<PAGE>

                                 EXHIBIT 10(p)

                                LOAN AGREEMENT

Borrower:  Pinnacle Data Systems, Inc.     Lender:  KeyBank National Association
           6600 Port road                           127 Public Square
           Groveport, OH 43125                      Cleveland, OH 44114

                               *01010039175300000100 1OC40*

THIS LOAN AGREEMENT between Pinnacle Data Systems, Inc. ("Borrower") and KeyBank
National Association ("Lender") is made and executed on the following terms and
conditions. Borrower has received prior commercial loans from Lender or has
applied to Lender for a commercial loan or loans and other financial
accommodations, including those which may be described on any exhibit or
schedule attached to this Agreement. All such loans and financial
accommodations, together with all future loans and financial accommodations from
Lender to Borrower, are referred to in this Agreement individually as the "Loan"
and collectively as the "Loans." Borrower understands and agrees that: (a) in
granting, renewing, or extending any Loan, Lender is relying upon Borrower's
representations, warranties, and agreements, as set forth in this Agreement; (b)
the granting, renewing, or extending of any Loan by Lender at all times shall be
subject to Lender's sole judgment and discretion; and (c) all such Loans shall
be and shall remain subject to the following terms and conditions of this
Agreement.

TERM. This Agreement shall be effective as of August 10, 2000, and shall
continue thereafter until all Indebtedness of Borrower to Lender has been
performed in full and the parties terminate this Agreement in writing.

DEFINITIONS. The following words shall have the following meanings when used in
this Agreement. Terms not otherwise defined in this Agreement shall have the
meanings attributed to such terms in the Uniform Commercial Code. All references
to dollar amounts shall mean amounts in lawful money of the United States of
America.

  Agreement. The word "Agreement" means this Loan Agreement, as this Loan
  Agreement may be amended or modified from time to time, together with all
  exhibits and schedules attached to this Loan Agreement from time to time.

  Account. The word "Account" means a trade account, account receivable, or
  other right to payment for goods sold or services rendered owing to Borrower
  (or to a third party grantor acceptable to Lender).

  Account Debtor. The words "Account Debtor" mean the person or entity obligated
  upon an Account.

  Advance. The word "Advance" means a disbursement of Loan funds under this
  Agreement.

  Borrower. The word "Borrower" means Pinnacle Data Systems, Inc.. The word
  "Borrower" also includes, as applicable, all subsidiaries and affiliates of
  Borrower as provided below in the paragraph titled "Subsidiaries and
  Affiliates."

  Borrowing Base. The words "Borrowing Base" mean, as determined by Lender from
  time to time, the lesser of (a) $7,000,000.00; or (b) the sum of (i) 80.000%
  of the aggregate amount of Eligible Accounts, plus (ii) 50.000% of the
  aggregate amount of Eligible Inventory (not to exceed in corresponding Loan
  amount based on Eligible Inventory $2,400,000).

  CERCLA. The word "CERCLA" means the Comprehensive Environmental Response,
  Compensation, and Liability Act of 1980, as amended.

  Collateral. The word "Collateral" means and includes without limitation all
  property and assets granted as collateral security for a Loan, whether real or
  personal property, whether granted directly or indirectly, whether granted now
  or in the future, and whether granted in the form of a security interest,
  mortgage, deed of trust, assignment, pledge, chattel mortgage, chattel trust,
  factor's lien, equipment trust, conditional sale, trust receipt, lien, charge,
  lien or title retention contract, lease or consignment intended as a security
  device, or any other security or lien interest whatsoever, whether created by
  law, contract, or otherwise. The word "Collateral" includes without limitation
  all collateral described below in the section titled "COLLATERAL."

  Eligible Accounts. The words "Eligible Accounts" mean, at any time, all of
  Borrower's Accounts which contain selling terms and conditions acceptable to
  Lender. The net amount of any Eligible Account against which Borrower may
  borrow shall exclude all returns, discounts, credits, and offsets of any
  nature. Unless otherwise agreed to by Lender in writing, Eligible Accounts do
  not include:

     (a) Accounts with respect to which the Account Debtor is an officer, an
     employee or agent of Borrower.

     (b) Accounts with respect to which the Account Debtor is a subsidiary of,
     or affiliated with or related to Borrower or its shareholders, officers, or
     directors.

     (c) Accounts with respect to which goods are placed on consignment,
     guaranteed sale, or other terms by reason of which the payment by the
     Account Debtor may be conditional.

     (d) Accounts with respect to which the Account Debtor is not a resident of
     the United States, except to the extent such Accounts are supported by
     insurance, bonds or other assurances satisfactory to Lender.

     (e) Accounts with respect to which Borrower is or may become liable to the
     Account Debtor for goods sold or services rendered by the Account Debtor to
     Borrower.

     (f) Accounts which are subject to dispute, counterclaim, or setoff.

     (g) Accounts with respect to which the goods have not been shipped or
     delivered, or the services have not been rendered, to the Account Debtor.

     (h) Accounts with respect to which Lender, in its sole discretion, deems
     the creditworthiness or financial condition of the Account Debtor to be
     unsatisfactory.

     (i) Accounts of any Account Debtor who has filed or has had filed against
     it a petition in bankruptcy or an application for relief under any
     provision of any state or federal bankruptcy, insolvency, or debtor-4n-
     relief acts; or who has had appointed a trustee, custodian, or receiver for
     the assets of such Account Debtor; or who has made an assignment for the
     benefit of creditors or has become insolvent or fails generally to pay its
     debts (including its payrolls) as such debts become due.
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08-10-2000                      LOAN AGREEMENT                          Page 2
                                  (Continued)

