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                                                                    EXHIBIT 10.2

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR OTHERWISE DISPOSED OF
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND
APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH LAWS.

                         HORSESHOE GAMING HOLDING CORP.

                       PROMISSORY NOTE DUE JANUARY 2, 2004

$5,616,140.00                                                    January 1, 2001
                                                              New York, New York

     FOR VALUE RECEIVED, HORSESHOE GAMING HOLDING CORP., a Delaware company (the
"Company"), subject to Section 3 hereof, promises to pay, on or before January
2, 2004 (the "Maturity Date"), to the order of Kathy Rose (the "Holder"), at the
Company's offices at 18454 South West Creek Drive, Tinley Park, Illinois 60477,
or in accordance with such other instructions as the Holder (or any other entity
entitled to payment hereunder) may hereafter designate from time to time in
writing, the principal sum of FIVE MILLION, SIX HUNDRED AND SIXTEEN THOUSAND,
ONE HUNDRED AND FORTY DOLLARS ($5,616,140.00)) in lawful money of the United
States, with interest on the unpaid principal amount from the date of this
Promissory Note (together with all supplements, amendments or modifications
hereto and replacements or renewals hereof, this "Note") to and including the
date of payment, calculated as provided below.

     1.   Purchase Agreement. This Note is issued pursuant to the terms and
conditions of a Purchase Agreement dated as of the date hereof (the "Purchase
Agreement"), between the Company and the Holder, as consideration for the
repurchase by the Company of the Holder's shares in the Company (the "Shares").

     2.   Interest. The Company promises to pay simple interest on the
outstanding principal amount of this Note at a rate equal to 9% per annum (the
"Interest Rate") from January 1, 2001 until the Maturity Date or the earlier
acceleration of this Note pursuant to Section 6 of this Note, when all accrued
interest shall be immediately due and payable. Interest shall be computed on the
basis of a 360-day year of twelve 30-day months. Subject to the terms of (a) the
Credit Agreement dated as of June 30, 1999 (the "Credit Agreement"), among the
Company, as Borrower, the lenders listed therein, DLJ Capital Funding, Inc., as
Syndication Agent, Canadian Imperial Bank of Commerce, as Administrative Agent
and Wells Fargo Bank, National Association, as Documentation Agent; (b) the
Indenture dated as of June 15, 1997 (the "9 3/8% Indenture"), as the same shall
have been amended to date, for Horseshoe Gaming, L.L.C. (the "LLC") 9 3/8%
Senior Subordinated Notes due 2007, among the LLC, Robinson Property Group,
Limited Partnership, New Gaming Capital Partnership, Horseshoe Entertainment,
Horseshoe GP, Inc.,

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Bossier City Land Corporation and Texas Trustee; (c) the Indenture dated as of
May 11, 1999 (the "8 5/8% Indenture"), for the Company's 8 5/8% Senior
Subordinated Notes due 2009 (the "Senior Subordinated Notes"), by and between
the Company and U.S. Trust Company, National Association (the documents
described in (a), (b) and (c) above being referred to as the "Financing
Documents"); and (d) the various agreements entered into prior to the date
hereof to repurchase the interests of various former employees and members of
the Company (collectively, the "Repurchase Agreements") which, among other
things, do not permit the Company to make principal payments on the repurchase
of the Shares prior to the repayment in full of amounts due under the Repurchase
Agreements, the Company shall pay accrued interest quarterly on March 31, June
30, September 30 and December 31 of each year, beginning on March 31, 2001. If
the Company does not pay in cash all interest due (for whatever reason,
including but not limited to, not being permitted to make interest payments
under the Financing Documents or the Repurchase Agreements), then the interest
shall accrue and be compounded at the Interest Rate until the earlier of the
date such interest is paid, the maturity date of this Note or the earlier
acceleration of this Note pursuant to Section 6 of this Note.

     3.   Payment of Principal.

               (1)  If the Company is not permitted under the terms of the
          Financing Documents or the Repurchase Agreements to pay the principal
          of this Note in full on the Maturity Date, then the payment of the
          portion of the principal on this Note which may not be paid may be
          delayed until such date as such principal payments are permitted under
          the terms of the Financing Documents and the Repurchase Agreements.
          However, the portion of this Note which may be paid on the Maturity
          Date shall be paid on the Maturity Date and the balance shall be paid
          promptly thereafter as permitted by the Financing Documents and the
          Repurchase Agreements.

