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                                                                   EXHIBIT 10.7

                                LICENSE AGREEMENT

                             Kinetic Business Centre

        Made the 27th day of September 1999 between the Licensor, Sub-Licensor
and the Licensee. This agreement replaces all existing License Agreements
between the Licensor, Sub-Licensor and the Licensee.

        1. Particulars. In this Agreement the following expressions shall have
the following meanings:

           1.1 The Licensor. Office Dynamics Limited, Kinetic Centre, Theobald
Street, Borehamwood, Herts., WD6 4PJ, whose registered office is at 47 Holywell
Hill, St. Albans, AL1 1HD.

           1.2 The Sub-Licensor. Protege Property, a Division of Protege
Software Limited, Kinetic Centre, Theobald Street, Borehamwood, Herts., WD6 4PJ,
whose registered office is at 233-237 Old Marylebone Board, London, NW1 5QT.

           1.3 The Licensee.

<TABLE>
<S>                                <C>                    <C>
               Limited Company                 Title:     Virage Europe Limited
                                   Registered Office:     233-237 Old Marylebone Road
                                                          London, NW1 5QT
</TABLE>

           1.4 The Property. The land and buildings known as Kinetic Business
Centre.

           1.5 Designated Space. Suite No. 112, approximate square footage 300
or other office space comprising not less than the initial square feet taken
within the Property as the Sub-Licensor may in its absolute discretion designate
on one month's notice to the Licensee.

           1.6 Access Ways. The roads, paths, entrance, halls, corridors and
staircases of the Property the use of which is necessary for obtaining access to
and egress from the Designated Space and Car Park or such of them as afford
reasonable access and egress as above and as the Licensor may from time to time
in its absolute discretion designate on seven days notice to the Licensee.

           1.7 License Period. The period from the Commencement Date of this
Agreement until the date on which the Licensee's rights under Clause 2 are
determined in accordance with Clause 4.1.2.

           1.8 License Fee. L.1,262.50 per month plus VAT, or other such amount
as the Sub-Licensor may determine in its absolute discretion on one calendar
month's notice to the Licensee payable by Standing Order one month in advance.
The first payment of the License Fee is L.1,262.50 plus VAT.

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           1.9 Security Deposit. An amount equal to one month's license fee plus
VAT held as deposit by the Licensor against any breach of the Licensee's
undertakings, as security against any partition layout restoration, damage or
excessive wear and tear to the property and fixtures or fittings therein. This
deposit is refundable 30 days after the termination of the Agreement.

           1.10 Commencement Date. October 1, 1999.

           1.11 First Termination Date. March 31, 2000 being the earliest date
the Licensee may terminate the License Agreement having provided notice as
required under 4.1.2.

        2. License. Subject to Clauses 3 and 4, the Licensor gives the Licensee
and its employees the right (in common with the Licensor and all others
authorized by the Licensor so far as is not inconsistent with the rights given)
to use for the License Period:

           2.1 the Designated Space for the purposes of fully serviced offices
and

           2.2 the car park for cars and light vans on a non-reserved basis. No
vehicles may be parked overnight without written permission from the Licensor.
Whilst supply meets demand, there will be no additional charge if a Licensee
uses extra spaces but if demand exceeds supply then the Licensor reserves the
right to levy an additional charge for spaces on giving 30 days written notice
to the Licensee. Any vehicular use of the car park is at the user's risk
including by the Licensee, its employees, sub-contractors, customers, suppliers
and visitors.

           2.3 the kitchens for their designated purpose. Limited food
preparation may be carried out provided this does not inconvenience any other
Licensee.

           2.4 the Access Ways and toilets in the Property.

        3. Licensee's Undertakings. The Licensee agrees and undertakes:

           3.1 To pay to the Sub-Licensor the License Fee plus VAT in advance on
the first business day of each month by standing order the first payment or a
due proportion of it to be made on the date of this Agreement by cheque.

           3.2 To pay to the Sub-Licensor 0.25% per day of any outstanding
moneys if remaining unpaid by the 14th of the month up to a maximum of 50% of
the outstanding moneys in order to defray bank interest and to cover
administration time, related fees and expenses.

           3.3 To lodge the Security Deposit with the Sub-Licensor.

           3.4 Not to bring any furniture, equipment, goods or chattels on to
the Property without the consent of the Sub-Licensor save any as may be
necessary for the exercise of the rights given in Clause 2.1.

           3.5 Not to obstruct the Access Ways or cause the same to become dirty
or untidy nor to leave any rubbish on them.

           3.6 Not to display any signs or notices on any part of the Property.

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           3.7 Not to use any part of the Property so as to cause any nuisance,
damage, disturbance, annoyance, inconvenience or interference to the Property or
any adjoining or neighboring property or to the owners, occupiers or users of
any part of the Property or any such adjoining or neighboring property.

           3.8 Not to do any act, matter or thing which would or might vitiate
or increase in whole or in part any insurance effected in respect of the
Property from time to time and in particular not keep any volatile, hazardous or
inflammable materials within the Property.

           3.9 Immediately to give to the Licensor details of the registration
numbers of the vehicles which will be parked on the car park and the names of
the owners and drivers of such vehicles and to notify the Licensor prior to any
change in such details.

           3.10 To indemnify the Licensor and the Sub-Licensor and keep the
Licensor and Sub-Licensor indemnified against all losses, claims, demands,
actions, proceedings, damages, costs or expenses or other liability arising in
any way from this License, any breach of any of the Licensee's undertakings
contained in this Clause, or the exercise or purported exercise of any of the
rights given in Clause 2.

           3.11 To observe such rules and regulations as the Licensor may make
and of which the Licensor shall notify the Licensee from time to time relating
to the Property.

           3.12 Not to impede in any way the Licensor or its officers, servants
or agents in the exercise of the Licensor's rights of possession and control of
the Property and every part thereof.

           3.13 Not to drill, mark or in any way damage the integrated ceiling,
partition and door system.

           3.14 To acknowledge that there is a monetary value to attracting and
securing any new Licensee. In the event of the Licensee, or anyone directly
connected, providing alternative office space to any other Licensee, during or
within one year of the termination of the other Licensee's Agreement, then the
Licensee will reimburse to the Licensor the sum of L.2,000 plus VAT per
replacement Licensee as part costs of attracting and securing that replacement
Licensee.

