**Exhibit 10.4**

** **

**Associated Bank**

**PROMISSORY NOTE**
| **Borrower:** | **NORTH METRO HARNESS INITIATIVE, LLC  SOUTHWEST CASINO AND HOTEL CORP.  2001 KILLEBREW DRIVE. SUITE 306  MINNEAPOLiS, MN 55425** | **Lender:** | **ASSOCIATED BANK MINNESOTA, NATIONAL ASSOCIATION  1801 RIVERSIDE AVENUE  MINNEAPOLIS, MN 55454** |
|---------------|-----------------------------------------------------------------------------------------------------------------------------------|-------------|---------------------------------------------------------------------------------------------------|

 
| ** ** | **Principal Amount:  $500,000.00** | **Initial Rate: 6.750%** | **Date of Note: May 1, 2005** |
|------------|------------------------------------|--------------------------|-------------------------------|

 

**PROMISE TO PAY.** NORTH METROHARNESS INITIATIVE. LLC; and SOUTHWEST CASINO AND HOTEL CORP. (“Borrower”)jointly and severally promise to pay to ASSOCIATED BANK MINNESOTA, NATIONALASSOCIATION (“Lender”), or order, in lawful money of the United States ofAmerica, the principal amount of Five Hundred Thousand & 00/100 Dollars($500,000.00) or so much as may be outstanding, together with interest on theunpaid outstanding principal balance of each advance. Interest shall becalculated from the date of each advance until repayment of each advance.

 

          PAYMENT. Borrower will paythis loan in one payment of all outstanding principal plus all accrued unpaidinterest on June 1, 2006. In addition, Borrower will pay regular monthlypayments of all accrued unpaid interest due as of each payment date, beginningJune 25, 2005, with all subsequent interest payments to be due on the same dayof each month after that. Unless otherwise agreed or required by applicablelaw, payment will be applied first to any accrued unpaid interest; then toprincipal; and then to any late charges. The annual interest rate for this Noteis computed on a 365/360 basis; that is, by applying the ratio of the annualinterest rate over a year of 360 days, multiplied by the outstanding principalbalance, multiplied by the actual number of days the principal balance isoutstanding. Borrower will pay Lender at Lender’s address shown above or atsuch other place as Lender may designate in writing.

 

VARIABLE INTEREST RATE. The interest rate on this Note is subject tochange from time to time based on changes in an index which is the Lender’sPrime Rate (the “Index”). This is the rate Lender charges, or would charge, onshort-term unsecured loans to its most creditworthy commercial customers. Thisrate may or may not be the lowest rate available from Lender at any given time.Lender will tell Borrower the current index rate upon Borrower’s request. Theinterest rate change will not occur more often than each DAY. Borrowerunderstands that Lender may make loans based on other rates as well. The Indexcurrently is 5.750% per annum. The interest rate to be applied to the unpaidprincipal balance of this Note will be at a rate of 1.000 percentage point overthe Index, adjusted if necessary for any minimum and maximum rate limitationsdescribed below, resulting in an initial rate of 6.750% per annum.Notwithstanding the foregoing, the variable interest rate or rates provided forin this Note will be subject to the following minimum and maximum rates.NOTICE: Under no circumstances will the interest rate on this Note be less than5.000% per annum or more than the maximum rate allowed by applicable law.

 

                                     PREPAYMENT.  Borrower may pay without penalty all or aportion of the amount owed earlier than it is due. Early payments will not,unless agreed to by Lender in writing, relieve Borrower of Borrower’sobligation to continue to make payments of accrued unpaid interest. Rather,early payments will reduce the principal balance due. Borrower agrees not tosend Lender payments marked “paid in full”, “without recourse”, or similarlanguage. If Borrower sends such a payment, Lender may accept it without losingany of Lender’s rights under this Note, and Borrower will remain obligated topay any further amount owed to Lender.  Allwritten communications concerning disputed amounts, including any check orother payment instrument that indicates that the payment constitutes “paymentin full” of the amount owed or that is tendered with other conditions orimitations or as full satisfaction of a disputed amount must be mailed ordelivered to: ASSOCIATED BANK, P.O. BOX 19097 GREEN BAY, WI 54307-9097.

 

LATE CHARGE. If a payment is 11 days or more late, Borrower will becharged 5.000% of the unpaid portion of the regularly scheduled payment.

 

INTEREST AFTER DEFAULT. Upon default, including failure to pay uponfinal maturity, Lender, at its option, may, if permitted under applicable law,increase the variable interest rate on this Note to 6.000 percentage pointsover the Index. The interest rate will not exceed the maximum rate permitted byapplicable law.

