Exhibit 10.44




 





 


NEW WORLD RESTAURANT GROUP, INC.


 


and


 


BET ASOCIATES, L.P.


 


STANDSTILL AGREEMENT


 


 


June 17, 2003




 





 

















 


Table of Contents


 


	
  1.

  	
  PAYMENT DEFAULT; WARRANT ISSUANCE.

  
	
   

  	
   

  
	
  2.

  	
  REPRESENTATIONS AND WARRANTIES BY THE
  COMPANY.

  
	
   

  	
  2.1

  	
  Organization and Authority of the Company.

  
	
   

  	
  2.2

  	
  Authority of the Company.

  
	
   

  	
  2.3

  	
  No Conflicts; Consents of Third Parties.

  
	
   

  	
   

  	
   

  
	
  3.

  	
  REPRESENTATIONS AND WARRANTIES BY BET.

  
	
   

  	
  3.1

  	
  Organization and Authority of BET.

  
	
   

  	
  3.2

  	
  Authority of BET.

  
	
   

  	
  3.3

  	
  No Conflicts; Consents of Third Parties.

  
	
   

  	
   

  	
   

  
	
  4.

  	
  FURTHER AGREEMENTS OF THE PARTIES.

  
	
   

  	
  4.1

  	
  Fees and Expenses.

  
	
   

  	
  4.2

  	
  Notice of Breaches.

  
	
   

  	
  4.3

  	
  Default Interest.

  
	
   

  	
  4.4

  	
  Further Assurances.

  
	
   

  	
   

  	
   

  
	
  5.

  	
  MISCELLANEOUS.

  
	
   

  	
  5.1

  	
  Entire Agreement.

  
	
   

  	
  5.2

  	
  Headings.

  
	
   

  	
  5.3

  	
  Governing
  Law.

  
	
   

  	
  5.4

  	
  Separability.

  
	
   

  	
  5.5

  	
  Waiver.

  
	
   

  	
  5.6

  	
  Assignment.

  
	
   

  	
  5.7

  	
  Jurisdiction.

  
	
   

  	
  5.8

  	
  No Third Party Beneficiaries.

  
	
   

  	
  5.9

  	
  Counterparts.

  



 

















 


STANDSTILL AGREEMENT


 


June 17, 2003


 


The parties to
this agreement are New World Restaurant Group, Inc., a Delaware corporation
(the “Company”), and BET Associates, L.P., a Delaware limited partnership
(“BET”).


 


RECITALS


 


On March 30,
2002, the Company entered into a Loan and Security Agreement (the “Loan and
Security Agreement”) with BET, which provides for a $7.5 million revolving loan
facility.  The facility is secured by
substantially all of the Company’s assets. 
The facility was to expire on March 31, 2003.  In February 2003, the Company and BET executed an amendment to
the facility to extend the maturity of the facility to June 1, 2003.  The Company has not repaid the facility and
is currently in default of the Loan and Security Agreement.


 


The Company
called its senior secured increasing rate notes due 2003 (the “Existing Notes”)
for redemption on June 10, 2003.  The
Company has not redeemed the Existing Notes, and the Company is in default of
the Notes and the Indenture dated as of June 19, 2001, as supplemented (the
“Indenture”), by and among the Company, the subsidiary guarantors named therein
(the “Subsidiary Guarantors”) and The Bank of New York (as successor in
interest to the corporate trust business of United States Trust Company of New
York), as trustee (the “Trustee”), pursuant to which the Existing Notes were
issued.


 


The Company is
seeking to refinance its Existing Notes and, in connection therewith, is
engaged in negotiations with respect to (i) an offering pursuant to Rule 144A
promulgated under the Securities Act of 1933, as amended, of $160.0 million of
senior secured notes due 2008 and (ii) a new senior revolving credit facility
secured by substantially all of the assets of the Company and its subsidiaries,
other than certain inactive subsidiaries (the “Refinancing”).