     0) Accounts with respect to which the Account Debtor is the United States
     government or any department or agency of the United States.
  Eligible Inventory. The words "Eligible Inventory" mean, at any time, all of
  Borrower's Inventory as defined below except:
     (a) Inventory which is not owned by Borrower free and clear of all security
     interests, liens, encumbrances, and claims of third parties.
     (b) Inventory which Lender, in its sole discretion, deems to be obsolete,
     unsalable, damaged, defective, or unfit for further processing.
  ERISA. The word "ERISA" means the Employee Retirement Income Security Act of
  1974, as amended.
  Event of Default. The words "Event of Default" mean and include without
  limitation any of the Events of Default set forth below in the section titled
  "EVENTS OF DEFAULT."
  Expiration Date. The words "Expiration Date" mean the date of termination of
  Lender's commitment to lend under this Agreement.
  Grantor. The word "Grantor" means and includes without limitation each and all
  of the persons or entities granting a Security Interest in any Collateral for
  the Indebtedness, including without limitation all Borrowers granting such a
  Security Interest.
  Guarantor. The word "Guarantor" means and includes without limitation each and
  all of the guarantors, sureties, and accommodation parties in connection with
  any Indebtedness.
  Indebtedness. The word "Indebtedness" means and includes without limitation
  all Loans, together with all other obligations, debts and liabilities of
  Borrower to Lender, or any one or more of them, as well as all claims by
  Lender against Borrower, or any one or more of them; whether now or hereafter
  existing, voluntary or involuntary, due or not due, absolute or contingent,
  liquidated or unliquidated; whether Borrower may be liable individually or
  jointly with others; whether Borrower may be obligated as a guarantor, surety,
  or otherwise; whether recovery upon such Indebtedness may be or hereafter may
  become barred by any statute of limitations; and whether such Indebtedness may
  be or hereafter may become otherwise unenforceable.
  Inventory. The word "Inventory" means all of Borrower's raw materials, work in
  process, finished goods, merchandise, parts and supplies, of every kind and
  description, and goods held for sale or lease or furnished under contracts of
  service in which Borrower now has or hereafter acquires any right, whether
  held by Borrower or others, and all documents of title, warehouse receipts,
  bills of lading, and all other documents of every type covering all or any
  part of the foregoing. Inventory includes inventory temporarily out of
  Borrower's custody or possession and all returns on Accounts.
  Lender. The word "Lender" means KeyBank National Association, its successors
  and assigns.
  Line of Credit. The words "Line of Credit" mean the credit facility described
  in the Section titled "LINE OF CREDIT"below.
  Loan. The word "Loan" or "Loans" means and includes without limitation any and
  all commercial loans and financial accommodations from Lender to Borrower,
  whether now or hereafter existing, and however evidenced, including without
  limitation those loans and financial accommodations described herein or
  described on any exhibit or schedule attached to this Agreement from time to
  time.
  Note. The word "Note" means and includes without limitation Borrower's
  promissory note or notes, if any, evidencing Borrower's Loan obligations in
  favor of Lender, as well as any substitute, replacement or refinancing note or
  notes therefor.
  Permitted Liens. The words "Permitted Liens" mean: (a) liens and security
  interests securing Indebtedness owed by Borrower to Lender; (b) liens for
  taxes, assessments, or similar charges either not yet due or being contested
  in good faith; (c) liens of materialmen, mechanics, warehousemen, or carriers,
  or other like liens arising in the ordinary course of business and securing
  obligations which are not yet delinquent; (d) purchase money liens or purchase
  money security interests upon or in any property acquired or held by Borrower
  in the ordinary course of business to secure indebtedness outstanding on the
  date of this Agreement or permitted to be incurred under the paragraph of this
  Agreement titled "Indebtedness and Liens"; (e) liens and security interests
  which, as of the date of this Agreement, have been disclosed to and approved
  by the Lender in writing; and (f) those liens and security interests which in
  the aggregate constitute an immaterial and insignificant monetary amount with
  respect to the net value of Borrower's assets.

  Related Documents. The words "Related Documents" mean and include without
  limitation all promissory notes, credit agreements, loan agreements,
  environmental agreements, guaranties, security agreements, mortgages, deeds of
  trust, and all other instruments, agreements and documents, whether now or
  hereafter existing, executed in connection with the Indebtedness.

  Security Agreement. The words "Security Agreement" mean and include without
  limitation any agreements, promises, covenants, arrangements, understandings
  or other agreements, whether created by law, contract, or otherwise,
  evidencing, governing, representing, or creating a Security Interest.
  Security Interest. The words "Security Interest" mean and include without
  limitation any type of collateral security, whether in the form of a lien,
  charge, mortgage, deed of trust, assignment, pledge, chattel mortgage, chattel
  trust, factor's lien, equipment trust, conditional sale, trust receipt, lien
  or title retention contract, lease or consignment intended as a security
  device, or any other security or lien interest whatsoever, whether created by
  law, contract, or otherwise.
  SARA. The word "SARA" means the Superfund Amendments and Reauthorization Act
  of 1986 as now or hereafter amended.
LINE OF CREDIT. Lender agrees to make Advances to Borrower from time to time
from the date of this Agreement to the Expiration Date, provided the aggregate
amount of such Advances outstanding at any time does not exceed the Borrowing
Base. Within the foregoing limits, Borrower may borrow, partially or wholly
prepay, and reborrow under this Agreement as follows.
  Conditions Precedent to Each Advance. Lender's obligation to make any Advance
  to or for the account of Borrower under this Agreement is subject to the
  following conditions precedent, with all documents, instruments, opinions,
  reports, and other items required under this Agreement to be in form and
  substance satisfactory to Lender:
     (a) Lender shall have received evidence that this Agreement and all Related
     Documents have been duly authorized, executed, and delivered by Borrower to
     Lender.
     (b) Lender shall have received such opinions of counsel, supplemental
     opinions, and documents as Lender may request.
     (c) The security interests in the Collateral shall have been duly
     authorized, created, and perfected with first lien priority and shall be in
     full force and effect.
     (d) All guaranties required by Lender for the Line of Credit shall have
     been executed by each Guarantor, delivered to Lender, and be in full force
     and effect.
     (e) Lender, at its option and for its sole benefit, shall have conducted an
     audit of Borrower's Accounts, Inventory, books, records, and operations,
     and Lender shall be satisfied as to their condition.
     (f) Borrower shall have paid to Lender all fees, costs, and expenses
     specified in this Agreement and the Related Documents as are then due
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08-10-2000                      LOAN AGREEMENT                           Page 3
                                      (Continued)

     and payable.

     (g) There shall not exist at the time of any Advance a condition which
     would constitute an Event of Default under this Agreement, and Borrower
     shall have delivered to Lender the compliance certificate called for in the
     paragraph below titled "Compliance Certificate."
  Making Loan Advances. Advances under the Line of Credit may be requested
  orally by authorized persons. Lender may, but need not, require that all oral
  requests be confirmed in writing. Each Advance shall be conclusively deemed to
  have been made at the request of and for the benefit of Borrower (a) when
  credited to any deposit account of Borrower maintained with Lender or (b) when
  advanced in accordance with the instructions of an authorized person. Lender,
  at its option, may set a cutoff time, after which all requests for Advances
  will be treated as having been requested on the next succeeding Business Day.

