InterDigital /Nokia Execution Copy (04-26-06)

Confidential & Proprietary

 

EXHIBIT 10.83

CONFIDENTIAL PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED AND

FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION

Arbitration Settlement Agreement

By and between

InterDigital Communications Corporation,

InterDigital Technology Corporation

And

Nokia Corporation

Dated and Effective as of April 26, 2006

 

Page 1 of 17

--------------------------------------------------------------------------------

InterDigital /Nokia Execution Copy (04-26-06)

Confidential & Proprietary

 

ARBITRATION SETTLEMENT AGREEMENT

This Settlement Agreement is entered into and effective as of April 26, 2006 by
and between InterDigital Communications Corporation (“IDCC”), a Pennsylvania
corporation with offices at 781 Third Avenue, King of Prussia PA 19406, and
InterDigital Technology Corporation (“ITC”), a Delaware corporation having a
mailing address of Suite 105, Hagley Building, 3411 Silverside Road, Concord
Plaza, Wilmington, DE 19810, (individually and together, “InterDigital”), on the
one hand, and Nokia Corporation (“Nokia”), a Finnish corporation with offices at
Keilalahdentie 4, 02150 Espoo, Finland, on the other hand. (IDCC, ITC, and Nokia
are sometimes referred to herein individually as a “Party” or together as the
“Parties”).

BACKGROUND

 

  A. InterDigital and Nokia are parties to three interrelated contracts relating
to digital cellular technology, including the Nokia PLA, the TDD Development
Agreement, and the Master Agreement.

 

  B. In 2003, a dispute arose between InterDigital and Nokia concerning Nokia’s
royalty obligations for the sale of certain terminal unit and infrastructure
products under the Nokia PLA. Pursuant to the terms of the Master Agreement and
the Nokia PLA, the Parties submitted their dispute to Arbitration. In mid-2005,
the Arbitral Tribunal issued its Award, in which it, among other things:
(i) concluded that Nokia’s obligation under the Nokia PLA to pay royalties on
certain Period 2 terminal unit and infrastructure sales had been triggered; and
(ii) set forth the Period 1 and Period 2 royalty rates to be applied to Nokia’s
sales of such certain terminal unit and infrastructure products under the Nokia
PLA.

 

  C. In July 2005, InterDigital filed an action before the United States
District Court for the Southern District of New York to confirm the Award. In
December 2005, Judge William H. Pauley III issued the Order confirming the
Award. In January 2006, Nokia filed a Notice of Appeal to the United States
Court of Appeals for the Second Circuit.

 

  D. After the Tribunal issued the Award, a dispute between InterDigital and
Nokia arose over, among other things, the calculation and scope of Nokia’s
royalty base and resultant royalty obligation under the terms of the Award and
the Nokia PLA. In December 2005, ITC sent Nokia a Notice of Dispute, initiating
additional dispute resolution procedures. In January 2006, Nokia responded in
correspondence, identifying additional issues in dispute. On March 30, 2006,
InterDigital commenced an arbitration before the International Chamber of
Commerce related to its December 2005 Notice of Dispute (the “Second
Arbitration”). In addition, on March 24, 2006, ITC sent Nokia a Notice of
Dispute initiating additional dispute resolution procedures related to Nokia’s
purported breach of certain confidentiality obligations under the Master
Agreement (the “Confidentiality Dispute”).

 

  E.

The Parties hereto desire to settle and resolve certain past, current and future
disputes involving Nokia’s license under the InterDigital Patents for sales of
2G Covered Terminal Units, 2G Covered Infrastructure, and certain Excluded
Products and payment of royalties

 

Page 2 of 17

--------------------------------------------------------------------------------

InterDigital /Nokia Execution Copy (04-26-06)

Confidential & Proprietary

 

 

on 2G Covered Terminal Units, 2G Covered Infrastructure, and certain Excluded
Products, including, without limitation, disputes over the calculation of
Nokia’s royalty obligation under the terms of the Award by, among other things,
implementing the Award (including the rates set forth therein as to Nokia and
its Affiliates), as follows.

AGREEMENT

NOW, THEREFORE, in consideration of the mutual promises and covenants contained
herein and other good and valuable consideration, the Parties agree as follows:

 

1. DEFINITIONS. The terms set forth in Exhibit “A,” attached hereto and
incorporated herein, when used with initial capital letters in this Agreement,
shall have the meanings ascribed to them in Exhibit “A” for purposes of this
Agreement.

 

2. DISMISSAL & CESSATION OF DISPUTES. In consideration of the Parties’ releases,
acknowledgements, and agreements set forth herein, Nokia shall: (i) within 2
business days after obtaining confirmation by email from InterDigital that
InterDigital has received the Settlement Fee1, cause its counsel to file a
Notice of Withdrawal of Nokia’s Notice of Appeal of the Order; (ii) promptly
take any other steps necessary to dismiss and terminate any appeal of the Order
with prejudice; and (iii) refrain from taking any action to appeal, vacate or
otherwise attack the validity of the Award or the Order. In addition,
InterDigital shall, within 2 business days of receiving the Settlement Fee,
submit a letter to the Secretariat of the ICC International Court of Arbitration
requesting dismissal of the Second Arbitration with prejudice and thereafter
take any and all other steps required to effect the dismissal of the Second
Arbitration, and also withdraw without prejudice the Confidentiality Dispute.
Each Party shall bear its own attorneys’ fees and costs, if any, incurred in
connection with the Arbitration, the federal court proceeding that resulted in
the Order, Nokia’s previous effort to appeal the Order, the Second Arbitration,
and the Confidentiality Dispute.

 

3. RELEASES.

 

  a. InterDigital Release.

