Document:

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                                                                 EXHIBIT 10.14

                                                                 EXECUTION COPY

                               SECURITY AGREEMENT

         THIS SECURITY AGREEMENT (this "AGREEMENT") is made as of July 22,
1999 by and between OTG SOFTWARE, INC., a Delaware corporation and ONLINE
TECHNOLOGIES GROUP, INC., a Delaware corporation, as the grantors (all
references herein to the "GRANTOR" means each of them, jointly and severally,
individually and collectively) and PNC BANK, NATIONAL ASSOCIATION (the
"BANK"), with an address at USX Tower, 600 Grant Street, 29th Floor,
Pittsburgh, PA 15219. All terms capitalized but not otherwise defined herein
shall have the meanings ascribed to them in the Loan Agreement (as defined
below).

         Under the terms hereof, the Bank desires to obtain and the Grantor
desires to grant the Bank security for all of the Obligations (as hereinafter
defined).

         NOW, THEREFORE, the Grantor and the Bank, intending to be legally
bound, hereby agree as follows:

         1.  DEFINITIONS.

                  (a) "COLLATERAL" shall include all personal property of the
Grantor, including without limitation the following, all whether now owned or
hereafter acquired or arising: (i) accounts, accounts receivable, contract
rights, chattel paper, notes receivable, instruments and documents (including
warehouse receipts), and Grantor's accounts with the Bank; (ii) goods of
every nature, including without limitation, inventory, stock-in-trade, raw
materials, work in process, items held for sale or lease or furnished or to
be furnished under contracts of sale or lease, goods that are returned,
reclaimed or repossessed, together with materials used or consumed in the
Grantor's business; (iii) equipment, including, without limitation,
machinery, vehicles, furniture and fixtures; (iv) general intangibles, of
every kind and description, including, but not limited to, all existing and
future customer lists, choses in action, claims (including without limitation
claims for indemnification or breach of warranty), books, records, patents
and patent applications, copyrights, trademarks, tradestyles, trademark
applications, goodwill, blueprints, drawings, designs and plans, trade
secrets, contracts, licenses, license agreements, formulae, tax and any other
types of refunds, returned and unearned insurance premiums, rights and claims
under insurance policies, and computer information, software, source codes,
object codes, records and data; (v) all property of the Grantor now or
hereafter in the Bank's possession or in transit to or from, under the
custody or control of or on deposit with, the Bank or any affiliate thereof,
including deposit and other accounts; (vi) all cash and cash equivalents; and
(vii) all cash and non-cash proceeds (including without limitation, insurance
proceeds) of all of the foregoing property, all products thereof and all
additions and accessions thereto, substitutions therefor and replacements
thereof.

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                  (b) "LOAN AGREEMENT" means the Loan Agreement dated the date
hereof by and between the Grantor and the Bank.

                  (c) "LOAN DOCUMENTS" means this Agreement, any and all notes
evidencing the Obligations and all related documents, instruments and
agreements.

                  (d) "OBLIGATIONS" shall include, without limitation, all
loans, advances, debts, liabilities, obligations, covenants and duties owing to
the Bank from the Grantor under the Loan Documents and any amendments,
extensions, renewals or increases and, to the extent permitted under the Loan
Agreement, all reasonable and necessary costs and expenses of the Bank incurred
in the documentation, negotiation, modification, enforcement, collection or
otherwise in connection with any of the foregoing, including but not limited to
reasonable attorneys' fees and expenses.

         2. GRANT OF SECURITY INTEREST. To secure the Obligations, the Grantor,
as debtor, hereby assigns and grants to the Bank, as secured party, a continuing
lien on and security interest in the Collateral.

         3. CHANGE IN NAME OR LOCATIONS. The Grantor hereby agrees that if the
location of the Collateral changes from the locations listed on EXHIBIT A hereto
and made part hereof, or if the Grantor changes its name or form of
organization, or establishes a name in which it may do business that is not
listed as a tradename on EXHIBIT A hereto, the Grantor will as promptly as
practicable notify the Bank in writing of the additions or changes. The
Grantor's chief executive office is also shown on EXHIBIT A hereto.

         4. REPRESENTATIONS AND WARRANTIES. Except as disclosed in or pursuant
to the Loan Agreement, the Grantor represents, warrants and covenants to the
Bank that: (a) the Grantor has not made any prior pledge, encumbrance,
assignment or other disposition of any of the Collateral and the same are free
from all encumbrances and rights of setoff of any kind; (b) the Grantor will
defend the Collateral against all claims and demands of all persons at any time
claiming the same or any interest therein; (c) each account and general
intangible, if included in the definition of Collateral, is genuine and
enforceable in accordance with its terms; and (d) at the time any account or
general intangible becomes subject to this Agreement, such account or general
intangible will be a good and valid account representing a bona fide sale of
goods or services by the Grantor and the services will have been performed for
the respective account debtors.

         5. GRANTOR'S COVENANTS. The Grantor covenants that it shall:

                  (a) from time to time and at all reasonable times allow the
Bank, with reasonable prior notice, by or through any of its officers, agents,
attorneys, or accountants, to examine or inspect the Collateral and obtain not
more than once annually valuations and audits of the Collateral at the Grantor's
expense, which expense shall not exceed $5,000 per audit. The Grantor shall do,
obtain, make, execute and deliver all such additional and further acts, things,

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deeds, assurances and instruments as the Bank may reasonably require to vest in
and assure to the Bank its rights hereunder and in or to the Collateral, and the
proceeds thereof, including, but not limited to, waivers from landlords,
warehousemen and mortgagees if the Grantor is able to obtain such waivers
through the Grantor's reasonable efforts;

                  (b) keep the Collateral in good order and repair at all times;

                  (c) only use or permit the Collateral to be used in accordance
with all applicable federal, state, county and municipal laws and regulations;
and

                  (d) have and maintain insurance at all times with respect to
all Collateral against risks of fire (including so-called extended coverage),
theft, sprinkler leakage, and other risks (including risk of flood if any
Collateral is maintained at a location in a flood hazard zone) as is customary
with companies in the same or similar businesses. The policies of all such
casualty insurance shall contain standard Lender's Loss Payable Clauses issued
in favor of the Bank under which all losses thereunder shall be paid to the Bank
as the Bank's interest may appear. Such policies shall expressly provide that
the requisite insurance cannot be materially altered or canceled without at
least thirty (30) days prior written notice to the Bank and shall insure the
Bank notwithstanding the act or neglect of the Grantor. Upon demand of the Bank,
the Grantor shall furnish the Bank with duplicate original policies of insurance
or such other evidence of insurance as the Bank may require. In the event of
failure to obtain insurance as herein provided, the Bank may, at its option,
obtain such insurance and the Grantor shall pay to the Bank, on demand, the cost
thereof. Proceeds of insurance may be applied by the Bank to reduce the
Obligations or to repair or replace Collateral, all in the Bank's sole
discretion.

         6. NEGATIVE PLEDGE; NO TRANSFER. The Grantor will not sell or offer to
sell or otherwise transfer or grant or suffer the imposition of a lien or
security interest upon the Collateral (except for sales of inventory and
obsolete or unusable equipment and collections of accounts in the Grantor's
ordinary course of business or as expressly permitted in the Loan Agreement) or
use any portion thereof in any manner inconsistent with this Agreement or with
the terms and conditions of any policy of insurance thereon.

         7. COVENANTS FOR ACCOUNTS. If accounts are included in the definition
of Collateral:

                  (a) The Grantor will, on reasonable demand of the Bank, make
available to the Bank completion certificates or other proof of the satisfactory
performance of services that gave rise to an account, a copy of the invoice for
each account and copies of any written contract or order from which an account
arose.

                  (b) Upon the occurrence, and during the continuance of an
Event of Default (as defined in Section 9 hereof) for a period of at least sixty
(60) days, the Bank may notify any persons who are indebted to the Grantor on
any Collateral consisting of accounts or general intangibles of the assignment
thereof to the Bank and may direct such account debtors to make

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payment directly to the Bank of the amounts due. Upon the occurrence, and
during the continuance of an Event of Default, at the request of the Bank,
the Grantor will direct any persons who are indebted to the Grantor on any
Collateral consisting of accounts or general intangibles to make payment
directly to the Bank. The Bank is authorized to give receipts to such account
debtors for any such payments and the account debtors will be protected in
making such payments to the Bank. If an Event of Default has occurred and
remains uncured for more than sixty (60) days thereafter, upon the written
request of the Bank, the Grantor will establish with the Bank and maintain a
lockbox account ("LOCKBOX") with the Bank and a depository account(s) ("CASH
COLLATERAL ACCOUNT") with the Bank subject to the provisions of this
subparagraph and such other agreements related thereto as the Bank may
require, whereupon all collections of accounts shall be paid directly from
account debtors into the Lockbox from which funds shall be transferred to the
Cash Collateral Account, and from which funds shall be applied by the Bank,
daily, to reduce the outstanding Obligations.

                  (c) The Grantor will notify the Bank on a monthly basis of any
accounts which arise out of contracts with the United States or any department,
agency or instrumentality thereof which have been added to the Borrowing Base
(as defined in the Loan Agreement), and will execute any instruments and take
any steps required by the Bank so that all monies due and to become due under
such contract shall be assigned to the Bank and notice thereof given to and
acknowledged by the appropriate government agency or authority under the Federal
Assignment of Claims Act.

         8. FURTHER ASSURANCES. At the request of the Bank, the Grantor will
join with the Bank in executing one or more financing, continuation or amendment
statements pursuant to the Uniform Commercial Code in form satisfactory to the
Bank and will pay the cost of preparing and filing the same in all jurisdictions
in which such filing is deemed by the Bank to be necessary or desirable.

         9. EVENTS OF DEFAULT. The Grantor shall, at the option of the Bank, be
in default under this Agreement upon the happening of any of the following
events or conditions (each, an "EVENT OF DEFAULT"): (a) any Event of Default (as
defined in any of the Loan Documents) which has not been cured within any time
period applicable thereto; (b) failure to satisfy within five (5) business days
after demand any demand by the Bank under any of the Obligations that have a
demand feature; (c) the failure by the Grantor to perform any of its obligations
under this Agreement which failure has not been cured within ten days' after
written notice to the Grantor; (d) material falsity, material inaccuracy or
material breach by the Grantor of any written warranty, representation or
statement made or furnished to the Bank by or on behalf of the Grantor, which
has a material adverse affect on the business of the Grantor; (e) an uninsured
material loss, theft, damage, or destruction to any of the Collateral, or the
entry of any judgment against the Grantor or any lien against or the making of
any levy, seizure or attachment of or on the Collateral, which has a material
adverse affect on the business of the Grantor; (f) except as disclosed in the
Addendum to the Loan Agreement, the failure of the Bank to have a perfected
first priority security interest in the Collateral, unless such failure results
from the negligence of

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the Bank; or (g) any indication or evidence received by the Bank that the
Grantor may have directly or indirectly been engaged in any type of activity
which, in the Bank's reasonable and good faith discretion, might result in
the forfeiture of any property of the Grantor to any governmental entity,
federal, state or local and which will have a material adverse affect on the
business of the Grantor.

         10. REMEDIES. Upon the occurrence of any such Event of Default and at
any time thereafter, the Bank may declare all Obligations secured hereby
immediately due and payable upon written notice to Grantor and shall have, in
addition to any remedies provided herein or by any applicable law or in equity,
all the remedies of a secured party under the Uniform Commercial Code.

         11. POWER OF ATTORNEY. The Grantor does hereby make, constitute and
appoint any officer or agent of the Bank as the Grantor's true and lawful
attorney-in-fact, with power to endorse the name of the Grantor or any of the
Grantor's officers or agents upon any notes, checks, drafts, money orders, or
other instruments of payment or Collateral that may come into the possession of
the Bank in full or part payment of any amounts owing to the Bank; granting to
the Grantor's said attorney full power to do any and all things necessary to be
done in and about the premises as fully and with the same effect as the Grantor
might or could do, including the right to sign, for the Grantor, UCC-1 financing
statements and to sue for, compromise, settle and release all claims and
disputes with respect to, the Collateral. The Grantor hereby ratifies all that
said attorney shall lawfully do or cause to be done by virtue hereof. This power
of attorney is coupled with an interest, and is irrevocable for the life of this
Security Agreement and the Loan Documents, and until all the Obligations are
satisfied in full.

         12. PAYMENT OF EXPENSES. In the event that the Grantor fails to do so
on a timely basis, the Bank may, at its option, unless the Borrower is
contesting the same in good faith and has made such reserves therefor as are
appropriate and adequate, discharge taxes, liens, security interests or such
other encumbrances as may attach to the Collateral, may pay for required
insurance on the Collateral and may pay for the maintenance, appraisal or
reappraisal, and preservation of the Collateral, as reasonably determined by the
Bank to be necessary. The Grantor will reimburse the Bank on demand for any
payment so made or any expense incurred by the Bank pursuant to the foregoing
authorization, and the Collateral also will secure any advances or payments so
made or expenses so incurred by the Bank.

         13. NOTICES. All notices, demands, requests, consents, approvals and
other communications required or permitted hereunder must be in writing and will
be effective upon receipt if delivered personally to such party, or if sent by
facsimile transmission with confirmation of delivery, or by nationally
recognized overnight courier service, to the address set forth above or to such
other address as any party may give to the other in writing for such purpose.

         14. PRESERVATION OF RIGHTS. No delay or omission on the part of the
Bank to exercise

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any right or power arising hereunder will impair any such right or power or
be considered a waiver of any such right or power or any acquiescence
therein, nor will the action or inaction of the Bank impair any right or
power arising hereunder. The Bank's rights and remedies hereunder are
cumulative and not exclusive of any other rights or remedies which the Bank
may have under other agreements, at law or in equity.

         15. ILLEGALITY. In case any one or more of the provisions contained in
this Agreement should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby.

         16. CHANGES IN WRITING. No modification, amendment or waiver of any
provision of this Agreement nor consent to any departure by the Grantor
therefrom, will in any event be effective unless the same is in writing and
signed by the Bank, and then such waiver or consent shall be effective only in
the specific instance and for the purpose for which given. No notice to or
demand on the Grantor in any case will entitle the Grantor to any other or
further notice or demand in the same, similar or other circumstance.

         17. ENTIRE AGREEMENT. This Agreement (including the documents and
instruments referred to herein) constitutes the entire agreement and supersedes
all other prior agreements and understandings, both written and oral, between
the parties with respect to the subject matter hereof.

         18. COUNTERPARTS. This Agreement may be signed in any number of
counterpart copies and by the parties hereto on separate counterparts, but all
such copies shall constitute one and the same instrument.

         19. SUCCESSORS AND ASSIGNS. This Agreement will be binding upon and
inure to the benefit of the Grantor and the Bank and their respective heirs,
executors, administrators, successors and assigns; PROVIDED, HOWEVER, that the
Grantor may not assign this Agreement in whole or in part without the prior
written consent of the Bank and, to the extent provided in the Loan Agreement,
the Bank at any time may assign this Agreement in whole or in part upon written
notice to Grantor.

         20. INTERPRETATION. In this Agreement, unless the Bank and the Grantor
otherwise agree in writing, the singular includes the plural and the plural the
singular; words importing any gender include the other genders; references to
statutes are to be construed as including all statutory provisions
consolidating, amending or replacing the statute referred to; the word "or"
shall be deemed to include "and/or", the words "including", "includes" and
"include" shall be deemed to be followed by the words "without limitation";
references to articles, sections (or subdivisions of sections) or exhibits are
to those of this Agreement unless otherwise indicated. Section headings in this
Agreement are included for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose. If this Agreement is
executed by more

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than one Grantor, the obligations of such persons or entities will be joint
and several.

         21. INDEMNITY. The Grantor agrees to indemnify each of the Bank, its
directors, officers and employees and each legal entity, if any, which controls
the Bank (the "INDEMNIFIED PARTIES") and to hold each Indemnified Party harmless
from and against any and all claims, damages, losses, liabilities and expenses
(including, without limitation, all reasonable fees of counsel with whom any
Indemnified Party may consult and all expenses of litigation or preparation
therefor) which any Indemnified Party may incur or which may be asserted against
any Indemnified Party as a result of the execution of or performance under this
Agreement; PROVIDED, HOWEVER, that the foregoing indemnity agreement shall not
apply to claims, damages, losses, liabilities and expenses to the extent
attributable to an Indemnified Party's fraud, gross negligence or willful
misconduct. The indemnity agreement contained in this Section shall survive the
termination of this Agreement. The Grantor may participate at its expense in the
defense of any such claim.

