Document

THIS SECURITIES PURCHASE AGREEMENT(this “Agreement”) is made and entered into as of May 7, 2018, by and among Encore Capital Group, Inc., a Delaware corporation (“Parent”), Janus Holdings Luxembourg S.à r.l., a private limited liability company (société à responsabilité limitée) incorporated and existing under the laws of the Grand Duchy of Luxembourg, having its registered office at 47, avenue John F. Kennedy, L-1855 Luxembourg, registered with the Luxembourg Trade and Companies Register under number B 178454 (“Purchaser”), Cabot Holdings S.à r.l., a private limited liability company (société à responsabilité limitée) incorporated and existing under the laws of the Grand Duchy of Luxembourg, having its registered office at 47, avenue John F. Kennedy, L-1855 Luxembourg, registered with the Luxembourg Trade and Companies Register under number B 178454 (“Holdings”), each of the signatories hereto (the “Initial Management Sellers”), such additional persons who may sign a joinder (the “Joinder”) in the form attached hereto as Exhibit A (the “Additional Management Sellers” and together with the Initial Management Sellers, the “Management Sellers”), after such entity signs the Joinder, Carat Manager Nominee Limited, a company incorporated in England with registered number 8478856 of 10 Norwich Street, London EC4A 1BD (“Nominee”), and Ken Stannard, in his capacity as the Seller Representative (the “Seller Representative”). The Nominee and the Management Sellers are collectively referred to herein as “Sellers” and each a “Seller.”

WHEREAS, JCF III Europe S.à r.l (“Institutional Seller”) and JCF III Europe Holdings LP (“Janus LP”) have, concurrently with the execution and delivery of this Agreement, entered into that certain Securities Purchase Agreement with Parent, Purchaser, Holdings and Encore Capital Group UK Limited (the “Institutional Seller SPA”), pursuant to which such persons, have agreed to sell to Purchaser all of the issued and outstanding equity and debt interests of Purchaser and all of the issued and outstanding equity and debt interests of Holdings that are owned (beneficially and of record) by Institutional Seller and Janus LP, as applicable;

1.1 Purchase of the Purchased Securities. Upon the terms and subject to the conditions set forth herein, each Seller agrees to sell to Purchaser, or such other affiliate designated by Purchaser pursuant to Section 5.11 immediately following the closing of the purchase of the securities contemplated by the Institutional Seller SPA, and Purchaser agrees to purchase, or cause an affiliate to purchase, from such Seller, at the Closing (as defined below), each of the Purchased Securities owned by such Seller, free and clear of any Liens (other than Liens created or incurred by Purchaser or its affiliates as a result of the financing undertaken in order to pay all or a portion of the Cash Consideration, including any registered offering of Parent Common Stock or convertible notes issued by Parent (“Financing”), in connection with the transactions contemplated hereby).

(a) Subject to the adjustment provisions set forth in Section 1.2(b), the aggregate Cash Consideration (as defined below) and aggregate Stock Consideration (as defined below) for the Purchased Securities (assuming all of the shareholders of Holdings (other than Purchaser, Encore Europe Holdings S.à r.l. and Janus LP) execute, or will have executed on his or her behalf pursuant to the drag along provisions set forth in the Investment Agreement this Agreement) shall be £23,605,165.40 and 672,303 shares of Parent Common Stock (as defined below) (collectively, and as such amounts may be adjusted herein, the “Purchase Price”).

Consideration only in accordance with the election notice timely delivered by such holders; and (ii) a possible increase in the aggregate amount of Cash Consideration by an amount equal to the Adjustment Amount (as defined below). The decrease in the number of shares of Stock Consideration and corresponding increase in the amount of Cash Consideration will not affect the mix of Stock Consideration and Cash Consideration to be received by Sellers other than the Electing Sellers who properly elect to receive Cash Consideration only.

1.3 Closing. Upon the terms and subject to the conditions set forth herein (including the satisfaction or waiver of each of the conditions set forth in Section 2), immediately following the closing of the transactions contemplated by the Institutional Seller SPA and subject to the satisfaction or waiver of each of the conditions set forth in Section 2, the purchase and sale of the Purchased Securities (the “Closing”) shall occur remotely via the exchange of documents and signatures or at such other date, time and place as may be agreed by the Seller Representative and Parent in writing (which date, time and place of the Closing are referred to as the “Closing Date”); provided, that, in the event that Parent elects to waive the condition set forth in Section 2.2(f), upon the delivery of the Joinder by, or on behalf of, any such Management Seller who had not previously so delivered (or had delivered on his/her behalf) the Joinder, a subsequent closing, with respect such Management Seller will occur promptly following the delivery of such Management Seller’s Joinder, and such subsequent closing shall be deemed the “Closing” with respect to any such holder, and the date of such closing, shall deemed the Closing Date with respect to any such holder.

(i) after taking into account any election made by the Electing Sellers to receive Cash Consideration only, deposit, or cause to be deposited, with the Paying Agent, the aggregate amount of cash attributable to each Seller as set forth on the Transaction Notice received and acknowledged by or on behalf of each Seller with respect to the Purchased Securities sold by such Seller, plus such Seller’s Pro Rata Portion of the Adjustment Amount (if any), less any Loan Amounts attributable to such Seller (the “Cash Consideration”); and

securities convertible into Parent Common Stock), or engage in a reclassification, reorganization, recapitalization or exchange or other like change in Parent Common Stock, then the Stock Consideration shall be ratably adjusted to reflect fully the effect of any such change. Sellers shall not be entitled to receive a fraction of a share of Parent Common Stock as a result of the transactions contemplated under this Agreement, but will receive cash in lieu of any such fractional share otherwise issuable (without interest) based on the per share price of Parent Common Stock used to calculate the Stock Consideration, as set forth in the Transaction Notice. In connection with the transactions contemplated hereby, Parent shall contribute, or shall cause to be contributed, the Parent Common Stock to Purchaser, immediately prior to the electronic delivery of the Parent Common Stock to Sellers at the Closing.

(c) Purchaser shall be entitled to deduct and withhold from any consideration payable pursuant to this Agreement such amounts as Purchaser is required to deduct and withhold under the Code, or any applicable law, with respect to the making of such payment provided, however, that Purchaser agrees that (i) absent a change in applicable tax law between the date of this Agreement and the Closing, no withholding or deduction shall be required with respect to the Sellers and (ii) it shall notify Sellers promptly after becoming aware of any requirement under applicable tax law to deduct or withhold from amounts payable to Sellers hereunder. To the extent that amounts are so withheld and paid to the appropriate Governmental Authority(as defined below), such amounts shall be treated for all purposes of this Agreement as having been paid to the person in respect of whom the payment to which such deduction and/or withholding relates was made. Each Seller agrees to provide Purchaser and/or the Paying Agent, as applicable, or to assist Purchaser and/or the Paying Agent in obtaining, Forms W-8 and/or W-9 or such other forms relating to Purchaser’s and/or the Paying Agent’s obligations to withhold as Purchaser and/or the Paying Agent may reasonably request.

(c) the representations and warranties of Parent and Purchaser (i) contained in Section 3.2(i) shall be true and correct in all but de minimis respects as of the date of this Agreement and as of the Closing Date as if made as of such date (except to the extent such representation or warranty speaks solely as of another date, in which case such representation or warranty shall be so true and correct as of such other date), (ii) that contain any materiality or material adverse effect qualifications or limitations shall be true and correct in all respects (after giving effect to such materiality or material adverse effect qualifications and limitations) as at the date of this Agreement and as of the Closing Date as if made as of such date (except to the extent such representation or warranty speaks solely as of another date, in which case such representation or warranty shall be so true and correct as of such other date) and (iii) contained in this Agreement that are not referenced in clauses (i) and (ii) above shall be true and correct in all material respects as at the date of this Agreement and as of the Closing Date as if made as of such date (except to the extent such representation or warranty speaks solely as of another date, in which case such representation or warranty shall be so true and correct as of such other date);

(c) the representations and warranties of each Seller (i) contained in Section 3.1(e) and Section 3.1(f) shall be true and correct in all but de minimis respects as of the date of this Agreement and as of the Closing Date as if made as of such date (except to the extent such representation or warranty speaks solely as of another date, in which case such representation or warranty shall be so true and correct as of such other date), (ii) that contain any materiality or material adverse effect qualifications or limitations shall be true and correct in all respects (after giving effect to such materiality or material adverse effect qualifications and limitations) as at the date of this Agreement and as of the Closing Date as if made as of such date (except to the extent such representation or warranty speaks solely as of another date, in which case such representation or warranty shall be so true and correct as of such other date) and (iii) contained in this Agreement

(c) No Conflicts. The execution, delivery, and performance by such Seller of this Agreement, and the consummation of the transactions contemplated hereby, do not and will not violate, conflict with or result in a breach of any term, condition or provision of, or require the consent of any person or entity under, or result in the creation of or right to create any Lien upon any of the assets of such Seller under, (i) any organizational documents of such Seller, (ii) any laws to which such Seller is subject, (iii) any permit, judgment, order, writ, injunction, decree, or award of any Governmental Authority to which such Seller is subject, or (iv) any material license, indenture, promissory note, bond, credit or loan agreement, lease, agreement, commitment or other instrument or document to which such Seller is a party or by which such Seller is bound.

