UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No.2)*
Encore Capital Group, Inc.
(Name of Issuer)
Common Stock ($.01 par value)
(Title of Class of Securities)
292554 10 2
(CUSIP Number)
Stuart I. Rosen
Senior Vice President and Associate General Counsel
Triarc Companies, Inc.
280 Park Avenue
New York, New York 10017
(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications)
August 29, 2003
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition that is the subject of this Schedule 13D, and is filing
this schedule because of ss.240.13d-1(e), (f) or (g), check the following
box [ ].
Note: Schedules filed in paper format shall include a signed original and
five copies of the Schedule, including all exhibits. See ss.240.13d-7 for other
parties to whom copies are to be sent.
* The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purposes of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
CUSIP No. 292554 10 2 13D
(1) Name of Reporting Person Madison West Associates Corp.
I.R.S. Identification No. of Above
Person
(2) Check the Appropriate Box if a Member (a)
of a Group (b) X
(3) SEC Use Only
(4) Source of Funds AF, WC
(5) Check Box if Disclosure of [ ]
Legal Proceedings is
Required Pursuant to Items
2(d) or 2(e)
(6) Citizenship or Place of Organization Delaware
Number of Shares (7) Sole Voting Power None
Beneficially Owned by
Each Reporting Person
With
(8) Shared Voting Power 2,281,269
(9) Sole Dispositive Power None
(10) Shared Dispositive Power 2,281,269
(11) Aggregate Amount Beneficially Owned by
Each Reporting Person 2,281,269
(12) Check Box if the Aggregate Amount
in Row (11) Excludes Certain Shares [ ]
(13) Percent of Class Represented by Amount in 24.8%*
Row (11)
(14) Type of Reporting Person CO
*Based on 7,434,633 shares of common stock currently outstanding, as reported
in the Company's Quarterly Report on Form 10-Q for the quarter ended June 30,
2003 filed with the Securities and Exchange Commission on August 13, 2003.
(1) Name of Reporting Person Triarc Companies, Inc.
I.R.S. Identification No. of Above
Person
(2) Check the Appropriate Box if a Member (a)
of a Group (b) X
(3) SEC Use Only
(4) Source of Funds WC
(5) Check Box if Disclosure of Legal [ ]
Proceedings is Required Pursuant
to Items 2(d) or 2(e)
(6) Citizenship or Place of Organization Delaware
Number of Shares (7) Sole Voting Power None
Beneficially Owned by
Each Reporting Person
With
(8) Shared Voting Power 2,382,544
(9) Sole Dispositive Power None
(10)Shared Dispositive Power 2,382,544
(11) Aggregate Amount Beneficially Owned
by Each Reporting Person 2,382,544
(12) Check Box if the Aggregate Amount in [ ]
Row (11) Excludes Certain Shares
(13) Percent of Class Represented by 25.7%*
Amount in Row (11)
(14) Type of Reporting Person CO
*Based on 7,434,633 shares of common stock currently outstanding, as reported
in the Company's Quarterly Report on Form 10-Q for the quarter ended June 30,
2003 filed with the Securities and Exchange Commission on August 13, 2003.
(1) Name of Reporting Person Nelson Peltz
I.R.S. Identification No. of Above
Person
(2) Check the Appropriate Box if a Member (a)
of a Group (b) X
(3) SEC Use Only
(4) Source of Funds OO
(5) Check Box if Disclosure of Legal [ ]
Proceedings is Required Pursuant
to Items 2(d) or 2(e)
(6) Citizenship or Place of Organization United States
Number of Shares (7) Sole Voting Power None
Beneficially Owned by
Each Reporting Person
With
(8) Shared Voting Power 4,856,012
(9) Sole Dispositive Power None
(10)Shared Dispositive Power 4,856,012
(11) Aggregate Amount Beneficially Owned by
Each Reporting Person 4,856,012
(12) Check Box if the Aggregate Amount in [ ]
Row (11) Excludes Certain Shares
(13) Percent of Class Represented by Amount 43.5%*
in Row (11)
(14) Type of Reporting Person IN
*Based on 7,434,633 shares of common stock currently outstanding, as reported
in the Company's Quarterly Report on Form 10-Q for the quarter ended June 30,
2003 filed with the Securities and Exchange Commission on August 13, 2003.
