Document:

Exhibit
10.51

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES
LAWS.  NEITHER THIS NOTE NOR ANY
INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO,
REGISTRATION.

THE HOLDER OF THIS NOTE, BY ITS ACCEPTANCE HEREOF,
AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH NOTE PRIOR TO THE DATE WHICH
IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE OF THIS NOTE AND THE
LAST DATE ON WHICH NEW WORLD RESTAURANT GROUP, INC. (“THE COMPANY”) OR
ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS NOTE (OR ANY PREDECESSOR OF
SUCH NOTE)(THE “RESALE RESTRICTION TERMINATION DATE”), ONLY (A) TO THE
COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE NOTES ARE ELIGIBLE
FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY BELIEVES IS A
“QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS
THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER
THE SECURITIES ACT, (E) TO AN INSTITUTIONAL “ACCREDITED INVESTOR” WITHIN THE
MEANING OF SUBPARAGRAPH (A)(1), (2), (3) or (7) OF RULE 501 UNDER THE
SECURITIES ACT THAT IS ACQUIRING THE NOTE FOR ITS OWN ACCOUNT, OR FOR THE
ACCOUNT OF SUCH AN INSTITUTIONAL “ACCREDITED INVESTOR,” FOR INVESTMENT PURPOSES
AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT OR (F) PURSUANT TO ANOTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT,
SUBJECT TO THE COMPANY’S AND THE TRUSTEE’S, OR REGISTRAR’S, AS APPLICABLE, RIGHT
PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (D), (E) OR (F) TO
REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER
INFORMATION SATISFACTORY TO EACH OF THEM, AND IN EACH OF THE FOREGOING CASES,
AN ASSIGNMENT IN THE FORM APPEARING ON THE OTHER SIDE OF THIS NOTE IS COMPLETED
AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE OR REGISTRAR.  THIS LEGEND SHALL BE REMOVED UPON THE
REQUEST OF A HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.

THIS NOTE IS SUBJECT TO A REGISTRATION RIGHTS
AGREEMENT, DATED AS OF JULY 8,  2003,
BETWEEN THE COMPANY AND JEFFERIES & COMPANY, INC., A COPY OF WHICH IS ON
FILE WITH THE SECRETARY OF THE COMPANY.

THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY
OR A NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY.  

 

THIS NOTE IS NOT EXCHANGEABLE FOR NOTES REGISTERED IN THE NAME OF A
PERSON OTHER THAN THE DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS NOTE (OTHER
THAN A TRANSFER OF THIS NOTE AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE
DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER
NOMINEE OF THE DEPOSITORY OR BY THE DEPOSITORY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITORY) MAY BE
REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”),
TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH
OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS MAY BE
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH
AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

 

CUSIP No.: 649271AK9

NEW WORLD RESTAURANT GROUP, INC.

SENIOR SECURED NOTE DUE
2008

	
  No.
  1

  	
   

  	
  $9,000,000

  

 

New World Restaurant Group, Inc., a Delaware
corporation (the “Company,” which term includes any successor entity),
for value received promises to pay to CEDE & CO. or registered assigns, the
principal sum of NINE MILLION DOLLARS AND 00/100, on July 1, 2008.

	
  Interest Payment Dates:

  	
   

  	
  July 1 and January 1

  
	
  Record Dates:

  	
   

  	
  June 15 and December 15

  

 

Reference is made to the further provisions of this
Note contained herein, which will for all purposes have the same effect as if
set forth at this place.

 

IN WITNESS WHEREOF, the Company has caused this Note
to be signed manually or by facsimile by its duly authorized officers.

	
   

  	
  New World Restaurant
  Group, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:  Anthony D. Wedo

  
	
   

  	
  Title:    Chief Executive Officer

  

Dated: July 8, 2003

 

Certificate
of Authentication

This is one of the Senior Secured Notes due 2008 referred
to in the within-mentioned Indenture.

 

	
   

  	
  The Bank of New York,

  
	
   

  	
  as Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Dated:
  July 8, 2003

  	
  By:

  	
   

  
	
   

  	
  Name:  Margaret Ciesmelewski

  
	
   

  	
  Title:

  

 

{REVERSE OF NOTE}

NEW WORLD RESTAURANT
GROUP, INC.

Senior Secured Note due 2008

1.             Interest.  New World Restaurant Group, Inc., a Delaware
corporation (the “Company”), promises to pay interest on the principal
amount of this Note at the rate of (a) 13.0% per annum plus (b) any additional
interest required under Section 4 of the Registration Rights Agreement,
plus (c) during the occurrence and continuance of a Default or Event of
Default, 2.0% per annum.  The Company
will pay interest semi-annually in arrears on each July 1 and January 1 (each
an “Interest Payment Date”), commencing January 1, 2004.  Interest on the Notes will accrue from the
most recent date on which interest has been paid on this Note or, if no
interest has been paid, from July 8, 2003. 
Interest will be computed on the basis of a 360-day year of twelve
30-day months.

