Document:

<PAGE>   1
                                                                    EXHIBIT 10.5

                            INDEMNIFICATION AGREEMENT

        THIS INDEMNIFICATION AGREEMENT (the "Agreement") is effective as of the
___ day of __________ ____, by and between Virage Logic Corporation., a Delaware
corporation (the "Company"), and _______________, an individual ("Indemnitee").

                                   BACKGROUND

        A. Indemnitee is [an officer and] a member of the Board of Directors of
the Company and, in that capacity, performs a valuable service for the Company.
For a variety of reasons, including the frequency, magnitude and often baseless
nature of claims and actions brought against corporate directors and officers
generally, it is difficult for corporations to attract and retain highly
competent persons as directors and officers. In addition, there exists
uncertainty, both as to matters of "substance" and "procedure," about the
protection against such claims provided by statutory, charter and bylaw
provisions and through "director and officer" insurance.

        B. The Company's Certificate of Incorporation also provides for
indemnification of, and advancement of expenses to, the directors and officers
of the Company to the maximum extent authorized by the Delaware General
Corporation Law, as amended (the "DGCL"), and, together with the DGCL, permits,
by its nonexclusive nature, the establishment of indemnification agreements
between the Company and its directors and officers.

        C. In order to induce Indemnitee to continue to serve as [an officer
and] a member of the Board of Directors and to clarify the specific procedure
for addressing indemnification matters if and as they arise, the Company and the
Indemnitee hereby agree to contractual indemnification arrangements on the terms
set forth in this Agreement.

        THE PARTIES AGREE AS FOLLOWS:

        1. DEFINITIONS. For purposes of this Agreement, the following terms have
the following meanings:

                      a. "Agent" means any person (i) who is or was a director,
officer, employee or other agent of the Company or (ii) who is or was serving at
the request of the Company, or otherwise as a result of that person's
relationship with the Company, as a director, officer, employee or other agent
of another foreign or domestic corporation or of any partnership, joint venture,
trust or other enterprise (including, without limitation, service with respect
to employee benefit plans).

                      b. "Change in Control" shall be deemed to have occurred if
(i) any "person" (as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended), other than a trustee or other
fiduciary holding securities under an

<PAGE>   2

employee benefit plan of the Company or a corporation owned directly or
indirectly by the stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company, becomes the "beneficial
owner" (as defined in Rule 13d-3 under said Act), directly or indirectly, of
securities of the Company representing 20% or more of the total voting power
represented by the Company's then outstanding Voting Securities, or (ii) during
any period of two consecutive years, individuals who at the beginning of such
period constitute the Board of Directors of the Company and any new director
whose election by the Board of Directors or nomination for election by the
Company's stockholders was approved by a vote of at least two-thirds (2/3) of
the directors then still in office who either were directors at the beginning of
the period or whose election or nomination for election was previously so
approved, cease for any reason to constitute a majority thereof, or (iii) the
stockholders of the Company approve a merger or consolidation of the Company
with any other corporation, other than a merger or consolidation which would
result in the Voting Securities of the Company outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by being
converted into Voting Securities of the surviving entity) at least 80% of the
total voting power represented by the Voting Securities of the Company or such
surviving entity outstanding immediately after such merger or consolidation, or
the stockholders of the Company approve a plan of complete liquidation of the
Company or an agreement for the sale or disposition by the Company (in one
transaction or a series of transactions) of all or substantially all of the
Company's assets.

                      c. "Disinterested Director" means a director of the
Company who neither is nor was a party to the Proceeding in respect of which
indemnification is sought under this Agreement or otherwise.