               (2)  If the Company does not pay the principal of this Note in
          full on the Maturity Date (for whatever reason, including, but not
          limited to, not being permitted to make principal payments under the
          Financing Documents or the Repurchase Agreements), then the Company
          promises to pay, in cash, interest to the Holder on the unpaid portion
          of the principal and accrued interest at the rate of 12% per annum
          until all amounts due and owing are paid in full; the Company must,
          however, pay the principal and accrued interest of this Note in full
          no later than January 2, 2006.

     4.   Optional Prepayment. The Company, at its option, may prepay all or any
portion of this Note, at any time, by paying an amount equal to the outstanding
principal amount of this Note, or a portion thereof, together with interest
accrued and unpaid thereon to the date of prepayment and any other amounts due
under this Note, without penalty or premium.

     5.   Application of Payments. All mandatory payments under Section 3 of
this Note and all optional prepayments under Section 4 of this Note shall
include payment of accrued interest on the principal amount so paid or prepaid
and all other amounts due under this Note and shall be applied, first to all
reasonable costs, fees, and expenses incurred by the Holder in the exercise of
the Holder's rights hereunder, second to payment of other accrued interest, and
thereafter to principal.

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     6.   Acceleration. At the option of the Holder, this Note may accelerate
and the outstanding principal of and all accrued interest on this Note may
become immediately due and payable, if a Change in Control (as defined in the 8
5/8% Indenture) or an Event of Default (as defined in the 8 5/8% Indenture)
occurs, which Change of Control or Event of Default results in the acceleration
and repayment of all of the Senior Subordinated Notes.

     7.   Replacement Note. Upon receipt of evidence reasonably satisfactory to
the Company of the loss, theft, destruction or mutilation of this Note and of a
letter of indemnity reasonably satisfactory to the Company from the Holder and
upon reimbursement to the Company of all reasonable expenses incident thereto,
and upon surrender or cancellation of this Note, if mutilated, the Company will
make and deliver a new note of like tenor in lieu of such lost, stolen,
destroyed or mutilated note.

     8.   Pari Passu. This Note is pari passu with and equal in right of payment
with any and all existing and future bank debt and senior in right of payment to
any and all existing and future subordinated debt, including but not limited to
the Senior Subordinated Notes; the Holder acknowledges that bank debt is secured
debt and this Note is an unsecured obligation of the Company.

     9.   Amendment. Any amendment, supplement or modification of or to any
provision of this Note shall be effective only with the express written consent
of the Company and the Holder.

     10.  Covenants Bind Successors and Assigns. All the covenants,
stipulations, promises and agreements in this Note contained by or on behalf of
the Company or the Holder shall bind its successors and assigns, whether so
expressed or not.

     11.  Governing Law. This Note and the rights and obligations of the Company
and the Holder hereunder shall be governed by, and shall be construed and
enforced in accordance with, the internal laws of the State of New York
(including Section 5-1401 of the General Obligations Law of the State of New
York), without regard to conflicts of laws principles.

     12.  Variation in Pronouns. All pronouns and any variations thereof refer
to the masculine, feminine or neuter, singular or plural, as the context may
require.

     13.  Headings. The headings in this Note are for convenience of reference
only and shall not limit or otherwise affect the meaning hereof.

                                           HORSESHOE GAMING HOLDING CORP.

                                           By: /s/ Kirk Saylor
                                               --------------------------------
                                                   Kirk Saylor
                                                   Chief Financial Officer

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                                                                    Exhibit 10.1

                         SEVERANCE AGREEMENT AND RELEASE

        The employment of James O'Halloran (hereinafter "Mr. O'Halloran") with
N2H2, Inc. (hereinafter "N2H2") is being terminated. Mr. O'Halloran and N2H2
desire to settle and resolve all possible disputes between them growing out of
Mr. O'Halloran's employment or his separation with N2H2, and it is therefore
agreed as follows:

        1. CONFIDENTIALITY OF AGREEMENT; AGREEMENT NOT ADMISSION. Mr. O'Halloran
agrees to keep this Agreement confidential, except insofar as disclosure may be
required for legal or business reasons. This Agreement is not an admission by
N2H2 that it (or any of its Employees) has violated any law or failed to fulfill
any duty to Mr. O'Halloran.

