Document:

EXHIBIT 10.57

 Exhibit 10.57 
 MODIFICATION AGREEMENT 
 THIS MODIFICATION AGREEMENT (“AGREEMENT”) is made as of
May 30, 2006, by and among AVATECH SOLUTIONS, INC., a Delaware corporation, and AVATECH SOLUTIONS SUBSIDIARY, INC., a Delaware corporation, jointly and severally (collectively, the “BORROWERS”), TECHNICAL LEARNINGWARE COMPANY, INC., a
Delaware corporation (“TLC”), and MERCANTILE-SAFE DEPOSIT AND TRUST COMPANY (“LENDER”). The BORROWERS and TLC are collectively referred to herein as the “OBLIGORS”. 
 RECITALS 
 In accordance with the
terms and conditions set forth in a Loan and Security Agreement dated as of January 27, 2006 between the BORROWERS and the LENDER (“LOAN AGREEMENT”), the LENDER has extended to the BORROWERS a revolving line of credit in the maximum
principal amount outstanding at any one time of Five Million Dollars ($5,000,000.00) (the “LOAN”). Pursuant to the LOAN AGREEMENT, the BORROWERS’ obligations to the LENDER are secured by all of the BORROWERS’ tangible and
intangible assets. 
 Pursuant to a Guaranty Agreement dated as of January 27, 2006 from TLC to the LENDER (“TLC GUARANTY
AGREEMENT”), TLC absolutely, unconditionally, and jointly and severally guaranteed the payment and performance of the BORROWERS’ obligations to the LENDER. Pursuant to a Security Agreements of even date with the TLC GUARANTY AGREEMENT
(“TLC SECURITY AGREEMENT”), the obligations of TLC to the LENDER are secured by all of TLC’s tangible and intangible assets. Pursuant to Guaranty Agreement of even date therewith from W. JAMES HINDMAN (“HINDMAN”) to the
LENDER, HINDMAN guaranteed the BORROWERS’ obligations up to a specified amount set forth in such Guaranty Agreement. 
 The BORROWERS
have requested that the LENDER extend to the BORROWERS a short term bridge loan, and that the LENDER consent to the acquisition by AVATECH SOLUTIONS, INC. of all of the outstanding stock and limited liability company membership interests of STERLING
SYSTEMS & CONSULTING, INC., a Michigan corporation, STERLING SYSTEMS – INDIANA, L.L.C., A Michigan limited liability company, STERLING SYSTEMS – OHIO, L.L.C., a Michigan limited liability company, and STERLING OHIO MANAGEMENT,
INC., a Michigan corporation (collectively, the “STERLING ENTITIES”). The LENDER has agreed to the BORROWERS’ request, but only upon the terms and conditions set forth herein. As used herein, the term “LOAN DOCUMENTS” shall
mean the LOAN AGREEMENT, the TLC GUARANTY AGREEMENT, the TLC SECURITY AGREEMENT, and all other documents and agreements evidencing or securing the LOAN. Unless otherwise defined herein, any terms appearing in all capital letters in this AGREEMENT
shall have the respective meanings ascribed to such terms in the LOAN AGREEMENT. 
 NOW, THEREFORE, in consideration of the foregoing
premises, the terms and conditions set forth herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: 
 1. Representations And Warranties Of Obligors. To induce the LENDER to enter into this AGREEMENT and to provide the OBLIGORS with the
accommodations described herein, the OBLIGORS make the representations and warranties set forth below and acknowledge the LENDER’S justifiable right to rely upon these representations and warranties. 

