EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT AGREEMENT (this "Agreement") is made and entered into as of
July 1, 2000 by and between NEW WORLD COFFEE - MANHATTAN BAGEL, INC., a Delaware
corporation ("Corporation"), and JEROLD E. NOVACK ("Officer").

                                    RECITALS

     Corporation  desires  to  continue  to employ  Officer  an  Executive  Vice
President,  Chief  Financial  Officer and  Secretary,  and Officer 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, Officer agrees to be employed
by and to serve  Corporation as its' Executive Vice  President,  Chief Financial
Officer and Secretary  and  Corporation  agrees to employ and retain  Officer in
such  capacities.  Officer shall devote such of his business time,  energy,  and
skill to the affairs of the  Corporation  as shall be  necessary  to perform the
duties of such positions.

     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;

     (ii) as a result of or in connection with any cash tender offer, merger, or
other business combination, sale of assets or contested election, or combination
of the  foregoing,  the  directors of the  Corporation  who are not elected by a
contract  between  the  Corporation  and  another  person 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  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 is transferred;

     (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  Corporation  under
Title 11 of the United States Code; or

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

     (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.

     (c)  "Termination  For Cause"  shall mean  termination  by  Corporation  of
Officer's  employment by Corporation by reason of Officer's  willful  dishonesty
towards or fraud upon the Corporation or by reason of Officer's willful material
breach of this  Agreement not cured for 60 days after written  notice thereof to
the  Officer  entitled  "Notice of  Default",  provided  that if the same cannot
reasonably be cured in 60 days, and the Officer has promptly commenced a cure of
the same and continues all reasonable efforts to cure the same until the same is
cured, then the 60 day cure period shall be extended  automatically to cover the
full period of the cure and Officer shall no longer be in default hereunder when
such cure is effected; provided, however, that Officer's employment shall not be
deemed to have been  terminated in a Termination  For Cause if such  termination
took place as a result of any act or  omission  (i)  believed by Officer in good
faith to have been in the best  interests  of  Corporation  or (ii) that did not
result in material injury to Corporation.

     (d)   "Termination   Other  Than  for  Cause"  shall  mean  termination  by
Corporation of Officer's employment by Corporation (other than a Termination For
Cause) and shall include  constructive  termination  of Officer's  employment by
reason of (i) material  breach of this Agreement by Corporation or (ii) material
dimunition of the Executive's duties, authority or responsibilities as Executive
Vice President,  Chief Financial  Officer and Secretary or (iii)  non-renewal of
the Officer's employment with substantially  comparable terms, such constructive
termination  to be  effective  upon notice from Officer to  Corporation  of such
constructive termination.

     (e) "Voluntary  Termination" shall mean termination by Officer of Officer's
employment by Corporation  other than (i) constructive  termination as described
in  subsection  2.1(d),  and (ii)  termination  by reason of Officer'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 Officer to Corporation no
later than 60 days (or such  shorter  period as the parties may agree)  prior to
such Voluntary Termination.

     (g)  "Termination  Upon a Change in Control"  shall mean a  termination  by
Officer, in his discretion,  of Officer's  employment with Corporation within 30
days following a Change in Control.

     2.2 Basic Term. The term of employment of Officer by  Corporation  shall be
from July 1, 2000 through June 30, 2001, unless  terminated  earlier pursuant to
this Section 2.

     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  Officer.  Upon  Termination  For  Cause,  Officer
immediately shall be paid 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 Officer is a  participant  to the full extent of Officer's
rights  under such plans,  accrued  vacation  pay and any  appropriate  business
expenses incurred by Officer in connection with his duties hereunder, all to the
date of  termination,  but Officer shall not be paid any other  compensation  or
reimbursement of any kind, including without limitation, severance compensation.
Officer  shall have the right to contest  the right of  Corporation  to effect a
Termination For Cause upon written notice to Corporation.  In such case, Officer
shall  continue to receive all of his benefits under this Agreement (and Officer
shall  continue to be treated as an employee for purposes of  Corporation  stock
option  plans)  until  such  time  as  there  is a final  judical  determination
including any appeals or the termination of any applicable  appeal period, as to
whether such Termination For Cause was proper.

     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 Officer of such  termination.  Upon any Termination  Other
Than For Cause,  Officer shall  immediately  be paid 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 Officer is a participant to the
full extent of Officer's  rights under such plans,  accrued vacation pay and any
appropriate  business expenses incurred by Officer in connection with his duties
hereunder,  all to the  date  of  termination,  and all  severance  compensation
provided in Section 4.1, but no other compensation or reimbursement of any kind.

     2.5  Termination  by  Reason of  Disability.  If,  during  the term of this
Agreement,  Officer,  in the  reasonable  judgement 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 nine (9) months,  Corporation shall have the
right to terminate  Officer's  employment  hereunder by written  notification to
Officer and payment to Officer of 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 Officer is a  participant  to the full extent of Officer's
rights  under such plans,  accrued  vacation  pay and any  appropriate  business
expenses incurred by Officer in connection with his duties hereunder, all to the
date of termination. Officer 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)  until June 30, 2001 (or until the June 30st of the end of
any renewal term if this Agreement is renewed.)

     2.6  Death.  In the  event  of  Officer's  death  during  the  term of this
Agreement,  Officer'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
Officer is a  participant  to the full  extent of  Officer's  rights  under such
plans,  accrued vacation pay and any appropriate  business  expenses incurred by
Officer in connection with his duties hereunder, all to the date of termination.
In such event, Corporation shall pay Officer's estate 75% of his Base Salary and
minimum  bonus (less any amounts  received by Officer's  estate under  insurance
policies carried by Corporation)  for a one year period,  on the dates specified
in Section 3.1.