(e) Ownership. Such Seller (other than the Nominee) beneficially owns, free and clear of any Liens, the securities set forth in the Transaction Notice received and acknowledged by such Seller. The Nominee is the record holder, free and clear of any Liens, of the Purchased Securities. At the Closing, upon delivery of and payment for the Purchased Securities as provided in this Agreement, the Purchased Securities shall be transferred to Purchaser, as applicable, and Purchaser, as applicable, shall have good and valid title to the Purchased Securities, free and clear of any Liens (other than Liens created or incurred by Purchaser or its affiliates as a result of the Financing in connection with the transactions contemplated hereby).

(g) Litigation. As of the date hereof, (i) there is no claim, legal action, suit, arbitration, investigation or other proceeding pending, or to such Seller’s knowledge threatened, against such Seller (1) relating to the ownership of the Purchased Securities or (2) that would restrict or prohibit the purchase and sale of the Purchased Securities to Purchaser; (ii) such Seller is not subject to any outstanding judgment, order, writ, injunction or decree of any Governmental Authority that would restrict or prohibit the purchase and sale of the Purchased Securities to Purchaser; and (iii) to such Seller’s knowledge, there is currently no investigation or review by any Governmental Authority with respect to such Seller that would restrict or prohibit the purchase and sale of the Purchased Securities to Purchaser.

(i) Each Seller acknowledges and agrees that the shares of Parent Common Stock issued to such Seller in accordance with the terms of this Agreement will be acquired by such Seller solely for its account for investment, not as a nominee or agent, and not with a view to or for sale or distribution of such shares of Parent Common Stock or any part thereof except in accordance with applicable securities Regulations. Such Seller has no contract, undertaking, agreement or arrangement with any person to sell, transfer or grant participations, except in accordance with applicable securities Regulations, to such person or to any third person, with respect to any of the shares of Parent Common Stock.

(ii) Each Seller acknowledges and agrees that the shares of the Parent Common Stock are “restricted securities” under the SEC Regulations, are being issued pursuant to exemptions from registration and prospectus requirements under applicable securities laws, and may be resold only in very limited circumstances and in any case may not be resold in violation of this Agreement and applicable securities Regulations. Each Seller is aware of the provisions of Rule 144, promulgated under the SEC Regulations, which in substance, permit limited public resale of “restricted securities” acquired, directly or indirectly from the issuer thereof (or from an affiliate of such issuer), in a non-public offering subject to the satisfaction of certain conditions. Each Seller acknowledges and agrees that the shares of Parent Common Stock are subject to restrictions on transfer as set forth in this Agreement. Each certificate or book-entry account representing any such shares shall, until such time that the shares are not so restricted under the Securities Act or this Agreement, bear a legend identical or similar in effect to the following legends (together with any other legend or legends required by applicable state securities laws or otherwise, if any):

“THE SECURITIES REPRESENTED HEREBY HAVE BEEN ACQUIRED PURSUANT TO REGULATION S OF THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), AND MAY NOT BE SOLD, MORTGAGED, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE THEREWITH, PURSUANT TO A REGISTRATION UNDER THE ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS. IN ADDITION, NO HEDGING TRANSACTION

(a) Authority and Organization. Each of Parent and Purchaser has all necessary power or legal capacity to enter into and deliver this Agreement, to carry out such party’s obligations hereunder, and to consummate the transactions contemplated hereby. All actions, authorizations, and consents required by law for the execution, delivery, and performance by each of Parent and Purchaser of this Agreement, and the consummation of the transactions contemplated hereby, have been properly taken or obtained, and no approval of the stockholders of Parent is required in connection therewith. Parent is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Delaware and has the requisite power and authority and all necessary governmental approvals to own, lease and operate its properties, rights and assets and to carry on its business as it is now being conducted, except where the failure to have obtained such governmental approvals would not have a material adverse effect on Parent and its subsidiaries, taken as a whole. True, complete and correct copies of the certificate of incorporation and bylaws of Parent, as in full force and effect as of the date of this Agreement, have been publicly filed with the SEC.

(c) No Conflicts. The execution, delivery, and performance by each of Parent and Purchaser of this Agreement, and the consummation of the transactions contemplated hereby, do not and will not violate, conflict with or result in a breach of any term, condition or provision of, or require the consent of any person or entity under, or result in the creation of or right to create any Lien upon any of the assets of such party or any of its subsidiaries under, (i) any laws to which such party or any of its subsidiaries or any of their respective assets are subject, (ii) any permit, judgment, order, writ, injunction, decree, or award of any Governmental Authority to which such party or any of its subsidiaries or any of their respective assets are subject, or (iii) any material license, indenture, promissory note, bond, credit or loan agreement, lease, agreement, commitment or other instrument or document to which such party is a party or by which such party or any of its subsidiaries or any of their respective assets are bound.

(e) Available Funds; Parent Common Stock. Purchaser will have, on the Closing Date, sufficient cash available, or other sources of immediately available funds, to enable Purchaser to (i) make the payment of the aggregate Cash Consideration, (ii) consummate the transactions and (iii) satisfy its obligations under this Agreement. All of the shares of Parent Common Stock to be issued as part of the aggregate Stock Consideration shall, when issued and delivered in accordance with this Agreement, be duly authorized, validly issued, fully paid and non-assessable, and none of such shares of Parent Common Stock will be subject to any preemptive rights. The issuance of the Parent Common Stock to Sellers at the Closing will be exempt from registration or qualification under the Securities Act and applicable state securities laws subject to the accuracy of the representations and warranties set forth in Section 3.1(i) herein.

(i) Since January 1, 2017, Parent has timely filed or furnished all reports, forms, schedules, exhibits, certifications, registration statements and other documents (the “Parent SEC Reports”) required to be filed or furnished by it with the SEC. As of their respective dates (or, if amended or superseded by a subsequent filing prior to the date hereof, as of the date of such subsequent filing), the Parent SEC Reports complied in all material respects with the requirements of the Securities Act, the Exchange Act, and the Sarbanes-Oxley Act of 2002, as amended and the rules and regulations thereunder (the “Sarbanes-Oxley Act”) as the case may be, and none of the Parent SEC Reports contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. Since January 1, 2017, (i) Parent has been in compliance with the applicable listing and corporate governance rules and regulations of NASDAQ, except, in each case, where the failure to so comply would not, individually or in the aggregate, have a material adverse effect on Parent and its subsidiaries, taken as a whole, and (ii) each of the chief executive officer and the chief financial officer of Parent has made all certifications required by Rule 13a-14 or 15d-14 under the Exchange Act and Sections 302 and 906 of the Sarbanes-Oxley Act with respect to the Parent SEC Documents, and the statements contained in such certifications are accurate, except, in each case, where the failure to make such certifications or to be so accurate would not, individually or in the aggregate, have a material adverse effect on Parent and its subsidiaries, taken as a whole.

(ii) The financial statements of Parent (including any related notes and schedules thereto) included in the Parent SEC Reports complied, as of their respective dates of filing with the SEC (or, if amended or superseded by a subsequent filing prior to the date hereof, as of the date of such subsequent filing), in all material respects with all applicable accounting requirements, the Securities Act and the Exchange Act, and with the rules and regulations of the SEC with respect thereto, have been prepared in accordance with GAAP applied on a consistent basis during the periods involved (except as may be disclosed therein and, in the case of the unaudited financial statements, as permitted by the SEC), and fairly present in all material respects the consolidated financial position of Parent and its subsidiaries and the consolidated results of operations, changes in stockholders’ equity and cash flows of such companies as of the dates and for the periods shown.

(h) Litigation. Except as set forth in the Parent SEC Reports filed prior to the date of this Agreement, as of the date hereof, there is no claim, action or proceeding pending, or to the Knowledge of Parent, threatened against Parent any of its subsidiaries by or before any Governmental Authority or by or on behalf of any other third party, which, if adversely determined, would have a material adverse effect on Parent and its subsidiaries, taken as a whole. Except as set forth in the Parent SEC Reports filed prior to the date of this Agreement, as of the date hereof, none of Parent or any of its subsidiaries is subject to, and to the Knowledge of Parent, there is not threatened, any order, judgment or decree of any Governmental Authority in respect of the business or any of the assets, rights or properties of Parent or its subsidiaries, except for those that would not have a material adverse effect to Parent and its subsidiaries, taken as a whole.

