**Exhibit 10.43**

 
| Schlotzsky’s, Inc.

203 Colorado Street

Austin, TX  78701

 
**BORROWER’S  NAME AND ADDRESS**
“I” includes  each borrower above, jointly and |   | American Bank of  Commerce

522 Congress Ave.,  Suite 100
**Austin, TX   78701**
 
**LENDER’S  NAME AND ADDRESS**
“You” means the  lender, its successors and assigns |  

  | Loan Number   403409

Date  03/27/03

Maturity Date  06/25/03

Loan Amount  $ 150,000.00

Renewal Of                        

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For value received, Ipromised to pay to you, or your order, at your address listed above thePRINCIPAL sumof            One      

hundred fifty thousand&no/100                                                                                                       Dollars $  $150,000.00

ý  **Single Advance:**  I will receive all of this principal sum on  03/27/03. No additional advances are contemplated under this note.

o  **Multiple Advance:** The principal sum shownabove is the maximum amount of principal I can borrow under this note.On                                            Iwill receive the amount of$                                      andfuture principal advances are contemplated.

**Conditions:**  The conditions for future advances are                                                                                                                            

                                                                                                                                                                                                                  

o  **Open End Credit:** You and I agree that I mayborrow up to the maximum principal sum more than one time.  This feature is subject to all otherconditions and expires on                                                                      

o  **Closed End Credit: **You and I agree that I may borrow (subject to all otherconditions) up to the maximum principal sum only one time.

**INTEREST:** I agree to pay interest on theoutstanding principal balance from March 27, 2003 at the rate of 5.2000% peryear until June 25, 2003

o**Variable Rate:**This rate may change as stated below.

o**Index Rate:** The future rate will be                                             thefollowing index rate                                                         

o**Ceiling Rate:** The interest rate ceiling forthis note is the        ceiling rate announced bythe Credit Commissioner from time to time.

o**Frequency and Timing:**The rate on thisnote may change as often as                                                                                           

A change in the interestrate will take effect                                                                                                                                     

o  **Limitations:** During the term of this loan,the applicable annual interest rate will not be morethan                              %or less than                              %.  The rate may not change more than                                      %each                                               

**Effect of Variable Rate:**A change in the interest rate will have the following effect on the payments:

o The amount of each scheduled payment willchange.                 oThe amount of the final payment will change.

o                                                                                                                                                                                                             

**ACCRUAL METHOD:** Interest will be calculatedon a Actual/360 basis.

**POST MATURITY RATE:**I agree to pay intereston the unpaid balance of this note owing after maturity, and until paid infull, as stated below:

o  onthe same fixed or variable rate basis in effect before maturity (as indicatedabove).

ý at a rate equal to 24.000%

o**LATECHARGE:** If a payment is made more than             daysafter it is due, I agree to pay a late charge of                          .

ý**ADDITIONALCHARGES:** In addition to interest, I agree to pay the followingcharges which o are ýare not included in the

principal amountabove:   $25.00 NSF FEE FOR EACH PAYMENTRETURNED UNPAID.

**PAYMENTS: **I agree to pay this note as follows**:**

ý**Interest:**I agree to pay accrued interest      On Demand, But If No Demand Is Made Then;                                                             AtMaturity – June 25, 2003

ý**Principal:**I agree to pay the principal       OnDemand, But If No Demand is MadeThen;                                                                  

                                                                               At Maturity – June 25,2003                                                                                        

o  **Installments:** I agree to pay this note in            payments.  The first payment will be in the amount of$                          

and will be due                                                 .A payment of$                                              willbe due                                 

                                                                                                                       thereafter.  The final payment of the entire

unpaid balance ofprincipal and interest will be due 

**PURPOSE:** The purpose of this loan is Short term working capital

**ADDITIONAL TERMS:**

# **SECURITY**

**SECURITY INTEREST:**  I give you a security interest in all of theProperty described below that I own or have a sufficient rights in which totransfer an interest, now or in the future, wherever the Property is or will belocated, and all proceeds and products of the Property.  “Property” includes all parts, accessories,repairs, replacements, improvements, and accessions to the Property.  “Proceeds” includes anything acquired uponthe sale, lease, license, exchange, or other disposition of the Property; anyrights and claims arising from the Property; and any collections anddistributions on account of the Property.

o            **Accounts and Other Rights to Payment:** Allrights to payment, whether or not earned by performance, including, but notlimited to, payment for property or services sold, leased, rented, licensed, orassigned.  This includes any rights andinterests (including all liens) which I have by law or agreement against anyaccount debtor or obligor.

