<DOCUMENT>
<TYPE>EX-4
<SEQUENCE>3
<FILENAME>c78641exv4.txt
<DESCRIPTION>LOAN AGREEMENT
<TEXT>
<PAGE>



                                                                      EXHIBIT 4

  LOAN AGREEMENT BETWEEN BANK ONE, NA AND THE BADGER METER EMPLOYEE SAVINGS AND
                         STOCK OWNERSHIP PLAN AND TRUST

         Bank One, NA, with its main office in Chicago, Illinois (the "Bank")
and the Badger Meter Employee Savings and Stock Ownership Plan and Trust (the
"ESSOP") as established under that certain Trust Agreement effective January 1,
1991, between Badger Meter, Inc. and Marshall & Ilsley Trust Company, as Trustee
(the "Trustee"), agree as follows:

1. Definitions.  As used in this Agreement, the following terms shall have the
following meanings, whether or not they are hereinafter capitalized.

1.2      "Closing Date" means the date of the closing of this agreement by and
         between the Bank and the ESSOP.
1.3      "ERISA" means the Employee Retirement Income Security Act of 1974, as
         amended.
1.4      "Eurodollar Loans" shall mean loans under this Agreement in the minimum
         amount of $100,000, the interest rates on which are determined on the
         basis of the 30, 60, 90 or 180 day LIBOR Rate. The term "LIBOR Rate"
         shall mean the per annum offered rate for deposits in United States
         dollars for one, two, three and six month interest periods (the
         "Interest Periods") which appear on the Bloomberg electronic rate
         terminals at the Bank's money center, as of 11:00 AM, London time,
         each Banking Day. If the appropriate Bloomberg Rate Screen is not
         accessible, the applicable LIBOR Rate will be determined by the Bank
         on the basis of other electronic information and other broker's quotes
         or offered rates for deposits in United States dollars. As used
         herein, "Banking Day" shall mean any day Bank's money center is open
         for business. LIBOR Rate quotes shall be subject to availability to
         the Bank and the Bank retains the right to adjust the reported LIBOR
         Rate to reflect reserve or insurance requirements which may be imposed
         by any regulatory agency having jurisdiction over the Bank."
1.5      "Guarantor" means Badger Meter, Inc.
1.6      "Guarantee" means the unlimited obligation assumed by Badger Meter,
         Inc. to guarantee the performance by the ESSOP of all the terms and
         conditions under this loan agreement in the form of Exhibit A attached
         hereto.
1.7      "Interest Period" shall mean, with respect to any Eurodollar Loan,
         each period commencing on the date such Eurodollar Loan is made or
         converted from a Prime Rate Loan or the last day of the next preceding
         Interest Period for such Loan and ending on the numerically
         corresponding day in the first, second, third or sixth calendar month
         thereafter, as the ESSOP may select, except that each Interest Period
         which commences on the last business day of a calendar month (or on
         any day for which there is no numerically corresponding day in the
         subsequent calendar month; provided, that (I) if any Interest Period
         would otherwise end after the Termination Date, such Interest Period
         shall end on the Termination Date, and (ii) each Interest Period which
         would otherwise end on a day which is not a business day shall end on
         the next succeeding business day or, if such next succeeding business
         day falls in the next succeeding calendar month, on the next preceding
         business day.
1.8      "Loan" means the loan described in Section 2.1 of this Agreement.
1.9      "Note" means the Promissory Note in the form of Exhibit B attached
         hereto.
1.10     "Pledge Agreement" means the agreement in the form of Exhibit C
         attached hereto by the ESSOP to pledge, as collateral for the Loan,
         the Badger Meter, Inc. common stock acquired with the proceeds of a
         prior loan made to finance the acquisition of that stock.
1.11     "Prime Rate" shall mean the rate announced by the Bank as its prime
         rate, with such rate changing as and when the Bank announces any
         change in its prime rate. The Prime Rate is not the lowest rate of
         interest charged by the Bank.
1.12     "Prime Rate Loans" shall mean loans under this Agreement, the
         interest rate on which are determined on the basis of the Prime Rate.
1.13     "Termination Date" shall mean June 20, 2004.

