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SATELLITE SERVICE AGREEMENT FOR QUETZSAT-1

Consulting Services Agreement

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ECHOSTAR CORP

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Title: SATELLITE SERVICE AGREEMENT FOR QUETZSAT-1
Date: 3/2/2009

SATELLITE SERVICE AGREEMENT FOR QUETZSAT-1, Parties: echostar corp
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Exhibit 10.32

SATELLITE SERVICE AGREEMENT FOR QUETZSAT-1

      THIS AGREEMENT between SES Latin America S.A. (“SES-LA”) ***, on the one hand, and EchoStar 77 Corporation (“Customer”), on the other hand, is made effective as of 24 November 2008 (the “Effective Date”). Defined terms used in this Agreement have the meanings specified herein. This Agreement constitutes the “New Satellite Agreement” contemplated by the 77° W.L. Agreement.

ARTICLE 1. SERVICE PROVIDED

      1.A. Scope. QuetzSat is the licensee of the BSS frequencies at the 77° W.L. orbital location (the “Orbital Location”). SES-LA and its Affiliates intend to construct and launch a BSS communications satellite designated as the “QuetzSat-1 Satellite” and QuetzSat intends to operate the QuetzSat-1 Satellite in the Orbital Location. In accordance with and subject to the terms and conditions of this Agreement, SES-LA has agreed to provide certain satellite services to Customer and, as stated in Subsection 2.G(8), reserve certain of the capacity of the QuetzSat-1 Satellite in observance of QuetzSat’s obligations set forth in the Concession. In accordance with and subject to the terms and conditions of this Agreement, SES-LA shall provide to Customer, Customer shall pay the applicable MRC for, and Customer (including DISH Network and EchoStar in accordance with their respective Secondary Agreements) shall be entitled to utilize solely for the Intended Purpose, the Service.

     The Service shall be provided in accordance with and subject to the terms and conditions set forth in this agreement, including Attachments A — G (as listed below), which are hereby incorporated by reference in their entirety (collectively, the “Agreement”). In the event of any conflict or inconsistency between the terms and conditions set forth in the body of this Agreement and the terms and conditions set forth in any Attachment hereto, then the terms and conditions set forth in the body of this Agreement shall control.

     Attachment A — ***

     Attachment B — ***

     Attachment C — ***

     Attachment D — ***

     Attachment E — ***

     Attachment F — Concession

     Attachment G — ***

1.B. Terms Related to Construction Contract, Launch Service Agreement, and Insurance.

      1.B(1) [Reserved]

      1.B(2) SES-LA shall (a) enter into a contract (the “Construction Contract”) with Vendor for the construction of the QuetzSat-1 Satellite, (b) enter into a Launch Service Agreement for the launch of the QuetzSat-1 Satellite, and (c) negotiate insurance contracts with insurers for the launch and for the first year (or such period as is then commercially available) of in-orbit operation for the QuetzSat-1 Satellite.

      1.B(3) SES-LA, Customer, DISH Network and EchoStar shall collaborate in good faith toward reaching agreements on the Technical Performance Specifications and other requirements for, and toward the successful construction, insurance and launch of, the QuetzSat-1 Satellite, *** The proposed *** are described in Attachment E. Upon reaching agreement on the Technical Performance Specifications for the QuetzSat-1 Satellite in accordance with this Subsection 1.B(3), SES-LA and Customer shall mutually agree upon the necessary modifications, if any, to (x) Attachment B ***, and

 

***

 

Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

 


 

(y) Attachment D *** in each case to reflect the terms of such Technical Performance Specifications.

     Subject to the parties’ respective rights and obligations set forth in the immediately preceding paragraph, the parties shall use commercially reasonable efforts to cause the execution of the Construction Contract as soon as reasonably practicable and complete the Technical Performance Specifications as soon as reasonably practicable, in each case in accordance with the steps outlined in this paragraph and the immediately following paragraph. Upon completion, *** attached hereto as Attachment A, and shall be deemed to be incorporated herein by reference in their entirety. ***

