EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT AGREEMENT (this "Agreement") is made and entered into as of
July 16,  2001 by and  between  NEW WORLD  COFFEE -  MANHATTAN  BAGEL,  INC.,  a
Delaware corporation ("Corporation") and ANTHONY WEDO ("Executive").

                                    RECITALS

     Corporation  desires to employ Executive and Executive is willing to accept
such employment by  Corporation,  on the terms and subject to the conditions set
forth in this Agreement.

                                    AGREEMENT

     1.  Duties.  During  the term of this  Agreement,  Executive  agrees  to be
employed by Corporation as its Chief Executive  Officer,  and Corporation agrees
to employ Executive in such capacity.  Executive shall devote  substantially all
of his  business  time,  energy,  and  skill  to  the  affairs  of  Corporation.
Executive's  position  shall include  responsibility  for all business  matters,
other than (a) acquisitions,  which duties shall be shared by Executive with the
Chairman of the Board and (b)  external  finance and  financings,  which  duties
shall be the responsibility of the Chairman of the Board. Executive shall report
to the Board of Directors. In addition, Executive shall serve as a member of the
Board of  Directors  for so long as he holds  the  position  of Chief  Executive
Officer.  Executive  shall be based in Golden,  Colorado and shall engage in all
business  travel  related to his duties as required  by the Board of  Directors,
including  travel to Golden Colorado.  The Corporation  shall pay all reasonable
business  expenses  incurred by Executive  including,  without  limitation,  all
travel,  lodging and automobile  expenses in connection with duties performed by
Executive in Golden,  Colorado.  Executive shall relocate himself and his family
to in or near the location of the  Corporation's  headquarters  by July 31, 2002
provided  the Term (as  defined  below) has been  extended  for one year,  which
extension is effective by July 1, 2002.  Corporation  shall  provide a customary
relocation  package  which is reasonably  acceptable  to Executive,  which shall
include real estate commissions of up to $50,000 and related taxes.

     2. Term of Employment.

     2.1  Definitions.  For purposes of this Agreement the following terms shall
have the following meanings:

     (a) "Change in Control" shall mean any of the following events:

               (i) Any  person or group (as such  terms are  defined  in Section
          13(d)(3)  of the  Exchange  Act) has become the holder of more than 40
          percent of the outstanding shares of Corporation  entitled to vote for
          the  election  of  directors  (calculated  on a  fully-diluted  basis,
          including,  without limitation,  all options, warrants and convertible
          securities),  other than persons ("Excluded  Persons") excluded by the
          Board  of  Directors  from  the  provisions  of  Corporation's  Rights
          Agreement,  such as the  holders of  Corporation's  Series F Preferred
          Stock and related warrants;

               (ii) as a result of or in connection  with any cash tender offer,
          merger,  or other  business  combination,  sale of assets or contested
          election,  restructuring, or combination of the foregoing, the persons
          who are  directors  of  Corporation  as of the date of this  Agreement
          shall cease to constitute a majority of the Board;

               (iii)  the  stockholders  of  Corporation  approve  a  definitive
          agreement (i) to merge or consolidate Corporation with or into another
          corporation  in which the holders of  Corporation's  Common  Stock and
          warrants to purchase  Common Stock  immediately  before such merger or
          reorganization  will  not,   immediately   following  such  merger  or
          reorganization,  hold as a group  on a  fully-diluted  basis  both the
          ability to elect at least a majority of the board of  directors of the
          surviving  corporation  and  at  least  a  majority  in  value  of the
          surviving corporation's outstanding equity securities, or (ii) to sell
          or  otherwise  dispose  of all or  substantially  all of the assets of
          Corporation;

               (iv) the closing of a transaction  or series of  transactions  in
          which more than 50% of the voting power of Corporation,  including for
          such purpose  warrants to purchase  Common Stock,  is  transferred  to
          persons other than Excluded Persons; or

               (v) an Offer is made

               (vi) a resolution of the Board is passed  authorizing  the filing
          or acquiescence to the filing of a petition for or against the Company
          under Title 11 of the United States Code.

               (vii)  the   stockholders  of  the  Company  approve  a  plan  of
          liquidation or dissolution of the Company.