2. The Loan.

2.1      Stock Acquisition Loan.  The Bank agrees to lend to the ESSOP, subject
         to the terms and conditions hereof, the principal amount of $1,285,000
         to be used by the ESSOP to refinance a prior loan made to finance the
         acquisition of Badger Meter, Inc. common stock for the benefit of the
         participants of the ESSOP. The entire principal amount and accrued
         interest shall be paid in full on or before June 20,


                                       16
<PAGE>




         2004.  The loan shall be evidenced by the Note.

2.2      Interest. (a) The ESSOP shall have the option of designating the
         outstanding balance as a Prime Rate Loan or as a Eurodollar Loan. In
         the event that the ESSOP and the Bank have not agreed upon the rate and
         interest period for a Eurodollar Loan, then, prior to an event of
         default described in Section 6 below, the outstandings shall be deemed
         to be a Prime Rate Loan. The ESSOP promises to pay to the Bank interest
         on the unpaid principal amount of each loan for the period from and
         including the date of such loan to, but excluding the date such loan
         shall be paid in full, (i) while such loan is a Prime Rate Loan, at a
         rate per annum equal to the Prime Rate (as in effect from time to
         time); (ii) while such loan is a Eurodollar Loan, for each Interest
         Period relating thereto, at a rate per annum equal to the LIBOR Rate
         applicable to such loan for such Interest Period, plus 1.50%. The ESSOP
         hereby delegates authority to select interest rates and interest
         periods hereunder to the Guarantor, and the Bank may rely on any such
         directions received from the Guarantor.

         (b)       Notwithstanding the foregoing, the ESSOP will pay to the
         Bank on demand interest at the rate of two percent in excess of the
         rate otherwise in effect for any principal which shall not be paid in
         full when due (whether at stated maturity, by acceleration or
         otherwise), for each day during the period from and including the due
         date thereof to, but excluding the date the same is paid in full.

         (c)       The Note may be prepaid in whole or in part, at the option
         of the ESSOP at any time, provided however, that the ESSOP shall give
         the Bank at least one day prior written notice of any such prepayment.
         Accrued interest on the amount prepaid shall also be paid on the date
         of prepayment. In the event of prepayment of less than all of the
         outstanding balance of such Note, such prepayment shall be in the
         minimum principal amount of Five Thousand Dollars ($5,000.00) or a
         multiple thereof. To the extent at the time of any prepayment there
         exists both a Prime Rate Loan and a Eurodollar Loan, the prepayment
         shall be applied to the Prime Rate Loan first, until there is no
         outstanding principal balance thereon, and the remainder, if any,
         applied to the oldest outstanding Eurodollar Loan. There shall be no
         prepayment indemnity for any prepayment of a Prime Rate Loan. In the
         event any Eurodollar Loan is prepaid prior to the end of the Interest
         Period, the ESSOP hereby agrees to indemnify the Bank against any
         funding loss or expense which the Bank may sustain or incur by reason
         of the liquidation or re-employment of deposits or other funds
         acquired by the Bank to fund or maintain any Eurodollar Loan as
         reasonably determined by Bank.

3. Representations and Warranties.  In order to induce the Bank to make the
loan, the Guarantor represents and warrants to the Bank:

