, exchange, or other transfer (in one transaction or series of related transactions) of all or substantially all the Company’s assets to any person (as defined in Section 3(a)(9) of the Exchange Act) or group of related persons (as such term is defined under Section 13(d) of the Exchange Act, “Group”); (ii) the Company’s stockholders approve and complete any plan or proposal for the liquidation or dissolution of the Company; (iii) any person or Group (other than Red Mountain Capital Partners LLC, JCF FPK I LP or any affiliate thereof) becomes the beneficial owner, directly or indirectly, of shares representing more than 50.1% of the aggregate voting power of the issued and outstanding stock entitled to vote in the election of directors of the Company (“Voting Stock”) and such person or Group has the power and authority to vote such shares; or (iv) the completion of a merger, reorganization, consolidation or other corporate transaction involving the Company in which holders of the Company’s Voting Stock immediately before the completion of the transaction hold, directly or indirectly, immediately after the transaction, 50% or less of the common equity interest in the surviving corporation or other entity resulting from the transaction.

For purposes of this Performance Stock Agreement, “Good Reason” is defined as any of the following reasons: (i) a material reduction in your base compensation; (ii) a material reduction in your authority, duties or responsibilities; (iii) a material reduction in the authority, duties or responsibilities of the person to whom you report; (iv) a material reduction in the budget 

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over which you retain authority; or (v) a material change in the location at which you provide services for the Company (which is defined as any relocation by the Company of your employment to a location that is more than 35 miles from your present office location and is more than 35 miles from your primary residence at the time of such relocation, without your consent). To be eligible to receive the benefits set forth in this Section, (x) you must provide written notice of the “Good Reason” condition to the Company within 90 days after the initial existence of such condition, (y) the Company must not have cured such condition within 30 days of receipt of your written notice or it must have stated unequivocally in writing that it does not intend to attempt to cure such condition; and (z) you resign from employment within 12 months following the end of the period within which the Company was entitled to remedy the condition constituting Good Reason but failed to do so. 
2.    NUMBER OF SHARES.  The number of shares subject to your Award will be determined by the achievement of the performance goals set forth in the Grant Notice.  In addition, the number of shares subject to your Award may be adjusted from time to time to reflect capitalization adjustments, as provided in the 2013 Plan.
3.    SECURITIES LAW COMPLIANCE.  You may not be issued any shares under your Award unless the shares are either: (i) then registered under the Securities Act of 1933, as amended; or (ii) the Company has determined that such issuance would be exempt from the registration requirements of the Securities Act of 1933, as amended. Your Award also must comply with other applicable laws and regulations governing the Award, and you will not receive such shares if the Company determines that such receipt would not be in material compliance with such laws and regulations.
4.    LIMITATIONS ON TRANSFER.  Your Award is not transferable, except by will or by the laws of descent and distribution.  In addition to any other limitation on transfer created by applicable securities laws, you agree not to assign, hypothecate, donate, encumber or otherwise dispose of any interest in any of the shares of Common Stock subject to the Award until the shares are vested in accordance with this Performance Stock Agreement.  After the shares have vested and applicable tax withholding conditions have been satisfied, the shares will be issued to you and you will be free to assign, hypothecate, donate, encumber or otherwise dispose of any interest in such shares provided that any such actions are in compliance with the provisions herein and applicable securities laws.
5.    RIGHTS AS A STOCKHOLDER; DIVIDEND EQUIVALENT RIGHTS. Except as set forth in the remainder of this Section 5, you shall have no voting or other rights as a stockholder with respect to the shares of Common Stock underlying the Award until such shares of Common Stock have been issued to you. Notwithstanding the preceding sentence, however, you shall be entitled to receive payments equal to any cash dividends and other distributions paid with respect to the shares covered by your Award, provided that such distributions shall be converted into additional shares covered by the Award.   If such distributions are paid in cash, you shall be credited with additional shares covered by the Award in an amount equal to (i) the amount of the dividends or other distributions paid on that number of shares equal to the aggregate number of shares covered 