(i) Capitalization. The authorized capital stock of Parent consists of 50,000,000 shares of Parent Common Stock and 5,000,000 shares of preferred stock, $0.01 par value per share. As of March 31, 2018, there were (i) 25,911,868 shares of Parent Common Stock outstanding (and zero shares of Parent Common Stock held in treasury), (ii) zero shares of preferred stock outstanding, (iii) options granted under Parent’s equity incentive plans to purchase an aggregate of 322,288 shares of Parent Common Stock, (iv) 413,426 shares of Parent Common Stock underlying time-based restricted stock awards, and (v) 347,803 shares of Parent Common Stock underlying performance stock awards (assuming achievement of the target level of performance at the end of the applicable performance period) and, except for (A) the foregoing, (B) in connection with the Financing, or (C) as otherwise disclosed in the documents publicly filed by Parent prior to the date hereof with the SEC, there are no other agreements, options, warrants, calls, rights or other instruments or agreements relating to the sale, issuance, redemption or voting of any equity interests or other shares of capital stock of Parent, or any securities or other instruments convertible into, exchangeable for, evidencing the right to purchase, or otherwise requiring Parent to make a payment or otherwise provide value or benefits in respect of the value of, any equity interests or other shares of capital stock of Parent.

sale or otherwise dispose of any shares of Parent Common Stock received by such Seller as Stock Consideration; provided, that, on the 105th day following the Closing Date, such limitations shall expire with respect to 50% of the shares of Parent Common Stock received by such Seller as Stock Consideration (such 165-day period and 105-day period, the “Lock-Up Period”); provided, that, in the event the End Date (as defined in the Institutional Seller SPA) is extended in accordance with the terms of Section 4.1 of the Institutional Seller SPA, the Lock-Up Period shall be reduced, on a day-for-day basis, for each day after the original End Date that Closing does not occur, up to a maximum of 15 days. For the avoidance of doubt, in no event shall the Lock-Up Period be reduced by more than 15 days, such that the minimum Lock-Up Period is a period of 150 days and 90 days, respectively.

(a) Subject to the terms and conditions of this Section 4.2, no later than 105 days after the Closing Date, Parent shall cause to become effective with the SEC a registration statement on Form S-3 (the “Resale Registration Statement”) to register the resale of the shares of Parent Common Stock delivered as Stock Consideration (together with (i) shares of Parent Common Stock delivered as stock consideration under the Institutional Seller SPA and (ii) any securities into which the Parent Common Stock may be converted or exchanged pursuant to any merger, consolidation, sale of all or any part of its assets, corporate conversion or other extraordinary transaction of Parent, the “Registrable Securities”) and providing for the sale of such Registrable Securities from time to time pursuant to such method of distribution as the holders of such Registrable Securities may from time to time elect. Parent shall use commercially reasonable efforts to cause such Resale Registration Statement to be declared effective under the Securities Act as promptly as reasonably practicable and to keep such Resale Registration Statement continuously effective for a period from the date of its initial effectiveness until the earlier of three years after the Closing Date and such time as there are no Registrable Securities outstanding (such date, the “Registration Rights Termination Date”). Notwithstanding the foregoing, if Parent shall furnish to the holders of Registrable Securities a certificate signed by an officer stating that the filing, effectiveness or continued use of the Resale Registration Statement would require Parent to make an Adverse Disclosure, Parent shall be permitted to delay the effectiveness or continued use of the Resale Registration Statement to the extent reasonably necessary; provided, that (i) the length of any deferral shall not exceed 45 days and (ii) Parent shall not invoke its right more than once in any 12-month period; and provided that Parent may exercise this right or the right set forth in the last sentence of Section 4.2(b)(i) but not both during such 12-month period.

(i) Following the effectiveness of the Resale Registration Statement, Parent shall conduct one or more underwritten resales of Registrable Securities (an “Underwritten Shelf Take-Down”) upon the written request of one or more holders of Registrable Securities with an aggregate value of $50,000,000 or more, which Underwritten Shelf Take-Down may be in the form of a block trade or overnight deal. Upon receipt of any such request, Parent shall promptly (but in no event later than five business days following receipt thereof) deliver notice of such request to all other holders of Registrable Securities who shall then have five business days

from the date such notice is given to notify Parent in writing of their desire to be included in such Underwritten Shelf Take-Down. The sole or managing underwriters and any additional investment bankers and managers to be used in connection with an Underwritten Shelf Take-Down shall be selected by the holders of a majority of the Registrable Securities included in such Underwritten Shelf Take-Down, subject to the prior written consent of Parent, such consent to not be unreasonably withheld or delayed. The holders of a majority of the Registrable Securities included in such Underwritten Shelf Take-Down shall also have the right to determine the plan of distribution and select counsel for such holders. Notwithstanding anything herein to the contrary, in no event shall holders be entitled to effect an Underwritten Shelf Take-Down (x) unless the aggregate gross proceeds expected to be received from the sale of Registrable Securities in such Underwritten Shelf Take-Down are at least $50,000,000 and (y) on more than three occasions. Notwithstanding the foregoing, if Parent shall furnish to the holders of Registrable Securities a certificate signed by an officer stating that any such Underwritten Shelf Take-Down would require Parent to make an Adverse Disclosure, Parent shall be permitted to delay such Underwritten Shelf Take-Down to the extent reasonably necessary; provided, that (i) the length of any deferral shall not exceed 45 days and (ii) Parent shall not invoke its right more than once in any 12-month period; and provided that Parent may exercise this right or the right set forth in the last sentence of Section 4.2(b)(a) but not both during such 12-month period.

(iii) The holders participating in an Underwritten Shelf Take-Down shall be party to the underwriting agreement between Parent and such underwriters and may, at the option of the holders of a majority of the Registrable Securities participating in such Underwritten Shelf Take-Down, require that any or all of the representations and warranties by, and the other agreements on the part of, Parent to and for the benefit of such underwriters shall also be made to and for the benefit of such holders and that any or all of the conditions precedent to the obligations of such underwriters under such underwriting agreement be conditions precedent to the obligations of such holders; provided, however, that Parent shall not be required to make any representations or warranties with respect to written information provided by such holders expressly for inclusion in the Resale Registration Statement. No such holder shall be required to make any representations or warranties to, or agreements with, Parent or the underwriters other than representations, warranties or agreements regarding such holder, such holder’s Registrable Securities and such holder’s intended method of disposition.

completes and executes in a timely manner all questionnaires, powers of attorney, custody agreements, lock-up agreements, underwriting agreements and other documents reasonably required under the terms of such underwriting arrangements; provided that any such lock-up period shall not be longer than 90 days after the date of the final prospectus (or final prospectus supplement) pursuant to which such Underwritten Shelf Take-Down was made; provided further, any such holder shall only be subject to a lock-up if the directors and officers of Parent are subject to a lock-up and the length of such lock-up for such holder shall be no longer than the shortest lock-up of any such directors and officers.

(i) Following the effectiveness of the Resale Registration Statement, if Parent proposes to pursue an underwritten offering (“Company Offering”) (whether proposed to be offered for sale by Parent or by any other stockholder of Parent) under the Securities Act (other than a registration on Form S-4 or S-8, or any successor or other forms promulgated for similar purposes) it will give prompt written notice (which notice shall specify the intended method or methods of disposition) to the holders of Registrable Securities of its intention to do so and of such holder’s rights under this Section 4.2(c). Upon the written request of any holder made within five business days after the receipt of any such notice (which request shall specify the number of Registrable Securities intended to be disposed of by such holder), Parent will, subject to clause (ii) below and (b)(iv) above, include the Registrable Securities of such holder in the Company Offering; provided that: (A) if, at any time after giving written notice of its intention to pursue a Company Offering and prior to the pricing of the offering, Parent shall determine for any reason not to proceed with the proposed offering of the securities to be sold by it, Parent may, at its election, give written notice of such determination to the holders and, thereupon, Parent shall be relieved of its obligation to include any Registrable Securities in such offering (but not from its obligation to pay the Registration Expenses incurred in connection therewith); and (B) the holders of Registrable Securities requesting to be included in the Company Offering must, upon the written request of Parent, sell their Registrable Securities to the underwriters on the same terms and conditions as apply to the other securities being sold through underwriters under such registration, with, in the case of a combined primary and secondary offering, only such differences, including any with respect to representations and warranties, indemnification and liability insurance, as may be customary or appropriate in combined primary and secondary offerings.