(1) Name of Reporting Person Peter W. May
I.R.S. Identification No. of Above
Person
(2) Check the Appropriate Box if a Member (a)
of a Group (b) X
(3) SEC Use Only
(4) Source of Funds OO
(5) Check Box if Disclosure of Legal [ ]
Proceedings is Required Pursuant
to Items 2(d) or 2(e)
(6) Citizenship or Place of Organization United States
Number of Shares (7) Sole Voting Power 15,000
Beneficially Owned by
Each Reporting Person
With
(8) Shared Voting Power 3,524,042
(9) Sole Dispositive Power 15,000
(10)Shared Dispositive Power 3,524,042
(11) Aggregate Amount Beneficially Owned by
Each Reporting Person 3,539,042
(12) Check Box if the Aggregate Amount in [ ]
Row (11) Excludes Certain Shares
(13) Percent of Class Represented by Amount 35.0%*
in Row (11)
(14) Type of Reporting Person IN
================================================
*Based on 7,434,633 shares of common stock currently outstanding, as reported
in the Company's Quarterly Report on Form 10-Q for the quarter ended June 30,
2003 filed with the Securities and Exchange Commission on August 13, 2003.
(1) Name of Reporting Person Neale M. Albert
I.R.S. Identification No. of Above
Person
(2) Check the Appropriate Box if a Member (a)
of a Group (b) X
(3) SEC Use Only
(4) Source of Funds OO
(5) Check Box if Disclosure of Legal [ ]
Proceedings is Required Pursuant
to Items 2(d) or 2(e)
(6) Citizenship or Place of Organization United States
Number of Shares (7) Sole Voting Power None
Beneficially Owned by
Each Reporting Person
With
(8) Shared Voting Power 1,743,816
(9) Sole Dispositive Power None
(10)Shared Dispositive Power 1,743,816
(11) Aggregate Amount Beneficially Owned by
Each Reporting Person 1,743,816
(12) Check Box if the Aggregate Amount in [ ]
Row (11) Excludes Certain Shares
(13) Percent of Class Represented by Amount 21.1%*
in Row (11)
(14) Type of Reporting Person IN
*Based on 7,434,633 shares of common stock currently outstanding, as reported
in the Company's Quarterly Report on Form 10-Q for the quarter ended June 30,
2003 filed with the Securities and Exchange Commission on August 13, 2003.
(1) Name of Reporting Person DWG Acquisition Group, L.P.
I.R.S. Identification No. of Above
Person
(2) Check the Appropriate Box if a Member (a)
of a Group (b) X
(3) SEC Use Only
(4) Source of Funds OO
(5) Check Box if Disclosure of Legal [ ]
Proceedings is Required Pursuant
to Items 2(d) or 2(e)
(6) Citizenship or Place of Organization Delaware
Number of Shares (7) Sole Voting Power None
Beneficially Owned by
Each Reporting Person
With
(8) Shared Voting Power 2,382,544
(9) Sole Dispositive Power None
(10)Shared Dispositive Power 2,382,544
(11) Aggregate Amount Beneficially Owned by
Each Reporting Person 2,382,544
(12) Check Box if the Aggregate Amount in [ ]
Row (11) Excludes Certain Shares
(13) Percent of Class Represented by Amount 25.7%*
in Row (11)
(14) Type of Reporting Person PN
*Based on 7,434,633 shares of common stock currently outstanding, as reported
in the Company's Quarterly Report on Form 10-Q for the quarter ended June 30,
2003 filed with the Securities and Exchange Commission on August 13, 2003.
Amendment No. 2 to Schedule 13D
This Amendment No. 2 to Schedule 13D is filed by Madison West Associates
Corp. ("Madison West"), Triarc Companies, Inc. ("Triarc"), Nelson Peltz
("Peltz"), Peter W. May ("May"), Neale M. Albert ("Albert") and DWG Acquisition
Group, L.P. ("DWG Acquisition" and, together with Madison West, Triarc, Peltz,
May and Albert, the "Reporting Persons") to supplement and amend the Schedule
13D originally filed by the Reporting Persons on March 4, 2002, as supplemented
and amended by Amendment No. 1, dated October 31, 2002 (the "Schedule 13D").