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by the Award as of that date divided by (ii) the Fair Market Value of a share as of such date.  The additional shares credited as dividend equivalents shall be subject to the same vesting and forfeiture restrictions as the shares covered by the Award with respect to which they relate.
6.    RESTRICTIVE LEGENDS.  The shares issued under your Award shall be endorsed with appropriate legends determined by the Company.
7.    AWARD NOT A SERVICE CONTRACT.  
(a)    Your Continuous Service with the Company or an Affiliate is not for any specified term and may be terminated by you or by the Company or an Affiliate at any time, for any reason, with or without cause and with or without notice.  Nothing in this Performance Stock Agreement (including, but not limited to, the vesting of your Award pursuant to the schedule set forth in the Grant Notice), the 2013 Plan or any covenant of good faith and fair dealing that may be found implicit in this Performance Stock Agreement or the 2013 Plan shall:  (i) confer upon you any right to continue in the employ of, or affiliation with, the Company or an Affiliate; (ii) constitute any promise or commitment by the Company or an Affiliate regarding the fact or nature of future positions, future work assignments, future compensation or any other term or condition of employment or affiliation; (iii) confer any right or benefit under this Performance Stock Agreement or the 2013 Plan unless such right or benefit has specifically accrued under the terms of this Performance Stock Agreement or 2013 Plan; or (iv) deprive the Company of the right to terminate you at will and without regard to any future vesting opportunity that you may have.
(b)    By accepting this Award, you acknowledge and agree that the right to continue vesting in the Award pursuant to the schedule set forth in the Grant Notice is earned only by continuing as an employee, director or consultant at the will of the Company (not through the act of being hired, being granted this Award or any other award or benefit) and that the Company has the right to reorganize, sell, spin-out or otherwise restructure one or more of its businesses or Affiliates at any time or from time to time, as it deems appropriate (a “reorganization”).  You further acknowledge and agree that such a reorganization could result in the termination of your Continuous Service, or the termination of Affiliate status of your employer and the loss of benefits available to you under this Performance Stock Agreement, including but not limited to, the termination of the right to continue vesting in the Award.  You further acknowledge and agree that this Performance Stock Agreement, the 2013 Plan, the transactions contemplated hereunder and the vesting schedule set forth herein or any covenant of good faith and fair dealing that may be found implicit in any of them do not constitute an express or implied promise of continued engagement as an employee or consultant for the term of this Performance Stock Agreement, for any period, or at all, and shall not interfere in any way with your right or the Company’s right to terminate your Continuous Service at any time, with or without cause and with or without notice.

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8.    WITHHOLDING OBLIGATIONS.
(a)    On or before vesting of the shares pursuant to your Award, or at any time thereafter as requested by the Company, you hereby authorize withholding from payroll and/or any other amounts payable to you, provided that any such withholding will not be in excess of the minimum statutory withholding requirement or other applicable accounting pronouncements or requirements, and otherwise agree to make adequate provision for any sums required to satisfy the federal, state, local and foreign tax withholding obligations of the Company or an Affiliate, if any, which arise in connection with your Award.   If permissible under applicable law, the Company may, in its sole discretion: (i) sell or arrange for the sale, on your behalf, of shares acquired by you to meet the withholding obligation and/or (ii) withhold in shares, provided that only the amount of shares necessary to satisfy the minimum withholding amount or other applicable accounting pronouncements or requirements are withheld.  The Company also reserves the right to require that you assume liability for any tax- and/or social insurance-related charges that may otherwise be due by the Company or an Affiliate with respect to the Award, if the Company determines in its sole discretion that such charges may legally be transferred to you.  To the extent that liability for any such charges is transferred to you, such charges will be subject to the applicable withholding methods set forth in this Section.
(b)    Unless the tax withholding obligations of the Company and/or any Affiliate are satisfied, the Company shall have no obligation to remove the restrictive legends from the shares of Common Stock subject to your Award.
9.    NOTICES.  Any notices provided for in your Award or the 2013 Plan shall be given in writing and shall be deemed effectively given upon receipt or, in the case of notices delivered by the Company to you, five (5) days after deposit in the United States mail, postage prepaid, addressed to you at the last address you provided to the Company.
10.    MISCELLANEOUS.
(a)    The rights and obligations of the Company under your Award shall be transferable to any one or more persons or entities, and all covenants and agreements hereunder shall inure to the benefit of, and be enforceable by the Company’s successors and assigns. 
(b)    For purposes of your personal tax planning, you may make an election under Section 83(b) of the Code within 30 days of the date of grant; however, this election by you will be in your sole discretion.  We strongly advise you to consult with your personal legal, tax and financial advisors before you make such an election. 
(c)    You agree upon request to execute any further documents or instruments necessary or desirable in the sole determination of the Company to carry out the purposes or intent of your Award.

