Document:

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                                                                   EXHIBIT 10.59

                             REMARKETING AGREEMENT

        This REMARKETING AGREEMENT, dated as of May 1, 2001 (the "Agreement"),
among Wells Fargo Brokerage Services, LLC (the "Remarketing Agent"), Frequency &
Time Systems, Inc., a Delaware corporation (the "Borrower"), and Wells Fargo
Bank Minnesota, National Association, as trustee (the "Trustee");

                                   WITNESSETH:

        WHEREAS, the Massachusetts Development Finance Agency (the "Issuer") has
issued its Industrial Development Revenue Bonds, Frequency & Time Systems Issue,
Series 2001 (the "Bonds"), pursuant to a Loan and Trust Agreement dated as of
May 1, 2001 (the "Loan Agreement"), among the Issuer, the Borrower and the
Trustee, as amended from time to time;

        WHEREAS, the Bonds and Loan Agreement provide, among other things, that
the owners of the Bonds (the "Owners") may elect (or may be required) in certain
instances to tender their Bonds for purchase upon the terms and conditions
contained in the Bonds and the Loan Agreement;

        WHEREAS, pursuant to the provisions of the Loan Agreement, Wells Fargo
Brokerage Services, LLC, has been appointed as remarketing agent for the Bonds
to perform certain duties, including the use of its best efforts to remarket any
Bonds tendered for purchase by the Owners; and

        WHEREAS, Wells Fargo Brokerage Services, LLC, has agreed to accept the
duties and responsibilities of the remarketing agent for the Bonds under the
Loan Agreement and this Agreement;

        NOW, THEREFORE, for and in consideration of the mutual covenants made
herein and other valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto agree as follows:

        Section 1. Definitions.

        (a) Unless otherwise defined herein, all capitalized terms shall have
the meanings ascribed to them in the Loan Agreement.

        (b) "Financing Documents" as such term is used herein includes the Bond
Purchase Agreement, the Reimbursement Agreement, the Credit Facility, the Loan
Agreement and any other document that has been executed or will be executed in
connection with the transactions contemplated by the foregoing documents.

        Section 2. Appointment of Remarketing Agent. Subject to the terms and
conditions contained herein, Wells Fargo Brokerage Services, LLC, hereby accepts
its appointment as Remarketing Agent for the Bonds. This Remarketing Agreement
is the agreement referenced in

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Section 314 of the Loan Agreement. The terms and conditions of the Loan
Agreement relating to the duties and obligations of the Remarketing Agent are
incorporated herein by reference.

        Section 3. Responsibilities of Remarketing Agent.

        (a) Subject to the terms and conditions set forth in this Remarketing
Agreement, Wells Fargo Brokerage Services, LLC, agrees to perform the duties of
the Remarketing Agent set forth in the Loan Agreement.

        (b) Remarketing of Tendered Bonds.

            (i) The Remarketing Agent shall use its best efforts to remarket
Bonds to be purchased as described in the Loan Agreement.

            (ii) The Remarketing Agent.

                (A) will, by giving written notice (an "Automatic Suspension
Notice") to the Issuer, the Borrower, the Trustee and the Bank, suspend its
remarketing efforts immediately upon receipt of notice from the Trustee of the
occurrence of an Event of Default under the Loan Agreement, which suspension may
continue only so long as the event continues to exist if, in the Remarketing
Agent's reasonable judgment, the continuance of the event has a material adverse
effect on its ability to remarket the Bonds; and

                (B) may suspend its remarketing efforts immediately upon the
occurrence of any of the following events, but only after notice (a
"Discretionary Suspension Notice") to the Issuer, the Borrower, the Trustee and
the Bank, which suspension will continue only so long as the event continues to
exist if, in the Remarketing Agent's reasonable judgment, the continuance of the
event has a material adverse effect on its ability to remarket the Bonds:

                   (1) a suspension or material limitation in trading in
               securities generally on the New York Stock Exchange;

                   (2) a general moratorium on commercial banking activities in
               New York is declared by either federal or New York State
               authorities;

                   (3) the engagement by the United States in hostilities
               resulting in a declaration of war or national emergency, or the
               occurrence of any other outbreak of hostilities or national or
               international calamity or crisis, financial or otherwise;

                   (4) the enactment of a federal law, or the rendering of a
               decision by a court of the United States, or the issuance or
               making of a stop order, ruling, regulation or official statement
               by, or on behalf of, the United States Securities and Exchange
               Commission or other governmental agency having jurisdiction of
               the subject matter, in any such case to the effect that, the
               offering or sale of obligations of the general character of

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               the Bonds, or the remarketing of the Bonds, as contemplated
               hereby, is or would be in violation of any provision of the
               Securities Act of 1933, as amended (the "Securities Act") and as
               then in effect; or the Securities Exchange Act of 1934, as
               amended (the "Exchange Act") and as then in effect, or the Trust
               Indenture Act of 1939, as amended (the "Trust Indenture Act") and
               as then in effect, or with the purpose or effect of otherwise
               prohibiting the offering or sale of obligations of the general
               character of the Bonds, or the Bonds, as contemplated hereby;

                   (5) any event shall occur or information shall become known,
               which, in the Remarketing Agent's reasonable judgment, makes
               untrue, incorrect or misleading in any material respect any
               statement or information contained in the then most current
               Disclosure Document (defined in Section 6 below) provided to the
               Remarketing Agent in connection with the performance of its
               duties hereunder, whether provided pursuant to Section 6 hereof
               or otherwise, or causes such document to contain an untrue,
               incorrect or misleading statement of a material fact or to omit
               to state a material fact required to be stated therein or
               necessary to make the statements made therein, in light of the
               circumstances under which they were made, not misleading;

                   (6) any governmental authority shall impose, as to the Bonds,
               or obligations of the general character of the Bonds, any
               material restrictions not now in force, or increase materially
               those now in force;

                   (7) any of the material representations and warranties of the
               Borrower made hereunder shall not have been true and correct on
               the date made; or

                   (8) the Borrower shall fail to observe any of the material
               covenants or agreements made herein.

        Section 4. Remarketing Agent Not to Act as Underwriter. It is understood
and agreed that the Remarketing Agent, in entering into this Remarketing
Agreement, is obligated to remarket the Bonds upon consideration of prevailing
financial market conditions pursuant to Section 312 of the Loan Agreement. The
Remarketing Agent shall not, in fulfilling its obligations hereunder, act as an
underwriter for Bonds and is in no way obligated, directly or indirectly, to
advance its own funds to purchase Bonds delivered to it pursuant to the Loan
Agreement.

        Section 5. Resignation and Removal of Remarketing Agent. The Remarketing
Agent may resign or be removed pursuant to the provisions of the Loan Agreement.

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        Section 6. Disclosure Materials.

        (a) General. If the Remarketing Agent determines that it is necessary or
desirable to use an official statement, private placement memorandum or other
disclosure document with respect to the Bonds (each, including all amendments
and supplements thereto, a "Disclosure Document") in connection with its
remarketing of the Bonds, the Remarketing Agent will notify the Issuer and the
Borrower, and the Borrower, at its expense, will provide the Remarketing Agent
with the Disclosure Document satisfactory to the Remarketing Agent and the
Issuer and their respective counsel. The Borrower will supply the Remarketing
Agent with such number of copies of the Disclosure Document as the Remarketing
Agent requests from time to time, and the Borrower will amend the Disclosure
Document (and all documents incorporated by reference therein) so that at all
times the Disclosure Document will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. In connection with the use of any Disclosure Document by the
Remarketing Agent in its remarketing of the Bonds, the Borrower, at its expense,
will furnish to the Remarketing Agent such certificates, accountants' letters
and opinions of counsel as the Remarketing Agent reasonably requests. In
addition, the Borrower, at its expense, will take all steps reasonably requested
by the Remarketing Agent that the Remarketing Agent or its counsel may consider
necessary or desirable to (a) register the sale of the Bonds by the Remarketing
Agent under any federal or state securities law or qualify the Loan Agreement
under the Trust Indenture Act, or (b) enable the Remarketing Agent to establish
a "due diligence" defense to any action commenced against the Remarketing Agent
in respect of any Disclosure Document.