(i) In consideration of the execution and delivery of this Agreement, effective
and contingent upon InterDigital’s receipt of the Settlement Fee in accordance
with Section 5(a) herein, and subject to (3)(a)(ii) below, InterDigital Group
irrevocably releases, acquits and forever discharges Nokia Group and its
attorneys and agents from any and all Claims that InterDigital or its
predecessors, successors, Affiliates and assigns ever had, now have or hereafter
can, shall or may have, for, upon or by reason of Claims asserted or which could
have been asserted against Nokia or its Affiliates (a) relating to Nokia’s or
its Affiliates’ Protected Acts with respect to 2G Covered Terminal Units, 2G
Covered Infrastructure and Additional Released Products sold by Nokia or its
Affiliates, regardless of whether such Claims relate to an alleged infringement
of the

 

--------------------------------------------------------------------------------

1

Note to the reader-the Settlement Fee is equal to $252,000,000.00

 

Page 3 of 17

--------------------------------------------------------------------------------

InterDigital /Nokia Execution Copy (04-26-06)

Confidential & Proprietary

 

InterDigital Patents or the rights and obligations created by the Nokia PLA, the
Master Agreement, the TDD Development Agreement or the Award; (b) relating to
Nokia’s payment obligations, including royalty reporting obligations, under the
Award; (c) for any increase of, addition to, or premium of any kind charged
against the Settlement Fee (except for interest, costs and attorney’s fees that
may become due under Section 5(c)), regardless of whether such Claim is pursued
in a suit at law or equity, and regardless of the legal theory on which such
Claim is pursued (e.g., Lanham Act, antitrust law, fraud, fraudulent inducement,
or negligent misrepresentation, or contract law based on the Nokia PLA, Master
Agreement or TDD Development Agreement or under the Award); (d) for any increase
of, addition to, or premium of any kind charged against monies already paid for
2G Covered Terminal Units, 2G Covered Infrastructure, or Additional Released
Products under the Master Agreement, Nokia PLA, or TDD Development Agreement,
regardless of whether such Claim is pursued in a suit at law or equity, and
regardless of the legal theory on which such Claim is pursued (e.g. Lanham Act,
antitrust law, fraud, fraudulent inducement, or negligent misrepresentation,
contract law based on the Nokia PLA, Master Agreement or TDD Development
Agreement); or (e) for any rights relating to 2G Covered Terminal Units, 2G
Covered Infrastructure, or Additional Released Products that are different from
those acknowledged and agreed to herein, whether under the Award, Master
Agreement, Nokia PLA, or application of the terms of the Ericsson PLA, Sony
Ericsson PLA, Ericsson Side Letter, Sony Ericsson Side Letter, or the Lucent
Agreement (as defined in Section 4(a) below).

Effective and contingent upon InterDigital’s receipt of the Settlement Fee in
accordance with Section 5(a) herein, InterDigital acknowledges and agrees that
Nokia and its Affiliates will have a fully paid-up, perpetual, irrevocable,
non-exclusive, world-wide license (without the right to grant sublicenses) under
the InterDigital Patents for Protected Acts with respect to 2G Covered Terminal
Units and 2G Covered Infrastructure sold by Nokia or its Affiliates. Any entity
operating under Nokia’s or Nokia’s Affiliates’ “have made” rights for the
Protected Acts shall only have such rights with respect to (A) the entity’s
sales of 2G Covered Terminal Units and 2G Covered Infrastructure to Nokia or
Nokia’s Affiliates, (B) the entity’s sales of ASICs, software, or other
components to Nokia or Nokia’s Affiliates when such ASICs, software, or other
components are used as part of and within 2G Covered Terminal Units and 2G
Covered Infrastructure sold by Nokia or Nokia’s Affiliates, (C) the entity’s
internal use of reference designs and software to design and/or make 2G Covered
Terminal Units or 2G Covered Infrastructure sold by such entity to Nokia or
Nokia’s Affiliates, and (D) the entity’s internal use of reference designs and
software to design and/or make ASICs, software or other components when such
ASICs, software, or other components are sold to Nokia or Nokia’s Affiliates to
be used as part of and within 2G Covered Terminal Units and 2G Covered
Infrastructure sold by Nokia or Nokia’s Affiliates.

In addition, effective and contingent upon InterDigital’s receipt of the
Settlement Fee in accordance with Section 5(a) herein, InterDigital acknowledges
and agrees

 

Page 4 of 17

--------------------------------------------------------------------------------

InterDigital /Nokia Execution Copy (04-26-06)

Confidential & Proprietary

 

that Nokia and its Affiliates will have a fully paid-up, irrevocable,
non-exclusive, world-wide release under the InterDigital Patents for Protected
Acts with respect to Additional Released Products. Any entity that made
Additional Released Products designed by or for Nokia or Nokia’s Affiliates will
also have a fully paid-up, irrevocable, not-exclusive, world-wide release under
the InterDigital Patents with respect to (A) the entity’s sales of such
Additional Released Products to Nokia or Nokia’s Affiliates, (B) the entity’s
sales of ASICs, software, or other components to Nokia or Nokia’s Affiliates
when such ASICs, software, or other components were used as part of and within
the Additional Released Products sold by Nokia or Nokia’s Affiliates, (C) the
entity’s internal use of reference designs and software to design and/or make
the Additional Released Products sold by such entity to Nokia or Nokia’s
Affiliates, and (D) the entity’s internal use of reference designs and software
to design and/or make ASICs, software, or other components when such ASICs,
software, or other components are sold to Nokia or Nokia’s Affiliates to be used
as part of and within Additional Released Products sold by Nokia or Nokia’s
Affiliates.

