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International Business Machines Corporation Information Technology Outsourcing Agreement | 12 Months Ended
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Dec. 31, 2012
International Business Machines Corporation Information Technology Outsourcing Agreement | 18. International Business Machines Corporation Information Technology Outsourcing Agreement On March 17, 2008, the Company entered into a Master Services Agreement (“Outsourcing Agreement”) with IBM to outsource the Company’s internal information technology (“IT”) environment to IBM. Under the terms of the Outsourcing Agreement, IBM provided the Company with global IT infrastructure services including the following services, which services were provided by the Company: cross functional delivery management services, asset management services, help desk services, end user services, server system management services, storage management services, data network services, enterprise security management services and disaster recovery/business continuity plans (collectively, the “IT Services”). The Company retains responsibility for its security policy management and on-demand business operations. The initial term of the Outsourcing Agreement was seven years, commencing on March 17, 2008. Under the Outsourcing Agreement, the Company retains the right to terminate the agreement both for cause and for its convenience. However, upon any termination of the Outsourcing Agreement by the Company for any reason (other than for material breach by IBM), the Company would be required to pay a termination charge to IBM, which charge may be material. On April 1, 2012, the Company provided notice of termination for the Master Services Agreement with International Business Machines to outsource the Company’s internal information technology environment. The effective date of the termination was December 31, 2012. The Company has recorded the $3.0 million termination fee in general and administrative expenses during the year ended December 31, 2012 in the accompanying consolidated condensed statements of operations. The termination fee was paid on January 31, 2013. As a part of the original Outsourcing Agreement, IBM provided the Company with certain transition services required to transition the Company’s IT operations embodied in the IT Services in accordance with a mutually agreed upon transition plan (the “Transition Services”). Transition Services were completed approximately 21 months after the effective date of the Outsourcing Agreement and the Company paid approximately $6.7 million for the Transition Services. These Transition Services were recognized as incurred based on the capital or expense nature of the cost. Of the $6.7 million recognized, approximately $6.5 million has been paid, and the remaining $0.2 million was forgiven as a part of the Company’s termination agreement with IBM. This $0.2 million was recognized as a gain in the consolidated statements of income.

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- Definition The entire disclosure regarding the information technology outsourcing agreement that the Company entered into with International Business Machines; including, general services provided by and fees to be paid to International Business Machines. + References No definition available. + Details
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