Document:

exv10w1

Exhibit 10.1

CONSULTING AGREEMENT

          This Agreement dated this 17th day of October 2008, is executed by and between MiddleBrook
Pharmaceuticals, Inc., a Delaware corporation (“Company”), located at 20425 Seneca Meadows Parkway,
Germantown, MD 20876, and Lord James Blyth (“Consultant”), located at Lemington Grange, Lower
Lemington, Nr Moreton in Marsh, Gloucestershire GL56 9NN England.

          WHEREAS, Company seeks to engage Consultant to accomplish the objectives described on Exhibit
A hereto;

          WHEREAS, Consultant possesses the requisite skills, training and experience to perform the
services called for under this Agreement, and wishes to perform the services based on the terms and
conditions herein; and

          WHEREAS, based on the nature of the relationship that the parties intend to establish, Company
hereby engages Consultant as an independent consultant.

          NOW, THEREFORE, in consideration of the mutual promises and covenants of the parties as herein
contained, the parties hereto agree and contract as follows:

	1)	 	Company hereby engages Consultant to accomplish the objectives described in Exhibit A hereto
(the “Services”).
	 
	2)	 	The original term of this Agreement shall be the 36-month period commencing on the date
hereof.
	 
	3)	 	As compensation for the Services to be rendered by the Consultant as contemplated by this
agreement, the Consultant has been granted an option under the Company’s Stock Incentive Plan
(“Plan”), effective on the date of this Agreement, to purchase 470,000 shares of the Company’s
common stock at an exercise price of $1.34, which price is equal to the closing price of the
Company’s common stock on the Nasdaq Global Market on October 16, 2008, the trading date
immediately preceding the date of this Agreement. The option will have a term of three years
and will 100% vest one month prior to expiration of this Agreement if Consultant has fulfilled
his responsibilities under this Agreement. The Board may accelerate the vesting, or terminate
this Agreement prior to the vesting of such option, at any time in its sole discretion based
on a review of Consultant’s contribution to the Company. The Board intends to review this
matter at the end of 2009.
	 
	4)	 	Consistent with the parties’ intent that the relationship created by this Agreement be that
of service recipient and independent consultant, Consultant shall retain the exclusive right
to control and direct all details of the Services that Consultant performs hereunder,
including where, when and how the Services are to be performed.
	 
	5)	 	Consultant (and its employees, if any) shall not be eligible to participate in any benefit
programs that Company now or hereafter maintains for its employees and, in the event
Consultant (and its employees, if any) for any reason were to become eligible to participate
in a

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	 	 	Company-sponsored benefit program, Consultant hereby waives any such right to participate
in the program. This waiver of any right to participate in Company-sponsored employee benefit
programs represents a material component of the terms of compensation agreed to by these
parties and is not in any way conditioned on any representation or assumption concerning
status of Consultant (and its employees, if any) with respect to the Company as an employee or
independent consultant.
	 
	6)	 	For all purposes, including but not limited to the Federal Insurance Contributions Act
(“FICA”), the Social Security Act, the Federal Unemployment Tax Act (“FUTA”), income tax
withholding and any and all other federal, state and local laws, rules and regulations,
Consultant (and its employees, if any) shall be treated as an independent consultant and not
as an employee with respect to Company.
	 
	7)	 	Consultant acknowledges and agrees that Consultant shall be responsible (as a self-employed
individual) for filing all tax returns, tax declarations and tax schedules, and for the
payment of all taxes required, when due, with respect to any and all compensation earned by
Consultant under this Agreement. Company will neither pay nor withhold any employment taxes
with respect to the compensation it pays Consultant. Rather, Company will report the amounts
it pays Consultant on IRS Forms 1099, to the extent required to do so under applicable
Internal Revenue Code provisions.
	 
	8)	 	Company will not reimburse Consultant for any expenses, other than those set forth on Exhibit
A, that are incurred in connection with the performance of the Services unless otherwise
agreed by Company in accordance with Paragraph 14 hereof. All expenses shall be payable by the
Company within thirty (30) days of receipt of a detailed invoice for the expenses incurred.
	 