           3.15 To acknowledge that the Licensor has expended considerable time
effort and expense in hiring and training its staff and that the hiring of a
member of staff by the Licensee would save the Licensee considerable time and
expense in training and procurement and would cause the Licensor to expend
additional time and expense. Therefore during this Agreement and for six months
after the termination of this Agreement if the Licensee hires a member of the
Licensor's staff who was an employee of the Licensor at any time during the
Agreement or for six months after its termination the Licensee agrees to pay the
Licensor a replacement procurement fee of L.2,000 plus VAT or 25% of the gross
annual salary plus VAT last paid by the Licensor, whichever is the greater.

           3.16 To enter into a Contract for Services with Kinetic Enterprises
for the exclusive supply and rental of all externally connected voice and data
lines, call services and associated equipment and standard office furniture.

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           3.17 Not to install any fixed computer network, alarm systems,
aerials, voice and data cabling or any other form of fixed cabling without the
prior written consent of the Licensor.

           3.18 To control the behavior of any children and pets visiting the
Property so that no inconvenience or disruption is caused to other Licensees and
the Licensor. The Licensor reserves the right to deny such visits if complaints
are received.

           3.19 To act in a manner considered reasonable by the majority of
Licensees and in particular to avoid disruptive behavior and the public use of
bad language.

           3.20 To advise the Licensor of any damage caused to fittings,
fixtures and equipment in the Designated Space within the same working day as
the damage is caused or observed. Damage alleged to be attributable to cleaners
will only be considered if notified in this way; otherwise the Licensee will be
held responsible.

           3.21 At all times to observe and comply in all respects with the
provisions and requirements of all enactments so far as they relate to the
Designated Space.

           3.22 To pay to the Licensor L.50 plus VAT towards the costs of custom
signage and the registrations required for a new Licensee. This sum will be
deducted from the security deposit upon termination of the Agreement.

           3.23 To advise any employee or sub-contractor of the Licensee of the
conditions and undertaking of this License Agreement that affect their
obligations on occupation and use of the Property.

        4. General.

           4.1 The rights granted in Clause 2 shall cease and determine (without
prejudice to the Licensor's rights in respect of any breach of the undertakings
contained in Clause 3):

               4.1.1 Immediately on notice given by the Licensor at any time
following any breach by the Licensee of any of its undertakings in Clause 3.

               4.1.2 On not less than three calendar month's notice given by the
Sub-Licensor or the Licensee to the other party to expire on the last day of a
month, such notice in the case of notice given by the Licensee to the
Sub-Licensor and to the Licensor to expire not earlier than the First
Termination Date.

               4.1.3 Immediately if the Licensee (being an individual) shall
become bankrupt or (being a company) shall enter into liquidation whether
compulsory or voluntary (save for the purpose of amalgamation or reconstruction
of a solvent company) or has an administration order made in respect of its
business or has a Receiver appointed of its undertaking or if the Licensee for
the time being shall enter into any arrangement or composition for the benefit
of the Licensee's creditors or shall suffer any distress or execution to be
levied on the Licensee's goods.

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           4.2 Upon determination of the said rights the Sub-Licensor may
re-enter the Designated Space and without prejudice to the generality of the
foregoing change the locks to the door or doors of the Designated Space and
seize any goods therein and sell the same to discharge or in the reduction of
any payments that may be due by the Licensee to the Sub-Licensor under this
Agreement.

           4.3 The benefit of this License is personal to the Licensee and not
assignable.

           4.4 The Licensor and the Sub-Licensor shall not be responsible to the
Licensee or the employees, sub-contractors, customers, suppliers or visitors of
the Licensee for any loss, injury, damage, nuisance or inconvenience which may
be caused to the Licensee, any employees, sub-contractors, customers, suppliers
or visitors of the Licensor or any goods or property of the Licensee by reason
of any act, neglect or default of any other occupier of neighboring premises of
any employee or agent of the or Sub-Licensor or by reason of or arising out of
the repair state, of repair condition or any alteration to or to the user of the
Designated Space or by reason of the defective, working, stoppage, breakage or
failure of any lighting system, drain pipe, appliance, equipment or machinery.

           4.5 All notices given by either party pursuant to the provisions of
this Agreement shall be in writing and shall be sufficiently served if delivered
by hand or sent by recorded delivery to the other party at its registered office
or last known address.

           4.6 Where any party consists of two or more persons, agreements and
undertakings by and with such persons shall be deemed to be joint and several.

        5. Licensors and Sub-Licensors Undertakings. The Licensor and
Sub-Licensor undertakes with the Licensee (subject to the Licensee carrying out
its undertakings hereunder) to provide the following services and facilities:

           5.1 To provide and maintain the Designated Space.

           5.2 A proprietary signing system displaying a list of occupying
companies at the Central Reception.

           5.3 A proprietary signing system displaying the suite number and name
of the Licensee on the door to the Designated Space.

           5.4 A cleaning service for the Designated Space and the Access Ways
and a facility for the removal of reasonable quantities of office waste from the
Designated Space.

           5.5 Proper sanitary conditions in the Property.

           5.6 To provide 2 keys for the main entrance and Designated Space.
Additional keys will be provided at the published cost. All keys have a security
deposit value of L.25 each in order to encourage their return when vacating the
Property.

           5.7 A bell facility for the convenience of out of hours visitors to
the Property.

           5.8 Water and CO2 fire extinguishers, fire alarm points and a fire
hose.

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           5.9 During the winter months central heating.

           5.10 Light and power.

           5.11 Maintaining and keeping the Property in reasonable repair.
Provided always as follows:

           5.12 In carrying our its undertakings hereunder the Licensor and
Sub-Licensor shall be entitled to employ such responsible agents, contractors
and other persons as they may think fit.

           5.13 The Licensor and Sub-Licensor shall not be responsible for any
temporary delay or stoppage in connection with the carrying out of any of its
said undertakings or for any temporary omission to perform the same if such
temporary failure, delay, stoppage or omission shall be due to any circumstances
outside its control but the Licensor and Sub-Licensor shall nevertheless take
all reasonable steps to remedy or make good such failure, delay, stoppage or
omission as aforesaid as soon as reasonably possible.