        (b) Compliance with Rule 15c2-12. In the event the Remarketing Agent is
asked to remarket the Bonds in any situation that requires compliance with Rule
15c2-12 of the Exchange Act (the "Rule"):

            (i) the Borrower will provide the Remarketing Agent with a
Disclosure Document that the Borrower deems final as of its date (exclusive of
pricing and other sales information permitted to be omitted by the Rule), prior
to the date the Remarketing Agent bids for, offers or sells any Bonds;

            (ii) the Borrower will provide the Remarketing Agent with such
number of copies of any preliminary placement memorandum or other Disclosure
Document prepared in connection therewith, as the Remarketing Agent may need to
supply at least one copy thereof to each potential customer who requests it;

            (iii) the Borrower shall provide the Remarketing Agent within seven
(7) business days after the interest rate is determined or by the time "money
confirmations" are to be sent to customers, whichever is earlier, with a number
of copies of the final Disclosure Document adequate to provide at least one copy
of such final Disclosure Document to any customer or any potential customer for
a period commencing on the date such final Disclosure Document is available and
extending for the underwriting period as defined in the Rule (the "Underwriting
Period") and, thereafter, for as long as may be required by the Rule. During the
Underwriting Period, the Borrower agrees to update, by written supplement or
amendment or

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otherwise, the final Disclosure Document such that at all times during such
period the final Disclosure Document will not contain an untrue statement of a
material fact or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; and

            (iv) the Borrower will undertake, in a written agreement or contract
for the benefit of Owners, to provide the information required by paragraph
(b)(5) of the Rule to the persons or entities and at the times required by
paragraph (b)(5) of the Rule.

        (c) Subsequent Events. In the event that there are any additional
regulatory requirements, amendments or modifications to the securities laws
which are applicable to the Remarketing Agent's performance of its obligations
under this Remarketing Agreement, the Borrower shall be required to take all
steps reasonably requested by the Remarketing Agent that the Remarketing Agent
or its counsel may consider necessary or desirable in order to comply with such
additional requirements, as a condition precedent to the Remarketing Agent's
performing its obligations hereunder.

        Section 7. Indemnification and Contribution.

        (a) The Borrower agrees to indemnify and hold harmless the Remarketing
Agent, and each person, if any, who controls the Remarketing Agent within the
meaning of Section 15 of the Securities Act, to the extent permitted under
applicable law, against any and all losses, claims, damages, liabilities and
expenses (including reasonable costs of investigation) caused by any untrue
statement or alleged untrue statement of a material fact with respect to the
Borrower, Datum, Inc., or the Project contained in a Disclosure Document
provided pursuant to Section 6 hereof or in any amendment or supplement thereto,
or caused by any omission or alleged omission to state therein, in light of the
circumstances under which they were made, not misleading, except insofar as such
losses, claims, damages, liabilities or expenses are caused by any such untrue
statement or omission or allegation thereof based upon information furnished in
writing to the Borrower by the Remarketing Agent expressly for the use in
connection therewith.

        (b) If any action or claim (including any governmental investigation)
shall be brought or asserted against the Remarketing Agent or any person so
controlling the Remarketing Agent based upon a Disclosure Document, and in
respect of which indemnity may be sought from the Borrower, the Remarketing
Agent or such controlling person shall promptly notify the Borrower in writing,
and the Borrower shall assume the defense thereof, including the employment of
counsel and the payment of all expenses. The Remarketing Agent or any such
controlling person shall have the right to employ separate counsel in any such
action and participate in the defense thereof, but the fees and expenses of such
counsel shall be at the expense of the Remarketing Agent or such controlling
person unless (i) the employment thereof has been specifically authorized by the
Borrower, (ii) the Borrower has failed to assume the defense and employ counsel,
or (iii) the named parties to any such action (including any impleaded parties)
include both the Remarketing Agent or such controlling person and the Borrower,
and representation of the Remarketing Agent or such controlling person and the
Borrower by counsel representing the Borrower would be inappropriate due to
actual or potential differing interests between the Borrower and the other named
party (in which case the Borrower shall not have the right to

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assume the defense of such action on behalf of the Remarketing Agent or such
controlling person, it being understood, however, that the Borrower shall not,
in connection with any one such action or separate but substantially similar or
related actions arising out of the same general allegations or circumstances, be
liable for the reasonable fees and expenses of more than one separate firm of
attorneys at any point in time for the Remarketing Agent and such controlling
persons, which firm shall be designated in writing by the Remarketing Agent).
The Borrower shall not be liable for any settlement of any such action effected
without its consent, but if settled with the consent of the Borrower or if there
is a final judgment for the plaintiff in any such action, the Borrower will
indemnify and hold harmless any indemnified person from and against any loss or
liability by reason of such settlement or judgment. The Borrower shall not,
without the prior written consent of the Remarketing Agent, effect any
settlement of any pending or threatened proceeding in respect of which the
Remarketing Agent is or could have been a party and indemnity could have been
sought hereunder by the Remarketing Agent, unless such settlement includes an
unconditional release of the Remarketing Agent from all liability or claims that
are the subject matter of such proceeding.

        (c) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in Section 7(a) hereof
is due in accordance with its terms but, for any reason, is held by a court to
be unavailable on grounds of policy or otherwise, the Borrower and the
Remarketing Agent will contribute to the total losses, claims, damages and
liabilities (including legal or other expenses of investigation or defense) to
which the Borrower and the Remarketing Agent may be subject in such proportion
so that the Remarketing Agent is responsible for that portion represented by the
percentage that the fee to be paid to the Remarketing Agent pursuant to Section
8 hereof bears to the principal amount of the Bonds under this Remarketing
Agreement and the Borrower is responsible for the balance. In no case, however,
will the Remarketing Agent be responsible for any amount in excess of the fee
applicable to the Bonds remarketed by the Remarketing Agent under this
Remarketing Agreement, and no person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) will be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this paragraph, each person who controls the
Remarketing Agent within the meaning of Section 15 of the Securities Act shall
have the same rights to contribution as the Remarketing Agent, and those persons
who so control the Borrower and each partner of the Borrower will have the same
rights to contribution as the Borrower, subject to the foregoing sentence. Any
party entitled to contribution will, promptly after receipt of notice of
commencement of any action, suit or proceeding against such party in respect of
which a claim for contribution may be made against another party or parties
under this paragraph, notify each party from whom contribution may be sought,
but the failure to give such notice will not relieve the party from whom
contribution may be sought from any obligation it may have to the party entitled
to contribution.

        Section 8. Fees and Expenses. For the Remarketing Agent's services under
this Remarketing Agreement and the Loan Agreement, the Borrower will pay the
Remarketing Agent annually in advance a fee of 1/8 of one percent per annum
(.125%) of the aggregate principal amount of Bonds outstanding on the payment
date commencing on the Closing Date and on each May 1 thereafter (with an
appropriate pro rata adjustment for the period ending April 30, 2002). The
Remarketing Agent will give immediate notice to the Trustee of the non-payment
of the

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Remarketing Agent's fee on any date on which the fee is due and payable.
If applicable, when Bonds are remarketed in connection with the conversion of
the interest rate to another interest rate mode permitted under the Loan
Agreement, or in the event that Bonds are remarketed in connection with a
purchase of the Bonds by the Trustee in lieu of redemption, the Borrower and the
Remarketing Agent will agree on a fee.

        The Borrower will pay all expenses of delivering remarketed Bonds and
reimburse the Remarketing Agent for all direct, out-of-pocket expenses incurred
by it as Remarketing Agent, including reasonable counsel fees and disbursements.

