TOKYO, Japan - Nikon Corporation, ASML Holding N.V. and Carl Zeiss SMT AG have agreed upon a comprehensive settlement of legal proceedings and cross-license of patents related to lithography equipment used to manufacture semiconductor devices.

According to a press release by Nikon, the Memorandum of Understanding is a binding agreement that continues the previously announced stays on all patent disputes pending between Nikon, ASML and SMT in Asia and the United States.

The three companies expect to execute definitive settlement and cross-license agreements and dismiss all legal proceedings between the parties in November 2004.

The terms of the Memorandum include payments to Nikon by ASML and SMT.

ASML will pay a total of $87 million (approximately Japanese Yen 9.6 billion). An initial payment of $60 million (approximately Japanese Yen 6.6 billion) will be made in 2004, with the remaining equal installments due in 2005, 2006 and 2007.

SMT will pay a total of $58 million (approximately Japanese Yen 6.4 billion). An initial payment of $40 million (approximately Japanese Yen 4.4 billion) will be made in 2004, with the remaining equal installments due in 2005, 2006 and 2007.

Nikon Corporation has been a leader in optical glass manufacturing.