3.1      Valid Existence. The ESSOP is a duly qualified employee stock ownership
         plan meeting the requirements of Sections 401(a) and 4975(e)(7) of the
         Internal Revenue Code and complies with the applicable requirements
         thereof, and with the requirements of any other applicable state or
         federal law.
3.2      Execution and Delivery of Agreement, Note and Pledge Agreement. The
         execution and delivery of this Agreement, the Note, and the Pledge
         Agreement, and the performance by the ESSOP of its obligations
         hereunder and thereunder, are within the ESSOP's general powers, have
         been fully authorized by all necessary and proper action under the
         terms of the applicable ESSOP Trust documents, and do not (a) conflict
         with or result in a breach of any of the provisions of the applicable
         Trust documents, (b) contravene any law, rule or regulation of the
         State of Wisconsin, or the United States, or any order, writ, judgment,
         injunction, decree, determination or award presently in effect which
         affects or binds the ESSOP, (c) conflict with or result in a breach of
         or default under any indenture or loan or credit agreement or any other
         agreement or instrument to which the ESSOP is a party in respect of
         indebtedness for money borrowed or (d) require the approval or consent
         of any governmental body, agency or authority or any other person or
         entity. This Agreement, the Note, and the Pledge Agreement, when
         executed and delivered, will constitute the valid and binding
         obligations of the ESSOP enforceable in accordance with their terms, in
         each case (a) except as the enforceability thereof may be limited by
         applicable bankruptcy, insolvency, reorganization, moratorium or
         similar laws affecting the enforceability of creditors' rights
         generally, (b) subject to the availability of equitable remedies for
         the enforcement of such obligations, and (c) subject to applicable laws
         and equitable principles which may limit or otherwise affect the
         remedies provided therein.
3.3      Use of Proceeds.  The ESSOP will not use the loan proceeds for any
         purpose other than to refinance the acquisition of Badger Meter, Inc.
         common stock.

3.4      Other Loans.  The ESSOP will not enter into any other loan agreements
         without the prior written consent of the Bank, which consent will not
         be unreasonably withheld.

                                     17

<PAGE>

3.5      Investment Company. The ESSOP is not an "investment company" or a
         company controlled by an "investment company" within the meaning of
         the Investment Company Act of 1940, as amended.
3.6      Litigation. There is no litigation or administrative or regulatory
         proceeding pending or threatened against the ESSOP which might result
         in any material adverse change in the financial condition of the ESSOP.

4.  Conditions of Borrowing. The Bank's obligation to make the Loan is
         subject to the satisfaction of the following conditions:

4.1      Opinion of Counse  The Bank shall have received from counsel
         for the ESSOP, a favorable opinion in form and substance satisfactory
         to the Bank and dated as of the Closing Date as to (i) the matters
         referred to in Sections 3.1, 3.2, 3.5 and, to the best of such
         counsel's knowledge, 3.6 hereof; and (ii) such other matters incident
         to the matters herein contemplated as the Bank may reasonably request.
4.2      Guaranty. The Bank shall have received from the Guarantor the Guaranty
         and a favorable opinion from counsel for the Guarantor in form and
         substance satisfactory to the Bank and dated as of the Closing Date
         that (i) the Guarantor is a legally organized and validly existing
         corporation under the laws of the State of Wisconsin; (ii) the
         execution and delivery of the Guaranty, and the performance by the
         Guarantor of its obligations under the Guaranty are within its
         corporate powers, have been duly authorized by all necessary corporate
         action on the part of the Guarantor, and do not (a) conflict with or
         result in a breach of any of the provisions of its Articles of
         Incorporation or By-Laws, (b) contravene any law, rule, or regulation
         of the State of Wisconsin, or of the United States, or any order, writ,
         judgment, injunction, decree, determination or award presently in
         effect which affects or binds it, (c) conflict with or result in a
         breach of or default under any indenture or loan or credit agreement or
         any other agreement or instrument to which it is a party in respect of
         indebtedness for money borrowed or (d) require the approval or consent
         of any other person or entity; (iii) the Guaranty, when executed and
         delivered, will constitute the valid and binding obligation of the
         Guarantor enforceable in accordance with its terms, in each case (a)
         except as the enforceability thereof may be limited by applicable
         bankruptcy, insolvency, reorganization, moratorium or similar laws
         affecting the enforceability of creditors' rights generally, (b)
         subject to the availability of equitable remedies for the enforcement
         of such obligations and (c) subject to applicable laws and equitable
         principles which may limit or otherwise affect the remedies provided,
         therein; and (iv) such other matters incident to the matters herein
         contemplated as the Bank may reasonably request. The Bank shall also
         have received copies, certified by the Secretary or Assistant Secretary
         of the Guarantor to be true and correct and in full force and effect on
         the Closing Date, of (i) the Restated Articles of Incorporation and
         Restated By-Laws of the Guarantor; and (ii) resolutions of the Board of
         Directors of the Guarantor authorizing the issuance, execution and
         delivery of the Guaranty and authorizing and directing the Guarantor to
         make a stream of contribution payments to the ESSOP sufficient to
         enable the ESSOP to repay the principal and interest as they come due
         on the Note.
4.3      Pledge Agreement. The Bank shall have received from the ESSOP, the duly
         executed Pledge Agreement in a form acceptable to the Bank.
4.4      Representations and Warranties True and Correct. The representations
         and warranties contained in Section 3 hereof shall be true and correct
         on and as of the Closing Date; there shall exist on the Closing Date no
         conditions, event or act which would constitute a default hereunder and
         no condition, event, act or omission shall have occurred which, with
         the giving of notice or the passage of time, would constitute an event
         of default hereunder.
4.5      Proceedings Satisfactory to Bank. All proceedings taken in connection
         with the transactions contemplated by this agreement and all
         instruments, authorizations and other documents applicable thereto
         shall be satisfactory in form and content to the Bank and the Bank
         shall have received copies of all such documents reasonably required by
         it.

