SEPARATION AND RELEASE AGREEMENT

EXHIBIT 10.22(a)

SEPARATION AND RELEASE AGREEMENT

     THIS SEPARATION AND RELEASE AGREEMENT (“Agreement”) is made between Pawan Gupta (“Employee”) and BSQUARE CORPORATION (“Employer”), and is in consideration of their mutual undertakings as set forth in this Agreement.

     Employer no longer has a need for Employee’s services effective November 1, 2006 (“Termination Date”). In order to assist Employee in his transition to new employment and to mitigate financial hardship, Employer is offering Employee financial and other assistance to which Employee may not otherwise be entitled. The purpose of this Agreement is to clearly set forth the terms and conditions of Employee’s departure. Therefore, the parties agree as follows:

      1.  Nonadmission of Liability : This Agreement shall not be construed as an admission by Employer that it acted wrongfully with respect to Employee. Additionally, this Agreement shall not be construed as an admission by Employee of any misconduct.

      2.  Severance Pay and Benefit : Employee will continue on Employer’s payroll through the March 1, 2007. During this severance period, Employee will be paid his regular salary, including payment for all company holidays, through that date, but exclusive of any bonuses, if applicable. Employee will receive his last severance payment on the first regular payroll following March 1, 2007. Employee’s other benefits, including PTO etc. will cease on the Termination Date. Employee will be paid the entire balance of his accrued PTO, on the next payroll following the Termination Date.

      3.  Benefits Continuation : BSQUARE will continue to pay for the Employer’s portion of Employee’s medical/dental/vision coverage for the month of December. Effective January 1, 2007, Employee and/or his covered spouse and dependents may elect a temporary extension of medical, dental and vision plan coverage at group rates (called “COBRA continuation coverage”). Employee and/or his covered spouse must pay all applicable premiums for that COBRA continuation coverage. Employer will provide Employee and his covered spouse with a separate notice summarizing their COBRA continuation coverage rights and obligations, as well as an election form.

      4.  No Other Compensation: Employee acknowledges that he has been paid all other compensation or benefits which he might have been owed by Employer, and that Employer is not obligated in any event to pay or provide Employee with any further compensation or benefits of any nature.

      5.  Unemployment Compensation : If Employee files for unemployment compensation benefits, Employer will not contest Employee’s eligibility for unemployment compensation.

      6.  Confidentiality : Employee agrees not to disclose the terms of this Agreement to anyone or to acknowledge its existence to anyone. Employee may disclose the terms of this Agreement only to his immediate family, his attorney (if any), and his accountant or other similar advisor, and Employee shall direct each such person to maintain the confidentiality of the Agreement.

          6.1 In recognition of the significant value that BSQUARE places on its Confidential Information, BSQUARE had Employee sign a Proprietary Rights Agreement (“PRA”) when Employee began employment with BSQUARE dated January 4, 2005, as subsequently amended on August 29, 2005. In that Agreement, Employee made some important promises which remain in effect even after Employee’s departure from BSQUARE: