Exhibit 10.23

OMNIBUS WAIVER AND TERMINATION AGREEMENT

August 17, 2010

Reference is made to (i) the Common Stock and Warrant Purchase Agreement, dated
January 29, 2007, by and among Avatech Solutions, Inc. (the “Company”) and the
purchasers named therein (the “Purchasers”) (the “Stock Purchase Agreement”),
(ii) the Investor Rights Agreement, dated January 29, 2007, among the Company
and the Purchasers (the “Rights Agreement,” and together with the Stock Purchase
Agreement the “Financing Agreements”); and (iii) the warrants to purchase the
Company’s common stock, $0.01 par value per share (the “Common Stock”) sold to
the Purchasers under the Stock Purchase Agreement (the “Warrants”).

This Omnibus Waiver and Termination Agreement (this “Omnibus Termination”) is
made and entered into effective as of August 17, 2010 by and among the Company
and the Purchasers.

RECITALS

WHEREAS, in connection with and as a condition to the completion of the
acquisition by the Company of Rand Worldwide, Inc. (“RWW”) in a reverse merger
transaction, pursuant to which the Company will issue shares of its Common Stock
(the “Merger Shares”) to the sole stockholder of RWW (the “Strategic
Transaction”), the Company and the Purchasers wish to terminate the Financing
Agreements and to waive all rights arising thereunder prior to the date hereof
(except for the rights arising under the Warrants, which are preserved as
amended and restated as of the date hereof); and

WHEREAS, in connection with the Strategic Transaction, pursuant to a
Registration Rights Agreement with the sole stockholder of RWW, the Company will
agree to file a registration statement with the Securities and Exchange
Commission within 75 days of the consummation of the Strategic Transaction to
register the Merger Shares for resale (the “Registration Statement”); and

WHEREAS, in connection with the transactions contemplated herein, the Company
and each of the Purchasers have agreed to amend and restate the Warrants; and

WHEREAS, in consideration of the terminations, waivers and amendments described
above, the Company wishes to issue to the Purchasers certain shares of its
Common Stock; and

WHEREAS, the undersigned represent all of the parties to the Financing
Agreements; and

NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein, the parties hereto agree as follows:

1. Waiver under Financing Agreements. Each of the undersigned Purchasers hereby
waives any rights, including, without limitation, any of the rights set forth in
Articles V and VII of the

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Stock Purchase Agreement, arising as a result of or in connection with (i) any
failures by the Company to comply with any of the provisions of either of the
Financing Agreements prior to the date hereof; or (ii) the Strategic Transaction
or the other transactions contemplated thereby.

2. Termination of Financing Agreements. The Financing Agreements are hereby
terminated, and from and after the date hereof, the Financing Agreements shall
be of no further force and effect, and each of the parties thereto shall be
released and discharged from all duties and obligations thereunder.

3. Issuance of Common Stock. In consideration of the covenants and agreements
set forth in Sections 1 and 2 hereof, the Company hereby agrees to issue to each
Purchaser that number of shares of Common Stock set forth on Schedule I hereto
upon receipt of an investor representation letter from each Purchaser in the
form attached hereto as Exhibit A.

4. Piggy-Back Registration. The Company shall include and register for resale in
the Registration Statement (i) the shares of Common Stock issued to the
Purchasers pursuant to Section 3 hereof and (ii) the Registrable Securities (as
defined in the Rights Agreement); provided, however, that the Company shall not
be required to include and register any of such securities that are eligible for
resale without restriction pursuant to Rule 144 under the Securities Act of
1933, as amended.

5. Miscellaneous. This Omnibus Termination may be executed in two or more
counterparts, and shall be governed by and construed in accordance with the laws
of the State of Delaware and the laws of the United States applicable therein
(without giving effect to any choice or conflict of laws provision or rule that
would cause the application of the laws of any other jurisdiction) and shall be
treated in all respects as a Delaware contract.

[Signature page follows.]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Omnibus Waiver and
Termination Agreement to be duly executed by their respective authorized persons
as of the date first indicated above.

COMPANY:

AVATECH SOLUTIONS, INC.

 

By:

  /s/ Lawrence Rychlak

Name:

  Lawrence Rychlak

Title:

  President and Chief Financial Officer

PURCHASERS:

SIGMA OPPORTUNITY FUND, LLC

By: Sigma Capital Advisors, LLC, as managing member

By:

  /s/ Thom Waye

Name:

  Thom Waye

Title:

  Managing Member

/s/ Garnett Y. Clark, Jr.

Garnett Y. Clark, Jr.