 

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

 

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

 

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

 

Default in Favor of Third Parties. Borrower or any Grantor defaultsunder any loan, extension of credit, security agreement, purchase or salesagreement, or any other agreement, in favor of any other creditor or personthat may materially affect any of Borrower’s property or Borrower’s ability torepay this Note or perform Borrower’s obligations under this Note or any of therelated documents.

 

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

 

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

 

Creditor or Forfeiture Proceedings. Commencement of foreclosure orforfeiture proceedings, whether by judicial proceeding, self-help, repossessionor any other method, by any creditor of Borrower or by any governmental agencyagainst any collateral securing the loan. This includes a garnishment of any ofBorrower’s accounts, including deposit accounts, with Lender. However, thisEvent of Default shall not apply if there is a good faith dispute by Borroweras to the validity or reasonableness of the claim which is the basis of thecreditor or forfeiture proceeding and if Borrower gives Lender written noticeof the creditor or forfeiture proceeding and deposits with Lender monies or asurety bond for the creditor or forfeiture proceeding, in an amount determinedby Lender, in its sole discretion, as being an adequate reserve or bond for thedispute.

 

Events Affecting Guarantor. Any of the preceding events occurs withrespect to any Guarantor of any of the indebtedness or any Guarantor dies orbecomes incompetent, or revokes or disputes the validity of, or liabilityunder. any guaranty of the indebtedness evidenced by this Note.

 

Change In Ownership. Anychange in ownership of twenty-five percent (25%) or more of the common stock ofBorrower.

 

Adverse Change. A materialadverse change occurs in Borrower’s financial condition, or Lender believes theprospect of payment or performance of this Note is impaired.

 

Insecurity. Lender in goodfaith believes itself insecure.

 

LENDER’SRIGHTS. Upon default, Lender may declare the entire unpaid principal balance onthis Note and all accrued unpaid interest immediately due, and then Borrowerwill pay that amount.

 

ATTORNEYS’FEES; EXPENSES. Lender may hire or pay someone else to help collect this Note ifBorrower does not pay. Borrower will pay Lender that amount. This includes,subject to any limits under applicable law, Lender’s reasonable attorneys’ feesand Lender’s legal expenses, whether or not there is a lawsuit, includingreasonable attorneys’ fees, expenses for bankruptcy proceedings (includingefforts to modify or vacate any automatic stay or injunction), and appeals. Ifnot prohibited by applicable law, Borrower also will pay any court costs, inaddition to all other sums provided by law.

 

JURYWAIVER. Lender and Borrower hereby waive the right to any jury trial in anyaction, proceeding, or counterclaim brought by either Lender or Borroweragainst the other.

 

GOVERNINGLAW. This Note will be governed by, construed and enforced in accordance withfederal law and the laws of the State of Minnesota. This Note has been acceptedby Lender in the State of Minnesota.

 

DISHONOREDITEM FEE. Borrower will pay a fee to Lender of $25.00 if Borrower makes apayment on Borrower’s loan and the check or preauthorized charge with whichBorrower pays is later dishonored.

 

RIGHTOF SETOFF. To the extent permitted by applicable law, Lender reserves a rightof setoff in all Borrower’s accounts with Lender (whether checking, savings, orsome other account). This includes all accounts Borrower holds jointly withsomeone else and all accounts Borrower may open in the future. However, thisdoes not include any IRA or Keogh accounts, or any trust accounts for whichsetoff would be prohibited by law. Borrower authorizes Lender, to the extentpermitted by applicable law, to charge or setoff all sums owing on theindebtedness against any and all such accounts, and, at Lender’s option, toadministratively freeze all such accounts to allow Lender to protect Lender’scharge and setoff rights provided in this paragraph.

 

COLLATERAL.Borrower acknowledges this Note is secured by all security agreements,guarantees, mortgages, and other security instruments previously granted,contemporaneously granted, and granted in the future.

 

LINEOF CREDIT. This Note evidences a straight line of credit. Once the total amountof principal has been advanced, Borrower is not entitled to further loanadvances. Advances under this Note, as well as directions for payment fromBorrower’s accounts, may be requested orally or in writing by Borrower or by anauthorized person. Lender may, but need not, require that all oral requests beconfirmed 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 principalbalance owing on this Note at any time may be evidenced by endorsements on thisNote 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 anyagreement that Borrower or any guarantor has with Lender, including anyagreement made in connection with the signing of this Note; (B) Borrower or anyguarantor ceases doing business or is insolvent; (C) any guarantor seeks,claims or otherwise attempts to limit, modify or revoke such guarantor’sguarantee of this Note or any other loan with Lender; (D) Borrower has appliedfunds provided pursuant to this Note for purposes other than those authorizedby Lender; or (E) Lender in good faith believes itself insecure.