	9)	 	Consultant reserves the right to, and intends to, perform services for others, so long as the
performance of such services does not interfere with the performance of the Services
hereunder.
	 
	10)	 	Consultant acknowledges and agrees that, in the course of the performance of the Services
pursuant to this Agreement, Consultant will be given access to, or come into possession of,
confidential and/or proprietary business and technical information of Company (“Confidential
Information”), which Confidential Information includes but is not limited to (i) know-how,
trade secrets, proprietary data or other proprietary and/or confidential information, and (ii)
written materials as well as information transferred orally, visually, electronically or by
other means, together with the analyses, compilations, studies or other documents prepared by
Consultant which contain or otherwise reflect such Confidential Information. Consultant
acknowledges and agrees that it will not use, duplicate or divulge to others any Confidential
Information except in connection with the performance of the Services under this Agreement.
Consultant agrees that Consultant shall in no way utilize any such Confidential Information
for the gain or advantage of Consultant (other than in Consultant’s performances of the
Services hereunder) or any person or entity other than Company, or to the detriment of
Company. Consultant agrees that Consultant shall not remove or copy any data, research,
memoranda, reports, records, documents, publications, journals, diaries, computer programs,
files, information contained in files, or other information or material pertaining to the
business, research, or technology of the Company, including materials embodying or reflecting
the

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	 	 	Confidential Information (whether prepared by Consultant or others on behalf of the
Company) (the “Materials”), without the express written consent of Company, which in all
events shall be considered to be the owner and possessor of all Materials. Upon a termination
of this Agreement, or at such earlier date as Company may request, Consultant shall deliver
forthwith to Company all Materials (including all extracts, abstracts, copies, or portions
thereof) which are then in Consultant’s possession or control. The obligations of this
Paragraph 10 and Paragraphs 11 and 12 shall survive the termination of this Agreement.
	 
	11)	 	   (a) Consultant acknowledges and agrees that, as part of Consultant’s engagement with
Company, Consultant is expected to make new contributions of value to the Company and agrees
to promptly disclose to Company any and all ideas, inventions, discoveries, works of
authorship, writings, computer software programs, know-how, processes, formulas, codes,
technical data, drawings, flow charts, prototypes, manufacturing methods, cell lines,
biological materials, probes, sequences, improvements or revisions (collectively,
“Discoveries”), whether subject to or available for copyright, patent, registration or other
protection as intellectual property or not, which Consultant may make, devise, conceive,
create, design, invent, develop or discover, either solely or jointly with another or others,
during Consultant’s engagement by Company, whether at the request or upon the suggestion of
Company or otherwise, which (i) stem from his work for Company; (ii) were created using
Company facilities, equipment, or resources, Company personnel, or during any time it is
performing services for Company; (iii) come about as a result of Consultant’s access to
Confidential Information; or (iv) relate to, or are capable of use in connection with, any
business of the Company, or any services, programs or products offered, used, sold or being
developed by the Company at the time Consultant creates or develops such Discoveries. Any and
all of the foregoing shall belong solely exclusively to Company and, to the extent it is
copyrightable material, shall be deemed to be “works made for hire,” and the Company shall be
deemed the author or creator thereof. Consultant shall promptly disclose all Discoveries to
Company.

	 	   (b)	 	To the extent any Discovery does not constitute a “work made for hire” under
applicable law, Consultant shall assign to Company, and hereby does so assign, all
Discoveries, and assigns the right to obtain patents, copyright or other registrations
on any and all such Discoveries in any or all countries in Consultant’s name or
otherwise.
	 