      1.B(4) ***

      1.B(5) Subject to any applicable ITAR and EAR restrictions and Vendor’s standard security procedure requirements, Customer, DISH Network and EchoStar shall be permitted to participate in and be present at: ***. Participation by Customer, DISH Network and EchoStar as contemplated herein shall include attendance by their employees and U.S. citizen representatives at such events and meetings, consultation with Customer, DISH Network and EchoStar on engineering decisions that affect the Satellite’s performance (including the ability to meet the applicable Technical Performance Specifications) and the review of relevant reports and test results. When available, SES-LA shall distribute un-redacted versions of all design review documents to Customer, DISH Network and EchoStar. SES-LA shall also instruct Vendor to make available to Customer, DISH Network and EchoStar and their U.S. citizen representatives access to un-redacted versions of all technical documents under the Construction Contract, including without limitation the spacecraft performance specification. With reasonable prior notice, Customer, DISH Network and EchoStar shall be permitted, ***, to view program hardware in progress in accordance with Vendor’s access policies and procedures. Subject to any confidentiality restrictions set forth in the Construction Contract, Customer, DISH Network and EchoStar and their U.S. citizen representatives shall be provided access, ***, to all work, *** provided that such access does not unreasonably interfere with such work or any other work. Customer, DISH Network and EchoStar and their U.S. citizen representatives shall be provided access, ***, to work being performed pursuant to the Construction Contract in Vendor’s subcontractors’ facilities to the extent Vendor obtains such access, subject to the right of Vendor and SES-LA (or its designee) to accompany Customer, DISH Network and EchoStar and their U.S. citizen representatives on any such visit and subject further to the execution by Customer, DISH Network and EchoStar and their U.S. citizen representatives of non-disclosure or similar agreements as may be required by said subcontractors. ***

      1.B(6) In the event that Customer requests a modification of any Satellite *** in compliance with Subsection 1.B(6) of each of the Secondary Agreements, then SES-LA shall negotiate in good faith with Vendor and in accordance with SES-LA’s obligations under Subsection 3.A(10) to implement such modification. *** SES-LA and Customer agree to negotiate, in advance and in good faith, the necessary changes to this Agreement, if any, reasonably related to such modifications, prior to implementing any such modifications. *** Customer further acknowledges that any such modification may also require additional approvals or authorizations (a) from SCT, COFETEL and/or other Mexican Governmental Entities and/or the ITU, which SES-LA shall use its commercially reasonable efforts to ***, and/or (b) from the FCC and/or other United States Governmental Entities, which Customer shall use its commercially reasonable efforts to cause DISH Network and/or EchoStar, as applicable, to obtain. Upon the request of SES-LA, Customer agrees to provide reasonable support and to use commercially reasonable efforts to cause DISH Network and EchoStar to provide reasonable support, as soon as reasonably practicable, to assist SES-LA in the regulatory process for the approvals and authorizations described in clause (a) of the preceding sentence. Upon the request of Customer, SES-LA agrees to provide reasonable support, as soon as reasonably practicable, to assist Customer, DISH Network and EchoStar in the regulatory process for the approvals and authorizations described in clause (b) of the preceding sentence,

 

***

 

Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

2


 

***. In the event that, notwithstanding such commercially reasonable efforts by SES-LA and/or Customer, as applicable, such reasonable support from SES-LA and/or Customer, as applicable, and such commercially reasonable efforts by Customer to cause DISH Network and EchoStar to provide such reasonable support *** any required additional approvals or authorizations are not obtained, then no modifications to the Satellite shall be made.

      1.B(7) SES-LA agrees to keep Customer promptly apprised of all material third party discussions related to the Launch Service Agreement. *** Subject to any applicable ITAR and EAR restrictions, Customer, DISH Network and EchoStar and their U.S. citizen representatives shall be permitted to participate in reviews of each of LSA Vendor’s milestone events with respect to launch of the Satellite. Customer and Customer’s guests may at Customer’s expense attend the launch of the Satellite.

      1.B(8) SES-LA agrees to keep Customer promptly apprised of all material third party discussions related to insurance. SES-LA shall collaborate with and include Customer, DISH Network and EchoStar in all significant decisions related to insurance, including without limitation the placement of insurance, ***. SES-LA shall use commercially reasonable efforts to include terms in the insurance policies that would include a return of all premiums (or as much of such premiums as possible) in the event of a cancellation of the policies.

