As filed with the Securities and Exchange Commission on September 11, 1996
Registration No. 333-10521
------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------
AMENDMENT NO. 1 TO FORM S-4
Registration Statement
Under
The Securities Act of 1933
------------------------
INTERDIGITAL COMMUNICATIONS CORPORATION
(Exact name of Registrant as specified in its charter)
Pennsylvania 3663 23-1882087
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation Classification Code Number Identification No.)
or organization)
781 Third Avenue
King of Prussia, Pennsylvania 19406-1409
(610) 878-7800
(Address, including zip code, and telephone number,
including area code, of Registrant's principal executive offices)
------------------------
William A. Doyle, President
InterDigital Communications Corporation
781 Third Avenue
King of Prussia, Pennsylvania 19406-1409
(610) 878-7800
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
------------------------
Copy to:
James D. Epstein, Esq.
Brian M. Katz, Esq.
Pepper, Hamilton & Scheetz
3000 Two Logan Square
Philadelphia, PA 19103-2799
------------------------
Approximate date of commencement of proposed sale to
the public: As soon as practicable after this Registration
Statement becomes effective.
------------------------
If any of the securities being registered on this Form are to be
offered in connection with the formation of a holding company and there is
compliance with General Instruction, check the following box. / /
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until this Registration Statement shall become
effective on such date as the Commission, acting pursuant to Section 8(a), may
determine.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Sections 1741-1750 of the Pennsylvania Business Corporation Law of 1988 (the
"BCL"), Section 8365 of Title 42 of the Pennsylvania Consolidated Statutes
("Section 8365") and the Company's By-Laws provide for indemnification of the
Company's directors and officers and certain other persons. Under Sections
1741-1750 of the BCL, directors and officers of the Company may be indemnified
by the Company against all expenses incurred in connection with actions
(including, under certain circumstances, derivative actions) brought against
such director or officer by reason of his or her status as a representative of
the Company, or by reason of the fact that such director or officer serves or
served as a representative of another entity at the Company's request, so long
as the director or officer acted in good faith and in a manner he or she
reasonably believed to be in, or not opposed to, the best interests of the
Company. As permitted under Section 1741-1750 of the BCL and Section 8365, the
Company's By-Laws provide that the Company shall indemnify directors and
officers against all expenses incurred in connection with actions (including
derivative actions) brought against such director or officer by reason of the
fact that he or she is or was a director or officer of the Company, or by reason
of the fact that such director or officer serves or served as an employee or
agent of any entity at the Company's request, unless the act or failure to act
on the part of the director or officer giving rise to the claim for
indemnification is determined by a court in a final, binding adjudication to
have constituted willful misconduct or recklessness.
Reference is made to Item 22 of this Registration Statement for additional
information regarding indemnification of directors and officers.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
A. Exhibits.
Exhibit
Number Exhibit Description
- ------- -------------------
2 Plan of Merger dated August 16, 1996 (included as Annex I to
Prospectus) (Previously filed).
5 Opinion of Jane S. Schultz re: legality.
8 Form of Opinion of Pepper, Hamilton & Scheetz re: tax matters.
23.01 Consents of Arthur Andersen LLP (Included on Pages II-3 and II-4).
23.02 Consent of Pepper, Hamilton & Scheetz.
23.03 Consent of Howard, Lawson & Co.
24 Powers of Attorney (Previously filed).
99.01 Letters to InterDigital Patents Corporation Stockholders.
99.02 Letter of Transmittal.
B. Financial Statement Schedules - Not Applicable
II-1
<PAGE>
ITEM 22. UNDERTAKINGS.
A. 1. The undersigned Registrant hereby undertakes as follows:
that prior to any public reoffering of the securities registered hereunder
through use of a prospectus which is a part of this registration statement, by
any person or party who is deemed to be an underwriter within the meaning of
Rule 145(c), the issuer undertakes that such reoffering prospectus will contain
the information called for by the applicable registration form with respect to
reofferings by persons who may be deemed underwriters, in addition to the
information called for by the other items of the applicable form.
2. The Registrant undertakes that every prospectus (I) that is
filed pursuant to paragraph (1) immediately preceding, or (II) that purports to
meet the requirements of Section 10(a)(3) of the Securities Act and is used in
connection with an offering of securities subject to Rule 415, will be filed as
a part of an amendment to the registration statement and will not be used until
such amendment is effective, and that, for purposes of determining any liability
under the Securities Act, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
B. The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
C. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission, such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer, or controlling person of the
Registrant in connection with the securities being registered, the Registrant
will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question of whether such indemnification by it is against the public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
D. The undersigned Registrant hereby undertakes to respond to requests
for information that is incorporated by reference into the prospectus pursuant
to Item 4, 10(b), 11 or 13 of this Form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the Registration Statement through the
date of responding to the request.
E. The undersigned Registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the Registration Statement when it became effective.
II-2
<PAGE>
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
To InterDigital Communications Corporation:
As independent public accountants, we hereby consent to the
incorporation by reference in this Amendment No. 1 to Form S-4 Registration
Statement of our report dated March 26, 1996, included in the InterDigital
Communications Corporation's Form 10-K for the year ended December 31, 1995, and
to all references to our Firm included in this Registration Statement.
/s/ Arthur Andersen LLP
-------------------------------
Arthur Andersen LLP
Philadelphia, Pa.,
September 11, 1996
II-3
<PAGE>
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
To InterDigital Communications Corporation:
As independent public accountants, we hereby consent to the use of our
report, dated August 14, 1996, related to the consolidated financial statements
of InterDigital Patents Corporation and Subsidiary as of December 31, 1995 and
for the year then ended and all references to our Firm included in or made a
part of this Amendment No. 1 to Form S-4 Registration Statement.
/s/ Arthur Andersen LLP
------------------------------
Arthur Andersen LLP
Philadelphia, Pa.,
September 11, 1996
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in King of Prussia,
Pennsylvania, on September 11, 1996.
InterDigital Communications Corporation
By: /s/ William A. Doyle
-------------------------------------
William A. Doyle, President and Director
Pursuant to the requirements of the Securities Act of 1933,
this Amendment No. 1 to the Registration Statement has been signed by the
following persons in the capacities and on the dates indicated.