                      d. "Expenses" includes any and all direct and indirect
costs (including, without limitation, attorneys' fees and disbursements, court
costs, fees and expenses of witnesses, experts, professional advisers and
private investigators, arbitration expenses, costs of attachment, appeal or
similar bonds, travel expenses, duplicating, printing and binding costs,
telephone charges, postage, delivery service fees, and any and all other
disbursements or out-of-pocket expenses) actually and reasonably incurred by or
on behalf of Indemnitee in connection with either (i) the investigation,
defense, settlement or appeal of, or being a witness or participant in, a
Proceeding (including preparing for any of the foregoing) or (ii) the
establishment or enforcement of any right to indemnification under this
Agreement or otherwise or any right to recovery under any liability insurance
policy maintained by the Company; provided, however, that "Expenses" shall not
include any judgments, fines or amounts paid in settlement.

                      e. "Independent Counsel" means a law firm or attorney that
neither is presently nor in the past two years has been retained to represent:
(i) the Company or Indemnitee in any matter material to the Company or
Indemnitee, or (ii) any other party to the Proceeding in respect of which
indemnification is sought under this Agreement or

                                       2
<PAGE>   3

otherwise. In addition, the term "Independent Counsel" does not include any law
firm or attorney who, under the applicable standards of professional conduct
then prevailing, would have a conflict of interest in representing either the
Company or Indemnitee in an action to determine Indemnitee's right to
indemnification under this Agreement or otherwise.

                      f. "Liabilities" means liabilities and losses of any type
whatsoever, including, without limitation, judgments, fines, excise taxes and
penalties (including, without limitation, ERISA excise taxes and penalties) and
amounts paid in settlement (including all interest, assessments and other
charges paid or payable in connection with or in respect of such liabilities and
losses), actually incurred by Indemnitee in connection with or as a result of a
Proceeding.

                      g. "Potential Change in Control" shall be deemed to have
occurred if (i) the Company enters into an agreement, the consummation of which
would result in the occurrence of a Change in Control; (ii) any person
(including the Company) publicly announces an intention to take or to consider
taking actions which, if consummated, would constitute a Change in Control;
(iii) any person, other than a trustee or other fiduciary holding securities
under an employee benefit plan of the Company or a corporation owned, directly
or indirectly, by the stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company, who is or becomes the
beneficial owner, directly or indirectly, of securities of the Company
representing 9.5% or more of the combined voting power of the Company's then
outstanding Voting Securities, increases such person's beneficial ownership of
such securities by five percentage points or more over the initial percentage of
such securities; or (iv) the Board of Directors of the Company adopts a
resolution to the effect that, for purposes of this Agreement, a Potential
Change in Control has occurred.

                      h. "Proceeding" means any threatened, pending or completed
action, suit or proceeding (including any inquiry, hearing, arbitration
proceeding or alternative dispute resolution mechanism), whether civil,
criminal, administrative or investigative (including any action by or in the
right of the Company), to which Indemnitee is or was a party, witness or other
participant, or is threatened to be made a party, witness or other participant,
by reason of the fact that Indemnitee is or was an Agent, or by reason of
anything done or not done by Indemnitee in that capacity or in any other
capacity while serving as an Agent, whether before or after the date of this
Agreement. "Proceeding" shall not include any Proceeding initiated by Indemnitee
(other than as contemplated by Sections 3(d) or 6 of this Agreement) unless such
Proceeding was authorized or consented to by the Board of Directors of the
Company.

                      i. "Voting Securities" means any securities of the Company
which vote generally in the election of directors.

                                       3
<PAGE>   4

        2. AGREEMENT TO INDEMNIFY. Subject to the terms and conditions of, and
in accordance with the procedures set forth in, this Agreement, the Company
shall hold Indemnitee harmless and indemnify Indemnitee (and Indemnitee's spouse
as provided below), to the fullest extent permitted by the provisions of the
DGCL and other applicable law, from and against all Expenses and Liabilities,
including, without limitation, Expenses and Liabilities arising from any
Proceeding brought by or in the right of the Company or its stockholders. The
Company and Indemnitee intend that this Agreement provide for indemnification in
excess of that expressly required, granted or permitted by statute, including,
without limitation, any indemnification provided by the Company's Certificate of
Incorporation or Bylaws, or by vote of its stockholders or directors, or by
applicable law. If, after the date hereof, the DGCL or any other applicable law
is amended to permit or authorize indemnification of, or advancement of defense
expenses to, Indemnitee to a greater extent than is permitted on the date
hereof, references in this Agreement to the DGCL or any other applicable law
shall be deemed to refer to the DGCL or such applicable law as so amended.

