Clearwire 2009 Annual Report Download - page 128

Sp
rin
t
— Spr
i
nt ass
i
gne
d
,w
h
ere poss
ibl
e, certa
i
n costs to us
b
ase
d
on our actua
l
use o
f
t
h
es
h
are
d
serv
i
ces,
whi
c
hi
nc
l
u
d
e
d
o
ffi
ce
f
ac
ili
t
i
es an
d
management serv
i
ces,
i
nc
l
u
di
ng treasury serv
i
ces,
h
uman resources, supp
ly
c
hain mana
g
ement and other shared services, up throu
g
h the Closin
g
. Where direct assi
g
nment of costs was no
t
p
oss
ibl
e or pract
i
ca
l
, Spr
i
nt use
di
n
di
rect met
h
o
d
s,
i
nc
l
u
di
ng t
i
me stu
di
es, to est
i
mate t
h
e ass
i
gnment o
fi
ts costs t
o
us, w
hi
c
h
were a
ll
ocate
d
to us t
h
roug
h
a management
f
ee. T
h
ea
ll
ocat
i
ons o
f
t
h
ese costs were re-eva
l
uate
d
p
eriodicall
y
. Sprint char
g
ed us mana
g
ement fees for such services of $171.1 million in the
y
ear ended December 31,
2
008 and
$
115.0 million in the year ended December 31, 2007. Additionally, we have entered into lease agreement
s
wi
t
h
Spr
i
nt
f
or var
i
ous sw
i
tc
hi
n
gf
ac
ili
t
i
es an
d
transm
i
tter an
d
rece
i
ver s
i
tes
f
or w
hi
c
h
we recor
d
e
d
rent expense o
f
$28.2 million, $36.4 million and $2.0 million in the
y
ears ended December 31, 2009, 2008 and 2007, respectivel
y
.
R
elationships among Certain Stockholders, Directors, and Officers of Clearwire —Fo
ll
ow
i
n
g
t
h
e com
-
p
letion of the Transactions and the post-closing adjustments, Sprint, through a wholly-owned subsidiary Sprin
t
Ho
ld
Co LLC, owne
d
t
h
e
l
ar
g
est
i
nterest
i
nC
l
earw
i
re w
i
t
h
an e
ff
ect
i
ve vot
i
n
g
an
d
econom
i
c
i
nterest
i
nC
l
earw
i
re o
f
approximatel
y
56% and the Investors collectivel
y
owned a 29% interest in Clearwire. See Note 3, State
g
ic
Transactions, for discussion re
g
ardin
g
the post-closin
g
ad
j
ustment.
Ea
g
le River is the holder of 3
5
,922,9
5
8 shares of our outstandin
g
Class A Common Stock and 2,612,
5
16 shares
o
f
our C
l
ass B Common Stoc
k
,w
hi
c
h
represents an approx
i
mate 4% owners
hi
p
i
nterest
i
nC
l
earw
i
re. Eag
l
eR
i
ver
Inc., which we refer to as ERI, is the mana
g
er of Ea
g
le River. Each entit
y
is controlled b
y
Crai
g
McCaw, a director
of Clearwire. Mr. McCaw and his affiliates have si
g
nificant investments in other telecommunications businesses
,
s
ome o
f
w
hi
c
h
may compete w
i
t
h
us current
l
yor
i
nt
h
e
f
uture. It
i
s
lik
e
l
y Mr. McCaw an
dhi
sa
ffili
ates w
ill
cont
i
nue
t
o make additional investments in telecommunications businesses.
As of December 31, 2009, Ea
g
le River held warrants entitlin
g
it to purchase
6
13,333 shares of Class A
Common Stock at an exercise price of
$
15.00 per share and warrants to purchase 375,000 shares of Class A
Common Stock at an exercise price of
$
3.00 per share. As of December 31, 2009, the remaining life of the warrants
w
as
3
.
9y
ears.
C
ertain of our officers and directors provide additional services to Ea
g
le River, ERI and their affiliates for
w
hich they are separately compensated by such entities. Any compensation paid to such individuals by Eagle River
,
E
RI an
d
/or t
h
e
i
ra
ffili
ates
f
or t
h
e
i
r serv
i
ces
i
s
i
na
ddi
t
i
on to t
h
e compensat
i
on pa
id by
us
.
Fo
ll
ow
i
n
g
t
h
eC
l
os
i
n
g
,C
l
earw
i
re, Spr
i
nt, Ea
gl
eR
i
ver an
d
t
h
e Investors a
g
ree
d
to enter
i
nto an equ
i
t
yh
o
ld
ers
’
a
g
reement, which set forth certain ri
g
hts and obli
g
ations of the equit
y
holders with respect to
g
overnance of
Clearwire, transfer restrictions on our common stock, rights of first refusal and pre-emptive rights, among other
thi
ngs. In a
ddi
t
i
on, we
h
ave a
l
so entere
di
nto a num
b
er o
f
commerc
i
a
l
agreements w
i
t
h
Spr
i
nt an
d
t
h
e Investors
w
hich are outlined below.
Additionall
y
, the wife of Mr. Salemme, our Executive Vice President, Strate
gy
, Polic
y
and External Affairs is a
G
roup V
i
ce Pres
id
ent at T
i
me Warner Ca
bl
e. S
h
e was not
di
rect
l
y
i
nvo
l
ve
di
n any o
f
our transact
i
ons w
i
t
h
T
i
me
W
arner
C
a
bl
e.
D
avis Wri
gh
t Tremaine LL
P
—
T
h
e
l
aw
fi
rm o
f
Dav
i
sWr
i
g
h
t Trema
i
ne LLP serves as our pr
i
mary outs
id
e
c
ounsel, and handles a variet
y
of corporate, transactional, tax and liti
g
ation matters. Mr. Wolff, our former Chie
f
Execut
i
ve O
ffi
cer,
i
s marr
i
e
d
to a partner at Dav
i
sWr
i
g
h
t Trema
i
ne. As a partner, Mr. Wo
lff
’s spouse
i
s ent
i
t
l
e
d
t
o
sh
are
i
n a port
i
on o
f
t
h
e
fi
rm’s tota
l
pro
fi
ts, a
l
t
h
oug
h
s
h
e
h
as not rece
i
ve
d
any compensat
i
on
di
rect
l
y
f
rom us. For t
h
e
y
ears ended December 31, 2009 and 2008, we paid $4.1 million and $907,000 to Davis Wri
g
ht Tremaine for le
g
a
l
s
ervices. This does not include fees paid by Old Clearwire
.
Master Site Agreement
—
We entered into a master site agreement with Sprint, which we refer to as th
e
Master S
i
te A
g
reement, pursuant to w
hi
c
h
Spr
i
nt an
d
we w
ill
esta
bli
s
h
t
h
e contractua
lf
ramewor
k
an
d
proce
d
ure
s
f
or t
h
e
l
eas
i
n
g
o
f
tower an
d
antenna co
ll
ocat
i
on s
i
tes to eac
h
ot
h
er. Leases
f
or spec
ifi
cs
i
tes w
ill b
ene
g
ot
i
ate
dby
S
print and us on request by the lessee. The leased premises may be used by the lessee for any activity in connectio
n
118
CLEARWIRE CORPORATION AND
S
UB
S
IDIARIE
S
N
OTES TO CONSOLIDATED FINANCIAL STATEMENTS —
(
Continued
)