-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DDAjo5rD7A6Yo42X8dR7a8TljfJbrSPX5zJzyC30XbOBkJ8ijknNbm5hegL5SgRa do2LdiJKtHO9c7vrRCWmow== 0000904454-02-000115.txt : 20021112 0000904454-02-000115.hdr.sgml : 20021111 20021112105922 ACCESSION NUMBER: 0000904454-02-000115 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20021112 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: NEW WORLD RESTAURANT GROUP INC CENTRAL INDEX KEY: 0000949373 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-EATING PLACES [5812] IRS NUMBER: 133690261 STATE OF INCORPORATION: DE FISCAL YEAR END: 1228 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-50342 FILM NUMBER: 02815863 BUSINESS ADDRESS: STREET 1: 246 INDUSTRIAL WAY WEST STREET 2: C/O NEW WORLD HOLDINGS CITY: EATONTOWN STATE: NJ ZIP: 07724 BUSINESS PHONE: 7325440155 MAIL ADDRESS: STREET 1: 246 INDUSTRIAL WAY WEST STREET 2: C/O NEW WORLD HOLDINGS CITY: EATONTOWN STATE: NJ ZIP: 07724 FORMER COMPANY: FORMER CONFORMED NAME: NEW WORLD COFFEE INC DATE OF NAME CHANGE: 19950815 FORMER COMPANY: FORMER CONFORMED NAME: NEW WORLD COFFEE & BAGELS INC / DATE OF NAME CHANGE: 19981007 FORMER COMPANY: FORMER CONFORMED NAME: NEW WORLD COFFEE MANHATTAN BAGEL INC DATE OF NAME CHANGE: 19990413 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: HALPERN DENNY III LP CENTRAL INDEX KEY: 0001133588 IRS NUMBER: 043501525 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 500 BOYLSTON STREET STREET 2: SUITE 1880 CITY: BOSTON STATE: MA ZIP: 02116 BUSINESS PHONE: 6175366602 MAIL ADDRESS: STREET 1: 500 BOYLSTON STREET STREET 2: SUITE 1880 CITY: BOSTON STATE: MA ZIP: 02116 SC 13D/A 1 s13da_1111-2002nwrg.txt SCHEDULE 13D/A CUSIP No. 648904200 Page 1 of 9 Pages SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D-A (Rule 13d-101) INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a) (Amendment No. 3)[1] NEW WORLD RESTAURANT GROUP, INC., f/k/a NEW WORLD COFFEE - MANHATTAN BAGEL, INC. - -------------------------------------------------------------------------------- (Name of Issuer) Common Stock, $.001 par value - -------------------------------------------------------------------------------- (Title of Class of Securities) 648904200 - -------------------------------------------------------------------------------- (CUSIP Number) William J. Nimmo Joshua A. Leuchtenburg, Esq. Halpern Denny III, L.P. Reboul, MacMurray, Hewitt & 500 Boylston Street Maynard Suite 1880 45 Rockefeller Plaza Boston, Massachusetts 02116 New York, New York 10111 Tel. (617) 536-6602 Tel. (212) 841-5700 - -------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) - -------------- 1The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act. CUSIP No. 648904200 Page 2 of 9 Pages November 8, 2002 - -------------------------------------------------------------------------------- (Date of Event Which Requires Filing of This Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box [ ]. 1) Name of Reporting Person Halpern Denny I.R.S. Identification III, L.P. No. of Above Person (If an Entity) 04-3501525 - -------------------------------------------------------------------------------- 2) Check the Appropriate Box (a) [x] if a Member of a Group (b) [ ] - -------------------------------------------------------------------------------- 3) SEC Use Only - -------------------------------------------------------------------------------- 4) Source of Funds OO - -------------------------------------------------------------------------------- 5) Check if Disclosure of Legal Proceedings is Not Applicable Required Pursuant to Items 2(d) or 2(e) - -------------------------------------------------------------------------------- 6) Citizenship or Place of Organization Delaware - -------------------------------------------------------------------------------- Number of 7) Sole Voting Shares Beneficially Power -0- Owned by Each Reporting Person With -------------------------------------------- 8) Shared Voting 23,265,107 shares of Power Common Stock -------------------------------------------- 9) Sole Disposi- -0- tive Power -------------------------------------------- 10) Shared Dis- 23,265,107 shares of positive Power Common Stock CUSIP No. 648904200 Page 3 of 9 Pages 11) Aggregate Amount Beneficially 23,265,107 shares of Owned by Each Reporting Person Common Stock - -------------------------------------------------------------------------------- 12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares - -------------------------------------------------------------------------------- 