        Section 9. Representations, Warranties, Covenants and Agreements of the
Borrower. The Borrower, by its acceptance hereof, represents, warrants,
covenants and agrees with the Remarketing Agent that it:

        (a) is a Delaware corporation duly organized and validly existing under
the laws of the State of Delaware, and qualified to do business in the State of
Massachusetts, and has full legal right, power and authority to own its
properties and to conduct its business as described in the Disclosure Document
and to enter into and to carry out and consummate the transactions contemplated
by the Financing Documents and the Disclosure Document, and is duly qualified to
transact business and are in good standing wherever failure to obtain such
qualification and/or standing would have a material adverse effect on the
Borrower;

        (b) has full power and authority to take all actions required or
permitted to be taken by the Borrower by or under, and to perform and observe
the covenants and agreements on its part contained in, this Remarketing
Agreement and any other instrument or agreement relating thereto to which the
Borrower is a party;

        (c) has, on or before the date hereof, duly taken all action necessary
to be taken by it prior to such date to authorize:

            (i) the execution, delivery and performance of this Remarketing
Agreement, the Financing Documents to which the Borrower is a party, and any
other instrument or agreement that the Borrower is a party to and that have been
executed or will be executed in connection with the transactions contemplated by
the foregoing documents; and

            (ii) the carrying out, giving effect to, consummation and
performance of the transactions and obligations contemplated by the foregoing
agreements; and

        (d) will promptly notify the Remarketing Agent by electronic means of
any material adverse changes that may affect the remarketing of the Bonds, the
disclosure in the then current Disclosure Document prepared pursuant to Section
6 hereof or any fact or circumstance that may constitute, or with the passage of
time will constitute, an event of default under the Loan Agreement, any
Financing Document, or any other reimbursement agreement or collateral agreement
of a Bank.

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        Section 10. Term of Agreement. This Remarketing Agreement shall become
effective on the Closing Date and shall continue in full force and effect until
the payment in full of the Bonds, the earlier conversion of all Bonds to another
interest rate mode, or the Remarketing Agent has been replaced or has resigned.

        Section 11. Governing Law. This Remarketing Agreement shall be governed
by and construed in accordance with the laws of The Commonwealth of
Massachusetts.

        Section 12. Dealing in Bonds by the Remarketing Agent. The Remarketing
Agent, in its individual capacity, may in good faith buy, sell, own, hold and
deal in any of the Bonds, including, without limitation, any Bonds offered and
sold by the Remarketing Agent pursuant to this Remarketing Agreement, and may
join in any action that any Owner may be entitled to take with like effect as if
it did not act in any capacity, either as principal or agent, may also engage in
or be interested in any financial or other transaction with the Issuer and may
act as depository, trustee, or agent for any committee or body of Owners secured
hereby or other obligations of the Issuer as freely as if it did not act in any
capacity hereunder.

        Section 13. Intention of Parties. It is the express intention of the
parties hereto that any purchase, sale or transfer of any Bonds, as herein
provided, shall not constitute or be construed to be the extinguishment of any
Bonds or the indebtedness represented thereby or the reissuance of any Bonds.

        Section 14. Conflict. Notwithstanding anything to the contrary that may
be contained in this Remarketing Agreement or in the Loan Agreement, in the
event of a conflict between the terms of this Remarketing Agreement and the
terms of the Loan Agreement, the terms of the Loan Agreement in all such
instances shall be controlling.

        Section 15. Notices. Except as otherwise specifically provided in this
Remarketing Agreement, all notices, demands and formal actions under this
Remarketing Agreement shall be in writing and either (i) hand-delivered, (ii)
sent by electronic means, or (iii) mailed by registered or certified mail,
return receipt requested, postage prepaid, to:

               The Remarketing Agent:       Wells Fargo Brokerage Services, LLC
                                            MAC: 9303-095
                                            608 Second Avenue South, 9th Floor
                                            Minneapolis, MN  55479-0146
                                            Attention:  Laurie Mount

               The Company:                 Frequency & Time Systems, Inc.
                                            34 Tozer Road
                                            Beverly, MA 01915
                                            Attention:  President

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               The Trustee:                 Wells Fargo Bank Minnesota, National
                                            Association
                                            11000 Broken Land Parkway
                                            Columbia, MD  21044
                                            Attention:  Corporate Trust, Trustee
                                            Administration

The Remarketing Agent, the Borrower and the Trustee may by written notice (an
"Address Change Notice") given under this Remarketing Agreement, designate other
addresses to which subsequent notices, requests, reports or other communications
shall be directed. Notices to other interested parties as are required under the
Loan Agreement shall be sent to the respective addresses set forth in the Loan
Agreement and in the manner described in the Loan Agreement.

        Section 16.   Miscellaneous.

        (a) This Remarketing Agreement shall inure to the benefit of and be
binding only upon the parties hereto and their respective successors and
assigns. The terms "successors" and "assigns" shall not include any purchaser of
any of the Bonds merely because of such purchase. No Owner or other third party
shall have any rights or privileges hereunder.

        (b) All of the representations and warranties of the Borrower and the
Remarketing Agent in this Remarketing Agreement shall remain operative and in
full force and effect, regardless of (i) any investigation made by or on behalf
of the Remarketing Agent or the Borrower (ii) the offering and sale of and any
payment for any Bonds hereunder or (iii) except for Section 9(d), termination or
cancellation of this Remarketing Agreement.

        (c) This Remarketing Agreement and each provision hereof may be amended,
changed, waived, discharged or terminated only by an instrument in writing
signed by the parties hereto and only with the prior written consent of the
Credit Facility Issuer.

        (d) Nothing herein shall be construed to make any party an employee of
the other or to establish any fiduciary relationship between the parties except
as expressly provided herein.

        (e) If any provision of this Remarketing Agreement shall be held or
deemed to be or shall, in fact, be invalid, inoperative or unenforceable for any
reason, such circumstances shall not have the effect of rendering any other
provision or provisions of this Remarketing Agreement invalid, inoperative or
unenforceable to any extent whatsoever.

        (f) This Remarketing Agreement may be executed in several counterparts,
each of which shall be regarded as an original and all of which shall constitute
one and the same document.

        17. Severability. This Remarketing Agreement has been entered into by
the Borrower, the Remarketing Agent and the Trustee for the benefit of the
Owners, and in the event any one or more of the provisions of this Remarketing
Agreement shall, for any reason, be held to be illegal or invalid, such
illegality or invalidity shall not affect any other provisions of this
Remarketing Agreement, and this Remarketing Agreement shall be construed and
enforced as if

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such illegal and invalid provisions had not been contained herein so as to
continue to provide to the Owners the benefits hereof.

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        IN WITNESS WHEREOF, the Borrower, the Remarketing Agent and the Trustee
have caused this Remarketing Agreement to be executed in their respective
corporate names and attested by their duly authorized officers, all as of the
date first above written.

                                         WELLS FARGO BROKERAGE SERVICES, LLC, as
                                         Remarketing Agent

                                         By ____________________________________
                                                  Senior Vice President

                                         FREQUENCY & TIME SYSTEMS, INC., a
                                         Delaware corporation

                                         By ____________________________________
                                                        President

                                         WELLS FARGO BANK MINNESOTA, NATIONAL
                                         ASSOCIATION

                                         By ____________________________________
                                                Its ____________________________

Consented to by:

MASSACHUSETTS DEVELOPMENT
FINANCE AGENCY

By _______________________________
          Its ____________________

WELLS FARGO BANK, N.A,

By _______________________________
           Its ___________________

                                      -11-<PAGE>   1
                                                                   Exhibit 10.60

                               AMENDMENT NO. 2 TO

                  SECOND AMENDED AND RESTATED CREDIT AGREEMENT

        This Amendment No. 2 to Second Amended and Restated Credit Agreement
("Amendment") dated as of May 29, 2001, is made by and between Datum Inc., a
Delaware corporation ("Borrower"), and Wells Fargo Bank, National Association
("Bank").

                                    RECITALS

        This Amendment is made with reference to the following facts:

        A. Borrower is currently indebted to Bank pursuant to the terms and
conditions of that certain Second Amended and Restated Credit Agreement between
Borrower and Bank dated as of July 7, 2000 (as amended, extended, renewed,
supplemented or otherwise modified, the "Credit Agreement"). Capitalized terms
used herein and not otherwise defined shall have the meanings set forth for such
terms in the Credit Agreement.

        B. Subject to the terms and conditions set forth herein, Borrower and
Bank have agreed to amend the Credit Agreement, and Bank has agreed to waive a
provision of the Credit Agreement, in each case as set forth below.

                                    AGREEMENT

        NOW, THEREFORE, in consideration of the mutual covenants and benefits
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are acknowledged, Borrower and Bank agree as follows:

        1. Section 1.1.

            (a) The following existing definitions in Section 1.1 of the Credit
Agreement are amended to read in full as set forth below:

               "'Line of Credit Termination Date' means May 29, 2003."