         22. GOVERNING LAW AND JURISDICTION. This Agreement has been delivered
to and accepted by the Bank and will be deemed to be made in the Commonwealth of
Pennsylvania. THIS AGREEMENT WILL BE INTERPRETED AND THE RIGHTS AND LIABILITIES
OF THE PARTIES HERETO DETERMINED IN ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH
OF PENNSYLVANIA, EXCEPT THAT THE LAWS OF THE STATE WHERE ANY COLLATERAL IS
LOCATED (IF DIFFERENT FROM THE COMMONWEALTH OF PENNSYLVANIA) SHALL GOVERN THE
CREATION, PERFECTION AND FORECLOSURE OF THE LIENS CREATED HEREUNDER ON SUCH
PROPERTY OR ANY INTEREST THEREIN. The Grantor hereby irrevocably consents to the
exclusive jurisdiction of any state or federal court for Allegheny County or the
Western District of Pennsylvania, as the case may be, and consents that all
service of process be sent by nationally recognized overnight courier service
directed to the Grantor at the Grantor's address set forth herein and service so
made will be deemed to be completed on the business day after deposit with such
courier; provided that nothing contained in this Agreement will prevent the Bank
from bringing any action, enforcing any award or judgment or exercising any
rights against the Grantor individually, against any security or against any
property of the Grantor within any other county, state or other foreign or
domestic jurisdiction. The Bank and the Grantor agree that the venue provided
above is the most convenient forum for both the Bank and the Grantor. The
Grantor waives any objection to venue and any objection based on a more
convenient forum in any action instituted under this Agreement.

         23. WAIVER OF JURY TRIAL. EACH OF THE GRANTOR AND THE BANK IRREVOCABLY
WAIVES ANY AND ALL RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR CLAIM OF ANY NATURE RELATING TO THIS AGREEMENT, ANY DOCUMENTS
EXECUTED IN CONNECTION WITH THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED IN
ANY OF SUCH DOCUMENTS. THE GRANTOR AND THE BANK ACKNOWLEDGE THAT THE FOREGOING
WAIVER IS KNOWING AND VOLUNTARY.

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                           [Signature Page to Follow]

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                  WITNESS the due execution of this Security Agreement as a
document under seal, as of the date first written above.

ATTEST:                                   ONLINE TECHNOLOGIES GROUP, INC.

By:      /s/ F. William Caple             By:    /s/ Richard Kay          (SEAL)
   ----------------------------------       ------------------------------

Print Name:       F. William Caple        Print Name:   Richard Kay
           --------------------------                ---------------------

Title:            Secretary               Title:   President
      -------------------------------           --------------------------

ATTEST:                                   OTG SOFTWARE, INC.

By:      /s/ F. William Caple             By:     /s/ Richard Kay         (SEAL)
   ----------------------------------        -----------------------------

Print Name:       F. William Caple        Print Name:   Richard Kay
           --------------------------                ---------------------

Title:            Secretary               Title:    President
      -------------------------------           --------------------------

                                          PNC BANK, NATIONAL ASSOCIATION

                                          By:     /s/ Katharine Kappler
                                             -----------------------------
                                          Print Name:   Katharine Kappler
                                                     ---------------------
                                          Title:   Vice President
                                                --------------------------

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                                    EXHIBIT A
                              TO SECURITY AGREEMENT

Address of chief executive office, including the County, for each Grantor:

         One Democracy Plaza
         6701 Democracy Boulevard
         Suite 805
         Bethesda, MD  20817

Address for books and records, if different:

Addresses of other Collateral locations, including Counties and name and address
of landlord or owner if location is not owned by each Grantor:

Name and Address of Landlord(s):

Other names or tradenames now or formerly used by either Grantor:
         Optical Technology Group, Inc.

         Charles E. Smith Commercial Realty
         6707 Democracy Blvd., Suite 207
         Bethesda, MD 20817
         Contact:  Bernie, 301-394-6873

         D.B.S., Inc.
         4695 MacArthur Court
         Suite 470
         Newport Beach, CA 92660
         Contact:  Jeannie Franks, 949-622-5408

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                                                                  EXECUTION COPY

RIDER TO SECURITY AGREEMENT -
TRADEMARKS

                  THIS RIDER TO SECURITY AGREEMENT ("RIDER") is executed as of
July 22, 1999 by and between OTG SOFTWARE, INC., a Delaware corporation, and
ONLINE TECHNOLOGIES GROUP, INC., a Delaware corporation, as the grantors (all
references herein to the "GRANTOR" means each of them, jointly and severally,
individually and collectively) and PNC BANK, NATIONAL ASSOCIATION (the "BANK").
This Rider is incorporated into and made part of that certain Security Agreement
("SECURITY AGREEMENT") between the Grantor and the Bank of even date herewith,
and also into certain other related financing documents and security agreements
executed by and between the Grantor and the Bank or by and between the Borrower
(as defined in the Security Agreement) and the Bank (all such documents
including this Rider being collectively referred to as "LOAN DOCUMENTS"). All
capitalized terms not otherwise defined in this Rider shall have the same
meanings ascribed to such terms in the other Loan Documents.

                  The Grantor has adopted, used and is using (or has filed
applications for the registration of) the trademarks, servicemarks and
tradenames listed on Schedule "A" attached hereto and made part hereof (all such
marks or names hereinafter referred to as the "TRADEMARKS")

                  The Bank desires to acquire a lien and security interest on
the Trademarks and the registration thereof, together with all the goodwill of
the Grantor associated therewith and represented thereby, as security for all of
the Obligations (as defined in the Security Agreement) to the Bank, and the Bank
desires to have its security interest in such Trademarks confirmed by a document
identifying same and in such form that it may be recorded in the United States
Patent and Trademark Office.

                  NOW, THEREFORE, with the foregoing background deemed
incorporated by reference and made part hereof, the parties hereto, intending to
be legally bound hereby, covenant and agree as follows:

                  1. GRANT OF SECURITY INTEREST. In consideration of and
pursuant to the terms of the Loan Documents, and for other good, valuable and
sufficient consideration, the receipt of which is hereby acknowledged, and to
secure the Obligations, the Grantor grants a lien and security interest to the
Bank in all its present and future right, title and interest in and to the
Trademarks, together with all the goodwill of the Grantor associated with and
represented by the Trademarks and the registration thereof, and the right (but
not the obligation) to sue for past, present and future infringements, and the
proceeds thereof, including, without limitation, license royalties and proceeds
of infringement suits.

<PAGE>

                  2. REPRESENTATIONS AND WARRANTIES. Subject to the
disclosures set forth pursuant to the Loan Agreement of even date by and
between the Grantor and the Bank, the Grantor represents, warrants and
covenants that: (a) it has the right to use the Trademarks; (b) the Grantor
is the sole and exclusive owner of the entire and unencumbered (except for
encumbrances created pursuant to the Loan Documents and this Rider) right,
title and interest in and to each of the Trademarks, and each of the
Trademarks is free and clear of any liens, charges, and encumbrances,
including, without limitation, pledges, assignments, licenses and covenants
by the Grantor not to sue third persons; (c) the Grantor has the unqualified
right to enter into this Rider and perform its terms; (d) the Grantor has
used, and will continue to use for the duration of this Rider, proper notice,
as required by 15 U.S.C. Sections 1051-1127 in connection with its use of the
Trademarks; and (e) the Grantor has used, and will continuE to use for the
duration of this Rider, consistent standards of quality in products leased or
sold under the Trademarks and hereby grants to the Bank and its employees and
agents the right to visit the Grantor's locations which lease, sell, or store
products under any of the Trademarks and to inspect the products and quality
control records relating thereto at reasonable times and upon reasonable
notice during regular business hours to ensure the Grantor's compliance with
this paragraph 2.

                  3. COVENANTS. The Grantor further covenants that: (a) Until
all of the Obligations have been satisfied in full, the Grantor will not enter
into any agreement, including without limitation, any license agreement, which
is inconsistent with the Grantor's obligations under this Rider; and (b) If the
Grantor acquires rights to any new Trademarks, the provisions of this Rider
shall automatically apply thereto and the Grantor shall give the Bank prompt
written notice thereof along with an amended Schedule "A"; provided, however,
that notwithstanding anything to the contrary contained in this Agreement, the
Grantor shall have the right to enter into agreements in the ordinary course of
business with respect to the Trademarks.

                  4. EXCLUSIVE USE OF TRADEMARKS. So long as this Rider is in
effect and so long as the Grantor has not received notice from the Bank that an
Event of Default has occurred under the Loan Documents and that the Bank has
elected to exercise its rights hereunder, the Grantor shall continue to have the
exclusive right to use the Trademarks and the Bank shall have no right to use
the Trademarks or issue any exclusive or non-exclusive license with respect
thereto, or assign, pledge or otherwise transfer title in the Trademarks to
anyone else. In addition, as long as this Rider is in effect, Bank agrees that
it shall not assign or otherwise transfer the Trademarks in a manner that causes
abandonment of the Trademarks.

                  5. NEGATIVE PLEDGE. The Grantor agrees not to sell, assign or
further encumber its rights and interest in the Trademarks without prior written
consent of the Bank.

                  6. REMEDIES UPON DEFAULT. (a) If and while the Grantor shall
be in default hereunder or an Event of Default exists under the Loan Documents,
the Grantor hereby covenants and agrees that the Bank, as the holder of a
security interest under the Uniform Commercial Code, as now or hereafter in
effect in Pennsylvania, may take such action permitted under the

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Loan Documents or permitted by law, in its exclusive discretion, to foreclose
upon the Trademarks covered hereby.

                  (b) For such purposes, and in the event of the Grantor's
default hereunder or an Event of Default under the Loan Documents and while such
default or Event of Default exists, the Grantor hereby authorizes and empowers
the Bank to make, constitute and appoint any officer or agent of the Bank as the
Bank may select, in its exclusive discretion, as the Grantor's true and lawful
attorney-in-fact, with the power to endorse the Grantor's name on all
applications, documents, papers and instruments necessary for the Bank to use
the Trademarks or to grant or issue any exclusive or non-exclusive license under
the Trademarks to anyone else, or necessary for the Bank to assign, pledge,
convey or otherwise transfer title in or dispose of the Trademarks to anyone
else. The Grantor hereby ratifies all that such attorney shall lawfully do or
cause to be done by virtue hereof, except for the gross negligence or willful
misconduct of such attorney. This power of attorney shall be irrevocable for the
life of this Rider and the Loan Documents, and until all the Obligations are
satisfied in full.

                  (c) The Grantor expressly acknowledges that this Rider shall
be recorded with the Patent and Trademark Office. Contemporaneously herewith,
the Grantor shall also execute and deliver to the Bank such documents as the
Bank shall reasonably request to permanently assign all rights in the Trademarks
to the Bank, which documents shall be held by the Bank until the occurrence of
an Event of Default hereunder or under the Loan Documents, subject to applicable
law. After such occurrence, the Bank may, at its sole option, record such
escrowed documents with the Patent and Trademark Office and exercise all other
remedies available to a secured creditor with respect to the Trademarks.

                  8. SUBJECT TO SECURITY AGREEMENT. This Rider shall be subject
to the terms, provisions, and conditions set forth in the Security Agreement and
may not be modified without the written consent of the party against whom
enforcement is being sought.

                  9. INCONSISTENT WITH SECURITY AGREEMENT. All rights and
remedies herein granted to the Bank shall be in addition to any rights and
remedies granted to the Bank under the Loan Documents. In the event of an
inconsistency between this Rider and the Security Agreement, the language of the
Security Agreement shall control. The terms and conditions of the Security
Agreement are hereby incorporated herein by reference.

                  10. TERMINATION OF AGREEMENT. Upon payment and performance
of all Obligations under the Loan Documents, the Bank shall immediately execute
and deliver to the Grantor all documents and take any and all actions necessary
to terminate the Bank's security interest in the Trademarks.

                  11. FEES AND EXPENSES. Any and all reasonable fees, costs and
expenses, of whatever kind or nature, including the reasonable attorneys' fees
and legal expenses incurred by the Bank in connection with the preparation of
this Rider and all other documents relating hereto

                                     -3-

<PAGE>

and the consummation of this transaction, the filing or recording of any
documents (including all taxes in connection therewith) in public offices, the
payment or discharge of any taxes, reasonable counsel fees, maintenance fees,
encumbrances or costs otherwise incurred in protecting, maintaining, preserving
the Trademarks, or in defending or prosecuting any actions or proceedings
arising out of or related to the Trademarks, in each case in accordance with the
terms of this Rider, shall be borne and paid by the Grantor on demand by the
Bank and until so paid shall be added to the principal amount of the Obligations
to the Bank and shall bear interest at the contract rate therefor.

                  12. PROSECUTION OF TRADEMARK APPLICATIONS. (a) Subject to the
terms of the Security Agreement, the Grantor shall have the duty to prosecute
diligently any trademark application with respect to the Trademarks pending as
of the date of this Rider or thereafter, until the Obligations shall have been
satisfied in full, to preserve and maintain all rights in the Trademarks, and
upon reasonable request of the Bank, the Grantor shall make federal application
on registrable but unregistered trademarks belonging to the Grantor. Any
reasonable expenses incurred in connection with such applications shall be borne
by the Grantor. Unless the Grantor discontinues the sale of the goods offered in
connection with a Trademark, the Grantor shall not abandon any Trademark without
the written consent of the Bank. Notwithstanding the foregoing, the Grantor
shall not be required to take any action with respect to any Trademark that the
Grantor, in its reasonable judgment determines is not in the best interest of
Grantor. Grantor shall notify the Bank of any decision that will result in
abandonment of a Trademark, or a registration of a Trademark or an application
to register a trademark prior to such abandonment.

                  (b) The Grantor shall have the right to bring suit in its own
name to enforce the Trademarks, in which event the Bank may, if the Grantor
deems it necessary or after an Event of Default under the Loan Documents, be
joined as a nominal party to such suit if the Bank shall have been satisfied
that it is not thereby incurring any risk of liability because of such joinder.
The Grantor shall promptly, upon demand, reimburse and indemnify the Bank for
all damages, reasonable costs and reasonable expenses, including attorneys'
fees, incurred by the Bank in the fulfillment of the provisions of this
paragraph.

                  13. ADDITIONAL REMEDIES. Upon the occurrence of an Event of
Default under the Loan Documents, the Bank may, without any obligation to do so,
complete any obligation of the Grantor hereunder, in the Grantor's name or in
the Bank's name, but at the Grantor's expense, and the Grantor hereby agrees to
reimburse the Bank in full for all reasonable expenses, including reasonable
attorney's fees, incurred by the Bank in protecting, defending and maintaining
the Trademarks.

                  14. GOVERNING LAW. THIS RIDER WILL BE INTERPRETED AND THE
RIGHTS AND LIABILITIES OF THE PARTIES HERETO DETERMINED IN ACCORDANCE WITH THE
LAWS OF THE COMMONWEALTH OF PENNSYLVANIA, EXCLUDING ITS CONFLICT OF LAW RULES,
EXCEPT THAT THE FEDERAL LAWS OF THE UNITED STATES OF AMERICA SHALL GOVERN TO THE
EXTENT APPLICABLE.

                                     -4-

<PAGE>

15. COUNTERPARTS. This Rider may be signed in any number of counterpart copies
and by the parties hereto on separate counterparts, but all such copies shall
constitute one and the same instrument.

                  WITNESS the due execution of this Rider to Security Agreement
- Trademarks as a document under seal, as of the date first written above, with
the intent to be legally bound hereby.

ATTEST:                                    ONLINE TECHNOLOGIES
                                           GROUP, INC.