13) Percent of Class Represented by 55.89%[2] Amount in Row (11) - -------------------------------------------------------------------------------- 14) Type of Reporting Person PN - ------------------- 2Includes shares of Common Stock issuable to Halpern Denny III, L.P. upon exercise of its warrants, but does not include any other shares issuable upon exercise of warrants issued in the transaction described herein. CUSIP No. 648904200 Page 4 of 9 Pages 1) Name of Reporting Person Halpern Denny & I.R.S. Identification Company V, L.L.C. No. of Above Person (If an Entity) 04-3501523 - -------------------------------------------------------------------------------- 2) Check the Appropriate Box (a) [x] if a Member of a Group (b) [ ] - -------------------------------------------------------------------------------- 3) SEC Use Only - -------------------------------------------------------------------------------- 4) Source of Funds OO - -------------------------------------------------------------------------------- 5) Check if Disclosure of Legal Proceedings is Not Applicable Required Pursuant to Items 2(d) or 2(e) - -------------------------------------------------------------------------------- 6) Citizenship or Place of Organization Delaware - -------------------------------------------------------------------------------- Number of 7) Sole Voting Shares Beneficially Power -0- Owned by Each Reporting Person With --------------------------------------------- 8) Shared Voting 23,265,107 shares of Power Common Stock --------------------------------------------- 9) Sole Disposi- tive Power -0- --------------------------------------------- 10) Shared Dis- 23,265,107 shares of positive Power Common Stock --------------------------------------------- 11) Aggregate Amount Beneficially 23,265,107 shares of Owned by Each Reporting Person Common Stock - -------------------------------------------------------------------------------- 12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares - -------------------------------------------------------------------------------- CUSIP No. 648904200 Page 5 of 9 Pages 13) Percent of Class Represented by 55.89%[3] Amount in Row (11) - -------------------------------------------------------------------------------- 14) Type of Reporting Person OO - --------------------- 3Includes shares of Common Stock issuable to Halpern Denny III, L.P. upon exercise of its warrants, but does not include any other shares issuable upon exercise of warrants issued in the transaction described herein. CUSIP No. 648904200 Page 6 of 9 Pages Schedule 13D-A ---------------- Item 1. Security and Issuer. ------------------- This Amendment No. 3 (the "Schedule 13D Amendment 3") amends Schedule 13D, which was originally filed on February 1, 2001 ("Original Schedule 13D") and amended by Amendment No. 1 to Schedule 13D on April 6, 2001 ("Schedule 13D Amendment 1") and Amendment No. 2 to Schedule 13D on June 25, 2001 ("Schedule 13 D Amendment 2"). Terms defined in the Original Schedule 13D, as amended by Schedule 13D Amendment 1 and Schedule 13D Amendment 2, are used herein as so defined. The Schedule 13D is hereby amended as follows: Item 3. Source and Amount of Funds or Other Consideration. ------------------------------------------------- HD III exercised its right to purchase 27,141,454 shares of Common Stock at a price of $.01 per share pursuant to the Warrants (as defined in Item 4 of Schedule 13D Amendment 2). The aggregate exercise price of the Common Stock when the Warrants were exercised was $271,141.54. Pursuant to the terms of the Warrants, rather than paying the exercise price in cash, HD III used 3,877,347 shares of Common Stock that would have been otherwise issuable under the Warrants as payment for the exercise price under the net exercise terms set forth in the Warrant, and therefore received an aggregate 23,264,107 shares of Common Stock. HD III continues to have the right to purchase 1,000 shares of Common Stock at a price of $.01 per share upon exercise of the remainder of the First Warrant (as defined in Item 4 of Schedule 13D Amendment 2). The aggregate purchase price of the Common Stock, if the remainder of the First Warrant is exercised in full, is $10.00. Item 5. Interest in Securities of the Issuer. ------------------------------------ (a) As of the date hereof, HD III and the General Partner beneficially own an aggregate 23,265,107 shares (including 1,000 shares of Common Stock which HD III has the right to acquire upon exercise of the remainder of its Warrants) of