  Mandatory Loan Repayments. If at any time the aggregate principal amount of
  the outstanding Advances shall exceed the applicable Borrowing Base, Borrower,
  immediately upon written or oral notice from Lender, shall pay to Lender an
  amount equal to the difference between the outstanding principal balance of
  the Advances and the Borrowing Base. On the Expiration Date, Borrower shall
  pay to Lender in full the aggregate unpaid principal amount of all Advances
  then outstanding and all accrued unpaid interest, together with all other
  applicable fees, costs and charges, if any, not yet paid.
  Loan Account. Lender shall maintain on its books a record of account in which
  Lender shall make entries for each Advance and such other debits and credits
  as shall be appropriate in connection with the credit facility. Lender shall
  provide Borrower with periodic statements of Borrower's account, which
  statements shall be considered to be correct and conclusively binding on
  Borrower unless Borrower notifies Lender to the contrary within thirty (30)
  days after Borrower's receipt of any such statement which Borrower deems to be
  incorrect.

COLLATERAL. To secure payment of the Line of Credit and performance of all other
Loans, obligations and duties owed by Borrower to Lender, Borrower (and others,
if required) shall grant to Lender Security Interests in such property and
assets as Lender may require (the "Collateral"), including without limitation
Borrower's present and future Accounts, general intangibles, and Inventory.
Lender's Security Interests in the Collateral shall be continuing liens and
shall include the proceeds and products of the Collateral, including without
limitation the proceeds of any insurance. With respect to the Collateral,
Borrower agrees and represents and warrants to Lender:

  Perfection of Security Interests. Borrower agrees to execute such financing
  statements and to take whatever other actions are requested by Lender to
  perfect and continue Lender's Security Interests in the Collateral. Upon
  request of Lender, Borrower will deliver to Lender any and all of the
  documents evidencing or constituting the Collateral, and Borrower will note
  Lender's interest upon any and all chattel paper if not delivered to Lender
  for possession by Lender. Contemporaneous with the execution of this
  Agreement, Borrower will execute one or more UCC financing statements and any
  similar statements as may be required by applicable law, and will file such
  financing statements and all such similar statements in the appropriate
  location or locations. Borrower hereby appoints Lender as its irrevocable
  aftorney-in-fact for the purpose of executing any documents necessary to
  perfect or to continue any Security Interest. Lender may at any time, and
  without further authorization from Borrower, file a carbon, photograph,
  facsimile, or other reproduction of any financing statement for use as a
  financing statement. Borrower will reimburse Lender for all expenses for the
  perfection, termination, and the continuation of the perfection of Lender's
  security interest in the Collateral. Borrower promptly will notify Lender of
  any change in Borrower's name including any change to the assumed business
  names of Borrower. Borrower also promptly will notify Lender of any change in
  Borrower's Social Security Number or Employer Identification Number. Borrower
  further agrees to notify Lender in writing prior to any change in address or
  location of Borrower's principal governance office or should Borrower merge or
  consolidate with any other entity.

  Collateral Records. Borrower does now, and at all times hereafter shall, keep
  correct and accurate records of the Collateral, all of which records shall be
  available to Lender or Lender's representative upon demand for inspection and
  copying at any reasonable time. With respect to the Accounts, Borrower agrees
  to keep and maintain such records as Lender may require, including without
  limitation information concerning Eligible Accounts and Account balances and
  agings. With respect to the Inventory, Borrower agrees to keep and maintain
  such records as Lender may require, including without limitation information
  concerning Eligible Inventory and records itemizing and describing the kind,
  type, quality, and quantity of Inventory, Borrower's Inventory costs and
  selling prices, and the daily withdrawals and additions to Inventory.
  Collateral Schedules. Concurrently with the execution and delivery of this
  Agreement, Borrower shall execute and deliver to Lender schedules of Accounts
  and Inventory and Eligible Accounts and Eligible Inventory, in form and
  substance satisfactory to the Lender. Thereafter and at such frequency as
  Lender shall require, Borrower shall execute and deliver to Lender such
  supplemental schedules of Eligible Accounts and Eligible Inventory and such
  other matters and information relating to the Accounts and Inventory as Lender
  may request.
  Representations and Warranties Concerning Accounts. With respect to the
  Accounts, Borrower represents and warrants to Lender: (a) Each Account
  represented by Borrower to be an Eligible Account for purposes of this
  Agreement conforms to the requirements of the definition of an Eligible
  Account; (b) All Account information listed on schedules delivered to Lender
  will be true and correct, subject to immaterial variance; and (c) Lender, its
  assigns, or agents shall have the right at any time and at Borrower's expense
  to inspect, examine, and audit Borrower's records and to confirm with Account
  Debtors the accuracy of such Accounts.

  Representations and Warranties Concerning Inventory. With respect to the
  Inventory, Borrower represents and warrants to Lender: (a) All Inventory
  represented by Borrower to be Eligible Inventory for purposes of this
  Agreement conforms to the requirements of the definition of Eligible
  Inventory; (b) All Inventory values listed on schedules delivered to Lender
  will be true and correct, subject to immaterial variance; (c) The value of the
  Inventory will be determined on a consistent accounting basis; (d) Except as
  agreed to the contrary by Lender in writing, all Eligible Inventory is now and
  at all times hereafter will be in Borrower's physical possession and shall not
  be held by others on consignment, sale on approval, or sale or return; (e)
  Except as reflected in the Inventory schedules delivered to Lender, all
  Eligible Inventory is now and at all times hereafter will be of good and
  merchantable quality, free from defects; (f) Eligible Inventory is not now and
  will not at any time hereafter be stored with a bailee, warehouseman, or
  similar party without Lender's prior written consent, and, in such event,
  Borrower will concurrently at the time of bailment cause any such bailee,
  warehouseman, or similar party to issue and deliver to Lender, in form
  acceptable to Lender, warehouse receipts in Lender's name evidencing the
  storage of Inventory; and (g) Lender, its assigns, or agents shall have the
  right at any time and at Borrower's expense to inspect and examine the
  Inventory and to check and test the same as to quality, quantity, value, and
  condition.

REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants to Lender, as
of the date of this Agreement, as of the date of each disbursement of Loan
proceeds, as of the date of any renewal, extension or modification of any Loan,
and at all times any Indebtedness exists:
  Organization. Borrower is a corporation which is duly organized, validly
  existing, and in good standing under the laws of the state of Borrower's
  incorporation and is validly existing and in good standing in all states in
  which Borrower is doing business. Borrower has the full power and authority to
  own its properties and to transact the businesses in which it is presently
  engaged or presently proposes to engage. Borrower also is duly qualified as a
  foreign corporation and is in good standing in all states in which the failure
  to so quality would have a material adverse effect on its businesses or
  financial condition.
<PAGE>

  Authorization. The execution, delivery, and performance of this Agreement and
  all Related Documents by Borrower, to the extent to be executed, delivered or
  performed by Borrower, have been duly authorized by all necessary action by
  Borrower; do not require the consent or approval of any other person,
  regulatory authority or governmental body; and do not conflict with, result in
  a violation of, or constitute a default under (a) any provision of its
  articles of incorporation or organization, or bylaws or code of regulations,
  or any agreement or other instrument binding upon
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08-10-2000                      LOAN AGREEMENT                           Page 4
                                  (Continued)

  Borrower or (b) any law, governmental regulation, court decree, or order
  applicable to Borrower.
  Financial Information. Each financial statement of Borrower supplied to Lender
  truly and completely disclosed Borrower's financial condition as of the date
  of the statement, and there has been no material adverse change in Borrower's
  financial condition subsequent to the date of the most recent financial
  statement supplied to Lender. Borrower has no material contingent obligations
  except as disclosed in such financial statements.
  Legal Effect. This Agreement constitutes, and any instrument or agreement
  required hereunder to be given by Borrower when delivered will constitute,
  legal, valid and binding obligations of Borrower enforceable against Borrower
  in accordance with their respective terms.
  Properties. Except for Permitted Liens, Borrower owns and has good title to
  all of Borrower's properties free and clear of all Security Interests, and has
  not executed any security documents or financing statements relating to such
  properties. All of Borrower's properties are titled in Borrower's legal name,
  and Borrower has not used, or filed a financing statement under, any other
  name for at least the last five (5) years.
  Hazardous Substances. The terms "hazardous waste," "hazardous substance,"
  "disposal," "release," and "threatened release," as used in this Agreement,
  shall have the same meanings as set forth in the "CERCLA," "SARA," the
  Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq., the
  Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., or
  other applicable state or Federal laws, rules, or regulations adopted pursuant
  to any of the foregoing. Except as disclosed to and acknowledged by Lender in
  writing, Borrower represents and warrants that: (a) During the period of
  Borrower's ownership of the properties, there has been no use, generation,
  manufacture, storage, treatment, disposal, release or threatened release of
  any hazardous waste or substance by any person on, under, about or from any of
  the properties. (b) Borrower has no knowledge of, or reason to believe that
  there has been (i) any use, generation, manufacture, storage, treatment,
  disposal, release, or threatened release of any hazardous waste or substance
  on, under, about or from the properties by any prior owners or occupants of
  any of the properties, or (ii) any actual or threatened litigation or claims
  of any kind by any person relating to such matters. (c) Neither Borrower nor
  any tenant, contractor, agent or other authorized user of any of the
  properties shall use, generate, manufacture, store, treat, dispose of, or
  release any hazardous waste or substance on, under, about or from any of the
  properties; and any such activity shall be conducted in compliance with all
  applicable federal, state, and local laws, regulations, and ordinances,
  including without limitation those laws, regulations and ordinances described
  above. Borrower authorizes Lender and its agents to enter upon the properties
  to make such inspections and tests as Lender may deem appropriate to determine
  compliance of the properties with this section of the Agreement. Any
  inspections or tests made by Lender shall be at Borrower's expense and for
  Lender's purposes only and shall not be construed to create any responsibility
  or liability on the part of Lender to Borrower or to any other person. The
  representations and warranties contained herein are based on Borrower's due
  diligence in investigating the properties for hazardous waste and hazardous
  substances. Borrower hereby (a) releases and waives any future claims against
  Lender for indemnity or contribution in the event Borrower becomes liable for
  cleanup or other costs under any such laws, and (b) agrees to indemnify and
  hold harmless Lender against any and all claims, losses, liabilities, damages,
  penalties, and expenses which Lender may directly or indirectly sustain or
  suffer resulting from a breach of this section of the Agreement or as a
  consequence of any use, generation, manufacture, storage, disposal, release or
  threatened release of a hazardous waste or substance on the properties. The
  provisions of this section of the Agreement, including the obligation to
  indemnity, shall survive the payment of the Indebtedness and the termination
  or expiration of this Agreement and shall not be affected by Lender's
  acquisition of any interest in any of the properties, whether by foreclosure
  or otherwise.
  Litigation and Claims. No litigation, claim, investigation, administrative
  proceeding or similar action (including those for unpaid taxes) against
  Borrower is pending or threatened, and no other event has occurred which may
  materially adversely affect Borrower's financial condition or properties,
  other than litigation, claims, or other events, if any, that have been
  disclosed to and acknowledged by Lender in writing.
  Taxes. To the best of Borrower's knowledge, all tax returns and reports of
  Borrower that are or were required to be filed, have been filed, and all
  taxes, assessments and other governmental charges have been paid in full,
  except those presently being or to be contested by Borrower in good faith in
  the ordinary course of business and for which adequate reserves have been
  provided.
  Lien Priority. Unless otherwise previously disclosed to Lender in writing,
  Borrower has not entered into or granted any Security Agreements, or permitted
  the filing or attachment of any Security Interests on or affecting any of the
  Collateral directly or indirectly securing repayment of Borrower's Loan and
  Note, that would be prior or that may in any way be superior to Lender's
  Security Interests and rights in and to such Collateral.
  Binding Effect. This Agreement, the Note, all Security Agreements directly or
  indirectly securing repayment of Borrower's Loan and Note and all of the
  Related Documents are binding upon Borrower as well as upon Borrower's
  successors, representatives and assigns, and are legally enforceable in
  accordance with their respective terms.
  Commercial Purposes. Borrower intends to use the Loan proceeds solely for
  business or commercial related purposes.
  Employee Benefit Plans. Each employee benefit plan as to which Borrower may
  have any liability complies in all material respects with all applicable
  requirements of law and regulations, and (i) no Reportable Event nor
  Prohibited Transaction (as defined in ERISA) has occurred with respect to any
  such plan, (ii) Borrower has not withdrawn from any such plan or initiated
  steps to do so, (iii) no steps have been taken to terminate any such plan, and
  (iv) there are no unfunded liabilities other than those previously disclosed
  to Lender in writing.
  Location of Borrower's Offices and Records. Borrower's place of business, or
  Borrower's Chief executive office, if Borrower has more than one place of
  business, is located at 6600 Port road, Groveport, OH 43125. Unless Borrower
  has designated otherwise in writing this location is also the office or
  offices where Borrower keeps its records concerning the Collateral.
  Year 2000. Borrower warrants and represents that all software utilized in the
  conduct of Borrower's business will have appropriate capabilities and
  compatibility for operation to handle calendar dates failing on or after
  January 1, 2000, and all information pertaining to such calendar dates, in the
  same manner and with the same functionality as the software does respecting
  calendar dates failing on or before December 31, 1999. Further, Borrower
  warrants and represents that the data-related user interface functions, data-
  fields, and data-related program instructions and functions of the software
  include the indication of the century.
  Information. All information heretofore or contemporaneously herewith
  furnished by Borrower to Lender for the purposes of or in connection with this
  Agreement or any transaction contemplated hereby is, and all information
  hereafter furnished by or on behalf of Borrower to Lender will be, true and
  accurate in every material respect on the date as of which such information is
  dated or certified; and none of such information is or will be incomplete by
  omitting to state any material fact necessary to make such information not
  misleading.
  Survival of Representations and Warranties. Borrower understands and agrees
  that Lender, without independent investigation, is relying upon the above
  representations and warranties in extending Loan Advances to Borrower.
  Borrower further agrees that the foregoing representations and warranties
  shall be continuing in nature and shall remain in full force and effect until
  such time as Borrower's Indebtedness shall be paid in full, or until this
  Agreement shall be terminated in the manner provided above, whichever is the
  last to occur.
AFFIRMATIVE COVENANTS. Borrower covenants and agrees with Lender that, while
this Agreement is in effect, Borrower will:
<PAGE>

