SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): March 12, 1998
INTERDIGITAL COMMUNICATIONS CORPORATION
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(Exact name of registrant as specified in charter)
PENNSYLVANIA 1-11152 23-1882087
(State or Other Jurisdiction of (Commission (I.R.S. Employer
Incorporation or Organization) file number) Identification
Number)
781 THIRD AVENUE, KING OF PRUSSIA, PENNSYLVANIA 19406-1409
(Address of principal executive offices)
(610) 878-7800
(Registrant's telephone number, including area code)
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Item 5. Other Events.
InterDigital Communications Corporation ("InterDigital") and Alcatel
Espana ("Alcatel"), a subsidiary of Alcatel Alsthom, entered into a strategic
agreement on March 12, 1998 based on InterDigital's Broadband Code Division
Multiple Access(TM) (B-CDMA(TM)) technology.
Under the terms of the Agreement, Alcatel will be licensed under
InterDigital's B-CDMA patents and know-how as well as certain InterDigital
trademarks. Alcatel will purchase its requirements of InterDigital's B-CDMA
ASICs (Application Specific Integrated Circuits) for embedding into certain
wireless platforms developed and marketed by Alcatel. In addition, Alcatel will
pay a technology transfer fee valued at approximately $25 million. Of this fee,
$5.4 million is to be paid in March 1998. An additional $12.6 million is
expected to be paid thereafter, primarily based on the achievement of certain
product development and commercialization milestones, in the 1998-1999 time
frame. Substantially all of the remaining fee is expected to be paid subsequent
to 1999. As part of the transaction, Alcatel was also granted an option to
purchase $22 million in InterDigital common stock on terms and conditions to
be negotiated.
The Agreement provides that InterDigital and Alcatel will work together
to develop enhanced wireless packet data handling capabilities for B-CDMA
technology and establishes a framework for joint development of third generation
applications based on B-CDMA technology. The Agreement also states that Alcatel,
with the support of InterDigital and InterDigital's other alliance partners,
will take an active role in promoting the adoption by the leading worldwide
standards bodies for wireless local loop standards and the incorporation of
principal elements of B-CDMA technology into third and fourth generation mobile
applications standards.
This Report contains forward-looking statements reflecting the
Company's current beliefs or expectations as to its the development,
standardization and commercialization of its B-CDMA products or underlying
technology, and the future actions of and relationship with Alcatel. Such
statements are subject to risks and uncertainties. The following factors, as
well as other risks detailed from time to time in the Company's SEC filings
including its Form 10-Q for the quarter ended September 30, 1997 and Form 10-K
for the year ended 1997, could cause the Company's actual results to differ
materially from the results expressed in these forward-looking statements:
difficulties or delays in the development or re-engineering or testing of
InterDigital's B-CDMA technology or the failure of the B-CDMA based equipment to
meet performance tests; the failure of Alcatel to purchase expected quantities
of B-CDMA ASICs; and the failure of Alcatel to meet its contractual obligations
to InterDigital. The Company undertakes no obligation to update these
forward-looking statements to reflect events occurring after this date. Further,
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there can be no assurance that the implementation of the Agreement by the
parties will result in the achievement of the objectives contemplated thereby.
In addition, the exercise of Alcatel's common stock purchase option is subject
to the receipt of certain InterDigital corporate approvals.
SIGNATURE
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
INTERDIGITAL COMMUNICATIONS CORPORATION
Date: March 12, 1998 By: /s/ William A. Doyle
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William A. Doyle
President
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