PARIS — The agreement under which Canada’s MDA Corp. will buy the satellite manufacturing arm of New York-based Loral Space and Communications protects MDA from almost all potential costs associated with a pending lawsuit filed against the satellite maker by ViaSat Inc., Loral said June 28.

In addition to assuring that Loral pays for possible damages or royalty payments demanded of Space Systems/Loral (SS/L), the agreement calls for MDA to be reimbursed for any loss of orbital-incentive fees owed by SS/L’s customers that might be withheld in the event of a ViaSat victory.

In a June 28 submission to the U.S. Securities and Exchange Commission (SEC), Loral said MDA also will be compensated by Loral if the lawsuit requires future SS/L satellites to be modified.

Carlsbad, Calif.-based ViaSat is suing SS/L of Palo Alto, Calif., for breach of contract and patent infringement, alleging that the satellite manufacturer stole ViaSat technology and used it in multiple high-power telecommunications satellites that have been launched or are under construction.

Loral has denied ViaSat’s claim and has countersued, saying ViaSat has used Loral-patented technology.

ViaSat has not specified the damages it is seeking, but has suggested it is reserving the right to ask the U.S. District Court handling the lawsuit to order SS/L to stop delivery of future spacecraft containing ViaSat-patented intellectual property.

In a June 27 conference call with investors, Loral Chief Executive Michael B. Targoff reiterated his confidence that there would be “no material loss” to Loral from the lawsuit. He restated his hope that as the lawsuit progresses, ViaSat and Loral could resolve their outstanding issues in a way that avoids years of litigation.

The ViaSat lawsuit, filed in the U.S. District Court for the Southern District of California, alleges that almost every satellite SS/L has built in recent years contains ViaSat intellectual property, including the EchoStar 17 satellite scheduled for launch in July by ViaSat’s archrival in the U.S. consumer satellite broadband market, Hughes Network Systems of Germantown, Md.

A ViaSat victory could, among other things, entitle the company to the orbital-incentive payments for SS/L-built satellites containing its technology. These payments, usually amounting to 10-15 percent of a satellite’s total cost, are retained by the satellite’s owner and distributed to the manufacturer in annual increments over the satellite’s 15-year life, with interest.

In a conference call with investors June 27, officials from Richmond, British Columbia-based MDA said SS/L has $337 million in orbital incentives that will be due in the coming years.

The sales agreement makes clear that these payments, and others to be added with each new SS/L satellite delivered into orbit, are not threatened by the lawsuit.

Some $18 million of those orbital-incentive payments is due from Intelsat of Luxembourg and Washington following the May 31 launch of the IS-19 telecommunications satellite. One of that satellite’s two solar panels suffered damage of undetermined origin, meaning the spacecraft will not be able to perform 100 percent of its assigned mission.

A board of inquiry has yet to determine whether the solar array damage was the fault of SS/L or of Sea Launch AG of Bern, Switzerland, which provided the launch.

If Intelsat ultimately reduces its payments to SS/L for IS-19, “we have some responsibility for that,” Targoff said during the conference call. He declined to be more specific.

Targoff said he thought the sale to MDA could be completed, following several regulatory reviews, as early as August. Once the deal is finalized, Targoff said he likely will propose to Loral’s board that it distribute to shareholders a one-time dividend of $26 per share, which he said represents the after-tax SS/L sale proceeds, not including $101 million to be paid by MDA over a three-year period for Loral’s Palo Alto property.

Peter B. de Selding was the Paris bureau chief for SpaceNews.