AMENDED AND RESTATED LOAN AGREEMENT

Exhibit 10.1

AMENDED AND RESTATED LOAN AGREEMENT

THIS AGREEMENT (as the same may be amended, restated or otherwise modified, the “Agreement”) is made September 30, 2008, between PINNACLE DATA SYSTEMS, INC. , an Ohio corporation with offices at 6600 Port Road, Groveport, Ohio 43125 (“Borrower”) and KEYBANK NATIONAL ASSOCIATION , a national banking association, with offices at 88 East Broad Street, Columbus, Ohio 43215, and its successors and assigns (“Lender”). The terms and conditions of this Agreement shall supersede and replace in their entirety the terms and conditions of that certain Loan Agreement between Borrower and Lender dated April 8, 2008. Upon the execution of this Agreement, such loan agreement shall be terminated and of no further force or effect.

In consideration of the covenants and agreements contained herein, the Borrower and the Lender hereby mutually agree as follows:

1. DEFINITIONS

1.1. General . Any accounting term used but not specifically defined herein shall be construed in accordance with GAAP (as defined below). The definition of each agreement, document, and instrument set forth in Section 1.2 hereof shall be deemed to mean and include such agreement, document, or instrument as amended, restated, or modified from time to time.

1.2. Defined Terms . As used in this Agreement:

“Account”, “Chattel Paper”, “Consumer Goods”, “Deposit Account”, “Document”, “Farm Products”, “General Intangible”, “Goods”, “Instrument” and “Proceeds”, have the meanings as set forth in the Ohio Uniform Commercial Code, Ohio Revised Code Title 13 inclusive, as amended from time to time.

“Account Debtor” means any Person obligated to pay all or any part of any Account in any manner and includes (without limitation) any guarantor thereof.

“Accounts Receivable Collection Account” means a commercial Deposit Account maintained by Borrower with Lender or a Lender Affiliate, without liability by Lender or a Lender Affiliate to pay interest thereon, from which account Lender shall have the exclusive right to withdraw funds until all Obligations are paid, performed, and observed in full.

“Affiliate” of any specified entity means any other entity directly or indirectly controlling or controlled by or under direct or indirect common control with such specified entity and “control”, when used with respect to any specified entity, means the power to direct the management and policies of such entity, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

“Borrowing Base” means (a) 85% of Eligible Accounts plus (b) 30% of Eligible Inventory, but not to exceed $5,000,000.

“Borrowing Base Certificate” means a certificate substantially in the form of attached Exhibit B.

“Business Day” means a day of the year on which banks are not required or authorized to close in Cleveland, Ohio.

“Code” shall mean the Internal Revenue Code of 1986, as amended, together with the rules and regulations promulgated thereunder.

“Collateral” means the collateral in which Borrower has given the Lender a security interest pursuant to the Security Instruments and any other instrument given to Lender to secure the Indebtedness and/or this Agreement.

“Collection” means any payment made from an Account Debtor to Borrower including, but not limited to, cash, checks, drafts and any other form of payment.

“Contract Right” means (a) any contract right, and (b) any right to payment under a contract not yet earned by performance and not evidenced by an Instrument or Chattel Paper.

“Controlled Disbursement Account” means a commercial deposit account designated “controlled disbursement account” and maintained by borrower with lender, without liability by Lender to pay interest thereon.

“Controlled Group” shall mean Borrower and each Person required to be aggregated with Borrower under Code Sections 414(b), (c), (m) or (o).

“Demand Line of Credit” means the credit facility described in Section 2.1 hereof, which Demand Line of Credit shall be payable in accordance with the terms of such demand credit facility and this Agreement.

“Deposit Account” means (a) any deposit account, and (b) any demand, time, savings, passbook, or a similar account maintained with a bank, savings and loan association, credit union, or similar organization, other than an account evidenced by a certificate of deposit.