Common Stock of New World, which constitutes approximately 55.89% of the 41,624,322 (see footnote on pages 3 and 5 above) CUSIP No. 648904200 Page 7 of 9 Pages shares of Common Stock outstanding as of November 8, 2002 after giving effect to the issuance of the shares which HD III has the right to acquire upon exercise of the Warrant. Pursuant to the provisions of the Purchase Agreements and as previously described in the Original Schedule 13D, as amended by Schedule 13D Amendment 1 and Schedule 13D Amendment 2, HD III had the right to receive, and did receive, additional Warrants for 3,546,932 shares of Common Stock (the "Step-Up Warrants"). Pursuant to the terms of the Warrants and the Warrant Amendment providing for antidilution adjustments upon certain events, HD III received additional Warrants for 6,644,202 shares of Common Stock (the "Antidilution Warrants"). Therefore, immediately prior to the exercise of the Warrants described above, HD III and the General Partner beneficially owned an aggregate 27,142,454 shares of Common Stock of New World. As described in Item 3 herein, HD III paid the exercise price of the Warrants with 3,877,347 shares of Common Stock issuable under the Warrants pursuant to the net exercise provision of the Warrants. Each of the Step-Up Warrants and Antidilution Warrants are in the form attached hereto as Exhibit 99.1. The Step-Up Warrants were issued in the following amounts on the following dates: (1) Step-Up Warrants for 1,512,954 shares of Common Stock on January 18, 2002, (2) Step-Up Warrants for 252,012 shares of Common Stock on June 7, 2002, (3) Step-Up Warrants for 224,317 shares of Common Stock on June 19, 2002, and (4) Step-Up Warrants for 1,557,954 shares of Common Stock on June 30, 2002. The Antidilution Warrants were issued in the following amounts on the following dates: (1) Antidilution Warrants for 6,343,024 shares of Common Stock on September 15, 2002 and (2) Antidilution Warrants for 301,178 shares of Common Stock on September 15, 2002. Each of the Step-Up Warrants and the Antdilution Warrants have an exercise price of $.01 per share and terminate five years from the date of issuance. (b) Each of the managing members of the General Partner may be deemed to share the power to vote or direct the voting of and to dispose or to direct the disposition of the Common Stock owned by HD III. Each of the managing members of HD III disclaims beneficial ownership of all shares of Common Stock other than the shares of Common Stock he or she may own directly, CUSIP No. 648904200 Page 8 of 9 Pages if any, or by virtue of his or her indirect pro rata interest, as a managing member of HD III. (c) Within the past 60 days, HD III has received warrants for an aggregate of 6,644,202 shares of Common Stock pursuant to the antidilution provisions of the Warrants as described in Item 5(a) above. (d) Except as described in this statement, no person has the power to direct the receipt of dividends on, or the proceeds from sales of, the shares of Common Stock owned by HD III or the General Partner. (e) Not applicable. Item 7. Material to be Filed as Exhibits. -------------------------------- Exhibit 99.1 - Form of Warrant Signature --------- After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Dated: November 12, 2002 HALPERN DENNY III L.P. By: Halpern Denny & Company V, L.L.C, General Partner By /s/ William J. Nimmo ----------------------------- Managing Member HALPERN DENNY & COMPANY V, L.L.C. By /s/ William J. Nimmo ----------------------------- Managing Member EX-99 3 e13da_1111-2002nwrg.txt WARRANT TO PURCHASE COMMON STOCK NEITHER THIS WARRANT NOR THE SECURITIES PURCHASABLE UPON EXERCISE OF THIS WARRANT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION AND MAY NOT BE SOLD, OFFERED FOR SALE OR OTHERWISE TRANSFERRED UNLESS REGISTERED OR QUALIFIED UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAWS OR UNLESS AN EXEMPTION IS AVAILABLE AND AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO THE ISSUER IS DELIVERED TO SUCH EFFECT. THE SECURITY EVIDENCED BY THIS CERTIFICATE AND THE SHARES ISSUABLE UPON EXERCISE OF SUCH SECURITY ARE SUBJECT TO THE TERMS OF A STOCKHOLDERS AGREEMENT DATED AS OF JANUARY 18, 2001, AMONG THE ISSUER AND THE OTHER PARTIES THERETO, AS AMENDED FROM TIME TO TIME, AND THE TRANSFER OF THE SECURITIES REPRESENTED HEREBY IS SUBJECT TO THE CONDITIONS PRECEDENT SPECIFIED IN SUCH STOCKHOLDERS AGREEMENT. Issue Date: __________ No. of Shares Subject to Warrant: ***__________*** WARRANT TO PURCHASE COMMON STOCK OF NEW