Document:

EXHIBIT 10.22

 EXHIBIT 10.22 
  
 SENIOR SUBORDINATED PROMISSORY NOTE 
  

					
	 $902,168.80
	 	 	 	April 1, 2004
	 	 	 	 	Owings Mills, Maryland

  
 FOR VALUE RECEIVED,
Avatech Solutions, Inc., a Delaware corporation (“Borrower”), hereby unconditionally promises to pay to the order of W. James Hindman, a Maryland resident (“Lender”), in lawful money of the United States of America
and in immediately available funds, the principal sum of $902,168.80 and any unpaid accrued interest thereon, as set forth below. 
  
 The following is a statement of the rights of Lender under this Senior Subordinated Promissory Note (this “Note”) and the conditions to
which this Note is subject, and to which Lender, by the acceptance of this Note, agrees: 
  
 1. Principal Repayment. This Note shall mature, and the entire unpaid principal balance of this Note, together with all accrued and unpaid interest, late charges and other fees hereon, shall be due and
payable on July 1, 2005 (the ”Maturity Date”), if not paid earlier as hereinafter provided. At any time upon prior written notice to Lender, the Borrower may prepay without penalty, in whole or in part, the principal sum, plus
accrued interest to the date of payment, of this Note. 
  
 2.
Interest Rate. Borrower further promises to pay interest on the unpaid principal balance of this Note, which interest shall accrue at a simple rate of 12% per annum beginning on the date hereof. Quarterly interest payments shall be paid
to Lender on or before each of July 1, and October 1, 2004; and on January 3 and April 1, 2005 or on such earlier date as the entire principal amount shall become due and payable and shall be calculated on the basis of a 365-day year for the actual
number of days elapsed. All principal of, and accrued and unpaid interest on, this Note shall be paid to the Lender on the Maturity Date. 
  
 3. Place of Payment. All amounts payable hereunder shall be payable to Lender at the following address: 2322 Nicodemus Road, Westminster,
Maryland 21157. 
  
 4. Application of Payments. All
payments on this Note shall first be applied to accrued interest and thereafter to the outstanding principal balance hereof. 
  
 5. Default. 
  
 5.1 Event of Default. The occurrence of any one or more of the following events shall constitute an event of default
(“Event of Default”) hereunder: 
  
 (a) Failure to pay, when due, the principal, any interest, or any other sum payable hereunder; 
  

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 (b) The admission by Borrower in writing of its inability to pay its debts as such debts
become due, or the making by Borrower of any general assignment for the benefit of creditors; 
  
 (c) The commencement by Borrower of any case, proceeding, or other action seeking reorganization, arrangement, adjustment, liquidation,
dissolution, or composition of its debts under any law relating to bankruptcy, insolvency, or reorganization, or relief of debtors, or seeking appointment of a receiver, trustee, custodian, or other similar official for it or for all or any
substantial part of its property; 
  
 (d) The
commencement of any case, proceeding, or other action against Borrower seeking to have any order for relief entered against it as debtor, or seeking reorganization, arrangement, adjustment, liquidation, dissolution, or composition of Borrower’s
debts under any law relating to bankruptcy, insolvency, reorganization, or relief of debtors, or seeking appointment of a receiver, trustee, custodian, or other similar official for it or for all or any substantial part of the property of Borrower,
and (i) Borrower, by any act or omission, indicates its consent to, approval of, or acquiescence in such case, proceeding, or action, or (ii) such case, proceeding, or action results in the entry of an order for relief which is not fully stayed
within 60 days after the entry thereof, or (iii) such case, proceeding, or action remains undismissed for a period of 60 days or more; or 
  
 (e) Default in the performance of any obligation, covenant or agreement contained or referred to herein. 
  
 5.2 Consequences of Default. Upon the
occurrence of any Event of Default, the entire principal amount hereof, and all accrued and unpaid interest thereon, shall be accelerated, and shall be due and payable, at the option of Lender, on the fifth day after Lender provides notice of such
Event of Default, provided that such Event of Default is not cured to Lender’s satisfaction in that five-day period, and in addition thereto, and not in substitution therefor, Lender shall be entitled to exercise any one or more of the rights
and remedies provided by applicable law. Failure to exercise said option or to pursue such other remedies shall not constitute a waiver of such option or such other remedies or of the right to exercise any of the same in the event of any subsequent
Event of Default hereunder. Lender shall be entitled to collect all reasonable costs and expenses of collection and/or suit, including, but not limited to, reasonable attorneys’ fees. 
  