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(d)    You acknowledge and agree that you have reviewed your Award in its entirety, have had an opportunity to obtain the advice of counsel prior to executing and accepting your Award, and fully understand all provisions of your Award.
(e)    The Committee may, to the extent permitted under Section 162(m) of the Code , adjust performance goals to omit the effects of extraordinary items, gain or loss on the disposal of a business segment, unusual or infrequently occurring events and transactions and cumulative effects of changes in accounting principles, including, but not limited to, asset write-downs, litigation or claim judgments or settlements, changes in tax laws or other laws or provisions affecting reported results, any reorganization and restructuring programs, acquisitions or divestitures, and foreign exchange gains and losses.

11.    GOVERNING PLAN DOCUMENT.  Your Award is subject to all the provisions of the 2013 Plan, the provisions of which are hereby made a part of your Award, and is further subject to all interpretations, amendments, rules and regulations which may from time to time be promulgated and adopted pursuant to the 2013 Plan.  In the event of any conflict between the provisions of your Award and those of the 2013 Plan, the provisions of the 2013 Plan shall control. Any question concerning the interpretation of this Performance Stock Agreement, any adjustments to be made thereunder, and any controversy that may arise under this Performance Stock Agreement will be determined by the Committee in accordance with its authority under Section 5.6 of the 2013 Plan. Such decision by the Committee will be final and binding.
12.    SEVERABILITY.  If all or any part of this Performance Stock Agreement or the 2013 Plan is declared by any court or governmental authority to be unlawful or invalid, such unlawfulness or invalidity shall not invalidate any portion of this Performance Stock Agreement or the 2013 Plan not declared to be unlawful or invalid. Any Section of this Performance Stock Agreement (or part of such a Section) so declared to be unlawful or invalid shall, if possible, be construed in a manner which will give effect to the terms of such Section or part of a Section to the fullest extent possible while remaining lawful and valid.
13.    EFFECT ON OTHER EMPLOYEE BENEFIT PLANS.  The value of the Award subject to this Performance Stock Agreement shall not be included as compensation, earnings, salaries, or other similar terms used when calculating the Employee’s benefits under any employee benefit plan sponsored by the Company or any Affiliate, except as such plan otherwise expressly provides. The Company expressly reserves its rights to amend, modify, or terminate any of the Company’s or any Affiliate’s employee benefit plans.
14.    AMENDMENT.  This Performance Stock Agreement may not be modified, amended or terminated except by an instrument in writing, signed by you and by a duly authorized representative of the Company. Notwithstanding the foregoing, this Performance Stock Agreement may be amended solely by the Board by a writing which specifically states that it is amending this Performance Stock Agreement, so long as a copy of such amendment is delivered to you, and provided that no such amendment adversely affecting your rights hereunder may be made without 

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your written consent. Without limiting the foregoing, the Board reserves the right to change, by written notice to you, the provisions of this Performance Stock Agreement in any way it may deem necessary or advisable to carry out the purpose of the grant as a result of any change in applicable laws or regulations or any future law, regulation, ruling, or judicial decision, provided that any such change shall be applicable only to rights relating to that portion of the Award which is then subject to restrictions as provided herein.

7Exhibit

Exhibit 10.4

AMENDMENT NO. 3 TO  
SECOND AMENDED AND RESTATED CREDIT AGREEMENT,  
LIMITED WAIVER AND LIMITED RELEASE 
This AMENDMENT NO. 3 TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT, LIMITED WAIVER AND LIMITED RELEASE (this “Amendment”), dated as of March 24, 2016, is entered into by and among ENCORE CAPITAL GROUP, INC., a Delaware corporation (the “Borrower”), the Guarantors identified on the signature pages hereto, the Lenders party hereto, and SUNTRUST BANK, as Administrative Agent (in such capacity, the “Administrative Agent”), Collateral Agent (in such capacity, the “Collateral Agent”), Swingline Lender and Issuing Bank. 

