Incredimail 2013 Annual Report Download - page 122

PERION NETWORK LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 7:- ACCRUED EXPENSES AND OTHER LIABILITIES
The facilities of the Company are rented under lease operating agreements that expire in 2015. The Company leases its motor
vehicles and servers under cancelable operating lease agreements.
Aggregate minimum lease commitments under operating leases as of December 31, 2013 were as follows:
Total rent expenses for the years ended December 31, 2011, 2012 and 2013 amounted to $586, $967 and $1,073, respectively.
Total lease expenses for motor vehicles for the years ended December 31, 2011, 2012 and 2013 amounted to $ 349 $ 234 and
$ 284, respectively.
Pursuant to the terms of the SPA between the Company and SweetIM, the Company is obligated to pay SweetIM's shareholders a
payment of up to $ 7,500 in cash 18 months after closing, May 2014,if certain milestones are met. The milestones are based on
the Company's revenues in the fiscal year of 2013, and the absence of certain changes in the industry in which the Company
operates. The Company believes that the terms of the SPA will require the Company to pay $2,500 with respect to the contingent
payment.
On November 10, 2013, the Company was served with a lawsuit filed in the Tel Aviv District Court (Economic Department)
against the Company and its directors by an individual claiming to be a holder of 150 of the Company’
s ordinary shares. The
plaintiff alleges certain flaws in the process, price and disclosure in connection with the ClientConnect Acquisition. The plaintiff
requested that the court certify the lawsuit as a valid class action, a declaratory judgment confirming the plaintiff's allegations
and certain remuneration for the purported plaintiff, including legal fees. The Company believes that the complaint is without
merit and plan to defend against it vigorously.
The Agreements contain various provisions including a pledge of all the Company’
s assets under a floating charge,
compliance with certain financial covenants, restrictive covenants, including negative pledges, and other commitments,
typically contained in facility agreements of this type. In December 2013, the Company amended the agreement with one
of the Banks to remove one of the financial covenants. As of December 31, 2013, the Company was in compliance with
December 31,
2012
2013
Employees and payroll accruals
$
3,865
$
3,021
Government authorities
3,812
7,046
Uncertain tax position liability (refer to note 10i)
3,952
574
Deferred tax liabilities, net
971
659
Accrued expenses and other
2,079
5,120
$
14,679
$
16,420
NOTE 8:
-
COMMITMENTS AND CONTINGENT LIABILITIES
a.
Lease commitments
2014
1,260
2015
669
1,929
Subsequent to December 31, 2013, the Company leased additional space in Holon, Israel. The lease expires in 2024, with an
option to extend for two additional periods of 24 months. The monthly lease payment for this facility is $ 256. The Company
plans to move all of its Israeli personnel to Holon during the third quarter of 2014.
b.
Contingent purchase obligation
c.
Legal Matters
NOTE 9:
-
LONG
-
TERM LOAN
a.
On May 17, 2012 the Company entered into Loan Agreements (the "Agreements"), with two Israeli Banks (the "Banks"),
based on which the Company borrowed a total of $ 10,000.