        3. PROCEDURAL MATTERS.

               a. INITIAL REQUEST. Whenever Indemnitee believes that, in a
specific case, Indemnitee is then entitled to indemnification under this
Agreement or under the Company's Certificate of Incorporation or Bylaws, the
DGCL or otherwise, Indemnitee shall submit a written notice to the Company
requesting an authorization and determination by the Company to that effect. The
notice shall describe the matter giving rise to the request and be accompanied
by all appropriate supporting documentation reasonably available to Indemnitee.

               b. DETERMINATION AND PAYMENT. The Company shall make a
determination about Indemnitee's entitlement to indemnification in the specific
case no later than 90 days after receipt of Indemnitee's request. In making that
determination, the person or persons making the determination shall presume that
Indemnitee met any applicable standard of conduct required for indemnification,
unless the Company shall have affirmatively shown by clear and convincing
evidence that Indemnitee did not meet that standard. The determination shall be
made by the Board of Directors by a majority vote of a quorum consisting of
Disinterested Directors. If such a quorum is not obtainable, or, even if
obtainable, a quorum of Disinterested Directors so directs, the determination
shall be made by Independent Counsel in a written opinion obtained at the
Company's expense. Notwithstanding the foregoing, if there has been a Change in
Control (other than a Change in Control which has been approved by a majority of
the Company's Board of Directors who were directors immediately prior to such
Change in Control), the determination shall be made by Independent Counsel in a
written opinion obtained at the Company's expense. If the person or persons
empowered to make the determination either: (i) affirmatively makes a
determination of Indemnitee's entitlement to indemnification or (ii) fails to
make any determination at all within the 90-day period,

                                       4
<PAGE>   5

indemnification shall be considered as authorized and proper in the
circumstances, and Indemnitee shall be absolutely entitled to such
indemnification, and shall receive payment as promptly as practicable, in the
absence of any misrepresentation of a material fact by Indemnitee in the request
for indemnification, or a specific determination by a court of competent
jurisdiction that all or any part of such indemnification is prohibited by
applicable law. If the person or persons empowered to make the determination
find that the Indemnitee is not entitled to indemnification, the Indemnitee
shall have the right to apply to a court of competent jurisdiction for the
purpose of enforcing Indemnitee's right to indemnification pursuant to this
Agreement. The termination of any Proceeding by judgment, order, settlement,
arbitration award, conviction or upon a plea of nolo contendere or its
equivalent shall not, of itself, create a presumption that Indemnitee did not
act in good faith and in a manner which Indemnitee reasonably believed to be in
or not opposed to the best interests of the Company, or that, with respect to
any criminal Proceeding, Indemnitee had reasonable cause to believe Indemnitee's
conduct was unlawful.

