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Exhibit 10.5  

 
 

SETTLEMENT AGREEMENT AND MUTUAL GENERAL RELEASE    
    

        This Settlement Agreement and Mutual General Release ("Agreement") is entered into by and between Anthony Wedo ("EMPLOYEE") and New World Restaurant
Group, Inc., ("NEW WORLD"). 

        For
purposes of this Agreement, EMPLOYEE shall be defined to include Anthony Wedo and anyone claiming or liable through him including, but not limited to, his past, present and future
agents, attorneys, representatives, heirs, executors, administrators, spouses and family. 

        For
purposes of this Agreement, NEW WORLD shall be defined to include New World Restaurant Group, Inc. and anyone claiming or liable through NEW WORLD including, but not limited
to, any and all parents, divisions, sister companies, subsidiaries, affiliates, and/or other related entities of NEW WORLD (whether or not such entities are wholly owned) and the predecessors,
successors and assigns of each of them. 

        The
term "Effective Date" shall refer to the date, seven (7) days after the Agreement is signed by EMPLOYEE on which date this Agreement becomes binding. 

RECITALS  

        WHEREAS, on or about October 1, 2003, EMPLOYEE resigned from his positions as an officer, director and employee of NEW WORLD; 

        WHEREAS,
on or about October 1, 2003, NEW WORLD accepted EMPLOYEE'S resignation; 

        WHEREAS,
EMPLOYEE and NEW WORLD seek to amicably resolve and settle any and all existing and/or potential claims and disputes of any nature that each party may have against the other
party; 

        NOW,
THEREFORE, in consideration of the foregoing and the covenants and agreements contained herein, the parties agree as follows: 

        1.     In
light of EMPLOYEE'S resignation, the Amended And Restated Employment Agreement entered into between EMPLOYEE and NEW WORLD on or about June 17, 2002, is hereby
terminated, and EMPLOYEE and NEW WORLD are each released from any and all obligations under the Amended And Restated Employment Agreement except that EMPLOYEE and NEW WORLD are still bound to adhere
to paragraphs 5.1 (Non-Competition), 5.2 (Separate Covenants), 5.3 (Non-Disclosure and Non-Solicitation), 5.4 (Corporation) and 6.11 (Indemnification). 

        2.     EMPLOYEE
hereby acknowledges that he has been paid all accrued salary and accrued vacation that were owed to him as of his date of resignation and that he has been
reimbursed for all outstanding business expenses. 

        3.     On
or before the Effective Date, EMPLOYEE hereby agrees to return to NEW WORLD all company property and equipment in EMPLOYEE'S possession, including, but not limited to,
all computer equipment (both hardware and software), office equipment, cellular telephones, credit cards, telephone or long distance cards, keys and identification cards. EMPLOYEE acknowledges that
his compliance with this paragraph is part of the consideration upon which NEW WORLD relies in executing this agreement; provided, however, that EMPLOYEE may retain his laptop computer and blackberry
once all company information has been deleted. 

        4.     After
the Effective Date and contingent upon EMPLOYEE'S compliance with paragraph 3 above, New World hereby agrees to pay EMPLOYEE a separation payment equal to
Five Hundred Eighty-Three Thousand Dollars ($583,000), which includes an automobile allowance in the amount of Eighteen Thousand Dollars ($18,000) (collectively, the "Separation Payment"). The
Separation Payment shall be payable to EMPLOYEE by NEW WORLD for a period of fifty-two (52) weeks commencing October 1, 2003, and ending September 30, 2004, with the
last payment being made no later than 

October 12,
2004, (the "Separation Payment Period") with payments to be made on NEW WORLD'S regularly scheduled pay dates for executive officers; provided, however, that the first payment shall
not be made until the first pay period following the Effective Date of this Agreement and that first payment shall be retroactive to October 1, 2003. During the Separation Payment Period, NEW
WORLD shall continue to pay EMPLOYEE'S medical, dental and life insurance premiums (in each case at a level commensurate with senior executives of NEW WORLD) through September 30, 2004, with
the EMPLOYEE continuing to pay that portion of his premiums that he has heretofore been paying. Thereafter, EMPLOYEE shall be eligible for COBRA. During the Separation Payment Period, EMPLOYEE shall
have no employment duties or obligations to NEW WORLD, and EMPLOYEE shall be permitted to be employed by a third-party subject to EMPLOYEE'S compliance with the non-compete and other
continuing obligations specified in paragraph 1 of this Agreement. 

