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                                                                   EXHIBIT 10.35

                                  A V A T E C H
                                S O L U T I O N S

                                 August 21, 2003

Henry D. Felton
13001 Dover Road
Reisterstown, MD 21136

     Re: Letter of Employment

Dear Mr. Felton:

     This Letter Agreement contains the terms of your continued employment with
Avatech Solutions, Inc. (together with its affiliates, subsidiaries,
successors-in-interest, and their affiliates and subsidiaries, "Avatech"). This
Letter Agreement is the entire agreement between you and Avatech relating to
your employment, and replaces all other employment or severance agreements
between you and Avatech, including, but not limited to, the Severance Agreement
between you and Avatech dated January 1, 1998. By signing below, you agree to be
bound by the terms and conditions contained in this Letter Agreement, effective
as of the date of your signature.

     In addition to your continued service as the Vice-Chairman of Avatech's
Board of Directors, you agree to perform all reasonable duties assigned to you
by the Board of Directors or one of Avatech's officers on a substantially
full-time basis. The term of your employment under this Letter Agreement shall
be for six (6) years, and may be extended or modified by a written agreement
between you and Avatech.

     In exchange for your services, Avatech will pay you an annual salary and
bonuses determined each year by the Compensation Committee of the Board of
Directors, commensurate with the amount and quality of the services you perform
or are expected to perform, but your annual salary will not, in any year, be
less than two thousand dollars ($2,000) plus the annual amount of the employee
contribution to Avatech's health benefit plans necessary to maintain the maximum
amount of medical coverage available to you through Avatech's health benefit
plans for you and your family. In addition, Avatech will continue to maintain
coverage substantially similar to the existing supplemental health insurance
policy it maintains, covering you for cancer-related expenses. You will be
entitled to perquisites comparable to those that Avatech extends to other
employees with similar responsibilities. Avatech will reimburse you for your
business, travel, lodging, meals, and any other ordinary and necessary business
expenses you incur in the course of your employment duties, in accordance with
Avatech's ordinary expense reimbursement policies.

     You may terminate your employment at any time, effective thirty (30) days
after you give Avatech written notice of your intent to terminate your
employment. Avatech may terminate your employment at any time for Cause (as
defined below), effective immediately on oral or

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Henry D. Felton
Letter Agreement
August 21, 2003
Page 2 of 3

written notice to you from one of Avatech's officers or a member of Avatech's
Board of Directors. For purposes of this Letter Agreement, "Cause" means: (a)
your conviction of, or plea of guilty or nolo contendere to, a crime
constituting a felony or a crime involving moral turpitude, embezzlement or
criminal diversion of funds; (b) your knowing and willful violation of Avatech's
company policies that can reasonably be expected to result in material detriment
to Avatech; or (c) your failure to perform the duties or discharge the
responsibilities of your position to Avatech's material detriment, unless you
cure such failure within fifteen (15) days after you receive written notice of
the failure, or within thirty (30) days, if the failure is such that it cannot
reasonably be cured within fifteen (15) days and you begin and diligently
continue to cure such failure within the fifteen-day period.

     You acknowledge that you have acquired and will acquire confidential
information relating to Avatech which includes, but is not limited to, business
plans, sales and marketing plans, financial information, acquisition prospects,
and "customer" and "supplier" lists (as such terms may relate to Avatech's
business or the systems or other trade secrets or know-how) (collectively
"Confidential Information"), which is a valuable asset of Avatech's business,
and access to or knowledge of which is essential to the performance of your
duties. Accordingly, you will not disclose any Confidential Information at any
time, except in connection with and as reasonably required to perform your
employment duties or your duties or responsibilities as a member of Avatech's
Board of Directors, or unless you are required to do so by applicable law,
subpoena, court order, or other legal process. These restrictions do not apply
to, and the definition of Confidential Information does not include, information
that is in the public domain at the time you disclose such information, unless
the information is in the public domain as a result of your actions. Your
obligation not to disclose any Confidential Information continues for your
lifetime and survives the termination or expiration of this Agreement, your
employment with Avatech, or any current future agreement between you and Avatech
or its successors-in-interest.

     Because of your unique position as an employee of Avatech, you agree that
during the course of your employment and for a period of one (1) year after the
termination of such employment, you will not, without Avatech's prior written
consent: (a) Directly or indirectly, knowingly engage or be interested in (as
owner, partner, shareholder, employee, director, officer, agent, consultant or
otherwise), with or without compensation, any business entity or operation that
engages in the business of selling computer-aided design software or providing
professional, consulting, technical, or training services related to
computer-aided design software within fifty (50) miles of any location where
Avatech maintains a place of business, except that you Employee own up to a five
percent (5%) interest in the publicly-traded securities of a publicly traded
corporation; (b) Employ or retain, or participate in or arrange the employment
or retention of any person who Avatech employed or retained during the term of
Employee's employment with or retention by Avatech under any arrangement or
agreement; or (c) Directly or indirectly solicit any of Avatech's customers or
clients.

     You acknowledge that the provisions of this Letter Agreement are reasonable
and necessary for Avatech's protection and that Avatech will be irrevocably
damaged if these provisions are not specifically enforced. Accordingly, you
agree that, in addition to any other

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Henry D. Felton
Letter Agreement
August 21, 2003
Page 3 of 3

relief or remedies available to Avatech, Avatech is entitled to seek and obtain
an appropriate injunction or other equitable remedy for the purposes of
restraining you from any actual or threatened breach of or otherwise enforcing
these provisions and no bond or security will be required in connection with
such equitable remedy.

     You and Avatech agree that this Letter Agreement shall be construed,
interpreted and enforced as a contract governed by the laws of the State of
Maryland without reference to the rules governing conflict of laws, and
irrevocably submit to personal jurisdiction and venue in the State of Maryland
for the purpose of any suit, action or proceeding arising out of or relating to
this Letter Agreement. The waiver of any breach of this Letter Agreement by
either you or Avatech does not constitute or operate as a waiver of any other
breach of any provision of this Letter Agreement, and any failure to enforce any
provision of this Letter Agreement does not operate as a waiver of any existing
or future right, duty, or obligation arising out of this Letter Agreement. If
any provision of this Letter Agreement is deemed invalid or unenforceable in any
jurisdiction, such provision will be deemed modified and limited in such
jurisdiction to the extent necessary to make it valid and enforceable in such
jurisdiction, and the remainder of this Letter Agreement shall be valid and
enforced to the fullest extent permitted by law.


/s/                                        AVATECH SOLUTIONS, INC.
--------------------------------
Henry D. Felton


                                           By: /s/
                                               ---------------------------------
Date: 8/21/03                                  Donald "Scotty" Walsh,
                                               Chief Executive Officer