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                                                                   Exhibit 10.16
    


                            Exchange Agency Agreement

   
November 24, 1998
    

State Street Bank and Trust Company
   of Missouri, N.A.
Corporate Trust Department
211 North Broadway, Suite 3900
St. Louis, MO 63102

Ladies and Gentlemen:

Golden Sky Systems, Inc., a Delaware Corporation (the "Company") is offering to
exchange (the "Exchange Offer"), upon the terms and subject to the conditions
set forth in the Prospectus dated            (the "Prospectus"), and the
accompanying Letter of Transmittal and instructions thereto (the "Letter of
Transmittal"), its 12 3/8% Senior Subordinated Notes Due 2006 (the "New Notes")
for all of its outstanding Senior Subordinated Notes Due 2006 (the "Old Notes")
of the Company of which $195,000,000 principal amount is outstanding. The New
Notes and the Old Note are together referred to herein as the "Notes".
Capitalized terms used herein but not otherwise defined herein shall have the
meanings ascribed to them in the Prospectus or Letter of Transmittal.

You are hereby appointed and authorized to act as agent (the "Exchange Agent")
to effectuate the exchange of Old Notes for New Notes, on the terms and subject
to the conditions of this agreement (the "Agreement"). In that connection, the
following documents have been delivered to you:

         (i)      Prospectus;

         (ii)     the Letter of Transmittal accompanying the Prospectus, to be
                  used by the holders of Old Notes ("Old Noteholders") in
                  tendering their Old Notes; and

         (iii)    the Notice of Guaranteed Delivery to be used by Old
                  Noteholders whose Old Notes are not immediately available or
                  who cannot deliver their Old Notes, the Letter of Transmittal
                  or any other required documents to you prior to the expiration
                  of the Exchange Offer.

The Exchange Offer will expire at the time and on the date specified in the
Prospectus (the "Expiration Date") unless the Exchange Offer is extended by the
Company, in which case the term "Expiration Date" shall mean the latest date to
which the Exchange Offer is extended.

You are hereby requested, and you hereby agree, to act as follows:

1.       You are to accept Old Notes which are accompanied by the appropriate
         Letter of Transmittal or facsimile thereof, properly completed and duly
         executed in accordance with 


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         the instructions thereon and any requisite collateral documents (or, in
         the case of Old Notes tendered by book-entry transfer, an Agent's
         Message in lieu of the Letter of Transmittal, and all other instruments
         and communications submitted to you in connection with the Exchange
         Offer and to hold the same upon the terms and conditions set forth in
         this Agreement.

2.       You are to examine the Letters of Transmittal, or Agent's Message in
         lieu thereof, Old Notes and other documents delivered or mailed to you
         by or for Old Noteholders to ascertain whether (i) the Letters of
         Transmittal are properly completed and duly executed in accordance with
         the instructions set forth therein, (ii) the other documents are
         properly completed and duly executed, and (iii) the Old Notes have
         otherwise been properly tendered. You need not pass on the legal
         sufficiency of any signature or verify any signature guarantee.

3.       In the event any Letter of Transmittal or other document has been
         improperly executed or completed or any of the certificates are not in
         proper form or have been improperly tendered or any book-entry delivery
         of Old Notes has been improperly made, or if some other irregularity in
         connection with the delivery of Old Notes by a holder thereof exists,
         you are authorized, upon consultation with the Company or one of its
         representatives, to request from any person tendering Old Notes such
         additional documents or undertakings as you may deem appropriate. All
         questions as to the form of all documents and the validity, eligibility
         (including time of receipt) and acceptance of tendered Old Notes will
         be determined by the Company, in its sole discretion, whose
         determination will be final and binding. The Company reserves the
         absolute right to reject any or all tenders of any particular Old
         Notes, which would, in the opinion of the Company's counsel, be
         unlawful. The Company also reserves the absolute right to waive any of
         the conditions of the Exchange Offer or any defect or irregularity in
         the tender of any Old Notes, and the Company's interpretation of the
         terms and conditions of the Exchange Offer (including the Letter of
         Transmittal and the instructions set forth therein) will be final. No
         tender of Old Notes will be deemed to have been properly made until all
         defects and irregularities have been cured or waived.