        5.     NEW
WORLD and EMPLOYEE acknowledge and agree that EMPLOYEE holds Three Thousand Six Hundred Eighty-Nine (3,689) shares of NEW WORLD common stock and Twenty-
Seven Thousand Nine Hundred Seven (27,907) vested stock options, having an exercise price of Fifteen and 65/100ths Dollars ($15.65) per share. EMPLOYEE hereby agrees to waive, relinquish and/or
forfeit any and all unvested options under any of NEW WORLD'S stock option plans. 

        6.     EMPLOYEE
hereby releases and forever discharges NEW WORLD, its parents, divisions (including, but not limited to, Einstein Bros., New World Coffee, Manhattan Bagels,
Noah's Bagel and Chesapeake Bagel Bakery), subsidiaries, affiliates, sister companies, insurers and related entities and the past, present and future owners, trustees, shareholders, fiduciaries,
administrators, agents, directors, officers, employees, attorneys, and the predecessors, successors, and assigns of each of them (the "Company Released Parties") from and agrees not to participate in
any lawsuit against the Company Released Parties, except pursuant to Court Order, and/or to sue the Company Released Parties, for any and all claims, whether known or unknown, which he now has, has
ever had, or may have in the future against the Company Released Parties which arose from the beginning of time up to October 1, 2003. Without limiting the generality of the foregoing, this
General Release applies to any and all claims which in any way relate to, arise out of, or result from EMPLOYEE'S employment with NEW WORLD, including, but not limited to, any claims which could have
been asserted under any employment or other contract, any tort law (including defamation or invasion of privacy), and any claims that could have been raised under any state's Labor Code, any state's
Wage Claim Act, any state's Civil Rights and/or Discrimination Act, Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act ("ADEA") (except for rights or claims under ADEA
which may arise after the execution of this Agreement), or any other federal, state or local law, regulation, ordinance or common law claim. The foregoing general release shall not apply to
(i) any claims arising under this Agreement or (ii) any claims for which EMPLOYEE is entitled to indemnification from NEW WORLD. 

        7.     Except
for claims arising from conduct committed personally by EMPLOYEE which constitute fraud or willful misconduct and which were unknown by NEW WORLD's Board of
Directors at the time of EMPLOYEE'S resignation and which expose NEW WORLD to liability in terms of monetary damages, fines or administrative sanctions, NEW WORLD hereby releases and forever
discharges EMPLOYEE from, and agrees not to sue EMPLOYEE for, any and all claims, whether in EMPLOYEE'S capacity as an officer, director, or shareholder of NEW WORLD, whether known or unknown, which
it now has, has ever had, or may have in the future against EMPLOYEE which arose from the beginning of time up to October 1, 2003. For purposes of this paragraph, a claim is "known" if on
October 1, 2003, the information was in the possession of NEW WORLD'S Board of Directors, Grant Thornton, Deloitte or Proskauer Rose, LLP. 

REPRESENTATIONS AND ACKNOWLEDGMENTS  

        8.     EMPLOYEE
expressly warrants and represents that he has not transferred or assigned to any other person, firm or corporation or other legal entity any claims, rights, or
causes of action which he might have against the Company Released Parties. 

        9      NEW
WORLD expressly warrants and represents that it has not transferred or assigned to any other person, firm or corporation or other legal entity any claims, rights or
causes of action which it may have against EMPLOYEE. 

        10.   EMPLOYEE
hereby warrants and represents that he has not brought and will not bring any legal or administrative action against the Company Released Parties. 

        11.   NEW
WORLD hereby covenants and represents that it has not brought and will not bring any legal or administrative action against EMPLOYEE in connection with claims being
released under this Agreement. 

