Exhibit 10.1

Agreement and Release

This Agreement and Release (“Agreement”) is made by and between James R. Bailey
and Virage Logic Corporation (“Virage Logic” or “Company”).

For good and valuable consideration, Mr. Bailey and the Company agree as
follows:

1. Separation from Employment. Mr. Bailey acknowledges and agrees that his
employment with the Company has ended as of July 10, 2007 (the “Separation
Date”).

2. Separation Benefits. Subject to the terms and considerations of this
Agreement, the Company agrees to provide him with the following (“Separation
Benefits”):

a) Severance Payment. The Company shall provide Mr. Bailey with a severance
payment in the amount of $66,461.54, which is equivalent to 18 weeks of
Mr. Bailey’s regular pay, less applicable withholding taxes, in a lump sum
(“Severance Payment”). Said Severance Payment shall be delivered to Mr. Bailey
within fourteen (14) calendar days following the Company’s receipt of this
Agreement signed and dated by Mr. Bailey.

b) Continued Benefits. If Mr. Bailey makes a timely and accurate election and is
and remains eligible to continue his current group medical insurance coverage
pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended (“COBRA”), the Company will pay the applicable premiums for Mr. Bailey
and his eligible dependents to provide coverage for the five (5) month period
following the month in which the Separation Date occurs.

3. No Other Payments Due. Mr. Bailey acknowledges and agrees that he has
received all salary, accrued vacation, bonuses, or other such sums due to him
other than the Severance Payment to be provided by Paragraph 2 of this
Agreement. Mr. Bailey acknowledges that, he is entitled to receive no additional
compensation, wages, stock, options, commissions (with the exception of eligible
sales commission through August 31, 2007 ), money, benefits, or bonuses other
than those described herein, and that all earned wages and accrued but unused
PTO will be paid no later than the last day of employment.

4. Release of Claims by Mr. Bailey. As consideration for the promises and
covenants of the Company set forth in this Agreement, Mr. Bailey hereby fully
and forever releases and discharges the Company and its parents, subsidiaries,
affiliates and related companies, and their respective shareholders, officers,
directors, agents, employee benefit plans, representatives, employees,
attorneys, predecessors, successors and assigns (“Released Parties”), from all
claims and causes of action, whether known or unknown, including but not limited
to those arising out of or relating in any way to Mr. Bailey’s employment with
the Company, including the termination of his employment, based on any acts or
events occurring up until the date of Mr. Bailey’s signature below. Mr. Bailey
understands and agrees that this Release is a full and complete waiver of all
claims, including, but not limited to, any claims of wrongful discharge, breach
of contract, breach of the covenant of good faith and fair dealing, violation of
public policy, defamation, personal injury, emotional distress; any claims under
Title VII of the Civil Rights Act of 1964, as amended, the Fair Labor Standards
Act, the Age Discrimination in Employment Act of 1967, as amended (“ADEA”), the
Employee Retirement Income Security Act of 1974, as amended (“ERISA”), as
related to severance benefits, the California Fair Employment and Housing Act,
California Government Code § 12900 et seq., the California Labor Code, the
California Business & Professions Code, the Equal Pay Act of 1963, the Americans
With Disabilities Act, the Family and Medical Leave Act, the California Family
Rights Act, the Civil Rights Act of 1991; and any claims under any other
federal, state, and local laws and regulations. This Agreement does not release
claims that cannot be released as a matter of law, including, but not limited
to, claims under Division 3, Article 2 of the California Labor Code (which
includes indemnification rights).

5. Outstanding Claims. As further consideration and inducement for this
Agreement, Mr. Bailey represents that he has not filed or otherwise pursued any
charges, complaints or claims of any nature which are in any way pending against
the Company or any of the Released Parties with any court with respect to any
matter covered by this Agreement and that, to the extent permitted by law, he
will not do so in the future. Mr. Bailey further represents that, with respect
to any charge, complaint or claim he has filed or otherwise pursued or will file
or otherwise pursue in the future with any state or federal agency against the
Company or any of the Released Parties, he will forgo any monetary damages,
including but not limited to compensatory damages, punitive damages, and
attorneys’ fees, to which he may otherwise be entitled in connection with said
charge, complaint or claim. Nothing in this Agreement shall limit Mr. Bailey’s
right to file a charge, complaint or claim with any state or federal agency or
to participate or cooperate in such matters.