Date: September 11, 1996 /s/ William A. Doyle
----------------------------------------
William A. Doyle, President and Director
Date: September 11, 1996 /s/ James W. Garrison
---------------------------------------
James W. Garrison, Vice President, Chief
Financial Officer and Treasurer, the
principal financial officer and principal
accounting officer
Date: September 11, 1996 Harry Campagna*
----------------------------------------
Harry Campagna, Director
Date: September 11, 1996 D. Ridgely Bolgiano*
----------------------------------------
D. Ridgely Bolgiano, Director
Date: September 11, 1996 Barney J. Cacioppo*
----------------------------------------
Barney J. Cacioppo, Director
Date: September 11, 1996 Harley L. Sims*
----------------------------------------
Harley L. Sims, Director
- -------------
*The undersigned, William A. Doyle, by signing his name hereto, does hereby
execute this Amendment No. 1 to the Registration Statement on his own behalf
personally and on behalf of each of the above-named directors of the Registrant
pursuant to Powers of Attorney executed by such directors and filed with the
Securities and Exchange Commission in the Registration Statement.
/s/ William A. Doyle
- ----------------------------------------
William A. Doyle, President and Director
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Exhibit Description Page Number
- ------- ------------------- -----------
<S> <C> <C>
2 Plan of Merger dated August 16, 1996 (included as Annex I to
Prospectus) (Previously filed).
5 Opinion of Jane S. Schultz re: legality.
8 Form of Opinion of Pepper, Hamilton & Scheetz re: tax matters.
23.01 Consents of Arthur Andersen LLP.
23.02 Consent of Pepper, Hamilton & Scheetz.
23.03 Consent of Howard, Lawson & Co.
24 Powers of Attorney (Included on Page II-5 and II-6) (previously filed).
99.01 Letters to InterDigital Patents Corporation Stockholders.
99.02 Letter of Transmittal.
</TABLE>
EXHIBIT 5
<PAGE>
September 11, 1996
InterDigital Communications Corporation
2200 Renaissance Boulevard
Suite 105
King of Prussia, Pennsylvania 19406
Re: Registration Statement on Form S-4
Ladies and Gentlemen:
Reference is made to a Registration Statement on Form S-4 of
InterDigital Communications Corporation (the "Company"), Registration No.
333-10521, to which this opinion is attached as an exhibit (the "Registration
Statement"). Capitalized terms not otherwise defined herein shall have the
meanings ascribed to them in the Registration Statement. The Registration
Statement covers 2,050,000 shares of Common Stock (the "Shares") which may be
issued in connection with the merger of IP Acquisition Corp., a wholly-owned
subsidiary of the Company, into InterDigital Communications Corporation, an
approximately 94%-owned subsidiary of the Company (the "Merger").
I have examined the Registration Statement, including the
exhibits thereto, the Company's Articles of Incorporation, as amended, the
Company's By-laws and such other documents as I have deemed appropriate. In the
foregoing examination, I have assumed the genuineness of all signatures, the
authenticity of all documents submitted to me as originals and the authenticity
of all documents submitted to me as copies of originals.
Based upon such examination, I am of the opinion that when
there has been compliance with the Act and applicable state securities laws, the
Shares, when issued pursuant to the terms of the Merger, will be validly issued,
fully paid and nonassessable.
I hereby consent to the filing of this opinion as an exhibit
to the Registration Statement and to the reference to me under the caption
"Legal Opinions" in the Prospectus. On giving this consent, I do not thereby
admit that I am within the category of persons whose consent is required under
Section 7 of the Act or rules and regulations of the Commission thereunder.
The undersigned is Associate General Counsel of the Company
and beneficially owns options to purchase 1,499 shares of Common Stock of the
Company which are currently vested and exercisable.
Very truly yours,
/s/ Jane S. Schultz
--------------------------------------
Jane S. Schultz
Associate General Counsel
EXHIBIT 8
<PAGE>
____________ __, 1996
InterDigital Communications Corporation
InterDigital Patents Corporation
781 Third Avenue
King of Prussia, PA 19406-1409
Ladies and Gentlemen:
You have requested our opinion regarding certain federal
income tax consequences of the proposed merger (the "Merger") of IP Acquisition
Corp. ("MergerCo"), a Delaware corporation and a wholly owned subsidiary of
InterDigital Communications Corporation, ("InterDigital"), a Pennsylvania
corporation with and into InterDigital Patents Corporation ("IPC"), a Delaware
corporation, approximately ninety-four percent (94%) of the stock of which is
owned by InterDigital, under the circumstances and on the terms and conditions
more fully described herein.
The terms of the Merger are contained in the Agreement and
Plan of Merger dated as of August 16, 1996 (the "Plan of Merger"). Terms not
otherwise defined in this letter shall have the meanings assigned to them in the
Plan of Merger.
You have directed us to assume in preparing this opinion that
(1) the Merger will be consummated in accordance with the terms, conditions and
other provisions of the Plan of Merger, and (2) all of the factual information,
descriptions, representations and assumptions set forth in this letter (an
advance copy of which has been provided to you), in the Plan of Merger, in the
letters to us from IPC dated ____________, 1996, and from InterDigital dated
___________, 1996 (collectively, the "Letters," copies of which are attached
hereto), and in the Prospectus pertaining to the Merger (the "Prospectus") as
filed with the Securities and Exchange Commission, are accurate and complete and
will be accurate and complete at the time the Merger becomes effective (the
"Effective Time"). We have not independently verified any factual matters
relating to the Merger in connection with our preparation of this opinion and,
accordingly, our opinion does not take into account any other matters not set
forth herein which might have been disclosed by independent verification.
I. PARTIES TO THE MERGER
1. InterDigital
InterDigital is a corporation which was organized under the
laws of the Commonwealth of Pennsylvania in 1972. Its principal office is
located at 781 Third Avenue, King of Prussia, PA 19406. InterDigital develops
and markets advanced digital wireless telecommunications systems using
proprietary technologies for voice and data communications and has developed an
extensive patent portfolio related to these technologies.
InterDigital owns one hundred percent (100%) of the issued and
outstanding common stock of MergerCo and approximately ninety-four (94%) of the
issued and outstanding common stock of IPC. InterDigital's stock ownership of
IPC resulted from the following transactions: In February 1992, InterDigital
transferred all of its patents, patent applications, and rights to file patent
applications on certain future inventions to InterDigital Technology
Corporation, a Delaware corporation ("ITC") in exchange for all of the issued
and outstanding common stock of ITC. In October 1992, InterDigital transferred
all of its ITC common stock to IPC in exchange for all of
<PAGE>
InterDigital Communications Corporation
_________________, 1996
Page 2
the issued and outstanding common stock of IPC. Later that year, IPC engaged in
a private offering of approximately six percent (6%) of IPC common stock,
thereby leaving InterDigital owning approximately ninety-four percent (94%) of
the issued and outstanding common stock of IPC. None of the IPC common stock
held by InterDigital was acquired by Interdigital or an affiliate of
InterDigital in contemplation of the Merger or at any time during which
discussions relating to the Merger were taking place.
