Exhibit 10.12



K BANK



PROMISSORY NOTE



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|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------- |  | ------------------- |  | ----------------- |  | ----------- |  | ------- |  | ---------- |  | --------
|Principal $700,000.00                                                                                                                                                                                                        |  | Loan Date 10-28-2004 |  | Maturity 12-15-2004 |  | Loan No 220583814 |  | Call / Coll |  | Account |  | Officer PK |  | Initials
|                                                                                                                                                                                                                            
|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. |  | Lender: |  | K Bank                
|          |  | 10715 Red Run Blvd, Ste 101        |  |         |  | 7F GWYNNS MILL COURT  
|          |  | Owings Mills, MD 21117             |  |         |  | OWINGS MILLS, MD 21117



|                              |  |                      |  |                               
|----------------------------- |  | -------------------- |  | ------------------------------
|Principal Amount: $700,000.00 |  | Initial Rate: 7.500% |  | Date of Note: October 28, 2004



PROMISE TO PAY. Avatech
Solutions Subsidiary, Inc. (Borrower) promises to pay to K Bank (Lender), or order, in lawful money of the United States of America, the principal amount of Seven Hundred Thousand & 00/100 Dollars ($700,000.00) or so much
as may be outstanding, together with interest on the unpaid outstanding principal balance of each advance. Interest shall be calculated from the date of each advance until repayment of each advance.



PAYMENT. Borrower will pay this loan in one payment of all outstanding principal plus
all accrued unpaid interest on December 15, 2004. Unless otherwise agreed or required by applicable law, payments will be applied first to any accrued unpaid interest; then to principal; then to any unpaid collection costs; and then to any late
charges. The annual interest rate for this Note is computed on a 365/360 basis; that is, by applying the ratio of the annual interest rate over a year of 360 days, multiplied by the outstanding principal balance, multiplied by the actual number of
days the principal balance is outstanding. Borrower will pay Lender at Lenders address shown above or at such other place as Lender may designate in writing.



VARIABLE INTEREST RATE. The interest rate on this Note is subject to change from time to time based on changes in an independent
index which is the Wall Street Prime rate (the Index). The Index is not necessarily the lowest rate charged by Lender on its loans. If the Index becomes unavailable during the term of this loan, Lender may designate a substitute index
after notice to Borrower. Lender will tell Borrower the current Index rate upon Borrowers request. The interest rate change will not occur more often than each day. Borrower understands that Lender may make loans based on other rates as well.
The Index currently is 4.750% per annum. The Interest rate to be applied to the unpaid principal balance of this Note will be at a rate of 2.000 percentage points over the Index, adjusted if necessary for any minimum and maximum rate limitations
described below, resulting in an initial rate of 7.500% per annum. Notwithstanding the foregoing, the variable interest rate or rates provided for in this Note will be subject to the following minimum and maximum rates. NOTICE: Under no
circumstances will the interest rate on this Note be less than 7.500% per annum or more than the maximum rate allowed by applicable law.



PREPAYMENT. Borrower may pay without penalty all or a portion of the amount owed earlier than it is due. Early payments will not, unless agreed to by Lender in
writing, relieve Borrower of Borrowers obligation to continue to make payments. Rather, early payments will reduce the principal balance due. Borrower agrees not to send Lender payments marked paid in full, without
recourse, or similar language. If Borrower sends such a payment, Lender may accept it without losing any of Lenders rights under this Note, and Borrower will remain obligated to pay any further amount owed to Lender. All written
communications concerning disputed amounts, including any check or other payment instrument that indicates that the payment constitutes payment in full of the amount owed or that is tendered with other conditions or limitations or as
full satisfaction of a disputed amount must be mailed or delivered to: K Bank, 7F GWYNNS MILL COURT, OWINGS MILLS, MD 21117.



LATE CHARGE. If a payment is 10 days or more late, Borrower will be charged 5.000% of the regularly scheduled payment or $100.00, whichever is greater.



INTEREST AFTER DEFAULT. Upon default, including failure to pay upon final maturity,
at Lenders option, and if permitted by applicable law, Lender may add any unpaid accrued interest to principal and such sum will bear interest therefrom until paid at the rate provided in this Note (including any increased rate). Upon default,
Lender, at its option, may, if permitted under applicable law, increase the variable interest rate on this Note to 4.000 percentage points over the Index. The interest rate will not exceed the maximum rate permitted by applicable law.



DEFAULT.Each of the following shall constitute an event of default (Event of
Default) under this Note:



Payment Default.Borrower fails to make any payment when due under this Note.



Other Defaults. Borrower fails to comply with or to perform any other term, obligation, covenant or condition contained in this Note or in any of the related documents or to comply with or to perform any term, obligation, covenant or
condition contained in any other agreement between Lender and Borrower.



Default in Favor of Third Parties. Borrower or any Grantor defaults under any loan, extension of credit, security agreement, purchase or sales agreement, or any other agreement, in favor of any other creditor
or person that may materially affect any of Borrowers property or Borrowers ability to repay this Note or perform Borrowers obligations under this Note or any of the related documents.