“Eligible Account” means an Account that is an account receivable (i.e., each specific invoice) of Borrower that, at all times until it is collected in full, continuously meets the following requirements:

(a) is not subject to any claim for credit, allowance or adjustment by the Account Debtor or any defense, dispute, set-off or counterclaim; provided that, with respect to any set-off against an Account owed by Sun Microsystems, Inc., only the portion of the Account that is subject to the set-off shall be excluded;

(b) arose in the ordinary course of business of Borrower from the performance of services or bona fide sale of goods that have been shipped or otherwise delivered to the Account Debtor, and (i) not more than ninety (90) days have elapsed since the invoice date, and (ii) not more than sixty (60) days have elapsed since the date payment was due;

(c) is not owing from an Account Debtor with respect to which Borrower has received any notice or has any knowledge of insolvency, bankruptcy, or material financial impairment, or that has suspended normal business operations, dissolved, liquidated or terminated its existence;

(d) is not subject to an assignment, pledge, claim, mortgage, lien or security interest of any type except that granted to or in favor of Lender;

(e) does not relate to any goods repossessed, lost, damaged, rejected or returned, or acceptance of which has been revoked or refused, to the extend of the amount of such matters;

(f) is not evidenced by a promissory note or any other instrument or by chattel paper;

(g) has not been determined by Lender to be unsatisfactory in any respect in the exercise of its reasonable credit judgment;

(h) is not a Government Account Receivable, unless the security interest of Lender in such Government Account Receivable is filed in accordance with the Federal Assignment of Claims Act;

(i) is not owing from an affiliate, a shareholder or an employee of Borrower;

(j) is not owing from an Account Debtor that has failed to pay more than twenty-five percent (25%) of its currently outstanding accounts receivable within (i) ninety (90) days of the invoice date, or (ii) sixty (60) days of the date payment was due;

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(k) with respect to an Account Debtor that, together with its affiliates, owes Borrower more than twenty-five percent (25%) of all Accounts, is not the portion of the accounts receivable of Borrower that represents the excess of twenty-five percent (25%) of such accounts receivable;

(l) is an Account in which Lender has a valid and enforceable first security interest;

(m) has arisen in connection with sales of goods that were not shipped or delivered to an Account Debtor on consignment, a sale or return basis, a guaranteed sale basis, a bill and hold basis, or on the basis of any similar understanding;

(n) is not subject to any provision expressly prohibiting assignment of the Account or requiring notice of or consent to such assignment;

(o) is not owing from an Account Debtor located in a state that requires that Borrower, in order to sue any Person in such state’s courts, to either (i) qualify to do business in such state or (ii) file a report with the taxation division of such state for the then current year, unless, in each case, Borrower has fulfilled such requirements to the extent applicable for the then current year;

(p) is not owing from an Account Debtor located in Minnesota, unless Borrower has filed all legally required Notice of Business Activities Reports with the Minnesota Department of Revenue;

(q) is not an Account with respect to which any of the representations, warranties, covenants and agreements contained in this Agreement or any of the related instruments are not or have ceased to be complete and correct in all material respects, or have been breached;

(r) is not an Account that represents a progress billing or an account that has had the time for payment extended by Borrower without the consent of Lender (for the purposes hereof, “progress billing” means any invoice for goods sold or leased or services rendered under a contract or agreement pursuant to which the Account Debtor’s obligation to pay such invoice is conditioned upon Borrower’s completion of any further performance under the contract or agreement);

(s) is not owing from an Account Debtor that is also a supplier to or creditor of Borrower to the extent of the amount owing to such supplier or creditor; and

(t) does not represent a manufacturer’s or supplier’s credits, discounts, incentive plans or similar arrangements entitling Borrower to discounts on future purchases therefrom.

“Eligible Inventory” means all Inventory of Borrower in which Lender has a valid and enforceable first security interest, except Inventory that:

(a) is located outside of the United States;

(b) is in the possession of a bailee, consignee or other third party in possession of Inventory of Borrower, unless (i) reserves, satisfactory to Lender, have been established with respect thereto; or (ii) (A) with respect to a processor or bailee, an acknowledged processor’s waiver (or bailee’s waiver) has been received by Lender, (B) such third party is listed on Schedule 1 attached hereto, or Lender has received prior written notice of such third party location, (C) if required by Lender, proper notice has been given to all secured parties of such third party that have filed U.C.C. Financing Statements claiming a security interest in such third party’s inventory, and (D) Borrower has filed appropriate U.C.C. Financing Statements to protect its interest therein, in form and substance satisfactory to Lender;

(c) is located on facilities leased by Borrower, unless an acknowledged landlord’s waiver in form acceptable to Lender has been received by it or reserves, satisfactory to Lender, have been established with respect thereto;

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(d) is slow-moving, damaged, defective or obsolete;

(e) consists of (i) goods not held for sale, such as labels, maintenance items, supplies (other than shop supply inventory) and packaging, or (ii) Inventory used in connection with research and development;

(f) is held for return to vendors;

(g) is subject to a Lien in favor of any Person other than Lender; or

(h) is determined by Lender to be unsatisfactory in any respect, in the exercise of its reasonable credit judgment.