By:   /s/ F. William Caple                 By:    /s/ Richard Kay         (SEAL)
    -------------------------------             --------------------------

Print Name:   F. William Caple             Print Name:    Richard Kay
             ----------------------                    -------------------

Title:        Secretary                    Title:         President
        ---------------------------                -----------------------

ATTEST:                                    OTG SOFTWARE, INC.

By:   /s/ F. William Caple                 By:   /s/ Richard Kay          (SEAL)
    -------------------------------             --------------------------
Print Name:   F. William Caple             Print Name:   Richard Kay
             ----------------------                    -------------------

Title:        Secretary                    Title:        President
        ---------------------------                -----------------------

                                           PNC BANK,
                                           NATIONAL ASSOCIATION

                                           By:  /s/ Katharine Kappler
                                                --------------------------
                                           Print Name:  Katharine Kappler
                                                       -------------------
                                           Title:        Vice President
                                                    ----------------------

                                     -5-

<PAGE>

             SCHEDULE A TO RIDER TO SECURITY AGREEMENT - TRADEMARKS

<TABLE>
<CAPTION>

                                                APPLICATION OR
TRADEMARK                                       REGISTRATION NO.                     COUNTRY
---------                                       ----------------                     -------
<S>                                             <C>                                  <C>
APPLICATION EXTENDER                            1953822                              UNITED STATES
APPLICATIONXTENDER                              75/642525                            UNITED STATES
CDEXTENDER                                      2035716                              UNITED STATES
CDXTENDER                                       Not yet assigned                     UNITED STATES
COLDEXTENDER                                    1957268                              UNITED STATES
COLDXTENDER                                     75/642529                            UNITED STATES
DISKEXTENDER                                    1957267                              UNITED STATES
DISKXTENDER                                     75/642526                            UNITED STATES
DISKXTENDER 2000                                Not yet assigned                     UNITED STATES
JUKEMEISTER                                     2037183                              UNITED STATES
NETXTENDER                                      75/547588                            UNITED STATES
OBJECTUTILITIES                                 1964771                              UNITED STATES
OPTICAL TECHNOLOGY GROUP, INCORPORATED          1953823                              UNITED STATES
OTG                                             2010068                              UNITED STATES
OTG OPTICAL TECHNOLOGY                          1972299                              UNITED STATES
GROUP, INC. and Design
REPORTEXTENDER                                  75/366478                            UNITED STATES
REPORTXTENDER                                   75/642530                            UNITED STATES
SANXTENDER                                      75/593951                            UNITED STATES
SCANXTENDER                                     75/628344                            UNITED STATES
WEBEXTENDER                                     75/193229                            UNITED STATES
WEBXTENDER                                      Not yet assigned                     UNITED STATES
WFX                                             75/540441                            UNITED STATES
WORKFLOW EXTENDER                               75/421572                            UNITED STATES
WORKFLOWXTENDER                                 Not yet assigned                     UNITED STATES
XTENDER                                         75/487714                            UNITED STATES
EXTENDER SOLUTIONS                              75/421573                            UNITED STATES
XTENDER SOLUTIONS                               75/630197                            UNITED STATES

</TABLE>

<PAGE>

                              TRADEMARK ASSIGNMENT

         WHEREAS, OTG SOFTWARE, INC. (the "GRANTOR") is the owner of the entire
right, title and interest in and to the United States trademarks, tradenames and
registrations listed on SCHEDULE A attached hereto and made a part hereof, and
all rights associated therewith (collectively, the "TRADEMARKS"), which are
registered in the United States Patent and Trademark Office or which are the
subject of pending applications in the United States Patent and Trademark
Office;

         WHEREAS, PNC BANK, NATIONAL ASSOCIATION, having a place of business at
USX Tower, 600 Grant Street, 29th Floor, MS# P6-PUSX-29-4, Pittsburgh, PA,
15219, identified as the "BANK" under that certain Rider to Security Agreement -
Trademarks (the "RIDER") of even date herewith (the "GRANTEE") is desirous of
acquiring said Trademarks;

         WHEREAS, the Grantee has a security interest in the assets of the
Grantor adequate to carry on the business of the Grantor; and

         WHEREAS, the Rider provides that this Assignment shall become effective
upon the occurrence of an Event of Default as defined in the Security Agreement
of even date herewith by and between the Grantor and the Grantee.

         NOW, THEREFORE, for good and valuable consideration, receipt of which
is hereby acknowledged, and intending to be legally bound hereby, the Grantor,
its successors and assigns does hereby collaterally transfer, assign and set
over unto Grantee, its successors, transferees and assigns, all of its present
and future right, title and interest in and to the Trademarks, the goodwill of
the business associated with such Trademarks and all proceeds thereof and all
rights and proceeds associated therewith.

         IN WITNESS WHEREOF, the undersigned has caused this Trademark
Assignment to be executed by its duly authorized officer on this 22nd day of
July 1999.

ATTEST:                                 OTG SOFTWARE, INC.

By:  /s/ F. William Caple               /s/ Richard Kay
    ----------------------------        ---------------------------------------
                                                                          (SEAL)

Print Name:  F. William Caple           Print Name:  Richard Kay
            --------------------        ---------------------------------------

Title:  Secretary                       Title:  President
       -------------------------                -------------------------------

<PAGE>

                 SCHEDULE A TO RIDER TO ASSIGNMENT OF TRADEMARKS

<TABLE>
<CAPTION>

                                                APPLICATION OR
TRADEMARK                                       REGISTRATION NO.                     COUNTRY
---------                                       -----------------                    -------
<S>                                             <C>                                  <C>
APPLICATION EXTENDER                            1953822                              UNITED STATES
APPLICATIONXTENDER                              75/642525                            UNITED STATES
CDEXTENDER                                      2035716                              UNITED STATES
CDXTENDER                                       Not yet assigned                     UNITED STATES
COLDEXTENDER                                    1957268                              UNITED STATES
COLDXTENDER                                     75/642529                            UNITED STATES
DISKEXTENDER                                    1957267                              UNITED STATES
DISKXTENDER                                     75/642526                            UNITED STATES
DISKXTENDER 2000                                Not yet assigned                     UNITED STATES
JUKEMEISTER                                     2037183                              UNITED STATES
NETXTENDER                                      75/547588                            UNITED STATES
OBJECTUTILITIES                                 1964771                              UNITED STATES
OPTICAL TECHNOLOGY GROUP, INCORPORATED          1953823                              UNITED STATES
OTG                                             2010068                              UNITED STATES
OTG OPTICAL TECHNOLOGY                          1972299                              UNITED STATES
GROUP, INC. and Design
REPORTEXTENDER                                  75/366478                            UNITED STATES
REPORTXTENDER                                   75/642530                            UNITED STATES
SANXTENDER                                      75/593951                            UNITED STATES
SCANXTENDER                                     75/628344                            UNITED STATES
WEBEXTENDER                                     75/193229                            UNITED STATES
WEBXTENDER                                      Not yet assigned                     UNITED STATES
WFX                                             75/540441                            UNITED STATES
WORKFLOW EXTENDER                               75/421572                            UNITED STATES
WORKFLOWXTENDER                                 Not yet assigned                     UNITED STATES
XTENDER                                         75/487714                            UNITED STATES
EXTENDER SOLUTIONS                              75/421573                            UNITED STATES
XTENDER SOLUTIONS                               75/630197                            UNITED STATES

</TABLE>

<PAGE>

                              TRADEMARK ASSIGNMENT

         WHEREAS, ONLINE TECHNOLOGIES GROUP, INC. (the "GRANTOR") is the owner
of the entire right, title and interest in and to the United States trademarks,
tradenames and registrations listed on SCHEDULE A attached hereto and made a
part hereof, and all rights associated therewith (collectively, the
"TRADEMARKS"), which are registered in the United States Patent and Trademark
Office or which are the subject of pending applications in the United States
Patent and Trademark Office;

         WHEREAS, PNC BANK, NATIONAL ASSOCIATION, having a place of business at
USX Tower, 600 Grant Street, 29th Floor, MS# P6-PUSX-29-4, Pittsburgh, PA,
15219, identified as the "BANK" under that certain Rider to Security Agreement -
Trademarks (the "RIDER") of even date herewith (the "GRANTEE") is desirous of
acquiring said Trademarks;

         WHEREAS, the Grantee has a security interest in the assets of the
Grantor adequate to carry on the business of the Grantor; and

         WHEREAS, the Rider provides that this Assignment shall become effective
upon the occurrence of an Event of Default as defined in the Security Agreement
of even date herewith by and between the Grantor and the Grantee.

         NOW, THEREFORE, for good and valuable consideration, receipt of which
is hereby acknowledged, and intending to be legally bound hereby, the Grantor,
its successors and assigns does hereby collaterally transfer, assign and set
over unto Grantee, its successors, transferees and assigns, all of its present
and future right, title and interest in and to the Trademarks, the goodwill of
the business associated with such Trademarks and all proceeds thereof and all
rights and proceeds associated therewith.

         IN WITNESS WHEREOF, the undersigned has caused this Trademark
Assignment to be executed by its duly authorized officer on this 22nd day of
July 1999.

ATTEST:                                   ONLINE TECHNOLOGIES
                                          GROUP, INC.

By:  /s/ F. William Caple                 /s/ Richard Kay
    ----------------------------------    --------------------------------------
                                                                          (SEAL)
Print Name:  F. William Caple             Print Name:  Richard Kay
            --------------------------                --------------------------

Title:  Secretary                         Title:  President
       --------------------------------          -------------------------------

<PAGE>

                SCHEDULE A TO RIDER TO ASSIGNMENT OF TRADEMARKS

<TABLE>
<CAPTION>

                                                APPLICATION OR
TRADEMARK                                       REGISTRATION NO.                     COUNTRY
---------                                       ----------------                     -------
<S>                                             <C>                                  <C>
APPLICATION EXTENDER                            1953822                              UNITED STATES
APPLICATIONXTENDER                              75/642525                            UNITED STATES
CDEXTENDER                                      2035716                              UNITED STATES
CDXTENDER                                       Not yet assigned                     UNITED STATES
COLDEXTENDER                                    1957268                              UNITED STATES
COLDXTENDER                                     75/642529                            UNITED STATES
DISKEXTENDER                                    1957267                              UNITED STATES
DISKXTENDER                                     75/642526                            UNITED STATES
DISKXTENDER 2000                                Not yet assigned                     UNITED STATES
JUKEMEISTER                                     2037183                              UNITED STATES
NETXTENDER                                      75/547588                            UNITED STATES
OBJECTUTILITIES                                 1964771                              UNITED STATES
OPTICAL TECHNOLOGY GROUP, INCORPORATED          1953823                              UNITED STATES
OTG                                             2010068                              UNITED STATES
OTG OPTICAL TECHNOLOGY                          1972299                              UNITED STATES
GROUP, INC. and Design
REPORTEXTENDER                                  75/366478                            UNITED STATES
REPORTXTENDER                                   75/642530                            UNITED STATES
SANXTENDER                                      75/593951                            UNITED STATES
SCANXTENDER                                     75/628344                            UNITED STATES
WEBEXTENDER                                     75/193229                            UNITED STATES
WEBXTENDER                                      Not yet assigned                     UNITED STATES
WFX                                             75/540441                            UNITED STATES
WORKFLOW EXTENDER                               75/421572                            UNITED STATES
WORKFLOWXTENDER                                 Not yet assigned                     UNITED STATES
XTENDER                                         75/487714                            UNITED STATES
EXTENDER SOLUTIONS                              75/421573                            UNITED STATES
XTENDER SOLUTIONS                               75/630197                            UNITED STATES

</TABLE>

<PAGE>

                         AFFIRMATION AND PARTIAL RELEASE
                              OF SECURITY AGREEMENT

         This Affirmation and Partial Release of Security Agreement (this
"AFFIRMATION") dated October 30, 2000 is made by and among OTG SOFTWARE, INC., a
Delaware corporation (the "GRANTOR") and PNC BANK, NATIONAL ASSOCIATION (the
"BANK"), with an address at USX Tower, 600 Grant Street, 29th Floor, Pittsburgh,
PA 15219.

         WHEREAS, the Grantor and the Bank have entered into that certain Loan
Agreement, dated as of July 22, 1999 (the "ORIGINAL LOAN AGREEMENT"), pursuant
to which the Bank agreed to extend to the Grantor, upon the terms and subject to
the conditions set forth therein, a secured revolving credit facility in an
aggregate principal amount not to exceed $5,000,000;

         WHEREAS, by Amendment No. 1 to Loan Agreement dated March 17, 2000 (the
"AMENDMENT NO. 1") between the Grantor and the Bank, (the Original Loan
Agreement, as amended by Amendment No. 1, is referred to as the "LOAN
AGREEMENT"), the Bank agreed to modify certain covenant compliance and reporting
requirements;

                  WHEREAS, the Grantor and the Bank entered into an Amended and
Restated Loan Agreement of even date herewith (the "AMENDED AND RESTATED LOAN
AGREEMENT") whereby the Bank agreed to (i) increase the maximum availability
under the Revolving Credit to $10,000,000 with a $5,000,000 subline for letters
of credit; (ii) extend the maturity date for the Revolving Credit; (iii) modify
the interest rate for the Revolving Credit; and (iv) modify certain covenant
compliance and reporting requirements set forth in the Loan Agreement, subject
to the terms and conditions of the Amended and Restated Loan Agreement;

                  WHEREAS, the Grantor executed and delivered to the Bank a
Security Agreement dated July 22, 1999 (the "SECURITY AGREEMENT") to secure
their respective obligations as provided therein;

                  WHEREAS, the Grantor has agreed to enter into this Affirmation
for the purpose of affirming the Grantor's respective obligations under the
Security Agreement; and

                  WHEREAS, in reliance on the representations, warranties and
covenants of the Borrower in the Loan Agreement, the Bank is willing to release
certain guaranties and terminate its security interest in certain Collateral.

                  NOW, THEREFORE, for good and valuable consideration, the
receipt of which is hereby acknowledged, the parties hereto, intending to be
legally bound, agree as follows:

         1.       CAPITALIZED TERMS. All defined terms used herein, unless
                  modified herein, shall have the meaning given such terms in
                  the Security Agreement. The definition of "COLLATERAL" is
                  amended to read in its entirety as follows:

<PAGE>

                           "COLLATERAL" shall include the following personal
                           property of the Grantor whether now owned or
                           hereafter acquired or arising: (i) accounts, accounts
                           receivable, contract rights, chattel paper, notes
                           receivable, instruments and documents (including
                           warehouse receipts), and Grantor's accounts with the
                           Bank; (ii) all property of the Grantor now or
                           hereafter in the Bank's possession or in transit to
                           or from, under the custody or control of or on
                           deposit with, the Bank or any affiliate thereof,
                           including deposit and other accounts; and (iii) all
                           cash and non-cash proceeds (including without
                           limitation, insurance proceeds) of all of the
                           foregoing property, all products thereof and all
                           additions and accessions thereto, substitutions
                           therefor and replacements thereof.

         2.       ACKNOWLEDGEMENT. The Grantor acknowledges and agrees that the
                  execution of this Affirmation, and the carrying out of the
                  provisions thereof, shall not, except as otherwise provided
                  for herein, affect or in any way diminish or modify the
                  obligations of the Grantor under the Security Agreement.

         3.       PARTIAL RELEASE. The Bank hereby releases its security
                  interest in all existing and after-acquired personal property
                  of the Borrower EXCEPT the Collateral. The Bank agrees to
                  file, at the Borrower's expense, partial termination
                  statements necessary to record evidence of this partial
                  release.

         4.       LOAN AGREEMENT. The definition of "Loan Agreement" as used in
                  the Security Agreement shall from and after the date hereof
                  mean the Amended and Restated Loan Agreement (as the same may
                  be amended, restated or otherwise modified from time to time).

         5.       AFFIRMATION. The Grantor hereby expressly affirms all its
                  obligations under the Loan Agreement and the other Loan
                  Documents are Obligations secured by the Security Agreement
                  and the other Security Documents. Except as expressly modified
                  hereby, all terms, covenants and conditions set forth in the
                  Security Agreement, together with all representations,
                  warranties and covenants made therein, shall remain valid,
                  effective, accurate and in full force and effect and are
                  hereby ratified and affirmed in all respects.

