Clearwire 2009 Annual Report Download - page 44

Our su
b
stantia
l
in
d
e
b
te
d
ness cou
ld
a
d
verse
ly
a
ff
ect our
f
inancia
lfl
exi
b
i
l
it
y
an
dp
revent us
f
rom
f
u
lf
i
ll
in
g
o
ur obligations under the Senior Secured Notes
.
We have, and will continue to have, a significant amount of indebtedness. As of December 31, 2009, we have
approximately
$
2.71 billion of outstanding indebtedness. Our substantial level of indebtedness increases the risk
th
at we ma
yb
e una
bl
eto
g
enerate cas
h
su
ffi
c
i
ent to pa
y
amounts
d
ue
i
n respect o
f
our
i
n
d
e
b
te
d
ness. Our su
b
stant
i
a
l
i
ndebtedness could have other important consequences and si
g
nificant effects on our business
.
For exam
p
le, it could
:
•ma
k
e
i
t more
diffi
cu
l
t
f
or us to sat
i
s
f
y our o
bli
gat
i
ons w
i
t
h
respect to t
h
e Sen
i
or Secure
d
Notes an
d
t
he
R
ollover Notes;
• increase our vulnerabilit
y
to adverse chan
g
es in
g
eneral economic, industr
y
and competitive conditions
;
• requ
i
re us to
d
e
di
cate a su
b
stant
i
a
l
port
i
on o
f
our cas
hfl
ow
f
rom operat
i
ons to ma
k
e payments on ou
r
i
ndebtedness, thereb
y
reducin
g
the availabilit
y
of our cash flow to fund workin
g
capital, capital expenditures
and other
g
eneral corporate purposes;
• limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;
• restr
i
ct us
f
rom ta
ki
ng a
d
vantage o
f
opportun
i
t
i
es to grow our
b
us
i
ness;
•ma
k
e
i
t more
diffi
cu
l
t to sat
i
s
fy
our
fi
nanc
i
a
l
o
blig
at
i
ons,
i
nc
l
u
di
n
g
pa
y
ments on t
h
e Sen
i
or Secure
d
Notes
;
• place us at a competitive disadvanta
g
e compared to our competitors that have less debt obli
g
ations; an
d
•
li
m
i
t our a
bili
ty to
b
orrow a
ddi
t
i
ona
lf
un
d
s
f
or wor
ki
ng cap
i
ta
l
, cap
i
ta
l
expen
di
tures, acqu
i
s
i
t
i
ons,
d
e
b
t
s
erv
i
ce requ
i
rements, execut
i
on o
f
our
b
us
i
ness strategy or ot
h
er genera
l
corporate purposes on sat
i
s
f
actor
y
terms or at all
.
R
estrictive covenants in t
h
eIn
d
enture governing t
h
e Senior Secure
d
Notes ma
yl
imit our current an
df
uture
op
erations,
p
articu
l
ar
ly
our a
b
i
l
it
y
to res
p
on
d
to c
h
anges in our
b
usiness or to
p
ursue our
b
usiness strategies
.
Th
e
i
n
d
enture govern
i
ng t
h
eSen
i
or Secure
d
Notes, w
hi
c
h
we re
f
er to as t
h
eIn
d
enture, conta
i
ns, an
d
any
f
utur
e
i
ndebtedness of ours ma
y
contain, a number of restrictive covenants that impose si
g
nificant operatin
g
and financia
l
r
estrictions, includin
g
restrictions on our abilit
y
to take actions that we believe ma
y
be in our interest. The Indenture,
among ot
h
er t
hi
ngs,
li
m
i
ts our a
bili
ty to
:
•
i
ncur a
ddi
t
i
ona
li
n
d
e
b
te
d
ness an
dg
uarantee
i
n
d
e
b
te
d
ness;
•pa
y
dividends on or make distributions in respect of capital stock or make certain other restricted pa
y
ment
s
or investments
;
• enter
i
nto a
g
reements t
h
at restr
i
ct
di
str
ib
ut
i
ons
f
rom restr
i
cte
d
su
b
s
idi
ar
i
es;
•se
ll
or ot
h
erw
i
se
di
spose o
f
assets,
i
nc
l
u
di
n
g
cap
i
ta
l
stoc
k
o
f
restr
i
cte
d
su
b
s
idi
ar
i
es;
• enter into transactions with affiliates;
• create or
i
ncur
li
ens
;
• merge, conso
lid
ate or se
ll
su
b
stant
i
a
ll
ya
ll
o
f
our assets
;
• make investments and ac
q
uire assets
;
• make certain payments on indebtedness; and
• issue certain preferred stock or similar equity securities.
A
b
reac
h
o
f
t
h
e covenants or restr
i
ct
i
ons un
d
er t
h
eIn
d
enture cou
ld
resu
l
t
i
na
d
e
f
au
l
tun
d
er t
h
e app
li
ca
ble
i
ndebtedness. Such default ma
y
allow the creditors to accelerate the related debt and ma
y
result in the acceleratio
n
of an
y
other debt to which a cross-acceleration or crossdefault provision applies. In the event our lenders an
d
n
ote
h
o
ld
ers acce
l
erate t
h
e repayment o
f
our
b
orrow
i
ngs, we cannot assure t
h
at we an
d
our su
b
s
idi
ar
i
es wou
ld h
ave
s
ufficient assets to repa
y
such indebtedness
.
O
ur abilit
y
to obtain future financin
g
or to sell assets could be adversel
y
affected because a ver
y
lar
g
ema
j
orit
y
o
f
our assets
h
ave
b
een p
l
e
d
ge
d
as co
ll
atera
lf
or t
h
e
b
ene
fi
to
f
t
h
e
h
o
ld
ers o
f
t
h
e Sen
i
or Secure
d
Notes. In a
ddi
t
i
on
,
3
4