“Environmental Law” means any federal, state or local statute, law, ordinance, code, rule, regulation, order or decree regulating, relating to, or imposing liability upon a Person in connection with the use, release or disposal of any hazardous, toxic or dangerous substance, waste or material.

“Environmental Laws” means all provisions of law (including the common law), statues, ordinances, codes, rules, guidelines, policies, procedures, orders-in-council, regulations, permits, licenses, judgments, writs, injunctions, decrees, orders, awards and standards promulgated by a Governmental Authority or by any court, agency, instrumentality, regulatory authority or commission of any of the foregoing concerning environmental health or safety and protection of, or regulation of the discharge of substances into, the environment.

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated pursuant thereto.

“ERISA Event” shall mean (a) the existence of a condition or event with respect to an ERISA Plan that presents a risk of the imposition of an excise tax or any other liability on the Borrower or of the imposition of a Lien on the assets of Borrower; (b) the engagement by a Controlled Group member in a non-exempt “prohibited transaction” (as defined under ERISA Section 406 or Code Section 4975) or a breach of a fiduciary duty under ERISA that could result in liability to Borrower; (c) the application by a Controlled Group member for a waiver from the minimum funding requirements of Code Section 412 or ERISA Section 302 or a Controlled Group member is required to provide security under Code Section 401(a)(29) or ERISA Section 307; (d) the occurrence of a Reportable Event with respect to any Pension Plan as to which notice is required to be provided to the PBGC; (e) the withdrawal by a Controlled Group member from a Multiemployer Plan in a “complete withdrawal” or a “partial withdrawal” (as such terms are defined in ERISA Sections 4203 and 4205, respectively); (f) the involvement of, or occurrence or existence of any event or condition that makes likely the involvement of, a Multiemployer Plan in any reorganization under ERISA Section 4241; (g) the failure of an ERISA Plan (and any related trust) that is intended to be qualified under Code Sections 401 and 501 to be so qualified or any “cash or deferred arrangement” under any such ERISA Plan to meet the requirements of Code Section 401(k); (h) the taking by the PBGC of any steps to terminate a Pension Plan or appoint a trustee to administer a Pension Plan, or the taking by a Controlled Group member of any steps to terminate a Pension Plan; (i) the failure by a Controlled Group member or an ERISA Plan to satisfy any requirements of law applicable to an ERISA Plan; (j) the commencement, existence or threatening of the incurrence by a Controlled Group member of a claim, action, suit, audit or investigation with respect to an ERISA Plan, other than a routine claim for benefits; or (k) any occurrence by or any expectation of the incurrence by a Controlled Group member of any liability for post-retirement benefits under any Welfare Plan, other than as required by ERISA Section 601, et. seq . or Code Section 4980B.

“ERISA Plan” shall mean an “employee benefit plan” (within the meaning of ERISA Section 3(3)) that a Controlled Group member at any time sponsors, maintains, contributes to, has liability with respect to or has an obligation to contribute to such plan.

“ERISA Affiliate” means each Person (whether or not incorporated) which together with Borrower would be treated as a single employer under ERISA.

“Event of Default” means any one or more of the occurrences described in Section 6 hereof.

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“GAAP” means generally accepted accounting principles as in effect, which shall include the official interpretations thereof by the Financial Accounting Standards Board, consistently applied.

“Government Account Receivable” means an Account that arises out of contracts with or orders from the United States or any of its departments, agencies or instrumentalities and that is subject to the Federal Assignment of Claims Act.

“Indebtedness” shall mean, for any Person (excluding in all cases trade payables payable in the ordinary course of business by such Person), (a) all obligations to repay borrowed money, direct or indirect, incurred, assumed, or guaranteed, (b) all obligations for the deferred purchase price of capital assets, (c) all obligations under conditional sales or other title retention agreements, (d) all obligations (contingent or otherwise) under any letter of credit, banker’s acceptance, currency swap agreement, or Interest Rate Agreement, (e) all synthetic leases, (f) all lease obligations that have been or should be capitalized on the books of such Person in accordance with GAAP, (g) all obligations of such Person with respect to asset securitization financing programs to the extent that there is recourse against such Person or such Person is liable (contingent or otherwise) under any such program, (h) all obligations to advance funds to, or to purchase assets, property or services from, any other Person in order to maintain the financial condition of such Person, and (i) any other transaction (including forward sale or purchase agreements) having the commercial effect of a borrowing of money entered into by such Person to finance its operations or capital requirements.