2. IPC
IPC was incorporated in Delaware in 1992. Its principal office
is located at 781 Third Avenue, King of Prussia, PA 19406. The issued and
outstanding common stock of IPC is held ninety-four percent (94%) by
InterDigital and the remaining six percent (6%) by various investors.
The sole activity of IPC is to own and manage its investment
in all of the issued and outstanding common stock of ITC. As discussed above,
IPC acquired all of the outstanding common stock of ITC from InterDigital in
1992 in exchange for all of its issued and outstanding common stock. In 1992,
IPC engaged in a private offering of approximately six percent (6%) of IPC
common stock.
Immediately prior to the Merger, IPC will have one option
outstanding for the purchase of 262,625 shares of IPC common stock which option
is held by Robert S. Bramson, a former employee of IPC (the "Bramson Option").
Mr Bramson, InterDigital, and IPC have agreed that Mr. Bramson will fully
exercise such option immediately prior to the Merger. The shares of IPC common
stock issued upon exercise of the option shall be deemed outstanding at the
Effective Time and shall be entitled to participate in the Merger. Except for
the Bramson Option, there are no outstanding options or warrants to purchase IPC
common stock and there are no outstanding securities, stock or other instruments
convertible into IPC common stock.
3. MergerCo
MergerCo is a newly organized Delaware corporation created for
the sole purpose of facilitating, by virtue of the Merger, InterDigital's
acquisition of the six percent (6%) of IPC common stock held by various
investors. The authorized capital of MergerCo consists of 100 shares of common
stock, par value $.01 per share, all of which are issued and outstanding and
owned by InterDigital. MergerCo does not and will not have any assets (other
than the minimum assets required for state law capitalization purposes) or
liabilities or engage in any activities other than those incident to its
formation and capitalization and the Merger.
II. THE MERGER
Pursuant to the Plan of Merger, MergerCo will be merged, in
accordance with the applicable provisions of the Delaware General Corporation
Law (the "DCL"), with and into IPC, with IPC as the surviving corporation. Under
Delaware law, since InterDigital owns in excess of ninety percent (90%) of the
outstanding common stock of IPC and IPC will be the surviving entity in the
Merger, the approvals of the boards of directors of MergerCo and IPC are
required as is the approval of InterDigital, as the sole stockholder of MergerCo
and the majority stockholder of IPC. Except for these approvals, no further
action is required to approve or effect the Merger
<PAGE>
InterDigital Communications Corporation
_________________, 1996
Page 3
including any action by the stockholders of InterDigital. No proxies are being
solicited in connection with the Merger.
Stockholders of record of IPC common stock have the right
under Section 262 of the DCL to dissent from the merger and may exercise
appraisal rights provided that they comply with the conditions established by
Section 262 of the DCL. Stockholders of IPC who comply with the requirements of
Section 262 of the DCL may elect to receive the fair cash value of their shares
of IPC common stock.
At the Effective Time:
1. all assets and liabilities of MergerCo will be transferred
by operation of law to IPC;
2. the separate corporate existence of MergerCo will cease;
3. each share of MergerCo's common stock issued and
outstanding immediately prior to the Effective Time will be canceled and cease
to exist;
4. each outstanding share of IPC common stock, other than
Excluded Shares, will be converted into the right to receive the Merger
Consideration, subject to adjustment as described in the Plan of Merger and the
Prospectus. "Excluded Shares" shall mean those shares of IPC common stock held
by InterDigital and shares of IPC common stock held by stockholders who perfect
their appraisal rights under Delaware law;
5. assuming the Average Closing Price of a share of parent
Stock equals $7.33, approximately ___ shares of InterDigital Common Stock will
be issued in the Merger to the holders of IPC common stock, other than the
holders of Excluded Shares (the "Investors") (assuming the exercise of the
Bramson Option), representing approximately __% of the shares of InterDigital
Common Stock to be issued and outstanding immediately after the consummation of
the Merger; and
6. shares of IPC common stock held by persons who perfect
their appraisal rights shall become the right to receive from IPC cash in an
amount equal to the fair value of their shares as determined in accordance with
Delaware law.
In the event that during the period commencing on the date of
the Plan of Merger and ending at the Effective Time, the outstanding shares of
InterDigital Common Stock shall have been increased, decreased or changed into
or exchanged for a different number or kind of shares or securities by
reorganization, recapitalization, reclassification, stock dividend, stock split
or other like changes in InterDigital's capitalization, without InterDigital's
receiving consideration therefor, then, an appropriate and proportionate
adjustment shall be made in the number and kind of shares of InterDigital Common
Stock to be delivered to the Investors pursuant to the Plan of Merger.
No fractional shares of InterDigital Common Stock will be
issued in the Merger. Each Investor who otherwise would be entitled to receive a
fraction of a share of InterDigital Common Stock, instead, will receive from
InterDigital an amount of cash equal to the Fair Market Value (as defined in the
Plan of Merger) of one share of InterDigital Common Stock multiplied by the
fractional share in question.
<PAGE>
InterDigital Communications Corporation
_________________, 1996
Page 4
Except for cash paid to dissenters and cash exchanged in lieu
of issuing fractional shares of InterDigital Common Stock, no cash will be
exchanged for shares of IPC common stock or shares of MergerCo common stock
pursuant to the Merger. IPC will provide the funds to pay dissenters out of the
post-Merger cash flow from its operations. No portion of the funds used to pay
dissenters will be derived, directly or indirectly, from InterDigital, MergerCo,
or any of their affiliates, nor will InterDigital, MergerCo, or any of their
affiliates, directly or indirectly, reimburse IPC for payments to dissenters.
Except for the Bramson Option, described above, there are no
options or warrants to purchase IPC common stock, and no securities or other
instruments convertible into IPC common stock will be outstanding at the
Effective Time.
III. Representations and Assumptions
We also have relied with your permission on the following
additional representations and/or assumptions:
1. MergerCo was organized by InterDigital under the laws of
Delaware solely in order to effect the Merger.
2. MergerCo has not engaged in any activities other than
those incident to its formation.
3. The Merger will be effected for bona fide business reasons.
4. To the best of the knowledge of the management of IPC, the
fair market value of the InterDigital Common Stock received by each Investor in
the Merger will be approximately equal to the fair market value of the IPC
common stock exchanged pursuant to the Merger.