WORLD COFFEE RESTAURANT GROUP, INC. This is to certify that, for value received, ________________ (the "Holder") is entitled to purchase, subject to the provisions of this Warrant, from NEW WORLD RESTAURANT GROUP, INC., a Delaware corporation (formerly known as New World Coffee-Manhattan Bagel, Inc.) (the "Company"), ____________ shares (subject to adjustment or reduction as provided herein) of Common Stock, $0.001 par value, of the Company ("Common Stock"), at a price of $0.01 per share (subject to adjustment as provided herein) at any time during the period beginning on the Issue Date and ending not later than 5:00 p.m. New York time on June 19, 2006 (the "Termination Date"). The number of shares of Common Stock to be received upon the exercise of this Warrant and the price to be paid for a share of Common Stock may be adjusted from time to time as hereinafter set forth. The shares of Common Stock deliverable upon such exercise, and as adjusted from time to time, is hereinafter sometimes referred to as the "Exercise Price." (a) EXERCISE OF WARRANT. (1) This Warrant may be exercised in whole or in part at any time from time to time on or after the Issue Date until the Termination Date, by presentation and surrender hereof to the Company at its principal office, or at the office of its stock transfer agent, if any, with the Purchase Form annexed hereto duly executed and accompanied by payment of the Exercise Price for the number of shares specified in such form, in lawful money of the United States of America in cash or by official bank or certified check made payable to the Company. (2) As an alternative to payment of the Exercise Price in cash, the Holder shall have the right, at any time and from time to time, to convert this Warrant in whole or in part into shares of Common Stock (the "Conversion Right"). Upon exercise of the Conversion Right, payment of the aggregate Exercise Price shall be made by delivery of this Warrant with instructions that the Company retain as payment of the aggregate Exercise Price such number of Warrant Shares as shall be determined under the next sentence. The Holder shall receive that number of Warrant Shares determined by multiplying the number of Warrant Shares for which the Conversion Right is exercised by a fraction, the numerator of which shall be the difference between the then fair market value per Warrant Share (based on the closing price on the trading day preceding the exercise of the Conversion Right) and the exercise Price per Warrant Share, and the denominator of which shall be the then fair market value per Warrant Share. The remaining Warrant Shares for which the Conversion Right has been made shall be deemed to have been paid to the Company as the aggregate Exercise Price. (3) The term "closing price" for each day shall mean the last reported sale price or, in case no such sale takes place on such day, the average of the closing bid and asked prices, in either case on the principal national securities exchange or the Nasdaq National Market on which the Company's Common Stock is listed or admitted to trading, or if the Company's Common Stock is not listed or admitted to trading on any national securities exchange or the Nasdaq National Market, the average of the highest reported bid and lowest reported asked prices as furnished by the National Association of Securities Dealers Inc. Automated Quotation System, or comparable system. The term "trading day" shall mean (x) if the Common Stock is listed on at least one stock exchange, a day on which there is trading on the principal stock exchange on which the Common Stock is listed or (y) if the Common Stock is not listed on a stock exchange but sale prices of the Common Stock are reported on an automated quotation system, a day on which trading is reported on the principal automated quotation system on which sales of the Common Stock are reported. (4) If this Warrant should be exercised in part only, the Company shall, upon surrender of this Warrant for cancellation, execute and deliver a new Warrant evidencing the rights of the Holder thereof to purchase the balance of the shares purchasable thereunder. Upon receipt by the Company of this Warrant at its office, or by the stock transfer agent of the Company, if any, at its office, in proper form for exercise and together with payment of the Exercise Price in the manner provided herein, the Holder shall be deemed to be the holder of record of the shares of Common Stock issuable upon such exercise; provided, however, that if at the date of surrender of such Warrants and payment of such Exercise Price, the transfer books for the Common Stock shall be closed, the certificates for the shares in respect of which such Warrants are then exercised shall be issuable as of the date on which such books shall next be opened, and until such date the Company shall be under no duty to deliver any certificate for such shares and the Holder shall not be deemed to have become a holder of record of such shares. 