InterDigital also acknowledges and agrees that, effective and contingent upon
InterDigital’s receipt of the Settlement Fee in accordance with Section 5(a),
Nokia’s and its Affiliates’ customers have a release or will receive a
pass-through license (as appropriate) from InterDigital with respect to 2G
Covered Terminal Units and 2G Covered Infrastructure sold by Nokia or its
Affiliates, and are released by InterDigital with respect to Additional Released
Products sold by Nokia or its Affiliates to such customers. Such pass-through
license or release (as appropriate) shall apply only to 2G Covered Terminal
Units, 2G Covered Infrastructure, and Additional Released Products in each case
sold by Nokia or its Affiliates to their customers, and will not apply to any
Excluded Product that is not an Additional Released Product or to any third
party products, including the customer’s products, even if such products are
used in combination with 2G Covered Terminal Units, 2G Covered Infrastructure,
and Additional Released Products in each case sold by Nokia or its Affiliates
(e.g., if a third party handset is used in combination with a Nokia base
station, the third party handset will not be licensed hereunder, and no third
party will be licensed to the combination of any third party handset and the
Nokia base station, but the Nokia base station remains licensed to Nokia and its
customers).

The foregoing release and license do not include a release or license with
respect to subject matter other than that expressly set forth above and do not
apply to any third party products even when used in combination with 2G Covered
Terminal Units, 2G Covered Infrastructure, and Additional Released Products in
each case sold by Nokia or its Affiliates.

(ii) The release, acknowledgement, license and agreement described in
Section 3(a)(i) above do not extend, by implication or otherwise, to (A) any
products other than 2G Covered Terminal Units, 2G Covered Infrastructure and
Additional Released Products in each case sold by Nokia or its Affiliates,
including without limitation, any Excluded Product and any portion of any

 

Page 5 of 17

--------------------------------------------------------------------------------

InterDigital /Nokia Execution Copy (04-26-06)

Confidential & Proprietary

 

Multi-Mode Product (including any portion compliant with a 2G Covered Standard)
sold by Nokia or its Affiliates that is not an Additional Released Product;
(B) any ASICs, software, or other components except when such ASICs, software,
or other components are used as part of and within 2G Covered Terminal Units, 2G
Covered Infrastructure or Additional Released Products sold by Nokia or its
Affiliates and licensed or released in Section 3(a)(i) above; (C) any reference
designs or software except for use of such reference designs or software to
design and/or make 2G Covered Terminal Units, 2G Covered Infrastructure or
Additional Released Products sold by Nokia or its Affiliates and licensed or
released in Section 3(a)(i) above, or any ASICS, software or other components
used as part of and within such 2G Covered Terminal Units, 2G Covered
Infrastructure, or Additional Released Products; (D) any right to grant
sublicenses; or (E) the rights and obligations under Sections 2.1, 3.5, 4, 8.1,
8.2 and 8.3 of the TDD Development Agreement and paragraphs 7 and 10 of
Amendment No. 1 to the TDD Development Agreement.

 

  b. Nokia Release.

(i) In consideration of the execution and delivery of this Agreement, effective
and contingent upon InterDigital’s receipt of the Settlement Fee in accordance
with Section 5(a) herein, and subject to 3(b)(ii) below, Nokia Group irrevocably
releases, acquits and forever discharges InterDigital Group and its attorneys
and agents from Claims that Nokia or its predecessors, successors, Affiliates
and assigns ever had, now have or hereafter can, shall or may have, for, upon or
by reason of Claims asserted or which could have been asserted against
InterDigital or either or their Affiliates (a) that the Award is invalid,
improper, subject to vacatur or otherwise subject to any challenge whatsoever at
law, equity or by virtue of Nokia’s MFL or other rights under the Nokia PLA,
Master Agreement and TDD Development Agreement, (b) for any refund of, return,
recovery, credit or set-off against, offset, or reduction of any kind of the
Settlement Fee or monies already paid under the Master Agreement, Nokia PLA, TDD
Development Agreement or this Agreement, regardless of whether such Claim is
pursued in a suit at law or equity, and regardless of the legal theory on which
such Claim is pursued (e.g. Lanham Act, antitrust law, fraud, fraudulent
inducement, or negligent misrepresentation, contract law based on the Nokia PLA,
Master Agreement, TDD Development Agreement or under the Award), (c) for any
rights relating to 2G Covered Terminal Units, 2G Covered Infrastructure, or
Additional Released Products that are different from those acknowledged and
agreed to herein, whether under the Award, Master Agreement, or Nokia PLA, or
(d) for any rights relating to or benefits arising from the application of the
terms of the Ericsson PLA, Sony Ericsson PLA, Sony Ericsson Side Letter, or
Ericsson Side Letter, except as expressly provided in Section 4(d) of this
Agreement.

(ii) Except as set forth below in 3(b)(iii), the release and acknowledgement
described in Section 3(b)(i) above does not extend, by implication or otherwise,
to

 

Page 6 of 17

--------------------------------------------------------------------------------

InterDigital /Nokia Execution Copy (04-26-06)

Confidential & Proprietary

 

any Claims: (a) [***]; (b) with respect to the rights and obligations under
Sections 2.1, 3.5, 4, 8.1, 8.2 and 8.3 of the TDD Development Agreement and
paragraphs 7 and 10 of Amendment No. 1 to the TDD Development Agreement;
(c) that Nokia has asserted in the lawsuit currently pending in the United
States District Court for the District of Delaware captioned Nokia Corporation
v. InterDigital Communications Corporation and InterDigital Technology
Corporation, Case No. 05-16-JJF (“the Delaware Action”); (d) that Nokia has
asserted in the action currently pending in the United Kingdom High Court of
Justice, Chancery Division, Patents Court captioned Nokia Corporation and
InterDigital Technology Corporation, Claim No. HC 05 C02026 (the “UK 3G
Action”); or (e) that Nokia has asserted in Claim No. HC04 C01952 in the High
Court of Justice of England and Wales, Chancery Division, Patents Court
initiated by Nokia against InterDigital, including the application to the Court
of Appeal, Case No. A3/2004/2639, Chancery Division, Patents Court, captioned
Nokia Corporation v. InterDigital Technology Corporation (the “UK 2G Action”).

