**Exhibit 10.2**

 

**PROMISSORYNOTE**

 
| **Principal**                                                                                                                                                                                                                                   |                                                                                                                                         | **Loan Date** |           | **Maturity**                                                                                |           | **Loan No** |      | **Call/Coll** |     | **Account** |   | **Officer** |   | **Initials** |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------|---------------|----------------|---------------------------------------------------------------------------------------------|----------------|-------------|-----------|---------------|----------|-------------|--------|-------------|--------|--------------|
| **$**                                                                                                                                                                                                                                           | **750,000.00**                                                                                                                               |          | **04-14-2004** |                                                                                        | **09-01-2004** |        | **76601** |          | **0026** |        |   |        | **CD** |         |   |
|                                                                                                                                                                                                                                            |                                                                                                                                         |          |           |                                                                                        |           |        |      |          |     |        |   |        |   |         |
| 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:**                                                                                                                                                                                                                                   | **Granite  City Food & Brewery Ltd.,  a Minnesota Corporation  (TIN: 41-1883639)  5831 CEDAR LAKE ROAD  ST. LOUIS PARK, MN  55416** |          | **Lender:**    | **First  National Bank  Pierre  125 W. Sioux Avenue  P.O. Box 730  Pierre, SD  57501** |
|                                                                                                                                                                                                                                                 |                                                                                                                                              |               |                |                                                                                             |                |             |           |               |          |             |        |             |        |              |  |  |  |  |  |

 
| **Principal Amount:  $750,000.00** |   | **Interest  Rate:  6.750%** |   | **Date of Note:  April 14, 2004** |
|-----------------------------------------|--------|----------------------------------|--------|---------------------------------------------|

 

**PROMISE TO PAY.  Granite City Food & Brewery Ltd., aMinnesota Corporation (“Borrower”) promises to pay to First National Bank(“Lender”), or order, in lawful money of the United States of America, theprincipal amount of Seven Hundred Fifty Thousand & 00/100 Dollars($750,000.00) or so much as may be outstanding, together with interest at therate of 6.750% per annum on the unpaid outstanding principal balance of eachadvance.  Interest shall be calculatedfrom the date of each advance until repayment of each advance.**

 

**PAYMENT.  Borrower will pay this loan on demand.  Payment in full is due immediately upon Lender’s demand.  If no demand is made, Borrower will pay thisloan in one payment of all outstanding principal plus all accrued unpaidinterest on September 1, 2004. Unless otherwise agreed or required by applicable law, payments will beapplied first to any accrued unpaid interest; then to principal; then to anyunpaid collection costs; and then to any late charges.  The annual interest rate for this Note iscomputed 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 Lenderat Lender’s address shown above or at such other place as Lender may designatein writing.**

 

**PREPAYMENT; MINIMUM INTEREST CHARGE.** Borrower agrees that all loan fees and other prepaid finance charges areearned fully as of the date of the loan and will not be subject to refund uponearly payment (whether voluntary or as a result of default), except asotherwise required by law.  In anyevent, even upon full prepayment of this Note, Borrower understands that Lenderis entitled to a **minimum interest charge of $75.00**.  Other than Borrower’s obligation to pay any minimum interestcharge, Borrower may pay without penalty all or a portion of the amount owedearlier than it is due.  Early paymentswill not, unless agreed to by Lender in writing, relieve Borrower of Borrower’sobligation to continue to make payments. Rather, early payments will reduce the principal balance due.  Borrower agrees not to send Lender paymentsmarked “paid in full”, “without recourse”, or similar language.  If Borrower sends such a payment, Lender mayaccept it without losing any of Lender’s rights under this Note, and Borrowerwill remain obligated to pay any further amount owed to Lender.  All written communications concerningdisputed amounts, including any check or other payment instrument thatindicates that the payment constitutes “payment in full” of the amount owed orthat is tendered with other conditions or limitations or as full satisfactionof a disputed amount must be mailed or delivered to: First National Bank,Pierre, 125 W Sioux Avenue, P.O. Box 730, Pierre, SD 57501.

