SUBSEQUENT EVENTS

Assets Held for Sale

On April 29, 2014, the Company's Board of Directors authorized management to explore opportunities to divest the

Company's Legal eDiscovery business. The Company's management subsequently engaged Duff & Phelps Securities, LLC to review the Company’s Legal eDiscovery business and financial performance, including its possible sale. On July 29, 2014, the Company's management and Board of Directors approved the plan for divestiture of the Legal eDiscovery business, which is expected to be completed within 12 months. As such, the Company determined the Legal eDiscovery business has met the criteria to be classified as assets held for sale as of July 29, 2014.

The carrying amounts of the major class of assets and liabilities included as part of the asset held for sale were as follow:



	June 30, 2014
Account receivable, net	$	10,398
Property and equipment, net	1,318
Other assets	300
Total assets	$	12,016
Total liabilities	$	2,785

Credit Facilities

Receivables Finance Agreement with Lloyds Bank Commercial Finance Limited and Lloyds Bank PLC

On August 1, 2014, the Company’s U.K. subsidiary Hudson Global Resources Limited (“U.K. Borrower”) entered into a receivables finance agreement for an asset-based lending funding facility (the “Lloyds Agreement”) with Lloyds Bank PLC and Lloyds Bank Commercial Finance Limited (together, “Lloyds”). The Lloyds Agreement provides the U.K. Borrower with the ability to borrow up to $25,236 (£15,000). Extensions of credit are based on a percentage of the eligible accounts receivable less required reserves from the Company's U.K. operations. The initial term is two years with renewal periods every three months thereafter. Borrowings under this facility are secured by substantially all of the assets of the U.K. Borrower.

The credit facility under the Lloyds Agreement contains two tranches. The first tranche is a revolving facility based on the billed temporary contracting and permanent recruitment activities in the U.K. operation ("Lloyds Tranche A"). The borrowing limit of Lloyds Tranche A is $20,189 (£12,000) based on 83% of eligible billed temporary contracting and permanent recruitment receivables. The second tranche is a revolving facility that is based on the unbilled work-in-progress activities in the U.K. operation ("Lloyds Tranche B"). The borrowing limit of Lloyds Tranche B is $5,047 (£3,000) based on 75% of eligible work-in-progress from temporary contracting and 25% of eligible work-in-progress from the permanent recruitment. For both tranches, borrowings may be made with an interest rate based on a base rate as determined by Lloyds Bank PLC, based on the Bank of England base rate, plus 1.75%.

The Lloyds Agreement contains various restrictions and covenants including (1) that true credit note dilution may not exceed 5%, measured at audit on a regular basis; (2) debt turn may not exceed 55 days over a three month rolling period; (3) dividends by the U.K. Borrower to the Company are restricted to the value of post tax profits; and (4) at the end of each month, there must be a minimum excess availability of $3,365 (£2,000).

Loan and Security Agreement with Siena Lending Group, LLC

On August 1, 2014, the Company and its U.S. subsidiary Hudson Global Resources Management, Inc. (“U.S. Borrower”) entered into a loan and security agreement for a credit facility (the “Siena Agreement”) with Siena Lending Group, LLC. ("Siena"). The Siena Agreement provides the U.S. Borrower with the ability to borrow up to $10,000 (subject to a borrowing base and an availability block), including up to $1,000 for the issuance of letters of credit. In the event of a sale of the Company’s eDiscovery business, the aforementioned borrowing limit will be reduced to $5,000 (subject to a borrowing base and an availability block). The availability block currently is $2,000 but will be decreased to $1,000 in the event of a sale of the Company’s eDiscovery business. The availability block will be eliminated on the later of (a) the date on which the U.S. Borrower notifies Siena that the U.S. Borrower’s Fixed Charge Coverage Ratio is equal to or greater than 1.1x on a trailing six month basis and (b) January 31, 2015. Extensions of credit are based on borrowing base calculated on a percentage of the eligible accounts receivable less required reserves related to the U.S. operations. The term of the Siena Agreement is three years expiring on August 1, 2017. Borrowings may be made with an interest rate based on a base rate (with a floor of 3.25%) plus 1.75%. The interest rate for letters of credit is 4.5% on face amount of each letter of credit issued and outstanding. Borrowings under the Siena Agreement are secured by substantially all of the assets of the U.S. Borrower.

The Siena Agreement contains various restrictions and covenants including (1) a requirement that the U.S. Borrower maintain a Fixed Charge Coverage Ratio of equal to or greater than 1.1x after the later of (a) the date on which the U.S. Borrower notifies Siena that the U.S. Borrower’s Fixed Charge Coverage Ratio is equal to or greater than 1.1x on a trailing six month basis and (b) January 31, 2015; (2) a limit on the payment of dividends by the U.S. Borrower; (3) restrictions on the ability of the U.S. Borrower to incur additional debt, acquire, merge or otherwise change the ownership of the U.S. Borrower; (4) restrictions on investments and acquisitions; and (5) restrictions on dispositions of assets.

2014 Reorganization Plan Approval

On July 29, 2014, the Board approved a restructuring program ("2014 Plan") that involves various actions for optimizations of existing real estate and global workforce, including integration of support services and systems at the regional and corporate level. These initiatives are expected to result in a restructuring charge of up to $7,000, which is expected to be taken over the next twelve months, depending on the timing of other strategic actions, such as the sale of the Company's eDiscovery business. When the actions are fully completed, we expect to generate an ongoing, annualized return of one and one-half to two times the charge.