(ii) If a registration pursuant to this Section 4.2(c) involves an underwritten offering and the managing underwriter advises Parent in writing (a copy of which shall be provided to the holders of Registrable Securities) that, in its opinion, the number of Registrable Securities and other securities requested to be included in such offering exceeds the number which can be sold in such offering, so as to be likely to have a material and adverse effect on the price, timing or distribution of the securities offered in such offering, then Parent will include in such registration: (i) first, the securities Parent proposes to sell for its own account; and (ii) second, such number of Registrable Securities requested to be included in such offering which, in the opinion of such managing underwriter, can be sold without having the material and adverse effect referred to above, which number of Registrable Securities shall be allocated pro rata among the Registrable Securities held by all such requesting holders. Any other selling holders of Parent’s securities (other

(iii) during the period when a prospectus is required to be delivered under the Securities Act in connection with the resale of Registrable Securities, to notify each holder of Registrable Securities: (A) when the Resale Registration Statement or any post-effective amendment thereto has become effective; (B) of any request by the SEC for amendments or supplements to the Resale Registration Statement or the prospectus included therein; (C) of the issuance by the SEC of any stop order suspending the effectiveness of Resale Registration Statement; (D) of the receipt by Parent of any notification with respect to the suspension of the qualification of Parent Common Stock for sale in any jurisdiction; or (E) of any event as a result of which the prospectus included in the Resale Registration Statement (as amended or supplemented) includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing;

(vi) to qualify (or exempt) the Registrable Securities for offer and sale under such other securities or blue sky laws of such jurisdictions in the United States as the selling holders or underwriter, if any, reasonably request; keep each such registration or qualification (or exemption therefrom) effective until the Registration Rights Termination Date; provided that Parent will not be required to (A) qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this clause (vi), (B) subject itself to taxation in any such jurisdiction or (C) consent to general service of process in any such jurisdiction where it is not then so subject;

(viii) to make available for inspection by the Seller Representative, any sole or lead managing underwriter participating in any disposition pursuant to such Resale Registration Statement and any attorney, accountant or other agent retained by the selling holders, or any underwriter, all financial and other records, pertinent corporate documents and properties of Parent and any subsidiaries thereof as may be in existence at such time as shall be necessary, in the advice of the holders’ and such underwriters’ respective counsel, to enable them to exercise their due diligence responsibility and to conduct a reasonable investigation within the meaning of the Securities Act, and cause Parent’s and any subsidiaries’ or officers, directors and employees, and the independent public accountants of Parent, to supply all information reasonably requested by any of the foregoing in connection with such Resale Registration Statement;

(ix) in connection with an Underwritten Shelf Take-Down or Company Offering, to obtain an opinion and negative assurance statements from its counsel dated the date of the closing under the underwriting agreement and a “comfort” letter from its independent public accountants who have certified Parent’s financial statements included or incorporated by reference in such Resale Registration Statement dated the date of the prospectus that is part of such Resale Registration Statement (and if such registration involves and Underwritten Shelf Take-Down, dated the date of the closing under the underwriting agreement), in customary form and covering such matters as are customarily covered by such opinions, negative assurance statements and “comfort” letters delivered to underwriters in underwritten public offerings, which opinion and letter shall be reasonably satisfactory to the sole or lead managing underwriter and addressed to the underwriters;

(x) to cooperate with the selling holders and the sole or lead managing underwriter, if any, to facilitate the timely preparation and delivery of certificates not bearing any restrictive legends representing the Registrable Securities to be sold, and cause such Registrable Securities to be issued in such denominations and registered in such names in accordance with the underwriting agreement prior to any sale of Registrable Securities to the underwriters or, if not an Underwritten Shelf Take-Down, in accordance with the instructions of the selling holders at least three business days prior to any sale of Registrable Securities;

(xi) to take all reasonable actions to ensure that any Free Writing Prospectus (as defined in Rule 405 of the Securities Act) utilized in connection with any offering hereunder complies in all material respects with the Securities Act, is filed in accordance with the Securities Act to the extent required thereby, is retained in accordance with the Securities Act to the extent required thereby and, when taken together with the related prospectus, will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading;

(e) Parent shall notify each holder of Registrable Securities in writing if the Resale Registration Statement or prospectus contained therein contains an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading, and upon receipt of such notice, each such holder of Registrable Securities shall, forthwith discontinue disposition of Registrable Securities pursuant to the Resale Registration Statement until such holder of has received copies of a supplemented or amended prospectus from Parent, or until such holder is advised in writing by Parent that the use of such prospectus is permitted.

(f) All registration expenses (“Registration Expenses”) incurred in effecting any registration hereunder shall be borne by Parent, including (i) registration and filing fees with the SEC and the FINRA with respect to registering the Registrable Securities, (ii) fees and expenses incurred in connection with the listing or quotation of the Registrable Securities, (iii) fees and expenses of compliance with securities or blue sky laws (including reasonable fees and disbursements of counsel in connection with blue sky qualifications of the Registrable Securities), (iv) printing expenses, (v) fees and expenses of counsel to Parent and independent certified public accountants for Parent (including fees and expenses associated with the special audits or the delivery of comfort letters), (vi) fees and expenses of any additional experts retained by Parent in connection with such registration and (vii) aggregate fees and expenses (not to exceed $50,000) of not more than one law firm (as selected by holders of a majority of the Registrable Securities (including holders of Registrable Securities under the Institutional Seller SPA) included in such registration) incurred by the selling holders in connection with the registration. The expenses of any underwriters, underwriting discounts or commissions or any broker’s fees or other similar selling fees attributable to the sale of Registrable Securities shall be borne by such participating holder of Registrable Securities.

(i) Without limiting, and in addition to, any indemnification agreement of Parent set forth in any underwriting agreement entered into in accordance with Section 4.2(b)(ii), Parent shall indemnify and hold harmless each holder of Registrable Securities, the partners, members, officers and directors of each holder of Registrable Securities and each person, if any, who controls such holder of Registrable Securities within the meaning of the Securities Act or the Exchange Act, against: (A) any untrue statement of a material fact contained in the Resale Registration Statement, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto; (B) the omission to state in the Resale Registration Statement a material fact required to be stated therein, or necessary to make the statements therein not misleading; or (C) any violation by Parent of the Securities Act, the Exchange Act, any federal or state securities law or any rule or regulation promulgated under the Securities Act, the Exchange Act or any federal or state securities law in connection with the Resale Registration Statement; provided, however, Parent shall not be liable in any such case for any such expense, loss, claim, damage, liability or action to the extent that it arises out of or is based upon actions or omissions made in reliance upon and in conformity with information furnished by or on behalf of a holder of Registrable Securities, or any member, partner, officer or director or controlling person of a holder of Registrable Securities for use in connection with such registration by such holder, partner, officer, director or controlling person.

(ii) Each holder of Registrable Securities shall indemnify, severally and not jointly, and hold harmless Parent, each of its directors, each of its officers who have signed the Resale Registration Statement, each person, if any, who controls Parent within the meaning of the Securities Act or the Exchange Act, and any other holder of Registrable Securities or any of such holder’s members, partners, directors or officers or any person who controls such holder within the meaning of the Securities Act or the Exchange Act, against any expenses, losses, claims, damages or liabilities (joint or several) to which any of the foregoing persons may become subject arising out of or based upon any untrue or alleged untrue statement of a material fact contained in the Resale Registration Statement, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto, in each case to the extent (and only to the extent) that such untrue or alleged untrue statement is contained in, or such omission or alleged omission is required to be contained in, any information which (i) relates solely to such holder’s individual ownership of the Registrable Securities, (ii) is furnished in writing to Parent by such holder solely in its capacity as a holder of Registrable Securities, expressly for use in such Resale Registration Statement and (iii) that such statement or omission was relied upon by Parent in preparation of such Resale Registration Statement; and each such holder shall reimburse Parent and such other persons for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that such holder of Registrable Securities shall not be liable in any such case to the extent that the holder has furnished in writing to Parent within a reasonable period of time prior to the filing of the Resale Registration Statement or amendment or supplement thereto information expressly for use in such Resale Registration Statement or any amendment or supplement thereto which corrected or made not misleading, information previously furnished to Parent, and Parent failed to include such information therein. In no event shall the liability of any selling holder of Registrable Securities hereunder be greater in amount than the dollar amount of the proceeds (net of payment of all

(iii) Promptly after receipt by an indemnified party under this Section 4.2(h) of notice of the commencement of any action (including any governmental action) for which a party may be entitled to indemnification under this Section 4.2(h), such indemnified party shall, if a claim in respect thereof is to be made against any indemnifying party under this Section 4.2(h), deliver to the indemnifying party a written notice of the commencement thereof, and the indemnifying party shall have the right to participate in such action and, to the extent the indemnifying party so desires, jointly with any other indemnifying party to which notice has been given, to assume the defense thereof with counsel reasonably satisfactory to the indemnifying and indemnified parties; provided, however, that an indemnified party (together with all other indemnified parties that may be represented without conflict by one counsel) shall have the right to retain one counsel (in addition to reasonably necessary local counsel), with the reasonable fees and expenses thereof to be paid by the indemnifying party, if representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate due to actual or potential differing interests between such indemnified party and any other party represented by such counsel in such proceeding or if there may be one or more defenses available to such indemnified party that are different from or additional to those available to the indemnifying parties. The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action, shall not relieve such indemnifying party of liability to the indemnified party under this Section 4.2(h) except to the extent (and only to the extent) that the indemnifying party has been actually prejudiced by such delay.