                                       2

<PAGE>

                  IN WITNESS WHEREOF, the undersigned have executed this
Affirmation and Partial Release of Security Agreement by their duly authorized
officers with the intention that it constitute a sealed instrument.

WITNESS:                                 OTG SOFTWARE, INC.

By:  /s/ Andrea Cleary                   By:   /s/ Ronald W. Kaiser (SEAL)
     ---------------------------               ---------------------
Print Name: Andrea Cleary                Print Name:  Ronald W. Kaiser
            -----------------------                   ----------------
Title:   Executive Assistant             Title:  Chief Financial Officer
        ---------------------------              -----------------------

                                         PNC BANK,
                                         NATIONAL ASSOCIATION

                                         By:   /s/ Katharine S. Kappler
                                               ------------------------
                                         Print Name: Katharine S. Kappler
                                                     --------------------
                                         Title:  Managing Director
                                                 -----------------

                                       3<PAGE>

                                                                  EXHIBIT 10.15

                              AMENDED AND RESTATED
                                 LOAN AGREEMENT

         THIS AMENDED AND RESTATED LOAN AGREEMENT (this "AGREEMENT"), is entered
into as of October 30, 2000 (the "CLOSING DATE"), by and between OTG SOFTWARE,
INC., a Delaware corporation ("OTG" or the "BORROWER") as the borrower, and PNC
BANK, NATIONAL ASSOCIATION, (the "BANK");

         WHEREAS, the Borrower and the Bank are parties to a Loan Agreement
dated as of July 22, 1999 (the "ORIGINAL LOAN AGREEMENT") pursuant to which the
Bank made available a revolving credit facility to the Borrower in an aggregate
principal amount not to exceed $5,000,000; and

         WHEREAS, the Borrower and the Bank are parties to an Amendment No. 1 to
the Loan Agreement dated March 17, 2000 (the "AMENDMENT NO. 1") whereby the Bank
agreed to modify certain covenant compliance and reporting requirements set
forth in the Original Loan Agreement, subject to the terms and conditions of
Amendment No. 1 (the Original Loan Agreement as amended by Amendment No. 1
referred to herein as the "LOAN AGREEMENT"); and

         WHEREAS, the Borrower has requested that the Bank further amend the
Loan Agreement to (i) increase the maximum availability under the Revolving
Credit to $10,000,000 with a $5,000,000 subline for letters of credit; (ii)
extend the maturity date for the Revolving Credit; (iii) modify the interest
rate for the Revolving Credit; and (iv) modify certain covenant compliance and
reporting requirements set forth in the Loan Agreement and the Bank has agreed
to make such modifications according to the terms and subject to the conditions
set forth herein.

         NOW, THEREFORE, in consideration of the premises herein and other good
and valuable consideration, the Borrower and the Bank, intending to be legally
bound hereby, agree as follows:

1.   FACILITY. Subject to the terms and conditions hereof and relying on the
     representations and warranties hereof, the Bank agrees to make Revolving
     Credit Loans to the Borrower until the Expiration Date PROVIDED that the
     sum at any time of (i) the aggregate principal amount of all Revolving
     Credit Loans, (ii) the aggregate face amount of all Letters of Credit and
     (iii) the aggregate amount of all unreimbursed draws on Letters of Credit
     shall not exceed the lesser of $10,000,000 and the Borrowing Base; and
     PROVIDED, FURTHER, that the sum at any time of (y) the aggregate face
     amount of all Letters of Credit and (z) the aggregate amount of all
     unreimbursed draws on Letters of Credit shall not exceed $5,000,000.

     The proceeds of the Revolving Credit shall be used for general corporate
     and working capital purposes.

<PAGE>

2.   TERMS AND CONDITIONS. The Facility shall consist of the components set
     forth in Section 1 hereof in accordance with the following terms:

     2.1  EXPIRATION DATE. Three hundred sixty four (364) days from the date of
          the closing of this Agreement ("CLOSING DATE"), or on such subsequent
          anniversary of the Closing Date as the parties hereto may agree in
          writing (the "REVOLVING CREDIT EXPIRATION DATE").

     2.2. INTEREST RATE OPTIONS. The Borrower shall pay interest upon the
          outstanding unpaid principal amount of the Advances as selected by it
          from the Base Rate Option or LIBOR-Rate Option set forth below
          applicable to the Advances, it being understood that, subject to the
          provisions of this Agreement, the Borrower may select different
          Interest Rate Options and different Interest Periods to apply
          simultaneously to the Advances comprising different Borrowing Tranches
          and may convert to or renew one or more Interest Rate Options with
          respect to all or any portion of the Advances comprising any Borrowing
          Tranche; PROVIDED, THAT, there shall not be at any one time
          outstanding more than forty (40) Borrowing Tranches in the aggregate
          among all of the Advances accruing interest at the LIBOR-Rate Options.
          If at any time the designated rate applicable to any Advance made by
          the Bank exceeds the highest lawful rate, the rate of interest on such
          Advance shall be limited to the highest lawful rate.

          (a)  REVOLVING CREDIT INTEREST RATE OPTIONS. The Borrower shall have
               the right to select from the following Interest Rate Options
               applicable to the Revolving Credit Advances:

               (i)  BASE RATE OPTION: A fluctuating rate per annum (computed on
                    the basis of a year of 360-day year for the actual number of
                    days elapsed) equal to the Revolving Credit Base Rate. The
                    interest applicable to the Obligations (as hereinafter
                    defined) shall change on each date there is a change in the
                    Revolving Credit Base Rate. The Revolving Credit Base Rate
                    shall equal the Prime Rate. "PRIME RATE" means the rate
                    announced from time to time by the Bank as its "prime rate";
                    it is a base rate upon which other rates charged by the Bank
                    are based, and it is not necessarily the best rate offered
                    by the Bank.

                                       and

               (ii) LIBOR-RATE OPTION: A rate per annum (computed on the basis
                    of a year of 360 days and actual days elapsed) equal to the
                    LIBOR-Rate plus two and one-half percent (2.5%).

          (b)  RATE QUOTATIONS. The Borrower may call the Bank on or before the
               date on which an Advance Request is to be delivered to receive an
               indication of the rates then in effect, but it is acknowledged
               that such projection shall

                                      -2-
<PAGE>

               not be binding on the Bank nor affect the rate of interest which
               thereafter is actually in effect when the election is made.

          (c)  INTEREST PERIODS. At any time when the Borrower shall select,
               convert to or renew a LIBOR-Rate Option, the Borrower shall
               notify the Bank thereof at least three (3) Business Days prior to
               the effective date of such LIBOR-Rate Option by delivering an
               Advance Request. The notice shall specify an interest period (the
               "INTEREST PERIOD") during which such Interest Rate Option shall
               apply, such Interest Period to be one, two, three, six or twelve
               Months. Notwithstanding the preceding sentence, the following
               provisions shall apply to any selection of, renewal of, or
               conversion to a LIBOR-Rate Option:

               (i)  ENDING DATE AND BUSINESS DAY. Any Interest Period which
                    would otherwise end on a date which is not a Business Day
                    shall be extended to the next succeeding Business Day unless
                    such Business Day falls in the next calendar month, in which
                    case such Interest Period shall end on the next preceding
                    Business Day.

               (ii) AMOUNT OF BORROWING TRANCHE. Each Borrowing Tranche of
                    LIBOR-Rate Advances shall be in integral multiples of
                    $250,000.

              (iii) TERMINATION BEFORE EXPIRATION DATE. The Borrower shall not
                    select, convert to or renew an Interest Period for any
                    portion of the Advances that would end after the Revolving
                    Credit Expiration Date.

               (iv) RENEWALS. In the case of the renewal of a LIBOR-Rate Option
                    at the end of an Interest Period, the first day of the new
                    Interest Period shall be the last day of the preceding
                    Interest Period, without duplication in payment of interest
                    for such day.

          (d)  INTEREST AFTER DEFAULT. To the extent permitted by Law, upon the
               occurrence of an Event of Default and until such time such Event
               of Default shall have been cured or waived:

               (i)  DEFAULT INTEREST RATE. If any payment due hereunder or under
                    any of the Loan Documents is not made, whether of interest,
                    fees, principal, reimbursement obligations or otherwise,
                    interest shall accrue on the overdue amount at a rate of 2%
                    above the otherwise applicable rate (or, if no rate is
                    otherwise applicable 2% per annum) (the "DEFAULT INTEREST
                    RATE").

                                      -3-
<PAGE>

               (ii) ACKNOWLEDGMENT. The Borrowers acknowledge that the increase
                    in rates referred to in this Section 2.2(d) reflects, among
                    other things, the fact that such Advances or other amounts
                    have become a substantially greater risk given their default
                    status and that the Bank is entitled to additional
                    compensation for such risk; and all such interest shall be
                    payable by Borrower upon demand by Bank.

          (e)  LIBOR-RATE UNASCERTAINABLE.

               (i)  UNASCERTAINABLE. If on any date on which a LIBOR-Rate would
                    otherwise be determined, the Bank shall have determined
                    that:

                    (A)  adequate and reasonable means do not exist for
                         ascertaining such LIBOR-Rate; or

                    (B)  a contingency has occurred which materially and
                         adversely affects the secondary market for negotiable
                         certificates of deposit maintained by dealers of
                         recognized standing relating to the London interbank
                         eurodollar market relating to the LIBOR-Rate, the Bank
                         shall have the rights specified in Section 2.2(f).

               (ii) ILLEGALITY; INCREASED COSTS; DEPOSITS NOT AVAILABLE. If at
                    any time any Bank shall have determined that:

                    (A)  the making, maintenance or funding of any Loan to which
                         a LIBOR-Rate Option applies has been made impracticable
                         or unlawful by compliance by such Bank in good faith
                         with any Law or any interpretation or application
                         thereof by any Official Body or with any request or
                         directive of any such Official Body (whether or not
                         having the force of Law); or

                    (B)  such LIBOR-Rate Option will not adequately and fairly
                         reflect the cost to the Bank of the establishment or
                         maintenance of any such Advance; or

                    (C)  after making all reasonable efforts, deposits of the
                         relevant amount in U.S. Dollars for the relevant
                         Interest Period for an Advance to which a LIBOR-Rate
                         Option applies, respectively, are not available to such
                         Bank at the effective cost of funding a proposed Loan
                         in the London interbank market,

                    then such Bank shall have the rights specified in Section
                    2.2(f).

                                      -4-
<PAGE>

          (f)  BANK'S RIGHTS. In the case of any event specified in
               Section 2.2(e) above, the Bank shall promptly notify the
               Borrower. Upon such date as shall be specified in such notice
               (which shall not be earlier than the date such notice is
               given), the obligation of the Bank to allow the Borrower to
               select, convert to or renew a LIBOR-Rate Option shall be
               suspended until the Bank shall have later notified the
               Borrower of the Bank's determination that the circumstances
               giving rise to such previous determination no longer exist. If
               at any time the Bank makes a determination under Section
               2.2(e)(i) and a Borrower has previously notified the Bank of
               its selection of, conversion to or renewal of a LIBOR-Rate
               Option and such Interest Rate Option has not yet gone into
               effect, such notification shall be deemed to provide for
               selection of, conversion to or renewal of the Base Rate Option
               otherwise available with respect to such Advances. If the Bank
               notifies the Borrower of a determination under Section
               2.2(e)(ii), the Borrower shall, subject to the Borrower's
               indemnification Obligations under Section 11, as to any
               Advance of the Bank to which a LIBOR-Rate Option applies, on
               the date specified in such notice either convert such Advance
               to the Base Rate Option otherwise available with respect to
               such Advance or prepay such Advance in accordance with the
               Revolving Credit Note (as defined herein). Absent due notice
               from the Borrower of conversion or prepayment, such Advance
               shall automatically be converted to the Base Rate Option
               otherwise available with respect to such Advance upon such
               specified date.

          (g)  SELECTION OF INTEREST RATE OPTIONS. If the Borrower fails to
               select a new Interest Period to apply to any Borrowing Tranche
               under the LIBOR-Rate Option at the expiration of an existing
               Interest Period applicable to such Borrowing Tranche in
               accordance with the provisions of Section 2.2(c), the Borrower
               shall be deemed to have converted such Borrowing Tranche to the
               Base Rate Option commencing upon the last day of the existing
               Interest Period.

          (h)  DEFINITIONS. For purposes of this Section 2.2:

               (i)  "BORROWING TRANCHE" shall mean specified portions of the
                    Facility outstanding as follows: (i) any Advances to which a
                    LIBOR-Rate Option applies which become subject to the same
                    Interest Rate Option under the same Advance Request by the
                    Borrower which have the same Interest Period shall
                    constitute one Borrowing Tranche; and (ii) all Advances to
                    which a Base Rate Option applies shall constitute one
                    Borrowing Tranche.

               (ii) "BUSINESS DAYS" shall mean any day other than a Saturday or
                    Sunday or a legal holiday on which commercial banks are
                    authorized or required to be closed for business in Maryland
                    or Pennsylvania and, if the applicable Business Day related
                    to any

                                      -5-
<PAGE>

                    Advance to which the LIBOR-Rate Option applies, such day
                    must also be a day on which dealings in dollar deposits are
                    carried on in the London interbank market.

              (iii) "LAW" shall mean any law (including common law),
                    constitution, statute, treaty, regulation, rule, ordinance,
                    opinion, release, ruling, order, injunction, writ, decree or
                    award of any Official Body.

               (iv) "LIBOR RATE" shall mean with respect to the Advances
                    comprising any Borrowing Tranche to which the LIBOR-Rate
                    Option applies for any Interest Period, the interest rate
                    per annum determined by the Bank by dividing (the resulting
                    quotient rounded upward to the nearest 1/100th of 1% per
                    annum) (i) the rate of interest determined by the Bank in
                    accordance with its usual procedures (which determination
                    shall be conclusive and binding upon the Borrower, absent
                    manifest error on the part of the Bank) to be equal to the
                    offered rates for deposits in U.S. Dollars for the
                    applicable LIBOR-Rate Interest Period which appears on page
                    3750 of the Telerate rate reporting system or other similar
                    system as of approximately 11:00 a.m. London time, two (2)
                    Business Days prior to the first day of such LIBOR-Rate
                    Interest Period for an amount comparable to such Advance and
                    having a borrowing date and a maturity comparable to such
                    Interest Period by (ii) a number equal to 1.00 minus the
                    LIBOR-Rate Reserve Percentage. The LIBOR-Rate may also be
                    expressed by the following formula:

                          LIBOR-Rate = OFFERED RATE ON TELERATE PAGE 3750
                                       -------------------------------------
                                       1.00 - LIBOR-Rate Reserve Percentage

                    If more than one offered rate appears on page 3750 of the
                    Telerate reporting system or similar system, the rate will
                    be the arithmetic mean of such offered rates. The LIBOR-Rate
                    shall be adjusted with respect to any LIBOR-Rate Option
                    outstanding on the effective date of any change in the
                    LIBOR-Rate Reserve Percentage as of such effective date. The
                    Bank shall give prompt notice to the Borrower of the
                    LIBOR-Rate as determined or adjusted in accordance herewith,
                    which determination shall be conclusive absent manifest
                    error.

               (v)  "LIBOR-RATE OPTION" shall mean the option of the Borrower to
                    have Advances bear interest at the rate and under the terms
                    and conditions set forth in Section 2.2.

               (vi) "LIBOR-RATE RESERVE PERCENTAGE" shall mean the maximum
                    percentage (expressed as a decimal rounded upward to the
                    nearest

                                      -6-
<PAGE>

                    1/100 of 1%) as determined by the Bank which is in effect
                    during any relevant period, as prescribed by the Board of
                    Governors of the Federal Reserve System (or any successor)
                    for determining the reserve requirements (including
                    supplemental, marginal and emergency reserve requirements)
                    with respect to eurocurrency funding (currently referred to
                    as "EUROCURRENCY LIABILITIES") of a member bank in such
                    System.

              (vii) "MONTH", with respect to an Interest Period under the
                    LIBOR-Rate Option, shall mean the interval between the days
                    in consecutive calendar months numerically corresponding to
                    the first day of such Interest Period. If any LIBOR-Rate
                    Interest Period beings on a day of a calendar month for
                    which there is no numerically corresponding day in the month
                    in which such Interest Period is to end, the final month of
                    such Interest Period shall be deemed to end on the last
                    Business Day of such final month.

