Expedia 2015 Annual Report Download - page 35

• Limiting our ability to borrow additional funds or to borrow funds at rates or on other terms we find
acceptable.
The agreements governing our indebtedness contain various covenants that may limit our ability to
effectively operate our businesses, including those that restrict our ability to, among other things:
• Borrow money, and guarantee or provide other support for indebtedness of third parties including
guarantees;
• Pay dividends on, redeem or repurchase our capital stock;
• Enter into certain asset sale transactions, including partial or full spin-off transactions;
• Enter into secured financing arrangements;
• Enter into sale and leaseback transactions; and
• Enter into unrelated businesses.
In addition, our credit facility requires that we meet certain financial tests, including an interest coverage
test and a leverage ratio test.
Any failure to comply with the restrictions of our credit facility or any agreement governing our other
indebtedness may result in an event of default under those agreements. Such default may allow the creditors to
accelerate the related debt, which acceleration may trigger cross-acceleration or cross-default provisions in other
debt. In addition, lenders may be able to terminate any commitments they had made to supply us with further
funds (including periodic rollovers of existing borrowings). In addition, it is possible that we may need to incur
additional indebtedness in the future in the ordinary course of business. The terms of our credit facility and the
indentures governing our outstanding senior notes allow us to incur additional debt subject to certain limitations.
If new debt is added to current debt levels, the risks described above could intensify.
We cannot be sure that our intellectual property and proprietary information is protected from
copying or use by others, including potential competitors.
Our websites and mobile applications rely on content, brands and technology, much of which is proprietary.
We establish and protect our intellectual property by relying on a combination of trademark, copyright, trade
secret and patent laws in the U.S. and other jurisdictions, license and confidentiality agreements, and internal
policies and procedures. In connection with our license agreements with third parties, we seek to control access
to, and the use and distribution of, our proprietary information and intellectual property. Even with these
precautions, however, it may be possible for another party to copy or otherwise obtain and use our intellectual
property without our authorization or to develop similar intellectual property independently. Effective trademark,
copyright, patent and trade secret protection may not be available in every jurisdiction in which our services are
made available, and policing unauthorized use of our intellectual property is difficult and expensive. We cannot
be sure that the steps we have taken will prevent misappropriation or infringement of intellectual property. Any
misappropriation or violation of our rights could have a material adverse effect on our business. Furthermore, we
may need to go to court or other tribunals to enforce our intellectual property rights, to protect our trade secrets
or to determine the validity and scope of the proprietary rights of others. These proceedings might result in
substantial costs and diversion of resources and management attention.
We currently license from third parties some of the technologies, content and brands incorporated into our
websites. As we continue to introduce new services that incorporate new technologies, content and brands, we
may be required to license additional technology, content or brands. We cannot be sure that such technology,
content and brand licenses will be available on commercially reasonable terms, if at all.
Part I. Item 1B. Unresolved Staff Comments
None.
31