	 	   (c)	 	Company and Consultant agree that because of the unique nature of Company’s
business, products and services, Consultant shall not voluntarily or involuntarily, for
any cause or reason whatsoever:

	 	i.	 	Use any of the Confidential Information to create, promote,
encourage or assist in the formation or operation of any business;
	 
	 	ii.	 	Use, publish or distribute information learned about Company’s
customers through Consultant’s relationship with Company; or
	 
	 	iii.	 	Impart, disclose or otherwise communicate to any other person,
other that one currently employed by Company, any information concerning the
Confidential Information.

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	 	   (d)	 	Consultant will execute and deliver, from time to time after the date hereof,
upon Company’s request, such further conveyance instruments, and take such further
actions, as may be necessary or desirable to evidence more fully the transfer of
ownership of all the Discoveries to Company, or the original ownership of all the
Discoveries on the part of Company, to the fullest extent possible, including without
limitation (i) executing, acknowledging, and delivering any affidavits or documents of
assignment and conveyance regarding the Discoveries, (ii) providing testimony in
connection with any proceeding affecting the right, title, interest, or benefit of
Company in or to the Discoveries, and (iii) performing any other acts deemed necessary
to carry out the intent of this Agreement.
	 
	 	   (e)	 	In order to effectuate the provisions of this Paragraph 11, Consultant hereby
names and irrevocably constitutes and appoints Company, with full power of
substitution, as Consultant’s true and lawful attorney-in-fact to exercise Company’s
rights pursuant to this Paragraph 11.

	12)	 	Without limiting the generality of Paragraph 11(d), upon the request of Company, whether or
not made during the period of Consultant’s engagement with Company, Consultant shall assist
Company in any way necessary, including, but not limited to executing documents, to accomplish
the following, in any or all countries, with respect to any and all Discoveries; (a) to file
for and/or obtain a patent or patents, copyright registration or copyright registrations,
trademark, trade name, domain name or similar registration, or other means established for the
protection of intellectual property in the Discoveries, in the United States or any other
country; and (b) to protect and enforce Company’s rights in the Discoveries.
	 
	13)	 	This Agreement shall be governed by and construed and enforced in accordance with the laws of
the State of Delaware. Any and all disputes arising out of, relating to the performance of
the Services contracted for under, this Agreement shall be settled by arbitration in
accordance with the Commercial Arbitration Rules of the American Arbitration Association, or
any successor thereto then prevailing. Such arbitration shall be final and binding upon the
parties, and shall be the sole and exclusive remedy of the parties with respect to any dispute
arising out of, relating to, or resulting from the interpretation of the terms of this
Agreement, or any breach thereof. The costs of such arbitration shall be borne equally by the
parties. Notwithstanding the foregoing provisions of this Paragraph 13 to the contrary,
matters in which an equitable remedy or injunctive relief is sought by a party, shall not be
required to be submitted to arbitration, if the party seeking such remedy or relief objects
thereto, but instead shall be submitted to a court of law having appropriate jurisdiction.
This Paragraph 13 shall survive the termination of this Agreement.
	 
	14)	 	This Agreement between the parties shall constitute the entire written agreement between the
parties, and shall supersede any and all agreements or understandings in effect between the
parties hereto. Neither this Agreement nor Exhibit A hereto may be modified except by written
agreement executed by the parties hereto.
	 
	15)	 	Each provision of this Agreement shall be treated as a separate and independent clause, and
the unenforceability of any one clause shall in no way impair the enforceability of any of the
other

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	 	 	clauses herein. Moreover, if one or more of the provisions contained in this Agreement
shall for any reason be held to be excessively broad as to scope, activity, subject or
otherwise so as to be unenforceable at law, such provision or provisions shall be construed by
the appropriate judicial body by limiting or reducing such provision or provisions, so as to
be enforceable to the maximum extent comparable with the applicable law as such law shall then
be.
	 
	16)	 	No breach of any provision hereof can be waived unless in writing. Waiver of any breach of
any provision hereof shall not be deemed to be a waiver of any other breach of the same, or
any other provision.
	 
