Prepared by MERRILL CORPORATION









Exhibit

10.52




 




PROMISSORY NOTE




 




 




	

  Borrower:


  	

   


  	

  Fresh Choice, Inc.


  	

  Lender:


  	

  Mid-Peninsula Bank


  
	

   


  	

   


  	

  485 Cochrane Circle


  	

   


  	

  420 Cowper Street


  
	

   


  	

   


  	

  Morgan Hill, CA 95037


  	

   


  	

  Palo Alto, CA  94301


  
	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  












	

  Principal Amount: 

  $2,000,000.00


  	

   


  	

  Initial Rate:  6.00%


  	

   


  	

  Date of Note: 

  October 5, 2001


  
	

   


  	

   


  	

   


  	

   


  	

   


  








PROMISE TO PAY. Fresh Choice, Inc. ("Borrower"),

promises to pay to Mid-Peninsula Bank, a California corporation

("Lender"), or order, in lawful money of the United States of

America, the principal amount of Two Million Dollars ($2,000,000.00) or so much

as may be outstanding, together with interest on the unpaid outstanding

principal balance of each advance. 

Interest shall be calculated from the date of each advance until

repayment of each advance.  This Note is

the Note as defined in the Revolving Loan Agreement, dated as of October 5,

2001, between Borrower and Lender (“Loan Agreement”).  Capitalized terms used but not defined herein are defined in such

Revolving Loan Agreement.




 




PAYMENT:  Borrower will pay this loan in one payment

of all outstanding principal plus all accrued unpaid interest on October 5,

2002.  In addition, Borrower will pay

regular monthly payments of accrued unpaid interest beginning November 1, 2001,

and all subsequent interest payments are due on the same day

of each month after that. 

The annual interest rate for this Note is computed on a 365/360 basis;

that is, by applying the ratio of the annual interest rate over a year of 360

days, multiplied by the outstanding principal balance, multiplied by the actual

number of days the principal balance is outstanding.  Borrower will pay Lender at Lender’s address shown above or at

such other place as Lender may designate in writing.  Unless otherwise agreed or required by applicable law, payments

will be applied first to accrued unpaid interest, then to principal, and any

remaining amount to any unpaid collection costs and late charges.




 




VARIABLE

INTEREST RATE.  The

interest rate on this Note is subject to change from time to time based on

changes in an independent index which is the "Prime Rate" as

published in the Western Edition of the Wall Street Journal (the

"Index"). The Index is not necessarily the lowest rate charged by

Lender on its loans. If the Index becomes unavailable during the term of this

loan, Lender may designate a substitute index after notice to Borrower. Lender

will tell Borrower the current Index rate upon Borrower's request. Borrower

understands that Lender may make loans based on other rates as well. The

interest rate change will not occur more often than once each day. The Index

currently is 5.5%. The Interest rate to be applied to the unpaid principal

balance of this Note will be at a rate of 0.500 percentage points over the

Index, resulting in an initial rate of 6.00%.  NOTICE: Under no circumstances will the

interest rate on this Note be more than the maximum rate allowed by applicable

law, if any.




 




PREPAYMENT.  Borrower agrees that all loan fees and other

prepaid finance charges are earned fully as of the date of the loan and will

not be subject to refund upon early payment (whether voluntary or as a result

of default), except as otherwise required by law. Except for the foregoing,

Borrower may pay without penalty all or a portion of the amount owed earlier

than it is due.




 




LATE

CHARGE.  If a payment

is 10 days or more late, Borrower will be charged 5.000% of the unpaid portion

of the regularly scheduled payment.




 




DEFAULT.  Borrower will be in default (“Event of

Default”) if any of the following happens: (a) Borrower fails to make any payment

when due, and such failure continues uncured for five days (b) An Event of

Default occurs under the Loan Agreement.





LENDER'S

RIGHTS.  Upon the

occurrence of an Event of Default, Lender may, so long as such Event of Default

has not been waived, declare the entire unpaid principal balance on this Note

and all accrued unpaid interest immediately due, without notice, and then

Borrower will pay that amount. Upon Borrower's failure to pay all amounts

declared due pursuant to this section, including failure to pay upon final

maturity, Lender, at its option, may also, if permitted under applicable law,

increase the variable interest rate on this Note to 2.500 percentage points

over the Index. Borrower shall also pay all attorneys fees and expenses as

required under the terms of the Loan Agreement. This Note has been delivered to

Lender and accepted by Lender in the State of California. If there is a

lawsuit, Borrower agrees upon Lender's request to submit to the jurisdiction of

the state or federal courts located in Santa Clara County or San Francisco

County in the State of California. This Note shall be governed by and construed

in accordance with the laws of the State of California.




 




COLLATERAL.

This Note is secured by the collateral as described in that

certain Pledge Agreement dated October 5, 2001.




 




LINE

OF CREDIT.  This Note

evidences a revolving line of credit. 

Advances under this Note, as well as directions for payment from

Borrower's accounts, may be requested orally or in writing by Borrower or by an

authorized person.  Lender may, but need

not, require that all oral requests be confirmed in writing. All

communications, instructions, or directions by telephone or otherwise to Lender

are to be directed to Lender's office shown above.  The following party or parties are authorized to request advances

under the line of credit until Lender receives from Borrower at Lender's

address shown above written notice of revocation of their authority: David E.

Pertl, Sr. Vice President and CFO; and Everett F. Jefferson, CEO and Director.  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

principal balance owing on this Note at any time may be evidenced by

endorsements on this Note or by Lender's internal records, including daily

computer print-outs. Lender will have no obligation to advance funds under this

Note while an Event of Default exists under the terms of this Note or the Loan

Agreement.




 




GENERAL

PROVISIONS.  Lender

may delay or forgo enforcing any of its rights or remedies under this Note

without losing them. Borrower and any other person who signs, guarantees or

endorses this Note, to the extent allowed by law, waive any applicable statute

of limitations, presentment, demand for payment, protest 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 released from liability.

All such parties agree that Lender may renew or extend (repeatedly and for any

length of time) this loan, or release any party or guarantor or collateral; or

impair, fail to realize upon or perfect Lender's security interest in the

collateral; and take any other action deemed necessary by Lender without the

consent of or notice to anyone.




 











REVOLVING

LOAN AGREEMENT. In addition to the terms and conditions

contained in this Note it is to be




further subject to the terms and conditions contained

in the Loan Agreement.




 




PRIOR TO SIGNING THIS NOTE, BORROWER READ AND

UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE, INCLUDING THE VARIABLE INTEREST

RATE PROVISIONS. BORROWER AGREES TO THE TERMS OF THE NOTE AND ACKNOWLEDGES

RECEIPT OF A COMPLETED COPY OF THE NOTE.




 




BORROWER:




 




FRESH CHOICE, INC., a




Delaware corporation




 




 




	

  By: /S/ David E.

  Pertl


  
	

  Name: David E. Pertl


  
	

  Title: Senior Vice

  President and CFO