               "'Real Property Collateral' means, as of any date of
        determination, the real property owned by the Loan Parties in which the
        Bank has a first priority perfected Lien."

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<PAGE>   2

            (b) Section 1.1 of the Credit Agreement is amended by adding the
following definitions in the appropriate alphabetical locations:

               "'Loan and Trust Agreement' means that certain Loan and Trust
        Agreement dated as of May 1, 2001 among Massachusetts Development
        Finance Agency, Systems and Wells Fargo Bank Minnesota, National
        Association, as Trustee, concerning the issue of $2,725,000 of
        Massachusetts Development Finance Agency Variable Rate Demand Revenue
        Bonds Frequency & Time Systems Issue, Series 2001."

               "'Maximum Line of Credit Amount' means, as of any date of
        determination, the sum of (a) $12,500,000 plus (b) the amount of all
        principal payments received by Bank on the Term Note subsequent to the
        Second Amendment Effective Date."

               "'Second Amendment Effective Date' means May 29, 2001."

               "'Systems Bonds' means the 'Bonds' as defined in the Loan and
        Trust Agreement."

               "'Systems Letter of Credit' means the Letter of Credit in the
        amount of $2,758,596 issued in favor of Wells Fargo Bank Minnesota,
        National Association, as Trustee, as a credit enhancement in support of
        the Massachusetts Development Finance Agency Variable Rate Demand
        Revenue Bonds Frequency & Time Systems Issue, Series 2001, the proceeds
        of which Bonds will be used to finance the acquisition, construction and
        equipping of manufacturing facilities of Systems located in Beverly,
        Massachusetts."

               "'Systems Trustee' means Wells Fargo Bank Minnesota, National
        Association, as Trustee under the Loan and Trust Agreement, and any
        successor trustee."

            (c) The following existing definitions in Section 1.1 of the Credit
Agreement are deleted in their entirety: "Borrowing Base", "Borrowing Base
Certificate", "Borrowing Base Parties", "Eligible Receivables" and "Eligible
Receivables Component".

        2. Section 2.1(a). Section 2.1(a) of the Credit Agreement is amended to
read in full as follows:

               "(a) Line of Credit. Subject to the terms and conditions of this
        Agreement, Bank hereby agrees to make Advances to Borrower from time to
        time up to and including the Line of Credit Termination Date, not to
        exceed at any time the Maximum Line of Credit Amount ('Line of Credit'),
        the proceeds of which shall be used for general working capital
        purposes. Borrower's obligation to repay Advances under the Line of
        Credit shall be evidenced by a promissory note substantially in the form
        of Exhibit B attached hereto ('Line of Credit Note'), all terms of which
        are incorporated herein by this reference."

        3. Section 2.1(b). Section 2.1(b) of the Credit Agreement is amended to
read in full as follows:

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<PAGE>   3

               "(b) [Reserved]."

        4. Section 2.1(d).

               (a) Section 2.1(d)(i).

                   (i) Section 2.1(d)(i) of the Credit Agreement is amended by
               changing the reference to "Five Hundred Thousand Dollars
               ($500,000.00)" therein to "Three Million Five Hundred Thousand
               Dollars ($3,500,000.00)"; and

                   (ii) Section 2.1(d)(i) of the Credit Agreement is further
               amended by changing the reference to "June 15, 2002" therein to
               "May 29, 2004".

            (b) Section 2.1(d)(iii). The following new Section 2.1(d)(iii) is
hereby added to the Credit Agreement immediately after Section 2.1(d)(ii):

                   "(iii) Borrower agrees that Bank may notify any beneficiary
               of a Letter of Credit of the occurrence of an Event of Default.
               In addition, Borrower agrees that upon the occurrence of an Event
               of Default, Bank may request that the Systems Trustee accelerate
               the Systems Bonds."

            (c) Section 2.1(d)(iv). The following new Section 2.1(d)(iv) is
hereby added to the Credit Agreement immediately after Section 2.1(d)(iii):

                   "(iv) (a) Borrower agrees to cause Systems to make an
               optional redemption of the Systems Bonds under Section 310(d) of
               the Loan and Trust Agreement on the Interest Payment Date (as
               defined in the Loan and Trust Agreement) occurring on the first
               Business Day (as defined in the Loan and Trust Agreement) of each
               of the following calendar months (provided that the Systems
               Letter of Credit is outstanding on each such date and provided
               further that each such optional redemption is permitted under the
               Loan and Trust Agreement), in the principal amounts indicated
               below:

<TABLE>
<CAPTION>
                     Calendar Month                      Principal Amount
                     --------------                      ----------------
<S>                                                      <C>
                     December 2001                       $30,000
                     June 2002                           $30,000
                     December 2002                       $30,000
                     June 2003                           $30,000
                     December 2003                       $30,000
                     June 2004                           $30,000
                     December 2004                       $35,000
                     June 2005                           $35,000
                     December 2005                       $35,000
</TABLE>

                                      -3-
<PAGE>   4

<TABLE>
<S>                                                      <C>
                     June 2006                           $35,000
</TABLE>

                   (b) With respect to the Systems Letter of Credit, the 'Bank
            Rate' as defined in the Loan and Trust Agreement, as of any date of
            determination, shall be an amount equal to 50 basis points in excess
            of the then applicable interest rate payable pursuant to the Loan
            and Trust Agreement on the Systems Bonds which are not Borrower
            Bonds (as defined in the Loan and Trust Agreement) or Bank Bonds (as
            defined in the Loan and Trust Agreement)."

        5. Section 2.2(b). Section 2.2(b) of the Credit Agreement is amended to
read in full as follows:

            "(b) [Reserved]."

        6. Section 2.3. Section 2.3 of the Credit Agreement is amended to read
in full as follows:

            "2.3 [Reserved]."

        7. Section 2.4(c)A. The following new Section 2.4(c)A is added to the
Credit Agreement immediately after Section 2.4(c):

            "(c)A Annual Line of Credit Fee. On the Second Amendment Effective
        Date and on each anniversary thereof, Borrower shall pay to Bank a
        nonrefundable line of credit fee equal to Ten Thousand Dollars
        ($10,000.00)."

        8. Section 2.4(e). Section 2.4(e) is amended by changing the reference
to "one-half percent (0.50%) per annum" therein to "three-tenths of one percent
(0.30%) per annum".

        9. Section 2.7(b)(ii). Section 2.7(b)(ii) of the Credit Agreement is
amended to read in full as follows:

            "(ii) [Reserved]; and"

        10. Section 2.9. The third sentence of Section 2.9 of the Credit
Agreement is amended to read in full as follows:

            "In connection with the foregoing, Borrower acknowledges that Bank
            may conduct periodic audits and appraisals of the Collateral, at
            such intervals as Bank may reasonably require and that such audits
            and appraisals may be performed by employees of Bank or by
            independent parties."

        11. Section 5.3(c). Section 5.3(c) of the Credit Agreement is amended to
read in full as follows:

                                      -4-
<PAGE>   5

            "(c) [Reserved]."

        12. Section 5.9.

            (a) Section 5.9(a) of the Credit Agreement is amended to read in
full as follows:

                   "(a) Quick Ratio at all times greater than 1.3:1.0, with
            'Quick Ratio' defined as the aggregate of unrestricted cash,
            unrestricted marketable securities and receivables readily
            convertible into cash divided by total current liabilities. In
            calculating the foregoing, outstanding Advances on the Line of
            Credit and amortization payments on the Term Loan shall be deemed
            current liabilities."

            (b) The first sentence of Section 5.9(c) of the Credit Agreement is
amended to read in full as follows:

            "EBITDA Coverage Ratio greater than 2.0 to 1.0 as of the end of each
            fiscal quarter, with 'EBITDA' defined as net profit before tax plus
            interest expense (net of capitalized interest expense), depreciation
            expense and amortization expense, and with 'EBITDA Coverage Ratio'
            defined as EBITDA for the four fiscal quarter period ending as of
            the date of determination (the 'Test Period') divided by the
            aggregate of total interest expense plus the amount of scheduled
            amortization on long-term debt (including, without limitation, the
            Term Loan) and the amount of scheduled amortization on subordinated
            debt paid during the Test Period."