 


The Company
does not want BET to take any action to enforce any of its rights and remedies
against the Company or the Subsidiary Guarantors, either directly or indirectly
by permitting the Trustee to exercise any rights under the Indenture, for a
specified period of time so that the Company can continue its efforts to
complete the Refinancing, and BET is willing not to take any such action
against the Company or the Subsidiary Guarantors in exchange for $25,000.00.


 


Accordingly,
it is agreed as follows:


 

















 


1.        Payment Default; Warrant Issuance.


 


(a)   Notwithstanding anything to
the contrary in the Loan Documents (as defined in the Loan and Security
Agreement), BET shall not take any Enforcement Action (as hereinafter defined)
with respect to the Loan Documents until the earliest of (i) July 15, 2003,
(ii) the commencement of a Proceeding (as hereinafter defined) other than by
BET in violation of this Agreement, (iii) any breach of this Agreement by the
Company, (iv) the redemption of all or a substantial portion of the Existing
Notes (as defined in the IRN Standstill Agreement (as hereinafter defined)),
(v) the expiration or termination of the “Standstill Period” as such term is
defined in the IRN Standstill Agreement, and (vi) the consummation of the
Refinancing.


 


(b)   “Enforcement Action” shall
mean (i) to sue for payment of the amounts outstanding under the Loan and
Security Agreement, or to initiate or participate with others in any suit,
action or proceeding against the Company or any Subsidiary Guarantor, to (A)
enforce payment of or to collect the whole or any part of the indebtedness
represented by the Loan and Security Agreement or (B) commence judicial
enforcement of any of the rights and remedies under the Loan Documents or
applicable law with respect to the indebtedness represented by the Loan and
Security Agreement, (iii) to take any action under the provisions of any state
or federal law, including, without limitation, the Uniform Commercial Code or
Chapter 11 of Title 11 of the United States Code, as amended from time to time
and any successor statute and all rules and regulations promulgated thereunder
(the “Bankruptcy Code”), or under any contract or agreement, to enforce,
foreclose upon, take possession of or sell any property or assets of the
Company or any Subsidiary Guarantor or (iv) permit the Trustee to (A) enforce
payment of or to collect the whole or any part of the indebtedness represented
by the Existing Notes or (B) commence judicial enforcement of any of the rights
and remedies under the Existing Notes, the Indenture or any Collateral
Agreement or applicable law with respect to the indebtedness represented by the
Existing Notes, (iii) to take any action under the provisions of any state or
federal law, including, without limitation, the Uniform Commercial Code or the
Bankruptcy Code, or under any contract or agreement, to enforce, foreclose
upon, take possession of or sell any property or assets of the Company or any
Subsidiary Guarantor.


 


(c)   “Proceeding” shall mean any
voluntary or involuntary insolvency, bankruptcy, receivership, custodianship,
liquidation, dissolution, reorganization, assignment for the benefit of
creditors, appointment of a custodian, receiver, trustee or other officer with
similar powers or any other proceeding for the liquidation, dissolution or
other winding up of a person.


 


(d)   Upon execution of this
Agreement, the Company shall pay to BET or its designee by wire transfer of
immediately available funds an amount equal to $25,000.00.


 


2

















 


(e)   “IRN Standstill Agreement”
shall mean that certain Standstill Agreement of even date herewith among the
Company and the holders of the Company’s senior secured increasing rate notes
due 2003.


 


2.        Representations and Warranties by the
Company.  The Company represents and
warrants to BET as follows:


 


2.1        Organization and Authority of the
Company.  The Company is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and has the full power, right and authority to
enter into and perform this Agreement in accordance with its terms and to own,
lease and operate its properties as it now does and to carry on its business as
it is presently being conducted.