  Litigation. Promptly inform Lender in writing of (a) all material adverse
  changes in Borrower's financial condition, and (b) all existing and all
  threatened litigation, claims, investigations, administrative proceedings or
  similar actions affecting Borrower or any Guarantor which could materially
  affect the financial condition of Borrower or the financial condition of any
  Guarantor.
<PAGE>

08-10-2000                      LOAN AGREEMENT                          Page 5
                                  (Continued)

  Financial Records. Maintain its books and records in accordance with generally
  accepted accounting principles, applied on a consistent basis, and permit
  Lender to examine and audit Borrower's books and records at all reasonable
  times.
  Financial Statements. Furnish Lender with, as soon as available, but in no
  event later than one hundred twenty (120) days after the end of each fiscal
  year, Borrower's balance sheet and income statement for the year ended,
  audited by a certified public accountant satisfactory to Lender, and, as soon
  as available, but in no event later than sixty (60) days after the end of each
  fiscal quarter, Borrower's balance sheet and profit and loss statement for the
  period ended, prepared and certified as correct to the best knowledge and
  belief by Borrower's chief financial officer or other officer or person
  acceptable to Lender. All financial reports required to be provided under this
  Agreement shall be prepared in accordance with generally accepted accounting
  principles, applied on a consistent basis, and certified by Borrower as being
  true and correct.
  Additional Information. Furnish such additional information and statements,
  lists of assets and liabilities, agings of receivables and payables, inventory
  schedules, budgets, forecasts, tax returns, and other reports with respect to
  Borrower's financial condition and business operations as Lender may request
  from time to time.
  Insurance. Maintain fire and other risk insurance, public liability insurance,
  and such other insurance as Lender may require with respect to Borrower's
  properties and operations, in form, amounts, coverages and with insurance
  companies reasonably acceptable to Lender. Borrower, upon request of Lender,
  will deliver to Lender from time to time the policies or certificates of
  insurance in form satisfactory to Lender, including stipulations that
  coverages will not be cancelled or diminished without at least ten (10) days'
  prior written notice to Lender. Each insurance policy also shall include an
  endorsement providing that coverage in favor of Lender will not be impaired in
  any way by any act, omission or default of Borrower or any other person. In
  connection with all policies covering assets in which Lender holds or is
  offered a security interest for the Loans, Borrower will provide Lender with
  such loss payable or other endorsements as Lender may require.
  Insurance Reports. Furnish to Lender, upon request of Lender, reports on each
  existing insurance policy showing such information as Lender may reasonably
  request, including without limitation the following: (a) the name of the
  insurer; (b) the risks insured; (c) the amount of the policy; (d) the
  properties insured; (e) the then current property values on the basis of which
  insurance has been obtained, and the manner of determining those values; and
  (f) the expiration date of the policy. In addition, upon request of Lender
  (however not more often than annually), Borrower will have an independent
  appraiser satisfactory to Lender determine, as applicable, the actual cash
  value or replacement cost of any Collateral. The cost of such appraisal shall
  be paid by Borrower.
  Other Agreements. Comply with all terms and conditions of all other
  agreements, whether now or hereafter existing, between Borrower and any other
  party and notify Lender immediately in writing of any default in connection
  with any other such agreements.
  Loan Proceeds. Use all Loan proceeds solely for Borrower's business
  operations, unless specifically consented to the contrary by Lender in
  writing.
  Taxes, Charges and Liens. Pay and discharge when due all of its indebtedness
  and obligations, including without limitation all assessments, taxes,
  governmental charges, levies and liens, of every kind and nature, imposed upon
  Borrower or its properties, income, or profits, prior to the date on which
  penalties would attach, and all lawful claims that, if unpaid, might become a
  lien or charge upon any of Borrower's properties, income, or profits. Provided
  however, Borrower will not be required to pay and discharge any such
  assessment, tax, charge, levy, lien or claim so long as (a) the legality of
  the same shall be contested in good faith by appropriate proceedings, and (b)
  Borrower shall have established on its books adequate reserves with respect to
  such contested assessment, tax, charge, levy, lien, or claim in accordance
  with generally accepted accounting practices. Borrower, upon demand of Lender,
  will furnish to Lender evidence of payment of the assessments, taxes, charges,
  levies, liens and claims and will authorize the appropriate governmental
  official to deliver to Lender at any time a written statement of any
  assessments, taxes, charges, levies, liens and claims against Borrower's
  properties, income, or profits.
  Performance. Perform and comply with all terms, conditions, and provisions set
  forth in this Agreement and in the Related Documents in a timely manner, and
  promptly notify Lender if Borrower learns of the occurrence of any event which
  constitutes an Event of Default under this Agreement or under any of the
  Related Documents.
  Operations. Maintain executive and management personnel with substantially the
  same qualifications and experience as the present executive and management
  personnel; provide written notice to Lender of any change in executive and
  management personnel; conduct its business affairs in a reasonable and prudent
  manner and in compliance with all applicable federal, state and municipal
  laws, ordinances, rules and regulations respecting its properties, charters,
  businesses and operations, including without limitation, compliance with the
  Americans With Disabilities Act and with all minimum funding standards and