        13. Section 6.2. Section 6.2 of the Credit Agreement is amended to read
in full as follows:

               "Section 6.2 CAPITAL EXPENDITURES. Make, or permit any Guarantor
        to make, any additional investment in fixed assets during the period
        from January 1, 2001 through and including December 31, 2002 in excess
        of an aggregate of $16,500,000 for Borrower and all Guarantors
        combined."

        14. Section 8.3. Notwithstanding anything to the contrary contained in
the Credit Agreement, the references to "Existing Loan Documents" in Section 8.3
shall not include the Vision Drive Mortgage or any modifications thereto.

        15. Exhibit A. Exhibit A attached to the Credit Agreement is amended to
read in full as follows:

            "[Reserved]."

        16. Exhibit B. Exhibit B attached to the Credit Agreement is replaced in
its entirety by Exhibit B attached hereto as Annex 1.

                                      -5-
<PAGE>   6

        17. Exhibit C. Exhibit C attached to the Credit Agreement is replaced in
its entirety by Exhibit C attached hereto as Annex 2.

        18. Waiver of Section 2.1(d)(i). Bank hereby waves the limitation in
Section 2.1(d)(i) of the Credit Agreement which provides that Letters of Credit
be issued for the account of Borrower to the extent necessary to permit the
issuance of the Systems Letter of Credit as a "Letter of Credit" under the
Credit Agreement, which Letter of Credit shall be for the account of Systems.

        19. Release of Lien on Vision Drive Real Property. Bank agrees to
reconvey the Vision Drive Mortgage to Austin-Datum (successor in interest to
Austron) subsequent to the Second Amendment Effective Date.

        20. Conditions Precedent. The effectiveness of this Amendment and Bank's
agreements set forth herein are subject to the satisfaction of each of the
following conditions precedent:

            20.1 Documentation. Borrower shall have delivered or caused to be
delivered to Bank, at Borrower's sole cost and expense, the following, each of
which shall be in form and substance satisfactory to Bank:

               (a) The executed original of this Amendment;

               (b) The executed original of a Fourth Amended and Restated
        Revolving Line of Credit Note in the form attached hereto as Annex 1;

               (c) The executed original of a First Amended and Restated Term
        Note in the form attached hereto as Annex 2;

               (d) Written consent of Guarantors attached hereto as Annex 3; and

               (e) such authorization documents with respect to Guarantors as
        Bank shall reasonably require.

            20.2 Representations and Warranties. All of the representations and
warranties of Borrower contained herein shall be true and correct on and as of
the date of execution hereof and no Event of Default shall have occurred and be
continuing under the Credit Agreement or any of the other Loan Documents, as
modified hereby.

        21. Representations And Warranties. Borrower makes the following
representations and warranties to Bank as of the date hereof, which
representations and warranties shall survive the execution, termination or
expiration of this Amendment and shall continue in full force and effect until
the full and final satisfaction and discharge of all obligations of Borrower to
Bank under the Credit Agreement and the other Loan Documents:

                                      -6-
<PAGE>   7

            21.1 Reaffirmation of Prior Representations and Warranties. Borrower
hereby reaffirms and restates as of the date hereof, all of the representations
and warranties made by Borrower in the Credit Agreement and the other Loan
Documents, except to the extent such representations and warranties specifically
relate to an earlier date.

            21.2 No Default. No Event of Default or other default has occurred
and remains continuing under any of the Loan Documents.

            21.3 Due Execution. The execution, delivery and performance of this
Amendment and any instruments, documents or agreements executed in connection
herewith are within the powers of Borrower and the other Loan Parties party
thereto, have been duly authorized by all necessary action, and do not
contravene any law, the articles of incorporation, bylaws, articles of
organization, operating agreement, partnership agreement or other organizational
documents of such parties, result in a breach of, or constitute a default under,
any contractual restriction, indenture, trust agreement or other instrument or
agreement binding upon any of such parties.

            21.4 No Further Consent. The execution, delivery and performance of
this Amendment and any documents or agreements executed in connection herewith
do not require any consent or approval not previously obtained of any
governmental agency, equity holder, beneficiary or creditor of Borrower.

            21.5 Binding Agreement. This Amendment, and each of the other
instruments, documents and agreements executed in connection herewith constitute
the legal, valid and binding obligation of Borrower or other Loan Parties party
thereto and are enforceable against such parties in accordance with their terms,
except as such enforceability may be limited by bankruptcy, insolvency,
moratorium, reorganization or similar laws or equitable principles relating to
or limiting creditors' rights generally.

        22. Miscellaneous

            22.1 Recitals Incorporated. The Recitals set forth above are
incorporated into and are made a part of this Amendment.

            22.2 Further Assurances. Borrower, at its sole cost and expense,
agrees to execute and deliver all documents and instruments and to take all
other actions as may be specific ally provided for herein and as may be required
in order to consummate the purposes of this Amendment. Borrower shall diligently
and in good faith pursue the satisfaction of any conditions or contingencies in
this Amendment.

            22.3 No Third Parties. Except as specifically provided herein, no
third party shall be benefitted by any of the provisions of this Amendment; nor
shall any such third party have the right to rely in any manner upon any of the
terms hereof, and none of the covenants, representations, warranties or
agreements herein contained shall run in favor of any third party.

                                      -7-
<PAGE>   8

            22.4 Time is of the Essence. Time is of the essence for the
performance of all obligations and the satisfaction of all conditions of this
Amendment. The parties intend that all time periods specified in this Amendment
shall be strictly applied, without any extension (whether or not material)
unless specifically agreed to in writing by all parties hereto.

            22.5 Costs and Expenses. In addition to the obligations of Borrower
under the Credit Agreement, Borrower agrees to pay all costs and expenses
(including without limitation reasonable attorneys' fees) expended or incurred
by Bank in connection with the negotiation, documentation and preparation of
this Amendment and any other documents executed in connection herewith, and in
carrying out the terms of this Amendment, whether incurred before or after the
effective date hereof.

            22.6 Integration; Interpretation. The Loan Documents, including this
Amendment and the documents, instruments and agreements executed in connection
herewith, contain or expressly incorporate by reference the entire agreement of
the parties with respect to the matters contemplated herein and supersede all
prior negotiations, discussions and correspondence. The Loan Documents shall not
be modified except by written instrument executed by all parties thereto.

            22.7 Counterparts and Execution. This Amendment may be executed in
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same instrument. However, this Amendment
shall not be binding on Bank until all parties have executed it.

            22.8 Governing Law. This Amendment shall be governed by and
construed in accordance with the laws of the State of California.

            22.9 Non-Impairment of Loan Documents. On the date all conditions
precedent set forth herein are satisfied in full, this Amendment shall be a part
of the Credit Agreement. Except as expressly provided in this Amendment or in
any other document, instrument or agreement executed by Bank, all provisions of
the Loan Documents shall remain in full force and effect, and Bank shall
continue to have all its rights and remedies under the Loan Documents.

            22.10 No Waiver. Nothing herein shall be deemed a waiver by Bank of
any Event of Default, and nothing herein shall be deemed a waiver by Bank of any
other default under the Loan Agreement or any document executed in connection
with the Loan Agreement. No delay or omission of Bank to exercise any right,
remedy or power under any of the Loan Documents shall impair such right, remedy
or power or be construed to be a waiver of any default or an acquiescence
therein, and single or partial exercise of any such right, remedy or power shall
not preclude other or further exercise thereof or the exercise of any other
right, remedy or power. No waiver of any term, covenant, or condition shall be
deemed to waive Bank's right to enforce such term, covenant or condition at any
other time.

                                      -8-
<PAGE>   9

            22.11 Successors and Assigns. The terms of this Amendment shall be
binding upon and inure to the benefit of the successors and assigns of the
parties to this Amendment.

        IN WITNESS WHEREOF, this Amendment has been duly executed as of the date
first set forth above.

