INTERDIGITAL COMMUNICATIONS CORP
AMENDMENT NO. 1 TO NOKIA TDD DEVELOPMENT AGREEMENT
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<TYPE>EX-10.56
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<FILENAME>dex1056.txt
<DESCRIPTION>AMENDMENT NO. 1 TO NOKIA TDD DEVELOPMENT AGREEMENT
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                                                                   EXHIBIT 10.56

CONFIDENTIAL PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED AND SEPARATELY FILED
WITH THE COMMISSION

                             PROPRIETARY INFORMATION

                AMENDMENT No. 1 to the TDD DEVELOPMENT AGREEMENT

THIS AMENDMENT AGREEMENT No. 1 is entered into as of September 30, 2001 between
and among InterDigital Communications Corporation, a corporation organized and
existing under the laws of the Commonwealth of Pennsylvania, with offices at 781
Third Avenue, King of Prussia, Pennsylvania 19406 ("IDC"), InterDigital
Technology Corporation, a Delaware corporation with offices at 300 Delaware
Avenue, Suite 527, Wilmington, Delaware ("ITC" and, together with IDC,
"InterDigital"), and Nokia Corporation, a corporation existing under the laws of
the Country of Finland, with offices at [**] Finland ("Nokia").

                                   Background

Nokia and IDC entered into a Master Agreement, Patent License Agreement, and a
TDD Development Agreement, each effective as of January 29, 1999. The parties
wish to amend the Master Agreement and TDD Development Agreement as provided
herein.

NOW, THEREFORE, in consideration of the covenants and promises made herein, the
parties, intending to be legally bound, hereby agree as follows:

                                    Agreement

1.   New Definitions. The following new definitions are added to the Master
     Agreement:

     "2a. "Base TDD Project" means the TDD Project described in Exhibit 1 to
          this Amendment Agreement."

     ** Material has been omitted and filed separately with the Commission.

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     "28a. "Nokia Cap" means $US59,000,000."

2.   New TDD Project Definition. The parties hereby adopt the Base TDD Project
     as the TDD Project to be undertaken by the parties pursuant to the terms of
     the Master Agreement and Related Agreements, as amended herein. Exhibit 1
     hereto is hereby incorporated and made part of the Work Plans and
     Specifications. Any portions of the Work Plans and Specifications as of the
     Effective Date that are inconsistent with the provisions of Exhibit 1,
     either express or implied, are hereby superceded by Exhibit 1 hereto.
     Changes to the TDD Project shall be made in accordance with terms of the
     TDD Development Agreement, as amended herein.

3.   Adoption of Cap and Payment Schedule For Reimbursement of Base TDD Project
     Costs Nokia and IDC hereby agree to modify the compensation terms of the
     TDD Development Agreement, from a time and materials basis without a cap,
     to payments schedule with a cap, as follows:

     A.   Section 5.1 is hereby replaced in its entirety with the following:

          "Compensation. IDC will be paid for its reimbursable costs incurred in
          the Base TDD Project in accordance with Exhibit 2, such reimbursable
          costs to be (i) [**] Nokia shall reimburse IDC in accordance with the
          following payment schedule:

             (i)    For services rendered by IDC during 2001, IDC will be paid
                    [**].

             (ii)   For monthly services rendered by IDC commencing January 1,
                    2002, Nokia shall pay IDC [**].

             (iii)  Upon final delivery of all deliverables as set forth in the
                    Work Plans and Specifications, Nokia shall pay IDC the
                    lesser of [**]

             Nokia's commitment hereunder shall cover only costs and fees
             incurred in accordance with this Agreement, the Work Plans and
             Specifications, and the Compensation Schedule, or future amendments
             or revisions thereto. Notwithstanding the foregoing, Nokia shall
             continue to be

_________________
** Material has been omitted and filed separately with the Commission.

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             responsible to pay costs related to Jointly Developed Patent Rights
             in accordance with Section 4.4 of the Agreement, and for resolving
             patent ownership disputes in accordance with Section 4.5."

4.   Changes to the Work Plans and Specifications. As regards the Base TDD
     Project, the review and approval of the associated TDD Project Budget shall
     be as set forth in the TDD Development Agreement except as modified under
     Section 5 hereto. Any changes to the Work Plans and Specifications shall be
     made in accordance with the TDD Development Agreement. Notwithstanding
     anything in this Agreement or in the TDD Development Agreement to the
     contrary, any change to the Work Plans and Specifications representing an
     increase in effort or expansion of the Base TDD Project shall be approved
     by the parties in writing prior to implementation. The Project Managers
     shall have the authority to jointly approve such changes to the Work Plans
     and Specifications provided the increased effort is not expected to exceed
     $500,000.