 6. Priority. All rights and priorities of the authorized
holder of this Note and the indebtedness evidenced hereby shall rank in all respects junior to Borrower’s obligations under (i) that certain Guaranty dated September 11, 2003 between Key Bank and Borrower and (ii) that certain Guaranty dated
July 22, 2003 between Dassault Systemes Corp. and Borrower and senior to all other indebtedness of the Borrower, including, without limitation, amounts owed under those obligations known as the 10% Subordinated Notes. Borrower shall not incur any
indebtedness outside the ordinary course of business after the date hereof without Lender’s prior written consent. 
  
 7. IF ANY OF THE PAYMENTS OF PRINCIPAL AND/OR INTEREST ON THIS NOTE HAVE NOT BEEN PAID ON OR BEFORE THE DATE ON WHICH THE SAME ARE 

  

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DUE AND PAYABLE (EXCEPT WITH RESPECT TO THE PERMISSIBLE SUSPENSION OF INTEREST PAYMENTS DESCRIBED HEREIN), WHETHER AS ORIGINALLY SCHEDULED, BY ACCELERATION,
OR OTHERWISE, AND SUCH FAILURE TO PAY SHALL CONTINUE FOR TEN (10) DAYS AFTER WRITTEN NOTICE THEREOF, OR ANY OTHER DEFAULT OCCURS HEREUNDER, THE BORROWER DOES HEREBY AUTHORIZE AND EMPOWER THE CLERK OR ANY ATTORNEY OF ANY COURT OF RECORD HAVING
JURISDICTION (INCLUDING FEDERAL COURT, IF APPROPRIATE JURISDICTION EXISTS) TO APPEAR FOR THE BORROWER BEFORE ANY SUCH COURT AND CONFESS JUDGMENT IN FAVOR OF THE LENDER AGAINST THE BORROWER FOR THE UNPAID PRINCIPAL BALANCE OF THIS NOTE, TOGETHER WITH
ALL ACCRUED AND UNPAID INTEREST THEREON INCLUDING LATE CHARGES, AND TOGETHER WITH ALL COSTS OF SUIT AND ACTUAL ATTORNEYS’ FEES INCURRED AT STANDARD HOURLY RATES. 
  
 8. Waiver; Amendment. No delay or omission on the part of the Lender in the exercise of any right or remedy
hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any right or remedy preclude any other or further exercise thereof or the exercise of any other right or remedy. The Borrower hereby waives demand, presentment
and protest and notices thereof as well as notice of non-payment. The provisions of this Note may be amended with the written consent of Borrower and Lender. The obligations of Borrower and the rights of Lender under this agreement may be waived by
written notice delivered to Borrower. 
  
 9. Expenses.
The Borrower agrees to pay on demand all costs and expenses, including, without limitation, reasonable attorney’s fees, incurred by the Lender in connection with this Note. In addition, the Borrower agrees to pay on demand all costs and
expenses, including, without limitation, reasonable attorney’s fees, incurred by the Lender in endeavoring to enforce the rights of the Lender hereunder. 
  

10. Governing Law. This Note shall be governed by, and construed and enforced in accordance with, the laws of the State of Maryland,
excluding conflict of laws principles that would cause the application of laws of any other jurisdiction. 
  
 11. Assignment. This Note shall inure to the benefit of and be enforceable by Lender’s successors and authorized assigns, and shall be
binding and enforceable against Borrower’s successors and assigns. 
  
 IN WITNESS WHEREOF, Borrower has executed this Note as of the date first written above. 
  

									
	 WITNESS/ATTEST:
	 	 	 	 BORROWER:
 Avatech Solutions, Inc.

					
	 	 	/s/	 	 	 	By:	 	/s/
	 	 	
	 	 	 	 	 	

	 	 	 	 	 	 	 	 	 Donald R. Walsh, Chief Executive Officer

  

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 EXHIBIT 10.23 
  
 Separation Agreement 
  
 This Separation Agreement (“Agreement”) is made as of the 10th day of March, 2004, by and between Avatech Solutions Subsidiary, Inc., a Delaware corporation (the “Company”) and Scott Fischer
(“Fischer”). 
  
 Explanatory Statement 

 
 A. The Company and Fischer are parties to an employment agreement, dated
as of April 1, 2003 (the “Original Agreement”) pursuant to which Fischer was employed by the Company as its Executive Vice President for Strategy and Business Development. 
  
 B. The Company and Fischer mutually desire not to extend the initial term of the Original Agreement, but to continue
Fischer’s employment through and including July 15, 2004. 
  