(iv) In order to provide for just and equitable contribution to joint liability under the Securities Act in any case in which either (A) any party otherwise entitled to indemnification hereunder makes a claim for indemnification pursuant to this Section 4.2(h) but it is judicially determined (by the entry of a final judgment or decree by a court of competent jurisdiction and the expiration of time to appeal or the denial of the last right of appeal) that such indemnification may not be enforced in such case notwithstanding the fact that this Section 4.2(h) provides for indemnification in such case, or (B) contribution under the Securities Act may be required on the part of any party hereto for which indemnification is provided under this Section 4.2(h); then, and in each such case, such parties will contribute to the aggregate expenses, losses, claims, damages or liabilities to which they may be subject (after contribution from others) in such proportion as is appropriate to reflect the relative fault of the indemnifying party and the indemnified party in connection with the Violation that resulted in such expense, loss, claim, damage or liability as well as other equitable considerations. The relative fault of such parties shall be determined by reference to, among other things, whether the untrue or allegedly untrue statement of a material fact or the omission or alleged omission of a material fact relates to information supplied by the indemnifying party or indemnified party and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission; provided, however, that, in any such case no individual or entity guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) will be entitled to contribution from any individual or entity who was not guilty of such fraudulent misrepresentation.

(iii) so long as a holder owns any Registrable Securities, to furnish to such holder promptly upon request: (A) a written statement by Parent as to its compliance with the reporting requirements of Rule 144, and of the Securities Act and the Exchange Act; (B) a copy of the most recent annual and quarterly report of Parent; and (C) such other reports, documents or stockholder communications as such holder may reasonably request in availing itself or himself of any rule or regulation of the SEC allowing such holder to sell any such Registrable Securities without registration; and

4.4 Drag-Along Rights. Purchaser shall exercise drag along rights in accordance with the Investment Agreement, including providing notice to each Minority Shareholder (as defined in the Investment Agreement) and Holdings shall designate and authorize or cause the designation and authorization of, an individual to execute on behalf of, and as attorney or agent for, such Management Seller, any instrument of transfer or other document necessary to effect the transfer of his or her securities in Holdings to Purchaser.

reasonably request, all at the sole cost and expense of the requesting party. Prior to the Closing (or earlier termination of this Agreement), Parent shall not issue shares of Parent Common Stock, except (i) in connection with the Financing, (ii) in the ordinary course under Parent’s equity incentive plans, or (iii) pursuant to any agreements, options, warrants, calls, rights or other instruments or agreements relating to the sale, issuance, redemption or voting of any equity interests or other shares of capital stock of Parent, or any securities or other instruments convertible into, exchangeable for, evidencing the right to purchase, or otherwise requiring Parent to make a payment or otherwise provide value or benefits in respect of the value of, any equity interests or other shares of capital stock of Parent, in each as previously disclosed by Parent in its public filings with the SEC prior to the date hereof, and Parent shall not declare any dividends or distributions with respect to Parent Common Stock with a record date that is on or prior to the Closing Date.

(b) Without the prior written consent of Parent, each of Purchaser and Holdings (i) shall operate in the ordinary course of business consistent with past practice, and (ii) shall not issue any shares, options, warrants, calls, rights or other instruments or agreements relating to the sale, issuance, redemption or voting of any equity interests or other shares of capital stock of Purchaser or Holdings (as applicable), or any securities or other instruments convertible into, exchangeable for, evidencing the right to purchase, or otherwise requiring Purchaser or Holdings (as applicable) to make a payment or otherwise provide value or benefits in respect of the value of, any equity interests or other shares of capital stock of Purchaser or Holdings (as applicable).

(a) Effective upon the Closing, to the fullest extent permitted by applicable Regulation, each of Parent and Purchaser, in each case on behalf of itself and its controlled Affiliates (collectively, the “Parent Releasers”), hereby knowingly, willingly, irrevocably and expressly waives, acquits, remises, discharges and forever releases each Seller, solely in its capacity as an equityholder of Holdings (the “Seller Released Parties”) from any and all liabilities and obligations to the Parent Releasers of any kind or nature whatsoever arising as of or prior to the Closing and relating to such Seller’s ownership interest in Holdings, whether absolute or contingent, liquidated or unliquidated, known or unknown, matured or unmatured or determined or determinable, and whether arising under any applicable Regulation or contract or otherwise at law or in equity, and each of the Parent Releasers hereby agrees that it will not seek to recover any amounts in connection therewith or thereunder from any Seller Released Party; provided, however, that the Parent Releasers do not waive, acquit, remise, discharge or release any of the Parent Releaser’s rights against, or any obligations of, any Seller Released Parties arising under this Agreement and any other agreement, certificate, document or instrument in each case executed by a Seller Released Party pursuant to the terms of this Agreement, or in connection with the transactions contemplated by this Agreement.

(b) Effective upon the Closing, to the fullest extent permitted by applicable Regulation, each Seller, in each case on behalf of itself and its controlled Affiliates (collectively, the “Seller Releasers”), hereby knowingly, willingly, irrevocably and expressly waives, acquits, remises, discharges and forever releases Parent and its controlled Affiliates (the “Parent Released Parties”) from any and all liabilities and obligations to the Seller Releasers of any kind or nature whatsoever arising as of or prior to the Closing and relating to such Seller’s ownership interest in the Holdings, in each case whether absolute or contingent, liquidated or unliquidated, known or unknown, matured or unmatured or determined or determinable, and whether arising under any applicable Regulation or contract or otherwise at law or in equity, and each of the Seller Releasers hereby agrees that it will not seek to recover any amounts in connection therewith or thereunder from any Parent Released Party; provided, however, that the Seller Releasers do not waive, acquit, remise, discharge or release any of the Seller Releaser’s rights against, or any obligations of, the Parent Released Parties arising under this Agreement (including Section 4.8) and any other agreement, certificate, document or instrument in each case executed by a Parent Released Party pursuant to the terms of this Agreement, or in connection with the transactions contemplated by this Agreement.

4.9 Press Release. The Parent and Purchaser shall consult the Seller Representative before issuing any press release or public statement with respect to this Agreement or the other transactions contemplated hereby and shall not issue any such press release or make any such public statement without the prior consent of the other party, which shall not be unreasonably withheld; provided, however, that a party may, without the prior consent of the other party (but after prior consultation, to the extent practicable in the circumstances) issue such press release or make such public statement as may upon the advice of outside counsel be required by applicable Regulation, including the rules and regulations of NASDAQ. The Sellers shall not issue any press releases or public statement with respect to this Agreement or the other transactions

4.12 Rights or Claims Involving Debt Financing Parties. Each Seller and its affiliates, directors, officers, employees, agents, partners, managers, members or stockholders shall not have any rights or claims against any of the commercial banks, investment banks or other financial institutions providing any debt financing to Parent or its affiliates in connection with the transactions contemplated by this Agreement and any arrangers, administrative agents, collateral agents or trustees involved in such financing, and their respective affiliates, officers, directors, employees, attorneys, advisors, agents and representatives (each a “Debt Financing Party”) in any way relating to this Agreement or any of the transactions contemplated by this Agreement, including any dispute arising out of or relating in any way to the performance of any financing commitments of such Debt Financing Party with respect to the transactions contemplated hereby, whether at law or equity, in contract, in tort or otherwise. No Debt Financing Party shall have any liability (whether in contract, in tort or otherwise) to Sellers and their affiliates, directors, officers, employees, agents, partners, managers, members or stockholders for any obligations or liabilities of any party hereto under this Agreement or for any claim based on, in respect of, or by reason of, the transactions contemplated hereby and thereby, including any dispute arising out of or relating in any way to the performance of any financing commitments. Without limiting the foregoing, it is agreed that any claims or causes of action brought against any Debt Financing Party in its capacity as such will not be brought in any forum other than the federal and New York State courts located in the Borough of Manhattan within the City of New York and shall be governed by the law of the State of New York and the parties hereto will not support any claim or cause of action brought against any Debt Financing Party outside of the federal and New York State courts located in the Borough of Manhattan within the City of New York. Each party hereto irrevocably waives any and all right to trial by jury in any legal proceeding involving any Debt Financing Party arising out of or related to this Agreement or the transactions contemplated hereby. It is further agreed that the Debt Financing Parties are intended third-party beneficiaries of, and shall be entitled to the protections of, this provision.

“Adverse Disclosure” means public disclosure of material non-public information that, in Parent’s good faith judgment, after consultation with outside counsel to Parent, (i) would be required to be made in any report or Resale Registration Statement filed with the SEC by Parent so that such report or Resale Registration Statement would not be materially misleading; (ii) would not be required to be made at such time but for the filing, effectiveness or continued use of such report or Resale Registration Statement; and (iii) the disclosure of which would be materially adverse to Parent.

“Liens” means any interest or equity of any person (including any right to acquire, option, warrant, call, contract, demand, commit, convert or exchange, or right of pre-emption, first refusal or conversion, or under which a person is or may become obligated to sell, assign or transfer any equity interest) or any mortgage, charge, pledge, lien, assignment, hypothecation, security interest, title retention or any other security agreement or arrangement, or any agreement to create any of the above (other than by virtue of applicable securities laws, the organizational documents of Holdings, this Agreement, the Investment Agreement or the other agreements and instruments contemplated hereby and thereby).