2 (5) Notwithstanding anything herein to the contrary, this Warrant shall automatically be deemed to be exercised in full pursuant to the provisions of paragraph (a)(2) above, without any further action by or on behalf of the Holder, immediately preceding the time this Warrant would otherwise expire. (6) So long as this Warrant shall be outstanding, (i) if the Company shall declare any dividend or make any distribution upon the Common Stock, or (ii) if any capital reorganization of the Company, reclassification of the capital stock of the Company, consolidation or merger of the Company with or into another corporation, sale, lease or transfer of all or substantially all of the property and assets of the Company to another corporation, or voluntary or involuntary dissolution, liquidation or winding up of the Company shall be effected, then in any such case, the Company shall cause to be mailed by certified mail to the Holder, at least 20 days prior to the date specified in (x) or (y) below, as the case may be, a notice containing a brief description of the proposed action and stating the date on which (x) a record is to be taken for the purpose of such dividend, distribution or offer for subscription or purchase, or (y) such reorganization, reclassification, consolidation, merger, sale, lease, transfer, dissolution, liquidation or winding up is to take place and the date, if any is to be fixed, as of which the holders of the Common Stock or other capital stock of the Company shall receive cash or other property deliverable upon such reclassification, reorganization, consolidation, merger, conveyance, dissolution, liquidation or winding up. (7) The Holder shall have no rights as a stockholder of the Company for shares of Common Stock issuable hereunder unless and until such shares are purchased in accordance herewith. (b) RESERVATION OF SHARES. The Company hereby agrees that at all times there shall be reserved for issuance and/or delivery upon exercise of this Warrant such number of shares of its Common Stock as shall be required for issuance and delivery upon exercise of this Warrant. (c) FRACTIONAL SHARES. The Company shall not be required to issue fractions of shares on the exercise of Warrants. If any fraction of a share would, except for the provisions of this Section, be issuable on the exercise of any Warrant, the Company will (1) if the fraction of a share otherwise issuable is equal to or less than one-half, round down and issue to the Holder only the largest whole number of shares of Common Stock to which the Holder is otherwise entitled, or (2) if the fraction of a share otherwise issuable is greater than one-half, round-up and issue to the Holder one additional share of Common Stock in addition to the largest whole number of shares of Common Stock to which the holder is otherwise entitled. (d) EXCHANGE, TRANSFER, ASSIGNENT OR LOSS OF WARRANT. This Warrant is exchangeable, without expense, at the option of the Holder, upon presentation and surrender hereof to the Company or at the office of its stock transfer agent, if any, for other Warrants of different denominations entitling the holder thereof to purchase in the aggregate the same number of shares of Common Stock purchasable hereunder. Subject to the provisions of Section (g), upon surrender of this Warrant to the 3 Company or at the office of its stock transfer agent, if any, with the Assignment Form annexed hereto duly executed and funds sufficient to pay any transfer tax, the Company shall, without charge, execute and deliver a new Warrant in the name of the permitted assignee named in such instrument of assignment and this Warrant shall be canceled. If this Warrant should be assigned in part only, the Company shall, upon surrender of this Warrant in accordance with the procedures set forth in the preceding sentence, execute and deliver, in addition to the new Warrant described in the preceding sentence, a new Warrant evidencing the rights of the Holder to purchase the balance of the shares purchasable thereunder. The term "Warrant" as used herein includes