DATUM INC.,                                  WELLS FARGO BANK, NATIONAL
a Delaware corporation                       ASSOCIATION

By:__________________________                By:__________________________
     Name:                                        Name:
     Title:                                       Title:

                                      -9-
<PAGE>   10
                                                                         Annex 1

                                    EXHIBIT B

            FOURTH AMENDED AND RESTATED REVOLVING LINE OF CREDIT NOTE

$16,000,000.00                                                Irvine, California
                                                                    May 29, 2001

        FOR VALUE RECEIVED, the undersigned DATUM INC., a Delaware corporation
("Borrower") promises to pay to the order of WELLS FARGO BANK, NATIONAL
ASSOCIATION ("Bank") at its office at Orange Coast Regional Commercial Banking
Office, 2030 Main Street, Suite 900, Irvine, California 92614, or at such other
place as the holder hereof may designate, in lawful money of the United States
of America and in immediately available funds, the principal sum of Sixteen
Million Dollars ($16,000,000.00), or so much thereof as may be advanced and be
outstanding, with interest thereon, to be computed on each advance from the date
of its disbursement as set forth herein. This Note amends and restates in its
entirety that certain Third Amended and Restated Revolving Line of Credit Note
dated July 7, 2000 executed and delivered by Borrower to the order of Bank in
the original principal amount of up to $10,000,000.00 (the "Prior Note").
Amounts outstanding and committed under the Prior Note shall, upon the
effectiveness of this Note be deemed to be outstanding and committed hereunder
and evidenced hereby, subject, however, to all terms and conditions hereunder
and under the Credit Agreement referred to below. This Note is the "Line of
Credit Note" referred to in the Credit Agreement.

DEFINITIONS:

        As used herein, the following terms shall have the meanings set forth
after each, and any other term defined in this Note shall have the meaning set
forth at the place defined:

        (a)    "Business Day" means any day except a Saturday, Sunday or any
other day on which commercial banks in California are authorized or required by
law to close.

        (b)    "Credit Agreement" means that certain Second Amended and Restated
Credit Agreement between Borrower and Bank dated as of July 7, 2000, either as
originally executed or as the same may from time to time be supplemented,
modified, amended, restated, extended or supplemented.

        (c)    "Fixed Rate Term" means a period commencing on a Business Day and
continuing for (1) one month, (2) months, (3) months or (6) months, as
designated by Borrower, during which all or a portion of the outstanding
principal balance of this Note bears interest determined in relation to LIBOR;
provided however, that no Fixed Rate Term may be selected for a principal amount
less than Five Hundred Thousand Dollars ($500,000.00); and provided further,
that no Fixed Rate Term shall extend beyond the scheduled maturity date hereof.
If any

                                      -1-
<PAGE>   11

Fixed Rate Term would end on a day which is not a Business Day, then such Fixed
Rate Term shall be extended to the next succeeding Business Day.

        (d)    "LIBOR" means the rate per annum (rounded upward, if necessary,
to the nearest whole 1/8 of 1%) and determined pursuant to the following
formula:

                      LIBOR =                Base LIBOR
                              ---------------------------------------
                                  100% - LIBOR Reserve Percentage

        (i)    "Base LIBOR" means the rate per annum for United States dollar
               deposits quoted by Bank as the Inter-Bank Market Offered Rate,
               with the understanding that such rate is quoted by Bank for the
               purpose of calculating effective rates of interest for loans
               making reference thereto, on the first day of a Fixed Rate Term
               for delivery of funds on said date for a period of time
               approximately equal to the number of days in such Fixed Rate Term
               and in an amount approximately equal to the principal amount to
               which such Fixed Rate Term applies. Borrower understands and
               agrees that Bank may base its quotation of the Inter-Bank Market
               Offered Rate upon such offers or other market indicators of the
               Inter-Bank Market as Bank in its discretion deems appropriate
               including, but not limited to, the rate offered for U.S. dollar
               deposits on the London Inter-Bank Market.

        (ii)   "LIBOR Reserve Percentage" means the reserve percentage
               prescribed by the Board of Governors of the Federal Reserve
               System (or any successor) for "Eurocurrency Liabilities" (as
               defined in Regulation D of the Federal Reserve Board, as
               amended), adjusted by Bank for expected changes in such reserve
               percentage during the applicable Fixed Rate Term.

        (e)    "Prime Rate" means at any time the rate of interest most recently
announced within Bank at its principal office as its Prime Rate, with the
understanding that the Prime Rate is one of Bank's base rates and serves as the
basis upon which effective rates of interest are calculated for those loans
making reference thereto, and is evidenced by the recording thereof after its
announcement in such internal publication or publications as Bank may designate.

INTEREST:

        (a)    Interest. The outstanding principal balance of this Note shall
bear interest (computed on the basis of a 360-day year, actual days elapsed)
either (i) at a fluctuating rate per annum equal to the Prime Rate in effect
from time to time, or (ii) at a fixed rate per annum determined by Bank to be
two percent (2.00%) above LIBOR in effect on the first day of the applicable
Fixed Rate Term. When interest is determined in relation to the Prime Rate, each
change in the rate of interest hereunder shall become effective on the date each
Prime Rate change is announced within Bank. With respect to each LIBOR selection
hereunder, Bank is hereby authorized to note the date, principal amount,
interest rate and Fixed Rate Term applicable thereto and any payments made
thereon on Bank's books and records (either manually

                                      -2-
<PAGE>   12

or by electronic entry) and/or on any schedule attached to this Note, which
notations shall be prima facie evidence of the accuracy of the information
noted.

        (b)    Selection of Interest Rate Options. At any time any portion of
this Note bears interest determined in relation to LIBOR, it may be continued by
Borrower at the end of the Fixed Rate Term applicable thereto so that all or a
portion thereof bears interest determined in relation to the Prime Rate or to
LIBOR for a new Fixed Rate Term designated by Borrower. At any time any portion
of this Note bears interest determined in relation to the Prime Rate, Borrower
may convert all or a portion thereof so that it bears interest determined in
relation to LIBOR for a Fixed Rate Term designated by Borrower. At such time as
Borrower requests an advance hereunder or wishes to select a LIBOR option for
all or a portion of the outstanding principal balance hereof, and at the end of
each Fixed Rate Term, Borrower shall give Bank notice specifying: (i) the
interest rate option selected by Borrower; (ii) the principal amount subject
thereto; and (iii) for each LIBOR selection, the length of the applicable Fixed
Rate Term. Any such notice may be given by telephone (or such other electronic
method as Bank may permit) so long as, with respect to each LIBOR selection, (A)
if requested by Bank, Borrower provides to Bank written confirmation thereof not
later than three (3) Business Days after such notice is given, and (B) such
notice is given to Bank prior to 10:00 a.m. on the first day of the Fixed Rate
Term, or at a later time during any Business Day if Bank, at it's sole option
but without obligation to do so, accepts Borrower's notice and quotes a fixed
rate to Borrower. If Borrower does not immediately accept a fixed rate when
quoted by Bank, the quoted rate shall expire and any subsequent LIBOR request
from Borrower shall be subject to a redetermination by Bank of the applicable
fixed rate. If no specific designation of interest is made at the time any
advance is requested hereunder or at the end of any Fixed Rate Term, Borrower
shall be deemed to have made a Prime Rate interest selection for such advance or
the principal amount to which such Fixed Rate Term applied.

        (c)    Limitation on LIBOR Portions. Unless Bank otherwise consents, no
more than one (1) portion of the outstanding principal balance of this Note
shall bear interest in relation to Bank's LIBOR at any time.

        (d)    Taxes and Regulatory Costs. Borrower shall pay to Bank
immediately upon demand, in addition to any other amounts due or to become due
hereunder, any and all (i) withholdings, interest equalization taxes, stamp
taxes or other taxes (except income and franchise taxes) imposed by any domestic
or foreign governmental authority and related in any manner to LIBOR, and (ii)
future, supplemental, emergency or other changes in the LIBOR Reserve
Percentage, assessment rates imposed by the Federal Deposit Insurance
Corporation, or similar requirements or costs imposed by any domestic or foreign
governmental authority or resulting from compliance by Bank with any request or
directive (whether or not having the force of law) from any central bank or
other governmental authority and related in any manner to LIBOR to the extent
they are not included in the calculation of LIBOR. In determining which of the
foregoing are attributable to any LIBOR option available to Borrower hereunder,
any reasonable allocation made by Bank among its operations shall be conclusive
and binding upon Borrower.