               c. ADVANCEMENT OF EXPENSES. If so requested in a writing by
Indemnitee accompanied by appropriate supporting documentation, the Company
shall, within ten days after receipt of the request, advance funds for the
payment of Expenses, whether that request is made before or after the final
disposition of a Proceeding (including, without limitation, any criminal
Proceeding or any Proceeding brought by or in the right of the Company or its
stockholders), unless there has been a final determination that Indemnitee is
not entitled to indemnification for those Expenses. If required by law at the
time of the advance, the payment of the advance shall be conditioned upon the
receipt from Indemnitee of an undertaking (which need not be secured) to repay
the advance to the extent that it is ultimately determined that Indemnitee is
not entitled to such indemnification by the Company. Any dispute concerning the
advancement of Expenses may, at the election of the Indemnitee, be resolved by
arbitration before an arbitrator selected by Indemnitee and approved by the
Company. If the parties cannot agree on a single arbitrator, then the claim
shall be heard by a panel of three arbitrators, with one selected by Indemnitee,
one selected by the Company and one selected jointly by the foregoing two
arbitrators. Each of the arbitrators shall be a litigation or corporate attorney
with experience in the field of officer and director indemnification. The
arbitrators shall be selected within (15) days after demand for arbitration and
shall render a decision within (45) days after selection, unless good cause is
shown for requiring a longer decision period. The Company shall act in utmost
good faith to provide timely information to the arbitrators and to ensure
Indemnitee a full opportunity to defend against the Company's claim that
Indemnitee is not entitled to an advance of Expenses. The Company shall
indemnify Indemnitee against all Expenses incurred by Indemnitee under the
dispute resolutions proceedings set forth in this Subsection 3(c), unless a
court of competent jurisdiction finds that each of the claims and/or defenses by
Indemnitee in the action or proceeding for which an advance is sought was
frivolous or made in bad faith.

                                       5
<PAGE>   6

               d. ENFORCEMENT. If Indemnitee has not received a determination of
entitlement to indemnification or an advance, as the case may be, within the
applicable time periods for such actions specified in this Agreement, or if it
has been determined that Indemnitee substantively would not be permitted to be
indemnified in whole or in part under applicable law, Indemnitee shall be
entitled to commence an action in any court of competent jurisdiction (including
the court in which the Proceeding (as to which Indemnitee seeks indemnification)
is or was pending) (i) in the former case, seeking enforcement of Indemnitee's
rights under this Agreement or otherwise, or seeking an initial determination by
the court, or (ii) in the latter case, challenging any such determination or any
aspect thereof, including the legal or factual bases therefor. The Company
hereby consents to service of process and to appear generally in any such
proceeding. It shall be a defense to any such action that applicable law does
not permit the Company to indemnify Indemnitee for the amount claimed. In any
such action, the Company shall have the burden of proving that indemnification
or advances are not proper in the circumstances of the specific case. Neither
the failure of the Company to have made a determination prior to the
commencement of such action that indemnification is proper under the
circumstances because Indemnitee has met the standard of conduct under
applicable law, nor an actual determination by the Company that Indemnitee has
not met such standard of conduct, shall be a defense to the action or create a
presumption that Indemnitee has not met that standard of conduct. The Company
shall indemnify Indemnitee for Expenses incurred by Indemnitee in connection
with the successful establishment or enforcement, in whole or in part, by
Indemnitee of Indemnitee's right to indemnification or advances.

               e. NOTICE BY INDEMNITEE AND DEFENSE OF PROCEEDINGS. Indemnitee
shall promptly notify the Company in writing upon being served with any summons,
citation, subpoena, complaint, indictment, information or other document
relating to any matter which may give rise to a claim for indemnification under
this Agreement or otherwise; provided, however, that a failure of Indemnitee to
provide that notice shall relieve the Company from liability only if and to the
extent that the failure materially prejudices the Company's ability to
adequately defend Indemnitee in the Proceeding. With respect to any Proceeding
as to which Indemnitee so notifies the Company:

                      i. The Company shall be entitled to participate at its own
expense.

                      ii. Except as otherwise provided below, the Company,
jointly with any other indemnifying party similarly notified, shall be entitled
to assume the defense of such Proceeding, with counsel reasonably satisfactory
to Indemnitee. After notice from the Company to Indemnitee of the Company's
election to assume the defense, the Company shall not be liable to Indemnitee
under this Agreement for any Expenses subsequently incurred by Indemnitee, other
than as provided below. Indemnitee shall have the right to employ

                                       6
<PAGE>   7

Indemnitee's own counsel in that Proceeding, but the fees and expenses of such
counsel incurred after notice from the Company of its election so to assume the
defense shall be borne by Indemnitee, except to the extent that (x) the
employment of counsel by Indemnitee has been authorized by the Company, (y)
Indemnitee has reasonably concluded that there may be a conflict of interest
between the Company and Indemnitee in the conduct of the defense of such
Proceeding or that counsel selected by the Company may not be adequately
representing Indemnitee, or (z) the Company has not in fact employed counsel to
assume the defense of such Proceeding. In those cases, the fees and expenses of
Indemnitee's own counsel shall be paid by the Company.

