Exhibit 10.15

 

K    BANK

 

COMMERCIAL GUARANTY

 

Principal

  Loan Date   Maturity   Loan No   Call/Coll   Account  

Officer

PK

 

Intials

References in the shaded area are for Lender’s use only and do not limit the
applicability of this document to any particular loan or item. Any item above
containing “***” has been omitted due to text length limitations.    

 

Borrower:   

Avatech Solutions Subsidiary, Inc.

    10715 Red Run Blvd, Ste 101

    Owings Mills, MD 21117

  

Lender:

  

K BANK

7F GWYNNS MILL COURT

OWINGS MILLS, MD 21117

Guarantor:

  

William James Hindman

    2322 Nicodemus Rd

    Westminster, MD 21157

         

 

AMOUNT OF GUARANTY. This is a guaranty of payment of the Note, including without
limitation the principal Note amount of Seven Hundred Thousand & 00/100 Dollars
($700,000.00).

 

GUARANTY. For good and valuable consideration, William James Hindman
(“Guarantor”) absolutely and unconditionally guarantees and promises to pay to K
Bank (“Lender”) or its order, in legal tender of the United States of America,
the Indebtedness (as that term is defined below) of Avatech Solutions
Subsidiary, Inc. (“Borrower”) to Lender on the terms and conditions set forth in
this Guaranty.

 

MAXIMUM LIABILITY. The maximum liability of Guarantor under this Guaranty shall
not exceed at any one time the amount of the Indebtedness described herein, plus
all costs and expenses of (A) enforcement of this Guaranty and (B) collection
and sale of any collateral securing this Guaranty.

 

The above limitation on liability is not a restriction on the amount of the
Indebtedness of Borrower to Lender either in the aggregate or at any one time.
If Lender presently holds one or more guaranties, or hereafter receives
additional guaranties from Guarantor, Lender’s rights under all guaranties shall
be cumulative. This Guaranty shall not (unless specifically provided below to
the contrary) affect or invalidate any such other guaranties. Guarantor’s
liability will be Guarantor’s aggregate liability under the terms of this
Guaranty and any such other unterminated guaranties.

 

INDEBTEDNESS GUARANTEED. The Indebtedness guaranteed by this Guaranty includes
the Note, including (a) all principal, (b) all interest, (c) all late charges,
(d) all loan fees and loan charges, and (e) all collection costs and expenses
relating to the Note or to any collateral for the Note. Collection costs and
expenses include without limitation all of Lender’s attorneys’ fees.

 

DURATION OF GUARANTY. This Guaranty will take effect when received by Lender
without the necessity of any acceptance by Lender, or any notice to Guarantor or
to Borrower, and will continue in full force until all Indebtedness shall have
been fully and finally paid and satisfied and all of Guarantor’s other
obligations under this Guaranty shall have been performed in full. Release of
any other guarantor or termination of any other guaranty of the Indebtedness
shall not affect the liability of Guarantor under this Guaranty. A revocation
Lender receives from any one or more Guarantors shall not affect the liability
of any remaining Guarantors under this Guaranty. This Guaranty covers a
revolving line of credit and it is specifically anticipated that fluctuations
will occur in the aggregate amount of Indebtedness owing from Borrower to
Lender. Guarantor specifically acknowledges and agrees that fluctuations in the
amount of Indebtedness, even to zero dollars ($ 0.00), shall not constitute a
termination of this Guaranty. Guarantor’s liability under this Guaranty shall
terminate only upon (A) termination in writing by Borrower and Lender of the
line of credit, (B) payment of the Indebtedness in full in legal tender, and (C)
payment in full in legal tender of all of Guarantor’s other obligations under
this Guaranty.