o            **Inventory:** All inventory held for ultimate sale or lease, or which has been or willbe supplied under contracts of service, or which are raw materials, work inprocess, or materials used or consumed in my business.

o            **Equipment:** All equipment including, but notlimited to, machinery, vehicles, furniture, fixtures, manufacturing equipment,farm machinery and equipment, shop equipment, office and record keepingequipment, parts and tools.  TheProperty includes any equipment described in a list or schedule I give to you,but such a list is not necessary to create a valid security interest in all ofmy equipment.

o            **Instruments and Chattel Paper: **All instruments, includingnegotiable instruments and promissory notes and any other writings or recordsthat evidence the right to payment of a monetary obligation, and tangible andelectronic chattel paper.

 

UNIVERSAL NOTE ANDSECURITY AGREEMENT

o            **General Intangibles:**All generalintangibles including, but not limited to tax refunds, patents and applicationfor patents, copyrights, trademarks, trade secrets, goodwill, trade names,customer lists, permits and franchises, payment intangibles, computer programsand all supporting information provided in connection with a transactionrelating to computer programs, and the right to use my name.

o            **Documents:**All documents of titleincluding, but not limited to, bills of lading, dock warrants and receipts, andwarehouse receipts.

o            **Farm Products and Supplies:** All farmproducts including, but not limited to, all poultry and livestock and theiryoung, along with their produce, products, and replacements; all crops, annualor perennial, and all products of the crops; and all feed, seed, fertilizer,medicines, and other supplies used or produced in my farming operations.

 

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o            **Government Payments and Programs:**Allpayments, accounts, general intangibles, and benefits including, but notlimited to payments in kind, deficiency payments, letters of entitlement,warehouse receipts, storage payments, emergency assistance and diversionpayments, production flexibility contracts, and conservation reserve paymentsunder any preexisting, current, or future federal or state government program.

o            **Investment Property:**  All investment property, including, but notlimited to, certificated securities, uncertificated securities, securitiesentitlements, securities accounts, commodity contracts, commodity accounts, andfinancial assets.

ý             **Deposit Accounts:** All deposit accountsincluding, but not limited to, demand, time, savings, passbook, and similaraccounts.

ý             **Specific Property Description:** The Propertyincludes, but is not limited by, the following:

American Bank of CommerceCertificate of Deposit #154427

In the name of Jeffrey J.Wooley, in the amount of $150,000.00 and any renewals and extensions thereof.

If this agreement coverstimber to be cut, enter real estate description and record owner information:                                                  

 

The Property will be usedfor a o personal                   ýbusiness            oagricultural             o                           purpose.

Borrower/Owner State oforganization/registration (if applicable) TEXAS

 

# **ADDITIONALTERMS OF THE SECURITY AGREEMENT**

 

**GENERALLY** – This agreement secures this note and any other debtI have with you, now or later.  However,it will not secure other debts if you fail with respect to such other debts, tomake any required disclosure about this security agreement or if you fail  to give any required notice of the right ofrescission.  If property described in thisagreement is located in another state, this agreement may also, in some circumstances,be governed by the law of the state in which the Property is located.

**NAME AND LOCATION**- My name indicated onpage 1 is my exact legal name.  If I aman individual, my address is my principal residence. If I am not an individual,my address is the location of my chief executive offices or sole place ofbusiness.  If I am an entity organizedand registered under state law, my address is located in the state in which Iam registered, unless otherwise indicated on page 2.  I will provide verification of registration and location uponyour request.  I will provide you withat least 30 days notice prior to any change in my name, address or state oforganization or registration.

**OWNERSHIP AND DUTIES TOWARD PROPERTY**- Irepresent that I own all of the Property, or to the extent this is a purchasemoney security interest, I will acquire ownership of the Property with theproceeds of the loan.  I will defend itagainst any other claim.  Your claim tothe Property is ahead of the claims of any other of the claims of othercreditor.  I agree to do whatever yourequire to protect your security interest and to keep your claim in theProperty ahead of the claims of other creditors.  I will not do anything to harm your position.  I will not use the Property for a purposethat will violate any laws or subject the Property to forfeiture or seizure.

I will keep books,records and accounts about the Property and my business in general.  I will let you examine these records at anyreasonable time.  I will prepare anyreport or accounting you request, which deals with the Property.

