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 F
— Concession
1.B.
Terms Related to Construction Contract, Launch Service
Agreement, and Insurance.
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
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***
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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.
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(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(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,
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***
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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.
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***. 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(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
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***
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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.
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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:
If to be given
to SES-LA:
Customer’s 24-Hour Emergency Telephone # for
Technical/Operational Issues:
ARTICLE 2. PAYMENTS AND OTHER
CONSIDERATIONS/ FUTURE SATELLITES
2.B.
Monthly Recurring Charges.
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
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***
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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.
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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.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.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
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***
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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.
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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.) ***
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***
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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.
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*** 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(8)
Capacity Obligation . The parties acknowledge
QuetzSat’s obligation (the “Capacity Obligation”)
*** Customer shall be responsible for meeting all requirements
related to the Capacity
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***
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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.
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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 ***
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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