 C. In consideration for the Company’s agreement to continue Fischer’s salary (as modified in this Agreement) through and including July 15, 2004, and the continuation of certain benefits through July 15, 2004, Fischer and the
Company have agreed that certain provisions of the Original Agreement shall continue in full force and effect on the terms and conditions set forth in the Original Agreement, as fully set forth in this Agreement. 
  
 NOW, THEREFORE, in consideration of the mutual promises of the parties, the Explanatory
Statement, which shall be deemed to be a substantive part of this Agreement and is incorporated herein by reference, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto do
hereby agree as follows: 
  
 Section 1. Mutual Non-Renewal of Original
Agreement. The parties mutually agree that, except as specifically set forth in this Agreement, the Original Agreement is terminated and of no further force and effect as of the date hereof. 
  
 Section 2. Survival of Certain Original Agreement Provisions. Anything herein
contained, or contained in the Original Agreement, notwithstanding, the following provisions of the Original Agreement shall continue in full force and effect as provided therein: 
  
 (a) Section 5.3 (Change in Control), except that the language “during the term of this Agreement and” is hereby
deleted. 
  
 (b) Section 5.4 (Release). 
  
 (c) Section 6 (Certain Restrictions) (except that Section 6.2.1 of the
Original Agreement is hereby amended by (i) deleting the words “or indirectly” in the first 

  

 
sentence thereof, and (ii) adding, at the end of Section 6.2.1 the following: “, except that Executive may engage in an activity otherwise prohibited
hereby if the Company executes and delivers to Executive a written consent to Executive’s involvement in such activity.”). 
  
 Section 3. Continuation and Modification of Salary and Certain Benefits. Fischer’s Base Salary (as defined in Section 4.1 of the Original Agreement) shall
continue through and including April 1, 2004. From April 2, 2004 through and including July 15, 2004, Fischer shall be paid a modified salary equal to $4,000 per month (prorated for a partial month). Fischer shall not be entitled to any further
compensation for vacation days accrued and unpaid as of the date of this Agreement, and shall accrue no additional vacation days from the date of this Agreement through and including July 15, 2004. Fischer shall continue to participate in benefit
plans provided by the Company (as described in Section 4.3.1 of the Original Agreement) through and including July 15, 2004. 
  
 Section 4. Restricted Stock Award. Fischer shall immediately return to the Company, for cancellation, all certificates evidencing 30,000 shares of the Common Stock
of Avatech Solutions, Inc. (“Avatech”) that were the subject of a Restricted Stock Award granted to Fischer, and which shares shall not have vested as of July 15, 2004, and such shares shall for all purposes be deemed unvested, and Fischer
hereby relinquishes all ownership and title to such shares of Common Stock. Notwithstanding the requirement in the Restricted Stock Award from Avatech to Fischer, and specifically Sections 3.2.2 and 3.3, that Fischer be an officer of the Company at
the time of a scheduled vesting thereunder, Fischer shall retain certificates evidencing 30,000 shares of Avatech Common Stock that will become fully vested on July 15, 2004, and such shares shall vest on July 15, 2004, provided, however that as a
condition to such vesting on July 15, 2004, Fischer shall have satisfactorily carried out all duties reasonably assigned to him by the Company’s Chief Executive Officer between the date hereof and July 15, 2004. If, in the sole and absolute
discretion of the Company’s Compensation Committee, Fischer shall not have satisfactorily carried out such assigned duties, then in such event the 30,000 shares that were to vest on July 15, 2004 shall not vest, and Fischer shall immediately,
after being notified of such nonperformance, return certificates evidencing such shares to the Company for cancellation. 
  
 Section 5. Miscellaneous. This Agreement shall be governed and construed in accordance with the laws of the State of Maryland; this Agreement may not be assigned
by either party without the written consent of the other party hereto. 
  

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 IN WITNESS WHEREOF, the parties have executed this Agreement under seal as of the day and year first above written.

  

									
	 WITNESS/ATTEST:
	 	 	 	 Avatech Solutions Subsidiary, Inc.

				
	/s/	 	 	 	By:	 	/s/
	
	 	 	 	 	 	

	 	 	 	 	 	 	 	 	 Donald R. (Scotty) Walsh
 Chief Executive Officer

			
	 	 	 	 	 Avatech Solutions, Inc.

				
	/s/	 	 	 	By:	 	/s/
	
	 	 	 	 	 	

	 	 	 	 	 	 	 	 	 Donald R. Scotty Walsh
 Chief Executive Officer

				
	/s/	 	 	 	 	 	/s/
	
	 	 	 	 	 	

	 	 	 	 	 	 	 	 	 Scott Fischer

  

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