                                      -3-
<PAGE>   13

        (e)    Payment of Interest. Interest accrued on this Note shall be
payable on the first day of each month, commencing June 1, 2001.

        (f)    Default Interest. From and after the maturity date of this Note,
or such earlier date as all principal owing hereunder becomes due and payable by
acceleration or otherwise, the outstanding principal balance of this Note shall
bear interest until paid in full at an increased rate per annum (computed on the
basis of a 360-day year, actual days elapsed) equal to four percent (4%) above
the rate of interest from time to time applicable to this Note.

BORROWING AND REPAYMENT:

        (a)    Borrowing and Repayment. Borrower may from time to time during
the term of this Note borrow, partially or wholly repay its outstanding
borrowings, and reborrow, subject to all of the limitations, terms and
conditions of this Note and of any document executed in connection with or
governing this Note; provided however, that the total outstanding borrowings
under this Note shall not at any time exceed the principal amount stated above.
The unpaid principal balance of this obligation at any time shall be the total
amounts advanced hereunder by the holder hereof less the amount of principal
payments made hereon by or for Borrower, which balance may be endorsed hereon
from time to time by the holder. The outstanding principal balance of this Note
shall be due and payable in full on May 29, 2003.

        (b)    Advances. Advances hereunder, to the total amount of the
principal sum stated above, may be made by the holder at the oral or written
request of (i) Erik H. van der Kaay or Chris Felfe or Robert Krist, any one
acting alone, who are authorized to request advances and direct the disposition
of any advances until written notice of the revocation of such authority is
received by the holder at the office designated above, or (ii) any person, with
respect to advances deposited to the credit of any deposit account of Borrower,
which advances, when so deposited, shall be conclusively presumed to have been
made to or for the benefit of Borrower regardless of the fact that persons other
than those authorized to request advances may have authority to draw against
such account. The holder shall have no obligation to determine whether any
person requesting an advance is or has been authorized by Borrower.

        (c)    Application of Payments. Each payment made on this Note shall be
credited first, to any interest then due and second, to the outstanding
principal balance hereof. All payments credited to principal shall be applied
first, to the outstanding principal balance of this Note which bears interest
determined in relation to the Prime Rate, if any, and second, to the outstanding
principal balance of this Note which bears interest determined in relation to
LIBOR, with such payments applied to the oldest Fixed Rate Term first.

PREPAYMENT:

        (a)    Prime Rate. Borrower may prepay principal on any portion of this
Note which bears interest determined in relation to the Prime Rate at any time,
in any amount and without penalty.

                                      -4-
<PAGE>   14

        (b)    LIBOR. Borrower may prepay principal on any portion of this Note
which bears interest determined in relation to LIBOR at any time and in the
minimum amount of Two Hundred Fifty Thousand Dollars ($250,000.00); provided
however, that if the outstanding principal balance of such portion of this Note
is less than said amount, the minimum prepayment amount shall be the entire
outstanding principal balance thereof. In consideration of Bank providing this
prepayment option to Borrower, or if any such portion of this Note shall become
due and payable at any time prior to the last day of the Fixed Rate Term
applicable thereto by acceleration or otherwise, Borrower shall pay to Bank
immediately upon demand a fee which is the sum of the discounted monthly
differences for each month from the month of prepayment through the month in
which such Fixed Rate Term matures, calculated as follows for each such month:

        (i)    Determine the amount of interest which would have accrued each
               month on the amount prepaid at the interest rate applicable to
               such amount had it remained outstanding until the last day of the
               Fixed Rate Term applicable thereto.

        (ii)   Subtract from the amount determined in (i) above the amount of
               interest which would have accrued for the same month on the
               amount prepaid for the remaining term of such Fixed Rate Term at
               LIBOR in effect on the date of prepayment for new loans made for
               such term and in a principal amount equal to the amount prepaid.

        (iii)  If the result obtained in (ii) for any month is greater than
               zero, discount that difference by LIBOR used in (ii) above.

Each Borrower acknowledges that prepayment of such amount may result in Bank
incurring additional costs, expenses and/or liabilities, and that it is
difficult to ascertain the full extent of such costs, expenses and/or
liabilities. Each Borrower, therefore, agrees to pay the above-described
prepayment fee and agrees that said amount represents a reasonable estimate of
the prepayment costs, expenses and/or liabilities of Bank. If Borrower fails to
pay any prepayment fee when due, the amount of such prepayment fee shall
thereafter bear interest until paid at a rate per annum four percent (4.00%)
above the Prime Rate in effect from time to time (computed on the basis of a
360-day year, actual days elapsed). Each change in the rate of interest on any
such past due prepayment fee shall become effective on the date each Prime Rate
change is announced within Bank.

EVENTS OF DEFAULT:

        This Note is made pursuant to and is subject to the terms and conditions
of the Credit Agreement. Any default in the payment or performance of any
obligation under this Note, or any defined event of default under the Credit
Agreement, shall constitute an "Event of Default" under this Note.

                                      -5-
<PAGE>   15

MISCELLANEOUS:

        (a)    Remedies. Upon the sale, transfer, hypothecation, assignment or
other encumbrance, whether voluntary, involuntary or by operation of law, of all
or any interest in any real property securing this Note, or upon the occurrence
of any Event of Default, the holder of this Note, at the holder's option, may
declare all sums of principal and interest outstanding hereunder to be
immediately due and payable without presentment, demand, notice of
nonperformance, notice of protest, protest or notice of dishonor, all of which
are expressly waived by Borrower, and the obligation, if any, of the holder to
extend any further credit hereunder shall immediately cease and terminate.
Borrower shall pay to the holder immediately upon demand the full amount of all
payments, advances, charges, costs and expenses, including reasonable attorneys'
fees (to include outside counsel fees and all allocated costs of the holder's
in- house counsel), expended or incurred by the holder in connection with the
enforcement of the holder's rights and/or the collection of any amounts which
become due to the holder under this Note, and the prosecution or defense of any
action in any way related to this Note, including without limitation, any action
for declaratory relief, whether incurred at the trial or appellate level, in an
arbitration proceeding or otherwise, and including any of the foregoing incurred
in connection with any bankruptcy proceeding (including without limitation, any
adversary proceeding, contested matter or motion brought by Bank or any other
person) relating to Borrower or any other person or entity.

        (b)    Obligations Joint and Several. Should more than one person or
entity sign this Note as a Borrower, the obligations of each such Borrower shall
be joint and several.

        (c)    Governing Law. This Note shall be governed by and construed in
accordance with the laws of the State of California.

                                      -6-
<PAGE>   16

        IN WITNESS WHEREOF, the undersigned has executed this Note as of the
date first written above.

                                        DATUM INC.,
                                        a Delaware corporation

                                        By: ___________________________
                                              Name:
                                              Title:

                                        By: ___________________________
                                              Name:
                                              Title:

                                       -7-

<PAGE>   17
                                                                        Annex 2

                                    EXHIBIT C

                      FIRST AMENDED AND RESTATED TERM NOTE

$3,500,000.00                                                 Irvine, California
                                                                    May 29, 2001

        FOR VALUE RECEIVED, the undersigned DATUM INC., a Delaware corporation
("Borrower") promises to pay to the order of WELLS FARGO BANK, NATIONAL
ASSOCIATION ("Bank") at its office at Orange Coast Regional Commercial Banking
Office, 2030 Main Street, Suite 900, Irvine, California 92614, or at such other
place as the holder hereof may designate, in lawful money of the United States
of America and in immediately available funds, the principal sum of Three
Million Five Hundred Thousand Dollars ($3,500,000.00), with
interest thereon as set forth herein. This Note amends and restates in its
entirety that certain Term Note dated July 7, 2000 executed and delivered by
Borrower to the order of Bank in the original principal amount of $6,000,000.00
(the "Prior Note"). Amounts outstanding and committed under the Prior Note
shall, upon the effectiveness of this Note, be deemed to be outstanding and
committed hereunder and evidenced hereby, subject, however, to all terms and
conditions hereunder and under the Credit Agreement referred to below.

INTEREST:

        (a)    Interest. The outstanding principal balance of this Note shall
bear interest at nine and three-twentieths percent (9.15%) per annum (computed
on the basis of a 360-day year, actual days elapsed).

