Exhibit 10.48

PROMISSORY NOTE SECURED BY DEED OF TRUST

$2,200,000.00

 

____________, California

 

 

August 13, 2001

              1.           FOR VALUE RECEIVED, FRESH CHOICE, INC., a Delaware
corporation, ("Borrower"), promises to pay to the order of MID-PENINSULA BANK, a
California banking corporation ("Bank"), c/o Greater Bay Bancorp, 2860 West
Bayshore Boulevard, Palo Alto, CA 94303, or at such other place as Bank may from
time to time designate in writing, the principal sum of Two Million Two Hundred
Thousand and No/100ths Dollars ($2,200,000.00) (the "Maximum Loan Amount"), or
so much of that sum as may be advanced under this Promissory Note Secured by
Deed of Trust ("Note"), plus interest as specified in this Note from the date of
disbursement.  This Note evidences a loan ("Loan") from Bank to Borrower.

              2.           (a) The principal sum outstanding from time to time
shall bear interest at the Note Rate, as defined below, and such interest shall
be calculated at a daily rate of 1/360ths of one (1) year's interest at the Note
Rate times the number of days that principal is outstanding.  The "Note Rate"
shall be equal to five eighths of one percentage point (0.625%) per annum in
excess of the Prime Rate in effect from time to time.  The "Prime Rate" shall be
equal to the Wall Street Journal Prime Rate as quoted daily in the money and
investing section of the Western Edition of the Wall Street Journal.

                            (b) The Note Rate shall be subject to adjustment for
any increase or decrease in the Prime Rate effective as of the date of each such
change.  Should the Wall Street Journal Prime Rate no longer exist, the Prime
Rate shall be deemed to be the average prime interest rate for each calendar
month (as of the first day of each such calendar month) of the three largest
(total assets) banking institutions in the continental United States then
determining such prime interest rate.

              3.           Principal and interest shall be payable as follows:

                            (a)         Interest only shall be payable on
September 2, 2001.

                            (b)         Commencing on the second day of October,
2001, and continuing on the second day of each calendar month thereafter for
eighty-two (82) additional months, monthly installments of principal and
interest shall be due and payable. Initially, the amount of the monthly
principal and interest installment shall be equal to the amount which would be
payable in order to fully amortize the outstanding principal balance hereof as
of September 2, 2001  based upon the Note Rate in effect as of September 2, 2001
and a fifteen (15) year amortization period. Thereafter, the monthly principal
and interest installments shall, at the sole option of Bank,  be subject to
adjustment in response to any changes in the Note Rate to an amount which would
be payable in order to fully amortize the then outstanding principal balance
hereof  based upon the revised Note Rate then in effect and an amortization
period of fifteen (15) years less the number of months elapsed since  September
2, 2001, such change in the monthly installment payments of principal and
interest to take effect on the first day of the first calendar month following
such change in the Note Rate.

                            (c)         All unpaid principal and interest shall
be due and payable in full on September 2, 2008 (the “Maturity Date”), or the
accelerated maturity date, whichever shall first occur.

              4.           Upon the execution hereof, Borrower shall pay to Bank
in addition to its obligation to pay interest on the indebtedness evidenced
hereby, a loan fee in the amount of Sixteen Thousand Five Hundred and 00/100ths
Dollars ($16,500.00).

              5.           The principal sum of this Note and all accrued and
unpaid interest thereon may be prepaid in whole or in part, at any time without
penalty or premium.

              6.           Borrower recognizes that default by Borrower in
making the payments herein and in the Deed of Trust, as defined below, agreed to
be paid when due will result in Bank incurring additional expense in servicing
the Loan, in loss to Bank of the use of the money due and in frustration to Bank
in meeting its loan commitments.  Borrower agrees that, if for any reason
Borrower fails to pay when due any payment due under this Note, any amount
advanced by Bank under the Deed of Trust or the amount due on the Maturity Date
or the accelerated maturity date, as applicable, Bank shall be entitled to
damages for the detriment caused thereby, but that it is extremely difficult and
impractical to ascertain the extent of such damages.

                            Borrower therefore agrees that a reasonable estimate
of such damages to Bank is as follows:

                            6.1         In the event Borrower fails to pay any
installment payment of interest and principal within ten (10) days after the
same is due then Borrower shall pay to Bank an amount equal to five percent (5%)
of each such delinquent installment payment of interest and principal ("Late
Charge").

                            6.2         In the event Borrower fails to reimburse
Bank for any amount advanced by or for the account of Bank which is due
hereunder or under the Deed of Trust within ten (10) days after such advance is
made by Bank to Borrower, then such unreimbursed amount shall thereafter bear
interest at the Default Rate, as hereinafter defined, until paid ("Default
Interest").  The term "Default Rate" shall be defined as an interest rate equal
to three percent (3%) above the Note Rate in effect from time to time, such
interest to be compounded annually.

                            6.3         In the event the payment of principal
and accrued but unpaid interest due on the Maturity Date or the accelerated
maturity date, as applicable, is not made in full when due, then said unpaid
amounts shall thereafter bear interest at the Default Rate, until paid, such
interest to be compounded annually.

              7.           This Note is secured by a Deed of Trust, Financing
Statement, Security Agreement and Fixture Filing (with Assignment of Rents and
Leases) of even date herewith ("Deed of Trust"), granted in favor of Bank as
beneficiary, and by other collateral.  This Note and the Deed of Trust are two
of several loan documents executed by Borrower of even date herewith in
connection with the Loan (collectively, the "Loan Documents").  Some or all of
the Loan Documents contain provisions for the acceleration of the maturity of
this Note.