	17)	 	All notices, demands or other communications to be given or delivered under or by reason of
the provisions of this Agreement shall be in writing and shall be deemed to have been given
upon the earlier of: (i) when delivered personally to the recipient, (2) two days after being
sent to the recipient by reputable overnight courier services (charges prepaid), or (3) when
sent to the recipient by facsimile transmission (and receipt is confirmed by the facsimile
operator). Such notices, demands and other communications shall be sent to each Party at the
address and/or facsimile number indicated below, until further notice by either Party:

	 	 	 	 	 
	 

	 	MiddleBrook Pharmaceuticals, Inc.
	 	Lord James Blyth
	 

	 	20425 Seneca Meadows Parkway
	 	Lemington Grange
	 

	 	Germantown, Maryland 20876
	 	Lower Lemington
	 

	 	Attention: General Counsel
	 	Nr Moreton in Marsh
	 

	 	Facsimile: (301) 944-6700
	 	Gloucestershire GL56 9NN
	 

	 	 	 	England
	 

	 	 	 	Facsimile:

	18)	 	This Agreement may be executed in any number of counterparts and by different parties to this
Agreement on separate counterparts, each of which, when so executed, shall be deemed an
original, but all such counterparts shall constitute one and the same agreement. Any signature
delivered by a party by facsimile transmission shall be deemed to be an original signature to
this Agreement.

[signatures on following page]

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     IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first
above written.

	 	 	 	 	 	 	 
	MIDDLEBROOK PHARMACEUTICALS, INC.	 	CONSULTANT	 
	 
	 	 	 	 	 	 
	By:

	 	/s/ John S. Thievon
 

John S. Thievon
	 	/s/ Lord James Blyth
 

Name: Lord James Blyth
	 	 
	 

	 	President & CEO	 	 	 	 

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Exhibit A

Description of Services to be Performed by Consultant

Under a Consultant Agreement Entered into by the Parties

Capitalized terms used herein and not otherwise defined shall have the meanings ascribed thereto in
the Consulting Agreement between the parties.

Description of Services:

Generally, providing assistance to the CEO on commercialization of the Company’s research and
development efforts. In this regard, the Consultant will (i) establish a working relationship with
the Company’s current CEO, (ii) provide strategic guidance to Company’s development team in
late-stage development and commercialization tactics, and (iii) provide broad leadership on the
board of directors to ensure alignment with management and a successful company. In this role,
Consultant shall have no specific executorial authority or responsibilities.

Consultant shall devote three to four days surrounding each in person board of director’s meeting.
Both parties understand that the time commitment is not firm and the most important element of this
Agreement is successful discharge of the above responsibilities. Company shall reimburse Consultant
for all reasonable travel expenses incurred in connection with Consultants performance of the
Services.

 - 7 -exv4w1

Exhibit 4.1

	Loan Agreement dated November 1, 2008 between Badger Meter, Inc. and the M&I Marshall &
Ilsley Bank relating to Badger Meter’s revolving credit loan.

M&I MARSHALL & ILSLEY BANK

PROMISSORY NOTE

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Loan	 	Call /	 	 	 	 	 	 
	Principal	 	Loan Date	 	Maturity	 	No.	 	Coll	 	Account	 	Officer	 	Initials
	$30,000,000.00
	 	11-01-2008	 	 	10-31-2009	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

References in the shaded area are for Lender’s use only and do not limit the applicability of this document to any particular loan or item.
Any item above containing “***” has been omitted due to text length limitations.

	 	 	 	 	 	 	 
	Borrower:

	 	Badger Meter, Inc.
	 	Lender:
	 	M&I Marshall & Ilsley Bank
	 

	 	4545 W. Brown Deer Rd.
	 	 	 	SE Wisconsin Region Commercial Lending
	 

	 	Milwaukee, WI 53223-2413
	 	 	 	770 North Water Street
	 

	 	 	 	 	 	Milwaukee, WI 53202
	 
	 	 	 	 	 	 
	 
	 
	 	 	 	 	 	 
	Principal Amount: $30,000,000.00	 	 	 	Date of Note: November 1, 2008

PROMISE TO PAY. Badger Meter, Inc. (“Borrower”) promises to pay to M&I Marshall & Ilsley Bank
(“Lender”), or order, in lawful money of the United States of America, the principal amount of
Thirty Million & 00/100 Dollars ($30,000,000.00) or so much as may be outstanding, together with
interest on the unpaid outstanding principal balance of each advance. Interest shall be calculated
from the date of each advance until repayment of each advance.

