PRGX Global, Inc.
Annual Report 2018

Plain-text annual report

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549________________________________________FORM 10-K ________________________________________(Mark One)ýANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2018OR ¨TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF1934For the transition period from to Commission File Number 0-28000 PRGX Global, Inc.(Exact name of registrant as specified in its charter) Georgia 58-2213805(State or other jurisdiction of (I.R.S. Employerincorporation or organization) Identification No.) 600 Galleria Parkway 30339-5986Suite 100 (Zip Code)Atlanta, Georgia (Address of principal executive offices) Registrant’s telephone number, including area code: (770) 779-3900Securities registered pursuant to Section 12(b) of the Act:Title of each className of each exchange on which registeredCommon Stock, No Par ValueThe NASDAQ Stock Market LLC (The Nasdaq Global Select Market)Securities registered pursuant to Section 12(g) of the Act: NoneIndicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the SecuritiesAct. Yes ¨ No ýIndicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨ No ýNote – Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Exchange Act from theirobligations under those Sections.Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filingrequirements for the past 90 days. Yes ý No ¨Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein andwill not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form10-K or any amendment to this Form 10-K. ¨Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 ofRegulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit suchfiles). Yes ý No ¨Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or anemerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company"in Rule 12b-2 of the Exchange Act.¨ Large accelerated filerýAccelerated filer¨Non-accelerated filerýýSmaller reporting company ¨Emerging Growth CompanyIf an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying withany new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No ýThe aggregate market value, as of June 30, 2018, of common shares of the registrant held by non-affiliates of the registrant was approximately $200.7million, based upon the last sales price reported that date on The Nasdaq Global Select Market of $9.70 per share. (Aggregate market value is estimated solelyfor the purposes of this report and shall not be construed as an admission for the purposes of determining affiliate status.)Common shares of the registrant outstanding at March 11, 2019 were 23,080,564.Documents Incorporated by ReferencePart III: Portions of Registrant’s Proxy Statement relating to the Company’s 2019 Annual Meeting of Shareholders. PRGX GLOBAL, INC.FORM 10-KDecember 31, 2018INDEX Page No.Part I Item 1. Business1Item 1A. Risk Factors8Item 1B. Unresolved Staff Comments16Item 2. Properties16Item 3. Legal Proceedings16Item 4. Mine Safety Disclosures16 Part II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities17Item 6. Selected Financial Data19Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations21Item 7A. Quantitative and Qualitative Disclosures About Market Risk36Item 8. Financial Statements and Supplementary Data37Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure77Item 9A. Controls and Procedures77Item 9B. Other Information80Part III Item 10. Directors, Executive Officers and Corporate Governance81Item 11. Executive Compensation81Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stock Matters81Item 13. Certain Relationships and Related Transactions, and Director Independence82Item 14. Principal Accountant Fees and Services82Part IV Item 15. Financial Statement Schedules, Exhibits83Item 16. Form 10-K Summary89Signatures90Cautionary Statement Regarding Forward-Looking StatementsThe following discussion includes “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995. Theseforward-looking statements are at times identified by words such as “plans,” “intends,” “expects,” or “anticipates” and words of similar effect and includestatements regarding the Company’s financial and operating plans and goals. These forward-looking statements include any statements that cannot beassessed until the occurrence of a future event or events. Except as otherwise indicated or unless the context otherwise requires, “PRGX,” “we,” “us,” “our”and the “Company” refer to PRGX Global, Inc. and its subsidiaries.These forward-looking statements are subject to risks, uncertainties and other factors, including but not limited to those discussed herein and belowunder Item 1A “Risk Factors.” Many of these risks are outside of our control and could cause actual results to differ materially from the results discussed inthe forward-looking statements. Factors that could lead to material changes in our performance may include, but are not limited to:•our ability to successfully execute our recovery audit growth strategy;•our continued dependence on our largest clients for significant revenue;•the use of internal recovery audit groups by our clients, reducing the amount of recoveries available to us;•commoditization of our services and the effects of rate reductions;•the significant control that our clients have over assertion or acceptance of recovery audit claims against their suppliers and thecorresponding impact on our revenue;•revenue that does not meet expectations or justify costs incurred;•our ability to develop material sources of new revenue in addition to revenue from our core accounts payable recovery audit services;•changes in the market for our services;•client and vendor bankruptcies and financial difficulties;•our ability to retain and attract qualified personnel and effectively manage our global workforce;•our ability to protect and maintain the competitive advantage of our proprietary technology and intellectual property rights;•our reliance on operations outside the U.S. for a significant portion of our revenue;•our ability to effectively manage foreign currency fluctuations;•the highly competitive environments in which our recovery audit services and Adjacent Services businesses operate and the resultingpricing pressure on those businesses;•our ability to integrate recent and future acquisitions;•our ability to realize operational cost savings and the transformation severance and related expenses we may incur to generate thesesavings;•uncertainty in the global credit markets;•our ability to maintain compliance with the financial and non-financial covenants in our financing arrangements;•changes to Medicare and Medicaid recovery audit contractor (“RAC”) programs administered by the Centers for Medicare and MedicaidServices (“CMS”) and other government agencies, and our role in the national Medicare RAC program, the results of operations of whichare reported in our discontinued operations;•our tax positions and other factors, including the enactment of the Tax Cuts and Jobs Act in December 2017, that could affect our effectiveincome tax rate or our ability to use our existing deferred tax assets;•our ability to operate in compliance with changing data privacy requirements;•our ability to comply with a variety of foreign laws and regulations, such as those relating to data protection and employment, as well asU.S. laws affecting operations outside of the United States;•a cyber-security incident involving the misappropriation, loss or unauthorized disclosure or use of client data or other confidentialinformation of our clients;•effects of changes in accounting policies, standards, guidelines or principles;•terrorist acts, acts of war and other factors over which we have little or no control;•our ability to effectively develop, maintain, operate and improve our proprietary technology platforms and applications; ori•uncertainties and effects of the implementation of the United Kingdom's referendum to withdraw membership from the European Union(referred to as "Brexit"), including financial, legal, trade and tax implications.iAny forward-looking statement speaks only as of the date on which such statement is made, and, except as required by law, we undertake no obligationto update any forward-looking statement to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence ofunanticipated events. New factors emerge from time to time and it is not possible for management to predict all such factors.iiPART IITEM 1. BusinessPRGX Global, Inc., together with its subsidiaries, is a global leader in recovery audit and spend analytics services, providing a suite of services targetedat our clients' Source-to-Pay ("S2P") business processes. Our services include recovery audit, spend analytics and supplier information management ("SIM")services. We are based in the United States of America (“U.S.”) and serve clients in more than 30 countries. PRGX Global, Inc. was incorporated in the State ofGeorgia in 1996. At the heart of our client services portfolio is the core capability of mining client data to deliver “actionable insights.” Actionable insightsallow our clients to improve their financial performance by reducing costs, improving business processes and managing risks.The vast majority of our revenue comes from recovery audit, a business service based on the mining of a tremendous amount of our clients’ purchasing-related data, looking for overpayments made to their third-party suppliers. PRGX is one of the world's leading providers of accounts payable recovery auditservices principally to large businesses and government agencies with high volumes of transactions and complex pricing arrangements with vendors. Weprovide services to 80% of the top 15 global retailers and over 25% of the top 50 companies in the Fortune 500. We earn the largest portion of our revenuefrom our retail clients. Recovery audit in the retail industry is a mature service offering and we have been serving a number of our clients for decades. Pricingof merchandise for resale in the retail industry is extremely complex due to the high volume of promotions, allowances and rebates provided by suppliers.The second largest portion of our business is referred to within the recovery audit business as “commercial.” Commercial recovery auditing is the delivery ofrecovery audit services to industries other than retail, such as telecommunications, automotive and industrial manufacturing, resources, financial services,and transportation. Recovery audit in the industries represented within commercial is typically less complex in terms of vendor pricing structure, scope ofpurchase transactions made available for audit and depth of audit programs within individual companies. Another type of recovery audit is called “contractcompliance” auditing, a specific type of recovery auditing that is more heavily utilized by commercial clients and continues to be a growing part of ourbusiness. This service offering focuses on auditing complex supplier billings against large services, construction and licensing contracts, and is relevant to alarge portion of our client base. We continue to innovate through technological advances, including new recovery audit claim types, accelerating the auditprocess by moving closer to the original transaction, enhancements to our proprietary technology audit tools and expanded service offerings, includingspend visibility, analytics and SIM services. These services target client functional and process areas where we have established expertise, enabling us toprovide services to finance, merchandising and procurement executives to improve working capital, optimize purchasing leverage in vendor pricingnegotiations, improve insight into product margin and cost of goods for resale, identify and manage risks associated with vendor compliance, improvequality of vendor master data and improve visibility and diagnostics of direct and indirect spend. These service offerings are increasingly important to ourbusiness and are applicable to clients in both retail and commercial industries.PRGX is unique in that we are a global recovery audit services provider, serving clients in over 30 countries across a multitude of industries. Weconduct our operations through three reportable segments: Recovery Audit Services - Americas, Recovery Audit Services - Europe/Asia-Pacific and AdjacentServices. The Recovery Audit Services - Americas segment represents recovery audit services we provide in the U.S., Canada and Latin America and is ourlargest segment in terms of clients served and revenue generated. The Recovery Audit Services - Europe/Asia-Pacific segment represents recovery auditservices we provide in Europe, Asia and the Pacific region and is responsible for a significant portion of our revenue. The Adjacent Services segment includesadvisory, analytics and SIM services, as well as our PRGX OPTIX® suite of analytics tools, provided to our clients in any country. We report the unallocatedportion of corporate selling, general and administrative expenses not specifically attributable to the three reportable segments in Corporate Support. Foradditional financial information relating to our reporting segments, see Note 2 - Operating Segments and Related Information of our Consolidated FinancialStatements included in Item 8 of this Form 10-K.In October 2016, we announced that we had entered into agreements to acquire Cost & Compliance Associates, LLC and Cost & Cost ComplianceAssociates Limited (together, “C&CA"), a commercial recovery audit and contract compliance firm with operations in the U.S. and the UK and Lavante, Inc.(“Lavante”), a Software-as-a-Service ("SaaS")-based SIM and recovery audit services firm based in San Jose, California. The Lavante acquisition closed inOctober 2016 and the C&CA acquisition closed in February 2017.As of December 31, 2015, the Company discontinued its Healthcare Claims Recovery Audit ("HCRA") business. In connection with the discontinuationof that business, the Company entered into agreements with third parties to fulfill its Medicare recovery audit contractor ("RAC") program subcontractobligations to audit Medicare payments and provide support for claims appeals, and assigned its remaining Medicaid contract to another party. One of thethird-party Medicare RAC-related contracts has been settled and the results are reflected in these financial statements. The Company will continue to incurcertain expenses until the remaining Medicare RAC contracts are concluded.1The Recovery Audit Industry and PRGXMany businesses and government agencies generate substantial volumes of payment transactions involving multiple vendors, numerous discounts andallowances, fluctuating prices and complex pricing arrangements or rate structures. Although these entities correctly process the vast majority of paymenttransactions, errors occur in a small percentage of transactions. These errors include, but are not limited to, missed or inaccurate discounts, allowances andrebates, vendor pricing errors, erroneous coding and duplicate payments. Many factors contribute to the errors, including communication failures between thepurchasing and accounts payable departments, complex pricing arrangements or rate structures, personnel turnover and changes in information andaccounting systems. Recovery auditing is a business service focused on finding overpayments created by these errors. These audits are either accountspayable audits or contract compliance audits and entail comprehensive and customized data acquisition from the client, frequently including purchasing,receiving, point-of-sale, pricing and deal documentation, emails, and payment data.PRGX, like most companies in the recovery audit services industry, generates the majority of its revenue through contingent fee arrangements, sharing apre-determined percentage of successful claims or “recoveries” generated from an audit. There are certain recovery audit services or types of audits that arebilled as a fixed fee or on a time and materials basis, but the vast majority of our revenue is generated through contingent fee contracts.Recovery audit clients generally recover claims by either (a) taking credits against outstanding payables or future purchases from the involved vendorsor service providers, or (b) receiving refund checks directly from those vendors or service providers. Industry practice generally dictates the manner in whicha client receives the benefit for a recovery audit claim. In many cases, we must satisfy client-specific procedural guidelines before we can submit recoveryaudit claims for client approval.Contracts with recovery audit clients generally vary in length from one year to three years, with some being evergreen. Most of our recovery auditcontracts provide that the client may terminate the contract without cause prior to the completion of the term of the agreement by providing relatively shortprior written notice of termination.As businesses have evolved, PRGX and the recovery audit industry have evolved with them, innovating processes, error identification tools, and claimtypes to maximize recoveries. The following are a number of factors impacting recovery auditing:•Supply Chain System Proliferation & Data Complexity. Businesses increasingly are using many different forms of proprietary and third-partytechnology to manage complex procurement and accounts payable systems in an effort to realize greater operating efficiencies. Many businesses worldwidecommunicate with vendors electronically, including the use of email, Electronic Data Interchange (“EDI”) and the Internet or third-party platforms toexchange inventory and sales data, transmit purchase orders, submit invoices, forward shipping and receiving information and remit payments. Though thecomplexity of capturing the data has increased significantly, these systems capture more detailed data, which should further inform transactional reviews byrecovery auditors.•Globalization & Global Supply Chain Complexity. As the operations of business enterprises become increasingly multi-national, they often seekservice providers with a global reach. Sophistication in systems and processes varies markedly across the global network of suppliers which further drives theneed for our services. Companies are sourcing from all parts of the world, at times with minimal understanding of the associated risks. Companies havecreated vast networks of potential transaction partners that will continue to create complexity and risk throughout the supply chain. PRGX serves clients inmore than 30 countries and we believe we are the recovery audit service provider best suited to deliver multi-national audits.•Increased Role of Email Documentation in Client Transaction Data. Clients and vendors increasingly document transaction terms in emailcorrespondence that is not integrated into their financial or merchant deal systems, which increases opportunities for errors. To efficiently identify theseerrors, recovery audit firms must use sophisticated technology-based tools that are able to ingest and search through massive volumes of emails to identifypotential errors that then are investigated by the auditors. A comprehensive recovery audit requires the effective use of technology-based email search toolsand techniques.•Increasing Claim Categories and Accelerating Audits. Traditionally, the focus of a recovery audit was on a simple, or “disbursement,” claim type,such as the duplicate payment of invoices. Enhancements to accounts payable software, particularly large enterprise software solutions used by many largecompanies, have reduced the extent to which companies make simple disbursement errors. However, the introduction of creative vendor discount programs,complex pricing arrangements and activity-based incentives has led to an increase in auditable transactions and potential sources of error. These transactionsare complicated to audit, as the underlying transaction data is difficult to access and recognizing mistakes can be complex. Recovery audit firms such asPRGX with significant industry-specific expertise and sophisticated technology are best equipped to audit these complicated claim categories. Historicallythese claims were audited months and in some cases years after the original transaction. PRGX is working to bring the timing of auditing closer to the originaltransaction. Audit acceleration has multiple benefits, including reduced vendor abrasion for clients, and greater accuracy of claims.2•Significant Promotional Activity. Trade promotion spending is substantial within the retail trade and significant sums are being spent in categorieswith numerous transactions and a high potential for errors, such as scan downs, or discounts at the point of sale. Because of the high volume of tradepromotion within retail, there are significant opportunities for mistakes and, therefore, auditable claims.•Technology Platform. The ability to efficiently and cost effectively ingest large volumes of structured and unstructured data is critical to providingbest in class recovery audit services. We believe we have developed the most sophisticated and highest performing large data processing infrastructuresystem in our industry. This system allows us to effectively process and manage our clients’ data in large scale volumes and at superior speeds. We continueto accelerate our data processing speeds for both structured and unstructured data sets, which supports our efforts to accelerate audit results and transform ourcore audit processes.We expect the evolution of the recovery audit industry to continue. In particular, we expect that the industry will continue to move towards theelectronic capture and presentation of data, more automated, centralized processing and auditing closer to the time of the payment transaction.Adjacent ServicesOur Adjacent Services business, targets client functional and process areas where we have established expertise, enabling us to provide advisory andSaaS solution services to our clients' finance, merchandising and procurement functions to improve working capital, reduce supplier discrepancies, optimizepurchasing leverage in vendor pricing negotiations, improve insight into product margin and cost of goods for resale. We also help clients identify andmanage risks associated with vendor compliance, improve quality of clients' vendor master data and improve visibility and diagnostics of clients' direct andindirect spend. Our Adjacent Services include our global PRGX OPTIX analytics suite and our SIM and deduction management solutions. As our clients’supplier base, data volumes and complexity levels continue to grow, we are using our deep data management experience to develop new actionable insightsolutions, compliance-related tools, analytics solutions and data transformation services. Taken together, our deep understanding of our clients’ S2P data andour Adjacent Services solutions provide multiple routes to help our clients achieve greater profitability.ClientsPRGX provides its services principally to large businesses and government agencies having a tremendous volume of payment transactions and complexprocurement environments. Retailers continue to constitute the largest part of our client and revenue base. Our five largest clients contributed to our revenuefrom continuing operations by approximately 35.4% in 2018, 36.6% in 2017 and 37.3% in 2016. We have one client, The Kroger Co., that accounted forapproximately 12% of our revenue from continuing operations in 2018 and 2017, and 11% of our revenue from continuing operations in 2016.Some organizations (primarily large retailers) maintain internal recovery audit departments to recover certain types of payment errors and identifyopportunities to reduce costs. Despite having such internal resources, many companies also retain independent recovery audit firms, such as PRGX, due totheir specialized knowledge, capabilities and focused technologies. In the U.S., Canada, the United Kingdom, France, Mexico, Brazil, and Australia, largeretailers routinely engage independent recovery audit firms as a standard business practice. It is typical in the retail industry for large firms to engage aprimary audit firm at one contingency fee rate and a secondary firm to audit behind the primary at a higher rate. Our commercial recovery audit clients aretypically Fortune 1000 companies in industries other than retail and with multi-billion dollars of purchase transactions to be audited. These clients rangefrom large multi-national manufacturing and resource companies, to large regional or national telecommunications and financial services institutions toglobal high-tech software organizations. The audit specialty practice of contract compliance is a specific type of recovery auditing which is more heavilyutilized by commercial clients and is expected to be a growing part of our business. This service offering focuses on auditing complex supplier billingsagainst large services, construction and licensing contracts, and is relevant to a large portion of our client base.3The PRGX StrategyPRGX is a global leader in recovery audit and spend analytics services. We provide recovery audit and other S2P services, including, spend analyticsand SIM services. We principally offer these services to large businesses and government agencies having a tremendous volume of payment transactions andcomplex procurement environments. We plan to achieve revenue growth and higher profitability through the following strategy:1.Grow and improve our core recovery audit business;2.Differentiate our service offerings and capabilities;3.Create adjacent service offerings, including SaaS solutions; and4.Expand into new high potential industries and geographies.Grow and improve our core recovery audit businessWe continue to be the industry leader by introducing innovative concepts and audit processes. In addition, we are deploying global best practices androlling out world class enhancements to our proprietary technology audit tools to drive deeper recoveries and enable next generation audit concepts. Weexpect to achieve our objectives through process redesign coupled with investing in our technology infrastructure and aggressively rolling out newtechnologies across our global audits.Differentiate our service offerings and capabilitiesWe plan to differentiate our service offerings and capabilities through enhancing our current services and implementing innovations such as:•Audit acceleration. Our clients are constantly seeking to accelerate the audit process to deliver audit results closer to the time of the transaction toincrease recovery yields, provide a greater opportunity to address process errors, and reduce supplier abrasion. We believe that our deep and broadbusiness process experience across thousands of audits, together with our enhanced and new technology initiatives will put us in a unique positionto achieve superior results for our clients.•Global audit best practice programs. Our global programs take advantage of our operations that span over 30 countries to provide true global auditcapabilities to multi-national companies. We believe this unique perspective gives our clients visibility to their business practice variations aroundthe world and creates value for our clients by allowing them to see their data in new ways.Create adjacent and high value service offeringsWe will continue to focus on new service offerings that complement our existing services and provide increased value to our customers.Our Adjacent Services offerings, including PRGX OPTIX and SIM services, target client functional and process areas where we have establishedexpertise, enabling us to provide services to support our clients' finance, merchandising and procurement functions. These services can be project-based(advisory services), which are typically billed on a rates and hours basis, or subscription-based (typically SaaS offerings), which are billed on a monthly basis.The Adjacent Services offerings assist our clients in improving many aspects of their businesses, including working capital, optimization of purchasingleverage in vendor pricing negotiations, improved insight into product margin and cost of goods for resale, identification and management of risks associatedwith vendor compliance, improved quality of vendor master data and improved visibility and diagnostics of direct and indirect spend.Expand into new high potential industries and geographiesOur plans include continuing to build our commercial recovery audit practice, which serves industries outside of retail in order to reduce our industryconcentration. We have organized the commercial recovery audit practice into industry verticals such as resources, telecommunications, financial servicesand manufacturing, and are building focused practice areas with targeted service offerings for each industry.4TechnologyThe PRGX software platform focuses on three core areas - audit, supplier collaboration and S2P analytics. This platform includes advanced andproprietary solutions, systems and processes. The platform incorporates a large-scale technology infrastructure to support our broad range of audit andadvisory services and our client facing SaaS-based solutions.Foundational to this platform is our ability to efficiently and cost effectively ingest, prepare, and transform large volumes of structured and unstructureddata. We believe we have developed the most sophisticated and highest performing large data processing infrastructure system in the recovery audit industry.This system is critical to providing best-in-class recovery audit and S2P analytics services. This system utilizes queue-driven data pipelines and in-memoryprocessing to manage our clients' data in large scale volumes at superior speeds. We are continuing to accelerate data processing speeds for both structuredand unstructured data sets. This allows us to support our efforts to accelerate audit results, deliver pre-event and pre-payment audit capabilities, and transformour core audit processes.We believe that our proprietary technology and processes serve as important competitive advantages over both our principal competitors and ourclients’ internal recovery audit functions. To sustain these competitive advantages, we continually invest in technology initiatives to deliver innovativesolutions that improve both the effectiveness and efficiency of our services.We design our data acquisition, data processing and data management solutions to maximize efficiencies and productivity - all while maintaining thehighest standards of transaction auditing and spend analytics accuracy. Further, we uphold highly reliable security standards utilizing the most sophisticatedand effective tools to protect all data under our control. At the beginning of a typical recovery audit or spend analytics engagement, we use a dedicated staffof data acquisition specialists and proprietary tools to acquire a wide array of transaction data from the client for the time period under review. We typicallyreceive this data by secured electronic transmissions, digital media or paper documents. For paper documents, we use a robust imaging technology to scan thepaper into electronic format. Upon receipt of the data we secure, catalog, back-up and convert it into standard readable formats using third-party andproprietary audit technology.Our technology professionals clean and map massive volumes of structured and unstructured client data into standardized layouts and formats, andgenerate statistical reports to verify the completeness and accuracy of the data. We utilize high performance database and storage technologies to maintainthe data at one of our secure data processing facilities.We then process the data using proprietary algorithms (business rules) leveraging our experience to help uncover patterns or potential issues in ourclients’ various transactional streams. We deliver this processed data to our auditors who, using our proprietary audit software, sort, filter and search the datato validate and identify actual transaction errors. We maintain a secure database of audit information with the ability to query on multiple variables,including claim categories, industry codes, vendors and audit years. This allows us to identify additional recovery opportunities and providerecommendations for process improvements to our clients.Once we identify and validate transaction errors, we present the information to our clients for approval and submission to vendors as “claims.” We offera proprietary web-based claim presentation and collaboration solution to help our clients view, approve, and submit claims to vendors.As part of our Adjacent Services, we offer both the PRGX OPTIX suite of analytics tools and our SIM and deduction management solutions. The PRGXOPTIX suite facilitates S2P business decisions through actionable, data-enabled insights that are delivered through three primary modules - Product,Payment, and Spend Analytics. Each of these modules is powered by the core PRGX OPTIX platform that provides the ability to process and visualize S2Pdata delivered via a SaaS solution. In providing our analytics services, we use proprietary algorithms and technologies to clean and classify a client’s vendorspend data down to the line item level. We then present this information to the client as a multi-dimensional data cube over a web-based interface. Webelieve these proprietary algorithms and technologies provide us with a competitive advantage over many of our competitors.The PRGX deduction management solution is a powerful SaaS solution providing transaction data visibility, buyer/supplier communication andcollaboration, and transaction issue remediation. SIM is designed to enable supplier master data harmonization, on-boarding, compliance with regulatory andclient specified standards and requirements, as well as an enterprise level view of supplier performance.5CompetitionAccounts Payable Recovery Audit ServicesWe believe that the principal providers of domestic and international accounts payable recovery audit services in major markets worldwide consist ofPRGX, two substantial competitors, and numerous other smaller competitors. The smaller recovery audit firms generally do not possess multi-country servicecapabilities and advanced technology infrastructure necessary to support our clients' large and complex purchasing and accounts payable operations. Inaddition, many of these firms have limited resources and may lack the experience and knowledge of national promotions, seasonal allowances and currentrecovery audit practices. As a result, we believe that compared to most other firms providing accounts payable recovery audit services, PRGX has competitiveadvantages based on its domestic and international presence, well-trained and experienced professionals, and advanced technology.While we believe that PRGX has the greatest depth and breadth of audit expertise, data and technology capabilities, scale and global presence in theindustry, we face competition from the following:Client Internal Recovery Audit Departments. A number of large retailers (particularly those in the discount, grocery and drug store sectors) havedeveloped an internal recovery audit process to review transactions prior to turning them over to external recovery audit firms. The scale and scope of theseclient internal organizations varies by client based on their level of in-house expertise and investment in required tools and technologies. Regardless of thelevel of recoveries made by internal recovery audit departments, virtually all large retail clients retain at least one (primary), and frequently two (primary andsecondary), external recovery audit firms to capture errors not identified by their internal recovery audit departments.Other Accounts Payable Recovery Audit Firms. The competitive landscape in the recovery audit industry is comprised of:•Full-service accounts payable recovery audit firms. We believe that only two companies other than PRGX offer a full suite of U.S. and internationalrecovery audit services;•A large number of smaller accounts payable recovery audit firms which have a limited client base and which use less sophisticated tools to minedisbursement claim categories at low contingency rates. These firms are most common in the U.S. and UK markets. Competition in mostinternational markets, if any, typically comes from small niche providers;•Firms, including one of our two substantial competitors, that offer a hybrid of audit software tools and training for use by internal audit departments,or general accounts payable process improvement enablers; and•Firms with specialized skills focused on recovery audit services for discrete sectors such as sales and use tax, telecom, freight or real estate.Other Providers of Recovery Audit Services. The major international accounting firms provide recovery audit services; however, we believe theirpractices tend to be primarily focused on tax-related services.Adjacent ServicesOur Adjacent Services business faces competition from global and regional consulting firms; well-known ERP software vendors; procurement-specificsoftware and SaaS providers and smaller, very specialized analytics providers. These competitors generally compete on the basis of the breadth of services,market reputations and integration with other services. We believe that we differentiate ourselves from our competitors through our in-depth knowledge ofour clients’ data, systems, and purchasing processes, along with advanced and specialized technology tools.Hiring, Training and Compensation of PersonnelMany of our auditors and other professionals formerly held finance-related management positions in the industries we serve. Training primarily isprovided in the field by our experienced professionals enabling newly hired personnel to develop and refine their skills and improve productivity. We alsouse various other training materials such as process manuals and documented policies and procedures to supplement the field training provided by ourexperienced professionals. We periodically upgrade our training programs based on feedback from auditors and changing industry protocols. Many of ourprofessionals participate in one of our incentive compensation plans that link their compensation to the financial performance of their service offering(s).6Proprietary RightsFrom time to time, we develop new software and methodologies that replace or enhance existing proprietary software and methodologies. We relyprimarily on trade secret and copyright protection for our proprietary software and other proprietary information. We capitalize the costs incurred for thedevelopment of computer software that will be sold, leased, or otherwise marketed or that will be used in our operations beginning when technologicalfeasibility has been established. We consider the costs associated with developing or replacing methodologies to be development costs.We own or have rights to various trademarks, trade names and copyrights, including U.S. and foreign registered trademarks and trade names and U.S.registered copyrights, that are valuable assets and important to our business. We monitor the status of our copyright and trademark registrations to maintainthem in force and renew them as appropriate. The duration of our active trademark registrations varies based upon the relevant statutes in the applicablejurisdiction, but generally endure for as long as they are used. The duration of our active copyright registrations similarly varies based on the relevant statutesin the applicable jurisdiction, but generally endure for the full statutory period. Our trademarks and trade names are of significant importance and include,but are not limited to, the following: PRGX®, Thrive in the Data™, Discover Your Hidden Profits®, Profit Discovery™, Lavante®, Lavante SIM™, PRGXOPTIX®, PRGX MailTrax™, PRGX APTrax™, PRGX AuditTrax™, PRGX ClaimTrax™, PRGX SpendTrax™, GET™, and imDex™.RegulationVarious aspects of our business, including, without limitation, our data flows and our data acquisition, processing and reporting protocols, are subject toextensive and frequently changing governmental regulation in the U.S. and the numerous other countries around the world where we operate. Theseregulations include extensive data protection and privacy requirements. In the U.S., we are subject to the provisions of the Health Insurance Portability andAccountability Act of 1996 (“HIPAA”) with respect to information regarding our employees, as well as our discontinued HCRA business. Internationally, wemust comply with the European data protection requirements including the General Data Protection Regulation ("GDPR"), which went into effect in May2018, as well as with data protection laws that exist in many of the other countries where we serve clients. Failure to comply with such regulations may,depending on the nature of the noncompliance, result in the termination or loss of contracts, the imposition of contractual damages, civil sanctions, anddamage to our reputation or in certain circumstances, criminal penalties.EmployeesAs of December 31, 2018, PRGX had approximately 1,600 employees, of whom approximately 600 were in the U.S. The majority of our employees areinvolved in our recovery audit business.WebsitePRGX makes available free of charge on its website, www.prgx.com, its annual report on Form 10-K, quarterly reports on Form 10-Q, current reports onForm 8-K and all amendments to those reports. PRGX makes all filings with the Securities and Exchange Commission ("SEC") available on its website nolater than the close of business on the date the filing was made. In addition, investors can access our filings with the Securities and Exchange Commission atwww.sec.gov.We also post certain corporate governance materials, including our Board of Directors committee charters and our Code of Conduct and Code of EthicsFor Senior Financial Officers, on our website under the heading “Corporate Governance” on the “Investors” page. From time to time, we may update thecorporate governance materials on our website as necessary to comply with rules issued by the SEC or NASDAQ, or as desirable to further the continuedeffective and efficient governance of our Company.7ITEM 1A. Risk FactorsWe must successfully execute our growth strategy in order to increase our revenue, and must control our costs in order to maintain profitability.Over time, our clients tend to resolve recurring transaction processing deficiencies. In addition, many of our clients have an internal staff that audits thetransactions before we do. As the skills, experience and resources of our clients' internal recovery audit staffs improve, they will identify many overpaymentsthemselves and reduce some of our audit recovery opportunities. In addition, our revenues are potentially impacted by competitive rate pressures, ourdependency on clients to approve our claims on a timely basis, changes in audit scope by our clients and occasional loss of clients or movement from primaryto secondary position. We must continually innovate new audit concepts, improve audit execution, develop new clients and successfully execute our owngrowth strategy in order to increase our revenue and avoid losses in our business.We depend on our largest clients for significant revenue, so losing a major client could adversely affect our revenue and liquidity.We generate a significant portion of our revenue from our largest clients. Our five largest clients collectively accounted for 35.4% of our revenue fromcontinuing operations in 2018, 36.6% of our revenue from continuing operations in 2017 and 37.3% of our revenue from continuing operations in 2016. Wehave one client, The Kroger Co., that accounted for approximately 12% of our revenue from continuing operations in 2018 and 2017, and 11% of ourrevenue from continuing operations in 2016. If we lose any of our major clients, our results of operations and liquidity could be materially and adverselyaffected.Although we continually seek to diversify our client base, we may be unable to offset the effects of an adverse change in one of our key clientrelationships. For example, if our existing clients elect not to renew their contracts with us at the expiration of the current terms of those contracts, or reducethe services they purchase thereunder, our recurring revenue base will be reduced, which could have a material adverse effect on our business, financialposition, results of operations, and cash flows. In addition, we could lose clients if: (i) they cancel their agreements with us; (ii) we fail to win a competitivebid at the time of contract renewal; (iii) the financial condition of any of our clients deteriorates; or (iv) our clients are acquired by, or acquire, companieswith which we do not have contracts. Any of these could materially and adversely affect our business, financial position, results of operations, and cash flows.Our strategy may not be successful.As discussed in Item 1 “The PRGX Strategy,” our objectives are to achieve revenue growth and higher profitability by growing and improving our corerecovery audit business, differentiating our service offerings and capabilities, creating adjacent service offerings (including SaaS solutions) and expandinginto new high potential industries and geographies. These efforts are ongoing, and the results of our efforts will not be known until sometime in the future.Successful execution of our strategy requires sustained management focus, innovation, organization and coordination over time, as well as success inbuilding relationships with third parties. If we are unable to execute our strategy successfully, our business, financial position, results of operations and cashflows could be adversely affected. In addition, execution of our strategy will require material investments and additional costs that may not yield incrementalrevenue and improved financial performance as planned.Our acquisitions, investments, partnerships and strategic alliances may require significant resources and/or result in significant unanticipated losses, costsor liabilities.Acquisitions have contributed and are expected to continue to contribute to our revenue. Although we cannot predict our rate of growth as the result ofacquisitions with complete accuracy, we believe that additional acquisitions, investments and strategic alliances will be important to our growth strategy.We may finance future acquisitions by issuing additional equity and/or debt. The issuance of additional equity in connection with any such transactioncould be substantially dilutive to existing shareholders. The issuance of additional debt could increase our leverage substantially. In addition, announcementor implementation of future transactions by us or others could have a material effect on the price of our common stock. We could face financial risksassociated with incurring significant debt. Additional debt may reduce our liquidity, curtail our access to financing markets, impact our standing with creditagencies and increase the cash flow required for debt service. Any incremental debt incurred to finance an acquisition could also place significant constraintson the operation of our business.Furthermore, any future acquisitions of businesses or facilities could entail a number of additional risks, including:•problems with effective integration of acquired operations;•the inability to maintain key pre-acquisition business relationships;•increased operating costs;•the diversion of our management team from our other operations;8•problems with regulatory agencies;•exposure to unanticipated liabilities;•difficulties in realizing projected efficiencies, synergies and cost savings; and•changes in our credit rating and financing costs.The terms of our credit facility place restrictions on us, which create risks of default and reduce our flexibility.Our current credit facility contains a number of affirmative, negative, and financial covenants that may limit our ability to take certain actions andrequire us to comply with specified financial ratios and other performance covenants. No assurance can be provided that we will not violate the covenants ofour secured credit facility in the future. If we are unable to comply with our financial covenants in the future, our lenders could pursue their contractualremedies under the credit facility, including requiring the immediate repayment in full of all amounts outstanding, if any. Additionally, we cannot be certainthat, if the lenders demanded immediate repayment of any amounts outstanding, we would be able to secure adequate or timely replacement financing onacceptable terms or at all.Our ability to make payments due on debt we may have outstanding will depend upon our future operating performance, which is subject to generaleconomic and competitive conditions and to financial, business and other factors, many of which we cannot control. If the cash flow from our operatingactivities is insufficient to make these payments, we may take actions such as delaying or reducing capital expenditures, attempting to restructure orrefinance our debt, selling assets or operations or seeking additional equity capital. Some or all of these actions may not be sufficient to allow us to serviceour debt obligations and we could be required to file for bankruptcy. Further, we may be unable to take any of these actions on satisfactory terms, in a timelymanner or at all. In addition, our credit agreements may limit our ability to take several of these actions. Our failure to generate sufficient funds to pay ourdebts or to undertake any of these actions successfully could materially and adversely affect our business, financial position, results of operations and cashflows.Uncertainty about the future of the London Interbank Offer Rate (LIBOR) may adversely affect our business and financial results.LIBOR is the subject of recent national, international and other regulatory guidance and proposals for reform. These reforms and other pressures maycause LIBOR to disappear entirely or to perform differently than in the past. The consequences of these developments cannot be predicted, but couldadversely affect the cost of our variable rate indebtedness.We have incurred and will continue to incur significant costs in connection with our discontinued HCRA services business.As of December 31, 2015, the Company discontinued its Healthcare Claims Recovery Audit ("HCRA") business. In connection with the discontinuationof that business, the Company entered into agreements with third parties to fulfill its Medicare recovery audit contractor ("RAC") program subcontractobligations to audit Medicare payments and provide support for claims appeals, and assigned its remaining Medicaid contract to another party. One of thethird-party Medicare RAC-related contracts has been settled and the results are reflected in these financial statements. The Company will continue to incurcertain expenses until the remaining Medicare RAC contracts are concluded.We may be unable to protect and maintain the competitive advantage of our proprietary technology and intellectual property rights.Our operations could be materially and adversely affected if we are not able to protect our proprietary software, audit techniques and methodologies,and other proprietary intellectual property rights. We generally rely on a combination of trade secret and copyright laws, nondisclosure and other contractualarrangements and technical measures to protect our proprietary rights. Although we presently hold U.S. registered copyrights on certain of our proprietarytechnology and certain U.S. and foreign registered trademarks, we may be unable to obtain similar protection on our other intellectual property. In addition,our foreign registered trademarks may not receive the same enforcement protection as our U.S. registered trademarks.Additionally, to protect our confidential and trade secret information, we generally enter into nondisclosure agreements with our employees,consultants, clients and potential clients. We also limit access to, and distribution of, our proprietary information. Nevertheless, we may be unable to determisappropriation or unauthorized dissemination of our proprietary information, detect unauthorized use and take appropriate steps to enforce our intellectualproperty rights. In spite of the level of care taken to protect our intellectual property, there is no guarantee that our sensitive proprietary information will notbe improperly accessed or that our competitors will not independently develop technologies that are substantially equivalent or superior to our technology.We could be subjected to claims of intellectual property infringement.Although we are not aware of any infringement of our services and products on the intellectual property rights of others, the potential for intellectualproperty infringement claims continually increases as the universe of intellectual property continues to rapidly expand, and we are subject to the risk thatsomeone else will assert a claim against us for violating their9intellectual property rights. Any claim for intellectual property infringement, even if not meritorious, could be expensive to defend. If we were held liable forinfringing third-party intellectual property rights, we could incur substantial damage awards, and potentially be required to cease using the technology,produce non-infringing technology or obtain a license to use such technology. Such potential liabilities or increased costs could be material to us.Cyber-security incidents, including data security breaches or computer viruses, could harm our business by disrupting our delivery of services, damagingour reputation or exposing us to liability.We receive, process, store and transmit, often electronically, the confidential data of our clients and others. Unauthorized access to our computersystems or stored data could result in the theft or improper disclosure of confidential information, the deletion or modification of records or could causeinterruptions in our operations. These cyber-security risks increase when we transmit information from one location to another, including transmissions overthe Internet or other electronic networks. Despite implemented security measures, our facilities, systems and procedures, and those of our third-party serviceproviders, may be vulnerable to security breaches, acts of vandalism, software viruses, misplaced or lost data, programming and/or human errors or othersimilar events which may disrupt our delivery of services or expose the confidential information of our clients and others. Any security breach involving themisappropriation, loss or other unauthorized disclosure or use of confidential information of our clients or others, whether by us or a third-party, could (i)subject us to civil and criminal penalties, (ii) have a negative impact on our reputation, (iii) expose us to liability to our clients, third parties or governmentauthorities, (iv) cause our present and potential clients to choose another service provider, and (v) cause us to incur significant remediation costs. Any ofthese developments could have a material adverse effect on our business, results of operations, financial position, and cash flows.Our ability to deliver our SaaS solutions is dependent on the development and maintenance of the infrastructure of the Internet by third parties.The infrastructure of the Internet consists of multiple fragmented networks. Multiple third-party organizations run this infrastructure together under thegovernance of the Internet Corporation for Assigned Numbers and Names (ICANN) and the Internet Assigned Numbers Authority under the stewardship ofICANN. The Internet has experienced outages and other delays resulting from damage to portions of infrastructure, denial-of-service attacks or related cyberincidents, and the Internet could face outages and delays in the future. These outages and delays could reduce the level of Internet usage or result infragmentation of the Internet, resulting in multiple separate networks lacking interconnection. These scenarios are outside of our control and could impair thedelivery of our SaaS solutions to our clients. Resulting interruptions in our SaaS solutions or the ability of our clients to access our SaaS solutions couldresult in a loss of potential or existing clients and harm our business.Our software and SaaS solutions may not be error-free and could result in claims of breach of contract and liabilities.Our software and SaaS solutions are very complex and may not be error-free, especially when first released. Although we perform extensive testing, thefailure of any solution to operate in accordance with its specifications, documentation or applicable license agreement could require us to correct thedeficiency. If such deficiency cannot be corrected in accordance with the relevant contract for services, the deficiency could constitute a material breach ofthe contract allowing for the contract’s termination and possibly subjecting us to liability. Also, we sometimes indemnify our clients against third-partyinfringement claims and certain other losses. If such claims for indemnification are made, even if they are without merit, they could be expensive to resolve. Asignificant judgment against us could have a material adverse impact on us.Operational failures in our data processing facilities could harm our business and reputation.An interruption of our SaaS hosting facilities or other data processing services, including an interruption caused by damage or destruction ofcommunication lines or physical facilities or a failure of data processing equipment, could result in a loss of clients, difficulties in obtaining new clients anda reduction in revenue. In addition, we also may be liable to third parties or our clients because of such interruption. These risks would increase with longerservice interruptions. Despite any disaster recovery and business continuity plans and precautions we have implemented (including insurance) to protectagainst the effects of service delivery interruptions, such interruptions could result in a material adverse effect on our business, results of operations, financialposition, and cash flows.Our investment of substantial capital in information technology systems, and a failure to successfully implement such systems could adversely affect ourbusiness.We have invested and continue to invest substantial amounts in the development and implementation of information technology systems. Althoughinvestments are carefully planned, there can be no assurance that such systems will justify the related investments. If we fail to realize the benefits expectedfrom our information technology system investments, or if we fail to do so within the envisioned time frame, it could have an adverse effect on our results ofoperations, financial position, and cash flows.10Client and vendor bankruptcies and financial difficulties could reduce our earnings.Our clients generally operate in intensely competitive environments and, accordingly, bankruptcy filings by our clients are not uncommon. Bankruptcyfilings by our large clients or the significant vendors who supply them or unexpectedly large vendor claim chargebacks lodged against one or more of ourlarger clients could have a materially adverse effect on our financial condition, results of operations, and cash flows. Similarly, our inability to collect ouraccounts receivable due to other financial difficulties of one or more of our large clients could adversely affect our financial position, results of operations,and cash flows.Economic conditions which adversely impact our clients and their vendors in the retail industry in the United Kingdom and Europe may continue tohave a negative impact on our revenue. Specifically, client liquidity and the liquidity of client vendors can have a significant impact on claim production,the claim approval process, and the ability of clients to offset or otherwise make recoveries from their vendors.If a client files for bankruptcy, we could be subject to an action to recover certain payments received in the 90 days prior to the bankruptcy filingknown as “preference payments.” If we are unsuccessful in defending against such claims, we would be required to make unbudgeted cash payments whichcould strain our financial liquidity, and our earnings would be reduced.Our failure to retain the services of key members of our management team and highly skilled personnel could adversely impact our operations andfinancial performance.Our future success depends largely on the efforts and skills of our management team, including our executive officers and other key employees. As such,we have entered into employment agreements with key members of our management team. While these employment agreements include limits on the abilityof key employees to directly compete with us in the future, nothing prevents them from leaving our Company. We also do not maintain “key person” lifeinsurance policies on any of our executive officers or other key employees. Thus, we may have to incur costs to replace such employees if we were to losetheir services, and our ability to execute our business strategy could be impaired if we are unable to replace such employees in a timely manner.In addition, it is especially challenging to attract and retain highly qualified skilled auditors and other professionals in an industry where competitionfor skilled personnel is intense. Accordingly, our future performance also depends, in part, on the ability of our management team to work togethereffectively, manage our workforce, and retain highly qualified personnel.We rely on operations outside the U.S. for a significant portion of our revenue and are increasingly dependent on operations outside the U.S. forsupporting our operations globally.Operations outside the U.S. generated 41.5% of our annual revenue from continuing operations in 2018, 42.2% in 2017 and 42.6% in 2016. Theseinternational operations are subject to numerous risks, including:•greater exposure to the possibility of economic instability, the disruption of operations from labor and political disturbances, expropriationor war in the international markets we serve;•difficulties in staffing and managing foreign operations and in collecting accounts receivable;•fluctuations in currency exchange rates, particularly weaknesses in the British pound, the euro, the Canadian dollar, the Mexican peso, theBrazilian real, the Australian dollar, the Indian rupee and other currencies of countries in which we transact business, which could result incurrency translations that materially reduce our revenue and earnings;•costs associated with adapting our services to our foreign clients’ needs;•unexpected changes in regulatory requirements and laws;•expenses and legal restrictions associated with transferring earnings from our foreign subsidiaries to us;•difficulties in complying with a variety of foreign laws and regulations, such as those relating to data protection and employment, as well asU.S. laws affecting operations outside of the United States;•business interruptions due to widespread disease, actual or potential terrorist activities, or other catastrophes;•reduced or limited protection of our intellectual property rights;•longer accounts receivable cycles; and•competition with large or state-owned enterprises or regulations that effectively limit our operations and favor local competitors.Because we expect a significant portion of our revenue to continue to come from operations outside the U.S., and expect to continue transitioningcertain of our operations to locations outside the U.S., the occurrence of any of these events could materially and adversely affect our business, financialposition, results of operations, and cash flows.11In 2018, our European operations accounted for 22.2% of our consolidated revenue from continuing operations. There have been continuing concernsand uncertainties regarding the stability of certain European economies. A continued decline in the economic conditions in Europe may materially andadversely affect our operations both in Europe and on a consolidated basis.Furthermore, certain of our core data processing and other functions are located outside the U.S., including India, where approximately 20% of ouremployees were located on December 31, 2018. While our operations in India have been key to serving clients more efficiently and cost-effectively under ourimproved service delivery model, India has from time to time experienced instances of civil unrest and hostilities with neighboring countries. Geopoliticalconflicts, military activity, terrorist attacks, or other political uncertainties in the future could adversely affect the Indian economy by disruptingcommunications and making business operations and travel more difficult, which may have a material adverse effect on our ability to deliver services fromIndia. Disruption of our Indian operations could materially and adversely affect our profitability and our ability to execute our growth strategy.The uncertainty surrounding the implementation and effect of the UK exiting the European Union, and related negative developments in the EuropeanUnion could adversely affect our business, results of operations or financial condition.The results of a June 2016 referendum vote in the UK were in favor of the UK exiting the European Union (commonly referred to as “Brexit”). On March29, 2017, the UK notified the European Union of its intention to withdraw pursuant to Article 50 of the Lisbon Treaty. As a result of this notification, acomplex and uncertain process of negotiation is now taking place to determine the future terms of the UK’s relationship with the European Union, with theUK currently due to exit the European Union on March 29, 2019. The uncertainty leading up to and following the Brexit referendum has had, and theimplementation of Brexit may continue to have, a negative impact on our business and demand for our products in Europe, and particularly in the UK. Thelong-term nature of the UK’s relationship with the European Union is unclear and there is considerable uncertainty when, or if, any withdrawal agreement orlong-term relationship strategy, including trade deals, will be agreed to and implemented by the UK and the European Union. Brexit could adversely affectEuropean or worldwide political, regulatory, economic or market conditions and could contribute to instability in political institutions and regulatoryagencies. Brexit could also have the effect of disrupting the free movement of goods, services, and people between the UK, the European Union andelsewhere. In addition, Brexit has had a detrimental effect, and could have further detrimental effects, on the value of either or both of the euro and the Britishpound sterling, which could negatively impact our business (principally from the translation of sales and earnings in those foreign currencies into ourreporting currency).Our business operates in highly competitive environments and is subject to pricing pressure.The environments in which our business operates are highly competitive, with numerous other recovery audit firms and other service providers. Inaddition, many of our recovery audit clients have developed their own internal recovery audit capabilities. As a result of competition among the providers ofthese services and the availability of certain recovery audit services from clients’ internal audit departments, our business is subject to intense rate pressure.Our Adjacent Services business also has numerous competitors varying in size, market strength and specialization, many of whom have established and well-known franchises and brands. Intense price competition faced by all of our service lines could negatively impact our profit margins and have a potentialadverse effect on our business, financial position, results of operations, and cash flows.Our client contracts generally contain provisions under which the client may terminate our services prior to the completion of the agreement.Many of our client contracts provide that the client may terminate the contract without cause prior to the end of the term of the agreement by providingus with relatively short prior written notice of the termination. As a result, the existence of contractual relationships with our clients is not an assurance thatwe will continue to provide services for our clients through the entire term of their respective agreements. If clients representing a significant portion of ourrevenue terminated their agreements unexpectedly, we may not, in the short-term, be able to replace the revenue and income from such contracts and thiswould have a material adverse effect on our business, financial condition, results of operations and cash flows. In addition, client contract terminations alsocould harm our reputation within the industry which could negatively impact our ability to obtain new clients.Our charges to earnings resulting from acquisition, restructuring and integration costs may materially adversely affect the market value of our commonstock.We account for the completion of our acquisitions using the purchase method of accounting. We allocate the total estimated purchase prices to nettangible assets, amortizable intangible assets and indefinite-lived intangible assets, and based on their fair values as of the date of completion of theacquisitions, record the excess of the purchase price over those fair values as goodwill. Our financial results, including earnings per share, could be adverselyaffected by a number of financial adjustments required in purchase accounting including the following:12•we will incur additional amortization expense over the estimated useful lives of certain of the intangible assets acquired in connection withacquisitions during such estimated useful lives;•we will incur additional depreciation expense as a result of recording purchased tangible assets; and•to the extent the value of goodwill or intangible assets becomes impaired, we may be required to incur material charges relating to theimpairment of those assets.Our failure to comply with applicable governmental privacy laws and regulations in the U.S. and internationally could substantially impact our business,operations, financial position, and cash flows. Additionally, compliance with the laws and regulations relating to the handing of personal data mayimpede our ability to provide services in certain jurisdictions and may result in increased costs.We are subject to extensive and evolving federal, state and foreign privacy laws and regulations. Changes in privacy laws or regulations or newinterpretations of existing laws or regulations could have a substantial effect on our business, financial condition and results of operations. Failure to complywith such regulations could result in the termination or loss of contracts, the imposition of contractual damages, civil sanctions, damage to the Company’sreputation, or in certain circumstances, criminal penalties, any of which could have a material adverse effect on our results of operations, financial position,cash flows, business and prospects. Determining compliance with such regulations is complicated by the fact that the interpretations of these laws andregulations by governing regulatory authorities and the courts evolve over time, and many of the provisions of such laws and regulations are open to a widerange of interpretations. There can be no assurance that we are or have been in compliance with all applicable existing laws and regulations or that we will beable to comply with new laws or regulations.With respect to trans-border data flows from the European Economic Area, or EEA, we are certified under the U.S.-European Union Privacy ShieldFramework, as agreed to by the U.S. Department of Commerce and the European Union (“EU”), as a means to legally transfer European personal informationfrom Europe to the United States; however, it is possible that the U.S.-European Union Privacy Shield Framework may be challenged in EU courts and there issome uncertainty regarding its future validity and our ability to rely on it for EU to U.S. data transfers. In addition, despite our Privacy Shield certificationand extensive efforts to maintain the privacy, integrity and controlled use of confidential information, including personally identifiable information, througha combination of hardware, software, and physical security, coupled with strong internal data security processes, procedures and controls that we believe meetor exceed relevant laws, regulations and industry best practices, we may experience hesitancy, reluctance, or refusal by European or multi-national clients touse our services due to the potential risk exposure they may face as a result of their data being transferred outside of the European Union.Further, in 2016, the EU adopted a new law governing data protection practices and privacy called the General Data Protection Regulation(“GDPR”), which became effective in May 2018. GDPR is a redesign of the European Data Protection Directive 95/46/EC and is intended to boost the onlineand offline privacy rights of individuals. GDPR places more stringent operational requirements on processors and controllers of personal data, including, forexample, expanded disclosures about how personal information is to be used, limitations on retention of information, increased requirements to correct orerase an individual’s information upon request, mandatory data breach notification requirements and higher standards for data controllers to demonstrate thatthey have obtained valid consent for certain data processing activities. The GDPR also significantly increases penalties for non-compliance.Laws are also increasingly aimed at the use of personal information for marketing purposes, such as the EU’s e-Privacy Directive, and the country-specific regulations that implement that directive. Such laws and regulations are also subject to new and differing interpretations and may be inconsistentamong jurisdictions.The EU’s e-Privacy Directive, the EU-U.S. Privacy Shield Framework, the GDPR and other regulations could reduce demand for our services or restrictour ability to store and process data or, in some cases, impact our ability to offer our services in certain locations or our customers' ability to deploy oursolutions globally. Failure to provide adequate privacy protections and maintain compliance with the new data privacy laws, including the EU-U.S. PrivacyShield framework and the GDPR, could have a material adverse effect on our financial condition and results of operations.Federal tax reform in the United States could adversely affect our business and financial condition.On December 22, 2017, the Tax Cuts and Jobs Act (the “Tax Act”) was enacted in the United States. The Tax Act includes a number of provisions,including the lowering of the U.S. corporate tax rate from 35% to 21%, the elimination of U.S. tax on foreign earnings (subject to certain exceptions), one-time taxation of offshore earnings at reduced rates regardless of whether they are repatriated, limitation of the tax deduction for interest expense, immediatedeductions for certain new investments instead of deductions for depreciation expense over time, and modifying or repealing many business deductions andcredits. Given our U.S. valuation allowance, the Act does not materially impact our income tax provision or balance sheet, however further tax changes orreform could materially adversely impact our business, financial condition and results of operations.13Certain ownership changes may limit our ability to use our net operating losses.We have substantial tax loss and credit carry-forwards for U.S. federal income tax purposes. On December 30, 2016, the Company experienced anownership change as defined under Section 382 of the Internal Revenue Code (“IRC”). This ownership change resulted in an annual IRC Section 382limitation that limits the use of certain tax attribute carry-forwards and also resulted in the write-off of certain deferred tax assets and the related valuationallowances that the Company recorded in 2017. The Company performed an assessment and determined that $87.3 million of the gross federal net operatinglosses and $62.9 million of gross state net operating losses outstanding as of December 30, 2016 were available for use going forward. The Company utilized$6.4 million of these federal losses on the 2017 U.S. federal tax return and the remaining $80.9 million remain available for use. Of the $62.9 million of grossstate net operating losses as of December 30, 2016, $61.8 million are still available as of the filings of the 2017 state tax returns. If a future ownership changeoccurs and limits our ability to use our historical net operating loss carryforwards, it could have a material adverse impact on our business, financial positionand results of operations by increasing our future tax obligations.Certain of our tax positions may be subject to challenge by the Internal Revenue Service and other tax authorities, and if successful, these challenges couldincrease our future tax liabilities and expense.For U.S. federal income tax purposes, as well as local country tax purposes in the jurisdictions where we operate, from time to time we take positionsunder provisions of applicable tax law that are subject to varying interpretations. Certain of our tax positions may be subject to challenge by the applicabletaxing authorities, including, in the U.S., the Internal Revenue Service. If our tax positions are successfully challenged, our future tax liabilities and expensecould significantly increase.While we believe that our tax positions are proper based on applicable law and we believe that it is more likely than not that we would prevail withrespect to challenges to these positions, we can make no assurances that we would prevail if our positions are challenged or that business economics wouldjustify the mounting of a legal defense against such challenges. If our tax positions are successfully challenged by the U.S. or non-U.S. taxing authorities, itcould increase our future tax liabilities and expense and have a material adverse impact on our financial position, results of operations and cash flows.We may have exposure to additional income tax liabilities or additional costs if the U.S. government changes certain U.S. tax rules or other tax lawsapplicable to U.S. corporations doing business in foreign jurisdictions.We are a U.S. corporation that conducts business both in the U.S. and in foreign jurisdictions. From time to time, proposals for changes to tax and otherlaws are made that may negatively impact U.S. corporations doing business in foreign jurisdictions, including proposals for tax reform. While the scope offuture changes remains unclear, proposed changes might include limiting the ability of U.S. corporations to deduct certain expenses attributable to offshoreearnings, modifying the foreign tax credit rules and taxing currently certain transfers of intangible assets offshore or imposing other economic disincentivesto doing business outside of the U.S. The enactment of some or all of these proposals could increase the Company’s effective tax rate or otherwise adverselyaffect our profitability.Future impairment of goodwill, other intangible assets and long-lived assets would reduce our future earnings.As of December 31, 2018, the Company’s goodwill and other intangible assets totaled $32.5 million. We must perform periodic assessments todetermine whether some portion, or all, of our goodwill, intangible assets and other long-lived assets are impaired. Our most recent assessment showed noimpairment to our goodwill, intangible assets and other long-lived assets, but future impairment testing could result in a determination that our goodwill,other intangible assets or our other long-lived assets have been impaired. Future adverse changes in the business environment or in our ability to performaudits successfully and compete effectively in our markets or the discontinuation of our use of certain of our intangible or other long-lived assets could resultin impairment which could materially adversely impact future earnings.Our articles of incorporation, bylaws and Georgia law may inhibit a change of control that shareholders may favor.Our articles of incorporation, bylaws and Georgia law contain provisions that may delay, deter or inhibit a future acquisition of PRGX that is notapproved by our Board of Directors. This could occur even if our shareholders receive attractive offers for their shares or if a substantial number, or even amajority, of our shareholders believe the takeover is in their best interest. These provisions are intended to encourage any person interested in acquiring us tonegotiate with and obtain the approval of our Board of Directors in connection with the transaction. Provisions that could delay, deter or inhibit a futureacquisition include the following:•a classified Board of Directors;•the requirement that our shareholders may only remove directors for cause;•specified requirements for calling special meetings of shareholders;•the ability of the Board of Directors to consider the interests of various constituencies, including our employees, clients and creditors andthe local community, in making decisions; and14•the ability of the Board of Directors to issue shares of preferred stock with such designations, powers, preferences and rights as it determines,without any further vote or action by our shareholders.15Our stock price has been and may continue to be volatile.Our common stock is currently traded on The Nasdaq Global Select Market. The trading price of our common stock has been and may continue to besubject to large fluctuations. For example, for the year ended December 31, 2018, our stock traded as high as $10.30 per share and as low as $6.95 per share.Our stock price may increase or decrease in response to a number of events and factors, including:•future announcements concerning us, key clients or competitors;•variations in operating results and liquidity;•changes in financial estimates and recommendations by securities analysts;•developments with respect to technology or litigation;•changes in applicable laws and regulations;•the operating and stock price performance of other companies that investors may deem comparable to ourCompany;•acquisitions and financings; and•sales and purchases of our stock by insiders.Fluctuations in the stock market, generally, also impact the volatility of our stock price. Finally, general economic conditions and stock marketmovements may adversely affect the price of our common stock, regardless of our operating performance.ITEM 1B. Unresolved Staff CommentsNone.ITEM 2. PropertiesOur principal executive offices are located in Atlanta, Georgia and occupy approximately 58,000 square feet of office space. The term of our leaseexpires December 31, 2021. This space is used by our Recovery Audit Services - Americas and Adjacent Services segments and is the primary location of ourCorporate Support personnel. Our various operating units lease numerous other parcels of operating space elsewhere in the U.S. and in the various othercountries in which we currently conduct our business.The majority of our real property leases are individually less than five years in duration. See Contractual Obligations and Other Commitments in“Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in Part II, Item 7 of this Form 10-K and Note 6 of “Notesto Consolidated Financial Statements” included in Part II, Item 8 of this Form 10-K for a discussion of costs we may incur in the future to the extent we (i)reduce our office space capacity or (ii) commit to, or occupy, new properties in the locations in which we operate.ITEM 3. Legal ProceedingsWe are party to a variety of legal proceedings arising in the normal course of business. While the results of these proceedings cannot be predicted withcertainty, management believes that the final outcome of these proceedings will not have a material adverse effect on our financial position, results ofoperations or cash flows.ITEM 4. Mine Safety DisclosuresNot applicable.16PART IIITEM 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity SecuritiesOur common stock is traded under the symbol “PRGX” on The Nasdaq Global Select Market (Nasdaq). The Company has not paid cash dividends onits common stock since it became a public company in 1996 and does not intend to pay cash dividends in the foreseeable future. Moreover, restrictivecovenants included in our secured credit facility specifically prohibit payment of cash dividends. As of February 28, 2019, there were 101 holders of recordof our common stock and management believes there are approximately 2,429 beneficial holders of our common stock.Issuer Purchases of Equity SecuritiesThe following table sets forth information regarding the purchases of the Company’s equity securities made by or on behalf of the Company or anyaffiliated purchaser (as defined in Exchange Act Rule 10b-18) during the three months ended December 31, 2018.2018 Total Numberof SharesPurchased (a) Average PricePaid per Share Total Number ofShares Purchasedas Part of PubliclyAnnounced Plansor Programs (b) Maximum ApproximateDollar Value of Sharesthat May Yet BePurchased Under thePlans or Programs (millions of dollars)October 1 - October 31 693 $8.66 — $—November 1 - November 30 236,314 $9.20 236,314 $—December 1 - December 31 203,972 $9.24 203,972 $— 440,979 $9.22 440,286 $26.4(a) Shares purchased during the quarter include shares surrendered by employees to satisfy tax withholding obligations upon vesting of restrictedstock and shares from the Company's stock repurchase program.(b) On February 21, 2014, our Board of Directors authorized a stock repurchase program under which we could repurchase up to $10.0 million of ourcommon stock from time to time through March 31, 2015. Since 2014, the original authorization of the stock repurchase program, the Board ofDirectors has modified the program from time to time to increase the repurchase limit to $75 million and extend the expiration date to December 31,2019. The timing and amount of repurchases, if any, will depend upon the Company's stock price, economic and market conditions, regulatoryrequirements, and other corporate considerations. The Company may initiate, suspend or discontinue purchases under the stock repurchase programat any time.17Performance GraphSet forth below is a line graph presentation comparing the cumulative shareholder return on our common stock, on an indexed basis, againstcumulative total returns of The Nasdaq Composite Index and the RDG Technology Composite Index. The graph assumes that the value of the investment inthe common stock in each index was $100 on December 31, 2013 and shows total return on investment for the period beginning December 31, 2013 throughDecember 31, 2018, assuming reinvestment of any dividends. Notwithstanding anything to the contrary set forth in any of the Company’s filings under theSecurities Act of 1933 or the Securities Exchange Act of 1934 that might incorporate future filings, including this Annual Report on Form 10-K, in whole orin part, the Performance Graph presented below shall not be incorporated by reference into any such filings.Cumulative Total Return 12/13 12/14 12/15 12/16 12/17 12/18PRGX Global, Inc. 100.00 85.12 55.36 87.80 105.65 140.92NASDAQ Composite 100.00 114.62 122.81 133.19 172.11 165.84RDG Technology Composite 100.00 117.81 122.23 138.28 189.14 190.1318ITEM 6. Selected Financial DataThe following table sets forth selected financial data from continuing operations for the Company as of and for each of the five years in the periodended December 31, 2018. The following data reflects the business acquisitions that we have completed through December 31, 2018. We have included theresults of operations for these acquired businesses in our results of operations since the date of their acquisitions. We have derived this historical consolidatedfinancial data from our Consolidated Financial Statements and Notes thereto, which have been audited by our Independent Registered Public AccountingFirm. The Consolidated Balance Sheets as of December 31, 2018 and 2017, and the related Consolidated Statements of Operations, Comprehensive Income,Shareholders’ Equity and Cash Flows for each of the years in the three-year period ended December 31, 2018 and the report of the Independent RegisteredPublic Accounting Firm thereon are included in Item 8 of this Form 10-K.The data presented below should be read in conjunction with the Consolidated Financial Statements and Notes thereto included elsewhere in this Form10-K and other financial information appearing elsewhere in this Form 10-K, including “Management’s Discussion and Analysis of Financial Condition andResults of Operations.” Certain reclassifications have been made to the prior periods to conform to the current period presentation. Years Ended December 31, (1) 2018 2017 2016 2015 2014 (In thousands, except per share data)Revenue, net of refund liabilities $171,776 $161,620 $140,844 $138,302 $161,552Operating expenses: Cost of revenue 104,825 102,052 91,299 93,169 110,890Selling, general and administrative expenses 50,456 46,941 39,399 32,284 38,581Depreciation of property, equipment andsoftware assets 7,370 4,569 5,033 5,317 6,025Amortization of intangible assets 3,395 3,634 1,832 2,458 3,531Acquisition-related adjustments (income) loss (1,628) (2,283) — — —Total operating expenses 164,418 154,913 137,563 133,228 159,027Operating income from continuing operations 7,358 6,707 3,281 5,074 2,525Foreign currency transaction (gains) losses on short-term intercompany balances 1,002 (2,190) 84 2,165 2,003Interest expense (income), net 1,663 1,539 (153) (190) (77)Other (income) loss 21 (160) (121) 1,191 57Net income from continuing operationsbefore income tax 4,672 7,518 3,471 1,908 542Income tax expense (2) 1,321 2,962 1,242 369 3,241Net income (loss) from continuingoperations $3,351 $4,556 $2,229 $1,539 $(2,699)Basic earnings (loss) per common share $0.14 $0.21 $0.10 $0.06 $(0.09)Diluted earnings (loss) per common share $0.14 $0.21 $0.10 $0.06 $(0.09)19 December 31, 2018 2017 2016 2015 2014Balance Sheet Data (consolidated): (3) (In thousands)Cash and cash equivalents $13,973 $18,823 $15,723 $15,122 $25,735Working capital 28,872 24,070 16,706 21,641 36,006Total assets 124,829 120,218 93,474 80,391 102,782Long-term debt, excluding current installments 21,553 13,526 — — —Total shareholders' equity $66,329 $60,314 $52,390 $52,415 $70,986(1)Data for 2014 has been restated in order to reflect only continuing operations.(2)The taxes recorded for 2014 were primarily related to the recording of a valuation allowance on the future use of net losses in our UK operations. See Note 1 (i) and Note 7of “Notes to Consolidated Financial Statements” included in Item 8 of this Form 10-K.(3)Data in this table reflects the balance sheet amounts for both continuing and discontinued operations.20ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsIntroductionPRGX Global, Inc. is a global leader in recovery audit and spend analytics, providing a suite of services targeted at our clients' Source-to-Pay ("S2P")business processes. At the heart of our services suite is the core capability of mining client data to deliver "actionable insights." Actionable insights allow ourclients to improve their cash flow and profitability by reducing costs, improving business processes and managing risks.In addition to recovery audit and spend analytics, we offer advisory and supplier information management ("SIM") services. We deliver services tohundreds of clients and serve clients in more than 30 countries. We conduct our operations through three reportable segments: Recovery Audit Services -Americas, Recovery Audit Services - Europe/Asia-Pacific and Adjacent Services. The Recovery Audit Services - Americas segment represents recovery auditservices we provide in the U.S., Canada and Latin America. The Recovery Audit Services - Europe/Asia-Pacific segment represents recovery audit services weprovide in Europe, Asia and the Pacific region. The Adjacent Services segment includes advisory, analytics and SIM services, as well as our PRGX OPTIXsuite of analytics tools. We include the unallocated portion of corporate selling, general and administrative expenses not specifically attributable to the threereportable segments in Corporate Support.Recovery auditing is a business service focused on finding overpayments created by errors in payment transactions, such as missed or inaccuratediscounts, allowances and rebates, vendor pricing errors, erroneous coding and duplicate payments. Recovery audit services are part of the broader S2Pservices market space, focused on the payment side of the S2P market.Generally, we earn our recovery audit revenue on a contingent fee basis by identifying overpayments made by our clients, assisting our clients inrecovering the overpayments from their vendors, and collecting a specified percentage of the recoveries from our clients as our fee. The fee percentage weearn is based on specific contracts with our clients that generally also specify: (a) time periods covered by the audit; (b) the nature and extent of services weare to provide; and (c) the client’s responsibilities to assist and cooperate with us. Clients generally recover claims by either taking credits againstoutstanding payables or future purchases from the relevant vendors, or receiving refund checks directly from those vendors. The manner in which a claim isrecovered by a client is often dictated by industry practice. In addition, many clients establish client-specific procedural guidelines that we must satisfy priorto submitting claims for client approval. Our recovery audit business also includes contract compliance services which focus on auditing complex supplierbillings against large services, construction and licensing contracts, and is relevant to a large portion of our client base. Such services include verification ofthe accuracy of third-party reporting, appropriateness of allocations and other charges in cost or revenue sharing types of arrangements, adherence to contractcovenants and other risk mitigation requirements and numerous other reviews and procedures to assist our clients with proper monitoring and enforcement ofthe obligations of their contractors. Services in our Adjacent Services segment can be project-based (advisory services), which are typically billed on a ratesand hours basis, or subscription-based (typically SaaS offerings), which are billed on a monthly basis.We earn the vast majority of our recovery audit revenue from clients in the retail industry due to many factors, including the high volume oftransactions and the complicated pricing and allowance programs typical in this industry. Changes in consumer spending associated with economicfluctuations generally impact our recovery audit revenue to a lesser degree than they affect individual retailers due to several factors, including:•Diverse client base - our clients include a diverse mix of discounters, grocery, pharmacy, department and other stores that tend to be impacted tovarying degrees by general economic fluctuations, and even in opposite directions from each other depending on their position in the marketand their market segment;•Motivation - when our clients experience a downturn, they frequently are more motivated to use our services to recover prior overpayments tomake up for relatively weaker financial performance in their own business operations;•Nature of claims - the relationship between the dollar amount of recovery audit claims identified and client purchases is non-linear. Claimvolumes are generally impacted by purchase volumes, but a number of other factors may have an even more significant impact on claimvolumes, including new items being purchased, changes in discount, rebate, marketing allowance and similar programs offered by vendors andchanges in a client’s or a vendor’s information processing systems; and•Timing - the client purchase data on which we perform our recovery audit services is historical data that typically reflects transactions betweenour clients and their vendors that took place 3 to 15 months prior to the data being provided to us for audit. As a result, we generally experiencea delayed impact from economic changes that varies by client and the impact may be positive or negative depending on the individual clients’circumstances.21We have processes in place to mitigate the financial impact arising from fluctuations in our businesses. These processes include reviewing andmonitoring financial and operational results through our internal reporting, devoting substantial efforts to develop an improved service delivery model toenable us to more cost effectively serve our clients, and maintaining the flexibility to control the compensation-related portions of our cost structure.While the net impact of the economic environment on our recovery audit revenue is difficult to determine or predict, we believe that for the foreseeablefuture, our revenue will remain at a level that will allow us to continue investing in our growth strategy. Included in our growth strategy are our investmentsin developing and enhancing our technology platforms and improved operational processes within our recovery audit business. In addition, we continue topursue the expansion of our business beyond retail recovery audit services by growing the portion of our business that provides recovery audit services toenterprises other than retailers; growing our contract compliance service offerings; expanding into new industry verticals, such as telecommunications,manufacturing and resources; and growing our Adjacent Services which includes our global PRGX OPTIX analytics solutions and our SIM services offering.We believe that our recovery audit business uniquely positions us to create value for clients and gives us a competitive advantage over other players in thebroader S2P market for four fundamental reasons:•We already have the clients' spend data - we serve a large and impressive list of very large, multinational companies in our core recovery auditbusiness, which requires access to and processing of these clients' detailed S2P data on a daily, weekly or at least periodic basis;•We know the clients' spend data and underlying processes - the work we do in recovery audit requires that we fully understand our clients’systems, buying practices, receiving and payment procedures, as well as their suppliers’ contracting, performance and billing practices;•We take a different perspective in analyzing the clients' spend data - we look horizontally across our clients' processes and organizationalstructures versus vertically, which is how most companies are organized and enterprise resource planning systems are designed; and•Our contingent fee recovery audit value proposition minimizes our clients' cost of entry and truly aligns us with our clients.As our clients’ data volumes and complexity levels continue to grow, we are using our deep data management experience to develop new actionableinsight solutions, as well as to develop custom analytics and data transformation services. Taken together, our deep understanding of our clients’ S2P dataand our technology-based solutions provide multiple routes to help our clients achieve greater profitability. Our Adjacent Services business targets clientfunctional and process areas where we have established expertise, enabling us to provide services to finance, merchandising and procurement executives toimprove working capital, reduce supplier discrepancies, optimize purchasing leverage in vendor pricing negotiations, improve insight into product marginand true cost of goods for resale, identify and manage risks associated with vendor compliance, improve quality of vendor master data and improve visibilityand diagnostics of direct and indirect spend.Looking ahead, we expect to continue the evolution of our business from its historical auditor-led recovery audit operation, to today’s data-driven,technology-led recovery audit, SIM and analytics solutions, to tomorrow’s next generation payment assurance solutions, which will provide access tosoftware and enable services closer in time to or contemporaneous with the transaction. We believe this evolution will allow us to provide incremental valueto our clients and ultimately transform our business from one primarily focused on post-transaction analysis, error identification and recovery, to one with itsmajor emphasis on error prevention and S2P process efficiency.We believe that for the foreseeable future, our revenue will remain at a level that will allow us to continue investing in our growth strategy, includingdeveloping and enhancing our technology platforms and improved operational processes within our recovery audit business. We have processes in place tomitigate the financial impact arising from fluctuations in our businesses. These processes include reviewing and monitoring financial and operational resultsthrough our internal reporting, devoting substantial efforts to develop an improved service delivery model to enable us to more cost effectively serve ourclients, and maintaining the flexibility to control the compensation-related portions of our cost structure.We expect to continue our information technology and product development efforts to improve our services and solutions. In 2018, we increased oursales force to accelerate our acquisition of new clients and the cross-sale of solutions within our existing client base. We expect to continue investing in salesand marketing and will continue to assess the success and effectiveness of our sales and marketing efforts and the optimal level of sales and marketinginvestment for future periods. We also expect to add headcount in product development, data services, advisory services and recovery audit to support newservices and client contracts. We believe that our investments in next generation recovery audit technology will further increase the operating leverage in ourrecovery audit platform in future years. 