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                                                                   EXHIBIT 10.16

                           ALTERNATIVE RATE OPTIONS
                                PROMISSORY NOTE
                              (PRIME RATE, LIBOR)

$2,000,000.00                              Dated as of: DECEMBER 30, 1999
--------------------------------                        ------------------------

BRIAZZ, INC. & VICTOR ALHADEFF                                       ("Borrower)
--------------------------------

U.S.  BANK NATIONAL ASSOCIATION                                       ("Lender")

1.      TYPE OF CREDIT. This Note is given to evidence Borrower's obligation to
repay all sums which Lender may from time to time advance to Borrower
("Advances") under a:

   [_]  single disbursement loan. Amounts loaned to Borrower hereunder will be
        disbursed in a single Advance in the amount shown in Section 2.

   [X]  revolving line of credit. No Advances shall be made which create a
        maximum amount outstanding at any one time which exceeds the maximum
        amount shown in Section 2. However, Advances hereunder may be borrowed,
        repaid and reborrowed, and the aggregate Advances loaned hereunder from
        time to time may exceed such maximum amount.

   [_]  non-revolving line of credit. Each Advance made from time to time
        hereunder shall reduce the maximum amount available shown in Section 2.
        Advances loaned hereunder which are repaid may not be reborrowed.

2.      PRINCIPAL BALANCE. The unpaid principal balance of all Advances
outstanding under this note ("Principal Balance") at one time shall not exceed
$2,000,000.00.
--------------

3.      PROMISE TO PAY. For value received Borrower promises to pay to Lender on
order at 555 SW OAK, PL-7, PORTLAND, OR 97204, the Principal Balance of this
         ------------------------------------
note, with interest thereon at the rate(s) specified in Sections 4 and 11 below.

4.      INTEREST RATE. The interest rate on the Principal Balance outstanding
may vary from time to time pursuant to the provisions of this note. Subject to
the provisions of this note, Borrower shall have the option from time to time of
choosing to pay interest at the rate or rates and for the applicable periods of
time based on the rate options provided herein; provided, however, that once
                                                --------
Borrower notifies Lender of the rate option chosen in accordance with the
provisions of this note, such notice shall be irrevocable. The rate options are
the Prime Borrowing Rate and the LIBOR Borrowing Rate, each as defined herein.

(a)     Definitions.  The following terms shall have the following meanings:

        "Business Day" means any day other than a Saturday, Sunday, or other day
that commercial banks in Portland, Oregon, Minneapolis, Minnesota, New York City
or Seattle, Washington are authorized or required by law to close; provided,
however that when, used in connection with a LIBOR Rate, LIBOR Amount or LIBOR
Interest Period such term shall also exclude any day on which dealings in U.S.
dollar deposits are not carried on in the London interbank market.

        "Dow Jones Page 3750" means the display designated as such on the Dow
Jones Markets Service (formerly known as Telerate) (or such other page as may
replace page 3750 on that service for the purpose of displaying London interbank
offered rates of major banks for United States Dollar deposits).

        "LIBOR Amount" means each principal amount for which Borrower chooses to
have the LIBOR Borrowing Rate apply for any specified LIBOR Interest Period.

        "LIBOR Interest Period" means as to any LIBOR Amount, a period of 1, 2
                                                                          ----
OR 3 months commencing on the date the LIBOR Borrowing Rate becomes applicable
----
thereto; provided, however, that: (i) the first day of each LIBOR Interest
         --------
Period must be a Business Day; (ii) no LIBOR Interest Period shall commence on
or after OCTOBER 31, 2000; (iii) no LIBOR Interest Period shall be selected
         ----------------
which would extend beyond NOVEMBER 30, 2000; (iv) no LIBOR Interest Period
                          -----------------
shall extend beyond the date of any principal payment required under Section 6
of this note, unless the sum of the Prime Rate Amount, plus LIBOR Amounts with
LIBOR Interest Periods ending on or before the scheduled date of such principal
payment, plus principal amounts remaining unborrowed under a line of credit,
equals or exceeds the amount of such principal payment; (v) any LIBOR Interest
Period which would otherwise expire on a day which is not a Business Day, shall
be extended to the next succeeding Business Day, unless the result of such
extension would be to extend such LIBOR Interest Period into another calendar
month, in which event the LIBOR Interest Period shall end on the immediately
preceding Business Day, and (vi) any LIBOR Interest Period that begins on the
last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such LIBOR
Interest Period) shall end on the last Business Day of a calendar month.

        "LIBOR Rate" means, for any LIBOR Interest Period, the average offered
rate for deposits in United States Dollars (rounded upwards, if necessary, to
the nearest 1/16 of 1%) for delivery of such deposits on the first day of such
LIBOR Interest Period, for the number of months therein, which appears on Dow
Jones Page 3750 as of 11:00 a.m., London time (or such other time as of which
such rate appears) on the day that is two Business Days preceding the first day
of such LIBOR Interest Period; or on the rate for such deposits determined by
Lender at such time based on such other published service of general application
as shall be selected by Lender for such purpose; provided, that in lieu of
determining the rate in the foregoing manner, Lender may determine the rate
based on the rates offered to Lender for deposits in United States Dollars
(rounded upwards, if necessary to the nearest 1/16 of 1% in the interbank
eurodollar market at such time for delivery on the first day of such LIBOR
Interest Period for the number of months therein; and provided, further, that in
any case the LIBOR Rate shall be adjusted to take into account the maximum
reserves required to be maintained for Eurocurrency liabilities by banks during
each such LIBOR Interest Period as specified in Regulation D of the Board of
Governors of the Federal Reserve System or any successor regulation.

        "Prime Rate" means the rate of interest which Lender from time to time
establishes as its prime or reference rate and is not, for example, the lowest
rate of interest which Lender collects from any borrower or class of borrowers.
When the Prime Rate is applicable under Section 4(b) or 11(b), the interest rate
hereunder shall be adjusted without notice effective on the day the Prime Rate
changes, but in no event shall the rate of interest be higher than allowed by
law.

        "Prime Rate Amount" means any portion of the Principal Balance bearing
interest at the Prime Borrowing Rate.

(b)     The Prime Borrowing Rate.

        (i)   The Prime Borrowing Rate is a variable per annum rate equal to the
Prime Rate plus 0.750%.
                -----

        (ii)  Whenever Borrower desires to use the Prime Borrowing Rate option,
Borrower shall give Lender notice orally or in writing in accordance with
Section 15 of this note, which notice shall specify the requested effective date
(which must be a Business Day) and principal amount of the Advance or increase
in the Prime Rate Amount, and whether Borrower is requesting a new Advance under
a line of credit or conversion of a LIBOR Amount to the Prime Borrowing Rate.

        (iii) Subject to Section 11 of this note, interest shall accrue on the
unpaid Principal Balance at the Prime Borrowing Rate unless and except to the
extent that the LIBOR Borrowing Rate is in effect.

(c)     The LIBOR Borrower Rate.

        (i)   The LIBOR Borrowing Rate is the LIBOR Rate plus 3.500% per annum.
                                                              -----

        (ii)  Borrower may obtain LIBOR Borrowing Rate quotes from Lender before
10:00 a.m. (Portland, Oregon time) on any Business Day. Borrower may request an
Advance, conversion of any portion of the Prime Rate Amount to a LIBOR Amount or
a new LIBOR Interest Period for an existing LIBOR Amount, at such rate only by
giving Lender notice in accordance with Section 4(c)(iii) before 10:00 a.m.
(Portland, Oregon time) on such day.

        (iii) Whenever Borrower desires to use the LIBOR Borrowing Rate option,
Borrower shall give Lender irrevocable notice (either in writing or orally and
promptly confirmed in writing) no later than 10:00 a.m. (Portland, Oregon time)
two (2) Business Days prior to the desired effective date of such rate. Any oral
notice shall be given by, and any written notice or confirmation of an oral
notice shall be signed by, the person(s) authorized in Section 15 of this note,
and shall specify the requested effective date of the rate, LIBOR Interest
Period and LIBOR Amount, and whether Borrower is requesting a new Advance at

                                                                     Page 1 of 4
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the LIBOR Borrowing Rate under a line of credit, conversion of all or any
portion of the Prime Rate Amount to a LIBOR Amount, or a new LIBOR Interest
Period for an outstanding LIBOR Amount. Notwithstanding any other term of this
note, Borrower may elect the LIBOR Borrowing Rate in the minimum principal
amount of $500,000.00 and in multiples of $100,000.00 above such amount;
          -----------                     -----------
provided, however, that no more than FOUR _____ separate LIBOR Interest Periods
--------
may be in effect at any one time.