I will keep the Propertyin my possession and will keep it in good repair and use it only for thepurpose(s) described on page 3 of this agreement.  I will not change this specified use without your express writtenpermission.  I represent that I am theoriginal owner of the Property and, if I am not, that I have provided you witha list of prior owners of the Property.

I will keep the Propertyat my address listed on page 1 of this agreement, unless we agree I may keep itat another location. If the Property is to be used in another state, I willgive you a list of those states.  I willnot try to sell the Property unless it is inventory or I receive your writtenpermission to do so.  If I sell theProperty, I will have the payment made payable to the order of you and me.

You may demand immediatepayment of the debt(s) if the debtor is not a natural person and without yourprior written consent:  (1) a beneficialinterest in the debtor is sold or transferred, or (2) there is a change ineither the identity or number of members of a partnership, or (3) there is achange in ownership of more than 25 percent of the voting stock of acorporation.

I will pay all taxes andcharges on the Property as they become due. You have the right of reasonable access in order to inspect theProperty.  I will immediately inform youof any loss or damage to the Property.

If I fail to perform anyof my duties under the security agreement, or any mortgage, deed of trust, lienor other security interest, you may without notice to me perform the duties orcause them to be performed.   Your rightto perform for me shall not create an obligation to perform and your failure toperform will not preclude you from exercising any of your other rights underthe law of this security agreement.

**PURCHASE MONEY SECURITY INTEREST –** For thesole purpose of determining the extent of a purchase money security interestarising under this security agreement: (a) payments on any nonpurchase  money loan also secured by this agreementwill not be deemed to apply to the Purchase Money Loan, and (b) payments on thePurchase Money Loan will be deemed to apply first to the nonpurchase moneyportion of the loan, if any, and then to the purchase money obligations in theorder in which the items of collateral were acquired or if acquired at the sametime, in the order selected by you.  Nosecurity interest will be terminated by application of this formula.  “Purchase Money Loan” means any loan theproceeds of which, in whole or in part, are used to acquire any collateralsecuring the loan and all extensions, renewals, consolidations and refinancingof such loan.

**PAYMENT BY LENDER –**You are authorized topay, on my behalf, charges I am or may become obligated to pay to preserve orprotect the secured property (such as property insurance premiums).   You may treat those payments as advancesand add them to the unpaid principal under the note secured by this agreement oryou may demand immediate payment of the amount advanced.

**INSURANCE -** I agree to buy insurance on the Property against the risks and forthe amounts you require and to furnish you continuing proof of coverage.  I will have the insurance company name youas loss payee on any such policy.  You mayrequire added security if you agree that insurance proceeds may be used torepair or replace the Property.  I willbuy insurance  from a firm licensed todo business in the state where you are located.  The firm will be reasonably acceptable to you.  The insurance will last until the Propertyis released from this agreement.  If Ifail to buy or maintain the insurance (or fail to name you as loss payee) youmay purchase it yourself.

**WARRANTIES AND REPRESENTATIONS –** If thisagreement includes accounts, I will not settle any account for less than itsfull value without your written permission. I will collect all accounts until you tell me otherwise.  I will keep the proceeds from all theaccounts and any goods which are returned to me or which I take back in trustfor you.  I will not mix them with anyother property of mine.  I will deliverthem to you at your request.  If you askme to pay you the full price on any returned items or items retaken by myself,I will do so.  You may exercise myrights with respect to obligations of any account debtors, or other personsobligated on the Property, to pay or perform, and you may enforce any securityinterest that secures such obligations.

If this agreement coversinventory, I will not dispose of it except in my ordinary course of business atthe fair market value for the Property, or at a minimum price establishedbetween you and me.
| Any person who signs  within this box does so to give you a security interest in the Property  described on page 1 and this page.  This  person does not promise to pay the note.   “I” as used in the security agreement will include the borrower and  any person who signs within this box.

Date:                

Signed                                                                                     |
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If this agreementcovers farm products, I will provide you, at your request, a written list ofthe buyers, commission merchants or selling agents to or through whom I maysell my farm products.  In addition tothose parties named on this written list, I authorize you to notify at yoursole discretion any additional parties regarding your security interest in myfarm products.  I remain subject to allapplicable penalties for selling my farm products in violation of my agreementwith you and the Food Security Act.  Inthis paragraph the terms farm products, buyers, commission merchants andselling agents have the meanings given to them in the Federal Food Security Actof 1985.

If this agreement coverschattel paper or instruments, either as original collatoral or proceeds of theProperty, I will note your interest on the face of the chattel paper orinstruments.