      1.B(9) ***

      1.B(10) ***

      1.B(11) Customer acknowledges and agrees that it is SES-LA’s intention to procure commercial launch and in-orbit insurance covering the Net Book Value of the Satellite *** based on an allocation of such Net Book Value to the various payloads on the Satellite, as determined by mutual agreement of SES-LA, Customer, DISH Network and EchoStar subsequent to execution of the Construction Contract (and subject to later modification by mutual agreement of such parties). The terms and conditions of this Agreement shall be equitably adjusted as necessary to reflect the original or modified allocation ( e.g. , the formula in clause (e) of Subsection 2.H(3), *** Attachment B, and the terms and conditions referencing a Failed Payload may need adjustment). Upon the request of SES-LA, Customer, DISH Network or EchoStar, SES-LA, Customer, DISH Network and EchoStar shall use commercially reasonable efforts to mutually agree upon the original allocation or a modified allocation. ***

      1.B(12) SES-LA shall use commercially reasonable efforts to obtain specific payload-level insurance coverage ( i.e. , in the initial launch coverage and the subsequent in-orbit coverages), consistent with the allocation of Net Book Value determined under Subsection 1.B(11). During such periods of the Service Term in which no such payload-level coverage exists, the references to “Failed Payload” in Subsection 2.A(3), Subsection 2.C(2), Subsection 5.B(1) and Subsection 7.B(1) shall be disregarded. During such periods of the Service Term in which such payload-level coverage exists, the foregoing references shall apply and the terms and conditions of this Agreement shall be equitably adjusted as necessary to reflect the existence of such coverage.

1.C. Service Term. The term for Service (the “Service Term”) on any Satellite *** shall commence on the In-Service Date for that Satellite, and, except as otherwise provided herein, shall expire on the earlier of ***

1.D. Notices. All notices regarding technical or operational matters requiring immediate attention shall be given by telephone to the telephone numbers set forth below for Customer and the telephone number set forth in the User’s Guides for Technical Representative (on behalf of SES-LA) and shall be followed by written notification in accordance with the procedure set forth below. Any other notice required or permitted to be given hereunder shall be in writing and shall be sent by facsimile transmission or by

 

***

 

Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

3


 

overnight courier service, charges prepaid, to the party to be notified, addressed to such party at the address set forth below, or sent by facsimile to the fax number set forth below, or such other address or fax number as such party may have substituted by written notice to the other party. The sending of such notice with confirmation of receipt thereof (in the case of facsimile transmission) or receipt of such notice (in the case of delivery by overnight courier service) shall constitute the giving thereof.

      If to be given to Customer:

          Attn: ***

          cc: ***

      If to be given to SES-LA:

          Attn: ***

           cc: ***

      Customer’s 24-Hour Emergency Telephone # for Technical/Operational Issues:

     ***

1.E. ***

ARTICLE 2. PAYMENTS AND OTHER CONSIDERATIONS/ FUTURE SATELLITES

***

      2.A(2) [Reserved]

     ***

      2.A(5) [Reserved]

      2.A(6) [Reserved]

2.B. Monthly Recurring Charges.

      2.B(1) ***

      2.B(2) [Reserved]

      2.B(3) ***

      2.B(4) ***

      2.B(5) At an appropriate time, and from time to time in the event that Customer exercises its right in Subsection 2.G(10) to locate the Satellite at an Alternate Orbital Location after receipt of, and consistent with, Unanimous Instructions pursuant to Subsection 2.G(10) of each of the Secondary Agreements and as otherwise necessary, SES-LA, Customer, DISH Network and EchoStar shall collaborate in good faith as to the methods by which TT&C will be provided for the QuetzSat-1 Satellite, provided that, *** such methods must meet the minimum requirements of the Concession when the Satellite is located at the Orbital Location. With respect to periods when the QuetzSat-1 Satellite is located

 

***

 

Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

4


 

at the Orbital Location, such collaboration shall include without limitation the following topics: (x) location of TT&C facilities in Mexico in accordance with the terms and conditions of the Concession, and whether to build a facility or contract for services from a third party; and (y) tax considerations, including with respect to permanent establishments. SES-LA agrees to keep Customer, DISH Network and EchoStar promptly apprised of all material third party discussions related to TT&C for the QuetzSat-1 Satellite. SES-LA shall collaborate with and include Customer, DISH Network and EchoStar in all significant decisions related to TT&C for the QuetzSat-1 Satellite, including without limitation the purchase of TT&C equipment and other terrestrial facilities necessary to perform TT&C services, although the parties agree that SES-LA shall make the final decisionswith respect to TT&C for the QuetzSat-1 Satellite (provided that such decisions are consistent with SES-LA’s obligations under this Agreement). ***

      2.B(6) ***

2.C. Monthly Recurring Charges Adjustments/Refunds.

