Document:

Unassociated Document

EXHIBIT 10.21

SUTRON CORPORATION

STOCK OPTION AGREEMENT

(Non-qualified Stock Option)

THIS STOCK OPTION AGREEMENT (the “Agreement”) is made and entered into as of the _____ day of _______________ by and between Sutron Corporation, a Virginia corporation (the “Company”), and ______________________(the “Optionee”).

WHEREAS, the Board of Directors of the Company (the “Board”) has adopted and approved that certain Sutron Corporation 2002 Stock Option Plan (the “Plan”), a copy of which has been provided to the Optionee and which is incorporated by reference herein; and

WHEREAS, pursuant to and in accordance with the provisions of the Plan, the Board has determined that the Optionee is eligible to be granted an option (the “Option”) to acquire shares of the Company’s Common Stock, $0.01 par value per share (the “Stock”); and

WHEREAS, Options granted under the Plan are not intended or designed to qualify for Federal income tax treatment as incentive stock options under Section 422 of the Internal Revenue Code of 1986 (the “Code”); and

WHEREAS, the Optionee desires to be granted Options under the Plan; and

WHEREAS, the Corporation and the Optionee desire to set forth herein the terms of such Options.

NOW, THEREFORE, in consideration of the foregoing, of the mutual covenants set forth herein, and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1.             Grant of Option.  The Company hereby grants to the Optionee the right and option to purchase ____________________ (__) shares of Stock, subject to and in accordance with the terms and conditions set forth in the Plan and in this Agreement.

2.             Exercise Price.  The Exercise Price to be paid for each share of Stock to be acquired upon exercise of the Option granted hereunder is $_____.  Such Exercise Price is equal to the Fair Market Value (as defined in the Plan) of the Stock as of the date of grant of the Option.

3.             Transferability.  The Option granted hereunder shall be exercisable during the Optionee’s lifetime only by the Optionee and shall not be assignable or transferable other than by 

 

  

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will or by the laws of descent and distribution following the Optionee’s death.

4.             Exercise Terms; Vesting; Procedure.

(a)           Except as provided in Section 6 hereof, the Option may be exercised in whole or in part in accordance with the vesting schedule set forth in Section 5 hereof, provided, however, that the Option shall not be exercisable after the expiration of ten (10) years from the date of grant of the Option.

(b)           In order to exercise the Option granted hereunder, the Optionee shall deliver to the Secretary of the Company written notice stating the Optionee’s intent to exercise the Option, which notice shall specify:

(i)           the name of the Optionee;

(ii)           the Option to be exercised;

(iii)           the number of shares of Stock to be purchased pursuant to such exercise; and

(iv)           the address to which certificates representing the shares of Stock issuable upon exercise of the Option are to be mailed.

(c)           The Optionee’s written notice shall be accompanied by a certified check payable to the Company in the amount of the product of the Exercise Price times the number of shares with respect to which the Option is being exercised.  The notice and payment shall be delivered in person or sent by registered mail, return receipt requested, to the Secretary of the Company.  The Option shall be considered exercised on the date the notice and payment are delivered to the Secretary or deposited in the mail, as the case may be.  As promptly as practicable after the Secretary’s receipt of the notice of exercise and payment, and the receipt of any certificates from the Optionee required by the Company pursuant to Sections 8 and 9 hereof, the Company shall deliver to the Optionee a certificate or certificates for the number of shares of Stock with respect to which the Option has been exercised.

5.             Vesting.  The Option shall vest ratably over the period beginning __________ and ending ___________, provided, however, that the Option shall become immediately exercisable in full at the time of a Change of Control of the Company.

6.             Effect of Termination of Employment, Disability or Death. The following provisions shall govern the exercise of any Options held by an Optionee at the time the Optionee ceases to be an employee of the Company, suffers a Disability, or dies.

6.1           Termination of Employment.  In the event that the Optionee ceases to be an employee of the Company for any reason other than Disability or death, then the period during 

 

  

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which each outstanding Option held by such Optionee is to remain exercisable shall be limited to the ninety (90) day period following the date of termination of employment.  Under no circumstances, however, shall any such Option be exercisable after the specified expiration date of the Option term.  Any outstanding Option may not be exercised in the aggregate for more than the number of vested shares for which the Option is exercisable on the date of the termination of employment, and such Option shall terminate and cease to be outstanding with respect to any Option shares for which the Option is not at that time exercisable or in which the Optionee is not otherwise at that time vested.