         (iv)   If at any time the LIBOR Rate is unascertainable or unavailable
to Lender or if LIBOR Rate loans become unlawful, the option to select the LIBOR
Borrowing Rate shall terminate immediately. If the LIBOR Borrowing Rate is then
in effect, (A) it shall terminate automatically with respect to all LIBOR
Amounts (i) on the last day of each then applicable LIBOR Interest Period, if
Lender may lawfully continue to maintain such loans, or (ii) immediately if
Lender may not lawfully continue to maintain such loans through such day, and
(B) subject to Section 11, the Prime Borrowing Rate automatically shall become
effective as to such amounts upon such termination.

         (v)    If at any time after the date hereof (A) any revision in or
adoption of any applicable law, rule, or regulation or in the interpretation or
administration thereof (i) shall subject Lender or its Eurodollar lending office
to any tax, duty, or other charge, or change the basis of taxation of payments
to Lender with respect to any loans bearing interest based on the LIBOR Rate, or
(ii) shall impose or modify any reserve, insurance, special deposit, or similar
requirements against assets of, deposits with or for the account of, or credit
extended by Lender or its Eurodollar lending office, or impose on Lender or its
Eurodollar lending office any other condition affecting any such loans, and (B)
the result of any of the foregoing is (i) to increase the cost to Lender of
making or maintaining any such loans or (ii) to reduce the amount of any sum
receivable under this note by Lender or its Eurodollar lending office, Borrower
shall pay Lender within 15 days after demand by Lender such additional amount as
will compensate Lender for such increased cost or reduction. The determination
hereunder by Lender of such additional amount shall be conclusive in the absence
of manifest error. If Lender demands compensation under this Section 4(c)(v),
Borrower may upon three (3) Business Days' notice to Lender pay the accrued
interest on all LIBOR Amounts, together with any additional amounts payable
under Section 4(c)(vi). Subject to Section 11, upon Borrowers paying such
accrued interest and additional costs, the Prime Borrowing Rate immediately
shall be effective with respect to the unpaid principal balance of such LIBOR
Amounts.

         (vi)   Borrower will indemnify Lender upon demand against any loss or
expense which Lender may sustain or incur (including, without limitation, any
loss or expense sustained or incurred in obtaining, liquidating or employing
deposits or other funds acquired to effect, fund or maintain any portion of the
loan or any Advance) as a consequence of (A) any failure of Borrower to make any
payment when due of any amount due hereunder, (B) any failure of Borrower to
borrow, if permitted by the terms of this note, continue or convert any portion
of the Prime Rate Amount to a LIBOR Amount, on a date specified therefore in a
notice thereof, or (C) any payment, voluntary or mandatory prepayment or payment
on default or conversion of any LIBOR Amount to the Prime Borrowing Rate, on a
date other than the last day of the applicable LIBOR Interest Period.
Determinations by Lender of the amount required to indemnify Lender shall be
conclusive in the absence of manifest error.

         (vii)  Notwithstanding any provision of this note to the contrary,
Lender shall be entitled to fund and maintain its funding of all or any part of
the loan evidenced by this note in any manner it elects; it being understood,
however, that with respect to any LIBOR amount, all determinations hereunder
shall be made as if Lender had actually funded and maintained each LIBOR amount
during the LIBOR Interest Period applicable to it through the purchase of
deposits having a term corresponding to such LIBOR Interest Period and bearing
an interest rate equal to the LIBOR Rate for such LIBOR Interest Period (whether
or not Lender shall have granted any participations in such LIBOR Amounts).

         (viii) Notwithstanding any other term of this note, Borrower may not
select the LIBOR Borrowing Rate if an event of default hereunder has occurred
and is continuing.

         (ix)   Nothing contained in this note, including without limitation the
determination of any LIBOR Interest Period or Lenders quotation of any LIBOR
Borrowing Rate, shall be construed to prejudice Lenders right, if any, to
decline to make any requested Advance or to require payment on demand.

5.       COMPUTATION OF INTEREST. All interest under Section 4 and Section 11
will be computed at the applicable rate based on a 360-day year and applied to
the actual number of days elapsed.

6.       PAYMENT SCHEDULE.

(a)      Principal.  Principal shall be paid:

    [_]  on demand.
    [X]  on demand, or if no demand, on NOVEMBER 30, 2000.
                                        -----------------
    [_]  on _______________.
    [_]  subject to Section 8, in installments of
                ______________________________ each, plus accrued interest,
         [_]    beginning on _____ and on the same day of each
                ______________________________ thereafter until _______________
                when the entire Principal Balance plus interest thereon shall be
                due and payable. ______________________________ each, including
         [_]    accrued interest, beginning on _____ and on the same day of each
                thereafter until when the entire Principal Balance plus interest
                thereon shall be due and payable.

    [_]  ______________________________.

(b)      Interest.

    (i)  Interest on the Prime Rate Amount shall be paid:

         [X]    on the LAST day of JANUARY. 2000. and on the same day of each
                       ----        -------------
                MONTH thereafter prior to maturity and at maturity.
                -----
         [_]    at maturity.
         [_]    at the time each principal installment is due and at maturity.
         [_]    ________________________
         [_]    ________________________

    (ii) Interest on all LIBOR Amounts shall be paid:

         [_]    on the last day of the applicable LIBOR interest Period, and if
                such LIBOR Interest Period is longer than three months, on the
                last day of each three month period occurring during such LIBOR
                Interest Period, and at maturity.
         [X]    on the LAST day of JANUARY, 2000. and on the same day of each
                       ----        -------------
                MONTH thereafter prior to maturity and at maturity.
                -----
         [_]    at maturity.
         [_]    at the time each principal installment is due and at maturity.
         [_]    __________________________.

7.      PREPAYMENT.

(a)     Prepayments of all or any part of the Prime Rate Amount may be made at
        any time without penalty.

(b)     Except as otherwise specifically set forth herein, Borrower may not
        prepay all or any part of any LIBOR Amount or terminate any LIBOR Amount
        or terminate any LIBOR Borrowing Rate, except on the last day of the
        applicable LIBOR Interest Period.

(c)     Principal prepayments will not postpone the date of or change the amount
        of any regularly scheduled payment. At the time of any principal
        prepayment, all accrued interest, fees, costs and expenses shall also be
        paid.

8.      CHANGE IN PAYMENT AMOUNT. Each time the interest rate on this note
changes the holder of this note may, from time to time, in holder's sole
discretion, increase or decrease the amount of each of the installments
remaining unpaid at the time of such change in rate to an amount holder in its
sole discretion deems necessary to continue amortizing the Principal Balance at
the same rate established by the installment amounts specified in Section 6(a),
or not the installment amount is increased under this Section 8, Borrower
understands that, as a result of increases in the rate of interest the final
payment due, whether or not a "balloon" payment, shall include the entire
Principal Balance and interest thereon then outstanding, and may be
substantially more than the installment specified in Section 6.

                                                                     Page 2 of 4
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9.       ALTERNATE PAYMENT DATE. Notwithstanding any other term of this note, if
in any month there is no day on which a scheduled payment would otherwise be due
(e.g. February 31), such payment shall be paid on the last banking day of that
month.

10.      PAYMENT BY AUTOMATIC DEBIT.

[_]      Borrower hereby authorizes Lender to automatically deduct the amount of
all principal and interest payments from account number 153500076036
                                                        ------------------------
________________________________________________________________________________
with Lender. If there are insufficient funds in the account to pay the automatic
deduction in full, Lender may allow the account to become overdrawn, or Lender
may reverse the automatic deduction. Borrower will pay all the fees on the
account which result from the automatic deductions, including any overdraft and
non-sufficient funds charges, if for any reason Lender does not charge the
account for a payment, or if an automatic payment is reversed, the payment is
still due according to this note. If the account is a Money Market Account, the
number of withdrawals from that account is limited as set out in the account
agreement. Lender may cancel the automatic deduction at any time in its
discretion.

Provided, however, if no account number is entered above, Borrower does not want
to make payments by automatic debit.