Items 1, 2, 4, 6 and 7 are hereby supplemented and amended. Unless otherwise
indicated, all capitalized terms shall have the same meaning as provided in the
Schedule 13D.
Item 1. Security and Issuer.
Item 1 is amended in its entirety to read as follows:
The class of equity securities to which this statement relates is the
common stock, par value $.01 per share (the "Common Stock"), of Encore Capital
Group, Inc. (formerly known as MCM Capital Group, Inc.), a corporation organized
under the laws of the State of Delaware (the "Company"), which has its principal
executive offices at 5775 Roscoe Court, San Diego, CA 92123.
Item 2. Identity and Background
(c) Employment and Employer
Schedules I and II are amended and restated as set forth herein and are
incorporated herein by reference.
Item 4. Purpose of Transaction.
Item 4 is supplemented as follows:
On August 29, 2003, the Company filed a Form S-1 with the Securities and
Exchange Commission, relating to a proposed offering (the "Offering") of up to
5,750,000 shares of the Company's common stock, including up to 750,000 shares
to cover over-allotments. A portion of the shares included in the Offering may
come from selling stockholders, including the Reporting Persons, although the
number of shares to be sold and the category of sellers will depend on the
Offering price and market conditions at the time of sale. The underwriters in
connection with the Offering have informed the Company that the Series A
Preferred Stock will need to be converted to shares of the Company's common
stock in conjunction with the Offering. Accordingly, the Reporting Persons and
each of the remaining holders of Series A Preferred Stock have entered into a
Preferred Stock Conversion Agreement, dated as of August 29, 2003, pursuant to
which each Series A Preferred share will be converted into ten shares of the
Company's common stock effective as of the closing of the Offering. The
Reporting Persons and the other converting stockholders will not be required to
pay any consideration in connection with the conversion, but will receive
accrued and unpaid dividends on their Series A Preferred shares through the
closing date. The Preferred Stock Conversion Agreement will terminate if the
closing of the Offering has not occurred by November 30, 2003 or the Offering is
sooner terminated.
Item 6. Contracts, Arrangements, Understandings or Relationships With Respect
to Securities of the Issuer.
Item 6 is supplemented as follows:
See Item 4 for a description of the Preferred Stock Conversion Agreement,
dated as of August 29, 2003.
Item 7. Materials to Be Filed as Exhibits.
Item 7 is supplemented by adding the following:
Exhibit 12 Form of Preferred Stock Conversion Agreement, dated as of August
29, 2003, entered into between Encore Capital Group, Inc. and each of the Encore
Series A Preferred Stockholders, including Madison West Associates Corp. (as to
174,566 shares of Preferred Stock), The Peltz Family Limited Partnership (as to
187,115 shares of Preferred Stock), the Jonathan P. May 1998 Trust (as to 42,017
shares of Preferred Stock) and the Leslie A. May 1998 Trust (as to 42,017 shares
of Preferred Stock).
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement with respect to the
undersigned is true, complete and correct.
Date: September 4, 2003
MADISON WEST ASSOCIATES CORP.
By: Brian L. Schorr
-----------------------------------
Name: Brian L. Schorr
Title: President and General Counsel
TRIARC COMPANIES, INC.
By: Brian L. Schorr
------------------------------------
Name: Brian L. Schorr
Title: Executive Vice President and
General Counsel
Nelson Peltz
---------------------------------------
Nelson Peltz
Peter W. May
--------------------------------------
Peter W. May
Neale M. Albert
----------------------------------------
Neale M. Albert
DWG ACQUISITION GROUP, L.P.
By: Nelson Peltz
----------------------------------
Nelson Peltz
General Partner
By: Peter W. May
------------------------------------
Peter W. May
General Partner
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS
TRIARC COMPANIES, INC.