 a. No Litigation. There is no action, suit, investigation, or proceeding pending against any of
the OBLIGORS or any other assets of any of the OBLIGORS, except for those proceedings previously disclosed to the LENDER in writing. 
 b.
Organization; Good Standing; Authorization. Each of the OBLIGORS: (a) has the power to enter into this AGREEMENT and all other documents, and agreements required to be executed pursuant to this AGREEMENT, and has the power to perform all
of its obligations hereunder and thereunder; (b) has duly authorized the entry into and performance of this AGREEMENT and all other documents and agreements required to be executed by such OBLIGOR; and (c) is in good standing in the state
of its incorporation or organization, as applicable, and is in good standing and qualified as a foreign corporation or limited liability company, as applicable, in all other states in which such qualification is required. 
 c. Valid, Binding And Enforceable. This AGREEMENT and all of the other documents and agreements executed pursuant to this AGREEMENT are the valid
and binding obligations of the OBLIGORS and are fully enforceable against each of the OBLIGORS in accordance with their terms. 
 2.
Amendments To Loan Agreement. The LOAN AGREEMENT is hereby modified and amended as follows: 
 a. Amendments to Definitions. The
definitions of “LOAN DOCUMENTS” “OBLIGATIONS” contained in Article 1 of the LOAN AGREEMENT are hereby modified as follows: 
 i. The definition of “LOAN DOCUMENTS” contained in Section 1.66 shall also include, without limitation, this AGREEMENT and the Promissory Note of even date herewith from the BORROWERS as co-makers thereof which is payable to
the order of LENDER in the stated principal amount of ($6,500,000.00). 
 ii. The definition of “OBLIGATIONS” contained in
Section 1.75 is modified by replacing the words “the LOAN” in the second line thereof with the words “the LOAN and the BRIDGE LOAN”. 
 b. Additional Definitions. The following additional definitions are hereby added to Article 1 of the LOAN AGREEMENT: 
 Section 1.87. Bridge Loan. The term “BRIDGE LOAN” means the Six Million Five Hundred Thousand Dollar ($6,500,000.00) term loan facility extended by the LENDER to the BORROWERS in accordance with
the terms set forth in this AGREEMENT, as evidenced by the BRIDGE LOAN NOTE. 
 Section 1.88. Bridge Loan Note.
The term “BRIDGE LOAN NOTE” means the Promissory Note of even date herewith from the BORROWERS as co-makers thereof which is payable to the order of LENDER in the stated principal amount of ($6,500,000.00). 
 c. Reserve Against Revolving Loan. Section 2.1 of the LOAN AGREEMENT is hereby modified by adding at the end of such provision the following:

 Notwithstanding anything to the contrary, until such time as all sums due and owing under the BRIDGE LOAN have been paid in full, the
maximum principal amount advanced under the LOAN shall not exceed Two Million Five Hundred Thousand Dollars ($2,500,000.00). 
  

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 d. Bridge Loan. The following additional provision is hereby added to Article 2 of the LOAN
AGREEMENT: 
 Section 2.15. Bridge Loan. Subject to the terms and conditions stated herein, the LENDER agrees to
advance to the BORROWERS as proceeds of the BRIDGE LOAN the principal sum of Six Million Five Hundred Thousand Dollars ($6,500,000.00). 
 Section 2.15.2. Interest And Repayment. All principal sums advanced and outstanding under the BRIDGE LOAN shall bear interest at the rate or rates set forth in the BRIDGE LOAN NOTE. The BRIDGE LOAN shall
be repaid in accordance with the stated terms and conditions of the BRIDGE LOAN NOTE, which terms and conditions are incorporated herein by reference. 
 Section 2.15.3. Commitment Fee. In consideration for the LENDER’S agreement to extend the BRIDGE LOAN to the BORROWERS, the BORROWERS shall pay to the LENDER a non-refundable and unconditional
commitment fee equal to Sixty-Five Thousand Dollars ($65,000.00), which shall be due and payable, and have been earned by the LENDER, upon the date of advance of the BRIDGE LOAN. The commitment fee shall not be applied to or considered to be a
payment of any of the LENDER’S expenses incurred in connection with the BRIDGE LOAN, all of which shall be paid by the BORROWERS. 
 Section 2.15.4. Purpose. The proceeds of the BRIDGE LOAN shall be used by the BORROWERS solely for the acquisition by AVATECH of all of the outstanding stock of Sterling Systems & Consulting,
Inc., a Michigan corporation, Sterling Systems – Indiana, L.L.C., A Michigan limited liability company, Sterling Systems – Ohio, L.L.C., a Michigan limited liability company, and Sterling Ohio Management, Inc., a Michigan corporation.

 3. No Novation; No Refinance; No Adverse Effect On Liens. The parties hereto do not intend that a novation of the LOAN or any of
the LOAN DOCUMENTS shall be created or effected because of the modification of the LOAN AGREEMENT, as described herein. The parties hereto do not intend that the execution of this AGREEMENT, and the amendments and modifications to be made to the
LOAN AGREEMENT, as described herein, shall: (a) constitute a refinance of the LOAN; or (b) affect or impair the validity, enforceability, or priority of any of the liens or security interests imposed by or granted in the LOAN DOCUMENTS.

