Go Daddy 2015 Annual Report Download - page 52

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• limiting our ability to obtain additional financing for working capital, capital expenditures, product development, satisfaction of debt service
requirements, acquisitions and general corporate or other purposes; and
• limiting our flexibility in planning for, or reacting to, changes in our business or market conditions and placing us at a competitive disadvantage
compared to our competitors who may be better positioned to take advantage of opportunities our leverage prevents us from exploiting.
All of our indebtedness consists of indebtedness under our term loan which matures in 2021 . We may not be able to refinance our existing indebtedness
because of our high level of debt or adverse conditions in credit markets generally.
Furthermore, we may incur significant additional indebtedness in the future. Although the credit agreement governing substantially all of our indebtedness
contains restrictions on the incurrence of additional indebtedness and entering into certain types of other transactions, these restrictions are subject to a number of
qualifications and exceptions. Additional indebtedness incurred in compliance with these restrictions could be substantial. These restrictions also do not prevent us
from incurring obligations, such as trade payables. To the extent we incur additional indebtedness, the substantial leverage risks described above would be
exacerbated.
Certain of our debt agreements impose significant operating and financial restrictions on us and our subsidiaries, which may prevent us from capitalizing on
business opportunities.
The credit agreement governing our credit facility imposes significant operating and financial restrictions on us. These restrictions limit the ability of our
subsidiaries, and effectively limit our ability to, among other things:
• incur or guarantee additional debt or issue disqualified equity interests;
• pay dividends and make other distributions on, or redeem or repurchase, capital stock;
•make certain investments;
• incur certain liens;
• enter into transactions with affiliates;
• merge or consolidate;
•enter into agreements restricting the ability of restricted subsidiaries to make certain intercompany dividends, distributions, payments or transfers;
and
•transfer or sell assets.
As a result of the restrictions described above, we will be limited as to how we conduct our business and we may be unable to raise additional debt or equity
financing to compete effectively or to take advantage of new business opportunities. The terms of any future indebtedness we may incur could include more
restrictive covenants. We cannot assure you that we will be able to maintain compliance with these covenants in the future and, if we fail to do so, that we will be
able to obtain waivers from the lenders or amend the covenants.
Our failure to comply with the restrictive covenants described above as well as other terms of our indebtedness or the terms of any future indebtedness from
time to time could result in an event of default, which, if not cured or waived, could result in our being required to repay these borrowings before their due date. If
we are forced to refinance these borrowings on less favorable terms or are unable to refinance these borrowings, our results of operations and financial condition
could be adversely affected.
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