PAYMENT. Borrower will pay this loan in one payment of all outstanding principal plus all accrued
unpaid interest on October 31, 2009. In addition, Borrower will pay regular monthly payments of
all accrued unpaid interest due as of each payment date, beginning November 30, 2008, with all
subsequent interest payments to be due on the same day of each month after that. Unless otherwise
agreed or required by applicable law, payments will be applied to Accrued Interest, Principal, Late
Charges, and Escrow. Borrower will pay Lender at Lender’s address shown above or at such other
place as Lender may designate in writing.

VARIABLE INTEREST RATE. The interest rate on this Note is subject to change from time to time
based on changes in an independent index which is the British Bankers Association (BBA) LIBOR and
reported by a major news service selected by Lender (such as Reuters, Bloomberg or Moneyline
Telerate). If BBA LIBOR for the one month period is not provided or reported on the first day of a
month because, for example, it is a weekend or holiday or for another reason, the One Month Libor
Rate shall be established as of the preceding day on which a BBA LIBOR rate is provided for the one
month period and reported by the selected news service (the “Index”). The Index is not necessarily
the lowest rate charged by Lender on its loans. If the Index becomes unavailable during the term
of this loan, Lender may designate a substitute index after notice to Borrower. Lender will tell
Borrower the current Index rate upon Borrower’s request. The interest rate change will not occur
more often than each first day of each calendar month and will become effective without notice to
the Borrower. The index currently is 4.003% per annum. The Index to be applied to the unpaid
principal balance of this Note will be calculated as described in the “INTEREST CALCULATION METHOD”
paragraph using a rate of 1.250 percentage points over the Index, resulting in an initial rate of
5.253% per annum based on a year of 360 days. NOTICE: Under no circumstances will the interest
rate on this Note be more than the maximum rate allowed by applicable law.

INTEREST CALCULATON METHOD. Interest on this Note is computed on a 365/360 basis; that is, by
applying the ratio of the interest rate over a year of 360 days, multiplied by the outstanding
principal balance, multiplied by the actual number of days the principal balance is outstanding.
All interest payable under this Note is computed using this method. This calculation method
results in a higher effective interest rate than the numeric interest rate stated in this Note.

PREPAYMENT. Borrower may pay without penalty all or a portion of the amount owed earlier than it
is due. Early payment will not, unless agreed to by Lender in writing, relieve Borrower of
Borrower’s obligation to continue to make payments of accrued unpaid interest. Rather, early
payments will reduce the principal balance due. Borrower agrees not to send Lender payments marked
“paid in full”, “without recourse”, or similar language. If Borrower sends such a payment, Lender
may accept it without losing any of Lender’s rights under this Note, and Borrower will remain
obligated to pay any further amount owed to Lender. All written communications concerning disputed
amounts, including any check or other payment instrument that indicates that the payment
constitutes “payment in full” of the amount owed or that is tendered with other conditions or
limitations or as full satisfaction of a disputed amount must be mailed or delivered to: M&I
Marshall & Ilsley Bank, P.O. Box 3114, Milwaukee, WI 53201-3114.

LATE CHARGE. If a payment is not made on or before the 10th day after its due date,
Borrower will be charged 5.000% of the unpaid portion of the regularly scheduled payment.

INTEREST AFTER DEFAULT. Upon default, including failure to pay upon final maturity, the interest
rate on this Note shall be increased by adding a 3.000 percentage point margin (“Default Rate
Margin”). The Default Rate Margin shall also apply to each succeeding interest rate

 

 

change that
would have applied had there been no default. However, in no event will the interest rate exceed
the maximum rate permitted by applicable law.