(iii) Notwithstanding Section 3(b)(ii) above, the release and acknowledgement
described in Section 3(b)(i) shall apply to any Claim that all or any portion(s)
of the [***] under the Nokia PLA, Master Agreement and/or TDD Development
Agreement constitute [***] of any such amounts. Nokia and its Affiliates agree
that no portion of the [***] under the Master Agreement, the Nokia PLA, and/or
the TDD Development Agreement constitute [***] of any such amounts, and will not
allege in the Delaware Action or in any other Proceeding, that all or any
portion of the [***] under the Master Agreement, the Nokia PLA, and/or the TDD
Development Agreement [***], a basis for [***], or [***] of any such amounts.

 

4. OTHER COVENANTS

 

  a. Rights Under Prior Agreements Terminated. The Parties understand and agree
that, as of the Effective Date and contingent upon InterDigital’s receipt of the
Settlement Fee in accordance with Section 5(a) herein, all of the Parties’
rights and obligations under the Award and the Nokia PLA shall have terminated,
and, with respect to the Award, have been satisfied and discharged by this
Agreement and, with respect to the Nokia PLA, have been satisfied and discharged
by this Agreement and the UK Settlement Agreement. Further, Nokia acknowledges,
represents, and warrants that it has not elected to accept any third party
license agreement under Section 3.1.2 of the Nokia PLA as of the Effective Date,
and InterDigital acknowledges, represents, and warrants that it has not executed
any Major Competitor License Agreement (as that term is used and defined in the
Master Agreement) other than those deemed to be Major Competitor License
Agreements in the Award. Notwithstanding the foregoing, IDCC’s subsidiary,
Tantivy Communications, Inc., entered into a settlement agreement, which
included a patent license, on November 1, 2005, with Lucent Technologies Inc.
(the “Lucent Agreement”). InterDigital represents and warrants

 

--------------------------------------------------------------------------------

*** Confidential material which has been omitted and filed separately with the
Securities and Exchange Commission.

 

Page 7 of 17

--------------------------------------------------------------------------------

InterDigital /Nokia Execution Copy (04-26-06)

Confidential & Proprietary

 

       that the license granted in the Lucent Agreement (i) licenses only those
patents that were involved in the litigation between Lucent Technologies Inc.
and Tantivy Communications, Inc., (ii) only covers certain Lucent infrastructure
products compliant with “cdma2000,” and (iii) defines “cdma2000” as “a family of
IMT-2000 standards, as amended, which evolved from narrow band CDMA technologies
(e.g., IS-95 and cdmaOne) and, include without limitation CDMA2000 1X, CDMA 1X
EV-DO, CDMA-2000 1X EV-DV and CDMA2000 3X.”

 

  b. No Admission of Liability or Limitations on Patent Challenges. By entering
into this Agreement, Nokia and its Affiliates do not make any admission as to
the validity, scope, essentiality, enforceability, or value of any InterDigital
Patent nor do Nokia or any of its Affiliates admit or agree that any product of
Nokia or its Affiliates infringes any claim of any InterDigital Patent. By
entering into this Agreement, InterDigital and its Affiliates do not make any
admission as to the invalidity, scope, non-essentiality, unenforceability, or
value of any InterDigital Patent nor do InterDigital or any of its Affiliates
admit or agree that any products of Nokia or its Affiliates (including those
released or licensed hereunder) do not infringe any claim of any InterDigital
Patent. Further, notwithstanding anything to the contrary, nothing in any
agreements between the parties shall preclude or limit in any way the ability of
Nokia or its Affiliates to institute, participate as an adverse party in,
otherwise provide material support or continue their participation in or support
to, any Proceeding anywhere in the world challenging any [***], including
seeking to re-examine, declare not infringed, invalid, unenforceable or
non-essential, or limit or construe the scope of any claim of any [***]. This
provision shall in no way, however, eliminate or reduce, or expand or increase,
any confidentiality obligations or restrictions (including those regarding the
use of confidential information) that either party may have under any agreement
(including those obligations and restrictions set forth in Article 5 of the
Master Agreement) or court order.

 

  c. Audit Rights. Contingent upon InterDigital’s receipt of the Settlement Fee
in accordance with Section 5(a) herein, neither Party shall take any action
after the Effective Date to pursue an audit or inspection of the other Party’s
or the other Party’s Affiliates’ books and records for any purpose relating to
2G Covered Terminal Units, 2G Covered Infrastructure or Additional Released
Products sold by Nokia or its Affiliates, or to InterDigital’s billing relating
to the TDD development project. This Section shall not be deemed to preclude
discovery in any Proceeding between the Parties to the extent such discovery is
otherwise available. Notwithstanding the above, as to any entity that is created
or comes into existence after the Effective Date and that Nokia claims as an
Affiliate under this Agreement, InterDigital shall have the right to obtain an
audit only as to the questions of whether the claimed Affiliate has [***], or as
to what [***]. In addition, in the event that [***] pursuant to Section [***],
InterDigital may request an audit at its own expense, and in accordance with the
provisions of this Section 4(c) regarding compliance with Section [***], which
audit

 