5. To the best of the knowledge of the management of IPC and
InterDigital, there is no plan or intention by the Investors to sell, exchange,
or otherwise dispose of a number of shares of InterDigital Common Stock received
in the Merger that would reduce the Investors' ownership of InterDigital Common
Stock to a number of shares having a value, as of the date of the Merger, of
less than 50% of the value of all of the formerly outstanding common stock of
IPC held by the Investors as of the same date.
6. Prior to the Merger, InterDigital will be in control of
MergerCo within the meaning of Code Section 368(c).(1)
7. Immediately following the Merger, InterDigital will own
directly all of the issued and outstanding capital stock of IPC and therefore,
InterDigital will be in control of IPC as defined in Code Section 368(c).
- -------------
1. All references herein to the "Code" are to the Internal Revenue Code of 1986,
as amended, unless otherwise indicated.
<PAGE>
InterDigital Communications Corporation
_________________, 1996
Page 5
8. IPC has no plan or intention to issue additional shares of
its stock that would result in InterDigital losing control of IPC within the
meaning of Code Section 368(c).
9. InterDigital has no plan or intention to liquidate IPC; to
merge IPC into another corporation; to cause IPC to sell or otherwise dispose of
any of its assets, except for dispositions made in the ordinary course of
business; or to sell or otherwise dispose of any of the IPC common stock
acquired in the Merger, except for transfers described in Code Section
368(a)(2)(C).
10. InterDigital has no plan or intention to reacquire any of
its stock issued in the Merger. InterDigital may make purchases of shares of its
stock on the American Stock Exchange or otherwise. It is possible that
InterDigital might so purchase shares issued to the Investors pursuant to the
Merger, but any such purchases would be made without actual knowledge by
InterDigital that the seller is a former IPC stockholder.
11. InterDigital, MergerCo, IPC and the stockholders of IPC
will pay their respective expenses, if any, incurred in connection with the
Merger.
12. InterDigital will acquire IPC common stock solely in
exchange for InterDigital voting stock. For purposes of this representation, IPC
common stock redeemed for cash or other property furnished by InterDigital will
be considered as acquired by InterDigital. Further, no liabilities of IPC or IPC
stockholders will be assumed by InterDigital, nor will any of the IPC common
stock be subject to any liabilities.
13. There is no intercorporate indebtedness existing between
InterDigital and IPC or between MergerCo and IPC that was issued or acquired, or
will be settled, at a discount.
14. MergerCo will have no liabilities assumed by IPC in the
Merger, nor will MergerCo transfer to IPC any assets subject to liabilities
pursuant to the Merger other than those liabilities related to its obligations
under the Plan of Merger.
15. At the Effective Time, IPC will not have outstanding any
warrants, options, convertible securities, or any other type of right pursuant
to which any person could acquire stock in IPC that, if exercised or converted,
would affect InterDigital's retention of control of IPC, as defined in Code
Section 368(c).
16. InterDigital currently owns approximately 94% of the
issued and outstanding IPC common stock. InterDigital's ownership of such stock
resulted from the following transactions: In February 1992, InterDigital
transferred all of its patents, patent applications, and rights to file patent
applications on certain future inventions to ITC in exchange for all of the
issued and outstanding common stock of ITC. In October 1992, InterDigital
transferred all of its ITC common stock to IPC (a newly formed corporation) in
exchange for all of the issued and outstanding common stock IPC. Later that
year, IPC and InterDigital engaged in a private offering of approximately six
percent (6%) of IPC common stock, thereby leaving InterDigital owning
approximately ninety-four percent (94%) of the issued and outstanding common
stock of IPC.
17. The IPC common stock held by InterDigital was not
acquired as part of, in connection with, or in contemplation of the Merger.
<PAGE>
InterDigital Communications Corporation
_________________, 1996
Page 6
18. Following the Merger, IPC will continue its historic
business and use a significant portion of its historic business assets in a
business.
19. No two parties to the Merger are investment companies as
defined in Code Sections 368(a)(2)(F)(iii) and (iv).
20. IPC will pay its dissenting stockholders the value of
their stock out of its own funds. No funds will be supplied for that purpose,
directly or indirectly, by InterDigital or any person affiliated with
InterDigital, nor will InterDigital or any person affiliated with InterDigital,
directly or indirectly, reimburse IPC for any payments to dissenters.
21. At the Effective Time, the fair market value of the assets
of IPC will exceed the sum of its liabilities (including, without limitation,
any liabilities to which its assets are subject).
22. No dividends or distributions will be made with respect to
any IPC common stock prior to the Merger. After the Merger, no dividends or
distributions will be made to the former IPC stockholders by InterDigital, other
than dividend distributions made with regard to all shares of InterDigital
Common Stock.
23. None of the compensation received by any
stockholder-employee of IPC will be separate consideration for, or allocable to,
any of their shares of IPC common stock. The compensation paid to any
stockholder-employee of IPC will be for services actually rendered and will be
commensurate with amounts paid to third parties bargaining at arm's length for
similar services. None of the InterDigital Common Stock received in the Merger
by any stockholder-employee of IPC in exchange for his IPC common stock will be
in exchange for, or in consideration of, services rendered to InterDigital, IPC
or any other entity by such stockholder-employee.
24. The payment of cash in lieu of fractional shares of
InterDigital Common Stock is solely for the purpose of avoiding the expense and
inconvenience to InterDigital of issuing fractional shares and does not
represent separately bargained-for consideration. In addition, this cash payment
will not be made pro rata either to all IPC stockholders or to all InterDigital
stockholders. The total cash consideration that will be paid in the Merger to
the Investors in lieu of issuing fractional shares of InterDigital Common Stock
will not exceed one percent (1%) of the total consideration that will be issued
in the Merger to the Investors in exchange for their shares of IPC common stock.
The fractional share interests of each IPC stockholder will be aggregated, and
no Investor will receive cash in an amount equal to or greater than the value of
one full share of InterDigital Common Stock.
IV. OPINION
Assuming that the Merger is consummated in accordance with the
terms and conditions set forth in the Plan of Merger and based on the facts set
forth in the Letters and this letter (including all assumptions and
representations) and subject to the qualifications and other matters set forth
herein, it is our opinion that for federal income tax purposes the Merger will
be treated as a reorganization within the meaning of Code Section 368(a), and
therefore, will have the following material federal income tax consequences:
<PAGE>
InterDigital Communications Corporation
_________________, 1996
Page 7
1. No gain or loss would be recognized by any of IPC, MergerCo
or InterDigital as a result of the Merger. Code Sections 354, 361 and 1032. See
also, Rev. Rul. 67-448, 1967-2 C.B. 144.