             (viii) "OFFICIAL BODY" shall mean any national, federal, state,
                    local or other government or political subdivision or any
                    agency, authority, bureau, central bank, commission,
                    department or instrumentality of either, or any court,
                    tribunal, grand jury or arbitrator, in each case whether
                    foreign or domestic.

     2.3  FACILITY FEE. The Borrower shall pay to the Bank on the Closing Date a
          facility fee of $12,500.

     2.4  BORROWING BASE/AVAILABILITY. The Revolving Credit shall be available
          in amounts determined in accordance with the Amended and Restated
          Borrowing Base Rider in the form attached hereto as EXHIBIT A.

     2.5  REQUESTS. Except as otherwise provided herein, the Borrower may from
          time to time prior to the applicable Revolving Credit Expiration Date
          request the Bank to make an advance under the Revolving Credit (each
          an "ADVANCE") by delivering to the Bank a request by telephone
          immediately confirmed in writing by letter, facsimile or telex in such
          form (an "ADVANCE REQUEST"), it being understood that the Bank may
          rely on the authority of any individual making such a telephonic
          request without the necessity of receipt of such written confirmation.
          Each Advance Request shall be irrevocable and shall specify (a) the
          proposed borrowing date; (b) the aggregate amount of the proposed
          borrowing hereunder; and (c) the Interest Rate Option. Each Advance
          Request shall be accompanied by the most recent Borrowing Base
          Certificate prepared by the Borrower. Advance Requests using a Base
          Rate Option shall be delivered by 12:00 Noon, Eastern time, on the day
          of the requested Advance. Advance Requests using a Libor-Rate Option
          shall be delivered by 12:00 Noon Eastern time at least three (3)
          Business Days before the requested Advance.

                                      -7-
<PAGE>

     2.6. PROMISSORY NOTES. The obligation of the Borrower to repay the
          aggregate unpaid principal amount of the Revolving Credit, together
          with interest thereon, shall be evidenced by an amended and restated
          promissory note of the Borrower ("REVOLVING CREDIT NOTE") payable to
          the order of the Bank in a face amount equal to the maximum amount of
          the Revolving Credit.

     2.7. INTENTIONALLY OMITTED.

     2.8. LETTERS OF CREDIT. Standby Letters of Credit, in the aggregate face
          amount of up to $5,000,000, may be issued on behalf of the Borrower
          subject to the terms and conditions of this Agreement and the L/C
          Agreements (as defined below) including:

          (a)  ISSUANCE OF LETTERS OF CREDIT. At any time prior to the Revolving
               Credit Expiration Date, the Borrower may request the issuance of
               letters of credit (each a "LETTER OF CREDIT") by delivering to
               the Bank completed Irrevocable Standby Letter of Credit
               Application and Reimbursement Form for Irrevocable Standby Letter
               of Credit (the "L/C AGREEMENTS") or such other forms as the Bank
               may specify from time to time by no later than 10:00 a.m. Eastern
               time at least three (3) Business Days, or such shorter period as
               may be agreed to by the Bank, in advance of the proposed date of
               issuance. Subject to the terms and conditions hereof, and to the
               terms of the L/C Agreements, the Bank will issue a Letter of
               Credit having a maturity date no later than (i) the Revolving
               Credit Expiration Date or (ii) some later date if approved by the
               Bank and if the face amount of the Letter of Credit is fully cash
               collateralized on terms acceptable to the Bank.

          (b)  LETTER OF CREDIT FEES. The Borrower shall pay to the Bank, with
               respect to any Letter of Credit, a flat fee of 1.0% per annum on
               the daily average undrawn face amount of such standby Letter of
               Credit for the period from and including the date of issuance of
               such Letter of Credit, payable quarterly in arrears commencing
               with the first Business Day of each January, April, July and
               October following issuance of each Letter of Credit and on the
               Revolving Credit Expiration Date. The Borrower shall also pay to
               the Bank customary fees and administrative expenses payable with
               respect to the Letters of Credit as the Bank may generally charge
               or incur from time to time in connection with the issuance,
               maintenance, modification (if any), assignment or transfer (if
               any), negotiation, and administration of Letters of Credit.

          (c)  REIMBURSEMENT. In the event of any request for a drawing under a
               Letter of Credit by the beneficiary or transferee thereof, the
               Bank will promptly notify the Borrower. Provided that it shall
               have received such notice, the Borrower shall reimburse (such
               obligation to reimburse the Bank shall

                                      -8-
<PAGE>

               sometimes be referred to as a "REIMBURSEMENT OBLIGATION") the
               Bank prior to 12:00 Noon, Eastern time on each date that an
               amount is paid by the Bank under any Letter of Credit (each such
               date, a "DRAWING DATE") in an amount equal to the amount so paid
               by the Bank. Any notice given by the Bank pursuant to this
               Section 2.8 (c) may be oral if immediately confirmed in writing;
               PROVIDED, THAT the lack of such an immediate confirmation shall
               not affect the conclusiveness or binding effect of such notice.

               With respect to any unreimbursed drawing, the Borrower shall be
               deemed to have incurred from the Bank an Advance under the
               Revolving Credit in the amount of such drawing. Such loan shall
               be due and payable on demand (together with interest) and shall
               bear interest before demand at the Revolving Credit Base Rate per
               annum and after demand at the Default Interest Rate.

3.   SECURITY. Subject to the partial release contained in the Affirmation and
     Partial Release of Security Agreement of even date herewith, the security
     for repayment of the Facility shall include but not be limited to the
     collateral, guaranties and other documents heretofore, contemporaneously or
     hereafter executed and delivered to the Bank (the "SECURITY DOCUMENTS"),
     which shall secure repayment of the Facility, the Revolving Credit Note and
     draws under Letter of Credits and any amendments, extensions, renewals or
     increases and all costs and expenses of the Bank incurred in the
     documentation, negotiation, modification, enforcement, collection or
     otherwise in connection with any of the foregoing, including but not
     limited to reasonable attorneys' fees and expenses (hereinafter referred to
     collectively as the "OBLIGATIONS"). This Agreement (including the Addendum
     and any Riders thereto), the Revolving Credit Note, the L/C Agreements and
     the Security Documents are collectively referred to as the "LOAN
     DOCUMENTS".

4.   REPRESENTATIONS AND WARRANTIES. The Borrower makes the following
     representations and warranties to the Bank which shall be true and correct
     as of the date of this Agreement and the date of the making of any Advance,
     and which shall be true and correct except as otherwise set forth on the
     Addendum attached hereto and incorporated herein by reference (the
     "ADDENDUM").

     4.1  EXISTENCE, POWER AND AUTHORITY. The Borrower is duly organized,
          validly existing and in good standing under the laws of the State of
          its incorporation or organization and has the power and authority to
          own and operate its assets and to conduct its business as now or
          proposed to be carried on, and is duly qualified, licensed and in good
          standing to do business in all jurisdictions where its ownership of
          property or the nature of its business requires such qualification or
          licensing, except where the failure to be so qualified or licensed
          would not have a Material Adverse Effect (as defined herein). The
          Borrower is duly authorized to execute and deliver the Loan Documents,
          all necessary action to authorize the execution and delivery of the
          Loan Documents has been properly taken, and the

                                      -9-
<PAGE>

          Borrower is and will continue to be duly authorized to borrow under
          this Agreement and to perform all of the other terms and provisions of
          the Loan Documents.

     4.2. FINANCIAL STATEMENTS.

          (a) The Borrower has delivered or caused to be delivered to the Bank
          its consolidated balance sheet and income statement for the fiscal
          year ended December 31, 1999, for the quarter ended March 31, 2000,
          and for the quarter and six months ended June 30, 2000 (the
          "HISTORICAL FINANCIAL STATEMENTS"). The Historical Financial
          Statements are true, complete and accurate in all material respects
          and fairly present the consolidated financial condition, assets and
          liabilities, whether accrued, absolute, contingent or otherwise and
          the result of Borrower's operations for the period specified therein.
          The Historical Financial Statements have been prepared in accordance
          with GAAP, subject in the case of interim statements to normal
          year-end adjustments and to any comments and notes acceptable to the
          Bank.

          (b) The Borrower has delivered to the Bank projections of its
          anticipated financial performance for the period beginning on January
          1, 2000 and continuing through December 31, 2000 (the "FINANCIAL
          PROJECTIONS").

     4.3. NO MATERIAL ADVERSE CHANGE. Since the date of the Historical Financial
          Statements, the Borrower has not suffered any material damage,
          destruction or loss to its assets, and no event or condition has
          occurred or exists, which has resulted or would reasonably be expected
          to result in a material adverse change in its business, assets,
          operations, financial condition or results of operation. Since the
          preparation of the Financial Projections, there has been no material
          adverse change as against such Financial Projections.

     4.4. BINDING OBLIGATIONS. The Borrower has full power and authority to
          enter into the transactions provided for in this Agreement and has
          been duly authorized to do so by appropriate action of its Board of
          Directors; and the Loan Documents, when executed and delivered by such
          Borrower, will constitute the legal, valid and binding obligations of
          such Borrower enforceable in accordance with their terms, except as
          enforcement may be limited by applicable bankruptcy, insolvency,
          reorganization, moratorium or similar law affecting the rights of
          creditors generally, general equitable principles and an implied
          covenant or good faith and fair dealing.

     4.5. NO DEFAULTS OR VIOLATIONS. There does not exist any Event of Default
          under this Agreement or any material default or violation by the
          Borrower of or under any of the terms, conditions or obligations of:
          (i) its articles or certificate of incorporation, regulations or
          bylaws; (ii) any material indenture, mortgage, deed of trust,
          franchise, permit, contract, agreement, or other instrument to which
          it is a

                                      -10-
<PAGE>

          party or by which it is bound; or (iii) any material law, regulation,
          ruling, order, injunction, decree, condition or other requirement
          applicable to or imposed upon it by any law, the action by any court
          or any governmental authority or agency; and the consummation of this
          Agreement and the transactions set forth herein will not result in any
          such default or violation.

     4.6. TITLE TO ASSETS. The Borrower has valid title to its assets reflected
          on the Historical Financial Statements, free and clear of all liens
          and encumbrances, except for (i) current taxes and assessments not yet
          due and payable, (ii) liens and encumbrances, if any, reflected or
          noted in the Historical Financial Statements, (iii) assets disposed of
          by such Borrower in the ordinary course of business since the date of
          the Historical Financial Statements, and (iv) those liens or
          encumbrances specified on the Addendum.

     4.7. LITIGATION. There are no actions, suits, proceedings or governmental
          investigations pending or, to the Borrower's knowledge, threatened
          against the Borrower, which could reasonably be expected to result in
          a material adverse change in its business, assets, operations,
          financial condition or results of operations ("MATERIAL ADVERSE
          EFFECT") and there is no basis reasonably known to the Borrower for
          any action, suit, proceedings or investigation which could reasonably
          be expected to have a Material Adverse Effect. All pending or
          threatened litigation against the Borrower of which the Borrower has
          knowledge is listed on the Addendum.

     4.8. TAX RETURNS. The Borrower has filed all returns and reports that are
          required to be filed in connection with any federal, state or local
          tax, duty or charge levied, assessed or imposed upon it or its
          property or withheld by it, including unemployment, social security
          and similar taxes and all of such taxes (including distributions to
          stockholders in respect of taxes on the Borrower's earnings
          attributable to such stockholders), have been either paid or adequate
          reserves or other provisions have been made.

     4.9. EMPLOYEE BENEFIT PLANS. Each employee benefit plan as to which the
          Borrower may have any liability complies in all material respects with
          all applicable provisions of the Employee Retirement Income Security
          Act of 1974 ("ERISA"), including minimum funding requirements, and (i)
          no Prohibited Transaction (as defined under ERISA) has occurred with
          respect to any such plan, (ii) no Reportable Event (as defined under
          Section 4043 of ERISA) has occurred with respect to any such plan
          which would cause the Pension Benefit Guaranty Corporation to
          institute proceedings under Section 4042 of ERISA, (iii) the Borrower
          has not withdrawn from any such plan or initiated steps to do so, and
          (iv) no steps have been taken to terminate any such plan.

    4.10. ENVIRONMENTAL MATTERS. The Borrower is in compliance, in all material
          respects, with all Environmental Laws, including, without limitation,
          all Environmental

                                      -11-
<PAGE>

          Laws in jurisdictions in which the Borrower owns or operates, or has
          owned or operated, a facility or site, stores Collateral, arranges or
          has arranged for disposal or treatment of hazardous substances, solid
          waste or other waste, accepts or has accepted for transport any
          hazardous substances, solid waste or other wastes or holds or has held
          any interest in real property or otherwise. Except as otherwise
          disclosed on the Addendum, no litigation or proceeding arising under,
          relating to or in connection with any Environmental Law is pending or,
          to the best of the Borrower's knowledge, threatened against the
          Borrower, any real property which the Borrower holds or has held an
          interest or any past or present operation of the Borrower. To the
          knowledge of the Borrower, no release, threatened release or disposal
          of hazardous waste, solid waste or other wastes is occurring, or has
          occurred, on, under or to any real property in which the Borrower
          holds any interest or performs any of its operations, in material
          violation of any Environmental Law. As used in this Section,
          "LITIGATION OR PROCEEDING" means any demand, claim notice, suit, suit
          in equity, action, administrative action, investigation or inquiry
          whether brought by a governmental authority or other person, and
          "ENVIRONMENTAL LAWS" means all provisions of laws, statutes,
          ordinances, rules, regulations, permits, licenses, judgments, writs,
          injunctions, decrees, orders, awards and standards promulgated by any
          governmental authority concerning health, safety and protection of, or
          regulation of the discharge of substances into, the environment.

    4.11. INTELLECTUAL PROPERTY. The Borrower owns or, to the best of
          Borrower's knowledge, has the right to use all patents, patent rights,
          trademarks, trade names, service marks, copyrights, intellectual
          property, technology, know-how and processes necessary for the conduct
          of its business as currently conducted that are material to the
          condition (financial or otherwise), business or operations of the
          Borrower.

    4.12. REGULATORY MATTERS. No part of the proceeds of the Facility will be
          used for "purchasing" or "carrying" any "margin stock" within the
          respective meanings of each of the quoted terms under Regulation U of
          the Board of Governors of the Federal Reserve System as now and from
          time to time in effect or for any purpose which violates the
          provisions of the Regulations of such Board of Governors.

    4.13. SOLVENCY. As of the date hereof and after giving effect to the
          transactions contemplated by the Loan Documents, the Borrower will
          have sufficient cash flow to enable it to pay its debts as they
          mature.

    4.14. DISCLOSURE. None of the Loan Documents contains any untrue statement
          of material fact or omits to state a material fact necessary in order
          to make the statements contained in this Agreement or the Loan
          Documents not misleading.

    4.15. YEAR 2000. The Borrower has reviewed the areas within its business
          and operations which could be adversely affected by, and has developed
          or is

                                      -12-
<PAGE>

          developing a program to address on a timely basis the risk that
          certain computer applications used by the Borrower may be unable to
          recognize and perform properly date-sensitive functions involving
          dates prior to and after December 31, 1999 (the "YEAR 2000 PROBLEM").
          The rollover to calendar year 2000 has not resulted in, and the Year
          2000 Problem will not result in, any Material Adverse Effect.

5.   AFFIRMATIVE COVENANTS. The Borrower agrees that from the date of execution
     of this Agreement until all Obligations have been fully paid and any
     commitments of the Bank to the Borrower have been terminated, the Borrower
     will:

     5.1. BOOKS AND RECORDS. Maintain books and records accurately and properly
          such that the presentation of its financial statements is in
          accordance with GAAP and give representatives of the Bank access
          thereto at all reasonable times following notice from the Bank,
          including permission to examine, copy and make abstracts from any of
          such books and records and such other information as the Bank may from
          time to time reasonably request, and the Borrower will make available
          to the Bank for examination copies of any reports, statements or
          returns which the Borrower may make to or file with any governmental
          department, bureau or agency, federal or state. Borrower will notify
          the Bank in writing of any material changes from the assumptions and
          methodologies employed in the Borrower's preparation and presentation
          of its Historical Financial Statements.