--------------------------------------------------------------------------------

*** Confidential material which has been omitted and filed separately with the
Securities and Exchange Commission.

 

Page 8 of 17

--------------------------------------------------------------------------------

InterDigital /Nokia Execution Copy (04-26-06)

Confidential & Proprietary

 

       will [***] for Nokia’s 2G Covered Terminal Units or 2G Covered
Infrastructure, [***], and the [***] and regarding compliance with Section
[***], which audit will only address whether an [***] described in Section
[***], what [***] by Nokia, and the [***] of 2G Covered Terminal Units and 2G
Covered Infrastructure [***]. Similarly, as to [***] the Effective Date and that
InterDigital or one of its Affiliates claims [***] under this Agreement, Nokia
shall have the right to obtain an audit only as to the questions of [***] by
InterDigital or one of its Affiliates, or as to the [***] of the [***] and the
[***] of InterDigital or one of its Affiliates to [***]. The auditing party
shall be entitled to audit, in each case at its own expense, no more than once
per calendar year, following fifteen (15) business days prior notice, using an
independent certified public accountant or independent patent licensing
professional that has signed an appropriate and reasonable nondisclosure
agreement with the Party being audited. Any information obtained during the
course of the audit shall be held in confidence by the auditing Party and the
auditor except as necessary to enforce this agreement.

 

  d. [***].

Contingent upon InterDigital’s receipt of the Settlement Fee in accordance with
Section 5(a) herein, in the event that InterDigital sues Nokia for patent
infringement based upon infringement of an InterDigital Patent by Nokia’s or its
Affiliates’ [***] (other than subsequent to a declaratory judgment claim
regarding non-infringement in the United States or similar claim regarding
infringement or lack thereof in another jurisdiction brought by Nokia or its
Affiliates specifically concerning [***]), Nokia can claim the benefit of
whatever [***], and Nokia shall be free to litigate in any such infringement
action Nokia’s position that the [***], with respect to which InterDigital may
contest. If the court finds that the [***], InterDigital agrees that (regardless
of any definitions, terms, or conditions of this Agreement to the contrary) the
release from InterDigital and Nokia’s paid-up license (both set out in
Section 3(a)(i) above) extend to and cover [***] by Nokia, but such license,
with regard to [***], shall be altered as follows: [***] shall apply to Nokia’s
license for [***]. Any benefits obtained by Nokia under this Section 4(d) shall
not alter in any way Nokia’s rights with regard to 2G Covered Terminal Units or
Additional Released Products.

In the event that, prior to a declaratory judgment claim or similar claim as
described above or a court action involving Nokia as described above, the scope
of the [***], is interpreted in a final, non-appealable and binding judicial or
arbitral determination then InterDigital shall promptly notify Nokia of such
event.

Nothing in this Section 4(d) shall affect (i) Nokia’s release to InterDigital,
(ii) Nokia’s payment obligations, as set forth in Section 5 herein, or
(iii) Nokia’s rights with regard to Infrastructure under Section 4 of the TDD
Development Agreement. Nothing in this Section shall be construed as an
acknowledgment or admission from InterDigital that the [***].

 

--------------------------------------------------------------------------------

*** Confidential material which has been omitted and filed separately with the
Securities and Exchange Commission.

 

Page 9 of 17

--------------------------------------------------------------------------------

InterDigital /Nokia Execution Copy (04-26-06)

Confidential & Proprietary

 

  e. Use of this Agreement. Contingent upon InterDigital’s receipt of the
Settlement Fee in accordance with Section 5(a) herein, InterDigital acknowledges
and agrees that it will not [***] in any manner in the Delaware Action, the UK
2G Action, or the UK 3G Action to challenge [***] currently being asserted in
those actions (or, in the case of the UK 3G Action, a future claim that any or
all of the InterDigital Patents currently in the UK 3G action are invalid), or
to otherwise [***] in those actions from [***], but InterDigital may [***] for
the limited purpose of [***] of this Agreement to support [***]. Nokia
acknowledges and agrees that it will not use this Agreement in any manner in the
Delaware Action, the UK 2G Action, or the UK 3G Action in an effort to [***],
but Nokia may use this Agreement for the limited purpose of [***] this Agreement
to support [***] by InterDigital. Notwithstanding the foregoing, neither Party
shall offer into evidence or otherwise disclose to the fact-finder at any trial
between or involving both InterDigital and Nokia (other than in an action for
breach of this Agreement and other than by court order) [***]. In the event that
a court orders that the [***] be offered into evidence or otherwise disclosed to
the fact-finder at any trial, either Party may offer into evidence or otherwise
disclose to the fact-finder the terms, including [***]. In addition, in the
event that a court orders that the terms, including [***] be offered into
evidence or otherwise disclosed to the fact-finder at any trial, either Party
may offer into evidence or otherwise disclose to the fact-finder the amount or
approximate [***].

 

  f. Agreement Not to Pursue Infringement Claims. Contingent upon InterDigital’s
receipt of the Settlement Fee in accordance with Section 5(a) herein,
InterDigital and its Affiliates agree not to initiate or assert any patent
infringement claims in any action, litigation, arbitration, or other legal or
administrative proceeding (including a United States International Trade
Commission action or comparable actions in any other jurisdictions around the
world) against Nokia or its Affiliates before [***], other than in response to a
future affirmative action or claim initiated or asserted on or after the
Effective Date by Nokia or its Affiliates concerning the validity or
infringement of InterDigital Patents (but specifically excepting any [***] of:
(i) [***]; or (ii) [***]). InterDigital may, at its option, file such responsive
action, litigation or proceeding in any forum of InterDigital’s choice, subject
to the rights of Nokia or its Affiliates to contest personal jurisdiction or
seek to dismiss, stay, or transfer the action.