2. No gain or loss would be recognized by an Investor upon the
receipt of InterDigital Common Stock in exchange for IPC common stock in the
Merger, except as discussed below with respect to cash received in lieu of a
fractional share interest in InterDigital Common Stock. Code Section 354.
3. The aggregate adjusted tax basis of the shares of
InterDigital Common Stock to be received by an Investor in the Merger would be
the same as the aggregate adjusted tax basis in the shares of IPC common stock
surrendered in exchange therefor. Code Section 358.
4. The holding period under the Code of the shares of
InterDigital Common Stock to be received by the Investors in the Merger would
include the holding period of the shares of IPC common stock surrendered in
exchange therefor, provided that such shares of IPC common stock are held as
capital assets at the Effective Time. Code Section 1223.
It is our further opinion that an Investor who receives cash
in the Merger in lieu of a fractional share interest in InterDigital Common
Stock will be treated for federal income tax purposes as having received cash in
redemption of such fractional share interest. Such redemption will be subject to
the conditions and limitations of Code Section 302, including the attribution
rules of Code Section 318. Subject to the discussion of Code Section 318 below,
the receipt of such cash generally should result in capital gain or loss in an
amount equal to the difference between the amount of cash received and the
portion of such Investor's adjusted tax basis in the shares of IPC common stock
allocable to the fractional share interest. Such capital gain or loss will be
long-term capital gain or loss if the Investor holds the shares as capital
assets and the holding period for the fractional shares of InterDigital Common
Stock deemed to be received and then redeemed is more than one year.
It also is our opinion that a holder of shares of IPC common
stock who perfects dissenters' rights under the laws of the State of Delaware
and who receives a cash payment of the fair market value of his shares of IPC
common stock will be treated as having received such payment in redemption of
such shares. Such redemption will be subject to the conditions and limitations
of Code Section 302, including the attribution rules of Code Section 318. In
general, if, at the Effective Time, a dissenting stockholder solely owns
(actually or constructively) shares of IPC common stock as a capital asset, the
dissenting stockholder will recognize capital gain or loss measured by the
difference between the amount of cash received by such holder and the basis for
such shares. If, however, such holder owns, either actually or constructively,
any other IPC common stock or InterDigital Common Stock, the payment made to
such holder could be treated as a dividend. In general, under the constructive
ownership rules of the Code, a holder may be considered to own stock that is
owned, and in some cases constructively owned, by certain related individuals or
entities, as well as stock that such holder (or related individuals or entities)
has the right to acquire by exercising an option or converting a convertible
security.
Our opinion is limited to the foregoing federal income tax
consequences of the Merger, which are the only matters as to which you have
requested our opinion. We have not addressed any other federal income tax
consequences of the Merger other than those specifically set forth herein and we
have not considered any matters (including state or local tax consequences)
arising under the laws of any jurisdiction other than matters of federal law
arising under the laws of the United States as expressly set forth herein.
<PAGE>
InterDigital Communications Corporation
_________________, 1996
Page 8
Our opinion is based on the understanding that the relevant
facts are, and will be at the Effective Time, as set forth or referred to in
this letter. If this understanding is incorrect or incomplete in any respect,
our opinion could be affected. Our opinion is based on the facts and
representations as expressed herein.
Our opinion is based upon existing law, including the
provisions of the Code, Treasury Regulations promulgated thereunder, current
administrative rulings and practices of the Internal Revenue Service, case law,
and judicial decisions interpreting the same, none of which squarely addresses
every precise factual circumstance present in the connection with the Merger but
all of which, taken together, in our opinion provide a sufficient legal basis
for our opinions set forth herein. The possibility exists, however, that our
opinion as to the proper application of the law to the facts of the Merger would
not be accepted by the Internal Revenue Service or would not prevail in court.
In addition, the authorities upon which we have relied are all
subject to change and such change may be made with retroactive effect. No
assurances can be provided as to future judicial interpretations of these laws
or their effect on this opinion. We are not hereby undertaking to advise you as
to any changes in the law, facts, or circumstances which may hereafter occur or
come to our attention. No assurance can be provided that after any such change
our opinion would not be different. Further, we undertake no responsibility and
are under no obligation to update or supplement our opinion at any future time
nor render any further opinion to you.
Only InterDigital and IPC may rely on this opinion, and only
with respect to the Merger.
We hereby consent to the filing with the Securities and
Exchange Commission of this opinion as an exhibit to InterDigital's Registration
Statement on Form S-4 relating to shares of InterDigital Common Stock that may
be issued in connection with the Merger and to the reference to our firm under
the headings "Summary -- Certain Federal Income Tax Consequences" and
"Certain Federal Income Tax Consequences of the Merger" in the Prospectus. In
giving such consent, we do not thereby admit that we are in the category of
persons whose consent is required under Section 7 of the Securities Act of 1933.
Very truly yours,
PEPPER, HAMILTON & SCHEETZ
--------------------------------------
Lisa Petkun, a Partner
Exhibit 23.2
<PAGE>
CONSENT OF PEPPER, HAMILTON & SCHEETZ
To InterDigital Communications Corporation:
We hereby consent to the filing with the Securities and
Exchange Commission of the form of our opinion concerning the tax consequences
of the merger between IP Acquisition Corp. and InterDigital Patents Corporation
(the "Merger") as an exhibit to InterDigital's Registration Statement on Form
S-4 relating to shares of InterDigital Common Stock that may be issued in
connection with the Merger and to the reference to our firm under the headings
"Summary -- Certain Federal Income Tax Consequences" and "Certain Federal Income
Tax Consequences of the Merger" in the Prospectus which forms a part thereof. In
giving such consent, we do not thereby admit that we are in the category of
persons whose consent is required under Section 7 of the Securities Act of 1933.
Very truly yours,
PEPPER, HAMILTON & SCHEETZ
September 11, 1996
<PAGE>
Exhibit 23.3
<PAGE>
CONSENT OF HOWARD, LAWSON & CO.
To InterDigital Patents Corporation:
We hereby consent to the inclusion in this Registration
Statement on Form S-4 of our opinion dated August 15, 1996 and to all references
to our Firm included in this Registration Statement.
/s/ Howard, Lawson & Co.
------------------------
Howard, Lawson & Co.