     5.2. INTERIM FINANCIAL STATEMENTS; CERTIFICATE OF NO DEFAULT; ACCOUNTS
          RECEIVABLE. Furnish the Bank within twenty (20) days after the end of
          each month: (i) a detailed report on its accounts receivable in such
          reasonable detail consistent with the form currently used by the
          Borrower's management; and (ii) a certificate signed by such officer
          which verifies compliance with applicable financial covenants for the
          period then ended and whether any Event of Default exists, and, if so,
          the nature thereof and the corrective measures the Borrower proposes
          to take; PROVIDED, HOWEVER, that the Borrower is required to furnish
          such reports only during the months the Borrower has outstanding
          Obligations under this Agreement.

          The Borrower shall also provide within forty-five (45) days of the end
          of each fiscal quarter its Financial Statements (as defined
          hereinafter) for such period, in reasonable detail, certified by the
          president, chief executive officer or chief financial officer of the
          Borrower and prepared in accordance with GAAP applied from period to
          period. "FINANCIAL STATEMENTS" means the Borrower's consolidated and,
          if required by the Bank in its reasonable discretion, consolidating
          balance sheets, income statements and statements of cash flows for the
          year, month or (excepting statements of cash flows) quarter together
          with year-to-date figures and comparative figures for the
          corresponding periods of the prior year.

                                      -13-
<PAGE>

     5.3. ANNUAL FINANCIAL STATEMENTS. Furnish the Borrower's Financial
          Statements to the Bank within 120 days after the end of each fiscal
          year. Those Financial Statements will be prepared in accordance with
          GAAP and audited by an independent certified public accountant
          selected by the Borrower and reasonably satisfactory to the Bank.
          Audited Financial Statements shall contain the unqualified opinion of
          an independent certified public accountant and its examination shall
          have been made in accordance with GAAP. The Borrower will also provide
          filings made with any regulatory authority, to the extent requested by
          the Bank, and such other information reasonably requested by the Bank,
          from time to time.

     5.4. PAYMENT OF TAXES AND OTHER CHARGES. Pay and discharge in accordance
          with past practice all indebtedness and pay when due all taxes,
          assessments, charges, levies and other liabilities imposed by
          government authorities upon the Borrower, or upon the Borrower's
          stockholders because of the Borrower, its income, profits, property or
          business, except those which currently are being contested in good
          faith by appropriate proceedings and for which the Borrower shall have
          set aside adequate reserves in accordance with GAAP or made other
          adequate provision with respect thereto acceptable to the Bank.

     5.5. MAINTENANCE OF EXISTENCE, OPERATION AND ASSETS. Do all things
          necessary to maintain, renew and keep in full force and effect its
          organizational existence and all rights, permits and franchises
          necessary to enable it to continue its business; continue in operation
          in substantially the same manner as at present; keep its properties in
          good operating condition and repair; and make all necessary and proper
          repairs, renewals, replacements, additions and improvements thereto.

     5.6. INSURANCE. Maintain with financially sound and reputable insurers,
          insurance with respect to its property and business against such
          casualties and contingencies, of such types and in such amounts as is
          customary for established companies engaged in the same or similar
          business and similarly situated. In the event of a conflict between
          the provisions of this Section and the terms of any Security Documents
          relating to insurance, the provisions in the Security Documents will
          control.

     5.7. COMPLIANCE WITH LAWS. Comply in all material respects with all laws
          applicable to the Borrower and to the operation of its business
          (including any statute, rule or regulation relating to employment
          practices and pension benefits or to environmental, occupational and
          health standards and controls).

     5.8. BANK ACCOUNTS. Establish and maintain at the Bank or at an affiliate
          of the Bank all of the Borrower's main depository accounts.

                                      -14-
<PAGE>

     5.9. FINANCIAL COVENANTS. Comply with all of the financial and other
          covenants, if any, set forth on the Addendum, subject to all
          applicable cure periods set forth herein.

    5.10. ADDITIONAL REPORTS. Provide prompt written notice to the Bank of the
          occurrence of any of the following of which the Borrower obtains
          knowledge (together with a description of the action which the
          Borrower proposes to take with respect thereto): (i) any Event of
          Default, (ii) any litigation filed by or against the Borrower, (iii)
          any Reportable Event or Prohibited Transaction with respect to any
          Employee Benefit Plan(s) (as defined in ERISA), or (iv) any event
          which might reasonably be expected to have a Material Adverse Effect.

6.   NEGATIVE COVENANTS. The Borrower covenants and agrees that from the date of
     execution of this Agreement until all Obligations have been fully paid and
     any commitments of the Bank to the Borrower have been terminated, the
     Borrower will not, except as set forth in the Addendum, without the prior
     written consent of the Bank, which will not be unreasonably withheld or
     delayed:

     6.1. INDEBTEDNESS. Incur any indebtedness for borrowed money other than:
          (i) the Facility and any subsequent indebtedness to the Bank; (ii)
          existing indebtedness disclosed on the Borrower's Historical Financial
          Statements; (iii) additional unsecured indebtedness (including capital
          leases) in an amount not to exceed in the aggregate at any time Five
          Million Dollars ($5,000,000); or (iv) payables incurred in the
          ordinary course of business.

     6.2. LIENS AND ENCUMBRANCES. Except as provided in Section 4.6, create,
          assume or permit to exist any mortgage, pledge (excluding pledges by
          the Borrower's stockholders of the capital stock of the Borrower),
          encumbrance or other security interest or lien upon any assets now
          owned or hereafter acquired or enter into any lease or any arrangement
          for the acquisition of property subject to any conditional sales
          agreement, other than liens securing indebtedness permitted under
          Section 6.1 or statutory liens which do not materially affect the
          Collateral, or in the aggregate, materially impair the ability of the
          Borrower to perform its Obligations hereunder or under the other Loan
          Documents.

     6.3. ADVANCES OR INVESTMENTS. Purchase or hold beneficially any stock,
          other securities or evidences of indebtedness of any loans, advances
          to, or make any investment or acquire any interest whatsoever in, any
          other person, firm or corporation except:

          (i)  trade credit extended on usual and customary items in the
               ordinary course of business;

          (ii) loans to employees to purchase the capital stock of the Borrower
               as disclosed in the Addendum;

                                      -15-
<PAGE>

          (iii) transfers to subsidiaries or affiliates;

          (iv) investments in direct obligations of the United States of America
               or any agency or instrumentality thereof or obligation backed by
               the full faith and credit of the United States of America
               maturing in twelve (12) months or less from the date of
               investment;

          (v)  investments in commercial paper maturing in 180 days or less
               rated not lower than A-1, by Standard & Poor's or P-1 by Moody's
               Investors Service, Inc. on the date of the investment;

          (vi) investments in demand deposits, time deposits or certificates of
               deposit maturing within one year in commercial banks whose
               obligations are rated A-1, A or the equivalent or better by
               Standard & Poor's on the date of the investment (items (iv), (v),
               and (vi) collectively referred to as the "PERMITTED
               INVESTMENTS"); and

         (vii) the Borrower may acquire the assets or securities of any other
               Person provided that (i) at the time of such acquisition no Event
               of Default shall have occurred and be continuing or be caused by
               such acquisition, (ii) the assets become the property of the
               Borrower, subject, in the case of Accounts, to the Bank's prior
               perfected security interest and, in the case of an acquisition of
               securities, the Person becomes jointly and severally obligated to
               the Bank for the Obligations on terms satisfactorily to the Bank,
               (iii) the board of directors or other equivalent governing body
               of such acquired Person shall have approved such acquisition, (v)
               the acquired Person is engaged in a business related to that of
               the Borrower, and (vi) the Borrower shall have provided the Bank
               at least three (3) Business Days prior to such acquisition, with
               a certificate stating that (A) such acquisition shall not violate
               any covenants of this Agreement and (B) establishing that, on a
               twelve month pro forma basis after taking into account the
               acquisition, the Borrower is in compliance with the financial
               covenants set forth in this Agreement ("PERMITTED ACQUISITIONS").

          PROVIDED, HOWEVER, that (A) the Permitted Investments are made in
          connection with a treasury management and investment program
          approved by the Borrower's Board of Directors; and (B) Permitted
          Acquisitions do not exceed $10,000,000 in the aggregate
          consideration (including consideration paid and debt assumed).

     6.4. MERGER OR TRANSFER OF ASSETS. Merge or consolidate with or into any
          person, firm or corporation, except a merger of OTG and a wholly-owned
          subsidiary of OTG, or, during any fiscal year, lease, sell, transfer
          or otherwise dispose of its

                                      -16-
<PAGE>

               property or assets (excluding the sale of inventory and obsolete
               or unused equipment in the ordinary course of business), whether
               now owned or hereafter acquired.

     6.5. CHANGE IN BUSINESS, MANAGEMENT OR OWNERSHIP. Make or permit any
          material change in any of its lines of business as carried on as of
          the date hereof.

     6.6. DIVIDENDS. Declare or pay any dividends on or make any distribution
          with respect to any class of its equity or ownership interest, or
          purchase, redeem, retire or otherwise acquire any of its equity;
          PROVIDED, HOWEVER, that such restriction shall not apply once the
          Borrower is profitable. For purposes of this Section 6.6, the term
          "PROFITABLE" shall mean positive Net Income after Taxes, measured in
          accordance with generally accepted accounting principles consistently
          applied.

7.   EVENTS OF DEFAULT. The occurrence of any of the following will be deemed to
     be an "EVENT OF DEFAULT":

     7.1. PAYMENT DEFAULT. The Borrower shall fail to pay any payment of
          principal when due or any payment of interest within five (5) business
          days following the date when due, in respect of the Obligations.

     7.2. MATERIAL ADVERSE CHANGE. There shall be a material adverse change in
          the business, operations, assets, financial condition or results of
          operations of the Borrower.

     7.3. COVENANT DEFAULT. The Borrower shall default in the performance of, or
          violate any of, the covenants or agreements contained in this
          Agreement, which default shall not have been cured within thirty (30)
          business days after the occurrence thereof.

     7.4. BREACH OF WARRANTY. Any Financial Statement, representation, warranty
          or certificate made or furnished by the Borrower to the Bank in
          connection with this Agreement shall be false, incorrect or incomplete
          in any material respect when made.

     7.5. BANKRUPTCY OR INSOLVENCY. A proceeding shall have been instituted in a
          court having jurisdiction over the Borrower seeking a decree or order
          for relief in respect of the Borrower in an involuntary case under any
          applicable bankruptcy, insolvency reorganization or other similar law
          and such involuntary case shall remain undismissed or unstayed and in
          effect for a period of sixty (60) consecutive days, or the Borrower
          shall commence a voluntary case under any such law or consent to the
          appointment of a receiver, liquidator, assignee, custodian, trustee,
          sequestrator, conservator (or other similar official).

                                      -17-
<PAGE>

     7.6  OTHER DEFAULT. The occurrence of an Event of Default as defined in the
          Revolving Credit Note or any of the Security Documents, or a violation
          of any of the requirements set forth in the Borrowing Base Rider.

          Upon the occurrence of an Event of Default, and at any time
          thereafter, the Bank may declare all Obligations hereunder immediately
          due and payable will have all rights and remedies (which are
          cumulative and not exclusive) specified in the Revolving Credit Note
          and the Security Documents and available under applicable law or in
          equity upon the delivery of prior written notice to the Borrower.

     8.1  CONDITIONS. The Bank's obligation to enter into this Agreement is
          subject to the Borrower's satisfaction of the following conditions:

          (a) NO EVENT OF DEFAULT. No Event of Default or event which with the
          passage of time, provision of notice or both would constitute an Event
          of Default shall have occurred and be continuing.

          (b) AUTHORIZATION DOCUMENTS. The Borrower shall have furnished to the
          Bank certified copies of resolutions of the board of directors
          authorizing the execution of this Agreement, the Revolving Credit Note
          or any of the Security Documents; or other proof of authorization
          satisfactory to the Bank.

          (c) RECEIPT OF LOAN DOCUMENTS. The Borrower shall have executed and
          delivered to the Bank the Loan Documents and such other instruments
          and documents which the Bank may reasonably request in connection with
          the transactions provided for in this Agreement.

          (d) COLLATERAL/SECURITY. The Bank shall have received first priority
          security interests and liens on all assets of the Borrower and shall
          have received all such instruments and documents necessary to perfect
          such security interests and liens.

          (e) REPRESENTATIONS AND WARRANTIES. The representations and warranties
          of the Borrower to the Bank shall be true and correct in all respects.

     8.2. ADDITIONAL ADVANCES. At the time of making each Advance under the
          Revolving Credit or the issuance of any Letter of Credit, and after
          giving effect to any such proposed extensions of credit: (i) the
          representations and warranties of the Borrower contained in the Loan
          Documents shall be true on and as of the date of such funding or
          Advance with the same effect as though such representations and
          warranties had been made on and as of such date (except
          representations and warranties which expressly relate solely to an
          earlier date or time, which representations and warranties shall be
          true and correct on and as of the specific dates or times referred to
          therein) and the Borrower shall have performed and complied with all
          covenants and conditions hereof; (ii) no Event of Default or any event
          specified in Section 7, which, with the giving of notice, lapse of
          time or both, would become an Event of Default, shall have occurred
          and be continuing or shall exist; (iii) the advancement of funds under
          the Revolving Credit or the issuance of a

                                      -18-
<PAGE>

     Letter of Credit shall not contravene any law applicable to the
     Borrower or the Bank, as applicable; and (iv) the Borrower shall have
     delivered to the Bank a duly executed and completed Advance Request or
     L/C Agreement.

9.   EXPENSES. The Borrower agrees to pay the Bank, upon the closing of this
     Agreement, and otherwise on demand, all reasonable and necessary costs and
     expenses incurred by the Bank in connection with the (i) preparation,
     negotiation and delivery of this Agreement and the other Loan Documents,
     and any modifications thereto (including reasonable attorney's fees, and
     (ii) collection of the loan or instituting, maintaining, preserving,
     enforcing and foreclosing the security interest in any of the collateral
     securing the Facility, whether through judicial proceedings or otherwise,
     or in defending or prosecuting any actions or proceedings arising out of or
     relating to this Agreement, including reasonable fees and expenses of
     counsel, expenses for auditors, appraisers and environmental consultants,
     lien searches, recording and filing fees and taxes.

10.  INCREASED COSTS. Within twenty (20) days following written demand, together
     with the written evidence of the justification therefor, the Borrower
     agrees to pay the Bank all direct costs incurred and any losses suffered or
     payments made by the Bank as a consequence of making the Facility by reason
     of any change in law or regulation or its interpretation imposing any
     reserve, deposit, allocation of capital or similar requirement (including
     without limitation, Regulation D of the Board of Governors of the Federal
     Reserve System) on the Bank, its holding company or any of their respective
     assets; PROVIDED, HOWEVER, that the Bank shall make no such written demand
     on the Borrower unless similar demands have been made against all other
     similarly situated customers of the Bank.

11.  INDEMNITY. In addition to the compensation required by Section 10, the
     Borrower shall jointly and severally indemnify the Bank against all
     liabilities, losses or expenses (including loss of margin, any loss or
     expense incurred in liquidating or employing deposits from third parties
     and any loss or expense incurred in connection with funds acquired by a
     Bank to fund or maintain Advances subject to a LIBOR-Rate Option) which the
     Bank sustains or incurs as a consequence of any:

       (i)  payment, prepayment, conversion or renewal of any Advance to which a
            LIBOR-Rate Option applies on a day other than the last day of the
            corresponding Interest Period (whether or not such payment or
            prepayment is mandatory, voluntary or automatic and whether or not
            such payment or prepayment is then due);

       (ii) attempt by the Borrower to revoke (expressly, by later inconsistent
            notices or otherwise) in whole or part any Advance Request under
            Section 2.5 or Section 2.2(c) or notice relating to prepayments as
            set forth in the Revolving Credit Note of even date herewith; or

      (iii) default by the Borrower in the performance or observance of any
            covenant or condition contained in this Agreement or any other Loan
            Document,

                                      -19-
<PAGE>

            including any failure of the Borrower to pay when due (by
            acceleration or otherwise) any principal, interest or any other
            amount due hereunder.

