Dish Network 2013 Annual Report Download - page 181

DISH NETWORK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
F-71
In connection with the 103 Spectrum Development Agreement, during May 2012, EchoStar also entered into a ten-
year service agreement with Ciel pursuant to which EchoStar leases certain satellite capacity from Ciel on the SES-3
satellite at the 103 degree orbital location (the “103 Service Agreement”). During June 2013, we and EchoStar
entered into an agreement pursuant to which we lease certain satellite capacity from EchoStar on the SES-3 satellite
(the “DISH 103 Service Agreement”). Under the terms of the DISH 103 Service Agreement, we make certain
monthly payments to EchoStar through the service term. Unless earlier terminated under the terms and conditions
of the DISH 103 Service Agreement, the initial service term will expire on the earlier of: (i) the date the SES-3
satellite fails; (ii) the date the transponder(s) on which service was being provided under the agreement fails; or (iii)
ten years following the actual service commencement date. Upon in-orbit failure or end of life of the SES-3
satellite, and in certain other circumstances, we have certain rights to receive service from EchoStar on a
replacement satellite. There can be no assurance that we will exercise our option to receive service on a
replacement satellite.
TT&C Agreement. In connection with the Spin-off, we entered into a telemetry, tracking and control (“TT&C”)
agreement pursuant to which we received TT&C services from EchoStar for a period ending on January 1, 2012
(the “Prior TT&C Agreement”). The fees for services provided under the Prior TT&C Agreement were calculated
at cost plus a fixed margin. We were able to terminate the Prior TT&C Agreement for any reason upon 60 days
notice.
Effective January 1, 2012, we entered into a new TT&C agreement pursuant to which we receive TT&C services
from EchoStar for a period ending on December 31, 2016 (the “2012 TT&C Agreement”). The material terms of
the 2012 TT&C Agreement are substantially the same as the material terms of the Prior TT&C Agreement, except
that the fees for services provided under the 2012 TT&C Agreement are calculated at either: (i) a fixed fee; or (ii)
cost plus a fixed margin, which will vary depending on the nature of the services provided. We are able to
terminate the 2012 TT&C Agreement for any reason upon 60 days notice.
As part of the Satellite and Tracking Stock Transaction, on February 20, 2014, we amended the 2012 TT&C
Agreement to cease the provision of TT&C services from EchoStar for the EchoStar I, EchoStar VII, EchoStar X,
EchoStar XI and EchoStar XIV satellites.
DBSD North America Agreement. On March 9, 2012, we completed the DBSD Transaction. During the second
quarter 2011, EchoStar acquired Hughes. Prior to our acquisition of DBSD North America and EchoStar’s
acquisition of Hughes, DBSD North America and HNS entered into an agreement pursuant to which HNS provides,
among other things, hosting, operations and maintenance services for DBSD North America’s satellite gateway and
associated ground infrastructure. This agreement renewed for a one-year period ending on February 15, 2015, and
renews for two successive one-year periods unless terminated by DBSD North America upon at least 30 days notice
prior to the expiration of any renewal term.
TerreStar Agreement. On March 9, 2012, we completed the TerreStar Transaction. Prior to our acquisition of
substantially all the assets of TerreStar and EchoStar’s acquisition of Hughes, TerreStar and HNS entered into
various agreements pursuant to which HNS provides, among other things, hosting, operations and maintenance
services for TerreStar’s satellite gateway and associated ground infrastructure. These agreements generally may be
terminated by us at any time for convenience.
“General and administrative expenses – EchoStar”
Product Support Agreement. In connection with the Spin-off, we entered into a product support agreement pursuant
to which we have the right, but not the obligation, to receive product support from EchoStar (including certain
engineering and technical support services) for all set-top boxes and related accessories that EchoStar has
previously sold and in the future may sell to us. The fees for the services provided under the product support
agreement are calculated at cost plus a fixed margin, which varies depending on the nature of the services provided.
The term of the product support agreement is the economic life of such receivers and related accessories, unless
terminated earlier. We may terminate the product support agreement for any reason upon at least 60 days notice. In
the event of an early termination of this agreement, we are entitled to a refund of any unearned fees paid to EchoStar
for the services.