 


2.2        Authority
of the Company.  The
Company has all necessary corporate power and authority to execute and deliver
this Agreement and to perform its obligations under this Agreement and to
consummate the transactions contemplated by this Agreement.  The execution and delivery of this Agreement
by the Company and the consummation by the Company of the transactions contemplated
by this Agreement have been duly and validly authorized by all necessary
corporate action on the part of the Company, and no other corporate proceedings
on the part of the Company are necessary to authorize this Agreement or to
consummate the transactions contemplated by this Agreement.  This Agreement has been duly and validly
executed and delivered by the Company and, assuming the due authorization,
execution and delivery of this Agreement by each of the other parties to this
Agreement, constitutes a legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except as
enforceability may be limited by (i) applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other laws of general
application affecting the enforcement of creditors’ rights generally now or
hereafter in effect and (ii) general principles of equity, regardless of
whether asserted in a proceeding in equity or at law.


 


2.3        No Conflicts; Consents of Third Parties.


 


(a)           The execution,
delivery and performance of this Agreement by the Company and the consummation
of the transactions contemplated by this Agreement will not (i) conflict with
the certificate of incorporation or by-laws of the Company; (ii) conflict with,
or result in the breach or termination of, or constitute a default under any
lease, agreement, commitment or other instrument, or any order, judgment or
decree, to which the Company is a party or by which it is bound; (iii)
constitute a violation by the Company of any law, regulation, order, writ,
judgment, injunction or decree applicable to it; or (iv) result in the creation
of any claim, lien, security interest, charge or encumbrance upon any of the
capital stock of the Company or upon any assets of the Company.


 


3

















 


(b)           The execution and
delivery of this Agreement by the Company does not, and the performance of this
Agreement by the Company and the consummation by the Company of the
transactions contemplated by this Agreement will not, require any consent,
approval, authorization of, or declaration or filing with any governmental
body, court or other person or entity.


 


3.        Representations and Warranties by
BET.  BET represents and warrants to
the Company as follows:


 


3.1        Organization and Authority of BET.  BET is a limited partnership duly organized,
validly existing and in good standing under the laws of the State of Delaware
and has the full power, right and authority to enter into and perform this
Agreement in accordance with its terms.


 


3.2        Authority
of BET.  BET has all necessary
limited partnership power and authority to execute and deliver this Agreement
and to perform its obligations under this Agreement and to consummate the
transactions contemplated by this Agreement. 
The execution and delivery of this Agreement by BET and the consummation
by BET of the transactions contemplated by this Agreement have been duly and
validly authorized by all necessary limited partnership action on the part of
BET, and no other limited partnership proceedings on the part of BET are
necessary to authorize this Agreement or to consummate the transactions
contemplated by this Agreement.  This
Agreement has been duly and validly executed and delivered by BET and, assuming
the due authorization, execution and delivery of this Agreement by each of the
other parties to this Agreement, constitutes a legal, valid and binding
obligation of BET, enforceable against BET in accordance with its terms, except
as enforceability may be limited by (i) applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other laws of general
application affecting the enforcement of creditors’ rights generally now or
hereafter in effect and (ii) general principles of equity, regardless of
whether asserted in a proceeding in equity or at law.


 


3.3        No Conflicts; Consents of Third
Parties.


 


(a)           The execution,
delivery and performance of this Agreement by BET and the consummation of the
transactions contemplated by this Agreement will not (i) conflict with the
limited partnership agreement of BET; (ii) conflict with, or result in the
breach or termination of, or constitute a default under any lease, agreement,
commitment or other instrument, or any order, judgment or decree, to which BET,
is a party or by which it is bound; or (iii) constitute a violation by BET of
any law, regulation, order, writ, judgment, injunction or decree applicable to
it.


 


4

















 


(b)           The execution and
delivery of this Agreement by BET does not, and the performance of this
Agreement by BET and the consummation by BET of the transactions contemplated
by this Agreement will not, require any consent, approval, authorization of, or
declaration or filing with any governmental body, court or other person or
entity.