           AS WITNESS the hands of the parties hereto:

LICENSOR:                                        SUB-LICENSOR

KINETIC BUSINESS CENTRE                          PROTEGE SOFTWARE LIMITED

By: /s/ Sharon Kent                              By: /s/ Larry Levy
    --------------------------                       --------------------------
    Sharon Kent                                      Larry Levy
    Manager                                          Director

LICENSEE:

VIRAGE EUROPE LIMITED

By: /s/ Mark Rattley
    --------------------------
    Mark Rattley
    General Manager

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                                                                    EXHIBIT 10.8

                           SECURITY AND LOAN AGREEMENT
                             [(ACCOUNTS RECEIVABLE)

        This Agreement is entered into between VIRAGE, INC., a Delaware
corporation (herein called "Borrower"), and IMPERIAL BANK (herein called
"Bank").

        1. Bank hereby commits, subject to all the terms and conditions of this
Agreement and prior to the termination of its commitment as hereinafter
provided, to make loans to Borrower from time to time in such amounts as may be
determined by Bank up to, but not exceeding in the aggregate, unpaid principal
balance, the following Borrowing Base:

                           80.00% of Eligible Accounts

and in no event more than $1,500,000.00.

        2. The amount of each loan made by Bank to Borrower hereunder shall be
debited to the loan ledger account of Borrower maintained by Bank (herein called
"Loan Account") and Bank shall credit the Loan Account on demand following the
occurrence and during the continuance of an Event of Default (as defined in the
Promissory Note), and (b) on or before the tenth day of each month, interest on
the average daily unpaid balance of the Loan Account during the immediately
preceding month at the rate of One-quarter percent (0.250%) per annum less than
the rate of interest which Bank has announced as its prime lending rate ("Prime
Rate") which shall vary concurrently with any change in such Prime Rate.
Interest shall be computed at the above rate on the basis of the actual number
of days during which the principal balance of the loan account is outstanding
divided by 360, which shall for interest computation be considered one year. The
amount of interest payable each month by Borrower shall not be less than a
minimum monthly charge of $ N/A. Bank is hereby authorized to charge Borrower's
deposit account(s) with Bank for all sums due Bank under this Agreement.

        3. Requests for loans hereunder shall be in writing duly executed by
Borrower in a form satisfactory to Bank and shall contain a certification
setting forth the matters referred to in Section 1, which shall disclose that
Borrower is entitled to the amount of loan being requested.

        4. As used in this Agreement, the following terms shall have the
following meanings:

           a. "Accounts" means any right to payment for goods sold or leased, or
to be sold or to be leased, or for services rendered or to be rendered no matter
how evidenced, including accounts receivable, contract rights, chattel paper,
instruments, purchase orders, notes, drafts, acceptances, general intangibles
and other forms of obligations and receivables.

           b. "Collateral" means any and all personal property of Borrower which
is assigned or hereafter is assigned to Bank as security or in which Bank now
has or hereafter acquires a security interest.

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           c. "Eligible Accounts" means all of Borrower's Accounts excluding,
however, (1) all Accounts under which payment is not received within 90 days
from any invoice date, (2) all Accounts against which the account debtor or any
other person obligated to make payment thereon asserts any defense, offset,
counterclaim or other right to avoid or reduce the liability represented by the
Account to the extent of such defense, offset, counterclaim or other rights and
(3) any Accounts if the account debtor or any other person liable in connection
therewith is insolvent, subject to bankruptcy or receivership proceedings or has
made an assignment for the benefit of creditors or whose credit standing is
unacceptable to Bank and Bank has so notified Borrower. Eligible accounts shall
only include such accounts as Bank in its reasonable discretion shall determine
are eligible from time to time.

        5. Borrower hereby assigns to Bank all Borrower's present and future
Accounts, including all proceeds due thereunder, all guaranties and security
therefor, and hereby grants to Bank a continuing security interest in all moneys
in the Collateral Account referred to in Section 6 hereof, as security for any
and all obligations of Borrower to Bank, whether now owing or hereafter incurred
and whether direct, indirect, absolute or contingent. So long as Borrower is
indebted to Bank or Bank is committed to extend credit to Borrower, Borrower
will execute and deliver to Bank such assignments, including Bank's standard
forms of Specific or General Assignment covering individual Accounts, notices,
financing statements, and other documents and papers as Bank may require in
order to affirm, effectuate or further assure the assignment to Bank of the
Collateral or to give any third party, including the account debtors obligated
on the Accounts, notice of Bank's interest in the Collateral.

        6. Until Bank exercises its rights to collect the Accounts pursuant to
paragraph 10, Borrower will collect with diligence all Borrower's Accounts. Any
collection of Accounts by Borrower, whether in the form of cash, checks, notes,
or other instruments for the payment of money (properly endorsed or assigned
where required to enable Bank to collect same), shall be in trust for Bank, and
Borrower shall keep all such collections separate and apart from all other funds
and property so as to be capable of identification as the property of Bank and
deliver said collections daily to Bank in the identical form received. The
proceeds of such collections when received by Bank may be applied by Bank
directly to the payment of Borrower's Loan Account or any other obligation
secured hereby. Any credit given by Bank upon receipt of said proceeds shall be
conditional credit subject to collection. Returned items at Bank's option may be
charged to Borrower's general account. All collections of the Accounts shall be
set forth on an itemized schedule, showing the name of the account debtor, the
amount of each payment and such other information as Bank may request.

        7. Until Bank exercises its rights to collect the Accounts pursuant to
paragraph 10, Borrower may continue its present policies with respect to
returned merchandise and adjustments. However, Borrower shall immediately notify
Bank of all cases involving returns, repossessions, and loss or damage of or to
merchandise represented by the Accounts and of any credits, adjustments or
disputes arising in connection with the goods or services represented by the
Accounts where the dollar value of such returns based on Accounts invoiced
exceed $75,000.00.