        12.   The
terms and conditions of this Agreement are confidential. 

        a.     Except
as may be required to enforce this Agreement or as required by law, EMPLOYEE hereby warrants and represents that he will not reveal or engage in any action which
he knows or has reason to believe will result in the revelation of any information concerning the negotiations and/or terms of this Agreement to anyone including, but not limited to, past, present and
future employees of NEW WORLD; provided, however, that EMPLOYEE may reveal the terms of this Agreement to any accountant that he may retain with respect to tax reporting or any attorney hired to
represent EMPLOYEE or as required by law; however, EMPLOYEE shall instruct said individuals that the terms of this Agreement are confidential and are to be maintained as such. 

        b.     Except
as may be required to enforce this Agreement or as required by law, NEW WORLD warrants and represents that it will not reveal or engage in any action which it
knows or has reason to believe will result in the revelation of any information concerning the negotiations and/or terms of this Agreement to anyone including, but not limited to, past, present, and
future employees of NEW WORLD; provided, however, that NEW WORLD may reveal the terms of this Agreement to its officers, directors, accountants, attorneys, advisors, consultants, and insurers in the
normal course of business; however, NEW WORLD shall instruct said individuals that the terms of this Agreement are confidential and are to be maintained as such. 

        c.     Because
the actual damages which would result from a breach of the obligations set forth above in paragraphs 12(a) and 12(b) are uncertain and would be impractical or
extremely difficult to fix, EMPLOYEE promises to pay NEW WORLD $20,000 as liquidated damages for each such violation of his obligations under paragraph 12(a) and NEW WORLD hereby agrees to pay
EMPLOYEE $20,000 as liquidated damages for each such violation of its obligations under paragraph 12(b); provided, however, that the party alleging the breach has the burden of proving that the
breach was committed by the other party. Notwithstanding the foregoing, EMPLOYEE and NEW WORLD agree that either party may enforce any other provision of this Agreement by exercising any rights or
remedies it may have in law or in equity, including specific performance. 

MISCELLANEOUS TERMS  

        13.   In
compliance with the requirements of the ADEA, as amended by the Older Worker's Benefit Protection Act of 1990, EMPLOYEE acknowledges by his signature below that he
has read and understands this Agreement and specifically understands the following: 

	a.
	That
he has been advised in writing to consult with an attorney prior to executing this Agreement.

	b.
	That
he is releasing NEW WORLD from, among other things, any claim that he might have against it pursuant to the ADEA as amended by the Older Worker's Benefit Protection Act of 1990.

	c.
	That
this Agreement does not cover any rights or claims that may arise under the ADEA after the date of execution of this Agreement.

	d.
	That
he has been given a period of up to at least twenty-one (21) days in which to consider this Agreement. 

	e.
	That
he may revoke this Agreement during the seven (7) day period following the execution of this Agreement, and that this Agreement will not become binding and effective until
the seven (7) day revocation period has expired. 

        14.   Nothing
contained herein shall be construed as an admission by either party hereto of any wrongdoing of any kind. 

        15.   In
the event that either of the parties must resort to legal action in order to enforce any provision or right under this Agreement or to defend such suit, the
prevailing party shall be entitled to receive reimbursement from the non-prevailing party or parties for all reasonable attorneys' fees and costs incurred in the litigation of such suit. 

        16.   This
Agreement, the surviving terms of the Amended And Restated Employment Agreement, and EMPLOYEE'S 1994 Stock Plan Stock Option Agreement constitute the entire
agreement and understanding between the parties with respect to the subject matter hereof and all prior negotiations, agreements, understandings, written or oral, between the parties are deemed
superseded and are replaced hereby. No provision may be changed, waived or modified, except in writing, signed by the parties hereto. 

        17.   This
Agreement shall in all respects be interpreted, enforced and governed by and under the laws of the State of Colorado applicable to instruments, persons and
transactions which have legal contacts and relationships solely within the State of Colorado. 

        IN
WITNESS WHEREOF, the parties have set their hands and seals as of the day and year written below. 

	Dated: October 17, 2003	 	 	 	ANTHONY WEDO
	

 	
 	

By:	
 	

/s/  ANTHONY WEDO      

	 	 	 	 	ANTHONY WEDO
	

Dated: October 25, 2003	
 	

 	
 	

NEW WORLD RESTAURANT GROUP, INC.
	