 

  g. Potential Future Royalties on Excluded Products. Contingent upon
InterDigital’s receipt of the Settlement Fee in accordance with Section 5(a)
herein, in the event that, after January 1, 2007, any of Nokia’s or its
Affiliates’ Excluded Products sold during the period between the Effective Date
and December 31, 2006, are found to infringe any InterDigital Patent and a
royalty rate or amount is imposed on such product sales,

 

--------------------------------------------------------------------------------

*** Confidential material which has been omitted and filed separately with the
Securities and Exchange Commission.

 

Page 10 of 17

--------------------------------------------------------------------------------

InterDigital /Nokia Execution Copy (04-26-06)

Confidential & Proprietary

 

       the Parties agree that Nokia and its Affiliates will be entitled to a
[***] for such product sales and that InterDigital [***] with respect to such
product sales; provided, however, InterDigital may attempt to establish Nokia’s
[***] related to sales that occurred after such period. Except as necessary to
enforce InterDigital’s agreement not [***] or to enforce [***], the Parties
agree and acknowledge that neither Party may use or refer to this provision in
any way in any action seeking damages from Nokia or any of its Affiliates for
patent infringement. In no event shall either Party offer into evidence or
otherwise disclose to the fact finder at any trial between or involving both
InterDigital and Nokia (other than in an action for breach of this Agreement and
other than by court order) the existence of the [***] provided in this
Section 4(g) and such [***] shall be [***].

 

5. PAYMENTS

 

  a. Nokia shall pay to ITC the Settlement Fee on or before April 28, 2006, as
further provided for in this Section 5. The Parties agree that this payment by
Nokia is (i) unconditional and not refundable, and (ii) not subject to any
deductions, additions, set-offs, increases, interest (except as set forth in
Section 5(c) herein), offsets, premiums, discounts (including, without
limitation, prepayment), credits (including, without limitation, any TDD Credit
or Licensing Credit under Section 2.1.3 of the Nokia PLA or Period 1 Credit
under the Nokia PLA), or withholdings (other than tax withholding as described
in Section 6.3 of the Master Agreement).

 

  b. Nokia shall pay the Settlement Fee to ITC in United States currency by wire
transfer to the following account:

ABA #[***]

PNC Bank

300 Delaware Avenue

Wilmington, Delaware 19801

USA

Swift Code: [***]

Credit to: InterDigital Facility Company

Account # [***]

 

  c. Other than any tax withholdings permitted under Section 6.3 of the Master
Agreement, if the payment of the Settlement Fee is not made when due, it shall
bear interest at the [***], from the date that such amount was payable under
this Section 5 until the date upon which such payment is made. In any action to
collect past due amounts which have not been paid in accordance with this
Section 5, Nokia shall reimburse InterDigital for InterDigital’s costs and
reasonable attorneys’ fees incurred in such action.

 

--------------------------------------------------------------------------------

*** Confidential material which has been omitted and filed separately with the
Securities and Exchange Commission.

 

Page 11 of 17

--------------------------------------------------------------------------------

InterDigital /Nokia Execution Copy (04-26-06)

Confidential & Proprietary

 

6. CONFIDENTIALITY OF TERMS. Unless otherwise required by law or court or
arbitral order, the Parties shall maintain as strictly confidential this
Agreement and any proprietary information disclosed under, or as a result of the
negotiation or performance of, this Settlement Agreement. Without limiting the
foregoing, each Party acknowledges all pre-existing obligations of
confidentiality (including in particular the separately executed Nondisclosure
Agreement governing the communications made in connection with the negotiation
and execution of this Agreement) and agree that they continue to be bound
thereby in accordance with their terms. Notwithstanding the foregoing, following
the exchange of fully-executed versions of this Agreement, either Party may
(i) issue a press release discussing the execution of this Agreement and the
material terms hereof, (ii) provide this Agreement or the contents thereof in
confidence to other licensees to the extent required by most favored licensee
clauses (but only to the extent such licensee is bound by a non-disclosure
agreement), and (iii) disclose such information as may be necessary to satisfy
SEC, NASDAQ, or other statutory, regulatory, taxation, or administrative
requirements, to its accountants, or in a Proceeding between the Parties.

 

7. REPRESENTATIONS, WARRANTIES AND DISCLAIMERS

 

  a. InterDigital and its Affiliates represent and warrant to Nokia and its
Affiliates that InterDigital is the sole and lawful owner of all rights, title
and interest in and to each and every Claim and other matters which its purports
to release herein and that InterDigital has not heretofore assigned or
transferred to any person or entity any right, title or interest in the released
matters.

 

  b. Nokia and its Affiliates represent and warrant to InterDigital and its
Affiliates that Nokia is the sole and lawful owner of all rights, title and
interest in and to each and every Claim and other matters which it purports to
release herein and that Nokia has not heretofore assigned or transferred to any
person or entity any right, title or interest in the released matters.

 

  c. Each Party represents and warrants to the other Party that (i) the person
signing this Agreement on its behalf is fully authorized and legally competent
to execute and deliver this Agreement on its behalf; (ii) it is executing this
Agreement wholly upon its own volition, individual judgment, belief, and
knowledge; (iii) this Agreement is made without reliance upon any statement or
representation of any other Party, except those representations and warranties
expressed in this Agreement; (iv) the performance of this Agreement and the
transactions contemplated hereunder have been fully authorized by all necessary
corporate and other action; and (v) it is executing this Agreement after
consultation with its own independent legal counsel.

 

  d. This Agreement shall not be construed against any of the Parties hereto as
an admission or concession as to the value of any Claims resolved herein.