        8. Borrower represents and warrants to Bank: (i) If Borrower is a
corporation, that Borrower is duly organized and existing in the State of its
incorporation and the execution,

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delivery and performance hereof are within Borrower's corporate powers, have
been duly authorized and are not in conflict with law or the terms of any
charter, by-law or other incorporation papers, or of any indenture, agreement or
undertaking to which Borrower is a party or by which Borrower is found or
affected; (ii) Borrower is, or at the time the collateral becomes subject to
Bank's security interest will be, the true and lawful owner of and has, or at
the time the Collateral becomes subject to Bank's security interest will have,
good and clear title to the Collateral, subject only to Bank's rights therein
and Permitted Liens; (iii) Each Account is, or at the time the Account comes
into existence will be, a true and correct statement of a bona fide indebtedness
incurred by the debtor named therein in the amount of the Account for either
merchandise sold or delivered for being held subject to Borrower's delivery
instructions) to, or services rendered, performed and accepted by, the account
debtor; (iv) That there are or will be no defenses, counterclaims, or setoffs
which may be asserted against the Eligible Accounts; and (v) any and all
financial information, including information relating to the Collateral,
submitted by Borrower to Bank, whether previously or in the future, is or will
be true and correct.

        9. Borrower will: (i) Furnish Bank from time to time such financial
statements and information as Bank may reasonably request and inform Bank
immediately upon the occurrence of a material adverse change thereon; (ii)
Furnish Bank, on such form and detail and at such times as Bank may require,
statements showing aging and reconciliation of the Accounts and collectibles
thereon; (iii) Permit representatives of Bank to inspect the Borrower's books
and records relating to the Collateral and make extracts therefrom at any
reasonable time and to arrange for verification of the Accounts, under
reasonable procedures (and in no event under Bank's own name) acceptable to
Bank, directly with the account debtors or otherwise at Borrower's expense; (iv)
Promptly notify Bank of any attachment or other legal process levied against any
of the Collateral and any information received by Borrower relative to the
Collateral, including the Accounts, the account debtors or other persons
obligated in connection therewith, which may in any way materially affect the
value of the Collateral or the rights and remedies of Bank in respect thereto;
(v) Reimburse Bank upon demand for any and all legal costs, including reasonable
attorneys' fees, and other expense incurred in collecting any sums payable by
Borrower under Borrower's Loan Account or any other obligation secured hereby,
enforcing any term or provision of this Security Agreement or otherwise or in
the checking, handling and collection of the Collateral and the preparation and
enforcement of any agreement relating thereto; (vi) Notify Bank of each location
and of each office of Borrower at which records of Borrower relating to the
Accounts are kept; (vii) Provide, maintain and deliver to Bank policies insuring
the Collateral against loss or damage by such risks and in such amounts, forms
and companies as Bank may require and with loss payable only to Bank and such
other lenders of loans secured by the Collateral and to which Bank has
consented, and, in the event Bank takes possession of the Collateral, the
insurance policy or policies and any unearned or returned premium thereon shall
at the option of Bank become the sole property of Bank, such policies and the
proceeds of any other insurance covering or in any way relating to the
Collateral, whether now in existence or hereafter obtained, being hereby
assigned to Bank (in no event, however, may Bank terminate or reduce any
insurance coverage); (viii) In the event the unpaid balance of Borrower's Loan
Account shall exceed the maximum amount of outstanding loans to which Borrower
is entitled under Section 1 hereof, Borrower shall immediately pay to Bank, from
its own funds and not from the proceeds of Collateral, for credit to Borrower's
Loan Account the amount of such excess.

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        10. Bank may at any time following the occurrence and during the
continuance of an Event of Default, without prior notice to Borrower, collect
the Accounts and may give notice of assignment to any and all account debtors,
and Borrower hereby make, constitute and appoint Bank its irrevocable, true and
lawful attorney with power following the occurrence and during the continuance
of an Event of Default to receive, open and dispose of all mail addressed to
Borrower, to endorse the name of Borrower upon any checks or other evidences of
payment that may come into the possession of Bank upon the Accounts to endorse
the name of the undersigned upon any document or instrument relating to the
Collateral; in its name or otherwise, to demand, sue for, collect and give
acquittances for any and all moneys due or to become due upon the Accounts; to
compromise, prosecute or defend any action, claim or proceeding with respect
thereto; and to do any and all things necessary and proper to carry out the
purpose herein contemplated.

        11. Until Borrower's Loan Account and all other obligations secured
hereby shall have been repaid in full, Borrower shall not sell, dispose of or
grant a security interest in any of the Collateral other than Permitted Liens
other than to Bank, or execute any financing statements covering the Collateral
in favor of any secured party or person other than Bank and other than holders
of Permitted Liens.

        12. Should: (i) An Event of Default occur in the payment of any
obligation, or breach be made in any warranty, statement, promise, term or
condition, contained herein or hereby secured; (ii) Any statement or
representation made for the purpose of obtaining credit hereunder prove
materially false; (iii) Bank deem the Collateral materially inadequate or in
relation to the outstanding obligations; (iv) Borrower become insolvent or make
an assignment for the benefit of creditors; or (v) Any proceeding be commenced
by or against Borrower under any bankruptcy, reorganization, arrangement,
readjustment of debt or moratorium law or statute; then in any such event, Bank
may, at its option and without demand first made and without notice to Borrower,
do any one or more of the following: (a) Terminate its obligation to make loans
to Borrower as provided in Section 1 hereof; (b) Declare all sums secured hereby
immediately due and payable; (c) Immediately take possession of the Collateral
wherever it may be found, using all necessary force so to do, or require
Borrower to assemble the Collateral and make it available to Bank at a place
designated by Bank which is reasonably convenient to Borrower and Bank, and
Borrower waives all claims for damages due to or arising from or connected with
any such taking; (d) Proceed in the foreclosure of Bank's security interest and
sale of the Collateral in any manner permitted by law, or provided for herein;
(e) Sell, lease or otherwise dispose of the Collateral at public or private
sale, with or without having the Collateral at the place of sale, and upon terms
and in such manner as Bank may determine, and Bank may purchase same at any such
sale; (f) Retain the Collateral in full satisfaction of the obligations secured
thereby; (g) Exercise any remedies of a secured party under the Uniform
Commercial Code. Prior to any such disposition, Bank may, at its option, cause
any of the Collateral to be repaired or reconditioned in such manner and to such
extent as Bank may deem advisable, and any sums expended therefor by Bank shall
be repaid by Borrower and secured hereby. Bank shall have the right to enforce
one or more remedies hereunder successively or concurrently, and any such action
shall not estop or prevent Bank from pursuing any further remedy which it may
have hereunder or by law. If a sufficient sum is not realized from any such
disposition of Collateral to pay all obligations secured by this Security
Agreement, Borrower hereby promises and agrees to pay Bank any deficiency.