“Interest Rate Agreement” means any agreement for a derivative or hedging product, including, without limitation, interest rate or equity swaps, futures, options, caps, floors, collars, or forwards now or hereafter executed by and between Borrower and Lender or any Lender Affiliate.

“Inventory” is as defined in the UCC and means, without limitation, goods, merchandise and other personal property furnished under any contract of service or intended for sale or lease, including, without limitation, and all raw materials, work in process, finished goods and materials and supplies, of any kind, nature or description, that are used or consumed by Borrower’s business, or are or might be used in connection with the manufacture, packing, shipping, advertising, selling or finishing such goods, merchandise and other personal property, and all returned or repossessed goods now or hereafter in the possession of or under the control of Borrower, wherever located.

“Lender Affiliate” means any one or more bank or non-bank subsidiaries (other than the Lender) of KeyCorp and its successors.

“Lien” means any mortgage, security interest, lien, charge, encumbrance on, pledge or deposit of, or conditional sale or other title retention agreement with respect to any property or asset.

“Loan” or “Loans” means the credit to the Borrower extended by the Lender in accordance with Section 2 hereof.

“Loan Documents” means the collective reference to this Agreement and all other instruments, agreements and documents entered into from time to time, evidencing or securing the Loan or any obligation of payment thereof or performance of Borrower’s obligations in connection with the transaction contemplated hereunder, each as amended, including without limitation the Loan Documents listed on Exhibit A.

“Margin Stock” shall have the meaning given to it under Regulation U of the Board of Governors of the Federal Reserve System, as amended from time to time.

“Material Adverse Change” means any condition or event that Lender determines has or is reasonably likely to have a material adverse effect on (a) the business, operations, property or condition (financial or otherwise) or prospects of Borrower, (b) the business, operations, property, condition (financial or otherwise) or prospects of Borrower and its Subsidiaries, if any, taken as a whole, or (c) the validity or enforceability of this Agreement or any of the other Loan Documents or the rights and remedies of Lender hereunder or thereunder.

“Multiemployer Plan” shall mean a Pension Plan that is subject to the requirements of Subtitle E of Title IV of ERISA.

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“Note” or “Notes” means, as the case may be, the promissory note(s) signed and delivered by the Borrower to evidence its Indebtedness to the Lender pursuant to Section 2 hereof .

“Obligation” or “Obligations” means, collectively, (a) all Indebtedness and other obligations incurred by Borrower to Lender pursuant to this Agreement and includes the principal of and interest on all Notes; (b) each extension, renewal or refinancing thereof in whole or in part; (c) the commitment and other fees, and any prepayment fees payable under this Agreement or any other Loan Document; (d) every other liability, now or hereafter owing to Lender or any Lender Affiliate by Borrower, and includes, without limitation, any Interest Rate Agreement entered into by Borrower with Lender or any Lender Affiliate and every other liability, whether owing by only Borrower or by Borrower with one or more others in a several, joint or joint and several capacity, whether owing absolutely or contingently, whether created by note, overdraft, guaranty of payment or other contract or by quasi-contract, tort, statute or other operation of law, whether incurred directly to Lender or any Lender Affiliate or acquired by Lender or any Lender Affiliate by purchase, pledge or otherwise and whether participated to or from Lender or any Lender Affiliate in whole or in part; and (e) all Related Expenses.

“Obligor” shall mean (a) a Person whose credit or any of whose property is pledged to the payment of the Obligations and includes, without limitation, any Guarantor, and (b) any signatory to a Loan Document.

“Organization” means a corporation, government or government subdivision or agency, business trust, estate, trust, partnership, association, two or more Persons having a joint or common interest, and any other legal or commercial entity.

“PBGC” shall mean the Pension Benefit Guaranty Corporation, or its successor.

“Pension Plan” shall mean an ERISA Plan that is a “pension plan” within the meaning of ERISA Section 3(2).

