Earthlink 2012 Annual Report Download - page 33

Table of Contents
Our debt agreements include restrictive covenants, and failure to comply with these covenants could trigger acceleration of payment of
outstanding indebtedness.
The agreements that govern the ITC^DeltaCom Notes, Senior Notes and senior secured revolving credit facility impose significant
operating and financial restrictions on us. These restrictions limit or restrict, among other things, our ability and the ability of our restricted
subsidiaries to:
If we breach any of these covenants, a default could result under one or more of these agreements, which may require us
to repay some or all of our indebtedness.
Risks Related to Ownership of Our Common Stock
We may reduce, or cease payment of, quarterly cash dividends.
The payment of future quarterly dividends is discretionary and is subject to determination by our Board of Directors each quarter
following its review of our financial condition, results of operations, cash requirements, investment opportunities and such other factors as are
deemed relevant by our Board of Directors. Changes in our business needs, including funding for acquisitions, capital expenditures and working
capital, or a change in tax laws relating to dividends, among other factors, could cause our Board of Directors to decide to reduce, or cease the
payment of, dividends in the future. In addition, the agreements governing our Senior Notes and our senior secured revolving credit facility
contain restrictions on the amount of dividends we can pay. There can be no assurance that we will not decrease or discontinue quarterly cash
dividends, and if we do, our stock price could be negatively impacted.
Our stock price may be volatile.
The trading price of our common stock may be subject to fluctuations in response to certain events and factors, such as our entry into
business combinations or other major transactions; quarterly variations in results of operations; changes in financial estimates; changes in
recommendations or reduced coverage by securities analysts; the operating and stock price performance of other companies that investors may
deem comparable to us; news reports relating to trends in the markets in which we operate; market trends unrelated to our performance; and
general economic conditions. A significant drop in our stock price could also expose us to the risk of securities class action lawsuits, which
could result in substantial costs and divert management's attention and resources, which could adversely affect our business. Finally, volatility or
a lack of positive performance in our stock price may adversely affect our ability to retain key employees, many of whom have been granted
stock incentive awards.
Provisions of our certificate of incorporation, bylaws and other elements of our capital structure could limit our share price and delay a
change of control of the company.
Our certificate of incorporation and bylaws contain provisions that could make it more difficult or even prevent a third party from
acquiring us without the approval of our incumbent Board of Directors. These provisions, among other things, limit the right of stockholders to
call special meetings of stockholders and authorize the Board of Directors to issue preferred stock in one or more series without any action on
the part of stockholders. These provisions could limit the price that investors might be willing to pay in the future for shares of our common
stock and significantly impede the ability of the holders of our common stock to change control of the company. These provisions that inhibit or
discourage takeover attempts could reduce the market value of our common stock.
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incur or guarantee additional indebtedness or issue preferred stock;
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pay dividends or make other distributions to stockholders;
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purchase or redeem capital stock or subordinated indebtedness;
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make investments;
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create liens or use assets as security;
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enter into agreements restricting such restricted subsidiaries' ability to pay dividends, make loans or transfer assets to us or other
restricted subsidiaries;
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engage in transactions with affiliates; and
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consolidate or merge with or into other companies or transfer all or substantially all of our or their assets.