RECITALS
WHEREAS, the Borrower, the Lenders and the Administrative Agent are parties to that certain Second Amended and Restated Credit Agreement dated as of February 25, 2014 (as amended by that certain (a) Amendment No. 1 to Second Amended and Restated Credit Agreement dated as of August 1, 2014 and (b) Amendment No. 2 to Second Amended and Restated Credit Agreement dated as of July 9, 2015 and as the same may be further amended, restated, extended, supplemented or otherwise modified from time to time, the “Credit Agreement”), pursuant to which the Lenders have extended revolving credit and term loan facilities to the Borrower; 
WHEREAS, the Borrower and certain of its Subsidiaries have entered into that certain Securities Purchase Agreement, dated as of February 19, 2016, by and among the Borrower, as seller, certain Affiliates of the Borrower party thereto, as “Transferring Subsidiaries” (as defined therein), TL Funding Partners LP and certain Affiliates thereof, as purchasers (as amended pursuant to that certain Consent and Waiver Letter Agreement, dated March 22, 2016, the “Propel Stock Purchase Agreement”) to sell all of the equity interests of Propel Acquisition LLC (or any successor thereto formed by the merger of Propel Acquisition LLC into a newly formed wholly owned Subsidiary of the Borrower the only assets of which, following the consummation of the merger, will be the assets of Propel Acquisition LLC so acquired in such merger) and each of its Subsidiaries (the “Propel Disposition”); and  
WHEREAS, in connection with the sale described above, the Borrower has requested (i) certain amendments to the Credit Agreement set forth herein for the purpose of permitting the consummation of such sale, (ii) that the Collateral Agent release the security interest, on its own behalf and on behalf of the Secured Parties, in (x) the equity interests held by the Borrower in Propel Acquisition LLC (the “Propel Acquisition Equity Interests”) and (y) the Collateral pledged by each of Propel Acquisition LLC and Propel Funding LLC to the extent such Collateral constitutes assets sold pursuant to the Propel Stock Purchase Agreement, including but not limited to the equity interests set forth on Annex I hereto (the “Released Equity Interests” and together with the Propel Acquisition Equity Interests and all other Collateral pledged to the Collateral Agent, for its own benefit and the benefit of the Secured Parties, by each of Propel Acquisition LLC and Propel Funding LLC to the extent such Collateral constitutes assets sold pursuant to the Propel Stock Purchase Agreement, collectively, the “Released Collateral”) in accordance with Section 9.15(d) of the Credit Agreement, and (iii) that the Required Lenders waive the requirement that the Borrower prepay the Loans as required by Section 2.12(a) of the Credit Agreement with the Net Cash Proceeds received in respect of the Propel Disposition, and the Administrative Agent, the Collateral Agent, the Swingline Lender, 

the Issuing Bank and the undersigned Lenders have agreed to such requests, subject to the terms and conditions of this Amendment.
NOW, THEREFORE, for valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto hereby agree as follows:
1.Defined Terms.  Unless otherwise defined herein, capitalized terms used herein shall have the meanings assigned to such terms in the Credit Agreement, as amended by this Amendment.  
2.    Amendments to Credit Agreement.  Subject to the terms and conditions hereof and with effect from and after the Third Amendment Effective Date (as defined below), the Credit Agreement is hereby amended as follows:
(a)    Section 1.1 of the Credit Agreement is hereby amended by adding the following new definitions in proper alphabetical order: 
“‘Propel Disposition’ means an Asset Sale to be consummated by the Borrower and the Transferring Subsidiaries (as defined in the Propel Stock Purchase Agreement) in accordance with the Propel Stock Purchase Agreement.”
“‘Propel Stock Purchase Agreement’ means that certain Securities Purchase Agreement, dated as of February 19, 2016, by and among the Borrower, as seller, certain Affiliates of the Borrower party thereto, as “Transferring Subsidiaries” (as defined therein), TL Funding Partners LP and certain Affiliates thereof, as purchasers, as amended pursuant to that certain Consent and Waiver Letter Agreement, dated March 22, 2016.”  
(b)    Section 7.6 of the Credit Agreement is hereby amended by (i) deleting the word “and” at the end of clause (e) thereof, (ii) replacing the “.” at the end of clause (f) thereof with “; and”, and (iii) adding the following new clause (g) to the end of such section:  
“(g)    the Propel Disposition, so long as (i) at the time of the consummation of the Propel Disposition, no Default or Event of Default has occurred and is continuing or would result therefrom and (ii) within five (5) Business Days following the receipt thereof, the Borrower prepays the Revolving Loans with 100% of the Net Cash Proceeds received in respect thereof (for the avoidance of doubt, such required prepayment of the Revolving Loans shall not be accompanied by a corresponding permanent reduction of the Revolving Commitments).”
3.    Limited Release.  Subject to the terms and conditions hereof, following the occurrence of the Third Amendment Effective Date and effective upon the Closing Date (as defined in the Propel Stock Purchase Agreement), the security interest granted pursuant to the Pledge and Security Agreement solely with respect to the Released Collateral shall be automatically released without any further action required by any Person. It is expressly agreed and understood that the foregoing release is solely a partial release and that the same shall in no way discharge, waive, release, affect, or impair the liens, security interests and other encumbrances of (or the Obligations of the Borrower or any Restricted Subsidiary in respect of) 