4.       Tenders of Old Notes may be made only as set forth in the Prospectus
         and Letter of Transmittal, and Old Notes shall be considered properly
         tendered to you only when:


         (a)      a properly completed and duly executed Letter of Transmittal,
                  with any required signature guarantee and any other required
                  documents as set forth in the Letter of Transmittal, is
                  received by you at your address set forth in the Prospectus
                  and Letter of Transmittal, and Old Notes are received by you
                  at such addresses or a timely confirmation of a book-entry
                  transfer of such Old Notes, along with an Agent's Message is
                  received by you at or prior to the Expiration Date at your
                  address set forth in the Prospectus and Letter of Transmittal;
                  or a properly completed and duly executed Notice of Guaranteed
                  Delivery substantially in the form provided by the Company,
                  with an appropriate guarantee of signature and delivery from
                  an Eligible Institution, is received by you at or prior to the
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                  Expiration Date and Old Notes (in respect of which there have
                  been delivered to you prior to the Expiration Date a properly
                  completed and duly executed Notice of Guaranteed Delivery) in
                  proper form for transfer together with a properly completed
                  and duly executed Letter of Transmittal (or facsimile thereof)
                  or Agent's Message, and any other required documents as set
                  forth in the Letter of Transmittal, are received by you within
                  five New York Stock Exchange trading days, and

         (b)      the adequacy of the items relating to Old Notes, the Letter of
                  Transmittal therefor and any Notice of Guaranteed Delivery has
                  been favorably passed upon as above provided.

Notwithstanding the provisions of the preceding paragraph, Old Notes which the
Company shall approve as having been properly tendered shall be considered to be
properly tendered.

5.       Holders of Old Notes may make book-entry delivery of their securities.
         You will establish in your name or the name of your nominee an account
         with respect to the Old Notes at Depository Trust Company ("DTC") for
         purpose of the Exchange Offer to permit book-entry transfers. Except as
         otherwise provided below, Old Notes, or any book-entry transfer into
         your account at DTC of Old Notes tendered electronically, as well as a
         properly completed and duly executed copy of the Letter of Transmittal
         or Agent's Message, and any other documents required by the Letter of
         Transmittal, must be received by you or, in the case of tenders of
         book-entry, confirmed to you by transfer to your account on or prior to
         the Expiration Date.

6.       a.       A tendering Old Noteholder may withdraw tendered Old Notes in
                  accordance with the procedures set forth in the Prospectus and
                  Letter of Transmittal, in which event, except as may be
                  otherwise specified in the Old Noteholder's notice of
                  withdrawal, all items in your possession which shall have been
                  received from the Old Noteholder with respect to those Old
                  Notes shall be promptly returned to or upon the order of the
                  Old Noteholder and the Old Notes covered by those items shall
                  no longer be considered to be properly tendered.

         b.       A withdrawal may not be rescinded. Withdrawn Old Notes may,
                  however, be tendered at anytime on or prior to the Expiration
                  Date.

7.       You are to record and to hold all tenders received by you and to
         promptly notify by telephone or facsimile, after the close of business
         on each business day, the following person as to the total number of
         Old Notes tendered on such day and the cumulative numbers with respect
         to the Old Notes received through the time of such call or facsimile:

         Executive Vice President, Treasurer and Chief Financial Officer of the
         Company.

         Each daily report should identify: the number and principal amount of
         Old Notes represented by (i) certificates, and (ii) Notices of
         Guaranteed Delivery actually received by 


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         you through the time of the report. In addition, you will also provide,
         and cooperate in making available to the Company or the Company's
         counsel such other information as the Company or the Company's counsel
         may reasonably request upon oral request made from time to time. Your
         cooperation shall include, without limitation, the granting by you to
         the Company, and such other persons as it may reasonably request, of
         access to those persons on your staff who are responsible for receiving
         tenders of Old Notes in order to insure that immediately prior to the
         Expiration Date, the Company shall have received information in
         sufficient detail to enable it to decide whether to extend the Exchange
         Offer.

8.       Letters of Transmittal, Notices of Guaranteed Delivery and telegrams,
         facsimile transmissions and letters submitted in lieu thereof pursuant
         to the Exchange Offer shall be stamped by you as to the date and time
         of receipt and shall be retained in your possession until the
         Expiration Date. As promptly as practicable after the Expiration Date,
         you will deliver those items, together with all properly tendered Old
         Notes to the Company.