 


4.        Further Agreements of the Parties.


 


4.1        Fees and Expenses.  The Company shall be responsible for and reimburse BET for all of
the fees and expenses, in an aggregate amount not in excess of $5,000, incurred
by BET, including, without limitation, the fees and expenses of counsel to BET,
in connection with the negotiation, drafting and preparation of this Agreement.


 


4.2        Notice of Breaches.  The Company shall immediately notify BET of any Default (as
defined in the Loan and Security Agreement) or Event of Default (as defined in
the Loan and Security Agreement) after the Company has actual knowledge of any
event or condition that constitutes a Default or an Event of Default.


 


4.3        Default Interest.  The Company acknowledges that, in accordance with Section 2.6 of
the Loan and Security Agreement, all Obligations (as defined in the Loan and
Security Agreement) that have been charged to the Loan Account (as defined in
the Loan and Security Agreement) since June 1, 2003 shall bear interest on the Daily
Balance (as defined in the Loan and Security Agreement) thereof at a per annum
rate equal to fifteen percent (15%).


 


4.4        Further Assurances. At any time and from time to time after the date of this
Agreement, each of the parties shall, without further consideration, execute
and deliver or cause to be executed and delivered to the other parties such
additional instruments, and shall take such other action as the other parties
may request to carry out the transactions contemplated by this Agreement.


 


5.        Miscellaneous.


 


5.1        Entire Agreement.  This Agreement contains a complete statement of all the
arrangements among the parties with respect to its subject matter, supersedes
any previous agreements among them relating to that subject matter and cannot be
changed or terminated orally.  Except as
specifically set forth in this Agreement, there are no representations or
warranties by any party in connection with the transactions contemplated by
this Agreement.


 


5.2        Headings.  The section headings of this Agreement are
for reference purposes only and are to be given no effect in the construction
or interpretation of this Agreement.


 


5

















 


5.3        Governing
Law.  This Agreement shall be
governed by and construed in accordance with the law of the State of New York
applicable to agreements made and to be performed in New York.


 


5.4        Separability.  If any provision of this Agreement is
invalid or unenforceable, the balance of this Agreement shall remain in effect.


 


5.5        Waiver.  Any party may waive compliance by any other
party with any provision of this Agreement. 
No waiver of any provision shall be construed as a waiver of any other
provision.  Any waiver must be in
writing.


 


5.6        Assignment.  No party may assign any of its rights or
delegate any of its duties under this Agreement without the consent of the
other parties.


 


5.7        Jurisdiction.  The courts of the State of New York in New
York county and the United States District Court for the Southern District of
New York shall have exclusive jurisdiction over the parties with respect to any
dispute or controversy among them arising under or in connection with this
Agreement and, by execution and delivery of this Agreement, each of the parties
to this Agreement submits to the jurisdiction of those courts, waives any
objection to such jurisdiction on the grounds of venue or forum non conveniens,
the absence of any personal or subject matter jurisdiction and any similar
grounds, consents to service of process by mail or any other manner permitted
by law, and irrevocably agrees to be bound by any judgment rendered thereby in
connection with this Agreement.  These
consents to jurisdiction shall not be deemed to confer rights on any person
other than the parties to this Agreement.


 


5.8        No Third Party Beneficiaries.  This
Agreement does not create, and shall not be construed as creating, any rights
in favor of any person not a party to this Agreement.


 


5.9        Counterparts.  This Agreement may be executed in multiple
counterparts, each of which shall be considered an original and all of which
shall be considered a single instrument.


 


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this page intentionally left blank]


 


6

















 


IN WITNESS
WHEREOF, the parties hereto have caused this Agreement to be duly executed and
delivered by their duly authorized officers or authorized representatives as of
the date first written above.


 


	
   

  	
  NEW WORLD
  RESTAURANT GROUP, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ ANTHONY
  D. WEDO

  	
   

  
	
   

  	
   

  	
  Name:
  Anthony D. Wedo

  
	
   

  	
   

  	
  Title: Chief
  Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BET
  ASSOCIATES, L.P.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ BRUCE E.
  TOLL

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


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