Set forth below are the names, citizenship, addresses and, to the best
knowledge of the Reporting Persons, the beneficial ownership in the securities
of the Company of each of the directors and executive officers of Triarc, other
than Messrs. Peltz and May who are also Reporting Persons. (1)
Name Citizenship Residence or Business Beneficial Ownership
Address
Hugh L. Carey USA 200 Park Avenue
New York, NY 10166 0
Clive Chajet USA 575 Madison Avenue,
New York, NY 10022 0
Joseph A. Levato USA 280 Park Avenue
New York, NY 10017 0
David E. Schwab II USA 1133 Avenue of the
Americas 0
New York, NY 10036-6799
Raymond S. Troubh USA 10 Rockefeller Plaza
New York, NY 10020 0
Gerald Tsai, Jr. USA 200 Park Avenue
New York, NY 10166 0
Edward Garden USA 280 Park Avenue
New York, NY 10017 68,263 (2)
Brian L. Schorr USA 280 Park Avenue
New York, NY 10017 32,343 (3)
Jonathan P. May USA 280 Park Avenue
New York, NY 10017 15,000 (4)
Francis T. McCarron USA 280 Park Avenue
New York, NY 10017 0
Stuart I. Rosen USA 280 Park Avenue
New York, NY 10017 28,533 (5)
Fred H. Schaefer USA 280 Park Avenue
New York, NY 10017 50,000 (6)
Anne A. Tarbell USA 280 Park Avenue
New York, NY 10017 0
1) To the best knowledge of the Reporting Persons, except where otherwise
noted, each of the directors and executive officers of Triarc listed
above (i) funded their purchase of shares of Common Stock reported
herein from personal funds; (ii) acquired the shares of Common Stock
for investment purposes; (iii) has sole voting and dispositive power
over the shares listed on this Schedule I and (iv) has the sole right
to receive dividends from, or the proceeds from the sale of the shares
listed on this Schedule I.
2) Consists of 68,263 shares of Common Stock.
3) Includes 8,533 shares of Common Stock and 23,810 shares of Common Stock
issuable upon conversion of Series A preferred stock.
4) Consists of 15,000 shares of Common Stock. Mr. May is also the beneficiary
of the shares held by JM Trust.
5) Includes 8,533 shares of Common Stock and 20,000 shares of Common Stock
issuable upon conversion of Series A preferred stock.
6) Consists of 50,000 shares of Common Stock.
SCHEDULE II
DIRECTORS AND EXECUTIVE OFFICERS
MADISON WEST ASSOCIATES CORP.
Set forth below are the names, citizenship, addresses and, to the best
knowledge of the Reporting Persons, the beneficial ownership in the securities
of the Company of each of the directors and executive officers of Madison West.
(1)
Name Citizenship Residence or Business Beneficial Ownership
Address
Francis T. McCarron USA 280 Park Avenue
New York, NY 10017 0
Brian L. Schorr USA 280 Park Avenue
New York, NY 10017 32,343 (2)
Stuart I. Rosen USA 280 Park Avenue
New York, NY 10017 28,533 (2)
Fred H. Schaefer USA 280 Park Avenue
New York, NY 10017 50,000 (2)
Anne A. Tarbell USA 280 Park Avenue
New York, NY 10017 0
1) To the best knowledge of the Reporting Persons, except where otherwise
noted, each of the directors and executive officers of Madison West
listed above (i) funded their purchase of shares of Common Stock
reported herein from personal funds; (ii) acquired the shares of
Common Stock for investment purposes; and (iii) has sole voting and
dispositive power over the shares listed on this Schedule 2.
2) See Schedule I.
Exhibit 12
FORM OF
PREFERRED STOCK CONVERSION AGREEMENT
This Preferred Stock Conversion Agreement (this "Agreement") is made as of
August 29, 2003 by and among Encore Capital Group, Inc., a Delaware corporation
(the "Company"), and the Purchasers identified in the signature pages attached
hereto (each, a "Purchaser" and, collectively, the "Purchasers").
RECITALS
A. The Purchasers own shares (the "Preferred Shares") of Series A Senior
Cumulative Participating Convertible Preferred Stock.
B. The Company is pursuing a public offering of its common stock
(the "Offering").
C. The underwriters have informed the Company that the Preferred Shares will
need to be converted to shares of common stock (the "Common Shares") in
conjunction with the Offering.