 

**LATE CHARGE.** If a payment is 10 days or more late, Borrower will be charged **5.000% ofthe regularly scheduled payment or $10.00, whichever is greater**.

 

**INTEREST AFTER DEFAULT.** Upon default, including failure to pay upon final maturity, the totalsum due under this Note will bear interest from the date of acceleration ormaturity at the interest rate on this Note. The interest rate will not exceed the maximum rate permitted byapplicable law.

 

**DEFAULT.** Each of the following shall constitute an event of default (“Event ofDefault”) 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 documentsor to comply with or to perform any term, obligation, covenant or conditioncontained in any other agreement between Lender and Borrower.

 

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**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, infavor of any other creditor or person that may materially affect any ofBorrower’s property or Borrower’s ability to repay this Note or performBorrower’s obligations under this Note or any of the related documents.

 

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

 

**Insolvency.** The dissolution or termination of Borrower’s existence as a goingbusiness, the insolvency of Borrower, the appointment of a receiver for anypart of Borrower’s property, any assignment for the benefit of creditors, anytype 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 or forfeiture proceedings, whether byjudicial proceeding, self-help, repossession or any other method, by anycreditor of Borrower or by any governmental agency against any collateral securingthe loan.  This includes a garnishmentof any of Borrower’s accounts, including deposit accounts, with Lender.  However, this Event of Default shall notapply if there is a good faith dispute by Borrower as to the validity orreasonableness of the claim which is the basis of the creditor or forfeitureproceeding and if Borrower gives Lender written notice of the creditor orforfeiture proceeding and deposits with Lender monies or a surety bond for thecreditor or forfeiture proceeding, in an amount determined by Lender, in itssole 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 of anyof the indebtedness or any Guarantor dies or becomes incompetent, or revokes ordisputes the validity of, or liability under, any guaranty of the indebtednessevidenced by this Note.  In the event ofa death, Lender, at its option, may, but shall not be required to, permit theGuarantor’s estate to assume unconditionally the obligations arising under theguaranty in a manner satisfactory to Lender, and, in doing so, cure any Eventof Default.

 

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

 

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

 

**Insecurity.** Lender in good faith believes itself insecure.

 

**Cure Provisions.** If any default, other than a default in payment is curable and ifBorrower has not been given a notice of a breach of the same provision of thisNote within the preceding twelve (12) months, it may be cured if Borrower,after receiving written notice from Lender demanding cure of such default: (1)cures the default within ten (10) days; or (2) if the cure requires more thanten (10) days, immediately initiates steps which Lender deems in Lender’s solediscretion to be sufficient to cure the default and thereafter continues andcompletes all reasonable and necessary steps sufficient to produce complianceas soon as reasonably practical.

 

**LENDER’S RIGHTS.** 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 willpay Lender that amount.  This includes,subject to any limits under applicable law, Lender’s attorney’s fees andLender’s legal expenses, whether or not there is a lawsuit, includingattorneys’ fees, expenses for bankruptcy proceedings (including efforts tomodify 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 providedby law.

 

**JURY WAIVER.  Lender and Borrower hereby waive the rightto any jury trial in any action, proceeding, or counterclaim brought by eitherLender or Borrower against the other.**

 

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**GOVERNING LAW.  This Note will be governed by, construed andenforced in accordance with federal law and the laws of the State of SouthDakota.  This Note has been accepted by Lenderin the State of South Dakota.**

 

**DISHONORED ITEM FEE.** Borrower will pay a fee to Lender of $27.00 if Borrower makes a paymenton Borrower’s loan and the check or preauthorized charge with which Borrowerpays is later dishonored.

 

**RIGHT OF SETOFF.** To the extent permitted by applicable law, Lender reserves a right ofsetoff in all Borrower’s accounts with Lender (whether checking, savings, orsome other account).  This includes allaccounts Borrower holds jointly with someone else and all accounts Borrower mayopen in the future.  However, this doesnot include any IRA or Keogh accounts, or any trust accounts for which setoffwould be prohibited by law.  Borrowerauthorizes Lender, to the extent permitted by applicable law, to charge orsetoff all sums owing on the indebtedness against any and all such accounts,and, at Lender’s option, to administratively freeze all such accounts to allowLender to protect Lender’s charge and setoff rights provided in this paragraph.