**DEFAULT –**I will be in default on thissecurity agreement if I am in default on any note this agreement secures or ifI fail to keep any promise contained in the terms of this agreement.  Default shall also exist if any loanproceeds are used for a purpose that will contribute to excessive erosion ofhighly erodible land or in the conversion of wetlands to produce anagricultural commodity, as further explained in 7 CFR Part 1940, Subpart G,Exhibit M.

**REMEDIES-**If I default, you have all of therights and remedies provided in the note and under the Uniform CommercialCode.  You may require me to make thesecured property available to you at a place which is reasonablyconvenient.  You may take possession ofthe secured property and sell it as provided by law.  The proceeds will be applied first to your expenses and then tothe debt.  I agree that 10 days writtennotice sent to my last known address by first class mail will be reasonablenotice under the Uniform Commercial Code. My current address is on page 1.

**PERFECTION OF SECURITY INTEREST**- Iauthorize you to file a financing statement covering the Property, I willcomply with, facilitate, and otherwise assist you in connection with obtainingpossession of or control over the Property for purposes of perfecting yoursecurity interest under the Uniform Commercial Code.

 

# **ADDITIONALTERMS OF THE NOTE**

 

**DEFINITIONS-**As used on pages 1 and 2, “ý“ means the terms that apply to this loan. “I,” “me” or “my” means each Borrower who signs this note, and eachother person or legal entity (including guarantors, endorsors, and sureties)who agrees to pay this note (together referred to as “us”).  “You” or “your” means the Lender and itssuccessors and assigns.

**APPLICABLE LAW –**The law of the state ofTexas will govern this agreement.  Anyterm of this agreement which is contrary to applicable law will not beeffective unless the law permits you and me to agree to such a variation.  If an provision of this agreement cannot beenforced according to its terms, this fact will not affect the enforceabilityof the remainder of this agreement.  Nomodification of this agreement may be made without your express writtenconsent.  Time is of the essence in thisagreement.

**PAYMENTS –**Each payment I make on this notewill first reduce the amount I owe you for charges which are neither interestnor principal.  The remainder of eachpayment will then reduce accrued and unpaid interest, and then unpaidprincipal.  If you and I agree to adifferent application of payments, we will describe our agreement on this note.  I may prepay a part of, or the entirebalance of this loan without penalty, unless we specify to the contrary on thisnote.  Any partial prepayment will notexcuse or reduce any later scheduled payment until this note is paid in full(unless, when I make the prepayment, you and I agree in writing to the contrary).

**INTEREST –**Interest accrues on theprincipal remaining unpaid from time to time, until paid in full.  If I receive the principal in more than oneadvance, each advance will start to earn interest only when I receive theadvance.  The interest rate in effect onthis note at any given time will apply to the entire principal sum outstandingat that time.  Notwithstanding anythingto the contrary, I do not agree to pay and you do not intend to charge any rateof interest that is higher than the maximum rate of interest you could chargeunder applicable law for the extension of credit that is agreed to in this note(either before or after maturity).  Ifany notice of interest accrual is sent and is in error, we mutually agree tocorrect it, and if you actually collect more interest than allowed by law andthis agreement, you agree to refund it to me.

**INDEX RATE –**The index will serve only as adevice for setting the interest rate on this note.  You do not guarantee by selecting this index, or the margin, thatthe interest rate on this note will be the same rate you charge on any otherloans or class of loans you make to me or other borrowers.

**POST MATURITY RATE –**For purposes ofdeciding when the “Post Maturity Rate” (shown on page 1) applies, the term“maturity” means the date of the last scheduled payment indicated on page 1 ofthis note or the date you accelerate payment on the note, whichever is earlier.

**SINGLE ADVANCE LOANS –**If this is a singleadvance loan, you and I expect that you will make only one advance ofprincipal.  However, you may add otheramounts to the principal if you make any payments described in the “PAYMENTS BYLENDER” paragraph on page 2.

**MULTIPLE ADVANCE LOANS –**If this is amultiple advance loan, you and I expect that you will make more than oneadvance of principal.  If this is closedand credit, repaying a part of the principal will not entitle me to additionalcredit.

**SET-OFF –**I agree that you may set off anyamount due and payable under this note against any right I have to receivemoney from you.

“Right to receive moneyfrom you” means:

(1)                        anydeposit account balance I have with you;

(2)                        any moneyowed to me on an item presented to you or in your possession for collection orexchange; and

(3)                        anyrepurchase  agreement or other non-depositobligation.