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        13. If any writ of attachment, garnishment, execution or other legal
process be issued against any property of Borrower by the Federal or State
government or any department thereof, of if any assessment for taxes against
Borrower, other than real property, is made by the Federal or State government
or any department thereof and such action or legal process has a material
adverse effect on the ability of the Borrower to satisfy its obligations
hereunder, the obligation of Bank to make loans to Borrower as provided in
Section 1 hereof shall immediately terminate and the unpaid balance of the Loan
Account, all other obligations secured hereby and all other sums due hereunder
shall immediately become due and payable without demand, presentment or notice.

        14. Borrower authorizes Bank to destroy all invoices, delivery receipts,
reports and other types of documents and records submitted to Bank in connection
with the transactions contemplated herein at any time subsequent to four months
from the time such items are delivered to Bank.

        15. Nothing herein shall in any way limit the effect of the conditions
set forth in any other security or other agreement executed by Borrower, but
each and every condition hereof shall be in addition thereto.

        16. Should an Event of Default occur in the payment of principal or
interest when due, or in the performance or observance, when due, of any item,
covenant or condition of this Agreement, any deed of trust, security agreement
or other agreement (including amendments or extensions thereof) securing or
pertaining to this Agreement, at the option of the holder hereof and without
notice or demand, the entire balance of principal and accrued interest then
remaining unpaid shall (a) become immediately due and payable, and (b)
thereafter bear interest, until paid in full, at the increased rate of 5% per
year in excess of the rate provided for above, as it may vary from time to time.

        17. If any installment payment, interest payment, principal payment or
principal balance payment due hereunder is delinquent twenty (20) or more days,
Borrower agrees to pay Bank a late charge in the amount of 5% of the payment so
due and unpaid, in addition to the payment; but nothing in this paragraph is to
be construed as any obligation on the part of the Bank to accept payment of any
payment past due or less than the total unpaid principal balance after maturity.

        All payments shall be applied first to any late charges owing, then to
interest and the remainder, if any, to principal.

        18. Reference Provision.

            a. Other than (i) non-judicial foreclosure and all matters in
connection therewith regarding security interests in real or personal property;
or (ii) the appointment of a receiver, or the exercise of other provisional
remedies (any and all of which may be initiated pursuant to applicable law),
each controversy, dispute or claim between the parties arising out of or
relating to this document ("Agreement"), which controversy, dispute or claim is
not settled in writing within thirty (30) days after the "Claim Date" (defined
as the date on which a party subject to the Agreement gives written notice to
all other parties that a controversy, dispute or

                                       5
<PAGE>   6
claim exists), will be settled by a reference proceeding in California in
accordance with the provisions of Section 638 et seq. of the California Code of
Civil Procedure, or their successor section ("CCP"), which shall constitute the
exclusive remedy for the settlement of any controversy, dispute or claim
concerning this Agreement, including whether such controversy, dispute or claim
is subject to the reference proceeding and except as set forth above, the
parties waive their rights to initiate any legal proceedings against each other
in any court or jurisdiction other than the Superior Court in the County where
the Real Property, if any, is located or San Mateo County if none (the "Court").
The referee shall be a retired judge of the Court selected by mutual agreement
of the parties, and if they cannot so agree within forty-five (45) days after
the Claim Date, the referee shall be promptly selected by the Presiding Judge of
the Court (or his representative). The referee shall be appointed to sit as a
temporary judge, with all of the powers of a temporary judge, as authorized by
law, and upon selection should take and subscribe to the oath of office as
provided for in Rule 244 of the California Rules of Court (or any subsequently
enacted Rule). Each party shall have one peremptory challenge pursuant to CCP
Section 170.6. The referee shall (a) be requested to set the matter for hearing
within sixty (60) days of the Claim Date and (b) try any and all issues of law
or fact and report a statement of decision upon them, if possible, within ninety
(90) days of the Claim Date. Any decision rendered by the referee will be final,
binding and conclusive and judgment shall be entered pursuant to CCP Section 644
in any court in the State of California having jurisdiction. Any party may apply
for a reference proceeding at any time after thirty (30) days following notice
to any other party of the nature of the controversy, dispute or claim, by filing
a petition for a hearing and/or trial. All discovery permitted by this Agreement
shall be completed no later than fifteen (15) days before the first hearing date
established by the referee. The referee may extend such period in the event of a
party's refusal to provide requested discovery for any reason whatsoever,
including, without limitation, legal objections raised to such discovery or
unavailability of a witness due to absence or illness. No party shall be
entitled to "priority" in conducting discovery. Depositions may be taken by
either party upon seven (7) days written notice, and request for production of
documents shall be responded to within ten (10) days after service. All disputes
relating to discovery which cannot be resolved by the parties shall be submitted
to the referee whose decision shall be final and binding upon the parties.
Pending appointment of the referee as provided herein, the Superior Court is
empowered to issue temporary and/or provisional remedies, as appropriate.

            b. Except as expressly set forth in this Agreement, the referee
shall determine the manner in which the reference proceeding is conducted
including the time and place of all hearings, the order of presentation of
evidence, and all other questions that arise with respect to the course of the
reference proceeding. All proceedings and hearings conducted before the referee,
except for trial, shall be conducted without a court reporter, except that when
any party so requests, a court reporter will be used at any hearing conducted
before the referee. The party making such a request shall have the obligation to
arrange for and pay for the court reporter. The costs of the court reporter at
the trial shall be borne equally by the parties.