11.      DEFAULT.

(a)      Without prejudice to any right of Lender to require payment on demand
or to decline to make any requested Advance, each of the following shall be an
event of default: (i) Borrower falls to make any payment when due, (ii) Borrower
falls to perform or comply with any term, covenant or obligation in this note or
any agreement related to this note, or in any other agreement or loan Borrower
has with Lender or any affiliate of Lender, (iii) Borrower defaults under any
loan, extension of credit, security agreement, purchase or sales agreement, or
any other agreement, in favor of any other creditor or person that may
materially affect any of Borrower's property or Borrowers ability to repay this
note or perform Borrowers obligations under this note or any related documents,
(iv) Any representation or statement made or furnished to Lender by Borrower or
on Borrowers behalf is false or misleading in any material respect either now or
at the time made or furnished, (v) Borrower dies, becomes insolvent, liquidates
or dissolves, a receiver is appointed for any part of Borrower's property,
Borrower makes an assignment for the benefit of creditors, or any proceeding is
commenced either by Borrower or against Borrower under any bankruptcy or
insolvency laws, (vi) Any creditor tries to take any of Borrower's property on
or in which Lender has a lien or security interest. This includes a garnishment
of any of Borrower's accounts with Lender, (vii) Any of the events described in
this default section occurs with respect to any general partner in Borrower or
any guarantor of this note, or any guaranty of Borrowers indebtedness to Lender
ceases to be, or is asserted not to be, in full force and effect., (viii) There
is any material adverse change in the financial condition or management of
Borrower or Lender in good faith deems itself insecure with respect to the
payment or performance of Borrowers obligations to Lender. If this note is
payable on demand, the inclusion of specific events of default shall not
prejudice Lenders right to require payment on demand or to decline to make any
requested Advance.

(b)      Without prejudice to any right of Lender to require payment on demand,
upon the occurrence of an event of default, Lender may declare the entire unpaid
Principal Balance on this note and all accrued unpaid interest immediately due
and payable, without notice; provided, however, that if any proceeding under any
bankruptcy or insolvency law is commenced by or against Borrower, the
availability of Advances shall be immediately terminated without notice and the
entire Principal Balance and all accrued interest shall, without notice, become
immediately due and payable, upon default, including failure to pay upon final
maturity, Lender, at its option, may also, if permitted under applicable law,
increase the interest rate on this note to a rate equal to the Prime Borrowing
Rate plus 5%. The interest rate will not exceed the maximum rate permitted by
applicable law. In addition, it any payment of principal or interest is 15 or
more days past due, Borrower will be charged a late charge of 5% of the
delinquent payment.

12.      EVIDENCE OF PRINCIPAL BALANCE; PAYMENT ON DEMAND. Holder's records
shall, at any time, be conclusive evidence of the unpaid Principal Balance and
interest owing on this note: Notwithstanding any other provisions of this note,
in the event holder makes Advances hereunder which result in an unpaid Principal
Balance on this note which at any time exceeds the maximum amount specified in
Section 2, Borrower agrees that all such Advances, with interest, shall be
payable on demand.

13.      LINE OF CREDIT PROVISIONS. If the type of credit indicated in Section 1
is a revolving line of credit or a non-revolving line of credit, Borrower agrees
that Lender is under no obligation and has not committed to make any Advances
hereunder. Each Advance hereunder shall be made at the sole option of Lender.

14.      DEMAND NOTE. If this note is payable on demand, Borrower acknowledges
and agrees that (a) Lender is entitled to demand Borrowers immediate payment in
full of all amounts owing hereunder and (b) neither anything to the contrary
contained herein or in any other loan documents (including but not limited to,
provisions relating to defaults, rights of cure, default rate of interest,
installment payments, late charges, periodic review of Borrowers financial
condition, and covenants) nor any act of Lender pursuant to any such provisions
shall limit or impair Lenders right or ability to require Borrower's payment in
full of all amounts owing hereunder immediately upon Lender's demand.

15.      REQUESTS FOR ADVANCES.

(a)      Any Advance may be made or interest rate option selected upon the
request of Borrower (if an individual), any of the undersigned (if Borrower
consists of more than one individual), any person or persons authorized in
subsection (b) of this Section 15, and any person or persons otherwise
authorized to execute and deliver promissory notes to Lender on behalf of
Borrower.

(b)      Borrower hereby authorizes any one of the following individuals to
request Advances and to select interest rate options:

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________
unless Lender is otherwise instructed in writing.

(c)      All Advances shall be disbursed by deposit directly to Borrowers
account number with Lender, or by cashiers check issued to Borrower.

(d)      Borrower agrees that Lender shall have no obligation to verify the
identity of any person making any request pursuant to this Section 15, and
Borrower assumes all risks of the validity and authorization of such requests.
In consideration of Lender agreeing, at its sole discretion, to make Advances
upon such requests, Borrower promises to pay holder, in accordance with the
provisions of this note, the Principal Balance together with interest thereon
and other sums due hereunder, although any Advances may have been requested by a
person or persons not authorized to do so.

16.      PERIODIC REVIEW. Lender will review Borrower's credit accommodations
periodically. At the time of the review, Borrower will furnish Lender with any
additional information regarding Borrower's financial condition and business
operations that Lender requests. This information may include but is not limited
to, financial statements, tax returns, lists of assets and liabilities, agings
of receivables and payables, inventory schedules, budgets and forecasts. If upon
review, Lender, in its sole discretion, determines that there has been a
material adverse change in Borrower's financial condition, Borrower will be in
default. Upon default, Lender shall have all rights specified herein.

17.      NOTICES. Any notice hereunder may be given by ordinary mail, postage
paid and addressed to Borrower at the last known address of Borrower as shown on
holder's records. If Borrower consists of more than one person, notification of
any of said persons shall be complete notification of all.

18.      ATTORNEY FEES. Whether or not litigation or arbitration is commenced,
Borrower promises to pay all costs of collecting overdue amounts. Without
limiting the foregoing, in the event that holder consults an attorney regarding
the enforcement of any of its rights under this note or any document securing
the same, or if this note is placed in the hands of an attorney for collection
or if suit or litigation is brought to enforce this note or any document
securing the same, Borrower promises to pay all costs thereof including such
additional sums as the court or arbitrator(s) may adjudge reasonable as attorney
fees, including without limitation, costs and attorney fees incurred in any
appellate court, in any proceeding under the bankruptcy code, or in any
receivership and post-judgment attorney fees incurred in enforcing any judgment.

19.      WAIVERS; CONSENT. Each party hereto, whether maker, co-maker, guarantor
or otherwise, waives diligence, demand, presentment for payment, notice of non-
payment, protest and notice of protest and waives all defenses based on
suretyship or impairment of collateral. Without notice to Borrower and without
diminishing or affecting Lender's rights or Borrower's obligations hereunder,
Lender may deal in any manner with any person who at any time is liable for, or
provides any real or personal property collateral for, any indebtedness of
Borrower to Lender, including the indebtedness of Borrower to Lender, including
the indebtedness evidenced by this note. Without the foregoing, Lender may, in
its sole discretion: (a) make secured or unsecured loans to Borrower and agree
to any number of waivers, modifications, extensions and renewals of any length
of such loans, including the loan evidenced by this note; (b) impair, release
(with or without substitution of new collateral), fail to perfect a security
interest in, fail to preserve the value of, fail to dispose of in accordance
with applicable law, any collateral provided by any person; (c) sue, fail to
sue, agree to sue, release, and settle of compromise with, any person.

20.      JOINT AND SEVERAL LIABILITY. All undertakings of the undersigned
Borrowers are joint and several and are binding upon any marital community of
which any of the undersigned are members. Holder's rights and remedies under
this note shall be cumulative.

                                                                     Page 3 of 4
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21.      SEVERABILITY. If any term or provision of this note is declared by a
court of competent jurisdiction to be illegal, invalid or unenforceable for any
reason whatsoever, such illegality, invalidity or unenforceability shall not
affect the balance of the terms and provisions hereof, which terms and
provisions shall remain binding and enforceable, and this note shall be
construed as if such illegal, invalid or unenforceable provision had not been
contained herein.

22.      ARBITRATION.

(a)      Either Lender or Borrower may require that all disputes, claims,
counterclaims and defenses, including those based on or arising from any alleged
tort ("Claims") relating in any way to this note or any transaction of which
this note is a part (the "Loan"), be settled by binding arbitration in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association and Title 9 of the U.S. Code. All Claims will be subject to the
statutes of limitation applicable if they were litigated. This provision is void
if the Loan, at the time of the proposed submission to arbitration, is secured
by real property located outside of Oregon or Washington, or if the effect of
the arbitration procedure (as opposed to any Claims of Borrower) would be to
materially impair Lenders ability to realize on any collateral securing the
Loan.

