Prepared by MERRILL CORPORATION









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