  other requirements of ERISA and other laws applicable to Borrower's employee
  benefit plans.
  Inspection. Permit employees or agents of Lender at any reasonable time to
  inspect any and all Collateral for the Loan or Loans and Borrower's other
  properties and to examine or audit Borrower's books, accounts, and records and
  to make copies and memoranda of Borrower's books, accounts, and records. If
  Borrower now or at any time hereafter maintains any records (including without
  limitation computer generated records and computer software programs for the
  generation of such records) in the possession of a third party, Borrower, upon
  request of Lender, shall notify such party to permit Lender free access to
  such records at all reasonable times and to provide Lender with copies of any
  records it may request, all at Borrower's expense.
  Compliance Certificate. Unless waived in writing by Lender, provide Lender at
  least annually and at the time of each disbursement of Loan proceeds with a
  certificate executed by Borrower's chief financial officer, or other officer
  or person acceptable to Lender, certifying that the representations and
  warranties set forth in this Agreement are true and correct as of the date of
  the certificate and further certifying that, as of the date of the
  certificate, no Event of Default exists under this Agreement.
  Environmental Compliance and Reports. Borrower shall comply in all respects
  with all environmental protection federal, state and local laws, statutes,
  regulations and ordinances; not cause or permit to exist, as a result of an
  intentional or unintentional action or omission on its part or on the part of
  any third party, on property owned and/or occupied by Borrower, any
  environmental activity where damage may result to the environment, unless such
  environmental activity is pursuant to and in compliance with the conditions of
  a permit issued by the appropriate federal, state or local governmental
  authorities; shall furnish to Lender promptly and in any event within thirty
  (30) days after receipt thereof a copy of any notice, summons, lien, citation,
  directive, letter or other communication from any governmental agency or
  instrumentality concerning any intentional or unintentional action or omission
  on Borrower's part in connection with any environmental activity whether or
  not there is damage to the environment and/or other natural resources.
  Additional Assurances. Make, execute and deliver to Lender such promissory
  notes, mortgages, deeds of trust, security agreements, financing statements,
  instruments, documents and other agreements as Lender or its attorneys may
  reasonably request to evidence and secure the Loans and to perfect all
  Security Interests.
RECOVERY OF ADDITIONAL COSTS. If the imposition of or any change in any law,
rule, regulation or guideline, or the interpretation or application of any
thereof by any court or administrative or governmental authority (including any
request or policy not having the force of law) shall impose, modify or make
applicable any taxes (except U.S. federal, state or local income or franchise
taxes imposed on Lender), reserve requirements, capital
<PAGE>

adequacy requirements or other obligations which would (a) increase the cost to
Lender for extending or maintaining the credit facilities to which this
Agreement relates, (b) reduce the amounts payable to Lender under this Agreement
or the Related Documents, or (c) reduce the rate of return on Lender's capital
as a consequence of Lender's obligations with respect to the credit facilities
to which this Agreement relates, then Borrower agrees to pay Lender such
<PAGE>

08-10-2000                      LOAN AGREEMENT                           Page 6
                                 (Continued)

additional amounts as will compensate Lender therefor, within five (5) days
after Lender's written demand for such payment, which demand shall be
accompanied by an explanation of such imposition or charge and a calculation in
reasonable detail of the additional amounts payable by Borrower, which
explanation and calculations shall be conclusive in the absence of manifest
error.
NEGATIVE COVENANTS. Borrower covenants and agrees with Lender that while this
Agreement is in effect, Borrower shall not, without the prior written consent of
Lender:

  Indebtedness and Liens. (a) Except for trade debt incurred in the normal
  course of business and indebtedness to Lender contemplated by this Agreement,
  create, incur or assume indebtedness for borrowed money, including capital
  leases, (b) except as allowed as a Permitted Lien, sell, transfer, mortgage,
  assign, pledge, lease, grant a security interest in, or encumber any of
  Borrower's assets, or (c) sell with recourse any of Borrower's accounts,
  except to Lender.

  Continuity of Operations. (a) Engage in any business activities substantially
  different than those in which Borrower is presently engaged, (b) cease
  operations, liquidate, merge, transfer, acquire or consolidate with any other
  entity, change ownership, change its name, dissolve or transfer or sell
  Collateral out of the ordinary course of business, (c) pay any dividends on
  Borrower's stock (other than dividends payable in its stock), provided,
  however that notwithstanding the foregoing, but only so long as no Event of
  Default has occurred and is continuing or would result from the payment of
  dividends, if Borrower is a "Subchapter S Corporation" (as defined in the
  Internal Revenue Code of 1986, as amended), Borrower may pay cash dividends on
  its stock to its shareholders from time to time in amounts necessary to enable
  the shareholders to pay income taxes and make estimated income tax payments to
  satisfy their liabilities under federal and state law which arise solely from
  their status as Shareholders of a Subchapter S Corporation because of their
  ownership of shares of stock of Borrower, or (d) purchase or retire any of
  Borrower's outstanding shares or alter or amend Borrower's capital structure.

  Loans, Acquisitions and Guaranties. (a) Loan, invest in or advance money or
  assets, (b) purchase, create or acquire any interest in any other enterprise
  or entity, or (c) incur any obligation as surety or guarantor other than in
  the ordinary course of business.