2.             Method
of Payment.  The Company shall pay
interest on the Notes to the Persons who are the registered Holders as of the
close of business on the Record Date immediately preceding the applicable
Interest Payment Date even if the Notes are cancelled on registration of transfer
or registration of exchange after such Record Date.  Holders must surrender Notes to a Paying Agent to collect
principal payments.  The Company shall
pay principal and interest in money of the United States that at the time of
payment is legal tender for payment of public and private debts (“U.S. Legal
Tender”).  The Notes will be payable
both as to principal and to interest at the office or agency of the Company,
or, at the option of the Company, payment of interest may be made by its check
payable in such U.S. Legal Tender and mailed to the Holders at their respective
registered addresses as set forth in the register of Holders.  If the Company defaults in a payment of
interest on the Notes, it shall pay the defaulted interest plus any interest
payable on the defaulted interest in accordance with Section 2.16 of the
Indenture.

3.             Paying
Agent and Registrar.  Until
otherwise designated by the Company, the Registrar and Paying Agent for the
Notes shall be The Bank of New York, the trustee (the “Trustee”) under
the Indenture (as defined below), having an address 101 Barclay Street — 8W,
New York, New York 10286, Attention: Corporate Trust Division.  In addition, until otherwise designated by
the Company, the Company’s office or agency maintained in the Borough of
Manhattan, in the City of New York at which the Notes may be presented for
payment or for transfer or exchange will be the office of the Trustee.  The Company may change any Paying Agent,
Registrar or co-Registrar without notice to the Holders.

4.             Indenture.  The Company issued the Notes under an
Indenture, dated as of  July 8, 2003
(the “Indenture”), among the Company, the Subsidiary Guarantors and the
Trustee.  Capitalized terms herein are
used as defined in the Indenture unless otherwise defined herein.  The terms of the Notes include those stated
in the Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939 (15 U.S. Code §§ 77aaa-77bbbb) (the “TIA”),
as in effect on the date of the Indenture until such time as the Indenture is
qualified under the TIA, and thereafter as in effect on the date on which the
Indenture is qualified under the TIA. 
Notwithstanding anything to the contrary herein, the Notes are subject
to all such terms, and 

 

Holders are referred to the Indenture and the TIA for a statement of
them.  Payment on the Notes is
guaranteed on a senior basis, jointly and severally, by the Subsidiary
Guarantors pursuant to Article Eleven of the Indenture.  Each Holder, by accepting a Note, agrees to
be bound by all of the terms and provisions of the Indenture, as the same may
be amended from time to time.

5.             Optional
Redemption.  The Notes will be
redeemable, at the Company’s option, in whole at any time or in part from time
to time, on and after July 1, 2004, at the following redemption prices
(expressed as percentages of the principal amount) if redeemed during the
twelve-month period commencing on July 1 of the year set forth below,
plus, in each case, accrued and unpaid interest thereon to the date of
redemption:

	
  Year

  	
   

  	
  Percentage

  	
   

  
	
  2004

  	
   

  	
  104.000

  	
  %

  
	
  2005

  	
   

  	
  103.000

  	
  %

  
	
  2006

  	
   

  	
  102.000

  	
  %

  
	
  2007

  	
   

  	
  101.000

  	
  %

  
	
  2008 and thereafter

  	
   

  	
  100.000

  	
  %

  

Notwithstanding the foregoing, at any time on or prior
to July 1, 2004, the Company may redeem up to 33 1/3% of the aggregate
principal amount of the Notes originally issued at a redemption price of
113.000% of the principal amount thereof, plus accrued and unpaid interest
thereon to the redemption date, with the net proceeds of any Equity Offering; provided that at least 66 2/3% of the
aggregate principal amount of the Notes originally issued under this Indenture
remains outstanding immediately after the occurrence of such redemption; and provided, further, that such redemption
occurs within 90 days of the date of the closing of such Equity Offering.

6.             Notice
of Redemption.  Notice of redemption
will be mailed by first class mail at least 30 days but not more than 60 days
before the redemption date to each Holder, at each of such Holder’s registered
address, whose Notes are to be redeemed. 
If fewer than all of the Notes are to be redeemed at any time, selection
of Notes for redemption will be made by the Trustee in compliance with the
requirements of the national securities exchange, if any, on which the Notes
are listed, or, if the Notes are not so listed, on a pro rata basis, by lot or
by such method as the Trustee deems to be fair and appropriate; provided that Notes of $1,000 or less may
not be redeemed in part.

Except as set forth in the Indenture, if monies for
the redemption of the Notes called for redemption shall have been deposited
with the Paying Agent for redemption on such redemption date, then, unless the
Company defaults in the payment of such redemption price plus accrued interest,
if any, the Notes called for redemption will cease to bear interest from and
after such redemption date, and the only remaining right of the Holders of such
Notes will be to receive payment of the redemption price plus accrued interest,
if any, as of the redemption date upon surrender to the Paying Agent of the
Notes redeemed.