5.   Changes to Budgeting, Invoicing and Penalty Provisions. If the Total TDD
     Project Cost for the Base TDD Project has exceeded the Nokia Cap, then,
     other than providing on a one time basis the details reasonably necessary
     to demonstrate that the Total TDD Project Cost has exceeded the Nokia Cap,
     IDC shall have no further obligation to report costs, budget changes or
     other financial related information to Nokia as otherwise required in the
     Agreement. In addition, Nokia shall no longer have approval rights as
     regards any expenditures made by IDC in the implementation of the Work
     Plans and Specifications. In addition, in consideration of IDC limiting
     Nokia's reimbursement responsibility to the Nokia Cap for the Base TDD
     Project as provided herein, the penalty related to cost overruns set forth
     in Section 2.7.3 of the TDD Development Agreement is hereby deleted. The
     above limitation shall not apply to any additional effort being provided by
     IDC under different economic terms and conditions, as set forth in Section
     4 hereto.

6.   Joint Cooperation on [**] Continued Support. Nokia and IDC shall cooperate
     with regard to [**]. Without otherwise limiting Nokia's obligations under
     the Work Plans and Specifications, Nokia also agrees to maintain

_______________
** Material has been omitted and filed separately with the Commission.

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     at least the same level of support as regards the project (including
     standards support) as has been provided by Nokia historically over the term
     of the project.

7.   TDD Technology Transfer. Section 4.9.3 of the TDD Development Agreement is
     hereby amended to eliminate the grace periods under subparagraphs (i),
     (ii), and (iv).

8.   Amendment to Termination Liability. Section 9.4 ("Termination for
     Convenience") is hereby deleted.

9.   Additional Termination Right. The parties will meet on a regular basis to
     discuss the future market applications for TDD. In the event that due to
     the availability of other competing technologies or other factors, UTRA TDD
     technology is projected with a reasonable degree of certainty as having no
     relevant market application, IDC and Nokia shall meet to discuss
     termination of the project, an agreement to do such, in view of the above
     circumstances, will be made in good faith and not unreasonably withheld or
     delayed.

10.  Intellectual Property Rights. Except as otherwise expressly stated by Nokia
     in writing in respect of particular parts ("Sensitive Cells") at the time
     of disclosure to IDC (such designation requirement to be strictly
     enforced), the license for IDC and its Affiliates under the Nokia Licensed
     TDD Technology (but not as to Developed Patents and any patent rights under
     any pending patent applications), as set forth in Section 4.3.1 of the TDD
     Development Agreement, shall include any product of IDC (including, without
     limitation semiconductors, integrated circuits, software, radio equipment,
     IP blocks, etc.) actually used or intended to be used in connection with
     the manufacture or installation of TDD Products ("IDC TDD Components"),
     including when such IDC TDD Components are not used as part and within
     licensed products, and test equipment. It is hereby understood and agreed
     that (i) Sensitive Cells shall exclude any Technical Information disclosed
     by Nokia to IDC as of the Effective Date of this Amendment, (ii)
     understanding that IDC needs to have licensable IP as a product of this
     Base TDD Project, Nokia shall limit designating Sensitive Cells to
     exceptional circumstances, and (iii) IDC may, after good faith discussion
     with Nokia, decline to accept and/or utilize

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     Sensitive Cells in the Base TDD Project to the extent such acceptance or
     use may materially adversely impact the licensability of the Developed
     Technology. Nokia's non-assert, as set forth in Section 4.3.4 of the TDD
     Development Agreement, shall also apply to IDC TDD Components in addition
     to TDD ASICs and modems but solely in respect of TDD portion of such
     products (and excluding, without limitation, any possible GSM or FDD
     portion in the same product). Moreover, as used in Sections 4.2 and 4.3 of
     the TDD Development Agreement, TDD Products shall be interpreted to include
     test equipment for TDD Products. In addition, IDC and Nokia will be
     permitted to provide spare parts for test equipment (Nokia's right being
     limited to spare parts for the test equipment supplied by Nokia), as set
     forth in Section 4.7.1 of the TDD Development Agreement. The licenses
     granted for Nokia and its Affiliates as set forth in Section 4.2.1 of the
     TDD Development Agreement shall also include the licenses to any Developed
     Patents of IDC under the TDD Program Plan Revision D with the exception of
     Patents relating to the software implementation of the protocol stack (not
     related to the-systems work) of L2/3 Release 2 features (e.g. handover,
     mobility procedures, temporary DCH RRM (escape mechanisms and load
     balancing), etc.). Contingent upon Nokia and InterDigital executing an
     agreement on a future TDD program, InterDigital shall grant Nokia a license
     under the terms of section 4.2.1 to the Patents developed under the TDD
     Program Plan Revision D that are excepted under the preceding sentence.
     Nothing contained in this provision shall obligate InterDigital to perform
     any work under the TDD Program Plan Revision D other than the work
     encompassing the Base TDD Project under this Amendment