22Business AcquisitionsIn the first quarter of 2017, we completed the acquisition of substantially all of the assets of Cost & Compliance Associates, LLC and Cost &Compliance Associates Limited (collectively, "C&CA"), a commercial recovery audit and contract compliance firm with operations in the U.S. and the UK.We have included the results of C&CA from the date of acquisition through December 31, 2018 in our Condensed Consolidated Statement of Operations andin the Results of Operations from Continuing Operations discussion.Discontinued OperationsAs of December 31, 2015, the Company discontinued its HCRA business. In connection with the discontinuation of that business, the Company enteredinto agreements with third parties to fulfill its Medicare RAC program subcontract obligations to audit Medicare payments and provide support for claimsappeals and assigned its remaining Medicaid contract to another party. One of the third-party Medicare RAC-related contracts has been settled and the resultsare reflected in these financial statements. The Company will continue to incur certain expenses until the remaining Medicare RAC contracts andrelationships are concluded.Results from Continuing OperationsThe discussions and financial results in this Item 7 reflect our continuing operations.The following table sets forth the percentage of revenue represented by certain items in our Consolidated Statements of Operations for the periodsindicated: Years Ended December 31, 2018 2017 2016Revenue, net of refund liabilities 100.0 % 100.0 % 100.0 %Operating expenses: Cost of revenue 61.0 63.1 64.8Selling, general and administrative expenses 29.4 29.0 28.0Depreciation of property, equipment and software assets 4.3 2.8 3.6Amortization of intangible assets 2.0 2.3 1.3Acquisition-related adjustments (income) loss (0.9) (1.4) —Total operating expenses 95.8 95.8 97.7Operating income from continuing operations 4.2 4.2 2.3 Foreign currency transaction losses (gains) on short-term intercompany balances 0.6 (1.3) 0.1Interest expense (income), net 1.0 1.0 (0.1)Other (income) loss — (0.1) (0.1)Net income from continuing operations before income tax 2.6 4.6 2.4 Income tax expense 0.8 1.8 0.9 Net income from continuing operations 1.8 % 2.8 % 1.5 %Year Ended December 31, 2018 Compared to Prior Years from Continuing OperationsRevenue, net of refund liabilities. Revenue, net of refund liabilities was as follows (in thousands): 23 Years Ended December 31, 2018 2017 2016Recovery Audit Services – Americas $115,920 $113,122 $99,861Recovery Audit Services – Europe/Asia-Pacific 49,526 44,372 37,335Adjacent Services 6,330 4,126 3,648Total $171,776 $161,620 $140,844Consolidated revenue from continuing operations increased by $10.2 million, or 6.3%, in 2018 compared to 2017, and increased by $20.8 million, or14.8%, in 2017 compared to 2016. On an organic basis (excluding C&CA and, for the first three quarters of 2017, Lavante), our revenue increased 6.0% in2017 compared to 2016. Our 2018 consolidated year-over-year growth was led by our global retail and commercial recovery audit operations. Weexperienced some changes in our reported revenue based on the strength of the U.S. dollar relative to foreign currencies. On a constant dollar basis, adjustedfor changes in foreign exchange ("FX") rates, consolidated revenue increased 6.5% in 2018 compared to 2017 and increased 14.1% in 2017 compared to2016. On a constant dollar basis, we organically grew our revenue 5.5% in 2017 compared to 2016. Below is a discussion of our revenue for our threereportable segments.Recovery Audit Services - Americas revenue increased $2.8 million, or 2.5%, in 2018 compared to 2017 and increased $13.3 million, or 13.3%, in 2017compared to 2016. On an organic basis, our revenue increased by 4.6% in 2017 compared to 2016. The 2018 year-over-year growth was led by our retailrecovery audit business. Changes in the value of the U.S. dollar relative to currencies in Canada and Latin America negatively impacted reported revenue in2018 and positively impacted reported revenue in 2017. On a constant dollar basis, adjusted for changes in FX rates, 2018 revenue increased 2.8% comparedto 2017 and increased 12.9% compared to 2016. On a constant dollar basis, we organically grew our revenue by 4.3% in 2017 compared to 2016. The growthin our Recovery Audit Services - Americas revenue in 2018 and 2017 was due to a number of factors including stronger claims conversion, theimplementation of acceleration and maturity model programs, increased staffing at certain audits, and enhancements to our proprietary audit technologies.This growth was partially offset by continued rate pressures.Recovery Audit Services - Europe/Asia-Pacific revenue increased $5.2 million, or 11.6%, in 2018 compared to 2017 and increased $7.0 million, or18.8%, in 2017 compared to 2016. On an organic basis, revenue in this segment increased by 10.4% in 2017 compared to 2016. The year-over-year revenuegrowth in 2018 and 2017 was led by our business in Europe. Changes in the value of the U.S. dollar relative to currencies in Europe, Asia, and the Pacificnegatively impacted reported revenue in 2018 and positively impacted reported revenue in 2017. On a constant dollar basis, adjusted for changes in FX rates,2018 revenue increased by 11.7% compared to 2017 and 2017 revenue increased by 17.5% compared to 2016. On a constant dollar basis, Recovery AuditServices - Europe/Asia-Pacific organic revenue increased 9.2% in 2017 compared to 2016.Adjacent Services revenue increased by $2.2 million, or 53.4%, in 2018 compared to 2017 and increased $0.5 million, or 13.1%, in 2017 compared to2016. The 2018 year-over-year growth in revenue was both in advisory services and SaaS subscriptions. The increase in revenue in 2017 compared to 2016was due to new advisory work and the launch of the Lavante SIM-based Deduction Management contract announced in the fourth quarter of 2017.Cost of Revenue (“COR”). COR consists principally of commissions and other forms of variable compensation we pay to our auditors based primarilyon the level of overpayment recoveries and/or profit margins derived therefrom, fixed auditor salaries, compensation paid to various types of hourly supportstaff and salaries for operational and client service managers for our recovery audit services and our Adjacent Services businesses. COR also includes otherdirect and indirect costs incurred by these personnel, including office rent, travel and entertainment, telephone, utilities, maintenance and supplies andclerical assistance. A significant number of the components comprising COR are variable and will increase or decrease with increases or decreases in revenue.COR was as follows (in thousands): Years Ended December 31, 2018 2017 2016Recovery Audit Services – Americas $69,897 $68,963 $60,706Recovery Audit Services – Europe/Asia-Pacific 27,767 26,930 24,802Adjacent Services 7,161 6,159 5,791Total $104,825 $102,052 $91,29924COR as a percentage of revenue for Recovery Audit Services - Americas was 60.3% in 2018, 61.0% in 2017 and 60.8% in 2016. We continue to investin our various growth and other strategic initiatives, and include portions of these costs in Recovery Audit Services - Americas COR. COR for RecoveryAudit Services - Americas increased by 1.4% in 2018 compared to 2017 and increased 13.6% in 2017 compared to 2016. In 2017, Recovery Audit Services -Americas COR included Lavante and C&CA business expenses and certain transformation charges which were not included in 2016. The improvement inCOR as a percentage of revenue in 2017 compared to 2016 was primarily due to the increase in revenues and the positive financial impact of operationalprocess improvements.COR as a percentage of revenue for Recovery Audit Services - Europe/Asia-Pacific was 56.1% in 2018, 60.7% in 2017 and 66.4% in 2016. In 2017,Recovery Audit Services - Europe/Asia-Pacific COR included C&CA business expenses and certain transformation charges which were not included in 2016. COR as a percentage of revenue improved 4.6% in 2018 compared to 2017 and 5.7% in 2017 compared to 2016. Improvements primarily related to theincrease in revenue and retrained cost growth. The improvement in COR as a percentage of revenue for 2017 compared to 2016 was primarily due to theincrease in revenues and the impact of transforming our operational processes.Adjacent Services COR is primarily related to our continued investments in personnel whom we are hiring to either sell or assist with service delivery.COR as a percentage of revenue decreased to 113.1% in 2018 from 149.3% in 2017, which was a decrease from 158.7% in 2016. The reduction in AdjacentServices COR as a percentage of revenue in 2018 and 2017 is primarily due to our increase in revenue and lower service delivery costs.Selling, General and Administrative Expenses (“SG&A”). SG&A expenses for all segments other than Corporate Support include the expenses of salesand marketing activities, information technology services and allocated corporate data center costs, human resources, legal, accounting, administration,foreign currency transaction gains and losses other than those relating to short-term intercompany balances and gains and losses on asset disposals. CorporateSupport SG&A represents the unallocated portion of SG&A expenses which are not specifically attributable to our segment activities and include theexpenses of information technology services, the corporate data center, human resources, legal, accounting, treasury, administration and stock-basedcompensation charges.SG&A expenses were as follows (in thousands): Years Ended December 31, 2018 2017 2016Recovery Audit Services – Americas $11,849 $9,410 $8,421Recovery Audit Services – Europe/Asia-Pacific 7,439 6,586 5,442Adjacent Services 1,685 3,735 1,469Subtotal for reportable segments 20,973 19,731 15,332Corporate Support 29,483 27,210 24,067Total $50,456 $46,941 $39,399Recovery Audit Services - Americas SG&A expenses increased 25.9% in 2018 compared to 2017 and increased 11.7% in 2017 compared to 2016. The2018 increase resulted primarily from our investment in sales and marketing. The increase in 2017 was primarily due to expenses associated with the Lavanteand C&CA acquisitions that were not included in the prior year amounts.Recovery Audit Services - Europe/Asia-Pacific SG&A expenses increased 13.0% in 2018 compared to 2017 after increasing 21.0% in 2017 comparedto 2016. The 2018 increase resulted primarily from an increase of equity-based compensation costs. The increase in 2017 was primarily associated withexpenses related to the C&CA acquisition which were not included in the prior year amounts.Adjacent Services SG&A expenses decreased $2.1 million in 2018 compared to 2017 as a result of the integration of information technology resourcesinto Corporate. Adjacent Services SG&A expenses increased $2.3 million in 2017 compared to 2016 due mainly to three quarters of expenses related to theLavante acquisition which were not included in the prior year amounts.Corporate Support SG&A expenses include stock-based compensation charges of $5.1 million in 2018, $7.1 million in 2017 and $5.1 million in 2016.Excluding stock-based compensation charges, Corporate Support SG&A expenses increased 21.2% in 2018 compared to 2017 and increased 6.4% in 2017compared to 2016. The increase in 2018 compared to 2017 was25due primarily to increased sales and marketing personnel. The increase in 2017 compared to 2016 was due mainly to increases in the business acquisitionactivity, increased personnel and incentive-based compensation expenses.Acquisition-Related Adjustments included adjustments to earnout consideration of acquired businesses in 2018 and 2017 for $1.6 million and $2.3million, respectively. Depreciation of Property, Equipment and Software Assets. Depreciation of property, equipment and software assets was as follows (in thousands): Years Ended December 31, 2018 2017 2016Recovery Audit Services – Americas $5,545 $3,165 $3,750Recovery Audit Services – Europe/Asia-Pacific 683 599 529Adjacent Services 1,142 805 755Total $7,370$4,569 $5,034Depreciation expense increased in 2018 compared to 2017 primarily as a result of the increased level of capital purchases and assets placed into servicein 2018 compared to the prior year. Depreciation expense decreased in 2017 compared to 2016 primarily as a result of the reduced level of capital purchasesand assets placed into service in 2017 compared to the prior year.Amortization of Intangible Assets. Amortization of intangible assets was as follows (in thousands): Years Ended December 31, 2018 2017 2016Recovery Audit Services – Americas $1,664 $1,919 $1,477Recovery Audit Services – Europe/Asia-Pacific 172 142 —Adjacent Services 1,559 1,573 355Total $3,395 $3,634 $1,832Generally, we amortize the customer relationship and trademark intangible assets we record in connection with an acquisition on an accelerated basisover six years or longer, and we amortize non-compete agreements and trade names on a straight-line basis over five years or less. This methodology results inhigher amortization immediately following an acquisition, and declining expense in subsequent periods. Our most recent acquisitions prior to December 31,2018 include C&CA in February 2017 (Recovery Audit Services - Americas and Recovery Audit Services Europe, Asia Pacific) and Lavante in October 2016(Adjacent Services). Amortization expense decreased $0.2 million in 2018 compared to 2017. Amortization expense increased in our recovery audit segmentsin 2017 compared to 2016 as a result of the amortization charges associated with the C&CA acquisition. Similarly, Adjacent Services amortization expenseincreased in 2017 compared to 2016 due to the amortization of certain assets acquired in the acquisition of Lavante.Foreign Currency Transaction (Gains) Losses on Short-Term Intercompany Balances. Foreign currency transaction gains and losses on short-termintercompany balances result from fluctuations in the exchange rates between foreign currencies and the U.S. dollar and the impact of these fluctuations,primarily on balances payable by our foreign subsidiaries to their U.S. parent. Substantial changes from period to period in foreign currency exchange ratesmay significantly impact the amount of such gains and losses. The strengthening of the U.S. dollar relative to other currencies results in recorded losses onshort-term intercompany balances receivable from our foreign subsidiaries while the relative weakening of the U.S. dollar results in recorded gains.The U.S. dollar generally strengthened relative to the local currencies of certain of our foreign subsidiaries in 2018 and weakened relative to the localcurrencies of certain of our foreign subsidiaries in 2017, and strengthened in 2016, resulting in our recording on short-term intercompany balances netforeign currency losses in 2018 of $1.0 million, net foreign currency gains in 2017 of $2.2 million and net foreign currency losses in 2016 of less than $0.1million.Net Interest Expense (Income). Net interest expense was $1.7 million in 2018 and $1.5 million in 2017 as a result of increased borrowings associatedwith our acquisitions and the accretion of contingent payments associated with our acquisitions. Net interest income was $0.2 million in 2016 due toreductions in interest accruals on uncertain tax positions.26Income Tax Expense. Our reported effective tax rates on earnings approximated 28.3% in 2018, 39.4% in 2017, and 35.8% in 2016. Reported incometax expense in each year primarily results from taxes on the income of foreign subsidiaries. We have recorded a deferred tax asset valuation allowance thateffectively eliminates income tax expense or benefit relating to our U.S. operations. The tax rate for 2018 reflects the impact of the release of the valuationallowance offsetting certain deferred tax assets in France and the UK. The tax rate for 2017 reflects the impact of the release of the valuation allowance forvarious jurisdictions, the impact of which was not material to the financials. The tax rate for 2016 reflects the impact of the release of the valuation allowanceoffsetting certain deferred tax assets in New Zealand and Singapore.Together with the reversal of interest expense accruals, the total net reduction to our reserves for uncertain tax positions based on changes in accrualswas nominal in 2018, $0.5 million in 2017, and $0.1 million in 2016.As of the end of each of the past three years, management determined that based on all available evidence, deferred tax asset valuation allowances of$31.6 million in 2018, $34.8 million in 2017, and $50.1 million in 2016 were appropriate.As of December 31, 2018, we had approximately $81.5 million of U.S. federal loss carry-forwards available to reduce future U.S. federal taxable income.Approximately $80.9 million of the U.S. federal loss carry-forwards expire between 2026 and 2035. The remaining $0.6 million of U.S. federal loss carry-forwards do not expire due to the Tax Act. As of December 31, 2018, we had approximately $70.9 million of state loss carry-forwards available to reducefuture state taxable income. The state loss carry-forwards expire between 2022 and 2037 and are subject to certain limitations. The U.S. federal and state losscarry-forwards at December 31, 2018, reflect adjustments for prior period write-downs associated with ownership changes.On December 30, 2016, the Company experienced an ownership change as defined under Section 382 of the Internal Revenue Code (“IRC”). Thisownership change resulted in an annual IRC Section 382 limitation that limits the use of certain tax attribute carry-forwards and also resulted in the write-offof certain deferred tax assets and the related valuation allowances that the Company recorded in 2017. The loss carry-forwards outstanding as of December30, 2016 are subject to an annual base usage limitation of $2.7 million. The Company performed its assessment and determined that $87.3 million of thegross federal net operating losses outstanding as of December 30, 2016 would be available for use going-forward. The Company utilized $6.4 million of theselosses on the 2017 U.S. federal tax return and the remaining $80.9 million remains available.On December 22, 2017, the Tax Cuts and Jobs Act (the "Tax Act"), was signed into law making significant changes to the Internal Revenue Code. Thenew legislation contains several key provisions that affect us including, but not limited to, the lowering of the U.S. corporate tax rate from 35% to 21% fortax years beginning after December 31, 2017, the transition of U.S international taxation from a worldwide tax system to a territorial system, and a one-timetransition tax on the mandatory deemed repatriation of cumulative foreign earnings. As a result of the Tax Act, we recorded a one-time adjustment for the re-measurement of deferred tax assets and liabilities during 2017. Given our U.S. valuation allowance, the Tax Act does not materially impact our income taxprovision or balance sheet. Additionally, in December 2017, the SEC staff issued Staff Accounting Bulletin No. 118, Income Tax Accounting Implications ofthe Tax Cuts and Jobs Act (SAB 118), which allowed us to record provisional amounts during a measurement period not to extend beyond one year of theenactment date. Since the Tax Act was passed late in the fourth quarter of 2017, and ongoing guidance and accounting interpretation were expected duringthe 2018 calendar year, we considered the accounting of the transition tax, deferred tax re-measurements, and other items to be incomplete as of December 31,2017, though we recorded provisional amounts in the consolidated financial statements. As of December 22, 2018, we have completed our analysis related tothe Tax Act in accordance with SAB 118 and there was no additional adjustment required.Non-GAAP Financial MeasuresWe evaluate the performance of our operating segments based upon revenue and measures of profit or loss we refer to as EBITDA and AdjustedEBITDA. We define Adjusted EBITDA as earnings from continuing operations before interest and taxes (“EBIT”), adjusted for depreciation and amortization(“EBITDA”), and then adjusted for unusual and other significant items that management views as distorting the operating results of the various segmentsfrom period to period. Such adjustments include restructuring charges, stock-based compensation, bargain purchase gains, acquisition-related charges andbenefits (acquisition transaction costs, acquisition obligations classified as compensation, and fair value adjustments to acquisition-related contingentconsideration), tangible and intangible asset impairment charges, certain litigation costs and litigation settlements, severance charges and foreign currencytransaction gains and losses on short-term intercompany balances viewed by management as individually or collectively significant.27EBIT, EBITDA and Adjusted EBITDA are all “non-GAAP financial measures” presented as supplemental measures of the Company’s performance. Theyare not presented in accordance with accounting principles generally accepted in the United States ("GAAP"). We believe these measures provide additionalmeaningful information in evaluating its performance over time, and that the rating agencies and a number of lenders use EBITDA and similar measures forsimilar purposes. In addition, a measure similar to Adjusted EBITDA is used in the restrictive covenants contained in our secured credit facility. However,EBIT, EBITDA and Adjusted EBITDA have limitations as analytical tools, and should not be considered in isolation, or as substitutes for analysis of ourresults as reported under GAAP. In addition, in evaluating EBIT, EBITDA and Adjusted EBITDA, the adjustments may vary from period to period and in thefuture we will incur expenses such as those used in calculating these measures. Our presentation of these measures should not be construed as an inferencethat future results will be unaffected by unusual or nonrecurring items.A reconciliation of consolidated net income to each of EBIT, EBITDA and Adjusted EBITDA for the periods presented in this report are as follows (inthousands):EBIT, EBITDA, and Adjusted EBITDA Years Ended December 31, 2018 2017 2016Net income $4,593 $3,184 $905Income tax expense 1,321 2,962 1,242Interest expense (income), net 1,663 1,539 (153)EBIT 7,577 7,685 1,994Depreciation of property, equipment and software assets 7,371 4,577 5,047Amortization of intangible assets 3,395 3,634 1,832EBITDA 18,343 15,896 8,873Foreign currency transaction losses (gains) on short-term intercompany balances 1,002 (2,190) 84Acquisition-related adjustments (income) loss (1,628) (2,283) —Transformation and severance expenses 3,122 1,666 1,383Other loss (income) 21 (160) (121)Stock-based compensation 5,056 7,052 5,123Adjusted EBITDA $25,916 $19,981 $15,342Adjusted EBITDA from continuing operations $24,673 $21,345 $16,598Adjusted EBITDA from discontinued operations $1,243 $(1,364) $(1,256)Acquisition-related adjustments decreased by $0.7 million in 2018 compared to 2017. The adjustments in 2018 and 2017 were to adjust the earnoutconsideration associated with business acquisitions.Transformation and severance expenses increased $1.5 million in 2018 compared to 2017 and increased $0.3 million in 2017 compared to 2016. Theincreases in 2018 and 2017 were primarily the result of certain positions in the Company that were permanently eliminated.Stock-based compensation decreased $2.0 million, or 28.3%, in 2018 compared to 2017 primarily due to lower compensation expense associated withour performance-based restricted stock units than in the prior year. Stock-based compensation increased $1.9 million, or 37.7%, in 2017 compared to 2016due to the issuance in 2017 of performance-based equity grants whose value fluctuates with our stock price, and the appreciation of our stock price during theyear.28Adjusted EBITDA by SegmentWe include a detailed calculation of Adjusted EBITDA by segment in Note 2 of “Notes to Consolidated Financial Statements” in Item 8 of this Form10-K. A summary of Adjusted EBITDA by segment for the years ended December 31, 2018, 2017, and 2016 is as follows (in thousands): Years Ended December 31, 2018 2017 2016Recovery Audit Services – Americas $35,118 $35,062 $31,251Recovery Audit Services – Europe/Asia-Pacific 15,514 11,511 7,403Adjacent Services (2,450) (5,448) (3,354)Subtotal for reportable segments 48,182 41,125 35,300Corporate Support (23,509) (19,780) (18,702)Total for continuing operations $24,673 $21,345 $16,598Adjusted EBITDA in 2018 was $24.7 million, an increase of $3.3 million, or 15.6%, compared to 2017 Adjusted EBITDA of $21.3 million. AdjustedEBITDA in 2017 increased by $4.7 million, or 28.6%, compared to $16.6 million in 2016.Recovery Audit Services - Americas Adjusted EBITDA was relatively unchanged in 2018 compared to 2017 and increased 12.2% in 2017 compared to2016. The 2017 increase resulted primarily from increased revenue, including revenue from the C&CA acquired business, and other operationalimprovements implemented during the year. On an organic basis, 2017 Adjusted EBITDA in this segment increased by 8.2% compared to 2016.Recovery Audit Services - Europe/Asia-Pacific Adjusted EBITDA increased 34.8% in 2018 compared to 2017. Adjusted EBITDA in this segmentincreased primarily as a result of increased revenue together with continued operational improvements. The 2017 increase resulted primarily from increasedrevenue, including revenue from the C&CA acquired business, and other operational improvements implemented during the year. On an organic basis, 2017Adjusted EBITDA in this segment increased by 43.5% compared to 2016.Adjacent Services Adjusted EBITDA increased 55% in 2018 compared to 2017 and declined 62.4% in 2017 compared to 2016. In 2018 the increaseprimarily resulted from increased revenue and operational improvements in the segment. The 2017 results are primarily related to Lavante operating coststhat were included for the first three quarters in 2017, but not included in the first three quarters of 2016. On an organic basis, 2017 Adjusted EBITDA in thissegment increased by 22.3% compared to 2016.Corporate Support Adjusted EBITDA declined by $3.7 million, or 18.9%, in 2018 compared to 2017 due mainly to investments in software andtechnology and the addition of sales and marketing personnel. Corporate Support Adjusted EBITDA declined by $1.1 million, or 5.8%, in 2017 compared to2016 due mainly to the addition of sales personnel, increases in incentive compensation expenses and increased costs associated with business acquisitionactivities. On an organic basis, Adjusted EBITDA in this segment declined by 6.2% in 2017 compared to 2016.Liquidity and Capital ResourcesCash and cash equivalents include all cash balances and highly liquid investments with an initial maturity of three months or less from the date ofpurchase. We place our temporary cash investments with high credit quality financial institutions. At times, certain investments may be in excess of theFederal Deposit Insurance Corporation (“FDIC”) insurance limit or otherwise may not be covered by FDIC insurance. Some of our cash and cash equivalentsare held at banks in jurisdictions outside the U.S. that have restrictions on transferring such assets outside of these countries on a temporary or permanentbasis. Such restricted net assets are not material to our consolidated net assets.As of December 31, 2018, we had $14.0 million in cash and cash equivalents and $21.6 million of borrowings under our revolving credit facility withSunTrust Bank ("SunTrust"). As of December 31, 2018, the limit on our revolving credit facility was $35.0 million and we had $13.4 million of availabilityfor borrowings. As of December 31, 2018, the Company was in compliance with the covenants in its SunTrust credit facility. We amended the SunTrust creditfacility in January 2014, December 2014, December 2016, May 2017, March 2018, September 2018 and November 2018 as further described in SecuredCredit Facility below.29The $14.0 million in cash and cash equivalents includes $5.7 million held at banks in the U.S. and the remainder held at banks in other jurisdictions,primarily in the United Kingdom, Canada, India, and Australia. Certain foreign jurisdictions restrict the amount of cash that can be transferred to the U.S. orimpose taxes and penalties on such transfers of cash. To the extent we have excess cash in foreign locations that could be used in, or is needed by, ouroperations in the U.S., we may incur significant penalties and/or taxes to repatriate these funds. Generally, we have not provided for deferred taxes on theundistributed earnings of international subsidiaries as we consider these earnings to be permanently reinvested. However, we do not consider the earnings ofour Canadian subsidiary to be permanently invested, and have provided deferred taxes relating to the potential repatriation of the funds held in Canada.Our cash and cash equivalents as of December 31, 2018 included short-term investments of approximately $1.4 million, the majority of which was heldat banks outside of the United States, primarily in Brazil and Canada.Operating Activities. Net cash provided by operating activities was $2.4 million in 2018, $13.5 million in 2017 and $10.1 million in 2016. Theseamounts consist of two components, specifically, net income adjusted for certain non-cash items (such as depreciation, amortization, stock-basedcompensation expense, impairment charges, and deferred income taxes) and changes in assets and liabilities, primarily working capital, as follows (inthousands): Years Ended December 31, 2018 2017 2016Net income $4,593 $3,184 $905Adjustments for certain non-cash items 14,889 12,813 11,307 19,482 15,997 12,212Changes in operating assets and liabilities (17,051) (2,537) (2,094)Net cash provided by operating activities $2,431 $13,460 $10,118Long term incentive payments of $6.4 million were made in 2018. On June 30, 2018, Stock Appreciation Rights (SARs) covering 200,000 shares of theCompany's common stock vested and became payable to the Company’s Chief Executive Officer in cash in a lump sum equal to $1.0 million (less applicabletax withholding), which was paid in July 2018.We have one client, The Kroger Co., that accounted for approximately 12% of our revenue in both 2018 and 2017 and approximately 11% of ourrevenue in 2016. The loss of any one of our major clients would negatively impact our operating cash flows and would potentially have a material adverseimpact on our liquidity.Investing Activities. Net cash used for capital expenditures was $10.4 million in 2018, $9.4 million in 2017 and $5.9 million in 2016. These capitalexpenditures primarily related to acquisitions and investments we made to upgrade our information technology infrastructure, develop our proprietary audittechnologies, and develop our SaaS solutions.Capital expenditures are discretionary and we currently expect to continue to make capital expenditures to develop our proprietary audit technologies,our SaaS solutions, and enhance our information technology infrastructure. Should we experience changes in our operating results, we may alter our capitalexpenditure plans.Business Acquisitions and DivestituresWe made several business acquisitions over the past few years, each of which is discussed more fully in Note 12 - Business Acquisitions andDivestitures in “Notes to Consolidated Financial Statements” in Part II, Item 8 of this Form 10-K. Following is a summary of recent business acquisition anddivestiture activities impacting our liquidity and capital resources in the past three years.In February 2017, we completed the acquisition of C&CA, a commercial recovery audit and contract compliance business with operations in the U.S.and the UK for a net purchase price of $15.9 million. C&CA assets consist primarily of customer contracts.In October 2016, we completed the acquisition of Lavante, a SaaS-based supplier of SIM and recovery audit services, for a net purchase price of $3.7million. Lavante’s assets consist primarily of its proprietary software applications and customer contracts.Financing Activities. Net cash provided by financing activities was $3.0 million in 2018, primarily due to proceeds from our credit facility (net ofrepayments) of $8.0 million, and $4.4 million of proceeds from option exercises, partially offset by $4.1 million of payments for repurchases of commonstock under our stock repurchase program, $4.0 million of payments for an acquisition earnout liability and $1.3 million of payments for stock repurchasedfrom employees for withholding taxes30associated with the vesting of equity awards. Net cash provided by financing activities was $11.0 million in 2017 and net cash used by financing activitieswas less than $0.1 million in 2016.Secured Credit FacilityOn January 19, 2010, we entered into a four-year revolving credit and term loan agreement with SunTrust Bank (“SunTrust”). The SunTrust creditfacility initially consisted of a $15.0 million committed revolving credit facility and a $15.0 million term loan. The SunTrust credit facility was guaranteedby the Company and its material domestic subsidiaries and was secured by substantially all of our assets. The SunTrust term loan required quarterly principalpayments of $0.8 million from March 2010 through December 2013, and a final principal payment of $3.0 million in January 2014 that we paid in December2013.On January 17, 2014, we entered into an amendment of the SunTrust credit facility that increased the committed credit facility from $15.0 million to$25.0 million, lowered the applicable margin to a fixed rate of 1.75%, eliminated the provision limiting availability under the credit facility based oneligible accounts receivable, increased our stock repurchase program limit, and extended the scheduled maturity of the credit facility to January 16, 2015(subject to earlier termination as provided therein). We were required pay a commitment fee of 0.5% per annum, payable quarterly, on the unused portion ofthe $25.0 million credit facility.On December 23, 2014, we entered into an amendment of the SunTrust credit facility that reduced the committed revolving credit facility from $25.0million to $20.0 million. Pursuant to the December 2014 amendment, the credit facility would bear interest at a rate per annum comprised of a specified indexrate based on one-month LIBOR, plus an applicable margin (1.75% per annum). The index rate was determined as of the first business day of each calendarmonth. The credit facility included two financial covenants (a maximum leverage ratio and a minimum fixed charge coverage ratio) that would apply only ifwe had borrowings under the credit facility that arose or remained outstanding during the final 30 calendar days of any fiscal quarter. These financialcovenants were also tested, on a modified pro forma basis, in connection with each new borrowing under the credit facility. This amendment also extendedthe scheduled maturity of the revolving credit facility to December 23, 2017 and lowered the commitment fee to 0.25% per annum, payable quarterly, on theunused portion of the revolving credit facility.On December 21, 2016, we entered into an amendment of the SunTrust credit facility in order to clarify certain definitions and other terms of the facility.On May 4, 2017, we entered into an amendment of the SunTrust credit facility, that, among other things, (i) increased the aggregate principal amount ofthe committed revolving credit facility from $20.0 million to $35.0 million through December 31, 2018, which amount was reduced to $30.0 millionthereafter, (ii) extended the maturity date of the credit facility to December 31, 2019, (iii) added customary provisions to reflect European Union “bail-in”directive compliance language, and (iv) modified the financial covenants applicable to the Company during the remaining term of the credit facility by (A)revising the maximum leverage ratio and minimum fixed charge coverage ratio and (B) adding an additional financial covenant requiring the Company tomaintain a minimum amount of consolidated adjusted EBITDA. In addition, the applicable margin used to determine the interest rate per annum onoutstanding borrowings under the credit facility, and the ongoing commitment fee payable on the unused portion of the revolving credit facilitycommitment, both of which previously had been fixed percentages per annum, were amended and to both vary based upon our quarterly leverage ratiocalculation under the SunTrust credit facility.On March 21, 2018, the SunTrust credit facility was amended with respect to the calculation of consolidated adjusted EBITDA for financial covenantcompliance. The debt covenant calculation was modified to include the cash component of stock-based compensation for 2017.On September 28, 2018, the SunTrust credit facility was amended in order to expand the types of stock the Company could purchase as well as adjustthe fixed coverage charge ratio. Under the amended terms, the Company could make restricted payments to purchase capital stock (other than disqualifiedstock). The fixed charge coverage ratio was reduced from 1.25 to 1.00 for the quarter ended September 30, 2018.On November 5, 2018, the SunTrust credit facility was amended to add, as an additional financial condition to the Company's ability to make certainrestricted payments, a requirement that the Company have an aggregate "minimum liquidity" of $5.0 million immediately prior to and immediately aftergiving effect to any restricted payment, with "minimum liquidity" being defined as 100% of all unrestricted domestic cash holdings, 70% of unrestrictedforeign cash holdings, and the unused availability under the SunTrust credit facility. In addition, the calculation of the fixed charge coverage ratio wasrevised to exclude the following fixed charges: (i) the $4.0 million earnout payment made in the second quarter of 2018 in connection with a prioracquisition by the Company and (ii) up to $5.0 million (in the aggregate) of restricted payments consisting of redemption, purchases or repurchases of capitalstock in the fourth quarter of 2018 and the first quarter of 2019.31The SunTrust credit facility included customary affirmative, negative, and financial covenants binding on the Company, including delivery of financialstatements and other reports, conduct of business, and transactions with affiliates. The negative covenants limited our ability, among other things, to incurdebt, incur liens, make investments, sell assets or declare or pay dividends on our capital stock. The financial covenants included in the credit facility setforth maximum leverage and minimum fixed charge coverage ratios and require maintenance of a minimum amount of consolidated adjusted earnings beforeinterest, taxes, depreciation and amortization. In addition, the credit facility included customary events of default. Borrowing availability under the SunTrustcredit facility at December 31, 2018 was $13.4 million. As of December 31, 2018, we had $21.6 million in outstanding borrowings under the SunTrust creditfacility. The Company was in compliance with the covenants in its SunTrust credit facility as of December 31, 2018. The interest rate at December 31, 2018was approximately 4.60% and the ongoing commitment fee was 0.25%.On March 14, 2019, we entered into a credit agreement with Bank of America, N.A. to refinance our borrowing facility with SunTrust. Refer to Note 14 -Subsequent Events of the notes to the consolidated financial statements for a description of the credit agreement with Bank of America, N.A.We believe that we will have sufficient borrowing capacity and cash generated from operations to fund our capital and operational needs for at least thenext twelve months.Stock Repurchase ProgramOn February 21, 2014, our Board of Directors authorized a stock repurchase program under which we could repurchase up to $10.0 million of ourcommon stock from time to time through March 31, 2015. Since 2014, the original authorization of the stock repurchase program, the Board of Directors hasmodified the program from time to time to increase the repurchase limit to $75 million and extend the expiration date to December 31, 2019. From theFebruary 2014 announcement of the Company’s current stock repurchase program through December 31, 2018, the Company has repurchased 9.1 millionshares of its common stock for an aggregate cost of $48.6 million. These shares were retired and accounted for as a reduction to Shareholders' equity in theConsolidated Balance Sheet. Direct costs incurred to acquire the shares are included in the total cost of the shares.The timing and amount of future repurchases, if any, will depend upon the Company’s stock price, the amount of the Company’s available cash,regulatory requirements, and other corporate considerations. The Company may initiate, suspend or discontinue purchases under the stock repurchaseprogram at any time.Contractual Obligations and Other CommitmentsAs discussed in “Notes to Consolidated Financial Statements” included in Item 8 of this Form 10-K, the Company has certain contractual obligationsand other commitments. A summary of those commitments as of December 31, 2018 is as follows: Payments Due by Period (in thousands)Contractual obligations Total LessThan1 Year 1-3 Years 3-5Years MoreThan5 YearsLong-term debt obligations $21,600 $— $21,600 $— $—Interest and commitment fee on Secured Credit Facility (1) 1,015 1,015 — — —Operating lease obligations 14,320 4,975 7,130 1,653 562Payments to Messrs. Cook and Toma (2) 326 66 141 84 35Acquisition costs for earnout provision (3) 4,162 4,162 — — —Severance 657 657 — — —Total $42,080 $10,875 $28,871 $1,737 $597(1)Represents the estimated commitment fee and interest due on the Secured Credit Facility using an interest rate as of December 31, 2018 and assuming borrowing under theSunTrust credit facility of $21.6 million. See Note 5 of the "Notes to Consolidated Financial Statements" for additional information regarding the Secured Credit Facility.On March 14, 2019, we entered into a credit agreement with Bank of America, N.A. to refinance our borrowing facility with SunTrust. See Note 14 for a description of thecredit agreement with Bank of America, N.A.(2)Represents estimated reimbursements payable for healthcare costs incurred by these former executives.32(3)This earnout provision is calculated using the present value of the expected (probability-weighted) payments based on the likelihood of achieving each of the financialperformance targets. The remaining cash payments will total $8.5 million assuming that the full earnout amount is achieved (see Note 12 of the "Notes to the ConsolidatedFinancial Statements" for additional information).Off-Balance Sheet ArrangementsAs of December 31, 2018, the Company did not have any material off-balance sheet arrangements, as defined in Item 303(a)(4)(ii) of the SEC’sRegulation S-K.Critical Accounting PoliciesWe describe our significant accounting policies in Note 1 of “Notes to Consolidated Financial Statements” included in Item 8 of this Form 10-K.Certain of our accounting policies are particularly important to the portrayal of our financial position and results of operations and require the application ofsignificant judgment by management. As a result, they are subject to an inherent degree of uncertainty. We consider accounting policies that involve the useof estimates that meet both of the following criteria to be “critical” accounting policies. First, the accounting estimate requires us to make assumptions aboutmatters that are highly uncertain at the time that the accounting estimate is made. Second, alternative estimates in the current period, orchanges in the estimate that are reasonably likely in future periods, would have a material impact on the presentation of our financial condition, changes infinancial condition or results of operations.In addition to estimates that meet the “critical” estimate criteria, we also make many other accounting estimates in preparing our consolidated financialstatements and related disclosures. All estimates, whether or not deemed critical, affect reported amounts of assets, liabilities, revenue and expenses, as well asdisclosures of contingent assets and liabilities. On an on-going basis, we evaluate our estimates and judgments, including those related to revenuerecognition, refund liabilities, accounts receivable allowance for doubtful accounts, goodwill and other intangible assets and income taxes. We base ourestimates and judgments on historical experience, information available prior to the issuance of the consolidated financial statements and on various otherfactors that we believe to be reasonable under the circumstances. This information forms the basis for making judgments about the carrying values of assetsand liabilities that are not readily apparent from other sources. Materially different results can occur as circumstances change and additional informationbecomes known, including changes in those estimates not deemed “critical”.We believe the following critical accounting policies, among others, involve our more significant estimates and judgments we used in the preparationof our consolidated financial statements. We have discussed the development and selection of accounting estimates, including those deemed “critical,” andthe associated disclosures in this Form 10-K with the audit committee of the Board of Directors.•Revenue Recognition. The Company's policy is to recognize revenue in a way that depicts the transfer of promised goods or services to customers ina manner and amount that reflects the consideration to which the Company expects to be entitled in exchange for the transfer of goods or servicespromised to customers. To adhere to this core principle, the Company applies the following five steps: (a) identify contract(s) with a customer; (b)identify the performance obligations in a contract; (c) determine the transaction price; (d) allocate the transaction price to the performanceobligations in a contract; and (e) recognize revenue when (or as) performance obligations are satisfied. The Company determines that theperformance obligations have been satisfied when its customers obtain control of the goods or services as evidenced by the customer’s ability todirect the use, or the ability to receive substantially all of the remaining economic benefit, of the contract assets. Additionally, for purposes ofdetermining the appropriate timing of recognition, revenue will be recognized over time or at a point in time based on an evaluation of the specificcriteria that is to be achieved to meet the performance obligations of each contract.The determination that the core principle for revenue recognition has been met, and the five steps have been applied appropriately, requiressignificant judgment. Management considers the application of this judgment to be critical in determining the appropriate amount of revenue to berecognized. The most critical judgments are required in the determination of the transaction price, the identification of the performance obligationswithin a contract, and the determination as to whether or not and to what extent such performance obligations have been satisfied. A misapplicationof this judgment could result in inappropriate recognition of revenue.•Unbilled Receivables. Unbilled receivables relate to claims for which the Company's customers have received economic value and for which theyacknowledge that the unbilled receivable has been earned but has not yet been billed. The Company typically invoices the customer in thesubsequent month.•Refund liabilities. Refund liabilities result from reductions in the economic value previously received by our clients with respect to vendor claimsidentified by us and for which we previously have recognized revenue. We compute the estimate of our refund liabilities at any given time basedon actual historical refund data. We record periodic changes in refund liabilities as adjustments to revenue. We satisfy such refund liabilities eitherby offsets to amounts otherwise due from clients or by cash refunds to clients.•Goodwill, Other Intangible Assets, Long-lived Assets, and Impairment Charges. Goodwill represents the excess of the purchase price over theestimated fair market value of net identifiable assets of acquired businesses. Intangible assets are assets that lack physical substance. We evaluatethe recoverability of goodwill and other intangible assets in accordance with ASC 350, Intangibles-Goodwill and Other, in the fourth quarter ofeach year or sooner if events or changes in circumstances indicate that the carrying amount may exceed its fair value. This evaluation includes apreliminary assessment of qualitative factors to determine if it is necessary to perform a two-step impairment testing process. The first stepidentifies potential impairments by comparing the fair value of the reporting unit with its carrying value, including goodwill. If the calculated fairvalue of a reporting unit exceeds the carrying value, goodwill is not impaired, and the second step is not necessary. If the carrying value of areporting unit exceeds the fair value, the second step calculates the possible impairment loss by comparing the implied fair value of goodwill withthe carrying value. If the fair value is less than the carrying value, we would record an impairment charge.33We are not required to calculate the fair value of our reporting units that hold goodwill unless we determine that it is more likely than not that thefair value of these reporting units is less than their carrying values. In this analysis, we consider a number of factors, including changes in our legal,business and regulatory climates, changes in competition or key personnel, macroeconomic factors impacting our Company or our clients, our recentfinancial performance and expectations of future performance and other pertinent factors. Based on these analyses, we determined that it was notnecessary for us to perform the two-step process. We last used independent business valuation professionals to estimate fair value in the fourthquarter of 2010 and determined that fair value exceeded carrying value for all relevant reporting units. No impairment charges were necessary basedon our internal calculations in the three years ended December 31, 2018.We review the carrying value of long-lived assets such as property and equipment for impairment when events and circumstances indicate that thecarrying value of an asset may not be recoverable from the estimated future cash flows expected to result from its use and eventual disposition. Incases where undiscounted expected future cash flows are less than the carrying value, we will recognize an impairment loss equal to the amount bywhich the carrying value exceeds the fair value of the asset. No impairment charges were necessary in the three years ended December 31, 2018.•Income Taxes. Our effective tax rate is based on historical and anticipated future taxable income, statutory tax rates and tax planning opportunitiesavailable to us in the various jurisdictions in which we operate. Significant judgment is required in determining the effective tax rate and inevaluating our tax positions. Tax regulations require items to be included in the tax returns at different times than the items are reflected in thefinancial statements. As a result, our effective tax rate reflected in our Consolidated Financial Statements included in Item 8 of this Form 10-K isdifferent than that reported in our tax returns. Some of these differences are permanent, such as expenses that are not deductible on our tax returns,and some are temporary differences, such as depreciation expense. Temporary differences create deferred tax assets and liabilities. Deferred taxassets generally represent items that can be used as a tax deduction or credit in our tax returns in future years for which we have already recordedthe tax benefit in our Consolidated Statements of Operations. We establish valuation allowances to reduce net deferred tax assets to the amountsthat we believe are more likely than not to be realized. We adjust these valuation allowances in light of changing facts and circumstances.Deferred tax liabilities generally represent tax expense recognized in our consolidated financial statements for which payment has been deferred,or expense for which a deduction has already been taken on our tax returns but has not yet been recognized as an expense in our consolidatedfinancial statements.We reduce our deferred tax assets by a valuation allowance if it is more likely than not that some portion or all of a deferred tax asset will not berealized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which thosetemporary differences are deductible. In determining the amount of valuation allowance to record, we consider all available positive and negativeevidence affecting specific deferred tax assets, including our past and anticipated future performance, the reversal of deferred tax liabilities, thelength of carry-back and carry-forward periods, and the implementation of tax planning strategies. Objective positive evidence is necessary tosupport a conclusion that a valuation allowance is not needed for all or a portion of deferred tax assets when significant negative evidence exists.Cumulative tax losses in recent years are the most compelling form of negative evidence we considered in this determination.We apply a “more-likely-than-not” recognition threshold and measurement attribute for the financial statement recognition and measurement of atax position taken or expected to be taken in a tax return. We refer to U.S. generally accepted accounting principles (“GAAP”) for guidance onderecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. Our policy for recording interest andpenalties associated with tax positions is to record such items as a component of income before income taxes. A number of years may elapse before aparticular tax position is audited and finally resolved or before a tax assessment is raised. The number of years subject to tax assessments varies bytax jurisdictions.•Stock-Based Compensation. We account for awards of equity instruments issued to employees and directors under the fair value method ofaccounting and recognize such amounts in our Consolidated Statements of Operations. We measure compensation cost for all stock-based awardsat fair value on the date of grant and recognize compensation expense using the straight-line method over the service period over which we expectthe awards to vest. We recognize compensation costs for awards with performance conditions based on the probable outcome of the performanceconditions. We accrue compensation cost if we believe it is probable that the performance condition(s) will be achieved and do not accruecompensation cost if we believe it is not probable that the performance condition(s) will be achieved. In the event that it becomes probable thatperformance condition(s) will no longer be achieved, we reverse all of the previously recognized compensation expense in the period such adetermination is made.34We estimate the fair value of all time-vested options as of the date of grant using the Black-Scholes option valuation model, which was developedfor use in estimating the fair value of traded options that have no vesting restrictions and are fully transferable. Option valuation models require theinput of highly subjective assumptions, including the expected stock price volatility, which we calculate based on the historical volatility of ourcommon stock. We use a risk-free interest rate, based on the U.S. Treasury instruments in effect at the time of the grant, for the period comparable tothe expected term of the option. We use the “simplified” method in estimating the expected term of options as we have concluded that our historicalshare option exercise experience is a less than reasonable basis upon which to estimate the expected term for our grants. We account for forfeitures asthey occur rather than estimating expected forfeitures.We estimate the fair value of awards of restricted shares and nonvested shares as being equal to the market value of the common stock on the date ofthe award. We classify our share-based payments as either liability-classified awards or as equity-classified awards. We remeasure liability-classifiedawards to fair value at each balance sheet date until the award is settled. We measure equity-classified awards at their grant date fair value and do notsubsequently remeasure them. We have classified our share-based payments which are settled in our common stock as equity-classified awards andour share-based payments that are settled in cash as liability-classified awards. Compensation costs related to equity-classified awards generally areequal to the grant-date fair value of the award amortized over the vesting period of the award. The liability for liability-classified awards generally isequal to the fair value of the award as of the balance sheet date multiplied by the percentage vested at the time. We charge (or credit) the change inthe liability amount from one balance sheet date to another to compensation expense.New Accounting StandardsFor information related to new and recently adopted accounting standards, see Note 1 – Summary of Significant Accounting Policies and Basis ofPresentation, in “Notes to Consolidated Financial Statements” in Item 8 of this Form 10-K.35Item 7A. Quantitative and Qualitative Disclosures About Market RiskForeign Currency Market Risk. Our reporting currency is the U.S. dollar, although we transact business in various foreign locations and currencies. As aresult, our financial results could be significantly affected by factors such as changes in foreign currency exchange rates or weak economic conditions in theforeign markets in which we provide our services. Our operating results are exposed to changes in exchange rates between the U.S. dollar and the currenciesof the other countries in which we operate. When the U.S. dollar strengthens against other currencies, the value of foreign functional currency revenuedecreases. When the U.S. dollar weakens, the value of the foreign functional currency revenue increases. Overall, we are a net receiver of currencies other thanthe U.S. dollar and, as such, benefit from a weaker dollar. We therefore are adversely affected by a stronger dollar relative to major currencies worldwide. In2018, we recognized $18.8 million of operating income from operations located outside the U.S., virtually all of which was originally accounted for incurrencies other than the U.S. dollar. Upon translation into U.S. dollars, such operating income would increase or decrease, assuming a hypothetical 10%change in weighted-average foreign currency exchange rates against the U.S. dollar, by approximately $1.9 million. We currently do not have anyarrangements in place to hedge our foreign currency risk.Interest Rate Risk. Our interest income and expense are sensitive to changes in the general level of U.S. interest rates. In this regard, changes in U.S.interest rates affect the interest earned on our cash equivalents as well as interest paid on amounts outstanding under our revolving credit facility, if any. Wehad $13.4 million of borrowing availability under our revolving credit facility as of December 31, 2018, and had $21.6 million borrowed under the facility asof that date. Interest on the amended credit facility is payable monthly and accrues at an index rate using the one-month LIBOR rate plus an applicablemargin of 2.25%. Assuming full utilization of the credit facility, a hypothetical 100 basis point change in interest rates would result in an approximate $0.4million change in annual pre-tax income.36ITEM 8. Financial Statements and Supplementary DataINDEX TO CONSOLIDATED FINANCIAL STATEMENTS Page No.Report of Independent Registered Public Accounting Firm38Consolidated Statements of Operations for the Years Ended December 31, 2018, 2017 and 201639Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2018, 2017 and 201640Consolidated Balance Sheets as of December 31, 2018 and 201741Consolidated Statements of Shareholders' Equity for the Years Ended December 31, 2018, 2017 and 201642Consolidated Statements of Cash Flows for the Years Ended December 31, 2018, 2017 and 201643Notes to Consolidated Financial Statements4437Report of Independent Registered Public Accounting FirmShareholders and Board of DirectorsPRGX Global, Inc. and SubsidiariesAtlanta, GeorgiaOpinion on the Consolidated Financial StatementsWe have audited the accompanying consolidated balance sheets of PRGX Global, Inc. and Subsidiaries (the “Company”) as of December 31, 2018 and 2017,the related consolidated statements of operations, comprehensive income, shareholders’ equity, and cash flows for each of the three years in the period endedDecember 31, 2018, and the related notes and financial statement schedule listed in the accompanying index (collectively referred to as the “consolidatedfinancial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company atDecember 31, 2018 and 2017, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2018, inconformity with accounting principles generally accepted in the United States of America.We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company'sinternal control over financial reporting as of December 31, 2018, based on criteria established in Internal Control - Integrated Framework (2013) issued bythe Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) and our report dated March 18, 2019 expressed an unqualified opinionthereon.Basis for OpinionThese consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’sconsolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent withrespect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and ExchangeCommission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud,and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosuresin the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management,as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.We have served as the Company's auditor since 2006./s/ BDO USA, LLPAtlanta, GeorgiaMarch 18, 201938PRGX GLOBAL, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS(In thousands, except per share data) Years Ended December 31, 2018 2017 2016Revenue, net of refund liabilities $171,776 $161,620 $140,844Operating expenses: Cost of revenue 104,825 102,052 91,299Selling, general and administrative expenses 50,456 46,941 39,399Depreciation of property, equipment and software assets 7,370 4,569 5,033Amortization of intangible assets 3,395 3,634 1,832Acquisition-related adjustments (income) loss (1,628) (2,283) —Total operating expenses 164,418 154,913 137,563Operating income from continuing operations 7,358 6,707 3,281 Foreign currency transaction losses (gains) on short-term intercompany balances 1,002 (2,190) 84Interest expense (1,824) (1,785) (107)Interest income 161 246 260Other loss (income) 21 (160) (121)Net income from continuing operations before income tax 4,672 7,518 3,471Income tax expense 1,321 2,962 1,242Net income from continuing operations $3,351 $4,556 $2,229 Discontinued operations: Income (loss) from discontinued operations 1,242 (1,372) (1,324)Income tax expense (benefit) — — —Net income (loss) from discontinued operations 1,242 (1,372) (1,324) Net income $4,593 $3,184 $905 Basic earnings (loss) per common share (Note 3): Basic earnings from continuing operations $0.14 $0.21 $0.10Basic earnings (loss) from discontinued operations 0.06 (0.06) (0.06)Total basic earnings per common share $0.20 $0.15 $0.04 Diluted earnings (loss) per common share (Note 3): Diluted earnings from continuing operations $0.14 $0.21 $0.10Diluted earnings (loss) from discontinued operations 0.06 (0.06) (0.06)Total diluted earnings per common share $0.20 $0.15 $0.04 Weighted-average common shares outstanding (Note 3): Basic 22,811 21,937 21,969Diluted 23,434 22,111 22,016See accompanying Notes to Consolidated Financial Statements.39PRGX GLOBAL, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME(In thousands) Years Ended December 31, 2018 2017 2016Net income $4,593 $3,184 $905Foreign currency translation adjustments 1,128 (180) (507)Comprehensive income $5,721 $3,004 $398See accompanying Notes to Consolidated Financial Statements.40PRGX GLOBAL, INC. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(In thousands, except share and per share data) December 31, 2018 2017ASSETSCurrent assets: Cash and cash equivalents $13,973 $18,823Restricted cash 46 51Receivables: Contract receivables, less allowances of $1,024 in 2018 and $1,499 in 2017 Billed 43,878 36,058Unbilled 2,987 2,709 46,865 38,767Employee advances and miscellaneous receivables, less allowances of $176 in 2018 and $292 in2017 567 1,665Total receivables 47,432 40,432Prepaid expenses and other current assets 3,144 4,608Total current assets 64,595 63,914 Property, equipment and software: Computer and other equipment 20,517 32,655Furniture and fixtures 1,694 2,761Leasehold improvements 3,463 3,916Software 39,578 34,234 65,252 73,566Less accumulated depreciation and amortization (43,224) (56,088)Property and equipment, net 22,028 17,478 Goodwill (Note 4) 17,531 17,648Intangible assets, less accumulated amortization of $43,370 in 2018 and $40,461 in 2017 14,945 18,478Unbilled receivables 1,608 894Deferred income taxes (Note 7) 3,561 1,538Other assets 561 268Total assets $124,829 $120,218 LIABILITIES AND SHAREHOLDERS’ EQUITYCurrent liabilities: Accounts payable and accrued expenses $7,515 $8,548Accrued payroll and related expenses 15,073 13,078Refund liabilities 6,497 7,864Deferred revenue 2,428 1,431Current portion of debt (Note 5) 48 48Current portion of long-term incentive compensation liability — 5,116Business acquisition obligations (Notes 1 and 12) 4,162 3,759Total current liabilities 35,723 39,844 Long-term debt (Note 5) 21,553 13,526Noncurrent business acquisition obligations (Notes 1 and 12) — 5,135Refund liabilities 100 957Deferred income taxes (Note 7) 666 —Other long-term liabilities 458 442Total liabilities 58,500 59,904 Commitments and contingencies (Notes 2, 5, 6, 9 and 10) Shareholders’ equity (Notes 9 and 11): Common stock, no par value; $.01 stated value per share. Authorized 50,000,000 shares; 23,186,258 sharesissued and outstanding at December 31, 2018 and 22,419,417 shares issued and outstanding atDecember 31, 2017 232 224Additional paid-in capital 582,574 580,032Accumulated deficit (515,456) (520,049)Accumulated other comprehensive income (1,021) 107Total shareholders’ equity 66,329 60,314Total liabilities and shareholders’ equity $124,829 $120,218See accompanying Notes to Consolidated Financial Statements.41PRGX GLOBAL, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITYYears Ended December 31, 2018, 2017 and 2016(In thousands, except share data) Common Stock AdditionalPaid-InCapital AccumulatedDeficit Accumulated OtherComprehensiveIncome TotalShareholders'Equity Shares Amount Balance at December 31, 2015 22,681,656 $227 $575,532 $(524,138) $794 $52,415Net income — — — 905 — 905Foreign currency translation adjustments — — — — (507) (507)Issuances of common stock: Restricted shares remitted by employees for taxes (20,829) — (217) — — (217)Stock option exercises 90,496 — 320 — — 320Repurchases of common stock (905,403) (9) (3,763) — — (3,772)Stock-based compensation expense — — 3,246 3,246Balance at December 31, 2016 21,845,920 218 575,118 (523,233) 287 52,390Net income — — — 3,184 — 3,184Foreign currency translation adjustments — — — — (180) (180)Issuances of common stock: Restricted share awards 381,059 4 (4) —Restricted shares remitted by employees for taxes (15,006) — (100) — — (100)Stock option exercises 225,043 2 1,170 — — 1,172Forfeited restricted share awards (27,599) — — —Stock-based compensation expense — — 3,848 — — 3,848Balance at December 31, 2017 22,419,417 224 580,032 (520,049) 107 60,314Net income — — — 4,593 — 4,593Foreign currency translation adjustments — — — — (1,128) (1,128)Issuances of common stock: Restricted share awards 331,333 3 (3) — — —Restricted shares remitted by employees for taxes (155,329) (2) (1,279) — — (1,281)Stock option exercises 676,649 7 4,415 — — 4,422Performance-based restricted stock unit settlement 483,623 5 (5) —Restricted stock unit settlement 18,934 — — —Forfeited restricted share awards (148,083) (1) 1 — — —Repurchase of common stock (440,286) (4) (4,065) (4,069)Stock-based compensation expense — — 3,592 — — 3,592Other activities (114) (114)Balance at December 31, 2018 23,186,258 $232 $582,574 $(515,456) $(1,021) $66,329See accompanying Notes to Consolidated Financial Statements.42PRGX GLOBAL, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS(In thousands) Years Ended December 31, 2018 2017 2016Cash flows from operating activities: Net income $4,593 $3,184 $905Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization 10,766 8,203 6,879Amortization of deferred loan costs 53 85 60Noncash interest expense9611,215—Stock-based compensation expense 5,056 7,052 5,123Other loss from sale of assets — — 22Foreign currency transaction losses (gains) on short-term intercompany balances 1,002 (2,190) 84Income taxes (1,321) 731 (861) Changes in fair value of contingent consideration (1,628) (2,283) —Changes in operating assets and liabilities, net of business acquisitions: Restricted cash 5 (4) 1Billed receivables (8,639) (3,949) (3,339)Unbilled receivables (992) (469) (509)Prepaid expenses and other current assets 2,404 (417) (1,506)Other assets (229) (57) (65)Accounts payable and accrued expenses (3,275) 815 1,218Accrued payroll and related expenses 778 975 2,606Refund liabilities (2,112) 115 67Deferred revenue 1,036 101 (5)Long-term incentive compensation payout (6,378) — —Other long-term liabilities 351 353 (562)Net cash provided by operating activities 2,431 13,460 10,118Cash flows from investing activities: Business acquisition, net of cash acquired 19 (10,128) (3,669)Capital expenditures for property, equipment and software, net of disposal proceeds (10,398) (9,355) (5,887)Net cash used in investing activities (10,379) (19,483) (9,556)Cash flows from financing activities: Repayments of long-term debt (13,500) 66 —Payment of deferred loan costs (38) (155) —Proceeds from credit facility 21,500 10,000 3,600Payment of earnout liability related to business acquisitions (4,000) — —Repurchases of common stock (4,069) — (3,772)Restricted stock repurchased from employees for withholding taxes (1,281) (100) (218)Proceeds from option exercises 4,422 1,172 326Net cash provided by (used in) financing activities 3,034 10,983 (64)Effect of exchange rates on cash and cash equivalents 64 (1,860) 103Net (decrease) increase in cash and cash equivalents (4,850) 3,100 601Cash and cash equivalents at beginning of period 18,823 15,723 15,122Cash and cash equivalents at end of period $13,973 $18,823 $15,723 Supplemental disclosure of cash flow information: Cash paid during the period for interest $681 $434 $60Cash paid during the period for income taxes, net of refunds received $3,255 $2,929 $1,407 Noncash investing activities: Fair value of contingent consideration liabilities at the date of acquisition $— $5,954 $3,834Capital expenditures for property, equipment, and software not paid by year-end $1,954 $365 $203See accompanying Notes to Consolidated Financial Statements.43Table of ContentsPRGX GLOBAL, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION(a) Description of Business and Basis of PresentationDescription of BusinessThe principal business of PRGX Global, Inc. and subsidiaries is providing recovery audit services to large businesses and government agencies havingnumerous payment transactions. PRGX also provides services adjacent to recovery audit services, including supplier information management ("SIM"), datatransformation, spend analytics and associated advisory services, to a similar client base. These businesses include, but are not limited to:•retailers such as discount, department, specialty, grocery and drug stores, and wholesalers who sell to these retailers;•business enterprises other than retailers such as manufacturers, financial services firms, pharmaceutical companies, and resource companiessuch as oil and gas companies; and•federal and state government agencies.Except as otherwise indicated or unless the context otherwise requires, “PRGX,” “we,” “us,” “our” and the “Company” refer to PRGX Global, Inc. andits subsidiaries. PRGX currently provides services to clients in over 30 countries across a multitude of industries.Basis of PresentationDuring the fourth quarter of 2015 we discontinued the Healthcare Claims Recovery Audit ("HCRA") business. The results of our continuing anddiscontinued operations for the years ended December 31, 2018, 2017 and 2016 are presented in accordance with ASC 205-20, Presentation of FinancialStatements - Discontinued Operations.The consolidated financial statements include the financial statements of the Company and its wholly owned subsidiaries. All significant intercompanybalances and transactions have been eliminated in consolidation.Subsequent events have been considered, and the appropriate changes have been made to our financial statements as of December 31, 2018 as requiredunder U.S. generally accepted accounting principles (“GAAP”), through the date of filing this Annual Report on Form 10-K. Refer to Note 14 - SubsequentEvent for a description of the credit agreement we entered into with Bank of America, N.A. on March 14, 2019.Management of the Company has made a number of estimates and assumptions relating to the reporting of assets and liabilities and the disclosure ofcontingent assets and liabilities to prepare these consolidated financial statements in conformity with U.S. GAAP. Actual results could differ from thoseestimates.(b) Revenue Recognition, Billed and Unbilled Receivables, and Refund LiabilitiesRevenue Recognition, Billed and Unbilled ReceivablesThe Company has revised its accounting policy as it relates to the Financial Accounting Standards Board (“FASB”) issued Accounting StandardsUpdate (“ASU”) 2014-09, Revenue from Contracts with Customers, and the subsequent amendments and modifications thereto. The revised policy requiresthe Company to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the considerationto which the Company expects to be entitled in exchange for those goods or services. To adhere to this core principle, the Company applies the followingfive steps: (a) identify contract(s) with a customer; (b) identify the performance obligations in a contract; (c) determine the transaction price; (d) allocate thetransaction price to the performance obligations in a contract; and (e) recognize revenue when (or as) performance obligations are satisfied. The Companydetermines that the performance obligations have been satisfied when its customers obtain control of the goods or services as evidenced by the customer’sability to direct the use, or the ability to receive substantially all of the remaining economic benefit, of the contract assets. Additionally, for purposes ofdetermining the appropriate timing of recognition, revenue will be recognized over time or at a point in time based on an evaluation of the specific criteriathat is to be achieved to meet the performance obligations of each contract.The determination that the core principle for revenue recognition has been met, and the five steps have been applied appropriately, requires significantjudgment. Management considers the application of this judgment to be critical in determining the appropriate amount of revenue to be recognized. Themost critical judgments are required in the determination of the transaction price, the identification of the performance obligations within a contract, and thedetermination as to whether or not and to what44Table of ContentsPRGX GLOBAL, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)extent such performance obligations have been satisfied. A misapplication of this judgment could result in inappropriate recognition of revenue.Revenue is recognized over time, on an invoice basis for the Company's recovery audit contracts, which is approximately 96% of consolidated revenuefor the year ended December 31, 2018. The Company has adopted the Invoicing Expedient as provided for in FASB Accounting Standards Codification("ASC") Topic 606, which allows for the recognition of revenue for an amount that an entity has a right to invoice its customer. It is management’sconclusion that the Company's right to consideration from its customers corresponds directly to the value provided to customers from its performance to-date,as represented by billable recoveries. A recovery is billable when it is determined that the customer has received the economic benefit from the service(generally through credits taken against existing accounts payable due to, or refund checks received from, the customer’s vendors). The manner in which aclaim is recovered by a client often is dictated by industry practice. Many clients establish specific procedural guidelines that must be satisfied prior tosubmitting claims for client approval, and these guidelines are unique to each client.On occasion, it is possible that a transaction has met the core principle for revenue recognition, but the Company does not recognize revenue until thecustomary business practices and processes specific to that client have been completed. Historically, there has been a certain amount of recovery auditrevenue with respect to which, even though the Company has met the requirements of its revenue recognition policy, its clients’ vendors ultimately haverejected the claims underlying the revenue. In that case, the Company's clients may request a refund or offset of such amount even though the fees may havebeen previously collected. These refunds are accounted for as a variable consideration. The Company provides refund liabilities for these reductions in theeconomic value previously received by its clients with respect to vendor claims that have been identified and for which revenue has been previouslyrecognized. The Company computes an estimate of its refund liabilities at any given time based on actual historical refund data.Revenue is recognized over time for the Company's subscription services. Typically, implementation services, hosting services, unspecified upgrades,technical and support services, service level guarantees and subscription rights under contracts for subscription services are delivered concurrently and aretherefore considered a single performance obligation. Generally, revenue will be recognized ratably over the subscription term as this represents the timing ofwhen those services are transferred to the customer. The subscription term commences when the customer both has access to the software application and canbenefit from its use.Revenue is recognized at a point in time for certain services provided on a fixed fee basis and over time for certain services performed on a fee per unitof time-basis or other unit of performance. The revenue recognition method is determined based on the specific criteria that is to be achieved to meet theperformance obligations of each transaction within a contract.When a contract includes an option to acquire future goods or services that constitutes a material right to the customer, and those goods or services aresimilar to the original goods and services provided for in the contract, the Company has adopted the Practical Alternative as prescribed in ASC Topic 606 toestimate the standalone selling price of that option.Billed receivables are stated at the amount expected to be collected and do not bear interest. The Company makes ongoing estimates relating to thecollectability of billed receivables and maintains a reserve for estimated losses resulting from the inability of its clients to meet its financial obligations to theCompany. This reserve is primarily based on the level of past-due accounts based on the contractual terms of the receivables; the Company's history of write-offs; and its relationships with, and the economic status of, its clients.Unbilled receivables relate to claims for which the Company's customers have received economic value and for which they acknowledge that theunbilled receivable has been earned but has not yet been billed. The Company typically invoices the customer in the subsequent month.The Company includes unbilled receivables and refund liabilities in determining revenue.Contract assets will be recorded if a performance obligation is satisfied (and revenue recognized), but the Company is not entitled to payment untilother conditions as specified in the contract are met.Contract liabilities are recognized when consideration is received and the Company has not yet transferred the goods or services to the customer. TheCompany refers to this as deferred revenue.The Company derives a relatively small portion of revenue on a fee-for-service basis whereby billing is based upon a fixed fee, a fee per unit of time, ora fee per other unit of service. The Company recognizes revenue for these types of services when the core principles for revenue recognition have been met.Contract Balances45Table of ContentsPRGX GLOBAL, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)As of December 31, 2018 and December 31, 2017, we had the following balances (in thousands) included in our Consolidated Balance Sheets thatrelate to contracts with our clients. 12/31/201812/31/2017ChangeContract receivables from billed revenue$43,878$36,058$7,820Contract receivables from unbilled revenue2,9872,709278Deferred revenue(2,428)(1,431)(997)Refund liabilities6,4977,864(1,367)The increase in our contract receivables balance from billed revenues at December 31, 2018 compared to December 31, 2017 is mainly due to higherrevenue generated in the fourth quarter of fiscal year 2018 compared with the revenue generated in the fourth quarter of fiscal year 2017. This year-over-yearincrease in fourth quarter revenue is primarily due to higher revenue generated from our UK retail recovery audit business, as well as additional revenuecontributed from businesses acquired in fiscal years 2016 and 2017. We recognized revenue, net of refund liabilities of $171.8 million in fiscal year 2018 and$161.6 million in fiscal year 2017, an increase of $10.2 million, which included additional revenue of $2.9 million from our C&CA business acquired infiscal year 2017 and $0.3 million from our Lavante business acquired in fiscal year 2016.The increase in our contract receivables balance from unbilled revenues at December 31, 2018 compared to December 31, 2017, is mainly due to thetiming of revenue earned that was not yet billable to our clients that have scheduled billing arrangements as part of our contractual terms.The increase in our deferred revenue balance at December 31, 2018 compared to December 31, 2017 is mainly due to an increase in revenue generatedin fiscal year 2018 from our subscription services offerings for our SIM and PRGX OPTIX® solutions as a result of increased market acceptance of thoseproduct offerings in fiscal year 2018. We recognized $1.2 million in fiscal year 2018 that was included in deferred revenue as of December 31, 2017.The decrease in our refund liabilities balance at December 31, 2018 compared to December 31, 2017 is mainly due to the change in methodology usedto determine refund liabilities as of December 31, 2018 as described in the section entitled Refund Liabilities below.Disaggregation of RevenueWe depict revenue earned by country and by reporting segment in our Operating Segments and Related Information disclosure. Refer to Note 2 of theNotes to our Consolidated Financial Statements for further information pertaining to our disaggregation of revenue.Refund LiabilitiesRefund liabilities result from reductions in the economic value previously received by our clients with respect to vendor claims identified by us and forwhich we previously have recognized revenue. We compute the estimate of our refund liabilities at any given time based on actual historical refund data. Werecord periodic changes in refund liabilities as adjustments to revenue. We satisfy such refund liabilities either by offsets to amounts otherwise due fromclients or by cash refunds to clients.On an on-going basis, we evaluate our estimates and judgments, including those related to refund liabilities. We base our estimates and judgments onhistorical experience, information available prior to the issuance of the consolidated financial statements and on various other factors that we believe to bereasonable under the circumstances. This information forms the basis for our judgments about the carrying values of assets and liabilities that are not readilyapparent from other sources. Materially different results can occur as circumstances change and additional information becomes known, including changes inthose estimates not deemed “critical."An integral component of the methodology used to determine the refund liability includes applying a trendline to historical payback data extractedfrom our claims-tracking systems. As part of our on-going review of this process, we determined that a better correlation exists between the extracted datapoints and this trendline when the line takes the form of a cubic polynomial rather than our historical approach of a natural logarithm. As a result, effective inthe interim period ended46Table of ContentsPRGX GLOBAL, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)June 30, 2018, the Company refined its methodology to incorporate this new trendline for the estimation of refunds expected to occur in future periods.(c) Cash and Cash EquivalentsCash and cash equivalents include all cash balances and highly liquid investments with an initial maturity of three months or less from date ofpurchase. We place our temporary cash investments with high credit quality financial institutions. At times, certain investments may be in excess of theFederal Deposit Insurance Corporation (“FDIC”) insurance limit or otherwise may not be covered by FDIC insurance. Some of our cash and cash equivalentsare held at banks in jurisdictions outside the U.S. that have restrictions on transferring such assets outside of these countries on a temporary or permanentbasis. Such restricted net assets are not significant in comparison to our consolidated net assets.The $14.0 million in cash and cash equivalents as of December 31, 2018 includes $5.7 million held in the U.S., $1.2 million held in Canada, and $7.1million held in other foreign jurisdictions, primarily in the United Kingdom, India, and Australia. Our cash and cash equivalents included short-terminvestments of approximately $1.4 million as of December 31, 2018 and $1.9 million as of December 31, 2017, all of which were held at banks outside of theUnited States, primarily in Brazil and Canada.(d) Fair Value of Financial InstrumentsWe state cash equivalents at cost, which approximates fair market value. The carrying values for receivables from clients, unbilled receivables, accountspayable, deferred revenue and other accrued liabilities reasonably approximate fair market value due to the nature of the financial instrument and the short-term maturity of these items.We record bank debt, if any, as of the period end date based on the effective borrowing rate and repayment terms when originated. As of December 31,2018, we had $21.6 million in bank debt outstanding. As of December 31, 2017, we had $13.6 million in bank debt outstanding. We believe the carryingvalue of the bank debt approximates its fair value. We considered the factors used in determining the fair value of this debt to be Level 3 inputs (significantunobservable inputs).We had $4.2 million of business acquisition obligations as of December 31, 2018, and $8.9 million as of December 31, 2017. Our business acquisitionobligations represent the fair value of deferred consideration and earnout payments estimated to be due as of the date for which we recorded these amounts.We determine the preliminary estimated fair values based on our projections of future revenue and profits or other factors used in the calculation of theultimate payment to be made. The discount rate that we use to value the liability is based on specific business risk, cost of capital, and other factors. Weconsider these factors to be Level 3 inputs (significant unobservable inputs).We state certain assets at fair value on a nonrecurring basis as required by accounting principles generally accepted in the United States of America.Generally, these assets are recorded at fair value on a nonrecurring basis as a result of impairment charges.(e) Property and EquipmentWe report property and equipment at cost or estimated fair value at acquisition date and depreciate them over their estimated useful lives using thestraight-line method. Our useful lives for fixed assets are three years for computer laptops, four years for desktops, five years for IT server, storage and networkequipment, five years for furniture and fixtures and three years for purchased software. We amortize leasehold improvements using the straight-line methodover the shorter of the lease term or ten years. Depreciation expense from continuing operations was $7.4 million in 2018, $4.6 million in 2017 and $5.0million in 2016.We review the carrying value of property and equipment for impairment whenever events and circumstances indicate that the carrying value of an assetmay not be recoverable from the estimated future cash flows expected to result from its use and eventual disposition. In cases where undiscounted expectedfuture cash flows are less than the carrying value, we will recognize an impairment loss equal to the amount by which the carrying value exceeds the fairvalue of the asset. No impairment charges were necessary in the three years ended December 31, 2018.(f) Software Development CostsWe capitalize a portion of the costs we incur related to our internal development of software that we use in our operations and amortize these costs usingthe straight-line method over the expected useful lives of three to seven years.We also capitalize a portion of the costs we incur related to our internal development of software that we intend to market to others. We amortize thesecosts over the products’ estimated economic lives, which typically are three years, beginning when the underlying products are available for general releaseto clients. We review the carrying value of capitalized software development costs for impairment whenever events and circumstances indicate that thecarrying value of the asset may not be47Table of ContentsPRGX GLOBAL, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)recoverable from the estimated future cash flows expected to result from its use and eventual disposition. In cases where undiscounted expected future cashflows are less than the carrying value, we will recognize an impairment loss equal to the amount by which the carrying value exceeds the fair value of theasset.We consider software development activities to be research and development costs and expense them as incurred. However, we capitalize the costsincurred for the development of computer software that will be sold, leased, or otherwise marketed or that will be used in our operations beginning whentechnological feasibility has been established. We consider the costs associated with developing or replacing methodologies to be development costs.Development costs were approximately $8.3 million in 2018, $1.2 million in 2017 and $1.6 million in 2016.(g) Goodwill and Intangible AssetsGoodwill represents the excess of the purchase price over the estimated fair market value of net identifiable assets of acquired businesses. We evaluatethe recoverability of goodwill and other intangible assets in accordance with ASC 350, Intangibles—Goodwill and Other, in the fourth quarter of each yearor sooner if events or changes in circumstances indicate that the carrying amount may exceed its fair value. This evaluation includes a preliminary assessmentof qualitative factors to determine if it is necessary to perform a two-step impairment testing process. The first step identifies potential impairments bycomparing the fair value of the reporting unit with its carrying value, including goodwill. If the calculated fair value of a reporting unit exceeds the carryingvalue, goodwill is not impaired, and the second step is not necessary. If the carrying value of a reporting unit exceeds the fair value, the second stepcalculates the possible impairment loss by comparing the implied fair value of goodwill with the carrying value. If the fair value is less than the carryingvalue, we would record an impairment charge.We are not required to calculate the fair value of our reporting units that hold goodwill unless we determine that it is more likely than not that the fairvalue of these reporting units is less than their carrying values. In this analysis, we consider a number of factors, including changes in our legal, business andregulatory climates, changes in competition or key personnel, macroeconomic factors impacting our company or our clients, our recent financial performanceand expectations of future performance and other pertinent factors. Based on these analyses, we determined that it was not necessary for us to perform the two-step process. No impairment charges were necessary based on our internal assessments in the three years ended December 31, 2018.(h) Direct Expenses and Deferred CostsWe typically expense direct expenses that we incur during the course of recovery audit and delivery of Adjacent Services offerings as incurred. Forcertain implementation and set-up costs associated with our “fee for service” revenue that we earn over an extended period of time, we defer the related directand incremental costs and recognize them as expenses over the life of the underlying contract.(i) Income TaxesWe account for income taxes under the asset and liability method. We recognize deferred tax assets and liabilities for the future tax consequencesattributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating lossand tax credit carry forwards. We measure deferred tax assets and liabilities using enacted tax rates we expect to apply to taxable income in the years in whichwe expect to recover or settle those temporary differences. We recognize the effect on the deferred tax assets and liabilities of a change in tax rates in incomein the period that includes the enactment date.We reduce our deferred tax assets by a valuation allowance if it is more likely than not that some portion or all of a deferred tax asset will not berealized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which thosetemporary differences are deductible. In determining the amount of valuation allowance to record, we consider all available positive and negative evidenceaffecting specific deferred tax assets, including our past and anticipated future performance, the reversal of deferred tax liabilities, the length of carry-backand carry-forward periods and the implementation of tax planning strategies. Objective positive evidence is necessary to support a conclusion that avaluation allowance is not needed for all or a portion of deferred tax assets when significant negative evidence exists. Cumulative losses in recent years arethe most compelling form of negative evidence we considered in this determination.We apply a “more-likely-than-not” recognition threshold and measurement attribute for the financial statement recognition and measurement of a taxposition taken or expected to be taken in a tax return. We refer to GAAP for guidance on derecognition, classification, interest and penalties, accounting ininterim periods, disclosure, and transition. In accordance with FASB ASC 740, our policy for recording interest and penalties associated with tax positions isto record such items as a component of income before income taxes. A number of years may elapse before a particular tax position is audited and finallyresolved or when a tax assessment is raised. The number of years subject to tax assessments also varies by tax jurisdictions.48Table of ContentsPRGX GLOBAL, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)(j) Foreign CurrencyWe use the local currency as the functional currency in the majority of the countries in which we conduct business outside of the United States. Wetranslate the assets and liabilities denominated in foreign currencies into U.S. dollars at the current rates of exchange at the balance sheet date. We include thetranslation gains and losses as a separate component of shareholders’ equity and in the determination of comprehensive income (loss). We translate revenueand expenses in foreign currencies at the weighted average exchange rates for the period. We separately state the foreign currency transaction gains andlosses on short-term intercompany balances in the Consolidated Statements of Operations. We include all other realized and unrealized foreign currencytransaction gains (losses) in “Selling, general and administrative expenses.”(k) Earnings (Loss) Per Common ShareWe compute basic earnings (loss) per common share by dividing net income (loss) available to common shareholders by the weighted-average numberof shares of common stock outstanding during the period. We compute diluted earnings (loss) per common share by dividing net income (loss) available tocommon shareholders by the sum of (1) the weighted-average number of shares of common stock outstanding during the period, (2) the dilutive effect of theassumed exercise of stock options using the treasury stock method, and (3) the dilutive effect of other potentially dilutive securities. We exclude thepotential dilutive effect of stock options and convertible instruments from the determination of diluted earnings (loss) per common share if the effect ofincluding them would be antidilutive.(l) Stock-Based CompensationWe account for awards of equity instruments issued to employees and directors under the fair value method of accounting and recognize such amountsin our Consolidated Statements of Operations. We measure compensation expense for time-based all stock-based awards at fair value on the date of grant andrecognize compensation expense, less actual forfeitures, in our Consolidated Statements of Operations using the straight-line method over the service periodover which we expect the awards to vest. We recognize compensation expense for awards with performance conditions based on the probable outcome of theperformance conditions. We accrue compensation expense if we believe it is probable that the performance condition(s) will be achieved and do not accruecompensation expense if we believe it is not probable that the performance condition(s) will be achieved. In the event that it becomes probable thatperformance condition(s) will no longer be achieved, we reverse all of the previously recognized compensation expense in the period such a determination ismade.We estimate the fair value of all time-vested options as of the date of grant using the Black-Scholes option valuation model, which was developed foruse in estimating the fair value of traded options that have no vesting restrictions and are fully transferable. Option valuation models require the input ofhighly subjective assumptions, including the expected stock price volatility, which we calculate based on the historical volatility of our common stock. Weuse a risk-free interest rate, based on the U.S. Treasury instruments in effect at the time of the grant, for the period comparable to the expected term of theoption. We use the “simplified” method in estimating the expected term of options as we have concluded that our historical share option exercise experienceis a less than reasonable basis upon which to estimate the expected term for our grants.We estimate the fair value of nonvested stock awards (restricted stock and restricted stock units) as being equal to the market value of the common stockon the date of the award. We classify our share-based payments as either liability-classified awards or as equity-classified awards. We remeasure liability-classified awards to fair value at each balance sheet date until the award is settled. We measure equity-classified awards at their grant date fair value and donot subsequently remeasure them. We have classified our share-based payments which are settled in our common stock as equity-classified awards and ourshare-based payments that are settled in cash as liability-classified awards. Compensation expense related to equity-classified awards generally are equal tothe fair value of the award at grant-date amortized over the vesting period of the award. The liability for liability-classified awards generally is equal to thefair value of the award as of the balance sheet date multiplied by the percentage vested at the time. We record the change in the liability amount from onebalance sheet date to another to compensation expense.(m) Comprehensive Income (Loss) and Accumulated Other Comprehensive IncomeConsolidated comprehensive income (loss) consists of consolidated net income (loss) and foreign currency translation adjustments. We present thecalculation of consolidated comprehensive income (loss) in the accompanying Consolidated Statements of Comprehensive Income (Loss). No amounts havebeen reclassified out of Accumulated Other Comprehensive Income during the periods presented in our consolidated financial statements.(n) Segment ReportingWe report our operating segment information in three segments: Recovery Audit Services – Americas; Recovery Audit Services – Europe/Asia-Pacificand Adjacent Services. We include the unallocated portion of corporate selling, general and administrative expenses not specifically attributable to our threeoperating segments in Corporate Support. Our business49Table of ContentsPRGX GLOBAL, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)segments reflect the internal reporting that our Chief Executive Officer, who is our chief operating decision maker, uses for the purpose of making decisionsabout allocating resources and assessing performance. Our management, including our Chief Executive Officer, uses what we internally refer to as “AdjustedEBITDA” as the primary measure of profit or loss for purposes of assessing the operating performance of all operating segments. We define Adjusted EBITDAas earnings from continuing operations before interest, taxes, depreciation and amortization (“EBITDA”) as adjusted for unusual and other significant itemsthat management views as distorting the operating results of the various segments from period to period.EBITDA and Adjusted EBITDA are not financial measures determined in accordance with GAAP. Such non-GAAP financial measures do not measurethe profit or loss of the reportable segments in accordance with GAAP. Given that we use Adjusted EBITDA as our primary measure of segment performance,GAAP rules on segment reporting require that we include this non-GAAP measure in our discussion of our operating segments. We also must reconcileAdjusted EBITDA to our operating results presented on a GAAP basis. We provide this reconciliation in Note 2 to these consolidated financial statementsalong with other information about our reportable segments. We do not intend the reconciling items to be, nor should they be, interpreted as non-recurring orextraordinary, or in any manner be deemed as adjustments made in accordance with GAAP. Because Adjusted EBITDA is not a financial measure determinedin accordance with GAAP, it may not be comparable to other similarly titled measures of other companies.(o) Loss ContingenciesCertain conditions may exist as of the date the financial statements are issued that may result in a loss to the Company, but which will only bedetermined and resolved when one or more future events occur or fail to occur. The Company’s management and its legal counsel assess such contingentliabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pendingagainst the Company or unasserted claims that may result in such proceedings, the Company’s legal counsel evaluates the perceived merits of any legalproceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.If the assessment of a contingency indicates that it is probable that a material loss is likely to occur and the amount of the liability can be estimated,then the estimated liability is accrued in the Company’s financial statements. If the assessment indicates that a potentially material loss contingency is notprobable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the rangeof possible loss if determinable and material, would be disclosed.Loss contingencies considered remote are generally not accrued or disclosed unless they involve guarantees, in which case the nature of the guaranteewould be disclosed. Legal costs relating to loss contingencies are expensed as incurred.(p) Reclassification of Prior Year Balance SheetCertain reclassifications have been made in the prior year in order to conform to the current year presentation.(q) Impact of Recently Issued Accounting StandardsA summary of the recently issued accounting standards issued by the Financial Accounting Standards Board (“FASB”) and included in the AccountingStandards Codification (“ASC”) that apply to us is set forth below.Adopted by the Company in Fiscal Year 2018FASB ASC Update No. 2014-09 - In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), as later amended,which resulted in a new accounting standard Revenue from Contracts with Customers (Topic 606), which supersedes the revenue recognition requirements inASC 605, Revenue Recognition. The new revenue recognition standard requires entities to recognize revenue in a way that depicts the transfer of promisedgoods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.ASU 2014-09 has replaced most existing revenue recognition guidance within GAAP. The new standard became effective for the Company on January 1,2018 and was adopted by the Company on that date. The adoption of this standard did not have a material impact on the Company’s consolidated financialstatements utilizing the modified retrospective approach.FASB ASU No. 2018-07 - In June 2018, the FASB issued ASU 2018-07, Compensation-Stock Compensation (Topic 718)-Improvements to NonemployeeShare-Based Payment Accounting, which expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services fromnon-employees. The Company has elected early adoption of this standard, which is permitted, and adopted this standard on September 30, 2018. Theadoption of this standard did not have a material impact on the Company's consolidated financial statements.50Table of ContentsPRGX GLOBAL, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)FASB ASU No. 2018-03 - In February 2018, the FASB issued ASU No. 2018-03, Technical Corrections and Improvements to Financial Instruments-Overall (Subtopic 825-10), which clarified certain aspects of the previously issued ASU 2016-01 issued in January 2016. This standard updates ASUguidance on the classification and measurement of financial instruments, including significant revisions in accounting related to the classification andmeasurement of investments in equity securities and presentation of certain fair value changes for financial liabilities when the fair value option is elected.This ASU requires equity securities to be measured at fair value with changes in fair value recognized through net earnings and amends certain disclosurerequirements associated with the fair value of financial instruments. In the period of adoption, the Company is required to reclassify the unrealizedgains/losses on equity securities within accumulated other comprehensive income (loss) to retained earnings. This standard became effective for theCompany on September 30, 2018 and was adopted by the Company on that date. The adoption of this standard did not have a material impact on theCompany's consolidated financial statements.Accounting Standards Not Yet AdoptedFASB ASU 2018-13 - In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820)): Disclosure Framework—Changes to theDisclosure Requirements for Fair Value Measurement, which modifies the disclosure requirements on fair value measurements. The new guidance is effectivefor fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Upon the effective date, certain provisions are to be appliedprospectively, while others are to be applied retrospectively to all periods presented. An entity is permitted to early adopt any removed or modifieddisclosures upon issuance of this ASU and delay adoption of the additional disclosures until their effective date. We are currently evaluating the effect of thisstandard on our consolidated financial statement disclosures. Since this standard affects disclosure requirements only, it is not expected to have an impact onthe Company's consolidated financial statements.FASB ASU No. 2016-02 - In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). This standard requires the recognition of lease assetsand lease liabilities by lessees for those leases classified as operating leases. Leases will be classified as either finance or operating, with classificationaffecting the pattern of expense recognition. The standard is effective for the first interim period within annual periods beginning after December 15, 2018,which will be January 1, 2019, for the Company. The standard is required to be adopted using a modified retrospective approach. The Company has appliedthe provisions of the new leasing standard at the effective date (January 1, 2019) rather than at the beginning of the earliest period presented under thetransition method provided, and will recognize a cumulative-effect adjustment to the opening balance sheet on that date. The Company has made a policydecision to include all payments as lease payments for each category of listed assets with the exception of computer equipment. Computer equipment will bebifurcated between the lease payment and the contracted maintenance payment. This standard will become effective in the first quarter of 2019.The Company has implemented a third-party supported software solution to manage and account for leases under the new standard. The Company hasalso established a new lease accounting process and has designed new internal controls for that process. The Company plans on electing the package ofpractical expedients to not reassess prior conclusions related to contracts containing leases, lease classification and initial direct costs. The Company doesnot plan to elect the practical expedient to use hindsight in determining the lease term and in assessing impairment of right-of-use assets. The Companyexpects the adoption of this standard to increase lease assets and lease liabilities by approximately $13 million. The adoption of this standard is not expectedto have a material impact on the Company's net income or its cash flow.(2) OPERATING SEGMENTS AND RELATED INFORMATIONWe conduct our operations through three reportable segments:Recovery Audit Services – Americas represents recovery audit services (other than HCRA services) provided in the United States of America (“U.S.”),Canada and Latin America.Recovery Audit Services – Europe/Asia-Pacific represents recovery audit services provided in Europe, Asia and the Pacific region.Adjacent Services represents data transformation, spend analytics, PRGX OPTIX and SIM services, and associated advisory services.We include the unallocated portion of corporate selling, general and administrative expenses not specifically attributable to the three reportablesegments in Corporate Support.Discontinued Operations - In the fourth quarter of 2015, PRGX entered into agreements with third parties to fulfill its Medicare recovery auditcontractor ("RAC") program subcontract obligations to audit Medicare payments and provide support for claims appeals and assigned its remaining Medicaidcontract to another party. One of the third-party Medicare RAC-related contracts has been settled and the results are reflected in these financial statements.The Company will continue to incur certain51Table of ContentsPRGX GLOBAL, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)expenses until the remaining Medicare RAC contracts are concluded. As part of discontinuing the HCRA business, the Company has an accrual foroutstanding Medicare RAC appeals of approximately $2.0 million and a receivable of approximately $1.7 million for unpaid claims as of December 31,2018. The HCRA services business has been reported as Discontinued Operations in accordance with US GAAP. One of the third-party contracts have beensettled and the results are reflected in these financial statements.Discontinued operations information for the years ended December 31, 2018, 2017 and 2016 (in thousands) is as follows: Results of Discontinued Operations(in thousands)Years Ended December 31, 201820172016Revenue, net of refund liability$959$—$(14)Cost of sales (adjustments)(300)1,3501,112Selling, general and administrative expense1614184Depreciation of property, equipment and software assets1814Pretax income (loss) from discontinued operations before income taxes1,242(1,372)(1,324)Income tax expense———Net income (loss) from discontinued operations$1,242$(1,372)$(1,324)The following table presents the discontinued operations of the HCRA services business in the Consolidated Statements of Cash Flows, for the yearsended December 31, 2018, 2017 and 2016 (in thousands): Years Ended December 31, 2018 2017 2016Net cash used in operating activities$(1,484) $(1,364) $(1,309)Net cash used in investing activities— — —Net cash provided by financing activities— — —Increase (decrease) in cash and cash equivalents$(1,484) $(1,364) $(1,309)We evaluate the performance of our reportable segments based upon revenue and measures of profit or loss we refer to as EBITDA and AdjustedEBITDA. We define Adjusted EBITDA as earnings before interest and taxes (“EBIT”), adjusted for depreciation and amortization (“EBITDA”), and thenfurther adjusted for unusual and other significant items that management views as distorting the operating results of the various segments from period toperiod. Such adjustments include restructuring charges, stock-based compensation, bargain purchase gains, acquisition-related charges and benefits(acquisition transaction costs, acquisition obligations classified as compensation, and fair value adjustments to acquisition-related contingent consideration),tangible and intangible asset impairment charges, certain litigation costs and litigation settlements, certain severance charges and foreign currencytransaction gains and losses on short-term intercompany balances viewed by management as individually or collectively significant. We do not have anyinter-segment revenue.52Table of ContentsPRGX GLOBAL, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)Segment information for the years ended December 31, 2018, 2017 and 2016 (in thousands) is as follows: RecoveryAuditServices –Americas Recovery AuditServices –Europe/Asia-Pacific AdjacentServices CorporateSupport Total2018 Revenue, net of refund liabilities $115,920 $49,526 $6,330 $— $171,776 Net income from continuing operations $3,351Income tax expense 1,321Interest expense, net 1,663EBIT $26,602 $12,413 $(5,231) $(27,449) 6,335Depreciation of property, equipment and software assets 5,545 683 1,142 — 7,370Amortization of intangible assets 1,664 172 1,559 — 3,395EBITDA 33,811 13,268 (2,530) (27,449) 17,100Foreign currency transaction losses (gains) on short-termintercompany balances 367 1,044 14 (423) 1,002Acquisition-related adjustments (income) loss — — — (1,628) (1,628)Transformation and severance expenses 944 1,194 66 918 3,122Other (income) loss (4) 8 — 17 21Stock-based compensation — — — 5,056 5,056Adjusted EBITDA $35,118 $15,514 $(2,450) $(23,509) $24,673 Capital expenditures $2,050 $1,200 $257 $6,891 $10,398 Allocated assets $71,211 $26,147 $7,294 $— $104,652 Unallocated assets: Cash and cash equivalents — — — 13,973 13,973Restricted cash — — — 46 46Deferred income taxes — — — 3,561 3,561Prepaid expenses and other assets — — — 910 910Discontinued operations — — — 1,687 1,687Total assets $71,211 $26,147 $7,294 $20,177 $124,82953Table of ContentsPRGX GLOBAL, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) RecoveryAuditServices –Americas Recovery AuditServices –Europe/Asia-Pacific AdjacentServices CorporateSupport Total2017 Revenue, net of refund liabilities $113,122 $44,372 $4,126 $— $161,620 Net income from continuing operations $4,556Income tax expense 2,962Interest expense, net 1,539EBIT $29,163 $11,700 $(7,942) $(23,864) 9,057Depreciation of property, equipment and software assets 3,165 599 805 — 4,569Amortization of intangible assets 1,919 142 1,573 — 3,634EBITDA 34,247 12,441 (5,564) (23,864) 17,260Foreign currency transaction (gains) losses on short-termintercompany balances (249) (1,769) (9) (163) (2,190)Acquisition-related adjustments (income) loss — — — (2,283) (2,283)Transformation and severance expenses 313 655 320 378 1,666Other (income) loss 751 184 (195) (900) (160)Stock-based compensation — — — 7,052 7,052Adjusted EBITDA $35,062 $11,511 $(5,448) $(19,780) $21,345 Capital expenditures $2,389 $2,383 $1,335 $3,248 $9,355 Allocated assets $65,397 $22,474 $9,486 $— $97,357 Unallocated assets: Cash and cash equivalents — — — 18,823 18,823Restricted cash — — — 51 51Deferred loan costs — — — — —Deferred income taxes — — — 1,538 1,538Prepaid expenses and other assets $— $— $— 910 910Discontinued operations $— $— $— $1,539 $1,539Total assets $65,397 $22,474 $9,486 $22,861 $120,21854Table of ContentsPRGX GLOBAL, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) RecoveryAuditServices –Americas Recovery AuditServices –Europe/Asia-Pacific AdjacentServices CorporateSupport Total2016 Revenue, net of refund liabilities $99,861 $37,335 $3,648 $— $140,844 Net income from continuing operations $2,229Income tax expense 1,242Interest income, net (153)EBIT $25,476 $6,455 $(4,617) $(23,996) 3,318Depreciation of property, equipment and software assets 3,750 529 754 — 5,033Amortization of intangible assets 1,477 — 355 — 1,832EBITDA 30,703 6,984 (3,508) (23,996) 10,183Foreign currency transaction losses (gains) on short-termintercompany balances 31 107 17 (71) 84Transformation and severance expenses 517 312 258 242 1,329Other income — — (121) — (121)Stock-based compensation — — — 5,123 5,123Adjusted EBITDA $31,251 $7,403 $(3,354) $(18,702) $16,598 Capital expenditures $4,393 $600 $894 $— $5,887 Allocated assets $47,690 $14,813 $10,532 $— $73,035 Unallocated assets: Cash and cash equivalents — — — 15,723 15,723Restricted cash — — — 47 47Deferred income taxes — — — 2,269 2,269Prepaid expenses and other assets — — — 800 800Discontinued operations 1,600 1,600Total assets $47,690 $14,813 $10,532 $20,439 $93,47455Table of ContentsPRGX GLOBAL, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)The following table presents revenue by country based on the location of clients served (in thousands): Years Ended December 31, 2018 2017 2016United States $100,458 $93,447 $80,857United Kingdom 27,774 23,408 17,501Canada 14,700 14,375 14,531Australia 8,397 8,732 7,354France 6,721 5,987 6,934Mexico 3,793 5,385 4,900Brazil 1,799 2,053 1,169Spain 1,443 1,127 964Hong Kong 1,219 889 824Thailand 1,094 699 654Ireland 741 929 337Colombia 465 709 583New Zealand 338 899 979Other 2,834 2,981 3,257 $171,776 $161,620 $140,844The following table presents long-lived assets by country based on the location of the asset (in thousands): December 31, 2018 2017United States $34,236 $47,371UK 2,909 5,510All Other 395 1,125 $37,540 $54,006One client, The Kroger Co., accounted for approximately 12% of revenue from continuing operations in 2018 and 2017, and approximately 11% ofrevenue from continuing operations in 2016.(3) EARNINGS (LOSS) PER COMMON SHAREThe following tables set forth the computations of basic and diluted earnings (loss) per common share (in thousands, except per share data): Years Ended December 31,Basic earnings (loss) per common share: 2018 2017 2016Numerator: Net income from continuing operations $3,351$4,556 $2,229Net income (loss) from discontinued operations $1,242 $(1,372) $(1,324) Denominator: Weighted-average common shares outstanding 22,811 21,937 21,969 Basic earnings per common share from continuing operations $0.14 $0.21 $0.10Basic earnings (loss) per common share from discontinued operations $0.06 $(0.06) $(0.06)56Table of ContentsPRGX GLOBAL, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) Years Ended December 31,Diluted earnings (loss) per common share: 2018 2017 2016Numerator: Net income from continuing operations $3,351 $4,556 $2,229Net income (loss) from discontinued operations $1,242 $(1,372) $(1,324) Denominator: Weighted-average common shares outstanding 22,811 21,937 21,969 Effect of dilutive securities from stock-based compensation plans 623 174 47Denominator for diluted earnings per common share 23,434 22,111 22,016 Diluted earnings per common share from continuing operations $0.14 $0.21 $0.10Diluted earnings (loss) per common share from discontinued operations $0.06 $(0.06) $(0.06)Weighted-average shares outstanding excludes antidilutive shares underlying options that totaled 0.9 million, 2.3 million, and 2.9 million shares,respectively, from the computation of diluted earnings per common share for the years ended December 31, 2018, 2017, and 2016.57Table of ContentsPRGX GLOBAL, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)(4) GOODWILL AND INTANGIBLE ASSETS(a) GoodwillWe evaluate the recoverability of goodwill in the fourth quarter of each year or sooner if events or changes in circumstances indicate that the carryingamount may exceed its fair value. These analyses did not result in an impairment charge during the periods presented.Goodwill by reportable segments during 2018 and 2017 was as follows (in thousands): RecoveryAuditServices –Americas Recovery AuditServices –Europe/Asia-Pacific AdjacentServices TotalBalance, January 1, 2017 $10,755 $680 $2,388 $13,823Goodwill recorded in connection with business combinations 2,685 869 140 3,694Foreign currency translation — 131 — 131Balance, December 31, 2017 13,440 1,680 2,528 17,648Goodwill recorded in connection with business combinations (20) — — (20)Foreign currency translation — (97) — (97)Balance, December 31, 2018 $13,420 $1,583 $2,528 $17,531During 2017, we recorded goodwill of $3.6 million in our Recovery Audit Services - Americas and Recovery Audit Services - Europe/Asia-Pacificsegments in conjunction with the acquisition of Cost & Compliance Associates, LLC and Cost & Compliance Associates Limited respectively, (collectively"C&CA") on February 23, 2017. C&CA is a commercial recovery audit and contract compliance firm with operations in the U.S. and the UK (refer to Note 12below).