9.       You are to follow up and to act upon any amendments, modifications or
         supplements to these instructions mutually satisfactory to you, ind the
         Company, and upon any further information in connection with the terms
         of the Exchange Offer, any of which may be given to you by the Company,
         including instructions with respect to (i) any extension or other
         modification of the Exchange Offer, (ii) the amount or manner of
         payment for any Old Notes exchanged, and (iii) the cancellation of the
         Exchange Offer.

10.      If under the conditions set forth in the Prospectus and Letter of
         Transmittal, the Company becomes obligated to accept Old Notes
         tendered, it will, as promptly as practicable thereafter, deposit with
         you certificates representing New Notes in the amount determined
         according to the ratio prescribed in the Prospectus and Letter of
         Transmittal. Unless otherwise indicated under any Special Issuance
         Instructions or any Special Delivery Instructions set forth in any
         Letter of Transmittal, you shall in mail the certificates representing
         the New Notes and the certificates for any Old Notes submitted but not
         tendered for exchange to the registered owner of the securities at the
         address shown in the Letter of Transmittal. In the event that either or
         both of the Special Issuance Instructions or any Special Delivery
         Instructions are completed, you shall mail all certificates
         representing New Notes (or Old Notes to be returned, if any) to the
         person or persons so indicated in the Letter of Transmittal.
         Certificates shall be post-marked by you within a reasonable period of
         time after certificates have been provided to you.

11.      No exchange shall be made as to any Old Notes unless and until such Old
         Notes have been properly tendered as provided in Section 4 of this
         Agreement.

12.      For performing your services hereunder, you shall be entitled to
         receive from the Company a fee of $3,000.00. You shall also be
         reimbursed by the Company for all reasonable expenses, including
         counsel fees, if any, and mailing costs you may incur in connection
         with the performance of your duties.


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13.      As Exchange Agent hereunder you:

         (a)      shall not have duties or obligations other than those
                  specifically set forth or as may subsequently be agreed to by
                  you and the Company;

         (b)      shall not be obligated to take any legal action hereunder
                  which might in your judgment involve any expense or liability
                  unless you have been furnished with reasonable
                  indemnification;

         (c)      may rely on and shall be protected in acting upon any
                  certificate, instrument, opinion, notice, letter, telegram or
                  other document or security delivered to you and believed by
                  you to be genuine and to have been signed by the proper party
                  or parties.

         (d)      may rely on and shall be protected in acting or refraining
                  from acting up n the written instructions of the Company;

         (e)      may consult counsel satisfactory to you (including counsel to
                  the Company), and the opinion of such counsel shall be full
                  and complete authorization and protection with respect to any
                  act on taken. suffered, or omitted by you hereunder in good
                  faith and in accordance with the opinion of such counsel; and

         (f)      you shall not be deemed to have notice of any fact, claim or
                  demand with respect hereto unless actually known by an officer
                  charged with responsibility for administering this Agreement
                  or unless in writing received by you and making specific
                  reference to this Agreement.

14.      You undertake the duties and obligations imposed herein upon the
         following additional terms and conditions:

         (a)      you shall perform your duties and obligations hereunder with
                  due care;

         (b)      you shall not be under any responsibility in respect of the
                  validity or sufficiency (not only as to genuineness, but also
                  as to its due execution, the genuineness or signatures
                  appearing thereon and as to the trust and accuracy of any
                  information therein contained) of and Letter of Transmittal,
                  certificate representing Old Notes, book-entry transfer of Old
                  Notes or Notice of Guaranteed Delivery; and

         (c)      neither you nor any of your directors, officers or employees
                  shall be liable to anyone for any error of judgment, or for
                  any act done or step taken or omitted to be taken by you or
                  any of your directors, officers or employees, of for any
                  mistake of fact or law, or for anything which you or any of
                  your directors, officers or employees, may do or refrain from
                  doing in connection with or in the administration of the
                  Agreement, unless and except to the extent the same
                  constitutes gross negligence or willful misconduct on your
                  part.


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15.      You are not authorized to make any recommendation on behalf of the
         Company as to whether a holder of Old Notes should or should not tender
         his, her or its Old Notes.

16.      All certificates representing New Notes shall be forwarded by (i)
         first-class mail under a blanket surety bond protecting you and the
         Company from loss or liability arising out of the non-receipt or
         non-delivery of such certificates or (ii) registered mail, insured
         separately for the replacement value of such certificates.