Philadelphia, PA
September 9, 1996
Exhibit 99.1
<PAGE>
INTERDIGITAL PATENTS CORPORATION
781 Third Avenue
King of Prussia, PA 19406-1409
To Our Stockholders:
On August 15, 1996, the respective boards of directors of
InterDigital Patents Corporation, a Delaware corporation ("IPC"), InterDigital
Communications Corporation, a Pennsylvania corporation ("InterDigital"), and IP
Acquisition Corp., a Delaware corporation and a wholly-owned subsidiary of
InterDigital ("MergerCo"), each unanimously approved and adopted an Agreement
and Plan of Merger (the "Plan of Merger"), providing for the merger of MergerCo
with and into IPC (the "Merger"), with IPC being the surviving corporation in
the Merger (the "Surviving Corporation"), and the issuance of InterDigital
common stock to you in exchange for your IPC common stock. Enclosed is a copy of
a Prospectus prepared by InterDigital relating to the shares of InterDigital
common stock to be issued to you in connection with the Merger. Please read it
carefully as it describes certain information relating to InterDigital and IPC,
including certain risk factors. A copy of the Plan of Merger is attached as
Annex I to the enclosed Prospectus.
At the effective time of the Merger, which will occur on or
about ________ __, 1996 upon the filing of a Certificate of Merger in Delaware
(the "Effective Time"), each outstanding share of IPC common stock, par value
$.001 per share, other than shares of IPC common stock held by InterDigital, and
other than shares of IPC common stock held by stockholders who perfect their
appraisal rights under Delaware law, will be converted into that number of
shares of Common Stock of InterDigital (the "Merger Consideration") equal to (i)
$7.33 divided by (ii) the average closing price per share of InterDigital Common
Stock as reported by the American Stock Exchange for the 30 calendar days ending
on the last trading day prior to the date the Registration Statement on Form S-4
relating to the Merger was declared effective by the Securities and Exchange
Commission (the "Average Price"). Stockholders of IPC will not be entitled to
receive fractions of shares of InterDigital Common Stock ("Fractional Shares")
but, instead, will receive a cash payment in lieu of Fractional Shares in an
amount equal to the Average Price multiplied by the Fractional Share in
question. Only the approval of InterDigital as the majority stockholder of IPC
and the sole stockholder of MergerCo is required to effect the Merger. This is
not a solicitation of a proxy and you are requested not to send us a proxy.
In making its determination to approve the Merger, the Board
of Directors of IPC (the "Board") considered the fairness of the terms and
conditions of the Merger and the Merger Consideration. In connection with such
consideration, the Board retained Howard, Lawson & Co. ("Howard Lawson") to act
as its financial advisor. A copy of Howard Lawson's written opinion as to the
fairness, from a financial point of view, to IPC's stockholders (other than
InterDigital) of the Merger Consideration to be received by such stockholders,
is included as Annex II to the Prospectus. The Board also engaged the law firm
of Archer & Greiner, a Professional Corporation to advise the Board as to
certain legal issues.
In order to receive the Merger Consideration, please complete
the enclosed Letter of Transmittal and return it to InterDigital, together with
your original certificates representing shares of IPC common stock. If you are
unable to locate your original IPC stock certificates, please follow the
instructions in the Letter of Transmittal under the caption "Lost Certificates."
Sincerely yours,
D. Ridgely Bolgiano, Chairman of the Board and
Executive Vice President
____________, 1996
Enclosure
<PAGE>
M E M O R A N D U M
TO: Stockholders of InterDigital Patents Corporation
FROM: InterDigital Patents Corporation
DATE: September __, 1996
RE: Merger with IP Acquisition Corp.
- -----------------------------------------------------------------
On ________ __, 1996, the effective time (the "Effective
Time") of the merger (the "Merger") of IP Acquisition Corp. into InterDigital
Patents Corporation ("IPC"), each outstanding share of IPC common stock, par
value $.001 per share, other than shares of IPC common stock held by
InterDigital Communications Corporation ("InterDigital"), and other than shares
of IPC common stock held by stockholders who perfect their appraisal rights
under Delaware law, was converted into _____ shares of Common Stock of
InterDigital (the "Merger Consideration").
This memorandum shall serve as notice under Section 262 of the
General Corporation Law of Delaware (the "DCL") that, in lieu of accepting the
Merger Consideration, you may seek to have the "fair value" of the shares of IPC
common stock held by you at the Effective Time be judicially determined and to
have such value be paid to you in cash. To do so, you must comply with the
requirements of Section 262 of the DCL, a copy of which is attached hereto. This
letter shall also serve as notice under Section 228 of the DCL and the Bylaws of
IPC that in lieu of a special meeting of stockholders of IPC to approve the
Merger, InterDigital, as the majority stockholder of IPC, approved the Merger
by written consent.
INTERDIGITAL PATENTS CORPORATION
<PAGE>
Exhibit 99.2
<PAGE>
LETTER OF TRANSMITTAL
To Accompany Certificate(s) Formerly Representing
Shares of Common Stock, $.001 Par Value
of
INTERDIGITAL PATENTS CORPORATION
surrendered for payment as described within
pursuant to the merger with
IP ACQUISITION CORP.
a wholly owned subsidiary of
INTERDIGITAL COMMUNICATIONS CORPORATION
To: InterDigital Communications Corporation
By Mail or Hand Delivery: By Facsimile:
InterDigital Communications Corp. (610) 992-9432
781 Third Avenue ______________
King of Prussia, PA 19406-2755 Confirm by Telephone:
Attn: Jane Schultz (610)878-7800
Delivery of this instrument to an address other than as set
forth above does not constitute a valid delivery.
The Instructions accompanying this Letter of Transmittal
should be read carefully before this Letter of Transmittal is
completed.
This Letter of Transmittal is to be completed, signed and
mailed or delivered by Stockholders (as defined below) together with stock
certificates to InterDigital Communications Corporation (the "Paying Agent").
See Instruction 2.
- --------------------------------------------------------------------------------
DESCRIPTION OF SHARE CERTIFICATES ENCLOSED
- --------------------------------------------------------------------------------
Name(s) and Address(es) of Certificate(s) Enclosed
Registered Holder(s) (Attach Additional List If Necessary)
- --------------------------------------------------------------------------------
Certificate Number of
Number(s) Shares
---------
Total Shares:
- --------------------------------------------------------------------------------
Tax Identification or Social Security No.
- --------------------------------------------------------------------------------
/ / Check here if any of your certificates have been lost, stolen, mutilated or
destroyed. See Instruction 8.