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the Pledge and Security Agreement against any property other than the Released Collateral and all Collateral other than the Released Collateral shall continue to constitute part of the Collateral in all respects.  Effective upon the Closing Date (as defined in the Propel Stock Purchase Agreement), (i) the Collateral Agent hereby authorizes the filing of any UCC financing statement amendments to evidence the release set forth herein and agrees to execute and/or deliver or cause to be executed and/or delivered, at the Borrower’s expense, such other instruments or documents as the Borrower may reasonably request or as may be necessary to evidence or give effect to the release set forth herein and (ii) each of Propel Acquisition LLC and Propel Funding LLC shall be automatically released (x) from the guaranty of the Obligations in accordance with Section 4(B) of the Guaranty Agreement and (y) as a Grantor under the Pledge and Security Agreement.
4.    Limited Waiver.  Subject to the terms and conditions hereof, and without limiting the requirement set forth in Section 7.6(g) of the Credit Agreement (after giving effect to this Amendment), following the occurrence of the Third Amendment Effective Date, the undersigned Lenders hereby waive the requirement that the Borrower prepay the Loans pursuant to Section 2.12(a) of the Credit Agreement solely with respect to the Net Cash Proceeds received by the Borrower in respect of the Propel Disposition.  The waiver set forth in the foregoing sentence is a one-time waiver and is limited to the extent specifically set forth above and no other terms, covenants or provisions of the Credit Agreement or any other Loan Document are intended to be affected hereby all of which remain in full force and effect.  The Borrower acknowledges and agrees that the limited waiver contained in this Section 4 shall not be deemed to be or constitute a consent to any future action or inaction on the part of the Borrower or any other Loan Party, shall not waive or amend (or be deemed to be or constitute a waiver of or amendment to) any other covenant, term or provision in the Credit Agreement or any of the other Loan Documents, and shall not hinder, restrict or otherwise modify the rights and remedies of the Administrative Agent or the Lenders following the occurrence of any Event of Default or any other event which, with the giving of notice or the passage of time, or both, would constitute an Event of Default (whether now existing or hereafter arising) under the Credit Agreement or any other Loan Document.
5.    Representations and Warranties.  The Borrower and the Guarantors hereby represent and warrant to the Administrative Agent, the Collateral Agent, the Swingline Lender, the Issuing Bank and the Lenders as follows:
(a)    No Default or Event of Default has occurred and is continuing as of the date hereof, nor will any Default or Event of Default exist immediately after giving effect to this Amendment.
(b)    The representations and warranties contained in Article V of the Credit Agreement are true and correct in all material respects (except for representations and warranties already covered by concepts of materiality, which are true and correct in all respects) as of the date hereof (except for representations and warranties made with reference to an earlier date, which are true and correct in all material respects (except for representations and warranties already covered by concepts of materiality, which are true and correct in all respects) as of such date). 
(c)    The execution, delivery and performance by each Loan Party of this Amendment are within such Loan Party’s organizational powers and have been duly authorized by all necessary organizational, and if required, shareholder, partner or member, action.  This Amendment has been duly executed and delivered by each Loan Party.  Each of this Amendment and the Credit Agreement, as amended hereby, constitute the valid and binding obligations of the Loan Parties, enforceable against them in 