 

  e. Each Party represents and warrants to the other Party that the Settlement
Fee, this Agreement, and all prior payments made under the Nokia PLA, TDD
Development Agreement, and Master Agreement are in no way based upon any
statement by InterDigital or its Affiliates regarding the validity,
essentiality, and/or infringement of any InterDigital Patent.

 

Page 12 of 17

--------------------------------------------------------------------------------

InterDigital /Nokia Execution Copy (04-26-06)

Confidential & Proprietary

 

  f. Nokia represents and warrants that, as of the Effective Date, the only
suits, arbitrations (including dispute resolution notices under the Master
Agreement) or actions initiated by Nokia and currently pending between the
Parties or their Affiliates are: (i) the Delaware Action; (ii) Nokia’s appeal to
the United States Court of Appeals for the Second Circuit of the Order
confirming the Award; (iii) the UK 2G Action; and (iv) the UK 3G Action.
InterDigital represents and warrants that, as of the Effective Date, the only
suits, arbitrations (including dispute resolution notices under the Master
Agreement) or actions initiated by InterDigital and currently pending between
the Parties or their Affiliates are: (v) the Second Arbitration and (vi) the
Confidentiality Dispute.

 

8. MISCELLANEOUS

 

  a. Subject only to 8(b) and (c) below and the applicability of the
pass-through rights granted in Section 3(a) above, this Agreement is personal to
the Parties hereto and their respective Affiliates and may not be assigned or
transferred, nor may any license or release granted hereunder be assigned or
transferred whether by operation of law or otherwise, and any attempt to make
any such assignment or transfer shall be null and void.

 

  b. If, after the Effective Date, InterDigital and/or its Affiliates assigns or
transfer any of the InterDigital Patents to third parties, it may do so only on
the condition that (i) the assigned or transferred patents remain fully
encumbered by the license and release described in this Agreement, which license
and release shall remain valid and effective as to the patent once assigned or
transferred and (ii) InterDigital provides the assignee or transferee written
notice of this condition prior to effecting the assignment or transfer.

 

  c. Contingent upon InterDigital’s receipt of the Settlement Fee in accordance
with Section 5(a) herein, if, after the Effective Date, Nokia assigns or
transfers all or substantially all of any of its [***] of any of these [***] in
the normal course of Nokia’s business going forward, provided that the [***] are
identified in Nokia’s public documents, e.g., website, SEC filings, etc.) or
assigns or transfers all or substantially all of its [***] in the normal course
of Nokia’s business going forward, provided that the [***] is identified in
Nokia’s public documents, e.g., website, SEC filings, etc.) to a third party
(i.e., a party other than Nokia or one of its Affiliates), in either case
through merger, divestiture of assets, the sale of shares, or otherwise, so that
such divested [***] is not an Affiliate hereunder, Nokia may assign or transfer
the paid-up license applicable to such transferred [***] to the acquiring entity
only as to those Protected Acts undertaken by the acquiring entity for the [***]
and in accordance with this Section c. Nokia shall be deemed to have assigned or
transferred [***] to the third party acquiring entity if the assignment or
transfer represents [***].

 

--------------------------------------------------------------------------------

*** Confidential material which has been omitted and filed separately with the
Securities and Exchange Commission.

 

Page 13 of 17

--------------------------------------------------------------------------------

InterDigital /Nokia Execution Copy (04-26-06)

Confidential & Proprietary

 

In the event that the third party acquiring entity at the time of the assignment
or transfer is a licensee of InterDigital for 2G Covered Terminal Units or 2G
Covered Infrastructure, whichever is applicable based on the [***] being
transferred, Nokia’s paid-up license may only be assigned or transferred to such
third party acquiring entity under the following conditions: (a) the third party
acquiring entity agrees in writing prior to the assignment or transfer that it
will [***]; and (b) the [***].

In the event that the third party acquiring entity at the time of assignment or
transfer is not a licensee of InterDigital, the paid-up license being
transferred by Nokia [***] described in the [***].

In addition, whether or not the third party acquiring entity at the time of the
assignment or transfer is a licensee of InterDigital for 2G Covered Terminal
Units or 2G Covered Infrastructure, the paid-up license assigned or transferred
by Nokia shall only apply (i) to Protected Acts of the third party acquiring
entity on and after the acquisition date and (ii) to the [***] that was actually
obtained from Nokia, [***]. Nokia’s paid up license will be [***] by such
assignment or transfer. For example, if Nokia sells [***] to a third party and
during the [***] of 2G Covered Terminal Units, then the paid-up license assigned
or transferred by Nokia to the third party shall only apply, [***] of 2G Covered
Terminal Units made, used, sold, etc. by the third party, and Nokia’s paid up
license will be [***] by such assignment or transfer. Further, the transferred
or assigned paid-up license shall not extend to any larger operations into which
such assigned or transferred business group may be subsumed or any subsequent
additions or expansion made to such business group by the acquiring entity.

Notwithstanding anything to the contrary, (i) Nokia may assign or transfer its
paid-up license pursuant to this provision to a third party [***] and (ii) Nokia
may not transfer the rights under Section 4(d) herein to a third party.