 

GUARANTOR’S AUTHORIZATION TO LENDER. Guarantor authorizes Lender, without notice
or demand and without lessening Guarantor’s liability under this Guaranty, from
time to time: (A) to make one or more additional secured or unsecured loans to
Borrower, to lease equipment or other goods to Borrower, or otherwise to extend
additional credit to Borrower; (B) to alter, compromise, renew, extend,
accelerate, or otherwise change one or more times the time for payment or other
terms of the Indebtedness or any part of the Indebtedness, including increases
and decreases of the rate of interest on the Indebtedness; (C) to take and hold
security for the payment of this Guaranty or the Indebtedness, and exchange,
enforce, waive, subordinate, fail or decide not to perfect, and release any such
security, with or without the substitution of new collateral; (D) to release,
substitute, agree not to sue, or deal with any one or more of Borrower’s
sureties, endorsers, or other guarantors on any terms or in any manner Lender
may choose; (E) to determine how, when and what application of payments and
credits shall be made on the Indebtedness (F) to apply such security and direct
the order or manner of sale thereof, including without limitation, any
nonjudicial sale permitted by the terms of the controlling security agreement or
deed of trust, as Lender in its discretion may determine; (G) to sell, transfer,
assign or grant participations in all or any part of the Indebtedness; and (H)
to assign or transfer this Guaranty in whole or in part.

 

GUARANTOR’S REPRESENTATIONS AND WARRANTIES. Guarantor represents and warrants to
Lender that (A) no representations or agreements of any kind have been made to
Guarantor which would limit or qualify in any way the terms of this Guaranty;
(B) this Guaranty is executed at Borrower’s request and not at the request of
Lender; (C) Guarantor has full power, right and authority to enter into this
Guaranty; (D) the provisions of this Guaranty do not conflict with or result in
a default under any agreement or other instrument binding upon Guarantor and do
not result in a violation of any law, regulation, court decree or order
applicable to Guarantor; (E) Guarantor has not and will not, without the prior
written consent of Lender, sell, lease, assign, encumber, hypothecate, transfer,
or otherwise dispose of all or substantially all of Guarantor’s assets, or any
interest therein; (F) upon Lender’s request, Guarantor will provide to Lender
financial and credit information in form acceptable to Lender, and all such
financial information which currently has been, and all future financial
information which will be provided to Lender is and will be true and correct in
all material respects and fairly present Guarantor’s financial condition as of
the dates the financial information is provided; (G) no material adverse change
has occurred in Guarantor’s financial condition since the date of the most
recent financial statements provided to Lender and no event has occurred which
may materially adversely affect Guarantor’s financial condition; (H) no
litigation, claim, investigation, administrative proceeding or similar action
(including those for unpaid taxes) against Guarantor is pending or threatened;
(I) Lender has made no representation to Guarantor as to the creditworthiness of
Borrower; and (J) Guarantor has established adequate means of obtaining from
Borrower on a continuing basis information regarding Borrower’s financial
condition. Guarantor agrees to keep adequately informed from such means of any
facts, events, or circumstances which might in any way affect Guarantor’s risks
under this Guaranty, and Guarantor further agrees that, absent a request for
information, Lender shall have no obligation to disclose to Guarantor any
information or documents acquired by Lender in the course of its relationship
with Borrower.

 

GUARANTOR’S FINANCIAL STATEMENTS. Guarantor agrees to furnish Lender with the
following:

 

Annual Statements. As soon as available, but in no event later than
one-hundred-twenty (120) days after the end of each fiscal year, Guarantor’s
balance sheet and income statement for the year ended, prepared by Guarantor.

 

Tax Returns. As soon as available, but in no event later than thirty (30) days
after the applicable filing date for the tax reporting period ended, Federal and
other governmental tax returns, prepared by a certified public accountant
satisfactory to Lender.

 

All financial reports required to be provided under this Guaranty shall be
prepared in accordance with GAAP, applied on a consistent basis, and certified
by Guarantor as being true and correct.