(b)      If arbitration occurs and each party's Claim is less than $100,000, one
neutral arbitrator will decide all issues; if any party's Claim is $100,000 or
more, three neutral arbitrators will decide all issues. All arbitrators will be
active Washington State Bar members in good standing. All arbitration hearings
will be held in Seattle, Washington. In addition to all other powers, the
arbitrator(s) shall have the exclusive right to determine all issues of
arbitrability. Judgment on any arbitration award may be entered in any court
with jurisdiction.

(c)      If either party Institutes any judicial proceeding relating to the
Loan, such action shall not be a waiver of the right to submit any Claim to
arbitration. In addition, each has the right before, during and after any
arbitration to exercise any number of the following remedies, in any order or
concurrently: (i) setoff, (ii) self-help repossession; (iii) judicial or non-
judicial foreclosure against real or personal property collateral; and (iv)
provisional remedies, including injunction, appointment of receiver, attachment,
claim and delivery and replevin.

23.      GOVERNING LAW. This note shall be governed by and construed and
enforced in accordance with the laws of the State of Washington without regard
to conflicts of law principles; provided, however, that to the extent that
                                --------
Lender has greater rights or remedies under Federal law, this provision shall
not be deemed to deprive Lender of such rights and remedies as may be available
under Federal law.

24.       YEAR 2000. Borrower has reviewed and assessed its business operations
and computer systems and applications to address the "year 2000 problem" (that
is, that computer applications and equipment used by Borrower, directly or
indirectly through third parties, may be unable to properly perform date-
sensitive functions before, during and after January 1, 2000). Borrower
reasonably believes that the year 2000 problem will not result in a material
adverse change in Borrower's business condition (financial or otherwise),
operations, properties or prospects or ability to repay Lender. Borrower agrees
that this representation will be true and correct on and shall be deemed made by
Borrower on each date Borrower requests any advance under this Agreement or Note
or delivers any information to Lender. Borrower will promptly deliver to Lender
such information relating to this representation as Lender requests from time to
time.

25.      RENEWAL AND EXTENSION. This Note is given in renewal and extension and
not in novation of the following described indebtedness: That certain Promissory
Note dated March 5, 1998, in the amount of $2,000,000.00, executed by Borrower
payable to Lender. It is further agreed that all liens and security interest
securing said indebtedness are hereby renewed and extended to secure the Note
and all renewals, extensions and modifications thereof.

26.      DISCLOSURE.

         Oral agreements or oral commitments to loan money, extend credit, or to
         -----------------------------------------------------------------------
forbear from enforcing repayment of a debt are not enforceable under Washington
--------------------------------------------------------------------------------
law.
---

EACH OF THE UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS
DOCUMENT.

BRIAZZ. INC.                                    /s/ VICTOR ALHADEFF
--------------------------                --------------------------------------
Borrower Name                             Victor Alhadeff

/s/ VICTOR ALHADEFF
------------------------------------------------
By: Victor Alhadeff        Title: CEO

________________________________________________________________________________
For valuable consideration, Lender agrees to the terms of the arbitration
provision set forth in this note.

                                  U.S. BANK NATIONAL ASSOCIATION

                                  By:/s/ MARYANN CUSSEY
                                     -------------------------------------------
                                  Title: Vice President
                                        ----------------------------------------
                                  Date:  1/7/00
                                       -----------------------------------------

                                                                     Page 4 of 4<PAGE>

                                                                   EXHIBIT 10.17

USbank
                         COMMERCIAL SECURITY AGREEMENT
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
  Principal        Loan Date        Maturity      Loan No       Call       Collateral       Account       Officer       Initials
$2,000,000.00      12-30-1999      11-30-2000     733/26                      070          1072972161      M C61
------------------------------------------------------------------------------------------------------------------------------------
<S>                <C>             <C>            <C>           <C>        <C>             <C>            <C>           <C>
  References in the shaded area are for Lender's use only and do not limit the applicability of this document to any particular
                                                           loan or item.
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<S>                                                      <C>
Borrower: BRIAZZ, INC.; ET. AL.                          Lender:  U.S.  Bank National Association
          1011 SW KLICKITAT WAY, SUITE 202                        South Seattle Corporate Banking
          SEATTLE, WA 98134                                       1420 Fifth Avenue
                                                                  Seattle, WA 98101
Grantor:  BRIAZZ, INC.; ET. AL.
          1011 SW KLICKITAT WAY, SUITE 202
          SEATTLE, WA 98134
===================================================================================================================================
</TABLE>

THIS COMMERCIAL SECURITY AGREEMENT is entered into among BRIAZZ, INC. and VICTOR
ALHADEFF (referred to below individually and collectively as "Borrower");
BRIAZZ, INC. (referred to below as "Grantor"); and U.S. Bank National
Association (referred to below as "Lender"). For valuable consideration, Grantor
grants to Lender a security interest in the Collateral to secure the
indebtedness and agrees that Lender shall have the rights stated in this
Agreement with respect to the Collateral, in addition to all other rights which
Lender may have by law.

DEFINITIONS.  The following words shall have the following meanings when used in
this Agreement. Terms not otherwise defined in this Agreement shall have the
meanings attributed to such terms in the Uniform Commercial Code. All references
to dollar amounts shall mean amounts in lawful money of the United States of
America.

     Agreement.  The word "Agreement" means this Commercial Security Agreement,
     as this Commercial Security Agreement may be amended or modified from time
     to time, together with all exhibits and schedules attached to this
     Commercial Security Agreement from time to time.

     Borrower.  The word "Borrower" means each and every person or entity
     signing the Note, including without limitation BRIAZZ, INC. and VICTOR
     ALHADEFF.

     Collateral.  The word "Collateral' means the following described property
     of Grantor, whether now owned or hereafter acquired, whether now existing
     or hereafter arising, and wherever located:

          All inventory, chattel paper, accounts, equipment and general
     intangibles in addition, the word "Collateral" includes all the following,
     whether now owned or hereafter acquired, whether now existing or hereafter
     arising, and wherever located:

          (a) All attachments, accessions, accessories, tools, parts, supplies,
          increases, and additions to and all replacements of and substitutions
          for any property described above.

          (b) All products and produce of any of the property described in this
          Collateral section.

          (c) All accounts, general intangibles, instruments, rents, monies,
          payments, and all other rights, arising out of a sale, lease, or other
          disposition of any of the property described in this Collateral
          section.

          (d) All proceeds (including insurance proceeds) from the sale,
          destruction, loss, or other disposition of any of the property
          described in this Collateral section.

          (e) All records and data relating to any of the property described in
          this Collateral section, whether in the form of a writing, photograph,
          microfilm, microfiche, or electronic media, together with all of
          Grantors right, title, and interest in and to all computer software
          required to utilize, create, maintain, and process any such records or
          data on electronic media.

     Event of Default.  The words "Event of Default" mean and include without
     limitation any of the Events of Default set forth below in the section
     titled "Events of Default."

     Grantor.  The word "Grantor" means BRIAZZ, INC. Any Grantor who signs this
     Agreement, but does not sign the Note, is signing this Agreement only to
     grant a security interest in Grantors interest in the Collateral to Lender
     and is not personally liable under the Note except as otherwise provided by
     contract or law (e.g., personal liability under a guaranty or as a surety).

     Guarantor.  The word "Guarantor" means and includes without limitation each
     and all of the guarantors, sureties, and accommodation parties in
     connection with the indebtedness.

     Indebtedness.  The word "indebtedness" means the indebtedness evidenced by
     the Note, including all principal and interest, together with all other
     indebtedness and costs and expenses for which Grantor or Borrower is
     responsible under this Agreement or under any of the Related Documents. In
     addition, the word "indebtedness" includes all other obligations, debts and
     liabilities, plus interest thereon, of Borrower, or any one or more of
     them, to Lender, as well as all claims by Lender against Borrower, or any
     one or more of them, whether existing now or later; whether they are
     voluntary or involuntary, due or not due, direct or indirect, absolute or
     contingent, liquidated or unliquidated; whether Borrower may be liable
     individually or jointly with others; whether Borrower may be obligated as
     guarantor, surety, accommodation party or otherwise; whether recovery upon
     such indebtedness may be or hereafter may become barred by any statute of
     limitations; and whether such indebtedness may be or hereafter may become
     otherwise unenforceable.

     Lender.  The word "Lender" means U.S. Bank National Association, its
     successors and assigns.

     Note.  The word "Note" means the note or credit agreement dated December
     30, 1999, in the principal amount of $2,000,000.00 from Borrower to Lender,
     together with all renewals of, extensions of, modifications of,
     refinancings of, consolidations of and substitutions for the note or credit
     agreement.