DEFAULT. Each of the following shall constitute an event of default (“Event of Default”) under
this Note:

     Payment Default. Borrower fails to make any payment when due under this Note.

     Other Defaults. Borrower fails to comply with or to perform any other term, obligation,
covenant or condition contained in this Note or in any of the related documents or to comply with
or to perform any term, obligation, covenant or condition contained in any other agreement between
Lender and Borrower.

     Default in Favor of Third Parties. Borrower or any Grantor defaults under any loan, extension
of credit, security agreement, purchase or sales agreement, or any other agreement, in favor of any
other creditor or person that may materially affect any of Borrower’s property or Borrower’s
ability to repay this Note or perform Borrower’s obligations under this Note or any of the related
documents.

PROMISSORY NOTE

(Continued)

Loan No:                     Page 2

     False Statements. Any warranty, representation or statement made or furnished to Lender by
Borrower or on Borrower’s behalf under this Note or the related documents is false or misleading in
any material respect, either now or at the time made or furnished or becomes false or misleading at
any time thereafter.

     Insolvency. The dissolution or termination of Borrower’s existence as a going business, the
insolvency of Borrower, the appointment of a receiver for any part of Borrower’s property, any
assignment for the benefit of creditors, any type of creditor workout, or the commencement of any
proceeding under any bankruptcy or insolvency laws by or against Borrower.

     Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings,
whether by judicial proceeding, self-help, repossession or any other method, by any creditor of
Borrower or by any government agency against any collateral securing the loan. This includes a
garnishment of any of Borrower’s accounts, including deposit accounts, with Lender. However, this
Event of Default shall not apply if there is a good faith dispute by Borrower as to the validity or
reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if
Borrower gives Lender written notice of the creditor or forfeiture proceeding and deposits with
Lender monies or a surety bond for the creditor or forfeiture proceeding, in an amount determined
by Lender, in its sole discretion, as being an adequate reserve or bond for the dispute.

     Events Affecting Guarantor. Any of the preceding events occurs with respect to any guarantor,
endorser, surety, or accommodation party of any of the indebtedness or any guarantor, endorser,
surety, or accommodation party dies or becomes incompetent, or revokes or disputes the validity of,
or liability under, any guaranty of the indebtedness evidenced by this Note.

     Change in Ownership. Any change in ownership of twenty-five percent (25%) or more of the
common stock of Borrower.

Adverse Change. A material adverse change occurs in Borrower’s financial condition, or Lender
believes the prospect of payment or performance of this Note is impaired.

     Insecurity. Lender in good faith believes itself insecure.

LENDER’S RIGHTS. Upon default, Lender may declare the entire unpaid principal balance on this Note
and all accrued unpaid interest immediately due, and then Borrower will pay that amount.

ATTORNEY’S FEES; EXPENSES. Lender may hire or pay someone else to help collect this Note if
Borrower does not pay. Borrower will pay Lender that amount. This includes, subject to any limits
under applicable law, Lender’s attorney’s fees and Lender’s legal expenses, whether or not there is
a lawsuit, including attorney’s fees, expenses for bankruptcy proceedings (including efforts to
modify or vacate any automatic stay or injunction), and appeals. If not prohibited by applicable
law, Borrower also will pay any court costs, in addition to all other sums provided by law.

JURY WAIVER. Lender and Borrower hereby waive the right to any jury trial in any action,
proceeding, or counterclaim brought by either Lender or Borrower against the other.

GOVERNING LAW. This Note will be governed by federal law applicable to Lender and, to the extent
not preempted by federal law, the laws of the State of Wisconsin without regard to its conflicts of
law provisions. This Note has been accepted by Lender in the State of Wisconsin.

CHOICE OF VENUE. If there is a lawsuit, Borrower agrees upon Lender’s request to submit to the
jurisdiction of the courts of Milwaukee County, State of Wisconsin.