     (b)  "Offer"  shall  mean a tender  offer or  exchange  offer for shares of
Corporation's  Common Stock where the offeror  acquires  more than 40 percent of
the outstanding  shares of  Corporation's  Common Stock and warrants to purchase
Common Stock of Corporation.

     (c)  "Termination  For Cause"  shall mean  termination  by  Corporation  of
Executive's   employment  by  Corporation  by  reason  of  Executive's   willful
dishonesty  towards or fraud upon the  Corporation  or by reason of  Executive's
willful material breach of this Agreement.

     (d)   "Termination   Other  Than  for  Cause"  shall  mean  termination  by
Corporation of Executive's  employment by Corporation  (other than a Termination
For Cause) and shall include constructive  termination of Executive's employment
by reason  of (i)  material  breach of this  Agreement  by  Corporation  or (ii)
material diminution of the Executive's duties,  authority or responsibilities as
Chief  Executive  Officer  or  (iii)  Executive's  resignation  within  30  days
following a Change in Control or (iv) notice by Corporation of non-renewal under
Section 2.2.

     (e)  "Voluntary   Termination"  shall  mean  termination  by  Executive  of
Executive's employment by Corporation other than (i) a constructive  termination
described in subsection  2.1(d),  and (ii)  termination by reason of Executive's
death or disability as described in Sections 2.5 and 2.6.

     (f) "Voluntary  Termination With Notice" shall mean a Voluntary Termination
that has been preceded by written  notice  delivered by Executive to Corporation
no later than 60 days (or such shorter period as the parties may agree) prior to
such Voluntary Termination.

     2.2 Term. The term of employment of Executive by Corporation  shall be from
July 16, 2001  through July 31, 2003 (the  "Term"),  unless  terminated  earlier
pursuant to this Section 2. Thereafter,  the Term shall  automatically renew for
successive one-year periods,  unless terminated earlier pursuant to this Section
2, commencing each July 31, unless Corporation or Executive, as the case may be,
gives  written  notice to the other of its or his desire not to renew such term,
which notice must be given no later than 90 days prior to the end of the initial
Term or any such renewal.

     2.3  Termination  For  Cause.  Termination  For  Cause may be  effected  by
Corporation  at any time during the time of this Agreement and shall be effected
by written  notification to Executive.  Upon  Termination  For Cause,  Executive
immediately shall be paid all accrued salary,  bonus  compensation to the extent
earned,  vested deferred compensation (other than pension plan or profit sharing
plan benefits which will be paid in accordance  with the applicable  plan),  any
benefits under any plans of  Corporation in which  Executive is a participant to
the full extent of Executive's rights under such plans, accrued vacation pay and
any appropriate  business  expenses incurred by Executive in connection with his
duties  hereunder,  all to the date of  termination,  but Executive shall not be
paid any other  compensation or  reimbursement  of any kind,  including  without
limitation, severance compensation.

     2.4 Termination Other Than For Cause. Notwithstanding anything else in this
Agreement, Corporation may effect a Termination Other Than For Cause at any time
upon giving notice to Executive of such termination.  Upon any Termination Other
Than For Cause,  Executive shall  immediately be paid all accrued salary,  bonus
compensation  to the extent  earned (and for the purpose of this  Section 2.4, a
bonus  equal to $187,500  shall be deemed  earned for the first 12 months of the
Term),  vested deferred  compensation (other than pension plan or profit sharing
plan benefits which will be paid in accordance  with the applicable  plan),  any
benefits under any plans of  Corporation in which  Executive is a participant to
the full extent of Executive's rights under such plans, accrued vacation pay and
any appropriate  business  expenses incurred by Executive in connection with his
duties hereunder, all to the date of termination, and the severance compensation
provided in Section 4.1, but no other compensation or reimbursement of any kind.
In  addition,  vesting of the  Initial  Option (as defined in Section 3.4 below)
will be  recomputed  based on 25% vesting  after each six (6) months of the Term
("Accelerated Vesting").