 

7.             Offers
to Purchase.  Section 4.14 of the
Indenture provides that, upon the occurrence of a Change of Control, and
subject to further limitations contained therein, the Company will make an
offer to purchase certain amounts of the Notes in accordance with the
procedures set forth in the Indenture.

8.             Registration
Rights.  Pursuant to the
Registration Rights Agreement dated as of the date of the Indenture among the
Company and the Holders of the Initial Notes, the Company will be obligated to
consummate an exchange offer pursuant to which the Holder of this Note shall
have the right to exchange this Note for the Company’s Senior Secured Notes due
2008, Series B (the “Exchange Notes”), which have been registered under
the Securities Act, in like principal amount and having terms identical in all
material respects as the Initial Notes. 
The Holders of the Initial Notes shall be entitled to receive certain
additional interest payments in the event such exchange offer is not
consummated and upon certain other conditions, all pursuant to and in
accordance with the terms of the Registration Rights Agreement.

9.             Denominations;
Transfer; Exchange.  The Notes are
in registered form, without coupons, in denominations of $1,000 and integral
multiples of $1,000.  A Holder shall
register the transfer of or exchange of Notes in accordance with the
Indenture.  The Registrar or
co-Registrar may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and to pay certain transfer taxes or
similar governmental charges payable in connection therewith as permitted by
the Indenture.  Subject to certain
provisions in the Indenture, the Registrar or co-Registrar need not register
the transfer of or exchange of any Notes or portions thereof selected for
redemption.  Also the Registrar or
co-Registrar need not register the transfer or exchange of any Note during a
period beginning at the opening of business 15 days before the mailing of a
notice of redemption of notes and ending at the close of business on the day of
such mailing.

10.           Persons
Deemed Owners.  The registered
Holder of a Note shall be treated as the owner of such Note for all purposes.

11.           Unclaimed
Money.  If money for the payment of
principal or interest remains unclaimed for two years (or such sooner period as
may be required by applicable abandoned property laws), the Trustee and the
Paying Agent will pay the money back to the Company.  After that, all liability of the Trustee and such Paying Agent
with respect to such money shall cease.

12.           Discharge
Prior to Redemption or Maturity.  If
the Company at any time deposits with the Trustee U.S. Legal Tender or U.S.
Government Obligations sufficient to pay the principal of and interest on the
Notes to redemption or maturity and complies with the other provisions of the
Indenture relating thereto, the Company will be discharged from certain
provisions of the Indenture and the Notes (including certain covenants, but
excluding its obligation to pay the principal of and interest on the Notes).

13.           Amendment;
Supplement; Waiver.  Subject to
certain exceptions, the Indenture or the Notes may be amended or supplemented
by the Company, the Trustee and with the written consent of the Holders of at
least a majority in aggregate principal amount of the Notes then outstanding,
and, subject to Section 6.07 of the Indenture, noncompliance with any 

 

provision of the Indenture or this Note may be waived with the written
consent of the Holders of a majority in aggregate principal amount of the Notes
then outstanding.  Without the consent
of any Holder, the parties thereto may amend or supplement the Indenture or the
Notes to, among other things, cure any ambiguity, defect or inconsistency,
provide for uncertificated Notes in addition to or in place of certificated
Notes, to provide for the assumption of the Company’s obligations to Holders in
the case of a merger or consolidation, to make any change that would provide
any additional rights or benefits to the Holders or that does not adversely
affect the legal right under the Indenture of any such Holder, or to comply
with the requirements of the U.S. Securities and Exchange Commission (the “SEC”)
in order to effect or maintain the qualification of the Indenture under the
TIA.  As provided in the Indenture,
there shall be no amendment, supplement or waiver without the consent of each
Holder of each Note affected thereby with respect to the circumstances
enumerated in Section 9.02 therein.

14.           Restrictive
Covenants.  The Indenture imposes
certain limitations on the ability of the Company and its Subsidiaries to,
among other things, incur additional Indebtedness or Liens, issue or sell its
Capital Stock, enter into transactions with Affiliates, cause to be effective
restrictions affecting Subsidiaries’ abilities to pay certain dividends or make
certain loans, merge or consolidate with any other Person, sell, assign,
transfer, lease, convey or otherwise dispose of all or substantially all of its
assets or adopt a plan of liquidation. 
Such limitations are subject to a number of important qualifications and
exceptions.  The Company must annually
report to the Trustee on compliance with such limitations.

15.           Successors.  When a successor assumes, in accordance with
the Indenture, all the Obligations of its predecessor under the Notes and the
Indenture, the predecessor will be released from those Obligations.

