Annex; Pricing Factors for Commercial Space Launch Services Pricing Comparability Factors for Commercial Space Launch Services The Parties agreed to the following factors as being relevant to the comparison or evaluation of commercial space launch services offered in the international market. Such factors can often explain legitimate distinctions in the price offered for the launch of a particular payload by different space launch providers, and are particularly useful in comparing bids from market economy providers to those from economy-in-transition providers of commercial space launch services. Comparability Factor Description Intended Orbit Based on delivery orbit for launch provider Risk Management Addresses potential differences in different forms of risk management Additional Costs   Integration Costs Addresses different types of payload/vehicle integration costs Launch Support Involves extra transportation expenses Required Vehicle Lift Capability Ensures comparison of vehicle classes providing similar performance Payment Conditions/Terms Relates to various payment and financial conditions or incentives that may be offered as part of a launch services bid (governed by the provisions of any relevant trade agreements and OECD guidelines) Lifetime Addresses impacts of different satellite lifetimes (on orbit) resulting from the launch services (this is not always a factor-the impact varies depending on case in question) Form of Compensation Relates to the net present value of information services Washington, February 21, 1996 Dear Mr. President: I have the honor to confirm receipt of your letter of which reads as follows: I have the honor to confirm that the following understanding was reached by our Governments pursuant to the Agreement between the Government of Ukraine and the Government of the United States of America Regarding International Trade in Commercial Space Launch Services (hereinafter "Agreement"). The provisions of this Agreement cover the space launch vehicles "Tsyklon" and "Zenit" that were developed and are being produced by the Ukrainian enterprises, as well as all of their modifications which will be introduced during the term of this Agreement. "Tsykon" upgrades during the term of this Agreement are planned to modernize guidance and propulsion systems. "Zenit" upgrades will be aimed at modernizing the guidance system, modifying the first and second stages, developing a new fairing and a Ukrainian upper stage, creating a "Zenit" modification that could use a Russian "Block DM" (upper stage), and introducing modifications to improve the "Zenit's" reliability and safety. I respectfully request that you confirm that this understanding is shared by your Government. I have the further honor to propose that this letter and your letter of confirmation form an integral part of the Agreement. I have the further honor to confirm that this understanding is shared by my Government. Sincerely, /S/ Albert Gore His Excellency Leonid Kuchma President of Ukraine