 4. Equity Investment. The BORROWERS have represented to the LENDER that the bridge loan financing to be extended to the BORROWERS
pursuant to the terms of this AGREEMENT is to be repaid to the LENDER upon the receipt by the BORROWERS of an equity investment from a private equity fund. The BORROWERS shall keep the LENDER fully informed regarding the proposed equity investment,
which shall be made to the BORROWERS only by LLR Partners, Tail Wind Advisory and Management, or an alternative private equity fund acceptable to the LENDER. The BORROWERS shall provide to the LENDER copies of all term sheets, commitment letters,
and other correspondence relating to the proposed equity investment, promptly upon receipt thereof by the BORROWERS from each such private equity fund. 
 5. Other Terms; Confirmation Of Obligations. Other than the foregoing, all other terms and conditions of the LOAN DOCUMENTS shall remain in full force and effect and are incorporated herein by reference. The
OBLIGORS acknowledge, ratify and confirm their respective obligations under the LOAN DOCUMENTS and further acknowledge and confirm that the OBLIGORS are and shall remain absolutely and unconditionally obligated to pay the LENDER all present and
future indebtedness that is owed to the LENDER under the LOAN DOCUMENTS, as modified hereby, in the manner provided therein, 

  

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notwithstanding the LENDER’S execution of this AGREEMENT and any documents to be executed pursuant to this AGREEMENT, and notwithstanding the various
agreements the LENDER has set forth herein and therein. 
 6. Confirmation of Subsidiary Guarantor. TLC consents to the modification
and amendment of the LOAN AGREEMENT pursuant to the terms of this AGREEMENT, including without limitation the extension of additional financing to the BORROWERS. TLC hereby acknowledges, ratifies and confirms that all of its obligations under the
TLC GUARANTY AGREEMENT and TLC SECURITY AGREEMENT shall continue in full force and effect, notwithstanding the execution of this AGREEMENT and any documents to be executed pursuant to this AGREEMENT, and notwithstanding the various agreements of the
LENDER as set forth herein and therein. TLC hereby confirms and acknowledges that it is jointly and severally liable, in accordance with the terms of the TLC GUARANTY AGREEMENT, for the payment and performance of the BORROWERS’ obligations
under the LOAN DOCUMENTS. 
 7. Consent to Acquisition of Sterling. Pursuant to Section 6.8 of the LOAN AGREEMENT, the LENDER
consents to the acquisition by AVATECH of all of the outstanding stock and limited liability company membership interests, as applicable, of each of the STERLING ENTITIES, substantially in accordance with the terms set forth in the following
documents: (a) that certain Stock Purchase Agreement dated as of May 30, 2006, by and among Bruce White and Shelly White, as sellers, and AVATECH, as purchaser, with respect to all of the outstanding stock of Sterling Systems &
Consulting, Inc. and Sterling Ohio Management, Inc.; (b) that certain Membership Interest Purchase Agreement dated as of May 30, 2006, by and among Bruce White, as seller, and AVATECH, as purchaser with respect to all of the outstanding
limited liability company membership interests of Sterling Systems – Indiana L.L.C.; and (c) that certain Membership Interest Purchase Agreement dated as of May 30, 2006, by and among Bruce White, Marcy Nungesser, Kevin Breslin,
Kenneth Williams, David Press and Steve Wydulga, as sellers, and AVATECH, as purchaser, with respect to all of the outstanding limited liability company membership interests of Sterling Systems – Ohio L.L.C. BORROWERS shall furnish to the
LENDER copies of all documents executed in connection with the acquisition of the STERLING ENTITIES, the terms of which shall be acceptable to LENDER. 
 8. Security. Except as expressly modified herein, the OBLIGORS’ obligations under the LOAN DOCUMENTS, as modified hereby, shall continue to be secured by all of the liens, assignments, and security
interests provided in the LOAN DOCUMENTS. 
 9. Miscellaneous. 
 a. Incorporation; Limited Modification. The terms and conditions of the LOAN DOCUMENTS are incorporated herein by reference and made a part hereof
as if fully set forth herein. Except as specifically modified by or pursuant to this AGREEMENT, all terms and conditions of the LOAN DOCUMENTS remain unchanged, in full force and effect, and are hereby ratified and confirmed in all respects. In the
event of any inconsistencies between the terms and conditions of this AGREEMENT and any of the terms and conditions of the other LOAN DOCUMENTS (except as to the specific modifications contained herein), the LENDER shall determine, in its sole
discretion, which of the terms and conditions shall control. 
 b. Integration. This AGREEMENT, the LOAN DOCUMENTS (as modified), and
any other documents executed pursuant to or in connection with this AGREEMENT constitute the entire agreement between the LENDER and the OBLIGORS with respect to the subject matter hereof, and any term or condition not expressed therein does not
constitute a part of the agreement of the LENDER and the OBLIGORS with respect to such subject matter. 
  

