Clearwire 2010 Annual Report Download - page 119

our board of directors, had a consulting agreement with Ericsson. As part of his consulting agreement,
Dr. Eslambolchi received payments for his services from Ericsson. He has not received any compensation directly
from us related to his relationship with Ericsson. For the year ended December 31, 2010, we capitalized $8.9 million
in costs paid to Ericsson to Network and Base Station Equipment, of which $1.8 million was included in Accounts
payable and other current liabilities.
Master Site Agreement — We entered into a master site agreement with Sprint, which we refer to as the
Master Site Agreement, pursuant to which Sprint and we established the contractual framework and procedures for
the leasing of tower and antenna collocation sites to each other. Leases for specific sites will be negotiated by Sprint
and us on request by the lessee. The leased premises may be used by the lessee for any activity in connection with
the provision of wireless communications services, including attachment of antennas to the towers at the sites. The
term of the Master Site Agreement is ten years from the Closing. The term of each lease for each specific site will be
five years, but the lessee has the right to extend the term for up to an additional 20 years. The monthly fee will
increase 3% per year. The lessee is also responsible for the utility costs and for certain additional fees. During the
years ended December 31, 2010, 2009 and 2008, we recorded rent expense of $52.7 million, $28.2 million and
$2.8 million, respectively.
Master Agreement for Network Services — We entered into a master agreement for network services, which
we refer to as the Master Agreement for Network Services, with various Sprint affiliated entities, which we refer to
as the Sprint Entities, pursuant to which the Sprint Entities and we established the contractual framework and
procedures for us to purchase network services from Sprint Entities. We may order various services from the Sprint
Entities, including IP network transport services, data center co-location, toll-free services and access to the
following business platforms: voicemail, instant messaging services, location-based systems and media server
services. The Sprint Entities will provide a service level agreement that is consistent with the service levels provided
to similarly situated subscribers. Pricing is specified in separate product attachments for each type of service; in
general, the pricing is based on the mid-point between fair market value of the service and the Sprint Entities’ fully
allocated cost for providing the service. The term of the Master Agreement for Network Services is five years, but
the lessee will have the right to extend the term for an additional five years. Additionally, in accordance with the
Master Agreement for Network Services with the Sprint Entities, we assumed certain agreements for backhaul
services with certain of the Investors that contain commitments that extend up to five years.
IT Master Services Agreement — We entered into an IT master services agreement with the Sprint Entities,
which we refer to as the IT Master Services Agreement, pursuant to which the Sprint Entities and we established the
contractual framework and procedures for us to purchase IT application services from the Sprint Entities. We may
order various IT application services from the Sprint Entities, including human resources applications, supply chain
and finance applications, device management services, data warehouse services, credit/address check, IT help desk
services, repair services applications, customer trouble management, coverage map applications, network oper-
ations support applications, and other services. The specific services requested by us will be identified in Statements
of Work to be completed by the Sprint Entities and us. The Sprint Entities will provide service levels consistent with
the service levels the Sprint Entities provide to their affiliates for the same services. Pricing will be specified in each
separate Statement of Work for each type of service. The term of the IT Master Services Agreement is five years, but
we have the right to extend the term for an additional five years.
4G MVNO Agreement — We entered into a non-exclusive 4G MVNO agreement at the Closing with Comcast
MVNO II, LLC, TWC Wireless, LLC, BHN Spectrum Investments, LLC and Sprint Spectrum L.P., which we refer
to as the 4G MVNO Agreement. We sell wireless broadband services to the other parties to the 4G MVNO
Agreement for the purposes of the purchasers marketing and reselling our wireless broadband services to their
respective end user subscribers. The wireless broadband services to be provided under the 4G MVNO Agreement
include standard network services, and, at the request of any of the parties, certain non-standard network services.
We sell these services at prices defined in the 4G MVNO Agreement. We have been engaged in ongoing
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CLEARWIRE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)