            c. The referee shall be required to determine all issues in
accordance with existing case law and the statutory laws of the State of
California. The rules of evidence applicable to proceedings at law in the State
of California will be applicable to the reference proceeding. The referee shall
be empowered to enter equitable as well as legal relief, to provide all
temporary and/or provisional remedies and to enter equitable orders that will be
binding upon

                                       6
<PAGE>   7

the parties. The referee shall issue a single judgment at the close of the
reference proceeding which shall dispose of all of the claims of the parties
that are the subject of the reference. The parties hereto expressly reserve the
right to contest or appeal from the final judgment or any appealable order or
appealable judgment entered by the referee. The parties hereto expressly reserve
the right to findings of fact, conclusions of law, a written statement of
decision, and the right to move for a new trial or a different judgment, which
new trial, if granted, is also to be a reference proceeding under this
provision.

            d. In the event that the enabling legislation which provides for
appointment of a referee is repealed (and no successor statute is enacted), any
dispute between the parties that would otherwise be determined by the reference
procedure herein described will be resolved and determined by arbitration. The
arbitration will be conducted by a retired judge of the Court, in accordance
with the California Arbitration Act, Section 1280 through Section 1294.2 of the
CCP as amended from time to time. The limitations with respect to discovery as
set forth hereinabove shall apply to any such arbitration proceeding.

        19. Additional Provisions.

[X]     If checked, the Addendum or Exhibit "A" attached (and all amendments
        thereto and replacements therefor) is incorporated herein by this
        reference.

Executed this 2nd day of November, 1998.

                                        IMPERIAL BANK

                                        By: /s/ Ronald T. Kundich
                                            -----------------------------------
                                        Title:  Assistant Vice President

                                        Virage, Inc., a Delaware corporation
                                        ---------------------------------------
                                        (Name of Borrower)

                                        By: /s/ Paul Lego
                                            -----------------------------------
                                            (Authorized Signature/and Title)

                                       By:
                                            -----------------------------------
                                            (Authorized Signature/and Title)

                                       7
<PAGE>   8

                                   "EXHIBIT A"

ADDENDUM TO SECURITY AND LOAN AGREEMENT
BETWEEN VIRAGE, INC.  AND
IMPERIAL BANK
DATED: NOVEMBER 2, 1998

This Addendum is made and entered into as November 2, 1998, between VIRAGE, INC.
(Borrower") and IMPERIAL BANK ("Bank"). This Addendum amends and supplements the
Security and Loan Agreement executed this date hereof between Borrower and Bank.
In the event of any inconsistency between the terms herein and the terms of the
Security and Loan Agreement, the terms herein shall in all cases govern and
control. All capitalized terms herein, unless otherwise defined herein, shall
have the meaning set forth in the Security and Loan Agreement.

1. Any commitment of Bank, pursuant to the terms of the Security and Loan
Agreement, to make advances against Eligible Accounts shall expire November 1,
1999, subject to Bank's right to renew said commitment in its sole discretion.
Any such renewal of the commitment shall not be binding upon Bank unless it is
in writing and signed by an officer of the Bank.

2. Borrower represents and warrants that:

        a. LITIGATION. There is no litigation or other proceeding pending or
threatened against or affecting Borrower, and Borrower is not in default with
respect to any order, writ, injunction, decree or demand of any court or other
governmental or regulatory authority.

        b. FINANCIAL CONDITION. The balance sheet of Borrower of September 30,
1998 and the related profit and loss statement on that date, a copy of which has
heretofore been delivered to Bank by Borrower, and all other statements and data
submitted in writing by Borrower to Bank in connection with this request for
credit are true and correct, and said balance sheet and profit and loss
statement truly present the financial condition of Borrower as of the date
thereof and the results of the operations of Borrower for the period covered
thereby, and have been prepared in accordance with generally accepted accounting
principles on a basis consistently maintained. Since such date, there have been
no materially adverse changes in the financial condition or business of
Borrower. Borrower has no knowledge of any liabilities, contingent or otherwise,
at such date not reflected in said balance sheet, and Borrower has not entered
into any special commitments or substantial contracts which are not reflected in
said balance sheet, other than in the ordinary and normal course of its
business, which may have a materially adverse effect upon its financial
condition, operations or business as now conducted.

        c. TRADEMARKS, PATENTS. Borrower, as of the date hereof, possesses all
necessary trademarks, trade names, copyrights, patents, patent rights, and
licenses to conduct its business as now operated, without any known conflict
with valid trademarks, trade names, copyrights, patents and license rights of
others for which it has not licensed the rights.

<PAGE>   9

        d. TAX STATUS. Borrower has no liability for any delinquent state, local
or federal taxes, and, if Borrower has contracted with any government agency,
Borrower has no liability for renegotiation of profits.

        e. YEAR 2000 PROBLEM. Borrower and its subsidiaries have reviewed the
areas within their operations and business which could be adversely affected by,
and have developed or are developing a program to address on a timely basis, the
Year 2000 Problem and have made related appropriate inquiry of material
suppliers and vendors, and based on such review and program, the Year 2000
Problem will not have a Material Adverse Effect upon its financial condition,
operations or business as now conducted. "Year 2000 Problem" means the
possibility that any computer applications or equipment used by Borrower may be
unable to recognize and properly perform date-sensitive functions involving
certain dates prior to and any dates on or after December 31, 1999.