                      iii. Neither the Company nor Indemnitee shall unreasonably
withhold its or his or her consent to any proposed settlement. The Company has
no obligation to indemnify and hold Indemnitee harmless under this Agreement for
any amounts paid in settlement of any Proceeding effected without its written
consent. The Company shall not settle any Proceeding in any manner which would
impose any penalty or limitation on Indemnitee without Indemnitee's written
consent.

               f. CHANGE IN CONTROL. If there is a Change in Control (other than
a Change in Control which has been approved by a majority of the Company's Board
of Directors who were directors immediately prior to such Change in Control),
then with respect to all matters thereafter arising concerning the rights of
Indemnitee to indemnification and advances under this Agreement or otherwise,
the Company shall seek legal advice only from Independent Counsel selected by
Indemnitee and approved by the Company, which approval shall not be unreasonably
withheld. Such Independent Counsel, among other things, shall render its written
opinion to the Company and Indemnitee as to whether and to what extent
Indemnitee would be permitted to be indemnified under applicable law. The
Company shall pay the reasonable fees and expenses of such Independent Counsel.

        4. NONEXCLUSIVITY. The indemnification provided by this Agreement is not
exclusive of or inconsistent with any rights to which Indemnitee may be entitled
under the Company's Certificate of Incorporation or Bylaws, any other agreement,
any vote of stockholders or directors, the DGCL, or otherwise, both as to action
in Indemnitee's official capacity and otherwise. If and to the extent that a
change in the DGCL (whether by statute or judicial decision) permits greater
indemnification by agreement than would be afforded currently under the
Company's Certificate of Incorporation or Bylaws or under this Agreement, it is
the intent of the parties hereto that Indemnitee shall enjoy by this Agreement
the greater benefits so afforded by such change.

        5. PARTIAL INDEMNIFICATION. If Indemnitee is entitled to indemnification
by the Company for some or a portion of Expenses or Liabilities but not for the
total amount, the Company shall nevertheless indemnify Indemnitee for the
portion of such Expenses

                                       7
<PAGE>   8

and Liabilities to which Indemnitee is entitled to be indemnified. Moreover,
notwithstanding any other provision of this Agreement, to the extent that
Indemnitee has been successful on the merits or otherwise in defense of any
Proceeding or in defense of any claim, issue or matter therein, including
dismissal without prejudice, Indemnitee shall be indemnified against all
Expenses incurred by Indemnitee in connection therewith.

        6. LIABILITY INSURANCE. To the extent the Company maintains an insurance
policy or policies providing directors' and officers' liability insurance,
Indemnitee shall be covered by such policy or policies, in accordance with its
or their terms, to the maximum extent of the coverage available for any Company
director or officer, as the case may be. If Indemnitee serves as a fiduciary of
any employee benefit plan of the Company or any of its subsidiary or affiliated
corporations, then to the extent that the Company maintains an insurance policy
or policies providing fiduciaries' liability insurance, Indemnitee shall be
covered by such policy or policies in accordance with its or their terms, to the
maximum extent of the coverage available for any fiduciary. In the event of a
Potential Change in Control, the Company shall maintain in force any and all
insurance policies then maintained by the Company providing directors' and
officers' liability insurance or fiduciaries' liability insurance, in respect of
Indemnitee, for a period of six years thereafter. Upon notice to the Company,
either from Indemnitee or from any other source, of the commencement or threat
of commencement of any Proceeding or matter which may give rise to a claim for
indemnification of Indemnitee and which may be covered by any insurance policy
maintained by the Company, the Company shall promptly give notice to the insurer
in accordance with the procedures prescribed by such policy and shall thereafter
take all necessary or appropriate action to cause such insurer to pay, to or on
behalf of Indemnitee all Liabilities and Expenses payable under such policy with
respect to such Proceeding or matter. The Company shall indemnify Indemnitee for
Expenses incurred by Indemnitee in connection with any successful action brought
by Indemnitee for recovery under any insurance policy referred to in this
Section 6 and shall advance to Indemnitee the Expenses of such action in the
manner provided in Section 3(c) above.