CESSATION OF ADVANCES. If Lender has made any commitment to make any Loan to
Borrower, whether under this Agreement or under any other agreement, Lender
shall have no obligation to make Loan Advances or to disburse Loan proceeds if:
(a) Borrower or any Guarantor is in default under the terms of this Agreement or
any of the Related Documents or any other agreement that Borrower or any
Guarantor has with Lender; (b) Borrower or any Guarantor becomes insolvent,
files a petition in bankruptcy or similar proceedings, or is adjudged a
bankrupt; (c) there occurs a material adverse change in Borrower's financial
condition, in the financial condition of any Guarantor, or in the value of any
Collateral securing any Loan; (d) any Guarantor seeks, claims or otherwise
attempts to limit, modify or revoke such Guarantor's guaranty of the Loan or any
other loan with Lender; or (e) Lender in good faith deems itself insecure, even
though no Event of Default shall have occurred.

EVENTS OF DEFAULT. Each of the following shall constitute an Event of Default
under this Agreement:
  Default on Indebtedness. Failure of Borrower to make any payment when due on
  the Loans.

  Other Defaults. Failure of Borrower or any Grantor to comply with or to
  perform when due any other term, obligation, covenant or condition contained
  in this Agreement or in any of the Related Documents, or failure of Borrower
  to comply with or to perform any other term, obligation, covenant or condition
  contained in any other agreement between Lender and Borrower.
  Default In Favor of Third Parties. Should Borrower or any Grantor default
  under any loan, extension of credit, security agreement, purchase or sales
  agreement, or any other agreement, in favor of any other creditor or person
  that may materially affect any of Borrower's property or Borrower's or any
  Grantor's ability to repay the Loans or perform their respective obligations
  under this Agreement or any of the Related Documents.

  False Statements. Any warranty, representation or statement made or furnished
  to Lender by or on behalf of Borrower or any Grantor under this Agreement or
  the Related Documents is false or misleading in any material respect at the
  time made or furnished, or becomes false or misleading at any time thereafter.

  Defective Collateralization. This Agreement or any of the Related Documents
  ceases to be in full force and effect (including failure of any Security
  Agreement to create a valid and perfected Security Interest) at any time and
  for any reason.

  Insolvency. The dissolution or termination of Borrower's existence as a going
  business, the insolvency of Borrower, the appointment of a receiver for any
  part of Borrower's property, any assignment for the benefit of creditors, any
  type of creditor workout, or the commencement of any proceeding under any
  bankruptcy or insolvency laws by or against Borrower.

  Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture
  proceedings, whether by judicial proceeding, self-help, repossession or any
  other method, by any creditor of Borrower, any creditor of any Grantor against
  any collateral securing the Indebtedness, or by any governmental agency. This
  includes a garnishment, attachment, or levy on or of any of Borrower's deposit
  accounts with Lender. However, this Event of Default shall not apply if there
  is a good faith dispute by Borrower or Grantor, as the case may be, as to the
  validity or reasonableness of the claim which is the basis of the creditor or
  forfeiture proceeding, and if Borrower or Grantor gives Lender written notice
  of the creditor or forfeiture proceeding and furnishes reserves or a surety
  bond for the creditor or forfeiture proceeding satisfactory to Lender.

  Events Affecting Guarantor. Any of the preceding events occurs with respect to
  any Guarantor of any of the Indebtedness or any Guarantor dies or becomes
  incompetent, or revokes or disputes the validity of, or liability under, any
  Guaranty of the Indebtedness. Lender, at its option, may, but shall not be
  required to, permit the Guarantor's estate to assume unconditionally the
  obligations arising under the guaranty in a manner satisfactory to Lender,
  and, in doing so, cure the Event of Default.

  Change In Ownership. Any change in ownership of twenty-five percent (25%) or
  more of the common stock of Borrower.

  Adverse Change. A material adverse change occurs in Borrower's financial
  condition, or Lender believes the prospect of payment or performance of the
  Indebtedness is impaired.

  Insecurity. Lender, in good faith, deems itself insecure.
  Right to Cure. If any default, other than a Default on Indebtedness, is
  curable and if Borrower or Grantor, as the case may be, has not been given a
  notice of a similar default within the preceding twelve (12) months, it may be
  cured (and no Event of Default will have occurred) if Borrower or Grantor, as
  the case may be, after receiving written notice from Lender demanding cure of
  such default: (a) cures the default within fifteen (15) days; or (b) if the
  cure requires
<PAGE>

  more than fifteen (15) days, immediately initiates steps which Lender deems in
  Lender's sole discretion to be sufficient to cure the default and thereafter
  continues and completes all reasonable and necessary steps sufficient to
  produce compliance as soon as reasonably practical.
EFFECT OF AN EVENT OF DEFAULT. If any Event of Default shall occur, except where
otherwise provided in this Agreement or the Related Documents, all commitments
and obligations of Lender under this Agreement or the Related Documents or any
other agreement immediately will terminate (including any obligation to make
Loan Advances or disbursements), and, at Lender's option, all Indebtedness
immediately will become due and payable, all without notice of any kind to
Borrower, except that in the case of an Event of Default of the type described
in the "Insolvency" subsection above, such acceleration shall be automatic and
not optional. In addition, Lender shall have all the rights and remedies
provided in the
<PAGE>

08-10-2000                      LOAN AGREEMENT                           Page 7
                                  (Continued)

Related Documents or available at law, in equity, or otherwise. Except as may be
prohibited by applicable law, all of Lender's rights and remedies shall be
cumulative and may be exercised singularly or concurrently. Election by Lender
to pursue any remedy shall not exclude pursuit of any other remedy, and an
election to make expenditures or to take action to perform an obligation of
Borrower or of any Grantor shall not affect Lender's right to declare a default
and to exercise its rights and remedies.

MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Agreement:

  Amendments. This Agreement, together with any Related Documents, constitutes
  the entire understanding and agreement of the parties as to the matters set
  forth in this Agreement. No alteration of or amendment to this Agreement shall
  be effective unless given in writing and signed by the party or parties sought
  to be charged or bound by the alteration or amendment.