(b) Intangible AssetsIntangible assets consist principally of amounts we have assigned to customer relationships, trademarks, non-compete agreements and trade names inconjunction with business acquisitions. Certain of our intangible assets associated with acquisitions of assets or businesses by our foreign subsidiaries aredenominated in the local currency of such subsidiary and therefore are subject to foreign currency ("FX") adjustments. We present the amounts for thesetransactions in United States dollars utilizing foreign currency exchange rates as of the respective balance sheet dates.Amortization expense relating to intangible assets was $3.4 million in 2018, $3.6 million in 2017 and $1.8 million in 2016. As of December 31, 2018and based on our current amortization methods and current levels of intangible assets, we project amortization expense relating to intangible assets for thenext five years will be $3.5 million in 2019, $3.1 million in 2020, $1.7 million in 2021, $0.7 million in 2022 and $0.7 million in 2023. We use acceleratedamortization methods for customer relationships and trade names, and straight-line amortization for non-compete agreements and trademarks.58Table of ContentsPRGX GLOBAL, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)Changes in noncurrent intangible assets during 2018 and 2017 were as follows (in thousands): CustomerRelationships Trademarks Non-competeAgreements Software TradeNames TotalGross carrying amount: Balance, January 1, 2017 $36,573 $853 $1,322 $6,178 $2,200 $47,126Acquisition of C&CA Assets 9,556 135 1,232 — — 10,923FX adjustments and other 777 38 75 — — 890Balance, December 31, 2017 46,906 1,026 2,629 6,178 2,200 58,939FX adjustments and other (547) 138 (51) (164) — (624)Balance, December 31, 2018 $46,359 $1,164 $2,578 $6,014 $2,200 $58,315Accumulated amortization: Balance, January 1, 2017 $(31,481) $(853) $(1,322) $(272) $(2,200) $(36,128)Amortization expense (1,796) (22) (204) (1,612) — (3,634)FX adjustments and other (585) (38) (76) — — (699)Balance, December 31, 2017 (33,862) (913) (1,602) (1,884) (2,200) (40,461)Amortization expense (1,607) (67) (246) (1,475) — (3,395)FX adjustments and other 409 (22) 51 48 — 486Balance, December 31, 2018 $(35,060) $(1,002) $(1,797) $(3,311) $(2,200) $(43,370)Net carrying amount: Balance, December 31, 2017 $13,044 $113 $1,027 $4,294 $— $18,478Balance, December 31, 2018 $11,299 $162 $781 $2,703 $— $14,945Estimated useful life (years) 10-15 years 4-5 years 5 years 4 years 4-5 years (5) DEBTDebt issuance costs on the balance sheet are presented as a direct deduction from the related debt liability, rather than represented as a separate asset.Long-term debt as of December 31, 2018 and 2017 consists of the following (in thousands): As of December 31 2018 2017 Gross DFC (1) Net Gross DFC NetRevolving Facility$21,600 $(65) $21,535 $13,600 $(131) $13,469Capital lease obligations66 — 66 105 — 105Total long term debt21,666 (65) 21,601 13,705 (131) 13,574Less: Current portion of long-termdebt48 — 48 48 — 48Long-term debt, excluding currentportion$21,618 $(65) $21,553 $13,657 $(131) $13,526(1)DFC refers to deferred financing costs related to the Company's long-term debt.On January 19, 2010, we entered into a four-year revolving credit and term loan agreement with SunTrust Bank (“SunTrust”). The SunTrust creditfacility initially consisted of a $15.0 million committed revolving credit facility and a $15.0 million term loan. The SunTrust credit facility was guaranteedby the Company and its domestic subsidiaries and was secured by substantially all of our assets.The SunTrust credit facility has been modified from time to time through various amendments since January 2010. Included in these amendments wasthe refinancing of the committed credit facility in 2014, and clarification of certain59Table of ContentsPRGX GLOBAL, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)definitions and other terms of the facility in 2016. The refinancing resulted in an extended maturity date of December 23, 2017, as well as a lower interestrate. Pursuant to the December 2014 amendment, the credit facility would bear interest at a rate per annum comprised of a specified index rate based on one-month LIBOR, plus an applicable margin (1.75% per annum). The index rate was determined as of the first business day of each calendar month. PRGX wasrequired to pay a commitment fee, payable quarterly, on the unused portion of the credit facility.On May 4, 2017, we entered into an amendment of the SunTrust credit facility, that, among other things, (i) increased the aggregate principal amount ofthe committed revolving credit facility from $20.0 million to $35.0 million through December 31, 2018, which was reduced to $30.0 million thereafter, (ii)extended the maturity date of the credit facility to December 31, 2019, (iii) added customary provisions to reflect European Union “bail-in” directivecompliance language, and (iv) modified the financial covenants applicable to the Company during the remaining term of the credit facility by (A) revisingthe maximum leverage ratio and minimum fixed charge coverage ratio and (B) adding an additional financial covenant requiring the Company to maintain aminimum amount of consolidated adjusted EBITDA. In addition, the applicable margin used to determine the interest rate per annum on outstandingborrowings under the credit facility, and the ongoing commitment fee payable on the unused portion of the revolving credit facility commitment, both ofwhich previously had been fixed percentages per annum, were amended and to both vary based upon our quarterly leverage ratio calculation under theSunTrust credit facility. The applicable margin per annum on interest accruing on all borrowings under the credit facility outstanding on or after May 4,2017, and the applicable percentage per annum commitment fee accruing on and after that date, respectively were determined as follows:PricingLevelLeverage RatioApplicable Margin forLIBOR Index Rate LoansApplicable Margin forBase Rate LoansApplicable Percentage forCommitment FeeILess than 1.25:1.002.25% per annum1.25% per annum0.250% per annumIIGreater than or equal to1.25:1.00 but less than1.75:1.002.50% per annum1.50% per annum0.375% per annumIIIGreater than or equal to1.75:1.002.75% per annum1.75% per annum0.375% per annumOn March 21, 2018, the SunTrust credit facility was amended with respect to the calculation of consolidated adjusted EBITDA for financial covenantcompliance. The debt covenant calculation was modified to include the cash component of stock-based compensation for 2017.On September 28, 2018, the SunTrust credit facility was amended in order to expand the types of stock the Company could purchase as well as adjustthe fixed coverage charge ratio. Under the amended terms, the Company could make restricted payments to purchase capital stock (other than disqualifiedstock). The fixed charge coverage ratio was reduced from 1.25 to 1.00 for the quarter ending September 30, 2018.On November 5, 2018, the SunTrust credit facility was amended to add, as an additional financial condition to the Company's ability to make certainrestricted payments, a requirement that the Company have an aggregate "minimum liquidity" of $5.0 million immediately prior to and immediately aftergiving effect to any restricted payment, with "minimum liquidity" being defined as 100% of all unrestricted domestic cash holdings, 70% of unrestrictedforeign cash holdings, and the unused availability under the SunTrust credit facility. In addition, the calculation of the fixed charge coverage ratio wasrevised to exclude the following fixed charges: (i) the $4.0 million earnout payment made in the second quarter of 2018 in connection with a prioracquisition by the Company and (ii) up to $5.0 million (in the aggregate) of restricted payments consisting of redemption, purchases or repurchases of capitalstock in the fourth quarter of 2018 and the first quarter of 2019.As of December 31, 2018 there was $21.6 million in debt outstanding under the SunTrust credit facility that would be due December 31, 2019. Theamount available for additional borrowing under the SunTrust credit facility was $13.4 million as of December 31, 2018. Based on the terms of the creditfacility, as amended, the applicable interest rate at December 31, 2018 was approximately 4.60%. As of December 31, 2018, the Company was required to paya commitment fee of 0.25% per annum, payable quarterly, on the unused portion of the revolving SunTrust credit facility.The SunTrust credit facility included customary affirmative, negative, and financial covenants binding on the Company, including delivery offinancial statements and other reports, conduct of business, and transactions with affiliates. The negative covenants limited the ability of the Company,among other things, to incur debt, incur liens, make investments, sell assets or declare or pay dividends on its capital stock. The financial covenants includedin the credit facility set forth maximum leverage and minimum fixed charge coverage ratios and require maintenance of a minimum amount of consolidatedadjusted earnings before interest, taxes, depreciation and amortization. In addition, the credit facility included customary events of default. The Companywas in compliance with the covenants in the SunTrust credit facility as of December 31, 2018.60Table of ContentsPRGX GLOBAL, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)On March 14, 2019, we entered into a credit agreement with Bank of America, N.A. Refer to Note 14 - Subsequent Event of the notes to the Company'sconsolidated financial statements for a description of the credit agreement with Bank of America, N.A.Future CommitmentsThe following is a summary of the combined principal maturities of all long-term debt and principal payments to be made under the Company’scapital lease agreements for each of the fiscal years presented in the table below (in thousands):Year Ended December 31 2019 $21,6612020 5Total $21,666(6) LEASE COMMITMENTSPRGX is committed under noncancelable lease arrangements for facilities and equipment. Rent expense, excluding costs associated with thetermination of noncancelable lease arrangements, was $4.9 million in 2018, $5.1 million in 2017 and $3.9 million in 2016.In January 2014, we amended the lease for our principal executive offices to extend the term through December 31, 2021, reduce the lease payment for2014, and reduce the space under lease from approximately 132,000 square feet to approximately 58,000 square feet effective January 1, 2015. Starting inFebruary 2016 we subleased approximately 3,000 square feet.We have entered into several operating lease agreements that contain provisions for future rent increases, free rent periods or periods in which rentpayments are reduced (abated). We charge the total amount of rental payments due over the lease term to rent expense on the straight-line, undiscountedmethod over the lease terms.Future minimum lease payments under noncancelable operating leases including the amended lease for our principal executive offices, are as follows(in thousands):Year Ending December 31,GrossSublease IncomeAmount2019$4,974$(72)$4,90220203,882(74)3,80820213,248(77)3,17120221,168—1,1682023488—488Total payments$13,760$(223)$13,537(7) INCOME TAXESIncome (loss) before income taxes from continuing operations relate to the following jurisdictions (in thousands): Years Ended December 31, 2018 2017 2016United States $(4,673) $(6,502) $(5,306)Foreign 9,345 14,020 8,777 $4,672 $7,518 $3,47161Table of ContentsPRGX GLOBAL, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)The provision for income taxes for continuing operations consists of the following (in thousands): Years Ended December 31, 2018 2017 2016Current: Federal $— $— $—State 70 1 —Foreign 2,920 2,230 2,103 2,990 2,231 2,103Deferred: Federal (145) (155) —State — — —Foreign (1,524) 886 (861) (1,669) 731 (861)Total $1,321 $2,962 $1,24262Table of ContentsPRGX GLOBAL, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)The significant differences between the U.S. federal statutory tax rate and the Company’s effective income tax expense for earnings (in thousands) are asfollows: Years Ended December 31, 2018 2017 2016Statutory federal income tax rate $981 $2,631 $1,180State income taxes, net of federal effect (285) (62) (173)Net operating loss limitation — 2,975 —Adjustment to deferred taxes 939 301 (4,103)Change in deferred tax asset valuation allowance (2,867) (15,338) 4,877Change in tax law (992) 13,850 —Foreign tax rate differential 1,306 (899) (1,153)Compensation and equity adjustments 1,474 — 113Acquisition earnout adjustment (320) 87 60Other permanent differences 183 (682) —Withholding taxes 591 342 441Changes in uncertain tax positions 19 (429) —Return to provision adjustments 257 155 —Other, net 35 31 —Total $1,321 $2,962 $1,242The tax effects of temporary differences and carry-forwards that give rise to deferred tax assets and liabilities consist of the following (in thousands): Years Ended December 31, 2018 2017Deferred income tax assets: Accounts payable and accrued expenses $714 $1,215Accrued payroll and related expenses 2,315 1,691Stock-based compensation expense 2,336 3,508Depreciation of property and equipment 853 1,711Capitalized software 119 —Unbilled receivables and refund liabilities 97 1,811Operating loss carry-forwards of foreign subsidiary 9,484 11,000Federal operating loss carry-forwards 17,109 17,161State operating loss carry-forwards 4,537 3,591Other 1,624 376Gross deferred tax assets 39,188 42,064Less valuation allowance 31,597 34,776Gross deferred tax assets net of valuation allowance 7,591 7,288Deferred income tax liabilities: Intangible assets 1,269 1,987Capitalized software — 29Other 3,427 3,734Gross deferred tax liabilities 4,696 5,750Net deferred tax assets $2,895 $1,53863Table of ContentsPRGX GLOBAL, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)Our reported effective tax rates on income approximated 28.3% in 2018, 39.4% in 2017, and 35.8% in 2016. Reported income tax expense in each yearprimarily results from taxes on the income of foreign subsidiaries. The effective tax rates generally differ from the expected tax rate primarily due to theCompany’s deferred tax asset valuation allowance on the domestic earnings and taxes on income of foreign subsidiaries.On December 22, 2017, the Tax Cuts and Jobs Act (the "Tax Act") was signed into law making significant changes to the Internal Revenue Code. Thenew legislation contains several key provisions that impact the consolidated financial statements for the year ended December 31, 2017. Additionally, inDecember 2017, the SEC staff issued Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (SAB 118), whichallowed us to record provisional amounts during a measurement period not to extend beyond one year of the enactment date. Since the Tax Act was passedlate in the fourth quarter of 2017, and ongoing guidance and accounting interpretation was expected during the 2018 calendar year, we considered theaccounting of the transition tax, deferred tax re-measurements, and other items to be incomplete as of December 31, 2017, though we recorded provisionalamounts in the consolidated financial statements. As of December 31, 2018, we have completed our analysis related to the Tax Act in accordance with SAB118 and there was no additional adjustment required.The new legislation contains several key provisions that affect us. The lowering of the corporate tax rate from 35% to 21% resulted in our deferred taxbalances and related valuation allowances being re-measured to reflect the future tax benefit at the new enacted rate. During 2017, the U.S. deferred tax assetswere reduced by $13.9 million and the valuation allowance was also reduced by $13.9 million, resulting in no net impact to the effective tax rate for the yearended December 31, 2017. During 2018, the Company finalized the accounting for this item resulting in a $0.6 million increase to both the U.S. deferred taxassets and the valuation allowance, with no impacts to tax expense or the effective tax rate. In addition, the Alternative Minimum Tax (“AMT”) was repealedfor tax years beginning after December 31, 2017 and the AMT credit will be refundable in future years. As 50% of this credit will be refundable along withthe 2018 tax return, that portion was reclassified to a current asset on the balance sheet. The Tax Act requires the payment of a transition tax on themandatory deemed repatriation of cumulative unremitted foreign earnings, the larger amount measured on November 2, 2017 and December 31, 2017. Basedupon all available evidence and the Company’s analysis, there was no transition tax liability due to a net earnings and profits deficit in our controlled foreigncorporations and no impact to the effective tax rate for the year ended December 31, 2017. No amounts were recorded during 2018, and the accounting forthis item is considered complete. The Global Intangible Low Tax Income Tax (“GILTI”) is a U.S. minimum tax on the foreign earnings on intangible assets. The Company has elected to account for the impact of the minimum tax in the period realized. GILTI results in no impact to the effective tax rate for the yearended December 31, 2018.We undertook a detailed review of our deferred taxes and it was determined with the exception of the deferred tax assets associated with the AMT creditdescribed above, a valuation allowance was required for all other U.S. deferred tax assets. We released the valuation allowance on our UK deferred tax assetsduring the year ended December 31, 2018. We reduce our deferred tax assets by a valuation allowance if it is more likely than not that some portion or all of adeferred tax asset will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during theperiods in which those temporary differences are deductible. In making this determination, we consider all available positive and negative evidence affectingspecific deferred tax assets, including our past and anticipated future performance, the reversal of deferred tax liabilities, the length of carryback andcarryforward periods and the implementation of tax planning strategies. Since this evaluation requires consideration of future events, significant judgment isrequired in making the evaluation, and our conclusion could be materially different should certain of our expectations not be met. The balance of ourvaluation allowance was $31.6 million as of December 31, 2018, representing a change of $3.2 million from the valuation allowance of $34.8 millionrecorded as of December 31, 2017. The primary driver of the valuation allowance movement was determined by the release of the valuation allowancesagainst the deferred tax assets in France and the UK.In 2016, management determined that a valuation allowance was no longer required against the deferred tax assets of its U.S. branches in New Zealandand Singapore. As of December 31, 2016, we had gross deferred tax assets of $8.4 million relating to those foreign subsidiaries. The benefit of these deferredtax assets is reflected as a credit of $1.7 million to tax expense during the year ended December 31, 2016.In 2017, management determined that a valuation allowance was no longer required against the deferred tax assets of certain of its U.S. branches inSpain, Taiwan, Thailand and Mexico. As of December 31, 2017, we had gross deferred tax assets of $0.9 million relating to those foreign subsidiaries. Thebenefit of these deferred tax assets is reflected as a credit of $0.2 million to tax expense during the year ended December 31, 2017.In 2018, management determined that a valuation allowance was no longer required against the deferred tax assets of the UK subsidiary and U.S. branchin France. As of December 31, 2018, we had gross deferred tax assets of $6.6 million relating to64Table of ContentsPRGX GLOBAL, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)those foreign subsidiaries. The benefit of these deferred tax assets is reflected as a credit of $1.2 million to tax expense during the year ended December 31,2018.As of December 31, 2018, we had approximately $81.5 million of U.S. federal loss carry-forwards available to reduce future U.S. federal taxable income.Approximately $80.9 million of the U.S. federal loss carry-forwards expire between 2026 and 2035. The remaining $0.6 million of U.S. federal loss carry-forwards do not expire. As of December 31, 2018, we had approximately $70.9 million of state loss carry-forwards available to reduce future state taxableincome. The state loss carry-forwards expire between 2022 and 2037 and are subject to certain limitations. The U.S. federal and state loss carry-forwards atDecember 31, 2018, reflect adjustments for prior period write-downs associated with ownership changes.Generally, we have not provided deferred taxes on the undistributed earnings of international subsidiaries as we consider these earnings to bepermanently reinvested. As it relates to the earnings of our Brazilian subsidiary, we assert that we are not permanently reinvested. We did not provideadditional incremental tax expense on these amounts as our Brazilian subsidiary did not have undistributed earnings during the year.On December 30, 2016, the Company experienced an ownership change as defined under Section 382 of the Internal Revenue Code (“IRC”). Thisownership change resulted in an annual IRC Section 382 limitation that limits the use of certain tax attribute carry-forwards and also resulted in the write-offof certain deferred tax assets and the related valuation allowances that the Company recorded in 2017. The Company has performed its assessment and hasdetermined that $87.3 million of the gross federal net operating losses outstanding as of December 30, 2016 will be available for use going-forward. TheCompany utilized $6.4 million of these losses on the 2017 U.S. federal tax return and the remaining $80.9 million remains available.A reconciliation of our beginning and ending amount of unrecognized tax benefits and related accrued interest thereon is as follows: Unrecognized TaxBenefits Accrued Interest andPenaltiesBalance at January 1, 2016 $535 $202 Additions based on tax positions related to the current year — — Additions based on tax positions related to the prior years — 11Decrease based on payments made during the year — — Decreases based on tax positions related to the prior years $(38) $(59)Balance at December 31, 2016 $497 $154 Additions based on tax positions related to the current year — — Additions based on tax positions related to the prior years 116 19 Decreases based on payments made during the year — — Decreases based on tax positions related to the prior years (420) (145)Balance at December 31, 2017 $193 $28 Additions based on tax positions related to the current year 4 — Additions based on tax positions related to the prior years 10 6 Decreases based on payments made during the year — — Decreases based on tax positions related to the prior years — —Balance at December 31, 2018 $207 $34Due to the complexity of the tax rules underlying these unrecognized tax benefits, and the unclear timing of tax audits, tax agency determinations, andother events, we cannot establish reasonably reliable estimates for the periods in which the cash settlement of these liabilities will occur.We file U.S. federal, state, and foreign income tax returns in jurisdictions with varying statutes of limitations. As of December 31, 2018, the 2015through 2017 tax years generally remain subject to examination by federal and most state and foreign tax authorities. The use of net operating lossesgenerated in tax years prior to 2015 may also subject returns for those years to examination.65Table of ContentsPRGX GLOBAL, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)(8) EMPLOYEE BENEFIT PLANSWe maintain a defined contribution retirement plan (the "Plan") in accordance with Section 401(k) of the Internal Revenue Code, which allows eligibleparticipating employees to defer a portion of their annual compensation and contribute such amount to one or more investment funds. The Plan provides for adiscretionary matching contribution by the Company as determined by management and approved by the Board of Directors each plan year. The Company'scurrent practice is to match 50% of the annual employee's contribution, up to but not exceeding the lesser of 6% of the employee’s annual compensation or$3,000. Discretionary matching contributions made by the Company to a participant's account are vested once a participant has attained three or more yearsof service. The Company contributed to the Plan approximately $0.9 million in 2018, $0.8 million in 2017, and $0.8 million in 2016.(9) CAPITAL STRUCTUREOn February 21, 2014, our Board of Directors authorized a stock repurchase program under which we could repurchase up to $10.0 million of ourcommon stock from time to time through March 31, 2015. On March 25, 2014, our Board of Directors authorized a $10.0 million increase to the stockrepurchase program, bringing the total amount of its common stock that the Company could repurchase under the program to $20.0 million. On October 24,2014, our Board of Directors authorized a $20.0 million increase to the stock repurchase program, increasing the total share repurchase program to $40.0million, and extended the duration of the program to December 31, 2015. In October 2015, our Board of Directors authorized an additional $10.0 millionincrease to the stock repurchase program, increasing the total share repurchase program to $50.0 million, and extended the duration of the program toDecember 31, 2016. In December 2016, our Board of Directors authorized an additional $10.0 million increase to the stock repurchase program, increasingthe total share repurchase program to $60.0 million, and extended the duration of the program to December 31, 2017. In December 2017, our Board ofDirectors extended the duration of the program to December 31, 2018. In November 2018, our Board of Directors authorized a $15.0 million increase to thestock repurchase program, increasing the total share repurchase program to $75.0 million, and extended the duration of the program to December 31, 2019.During the year ended December 31, 2018, we repurchased 0.4 million shares of our common stock for $4.1 million. No shares were repurchased underthe share repurchase program in the year ended December 31, 2017.66Table of ContentsPRGX GLOBAL, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)(10) COMMITMENTS AND CONTINGENCIESLegal ProceedingsWe are party to a variety of legal proceedings arising in the normal course of business. While the results of these proceedings cannot be predicted withcertainty, management believes that the final outcome of these proceedings will not have a material adverse effect on our financial position, results ofoperations or cash flows.(11) STOCK-BASED COMPENSATIONPlan SummaryDuring 2018, the Company had two shareholder-approved stock-based compensation plans under which outstanding equity awards have been granted:(1) the 2008 Equity Incentive Plan (“2008 EIP”); and (2) the 2017 Equity Incentive Compensation Plan (“2017 EICP”) (collectively, the “Plans”).2008 EIP AwardsDuring the first quarter of 2008, the Board of Directors of the Company adopted the 2008 EIP, which was approved by the shareholders at the annualmeeting of the shareholders on May 29, 2008. The 2008 EIP authorized the grant of incentive and non-qualified stock options, stock appreciation rights,restricted stock, restricted stock units and other incentive awards. Pursuant to amendments to the 2008 EIP that were approved by the Board of Directors andthe Company's shareholders, 10,600,000 shares were reserved for issuance under the 2008 EIP to award grants to key employees, directors and serviceproviders. The options granted pursuant to the 2008 EIP generally had seven year terms and vested in equal annual increments over the vesting period, whichtypically was three years for employees and one year for directors. No further awards can be granted from the 2008 EIP following the approval of the 2017EICP by shareholders on June 27, 2017.2017 EICP AwardsIn April 2017, the Board of Directors adopted the 2017 EICP, which was approved by the shareholders at the annual meeting of the shareholders onJune 27, 2017. The 2017 EICP applies to awards granted on or after June 27, 2017. Under the 2017 EICP, the Company may grant incentive and non-qualified stock options, stock appreciation rights, restricted stock, deferred stock, restricted stock units, performance units, performance shares, dividendequivalents, bonus shares, and other stock-based or cash-based awards. The maximum number of shares of common stock that may be issued pursuant to theawards under the 2017 EICP is 3.4 million shares plus that number of shares of common stock subject to awards granted under the 2008 EIP that wereoutstanding when the 2017 EICP became effective and that subsequently terminate without deleting of the shares, whether by lapse, forfeiture, cancellation,or otherwise. The options granted to date pursuant to the 2017 EICP have a term of seven years. As of December 31, 2018 there were approximately 2.9million shares available for future grants under the 2017 EICP.67Table of ContentsPRGX GLOBAL, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)GrantsOption AwardsThe following table summarizes stock option awards granted during the years ended December 31, 2018, 2017, and 2016:GranteeType Number ofOptionsGranted Vesting Period WeightedAverageExercise Price WeightedAverage GrantDate Fair Value2018 Employee inducement (1) 535,000 3 years $8.91 $2.89 2017 Director group 90,566 1 year or less $6.34 $3.49Director group(2) 35,000 3 years $6.25 $3.50CEO grant 500,000 4 years $7.35 $2.36Employee group 30,000 3 years $7.25 $3.99Employee inducement (3) 335,000 3 years $6.19 $3.41 2016 Director group (4) 195,417 1 year or less $5.01 $2.71Director group (2) 35,000 3 years $4.80 $2.66Employee inducement (5)(6) 232,500 3 years $4.61 $2.60 (1)The Company granted non-qualified stock options outside its existing stock-based compensation plan in 2018 to nine employees in connection with the employees joining theCompany.(2)The Company granted non-qualified stock options to one director in connection with the director joining the Company's board of directors.(3)The Company granted non-qualified stock options outside its existing stock-based compensation plans to certain employees in connection with the employees joining theCompany.(4)Includes 20,417 non-qualified stock options granted to one director in connection with the director joining the Company's board of directors.(5)The Company granted non-qualified stock options outside its existing stock-based compensation plans in 2016 in connection with an employee joining the Company.(6)The Company granted non-qualified stock options outside its existing stock-based compensation plans in connection with the closing of the Lavante acquisition.68Table of ContentsPRGX GLOBAL, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)Nonvested Stock AwardsThe following table summarizes nonvested stock awards granted during the years ended December 31, 2018, 2017 and 2016:GranteeType Number of StockAwardsGranted Vesting Period WeightedAverage GrantDate Fair Value2018 Director group 64,545 1 year or less $9.45Employee group (1) 488,685 3 years or less $9.56Employee inducement (2) 160,516 3 years or less $8.95 2017 Director group 51,179 1 year or less $6.35Employee group (3) 641,751 3 years or less $6.31Employee inducement (4) 100,000 3 years or less $6.33 2016 Employee group (5) 1,250,750 2 years $4.88Employee inducement (6) 100,000 3 years $4.94 (1)The Company granted nonvested performance-based stock awards (restricted stock units), restricted stock awards, and restricted stock units in 2018 to certain key employees.(2)The Company granted nonvested performance-based stock awards (restricted stock units) and restricted stock awards in 2018 to six employees in connection with theemployees joining the Company.(3)The Company granted nonvested performance-based stock awards (restricted stock units), restricted stock units and restricted stock awards in the first quarter of 2017 totwelve executive officers totaling 458,000 units. During the second quarter of 2017, the Company issued 183,751 restricted stock awards and restricted stock units to keyemployees.(4)The Company granted nonvested performance-based stock awards (restricted stock units) and restricted stock awards in 2017 to two executive officers in connection with theemployees joining the Company.(5)The Company granted nonvested performance-based stock awards (restricted stock units) in 2016 to five executive officers and certain other key employees.(6)The Company granted nonvested performance-based stock awards (restricted stock units) outside its existing stock-based compensation plans in 2016 to three employees inconnection with the employees joining the Company.Nonvested stock awards, including both restricted stock and restricted stock units, generally are nontransferable until vesting and the holders areentitled to receive dividends with respect to the nonvested shares, provided the shares ultimately vest. Prior to vesting, the grantees of restricted stock areentitled to vote the shares, but the grantees of restricted stock units are not entitled to vote the shares. Generally, nonvested stock awards, excluding thosewhose vesting is performance-based, vest in equal annual increments over the vesting period, which typically is three years for employees and one year fordirectors. Performance-based stock awards vest based on the achievement of certain performance objectives.Performance-Based Restricted Stock UnitsDuring 2018, one executive officer and two senior leaders were granted 40,750 performance-based restricted stock units ("PBUs") outside of the existingstock-based compensation plan as an inducement for employment and one senior leader was granted 12,000 PBUs under the 2017 EICP. If vested, 100% ofthe vested PBUs will be paid in whole shares of common stock. 65% of the PBUs vest and become payable based on the cumulative revenue from continuingoperations and 35% of the PBUs vest and become payable on the cumulative adjusted EBITDA from continuing operations that the Company achieves, ineach case, for the two-year performance period ending December 31, 2018. At the threshold performance level, 35% of the PBUs will become vested andpayable and at the target performance level, 100% of the PBUs will become vested and payable. If performance falls between the stated performance levelsthe percentage of PBUs that shall become vested and payable will be based on a straight-line interpolation between such stated performance levels (althoughthe PBUs may not become vested and payable for more than 100% of the PBUs and no PBUs shall become vested and payable if performance does not equalor exceed the applicable threshold performance level).69Table of ContentsPRGX GLOBAL, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)During 2018, five executive officers and nine other senior leaders were granted 192,098 PBUs under the 2017 EICP and 54,180 PBUs outside of theexisting stock-based compensation plan as an inducement for employment. If vested, 100% of the vested Units will be paid in whole shares of common stock.50% of the PBUs vest and become payable based on the cumulative revenue from continuing operations,35% of the PBUs vest and become payable based onthe cumulative adjusted EBITDA from continuing operations and 15% of the PBUs vest and become payable based on the cumulative adjacent servicesrevenue that the Company achieves, in each case, for the two-year performance period ending December 31, 2019. At the threshold performance level, 35% ofthe PBUs will become vested and payable; at the target performance level, 100% of the PBUs will become vested and payable; and at the maximumperformance level, 150% of the PBUs will become vested and payable. If performance falls between the stated performance levels the percentage of PBUs thatshall become vested and payable will be based on a straight-line interpolation between such stated performance levels (although the PBUs may not becomevested and payable for more than 150% of the PBUs and no PBUs shall become vested and payable if performance does not equal or exceed the applicablethreshold performance level).During 2017, certain employees of the company were granted 333,800 PBUs. If vested, 100% of the vested PBUs will be paid in whole shares ofcommon stock. 65% of the PBUs vest and become payable based on the cumulative revenue from continuing operations and 35% of the PBUs vest andbecome payable on the cumulative adjusted EBITDA from continuing operations that the Company achieves, in each case, for the two-year performanceperiod ending December 31, 2018. At the threshold performance level, 35% of the PBUs will become vested and payable and at the target performance level,100% of the PBUs will become vested and payable. If performance falls between the stated performance levels the percentage of PBUs that shall becomevested and payable will be based on a straight-line interpolation between such stated performance levels (although the PBUs may not become vested andpayable for more than 100% of the PBUs and no PBUs shall become vested and payable if performance does not equal or exceed the applicable thresholdperformance level).During 2016, certain employees of the Company were granted 1,350,750 PBUs. During the first quarter of 2018, the Company issued 483,623 shares ofcommon stock and paid $5.4 million in cash as long-term incentive compensation related to the vesting of these awards.The following table summarizes the PBUs granted during the years ended December 31, 2018, 2017 and 2016: Total PBUs GrantedPBUs to be Settled in CommonStock (1)PBUs to be Settled in Cash (2)2018299,028299,028—2017333,800333,800—20161,350,750560,670790,080(1)Represents the number of PBUs to be settled in common stock at the target performance level.(2)Represents the number of PBUs to be settled in cash at the target performance level. In the fourth quarter of 2018, management determined that 80% of the PBUs with a two-year performance period ending December 31, 2018 would likelyvest based on expected financial performance compared to the target financial objectives. As a result, the associated expense was adjusted down to reflect thenew estimate. During 2017 and 2016, the PBUs that were granted in 2017 and 2016 were expensed at the target performance level based on management'sestimates.Stock Appreciation RightsDuring 2018, certain employees were granted stock appreciation rights ("SARs") covering 350,000 shares of the Company's common stock under the2017 EICP. The SARs will vest on March 1, 2020. Upon vesting, 25% of the SARs may be exercised on the last day of each of the first, second and thirdcalendar quarters in 2020. Within 30 days after the SARs are exercised, the Company must settle the exercised SARs in a cash payment equal to the excess of(i) the lesser of the fair market value, as of the date on which the SARs are exercised, or $18 per share, over (ii) $9.15 per share, less any applicable taxwithholding. Vested SARs not exercised during any previous quarter will remain outstanding and be automatically exercised as of December 31, 2020.On April 27, 2016, the Company's Chief Executive Officer was granted SARs covering 200,000 shares of the Company’s common stock under the 2008EIP. The SARs were issued with an initial value per share equal to $4.71. On June 30, 2018, the SARs vested and became payable in cash in a lump sum equalto $1.0 million (less applicable tax withholding), which70Table of ContentsPRGX GLOBAL, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)represents the excess of the fair market value, as of June 30, 2018, of the shares of the Company's common stock over $4.71, the fair market value (closingprice) of the Company's common stock on the date of grant, April 27, 2016.Summary of ActivityA summary of option activity as of December 31, 2018, and changes during the year then ended is presented below:Options Shares Weighted-AverageExercisePrice(Per Share) Weighted-AverageRemainingContractualTerm AggregateIntrinsicValue($ 000’s)Outstanding at January 1, 2018 3,399,293 $6.54 4.05 years $2,367Granted 535,000 8.91 Exercised (676,649) 6.54 $1,585Forfeited (280,556) 7.61 Expired (126,271) 6.53 Outstanding at December 31, 2018 2,850,817 $6.84 3.74 years $7,384Exercisable at December 31, 2018 1,735,149 $6.40 2.73 years $5,225The weighted-average grant date fair value of options granted was $2.89 per share in 2018, $2.91 per share in 2017 and $2.66 per share in 2016. The totalintrinsic value of options exercised was $1.6 million in 2018, $0.3 million in 2017 and $0.1 million in 2016.For time-vested option grants that resulted in compensation expense recognition, we used the following assumptions in our Black-Scholes valuationmodels: Years Ended December 31, 2018 2017 2016Risk-free interest rates (1) 2.3% - 2.99% 1.38% - 1.96% 0.58% - 1.20%Dividend yields (2) —% —% —%Volatility factor of expected market price (3) .362 - .371 .540 - .749 .391 - .779Weighted-average expected term of options (4) 4 years 2.2 - 4 years 1.3 - 4.5 yearsForfeiture rate (5) —% —% —%(1)The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of the grant for periods corresponding to the expected term of the options.(2)The Company has not historically declared dividends.(3)The expected volatility is based on the historical volatility of the Company's stock.(4)The expected term represents the weighted average period of time that the stock options are expected to be outstanding, giving consideration to the vesting schedules.(5)The Company accounts for forfeitures as they occur rather than estimating expected forfeitures.71Table of ContentsPRGX GLOBAL, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)A summary of nonvested stock awards (including restricted stock, restricted stock units and performance-based restricted stock units) activity as ofDecember 31, 2018 and changes during the year then ended is presented below:Nonvested Stock Shares WeightedAverage GrantDate Fair Value(Per Share)Nonvested at January 1, 2018 2,116,696 $5.36Granted 713,746 9.42Vested (1,523,696) 5.02Forfeited (340,796) 7.51Nonvested at December 31, 2018 965,950 $8.18The weighted-average grant date fair value of nonvested stock awards (restricted stock and restricted stock units) granted was $9.42 per share in 2018,$6.32 per share in 2017 and $4.86 per share in 2016. The total vest date fair value of stock awards vested during the year was $12.7 million in 2018, $0.3million in 2017 and $0.7 million in 2016.Stock-based compensation expense was $5.1 million in 2018, $7.1 million in 2017, and $5.1 million in 2016. We include these charges in Selling,general and administrative expenses in the accompanying Consolidated Statements of Operations. The total income tax benefit recognized in ourConsolidated Statements of Operations was $1.3 million, $2.7 million and $1.9 million in 2018, 2017 and 2016, respectively.Total unrecognized compensation expense related to nonvested stock-based compensation as of December 31, 2018 is as follows (dollars in thousands): Stock Restricted Restricted Options SARs Stock Awards Stock Units Total Unrecognized compensationexpense$2,145 $313 $2,614 $2,125 $7,197Weighted-average remainingrecognition period (in years)2.5 1.2 2.1 1.2 1.9(12) BUSINESS ACQUISITIONSWe completed several acquisitions in recent years that we describe below. Generally, we acquire businesses that we believe will provide a strategic fitfor our existing operations, cost savings and revenue synergies, or enable us to expand our capabilities.Cost & Compliance Associates AcquisitionIn February 2017, we completed the acquisition of Cost & Compliance Associates, LLC and Cost & Compliance Associates Limited (collectively"C&CA"). C&CA is a commercial recovery audit and contract compliance firm with operations in the U.S. and the UK. We acquired substantially all of theassets of C&CA for approximately $10.0 million in cash plus potential earnout consideration of up to $8.0 million.72Table of ContentsPRGX GLOBAL, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)The actual payment of the earnout consideration is based on achieving certain financial targets over a two year period that commenced on March 1,2017 and will conclude on February 28, 2019. Management estimated that the fair value of the earnout consideration was approximately $5.9 million at thedate of acquisition. During each of 2018 and 2017, the Company recognized accretion of $0.9 million on the fair value of the earnout amount which wasincluded in Interest expense in the Consolidated Statements of Operations, and increased the related contingent consideration liability. The remainingpotential earnout payment is $4.0 million. As of December 31, 2018, the contingent consideration liability related to the C&CA acquisition was $3.7 million,which is included in current Business acquisition obligations in our Consolidated Balance Sheet. We funded the purchase price and acquisition costs fromborrowings under our credit facility, further described in Note 5.Purchase Price AllocationWe allocated the aggregate purchase price for C&CA to the net tangible and intangible assets acquired based on their fair values as of February 23,2017. We based the allocation of the purchase price on a valuation for intangible assets and the carrying value for the remaining assets and liabilities, as thecarrying value approximates their fair value. The fair value of C&CA's identifiable intangible assets were measured using the income approach whichincludes a projection of estimated future discounted cash flows using a discount rate that is specific to the business risk, cost of capital and other factors. Werecorded the excess of the purchase price over the net tangible and intangible assets as goodwill, which has been allocated and recognized as goodwill withinour Recovery Audit Services-Americas and Recovery Audit Services-Europe/Asia-Pacific business segments. Factors that contributed to the recognition ofgoodwill included expected synergies and the trained workforce.Our purchase price allocation was as follows (in thousands):Accounts receivable $1,621Commissions receivable 48Prepaid expenses 109Other current assets, net 6Intangible assets 10,923Goodwill 3,554Fixed assets 323Accounts payable (125)Accrued commissions (537)Total consideration paid $15,922Contingent consideration (1) (5,954)Total cash paid $9,968(1) In the second quarter of 2018 we made an earnout payment of $4.0 million. As of December 31, 2018, the contingent consideration liability balancewas $3.7 million.The intangible assets acquired were as follows (in thousands): Fair ValueRemaining useful lifeCustomer relationships $9,55614 yearsNon-compete 1,2324 yearsTrademarks 1354 years $10,923 We have included the results of C&CA from the date of acquisition through December 31, 2018 in our Consolidated Statement of Operations. In fiscalyear 2017, we included revenue of $7.8 million and income before income tax of $0.8 million in our Recovery Audit Services - Americas business segment,and revenue of $3.3 million and income before income tax of $1.0 million in our Recovery Audit Services - Europe/Asia-Pacific business segment. In fiscalyear 2018, we included revenue of $9.6 million and loss before income tax of less than $0.6 million in our Recovery Audit Services - Americas businesssegment, and revenue of $4.4 million and income before income tax of $1.5 million in our Recovery Audit Services - Europe/Asia-Pacific business segment.73Table of ContentsPRGX GLOBAL, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)Unaudited Supplemental Financial InformationOur unaudited pro forma results presented below, including C&CA, for the years ended December 31, 2017 and 2016 are presented as if the acquisitionhad been completed on January 1, 2016. The unaudited pro forma financial information is presented for illustrative purposes only and is not necessarilyindicative of what the operating results actually would have been during the periods presented had the C&CA acquisition been completed on January 1,2016. In addition, the unaudited pro forma information does not purport to project future operating results. Year Ended December 31,(in thousands) 20172016Unaudited pro forma revenue 162,459155,626Unaudited pro forma net income from continuing operations 3,8865,365Lavante AcquisitionIn October 2016, we completed the acquisition of Lavante, Inc. ("Lavante"). Lavante is a SaaS-based procure-to-pay supplier information management(SIM) and recovery audit services firm, based in San Jose, California. We acquired substantially all of the assets of Lavante, which primarily consisted of itsproprietary software applications, for $3.8 million in cash, plus potential earnout consideration of up to $4.5 million.The actual payment of the earnout consideration is based on achieving certain financial targets over a two year period that commenced on October 31,2016 and concluded on December 31, 2018. Management estimated that the fair value of the earnout consideration was approximately $3.8 million at thedate of acquisition, of which $2.0 million was included in Other current liabilities and $1.8 million was included in Other long-term liabilities in ourConsolidated Balance Sheet as of December 31, 2016. During 2018 and 2017, the Company recognized accretion of $0.1 million and $0.3 million,respectively, on the fair value of the earnout amount which was included in Interest expense in the Consolidated Statements of Operations, and increased therelated contingent consideration liability. In the fourth quarter of 2017, we reduced the earnout liability by $2.1 million and in the third quarter of 2018, wefurther reduced the earnout liability by $1.6 million, after it was determined that a portion of the earnout consideration would not be achieved. Theseadjustments were included in Acquisition-related adjustments in the Consolidated Statements of Operations for the years ended December 31, 2018 and2017. As of December 31, 2018, the contingent consideration liability related to the Lavante acquisition was $0.5 million, which was included in currentBusiness acquisition obligations in our Consolidated Balance Sheet. We funded the purchase price and acquisition costs from borrowings on our creditfacility, further described in Note 5.Purchase Price AllocationWe allocated the aggregate purchase price for Lavante to the net tangible and intangible assets acquired based on their fair values as of October 31,2016. We based the allocation of the purchase price on a valuation of intangible assets, and the carrying value for the remaining assets and liabilities as thecarrying value approximated their fair value. The fair value of Lavante's identifiable intangible assets were measured using a form of the income approach,and a cost approach. The income approach includes a projection of estimated future discounted cash flows using a discount rate that is specific to thebusiness risk, cost of capital and other factors. We recorded the excess of the purchase price over the net tangible and intangible assets as goodwill within ourAdjacent Services business segment. Factors that contributed to the recognition of goodwill included expected synergies and the trained workforce.Our purchase price allocation was as follows (in thousands):74Table of ContentsPRGX GLOBAL, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)Cash and cash equivalents $28Accounts receivable, net 207Other current assets 92Intangible assets 6,178Goodwill 2,286Fixed assets, net 98Accounts payable (121)Deferred revenue (370)Other current liabilities (757)Total consideration paid $7,641Contingent consideration(1) (3,832)Total cash paid $3,809(1) In the third quarter of 2018, we reduced the earnout liability by $1.6 million and in the fourth quarter of 2017, we reduced the earnout liability by $2.1million. At December 31, 2018, the contingent consideration liability balance was $0.5 million.The intangible assets acquired were as follows (in thousands): Fair ValueRemaining useful lifeTrademarks $1634 yearsPatents 1141 yearSoftware 5,9014 yearsTotal intangible assets $6,178 We have included the results of Lavante from its date of acquisition through December 31, 2018 in our Consolidated Statement of Operations, whichconsisted of revenue of $0.4 million and a loss before income tax of $0.9 million in the year ended December 31, 2016, revenue of $1.9 million and a lossbefore income tax of $4.8 million in the year ended December 31, 2017, and revenue of $2.2 million and a loss before income tax of $2.3 million in the yearended December 31, 2018. The results from Lavante are included in our Adjacent Services business segment.Unaudited Supplemental Financial InformationOur unaudited pro forma results presented below, including Lavante, for the years ended December 31, 2016 and 2015 are presented as if theacquisition had been completed on January 1, 2015. The unaudited pro forma financial information is presented for illustrative purposes only and is notnecessarily indicative of what the operating results actually would have been during the periods presented had the Lavante acquisition been completed onJanuary 1, 2015. In addition, the unaudited pro forma information does not purport to project future operating results. Year Ended December 31,(in thousands) 20162015Unaudited pro forma revenue 143,198140,994Unaudited pro forma net (loss) income from continuing operations (3,418)(5,516)75Table of ContentsPRGX GLOBAL, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)(13) QUARTERLY RESULTS (UNAUDITED)The following tables set forth certain unaudited condensed consolidated quarterly financial data for each of the last eight quarters during our fiscalyears ended December 31, 2018 and 2017. We have derived the information from unaudited Condensed Consolidated Financial Statements that, in theopinion of management, reflect all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of such quarterlyinformation. The operating results for any quarter are not necessarily indicative of the results to be expected for any future period. The quarterly results areupdated for continuing operations. 2018 Quarter Ended 2017 Quarter Ended Mar. 31 June 30 Sept. 30 Dec. 31 Mar. 31 June 30 Sept. 30 Dec. 31 (In thousands, except per share data)Revenue, net of refund liabilities $36,721 $42,102 $43,320 $49,633 $33,569 $38,510 $42,467 $47,074Operating expenses: Cost of revenue 24,797 27,389 26,146 26,493 23,026 25,605 26,675 26,746Selling, general and administrativeexpenses 11,264 12,809 12,521 13,862 10,536 11,424 12,189 12,792Depreciation of property, equipment andsoftware assets 1,223 2,360 1,713 2,074 1,220 1,109 1,133 1,107Amortization of intangible assets 788 864 872 871 722 722 722 1,468Acquisition-related adjustments(income) loss — — (1,640) 12 — — — (2,283)Total operating expenses 38,072 43,422 39,612 43,312 35,504 38,860 40,719 39,830Operating (loss) income from continuingoperations (1,351) (1,320) 3,708 6,321 (1,935) (350) 1,748 7,244Foreign currency transaction (gains) losseson short-term intercompany balances (220) 880 70 272 (552) (957) (418) (263)Interest expense, net 398 486 416 363 37 48 142 1,312Other loss (income) 12 5 (1) 5 (199) 5 17 17(Loss) income from continuing operationsbefore income taxes (1,541) (2,691) 3,223 5,681 (1,221) 554 2,007 6,178Income tax expense (benefit) 787 189 597 (252) 627 879 930 526Net (loss) income from continuingoperations (2,328) (2,880) 2,626 5,933 (1,848) (325) 1,077 5,652 Basic (loss) earnings per common sharefrom continuing operations (1) $(0.10) $(0.13) $0.11 $0.26 $(0.08) $(0.01) $0.05 $0.26 Diluted (loss) earnings per common sharefrom continuing operations (1) $(0.10) $(0.13) $0.11 $0.26 $(0.08) $(0.01) $0.05 $0.26(1)We calculate each quarter as a discrete period; the sum of the four quarters may not equal the calculated full-year amount.76Table of ContentsPRGX GLOBAL, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)(14) SUBSEQUENT EVENTOn March 14, 2019, the Company, as co-borrower with PRGX USA, Inc. (“PRGX-USA”), a wholly owned subsidiary that is the Company’s principaldomestic operating subsidiary, entered into a five-year Credit Agreement (the “BOA Credit Facility”) with Bank of America, N.A. (“BOA”), and SynovusBank as the initial lenders thereunder, and with BOA as the letter-of-credit issuer thereunder, as the swingline lender thereunder, and as the administrativeagent (the “Administrative Agent”) for the lenders from time to time party thereto. The BOA Credit Facility consists of a $60.0 million senior revolving creditfacility (the “Revolver”), with a $5.0 million subfacility for the issuance of letters of credit, and a $5.0 million swingline loan subfacility (the “SwinglineLoan”). The BOA Credit Facility is guaranteed by each of PRGX’s direct and indirect domestic wholly owned subsidiaries (other than PRGX-USA), except forcertain immaterial domestic subsidiaries. None of PRGX’s direct or indirect foreign subsidiaries has guaranteed the BOA Credit Facility. The BOA CreditFacility is secured by substantially all of the assets of PRGX, PRGX-USA and each guarantor (including the equity interests in substantially all of theCompany’s domestic subsidiaries and up to sixty-five percent (65%) of the equity interests of certain of the Company’s first-tier material foreignsubsidiaries).PRGX has borrowed $30.0 million under the Revolver, which was substantially used to prepay in full the approximately $29.0 million inoutstanding indebtedness owed to the lenders under PRGX’s pre-existing Amended & Restated Revolving Credit Agreement, dated December 23, 2014, asamended from time to time, by and among PRGX, PRGX-USA, the several banks and other financial institutions and lenders from time to time party theretoand SunTrust Bank, in its capacity as administrative agent for the lenders, and to terminate that prior credit facility in its entirety. There were no earlytermination penalties associated with the termination of the pre-existing credit facility with SunTrust Bank.The BOA Credit Facility will mature on March 14, 2024. Interest is payable quarterly in arrears. There are no prepayment penalties in the event theCompany elects to prepay and terminate the BOA Credit Facility prior to its scheduled maturity date, subject to breakage and redeployment costs in certainlimited circumstances.The Revolver bears interest under the BOA Credit Facility at a rate per annum comprised of a specified index rate based on LIBOR plus anapplicable interest rate margin determined under the BOA Credit Facility. For U.S. Dollar denominated loans under the Revolver, at the option of theBorrowers, such loans shall bear interest under the BOA Credit Facility at a rate per annum equal to (x) the LIBOR daily floating rate plus an applicableinterest rate margin determined under the BOA Credit Facility or (y) the base rate plus the applicable interest rate margin, each as determined under the BOACredit Facility. Although the Company does not anticipate the need for Swingline Loans, were any Swingline Loans to be made they would bear interest atthe base rate plus the applicable interest rate margin for base rate loans, each as determined under the BOA Credit Facility. The applicable interest rate marginvaries from 1.50% per annum to 2.25% per annum, for LIBOR daily floating rate loans, and from 0.50% per annum to 1.25% per annum, for loans based onthe base rate, and in either case depending on the Company’s consolidated leverage ratio, and is determined in accordance with a pricing grid under the BOACredit Facility. On March 14, 2019, the closing date under the BOA Credit Facility, the applicable interest rate (inclusive of the applicable interest ratemargin) for LIBOR daily floating rate loans (the only type outstanding on the closing date) was 3.89% per annum.The BOA Credit Facility includes customary affirmative, negative, and financial covenants binding on the Company, including delivery of financialstatements and other reports and maintenance of existence. The negative covenants limit the ability of the Company, among other things, to incur debt, incurliens, make investments and sell assets, but does provide for certain permitted repurchases of shares of its capital stock and the declaration and payment ofcertain dividends on its capital stock. The financial covenants included in the BOA Credit Facility set forth a maximum consolidated leverage ratio and aminimum consolidated fixed charge coverage ratio for the Company, each which will be tested on a quarterly basis; and with the Company having the abilityto increase the maximum leverage ratio for a limited time when needed in connection with permitted acquisitions. In addition, the BOA Credit Facilityincludes customary events of default.ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial DisclosureNone.ITEM 9A. Controls and Procedures77Evaluation of Disclosure Controls and ProceduresThe Company carried out an evaluation, under the supervision and with the participation of its management, including the Chief Executive Officer andChief Financial Officer, of the effectiveness of the design and operation of the Company’s “disclosure controls and procedures” (as defined in the ExchangeAct Rule 13a-15(e)) as of the end of the period covered by this report. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officerconcluded that the Company’s disclosure controls and procedures are effective as of December 31, 2018.Changes in internal controls over financial reportingThere was no change in the Company’s internal control over financial reporting that occurred during the Company’s most recently completed fiscalquarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.Management’s Annual Report on Internal Control Over Financial ReportingThe Company’s management is responsible for establishing and maintaining an adequate system of internal control over financial reporting, as definedin the Exchange Act Rule 13a-15(f). Our internal control system is designed to provide reasonable assurance regarding the preparation and fair presentationof financial statements for external purposes in accordance with generally accepted accounting principles. All internal control systems, no matter how welldesigned, have inherent limitations and can provide only reasonable assurance that the objectives of the internal control system are met. Under thesupervision and with the participation of the Company’s management, including the Chief Executive Officer and the Chief Financial Officer, the Companyconducted an assessment of the effectiveness of internal control over financial reporting based on the framework (2013 Framework) in Internal Control –Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on the assessment, managementconcluded that, as of December 31, 2018, the Company’s internal control over financial reporting is effective. The Company’s internal control over financialreporting as of December 31, 2018 has been audited by BDO USA, LLP, an independent registered public accounting firm, as stated in their report which isincluded herein, which expresses an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting as of December 31,2018.Management’s report shall not be deemed filed for purposes of Section 18 of the Exchange Act.78Report of Independent Registered Public Accounting FirmShareholders and Board of DirectorsPRGX Global, Inc. and subsidiariesAtlanta, GeorgiaOpinion on Internal Control over Financial ReportingWe have audited PRGX Global, Inc. and subsidiaries’ (the “Company”) internal control over financial reporting as of December 31, 2018, based on criteriaestablished in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (the“COSO criteria”). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31,2018, based on the COSO criteria.We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidatedbalance sheets of the Company as of December 31, 2018 and 2017, the related consolidated statements of operations, comprehensive income, shareholders’equity, and cash flows for each of the three years in the period ended December 31, 2018, and the related notes and financial statement schedule listed in theaccompanying index and our report dated March 18, 2019 expressed an unqualified opinion thereon.Basis for OpinionThe Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness ofinternal control over financial reporting, included in the accompanying “Item 9A, Management’s Annual Report on Internal Control Over FinancialReporting”. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a publicaccounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with U.S. federal securities lawsand the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.We conducted our audit of internal control over financial reporting in accordance with the standards of the PCAOB. Those standards require that we plan andperform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Ouraudit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing andevaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures aswe considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.Definition and Limitations of Internal Control over Financial ReportingA company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal controlover financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairlyreflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are beingmade only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention ortimely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation ofeffectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliancewith the policies or procedures may deteriorate./s/ BDO USA, LLPAtlanta, GeorgiaMarch 18, 201979ITEM 9B. Other InformationOn March 14, 2019, the Company, as co-borrower with PRGX USA, Inc. (“PRGX-USA”), a wholly owned subsidiary that is the Company’s principaldomestic operating subsidiary, entered into a five-year Credit Agreement (the “BOA Credit Facility”) with Bank of America, N.A. (“BOA”), and SynovusBank as the initial lenders thereunder, and with BOA as the letter-of-credit issuer thereunder, as the swingline lender thereunder, and as the administrativeagent (the “Administrative Agent”) for the lenders from time to time party thereto. The BOA Credit Facility consists of a $60.0 million senior revolving creditfacility (the “Revolver”), with a $5.0 million subfacility for the issuance of letters of credit, and a $5.0 million swingline loan subfacility (the “SwinglineLoan”). The BOA Credit Facility is guaranteed by each of PRGX’s direct and indirect domestic wholly owned subsidiaries (other than PRGX-USA), except forcertain immaterial domestic subsidiaries. None of PRGX’s direct or indirect foreign subsidiaries has guaranteed the BOA Credit Facility. The BOA CreditFacility is secured by substantially all of the assets of PRGX, PRGX-USA and each guarantor (including the equity interests in substantially all of theCompany’s domestic subsidiaries and up to sixty-five percent (65%) of the equity interests of certain of the Company’s first-tier material foreignsubsidiaries).PRGX has borrowed $30.0 million under the Revolver, which was substantially used to prepay in full the approximately $29.0 million in outstandingindebtedness owed to the lenders under PRGX’s pre-existing Amended & Restated Revolving Credit Agreement, dated December 23, 2014, as amended fromtime to time, by and among PRGX, PRGX-USA, the several banks and other financial institutions and lenders from time to time party thereto and SunTrustBank, in its capacity as administrative agent for the lenders, and to terminate that prior credit facility in its entirety. There were no early termination penaltiesassociated with the termination of the pre-existing credit facility with SunTrust Bank.The BOA Credit Facility will mature on March 14, 2024. Interest is payable quarterly in arrears. There are no prepayment penalties in the event theCompany elects to prepay and terminate the BOA Credit Facility prior to its scheduled maturity date, subject to breakage and redeployment costs in certainlimited circumstances.The Revolver bears interest under the BOA Credit Facility at a rate per annum comprised of a specified index rate based on LIBOR plus an applicableinterest rate margin determined under the BOA Credit Facility. For U.S. Dollar denominated loans under the Revolver, at the option of the Borrowers, suchloans shall bear interest under the BOA Credit Facility at a rate per annum equal to (x) the LIBOR daily floating rate plus an applicable interest rate margindetermined under the BOA Credit Facility or (y) the base rate plus the applicable interest rate margin, each as determined under the BOA Credit Facility.Although the Company does not anticipate the need for Swingline Loans, were any Swingline Loans to be made they would bear interest at the base rate plusthe applicable interest rate margin for base rate loans, each as determined under the BOA Credit Facility. The applicable interest rate margin varies from1.50% per annum to 2.25% per annum, for LIBOR daily floating rate loans, and from 0.50% per annum to 1.25% per annum, for loans based on the base rate,and in either case depending on the Company’s consolidated leverage ratio, and is determined in accordance with a pricing grid under the BOA CreditFacility. On March 14, 2019, the closing date under the BOA Credit Facility, the applicable interest rate (inclusive of the applicable interest rate margin) forLIBOR daily floating rate loans (the only type outstanding on the closing date) was 3.89% per annum.The BOA Credit Facility includes customary affirmative, negative, and financial covenants binding on the Company, including delivery of financialstatements and other reports and maintenance of existence. The negative covenants limit the ability of the Company, among other things, to incur debt, incurliens, make investments and sell assets, but does provide for certain permitted repurchases of shares of its capital stock and the declaration and payment ofcertain dividends on its capital stock. The financial covenants included in the BOA Credit Facility set forth a maximum consolidated leverage ratio and aminimum consolidated fixed charge coverage ratio for the Company, each which will be tested on a quarterly basis; and with the Company having the abilityto increase the maximum leverage ratio for a limited time when needed in connection with permitted acquisitions. In addition, the BOA Credit Facilityincludes customary events of default.The foregoing description is qualified in its entirety by reference to the BOA Credit Facility, a copy of which is filed herewith as Exhibit 10.52; and byreference to the Security and Pledge Agreement dated as of March 14, 2019 among the Company, PRGX-USA, and the Company’s subsidiaries that areguarantors under the BOA Credit Facility, as grantors, in favor of BOA, as administrative agent, a copy of which is filed herewith as Exhibit 10.53.80PART IIIITEM 10. Directors, Executive Officers and Corporate GovernanceExcept as set forth below, the information required by Item 10 of this Form 10-K is incorporated herein by reference to the information contained in thesections captioned “Proposal I: Election of Directors”, “Information about the Board of Directors and Committees of the Board of Directors”, “ExecutiveOfficers” and “Section 16(a) Beneficial Ownership Reporting Compliance” of our definitive proxy statement (the “Proxy Statement”) for the 2019 AnnualMeeting of Stockholders to be filed with the Securities and Exchange Commission pursuant to Regulation 14A under the Securities and Exchange Act of1934, as amended (the “Exchange Act”).We have undertaken to provide to any person without charge, upon request, a copy of our code of ethics applicable to our chief executive officer andsenior financial officers. You may obtain a copy of this code of ethics free of charge from our website, www.prgx.com.ITEM 11. Executive CompensationThe information required by Item 11 of this Form 10-K is incorporated by reference to the information contained in the sections captioned “ExecutiveCompensation”, “Information about the Board of Directors and Committees of the Board of Directors”, and “Report of the Compensation Committee” of theProxy Statement.ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder MattersExcept as set forth below, the information required by Item 12 of this Form 10-K is incorporated by reference to the information contained in the sectioncaptioned “Ownership of Directors, Principal Shareholders and Certain Executive Officers” of the Proxy Statement.Securities Authorized for Issuance Under Equity Compensation PlansDuring 2018, the Company had two shareholder approved stock-based compensation plans under which equity awards have been granted: (1) the 2008Equity Incentive Plan (“2008 EIP”) and (2) the 2017 Equity Incentive Compensation Plan ("2017 EICP").Under the 2008 EIP, previously approved by our Board of Directors, we reserved shares of common stock for issuance in the form of incentive and non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units and other incentive awards. Pursuant to amendments to the 2008 EIPthat were approved by the Board of Directors and the Company's shareholders, 10,600,000 shares were reserved for issuance under the 2008 EIP.On June 27, 2017, the shareholders approved the 2017 EICP which applies to awards granted on or after June 27, 2017. Under the 2017 EICP, theCompany may grant incentive and non-qualified stock options, stock appreciation rights, restricted stock, deferred stock, restricted stock units, performanceunits, performance shares, dividend equivalents, bonus shares, and other stock-based or cash-based awards. The maximum number of shares of common stockthat may be issued under the 2017 EICP is 3,400,000 shares plus that number of shares of common stock subject to awards granted under the 2008 EIP thatwere outstanding when the 2017 EICP became effective.81The following table presents certain information with respect to compensation plans under which equity securities of the registrant were authorized forissuance as of December 31, 2018:Plan category Number of securities to beissued upon exercise ofoutstanding options,warrants and rights Weighted-average exerciseprice of outstandingoptions, warrants and rights Number of securities remainingavailable for future issuanceunder equity compensationplans (excluding securitiesreflected in column (a)) (a) (b) (c)Equity compensation plans approved by security holders: 2008 EIP (1), (2) 1,924,957 $6.37 —2017 EICP (2), (3) 744,347 7.35 2,897,664Equity compensation plans not approved by security holders(2), (4) 699,107 7.75 —Total (2) 3,368,411 $6.54 2,897,664(1)This amount includes 1,738,039 stock options and 186,918 performance-based restricted stock units (“PBUs”) and restricted stock units ("RSUs") that, if and whenvested, will be settled in shares of PRGX common stock. For PBUs for which the performance period has ended as of December 31 2018, the amounts reported in thetable reflect the expected number of PBUs to be earned based on actual performance measured at the end of the performance period.(2)Weighted-average exercise price of outstanding options only.(3)This amount includes 500,000 stock options and 244,347 PBUs and RSUs that, if and when vested, will be settled in shares of PRGX common stock.(4)This amount includes 612,778 options and 86,329 PBUs that represent inducement grants, which were made outside of the existing stock-based compensation plans.ITEM 13. Certain Relationships and Related Transactions, and Director IndependenceThe information required by Item 13 of this Form 10-K is incorporated by reference to the information contained in the sections captioned “Informationabout the Board of Directors and Committees of the Board of Directors”, “Executive Compensation – Employment Agreements” and “Certain Transactions”of the Proxy Statement.ITEM 14. Principal Accountant Fees and ServicesThe information required by Item 14 of this Form 10-K is incorporated by reference to the information contained in the sections captioned “PrincipalAccountant Fees and Services” of the Proxy Statement.82PART IVITEM 15. Exhibits, Financial Statement Schedules(a) Documents filed as part of the report(1) Consolidated Financial Statements:For the following consolidated financial information included herein, see Index on Page 37. Page No.Report of Independent Registered Public Accounting Firm38Consolidated Statements of Operations for the Years Ended December 31, 2018, 2017 and 201639Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2018, 2017 and 201640Consolidated Balance Sheets as of December 31, 2018 and 201741Consolidated Statements of Shareholders' Equity for the Years Ended December 31, 2018, 2017 and 201642Consolidated Statements of Cash Flows for the Years Ended December 31, 2018, 2017 and 201643Notes to Consolidated Financial Statements44(2) Financial Statement Schedule:Schedule II - Valuation and Qualifying Accounts83SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTSFOR THE YEARS ENDED DECEMBER 31, 2018, 2017 AND 2016(In thousands) Additions Deductions Description Balance atBeginningof Year Charge(Credit) toCosts andExpenses Credit tothe respectivereceivable (1) Balance atEnd ofYear2018 Allowance for doubtful accounts receivable $1,499 (346) (129) $1,024Allowance for doubtful employee advances and miscellaneousreceivables $292 (48) (68) $176Deferred tax valuation allowance $34,776 (3,179) — $31,5972017 Allowance for doubtful accounts receivable $799 724 (24) $1,499Allowance for doubtful employee advances and miscellaneousreceivables $500 1,665 (1,873) $292Deferred tax valuation allowance $50,114 (15,338) — $34,7762016 Allowance for doubtful accounts receivable $930 (129) (2) $799Allowance for doubtful employee advances and miscellaneousreceivables $681 2,184 (2,365) $500Deferred tax valuation allowance $45,565 4,549 — $50,114-----------------------------(1)Write-offs net of recoveries.83(3) ExhibitsExhibitNumber Description2.1 Asset Purchase Agreement dated October 6, 2016, by and among PRGX USA, INC., PRGX UK LTD., Cost & ComplianceAssociates, LLC, Cost & Compliance Associates Limited and Robert F. Donohue (incorporated by reference to Exhibit 2.1to the Registrant’s Form 8-K filed on October 6, 2016). 2.2 Agreement and Plan of Merger dated October 25, 2016, by and among PRGX USA, Inc., Braveheart Merger Co., Lavante,Inc., PointGuard Ventures I, L.P. and Krish Panu (incorporated by reference to Exhibit 2.1 to the Registrant’s Form 8-K filedon October 25, 2016). 2.3 First Amendment to Asset Purchase Agreement, dated February 23, 2017, by and among PRGX USA, INC., PRGX UK LTD.,Cost & Compliance Associates, LLC, Cost & Compliance Associates Limited and Robert F. Donohue (incorporated byreference to Exhibit 2.2 to the Registrant’s Form 8-K filed on February 27, 2017). 3.1 Restated Articles of Incorporation of the Registrant, as amended and corrected through August 11, 2006 (restated solely forthe purpose of filing with the Commission) (incorporated by reference to Exhibit 3.1 to the Registrant’s Form 8-K filed onAugust 17, 2006). 3.1.1 Articles of Amendment of the Registrant effective January 20, 2010 (incorporated by reference to Exhibit 3.1 to theRegistrant’s Form 8-K filed on January 25, 2010). 3.2 Amended and Restated Bylaws of the Registrant (incorporated by reference to Exhibit 3.1 to the Registrant’s Form 8-Kfiled on December 11, 2007). 4.1 Specimen Common Stock Certificate (incorporated by reference to Exhibit 4.1 to the Registrant’s Form 10-K for the yearended December 31, 2001). 4.2 See Restated Articles of Incorporation and Bylaws of the Registrant, filed as Exhibits 3.1 and 3.2, respectively. +10.1 Form of Indemnification Agreement between the Registrant and Directors and certain officers, including named executiveofficers, of the Registrant (incorporated by reference to Exhibit 10.4 to the Registrant’s Form 10-K for the year endedDecember 31, 2003). 10.2 Noncompetition, Nonsolicitation and Confidentiality Agreement among The Profit Recovery Group International, Inc.,Howard Schultz & Associates International, Inc., Howard Schultz, Andrew Schultz and certain trusts, dated January 24,2002 (incorporated by reference to Exhibit 10.34 to the Registrant’s Form 10-K for the year ended December 31, 2001). 10.3 Office Lease Agreement between Galleria 600, LLC and PRG-Schultz International, Inc. (incorporated by reference toExhibit 10.43 to the Registrant’s Form 10-K for the year ended December 31, 2001). 10.4 First Amendment to Office Lease Agreement between Galleria 600, LLC and PRG-Schultz International, Inc. (incorporatedby reference to Exhibit 10.65 to the Registrant’s Form 10-K for the year ended December 31, 2002). 10.5 Third Amendment of Lease, entered into as of January 8, 2014, by and between Galleria 600, LLC and the Registrant(incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K filed on January 14, 2014). +10.6 PRGX Global, Inc. 2008 Equity Incentive Plan, as Amended and Restated effective April 25, 2014 (incorporated byreference to Exhibit 10.1 to the Registrant’s Form 8-K filed on June 30, 2014). +10.7 Form of Restricted Stock Agreement for Non-Employee Directors under the PRGX Global, Inc. 2008 Equity Incentive Plan(incorporated by reference to Exhibit 10.2 to the Registrant’s Form 8-K filed on June 4, 2008). +10.8 Form of Non-Qualified Stock Option Agreement for Non-Employee Directors under the PRGX Global, Inc. 2008 EquityIncentive Plan (incorporated by reference to Exhibit 10.3 to the Registrant’s Form 8-K filed on June 4, 2008). 84+10.9 Form of Nonqualified Stock Option Agreement under the PRGX Global, Inc. 2008 Equity Incentive Plan (incorporated byreference to Exhibit 10.2 to the Registrant’s Form 8-K filed on January 14, 2009). +10.10 Form of Restricted Stock Agreement under the PRGX Global, Inc. 2008 Equity Incentive Plan (incorporated by reference toExhibit 10.3 to the Registrant’s Form 8-K filed on January 14, 2009). +10.11 Form of Performance-Based Restricted Stock Unit Agreement for Employees under the PRGX Global, Inc. 2008 EquityIncentive Plan (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K filed on April 1, 2015). +10.12 Form of PRGX Global, Inc. Restricted Stock Unit Agreement for Non-Employee Directors under the PRGX Global, Inc.2008 Equity Incentive Plan (incorporated by reference to Exhibit 10.3 to the Registrant’s Form 8-K filed on June 30, 2014). +10.13 Form of PRGX Global, Inc. Stock Appreciation Rights Agreement under the PRGX Global, Inc. 2008 Equity Incentive Plan(incorporated by reference to Exhibit 10.2 to the Registrant's Form 8-K filed on April 29, 2016). +10.14 PRGX Global, Inc. 2017 Equity Incentive Compensation Plan effective as of April 25, 2017 (incorporated by reference toExhibit 10.1 to the Registrant’s Form 8-K filed on June 30, 2017). +10.15 PRGX Global, Inc. Deferred Compensation Plan for Non-Employee Directors (incorporated by reference to Exhibit 10.2 tothe Registrant’s Form 8-K filed on June 30, 2014). 10.16 Amended & Restated Revolving Credit Agreement dated as of December 23, 2014, among PRGX Global, Inc. and PRGXUSA, Inc., as borrowers (the "Borrowers"), the lenders from time to time party thereto (the "Lender") and SunTrust Bank, asadministrative agent and issuing bank (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K filed onDecember 30, 2014). 10.17 Subsidiary Guaranty Agreement dated as of January 19, 2010 by and among PRGX Global, Inc. (formerly PRG-SchultzInternational, Inc), and PRGX USA, Inc. (formerly PRG-Schultz USA, Inc.), as borrowers, each of the subsidiaries of PRGXGlobal, Inc. listed on Schedule I thereto, as guarantors (the "Guarantors"), and SunTrust Bank, as administrative agent(incorporated by reference to Exhibit 10.2 to the Registrant’s Form 8-K filed on January 25, 2010). 10.18 Security Agreement dated January 19, 2010 among PRGX Global, Inc. (formerly PRG-Schultz International, Inc), PRGXUSA, Inc. (formerly PRG-Schultz USA, Inc.), and the other direct and indirect subsidiaries of PRGX Global, Inc. signatorythereto, as grantors, in favor of SunTrust Bank, as administrative agent (incorporated by reference to Exhibit 10.3 to theRegistrant’s Form 8-K filed on January 25, 2010). 10.19 Equity Pledge Agreement dated as of January 19, 2010, made by PRGX Global, Inc. (formerly PRG-Schultz International,Inc), PRGX USA, Inc. (formerly PRG-Schultz USA, Inc.), and the other direct and indirect subsidiaries of PRGX Global, Inc.signatory thereto, as grantors, in favor of SunTrust Bank, as administrative agent (incorporated by reference to Exhibit 10.4to the Registrant’s Form 8-K filed on January 25, 2010). 10.20 Loan Documents Modification Agreement dated June 21, 2010, by and among the Borrowers, the Guarantors and theLender (incorporated by reference to Exhibit 10.29.4 to the Registrant’s Form 10-K filed on March 15, 2012). 10.21 Second Loan Documents Modification Agreement dated September 30, 2010, by and among the Borrowers and the Lender(incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K filed on October 1, 2010). 10.22 Third Loan Documents Modification Agreement dated October 17, 2011, by and among the Borrowers and the Lender(incorporated by reference to Exhibit 10.29.6 to the Registrant’s Form 10-K filed on March 15, 2012) 10.23 Fourth Loan Documents Modification Agreement, entered into as of January 17, 2014, by and among the Borrowers, theGuarantors and the Lender (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K filed on January 24,2014). 10.24 Fifth Loan Documents Modification Agreement and Waiver, entered into as of May 8, 2014, by and among the Borrowers,the Guarantors and the Lender (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 10-Q filed on May 12,2014). 8510.25 Sixth Loan Documents Modification Agreement and Waiver, entered into as of August 7, 2014, by and among theBorrowers, the Guarantors and the Lender (incorporated by reference to Exhibit 10.4 to the Registrant’s Form 10-Q filed onAugust 7, 2014). 10.26 Seventh Loan Documents Modification Agreement, entered into as of October 23, 2014, by and among the Borrowers, theGuarantors and the Lender (incorporated by reference to Exhibit 10.29 to the Registrant's Form 10-K filed on March 13,2015). 10.27 Eighth Loan Documents Modification Agreement, entered into as of December 23, 2014, by and among the Borrowers, theGuarantors and the Lender (incorporated by reference to Exhibit 10.2 to the Registrant’s Form 8-K filed on December 30,2014). 10.28 Ninth Loan Documents Modification Agreement, entered into as of December 21, 2016, by and among the Borrowers, theGuarantors and the Lender (incorporated by reference to Exhibit 10.26 to the Registrant’s Form 10-K filed on March 16,2017). 10.29 Tenth Loan Documents Modification Agreement, entered into as of May 4, 2017, by and among the Borrowers, theGuarantors and the Lender (incorporated by reference to Exhibit 10.2 to the Registrant’s Form 10-Q filed on May 9, 2017). 10.30 Eleventh Loan Documents Modification Agreement, entered into as of March 21, 2018 by and among the Borrowers, theGuarantors, and the Lender (incorporated by reference to Exhibit 10.1 to the Registrant's Form 10-Q filed on May 9, 2018). 10.31 Twelfth Loan Documents Modification Agreement dated September 28, 2018, by and among the Borrowers, theGuarantors, and the Lender (incorporated by reference to Exhibit 10.1 to the Registrant's Form 8-K filed on October 2,2018). 10.32 Thirteenth Loan Documents Modification Agreement dated November 5, 2018, by and among the Borrowers, theGuarantors and the Lender (incorporated by reference to Exhibit 10.4 to the Registrant's Form 10-Q filed on November 8,2018). +10.33 Employment Agreement between the Registrant and Victor A. Allums dated November 28, 2008 (incorporated by referenceto Exhibit 10.31 to the Registrant’s Form 10-K filed on March 29, 2010). +10.34 Employment Agreement between the Registrant and Ronald E. Stewart dated December 13, 2013 (incorporated byreference to Exhibit 10.1 to the Registrant’s Form 8-K filed on December 19, 2013). +10.35 Amendment of Employment Agreement dated April 27, 2016, by and between Ronald E. Stewart and the Registrant(incorporated by reference to Exhibit 10.1 to the Registrant's Form 8-K filed on April 29, 2016). +10.36 Second Amendment of Employment Agreement dated October 25, 2017, by and between Ronald E. Stewart and theRegistrant (incorporated by reference to Exhibit 10.1 to the Registrant's Form 8-K filed on October 26, 2017). +10.37 PRGX Non-Qualified Stock Option Agreement dated October 25, 2017, by and between Ronald E. Stewart and theRegistrant (incorporated by reference to Exhibit 10.2 to the Registrant's Form 8-K filed on October 26, 2017). +10.38 Employment Agreement between the Registrant and Michael Cochrane dated April 24, 2014 (incorporated by reference toExhibit 10.1 to the Registrant’s Form 8-K filed on April 29, 2014). +10.39 Separation Agreement dated May 16, 2018, by and between Peter Limeri and the Company (incorporated by reference toExhibit 10.2 to the Registrant's Form 8-K filed on May 18, 2018). +10.40 Employment Agreement dated August 30, 2018, by and between Peter Limeri and the Company (incorporated by referenceto Exhibit 10.1 to the Registrant's Form 8-K filed on August 30, 2018). +10.41 Separation Agreement dated September 27, 2018, by and between Deborah M. Schleicher and the Company (incorporatedby reference to Exhibit 10.2 to the Registrant's Form 8-K filed on October 2, 2018). +10.42 Employment Agreement dated January 3, 2019, by and between Kurt J. Abkemeier and the Company (incorporated byreference to Exhibit 10.1 to the Registrant's Form 8-K filed on January 7, 2019). 8610.43 Agreement dated as of November 10, 2016 by and among PRGX Global, Inc. and Matthew A. Drapkin, Northern RightCapital Management, L.P., Northern Right Capital (QP), L.P., and BC Advisors, LLC (incorporated by reference to Exhibit10.1 to Registrant's Form 8-K filed on November 10, 2016). +10.44 Form of Restricted Stock Agreement for Employees under the PRGX Global, Inc. 2017 Equity Incentive CompensationPlan (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K filed on June 4, 2018). +10.45 Form of Performance-Based Restricted Stock Unit Agreement for Employees under the PRGX Global, Inc. 2017 EquityIncentive Compensation Plan (incorporated by reference to Exhibit 10.2 to the Registrant’s Form 8-K filed on June 4,2018). +10.46 Form of Restricted Stock Unit Agreement for Employees under the PRGX Global, Inc. 2017 Equity IncentiveCompensation Plan (incorporated by reference to Exhibit 10.3 to the Registrant’s Form 8-K filed on June 4, 2018). +10.47 Form of Non-Qualified Stock Option Agreement for Employees under the PRGX Global, Inc. 2017 Equity IncentiveCompensation Plan (incorporated by reference to Exhibit 10.4 to the Registrant’s Form 8-K filed on June 4, 2018). +10.48 Form of Stock Appreciation Rights Agreement for Employees under the PRGX Global, Inc. 2017 Equity IncentiveCompensation Plan (incorporated by reference to Exhibit 10.5 to the Registrant’s Form 8-K filed on June 4, 2018). +10.49 Form of Restricted Stock Agreement for Non-Employee Directors under the PRGX Global, Inc. 2017 Equity IncentiveCompensation Plan (incorporated by reference to Exhibit 10.6 to the Registrant’s Form 8-K filed on June 4, 2018). +10.50 Form of Restricted Stock Unit Agreement for Non-Employee Directors under the PRGX Global, Inc. 2017 Equity IncentiveCompensation Plan (incorporated by reference to Exhibit 10.7 to the Registrant’s Form 8-K filed on June 4, 2018). +10.51 Form of Non-Qualified Stock Option Agreement for Non-Employee Directors under the PRGX Global, Inc. 2017 EquityIncentive Compensation Plan (incorporated by reference to Exhibit 10.8 to the Registrant’s Form 8-K filed on June 4,2018). 10.52 Credit Agreement dated as of March 14, 2019 among PRGX Global, Inc. and PRGX USA, Inc., as borrowers, Bank ofAmerica, N.A. and Synovus Bank, as lenders, and Bank of America, N.A., as administrative agent, letter-of-credit issuer, andswingline lender. 10.53 Security and Pledge Agreement dated as of March 14, 2019 among PRGX Global, Inc., PRGX USA, Inc., and the otherdirect and indirect subsidiaries of PRGX Global, Inc. signatory thereto, as grantors, in favor of Bank of America, N.A., asadministrative agent. 14.1 Code of Ethics for Senior Financial Officers (incorporated by reference to Exhibit 14.1 to the Registrant’s Form 10-K for theyear ended December 31, 2003). 21.1 Subsidiaries of the Registrant. 23.1 Consent of BDO USA, LLP. 31.1 Certification of the Chief Executive Officer, pursuant to Rule 13a-14(a) or 15d-14(a), for the year ended December 31,2018. 31.2 Certification of the Chief Financial Officer, pursuant to Rule 13a-14(a) or 15d-14(a), for the year ended December 31, 2018. 32.1 Certification of the Chief Executive Officer and Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, for the yearended December 31, 2018.101.INS XBRL Instance Document 101.SCH XBRL Taxonomy Extension Schema 101.CAL XBRL Taxonomy Extension Calculation Linkbase 101.DEF XBRL Taxonomy Extension Definition Linkbase 101.LAB XBRL Taxonomy Extension Label Linkbase 87101.PRE XBRL Taxonomy Extension Presentation Linkbase+ Designates management contract or compensatory plan or arrangement.88ITEM 16. Form 10-K SummaryNone.89SIGNATURESPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on itsbehalf by the undersigned, thereunto duly authorized. PRGX GLOBAL, INC. By: /s/ RONALD E. STEWART Ronald E. Stewart President, Chief Executive Officer, Director(Principal Executive Officer) Date: March 18, 2019Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of theregistrant and in the capacities and on the dates indicated.Signature Title Date /s/ RONALD E. STEWART President, Chief Executive Officer and Director March 18, 2019Ronald E. Stewart (Principal Executive Officer) /s/ KURT J. ABKEMEIER Chief Financial Officer, Treasurer and Controller March 18, 2019Kurt J. Abkemeier (Principal Financial and Accounting Officer) /s/ MATTHEW A. DRAPKIN Director March 18, 2019Matthew A. Drapkin /s/ WILLIAM F. KIMBLE Director March 18, 2019William F. Kimble /s/ MYLLE H. MANGUM Director March 18, 2019Mylle H. Mangum /s/ GREGORY J. OWENS Executive Chairman of the Board March 18, 2019Gregory J. Owens /s/ KEVIN S. COSTELLO Director March 18, 2019Kevin S. Costello /s/ JOSEPH E. WHITTERS Lead Director March 18, 2019Joseph E. Whitters 90EXECUTION VERSIONCREDIT AGREEMENTDated as of March 14, 2019amongPRGX GLOBAL, INC.andPRGX USA, INC., as the Borrowers,THE SUBSIDIARIES OF THE BORROWERS IDENTIFIED HEREIN, as the Guarantors,BANK OF AMERICA, N.A., as Administrative Agent, Swingline Lender and L/C Issuer,andTHE OTHER LENDERS PARTY HERETOArranged By:MERRILL LYNCH, PIERCE, FENNER & SMITH, INCORPORATED, as Sole Lead Arranger and Sole BookrunnerTABLE OF CONTENTSPageARTICLE I DEFINITIONSAND ACCOUNTING TERMS11.01Defined Terms. 11.02Other Interpretive Provisions. 321.03Accounting Terms. 331.04Rounding. 341.05Exchange Rates; Currency Equivalents. 341.06Change of Currency. 341.07Times of Day. 351.08Letter of Credit Amounts. 35ARTICLE II THEREVOLVING COMMITMENTS AND CREDIT EXTENSIONS352.01Revolving Loans. 352.02Borrowings, Conversions and Continuations of Loans. 372.03Letters of Credit. 392.04Swingline Loans. 482.05Prepayments. 512.06Termination or Reduction of Aggregate Revolving Commitments. 522.07Repayment of Loans. 532.08Interest. 532.09Fees. 532.10Computation of Interest and Fees; Retroactive Adjustments of Applicable Rate. 542.11Evidence of Debt. 552.12Payments Generally; Administrative Agent’s Clawback. 552.13Sharing of Payments by Lenders. 572.14Cash Collateral. 582.15Defaulting Lenders. 59ARTICLE III TAXES,YIELD PROTECTION AND ILLEGALITY613.01Taxes. 613.02Illegality. 663.03Inability to Determine Rates. 673.04Increased Costs; Reserves on Eurocurrency Rate Loans. 683.05Compensation for Losses. 693.06Mitigation Obligations; Replacement of Lenders. 703.07Successor LIBOR. 703.08Survival. 71ARTICLE IV CONDITIONSPRECEDENT TO CREDIT EXTENSIONS724.01Conditions of Initial Credit Extension. 724.02Conditions to all Credit Extensions. 75ARTICLE VREPRESENTATIONS AND WARRANTIES755.01Existence, Qualification and Power. 755.02Authorization; No Contravention. 765.03Governmental Authorization; Other Consents. 765.04Binding Effect. 765.05Financial Statements; No Material Adverse Effect. 765.06Litigation. 775.07No Default. 775.08Ownership of Property. 775.09Environmental Compliance. 775.10Insurance. 785.11Taxes. 785.12ERISA Compliance. 785.13Subsidiaries. 795.14Margin Regulations; Investment Company Act. 795.15Disclosure. 805.16Compliance with Laws. 805.17Intellectual Property; Licenses, Etc. 805.18Solvency. 805.19Perfection of Security Interests in the Collateral. 815.20Business Locations; Taxpayer Identification Number. 815.21OFAC. 815.22Anti-Corruption Laws. 815.23No EEA Financial Institution. 815.24No Casualty. 815.25Designation as Senior Indebtedness. 81ARTICLE VIAFFIRMATIVE COVENANTS826.01Financial Statements. 826.02Certificates; Other Information. 826.03Notices. 846.04Payment of Taxes. 846.05Preservation of Existence, Etc. 856.06Maintenance of Properties. 856.07Maintenance of Insurance. 856.08Compliance with Laws. 866.09Books and Records. 866.10Inspection Rights. 866.11Use of Proceeds. 866.12ERISA Compliance. 876.13Additional Guarantors. 876.14Pledged Assets. 876.15Material Contracts. 896.16Depository and Treasury Management Relationship. 896.17Anti-Corruption Laws. 896.18Merchant Services Settlement Account Standing Transfer Order. 896.19Post-Closing Covenants. 89ARTICLE VII NEGATIVECOVENANTS907.01Liens. 907.02Investments. 917.03Indebtedness. 927.04Fundamental Changes. 947.05Dispositions. 947.06Restricted Payments. 947.07Change in Nature of Business. 957.08Transactions with Affiliates. 957.09Burdensome Agreements. 957.10Use of Proceeds. 967.11Financial Covenants. 967.12Prepayment and Amendment of Other Indebtedness, Etc. 977.13Organization Documents; Fiscal Year; Legal Name, State of Formation; Form of Entity andAccounting Changes. 977.14Ownership of Subsidiaries. 977.15Sale Leasebacks. 987.16Sanctions. 987.17Anti-Corruption Laws. 987.18Designation of Subsidiaries as Immaterial Subsidiaries. 98ARTICLE VIII EVENTS OFDEFAULT AND REMEDIES988.01Events of Default. 988.02Remedies Upon Event of Default. 1018.03Application of Funds. 101ARTICLE IXADMINISTRATIVE AGENT1029.01Appointment and Authority. 1029.02Rights as a Lender. 1039.03Exculpatory Provisions. 1039.04Reliance by Administrative Agent. 1049.05Delegation of Duties. 1049.06Resignation of Administrative Agent. 1059.07Non-Reliance on Administrative Agent and Other Lenders. 1069.08No Other Duties; Etc. 1069.09Administrative Agent May File Proofs of Claim; Credit Bidding. 1079.10Collateral and Guaranty Matters. 1089.11Secured Cash Management Agreements. 1089.12ERISA Matters. 109ARTICLE XGUARANTY11110.01The Guaranty. 11110.02Obligations Unconditional. 11110.03Reinstatement. 11210.04Certain Additional Waivers. 11210.05Remedies. 11210.06Rights of Contribution. 11310.07Guarantee of Payment; Continuing Guarantee. 113ARTICLE XIMISCELLANEOUS11411.01Amendments, Etc. 11411.02Notices; Effectiveness; Electronic Communications. 11611.03No Waiver; Cumulative Remedies; Enforcement. 11811.04Expenses; Indemnity; Damage Waiver. 11811.05Payments Set Aside. 12011.06Successors and Assigns. 12111.07Treatment of Certain Information; Confidentiality. 12511.08Rights of Setoff. 12611.09Interest Rate Limitation. 12711.10Counterparts; Integration; Effectiveness. 12711.11Survival of Representations and Warranties. 12711.12Severability. 12811.13Replacement of Lenders. 12811.14Governing Law; Jurisdiction; Etc. 12911.15Waiver of Jury Trial. 13011.16No Advisory or Fiduciary Responsibility. 13011.17Electronic Execution of Assignments and Certain Other Documents. 13111.18USA PATRIOT Act Notice. 13111.19Judgment Currency. 13111.20Acknowledgement and Consent to Bail-In of EEA Financial Institutions. 13211.21Subordination of Intercompany Indebtedness. 13211.22Concerning Joint and Several Liability. 13211.23Borrower Agent. 134SCHEDULES2.01 Revolving Commitments and Applicable Percentages5.10 Insurance5.13 Subsidiaries5.17 IP Rights5.20(a) Locations of Real Property5.20(b) Location of Chief Executive Office, Taxpayer Identification Number, Etc.5.20(c) Changes in Legal Name, State of Formation and Structure5.20(d) Deposit and Investment Accounts7.01 Liens Existing on the Closing Date7.02 Investments Existing on the Closing Date7.03 Indebtedness Existing on the Closing Date11.02 Certain Addresses for NoticesEXHIBITS1.01 Form of Secured Party Designation Notice2.02 Form of Loan Notice2.04 Form of Swingline Loan Notice2.05 Form of Notice of Loan Prepayment2.11(a) Form of Note3.01 Forms of U.S. Tax Compliance Certificates6.02 Form of Compliance Certificate6.13 Form of Joinder Agreement11.06(b) Form of Assignment and Assumption11.06(b)(iv) Form of Administrative QuestionnaireCREDIT AGREEMENTThis CREDIT AGREEMENT is entered into as of March 14, 2019 among PRGX Global, Inc., a Georgia corporation (“PRGX”),and PRGX USA, Inc., a Georgia corporation (“PUSA”, and together with PRGX, the “Borrowers” and each, a “Borrower”), theGuarantors (defined herein), the Lenders (defined herein) and BANK OF AMERICA, N.A., as Administrative Agent, Swingline Lenderand L/C Issuer.The Borrowers have requested that the Lenders provide credit facilities for the purposes set forth herein, and the Lenders arewilling to do so on the terms and conditions set forth herein.In consideration of the mutual covenants and agreements herein contained, the parties hereto covenant and agree as follows:Article I DEFINITIONS AND ACCOUNTING TERMS1.01 Defined Terms.As used in this Agreement, the following terms shall have the meanings set forth below:“2017 Audited Financial Statements” means the audited consolidated balance sheet of PRGX and its Subsidiaries for the fiscalyear ended December 31, 2017, and the related consolidated statements of income or operations, shareholders’ equity and cash flowsof PRGX and its Subsidiaries for such fiscal year, including the notes thereto.“Accounts” shall mean “accounts” as such term is defined in the Uniform Commercial Code, and, in any event, includes,without limitation, (a) all accounts receivable, and all other rights to payment for property sold, leased, licensed, assigned or otherwisedisposed of, for a policy of insurance issued or to be issued, for a secondary obligation incurred or to be incurred, for energy providedor to be provided, for the use or hire of a vessel under a charter or other contract, arising out of the use of a credit card or charge card,or for services rendered or to be rendered or in connection with any other transaction (whether or not yet earned by performance), (b)all rights in, to, and under all purchase orders or receipts for goods or services, (c) all rights to any goods represented by any of theforegoing, including, without limitation, all rights of rescission, replevin, reclamation, and stoppage in transit and rights to returned,reclaimed, or repossessed goods, (d) all reserves and credit balances held by each Borrower with respect to any such accountsreceivable or account debtors, (e) all books, records, computer tapes, programs and ledger books arising therefrom or relating thereto,and (f) all guarantees and collateral security of any kind, given by any account debtor or any other Person with respect to any of theforegoing, all whether now owned or existing or hereafter acquired or arising, by or in favor of, either Borrower.“Acquisition”, by any Person, means the acquisition by such Person, in a single transaction or in a series of related transactions,of either (a) all or any substantial portion of the property of, or a line of business, division of or other business unit of, another Person or(b) at least a majority of the Voting Stock of, or other controlling ownership interest in, another Person, in each case whether or notinvolving a merger or consolidation with such other Person.“Acquisition Notice” has the meaning specified in the definition of “Permitted Acquisition”.“Act” has the meaning specified in Section 11.18.“Administrative Agent” means Bank of America (or any of its designated branch offices or affiliates) in its capacity asadministrative agent under any of the Loan Documents, or any successor administrative agent.“Administrative Agent’s Office” means, with respect to any currency, the Administrative Agent’s address and, as appropriate,account as set forth on Schedule 11.02 with respect to such currency, or such other address or account with respect to such currency asthe Administrative Agent may from time to time notify PRGX and the Lenders.“Administrative Questionnaire” means an Administrative Questionnaire in substantially the form of Exhibit 11.06(b)(iv) or anyother form approved by the Administrative Agent.“Affiliate” means, with respect to a specified Person, another Person that directly, or indirectly through one or moreintermediaries, Controls or is Controlled by or is under common Control with the Person specified.“Agent Parties” has the meaning specified in Section 11.02(c).“Aggregate Revolving Commitments” means the Revolving Commitments of all the Lenders. The initial amount of theAggregate Revolving Commitments in effect on the Closing Date is $60,000,000.“Agreement” means this Credit Agreement.“Agreement Currency” has the meaning specified in Section 11.19.“Alternative Currency” means the Euro and the Sterling; provided that for each Alternative Currency, such requested currencyis an Eligible Currency.“Alternative Currency Equivalent” means, at any time, with respect to any amount denominated in Dollars, the equivalentamount thereof in the applicable Alternative Currency as determined by the Administrative Agent or the L/C Issuer, as the case may be,at such time on the basis of the Spot Rate (determined in respect of the most recent Revaluation Date) for the purchase of suchAlternative Currency with Dollars.“Applicable Percentage” means with respect to any Lender at any time, the percentage (carried out to the ninth decimal place)of the Aggregate Revolving Commitments represented by such Lender’s Revolving Commitment at such time; provided that if thecommitment of each Lender to make Revolving Loans and the obligation of the L/C Issuer to make L/C Credit Extensions have beenterminated pursuant to Section 8.02 or if the Aggregate Revolving Commitments have expired, then the Applicable Percentage of eachLender shall be determined based on the Applicable Percentage of such Lender most recently in effect, giving effect to any subsequentassignments. The initial Applicable Percentage of each Lender is set forth opposite the name of such Lender on Schedule 2.01 or in theAssignment and Assumption or other documentation pursuant to which such Lender becomes a party hereto, as applicable. TheApplicable Percentages shall be subject to adjustment as provided in Section 2.15.“Applicable Rate” means the following percentages per annum, based upon the Consolidated Leverage Ratio as set forth in themost recent Compliance Certificate received by the Administrative Agent pursuant to Section 6.02(b):PricingTierConsolidated Leverage RatioCommitment FeeEurocurrency Rate Loans, LIBORDaily Floating Rate Loans andLetter of Credit FeesBase Rate Loans1< 1.25 to 1.00.15%1.50%0.50%2> 1.25 to 1.0 but< 1.75 to 1.00.25%1.75%0.75%3> 1.75 to 1.0 but< 2.25 to 1.00.25%2.00%1.00%4> 2.25 to 1.00.25%2.25%1.25%Any increase or decrease in the Applicable Rate resulting from a change in the Consolidated Leverage Ratio shall become effective asof the first Business Day immediately following the date a Compliance Certificate is delivered pursuant to Section 6.02(b); provided,however, that if a Compliance Certificate is not delivered when due in accordance with such Section, then, upon the request of theRequired Lenders, Pricing Tier 4 shall apply as of the first Business Day after the date on which such Compliance Certificate wasrequired to have been delivered and shall remain in effect until the first Business Day immediately following the date on which suchCompliance Certificate is delivered in accordance with Section 6.02(b), whereupon the Applicable Rate shall be adjusted based uponthe calculation of the Consolidated Leverage Ratio contained in such Compliance Certificate. The Applicable Rate in effect from theClosing Date through the first Business Day immediately following the date a Compliance Certificate is required to be deliveredpursuant to Section 6.02(b) for the fiscal quarter ending June 30, 2019 shall be determined based upon Pricing Tier 1.“Applicable Time” means, with respect to any borrowings and payments in any Alternative Currency, the local time in the placeof settlement for such Alternative Currency as may be determined by the Administrative Agent or the L/C Issuer, as the case may be, tobe necessary for timely settlement on the relevant date in accordance with normal banking procedures in the place of payment.“Approved Fund” means any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entityor an Affiliate of an entity that administers or manages a Lender.“Arranger” means Merrill Lynch, Pierce, Fenner & Smith, Incorporated (or any other registered broker-dealer wholly-owned byBank of America Corporation to which all or substantially all of Bank of America Corporation’s or any of its subsidiaries’ investmentbanking, commercial lending services or related businesses may be transferred following the date of this Agreement), in its capacity assole lead arranger and sole bookrunner.“Assignment and Assumption” means an assignment and assumption entered into by a Lender and an Eligible Assignee (withthe consent of any party whose consent is required by Section 11.06(b)), and accepted by the Administrative Agent, in substantially theform of Exhibit 11.06(b) or any other form (including electronic documentation generated by use of an electronic platform) approvedby the Administrative Agent.“Attributable Indebtedness” means, with respect to any Person on any date, (a) in respect of any capital lease, the capitalizedamount thereof that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP, (b) in respectof any Synthetic Lease Obligation, the capitalized amount of the remaining lease payments under the relevant lease that would appearon a balance sheet of such Person prepared as of such date in accordance with GAAP if such lease were accounted for as a capitallease, (c) in respect of any Securitization Transaction, the outstanding principal amount of such financing, after taking into accountreserve accounts and making appropriate adjustments, determined by the Administrative Agent in its reasonable judgment and (d) inrespect of any Sale and Leaseback Transaction, the present value (discounted in accordance with GAAP at the debt rate implied in theapplicable lease) of the obligations of the lessee for rental payments during the term of such lease.“Auto-Extension Letter of Credit” has the meaning specified in Section 2.03(b)(iii).“Auto-Reinstatement Letter of Credit” has the meaning specified in Section 2.03(b)(iv).“Availability Period” means, with respect to the Revolving Commitments, the period from and including the Closing Date to theearliest of (a) the Maturity Date, (b) the date of termination of the Aggregate Revolving Commitments pursuant to Section 2.06, and (c)the date of termination of the commitment of each Lender to make Loans and of the obligation of the L/C Issuer to make L/C CreditExtensions pursuant to Section 8.02.“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority inrespect of any liability of an EEA Financial Institution.“Bail-In Legislation” means, with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of theEuropean Parliament and of the Council of the European Union, the implementing law for such EEA Member Country from time totime which is described in the EU Bail-In Legislation Schedule.“Bank of America” means Bank of America, N.A. and its successors.“Base Rate” means for any day a fluctuating rate of interest per annum equal to the highest of (a) the Federal Funds Rate plus0.50%, (b) the rate of interest in effect for such day as publicly announced from time to time by Bank of America as its “prime rate”and (c) the LIBOR Daily Floating Rate plus 1.0%; provided that if the Base Rate shall be less than zero, such rate shall be deemed zerofor purposes of this Agreement. The “prime rate” is a rate set by Bank of America based upon various factors including Bank ofAmerica’s costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing someloans, which may be priced at, above, or below such announced rate. Any change in such “prime rate” announced by Bank of Americashall take effect at the opening of business on the day specified in the public announcement of such change.“Base Rate Loan” means a Loan that bears interest based on the Base Rate. All Base Rate Loans shall be denominated inDollars.“Beneficial Ownership Certification” means a certification regarding beneficial ownership required by the Beneficial OwnershipRegulation.“Beneficial Ownership Regulation” means 31 C.F.R. § 1010.230.“Benefit Plan” means any of (a) an “employee benefit plan” (as defined in ERISA) that is subject to Title I of ERISA, (b) a“plan” as defined in Section 4975 of the Internal Revenue Code or (c) any Person whose assets include (for purposes of ERISA Section3(42) or otherwise for purposes of Title I of ERISA or Section 4975 of the Internal Revenue Code) the assets of any such “employeebenefit plan” or “plan”.“Borrower” or “Borrowers” have the meanings specified in the introductory paragraph hereto.“Borrower Materials” has the meaning specified in Section 6.02.“Borrowing” means a borrowing consisting of simultaneous Loans of the same Type, in the same currency and, in the case ofEurocurrency Rate Loans, having the same Interest Period made by each of the Lenders pursuant to Section 2.01.“Business Day” means any day other than a Saturday, Sunday or other day on which commercial banks are authorized to closeunder the Laws of, or are in fact closed in, the state where the Administrative Agent’s Office is located and: (a) if such day relates toany interest rate settings as to a Eurocurrency Rate Loan denominated in Dollars or a LIBOR Daily Floating Rate Loan, any fundings,disbursements, settlements and payments in Dollars in respect of any such Eurocurrency Rate Loan or any such LIBOR Daily FloatingRate Loan, or any other dealings in Dollars to be carried out pursuant to this Agreement in respect of any such Eurocurrency Rate Loanor LIBOR Daily Floating Rate Loan, means any such day that is also a day on which dealings in Dollar deposits are conducted by andbetween banks in the London interbank eurodollar market; (b) if such day relates to any interest rate settings as to a Eurocurrency RateLoan denominated in Euro, any fundings, disbursements, settlements and payments in Euro in respect of any such Eurocurrency RateLoan, or any other dealings in Euro to be carried out pursuant to this Agreement in respect of any such Eurocurrency Rate Loan, meansa TARGET Day; (c) if such day relates to any interest rate settings as to a Eurocurrency Rate Loan denominated in a currency otherthan Dollars or Euro, means any such day on which dealings in deposits in the relevant currency are conducted by and between banksin the London or other applicable offshore interbank market for such currency; and (d) if such day relates to any fundings,disbursements, settlements and payments in a currency other than Dollars or Euro in respect of a Eurocurrency Rate Loan denominatedin a currency other than Dollars or Euro, or any other dealings in any currency other than Dollars or Euro to be carried out pursuant tothis Agreement in respect of any such Eurocurrency Rate Loan (other than any interest rate settings), means any such day on whichbanks are open for foreign exchange business in the principal financial center of the country of such currency.“Cash Collateralize” means to pledge and deposit with or deliver to the Administrative Agent, for the benefit of one or more ofthe L/C Issuer or the Lenders, as collateral for L/C Obligations or obligations of the Lenders to fund participations in respect of L/CObligations, (a) cash or deposit account balances, (b) backstop letters of credit entered into on terms, from issuers and in amountssatisfactory to the Administrative Agent and the L/C Issuer and/or (c) if the Administrative Agent and the L/C Issuer shall agree in theirsole discretion, other credit support, in each case pursuant to documentation in form and substance satisfactory to the AdministrativeAgent and the L/C Issuer. “Cash Collateral” shall have a meaning correlative to the foregoing and shall include the proceeds of suchcash collateral and other credit support.“Cash Equivalents” means, as at any date, (a) securities issued or directly and fully guaranteed or insured by the United Statesor any agency or instrumentality thereof (provided that the full faith and credit of the United States is pledged in support thereof) havingmaturities of not more than twelve months from the date of acquisition, (b) Dollar denominated time deposits and certificates of depositof (i) any Lender, (ii) any domestic commercial bank of recognized standing having capital and surplus in excess of $500,000,000 or(iii) any bank whose short term commercial paper rating from S&P is at least A-1 or the equivalent thereof or from Moody’s is at leastP-1 or the equivalent thereof (any such bank being an “Approved Bank”), in each case with maturities of not more than two hundredand seventy (270) days from the date of acquisition, (c) commercial paper and variable or fixed rate notes issued by any ApprovedBank (or by the parent company thereof) or any variable rate notes issued by, or guaranteed by, any domestic corporation rated A-1 (orthe equivalent thereof) or better by S&P or P-1 (or the equivalent thereof) or better by Moody’s and maturing within six months of thedate of acquisition, (d) repurchase agreements entered into by any Person with a bank or trust company (including any of the Lenders)or recognized securities dealer having capital and surplus in excess of $500,000,000 for direct obligations issued by or fully guaranteedby the United States in which such Person shall have a perfected first priority security interest (subject to no other Liens) and having, onthe date of purchase thereof, a fair market value of at least one hundred percent (100%) of the amount of the repurchase obligations, (e)investments, classified in accordance with GAAP as current assets, in money market investment programs registered under theInvestment Company Act of 1940 which are administered by reputable financial institutions having capital of at least $500,000,000 andthe portfolios of which are limited to Investments of the character described in the foregoing subdivisions (a) through (d), and (f)comparable (as reasonably determined by PRGX) foreign investments to the Cash Equivalents described in clauses (a) through (e)above.“Cash Management Agreement” means any agreement that is not prohibited by the terms hereof to provide treasury or cashmanagement services, including any one or more of the following: deposit accounts, overnight draft, credit cards, debit cards, p-cards(including purchasing cards and commercial cards), funds transfer, automated clearinghouse, zero balance accounts, returned checkconcentration, controlled disbursement, lockbox, account reconciliation and reporting and trade finance services and other cashmanagement services.“Cash Management Bank” means any Person that (a) at the time it enters into a Cash Management Agreement, is a Lender orthe Administrative Agent or an Affiliate of a Lender or the Administrative Agent, (b) in the case of any Cash Management Agreementin effect on or prior to the Closing Date, is, as of the Closing Date or within thirty (30) days thereafter, a Lender or the AdministrativeAgent or an Affiliate of a Lender or the Administrative Agent and a party to a Cash Management Agreement or (c) within thirty (30)days after the time it enters into the applicable Cash Management Agreement, becomes a Lender, the Administrative Agent or anAffiliate of a Lender or the Administrative Agent, in each case, in its capacity as a party to such Cash Management Agreement.“Change in Law” means the occurrence, after the Closing Date, of any of the following: (a) the adoption or taking effect of anyLaw, (b) any change in any Law or in the administration, interpretation, implementation or application thereof by any GovernmentalAuthority or (c) the making or issuance of any request, rule, guideline or directive (whether or not having the force of Law) by anyGovernmental Authority; provided that notwithstanding anything herein to the contrary, (i) the Dodd-Frank Wall Street Reform andConsumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (ii) allrequests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on BankingSupervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to BaselIII, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued.“Change of Control” means an event or series of events by which:(a) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of1934, but excluding any employee benefit plan of such person or its subsidiaries, and any person or entity acting in its capacityas trustee, agent or other fiduciary or administrator of any such plan) becomes the “beneficial owner” (as defined in Rules 13d-3and 13d-5 under the Securities Exchange Act of 1934, except that a person or group shall be deemed to have “beneficialownership” of all Equity Interests that such person or group has the right to acquire, whether such right is exercisableimmediately or only after the passage of time (such right, an “option right”)), directly or indirectly, of thirty-five percent (35%)or more of the Voting Stock of, or other controlling ownership interest in, PRGX representing thirty-five percent (35%) or moreof the combined voting power of all Voting Stock of, or other controlling ownership interest in, PRGX on a fully diluted basis(and taking into account all such securities that such person or group has the right to acquire pursuant to any option right);(b) during any period of twenty-four (24) consecutive months, a majority of the members of the board of directors orother equivalent governing body of PRGX cease to be composed of individuals (i) who were members of that board orequivalent governing body on the first day of such period, (ii) whose election or nomination to that board or equivalentgoverning body was approved by individuals referred to in clause (i) above constituting at the time of such election ornomination at least a majority of that board or equivalent governing body or (iii) whose election or nomination to that board orother equivalent governing body was approved by individuals referred to in clauses (i) and (ii) above constituting at the time ofsuch election or nomination at least a majority of that board or equivalent governing body; or(c) PUSA shall cease to be a wholly owned Subsidiary of PRGX.“Clean-up Fiscal Quarter” has the meaning specified in Section 7.11(a).“Closing Date” means March 14, 2019.“Collateral” means a collective reference to all property with respect to which Liens in favor of the Administrative Agent, for thebenefit of itself and the other holders of the Obligations, are purported to be granted pursuant to and in accordance with the terms of theCollateral Documents.“Collateral Documents” means a collective reference to this Agreement (insofar as containing any security interest grant), theSecurity Agreement and other security documents as may be executed and delivered by any Loan Party pursuant to the terms of Section6.14 or any of the other Loan Documents.“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et seq.).“Compliance Certificate” means a certificate substantially in the form of Exhibit 6.02.“Connection Income Taxes” means Other Connection Taxes that are imposed on or measured by net income (howeverdenominated) or that are franchise Taxes or branch profits Taxes.“Consolidated Capital Expenditures” means, for any period, for PRGX and its Subsidiaries on a consolidated basis, all capitalexpenditures.“Consolidated Fixed Charge Coverage Ratio” means, as of any date of determination, the ratio of (a) the sum of (i) ConsolidatedNet Adjusted EBITDA for the most recently completed four fiscal quarters minus (ii) Consolidated Capital Expenditures for the mostrecently completed four fiscal quarters to (b) Consolidated Fixed Charges for the most recently completed four fiscal quarters.