        7. OTHER SOURCES. Indemnitee shall not be required to exercise any
rights Indemnitee may have against any other parties (for example, under an
insurance policy purchased by Indemnitee, the Company or any other person or
entity) before Indemnitee exercises or enforces Indemnitee's rights under this
Agreement. However, to the extent the Company actually indemnifies Indemnitee or
advances Indemnitee funds in respect of Expenses, the Company shall be entitled
to enforce any such rights which Indemnitee may have against third parties.
Indemnitee shall assist the Company in enforcing those rights if it pays
Indemnitee's costs and expenses of doing so. If Indemnitee is actually
indemnified or advanced Expenses by any such third party, then, for so long as
Indemnitee is not required to disgorge the amounts so received, to that extent
the Company shall be relieved of its obligation to indemnify Indemnitee or to
advance Expenses.

                                       8
<PAGE>   9

        8. CERTAIN RELATIONSHIPS. The obligations and rights created under this
Agreement shall not be affected by any amendment to the Company's Certificate of
Incorporation or Bylaws or any other agreement or instrument to which Indemnitee
is not a party, and shall not diminish any other rights which Indemnitee now or
in the future has against the Company or any other person or entity.

        9. SEVERABILITY. If any provision of this Agreement is determined to be
unenforceable for any reason, it shall be adjusted rather than voided, if
possible, in order to achieve the intent of the Company and Indemnitee. In any
event, the remaining provisions of this Agreement shall remain enforceable to
the maximum extent possible.

        10. CONTRIBUTION. If the indemnification provided in Section 2 of this
Agreement is unavailable, then, in respect of any Proceeding in which the
Company is jointly liable with Indemnitee (or would be if joined in the
Proceeding), the Company shall contribute to the amount of Expenses and
Liabilities as appropriate to reflect: (i) the relative benefits received by the
Company, on the one hand, and Indemnitee, on the other hand, from the
transaction from which the Proceeding arose, and (ii) the relative fault of the
Company, on the one hand, and of Indemnitee, on the other, in connection with
the events which resulted in such Expenses and Liabilities, as well as any other
relevant equitable considerations. The relative fault of the Company, on the one
hand, and of Indemnitee, on the other, shall be determined by reference to,
among other things, the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent the circumstances resulting in
such Expenses and Liabilities. The Company agrees that it would not be just and
equitable if contribution pursuant to this Section 10 were determined by pro
rata allocation or any other method of allocation which does not take account of
the equitable considerations described in this Section 10.

        11. GOVERNING LAW. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware applicable to
contracts made and to be performed in such state without giving effect to the
principles of conflicts of laws. This Agreement is intended to be an agreement
of the type contemplated by Section 145(f) of the DGCL.

        12. NOTICES. All notices and other communications under this Agreement
shall be in writing and shall be given by personal or courier delivery,
confirmed facsimile or telex transmission or first class mail, and shall be
deemed to have been duly given upon receipt if personally delivered or delivered
by courier, on the date of transmission if transmitted by facsimile or telex, or
three days after mailing if mailed, to the addresses set forth below:

                                       9
<PAGE>   10

               If to Indemnitee:

               ---------------------
               ---------------------
               ---------------------

               If to the Company:

               Virage Logic Corporation
               46501 Landing Park
               Fremont, CA  94538
               Attn:  President

or to such other address as either party may designate by notice to the other
from time to time.

        13. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall constitute an original.