/s/ Robert Post

Robert Post

/s/ George Davis

George Davis

[SIGNATURE PAGE TO OMNIBUS WAIVER AND TERMINATION AGREEMENT – 2007 COMMON STOCK
AND

WARRANT PURCHASE AGREEMENT AND INVESTOR RIGHTS AGREEMENT]

 

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Schedule I

 

Purchaser

 

Number of Shares of Common Stock

Sigma Opportunity Fund, LLC

  186,719

Garnett Y. Clark, Jr.

  3,112

Robert Post

  3,112

George Davis

  12,448

Total:

  205,391

 

I-1

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Exhibit A

August 17, 2010

Avatech Solutions, Inc.

10715 Red Run Boulevard, Suite 101

Owings Mills, Maryland 21117

Attention: Corporate Secretary

Ladies and Gentlemen:

This letter agreement is being furnished to Avatech Solutions, Inc., a Delaware
corporation (the “Company”), in connection with the execution and delivery of
that certain Omnibus Waiver and Termination Agreement of even date herewith (the
“Termination Agreement”) by the undersigned purchasers (each, a “Purchaser” and
collectively, the “Purchasers”).

RECITALS

R.1 Each of the Purchasers purchased shares of common stock of the Company (the
“Common Stock”) pursuant to that certain Common Stock and Warrant Purchase
Agreement, dated as of January 29, 2007 (the “Purchase Agreement”), by and among
the Company and the Purchasers.

R.2 In connection with and as a condition to the completion of the acquisition
by the Company of Rand Worldwide, Inc. (“RWW”) in a reverse merger transaction
pursuant to which the Company will issue shares of its Common Stock to the sole
stockholder of RWW (the “Strategic Transaction”), the Company and the Purchasers
have agreed to terminate the Purchase Agreement and the related Investor Rights
Agreement and to waive all rights arising thereunder prior to the date hereof,
including with respect to the Strategic Transaction, pursuant to the Termination
Agreement.

R.2 The Termination Agreement provides that the Company will issue shares of its
Common Stock (the “Additional Shares”) to the Purchasers in the amounts set
forth in Schedule 1 hereto in consideration for the agreements and covenants
contained therein.

R.3 The Purchasers desire to make certain representations and warranties to the
Company, and to make certain agreements, as a condition to receiving the
Additional Shares.

REPRESENTATIONS, ACKNOWLEDGEMENTS AND COVENANTS

1. Representations and Warranties of the Purchasers. Each Purchaser represents
and warrants to the Corporation that each of its representations and warranties
made in Sections 4.1, 4.3, 4.4, 4.5, 4.6 and 4.7 of the Purchase Agreement is
true, complete and accurate in all material respects as if made on the date
hereof. A copy of these representations and warranties is attached hereto as
Exhibit A.

 

A-1

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2. Acknowledgments. Each Purchaser hereby acknowledges and understands that:

(a)(i) The Additional Shares have not been registered under the Securities Act
of 1933, as amended (the “Act”), or any applicable State securities laws (the
“State Acts”), (ii) the Corporation has not agreed to register the Additional
Shares for distribution in accordance with the provisions of the Act and the
State Acts or agreed to comply with any exemption under the Act and the State
Acts for the transfer of the Shares, and (iii) the Additional Shares may not be
offered or sold in the United States or to U.S. persons unless registered under
the Act, or pursuant to an exemption from the registration requirements of the
Act.

(b) By virtue of certain rules governing the resale of “restricted securities”
(and each Purchaser acknowledges that the Additional Shares are “restricted
securities” within the meaning of the rules and regulations under the Act), each
Purchaser may be required to hold the Additional Shares issued to such Purchaser
(the “Purchaser’s Shares”) for a period of not less than six months before any
sale or other disposition of the Purchaser’s Shares may take place, and even
then such Purchaser may sell or otherwise dispose of the Purchaser’s Shares only
upon the issuance of an opinion of counsel to the Corporation that the
Purchaser’s Shares intended to be sold or disposed of may be sold or disposed of
without registration under the Act or the State Acts.

(c) The Purchaser is solely responsible for compliance with the laws (including,
without limitation, securities laws) of any jurisdiction outside of the United
States and is not relying on the Corporation to comply with such laws.

(d) The Corporation will refuse to register any transfer of all or any portion
of the Purchaser’s Shares unless made pursuant to registration under the Act or
any available exemption from registration under the Act.

3. Covenants. Each Purchaser agrees that it will not take, or cause to be taken,
any action with respect to the Purchaser’s Shares that would cause such
Purchaser to be deemed an “underwriter” as defined in Section 2(11) of the
Securities Act. Without limiting the foregoing, each Purchaser agrees that it
will not sell or otherwise transfer the Purchaser’s Shares unless they are
registered under the Act and the securities acts of any other appropriate
jurisdiction, unless an exemption from such registration is available.