“Consolidated Fixed Charges” means, for any period, for PRGX and its Subsidiaries on a consolidated basis, withoutduplication, an amount equal to the sum of: (a) the cash portion of Consolidated Interest Charges for such period (net of cash interestincome actually received for such period); plus (b) federal, state, local and foreign income taxes paid in such period net of any refundswith respect to federal, state, local and foreign income taxes (whether paid in the same period or a prior period) received during suchperiod; plus (c) the current portion of long-term Indebtedness (other than Indebtedness under the Aggregate Revolving Commitments)as of the last day of such period as set forth in the applicable financial statements for such period (excluding, for the avoidance ofdoubt, any Earn-Out Payments or Deferred Payments); plus (d) Restricted Payments made pursuant to Section 7.06(a) (other than thoseRestricted Payments made to Loan Parties or wholly-owned Subsidiaries) and Section 7.06(d) during such period. Notwithstanding theforegoing, and for the avoidance of doubt, Restricted Payments made pursuant to Section 7.06(c) and the netting of shares (for cashlessexercises of stock options and tax withholding payments) shall not be included pursuant to clause (d) immediately above in anycalculation of Consolidated Fixed Charges (it being acknowledged and agreed that any tax withholding payments in connection with acashless exercise of stock options that are included as a positive adjustment to Consolidated Gross Adjusted EBITDA (as a result ofclause (e) of the definition thereof) are intended to be included as a negative adjustment to Consolidated Net Adjusted EBITDA(pursuant to clause (b) of the definition thereof)).“Consolidated Funded Indebtedness” means, as of any date of determination, for PRGX and its Subsidiaries on a consolidatedbasis, without duplication, the sum of (a) the outstanding principal amount of all obligations, whether current or long-term, forborrowed money (including Obligations) and all obligations evidenced by bonds, debentures, notes, loan agreements or other similarinstruments; (b) all purchase money indebtedness; (c) the maximum amount available to be drawn under issued and outstanding lettersof credit (including standby and commercial), bankers’ acceptances, bank guaranties, surety bonds and similar instruments; (d) allobligations in respect of the deferred purchase price of property or services (other than trade accounts payable in the ordinary course ofbusiness), including earnout obligations; (e) all Attributable Indebtedness; (f) all obligations to purchase, redeem, retire, defease orotherwise make any payment prior to the Maturity Date in respect of any Equity Interests or any warrant, right or option to acquire suchEquity Interest, valued, in the case of a redeemable preferred interest, at the greater of its voluntary or involuntary liquidationpreference plus accrued and unpaid dividends; (g) all Guarantees with respect to outstanding Indebtedness of the types specified inclauses (a) through (f) above of another Person; and (h) all Indebtedness of the types referred to in clauses (a) through (g) above of anypartnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which either Borroweror a Subsidiary thereof is a general partner or joint venturer, unless such Indebtedness is expressly made non-recourse to the Borrowersor such Subsidiary.“Consolidated Gross Adjusted EBITDA” means, for any period, the following (determined on a consolidated basis and withoutduplication) for PRGX and its Subsidiaries: their Consolidated Net Income for such period, adjusted (up or down, as applicable, and inaccordance with GAAP (if and to the extent applicable)) by the following (to the extent included in calculating such Consolidated NetIncome):(a) net interest income/expense,(b) federal, state, local and foreign income tax expense,(c) depreciation and amortization expense,(d) restructuring/transformation expenses (which, for the avoidance of doubt, includes dark lease obligations andexcludes severance obligations),(e) expenses in connection with stock-based compensation,(f) acquisition transaction costs,(g) acquisition earn-out obligation expenses,(h) fair value adjustments to acquisition-related contingent consideration,(i) tangible and intangible asset impairment charges other than write-downs or write-offs of inventory and accountsreceivable,(j) litigation costs and litigation settlements,(k) severance expenses, and(l) net foreign currency transaction gains or losses on short-term intercompany balances.“Consolidated Interest Charges” means, for any period, for PRGX and its Subsidiaries on a consolidated basis, the sum of (a) allinterest, premium payments, debt discount, fees, charges and related expenses in connection with borrowed money (includingcapitalized interest) or in connection with the deferred purchase price of assets, in each case to the extent treated as interest inaccordance with GAAP, plus (b) the portion of rent expense with respect to such period under capital leases that is treated as interest inaccordance with GAAP plus (c) the implied interest component of Synthetic Lease Obligations with respect to such period.“Consolidated Leverage Ratio” means, as of any date of determination, the ratio of (a) Consolidated Funded Indebtedness as ofsuch date to (b) Consolidated Net Adjusted EBITDA for the most recently completed four fiscal quarters.“Consolidated Net Adjusted EBITDA” means, for any period, the following determined on a consolidated basis, withoutduplication, for PRGX and its Subsidiaries: (a) Consolidated Gross Adjusted EBITDA for such period; as (b) adjusted to reverse thecash portion of stock-based compensation (to the extent included in calculating such Consolidated Gross Adjusted EBITDA); and as (c)adjusted to reverse the net aggregate amount (if any) included in determining Consolidated Gross Adjusted EBITDA under clauses (g)(acquisition earn-out obligation expenses) and (k) (severance expenses) of the definition thereof; provided that the reversal (whetherpositive or negative) under clause (c) shall be limited to the amount (if any) by which the absolute value of such reversal with respect toclauses (g) and (k) of Consolidated Gross Adjusted EBITDA, taken together, (determined prior to giving effect to this proviso) exceedsfifteen percent (15%) of Consolidated Gross Adjusted EBITDA (clause (a) above).“Consolidated Net Income” means, at any date of determination, the net income (or loss) of PRGX and its Subsidiaries on aconsolidated basis in accordance with GAAP for the most recently completed period of four fiscal quarters; provided that ConsolidatedNet Income shall exclude (to the extent otherwise included): (a) any extraordinary gains or losses; (b) any gains attributable to write-upsof assets; (c) any Equity Interest of PRGX and its Subsidiaries in the unremitted earnings of any Person that is not a Subsidiary; (d) anyincome (or loss) of any Person accrued prior to the date it becomes a Subsidiary or is merged into or consolidated with PRGX or aSubsidiary or the date that such Person’s assets are acquired by PRGX or such Subsidiary; and (e) any gains or losses from discontinuedoperations.“Contractual Obligation” means, as to any Person, any provision of any security issued by such Person or of any agreement,instrument or other undertaking to which such Person is a party or by which it or any of its property is bound.“Contribution Share” has the meaning specified in Section 10.06(c).“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management orpolicies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled”have meanings correlative thereto. Without limiting the generality of the foregoing, a Person shall be deemed to be Controlled byanother Person if such other Person possesses, directly or indirectly, power to vote ten percent (10%) or more of the securities havingordinary voting power for the election of directors, managing general partners or the equivalent.“Credit Extension” means each of the following: (a) a Borrowing and (b) an L/C Credit Extension.“Debtor Relief Laws” means the Bankruptcy Code of the United States, and all other liquidation, conservatorship, bankruptcy,assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor reliefLaws of the United States or other applicable jurisdictions from time to time in effect.“Default” means any event or condition that constitutes an Event of Default or that, with the giving of any notice, the passage oftime, or both, would be an Event of Default.“Default Rate” means (a) with respect to any Obligation for which a rate is specified, a rate per annum equal to two percent(2%) in excess of the rate otherwise applicable thereto and (b) with respect to any Obligation for which a rate is not specified oravailable, a rate per annum equal to the Base Rate plus the Applicable Rate for Revolving Loans that are Base Rate Loans plus twopercent (2%), in each case, to the fullest extent permitted by applicable Law.“Defaulting Lender” means, subject to Section 2.15(d), any Lender that (a) has failed to (i) fund all or any portion of its Loanswithin two (2) Business Days of the date such Loans were required to be funded hereunder unless such Lender notifies theAdministrative Agent and the Borrowers in writing that such failure is the result of such Lender’s determination that one or moreconditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specificallyidentified in such writing) has not been satisfied, or (ii) pay to the Administrative Agent, the L/C Issuer, the Swingline Lender or anyother Lender any other amount required to be paid by it hereunder (including in respect of its participation in Letters of Credit orSwingline Loans) within two (2) Business Days of the date when due, (b) has notified the Borrowers, the Administrative Agent, the L/CIssuer or the Swingline Lender in writing that it does not intend to comply with its funding obligations hereunder, or has made a publicstatement to that effect (unless such writing or public statement relates to such Lender’s obligation to fund a Loan hereunder and statesthat such position is based on such Lender’s determination that a condition precedent to funding (which condition precedent, togetherwith any applicable default, shall be specifically identified in such writing or public statement) cannot be satisfied), (c) has failed, withinthree (3) Business Days after written request by the Administrative Agent or the Borrowers, to confirm in writing to the AdministrativeAgent and the Borrowers that it will comply with its prospective funding obligations hereunder (provided that such Lender shall ceaseto be a Defaulting Lender pursuant to this clause (c) upon receipt of such written confirmation by the Administrative Agent and theBorrowers), or (d) has, or has a direct or indirect parent company that has, (i) become the subject of a proceeding under any DebtorRelief Law, (ii) had appointed for it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors orsimilar Person charged with reorganization or liquidation of its business or assets, including the Federal Deposit Insurance Corporationor any other state or federal regulatory authority acting in such a capacity or (iii) become the subject of a Bail-In Action; provided that aLender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any Equity Interest in that Lender or anydirect or indirect parent company thereof by a Governmental Authority so long as such ownership interest does not result in or providesuch Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs ofattachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contractsor agreements made with such Lender. Any determination by the Administrative Agent that a Lender is a Defaulting Lender under anyone or more of clauses (a) through (d) above, and of the effective date of such status, shall be conclusive and binding absent manifesterror, and such Lender shall be deemed to be a Defaulting Lender (subject to Section 2.15(d)) as of the date established therefor by theAdministrative Agent in a written notice of such determination, which shall be delivered by the Administrative Agent to the Borrowers,the L/C Issuer, the Swingline Lender and each other Lender promptly following such determination.“Deferred Payments” shall mean (a) deferred cash payments (whether or not conditional) paid or payable in connection with aPermitted Acquisition (or, to the extent paid or payable in connection with an Acquisition that occurred prior to the date hereof, anAcquisition that met the requirements of a “Permitted Acquisition” under the Existing Credit Agreement), whether or not evidenced bya promissory note and whether or not such payment obligations would be reflected as a liability on the consolidated balance sheet ofPRGX and its Subsidiaries and (b) cash payments in respect of Indebtedness of any acquired business assumed by PRGX or any of itsSubsidiaries in conjunction with a Permitted Acquisition (or, to the extent paid or payable in connection with an Acquisition thatoccurred prior to the date hereof, an Acquisition that met the requirements of a “Permitted Acquisition” under the Existing CreditAgreement), but in either case excluding Earn-Out Payments and reasonable and customary consulting fees.“Designated Jurisdiction” means any country or territory to the extent that such country or territory is the subject of anySanction.“Disposition” or “Dispose” means the sale, transfer, license, lease or other disposition of any property by any Loan Party or anySubsidiary, including any Sale and Leaseback Transaction, any transfer of assets by way of a division, and any sale, assignment,transfer or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith,but excluding any Recovery Event.“Dollar” and “$” mean lawful money of the United States.“Dollar Equivalent” means, at any time, (a) with respect to any amount denominated in Dollars, such amount, and (b) withrespect to any amount denominated in any Alternative Currency, the equivalent amount thereof in Dollars as determined by theAdministrative Agent or the L/C Issuer, as the case may be, at such time on the basis of the Spot Rate (determined in respect of the mostrecent Revaluation Date) for the purchase of Dollars with such Alternative Currency.“Domestic Subsidiary” means any Subsidiary that is organized under the Laws of any state of the United States or the District ofColumbia. The status of a Subsidiary as a Domestic Subsidiary is unaffected by the fact that the Equity Interests in such Subsidiary maybe owned by an entity that itself is a Foreign Subsidiary.“Earn-Out Payments” shall mean contingent future payments, based on performance, paid or payable in connection with aPermitted Acquisition (or, to the extent paid or payable in connection with an Acquisition that occurred prior to the date hereof, anAcquisition that met the requirements of a “Permitted Acquisition” under the Existing Credit Agreement), whether or not evidenced bya promissory note and whether or not such payment obligations would be reflected as a liability on the consolidated balance sheet ofPRGX and its Subsidiaries.“EEA Financial Institution” means (a) any credit institution or investment firm established in any EEA Member Country whichis subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent ofan institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is aSubsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.“EEA Member Country” means any of the member states of the European Union, Iceland, Liechtenstein, and Norway.“EEA Resolution Authority” means any public administrative authority or any person entrusted with public administrativeauthority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA FinancialInstitution.“Eligible Assignee” means any Person that meets the requirements to be an assignee under Sections 11.06(b) (subject to suchconsents, if any, as may be required under Section 11.06(b)(iii)).“Eligible Currency” means any lawful currency other than Dollars that is readily available, freely transferable and convertibleinto Dollars in the international interbank market available to the Lenders in such market and as to which a Dollar Equivalent may bereadily calculated. If, after the designation by the Lenders of any currency as an Alternative Currency, any change in currency controlsor exchange regulations or any change in the national or international financial, political or economic conditions are imposed in thecountry in which such currency is issued, result in, in the reasonable opinion of the Administrative Agent (in the case of any Loans tobe denominated in an Alternative Currency) or the L/C Issuer (in the case of any Letter of Credit to be denominated in an AlternativeCurrency), (a) such currency no longer being readily available, freely transferable and convertible into Dollars, (b) a Dollar Equivalentis no longer readily calculable with respect to such currency, (c) providing such currency is impracticable for the Lenders or (d) nolonger a currency in which the Required Lenders are willing to make such Credit Extensions (each of (a), (b), (c), and (d) a“Disqualifying Event”), then the Administrative Agent shall promptly notify the Lenders and PRGX, and such country’s currency shallno longer be an Alternative Currency until such time as the Disqualifying Event(s) no longer exist. Within, five (5) Business Days afterreceipt of such notice from the Administrative Agent, the Borrowers shall repay all Loans in such currency to which the DisqualifyingEvent applies or convert such Loans into the Dollar Equivalent of Loans in Dollars, subject to the other terms contained herein.“Environmental Laws” means any and all federal, state, local and foreign statutes, laws, regulations, ordinances, rules,judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or governmental restrictions relating topollution and the protection of the environment or the release of any Hazardous Materials into the environment, including those relatedto hazardous substances or wastes, air emissions and discharges to waste or public systems.“Environmental Liability” means any liability, contingent or otherwise (including any liability for damages, costs ofenvironmental remediation, fines, penalties or indemnities), of any Loan Party or any Subsidiary directly or indirectly resulting from orbased upon (a) violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal ofany Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or threatened release of any Hazardous Materials intothe environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed withrespect to any of the foregoing.“Equity Interests” means, with respect to any Person, all of the shares of capital stock of (or other ownership or profit interestsin) such Person, all of the warrants, options or other rights for the purchase or acquisition from such Person of shares of capital stock of(or other ownership or profit interests in) such Person, all of the securities convertible into or exchangeable for shares of capital stock of(or other ownership or profit interests in) such Person or warrants, rights or options for the purchase or acquisition from such Person ofsuch shares (or such other interests), and all of the other ownership or profit interests in such Person (including partnership, member ortrust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests areoutstanding on any date of determination.“ERISA” means the Employee Retirement Income Security Act of 1974.“ERISA Affiliate” means any trade or business (whether or not incorporated) under common control with either Borrowerwithin the meaning of Section 414(b) or (c) of the Internal Revenue Code (and Sections 414(m) and (o) of the Internal Revenue Codefor purposes of provisions relating to Section 412 of the Internal Revenue Code).“ERISA Event” means (a) a Reportable Event with respect to a Pension Plan; (b) the withdrawal of either Borrower or anyERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA during a plan year in which such entity was a substantialemployer (as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is treated as such a withdrawal under Section4062(e) of ERISA; (c) a complete or partial withdrawal by either Borrower or any ERISA Affiliate from a Multiemployer Plan ornotification that a Multiemployer Plan is in reorganization; (d) the filing of a notice of intent to terminate, the treatment of a PensionPlan amendment as a termination under Section 4041 or 4041A of ERISA, (e) the institution by the PBGC of proceedings to terminate aPension Plan; (f) any event or condition which constitutes grounds under Section 4042 of ERISA for the termination of, or theappointment of a trustee to administer, any Pension Plan; (g) the determination that any Pension Plan is considered an at-risk plan or aplan in endangered or critical status within the meaning of Sections 430, 431 and 432 of the Internal Revenue Code or Sections 303,304 and 305 of ERISA, (h) the imposition of any liability under Title IV of ERISA, other than for PBGC premiums due but notdelinquent under Section 4007 of ERISA, upon either Borrower or any ERISA Affiliate or (i) a failure by either Borrower or any ERISAAffiliate to meet all applicable requirements under the Pension Funding Rules in respect of a Pension Plan, whether or not waived, orthe failure by either Borrower or any ERISA Affiliate to make any required contribution to a Multiemployer Plan.“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule published by the Loan Market Association (orany successor person), as in effect from time to time.“Euro” and “€” mean the single currency of the Participating Member States.“Eurocurrency Rate” means, for any Interest Period with respect to a Eurocurrency Rate Loan, the rate per annum equal to theLondon Interbank Offered Rate (“LIBOR”) or a comparable or successor rate, which rate is approved by the Administrative Agent, aspublished by Bloomberg (or such other commercially available source providing such quotations as may be designated by theAdministrative Agent from time to time) at or about 11:00 a.m., London time on the Rate Determination Date, for deposits in therelevant currency with a term equivalent to such Interest Period; provided that (a) to the extent a comparable or successor rate isapproved by the Administrative Agent in connection herewith, the approved rate shall be applied in a manner consistent with marketpractice; provided, further that to the extent such market practice is not administratively feasible for the Administrative Agent, suchapproved rate shall be applied in a manner as otherwise reasonably determined by the Administrative Agent and (b) if the EurocurrencyRate shall be less than zero, such rate shall be deemed zero for purposes of this Agreement.“Eurocurrency Rate Loan” means a Loan that bears interest at a rate based on the definition of “Eurocurrency Rate.”Eurocurrency Rate Loans may be denominated in Dollars or in an Alternative Currency. All Loans denominated in an AlternativeCurrency must be Eurocurrency Rate Loans.“Event of Default” has the meaning specified in Section 8.01.“Excess Payment” has the meaning specified in Section 10.06(a).“Excluded Accounts” means (a) escrow accounts, (b) trust accounts, and (c) accounts functioning solely as payroll and/orpayroll tax disbursement accounts.“Excluded Merchant Services Assets” means any one or more of the following, in each case if (and to the extent) arising undera merchant services arrangement with SunTrust Bank or its Affiliates in effect as of the Closing Date whereby SunTrust Bank or suchAffiliate prohibits further encumbrances thereon: (a) reserve accounts and reserves, whether constituting deposit accounts or otherwise,established and maintained solely in connection with such arrangement; (b) one or more settlement accounts, whether constitutingdeposit accounts or otherwise, established and maintained solely in connection with such arrangement; (c) certain Accounts processedby such processor in connection with such arrangement; (d) proceeds of the foregoing; and (e) books and records relating to theforegoing. For the avoidance of doubt, “Excluded Merchant Services Assets” shall not include the amounts transferred from settlementaccounts subject to standing transfer orders pursuant to Section 6.18.“Excluded Property” means, with respect to any Loan Party, (a) any owned or leased real property, including fixtures to theextent the attachment or perfection of a Lien thereon cannot be effected by a filing with a jurisdiction’s central filing office pursuant tothe Uniform Commercial Code, (b) any IP Rights for which a perfected Lien thereon is not effected either by filing of a UniformCommercial Code financing statement or by appropriate evidence of such Lien being filed in either the United States Copyright Officeor the United States Patent and Trademark Office, (c) any personal property (other than personal property described in clause (b) above)for which the attachment or perfection of a Lien thereon is not governed by the Uniform Commercial Code, (d) the Equity Interests ofany direct Subsidiary of any Loan Party to the extent not required to be pledged to secure the Obligations pursuant to Section 6.14(a),(e) any property which, subject to the terms of Section 7.09, is subject to a Lien of the type described in Section 7.01(i) pursuant todocuments which prohibit such Loan Party from granting any other Liens in such property, (f) any intent-to-use trademark applicationprior to the filing of a “Statement of Use” or “Amendment to Allege Use” with respect thereto, to the extent, if any, that, and solelyduring the period, if any, in which, the grant of a security interest therein would impair the validity or enforceability of such intent-to-use trademark application under applicable Law, (g) Excluded Accounts, (h) Excluded Merchant Services Assets and (i) any rights orinterest in any contract, lease, permit, license, charter or license agreement covering real or personal property of the applicable grantor,as such, or any governmental approvals, if, to the extent and so long as under the terms of such contract, lease, permit, license, charteror license agreement, or such governmental approvals, or applicable Law with respect thereto, the valid grant of a security interest orlien therein to the Administrative Agent is prohibited and such prohibition has not been or is not waived or the consent of the otherparty to such contract, lease, permit, license, charter or license agreement, or governmental approval, has not been or is not otherwiseobtained; provided that the foregoing exclusion shall in no way be construed (i) to apply if any such prohibition is unenforceable underSections 9-401, 9-406(d), 9-407, 9-408 or 9-409 of the Uniform Commercial Code of any applicable state or other applicable Law or(ii) so as to limit, impair or otherwise affect the Administrative Agent’s unconditional continuing security interests in and liens upon anyrights or interests of the applicable grantor in or to monies due or to become due under any such contract, lease, permit, license, charteror license agreement (including any accounts).“Excluded Taxes” means any of the following Taxes imposed on or with respect to any Recipient or required to be withheld ordeducted from a payment to a Recipient, (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes,and branch profits Taxes, in each case, (i) imposed as a result of such Recipient being organized under the Laws of, or having itsprincipal office or, in the case of any Lender, its Lending Office located in, the jurisdiction imposing such Tax (or any politicalsubdivision thereof) or (ii) that are Other Connection Taxes, (b) in the case of a Lender, U.S. federal withholding Taxes imposed onamounts payable to or for the account of such Lender with respect to an applicable interest in a Loan or Revolving Commitmentpursuant to a Law in effect on the date on which (i) such Lender acquires such interest in the Loan or Revolving Commitment (otherthan pursuant to an assignment request by either Borrower under Section 11.13) or (ii) such Lender changes its Lending Office, exceptin each case to the extent that, pursuant to Section 3.01(a)(ii), 3.01(a)(iii) or 3.01(c), amounts with respect to such Taxes were payableeither to such Lender’s assignor immediately before such Lender became a party hereto or to such Lender immediately before itchanged its Lending Office, (c) Taxes attributable to such Recipient’s failure to comply with Section 3.01(e) and (d) any U.S. federalwithholding Taxes imposed pursuant to FATCA.“Existing Credit Agreement” means that certain Amended & Restated Revolving Credit Agreement, dated as of December 23,2014, by and among PRGX, PUSA, the several banks and other financial institutions and lenders from time to time party thereto andSunTrust Bank, in its capacity as administrative agent for the lenders, as amended and in effect immediately prior to the Closing Date.“Facility Office” means, with respect to any Lender, the office through which such Lender will perform its obligations under thisAgreement.“Facility Termination Date” means the date as of which all of the following shall have occurred: (a) all Revolving Commitmentshave terminated, (b) all Obligations arising under the Loan Documents have been paid in full (other than (i) contingent indemnificationand contingent expense reimbursement obligations for which no claim has been made and (ii) Letters of Credit that have been CashCollateralized or as to which other arrangements satisfactory to the Administrative Agent and the L/C Issuer have been made), and (c)all Letters of Credit have terminated, surrendered without draw, or expired (other than Letters of Credit that have been CashCollateralized or as to which other arrangements satisfactory to the Administrative Agent and the L/C Issuer have been made).“FASB ASC” means the Accounting Standards Codification of the Financial Accounting Standards Board.“FATCA” means Sections 1471 through 1474 of the Internal Revenue Code, as of the Closing Date (or any amended orsuccessor version that is substantively comparable and not materially more onerous to comply with), any current or future regulationsor official interpretations thereof and any agreements entered into pursuant to Section 1471(b)(1) of the Internal Revenue Code and anyfiscal or regulatory legislation, rule or practices adopted pursuant to any intergovernmental agreement, treaty or convention amongGovernmental Authorities and implementing such Sections of the Internal Revenue Code.“Federal Funds Rate” means, for any day, the rate per annum equal to the weighted average of the rates on overnight federalfunds transactions with members of the Federal Reserve System, as published by the Federal Reserve Bank of New York on theBusiness Day next succeeding such day; provided that (a) if such day is not a Business Day, the Federal Funds Rate for such day shallbe such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, (b) if nosuch rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate (roundedupward, if necessary, to a whole multiple of 1/100 of 1%) charged to Bank of America on such day on such transactions as determinedby the Administrative Agent and (c) if the Federal Funds Rate shall be less than zero, such rate shall be deemed zero for purposes ofthis Agreement.“Fee Letter” means the letter agreement, dated January 18, 2019 among the Borrowers, the Administrative Agent and theArranger.“Foreign Lender” means a Lender that is not a U.S. Person. For purposes of this definition, the United States, each State thereofand the District of Columbia shall be deemed to constitute a single jurisdiction.“Foreign Subsidiary” means any Subsidiary that is not a Domestic Subsidiary.“FRB” means the Board of Governors of the Federal Reserve System of the United States.“Fronting Exposure” means, at any time there is a Defaulting Lender, (a) with respect to the L/C Issuer, such DefaultingLender’s Applicable Percentage of the Outstanding Amount of all outstanding L/C Obligations other than L/C Obligations as to whichsuch Defaulting Lender’s participation obligation has been reallocated to other Lenders or Cash Collateralized in accordance with theterms hereof, and (b) with respect to the Swingline Lender, such Defaulting Lender’s Applicable Percentage of Swingline Loans otherthan Swingline Loans as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders in accordancewith the terms hereof.“Fund” means any Person (other than a natural Person) that is (or will be) engaged in making, purchasing, holding or otherwiseinvesting in commercial loans and similar extensions of credit in the ordinary course of its activities.“GAAP” means generally accepted accounting principles in the United States set forth from time to time in the opinions andpronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements andpronouncements of the Financial Accounting Standards Board (or agencies with similar functions of comparable stature and authoritywithin the accounting profession) including, without limitation, the FASB Accounting Standards Codification, that are applicable to thecircumstances as of the date of determination, consistently applied and subject to Section 1.03.“Governmental Authority” means the government of the United States or any other nation, or of any political subdivisionthereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercisingexecutive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including anysupra-national bodies such as the European Union or the European Central Bank).“Guarantee” means, as to any Person, (a) any obligation, contingent or otherwise, of such Person guaranteeing or having theeconomic effect of guaranteeing any Indebtedness or other obligation payable or performable by another Person (the “primaryobligor”) in any manner, whether directly or indirectly, and including any obligation of such Person, direct or indirect, (i) to purchase orpay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation, (ii) to purchase or leaseproperty, securities or services for the purpose of assuring the obligee in respect of such Indebtedness or other obligation of thepayment or performance of such Indebtedness or other obligation, (iii) to maintain working capital, equity capital or any other financialstatement condition or liquidity or level of income or cash flow of the primary obligor so as to enable the primary obligor to pay suchIndebtedness or other obligation, or (iv) entered into for the purpose of assuring in any other manner the obligee in respect of suchIndebtedness or other obligation of the payment or performance thereof or to protect such obligee against loss in respect thereof (inwhole or in part), or (b) any Lien on any assets of such Person securing any Indebtedness or other obligation of any other Person,whether or not such Indebtedness or other obligation is assumed by such Person (or any right, contingent or otherwise, of any holder ofsuch Indebtedness to obtain any such Lien). The amount of any Guarantee shall be deemed to be an amount equal to the stated ordeterminable amount of the related primary obligation, or portion thereof, in respect of which such Guarantee is made or, if not statedor determinable, the maximum reasonably anticipated liability in respect thereof as determined by the guaranteeing Person in goodfaith. The term “Guarantee” as a verb has a corresponding meaning.“Guarantors” means, collectively, (a) each Domestic Subsidiary of PRGX (other than PUSA) identified as a “Guarantor” on thesignature pages hereto, (b) each Person that joins as a Guarantor pursuant to Section 6.13 or otherwise, (c) with respect to Obligationsunder any Secured Cash Management Agreement under the Guaranty, each Borrower, and (d) the successors and permitted assigns ofthe foregoing.“Guaranty” means the Guaranty made by the Guarantors in favor of the Administrative Agent and the other holders of theObligations pursuant to Article X.“Hazardous Materials” means all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes orother pollutants, including petroleum or petroleum distillates, natural gas, natural gas liquids, asbestos or asbestos-containing materials,polychlorinated biphenyls, radon gas, toxic mold, infectious or medical wastes and all other substances, wastes, chemicals, pollutants,contaminants or compounds of any nature in any form regulated pursuant to any Environmental Law.“Honor Date” has the meaning set forth in Section 2.03(c).“IFRS” means international accounting standards within the meaning of IAS Regulation 1606/2002 to the extent applicable tothe relevant financial statements delivered under or referred to herein.“Immaterial Subsidiary” means any Subsidiary (other than a Loan Party) designated in writing by PRGX as an “ImmaterialSubsidiary” for purposes of the Loan Documents. As of the Closing Date, PRGX designates the following Subsidiaries as ImmaterialSubsidiaries: (a) PRG USA, Inc., PRGX Puerto Rico, Inc., PRGX Costa Rica, Inc., PRGX Chile, Inc., PRGX Holdings, Inc., PRGXAcquisition Corp., and PRGX Italy, Inc., each a Georgia corporation; (b) PRG-Schultz Venezuela, S.R.L., a Venezuela corporation; and(c) each Subsidiary (if any) omitted from Schedule 5.13 as of the Closing Date.“Impacted Loans” has the meaning specified in Section 3.03(a).“Incremental Facility Amendment” has the meaning specified in Section 2.01(b).“Incremental Request” has the meaning specified in Section 2.01(b).“Incremental Revolving Commitments” has the meaning specified in Section 2.01(b).“Incremental Revolving Loans” has the meaning specified in Section 2.01(b).“Indebtedness” means, as to any Person at a particular time, without duplication, all of the following, whether or not included asindebtedness or liabilities in accordance with GAAP:(a) all obligations for borrowed money and all obligations of such Person evidenced by bonds, debentures, notes, loanagreements or other similar instruments;(b) the maximum amount of all direct or contingent obligations arising under letters of credit (including standby andcommercial), bankers’ acceptances, bank guaranties, surety bonds and similar instruments;(c) the Swap Termination Value of any Swap Contract;(d) all obligations to pay the deferred purchase price of property or services (other than trade accounts payable in theordinary course of business);(e) indebtedness (excluding prepaid interest thereon) secured by a Lien on property owned or being purchased by suchPerson (including indebtedness arising under conditional sales or other title retention agreements), whether or not suchindebtedness shall have been assumed by such Person or is limited in recourse;(f) all Attributable Indebtedness;(g) all obligations to purchase, redeem, retire, defease or otherwise make any payment prior to the Maturity Date inrespect of any Equity Interests or any warrant, right or option to acquire such Equity Interest, valued, in the case of aredeemable preferred interest, at the greater of its voluntary or involuntary liquidation preference plus accrued and unpaiddividends;(h) all Guarantees of such Person in respect of any of the foregoing; and(i) all Indebtedness of the types referred to in clauses (a) through (h) above of any partnership or joint venture (otherthan a joint venture that is itself a corporation or limited liability company) in which such Person is a general partner or jointventurer, unless such Indebtedness is expressly made non-recourse to such Person.“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or onaccount of any obligation of any Loan Party under any Loan Document and (b) to the extent not otherwise described in clause (a),Other Taxes.“Indemnitee” has the meaning specified in Section 11.04(b).“Information” has the meaning specified in Section 11.07.“Interest Payment Date” means (a) as to any Eurocurrency Rate Loan, the last day of each Interest Period applicable to suchLoan and the Maturity Date; provided, however, that if any Interest Period for a Eurocurrency Rate Loan exceeds three months, therespective dates that fall every three months after the beginning of such Interest Period shall also be Interest Payment Dates; and (b) asto any Base Rate Loan (including a Swingline Loan) or any LIBOR Daily Floating Rate Loan, the first Business Day of each January,April, July and October and the Maturity Date.“Interest Period” means, as to each Eurocurrency Rate Loan, the period commencing on the date such Eurocurrency Rate Loanis disbursed or converted to or continued as a Eurocurrency Rate Loan and ending on the date one, two, three or six months thereafter(in each case, subject to availability), as selected by the Borrowers in their Loan Notice; provided that:(a) any Interest Period that would otherwise end on a day that is not a Business Day shall be extended to the nextsucceeding Business Day unless such Business Day falls in another calendar month, in which case such Interest Period shall endon the next preceding Business Day;(b) any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is nonumerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day ofthe calendar month at the end of such Interest Period; and(c) no Interest Period shall extend beyond the Maturity Date.“Internal Revenue Code” means the Internal Revenue Code of 1986.“Investment” means, as to any Person, any direct or indirect acquisition or investment by such Person, whether by means of (a)the purchase or other acquisition of Equity Interests of another Person, (b) a loan, advance or capital contribution to, Guarantee orassumption of debt of, or purchase or other acquisition of any other debt or equity participation or interest in, another Person, includingany partnership or joint venture interest in such other Person, or (c) an Acquisition. For purposes of covenant compliance, the amountof any Investment shall be the amount actually invested, without adjustment for subsequent increases or decreases in the value of suchInvestment.“IP Rights” means trademarks, service marks, trade names, copyrights, patents, patent rights, franchises, licenses and otherintellectual property rights.“IRS” means the United States Internal Revenue Service.“ISP” means, with respect to any Letter of Credit, the “International Standby Practices 1998” published by the Institute ofInternational Banking Law & Practice, Inc. (or such later version thereof as may be in effect at the time of issuance).“Issuer Documents” means with respect to any Letter of Credit, the Letter of Credit Application, and any other document,agreement and instrument entered into by the L/C Issuer and the Borrowers (or any Subsidiary) or in favor of the L/C Issuer and relatingto such Letter of Credit.“Joinder Agreement” means a joinder agreement substantially in the form of Exhibit 6.13 executed and delivered by a DomesticSubsidiary in accordance with the provisions of Section 6.13 or any other documents as the Administrative Agent shall deemappropriate for such purpose.“Judgment Currency” has the meaning specified in Section 11.19.“Laws” means, collectively, all international, foreign, federal, state and local statutes, treaties, rules, guidelines, regulations,ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by anyGovernmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders,directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each casewhether or not having the force of Law.“L/C Advance” means, with respect to each Lender, such Lender’s funding of its participation in any L/C Borrowing inaccordance with its Applicable Percentage. All L/C Advances shall be denominated in Dollars.“L/C Borrowing” means an extension of credit resulting from a drawing under any Letter of Credit which has not beenreimbursed on the date when made or refinanced as a Borrowing of Revolving Loans. All L/C Borrowings shall be denominated inDollars.“L/C Credit Extension” means, with respect to any Letter of Credit, the issuance thereof or extension of the expiry date thereof,or the increase of the amount thereof.“L/C Issuer” means Bank of America, through itself or through one of its designated Affiliates or branch offices, in its capacityas issuer of Letters of Credit hereunder, or any successor issuer of Letters of Credit hereunder.“L/C Obligations” means, as at any date of determination, the aggregate amount available to be drawn under all outstandingLetters of Credit plus the aggregate of all Unreimbursed Amounts, including all L/C Borrowings. For purposes of computing the amountavailable to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with Section1.08. For all purposes of this Agreement, if on any date of determination a Letter of Credit has expired by its terms but any amount maystill be drawn thereunder by reason of the operation of Rule 3.14 of the ISP, such Letter of Credit shall be deemed to be “outstanding”in the amount so remaining available to be drawn.“Lenders” means each of the Persons identified as a “Lender” on the signature pages hereto, each other Person that becomes a“Lender” in accordance with this Agreement and their successors and assigns and, unless the context requires otherwise, includes theSwingline Lender.“Lending Office” means, as to the Administrative Agent, the L/C Issuer or any Lender, the office or offices of such Persondescribed as such in such Person’s Administrative Questionnaire, or such other office or offices as such Person may from time to timenotify PRGX and the Administrative Agent, which office may include any Affiliate of such Person or any domestic or foreign branch ofsuch Person or such affiliate.“Letter of Credit” means any standby letter of credit issued hereunder providing for the payment of cash upon the honoring of apresentation thereunder. Letters of Credit may be issued in Dollars or in an Alternative Currency.“Letter of Credit Application” means an application and agreement for the issuance or amendment of a Letter of Credit in theform from time to time in use by the L/C Issuer.“Letter of Credit Expiration Date” means the day that is seven (7) days prior to the Maturity Date then in effect (or, if such dayis not a Business Day, the next preceding Business Day).“Letter of Credit Fee” has the meaning specified in Section 2.03(h).“Letter of Credit Sublimit” means an amount equal to the lesser of (a) $5,000,000 and (b) the Aggregate RevolvingCommitments. The Letter of Credit Sublimit is part of, and not in addition to, the Aggregate Revolving Commitments. As of the ClosingDate, the Letter of Credit Sublimit is set forth on Schedule 2.01.“Leverage Increase Period” has the meaning specified in Section 7.11(a).“LIBOR” has the meaning specified in the definition of Eurocurrency Rate.“LIBOR Daily Floating Rate” means the fluctuating rate of interest, which can change on each business day, equal to theLIBOR, or a comparable or successor rate which rate is approved by the Administrative Agent, as published on the applicableBloomberg screen page (or such other commercially available source providing such quotations as may be designated by theAdministrative Agent from time to time) at or about 11:00 a.m., London time, two (2) Business Days prior to the date in question, forDollar deposits with a term equivalent to a one (1) month term beginning on that date; provided that: (a) to the extent a comparable orsuccessor rate is approved by the Administrative Agent in connection herewith, the approved rate shall be applied in a mannerconsistent with market practice; provided, further that to the extent such market practice is not administratively feasible for theAdministrative Agent, such approved rate shall be applied in a manner as otherwise reasonably determined by the Administrative Agentand (b) if the LIBOR Daily Floating Rate shall be less than zero, such rate shall be deemed zero for purposes of the Loan Documents.“LIBOR Daily Floating Rate Loan” means a Loan that bears interest at a rate based on the definition of “LIBOR Daily FloatingRate.” All LIBOR Daily Floating Rate Loans shall be denominated in Dollars.“LIBOR Screen Rate” means the LIBOR quote on the applicable screen page the Administrative Agent designates to determineLIBOR (or such other commercially available source providing such quotations as may be designated by the Administrative Agent fromtime to time).“LIBOR Successor Rate Conforming Changes” means, with respect to any proposed LIBOR Successor Rate, any conformingchanges to the definition of Base Rate, Interest Period, timing and frequency of determining rates and making payments of interest andother administrative matters as may be appropriate, in the discretion of the Administrative Agent, to reflect the adoption of such LIBORSuccessor Rate and to permit the administration thereof by the Administrative Agent in a manner substantially consistent with marketpractice (or, if the Administrative Agent determines that adoption of any portion of such market practice is not administratively feasibleor that no market practice for the administration of such LIBOR Successor Rate exists, in such other manner of administration as theAdministrative Agent determines in consultation with PRGX).“Lien” means any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other),charge, or preference, priority or other security interest or preferential arrangement in the nature of a security interest of any kind ornature whatsoever (including any conditional sale or other title retention agreement, any easement, right of way or other encumbranceon title to real property, and any financing lease having substantially the same economic effect as any of the foregoing).“Loan” means an extension of credit by a Lender to the Borrowers under Article II in the form of a Revolving Loan or aSwingline Loan.“Loan Documents” means this Agreement, each Note, each Issuer Document, each Joinder Agreement, the CollateralDocuments and the Fee Letter (but specifically excluding any and all Cash Management Agreements and Secured Cash ManagementAgreements).“Loan Notice” means a notice of (a) a Borrowing of Revolving Loans, (b) a conversion of Loans from one Type to the other, or(c) a continuation of Eurocurrency Rate Loans, in each case pursuant to Section 2.02(a), which shall be substantially in the form ofExhibit 2.02 or such other form as may be approved by the Administrative Agent (including any form on an electronic platform orelectronic transmission system as shall be approved by the Administrative Agent) appropriately completed and signed by a ResponsibleOfficer of the Borrowers.“Loan Parties” means, collectively, each Borrower and each Guarantor.“Mandatory Cost” means any amount incurred periodically by any Lender during the term of this Agreement which constitutesfees, costs or charges imposed on lenders generally in the jurisdiction in which such Lender is domiciled, subject to regulation or has itsFacility Office by any Governmental Authority.“Master Agreement” has the meaning specified in the definition of “Swap Contract.”“Material Acquisition” means any Permitted Acquisition (or series of related or unrelated Permitted Acquisitions occurringwithin a six (6) month period) for which the total purchase consideration (including any assumed Indebtedness of the target of suchPermitted Acquisition) equals or exceeds $10,000,000. The calculation of such total purchase consideration shall be made by PRGX ona reasonable basis, and may take into account (among other things) any non-cash component of such purchase consideration and thereasonably estimated amount of any Deferred Payments and any Earn-Out Payments.“Material Adverse Effect” means any event, act, condition or occurrence of whatever nature (including any adversedetermination in any litigation, arbitration, or governmental investigation or proceeding), whether singularly or in conjunction with anyother event or events, act or acts, condition or conditions, occurrence or occurrences whether or not related, resulting in a materialadverse change in, or a material adverse effect on, (a) the business, results of operations, financial condition, assets or liabilities ofPRGX and its Subsidiaries taken as a whole, (b) the ability of either Borrower (or of the Loan Parties, taken as a whole) to perform anyof its or their respective obligations under the Loan Documents, (c) the rights and remedies of the Administrative Agent, the L/C Issuerand the Lenders under any of the Loan Documents or (d) the legality, validity or enforceability of any of the Loan Documents.“Material Contract” means, with respect to any Person, each contract or agreement (a) material to the business, condition(financial or otherwise), operations, performance, properties or prospects of such Person or (b) any other contract, agreement, permit orlicense, written or oral, of either Borrower and its Subsidiaries as to which the breach, nonperformance, cancellation or failure to renewby any party thereto, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.“Maturity Date” means March 14, 2024; provided, however, that if such date is not a Business Day, the Maturity Date shall bethe next preceding Business Day.“Maximum Rate” has the meaning specified in Section 11.09.“Minimum Collateral Amount” means, at any time, (a) with respect to Cash Collateral consisting of cash or deposit accountbalances provided to reduce or eliminate Fronting Exposure during any period when a Lender constitutes a Defaulting Lender, anamount equal to one hundred five percent (105%) of the Fronting Exposure of the L/C Issuer with respect to Letters of Credit issuedand outstanding at such time and (b) with respect to Cash Collateral consisting of cash or deposit account balances provided inaccordance with the provisions of Section 2.14(a)(i), (a)(ii) or (a)(iii), an amount equal to one hundred five percent (105%) of theOutstanding Amount of all L/C Obligations.“Moody’s” means Moody’s Investors Service, Inc. and any successor thereto.“Multiemployer Plan” means any employee benefit plan of the type described in Section 4001(a)(3) of ERISA, to which eitherBorrower or any ERISA Affiliate makes or is obligated to make contributions, or during the preceding five plan years, has made orbeen obligated to make contributions.“Multiple Employer Plan” means a Pension Plan which has two or more contributing sponsors (including either Borrower or anyERISA Affiliate) at least two of whom are not under common control, as such a plan is described in Section 4064 of ERISA.“Non-Consenting Lender” means any Lender that does not approve any consent, waiver or amendment that (a) requires theapproval of all Lenders or all affected Lenders in accordance with the terms of Section 11.01 and (b) has been approved by theRequired Lenders.“Non-Defaulting Lender” means, at any time, each Lender that is not a Defaulting Lender at such time.“Non-Extension Notice Date” has the meaning specified in Section 2.03(b)(iii).“Non-Reinstatement Deadline” has the meaning specified in Section 2.03(b)(iv).“Note” has the meaning specified in Section 2.11(a).“Notice of Loan Prepayment” means a notice of prepayment with respect to a Loan, which shall be substantially in the form ofExhibit 2.05 or such other form as may be approved by the Administrative Agent (including any form on an electronic platform orelectronic transmission system as shall be approved by the Administrative Agent), appropriately completed and signed by aResponsible Officer of the Borrowers.“Obligations” means with respect to each Loan Party: (a) all advances to, and debts, liabilities, obligations, covenants and dutiesof, any Loan Party arising under any Loan Document or otherwise with respect to any Loan or Letter of Credit; and (b) all obligationsof any Loan Party owing to a Cash Management Bank in respect of Secured Cash Management Agreements; in each case identified inclauses (a) and (b) whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due,now existing or hereafter arising and including interest and fees that accrue after the commencement by or against any Loan Party orany Affiliate thereof of any proceeding under any Debtor Relief Laws naming such Person as the debtor in such proceeding, regardlessof whether such interest and fees are allowed claims in such proceeding.“OFAC” means the Office of Foreign Assets Control of the United States Department of the Treasury.“Organization Documents” means, (a) with respect to any corporation, the certificate or articles of incorporation and the bylaws(or equivalent or comparable constitutive documents with respect to any non-U.S. jurisdiction); (b) with respect to any limited liabilitycompany, the certificate or articles of formation or organization and operating agreement or limited liability company agreement (orequivalent or comparable documents with respect to any non-U.S. jurisdiction); (c) with respect to any partnership, joint venture, trustor other form of business entity, the partnership, joint venture or other applicable agreement of formation or organization (or equivalentor comparable documents with respect to any non-U.S. jurisdiction) and (d) with respect to all entities, any agreement, instrument, filingor notice with respect thereto filed in connection with its formation or organization with the applicable Governmental Authority in thejurisdiction of its formation or organization (or equivalent or comparable documents with respect to any non-U.S. jurisdiction).“Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as a result of a present or former connectionbetween such Recipient and the jurisdiction imposing such Tax (other than connections arising from such Recipient having executed,delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under,engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Loan or LoanDocument).“Other Taxes” means all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arisefrom any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfectionof a security interest under, or otherwise with respect to, any Loan Document, except any such Taxes that are Other Connection Taxesimposed with respect to an assignment (other than an assignment made pursuant to Section 3.06).“Outstanding Amount” means (a) with respect to any Loans on any date, the Dollar Equivalent amount of the aggregateoutstanding principal amount thereof after giving effect to any borrowings and prepayments or repayments of any Loans occurring onsuch date; and (b) with respect to any L/C Obligations on any date, the Dollar Equivalent amount of the aggregate outstanding amountof such L/C Obligations on such date after giving effect to any L/C Credit Extension occurring on such date and any other changes inthe aggregate amount of the L/C Obligations as of such date, including as a result of any reimbursements by the Borrowers ofUnreimbursed Amounts.“Overnight Rate” means, for any day, (a) with respect to any amount denominated in Dollars, the greater of (i) the FederalFunds Rate and (ii) an overnight rate determined by the Administrative Agent, the L/C Issuer, or the Swingline Lender, as the case maybe, in accordance with banking industry rules on interbank compensation, and (b) with respect to any amount denominated in anAlternative Currency, the rate of interest per annum at which overnight deposits in the applicable Alternative Currency, in an amountapproximately equal to the amount with respect to which such rate is being determined, would be offered for such day by a branch orAffiliate of Bank of America in the applicable offshore interbank market for such currency to major banks in such interbank market.“Participant” has the meaning specified in Section 11.06(d).“Participant Register” has the meaning specified in Section 11.06(d).“Participating Member State” means any member state of the European Union that has the Euro as its lawful currency inaccordance with legislation of the European Union relating to Economic and Monetary Union.“PBGC” means the Pension Benefit Guaranty Corporation.“Pension Act” means the Pension Protection Act of 2006.“Pension Funding Rules” means the rules of the Internal Revenue Code and ERISA regarding minimum required contributions(including any installment payment thereof) to Pension Plans and set forth in, with respect to plan years ending prior to the effectivedate of the Pension Act, Section 412 of the Internal Revenue Code and Section 302 of ERISA, each as in effect prior to the Pension Actand, thereafter, Section 412, 430, 431, 432 and 436 of the Internal Revenue Code and Sections 302, 303, 304 and 305 of ERISA.“Pension Plan” means any employee pension benefit plan within the meaning of Section 3(2) of ERISA (including a MultipleEmployer Plan but excluding a Multiemployer Plan) that is maintained or contributed to by either Borrower or any ERISA Affiliate andthat is covered by Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Internal Revenue Code.“Permitted Acquisition” means an Investment consisting of an Acquisition by PRGX or any Subsidiary, provided that: (a) theRequired Lenders consent thereto; or (b) the following conditions shall be satisfied in respect of such Acquisition: (i) no Default orEvent of Default shall have occurred and be continuing or would result from such Acquisition, (ii) the property acquired (or theproperty of the Person acquired) in such Acquisition is used or useful in the same or a similar line of business as PRGX and itsSubsidiaries were engaged in on the Closing Date (or any reasonable extensions or expansions thereof), (iii) in the case of anAcquisition of the Equity Interests of another Person, the board of directors (or other comparable governing body) or equityholders ofsuch other Person shall have duly approved such Acquisition, (iv) PRGX shall have delivered to the Administrative Agent a Pro FormaCompliance Certificate demonstrating that the Loan Parties would be in compliance with the financial covenants set forth in Section7.11 recomputed as of the end of the period of the four fiscal quarters most recently ended for which PRGX has delivered financialstatements pursuant to Section 6.01(a) or (b) after giving effect to such Acquisition on a Pro Forma Basis, (v) the representations andwarranties made by the Loan Parties in each Loan Document shall be true and correct in all material respects at and as if made as of thedate of such Acquisition (after giving effect thereto) and (vi) at least ten (10) Business Days (or such shorter period as theAdministrative Agent may agree in its sole discretion) prior to the closing of such Acquisition, PRGX shall give written notice of suchtransaction to the Administrative Agent (which shall promptly deliver a copy to the Lenders) (the “Acquisition Notice”), whichAcquisition Notice shall include either (A) the final acquisition agreement or the then current draft of the acquisition agreement or (B) areasonably detailed description of the material terms of such Acquisition (including, without limitation, the purchase price and methodand structure of payment), and shall be accompanied by such additional documentation regarding the Acquisition as the AdministrativeAgent shall reasonably require (including, without limitation, financial statements or a financial review of such target, as applicable, forits two (2) most recent fiscal years in form and substance reasonably acceptable to the Administrative Agent and unaudited fiscal year-to-date statements for the two (2) most recent interim periods, provided, that if such financial statements, financial reviews or unauditedfiscal year-to-date statements (as the case may be) are not available for the target’s most recent two (2) fiscal years, then theAdministrative Agent, in its sole discretion, may permit and accept the delivery of such financial statements, financial reviews orunaudited fiscal year-to-date statements (as the case may be) comprised of a shorter time-frame).“Permitted Liens” means, at any time, Liens in respect of property of any Loan Party or any Subsidiary permitted to exist at suchtime pursuant to the terms of Section 7.01.“Permitted Transfers” means (a) Dispositions of inventory in the ordinary course of business; (b) Dispositions of property toPRGX or any Subsidiary; provided, that if the transferor of such property is a Loan Party then the transferee thereof must be a LoanParty; (c) Dispositions of accounts receivable in connection with the collection or compromise thereof; (d) Dispositions of machineryand equipment no longer used or useful in the conduct of business of the Loan Parties and their Subsidiaries that are Disposed of in theordinary course of business; (e) licenses, sublicenses, leases or subleases granted to others not interfering in any material respect withthe business of PRGX and its Subsidiaries; and (f) the sale or disposition of Cash Equivalents for fair market value.“Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company,partnership, Governmental Authority or other entity.“Platform” has the meaning specified in Section 6.02.“PRGX” has the meaning specified in the introductory paragraph hereto.“Pro Forma Basis” means, with respect to any transaction, that for purposes of calculating the financial covenants set forth inSection 7.11, such transaction (including the incurrence of any Indebtedness therewith) shall be deemed to have occurred as of the firstday of the most recent four fiscal quarter period preceding the date of such transaction for which financial statements were required tobe delivered pursuant to Section 6.01(a) or 6.01(b). In connection with the foregoing, (a) with respect to any Disposition or RecoveryEvent, (i) income statement and cash flow statement items (whether positive or negative) attributable to the property disposed of shallbe excluded to the extent relating to any period occurring prior to the date of such transaction and (ii) Indebtedness which is retiredshall be excluded and deemed to have been retired as of the first day of the applicable period and (b) with respect to any Acquisition, (i)income statement and cash flow statement items attributable to the Person or property acquired shall be included to the extent relating toany period applicable in such calculations to the extent (A) such items are not otherwise included in such income statement and cashflow statement items for PRGX and its Subsidiaries in accordance with GAAP or in accordance with any defined terms set forth inSection 1.01 and (B) such items are supported by financial statements or other information reasonably satisfactory to the AdministrativeAgent and (ii) any Indebtedness incurred or assumed by any Loan Party or any Subsidiary (including the Person or property acquired)in connection with such transaction and any Indebtedness of the Person or property acquired which is not retired in connection withsuch transaction (A) shall be deemed to have been incurred as of the first day of the applicable period and (B) if such Indebtedness hasa floating or formula rate, shall have an implied rate of interest for the applicable period for purposes of this definition determined byutilizing the rate which is or would be in effect with respect to such Indebtedness as at the relevant date of determination.“Pro Forma Compliance Certificate” means a certificate of a Responsible Officer of PRGX containing reasonably detailedcalculations of the financial covenants set forth in Section 7.11 recomputed as of the end of the period of the four fiscal quarters mostrecently ended for which PRGX has delivered financial statements pursuant to Section 6.01(a) or (b) after giving effect to the applicabletransaction on a Pro Forma Basis.“PTE” means a prohibited transaction class exemption issued by the U.S. Department of Labor, as any such exemption may beamended from time to time.“Public Lender” has the meaning specified in Section 6.02.“PUSA” has the meaning specified in the introductory paragraph hereto.“Qualified ECP Guarantor” means, at any time, each Loan Party with total assets exceeding $10,000,000 or that qualifies atsuch time as an “eligible contract participant” under the Commodity Exchange Act and can cause another Person to qualify as an“eligible contract participant” at such time under Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.“Ratable Share” has the meaning specified in Section 10.06(b).“Rate Determination Date” means two (2) Business Days prior to the commencement of such Interest Period (or such other dayas is generally treated as the rate fixing day by market practice in such interbank market, as determined by the Administrative Agent;provided that to the extent such market practice is not administratively feasible for the Administrative Agent, then “Rate DeterminationDate” means such other day as otherwise reasonably determined by the Administrative Agent).“Recipient” means the Administrative Agent, any Lender, the L/C Issuer or any other recipient of any payment to be made by oron account of any obligation of any Loan Party hereunder.“Recovery Event” means any loss of, damage to or destruction of, or any condemnation or other taking for public use of, anyproperty of any Loan Party or any Subsidiary.“Register” has the meaning specified in Section 11.06(c).“Registered IP Rights” has the meaning specified in Section 5.17.“Related Indemnified Party” means (a) any controlling Person or controlled Affiliate of such Indemnitee, (b) the respectivedirectors, officers or employees of such Indemnitee or any of its controlling Persons or controlled Affiliates and (c) the respectiveagents of such Indemnitee or any of its controlling Persons or controlled Affiliates, in the case of this clause (c), acting on behalf of, orat the express instructions of, such Indemnitee, controlling Person or such controlled Affiliate; provided, that each reference to acontrolling Person, controlled Affiliate, director, officer or employee in this sentence pertains to a controlling Person, controlledAffiliate, director, officer or employee involved in the negotiation, syndication, administration or enforcement of the Loan Documents.“Related Parties” means, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees,agents, trustees, administrators, managers, advisors and representatives of such Person and of such Person’s Affiliates.“Removal Effective Date” has the meaning specified in Section 9.06.“Reportable Event” means any of the events set forth in Section 4043(c) of ERISA, other than events for which the thirty-daynotice period has been waived.“Request for Credit Extension” means (a) with respect to a Borrowing, conversion or continuation of Loans, a Loan Notice, (b)with respect to an L/C Credit Extension, a Letter of Credit Application, and (c) with respect to a Swingline Loan, a Swingline LoanNotice.“Required Lenders” means, at any time, at least two (2) Lenders having Total Credit Exposures representing more than fiftypercent (50%) of the Total Credit Exposures of all Lenders (unless there is only one (1) Lender, in which case such Lender shallconstitute Required Lenders). The Total Credit Exposure of any Defaulting Lender shall be disregarded in determining RequiredLenders at any time; provided that the amount of any participation in any Swingline Loan and Unreimbursed Amounts that suchDefaulting Lender has failed to fund that have not been reallocated to and funded by another Lender shall be deemed to be held by theLender that is the Swingline Lender or L/C Issuer, as the case may be, in making such determination.“Resignation Effective Date” has the meaning specified in Section 9.06.“Responsible Officer” means the chief executive officer, president, chief financial officer, treasurer, assistant treasurer orcontroller of a Loan Party, and, solely for purposes of the delivery of incumbency certificates, the secretary or any assistant secretary ofa Loan Party and, solely for purposes of notices given pursuant to Article II, any other officer or employee of the applicable Loan Partyso designated by any of the foregoing officers in a notice to the Administrative Agent or any other officer or employee of the applicableLoan Party designated in or pursuant to an agreement between the applicable Loan Party and the Administrative Agent. Any documentdelivered hereunder that is signed by a Responsible Officer of a Loan Party shall be conclusively presumed to have been authorized byall necessary corporate, partnership and/or other action on the part of such Loan Party and such Responsible Officer shall beconclusively presumed to have acted on behalf of such Loan Party. To the extent requested by the Administrative Agent, eachResponsible Officer will provide an incumbency certificate and appropriate authorization documentation, in form and substancereasonably satisfactory to the Administrative Agent.“Restricted Payment” means any dividend or other distribution (whether in cash, securities or other property) with respect to anyEquity Interests of any Person, or any payment (whether in cash, securities or other property), including any sinking fund or similardeposit, on account of the purchase, redemption, retirement, defeasance, acquisition, cancellation or termination of any such EquityInterests or on account of any return of capital to such Person’s stockholders, partners or members (or the equivalent Person thereof), orany option, warrant or other right to acquire any such dividend or other distribution or payment. For the avoidance of doubt, paymentsas consideration for the purchase price in connection with a Permitted Acquisition, including Earn-Out Payments and DeferredPayments with respect thereto, do not constitute “Restricted Payments.”“Revaluation Date” means (a) with respect to any Loan, each of the following: (i) each date of a Borrowing of a EurocurrencyRate Loan denominated in an Alternative Currency, (ii) each date of a continuation of a Eurocurrency Rate Loan denominated in anAlternative Currency pursuant to Section 2.02, and (iii) such additional dates as the Administrative Agent shall determine or theRequired Lenders shall require; and (b) with respect to any Letter of Credit, each of the following: (i) each date of issuance, amendmentand/or extension of a Letter of Credit denominated in an Alternative Currency, (ii) each date of any payment by the L/C Issuer underany Letter of Credit denominated in an Alternative Currency, and (iii) such additional dates as the Administrative Agent or the L/CIssuer shall determine or the Required Lenders shall require.“Revolving Commitment” means, as to each Lender, its obligation to (a) make Revolving Loans to the Borrowers pursuant toSection 2.01, (b) purchase participations in L/C Obligations, and (c) purchase participations in Swingline Loans, in an aggregateprincipal amount at any one time outstanding not to exceed the Dollar amount set forth opposite such Lender’s name on Schedule 2.01or in the Assignment and Assumption pursuant to which such Lender becomes a party hereto or in any documentation executed bysuch Lender pursuant to Section 2.01(b), as applicable as such amount may be adjusted from time to time in accordance with thisAgreement.“Revolving Credit Exposure” means, as to any Lender at any time, the aggregate Outstanding Amount at such time of itsRevolving Loans and its participation in L/C Obligations and Swingline Loans at such time.“Revolving Loan” has the meaning specified in Section 2.01(a).“S&P” means Standard & Poor’s Financial Services LLC, a subsidiary of The McGraw Hill Companies, Inc. and any successorthereto.“Sale and Leaseback Transaction” means, with respect to any Person, any arrangement, directly or indirectly, whereby suchPerson shall sell or transfer any property used or useful in its business, whether now owned or hereafter acquired, and thereafter rent orlease such property or other property that it intends to use for substantially the same purpose or purposes as the property being sold ortransferred.“Same Day Funds” means (a) with respect to disbursements and payments in Dollars, immediately available funds, and (b) withrespect to disbursements and payments in an Alternative Currency, same day or other funds as may be determined by theAdministrative Agent or the L/C Issuer, as the case may be, to be customary in the place of disbursement or payment for the settlementof international banking transactions in the relevant Alternative Currency.“Sanction(s)” means any sanction administered or enforced by the United States Government (including without limitation,OFAC), the United Nations Security Council, the European Union, Her Majesty’s Treasury (“HMT”) or other relevant sanctionsauthority.“Scheduled Unavailability Date” has the meaning specified in Section 3.07(b).“SEC” means the Securities and Exchange Commission, or any Governmental Authority succeeding to any of its principalfunctions.“Secured Cash Management Agreement” means any Cash Management Agreement that is entered into by and between anyLoan Party and any Cash Management Bank with respect to such Cash Management Agreement. For the avoidance of doubt, a holderof Obligations in respect of Secured Cash Management Agreements shall be subject to the last paragraph of Section 8.03 and Section9.11.“Secured Party Designation Notice” means a notice from any Lender or an Affiliate of a Lender substantially in the form ofExhibit 1.01.“Securitization Transaction” means, with respect to any Person, any financing transaction or series of financing transactions(including factoring arrangements) pursuant to which such Person or any Subsidiary of such Person may sell, convey or otherwisetransfer, or grant a security interest in, accounts, payments, receivables, rights to future lease payments or residuals or similar rights topayment to a special purpose subsidiary or affiliate of such Person.“Security Agreement” means the security and pledge agreement, dated as of the Closing Date, executed in favor of theAdministrative Agent for the benefit of the holders of the Obligations by each of the Loan Parties.“Solvent” or “Solvency” means, with respect to any Person as of a particular date, that on such date (a) such Person is able topay its debts and other liabilities, contingent obligations and other commitments as they mature in the ordinary course of business, (b)such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person’s ability to pay such debtsand liabilities as they mature in the ordinary course of business, (c) such Person is not engaged in a business or a transaction, and is notabout to engage in a business or a transaction, for which such Person’s property would constitute unreasonably small capital, (d) the fairvalue of the property of such Person is greater than the total amount of liabilities, including contingent liabilities, of such Person and (e)the present fair salable value of the assets of such Person is not less than the amount that will be required to pay the probable liability ofsuch Person on its debts as they become absolute and matured. The amount of contingent liabilities at any time shall be computed as theamount that, in the light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expectedto become an actual or matured liability.“Spot Rate” for a currency means the rate determined by the Administrative Agent or the L/C Issuer, as applicable, to be the ratequoted by the Person acting in such capacity as the spot rate for the purchase by such Person of such currency with another currencythrough its principal foreign exchange trading office at approximately 11:00 a.m. on the date two (2) Business Days prior to the date asof which the foreign exchange computation is made; provided that the Administrative Agent or the L/C Issuer may obtain such spot ratefrom another financial institution designated by the Administrative Agent or the L/C Issuer if the Person acting in such capacity doesnot have as of the date of determination a spot buying rate for any such currency; and provided further that the L/C Issuer may use suchspot rate quoted on the date as of which the foreign exchange computation is made in the case of any Letter of Credit denominated inan Alternative Currency.“Sterling” and “£” mean the lawful currency of the United Kingdom.“Subordinated Debt” means: (a) the intercompany Indebtedness subordinated pursuant to Section 11.21; (b) any Indebtednesssubordinated pursuant to Article X; and (c) any other Indebtedness (other than Deferred Payments and Earn-Out Payments) incurred byany Loan Party which by its terms (i) is subordinated in right of payment to the prior payment of the Obligations and (ii) contains otherterms, including without limitation, standstill, interest rate, maturity and amortization, and insolvency-related provisions, in all respectsacceptable to the Administrative Agent in its sole discretion. For the avoidance of doubt, to the extent the Loan Parties in their solediscretion determine to cause any Indebtedness consisting of Deferred Payments and/or Earn-Out Payments to be subordinated in rightof payment to the prior payment of the Obligations (or of any other obligations of the Loan Parties), such Indebtedness shall not therebyconstitute “Subordinated Debt” for purposes of the Loan Documents; and the Loan Parties in their sole discretion thereafter from time totime may waive or amend such subordination provisions (including to eliminate the same in whole or in part).“Subordinated Debt Documents” means all agreements (including without limitation intercreditor agreements, instruments andother documents) pursuant to which Subordinated Debt has been or will be issued or otherwise setting forth the terms of anySubordinated Debt. For the avoidance of doubt, this Agreement shall not constitute a “Subordinated Debt Document” notwithstandingthe provisions contained herein providing for the subordination of certain Indebtedness and other obligations.“Subordinating Loan Party” has the meaning specified in Section 11.21.“Subordinating Provisions” has the meaning specified in Section 8.01(l).“Subsidiary” of a Person means a corporation, partnership, joint venture, limited liability company or other business entity ofwhich a majority of the shares of Voting Stock or other controlling ownership interest is at the time beneficially owned, or themanagement of which is otherwise controlled, directly, or indirectly through one or more intermediaries, or both, by such Person.Unless otherwise specified, all references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries ofPRGX.“Swap Contract” means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward ratetransactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond orbond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rateoptions, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions,cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any ofthe foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subjectto any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms andconditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc.,any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with anyrelated schedules, a “Master Agreement”), including any such obligations or liabilities under any Master Agreement.“Swap Termination Value” means, in respect of any one or more Swap Contracts, after taking into account the effect of anylegally enforceable netting agreement relating to such Swap Contracts, (a) for any date on or after the date such Swap Contracts havebeen closed out and termination value(s) determined in accordance therewith, such termination value(s) and (b) for any date prior to thedate referenced in clause (a), the amount(s) determined as the mark-to-market value(s) for such Swap Contracts, as determined basedupon one or more mid-market or other readily available quotations provided by any recognized dealer in such Swap Contracts (whichmay include a Lender or any Affiliate of a Lender).“SWIFT” has the meaning specified in Section 2.03(f).“Swingline Lender” means Bank of America in its capacity as provider of Swingline Loans, or any successor Swingline lenderhereunder.“Swingline Loan” has the meaning specified in Section 2.04(a).“Swingline Loan Notice” means a notice of a Borrowing of Swingline Loans pursuant to Section 2.04(b), which shall besubstantially in the form of Exhibit 2.04 or such other form as approved by the Administrative Agent (including any form on anelectronic platform or electronic transmission system as shall be approved by the Administrative Agent), appropriately completed andsigned by a Responsible Officer of the Borrowers.“Swingline Sublimit” means an amount equal to the lesser of (a) $5,000,000 and (b) the Aggregate Revolving Commitments.The Swingline Sublimit is part of, and not in addition to, the Aggregate Revolving Commitments. As of the Closing Date, the SwinglineSublimit is set forth on Schedule 2.01.“Synthetic Lease Obligation” means the monetary obligation of a Person under (a) a so-called synthetic, off-balance sheet or taxretention lease, or (b) an agreement for the use or possession of property creating obligations that do not appear on the balance sheet ofsuch Person but which, upon the insolvency or bankruptcy of such Person, would be characterized as the indebtedness of such Person(without regard to accounting treatment).“TARGET2” means the Trans-European Automated Real-time Gross Settlement Express Transfer payment system which utilizesa single shared platform and which was launched on November 19, 2007.“TARGET Day” means any day on which TARGET2 (or, if such payment system ceases to be operative, such other paymentsystem, if any, determined by the Administrative Agent to be a suitable replacement) is open for the settlement of payments in Euro.“Taxes” means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding),assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penaltiesapplicable thereto.“Threshold Amount” means $2,000,000.“Total Credit Exposure” means, as to any Lender at any time, and without duplication, the unused Revolving Commitments ofsuch Lender at such time, the outstanding Loans of such Lender at such time and such Lender’s participation in L/C Obligations andSwingline Loans at such time.“Total Revolving Outstandings” means the aggregate Outstanding Amount of all Revolving Loans, all Swingline Loans and allL/C Obligations.“Type” means, with respect to any Loan, its character as a Base Rate Loan, LIBOR Daily Floating Rate Loan or a EurocurrencyRate Loan.“UCP” means, with respect to any Letter of Credit, the Uniform Customs and Practice for Documentary Credits, InternationalChamber of Commerce (“ICC”) Publication No. 600 (or such later version thereof as may be in effect at the time of issuance).“United States” and “U.S.” mean the United States of America.“Unreimbursed Amount” has the meaning specified in Section 2.03(c)(i).“U.S. Person” means any Person that is a “United States Person” as defined in Section 7701(a)(30) of the Internal RevenueCode.“U.S. Tax Compliance Certificate” has the meaning specified in Section 3.01(e)(ii)(B)(3).“Voting Stock” means, with respect to any Person, Equity Interests issued by such Person the holders of which are ordinarily, inthe absence of contingencies, entitled to vote for the election of directors (or persons performing similar functions) of such Person, eventhough the right so to vote has been suspended by the happening of such a contingency.“Write-Down and Conversion Powers” means, with respect to any EEA Resolution Authority, the write-down and conversionpowers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country,which write-down and conversion powers are described in the EU Bail-In Legislation Schedule.1.02 Other Interpretive Provisions.With reference to this Agreement and each other Loan Document, unless otherwise specified herein or in such other LoanDocument:(a) The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Wheneverthe context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words“include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation” (whether or notexpressly so stated), unless the context requires otherwise. The word “will” shall be construed to have the same meaning andeffect as the word “shall.” Unless the context requires otherwise, (i) any definition of or reference to any agreement, instrumentor other document (including any Loan Document or Organization Document) shall be construed as referring to suchagreement, instrument or other document as from time to time amended, amended and restated, modified, extended, restated,replaced or supplemented from time to time (subject to any restrictions on such amendments, supplements or modifications setforth herein or in any other Loan Document), (ii) any reference herein to any Person shall be construed to include such Person’ssuccessors and assigns, (iii) the words “hereto,” “herein,” “hereof” and “hereunder,” and words of similar import when used inany Loan Document, shall be construed to refer to such Loan Document in its entirety and not to any particular provisionthereof, (iv) all references in a Loan Document to Articles, Sections, Preliminary Statements, Exhibits and Schedules shall beconstrued to refer to Articles and Sections of, Preliminary Statements of and Exhibits and Schedules to, the Loan Document inwhich such references appear, (v) any reference to any Law shall include all statutory and regulatory rules, regulations, ordersand provisions consolidating, amending, replacing or interpreting such Law and any reference to any Law or regulation shall,unless otherwise specified, refer to such Law or regulation as amended, modified, extended, restated, replaced or supplementedfrom time to time, and (vi) the words “asset” and “property” shall be construed to have the same meaning and effect and to referto any and all assets and properties, tangible and intangible, real and personal, including cash, securities, accounts and contractrights.(b) In the computation of periods of time from a specified date to a later specified date, the word “from” means “fromand including;” the words “to” and “until” each mean “to but excluding;” and the word “through” means “to and including.”(c) Any reference herein to a merger, transfer, consolidation, amalgamation, assignment, sale or disposition, or similarterm, shall be deemed to apply to a division of or by a limited liability company, or an allocation of assets to a series of a limitedliability company (or the unwinding of such a division or allocation), as if it were a merger, transfer, consolidation,amalgamation, assignment, sale or disposition, or similar term, as applicable, to, of or with a separate Person. Any division of alimited liability company shall constitute a separate Person hereunder (and each division of any limited liability company that isa Subsidiary, joint venture or any other like term shall also constitute such a Person or entity).(d) Section, subsection and other headings herein and in the other Loan Documents are included for convenience ofreference only and shall not affect the interpretation of this Agreement or any other Loan Document.1.03 Accounting Terms.(a) Generally. All accounting terms not specifically or completely defined herein shall be construed in conformity with,and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to thisAgreement shall be prepared in conformity with, GAAP applied on a consistent basis, as in effect from time to time, applied in amanner consistent with that used in preparing the 2017 Audited Financial Statements, except as otherwise specificallyprescribed herein. Notwithstanding the foregoing, for purposes of determining compliance with any covenant (including thecomputation of any financial covenant) contained herein, (i) Indebtedness of the Loan Parties and their Subsidiaries shall bedeemed to be carried at one hundred percent (100%) of the outstanding principal amount thereof, and the effects of FASB ASC825 on financial liabilities shall be disregarded and (ii) no effect shall be given to any change in accounting for leases pursuantto GAAP resulting from the implementation of FASB ASU No. 2016-02, Leases (Topic 842) (as the same may be amendedfrom time to time) or any changes in GAAP arising therefrom or similar changes, to the extent such adoption would requirerecognition of a lease liability where such lease (or similar arrangement) would not have required a lease liability under GAAPas in effect on December 31, 2017.(b) Changes in GAAP. If at any time any change in GAAP (including the adoption of IFRS) would affect thecomputation of any financial ratio or requirement set forth in any Loan Document, and either the Borrowers or the RequiredLenders shall so request, the Administrative Agent, the Lenders and the Borrowers shall negotiate in good faith to amend suchratio or requirement to preserve the original intent thereof in light of such change in GAAP (subject to the approval of theRequired Lenders); provided that, until so amended, (i) such ratio or requirement shall continue to be computed in accordancewith GAAP prior to such change therein and (ii) the Borrowers shall provide to the Administrative Agent and the Lendersfinancial statements and other documents required under this Agreement or as reasonably requested hereunder setting forth areconciliation between calculations of such ratio or requirement made before and after giving effect to such change in GAAP.(c) Calculations. Notwithstanding the above, the parties hereto acknowledge and agree that all calculations of thefinancial covenants in Section 7.11 (including for purposes of determining the Applicable Rate) shall be made on a Pro FormaBasis with respect to (i) any Disposition of all of the Equity Interests of, or all or substantially all of the assets of, a Subsidiary,(ii) any Disposition of a line of business or division of any Loan Party or Subsidiary, (iii) any Acquisition, in each case,occurring during the applicable period or (iv) with respect to calculations of financial covenants for purposes of Section 2.01(b)only, repayment of indebtedness (other than revolving indebtedness for which no permanent reduction in commitments hasbeen made).1.04 Rounding.Any financial ratios required to be maintained by the Borrowers pursuant to this Agreement shall be calculated by dividing theappropriate component by the other component, carrying the result to one place more than the number of places by which such ratio isexpressed herein and rounding the result up or down to the nearest number (with a rounding-up if there is no nearest number).1.05 Exchange Rates; Currency Equivalents.(a) The Administrative Agent or the L/C Issuer, as applicable, shall determine the Spot Rates as of each RevaluationDate to be used for calculating Dollar Equivalent amounts of Credit Extensions and Outstanding Amounts denominated inAlternative Currencies. Such Spot Rates shall become effective as of such Revaluation Date and shall be the Spot Ratesemployed in converting any amounts between the applicable currencies until the next Revaluation Date to occur. Except forpurposes of financial statements delivered by Loan Parties hereunder or calculating financial covenants hereunder or except asotherwise provided herein, the applicable amount of any currency (other than Dollars) for purposes of the Loan Documentsshall be such Dollar Equivalent amount as so determined by the Administrative Agent or the L/C Issuer, as applicable.(b) Wherever in this Agreement in connection with a Borrowing, conversion, continuation or prepayment of aEurocurrency Rate Loan or the issuance, amendment or extension of a Letter of Credit, an amount, such as a required minimumor multiple amount, is expressed in Dollars, but such Borrowing, Eurocurrency Rate Loan or Letter of Credit is denominated inan Alternative Currency, such amount shall be the relevant Alternative Currency Equivalent of such Dollar amount (rounded tothe nearest unit of such Alternative Currency, with 0.5 of a unit being rounded upward), as determined by the AdministrativeAgent or the L/C Issuer, as the case may be.(c) The Administrative Agent does not warrant, nor accept responsibility, nor shall the Administrative Agent have anyliability with respect to the administration, submission or any other matter related to the rates in the definition of “EurocurrencyRate” or “LIBOR Daily Floating Rate” or with respect to any comparable or successor rate thereto.1.06 Change of Currency.Each obligation of the Borrowers to make a payment denominated in the national currency unit of anymember state of the European Union that adopts the Euro as its lawful currency after the Closing Date shall be redenominated into Euroat the time of such adoption. If, in relation to the currency of any such member state, the basis of accrual of interest expressed in thisAgreement in respect of that currency shall be inconsistent with any convention or practice in the London interbank market for the basisof accrual of interest in respect of the Euro, such expressed basis shall be replaced by such convention or practice with effect from thedate on which such member state adopts the Euro as its lawful currency; provided that if any Borrowing in the currency of suchmember state is outstanding immediately prior to such date, such replacement shall take effect, with respect to such Borrowing, at theend of the then current Interest Period.(a) Each provision of this Agreement shall be subject to such reasonable changes of construction as the AdministrativeAgent may from time to time specify to be appropriate to reflect the adoption of the Euro by any member state of the EuropeanUnion and any relevant market conventions or practices relating to the Euro.(b) Each provision of this Agreement also shall be subject to such reasonable changes of construction as theAdministrative Agent may from time to time specify to be appropriate to reflect a change in currency of any other country andany relevant market conventions or practices relating to the change in currency.1.07 Times of Day.Unless otherwise specified, all references herein to times of day shall be references to Eastern time (daylight or standard, asapplicable).1.08 Letter of Credit Amounts.Unless otherwise specified herein, the amount of a Letter of Credit at any time shall be deemed to be the Dollar Equivalent ofthe stated amount of such Letter of Credit in effect at such time; provided, however, that with respect to any Letter of Credit that, by itsterms or the terms of any Issuer Document related thereto, provides for one or more automatic increases in the stated amount thereof,the amount of such Letter of Credit shall be deemed to be the Dollar Equivalent of the maximum stated amount of such Letter of Creditafter giving effect to all such increases, whether or not such maximum stated amount is in effect at such time.ARTICLE II THE REVOLVING COMMITMENTS AND CREDIT EXTENSIONS2.01 Revolving Loans.(a) Revolving Loans. Subject to the terms and conditions set forth herein, each Lender severally agrees to make loans(each such loan, a “Revolving Loan”) to the Borrowers, on a joint and several basis and as co-borrowers, in Dollars or in one ormore Alternative Currencies from time to time on any Business Day during the Availability Period in an aggregate amount notto exceed at any time outstanding the amount of such Lender’s Revolving Commitment; provided, however, that after givingeffect to any Borrowing of Revolving Loans, (i) the Total Revolving Outstandings shall not exceed the Aggregate RevolvingCommitments, and (ii) the Revolving Credit Exposure of any Lender shall not exceed such Lender’s Revolving Commitment.Within the limits of each Lender’s Revolving Commitment, and subject to the other terms and conditions hereof, the Borrowersmay borrow under this Section 2.01, prepay under Section 2.05, and reborrow under this Section 2.01. Revolving Loans may beBase Rate Loans, LIBOR Daily Floating Rate Loans or Eurocurrency Rate Loans, or a combination thereof, as further providedherein, provided, however, all Borrowings made on the Closing Date shall be made as Base Rate Loans or LIBOR DailyFloating Rate Loans.(b) Increases of the Aggregate Revolving Commitments. Subject to the terms and conditions set forth herein, theBorrowers shall have the right, from time to time and upon at least ten (10) Business Days’ prior written notice to theAdministrative Agent (an “Incremental Request”), to request to increase the Aggregate Revolving Commitments (the“Incremental Revolving Commitments”; and revolving loans made thereunder the “Incremental Revolving Loans”) subject,however, in any such case, to satisfaction of the following conditions precedent:(i) the aggregate amount of all Incremental Revolving Commitments effected pursuant to this Section 2.01(b)shall not exceed $25,000,000;(ii) on the date on which any Incremental Facility Amendment is to become effective, both immediately prior toand immediately after giving effect to the incurrence of any Revolving Loans outstanding on such date (including anyIncremental Revolving Loans to be made on such date) and any related transactions, no Default or Event of Defaultshall have occurred and be continuing;(iii) on the date on which any Incremental Facility Amendment is to become effective, both immediately priorto and immediately after giving effect to the incurrence of any Revolving Loans outstanding on such date (including anyIncremental Revolving Loans to be made on such date) and any related transactions, on a Pro Forma Basis, the LoanParties shall be in compliance with the financial covenants set forth in Section 7.11;(iv) the representations and warranties set forth in Article V shall be true and correct in all material respects (orif such representation and warranty is qualified by materiality or Material Adverse Effect, it shall be true and correct) onand as of the date on which such Incremental Facility Amendment is to become effective, except to the extent that suchrepresentations and warranties specifically refer to an earlier date, in which case they shall be true and correct in allmaterial respects (or if such representation and warranty is qualified by materiality or Material Adverse Effect, it shall betrue and correct) as of such earlier date;(v) such Incremental Revolving Commitments shall be in a minimum amount of $10,000,000 and in integralmultiples of $5,000,000 in excess thereof (or such lesser amounts as agreed by the Administrative Agent);(vi) any Incremental Revolving Commitments shall be made on the same terms and provisions (other thanupfront fees) as apply to the existing Revolving Commitments, including with respect to maturity date, interest rate andprepayment provisions, and shall not constitute a credit facility separate and apart from the existing revolving creditfacility described in Section 2.01(a);(vii) the Administrative Agent shall have received (A) a certificate of a Responsible Officer of PRGX certifyingsatisfaction of the conditions to such Incremental Revolving Commitments set forth in Section 2.01(b)(ii), (iii) and (iv),and, with respect to Section 2.01(b)(iii), demonstrating compliance with the financial covenants on a Pro Forma Basis asrequired thereunder and (B) additional commitments in a corresponding amount of such requested IncrementalRevolving Commitments from either existing Lenders and/or one or more other institutions that qualify as EligibleAssignees and which are reasonably acceptable to the Administrative Agent, the Swingline Lender, the L/C Issuer andPRGX (it being understood and agreed that each existing Lender shall have the right, but not the obligation, to providean additional commitment in accordance with its ratable share of the existing Aggregate Revolving Commitments);(viii) the Administrative Agent shall have received customary closing certificates and legal opinions and allother documents (including resolutions of the board of directors of the Loan Parties) it may reasonably request relatingto the corporate or other necessary authority for such Incremental Revolving Commitments and the validity of suchIncremental Revolving Commitments, and any other matters relevant thereto, all in form and substance reasonablysatisfactory to the Administrative Agent; and(ix) the Administrative Agent shall have received such amendments to the Collateral Documents as theAdministrative Agent reasonably requests to cause the Collateral Documents to secure the Obligations (in a mannerconsistent with the terms of the Loan Documents) after giving effect to such Incremental Revolving Commitments.Any Incremental Revolving Commitments shall be evidenced by an amendment (an “Incremental FacilityAmendment”) to this Agreement, giving effect to the modifications permitted by this Section 2.01(b) (and subject to thelimitations set forth in the immediately preceding paragraph), executed by the Loan Parties, the Administrative Agentand each Lender providing a portion of the Incremental Revolving Commitment; which such amendment, when soexecuted, shall amend this Agreement as provided therein. Each Incremental Facility Amendment shall also require suchamendments to the other Loan Documents, and such other new Loan Documents, as the Administrative Agentreasonably deems necessary or appropriate to effect the modifications and credit extensions permitted by thisSection 2.01(b). Neither any Incremental Facility Amendment, nor any such amendments to the other Loan Documentsor such other new Loan Documents, shall be required to be executed or approved by any Lender, other than the Lendersproviding such Incremental Revolving Commitments and the Administrative Agent, in order to be effective. Theeffectiveness of any Incremental Facility Amendment shall be subject to the satisfaction on the date thereof of each ofthe conditions set forth above and as such other conditions as requested by the Lenders under the IncrementalRevolving Loans established in connection therewith.2.02 Borrowings, Conversions and Continuations of Loans.(a) Each Borrowing, each conversion of Loans from one Type to another Type, and each continuation of EurocurrencyRate Loans shall be made upon the Borrowers’ irrevocable notice to the Administrative Agent, which may be given by (A)telephone, or (B) a Loan Notice; provided that any telephonic notice must be confirmed promptly by delivery to theAdministrative Agent of a Loan Notice. Each such Loan Notice must be received by the Administrative Agent not later than11:00 a.m. (i) three (3) Business Days prior to the requested date of any Borrowing of, conversion to or continuation ofEurocurrency Rate Loans denominated in Dollars or of any conversion of Eurocurrency Rate Loans denominated in Dollars toLIBOR Daily Floating Rate Loans or Base Rate Loans, (ii) four (4) Business Days prior to the requested date of any Borrowingor continuation of Eurocurrency Rate Loans denominated in Alternative Currencies, and (iii) on the requested date of anyBorrowing of LIBOR Daily Floating Rate Loans or Base Rate Loans, or conversion of LIBOR Daily Floating Rate Loans to BaseRate Loans or Base Rate Loans to LIBOR Daily Floating Rate Loans. Each Borrowing of, conversion to or continuation ofEurocurrency Rate Loans shall be in a principal amount of $5,000,000 or a whole multiple of $1,000,000 in excess thereof.Except as provided in Sections 2.03(c) and 2.04(c), each Borrowing of or conversion to Base Rate Loans or LIBOR DailyFloating Rate Loans shall be in a principal amount of $500,000 or a whole multiple of $500,000 in excess thereof. Each LoanNotice shall specify (i) whether the Borrowers are requesting a Borrowing, a conversion of Loans from one Type to the other, ora continuation of Eurocurrency Rate Loans, (ii) the requested date of the Borrowing, conversion or continuation, as the casemay be (which shall be a Business Day), (iii) the principal amount of Loans to be borrowed, converted or continued, (iv) theType of Loans to be borrowed or to which existing Loans are to be converted, (v) if applicable, the duration of the InterestPeriod with respect thereto, and (v) if applicable, the currency of the Loans to be borrowed. If the Borrowers fail to specify acurrency in a Loan Notice requesting a Borrowing, then the Loans so requested shall be made in Dollars. If the Borrowers fail tospecify a Type of Loan in a Loan Notice or if the Borrowers fail to give a timely notice requesting a conversion or continuation,then the applicable Loans shall be made as, or converted to, LIBOR Daily Floating Rate Loans; provided, however, that in thecase of a failure to timely request a continuation of Loans denominated in an Alternative Currency, such Loans shall becontinued as Eurocurrency Rate Loans in their original currency with an Interest Period of one month. Any such automaticconversion to LIBOR Daily Floating Rate Loans shall be effective as of the last day of the Interest Period then in effect withrespect to the applicable Eurocurrency Rate Loans. If the Borrowers request a Borrowing of, conversion to, or continuation ofEurocurrency Rate Loans in any Loan Notice, but fail to specify an Interest Period, they will be deemed to have specified anInterest Period of one month. No Loan may be converted into or continued as a Loan denominated in a different currency, butinstead must be repaid in the original currency of such Loan and reborrowed in the other currency.(b) Following receipt of a Loan Notice, the Administrative Agent shall promptly notify each Lender of the amount (andcurrency) of its Applicable Percentage of the applicable Loans, and if no timely notice of a conversion or continuation isprovided by the Borrowers, the Administrative Agent shall notify each Lender of the details of any automatic conversion toLIBOR Daily Floating Rate Loans or continuation of Loans denominated in a currency other than Dollars, in each case asdescribed in the preceding subsection. In the case of a Borrowing, each Lender shall make the amount of its Loan available tothe Administrative Agent in Same Day Funds at the Administrative Agent’s Office for the applicable currency not later than1:00 p.m., in the case of any Loan denominated in Dollars, and not later than the Applicable Time specified by theAdministrative Agent in the case of any Loan denominated in an Alternative Currency, in each case on the Business Dayspecified in the applicable Loan Notice. Upon satisfaction of the applicable conditions set forth in Section 4.02 (and, if suchBorrowing is the initial Credit Extension, Section 4.01), the Administrative Agent shall make all funds so received available tothe Borrowers in like funds as received by the Administrative Agent either by (i) crediting an account of the Borrowers on thebooks of Bank of America with the amount of such funds or (ii) wire transfer of such funds, in each case in accordance withinstructions provided to (and reasonably acceptable to) the Administrative Agent by the Borrowers (or, to the extent no suchinstructions have been provided to, with receipt acknowledged by, the Administrative Agent, such funds shall be credited to theaccount referred to in clause (b)(i) above); provided, however, that if, on the date the Loan Notice with respect to a Borrowingof Revolving Loans denominated in Dollars is given by the Borrowers, there are L/C Borrowings outstanding, then the proceedsof such Borrowing, first, shall be applied to the payment in full of any such L/C Borrowings and second, shall be madeavailable to the Borrowers as provided above.(c) Except as otherwise provided herein, a Eurocurrency Rate Loan may be continued or converted only on the last dayof the Interest Period for such Eurocurrency Rate Loan. During the existence of a Default (or Event of Default, in the case ofLIBOR Daily Floating Rate Loans): (i) no Loans may be requested as, converted to or continued as Eurocurrency Rate Loans orLIBOR Daily Floating Rate Loans (as applicable) without the consent of the Required Lenders; and (ii) the Required Lendersmay demand that (A) any or all of the outstanding Eurocurrency Rate Loans denominated in Dollars or LIBOR Daily FloatingRate Loans (as applicable) be converted immediately to Base Rate Loans and (B) any or all of the outstanding EurocurrencyRate Loans denominated in an Alternative Currency be prepaid, or redenominated into Dollars in the amount of the DollarEquivalent thereof, on the last day of the then current Interest Period with respect thereto.(d) Each determination of an interest rate by the Administrative Agent pursuant to any provision of this Agreementshall be conclusive and binding on the Borrowers and the Lenders in the absence of manifest error.(e) After giving effect to all Borrowings, all conversions of Loans from one Type to the other, and all continuations ofLoans as the same Type, as to Eurocurrency Rate Loans there shall not be more than ten Interest Periods in effect.(f) Notwithstanding anything to the contrary in this Agreement, any Lender may exchange, continue or rollover all or aportion of its Loans in connection with any refinancing, extension, loan modification or similar transaction permitted by theterms of this Agreement, pursuant to a cashless settlement mechanism approved by PRGX, the Administrative Agent and suchLender.(g) This Section 2.02 shall not apply to Swingline Loans.2.03 Letters of Credit.(a) The Letter of Credit Commitment.(i) Subject to the terms and conditions set forth herein, (A) the L/C Issuer agrees, in reliance upon theagreements of the Lenders set forth in this Section 2.03, (1) from time to time on any Business Day during the periodfrom the Closing Date until the Letter of Credit Expiration Date, to issue Letters of Credit denominated in Dollars or inone or more Alternative Currencies for the account of the Borrowers or any of their Subsidiaries, and to amend orextend Letters of Credit previously issued by it, in accordance with subsection (b) below, and (2) to honor drawingsunder the Letters of Credit; and (B) the Lenders severally agree to participate in Letters of Credit issued for the accountof the Borrowers or their Subsidiaries and any drawings thereunder; provided that after giving effect to any L/C CreditExtension with respect to any Letter of Credit, (x) the Total Revolving Outstandings shall not exceed the AggregateRevolving Commitments, (y) the Revolving Credit Exposure of any Lender shall not exceed such Lender’s RevolvingCommitment and (z) the Outstanding Amount of the L/C Obligations shall not exceed the Letter of Credit Sublimit. Eachrequest by the Borrowers for the issuance or amendment of a Letter of Credit shall be deemed to be a representation bythe Borrowers that the L/C Credit Extension so requested complies with the conditions set forth in the proviso to thepreceding sentence. Within the foregoing limits, and subject to the terms and conditions hereof, the Borrowers’ ability toobtain Letters of Credit shall be fully revolving, and accordingly the Borrowers may, during the foregoing period, obtainLetters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed.(ii) The L/C Issuer shall not issue any Letter of Credit if:(A) subject to Section 2.03(b)(iii), the expiry date of the requested Letter of Credit would occur morethan twelve months after the date of issuance or last extension, unless the Lenders (other than DefaultingLenders) holding a majority of the Revolving Credit Exposure have approved such expiry date; or(B) the expiry date of such requested Letter of Credit would occur after the Letter of Credit ExpirationDate, unless all the Lenders that have Revolving Commitments have approved such expiry date.(iii) The L/C Issuer shall not be under any obligation to issue any Letter of Credit if:(A) any order, judgment or decree of any Governmental Authority or arbitrator shall by its termspurport to enjoin or restrain the L/C Issuer from issuing such Letter of Credit, or any Law applicable to the L/CIssuer or any request or directive (whether or not having the force of Law) from any Governmental Authoritywith jurisdiction over the L/C Issuer shall prohibit, or request that the L/C Issuer refrain from, the issuance ofletters of credit generally or such Letter of Credit in particular or shall impose upon the L/C Issuer with respectto such Letter of Credit any restriction, reserve or capital requirement (for which the L/C Issuer is not otherwisecompensated hereunder) not in effect on the Closing Date, or shall impose upon the L/C Issuer anyunreimbursed loss, cost or expense which was not applicable on the Closing Date and which the L/C Issuer ingood faith deems material to it;(B) the issuance of such Letter of Credit would violate one or more policies of the L/C Issuer applicableto letters of credit generally;(C) except as otherwise agreed by the Administrative Agent and the L/C Issuer, such Letter of Credit isin an initial stated amount less than $100,000 (or such lesser amount as the L/C Issuer may agree in its solediscretion);(D) except as otherwise agreed by the Administrative Agent and the L/C Issuer, such Letter of Credit isto be denominated in a currency other than Dollars or an Alternative Currency;(E) the L/C Issuer does not as of the issuance date of the requested Letter of Credit issue Letters ofCredit in the requested currency;(F) any Lender is at that time a Defaulting Lender, unless the L/C Issuer has entered into arrangements,including the delivery of Cash Collateral, satisfactory to the L/C Issuer (in its sole discretion) with theBorrowers or such Defaulting Lender to eliminate the L/C Issuer’s actual or potential Fronting Exposure (aftergiving effect to Section 2.15(b)) with respect to the Defaulting Lender arising from either the Letter of Creditthen proposed to be issued or that Letter of Credit and all other L/C Obligations as to which the L/C Issuer hasactual or potential Fronting Exposure, as it may elect in its sole discretion; or(G) such Letter of Credit contains any provisions for automatic reinstatement of the stated amount afterany drawing thereunder.