EXHIBIT 10.16
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                           LOAN MODIFICATION AGREEMENT
                           ---------------------------

         THIS LOAN MODIFICATION AGREEMENT ("Agreement") is made and effective as
of June 26, 2007, by and between SUTRON CORPORATION, a Virginia corporation
("Borrower") and BRANCH BANKING AND TRUST COMPANY OF VIRGINIA, a North Carolina
banking corporation formerly known as (and successor to) Branch Banking and
Trust Company of Virginia ("Lender").

                                 R E C I T A L S
                                 ---------------

         WHEREAS, on July 29, 2004, Lender made a commercial line of credit loan
in the amount of One Million Six Hundred Twenty-five Thousand and no/100 Dollars
($1,625,000.00)(as subsequently modified, the "Loan") to the Borrower, evidenced
by, inter alia, (i) the Borrower's Commercial Promissory Note of same date in
the amount of the Loan (as subsequently modified, the "Note"), (ii) that certain
first lien Security Agreement of same date executed by the Borrower for the
benefit of the Lender (as subsequently modified, the "Security Agreement"), and
(iii) that Loan Agreement of same date executed by the Borrower and the Lender
(as subsequently modified, the "Loan Agreement")(the Note, Security Agreement,
Loan Agreement, and all other documents evidencing or securing the Loan, as
subsequently modified, are sometimes collectively referred to herein as "Loan
Documents"); and

         WHEREAS, by Guaranty Agreement dated July 29, 2004 (the "Guaranty"),
Daniel W. Farrell, Sidney C. Hooper, Thomas N. Keefer and Raul S. McQuivey
(collectively, the "Guarantors") jointly and severally guaranteed repayment of
the Loan and performance of all of Borrower's obligations under the Loan
Documents; and

         WHEREAS, by Loan Modification Agreement and Release of Guarantors dated
as of August 5, 2005, the Lender and the Borrower agreed, inter alia, to (i)
increase the principal amount of the Loan to Two Million and no/100 Dollars
($2,000,000.00), (ii) extend the maturity date of the Loan, and (iii) release
the Guarantors from their obligations under the Guaranty; and

         WHEREAS, by Loan Modification Agreement and Release of Guarantors dated
as of August 5, 2005, the Lender and the Borrower agreed, inter alia, to (i)
increase the principal amount of the Loan to Two Million Five Hundred Thousand
and no/100 Dollars ($2,500,000.00) and (ii) extend the maturity date of the
Loan; and

         WHEREAS, the Borrower has requested that Lender (i) increase the
principal amount of the Loan to Three Million and no/100 Dollars
($3,000,000.00), (ii) extend the maturity date of the Loan, (iii) make certain
other modifications to the Loan terms; and

         WHEREAS, the Lender has agreed to grant Borrower's request, subject to
Borrower's execution and delivery of, and performance of the terms and
conditions set forth in, this Agreement.
<PAGE>

         NOW THEREFORE, for and in consideration of the above recitals and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:

         1. Recitals. The above recitals are incorporated herein and made a part
hereof.

         2. Loan Statement. Borrower and Lender hereby confirm that as of the
date hereof, (i) there is no accrued and unpaid interest under the Loan, and
(ii) there is no outstanding principal balance under the Loan.

         3. Loan Increase. Subject to Borrower's execution and delivery of, and
satisfaction of all of the terms and conditions of this Agreement, the Lender
shall contemporaneously herewith increase the amount of the Loan, and the
maximum principal amount that may be outstanding at any one time under the Loan,
to the sum of Three Million and no/100 Dollars ($3,000,000.00). The additional
Loan principal shall be disbursed in accordance with the terms and conditions of
the Loan Agreement.

         4. Note Payments/Maturity Date. Commencing July 5, 2007 and continuing
on the fifth (5th) day of each and every calendar month during the term of the
Loan, payments of interest only shall continue to be due and payable. The Loan
maturity date is hereby extended to August 5, 2007.

         5. Additional Modifications to Loan Terms. The Borrower and the Lender
hereby agree to the following additional modifications to certain of the Loan
terms:

            A. The maximum aggregate face amount of standby letters of credit
that the Lender agrees to issue to the Borrower (as referenced in the Note and
Loan Agreement) is hereby increased to Two Million and no/100 Dollars
($2,000,000.00).