“Transaction Notice” means the transaction notice delivered by or on behalf of Holdings to each Seller that sets forth (i) the Purchased Securities beneficially owned by such Seller, (ii) the minimum Cash Consideration due to such Seller (including the minimum Cash Consideration due to any Electing Seller in the event such Electing Seller elects to receive Cash Consideration only by timely delivering an election notice) and (iii) the Stock Consideration due to such Seller, in each case, subject to the terms and conditions of this Agreement.



Defined Term	Section
Additional Management Sellers	Preamble
Agreement	Preamble
A Shares	Recitals
Assignee	Section 5.11
B Shares	Recitals
B PECs	Recitals
Cash Consideration	Section 1.4(a)(i)
Closing	Section 1.3
Closing Date	Section 1.3
Company	Preamble
Company Securities	Recitals
C Shares	Recitals
Debt Financing Party	Section 4.12
Disclosing Party	Section 5.8(c)
D Shares	Recitals
Financing	Section 1.1
Lock-Up Period	Section 4.1
Holdings	Recitals
Institutional Seller	Recitals
Institutional Seller SPA	Recitals
Initial Management Sellers	Preamble
Seller	Preamble
Investment Agreement	Recitals
Joinder	Preamble
Management Sellers	Preamble
Nominee	Preamble
Parent	Preamble
Parent SEC Reports	Section 4.2(g)(i)
Purchase Price	Section 1.2
Purchased Securities	Recitals
Purchaser	Preamble
Registrable Securities	Section 4.2(a)
Registration Rights Termination Date	Section 4.2(a)
Resale Registration Statement	Section 4.2(a)
Sarbanes-Oxley Act	Section 4.2(g)(i)
Seller Representative	Preamble
Stock Consideration	Section 1.4(a)(ii)
Underwritten Shelf-Take-Down	Section 4.2(b)(i)

5.2 Notices. All notices, requests, consents, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been given (a) when delivered by hand (with written confirmation of receipt), (b) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested), (c) on the date sent by email (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next day other than a Saturday, Sunday or other day on which commercial banks in Luxembourg or the City of London are authorized or required to close if sent after normal business hours of the recipient or (d) on the third day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid, at the address indicated below the signature line on this Agreement with respect to Parent, Purchaser, Holdings, Sellers or Nominee (with the Nominee receiving notice for itself and for each Management Seller), or such other address as such party may designate by 5 days’ advance written notice to all other parties entitled to receive notice under this Agreement.

5.3 Amendment. Each of the parties hereto acknowledges and agrees that this Agreement may be amended or modified only by a written agreement executed and delivered by Parent, on the one hand, and the Seller Representative, on behalf the Sellers, on the other hand; provided, that, Section 4.12 and this Section 5.3 shall not be amended in a manner adverse to the Debt Financing Parties without their prior written consent; provided, further, that in the event the Institutional Seller SPA is amended, the corresponding section to this Agreement shall, to the extent such amendment does not discriminate between the Institutional Seller and Janus LP on the one hand, and the Sellers on the other hand, automatically be amended mutandis mutatis without any further action from any of the parties hereto, unless otherwise agreed between Parent and the Seller Representative.

5.4 Waiver. Each of the parties hereto acknowledges and agrees that (a) the Seller Representative, to the extent permitted by applicable law, may, on behalf of the other Sellers, (i) waive any inaccuracies in the representations and warranties of Parent or Purchaser contained in this Agreement or any document delivered pursuant hereto or (ii) waive compliance with any of the agreements or conditions applicable to Parent or Purchaser contained herein or in any document delivered pursuant hereto; and (b) Parent, to the extent permitted by applicable law, may (i) waive any inaccuracies in the representations and warranties of any Seller contained in this Agreement or any document delivered pursuant hereto or (ii) waive compliance with any of the agreements or conditions applicable to any Seller contained herein or in any document delivered pursuant hereto. No waiver of any breach or condition of this Agreement shall be deemed to be a waiver of any other or subsequent breach or condition, whether of like or different nature.

or action (in contract, tort or otherwise) arising out of or based upon this Agreement or the subject matter hereof or in any way connected with or related or incidental to the transactions contemplated hereby, in each case whether now existing or hereafter arising. Each party hereto acknowledges that it has been informed that this Section 5.7 constitutes a material inducement upon which they are relying and will rely in entering into this Agreement. Any party hereto may file an original counterpart or a copy of this Section 5.7 with any court as written evidence of the consent of each such party to the waiver of its right to trial by jury.

(a) The parties hereto mutually agree to final and binding arbitration of all disputes, claims or causes of action arising out of or related to this Agreement, including any question regarding its existence, validity, or termination, and any question as to whether a particular dispute is arbitrable hereunder, shall be referred to and finally resolved by binding arbitration administered by the ICC and conducted pursuant to the ICC Rules by three arbitrators appointed in accordance with the ICC Rules. The place of arbitration shall be New York, New York and the language to be used in the arbitral proceedings shall be English. Judgment upon the award may be entered by any court having jurisdiction thereof, including any court outside the United States. The parties hereby waive in any legal proceedings concerning or arising out of any such arbitration, including without limitation, proceedings to compel any Ancillary Proceeding, any defense of lack of personal jurisdiction or forum non conveniens or other similar doctrine. Without limitation, the parties hereby consent to the jurisdiction of the courts sitting in the place of arbitration in connection with any Ancillary Proceedings. The arbitral tribunal shall have the power to grant interim measures in accordance with the ICC Rules. Any party to the arbitration shall bear its own costs and expenses (including all attorneys’ fees and expenses, except to the extent otherwise required by applicable law) and all costs and expenses of the arbitration proceeding (such as filing fees, the arbitrator’s fees, hearing expenses, etc.) shall be borne equally by the parties. The arbitrator has the authority only to award the equitable relief, damages, costs and fees that would have been available to a party had the dispute(s), claim(s) or cause(s) of action been litigated in court under the applicable law specified in this Agreement. This Agreement, and the decision and award of the arbitrator, may be enforced by a court of competent jurisdiction, and the parties may assert this Agreement as a defense in any proceeding.

(b) In addition, the parties agree that (i) the arbitrator shall have no authority to make any decision, judgment, ruling, finding, award or other determination that does not conform to the terms and conditions of this Agreement (as executed and delivered by the parties hereto) and (ii) the arbitrator shall have no greater authority to award any relief than a court having proper jurisdiction. The Arbitration Information shall be kept confidential by the parties subject to Section 5.6, and any appeal from or motion to vacate or confirm such decision, judgment, ruling, finding, award or other determination shall be filed under seal.

Regulation, such Disclosing Party shall notify the other party promptly of the request or requirement so that the other party may seek an appropriate protective order or waive compliance with the provisions hereof. If, in the absence of a protective order or the receipt of a waiver hereunder, the Disclosing Party or any of its affiliates, associates or representatives believes in good faith, upon the advice of legal counsel, that it is compelled to disclose any such Arbitration Information, such Disclosing Party may disclose such portion of the Arbitration Information as it believes in good faith, upon the advice of legal counsel, it is required to disclose; provided, that the Disclosing Party shall use reasonable efforts to obtain, at the request and expense of the other party, an order or other assurance that confidential treatment shall be accorded to such portion of the Arbitration Information required to be disclosed as such other party shall designate. Notwithstanding anything herein to the contrary, the parties shall have no obligation to keep confidential any Arbitration Information that becomes generally known to and available for use by the public other than as a result of the Disclosing Party’s acts or omissions or the acts or omissions of such party’s affiliates, associates or representatives.

(e) To the maximum extent practicable, the ICC, the arbitrator and the parties shall take all action required to conclude any arbitration proceeding within 180 days of the filing of the dispute with the ICC. If more than one agreement for arbitration among the parties potentially applies to a dispute, the arbitration provision most directly related to this Agreement or the subject matter of the dispute shall control. This arbitration provision shall survive termination, amendment or expiration of this Agreement or any relationship among the parties.

5.12 Severability. If any term or provision of this Agreement is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction. Upon such determination that any term or other provision is invalid, illegal or unenforceable, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the greatest extent possible.

5.16 No Recourse. This Agreement may only be enforced against the named parties hereto. All claims or causes of action that may be based upon, arise out of or relate to this Agreement, or the negotiation, execution or performance of this Agreement may be made only against the entities that are expressly identified hereto, and no past, present or future director, officer, employee, incorporator, member, manager, partner, shareholder, affiliate, agent, attorney or representative of any party hereto (including any person negotiating or executing this Agreement on behalf of a party hereto) shall have any liability or obligation with respect to this Agreement or with respect to any claim or cause of action, whether in tort, contract or otherwise, that may arise out of or relate to this Agreement, or the negotiation, execution or performance of this Agreement and the transactions contemplated hereby.

