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                               PROMISSORY NOTE
                                       
$1,655,444.57                                                 AUGUST 24, 1998
----------------------                                 ----------------------

FOR VALUE RECEIVED, the undersigned ("Borrower") unconditionally (and jointly 
and severally, if more than one) promise(s) to pay to the order of 
NationsBank, N.A. ("Bank"), at its principal offices at 100 North Broadway, 
Wichita, Kansas, 67202, the principal sum of ONE MILLION SIX HUNDRED 
FIFTY-FIVE THOUSAND FOUR HUNDRED FORTY-FOUR DOLLARS AND 57/100 DOLLARS 
($1,655,444.57), or such lesser principal sum as may have been advanced 
hereunder, in lawful money of the United States of America, together with 
interest from the date hereof on the unpaid principal balance hereunder, 
computed daily, at the RATE per annum indicated below and in accordance with 
the particular PAYMENT SCHEDULE indicated below.

The RATE shall be:  NATIONSBANK  Prime Rate Floating. After default the RATE 
shall be NATIONSBANK PRIME RATE PLUS 2% per annum.

A RATE based on the Prime Rate of the Bank will change each time and as of 
the date that the Prime Rate of the Bank changes, without prior notice to 
Borrower.

     INSTALLMENT-PRINCIPAL AND INTEREST:

     Principal and interest shall be paid in TWELVE (12) monthly 
     installments of $26,265.64 each, which monthly payment is calculated at 
     the Floating Rate as of the date hereof based on a seven-year 
     amortization of the principal amount hereof, commencing on SEPTEMBER 
     15, 1998, and continuing on the same day of each successive month 
     thereafter with a final payment of all principal due on SEPTEMBER 15, 
     1999.

If any payment is not paid within TEN (10) days after the date when due, 
Borrower shall pay to Bank a late charge, for the purpose of defraying Bank's 
expenses in handling such late payment, in an amount equal to 1.0% of 
scheduled payment.

COLLATERAL:  Borrower hereby grants to the Bank a security interest in all 
deposit accounts of Borrower now or hereafter at the Bank.

/X/ In addition, if the box is checked, this Note is secured by and is 
    entitled to the benefits from the following collateral documents and any 
    other collateral documents now or hereafter held by the Bank:

/X/ Security Agreement(s) dated any date, including, without limitation; 
    SEPTEMBER 5, 1997.

/X/ Other (describe): ASSIGNMENT OF PERMITS, LICENSES AND AGREEMENTS DATED 
    SEPTEMBER 5, 1997; AND LOAN AGREEMENT DATED SEPTEMBER 5, 1997.


ADDITIONAL TERMS AND CONDITIONS

1.  Borrower and any co-maker and endorser hereof and any other party hereto 
    and any guarantor hereof (collectively "Obligors") and each of them: (i) 
    waive(s) presentment, demand, notice of demand, protest, notice of 
    protest and notice of nonpayment and any other notice required to be 
    given under the law to any of Obligors, in connection with the delivery, 
    acceptance, performance, default or enforcement of this Note, or any 
    endorsement or guaranty of this Note or of any document or instrument 
    evidencing any security for payment of this Note; and (ii) consent(s) to 
    any and all delays, extensions, renewals or other modifications of this 
    Note or waivers of any term hereof or release or discharge by Bank of 
    any of Obligors or release substitution or exchange of any security for 
    the payment hereof or the failure to act on the part of Bank or any 
    indulgence shown by Bank, from time to time and in one or more instances 
    (without notice to or further assent from any of Obligors) and agree(s) 
    that no such action, failure to act, or failure to exercise any right or 
    remedy on the part of the Bank shall in any way affect or impair the 
    obligations of any Obligor or be construed as a waiver by Bank of, or 
    to otherwise affect, any of Bank's rights under this Note, under any 
    endorsement or guaranty of this Note, or under any document or 
    instrument evidencing any security for payment of this Note.

2.  Upon the occurrence of any of the following events of default, this Note 
    and any other obligation or liability of Borrower to the Bank shall, at 
    the option of the Bank, become immediately due and payable: (1) default 
    in the performance of any liability or obligation of Borrower or of any 
    co-maker, endorser, guarantor or surety of any liability of Borrower to 
    the Bank, including default in the payment of any part of the principal 
    of or interest upon this Note as the same becomes due; (2) failure of 
    Borrower promptly to furnish additional security when requested by the 
    Banks to do so; (3) Depreciation in value of the collateral or any 
    additions thereto or substitutions thereof, or any part thereof, to the 
    extent that this Note is not regarded by the Bank as properly secured; 
    (4) determination by an officer of the Bank that the collateral has 
    become unsatisfactory to the Bank; (5) determination by an officer of 
    the Bank that a material adverse change has occurred in the financial 
    condition of Borrower or of any co-maker, endorser, guarantor or surety 
    thereof; (6) any other event which causes the Bank, in good faith, to 
    deem itself insecure; (7) the events of default as set forth in the Loan 
    Agreement dated September 5, 1997 by and among Borrower and Bank.
    
3.  If any one or more provisions of this Note shall for any reason be held 
    to be invalid, illegal or unenforceable, in whole or in part or in any 
    respect, or if any one or more of the provisions of this Note operate or 
    would prospectively operate to invalidate this Note, then and in either 
    of those events, such provision of provisions only shall be deemed null 
    and void and shall not affect any other provision of this Note and the 
    remaining provisions shall in no way be affected, prejudiced or 
    disturbed hereby.
    
4.  The Bank shall, to the extent allowable by law, be entitled to recover 
    reasonable attorneys' fees and other reasonable costs incurred in the 
    collection of this Note.

5.  No provision of this Note shall require the payment or permit the 
    collecting of interest in excess of the maximum rate permitted by 
    applicable law; and, if any sum is collected in access of the applicable 
    maximum rate it shall be construed as a mutual mistake of Borrower and 
    Bank and such excess sum shall be credited to principal or, if this Note 
    has been repaid in full, refunded to Borrower.
    
6.  This Note is delivered in and shall be construed under the laws of the 
    State of Kansas.

"Borrower                                   "Borrower"
                                          
New York Bagel Enterprises, Inc.            Lots A' Bagels, Inc.


                                          
By: /s/ Robert J. Geresi                    By: /s/ Robert J. Geresi
   --------------------------------            --------------------------------
   Robert J. Geresi, Chairman and              Robert J. Geresi, President
    Chief Executive Officer