(iv) The L/C Issuer shall not amend any Letter of Credit if the L/C Issuer would not be permitted at such time toissue the Letter of Credit in its amended form under the terms hereof.(v) The L/C Issuer shall be under no obligation to amend any Letter of Credit if (A) the L/C Issuer would haveno obligation at such time to issue the Letter of Credit in its amended form under the terms hereof, or (B) the beneficiaryof the Letter of Credit does not accept the proposed amendment to the Letter of Credit.(vi) The L/C Issuer shall act on behalf of the Lenders with respect to any Letters of Credit issued by it and thedocuments associated therewith, and the L/C Issuer shall have all of the benefits and immunities (A) provided to theAdministrative Agent in Article IX with respect to any acts taken or omissions suffered by the L/C Issuer in connectionwith Letters of Credit issued by it or proposed to be issued by it and Issuer Documents pertaining to such Letters ofCredit as fully as if the term “Administrative Agent” as used in Article IX included the L/C Issuer with respect to suchacts or omissions, and (B) as additionally provided herein with respect to the L/C Issuer.(b) Procedures for Issuance and Amendment of Letters of Credit; Auto-Extension Letters of Credit.(i) Each Letter of Credit shall be issued or amended, as the case may be, upon the request of the Borrowersdelivered to the L/C Issuer (with a copy to the Administrative Agent) in the form of a Letter of Credit Application,appropriately completed and signed by a Responsible Officer of the Borrowers. Such Letter of Credit Application maybe sent by fax transmission, by United States mail, by overnight courier, by electronic transmission using the systemprovided by the L/C Issuer, by personal delivery or by any other means acceptable to the L/C Issuer. Such Letter ofCredit Application must be received by the L/C Issuer and the Administrative Agent not later than 11:00 a.m. at leastthree (3) Business Days (or such earlier or later date and time as the Administrative Agent and the L/C Issuer may agreein a particular instance in their sole discretion) prior to the proposed issuance date or date of amendment, as the casemay be. In the case of a request for an initial issuance of a Letter of Credit, such Letter of Credit Application shallspecify in form and detail satisfactory to the L/C Issuer: (A) the proposed issuance date of the requested Letter of Credit(which shall be a Business Day); (B) the amount and currency thereof (and in the absence of specification of currency,shall be deemed a request for a Letter of Credit denominated in Dollars); (C) the expiry date thereof; (D) the name andaddress of the beneficiary thereof; (E) the documents to be presented by such beneficiary in case of any drawingthereunder; (F) the full text of any certificate to be presented by such beneficiary in case of any drawing thereunder; (G)the purpose and nature of the requested Letter of Credit; and (H) such other matters as the L/C Issuer may require. In thecase of a request for an amendment of any outstanding Letter of Credit, such Letter of Credit Application shall specify inform and detail satisfactory to the L/C Issuer (A) the Letter of Credit to be amended; (B) the proposed date ofamendment thereof (which shall be a Business Day); (C) the nature of the proposed amendment; and (D) such othermatters as the L/C Issuer may require. Additionally, the Borrowers shall furnish to the L/C Issuer and the AdministrativeAgent such other documents and information pertaining to such requested Letter of Credit issuance or amendment,including any Issuer Documents, as the L/C Issuer or the Administrative Agent may require.(ii) Promptly after receipt of any Letter of Credit Application, the L/C Issuer will confirm with theAdministrative Agent (by telephone or in writing) that the Administrative Agent has received a copy of such Letter ofCredit Application from the Borrowers and, if not, the L/C Issuer will provide the Administrative Agent with a copythereof. Unless the L/C Issuer has received written notice from any Lender, the Administrative Agent or any Loan Party,at least one Business Day prior to the requested date of issuance or amendment of the applicable Letter of Credit, thatone or more applicable conditions contained in Article IV shall not then be satisfied, then, subject to the terms andconditions hereof, the L/C Issuer shall, on the requested date, issue a Letter of Credit for the account of the Borrowers orthe applicable Subsidiary or enter into the applicable amendment, as the case may be, in each case in accordance withthe L/C Issuer’s usual and customary business practices. Immediately upon the issuance of each Letter of Credit, eachLender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the L/C Issuer a riskparticipation in such Letter of Credit in an amount equal to the product of such Lender’s Applicable Percentage times theamount of such Letter of Credit.(iii) If the Borrowers so request in any applicable Letter of Credit Application, the L/C Issuer may, in its solediscretion, agree to issue a Letter of Credit that has automatic extension provisions (each, an “Auto-Extension Letter ofCredit”); provided that any such Auto-Extension Letter of Credit must permit the L/C Issuer to prevent any suchextension at least once in each twelve-month period (commencing with the date of issuance of such Letter of Credit) bygiving prior notice to the beneficiary thereof not later than a day (the “Non-Extension Notice Date”) in each suchtwelve-month period to be agreed upon at the time such Letter of Credit is issued. Unless otherwise directed by the L/CIssuer, the Borrowers shall not be required to make a specific request to the L/C Issuer for any such extension. Once anAuto-Extension Letter of Credit has been issued, the Lenders shall be deemed to have authorized (but may not require)the L/C Issuer to permit the extension of such Letter of Credit at any time to an expiry date not later than the Letter ofCredit Expiration Date; provided, however, that the L/C Issuer shall not permit any such extension if (A) the L/C Issuerhas determined that it would not be permitted, or would have no obligation, at such time to issue such Letter of Credit inits revised form (as extended) under the terms hereof (by reason of the provisions of clause (ii) or (iii) of Section 2.03(a)or otherwise), or (B) it has received notice (which may be by telephone or in writing) on or before the day that is seven(7) Business Days before the Non-Extension Notice Date (1) from the Administrative Agent that the Required Lendershave elected not to permit such extension or (2) from the Administrative Agent, any Lender or the Borrowers that one ormore of the applicable conditions specified in Section 4.02 is not then satisfied, and in each case directing the L/C Issuernot to permit such extension.(iv) If the Borrowers so request in any applicable Letter of Credit Application, the L/C Issuer may, in its solediscretion, agree to issue a Letter of Credit that permits the automatic reinstatement of all or a portion of the statedamount thereof after any drawing thereunder (each, an “Auto-Reinstatement Letter of Credit”). Unless otherwisedirected by the L/C Issuer, the Borrowers shall not be required to make a specific request to the L/C Issuer to permitsuch reinstatement. Once an Auto-Reinstatement Letter of Credit has been issued, except as provided in the followingsentence, the Lenders shall be deemed to have authorized (but may not require) the L/C Issuer to reinstate all or aportion of the stated amount thereof in accordance with the provisions of such Letter of Credit. Notwithstanding theforegoing, if such Auto-Reinstatement Letter of Credit permits the L/C Issuer to decline to reinstate all or any portion ofthe stated amount thereof after a drawing thereunder by giving notice of such non-reinstatement within a specifiednumber of days after such drawing (the “Non-Reinstatement Deadline”), the L/C Issuer shall not permit suchreinstatement if it has received a notice (which may be by telephone or in writing) on or before the day that is seven (7)Business Days before the Non-Reinstatement Deadline (A) from the Administrative Agent that the Required Lendershave elected not to permit such reinstatement or (B) from the Administrative Agent, any Lender or the Borrowers thatone or more of the applicable conditions specified in Section 4.02 is not then satisfied (treating such reinstatement as anL/C Credit Extension for purposes of this clause) and, in each case, directing the L/C Issuer not to permit suchreinstatement.(v) Promptly after its delivery of any Letter of Credit or any amendment to a Letter of Credit to an advisingbank with respect thereto or to the beneficiary thereof, the L/C Issuer will also deliver to the Borrowers and theAdministrative Agent a true and complete copy of such Letter of Credit or amendment.(c) Drawings and Reimbursements; Funding of Participations.(i) Upon receipt from the beneficiary of any Letter of Credit of any notice of drawing under such Letter ofCredit, the L/C Issuer shall notify the Borrowers and the Administrative Agent thereof. In the case of a Letter of Creditdenominated in an Alternative Currency, the Borrowers shall reimburse the L/C Issuer in such Alternative Currency,unless (A) the L/C Issuer (at its option) shall have specified in such notice that it will require reimbursement in Dollars,or (B) in the absence of any such requirement for reimbursement in Dollars, the Borrowers shall have notified the L/CIssuer promptly following receipt of the notice of drawing that the Borrowers will reimburse the L/C Issuer in Dollars. Inthe case of any such reimbursement in Dollars of a drawing under a Letter of Credit denominated in an AlternativeCurrency, the L/C Issuer shall notify the Borrowers of the Dollar Equivalent of the amount of the drawing promptlyfollowing the determination thereof. Not later than 11:00 a.m. on the date of any payment by the L/C Issuer under aLetter of Credit to be reimbursed in Dollars, or the Applicable Time on the date of any payment by the L/C Issuer undera Letter of Credit to be reimbursed in an Alternative Currency (each such date, an “Honor Date”), or if the Borrowersreceive notice of such drawing after 11:00 a.m. or the Applicable Time on the Honor Date, not later than 10:00 a.m. onthe first Business Day following the Honor Date, the Borrower shall reimburse the L/C Issuer through theAdministrative Agent in an amount equal to the amount of such drawing and in the applicable currency. In the eventthat (A) a drawing denominated in an Alternative Currency is to be reimbursed in Dollars pursuant to the secondsentence in this Section 2.03(c)(i) and (B) the Dollar amount paid by the Borrowers, whether on or after the Honor Date,shall not be adequate on the date of that payment to purchase in accordance with normal banking procedures a sumdenominated in the Alternative Currency equal to the drawing, the Borrowers agree, as a separate and independentobligation, to indemnify the L/C Issuer for the loss resulting from its inability on that date to purchase the AlternativeCurrency in the full amount of the drawing. If the Borrowers fail to timely reimburse the L/C Issuer by such time, theAdministrative Agent shall promptly notify each Lender of the Honor Date, the amount of the unreimbursed drawing(expressed in Dollars in the amount of the Dollar Equivalent thereof in the case of a Letter of Credit denominated in anAlternative Currency) (the “Unreimbursed Amount”), and the amount of such Lender’s Applicable Percentage thereof.In such event, the Borrowers shall be deemed to have requested a Borrowing of Revolving Loans that are LIBOR DailyFloating Rate Loans to be disbursed on the Honor Date in an amount equal to the Unreimbursed Amount, without regardto the minimum and multiples specified in Section 2.02 for the principal amount of LIBOR Daily Floating Rate Loans,but subject to the unutilized portion of the Aggregate Revolving Commitments and the conditions set forth in Section4.02 (other than the delivery of a Loan Notice). Any notice given by the L/C Issuer or the Administrative Agentpursuant to this Section 2.03(c)(i) may be given by telephone if immediately confirmed in writing; provided that the lackof such an immediate confirmation shall not affect the conclusiveness or binding effect of such notice.(ii) Each Lender shall upon any notice pursuant to Section 2.03(c)(i) make funds available (and theAdministrative Agent may apply Cash Collateral provided for this purpose) for the account of the L/C Issuer, in Dollars,at the Administrative Agent’s Office for Dollar-denominated payments in an amount equal to its Applicable Percentageof the Unreimbursed Amount not later than 1:00 p.m. on the Business Day specified in such notice by theAdministrative Agent, whereupon, subject to the provisions of Section 2.03(c)(iii), each Lender that so makes fundsavailable shall be deemed to have made a Revolving Loan that is a LIBOR Daily Floating Rate Loan to the Borrowers insuch amount. The Administrative Agent shall remit the funds so received to the L/C Issuer in Dollars.(iii) With respect to any Unreimbursed Amount that is not fully refinanced by a Borrowing of Revolving Loansthat are LIBOR Daily Floating Rate Loans because the conditions set forth in Section 4.02 cannot be satisfied or for anyother reason, the Borrowers shall be deemed to have incurred from the L/C Issuer an L/C Borrowing in the amount ofthe Unreimbursed Amount that is not so refinanced, which L/C Borrowing shall be due and payable on demand(together with interest) and shall bear interest at the Default Rate. In such event, each Lender’s payment to theAdministrative Agent for the account of the L/C Issuer pursuant to Section 2.03(c)(ii) shall be deemed payment inrespect of its participation in such L/C Borrowing and shall constitute an L/C Advance from such Lender in satisfactionof its participation obligation under this Section 2.03.(iv) Until each Lender funds its Revolving Loan or L/C Advance pursuant to this Section 2.03(c) to reimbursethe L/C Issuer for any amount drawn under any Letter of Credit, interest in respect of such Lender’s ApplicablePercentage of such amount shall be solely for the account of the L/C Issuer.(v) Each Lender’s obligation to make Revolving Loans or L/C Advances to reimburse the L/C Issuer foramounts drawn under Letters of Credit, as contemplated by this Section 2.03(c), shall be absolute and unconditional andshall not be affected by any circumstance, including (A) any setoff, counterclaim, recoupment, defense or other rightwhich such Lender may have against the L/C Issuer, either Borrower or any other Person for any reason whatsoever; (B)the occurrence or continuance of a Default, or (C) any other occurrence, event or condition, whether or not similar toany of the foregoing; provided, however, that each Lender’s obligation to make Revolving Loans pursuant to thisSection 2.03(c) is subject to the conditions set forth in Section 4.02 (other than delivery by the Borrowers of a LoanNotice). No such making of an L/C Advance shall relieve or otherwise impair the obligation of the Borrowers toreimburse the L/C Issuer for the amount of any payment made by the L/C Issuer under any Letter of Credit, togetherwith interest as provided herein.(vi) If any Lender fails to make available to the Administrative Agent for the account of the L/C Issuer anyamount required to be paid by such Lender pursuant to the foregoing provisions of this Section 2.03(c) by the timespecified in Section 2.03(c)(ii), then, without limiting the other provisions of this Agreement, the L/C Issuer shall beentitled to recover from such Lender (acting through the Administrative Agent), on demand, such amount with interestthereon for the period from the date such payment is required to the date on which such payment is immediatelyavailable to the L/C Issuer at a rate per annum equal to the applicable Overnight Rate from time to time in effect, plusany reasonable administrative, processing or similar fees customarily charged by the L/C Issuer in connection with theforegoing. If such Lender pays such amount (with interest and fees as aforesaid), the amount so paid shall constitutesuch Lender’s Revolving Loan included in the relevant Borrowing or L/C Advance in respect of the relevant L/CBorrowing, as the case may be. A certificate of the L/C Issuer submitted to any Lender (through the AdministrativeAgent) with respect to any amounts owing under this clause (vi) shall be conclusive absent manifest error.(d) Repayment of Participations.(i) At any time after the L/C Issuer has made a payment under any Letter of Credit and has received from anyLender such Lender’s L/C Advance in respect of such payment in accordance with Section 2.03(c), if the AdministrativeAgent receives for the account of the L/C Issuer any payment in respect of the related Unreimbursed Amount or interestthereon (whether directly from the Borrowers or otherwise, including proceeds of Cash Collateral applied thereto by theAdministrative Agent), the Administrative Agent will distribute to such Lender its Applicable Percentage thereof inDollars and in the same funds as those received by the Administrative Agent.(ii) If any payment received by the Administrative Agent for the account of the L/C Issuer pursuant to Section2.03(c)(i) is required to be returned under any of the circumstances described in Section 11.05 (including pursuant toany settlement entered into by the L/C Issuer in its discretion), each Lender shall pay to the Administrative Agent for theaccount of the L/C Issuer its Applicable Percentage thereof on demand of the Administrative Agent, plus interest thereonfrom the date of such demand to the date such amount is returned by such Lender, at a rate per annum equal to theapplicable Overnight Rate from time to time in effect. The obligations of the Lenders under this clause shall survive thepayment in full of the Obligations and the termination of this Agreement.(e) Obligations Absolute. The obligation of the Borrowers to reimburse the L/C Issuer for each drawing under eachLetter of Credit and to repay each L/C Borrowing shall be absolute, unconditional and irrevocable, and shall be paid strictly inaccordance with the terms of this Agreement under all circumstances, including the following:(i) any lack of validity or enforceability of such Letter of Credit, this Agreement or any other Loan Document;(ii) the existence of any claim, counterclaim, setoff, defense or other right that any Loan Party or anySubsidiary may have at any time against any beneficiary or any transferee of such Letter of Credit (or any Person forwhom any such beneficiary or any such transferee may be acting), the L/C Issuer or any other Person, whether inconnection with this Agreement, the transactions contemplated hereby or by such Letter of Credit or any agreement orinstrument relating thereto, or any unrelated transaction;(iii) any draft, demand, certificate or other document presented under such Letter of Credit proving to beforged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in anyrespect; or any loss or delay in the transmission or otherwise of any document required in order to make a drawingunder such Letter of Credit;(iv) waiver by the L/C Issuer of any requirement that exists for the L/C Issuer’s protection and not theprotection of the Borrowers or any waiver by the L/C Issuer which does not in fact materially prejudice the Borrowers;(v) honor of a demand for payment presented electronically even if such Letter of Credit requires that demandbe in the form of a draft;(vi) any payment made by the L/C Issuer in respect of an otherwise complying item presented after the datespecified as the expiration date of, or the date by which documents must be received under such Letter of Credit ifpresentation after such date is authorized by the UCC, the ISP or the UCP, as applicable;(vii) any payment by the L/C Issuer under such Letter of Credit against presentation of a draft or certificate thatdoes not strictly comply with the terms of such Letter of Credit; or any payment made by the L/C Issuer under suchLetter of Credit to any Person purporting to be a trustee in bankruptcy, debtor-in-possession, assignee for the benefit ofcreditors, liquidator, receiver or other representative of or successor to any beneficiary or any transferee of such Letterof Credit, including any arising in connection with any proceeding under any Debtor Relief Law;(viii) any adverse change in the relevant exchange rates or in the availability of the relevant AlternativeCurrency to the Borrowers or any Subsidiary or in the relevant currency markets generally; or(ix) any other circumstance or happening whatsoever, whether or not similar to any of the foregoing, includingany other circumstance that might otherwise constitute a defense available to, or a discharge of, any Loan Party or anySubsidiary.The Borrowers shall promptly examine a copy of each Letter of Credit and each amendment thereto that is delivered to it and, in theevent of any claim of noncompliance with the Borrowers’ instructions or other irregularity, the Borrowers will immediately notify theL/C Issuer. The Borrowers shall be conclusively deemed to have waived any such claim against the L/C Issuer and its correspondentsunless such notice is given as aforesaid.(f) Role of L/C Issuer. Each Lender and each Borrower agree that, in paying any drawing under a Letter of Credit, theL/C Issuer shall not have any responsibility to obtain any document (other than any sight or time draft, certificates anddocuments expressly required by such Letter of Credit) or to ascertain or inquire as to the validity or accuracy of any suchdocument or the authority of the Person executing or delivering any such document. None of the L/C Issuer, the AdministrativeAgent, any of their respective Related Parties nor any correspondent, participant or assignee of the L/C Issuer shall be liable toany Lender for (i) any action taken or omitted in connection herewith at the request or with the approval of the Lenders or theRequired Lenders, as applicable; (ii) any action taken or omitted in the absence of gross negligence or willful misconduct; or(iii) the due execution, effectiveness, validity or enforceability of any document or instrument related to any Letter of Credit orIssuer Document. The Borrowers hereby assume all risks of the acts or omissions of any beneficiary or transferee with respect toits use of any Letter of Credit; provided, however, that this assumption is not intended to, and shall not, preclude the Borrowersfrom pursuing such rights and remedies as they may have against the beneficiary or transferee at law or under any otheragreement. None of the L/C Issuer, the Administrative Agent, any of their respective Related Parties nor any correspondent,participant or assignee of the L/C Issuer shall be liable or responsible for any of the matters described in Section 2.03(e);provided, however, that anything in such clauses to the contrary notwithstanding, the Borrowers may have a claim against theL/C Issuer, and the L/C Issuer may be liable to the Borrowers, to the extent, but only to the extent, of any direct, as opposed toconsequential or exemplary, damages suffered by the Borrowers which the Borrowers prove, as determined by a finalnonappealable judgment of a court of competent jurisdiction, were caused by the L/C Issuer’s willful misconduct or grossnegligence or the L/C Issuer’s willful failure to pay under any Letter of Credit after the presentation to it by the beneficiary of asight or time draft and certificate(s) strictly complying with the terms and conditions of a Letter of Credit. In furtherance and notin limitation of the foregoing, the L/C Issuer may accept documents that appear on their face to be in order, withoutresponsibility for further investigation, regardless of any notice or information to the contrary, and the L/C Issuer shall not beresponsible for the validity or sufficiency of any instrument transferring, endorsing or assigning or purporting to transfer,endorse or assign a Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which mayprove to be invalid or ineffective for any reason. The L/C Issuer may send a Letter of Credit or conduct any communication toor from the beneficiary via the Society for Worldwide Interbank Financial Telecommunication (“SWIFT”) message or overnightcourier, or any other commercially reasonable means of communicating with a beneficiary.(g) Applicability of ISP; Limitation of Liability. Unless otherwise expressly agreed by the L/C Issuer and the Borrowerswhen a Letter of Credit is issued, the rules of the ISP shall apply to each Letter of Credit. Notwithstanding the foregoing, the L/CIssuer shall not be responsible to the Borrowers for, and the L/C Issuer’s rights and remedies against the Borrowers shall not beimpaired by, any action or inaction of the L/C Issuer required or permitted under any Law, order, or practice that is required orpermitted to be applied to any Letter of Credit or this Agreement, including the Law or any order of a jurisdiction where the L/CIssuer or the beneficiary is located, the practice stated in the ISP or UCP, as applicable, or in the decisions, opinions, practicestatements, or official commentary of the ICC Banking Commission, the Bankers Association for Finance and Trade -International Financial Services Association (BAFT-IFSA), or the Institute of International Banking Law & Practice, whether ornot any Letter of Credit chooses such Law or practice.(h) Letter of Credit Fees. The Borrowers shall pay to the Administrative Agent for the account of each Lender inaccordance, subject to Section 2.15, with its Applicable Percentage, in Dollars, a Letter of Credit fee (the “Letter of Credit Fee”)for each Letter of Credit equal to the Applicable Rate times the Dollar Equivalent of the daily amount available to be drawnunder such Letter of Credit. For purposes of computing the daily amount available to be drawn under any Letter of Credit, theamount of such Letter of Credit shall be determined in accordance with Section 1.08. Letter of Credit Fees shall be (i) due andpayable on the first Business Day after the end of each March, June, September and December, commencing with the first suchdate to occur after the issuance of such Letter of Credit, on the Letter of Credit Expiration Date and thereafter on demand and(ii) computed on a quarterly basis in arrears. If there is any change in the Applicable Rate during any quarter, the daily amountavailable to be drawn under each Letter of Credit shall be computed and multiplied by the Applicable Rate separately for eachperiod during such quarter that such Applicable Rate was in effect. Notwithstanding anything to the contrary contained herein,upon the request of the Required Lenders, while any Event of Default exists, all Letter of Credit Fees shall accrue at the DefaultRate.(i) Fronting Fee and Documentary and Processing Charges Payable to L/C Issuer. The Borrowers shall pay directly tothe L/C Issuer for its own account, in Dollars, a fronting fee with respect to each Letter of Credit, at the rate per annum specifiedin the Fee Letter, computed on the Dollar Equivalent of the daily amount available to be drawn under such Letter of Credit on aquarterly basis in arrears. Such fronting fee shall be due and payable on the tenth Business Day after the end of each March,June, September and December in respect of the most recently-ended quarterly period (or portion thereof, in the case of the firstpayment), commencing with the first such date to occur after the issuance of such Letter of Credit, on the Letter of CreditExpiration Date and thereafter on demand. For purposes of computing the daily amount available to be drawn under any Letterof Credit, the amount of such Letter of Credit shall be determined in accordance with Section 1.08. In addition, the Borrowersshall pay directly to the L/C Issuer for its own account, in Dollars, the customary issuance, presentation, amendment and otherprocessing fees, and other standard costs and charges, of the L/C Issuer relating to letters of credit as from time to time in effect.Such customary fees and standard costs and charges are due and payable on demand and are nonrefundable.(j) Conflict with Issuer Documents. In the event of any conflict between the terms hereof and the terms of any IssuerDocument, the terms hereof shall control.(k) Letters of Credit Issued for Subsidiaries. Notwithstanding that a Letter of Credit issued or outstanding hereunder isin support of any obligations of, or is for the account of, a Subsidiary, the Borrowers shall be obligated to reimburse the L/CIssuer hereunder for any and all drawings under such Letter of Credit. The Borrowers hereby acknowledge that the issuance ofLetters of Credit for the account of Subsidiaries inures to the benefit of each Borrower, and that the Borrowers’ business derivessubstantial benefits from the businesses of such Subsidiaries.2.04 Swingline Loans.(a) Swingline Facility. Subject to the terms and conditions set forth herein, the Swingline Lender, in reliance upon theagreements of the other Lenders set forth in this Section 2.04, may in its sole discretion make loans (each such loan, a“Swingline Loan”) to the Borrowers, on a joint and several basis and as co-borrowers, in Dollars from time to time on anyBusiness Day during the Availability Period in an aggregate amount not to exceed at any time outstanding the amount of theSwingline Sublimit, notwithstanding the fact that such Swingline Loans, when aggregated with the Applicable Percentage of theOutstanding Amount of Revolving Loans and L/C Obligations of the Lender acting as Swingline Lender, may exceed theamount of such Lender’s Revolving Commitment; provided, however, that (i) after giving effect to any Swingline Loan, (A) theTotal Revolving Outstandings shall not exceed the Aggregate Revolving Commitments and (B) the Revolving Credit Exposureof any Lender shall not exceed such Lender’s Revolving Commitment, (ii) the Borrowers shall not use the proceeds of anySwingline Loan to refinance any outstanding Swingline Loan and (iii) the Swingline Lender shall not be under any obligation tomake any Swingline Loan if it shall determine (which determination shall be conclusive and binding absent manifest error) thatit has, or by such Credit Extension may have, Fronting Exposure. Within the foregoing limits, and subject to the other terms andconditions hereof, the Borrowers may borrow under this Section 2.04, prepay under Section 2.05, and reborrow under thisSection 2.04. Each Swingline Loan shall be a Base Rate Loan. Immediately upon the making of a Swingline Loan, each Lendershall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Swingline Lender a riskparticipation in such Swingline Loan in an amount equal to the product of such Lender’s Applicable Percentage times theamount of such Swingline Loan.(b) Borrowing Procedures. Each Borrowing of Swingline Loans shall be made upon the Borrowers’ irrevocable noticeto the Swingline Lender and the Administrative Agent, which may be given by (A) telephone or (B) by a Swingline LoanNotice; provided that any telephonic notice must be confirmed promptly by delivery to the Swingline Lender and theAdministrative Agent of a Swingline Loan Notice. Each such Swingline Loan Notice must be received by the Swingline Lenderand the Administrative Agent not later than 1:00 p.m. on the requested borrowing date, and shall specify (i) the amount to beborrowed, which shall be a minimum principal amount of $100,000, and (ii) the requested borrowing date, which shall be aBusiness Day. Promptly after receipt by the Swingline Lender of any Swingline Loan Notice, the Swingline Lender will confirmwith the Administrative Agent (by telephone or in writing) that the Administrative Agent has also received such Swingline LoanNotice and, if not, the Swingline Lender will notify the Administrative Agent (by telephone or in writing) of the contentsthereof. Unless the Swingline Lender has received notice (by telephone or in writing) from the Administrative Agent (includingat the request of any Lender) prior to 2:00 p.m. on the date of the proposed Borrowing of Swingline Loans (A) directing theSwingline Lender not to make such Swingline Loan as a result of the limitations set forth in the first proviso to the first sentenceof Section 2.04(a), or (B) that one or more of the applicable conditions specified in Article IV is not then satisfied, then, subjectto the terms and conditions hereof, the Swingline Lender will, not later than 3:00 p.m. on the borrowing date specified in suchSwingline Loan Notice, make the amount of its Swingline Loan available to the Borrowers.(c) Refinancing of Swingline Loans.(i) The Swingline Lender at any time in its sole discretion may request, on behalf of the Borrowers (whichhereby irrevocably authorize the Swingline Lender to so request on their behalf), that each Lender make a RevolvingLoan that is a Base Rate Loan in an amount equal to such Lender’s Applicable Percentage of the amount of SwinglineLoans then outstanding. Such request shall be made in writing (which written request shall be deemed to be a LoanNotice for purposes hereof) and in accordance with the requirements of Section 2.02, without regard to the minimumand multiples specified therein for the principal amount of Base Rate Loans, but subject to the unutilized portion of theAggregate Revolving Commitments and the conditions set forth in Section 4.02. The Swingline Lender shall furnishPRGX with a copy of the applicable Loan Notice promptly after delivering such notice to the Administrative Agent.Each Lender shall make an amount equal to its Applicable Percentage of the amount specified in such Loan Noticeavailable to the Administrative Agent in Same Day Funds (and the Administrative Agent may apply Cash Collateralavailable with respect to the applicable Swingline Loan) for the account of the Swingline Lender at the AdministrativeAgent’s Office for Dollar-denominated payments not later than 1:00 p.m. on the day specified in such Loan Notice,whereupon, subject to Section 2.04(c)(ii), each Lender that so makes funds available shall be deemed to have made aRevolving Loan that is a Base Rate Loan to the Borrowers in such amount. The Administrative Agent shall remit thefunds so received to the Swingline Lender.(ii) If for any reason any Swingline Loan cannot be refinanced by such a Borrowing of Revolving Loans inaccordance with Section 2.04(c)(i), the request for Revolving Loans that are Base Rate Loans submitted by theSwingline Lender as set forth herein shall be deemed to be a request by the Swingline Lender that each of the Lendersfund its risk participation in the relevant Swingline Loan and each Lender’s payment to the Administrative Agent for theaccount of the Swingline Lender pursuant to Section 2.04(c)(i) shall be deemed payment in respect of such participation.(iii) If any Lender fails to make available to the Administrative Agent for the account of the Swingline Lenderany amount required to be paid by such Lender pursuant to the foregoing provisions of this Section 2.04(c) by the timespecified in Section 2.04(c)(i), the Swingline Lender shall be entitled to recover from such Lender (acting through theAdministrative Agent), on demand, such amount with interest thereon for the period from the date such payment isrequired to the date on which such payment is immediately available to the Swingline Lender at a rate per annum equalto the applicable Overnight Rate from time to time in effect, plus any reasonable administrative, processing or similarfees customarily charged by the Swingline Lender in connection with the foregoing. If such Lender pays such amount(with interest and fees as aforesaid), the amount so paid shall constitute such Lender’s Revolving Loan included in therelevant Borrowing or funded participation in the relevant Swingline Loan, as the case may be. A certificate of theSwingline Lender submitted to any Lender (through the Administrative Agent) with respect to any amounts owing underthis clause (iii) shall be conclusive absent manifest error.(iv) Each Lender’s obligation to make Revolving Loans or to purchase and fund risk participations in SwinglineLoans pursuant to this Section 2.04(c) shall be absolute and unconditional and shall not be affected by anycircumstance, including (A) any setoff, counterclaim, recoupment, defense or other right that such Lender may haveagainst the Swingline Lender, either Borrower or any other Person for any reason whatsoever, (B) the occurrence orcontinuance of a Default, or (C) any other occurrence, event or condition, whether or not similar to any of the foregoing;provided, however, that each Lender’s obligation to make Revolving Loans pursuant to this Section 2.04(c) is subject tothe conditions set forth in Section 4.02 (other than delivery by the Borrowers of a Loan Notice). No such funding of riskparticipations shall relieve or otherwise impair the obligation of the Borrowers to repay Swingline Loans, together withinterest as provided herein.(d) Repayment of Participations.(i) At any time after any Lender has purchased and funded a risk participation in a Swingline Loan, if theSwingline Lender receives any payment on account of such Swingline Loan, the Swingline Lender will distribute to suchLender its Applicable Percentage thereof in the same funds as those received by the Swingline Lender.(ii) If any payment received by the Swingline Lender in respect of principal or interest on any Swingline Loanis required to be returned by the Swingline Lender under any of the circumstances described in Section 11.05 (includingpursuant to any settlement entered into by the Swingline Lender in its discretion), each Lender shall pay to the SwinglineLender its Applicable Percentage thereof on demand of the Administrative Agent, plus interest thereon from the date ofsuch demand to the date such amount is returned, at a rate per annum equal to the applicable Overnight Rate. TheAdministrative Agent will make such demand upon the request of the Swingline Lender. The obligations of the Lendersunder this clause shall survive the payment in full of the Obligations and the termination of this Agreement.(e) Interest for Account of Swingline Lender. The Swingline Lender shall be responsible for invoicing the Borrowersfor interest on the Swingline Loans. Until each Lender funds its Revolving Loans that are Base Rate Loans or risk participationpursuant to this Section 2.04 to refinance such Lender’s Applicable Percentage of any Swingline Loan, interest in respect ofsuch Applicable Percentage shall be solely for the account of the Swingline Lender.(f) Payments Directly to Swingline Lender. The Borrowers shall make all payments of principal and interest in respectof the Swingline Loans directly to the Swingline Lender.2.05 Prepayments.(a) Voluntary Prepayments.(i) Revolving Loans. The Borrowers may, upon delivery of a Notice of Loan Prepayment to the AdministrativeAgent, at any time or from time to time voluntarily prepay Revolving Loans in whole or in part without premium orpenalty; provided that, unless otherwise agreed by the Administrative Agent, (A) such notice must be received by theAdministrative Agent not later than 11:00 a.m. (1) three (3) Business Days prior to any date of prepayment ofEurocurrency Rate Loans denominated in Dollars, (2) four (4) Business Days prior to any date of prepayment ofEurocurrency Rate Loans denominated in Alternative Currencies, and (3) on the date of prepayment of Base Rate Loansor LIBOR Daily Floating Rate Loans; (B) any such prepayment of Eurocurrency Rate Loans shall be in a principalamount of $5,000,000 or a whole multiple of $1,000,000 in excess thereof (or, if less, the entire principal amountthereof then outstanding); and (C) any prepayment of Base Rate Loans or LIBOR Daily Floating Rate Loans shall be in aprincipal amount of $500,000 or a whole multiple of $500,000 in excess thereof (or, if less, the entire principal amountthereof then outstanding). Each such notice shall specify the date and amount of such prepayment and the Type(s) ofLoans to be prepaid and, if Eurocurrency Rate Loans are to be prepaid, the Interest Period(s) of such Loans. TheAdministrative Agent will promptly notify each Lender of its receipt of each such notice, and of the amount of suchLender’s Applicable Percentage of such prepayment. If such notice is given by the Borrowers, the Borrowers shall makesuch prepayment and the payment amount specified in such notice shall be due and payable on the date specifiedtherein. Any prepayment of a Eurocurrency Rate Loan shall be accompanied by all accrued interest on the amountprepaid, together with any additional amounts required pursuant to Section 3.05. Subject to Section 2.15, each suchprepayment shall be applied to the Loans of the applicable Lenders in accordance with their respective ApplicablePercentages.(ii) Swingline Loans. The Borrowers may, upon notice to the Swingline Lender (with a copy to theAdministrative Agent), at any time or from time to time, voluntarily prepay Swingline Loans in whole or in part withoutpremium or penalty; provided that, unless otherwise agreed by the Swingline Lender, (i) such notice must be receivedby the Swingline Lender and the Administrative Agent not later than 1:00 p.m. on the date of the prepayment, and (ii)any such prepayment shall be in a minimum principal amount of $100,000 or a whole multiple of $100,000 in excessthereof (or, if less, the entire principal thereof then outstanding). Each such notice shall specify the date and amount ofsuch prepayment. If such notice is given by the Borrowers, the Borrowers shall make such prepayment and the paymentamount specified in such notice shall be due and payable on the date specified therein.(b) Mandatory Prepayments.(i) Revolving Commitments. If for any reason the Total Revolving Outstandings at any time exceed theAggregate Revolving Commitments then in effect, the Borrowers shall immediately prepay Revolving Loans and/orSwingline Loans and/or Cash Collateralize the L/C Obligations in an aggregate amount equal to such excess; provided,however, that the Borrowers shall not be required to Cash Collateralize the L/C Obligations pursuant to this Section2.05(b)(i) unless after the prepayment in full of the Revolving Loans and Swingline Loans the Total RevolvingOutstandings exceed the Aggregate Revolving Commitments then in effect.(ii) Application of Mandatory Prepayments. All amounts required to be paid pursuant to this Section 2.05(b)shall be applied as follows: first, ratably to the L/C Borrowings and the Swingline Loans, second, to the outstandingRevolving Loans, and, third, to Cash Collateralize the remaining L/C Obligations.Within the parameters of the applications set forth above, prepayments shall be applied first to Base Rate Loans, then toLIBOR Daily Floating Rate Loans and then to Eurocurrency Rate Loans in direct order of Interest Period maturities. Allprepayments under this Section 2.05(b) shall be subject to Section 3.05, but otherwise without premium or penalty, andshall be accompanied by interest on the principal amount prepaid through the date of prepayment.2.06 Termination or Reduction of Aggregate Revolving Commitments.The Borrowers may, upon notice to the Administrative Agent, terminate the Aggregate Revolving Commitments, the Letter ofCredit Sublimit or the Swingline Sublimit, or from time to time permanently reduce the Aggregate Revolving Commitments, the Letterof Credit Sublimit or the Swingline Sublimit; provided that (i) any such notice shall be received by the Administrative Agent not laterthan 11:00 a.m. five (5) Business Days prior to the date of termination or reduction, (ii) any such partial reduction shall be in anaggregate amount of $5,000,000 or any whole multiple of $1,000,000 in excess thereof, (iii) the Borrowers shall not terminate orreduce the Aggregate Revolving Commitments if, after giving effect thereto and to any concurrent prepayments hereunder, the TotalRevolving Outstandings would exceed the Aggregate Revolving Commitments, (iv) the Borrowers shall not terminate or reduce theLetter of Credit Sublimit if, after giving effect thereto and to any concurrent prepayments hereunder, the Outstanding Amount of theL/C Obligations would exceed the Letter of Credit Sublimit, (v) the Borrowers shall not terminate or reduce the Swingline Sublimit if,after giving effect thereto and to any concurrent prepayments hereunder, the Outstanding Amount of Swingline Loans would exceedthe Swingline Sublimit and (vi) if, after giving effect to any reduction of the Aggregate Revolving Commitments, the Letter of CreditSublimit or the Swingline Sublimit exceeds the amount of the Aggregate Revolving Commitments, such sublimit shall be automaticallyreduced by the amount of such excess. The Administrative Agent will promptly notify the Lenders of any such notice of termination orreduction. Any reduction of the Aggregate Revolving Commitments shall be applied to the Revolving Commitment of each Lenderaccording to its Applicable Percentage. All fees accrued until the effective date of any termination of the Aggregate RevolvingCommitments shall be paid on the effective date of such termination.2.07 Repayment of Loans.(a) Revolving Loans. The Borrowers shall repay to the Lenders on the Maturity Date the aggregate principal amount ofall Revolving Loans outstanding on such date.(b) Swingline Loans. The Borrowers shall repay each Swingline Loan on the earlier to occur of (i) the date ten (10)Business Days after such Swingline Loan is made and (ii) the Maturity Date.2.08 Interest.(a) Subject to the provisions of subsection (b) below, (i) each Eurocurrency Rate Loan shall bear interest on theoutstanding principal amount thereof for each Interest Period at a rate per annum equal to the sum of the Eurocurrency Rate forsuch Interest Period plus the Applicable Rate applicable to such Loan; (ii) each LIBOR Daily Floating Rate Loan shall bearinterest on the outstanding principal amount thereof from the applicable borrowing date at a rate per annum equal to the sum ofthe LIBOR Daily Floating Rate plus the Applicable Rate applicable to such Loan; (iii) each Base Rate Loan shall bear interest onthe outstanding principal amount thereof from the applicable borrowing date at a rate per annum equal to the sum of the BaseRate plus the Applicable Rate applicable to such Loan; and (iv) each Swingline Loan shall bear interest on the outstandingprincipal amount thereof from the applicable borrowing date at a rate per annum equal to the sum of the Base Rate plus theApplicable Rate applicable to such Loan. To the extent that any calculation of interest or any fee required to be paid under thisAgreement shall be based on (or result in) a calculation that is less than zero, such calculation shall be deemed zero for purposesof this Agreement.(b) (i) Upon the occurrence of an Event of Default under Section 8.01(f) or (g) (without regard to any applicablegrace periods), outstanding Obligations (including Letter of Credit Fees) shall thereafter bear interest at a fluctuating interest rateper annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws.(i) Upon the request of the Required Lenders, while any Event of Default exists (other than as set forth in clause(b)(i) above), the Borrowers shall pay interest on the principal amount of all outstanding Obligations hereunder at afluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicableLaws.(ii) Accrued and unpaid interest on past due amounts (including interest on past due interest) shall be due andpayable upon demand.(c) Interest on each Loan shall be due and payable in arrears on each Interest Payment Date applicable thereto and atsuch other times as may be specified herein. Interest hereunder shall be due and payable in accordance with the terms hereofbefore and after judgment, and before and after the commencement of any proceeding under any Debtor Relief Law.2.09 Fees.In addition to certain fees described in subsections (h) and (i) of Section 2.03:(a) Commitment Fee. The Borrowers shall pay to the Administrative Agent, for the account of each Lender inaccordance with its Applicable Percentage, a commitment fee in Dollars equal to the product of (i) the Applicable Rate times (ii)the actual daily amount by which the Aggregate Revolving Commitments exceed the sum of (y) the Outstanding Amount ofRevolving Loans and (z) the Outstanding Amount of L/C Obligations, subject to adjustment as provided in Section 2.15. For theavoidance of doubt, the Outstanding Amount of Swingline Loans shall not be counted towards or considered usage of theAggregate Revolving Commitments for purposes of determining the commitment fee. The commitment fee shall accrue at alltimes during the Availability Period, including at any time during which one or more of the conditions in Article IV is not met,and shall be due and payable quarterly in arrears on the first Business Day of each January, April, July and October,commencing with the first such date to occur after the Closing Date, and on the last day of the Availability Period. Thecommitment fee shall be calculated quarterly in arrears, and if there is any change in the Applicable Rate during any quarter, theactual daily amount shall be computed and multiplied by the Applicable Rate separately for each period during such quarter thatsuch Applicable Rate was in effect.(b) Other Fees.(i) The Borrowers shall pay to the Arranger and the Administrative Agent for their own respective accounts, inDollars, fees in the amounts and at the times specified in the Fee Letter. Such fees shall be fully earned when paid andshall not be refundable for any reason whatsoever.(ii) The Borrowers shall pay to the Lenders, in Dollars, such fees as shall have been separately agreed upon inwriting in the amounts and at the times so specified. Such fees shall be fully earned when paid and shall not berefundable for any reason whatsoever.2.10 Computation of Interest and Fees; Retroactive Adjustments of Applicable Rate.(a) All computations of interest for Base Rate Loans (including Base Rate Loans determined by reference to the LIBORDaily Floating Rate) shall be made on the basis of a year of 365 or 366 days, as the case may be, and actual days elapsed. Allother computations of fees and interest shall be made on the basis of a 360-day year and actual days elapsed (which results inmore fees or interest, as applicable, being paid than if computed on the basis of a 365-day year), or, in the case of interest inrespect of Loans denominated in Alternative Currencies as to which market practice differs from the foregoing, in accordancewith such market practice. Interest shall accrue on each Loan for the day on which the Loan is made, and shall not accrue on aLoan, or any portion thereof, for the day on which the Loan or such portion is paid, provided that any Loan that is repaid on thesame day on which it is made shall, subject to Section 2.12(a), bear interest for one day. Each determination by theAdministrative Agent of an interest rate or fee hereunder shall be conclusive and binding for all purposes, absent manifest error.(b) If, as a result of any restatement of or other adjustment to the financial statements of PRGX or for any other reason,PRGX or the Lenders determine that (i) the Consolidated Leverage Ratio as calculated by the Borrowers as of any applicabledate was inaccurate and (ii) a proper calculation of the Consolidated Leverage Ratio would have resulted in higher pricing forsuch period, the Borrowers shall immediately and retroactively be obligated to pay to the Administrative Agent for the accountof the applicable Lenders or the L/C Issuer, as the case may be, promptly on demand by the Administrative Agent (or, after theoccurrence of an actual or deemed entry of an order for relief with respect to either Borrower under the Bankruptcy Code of theUnited States, automatically and without further action by the Administrative Agent, any Lender or the L/C Issuer), an amountequal to the excess of the amount of interest and fees that should have been paid for such period over the amount of interest andfees actually paid for such period. This paragraph shall not limit the rights of the Administrative Agent, any Lender or the L/CIssuer, as the case may be, under this Agreement to the payment of any Obligations hereunder at the Default Rate or underArticle VIII. The Borrowers’ obligations under this paragraph shall survive the termination of the Aggregate RevolvingCommitments and the repayment of all other Obligations hereunder.2.11 Evidence of Debt.(a) The Credit Extensions made by each Lender shall be evidenced by one or more accounts or records maintained bysuch Lender and by the Administrative Agent in the ordinary course of business. The accounts or records maintained by theAdministrative Agent and each Lender shall be conclusive absent manifest error of the amount of the Credit Extensions madeby the Lenders to the Borrowers and the interest and payments thereon. Any failure to so record or any error in doing so shallnot, however, limit or otherwise affect the obligation of the Borrowers hereunder to pay any amount owing with respect to theObligations. In the event of any conflict between the accounts and records maintained by any Lender and the accounts andrecords of the Administrative Agent in respect of such matters, the accounts and records of the Administrative Agent shallcontrol in the absence of manifest error. Upon the request of any Lender made through the Administrative Agent, the Borrowersshall execute and deliver to such Lender (through the Administrative Agent) a promissory note, which shall evidence suchLender’s Loans in addition to such accounts or records. Each such promissory note shall be in the form of Exhibit 2.11(a) (a“Note”). Each Lender may attach schedules to its Note and endorse thereon the date, Type (if applicable), amount, currency andmaturity of its Loans and payments with respect thereto.(b) In addition to the accounts and records referred to in subsection (a) above, each Lender and the AdministrativeAgent shall maintain in accordance with its usual practice accounts or records evidencing the purchases and sales by suchLender of participations in Letters of Credit and Swingline Loans. In the event of any conflict between the accounts and recordsmaintained by the Administrative Agent and the accounts and records of any Lender in respect of such matters, the accountsand records of the Administrative Agent shall control in the absence of manifest error.2.12 Payments Generally; Administrative Agent’s Clawback.(a) General. All payments to be made by the Borrowers shall be made free and clear of and without condition ordeduction for any counterclaim, defense, recoupment or setoff. Except as otherwise expressly provided herein and except withrespect to principal of and interest on Loans denominated in an Alternative Currency, all payments by the Borrowers hereundershall be made to the Administrative Agent, for the account of the respective Lenders to which such payment is owed, at theapplicable Administrative Agent’s Office in Dollars and in Same Day Funds not later than 2:00 p.m. on the date specifiedherein. Except as otherwise expressly provided herein, all payments by the Borrowers hereunder with respect to principal andinterest on Loans denominated in an Alternative Currency shall be made to the Administrative Agent, for the account of therespective Lenders to which such payment is owed, at the applicable Administrative Agent’s Office in such AlternativeCurrency and in Same Day Funds not later than the Applicable Time specified by the Administrative Agent on the datesspecified herein. Without limiting the generality of the foregoing, the Administrative Agent may require that any payments dueunder this Agreement be made in the United States. If, for any reason, the Borrowers are prohibited by any Law from makingany required payment hereunder in an Alternative Currency, the Borrowers shall make such payment in Dollars in the DollarEquivalent of the Alternative Currency payment amount. The Administrative Agent will promptly distribute to each Lender itsApplicable Percentage (or other applicable share as provided herein) of such payment in like funds as received by wire transferto such Lender’s Lending Office. All payments received by the Administrative Agent (i) after 2:00 p.m., in the case of paymentsin Dollars, or (ii) after the Applicable Time specified by the Administrative Agent in the case of payments in an AlternativeCurrency, shall in each case be deemed received on the next succeeding Business Day and any applicable interest or fee shallcontinue to accrue. Except as otherwise specifically provided for in this Agreement, if any payment to be made by theBorrowers shall come due on a day other than a Business Day, payment shall be made on the next following Business Day, andsuch extension of time shall be reflected in computing interest or fees, as the case may be.(b) (i) Funding by Lenders; Presumption by Administrative Agent. Unless the Administrative Agent shall havereceived notice from a Lender prior to the proposed date of any Borrowing of Eurocurrency Rate Loans (or, in the case of anyBorrowing of LIBOR Daily Floating Rate Loans or Base Rate Loans, prior to 12:00 noon on the date of such Borrowing) thatsuch Lender will not make available to the Administrative Agent such Lender’s share of such Borrowing, the AdministrativeAgent may assume that such Lender has made such share available on such date in accordance with Section 2.02 (or, in thecase of a Borrowing of Base Rate Loans, that such Lender has made such share available in accordance with and at the timerequired by Section 2.02) and may, in reliance upon such assumption, make available to the Borrowers a correspondingamount. In such event, if a Lender has not in fact made its share of the applicable Borrowing available to the AdministrativeAgent, then the applicable Lender and the Borrowers severally agree to pay to the Administrative Agent forthwith on demandsuch corresponding amount in Same Day Funds with interest thereon, for each day from and including the date such amount ismade available to the Borrowers to but excluding the date of payment to the Administrative Agent, at (A) in the case of apayment to be made by such Lender, the Overnight Rate, plus any reasonable administrative, processing or similar feescustomarily charged by the Administrative Agent in connection with the foregoing, and (B) in the case of a payment to be madeby the Borrowers, the interest rate applicable to Base Rate Loans. If the Borrowers and such Lender shall pay such interest to theAdministrative Agent for the same or an overlapping period, the Administrative Agent shall promptly remit to the Borrowers theamount of such interest paid by the Borrowers for such period. If such Lender pays its share of the applicable Borrowing to theAdministrative Agent, then the amount so paid shall constitute such Lender’s Loan included in such Borrowing. Any paymentby the Borrowers shall be without prejudice to any claim the Borrowers may have against a Lender that shall have failed tomake such payment to the Administrative Agent.(i) Payments by Borrower; Presumptions by Administrative Agent. Unless the Administrative Agent shall havereceived notice from PRGX prior to the date on which any payment is due to the Administrative Agent for the accountof the Lenders or the L/C Issuer hereunder that the Borrowers will not make such payment, the Administrative Agentmay assume that the Borrowers have made such payment on such date in accordance herewith and may, in relianceupon such assumption, distribute to the Lenders or the L/C Issuer, as the case may be, the amount due. In such event, ifthe Borrowers have not in fact made such payment, then each of the Lenders or the L/C Issuer, as the case may be,severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender orthe L/C Issuer, in Same Day Funds with interest thereon, for each day from and including the date such amount isdistributed to it to but excluding the date of payment to the Administrative Agent, at the Overnight Rate.A notice of the Administrative Agent to any Lender or either Borrower with respect to any amount owing under this subsection(b) shall be conclusive, absent manifest error.(c) Failure to Satisfy Conditions Precedent. If any Lender makes available to the Administrative Agent funds for anyLoan to be made by such Lender as provided in the foregoing provisions of this Article II, and such funds are not madeavailable to the Borrowers by the Administrative Agent because the conditions to the applicable Credit Extension set forth inArticle IV are not satisfied or waived in accordance with the terms hereof, the Administrative Agent shall return such funds (inlike funds as received from such Lender) to such Lender, without interest.(d) Obligations of Lenders Several. The obligations of the Lenders hereunder to make Loans, to fund participations inLetters of Credit and Swingline Loans and to make payments pursuant to Section 11.04(c) are several and not joint. The failureof any Lender to make any Loan, to fund any such participation or to make any payment under Section 11.04(c) on any daterequired hereunder shall not relieve any other Lender of its corresponding obligation to do so on such date, and no Lender shallbe responsible for the failure of any other Lender to so make its Loan, to purchase its participation or to make its payment underSection 11.04(c).(e) Funding Source. Nothing herein shall be deemed to obligate any Lender to obtain the funds for any Loan in anyparticular place or manner or to constitute a representation by any Lender that it has obtained or will obtain the funds for anyLoan in any particular place or manner.2.13 Sharing of Payments by Lenders.If any Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain payment in respect of any principal ofor interest on any of the Loans made by it, or the participations in L/C Obligations or in Swingline Loans held by it resulting in suchLender’s receiving payment of a proportion of the aggregate amount of such Loans or participations and accrued interest thereongreater than its pro rata share thereof as provided herein, then the Lender receiving such greater proportion shall (a) notify theAdministrative Agent of such fact, and (b) purchase (for cash at face value) participations in the Loans and subparticipations in L/CObligations and Swingline Loans of the other Lenders, or make such other adjustments as shall be equitable, so that the benefit of allsuch payments shall be shared by the Lenders ratably in accordance with the aggregate amount of principal of and accrued interest ontheir respective Loans and other amounts owing them, provided that:(i) if any such participations or subparticipations are purchased and all or any portion of the payment givingrise thereto is recovered, such participations or subparticipations shall be rescinded and the purchase price restored tothe extent of such recovery, without interest; and(ii) the provisions of this Section shall not be construed to apply to (A) any payment made by or on behalf ofthe Borrowers pursuant to and in accordance with the express terms of this Agreement (including the application offunds arising from the existence of a Defaulting Lender), (B) the application of Cash Collateral provided for in Section2.14, or (C) any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any ofits Loans or subparticipations in L/C Obligations or Swingline Loans to any assignee or participant, other than anassignment to any Loan Party or any Subsidiary (as to which the provisions of this Section shall apply).Each Loan Party consents to the foregoing and agrees, to the extent it may effectively do so under applicable Law, that anyLender acquiring a participation pursuant to the foregoing arrangements may exercise against such Loan Party rights of setoff andcounterclaim with respect to such participation as fully as if such Lender were a direct creditor of such Loan Party in the amount of suchparticipation.2.14 Cash Collateral.(a) Certain Credit Support Events. If (i) the L/C Issuer has honored any full or partial drawing request under any Letterof Credit and such drawing has resulted in an L/C Borrowing, (ii) as of the Letter of Credit Expiration Date, any L/C Obligationfor any reason remains outstanding, (iii) the Borrowers shall be required to provide Cash Collateral pursuant to Section 2.05 or8.02(c) or (iv) there shall exist a Defaulting Lender, the Borrowers shall immediately (in the case of clause (iii) above) or withinone Business Day (in all other cases) following any request by the Administrative Agent or the L/C Issuer provide CashCollateral in an amount not less than the applicable Minimum Collateral Amount (determined in the case of Cash Collateralprovided pursuant to clause (iv) above, after giving effect to Section 2.15(b) and any Cash Collateral provided by the DefaultingLender). Additionally, if the Administrative Agent notifies PRGX at any time that the Outstanding Amount of all L/CObligations at such time exceeds one hundred five percent (105%) of the Letter of Credit Sublimit then in effect, then, withintwo (2) Business Days after receipt of such notice, the Borrowers shall provide Cash Collateral for the Outstanding Amount ofthe L/C Obligations in an amount not less than the amount by which the Outstanding Amount of all L/C Obligations exceeds theLetter of Credit Sublimit.(b) Grant of Security Interest.(i) Each Borrower hereby grants to (and subjects to the control of) the Administrative Agent, for the benefit ofthe Administrative Agent, the L/C Issuer and the Lenders, and agrees to maintain, a first priority security interest in allCash Collateral delivered by such Borrower under Section 2.14(a), and in all proceeds of the foregoing, all as securityfor the obligations to which such Cash Collateral may be applied pursuant to Section 2.14(c). If at any time theAdministrative Agent determines that Cash Collateral is subject to any right or claim of any Person other than theAdministrative Agent or the L/C Issuer as herein provided (other than Liens permitted under Section 7.01(m)), or thatthe total amount of such Cash Collateral is less than the Minimum Collateral Amount, the Borrowers will, promptly upondemand by the Administrative Agent, pay or provide to the Administrative Agent additional Cash Collateral in anamount sufficient to eliminate such deficiency. All Cash Collateral (other than credit support not constituting fundssubject to deposit) shall be maintained in blocked, non-interest bearing deposit accounts at Bank of America. EachBorrower shall pay on demand therefor from time to time all customary account opening, activity and otheradministrative fees and charges in connection with the maintenance and disbursement of Cash Collateral.(ii) To the extent provided by any Defaulting Lender, such Defaulting Lender hereby grants to (and subjects tothe control of) the Administrative Agent, for the benefit of the Administrative Agent, the L/C Issuer and the Lenders, andagrees to maintain, a first priority security interest in all such cash, deposit accounts and all balances therein, and allother property so provided as collateral pursuant hereto delivered by such Defaulting Lender under Section 2.15, and inall proceeds of the foregoing, all as security for the obligations to which such Cash Collateral may be applied pursuantto Section 2.14(c). All Cash Collateral (other than credit support not constituting funds subject to deposit) shall bemaintained in blocked, non-interest bearing deposit accounts at Bank of America. Each Defaulting Lender shall pay ondemand therefor from time to time all customary account opening, activity and other administrative fees and charges inconnection with the maintenance and disbursement of Cash Collateral.(c) Application. Notwithstanding anything to the contrary contained in this Agreement, Cash Collateral provided underany of this Section 2.14 or Sections 2.03, 2.05, 2.15 or 8.02 in respect of Letters of Credit shall be held and applied to thesatisfaction of the specific L/C Obligations, obligations to fund participations therein (including, as to Cash Collateral providedby a Defaulting Lender, any interest accrued on such obligation) and other obligations for which the Cash Collateral was soprovided, prior to any other application of such property as may otherwise be provided for herein.(d) Release. Cash Collateral (or the appropriate portion thereof) provided to reduce Fronting Exposure or to secureother obligations shall be released promptly following (i) the elimination of the applicable Fronting Exposure or otherobligations giving rise thereto (including by the termination of Defaulting Lender status of the applicable Lender (or, asappropriate, its assignee following compliance with Section 11.06(b)(vi))) or (ii) the determination by the Administrative Agentand the L/C Issuer that there exists excess Cash Collateral; provided, however, (x) any such release shall be without prejudiceto, and any disbursement or other transfer of Cash Collateral shall be and remain subject to, any other Lien conferred under theLoan Documents and the other applicable provisions of the Loan Documents, and (y) the Person providing Cash Collateral andthe L/C Issuer may agree that Cash Collateral shall not be released but instead held to support future anticipated FrontingExposure or other obligations.2.15 Defaulting Lenders.(a) Adjustments. Notwithstanding anything to the contrary contained in this Agreement, if any Lender becomes aDefaulting Lender, then, until such time as that Lender is no longer a Defaulting Lender, to the extent permitted by applicableLaw:(i) Waivers and Amendments. Such Defaulting Lender’s right to approve or disapprove any amendment,waiver or consent with respect to this Agreement shall be restricted as set forth in the definition of “Required Lenders”and Section 11.01.(ii) Defaulting Lender Waterfall. Any payment of principal, interest, fees or other amounts received by theAdministrative Agent for the account of such Defaulting Lender (whether voluntary or mandatory, at maturity, pursuantto Article VIII or otherwise) or received by the Administrative Agent from a Defaulting Lender pursuant to Section11.08 shall be applied at such time or times as may be determined by the Administrative Agent as follows: first, to thepayment of any amounts owing by such Defaulting Lender to the Administrative Agent hereunder; second, to thepayment on a pro rata basis of any amounts owing by such Defaulting Lender to the L/C Issuer or Swingline Lenderhereunder; third, to Cash Collateralize the L/C Issuer’s Fronting Exposure with respect to such Defaulting Lender inaccordance with Section 2.14; fourth, as PRGX may request (so long as no Default exists), to the funding of any Loan inrespect of which such Defaulting Lender has failed to fund its portion thereof as required by this Agreement, asdetermined by the Administrative Agent; fifth, if so determined by the Administrative Agent and PRGX, to be held in adeposit account and released pro rata in order to (x) satisfy such Defaulting Lender’s potential future funding obligationswith respect to Loans under this Agreement and (y) Cash Collateralize the L/C Issuer’s future Fronting Exposure withrespect to such Defaulting Lender with respect to future Letters of Credit issued under this Agreement, in accordancewith Section 2.14; sixth, to the payment of any amounts owing to the Lenders, the L/C Issuer or Swingline Lender as aresult of any judgment of a court of competent jurisdiction obtained by any Lender, the L/C Issuer or the SwinglineLender against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under thisAgreement; seventh, so long as no Default exists, to the payment of any amounts owing to the Borrowers as a result ofany judgment of a court of competent jurisdiction obtained by the Borrowers against such Defaulting Lender as a resultof such Defaulting Lender’s breach of its obligations under this Agreement; and eighth, to such Defaulting Lender or asotherwise as may be required under the Loan Documents in connection with any Lien conferred thereunder or directedby a court of competent jurisdiction; provided that if (x) such payment is a payment of the principal amount of anyLoans or L/C Borrowings in respect of which such Defaulting Lender has not fully funded its appropriate share, and (y)such Loans were made or the related Letters of Credit were issued at a time when the conditions set forth in Section 4.02were satisfied or waived, such payment shall be applied solely to pay the Loans of, and L/C Obligations owed to, allNon-Defaulting Lenders on a pro rata basis prior to being applied to the payment of any Loans of, or L/C Obligationsowed to, such Defaulting Lender until such time as all Loans and funded and unfunded participations in L/C Obligationsand Swingline Loans are held by the Lenders pro rata in accordance with the Revolving Commitments hereunderwithout giving effect to Section 2.15(b). Any payments, prepayments or other amounts paid or payable to a DefaultingLender that are applied (or held) to pay amounts owed by a Defaulting Lender or to post Cash Collateral pursuant to thisSection 2.15(a)(ii) shall be deemed paid to and redirected by such Defaulting Lender, and each Lender irrevocablyconsents hereto.(iii) Certain Fees.(A) No Defaulting Lender shall be entitled to receive any fee payable under Section 2.09(a) for anyperiod during which that Lender is a Defaulting Lender (and the Borrowers shall not be required to pay anysuch fee that otherwise would have been required to have been paid to that Defaulting Lender).(B) Each Defaulting Lender shall be entitled to receive Letter of Credit Fees for any period during whichthat Lender is a Defaulting Lender only to the extent allocable to its Applicable Percentage of the stated amountof Letters of Credit for which it has provided Cash Collateral pursuant to Section 2.14.(C) With respect to any fee payable under any Letter of Credit Fee not required to be paid to anyDefaulting Lender pursuant to clause (B) above, the Borrowers shall (x) pay to each Non-Defaulting Lenderthat portion of any such fee otherwise payable to such Defaulting Lender with respect to such DefaultingLender’s participation in L/C Obligations that has been reallocated to such Non-Defaulting Lender pursuant toclause (b) below, (y) pay to the L/C Issuer the amount of any such fee otherwise payable to such DefaultingLender to the extent allocable to such L/C Issuer’s Fronting Exposure to such Defaulting Lender, and (z) not berequired to pay the remaining amount of any such fee.(b) Reallocation of Applicable Percentages to Reduce Fronting Exposure. All or any part of such Defaulting Lender’sparticipation in L/C Obligations and Swingline Loans shall be reallocated among the Non-Defaulting Lenders in accordancewith their respective Applicable Percentages (calculated without regard to such Defaulting Lender’s Revolving Commitment)but only to the extent that such reallocation does not cause the aggregate Revolving Credit Exposure of any Non-DefaultingLender to exceed such Non-Defaulting Lender’s Revolving Commitment. No reallocation hereunder shall constitute a waiver orrelease of any claim of any party hereunder against a Defaulting Lender arising from that Lender having become a DefaultingLender, including any claim of a Non-Defaulting Lender as a result of such Non-Defaulting Lender’s increased exposurefollowing such reallocation.(c) Cash Collateral, Repayment of Swingline Loans. If the reallocation described in clause (b) above cannot, or canonly partially, be effected, the Borrowers shall, without prejudice to any right or remedy available to them hereunder or underapplicable Law, (x) first, prepay Swingline Loans in an amount equal to the Swingline Lenders’ Fronting Exposure and (y)second, Cash Collateralize the L/C Issuer’s Fronting Exposure in accordance with the procedures set forth in Section 2.14.(d) Defaulting Lender Cure. If PRGX, the Administrative Agent, the Swingline Lender and the L/C Issuer agree inwriting that a Lender is no longer a Defaulting Lender, the Administrative Agent will so notify the parties hereto, whereupon asof the effective date specified in such notice and subject to any conditions set forth therein (which may include arrangementswith respect to any Cash Collateral), that Lender will, to the extent applicable, purchase at par that portion of outstanding Loansof the other Lenders or take such other actions as the Administrative Agent may determine to be necessary to cause the Loansand funded and unfunded participations in Letters of Credit and Swingline Loans to be held on a pro rata basis by the Lendersin accordance with their Applicable Percentages (without giving effect to Section 2.15(b)), whereupon such Lender will cease tobe a Defaulting Lender; provided that no adjustments will be made retroactively with respect to fees accrued or payments madeby or on behalf of the Borrowers while that Lender was a Defaulting Lender; and provided, further, that except to the extentotherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Lender will constitute awaiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender.ARTICLE III TAXES, YIELD PROTECTION AND ILLEGALITY3.01 Taxes.(a) Payments Free of Taxes; Obligation to Withhold; Payments on Account of Taxes.(i) Any and all payments by or on account of any obligation of any Loan Party under any Loan Document shallbe made without deduction or withholding for any Taxes, except as required by applicable Laws. If any applicable Laws(as determined in the good faith discretion of the Administrative Agent) require the deduction or withholding of any Taxfrom any such payment by the Administrative Agent or a Loan Party, then the Administrative Agent or such Loan Partyshall be entitled to make such deduction or withholding, upon the basis of the information and documentation to bedelivered pursuant to subsection (e) below.(ii) If any Loan Party or the Administrative Agent shall be required by the Internal Revenue Code to withholdor deduct any Taxes, including both United States Federal backup withholding and withholding taxes, from anypayment, then (A) the Administrative Agent shall withhold or make such deductions as are determined by theAdministrative Agent to be required based upon the information and documentation it has received pursuant tosubsection (e) below, (B) the Administrative Agent shall timely pay the full amount withheld or deducted to the relevantGovernmental Authority in accordance with the Internal Revenue Code, and (C) to the extent that the withholding ordeduction is made on account of Indemnified Taxes, the sum payable by the applicable Loan Party shall be increased asnecessary so that after any required withholding or the making of all required deductions (including deductionsapplicable to additional sums payable under this Section 3.01) the applicable Recipient receives an amount equal to thesum it would have received had no such withholding or deduction been made.(iii) If any Loan Party or the Administrative Agent shall be required by any applicable Laws other than theInternal Revenue Code to withhold or deduct any Taxes from any payment, then (A) such Loan Party or theAdministrative Agent, as required by such Laws, shall withhold or make such deductions as are determined by it to berequired based upon the information and documentation it has received pursuant to subsection (e) below, (B) such LoanParty or the Administrative Agent, to the extent required by such Laws, shall timely pay the full amount withheld ordeducted to the relevant Governmental Authority in accordance with such Laws, and (C) to the extent that thewithholding or deduction is made on account of Indemnified Taxes, the sum payable by the applicable Loan Party shallbe increased as necessary so that after any required withholding or the making of all required deductions (includingdeductions applicable to additional sums payable under this Section 3.01) the applicable Recipient receives an amountequal to the sum it would have received had no such withholding or deduction been made.(b) Payment of Other Taxes by the Loan Parties. Without limiting the provisions of subsection (a) above, the LoanParties shall timely pay to the relevant Governmental Authority in accordance with applicable Laws, or at the option of theAdministrative Agent timely reimburse it for the payment of, any Other Taxes.(c) Tax Indemnifications. (i) Each of the Loan Parties shall, and does hereby, jointly and severally indemnify eachRecipient, and shall make payment in respect thereof within ten (10) days after demand therefor, for the full amount of anyIndemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section3.01) payable or paid by such Recipient or required to be withheld or deducted from a payment to such Recipient, and anypenalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxeswere correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of suchpayment or liability delivered to the Borrowers by a Lender or the L/C Issuer (with a copy to the Administrative Agent), or bythe Administrative Agent on its own behalf or on behalf of a Lender or the L/C Issuer, shall be conclusive absent manifest error.Each of the Loan Parties shall, and does hereby, jointly and severally indemnify the Administrative Agent, and shall makepayment in respect thereof within ten (10) days after demand therefor, for any amount which a Lender or the L/C Issuer for anyreason fails to pay indefeasibly to the Administrative Agent as required pursuant to Section 3.01(c)(ii) below.(i) Each Lender and the L/C Issuer shall, and does hereby, severally indemnify, and shall make payment inrespect thereof within ten (10) days after demand therefor, (x) the Administrative Agent against any Indemnified Taxesattributable to such Lender or the L/C Issuer (but only to the extent that any Loan Party has not already indemnified theAdministrative Agent for such Indemnified Taxes and without limiting the obligation of the Loan Parties to do so), (y)the Administrative Agent and the Loan Parties, as applicable, against any Taxes attributable to such Lender’s failure tocomply with the provisions of Section 11.06(d) relating to the maintenance of a Participant Register and (z) theAdministrative Agent and the Loan Parties, as applicable, against any Excluded Taxes attributable to such Lender or theL/C Issuer, in each case, that are payable or paid by the Administrative Agent or a Loan Party in connection with anyLoan Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes werecorrectly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of suchpayment or liability delivered to any Lender by the Administrative Agent shall be conclusive absent manifest error. EachLender and the L/C Issuer hereby authorizes the Administrative Agent to set off and apply any and all amounts at anytime owing to such Lender or the L/C Issuer, as the case may be, under this Agreement or any other Loan Documentagainst any amount due to the Administrative Agent under this clause (ii).(d) Evidence of Payments. As soon as practicable, after any payment of Taxes by any Loan Party to a GovernmentalAuthority as provided in this Section 3.01, such Loan Party shall deliver to the Administrative Agent the original or a certifiedcopy of a receipt issued by such Governmental Authority evidencing such payment, a copy of any return reporting suchpayment or other evidence of such payment reasonably satisfactory to the Administrative Agent.(e) Status of Lenders; Tax Documentation.(i) Any Lender that is entitled to an exemption from or reduction of withholding Tax with respect to paymentsmade under any Loan Document shall deliver to the Borrowers and the Administrative Agent, at the time or timesreasonably requested by the Borrowers or the Administrative Agent, such properly completed and executeddocumentation reasonably requested by the Borrowers or the Administrative Agent as will permit such payments to bemade without withholding or at a reduced rate of withholding. In addition, any Lender, if reasonably requested by theBorrowers or the Administrative Agent, shall deliver such other documentation prescribed by applicable Law orreasonably requested by the Borrowers or the Administrative Agent as will enable the Borrowers or the AdministrativeAgent to determine whether or not such Lender is subject to backup withholding or information reporting requirements.Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission ofsuch documentation (other than such documentation set forth in Section 3.01(e)(ii)(A), 3.01(e)(ii)(B) and 3.01(e)(ii)(D)below) shall not be required if in the Lender’s reasonable judgment such completion, execution or submission wouldsubject such Lender to any material unreimbursed cost or expense or would materially prejudice the legal or commercialposition of such Lender.(ii) Without limiting the generality of the foregoing,(A) any Lender that is a U.S. Person shall deliver to the Borrowers and the Administrative Agent on orprior to the date on which such Lender becomes a Lender under this Agreement (and from time to timethereafter upon the reasonable request of the Borrowers or the Administrative Agent), executed copies of IRSForm W-9 (or successor form) certifying that such Lender is exempt from U.S. federal backup withholding tax;(B) any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Borrowers and theAdministrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the dateon which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter uponthe reasonable request of the Borrowers or the Administrative Agent), whichever of the following is applicable:(1) in the case of a Foreign Lender claiming the benefits of an income tax treaty to which theUnited States is a party (x) with respect to payments of interest under any Loan Document, executedcopies of IRS Form W-8BEN-E (or W-8BEN, as applicable) (or successor form) establishing anexemption from, or reduction of, U.S. federal withholding Tax pursuant to the “interest” article of suchtax treaty and (y) with respect to any other applicable payments under any Loan Document, IRS FormW-8BEN-E (or W-8BEN, as applicable) (or successor form) establishing an exemption from, or reductionof, U.S. federal withholding Tax pursuant to the “business profits” or “other income” article of such taxtreaty;(2) executed copies of IRS Form W-8ECI (or successor form);(3) in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interestunder Section 881(c) of the Internal Revenue Code, (x) a certificate substantially in the form of Exhibit3.01-A to the effect that such Foreign Lender is not a “bank” within the meaning of Section 881(c)(3)(A)of the Internal Revenue Code, a “10 percent shareholder” of either Borrower within the meaning ofSection 881(c)(3)(B) of the Internal Revenue Code, or a “controlled foreign corporation” described inSection 881(c)(3)(C) of the Internal Revenue Code (a “U.S. Tax Compliance Certificate”) and (y)executed copies of IRS Form W-8BEN-E (or W-8BEN, as applicable) (or successor form); or(4) to the extent a Foreign Lender is not the beneficial owner, executed copies of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN-E (or W-8BEN, as applicable) (orsuccessor form), a U.S. Tax Compliance Certificate substantially in the form of Exhibit 3.01-B or Exhibit3.01-C, IRS Form W-9 (or successor form), and/or other certification documents from each beneficialowner, as applicable; provided that if the Foreign Lender is a partnership and one or more direct orindirect partners of such Foreign Lender are claiming the portfolio interest exemption, such ForeignLender may provide a U.S. Tax Compliance Certificate substantially in the form of Exhibit 3.01-D onbehalf of each such direct and indirect partner;(C) any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Borrowers and theAdministrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the dateon which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter uponthe reasonable request of the Borrowers or the Administrative Agent), executed copies (or originals, asrequired) of any other form prescribed by applicable Law as a basis for claiming exemption from or a reductionin U.S. federal withholding Tax, duly completed, together with such supplementary documentation as may beprescribed by applicable Law to permit the Borrowers or the Administrative Agent to determine thewithholding or deduction required to be made; and(D) if a payment made to a Lender under any Loan Document would be subject to U.S. federalwithholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reportingrequirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Internal RevenueCode, as applicable), such Lender shall deliver to the Borrowers and the Administrative Agent at the time ortimes prescribed by Law and at such time or times reasonably requested by the Borrowers or the AdministrativeAgent such documentation prescribed by applicable Law (including as prescribed by Section 1471(b)(3)(C)(i)of the Internal Revenue Code) and such additional documentation reasonably requested by the Borrowers orthe Administrative Agent as may be necessary for the Borrowers and the Administrative Agent to comply withtheir obligations under FATCA and to determine that such Lender has complied with such Lender’s obligationsunder FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes ofthis clause (D), “FATCA” shall include any amendments made to FATCA after the Closing Date.(iii) Each Lender agrees that if any form or certification it previously delivered pursuant to this Section 3.01expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify theBorrowers and the Administrative Agent in writing of its legal inability to do so.(f) Treatment of Certain Refunds. Unless required by applicable Laws, at no time shall the Administrative Agent haveany obligation to file for or otherwise pursue on behalf of a Lender or the L/C Issuer, or have any obligation to pay to anyLender or the L/C Issuer, any refund of Taxes withheld or deducted from funds paid for the account of such Lender or the L/CIssuer, as the case may be. If any Recipient determines, in its sole discretion exercised in good faith, that it has received a refundof any Taxes as to which it has been indemnified by any Loan Party or with respect to which any Loan Party has paid additionalamounts pursuant to this Section 3.01, it shall pay to the Loan Party an amount equal to such refund (but only to the extent ofindemnity payments made, or additional amounts paid, by a Loan Party under this Section 3.01 with respect to the Taxes givingrise to such refund), net of all out-of-pocket expenses (including Taxes) incurred by such Recipient, and without interest (otherthan any interest paid by the relevant Governmental Authority with respect to such refund), provided that the Loan Party, uponthe request of the Recipient, agrees to repay the amount paid over to the Loan Party (plus any penalties, interest or other chargesimposed by the relevant Governmental Authority) to the Recipient in the event the Recipient is required to repay such refund tosuch Governmental Authority. Notwithstanding anything to the contrary in this subsection, in no event will the applicableRecipient be required to pay any amount to the Loan Party pursuant to this subsection the payment of which would place theRecipient in a less favorable net after-Tax position than such Recipient would have been in if the Tax subject to indemnificationand giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments oradditional amounts with respect to such Tax had never been paid. This subsection shall not be construed to require anyRecipient to make available its tax returns (or any other information relating to its taxes that it deems confidential) to any LoanParty or any other Person.(g) Survival. Each party’s obligations under this Section 3.01 shall survive the resignation or replacement of theAdministrative Agent or any assignment of rights by, or the replacement of, a Lender or the L/C Issuer, the termination of theAggregate Revolving Commitments and the repayment, satisfaction or discharge of all other Obligations.3.02 Illegality.If any Lender determines that any Law has made it unlawful, or that any Governmental Authority has asserted that it isunlawful, for any Lender or its Lending Office to perform any of its obligations hereunder or to make, maintain or fund or chargeinterest with respect to any Credit Extension or to determine or charge interest rates based upon the Eurocurrency Rate or the LIBORDaily Floating Rate, or any Governmental Authority has imposed material restrictions on the authority of such Lender to purchase orsell, or to take deposits of, Dollars or any Alternative Currency in the applicable interbank market, then, on notice thereof by suchLender to the Borrowers through the Administrative Agent, (i) any obligation of such Lender to issue, make, maintain, fund or chargeinterest with respect to any such Credit Extension or continue Eurocurrency Rate Loans in the affected currency or currencies or, in thecase of Eurocurrency Rate Loans in Dollars or LIBOR Daily Floating Rate Loans, to convert Base Rate Loans to Eurocurrency RateLoans or LIBOR Daily Floating Rate Loans, shall be suspended and (ii) if such notice asserts the illegality of such Lender making ormaintaining Base Rate Loans the interest rate on which is determined by reference to the LIBOR Daily Floating Rate component of theBase Rate, the interest rate on which Base Rate Loans of such Lender, shall, if necessary to avoid such illegality, be determined by theAdministrative Agent without reference to the LIBOR Daily Floating Rate component of the Base Rate, in each case until such Lendernotifies the Administrative Agent and the Borrowers that the circumstances giving rise to such determination no longer exist. Uponreceipt of such notice, (x) the Borrowers shall, upon demand from such Lender (with a copy to the Administrative Agent), prepay or, ifapplicable and such Loans are denominated in Dollars, convert all Eurocurrency Rate Loans or LIBOR Daily Floating Rate Loans ofsuch Lender to Base Rate Loans (the interest rate on which Base Rate Loans of such Lender shall, if necessary to avoid such illegality,be determined by the Administrative Agent without reference to the LIBOR Daily Floating Rate component of the Base Rate),immediately with respect to such LIBOR Daily Floating Rate Loan and either on the last day of the Interest Period therefor, if suchLender may lawfully continue to maintain such Eurocurrency Rate Loans to such day, or immediately, if such Lender may not lawfullycontinue to maintain such Eurocurrency Rate Loans and (y) if such notice asserts the illegality of such Lender determining or charginginterest rates based upon the Eurocurrency Rate or the LIBOR Daily Floating Rate, the Administrative Agent shall during the period ofsuch suspension compute the Base Rate applicable to such Lender without reference to the LIBOR Daily Floating Rate componentthereof until the Administrative Agent is advised in writing by such Lender that it is no longer illegal for such Lender to determine orcharge interest rates based upon the Eurocurrency Rate or the LIBOR Daily Floating Rate. Upon any such prepayment or conversion,the Borrowers shall also pay accrued interest on the amount so prepaid or converted.3.03 Inability to Determine Rates.(a) If in connection with any request for a Eurocurrency Rate Loan or a conversion to or continuation thereof, (i) theAdministrative Agent determines that (A) deposits (whether in Dollars or an Alternative Currency) are not being offered tobanks in the applicable offshore interbank market for such currency for the applicable amount and Interest Period of suchEurocurrency Rate Loan, (B) adequate and reasonable means do not exist for determining the Eurocurrency Rate for anyrequested Interest Period with respect to a proposed Eurocurrency Rate Loan (whether denominated in Dollars or an AlternativeCurrency) or in connection with an existing or proposed LIBOR Daily Floating Rate Loan or Base Rate Loan or (C) afundamental change has occurred in the foreign exchange or interbank markets with respect to such Alternative Currency(including, without limitation, changes in national or international financial, political or economic conditions or currencyexchange rates or exchange controls) (in each case with respect to clause (i), “Impacted Loans”), or (ii) the AdministrativeAgent or the Required Lenders determine that for any reason the Eurocurrency Rate for any requested Interest Period or LIBORDaily Floating Rate with respect to a proposed Eurocurrency Rate Loan or LIBOR Daily Floating Rate does not adequately andfairly reflect the cost to such Lenders of funding such Loan, the Administrative Agent will promptly so notify the Borrowers andeach Lender. Thereafter, (x) the obligation of the Lenders to make or maintain Eurocurrency Rate Loans in the affectedcurrency or currencies or LIBOR Daily Floating Rate shall be suspended (to the extent of the affected LIBOR Daily FloatingRate Loans, Eurocurrency Rate Loans or Interest Periods) and (y) in the event of a determination described in the precedingsentence with respect to the LIBOR Daily Floating Rate component of the Base Rate, the utilization of the LIBOR Daily FloatingRate component in determining the Base Rate shall be suspended, in each case until the Administrative Agent (upon theinstruction of the Required Lenders) revokes such notice. Upon receipt of such notice, the Borrowers may revoke any pendingrequest for a Borrowing of, conversion to or continuation of LIBOR Daily Floating Rate Loans and Eurocurrency Rate Loans inthe affected currency or currencies (to the extent of the affected LIBOR Daily Floating Rate Loans, Eurocurrency Rate Loans orInterest Periods) or, failing that, will be deemed to have converted such request into a request for a Borrowing of Base RateLoans in the amount specified therein.(b) Notwithstanding the foregoing, if the Administrative Agent has made the determination described in clause (a)(i) ofthis Section, the Administrative Agent in consultation with the Borrowers and the Required Lenders, may establish an alternativeinterest rate for the Impacted Loans, in which case, such alternative rate of interest shall apply with respect to the ImpactedLoans until (1) the Administrative Agent revokes the notice delivered with respect to the Impacted Loans under clause (a)(i) ofthis Section, (2) the Administrative Agent or the Required Lenders notify the Administrative Agent and the Borrowers that suchalternative interest rate does not adequately and fairly reflect the cost to the Lenders of funding the Impacted Loans, or (3) anyLender determines that any Law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, forsuch Lender or its applicable Lending Office to make, maintain or fund Loans whose interest is determined by reference to suchalternative rate of interest or to determine or charge interest rates based upon such rate or any Governmental Authority hasimposed material restrictions on the authority of such Lender to do any of the foregoing and provides the Administrative Agentand the Borrowers written notice thereof.3.04 Increased Costs; Reserves on Eurocurrency Rate Loans.(a) Increased Costs Generally. If any Change in Law shall:(i) impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge orsimilar requirement against assets of, deposits with or for the account of, or credit extended or participated in by, anyLender (except any reserve requirement contemplated by Section 3.04(e)) or the L/C Issuer;(ii) subject any Recipient to any Taxes (other than (A) Indemnified Taxes, (B) Taxes described in clauses (b)through (d) of the definition of Excluded Taxes and (C) Connection Income Taxes) on its loans, loan principal, letters ofcredit, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto; or(iii) impose on any Lender or the L/C Issuer or the London interbank market any other condition, cost orexpense (other than Taxes) affecting this Agreement, LIBOR Daily Floating Rate Loans or Eurocurrency Rate Loansmade by such Lender or any Letter of Credit or participation therein;and the result of any of the foregoing shall be to increase the cost to such Lender of making, converting to, continuing or maintainingany Loan (or of maintaining its obligation to make any such Loan), or to increase the cost to such Lender or the L/C Issuer ofparticipating in, issuing or maintaining any Letter of Credit (or of maintaining its obligation to participate in or to issue any Letter ofCredit), or to reduce the amount of any sum received or receivable by such Lender or the L/C Issuer hereunder (whether of principal,interest or any other amount) then, upon request of such Lender or the L/C Issuer, the Borrowers will pay to such Lender or the L/CIssuer, as the case may be, such additional amount or amounts as will compensate such Lender or the L/C Issuer, as the case may be,for such additional costs incurred or reduction suffered.(b) Capital Requirements. If any Lender or the L/C Issuer determines that any Change in Law affecting such Lender orthe L/C Issuer or any Lending Office of such Lender or such Lender’s or the L/C Issuer’s holding company, if any, regardingcapital or liquidity requirements has or would have the effect of reducing the rate of return on such Lender’s or the L/C Issuer’scapital or on the capital of such Lender’s or the L/C Issuer’s holding company, if any, as a consequence of this Agreement, theRevolving Commitments of such Lender or the Loans made by, or participations in Letters of Credit or Swingline Loans heldby, such Lender, or the Letters of Credit issued by the L/C Issuer, to a level below that which such Lender or the L/C Issuer orsuch Lender’s or the L/C Issuer’s holding company could have achieved but for such Change in Law (taking into considerationsuch Lender’s or the L/C Issuer’s policies and the policies of such Lender’s or the L/C Issuer’s holding company with respect tocapital adequacy), then from time to time the Borrowers will pay to such Lender or the L/C Issuer, as the case may be, suchadditional amount or amounts as will compensate such Lender or the L/C Issuer or such Lender’s or the L/C Issuer’s holdingcompany for any such reduction suffered.(c) Certificates for Reimbursement. A certificate of a Lender or the L/C Issuer setting forth the amount or amountsnecessary to compensate such Lender or the L/C Issuer or its holding company, as the case may be, as specified in subsection(a) or (b) of this Section and delivered to the Borrowers shall be conclusive absent manifest error. The Borrowers shall pay suchLender or the L/C Issuer, as the case may be, the amount shown as due on any such certificate within ten (10) days after receiptthereof.(d) Mandatory Costs. If any Lender or the L/C Issuer incurs any Mandatory Costs attributable to the Obligations, thenfrom time to time the Borrowers will pay to such Lender or the L/C Issuer, as the case may be, such Mandatory Costs; provided,that, a Lender or the L/C Issuer shall not be entitled to any compensation pursuant to this Section 3.04(d) to the extent suchLender or the L/C Issuer is not generally imposing such charges or requesting such compensation from other similarly situatedborrowers under similar circumstances. Such amount shall be expressed as a percentage rate per annum and shall be payable onthe full amount of the applicable Obligations.(e) Additional Reserve Requirements. The Borrowers shall pay to each Lender, (i) as long as such Lender shall berequired to maintain reserves with respect to liabilities or assets consisting of or including Eurocurrency funds or deposits(currently known as “Eurocurrency liabilities”), additional interest on the unpaid principal amount of each LIBOR DailyFloating Rate Loan or Eurocurrency Rate Loan equal to the actual costs of such reserves allocated to such Loan by such Lender(as determined by such Lender in good faith, which determination shall be conclusive), and (ii) as long as such Lender shall berequired to comply with any reserve ratio requirement or analogous requirement of any central banking or financial regulatoryauthority imposed in respect of the maintenance of the Revolving Commitments or the funding of the Eurocurrency Rate Loansor LIBOR Daily Floating Rate Loans, such additional costs (expressed as a percentage per annum and rounded upwards, ifnecessary, to the nearest five decimal places) equal to the actual costs allocated to such Revolving Commitment or Loan bysuch Lender (as determined by such Lender in good faith, which determination shall be conclusive), which shall be due andpayable on each date on which interest is payable on such Loan, provided the Borrowers shall have received at least ten (10)days’ prior notice (with a copy to the Administrative Agent) of such additional interest or costs from such Lender. If a Lenderfails to give notice ten (10) days prior to the relevant Interest Payment Date, such additional interest shall be due and payableten (10) days from receipt of such notice.(f) Delay in Requests. Failure or delay on the part of any Lender or the L/C Issuer to demand compensation pursuant tothe foregoing provisions of this Section shall not constitute a waiver of such Lender’s or the L/C Issuer’s right to demand suchcompensation, provided that the Borrowers shall not be required to compensate a Lender or the L/C Issuer pursuant to theforegoing provisions of this Section for any increased costs incurred or reductions suffered more than six (6) months prior to thedate that such Lender or the L/C Issuer, as the case may be, notifies the Borrowers of the Change in Law giving rise to suchincreased costs or reductions and of such Lender’s or the L/C Issuer’s intention to claim compensation therefor (except that, ifthe Change in Law giving rise to such increased costs or reductions is retroactive, then the nine-month period referred to aboveshall be extended to include the period of retroactive effect thereof).3.05 Compensation for Losses.Upon demand of any Lender (with a copy to the Administrative Agent) from time to time, the Borrowers shall promptlycompensate such Lender for and hold such Lender harmless from any loss, cost or expense incurred by it as a result of:(a) any continuation, conversion, payment or prepayment of any Eurocurrency Rate Loan on a day other than the lastday of the Interest Period for such Loan (whether voluntary, mandatory, automatic, by reason of acceleration, or otherwise);(b) any failure by the Borrowers (for a reason other than the failure of such Lender to make a Loan) to prepay, borrow,continue or convert any Eurocurrency Rate Loan on the date or in the amount notified by the Borrowers;(c) any failure by the Borrowers to make payment of any Loan or drawing under any Letter of Credit (or interest duethereon) denominated in an Alternative Currency on its scheduled due date or any payment thereof in a different currency; or(d) any assignment of a Eurocurrency Rate Loan on a day other than the last day of the Interest Period therefor as aresult of a request by the Borrowers pursuant to Section 11.13;including any loss of anticipated profits, any foreign exchange losses and any loss or expense arising from the liquidation orreemployment of funds obtained by it to maintain such Loan or from fees payable to terminate the deposits from which such funds wereobtained or from the performance of any foreign exchange contract. The Borrowers shall also pay any customary administrative feescharged by such Lender in connection with the foregoing.For purposes of calculating amounts payable by the Borrowers to the Lenders under this Section 3.05, each Lender shall bedeemed to have funded each Eurocurrency Rate Loan made by it at the Eurocurrency Rate used in determining the Eurocurrency Ratefor such Loan by a matching deposit or other borrowing in the offshore interbank market for such currency for a comparable amountand for a comparable period, whether or not such Eurocurrency Rate Loan was in fact so funded.3.06 Mitigation Obligations; Replacement of Lenders.(a) Designation of a Different Lending Office. If any Lender requests compensation under Section 3.04, or requires theBorrowers to pay any Indemnified Taxes or additional amounts to any Lender, the L/C Issuer, or any Governmental Authorityfor the account of any Lender or the L/C Issuer pursuant to Section 3.01, or if any Lender gives a notice pursuant to Section3.02, then at the request of the Borrowers such Lender or the L/C Issuer, as applicable, shall use reasonable efforts to designatea different Lending Office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder toanother of its offices, branches or affiliates, if, in the judgment of such Lender or the L/C Issuer, as applicable, such designationor assignment (i) would eliminate or reduce amounts payable pursuant to Section 3.01 or 3.04, as the case may be, in the future,or eliminate the need for the notice pursuant to Section 3.02, as applicable, and (ii) in each case, would not subject such Lenderor the L/C Issuer, as the case may be, to any unreimbursed cost or expense and would not otherwise be disadvantageous to suchLender or the L/C Issuer, as the case may be. The Borrowers hereby agree to pay all reasonable costs and expenses incurred byany Lender or the L/C Issuer in connection with any such designation or assignment.(b) Replacement of Lenders. If any Lender requests compensation under Section 3.04, or if the Borrowers are requiredto pay any Indemnified Taxes or additional amounts to any Lender or any Governmental Authority for the account of anyLender pursuant to Section 3.01 and, in each case, such Lender has declined or is unable to designate a different lending officein accordance with Section 3.06(a), the Borrowers may replace such Lender in accordance with Section 11.13.3.07 Successor LIBOR.Notwithstanding anything to the contrary in this Agreement or any other Loan Documents (including Section 11.01 hereof), ifthe Administrative Agent determines (which determination shall be conclusive absent manifest error), or the Borrowers or RequiredLenders notify the Administrative Agent (with, in the case of the Required Lenders, a copy to the Borrowers) that the Borrowers orRequired Lenders (as applicable) have determined, that:(a) adequate and reasonable means do not exist for ascertaining LIBOR for any requested Interest Period because theLIBOR Screen Rate is not available or published on a current basis and such circumstances are unlikely to be temporary; or(b) the administrator of the LIBOR Screen Rate or a Governmental Authority having jurisdiction over theAdministrative Agent has made a public statement identifying a specific date after which LIBOR or the LIBOR Screen Rate shallno longer be made available, or used for determining the interest rate of loans (such specific date, the “Scheduled UnavailabilityDate”), or(c) syndicated loans currently being executed, or that include language similar to that contained in this Section, arebeing executed or amended (as applicable) to incorporate or adopt a new benchmark interest rate to replace LIBOR,then, reasonably promptly after such determination by the Administrative Agent or receipt by the Administrative Agent of suchnotice, as applicable, the Administrative Agent and the Borrowers may amend this Agreement to replace LIBOR with an alternatebenchmark rate (including any mathematical or other adjustments to the benchmark (if any) incorporated therein), giving dueconsideration to any evolving or then existing convention for similar Dollar denominated syndicated credit facilities for such alternativebenchmarks (any such proposed rate, a “LIBOR Successor Rate”), together with any proposed LIBOR Successor Rate ConformingChanges and any such amendment shall become effective at 5:00 p.m. on the fifth Business Day after the Administrative Agent shallhave posted such proposed amendment to all Lenders and the Borrowers unless, prior to such time, Lenders comprising the RequiredLenders have delivered to the Administrative Agent written notice that such Required Lenders do not accept such amendment.If no LIBOR Successor Rate has been determined and the circumstances under clause (a) above exist or the ScheduledUnavailability Date has occurred (as applicable), the Administrative Agent will promptly so notify the Borrowers and each Lender.Thereafter, (x) the obligation of the Lenders to make or maintain LIBOR Daily Floating Rate Loans or Eurocurrency Rate Loans shallbe suspended, (to the extent of the affected LIBOR Daily Floating Rate Loans, Eurocurrency Rate Loans or Interest Periods), and (y) theLIBOR Daily Floating Rate component shall no longer be utilized in determining the Base Rate. Upon receipt of such notice, theBorrowers may revoke any pending request for a Borrowing of, conversion to or continuation of LIBOR Daily Floating Rate Loans orEurocurrency Rate Loans (to the extent of the affected LIBOR Daily Floating Rate Loans, Eurocurrency Rate Loans or Interest Periods)or, failing that, will be deemed to have converted such request into a request for a Borrowing of Base Rate Loans (subject to theforegoing clause (y)) in the amount specified therein.Notwithstanding anything else herein, any definition of LIBOR Successor Rate shall provide that in no event shall such LIBORSuccessor Rate be less than zero for purposes of this Agreement.3.08 Survival.All of the Loan Parties’ obligations under this Article III shall survive termination of the Aggregate Revolving Commitments,repayment of all other Obligations hereunder, resignation of the Administrative Agent and the Facility Termination Date.ARTICLE IV CONDITIONS PRECEDENT TO CREDIT EXTENSIONS4.01 Conditions of Initial Credit Extension.This Agreement shall become effective upon, and the obligation of the L/C Issuer and each Lender to make its initial CreditExtension hereunder is subject to, the satisfaction of the following conditions precedent:(a) Receipt by the Administrative Agent of the following, each in form and substance reasonably satisfactory to theAdministrative Agent and each Lender:(i) Loan Documents. Executed counterparts of this Agreement and the other Loan Documents, each properlyexecuted by a Responsible Officer of the signing Loan Party and, in the case of this Agreement, by each Lender.(ii) Opinions of Counsel. Favorable opinions of legal counsel to the Loan Parties (including appropriate localcounsel), addressed to the Administrative Agent and each Lender, dated as of the Closing Date.(iii) Organization Documents, Resolutions, Etc.(A) copies of the Organization Documents of each Loan Party certified to be true and complete as of arecent date by the appropriate Governmental Authority of the state or other jurisdiction of its incorporation ororganization, where applicable, and certified by a secretary or assistant secretary of such Loan Party to be trueand correct as of the Closing Date;(B) such certificates of resolutions or other action, incumbency certificates and/or other certificates ofResponsible Officers of each Loan Party as the Administrative Agent may require evidencing the identity,authority and capacity of each Responsible Officer thereof authorized to act as a Responsible Officer inconnection with this Agreement and the other Loan Documents to which such Loan Party is a party; and(C) such documents and certifications as the Administrative Agent may reasonably require to evidencethat each Loan Party is duly organized or formed, and is validly existing, in good standing and qualified toengage in business in its state of organization or formation.(iv) Personal Property Collateral.