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 c. Severability. If any provision or part of any provision of this AGREEMENT shall for any reason
be held invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision of this AGREEMENT and this AGREEMENT shall be construed as if such invalid, illegal or unenforceable
provision or part thereof had never been contained herein, but only to the extent of its invalidity, illegality, or unenforceability. 
 d.
Number, Gender, And Captions. As used herein, the singular shall include the plural and the plural may refer to only the singular. The use of any gender shall be applicable to all genders. The captions contained herein are for purposes of
convenience only and are not a part of this AGREEMENT. 
 e. Further Assurances. As part of this AGREEMENT, and in consideration for
the agreements of the LENDER as set forth therein, each OBLIGOR agrees to execute and deliver to the LENDER such other and further documents as may, from time to time, in the sole opinion of the LENDER and the LENDER’S counsel, be necessary or
appropriate to carry out the terms and conditions of this AGREEMENT and the LOAN DOCUMENTS. If any OBLIGOR fails to execute any such documents within ten (10) days of being requested to do so by the LENDER, such OBLIGOR hereby appoints the
LENDER or any officer of the LENDER as the attorney in fact for such OBLIGOR for purposes of executing such documents in the name, place and stead of such OBLIGOR, which power of attorney shall be considered as coupled with an interest and
irrevocable. 
 f. Waivers. No failure or delay by the LENDER in the exercise or enforcement of any of its rights under any LOAN
DOCUMENT shall be a waiver of such right or remedy, nor shall a single or partial exercise or enforcement thereof preclude any other or further exercise or enforcement thereof or the exercise or enforcement of any other right or remedy. The LENDER
may at any time or from time to time waive all or any rights under this AGREEMENT or any of the LOAN DOCUMENTS, but any such waiver must be specific and in writing and no such waiver shall constitute, unless specifically so expressed by the LENDER
in writing, a future waiver of performance or exact performance by any OBLIGOR. No notice to or demand upon any OBLIGOR in any instance shall entitle such OBLIGOR (or any other OBLIGOR) to any other or further notice or demand in the same, similar
or other circumstance. 
 g. Choice Of Law. The laws of the State of Maryland (excluding, however, conflict of law principles) shall
govern and be applied to determine all issues relating to this AGREEMENT and the rights and obligations of the parties hereto, including the validity, construction, interpretation, and enforceability of this AGREEMENT and its various provisions and
the consequences and legal effect of all transactions and events which resulted in the execution of this AGREEMENT or which occurred or were to occur as a direct or indirect result of this AGREEMENT having been executed. 
 h. Consent To Jurisdiction; Agreement As To Venue. Each OBLIGOR irrevocably consents to the non-exclusive jurisdiction of the courts of the State
of Maryland and of the United States District Court For The District Of Maryland, if a basis for federal jurisdiction exists. Each OBLIGOR agrees that venue shall be proper in any circuit court of the State of Maryland selected by the LENDER or in
the United States District Court For The District Of Maryland if a basis for federal jurisdiction exists and waive any right to object to the maintenance of a suit in any of the state or federal courts of the State of Maryland on the basis of
improper venue or of inconvenience of forum. 
 i. Binding Effect; No Oral Modification. This AGREEMENT shall be binding upon and
shall inure to the benefit of the parties and their respective personal representatives, successors and assigns. This AGREEMENT may not be altered, modified or amended unless such alteration, modification or amendment is in writing and executed by
the LENDER. 
  