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accordance with their respective terms, except as may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting the enforcement of creditors’ rights generally and by general principles of equity.
(d)    The execution and delivery of this Amendment by the Loan Parties, and performance by the Borrower of this Amendment and the Credit Agreement, as amended hereby (i) do not require any consent or approval of, registration or filing with, or any action by, any Governmental Authority, except those as have been obtained or made and are in full force and effect, (ii) will not violate any organizational documents of, or any law applicable to, any Loan Party or any judgment, order or ruling of any Governmental Authority, (iii) will not violate or result in a default under the Credit Agreement, the Prudential Senior Secured Note Agreement, any Material Indebtedness Agreement, any other material agreement or other material instrument binding on any Loan Party or any of their assets or give rise to a right thereunder to require any payment to be made by any Loan Party, (iv) will not result in the creation or imposition of any Lien on any asset of any Loan Party, except Liens (if any) created under the Loan Documents and/or (v) will not result in a material limitation on any licenses, permits or other governmental approvals applicable to the business, operations or properties of the Loan Parties.
(e)    The execution, delivery, performance and effectiveness of this Amendment will not: (i) impair the validity, effectiveness or priority of the Liens granted pursuant to any Loan Document, and such Liens (other than the Liens on the Released Collateral after giving effect to the limited release set forth in Section 3) continue unimpaired with the same priority to secure repayment of all of the applicable Obligations, whether heretofore or hereafter incurred and (ii) require that any new filings be made or other action taken to perfect or to maintain the perfection of such Liens.
6.    Effective Date.  
(a)    This Amendment will become effective on the date on which each of the following conditions has been satisfied (the “Third Amendment Effective Date”) to the satisfaction of the Administrative Agent:
(i)    the Administrative Agent shall have received counterparts of this Amendment duly executed by the Loan Parties and the Required Lenders;
(ii)    the Borrower shall have paid to Administrative Agent all amounts, including any fees, due and payable hereunder or in connection herewith on or prior to the date hereof, including reimbursement or payment of all out-of-pocket expenses, including all fees, charges and disbursements of counsel to the Administrative Agent (directly to such counsel if requested by the Administrative Agent) to the extent invoiced on or prior to the date of this Amendment, plus such additional amounts of such fees, charges and disbursements as shall constitute its reasonable estimate of such fees, charges and disbursements incurred or to be incurred by it through the closing proceedings; 
(iii)    the Administrative Agent shall have received a certified copy of an amendment to the Prudential Senior Secured Note Agreement duly executed by each party thereto, in form and substance acceptable to the Administrative Agent; and

4

(iv)    the Administrative Agent shall have received such other instruments, documents and certificates as the Administrative Agent shall reasonably request on or prior to the date of this Amendment in connection with the execution of this Amendment. 
(b)    For purposes of determining compliance with the conditions specified in this Section 6, each Lender that has executed this Amendment and delivered it to the Administrative Agent shall be deemed to have consented to, approved or accepted, or to be satisfied with, each document or other matter required under this Section 6 to be consented to or approved by or acceptable or satisfactory to such Lender unless the Administrative Agent shall have received written notice from such Lender prior to the proposed Third Amendment Effective Date specifying its objection thereto.
(c)    From and after the Third Amendment Effective Date, the Credit Agreement is amended as set forth herein.  Except as expressly amended pursuant hereto, the Credit Agreement shall remain unchanged and in full force and effect and is hereby ratified and confirmed in all respects.    
(d)    The Administrative Agent will notify the Borrower and the Lenders of the occurrence of the Third Amendment Effective Date.
7.    Miscellaneous.
(a)    Except as herein expressly amended, all terms, covenants and provisions of the Credit Agreement and each other Loan Document are and shall remain in full force and effect and all references in any Loan Document to the “Credit Agreement” shall henceforth refer to the Credit Agreement as amended by this Amendment.  Nothing in this Amendment or in any of the transactions contemplated hereby is intended, or shall be construed, to constitute a novation or an accord and satisfaction of any of the Obligations of the Borrower under the Credit Agreement or to modify, affect or impair the perfection, priority or continuation of the security interests in, security titles to or other Liens on any Collateral (other than the Released Collateral after giving effect to the limited release set forth in Section 3) for the Obligations.
(b)    This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.  
(c)    THIS AMENDMENT IS SUBJECT TO THE PROVISIONS OF SECTIONS 10.6 AND 10.7 OF THE CREDIT AGREEMENT RELATING TO GOVERNING LAW, JURISIDICTION AND WAIVER OF RIGHT TO TRIAL BY JURY, THE PROVISIONS OF WHICH ARE BY THIS REFERENCE INCORPORATED HEREIN IN FULL.
(d)    This Amendment may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract.  This Amendment and the other Loan Documents constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof.  Subject to Section 6 above, this Amendment shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof that, when taken together, bear the signatures of each of the other parties required to be a party hereto.  Delivery of an executed counterpart of a signature page of this Amendment by telecopy or other electronic imaging means shall be effective as 