DISHONORED ITEM FEE. Borrower will pay a fee to Lender of $15.00 if Borrower makes a payment on
Borrower’s loan and the check or preauthorized charge with which Borrower pays is later dishonored.

RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a right of setoff in
all Borrower’s accounts with Lender (whether checking, savings, or some other account). This
includes all accounts Borrower holds jointly with someone else and all accounts Borrower may open
in the future. However, this does not include any IRA or Keogh accounts, or any trust accounts for
which setoff would be prohibited by law. Borrower authorizes Lender, to the extent permitted by
applicable law, to charge or setoff all sums owing on the debt against any and all such accounts,
and, at Lender’s option, to administratively freeze all such accounts to allow Lender to protect
Lender’s charge and setoff rights provided in this paragraph.

LINE OF CREDIT. This Note evidences a revolving line of credit. Advances under this Note, as well
as directions for payment from Borrower’s accounts, may be requested orally or in writing by
Borrower or by an authorized person. Lender may, but need not, require that all oral requests be
confirmed in writing. Borrower agrees to be liable for all sums either: (A) advanced in
accordance with the instructions of an authorized person, or (B) credited to any of Borrower’s
accounts with Lender. The unpaid principal balance owing on this Note at any time

 

 

may be evidenced
by endorsements on this Note or by Lender’s internal records, including daily computer print-outs.
Lender will have no obligation to advance funds under this Note if: (A) Borrower or any guarantor
is in default under the terms of this Note or any agreement that Borrower or any guarantor has
with Lender, including any agreement made in connection with the signing of this Note; (B)
Borrower or any guarantor ceases doing business or is insolvent; (C) any guarantor seeks, claims
or otherwise attempts to limit, modify or revoke such guarantor’s guarantee of this Note or any
other loan with Lender; (D) Borrower has applied funds provided pursuant to this Note for purposes
other than those authorized by Lender; or (E) Lender in good faith believes itself insecure.

SUCCESSOR INTERESTS. The terms of this Note shall be binding upon Borrower, and upon Borrower’s
heirs, personal representatives, successors and assigns, and shall inure to the benefit of Lender
and its successors and assigns.

GENERAL PROVISIONS. This Note benefits Lender and its successors and assigns, and binds Borrower
and Borrower’s heirs, successors, assigns, and representatives. If any part of this Note cannot be
enforced, this fact will not affect the rest of the Note. Lender may delay or forgo enforcing any
of its rights or remedies under this Note without losing them. Borrower and any other person who
signs, guarantees or endorses this Note, to the extent allowed by law, waive presentment, demand
for payment, and notice of dishonor. Upon any change in the terms of this Note, and unless
otherwise expressly stated in writing, no party who signs this Note, whether as maker, guarantor,
accommodation maker or endorser, shall be released from liability. All such parties agree that
Lender may renew or extend (repeatedly and for any length of time) this loan or release any party
or guarantor or collateral; or impair, fail to realize upon or perfect Lender’s security interest
in the collateral; and take any other action deemed necessary by Lender without the consent of or
notice to anyone. All such parties also agree that Lender may modify this loan without the consent
of or notice to anyone other than the party with whom the modification is made. The obligations
under this Note are joint and several.

PROMISSORY NOTE

(Continued)

Loan No:                     Page 3

PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE, INCLUDING
THE VARIABLE INTEREST RATE PROVISIONS. BORROWER AGREES TO THE TERMS OF THE NOTE.

BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE.

BORROWER:

BADGER METER, INC.

	 	 	 	 	 	 	 
	By:

	 	/s/ Richard E. Johnson
 

	 	 	 	  
	 	 	Senior Vice President — Finance, Chief Financial Officer and Treasurer	 
	 
	 	 	 	 	 	 
	By:

	 	/s/ Ronald H. Dix
 

	 	 	 	 
	 	 	Senior Vice President — Administration

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