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 j. Time. Time is of the essence with respect to all of the obligations of the OBLIGORS under this
AGREEMENT and the LOAN DOCUMENTS. 
 k. Costs Of Transaction. All costs of the transactions contemplated by this AGREEMENT, including
without limitation all of attorneys’ fees and expenses incurred by the LENDER, shall be paid by the BORROWER, regardless of whether such costs are incurred before or after the execution and delivery of this AGREEMENT. 
 10. Release; Waiver. As part of the agreements set forth herein, and in consideration of the same, each OBLIGOR hereby releases the LENDER and all
of the LENDER’S past, present and future directors, officers, employees, agents and attorneys from any and all claims, causes of action, suits and damages (including claims for attorneys’ fees) which any of the OBLIGORS, jointly or
severally or otherwise, ever had or now have against the LENDER or any of the LENDER’S past, present and future directors, officers, employees, agents or attorneys. Without limiting the generality of the foregoing, each OBLIGOR acknowledges and
agrees that there exists no offset or defense to the obligations of any OBLIGOR as stated in the LOAN DOCUMENTS. 
 11. Waiver Of Jury
Trial. The parties hereto agree that any suit, action, or proceeding, whether claim or counterclaim, brought or instituted by any party to this AGREEMENT, or any of their successors or assigns, on or with respect to this AGREEMENT or any LOAN
DOCUMENT or which in any way relates, directly or indirectly, to the obligations of the OBLIGORS to the LENDER under this AGREEMENT or any LOAN DOCUMENT, or the dealings of the parties with respect thereto, shall be tried only by a court and not by
a jury. THE PARTIES EXPRESSLY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY SUCH ACTION OR PROCEEDINGS. The parties acknowledge and agree that this provision is a specific and material aspect of the agreement between the parties and that the
parties would not enter into this AGREEMENT if this provision were not contained herein. 
 IN WITNESS WHEREOF, the parties have executed
this AGREEMENT as of the date first above written with the specific intention of creating a document under seal. 
  

							
	WITNESS/ATTEST:	  	BORROWERS:	  	
			
		  	AVATECH SOLUTIONS, INC.,	  	
		  	A Delaware Corporation	  	
				
		  	By:	  	 /s/ Lawrence Rychlak
	  	(SEAL)
		  		  	Lawrence Rychlak,	  	
		  		  	Vice President and Chief Financial Officer	  	
			
		  	AVATECH SOLUTIONS SUBSIDIARY, INC.,	  	
		  	A Delaware Corporation	  	
				
		  	By:	  	 /s/ Lawrence Rychlak
	  	(SEAL)
		  		  	Lawrence Rychlak,	  	
		  		  	Vice President and Chief Financial Officer	  	

  

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		  	TLC:	  	
			
		  	TECHNICAL LEARNINGWARE COMPANY, INC.,	  	
		  	A Delaware Corporation	  	
				
		  	By:	  	 /s/ Lawrence Rychlak
	  	(SEAL)
		  		  	Lawrence Rychlak,	  	
		  		  	Vice President and Chief Financial Officer	  	
			
		  	LENDER:	  	
			
		  	MERCANTILE-SAFE DEPOSIT AND TRUST COMPANY	  	
				
		  	By:	  	  
	  	(SEAL)
		  		  	Stephen D. Palmer, Vice President	  	

  