 

GUARANTOR’S WAIVERS. Except as prohibited by applicable law, Guarantor waives
any right to require Lender (A) to continue lending money or to extend other
credit to Borrower; (B) to make any presentment, protest, demand, or notice of
any kind, including notice of any nonpayment of the Indebtedness or of any
nonpayment related to any collateral, or notice of any action or nonaction on
the part of Borrower, Lender, any surety, endorser, or other guarantor in
connection with the Indebtedness or in connection with the creation of new or
additional loans or obligations; (C) to resort for payment or to proceed
directly or at once against any person, including Borrower or any other
guarantor; (D) to proceed directly against or exhaust any collateral held by
Lender from Borrower, any other guarantor, or any other person; (E) to give
notice of the terms, time, and place of any public or private sale of personal
property security held by Lender from Borrower or to comply with any other
applicable provisions of the Uniform Commercial Code; (F) to pursue any other
remedy within Lender’s power; or (G) to commit any act or omission of any kind,
or at any time, with respect to any matter whatsoever.

 

In addition to the waivers set forth herein, if now or hereafter Borrower is or
shall become insolvent and the Indebtedness shall not at all times until paid be
fully secured by collateral pledged by Borrower, Guarantor hereby forever waives
and gives up in favor of Lender and Borrower, and Lender’s and Borrower’s
respective successors, any claim or right to payment Guarantor may now have or
hereafter have or acquire against Borrower, by subrogation or otherwise, so that
at no time shall Guarantor be or become a “creditor” of Borrower within the
meaning of 11 U.S.C. section 547(b), or any successor provision of the Federal
bankruptcy laws.

 

Guarantor also waives any and all rights or defenses arising by reason of (1)
any election of remedies by Lender which destroys or otherwise adversely affects
Guarantor’s subrogation rights or Guarantor’s rights to proceed against Borrower
for reimbursement, including without limitation, any loss of rights Guarantor
may suffer by reason of any law limiting, qualifying, or discharging the
Indebtedness; (2) any disability or other defense of Borrower, of any other
guarantor, or of any other person, or by reason of the cessation of Borrower’s
liability from any cause whatsoever, other than payment in full in legal tender,
of the Indebtedness; (3) any right to claim discharge of the Indebtedness on the
basis of unjustified impairment of any Collateral for the Indebtedness; or (4)
any statute of limitations, if at any time any action or suit brought by Lender
against Guarantor is commenced,

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COMMERCIAL GUARANTY

(Continued)

 

Loan No: 220583814

 

there is outstanding Indebtedness of Borrower to Lender which is not barred by
any applicable statute of limitations. Guarantor acknowledges and agrees that
Guarantor’s obligations under this Guaranty shall apply to and continue with
respect to any amount paid to Lender which is subsequently recovered from Lender
for any reason whatsoever (including without limitation as a result of
bankruptcy, insolvency or fraudulent conveyance proceeding), notwithstanding the
fact that all or a part of the Indebtedness may have been previously paid, or
this Guaranty may have been terminated, or both.

 

Guarantor further waives and agrees not to assert or claim at any time any
deductions to the amount guaranteed under this Guaranty for any claim of setoff,
counterclaim, counter demand, recoupment or similar right, whether such claim,
demand or right may be asserted by the Borrower, the Guarantor, or both.

 

Guarantor’s Understanding With Respect To Waivers. Guarantor warrants and agrees
that each of the waivers set forth above is made with Guarantor’s full knowledge
of its significance and consequences and that, under the circumstances, the
waivers are reasonable and not contrary to public policy or law. If any such
waiver is determined to be contrary to any applicable law or public policy, such
waiver shall be effective only to the extent permitted by law or public policy.

 

Right of Setoff. To the extent permitted by applicable law, Lender reserves a
right of setoff in all Guarantor’s accounts with Lender (whether checking,
savings, or some other account). This includes all accounts Guarantor holds
jointly with someone else and all accounts Guarantor may open in the future.
However, this does not include any IRA or Keogh accounts, or any trust accounts
for which setoff would be prohibited by law. Guarantor authorizes Lender, to the
extent permitted by applicable law, to hold these funds if there is a default,
and Lender may apply the funds in these accounts to pay what Guarantor owes
under the terms of this Guaranty.