16.           Defaults
and Remedies.  If an Event of
Default occurs and is continuing, the Trustee or the Holders of at least 25% in
aggregate principal amount of Notes then outstanding may declare all the Notes
to be due and payable in the manner, at the time and with the effect provided
in the Indenture.  Holders may not
enforce the Indenture or the Notes except as provided in the Indenture.  The Trustee is not obligated to exercise any
of the rights or powers vested in it by the Indenture or the Notes and at the
order or direction of any Holders, unless it has received indemnity reasonably
satisfactory to it.  Subject to certain
limitations set forth in the Indenture, Holders of a majority in aggregate
principal amount of the Notes then outstanding may direct the Trustee in its
exercise of any trust or power.  The
Trustee may withhold from Holders notice of any continuing Default or Event of
Default (except in the case of a Default or Event of Default in payment of
principal or interest or a failure to comply with Article Five of the
Indenture) if it determines that withholding notice is in their interest.

17.           Trustee
Dealings with Company.  The Trustee
under the Indenture, in its individual or any other capacity, may become the
owner or pledgee of Notes and may otherwise deal with the Company, its
Subsidiaries or their respective Affiliates, as such, with the same rights it
would have as if it were not the Trustee.

18.           No
Recourse Against Others.  No past,
present or future director, officer, employee, incorporator or stockholder of
the Company or any Subsidiary Guarantor, as such, shall have any liability for
any Obligations of the Company or any Subsidiary Guarantor under 

 

the Notes or the Indenture, the Collateral Agreements, any Subsidiary
Guarantee, the Registration Rights Agreement or the Intercreditor Agreement or
for any claim based on, in respect of, or by reason of such obligations or
their creations.  Each Holder by
accepting a Note waives and releases all such liability.  Such waiver and release are part of the
consideration for the issuance of the Notes.

19.           Authentication.  This Note shall not be valid until the Trustee
or Authenticating Agent manually signs the certificate of authentication on
this Note.

20.           Governing
Law.  The laws of the State of New
York shall govern this Note and the Indenture.

21.           Abbreviations
and Defined Terms.  Customary
abbreviations may be used in the name of a Holder or an assignee, such as: TEN
COM (= tenants-in-common), TEN ENT (= tenants by the entireties), JT TEN (=
joint tenants with right of survivorship and not as tenants-in-common), CUST (=
Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).

22.           CUSIP
Numbers.  Pursuant to a
recommendation promulgated by the Committee on Uniform Security Identification
Procedures, the Company has caused CUSIP numbers to be printed on the Notes as
a convenience to the Holders.  No
representation is made as to the accuracy of such numbers as printed on the
Notes and reliance may be placed only on the other identification numbers
printed hereon.

The Company will furnish to any Holder upon written
request and without charge a copy of the Indenture.

Requests may be made to:  New World Restaurant Group, Inc., 1687 Cole Boulevard, Golden,
Colorado 80401, Attn:  Chief Executive
Officer.

 

SUBSIDIARY
GUARANTEE

For value received, CHESAPEAKE BAGEL FRANCHISE CORP.,
a New Jersey corporation, hereby unconditionally guarantees to the Holder of
the Note upon which this Subsidiary Guarantee is endorsed:  (a) the due and punctual payment of the
principal of, premium, if any, and interest on the Note, whether at maturity
acceleration, redemption or otherwise, (b) the due and punctual payment of
interest on the overdue principal of, premium, if any, and interest on the
Note, if any, to the extent lawful, (c) the due and punctual performance of all
other obligations of the Company to the Holders or the Trustee, all in
accordance with the terms set forth in the Indenture, and (d) in case of any
extension of time of payment or renewal of any Note or any of such other
obligations, the same will be promptly paid in full when due or performed in
accordance with the terms of the extension or renewal, whether at stated
maturity, by acceleration or otherwise. 
Capitalized terms used herein have the meanings assigned to them in the
Indenture unless otherwise indicated.

This Subsidiary Guarantee shall be binding upon each
Subsidiary Guarantor and its successors and assigns and shall inure to the
benefit of the successors and assigns of the Trustee and the Holder and, in the
event of any transfer or assignment of rights by any Holder or the Trustee, the
rights and privileges herein conferred upon that party shall automatically
extend to and be vested in such transferee or assignee, all subject to the
terms and conditions hereof and in the Indenture.

This Subsidiary Guarantee shall not be valid or
obligatory for any purpose until the certificate of authentication on the Note
upon which this Subsidiary Guarantee is noted shall have been executed by the
Trustee under the Indenture by the manual signature of one of its authorized
signatories.

	
   

  	
  CHESAPEAKE BAGEL FRANCHISE CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:  

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

SUBSIDIARY
GUARANTEE

For value received, WILLOUGHBY’S INCORPORATED, a
Connecticut corporation, hereby unconditionally guarantees to the Holder of the
Note upon which this Subsidiary Guarantee is endorsed:  (a) the due and punctual payment of the
principal of, premium, if any, and interest on the Note, whether at maturity
acceleration, redemption or otherwise, (b) the due and punctual payment of
interest on the overdue principal of, premium, if any, and interest on the
Note, if any, to the extent lawful, (c) the due and punctual performance of all
other obligations of the Company to the Holders or the Trustee, all in
accordance with the terms set forth in the Indenture, and (d) in case of any
extension of time of payment or renewal of any Note or any of such other
obligations, the same will be promptly paid in full when due or performed in
accordance with the terms of the extension or renewal, whether at stated
maturity, by acceleration or otherwise. 
Capitalized terms used herein have the meanings assigned to them in the
Indenture unless otherwise indicated.