(A) searches of Uniform Commercial Code filings in the jurisdiction of incorporation or formation, asapplicable, of each Loan Party, copies of the financing statements on file in such jurisdictions and evidence thatno Liens exist other than Permitted Liens and (B) tax lien and judgment searches;(B) searches of ownership of intellectual property in the records of the appropriate federalGovernmental Authorities, and such patent/trademark/copyright filings as requested by the AdministrativeAgent in order to perfect the Administrative Agent’s security interest in the intellectual property;(C) Uniform Commercial Code financing statements for each appropriate jurisdiction as is necessary, inthe Administrative Agent’s discretion, to perfect the Administrative Agent’s security interest in the Collateral;(D) (1) all certificates evidencing any certificated Equity Interests pledged to the Administrative Agentpursuant to the Security Agreement, together with duly executed in blank, undated stock powers attachedthereto (unless, with respect to the pledged Equity Interests of any Foreign Subsidiary, such stock powers aredeemed unnecessary by the Administrative Agent in its reasonable discretion under the Law of the jurisdictionof organization of such Person) and (2) all other possessory Collateral (together with allonges or assignments,as applicable) required to be delivered to the Administrative Agent as of the Closing Date;(E) duly executed notices of grant of security interest in the form required by the Security Agreement asare necessary, in the Administrative Agent’s sole discretion, to perfect the Administrative Agent’s securityinterest in the United States registered intellectual property of the Loan Parties; and(F) in the case of any personal property Collateral located at a headquarters location leased by each ofthe Borrowers, such estoppel letters, consents and waivers from the landlords on such real property as may bereasonably required by the Administrative Agent;(v) Evidence of Insurance. Copies of insurance policy declaration pages or certificates of insurance of the LoanParties evidencing liability and casualty insurance meeting the requirements set forth in the Loan Documents, includingnaming the Administrative Agent and its successors and assigns as additional insured (in the case of liability insurance)or lender’s loss payee (in the case of property insurance) on behalf of the Lenders.(vi) Closing Certificate. A certificate signed by a Responsible Officer of each Borrower certifying that theconditions specified in Sections 4.01(c), 4.01(d), 4.01(f), 4.02(a) and 4.02(b) have been satisfied.(vii) Solvency Certificate. A certificate signed by a Responsible Officer of each Borrower confirming that (i)each Borrower and (ii) the Loan Parties on a consolidated basis, are, in each case, Solvent before and after giving effectto the consummation of the transactions contemplated herein to occur on the Closing Date.(viii) Financial Statements and Projections. Copies of interim financial statements of PRGX and its Subsidiariesfor the fiscal quarter ended September 30, 2018 and annual projections for PRGX and Subsidiaries for the fiscal years2019 through 2023 (on a quarterly basis for 2019 and on an annual basis for each fiscal year thereafter), each in formand substance reasonably satisfactory to the Administrative Agent.(b) KYC Information.(i) (i) Upon the reasonable request of any Lender made at least ten (10) days prior to the Closing Date, eachBorrower shall have provided to such Lender the documentation and other information so requested in connection withapplicable environmental regulations, U.S. Department of Treasury Office of Foreign Assets Control, Foreign CorruptPractices Act, “know your customer” and anti-money-laundering rules and regulations, including the PATRIOT Act, ineach case at least five (5) days prior to the Closing Date.(ii) At least five (5) days prior to the Closing Date, if either Borrower qualifies as a “legal entity customer”under the Beneficial Ownership Regulation, it shall deliver a Beneficial Ownership Certification in relation to suchBorrower.(c) Material Adverse Effect. There shall not have occurred since December 31, 2017 any event or condition that hashad or could be reasonably expected, either individually or in the aggregate, to have a Material Adverse Effect.(d) No Litigation. The absence of any action, suit, investigation or proceeding pending or, to the knowledge of theLoan Parties, threatened in any court or before any arbitrator or governmental authority that could reasonably be expected tohave a Material Adverse Effect.(e) Existing Indebtedness. All of the existing Indebtedness for borrowed money of the Loan Parties and theirSubsidiaries (other than Indebtedness permitted to exist pursuant to Section 7.03) shall be repaid in full and all security interestsrelated thereto shall be terminated on or prior to the Closing Date.(f) Consents. The Lenders shall have received evidence that all members, boards of directors, governmental,shareholder and material third party consents and approvals necessary in connection with the entering into of this Agreementhave been obtained.(g) Taxes and Recording Fees. Receipt by the Administrative Agent of such evidence as the Administrative Agent mayreasonably request in order to establish that all applicable documentary taxes and recording fees have been paid or are beingpaid simultaneously herewith.(h) Fees. Receipt by the Administrative Agent, the Arranger and the Lenders of any fees required to be paid on orbefore the Closing Date.(i) Attorney Costs. The Borrowers shall have paid all reasonable fees, charges and disbursements of counsel to theAdministrative Agent (directly to such counsel if requested by the Administrative Agent) to the extent invoiced prior to or onthe Closing Date, plus such additional amounts of such reasonable fees, charges and disbursements as shall constitute itsreasonable estimate of such fees, charges and disbursements incurred or to be incurred by it through the closing proceedings(provided that such estimate shall not thereafter preclude a final settling of accounts between the Borrowers and theAdministrative Agent).Without limiting the generality of the provisions of the last paragraph of Section 9.03, for purposes of determining compliancewith the conditions specified in this Section 4.01, each Lender that has signed this Agreement shall be deemed to have consented to,approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by oracceptable or satisfactory to a Lender unless the Administrative Agent shall have received notice from such Lender prior to theproposed Closing Date specifying its objection thereto.4.02 Conditions to all Credit Extensions.The obligation of each Lender and the L/C Issuer to honor any Request for Credit Extension (other than a Loan Noticerequesting only a conversion of Loans to the other Type, or a continuation of Eurocurrency Rate Loans) is subject to the followingconditions precedent:(a) The representations and warranties of each Loan Party contained in this Agreement or any other Loan Document, orwhich are contained in any document furnished at any time under or in connection herewith or therewith, shall be true andcorrect in all material respects (or if such representation and warranty is qualified by materiality or Material Adverse Effect, itshall be true and correct) on and as of the date of such Credit Extension, except to the extent that such representations andwarranties specifically refer to an earlier date, in which case they shall be true and correct in all material respects (or if suchrepresentation and warranty is qualified by materiality or Material Adverse Effect, it shall be true and correct) as of such earlierdate.(b) No Default or Event of Default shall exist, or would result from such proposed Credit Extension or from theapplication of the proceeds thereof.(c) The Administrative Agent and, if applicable, the L/C Issuer or the Swingline Lender shall have received a Requestfor Credit Extension in accordance with the requirements hereof.(d) In the case of a Credit Extension to be denominated in an Alternative Currency, such currency remains an EligibleCurrency.Each Request for Credit Extension (other than a Loan Notice requesting only a conversion of Loans from one Type to anotherType, or a continuation of Eurocurrency Rate Loans) submitted by either Borrower shall be deemed to be a representation and warrantythat the conditions specified in Sections 4.02(a) and (b) have been satisfied on and as of the date of the applicable Credit Extension.ARTICLE V REPRESENTATIONS AND WARRANTIESThe Loan Parties represent and warrant to the Administrative Agent and the Lenders that:5.01 Existence, Qualification and Power.Each Loan Party and each Subsidiary (a) is duly organized or formed, validly existing and, as applicable, in good standingunder the Laws of the jurisdiction of its incorporation or organization, (b) has all requisite power and authority and all requisitegovernmental licenses, authorizations, consents and approvals to (i) own or lease its assets and carry on its business and (ii) execute,deliver and perform its obligations under the Loan Documents to which it is a party, and (c) is duly qualified and is licensed and, asapplicable, in good standing under the Laws of each jurisdiction where its ownership, lease or operation of properties or the conduct ofits business requires such qualification or license; except (x) in each case referred to in clause (b)(i) or (c), to the extent that failure to doso could not reasonably be expected to have a Material Adverse Effect and (y) in the case of clause (a), with respect to any Subsidiarythat is not a Loan Party, to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect.5.02 Authorization; No Contravention.The execution, delivery and performance by each Loan Party of each Loan Document to which such Person is party have beenduly authorized by all necessary corporate or other organizational action, and do not (a) contravene the terms of any of such Person’sOrganization Documents; (b) conflict with or result in any breach or contravention of, or the creation of any Lien under, or require anypayment to be made under (i) any material Contractual Obligation to which such Person is a party or affecting such Person or theproperties of such Person or any of its Subsidiaries or (ii) any order, injunction, writ or decree of any Governmental Authority or anyarbitral award to which such Person or its property is subject; or (c) violate any material Law.5.03 Governmental Authorization; Other Consents.No approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any Governmental Authority orany other Person is necessary or required in connection with the execution, delivery or performance by any Loan Party of thisAgreement or any other Loan Document other than (a) those that have already been obtained and are in full force and effect, (b) filingsto perfect the Liens created by the Collateral Documents and (c) required filings under the Securities Exchange Act of 1934.5.04 Binding Effect.Each Loan Document has been duly executed and delivered by each Loan Party that is party thereto. Each Loan Documentconstitutes a legal, valid and binding obligation of each Loan Party that is party thereto, enforceable against each such Loan Party inaccordance with its terms.5.05 Financial Statements; No Material Adverse Effect.(a) The financial statements delivered pursuant to Sections 6.01(a) and 6.01(b) (i) were prepared in accordance withGAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein; (ii) fairlypresent the financial condition of PRGX and its Subsidiaries as of the date thereof and their results of operations for the periodcovered thereby in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwiseexpressly noted therein (subject, in the case of unaudited financial statements, to the absence of footnotes and to normal year-end audit adjustments); and (iii) to the extent required under GAAP to be reflected therein, show all material indebtedness andother liabilities, direct or contingent, of PRGX and its Subsidiaries as of the date thereof, including liabilities for taxes, materialcommitments and Indebtedness.(b) The 2017 Audited Financial Statements and the unaudited consolidated financial statements of PRGX and itsSubsidiaries for the fiscal quarter ending September 30, 2018 (i) were prepared in accordance with GAAP consistently appliedthroughout the period covered thereby, except as otherwise expressly noted therein; (ii) fairly present the financial condition ofPRGX and its Subsidiaries as of the date thereof and their results of operations for the period covered thereby (subject, in thecase of unaudited financial statements, to the absence of footnotes and to normal year-end audit adjustments); and (iii) to theextent required under GAAP to be reflected therein, show all material indebtedness and other liabilities, direct or contingent, ofPRGX and its Subsidiaries as of the date thereof, including liabilities for taxes, material commitments and Indebtedness.(c) From the date of the 2017 Audited Financial Statements to and including the Closing Date, there has been noDisposition, or Recovery Event, of any material part of the business or property of the Loan Parties and their Subsidiaries, takenas a whole, and no purchase or other acquisition by any of them of any business or property (including any Equity Interests ofany other Person) material in relation to the consolidated financial condition of the Loan Parties and their Subsidiaries, taken asa whole, in each case, which is not reflected in the foregoing financial statements or in the notes thereto and has not otherwisebeen disclosed in writing to the Lenders on or prior to the Closing Date.(d) Since the date of the 2017 Audited Financial Statements, there has been no event or circumstance, eitherindividually or in the aggregate, that has had or could reasonably be expected to have a Material Adverse Effect.5.06 Litigation.There are no actions, suits, proceedings, claims or disputes pending or, to the knowledge of the Loan Parties after due anddiligent investigation, threatened or contemplated, at law, in equity, in arbitration or before any Governmental Authority, by or againstany Loan Party or any Subsidiary or against any of their properties or revenues that (a) purport to affect or pertain to this Agreement orany other Loan Document or any of the transactions contemplated hereby or (b) either individually or in the aggregate could reasonablybe expected to have a Material Adverse Effect.5.07 No Default.(a) No Loan Party nor any Subsidiary is in default under or with respect to any Contractual Obligation that individuallyor in the aggregate could reasonably be expected to have a Material Adverse Effect.(b) No Default or Event of Default has occurred and is continuing.5.08 Ownership of Property.Each Loan Party and each of its Subsidiaries has good record and marketable title in fee simple to, or valid leasehold interestsin, all real property necessary or used in the ordinary conduct of its business, in each case except to the extent the same could not,individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.5.09 Environmental Compliance.(a) The Loan Parties and their Subsidiaries conduct in the ordinary course of business a review of the effect of existingEnvironmental Laws and claims alleging potential liability or responsibility for violation of any Environmental Law on theirrespective businesses, operations and properties, and as a result thereof the Loan Parties have reasonably concluded that suchEnvironmental Laws and claims could not, individually or in the aggregate, reasonably be expected to have a Material AdverseEffect.(b) None of the properties currently owned or operated by any Loan Party or any Subsidiary is listed or proposed forlisting on the National Priorities List under CERCLA or on the CERCLIS or any analogous foreign, state or local list. To theknowledge of the Loan Parties, none of the properties formerly owned or operated by any Loan Party or any Subsidiary is listedor proposed for listing on the National Priorities List under CERCLA or on the CERCLIS or any analogous foreign, state or locallist. To the knowledge of the Loan Parties, there are no and never have been any underground or above-ground storage tanks orany surface impoundments, septic tanks, pits, sumps or lagoons in which Hazardous Materials are being or have been treated,stored or disposed on any property currently or formerly owned or operated by any Loan Party or any Subsidiary. To theknowledge of the Loan Parties, there is no asbestos or asbestos-containing material on any property currently owned or operatedby any Loan Party or any Subsidiary, except where the presence of such asbestos or asbestos-containing material could notreasonably be expected to result in any material liability to any Loan Party. Neither the Loan Parties nor, to the knowledge ofthe Loan Parties, any other Person, has released, discharged or disposed of any Hazardous Materials on any property currentlyowned or operated by any Loan Party or any Subsidiary.(c) No Loan Party nor any Subsidiary is undertaking as of the Closing Date, and has not completed, either individuallyor together with other potentially responsible parties, any investigation or assessment or remedial or response action relating toany actual or threatened release, discharge or disposal of Hazardous Materials at any site, location or operation, eithervoluntarily or pursuant to the order of any Governmental Authority or the requirements of any Environmental Law; and allHazardous Materials generated, used, treated, handled or stored by any Loan Party or any Subsidiary and, to the knowledge ofthe Loan Parties, any other Person at, or transported by any Loan Party or any Subsidiary and, to the knowledge of the LoanParties, any other Person to or from, any property currently owned or operated by any Loan Party or any Subsidiary have beendisposed of in a manner not reasonably expected to result in material liability to any Loan Party or any Subsidiary.5.10 Insurance.The properties of the Loan Parties and their Subsidiaries are insured with financially sound and reputable insurance companiesnot Affiliates of either Borrower, in such amounts, with such deductibles and covering such risks as are customarily carried bycompanies engaged in similar businesses and owning similar properties in localities where the applicable Loan Party or the applicableSubsidiary operates. The property and general liability insurance coverage of the Loan Parties as in effect on the Closing Date isoutlined as to carrier, policy number, expiration date, type, amount and deductibles on Schedule 5.10.5.11 Taxes.Each Loan Party and its Subsidiaries have filed all federal income and other material Tax returns and reports required to be filed,and have paid all federal income and other material Taxes that were due and payable, except those which are being contested in goodfaith by appropriate proceedings diligently conducted and for which adequate reserves have been provided in accordance with GAAP.There is no proposed tax assessment against any Loan Party or any Subsidiary that would, if made, have a Material Adverse Effect. NoLoan Party nor any Subsidiary is party to any tax sharing agreement with a Person not a Loan Party or Subsidiary.5.12 ERISA Compliance.(a) Each Pension Plan has been administered in compliance in all material respects with the applicable provisions ofERISA, the Internal Revenue Code and other federal or state Laws. Each Pension Plan that is intended to be a qualified planunder Section 401(a) of the Internal Revenue Code has received a favorable determination letter or is subject to a favorableopinion letter from the IRS to the effect that the form of such Pension Plan is qualified under Section 401(a) of the InternalRevenue Code and the trust related thereto has been determined by the IRS to be exempt from federal income tax under Section501(a) of the Internal Revenue Code. To the best knowledge of the Loan Parties, nothing has occurred that would reasonably beexpected to cause the loss of such Pension Plan’s tax-qualified status.(b) There are no pending or, to the best knowledge of the Loan Parties, threatened claims, actions or lawsuits, or actionby any Governmental Authority, with respect to any Pension Plan that could reasonably be expected to have a Material AdverseEffect. Neither Borrower nor, to the best knowledge of the Loan Parties, any other person engaged in a prohibited transactionwith respect to any Pension Plan or violated any of the fiduciary responsibility rules with respect to any Pension Plan, which ineither event could reasonably be expected to result in a Material Adverse Effect.(c) (i) No ERISA Event has occurred or, to the best knowledge of the Loan Parties, is expected to occur; (ii) as of themost recent valuation date for any Pension Plan, the funding target attainment percentage (as defined in Section 430(d)(2) of theInternal Revenue Code) is sixty percent (60%) or higher; (iii) no Loan Party nor any ERISA Affiliate has incurred any liability tothe PBGC other than for the payment of premiums, and there are no premium payments which have become due that areunpaid; (iv) no Loan Party nor any ERISA Affiliate has engaged in a transaction that could reasonably be expected to be subjectto Section 4069 or Section 4212(c) of ERISA; and (v) no Pension Plan has been terminated by the plan administrator thereof norby the PBGC, and no event or circumstance has occurred or exists that could reasonably be expected to cause the PBGC toinstitute proceedings under Title IV of ERISA to terminate any Pension Plan.5.13 Subsidiaries.Set forth on Schedule 5.13 is a complete and accurate list as of the Closing Date of each Loan Party and each Subsidiary that isnot an Immaterial Subsidiary and, to the knowledge of the Loan Parties, each Immaterial Subsidiary, together with (i) jurisdiction oforganization, (ii) number of shares of each class of Equity Interests outstanding, and (iii) number and percentage of outstanding sharesof each class owned (directly or indirectly) by any Loan Party or any Subsidiary. The outstanding Equity Interests of each Loan Partyand each Domestic Subsidiary that is not an Immaterial Subsidiary (and, to the extent applicable under applicable foreign Law, eachForeign Subsidiary that is not an Immaterial Subsidiary) are validly issued, fully paid and nonassessable, and, to the knowledge of theLoan Parties, the outstanding Equity Interests of each Immaterial Subsidiary that is a Domestic Subsidiary (and, to the extent applicableunder applicable foreign Law, each Immaterial Subsidiary that is a Foreign Subsidiary) are validly issued, fully paid and nonassessable.5.14 Margin Regulations; Investment Company Act.(a) Neither Borrower is engaged or will engage, principally or as one of its important activities, in the business ofpurchasing or carrying margin stock (within the meaning of Regulation U issued by the FRB), or extending credit for thepurpose of purchasing or carrying margin stock. Following the application of the proceeds of each Borrowing or drawing undereach Letter of Credit, not more than twenty-five percent (25%) of the value of the assets (either of a Borrower only or of aBorrower and its Subsidiaries on a consolidated basis) subject to the provisions of Section 7.01 or Section 7.05 or subject to anyrestriction contained in any agreement or instrument between either Borrower and any Lender or any Affiliate of any Lenderrelating to Indebtedness and within the scope of Section 8.01(e) will be margin stock.(b) Neither Borrower, nor any Person Controlling either of the Borrowers, nor any Subsidiary, is or is required to beregistered as an “investment company” under the Investment Company Act of 1940.5.15 Disclosure.Each Loan Party has disclosed to the Administrative Agent and the Lenders all agreements, instruments and corporate or otherrestrictions to which it or any of its Subsidiaries is subject, and all other matters known to it, that, individually or in the aggregate, couldreasonably be expected to result in a Material Adverse Effect. No report, financial statement, certificate or other information furnished(whether in writing or orally) by or on behalf of any Loan Party to the Administrative Agent or any Lender in connection with thetransactions contemplated hereby and the negotiation of this Agreement or delivered hereunder or under any other Loan Document (ineach case, as modified or supplemented by other information so furnished) contains any material misstatement of fact or omits to stateany material fact necessary to make the statements therein, taken as a whole, in the light of the circumstances under which they weremade, not misleading; provided that, with respect to projected financial information, the Loan Parties represent only that suchinformation was prepared in good faith based upon assumptions believed to be reasonable at the time. As of the Closing Date, theinformation included in the Beneficial Ownership Certification is true and correct in all respects.5.16 Compliance with Laws.Each Loan Party and Subsidiary is in compliance with the requirements of all Laws and all orders, writs, injunctions and decreesapplicable to it or to its properties, except in such instances in which (a) such requirement of Law or order, writ, injunction or decree isbeing contested in good faith by appropriate proceedings diligently conducted or (b) the failure to comply therewith could notreasonably be expected to have a Material Adverse Effect.5.17 Intellectual Property; Licenses, Etc.Each Loan Party and each Subsidiary owns, or possesses the right to use, all of the IP Rights that are reasonably necessary forthe operation of their respective businesses (collectively, the “Material IP Rights”). Set forth on Schedule 5.17 is a list, as of the ClosingDate, of: (i) all IP Rights registered or pending registration with the United States Copyright Office or the United States Patent andTrademark Office that a Loan Party owns; and (ii) all licenses (excluding, in the case of licensed software, any shrink wrap, clickthrough, browse wrap or commercial off-the-shelf software that has not been modified or customized by a third party for the LoanParties and that has been licensed in the ordinary course of business to the Loan Parties) of Material IP Rights that are owned by thirdparties. Except for such claims and infringements that could not reasonably be expected to have a Material Adverse Effect: (x) no claimhas been asserted and is pending by any Person challenging or questioning the use of any Material IP Rights or the validity oreffectiveness of any Material IP Rights, nor does any Loan Party know of any such claim; and (y) to the knowledge of the ResponsibleOfficers of the Loan Parties, the use of any Material IP Rights by any Loan Party or any Subsidiary or the granting of a right or a licensein respect of any Material IP Rights from any Loan Party or any Subsidiary or the operation of the business of any Loan Party or anySubsidiary does not infringe in any material respect on the rights of any other Person. As of the Closing Date, none of the Material IPRights owned by any Loan Party is subject to any exclusive licensing agreement or similar arrangement in favor of a third partylicensee (other than in the ordinary course of business) except as set forth on Schedule 5.17.5.18 Solvency.Each of the Borrowers is Solvent, and the Loan Parties on a consolidated basis are Solvent.5.19 Perfection of Security Interests in the Collateral.The Collateral Documents create valid security interests in, and Liens on, the Collateral purported to be covered thereby, whichsecurity interests and Liens are currently perfected security interests and Liens (to the extent contemplated by the Loan Documents),prior to all other Liens other than Permitted Liens.5.20 Business Locations; Taxpayer Identification Number.Set forth on Schedule 5.20(a) is a list of all real property located in the United States that is owned or leased by any Loan Partyas of the Closing Date. Set forth on Schedule 5.20(b) is the jurisdiction of organization, chief executive office, exact legal name, U.S.taxpayer identification number and organizational identification number of each Loan Party as of the Closing Date. Except as set forthon Schedule 5.20(c), no Loan Party has during the five years preceding the Closing Date (i) changed its legal name, (ii) changed itsstate of formation or (iii) been party to a merger, consolidation or other change in structure. Set forth on Schedule 5.20(d) is a list ofeach domestic deposit and investment account of each Loan Party as of the Closing Date.5.21 OFAC.None of the Loan Parties, nor any of their Subsidiaries, nor, to the knowledge of the Loan Parties and their Subsidiaries, anydirector, officer, employee, agent, affiliate or representative thereof, is an individual or entity that is (or is owned or controlled by anyindividual or entity that is) (i) currently the subject or target of any Sanctions, (ii) included on OFAC’s List of Specially DesignatedNationals, HMT’s Consolidated List of Financial Sanctions Targets and the Investment Ban List, or any similar list enforced by anyother relevant sanctions authority or (iii) located, organized or resident in a Designated Jurisdiction.5.22 Anti-Corruption Laws.The Loan Parties and their Subsidiaries have conducted their businesses in compliance in all material respects with the UnitedStates Foreign Corrupt Practices Act of 1977, the UK Bribery Act 2010, and other similar anti-corruption legislation in otherjurisdictions and have instituted and maintained policies and procedures designed to promote and achieve compliance with such Laws.5.23 No EEA Financial Institution.No Loan Party is an EEA Financial Institution.5.24 No Casualty.Neither the businesses nor the properties of any Loan Party or any of its Subsidiaries are affected by any fire, explosion,accident, strike, lockout or other labor dispute, drought, storm, hail, earthquake, embargo, act of God or of the public enemy or othercasualty (whether or not covered by insurance) that, either individually or in the aggregate (and after taking into account proceeds, andreasonably anticipated proceeds, of insurance), could reasonably be expected to have a Material Adverse Effect.5.25 Designation as Senior Indebtedness.The Obligations constitute “Designated Senior Indebtedness” or any similar designation (with respect to indebtedness havingthe maximum rights as “senior debt”) under and as defined in any agreement governing any Subordinated Debt and the subordinationprovisions set forth in each such agreement are legally valid and enforceable against the parties thereto.ARTICLE VI AFFIRMATIVE COVENANTSUntil the Facility Termination Date, each Loan Party shall and shall cause each Subsidiary to:6.01 Financial Statements.Deliver to the Administrative Agent and each Lender:(a) as soon as available, but in any event within ninety (90) days after the end of each fiscal year of PRGX,commencing with the fiscal year ending December 31, 2018, a consolidated balance sheet of PRGX and its Subsidiaries as atthe end of such fiscal year, and the related consolidated statements of operations, shareholders’ equity and cash flows for suchfiscal year, setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail andprepared in accordance with GAAP, audited and accompanied by a report and opinion of an independent certified publicaccountant of nationally recognized standing reasonably acceptable to the Administrative Agent (it being understood andagreed that the Borrowers’ auditors as of the Closing Date are deemed reasonably acceptable), which report and opinion shallbe prepared in accordance with generally accepted auditing standards and shall not be subject to any “going concern” or likequalification or exception or any qualification or exception as to the scope of such audit; and(b) as soon as available, but in any event within forty-five (45) days after the end of each of the first three fiscalquarters of each fiscal year of PRGX, commencing with the fiscal quarter ending March 31, 2019, a consolidated balance sheetof PRGX and its Subsidiaries as at the end of such fiscal quarter (and showing in comparative form their financial condition asof the preceding fiscal year end), the related consolidated statements of operations for such fiscal quarter and for the portion ofPRGX’s fiscal year then ended (and showing in comparative form the figures for the corresponding periods in the previousfiscal year), and the related consolidated statements of cash flows for the portion of PRGX’s fiscal year then ended (andshowing in comparative form the figures for the corresponding period in the previous fiscal year), all in reasonable detail andcertified by the chief executive officer, chief financial officer, treasurer or controller of PRGX as fairly presenting theconsolidated financial condition, results of operations, and cash flows of PRGX and its Subsidiaries in accordance with GAAP,subject only to normal year-end audit adjustments and the absence of footnotes.As to any information contained in materials furnished pursuant to Section 6.02(d), PRGX shall not be separately required to furnishsuch information under Section 6.01(a) or 6.01(b), but the foregoing shall not be in derogation of the obligation of PRGX to furnish theinformation and materials described in Section 6.01(a) or 6.01(b) at the times specified therein.6.02 Certificates; Other Information.Deliver to the Administrative Agent and each Lender, in form and detail satisfactory to the Administrative Agent and theRequired Lenders:(a) concurrently with the delivery of the financial statements referred to in Section 6.01(a), a certificate of itsindependent certified public accountants who certified such financial statements stating that in making the examinationnecessary therefor no knowledge was obtained of any Default under the financial covenants set forth herein or, if any suchDefault shall exist, stating the nature and status of such event; and such certificate may be limited to the extent required byaccounting rules or guidelines;(b) concurrently with the delivery of the financial statements referred to in Sections 6.01(a) and 6.01(b), a dulycompleted Compliance Certificate signed by the chief executive officer, chief financial officer, treasurer or controller of PRGXwhich shall include such supplements to Schedules 5.13, 5.17, 5.20(a), 5.20(b), 5.20(c) and 5.20(d), as are necessary such that,as supplemented, such Schedules would be accurate and complete as of the date of such Compliance Certificate; provided, that,supplements to Schedule 5.17 shall only be required upon the reasonable request of the Administrative Agent (which deliverymay, unless the Administrative Agent, or a Lender requests executed originals, be by electronic communication including fax ore-mail and shall be deemed to be an original authentic counterpart thereof for all purposes);(c) not later than March 31 of each fiscal year of PRGX, commencing with the fiscal year beginning January 1, 2019,an annual business plan and budget of PRGX and its Subsidiaries containing, among other things, a pro forma balance sheetand statement of cash flows for such fiscal year and a pro forma profits and losses statement by service line for each quarter ofsuch fiscal year;(d) promptly after the same are available, copies of each annual report, proxy or financial statement or other report orcommunication sent to the equityholders of PRGX, and copies of all annual, regular, periodic and special reports andregistration statements which a Loan Party or any Subsidiary may file or be required to file with the SEC under Section 13 or15(d) of the Securities Exchange Act of 1934, and not otherwise required to be delivered to the Administrative Agent pursuanthereto;(e) promptly after any request by the Administrative Agent or any Lender, copies of any detailed audit reports,management letters or recommendations submitted to the board of directors (or the audit committee of the board of directors) ofPRGX by independent accountants in connection with the accounts or books of PRGX or any Subsidiary, or any audit of any ofthem;(f) promptly after the furnishing thereof, copies of any statement or report furnished to any holder of debt securities ofany Loan Party or any Subsidiary pursuant to the terms of any indenture, loan or credit or similar agreement and not otherwiserequired to be furnished to the Lenders pursuant to Section 6.01 or any other clause of this Section 6.02;(g) promptly, and in any event within five (5) Business Days after receipt thereof by any Loan Party or any Subsidiary,copies of each notice or other correspondence received from the SEC (or comparable agency in any applicable non-U.S.jurisdiction) concerning any investigation or possible investigation or other inquiry by such agency regarding financial or otheroperational results of any Loan Party or any Subsidiary;(h) promptly following any request therefor, information and documentation reasonably requested by theAdministrative Agent or any Lender for purposes of compliance with applicable “know your customer” requirements under thePATRIOT Act, the Beneficial Ownership Regulation or other applicable anti-money laundering Laws; and(i) promptly, such additional information regarding the business, financial or corporate affairs of any Loan Party or anySubsidiary, or compliance with the terms of the Loan Documents, as the Administrative Agent or any Lender may from time totime reasonably request.Documents required to be delivered pursuant to Section 6.01(a) or 6.01(b) or Section 6.02(d) (to the extent any such documentsare included in materials otherwise filed with the SEC) may be delivered electronically and if so delivered, shall be deemed to havebeen delivered on the date (i) on which PRGX posts such documents, or provides a link thereto on PRGX’s website on the Internet atthe website address listed on Schedule 11.02; or (ii) on which such documents are posted on PRGX’s behalf on an Internet or intranetwebsite, if any, to which each Lender and the Administrative Agent have access (whether a commercial, third party website or whethersponsored by the Administrative Agent).PRGX hereby acknowledges that (a) the Administrative Agent and/or an Affiliate thereof may, but shall not be obligated to,make available to the Lenders and the L/C Issuer materials and/or information provided by or on behalf of PRGX hereunder(collectively, “Borrower Materials”) by posting the Borrower Materials on IntraLinks, Syndtrak, ClearPar or a substantially similarelectronic transmission system (the “Platform”) and (b) certain of the Lenders (each a “Public Lender”) may have personnel who do notwish to receive material non-public information with respect to PRGX or its Affiliates, or the respective securities of any of theforegoing, and who may be engaged in investment and other market-related activities with respect to such Persons’ securities.6.03 Notices.Promptly notify the Administrative Agent and each Lender of:(a) the occurrence of any Default or Event of Default;(b) any matter that has resulted or could reasonably be expected to result in a Material Adverse Effect;(c) the occurrence of any ERISA Event; or(d) any material change in accounting policies or financial reporting practices by any Loan Party or any Subsidiary,including any determination by the Borrowers referred to in Section 2.10(b).Each notice pursuant to this Section 6.03 shall be accompanied by a statement of a Responsible Officer of the Borrowers settingforth details of the occurrence referred to therein and stating what action the Borrowers have taken and propose to take with respectthereto. Each notice pursuant to Section 6.03(a) shall describe with particularity any and all provisions of this Agreement and any otherLoan Document that are the subject of such Default or other referenced event.6.04 Payment of Taxes.Pay and discharge, as the same shall become due and payable, all its federal income and other material tax liabilities,assessments and governmental charges or levies upon it or its properties or assets, unless the same are being contested in good faith byappropriate proceedings diligently conducted and adequate reserves in accordance with GAAP are being maintained by such LoanParty or such Subsidiary.6.05 Preservation of Existence, Etc.(a) Preserve, renew and maintain in full force and effect its legal existence under the Laws of the jurisdiction of itsorganization except in a transaction permitted by Section 7.04 or 7.05 except, in the case of any Subsidiary of PRGX that is nota Loan Party, to the extent the failure to do so would not reasonably be expected to result in a Material Adverse Effect.(b) (i) With respect to the Borrowers, preserve, renew and maintain in full force and effect its good standing (to theextent that such concept exists in such jurisdiction) under the Laws of the jurisdiction of its organization except in a transactionpermitted by Section 7.04 or 7.05 and (ii) with respect to each Loan Party and each Subsidiary (other than either Borrower),preserve, renew and maintain in full force and effect its good standing (to the extent that such concept exists in suchjurisdiction) under the Laws of the jurisdiction of its organization except in a transaction permitted by Section 7.04 or 7.05 andexcept, with respect to this clause (b)(ii), to the extent the failure to do so would not reasonably be expected to result in aMaterial Adverse Effect, and, with respect to any Guarantor that is not in good standing (to the extent that such concept exists insuch jurisdiction) under the Laws of the jurisdiction of its organization, upon becoming aware of such Guarantor no longerbeing in good standing, the Loan Parties shall promptly undertake commercially reasonable efforts to restore such Guarantor togood standing.(c) Take all reasonable action to maintain all rights, privileges, permits, licenses and franchises necessary or desirablein the normal conduct of its business, except to the extent that the failure to do so could not reasonably be expected to have aMaterial Adverse Effect.(d) Preserve or renew all of its IP Rights, the non-preservation or non-renewal of which could reasonably be expectedto have a Material Adverse Effect.6.06 Maintenance of Properties.(a) Maintain, preserve and protect all of its material properties and equipment necessary in the operation of its businessin good working order and condition, ordinary wear and tear excepted.(b) Make all necessary repairs thereto and renewals and replacements thereof, except where the failure to do so couldnot reasonably be expected to have a Material Adverse Effect.(c) Use the standard of care typical in the industry in the operation and maintenance of its facilities.6.07 Maintenance of Insurance.(a) Maintain in full force and effect insurance (including worker’s compensation insurance, liability insurance, casualtyinsurance and business interruption insurance) with financially sound and reputable insurance companies not Affiliates of eitherBorrower, in such amounts, with such deductibles and covering such risks as are customarily carried by companies engaged insimilar businesses and owning similar properties in localities where such Loan Party or such Subsidiary operates.(b) In the case of any Loan Party, cause the Administrative Agent and its successors and assigns to be named aslender’s loss payee or mortgagee, as its interest may appear, and/or additional insured with respect to any such insuranceproviding liability coverage or coverage in respect of any Collateral, and cause each provider of any such insurance to agree, byendorsement upon the policy or policies issued by it or by independent instruments furnished to the Administrative Agent, thatit will give the Administrative Agent thirty (30) days (or such lesser amount as the Administrative Agent may agree) priorwritten notice before any such policy or policies shall be altered or canceled.6.08 Compliance with Laws.Comply with the requirements of all Laws and all orders, writs, injunctions and decrees applicable to it or to its business orproperty, except in such instances in which (a) such requirement of Law or order, writ, injunction or decree is being contested in goodfaith by appropriate proceedings diligently conducted; or (b) the failure to comply therewith could not reasonably be expected to have aMaterial Adverse Effect.6.09 Books and Records.(a) Maintain proper books of record and account, in which full, true and correct entries in conformity with GAAPconsistently applied shall be made of all financial transactions and matters involving the assets and business of such Loan Partyor such Subsidiary, as the case may be.(b) Maintain such books of record and account in material conformity with all applicable requirements of anyGovernmental Authority having regulatory jurisdiction over such Loan Party or such Subsidiary, as the case may be.6.10 Inspection Rights.Permit representatives and independent contractors of the Administrative Agent (which may include representatives of one ormore Lenders) to visit and inspect any of its properties, to examine its corporate, financial and operating records, and make copiesthereof or abstracts therefrom, and to discuss its affairs, finances and accounts with its directors, officers, and independent publicaccountants (with the Borrowers being given a reasonable opportunity to be present in any discussion with such accountants), all at theexpense of the Borrowers and at such reasonable times during normal business hours and as often as may be reasonably desired, uponreasonable advance notice to the Borrowers; provided, however, that (i) unless an Event of Default exists, such visits and inspectionsshall only be conducted up to two (2) times per calendar year and (ii) when an Event of Default exists the Administrative Agent (or anyof the Administrative Agent’s representatives or independent contractors (which may include representatives of one or more Lenders))may do any of the foregoing at the expense of the Borrowers at any time during normal business hours and without advance notice. Inno event shall the Borrowers be obligated to pay the expense associated with such visits and inspections of any Lender (other than, forpurposes of clarity, the reasonable expenses of the Administrative Agent).6.11 Use of Proceeds.Use the proceeds of the Credit Extensions (a) to finance working capital, capital expenditures, share repurchases, PermittedAcquisitions and other lawful corporate purposes, and (b) to refinance certain existing Indebtedness, provided that in no event shall theproceeds of the Credit Extensions be used in contravention of any Law or of any Loan Document.6.12 ERISA Compliance.Do, and cause each of its ERISA Affiliates to do, each of the following: (a) maintain each Pension Plan in compliance in allmaterial respects with the applicable provisions of ERISA, the Internal Revenue Code and other federal or state Law; (b) cause eachPension Plan that is qualified under Section 401(a) of the Internal Revenue Code to maintain such qualification; and (c) make allrequired contributions to any Pension Plan subject to Section 412, Section 430 or Section 431 of the Internal Revenue Code.6.13 Additional Guarantors.Each Domestic Subsidiary (other than PUSA, which shall be a “Guarantor” only to the extent that such Borrower is a“Guarantor” as provided under clause (c) of the definition of “Guarantor”) existing on the Closing Date, unless an ImmaterialSubsidiary, shall become a Guarantor as of the Closing Date. Each Domestic Subsidiary formed or acquired after the Closing Date,unless an Immaterial Subsidiary, shall become a Guarantor within thirty (30) days (or such later date as the Administrative Agent mayagree in its sole discretion) after such Person becomes a Domestic Subsidiary (including by way of division). Each Domestic Subsidiarythat is not a Loan Party because it is an Immaterial Subsidiary shall become a Guarantor within thirty (30) days (or such later date as theAdministrative Agent may agree in its sole discretion) after such Person ceases to be an Immaterial Subsidiary. In the case of anyDomestic Subsidiary that becomes a Guarantor after the Closing Date, such Person shall (i) become a Guarantor by executing anddelivering to the Administrative Agent a Joinder Agreement or such other documents as the Administrative Agent shall deemappropriate for such purpose, and (ii) upon the request of the Administrative Agent in its sole discretion, deliver to the AdministrativeAgent such Organization Documents, resolutions and favorable opinions of counsel, all in form, content and scope reasonablysatisfactory to the Administrative Agent. It is understood and agreed that, to the extent that, as of the date of the most recent financialstatements required to be delivered pursuant to Section 6.01(a) or Section 6.01(b), PRGX and its Subsidiaries would not be incompliance with Section 7.18, PRGX shall within thirty (30) days (or such longer period of time as is agreed to by the AdministrativeAgent in its sole discretion) cause Domestic Subsidiaries that would otherwise be classified as Immaterial Subsidiaries to becomeGuarantors in accordance with the foregoing provisions of this Section 6.13 to the extent necessary to achieve compliance with Section7.18.6.14 Pledged Assets.(a) Equity Interests. Cause each Loan Party to cause (i) one hundred percent (100%) of the issued and outstandingEquity Interests in each Domestic Subsidiary (unless an Immaterial Subsidiary) directly owned by such Loan Party and (ii) sixty-five percent (65%) of the issued and outstanding Equity Interests in each first-tier Foreign Subsidiary (unless an ImmaterialSubsidiary) directly owned by such Loan Party to be subject at all times to a first priority, perfected Lien in favor of theAdministrative Agent pursuant to the terms and conditions of the Collateral Documents (subject to Permitted Liens), and, inconnection with the foregoing, deliver to the Administrative Agent such other documentation as the Administrative Agent mayreasonably may request, including any filings and deliveries, necessary to perfect such Liens and favorable opinions of counselall in form and substance reasonably satisfactory to the Administrative Agent. For purposes of the foregoing, it is understoodand agreed that: (w) in the event that the Administrative Agent shall reasonably determine that the cost of obtaining such a Lienon the Equity Interests in any Subsidiary in which a Loan Party owns five percent (5%) or less is excessive in relation to thebenefit to the Administrative Agent and the other holders of the Obligations of the security to be afforded thereby, theAdministrative Agent may, without any further consent of the Lenders, waive the requirement that the Equity Interests in suchSubsidiary held by such Loan Party be subject to a Lien in favor of the Administrative Agent (in which case, such EquityInterests in such Subsidiary shall not be, and shall not be required to become, subject to a Lien in favor of the AdministrativeAgent); (x) to the extent that a first priority, perfected Lien in favor of the Administrative Agent in the Equity Interests in anyfirst-tier Foreign Subsidiary cannot be obtained pursuant to a pledge agreement or similar agreement under the laws of the Stateof New York, the Loan Parties shall (A) cause such Equity Interests to become subject to a Lien in favor of the AdministrativeAgent pursuant to the laws of the jurisdiction in which such Foreign Subsidiary is organized or formed and (B) deliver to theAdministrative Agent such documentation as the Administrative Agent may reasonably request in connection therewith,including any filings and deliveries necessary to perfect such Lien, together with favorable opinions of counsel, in each case inform and substance reasonably satisfactory to the Administrative Agent; provided, however, that in the event that theAdministrative Agent shall reasonably determine that the cost of obtaining such a Lien under this clause (x) on the EquityInterests in any such Foreign Subsidiary under the laws of the jurisdiction in which such Foreign Subsidiary is organized orformed is excessive in relation to the benefit to the Administrative Agent and the other holders of the Obligations of the securityto be afforded thereby, the Administrative Agent may, without any further consent of the Lenders, waive the requirement thatthe Equity Interests in such Foreign Subsidiary be subject to a Lien in favor of the Administrative Agent pursuant to the laws ofthe jurisdiction in which such Foreign Subsidiary is organized or formed (in which case, such Equity Interests in such ForeignSubsidiary shall not be, and shall not be required to become, subject to a Lien in favor of the Administrative Agent); (y) in theevent that the Administrative Agent shall reasonably determine that the cost of obtaining such a Lien on the Equity Interests inPRGX India Private Limited, an Indian corporation, is excessive in relation to the benefit to the Administrative Agent and theother holders of the Obligations of the security to be afforded thereby, the Administrative Agent may, without any furtherconsent of the Lenders, waive the requirement that the Equity Interests in PRGX India Private Limited, an Indian corporation, besubject to a Lien in favor of the Administrative Agent (in which case, such Equity Interests in PRGX India Private Limited, anIndian corporation, shall not be, and shall not be required to become, subject to a Lien in favor of the Administrative Agent);and (z) to the extent that, as of the date of the most recent financial statements required to be delivered pursuant to Section6.01(a) or Section 6.01(b), PRGX and its Subsidiaries would not be in compliance with Section 7.18, PRGX shall within thirty(30) days (or such longer period of time as is agreed to by the Administrative Agent in its sole discretion) cause (A) onehundred percent (100%) of the issued and outstanding Equity Interests in each Domestic Subsidiary directly owned by suchLoan Party and (B) sixty-five percent (65%) of the issued and outstanding Equity Interests in each first-tier Foreign Subsidiarydirectly owned by such Loan Party to be subject at all times to a first priority, perfected Lien in favor of the AdministrativeAgent pursuant to the terms and conditions of the Collateral Documents (subject to Permitted Liens) in accordance with theforegoing provisions of this Section 6.14(a) to the extent necessary to achieve compliance with Section 7.18.(b) Other Property. Cause each Loan Party to cause all property (other than Equity Interests in any Subsidiary, and allExcluded Property) of such Loan Party to be subject at all times to first priority, perfected Liens in favor of the AdministrativeAgent to secure the Obligations pursuant to the Collateral Documents (subject to Permitted Liens) and, in connection with theforegoing, deliver to the Administrative Agent such other documentation as the Administrative Agent may reasonably request,including filings and deliveries necessary to perfect such Liens, Organization Documents, resolutions and favorable opinions ofcounsel to such Person, all in form, content and scope reasonably satisfactory to the Administrative Agent; provided, however,notwithstanding anything to the contrary in this Agreement or any other Loan Document, none of the Loan Parties shall berequired to enter into any deposit or securities account control agreements; provided, further, that, the Loan Parties shall only berequired, using commercially reasonable efforts, to assign rights to the payment of Accounts pursuant to the Assignment ofClaims Act of 1940, as amended (31 U.S.C. §3727 et. seq.) to the extent Accounts owed by federal Governmental Authoritiescomprise more than twenty percent (20%) of all Accounts of the Borrowers and the other Loan Parties, in the aggregate.6.15 Material Contracts.Perform and observe all the terms and provisions of each Material Contract to be performed or observed by it, maintain eachsuch Material Contract in full force and effect, enforce each such Material Contract in accordance with its terms, take all such action tosuch end as may be from time to time reasonably requested by the Administrative Agent and, upon the reasonable request of theAdministrative Agent, make to each other party to each such Material Contract such demands and requests for information and reportsor for action as any Loan Party or any of its Subsidiaries is entitled to make under such Material Contract, and cause each of itsSubsidiaries to do so, except, in any case, where the failure to do so, either individually or in the aggregate, could not reasonably beexpected to have a Material Adverse Effect.6.16 Depository and Treasury Management Relationship.Except as may be agreed otherwise in writing by the Administrative Agent in its sole discretion, maintain their principaldepository bank and treasury management relationships with Bank of America (subject to a transitional period of six (6) months (orsuch longer period as may be reasonably required, so long as the Loan Parties are acting in good faith and with reasonable diligence totransition such accounts) with respect to domestic accounts and of twelve (12) months (or such longer period as may be reasonablyrequired, so long as the Loan Parties are acting in good faith and with reasonable diligence to transition such accounts) with respect toforeign accounts). In the case of domestic relationships, compliance with this section shall be assessed (i) against each Borrowerseparately and (ii) against the Loan Parties taken as a whole. In the case of foreign relationships, compliance with this section shall beassessed against all Foreign Subsidiaries (including for this purpose any foreign relationships of any Loan Party) taken as a whole.6.17 Anti-Corruption Laws.Conduct its businesses in compliance in all material respects with the United States Foreign Corrupt Practices Act of 1977, theUK Bribery Act 2010 and other similar anti-corruption legislation in other jurisdictions and maintain policies and procedures designedto promote and achieve compliance with such Laws.6.18 Merchant Services Settlement Account Standing Transfer Order.Establish as promptly as possible and maintain thereafter a standing transfer order for each deposit account of such Borrower orLoan Party used as a settlement account in connection with a merchant services arrangement, whereby the available balance of suchaccounts in excess of $100,000 in the aggregate is transferred each Business Day into one or more accounts of the Loan Partiesconstituting Collateral.6.19 Post-Closing Covenants.(a) Within thirty (30) days following the Closing Date (or such later date as the Administrative Agent shall agree in itssole discretion), the Loan Parties shall deliver such stock certificates, stock powers and certificates of resolutions or other actionof PRGX Canada Corp., a Canadian corporation, as the Administrative Agent may require.(b) Within thirty (30) days following the Closing Date (or such later date as the Administrative Agent shall agree in itssole discretion), the Loan Parties shall deliver such stock certificates, stock powers and certificates of resolutions or other actionof Meridian Corporation Limited, a Jersey corporation, as the Administrative Agent may require.(c) As promptly as possible using commercially reasonable effort, the Loan Parties shall deliver such stock certificates,stock powers and certificates of resolutions or other action of PRGX India Private Limited, an Indian corporation, as theAdministrative Agent may require.ARTICLE VII NEGATIVE COVENANTSUntil the Facility Termination Date, no Loan Party shall, nor shall it permit any Subsidiary to, directly or indirectly:7.01 Liens.Create, incur, assume or suffer to exist any Lien upon any of its property or revenues, whether now owned or hereafteracquired, other than the following:(a) Liens pursuant to any Loan Document;(b) Liens existing on the Closing Date and listed on Schedule 7.01 and any renewals, replacements or extensionsthereof, provided that the property covered thereby is not increased;(c) Liens (other than Liens imposed under ERISA) for taxes, assessments or governmental charges or levies not yet dueor which are being contested in good faith and by appropriate proceedings diligently conducted, if adequate reserves withrespect thereto are maintained on the books of the applicable Person in accordance with GAAP;(d) Liens of landlords, carriers, warehousemen, mechanics, materialmen and repairmen or other like Liens (i) arising inthe ordinary course of business for amounts which are not overdue for a period of more than thirty (30) days or which are beingcontested in good faith and by appropriate proceedings diligently conducted, if adequate reserves with respect thereto aremaintained on the books of the applicable Person and (ii) which do not secure borrowed money;(e) pledges or deposits in the ordinary course of business in connection with workers’ compensation, unemploymentinsurance and other social security legislation, other than any Lien imposed by ERISA;(f) deposits to secure the performance of bids, trade contracts and leases (other than Indebtedness), statutoryobligations, surety and appeal bonds, performance bonds and other obligations of a like nature incurred in the ordinary courseof business;(g) easements, rights-of-way, restrictions and other similar encumbrances affecting real property which, in theaggregate, are not substantial in amount, and which do not in any case materially detract from the value of the property subjectthereto or materially interfere with the ordinary conduct of the business of the applicable Person;(h) Liens securing judgments and attachments for the payment of money (or appeal or other surety bonds relating tosuch judgments) not constituting an Event of Default under Section 8.01(h) or existing from any litigation or legal proceedingthat are currently being contested in good faith by appropriate proceedings and with respect to which adequate reserves arebeing maintained in accordance with GAAP;(i) Liens securing Indebtedness permitted under Section 7.03(e); provided that such Liens do not at any time encumberany property other than the property financed by such Indebtedness;(j) leases or subleases, and licenses or sublicenses, granted to others not interfering in any material respect with thebusiness of any Loan Party or any Subsidiary;(k) any interest of title of a lessor under, and Liens arising from Uniform Commercial Code financing statements (orequivalent filings, registrations or agreements in foreign jurisdictions) relating to, leases permitted by this Agreement;(l) Liens deemed to exist in connection with Investments in repurchase agreements permitted under Section 7.02(a);(m) normal and customary rights of setoff, revocation, refund or chargeback upon deposits (or permitted investments)of cash in favor of banks or other financial institutions;(n) Liens of a collection bank arising under Section 4-210 of the Uniform Commercial Code on items in the course ofcollection;(o) Liens securing Indebtedness to the extent permitted under Section 7.03(m) (i) existing on any asset of any Person atthe time such Person becomes a Subsidiary of a Borrower, (ii) existing on any asset of any Person at the time such Person ismerged with or into any Borrower or any Subsidiary of a Borrower or (iii) existing on any asset prior to the Acquisition thereofby any Borrower or any Subsidiary of a Borrower; provided, that any such Lien was not created in the contemplation of any ofthe foregoing and any such Lien secures only those obligations which it secures on the date that such Person becomes aSubsidiary or the date of such Acquisition; provided, further, that such Lien may secure any replacements, renewals andextensions of any such Indebtedness to the extent permitted under Section 7.03(m) and provided that the property coveredthereby is not increased;(p) Liens securing the obligations of a Borrower or Subsidiary of a Borrower arising under any merchant servicesarrangement permitted by the Loan Documents, to the extent such Lien encumbers only Excluded Property; and(q) other Liens securing Indebtedness or other obligations in an aggregate amount not to exceed $1,000,000.7.02 Investments.Make any Investments, except:(a) Investments held in the form of cash (including demand deposit accounts) or Cash Equivalents;(b) Investments existing as of the Closing Date and set forth on Schedule 7.02;(c) Investments made after the Closing Date by PRGX in or to any Subsidiary and by any Subsidiary to PRGX or in orto another Subsidiary; provided, that the aggregate amount of Investments made after the Closing Date by Loan Parties in or to(including Guarantees by Loan Parties of Indebtedness of) any Subsidiary that is not a Loan Party (excluding all suchInvestments and Guarantees listed on Schedule 7.02), shall not exceed $5,000,000 in the aggregate at any time outstanding(with such $5,000,000 being measured as (A) the outflow of cash from the Loan Parties to other Subsidiaries that are not LoanParties, excluding cash arm’s-length payments for services rendered by such other Subsidiaries that are not Loan Parties to theLoan Parties, net of (B) the inflow of cash, including via transfer pricing, from the other Subsidiaries that are not Loan Parties tothe Loan Parties);(d) Investments consisting of extensions of credit in the nature of accounts receivable or notes receivable arising fromthe grant of trade credit in the ordinary course of business, and Investments received in satisfaction or partial satisfaction thereoffrom financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss;(e) Guarantees permitted by Section 7.03;(f) Permitted Acquisitions;(g) loans or advances to employees, officers or directors of either Borrower or any Subsidiary in the ordinary course ofbusiness for travel, relocation and related expenses, and for advances; provided, however, that the aggregate amount of all suchloans and advances does not exceed $500,000 at any time outstanding;(h) commission advances made in the ordinary course of business and consistent with practices during the previoustwo (2) fiscal years ending prior to the Closing Date;(i) to the extent permitted by Section 7.06, PRGX’s redemption, purchase or repurchase of its Equity Interests (otherthan disqualified stock) pursuant to open-market purchases, privately negotiated transactions or otherwise;(j) Guarantees of real estate and personalty leases of Subsidiaries in the ordinary course of business;(k) to the extent constituting Investments, transactions permitted under Section 7.04;(l) to the extent constituting Investments, transactions permitted under Section 7.05;(m) subject to compliance with Section 6.13, the formation of Subsidiaries, provided, however, that after the ClosingDate, no Foreign Subsidiary may form a Domestic Subsidiary; and(n) Investments of a nature not contemplated in the foregoing clauses in an amount not to exceed $1,000,000 in theaggregate at any time outstanding.7.03 Indebtedness.Create, incur, assume or suffer to exist any Indebtedness, except:(a) Indebtedness under the Loan Documents;(b) Indebtedness outstanding on the Closing Date set forth on Schedule 7.03 (and renewals, refinancings andextensions thereof); provided that (i) the amount of such Indebtedness is not increased at the time of such refinancing, renewalor extension except by an amount equal to a reasonable premium or other reasonable amount paid, and fees and expensesreasonably incurred, in connection with such refinancing and by an amount equal to any existing commitments unutilizedthereunder and (ii) the terms relating to principal amount, amortization, maturity, collateral (if any) and subordination (if any),and other material terms taken as a whole, of any such refinancing, renewal or extension are no less favorable in any materialrespect to the Loan Parties and their Subsidiaries or the Lenders than the terms of the Indebtedness being refinanced, renewed orextended;(c) intercompany Indebtedness to the extent permitted under Section 7.02; provided that in the case of Indebtednessowing by a Loan Party to a Foreign Subsidiary such Indebtedness shall not be paid or prepaid unless no Event of Default existsimmediately prior to or after giving effect to such prepayment;(d) obligations (contingent or otherwise) existing or arising under any Swap Contract, provided that (i) such obligationsare (or were) entered into by such Person in the ordinary course of business for the purpose of directly mitigating risksassociated with fluctuations in interest rates or foreign exchange rates, and not for purposes of speculation or taking a “marketview;” and (ii) such Swap Contract does not contain any provision exonerating the non defaulting party from its obligation tomake payments on outstanding transactions to the defaulting party;(e) purchase money Indebtedness (including (i) obligations in respect of capital leases and Synthetic Lease Obligationsand (ii) purchase money Indebtedness, obligations in respect of capital leases and Synthetic Lease Obligations assumed inconnection with any Permitted Acquisition or the acquisition of assets secured by a Lien on any such assets prior to theacquisition thereof; provided, that such Indebtedness is incurred prior to, contemporaneously with or within ninety (90) daysafter such acquisition or the completion of such construction or improvements) heretofore or hereafter incurred to finance thepurchase of fixed assets, and renewals, refinancings and extensions thereof, provided that (i) the aggregate outstanding principalamount of all such Indebtedness shall not exceed $2,000,000 at any one time outstanding; and (ii) such Indebtedness whenincurred shall not exceed the purchase price of the asset(s) financed;(f) unsecured Indebtedness consisting solely of Earn-Out Payments in respect of Permitted Acquisitions;(g) unsecured Indebtedness consisting solely of Deferred Payments in respect of Permitted Acquisitions;(h) unsecured Indebtedness consisting of deferred or incentive compensation payment obligations of PRGX or any ofits Subsidiaries that mandatorily must be, or optionally may be, settled in cash;(i) other unsecured Indebtedness in an aggregate principal amount not to exceed $5,000,000 at any one timeoutstanding;(j) unsecured Subordinated Debt in an aggregate principal amount (exclusive of Indebtedness subordinated pursuant toArticle X or Section 11.21) not to exceed $5,000,000 at any time outstanding;(k) obligations of a Borrower or Subsidiary of a Borrower incurred in connection with a merchant services arrangementpermitted by the Loan Documents;(l) to the extent constituting Indebtedness, obligations of PRGX or any of its Subsidiaries in respect of any overdraftand related liabilities arising from treasury, depository, credit card, purchasing card and cash management services or anyautomated clearing house transfers of funds and other obligations in respect of netting services, overdraft protections, cashpooling, employee credit cards and similar arrangements, in each case, in connection with deposit accounts in the ordinarycourse of business;(m) Indebtedness of any Subsidiary, or in respect of assets, in each case, acquired after the Closing Date in a PermittedAcquisition to the extent existing at the time of such Permitted Acquisition; provided, that (i) such Indebtedness shall not havebeen incurred in contemplation of such Permitted Acquisition, (ii) the aggregate principal amount of such Indebtedness shall notexceed $2,000,000 at any one time outstanding and (iii) such Indebtedness arises in connection with the financing of specificassets; and(n) Guarantees with respect to Indebtedness permitted under this Section 7.03.7.04 Fundamental Changes.Merge, dissolve, liquidate or consolidate with or into another Person or consummate any division, except that so long as noEvent of Default exists or would result therefrom, (a) a Borrower may merge or consolidate with any of its Subsidiaries provided thatsuch Borrower is the continuing or surviving Person, (b) any Subsidiary may merge or consolidate with any other Subsidiary providedthat if a Loan Party is a party to such transaction, the continuing or surviving Person is a Loan Party or shall become a Loan Partysubstantially simultaneously with such transaction, (c) either Borrower or any Subsidiary may merge or consolidate with any otherPerson in connection with a Permitted Acquisition provided that (i) if such Borrower is a party to such transaction, such Borrower is thecontinuing or surviving Person and (ii) if any other Loan Party is a party to such transaction, the continuing or surviving Person is aLoan Party or shall become a Loan Party substantially simultaneously with such transaction and (d) any Subsidiary may dissolve,liquidate or wind up its affairs at any time provided that such dissolution, liquidation or winding up, as applicable, could not have aMaterial Adverse Effect.7.05 Dispositions.Make any Disposition except:(a) Permitted Transfers;(b) to the extent constituting Dispositions, Dispositions to the extent permitted under Section 7.02, Section 7.04 orSection 7.06; and(c) other Dispositions so long as the aggregate net book value of all of the assets sold or otherwise disposed of by theLoan Parties and their Subsidiaries in all such transactions occurring after the Closing Date shall not exceed $2,000,000.7.06 Restricted Payments.Declare or make, directly or indirectly, any Restricted Payment, or incur any obligation (contingent or otherwise) to do so,except that:(a) each Subsidiary may make Restricted Payments to Persons that own Equity Interests in such Subsidiary, ratablyaccording to their respective holdings of the type of Equity Interest in respect of which such Restricted Payment is being made;(b) each Loan Party and each Subsidiary may declare and make dividend payments or other distributions payablesolely in common Equity Interests of such Person;(c) so long as no Event of Default then exists or would arise therefrom and the Loan Parties would be in compliancewith the financial covenants set forth in Section 7.11 recomputed as of the end of the period of the four fiscal quarters mostrecently ended for which PRGX has delivered financial statements pursuant to Section 6.01(a) or Section 6.01(b) after givingeffect to such Restricted Payment on a Pro Forma Basis, PRGX shall be permitted to make share repurchases of up to$10,000,000 in the aggregate during any fiscal year of PRGX (including, for purposes of fiscal year 2019, any such sharerepurchases occurring since January 1, 2019 and prior to the Closing Date); and(d) PRGX may declare and make other Restricted Payments so long as no Event of Default then exists or would arisetherefrom and the Loan Parties would be in compliance with the financial covenants set forth in Section 7.11 recomputed as ofthe end of the period of the four fiscal quarters most recently ended for which PRGX has delivered financial statements pursuantto Section 6.01(a) or Section 6.01(b) after giving effect to such Restricted Payment on a Pro Forma Basis.7.07 Change in Nature of Business.Engage in any material line of business substantially different from those lines of business conducted by the Loan Parties andtheir Subsidiaries on the Closing Date or any business substantially related or incidental thereto and reasonable expansions thereof.7.08 Transactions with Affiliates.Sell, lease or otherwise transfer any property to, or purchase, lease or otherwise acquire any property from, or otherwise engagein any other transactions with, any of its Affiliates, except for: (a) transactions in the ordinary course of business at prices and on termsand conditions not less favorable to such Borrower or such Subsidiary than could be obtained on an arm’s-length basis from unrelatedthird parties; (b) transactions between or among a Borrower and/or any other Loan Parties not involving any other Affiliates; (c) to theextent not specifically prohibited elsewhere in this Agreement, transactions between or among Loan Parties and Subsidiaries that are notLoan Parties, at prices and on terms and conditions, taken as a whole, not less favorable to such Loan Parties than could be obtained onan arm’s-length basis from unrelated third parties; (d) transactions between or among Subsidiaries that are not Loan Parties; and (e) anyRestricted Payment permitted by Section 7.06.7.09 Burdensome Agreements.Enter into, or permit to exist, any Contractual Obligation (except for the Loan Documents) that:(a) encumbers or restricts the ability of any such Person to (i) make Restricted Payments to any Loan Party, (ii) pay anyIndebtedness or other obligation owed to any Loan Party, (iii) make loans or advances to any Loan Party, (iv) transfer any of itsproperty to any Loan Party, (v) pledge its property pursuant to the Loan Documents or (vi) act as a Loan Party pursuant to theLoan Documents; or(b) requires the grant of any security for any obligation if such property is given as security for the Obligations;(c) the foregoing clauses (a) and (b) shall not apply to (i) customary restrictions and conditions contained inagreements relating to the sale of a Subsidiary pending such sale, provided such restrictions and conditions apply only to theSubsidiary (or assets thereof) that is sold and such sale is permitted hereunder, (ii) restrictions or conditions imposed underSubordinated Debt permitted hereunder and (iii) restrictions contained in the Organization Documents of any non-wholly ownedSubsidiary or joint venture formed or acquired after the Closing Date to the extent that such restrictions existed at the time ofacquisition thereof and were not incorporated into such Organization Documents in anticipation of such acquisition; and(d) the foregoing clause (a) shall not apply to (i) restrictions or conditions imposed by any agreement relating tosecured Indebtedness permitted by this Agreement (including obligations of a Borrower or Subsidiary of a Borrower incurred inconnection with a merchant services arrangement permitted by the Loan Documents) so long as such restrictions and conditionsapply only to the property securing such Indebtedness, (ii) customary provisions in leases and other contracts incurred in theordinary course of business restricting the assignment thereof, (iii) customary provisions restricting assignments, subletting orother transfers or payments contained in leases, licenses, and similar agreements, (iv) customary restrictions and conditionscontained in any agreement relating to any disposition of assets not prohibited hereunder pending consummation of such sale solong as such restrictions and conditions apply only to the property to be sold, (v) customary restrictions in agreementsgoverning cash collateral or deposits so long as such restrictions apply only to such cash collateral or deposits, (vi) customaryprovisions restricting assignment of any agreement with customers of, or vendors to, either Borrower or any of their respectiveSubsidiaries in the ordinary course of business and (vii) the terms and conditions of any merchant services arrangement enteredinto by a Borrower or a Subsidiary of a Borrower permitted by the Loan Documents.7.10 Use of Proceeds.Engage, principally or as one of its important activities, in the business of purchasing or carrying margin stock (within themeaning of Regulation U issued by the FRB), or extending credit for the purpose of purchasing or carrying margin stock. Followingthe application of the proceeds of each Borrowing or drawing under each Letter of Credit, not more than twenty-five percent (25%) ofthe value of the assets (either of either Borrower only or of PRGX and its Subsidiaries on a consolidated basis) subject to the provisionsof Section 7.01 or Section 7.05 or subject to any restriction contained in any agreement or instrument between either Borrower and anyLender or any Affiliate of any Lender relating to Indebtedness and within the scope of Section 8.01(e) will be margin stock.7.11 Financial Covenants.(a) Consolidated Leverage Ratio. Permit the Consolidated Leverage Ratio as of the end of any fiscal quarter of PRGXto be greater than 3.00 to 1.0; provided that upon the occurrence of a Material Acquisition, for the four (4) fiscal quarter periodcommencing with the fiscal quarter during which such Material Acquisition closes (such period of increase, the “LeverageIncrease Period”), the ratio set forth above shall, at the election of PRGX, be increased to 3.25 to 1.0. Upon the expiration ofsuch Leverage Increase Period, a subsequent Leverage Increase Period cannot commence unless there has been at least onefiscal quarter (a “Clean-up Fiscal Quarter”) where the permitted Consolidated Leverage Ratio is 3.00 to 1.0. Notwithstanding theforegoing, if PRGX delivers a Compliance Certificate for a completed fiscal quarter included in a Leverage Increase Period andsuch Compliance Certificate evidences that the actual Consolidated Leverage Ratio for such completed fiscal quarter was notgreater than 3.00 to 1.0, then PRGX, at its option, also may include in such Compliance Certificate its election to regard thatcompleted fiscal quarter as the requisite Clean-up Fiscal Quarter; and, in that event: (x) PRGX may commence a new LeverageIncrease Period (in connection with a new Material Acquisition, as per the proviso above) in any fiscal quarter following thatClean-up Fiscal Quarter; and (y) until such time (if ever) as a new Leverage Increase Period has been duly commenced, themaximum permitted Consolidated Leverage Ratio shall be 3.00 to 1.0. Subject to the above, there shall be no limit on thenumber of Leverage Increase Periods.(b) Consolidated Fixed Charge Coverage Ratio. Permit the Consolidated Fixed Charge Coverage Ratio as of the end ofany fiscal quarter of PRGX to be less than 1.25 to 1.0.7.12 Prepayment and Amendment of Other Indebtedness, Etc.(a) Prepay, redeem, purchase, defease or otherwise satisfy or obligate itself to do so prior to the scheduled maturitythereof in any manner (including by the exercise of any right of setoff), or make any payment in violation of any subordination,standstill or collateral sharing terms of or governing any Subordinated Debt, in each case if and to the extent the same wouldviolate any of the subordinating provisions under the applicable subordination agreement.(b) Amend, modify or change in any manner any term or condition of any Subordinated Debt Document or give anyconsent, waiver or approval thereunder; provided that the Subordinated Debt Documents may be amended or modified toextend the amortization or maturity of the indebtedness evidenced thereby, reduce the interest rate thereon, or otherwise amendor modify the terms thereof so long as the terms of any such amendment or modification are no more restrictive on the LoanParties than the terms of such documents as in effect before giving effect to such amendment or modification.(c) Take any other action in connection with any Subordinated Debt Document that would materially impair the valueof the interest or rights of any Loan Party thereunder or that would materially impair the rights or interests of the AdministrativeAgent or any Lender.7.13 Organization Documents; Fiscal Year; Legal Name, State of Formation; Form of Entity and Accounting Changes.(a) Amend, modify or change its Organization Documents in a manner materially adverse to the Lenders.(b) Change its fiscal year (except to change the fiscal year of a Subsidiary to conform to the fiscal year of PRGX).(c) Without providing ten (10) days prior written notice to the Administrative Agent (or such lesser period as theAdministrative Agent may agree), change its name, state of formation or form of organization.(d) Make any significant change in accounting treatment or reporting practices, except as required by GAAP.7.14 Ownership of Subsidiaries.Notwithstanding any other provisions of this Agreement to the contrary, (a) permit any Person (other than one or more of theBorrowers and their wholly-owned Subsidiaries) to own any Equity Interests of any Subsidiary except to qualify directors whererequired by applicable Law or to satisfy other requirements of applicable Law with respect to the ownership of Equity Interests ofForeign Subsidiaries, or (b) permit any Subsidiary to issue or have outstanding any shares of preferred Equity Interests.7.15 Sale Leasebacks.Enter into any Sale and Leaseback Transaction.7.16 Sanctions.Directly or indirectly, use any Credit Extension or the proceeds of any Credit Extension, or lend, contribute or otherwise makeavailable such Credit Extension or the proceeds of any Credit Extension to any Person, to fund any activities of or business with anyPerson, or in any Designated Jurisdiction, that, at the time of such funding, is the subject of Sanctions, or in any other manner that willresult in a violation by any Person (including any Person participating in the transaction, whether as Lender, Arranger, AdministrativeAgent, L/C Issuer, Swingline Lender, or otherwise) of Sanctions.7.17 Anti-Corruption Laws.Directly or indirectly use any Credit Extension or the proceeds of any Credit Extension for any purpose which would breach theUnited States Foreign Corrupt Practices Act of 1977, the UK Bribery Act 2010 or other similar anti-corruption legislation in otherjurisdictions.7.18 Designation of Subsidiaries as Immaterial Subsidiaries.PRGX shall not be permitted to designate a Subsidiary as an “Immaterial Subsidiary” (or, if such designation has alreadyoccurred, to continue designating a Subsidiary as an “Immaterial Subsidiary”) unless, as of the date of the most recent financialstatements required to be delivered pursuant to Section 6.01(a) or Section 6.01(b) (or, if prior to the first such delivery thereunder, thenas of the date of the most recent financial statements required to be delivered pursuant to the Existing Credit Agreement), not more thanone percent (1%) of the consolidated total assets of PRGX and its consolidated Subsidiaries, and not more than one percent (1%) of theconsolidated total revenues of PRGX and its consolidated Subsidiaries, are attributable to all then-designated Immaterial Subsidiaries. Indetermining consolidated assets and consolidated revenues, intercompany accounts eliminated in consolidation shall be disregarded. Ifa Subsidiary itself has one or more Subsidiaries, then none of them may be designated as an Immaterial Subsidiary unless all of themare.ARTICLE VIII EVENTS OF DEFAULT AND REMEDIES8.01 Events of Default.Any of the following shall constitute an Event of Default:(a) Non-Payment. Any Loan Party fails to pay (i) when and as required to be paid herein, and in the currency requiredhereunder, any amount of principal of any Loan or any L/C Obligation or deposit any funds as Cash Collateral in respect of L/CObligations, or (ii) within three (3) Business Days after the same becomes due, any interest on any Loan or on any L/CObligation, or any fee due hereunder, or (iii) within five (5) Business Days after the same becomes due, any other amountpayable hereunder or under any other Loan Document; or(b) Specific Covenants. Any Loan Party fails to perform or observe any term, covenant or agreement contained in anyof Section 6.01, 6.02, 6.03(a), 6.05(a), 6.10 or 6.11 or Article VII; or(c) Other Defaults. Any Loan Party fails to perform or observe any other covenant or agreement (not specified insubsection (a) or (b) above) contained in any Loan Document on its part to be performed or observed and such failure continuesfor thirty (30) days after the earlier of (i) any Responsible Officer of either Borrower becomes aware of such failure, or (ii)notice thereof shall have been given to PRGX by the Administrative Agent or any Lender; or(d) Representations and Warranties. Any representation, warranty, certification or statement of fact made or deemedmade by or on behalf of any Loan Party herein, in any other Loan Document, or in any document delivered in connectionherewith or therewith shall be incorrect or misleading in any material respect when made or deemed made (other than arepresentation or warranty that is expressly qualified by a Material Adverse Effect or materiality, in which case suchrepresentation or warranty shall prove to be incorrect in all respects); or(e) Cross-Default. (i) Any Loan Party or any Subsidiary (A) fails to make any payment when due (whether byscheduled maturity, required prepayment, acceleration, demand, or otherwise) in respect of any Indebtedness or Guarantee(other than Indebtedness hereunder and Indebtedness under Swap Contracts) having an aggregate principal amount (includingundrawn committed or available amounts and including amounts owing to all creditors under any combined or syndicated creditarrangement) of more than the Threshold Amount, or (B) fails to observe or perform any other agreement or condition relatingto any such Indebtedness or Guarantee or contained in any instrument or agreement evidencing, securing or relating thereto, orany other event occurs, the effect of which default or other event is to cause, or to permit the holder or holders of suchIndebtedness or the beneficiary or beneficiaries of such Guarantee (or a trustee or agent on behalf of such holder or holders orbeneficiary or beneficiaries) to cause, with the giving of notice if required, such Indebtedness to be demanded or to become dueor to be repurchased, prepaid, defeased or redeemed (automatically or otherwise), or an offer to repurchase, prepay, defease orredeem such Indebtedness to be made, prior to its stated maturity, or such Guarantee to become payable or cash collateral inrespect thereof to be demanded; or (ii) there occurs under any Swap Contract an Early Termination Date (as defined in suchSwap Contract) resulting from (A) any event of default under such Swap Contract as to which any Loan Party or any Subsidiaryis the Defaulting Party (as defined in such Swap Contract) or (B) any Termination Event (as so defined) under such SwapContract as to which any Loan Party or any Subsidiary is an Affected Party (as so defined) and, in either event, the SwapTermination Value owed by such Loan Party or such Subsidiary as a result thereof is greater than the Threshold Amount;subject, however, in the case of both clause (i) and (ii) above, to any applicable grace period or cure period, as well as anyapplicable requirement for notice of default, under the definitive documentation for such Indebtedness; or(f) Insolvency Proceedings, Etc. Any Loan Party or any Subsidiary (other than any Immaterial Subsidiary) institutes orconsents to the institution of any proceeding under any Debtor Relief Law, or makes an assignment for the benefit of creditors;or applies for or consents to the appointment of any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similarofficer for it or for all or any material part of its property; or any receiver, trustee, custodian, conservator, liquidator, rehabilitatoror similar officer is appointed without the application or consent of such Person and the appointment continues undischarged orunstayed for sixty (60) calendar days; or any proceeding under any Debtor Relief Law relating to any such Person or to all orany material part of its property is instituted without the consent of such Person and continues undismissed or unstayed for sixty(60) calendar days, or an order for relief is entered in any such proceeding; or(g) Inability to Pay Debts; Attachment. (i) Any Loan Party or any Subsidiary (other than any Immaterial Subsidiary)becomes unable or admits in writing its inability or fails generally to pay its debts as they become due, or (ii) any writ or warrantof attachment or execution or similar process is issued or levied against all or any material part of the property of any suchPerson and is not released, vacated or fully bonded within thirty (30) days after its issue or levy; or(h) Judgments. There is entered against any Loan Party or any Subsidiary (i) one or more final judgments or orders forthe payment of money in an aggregate amount (as to all such judgments or orders) exceeding the Threshold Amount (to theextent not covered by independent third-party insurance as to which the insurer has been notified of the claim and does notdispute coverage), or (ii) any one or more non-monetary final judgments that have, or could reasonably be expected to have,individually or in the aggregate, a Material Adverse Effect and, in either case, (A) enforcement proceedings are commenced byany creditor upon such judgment or order, or (B) there is a period of thirty (30) consecutive days during which a stay ofenforcement of such judgment, by reason of a pending appeal or otherwise, is not in effect; or(i) ERISA. (i) An ERISA Event occurs with respect to a Pension Plan or Multiemployer Plan which has resulted orcould reasonably be expected to result in liability of any Loan Party under Title IV of ERISA to the Pension Plan, MultiemployerPlan or the PBGC in an aggregate amount in excess of the Threshold Amount, or (ii) either Borrower or any ERISA Affiliatefails to pay when due, after the expiration of any applicable grace period, any installment payment with respect to its withdrawalliability under Section 4201 of ERISA under a Multiemployer Plan in an aggregate amount in excess of the Threshold Amount;or(j) Invalidity of Loan Documents. Any provision of any Loan Document, at any time after its execution and deliveryand for any reason other than as expressly permitted hereunder or thereunder or satisfaction in full of all the Obligations, ceasesto be in full force and effect or ceases to give the Administrative Agent any material part of the Liens purported to be createdthereby; or any Loan Party contests in any manner the validity or enforceability of any provision of any Loan Document; or anyLoan Party denies that it has any or further liability or obligation under any provision of any Loan Document, or purports torevoke, terminate or rescind any Loan Document; or(k) Change of Control. There occurs any Change of Control; or(l) Subordination. In the case of any Subordinated Debt having an aggregate principal amount of more than theThreshold Amount: (i) any of the subordination, standstill, payover and insolvency related provisions of any of theSubordinated Debt Documents in respect of such Subordinated Debt (the “Subordination Provisions”) shall, in whole or in part,terminate, cease to be effective or cease to be legally valid, binding and enforceable against any holder of the applicableSubordinated Debt; or (ii) either Borrower or any other Loan Party shall, directly or indirectly, disavow or contest in any manner(A) the effectiveness, validity or enforceability of any of the Subordination Provisions, (B) that the Subordination Provisionsexist for the benefit of the Administrative Agent and the holders of the Obligations or (C) that all payments of principal of orpremium and interest on the applicable Subordinated Debt, or realized from the liquidation of any property of any Loan Party,shall be subject to any of the Subordination Provisions.8.02 Remedies Upon Event of Default.If any Event of Default occurs and is continuing, the Administrative Agent shall, at the request of, or may, with the consent of,the Required Lenders, take any or all of the following actions:(a) declare the commitment of each Lender to make Loans and any obligation of the L/C Issuer to make L/C CreditExtensions to be terminated, whereupon such commitments and obligation shall be terminated;(b) declare the unpaid principal amount of all outstanding Loans, all interest accrued and unpaid thereon, and all otheramounts owing or payable hereunder or under any other Loan Document to be immediately due and payable, withoutpresentment, demand, protest or other notice of any kind, all of which are hereby expressly waived by the Borrowers;(c) require that the Borrowers Cash Collateralize the L/C Obligations (in an amount equal to the Minimum CollateralAmount with respect thereto); and(d) exercise on behalf of itself, the Lenders and the L/C Issuer all rights and remedies available to it, the Lenders andthe L/C Issuer under the Loan Documents or applicable Law or at equity;provided, however, that upon the occurrence of an actual or deemed entry of an order for relief with respect to the Borrowers under theBankruptcy Code of the United States, the obligation of each Lender to make Loans and any obligation of the L/C Issuer to make L/CCredit Extensions shall automatically terminate, the unpaid principal amount of all outstanding Loans and all interest and other amountsas aforesaid shall automatically become due and payable, and the obligation of the Borrowers to Cash Collateralize the L/C Obligationsas aforesaid shall automatically become effective, in each case without further act of the Administrative Agent or any Lender.8.03 Application of Funds.After the exercise of remedies provided for in Section 8.02 (or after the Loans have automatically become immediately due andpayable and the L/C Obligations have automatically been required to be Cash Collateralized as set forth in the proviso to Section 8.02),any amounts received on account of the Obligations shall, subject to the provisions of Sections 2.14 and 2.15, be applied by theAdministrative Agent in the following order:First, to payment of that portion of the Obligations constituting fees, indemnities, expenses and other amounts (including fees,charges and disbursements of counsel to the Administrative Agent and amounts payable under Article III) payable to the AdministrativeAgent in its capacity as such;Second, to payment of that portion of the Obligations constituting fees, indemnities and other amounts (other than principal,interest and Letter of Credit Fees) payable to the Lenders and the L/C Issuer (including fees, charges and disbursements of counsel tothe respective Lenders and the L/C Issuer and amounts payable under Article III), ratably among them in proportion to the respectiveamounts described in this clause Second payable to them;Third, to payment of that portion of the Obligations constituting accrued and unpaid Letter of Credit Fees and interest on theLoans and L/C Borrowings, ratably among the Lenders and the L/C Issuer in proportion to the respective amounts described in thisclause Third payable to them;Fourth, to (a) payment of that portion of the Obligations constituting unpaid principal of the Loans and L/C Borrowings, (b)payment of Obligations then owing under any Secured Cash Management Agreements and (c) Cash Collateralize that portion of L/CObligations comprised of the aggregate undrawn amount of Letters of Credit, ratably among the Lenders, the L/C Issuer and the CashManagement Banks in proportion to the respective amounts described in this clause Fourth payable to them; andLast, the balance, if any and provided the Facility Termination Date has occurred, to the Borrowers or as otherwise required byLaw.Subject to Sections 2.03(c) and 2.14, amounts used to Cash Collateralize the aggregate undrawn amount of Letters of Creditpursuant to clause Fourth above shall be applied to satisfy drawings under such Letters of Credit as they occur. If any amount remainson deposit as Cash Collateral after all Letters of Credit have either been fully drawn or expired, such remaining amount shall be appliedto the other Obligations, if any, in the order set forth above; and, if no such Obligations remain (other than contingent indemnificationand contingent expense reimbursement obligations for which no claim has been made), such remaining amount shall be released to theLoan Parties.Notwithstanding the foregoing, Obligations arising under Secured Cash Management Agreements shall be excluded from theapplication described above if the Administrative Agent has not received a Secured Party Designation Notice, together with suchsupporting documentation as the Administrative Agent may request, from the applicable Cash Management Bank (unless such CashManagement Bank is the Administrative Agent or an Affiliate thereof). Each Cash Management Bank not a party to this Agreement thathas given the notice contemplated by the preceding sentence shall, by such notice, be deemed to have acknowledged and accepted theappointment of the Administrative Agent pursuant to the terms of Article IX for itself and its Affiliates as if a “Lender” party hereto.ARTICLE IX ADMINISTRATIVE AGENT9.01 Appointment and Authority.Each of the Lenders and the L/C Issuer hereby irrevocably appoints Bank of America to act on its behalf as the AdministrativeAgent hereunder and under the other Loan Documents and authorizes the Administrative Agent to take such actions on its behalf and toexercise such powers as are delegated to the Administrative Agent by the terms hereof or thereof, together with such actions andpowers as are reasonably incidental thereto. Except as provided in the final paragraph of this Section 9.01, the provisions of this Articleare solely for the benefit of the Administrative Agent, the Lenders and the L/C Issuer, and no Loan Party shall have rights as a thirdparty beneficiary of any of such provisions. It is understood and agreed that the use of the term “agent” herein or in any other LoanDocuments (or any other similar term) with reference to the Administrative Agent is not intended to connote any fiduciary or otherimplied (or express) obligations arising under agency doctrine of any applicable Law. Instead such term is used as a matter of marketcustom, and is intended to create or reflect only an administrative relationship between contracting parties.The Administrative Agent shall also act as the “collateral agent” under the Loan Documents, and each of the Lenders (in itscapacities as a Lender, Swingline Lender (if applicable) and potential Cash Management Banks) and the L/C Issuer hereby irrevocablyappoints and authorizes the Administrative Agent to act as the agent of such Lender and the L/C Issuer for purposes of acquiring,holding and enforcing any and all Liens on Collateral granted by any of the Loan Parties to secure any of the Obligations, together withsuch powers and discretion as are reasonably incidental thereto. In this connection, the Administrative Agent, as “collateral agent” andany co-agents, sub-agents and attorneys-in-fact appointed by the Administrative Agent pursuant to Section 9.05 for purposes of holdingor enforcing any Lien on the Collateral (or any portion thereof) granted under the Collateral Documents, or for exercising any rightsand remedies thereunder at the direction of the Administrative Agent, shall be entitled to the benefits of all provisions of this Article IXand Article XI (including Section 11.04(c), as though such co-agents, sub-agents and attorneys-in-fact were the “collateral agent” underthe Loan Documents) as if set forth in full herein with respect thereto.The Loan Parties shall be third party beneficiaries of the following aspects of this Article IX: (i) Section 9.06; (ii) Section 9.10,as it pertains to the authority of the Administrative Agent to make releases or enter into subordination terms as provided therein; and(iii) Section 9.11, as it pertains to any Cash Management Bank not having any right to notice of any action or the right to consent to,direct or object to any action under any of the Loan Documents.9.02 Rights as a Lender.The Person serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender asany other Lender and may exercise the same as though it were not the Administrative Agent and the term “Lender” or “Lenders” shall,unless otherwise expressly indicated or unless the context otherwise requires, include the Person serving as the Administrative Agenthereunder in its individual capacity. Such Person and its Affiliates may accept deposits from, lend money to, own securities of, act asthe financial advisor or in any other advisory capacity for and generally engage in any kind of business with any Loan Party or anySubsidiary or other Affiliate thereof as if such Person were not the Administrative Agent hereunder and without any duty to accounttherefor to the Lenders or to provide notice to or consent of the Lenders with respect thereto.9.03 Exculpatory Provisions.The Administrative Agent shall not have any duties or obligations except those expressly set forth herein and in the other LoanDocuments, and its duties hereunder shall be administrative in nature. Without limiting the generality of the foregoing, theAdministrative Agent and its Related Parties:(a) shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and iscontinuing;(b) shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionaryrights and powers expressly contemplated hereby or by the other Loan Documents that the Administrative Agent is required toexercise as directed in writing by the Required Lenders (or such other number or percentage of the Lenders as shall be expresslyprovided for herein or in the other Loan Documents), provided that the Administrative Agent shall not be required to take anyaction that, in its opinion or the opinion of its counsel, may expose the Administrative Agent to liability or that is contrary to anyLoan Document or applicable Law, including for the avoidance of doubt any action that may be in violation of the automaticstay under any Debtor Relief Law or that may effect a forfeiture, modification or termination of property of a Defaulting Lenderin violation of any Debtor Relief Law; and(c) shall not, except as expressly set forth herein and in the other Loan Documents, have any duty or responsibility todisclose, and shall not be liable for the failure to disclose, any information relating to any Loan Party or any of its Affiliates thatis communicated to or obtained by the Person serving as the Administrative Agent or any of its Affiliates in any capacity.Neither the Administrative Agent nor any of its Related Parties shall be liable for any action taken or not taken by theAdministrative Agent under or in connection with this Agreement or any other Loan Document or the transactions contemplated herebyor thereby (i) with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall benecessary, or as the Administrative Agent shall believe in good faith shall be necessary, under the circumstances as provided inSections 11.01 and 8.02) or (ii) in the absence of its own gross negligence or willful misconduct as determined by a court of competentjurisdiction by final and nonappealable judgment. The Administrative Agent shall be deemed not to have knowledge of any Defaultunless and until notice describing such Default is given in writing to the Administrative Agent by the Borrowers, a Lender or the L/CIssuer.Neither the Administrative Agent nor any of its Related Parties have any duty or obligation to any Lender or participant or anyother Person to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement orany other Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or inconnection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditionsset forth herein or therein or the occurrence of any Default, (iv) the validity, enforceability, effectiveness or genuineness of thisAgreement, any other Loan Document or any other agreement, instrument or document, or the creation, perfection or priority of anyLien purported to be created by the Collateral Documents, (v) the value or the sufficiency of any Collateral or (vi) the satisfaction ofany condition set forth in Article IV or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to theAdministrative Agent.9.04 Reliance by Administrative Agent.The Administrative Agent shall be entitled to rely upon, and shall be fully protected in relying and shall not incur any liabilityfor relying upon, any notice, request, certificate, communication, consent, statement, instrument, document or other writing (includingany electronic message, Internet or intranet website posting or other distribution) believed by it to be genuine and to have been signed,sent or otherwise authenticated by the proper Person. The Administrative Agent also may rely upon any statement made to it orally orby telephone and believed by it to have been made by the proper Person, and shall be fully protected in relying and shall not incur anyliability for relying thereon. In determining compliance with any condition hereunder to the making of a Loan, or the issuance,extension, renewal or increase of a Letter of Credit, that by its terms must be fulfilled to the satisfaction of a Lender or the L/C Issuer,the Administrative Agent may presume that such condition is satisfactory to such Lender or the L/C Issuer unless the AdministrativeAgent shall have received notice to the contrary from such Lender or the L/C Issuer prior to the making of such Loan or the issuance,extension, renewal or increase of such Letter of Credit. The Administrative Agent may consult with legal counsel (who may be counselfor the Loan Parties), independent accountants and other experts selected by it, and shall not be liable for any action taken or not takenby it in accordance with the advice of any such counsel, accountants or experts.9.05 Delegation of Duties.The Administrative Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any otherLoan Document by or through any one or more sub agents appointed by the Administrative Agent. The Administrative Agent and anysuch sub agent may perform any and all of its duties and exercise its rights and powers by or through their respective Related Parties.The exculpatory provisions of this Article shall apply to any such sub agent and to the Related Parties of the Administrative Agent andany such sub agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided forherein as well as activities as Administrative Agent. The Administrative Agent shall not be responsible for the negligence or misconductof any sub-agents except to the extent that a court of competent jurisdiction determines in a final and non appealable judgment that theAdministrative Agent acted with gross negligence or willful misconduct in the selection of such sub-agents.9.06 Resignation of Administrative Agent.(a) The Administrative Agent may at any time give notice of its resignation to the Lenders, the L/C Issuer and theBorrowers. Upon receipt of any such notice of resignation, the Required Lenders shall have the right, with the written consent ofthe Borrowers (not to be unreasonably withheld) so long as no Event of Default has occurred and is continuing, to appoint asuccessor, which shall be a bank with an office in the United States, or an Affiliate of any such bank with an office in the UnitedStates. If no such successor shall have been so appointed by the Required Lenders and shall have accepted such appointmentwithin thirty (30) days after the retiring Administrative Agent gives notice of its resignation (or such earlier day as shall beagreed by the Required Lenders) (the “Resignation Effective Date”), then the retiring Administrative Agent may (but shall notbe obligated to) on behalf of the Lenders and the L/C Issuer, appoint a successor Administrative Agent meeting thequalifications set forth above, provided that in no event shall any such successor Administrative Agent be a Defaulting Lender.Whether or not a successor has been appointed, such resignation shall become effective in accordance with such notice on theResignation Effective Date.(b) If the Person serving as Administrative Agent is a Defaulting Lender pursuant to clause (d) of the definition thereof,the Required Lenders may, to the extent permitted by applicable Law, by notice in writing to the Borrowers and such Personremove such Person as Administrative Agent and, in consultation with the Borrowers, appoint a successor. If no such successorshall have been so appointed by the Required Lenders and shall have accepted such appointment within thirty (30) days (orsuch earlier day as shall be agreed by the Required Lenders) (the “Removal Effective Date”), then such removal shallnonetheless become effective in accordance with such notice on the Removal Effective Date.(c) With effect from the Resignation Effective Date or the Removal Effective Date (as applicable) (i) the retiring orremoved Administrative Agent shall be discharged from its duties and obligations hereunder and under the other LoanDocuments (except that in the case of any collateral security held by the Administrative Agent on behalf of the Lenders or theL/C Issuer under any of the Loan Documents, the retiring or removed Administrative Agent shall continue to hold suchcollateral security until such time as a successor Administrative Agent is appointed) and (ii) except for any indemnity paymentsor other amounts then owed to the retiring or removed Administrative Agent, all payments, communications and determinationsprovided to be made by, to or through the Administrative Agent shall instead be made by or to each Lender and the L/C Issuerdirectly, until such time, if any, as the Required Lenders appoint a successor Administrative Agent as provided for above. Uponthe acceptance of a successor’s appointment as Administrative Agent hereunder, such successor shall succeed to and becomevested with all of the rights, powers, privileges and duties of the retiring (or removed) Administrative Agent (other than asprovided in Section 3.01(g) and other than any rights to indemnity payments or other amounts owed to the retiring or removedAdministrative Agent as of the Resignation Effective Date or the Removal Effective Date, as applicable), and the retiring orremoved Administrative Agent shall be discharged from all of its duties and obligations hereunder or under the other LoanDocuments (if not already discharged therefrom as provided above in this Section). The fees payable by the Borrowers to asuccessor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between theBorrowers and such successor. After the retiring or removed Administrative Agent’s resignation or removal hereunder andunder the other Loan Documents, the provisions of this Article and Section 11.04 shall continue in effect for the benefit of suchretiring or removed Administrative Agent, its sub agents and their respective Related Parties in respect of any actions taken oromitted to be taken by any of them (i) while the retiring or removed Administrative Agent was acting as Administrative Agentand (ii) after such resignation or removal for as long as any of them continues to act in any capacity hereunder or under theother Loan Documents, including (A) acting as collateral agent or otherwise holding any collateral security on behalf of any ofthe Lenders and (B) in respect of any actions taken in connection with transferring the agency to any successor AdministrativeAgent.