        2. TERMINATION OF EMPLOYMENT. N2H2 and Mr. O'Halloran agree to
discontinue Mr. O'Halloran's employment relationship, effective February 13,
2001 ("Effective Date").

        3. SEVERANCE PAYMENTS. N2H2 agrees to pay Mr. O'Halloran severance equal
to twelve (12) months of Mr. O'Halloran's base compensation and bonus
("Severance Period"), subject to lawful deductions, payable in accordance with
N2H2's regular payroll practice. This severance is subject to the passage of
seven days after this Agreement and Release is signed by Mr. O'Halloran and
delivered to N2H2.

        4. VACATION. As part of the severance package and in return for Mr.
O'Halloran's release herein, N2H2 agrees to pay Mr. O'Halloran's accrued and
unused vacation through the Effective Date, subject to lawful deductions,
payable after the passage of seven days after this Agreement and Release is
signed by Mr. O'Halloran and delivered to N2H2.

        5. STOCK OPTION VESTING. In accordance with the Executive Employment
Agreement signed and dated on June 18, 1999, "Those unvested stock options which
are scheduled to vest between the date of termination and the end of the
Severance Period shall be deemed to vest immediately." The shares will be deemed
vested and become exercisable upon the Effective Date pursuant to the terms of
the individual Stock Option Agreements. Nothing in this paragraph is intended to
or does create any other rights or obligations of any kind on the part of N2H2
with regard to Mr. O'Halloran's stock option benefits, except those specifically
required by law.

        6. RELEASE. Mr. O'Halloran accepts N2H2's undertakings in this Agreement
as full settlement of any and all claims, known or unknown, arising out of or
related to Mr. O'Halloran's employment with N2H2, or its termination, including
but not limited to any claims of lost salary or other benefits, lost stock
options and specifically includes, but is not limited to, claims under the Age
Discrimination in Employment Act ("ADEA"). These claims are examples, not a
complete list, of the released claims, as it is the parties' intent that Mr.
O'Halloran release any and all claims, of whatever kind or nature, in exchange
for the severance arrangements set forth in

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paragraphs 3, 4 and 5 above. Mr. O'Halloran realizes this constitutes a full and
final settlement of any and all such claims, and except for obligations arising
under this Agreement, this settlement releases N2H2 and any related companies
(and their owners, officers, employees, and anyone else against whom Mr.
O'Halloran could assert a claim based on Mr. O'Halloran's experiences as an
employee of N2H2 or Mr. O'Halloran's termination as an employee) from any
further liability to Mr. O'Halloran (or to anyone else Mr. O'Halloran has power
to bind in this settlement) in connection with such claims.

        7. EFFECTIVENESS OF AGREEMENT. This Agreement (i) contains the entire
understanding of the parties with respect to the subject matter covered, except
for Mr. O'Halloran's Termination Obligations under his Executive Employment
Agreement entered into with N2H2 on June 18, 1999 (the "Employment Agreement")
and Mr. O'Halloran's obligations under his Employee Intellectual Property
Agreement entered into with N2H2 on June 18, 1999 (the "IP Agreement"); (ii)
supersedes all prior or contemporaneous understandings, except for Mr.
O'Halloran's Termination Obligations under his Employment Agreement and Mr.
O'Halloran's obligations under his IP Agreement; and (iii) may only be amended
in a written instrument signed by both parties.

        8. KNOWING AND VOLUNTARY WAIVER. Mr. O'Halloran acknowledges that Mr.
O'Halloran has been advised to consult with an attorney, and has had the
opportunity to do so, before signing this Agreement, which Mr. O'Halloran has
been given twenty-one (21) days to consider, and which Mr. O'Halloran may revoke
within seven (7) days after signing.

PLEASE READ CAREFULLY. THIS IS A VOLUNTARY AGREEMENT THAT INCLUDES A RELEASE OF
ALL KNOWN AND UNKNOWN CLAIMS.

15 Feb 2001                       /s/ JAMES O'HALLORAN
-----------                     -------------------------
Date                                James O'Halloran

                                    N2H2, INC.

    2/15/01                         By  /s/  J. PAUL QUINN
----------------                      ----------------------------
Date                                Printed Name:  J. Paul Quinn
                                                 -----------------
                                    Title:  CFO
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