        14. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the
Company and its successors and assigns, and shall inure to the benefit of
Indemnitee and Indemnitee's spouse, estate, heirs, executors, administrators,
personal or legal representatives and assigns. The Company shall require any
successor corporation (whether by merger, consolidation, or otherwise) by
written agreement in form and substance satisfactory to Indemnitee, expressly to
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform if no such succession had
taken place.

        15. AMENDMENT AND WAIVER. This Agreement may not be amended except by a
writing executed by both the Company and Indemnitee. No waiver of any provision
of this Agreement shall be effective unless in writing and signed by the party
to be charged therewith. A waiver of, or a failure to insist on, complete
compliance with any provision of this Agreement shall not be construed as a
waiver of a subsequent or different non-compliance, breach or default of that or
any other provision of this Agreement.

        16. ACKNOWLEDGMENT. The Company expressly acknowledges that it has
entered into this Agreement and assumed the obligations imposed on the Company
under this Agreement in order to induce Indemnitee to serve or to continue to
serve as a director or officer and acknowledges that Indemnitee is relying on
this Agreement in serving or continuing to serve in such capacity. The Company
further agrees to stipulate in any court proceeding that the Company is bound by
all of the provisions of this Agreement.

        17. PERIOD OF LIMITATIONS. No legal action shall be brought and no cause
of action shall be asserted by or in the right of the Company against
Indemnitee, estate, heirs, executors, administrators or personal or legal
representatives after the expiration of

                                       10
<PAGE>   11

two years from the date of accrual of such cause of action, and any claim or
cause of action of the Company shall be extinguished and deemed released unless
asserted by the timely filing of a legal action within such two-year period;
provided, however, that if any shorter period of limitations is otherwise
applicable to any such cause of action, such shorter period shall govern.

        18. DURATION OF AGREEMENT. This Agreement shall continue in effect for
so long as Indemnitee is subject to any possible Proceeding, regardless of
whether Indemnitee continues to serve as an Agent.

        19. ENTIRE AGREEMENT. This document contains the final, complete and
exclusive statement of the agreement between the Company and Indemnitee with
respect to the subject matter of this Agreement and supersedes any prior or
contemporaneous understandings, agreements, communications, correspondence or
representations by or between the parties, whether written or oral, relating to
the subject matter of this Agreement.

                                       11
<PAGE>   12

               IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date set forth in its first paragraph.

                                     VIRAGE LOGIC CORPORATION

                                     By:
                                        ----------------------------------------
                                     Title:
                                           -------------------------------------

                                     -------------------------------------------
                                                     , Indemnitee
                                     ----------------

                                       12<PAGE>   1
                                                                    EXHIBIT 10.6

                      SECURED FULL RECOURSE PROMISSORY NOTE

                              Milpitas, California

$[_________]                                                     August 27, 1997

     1. OBLIGATION. In exchange for the issuance to the undersigned
("Purchaser") of [______] shares (the "Shares") of the Common Stock of Virage
Logic Corporation, a California corporation (the "Company"), receipt of which is
hereby acknowledged, Purchaser hereby promises to pay to the order of the
Company on or before August 27, 2002 at the Company's principal place of
business at 1641 A South Main Street, Milpitas, California 95035, or at such
other place as the Company may direct, the principal sum of
[______________________________] ($[__________]) together with interest
compounded semi-annually on the unpaid principal at the rate of Six and
Twenty-Nine Hundredths percent (6.29%).which rate is not less than the minimum
rate established pursuant to Section 1274(d) of the Internal Revenue Code of
1986, as amended, on the earliest date on which there was a binding contract in
writing for the purchase of the Shares; however that the rate at which interest
will accrue on unpaid principal under this Note will not exceed the highest rate
permitted by applicable law.

     2. SECURITY. Payment of this Note is secured by a security interest in the
Shares granted to the Company by Purchaser under a Stock Pledge Agreement dated
of even date herewith between the Company and Purchaser (the "Pledge
Agreement"). This Note is being tendered by Purchaser to the Company as the
purchase price of the Sham pursuant to that certain Founder's Restricted Stock
Purchase Agreement between Purchaser and the Company dated of even date with
this Note (the "Purchase Agreement").