 	
 	

By:	
 	

/s/  PAUL J.B. MURPHY, III      

	 	 	 	 	Name	 	Paul J.B. Murphy, III
	 	 	 	 	Title	 	Chairman and Chief Executive Officer

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Exhibit 10.6  

 
 

CONSULTING AGREEMENT    
    

        This Consulting Agreement (the  "Agreement") is
entered into as of December 8, 2003, by and between New
World Restaurant Group, Inc., a Delaware corporation (the  "Company"), and
Jill B. W. Sisson,
Attorney at Law and sole practitioner (the  "Consultant").

PRELIMINARY STATEMENTS  

        A.    The
Company is a Delaware corporation primarily engaged in the operation of bagel bakeries. 

        B.    Consultant
is knowledgeable and experienced in commercial, corporate and securities legal matters affecting the business and affairs of the Company. 

        C.    The
Company desires to retain Consultant to provide legal, consulting and advisory services to the Company, in general, and to act in the capacities of general corporate
counsel and corporate secretary, in particular, in connection with the Company's ongoing business activities under the terms and conditions set forth herein, and Consultant desires to be so retained. 

        NOW,
THEREFORE, for good, valuable and binding consideration, the receipt and sufficiency of which we hereby acknowledged, the parties hereto, intending to be legally bound hereby, agree
as follows: 

STATEMENT OF AGREEMENT  

        1.    Retention as Independent Consultant.    The Company hereby retains Consultant as an independent advisor (not as
an employee) on a month-to-month basis beginning on the date hereof and subject to termination as provided herein. In such capacity, Consultant shall perform the Services
including those Services further detailed on Schedule I hereof. Consultant shall be and at all times remain an independent Consultant of the
Company. Neither the Company nor Consultant shall be considered or held to be a partner, limited partner, associate or agent of the other, or be joint venturers with one another. Neither the Company
nor Consultant shall be authorized by the other to contract any debt, liability or obligation for or on behalf of the other. As an independent Consultant, Consultant shall accept any directions issued
by the Board and the Executive Officers of the Company (through its designated representatives) pertaining to the goals to be attained and the results to be achieved, but shall be solely responsible
for the means and method of work in which it will perform Services under this Agreement. Consultant agrees to complete all Services in the agreed upon timeframe. To do so, Consultant shall determine
her own working hours and schedule and shall not be subject to the Company's personnel policies and procedures. The Company will not set a minimum or maximum number of hours that the Consultant may
work in any given day. 

        2.    Compliance with Legal Requirements.    The Company shall not provide workers' compensation, disability
insurance, Social Security or unemployment compensation coverage or any other statutory benefit to Consultant, her agents or employees or any sub-consultants. Consultant shall comply at
her expense with all applicable provisions of workers' compensation laws, unemployment compensation laws, Federal Social Security law, the Fair Labor Standards Act, federal, state and local income tax
laws, and all other applicable federal, state and local laws, regulations and codes relating to terms and conditions required to be fulfilled by independent consultants. Other than as stated in this
Agreement, Consultant shall be solely responsible and liable for all expenses, costs, liabilities, assessments, taxes, maintenance, insurance, undertakings and other obligations incurred by
Consultant, her agents or employees or any sub consultants. 

        3.    Compensation.    

        (a)    Consulting Fee.    For the year 2004, the Company shall pay Consultant a consulting fee on the first day of
each month an amount equal to a rate of $15,833.33 per month for the Services performed in the previous month (the "Consulting Fees").

        (b)    Annual Additional Premium Compensation.    Annual additional premium compensation ("APC"), established at the
beginning of each year, will be based on two separate components, Company Performance and Personal Performance, each equally important and worth 50% of the total potential payout. The APC for the year
2004 shall be $114,000. 

        The
first component will be based on the Company Performance as measured by its Positive Cash Flow, which is EBITDA less interest and capital expenditures. The APC will be
proportionately earned to the extent the Target EBITDA, as set forth in the Business Plan approved by the Board of Directors for the current year, before deducting the expense of the corporate bonus
pool, exceeds the Company's break even-cash. For every dollar the Company earns over the break-even cash threshold, a fixed percentage will be applied to the total potential
payout, up to the maximum eligible APC. In the event that the Target EBITDA is substantially exceeded, an additional APC may be paid, at the discretion of the Board. 