 

Subordination of Borrower’s Debts to Guarantor. Guarantor agrees that the
Indebtedness of Borrower to Lender, whether now existing or hereafter created,
shall be superior to any claim that Guarantor may now have or hereafter acquire
against Borrower, whether or not Borrower becomes insolvent. Guarantor hereby
expressly subordinates any claim Guarantor may have against Borrower, upon any
account whatsoever, to any claim that Lender may now or hereafter have against
Borrower. In the event of insolvency and consequent liquidation of the assets of
Borrower, through bankruptcy, by an assignment for the benefit of creditors, by
voluntary liquidation, or otherwise, the assets of Borrower applicable to the
payment of the claims of both Lender and Guarantor shall be paid to Lender and
shall be first applied by Lender to the Indebtedness of Borrower to Lender.
Guarantor does hereby assign to Lender all claims which it may have or acquire
against Borrower or against any assignee or trustee in bankruptcy of Borrower;
provided however, that such assignment shall be effective only for the purpose
of assuring to Lender full payment in legal tender of the Indebtedness. If
Lender so requests, any notes or credit agreements now or hereafter evidencing
any debts or obligations of Borrower to Guarantor shall be marked with a legend
that the same are subject to this Guaranty and shall be delivered to Lender.
Guarantor agrees, and Lender is hereby authorized, in the name of Guarantor,
from time to time to file financing statements and continuation statements and
to execute documents and to take such other actions as Lender deems necessary or
appropriate to perfect, preserve and enforce its rights under this Guaranty.

 

CONFESSED JUDGMENT. UPON THE OCCURRENCE OF A DEFAULT ON THE INDEBTEDNESS,
GUARANTOR HEREBY AUTHORIZES ANY ATTORNEY DESIGNATED BY LENDER OR ANY CLERK OF
ANY COURT OF RECORD TO APPEAR FOR GUARANTOR IN ANY COURT OF RECORD AND CONFESS
JUDGMENT WITHOUT PRIOR HEARING AGAINST GUARANTOR IN FAVOR OF LENDER FOR, AND IN
THE AMOUNT OF, THE UNPAID BALANCE OF THE PRINCIPAL AMOUNT OF THIS GUARANTY, ALL
INTEREST ACCRUED AND UNPAID THEREON, ALL OTHER AMOUNTS PAYABLE BY GUARANTOR TO
LENDER UNDER THE TERMS OF THIS GUARANTY OR ANY OTHER AGREEMENT, DOCUMENTS,
INSTRUMENT EVIDENCING, SECURING OR GUARANTYING THE OBLIGATIONS EVIDENCED BY THIS
GUARANTY, COSTS OF SUIT, AND ATTORNEYS’ FEES OF FIFTEEN PERCENT (15%) OF THE
UNPAID BALANCE OF THE PRINCIPAL AMOUNT OF THIS GUARANTY AND INTEREST THEN DUE
HEREUNDER.

 

Guarantor hereby releases, to the extent permitted by applicable law, all errors
and all rights of exemption, appeal, stay of execution, inquisition, and other
rights to which Borrower may otherwise be entitled under the laws of the United
States or of any state or possession of the United States now in force and which
may hereafter be enacted. The authority and power to appear for and enter
judgment against Guarantor shall not be exhausted by one or more exercises
thereof or by any imperfect exercise thereof and shall not be extinguished by
any judgment entered pursuant thereto. Such authority may be exercised on one or
more occasions or from time to time in the same or different jurisdictions as
often as Lender shall deem necessary or desirable, for all of which this
Guaranty shall be a sufficient warrant.

 

Miscellaneous Provisions. The following miscellaneous provisions are a part of
this Guaranty:

 

Amendments. This Guaranty, together with any Related Documents, constitutes the
entire understanding and agreement of the parties as to the matters set forth in
this Guaranty. No alteration of or amendment to this Guaranty 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.

 

Attorneys’ Fees; Expenses. Guarantor agrees that if Lender hires an attorney to
help enforce this Guaranty, Guarantor will pay, subject to any limits under
applicable law, Lender’s attorneys’ fees and all of Lender’s other collection
expenses, whether or not there is a lawsuit and including without limitation
additional legal expenses for bankruptcy proceedings.