     For the avoidance of doubt, and to avoid the need to disclose the contents
     of the Agreements and this Amendment to customers seeking to license TDD
     Technology or purchase TDD components from IDC, or to foundries producing
     TDD products for sale, Nokia and IDC will mutually agree on a holding
     statement that can be provided on a confidential basis to customer and
     other vendors, acknowledging (i) that IDC owns all of the TDD Technology it
     developed under the Agreements and this Amendment, (ii) that IDC has
     secured sufficient and appropriate rights as regards any Nokia TDD
     Technology included in the results of such projects for the purpose of
     licensing third parties to manufacture and sell TDD products, and (iii)
     that such rights as regards any Nokia Patents are conditional on such third
     parties not asserting their Patents against Nokia Group.

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11.  Continued Cooperation. Without limiting either party's ability to pursue
     their own business interests, IDC and Nokia shall continue to cooperate and
     communicate on potential future activities on TDD so that, if desirable,
     the parties can promptly undertake such activities if and when market
     conditions and circumstances are appropriate. In this regard, IDC and Nokia
     shall maintain a regular, frequent dialog on each other's views on TDD.
     Further, in the event Nokia determines to pursue TDD activities beyond the
     Base TDD Project, it shall first meet with IDC with the view of providing
     IDC with the first opportunity to meet Nokia's development needs.

12.  Future Cooperation. Contingent upon Nokia and InterDigital executing an
     agreement on a future TDD program, InterDigital shall provide to Nokia any
     TDD technology items which were deliverables under the TDD Program Plan
     Revision D, but are not part of the deliverables under this Amendment,
     provided:

     i    InterDigital has the right to grant licenses to such deliverables, and

     ii   Nokia compensates InterDigital for any mutually agreed upon,
        incremental expenses (e.g., equipment or labor associated with the test
        platform or license fees payable to third parties in connection with any
        license granted under section 12(i) above).

     Nothing contained in this provision shall obligate InterDigital to perform
     any work under the TDD Program Plan Revision D other than the work
     encompassing the Base TDD Project under this Amendment.

13.  Miscellaneous. All of the terms and conditions of the Master Agreement are
     hereby incorporated herein by reference. Unless modified herein, all other
     terms and conditions of the Master Agreement and Related Agreements remain
     unaltered and in full force and effect. This Amendment Agreement shall be
     subject to the terms of the Master Agreement unless inconsistent with the
     terms in this Agreement. All Exhibits and other attachments to this
     Amendment Agreement which are referred to herein are hereby incorporated in
     and made a part of this Agreement. This Amendment Agreement contains the
     complete and final agreement between the parties, and supersedes all
     previous understandings relating to the subject matter hereof and thereof
     whether oral or written. This Amendment Agreement may only be modified by a
     written agreement signed by duly

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     authorized representatives of the parties. This Amendment Agreement may be
     executed by the parties in counterparts, each of which shall be deemed an
     original of the applicable document. Signatures provided by facsimile or
     other electronic means by any party shall be valid and enforceable upon
     delivery to the other parties hereto.

IN WITNESS WHEREOF, the parties have executed this Amendment Agreement by their
duly authorized representatives.

INTERDIGITAL COMUNICATIONS CORPORATION

     BY:    /s/ Howard Goldberg
        -------------------------------
     Name:  Howard Goldberg
     Title: President & CEO
     Date:


INTERDIGITAL TECHNOLOGY CORPORATION

By:         /s/ William J. Merritt
   ------------------------------------
     Name:  William J. Merritt
     Title: President
     Date:


NOKIA CORPORATION

By:         /s/ [**]                        /s/ [**]
   ------------------------------------     ------------------------------------
     Name:  [**]                                [**]
     Title: Executive VP, CTO                   Senior VP, Nokia Networks
     Date:

** Material has been omitted and filed separately with the Commission.

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Exhibit 1: InterDigital/Nokia UTRA-TDD Program Plan



                                      [**]


** Material has been omitted and filed separately with the Commission

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