D. The Purchasers have agreed to exercise their rights to convert the
Preferred Shares into Common Shares to ensure a successful Offering.
NOW, THEREFORE, in consideration of the mutual covenants contained in this
Agreement and for other good and valuable consideration the receipt and adequacy
of which are hereby acknowledged, the Company and the Purchasers agree as
follows:
PURCHASE, ESCROW AND CLOSINGS
Conversion of Preferred Stock. Effective as of the closing of the Offering, the
Purchasers agree to convert all of their Preferred Stock into the Common Shares
in accordance with the terms of the Preferred Stock, which entitles the
Purchasers to receive ten (10) Common Shares in exchange for each share of
Preferred Stock so converted.
Escrow.
The parties shall designate an escrow agent (the "Escrow Agent") and establish
an escrow account (the "Escrow Account") pursuant to an escrow agreement
substantially in the form attached hereto as Exhibit A (the "Escrow Agreement").
Within six (6) business days of the last signature hereto, each Purchaser will
deliver to the Escrow Agent to be held in accordance with the Escrow Agreement:
each Purchaser's certificates for Preferred Stock; and
any other documents required to be duly and validly executed and delivered by
the Purchasers pursuant to the Escrow Agreement.
Prior to the Closing, the Company will:
deposit into the Escrow Account the accrued and unpaid dividends with respect to
the Preferred Stock through the Closing date;
deliver to the Escrow Agent the certificates for the Common Shares; and
deliver to the Escrow Agent all documents required to be duly and validly
executed and delivered by the Company pursuant to the Escrow Agreement.
Closing. Upon satisfaction of the conditions set forth in Section 1.4, the
Closing of the conversion of the Preferred Shares shall occur at the offices of
the Company. At the Closing, the Escrow Agent shall deliver or cause to be
delivered the following in accordance with the escrow instructions contained in
the Escrow Agreement:
to each of the Purchasers, certificates evidencing the Common Shares (excluding
the shares to be included in the Offering) duly endorsed in blank (or
alternatively, at each Purchaser's election, if feasible, evidence of transfer
may be effected through the facilities of the Depository Trust Company or other
means acceptable to the Company), which certificate will have an appropriate
restrictive legend.
to the Company, the certificates for the Preferred Shares, for cancellation.
Closing Conditions. The Closing of the conversion of Preferred Shares and
issuance of the Common Shares is subject to:
Closing of the Offering.
All documents, certificates and instruments required to be duly and validly
executed and delivered by the all of the holders of the Preferred Shares
pursuant to the Escrow Agreement and all amounts required to be deposited by the
Company with the Escrow Agent shall have been deposited with and received by the
Escrow Agent.
All representations and warranties of the parties contained herein shall remain
true and correct in all material respects as of the Closing Date.
As of the Closing Date, there shall have been no Material Adverse Effect (as
defined in Section 2.1(c)) with respect to the Company since the date hereof.
From the date hereof to the Closing Date, trading in the Company's common stock
shall not have been suspended or limited, minimum prices shall not have been
established on the Nasdaq National Market, nor shall a banking moratorium have
been declared either by the United States or applicable state authorities.
Termination. If the Closing of the Offering has not occurred by November 30,
2003 or if the Offering is sooner terminated, this Agreement will be terminated
and have no further force and effect. In that event, the return of all deposits,
documents, certificates and other instruments shall be governed by the terms of
the Escrow Agreement.
REPRESENTATIONS AND WARRANTIES
Representations and Warranties of the Company. The Company hereby makes the
following representations and warranties as of the date hereof , and as of the
Closing Date, to each of the Purchasers (and any permitted assignees):
Organization. The Company is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, with the
requisite power and authority to own and use its properties and assets and to
carry on its business as currently conducted.
Authorization; Enforcement. The Company has the requisite corporate power and
authority to enter into and to consummate the transactions contemplated hereby
and otherwise to carry out its obligations hereunder. The execution and delivery
of this Agreement by the Company and the consummation by it of the transactions
contemplated thereby have been duly authorized by all necessary action on the
part of the Company and no further action is required by the Company in
connection therewith. This Agreement has been duly executed and delivered by the
Company and constitutes a valid and binding obligation of the Company
enforceable against it in accordance with its terms, except (i) as limited by
applicable bankruptcy, insolvency, reorganization, moratorium and other laws of
general application affecting enforcement of creditors' rights generally and
(ii) as limited by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies (the "Enforceability Exceptions").