     2.7  Voluntary  Termination.  In  the  event  of a  Voluntary  Termination,
Corporation shall immediately pay all accrued salary,  bonus compensation of 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 Officer is a  participant  to the full extent of Officer's
rights under such plans,  $100,000 in severance  compensation,  accrued vacation
pay and any appropriate business expenses incurred by Officer in connection with
his duties hereunder, all to the date of termination,  but no other compensation
or reimbursement of any kind..

     2.8  Voluntary  Termination  With  Notice.  In  the  event  of a  Voluntary
Termination With Notice,  Corporation  shall pay to Officer all amounts to which
Officer is entitled  under  Section 2.7,  and shall  continue to pay Officer his
Base  Salary  until  the  earlier  of  (i)  60  days  following  such  Voluntary
Termination  With  Notice or (ii) the June 30,  2001 (or June 30st of the end of
any renewal term if this Agreement is renewed..

     2.9  Termination  Upon a Change in Control.  In the event of a  Termination
Upon a Change in Control,  Officer shall immediately 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 Officer is a  participant  to the full extent of Officer's
rights  under such plans,  accrued  vacation  pay and any  appropriate  business
expenses incurred by Officer in connection with his duties hereunder, all to the
date of  termination,  and all severance  compensation as provided in Section 4,
but no other compensation or reimbursement of any kind.

     3. Salary, Benefits and Bonus Compensation.

     3.1 Base  Salary.  As payment for the services to be rendered by Officer as
provided  in  Section 1 and  subject to the terms and  conditions  of Section 2,
Corporation  agrees to pay to Officer a "Base Salary" payable in equal bi-weekly
installments at the rate of $160,000 per annum. The Base Salary shall be subject
to review by the Board of Directors but shall in no event be less than a rate of
$160,000 per annum.

     3.2 Bonuses.  Officer  shall receive a bonus (a "Bonus") of between 50% and
100% of  Officer's  Base  Salary  for the  term of this  agreement  and for each
subsequent year (or portion thereof) during the term of Agreement. The amount of
the Bonus shall be  determined  by the  Compensation  Committee  of the Board of
Directors upon  consideration of Officer's and Corporation's  performance during
such period.

     3.3 Benefits. During the term of this Agreement,  Officer 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 executive
officers of Corporation,  including,  without limitation,  profit sharing, stock
option, medical,  dental, health, annual physical examination,  life, disability
insurance,  financial  planning  plans,  supplemental  retirement  programs  and
vacation.  The  Corporation  shall  maintain and pay for a disability  insurance
policy  for  Officer.  In  addition,  Officer  shall be  entitled  to receive an
automobile  allowance of $12,000 per year plus travel  expenses  (but no mileage
reimbursement)  for business travel and reimbursement for mobile phone expenses.
Without  limiting the  foregoing,  Officer  shall be entitled to four weeks paid
vacation  per year.  Officer  may elect to receive an amount  equal to two weeks
additional salary in lieu of two weeks of such Vacation time.

     4. Severance Compensation and Death Benefits

     4.1 Severance Compensation. In the event Officer's employment is terminated
in a Termination Other Than For Cause or a Termination Upon a Change in Control,
or this  agreement  is not  renewed by either  party (i)  Officer  shall be paid
within  five (5) days after such  termination  or  expiration  of  agreement  as
severance compensation $200,000,  (ii) the Corporation shall continue to provide
for a period of eighteen  months from the date of termination or non renewal and
at its expense,  the benefits then being  provided to the Officer at the time of
such termination or non renewal , (iii) each option to purchase shares of common
stock of the  Corporation  outstanding at the time of termination or non renewal
of  agreement  shall  become  fully  vested  and  exercisable  at  the  time  of
termination  and  shall  remain  exercisable  for five (5) years  following  the
termination  date.  The amount of any  payment or benefit  provided  for in this
Section  4.1 shall not be reduced by any  compensation  earned by the Officer as
the  result of  employment  or  engagement  by  another  person,  by  retirement
benefits,  by offset against any amount claimed to be owed by the Officer to the
Corporation or otherwise.

     5. Covenant Not to Compete or Solicit.

     5.1  Non-Competition.  Until the first anniversary of Termination for Cause
or a Voluntary  Termination,  Officer shall not directly or indirectly,  without
the prior written consent of the Corporation engage anywhere in the northeastern
United  States in  (whether as an  employee,  consultant,  proprietor,  partner,
director or otherwise),  or have any ownership interest in (except for ownership
of five percent (5%) 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 specialty coffee as
its principal business.

     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 any geographic  area where any business is presently  carried on by the
Corporation.  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.

     6. Miscellaneous.

     6.1  Confidentiality.  Officer 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.

     6.2 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  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:  Chief Executive Officer

          If to Officer:

             Jerold E. Novack
             246 Industrial Way West
             Eatontown, NJ 07724

Any party may change such party's address for notices by notice duly given
pursuant to this Section 6.3.

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

     6.5 Governing Law;  Arbitration.  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 Officer arising out of, or relating to this Agreement or
the breach thereof, shall, if requested by Officer, be decided by arbitration in
the City of New York in  accordance  with the rules of the American  Arbitration
Association. The arbitrators shall be empowered to award reasonable counsel fees
and expenses to the party prevailing.

     6.6  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.

     6.7  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 by Officer.

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

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

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

     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/ Jerold Novack
---------------------
Title: Secretary


OFFICER
/s/ R. Ramin Kamfar
-------------------
R. Ramin Kamfar