“Permitted Encumbrances” means, as of any particular time, (a) liens for ad valorem taxes and special assessments not then delinquent, (b) this Agreement, and any security interest or other lien created thereby, (c) any Permitted Encumbrances defined in any of the Loan Documents, including, without limitation, as defined in any Security Instrument, (d) any liens permitted by Section 5.15 hereof, and (e) such minor defects, irregularities, encumbrances and clouds on title as normally exist with respect to property similar in character to the Collateral and as do not materially interfere with or impair the use or value of the property affected thereby.

“Person” means an individual or an Organization.

“Plan” means any plan (other than a Multiemployer Plan) defined in ERISA in which the Borrower or any Subsidiary is, or has been at any time during the preceding two (2) years, an “employer” or a “substantial employer” as such terms are defined in ERISA.

“Potential Default” means any condition, action, or failure to act which, with the passage of time, service of notice, or both, will constitute an Event of Default under this Agreement.

“Proceeds” means (a) any proceeds, and (b) whatever is received upon the sale, exchange, collection, or other disposition of Collateral or Proceeds, whether cash or non-cash. Cash Proceeds includes, without limitation, moneys, checks, and Deposit Accounts. Proceeds includes, without limitation, any Account arising when the right to payment is earned under a Contract Right, any insurance payable by reason of loss or damage to the Collateral, and any return or unearned premium upon any cancellation of insurance. Except as expressly authorized in the Agreement or the Security Instruments, Lender’s right to Proceeds specifically set forth herein or indicated in any financing statement shall never constitute an express or implied authorization on the part of Lender to Borrower’s sale, exchange, collection, or other disposition of any or all of the Collateral.

“Quarters” or “Quarterly” means calendar quarters, being each of the three (3) calendar month periods ending 3/31, 6/30, 9/30 and 12/31 of each calendar year.

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“Related Expenses” means any and all costs, liabilities, and expenses (including, without limitation, losses, damages, penalties, claims, actions, reasonable attorney’s fees, legal expenses, judgments, suits and disbursements) reasonably incurred by, or imposed upon, or asserted against, Lender in any attempt by Lender:

(a) to obtain, preserve, perfect, or enforce any security interest evidenced by (i) this Agreement, or (ii) any other pledge agreement, mortgage, deed of trust, hypothecation agreement, guaranty, security agreement, assignment, or security instrument executed or given by Borrower to or in favor of Lender;

(b) to obtain payment, performance, and observance of any and all of the Obligations;

(c) to maintain, insure, audit, inspect, collect, preserve, repossess, and dispose of any of the Collateral, including, without limitation, costs and expenses for appraisals, assessments, and audits of Borrower or the Collateral; or

(d) incidental or related to (a) through (c) above, including, without limitation, interest thereupon from the date incurred, imposed, or asserted until paid at the rate payable as set forth in the Note, but in no event greater than the highest rate permitted by law.

“Related Person” means any Person who (i) now or hereafter owns an equity interest in Borrower or Guarantor or (ii) has warrants, debentures, or similar rights to own any equity interest in Borrower or Guarantor, whether or not the same has vested or been delivered or (iii) is owned, in whole or in part, by Borrower or Guarantor.

“Reportable Event” shall mean a reportable event as that term is defined in Title IV of ERISA, except actions of general applicability by the Secretary of Labor under Section 110 of such Act.

“Reserves” means any amount that Lender reserves, without duplication, pursuant to the Section 2.3, against the Borrowing Base.

“Security Instrument(s)” means the written document(s) listed in Exhibit A attached hereto, signed and delivered from time to time to the Lender in connection with Indebtedness owed by Borrower to the Lender.

“Subsidiary” means any Person of which more than fifty percent (50%) of the following is, at the time, owned or controlled, directly or indirectly, by Borrower or one or more other Subsidiaries: (i) the voting stock or units entitling the holders thereof to elect a majority of the board of directors, managers, or trustees thereof, or (ii) the interest in the capital or profits of such Person.

The foregoing definitions shall be applicable to the singulars and plurals of the foregoing defined terms.

2. CREDIT FACILITIES.

2.1. Demand Line of Credit Facility . The Lender hereby agrees, subject to the terms and conditions of this Agreement and the Demand Line of Credit Note, to extend the Demand Line of Credit facility to Borrower as follows: Lender will, upon request from Borrower, make loan advances to or for the account of borrower up to but not exceeding an aggregate unpaid principal amount outstanding at any one time equal to: (i) the lesser of (a) $8,000,000 or (b) the Borrowing Base; less (ii) Reserves, if any. Borrower’s obligation to pay the Demand Line of Credit facility advances shall be evidenced by the Demand Line of Credit Note.