This Subsidiary Guarantee shall be binding upon each
Subsidiary Guarantor and its successors and assigns and shall inure to the
benefit of the successors and assigns of the Trustee and the Holder and, in the
event of any transfer or assignment of rights by any Holder or the Trustee, the
rights and privileges herein conferred upon that party shall automatically
extend to and be vested in such transferee or assignee, all subject to the
terms and conditions hereof and in the Indenture.

This Subsidiary Guarantee shall not be valid or
obligatory for any purpose until the certificate of authentication on the Note
upon which this Subsidiary Guarantee is noted shall have been executed by the
Trustee under the Indenture by the manual signature of one of its authorized
signatories.

 

	
   

  	
  WILLOUGHBY’S INCORPORATED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:  

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

SUBSIDIARY
GUARANTEE

For value received, MANHATTAN BAGEL COMPANY, INC., a
New Jersey corporation, hereby unconditionally guarantees to the Holder of the
Note upon which this Subsidiary Guarantee is endorsed:  (a) the due and punctual payment of the
principal of, premium, if any, and interest on the Note, whether at maturity
acceleration, redemption or otherwise, (b) the due and punctual payment of
interest on the overdue principal of, premium, if any, and interest on the
Note, if any, to the extent lawful, (c) the due and punctual performance of all
other obligations of the Company to the Holders or the Trustee, all in
accordance with the terms set forth in the Indenture, and (d) in case of any
extension of time of payment or renewal of any Note or any of such other
obligations, the same will be promptly paid in full when due or performed in
accordance with the terms of the extension or renewal, whether at stated
maturity, by acceleration or otherwise. 
Capitalized terms used herein have the meanings assigned to them in the
Indenture unless otherwise indicated.

This Subsidiary Guarantee shall be binding upon each
Subsidiary Guarantor and its successors and assigns and shall inure to the
benefit of the successors and assigns of the Trustee and the Holder and, in the
event of any transfer or assignment of rights by any Holder or the Trustee, the
rights and privileges herein conferred upon that party shall automatically
extend to and be vested in such transferee or assignee, all subject to the
terms and conditions hereof and in the Indenture.

This Subsidiary Guarantee shall not be valid or
obligatory for any purpose until the certificate of authentication on the Note
upon which this Subsidiary Guarantee is noted shall have been executed by the
Trustee under the Indenture by the manual signature of one of its authorized
signatories.

 

	
   

  	
  MANHATTAN BAGEL COMPANY, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:  

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

SUBSIDIARY
GUARANTEE

For value received, I. & J. BAGEL, INC., a
California corporation, hereby unconditionally guarantees to the Holder of the
Note upon which this Subsidiary Guarantee is endorsed:  (a) the due and punctual payment of the
principal of, premium, if any, and interest on the Note, whether at maturity
acceleration, redemption or otherwise, (b) the due and punctual payment of
interest on the overdue principal of, premium, if any, and interest on the Note,
if any, to the extent lawful, (c) the due and punctual performance of all other
obligations of the Company to the Holders or the Trustee, all in accordance
with the terms set forth in the Indenture, and (d) in case of any extension of
time of payment or renewal of any Note or any of such other obligations, the
same will be promptly paid in full when due or performed in accordance with the
terms of the extension or renewal, whether at stated maturity, by acceleration
or otherwise.  Capitalized terms used
herein have the meanings assigned to them in the Indenture unless otherwise
indicated.

This Subsidiary Guarantee shall be binding upon each
Subsidiary Guarantor and its successors and assigns and shall inure to the
benefit of the successors and assigns of the Trustee and the Holder and, in the
event of any transfer or assignment of rights by any Holder or the Trustee, the
rights and privileges herein conferred upon that party shall automatically
extend to and be vested in such transferee or assignee, all subject to the
terms and conditions hereof and in the Indenture.

This Subsidiary Guarantee shall not be valid or
obligatory for any purpose until the certificate of authentication on the Note
upon which this Subsidiary Guarantee is noted shall have been executed by the
Trustee under the Indenture by the manual signature of one of its authorized
signatories.