     Related Documents.  The words "Related Documents" mean and include without
     limitation all promissory notes, credit agreements, loan agreements,
     environmental agreements, guaranties, security agreements, mortgages, deeds
     of trust, and all other instruments, agreements and documents, whether now
     or hereafter existing, executed in connection with the indebtedness.

BORROWER'S WAIVERS AND RESPONSIBILITIES.  Except as otherwise required under
this Agreement or by applicable law, (a) Borrower agrees that Lender need not
tell Borrower about any action or inaction Lender takes in connection with this
Agreement; (b) Borrower assumes the responsibility of being and keeping informed
about the Collateral; and (c) Borrower waives any defenses that may arise
because of any action or inaction of Lender, including without limitation any
failure of Lender to realize upon the Collateral or any delay by Lender in
realizing upon the Collateral; and Borrower agrees to remain liable under the
Note no matter what action Lender takes or fails to take under this Agreement.

GRANTOR'S REPRESENTATIONS AND WARRANTIES.  Grantor warrants that:  (a) this
Agreement is executed at Borrower's request and not at the request of Lender;
(b) Grantor has the full right, power and authority to enter into this Agreement
and to pledge the Collateral to Lender; (c) Grantor has established adequate
means of obtaining from Borrower on a continuing basis information about
Borrower's financial condition; and (d) Lender has made no representation to
Grantor about Borrower or Borrower's creditworthiness.

GRANTOR'S WAIVERS.  Grantor waives all requirements of presentment, protest,
demand, and notice of dishonor or non-payment to Grantor, Borrower, or any other
party to the indebtedness or the Collateral. Lender may do any of the following
with respect to any obligation of any Borrower, without first obtaining the
consent of Grantor: (a) grant any extension of the time for any payment, (b)
grant any renewal, (c) permit any modification of payment terms or other terms,
or (d) exchange or release any Collateral or other security. No such act or
failure to act shall affect Lender's rights against Grantor or the Collateral.

If now or hereafter (a) Borrower shall be or become insolvent, and (b) the
Indebtedness shall not at all times until paid be fully secured by collateral
pledged by Borrower, Grantor hereby forever waives and relinquishes in favor of
Lender and Borrower, and their respective successors, any claim or right to
payment Grantor may not have or hereafter have or acquire against Borrower, by
subrogation or otherwise, so that at no time shall Grantor be or become a
"creditor" of Borrower within the meaning of 11 U.S.C. section 547(b), or any
successor provision of the Federal bankruptcy laws.

RIGHT TO SETOFF.  Grantor hereby grants Lender a contractual security interest
in and hereby assigns, conveys, delivers, pledges, and transfers all of
Grantor's right, title and interest in and to Grantor's accounts with Lender
(whether checking, savings, or some other account), including all accounts held
jointly with someone else and all accounts Grantor may open in the future,
excluding, however, all IRA and Keogh accounts, and all trust accounts for which
the grant of a security interest would be prohibited by law. Grantor authorizes
Lender, to the extent permitted by applicable law, to charge or setoff all
indebtedness against any and all such accounts, and at Lender's option, to
administratively freeze all such accounts to allow Lender to protect Lender's
charge and setoff rights provided in this paragraph.
<PAGE>

12-30-1999               COMMERCIAL SECURITY AGREEMENT                    Page 2
Loan No. 733/26                   (Continued)

================================================================================

OBLIGATIONS OF GRANTOR.  Grantor warrants and covenants to Lender as follows:

     Organization.  Grantor is a corporation which is duly organized, validly
     existing, and in good standing under the laws of the State of Washington.
     Grantor has its chief executive office at 1011 SW KLICKITAT WAY, SUITE 202
     SEATTLE, WA 98134. Grantor will notify Lander of any change in the location
     of Grantor's chief executive office.

     Authorization.  The execution, delivery, and performance of this Agreement
     by Grantor have been duly authorized by all necessary action by Grantor and
     do not conflict with, result in a violation of, or constitute a default
     under (a) any provision of its articles of incorporation or organization,
     or bylaws, or any agreement or other instrument binding upon Grantor or (b)
     any law, governmental regulation, court decree, or order applicable to
     Grantor.

     Perfection of Security interest.  Grantor agrees to execute such financing
     statements and to take whatever other actions are requested by Lender to
     perfect and continue Lenders security interest in the Collateral. Upon
     request of Lender, Grantor will deliver to Lender any and all of the
     documents evidencing or constituting the Collateral, and Grantor will note.
     Lender's interest upon any and all chattel paper if not delivered to Lender
     for possession by Lender. Grantor hereby appoints Lender as its irrevocable
     attorney-in-fact for the purpose of executing any documents necessary to
     perfect or to continue the security interest granted in this Agreement.
     Lender may at any time, and without further authorization from Grantor,
     file a carbon, photographic or other reproduction of any financing
     statement or of this Agreement for use as a financing statement. Grantor
     will reimburse Lender for all expenses for the perfection and the
     continuation of the perfection of Lenders security interest in the
     Collateral. Grantor promptly will notify Lender before any change in
     Grantor's name including any change to the assumed business names of
     Grantor. This is a continuing Security Agreement and will continue in
     effect even though all or any part of the indebtedness is paid in full and
     even though for a period of time Borrower may not be indebted to Lender.

     No Violation.  The execution and delivery of this Agreement will not
     violate any law or agreement governing Grantor or to which Grantor is a
     party, and its certificate or articles of Incorporation and bylaws do not
     prohibit any term or condition of this Agreement.

     Enforceability of Collateral.  To the extent the Collateral consists of
     accounts, chattel paper, or general intangibles, the Collateral is
     enforceable in accordance with its terms, is genuine, and complies with
     applicable laws concerning form, content and manner of preparation and
     execution, and all persons appearing to be obligated on the Collateral have
     authority and capacity to contract and are in fact obligated as they appear
     to be on the Collateral. At the time any account becomes subject to a
     security interest in favor of Lender, the account shall be a good and valid
     account representing an undisputed, bona fide indebtedness incurred by the
     account debtor, for merchandise hold subject to delivery instructions or
     theretofore shipped or delivered pursuant to a contract of sale, or for
     services theretofore performed by Grantor with or for the account debtor,
     there shall be no setoffs or counterclaims against any such account; and no
     agreement under which any deductions or discounts may be claimed shall have
     been made with the account debtor except those disclosed to Lender in
     writing.

     Location of the Collateral.  Grantor, upon request of Lender, will deliver
     to Lender in form satisfactory to Lender a schedule of real properties and
     Collateral locations relating to Grantor's operations, including without
     limitation the following: (a) all real property owned or being purchased by
     Grantor; (b) all real property being rented or leased by Grantor; (c) all
     storage facilities owned, rented, leased, or being used by Grantor; and (d)
     all other properties where Collateral is or may be located. Except in the
     ordinary course of its business, Grantor shall not remove the Collateral
     from its existing locations without the prior written consent of Lender.

     Removal of Collateral.  Grantor shall keep the Collateral (or to the extent
     the Collateral consists of intangible property such as accounts, the
     records concerning the Collateral) at Grantor's address shown above, or at
     such other locations as are acceptable to Lender. Except in the ordinary
     course of its business, including the sales of inventory, Grantor shall not
     remove the Collateral from its existing locations without the prior written
     consent of Lender. To the extent that the Collateral consists of vehicles,
     or other titled property, Grantor shall not take or permit any action which
     would require application for certificates of title for the vehicles
     outside the State of Washington, without the prior written consent of
     Lender.

     Transactions Involving Collateral.  Except for inventory sold or accounts
     collected in the ordinary course of Grantors business, Grantor shall not
     sell, offer to sell, or otherwise transfer or dispose of the Collateral.
     While Grantor is not in default under this Agreement, Grantor may sell
     inventory, but only in the ordinary course of its business and only to
     buyers who qualify as a buyer in the ordinary course of business. A sale in
     the ordinary course of Grantors business does not include a transfer in
     partial or total satisfaction of a debt or any bulk sale. Grantor shall not
     pledge, mortgage, encumber or otherwise permit the Collateral to be subject
     to any lien, security interest, encumbrance, or charge, other than the
     security interest provided for in this Agreement, without the prior written
     consent of Lender. This includes security interests even if junior in right
     to the security interests granted under this Agreement. Unless waived by
     Lender, all proceeds from any disposition of the Collateral (for whatever
     reason) shall be held in trust for Lender and shall not be commingled with
     any other funds; provided however, this requirement shall not constitute
     consent by Lender to any sale or other disposition. Upon receipt, Grantor
     shall immediately deliver any such proceeds to Lender.