5. Affirmative Covenants.  The Guarantor covenants that it will, while any part
         of the Note remains unpaid, unless prior written waiver is granted by
         the Bank:

5.1      Books and Records. Keep proper, complete and accurate books of record
         and account and permit any representatives of the Bank to visit and
         inspect any of the books and records of the ESSOP at any reasonable
         time and as often as may reasonably be desired.
5.2      Other Financial Information. Furnish to the Bank from time to time upon
         request any information regarding the Guarantor's financial condition
         which the Bank reasonably requests; and without request, the Guarantor
         will provide annual audited financial statements in form and content
         satisfactory to the Bank within 120 days of the end of each year and
         management-prepared financial statements within 45 days of the end of
         each of the first three quarters of each fiscal year; all financial
         information provided to the Bank has been and will be accurate when
         given.

                                       18

<PAGE>


5.3      Maintenance of Valid Existence.  The Guarantor agrees that the ESSOP
         will maintain its valid existence and will neither dissolve nor
         institute any proceedings for dissolution.
5.4      ERISA. Notice and Certificate. As soon as possible upon the occurrence
         of a reportable event under ERISA and in any event within thirty (30)
         days after the Guarantor becomes aware of the same, the Guarantor shall
         furnish a certificate setting forth the details as to such reportable
         event as well as a copy of each notice thereof which is sent to the
         Department of Labor in accordance with applicable regulations.