3. Borrower agrees that so long as it is indebted to Bank, or so long as the
Bank has any obligation to extend credit to Borrower, it WILL NOT, without
Bank's WRITTEN CONSENT:

        a. TYPE OF BUSINESS. MANAGEMENT. Make any substantial change in the
character of its business; or make any change in its executive management unless
Borrower has provided Bank with written notification.

        b. OUTSIDE INDEBTEDNESS. Create, incur, assume or permit to exist any
indebtedness for borrowed moneys other than loans from Bank except obligations
now existing as shown in financial statement dated 09/30/98 (including those
being refinanced by Bank) and future subordinated debt and or lease financing
from Comdisco in an amount no greater than $2,500,000; or sell or transfer,
either with or without recourse, any accounts or notes receivable or any moneys
due to become due.

        c. LIENS AND ENCUMBRANCES. Create, incur, assume any mortgage, pledge,
encumbrance, lien or charge of any kind (including the charge upon property at
any time purchased or acquired under conditional sale or other title retention
agreement) upon any asset now owned or hereafter acquired by it, other than
Permitted Liens and liens in Bank's favor.

        d. LOANS, INVESTMENTS, SECONDARY LIABILITIES. Make any loans or advances
to any person or other entity other than in the ordinary and normal course of
its business as now conducted or make any investment in the securities of any
person or other entity other than the United States Government; or guarantee or
otherwise become liable upon the obligation of any person or other entity,
except by endorsement of negotiable instruments for deposit or collection in the
ordinary and normal course of its business.

        e. ACQUISITION OR SALE OF BUSINESS; Merger or Consolidation. Purchase or
otherwise acquire all or substantially all the assets or business of any person
or other entity; or liquidate or dissolve; or merge or consolidate (unless
Borrower has received Bank's consent thereto which consent shall not be
reasonably withheld); or commence any proceedings therefore; or sell any assets
except in the ordinary and normal course of its business as now constituted; or
sell, lease, assign or transfer any substantial part of its business or fixed
assets, or any property or other assets necessary for the continuance of its
business as now conducted, except for equipment leases.

                                       2
<PAGE>   10

        f. DIVIDENDS, STOCK PAYMENTS. Declare or pay any dividend (other than
dividends payable in common stock of Borrower) or make any other distribution on
any of its capital stock now outstanding or hereafter issued, or purchase,
redeem or retire any of such stock, other than redemptions of stock of departed
employees.

4. This Security and Loan Agreement extends to all obligations of Borrower to
Bank, whether outstanding on the date of the Security and Loan Agreement or in
the future. Should there be an Event of Default under the Security and Loan
Agreement, the Commercial Security Agreement, or under any note executed by
Borrower in favor of Bank, or under any other document executed by Borrower in
favor of Bank, all obligations, loans and liabilities of Borrower to Bank, due
or to become due, whether now existing or hereafter arising, shall at the option
of the Bank, become immediately due and payable without notice or demand, and
Bank shall thereupon have the right to exercise all of its default rights and
remedies.

5. In addition to the provisions in the Security and Loan Agreement, Eligible
Accounts shall only include such accounts as Bank in its reasonable discretion
shall determine are eligible from time to time. "Eligible Accounts " shall also
not include the following:

        a. Accounts with respect to which the account debtor is an officer,
director, shareholder, employee, subsidiary or affiliate of Borrower.

        b. Accounts with respect to which 50% or more of the account debtor's
total accounts or obligations outstanding to Borrower are more than 90 days past
due.

        c. Salesmen's accounts for promotional purposes.

        d. For Accounts representing more than 25% of total accounts receivables
, the balance in excess of the 25%. However, the Bank may deem, at its sole
discretion, the entire amount eligible .

        e. Accounts with respect to international transactions, unless covered
by letters of credit issued or confirmed by a bank acceptable to the Bank. Only
those foreign companies that the Bank in its sole discretion considers well
known and rated will be considered eligible.

        f. Credit balances greater than 90 days past due.

        g. U.S. Government receivables , unless assigned to the Bank in form and
substance satisfactory to Bank.

        h. Accounts more than 90 days from the invoice date .

        i. All Accounts against which the account debtor or any other person
obligated to make payment thereon asserts any defense, offset, counterclaim, or
other right to avoid or reduce the liability represented by the Account to the
extent of such defense, offset, counterclaim or other reduction of the Accounts.

                                       3
<PAGE>   11

        j Any Account if the account debtor or any other person liable in
connection therewith is insolvent, subject to bankruptcy or receivership
proceedings or has made an assignment for the benefit of creditors or whose
credit standing is unacceptable to Bank and Bank has so notified Borrower.

        k. Accounts where the account debtor is a seller to Borrower, whereby a
potential offset (contra) exists to the extent of such potential offset.

        l. Consignment or guaranteed sales.

        m. Bill and hold accounts.

        n. Collection accounts.

        o. C.O.D. accounts.

        p. Accounts representing billings for service or maintenance contracts
or for inventory or equipment on rent to the account debtor.

        q. Deferred revenues.

        r. Pre-billings.

6. All financial covenants and financial information referenced herein shall be
interpreted and prepared in accordance with generally accepted accounting
principles applied on a basis consistent with previous years. Compliance with
financial covenants shall be calculated and monitored on a quarterly basis.

7. Borrower affirmatively covenants that so long as any loans, obligations or
liabilities remain outstanding or unpaid to Bank, or so long as the Bank has any
obligation to extend credit to Borrower, it WILL:

        a. Have and maintain a Minimum Tangible Net Worth plus subordinated
debt, measured quarterly, of $2,000,000. Tangible Net Worth plus subordinated
debt is the financial statement net worth of the Borrower prepared according to
generally accepted accounting principles less intangible assets, plus long term
indebtedness fully subordinated to the debt due to Bank.

        b. Have and maintain a ratio of Maximum Total Liabilities to Tangible
Net Worth plus subordinated debt, measured monthly, of 1.25 to 1.0. Total
Liabilities are all of the Borrower's liabilities and long term indebtedness
fully subordinated to the Bank less any deferred maintenance contract revenue.
Tangible Net Worth plus subordinated debt is the financial statement net worth
of the Borrower prepared according to generally accepted accounting principles
less intangible assets, plus long term indebtedness fully subordinated to the
debt due to Bank.

        c. Have and maintain Minimum Quick Ratio, measured monthly, of 1.50:1.0.
Quick Ratio is defined as cash and cash equivalents plus accounts receivable
divided by current liabilities.

        d. Maintain books and accounting practices satisfactory to Bank and
agrees to pay Bank for up to one collateral audits per year. Audit fees shall be
no greater than $1,500.00 per audit.