-2-
<PAGE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ ACCOMPANYING INSTRUCTIONS CAREFULLY
STOCKHOLDER(S) AGREEMENT
Gentlemen:
The stockholder(s) whose signature(s) appear(s) on this Letter
of Transmittal (the "Stockholder") hereby surrenders to you, in connection with
the merger (the "Merger") of IP Acquisition Corp. (the "MergerCo"), a Delaware
corporation and a wholly owned subsidiary of InterDigital Communications
Corporation ("Parent"), a Pennsylvania corporation, with and into InterDigital
Patents Corporation (the "Company"), a Delaware corporation, the certificate(s)
listed above, which prior to the Merger represented shares of common stock,
$.001 par value (the "Shares") of the Company, in exchange for _____ shares of
Common Stock of Parent. The terms of the Merger are described in the Agreement
and Plan of Merger dated as of August 16, 1996, among Parent, the MergerCo and
the Company (the "Merger Agreement"). This Letter of Transmittal is provided for
in the Merger Agreement. By delivery of this Letter of Transmittal, the
undersigned hereby forever waives all appraisal rights under applicable Delaware
law and withdraws all written demands for appraisal, if any, with respect to the
Shares listed above.
The Stockholder hereby acknowledges receipt of a notice of the
Merger from Parent. The Stockholder hereby represents and warrants that the
Stockholder has full power and authority to surrender the certificate(s) being
transmitted herewith and that such certificate(s) are free and clear of all
liens, restrictions, charges and encumbrances and are not subject to any adverse
claims. The Stockholder hereby acknowledges that delivery of the enclosed
certificate(s) shall be effected and risk of loss and title to such
certificate(s) shall pass only upon proper delivery thereof to you.
All authority herein conferred or agreed to be conferred shall
survive the death or incapacity of the Stockholder, and any obligation of the
Stockholder hereunder shall be binding upon the heirs, personal representatives,
successors and assigns of the Stockholder.
Subject to the Merger Agreement and the proper completion of
this Letter of Transmittal, the Paying Agent, unless otherwise indicated herein
under "Special Payment Instructions" or "Special Delivery Instructions," is
hereby authorized to issue all Certificates of Common Stock of Parent in the
name of the registered holder(s) set forth above and to mail such certificates
to the address of the registered holder(s) set forth above.
Please check the appropriate boxes below and complete the
corresponding items. If no boxes are checked, all certificates will be issued in
the name of the registered holder(s) set forth above and delivered to the
address of the registered holder(s) set forth above.
-3-
<PAGE>
- --------------------------------------------------------------------------------
SPECIAL PAYMENT INSTRUCTIONS (See Instructions 1, 4, 5 and 6)
To be completed ONLY if the certificates of Common Stock of Parent to be issued
in exchange for the Shares surrendered herewith are to be issued in the name of
someone other than the registered holder(s).
/ / Issue certificate(s) to:
Name ________________________________
(Please Print)
Address _____________________________
- -------------------------------------
(Zip Code)
- -------------------------------------
(Taxpayer Identification or Social
Security No.)
SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 1, 4, 5 and 6)
To be completed ONLY if the Certificates of Common Stock of Parent to be issued
in exchange for the Shares surrendered herewith are to be issued in the name of
the registered holder(s), and mailed to someone other than the registered
holder(s), or to an address other than that of the registered holder(s) set
forth above.
/ / Mail certificate(s) to:
Name _______________________________
(Please Print)
Address ____________________________
- ------------------------------------
(Zip Code)
- ------------------------------------
- --------------------------------------------------------------------------------
The undersigned represents that he is the Stockholder as described above and
that he has read and agrees to all of the terms and conditions of the
Stockholder's agreements set forth above.
-4-
<PAGE>
SIGNATURE(S) OF STOCKHOLDER(S)
(Please Complete the Substitute W-9 Form
attached, and see the Guarantee requirements below.)
SIGN HERE: ___________________________________________________________________
SIGN HERE: ___________________________________________________________________
Additional Stockholder(s)
SIGN HERE: ___________________________________________________________________
Additional Stockholder(s)
Date: ____________________, 19__
(Must be signed by registered holder(s) exactly as name(s) appear(s) on stock
certificate(s) or on a security position listing or by person(s) authorized to
become registered holder(s) by certificates and documents transmitted herewith.
If signature is by trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation or other person acting in a fiduciary or representative
capacity, please provide the following information. See Instruction 4.)
Name(s) ______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
(PLEASE TYPE OR PRINT)
Capacity (full title) ________________________________________________________
Address ______________________________________________________________________
______________________________________________________________________________
(zip code)
Area Code and
Telephone No. ________________________________________________________________
Taxpayer Identification or
Social Security No. __________________________________________________________
Guarantee of Signature(s)
(See Instructions 1 and 4)
Name of Firm _________________________________________________________________
Address of Firm ______________________________________________________________
Authorized Signature _________________________________________________________
Title ________________________________________________________________________
Title ________________________________________________________________________
Dated: ___________________, 19__.
-5-
<PAGE>
INSTRUCTIONS
1. Guarantee of Signatures. Signatures on this Letter of
Transmittal or facsimile copies must be guaranteed by a firm which is a member
of a registered national securities exchange, a member of the National
Association of Securities Dealers, Inc. or a commercial bank or trust company
located in the United States (each an "Eligible Institution"), EXCEPT in cases
where certificates formerly representing Shares are surrendered (a) by a
registered holder who has not completed the "Special Payment Instructions" box
or the "Special Delivery Instructions" box or (b) for the account of an Eligible
Institution. See Instruction 4.
2. Delivery of Letter of Transmittal and Certificates. This
Letter of Transmittal (or facsimile thereof) is to be completed by Stockholders
in accordance with the Instructions set forth herein. Certificates formerly
representing Shares together with a Letter of Transmittal (or facsimile thereof)
which has been properly completed and duly executed and any other documents
required by this Letter of Transmittal must be received by the Paying Agent.
The method of delivery of certificates for Shares and all
other required documents is at the option and risk of the Stockholder. If
certificates for Shares are sent by mail, registered mail with return receipt
requested, properly insured, is recommended.
3. If the space provided herein is inadequate, the certificate
numbers and/or the number of Shares should be listed on a separate signed
schedule attached hereto.
4. Signatures on Letter of Transmittal: Stock Powers and
Endorsements. If this Letter of Transmittal is signed by the registered
holder(s) of the certificates surrendered hereby, the signature(s) must
correspond with the name(s) of such registered holder(s) as written on the face
of the certificates without alteration, enlargement or any change whatsoever.
If any of the certificates surrendered hereby are held of
record by two or more persons, all such persons must sign this Letter of
Transmittal.
If any of the certificates surrendered hereby are registered
in different names on different certificates, it will be necessary to complete,
sign and submit as many separate Letters of Transmittal or facsimile copies as
there are different registrations of certificates.