 7EXHIBIT 10.58

 Exhibit 10.58 
  

			
	Baltimore, Maryland	 	$6,500,000.00

 May 30, 2006 
 PROMISSORY NOTE 
 FOR VALUE RECEIVED, the undersigned AVATECH SOLUTIONS,
INC., a Delaware corporation, and AVATECH SOLUTIONS SUBSIDIARY, INC., a Delaware corporation, jointly and severally (collectively, “BORROWERS”), jointly and severally promise to pay to the order of MERCANTILE-SAFE DEPOSIT AND TRUST COMPANY
(the “LENDER”), 2 Hopkins Plaza, 21ST Floor, Baltimore, Maryland 21201, or at such other places as the
holder of this Promissory Note may from time to time designate, the principal sum of Six Million Five Hundred Thousand Dollars ($6,500,000.00), together with interest thereon at the rate or rates hereafter specified until paid in full and any and
all other sums which may be owing to the holder of this Promissory Note by the BORROWERS pursuant to this Promissory Note. This Promissory Note evidences the “BRIDGE LOAN,” as such term is defined in the Loan And Security Agreement
(“AGREEMENT”) dated January 27, 2006, as modified by the Modification Agreement of even date herewith, between the BORROWERS and the LENDER. The following terms shall apply to this Promissory Note. 
 1. Interest Rate. Interest shall accrue on the unpaid principal balance of this Promissory Note until paid in full at the annual fluctuating rate
of interest which shall equal the rate obtained by adding two percent (2%) to the “PRIME RATE,” in effect from time to time. As used herein, term “PRIME RATE” means the rate of interest announced from time to time by the
LENDER, in its sole discretion, as its prime lending rate of interest, it being understood that such announced rate bears no inference, implication, representation, or warranty that such announced rate is charged to any particular customer or
customers of the LENDER. The LENDERS prime lending rate of interest is but one of several interest rate bases used by the LENDER. Changes in the applicable interest rate shall be made as of, and immediately upon, the occurrence of changes in the
LENDERS prime rate. 
 2. Calculation Of Interest. Interest shall be calculated on the basis of a three hundred sixty (360) days
per year factor applied to the actual days on which there exists an unpaid balance hereunder. 
 3. Repayment. A payment of accrued
and unpaid interest only shall be made by the BORROWERS to the holder of this Promissory Note on the first calendar day of each month, beginning on July 1, 2006, until August 30, 2006, which date is the final and absolute maturity date of
this Promissory Note, at which time all sums due hereunder, including principal, interest, charges and fees, shall be paid in full. 
 4.
Late Payment Charge. If any payment due hereunder, including any final installment, is not received by the holder within fifteen (15) calendar days after its due date, the BORROWERS shall pay a late payment charge equal to five percent
(5%) of the amount then due. The late payment charge shall be due whether or not the holder declares this Promissory Note in default or accelerates and demands immediate payment of the sums due hereunder. The existence of the right by the
holder to receive a late payment charge shall not constitute a grace period or provide any right in the BORROWERS to make a payment other than on its due date. 
 5. Application Of Payments. All payments made hereunder shall be applied first to late payment charges or other sums owed to the holder, next to accrued interest, and then to principal, or in such other order
or proportion as the holder, in the holders sole discretion, may elect from time to time. 
 6. Prepayment. The BORROWERS may prepay
this Promissory Note in whole or in part at any time without premium or additional interest. All prepayments made upon the unpaid principal balance of this Promissory Note shall be applied to the unpaid principal balance in the inverse order of
scheduled maturities. 

 7. Rights Upon Occurrence Of An Event Of Default. Upon the occurrence of an “EVENT OF
DEFAULT,” as such term is defined in the AGREEMENT, the holder of this Promissory Note shall have the following rights in addition to such other rights and remedies as are authorized by the AGREEMENT or otherwise available to the holder under
applicable laws: 
 7.2. Acceleration. The holder of this Promissory Note, in the holders sole discretion and without notice or demand,
may accelerate and declare due and immediately owing the entire unpaid principal balance plus accrued interest and all other sums payable to the holder hereunder. Reference is made to the LOAN DOCUMENTS for further and additional rights on the part
of the holder to declare the entire unpaid principal balance plus accrued interest and all other sums due hereunder immediately due and payable. 
 7.3. Default Interest Rate. The holder of this Promissory Note, in the holders sole discretion and without notice or demand, may raise the rate of interest accruing on the unpaid principal balance by four (4) percentage points
above the rate of interest otherwise applicable, independent of whether the holder elects to accelerate the unpaid principal balance as a result of such default, unless prior to the imposition of the default rate of interest, the BORROWERS cure such
event to the satisfaction of the holder hereof. If the default rate of interest is imposed by the holder, the default rate shall remain in effect, until the EVENT OF DEFAULT authorizing the increase in the interest rate is cured to the holders
satisfaction and the holder in writing agrees to reinstate the regular interest rate. Any individual waiver of the holders right to impose the default rate of interest or to retain the default rate of interest after imposition thereof shall not be
considered a waiver of this section or any future right of the holder to impose the default rate of interest pursuant to this Section. 
 7.4. Confession Of Judgment. Each of the BORROWERS authorizes any attorney admitted to practice before any court of record in the United States to appear on its behalf in any court in one or more proceedings, or before any clerk
thereof or prothonotary or other court official, and to confess judgment against the BORROWERS in favor of the holder of this Promissory Note in the full amount due on this Promissory Note (including principal, accrued interest and any and all
charges, fees and costs) plus attorneys fees equal to fifteen percent (15%) of the amount due, plus court costs, all without prior notice or opportunity of the BORROWERS for prior hearing. Each of the BORROWERS agrees and consents that venue
and jurisdiction shall be proper in the Circuit Court of any County of the State of Maryland or of Baltimore City, Maryland, or in the United States District Court for the District of Maryland. Each of the BORROWERS waives the benefit of any and
every statute, ordinance, or rule of court which may be lawfully waived conferring upon it any right or privilege of exemption, homestead rights, stay of execution, or supplementary proceedings, or other relief from the enforcement or immediate
enforcement of a judgment or related proceedings on a judgment. The authority and power to appear for and enter judgment against the BORROWERS 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 and power may be exercised on one or more occasions from time to time, in the same or different jurisdictions, as often as the holder shall deem necessary, convenient, or
proper. In the event that the holder receives, as a result of execution on a judgment confessed hereunder, attorney’s fees which exceed the actual legal fees incurred by the holder in connection with the unpaid balance due to the holder
pursuant to this Promissory Note, then, upon full and final payment of all other sums due and owing to the holder pursuant to this Promissory Note and payment of the actual attorneys’ fees incurred by the holder, the holder shall remit such
excess amount of attorneys’ fees to the BORROWERS. 
 8. Interest Rate After Judgment. If judgment is entered against either of
the BORROWERS on this Promissory Note, the amount of the judgment entered (which may include principal, interest, fees, and costs) shall bear interest at the higher of the maximum interest rate imposed upon judgments by applicable law or the above
described default interest rate, to be determined on the date of the entry of the judgment. 
 9. Expenses Of Collection And Attorneys
Fees. Should this Promissory Note be referred to an attorney for collection, whether or not judgment is confessed or suit is filed, the BORROWERS shall pay all of the holders costs, fees and expenses, including attorneys fees, resulting from
such referral. 
  