6.  Events of Default.  If any one or more of the following events of default
         shall occur:

6.1      Failure to Pay Note.  The ESSOP shall default in the due and punctual
         payment of any installment of principal of or interest on the Note or
         any other obligation to the Bank and such default shall continue
         uncured for a period of five (5) days; or
6.2      Falsity of Representations and Warranties. Any representation or
         warranty made by the ESSOP or Guarantor herein or in any writing
         furnished in connection with or pursuant to this Agreement shall be
         false in any material respect on the date as of which made or as of
         which the same is to be effective; or
6.3      Default in Other Provisions.  The ESSOP or Guarantor shall default in
         the performance or observance of any other agreement herein contained
         and such default shall continue for a period of 30 days after written
         notice to the ESSOP or Guarantor from the holder of the Note; or
6.4      Default in Other Agreements. The Guarantor shall default in the
         performance of the terms of any other evidence of indebtedness for
         borrowed money issued or assumed by the Guarantor aggregating more than
         $100,000 or in the terms of any agreement under which such indebtedness
         is issued or secured and such default is not waived by the creditor and
         shall continue beyond the period of grace, if any, therein provided and
         which indebtedness is, in the reasonable judgment of the Bank, material
         to the Guarantor; or
6.5      Entry of Final Judgments.  A final judgment is entered against the
         ESSOP and such judgment shall remain unsatisfied, unbonded or unstayed
         for a period of sixty (60) days after the entry thereof; or
6.6      Insolvency, Failure to Pay Debts or Appointment of Receiver, Etc. The
         taking of action by the ESSOP or Guarantor to authorize such
         organization to become the subject of proceedings under the Federal
         Bankruptcy Code; or the execution by the ESSOP or Guarantor of a
         petition to become a debtor under the Federal Bankruptcy Code; or the
         filing of an involuntary petition against the ESSOP or Guarantor under
         the Federal Bankruptcy Code which remains undismissed for a Period of
         sixty (60) days; or the entry of an order for relief under the Federal
         Bankruptcy Code against the ESSOP or Guarantor.
                   Then and in any such event, as to the events described in
         Section 6.1 through 6.6, inclusive, the Bank may, at its option,
         declare the Note to be, and the Note shall thereupon, become
         immediately due and payable, together with accrued interest thereon. In
         the event of default, said Note shall bear interest at a rate equal to
         two percent (2%) in excess of the rate otherwise applicable.
         Presentment, demand, protest and notice of acceleration, nonpayment and
         dishonor in such case are hereby expressly waived.

7. Miscellaneous.

7.1      Survival of Representations and Warranties. The ESSOP's representations
         and warranties contained in this Agreement shall survive closing and
         execution and delivery of the Note.

7.2      Notices. All notices provided for herein shall be sent by first class
         mail and, if to the Bank, addressed to it at 111 East Wisconsin Avenue,
         Milwaukee, Wisconsin 53202, and if to the ESSOP, addressed to Marshall
         and Ilsley Trust Company at 1000 North Water Street, Milwaukee,
         Wisconsin 53202, attention of the officer signing this Agreement, with
         a copy to the Guarantor, addressed to 4545 West Brown Deer Road, Brown
         Deer, Wisconsin, 53223 to the attention of the Vice President-Finance
         or to such other address with respect to either party as such party
         shall notify the other in writing; such notices shall be deemed given
         when mailed.
7.3      Non-Recourse To ESSOP. Notwithstanding any provisions herein to the
         contrary, the Bank shall have no recourse against the ESSOP except as
         provided in the Pledge Agreement and as to such other assets of the
         ESSOP as may be permitted by law.
7.4      Titles.  The titles of sections in this Agreement are for convenience
         only and do not limit or construe the meaning of any section.
7.5      Parties Bound; Waiver. The provisions of this Agreement shall inure to
         the benefit of and be binding upon any successor of any of the parties
         hereto and shall extend and be available to any holder of the Note;
         provided that the ESSOP's rights under this Agreement are not
         assignable. No delay on the part of any holder of the Note in
         exercising any right, power or privilege hereunder shall operate as a
         waiver thereof, and no single or partial exercise of any right, power
         or privilege hereunder shall preclude other or further exercise thereof
         or the exercise of any other right, power or privilege. The rights and
         remedies


                                       19

<PAGE>

         herein specified are cumulative and not exclusive of any rights or
         remedies which the holder of a Note would otherwise have.
7.6      Governing Law.  This Agreement is being delivered and is intended to
         be performed in the State of Wisconsin and shall be construed and
         enforced in accordance with the internal laws of that state.
7.7      Counterparts. This Agreement may be executed in any number of
         counterparts, each of which shall be deemed an original, and all of
         which together shall constitute but one and the same instrument.
7.8      Severability. Should any portion of this Agreement be found to be
         invalid or unenforceable by a court of competent jurisdiction, the
         remainder of this Agreement shall remain in full force and effect.
7.9      Entire Agreement. This Agreement along with the Note, the Pledge
         Agreement and the Guaranty shall constitute the entire agreement of the
         parties pertaining to the subject matter hereof and supersede all prior
         or contemporaneous agreements and understandings of the parties in
         connection therewith.