     3. DEFAULT: ACCELERATION OF OBLIGATION. Purchaser will be deemed to be in
default under this Note and the principal sum of this Note, together with all
interest accrued thereon, will immediately become due and payable in full: (a)
upon Purchaser's failure to make any payment when due under this Note; (b) in
the event Purchaser ceases to be employed by the Company (as defined in the
Purchase Agreement) for any reason; (c) upon any transfer of any of the Shares
(other than transfers exempt from the Company's Right of First Refusal (as
defined in the Purchase Agreement) pursuant to Section 6(f) of the Purchase
Agreement); (d) upon the filing by or against Purchaser of any voluntary or
involuntary petition in bankruptcy or any petition for relief under the federal
bankruptcy code or any other state or federal law for the relief of debtors, or
(e) upon the execution by Purchaser of an assignment for the benefit of
creditors or the appointment of a receiver, custodian, trustee or similar party
to take possession of Purchaser's assets or property.

     4. REMEDIES ON DEFAULT. Upon any default of Purchaser under this Note, the
Company will have, in addition to its rights and remedies under this Note and
the Pledge Agreement, full recourse against any real, personal, tangible or
intangible assets of Purchaser, and may pursue any legal or equitable remedies
that arc available to it.

     5. RULE 144 HOLDING PERIOD. PURCHASER UNDERSTANDS THAT THE HOLDING PERIOD
SPECIFIED UNDER RULE 144(d) OF THE SECURITIES AND EXCHANGE
<PAGE>   2
COMMISSION WELL NOT BEGIN TO RUN WITH RESPECT TO SHARES PURCHASED WITH THIS NOTE
UNTIL EITHER (A) THE PURCHASE PRICE OF SUCH SHARES IS PAID IN FULL IN CASH OR BY
OTHER PROPERTY ACCEPTED BY THE COMPANY, OR (B) TIES NOTE IS SECURED BY
COLLATERAL, OTHER THAN THE SHARES THAT HAVE NOT BEEN FULLY PAID FOR IN CASH,
HAVING A FAIR MARKET VALUE AT LEAST EQUAL TO THE AMOUNT OF PURCHASER'S THEN
OUTSTANDING OBLIGATION UNDER THIS NOTE (INCLUDING ACCRUED INTEREST).

     6. PREPAYMENT. Prepayment of principal and/or interest due under tins Note
may be made at any time without penalty. Unless otherwise agreed in writing by
the Company, all payments will be made in lawful tender of the United States and
will be applied first to the payment of accrued interest and the remaining
balance of such payment, if any, will then be applied to the payment of
principal. If Purchaser prepays all or a portion of the principal amount of this
Note, Purchaser intends that the Shares paid for by the portion of principal so
paid will continue to be held in pledge under the Pledge Agreement to serve as
independent collateral for the outstanding portion of this Note for the purpose
of commencing the holding period under Rule 144(d) of the Securities and
Exchange Commission with respect to other Shares purchased with this Note.

     7. GOVERNING LAW: WAIVER. The validity, construction and performance of
this Note will be governed by the internal laws of the State of California,
excluding that body of law pertaining to conflicts of law. Purchaser hereby
waives presentment, notice of non-payment, notice of dishonor, protest, demand
and diligence.

     8. ATTORNEYS' FEES. If suit is brought for collection of this Note,
Purchaser agrees to pay all reasonable expenses, including attorneys' fees,
incurred by the holder in connection therewith whether or not such suit is
prosecuted to judgment.

   IN WITNESS WHEREOF, Purchaser has executed this Note as of the date and
year first above written.

-------------------------------------   ----------------------------------------
Purchaser's Name [type or print]        Purchaser's Signature

            [SIGNATURE PAGE TO SECURED FULL RECOURSE PROMISSORY NOTE]

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00008-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00008-of-00352.parquet"}]]