Enom 2010 Annual Report Download - page 43

Table of Contents
net senior leverage ratio. In addition, our credit facility with a syndicate of commercial banks contains covenants restricting our ability to, among other things:
incur additional debt or incur or permit to exist certain liens;
pay dividends or make other distributions or payments on capital stock;
make investments and acquisitions;
enter into transactions with affiliates; and
transfer or sell our assets.
These covenants could adversely affect our ability to finance our future operations or capital needs or to pursue available business opportunities,
including acquisitions. A breach of any of these covenants could result in a default and acceleration of our indebtedness. Furthermore, if the syndicate is
unwilling to waive certain covenants, we may be forced to amend our credit facility on terms less favorable than current terms or enter into new financing
arrangements. As of December 31, 2010, we had no indebtedness outstanding under this facility.
We may need additional funding to meet our obligations and to pursue our business strategy. Additional funding may not be available to us and our
financial condition could therefore be adversely affected.
We may require additional funding to meet our ongoing obligations and to pursue our business strategy, which may include the selective acquisition of
businesses and technologies. There can be no assurance that if we were to need additional funds that additional financing arrangements would be available in
amounts or on terms acceptable to us, if at all. Furthermore, if adequate additional funds are not available, we may be required to delay, reduce the scope of or
eliminate material parts of the implementation of our business strategy, including potential additional acquisitions or internally-developed businesses.
We have made and may make additional acquisitions that could entail significant execution, integration and operational risks.
We have made numerous acquisitions in the past and our future growth may depend, in part, on acquisitions of complementary websites, businesses,
solutions or technologies rather than internal development. We may consider making acquisitions in the future to increase the scope of our business
domestically and internationally. The identification of suitable acquisition candidates can be difficult, time-consuming and costly, and we may not be able to
successfully complete identified acquisitions. If we are unable to identify suitable future acquisition opportunities, reach agreement with such parties or obtain
the financing necessary to make such acquisitions, we could lose market share to competitors who are able to make such acquisitions. This loss of market
share could negatively impact our business, revenue and future growth.
Furthermore, even if we successfully complete an acquisition, we may not be able to successfully assimilate and integrate the websites, business,
technologies, solutions, personnel or operations of the company that we acquired, particularly if key personnel of an acquired company decide not to work for
us. In addition, we may incur indebtedness to complete an acquisition, which would increase our costs and impose operational limitations, or issue equity
securities, which would dilute our stockholders' ownership and could adversely affect the price of our common stock. We may also unknowingly inherit
liabilities from previous or future acquisitions that arise after the acquisition and are not adequately covered by indemnities.
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