              8.           If any of the payments required by the terms hereof
shall not be paid within ten (10) days of the date when the same becomes due, or
if the payment due on the Maturity Date is not paid when due, whether by
acceleration or otherwise, or upon the occurrence of an "Event of Default" under
and as defined in the Deed of Trust which remains uncured or has not been waived
upon the expiration of all applicable cure periods, then, or at any time
thereafter, the whole of the unpaid principal and interest owing on this Note
shall, at the option of Bank and without notice, become immediately due and
payable.  This option may be exercised at any time after any such event and the
acceptance of one or more installments or other payments from any person
thereafter shall not constitute a waiver of Bank’s option.  Bank’s failure to
exercise said option in connection with any particular event or series of events
shall not be construed as a waiver of the provisions hereof as regards any
subsequent event.

              2.           All amounts payable under this Note are payable in
lawful money of the United States.  Checks constitute payment only when
collected.  Each payment is to be applied when received first to the payment of
any Late Charge, as defined herein, then due, next to any unreimbursed sums
previously advanced by Bank under the Deed of Trust, with interest thereon at
the Default Rate, next to accrued but unpaid interest and any balance shall be
used to reduce the principal balance of this Note.

              3.           (i) If after default this Note be placed in the hands
of an attorney or attorneys for collection (ii) if after a default hereunder or
after an Event of Default under and as defined in the Deed of Trust or under any
document referred to therein, Bank finds it necessary or desirable to secure the
services or advice of one or more attorneys with regard to collection of this
Note against Borrower, any guarantor or any other party liable therefor or for
the protection of its rights under this Note, the Deed of Trust or other
security for this Note, or (iii) if Bank seeks to have the real property
described in the Deed of Trust abandoned by or reclaimed from any estate in
bankruptcy, or attempts to have any stay or injunction prohibiting the
enforcement or collection of this Note, prohibiting the foreclosure of the Deed
of Trust or prohibiting the enforcement of the Deed of Trust or any other
agreement evidencing or securing this Note lifted by any bankruptcy or other
court, Bank shall be entitled to reasonable attorneys’ fees and all related
costs incurred in connection with such proceedings (including, but not limited
to, all such attorneys’ fees and costs incurred in any appellate proceedings
and/or in the enforcement of any judgment or award rendered in any such
proceeding).

              4.           If Bank shall be made a party to or shall intervene
in any action or proceeding, whether in court or before any governmental agency,
affecting the real property described in the Deed of Trust, or the title thereto
or the interest of Bank under the Deed of Trust, including without limitation
any form of condemnation or eminent domain proceeding, Bank shall be reimbursed
by Borrower immediately upon demand for all costs, charges, and attorneys’ fees
incurred by Bank in any such case, and the same shall be secured by the Deed of
Trust as a further charge and lien upon the real property described in the Deed
of Trust.

              5.           The acceptance by Bank of any payments under this
Note after the date that such payment is due shall not constitute a waiver of
the rights to require prompt payment when due of future or succeeding payments
or to declare a default as herein provided for any failure to so pay.  The
acceptance by Bank of the payment of a portion of any installment at any time
that such installment is in its entirety due and payable shall not cure such
default and shall not constitute a waiver of Bank’s rights to require full
payment when due of all future or succeeding installments.

              6.           This Note is governed by the laws of the State of
California.

              7.           Borrower shall have no right to assign its rights
hereunder or to transfer all or any portion of or any interest in the real
property described in the Deed of Trust, except as may be permitted under the
terms of the Deed of Trust.

              8.           If Bank delays in exercising or fails to exercise any
of its rights under this Note, that delay or failure will not constitute a
waiver of any of Bank’s rights or of any breach, default, or failure of
condition under this Note.  No waiver by Bank of any of its rights or of any
breach, default or failure of a condition under this Note shall be effective
unless it is stated in writing signed by Bank.  All of Bank’s remedies in
connection with this Note or under applicable law shall be cumulative, and
Bank’s exercise of any one or more of those remedies will not constitute an
election of remedies.  Time is expressly made of the essence with respect to
every provision hereof.

              9.           Borrower understands that Bank may transfer this
Note, or sell or grant participations in some or all of Borrower’s indebtedness
outstanding under this Note.  In connection with any such transaction, Bank may
disclose to each prospective and actual transferee, purchaser or participant all
documents and information relating to the Loan.

              16          Borrower and all sureties, endorsers and guarantors of
all or any portion of the indebtedness evidenced by this Note waive demand,
notice, diligence, protest, presentment for payment, and notice of extension,
dishonor, protest, demand and nonpayment of this Note.

              17.         In addition to a foreclosure action under the Deed of
Trust, any action brought to enforce this Note may be commenced and maintained,
at Bank’s option, in any state or federal district court in California, or in
any other court having personal jurisdiction over Borrower or any guarantor. 
Borrower irrevocably consents to jurisdiction and venue in such court for such
purposes and agrees not to seek transfer or removal of any action commenced in
accordance with the terms of this section.  Borrower also waives the right to
protest the domestication or collection of any judgment obtained against
Borrower with respect to this Note or the loan evidenced hereby in any
jurisdiction where Borrower may now or hereafter maintain assets.

              18.         Concurrently herewith, Bank is making a revolving line
of credit loan to Borrower in the maximum principal amount of $2,000,000.00. 
Any Event of Default under the promissory note, any extension or renewal
thereof, or any other document evidencing or securing the said revolving line of
credit loan shall constitute a default hereunder and an “Event of Default” under
the Deed of Trust.

 

 

BORROWER: 

 

 

 

FRESH CHOICE, INC., a

 

Delaware corporation 

 

 

 

 

By:

/S/ David E. Pertl 

 

 

 

 

Its:

Senior Vice President and CFO