         If any Bank sustains or incurs any such loss or expense, it shall from
         time to time notify the Borrower of the amount determined in good faith
         by the Bank (which determination may include such reasonable
         assumptions, allocations of costs and expenses and averaging or
         attribution methods) to be necessary to indemnify the Bank for such
         loss or expense. Such notice shall set forth in reasonable detail the
         basis for such determination. Such amount shall be due and payable by
         the Borrower to the Bank ten (10) Business Days after such notice is
         given.

12.  MISCELLANEOUS.

    12.1. NOTICES. All notices, demands, requests, consents, approvals and
          other communications required or permitted hereunder must be in
          writing and will be effective upon receipt if delivered personally to
          such party, or if sent by facsimile transmission with confirmation of
          delivery, or by nationally recognized overnight courier service, to
          the address set forth below or to such other address as any party may
          give to the other in writing for such purpose:

         To the Bank:                              To the Borrower:

         PNC Bank, National Association            OTG Software, Inc.
         VentureBank@PNC                           6701 Democracy Boulevard
         11600 Sunrise Valley Drive                Suite 805
         Reston, VA  20191                         Bethesda, MD  20817
         Attention:  Katharine S. Kappler          Attention:  Ronald W. Kaiser
         Facsimile No.:  703-391-9734              Facsimile No.:  301-897-4794

     12.2 PRESERVATION OF RIGHTS. No delay or omission on the part of the Bank
          to exercise any right or power arising hereunder will impair any such
          right or power or be considered a waiver of any such right or power or
          any acquiescence therein, nor will the action or inaction of the Bank
          impair any right or power arising hereunder. The rights and remedies
          hereunder of the Bank are cumulative and not exclusive of any other
          rights or remedies which the Bank may have under other agreements, at
          law or in equity.

    12.3. ILLEGALITY. In case any one or more of the provisions contained in
          this Agreement should be invalid, illegal or unenforceable in any
          respect, the validity, legality and enforceability of the remaining
          provisions contained herein shall not in any way be affected or
          impaired thereby.

    12.4. CHANGES IN WRITING. No modification, amendment or waiver of any
          provision of this Agreement will in any event be effective unless the
          same is in writing and signed by the Bank and then such waiver or
          consent shall be effective only in the specific instance and for the
          purpose for which given. No notice to or demand on

                                      -20-
<PAGE>

          the Borrower in any case will entitle the Borrower to any other or
          further notice or demand in the same, similar or other circumstance.

    12.5. ENTIRE AGREEMENT. This Agreement (including the documents and
          instruments referred to herein) constitutes the entire agreement and
          supersedes all other prior agreements and understandings, both written
          and oral, between the parties with respect to the subject matter
          hereof.

    12.6. COUNTERPARTS. This Agreement may be signed in any number of
          counterpart copies and by the parties hereto on separate counterparts,
          but all such copies shall constitute one and the same instrument.

    12.7. SUCCESSORS AND ASSIGNS. This Agreement will be binding upon and inure
          to the benefit of the Borrower and the Bank and their respective,
          successors and assigns; PROVIDED, HOWEVER, that the Borrower may not
          assign this Agreement in whole or in part without the prior written
          consent of the Bank and the Bank at any time may assign this Agreement
          to a recognized institutional lender who agrees in writing to be bound
          to all confidentiality obligations of the Bank in connection with any
          Loan Documents, in whole or in part, upon prior written notice to the
          Borrower.

    12.8. INTERPRETATION. In this Agreement, unless the Bank and the Borrower
          otherwise agree in writing, the singular includes the plural and the
          plural the singular; words importing any gender include the other
          genders; references to statutes are to be construed as including all
          statutory provisions consolidating, amending or replacing the statute
          referred to; the word "or" shall be deemed to include "and/or", the
          words "including", "includes" and "include" shall be deemed to be
          followed by the words "without limitation"; references to articles,
          sections (or subdivisions of sections) or exhibits are to those of
          this Agreement unless otherwise indicated; and references to
          agreements and other contractual instruments shall be deemed to
          include all subsequent amendments and other modifications to such
          instruments, but only to the extent such amendments and other
          modifications are not prohibited by the terms of this Agreement.
          Section headings in this Agreement are included for convenience of
          reference only and shall not constitute a part of this Agreement for
          any other purpose. Unless otherwise specified in this Agreement, all
          accounting terms shall be interpreted and all accounting
          determinations shall be made in accordance with GAAP. If this
          Agreement is executed by more than one party as Borrower, the
          obligations of such persons or entities will be joint and several.

    12.9. ASSIGNMENTS AND PARTICIPATION. Notwithstanding any other provisions
          of this Agreement, the Bank may, at any time in its sole discretion,
          without any notice to the Borrower, sell, assign, transfer, negotiate,
          grant participation in, or otherwise dispose of all or any part of the
          Bank's interest in the Facility to a recognized institutional lender
          who agrees in writing to be bound to all confidentiality obligations
          of the Bank in connection with any Loan Documents. The Borrower

                                      -21-
<PAGE>

          hereby authorizes the Bank to provide, upon notice to the Borrower,
          any information concerning the Borrower to recognize institutional
          lenders, including information pertaining to the Borrower's financial
          condition, business operations or general creditworthiness, to any
          person or entity which may succeed to or participate in all or any
          part of the Bank's interest in the Facility, provided that such person
          or entity agrees to maintain the confidentiality of such information
          and be bound by all the Bank's confidentiality obligations to the
          Borrower.

   12.10. GOVERNING LAW AND JURISDICTION. This Agreement has been delivered to
          and accepted by the Bank and will be deemed to be made in the
          Commonwealth of Pennsylvania. THIS AGREEMENT WILL BE INTERPRETED AND
          THE RIGHTS AND LIABILITIES OF THE PARTIES HERETO DETERMINED IN
          ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA,
          EXCLUDING ITS CONFLICT OF LAWS RULES. The Borrower hereby irrevocably
          consents to the exclusive jurisdiction of any state or federal court
          seated in Allegheny County, Pennsylvania, and consents that all
          service of process be sent by nationally recognized overnight courier
          service directed to the Borrower at the Borrower's address set forth
          herein and service so made will be deemed to be completed on the
          Business Day after deposit with such courier; provided that nothing
          contained in this Agreement will prevent the Bank from bringing any
          action, enforcing any award or judgment or exercising any rights
          against the Borrower, against any security or against any property of
          the Borrower within any other county, state or other foreign or
          domestic jurisdiction. The Bank and the Borrower agree that the venue
          provided above is the most convenient forum for both the Bank and the
          Borrower. The Borrower waives any objection to venue and any objection
          based on a more convenient forum in any action instituted under this
          Agreement.

   12.11. CONFIDENTIALITY. The Bank agrees to keep confidential all non-public
          information provided to it by the Borrower pursuant to this Agreement
          that is designated by the Borrower in writing as confidential;
          PROVIDED that nothing herein shall prevent the Bank from disclosing
          any such information (i) to any recipient which receives such
          information having been made aware of the confidential nature thereof,
          (ii) to its employees, directors, agents, attorneys, accountants and
          other professional advisors, (iii) upon the request or demand of any
          examiner or other governmental authority or agency having jurisdiction
          over the Bank, (iv) in response to any order of any court or other
          governmental authority or agency or as may otherwise be required
          pursuant to any applicable law, (v) which has been publicly disclosed
          other than in breach of this Agreement, or (vi) in connection with the
          exercise of any remedy hereunder.

   12.12. WAIVER OF JURY TRIAL. THE BORROWER AND THE BANK IRREVOCABLY WAIVE
          ANY AND ALL RIGHT EACH MAY HAVE TO A TRIAL BY JURY IN ANY ACTION,
          PROCEEDING OR CLAIM OF ANY NATURE RELATING TO THIS AGREEMENT, ANY
          DOCUMENTS

                                      -22-
<PAGE>

          EXECUTED IN CONNECTION WITH THIS AGREEMENT OR ANY TRANSACTION
          CONTEMPLATED IN ANY OF SUCH DOCUMENTS. THE BORROWER AND THE BANK
          ACKNOWLEDGE THAT THE FOREGOING WAIVER IS KNOWING AND VOLUNTARY.

The Borrower acknowledges that it has read and understood all the provisions of
this Agreement, including the waiver of jury trial, and has been advised by
counsel as necessary or appropriate.

         WITNESS the due execution of this Loan Agreement as a document under
seal, as of the date first written above.

WITNESS:                                     OTG SOFTWARE, INC.

By:  /s/ Andrea Cleary                       By: /s/ Ronald W. Kaiser (SEAL)
     -----------------                           ---------------------------
Print Name:  Andrea Cleary                   Print Name:  Ronald W. Kaiser
             -------------                                ----------------
Title:  Executive Assistant                  Title:  Chief Financial Officer
        -------------------                          -----------------------
                                             PNC BANK,
                                             NATIONAL ASSOCIATION

                                             By: /s/ Katharine S. Kappler
                                                 ------------------------
                                             Print Name: Katharine S. Kappler
                                                         --------------------
                                             Title:  Managing Director
                                                     -----------------

                                      -23-
<PAGE>

ADDENDUM to that certain Loan Agreement dated October 30, 2000 between OTG
SOFTWARE, INC. (the "BORROWER") and PNC BANK, NATIONAL ASSOCIATION.

                             I. FINANCIAL COVENANTS

1.   The Borrower shall maintain a ratio of Current Assets to Current
     Liabilities (measured each month at month end) of at least 2.0:1.0.

2.   The Borrower shall maintain a ratio of Total Liabilities to Tangible Net
     Worth (measured each month end at month end) of no more than 0.5:1.0.

3.   The Borrower will not permit its Tangible Net Worth to be less than
     $20,000,000 for the quarter ending September 30, 2000 and all fiscal
     quarters thereafter. The foregoing minimum Tangible Net Worth level will be
     increased by the amounts of any new equity or subordinated debt investments
     after the date of this Agreement.

DEFINITIONS:

     "CURRENT ASSETS" means the sum of cash, accounts receivable and marketable
     securities.

     "CURRENT LIABILITIES" means the sum of all current liabilities other than
     deferred revenue, plus amounts outstanding under the Revolving Credit not
     classified as current liabilities.

     "GAAP" means generally accepted accounting principles, consistently
     applied.

     "LOSSES" means net operating income less cash interest expense less than
     zero, calculated in accordance with GAAP.

     "TANGIBLE NET WORTH" means shareholders' equity less intangible assets
     (calculated in accordance with GAAP), plus all equity or subordinated
     and/or convertible debt investments created after the date of this
     Agreement.

     "TOTAL LIABILITIES" means all current and long term liabilities, including,
     but not limited to, the net present value of capital leases, guarantees and
     contingent obligations, less deferred revenues.

                                       A-1

<PAGE>

                           II. PERMITTED ENCUMBRANCES

              As disclosed in the Borrower's financial statements.

                                 III. LITIGATION

                                      NONE

SECTION 4.8 TAX RETURNS

         In 1999, the Company discovered that it owed sales and use tax in 12
states in which it had not filed sales and use tax returns. The aggregate
liability for these taxes is approximately $110,000. The Company believes that
it has established an adequate reserve for the settlement of this obligation.
The Company has now filed sales and use tax returns in 11 of the states in which
it has a reporting obligation and paid the required taxes in such states. The
Company is currently in discussions with the State of Maryland regarding sales
and use taxes for October 1996 through September 2000 and will file its tax
return and pay the required taxes upon conclusion of these discussions. The
Company has established procedures to ensure it files all of its tax returns
accurately and on a timely basis.

SECTION 4.6 TITLE TO ASSETS

LIENS AND ENCUMBRANCES

LEASE COMMITMENT

         In June 2000, the Company entered into a lease commitment for a portion
of an office building currently being constructed in Rockville, Maryland. The
payments due under the ten-year arrangement total approximately $39 million,
based on current cost estimates and excluding renewal options. The lease
provides for payments of approximately $271,000 per month during the first year
of the agreement escalating to approximately $362,000 per month in the last year
of the agreement. The Company expects to occupy the space, which will serve as
the Company's new headquarters, in 2001.

SECTION 6.1 INDEBTEDNESS

         In August 2000, the Company established a standby line of credit at PNC
Bank naming the lessor of the Company's new headquarters building as
beneficiary. The line of credit was issued in lieu of making a cash payment to
the lessor for the security deposit. The line of credit is for $2.8 million and
is collateralized by U.S. Treasury Bills. The line of credit expires on August
4, 2001.

                                       A-2
<PAGE>

                              AMENDED AND RESTATED
                              BORROWING BASE RIDER

         THIS BORROWING BASE RIDER ("RIDER") is executed this 30th day of
October, 2000, by and between OTG SOFTWARE, INC., a Delaware corporation (the
"BORROWER"), and PNC BANK, NATIONAL ASSOCIATION (the "BANK"). This Rider is
incorporated into and made part of that certain Amended and Restated Loan
Agreement of even date herewith by and between the Borrower and the Bank, which
amends and restates that certain Loan Agreement dated July 22, 1999 between the
Borrower and the Bank, as amended by Amendment No. 1 to the Loan Agreement dated
March 17, 2000 (as amended, the "LOAN AGREEMENT"), and also into such other
financing documents and security agreements as may be executed and delivered
pursuant to said Loan Agreement (all such documents including this Rider are
collectively referred to as the "LOAN DOCUMENTS"). All initially capitalized
terms not otherwise defined in this Rider shall have the same meanings ascribed
to such terms in the other Loan Documents.

         Pursuant to the Loan Documents, the Bank has extended a "LOAN" to the
Borrower which includes a Revolving Credit Facility with a sublimit for letters
of credit under which the Borrower may borrow, repay and reborrow funds at any
time prior to the Revolving Credit Expiration Date (the "FACILITY"). As a
condition to the Bank's willingness to extend the Facility to the Borrower, the
Bank and the Borrower are entering into this Rider in order to set forth their
agreement regarding the maximum amount which may be outstanding under the
Facility at any time, and for the other purposes set forth below:

         NOW, THEREFORE, in consideration of the foregoing and intending to be
legally bound, the parties hereto covenant and agree as follows:

         1. LIMITATIONS ON BORROWINGS UNDER FACILITY. Notwithstanding any
provisions to the contrary in any of the other Loan Documents, at no time shall
the aggregate principal amounts of indebtedness outstanding at any one time
under the Facility (including the aggregate face amount of all Letters of Credit
and the aggregate unreimbursed amounts for all drawings under Letters of Credit)
exceed the Borrowing Base (as defined hereinafter) at such time. If at any time
the aggregate principal amount of indebtedness outstanding under the Facility
exceeds the limitation set forth in this Section 1 for any reason, then the
Borrower shall repay the amount of such excess to the Bank in immediately
available funds within five (5) business days after such limitation has been
exceeded.

         2. BORROWING BASE CERTIFICATES. The Borrower shall deliver an updated
Borrowing Base Certificate upon the Bank's request at the times required by the
Loan Agreement.

         3. CERTAIN DEFINED TERMS. In addition to the words and terms defined
elsewhere in this Rider or in the other Loan Documents, as used in this Rider,
the following words and terms shall have the following meanings:

<PAGE>

         "ACCOUNT" shall mean an "account" or a "general intangible" as defined
in the Uniform Commercial Code as in effect in the jurisdiction whose Law
governs the perfection of the Bank's security interest therein, whether now
owned or hereafter acquired or arising.

         "ACCOUNT DEBTOR" shall mean, with respect to any Account, each Person
who is obligated to make payments to either of the Borrower on such Account.

         "AFFILIATE" of the Borrower or any Account Debtor shall mean (a) any
Person who (either alone or with a group of Persons, and either directly or
indirectly through one or more intermediaries) is in control of, is controlled
by or is under common control with the Borrower or such Account Debtor, (b) any
director, officer, partner, employee or agent of the Borrower or such Account
Debtor, and (c) any member of the immediate family of any natural person
described in the preceding clauses (a) and (b). A Person or group of Persons
shall be deemed to be in control of the Borrower or an Account Debtor when such
Person or group of Persons possesses, directly or indirectly, the power to
direct or cause the direction of the management or policies of the Borrower or
such Account Debtor, whether through the ownership of voting securities, by
contract or otherwise.