any Warrants into which this Warrant may be divided or exchanged. Upon receipt by the Company of evidence satisfactory to it of the loss, theft, destruction or mutilation of this Warrant, and upon surrender and cancellation of this Warrant, if mutilated, the Company will execute and deliver a new Warrant of like tenor and date. (e) RIGHTS OF THE HOLDER. The Holder shall not, by virtue hereof, be entitled to any rights of a stockholder in the Company, either at law or equity, and the rights of the Holder are limited to those expressed in the Warrant and are not enforceable against the Company except to the extent set forth herein. (f) ANTI-DILUTION AND ADJUSTMENT PROVISIONS. The Exercise Price and the number and kind of securities purchasable upon the exercise of this Warrant shall be subject to adjustment from time to time beginning on the date of issue of this Warrant, as hereinafter provided: (1) In case the Company shall issue Common Stock as a dividend upon Common Stock or in payment of a dividend thereon or shall subdivide the number of outstanding shares of its Common Stock into a greater number of shares or shall contract the number of outstanding shares of its Common Stock into a lesser number of shares, the exercise Price then in effect shall be adjusted, effective at the close of business on the record date for the determination of stockholders entitled to receive such dividend or be subject to such subdivision or contraction, to the price (computed to the nearest thousandth of a cent) determined by dividing (A) the product obtained by multiplying the Exercise Price in effect immediately prior to the close of business on such record date by the number of shares of Common Stock outstanding prior to such dividend, subdivision or contraction, by (B) the sum of the number of shares of Common Stock outstanding immediately after such dividend, subdivision, or contraction. (2) If any capital reorganization or reclassification of the capital stock of the Company (other than as set forth in subsection (1) of this Section (f)), or consolidation or merger of the Company with another corporation, or the sale of all or substantially all of its assets to another corporation shall be effected, then, lawful and adequate provision shall be made whereby the holder of each Warrant shall thereafter have the right to purchase and receive upon the basis and upon the terms and conditions specified in the Warrant and in lieu of the shares of Common Stock of the Company immediately theretofore purchasable and receivable upon the exercise of the rights represented by such Warrant (the "Purchasable Shares"), such shares of stock, securities or assets issuable or payable with respect to or in exchange for the Purchasable Shares had they been 4 purchased immediately before such reorganization, reclassification, consolidation, merger or sale, and in any such case appropriate provision shall be made with respect to the rights and interest of the Holder to the end that the provisions of the Warrant (including, without limitation, provisions for adjustment of the Exercise Price and of the number of shares issuable upon the exercise of Warrants) shall thereafter be applicable as nearly as may be practicable in relation to any shares of stock, securities, or assets thereafter deliverable upon exercise of Warrants. The Company shall not effect any such consolidation, merger or sale unless prior to or simultaneously with the consummation thereof, the successor corporation (if other than the Company) resulting from such consolidation or merger or the corporation purchasing such assets shall assume, by written instrument, the obligation to deliver to the Holder such shares of stock, securities or assets as, in accordance with the foregoing provisions, the Holder may be entitled to purchase. (3) Upon each adjustment of the Exercise Price pursuant to subsection (1) of this Section (f), the number of shares of Common Stock specified in each Warrant shall thereupon evidence the right to purchase that number of shares of Common Stock (calculated to the nearest hundredth of a share of Common Stock) obtained by multiplying the Exercise Price in effect immediately prior to such adjustment by the number of shares of Common Stock purchasable immediately prior to such adjustment upon exercise of such Warrant and dividing the product so obtained by the Exercise Price in effect after such adjustment. (4) Irrespective of any adjustments of the number or kind of securities issuable upon exercise of Warrants or the Exercise