 

LETTEROF CREDIT LIMITATION. In the event Lender either contemporaneously or hereafterissues a Letter of Credit on behalf of Borrower (“Credit”), the amount of such Credit,or the aggregate amount of all such Credits, shall be applied against theavailable

 

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creditunder this Note.  Such limitation onavailable credit shall continue as long as Lender is obligated under anyoutstanding Credit.

 

INITIALNOTE RATE PROVISION. The Initial Note Rate is as of APRIL 14, 2005.

 

FINANCIALSTATEMENT. Borrower shall furnish to Lender annual financial statements within90 days following the close of Borrower’s fiscal or calendar year, asapplicable, and such other financial information respecting Borrower at suchtimes and in such form as Lender may request from time to time. In addition tobeing an Event of Default, Borrower shall pay Lender a $25.00 fee for failureto provide the financial statements within said 90 days or failure to providesuch other financial information within 30 days of the request therefore. The$25.00 fee shall continue to be imposed thereafter for each additional 30 dayperiod or part thereof, that the financial statements or other financialinformation have not been provided to Lender. If Borrower does not reimburseLender for the fees imposed by this section on demand therefore, Lender may addthe fees to the loan balance outstanding.

 

OTHERLOAN AGREEMENTS. If Borrower and Lender have either previously orcontemporaneously entered into a Loan Agreement, it is agreed that this Note issubject to the terms and conditions of such Loan Agreement. For purposes ofthis provision, Loan Agreement shall include, but not be limited to, a BusinessLoan Agreement, Agricultural Loan Agreement, Construction Loan Agreement, anyother LASER PRO Loan Agreement, and/or any attorney drafted lending agreement.

 

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

 

GENERALPROVISIONS. Lender may delay or forgo enforcing any of its rights or remediesunder this Note without losing them. Each Borrower understands and agrees that,with or without notice to Borrower, Lender may with respect to any otherBorrower (a) make one or more additional secured or unsecured loans orotherwise extend additional credit; (b) alter, compromise, renew, extend,accelerate, or otherwise change one or more times the time for payment or otherterms of any indebtedness, including increases and decreases of the rate ofinterest on the indebtedness; (c) exchange, enforce, waive, subordinate, failor decide not to perfect, and release any security, with or without thesubstitution of new collateral; (d) apply such security and direct the order ormanner of sale thereof, including without limitation, any non-judicial salepermitted by the terms of the controlling security agreements, as Lender in itsdiscretion may determine; (e) release, substitute, agree not to sue, or dealwith any one or more of Borrower’s sureties, endorsers, or other guarantors onany terms or in any manner Lender may choose; and (f) determine how, when andwhat application of payments and credits shall be made on any otherindebtedness owing by such other Borrower. Borrower and any other person whosigns, guarantees or endorses this Note, to the extent allowed by law, waivepresentment, demand for payment, and notice of dishonor. Upon any change in theterms of this Note, and unless otherwise expressly stated in writing, no partywho signs this Note, whether as maker, guarantor, accommodation maker orendorser, shall be released from liability. All such parties agree that Lendermay renew or extend (repeatedly and for any length of time) this loan orrelease any party or guarantor or collateral; or impair, fail to realize uponor perfect Lender’s security interest in the collateral; and take any otheraction deemed necessary by Lender without the consent of or notice to anyone.All such parties also agree that Lender may modify this loan without theconsent of or notice to anyone other than the party with whom the modificationis made. The obligations under this Note are joint and several.

 

SECTION DISCLOSURE. This loanis made under Minnesota Statutes, Section 48.1 95.

 

PRIOR TO SIGNING THIS NOTE,EACH BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE INCLUDING THEVARIABLE INTEREST RATE PROVISIONS. EACH BORROWER AGREES TO THE TERMS OF THENOTE.  BORROWER ACKNOWLEDGES RECEIPT OF ACOMPLETE COPY OF THIS PROMISSORY NOTE.

 

 

 

BORROWER:

 

 

NORTHMETRO HARNESS INITIATIVE, LLC

 
| By:    |                                  |
|--------|---------------------------------------|
|   | JAMES  B. DRUCK, PRESIDENT/MANAGER OF |
|   | NORTH  METRO HARNESS INITIATIVE, LLC  |

 

 

SOUTHWESTCASINO AND HOTEL CORP.

 
| By:    |                                            |
|--------|-------------------------------------------------|
|   | THOMAS  E. FOX, Chief Fin. Officer of SOUTHWEST |
|   | CASINO  AND HOTEL CORP.                         |

 

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