No Conflicts. The execution, delivery and performance of this Agreement by the
Company and the consummation by the Company of the transactions contemplated
hereby do not and will not (i) conflict with or violate any provision of the
Company's certificate or articles of incorporation, bylaws or other
organizational or charter documents, or (ii) conflict with, or constitute a
default (or an event that with notice or lapse of time or both would become a
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation (with or without notice, lapse of time or both) of,
any agreement, credit facility, debt or other instrument or other understanding
to which the Company is a party or by which any property or asset of the Company
is bound or affected, or (iii) result in a violation of any law, rule,
regulation, order, judgment, injunction, decree or other restriction of any
court or governmental authority to which the Company is subject (including
federal and state securities laws and regulations), or by which any property or
asset of the Company is bound or affected; except in the case of each of clauses
(ii) and (iii), such as would not have or reasonably be expected to result in a
material adverse effect on (x) the condition, financial or otherwise, earnings,
business, operations or prospects of the Company taken as a whole, (y) the
legality, validity or enforceability of this Agreement, or (z) adversely impair
the Company's ability to perform in any material respect on a timely basis its
obligations under this Agreement (any of (x), (y) or (z), a "Material Adverse
Effect").
No Consents. No consent, approval, authorization or order of, or any filing or
declaration with, any court or governmental agency or body is required in
connection with the consummation by the Company of the transactions on its part
contemplated by this Agreement, except such as may be required under the
Securities Act of 1933 or the rules and regulations promulgated thereunder (the
"Securities Act"), state securities or blue sky laws, and the by-laws and rules
of the Nasdaq National Market, all of which shall be timely made or obtained.
SEC Reports. The Company has filed all reports required to be filed by it under
the Securities Exchange Act 1934, including pursuant to Section 13(a) or 15(d)
thereof, and the rules and regulations thereunder (the "Exchange Act") for the
two years preceding the date hereof (the foregoing materials and any materials
incorporated therein by reference being collectively referred to herein as the
"SEC Reports") on a timely basis or has received a valid extension of such time
of filing and has filed any such SEC Reports prior to the expiration of any such
extension. As of their respective dates, the SEC Reports complied in all
material respects with the requirements of the Securities Act and the Exchange
Act and the rules and regulations of the Securities and Exchange Commission (the
"Commission") promulgated thereunder, and none of the SEC Reports, when filed,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
Financial Statements. The financial statements filed with the Commission as a
part of the SEC Reports present fairly, in all material respects, the financial
position of the Company and its consolidated subsidiaries as of and at the dates
indicated and the results of their operations and cash flows for the periods
specified therein, subject, in the case of interim financial statements, to the
normal year-end adjustments which are not expected to be material in amount.
Such financial statements have been prepared in conformity with generally
accepted accounting principles as applied in the United States and in effect as
of the date of the applicable financial statements and supporting schedules, as
applicable, applied on a consistent basis throughout the periods involved,
except as may be expressly stated in the related notes thereto, and comply in
all material respects with the Securities Act, the Exchange Act and the
applicable rules and regulations of the Commission thereunder.
Listing. As of or immediately following the Closing, the Common Shares will be
listed on the Nasdaq National Market.
Representations and Warranties of the Purchasers. Each Purchaser hereby
severally and not jointly makes the following representations and warranties to
the Company as of the date hereof, and as of the Closing Date:
Organization. If an entity, such Purchaser is duly organized, validly existing
and in good standing under the laws of the jurisdiction of its organization with
full right, corporate, partnership or other power and authority to enter into
and to consummate the transactions contemplated by this Agreement and otherwise
to carry out its obligations thereunder.
Authorization; Enforcement. Such Purchaser has the requisite power and authority
to enter into and to consummate the transactions contemplated hereby and
otherwise to carry out its obligations hereunder. The execution, delivery and
performance by such Purchaser of the transactions contemplated by this Agreement
has been duly authorized by all necessary action on the part of the Purchaser.
