Clearwire 2008 Annual Report Download - page 39

O
ur su
b
stant
i
a
li
n
d
e
b
te
d
ness cou
ld h
ave
i
mportant consequences to t
h
e
h
o
ld
ers o
f
C
l
earw
i
re C
l
ass A Common
S
tock, such as
:
• cash flows from operations and investin
g
activities were ne
g
ative for the Old Clearwire and the Sprin
t
W
i
MAX Bus
i
ness s
i
nce
i
ncept
i
on an
d
are expecte
d
to
b
eso
f
or us
f
or some t
i
me, an
d
we may not
b
ea
bl
et
o
o
b
ta
i
na
ddi
t
i
ona
lfi
nanc
i
ng to
f
un
d
wor
ki
ng cap
i
ta
l
, operat
i
ng
l
osses, cap
i
ta
l
expen
di
tures or acqu
i
s
i
t
i
ons
,
i
ncludin
g
spectrum acquisitions, on terms acceptable to us, or at all;
•wema
y
be unable to refinance our indebtedness on terms acceptable to us, or at all; an
d
• our substantial indebtedness ma
y
make us more vulnerable to economic downturns and limit our abilit
y
t
o
withstand com
p
etitive
p
ressure.
Additionall
y
, covenants in the Amended Credit A
g
reement
g
overnin
g
our Senior Term Loan Facilit
y
impose
operat
i
ng an
dfi
nanc
i
a
l
restr
i
ct
i
ons on t
h
e Co-Borrowers, C
l
earw
i
re Commun
i
cat
i
ons an
d
t
h
e Guarantors. T
h
es
e
r
estrictions prohibit or limit their abilit
y
, and the abilit
y
of their subsidiaries, to, amon
g
other thin
g
s
:
•pa
ydi
v
id
en
d
s to mem
b
ers o
f
C
l
earw
i
re Commun
i
cat
i
ons,
i
nc
l
u
di
n
g
C
l
earw
i
re;
•
i
ncur
,
or cause certa
i
no
f
our su
b
s
idi
ar
i
es to
i
ncur
,
a
ddi
t
i
ona
li
n
d
e
b
te
d
ness
;
• perm
i
t
li
ens on or con
d
uct sa
l
es o
f
an
y
assets p
l
e
dg
e
d
as co
ll
atera
l
;
•se
ll
a
ll
or su
b
stant
i
a
lly
a
ll
o
f
our assets or conso
lid
ate or mer
g
ew
i
t
h
or
i
nto ot
h
er compan
i
es;
• repa
y
ex
i
st
i
n
gi
n
d
e
b
te
d
ness; an
d
•en
g
a
g
e
i
n transact
i
ons w
i
t
h
a
ffili
ates
.
A
b
reac
h
o
f
an
y
o
f
t
h
ese covenants cou
ld
resu
l
t
i
na
d
e
f
au
l
tun
d
er t
h
e Amen
d
e
d
Cre
di
tA
g
reement an
d
cou
ld
c
ause our repa
y
ment obli
g
ations to be accelerated. If a default causes our debt repa
y
ment obli
g
ations to be
accelerated, our assets may be insufficient to repay the amount due in full. If we are unable to repay or refinance
th
ose amounts, t
h
eco
ll
atera
l
a
g
ent
f
or our Sen
i
or Term Loan Fac
ili
t
y
cou
ld
procee
d
a
g
a
i
nst t
h
e assets p
l
e
dg
e
d
t
o
s
ecure t
h
ese o
blig
at
i
ons, w
hi
c
hi
nc
l
u
d
esu
b
stant
i
a
lly
a
ll
o
f
our assets.
Th
ese restr
i
ct
i
ons ma
yli
m
i
t our a
bili
t
y
to o
b
ta
i
na
ddi
t
i
ona
lfi
nanc
i
n
g
,w
i
t
h
stan
dd
ownturns
i
n our
b
us
i
ness an
d
t
ake advantage of business opportunities. Moreover, we may seek additional debt financing on terms that includ
e
m
ore restr
i
ct
i
ve covenants, may requ
i
re repayment on an acce
l
erate
d
sc
h
e
d
u
l
e or may
i
mpose ot
h
er o
bli
gat
i
ons t
h
a
t
li
m
i
t our a
bili
t
y
to
g
row our
b
us
i
ness, acqu
i
re nee
d
e
d
assets, or ta
k
eot
h
er act
i
ons we m
igh
tot
h
erw
i
se cons
id
er
a
pp
ro
p
riate or desirable.
We have committed to deploy a wireless broadband network using mobile WiMAX technology and woul
d
incur signi
f
icant costs to
d
e
pl
o
y
a
l
ternative tec
h
no
l
ogies, even i
f
t
h
ere are a
l
ternative tec
h
no
l
ogies avai
l-
abl
eint
h
e
f
uture t
h
at wou
ld b
e tec
h
no
l
ogica
lly
su
p
erior or more cost e
ff
ective
.
Under the Intel Market Development Agreement, we have committed to undertake certain marketing efforts
wi
t
h
respect to our mo
bil
eW
i
MAX serv
i
ces an
d
are su
bj
ect to certa
i
n restr
i
ct
i
ons on our a
bili
t
y
to commerc
i
a
lly
deplo
y
alternative wireless broadband or data technolo
gy
on our networks throu
g
h November 28, 2011, as lon
g
as
c
ertain requirements are satisfied. We have expended si
g
nificant resources and made substantial investments to
d
ep
l
oy a w
i
re
l
ess
b
roa
db
an
d
networ
k
us
i
ng mo
bil
eW
i
MAX tec
h
no
l
og
i
es. We
d
epen
d
on or
i
g
i
na
l
equ
i
pmen
t
m
anufacturers to develo
p
and
p
roduce mobile WiMAX e
q
ui
p
ment and subscriber devices that will o
p
erate on ou
r
n
etwork, and on Intel to cause mobile WiMAX chipsets to be embedded into laptops and other computin
g
devices
.
Whil
ewe
h
ave
d
ep
l
oye
d
mo
bil
eW
i
MAX networ
k
s
i
n Port
l
an
d
, Oregon an
d
Ba
l
t
i
more, Mary
l
an
d
, we cannot assur
e
y
ou that commercial quantities of mobile WiMAX equipment and subscriber devices that meet our requirements
w
ill continue to be available on the schedule we ex
p
ect, or at all, or that vendors will continue to develo
p
an
d
p
ro
d
uce mo
bil
eW
i
MAX equ
i
pment an
d
su
b
scr
ib
er
d
ev
i
ces
i
nt
h
e
l
ong term, w
hi
c
h
may requ
i
re us to
d
ep
l
o
y
a
l
ternat
i
ve tec
h
no
l
o
gi
es. Ot
h
er compet
i
n
g
tec
h
no
l
o
gi
es, suc
h
as LTE an
d
U
l
tra Mo
bil
e Broa
db
an
d
,w
ill b
e
d
eve
l
ope
d
t
h
at ma
yh
ave a
d
vanta
g
es over mo
bil
eW
i
MAX, an
d
operators o
f
ot
h
er networ
k
s
b
ase
d
on t
h
os
e
c
ompeting technologies may be able to deploy these alternative technologies at a lower cost and more quickly than
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