EXHIBIT 10.16

 

Writer’s Direct Dial

410-581-9095 x 261

 

December 15, 2004

 

Dassault Systems Corp.

 

RE: Amendment to Subordination Agreement

 

Gentlemen:

 

As you are aware, on September 11, 2003, K Bank, formerly Key Bank and Trust
(the “Bank”), closed on a $2,000,000 Revolving Line of Credit (“Revolver”) to
Avatech Solutions Subsidiary, Inc. (“Avatech”). As part of this closing, a
Subordination Agreement dated September 11, 2003 (the “Subordination Agreement”)
between the Bank, Avatech, and Dassault Systemes Corp. (“Dassault”) was agreed
to which among other things included a provision whereby outstandings under
Avatech’s Revolver could not exceed $2,000,000. As you are also aware, the Bank
has since increased its Revolver to Avatech to $3,000,000 and Dassault has
previously consented in writing to a temporary increase in the $2,000,000 senior
debt limit as part of the Subordination Agreement.

 

As such, the Bank feels that this letter agreement is necessary to formalize
this matter and the execution of this letter by all parties is a contingency of
the Bank’s approval to allow Avatech to access advances under the Revolver,
subject to the terms and conditions of this facility, of up to $3,000,000
through February 15, 2005. As such, by signing below Dassault acknowledges its
consent to the Bank allowing Avatech to access advances under the Revolver,
subject to the terms and conditions of this facility, of up to $3,000,000
through February 15, 2005 and acknowledges and agrees that the limit on the
principal amount of the senior loan in the Subordination Agreement shall be
increased from $2,000,000 to $3,000,000 through February 15, 2005.

 

Unless specifically outlined in this letter, all terms and conditions of the
Subordination Agreement and all terms and conditions of all loan documents
between the Bank, Avatech, and Avatech Solutions, Inc. shall remain in full
force and effect. If you have any questions, please do not hesitate to contact
me.

 

Sincerely,

 

 

Patrick E. Kilpatrick

Vice President

 

ACKNOWLEDGED AND ACCEPTED this      day of December, 2004, by

 

K Bank

 

By:

 

 

 

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(seal)

 

Name:  

 

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    Title:  

 

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    Date:  

 

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Dassault Systemes Corp.

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Thibault de TERSANT     Executive Vice President & CFO     By:  

/s/ Thibault de Tersant

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    Title:   EVP and Chief Financial Officer     Date:   December 16th, 2004    
Avatech Solutions Subsidiary, Inc.     By:  

/s/ Christopher Olander

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  (seal) Name:   Christopher Olander     Title:   Exec. Vice President     Date:
  12/16/04     Avatech Solutions, Inc.     By:  

/s/ Christopher Olander

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  (seal) Name:   Christopher Olander     Title:   Exec. Vice President     Date:
  12/16/04