Long-term Obligations

12 Months Ended

Dec. 31, 2018

Long term obligations

Total long-term obligations as of December 31, 2018 and 2017 consist of the following (in thousands):

	December 31,
	2018		2017

Capital lease obligations	$	574	$	829
Deferred lease payments (1)		489		731
Microsoft licenses (2)		355		751
Acquisition related liability (3)		-		800
Lease incentive liability (4)		572		664
Pension obligations - accrued pension liability		2,591		2,835
Settlement agreement (5)		1,010		1,200
		5,591		7,810
Less: Current portion of long-term obligations		1,529		3,333
Totals	$	4,062	$	4,477

(1)

Deferred lease payments represent the effect of straight-lining operating lease payments over the respective lease terms.

(2)

In March 2017, 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 2020. 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 2017:

Prepaid expenses and other current assets	$	404
Other assets		809
	$	1,213

(3)

On September 30, 2016, the Company and the other parties to the transaction in which the Company acquired MediaMiser Ltd. amended the terms on which a subsidiary of the Company is required to make a supplemental purchase price payment for MediaMiser Ltd. MediaMiser Ltd. is now known as Agility PR Solutions Canada Ltd. Prior to the amendment, the amount of the supplemental purchase price payment was to be determined by the achievement of certain financial thresholds and was in no event to

exceed $3.8 million (C$5 million). The amendment fixed the amount of the supplemental purchase price payment at $1.5 million (C$2 million) payable in two equal installments on March 31, 2017 and 2018 to designated recipients, except that no payments will be made to designated recipients who fail to satisfy specified conditions. The Company had the option to pay up to 70% of the supplemental amount in shares of Innodata Inc. stock. In March 2017, the Company paid 70% of the first installment by issuing 253,622 shares of Innodata Inc.’s common stock and paid 30% of the first installment in cash in April 2017. The Company paid the entire second installment in cash in April 2018.

(4)

In the second quarter of 2017, the Company relocated its U.S. and Canadian headquarters to new premises. As a financial incentive for the Company to lease office space in each of the new locations, the respective lessor for each of the locations offered to partially defray the construction cost for the new office space by offering tenant improvement allowances, subject to the Company refunding any unamortized portion of the allowance under specified circumstances as set forth in each lease. These amounts will be amortized based on the contractual lease term and recognized as a reduction in rent expense for the periods covered.

(5)

Represents payment to be made pursuant to a settlement agreement entered into between a subsidiary of the Company and 19 former employees of such subsidiary in December of 2018. $168,000 was paid in January 2019 and $842,000 will be paid in 48 monthly installments commencing April 2019.