 

	
   

  	
  I. & J. BAGEL, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:  

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

SUBSIDIARY
GUARANTEE

For value received, EINSTEIN/NOAH BAGEL PARTNERS,
INC., a California corporation, hereby unconditionally guarantees to the Holder
of the Note upon which this Subsidiary Guarantee is endorsed:  (a) the due and punctual payment of the
principal of, premium, if any, and interest on the Note, whether at maturity
acceleration, redemption or otherwise, (b) the due and punctual payment of
interest on the overdue principal of, premium, if any, and interest on the
Note, if any, to the extent lawful, (c) the due and punctual performance of all
other obligations of the Company to the Holders or the Trustee, all in
accordance with the terms set forth in the Indenture, and (d) in case of any
extension of time of payment or renewal of any Note or any of such other
obligations, the same will be promptly paid in full when due or performed in accordance
with the terms of the extension or renewal, whether at stated maturity, by
acceleration or otherwise.  Capitalized
terms used herein have the meanings assigned to them in the Indenture unless
otherwise indicated.

This Subsidiary Guarantee shall be binding upon each
Subsidiary Guarantor and its successors and assigns and shall inure to the
benefit of the successors and assigns of the Trustee and the Holder and, in the
event of any transfer or assignment of rights by any Holder or the Trustee, the
rights and privileges herein conferred upon that party shall automatically
extend to and be vested in such transferee or assignee, all subject to the
terms and conditions hereof and in the Indenture.

This Subsidiary Guarantee shall not be valid or
obligatory for any purpose until the certificate of authentication on the Note
upon which this Subsidiary Guarantee is noted shall have been executed by the
Trustee under the Indenture by the manual signature of one of its authorized
signatories.

 

	
   

  	
  EINSTEIN/NOAH BAGEL PARTNERS, INC., a California corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:  

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

SUBSIDIARY
GUARANTEE

For value received, EINSTEIN AND NOAH CORP., a
Delaware corporation, hereby unconditionally guarantees to the Holder of the
Note upon which this Subsidiary Guarantee is endorsed:  (a) the due and punctual payment of the
principal of, premium, if any, and interest on the Note, whether at maturity
acceleration, redemption or otherwise, (b) the due and punctual payment of
interest on the overdue principal of, premium, if any, and interest on the
Note, if any, to the extent lawful, (c) the due and punctual performance of all
other obligations of the Company to the Holders or the Trustee, all in
accordance with the terms set forth in the Indenture, and (d) in case of any
extension of time of payment or renewal of any Note or any of such other
obligations, the same will be promptly paid in full when due or performed in
accordance with the terms of the extension or renewal, whether at stated
maturity, by acceleration or otherwise. 
Capitalized terms used herein have the meanings assigned to them in the
Indenture unless otherwise indicated.

This Subsidiary Guarantee shall be binding upon each
Subsidiary Guarantor and its successors and assigns and shall inure to the benefit
of the successors and assigns of the Trustee and the Holder and, in the event
of any transfer or assignment of rights by any Holder or the Trustee, the
rights and privileges herein conferred upon that party shall automatically
extend to and be vested in such transferee or assignee, all subject to the
terms and conditions hereof and in the Indenture.

This Subsidiary Guarantee shall not be valid or
obligatory for any purpose until the certificate of authentication on the Note
upon which this Subsidiary Guarantee is noted shall have been executed by the
Trustee under the Indenture by the manual signature of one of its authorized
signatories.

 

	
   

  	
  EINSTEIN AND NOAH CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:  

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

ASSIGNMENT FORM

If you the Holder want to
assign this Note, fill in the form below and have your signature guaranteed:

I or we assign and transfer this Note to:

	
   

  
	
   

  
	
   

  

(Print or type name, address and zip code and

social security or tax ID number of assignee)

	
  and irrevocably
  appoint

  	
   

  

agent to transfer this Note
on the books of the Company.  The agent
may substitute another to act for him.

	
  Dated:

  	
   

  	
   

  	
  Signed:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (Sign exactly as
  your name appears on the other side of this Note)

  

 

	
  Signature
  Guarantee:

  	
   

  
	
   

  	
   

  

In connection with any
transfer of this Note occurring prior to the date which is the earlier of
(i) the date of the declaration by the SEC of the effectiveness of a
registration statement under the Securities Act of 1933, as amended (the “Securities
Act”), covering resales of this Note (which effectiveness shall not have
been suspended or terminated at the date of the transfer) and (ii) October 15,
2004, the undersigned confirms that it has not utilized any general
solicitation or general advertising in connection with the transfer and that
this Note is being transferred:

[Check One]

	
  (1) o

  	
   

  	
  to the Company
  or a subsidiary thereof; or

  
	
  (2) o

  	
   

  	
  pursuant to and
  in compliance with Rule 144A under the Securities Act; or

  
	
  (3) o

  	
   

  	
  to an
  institutional “accredited investor” (as defined in Rule 501(a)(1), (2), (3)
  or (7) under the Securities Act) that has furnished to the Trustee a signed
  letter containing certain representations and agreements (the form of which
  letter can be obtained from the Trustee); or

  
	
  (4) o

  	
   

  	
  outside the
  United States to a person other than a “U.S. person” in compliance with Rule
  904 of Regulation S under the Securities Act; or

  
	
  (5) o

  	
   

  	
  pursuant to the
  exemption from registration provided by Rule 144 under the Securities Act; or

  
	
   

  	
   

  	
   

  

 

	
  (6) o

  	
   

  	
  pursuant to an
  effective registration statement under the Securities Act.