Price, Warrants theretofore or thereafter issued may continue to express the same number of shares of Common Stock and Exercise Price as are stated in similar Warrants previously issued. (5) On June 30, 2002, the number of shares specified in this Warrant shall be increased by the Additional Warrant Shares (where X is the number of Additional Warrant Shares) derived from the following equation: the number of shares of Common Stock, X + the Existing Warrant Shares which could be purchased hereunder or have already been purchased hereunder immediately after the issuance of the Jefferies Warrants (the "Existing Warrant Shares") -------------------------------------------- = -------------------------- the Fully-Diluted Common Stock of the the Fully-Diluted Common Company immediately prior to the issuance Stock of the Company of the Jefferies Warrants (but excluding immediately after the 5,369,084 shares) issuance of the Jefferies Warrants In addition, on June 30, 2002, if Additional Jefferies Warrants have been issued prior to such date: (i) the number of Additional Warrant Shares (where X is the number of Additional Warrant Shares) shall be calculated in accordance with the following equation for each such issuance and (ii) the number of shares specified in this Warrant 5 shall be further increased by the cumulative amount of Additional Warrant Shares calculated pursuant to clause (i). the number of shares of Common Stock, X + the Existing Warrant Shares which could be purchased hereunder or have already been purchased hereunder immediately after the issuance the Additional Jefferies Warrants (the "Existing Warrant Shares") --------------------------------- = -------------------------------- the Fully-Diluted Common Stock of the Fully-Diluted Common Stock the Company immediately prior to the of the Company immediately after issuance of the Additional Jefferies the issuance of the Additional Warrants Jefferies Warrants (including any additional shares of Common Stock issuable pursuant to the terms of other warrants of the Company similar to this Warrant) On any date after June 30, 2002, if any Additional Jefferies Warrants (as defined below) are issued, the number of shares specified in this Warrant shall be adjusted to that number of shares of Common Stock equal to the Existing Warrant Shares plus the Additional Warrant Shares (where X is the number of Additional Warrant Shares derived from the following equation): the number of shares of Common Stock, X + the Existing Warrant Shares which could be purchased hereunder or have already been purchased hereunder immediately after the issuance the Additional Jefferies Warrants (the "Existing Warrant Shares") --------------------------------- = -------------------------------- the Fully-Diluted Common Stock of the the Fully-Diluted Common Stock Company immediately prior to the of the Company immediately after issuance of the Additional Jefferies the issuance of the Additional Warrants Jefferies Warrants (including the Additional Warrant Shares and any Common Stock issuable pursuant to the terms of other warrants of the Company similar to this Warrant) Notwithstanding the foregoing, in the event that any shares of Series F Preferred Stock of the Corporation are redeemed as of the date of the applicable issuance of Additional Jefferies Warrants (other than through the issuance of the Notes (as provided in the Certificate of Designation) if such Notes have not been paid in full), then the Additional Warrant Shares derived on that date from the equation above shall be reduced to an amount equal to the product of (x) the Additional Warrant Shares multiplied by (y) the quotient of (i) the number of shares of Series F Preferred Stock outstanding as of that date divided by (ii) the number of shares of Series F Preferred Stock outstanding as of June 30, 2001. For purposes of this subsection (5), the "Fully-Diluted Common Stock of the Company" shall include all outstanding shares of Common Stock, and all shares of 6 Common Stock issuable pursuant to all outstanding options, warrants or convertible securities (including convertible debt) of the Company but not including any warrants or options with a strike price greater than $3.00 per share. For purposes of this subsection (5), the "Jefferies Warrants" are the warrants, dated as of June 19, 2001, to purchase Common Stock of the Company issued to the holders of the Senior Secured Increasing Rate Notes due 2003. The "Additional Jefferies Warrants" are any additional warrants issued pursuant to the