                   IN WITNESS WHEREOF, the undersigned have executed this Loan
Agreement as of the date first set forth above.

                                   BANK ONE, NA

                                   By:   /S/  Gregory S. Dorf
                                         --------------------------------------
                                         First Vice President, Division Manager

                                   BADGER METER EMPLOYEE SAVINGS AND STOCK
                                   OWNERSHIP PLAN & TRUST

                                   By:   /S/  Lora C. Sykora
                                         --------------------------------------
                                         Vice President
         (SEAL)                    On behalf of Marshall and Ilsley Trust
                                   Company, as Trustee


         The undersigned Badger Meter, Inc. is signing below only to
acknowledge the representations, warranties and covenants set forth in sections
3, 5 and 7 above.

                                   BADGER METER, INC.

                                   By:     /S/  Richard A. Meeusen
                                           ------------------------------------
                                   Title:  President & CEO
                                           ------------------------------------




                                       20



<PAGE>



                                    EXHIBIT A

                  ADDENDUM TO GUARANTY OF SPECIFIC TRANSACTION

                               DATED JUNE 20, 2003

Guarantor also agrees as follows:

                          1.       DEBTOR'S FINANCIAL CONDITION.  The Guarantor
warrants and represents to the Lender that (i) the Guarantor is sufficiently
knowledgeable and experienced in financial and business matters to evaluate and
understand the risks assumed in connection with the execution of this Guaranty;
(ii) the Guarantor has had the opportunity to examine the records, reports,
financial statements, and other information relating to the financial condition
of the Debtor; (iii) the Guarantor has relied solely upon investigations of the
Debtor's financial condition conducted by the Guarantor or the Guarantor's
authorized representative in deciding to execute this Guaranty; and (iv) the
Guarantor, or its authorized representative, shall continue to independently
review, monitor and investigate the financial condition of the Debtor while this
Guaranty is in effect. THE GUARANTOR SPECIFICALLY RELIEVES THE LENDER OF ANY
DUTY, OBLIGATION OR RESPONSIBILITY OF ANY NATURE WHATSOEVER TO ADVISE THE
GUARANTOR OF ANY CHANGE IN THE DEBTOR'S FINANCIAL CONDITION.

                          2.       COLLATERAL.  The Guarantor hereby authorizes
the Lender, without further notice to anyone, to charge any account of the
Guarantor for the amount of any and all Obligations due under this Guaranty.

                          3.       ADDITIONAL COLLATERAL.  If the market value
of the pledged shares of stock falls below $21.00/share, or the Lender otherwise
has a collateral coverage ratio of less than 1 to 1, then the Guarantor agrees
upon the request of the Lender to provide such additional collateral as the
Lender deems to be sufficient to cover such shortfall.

                          4.       ACCELERATION OF OBLIGATIONS; SUCCESSORS;
MULTIPLE GUARANTORS. If the Guarantor shall become the subject of any bankruptcy
or insolvency proceedings, the Guarantor's liability hereunder to pay the
Obligations shall become immediately due and payable whether or not the
Obligations are then due and payable by the Debtor or any other guarantor. This
Guaranty shall inure to the benefit of the Lender, its successors and assigns
and of the holder and owner of any of the Obligations, and shall be binding on
heirs, executors, administrators, successors and assigns of the Guarantor.

                          5.       NOTICE TO GUARANTOR.  By its acceptance of
this Guaranty, the Lender acknowledges that it will, upon any event of default
by the Debtor, notify Guarantor of such default and unless prohibited from doing
so by any applicable law, regular or court order, make demand upon Guarantor,
before liquidating collateral pledged by the Debtor.