  Applicable Law. This Agreement has been delivered to Lender and accepted by
  Lender in the State of Ohio. If there is a lawsuit, Borrower agrees upon
  Lender's request to submit to the jurisdiction of the courts of Cuyahoga
  County, the State of Ohio. Lender and Borrower hereby waive the right to any
  jury trial in any action, proceeding, or counterclaim brought by either Lender
  or Borrower against the other. This Agreement shall be governed by and
  construed in accordance with the laws of the State of Ohio.

  Caption Headings. Caption headings in this Agreement are for convenience
  purposes only and are not to be used to interpret or define the provisions of
  this Agreement.

  Consent to Loan Participation. Borrower agrees and consents to Lender's sale
  or transfer, whether now or later, of one or more participation interests in
  the Loans to one or more purchasers, whether related or unrelated to Lender.
  Lender may provide, without any limitation whatsoever, to any one or more
  purchasers, or potential purchasers, any information or knowledge Lender may
  have about Borrower or about any other matter relating to the Loan, and
  Borrower hereby waives any rights to privacy it may have with respect to such
  matters. Borrower additionally waives any and all notices of sale of
  participation interests, as well as all notices of any repurchase of such
  participation interests. Borrower also agrees that the purchasers of any such
  participation interests will be considered as the absolute owners of such
  interests in the Loans and will have all the rights granted under the
  participation agreement or agreements governing the sale of such participation
  interests. Borrower further waives all rights of offset or counterclaim that
  it may have now or later against Lender or against any purchaser of such a
  participation interest and unconditionally agrees that either Lender or such
  purchaser may enforce Borrower's obligation under the Loans irrespective of
  the failure or insolvency of any holder of any interest in the Loans. Borrower
  further agrees that the purchaser of any such participation interests may
  enforce its interests irrespective of any personal claims or defenses that
  Borrower may have against Lender.

  Costs and Expenses. Borrower agrees to pay upon demand all of Lender's
  expenses, including without limitation attorneys' fees, incurred in connection
  with the preparation, execution, enforcement, modification and collection of
  this Agreement or in connection with the Loans made pursuant to this
  Agreement. Lender may pay someone else to help collect the Loans and to
  enforce this Agreement, and Borrower will pay that amount. This includes,
  subject to any limits under applicable law, Lender's attorneys' fees and
  Lender's legal expenses, whether or not there is a lawsuit, including
  attorneys' fees for bankruptcy proceedings (including efforts to modify or
  vacate any automatic stay or injunction), appeals, and any anticipated post-
  judgment collection services. Borrower also will pay any court costs, in
  addition to all other sums provided by law.
  Notices. All notices required to be given under this Agreement shall be given
  in writing, may be sent by telefacsimile (unless otherwise required by law),
  and shall be effective when actually delivered or when deposited with a
  nationally recognized overnight courier or deposited in the United States
  mail, first class, postage prepaid, addressed to the party to whom the notice
  is to be given at the address shown above. Any party may change its address
  for notices under this Agreement by giving formal written notice to the other
  parties, specifying that the purpose of the notice is to change the party's
  address. To the extent permitted by applicable law, if there is more than one
  Borrower, notice to any Borrower will constitute notice to all Borrowers. For
  notice purposes, Borrower will keep Lender informed at all times of Borrower's
  current address(es).

  Severability. If a court of competent jurisdiction finds any provision of this
  Agreement to be invalid or unenforceable as to any person or circumstance,
  such finding shall not render that provision invalid or unenforceable as to
  any other persons or circumstances. If feasible, any such offending provision
  shall be deemed to be modified to be within the limits of enforceability or
  validity; however, if the offending provision cannot be so modified, it shall
  be stricken and all other provisions of this Agreement in all other respects
  shall remain valid and enforceable.

  Subsidiaries and Affiliates of Borrower. To the extent the context of any
  provisions of this Agreement makes it appropriate, including without
  limitation any representation, warranty or covenant, the word "Borrower" as
  used herein shall include all subsidiaries and affiliates of Borrower.
  Notwithstanding the foregoing however, under no circumstances shall this
  Agreement be construed to require Lender to make any Loan or other financial
  accommodation to any subsidiary or affiliate of Borrower.

  Successors and Assigns. All covenants and agreements contained by or on behalf
  of Borrower shall bind its successors and assigns and shall inure to the
  benefit of Lender, its successors and assigns. Borrower shall not, however,
  have the right to assign its rights under this Agreement or any interest
  therein, without the prior written consent of Lender.

  Survival. All warranties, representations, and covenants made by Borrower in
  this Agreement or in any certificate or other instrument delivered by Borrower
  to Lender under this Agreement shall be considered to have been relied upon by
  Lender and will survive the making of the Loan and delivery to Lender of the
  Related Documents, regardless of any investigation made by Lender or on
  Lender's behalf.

  Time Is of the Essence. Time is of the essence in the performance of this
  Agreement.

  Waiver. Lender shall not be deemed to have waived any rights under this
  Agreement unless such waiver is given in writing and signed by Lender. No
  delay or omission on the part of Lender in exercising any right shall operate
  as a waiver of such right or any other right. A waiver by Lender of a
  provision of this Agreement shall not prejudice or constitute a waiver of
  Lender's right otherwise to demand strict compliance with that provision or
  any other provision of this Agreement. No prior waiver by Lender, nor any
  course of dealing between Lender and Borrower, or between Lender and any
  Grantor, shall constitute a waiver of any of Lender's rights or of any
  obligations of Borrower or of any Grantor as to any future transactions.
  Whenever the consent of Lender is required under this Agreement, the granting
  of such consent by Lender in any instance shall not constitute continuing
  consent in subsequent instances where such consent is required, and in all
  cases such consent may be granted or withheld in the sole discretion of
  Lender.
<PAGE>

08-10-2000                       LOAN AGREEMENT                          Page 8
                                  (Continued)

 BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS LOAN AGREEMENT,
 AND BORROWER AGREES TO ITS TERMS. THIS AGREEMENT IS DATED AS OF AUGUST 10,
 2000.

 BORROWER:

 Pinnacle Data Systems, Inc.
 /s/ Thomas J. Carr
 By: Thomas J. Carr,  CFO

 LENDER:
 /s/ Michael Arguelles
 KeyBank National Association


LASER PRO, Reg. U.S. Pat.& T.M. Off., Ver. 3.29(C)Concentrex 2000 A I I rights
reserved. I OH-C40 PIN 17532.LN C3.OVL)