     Title.  Grantor represents and warrants to Lender that it holds good and
     marketable title to the Collateral, free and clear of all liens and
     encumbrances except for the lien of this Agreement. No financing statement
     covering any of the Collateral is on file in any public office other than
     those which reflect the security interest created by this Agreement or to
     which Lender has specifically consented. Grantor shall defend Lenders
     rights in the Collateral against the claims and demands of all other
     persons.

     Collateral Schedules and Locations.  As often as Lender shall require, and
     insofar as the Collateral consists of accounts and general intangibles,
     Grantor shall deliver to Lender schedules of such Collateral, including
     such information as Lender may require, including without limitation names
     and addresses of account debtors and agings of accounts and general
     intangibles. Insofar as the Collateral consists of inventory and equipment,
     Grantor shall deliver to Lender, as often as Lender shall require, such
     lists, descriptions, and designations of such Collateral as Lender may
     require to identify the nature, extent, and location of such Collateral.
     Such information shall be submitted for Grantor and each of its
     subsidiaries or related companies.

     Maintenance and inspection of Collateral.  Grantor shall maintain all
     tangible Collateral in good condition and repair. Grantor will not commit
     or permit damage to or destruction of the Collateral or any part of the
     Collateral. Lender and its designated representatives and agents shall have
     the right at all reasonable times to examine, inspect, and audit the
     Collateral wherever located. Grantor shall immediately notify Lander of all
     cases involving the return, rejection, repossession, loss or damage of or
     to any Collateral; of any request for credit or adjustment or of any other
     dispute arising with respect to the Collateral; and generally of all
     happenings and events affecting the Collateral or the value or the amount
     of the Collateral.

     Taxes, Assessments and Liens.  Grantor will pay when due all taxes,
     assessments and liens upon the Collateral, its use or operation, upon this
     Agreement, upon any promissory note or notes evidencing the indebtedness,
     or upon any of the other Related Documents. Grantor may withhold any such
     payment or may elect to contest any lien if Grantor is in good faith
     conducting an appropriate proceeding to contest the obligation to pay and
     so long as Lender's interest in the Collateral is not jeopardized in
     Lenders sole opinion. If the Collateral is subjected to a lien which is not
     discharged within fifteen (15) days, Grantor shall deposit with Lender
     cash, a sufficient corporate surety bond or other security satisfactory to
     Lender in an amount adequate to provide for the discharge of the lien plus
     any interest, costs, attorneys' fees or other charges that could accrue as
     a result of foreclosure or sale of the Collateral. In any contest Grantor
     shall defend itself and Lender and shall satisfy any final adverse judgment
     before enforcement against the Collateral. Grantor shall name Lender as an
     additional obliges under any surety bond furnished in the contest
     proceedings.

     Compliance With Governmental Requirements.  Grantor shall comply promptly
     with all laws, ordinances, rules and regulations of all governmental
     authorities, now or hereafter in effect, applicable to the ownership,
     production, disposition, or use of the Collateral. Grantor may contest in
     good faith any such law, ordinance or regulation and withhold compliance
     during any proceeding, including appropriate appeals, so long as Lender's
     interest in the Collateral, in Lender's opinion, is not jeopardized.

     Hazardous Substances.  Grantor represents and warrants that the collateral
     never has been, and never will be so long as this Agreement remains a lien
     on the Collateral, used for the generation, manufacture, storage,
     transportation, treatment, disposal, release or threatened release of any
     hazardous waste or substances, as those terms are defined in the
     Comprehensive Environmental Response, Compensation, and Liability Act of
     1980, as amended, 42 U.S.C. Section 9601, et seq. ("CERCLA"), the Superfund
     Amendments and Reauthorization Act of 1986 Pub. L. No. 99-499 ("SARA"), the
     Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq.,
     the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et
     seq., or other applicable state or Federal laws, rules, or regulations
     adopted pursuant to any of the foregoing. The terms "hazardous waste" and
     "hazardous substance" shall also include, without limitation, petroleum and
     petroleum by-products or any fraction thereof and asbestos. The
     representations and warranties contained herein are based on Grantor's due
     diligence in investigating the Collateral for hazardous wastes and
     substances. Grantor hereby (a) releases and waives any future claims
     against Lender for indemnity or contribution in the event Grantor becomes
     liable for cleanup or other costs under any such laws, and (b) agrees to
     indemnify and hold harmless Lender against any and all claims and losses
     resulting from a breach of this provision of this Agreement. This
     obligation to indemnify shall survive the payment of the Indebtedness and
     the satisfaction of this Agreement.

     Maintenance of Casualty Insurance. Grantor shall procure and maintain all
     risks insurance, including without limitation fire, theft and liability
     coverage together with such other insurance as Lender may require with
     respect to the Collateral, in form, amounts, coverages and basis reasonably
     acceptable to Lender and issued by a company or companies reasonably
     acceptable to Lender. Grantor, upon request of Lender, will deliver to
     Lender from time to time the policies or certificates of insurance in form
     satisfactory to Lender, including stipulations that coverages will not be
     cancelled or diminished without at least ten (10) days' prior written
     notice to Lender and not including any disclaimer of the insurer's
     liability, for failure to give such a notice. Each insurance policy also
     shall include an endorsement providing
<PAGE>

12-30-1999               COMMERCIAL SECURITY AGREEMENT                    Page 3
Loan No. 733/26                   (Continued)

================================================================================

     that coverage in favor of Lender will not be impaired in any way by any
     act, omission or default of Grantor or any other person. In connection with
     all policies covering assets in which Lender holds or is offered a security
     interest, Grantor will provide Lender with such loss payable or other
     endorsements as Lender may require. If Grantor at any time falls to obtain
     or maintain any insurance as required under this Agreement, Lender may (but
     shall not be obligated to) obtain such insurance as Lender deems
     appropriate, including if it so chooses "single interest Insurance," which
     will cover only Lender's interest in the Collateral.

     Application of Insurance Proceeds.  Grantor shall promptly notify Lender of
     any loss or damage to the Collateral. Lender may make proof of loss if
     Grantor falls to do so within fifteen (15) days of the casualty. All
     proceeds of any insurance on the Collateral, including accrued proceeds
     thereon, shall be held by Lender as part of the Collateral. If Lender
     Consents to repair or replacement of the damaged or destroyed Collateral,
     Lender shall, upon satisfactory proof of expenditure, pay or reimburse
     Grantor from the proceeds for the reasonable cost of repair or restoration.
     If Lender does not consent to repair or replacement of the Collateral,
     Lender shall retain a sufficient amount of the proceeds to pay all of the
     indebtedness, and shall pay the balance to Grantor. Any proceeds which have
     not been disbursed within six (6) months after their receipt and which
     Grantor has not committed to the repair or restoration of the Collateral
     shall be used to prepay the indebtedness.

     Insurance Reserves.  Lender may require Grantor to maintain with Lender
     reserves for payment of insurance premiums, which reserves shall be created
     by monthly payments from Grantor of a sum estimated by Lender to be
     sufficient to produce, at least fifteen (15) days before the premium due
     date, amounts at least equal to the insurance premiums to be paid. If
     fifteen (15) days before payment is due, the reserve funds are
     insufficient, Grantor shall upon demand pay any deficiency to Lender. The
     reserve funds shall be held by Lender as a general deposit and shall
     constitute a non-interest-bearing account which Lender may satisfy by
     payment of the insurance premiums required to be paid by Grantor as they
     become due. Lender does not hold the reserve funds in trust for Grantor,
     and Lender is not the agent of Grantor for payment of the insurance
     premiums required to be paid by Grantor. The responsibility for the payment
     of premiums shall remain Grantor's sole responsibility.

     Insurance Reports.  Grantor, upon request of Lender, shall furnish to
     Lender reports on each existing policy of insurance showing such
     information as Lender may reasonably request including the following: (a)
     the name of the insurer; (b) the risks insured; (c) the amount of the
     policy; (d) the property insured; (e) the then current value on the basis
     of which insurance has been obtained and the manner of determining that
     value; and (f) the expiration date of the policy. In addition, Grantor
     shall upon request by Lender (however not more often than annually) have an
     independent appraiser satisfactory to Lender determine, as applicable, the
     cash value or replacement cost of the Collateral.