            B. The minimum tangible net worth the Borrower is required to
maintain during the term of the Loan (as referenced in Section 5 of the Loan
Agreement) is hereby increased to Nine Million and no/100 Dollars
($9,000,000.00).

         6. Modification of Loan Documents.

            A. The Note, Security Agreement, Loan Agreement and remaining Loan
Documents are hereby modified to reflect and incorporate the terms and
provisions of the Loan modification as described in paragraphs 3 through 5 above
and elsewhere herein.

            B. The terms "Note", "Security Agreement", "Loan Agreement",
"Letters of Credit", "Line of Credit" and "Availability", and all other defined
documents as referenced in the Loan Documents, shall be deemed to mean such
documents, as modified by this Agreement. In addition, this Agreement shall be
deemed to be a Loan Document.

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<PAGE>

         7. Modification Costs. Borrower further agrees to pay to Lender at the
time of the execution of this Agreement, a Loan extension fee in the amount of
$1,500.00, which shall be inclusive of Lender's attorneys' fees in the amount of
$300.00 that were incurred in connection with thus Agreement.

         8. Ratification and Renewal. The Borrower hereby ratifies and renews
its covenants and agreements to pay the Loan in accordance with the terms and
provisions of the Note, as modified by this Agreement; and the Borrower
otherwise hereby ratifies and renews its covenants and agreements to perform,
comply with and be bound by all other terms and provisions of the Note and the
Loan Documents, all as modified by this Agreement. The Borrower also hereby
confirms that the Security Agreement continues to secure repayment of the Note,
as modified by this Agreement. Further, the Borrower covenants and warrants that
each and every provision of the Note and the Loan Documents, as modified by this
Agreement, are in full force and effect and are the lawful and binding
obligations of Borrower, enforceable in accordance with their respective terms.

         9. Waiver. The Borrower acknowledges Lender as the owner and holder of
the Note, and the secured party under the Security Agreement, and covenants and
agrees that there are no defenses, set-offs, or counter-claims against Lender,
with respect to the Note and the Loan Documents, as modified by the terms of
this Agreement, or otherwise, or with respect to the Loan or with respect to the
collection or enforcement of any of the same. The parties to this Agreement do
not intend this Agreement to be construed as a novation of the Note.

         10. Further Assurances. The parties agree to execute and deliver any
and all instruments and documents reasonably necessary or required from time to
time to effect the terms and intent of this Agreement.

         11. Entire Agreement. This Agreement contains the entire agreement of
the parties hereto with respect to the modification of the Loan, and no other
agreement, statement or promise made by any party hereto, or any employee,
officer, agent or attorney of any party hereto, shall be valid or binding.

         12. Binding Effect. Each and every of the terms and provisions of this
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective heirs, successors, personal representatives and
assigns.

         13. Governing Law. This Agreement shall be governed by, construed
under, and interpreted and enforced in accordance with the laws of the
Commonwealth of Virginia, but without regard for Virginia's laws or rules
regarding conflict or choice of laws.

         14. Severability. If any term, covenant or condition of this Agreement,
or the application thereof to any person or circumstance, shall to any extent be
invalid or unenforceable, the remainder of this Agreement, or the application of
such term, covenant or condition to other persons or circumstances, shall not be
affected hereby, and each term, covenant or condition of

                                     - 3 -
<PAGE>

this Agreement shall be valid and enforceable to the fullest extent permitted by
law.

         15. Headings. The captions and headings herein are for convenience of
reference only and in no way define or limit the scope or content of this
Agreement or in any way affect its provisions.

         16. Modification. The terms of this Agreement may not be changed,
waived, discharged or terminated orally, but only by an instrument in writing,
signed by the party against which enforcement of the change, waiver, discharge
or termination is asserted.

         17. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original but all of which together will
constitute one instrument.

         IN WITNESS WHEREOF, the parties have executed this Loan Modification
Agreement as of the date and year first written above.


                                       BORROWER:
                                       ---------

                                       SUTRON CORPORATION, a Virginia
                                       corporation

                                       By: /s/ Sidney C. Hooper
                                          --------------------------------------
                                          Sidney C. Hooper
                                          Treasurer

                                       LENDER:

                                       BRANCH BANKING AND TRUST COMPANY, a North
                                       Carolina banking corporation

                                       By: /s/ Lou V. Pham
                                          --------------------------------------
                                          Lou V. Pham
                                          Assistant Vice President




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