(d) Any resignation by or removal of Bank of America as Administrative Agent pursuant to this Section shall alsoconstitute its resignation as L/C Issuer and Swingline Lender. If Bank of America resigns as an L/C Issuer, it shall retain all therights, powers, privileges and duties of the L/C Issuer hereunder with respect to all Letters of Credit outstanding as of theeffective date of its resignation as L/C Issuer and all L/C Obligations with respect thereto, including the right to require theLenders to make Base Rate Loans or fund risk participations in Unreimbursed Amounts pursuant to Section 2.03(c). If Bank ofAmerica resigns as Swingline Lender, it shall retain all the rights of the Swingline Lender provided for hereunder with respect toSwingline Loans made by it and outstanding as of the effective date of such resignation, including the right to require theLenders to make Base Rate Loans or fund risk participations in outstanding Swingline Loans pursuant to Section 2.04(c). Uponthe appointment by the Borrowers of a successor L/C Issuer or Swingline Lender hereunder (which successor shall in all casesbe a Lender other than a Defaulting Lender), (i) such successor shall succeed to and become vested with all of the rights,powers, privileges and duties of the retiring L/C Issuer or Swingline Lender, as applicable, (ii) the retiring L/C Issuer andSwingline Lender shall be discharged from all of their respective duties and obligations hereunder or under the other LoanDocuments and (iii) the successor L/C Issuer shall issue letters of credit in substitution for the Letters of Credit, if any,outstanding at the time of such succession or make other arrangements satisfactory to Bank of America to effectively assumethe obligations of Bank of America with respect to such Letters of Credit.9.07 Non-Reliance on Administrative Agent and Other Lenders.Each Lender and the L/C Issuer acknowledges that it has, independently and without reliance upon the Administrative Agent orany other Lender or any of their Related Parties and based on such documents and information as it has deemed appropriate, made itsown credit analysis and decision to enter into this Agreement. Each Lender and the L/C Issuer also acknowledges that it will,independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based onsuch documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or nottaking action under or based upon this Agreement, any other Loan Document or any related agreement or any document furnishedhereunder or thereunder.9.08 No Other Duties; Etc.Anything herein to the contrary notwithstanding, none of the bookrunners, arrangers, syndication agents, documentation agentsor co-agents shall have any powers, duties or responsibilities under this Agreement or any of the other Loan Documents, except in itscapacity, as applicable, as the Administrative Agent, a Lender or the L/C Issuer hereunder.9.09 Administrative Agent May File Proofs of Claim; Credit Bidding.In case of the pendency of any proceeding under any Debtor Relief Law or any other judicial proceeding relative to any LoanParty, the Administrative Agent (irrespective of whether the principal of any Loan or L/C Obligation shall then be due and payable asherein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand onthe Borrowers) shall be entitled and empowered, by intervention in such proceeding or otherwise:(a) to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of theLoans, L/C Obligations and all other Obligations that are owing and unpaid and to file such other documents as may benecessary or advisable in order to have the claims of the Lenders, the L/C Issuer and the Administrative Agent (including anyclaim for the reasonable compensation, expenses, disbursements and advances of the Lenders, the L/C Issuer and theAdministrative Agent and their respective agents and counsel and all other amounts due the Lenders, the L/C Issuer and theAdministrative Agent under Sections 2.03(h), 2.03(i), 2.09 and 11.04) allowed in such judicial proceeding; and(b) to collect and receive any monies or other property payable or deliverable on any such claims and to distribute thesame;and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is herebyauthorized by each Lender and the L/C Issuer to make such payments to the Administrative Agent and, in the event that theAdministrative Agent shall consent to the making of such payments directly to the Lenders and the L/C Issuer, to pay to theAdministrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the AdministrativeAgent and its agents and counsel, and any other amounts due the Administrative Agent under Sections 2.09 and 11.04.Nothing contained herein shall be deemed to authorize the Administrative Agent to authorize or consent to or accept or adopton behalf of any Lender or the L/C Issuer any plan of reorganization, arrangement, adjustment or composition affecting the Obligationsor the rights of any Lender or the L/C Issuer to authorize the Administrative Agent to vote in respect of the claim of any Lender or theL/C Issuer in any such proceeding.The holders of the Obligations hereby irrevocably authorize the Administrative Agent, at the direction of the Required Lenders,to credit bid all or any portion of the Obligations (including accepting some or all of the Collateral in satisfaction of some or all of theObligations pursuant to a deed in lieu of foreclosure or otherwise) and in such manner purchase (either directly or through one or moreacquisition vehicles) all or any portion of the Collateral (a) at any sale thereof conducted under the provisions of the Bankruptcy Codeof the United States, including under Sections 363, 1123 or 1129 of the Bankruptcy Code of the United States, or any similar Laws inany other jurisdictions to which a Loan Party is subject, (b) at any other sale or foreclosure or acceptance of collateral in lieu of debtconducted by (or with the consent or at the direction of) the Administrative Agent (whether by judicial action or otherwise) inaccordance with any applicable Law. In connection with any such credit bid and purchase, the Obligations owed to the holders thereofshall be entitled to be, and shall be, credit bid on a ratable basis (with Obligations with respect to contingent or unliquidated claimsreceiving contingent interests in the acquired assets on a ratable basis that would vest upon the liquidation of such claims in an amountproportional to the liquidated portion of the contingent claim amount used in allocating the contingent interests) in the asset or assets sopurchased (or in the Equity Interests or debt instruments of the acquisition vehicle or vehicles that are used to consummate suchpurchase). In connection with any such bid (i) the Administrative Agent shall be authorized to form one or more acquisition vehicles tomake a bid, (ii) to adopt documents providing for the governance of the acquisition vehicle or vehicles (provided that any actions bythe Administrative Agent with respect to such acquisition vehicle or vehicles, including any disposition of the assets or Equity Intereststhereof shall be governed, directly or indirectly, by the vote of the Required Lenders, irrespective of the termination of this Agreementand without giving effect to the limitations on actions by the Required Lenders contained in clauses (a)(i) through (a)(vi) of Section11.01), and (ii) to the extent that Obligations that are assigned to an acquisition vehicle are not used to acquire Collateral for any reason(as a result of another bid being higher or better, because the amount of Obligations assigned to the acquisition vehicle exceeds theamount of debt credit bid by the acquisition vehicle or otherwise), such Obligations shall automatically be reassigned to the Lenders prorata and the Equity Interests and/or debt instruments issued by any acquisition vehicle on account of the Obligations that had beenassigned to the acquisition vehicle shall automatically be cancelled, without the need for any Lender or any acquisition vehicle to takeany further action.9.10 Collateral and Guaranty Matters.Without limiting the provisions of Section 9.09, each of the Lenders (including in its capacity as a potential Cash ManagementBank) and the L/C Issuer irrevocably authorize the Administrative Agent, at its option and in its discretion,(a) to release any Lien on any property granted to or held by the Administrative Agent under any Loan Document (i)upon the Facility Termination Date, (ii) that is sold or otherwise disposed of as part of or in connection with any sale or otherdisposition permitted hereunder or under any other Loan Document or any Recovery Event, (iii) whenever such releaseotherwise is required under this Agreement or any other Loan Document or (iv) as approved in accordance with Section 11.01;(b) to subordinate any Lien on any property granted to or held by the Administrative Agent under any Loan Documentto the holder of any Lien on such property that is permitted by Section 7.01(i); and(c) to release any Guarantor from its obligations under the Guaranty if such Person ceases to be a Subsidiary as a resultof a transaction permitted under the Loan Documents.Upon request by the Administrative Agent at any time, the Required Lenders will confirm in writing the Administrative Agent’sauthority to release or subordinate its interest in particular types or items of property, or to release any Guarantor from its obligationsunder the Guaranty, pursuant to this Section 9.10.The Administrative Agent shall not be responsible for or have a duty to ascertain or inquire into any representation or warrantyregarding the existence, value or collectability of the Collateral, the existence, priority or perfection of the Administrative Agent’s Lienthereon, or any certificate prepared by any Loan Party in connection therewith, nor shall the Administrative Agent be responsible orliable to the Lenders for any failure to monitor or maintain any portion of the Collateral.9.11 Secured Cash Management Agreements.Except as otherwise expressly set forth herein, no Cash Management Bank that obtains the benefit of Section 8.03, the Guarantyor any Collateral by virtue of the provisions hereof or any Collateral Document shall have any right to notice of any action or to consentto, direct or object to any action hereunder or under any other Loan Document or otherwise in respect of the Collateral (including therelease or impairment of any Collateral) (or to notice of or to consent to any amendment, waiver or modification of the provisionshereof or of the Guaranty or any Collateral Document) other than in its capacity as a Lender and, in such case, only to the extentexpressly provided in the Loan Documents. Notwithstanding any other provision of this Article IX to the contrary, the AdministrativeAgent shall not be required to verify the payment of, or that other satisfactory arrangements have been made with respect to,Obligations arising under Secured Cash Management Agreements except to the extent expressly provided herein and unless theAdministrative Agent has received a Secured Party Designation Notice of such Obligations, together with such supportingdocumentation as the Administrative Agent may request, from the applicable Cash Management Bank. The Administrative Agent shallnot be required to verify the payment of, or that other satisfactory arrangements have been made with respect to, Obligations arisingunder Secured Cash Management Agreements in the case of the Facility Termination Date.9.12 ERISA Matters.(a) Each Lender (x) represents and warrants, as of the date such Person became a Lender party hereto, to, and (y)covenants, from the date such Person became a Lender party hereto to the date such Person ceases being a Lender party hereto,for the benefit of, the Administrative Agent, the Arranger and their respective Affiliates, and not, for the avoidance of doubt, toor for the benefit of either Borrower or any other Loan Party, that at least one of the following is and will be true:(i) such Lender is not using “plan assets” (within the meaning of 29 CFR § 2510.3-101, as modified by Section3(42) of ERISA) of one or more Benefit Plans in connection with the Loans, the Letters of Credit or the RevolvingCommitments,(ii) the transaction exemption set forth in one or more PTEs, such as PTE 84-14 (a class exemption for certaintransactions determined by independent qualified professional asset managers), PTE 95-60 (a class exemption for certaintransactions involving insurance company general accounts), PTE 90-1 (a class exemption for certain transactionsinvolving insurance company pooled separate accounts), PTE 91-38 (a class exemption for certain transactionsinvolving bank collective investment funds) or PTE 96-23 (a class exemption for certain transactions determined by in-house asset managers), is applicable with respect to such Lender’s entrance into, participation in, administration of andperformance of the Loans, the Letters of Credit, the Revolving Commitments and this Agreement,(iii) (A) such Lender is an investment fund managed by a “Qualified Professional Asset Manager” (within themeaning of Part VI of PTE 84-14), (B) such Qualified Professional Asset Manager made the investment decision onbehalf of such Lender to enter into, participate in, administer and perform the Loans, the Letters of Credit, the RevolvingCommitments and this Agreement, (C) the entrance into, participation in, administration of and performance of theLoans, the Letters of Credit, the Revolving Commitments and this Agreement satisfies the requirements of sub-sections(b) through (g) of Part I of PTE 84-14 and (D) to the best knowledge of such Lender, the requirements of subsection (a)of Part I of PTE 84-14 are satisfied with respect to such Lender’s entrance into, participation in, administration of andperformance of the Loans, the Letters of Credit, the Revolving Commitments and this Agreement, or(iv) such other representation, warranty and covenant as may be agreed in writing between the AdministrativeAgent, in its sole discretion, and such Lender.(b) In addition, unless subclause (i) in the immediately preceding clause (a) is true with respect to a Lender or suchLender has not provided another representation, warranty and covenant as provided in subclause (iv) in the immediatelypreceding clause (a), such Lender further (x) represents and warrants, as of the date such Person became a Lender party hereto,to, and (y) covenants, from the date such Person became a Lender party hereto to the date such Person ceases being a Lenderparty hereto, for the benefit of, the Administrative Agent, the Arranger and their respective Affiliates, and not, for the avoidanceof doubt, to or for the benefit of either Borrower or any other Loan Party, that:(i) none of the Administrative Agent, the Arranger or any of their respective Affiliates is a fiduciary withrespect to the assets of such Lender (including in connection with the reservation or exercise of any rights by theAdministrative Agent under this Agreement, any Loan Document or any documents related to hereto or thereto),(ii) the Person making the investment decision on behalf of such Lender with respect to the entrance into,participation in, administration of and performance of the Loans, the Letters of Credit, the Revolving Commitments andthis Agreement is independent (within the meaning of 29 CFR § 2510.3-21) and is a bank, an insurance carrier, aninvestment adviser, a broker-dealer or other person that holds, or has under management or control, total assets of atleast $50 million, in each case as described in 29 CFR § 2510.3-21(c)(1)(i)(A)-(E),(iii) the Person making the investment decision on behalf of such Lender with respect to the entrance into,participation in, administration of and performance of the Loans, the Letters of Credit, the Revolving Commitments andthis Agreement is capable of evaluating investment risks independently, both in general and with regard to particulartransactions and investment strategies (including in respect of the Obligations),(iv) the Person making the investment decision on behalf of such Lender with respect to the entrance into,participation in, administration of and performance of the Loans, the Letters of Credit, the Revolving Commitments andthis Agreement is a fiduciary under ERISA or the Internal Revenue Code, or both, with respect to the Loans, the Lettersof Credit, the Revolving Commitments and this Agreement and is responsible for exercising independent judgment inevaluating the transactions hereunder, and(v) no fee or other compensation is being paid directly to the Administrative Agent, the Arranger or any theirrespective Affiliates for investment advice (as opposed to other services) in connection with the Loans, the Letters ofCredit, the Revolving Commitments or this Agreement.(c) The Administrative Agent and the Arranger hereby inform the Lenders that each such Person is not undertaking toprovide impartial investment advice, or to give advice in a fiduciary capacity, in connection with the transactions contemplatedhereby, and that such Person has a financial interest in the transactions contemplated hereby in that such Person or an Affiliatethereof (i) may receive interest or other payments with respect to the Loans, the Letters of Credit, the Revolving Commitmentsand this Agreement, (ii) may recognize a gain if it extended the Loans, the Letters of Credit or the Revolving Commitments foran amount less than the amount being paid for an interest in the Loans, the Letters of Credit or the Revolving Commitments bysuch Lender or (iii) may receive fees or other payments in connection with the transactions contemplated hereby, the LoanDocuments or otherwise, including structuring fees, commitment fees, arrangement fees, facility fees, upfront fees, underwritingfees, ticking fees, agency fees, administrative agent or collateral agent fees, utilization fees, minimum usage fees, letter of creditfees, fronting fees, deal-away or alternate transaction fees, amendment fees, processing fees, term out premiums, banker’sacceptance fees, breakage or other early termination fees or fees similar to the foregoing.ARTICLE X GUARANTY10.01 The Guaranty.Each of the Guarantors hereby jointly and severally guarantees to each Lender, the L/C Issuer and each other holder ofObligations as hereinafter provided, as primary obligor and not as surety, the prompt payment of the Obligations in full when due(whether at stated maturity, as a mandatory prepayment, by acceleration, as a mandatory cash collateralization or otherwise) strictly inaccordance with the terms thereof. The Guarantors hereby further agree that if any of the Obligations are not paid in full when due(whether at stated maturity, as a mandatory prepayment, by acceleration, as a mandatory cash collateralization or otherwise), theGuarantors will, jointly and severally, promptly pay the same, without any demand or notice whatsoever, and that in the case of anyextension of time of payment or renewal of any of the Obligations, the same will be promptly paid in full when due (whether atextended maturity, as a mandatory prepayment, by acceleration, as a mandatory cash collateralization or otherwise) in accordance withthe terms of such extension or renewal.Notwithstanding any provision to the contrary contained herein or in any other of the Loan Documents or the other documentsrelating to the Obligations, the obligations of each Guarantor under this Agreement and the other Loan Documents shall not exceed anaggregate amount equal to the largest amount that would not render such obligations subject to avoidance under applicable DebtorRelief Laws.10.02 Obligations Unconditional.The obligations of the Guarantors under Section 10.01 are joint and several, absolute and unconditional, irrespective of thevalue, genuineness, validity, regularity or enforceability of any of the Loan Documents or other documents relating to the Obligations,or any substitution, release, impairment or exchange of any other guarantee of or security for any of the Obligations, and, to the fullestextent permitted by applicable Law, irrespective of any other circumstance whatsoever which might otherwise constitute a legal orequitable discharge or defense (other than defense of payment in full) of a surety or guarantor, it being the intent of this Section 10.02that the obligations of the Guarantors hereunder shall be absolute and unconditional under any and all circumstances. Each Guarantoragrees that such Guarantor shall have no right of subrogation, indemnity, reimbursement or contribution against either Borrower or anyother Loan Party for amounts paid under this Article X until such time as the Obligations have been paid in full and the RevolvingCommitments have expired or terminated. Without limiting the generality of the foregoing, it is agreed that, to the fullest extentpermitted by Law, the occurrence of any one or more of the following shall not alter or impair the liability of any Guarantor hereunder,which shall remain absolute and unconditional as described above:(a) at any time or from time to time, without notice to any Guarantor, the time for any performance of or compliancewith any of the Obligations shall be extended, or such performance or compliance shall be waived;(b) any of the acts mentioned in any of the provisions of any of the Loan Documents or other documents relating to theObligations shall be done or omitted;(c) the maturity of any of the Obligations shall be accelerated, or any of the Obligations shall be modified,supplemented or amended in any respect, or any right under any of the Loan Documents or other documents relating to theObligations shall be waived or any other guarantee of any of the Obligations or any security therefor shall be released, impairedor exchanged in whole or in part or otherwise dealt with;(d) any Lien granted to, or in favor of, the Administrative Agent or any other holder of the Obligations as security forany of the Obligations shall fail to attach or be perfected; or(e) any of the Obligations shall be determined to be void or voidable (including for the benefit of any creditor of anyGuarantor) or shall be subordinated to the claims of any Person (including any creditor of any Guarantor).With respect to its obligations hereunder, each Guarantor hereby expressly waives diligence, presentment, demand of payment,protest and all notices whatsoever, and any requirement that the Administrative Agent or any other holder of the Obligations exhaustany right, power or remedy or proceed against any Person under any of the Loan Documents or any other document relating to theObligations, or against any other Person under any other guarantee of, or security for, any of the Obligations.For the avoidance of doubt, the waivers by each Loan Party under this Article X apply for purposes of the enforceability of theguarantee or/and suretyship obligations of such Loan Party under this Article X only.10.03 Reinstatement.The obligations of each Guarantor under this Article X shall be automatically reinstated if and to the extent that for any reasonany payment by or on behalf of any Person in respect of the Obligations is rescinded or must be otherwise restored by any holder ofany of the Obligations, whether as a result of any Debtor Relief Law or otherwise, and each Guarantor agrees that it will indemnify theAdministrative Agent and each other holder of the Obligations on demand for all reasonable costs and expenses (including thereasonable fees, charges and disbursements of counsel) incurred by the Administrative Agent or such holder of the Obligations inconnection with such rescission or restoration, including any such costs and expenses incurred in defending against any claim allegingthat such payment constituted a preference, fraudulent transfer or similar payment under any Debtor Relief Law.10.04 Certain Additional Waivers.Each Guarantor agrees that such Guarantor shall have no right of recourse to security for the Obligations, except through theexercise of rights of subrogation pursuant to Section 10.02 and through the exercise of rights of contribution pursuant to Section 10.06.10.05 Remedies.The Guarantors agree that, to the fullest extent permitted by Law, as between the Guarantors, on the one hand, and theAdministrative Agent and the other holders of the Obligations, on the other hand, the Obligations may be declared to be forthwith dueand payable as specified in Section 8.02 (and shall be deemed to have become automatically due and payable in the circumstancesspecified in Section 8.02) for purposes of Section 10.01 notwithstanding any stay, injunction or other prohibition preventing suchdeclaration (or preventing the Obligations from becoming automatically due and payable) as against any other Person and that, in theevent of such declaration (or the Obligations being deemed to have become automatically due and payable), the Obligations (whetheror not due and payable by any other Person) shall forthwith become due and payable by the Guarantors for purposes of Section 10.01.The Guarantors acknowledge and agree that their obligations hereunder are secured in accordance with the terms of the CollateralDocuments and that the holders of the Obligations may exercise their remedies thereunder in accordance with the terms thereof.10.06 Rights of Contribution.The Guarantors hereby agree as among themselves that, if any Guarantor shall make an Excess Payment (as defined below),such Guarantor shall have a right of contribution from each other Guarantor in an amount equal to such other Guarantor’s ContributionShare (as defined below) of such Excess Payment. The payment obligations of any Guarantor under this Section 10.06 shall besubordinate and subject in right of payment to the Obligations until such time as the Obligations have been paid-in-full and theRevolving Commitments have terminated, and none of the Guarantors shall exercise any right or remedy under this Section 10.06against any other Guarantor until such Obligations have been paid-in-full and the Revolving Commitments have terminated. Forpurposes of this Section 10.06, (a) “Excess Payment” shall mean the amount paid by any Guarantor in excess of its Ratable Share ofany Obligations; (b) “Ratable Share” shall mean, for any Guarantor in respect of any payment of Obligations, the ratio (expressed as apercentage) as of the date of such payment of Obligations of (i) the amount by which the aggregate present fair salable value of all of itsassets and properties exceeds the amount of all debts and liabilities of such Guarantor (including contingent, subordinated, unmatured,and unliquidated liabilities, but excluding the obligations of such Guarantor hereunder) to (ii) the amount by which the aggregatepresent fair salable value of all assets and other properties of all of the Loan Parties exceeds the amount of all of the debts and liabilities(including contingent, subordinated, unmatured, and unliquidated liabilities, but excluding the obligations of the Loan Partieshereunder) of the Loan Parties; provided, however, that, for purposes of calculating the Ratable Shares of the Guarantors in respect ofany payment of Obligations, any Guarantor that became a Guarantor subsequent to the date of any such payment shall be deemed tohave been a Guarantor on the date of such payment and the financial information for such Guarantor as of the date such Guarantorbecame a Guarantor shall be utilized for such Guarantor in connection with such payment; and (c) “Contribution Share” shall mean, forany Guarantor in respect of any Excess Payment made by any other Guarantor, the ratio (expressed as a percentage) as of the date ofsuch Excess Payment of (i) the amount by which the aggregate present fair salable value of all of its assets and properties exceeds theamount of all debts and liabilities of such Guarantor (including contingent, subordinated, unmatured, and unliquidated liabilities, butexcluding the obligations of such Guarantor hereunder) to (ii) the amount by which the aggregate present fair salable value of all assetsand other properties of the Loan Parties other than the maker of such Excess Payment exceeds the amount of all of the debts andliabilities (including contingent, subordinated, unmatured, and unliquidated liabilities, but excluding the obligations of the Loan Parties)of the Loan Parties other than the maker of such Excess Payment; provided, however, that, for purposes of calculating the ContributionShares of the Guarantors in respect of any Excess Payment, any Guarantor that became a Guarantor subsequent to the date of any suchExcess Payment shall be deemed to have been a Guarantor on the date of such Excess Payment and the financial information for suchGuarantor as of the date such Guarantor became a Guarantor shall be utilized for such Guarantor in connection with such ExcessPayment. This Section 10.06 shall not be deemed to affect any right of subrogation, indemnity, reimbursement or contribution that anyGuarantor may have under Law against either Borrower in respect of any payment of Obligations.10.07 Guarantee of Payment; Continuing Guarantee.The guarantee in this Article X is a guaranty of payment and not of collection, is a continuing guarantee, and shall apply to theObligations whenever arising.ARTICLE XI MISCELLANEOUS11.01 Amendments, Etc.No amendment or waiver of any provision of this Agreement or any other Loan Document, and no consent to any departure byany Loan Party or any other Person therefrom, shall be effective unless in writing signed by the Required Lenders (or by theAdministrative Agent with the consent of the Required Lenders) and the Borrowers or the applicable Loan Party, as the case may be,and acknowledged by the Administrative Agent, and each such waiver or consent shall be effective only in the specific instance and forthe specific purpose for which given; provided, however, that(a) no such amendment, waiver or consent shall:(i) extend or increase the Revolving Commitment of any Lender (or reinstate any Revolving Commitmentterminated pursuant to Section 8.02) without the written consent of such Lender (it being understood and agreed that awaiver of any condition precedent set forth in Section 4.02 or of any Default or a mandatory reduction in RevolvingCommitments is not considered an extension or increase in Revolving Commitments of any Lender);(ii) postpone any date fixed by this Agreement or any other Loan Document for any payment (excludingmandatory prepayments) of principal, interest, fees or other amounts due to the Lenders (or any of them) or anyscheduled reduction of the Revolving Commitments hereunder or under any other Loan Document without the writtenconsent of each Lender entitled to receive such payment or whose Revolving Commitments are to be reduced;(iii) reduce the principal of, or the rate of interest specified herein on, any Loan or L/C Borrowing, or (subjectto clause (i) of the final proviso of this first sentence of this Section 11.01) any fees or other amounts payable hereunderor under any other Loan Document without the written consent of each Lender entitled to receive such amount;provided, however, that (A) only the consent of the Required Lenders shall be necessary to amend the definition of“Default Rate” or to waive any obligation of the Borrowers to pay interest or Letter of Credit Fees at the Default Rateand (B) an amendment, waiver or consent to any financial covenant hereunder (or any defined term used therein) evenif the effect of such amendment would be to reduce the rate of interest on any Loan or L/C Borrowing or to reduce anyfee payable hereunder shall not be deemed to be a reduction of the principal of, or the rate of interest specified hereinon, any Loan or L/C Borrowing, or any fees or other amounts payable hereunder or under any other Loan Document;(iv) change Section 8.03 in a manner that would alter the pro rata sharing of payments required thereby withoutthe written consent of each Lender directly and adversely affected thereby;(v) change any provision of this Section 11.01(a) or the definition of “Required Lenders” without the writtenconsent of each Lender directly and adversely affected thereby;(vi) except (A) in connection with a Disposition to the extent permitted under Section 7.05, (B) upon theoccurrence of the Facility Termination Date or (C) to the extent such release is permitted pursuant to Section 9.10 (inwhich case such release may be made by the Administrative Agent acting alone), release all or substantially all of theCollateral without the written consent of each Lender whose Obligations are secured by such Collateral;(vii) release either Borrower without the consent of each Lender, or, except in connection with a transactionpermitted under Section 7.04 or Section 7.05, all or substantially all of the value of the Guaranty without the writtenconsent of each Lender whose Obligations are guarantied thereby, except to the extent such release is permittedpursuant to Section 9.10 (in which case such release may be made by the Administrative Agent acting alone);(viii) amend the definition of “Alternative Currency” without the written consent of each Lender and L/C Issuerobligated to make Credit Extensions in Alternative Currencies; or(b) unless also signed by the L/C Issuer, no amendment, waiver or consent shall affect the rights or duties of the L/CIssuer under this Agreement or any Issuer Document relating to any Letter of Credit issued or to be issued by it;(c) unless also signed by the Swingline Lender, no amendment, waiver or consent shall affect the rights or duties of theSwingline Lender under this Agreement; and(d) unless also signed by the Administrative Agent, no amendment, waiver or consent shall affect the rights or duties ofthe Administrative Agent under this Agreement or any other Loan Document;provided, further, that notwithstanding anything to the contrary herein, (i) the Fee Letter may be amended, or rights or privilegesthereunder waived, in a writing executed only by the parties thereto, (ii) only the consent of the Borrowers and the Lenders and L/CIssuer that have agreed to issue such Credit Extensions in the applicable Alternative Currency shall be necessary to amend the definitionof “Eurocurrency Rate” to provide for the addition of a replacement interest rate with respect to such Alternative Currency, (iii) eachLender is entitled to vote as such Lender sees fit on any bankruptcy reorganization plan that affects the Loans, and each Lenderacknowledges that the provisions of Section 1126(c) of the Bankruptcy Code of the United States supersedes the unanimous consentprovisions set forth herein, (iv) the Required Lenders shall determine whether or not to allow a Loan Party to use cash collateral in thecontext of a bankruptcy or insolvency proceeding and such determination shall be binding on all of the Lenders, (v) the AdministrativeAgent and the Borrowers may make amendments contemplated by Section 3.07 and (vi) each Incremental Facility Amendment shall beeffective if signed only by the Administrative Agent, the Borrowers and the Lenders providing the applicable Incremental RevolvingCommitments.No Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder (and anyamendment, waiver or consent which by its terms requires the consent of all Lenders or each affected Lender may be effected with theconsent of the applicable Lenders other than Defaulting Lenders), except that (x) the Revolving Commitment of such Defaulting Lendermay not be increased or extended without the consent of such Lender and (y) any waiver, amendment or modification requiring theconsent of all Lenders or each affected Lender that by its terms affects such Defaulting Lender disproportionately adversely relative toother affected Lenders shall require the consent of such Defaulting Lender.Notwithstanding anything to the contrary herein, this Agreement may be amended and restated without the consent of any Lender (butwith the consent of the Borrowers and the Administrative Agent) if, upon giving effect to such amendment and restatement, suchLender shall no longer be a party to this Agreement (as so amended and restated), the Revolving Commitments of such Lender shallhave terminated, such Lender shall have no other commitment or other obligation hereunder and shall have been paid in full allprincipal, interest and other amounts owing to it or accrued for its account under this Agreement.Notwithstanding any provision herein to the contrary the Administrative Agent and the Borrowers may amend, modify or supplementthis Agreement or any other Loan Document to cure or correct administrative errors or omissions, any ambiguity, omission, defect orinconsistency or to effect administrative changes or to extend an existing Lien over additional property, and such amendment shallbecome effective without any further consent of any other party to such Loan Document so long as (i) such amendment, modificationor supplement does not adversely affect the rights of any Lender or other holder of Obligations in any material respect and (ii) theLenders shall have received at least five (5) Business Days’ prior written notice thereof and the Administrative Agent shall not havereceived, within five (5) Business Days of the date of such notice to the Lenders, a written notice from the Required Lenders stating thatthe Required Lenders object to such amendment.11.02 Notices; Effectiveness; Electronic Communications.(a) Notices Generally. Except in the case of notices and other communications expressly permitted to be given bytelephone (and except as provided in subsection (b) below), all notices and other communications provided for herein shall bein writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by facsimileor e-mail as follows, and all notices and other communications expressly permitted hereunder to be given by telephone shall bemade to the applicable telephone number, as follows:(i) if to any Loan Party, the Administrative Agent, the L/C Issuer or the Swingline Lender, to the address,facsimile number, e-mail address or telephone number specified for such Person on Schedule 11.02; and(ii) if to any other Lender, to the address, facsimile number, e-mail address or telephone number specified in itsAdministrative Questionnaire (including, as appropriate, notices delivered solely to the Person designated by a Lenderon its Administrative Questionnaire then in effect for the delivery of notices that may contain material non-publicinformation relating to the Borrowers).Notices and other communications sent by hand or overnight courier service, or mailed by certified or registered mail, shall bedeemed to have been given when received; notices and other communications sent by facsimile shall be deemed to have been givenwhen sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the openingof business on the next Business Day for the recipient). Notices and other communications delivered through electroniccommunications to the extent provided in subsection (b) below, shall be effective as provided in such subsection (b).(b) Electronic Communications. Notices and other communications to the Administrative Agent, the Lenders and theL/C Issuer hereunder may be delivered or furnished by electronic communication (including e mail, FpML messaging, andInternet or intranet websites) pursuant to procedures approved by the Administrative Agent, provided that the foregoing shallnot apply to notices to any Lender or the L/C Issuer pursuant to Article II if such Lender or the L/C Issuer, as applicable, hasnotified the Administrative Agent that it is incapable of receiving notices under such Article by electronic communication. TheAdministrative Agent, the Swingline Lender, the L/C Issuer or PRGX may each, in its discretion, agree to accept notices andother communications to it hereunder by electronic communications pursuant to procedures approved by it, provided thatapproval of such procedures may be limited to particular notices or communications.Unless the Administrative Agent and the Borrowers otherwise agree in writing, (i) notices and other communications sent to ane-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the“return receipt requested” function, as available, return e-mail or other written acknowledgement) and (ii) notices or communicationsposted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e-mailaddress as described in the foregoing clause (i) of notification that such notice or communication is available and identifying thewebsite address therefor; provided that, for both clauses (i) and (ii), if such notice, e-mail or other communication is not sent during thenormal business hours of the recipient, such notice, e-mail or communication shall be deemed to have been sent at the opening ofbusiness on the next business day for the recipient.(c) The Platform. THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.” THE AGENT PARTIES (ASDEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE BORROWER MATERIALS ORTHE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS IN OR OMISSIONSFROM THE BORROWER MATERIALS. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY,INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BYANY AGENT PARTY IN CONNECTION WITH THE BORROWER MATERIALS OR THE PLATFORM. In no event shall theAdministrative Agent or any of its Related Parties (collectively, the “Agent Parties”) have any liability to either Borrower, anyLender, the L/C Issuer or any other Person for losses, claims, damages, liabilities or expenses of any kind (whether in tort,contract or otherwise) arising out of any Loan Party’s or the Administrative Agent’s transmission of Borrower Materials ornotices through the Platform, any other electronic platform or electronic messaging service, or through the Internet.(d) Change of Address, Etc. Each of the Borrowers, the Administrative Agent, the L/C Issuer and the Swingline Lendermay change its address, facsimile or telephone number for notices and other communications hereunder by notice to the otherparties hereto. Each other Lender may change its address, facsimile or telephone number for notices and other communicationshereunder by notice to the Borrowers, the Administrative Agent, the L/C Issuer and the Swingline Lender. In addition, eachLender agrees to notify the Administrative Agent from time to time to ensure that the Administrative Agent has on record (i) aneffective address, contact name, telephone number, facsimile number and e-mail address to which notices and othercommunications may be sent and (ii) accurate wire instructions for such Lender. Furthermore, each Public Lender agrees tocause at least one individual at or on behalf of such Public Lender to at all times have selected the “Private Side Information” orsimilar designation on the content declaration screen of the Platform in order to enable such Public Lender or its delegate, inaccordance with such Public Lender’s compliance procedures and applicable Law, including United States Federal and statesecurities Laws, to make reference to Borrower Materials that are not made available through the “Public Side Information”portion of the Platform and that may contain material non-public information with respect to either Borrower or its securities forpurposes of United States Federal or state securities Laws.(e) Reliance by Administrative Agent, L/C Issuer and Lenders. The Administrative Agent, the L/C Issuer and theLenders shall be entitled to rely and act upon any notices (including telephonic or electronic notices, Loan Notices, Letter ofCredit Applications and Swingline Loan Notices) purportedly given by or on behalf of any Loan Party even if (i) such noticeswere not made in a manner specified herein, were incomplete or were not preceded or followed by any other form of noticespecified herein, or (ii) the terms thereof, as understood by the recipient, varied from any confirmation thereof. The Loan Partiesshall indemnify the Administrative Agent, the L/C Issuer, each Lender and the Related Parties of each of them from all losses,costs, expenses and liabilities resulting from the reliance by such Person on each notice purportedly given by or on behalf of aLoan Party. All telephonic notices to and other telephonic communications with the Administrative Agent may be recorded bythe Administrative Agent, and each of the parties hereto hereby consents to such recording.11.03 No Waiver; Cumulative Remedies; Enforcement.No failure by any Lender, the L/C Issuer or the Administrative Agent to exercise, and no delay by any such Person inexercising, any right, remedy, power or privilege hereunder or under any other Loan Document shall operate as a waiver thereof; norshall any single or partial exercise of any right, remedy, power or privilege hereunder or under any other Loan Document (including theimposition of the Default Rate) preclude any other or further exercise thereof or the exercise of any other right, remedy, power orprivilege. The rights, remedies, powers and privileges herein provided, and provided under each other Loan Document are cumulativeand not exclusive of any rights, remedies, powers and privileges provided by Law.Notwithstanding anything to the contrary contained herein or in any other Loan Document, the authority to enforce rights andremedies hereunder and under the other Loan Documents against the Loan Parties or any of them shall be vested exclusively in, and allactions and proceedings at law in connection with such enforcement shall be instituted and maintained exclusively by, theAdministrative Agent in accordance with Section 8.02 for the benefit of all the Lenders and the L/C Issuer; provided, however, that theforegoing shall not prohibit (a) the Administrative Agent from exercising on its own behalf the rights and remedies that inure to itsbenefit (solely in its capacity as Administrative Agent) hereunder and under the other Loan Documents, (b) the L/C Issuer or theSwingline Lender from exercising the rights and remedies that inure to its benefit (solely in its capacity as L/C Issuer or SwinglineLender, as the case may be) hereunder and under the other Loan Documents, (c) any Lender from exercising setoff rights in accordancewith Section 11.08 (subject to the terms of Section 2.13), or (d) any Lender from filing proofs of claim or appearing and filing pleadingson its own behalf during the pendency of a proceeding relative to any Loan Party under any Debtor Relief Law; and provided, further,that if at any time there is no Person acting as Administrative Agent hereunder and under the other Loan Documents, then (i) theRequired Lenders shall have the rights otherwise ascribed to the Administrative Agent pursuant to Section 8.02 and (ii) in addition tothe matters set forth in clauses (b), (c) and (d) of the preceding proviso and subject to Section 2.13, any Lender may, with the consentof the Required Lenders, enforce any rights and remedies available to it and as authorized by the Required Lenders.11.04 Expenses; Indemnity; Damage Waiver.(a) Costs and Expenses. The Loan Parties shall pay (i) all reasonable out-of-pocket expenses incurred by theAdministrative Agent and its Affiliates (including the reasonable fees, charges and disbursements of counsel for theAdministrative Agent) in connection with the syndication of the credit facilities provided for herein, the preparation, negotiation,execution, delivery and administration of this Agreement and the other Loan Documents or any amendments, modifications orwaivers of the provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby shall beconsummated), (ii) all reasonable out-of-pocket expenses incurred by the L/C Issuer in connection with the issuance,amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder and (iii) all reasonable out-of-pocket expenses incurred by the Administrative Agent, any Lender or the L/C Issuer (including the fees, charges anddisbursements of any counsel for the Administrative Agent, any Lender or the L/C Issuer), and shall pay all reasonable fees andtime charges for attorneys who may be employees of the Administrative Agent, any Lender or the L/C Issuer, in connectionwith the enforcement or protection of its rights (A) in connection with this Agreement and the other Loan Documents, includingits rights under this Section, or (B) in connection with the Loans made or Letters of Credit issued hereunder, including all suchreasonable out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans orLetters of Credit.(b) Indemnification by the Loan Parties. The Loan Parties shall indemnify the Administrative Agent (and any sub-agentthereof), the Arranger, each Lender, the Swingline Lender and the L/C Issuer, and each Related Party of any of the foregoingPersons (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses,claims, damages, liabilities and related reasonable expenses (including the reasonable fees, charges and disbursements of anycounsel for any Indemnitee), and shall indemnify and hold harmless each Indemnitee from all reasonable fees and time chargesand disbursements for attorneys who may be employees of any Indemnitee, incurred by any Indemnitee or asserted against anyIndemnitee by any Person (including any Loan Party) arising out of, in connection with, or as a result of (i) the execution ordelivery of this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, theperformance by the parties hereto of their respective obligations hereunder or thereunder, the consummation of the transactionscontemplated hereby or thereby, or, in the case of the Administrative Agent (and any sub-agent thereof) and its Related Partiesonly, the administration of this Agreement and the other Loan Documents (including in respect of any matters addressed inSection 3.01), (ii) any Loan or Letter of Credit or the use or proposed use of the proceeds therefrom (including any refusal bythe L/C Issuer to honor a demand for payment under a Letter of Credit if the documents presented in connection with suchdemand do not strictly comply with the terms of such Letter of Credit), (iii) any actual or alleged presence or release ofHazardous Materials on or from any property owned or operated by a Loan Party or any of its Subsidiaries, or anyEnvironmental Liability related in any way to a Loan Party or any of its Subsidiaries, or (iv) any actual or prospective claim,litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory,whether brought by a third party or by any Loan Party, and regardless of whether any Indemnitee is a party thereto; providedthat such indemnity and holding harmless obligations shall not, as to any Indemnitee or Related Indemnified Party, be availableto the extent that such losses, claims, damages, liabilities or related expenses (x) are determined by a court of competentjurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of suchIndemnitee or Related Indemnified Party or (y) result from a claim brought by any Loan Party against an Indemnitee or RelatedIndemnified Party for breach in bad faith of such Indemnitee’s or Related Indemnified Party’s obligations hereunder or underany other Loan Document, if such Loan Party has obtained a final and nonappealable judgment in its favor on such claim asdetermined by a court of competent jurisdiction. Without limiting the provisions of Section 3.01(c), this Section 11.04(b) shallnot apply with respect to Taxes other than any Taxes that represent losses, claims, damages, etc. arising from any non-Taxclaim.(c) Reimbursement by Lenders. To the extent that the Loan Parties for any reason fail to indefeasibly pay any amountrequired under subsection (a) or (b) of this Section to be paid by them to the Administrative Agent (or any sub-agent thereof),the L/C Issuer, the Swingline Lender or any Related Party of any of the foregoing, each Lender severally agrees to pay to theAdministrative Agent (or any such sub-agent), the L/C Issuer, the Swingline Lender or such Related Party, as the case may be,such Lender’s pro rata share (determined as of the time that the applicable unreimbursed expense or indemnity payment issought based on each Lender’s share of the Total Credit Exposures of all Lenders at such time) of such unpaid amount(including any such unpaid amount in respect of a claim asserted by such Lender), such payment to be made severally amongthem based on such Lenders’ Applicable Percentage (determined as of the time that the applicable unreimbursed expense orindemnity payment is sought), provided, further that, the unreimbursed expense or indemnified loss, claim, damage, liability orrelated expense, as the case may be, was incurred by or asserted against the Administrative Agent (or any such sub-agent), theL/C Issuer or the Swingline Lender in its capacity as such, or against any Related Party of any of the foregoing acting for theAdministrative Agent (or any such sub-agent), the L/C Issuer or the Swingline Lender in connection with such capacity. Theobligations of the Lenders under this subsection (c) are subject to the provisions of Section 2.12(d).(d) Waiver of Consequential Damages, Etc. To the fullest extent permitted by applicable Law, no Loan Party shallassert, and each Loan Party hereby waives, and acknowledges that no other Person shall have, any claim against anyIndemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actualdamages) arising out of, in connection with, or as a result of, this Agreement, any other Loan Document or any agreement orinstrument contemplated hereby, the transactions contemplated hereby or thereby, any Loan or Letter of Credit or the use of theproceeds thereof. Absent the gross negligence or willful misconduct of an Indemnitee or any Related Indemnified Party in thetransmission or other distribution of information or other materials to an unintended recipient, no Indemnitee shall be liable forany damages arising from the use by any such unintended recipient of any information or other materials distributed to suchunintended recipient by such Indemnitee or such Related Indemnified Party through telecommunications, electronic or otherinformation transmission systems in connection with this Agreement or the other Loan Documents or the transactionscontemplated hereby or thereby.(e) Payments. All amounts due under this Section shall be payable not later than ten (10) Business Days after demandtherefor.(f) Survival. The agreements in this Section and the indemnity provisions of Section 11.02(e) shall survive theresignation of the Administrative Agent, the L/C Issuer and the Swingline Lender, the replacement of any Lender, thetermination of the Revolving Commitments and the repayment, satisfaction or discharge of all the other Obligations.11.05 Payments Set Aside.To the extent that any payment by or on behalf of any Loan Party is made to the Administrative Agent, the L/C Issuer or anyLender, or the Administrative Agent, the L/C Issuer or any Lender exercises its right of setoff, and such payment or the proceeds ofsuch setoff or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (includingpursuant to any settlement entered into by the Administrative Agent, the L/C Issuer or such Lender in its discretion) to be repaid to atrustee, receiver or any other party, in connection with any proceeding under any Debtor Relief Law or otherwise, then (a) to the extentof such recovery, the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effectas if such payment had not been made or such setoff had not occurred, and (b) each Lender and the L/C Issuer severally agrees to payto the Administrative Agent upon demand its applicable share (without duplication) of any amount so recovered from or repaid by theAdministrative Agent, plus interest thereon from the date of such demand to the date such payment is made at a rate per annum equal tothe applicable Overnight Rate from time to time in effect, in the applicable currency of such recovery or payment. The obligations ofthe Lenders and the L/C Issuer under clause (b) of the preceding sentence shall survive the payment in full of the Obligations and thetermination of this Agreement.11.06 Successors and Assigns.(a) Successors and Assigns Generally. The provisions of this Agreement and the other Loan Documents shall bebinding upon and inure to the benefit of the parties hereto and thereto and their respective successors and assigns permittedhereby, except that the Borrowers may not assign or otherwise transfer any of their respective rights or obligations hereunder orthereunder without the prior written consent of the Administrative Agent and each Lender and no Lender may assign orotherwise transfer any of its rights or obligations hereunder except (i) to an assignee in accordance with the provisions ofsubsection (b) of this Section, (ii) by way of participation in accordance with the provisions of subsection (d) of this Section or(iii) by way of pledge or assignment of a security interest subject to the restrictions of subsection (f) of this Section (and anyother attempted assignment or transfer by any party hereto shall be null and void). Nothing in this Agreement, expressed orimplied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assignspermitted hereby, Participants to the extent provided in subsection (d) of this Section and, to the extent expressly contemplatedhereby, the Related Parties of each of the Administrative Agent, the L/C Issuer and the Lenders) any legal or equitable right,remedy or claim under or by reason of this Agreement.(b) Assignments by Lenders. Any Lender may at any time assign to one or more assignees all or a portion of its rightsand obligations under this Agreement and the other Loan Documents (including all or a portion of its Revolving Commitmentand the Loans (including for purposes of this subsection (b), participations in L/C Obligations and in Swingline Loans) at thetime owing to it); provided that any such assignment shall be subject to the following conditions:(i) Minimum Amounts.(A) in the case of an assignment of the entire remaining amount of the assigning Lender’s RevolvingCommitment and the related Loans at the time owing to it or contemporaneous assignments to relatedApproved Funds (determined after giving effect to such assignment) that equal at least the amount specified insubsection (b)(i)(B) of this Section in the aggregate or in the case of an assignment to a Lender, an Affiliate of aLender or an Approved Fund, no minimum amount need be assigned; and(B) in any case not described in subsection (b)(i)(A) of this Section, the aggregate amount of theRevolving Commitment (which for this purpose includes Loans outstanding thereunder) or, if the RevolvingCommitment is not then in effect, the principal outstanding balance of the Loans of the assigning Lendersubject to each such assignment, determined as of the date the Assignment and Assumption with respect tosuch assignment is delivered to the Administrative Agent or, if “Trade Date” is specified in the Assignment andAssumption, as of the Trade Date, shall not be less than $10,000,000 unless each of the Administrative Agentand, so long as no Event of Default has occurred and is continuing, PRGX otherwise consents (each suchconsent not to be unreasonably withheld or delayed).(ii) Proportionate Amounts. Each partial assignment shall be made as an assignment of a proportionate part ofall the assigning Lender’s Loans and Revolving Commitments, and rights and obligations with respect thereto, assigned,except that this clause (ii) shall not (A) apply to the Swingline Lender’s rights and obligations in respect of SwinglineLoans or (B) prohibit any Lender from assigning all or a portion of its rights and obligations in respect of its RevolvingCommitment (and the related Revolving Loans thereunder) on a non-pro rata basis;(iii) Required Consents. No consent shall be required for any assignment except to the extent required bysubsection (b)(i)(B) of this Section and, in addition:(A) the consent of PRGX (such consent not to be unreasonably withheld or delayed) shall be requiredunless (1) an Event of Default has occurred and is continuing at the time of such assignment or (2) suchassignment is to a Lender, an Affiliate of a Lender or an Approved Fund; provided that PRGX shall be deemedto have consented to any such assignment unless it shall object thereto by written notice to the AdministrativeAgent within five (5) Business Days after having received notice thereof;(B) the consent of the Administrative Agent (such consent not to be unreasonably withheld or delayed)shall be required for assignments in respect of any Revolving Commitment if such assignment is to a Personthat is not a Lender with a Revolving Commitment in respect of the applicable facility subject to suchassignment, an Affiliate of such Lender or an Approved Fund with respect to such Lender; and(C) the consent of the L/C Issuer and the Swingline Lender shall be required for any assignment inrespect of Revolving Loans and Revolving Commitments.(iv) Assignment and Assumption. The parties to each assignment shall execute and deliver to theAdministrative Agent for its own account an Assignment and Assumption, together with a processing and recordationfee in the amount of $3,500; provided, however, that the Administrative Agent may, in its sole discretion, elect to waivesuch processing and recordation fee in the case of any assignment. The assignee, if it is not a Lender, shall deliver to theAdministrative Agent an Administrative Questionnaire.(v) No Assignment to Certain Persons. No such assignment shall be made to (A) the Borrowers or any of theBorrowers’ respective Subsidiaries or other Affiliates, (B) any Defaulting Lender or any of its Subsidiaries or any Personwhich is owned and controlled by the same parent as the parent of the Defaulting Lender, or any Person who, uponbecoming a Lender hereunder, would constitute any of the foregoing Persons described in this clause (B), or (C) anatural Person (or a holding company, investment vehicle or trust for, or owned and operated for the primary benefit ofa natural Person).(vi) Certain Additional Payments. In connection with any assignment of rights and obligations of anyDefaulting Lender hereunder, no such assignment shall be effective unless and until, in addition to the other conditionsthereto set forth herein, the parties to the assignment shall make such additional payments to the Administrative Agent inan aggregate amount sufficient, upon distribution thereof as appropriate (which may be outright payment, purchases bythe assignee of participations or subparticipations, or other compensating actions, including funding, with the consent ofthe Borrowers and the Administrative Agent, the applicable pro rata share of Loans previously requested but not fundedby the Defaulting Lender, to each of which the applicable assignee and assignor hereby irrevocably consent), to (x) payand satisfy in full all payment liabilities then owed by such Defaulting Lender to the Administrative Agent, the L/CIssuer or any Lender hereunder (and interest accrued thereon) and (y) acquire (and fund as appropriate) its full pro ratashare of all Loans and participations in Letters of Credit and Swingline Loans in accordance with its ApplicablePercentage. Notwithstanding the foregoing, in the event that any assignment of rights and obligations of any DefaultingLender hereunder shall become effective under applicable Law without compliance with the provisions of thisparagraph, then the assignee of such interest shall be deemed to be a Defaulting Lender for all purposes of thisAgreement until such compliance occurs.Subject to acceptance and recording thereof by the Administrative Agent pursuant to subsection (c) of this Section, from and after theeffective date specified in each Assignment and Assumption, the assignee thereunder shall be a party to this Agreement and, to theextent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement,and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released fromits obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rightsand obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits ofSections 3.01, 3.04, 3.05 and 11.04 with respect to facts and circumstances occurring prior to the effective date of such assignment);provided, that except to the extent otherwise expressly agreed by the affected parties, no assignment by a Defaulting Lender willconstitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender. Uponrequest, the Borrowers (at their expense) shall execute and deliver a Note to the assignee Lender. Any assignment or transfer by aLender of rights or obligations under this Agreement that does not comply with this subsection shall be treated for purposes of thisAgreement as a sale by such Lender of a participation in such rights and obligations in accordance with subsection (d) of this Section.(c) Register. The Administrative Agent, acting solely for this purpose as a non-fiduciary agent of the Borrowers (andsuch agency being solely for tax purposes), shall maintain at the Administrative Agent’s Office a copy of each Assignment andAssumption delivered to it (or the equivalent thereof in electronic form) and a register for the recordation of the names andaddresses of the Lenders, and the Revolving Commitments of, and principal amounts (and stated interest) of the Loans and L/CObligations owing to, each Lender pursuant to the terms hereof from time to time (the “Register”). The entries in the Registershall be conclusive absent manifest error, and the Borrowers, the Administrative Agent and the Lenders shall treat each Personwhose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement.The Register shall be available for inspection by the Borrowers and any Lender at any reasonable time and from time to timeupon reasonable prior notice.(d) Participations. Any Lender may at any time, without the consent of, or notice to, either Borrower or theAdministrative Agent, sell participations to any Person (other than a natural Person (or a holding company, investment vehicleor trust for, or owned and operated for the primary benefit of a natural Person), a Defaulting Lender or either Borrower or any ofthe Borrowers’ respective Affiliates or Subsidiaries) (each, a “Participant”) in all or a portion of such Lender’s rights and/orobligations under this Agreement (including all or a portion of its Revolving Commitment and/or the Loans (including suchLender’s participations in L/C Obligations and/or Swingline Loans) owing to it); provided that (i) such Lender’s obligationsunder this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for theperformance of such obligations and (iii) the Borrowers, the Administrative Agent, the Lenders and the L/C Issuer shall continueto deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement. Forthe avoidance of doubt, each Lender shall be responsible for the indemnity under Section 11.04(c) without regard to theexistence of any participation.Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shallretain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of thisAgreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of theParticipant, agree to any amendment, waiver or other modification described in Section 11.01(a) that affects such Participant.Each Borrower agrees that each Participant shall be entitled to the benefits of Sections 3.01, 3.04 and 3.05 to the same extent asif it were a Lender and had acquired its interest by assignment pursuant to subsection (b) of this Section (it being understoodthat the documentation required under Section 3.01(e) shall be delivered to the Lender who sells the participation) to the sameextent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section; provided thatsuch Participant (A) agrees to be subject to the provisions of Sections 3.06 and 11.13 as if it were an assignee under paragraph(b) of this Section and (B) shall not be entitled to receive any greater payment under Sections 3.01 or 3.04, with respect to anyparticipation, than the Lender from whom it acquired the applicable participation would have been entitled to receive, except tothe extent such entitlement to receive a greater payment results from a Change in Law that occurs after the Participant acquiredthe applicable participation. Each Lender that sells a participation agrees, at either Borrower’s request and expense, to usereasonable efforts to cooperate with the Borrowers to effectuate the provisions of Section 3.06 with respect to any Participant.To the extent permitted by Law, each Participant also shall be entitled to the benefits of Section 11.08 as though it were aLender; provided that such Participant agrees to be subject to Section 2.13 as though it were a Lender. Each Lender that sells aparticipation shall, acting solely for this purpose as a non-fiduciary agent of the Borrowers, maintain a register on which it entersthe name and address of each Participant and the principal amounts (and stated interest) of each Participant’s interest in theLoans or other obligations under the Loan Documents (the “Participant Register”); provided that no Lender shall have anyobligation to disclose all or any portion of the Participant Register (including the identity of any Participant or any informationrelating to a Participant’s interest in any commitments, loans, letters of credit or its other obligations under any Loan Document)to any Person except to the extent that such disclosure is necessary to establish that such commitment, loan, letter of credit orother obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries in theParticipant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recordedin the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice tothe contrary. For the avoidance of doubt, the Administrative Agent (in its capacity as Administrative Agent) shall have noresponsibility for maintaining a Participant Register.(e) Certain Pledges. Any Lender may at any time pledge or assign a security interest in all or any portion of its rightsunder this Agreement (including under its Note, if any) to secure obligations of such Lender, including any pledge orassignment to secure obligations to a Federal Reserve Bank; provided that no such pledge or assignment shall release suchLender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.(f) Resignation as L/C Issuer or Swingline Lender after Assignment. Notwithstanding anything to the contrarycontained herein, if at any time Bank of America assigns all of its Revolving Commitment and Revolving Loans pursuant tosubsection (b) above, Bank of America may, (i) upon thirty (30) days’ notice to the Borrowers and the Lenders, resign as L/CIssuer and/or (ii) upon thirty (30) days’ notice to the Borrowers, resign as Swingline Lender. In the event of any suchresignation as L/C Issuer or Swingline Lender, the Borrowers shall be entitled to appoint from among the Lenders a successorL/C Issuer or Swingline Lender hereunder; provided, however, that no failure by the Borrowers to appoint any such successorshall affect the resignation of Bank of America as L/C Issuer or Swingline Lender, as the case may be. If Bank of Americaresigns as L/C Issuer, it shall retain all the rights, powers, privileges and duties of the L/C Issuer hereunder with respect to allLetters of Credit outstanding as of the effective date of its resignation as L/C Issuer and all L/C Obligations with respect thereto(including the right to require the Lenders to make Base Rate Loans or fund risk participations in Unreimbursed Amountspursuant to Section 2.03(c)). If Bank of America resigns as Swingline Lender, it shall retain all the rights of the SwinglineLender provided for hereunder with respect to Swingline Loans made by it and outstanding as of the effective date of suchresignation, including the right to require the Lenders to make Base Rate Loans or fund risk participations in outstandingSwingline Loans pursuant to Section 2.04(c). Upon the appointment of a successor L/C Issuer and/or Swingline Lender, (1) suchsuccessor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring L/C Issuer orSwingline Lender, as the case may be, and (2) the successor L/C Issuer shall issue letters of credit in substitution for the Lettersof Credit, if any, outstanding at the time of such succession (or, in the alternative, if the successor L/C Issuer is reasonablyacceptable to the retiring L/C Issuer, such letters of credit may be issued to backstop any Letters of Credit then outstanding inamounts and with terms reasonably acceptable to the retiring L/C Issuer) or make other arrangements satisfactory to Bank ofAmerica to effectively assume the obligations of Bank of America with respect to such Letters of Credit.11.07 Treatment of Certain Information; Confidentiality.Each of the Administrative Agent, the Lenders and the L/C Issuer agrees to maintain the confidentiality of the Information (asdefined below), except that Information may be disclosed (a) to its Affiliates, its auditors and to its Related Parties (it being understoodthat the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keepsuch Information confidential), (b) to the extent required or requested by any regulatory authority purporting to have jurisdiction oversuch Person or its Related Parties (including any self-regulatory authority, such as the National Association of InsuranceCommissioners), (c) to the extent required by applicable Laws or regulations or by any subpoena or similar legal process, (d) to anyother party hereto, (e) in connection with the exercise of any remedies hereunder or under any other Loan Document or any action orproceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (f) subject toan agreement containing provisions substantially the same as those of this Section, to (i) any assignee of or Participant in, or anyprospective assignee of or Participant in, any of its rights and obligations under this Agreement or (ii) any actual or prospective party(or its Related Parties) to any swap, derivative or other transaction under which payments are to be made by reference to each Borrowerand its obligations, this Agreement or payments hereunder, (g) on a confidential basis to (i) any rating agency in connection with ratingany Loan Party or its Subsidiaries or the credit facilities provided hereunder or (ii) the CUSIP Service Bureau or any similar agency inconnection with the issuance and monitoring of CUSIP numbers or other market identifiers with respect to the credit facilities providedhereunder, (h) with the consent of the Borrowers or (i) to the extent such Information (x) becomes publicly available other than as aresult of a breach of this Section or (y) becomes available to the Administrative Agent, any Lender, the L/C Issuer or any of theirrespective Affiliates on a nonconfidential basis from a source other than the Borrowers. In addition, the Administrative Agent and theLenders may disclose the existence of this Agreement and information about this Agreement to market data collectors, similar serviceproviders to the lending industry and service providers to the Agents and the Lenders in connection with the administration of thisAgreement, the other Loan Documents, and the Revolving Commitments.For purposes of this Section, “Information” means all information received from a Loan Party or any Subsidiary relating to theLoan Parties or any Subsidiary or any of their respective businesses, other than any such information that is available to theAdministrative Agent, any Lender or the L/C Issuer on a nonconfidential basis prior to disclosure by such Loan Party or any Subsidiary.Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have compliedwith its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information assuch Person would accord to its own confidential information.Each of the Administrative Agent, the Lenders and the L/C Issuer acknowledges that (a) the Information may include materialnon-public information concerning a Loan Party or a Subsidiary, as the case may be, (b) it has developed compliance proceduresregarding the use of material non-public information and (c) it will handle such material non-public information in accordance withapplicable Law, including United States Federal and state securities Laws.The Loan Parties and their Affiliates agree that they will not in the future issue any press releases or other public disclosure withrespect to this Agreement using the name of the Administrative Agent or any Lender or their respective Affiliates or referring to thisAgreement or any of the Loan Documents without the prior written consent of the Administrative Agent, unless (and only to the extentthat) the Loan Parties or such Affiliate is required to do so under Law and then, in any event the Loan Parties or such Affiliate willconsult with such Person before issuing such press release or other public disclosure; provided, that filings required to be made with theSEC may be made without prior consultation.The Loan Parties consent to the publication by the Administrative Agent or any Lender of customary advertising materialrelating to the transactions contemplated hereby using the name, logo or trademark of the Loan Parties.11.08 Rights of Setoff.If an Event of Default shall have occurred and be continuing, each Lender, the L/C Issuer and each of their respective Affiliatesis hereby authorized at any time and from time to time, to the fullest extent permitted by applicable Law, to set off and apply any and alldeposits (general or special, time or demand, provisional or final, in whatever currency), but, in any event, excluding ExcludedAccounts, at any time held and other obligations (in whatever currency) at any time owing by such Lender, the L/C Issuer or any suchAffiliate to or for the credit or the account of any Loan Party against any and all of the obligations of such Loan Party now or hereafterexisting under this Agreement or any other Loan Document to such Lender or the L/C Issuer or their respective Affiliates, irrespectiveof whether or not such Lender, the L/C Issuer or such Affiliate shall have made any demand under this Agreement or any other LoanDocument and although such obligations of such Loan Party may be contingent or unmatured or are owed to a branch or office orAffiliate of such Lender or the L/C Issuer different from the branch or office or Affiliate holding such deposit or obligated on suchindebtedness; provided, that in the event that any Defaulting Lender shall exercise any such right of setoff, (x) all amounts so set offshall be paid over immediately to the Administrative Agent for further application in accordance with the provisions of Section 2.15and, pending such payment, shall be segregated by such Defaulting Lender from its other funds and deemed held in trust for the benefitof the Administrative Agent, the L/C Issuer and the Lenders, and (y) the Defaulting Lender shall provide promptly to the AdministrativeAgent a statement describing in reasonable detail the Obligations owing to such Defaulting Lender as to which it exercised such right ofsetoff. The rights of each Lender, the L/C Issuer and their respective Affiliates under this Section are in addition to other rights andremedies (including other rights of setoff) that such Lender, the L/C Issuer or their respective Affiliates may have. Each Lender and theL/C Issuer agrees to notify the Borrowers and the Administrative Agent promptly after any such setoff and application, provided thatthe failure to give such notice shall not affect the validity of such setoff and application.11.09 Interest Rate Limitation.Notwithstanding anything to the contrary contained in any Loan Document, the interest paid or agreed to be paid under theLoan Documents shall not exceed the maximum rate of non-usurious interest permitted by applicable Law (the “Maximum Rate”). Ifthe Administrative Agent or any Lender shall receive interest in an amount that exceeds the Maximum Rate, the excess interest shall beapplied to the principal of the Loans or, if it exceeds such unpaid principal, refunded to the Borrowers. In determining whether theinterest contracted for, charged, or received by the Administrative Agent or a Lender exceeds the Maximum Rate, such Person may, tothe extent permitted by applicable Law, (a) characterize any payment that is not principal as an expense, fee, or premium rather thaninterest, (b) exclude voluntary prepayments and the effects thereof, and (c) amortize, prorate, allocate, and spread in equal or unequalparts the total amount of interest throughout the contemplated term of the Obligations hereunder.11.10 Counterparts; Integration; Effectiveness.This Agreement and each of the other Loan Documents may be executed in counterparts (and by different parties hereto indifferent counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract.This Agreement, the other Loan Documents and any separate letter agreements entered into after the Closing with respect to feespayable to the Administrative Agent or the L/C Issuer constitute the entire contract among the parties relating to the subject matterhereof and thereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matterhereof and thereof. Except as provided in Section 4.01, this Agreement shall become effective when it shall have been executed by theAdministrative Agent and when the Administrative Agent shall have received counterparts hereof that, when taken together, bear thesignatures of each of the other parties hereto. Delivery of an executed counterpart of a signature page of this Agreement or any otherLoan Document, or any certificate delivered thereunder, by fax transmission or e-mail transmission (e.g., “pdf” or “tif”) shall beeffective as delivery of a manually executed counterpart of this Agreement or such other Loan Document or certificate. Without limitingthe foregoing, to the extent a manually executed counterpart is not specifically required to be delivered under the terms of any LoanDocument, upon the request of any party, such fax transmission or e-mail transmission shall be promptly followed by such manuallyexecuted counterpart.11.11 Survival of Representations and Warranties.All representations and warranties made hereunder and in any other Loan Document or other document delivered pursuanthereto or thereto or in connection herewith or therewith shall survive the execution and delivery hereof and thereof. Suchrepresentations and warranties have been or will be relied upon by the Administrative Agent and each Lender, regardless of anyinvestigation made by the Administrative Agent or any Lender or on their behalf and notwithstanding that the Administrative Agent orany Lender may have had notice or knowledge of any Default at the time of any Credit Extension, and shall continue in full force andeffect as long as any Loan or any other Obligation hereunder shall remain unpaid or unsatisfied or any Letter of Credit shall remainoutstanding.11.12 Severability.If any provision of this Agreement or the other Loan Documents is held to be illegal, invalid or unenforceable, (a) the legality,validity and enforceability of the remaining provisions of this Agreement and the other Loan Documents shall not be affected orimpaired thereby and (b) the parties shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable provisionswith valid provisions the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provisions.The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any otherjurisdiction. Without limiting the foregoing provisions of this Section 11.12, if and to the extent that the enforceability of any provisionsin this Agreement relating to Defaulting Lenders shall be limited by Debtor Relief Laws, as determined in good faith by theAdministrative Agent, the L/C Issuer or the Swingline Lender, as applicable, then such provisions shall be deemed to be in effect onlyto the extent not so limited.11.13 Replacement of Lenders.If the Borrowers are entitled to replace a Lender pursuant to the provisions of Section 3.06, or if any Lender is a DefaultingLender or a Non-Consenting Lender, then the Borrowers may, at their sole expense and effort, upon notice to such Lender and theAdministrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictionscontained in, and consents required by, Section 11.06), all of its interests, rights (other than its existing rights to payments pursuant toSections 3.01 and 3.04) and obligations under this Agreement and the related Loan Documents to an Eligible Assignee that shallassume such obligations (which assignee may be another Lender, if a Lender accepts such assignment), provided that:(a) the Borrowers shall have paid to the Administrative Agent the assignment fee (if any) specified in Section 11.06(b);(b) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans and L/CAdvances, accrued interest thereon, accrued fees and all other amounts payable to it hereunder and under the other LoanDocuments (including any amounts under Section 3.05) from the assignee (to the extent of such outstanding principal andaccrued interest and fees) or the Borrowers (in the case of all other amounts);(c) in the case of any such assignment resulting from a claim for compensation under Section 3.04 or paymentsrequired to be made pursuant to Section 3.01, such assignment will result in a reduction in such compensation or paymentsthereafter;(d) such assignment does not conflict with applicable Laws; and(e) in the case of an assignment resulting from a Lender becoming a Non-Consenting Lender, the applicable assigneeshall have consented to the applicable amendment, waiver or consent.A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by suchLender or otherwise, the circumstances entitling the Borrowers to require such assignment and delegation cease to apply.11.14 Governing Law; Jurisdiction; Etc.(a) GOVERNING LAW. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (EXCEPT, AS TO ANYOTHER LOAN DOCUMENT, AS EXPRESSLY SET FORTH THEREIN) AND ANY CLAIMS, CONTROVERSY, DISPUTE ORCAUSE OF ACTION (WHETHER IN CONTRACT OR TORT OR OTHERWISE) BASED UPON, ARISING OUT OF ORRELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT (EXCEPT, AS TO ANY OTHER LOANDOCUMENT, AS EXPRESSLY SET FORTH THEREIN) AND THE TRANSACTIONS CONTEMPLATED HEREBY ANDTHEREBY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OFNEW YORK.(b) SUBMISSION TO JURISDICTION. EACH LOAN PARTY IRREVOCABLY AND UNCONDITIONALLYAGREES THAT IT WILL NOT COMMENCE ANY ACTION, LITIGATION OR PROCEEDING OF ANY KIND ORDESCRIPTION, WHETHER IN LAW OR EQUITY, WHETHER IN CONTRACT OR IN TORT OR OTHERWISE, AGAINSTTHE ADMINISTRATIVE AGENT, ANY LENDER, THE L/C ISSUER, OR ANY RELATED PARTY OF THE FOREGOING INANY WAY RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONSRELATING HERETO OR THERETO, IN ANY FORUM OTHER THAN THE COURTS OF THE STATE OF NEW YORKSITTING IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OFNEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, AND EACH OF THE PARTIES HERETOIRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE JURISDICTION OF SUCH COURTS AND AGREES THATALL CLAIMS IN RESPECT OF ANY SUCH ACTION, LITIGATION OR PROCEEDING MAY BE HEARD ANDDETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLELAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANYSUCH ACTION, LITIGATION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHERJURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THISAGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE ADMINISTRATIVEAGENT, ANY LENDER OR THE L/C ISSUER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDINGRELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST ANY LOAN PARTY OR ITSPROPERTIES IN THE COURTS OF ANY JURISDICTION.(c) WAIVER OF VENUE. EACH LOAN PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THEFULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVETO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THISAGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (B) OF THISSECTION. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENTPERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OFSUCH ACTION OR PROCEEDING IN ANY SUCH COURT.(d) SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS INTHE MANNER PROVIDED FOR NOTICES IN SECTION 11.02. NOTHING IN THIS AGREEMENT WILL AFFECT THERIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.11.15 Waiver of Jury Trial.EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLELAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLYARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONSCONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACHPARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HASREPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION,SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETOHAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHERTHINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.11.16 No Advisory or Fiduciary Responsibility.In connection with all aspects of each transaction contemplated hereby (including in connection with any amendment, waiver orother modification hereof or of any other Loan Document), each of the Loan Parties acknowledges and agrees, and acknowledges itsAffiliates’ understanding, that: (i) (A) the arranging and other services regarding this Agreement provided by the Administrative Agent,the Arranger, and the Lenders are arm’s-length commercial transactions between the Loan Parties and their Affiliates, on the one hand,and the Administrative Agent, the Arranger, and the Lenders, on the other hand, (B) each of the Loan Parties has consulted its ownlegal, accounting, regulatory and tax advisors to the extent it has deemed appropriate, and (C) each of the Loan Parties is capable ofevaluating, and understands and accepts, the terms, risks and conditions of the transactions contemplated hereby and by the other LoanDocuments; (ii) (A) the Administrative Agent, the Arranger and the Lenders each is and has been acting solely as a principal and,except as expressly agreed in writing by the relevant parties, has not been, is not, and will not be acting as an advisor, agent or fiduciaryfor the Loan Parties or any of their respective Affiliates, or any other Person and (B) neither the Administrative Agent, the Arranger, norany Lender has any obligation to the Loan Parties or any of their respective Affiliates with respect to the transactions contemplatedhereby except those obligations expressly set forth herein and in the other Loan Documents; and (iii) the Administrative Agent, theArranger, the Lenders and their respective Affiliates may be engaged in a broad range of transactions that involve interests that differfrom those of the Loan Parties and their respective Affiliates, and neither the Administrative Agent, the Arranger, nor any Lender hasany obligation to disclose any of such interests to the Loan Parties and their respective Affiliates. To the fullest extent permitted by Law,each of the Loan Parties hereby waives and releases any claims that it may have against the Administrative Agent, the Arranger or anyLender with respect to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any transactioncontemplated hereby.11.17 Electronic Execution of Assignments and Certain Other Documents.The words “execute,” “execution,” “signed,” “signature,” and words of like import in any Loan Document or any otherdocument executed in connection herewith and the transactions contemplated hereby shall be deemed to include electronic signatures,the electronic matching of assignment terms and contract formations on electronic platforms approved by the Administrative Agent, orthe keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manuallyexecuted signature, physical delivery or the use of a paper-based recordkeeping system, as the case may be, to the extent and asprovided for in any applicable Law, including the Federal Electronic Signatures in Global and National Commerce Act, the New YorkState Electronic Signatures and Records Act, or any other similar state Laws based on the Uniform Electronic Transactions Act;provided that notwithstanding anything contained herein to the contrary the Administrative Agent is under no obligation to agree toaccept electronic signatures in any form or in any format unless expressly agreed to by the Administrative Agent pursuant to proceduresapproved by it; provided further without limiting the foregoing, upon the request of the Administrative Agent, any electronic signatureshall be promptly followed by such manually executed counterpart.11.18 USA PATRIOT Act Notice.Each Lender that is subject to the Act (as hereinafter defined) and the Administrative Agent (for itself and not on behalf of anyLender) hereby notifies the Loan Parties that pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signedinto law October 26, 2001)) (the “Act”), it is required to obtain, verify and record information that identifies the Loan Parties, whichinformation includes the name and address of the Loan Parties and other information that will allow such Lender or the AdministrativeAgent, as applicable, to identify the Loan Parties in accordance with the Act. The Loan Parties shall, promptly following a request bythe Administrative Agent or any Lender, provide all documentation and other information that the Administrative Agent or such Lenderrequests in order to comply with its ongoing obligations under applicable “know your customer” and anti-money laundering rules andregulations, including the Act.11.19 Judgment Currency.If, for the purposes of obtaining judgment in any court, it is necessary to convert a sum due hereunder or any other LoanDocument in one currency into another currency, the rate of exchange used shall be that at which in accordance with normal bankingprocedures the Administrative Agent could purchase the first currency with such other currency on the Business Day preceding that onwhich final judgment is given. The obligation of each Loan Party in respect of any such sum due from it to the Administrative Agent orany Lender hereunder or under the other Loan Documents shall, notwithstanding any judgment in a currency (the “JudgmentCurrency”) other than that in which such sum is denominated in accordance with the applicable provisions of this Agreement (the“Agreement Currency”), be discharged only to the extent that on the Business Day following receipt by the Administrative Agent orsuch Lender, as the case may be, of any sum adjudged to be so due in the Judgment Currency, the Administrative Agent or suchLender, as the case may be, may in accordance with normal banking procedures purchase the Agreement Currency with the JudgmentCurrency. If the amount of the Agreement Currency so purchased is less than the sum originally due to the Administrative Agent or anyLender from any Loan Party in the Agreement Currency, the Loan Parties agree, as a separate obligation and notwithstanding any suchjudgment, to indemnify the Administrative Agent or such Lender, as the case may be, against such loss. If the amount of the AgreementCurrency so purchased is greater than the sum originally due to the Administrative Agent or any Lender in such currency, theAdministrative Agent or such Lender, as the case may be, agrees to return the amount of any excess to the Loan Parties (or to any otherPerson who may be entitled thereto under applicable Law).11.20 Acknowledgement and Consent to Bail-In of EEA Financial Institutions.Solely to the extent any Lender or L/C Issuer that is an EEA Financial Institution is a party to this Agreement andnotwithstanding anything to the contrary in any Loan Document or in any other agreement, arrangement or understanding among anysuch parties, each party hereto acknowledges that any liability of any Lender or L/C Issuer that is an EEA Financial Institution arisingunder any Loan Document, to the extent such liability is unsecured, may be subject to the write-down and conversion powers of anEEA Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:(a) the application of any Write-Down and Conversion Powers by an EEA Resolution Authority to any such liabilitiesarising hereunder which may be payable to it by any Lender or L/C Issuer that is an EEA Financial Institution; and(b) the effects of any Bail-In Action on any such liability, including, if applicable:(i) a reduction in full or in part or cancellation of any such liability;(ii) a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such EEAFinancial Institution, its parent entity, or a bridge institution that may be issued to it or otherwise conferred on it, and thatsuch shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any suchliability under this Agreement or any other Loan Document; or(iii) the variation of the terms of such liability in connection with the exercise of the write-down and conversionpowers of any EEA Resolution Authority.11.21 Subordination of Intercompany Indebtedness.Each Loan Party (a “Subordinating Loan Party”) agrees that the payment of all obligations and indebtedness, whether principal,interest, fees and other amounts and whether now owing or hereafter arising, owing to such Subordinating Loan Party by any otherLoan Party is expressly subordinated to the payment in full in cash of the Obligations. If the Administrative Agent so requests while anyEvent of Default has occurred and is continuing, any such obligation or indebtedness shall be enforced and performance received bythe Subordinating Loan Party as trustee for the holders of the Obligations and the proceeds thereof shall be paid over to the holders ofthe Obligations on account of the Obligations, but without reducing or affecting in any manner the liability of the Subordinating LoanParty under this Agreement or any other Loan Document. Without limitation of the foregoing, unless the Loan Parties have received theforegoing request from the Administrative Agent while an Event of Default has occurred and is continuing, the Loan Parties may makeand receive payments with respect to any such obligations and indebtedness, provided, that in the event that any Loan Party receivesany payment of any such obligations and indebtedness at a time when such payment is prohibited by this Section, such payment shallbe held by such Loan Party, in trust for the benefit of, and shall be paid forthwith over and delivered, upon written request, to theAdministrative Agent. For purposes of compliance with Section 5.25, the parties hereto acknowledge and agree that obligations underthe Loan Documents constitute “Designated Senior Indebtedness.”11.22 Concerning Joint and Several Liability.(a) Each of the Borrowers is accepting joint and several liability hereunder in consideration of the financialaccommodations provided by the Lenders under this Agreement, for the mutual benefit, directly and indirectly, of each of theBorrowers, and in consideration of the undertakings of each of the Borrowers to accept joint and several liability for theobligations of each of them.(b) Each of the Borrowers jointly and severally hereby irrevocably and unconditionally accepts, not merely as a suretybut also as a co-debtor, joint and several liability with the other Borrower with respect to the payment and performance of all ofthe Obligations (including, without limitation, the obligations of the other Borrower to a Cash Management Bank in respect ofSecured Cash Management Agreements) of the other Borrower, it being the intention of the parties hereto that all theObligations of either Borrower shall be the joint and several obligations of each of the Borrowers without preferences ordistinction between them.(c) If and to the extent that a Borrower shall fail to make any payment with respect to any of the Obligations of theother Borrower as and when due or to perform any of such Obligations in accordance with the terms thereof, then in each suchevent, the other Borrower will make such payment with respect to, or perform, such Obligation.(d) The obligations of each Borrower under the provisions of this Section 11.22 constitute the absolute andunconditional, full recourse obligations of such Borrower, enforceable against it to the full extent of its property, irrespective ofthe validity, regularity or enforceability of this Agreement or any other circumstances whatsoever.(e) Except as otherwise expressly provided herein, each Borrower hereby waives notice of acceptance of its joint andseveral liability, notice of occurrence of any Default or Event of Default (except to the extent notice is expressly required to begiven pursuant to the terms of this Agreement), or of any demand for any payment under this Agreement, notice of any actionat any time taken or omitted by the Administrative Agent or the Lenders under or in respect of any of the Obligations hereunder,any requirement of diligence and, generally, all demands, notices and other formalities of every kind in connection with thisAgreement. Each Borrower hereby assents to, and waives notice of, any extension or postponement of the time for the paymentof any of the Obligations hereunder, the acceptance of any partial payment thereon, any waiver, consent or other action oracquiescence by the Lenders at any time or times in respect of any default by either Borrower in the performance or satisfactionof any term, covenant, condition or provision of this Agreement and/or the other Loan Documents, any and all otherindulgences whatsoever by the Lenders in respect of any of the Obligations, and the taking, addition, substitution or release, inwhole or in part, at any time or times, of any security for any of such Obligations or the addition, substitution or release, inwhole or in part, of either Borrower. Without limiting the generality of the foregoing, each Borrower assents to any other actionor delay in acting or any failure to act on the part of the Administrative Agent, the Lenders or any other holder of theObligations, including any failure strictly or diligently to assert any right or to pursue any remedy or to comply fully withapplicable Laws or regulations thereunder which might, but for the provisions of this Section 11.22, afford grounds forterminating, discharging or relieving such Borrower, in whole or in part, from any of its obligations under this Section 11.22, itbeing the intention of each Borrower that, so long as any of the Obligations hereunder remain unsatisfied, the obligations ofsuch Borrower under this Section 11.22 shall not be discharged except by performance and then only to the extent of suchperformance. The obligations of each Borrower under this Section 11.22 shall not be diminished or rendered unenforceable byany winding up, reorganization, arrangement, liquidation, reconstruction or similar proceeding with respect to anyreconstruction or similar proceeding with respect to either Borrower, the Lenders or any other holder of the Obligations. Thejoint and several liability of the Borrowers hereunder shall continue in full force and effect notwithstanding any absorption,merger, amalgamation or any other change whatsoever in the name, membership, constitution or place of formation of eitherBorrower, the Administrative Agent, any Lender or any other holder of the Obligations.(f) The provisions of this Section 11.22 are made for the benefit of the Administrative Agent, the Lenders, the otherholders of the Obligations and their respective successors and assigns, and may be enforced by the Administrative Agent fromtime to time against any of the Borrowers as often as occasion therefore may arise and without requirement on the part of theAdministrative Agent, any Lender or any other holder of the Obligations first to marshal any of its claims or to exercise any ofits rights against the other Borrower or to exhaust any remedies available to it against the other Borrower or to resort to anyother source or means of obtaining payment of any of the Obligations or to elect any other remedy. The provisions of thisSection 11.22 shall remain in effect until the Facility Termination Date. If at any time, any payment, or any part thereof, made inrespect of any of the Obligations of either Borrower, is rescinded or must otherwise be restored or returned by the Lenders uponthe insolvency, bankruptcy or reorganization of any of the Borrowers, or otherwise, the provisions of this Section 11.22 willforthwith be reinstated and in effect as though such payment had not been made.(g) Notwithstanding any provision to the contrary contained herein or in any other of the Loan Documents or any CashManagement Agreements, the obligations of each Borrower hereunder shall be limited to an aggregate amount equal to thelargest amount that would not render its obligations hereunder subject to avoidance under Section 548 of the Bankruptcy Codeof the United States or any comparable provisions of any applicable Debtor Relief Law.(h) For the avoidance of doubt, the waivers by each Borrower under this Section 11.22 apply for purposes of theenforceability of the suretyship obligations of each Borrower under this Section 11.22 only.11.23 Borrower Agent.Each of the Loan Parties hereby appoints PRGX to act as its agent for all purposes of this Agreement, the other Loan Documentsand all other documents and electronic platforms entered into in connection herewith and agrees that (a) PRGX may execute suchdocuments and provide such authorizations on behalf of such Loan Parties as PRGX deems appropriate in its sole discretion and eachLoan Party shall be obligated by all of the terms of any such document and/or authorization executed on its behalf, (b) any notice orcommunication delivered by the Administrative Agent, L/C Issuer or a Lender to PRGX shall be deemed delivered to each Loan Partyand (c) the Administrative Agent, L/C Issuer or the Lenders may accept, and be permitted to rely on, any document, authorization,instrument or agreement executed by PRGX on behalf of each of the Loan Parties. For the avoidance of doubt, each Borrower herebyappoints PRGX, and PRGX shall act under this Agreement and the other Loan Documents, as, the agent, attorney-in-fact and legalrepresentative of all Borrowers for all purposes, including requesting loans and receiving account statements and other notices andcommunications to Borrowers (or any of them) from the Administrative Agent on behalf of the Lenders. The Borrowers acknowledgeand agree that all the Obligations are jointly and severally owing by the Borrowers. The Administrative Agent may rely, and shall befully protected in relying, on any Loan Notice, disbursement instruction, report, information or any other notice or communicationmade or given by PRGX, whether in its own name or on behalf of on behalf of one or more Borrowers, and the Administrative Agentshall not have any obligation to make any inquiry or request any confirmation from or on behalf of any other Borrower as to thebinding effect on it of any such request, instruction, report, information, other notice or communication, nor shall the joint and severalcharacter of the Borrowers’ obligations hereunder be affected, provided, that the provisions of this Section 11.23 shall not be construedso as to preclude any Borrower from taking actions permitted to be taken by a “Borrower” hereunder.[SIGNATURE PAGES FOLLOW]IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.BORROWER:PRGX GLOBAL, INC.,a Georgia corporationBy: /s/ Kurt J. Abkemeier Name: Kurt J. AbkemeierTitle: Chief Financial Officer PRGX USA, INC.,a Georgia corporationBy: /s/ Kurt J. Abkemeier Name: Kurt J. AbkemeierTitle: Chief Financial OfficerGUARANTORS:LAVANTE, INC.,a Delaware corporationBy: /s/ Kurt J. Abkemeier Name: Kurt J. AbkemeierTitle: Chief Financial Officer PRGDS, LLC,a Georgia limited liability companyBy: /s/ Kurt J. Abkemeier Name: Kurt J. AbkemeierTitle: Chief Financial Officer PRGFS, INC.,a Delaware corporationBy: /s/ Kurt J. Abkemeier Name: Kurt J. AbkemeierTitle: Chief Financial Officer PRG INTERNATIONAL, INC.,a Georgia corporationBy: /s/ Kurt J. Abkemeier Name: Kurt J. AbkemeierTitle: Chief Financial Officer PRGTS, LLC,a Georgia limited liability companyBy: /s/ Kurt J. Abkemeier Name: Kurt J. AbkemeierTitle: Chief Financial Officer PRGX ASIA, INC.,a Georgia corporationBy: /s/ Kurt J. Abkemeier Name: Kurt J. AbkemeierTitle: Chief Financial Officer PRGX AUSTRALIA, INC.,a Georgia corporationBy: /s/ Kurt J. Abkemeier Name: Kurt J. AbkemeierTitle: Chief Financial Officer PRGX BELGIUM, INC.,a Georgia corporationBy: /s/ Kurt J. Abkemeier Name: Kurt J. AbkemeierTitle: Chief Financial Officer PRGX BRASIL, LLC,a Georgia limited liability companyBy: /s/ Kurt J. Abkemeier Name: Kurt J. AbkemeierTitle: Chief Financial Officer PRGX CANADA, LLC,a Georgia limited liability companyBy: /s/ Kurt J. Abkemeier Name: Kurt J. AbkemeierTitle: Chief Financial Officer PRGX COMMERCIAL LLC,a Georgia limited liability companyBy: /s/ Kurt J. Abkemeier Name: Kurt J. AbkemeierTitle: Chief Financial Officer PRGX EUROPE, INC.,a Georgia corporationBy: /s/ Kurt J. Abkemeier Name: Kurt J. AbkemeierTitle: Chief Financial Officer PRGX FRANCE, INC.,a Georgia corporationBy: /s/ Kurt J. Abkemeier Name: Kurt J. AbkemeierTitle: Chief Financial Officer PRGX GERMANY, INC.,a Georgia corporationBy: /s/ Kurt J. Abkemeier Name: Kurt J. AbkemeierTitle: Chief Financial Officer PRGX MEXICO, INC.,a Georgia corporationBy: /s/ Kurt J. Abkemeier Name: Kurt J. AbkemeierTitle: Chief Financial Officer PRGX NETHERLANDS, INC.,a Georgia corporationBy: /s/ Kurt J. Abkemeier Name: Kurt J. AbkemeierTitle: Chief Financial Officer PRGX NEW ZEALAND, INC.,a Georgia corporationBy: /s/ Kurt J. Abkemeier Name: Kurt J. AbkemeierTitle: Chief Financial Officer PRGX PORTUGAL, INC.,a Georgia corporationBy: /s/ Kurt J. Abkemeier Name: Kurt J. AbkemeierTitle: Chief Financial Officer PRGX SCANDINAVIA, INC.,a Georgia corporationBy: /s/ Kurt J. Abkemeier Name: Kurt J. AbkemeierTitle: Chief Financial Officer PRGX SPAIN, INC.,a Georgia corporationBy: /s/ Kurt J. Abkemeier Name: Kurt J. AbkemeierTitle: Chief Financial Officer PRGX SWITZERLAND, INC.,a Georgia corporationBy: /s/ Kurt J. Abkemeier Name: Kurt J. AbkemeierTitle: Chief Financial Officer PRGX TEXAS, INC.,a Texas corporationBy: /s/ Ronald E. Stewart Name: Ronald E. StewartTitle: PresidentADMINISTRATIVEAGENT:BANK OF AMERICA, N.A.,as Administrative AgentBy: /s/ Anthony W. Kell Name: Andrew W. KellTitle: Vice PresidentLENDERS:BANK OF AMERICA, N.A.,as a Lender, L/C Issuer and Swingline LenderBy: /s/ Ryan Maples Name: Ryan MaplesTitle: Sr. Vice President SYNOVUS BANK,as a LenderBy: /s/ Matthew McKee Name: Matthew McKeeTitle: Relationship ManagerSCHEDULE 5.10 per auto for hired or non-owned$1,000Deductible / RetentionPropertyGL$10,000Federal Ins Co.Federal Ins. Co.Chubb NationalIns. Co.$1,000AutoWork CompUmbrellaForeignPackage Policy3/27/2018 -3/27/2019PolicyEffectiveDatePolicy #InsurerLimits3584-60-57 ATL3/27/2018 -3/27/2019Great Northern Ins.Co.3/27/2018 -3/27/20193/27/2018 -3/27/20197171-79-927353-30-91$10,000 unless otherwise specified24 Hr Waiting Period$25,000 per premises - Earthquake except CA & WA$50,000 per premises/per occurrence - Earthquake Sprinkler Leakage$50,000 per occurrence (48 hr waiting period - Flood (all locations unlessotherwise specified)$100,000 per occurrence (48 hr waiting period) - Flood (Santa Clara, CA)$500,000 per occurrence (72 hr waiting period) - Flood (Sacramento, CA)5% per premises/per occurrence ($25,000 min) - Wind/Hail3527-11-34Great Northern Ins.Co.$10,000$50,000$25,0003/27/2018 -3/27/20197989-45-32$1,000$1,000SCHEDULE 5.13EntityJurisdiction ofOrganizationNumber ofSharesOutstandingOwnerNumber ofShares Owned% ofOutstandingShares OwnedPRGX Global, Inc.Georgia, USA--------PRGX USA, Inc.Georgia, USA5,740,000CommonPRGX Global, Inc.5,740,000Common100%PRGDS, LLCGeorgia, USAn/aPRG International, Inc.or PRGX Global, Inc.n/a100%PRGFS, Inc.Delaware, USA1,000 CommonPRG International, Inc.1,000 Common100%PRG International, Inc.Georgia, USA100 CommonPRGX Global, Inc.100 Common100%PRG USA, Inc.Georgia, USA--PRGX Global, Inc.--100%PRGTS, LLCGeorgia, USAn/aPRGX USA, Inc.n/a100%PRGX Asia, Inc.Georgia, USA500 CommonPRGX Global, Inc.500 Common100%PRGX Acquisition Corp.Georgia, USA--PRGX Global, Inc.--100%PRGX Australia, Inc.Georgia, USA1,100 CommonPRGX Global, Inc.1,100 Common100%PRGX Belgium, Inc.Georgia, USA100 CommonPRGX Global, Inc.100 Common100%PRGX Brasil, LLCGeorgia, USAn/aPRGX Canada Corp.n/a100%PRGX Canada, LLCGeorgia, USAn/aPRGX Global, Inc.n/a100%PRGX Chile, Inc.Georgia, USA--PRGX Global, Inc.--100%PRGX Costa Rica, Inc.Georgia, USA--PRGX Global, Inc.--100%PRGX Europe, Inc.Georgia, USA100 CommonPRGX Global, Inc.100 Common100%PRGX France, Inc.Georgia, USA500 CommonPRGX Global, Inc.500 Common100%PRGX Germany, Inc.Georgia, USA100 CommonPRGX Global, Inc.100 Common100%PRGX Holdings, Inc.Georgia, USA--PRGX Global, Inc.--100%PRGX Italy, Inc.Georgia, USA--PRGX Global, Inc.--100%PRGX Mexico, Inc.Georgia, USA--PRGX Canada Corp.--100%PRGX Netherlands, Inc.Georgia, USA100 CommonPRGX Global, Inc.100 Common100%PRGX New Zealand, Inc.Georgia, USA100 CommonPRGX Global, Inc.100 Common100%PRGX Puerto Rico, Inc.Georgia, USA--PRGX Global, Inc.--100%PRGX Portugal, Inc.Georgia, USA100 CommonPRGX Global, Inc.100 Common100%PRGX Scandinavia, Inc.Georgia, USA100 CommonPRGX Global, Inc.100 Common100%PRGX Spain, Inc.Georgia, USA100 CommonPRGX Global, Inc.100 Common100%PRGX Switzerland, Inc.Georgia, USA100 CommonPRGX Global, Inc.100 Common100%PRGX Texas, Inc.Texas, USA1,500 CommonPRGX Global, Inc.1,500 Common100%PRGX Commercial LLCGeorgia, USAn/aPRGX USA, Inc.n/a100%Lavante, Inc.Delaware, USA100 CommonPRGX USA, Inc.100 Common100%PRGX Argentina S.A.Argentina12,000 cuotasPRGX Global, Inc.11,880 cuotas95% PRGX USA, Inc.120 cuotas5%PRGX Brasil Ltda.Brazil4950 quotosPRGX Brasil, LLC4,949 quotos≥ 99% PRGX USA, Inc.1 quotos≤ 1%PRGX Canada Corp.Canada1,525,217NonvotingCommon897,101 VotingCommonPRGX Canada, LLC1,525,217NonvotingCommon897,101 VotingCommon100% NonvotingCommon100% VotingCommonPRG-Schultz Suzhou' Co Ltd.China--PRGX International PTELimited--100%PRGX Shanghai CompanyLimitedChina--PRG-Schultz Suzhou'Co Ltd.