5.17 Specific Performance. The parties agree that if any of the provisions of this Agreement were not performed by the parties hereto in accordance with specific terms or were otherwise breached, irreparable damage would occur, no adequate remedy at law would exist and damages would be difficult to determine, and that each party hereto will be entitled to specific performance to prevent such breaches of the provisions of this Agreement and to enforce specifically the terms and provisions hereof, including the obligation of the other parties hereto to consummate the transactions contemplated by this Agreement, in addition to any other remedy to which such party may be entitled at law or in equity. The parties hereto further agrees not to assert that a remedy of specific performance is unenforceable, invalid, contrary to applicable law or regulation or

(b) by Parent with written notice to Seller Representative, if the representations and warranties of any Seller shall not be true and correct or there has been a material violation or breach by any Seller of any covenant, representation or warranty contained in this Agreement, in each case, which has prevented the satisfaction of any condition precedent in Section 2.2 at the applicable Closing and such failure, violation or breach has not been waived by Parent or cured by such Seller within 15 days after written notice thereof from Parent; provided, however that Parent is not in material breach of its obligations under this Agreement;

(d) by the Seller Representative with written notice to Parent, if the representations and warranties of Purchaser shall not be true and correct or there has been a material violation or breach by Purchaser of any covenant, representation or warranty contained in this Agreement, in each case, which has prevented the satisfaction of any condition precedent in Section 2.1 at the applicable Closing and such failure, violation or breach has not been waived by the Seller Representative or cured by Purchaser within 15 days after written notice thereof from Seller Representative; provided, however that no Seller is in material breach of its obligations under this Agreement;

(a) If this Agreement is terminated as described in Section 5.18, this Agreement shall become void and of no further force or effect, without any liability or obligation on the part of the parties hereto (or any affiliate thereof), except that the provisions of Section 5 shall survive any termination of this Agreement; provided however, that nothing in this Section 5.19 shall be deemed to release any party from any liability or damages resulting from or arising out of any breach of such party of the terms and provisions of this Agreement. For the avoidance of doubt it is understood that a party’s failure to consummate the Closing at the time the Closing is required to occur pursuant to Section 1.4 shall be considered a breach hereunder.

5.20 Survival of Representations and Warranties; Limitation of Liability. The representations and warranties in this Agreement or in any certificate delivered pursuant to this Agreement shall survive the Closing for a period of 18 months following the Closing. Those covenants and agreements contained herein and therein which by their terms apply or are to be performed in whole or in part after the date of this Agreement shall survive the Closing until performed in accordance with their terms. Notwithstanding anything to the contrary in this Agreement or provided for under any applicable law, the aggregate liability of Parent and Purchaser for Losses arising out of or resulting from claims under Section 3.2 shall in no event exceed $3,110,000.

(a) Each Seller irrevocably constitutes and appoints Ken Stannard, as the Seller Representative, such Seller’s true and lawful attorney-in-fact and agent and authorizes him acting for such Seller and in such Seller’s name, place and stead, in any and all capacities to do and perform every act and thing required, permitted, necessary or desirable to be done in connection with the consummation of the transactions contemplated by this Agreement, as fully to all intents and purposes as such Seller might or could do in person, including to: (i) take any and all actions and make any and all determinations which may be required or permitted in connection with this Agreement and the transactions contemplated herby; (ii) give and receive notices and communications hereunder; (iii) negotiate, defend, settle, compromise and otherwise handle and resolve any and all claims and disputes with Purchaser arising out of this Agreement; and (iv) to make any other decision or election or exercise such rights, power and authority as are incidental to the foregoing.

(c) Any and all actions taken or not taken, exercises of rights, power or authority and any decision or determination made by Seller Representative in connection herewith shall be absolutely and irrevocably binding upon each Seller as if such person had taken such action, exercised such rights, power or authority or made such decision or determination in its individual capacity, and Purchaser may rely upon such action, exercise of right, power, or authority or such decision or determination of the Seller Representative as the action, exercise, right, power, or authority, or decision or determination of such person, and no Seller shall have the right to object, dissent, protest or otherwise contest the same. Each of the Sellers agrees to indemnify the Seller Representative against losses arising in any way in connection with the lawful exercise of all or any of the powers and authorities under his appointment. Purchaser is hereby relieved from any liability to any person for any acts done by the Seller Representative and any acts done by Purchaser in accordance with any decision, act, consent or instruction of the Seller Representative.

WHEREAS, Encore Capital Group, Inc. (“Parent”), Janus Holdings Luxembourg S.à r.l. (“Purchaser”), Cabot Holdings S.à r.l. (“Holdings”), Carat Manager Nominee Limited, each of the signatories thereto (the “Initial Management Sellers”) and such additional persons who may sign the joinder (the “Joinder”) (the “Additional Management Sellers” and together with the Initial Management Sellers, the “Management Sellers”) entered into that certain Securities Purchase Agreement, dated May 7, 2017 (the “Securities Purchase Agreement”);

WHEREAS, the Securities Purchase Agreement requires, among other things, that Parent shall have received executed copies of the Joinder, duly executed by, or on behalf of all of the Management Sellers pursuant to the drag along rights in accordance with the Investment Agreement (other than those Management Sellers who are original signatories to the Securities Purchase Agreement), pursuant to which the such Management Sellers delivering the Joinder shall become a party to the Securities Purchase Agreement as a “Seller” (as defined in the Securities Purchase Agreement); and

2.The undersigned hereby (a) confirms that it has received and reviewed a copy of the Securities Purchase Agreement, including the representations and warranties set forth in Section 3.1(e) and Section 3.1(f) thereof, (b) has received, reviewed and confirmed the information set forth in the Transaction Notice attached hereto as Schedule 1 (as defined in the Securities Purchase Agreement), and, (c) upon execution of this Agreement, becomes a party to the Securities Purchase Agreement as a Seller and agrees to be fully bound by, and subject to, all of the terms, provisions, obligations and covenants of a Seller contained in the Securities Purchase Agreement, all to the fullest extent permitted by applicable law and to the same extent as if the undersigned were an original party to the Securities Purchase Agreement. The undersigned hereby makes each of the representations and warranties and agrees to each of the covenants applicable to Management Sellers contained in the Securities Purchase Agreement.



Delaware (State or Other Jurisdiction of Incorporation)	000-26489 (Commission File Number)	48-1090909 (IRS Employer Identification No.)
3111 Camino Del Rio North, Suite 103, San Diego, California (Address of Principal Executive Offices)		92108 (Zip Code)
(877) 445-4581 (Registrant’s telephone number, including area code)



Exhibit Number	Description
10.1	Purchase Agreement, dated May 7, 2018, by and among Encore Capital Group, Inc., JCF III Europe Holdings LP, JCF III Europe S.à r.l., Janus Holdings Luxembourg S.à r.l and the other parties named therein
10.2	Purchase Agreement, dated May 7, 2018, by and among Encore Capital Group, Inc., Janus Holdings Luxembourg S.à r.l, certain management shareholders of Cabot Holdings S.à r.l. Luxembourg and the other parties named therein
99.1	Press release dated May 8, 2018 announcing Q1 financial results
99.2	Press release dated May 8, 2018 announcing the execution of the Purchase Agreements



	ENCORE CAPITAL GROUP, INC.

Date: May 8, 2018	/s/ Jonathan C. Clark
	Jonathan C. Clark
	Executive Vice President, Chief Financial Officer and Treasurer



Exhibit Number	Description
10.1	Purchase Agreement, dated May 7, 2018, by and among Encore Capital Group, Inc., JCF III Europe Holdings LP, JCF III Europe S.à r.l., Janus Holdings Luxembourg S.à r.l and the other parties named therein
10.2	Purchase Agreement, dated May 7, 2018, by and among Encore Capital Group, Inc., Janus Holdings Luxembourg S.à r.l, certain management shareholders of Cabot Holdings S.à r.l. Luxembourg and the other parties named therein
99.1	Press release dated May 8, 2018 announcing Q1 financial results
99.2	Press release dated May 8, 2018 announcing the execution of the Purchase Agreements



Seller	Company A Shares	Company B Shares	Holdings A Shares	A PECs Principal	A PECs Interest	B PECs Principal	B PECs Interest
JCF III Europe S.à r.l.	3,847,719	14,770	0	£106,382,311	£67,631,493	£408,334	£204,907
JCF III Europe Holdings LP	0	0	100	0	0	0	0


o	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)


o	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)


o	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))



Seller	Total Value of Consideration	Cash Consideration*	Stock Consideration
JCF III Europe S.à r.l.	£287,117,788	£151,924,081.25	4,327,601
JCF III Europe Holdings LP	£2,912	£1,569.08	43


•	Estimated Remaining Collections of $7.1 billion establishes new all-time high


•	Announces agreement to acquire the remaining interest in Cabot


•	Estimated Remaining Collections (ERC) grew 21% compared to the same period of the prior year, to a record $7.1 billion.


•	Investment in receivable portfolios was $277 million, including $179 million in the U.S. and $87 million in Europe, compared to $219 million deployed overall in the same period a year ago.