     2.5  Termination  by  Reason of  Disability.  If,  during  the Term of this
Agreement,  Executive,  in the reasonable  judgment of the Board of Directors of
Corporation, has failed to perform his duties under this Agreement on account of
illness  or  physical  or mental  incapacity,  and such  illness  or  incapacity
continues for a period of more than four (4) months,  Corporation shall have the
right to terminate  Executive's  employment hereunder by written notification to
Executive and payment to Executive of all accrued salary,  bonus compensation to
the extent  earned,  vested  deferred  compensation  (other than pension plan or
profit  sharing  plan  benefits  which  will  be  paid in  accordance  with  the
applicable plan), any benefits under any plans of Corporation in which Executive
is a  participant  to the full extent of  Executive's  rights  under such plans,
accrued vacation pay and any appropriate business expenses incurred by Executive
in connection with his duties hereunder, all to the date of termination. In such
event,  Corporation  shall pay Executive  fifty (50%) percent of his Base Salary
for the first six months after such  termination  (less any amounts  received by
Executive under insurance  policies carried by Corporation).  Executive shall be
entitled to continued  participation in all of  Corporation's  benefit plans (to
the extent  permitted  by law or under the terms of such plans)  during such six
month  period.  In  addition,  Executive's  stock  options  will be  entitled to
Accelerated Vesting.

     2.6  Death.  In the  event of  Executive's  death  during  the Term of this
Agreement,  Executive's  employment shall be deemed to have terminated as of the
last day of the month during which his death occurs and Corporation shall pay to
his estate all accrued salary,  bonus compensation to the extent earned (but not
less than the pro rata minimum amount), vested deferred compensation (other than
pension plan or profit  sharing plan  benefits  which will be paid in accordance
with the applicable  plan), any benefits under any plans of Corporation in which
Executive is a participant to the full extent of  Executive's  rights under such
plans,  accrued vacation pay and any appropriate  business  expenses incurred by
Executive  in  connection  with  his  duties  hereunder,  all  to  the  date  of
termination.  In  addition,  Executive's  stock  options  will  be  entitled  to
Accelerated Vesting.

     2.7  Voluntary  Termination.  In  the  event  of a  Voluntary  Termination,
Corporation shall immediately pay all accrued salary,  bonus compensation to the
extent earned,  vested deferred  compensation (other than pension plan or profit
sharing  plan  benefits  which will be paid in  accordance  with the  applicable
plan),  any  benefits  under any plans of  Corporation  in which  Executive is a
participant to the full extent of Executive's  rights under such plans,  accrued
vacation  pay and any  appropriate  business  expenses  incurred by Executive in
connection with his duties  hereunder,  all to the date of  termination,  but no
other compensation or reimbursement of any kind,  including without  limitation,
no severance pay.

     2.8  Voluntary  Termination  With  Notice.  In  the  event  of a  Voluntary
Termination With Notice, Corporation shall pay to Executive all amounts to which
Executive is entitled under Section 2.7, and shall continue to pay Executive his
Base  Salary  until  the  earlier  of  (i)  60  days  following  such  Voluntary
Termination With Notice or (ii) the end of the Term.

     2.9 Resignation. Upon a termination of Executive's employment hereunder for
any reason,  Executive,  with no further action on his part,  shall be deemed to
have resigned from all of his offices with Corporation, his seat on the Board of
Directors,  and any such positions with any subsidiaries of Corporation,  and he
shall return all property of Corporation in his possession.



     3. Salary, Benefits and Bonus Compensation.

     3.1 Base Salary. As payment for the services to be rendered by Executive as
provided  in  Section 1 and  subject to the terms and  conditions  of Section 2,
Corporation  agrees to pay to Executive a Base Salary payable in equal bi-weekly
installments at the rate of Four Hundred Twenty Five Thousand ($425,000) Dollars
per annum. The Base Salary shall be subject to annual review by the Compensation
Committee of the Board of  Directors  but shall in no event shall be less than a
rate of $425,000 per annum.

