RISK MANAGEMENT WORKING GROUP John Vinter International Space Brokers, Inc Wilson Boulevard, Suite 990 Rosslyn, Virginia Telephone: (703) Facsimile: (703) Website: Report to COMSTAC Wednesday, October 27, 2004

1 Extension Of Indemnification Authority THREE BILLS IN PLAY  H.R and S.1260 would extend existing USG indemnification authority for a five year period, from 12/31/2004 to 12/31/2009  H.R incorporates a three year extension of the indemnification authority  COMSTAC proposed, as a minimum, extension of the indemnification authorization for a ten year period  Extension of indemnification authorization essential to maintaining a viable commercial U.S. launch industry

2 Unless indemnification authority renewed by end of year, U.S. commercial launch industry will be deprived of this essential protection  Attached draft letter from Chairman, COMSTAC, to the Associate Administrator for Commercial Space, FAA, urges support of the passage of H.R BEFORE YEAR-END  It is requested that the COMSTAC authorize its Chairman to sign and transmit this draft letter to the Associate Administrator, Patricia Grace Smith Status of Proposed Extension of Indemnification Authority

3 October 27, 2004 Patricia Grace Smith Associate Administrator for Commercial Space Transportation Federal Aviation Administration FAA/AST Independence Avenue, S.W. Washington, DC Re:Extension of the CSLA’s Indemnification Provision Dear Ms. Smith: As discussed at today’s meeting of the Federal Aviation Administration’s Commercial Space Transportation Advisory Committee (“COMSTAC”), I have been asked to reiterate the commercial space transportation industry’s great concern about the upcoming expiration of the indemnification provision of the Commercial Space Launch Act (“CSLA”) (49 U.S.C. § 70113(f)). As you know, it is scheduled to expire on December 31, I know you appreciate that extension of this provision is absolutely critical to the industry. Without it, U.S. launch operators would be exposed to unlimited third party liability in excess of insurance arising from licensed launch activities. U.S. launch operators cannot and will not expose themselves to such liability. Pending before the Senate is H.R. 5245, a bill to extend the liability indemnification regime for the commercial space transportation industry for a period of five years. This bill passed the House of Representatives on October 8, The COMSTAC respectfully requests that you urge the Senate to pass this bill before the end of the year. If no legislative action in this regard is taken, the U.S. commercial space transportation industry will not be afforded the protection it needs and on which it counts. We thank you for your help. Sincerely, John W. Vinter Chairman, COMSTAC Recommendation Letter

4 Space Insurance Market Update Since May 2004 Meeting Space insurance market essentially unchanged since May:  Rates are stable  Market capacity is generally stable -Sufficient for today’s needs Launch activity remains sluggish New technology introduced at a cautious pace Incidents continue to occur  Launchers – Sea Launch/Apstar 5  Satellites - Amazonas BSS-702 claims generally resolved