GRANTOR'S RIGHT TO POSSESSION AND TO COLLECT ACCOUNTS.  Until default and except
as otherwise provided below with respect to accounts, Grantor may have
possession of the tangible personal property and beneficial use of all the
Collateral and may use it in any lawful manner not inconsistent with this
Agreement or the Related Documents, provided that Grantors right to possession
and beneficial use shall not apply to any Collateral where possession of the
Collateral by Lender is required by law to perfect Lender's security interest in
such Collateral. Until otherwise notified by Lender, Grantor may collect any of
the Collateral consisting of accounts. At any time and even though no Event of
Default exists, Lender may exercise its rights to collect the accounts and to
notify account debtors to make payments directly to Lender for application to
the indebtedness. If Lender at any time has possession of any Collateral,
whether before or after an Event of Default, Lender shall be deemed to have
exercised reasonable care in the custody and preservation of the Collateral if
Lender takes such action for that purpose as Grantor shall request or as Lender,
in Lender's sole discretion, shall deem appropriate under the circumstances, but
failure to honor any request by Grantor shall not of itself be deemed to be a
failure to exercise reasonable care. Lender shall not be required to take any
steps necessary to preserve any rights in the Collateral against prior parties,
nor to protect, preserve or maintain any security interest given to secure the
indebtedness.

EXPENDITURES BY LENDER.  If not discharged or paid when due, Lender may (but
shall not be obligated to) discharge or pay any amounts required to be
discharged or paid by Grantor under this Agreement, including without limitation
all taxes, liens, security interests, encumbrances, and other claims, at any
time levied or placed on the Collateral. Lender also may (but shall not be
obligated to) pay all costs for insuring, maintaining and preserving the
Collateral. All such expenditures incurred or paid by Lender for such purposes
will then bear interest at the rate charged under the Note from the date
incurred or paid by Lender to the data of repayment by Grantor. All such
expenses shall become a part of the indebtedness and, at Lender's option, will
(a) be payable on demand, (b) be added to the balance of the Note and be
apportioned among and be payable with any installment payments to become due
during either (i) the term of any applicable insurance policy or (ii) the
remaining term of the Note, or (c) be treated as a balloon payment which will be
due and payable at the Note's maturity. This Agreement also will secure payment
of these amounts. Such right shall be in addition to all other rights and
remedies to which Lender may be entitled upon the occurrence of an Event of
Default.

EVENTS OF DEFAULT.  Each of the following shall constitute an Event of Default
under this Agreement:

     Default on Indebtedness.  Failure of Borrower to make any payment when due
     on the indebtedness.

     Other Defaults.  Failure of Grantor to comply with or to perform any other
     term, obligation, covenant or condition contained in this Agreement or in
     any of the Related Documents or in any other note, security agreement,
     lease agreement or lease schedule, loan agreement or other agreement,
     whether now existing or hereafter made, between Grantor and U.S. Bancorp or
     any direct or Indirect subsidiary of U.S. Bancorp.

     False Statements.  Any warranty, representation or statement made or
     furnished to Lender by or on behalf of Grantor or Borrower under this
     Agreement, the Note or the Related Documents is false or misleading in any
     material respect, either now or at the time made or furnished.

     Defective Collateralization.  This Agreement or any of the Related
     Documents ceases to be in full force and effect (including failure of any
     collateral documents to create a valid and perfected security interest or
     lien) at any time and for any reason.

     Insolvency.  The dissolution or termination of Grantor or Borrowers
     existence as a going business, the Insolvency of Grantor or Borrower, the
     appointment of a receiver for any part of Grantor or Borrower's property,
     any assignment for the benefit of creditors, any type of creditor workout,
     or the commencement of any proceeding under any bankruptcy or insolvency
     laws by or against Grantor or Borrower.

     Creditor or Forfeiture Proceedings.  Commencement of foreclosure or
     forfeiture proceedings, whether by judicial proceeding, self-help,
     repossession or any other method, by any creditor of Grantor or Borrower or
     by any governmental agency against the Collateral or any other collateral
     securing the indebtedness. This includes a garnishment of any of Grantor or
     Borrowers deposit accounts with Lender.

     Events Affecting Guarantor.  Any of the preceding events occurs with
     respect to any Guarantor of any of the indebtedness or such Guarantor dies
     or becomes incompetent.

     Insecurity.  Lender, in good faith, deems itself insecure.

RIGHTS AND REMEDIES ON DEFAULT.  If an Event of Default occurs under this
Agreement, at any time thereafter, Lender shall have all the rights of a secured
party under the Washington Uniform Commercial Code. In addition and without
limitation, Lender may exercise any one or more of the following rights and
remedies:

     Accelerate Indebtedness.  Lender may declare the entire indebtedness,
     including any prepayment penalty which Borrower would be required to pay,
     immediately due and payable, without notice.

     Assemble Collateral.  Lender may require Grantor to deliver to Lender all
     or any portion of the Collateral and any and all certificates of title and
     other documents relating to the Collateral. Lender may require Grantor to
     assemble the Collateral and make it available to Lender at a place to be
     designated by Lender. Lender also shall have full power to enter upon the
     property of Grantor to take possession of and remove the Collateral. If the
     Collateral contains other goods not covered by this Agreement at the time
     of repossession, Grantor agrees Lender may take such other goods, provided
     that Lender makes reasonable efforts to return them to Grantor after
     repossession.

     Sell the Collateral.  Lender shall have full power to sell, lease,
     transfer, or otherwise deal with the Collateral or proceeds thereof in its
     own name or that of Grantor. Lender may sell the Collateral at public
     auction or private sale. Unless the Collateral threatens to decline
     speedily in value or is of a type customarily sold on a recognized market,
     Lender will give Grantor reasonable notice of the time after which any
     private sale or any other intended disposition of the Collateral is to be
     made. The requirements of reasonable notice shall be met if such notice is
     given at least ten (10) days before the time of the sale or disposition.
     All expenses relating to the disposition of the Collateral, including
     without limitation the expenses of retaking, holding, insuring, preparing
     for sale and selling the Collateral, shall become a part of the
     indebtedness secured by this Agreement and shall be payable on demand, with
     interest at the Note rate from date of expenditure until repaid.

     Appoint Receiver.  To the extent permitted by applicable law, Lender shall
     have the following rights and remedies regarding the appointment of a
     receiver: (a) Lender may have a receiver appointed as a matter of right,
     (b) the receiver may be an employee of Lender and may serve without bond,
     and (c) all fees of the receiver and his or her attorney shall become part
     of the indebtedness secured by this Agreement and shall be payable on
     demand, with interest at the Note rate from date of expenditure until
     repaid.

     Collect Revenues, Apply Accounts.  Lender, either itself or through a
     receiver, may collect the payments, rents, income, and revenues from the
     Collateral. Lender may at any time in its discretion transfer any
     Collateral into its own name or that of its nominee and receive the
     payments, rents, income, and revenues therefrom and hold the same as
     security for the indebtedness or apply it to payment of the indebtedness in
     such order of preference as Lender may determine. Insofar as the Collateral
     consists of accounts, general intangibles, insurance policies, instruments,
     chattel paper, choses in action, or similar property, Lender may demand,
     collect, receipt for, settle, compromise, adjust, sue for, foreclose, or
     realize on the Collateral as Lender may determine, whether or not
     indebtedness or Collateral is then due. For these purposes, Lender may, on
     behalf of and in the name of Grantor, receive, open and dispose of mail
     addressed to Grantor; change any address to which mail and payments are to
     be sent; and endorse notes, checks, drafts, money orders, documents of
     title, instruments and items pertaining to payment, shipment or [ILLEGIBLE]
<PAGE>

12-30-1999               COMMERCIAL SECURITY AGREEMENT                    Page 4
Loan No. 733/26                   (Continued)

================================================================================

     Lender.

     Obtain Deficiency.  If Lender chooses to sell any or all of the Collateral,
     Lender may obtain a judgment against Borrower for any deficiency remaining
     on the indebtedness due to Lender after application of all amounts received
     from the exercise of the rights provided in this Agreement. Borrower shall
     be liable for a deficiency even if the transaction described in this
     subsection is a sale of accounts or chattel paper.

     Other Rights and Remedies.  Lender shall have all the rights and remedies
     of a secured creditor under the provisions of the Uniform Commercial Code,
     as may be amended from time to time. In addition, Lender shall have and may
     exercise any or all other rights and remedies it may have available at law,
     in equity, or otherwise.