2.2. Establishment of Reserves . Lender shall have the right, from time to time, in the good faith exercise of its reasonable credit judgment (consistent with the asset-based nature of this credit), to establish Reserves in such amounts and with respect to such matters as Lender deems necessary or appropriate, and to increase or decrease such Reserves. In exercising such reasonable credit judgment, Lender may take into account factors which (a) will or could reasonably be expected to adversely affect the value of any Collateral, the enforceability or priority of the Liens of Lender or the amount that Lender would be likely to receive in the liquidation of such Collateral, or (b) may demonstrate that any collateral report or financial information concerning Borrower is incomplete, inaccurate or misleading in any material respect. In exercising such reasonable credit judgment, Reserves may be established against anticipated obligations, contingencies or conditions affecting Borrower, including (i) tax liabilities and other

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obligations owing to Governmental Authorities, (ii) asserted litigation liabilities, (iii) anticipated remediation for compliance with Environmental Laws, and (iv) obligations owing to any lessor of real property, any warehouseman or any mortgagor on third-party mortgaged sites. Reserves may also be established with respect to the dilution of Accounts and as a result of inventory appraisals.

2.3. Reserve for Inventory . There shall at all times be a Reserve equal to the amount of Borrower’s inventory reserve as shown in its financial statements.

2.4. Demand for Payment . The Demand Line of Credit facility is payable upon demand by Lender, whether or not there is an Event of Default under Section 6. In addition, Lender may, at any time, with or without cause, refuse to advance funds or extend credit to Borrower under the Demand Line of Credit facility.

3. WARRANTIES.

Borrower represents and warrants to the Lender (which representations and warranties will survive the delivery of the Notes and the making of the Loans) that:

3.1. Existence and Legal Authority . Borrower is a corporation duly organized, validly existing and in good standing under the laws of the State of Ohio and has all requisite power and authority to own its property and to carry on its business as now being conducted, to enter into the Loan Documents to which it is a party and the other agreements referred to herein and transactions contemplated thereby, and to carry out the provisions and conditions of such Loan Documents to which it is a party. Borrower is duly qualified to do business and is in good standing in every jurisdiction where the failure to so qualify would have a material adverse effect.

3.2. Due Execution and Delivery . Borrower has full power, authority and legal right to incur the obligations provided for in, and to execute and deliver and to perform and observe the terms and provisions of, the Loan Documents to which it is a party, and each of them has been duly executed and delivered by Borrower and has been authorized by all required action, and Borrower has obtained all requisite consents to the transactions contemplated thereby under any instrument to which it is a party, and the Loan Documents constitute the legal, valid and binding obligations of Borrower enforceable against Borrower in accordance with their respective terms, except as the enforceability thereof may be limited by applicable bankruptcy, insolvency or other similar laws affecting creditors’ rights generally.

3.3. No Breach of Other Instruments . Neither the execution and delivery of the Loan Documents, nor the compliance by Borrower with the terms and conditions of the Loan Documents, nor the consummation of the transactions contemplated thereby, will conflict with or result in a breach of the Articles of Incorporation or Code of Regulations, as applicable, or other governing documents of Borrower, or any of the terms, conditions or provisions of any agreement or instrument or any charter or other corporate restriction or law, regulation, rule or order of any governmental body or agency to which Borrower is now a party or is subject, or imposition of a lien, charge or encumbrance of any nature whatsoever upon any of the property or assets of Borrower pursuant to the terms of any such agreement or instrument.

3.4. Government Authorization . No consent, approval, authorization or order of any court or governmental agency or body is required for the consummation by Borrower of the transactions contemplated by the Loan Documents.

3.5. Ownership of Property . Except for Permitted Encumbrances or as otherwise permitted in the Security Instruments or this Agreement, Borrower has and will have good and marketable fee title to, or valid leasehold interests in, its real properties in accordance with the laws of the jurisdiction where located, and good and marketable title to substantially all its other property and assets, subject, however, in the case of real property, to title defects and restrictions which do not materially interfere with the operations conducted thereon by Borrower. Except for Permitted Encumbrances, the real property and