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 10. Waiver Of Defenses. In the event any one or more holders of this Promissory Note transfer this
Promissory Note for value, each of the BORROWERS agrees that, except as otherwise provided herein, all subsequent holders of this Promissory Note who take for value and without actual knowledge of a claim or defense of either of the BORROWERS
against a prior holder shall not be subject to any claims or defenses which either of the BORROWERS may have against a prior holder, all of which are waived as to the subsequent holder, and that all such subsequent holders shall have all rights of a
holder in due course with respect to the BORROWERS even though the subsequent holder may not qualify, under applicable law, absent this section, as a holder in due course. The BORROWERS shall retain all rights and claims which the BORROWERS may have
against prior holders despite any such transfers and the waiver of defenses provided in this section as to subsequent holders. Notwithstanding the foregoing, nothing herein shall represent the waiver by the BORROWERS of any defense based upon any
payment hereof made to any former holder hereof prior to the BORROWERS having been notified of the transfer of this Promissory Note to any subsequent holder. 
 11. Waiver Of Protest. Each of the BORROWERS, and all parties to this Promissory Note, whether maker, indorser, or guarantor, waive presentment, notice of dishonor and protest. 
 12. Extensions Of Maturity. All parties to this Promissory Note, whether maker, indorser, or guarantor, agree that the maturity of this Promissory
Note, or any payment due hereunder, may be extended at any time or from time to time without releasing, discharging, or affecting the liability of such party. 
 13. Manner And Method Of Payment. All payments called for in this Promissory Note shall be made in lawful money of the United States of America. If made by check, draft, or other payment instrument, such check,
draft, or other payment instrument shall represent immediately available funds. In the holders discretion, any payment made by a check, draft, or other payment instrument shall not be considered to have been made until such time as the funds
represented thereby have been collected by the holder. Should any payment date fall on a non-banking day, the BORROWERS shall make the payment on the next succeeding banking day. 
 14. Notices. Any notice or demand required or permitted by or in connection with this Promissory Note shall be given in the manner specified in
the AGREEMENT for the giving of notices under the AGREEMENT. Notwithstanding anything to the contrary, all notices and demands for payment from the holder actually received in writing by any of the BORROWERS shall be considered to be effective upon
the receipt thereof by such BORROWER regardless of the procedure or method utilized to accomplish delivery thereof to the BORROWERS. 
 15.
Assignability. This Promissory Note may be assigned by the LENDER or any holder to the extent permitted by the stated terms of the AGREEMENT. 
 16. Binding Nature. This Promissory Note shall inure to the benefit of and be enforceable by the LENDER and the LENDERS successors and assigns and any other person to whom the LENDER or any holder may grant an
interest in the BORROWERS obligations hereunder, and shall be binding and enforceable against each of the BORROWERS and its respective successors and assigns. 
 17. Invalidity Of Any Part. If any provision or part of any provision of this Promissory Note shall for any reason be held invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provisions of this Promissory Note and this Promissory Note shall be construed as if such invalid, illegal or unenforceable provision or part thereof had never been contained herein, but only to the extent
of its invalidity, illegality, or unenforceability. 
 18. Choice Of Law. The laws of the State of Maryland (excluding, however,
conflict of law principles) shall govern and be applied to determine all issues relating to this Promissory Note and the rights and obligations of the parties hereto, including the validity, construction, interpretation, and enforceability of this