 

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

 

Governing Law. This Guaranty will be governed by, construed and enforced in
accordance with federal law and the laws of the State of Maryland. This Guaranty
has been accepted by Lender in the State of Maryland.

 

Integration. Guarantor further agrees that Guarantor has read and fully
understands the terms of this Guaranty; Guarantor has had the opportunity to be
advised by Guarantor’s attorney with respect to this Guaranty; the Guaranty
fully reflects Guarantor’s intentions and parol evidence is not required to
interpret the terms of this Guaranty. Guarantor hereby indemnifies and holds
Lender harmless from all losses, claims, damages, and costs (including Lender’s
attorneys’ fees) suffered or incurred by Lender as a result of any breach by
Guarantor of the warranties, representations and agreements of this paragraph.

 

Interpretation. In all cases where there is more than one Borrower or Guarantor,
then all words used in this Guaranty in the singular shall be deemed to have
been used in the plural where the context and construction so require; and where
there is more than one Borrower named in this Guaranty or when this Guaranty is
executed by more than one Guarantor, the words “Borrower” and “Guarantor”
respectively shall mean all and any one or more of them. If a court finds that
any provision of this Guaranty is not valid or should not be enforced, that fact
by itself will not mean that the rest of this Guaranty will not be valid or
enforced. Therefore, a court will enforce the rest of the provisions of this
Guaranty even if a provision of this Guaranty may be found to be invalid or
unenforceable. If any one or more of Borrower or Guarantor are corporations,
partnerships, limited liability companies, or similar entities, it is not
necessary for Lender to inquire into the powers of Borrower or Guarantor or of
the officers, directors, partners, managers, or other agents acting or
purporting to act on their behalf, and any indebtedness made or created in
reliance upon the professed exercise of such powers shall be guaranteed under
this Guaranty.

 

JURY WAIVER. LENDER AND BORROWER AND GUARANTOR EACH HEREBY WAIVE TRIAL BY JURY
IN ANY ACTION OR PROCEEDING TO WHICH LENDER OR BORROWER OR GUARANTOR MAY BE
PARTIES, ARISING OUT OF, OR IN ANY WAY PERTAINING TO, THIS GUARANTY. IT IS
AGREED THAT THIS WAIVER CONSTITUTES A WAIVER OF TRIAL BY JURY OF ALL CLAIMS
AGAINST ALL PARTIES TO SUCH ACTIONS OR PROCEEDINGS. THIS WAIVER IS KNOWINGLY,
WILLINGLY AND VOLUNTARILY MADE BY LENDER AND BORROWER AND GUARANTOR, AND LENDER
AND BORROWER AND GUARANTOR EACH HEREBY REPRESENT THAT NO REPRESENTATIONS OF FACT
OR OPINION HAVE BEEN MADE BY ANY INDIVIDUAL TO INDUCE THIS WAIVER OF TRIAL BY
JURY OR TO IN ANY WAY MODIFY OR NULLIFY ITS EFFECT. BORROWER AND GUARANTOR EACH
FURTHER REPRESENT THAT EACH HAS BEEN REPRESENTED IN THE SIGNING OF THIS GUARANTY
AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL, SELECTED OF
EACH’S OWN FREE WILL, AND THAT EACH HAS HAD THE OPPORTUNITY TO DISCUSS THIS
WAIVER WITH COUNSEL.

 

Notices. Any notice required to be given under this Guaranty shall be given in
writing, and shall be effective when actually delivered, if hand delivered, when
actually received by telefacsimile (unless otherwise required by law), when
deposited with a nationally recognized overnight courier, or, if mailed, when
deposited in the United States mail, as first class, certified or registered
mail postage prepaid, directed to the addresses shown near the beginning of this
Guaranty. Any party may change its address for notices under this Guaranty by
giving formal written notice to the other parties, specifying that the purpose
of the notice is to change the party’s address. For notice purposes, Guarantor
agrees to keep Lender informed at all times of Guarantor’s current address.
Unless otherwise provided or required by law, if there is more than one
Guarantor, any notice given by Lender to any Guarantor is deemed to be notice
given to all Guarantors.