  
	
   

  	
   

  	
   

  

Unless one of the boxes is checked, the Trustee will
refuse to register any of the Notes evidenced by this certificate in the name
of any person other than the registered Holder thereof; provided that if
box (3), (4) or (5) is checked, the Company or the Trustee may require, prior
to registering any such transfer of the Notes, in its sole discretion, such
legal opinions, certifications (including an investment letter in the case of
box (3) or (4)) and other information as the Trustee or the Company has
reasonably requested to confirm that such transfer is being made pursuant to an
exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act.

If none of the foregoing
boxes is checked, the Trustee or Registrar shall not be obligated to register
this Note in the name of any person other than the Holder hereof unless and
until the conditions to any such transfer of registration set forth herein and
in Section 2.15 of the Indenture shall have been satisfied.

	
  Dated:

  	
   

  	
   

  	
  Signed:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (Sign exactly as
  your name appears on the other side of this Note)

  

 

	
  Signature
  Guarantee:

  	
   

  
	
   

  	
   

  

TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED

The undersigned represents
and warrants that it is purchasing this Note for its own account or an account
with respect to which it exercises sole investment discretion and that it and
any such account is a “qualified institutional buyer” within the meaning of
Rule 144A under the Securities Act and is aware that the sale to it is being
made in reliance on Rule 144A and acknowledges that it has received such
information regarding the Company as the undersigned has requested pursuant to
Rule 144A or has determined not to request such information and that it is
aware that the transferor is relying upon the undersigned’s foregoing
representations in order to claim the exemption from registration provided by
Rule 144A.

	
  Dated:  

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  NOTICE:  To be executed by an executive officer

  

 

 

 [OPTION OF HOLDER TO ELECT PURCHASE]

 

If you want to elect to have
this Note purchased by the Company pursuant to Section 4.14 or Section 4.15 of
the Indenture, check the appropriate box:

Section
4.14  o

Section
4.15  o

If you want to elect to have
only part of this Note purchased by the Company pursuant to Section 4.14 or
Section 4.15 of the Indenture, state the amount you elect to have purchased:

	
  $

  	
   

  	
   

  

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  NOTICE:

  	
  The
  signature on this assignment must correspond with the name as it appears upon
  the face of the within Note in every particular without alteration or
  enlargement or any change whatsoever and be guaranteed by the endorser’s bank
  or broker.

  

 

	
   

  	
  Signature
  Guarantee:Exhibit 10.52

 

AMENDMENT
TO NOTE PURCHASE AND SECURITY AGREEMENT

 

Amendment dated July 8, 2003
(the "Amendment"), among New World EnbcDeb Corp. (the
"Company"), New World Restaurant Group, Inc. (the "Preferred
Issuer"), Greenlight Capital, L.P., Greenlight Capital Qualified, L.P. and
Greenlight Capital Offshore, Ltd. (collectively, the "New Purchaser")
and Jefferies & Company, Inc., as purchaser (the "Purchaser") and
as collateral agent (in such capacity, the "Collateral agent')  for the holders of the Notes, to the Note
Purchase and Security Agreement dated as of June 19, 2001 (the
"Agreement") among the Company, the Preferred Issuer, the Purchaser
and the Collateral Agent. Capitalized terms used herein without definition have
the meanings assigned to them in the Agreement.

 

WHEREAS, pursuant to Section
6.11 of the Agreement, the Preferred Issuer has agreed to issue to the Holders
Preferred Stock at the option of each Holder;

 

WHEREAS, the Preferred Stock
is to have the terms set forth in Exhibit B to the Agreement;

 

WHEREAS, the Purchaser held
$4,337,480.64, which represents 100% of the principal amount of the Notes as of
June 27, 2003; and

 

WHEREAS, effective July 8,
2003, the New Purchaser purchased 100% of the outstanding principal amount of
the Notes from the Purchaser; and 

 

WHEREAS, the New Purchaser
and the Preferred Issuer, subject to the refinancing of the Preferred Issuer's
Senior Secured Increasing Rate Notes due 2003, wish to fix the terms of the
Preferred Stock and the parties wish to enter into certain other agreements;

 

NOW, THEREFORE, in
consideration of the premises and the mutual agreements hereinafter set forth,
the Company, the Preferred Issuer, the New Purchaser, the Purchaser and the
Collateral Agent hereby agree as follows:

 

1.                                       Representation
and Warranties of Purchaser. Purchaser represents and
warrants that Purchaser held $4,337,480.64 principal amount of the Notes as of
June 27, 2003. Purchaser further represents and warrants that effective July 8,
2003 it sold $4,337,480.64 principal amount of such Notes to New Purchaser,
which, to the Purchaser's knowledge, represents 100% of the issued and
outstanding Notes. The representations in this Section 1 by Purchaser are
based upon the reliability and accuracy of the Company's representation in
Section 3.

