Exhibit
10.4





PROMISSORY NOTE


	
  Principal

  	
  Loan
  Date

  	
  Maturity

  	
  Loan
  No

  	
  Call
  / Coll

  	
  Account

  	
  Officer

  	
  Initials

  
	
  $20,000,000.00

  	
  04-30-2006

  	
  04-29-2007

  	
  8454545-10000

  	
  A4

  	
  00002551852

  	
  18181

  	
   

  
	
  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:

  	
   

  	
  Old Second Bancorp. Inc.

  	
   

  	
  Lender:

  	
   

  	
  M&I Marshall & Ilsley Bank

  
	
   

  	
   

  	
  37 South River St.

  	
   

  	
   

  	
   

  	
  Correspondent Banking

  
	
   

  	
   

  	
  Aurora, IL 60506-4173

  	
   

  	
   

  	
   

  	
  770 N. Water Street

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Milwaukee, WI 53202

  



 


	
  Principal Amount: $20,000,000.00

  	
  Initial Rate: 5.729%

  	
  Date of Note:  April 30, 2006

  



 


PROMISE TO PAY.  Old Second Bancorp, 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 Twenty Million
& 00/100 Dollars ($20,000,000.00) 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 April 29, 2007.
In addition, Borrower will pay regular monthly payments of all accrued unpaid
interest due as of each payment date, beginning May 29, 2006, 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, credit life premiums, principal, late charges, and
escrow. The annual interest rate for this Note is computed on a 365/360 basis;
that is, by applying the ratio of the annual 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. 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 an 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. Borrower understands
that Lender may make loans based on other rates as well. The Index currently is
4.829% per annum. The interest rate to be applied to the unpaid principal
balance of this Note will be at a rate of 0.900 percentage points over the
Index, resulting in an initial rate of 5.729% per annum. NOTICE: Under no
circumstances will the interest rate on this Note be more than the maximum rate
allowed by applicable law.


PREPAYMENT.  Borrower may pay without penalty all or a
portion of the amount owed earlier than it is due. Early payments 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. 3114 Milwaukee, WI 53201-3114.


LATE CHARGE.  If a payment is 10 days or more late, 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. Lender, at its option, may, if permitted under applicable
law, increase the variable interest rate on this Note to 3.900 percentage
points over the Index. The interest rate will not 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.


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
governmental 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. In
the event of a death, Lender, at its option, may, but shall not be required to,
permit the guarantor’s estate to assume unconditionally the obligations arising
under the guaranty in a manner satisfactory to Lender, and, in doing so, cure
any Event of Default


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.


ATTORNEYS’ 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
attorneys’ fees and Lender’s legal expenses, whether or not there is a lawsuit,
including attorneys’ 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.











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:


OLD SECOND BANCORP, INC.


	
  By:

  	
   /s/ William Skoglund

  	
   

  	
  By:

  	
   /s/ J. Douglas Cheatham

  
	
   

  	
   William Skoglund, President of Old Second
  Bancorp,

  	
   

  	
   

  	
   J. Douglas Cheatham, SVP and CFO of Old Second

  
	
   

  	
   Inc.

  	
   

  	
   

  	
   Bancorp, Inc.