                          6.       EXPENSES.  In addition to the costs of
collection agreed to in the Guaranty, the Guarantor agrees to pay $3,000 of the
Lender's legal fees (including fees of in-house counsel) incurred in the
preparation of the Loan Agreement between the Debtor and the Lender and all
related documents.

                                         BADGER METER, INC.


                                         By:      /S/  Richard A. Meeusen
                                                  --------------------------
                                         Title:   President & CEO
                                                  --------------------------



                                       21




<PAGE>


                                    EXHIBIT B

                                 PROMISSORY NOTE


$1,285,000.00                                               June 20, 2003

                  FOR VALUE RECEIVED, the undersigned borrower (the "Borrower"),
promises to pay to the order of Bank One, NA, with its main office in Chicago,
Illinois (the "Bank"), at its office in Milwaukee, Wisconsin, the principal sum
of One Million Two Hundred Eighty-five Thousand and 00/100 Dollars
($1,285,000.00), payable June 20, 2004 (the "MATURITY DATE").

                  Interest. The unpaid outstanding principal balance of the Note
shall bear interest at rate equal to, at Borrower's option, one or more of the
following: (a) The prime rate of interest as announced and in effect from time
to lime at the Bank, with the rate hereon changing as and when such rate changes
(such a loan a "PRIME RATE LOAN" and such a rate a "PRIME RATE"); or (b) 1.50%
per annum in excess of the LIBOR Rate (such a loan a "EURODOLLAR LOAN" and such
a rate a "LIBOR RATE").

                  Interest on the outstanding principal amount of the Note shall
be payable per the Loan Agreement described below, with a final payment of any
accrued interest due at the Maturity Date, or the earlier termination of the
Loan Agreement.

                  Principal. The unpaid principal balance of this Note as may be
outstanding from time to time hereunder, may be paid in the Borrower's sole
discretion, at any time subject to the provisions of the Loan Agreement
described below, but in any event, the entire unpaid principal balance shall be
due and payable on June 20, 2004.

                  Interest shall be computed daily based on a 360 day year.
Principal and interest not paid when due shall bear interest from and after the
due date until paid at a rate of 2% per annum plus the rate otherwise payable
hereunder.

                  In no event will the interest rate hereunder exceed that
permitted by applicable law. If any interest or other charge is finally
determined by a court of competent jurisdiction to exceed the maximum amount
permitted by law, the interest or charge shall be reduced to the maximum
permitted by law, and the Bank may credit any excess amount previously collected
against the balance due or refund the amount to the Borrower.

                  Without affecting the liability of any Borrower, endorser,
surety or guarantor, the Bank may, without notice, renew or extend the time for
payment, accept partial payments, release or impair any collateral security for
the payment of this Note, or agree not to sue any party liable on it.

                  This Note constitutes the Note issued under a certain Loan
Agreement dated as of June 20, 2003 between the Borrower and the Bank, to which
Agreement reference is hereby made for a statement of the terms and conditions
under which loans evidenced hereby were or may be made and a description of the
terms and conditions upon which the maturity of this Note may be accelerated,
and for a description of the collateral securing this Note.

                             BADGER METER EMPLOYEE SAVINGS AND STOCK
                             OWNERSHIP PLAN AND TRUST
                             By: MARSHALL & ILSLEY TRUST COMPANY N.A., solely as
                             trustee

                             By:   /S/  Lora C. Sykora
                                   --------------------------------------------
                             Name and Title:  Lora C. Sykora, Vice President

                             Attested:

                             By:   /S/  Michael C. Weber
                                   --------------------------------------------
                             Name and Title:  Michael C. Weber, Vice President



                                       22


<PAGE>
                                    EXHIBIT C

                                PLEDGE AGREEMENT


                  Agreement made June 20, 2003, between Bank One, NA, with its
main office in Chicago, Illinois ("Bank") and Badger Meter Employee Savings and
Stock Ownership Plan and Trust ("ESSOP") as established under that certain Trust
Agreement effective January 1, 1991, by and between Badger Meter, Inc., and
Marshall & Ilsley Trust Company, as Trustee (the "Trustee").

