Sprint - Nextel 2008 Annual Report Download - page 152

CLEARWIRE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Eagle River is the holder of 35,922,958 shares of our outstanding Class A Common Stock and
2,612,516 shares of our Class B Common Stock, which represents an approximate 4% ownership interest in
Clearwire. Eagle River Inc., which we refer to as ERI, is the manager of Eagle River. Each entity is controlled by
Craig McCaw, a director of Clearwire. Mr. McCaw and his affiliates have significant investments in other
telecommunications businesses, some of which may compete with us currently or in the future. It is likely
Mr. McCaw and his affiliates will continue to make additional investments in telecommunications businesses.
As of December 31, 2009, Eagle River held warrants entitling it to purchase 613,333 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 was 3.9 years.
Certain of our officers and directors provide additional services to Eagle River, ERI and their affiliates for
which they are separately compensated by such entities. Any compensation paid to such individuals by Eagle
River, ERI and/or their affiliates for their services is in addition to the compensation paid by us.
Following the Closing, Clearwire, Sprint, Eagle River and the Investors agreed to enter into an
equityholders’ agreement, which set forth certain rights and obligations of the equityholders with respect to
governance of Clearwire, transfer restrictions on our common stock, rights of first refusal and pre-emptive rights,
among other things. In addition, we have also entered into a number of commercial agreements with Sprint and
the Investors which are outlined below.
Additionally, the wife of Mr. Salemme, our Executive Vice President, Strategy, Policy and External Affairs
is a Group Vice President at Time Warner Cable. She was not directly involved in any of our transactions with
Time Warner Cable.
Davis Wright Tremaine LLP — The law firm of Davis Wright Tremaine LLP serves as our primary outside
counsel, and handles a variety of corporate, transactional, tax and litigation matters. Mr. Wolff, our former Chief
Executive Officer, is married to a partner at Davis Wright Tremaine. As a partner, Mr. Wolff’s spouse is entitled
to share in a portion of the firm’s total profits, although she has not received any compensation directly from us.
For the years ended December 31, 2009 and 2008, we paid $4.1 million and $907,000 to Davis Wright Tremaine
for legal services. 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 the
Master Site Agreement, pursuant to which Sprint and we will establish 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 will be 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 basic fee is $600 per month per site. The monthly fee will increase 3% per year. The lessee is also
responsible for the utility costs and for certain additional fees, such as an application fee of $1,000 per site.
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 will establish 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 customers. 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
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