Long term obligations

3 Months Ended

Mar. 31, 2015

Long term obligations

Total long-term obligations as of March 31, 2015 and December 31, 2014 consist of the following (in thousands):

	March 31,		December 31,
	2015		2014

Vendor obligations
Capital lease obligations ⁽¹⁾	$	577	$	656
Deferred lease payments ⁽²⁾		720		792
Microsoft licenses ⁽³⁾		454		759

Acquisition related liability ⁽⁴⁾		1,584		1,735

Pension obligations
Accrued pension liability		3,356		3,204
		6,691		7,146
Less: Current portion of long term obligations		1,355		1,606
Totals	$	5,336	$	5,540

⁽¹⁾ In March 2014, the Company entered into an equipment sale leaseback agreement with a financing company. The cash proceeds from the transaction were $0.9 million. The Company leased the equipment for a period of 36 months at an effective interest rate of approximately 6% and has the option to purchase the equipment at a nominal amount at the end of the lease term. The Company has accounted for this transaction as a financing arrangement, wherein the equipment remains on the Company’s books and will continue to be depreciated. As of March 31, 2015, the Company had made $0.1 million in lease payments under the sale leaseback agreement.

⁽²⁾ Deferred lease payments represent the effect of straight-lining non-financing type lease payments over the respective lease terms.

⁽³⁾ In March 2014, the Company renewed a vendor agreement to acquire certain additional software licenses and to receive support and subsequent software upgrades on these and other currently owned software licenses through February 2017. Pursuant to this agreement, the Company is obligated to pay approximately $0.4 million annually over the term of the agreement. The total cost, net of deferred interest (in thousands), was allocated to the following asset accounts in 2014:

Prepaid expenses and other current assets	$	356
Other assets		713
Property and equipment		136
	$	1,205

⁽⁴⁾ Amount represents a portion of the purchase price consideration for the acquisition of MediaMiser to be paid by the Company as follows: $0.5 million on July 28, 2015 in shares of Innodata Inc.’s common stock, or at the Company’s option, in cash, and $0.6 million on July 28, 2016 in shares of Innodata Inc.’s common stock, or at the Company’s option, in cash. In addition, the Company agreed to pay up to a maximum of $4.6 million of contingent consideration based on MediaMiser’s achieving certain revenue and EBITDA levels during the period from April 1, 2016 to March 31, 2017. The fair value of the contingent consideration as of March 31, 2015 was $0.5 million.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

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