5

delivery of a manually executed counterpart of this Amendment.  This Amendment may not be amended except in accordance with the provisions of Section 10.2 of the Credit Agreement.
(e)    If any provision of this Amendment or the other Loan Documents is held to be illegal, invalid or unenforceable, (a) the legality, validity and enforceability of the remaining provisions of this Amendment and the other Loan Documents shall not be affected or impaired thereby and (b) the parties shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provisions.  The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.  Nothing contained herein shall be deemed to constitute a waiver of compliance with any term or condition contained in the Credit Agreement or any of the other Loan Documents, or to constitute a course of conduct or dealing among the parties.  The Administrative Agent and the Lenders reserve all rights, privileges and remedies under the Loan Documents.
(f)    The Borrower shall reimburse the Administrative Agent upon demand for all reasonable out-of-pocket costs and expenses (including reasonable attorneys’ fees) incurred by the Administrative Agent in connection with the preparation, negotiation and execution of this Amendment and the other agreements and documents executed and delivered in connection herewith.  
(g)    In consideration of the amendments contained herein, each of the Loan Parties hereby waives and releases each of the Lenders, the Administrative Agent and the Collateral Agent from any and all claims and defenses, known or unknown, existing as of the date hereof with respect to the Credit Agreement and the other Loan Documents and the transactions contemplated hereby and thereby. 
(h)    This Amendment shall constitute a “Loan Document” under and as defined in the Credit Agreement.
[Remainder of this page intentionally left blank.]

6

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the date first above written.
ENCORE CAPITAL GROUP, INC.  
 
 
By: /s/ Jonathan Clark 
Name: Jonathan C. Clark 
Title: Executive V.P. and CFO

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

BANK OF AMERICA, N.A.,
as Lender 
 
 
By: /s/ Angel Sutoyo 
Name: Angel Sutoyo 
Title: Senior Vice President

FIFTH THIRD BANK, as Lender  
 
 
By: /s/ Scott Kilgore 
Name: Scott Kilgore 
Title: Vice President

Encore Capital Group, Inc.
Signature Page to Amendment No. 3 

	
	
	MORGAN STANLEY BANK, N.A., as Lender
By: /s/ Harry Comninellis
Name: Harry Comninellis  
Title:  Authorized Signatory

	CALIFORNIA BANK & TRUST, as Lender

By: /s/ Melissa Chang 
Name:  Melissa Chang 
Title:  Vice President

	CITIBANK, N.A., as Lender

By: By: /s/ Chris Dowler
Name: Chris Dowler
Title:  Senior Vice President

	ISRAEL DISCOUNT BANK OF NEW YORK, as Lender

By: /s/ Galina Evelson
Name: Galina Evelson
Title:  First Vice President

	By: /s/ Barry Solomon
Name: Barry Solomon
Title:  First Vice President

	FIRST BANK, as Lender

By: /s/ Beck Combs
Name: Beck Combs
Title:  AVP, Commercial Loan Officer

	AMALGAMATED BANK, as Lender

By: /s/ Jackson Eng
Name: Jackson Eng
Title:  First Vice President

Encore Capital Group, Inc.
Signature Page to Amendment No. 3

	
	
	MUFG Union Bank, N.A. (formerly known as UNION BANK), as Lender

By: /s/ Christopher Freeman
Name: Christopher Freeman
Title:  Managing Director

	MANUFACTURERS BANK, as Lender

By: /s/ Sandy Lee
Name: Sandy Lee
Title:  Vice President

	BARCLAYS BANK PLC, as Lender

By: /s/ Ronnie Glenn
Name: Ronnie Glenn
Title:  Vice President

	RAYMOND JAMES BANK, N.A., as Lender

By: /s/ Jason Williams
Name:  Jason Williams
Title:  Vice President

	FLAGSTAR BANK, as Lender

By: /s/ Kelly M. Hamrick
Name: Kelly Hamrick
Title:  First Vice President

	THE PRIVATEBANK AND TRUST COMPANY, as Lender

By: /s/ Jennifer St. Aubin
Name: Jennifer St. Aubin
Title:  Managing Director

	CITIZENS BANK, N.A. (formerly known as RBS Citizens, N.A.), as Lender

By: /s/ Darran Wee
Name: Darran Wee
Title:  Senior Vice President

Encore Capital Group, Inc.
Signature Page to Amendment No. 3

	
	