                                       4
<PAGE>   12

        e. Reimburse Bank for all reasonable out-of-pocket expenses (if any)
incurred by Bank in connection with its due diligence and closing of this
transaction. Out-of-pocket expenses shall be no greater than $2,500.00.

        f. Maintain primary operating and depository accounts with Bank.

        g. At least 20 days prior to the initial advance by Bank and within 20
days of each month-end thereafter (while such borrowings are outstanding),
deliver to Bank monthly aged listings of accounts receivable (to include
customer addresses and phone numbers) and accounts payable along with a
borrowing base certificate in form and substance acceptable to Bank.

        h. Within 30 days after the end of each month, deliver to Bank a profit
and loss statement, a balance sheet and compliance certificate in form
satisfactory to Bank, all certified by an officer of Borrower.

        i. Within 90 days after the end of Borrower's fiscal year, deliver to
Bank unqualified CPA audited financial statements (beginning with the fiscal
year ended March 31, 1999).

        j. Deliver to Bank budgets, sales projections, operating plans, or other
financial exhibits which Bank may reasonably request.

        k. RIGHTS AND FACILITIES. Maintain and preserve all rights, franchises
and other authority adequate for the conduct of its business; maintain its
properties, equipment and facilities in good order and repair; conduct its
business in an orderly manner without voluntary interruption and, if a
corporation or partnership, maintain and preserve its existence.

        l. INSURANCE. Maintain public liability, property damage and workers
compensation insurance and insurance on all its insurable property against fire
and other hazards with responsible insurance carriers to the extent usually
maintained by similar businesses. Borrower shall provide evidence of property
insurance in amounts and types acceptable to the Bank and Bank shall be named as
Loss Payee in a Lender's Loss Payable Endorsement form 438BFU or equivalent.

        m. TAXES AND OTHER LIABILITIES. Pay and discharge, before the same
become delinquent and before penalties accrue thereon, all taxes, assessments
and governmental charges upon or against it or any of its properties, and any of
its other liabilities at any time existing, except to the extent and so long as:

        (a)     The same are being contested in good faith and by appropriate
                proceedings in such manner as not to cause any materially
                adverse effect upon its financial condition or the loss of any
                right of redemption from any sale thereunder; and

        (b)     It shall have set aside on its books reserves (segregated to the
                extent required by generally accepted accounting practice)
                deemed by it adequate with respect thereto.

                                       5
<PAGE>   13

        n. RECORDS AND REPORTS. Maintain a standard and modern system of
accounting in accordance with generally accepted accounting principles on a
basis consistently maintained; permit Bank's representatives to have access to,
and to examine its properties, books and records at all reasonable times.

8. FEES AND INTEREST:

        a. The rate of interest applicable to the Loan Account shall be 0.25%
per year less than the rate of interest which Bank has announced as its prime
lending rate ("Prime Rate") which shall vary concurrently with any change in
such Prime Rate. No fee will be due upon execution of this document.

Interest shall be computed at the above rate on the basis of the actual number
of days during which the principal balance of the Loan Account is outstanding
divided by 360, which shall for interest computation purposes be considered one
year.

9. MISCELLANEOUS PROVISIONS. Failure or Indulgence Not Waiver. No failure or
delay on the part of your Bank or any holder or Notes Issued hereunder, in the
exercise of any power, right or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise thereof or of any other right,
power or privilege. All rights and remedies existing under this agreement or any
not issued in connection with a loan that your Bank may make hereunder, are
cumulative to, and not exclusive of, any rights or remedies otherwise available.

10. Notwithstanding the provisions of the Security and Loan Agreement (Accounts
Receivable and/or Inventory), the following provision shall apply to all
obligations of the Borrower to the Bank: All sums received by Bank, whether from
Borrower or from Borrower's account debtors, shall be applied to the outstanding
loan balance immediately upon receipt thereof by the Bank. The Borrower will be
charged, on a monthly basis, for the uncollected balance fees.

11. NOTICE OF DEFAULT. Borrower shall promptly notify Bank in writing of the
occurrence of any event of default hereunder or any event which upon notice and
lapse of time would be an event of default.

12. PERMITTED LIENS. "Permitted Liens" means the following:

        a.      liens and security interests existing as of this date,
                specifically the Comdisco Lease and the Sun Microsystems Lease;

        b.      liens for taxes, fees, assessments or other governmental charges
                or levies, either not delinquent or being contested in good
                faith by appropriate proceedings;

        c.      liens and security interests (a) upon or in any equipment (which
                shall be deemed to include software) acquired or held by
                Borrower to secure the purchase price of such equipment and in
                an amount not greater than the purchase price thereof or (b)
                existing on such equipment at the time of its acquisition,
                provided that the lien and security interest is confined solely
                to the property so acquired and improvements thereon, and the
                proceeds of such equipment;

                                       6
<PAGE>   14

        d.      liens consisting of leases or subleases and licenses and
                sublicenses granted to others in the ordinary course of
                Borrower's business not interfering in any material respect with
                the business of Borrower and any interest or title of a lessor
                or licensor under any lease or license, as applicable;

        e.      liens securing claims or demands of materialmen, mechanics,
                carriers, warehousemen, landlords and other like persons or
                entities imposed without action of such parties, provided that
                the payment thereof is not yet required;

        f.      liens incurred or deposits made in the ordinary course of
                Borrower's business in connection with worker's compensation,
                unemployment insurance, social security and other like laws;

        g.      liens arising from judgements, decrees or attachments in
                circumstances not constituting an Event of Default;

        h.      easements, reservations, rights-of-way, restrictions, minor
                defects or irregularities in title and other similar charges or
                encumbrances affecting real property not interfering in any
                material respect with the ordinary conduct of Borrower's
                business;

        i.      liens in favor of customs and revenue authorities arising as a
                matter of law to secure payment of customs duties in connection
                with the importation of goods;

        j.      liens that are not prior to Bank's security interest which
                constitute rights of set-off of a customary nature;

        k.      any interest or title of a lessor in equipment subject to any
                capitalized lease otherwise permitted hereunder; and

        l.      any liens arising from the filing of any financing statements
                relating to true leases otherwise permitted hereunder.

        This addendum is executed by and on behalf of the parties as of the date
first above written.

VIRAGE, INC. "BORROWER"

BY: /s/ Paul Lego
    -------------------------------------

                 CEO
-----------------------------------------
                Title

IMPERIAL BANK,  "BANK"

BY: /s/ Ronald T. Kundich
    -------------------------------------

              AVP
-----------------------------------------
             Title

                                       7

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