     Cumulative Remedies.  All of Lenders rights and remedies, whether evidenced
     by this Agreement or the Related Documents or by any other writing, shall
     be cumulative and may be exercised singularly or concurrently. Election by
     Lender to pursue any remedy shall not exclude pursuit of any other remedy,
     and an election to make expenditures or to take action to perform an
     obligation of Grantor or Borrower under this Agreement, after Grantor or
     Borrowers failure to perform, shall not affect Lenders right to declare a
     default and to exercise its remedies.

MISCELLANEOUS PROVISIONS.  The following miscellaneous provisions are a part of
this Agreement:

     Amendments.  This Agreement, together with any Related Documents,
     constitutes the entire understanding and agreement of the parties as to the
     matters set forth in this Agreement. No alteration of or amendment to this
     Agreement shall be effective unless given in writing and signed by the
     party or parties sought to be charged or bound by the alteration or
     amendment.

     Applicable Law.  This Agreement has been delivered to Lender and accepted
     by Lender in the State of Washington. If there is a lawsuit, Grantor and
     Borrower agree upon Lender's request to submit to the jurisdiction of the
     courts of King County, the State of Washington. Subject to the provisions
     on arbitration, this Agreement shall be governed by and construed in
     accordance with the laws of the State of Washington.

     Arbitration.  Lender and Grantor and Borrower agree that all disputes,
     claims and controversies between them, whether Individual, joint, or class
     in nature, arising from this Agreement or otherwise, including without
     limitation contract and tort disputes, shall be arbitrated pursuant to the
     Rules of the American Arbitration Association, upon request of either
     party. No act to take or dispose of any Collateral shall constitute a
     waiver of this arbitration agreement or be prohibited by this arbitration
     agreement. This includes, without irritation, obtaining injunctive relief
     or a temporary restraining order; invoking a power of sale under any dead
     of trust or mortgage; obtaining a writ of attachment or imposition of a
     receiver; or exercising any rights relating to personal property, including
     taking or disposing of such property with or without judicial process
     pursuant to Article 9 of the Uniform Commercial Code. Any disputes, claims,
     or controversies concerning the lawfulness or reasonableness of any act, or
     exercise of any right, concerning any Collateral, including any claim to
     rescind, reform, or otherwise modify any agreement relating to the
     Collateral, shall also be arbitrated, provided however that no arbitrator
     shall have the right or the power to enjoin or restrain any act of any
     party. Judgment upon any award rendered by any arbitrator may be entered in
     any court having jurisdiction. Nothing in this Agreement shall preclude any
     party from seeking equitable relief from a court of competent jurisdiction.
     The statute of limitations, estoppel, waiver, laches, and similar doctrines
     which would otherwise be applicable in an action brought by a party shall
     be applicable in any arbitration proceeding, and the commencement of an
     arbitration proceeding shall be deemed the commencement of an action for
     these purposes. The Federal Arbitration Act shall apply to the
     construction, interpretation, and enforcement of this arbitration
     provision.

     Attorneys' Fees; Expenses.  Grantor and Borrower agree to pay upon demand
     all of Lenders costs and expenses, including attorneys' fees and Lenders
     legal expenses, incurred in connection with the enforcement of this
     Agreement. Lender may pay someone else to help enforce this Agreement, and
     Grantor and Borrower shall pay the costs and expenses of such enforcement.
     Costs and expenses include Lenders attorneys' fees and legal expenses
     whether or not there is a lawsuit, including attorneys' fees and legal
     expenses for bankruptcy proceedings (and including efforts to modify or
     vacate any automatic stay or Injunction), appeals, and any anticipated
     post-judgment collection services. Grantor and Borrower also shall pay all
     court costs and such additional fees as may be directed by the court.

     Caption Headings.  Caption headings in this Agreement are for convenience
     purposes only and are not to be used to interpret or define the provisions
     of this Agreement.

     Notices.  All notices required to be given under this Agreement shall be
     given in writing, may be sent by telefacsimile (unless otherwise required
     by law), and shall be effective when actually delivered or when deposited
     with a nationally recognized overnight courier or deposited in the United
     States mail, first class, postage prepaid, addressed to the party to whom
     the notice is to be given at the address shown above. Any party may change
     its address for notices under this Agreement by giving formal written
     notice to the other parties, specifying that the purpose of the notice is
     to change the party's address. To the extent permitted by applicable law,
     if there is more than one Grantor or Borrower, notice to any Grantor or
     Borrower will constitute notice to all Grantor and Borrowers. For notice
     purposes, Grantor and Borrower will keep Lender informed at all times of
     Grantor and Borrowers current address(es).

     Power of Attorney.  Grantor hereby appoints Lender as its true and lawful
     attorney-in-fact, irrevocably, with full power of substitution to do the
     following: (a) to demand, collect, receive, receipt for, sue and recover
     all sums of money or other property which may now or hereafter become due,
     owing or payable from the Collateral; (b) to execute, sign and endorse any
     and all claims, instruments, receipts, checks, drafts or warrants issued in
     payment for the Collateral; (c) to settle or compromise any and all claims
     arising under the Collateral, and, in the place and stead of Grantor, to
     execute and deliver its release and settlement for the claim; and (d) to
     file any claim or claims or to take any action or institute or take part in
     any proceedings, either in its own name or in the name of Grantor, or
     otherwise, which in the discretion of Lender may seem to be necessary or
     advisable. This power is given as security for the indebtedness, and the
     authority hereby conferred is and shall be irrevocable and shall remain in
     full force and effect until renounced by Lender.

     Preference Payments.  Any monies Lender pays because of an asserted
     preference claim in Borrowers bankruptcy will become a part of the
     indebtedness and, at Lenders option, shall be payable by Borrower as
     provided above in the "EXPENDITURES BY LENDER" paragraph.

     Severability.  If a court of competent jurisdiction finds any provision of
     this Agreement to be invalid or unenforceable as to any person or
     circumstance, such finding shall not render that provision invalid or
     unenforceable as to any other persons or circumstances. If feasible, any
     such offending provision shall be deemed to be modified to be within the
     limits of enforceability or validity; however, if the offending provision
     cannot be so modified, it shall be stricken and all other provisions of
     this Agreement in all other respects shall remain valid and enforceable.

     Successor Interests.  Subject to the limitations set forth above on
     transfer of the Collateral, this Agreement shall be binding upon and inure
     to the benefit of the parties, their successors and assigns.

     Waiver.  Lender shall not be deemed to have waived any rights under this
     Agreement unless such waiver is given in writing and signed by Lender. No
     delay or omission on the part of Lender in exercising any right shall
     operate as a waiver of such right or any other right. A waiver by Lender of
     a provision of this Agreement shall not prejudice or constitute a waiver of
     Lender's right otherwise to demand strict compliance with that provision or
     any other provision of this Agreement. No prior waiver by Lender, nor any
     course of dealing between Lender and Grantor, shall constitute a waiver of
     any of Lendees rights or of any of Grantors obligations as to any future
     transactions. Whenever the consent of Lender is required under this
     Agreement, the granting of such consent by Lender in any Instance shall not
     constitute continuing consent to subsequent instances where such consent is
     required and in all cases such consent may be granted or withheld in the
     sole discretion of Lender.

     Waiver of Co-obligor's Rights.  If more than one person is obligated for
     the indebtedness, Borrower irrevocably waives, disclaims and relinquishes
     all claims against such other person which Borrower has or would otherwise
     have by virtue of payment of the indebtedness or any part thereof,
     specifically including but not limited to all rights of Indemnity,
     contribution or exoneration.
<PAGE>

12-30-1999               COMMERCIAL SECURITY AGREEMENT                    Page 5
Loan No. 733/26                   (Continued)

================================================================================

BORROWER AND GRANTOR ACKNOWLEDGE HAVING READ ALL THE PROVISIONS OF THIS
COMMERCIAL SECURITY AGREEMENT, AND BORROWER AND GRANTOR AGREE TO ITS TERMS.
THIS AGREEMENT IS DATED DECEMBER 30,1999.

BORROWER:

BRIAZZ, INC.

By:/s/ VICTOR ALHADEFF
   ----------------------------------
   VICTOR ALHADEFF, CEO

By:/s/ VICTOR ALHADEFF
   ----------------------------------
   VICTOR ALHADEFF, Co-borrower

GRANTOR:

BRIAZZ, INC.

By:/s/ VICTOR ALHADEFF
   ----------------------------------
   VICTOR ALHADEFF, CEO

LENDER:

U.S. Bank National Association

By:/s/ MARYANN CUSSEY, Vice President
   ----------------------------------
   Authorized Officer

================================================================================

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