False Statements. Any warranty, representation or statement made or
furnished to Lender by Borrower or on Borrowers behalf under this Note or the related documents is false or misleading in any material respect, either now or at the time made or furnished or becomes false or misleading at any time thereafter.



Insolvency. The dissolution or termination of
Borrowers existence as a going business, or a trustee or receiver is appointed for Borrower or for all or a substantial portion of the assets of Borrower, or Borrower makes a general assignment for the benefit of Borrowers creditors, or
Borrower files for bankruptcy, or an involuntary bankruptcy petition is filed against Borrower and such involuntary petition remains undismissed for sixty (60) days.



Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial
proceeding, self-help, repossession or any other method, by any creditor of Borrower or by any governmental agency against any collateral securing the loan. This includes a garnishment of any of Borrowers accounts, including deposit accounts,
with Lender. However, this Event of Default shall not apply if there is a good faith dispute by Borrower as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if Borrower gives Lender
written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion, as being an adequate reserve orbond for the dispute.



Events Affecting Guarantor.
Any of the preceding events occurs with respect to any Guarantor of any of the indebtedness or any Guarantor dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any guaranty of the indebtedness evidenced by this
Note.



Change In Ownership. Any change in ownership of
twenty-five percent (25%) or more of the common stock of Borrower.



Adverse Change. A material adverse change occurs in Borrowers financial condition, or Lender believes the prospect of payment or performance of this Note is impaired.



LENDERS RIGHTS. Upon default, Lender may declare the entire unpaid principal
balance on this Note and all accrued unpaid interest, together with all other applicable fees, costs and charges, if any, immediately due and payable, and then Borrower will pay that amount.



ATTORNEYS FEES; EXPENSES. Subject to any limits under applicable law, upon
default, Borrower agrees to pay Lenders attorneys fees and all of Lenders other collection expenses, whether or not there is a lawsuit, including without limitation legal expenses for bankruptcy proceedings.



JURY WAIVER. LENDER AND BORROWER EACH HEREBY WAIVE TRIAL BY JURY IN ANY ACTION OR
PROCEEDING TO WHICH LENDER OR BORROWER MAY BE PARTIES, ARISING OUT OF, OR IN ANY WAY PERTAINING TO, THIS NOTE. 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 LENDER AND BORROWER 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 FURTHER REPRESENTS THAT BORROWER HAS BEEN REPRESENTED IN THE SIGNING OF THIS NOTE AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL SELECTED OF BORROWERS OWN FREE WILL, AND THAT BORROWER
HAS HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL.



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



CONFESSED JUDGMENT. UPON THE OCCURRENCE OF A DEFAULT, BORROWER HEREBY AUTHORIZES
ANY ATTORNEY DESIGNATED BY LENDER OR ANY CLERK OF ANY COURT OF RECORD TO APPEAR FOR BORROWER IN ANY COURT OF RECORD AND CONFESS JUDGMENT WITHOUT PRIOR HEARING AGAINST BORROWER IN FAVOR OF LENDER FOR, AND IN THE AMOUNT OF, THE UNPAID BALANCE OF THE
PRINCIPAL AMOUNT OF THIS NOTE, ALL INTEREST ACCRUED AND UNPAID THEREON, ALL OTHER AMOUNTS PAYABLE BY BORROWER TO LENDER UNDER THE TERMS OF THIS NOTE OR ANY OTHER AGREEMENT, DOCUMENTS, INSTRUMENT EVIDENCING, SECURING OR



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|------------------ |  | --------------- |  | ------
|                   |  | PROMISSORY NOTE |  |       
|Loan No: 220583814 |  | (Continued)     |  | Page 2



GUARANTYING THE OBLIGATIONS
EVIDENCED BY THIS NOTE, COSTS OF SUIT, AND ATTORNEYS FEES OF FIFTEEN PERCENT (15%) OF THE UNPAID BALANCE OF THE PRINCIPAL AMOUNT OF THIS NOTE AND INTEREST THEN DUE HEREUNDER.



Borrower 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 Borrower 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 Note shall be a sufficient warrant.



DISHONORED ITEM FEE. Borrower will pay a fee to Lender of $28.00 if Borrower makes a payment on Borrowers loan and the check with
which Borrower pays is dishonored on the second presentment.



RIGHT OF
SETOFF. To the extent permitted by applicable law, Lender reserves a right of setoff in all Borrowers accounts with Lender (whether checking savings, or some other account). This includes all accounts Borrower holds jointly with someone
else and all accounts Borrower 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. Borrower authorizes Lender, to the extent permitted by applicable
law, to charge or setoff all sums owing on the indebtedness against any and all such accounts, and, at Lenders option, to administratively freeze all such accounts to allow Lender to protect Lenders charge and setoff rights provided in
this paragraph.