If this Letter of Transmittal is signed by the registered
holder(s) of the certificate(s) listed above and transmitted herewith, no
endorsements of certificates or separate stock powers are required. If this
Letter of Transmittal is signed by a person other than the registered holder(s)
of the certificate(s) listed, certificate(s) must be endorsed or accompanied by
appropriate stock powers, in either case, signed exactly as the name(s) of the
registered holder(s) appear(s) on the certificates.
If this Letter of Transmittal or any certificate or stock
power is signed by a trustee, executor, administrator, guardian,
attorney-in-fact, officer of a corporation or other person acting in a fiduciary
or representative capacity, such person should so indicate when signing, and
proper evidence satisfactory to Paying Agent of the authority of such person so
to act must be submitted.
5. Stock Transfer Taxes. Parent will pay all stock transfer
taxes, if any, imposed by any state tax law with respect to the surrender of any
certificates pursuant to this Letter of Transmittal. If, however, a certificate
for the Common Stock of Parent is to be issued for certificates formerly
representing Shares surrendered herewith in the name of any person other than
the registered holder(s), the amount of any stock transfer taxes (whether
imposed on the registered holder(s), such other person or otherwise) payable on
account of
-6-
<PAGE>
the transfer to such person will be deducted from the amount to be paid for such
certificates unless satisfactory evidence of the payment of such taxes, or
exemption therefrom, is submitted to the Paying Agent.
6. Special Payment and Delivery Instructions. If a certificate
of Common Stock of Parent is to be issued for certificates formerly representing
Shares surrendered herewith in the name of a person other than the registered
holder(s) or if such certificate of Common Stock of Parent to be issued for
certificates formerly representing Shares surrendered herewith are to be sent to
someone other than the registered holder(s) or to the registered holder(s) at an
address other than that of the registered holder(s) as shown above, the
appropriate boxes on this Letter of Transmittal should be completed.
7. Requests for Assistance or Additional Copies. Requests for
assistance may be made or additional copies of this Letter of Transmittal may be
obtained from the Paying Agent at the address or telephone numbers set forth
herein.
8. Lost Certificates. In the event that the Stockholder is
unable to deliver to the Paying Agent certificate(s) formerly representing his
or her Shares due to the mutilation, loss, theft or destruction of such
certificate(s), the Stockholder should notify the Paying Agent of this fact
promptly. The Paying Agent will instruct the Stockholder as to the steps to be
taken.
9. Substitute Form W-9. Under the federal income tax laws, the
Paying Agent will be required to withhold 20% of the amount of any payments made
to certain Stockholders pursuant to the Merger. In order to avoid such backup
withholding, a Stockholder surrendering certificates formerly representing
Shares pursuant to the Merger must provide the Paying Agent with such
Stockholder's correct taxpayer identification number ("TIN") by completing the
Substitute Form W-9 set forth below and indicate that he is not subject to
backup withholding by checking the box in Part 3. In general, if such
Stockholder is an individual, the taxpayer identification number is the Social
Security number of such individual. If the Paying Agent is not provided with the
correct taxpayer identification number, the Stockholder may be subject to a $50
penalty imposed by the Internal Revenue Service. The box in Part 2 of Substitute
Form W-9 may be checked if the Stockholder has not been issued a TIN and has
applied for a number or intends to apply for a number in the near future. If the
box in Part 2 is checked and the Paying Agent is not provided with a TIN within
60 days, the consideration payable pursuant to the Merger will be subject to 20%
backup withholding.
Certain Stockholders (including, among others, all
corporations and certain foreign individuals) are not subject to these backup
withholding and reporting requirements. In order to satisfy the Paying Agent
that a foreign individual qualifies as an exempt recipient, such Stockholder
must submit a statement (Form W-8), signed under penalties of perjury, attesting
to that individual's exempt status. Such statements can be obtained from the
Paying Agent. For further information concerning backup withholding and
instructions for completing the Substitute Form W-9 (including how to obtain a
taxpayer identification number if you do not have one and how to complete the
Substitute Form W-9 if Shares are held in more than one name), consult the
enclosed Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
Failure to complete the Substitute Form W-9 will not, by
itself, cause certificates formerly representing Shares to be deemed invalidly
surrendered, but may require the Paying Agent to withhold 20% of the amount of
any payments made to the Stockholder. Backup withholding is not an additional
federal income tax. Rather, the federal income tax liability of a person subject
to backup withholding will be reduced by the amount of tax withheld. If
withholding results in an overpayment of taxes, a tax refund may be obtained.
-7-
<PAGE>
- -------------------------------------------------------------------------------
SUBSTITUTE FORM
W-9
Department of the Treasury
Internal Revenue Service
Payer's Request for Taxpayer
Identification Number ("TIN")
Payer's Name:
INTERDIGITAL COMMUNICATIONS
CORPORATION
Part 1 - Please provide your TIN Social Security Number
for ALL Accounts and
certify by signing and dating
below. __________________________
-OR-
Note: If the account is in
more than one name, see the
chart on page 2 of the Employer Identification Number
enclosed guidelines on which
number to give the Payer. ___________________________
- -------------------------------------------------------------------------------
/ / PART 2 - Awaiting TIN (Please See Below).
- -------------------------------------------------------------------------------
/ / PART 3 - Check the box if you are not subject to backup withholding
either because you have not been notified by the Internal Revenue
Service ("IRS") that you are subject to backup withholding as a result
of a failure to report all interest or dividends or the IRS has
notified you that you are no longer subject to backup withholding.
- -------------------------------------------------------------------------------
CERTIFICATION: UNDER PENALTIES OF PERJURY, I CERTIFY THAT THE
INFORMATION PROVIDED ON THIS FORM IS TRUE, CORRECT AND COMPLETE
Signature __________________________ Date _________________, 19__
- -------------------------------------------------------------------------------
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF 20% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE MERGER.
PLEASE REVIEW ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN
PART 2 OF THE SUBSTITUTE FORM W-9.
- -------------------------------------------------------------------------------
CERTIFICATION OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify, under penalties of perjury, that a taxpayer identification
number ("TIN") has not been issued to me, and that I mailed or
delivered an application to receive a TIN to the appropriate Internal
Revenue Service Center or Social Security Administration Office (or I
intend to mail or deliver an application in the near future). I
understand that if I do not provide a TIN to the payer named above, 20
percent of all reportable payments due to me pursuant to the merger
will be withheld until I provide a TIN to the Payer and that, if I do
not provide any TIN to the Payer within 60 days, such withheld amounts
will be remitted to the IRS as backup withholding.
Signature __________________________ Date _________________, 19__
------------------------------------------------------------------------------
-8-
<PAGE>