      2.C(1) *** In the event of a Satellite Failure for any reason whatsoever, Customer’s obligation to pay the MRCs due for the period after the Satellite Failure shall automatically terminate as of the date of the Satellite Failure, ***. SES-LA shall refund to Customer any MRCs paid for periods subsequent to the date of a Satellite Failure, including the period between and including the date of the Satellite Failure and the date upon which it is determined that a Satellite Failure has occurred.

      2.C(2) ***

2.D. MRC Calculation and Audit Rights. ***

2.F. Taxes and Other Charges. *** SES-LA represents that, as of the date hereof, it has no actual knowledge of any Taxes (1) which would be or are proposed to be levied on SES-LA or any of its Affiliates by any Governmental Entities, (2) which would apply or are proposed to apply to the Service at the Orbital Location or the facilities used to provide the Service at the Orbital Location to Customer, or ***. The parties shall use their respective commercially reasonable efforts to support each other in (a) the optimization of tax-related strategies, and (b) actions against the establishment of new Taxes that would be payable or reimbursable by Customer pursuant to this Section 2.F ***

2.G. Terms Applicable to the QuetzSat-1 Satellite.

      2.G(1) SES-LA Authorizations . *** SES-LA agrees to use commercially reasonable efforts to maintain the Concession and to pursue, secure, as soon as reasonably practicable, and maintain all other Authorizations necessary for the Service Term from SCT, COFETEL, all other Mexican Governmental Entities and the ITU to (a) locate the QuetzSat-1 Satellite at the Orbital Location, and (b) permit (i) TT&C functions for the Satellite at the Orbital Location to be uplinked from an earth station in Mexico, (ii) DISH Network and its Affiliates to uplink video, data and audio services from the United States to, and downlink video, data and audio services into the United States, Mexico and Central America from, the DISH Payload using the 77º W.L. Frequencies utilized by the DISH Payload at the Orbital Location, (iii) EchoStar and its Affiliates to uplink video, data and audio services from the United States to, and downlink video, data and audio services into the United States, Mexico and Central America from, the EchoStar Payload using the 77º W.L. Frequencies utilized by the EchoStar Payload at the Orbital Location, (iv) DISH Network and its Affiliates to use the QuetzSat-1 Satellite at the Orbital Location consistent with the Technical Performance Specifications and for the Intended Purpose, and (v) EchoStar and its Affiliates to use the QuetzSat-1 Satellite at the Orbital Location consistent with the Technical Performance Specifications and for the Intended Purpose, with the exception of the separate concession that is required to provide direct-to-home

 

***

 

Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

5


 

service into Mexico from the QuetzSat-1 Satellite and any additional authorizations specifically relating thereto (collectively, the “77° W.L. License”). (The parties acknowledge and agree that *** (y) the reference in the foregoing clauses (iv) and (v) to the Intended Purpose is not intended and shall not be construed to foreclose Customer, DISH Network and EchoStar from use of the QuetzSat-1 Satellite for other authorized purposes.) SES-LA agrees to use commercially reasonable efforts to respond promptly to requests for further information from SCT, COFETEL, other Mexican Governmental Entities and the ITU. *** SES-LA agrees to consult regularly with Customer during the regulatory process for the 77° W.L. License, and shall advise Customer on a timely basis of all material developments concerning such process. SES-LA agrees that if any filing or submission made by SES-LA during the regulatory process for the 77° W.L. License mentions Customer, DISH Network and/or EchoStar, or any of the terms or conditions set forth in this Agreement, then it shall obtain the prior approval of each of those mentioned ( i.e. , from among Customer, DISH Network and/or EchoStar) before filing or submitting material to any Governmental Entities, such approval not to be unreasonably withheld or delayed. Upon the request of SES-LA, Customer agrees to provide reasonable support, and to use commercially reasonable efforts to cause DISH Network and EchoStar to provide reasonable support, in each case as soon as reasonably practicable, to assist SES-LA in the regulatory process for the 77° W.L. License. ***

