**Exhibit 10.2**

 

**TERM NOTE**

 

| $750,000.00 |   | Minneapolis, Minnesota |
|-------------|--------|------------------------|
|        |   | August 28, 2003        |

 

FORVALUE RECEIVED, the undersigned GRANITE CITY FOOD & BREWERY LTD., aMinnesota corporation (the “Borrower”) hereby promises to pay to the order ofFIRST NATIONAL BANK, a national banking association (the “Bank”) at its officeat 125 West Sioux, Pierre, South Dakota, the principal sum of Seven HundredFifty Thousand and no/100 Dollars ($750,000.00), in lawful money of the UnitedStates of America and in immediately available funds, and to pay interest(calculated on the basis of actual days elapsed and a three hundred sixty (360)day year) on said principal sum, or the unpaid balance thereof, in like moneyat said office at a fixed rate per annum equal to 6.125%.  Commencing on August 28, 2006, and oneach following three year anniversary of this Note, the fixed rate of interesthereunder may increase or decrease and shall equal the greater of (a) 5.5% or(b) the Prime Rate published in the Money Rates Section of *The Wall Street Journal* which is publishedon such anniversary date or, if such anniversary date is not a business day, onthe immediately preceding business day, plus 2.0%.  The interest rate due under this Note may be above or below therate the Bank lends to other parties.

 

OnSeptember 1, 2003, the Borrower shall pay all accrued interest on theoutstanding balance.  On October 1,2003, and thereafter on the first day of each succeeding month through andincluding August 27, 2010, the Borrower promises to pay equal principaland interest installments so that each monthly payment, when taken with allother monthly payments, shall be sufficient to fully amortize and repay theprincipal amount of this Note over a 7-year term, and each monthly payment alsoshall be sufficient to pay interest on the outstanding principal amount at theapplicable interest rate.  Any and allremaining principal and accrued interest shall be paid on August 27, 2010.  All payments shall be first applied toaccrued interest and then to principal.

 

TheBorrower may, upon notice to the Bank, prepay this Note in whole or in partwith accrued interest to the date of such prepayment on the amount prepaidtogether with a one percent (1%)

 

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prepaymentfee based on the outstanding unpaid balance of the Note at the time of theprepayment, unless waived by the Bank, at its option.

 

Inaddition to all of the other sums payable hereunder, the Borrower also agreesto pay to the holder hereof on demand all costs and expenses (includingreasonable attorneys’ fees) which may be incurred in the enforcement of anyliability of the Borrower hereunder.  Ifany payment on this Note becomes due and payable on a Saturday, Sunday, orbusiness holiday in the State of Minnesota, the maturity date thereof shall beextended to the next succeeding business day.

 

ThisNote is delivered pursuant to and entitled to the benefits of the LoanAgreement dated August 28, 2003, between Borrower and Bank (the “LoanAgreement”).  The Loan Agreement, amongother things, contains provisions for acceleration of the maturity of this Noteupon the occurrence of an Event of Default under the Loan Agreement.

 

ThisNote is secured by a security agreement, an assignment of leases and rents, anda guaranty, all dated on or after August 28, 2003.  All such documents, together with any other documents deliveredpursuant to the Loan Agreement, are referred to hereafter as the “LoanDocuments.”

 

Ifany installment or payment hereunder is not paid within 10 days after the duedate thereof, the Borrower agrees to pay a late payment charge of 5% of theinstallment or payment to cover the expenses of collection.

 

ThisNote shall be governed by the internal laws of the State of Minnesota.  THE BORROWER HEREBY CONSENTS TO THEEXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT SITUATED IN ORENCOMPASSING HENNEPIN COUNTY, MINNESOTA, AND WAIVES ANY OBJECTIONS BASED ON FORUMNON CONVENIENS WITH REGARD TO ANY ACTIONS, CLAIMS, DISPUTES OR PROCEEDINGSRELATING TO THIS NOTE, ANY LOAN DOCUMENT, OR ANY TRANSACTIONS ARISINGTHEREFROM, OR ENFORCEMENT AND/OR INTERPRETATION OF ANY OF THE FOREGOING.  Nothing herein shall affect the Bank’s rightto serve process in any manner permitted by law, or limit the Bank’s right tobring proceedings against the Borrower in the competent courts of any otherjurisdiction or jurisdictions.

 

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**THE BORROWER AND THE BANK HEREBY JOINTLY AND SEVERALLYWAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING RELATINGTO THIS NOTE, THE LOAN AGREEMENT, ANY OF THE OTHER LOAN DOCUMENTS, OR ANYTRANSACTION ARISING HEREFROM OR CONNECTED HERETO.  THE BORROWER AND THE BANK EACH REPRESENTS TO THE OTHER THAT THISWAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY GIVEN.**

 

 
|   | GRANITE  CITY FOOD & BREWERY LTD. |
|--------|---------------------------------------|
|   |                                  |   |
|   |                                  |   |
|   | By                                    | /s/  Steven J. Wagenheim |   |
|   |                                  | Steven  J. Wagenheim |
|   |                                  | Its:  President |

 

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