This Agreement has been duly executed by such Purchaser, and constitutes the
valid and legally binding obligation of such Purchaser, enforceable against it
in accordance with its terms, except for the Enforceability Exceptions.
Investment Intent. Such Purchaser understands that the Common Shares will be
"restricted securities" and have not been registered under the Securities Act or
any applicable state securities law. Such Purchaser is acquiring the Common
Shares as principal for its own account for investment purposes only and not
with a view to the distribution thereof, except pursuant to a valid and
effective registration statement.
Purchaser Status. The Purchaser is an Accredited Investor or a Qualified
Institutional Buyer, as defined under the Securities Act.
Experience of Such Purchaser. Such Purchaser, either alone or together with its
representatives, has such knowledge, sophistication and experience in business
and financial matters so as to be capable of evaluating the merits and risks of
the prospective investment in the Common Shares, and has evaluated the merits
and risks of such investment. Such Purchaser is able to bear the economic risk
of an investment in the Common Shares and is able to afford a complete loss of
such investment.
OTHER AGREEMENTS OF THE PARTIES
Transfer Restrictions.
The Common Shares may only be disposed of in compliance with state and federal
securities laws. In connection with any transfer of Common Shares other than
pursuant to an effective registration statement, to the Company, to an affiliate
(as defined under the federal securities laws) of a Purchaser or in connection
with a pledge as contemplated in Section 3.1(b), the Company may require the
transferor thereof to provide to the Company an opinion of counsel selected by
the transferor, the form and substance of which opinion shall be reasonably
satisfactory to the Company, to the effect that such transfer does not require
registration of such transferred Common Shares under the Securities Act. As a
condition of transfer, any such transferee shall agree in writing to be bound by
the terms of this Agreement and shall have the rights of a Purchaser under this
Agreement.
(i) The Purchasers understand that so long as is required by this Section
3.1(b), a legend shall be placed on the Common Shares in the following form:
These securities have not been registered with the Securities
and Exchange Commission or the securities commission of any
state in reliance upon an exemption from registration under
the Securities Act of 1933, as amended, and, accordingly, may
not be offered or sold except pursuant to an effective
registration statement under the Securities Act or pursuant to
any available exemption from, or in a transaction not subject
to, the registration requirements of the Securities Act and in
accordance with applicable state securities laws as evidenced
by a legal opinion of counsel to the transferor to such
effect, the substance of which shall be reasonably acceptable
to the Company. These securities may be pledged in connection
with a bona fide margin account with a registered
broker-dealer or other loan with a financial institution that
is an accredited investor or qualified institutional buyer as
defined under the Securities Act.
(ii) The Company acknowledges and agrees that a Purchaser may from time to time
pledge pursuant to a bona fide margin agreement with a registered broker-dealer
or grant a security interest in some or all of the Common Shares to a financial
institution that is an Accredited Investor or Qualified Institutional Buyer as
defined under the Securities Act and, if required under the terms of such
arrangement, such Purchaser may transfer pledged or secured Common Shares to
the pledgees or secured parties. Such a pledge or transfer would not be
subject to approval of the Company and no opinion of legal counsel of the
pledgee, secured party or pledgor shall be required in connection therewith. At
the appropriate Purchaser's expense, the Company will execute and deliver such
reasonable documentation as a pledgee or secured party of the Common Shares may
reasonably request in connection with a pledge or transfer of the Common Shares.
Certificates evidencing the Common Shares shall not contain any legend
(including the legend set forth in Section 3.1(b)), (i) while a registration
statement covering the resale of such security is effective under the Securities
Act, or (ii) following any sale of such Securities pursuant to Rule 144, unless
otherwise required by applicable law or (iii) if such Common Shares are eligible
for sale under Rule 144(k), or (iv) if such legend is not required under
applicable requirements of the Securities Act. In such event, the Company shall
cause its counsel to issue a legal opinion to the Company's transfer agent to
the extent necessary to effect the removal of the legend hereunder. The Company
agrees that at such time as the legend is no longer required under this Section
3.1(c), it will, no later than 3 trading days following the delivery by a
Purchaser to the Company or the Company's transfer agent of a certificate
representing shares of Company Common Stock issued with a restrictive legend
(and such documents as the Company may reasonably request to permit a sale
pursuant to Rule 144, if applicable), deliver or cause to be delivered to such
Purchaser a certificate representing such shares that is free from all
restrictive legends.