        (b)    Payment of Interest. Interest accrued on this Note shall be
payable on the first day of each month, commencing June 1, 2001.

        (c)    Default Rate. From and after the maturity date of this Note, or
such earlier date as all principal owing hereunder becomes due and payable by
acceleration or otherwise, the outstanding principal balance of this Note shall
bear interest until paid in full at an increased rate per annum (computed on the
basis of a 360-day year, actual days elapsed) equal to four percent (4%) above
the rate of interest from time to time applicable to this Note.

REPAYMENT AND PREPAYMENT:

        (a)    Repayment. Principal shall be payable on the first day of each
month in installments of Two Hundred Fifty Thousand Dollars ($250,000.00) each,
commencing June 1, 2001, and continuing up to and including June 1, 2002, with a
final installment consisting of all remaining unpaid principal due and payable
in full on June 15, 2002.

                                       -1-
<PAGE>   18

        (b)    Application of Payments. Each payment made on this Note shall be
credited first, to any interest then due and second, to the outstanding
principal balance hereof.

        (c)    Prepayment. Borrower may prepay principal on this Note in the
minimum amount of Two Hundred Fifty Thousand Dollars ($250,000.00); provided
however, that if the outstanding principal balance of this Note is less than
said amount, the minimum prepayment amount shall be the entire outstanding
principal balance hereof. In consideration of Bank providing this prepayment
option to Borrower, or if this Note shall become due and payable at any time
prior to the maturity date hereof by acceleration or otherwise, Borrower shall
pay to Bank immediately upon demand a fee which is the sum of the discounted
monthly differences for each month from the month of prepayment through the
month in which said maturity date occurs, calculated as follows for each such
month:

        (i)    Determine the amount of interest which would have accrued each
               month on the amount prepaid at the interest rate applicable to
               such amount had it remained outstanding until the maturity date
               hereof.

        (ii)   Subtract from the amount determined in (i) above the amount of
               interest which would have accrued for the same month on the
               amount prepaid for the remaining term until the maturity date
               hereof at the Treasury Rate in effect on the date of prepayment
               for new loans made for such term and in a principal amount equal
               to the amount prepaid.

        (iii)  If the result obtained in (ii) for any month is greater than
               zero, discount that difference by the Treasury Rate used in (ii)
               above.

Borrower acknowledges that prepayment of such amount may result in Bank
incurring additional costs, expenses and/or liabilities, and that it is
difficult to ascertain the full extent of such costs, expenses and/or
liabilities. Borrower, therefore, agrees to pay the above-described prepayment
fee and agrees that said amount represents a reasonable estimate of the
prepayment costs, expenses and/or liabilities of Bank. If Borrower fails to pay
any prepayment fee when due, the amount of such prepayment fee shall thereafter
bear interest until paid at a rate per annum four percent (4.00%) above the
Prime Rate in effect from time to time (computed on the basis of a 360-day year,
actual days elapsed). The "Prime Rate" is a base rate that Bank from time to
time establishes and which serves as the basis upon which effective rates of
interest are calculated for those loans making reference thereto. Each change in
the rate of interest on any such past due prepayment fee shall become effective
on the date each Prime Rate change is announced within Bank.

        The "Treasury Rate" means the yield to maturity at the asked price of
the applicable obligation of the United States Treasury, with the applicable
obligation determined by Bank to be the Treasury obligation that will mature on
the maturity date of this Note (or the next day thereafter for which an asked
price is readily quoted in the public securities market), with the understanding
that such rate serves as the basis upon which effective rates of interest are
calculated for those loans making reference thereto, and is evidenced by the
recording thereof after its announcement in such internal publication or
publications as Bank may designate.

                                       -2-
<PAGE>   19

        All prepayments of principal shall be applied on the most remote
principal installment or installments then unpaid.

EVENTS OF DEFAULT:

        This Note is made pursuant to and is subject to the terms and conditions
of that certain Second Amended and Restated Credit Agreement between Borrower
and Bank dated as of July 7, 2000, as amended from time to time (the "Credit
Agreement"). Any default in the payment or performance of any obligation under
this Note, or any defined event of default under the Credit Agreement, shall
constitute an "Event of Default" under this Note.

MISCELLANEOUS:

        (a)    Remedies. Upon the sale, transfer, hypothecation, assignment or
other encumbrance, whether voluntary, involuntary or by operation of law, of all
or any interest in any real property securing this Note, or upon the occurrence
of any Event of Default, the holder of this Note, at the holder's option, may
declare all sums of principal and interest outstanding hereunder to be
immediately due and payable without presentment, demand, notice of
nonperformance, notice of protest, protest or notice of dishonor, all of which
are expressly waived by Borrower. Borrower shall pay to the holder immediately
upon demand the full amount of all payments, advances, charges, costs and
expenses, including reasonable attorneys' fees (to include outside counsel fees
and all allocated costs of the holder's in-house counsel), expended or incurred
by the holder in connection with the enforcement of the holder's rights and/or
the collection of any amounts which become due to the holder under this Note,
and the prosecution or defense of any action in any way related to this Note,
including without limitation, any action for declaratory relief, whether
incurred at the trial or appellate level, in an arbitration proceeding or
otherwise, and including any of the foregoing incurred in connection with any
bankruptcy proceeding (including without limitation, any adversary proceeding,
contested matter or motion brought by Bank or any other person) relating to
Borrower or any other person or entity.

        (b)    Obligations Joint and Several. Should more than one person or
entity sign this Note as a Borrower, the obligations of each such Borrower shall
be joint and several.

        (c)    Governing Law. This Note shall be governed by and construed in
accordance with the laws of the State of California.

                                       -3-
<PAGE>   20

        IN WITNESS WHEREOF, the undersigned has executed this Note as of the
date first written above.

                                        DATUM INC.,
                                        a Delaware corporation

                                        By: ___________________________
                                              Name:
                                              Title:

                                        By: ___________________________
                                              Name:
                                              Title:

                                       -4-
<PAGE>   21

                                                                         Annex 3

                              Consent of Guarantors

        In order to induce Bank to agree to the terms of the Amendment, each
undersigned Guarantor (a) acknowledges receipt of a copy of the Amendment, (b)
consents to Borrower entering into the Amendment and to Borrower and the other
parties thereto entering into all of the other documents, instruments and
agreements now or hereafter executed in connection therewith, and (c) agrees
that nothing contained in the Amendment, or in any other document, instrument or
agreement executed in connection therewith, shall serve to diminish, alter,
amend or affect in any way such Guarantor's obligations under that certain
Second Amended and Restated Guaranty dated as of July 7, 2000 by the undersigned
Guarantors in favor of Bank (the "Guaranty"). Each of the undersigned Guarantors
expressly and knowingly reaffirms its liability under the Guaranty and
acknowledges that it has no defense, offset or counterclaim against Bank with
respect to the Guaranty.

AUSTRON, INC.,                                 EFRATOM TIME AND FREQUENCY
a Texas corporation                            PRODUCTS, INC.,
                                               a Colorado corporation

By:__________________________                  By:__________________________
     Name:                                           Name:
     Title:                                          Title:

By:__________________________                  By:__________________________
     Name:                                           Name:
     Title:                                          Title:

FREQUENCY & TIME SYSTEMS,                      DIGITAL DELIVERY, INC.,
INC., a Delaware corporation                   a Massachusetts corporation

By:__________________________                  By:__________________________
     Name:                                          Name:
     Title:                                         Title:

By:__________________________                  By:__________________________
     Name:                                          Name:
     Title:                                         Title:

                                      -1-
<PAGE>   22

AUSTIN-DATUM, LP, a Texas                      DATUM-AUSTIN HOLDINGS I, LLC,
limited partnership                            a California limited liability
                                               company

By: DATUM-AUSTIN HOLDINGS I, LLC,
    a California limited liability
    company, its General Partner

    By:__________________________              By:__________________________
         Name:                                      Name:
         Title:                                     Title:

    By:__________________________              By:__________________________
         Name:                                      Name:
         Title:                                     Title:

DATUM-AUSTIN HOLDINGS II, LLC,
a California limited liability company

By:__________________________
     Name:
     Title:

By:__________________________
     Name:
     Title:

                                      -2-

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