  

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Promissory Note and its various provisions and the consequences and legal effect of all transactions and events which resulted in the issuance of this
Promissory Note or which occurred or were to occur as a direct or indirect result of this Promissory Note having been executed. 
 19.
Consent To Jurisdiction; Agreement As To Venue. Each of the BORROWERS irrevocably consents to the non-exclusive jurisdiction of the courts of the State of Maryland and of the United States District Court for the District of Maryland, if a
basis for federal jurisdiction exists. Each of the BORROWERS agrees that venue shall be proper in any circuit court of the State of Maryland selected by the LENDER or in the United States District Court for the District of Maryland if a basis for
federal jurisdiction exists and waives any right to object to the maintenance of a suit in any of the state or federal courts of the State of Maryland on the basis of improper venue or of inconvenience of forum. 
 20. Unconditional Obligations. The BORROWERS obligations under this Promissory Note shall be the joint and several, absolute and unconditional
duty and obligation of the BORROWERS and shall be independent of any rights of set-off, recoupment or counterclaim which either of the BORROWERS might otherwise have against the holder of this Promissory Note. The BORROWERS, jointly and severally,
shall pay absolutely the payments of principal, interest, fees and expenses required hereunder, free of any deductions and without abatement, diminution or set-off. 
 21. Seal And Effective Date. This Promissory Note is an instrument executed under seal and is to be considered effective and enforceable as of the date set forth on the first page hereof, independent of the
date of actual execution and delivery. 
 22. Tense; Gender; Defined Terms; Section Headings. As used herein, the singular includes
the plural and the plural includes the singular. A reference to any gender also applies to any other gender. Defined terms are entirely capitalized throughout. The section headings are for convenience only and are not part of this Promissory Note.

 23. Actions Against Holder. Any action brought by either of the BORROWERS against the holder of this Promissory Note which is
based, directly or indirectly, on this Promissory Note or any matter in or related to this Promissory Note, including but not limited to the making of the loan evidenced hereby or the administration or collection thereof, shall be brought only in
the courts of the State of Maryland. Each of the BORROWERS agrees that any forum other than the State of Maryland is an inconvenient forum and that a suit brought by either of the BORROWERS against the holder of this Promissory Note in a court of
any state other than the State of Maryland should be forthwith dismissed or transferred to a court located in the State of Maryland by that Court. 
 24. Waiver Of Jury Trial. Each of the BORROWERS (by execution of this Promissory Note) and the holder of this Promissory Note (by acceptance of this Promissory Note) agree that any suit, action, or proceeding, whether claim or
counterclaim, brought or instituted by or against either of the BORROWERS or the holder of this Promissory Note, or any successor or assign of either of the BORROWERS or the holder of this Promissory Note, on or with respect to this Promissory Note
or any of the other LOAN DOCUMENTS, or which in any way relates, directly or indirectly, to the obligations of either of the BORROWERS to the holder of this Promissory Note under this Promissory Note or any of the other LOAN DOCUMENTS, or the
dealings of the parties with respect thereto, shall be tried only by a court and not by a jury. EACH OF THE BORROWERS AND THE HOLDER OF THIS PROMISSORY NOTE HEREBY EXPRESSLY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY SUCH SUIT, ACTION, OR
PROCEEDING.  
 IN WITNESS WHEREOF, each of the BORROWERS has duly executed this Promissory Note under seal as of the date first above
written. 
  

 4 

							
	WITNESS/ATTEST:	  	BORROWERS:	  	
			
		  	AVATECH SOLUTIONS, INC.,	  	
		  	A Delaware Corporation	  	
				
		  	By:	  	 /s/ Lawrence Rychlak
	  	(SEAL)
		  	Name:	  	Lawrence Rychlak	  	
		  	Title:	  	CFO	  	
			
		  	AVATECH SOLUTIONS SUBSIDIARY, INC.,	  	
		  	A Delaware Corporation	  	
				
		  	By:	  	 Lawrence Rychlak
	  	(SEAL)
		  	Name:	  	Lawrence Rychlak	  	
		  	Title:	  	CFO	  	

  

 5

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