     3.2 Bonuses.  Executive  shall  receive a bonus (a "Bonus") of up to Eighty
Eight and one quarter (88.25%) percent of the Base Salary for each calendar year
(or  portion  thereof)  during  the Term of this  Agreement,  pro-rated  for the
fraction of such calendar year which  includes a portion of the Term. The amount
of the Bonus shall be determined  by the Board of Directors  after review by the
Compensation  Committee  based on the  achievement of  pre-determined  goals for
Corporation during such period.  Notwithstanding the foregoing,  Executive shall
receive a guaranteed  bonus of $187,500 for the period July 16, 2001 to July 31,
2002,  payable $46,875 on October 31, 2001, January 31, 2002, April 30, 2002 and
July 31, 2002,  which shall be deemed a prepayment of the Bonus described in the
preceding portion of this Section 3.2.

     3.3  Benefits.  During  the  term of this  Agreement,  Executive  shall  be
eligible  to  participate  in  such  of   Corporation's   benefit  and  deferred
compensation  plans  as are now  generally  available  or later  made  generally
available to executives of Corporation,  including,  without limitation,  profit
sharing, medical, dental, health, annual physical examination,  life, disability
insurance,  financial  planning  plans,  supplemental  retirement  programs  and
vacation (but excluding  stock options,  except as set forth in Section 3.4). In
addition,  Executive  shall be entitled to receive an  automobile  allowance  of
$18,000  per  year  payable  in  equal  monthly  installments  (but  no  mileage
reimbursement),  for a leased  automobile which is maintained in or near Golden,
Colorado  during  the time  period in which  Executive  performed  his duties in
Golden,  Colorado,  and  reimbursement  for  business and travel  expenses  upon
reasonable accounting therefor. Without limiting the foregoing,  Executive shall
be entitled to four (4) weeks paid  vacation  per year  (Executive  may elect to
receive  payment  for up to two (2)  weeks  per year not  taken).  In  addition,
Executive  shall be entitled to term life  insurance  equal to two (2) times his
Base Salary,  a payment of $15,000 on signing to reimburse  him for his expenses
and the Corporation shall maintain the existing directors and officers liability
insurance policy during the Term.  Corporation will pay for (a) an apartment for
Executive in Golden,  Colorado,  and (b) reasonable  travel  expenses to Golden,
Colorado,  until  July 31,  2002 or the date of the  relocation  of his  family,
whichever is earlier.

     3.4 Options. An option shall be granted to Executive as of the first day of
the Term under  Corporation's  option plan, to be set forth in a separate Option
Agreement, exercisable at the closing price of the common stock on July 13, 2001
($1.15 per share, the "Exercise Price"),  for a number of shares of common stock
equal to three (3%)  percent  (the  "Initial  Option")  of the then  outstanding
common stock (including the common stock issuable under outstanding  options and
warrants  with an  exercise  price of $3.00  per share or less;  "Fully  Diluted
Common  Stock"),  which option will vest as to 50% of the amount  thereof at the
end of each 12 month  period  during  the Term,  except as  otherwise  set forth
herein,  and an option for one (1%) percent of the Fully Diluted Common Stock at
the Exercise  Price which shall vest at the end of the first one year  extension
of the Term  (provided  the Term is thus  extended  under  Section 2.2  hereof).
Executive shall have piggyback registration rights as to the common stock he may
purchase under such options,  to be confirmed by a registration rights agreement
having customary terms, which will be entered into by Corporation and Executive.
Executive's options shall be subject to review by the Compensation  Committee of
the Board of Directors.

     4. Severance Compensation and Death Benefits

     4.1  Severance  Compensation.   In  the  event  Executive's  employment  is
terminated in a Termination Other Than For Cause, (i) Executive shall be paid as
severance  compensation  an amount equal to one (1) times his annual Base Salary
(at the rate payable at the time of such  termination)  on a bi-weekly basis and
(ii) the Company  shall  continue to provide for a period of twelve  months from
the date of termination the benefits then being provided to the Executive at the
time of such  termination.  The amount of any payment or benefit provided for in
this  Section  4.1  shall  not be  reduced  by any  compensation  earned  by the
Executive  as the result of  employment  or  engagement  by another  person,  by
retirement  benefits,  by offset  against  any amount  claimed to be owed by the
Executive to the Company or otherwise.

     4.2 No Severance  Compensation  Upon Other  Termination.  In the event of a
Voluntary Termination or Termination For Cause, neither Executive nor his estate
shall be paid any severance compensation.