        The
second component will be based on Personal Performance Objectives [PPO] that will be determined by the Chief Executive Officer of the Company at the beginning
of each year and discussed with the Consultant. 

        In
order to be eligible for any APC, the Company must have experienced a positive Cash Flow. 

        For
each year commencing in 2005, the parties shall agree upon the APC for that year. 

        (c)    Grant of Option.    Pursuant to the New World Restaurant Group, Inc. 2004 Executive Employee Incentive
Plan (the "Plan") and subject to the terms and conditions of this Agreement, the Company hereby grants to the Consultant an option (the "Option") to purchase seventy five thousand (75,000) shares of
common stock of the Company which shall be priced and vested in accordance with Schedule II attached hereto. 

        4.    Expense Reimbursement.    The Company shall reimburse Consultant for her or her reasonable and necessary
out-of-pocket expenses incurred at the request of the Company or with prior approval of the Company, subject to provision of reasonable supporting documentation related
thereto. Such reimbursable expenses include, but are not limited to, travel expenses such as hotels, meals and transportation while traveling on business pursuant to this Agreement, professional
association fees and dues and costs and expenses relating to continuing education. 

        5.    Place of Performance.    The Consultant shall perform the services in such locations as the Consultant and the
Company shall agree. 

        6.    Information Furnished.    The Company shall furnish the Consultant with such information as the Consultant may
reasonably request to perform services hereunder. 

        7.    Confidentiality.    For the purposes of this Agreement, the term "Confidential
Information" means any information regarding the Company's (or its affiliates') business that is (1) not generally known to the public and was acquired through the
expenditure of the Company's time, effort and/or funds, including (but not limited to) information concerning its clients, accounts, inventory, personnel, financial and performance data, financial and
risk management models and related translation code, existing and contemplated business, investment and financial methods, analysis, strategy, concepts, practices and know-how; client,
principal, investor, vendor and employee lists and records; customer and principal preferences and relationship information, market development information, procedures and confidential or proprietary
information relating to the Company's policies, strategies, administration or operation, and (2) acquired by Consultant during the term of this Agreement, as well 

as
any additional information that may be classified as proprietary or constitute a trade secret under applicable state or federal law. 

        In
addition to the Consultant's duty of confidentiality to the Company as a practicing attorney, Consultant shall not, directly or indirectly, disclose any Confidential Information to
any person or entity that is not an employee, officer, director, agent or affiliate of the Company unless such disclosure is authorized in advance by the Company or required by law. Consultant will
not, during the term of this Agreement or any time thereafter, directly or indirectly, use any Confidential Information in any manner that is not directly and primarily in the best interests of the
Company unless expressly authorized to do so by the Board. Consultant acknowledges that the Confidential Information is the sole property of the Company, and that the Company would be irreparably
damaged if such Confidential Information was misappropriated or disclosed to third parties, in violation of this Agreement. Upon the termination of this Agreement, Consultant must promptly return any
and all records, information, papers, media, recordings, files or computer files or diskettes (and all copies, duplicates or facsimiles of any of the foregoing) of the Company and its affiliates
(including parent and subsidiary entities) that relate in any way whatsoever to any Confidential Information. 

        9.    Non-Solicitation.    During Consultant's work for Company and for a period of twelve months after
termination of that work, Consultant shall not, without Company's prior written consent, directly or indirectly: 

        (a)   cause
or attempt to cause any employee, agent or consultant of Company or any Company affiliate to terminate his or her employment, agency or consultant relationship
with Company or any Company affiliate; or interfere or attempt to interfere with the relationship between Company and any employee, agent or consultant; or hire or attempt to hire any employee, agent
or consultant of Company or any Company affiliate. 

        (b)   solicit
business from or conduct business with any customer or client served by Company at any point during Consultant's work for Company; or solicit business from or
conduct any business with any person or entity that was, during Consultant's work for Company, solicited or identified as a business prospect by Consultant or any other Company employee, agent or
consultant; or interfere or attempt to interfere with any transaction, agreement, prospective agreement, business opportunity or business relationship in which Company or any affiliate was involved at
any point during Consultant's work for Company. 

