AGREEMENT AND RELEASE

1.

This Agreement and Release (“Agreement”) is given by James J. Ensell to Virage Logic Corporation (the “Company”), and its parents, subsidiaries, affiliated and related companies, and their respective shareholders, officers, directors, employees, agents, representatives, attorneys, predecessors, successors and assigns (collectively referred to herein as the “Releasees”).

2.

I understand and agree that my last day of employment will be January 4, 2007 (the “Termination Date”), and that my employment is terminating on that date. In consideration the Company will provide for:

a.

On the Effective Date (as defined below), the Company will pay a lump sum severance in the amount of $107,499.48. This is based on six months of pay at my final base salary.

b.

To the extent provided by the federal “COBRA” and similar California employer health care continuation laws, I may elect to continue for 18 months such group health insurance coverage as is in place on Termination Date. If I timely elect continued health care coverage under COBRA, the Company will pay the premiums necessary to continue my current health care coverage for up to six months; provided, however, that this payment obligation will cease if I become eligible for comparable benefits under another employer’s medical benefit plan. After such time I understand I am responsible for the payment of any remaining health care continuation, to the extent available under applicable law. After my COBRA continuation benefits expire, I may be able to convert to an individual policy at my own expense, if I so elect and provided I comply with such rules as are applied by the insurance carriers under applicable law.

3.

I understand and agree that the Separation Package provided to me is in excess of any earned wages, accrued PTO hours, commissions, bonuses, or any other amounts due and owing to me by the Company and is good and valuable consideration in excess of and in addition to what I am already entitled to receive from the Company. I acknowledge that, I am entitled to receive no additional compensation, wages, stock, options, commissions (with the exception of sales commission earned through the Termination Date), money, benefits, or bonuses other than those described herein, and that all earned wages and accrued but unused PTO will be paid to me no later than my last day of employment.

4.

In exchange for the above, and in consideration of the Separation Package, I hereby release, acquit, and forever discharge Releasees from any and all claims, liabilities, demands, causes of action, costs, expenses, attorneys fees, damages, and obligations of every kind and nature, whether statutory or other, of any jurisdiction, foreign or domestic, whether known or unknown, suspected or unsuspected, disclosed or undisclosed, arising out of or in any way related to agreements, acts or conduct occurring at any time prior to the date I sign this Agreement. I understand that this release

5.

I specifically understand that the federal Age Discrimination in Employment Act prohibits employment discrimination based on age, and that I have the right to file a claim of age discrimination with the Equal Employment Opportunity Commission. This understanding notwithstanding, I hereby specifically release Releasees from any claims of employment discrimination based on age arising up to and including the date of the execution of this Agreement. I further acknowledge that the consideration given for the waiver and release provided in this Agreement is in addition to anything of value to which I am already entitled. I also acknowledge that I have been advised, as required by the Older Workers Benefit Protection Act, that: (a) the waiver and release does not apply to any rights or claims that may arise after the date I sign this Agreement; (b) that the Act requires that I be advised to consult with an attorney prior to executing this Agreement; (c) that I have twenty-one (21) days to consider this Agreement, which includes any proposed revisions or modifications to it; (d) that I have seven (7) days following the execution of this Agreement to revoke it; and (e) that this Agreement shall not be effective until the Effective Date. I acknowledge that I have been provided with the opportunity to consult with counsel.

6.

I understand and agree that if I choose not to use the full twenty-one (21) days the Company has provided to consider and review this Agreement, that I do so knowingly and voluntarily, and I waive any claim that I was not given the entire twenty-one (21) days or did not use the entire period of time to consider this Agreement or consult with an attorney.

7.

I will immediately withdraw any pending claims, complaints, or administrative charges I have made against Releasees and will authorize any administrative agency to dismiss those charges. I will not file or assist in the filing of any administrative charges, complaints, or claims against Releasees. In the event any charge is filed and/or is not withdrawn, I agree that I will be entitled to no monetary compensation as a result of the outcome of any such charge or related lawsuit.

8.

I understand that this release fully and finally extinguishes and discharges all claims whether known to me or not as provided by California Civil Code section 1542. This statute provides that unless I specifically agree to release claims I do not know about, they are not released by a general release. ("A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor.") By this agreement, I agree to waive that right and affirm my intention to release not only claims known to me, but also those unknown to me which arose or may arise out of any matter described in paragraph 5 above, including but not limited to my employment or its termination, and I hereby do release all such known and unknown claims.

9.

I agree to return, on the Termination Date, all Company property, including but not limited to Company documents (and all copies thereof) and other Company property in your possession or control, including, but not limited to: Company files, notes, memoranda, correspondence, agreements, draft documents, notebooks, logs, drawings, records, plans, proposals, reports, forecasts, financial information, sales and marketing information, research and development information, personnel information, specifications, computer-recorded information, tangible property and equipment, credit cards, entry cards, identification badges and keys; pagers, personal computers and related equipment and any materials of any kind that contain or embody any proprietary or confidential information of the Company (and all reproductions thereof in whole or in part). I agree to make a diligent search to ensure that you have returned all such property, wherever it is located. I agree that the timely return of all such Company documents and other property is a condition precedent to my receipt of the severance benefits provided under this Agreement.

10.

I hereby acknowledge and agree to abide by my continuing obligations under my Employee Invention and Confidential Information Agreement, a copy of which is attached hereto as Exhibit A.

11.

I understand and agree that the provisions of this Agreement and Release will be held in strictest confidence by you and the Company and will not be publicized or disclosed in any manner whatsoever; provided, however, that: (a) you may disclose this Agreement and Release to your immediate family; (b) the parties may disclose this Agreement and Release in

confidence to their respective attorneys, accountants, auditors, tax preparers, and financial advisors; (c) the Company may disclose this Agreement and Release as necessary to fulfill standard or legally required corporate reporting or disclosure requirements; and (d) the parties may disclose this Agreement and Release insofar as such disclosure may be necessary to enforce its terms or as otherwise required by law. By way of example, and without limitation, you agree not to disclose the terms of this Agreement and Release to any current or former Company employee.

12.

You agree not to disparage the Company and its officers, directors, employees, shareholders and agents, in any manner likely to be harmful to them or their business, business reputation or personal reputation; provided that you may respond accurately and fully to any question, inquiry or request for information when required by legal process.

13.

The Company and I agree that this Agreement does not constitute an admission of wrongdoing or liability on the part of the Company or Releasees.

14.

In the event that any provision hereof becomes or is declared to be illegal, unenforceable or void, this Agreement shall continue in full force and effect and the offending provision shall be modified only to the extent necessary to render it enforceable.

15.

This Agreement and the Confidential Information and Invention Assignment Agreement contain the entire agreement between the parties with respect to the matters referenced herein. Any modification must be in writing and signed by an Officer of the Company and me.

16.

This Agreement shall not become enforceable or effective until seven (7) calendar days following my execution of the Agreement (the “Effective Date”). If I choose to revoke this Agreement, I must ensure the revocation is delivered to the attention of Richard Butts, Vice President, Human Resources, at Virage Logic Corporation, 47100 Bayside Parkway, Fremont, CA 94538, no later than midnight on the seventh day following execution. If I do revoke this Agreement, I understand and agree that I am not entitled to receive the Separation Package set forth above.