LINE OF CREDIT. This Note evidences a revolving line of
credit. Advances under this Note may be requested only in writing by Borrower or as provided in this paragraph. All communications, instructions, or directions by telephone or otherwise to Lender are to be directed to Lenders office shown
above. The following persons currently are authorized to request advances and authorize payments under the line of credit until Lender receives from Borrower, at Lenders address shown above, written notice of revocation of their authority:
Christopher D. Olander, Exec. V.P. of Avatech Solutions Subsidiary, Inc.; Donald R. Walsh, Chief Exec Officer; Beth O. Maclaughlin, V.P. Fiance; Karen L. Strayer, Tax and Compliance Mgr.; and Catherine Dodson, Controller. Borrower agrees to
be liable for all sums either: (A) advanced in accordance with the instructions of an authorized person or (B) credited to any of Borrowers accounts with Lender. The unpaid principal balance owing on this Note at any time may be evidenced by
endorsements on this Note or by Lenders internal records, including daily computer print-outs. Lender will have no obligation to advance funds under this Note if: (A) Borrower or any guarantor is in default under the terms of this Note or any
agreement that Borrower or any guarantor has with Lender, including any agreement made in connection with the signing of this Note; (B) Borrower or any guarantor ceases doing business or is insolvent; (C) any guarantor seeks, claims or otherwise
attempts to limit, modify or revoke such guarantors guarantee of this Note or any other loan with Lender; or (D) Borrower has applied funds provided pursuant to this Note for purposes other than those authorized by Lender.



CONSENT TO JURISDICTION. Borrower irrevocably submits to the jurisdiction of any state
or federal court sitting in the State of Maryland over any suit, action, or proceeding arising out of or relating to this Note. Borrower irrevocably waives, to the fullest extent permitted by law, any objection that Borrower may now or hereafter
have to the laying of venue of any such suit, action, or proceeding brought in any such court and any claim that any such suit, action, or proceeding brought in any such court has been brought in an inconvenient forum. Final judgment in any such
suit, action, or proceeding brought in any such court shall be conclusive and binding upon Borrower and may be enforced in any court in which Borrower is subject to jurisdiction by a suit upon such judgment provided that service of process is
effected upon Borrower as provided in this Note or as otherwise permitted by applicable law.



SUCCESSOR INTERESTS. The terms of this Note shall be binding upon Borrower, and upon Borrowers heirs, personal representatives, successors and assigns, and shall inure to the benefit of Lender and its
successors and assigns.



NOTIFY US OF INACCURATE INFORMATION WE REPORT TO
CONSUMER REPORTING AGENCIES. Please notify us if we report any inaccurate information about your account(s) to a consumer reporting agency. Your written notice describing the specific inaccuracy(ies) should be sent to us at the following
address: K Bank 7F GWYNNS MILL COURT OWINGS MILLS, MD 21117



GENERAL
PROVISIONS.If any part of this Note cannot be enforced, this fact will not affect the rest of the Note. Borrower does not agree or intend to pay, and Lender does not agree or intend to contract for, charge, collect, take, reserve or receive
(collectively referred to herein as charge or collect), any amount in the nature of interest or in the nature of a fee for this loan, which would in any way or event (including demand, prepayment, or acceleration) cause Lender to charge
or collect more for this loan than the maximum Lender would be permitted to charge or collect by federal law or the law of the State of Maryland (as applicable). Any such excess interest or unauthorized fee shall, instead of anything stated to the
contrary, be applied first to reduce the principal balance of this loan, and when the principal has been paid in full, be refunded to Borrower. Lender may delay or forgo enforcing any of its rights or remedies under this Note without losing them.
Borrower and any other person who signs, guarantees or endorses this Note, to the extent allowed by law, waive presentment, demand for payment, and notice of dishonor. Upon any change in the terms of this Note, and unless otherwise expressly stated
in writing, no party who signs this Note, whether as maker, guarantor, accommodation maker or endorser, shall be released from liability. All such parties agree that Lender may renew or extend (repeatedly and for any length of time) this loan or
release any party or guarantor or collateral; or impair, fail to realize upon or perfect Lenders security interest in the collateral; and take any other action deemed necessary by Lender without the consent of or notice to anyone. All such
parties also agree that Lender may modify this loan without the consent of or notice to anyone other than the party with whom the modification is made.



APPLICABLE LENDING LAW. This loan is being made under the terms and provisions of Subtitle 9 of Title 12 of the Maryland Commercial Law Article.



PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE,
INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. BORROWER AGREES TO THE TERMS OF THE NOTE.



BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE.



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



BORROWER:



|                                   |  |                                                     |  |       
|---------------------------------- |  | --------------------------------------------------- |  | ------
|AVATECH SOLUTIONS SUBSIDIARY, INC.
|                                   |  |                                                    
|By:                                |  | /s/ Christopher D. Olander                          |  | (Seal)
|                                   |  | Christopher D. Olander, Executive Vice President of |  |       
|                                   |  | Avatech Solutions Subsidiary, Inc.                  |  |       



LASER PRO Landing.
Ver 6.24.00.003 Copr. Harland Financial Solutions. Inc. 1997, 2004. All Rlghts Reserved. - MD L:\CFI\LPLD20.FC TR-701 PR-LOC