         "BORROWING BASE" shall mean, for the Revolving Credit, at any time
through the Revolving Credit Expiration Date, the lesser of (a) $10,000,000 and
(b) 80% of all Qualified Accounts.

The value at any time of the collateral described in this definition shall be
determined by reference to the most recent Borrowing Base Certificate delivered
by the Borrower to the Bank.

         "BORROWING BASE CERTIFICATE" shall mean each Borrowing Base Certificate
to be delivered by the Borrower to the Bank pursuant to Section 2 of this Rider,
in substantially the form attached as EXHIBIT A to this Rider, with blanks
appropriately completed, as amended, supplemented or otherwise modified from
time to time.

         "LAW" shall mean any law (including common law), constitution, statute,
treaty, regulation, rule, ordinance, order, injunction, writ, decree or award of
any Official Body.

         "LIEN" shall mean any mortgage, pledge, security interest, bailment,
encumbrance, claim, lien or charge of any kind, including any agreement to give
any of the foregoing, any conditional sale or other title retention agreement
and any lease in the nature thereof, and the filing of or agreement to give any
financing statement under the Uniform Commercial Code.

         "OFFICIAL BODY" shall mean any government or political subdivision or
any agency, authority, bureau, central bank, commission, department or
instrumentality of any government or political subdivision, or any court,
tribunal, grand jury or arbitrator, in each case whether foreign or domestic.

         "PERSON" shall mean an individual, sole proprietorship, corporation,
partnership (general or limited), trust, business trust, limited liability
company, unincorporated organization

                                      -2-
<PAGE>

or association, joint venture, joint-stock company, Official Body, or any other
entity of whatever nature.

         "QUALIFIED ACCOUNTS" shall mean Accounts which are and at all times
continue to meet the following conditions:

          (a)  The Account duly complies with all applicable Laws, whether
               Federal, state or local, including but not limited to usury Laws,
               the Federal Truth in Lending Act, the Federal Consumer Credit
               Protection Act, the Fair Credit Billing Act, and Regulation Z of
               the Board of Governors of the Federal Reserve Systems;

          (b)  The Account was not originated in or subject to the Laws of a
               jurisdiction whose Laws would make the account or the grant of
               the security interest in the Account to the Bank unlawful,
               invalid or unenforceable;

          (c)  The Account was originated by the Borrower in connection with the
               rendering of services or the provision of products or licenses by
               the Borrower in the ordinary course of business under an
               enforceable contract;

          (d)  The Account is evidenced by a written invoice or other
               documentation and arises from a contract, all of which are in
               form and substance satisfactory to the Bank;

          (e)  The Account does not arise out of a contract with, or order from,
               an Account Debtor that, by its terms, forbids or makes void or
               unenforceable the grant of the security interest by the Borrower
               to the Bank in and to the Account arising with respect thereto;

          (f)  The title of the Borrower to the Account and, except as to the
               Account Debtor, to any related goods is absolute and is not
               subject to any Lien except Liens in favor of the Bank;

          (g)  The Account provides for payment in United States Dollars by the
               Account Debtor;

          (h)  The Account shall have amounts owing that are not less than the
               amounts represented by the Borrower;

          (i)  The portion of the Account for which income has not yet been
               earned or which constitutes unearned discount, services charges
               or deferred interest shall be ineligible;

          (j)  The Account shall be eligible only to the extent that it is not
               subject to any defense, claim of reduction, counterclaim,
               set-off, recoupment, or any dispute or claim for credits,
               allowances or adjustments by the Account

                                      -3-
<PAGE>

               Debtor because of returned, inferior, damaged goods or
               unsatisfactory service, or for any other reason;

          (k)  No default exists under the Account by any party thereto, and all
               rights and remedies of the Borrower under the Account are freely
               assignable by the Borrower;

          (l)  The Account has not been outstanding for more than ninety (90)
               days past the invoice date and is not subject to "dating" terms;

          (m)  All Accounts of any particular Account Debtor shall be ineligible
               if more than fifty percent (50%) of the Accounts of such Account
               Debtor are outstanding for more than ninety (90) days;

          (n)  The Account shall be ineligible to the extent that the aggregate
               amount of all the Accounts of the Account Debtor and its
               Affiliates exceed fifteen percent (15) % of all of the Borrower's
               Accounts.

          (o)  The Borrower has not received any note, trade acceptance, draft,
               chattel paper or other instrument with respect to, or in payment
               of, the Account, unless, if any such instrument has been
               received, the Borrower immediately notifies the Bank and, at the
               Bank's request, endorses or assigns and delivers such instrument
               to the Bank;

          (p)  The Borrower has not received any notice of (i) the filing by or
               against the Account Debtor of any proceeding in bankruptcy,
               receivership, insolvency, reorganization, liquidation,
               conservatorship or any similar proceeding, or (ii) any assignment
               by the Account Debtor for the benefit of creditors. Upon receipt
               by the Borrower of any such notice, it will give the Bank prompt
               written notice thereof;

          (q)  The Account Debtor is not an Affiliate of the Borrower;

          (r)  Accounts for which the related Account Debtor is domiciled in any
               country other than the United States of America shall be
               ineligible to the extent that such Accounts exceed twenty-five
               percent (25%) of the Borrower's Accounts.

          (s)  The Account shall be ineligible if the Account Debtor is an
               Official Body, unless the Borrower shall have taken all actions
               deemed necessary by the Bank in order to perfect the Bank's
               security interest therein, including but not limited to any
               notices or filings required under the Assignment of Claims Act of
               1940, as amended, or other applicable Laws; and

          (t)  The Bank has not reasonably deemed such Account ineligible
               because of uncertainty about the creditworthiness of the Account
               Debtor (including,

                                      -4-
<PAGE>

               without limitation, unsatisfactory past experiences of the
               Borrower or the Bank with the Account Debtor) or because the Bank
               otherwise makes a reasonable determination that the collateral
               value of the Account to the Bank is impaired or that the Bank's
               ability to realize such value is insecure.

Standards of acceptability shall be fixed and may be revised from time to time
solely by the Bank in its exclusive judgment. In the case of any dispute about
whether an Account is or has ceased to be a Qualified Account, the decision of
the Bank shall be final.

         4. GOVERNING LAW. THIS RIDER WILL BE INTERPRETED AND THE RIGHTS AND
LIABILITIES OF THE PARTIES HERETO DETERMINED IN ACCORDANCE WITH THE LAWS OF THE
COMMONWEALTH OF PENNSYLVANIA, EXCLUDING ITS CONFLICTS OF LAW RULES.

         5. COUNTERPARTS. This Rider may be signed in any number of counterpart
copies and by the parties hereto on separate counterparts, but all such copies
shall constitute one and the same instrument.

                                      -5-
<PAGE>

         WITNESS the due execution of this Amended and Restated Borrowing Base
Rider as a document under seal, as of the date first written above.

WITNESS:                              OTG SOFTWARE, INC.

By:  /s/ Andrea Cleary                By:  /s/ Ronald W. Kaiser (SEAL)
   -------------------------             ---------------------------------
Print Name: Andrea Cleary             Print Name:  Ronald W. Kaiser
           -----------------                      ------------------------
Title:   Executive Assistant          Title:  Chief Financial Officer
       ---------------------                ------------------------------

                                      PNC BANK,
                                      NATIONAL ASSOCIATION

                                      By:      /s/ Katharine S. Kappler
                                          -------------------------------
                                      Print Name: Katharine S. Kappler
                                                  -----------------------
                                      Title:  Managing Director
                                            -----------------------------

                                      -6-

<PAGE>

AMENDED AND RESTATED
REVOLVING CREDIT NOTE

$10,000,000                                                   OCTOBER 30, 2000

                 FOR VALUE RECEIVED, OTG SOFTWARE, INC., a Delaware
corporation, (the "BORROWER"), as the borrower promise to pay to the order of
PNC BANK, NATIONAL ASSOCIATION (the "BANK"), in lawful money of the United
States of America in immediately available funds, the principal sum of the
lesser of TEN MILLION DOLLARS ($10,000,000) (the "FACILITY") or the aggregate
unpaid principal amount outstanding as of the Revolving Credit Expiration
Date, together with interest accruing on the outstanding principal balance
from the date hereof and other amounts owing under the Loan Documents, as
provided below:

                  1. LOAN AGREEMENT. This Note is issued in connection with
the Amended and Restated Loan Agreement of even date herewith by and between
the Borrower and the Bank, which amends and restates that certain Loan
Agreement dated July 22, 1999 between the Borrower and the Bank, as amended
by Amendment No. 1 to the Loan Agreement dated March 17, 2000 (as amended,
the "LOAN AGREEMENT"), and is secured by the property described in the
Security Agreement by and between the Borrower and the Bank and other loan
documents entered into in connection with the Loan Agreement (the "LOAN
DOCUMENTS") and by such other collateral as previously may have been or may
in the future be granted to the Bank to secure this Note.

                  2. RATE OF INTEREST. Amount outstanding under this Note
will bear interest at rates per annum determined in accordance with the Loan
Agreement. Interest will be calculated on the basis of a year of 360 days for
the actual number of days in each interest period.

                  3. ADVANCES. The Borrower may borrow, repay and reborrow
hereunder until the Revolving Credit Expiration Date, subject to the terms
and conditions of this Note and the Loan Documents. The "REVOLVING CREDIT
EXPIRATION DATE" shall mean the date 364 days from the date of this Note, or
such later date as may be designated by the Bank by written notice from the
Bank to the Borrower. The Borrower acknowledges and agrees that in no event
will the Bank be under any obligation to extend or renew the Facility or this
Note beyond the initial Revolving Credit Expiration Date.

                  4. PAYMENT TERMS. Accrued interest will be due and payable
as provided in the Loan Agreement. The outstanding principal balance, any
accrued but unpaid interest and all other amounts owing under the Loan
Documents shall be due and payable on the Revolving Credit Expiration Date.
If any payment under this Note shall become due on a Saturday, Sunday or
public holiday under the laws of the Commonwealth of Pennsylvania, such
payment shall be made on the next succeeding business day and such extension
of time shall be included in computing interest in connection with such
payment. The Borrower hereby authorizes the Bank to charge the Borrower's
deposit account at the Bank for any payment when due hereunder. Payments
received will be applied to charges, fees and expenses (including attorney's
fees), accrued interest and principal in any order the Bank may choose, in
its sole discretion.

<PAGE>

                  5. LATE PAYMENTS; DEFAULT RATE. If the Borrower fails to
make any payment of principal when due or any payment of interest or other
amount coming due pursuant to the provisions of this Note within five (5)
calendar days of the date due and payable, the Borrower also shall pay to the
Bank a late charge equal to the lesser of five percent (5%) of the amount of
such payment or $500. Such five (5) day period shall not be construed in any
way to extend the due date of any such payment. The late charge is imposed
for the purpose of defraying the Bank's expenses incident to the handling of
delinquent payments and is in addition to, and not in lieu of, the exercise
by the Bank of any rights and remedies hereunder, under the other Loan
Documents or under applicable law, and any fees and expenses of any agents or
attorneys which the Bank may employ. Upon maturity, whether by acceleration,
demand or otherwise, and at the option of the Bank upon the occurrence of any
Event of Default (as defined in the Loan Agreement) and during the
continuance thereof, this Note shall bear interest at a rate per annum equal
to the Default Interest Rate (as defined in the Loan Agreement). The Default
Interest Rate shall continue to apply whether or not judgment shall be
entered on this Note.

                  6. PREPAYMENT. The indebtedness evidenced by this Note may
be prepaid in whole or in part at any time without penalty, except as
provided in the Loan Agreement.

                  7. MISCELLANEOUS. No delay or omission of the Bank to
exercise any right or power arising hereunder shall impair any such right or
power or be considered to be a waiver of any such right or power, nor shall
the Bank's action or inaction impair any such right or power. The Borrower
agrees to pay on demand, to the extent permitted by law, all costs and
expenses incurred by the Bank in the enforcement of its rights in this Note
and in any security therefor, including without limitation reasonable fees
and expenses of the Bank's counsel. If any provision of this Note is found to
be invalid by a court, all the other provisions of this Note will remain in
full force and effect. The Borrower and all other makers and indorsers of
this Note hereby forever waive presentment, protest, notice of dishonor and
notice of non-payment. The Borrower also waives all defenses based on
suretyship or impairment of collateral, except for such impairment which
results from the gross negligence or willful misconduct of the Bank. This
Note shall bind the Borrower and its heirs, executors, administrators,
successors and assigns, and the benefits hereof shall inure to the benefit of
the Bank and its successors and assigns.

                  This Amended and Restated Revolving Credit Note is issued
in replacement for the Revolving Credit Note dated July 22, 1999 made by the
Borrower, under the terms of the Loan Agreement (the "ORIGINAL NOTE"). THE
INDEBTEDNESS EVIDENCED BY THE ORIGINAL NOTE IS CONTINUING INDEBTEDNESS AND
NOTHING HEREIN SHALL BE DEEMED TO CONSTITUTE A PAYMENT, SETTLEMENT OR
NOVATION OF THE ORIGINAL NOTE, OR RELEASE OR OTHERWISE ADVERSELY AFFECT ANY
RIGHTS OF THE BANK AGAINST THE BORROWER. ALL AMOUNTS OUTSTANDING UNDER THE
ORIGINAL NOTE SHALL BE TRANSFERRED TO, AND BE DEEMED TO BE OUTSTANDING UNDER
THIS AMENDED AND RESTATED REVOLVING CREDIT NOTE.

                  THIS NOTE WILL BE INTERPRETED AND THE RIGHTS AND LIABILITIES
OF THE BANK AND THE BORROWER DETERMINED IN ACCORDANCE WITH THE LAWS OF THE

                                    -2-

<PAGE>

COMMONWEALTH OF PENNSYLVANIA. The Borrower hereby irrevocably consents to the
exclusive jurisdiction of any state or federal court for the county or
judicial district where the Bank's office is located, and consents that all
service of process be sent by nationally recognized overnight courier service
directed to the Borrower at the Borrower's address set forth in the Loan
Agreement and service so made will be deemed to be completed when received by
the Borrower; provided that nothing contained in this Note will prevent the
Bank from bringing any action, enforcing any award or judgment or exercising
any rights against the Borrower individually, against any security or against
any property of the Borrower within any other county, state or other foreign
or domestic jurisdiction. The Borrower acknowledges and agrees that the venue
provided above is the most convenient forum for both the Bank and the
Borrower. The Borrower waives any objection to venue and any objection based
on a more convenient forum in any action instituted under this Note.

                  8. WAIVER OF JURY TRIAL. EACH OF THE BORROWER AND THE BANK
IRREVOCABLY WAIVES ANY AND ALL RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR CLAIM OF ANY NATURE RELATING TO THIS NOTE, ANY
DOCUMENTS EXECUTED IN CONNECTION WITH THIS NOTE OR ANY TRANSACTION
CONTEMPLATED IN ANY OF SUCH DOCUMENTS. EACH OF THE BORROWER AND THE BANK
ACKNOWLEDGES THAT THE FOREGOING WAIVER IS KNOWING AND VOLUNTARY.

                  The Borrower acknowledges that it has read and understood
all of the provisions of this Note, including waiver of jury trial, and has
been advised by counsel as necessary or appropriate.

                           [Signature Page to Follow]

                                       -3-

<PAGE>

                  WITNESS the due execution of this Amended and Restated
Revolving Credit Note as a document under seal, as of the date first written
above, with the intent to be legally bound hereby.

WITNESS:                                       OTG SOFTWARE, INC.

By:  /s/ Andrea Cleary                         By:  /s/ Ronald W. Kaiser (SEAL)
   ------------------------                        ----------------------------

Print Name: Andrea Cleary                      Print Name:  Ronald W. Kaiser
           ----------------                               ---------------------

Title:   Executive Assistant                   Title:  Chief Financial Officer
         -------------------                           ------------------------

                                       -4-

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