“Any amount due andpayable under this note” means the total amount of which you are entitled todemand payment under the terms of this note at the time you set off.  This total includes any balance the due datefor which you properly accelerate under this note.

If my right to receivemoney from you is also owned by someone who has not agreed to pay this note,your right of set-off will apply to my interest in the obligation and to anyother amounts I could withdraw on my sole request or endorsement.  Your right of set-off does not apply to anaccount or other obligation where my rights are only as a representative.  It also does not apply to any Individual RetirementAccount or other tax deferred retirement account.

You will not be liablefor the dishonor of any check when the dishonor occurs because you set off thedebt against any of the accounts.  Iagree to hold you harmless from any such claims arising as a result of yourexercise of your right to set-off.

**DEFAULT –**I will be in default on this loanand any agreement securing this loan if any one or more of the followingoccurs:

(1)I fail to perform anyobligation which I have undertaken in this note or any agreement securing thisnote; or

(2)You, in good faith,believe that the prospect of payment or the prospect of  my performance of any other obligationsunder the note or any agreement securing this note is impaired.

**REMEDIES –**If I am in default on this note,you have, but are not limited to, the following remedies:

(1)                        You may demandimmediate payment of my debt  under thisnote (principal, accrued unpaid interest and other accrued charges).

(2)                        You mayset off this debt against any right I have to the payment of money from you,subject to the terms of the “SET-OFF” paragraph herein.

(3)                        You maydemand security, additional security, or additional parties to be obligated topay this note as a condition for not using any other remedy.

(4)                        You  may refuse to make advances to me or allowpurchases on credit by me.

(5)                        You mayuse any remedy you have under state or federal law.

(6)                        You maymake use of any remedy given to you in any agreement securing this note.

By selecting any one ormore of these remedies you do not give up your right to use later any otherremedy.  By waiving your right todeclare an event to be a default, you do not waive your right to consider laterthe event a default if it continues or happens again.

**COLLECTION COSTS AND ATTORNEY’S FEES —**Iagree to pay all costs of collection, replevin or any other or similar type ofcost if I am in default.  In addition,if you hire an attorney to collect this note, I also agree to pay any fee youincur with such attorney plus court costs (except where prohibited by law).  To the extent permitted by ** **the United States Bankruptcy Code,I also agree top ay the reasonable attorney’s fees and costs you incur tocollect this debt as awarded by any court exercising jurisdiction under theBankruptcy Code.

**WAIVER –**I give up my rights to require youto do certain things.  I will not requireyou to:

(1)                        demandpayments of amounts due (presentment);

(2)                        obtainofficial certification of non-payment (protest);

(3)                        givenotice that amounts due have not been paid (notice of dishonor);

(4)                        givenotice of intent to accelerate; or

(5)                        givenotice of acceleration.

I waive any defenses Ihave based on suretyship or impairment of collateral.

**OBLIGATIONS INDEPENDENT. –**I understandthat I must pay this note even if someone else has also agreed to pay it (by,for example, signing this form or a separate guarantee or endorsement).  You may sue me alone, or anyone else who isobligated on this note, or any number of us together, to collect thisnote.  You may without notice releaseany party to this agreement without releasing any other party.  If you give up any of your rights, with orwithout notice, it will not affect my duty to pay this note.  Any extension of new credit to any of us, orrenewal of this note by all or less than all of us will not release me from myduty to pay it.  (Of course, you are entitledto only one payment in full.)  I agreethat you may at our option extend this note or the debt represented by thisnote, or any portion of the note or debt, from time to time without limit tonotice and for any term without affecting my liability for payment of thenote.  I will not assign my obligationunder this agreement without your prior written approval.

**FINANCIAL INFORMATION –**I agree to provideyou, upon request, any financial statement or information you may deemnecessary.  I warrant that the financialstatements and information I provide to you are or will be accurate, correctand complete.

 
| THIS WRITTEN LOAN  AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE  CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT, ORAL  AGREEMENTS OF THE PARTIES.

THERE ARE NO  UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. |
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SIGNATURES:  I AGREE TO THE TERMS OF THIS NOTE ANDSECURITY AGREEMENT (INCLUDING THOSE ON PAGES 1 AND 2).         I have received a copy of this note and security agreementon today’s date.

Schlotzsky’s, Inc.
| /s/Jeffrey J. Wooley                      |                           | /s/ Charlie Avant |   |
|-------------------------------------------|--------------------------------|-------------------|--------|
| Jeffrey J. Wooley,  Senior Vice President | CHARLIE AVANT, VICE  PRESIDENT |

 

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