      2.G(2) Customer Authorizations . Customer agrees to cause DISH Network to use commercially reasonable efforts at the expense of DISH Network to pursue, secure, as soon as reasonably practicable, and maintain all Authorizations necessary for the Service Term from United States Governmental Entities (including without limitation the FCC and Department of State) to permit (a) DISH Network to uplink video, data and audio services from the United States to, and downlink video, data and audio services into the United States, Mexico and Central America from, the DISH Payload using the 77º W.L. Frequencies utilized by the DISH Payload at the Orbital Location, and (b) DISH Network to use the QuetzSat-1 Satellite at the Orbital Location consistent with the Technical Performance Specifications and for the Intended Purpose, including without limitation all necessary blanket authorizations of earth stations (with respect to the number of earth stations reasonably deemed necessary by Customer from time to time) seeking to receive direct-to-home transmissions in the United States from the QuetzSat-1 Satellite at the Orbital Location (collectively, the “DISH FCC Approvals”). Customer further agrees to cause EchoStar to use commercially reasonable efforts at the expense of EchoStar to pursue, secure, as soon as reasonably practicable, and maintain all Authorizations necessary for the Service Term from United States Governmental Entities (including without limitation the FCC and Department of State) to permit (aa) EchoStar to uplink video, data and audio services from the United States to, and downlink video, data and audio services into the United States, Mexico and Central America from, the EchoStar Payload using the 77º W.L. Frequencies utilized by the EchoStar Payload at the Orbital Location, and (bb) EchoStar to use the QuetzSat-1 Satellite at the Orbital Location consistent with the Technical Performance Specifications and for the Intended Purpose (collectively, the “EchoStar FCC Approvals”). (The parties acknowledge and agree that the references in the foregoing clauses (b) and (bb) to the Intended Purpose are not intended and shall not be construed to foreclose Customer, DISH Network and EchoStar from use of the QuetzSat-1 Satellite for other authorized purposes.) ***

 

***

 

Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

6


 

*** In connection with the foregoing and in consultation with SES-LA, Customer agrees to use commercially reasonable efforts to cause DISH Network to file all documents and take all actions reasonably necessary to obtain the DISH FCC Approvals as soon as reasonably practicable and EchoStar to file all documents and take all actions reasonably necessary to obtain the EchoStar FCC Approvals as soon as reasonably practicable. Customer agrees to use commercially reasonable efforts to cause DISH Network and EchoStar to respond promptly to requests for further information from United States Governmental Entities. Customer agrees to cause DISH Network to consult regularly with SES-LA during the regulatory process for the DISH FCC Approvals and EchoStar to consult regularly with SES-LA during the regulatory process for the EchoStar FCC Approvals, and shall advise SES-LA on a timely basis of all material developments concerning such process. Customer agrees that if any filing or submission made by DISH Network or EchoStar during the regulatory process for the FCC Approvals mentions SES-LA or any of the terms or conditions set forth in this Agreement, then it shall obtain the prior approval of SES-LA before filing or submitting material to any Governmental Entities, such approval not to be unreasonably withheld or delayed. Upon the request of Customer, SES-LA agrees to provide reasonable support, as soon as reasonably practicable, to assist Customer, DISH Network and EchoStar in the regulatory process for the FCC Approvals, and to use best reasonable efforts to cause the then-current Mexican citizen shareholders in QuetzSat to provide such reasonable support ***

      2.G(3) Concession . Customer and SES-LA acknowledge the terms and conditions for the concession to occupy the Orbital Location, develop its corresponding BSS frequencies, and broadcast and receive signals established and issued by SCT to QuetzSat on 2 February 2005 (the “Concession”)(a copy of which is appended to this Agreement as Attachment F).

      2.G(4) Coordination .

           2.G(4)(a) ***

           2.G(4)(b) ***

           2.G(4)(c) ***

      2.G(5) [Reserved]

      2.G(6) ***

      2.G(7) [Reserved]

      2.G(8) Capacity Obligation . The parties acknowledge QuetzSat’s obligation (the “Capacity Obligation”) *** Customer shall be responsible for meeting all requirements related to the Capacity

 

***

 

Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act.

7


 

Obligation, including any requirements resulting from the failure of capacity provided on the QuetzSat-1 Satellite or failure of the Alternate Capacity in the manner described in Subsection 2.G(8) of each of the Secondary Agreements. Upon the request of Customer, SES-LA agrees to provide reasonable support, as soon as reasonably practicable, to assist Customer in meeting all requirements related to the Capacity Obligation, and to use best reasonable efforts to cause the then-current Mexican citizen shareholders in QuetzSat to provide such reasonable support ***

      2.G(9) ***

      2.G(10) ***

      2.G(11) ***

      2.G(12) ***

      2.H(1)(b) [Reserved]

     ***

      2.H(2)(b) [Reserved]

      2.H(2)(c) ***

      2.H(3)(e) ***

ARTICLE 3. REPRESENTATIONS, WARRANTIES AND COVENANTS

3.A. SES-LA’s Representations, Warranties and Covenants. SES-LA hereby represents, warrants and covenants to Cus


 
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