        8.    Severability.    Whenever possible, each provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction,
such invalidity, illegality or unenforceability will not affect any other provision or the validity, legality or enforceability of such provision in any other jurisdiction, but this Agreement will be
performed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been contained herein. It is the intent of the parties hereto that the
provisions hereof be enforceable to the full extent permitted by applicable law. 

        9.    Termination.    This Agreement shall be terminable by any party, without cause, hereto upon thirty
(30) days' prior written notice. In addition, the Company may, upon notice to Consultant, immediately terminate this Agreement if Consultant breaches any of the provisions of this Agreement. 

        10.    Complete Agreement.    This Agreement embodies the complete agreement and understanding between the parties and
supersedes and preempts any prior understandings, agreements or representations by or between the parties, written or oral, which may have related to the subject matter hereof in any way. 

        11.    Remedies.    Each of the parties to this Agreement will be entitled to enforce its rights under this Agreement
specifically, to recover damages by reason of any breach of any provision of this Agreement and to exercise all other rights existing in her or its favor. The parties hereto agree and acknowledge that
money damages may not be an adequate remedy for any breach or threatened breach of the provisions of this Agreement and that any party may in its sole discretion apply to any court of 

law
or equity of competent jurisdiction for specific performance and/or injunctive relief in order to enforce or prevent any violations of the provisions of this Agreement. 

        12.    Amendments and Waivers.    Any provision of this Agreement may be amended or waived only with the prior written
consent of the Company and Consultant. 

        13.    Notices.    Any notice provided for in this Agreement must be in writing and must be either personally
delivered, or mailed by first class mail (postage prepaid and return receipt requested) or sent by reputable overnight courier service or facsimile transmission, to the recipient at the address below
indicated: 

        To
the Company: 

New World Restaurant Group, Inc.

1687 Cole Boulevard

Golden, CO 80401

        To
the Consultant: 

Jill B. W. Sisson

5808 Crestbrook Circle

Morrison, CO 80465

Fax: 303-697-2125

or
such other addresses or to the attention of such other person as the recipient party shall have specified by prior written notice to the sending party. Any notice under this Agreement will be
deemed to have been given when so delivered or sent or if mailed, five days after so mailed. 

        14.    Applicable Law.    This Agreement shall be governed by and construed in accordance with the laws of the State
of Colorado without regard to conflict of law principles, and any action brought to enforce this Agreement shall be brought in Denver County, Colorado. 

        15.    Indemnification.    Each party shall indemnify and hold harmless the other party against and from any and all
liabilities, damages and expenses (including attorney fees) made against or incurred by the other party from any third party source for any damages caused, or contributed to, by a breach of its
obligations under this Agreement. The Company shall indemnify and hold Consultant harmless against all liabilities, damages and expenses (including attorney fees) made against or incurred by
Consultant arising out of the performance of services pursuant to this agreement and the Company shall name Consultant as an additional insured party under any directors and officers insurance policy
it maintains in force, and for six months thereafter, if the policy is a "claims made" policy. 

        16.    Parties Bound.    This Agreement shall be binding on the parties hereto, their respective heirs, legatees,
legal representatives, successors and assigns including but not limited to any successor of the Company
upon a merger, reorganization or recapitalization except that Consultants' duty to perform services hereunder shall not be assignable. 

        17.    Entirety.    This Agreement constitutes the entire agreement of the parties hereto with respect to the subject
matter hereof. 

[Signature
Page Follows] 

IN
WITNESS HEREOF, the parties hereto have executed this Consulting Agreement as of the date first written above. 

	 	 	NEW WORLD RESTAURANT GROUP, INC.
	

 	
 	
By:	

/s/  PAUL MURPHY      

	 	 	Name:	Paul Murphy
	 	 	Title:	Chief Executive Officer and Acting Chairman of the Board of Directors
	
 	
 	

JILL B. W. SISSON
	

 	
 	
/s/  JILL B. W. SISSON      

	 	 	Name:	Jill B. W. Sisson
	 	 	Title:	Consultant

 
 

SCHEDULE I
  
    Description of Services    
    

        Consultant shall provide legal, consulting and advisory services to the Company as deemed appropriate or desirable by the Board, which Services shall include
those customarily performed by General Counsel and Corporate Secretary for publicly held corporations. 