6.2           Disability.  In the event that the Optionee ceases to be an employee of the Company by reason of a Disability, then the period during which each outstanding Option held by such Optionee is to remain exercisable shall be limited to a period of one (1) year following the date of termination of employment due to Disability.  Under no circumstances, however, shall any such Option be exercisable after the specified expiration date of the Option term as set forth in the Option Agreement.  Any outstanding Option may not be exercised in the aggregate for more than the number of vested shares for which the Option is exercisable on the date of the termination of employment due to Disability, and such Option shall terminate and cease to be outstanding with respect to any Option shares for which the Option is not at that time exercisable or in which the Optionee is not otherwise at that time vested.

6.3           Death. In the event that the Optionee dies while holding one or more outstanding Options, then the period during which each outstanding Option held by such Optionee is to remain exercisable shall be limited to a period of one (1) year following the date of the Optionee’s death.  During such limited period, the Option may be exercised by the personal representative of the Optionee’s estate or by the person or persons to whom the option is transferred pursuant to the Optionee’s will or in accordance with the laws of descent and distribution.  Under no circumstances, however, shall any such Option be exercisable after the specified expiration date of the Option term. Any outstanding Option may not be exercised in the aggregate for more than the number of vested shares for which the Option is exercisable on the date of the death of the Optionee, and such Option shall terminate and cease to be outstanding with respect to any Option shares for which the Option is not at that time exercisable or in which the Optionee is not otherwise at that time vested.

7.             Adjustments to Upon Certain Events.  In the event that any change is made to the Stock issuable under the Plan and the Option granted hereunder by reason of stock split, stock dividend, recapitalization, combination of shares, exchange of shares, repurchase, merger, consolidation, spin-off or other change affecting the outstanding Stock as a class, the Board shall make appropriate adjustments to the maximum number of shares and/or class of shares, and the number of shares and/or class of shares and the exercise price per share in effect under the Option, in order to prevent the dilution or enlargement of benefits thereunder.  Any adjustments made by the Board pursuant to this Section 7 shall be final, binding and conclusive.  Neither the existence nor the terms of the Plan or this Agreement, nor the grant of any Option hereunder, shall affect the right or power of the Company to make any adjustments, reorganizations, reclassifications or other changes to its capital structure or to merge, consolidate, dissolve, 

 

  

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liquidate, sell or transfer any or all of  its assets or otherwise change its business structure.

Except as expressly provided above, the issuance by the Company of shares of stock of any class, for cash or property, or for labor or services, either upon direct sale or upon the exercise of rights, warrants or options to subscribe therefor, or upon conversions of shares or obligations of the Company convertible into such shares or other securities, shall not affect the number, class or exercise price of shares of Stock then subject to the Option, and no adjustment shall be made by reason thereof.

8.             Requirements of Law.  The Company shall not be required to sell or issue shares of its Stock under the Option if the sale or issuance would constitute a violation by the Optionee or the Company of any provisions of any state or federal law, rule or regulation.  In addition, in connection with the Securities Act of 1933, as amended, upon exercise of the Option, the Company shall not be required to issue such shares of Stock unless the Company has received evidence satisfactory to it to the effect that the Optionee will not transfer such shares except pursuant to a registration statement in effect under the Securities Act of 1933, as amended, or unless an opinion of counsel to the Company has been received to the effect that such registration is not required.  Any determination in this regard by the Company shall be final, binding and conclusive.  Certificates representing shares of Stock issued pursuant to the exercise of the Option will be subject to such stop-transfer orders and other restrictions as may be applicable under federal and state laws, regulations and rules, or the requirements of any securities exchange or automated quotation system. In the event the shares issuable on exercise of the Option are not registered under the Securities Act, the Company may imprint the following legend or any other legend which counsel to the Company considers necessary or advisable:

“The shares of Stock represented by this certificate have not been registered under the Securities Act of 1933 or under the securities laws of any state and may not be sold or transferred except upon such registration or upon receipt by the Company of an opinion of counsel satisfactory to the Company that registration is not required for such sale or transfer.”