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6. Civil Code 1542 Waiver. As a further consideration and inducement for this
Agreement, Mr. Bailey hereby waives any and all rights under Section 1542 of the
California Civil Code or any other similar state, local, or federal law,
statute, rule, order or regulation he may have with respect to the Company and
any of the Released Parties.

Section 1542 provides:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR.

Mr. Bailey expressly agrees that this Agreement shall extend and apply to all
unknown, unsuspected and unanticipated injuries and damages as well as those
that are now disclosed.

7. Consideration and Revocation Periods. Mr. Bailey understands that the ADEA
prohibits employment discrimination based on age. This understanding
notwithstanding, Mr. Bailey hereby releases Released Parties from any claims of
employment discrimination based on age arising up to and including the date of
the signing of this Agreement. Mr. Bailey acknowledges that he has been advised,
as required by the Older Workers Benefit Protection Act (“Act”), that:

(a) he has carefully read and fully understands all of the terms of this
Agreement,

(b) he knowingly and voluntarily agrees to all of the terms of this Agreement,

(c) he has been advised to consult with an attorney before signing this
Agreement,

(d) he has forty-five (45) calendar days after receipt of this Agreement to
consider the Agreement and release of claims,

(e) he has seven (7) calendar days after signing this Agreement to revoke it by
delivering to Human Resources, within said seven (7) calendar days, a letter
stating that he is revoking it, and

(f) this Agreement shall not become enforceable or effective until (7) calendar
days following Mr Bailey’s execution of the Agreement (“Effective Date”).

8. No Admission of Liability. By entering into this Agreement, the Company and
all Released Parties do not admit any liability whatsoever to Mr. Bailey or to
any other person arising out of claims heretofore or hereafter asserted by him,
and the Company, for itself and all Released Parties, expressly denies any and
all such liability.

9. Confidentiality of Terms of Agreement. Mr. Bailey agrees to maintain in
confidence the terms of this Agreement and to discuss them only with attorneys,
tax advisors, and family members who have a reasonable need to know of such
terms, provided he instructs them to maintain confidentiality.

10. Non-Disclosure of Confidential and Proprietary Information. Mr. Bailey
agrees that he shall continue to maintain the confidentiality of all
confidential and proprietary information of the Company. Mr. Bailey agrees that,
in accordance with this Agreement and any other confidentiality agreements which
may exist between him and the Company, he shall not divulge, furnish, or make
available to any party any confidential or proprietary information of the
Company.

11. Joint Participation in Preparation of Agreement. The parties hereto
participated jointly in the negotiation and preparation of this Agreement, and
each party has had the opportunity to obtain the advice of legal counsel and to
review, comment upon, and redraft this Agreement. Accordingly, it is agreed that
no rule of construction shall apply against any party or in favor of any party.
This Agreement shall be construed as if the parties jointly prepared this
Agreement, and any uncertainty or ambiguity shall not be interpreted against any
one party and in favor of the other.

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12. Choice of Law and Consent to Jurisdiction. The parties agree that California
law shall govern the validity, effect, and interpretation of this Agreement.

13. Section Headings. Section headings in this Agreement are included for
convenience of reference only and shall not be considered a part of this
Agreement for any other purpose.

14. Entire Agreement. This Agreement constitutes the complete understanding
between Mr. Bailey and the Company and supersedes any and all prior agreements,
promises, representations, or inducements, no matter its or their form,
concerning its subject matter, with the exception of any confidentiality,
proprietary information, trade secret or invention assignment agreement
previously executed by Mr. Bailey, which remains in full force and effect to the
extent not inconsistent with this Agreement. No promises or agreements made
subsequent to the execution of this Agreement by these parties shall be binding
unless reduced to writing and signed by authorized representatives of these
parties. Should any of the provisions of this Agreement be rendered invalid by a
court or government agency of competent jurisdiction, the remainder of this
Agreement shall, to the fullest extent permitted by applicable law, remain in
full force and effect.

15. Acknowledgement. Mr. Bailey hereby acknowledges that he has read and
understands the Agreement and that he signs the Agreement voluntarily, knowingly
and with the intention of being legally bound by it.

 

Dated:                         

   

 

      James R. Bailey

Dated:                         

    Virage Logic Corporation       By  

 

        Azfar Hasib