 

2.                                       Representations
and Warranties of New Purchaser. New Purchaser represents
and warrants that as of the date hereof it owns $4,337,480.64 principal amount
of the Notes, which, to the New Purchaser's knowledge, represents 100% of the
issued and outstanding Notes. The representation in this Section 2 by New
Purchaser is based upon reliability and accuracy of the Company's
representation in Section 3.

 

 

3.                                       Representation
and Warranties of the Company. The Company represents and
warrants that, as of the date hereof, there is $4,337,480.64 aggregate
principal amount of the Notes outstanding, which represents 100% of the issued
and outstanding Notes.

 

4.                                       Conditions to
Effectiveness. The effectiveness of this Amendment is conditioned
upon consummation by the Preferred Issuer on or prior to July 15, 2003 of a
refinancing of its existing Senior Secured Increasing Rate Notes due 2003
pursuant to a Rule 144A offering of $160,000,000 principal amount of Senior
Secured Notes for which Purchaser has acted as sole placement agent
substantially on the terms set forth in Preferred Issuer's Offering Circular
dated June 27, 2003 (the "Refinancing").

 

5.                                       Prior
Amendments. This Amendment will supercede in its entirety
Amendment No. 1 to the Note Purchase and Security Agreement dated January 30,
2001, the Amendment to the Note Purchase and Security Agreement dated May 16,
2003 and the Amendment to the Note Purchase and Security Agreement dated June
26, 2003.

 

6.                                       Terms of
Preferred Stock. Anything contained in the Agreement to the contrary
notwithstanding, in the event the Preferred Issuer consummates the Refinancing,
the Preferred Issuer shall, upon and contemporaneously with the consummation of
such Refinancing, issue an aggregate of 4,337,481 authorized but unissued
shares of its Series F Preferred Stock to the New Purchaser in full
satisfaction of the Preferred Issuer's obligations under Section 6.11 of the
Agreement. The shares of Series F Preferred Stock shall be allocated among
Greenlight Capital, L.P., Greenlight Capital Qualified, L.P. and Greenlight
Capital Offshore, Ltd. based upon the percentages set forth in Exhibit A
and the portion of the consideration payable by Greenlight Capital, L.P.,
Greenlight Capital Qualified, L.P., and Greenlight Capital Offshore, Ltd. shall
be based upon the percentages set forth in Exhibit A.

 

7.                                       Warrants. Anything
contained in Exhibit B to the Agreement to the contrary notwithstanding, the
Preferred Issuer shall have no obligation to issue any warrants to the Holders
or the New Purchaser.

 

8.                                       Full
Satisfaction. Upon the issuance to the New Purchaser of the
Series F Preferred Stock contemplated by Section 6 of this Amendment, neither
the Company nor the Preferred Issuer shall have any further obligations to the
Holders under or by virtue of the Agreement or the Notes or the Consulting
Engagement Letter.

 

9.                                       Effect on
Agreement. Except as amended hereby, the provisions of the
Agreement shall remain in full force and effect. Except as expressly stated

 

                                                herein, the
execution of the Amendment shall be without prejudice to, and with full
reservation of, any rights any party hereto may otherwise have.

 

IN WITNESS WHEREOF, the
parties have caused this Amendment to be duly executed as of the date first
above written.

 

	
   

  	
  NEW
  WORLD ENBCDEB CORP.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ ILLEGIBLE

  
	
   

  	
   

  	
   

  
	
   

  	
  NEW
  WORLD RESTAURANT GROUP, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ ILLEGIBLE

  
	
   

  	
   

  	
   

  
	
   

  	
  JEFFERIES & COMPANY,
  INC.

  
	
   

  	
  As
  Purchaser and as Collateral Agent

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ ILLEGIBLE

  
	
   

  	
   

  	
   

  
	
   

  	
  GREENLIGHT
  CAPITAL, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ ILLEGIBLE

  
	
   

  	
   

  	
   

  
	
   

  	
  GREENLIGHT
  CAPITAL QUALIFIED, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ ILLEGIBLE

  
	
   

  	
   

  	
   

  
	
   

  	
  GREENLIGHT
  CAPITAL OFFSHORE, LTD.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ ILLEGIBLE

  

 

 

Exhibit
A

 

Allocation

 

	
  Entity

  	
   

  	
  Percentage

  	
   

  
	
  Greenlight Capital, L.P.

  	
   

  	
  8.83

  	
  %

  
	
  Greenlight Capital Qualified, L.P.

  	
   

  	
  36.52

  	
  %

  
	
  Greenlight Capital Offshore, Ltd.

  	
   

  	
  54.65

  	
  %

  
	
  Total

  	
   

  	
  100.00

  	
  %

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00054-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00054-of-00352.parquet"}]]