The Corporation may, but shall in no event be obligated to, register any securities covered hereby pursuant to the Securities Act of 1933; and in the event any shares are so registered, the Company may, in its discretion, remove any legend on certificates representing such shares.  The Company shall not be obligated to take any other affirmative action in order to cause the exercise of the Option or the issuance of shares pursuant thereto to comply with any state or federal law or regulation.

9.             Investment Purpose.  The Optionee agrees that any shares of Stock subject to the Option granted hereunder will be acquired for investment and not with any present intention to resell the same, and the Optionee further agrees to confirm such intention by an appropriate written assurances and certificates at the time of exercising an Option or any portion thereof.

10.           Withholding.  The Company’s obligation to deliver shares of Stock upon exercise 

 

  

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of the Option shall be subject to any and all applicable federal, state and local tax withholding and reporting requirements.

11.           No Rights as Shareholder.  The Optionee shall have no right as a shareholder with respect to the Stock covered by the Option until the date of issuance of Stock Certificates for such Stock to the Optionee.

12.           No Employment Obligation.  The granting of any Option shall not impose upon the Company any obligation to employ the Optionee.  The right of the Company to terminate the employment of the Optionee shall not be diminished or affected by reason of the fact that an Option has been granted hereunder to the Optionee.

13.           General Provisions.

(a)           This Agreement shall be binding upon, and shall inure to the benefit of, the parties hereto and their respective heirs, executors, administrators, personal representatives, successors and assigns.

(b)           This Agreement shall be construed in accordance with, and shall be governed by, the laws of the Commonwealth of Virginia.

(c)           No waiver by any party hereto of any breach of any covenant, condition or agreement hereof shall be considered to constitute a waiver of any such covenant, condition or provision, or of any subsequent breach thereof.

(d)           In the event any court of competent jurisdiction shall declare any portion of this Agreement to be invalid, the remainder of this Agreement shall not be invalidated thereby, but shall remain in full force and effect.

(e)           Unless otherwise provided in this Agreement, no notice or other communication which may be or is required or permitted to be given under this Agreement shall be effective unless the same is in writing and is either hand delivered or sent by registered or certified mail, return receipt requested, first-class postage prepaid, (1) if to the Optionee, to____________________________________________, and (2) if to the Company, to Sutron Corporation., Attn: Secretary, 21300 Ridgetop Circle, Sterling, VA 20166, or at any other address that may be given by one party to the other party by notice pursuant to this paragraph 6(e), with a copy to the law firm of Shulman, Rogers, Gandal, Pordy & Ecker, P.A., 11921 Rockville Pike, Third Floor, Rockville, Maryland 20852. Unless otherwise provided in this Agreement, such notices, or other communications, if sent by registered or certified mail in accordance with this paragraph 6(e), shall be deemed to have been given at the time of mailing.

(f)           Where the text requires, words in the singular shall be deemed to include the plural and vice-versa, and words in one gender shall be deemed to include all genders.

  

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(g)           Any headings preceding the text of the sections or sub-sections in this Agreement are inserted solely for convenience of reference and shall not constitute a part of this Agreement, nor shall they affect its meaning, construction or effect.

(h)           The Option granted pursuant hereto is not intended or designed to qualify for federal income tax treatment as an incentive stock option under Section 422 of the Code.

(i)           The Options are subject to all terms, conditions, limitations and restrictions contained in the Plan, which shall be controlling in the event of any conflicting or inconsistent provisions between this Agreement and the Plan.

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed and sealed by its duly authorized officers, and the Optionee has executed and sealed this Agreement, all as of the day and year first above written.

 

	

ATTEST:

 

 

______________________

Name:

Title: 

 

 

WITNESS: 

 

______________________

Name:

	THE COMPANY: 

SUTRON CORPORATION

 

 

By: ____________________(SEAL)

Name:

Title:

THE OPTIONEE:

________________________

Name:

 

  

6Unassociated Document

EXHIBIT 10.22

NOTE AND LOAN MODIFICATION AGREEMENT

THIS NOTE AND LOAN MODIFICATION AGREEMENT (“Agreement”) is made and effective as of August 20, 2010, by and between SUTRON CORPORATION, a Virginia corporation (“Borrower”) and BRANCH BANKING AND TRUST COMPANY, a North Carolina banking corporation and successor by merger to Branch Banking and Trust Company of Virginia (“Lender”).

