Press Release

Arbitration Panel Upholds Loral’s Termination of Alliance With Alcatel

By SpaceRef Editor
February 25, 2002
Filed under , ,

Loral Space &
Communications announced today that it was notified by an
International Chamber of Commerce arbitration panel in Geneva,
Switzerland, that the panel has affirmed the validity of Space
System/Loral’s termination of its agreements with Paris-based Alcatel
Space concerning the satellite manufacturing business, effective
February 22, 2002.

The agreements between Alcatel and SS/L were terminable on one
year’s notice and, on February 22, 2001, Loral gave notice to Alcatel
that they would expire on February 22, 2002. While Alcatel maintained
that the notice was not effective, the panel ruled in Loral’s favor on
this matter. The agreements are therefore terminated.

The agreements with Alcatel date back to 1991 and have outlived
their usefulness due to the evolution of the space industry and the
emergence of Alcatel as a direct competitor of Loral’s.

In the arbitration, Alcatel’s assertion that there were various
breaches of the agreements was upheld. Alcatel claimed that certain
provisions of the agreements relating to the exchange of information,
along with certain procedural or administrative provisions, were
violated by Loral. Loral believes that Alcatel’s claims for damages
are completely without merit. The panel will decide whether those
breaches gave rise to damages at a later date.

Loral Space & Communications is a high technology company that
concentrates primarily on satellite manufacturing and satellite-based
services. For more information, visit Loral’s web site at

This document contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. In
addition, from time to time, Loral Space & Communications Ltd. or its
representatives have made or may make forward-looking statements,
orally or in writing. Such forward-looking statements may be included
in, but are not limited to, various filings made by the company with
the Securities and Exchange Commission, press releases or oral
statements made with the approval of an authorized executive officer
of the company. Actual results could differ materially from those
projected or suggested in any forward-looking statements as a result
of a wide variety of factors and conditions. These factors and
conditions have been described in the section of the company’s annual
report on Form 10-K for the fiscal year ended December 31, 2000,
entitled “Certain Factors That May Affect Future Results,” and the
company’s other filings with the Securities and Exchange Commission.
With regard to forward-looking statements concerning Loral CyberStar,
Inc. and its business, financial condition, results of operations and
prospects, the factors and conditions which could materially affect
these statements are described in the section of Loral CyberStar’s
annual report on Form 10-K for the fiscal year ended December 31,
2000, entitled “Certain Factors That May Affect Future Results.” The
reader is specifically referred to these documents regarding the
factors and conditions that may affect future results.

SpaceRef staff editor.