Under the terms, Simtek will gain certain assets related to ZMD's nvSRAM product line. The deal will cost $8 million in cash and $2 million in stock and includes more than $1 million in shippable inventory

In the transaction, Simtek will regain sole ownership of its patents and technical information used by ZMD on Sonos-based standard product memory architectures previously licensed by Simtek to ZMD.

ZMD will be permitted use of certain Simtek intellectual property in its embedded-function system-on-chip products like ASSPs and ASICs. At closing, Simtek and ZMD will enter into a 5-year non-compete agreement.

Simtek will establish a European design, customer service and support center in Dresden, Germany. Simtek plans to use the new design team to accelerate product development. The targeted products are made at foundries Cypress Semiconductor Inc. and DongbuAnam Semiconductor Co. Ltd.