RECITALS

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 00/100 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 and Schedule DD thereto, each of same date executed by the Borrower and the Lender (as subsequently modified, collectively, the “Loan Agreement”) (the Note, Security Agreement, Loan Agreement, Schedule GC (as defined below), and all other documents evidencing or securing the Loan, as subsequently modified, are sometimes collectively referred to herein as “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 00/100 Dollars ($2,000,000.00), (ii) extend the maturity date of the Loan, and (iii) release the Guarantors, as defined therein, from their obligations under the Guaranty, as defined therein; and

WHEREAS, by Loan Modification Agreement dated as of August 5, 2006, the Lender and the Borrower agreed, inter alia, to (i) increase the principal amount of the Loan to Two Million Five Hundred Thousand and 00/100 Dollars ($2,500,000.00), and (ii) extend the maturity date of the Loan; and

WHEREAS, by Loan Modification Agreement dated as of June 26, 2007, the Lender and the Borrower agreed, inter alia, to (i) increase the principal amount of the Loan to Three Million and 00/100 Dollars ($3,000,000.00), (ii) extend the maturity date of the Loan, and (iii) amend Schedule DD to the Loan Agreement; and

WHEREAS, by Loan Modification Agreement dated as of August 4, 2008, the Lender and the Borrower agreed, inter alia, to extend the maturity date of the Loan; and

WHEREAS, by Loan Modification Agreement dated as of September 2, 2009, the Lender and the Borrower agreed, inter alia, to (i) extend the maturity date of the Loan, and (ii) replace Schedule DD to the Loan Agreement with that certain Amended and Restated Schedule “GC” to BB&T Loan Agreement dated September 2, 2009 (“Schedule GC”); and

  

  

  

WHEREAS, the Borrower has requested that Lender (i) further extend the maturity date of the Loan; and (ii) 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.

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.  The maximum principal amount of the Note is $3,000,000.00.

3.           Note Payments/Maturity Date.  Commencing September 5, 2010 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, 2011.

4.           Letters of Credit.  The maximum aggregate face amount of standby letters of credit that the Lender agrees to issue for the account of the Borrower (as referenced in the Note and the Loan Agreement) is hereby increased to Three Million and 00/100 Dollars ($3,000,000.00).

5.           Schedule GC to Loan Agreement.  The last two (2) sentences of Section GC.01(ii) of Schedule GC are hereby deleted in their entirety and replaced the following:

A limit of up to $3,000,000.00 shall be available for the issuance of Letters of Credit.  The outstanding Letter of Credit exposure within this limit shall be reserved from the Collateral Loan Value (to the extent that the Letter of Credit is secured by accounts and inventory) and the Line of Credit Commitment Amount.

6.           Modification of Loan Documents.

	
  

	
A.

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

  

  

  

	
  

	
B.

	
The terms “Note”, “Security Agreement”, “Loan Agreement”, “Schedule GC”, 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.

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.

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 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 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.

SIGNATURES ON FOLLOWING PAGES

  

  

  

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

                                                             BORROWER:

 

 

                                                             SUTRON CORPORATION, a Virginia corporation

                                                             By: Sidney C. Hooper

                                                                   Treasurer

COMMONWEALTH OF VIRGINIA      )

                                                                )

COUNTY OF LOUDON                         ) to-wit:

The foregoing was subscribed and sworn to before me on this 20 day of August, 2010, by Sidney C. Hooper, as Treasurer of SUTRON CORPORATION, a Virginia corporation, on behalf of the corporation.

  

                                                                                      Leonard C. Lewan

                                                                                       Notary Public

My commission Expires: January 31, 2011

Notary Registration No:  127916

 

 

[signature of Lender of following page]

  

  

  

 

                                                           BRANCH BANKING AND TRUST COMPANY, a

                                                           North Carolina banking corporation

                                                           By: Leonard C. Lewan

                                                                 Senior Vice President

COMMONWEALTH OF VIRGINIA       )

                                                                 )

COUNTY OF FAIRFAX                         ) to wit:

The foregoing instrument was acknowledged before this 20 day of August, 2010, by Leonard C. Lewan, as Senior Vice President of BRANCH BANKING AND TRUST COMPANY, a North Carolina corporation, on behalf of the corporation.

                                                                   Norma H. Ricketts

                                                                   Notary Public

My Commission Expires:  09/30/2010

Notary Registration No.:   268459

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