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Certain Relationships and Related Party Transactions
3 Months Ended
Mar. 31, 2019
Related Party Transactions [Abstract]  
Certain Relationships and Related Party Transactions
Certain Relationships and Related Party Transactions

Since 2016, we have conducted (and we continue to conduct) business with Wipro, whereby Wipro provides us with a variety of technology-related services, including database and software development, database support and analytics, IT infrastructure support, leased facilities and digital campaign management. Additionally, we also provide Wipro with agency services and consulting services.

Effective January 30, 2018, Wipro became a related party when it purchased 9,926 shares of our Series A Preferred Stock (which are convertible at Wipro's option into 1,001,614 shares, or 16% of our Common Stock), for aggregate consideration of $9.9 million. For information pertaining to the Company’s preferred stock, See Note E, Convertible Preferred Stock.

During the three months ended March 31, 2019, we recorded an immaterial amount of revenue for services we provided to Wipro. During the three months ended March 31, 2018, we recorded no revenue from services we provided to Wipro.

During the three months ended March 31, 2019 and 2018, we recorded $6.3 million and $2.8 million of expense, respectively, in technology-related services and lease expense for a facility Wipro provided to us. Included in the first quarter 2019 $6.3 million expense was also a one-time termination charge of $2.1 million as in the first quarter of 2019, we terminated several contracts with Wipro and entered into new agreements resulting in $3.3 million of annual savings.

During the three months ended March 31, 2019 and 2018, we capitalized $0.8 million and $1.1 million, respectively, for internally developed software services received from Wipro. These remaining capitalized costs are included in Property, Plant and Equipment on the Condensed Consolidated Balance Sheet as of March 31, 2019 and 2018.

As of March 31, 2019 and December 31, 2018, we had a trade payable due to Wipro of $5.3 million and $5.0 million, respectively. As of March 31, 2019 and December 31, 2018, we had an immaterial amount in trade receivables due from Wipro for services provided in 2017 but invoiced in 2018.

As described in “Note F- Long-Term Debt", the Company’s Texas Capital Credit Facility is secured by HHS Guaranty, LLC, an entity formed to provide credit support for the Company by certain members of the Shelton family (descendants of one of our founders). Pursuant to the Amended and Restated Fee, Reimbursement and Indemnity Agreement, dated January 9, 2018, between HHS Guaranty, LLC and the Company, HHS Guaranty, LLC has the right to appoint one representative director to the Board of Directors. Currently, David L. Copeland serves as the HHS Guaranty, LLC representative on the Board of Directors.