     5. Covenant Not to Compete or Solicit

     5.1  Non-Competition.  From the date  hereof  and  until  the  first  (1st)
anniversary of a Termination for Cause or a Voluntary  Termination  (including a
Voluntary Termination With Notice),  Executive shall not directly or indirectly,
without the prior written  consent of the  Corporation,  engage  anywhere in the
United  States in  (whether as an  employee,  consultant,  proprietor,  partner,
director or otherwise),  or have any ownership interest in (except for ownership
of ten percent  (10%) or less of any  outstanding  entity whose  securities  are
listed on a national  securities  exchange),  or  participate  in the financing,
operation,  management or control of, any firm,  corporation or business  (other
than  Corporation)  that engages in the  marketing or sale of bagels and/or fast
casual  sandwiches  as one of its  principal  businesses.  The provision of this
Section 5.1 shall not apply to a  termination  under  Sections  2.4,  2.5 or 2.6
hereof.

     5.2 Separate Covenants.  The covenants contained in Section 5.1 above shall
be construed as a series of separate  covenants,  one for each county,  city and
state of the United States.  Except for geographic coverage,  each such separate
covenant  shall be identical in terms to the covenant  contained in Section 5.1.
If, in any judicial proceeding,  a court refuses to enforce any of such separate
covenants (or any part thereof), then such unenforceable covenant (or such part)
shall be eliminated  from this  Agreement to the extent  necessary to permit the
remaining separate covenants (or portions thereof) to be enforced.  In the event
that the provisions of this Section 5 are deemed to exceed the time,  geographic
or scope limitations  permitted by applicable law, then such provisions shall be
reformed to the maximum time,  geographic or scope limitations,  as the case may
be, permitted by applicable laws.

     5.3  Non-Disclosure  and   Non-Solicitation.   Executive  agrees  that  all
confidential and proprietary  information relating to the business or operations
of Corporation  shall be kept and treated as confidential  both during and after
the  Term  of  this  Agreement,  except  as  may  be  permitted  in  writing  by
Corporation's  Board of  Directors or as such  information  is within the public
domain or comes within the public domain without any breach of this Agreement or
if the  disclosure  of  which is  required  by court  order  or  applicable  law
(provided  Executive gives Corporation  reasonable notice thereof and a right to
oppose the same at Corporation's expense). In addition, from the date hereof and
for two years after the  termination of  Executive's  employment for any reason,
Executive shall not directly or indirectly, without the prior written consent of
Corporation,  solicit the services, or cause to be employed,  any person who was
an employee of  Corporation at the date of such  termination,  or within six (6)
months prior to such time.

     5.4 Corporation.  For the purpose of this Section 5, the term "Corporation"
includes each corporation or other entity of which Corporation owns, directly or
through  another entity,  at least 50% of the equity,  or which is controlled by
Corporation.

      6.    Miscellaneous.

     6.1 Waiver.  The waiver of the breach of any  provision  of this  Agreement
shall not operate or be  construed as a waiver of any  subsequent  breach of the
same or other provision hereof.

     6.3 Entire Agreement;  Modifications.  Except as otherwise provided herein,
this  Agreement  represents  the entire  understanding  among the  parties  with
respect to the subject matter hereof, and this Agreement  supersedes any and all
prior  understandings,  agreements,  plans and negotiations,  whether written or
oral, with respect to the subject matter hereof,  including without  limitation,
any  understandings,  agreements or  obligations  respecting  any past or future
compensation,  bonuses,  reimbursements,  or other  payments to  Executive  from
Corporation. All modifications to the Agreement must be in writing and signed by
the party against whom enforcement of such modification is sought.