 

**COLLATERAL.** Borrower acknowledges this Note is secured by a Commercial SecurityAgreement from Borrower to Lender dated April 14, 2004 and any and allother security agreement executed by borrower to lender regardless of purposeor date.  This loan shall becross-collateralized with all other loans outstanding.

 

**LINE OF CREDIT.** This Note evidences a revolving line of credit.  Advances under this Note may be requestedeither orally or in writing by Borrower or as provided in this paragraph.  All oral requests shall be confirmed inwriting on the day of the request, on forms acceptable to Lender.  All communications, instructions, ordirections by telephone or otherwise to Lender are to be directed to Lender’soffice shown above.  The followingpersons currently are authorized, except as provided in this paragraph, torequest advances and authorize payments under the line of credit until Lenderreceives from Borrower, at Lender’s address shown above, written notice ofrevocation of their authority:  **Steven J.WAGENHEIM, President of Granite City Food & Brewery Ltd., a MinnesotaCorporation; and Monica Underwood, Agent. Advances to be done based upon bank approved borrowing base certicateonly. **Borrower agrees to beliable for all sums either: (A) advanced in accordance with the instructions ofan authorized person or (B) credited to any of Borrower’s accounts withLender.  The unpaid principal balanceowing on this Note at any time may be evidenced by endorsements on this Note orby Lender’s internal records, including daily computer print-outs.  Lender will have no obligation to advancefunds under this Note if: (A) Borrower or any guarantor is in default under theterms of this Note or any agreement that Borrower or any guarantor has withLender, including any agreement made in connection with the signing of thisNote; (B) Borrower or any guarantor ceases doing business or is insolvent; (C)any guarantor seeks, claims or otherwise attempts to limit, modify or revokesuch guarantor’s guarantee of this Note or any other loan with Lender; (D)Borrower has applied funds provided pursuant to this Note for purposes otherthan those authorized by Lender; or (E) Lender in good faith believes itselfinsecure.

 

**SUCCESSOR INTERESTS.** 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.

 

**NOTIFY US OF INACCURATE INFORMATIONWE REPORT TO CONSUMER REPORTING AGENCIES.**  Please notifyus if we report any inaccurate information about your account(s) to a consumerreporting agency.  Your written noticedescribing the specific inaccuracy(ies) should be sent to us at the followingaddress: First National Bank 125 W. Sioux Ave. Pierre, SD 57501-2424

 

**GENERAL PROVISIONS. **This Note is payable on demand.  The inclusion of specific default provisionsor rights of Lender shall not preclude Lender’s right to declare payment ofthis Note on its demand.  Lender maydelay or forgo enforcing any of its rights or remedies under this Note withoutlosing them.  Borrower and any otherperson who signs, guarantees or endorses this Note, to the extent allowed bylaw, 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 releasedfrom liability.  All such parties agreethat Lender may renew or extend (repeatedly and for any length of time) thisloan or release any party or guarantor or collateral; or impair, fail torealize upon or perfect Lender’s security interest in the collateral; and takeany other action deemed necessary by Lender without the consent of or notice toanyone.  All such parties also agreethat Lender may modify this loan without the consent of or notice to anyoneother than the party with whom the modification is made.  The obligations under this Note are jointand several.

 

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**PRIOR TO SIGNING THIS NOTE, BORROWERREAD AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE.  BORROWER AGREES TO THE TERMS OF THE NOTE.**

 

**BORROWER ACKNOWLEDGES RECEIPT OF ACOMPLETED COPY OF THIS PROMISSORY NOTE.**

 
| **BORROWER:**                              |   |
|--------------------------------------------|--------|
|                                       |   |
| **GRANITE  CITY FOOD & BREWERY LTD.,** |   |
| **A  MINNESOTA CORPORATION**               |   |
|                                       |   |
| **By:**                                    |   |   |   |
|                                       |   | **Steven  J. WAGENHEIM, President of Granite City** |
|                                       |   | **Food  & Brewery Ltd., a Minnesota Corporation** |
|                                            |        |  |  |

 

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