4. Restrictive Legends. The Purchaser’s Shares shall bear the following legend:

“THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED. THESE SHARES MAY NOT BE SOLD, OFFERED FOR
SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO AVATECH SOLUTIONS,
INC. THAT SUCH REGISTRATION IS NOT REQUIRED.”

 

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5. Binding Effect; Successors and Assigns. This terms of this letter shall be
binding upon the Purchasers and their respective successors and permitted
assigns, and will inure to the benefit of the Corporation and its successors and
assigns.

6. Miscellaneous.

(a) In this letter, the singular shall include the plural and the masculine
gender shall include the feminine and neuter and vice versa, as the context
requires.

(b) Each provision of this letter shall be considered separable and if for any
reason any provision or provisions hereof are determined to be invalid or
contrary to applicable law, such invalidity shall not impair the operation of or
affect the remaining portions of this letter.

(c) Paragraph titles are for descriptive purposes only and shall not control or
alter the meaning of this letter as set forth in the text.

(d) Capitalized terms used but not defined herein or in the Schedules and
Exhibits hereto shall have the meanings given such terms in the Purchase
Agreement.

(e) This letter shall be construed in accordance with the laws of the State of
New York without regard to principles of conflict of laws.

[SIGNATURES APPEAR ON NEXT PAGE]

 

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[SIGNATURE PAGE]

 

PURCHASERS:

 

SIGMA OPPORTUNITY FUND, LLC

By:   Sigma Capital Advisors, LLC, as managing member By:     Name:   Thom Waye
Title:   Managing Member   Garnett Y. Clark, Jr.   George Davis   Robert Post

RECEIVED AND ACCEPTED THIS 17th DAY OF AUGUST, 2010.

AVATECH SOLUTIONS, INC.

 

By:     Name:   Lawrence Rychlak Title:   President and Chief Financial Officer

 

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SCHEDULE 1

ADDITIONAL SHARES

 

Purchaser

   Number of Shares of Common Stock

Sigma Opportunity Fund, LLC

   186,719

Garnett Y. Clark, Jr.

   3,112

Robert Post

   3,112

George Davis

   12,448

Total:

   205,391

 

A-5

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EXHIBIT A

REPRESENTATIONS AND WARRANTIES

ARTICLE IV—REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS

Each Purchaser, for itself only, hereby severally and not jointly, represents
and warrants to the Seller as follows:

4.1 Existence and Power. The Purchaser is duly organized, validly existing and
in good standing under the laws of the jurisdiction of such Purchaser’s
organization. The Purchaser has all powers required to carry on such Purchaser’s
business as now conducted.

4.2 [Intentionally Omitted].

4.3 Investment. The Purchaser is acquiring the securities described herein for
its own account and not with a view to, or for sale in connection with, any
distribution thereof, nor with the intention of distributing or reselling the
same, provided, however, that by making the representation herein, the Purchaser
does not agree to hold any of the securities for any minimum or other specific
term and reserves the right to dispose of the securities at any time in
accordance with or pursuant to a registration statement or an exemption under
the Securities Act. The Purchaser is aware that none of the securities has been
registered under the Securities Act or under applicable state securities or blue
sky laws. The Purchaser is an “Accredited Investor” as such term is defined in
Rule 501 of Regulation D, as promulgated under the Securities Act (including
without limitation, if the Purchaser is an employee benefit plan within the
meaning of the Employee Retirement Income Security Act of 1974 and a
self-directed plan, then investment decisions are made solely by persons that
are “Accredited Investors”).

4.4 Reliance on Exemptions. The Purchaser understands that the Shares and
Warrants are being offered and sold to such Purchaser in reliance upon specific
exemptions from the registration requirements of United States federal and state
securities laws and that the Seller is relying upon the truth and accuracy of,
and such Purchaser’s compliance with, the representations, warranties,
agreements, acknowledgments and understandings of such Purchaser set forth
herein in order to determine the availability of such exemptions and the
eligibility of such Purchaser to acquire the securities.

4.5 Experience of the Purchaser. The Purchaser, either alone or together with
its representatives, has such knowledge, sophistication and experience in
business and financial matters so as to be capable of evaluating the merits and
risks of the prospective investment in the Securities, and has so evaluated the
merits and risks of such investment. The Purchaser is able to bear the economic
risk of an investment in the securities and, at the present time, is able to
afford a complete loss of such investment.

4.6 General Solicitation. The Purchaser is not purchasing the Securities as a
result of any advertisement, article, notice or other communication regarding
the securities published in any newspaper, magazine or similar media or
broadcast over television or radio or presented at any seminar or any other
general solicitation or general advertisement.

 

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4.7 Residence. The Purchaser, if a U.S. investor, is a resident of the U.S.
state indicated in the address specified on such Purchaser’s signature page
attached hereto.

 

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