17.      You are authorized to cooperate with and furnish information to any
         organization (and its representatives) designated from time to time by
         the Company, in any manner reasonably requested by any of them and
         acceptable to you in connection with the Exchange Offer.

18.      The Company covenants and agrees to reimburse, indemnify and hold you
         harmless against any costs, expenses (including reasonable expenses of
         your legal counsel), losses or damages which, without negligence.
         misconduct or bad faith on your part may be paid, incurred or suffered
         by you or to which you may become subject by reason of or as a result
         of the administration of your duties hereunder or by reason of or as
         result of Your compliance with the instructions set forth herein or
         with any written or oral instructions delivered to you pursuant hereto,
         including any claims against you by any Old Noteholder. The Company
         shall be entitled to participate at its own expense in the defense, and
         if the Company so elects at any time after receipt of such notice, the
         Company shall assume the defense of any suit brought to enforce any
         such claim. In the event that the Company assumes the defense of any
         such suit, the Company shall not be liable for the fees and expenses of
         any additional counsel thereafter retained by you, unless in your
         judgment, which must be reasonable, it is advisable for you to be
         represented by separate counsel. In no case shall the Company be liable
         under this indemnity with respect to any claim or action against you,
         unless the Company shall be notified by you, by letter or by cable or
         by telecopy confirmed by letter, of the written assertion of a claim
         against you or of any action commenced against you, promptly after you
         shall have received any such written assertion of a claim or shall have
         been served with a summons or other first legal process giving
         information as to the nature and basis of an action, but failure so to
         notify the Company shall not relieve the Company from any liability
         which it may have otherwise than on account of this indemnity.

19.      You hereby acknowledge receipt of each of the documents listed in items
         (i) through (iii) of the introduction to this Agreement and further
         acknowledge that you have examined the same. Any inconsistency between
         this Agreement on the one hand and the documents listed in items (i)
         through (iii) of the introduction of this Agreement, as they may from
         time to time be amended, on the other, shall be resolved in favor of
         the latter, except with respect to the duties, liabilities and
         indemnification of you as Exchange Agent.

20.      All notices statements and other communications hereunder shall be in
         writing, signed by a duly authorized officer of the party sending such
         notices, and shall be deemed given when delivered by hand or certified
         mail, postage prepaid, addressed as follows:


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                  To the Company:
                                    Golden Sky Systems, Inc.
                                    605 West 47th Street, Suite 300
                                    Kansai City, MO 64112

                  Attention:        Randall Duncan

                  Facsimile:        816/753-5044
                  Telephone:        816/753-5544

                  To the Exchange Agent:
                                    State Street Bank and Trust Company
                                    Corporate Trust Department
                                    211 North Broadway, Suite 3900
                                    St. Louis, MO 63102

                  Attention:        Robert A. Clasquin

                  Facsimile:        314/206-3016
                  Telephone:        314/206-3054

         or to such other address as either party may furnish hereunder by
         notice; provided that notice of change of address shall be deemed given
         only when received.

21.      This Agreement shall be construed and enforced in accordance with the
         law of the State of Missouri applicable to agreements made and to be
         performed in the State of Missouri and shall inure to the benefit of,
         and the obligations created hereby shall be binding upon, the
         successors and assigns of the parties hereto.

22.      These instructions may be reasonably modified or supplemented by the
         Company of by any officer thereof authorized to give notice, approval
         or waiver on its behalf.

23.      As used herein, "business day" shall mean any day other than a Saturday
         or Sunday, or any other day on which you are authorized or required to
         be closed for business.



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Please acknowledge receipt of this letter and confirm the arrangements herein
provided by signing and returning the enclosed copy.

Very truly yours,

GOLDEN SKY SYSTEMS, INC.


   
By: /s/ RODNEY A. WEARY
   -----------------------
Name:   Rodney A. Weary
Title:  Chief Executive Officer


ACCEPTED AS OF NOVEMBER 24, 1998
    

STATE STREET BANK AND TRUST COMPANY
  OF MISSOURI, N.A.
As Exchange Agent


   
By: /s/ ROBERT A. CLASQUIN
   -----------------------
Name:   Robert A. Clasquin
Title:  Assistant Vice President