--100%PRGX Colombia LtdaColombia8,303,325 cuotasPRGX Global, Inc.8,283,900 cuotas99% PRGX USA, Inc.19,425 cuotas1%PRGX CR s.r.o.Czech Republic200,000PRGX Global, Inc.200,000100%Etesius LimitedUnited Kingdom--PRGX UK Ltd--100%PRGX Deutschland GmbHGermany50,000PRGX Germany, Inc.50,000100%PRGX India Private LimitedIndia118,167PRGX Asia, Inc.118,166≥ 99.99% PRGX USA, Inc.1≤ 1%PRGX Servicios Mexico, S.de R.L. de C.V.Mexico PRGX Holdings MexicoS. de R.L. de C.V. ≥ 99% PRGX Mexico, Inc. ≤ 1%PRGX de Mexico, S. de R.L.de C.V.Mexico PRGX Holdings MexicoS. de R.L. de C.V. ≥ 99%PRGX Mexico, Inc. ≤ 1%PRGX Holdings Mexico, S.de R.L. de C.V.Mexico3,000PRGX Mexico, Inc.3,000100%Meridian Corporation LimitedIsle of Jersey11,927,177PRGX Texas, Inc.7,028,52459% PRGX Global, Inc.4,898,65341%PRGX Nederland BVNetherlands90,000PRGX Netherlands, Inc.90,000100%PRGX Polska sp. z o.o.Poland7,160PRGX Global, Inc.7,160100%PRGX International PTELimitedSingapore75,000PRGX Asia, Inc.75,000100%PRGX Svenska ABSweden700,000PRGX Global, Inc.700,000100%PRGX UK Holdings LtdUnited Kingdom--Meridian CorporationLimited--100%PRGX UK LtdUnited Kingdom--PRGX UK Holdings Ltd--100%PRG-Schultz VenezuelaS.R.L.Venezuela200 cuotasPRGX Global, Inc.199 cuotas99.5% PRGX USA, Inc.1 cuota0.5%SCHEDULE 5.17(i.) TRADEMARK OWNERTITLEReg. No.Reg. DatePRGTS, LLCPRGX®389493712/21/2010PRGTS, LLCPRGX® (Design)39808766/21/2011PRGTS, LLCThrive in the Data®51522392/28/2017Lavante, Inc.Lavante®37474592/9/2010PRGTS, LLCPRGX OPTIX®54393964/3/2018 COPYRIGHT OWNERTITLEReg. No.Reg. DatePRGX Global, Inc.AuditProTXu00071588911/30/1995PRGTS, LLCSUREF!NE(ver.3.1.1)TXu0010656324/3/2003 PATENT OWNERTITLEPatent No.Issue DateLavante, Inc.LINE ITEM MANAGEMENT SYSTEM METHOD ANDAPPARATUS1011515210/30/2018Lavante, Inc.OCR ENABLED MANAGEMENT OF ACCOUNTS PAYABLEAND/OR ACCOUNTS RECEIVABLE AUDITING DATA89964163/31/2015Lavante, Inc.METHOD AND SYSTEM OF MANAGING ACCOUNTSPAYABLE AUDITING DATA79081883/15/2011PRGTS, LLCSYSTEMS AND METHODS FOR RECOVERY AUDIT SCOPEDETERMINATION712064910/10/2006 PATENT APPLICATION OWNERTITLEApplication No.Filing DateLavante, Inc.OCR ENABLED MANAGEMENT OF ACCOUNTS PAYABLEAND/OR ACCOUNTS RECEIVABLE AUDITING DATA14/6344312/27/2015[Intentionally omitted]The disclosure in this schedule may be overinclusive. Accordingly, the listing of any particular IP Right on this schedule does notnecessarily constitute the acknowledgment or agreement of the Loan Parties that such item in fact satisfies the criteria to constitutea Material IP Right.SCHEDULE 5.20(a)LesseeLeased Real Property AddressLandlord Name and AddressPRGX USA, Inc.211 SE 34th StreetSuite 27Bentonville, AR 72712RCCP Investments, L.L.C.PO BOX 9505Fayetteville, AR 72703Lavante, Inc.5225 Hellyer Oaks BlvdSuite 200San Jose, CA 95138Hellyer Oaks Owner LLC980 Fifth AvenueSan Rafael, CA 94901PRGX Global, Inc.600 Galleria ParkwaySuite 100Atlanta, GA 30339Childress Klein Properties300 Galleria Pkwy, Suite 200Atlanta, GA 30339PRGX USA, Inc.1033 Jefferson St NWAtlanta, GA 30318Quality Technology Services (QTS)12851 Foster Street, Suite 205Overland Park, KS 66213PRGX USA, Inc.1901 E. VorheesDanville, IL 60834Genpact LLC9 Sylvan Way, Suite 165Parsippany, NJ 07054PRGX USA, Inc.2610 Horizon Drive SESuite 200Grand Rapids, MI 495462600 Horizon, L.L.C.750 Trade Centre Way, Suite 100Portage, MI 49002PRGX USA, Inc.6900 Wedgewood RoadMaple Grove, MN 55311WCC Partners, LP2970 Peachtree Road NW, Suite 805Atlanta, GA 30305PRGX USA, Inc.4504 Darrow RoadStow, OH 44224Stow Professional Center, LLC8750 River Styx RoadWadsworth, OH 44281PRGX USA, Inc.2555 Kingston RoadSuite 260York, PA 17402KM Executive Center, L.P.6259 Reynolds Mill RoadSeven Valleys, PA 17360PRGX USA, Inc.1 Bridgestone ParkNashville, TN 37214YMC Oldsmar Investments, LLC dba YMCBridgestone Investments, LLC3611 Motor Avenue, Suite 100Los Angeles, CA 90034PRGX USA, Inc.4849 Greenville AveSte 1200Dallas, TX 75206US Energy Square, LLC4925 Greenville Avenue, Suite 105Dallas, TX 75206PRGX USA, Inc.6431 Longhorn Dr.Irving, TX 75063Quality Technology Services (QTS)12851 Foster Street, Suite 205Overland Park, KS 66213SCHEDULE 5.20(b)Loan PartyJurisdiction ofOrganizationAddress/Principal place of BusinessFederal TINOrganization (SOSControl) No.PRGX Global, Inc.Georgia, USA600 Galleria Parkway, Suite 100 Atlanta, GA 3033958-2213805K602561PRGX USA, Inc.Georgia, USA600 Galleria Parkway, Suite 100 Atlanta, GA 3033958-1917267K021332PRGDS, LLCGeorgia, USA600 Galleria Parkway, Suite 100 Atlanta, GA 3033943-2093272600266PRGFS, Inc.Delaware, USA801 West Street, 2nd Floor, Wilmington, DE 1980151-03866722986065PRG International, Inc.Georgia, USA600 Galleria Parkway, Suite 100 Atlanta, GA 3033958-2341353K732287PRGTS, LLCGeorgia, USA600 Galleria Parkway, Suite 100 Atlanta, GA 3033943-2093270600268PRGX Asia, Inc.Georgia, USA600 Galleria Parkway, Suite 100 Atlanta, GA 3033958-2074456K323809PRGX Australia, Inc.Georgia, USA600 Galleria Parkway, Suite 100 Atlanta, GA 3033958-2248063K614253PRGX Belgium, Inc.Georgia, USA600 Galleria Parkway, Suite 100 Atlanta, GA 3033958-2226408K609517PRGX Brasil, LLCGeorgia, USA600 Galleria Parkway, Suite 100 Atlanta, GA 3033990-03508398020709PRGX Canada, LLCGeorgia, USA600 Galleria Parkway, Suite 100 Atlanta, GA 3033990-03508397101248PRGX Europe, Inc.Georgia, USA600 Galleria Parkway, Suite 100 Atlanta, GA 3033920-3365295542674PRGX France, Inc.Georgia, USA600 Galleria Parkway, Suite 100 Atlanta, GA 3033958-2074681K323981PRGX Germany, Inc.Georgia, USA600 Galleria Parkway, Suite 100 Atlanta, GA 3033958-2248439K619962PRGX Mexico, Inc.Georgia, USA600 Galleria Parkway, Suite 100 Atlanta, GA 3033958-1932732K103713PRGX Netherlands, Inc.Georgia, USA600 Galleria Parkway, Suite 100 Atlanta, GA 3033958-2247655K616811PRGX New Zealand,Inc.Georgia, USA600 Galleria Parkway, Suite 100 Atlanta, GA 3033958-2248046K614252PRGX Portugal, Inc.Georgia, USA600 Galleria Parkway, Suite 100 Atlanta, GA 3033958-256183429010PRGX Scandinavia, Inc.Georgia, USA600 Galleria Parkway, Suite 100 Atlanta, GA 3033958-256158829009PRGX Spain, Inc.Georgia, USA600 Galleria Parkway, Suite 100 Atlanta, GA 3033958-2461695K917375PRGX Switzerland, Inc.Georgia, USA600 Galleria Parkway, Suite 100 Atlanta, GA 3033958-2406318K828388PRGX Texas, Inc.Georgia, USA600 Galleria Parkway, Suite 100 Atlanta, GA 3033975-2965383800028200PRGX Commercial LLCGeorgia, USA600 Galleria Parkway, Suite 100 Atlanta, GA 3033945-381745511085107Lavante, Inc.Delaware, USA600 Galleria Parkway, Suite 100 Atlanta, GA 3033902-081425514008908SCHEDULE 5.20(c)Lavante, Inc. merged with Braveheart Merger Co. on October 31, 2016, with Lavante, Inc. as the surviving entity.SCHEDULE 5.20(d)CompanyAccountBankPRGX USA, Inc. Wells Fargo Brokerage ServicesPRGFS, Inc. PNC BankPRGX Global, Inc. SunTrust BankPRGX USA, Inc. SunTrust BankPRGX USA, Inc. SunTrust BankPRGX USA, Inc. SunTrust BankPRGX USA, Inc. SunTrust BankPRGX USA, Inc. SunTrust BankPRGTS, LLC SunTrust BankPRGX Commercial LLC SunTrust BankPRGX USA, Inc. SunTrust BankLavante, Inc. SunTrust BankLavante, Inc. SunTrust BankPRGX Global, Inc. Fidelity InvestmentsPRGX Global, Inc. Fidelity InvestmentsSCHEDULE 7.01None.SCHEDULE 7.02Intercompany Indebtedness and investments, in each case as existing as of the Closing Date.Shares of Delta stock held in Fidelity Investment accounts listed in Schedule 5.20(d).SCHEDULE 7.03PRGX has severance obligations of $167,869.69 to former employees.PRGX has obligations under severance agreements, as amended, between PRGX and each of PRGX's former Chairman, President andCEO, John M. Cook, and former Vice Chairman, John M. Toma, in respect of obligations to pay annual reimbursements, that began onor about February 1, 2007, to Mr. Cook and Mr. Toma for the cost of health insurance for themselves and their respective spouses (notto exceed $25,000 and $20,000, respectively, subject to adjustment based on changes in the Consumer Price Index), continuing untileach reaches the age of 80.Exhibit 1.01FORM OF SECURED PARTY DESIGNATION NOTICETO: Bank of America, N.A., as Administrative AgentRE:Credit Agreement, dated as of March 14, 2019 (as amended, restated, extended, supplemented or otherwise modified inwriting from time to time, the “Credit Agreement;” the terms defined therein being used herein as therein defined),among PRGX Global, Inc., a Georgia corporation (“PRGX”), PRGX USA, Inc., a Georgia corporation (“PUSA” andtogether with PRGX, each, a “Borrower” and collectively, the “Borrowers”), the Guarantors party thereto, the Lendersfrom time to time party thereto, and Bank of America, N.A., as Administrative AgentDATE: [Date] [Name of Cash Management Bank] (the “Secured Party”) hereby notifies you, pursuant to the terms of the Credit Agreement,that the Secured Party meets the requirements of a Cash Management Bank under the terms of the Credit Agreement and is a CashManagement Bank under the Credit Agreement and the other Loan Documents. The Secured Party hereby designates the CashManagement Agreement described on Schedule 1 hereto as a Secured Cash Management Agreement.Delivery of an executed counterpart of a signature page of this notice by fax transmission or other electronic mail transmission(e.g. “pdf” or “tif”) shall be effective as delivery of a manually executed counterpart of this notice.A duly authorized officer of the undersigned has executed this notice as of the day and year set forth above.,as a Cash Management BankBy: Name:Title:Schedule 1To Secured Party Designation NoticeExhibit 2.02FORM OF LOAN NOTICEDate: ___________, _____To:Bank of America, N.A., as Administrative AgentLadies and Gentlemen:Reference is made to that certain Credit Agreement, dated as of March 14, 2019 (as amended, restated, extended, supplemented orotherwise modified in writing from time to time, the “Credit Agreement;” the terms defined therein being used herein as thereindefined), among PRGX Global, Inc., a Georgia corporation (“PRGX”), PRGX USA, Inc., a Georgia corporation (“PUSA” and togetherwith PRGX, each, a “Borrower” and collectively, the “Borrowers”), the Guarantors party thereto, the Lenders from time to time partythereto, and Bank of America, N.A., as Administrative Agent.The undersigned hereby requests (select one):A Borrowing of Revolving LoansA conversion or continuation of Revolving Loans1. On (a Business Day).2. In the amount of in the following currency: _________.3. Comprised of . [Type of Loan requested]4. For Eurocurrency Rate Loans: with an Interest Period of ___ months.[With respect to such Borrowing, the undersigned Borrower hereby represents and warrants that (i) such request complies with therequirements of Section 2.01 of the Credit Agreement and (ii) each of the conditions set forth in Section 4.02 of the Credit Agreementhave been satisfied on and as of the date of such Borrowing.][signature page follows][PRGX GLOBAL, INC.,a Georgia corporationBy: Name:Title: ][PRGX USA, INC.,a Georgia corporationBy: Name:Title: ]Exhibit 2.04FORM OF SWINGLINE LOAN NOTICEDate: __________, 20__To: Bank of America, N.A., as Swingline LenderCc: Bank of America, N.A., as Administrative AgentRe:Credit Agreement, dated as of March 14, 2019 (as amended, restated, extended, supplemented or otherwise modified in writingfrom time to time, the “Credit Agreement”), among PRGX Global, Inc., a Georgia corporation (“PRGX”), PRGX USA, Inc., aGeorgia corporation (“PUSA” and together with PRGX, each, a “Borrower” and collectively, the “Borrowers”), the Guarantorsparty thereto, the Lenders from time to time party thereto, and Bank of America, N.A., as Administrative Agent. Capitalizedterms used but not otherwise defined herein have the meanings provided in the Credit Agreement.Ladies and Gentlemen:The undersigned hereby requests a Swingline Loan:1. On __________ , 20__ (a Business Day).2. In the amount of $__________.With respect to such Borrowing of Swingline Loans, the undersigned Borrower hereby represents and warrants that (i) such requestcomplies with the requirements of the first proviso to the first sentence of Section 2.04(a) of the Credit Agreement and (ii) each of theconditions set forth in Section 4.02 of the Credit Agreement have been satisfied on and as of the date of such Borrowing of SwinglineLoans.[signature page follows][PRGX GLOBAL, INC.,a Georgia corporationBy: Name:Title: ][PRGX USA, INC.,a Georgia corporationBy: Name:Title: ]Exhibit 2.05FORM OF NOTICE OF LOAN PREPAYMENTTO: Bank of America, N.A., as [Administrative Agent][Swingline Lender]RE:Credit Agreement, dated as of March 14, 2019 (as amended, restated, extended, supplemented or otherwise modified inwriting from time to time, the “Credit Agreement”), among PRGX Global, Inc., a Georgia corporation (“PRGX”), PRGXUSA, Inc., a Georgia corporation (“PUSA” and together with PRGX, each, a “Borrower” and collectively, the“Borrowers”), the Guarantors party thereto, the Lenders from time to time party thereto, and Bank of America, N.A., asAdministrative Agent. Capitalized terms used but not otherwise defined herein have the meanings provided in the CreditAgreement.DATE: [Date] The undersigned Borrower hereby notifies the Administrative Agent that on _____________ pursuant to the terms of Section2.05 of the Credit Agreement, the undersigned Borrower intends to prepay/repay the following Loans as more specifically set forthbelow:Optional prepayment of Revolving Loans in the following amount(s): Eurocurrency Rate Loans: [$] Applicable Interest Period: [In the following Alternative Currency: ]Base Rate Loans: $ LIBOR Daily Floating Rate Loans: $ Optional prepayment of Swingline Loans in the following amount:$ Delivery of an executed counterpart of a signature page of this notice by fax transmission or other electronic mail transmission(e.g. “pdf” or “tif”) shall be effective as delivery of a manually executed counterpart of this notice.[signature page follows][PRGX GLOBAL, INC.,a Georgia corporationBy: Name:Title: ][PRGX USA, INC.,a Georgia corporationBy: Name:Title: ]Exhibit 2.11(a)FORM OF NOTE____________, 20__FOR VALUE RECEIVED, each of the undersigned (each, a “Borrower” and collectively, the “Borrowers”), hereby promises topay to _____________________ or registered assigns (the “Lender”), in accordance with the provisions of the Credit Agreement (ashereinafter defined), the principal amount of each Loan from time to time made by the Lender to the Borrowers under that certain CreditAgreement, dated as of March 14, 2019 (as amended, restated, extended, supplemented or otherwise modified in writing from time totime, the “Credit Agreement;” the terms defined therein being used herein as therein defined), among the Borrowers, the Guarantorsparty thereto, the Lenders from time to time party thereto, and Bank of America, N.A., as Administrative Agent.Each Borrower promises to pay interest on the unpaid principal amount of each Loan from the date of such Loan until suchprincipal amount is paid in full, at such interest rates and at such times as provided in the Credit Agreement. Except as otherwiseprovided in Section 2.04(f) of the Credit Agreement with respect to Swingline Loans, all payments of principal and interest shall bemade to the Administrative Agent for the account of the Lender in the applicable currency and in Same Day Funds at the applicableAdministrative Agent’s Office. If any amount is not paid in full when due hereunder, such unpaid amount shall bear interest, to be paidupon demand, from the due date thereof until the date of actual payment (and before as well as after judgment) computed at the perannum rate set forth in the Credit Agreement.This Note is one of the Notes referred to in the Credit Agreement, is entitled to the benefits thereof and may be prepaid in wholeor in part subject to the terms and conditions provided therein. Upon the occurrence and continuation of one or more of the Events ofDefault specified in the Credit Agreement, all amounts then remaining unpaid on this Note shall become, or may be declared to be,immediately due and payable all as provided in the Credit Agreement. Loans made by the Lender shall be evidenced by one or moreloan accounts or records maintained by the Lender in the ordinary course of business. The Lender may also attach schedules to thisNote and endorse thereon the date, amount and maturity of its Loans and payments with respect thereto.Each Borrower, for itself, its successors and assigns, hereby waives diligence, presentment, protest and demand and notice ofprotest, demand, dishonor and non-payment of this Note.THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OFNEW YORK.[signature page follows]PRGX GLOBAL, INC.,a Georgia corporationBy: Name: Title:PRGX USA, INC.,a Georgia corporationBy: Name:Title:Exhibit 3.01-AFORM OFU.S. TAX COMPLIANCE CERTIFICATE(For Foreign Lenders That Are Not Partnerships For U.S. Federal Income Tax Purposes)Reference is hereby made to the Credit Agreement dated as of March 14, 2019 (as amended, supplemented or otherwisemodified from time to time, the “Credit Agreement”), among PRGX Global, Inc., a Georgia corporation (“PRGX”), PRGX USA, Inc., aGeorgia corporation (“PUSA” and together with PRGX, each, a “Borrower” and collectively, the “Borrowers”), the Guarantors partythereto, the Lenders from time to time party thereto, and Bank of America, N.A., as Administrative Agent.Pursuant to the provisions of Section 3.01(e) of the Credit Agreement, the undersigned hereby certifies that (i) it is the solerecord and beneficial owner of the Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of which it is providing thiscertificate, (ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Internal Revenue Code, (iii) it is not a ten percentshareholder of the Borrowers within the meaning of Section 871(h)(3)(B) of the Internal Revenue Code and (iv) it is not a controlledforeign corporation related to the Borrowers as described in Section 881(c)(3)(C) of the Internal Revenue Code.The undersigned has furnished the Administrative Agent and the Borrowers with a certificate of its non-U.S. Person status onIRS Form W-8BEN (or W-8BEN-E, as applicable). By executing this certificate, the undersigned agrees that (1) if the informationprovided on this certificate changes, the undersigned shall promptly so inform the Borrowers and the Administrative Agent, and (2) theundersigned shall have at all times furnished the Borrowers and the Administrative Agent with a properly completed and currentlyeffective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendaryears preceding such payments.Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to themin the Credit Agreement.[NAME OF LENDER]By: Name:Title:Date: , 20___Exhibit 3.01-BFORM OFU.S. TAX COMPLIANCE CERTIFICATE(For Foreign Participants That Are Not Partnerships For U.S. Federal Income Tax Purposes)Reference is hereby made to the Credit Agreement dated as of March 14, 2019 (as amended, supplemented or otherwisemodified from time to time, the “Credit Agreement”), among PRGX Global, Inc., a Georgia corporation (“PRGX”), PRGX USA, Inc., aGeorgia corporation (“PUSA” and together with PRGX, each, a “Borrower” and collectively, the “Borrowers”), the Guarantors partythereto, the Lenders from time to time party thereto, and Bank of America, N.A., as Administrative Agent.Pursuant to the provisions of Section 3.01(e) of the Credit Agreement, the undersigned hereby certifies that (i) it is the solerecord and beneficial owner of the participation in respect of which it is providing this certificate, (ii) it is not a bank within the meaningof Section 881(c)(3)(A) of the Internal Revenue Code, (iii) it is not a ten percent shareholder of the Borrowers within the meaning ofSection 871(h)(3)(B) of the Internal Revenue Code, and (iv) it is not a controlled foreign corporation related to the Borrowers asdescribed in Section 881(c)(3)(C) of the Internal Revenue Code.The undersigned has furnished its participating Lender with a certificate of its non-U.S. Person status on IRS Form W-8BEN (orW-8BEN-E, as applicable). By executing this certificate, the undersigned agrees that (1) if the information provided on this certificatechanges, the undersigned shall promptly so inform such Lender in writing, and (2) the undersigned shall have at all times furnishedsuch Lender with a properly completed and currently effective certificate in either the calendar year in which each payment is to bemade to the undersigned, or in either of the two calendar years preceding such payments.Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to themin the Credit Agreement.[NAME OF PARTICIPANT]By: Name:Title:Date: , 20___Exhibit 3.01-CFORM OFU.S. TAX COMPLIANCE CERTIFICATE(For Foreign Participants That Are Partnerships For U.S. Federal Income Tax Purposes)Reference is hereby made to the Credit Agreement dated as of March 14, 2019 (as amended, supplemented or otherwisemodified from time to time, the “Credit Agreement”), among PRGX Global, Inc., a Georgia corporation (“PRGX”), PRGX USA, Inc., aGeorgia corporation (“PUSA” and together with PRGX, each, a “Borrower” and collectively, the “Borrowers”), the Guarantors partythereto, the Lenders from time to time party thereto, and Bank of America, N.A., as Administrative Agent.Pursuant to the provisions of Section 3.01(e) of the Credit Agreement, the undersigned hereby certifies that (i) it is the solerecord owner of the participation in respect of which it is providing this certificate, (ii) its direct or indirect partners/members are thesole beneficial owners of such participation, (iii) with respect to such participation, neither the undersigned nor any of its direct orindirect partners/members is a bank extending credit pursuant to a loan agreement entered into in the ordinary course of its trade orbusiness within the meaning of Section 881(c)(3)(A) of the Internal Revenue Code, (iv) none of its direct or indirect partners/membersis a ten percent shareholder of the Borrowers within the meaning of Section 871(h)(3)(B) of the Internal Revenue Code and (v) none ofits direct or indirect partners/members is a controlled foreign corporation related to the Borrowers as described in Section 881(c)(3)(C)of the Internal Revenue Code.The undersigned has furnished its participating Lender with IRS Form W-8IMY accompanied by one of the following formsfrom each of its partners/members that is claiming the portfolio interest exemption: (i) an IRS Form W-8BEN (or W-8BEN-E, asapplicable) or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN (or W-8BEN-E, as applicable) from each of suchpartner’s/member’s beneficial owners that is claiming the portfolio interest exemption. By executing this certificate, the undersignedagrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform such Lender and (2) theundersigned shall have at all times furnished such Lender with a properly completed and currently effective certificate in either thecalendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to themin the Credit Agreement.[NAME OF PARTICIPANT]By: Name:Title:Date: , 20___Exhibit 3.01-DFORM OFU.S. TAX COMPLIANCE CERTIFICATE(For Foreign Lenders That Are Partnerships For U.S. Federal Income Tax Purposes)Reference is hereby made to the Credit Agreement dated as of March 14, 2019 (as amended, supplemented or otherwisemodified from time to time, the “Credit Agreement”), among PRGX Global, Inc., a Georgia corporation (“PRGX”), PRGX USA, Inc., aGeorgia corporation (“PUSA” and together with PRGX, each, a “Borrower” and collectively, the “Borrowers”), the Guarantors partythereto, the Lenders from time to time party thereto, and Bank of America, N.A., as Administrative Agent.Pursuant to the provisions of Section 3.01(e) of the Credit Agreement, the undersigned hereby certifies that (i) it is the solerecord owner of the Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of which it is providing this certificate, (ii) itsdirect or indirect partners/members are the sole beneficial owners of such Loan(s) (as well as any Note(s) evidencing such Loan(s)), (iii)with respect to the extension of credit pursuant to this Credit Agreement or any other Loan Document, neither the undersigned nor anyof its direct or indirect partners/members is a bank extending credit pursuant to a loan agreement entered into in the ordinary course ofits trade or business within the meaning of Section 881(c)(3)(A) of the Internal Revenue Code, (iv) none of its direct or indirectpartners/members is a ten percent shareholder of the Borrowers within the meaning of Section 871(h)(3)(B) of the Internal RevenueCode and (v) none of its direct or indirect partners/members is a controlled foreign corporation related to the Borrowers as described inSection 881(c)(3)(C) of the Internal Revenue Code.The undersigned has furnished the Administrative Agent and the Borrowers with IRS Form W-8IMY accompanied by one of thefollowing forms from each of its partners/members that is claiming the portfolio interest exemption: (i) an IRS Form W-8BEN (or W-8BEN-E, as applicable) or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN (or W-8BEN-E, as applicable) from eachof such partner’s/member’s beneficial owners that is claiming the portfolio interest exemption. By executing this certificate, theundersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform theBorrowers and the Administrative Agent, and (2) the undersigned shall have at all times furnished the Borrowers and the AdministrativeAgent with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made tothe undersigned, or in either of the two calendar years preceding such payments. Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to themin the Credit Agreement.[NAME OF LENDER]By: Name:Title:Date: , 20___Exhibit 6.02FORM OF COMPLIANCE CERTIFICATE Check for distribution to public and private side LendersFor the fiscal [quarter][year] ended _________________, 20___.I, ______________________, [Title] of PRGX Global, Inc. (the “Company”) hereby certify that, to the best of my knowledgeand belief, with respect to that certain Credit Agreement dated as of March 14, 2019 (as amended, modified, restated or supplementedfrom time to time, the “Credit Agreement”; all of the defined terms in the Credit Agreement are incorporated herein by reference)among the Company, PRGX USA, Inc., the Guarantors party thereto, the Lenders from time to time party thereto, and Bank of America,N.A., as Administrative Agent:[Use following paragraph (a) for fiscal year-end financial statements](a) The Company has delivered the year-end audited financial statements required by Section 6.01(a) of theCredit Agreement for the fiscal year of the Company ended as of the above date, together with the report and opinion ofan independent certified public accountant required by such section.[Use following paragraph (a) for fiscal quarter-end financial statements](a) The Company has delivered the unaudited financial statements required by Section 6.01(b) of the CreditAgreement for the fiscal quarter of the Company ended as of the above date. Such consolidated financial statementsfairly present the financial condition, results of operations and cash flows of the Company and its Subsidiaries inaccordance with GAAP as at such date and for such period, subject only to normal year-end audit adjustments and theabsence of footnotes. (b) Since ___________ (the date of the last similar certification, or, if none, the Closing Date) no Default orEvent of Default has occurred under the Credit Agreement;(c) (select one): Attached hereto are such supplements to Schedules 5.13 (Subsidiaries), 5.20(a) (Locations of Real Property),5.20(b) (Location of Chief Executive Office, Taxpayer Identification Number, Etc.), 5.20(c) (Changes in Legal Name,State of Formation and Structure) and 5.20(d) (Deposit and Investment Accounts) of the Credit Agreement, such that, assupplemented, such Schedules are accurate and complete as of the date hereof; and, if a supplement had been requestedby the Administrative Agent under Section 6.02(b) of the Credit Agreement, Schedule 5.17 (IP Rights) of the CreditAgreement such that, as supplemented, such Schedule is accurate and complete as of the date hereof. No such supplements are required at this time.Delivered herewith are detailed calculations demonstrating compliance by the Loan Parties with the financial covenantscontained in Section 7.11 of the Credit Agreement as of the end of the fiscal period referred to above.[signature page follows]This ______ day of ___________, 20__.PRGX GLOBAL, INC. PRGX GLOBAL, INC.,a Georgia corporationBy: Name:Title: Attachment to Compliance CertificateComputation of Financial CovenantsExhibit 6.13FORM OF JOINDER AGREEMENTTHIS JOINDER AGREEMENT (the “Joinder Agreement”), dated as of _____________, 20__, is by and between_____________________, a ___________________ (the “New Subsidiary”), and BANK OF AMERICA, N.A., in its capacity asAdministrative Agent under that certain Credit Agreement (as it may be amended, modified, restated or supplemented from time totime, the “Credit Agreement”), dated as of March 14, 2019, by and among PRGX Global, Inc., a Georgia corporation (“PRGX”), PRGXUSA, Inc., a Georgia corporation (“PUSA” and together with PRGX, each, a “Borrower” and collectively, the “Borrowers”), theGuarantors party thereto, the Lenders from time to time party thereto, and Bank of America, N.A., as Administrative Agent. All of thedefined terms in the Credit Agreement are incorporated herein by reference.The Loan Parties are required by Section 6.13 of the Credit Agreement to cause the New Subsidiary to become a“Guarantor”.Accordingly, the New Subsidiary hereby agrees as follows with the Administrative Agent, for the benefit of the Lenders:1. The New Subsidiary hereby acknowledges, agrees and confirms that, by its execution of this Joinder Agreement,the New Subsidiary will be deemed to be a party to the Credit Agreement and a “Guarantor” for all purposes of the Credit Agreement,and shall have all of the obligations of a Guarantor thereunder as if it had executed the Credit Agreement. The New Subsidiary herebyratifies, as of the date hereof, and agrees to be bound by, all of the terms, provisions and conditions applicable to the Guarantorscontained in the Credit Agreement. Without limiting the generality of the foregoing terms of this paragraph 1, the New Subsidiaryhereby jointly and severally together with the other Guarantors, guarantees to each Lender and the Administrative Agent, as provided inArticle X of the Credit Agreement, the prompt payment of the Obligations in full when due (whether at stated maturity, as a mandatoryprepayment, by acceleration, a mandatory cash collateralization or otherwise) strictly in accordance with the terms thereof.2. The New Subsidiary hereby acknowledges, agrees and confirms that, by its execution of this Joinder Agreement,the New Subsidiary will be deemed to be a party to the Security Agreement, and shall have all the obligations of an “Obligor” (as suchterm is defined in the Security Agreement) thereunder as if it had executed the Security Agreement. The New Subsidiary hereby ratifies,as of the date hereof, and agrees to be bound by, all of the terms, provisions and conditions contained in the Security Agreement.Without limiting generality of the foregoing terms of this paragraph 2, the New Subsidiary hereby grants to the Administrative Agent,for the benefit of the holders of the Secured Obligations (as such term is defined in Section 1 of the Security Agreement), a continuingsecurity interest in, and a right of set off against any and all right, title and interest of the New Subsidiary in and to the Collateral (assuch term is defined in Section 2 of the Security Agreement) of the New Subsidiary. The New Subsidiary hereby represents andwarrants to the Administrative Agent, for the benefit of the holders of the Secured Obligations (as such term is defined in Section 1 ofthe Security Agreement), that:(i) The New Subsidiary’s chief executive office, tax payer identification number, organizationidentification number, and chief place of business are (and for the prior four months have been) located at the locations set forthon Schedule 1 attached hereto and the New Subsidiary keeps its books and records at such locations.(ii) The location of all owned and leased real property of the New Subsidiary is as shown onSchedule 2 attached hereto.(iii) The New Subsidiary’s legal name and jurisdiction of organization is as shown in this JoinderAgreement and the New Subsidiary has not in the past four months changed its name, been party to a merger, consolidation orother change in structure or used any tradename except as set forth in Schedule 3 attached hereto.(iv) The patents, copyrights, and trademarks listed on Schedule 4 attached hereto constitute all of theregistrations and applications for the patents, copyrights and trademarks owned by the New Subsidiary.(v) The deposit accounts and investment accounts listed on Schedule 5 attached hereto constitute all ofthe deposit accounts and investment accounts owned by the New Subsidiary.(vi) Schedule 6 attached hereto sets forth a complete and accurate list of (i) any Pledged Equity ownedby the New Subsidiary that is required to be pledged and delivered to the Administrative Agent pursuant to the SecurityAgreement and (ii) any Instruments, Documents and Tangible Chattel Paper constituting Collateral owned by the NewSubsidiary that are required to be pledged and delivered to the Administrative Agent pursuant to Section 4(a)(i) of the SecurityAgreement.3. The address of the New Subsidiary for purposes of all notices and other communications is____________________, ____________________________, Attention of ______________ (Facsimile No. ____________).4. The New Subsidiary hereby waives acceptance by the Administrative Agent and the Lenders of the guaranty by theNew Subsidiary under Article X of the Credit Agreement upon the execution of this Joinder Agreement by the New Subsidiary.5. This Joinder Agreement may be executed in two or more counterparts, each of which shall constitute an original butall of which when taken together shall constitute one contract.6. This Joinder Agreement shall be governed by and construed and interpreted in accordance with the laws of the Stateof New York.[signature page follows]IN WITNESS WHEREOF, the New Subsidiary has caused this Joinder Agreement to be duly executed by its authorizedofficers, and the Administrative Agent, for the benefit of the Lenders, has caused the same to be accepted by its authorized officer, as ofthe day and year first above written. [NEW SUBSIDIARY]By: Name: Title: Acknowledged and accepted: BANK OF AMERICA, N.A.,as Administrative AgentBy: Name: Title: Schedule 1TO FORM OF JOINDER AGREEMENT[Chief Executive Office, Tax Identification Number, Organization Identification Numberand Chief Place of Business of New Subsidiary]Schedule 2TO FORM OF JOINDER AGREEMENT[Owned and Leased Real Property]Schedule 3TO FORM OF JOINDER AGREEMENT[Tradenames]Schedule 4TO FORM OF JOINDER AGREEMENT[Patents, Copyrights, and Trademarks]Schedule 5TO FORM OF JOINDER AGREEMENT[Deposit and Investment Accounts]Exhibit 11.06(b)FORM OF ASSIGNMENT AND ASSUMPTIONThis Assignment and Assumption (this “Assignment and Assumption”) is dated as of the Effective Date set forth below and isentered into by and between [Insert name of Assignor] (the “Assignor”) and [Insert name of Assignee] (the “Assignee”). Capitalizedterms used but not defined herein shall have the meanings given to them in the Credit Agreement identified below (as amended, the“Credit Agreement”), receipt of a copy of which is hereby acknowledged by the Assignee. The Standard Terms and Conditions set forthin Annex 1 attached hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment andAssumption as if set forth herein in full.For an agreed consideration, the Assignor hereby irrevocably sells and assigns to the Assignee, and the Assignee herebyirrevocably purchases and assumes from the Assignor, subject to and in accordance with the Standard Terms and Conditions and theCredit Agreement, as of the Effective Date inserted by the Administrative Agent as contemplated below (i) all of the Assignor’s rightsand obligations as a Lender under the Credit Agreement and any other documents or instruments delivered pursuant thereto in theamount[s] and equal to the percentage interest[s] identified below of all the outstanding rights and obligations under the respectivefacilities identified below (including, without limitation, Letters of Credit, Guarantees and Swingline Loans included in such facilities)and (ii) to the extent permitted to be assigned under applicable law, all claims, suits, causes of action and any other right of the Assignor(in its capacity as a Lender) against any Person, whether known or unknown, arising under or in connection with the Credit Agreement,any other documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in any way based on orrelated to any of the foregoing, including, but not limited to, contract claims, tort claims, malpractice claims, statutory claims and allother claims at law or in equity related to the rights and obligations sold and assigned pursuant to clause (i) above (the rights andobligations sold and assigned pursuant to clauses (i) and (ii) above being referred to herein collectively as, the “Assigned Interest”).Such sale and assignment is without recourse to the Assignor and, except as expressly provided in this Assignment and Assumption,without representation or warranty by the Assignor.1. Assignor: ______________________________[Assignor [is][is not] a Defaulting Lender.]2.Assignee: ______________________________[and is an Affiliate/Approved Fund of [identify Lender]]3.Borrowers: PRGX Global, Inc., a Georgia corporation, and PRGX USA, Inc., a Georgia corporation4.Administrative Agent: Bank of America, N.A., as the administrative agent under the Credit Agreement5.Credit Agreement: Credit Agreement dated as of March 14, 2019 among the Borrowers, the Guarantors party thereto, the Lendersfrom time to time party thereto and Bank of America, N.A., as Administrative Agent6.Assigned Interest: Aggregate Amount ofCommitment/Loans for allLenders*Amount of Commitment/LoansAssigned*Percentage Assigned ofCommitment/Loans$$ %$$ %$$ %[7. Trade Date: ______________]Effective Date: _____________ ___, 20___ [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL BE THEEFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.][signature page follows]The terms set forth in this Assignment and Assumption are hereby agreed to:ASSIGNOR[NAME OF ASSIGNOR]By:______________________________Title:ASSIGNEE[NAME OF ASSIGNEE]By:______________________________Title:[Consented to and] Accepted:BANK OF AMERICA, N.A. asAdministrative AgentBy_________________________________Title:[Consented to:][BANK OF AMERICA, N.A., as L/C Issuer][and Swingline Lender]By________________________________Title:][PRGX GLOBAL, INC.a Georgia corporationBy________________________________Title:]ANNEX 1STANDARD TERMS AND CONDITIONS FORASSIGNMENT AND ASSUMPTION1. Representations and Warranties.1.1. Assignor. The Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of the AssignedInterest, (ii) the Assigned Interest is free and clear of any lien, encumbrance or other adverse claim, (iii) it has full power and authority,and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactionscontemplated hereby and (iv) it is [not] a Defaulting Lender; and (b) assumes no responsibility with respect to (i) any statements,warranties or representations made in or in connection with the Credit Agreement or any other Loan Document, (ii) the execution,legality, validity, enforceability, genuineness, sufficiency or value of the Loan Documents or any collateral thereunder, (iii) the financialcondition of the Borrowers, any of their Subsidiaries or Affiliates or any other Person obligated in respect of any Loan Document or (iv)the performance or observance by either Borrower, any of their Subsidiaries or Affiliates or any other Person of any of their respectiveobligations under any Loan Document.1.2. Assignee. The Assignee (a) represents and warrants that (i) it has full power and authority, and has taken all actionnecessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and tobecome a Lender under the Credit Agreement, (ii) it meets the requirements to be an assignee under Section 11.06(b)(iii) and (v) of theCredit Agreement (subject to such consents, if any, as may be required under Section 11.06(b)(iii) of the Credit Agreement), (iii) fromand after the Effective Date, it shall be bound by the provisions of the Credit Agreement as a Lender thereunder and, to the extent of theAssigned Interest, shall have the obligations of a Lender thereunder, (iv) it is sophisticated with respect to decisions to acquire assets ofthe type represented by the Assigned Interest and either it, or the Person exercising discretion in making its decision to acquire theAssigned Interest, is experienced in acquiring assets of such type, (v) it has received a copy of the Credit Agreement, and has receivedor has been accorded the opportunity to receive copies of the most recent financial statements delivered pursuant to Section 6.01thereof, as applicable, and such other documents and information as it deems appropriate to make its own credit analysis and decisionto enter into this Assignment and Assumption and to purchase the Assigned Interest, (vi) it has, independently and without relianceupon the Administrative Agent or any other Lender and based on such documents and information as it has deemed appropriate, madeits own credit analysis and decision to enter into this Assignment and Assumption and to purchase the Assigned Interest, and (vii) if it isa Foreign Lender, attached hereto is any documentation required to be delivered by it pursuant to the terms of the Credit Agreement,duly completed and executed by the Assignee; and (b) agrees that (i) it will, independently and without reliance on the AdministrativeAgent, the Assignor or any other Lender, and based on such documents and information as it shall deem appropriate at the time,continue to make its own credit decisions in taking or not taking action under the Loan Documents, and (ii) it will perform inaccordance with their terms all of the obligations which by the terms of the Loan Documents are required to be performed by it as aLender. The Assignee represents and warrants as of the Effective Date that it is not (A) an employee benefit plan subject to Title I ofERISA, (B) a plan or account subject to Section 4975 of the Internal Revenue Code, (C) an entity deemed to hold “plan assets” of anysuch plans or accounts for purposes of ERISA or the Internal Revenue Code, or (D) a “governmental plan” within the meaning ofERISA.2. Payments. From and after the Effective Date, the Administrative Agent shall make all payments in respect of theAssigned Interest (including payments of principal, interest, fees and other amounts) to the Assignor for amounts which have accrued tobut excluding the Effective Date and to the Assignee for amounts which have accrued from and after the Effective Date.Notwithstanding the foregoing, the Administrative Agent shall make all payments of interest, fees or other amounts paid or payable inkind from and after the Effective Date to the Assignee.3. General Provisions. This Assignment and Assumption shall be binding upon, and inure to the benefit of, the partieshereto and their respective successors and assigns. This Assignment and Assumption may be executed in any number of counterparts,which together shall constitute one instrument. Delivery of an executed counterpart of a signature page of this Assignment andAssumption by telecopy shall be effective as delivery of a manually executed counterpart of this Assignment and Assumption. ThisAssignment and Assumption shall be governed by, and construed in accordance with, the law of the State of New York.Exhibit 11.06(b)(iv)FORM OF ADMINISTRATIVE QUESTIONNAIRE(See attached.)SECURITY AND PLEDGE AGREEMENTTHIS SECURITY AND PLEDGE AGREEMENT (this “Agreement”) is entered into as of March 14, 2019 among PRGX Global,Inc., a Georgia corporation (“PRGX”), PRGX USA, Inc., a Georgia corporation (“PUSA”, and together with PRGX, individually, a“Borrower” and, collectively, the “Borrowers”), the other parties identified as “Obligors” on the signature pages hereto and such otherparties that may become Obligors hereunder after the date hereof (together with the Borrowers, individually, an “Obligor”, and,collectively, the “Obligors”) and Bank of America, N.A., in its capacity as administrative agent (in such capacity, the “AdministrativeAgent”) for the holders of the Secured Obligations (defined below).RECITALSWHEREAS, pursuant to that certain Credit Agreement, dated as of the date hereof (as amended, modified, supplemented,increased, extended, restated, renewed, refinanced or replaced from time to time, the “Credit Agreement”) among the Borrowers, theGuarantors identified therein, the Lenders identified therein and the Administrative Agent, the Lenders have agreed to make Loans andissue Letters of Credit upon the terms and subject to the conditions set forth therein; andWHEREAS, this Agreement is required by the terms of the Credit Agreement.NOW, THEREFORE, in consideration of these premises and other good and valuable consideration, the receipt and sufficiencyof which are hereby acknowledged, the parties hereto agree as follows:1.Definitions.(a) Capitalized terms used and not otherwise defined herein shall have the meanings ascribed to such terms in theCredit Agreement, and the following terms shall have the meanings set forth in Article 9 (or, if not defined therein, then Article8 or, if not defined therein, then Section 1-201) of the UCC (defined below): Accession, Adverse Claim, As-ExtractedCollateral, Chattel Paper, Commercial Tort Claim, Consumer Goods, Deposit Account, Document, Electronic Chattel Paper,Equipment, Farm Products, Financial Asset, Fixtures, General Intangible, Goods, Instrument, Inventory, Investment CompanySecurity, Investment Property, Letter-of-Credit Right, Manufactured Home, Money, Proceeds, Securities Account, SecurityEntitlement, Security, Software, Supporting Obligation and Tangible Chattel Paper.(b) In addition, the following terms shall have the meanings set forth below:“Collateral” has the meaning provided in Section 2 hereof.“Copyright License” means any written agreement, naming any Obligor as licensor, granting any right under anyCopyright.“Copyrights” means (a) all registered United States copyrights in all Works, now existing or hereafter created oracquired, all registrations and recordings thereof, and all applications in connection therewith, including, without limitation,registrations, recordings and applications in the United States Copyright Office, and (b) all renewals thereof.“Patent License” means any agreement, whether written or oral, providing for the grant by or to an Obligor of any rightto manufacture, use or sell any invention covered by a Patent.“Patents” means (a) all letters patent of the United States or any other country and all reissues and extensions thereof,and (b) all applications for letters patent of the United States or any other country and all divisions, continuations andcontinuations-in-part thereof.“Pledged Equity” means, with respect to each applicable Obligor, (i) 100% of the issued and outstanding EquityInterests in each Domestic Subsidiary (unless an Immaterial Subsidiary) of PRGX that is directly owned by such Obligor and(ii) 65% of the issued and outstanding Equity Interests in each first tier Foreign Subsidiary (unless an Immaterial Subsidiary) ofPRGX that is directly owned by such Obligor, including the Equity Interests of the Subsidiaries owned by such Obligor andreflected as pledged by such Obligor as set forth on Schedule 1(b) hereto, in each case together with the certificates (or otheragreements or instruments), if any, representing such shares, and all options and other rights, contractual or otherwise, withrespect thereto, including, but not limited to, the following:(1) all Equity Interests representing a dividend thereon, or representing a distribution or return of capital uponor in respect thereof, or resulting from a stock split, revision, reclassification or other exchange therefor, and anysubscriptions, warrants, rights or options issued to the holder thereof, or otherwise in respect thereof; and(2) in the event of any consolidation or merger involving the issuer thereof and in which such issuer is not thesurviving Person, all shares of each class of the Equity Interests of the successor Person formed by or resulting fromsuch consolidation or merger, to the extent that such successor Person is a direct Subsidiary of an Obligor; provided,however, for purposes of clarity, the extent of the Equity Interests of the successor Person that constitutes “PledgedEquity” shall be subject to the limitations set forth in clauses (i) and (ii) of this definition.For the avoidance of doubt, “Pledged Equity” shall not include any Excluded Property.“Secured Obligations” means, without duplication, (a) all Obligations and (b) all costs and expenses incurred inconnection with enforcement and collection of the Obligations, including the reasonable fees, charges and disbursements ofcounsel to the extent reimbursable by the Borrowers in accordance with the Credit Agreement.“Trademark License” means any agreement, written or oral, providing for the grant by or to an Obligor of any right touse any Trademark.“Trademarks” means (a) all trademarks, trade names, corporate names, company names, business names, fictitiousbusiness names, trade styles, service marks, logos and other source or business identifiers, and the goodwill associatedtherewith, now existing or hereafter adopted or acquired, all registrations and recordings thereof, and all applications inconnection therewith, whether in the United States Patent and Trademark Office or in any similar office or agency of the UnitedStates, any state thereof or any other country or any political subdivision thereof, or otherwise and (b) all renewals thereof.“UCC” means the Uniform Commercial Code as in effect from time to time in the state of New York except as such termmay be used in connection with the perfection of the Collateral and then the applicable jurisdiction with respect to such affectedCollateral shall apply.“Work” means any work that is subject to copyright protection pursuant to Title 17 of the United States Code.2. Grant of Security Interest in the Collateral. To secure the prompt payment and performance in full when due, whether bylapse of time, acceleration, mandatory prepayment or otherwise, of the Secured Obligations, each Obligor hereby grants to theAdministrative Agent, for the benefit of the holders of the Secured Obligations, a continuing security interest in, and a right to set offagainst, any and all right, title and interest of such Obligor in and to all of the following, whether now owned or existing or owned,acquired, or arising hereafter (collectively, the “Collateral”): (a) all Accounts; (b) all Chattel Paper; (c) those certain Commercial TortClaims set forth on Schedule 2(c) hereto; (d) all Copyrights; (e) all Copyright Licenses; (f) all Deposit Accounts; (g) all Documents; (h)all Equipment; (i) all Fixtures; (j) all General Intangibles (excluding Equity Interests in any Subsidiary except insofar as such EquityInterests constitute Pledged Equity); (k) all Instruments; (l) all Inventory; (m) all Investment Property (excluding Equity Interests in anySubsidiary except insofar as such Equity Interests constitute Pledged Equity); (n) all Letter-of-Credit Rights; (o) all Money; (p) allPatents; (q) all Patent Licenses; (r) all Pledged Equity; (s) all Software; (t) all Supporting Obligations; (u) all Trademarks; (v) allTrademark Licenses; and (w) all Accessions and all Proceeds of any and all of the foregoing.Notwithstanding anything to the contrary contained herein, (x) the security interests granted under this Agreement shall notextend to any Excluded Property, (y) the term “Collateral” shall not include any such Excluded Property and (z) the foregoing right ofset off is subject to the provisions of Section 11.08 of the Credit Agreement.The Obligors and the Administrative Agent, on behalf of the holders of the Secured Obligations, hereby acknowledge and agreethat the security interest created hereby in the Collateral (i) constitutes continuing collateral security for all of the Secured Obligations,whether now existing or hereafter arising and (ii) is not to be construed as an assignment of any Copyrights, Copyright Licenses,Patents, Patent Licenses, Trademarks or Trademark Licenses.3. Representations and Warranties. Each Obligor hereby represents and warrants to the Administrative Agent, for the benefit ofthe holders of the Secured Obligations, that:(a) Ownership. Each Obligor is the legal and beneficial owner of the Collateral in which it is granting a security interesthereunder, and has the right to grant such security interest therein. There exists no Adverse Claim with respect to the PledgedEquity pledged by such Obligor.(b) Security Interest/Priority. This Agreement creates a valid security interest in favor of the Administrative Agent, forthe benefit of the holders of the Secured Obligations, in the Collateral pledged by such Obligor, and, when properly perfectedby filing, shall constitute a valid and perfected, first priority security interest in such Collateral (including all uncertificatedPledged Equity consisting of partnership or limited liability company interests that do not constitute Securities), to the extentsuch security interest can be perfected by filing under the UCC, free and clear of all Liens except for Permitted Liens. Thetaking possession by the Administrative Agent of the certificated Securities (if any) evidencing the Pledged Equity pledged bysuch Obligor and all other Instruments constituting Collateral will perfect and establish the first priority of the AdministrativeAgent’s security interest in all such Pledged Equity evidenced by such certificated Securities and such Instruments.(c) Types of Collateral. None of the Collateral consists of, or is the Proceeds of, and the Administrative Agent is notbeing granted a security interest in, As-Extracted Collateral, Consumer Goods, Farm Products, Manufactured Homes or standingtimber.(d) Equipment and Inventory. With respect to any Equipment and/or Inventory of an Obligor included as Collateral,each such Obligor has exclusive possession and control of such Equipment and Inventory of such Obligor except for (i)Equipment leased by such Obligor as a lessee or (ii) Equipment or Inventory in transit with common carriers. No Inventory ofan Obligor is held by a Person other than an Obligor pursuant to consignment, sale or return, sale on approval or similararrangement.(e) Authorization of Pledged Equity. All Pledged Equity is duly authorized and validly issued, is fully paid and, to theextent applicable, nonassessable and is not subject to the preemptive rights of any Person.(f) No Other Equity Interests, Instruments, Etc. As of the Closing Date, (i) no Obligor owns any certificated EquityInterests in any Subsidiary that constitute Securities and are required to be pledged and delivered to the Administrative Agenthereunder except as set forth on Schedule 1(b) hereto, and (ii) no Obligor holds any Instruments, Documents or TangibleChattel Paper required to be pledged and delivered to the Administrative Agent pursuant to Section 4(a)(i) of this Agreementother than as set forth on Schedule 3(f) hereto. All such certificated Securities, Instruments, Documents and Tangible ChattelPaper have been delivered to the Administrative Agent.(g) Partnership and Limited Liability Company Interests. Except as previously disclosed to the Administrative Agent,none of the Collateral consisting of an interest in a partnership or a limited liability company (i) is dealt in or traded on asecurities exchange or in a securities market, (ii) by its terms expressly provides that it is a Security governed by Article 8 of theUCC, (iii) is an Investment Company Security, (iv) is held in a Securities Account or (v) constitutes a Security.(h) [Reserved].(i) Consents; Etc. There are no restrictions in any Organization Document governing any Pledged Equity or any otherdocument related thereto which would limit or restrict (i) the grant of a Lien pursuant to this Agreement on such Pledged Equity,(ii) the perfection of such Lien or (iii) the exercise of remedies in respect of such perfected Lien in such Pledged Equity ascontemplated by this Agreement. Except for (i) the filing or recording of UCC financing statements, (ii) the filing of appropriatenotices with the United States Patent and Trademark Office and the United States Copyright Office, (iii) obtaining control toperfect the Liens created by this Agreement (to the extent required under Section 4(a) hereof), (iv) such actions as may berequired by Laws affecting the offering and sale of securities, (v) such actions as may be required by applicable foreign Lawsaffecting the pledge of the Pledged Equity of Foreign Subsidiaries and (vi) consents, authorizations, filings or other actionswhich have been obtained or made, no consent or authorization of, filing with, or other act by or in respect of, any arbitrator orGovernmental Authority and no consent of any other Person (including, without limitation, any stockholder, member or creditorof such Obligor), is required for (A) the grant by such Obligor of the security interest in the Collateral granted hereby or for theexecution, delivery or performance of this Agreement by such Obligor, (B) the perfection of such security interest (to the extentsuch security interest can be perfected by filing under the UCC), the granting of control (to the extent required underSection 4(a) hereof) or by filing an appropriate notice with the United States Patent and Trademark Office or the United StatesCopyright Office) or (C) subject to compliance with applicable foreclosure Laws, the exercise by the Administrative Agent or,subject to Section 21, the Required Lenders of the rights and remedies provided for in this Agreement.(j) Commercial Tort Claims. As of the Closing Date, no Obligor has any Commercial Tort Claims seeking damages inexcess of $50,000 other than as set forth on Schedule 2(c) hereto.(k) Copyrights, Patents and Trademarks.(i) To the best of each Obligor’s knowledge, each material U.S. Copyright, each U.S. Patent and each U.S.Trademark of such Obligor is valid, subsisting, unexpired, enforceable and has not been abandoned.(ii) To the best of each Obligor’s knowledge, no holding, decision or judgment has been rendered by anyGovernmental Authority that would limit, cancel or question the validity of any Copyright, Patent or Trademarkreferenced in clause (i) of any Obligor.(iii) No action or proceeding is pending seeking to limit, cancel or question the validity of any Copyright,Patent or Trademark referenced in clause (i) of any Obligor, or that, if adversely determined, could reasonably beexpected to have a material adverse effect on the value of any Copyright, Patent or Trademark referenced in clause (i) ofany Obligor.(iv) All applications pertaining to the Copyrights, Patents and Trademarks referenced in clause (i) of eachObligor have been duly and properly filed, and all registrations or letters pertaining to such Copyrights, Patents andTrademarks have been duly and properly filed and issued.(v) No Obligor has made any assignment or agreement in conflict with the security interest in the Copyrights,Patents or Trademarks of any Obligor hereunder.4. Covenants. Each Obligor covenants that until the Facility Termination Date has occurred, such Obligor shall:(a) Instruments/Chattel Paper/Pledged Equity/Control.(i) If any amount in excess of $50,000 payable under or in connection with any of the Collateral shall be orbecome evidenced by any Instrument or Tangible Chattel Paper, or if any property constituting Collateral with a fairmarket value (as reasonably determined by the Borrowers) in excess of $50,000 shall be stored or shipped subject to aDocument, ensure that such Instrument, Tangible Chattel Paper or Document is either in the possession of such Obligorat all times or, if requested by the Administrative Agent to perfect its security interest in such Collateral, is delivered tothe Administrative Agent duly endorsed in a manner satisfactory to the Administrative Agent. Such Obligor shall ensurethat any Collateral consisting of Tangible Chattel Paper relating to an amount payable in excess of $50,000 is markedwith a legend acceptable to the Administrative Agent indicating the Administrative Agent’s security interest in suchTangible Chattel Paper.(ii) In accordance with the provisions of Section 6.14(a) of the Credit Agreement, deliver to the AdministrativeAgent promptly upon the receipt thereof by or on behalf of an Obligor, all Securities certificates and instrumentsconstituting Pledged Equity. Prior to delivery to the Administrative Agent, all such certificates constituting PledgedEquity shall be held in trust by such Obligor for the benefit of the Administrative Agent pursuant hereto. All suchcertificates representing Pledged Equity shall be delivered in suitable form for transfer by delivery or shall beaccompanied by duly executed instruments of transfer or assignment in blank, substantially in the form provided inExhibit 4(a)(ii) hereto or such other form as is reasonably acceptable to the Administrative Agent.(iii) Execute and deliver all agreements, assignments, instruments or other documents as reasonably requestedby the Administrative Agent for the purpose of obtaining and maintaining control with respect to any Collateralconsisting of (i) Investment Property (excluding Equity Interests in any Subsidiary except insofar as such EquityInterests constitute Pledged Equity), (ii) Letter-of-Credit Rights and (iii) Electronic Chattel Paper.(b) Filing of Financing Statements, Notices, etc. Except as otherwise provided in this Agreement and the other LoanDocuments, each Obligor shall execute and deliver to the Administrative Agent such agreements, assignments or instruments(including affidavits, notices, reaffirmations and amendments and restatements of existing documents, as the AdministrativeAgent may reasonably request) and do all such other things as the Administrative Agent may reasonably deem necessary orappropriate: (i) to assure to the Administrative Agent its security interests hereunder, including (A) such instruments as theAdministrative Agent may from time to time reasonably request in order to perfect and maintain the security interests grantedhereunder in accordance with the UCC, (B) with regard to U.S. registrations and applications for Copyrights, a Notice of Grantof Security Interest in Copyrights in the form of Exhibit 4(b)(iii), (C) with regard to U.S. registrations and applications forPatents, a Notice of Grant of Security Interest in Patents for filing with the United States Patent and Trademark Office in the formof Exhibit 4(b)(i) hereto and (D) with regard to U.S. registrations and applications for Trademarks, a Notice of Grant of SecurityInterest in Trademarks for filing with the United States Patent and Trademark Office in the form of Exhibit 4(b)(ii) hereto; (ii) toconsummate the transactions contemplated hereby; and (iii) to otherwise protect and assure the Administrative Agent of itsrights and interests hereunder. Furthermore, each Obligor also hereby irrevocably makes, constitutes and appoints theAdministrative Agent, its nominee or any sub agents appointed by the Administrative Agent, as such Obligor’s attorney in factwith full power and for the limited purpose to sign in the name of such Obligor any financing statements, or amendments andsupplements to financing statements, renewal financing statements, notices or any similar documents which in theAdministrative Agent’s reasonable discretion would be necessary or appropriate in order to perfect and maintain perfection ofthe security interests granted hereunder, such power, being coupled with an interest, being and remaining irrevocable until theFacility Termination Date has occurred.(c) Collateral Held by Warehouseman, Bailee, etc. If any Collateral is at any time in the possession or control of awarehouseman, bailee or any agent or processor of such Obligor and the Administrative Agent so requests (i) notify suchPerson in writing of the Administrative Agent’s security interest therein, (ii) instruct such Person to hold all such Collateral forthe Administrative Agent’s account and subject to the Administrative Agent’s instructions and (iii) use commercially reasonableefforts to obtain a written acknowledgment from such Person that it is holding such Collateral for the benefit of theAdministrative Agent.(d) Commercial Tort Claims. (i) Promptly forward to the Administrative Agent an updated Schedule 2(c) listing anyand all Commercial Tort Claims by or in favor of such Obligor seeking damages in excess of $50,000 and (ii) execute anddeliver such statements, documents and notices and do and cause to be done all such things as may be required by theAdministrative Agent, or required by Law to create, preserve, perfect and maintain the Administrative Agent’s security interestin any Commercial Tort Claims initiated by or in favor of any Obligor.(e) Books and Records. To the extent applicable, mark its books and records to reflect the security interest grantedpursuant to this Agreement.(f) Nature of Collateral. At all times maintain the Collateral with a fair market value (as reasonably determined by theBorrowers) in excess of $250,000 as personal property and not affix any of such Collateral to any real property in a mannerwhich would change its nature from personal property to real property or a Fixture to real property, unless the AdministrativeAgent shall have a perfected Lien on such Fixture or real property.(g) Issuance or Acquisition of Equity Interests in Partnerships or Limited Liability Companies. Not without executingand delivering, or causing to be executed and delivered, to the Administrative Agent such agreements, documents andinstruments as the Administrative Agent may reasonably require, issue or acquire any Pledged Equity consisting of an interest ina partnership or a limited liability company that (i) is dealt in or traded on a securities exchange or in a securities market, (ii) byits terms expressly provides that it is a Security governed by Article 8 of the UCC, (iii) is an investment company security, (iv) isheld in a Securities Account or (v) constitutes a Security.(h) Intellectual Property.(i) Not do any act or omit to do any act whereby any material U.S. Copyright may become invalidated and (A)not do any act, or omit to do any act, whereby any material U.S. Copyright may become injected into the public domain;(B) use its commercially reasonable effort to endeavor to notify the Administrative Agent promptly if it knows that anymaterial U.S. Copyright becomes injected into the public domain or of any materially adverse determination ordevelopment (including, without limitation, the institution of, or any such determination or development in, any court ortribunal in the United States) regarding an Obligor’s ownership of any such Copyright or its validity; (C) take allnecessary steps as it shall deem reasonably appropriate under the circumstances, to maintain and pursue eachapplication (and to obtain the relevant registration) of each material U.S. Copyright owned by an Obligor and tomaintain each registration of each material U.S. Copyright owned by an Obligor including, without limitation, filing ofapplications for renewal where necessary; and (D) use its commercially reasonable efforts to endeavor to promptlynotify the Administrative Agent of any material infringement of any material U.S. Copyright of an Obligor of which itbecomes aware and take such actions as it shall reasonably deem appropriate under the circumstances to protect suchCopyright, including, where appropriate, the bringing of suit for infringement, seeking injunctive relief and seeking torecover any and all damages for such infringement.(ii) Not make any assignment or agreement in conflict with the security interest in the U.S. Copyrights of eachObligor hereunder (except as permitted by the Credit Agreement or this Agreement).(iii) (A) Continue to use each material U.S. Trademark on each and every trademark class of goods applicableto its current line as reflected in its current catalogs, brochures and price lists in order to maintain such Trademark in fullforce free from any claim of abandonment for non-use, (B) employ such Trademark with the appropriate notice ofregistration, if applicable, (C) not adopt or use any mark that is confusingly similar or a colorable imitation of suchTrademark unless the Administrative Agent, for the ratable benefit of the holders of the Secured Obligations, shall obtaina perfected security interest in such mark pursuant to this Agreement, and (D) not (and not permit any licensee orsublicensee thereof to) do any act or omit to do any act whereby any such Trademark may become invalidated.(iv) Not do any act, or omit to do any act, whereby any material U.S. Patent may become abandoned ordedicated.(v) Notify the Administrative Agent promptly if it knows that any application or registration relating to anymaterial U.S. Patent or material U.S. Trademark may become abandoned or dedicated, or of any materially adversedetermination or development (including, without limitation, the institution of, or any such determination ordevelopment in, any proceeding in the United States Patent and Trademark Office or any court or tribunal in anycountry) regarding such Obligor’s ownership of any such Patent or Trademark or its right to register the same or to keepand maintain the same.(vi) Take all reasonable and necessary steps, including, without limitation, in any proceeding before the UnitedStates Patent and Trademark Office, or any similar office or agency in any other country or any political subdivisionthereof, to maintain and pursue each application (and to obtain the relevant registration) and to maintain eachregistration of each material U.S. Patent and material U.S. Trademark, including, without limitation, filing of applicationsfor renewal, affidavits of use and affidavits of incontestability.(vii) Promptly notify the Administrative Agent after it learns that any material U.S. Patent or material U.S.Trademark included in the Collateral is infringed, misappropriated or diluted by a third party in such manner as tomaterially prejudice the rights of PRGX and its Subsidiaries in and to such Patent or Trademark; and promptly sue forinfringement, misappropriation or dilution, to seek injunctive relief where appropriate and to recover any and alldamages for such infringement, misappropriation or dilution, or to take such other actions (if any) as it shall reasonablydeem appropriate under the circumstances to protect such Patent or Trademark.(viii) Not make any assignment or agreement in conflict with the security interest in the U.S. Patents or U.S.Trademarks of each Obligor hereunder (except as permitted by the Credit Agreement).Notwithstanding anything to the contrary contained in this Agreement or the other Loan Documents, the Obligors may,in their reasonable business judgment, fail to maintain, pursue, preserve, prosecute, utilize or protect any Copyright, Patent orTrademark which is not material to their businesses, and to the extent that any covenant or other provision contained in thisAgreement or any other Loan Document is contrary thereto or would be breached by the occurrence of any of the above, suchcontrary provision shall not apply.5. Authorization to File Financing Statements. Each Obligor hereby authorizes the Administrative Agent to prepare and filesuch financing statements (including continuation statements) or amendments thereof or supplements thereto or other instruments as theAdministrative Agent may from time to time deem necessary or appropriate in order to perfect and maintain the security interestsgranted hereunder in accordance with the UCC (including authorization to describe the Collateral as “all personal property”, “all assets”or words of similar meaning).6. Advances. On failure of any Obligor to perform any of the covenants and agreements contained herein or in any other LoanDocument, the Administrative Agent may, at its sole option and in its sole discretion, perform the same and in so doing may expendsuch sums as the Administrative Agent may reasonably deem advisable in the performance thereof, including, without limitation, thepayment of any insurance premiums, the payment of any taxes, a payment to obtain a release of a Lien or potential Lien, expendituresmade in defending against any adverse claim and all other expenditures which the Administrative Agent may make for the protection ofthe security hereof or which may be compelled to make by operation of Law. All such sums and amounts so expended shall berepayable by the Obligors on a joint and several basis promptly upon timely notice thereof and demand therefor, shall constituteadditional Secured Obligations and shall bear interest from the date said amounts are expended at the Default Rate. No suchperformance of any covenant or agreement by the Administrative Agent on behalf of any Obligor, and no such advance or expendituretherefor, shall relieve the Obligors of any Default or Event of Default. The Administrative Agent may make any payment herebyauthorized in accordance with any bill, statement or estimate procured from the appropriate public office or holder of the claim to bedischarged without inquiry into the accuracy of such bill, statement or estimate or into the validity of any tax assessment, sale,forfeiture, tax lien, title or claim except to the extent such payment is being contested in good faith by an Obligor in appropriateproceedings and against which adequate reserves are being maintained in accordance with GAAP.7. Remedies.(a) General Remedies. Upon the occurrence of an Event of Default and during continuation thereof, the AdministrativeAgent shall have, in addition to the rights and remedies provided herein, in the Loan Documents, in any other documentsrelating to the Secured Obligations, or by Law (including, but not limited to, levy of attachment, garnishment and the rights andremedies set forth in the UCC of the jurisdiction applicable to the affected Collateral), the rights and remedies of a secured partyunder the UCC (regardless of whether the UCC is the law of the jurisdiction where the rights and remedies are asserted andregardless of whether the UCC applies to the affected Collateral), and further, the Administrative Agent may, with or withoutjudicial process or the aid and assistance of others, (i) enter onto any premises on which any of the Collateral may be locatedand, without resistance or interference by the Obligors, take possession of the Collateral (subject to the rights of landlords underapplicable Laws, lease agreements and landlord consents), (ii) dispose of any Collateral on any such premises (subject to therights of landlords under applicable Laws, lease agreements and landlord consents), (iii) require the Obligors to assemble andmake available to the Administrative Agent at the expense of the Obligors any Collateral at any place and time designated bythe Administrative Agent which is reasonably convenient to both parties, (iv) remove any Collateral from any such premises forthe purpose of effecting sale or other disposition thereof, and/or (v) without demand and without advertisement, notice, hearingor process of law, all of which each of the Obligors hereby waives to the fullest extent permitted by Law, at any place and timeor times, sell and deliver any or all Collateral held by or for it at public or private sale (which in the case of a private sale ofPledged Equity, shall be to a restricted group of purchasers who will be obligated to agree, among other things, to acquire suchsecurities for their own account, for investment and not with a view to the distribution or resale thereof), at any exchange orbroker’s board or elsewhere, by one or more contracts, in one or more parcels, for Money, upon credit or otherwise, at suchprices and upon such terms as the Administrative Agent deems advisable, in its sole discretion (subject to any and all mandatorylegal requirements). Each Obligor acknowledges that any such private sale may be at prices and on terms less favorable to theseller than the prices and other terms which might have been obtained at a public sale and, notwithstanding the foregoing,agrees that such private sale shall be deemed to have been made in a commercially reasonable manner and, in the case of a saleof Pledged Equity, that the Administrative Agent shall have no obligation to delay sale of any such securities for the period oftime necessary to permit the issuer of such securities to register such securities for public sale under the Securities Act of 1933.Neither the Administrative Agent’s compliance with applicable Law nor its disclaimer of warranties relating to the Collateralshall be considered to adversely affect the commercial reasonableness of any sale. To the extent the rights of notice cannot belegally waived hereunder, each Obligor agrees that any requirement of reasonable notice shall be met if such notice, specifyingthe place of any public sale or the time after which any private sale is to be made, is personally served on or mailed, postageprepaid, to PRGX in accordance with the notice provisions of Section 11.02 of the Credit Agreement at least ten (10) daysbefore the time of sale or other event giving rise to the requirement of such notice. The Administrative Agent may adjourn anypublic or private sale from time to time by announcement at the time and place fixed therefor, and such sale may, withoutfurther notice, be made at the time and place to which it was so adjourned. Each Obligor further acknowledges and agrees thatany offer to sell any Pledged Equity which has been (i) publicly advertised on a bona fide basis in a newspaper or otherpublication of general circulation in the financial community of New York, New York (to the extent that such offer may beadvertised without prior registration under the Securities Act of 1933), or (ii) made privately in the manner described aboveshall be deemed to involve a “public sale” under the UCC, notwithstanding that such sale may not constitute a “public offering”under the Securities Act of 1933, and the Administrative Agent may, in such event, bid for the purchase of such securities. TheAdministrative Agent shall not be obligated to make any sale or other disposition of the Collateral regardless of notice havingbeen given. To the extent permitted by applicable Law, any holder of Secured Obligations may be a purchaser at any such sale.To the extent permitted by applicable Law, each of the Obligors hereby waives all of its rights of redemption with respect to anysuch sale. Subject to the provisions of applicable Law, the Administrative Agent may postpone or cause the postponement ofthe sale of all or any portion of the Collateral by announcement at the time and place of such sale, and such sale may, withoutfurther notice, to the extent permitted by Law, be made at the time and place to which the sale was postponed, or theAdministrative Agent may further postpone such sale by announcement made at such time and place.(b) Remedies relating to Accounts. During the continuation of an Event of Default, whether or not the AdministrativeAgent has exercised any or all of its rights and remedies hereunder, (i) each Obligor will promptly upon request of theAdministrative Agent instruct all account debtors to remit all payments in respect of Accounts to a mailing location selected bythe Administrative Agent and (ii) the Administrative Agent shall have the right to enforce any Obligor’s rights against itscustomers and account debtors, and the Administrative Agent or its designee may notify any Obligor’s customers and accountdebtors that the Accounts of such Obligor have been assigned to the Administrative Agent or of the Administrative Agent’ssecurity interest therein, and may (either in its own name or in the name of an Obligor or both) demand, collect (includingwithout limitation by way of a lockbox arrangement), receive, take receipt for, sell, sue for, compound, settle, compromise andgive acquittance for any and all amounts due or to become due on any Account, and, in the Administrative Agent’s discretion,file any claim or take any other action or proceeding to protect and realize upon the security interest of the holders of theSecured Obligations in the Accounts. Each Obligor acknowledges and agrees that the Proceeds of its Accounts remitted to or onbehalf of the Administrative Agent in accordance with the provisions hereof shall be solely for the Administrative Agent’s ownconvenience. Neither the Administrative Agent nor the holders of the Secured Obligations shall have any liability orresponsibility to any Obligor for acceptance of a check, draft or other order for payment of money bearing the legend “paymentin full” or words of similar import or any other restrictive legend or endorsement or be responsible for determining thecorrectness of any remittance. Furthermore, during the continuation of an Event of Default, (i) the Administrative Agent shallhave the right, but not the obligation, to make test verifications of the Accounts in any manner and through any medium that itreasonably considers advisable, and the Obligors shall furnish all such assistance and information as the Administrative Agentmay require in connection with such test verifications, (ii) upon the Administrative Agent’s request and at the expense of theObligors, the Obligors shall cause independent public accountants or others satisfactory to the Administrative Agent to furnishto the Administrative Agent reports showing reconciliations, aging and test verifications of, and trial balances for, the Accountsand (iii) the Administrative Agent in its own name or in the name of others may communicate with account debtors on theAccounts to verify with them to the Administrative Agent’s satisfaction the existence, amount and terms of any Accounts.(c) Deposit Accounts. Upon the occurrence of an Event of Default and during continuation thereof, the AdministrativeAgent may prevent withdrawals or other dispositions of funds in Deposit Accounts maintained with the AdministrativeAgent. (d) Access. In addition to the rights and remedies hereunder (and subject to the rights of landlords under applicableLaws, lease agreements and landlord consents), upon the occurrence of an Event of Default and during the continuance thereof,the Administrative Agent shall have the right to enter and remain upon the various premises of the Obligors without cost orcharge to the Administrative Agent, and use the same, together with materials, supplies, books and records of the Obligors forthe purpose of collecting and liquidating the Collateral, or for preparing for sale and conducting the sale of the Collateral,whether by foreclosure, auction or otherwise. In addition, the Administrative Agent may remove Collateral, or any part thereof,from such premises and/or any records with respect thereto, in order to effectively collect or liquidate such Collateral.(e) Nonexclusive Nature of Remedies. Failure by the Administrative Agent or the holders of the Secured Obligations toexercise any right, remedy or option under this Agreement, any other Loan Document, any other document relating to theSecured Obligations, or as provided by Law, or any delay by the Administrative Agent or the holders of the Secured Obligationsin exercising the same, shall not operate as a waiver of any such right, remedy or option. No waiver hereunder shall be effectiveunless it is in writing, signed by the party against whom such waiver is sought to be enforced and then only to the extentspecifically stated, which in the case of the Administrative Agent or the holders of the Secured Obligations shall only be grantedas provided herein. To the extent permitted by Law, neither the Administrative Agent, the holders of the Secured Obligations,nor any party acting as attorney for the Administrative Agent or the holders of the Secured Obligations, shall be liable hereunderfor any acts or omissions or for any error of judgment or mistake of fact or law other than their gross negligence or willfulmisconduct hereunder. The rights and remedies of the Administrative Agent and the holders of the Secured Obligations underthis Agreement shall be cumulative and not exclusive of any other right or remedy which the Administrative Agent or theholders of the Secured Obligations may have.(f) Retention of Collateral. In addition to the rights and remedies hereunder, the Administrative Agent may, incompliance with Sections 9-620 and 9-621 of the UCC or otherwise complying with the requirements of applicable Law of therelevant jurisdiction, accept or retain the Collateral in satisfaction of the Secured Obligations. Unless and until theAdministrative Agent shall have provided such notices, however, the Administrative Agent shall not be deemed to have retainedany Collateral in satisfaction of any Secured Obligations for any reason.(g) Deficiency. In the event that the proceeds of any sale, collection or realization are insufficient to pay all amounts towhich the Administrative Agent or the holders of the Secured Obligations are legally entitled, the Obligors shall be jointly andseverally liable for the deficiency, together with interest thereon at the Default Rate, together with the reasonable costs ofcollection and the fees, charges and disbursements of counsel. Any surplus remaining after the full payment and satisfaction ofthe Secured Obligations shall be returned to the Obligors or to whomsoever a court of competent jurisdiction shall determine tobe entitled thereto.8. Rights of the Administrative Agent.(a) Power of Attorney. In addition to other powers of attorney contained herein, each Obligor hereby designates andappoints the Administrative Agent, on behalf of the holders of the Secured Obligations, and each of its designees or agents, asattorney-in-fact of such Obligor, irrevocably and with power of substitution, with authority to take any or all of the followingactions upon the occurrence and during the continuance of an Event of Default:(i) to demand, collect, settle, compromise, adjust, give discharges and releases, all as the Administrative Agentmay reasonably determine;(ii) to commence and prosecute any actions at any court for the purposes of collecting any Collateral andenforcing any other right in respect thereof;(iii) to defend, settle or compromise any action brought and, in connection therewith, give such discharge orrelease as the Administrative Agent may deem reasonably appropriate;(iv) to receive, open and dispose of mail addressed to an Obligor and endorse checks, notes, drafts,acceptances, money orders, bills of lading, warehouse receipts or other instruments or documents evidencing payment,shipment or storage of the goods giving rise to the Collateral of such Obligor on behalf of and in the name of suchObligor, or securing, or relating to such Collateral;(v) to sell, assign, transfer, make any agreement in respect of, or otherwise deal with or exercise rights inrespect of, any Collateral or the goods or services which have given rise thereto, as fully and completely as though theAdministrative Agent were the absolute owner thereof for all purposes;(vi) to adjust and settle claims under any insurance policy relating thereto;(vii) to execute and deliver all assignments, conveyances, statements, financing statements, renewal financingstatements, security agreements, affidavits, notices and other agreements, instruments and documents that theAdministrative Agent may determine reasonably necessary in order to perfect and maintain the security interests andliens granted in this Agreement and in order to fully consummate all of the transactions contemplated therein;(viii) to institute any foreclosure proceedings that the Administrative Agent may deem appropriate;(ix) to sign and endorse any drafts, assignments, proxies, stock powers, verifications, notices and otherdocuments relating to the Collateral;(x) to exchange any of the Pledged Equity or other property upon any merger, consolidation, reorganization,recapitalization or other readjustment of the issuer thereof and, in connection therewith, deposit any of the PledgedEquity with any committee, depository, transfer agent, registrar or other designated agency upon such terms as theAdministrative Agent may reasonably deem appropriate;(xi) to vote for a shareholder resolution, or to sign an instrument in writing, sanctioning the transfer of any orall of the Pledged Equity into the name of the Administrative Agent or one or more of the holders of the SecuredObligations or into the name of any transferee to whom the Pledged Equity or any part thereof may be sold pursuant toSection 7 hereof;(xii) to pay or discharge taxes, liens, security interests or other encumbrances levied or placed on or threatenedagainst the Collateral;(xiii) to direct any parties liable for any payment in connection with any of the Collateral to make payment ofany and all monies due and to become due thereunder directly to the Administrative Agent or as the AdministrativeAgent shall direct;(xiv) to receive payment of and receipt for any and all monies, claims, and other amounts due and to becomedue at any time in respect of or arising out of any Collateral; and(xv) to do and perform all such other acts and things as the Administrative Agent may reasonably deem to benecessary, proper or convenient in connection with the Collateral.This power of attorney is a power coupled with an interest and shall be irrevocable until such time as the Secured Obligationsarising under the Loan Documents have been paid in full and the Commitments have expired or been terminated. TheAdministrative Agent shall be under no duty to exercise or withhold the exercise of any of the rights, powers, privileges andoptions expressly or implicitly granted to the Administrative Agent in this Agreement, and shall not be liable for any failure todo so or any delay in doing so. The Administrative Agent shall not be liable for any act or omission or for any error of judgmentor any mistake of fact or law in its individual capacity or its capacity as attorney-in-fact except acts or omissions resulting fromits gross negligence or willful misconduct. This power of attorney is conferred on the Administrative Agent solely to protect,preserve and realize upon its security interest in the Collateral.(b) Assignment by the Administrative Agent. The Administrative Agent may from time to time assign the SecuredObligations to a successor Administrative Agent appointed in accordance with the Credit Agreement, and such successor shallbe entitled to all of the rights and remedies of the Administrative Agent under this Agreement in relation thereto.(c) The Administrative Agent’s Duty of Care. Other than the exercise of reasonable care to assure the safe custody ofthe Collateral while being held by the Administrative Agent hereunder, the Administrative Agent shall have no duty or liabilityto preserve rights pertaining thereto, it being understood and agreed that the Obligors shall be responsible for preservation of allrights in the Collateral, and the Administrative Agent shall be relieved of all responsibility for the Collateral upon surrendering itor tendering the surrender of it to the Obligors. The Administrative Agent shall be deemed to have exercised reasonable care inthe custody and preservation of the Collateral in its possession if the Collateral is accorded treatment substantially equal to thatwhich the Administrative Agent accords its own property, which shall be no less than the treatment employed by a reasonableand prudent agent in the industry, it being understood that the Administrative Agent shall not have responsibility for taking anynecessary steps to preserve rights against any parties with respect to any of the Collateral. In the event of a public or private saleof Collateral pursuant to Section 7 hereof, the Administrative Agent shall have no responsibility for (i) ascertaining or takingaction with respect to calls, conversions, exchanges, maturities, tenders or other matters relating to any Collateral, whether ornot the Administrative Agent has or is deemed to have knowledge of such matters, or (ii) taking any steps to clean, repair orotherwise prepare the Collateral for sale.(d) Liability with Respect to Accounts. Anything herein to the contrary notwithstanding, each of the Obligors shallremain liable under each of the Accounts to observe and perform all the conditions and obligations to be observed andperformed by it thereunder, all in accordance with the terms of any agreement giving rise to each such Account. Neither theAdministrative Agent nor any holder of Secured Obligations shall have any obligation or liability under any Account (or anyagreement giving rise thereto) by reason of or arising out of this Agreement or the receipt by the Administrative Agent or anyholder of Secured Obligations of any payment relating to such Account pursuant hereto, except arising out of their grossnegligence or willful misconduct, in each case as determined by a court of competent jurisdiction by final and nonappealablejudgment, nor shall the Administrative Agent or any holder of Secured Obligations be obligated in any manner to perform anyof the obligations of an Obligor under or pursuant to any Account (or any agreement giving rise thereto), to make any payment,to make any inquiry as to the nature or the sufficiency of any payment received by it or as to the sufficiency of any performanceby any party under any Account (or any agreement giving rise thereto), to present or file any claim, to take any action toenforce any performance or to collect the payment of any amounts which may have been assigned to it or to which it may beentitled at any time or times.(e) Voting and Payment Rights in Respect of the Pledged Equity.(i) Except to the extent clause (ii) then applies, each Obligor may (A) exercise any and all voting and otherconsensual rights pertaining to the Pledged Equity of such Obligor or any part thereof for any purpose not inconsistentwith the terms of this Agreement or the Credit Agreement and (B) receive and retain any and all dividends (other thanstock dividends and other dividends constituting Collateral which are addressed hereinabove), principal or interest paidin respect of the Pledged Equity to the extent they are allowed under the Credit Agreement; and(ii) If an Event of Default has occurred and is continuing, the Administrative Agent shall be entitled to give theObligors notice of the Administrative Agent’s exercise of its rights under this clause (ii) and, upon delivery of suchnotice and thereafter so long as such Event of Default is continuing, (A) all rights of an Obligor to exercise the votingand other consensual rights which it would otherwise be entitled to exercise pursuant to clause (i)(A) above shall ceaseand all such rights shall thereupon become vested in the Administrative Agent which shall then have the sole right toexercise such voting and other consensual rights, (B) all rights of an Obligor to receive the dividends, principal andinterest payments which it would otherwise be authorized to receive and retain pursuant to clause (i)(B) above shallcease and all such rights shall thereupon be vested in the Administrative Agent which shall then have the sole right toreceive and hold as Collateral such dividends, principal and interest payments, and (C) all dividends, principal andinterest payments which are received by an Obligor contrary to the provisions of clause (ii)(B) above shall be receivedin trust for the benefit of the Administrative Agent, shall be segregated from other property or funds of such Obligor,and shall be forthwith paid over to the Administrative Agent as Collateral in the exact form received, to be held by theAdministrative Agent as Collateral and as further collateral security for the Secured Obligations.(f) Releases of Collateral. (i) If (A) any Collateral shall be sold, transferred or otherwise disposed of by any Obligor or(B) an Obligor ceases to be a subsidiary of any Loan Party, in each case in a transaction permitted by the Credit Agreement,then the Administrative Agent, at the request and sole expense of such Obligor, shall promptly execute and deliver to suchObligor all releases and other documents, and take such other action, reasonably necessary for the release of the Liens createdhereby or by any other Collateral Document on such Collateral. (ii) The Administrative Agent may release any of the PledgedEquity from this Agreement or may substitute any of the Pledged Equity for other Pledged Equity without altering, varying ordiminishing in any way the force, effect, lien, pledge or security interest of this Agreement as to any Pledged Equity notexpressly released or substituted, and this Agreement shall continue as a first priority lien on all Pledged Equity not expresslyreleased or substituted. (iii) If the Facility Termination Date has occurred, then the Administrative Agent, at the request and soleexpense of the Obligors, shall promptly execute and deliver to the Obligors all releases and other documents, and take suchother action, reasonably necessary for the release of the Liens created hereby or by any other Collateral Document on theCollateral.9. Application of Proceeds. Upon the acceleration of the Obligations pursuant to Section 8.02 of the Credit Agreement, anypayments in respect of the Secured Obligations and any proceeds of the Collateral, when received by the Administrative Agent or anyholder of the Secured Obligations in Money, will be applied in reduction of the Secured Obligations in the order set forth inSection 8.03 of the Credit Agreement.10. Continuing Agreement.(a) This Agreement shall remain in full force and effect until the Facility Termination Date has occurred, at which timethis Agreement and the liens and security interest of the Administrative Agent hereunder shall be automatically terminated andthe Administrative Agent shall, upon the request and at the expense of the Obligors, forthwith release all of its liens and securityinterests hereunder and shall execute and deliver all UCC termination statements and/or other documents reasonably requestedby the Obligors evidencing such termination.(b) This Agreement shall continue to be effective or be automatically reinstated, as the case may be, if at any timepayment, in whole or in part, of any of the Secured Obligations is rescinded or must otherwise be restored or returned by theAdministrative Agent or any holder of the Secured Obligations as a preference, fraudulent conveyance or otherwise under anyDebtor Relief Law, all as though such payment had not been made; provided that in the event payment of all or any part of theSecured Obligations is rescinded or must be restored or returned, all reasonable costs and expenses (including without limitationany reasonable legal fees and disbursements) incurred by the Administrative Agent or any holder of the Secured Obligations indefending and enforcing such reinstatement shall be deemed to be included as a part of the Secured Obligations.11. Amendments; Waivers; Modifications, etc. This Agreement and the provisions hereof may not be amended, waived,modified, changed, discharged or terminated except as set forth in Section 11.01 of the Credit Agreement; provided that any update orrevision to Schedule 2(c) hereof delivered by any Obligor shall not constitute an amendment for purposes of this Section 11 or Section11.01 of the Credit Agreement.12. Successors in Interest. This Agreement shall be binding upon each Obligor, its successors and assigns and shall inure,together with the rights and remedies of the Administrative Agent and the holders of the Secured Obligations hereunder, to the benefitof the Administrative Agent and the holders of the Secured Obligations and their successors and permitted assigns.13. Notices. All notices required or permitted to be given under this Agreement shall be in conformance with Section 11.02 ofthe Credit Agreement.14. Counterparts. This Agreement may be executed in any number of counterparts, each of which where so executed anddelivered shall be an original, but all of which shall constitute one and the same instrument. It shall not be necessary in making proof ofthis Agreement to produce or account for more than one such counterpart. Delivery of executed counterparts of this Agreement byfacsimile or other electronic means shall be effective as an original.15. Headings. The headings of the sections and subsections hereof are provided for convenience only and shall not in any wayaffect the meaning or construction of any provision of this Agreement.16. Governing Law; Submission to Jurisdiction; Venue; WAIVER OF JURY TRIAL. The terms of Sections 11.14 and 11.15 ofthe Credit Agreement with respect to governing law, submission to jurisdiction, venue and waiver of jury trial are incorporated hereinby reference, mutatis mutandis, and the parties hereto agree to such terms.17. Severability. If any provision of this Agreement is determined to be illegal, invalid or unenforceable, such provision shallbe fully severable and the remaining provisions shall remain in full force and effect and shall be construed without giving effect to theillegal, invalid or unenforceable provisions.18. Entirety. This Agreement, the other Loan Documents and the other documents relating to the Secured Obligations representthe entire agreement of the parties hereto and thereto, and supersede all prior agreements and understandings, oral or written, and anycontemporaneous oral agreements and understandings, if any, including any commitment letters or correspondence relating to the LoanDocuments, any other documents relating to the Secured Obligations, or the transactions contemplated herein and therein.19. Other Security. To the extent that any of the Secured Obligations are now or hereafter secured by property other than theCollateral (including, without limitation, real property and securities owned by an Obligor), or by a guarantee, endorsement or propertyof any other Person, then the Administrative Agent shall have the right to proceed against such other property, guarantee orendorsement upon the occurrence and during the continuance of any Event of Default, and the Administrative Agent shall have theright, in its sole discretion, to determine which rights, security, liens, security interests or remedies the Administrative Agent shall at anytime pursue, relinquish, subordinate, modify or take with respect thereto, without in any way modifying or affecting any of them or theSecured Obligations or any of the rights of the Administrative Agent or the holders of the Secured Obligations under this Agreement,under any other of the Loan Documents or under any other document relating to the Secured Obligations.20. Joinder. At any time after the date of this Agreement, one or more additional Persons may become party hereto byexecuting and delivering to the Administrative Agent a Joinder Agreement. Immediately upon such execution and delivery of suchJoinder Agreement (and without any further action), each such additional Person will become a party to this Agreement as an “Obligor”and have all of the rights and obligations of an Obligor hereunder and this Agreement and the schedules hereto shall be deemedamended by such Joinder Agreement.21. Rights of Required Lenders. All rights of the Administrative Agent hereunder, if not exercised by the AdministrativeAgent, may be exercised by the Required Lenders, and if, at any time there shall not be an Administrative Agent, all rights of theAdministrative Agent hereunder shall be exercised by the Required Lenders.22. Certain Consents Respecting Pledged Equity. Each Obligor in its capacity (if any) as the pledgor of any Pledged Equity,and also in its capacity (if any) as the issuer of Pledged Equity pledged hereunder by one or more other Obligors, herebyacknowledges, consents and agrees to the grant of the security interests in such Pledged Equity by such pledging Obligor(s) pursuant tothis Agreement, together with all rights accompanying such security interest as provided by this Agreement and applicable law (and,including, in the case of the pledge of Equity Interests in a partnership or limited liability company, the right of the assignee of suchpledged Equity Interests to be admitted as a partner or member thereof), notwithstanding any anti-assignment provisions or othercontrary provisions in any operating agreement, limited partnership agreement or similar organizational or governance documents ofsuch issuer.[remainder of page intentionally left blank]Each of the parties hereto has caused a counterpart of this Agreement to be duly executed and delivered as of the date firstabove written.OBLIGORS: PRGX GLOBAL, INC.,a Georgia corporationBy: /s/ Kurt J. Abkemeier Name: Kurt J. AbkemeierTitle: Chief Financial OfficerPRGX USA, INC.,a Georgia corporationBy: /s/ Kurt J. Abkemeier Name: Kurt J. AbkemeierTitle: Chief Financial OfficerLAVANTE, INC.,a Delaware corporationBy: /s/ Kurt J. Abkemeier Name: Kurt J. AbkemeierTitle: Chief Financial OfficerPRGDS, LLC,a Georgia limited liability companyBy: /s/ Kurt J. Abkemeier Name: Kurt J. AbkemeierTitle: Chief Financial OfficerPRGFS, INC.,a Delaware corporationBy: /s/ Kurt J. Abkemeier Name: Kurt J. AbkemeierTitle: Chief Financial OfficerPRG INTERNATIONAL, INC.,a Georgia corporationBy: /s/ Kurt J. Abkemeier Name: Kurt J. AbkemeierTitle: Chief Financial OfficerPRGTS, LLC,a Georgia limited liability companyBy: /s/ Kurt J. Abkemeier Name: Kurt J. AbkemeierTitle: Chief Financial OfficerPRGX ASIA, INC.,a Georgia corporationBy: /s/ Kurt J. Abkemeier Name: Kurt J. AbkemeierTitle: Chief Financial OfficerPRGX AUSTRALIA, INC.,a Georgia corporationBy: /s/ Kurt J. Abkemeier Name: Kurt J. AbkemeierTitle: Chief Financial OfficerPRGX BELGIUM, INC.,a Georgia corporationBy: /s/ Kurt J. Abkemeier Name: Kurt J. AbkemeierTitle: Chief Financial OfficerPRGX BRASIL, LLC,a Georgia limited liability companyBy: /s/ Kurt J. Abkemeier Name: Kurt J. AbkemeierTitle: Chief Financial OfficerPRGX CANADA, LLC,a Georgia limited liability companyBy: /s/ Kurt J. Abkemeier Name: Kurt J. AbkemeierTitle: Chief Financial OfficerPRGX COMMERCIAL LLC,a Georgia limited liability companyBy: /s/ Kurt J. Abkemeier Name: Kurt J. AbkemeierTitle: Chief Financial OfficerPRGX EUROPE, INC.,a Georgia corporationBy: /s/ Kurt J. Abkemeier Name: Kurt J. AbkemeierTitle: Chief Financial OfficerPRGX FRANCE, INC.,a Georgia corporationBy: /s/ Kurt J. Abkemeier Name: Kurt J. AbkemeierTitle: Chief Financial OfficerPRGX GERMANY, INC.,a Georgia corporationBy: /s/ Kurt J. Abkemeier Name: Kurt J. AbkemeierTitle: Chief Financial OfficerPRGX MEXICO, INC.,a Georgia corporationBy: /s/ Kurt J. Abkemeier Name: Kurt J. AbkemeierTitle: Chief Financial OfficerPRGX NETHERLANDS, INC.,a Georgia corporationBy: /s/ Kurt J. Abkemeier Name: Kurt J. AbkemeierTitle: Chief Financial OfficerPRGX NEW ZEALAND, INC.,a Georgia corporationBy: /s/ Kurt J. Abkemeier Name: Kurt J. AbkemeierTitle: Chief Financial OfficerPRGX PORTUGAL, INC.,a Georgia corporationBy: /s/ Kurt J. Abkemeier Name: Kurt J. AbkemeierTitle: Chief Financial OfficerPRGX SCANDINAVIA, INC.,a Georgia corporationBy: /s/ Kurt J. Abkemeier Name: Kurt J. AbkemeierTitle: Chief Financial OfficerPRGX SPAIN, INC.,a Georgia corporationBy: /s/ Kurt J. Abkemeier Name: Kurt J. AbkemeierTitle: Chief Financial OfficerPRGX SWITZERLAND, INC.,a Georgia corporationBy: /s/ Kurt J. Abkemeier Name: Kurt J. AbkemeierTitle: Chief Financial OfficerPRGX TEXAS, INC.,a Texas corporationBy: /s/ Ronald E. Stewart Name: Ronald E. StewartTitle: PresidentAccepted and agreed to as of the date first above written.BANK OF AMERICA, N.A., as Administrative AgentBy: /s/ Anthony W. Kell Name: Anthony W. KellTitle: Vice PresidentSCHEDULE 1(b) PLEDGED EQUITYOBLIGOR: PRGX Global, Inc. Name of SubsidiaryCertificateNumberShares Evidenced byCertificatePercentage ofOutstanding SharesEvidenced by CertificateShares PledgedPercentage ofOutstanding SharesPledgedPRGX USA, Inc.B435,740,000100%5,740,000100%PRG International,Inc.3100100%100100%PRGX Asia, Inc.13500100%500100%PRGX Australia, Inc.61,100100%1,100100%PRGX Belgium, Inc.3100100%100100%PRGX Canada, LLCUncertificatedn/an/aEntire Interest100%PRGX Europe, Inc.3100100%100100%PRGX France, Inc.14500100%500100%PRGX Germany, Inc.3100100%100100%PRGX Netherlands,Inc.3100100%100100%PRGX New Zealand,Inc.3100100%100100%PRGX Portugal, Inc.3100100%100100%PRGX Scandinavia,Inc.3100100%100100%PRGX Spain, Inc.4100100%100100%PRGX Switzerland,Inc.3100100%100100%PRGX Texas, Inc.71,500100%1,500100%Meridian CorporationLimited1124,898,65341%3,184,12426.7%PRGDS, LLCUncertificatedn/an/aEntire Interest100%OBLIGOR: PRGX Asia, Inc. Name of SubsidiaryCertificateNumberShares Evidenced byCertificatePercentage ofOutstanding SharesEvidenced by CertificateShares PledgedPercentage ofOutstanding SharesPledgedPRGX India PrivateLimitedTBDTBDTBDTBDTBDOBLIGOR: PRGX Texas, Inc. Name of SubsidiaryCertificateNumberShares Evidenced byCertificatePercentage ofOutstanding SharesEvidenced by CertificateShares PledgedPercentage ofOutstanding SharesPledgedMeridian CorporationLimited1147,028,52459%4,568,54038.3%OBLIGOR: PRG International,Inc. Name of SubsidiaryCertificateNumberShares Evidenced byCertificatePercentage ofOutstanding SharesEvidenced by CertificateShares PledgedPercentage ofOutstanding SharesPledgedPRGFS, Inc.31,000100%1,000100%PRGDS, LLCUncertificatedn/an/aEntire Interest100%OBLIGOR: PRGX USA, Inc. Name of SubsidiaryCertificateNumberShares Evidenced byCertificatePercentage ofOutstanding SharesEvidenced by CertificateShares PledgedPercentage ofOutstanding SharesPledgedPRGTS, LLCUncertificatedn/an/aEntire Interest100%PRGX CommercialLLCUncertificatedn/an/aEntire Interest100%Lavante, Inc.C-71100100%100100%OBLIGOR: PRGX Canada, LLC Name of SubsidiaryCertificateNumberShares Evidenced byCertificatePercentage ofOutstanding SharesEvidenced by CertificateShares PledgedPercentage ofOutstanding SharesPledgedPRGX Canada Corp.NV1 NV2 CV3 CV4906,120 NonvotingCommon 619,097 NonvotingCommon 592,086 VotingCommon 305,015 VotingCommon59.4% NonvotingCommon 40.6% NonvotingCommon 66% Voting Common 34% Voting Common906,120 NonvotingCommon 85,271 NonvotingCommon 583,103 Voting Common 0 Voting Common59.4% NonvotingCommon 5.6% NonvotingCommon 65% VotingCommon 0% VotingCommonSCHEDULE 2(c)COMMERCIAL TORT CLAIMSNone.SCHEDULE 3(f)INSTRUMENTS; DOCUMENTS; TANGIBLE CHATTEL PAPERNone.EXHIBIT 4(a)(ii)IRREVOCABLE STOCK POWERFOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers to ______________________ the followingEquity Interests of _____________________, a ____________ corporation:No. of Shares Certificate No.and irrevocably appoints __________________________________ its agent and attorney-in-fact to transfer all or any part of suchEquity Interests and to take all necessary and appropriate action to effect any such transfer. The agent and attorney-in-fact maysubstitute and appoint one or more persons to act for him. By: Name:Title:EXHIBIT 4(b)(i)NOTICE OF GRANT OF SECURITY INTEREST IN PATENTSUnited States Patent and Trademark OfficeLadies and Gentlemen:Please be advised that pursuant to the Security and Pledge Agreement dated as of March 14, 2019 (as the same may beamended, modified, extended or restated from time to time, the “Agreement”) by and among the Obligors party thereto (each an“Obligor” and collectively, the “Obligors”) and Bank of America, N.A., as administrative agent (the “Administrative Agent”) for theholders of the Secured Obligations referenced therein, the undersigned Obligor has granted a continuing security interest in and a rightto set off against the patents and patent applications shown below to the Administrative Agent for the ratable benefit of the holders ofthe Secured Obligations:PATENTSPatent No.Description of Patent ItemDate of Patent See Schedule 1 attached hereto PATENT APPLICATIONSPatent Applications No.Description of Patent Applied forDate of Patent Applications See Schedule 1 attached hereto The undersigned Obligor and the Administrative Agent, on behalf of the holders of the Secured Obligations, herebyacknowledge and agree that the security interest in the foregoing patents and patent applications (i) may only be terminated inaccordance with the terms of the Agreement and (ii) is not to be construed as an assignment of any patent or patent application.Very truly yours,__________________________________[Obligor]By: Name:Title:Acknowledged and Accepted:BANK OF AMERICA, N.A., as Administrative AgentBy: Name:Title:EXHIBIT 4(b)(ii)NOTICE OF GRANT OF SECURITY INTEREST IN TRADEMARKSUnited States Patent and Trademark OfficeLadies and Gentlemen:Please be advised that pursuant to the Security and Pledge Agreement dated as of March 14, 2019 (as the same may beamended, modified, extended or restated from time to time, the “Agreement”) by and among the Obligors party thereto (each an“Obligor” and collectively, the “Obligors”) and Bank of America, N.A., as Administrative Agent (the “Administrative Agent”) for theholders of the Secured Obligations referenced therein, the undersigned Obligor has granted a continuing security interest in and a rightto set off against the trademarks and trademark applications shown below to the Administrative Agent for the ratable benefit of theholders of the Secured Obligations:TRADEMARKSTrademark No.Description of Trademark ItemDate of Trademark See Schedule 1 attached hereto TRADEMARK APPLICATIONSTrademark Applications No.Description of Trademark Applied forDate of Trademark Applications See Schedule 1 attached hereto The undersigned Obligor and the Administrative Agent, on behalf of the holders of the Secured Obligations, herebyacknowledge and agree that the security interest in the foregoing trademarks and trademark applications (i) may only be terminated inaccordance with the terms of the Agreement and (ii) is not to be construed as an assignment of any trademark or trademark application.Very truly yours,__________________________________[Obligor]By: Name:Title:Acknowledged and Accepted:BANK OF AMERICA, N.A., as Administrative AgentBy: Name:Title:EXHIBIT 4(b)(iii)NOTICE OF GRANT OF SECURITY INTEREST IN COPYRIGHTSUnited States Copyright OfficeLadies and Gentlemen:Please be advised that pursuant to the Security and Pledge Agreement dated as of March 14, 2019 (as the same may beamended, modified, extended or restated from time to time, the “Agreement”) by and among the Obligors party thereto (each an“Obligor” and collectively, the “Obligors”) and Bank of America, N.A., as administrative agent (the “Administrative Agent”) for theholders of the Secured Obligations referenced therein, the undersigned Obligor has granted a continuing security interest in and a rightto set off against the copyrights and copyright applications shown below to the Administrative Agent for the ratable benefit of theholders of the Secured Obligations:COPYRIGHTSCopyright No.Description of Copyright ItemDate of Copyright See Schedule 1 attached hereto COPYRIGHT APPLICATIONSCopyright Applications No.Description of Copyright Applied forDate of Copyright Applications See Schedule 1 attached hereto The undersigned Obligor and the Administrative Agent, on behalf of the holders of the Secured Obligations, herebyacknowledge and agree that the security interest in the foregoing copyrights and copyright applications (i) may only be terminated inaccordance with the terms of the Agreement and (ii) is not to be construed as an assignment of any copyright or copyright application.Very truly yours,__________________________________[Obligor]By: Name:Title:Acknowledged and Accepted:BANK OF AMERICA, N.A., as Administrative AgentBy: Name:Title:1EXHIBIT 21.1PRGX GLOBAL, INC.SUBSIDIARIESAs of December 31, 2018CompanyJurisdiction of OrganizationPRGX USA, Inc.GeorgiaPRGX Asia, Inc.GeorgiaPRGX Australia, Inc.GeorgiaPRGX Belgium, Inc.GeorgiaPRGX Canada, LLCGeorgiaPRGX Commercial LLCGeorgiaPRGX Costa Rica, Inc.GeorgiaPRGX New Zealand, Inc.GeorgiaPRGX Netherlands, Inc.GeorgiaPRGX Mexico, Inc.GeorgiaPRGX France, Inc.GeorgiaPRGX Germany, Inc.GeorgiaPRGX Acquisition Corp.GeorgiaPRGX Switzerland, Inc.GeorgiaPRGX Italy, Inc.GeorgiaPRGX Spain, Inc.GeorgiaPRGX Portugal, Inc.GeorgiaPRG International, Inc.GeorgiaPRG USA, Inc.GeorgiaPRGX Scandinavia, Inc.GeorgiaPRGX Holdings, Inc.GeorgiaPRGX Puerto Rico, Inc.GeorgiaPRGX Chile, Inc.GeorgiaPRGX Europe, Inc.GeorgiaPRGX Brasil, LLCGeorgiaPRGX India Private LimitedIndiaPRGX Holdings Mexico, S de RL de CVMexicoPRGX Servicios Mexico S de RL de CVMexicoPRGX de Mexico S de RL de CVMexicoPRGX Argentina S.A.ArgentinaPRGX Brasil Ltda.BrazilPRGX International PTE LimitedSingaporePRG-Schultz Suzhou' Co Ltd.ChinaPRGX Shanghai Company LimitedChinaPRGX CR s.r.o.Czech RepublicPRGFS, Inc.DelawarePRGX Texas, Inc.TexasMeridian Corporation LimitedJersey (Channel Islands)PRGX UK Holdings LtdUnited KingdomPRGX UK LtdUnited KingdomEtesius LimitedUnited KingdomPRGX Canada Corp.CanadaPRGX Deutschland GmbHGermanyPRGX Nederland B.V.NetherlandsPRGX Colombia Ltda.ColombiaPRGX Svenska ABSwedenPRG-Schultz Venezuela S. R. L.VenezuelaPRGX Polska Sp. z o.o.PolandPRGDS, LLCGeorgiaPRGTS, LLCGeorgiaLavante, IncDelawareEXHIBIT 23.1Consent of Independent Registered Public Accounting FirmPRGX Global, Inc.Atlanta, GeorgiaWe hereby consent to the incorporation by reference in the Registration Statements on Form S3 (File No. 333-134698, No. 333-171986, No. 333-185027 andNo. 333-208075) and Form S-8 (File No. 333-153837, 333-170809, No. 333-189010, No. 333-204489 and No. 333-222110) of PRGX Global, Inc. andsubsidiaries of our reports dated March 13, 2018, relating to the consolidated financial statements and financial statement schedule, and the effectiveness ofPRGX Global, Inc. and subsidiaries’ internal control over financial reporting, which appear in this Form 10-K./s/ BDO USA, LLPAtlanta, GeorgiaMarch 18, 2019EXHIBIT 31.1CERTIFICATIONI, Ronald E. Stewart, certify that:1. I have reviewed this Form 10-K of PRGX Global, Inc.;2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for theregistrant and have:(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, toensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities,particularly during the period in which this report is being prepared; and(b) Designed such internal control over financial reporting or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposesin accordance with generally accepted accounting principles; and(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recentfiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, theregistrant’s internal control over financial reporting; and5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theregistrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which arereasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internalcontrol over financial reporting. March 18, 2019 By: /s/ Ronald E. Stewart Ronald E. Stewart President, Chief Executive Officer, Director(Principal Executive Officer)EXHIBIT 31.2CERTIFICATIONI, Kurt J. Abkemeier, certify that:1. I have reviewed this Form 10-K of PRGX Global, Inc.;2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for theregistrant and have:(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, toensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities,particularly during the period in which this report is being prepared; and(b) Designed such internal control over financial reporting or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposesin accordance with generally accepted accounting principles; and(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recentfiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, theregistrant’s internal control over financial reporting; and5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theregistrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which arereasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internalcontrol over financial reporting. March 18, 2019 By: /s/ Kurt J. Abkemeier Kurt J. Abkemeier Chief Financial Officer, Treasurer and Controller(Principal Financial Officer)EXHIBIT 32.1CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,AS ADOPTED PURSUANT TO SECTION 906OF THE SARBANES-OXLEY ACT OF 2002In connection with the Annual Report of PRGX Global, Inc. (the “Company”) on Form 10-K for the period ended December 31, 2018 as filed with theSecurities and Exchange Commission on the date hereof (the “Report”), I, Ronald E. Stewart, President and Chief Executive Officer of the Company and I,Kurt J. Abkemeier, Chief Financial Officer, Treasurer and Controller, certify pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-OxleyAct of 2002, that to the best of the undersigned’s knowledge: (1) the Report fully complies with the requirements of Section 13(a) of the Securities ExchangeAct of 1934; and (2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of theCompany. March 18, 2019 By: /s/ Ronald E. Stewart Ronald E. Stewart President, Chief Executive Officer, Director(Principal Executive Officer) March 18, 2019 By: /s/ Kurt J. Abkemeier Kurt J. Abkemeier Chief Financial Officer, Treasurer and Controller(Principal Financial Officer)

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