     6.4  Notices.  All notices and other  communications  under this  Agreement
shall  be in  writing  and  shall be given by  first-class  mail,  certified  or
registered with return receipt requested,  or by recognized overnight courier to
the respective persons named below:

         If to Corporation:

         New World Coffee - Manhattan Bagel, Inc.
         246 Industrial Way West
         Eatontown, NJ  07724
         Attention:  Chairman of the Board

         With copies to:

         New World Coffee - Manhattan Bagel, Inc.
         246 Industrial Way West
         Eatontown, NJ 07724
         Attention:  General Counsel

         Ruskin, Moscou, Evans & Faltischek, P.C.
         170 Old Country Road
         Mineola, New York  11501
         Attention:  Stuart M. Sieger

         If to Executive:

         Anthony Wedo
         112 Montana Drive
         Chadds Ford, PA 19317

         With a copy to:

         Pelino & Lentz, P.C.
         Thirty-Second Floor
         One Liberty Place
         1650 Market Street
         Philadelphia, Pennsylvania 19103
         Attention: Salvatore M. DeBunda

Any party may change such party's address for notices by notice duly given
pursuant to this Section 6.4.

     6.5 Headings.  The Section  headings  herein are intended for reference and
shall not by themselves  determine the  construction or  interpretation  of this
Agreement.

     6.6  Governing  Law. This  Agreement  shall be governed by and construed in
accordance  with the  laws of the  State of New  York  applicable  to  contracts
entered into and wholly to be performed within the State of New York by New York
residents.   All  claims,   disputes  and  other  matters  in  question  between
Corporation  and Executive  arising out of, or relating to this Agreement or the
breach  thereof,  shall be subject to binding  arbitration  in Denver,  Colorado
under  the  rules  of  the  American  Arbitration  Association  then  obtaining.
Notwithstanding  the  foregoing,  Corporation  may  seek an  order of a court of
competent jurisdiction to obtain an injunction for a breach or threatened breach
of Section 5 hereof by Executive.

     6.7  Severability.  Should a court or other body of competent  jurisdiction
determine  that  any  provision  of this  Agreement  is  excessive  in  scope or
otherwise invalid or unenforceable, such provision shall be adjusted rather than
voided,  if possible,  so that it is enforceable to the maximum extent possible,
and all other provisions of this Agreement shall be deemed valid and enforceable
to the extent possible.

     6.8  Survival  of  Corporation's  Obligations.   Corporation's  obligations
hereunder  shall not be  terminated by reason of any  liquidation,  dissolution,
bankruptcy,  cessation of business,  or similar event  relating to  Corporation.
This Agreement shall not be terminated by any merger or  consolidation  or other
reorganization of Corporation. In the event any such merger,  consolidation,  or
reorganization  shall be  accomplished  by  transfer  of stock or by transfer of
assets or otherwise,  the provisions of this Agreement shall be binding upon the
surviving or resulting  corporation or person.  This Agreement  shall be binding
upon  and  inure  to  the  benefit  of  the  executors,  administrators,  heirs,
successors and assigns of the parties; provided,  however, that except as herein
expressly provided, this Agreement shall not be assignable either by Corporation
(except to an affiliate of Corporation or upon the sale of all or  substantially
all of its assets) or by Executive.

     6.9   Counterparts.   This  Agreement  may  be  executed  in  one  or  more
counterparts,  all of which taken  together  shall  constitute  one and the same
Agreement.

     6.10  Withholdings.  All compensation  and benefits to Executive  hereunder
shall be reduced by all federal, state, local and other withholdings and similar
taxes and payments required by applicable law.

     6.11 Indemnification. In addition to any rights to indemnification to which
Executive is entitled to under the  corporation's  Certificate of  Incorporation
and Bylaws,  Corporation shall indemnify Executive at all times during and after
the term of this Agreement to the maximum extent  permitted under Section 145 of
the Delaware General  Corporation Law or any successor provision thereof and any
other applicable state law, and shall pay Executive's  expenses in defending any
civil or criminal  action,  suit or proceeding,  to the maximum extent permitted
under such applicable state law. This provision shall survive the termination of
this Agreement.

     IN WITNESS  WHEREOF,  the parties hereto have executed this Agreement as of
the day and year first above written.

                                    NEW WORLD COFFEE- MANHATTAN BAGEL, INC.

                                    By: /s/ Ramin Kamfar
                                        ----------------
                                        Ramin Kamfar
                                        Chairman of the Board of Directors



                                    EXECUTIVE

                                    /s/ Anthony Wedo
                                    ----------------
                                    Anthony Wedo, Individually