 

  d. In the event that (i) Nokia acquires an entity after the Effective Date
that meets the definition of Affiliate, but that does not constitute a Nokia
Affiliate because the acquired entity had, in the [***] and (ii) Nokia merges
the acquired entity into Nokia or one of Nokia’s Affiliates, then the licenses
set forth in Section 3(a)(i) shall not extend [***] to the number of unit sales
by Nokia or its Affiliates of 2G Covered Terminal Units and/or 2G Covered
Infrastructure that were [***]; provided however, the licenses set forth in
Section 3(a)(i) shall continue to cover all other unit sales by Nokia or its
Afilliates of 2G Covered Terminal Units and/or

 

--------------------------------------------------------------------------------

*** Confidential material which has been omitted and filed separately with the
Securities and Exchange Commission.

 

Page 14 of 17

--------------------------------------------------------------------------------

InterDigital /Nokia Execution Copy (04-26-06)

Confidential & Proprietary

 

       2G Covered Infrastructure, including [***] unit sales of 2G Covered
Terminal Units and/or 2G Covered Infrastructure by Nokia or Nokia’s Affiliates
that may be attributable to [***]. For example, if Nokia acquires and merges
into itself an entity that sold [***], then [***] 2G Covered Terminal Units sold
by Nokia or its Affiliates [***] after the acquisition would be unlicensed under
this Agreement, but [***] unit sales of 2G Covered Terminal Units sold by Nokia
or its Affiliates each calendar year after the acquisition would continue to be
licensed under this Agreement.

In the event that (i) Nokia acquires an entity after the Effective Date that
meets the definition of Affiliate, but that does not constitute a Nokia
Affiliate because the acquired entity had, in the full calendar year prior to
its acquisition, [***] and (ii) Nokia operates the acquired entity as a separate
company (i.e., does not merge the entity into Nokia or one of Nokia’s
Affiliates), then any Protected Acts performed by the acquired entity with
regard to 2G Covered Terminal Units and 2G Covered Infrastructure shall not
benefit from any of the licenses granted to Nokia and Nokia’s Affiliates under
this Agreement.

 

  e. No express or implied waiver of any breach of any term, condition or
obligation of this Agreement shall be construed as a waiver of any subsequent
breach of that term, condition or obligation or of any other term, condition or
obligation of the same or of a different nature.

 

  f. This Agreement shall be governed by and construed in accordance with New
York law, without regard to conflict of laws principles. The exclusive
jurisdiction and venue for any and all litigation over any alleged breach of
this Agreement shall be the United States District Court, Southern District of
New York (except that the provisions of this Agreement may be asserted as a
defense or counterclaim in an action properly filed elsewhere subject to the
restrictions on the manner of use of the Agreement contained herein). In
particular, this provision will have no impact on any pending litigation between
the Parties, namely the Delaware Action, the UK 2G Action, or the UK 3G Action.

 

  g. The provisions of this Agreement shall be severable, and if any of them are
held invalid or unenforceable, then that provision shall be construed to the
maximum extent permitted by law. The invalidity or unenforceability of one
provision shall not necessarily affect any other.

 

  h. Each Party shall be responsible for all actions required of its Affiliates
hereunder and shall be liable to the other Party for any adverse action or
failure to perform by any of such Affiliates.

 

  i. Each Party shall bear its own attorney’s fees and related expenses incurred
by or on behalf of said Party in connection with the negotiation of this
Agreement.

 

--------------------------------------------------------------------------------

*** Confidential material which has been omitted and filed separately with the
Securities and Exchange Commission.

 

Page 15 of 17

--------------------------------------------------------------------------------

InterDigital /Nokia Execution Copy (04-26-06)

Confidential & Proprietary

 

  j. This Agreement, the Award, the Master Agreement, the TDD Development
Agreement, and the Nokia PLA constitute the entire agreement and understanding
between the Parties as to the subjects addressed in this document, and supersede
all prior agreements, understandings, discussions and other communications, if
any, between the Parties with respect to the subject matter thereof, whether
oral or written. In the event of a conflict between the terms of this Agreement
and the Award, Master Agreement, and/or Nokia PLA, this Agreement shall control.
In addition, the Parties hereby acknowledge the contemporaneous execution of the
UK Settlement Agreement and agree that, to the extent there is deemed to be any
conflict or inconsistency between the releases and licenses (or exclusions
thereto) granted to Nokia in this Agreement for 2G Covered Terminal Units, 2G
Covered Infrastructure, or Additional Release Products and the releases and
licenses (and exclusions thereto) granted to Nokia in the UK Settlement
Agreement, the terms and conditions of this Agreement shall control with regard
to 2G Covered Terminal Units, 2G Covered Infrastructure, and Additional Released
Products.

 

  k. No modification or amendment to this Agreement will be effective unless it
is in writing and executed by authorized representatives of the Parties, nor
will any waiver of any rights be effective unless assented to in writing by the
Party to be charged.

 

  l. Each Party to this Agreement agrees to perform any further acts and execute
and deliver any further documents that may be reasonably necessary to carry out
the provisions of this Agreement.

 

  m. This Agreement and any counterpart original thereof may be executed and
transmitted by facsimile or by emailed portable document format (“.PDF”)
document. The facsimile and/or .PDF signature shall be valid and acceptable for
all purposes as if it were an original. This Agreement may be executed in
multiple counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument. In making proof of
this Agreement, it shall not be necessary to produce or account for more than
one such counterpart.

 

Page 16 of 17

--------------------------------------------------------------------------------

InterDigital /Nokia Execution Copy (04-26-06)

Confidential & Proprietary

 

IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be executed
by its duly authorized officer as of the date first set out above.

 

Nokia Corporation    InterDigital Communications Corporation By:  

/s/ Ilkka Rahnasto /s/ Auli Luukkanen

   By:  

/s/ William Merritt

Name:   Ilkka Rahnasto Auli Luukkanen    Name:   William Merritt Title:   Vice
President, IPR Director IPR Strategy & Development    Title:   President Date:  
April 27, 2006    Date:   April 27, 2006 InterDigital Technology Corporation   
  By:  

/s/ William Merritt

     Name:   William Merritt      Title:   President & CEO      Date:   April
27, 2006     

 

Page 17 of 17