	CTBC BANK CORP. (USA), as Lender

By: /s/ Shahid Kathrada
Name: Shahid Kathrada
Title:  FVP and Team Leader

	UBS AG, STAMFORD BRANCH, as Lender

By: /s/ Darlene Arias
Name: Darlene Arias
Title:  Director

	By: /s/ Craig Pearson
Name: Craig Pearson
Title:  Associate Director

	CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH, as Lender

By: /s/ Doreen Barr
Name: Doreen Barr
Title:  Authorized Signatory

	By: /s/ Warren Van Heyst
Name: Warren Van Heyst
Title:  Authorized Signatory

    

Encore Capital Group, Inc.
Signature Page to Amendment No. 3

Each of the undersigned hereby makes the representations and warranties set forth above in this Amendment, consents to this Amendment and the terms and provisions hereof and hereby (a) confirms and agrees that notwithstanding the effectiveness of such Amendment, each Loan Document to which it is a party and their respective payment, performance and observance obligations and liabilities (whether contingent or otherwise) is, and shall continue to be, in full force and effect and is hereby ratified and confirmed in all respects, except that, on and after the effectiveness of such Amendment, each reference in the Loan Documents to the “Credit Agreement”, “thereunder”, “thereof” or words of like import shall mean and be a reference to the Credit Agreement, as amended by this Amendment, (b) confirms and agrees that the pledge and security interest in the Collateral (other than the Released Collateral after giving effect to the limited release set forth in Section 3) granted by it pursuant to the Collateral Documents to which it is a party shall continue in full force and effect, and (c) acknowledges and agrees that such pledge and security interest in the Collateral (other than the Released Collateral after giving effect to the limited release set forth in Section 3) granted by it pursuant to such Collateral Documents shall continue to secure the Obligations purported to be secured thereby, as amended or otherwise affected hereby.
ENCORE CAPITAL GROUP, INC.
MIDLAND CREDIT MANAGEMENT, INC.
MIDLAND INTERNATIONAL LLC 
MIDLAND INDIA LLC
MIDLAND PORTFOLIO SERVICES, INC.
MIDLAND FUNDING LLC
MRC RECEIVABLES CORPORATION
MIDLAND FUNDING NCC-2 CORPORATION
PROPEL ACQUISITION LLC
PROPEL FUNDING LLC
ASSET ACCEPTANCE CAPITAL CORP.
ASSET ACCEPTANCE RECOVERY 
SERVICES, LLC
ASSET ACCEPTANCE SOLUTIONS  
GROUP, LLC
ASSET ACCEPTANCE, LLC
LEGAL RECOVERY SOLUTIONS, LLC
ATLANTIC CREDIT AND FINANCE, INC.
ATLANTICE CREDIT & FINANCE SPECIAL  
    FINANCE UNIT, LLC
ATLANTIC CREDIT & FINANCE SPECIAL 
FINANCE UNIT III, LLC

By:  /s/ Jonathan Clark
Name: Jonathan Clark     
Title: Chief Financial Officer    

Encore Capital Group, Inc.
Signature Page to Amendment No. 3

Annex I

Released Equity Interests

		
	1.
	100% of the limited liability company membership interests of Propel Financial Services, LLC, a Texas limited liability company.

		
	2.
	100% of the limited liability company membership interests of Propel Funding Holdings 1, LLC, a Delaware limited liability company

		
	3.
	100% of the limited liability company membership interests of Propel Funding, LLC, a Delaware limited liability company. 

		
	4.
	100% of the limited liability company membership interests in PFS Finance Holdings, LLC, a Delaware limited liability company.

		
	5.
	100% of the limited liability company membership interests in Propel Funding Ohio, LLC, a Delaware limited liability company.

		
	6.
	100% of the limited liability company membership interests in Propel Funding Nevada, LLC, a Delaware limited liability company.

		
	7.
	100% of the limited liability company membership interests in Propel Funding REL LLC, a Delaware limited liability company.

		
	8.
	50% of the limited liability company membership interests in RioProp Holdings, LLC, a Delaware limited liability company.

		
	9.
	100% of the limited liability company membership interests in Propel Funding Texas 2, LLC, a Delaware limited liability company.

		
	10.
	100% of the limited liability company membership interests in Propel Funding Multistate, LLC, a Delaware limited liability company.

		
	11.
	100% of the limited liability company membership interests in Propel Funding National I, LLC, a Delaware limited liability company

Annex I to Amendment No. 3

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