 

No Waiver by Lender. Lender shall not be deemed to have waived any rights under
this Guaranty 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 Guaranty 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 Guaranty. No prior waiver by Lender, nor any course of dealing between
Lender and Guarantor, shall constitute a waiver of any of Lender’s rights or of
any of Guarantor’s obligations as to any future transactions. Whenever the
consent of Lender is required under this Guaranty, the granting of such consent
by Lender in any instance shall not constitute continuing consent to subsequent
instances where such consent is required and in all cases such consent may be
granted or withheld in the sole discretion of Lender.

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COMMERCIAL GUARANTY

(Continued)

 

Loan No: 220583814   Page 3

 

Successors and Assigns. Subject to any limitations stated in this Guaranty on
transfer of Guarantor’s interest, this Guaranty shall be binding upon and inure
to the benefit of the parties, their heirs, personal representatives, successors
and assigns.

 

Definitions. The following capitalized words and terms shall have the following
meanings when used in this Guaranty. Unless specifically stated to the contrary,
all references to dollar amounts shall mean amounts in lawful money of the
United States of America. Words and terms used in the singular shall include the
plural, and the plural shall include the singular, as the context may require.
Words and terms not otherwise defined in this Guaranty shall have the meanings
attributed to such terms in the Uniform Commercial Code:

 

Borrower. The word “Borrower” means Avatech Solutions Subsidiary, Inc. and
includes all co-signers and co-makers signing the Note.

 

GAAP. The word “GAAP” means generally accepted accounting principles.

 

Guarantor. The word “Guarantor” means each and every person or entity signing
this Guaranty, including without limitation William James Hindman.

 

Guaranty. The word “Guaranty” means the guaranty from Guarantor to Lender,
including without limitation a guaranty of all or part of the Note.

 

Indebtedness. The word “Indebtedness” means Borrower’s indebtedness to Lender as
more particularly described in this Guaranty.

 

Lender. The word “Lender” means K Bank, its successors and assigns.

 

Note. The word “Note” means the promissory note dated October 28, 2004, in the
original principal amount of $700,000.00 from Borrower to Lender, together with
all modifications of and renewals, replacements, and substitutions for the
promissory note or agreement.

 

Related Documents. The words “Related Documents” mean all promissory notes,
credit agreements, loan agreements, environmental agreements, guaranties,
security agreements, mortgages, deeds of trust, security deeds, collateral
mortgages, and all other instruments, agreements and documents, whether now or
hereafter existing, executed in connection with the indebtedness.

 

EACH UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS
GUARANTY AND AGREES TO ITS TERMS. IN ADDITION, EACH GUARANTOR UNDERSTANDS THAT
THIS GUARANTY IS EFFECTIVE UPON GUARANTOR’S EXECUTION AND DELIVERY OF THIS
GUARANTY TO LENDER AND THAT THE GUARANTY WILL CONTINUE UNTIL TERMINATED IN THE
MANNER SET FORTH IN THE SECTION TITLED “DURATION OF GUARANTY”. NO FORMAL
ACCEPTANCE BY LENDER IS NECESSARY TO MAKE THIS GUARANTY EFFECTIVE. THIS GUARANTY
IS DATED OCTOBER 28, 2004.

 

THIS GUARANTY IS GIVEN UNDER SEAL AND IT IS INTENDED THAT THIS GUARANTY IS AND
SHALL CONSTITUTE AND HAVE THE EFFECT OF A SEALED INSTRUMENT ACCORDING TO LAW.

 

GUARANTOR:

 

William James Hindman

 

LASER PRO Lending, Ver. 5.24.00.003 Copr. Harland Financial Solutions, Inc.
1997, 2004. All Rights Reserved. - MD L:\CFI\LPL\E20.FC TR-701 PR-LOC