Commitments and Contingencies

9 Months Ended

Sep. 30, 2012

Commitments and Contingencies

9. COMMITMENTS AND CONTINGENCIES

Employee Loan Program — Beginning in third quarter of 2006, the Company started to guarantee bank loans for certain of its key employees. Under the conditions of the guarantees, the Company is required to maintain a security deposit of 30% of the value of loans outstanding at each reporting date. While the program has been discontinued, total commitment of the Company under these guarantees remains at $580 as of September 30, 2012. The Company estimates a probability of material losses under the program as remote, therefore, no provision for losses was recognized for the three and nine months ended September 30, 2012.

Construction in progress — On December 7, 2011, the Company entered into an agreement with IDEAB Project Eesti AS for approximately $17,209 for the construction of a 14,071 square meter office building within the High Technologies Park in Minsk, Belarus. During the third quarter of 2012, total expected construction cost was increased to approximately $18,538. The building is expected to be operational in the first half of 2013. As of September 30, 2012, total outstanding commitment of the Company was $4,445.

Corporate Facilities — In June 2012, the Company entered into an agreement for the construction of 12 corporate apartments located within the High Technology Zone in Minsk, Belarus. During the third quarter of 2012, the agreement was amended and the number of apartments was increased to 26. As of September 30, 2012, total construction cost is estimated at $1,030. The Company’s outstanding commitment at September 30, 2012 was approximately $759. The construction is expected to be completed in 2013. The Company intends to use the apartments for general business purposes.

Employee Housing Program — In the third quarter of 2012, the Board of Directors of the Company approved the Employee Housing Program (“the Housing Program”), which assists employees in purchasing housing in Belarus. The Company does not bear any market risk as the housing will be sold directly to employees by independent third parties. As part of the Housing Program, the Company will extend financing to employees up to an aggregate amount of $10,000. The loans will be issued in U.S. Dollars with a 5 year term and bear an interest rate of 7.5% which is below the market interest rate in Belarus. The Housing Program was designed to be a retention mechanism for the Company’s employees in Belarus and will be available to full-time employees who have been with the Company for at least three years. As of September 30, 2012, the Company’s total outstanding commitment under the Housing Program was $0.