                  WHEREAS, the Bank is concurrently making a loan to the ESSOP
in the principal amount of $1,285,000 as evidenced by the Loan Agreement dated
June 20, 2003 (the "Loan Agreement") and the Promissory Note dated June 20, 2003
(the "Note"), and

                  WHEREAS, the ESSOP has delivered to the Bank 62,487 shares of
Badger Meter, Inc. common stock (the "Pledged Stock") and irrevocable stock
powers executed in blank for the same, as security for the performance of its
obligations under said Loan Agreement and Note,

                  NOW, THEREFORE, in consideration of the foregoing premises, it
is agreed as follows:

1. The Bank's duty with reference to the Pledged Stock shall be solely to use
reasonable care in the custody and preservation of the Pledged Stock in its
possession, which shall not include any step necessary to preserve rights
against prior parties nor the duty to send notices, perform services, or take
any action in connection with the management of the Pledged Stock.

2. Shares of the Pledged Stock shall be released as security under this Pledge
Agreement upon payment of principal and interest outstanding under the Loan
Agreement and Note, determined as follows: The number of shares to be released
by the Bank shall be: (i) the total number of shares held by the Bank
immediately prior to the release for the plan year times (ii) a fraction, the
numerator of which is the amount of principal and interest paid on the Note (and
interest on the note refinanced by this Note) for the plan year and the
denominator of which is the sum of principal and interest on the Note (and
interest on the note refinanced by this Note) paid for the plan year and the
principal and interest on the Note to be paid for all future plan years,
computed by using the interest rate in effect as of the end of the plan year. In
any event, upon the full performance by the ESSOP of its obligations under the
Loan Agreement and Note, the Bank shall release any and all Pledged Stock
remaining as security hereunder and shall redeliver same to the ESSOP.

3. In the event that the ESSOP defaults in the performance of its obligations
under the Loan Agreement and Note, the Bank shall have the following rights and
remedies under this Pledge Agreement: (a) the Bank (i) may sell any or all of
the Pledged Stock at public or private sale, by one or more contracts, in one or
more parcels, at the same or different times, for cash and/or credit, or upon
any other terms, at such places and times, and to such persons as the Bank deems
best, (ii) shall apply any cash proceeds actually received from any sale in the
order and subject to the conditions provided under Section 409.615 of the
Wisconsin Statutes, and (iii) shall pay any surplus to the ESSOP and (b) the
Bank shall have any other rights and remedies of a secured party under the
Wisconsin Uniform Commercial Code, all such rights and remedies being
cumulative, not exclusive, and enforceable alternatively, successively, or
concurrently.

4. The ESSOP represents and warrants that it owns the Pledged Stock free and
clear of liens, security interests, encumbrances or other restrictions of any
kind other than those created by this Pledge Agreement, and that it is
authorized to enter into this Agreement. At any time requested by the Bank, the
ESSOP shall perform such other acts and sign such other documents and
instruments as may be necessary, proper, or convenient in order to carry out the
purposes and provisions of this Pledge Agreement.

5. This Pledge Agreement shall be binding upon the parties, and their
successors and assigns.
                  IN WITNESS WHEREOF, the parties have signed this Pledge
Agreement as of the day and year first above written.

                             BADGER METER EMPLOYEE SAVINGS AND STOCK OWNERSHIP
                             PLAN & TRUST

                             By:    /S/  Lora C. Sykora, Vice President
                                    -----------------------------------
                                    On behalf of Marshall and Ilsley Trust
                                    Company, as Trustee

                             BANK ONE, NA
                             By:    /S/  Gregory S. Dorf
                                    -----------------------------------
                                    First Vice President, Division Manager



                                       23


</TEXT>
</DOCUMENT>