MISCELLANEOUS
Fees and Expenses. The Company shall pay the fees and expenses of the Company's
advisers, counsel, accountants and other experts, if any, the Purchaser's
counsel, and all other expenses incurred by the Company, incident to the
negotiation, preparation, execution, delivery and performance of this Agreement.
Entire Agreement. This Agreement, together with the exhibits and schedules
thereto, contain the entire understanding of the parties with respect to the
subject matter hereof and supersede all prior agreements and understandings,
oral or written, with respect to such matters, which the parties acknowledge
have been merged into such documents, exhibits and schedules.
Notices. Any and all notices or other communications or deliveries required or
permitted to be provided hereunder shall be in writing and shall be deemed given
and effective on the earliest of (a) the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number specified in
this Section prior to 3:30 p.m. (California time) on a trading day, (b) the next
trading day after the date of transmission, if such notice or communication is
delivered via facsimile at the facsimile number specified in this Section on a
day that is not a trading day or later than 3:30 p.m. (California time) on any
trading day, (c) the trading day following the date of mailing, if sent by U.S.
nationally recognized overnight courier service, or (d) upon actual receipt by
the party to whom such notice is required to be given. The address for such
notices and communications shall be as set forth on the signature pages attached
hereto.
Amendments; Waivers. No provision of this Agreement may be waived or amended
except in a written instrument signed, in the case of an amendment, by the
Company and a majority in interest of the Purchasers or, in the case of a
waiver, by the party against whom enforcement of any such waiver is sought. No
waiver of any default with respect to any provision, condition or requirement of
this Agreement shall be deemed to be a continuing waiver in the future or a
waiver of any subsequent default or a waiver of any other provision, condition
or requirement hereof, nor shall any delay or omission of either party to
exercise any right hereunder in any manner impair the exercise of any such
right.
Governing Law. All questions concerning the construction, validity, enforcement
and interpretation of this Agreement shall be governed by and construed and
enforced in accordance with the internal laws of Delaware, without regard to the
principles of conflicts of law thereof.
Execution. This Agreement may be executed in two or more counterparts, all of
which when taken together shall be considered one and the same agreement, it
being understood that all parties need not sign the same counterpart. In the
event that any signature is delivered by facsimile or email transmission, such
signature shall create a valid and binding obligation of the party executing (or
on whose behalf such signature is executed) with the same force and effect as if
such facsimile or email signature page were an original thereof.
Independent Nature of Purchasers' Obligations and Rights. The obligations of
each Purchaser under this Agreement are several and not joint with the
obligations of any other Purchaser, and no Purchaser shall be responsible in any
way for the performance of the obligations of any other Purchaser under this
Agreement. Nothing contained herein, and no action taken by any Purchaser
pursuant thereto, shall be deemed to constitute the Purchasers as a partnership,
an association, a joint venture or any other kind of entity, or create a
presumption that the Purchasers are in any way acting in concert or as a group
with respect to such obligations or the transactions contemplated by this
Agreement. Each Purchaser shall be entitled to independently protect and enforce
its rights, including without limitation, the rights arising out of this
Agreement, and it shall not be necessary for any other Purchaser to be joined as
an additional party in any proceeding for such purpose.
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[THIS PAGE INTENTIONALLY LEFT BLANK.]
IN WITNESS WHEREOF, the parties hereto have caused this Preferred Stock
Conversion Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.
ENCORE CAPITAL GROUP, INC.
By: ________________________
Title: _______________________
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGE OF PURCHASERS FOLLOWS]
IN WITNESS WHEREOF, the parties hereto have caused this Preferred Stock
Conversion Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.
[PURCHASER]
By:_________________________________
Name:
Title:
* Number of Preferred Shares to be converted: _____________
Address for Notice:
Telephone No.: (____) _________
Facsimile No.: (____) __________
With copies to:
Facsimile No.: (___) _____________
Attn:________________
* Must be all your shares.