•	Gross collections grew 11% to a record $489 million, compared to $441 million in the same period of the prior year.


•	Total revenues, adjusted by net allowance reversals, were $327 million, including revenue associated with Wescot, a leading U.K. contingency debt collection and business process outsourcing (BPO) services company, acquired by Encore’s Cabot subsidiary during the fourth quarter of 2017. Total revenues were $272 million in the first quarter of 2017.



	March 31, 2018			December 31, 2017
Assets
Cash and cash equivalents	$	217,138		$	212,139
Investment in receivable portfolios, net	3,024,141			2,890,613
Deferred court costs, net	85,887			79,963
Property and equipment, net	81,008			76,276
Other assets	276,966			302,728
Goodwill	957,120			928,993
Total assets	$	4,642,260		$	4,490,712
Liabilities and equity
Liabilities:
Accounts payable and accrued liabilities	$	244,948		$	284,774
Debt, net	3,607,101			3,446,876
Other liabilities	33,187			35,151
Total liabilities	3,885,236			3,766,801
Commitments and contingencies
Redeemable noncontrolling interest	155,249			151,978
Equity:
Convertible preferred stock, $.01 par value, 5,000 shares authorized, no shares issued and outstanding	—			—
Common stock, $.01 par value, 50,000 shares authorized, 25,912 shares and 25,801 shares issued and outstanding as of March 31, 2018 and December 31, 2017, respectively	259			258
Additional paid-in capital	45,906			42,646
Accumulated earnings	626,130			616,314
Accumulated other comprehensive loss	(61,463		)	(77,356		)
Total Encore Capital Group, Inc. stockholders’ equity	610,832			581,862
Noncontrolling interest	(9,057		)	(9,929		)
Total equity	601,775			571,933
Total liabilities, redeemable equity and equity	$	4,642,260		$	4,490,712



	March 31, 2018		December 31, 2017
Assets
Cash and cash equivalents	$	104,679	$	88,902
Investment in receivable portfolios, net	1,423,774		1,342,300
Deferred court costs, net	30,169		26,482
Property and equipment, net	23,089		23,138
Other assets	121,499		122,263
Goodwill	750,427		724,054
Liabilities
Accounts payable and accrued liabilities	$	126,691	$	151,208
Debt, net	2,133,605		2,014,202
Other liabilities	2,103		1,494



	Three Months Ended March 31,
	2018			2017
Revenues
Revenue from receivable portfolios	$	281,009		$	249,838
Other revenues	35,968			19,971
Total revenues	316,977			269,809
Allowance reversals on receivable portfolios, net	9,811			2,132
Total revenues, adjusted by net allowances	326,788			271,941
Operating expenses
Salaries and employee benefits	89,259			68,278
Cost of legal collections	53,855			47,957
Other operating expenses	33,748			26,360
Collection agency commissions	11,754			11,562
General and administrative expenses	39,284			33,318
Depreciation and amortization	10,436			8,625
Total operating expenses	238,336			196,100
Income from operations	88,452			75,841
Other (expense) income
Interest expense	(57,462		)	(49,198		)
Other income	2,193			602
Total other expense	(55,269		)	(48,596		)
Income from continuing operations before income taxes	33,183			27,245
Provision for income taxes	(9,470		)	(12,067		)
Income from continuing operations	23,713			15,178
Loss from discontinued operations, net of tax	—			(199		)
Net income	23,713			14,979
Net (income) loss attributable to noncontrolling interest	(1,886		)	7,119
Net income attributable to Encore Capital Group, Inc. stockholders	$	21,827		$	22,098
Amounts attributable to Encore Capital Group, Inc.:
Income from continuing operations	$	21,827		$	22,297
Loss from discontinued operations, net of tax	—			(199		)
Net income	$	21,827		$	22,098

Earnings (loss) per share attributable to Encore Capital Group, Inc.:

Basic earnings (loss) per share from:
Continuing operations	$	0.84		$	0.86
Discontinued operations	$	—		$	(0.01	)



	Three Months Ended March 31,
	2018			2017
Operating activities:
Net income	$	23,713		$	14,979
Adjustments to reconcile net income to net cash provided by operating activities:
Loss from discontinued operations, net of income taxes	—			199
Depreciation and amortization	10,436			8,625
Other non-cash expense, net	12,939			11,904
Stock-based compensation expense	2,276			750
Deferred income taxes	5,071			(4,040		)
Allowance reversals on receivable portfolios, net	(9,811		)	(2,132		)
Changes in operating assets and liabilities
Deferred court costs and other assets	(5,811		)	(2,413		)
Prepaid income tax and income taxes payable	(2,245		)	15,383
Accounts payable, accrued liabilities and other liabilities	(35,539		)	(16,095		)
Net cash provided by operating activities	1,029			27,160
Investing activities:
Purchases of receivable portfolios, net of put-backs	(280,909		)	(222,885		)
Collections applied to investment in receivable portfolios, net	206,402			189,665
Purchases of property and equipment	(11,220		)	(6,081		)
Other, net	1,239			(9,690		)
Net cash used in investing activities	(84,488		)	(48,991		)
Financing activities:
Payment of loan costs	(90		)	(2,742		)
Proceeds from credit facilities	177,449			199,962
Repayment of credit facilities	(87,356		)	(258,073		)
Repayment of senior secured notes	(1,029		)	(3,087		)
Proceeds from issuance of convertible senior notes	—			150,000
Repayment of convertible senior notes	—			(60,406		)
Proceeds from convertible hedge instruments	—			5,580
Taxes paid related to net share settlement of equity awards	(2,571		)	(2,065		)
Other, net	(1,765		)	(876		)
Net cash provided by financing activities	84,638			28,293
Net increase in cash and cash equivalents	1,179			6,462
Effect of exchange rate changes on cash and cash equivalents	3,820			3,704
Cash and cash equivalents, beginning of period	212,139			149,765
Cash and cash equivalents, end of period	217,138			159,931


•	Total interest expense increased to $57.5 million, compared to $49.2 million in the same period of the prior year, principally as a result of larger investments in receivables.


•	GAAP net income attributable to Encore was $21.8 million, or $0.83 per fully diluted share, as compared to $22.3 million, or $0.85 per fully diluted share in the same period a year ago.


•	Adjusted income attributable to Encore was $25.8 million, compared to $24.8 million in the first quarter of 2017.


•	Adjusted income attributable to Encore per share (also referred to as Economic EPS) was $0.98, compared to $0.95 in the same period of the prior year.


•	Available capacity under Encore’s domestic revolving credit facility, after taking into account borrowing base and applicable debt covenants, was $238 million as of March 31, 2018.



	Three Months Ended March 31,
	2018						2017
	$			Per Diluted Share— Accounting and Economic			$			Per Diluted Share— Accounting and Economic
GAAP net income from continuing operations attributable to Encore, as reported	$	21,827		$	0.83		$	22,297		$	0.85
Adjustments:
Convertible notes non-cash interest and issuance cost amortization	3,035			0.12			3,014			0.12
Acquisition, integration and restructuring related expenses⁽¹⁾	572			0.02			855			0.04
Net gain on fair value adjustments to contingent consideration⁽²⁾	(2,274		)	(0.09		)	—			—
Amortization of certain acquired intangible assets⁽³⁾	2,068			0.08			560			0.02
Expenses related to Cabot IPO⁽⁴⁾	2,984			0.11			—			—
Income tax effect of the adjustments⁽⁵⁾	(810		)	(0.03		)	(1,489		)	(0.06		)
Adjustments attributable to noncontrolling interest⁽⁶⁾	(1,558		)	(0.06		)	(482		)	(0.02		)
Adjusted income attributable to Encore	$	25,844		$	0.98		$	24,755		$	0.95


(1)	Amount represents acquisition, integration and restructuring related expenses. We adjust for this amount because we believe these expenses are not indicative of ongoing operations; therefore adjusting for these expenses enhances comparability to prior periods, anticipated future periods, and our competitors’ results.


(2)	Amount represents the net gain recognized as a result of fair value adjustments to contingent considerations that were established for our acquisitions of debt solution service providers in Europe. We have adjusted for this amount because we do not believe this is indicative of ongoing operations.


(4)	Amount represents expenses related to our process to assess options in relation to a potential initial public offering by our subsidiary Cabot. We adjust for this amount because we believe these expenses are not indicative of ongoing operations; therefore adjusting for these expenses enhances comparability to prior periods, anticipated future periods, and our competitors’ results.


(5)	Amount represents the total income tax effect of the adjustments, which is generally calculated based on the applicable marginal tax rate of the jurisdiction in which the portion of the adjustment occurred.


(6)	Certain of the above pre-tax adjustments include expenses recognized by our partially-owned subsidiaries. This adjustment represents the portion of the non-GAAP adjustments that are attributable to noncontrolling interest.


(1)	Operating expenses related to non-portfolio purchasing and recovery business include operating expenses from other operating segments that primarily engage in fee-based business, as well as corporate overhead not related to our portfolio purchasing and recovery business.