 
 

SCHEDULE II
  
    Grant of Option    
    

        1.    Description.    Pursuant to the New World Restaurant Group, Inc. 2004 Executive Employee Incentive Plan
(the "Plan") and subject to the terms and conditions of this Agreement, the Company grants to the Consultant an option (the "Option") to purchase seventy five thousand (75,000) shares of common stock
of the Company (the "Stock") at the price which each share of Stock subject to an Option may be purchased, as determined in accordance with subsection     of the Plan, which price
shall be the "Option Price." The grant is made and the Option is effective as of the date of execution of this Agreement (the "Effective Date"). The Option is not intended to qualify as an incentive
stock option under Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"). 

        2.    Requirements for Exercise; Vesting.    The Option shall vest and become exercisable as provided on the following
schedules 

Employment Related Vesting

12,500
of the Options shall vest and become exercisable on January 1, 2005 if the Option Holder has been continuously engaged by the Company from the date hereof pursuant to the Agreement until
December 31, 2004. 

12,500
of the Options shall vest and become exercisable on January 1, 2006 if the Option Holder has been continuously engaged by the Company from the date hereof pursuant to the Agreement until
December 31, 2005. 

12,500
of the Options shall vest and become exercisable on January 1, 2007 if the Option Holder has been continuously engaged by the Company from the date hereof pursuant to the Agreement until
December 31, 2006. 

Company Performance Based Vesting

12,500
of the Options shall vest and become exercisable on January 1, 2005 upon subject to the attainment by the Company of either of the following percentages of the GAAP EBITDA contained in
the Business Plan that was approved and adopted by the Board for the year 2004, or 50% of Target APC, whichever is greater: 

	Attained Percentage of GAAP

EBITDA in the Business Plan

approved and adopted by the Board

for the year 2004
	 	Percentage of Option Exercisable Upon Achievement of Performance Criteria
	 	

Options

Exercisable

	100%	 	100%	 	12,500
	At least 50% of the Target APC	 	  50%	 	  6,250

12,500
of the Options shall vest and become exercisable on January 1, 2006 upon subject to the attainment by the Company of either of the following percentages of the GAAP EBITDA contained in
the Business Plan that was approved and adopted by the Board for the year 2005, or 50% of Target APC, whichever is greater: 

	Attained Percentage of GAAP

EBITDA in the Business Plan

approved and adopted by the Board

for the year 2005
	 	Percentage of Option Exercisable Upon Achievement of Performance Criteria
	 	

Options

Exercisable

	100%	 	100%	 	12,500
	At least 50% of the Target APC	 	  50%	 	  6,250

12,500
of the Options shall vest and become exercisable on January 1, 2007 upon subject to the attainment by the Company of either of the following percentages of the GAAP EBITDA 

contained
in the Business Plan that was approved and adopted by the Board for the year 2006, or 50% of Target APC, whichever is greater: 

	Attained Percentage of GAAP

EBITDA in the Business Plan

approved and adopted by the Board

for the year 2006
	 	Percentage of Option Exercisable Upon

Achievement of Performance Criteria
	 	

Options

Exercisable

	100%	 	100%	 	12,500
	At least 50% of the Target APC	 	  50%	 	  6,250

        If
at any time the number of shares of Stock that are covered by the vested portion of the Option includes a fractional share, the number of shares of Stock as to which the Option shall
be actually exercisable shall be rounded down to the next whole share of Stock. 

        The
Option shall not be exercisable as to any shares of Stock as to which the vesting requirement is not satisfied, regardless of the circumstances under which the Option Holder's
service with the Company is terminated. The number of shares of Stock as to which the Option may be exercised shall be cumulative; so that once the Option shall become exercisable as to any shares of
Stock it shall continue to be exercisable as to such shares until expiration or termination of the Option. 

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CONSULTING AGREEMENT

SCHEDULE I Description of Services

SCHEDULE II Grant of Option

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