Sprint - Nextel 2014 Annual Report Download - page 191

Table of Contents
Index to Consolidated Financial Statements
CLEARWIRE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS —(CONTINUED)
F-108
Sprint. On July 9, 2013, Sprint completed the acquisition of Clearwire Corporation and its subsidiaries. See Note 1,
Description of Business
See Note 16, Subsequent Events.
Note Purchase Agreement — In connection with the Merger Agreement, on December 17, 2012, we and
certain of our subsidiaries also entered into the Note Purchase Agreement, in which Sprint agreed to purchase from
us at our election up to an aggregate principal amount of $800 million of 1.00% exchangeable notes due 2018, in ten
monthly installments of $80.0 million each. We elected to forego the first two draws (January 2013 and February
2013) under the Note Purchase Agreement which reduced the aggregate principal amount available to $640 million.
We elected to take the March, April and May draws and received $240.0 million from Sprint. In addition, we elected
to forego the June draw. See Note 9, Long-term Debt, Net, for further information.
Rollover Notes — In connection with the issuance of the 2015 Senior Secured Notes, on November 24, 2009,
we issued notes to Sprint and Comcast with identical terms as the 2015 Senior Secured Notes. From time to time,
other related parties may hold portions of our long-term debts, and as debtholders, would be entitled to receive
interest payments from us.
Relationships among Certain Stockholders, Directors, and Officers of Clearwire — Prior to the completion
of the Sprint Acquisition, Sprint, through two wholly-owned subsidiaries, Sprint HoldCo and SN UHC 1, Inc., owns
the largest interest in Clearwire with an effective voting and economic interest of approximately 50.1%. After the
conversion of their Class B Common Interests and corresponding number of Class B Common Stock into Class A
Common Stock, Comcast, Intel and Bright House together own voting interest in Clearwire of approximately 13.0%
at July 9, 2013, prior to consummation of the merger with Sprint.
Clearwire, Sprint, Intel, Comcast and Bright House are party to the Equityholders’ Agreement, which sets
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.
4G MVNO Agreement — We have a non-exclusive 4G MVNO agreement, which we refer to as the 4G
MVNO Agreement, with Comcast MVNO II, LLC, TWC Wireless, LLC, Bright House and Sprint Spectrum
L.P.,which we refer to as Sprint Spectrum. 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.
Sprint Wholesale Relationship
Under the November 2011 4G MVNO Amendment, Sprint is paying us a fixed amount for unlimited 4G
mobile WiMAX services for resale to its retail subscribers in 2013, a portion of which will be paid as an offset to
principal and interest due under a $150.0 million promissory note issued by us to Sprint on January 3, 2012, which
we refer to as the Sprint Promissory Note. The Sprint Promissory Note has an aggregate principal amount of $150.0
million and bears interest of 11.5% per annum. On January 2, 2013, we offset $83.6 million of principal and related
accrued interest to reduce the principal amount we owe to Sprint under the promissory note to $75.0 million
maturing on January 2, 2014. If not previously paid, Sprint may offset the amounts payable by us under the Sprint
Promissory Note, including interest, against payments then due by Sprint to Clearwire Communications under the
4G MVNO Agreement, as amended. Because the Sprint Promissory Note was entered into in conjunction with the
November 2011 4G MVNO Amendment, and amounts due may be offset against payments due under the November
2011 4G MVNO Amendment, it is treated as deferred revenue for accounting purposes, and associated interest costs
are being recorded as a reduction to the payable by Sprint for unlimited WiMAX service in calendar year 2013.