Jefferies Warrants because the Company has not repaid the Senior Secured Increasing Rate Notes due 2003. In the event that this Warrant shall be exercise in full prior to June 30, 2002 or any date thereafter in which Additional Jefferies Warrants are issued, a new Warrant representing the amount of the adjustment pursuant to this subsection (5) shall be issued upon the occurrence of such adjustment and such Warrant shall be substantially in the form of this Warrant. The preceding provision shall survive the exercise of this Warrant. (6) The Company may, at its sole option, retain the independent public accounting firm regularly retained by the Company, or another firm of independent public accountants of recognized standing selected by the Company's Board of Directors, to make any computation required under this Section (f) and a certificate signed by such firm shall be conclusive evidence of any computation made under this Section (f). (7) Whenever there is an adjustment in the Exercise Price of in the number or kind of securities issuable upon exercise of the Warrants, or both, as provided in this Section (f), the Company shall (i) promptly file in the custody of its Secretary or Assistant Secretary a certificate signed by the Chairman of the Board or the President or a Vice President of the Company and by the Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary of the Company, setting forth the facts requiring such adjustment and the number and kind of securities issuable upon exercise of each Warrant after such adjustment; and (ii) cause a notice stating that such adjustment has been effected and stating the Exercise Price then in effect and the number and kind of securities issuable upon exercise of each Warrant to be sent to each registered holder of a Warrant. (8) The Exercise Price and the number of shares issuable upon exercise of this Warrant shall not be adjusted except in the manner and only upon the occurrence of the events heretofore specifically referred to in this Section (f). (9) The Board of Directors of the Company may, in its sole discretion, (a) reduce the Exercise Price of each Warrant, (b) increase the number of shares of Common Stock issuable upon exercise of each Warrant and/or (c) provide for the issuance of other securities (in addition to the shares of Common Stock otherwise issuable upon exercise of the Warrant) upon exercise of each Warrant. (g) TRANSFER TO COMPLY WITH THE SECURITIES ACT OF 1933 AND OTHER APPLICABLE SECURITIES LAWS. This Warrant or the Warrant Shares or any other security issued or issuable upon exercise of this Warrant may not be sold or otherwise disposed of unless the Holder provides the Company with an opinion of counsel satisfactory to the Company that this Warrant or the Warrant Shares or such other 7 security may be legally transferred without violating the Securities Act of 1933, as amended (the "1933 Act") and any other applicable securities law and then only against receipt of an agreement of the transferee to comply with the provisions of this Section (g) with respect to any resale or other disposition of such securities. Upon exercise of this Warrant, the Holder shall, if requested by the Company, confirm in writing that the Warrant Shares are being acquired solely for the Holder's own account and that Holder or Holder's purchaser representative is an accredited investor, as defined in Rule 501 under the 1933 Act. (h) REGISTRATION RIGHTS AGREEMENT. This Warrant is subject to the rights and benefits of the Amended and Restated Registration Rights Agreement dated as of January 18, 2001, as amended from time to time. 8 IN WITNESS WHEREOF, the Company has caused this Warrant to be executed as of the Issue Date first set forth above by an authorized officer. NEW WORLD RESTAURANT GROUP, INC. By: ------------------------------- Anthony D. Wedo Chief Executive Officer PURCHASE FORM Dated: _____________, ______ The undersigned hereby irrevocably elects to exercise the within Warrant to the extent of purchasing shares of Common Stock and hereby makes payment of _________________________________ in payment of the Exercise Price thereof. INSTRUCTIONS FOR REGISTRATION OF STOCK Name ---------------------------------------------------------------------- (Please typewrite or print in block letters.) Address ---------------------------------------------------------------------- Signature ---------------------------------------------------------------------- ASSIGNMENT FORM FOR VALUE RECEIVED,-------------------------------------------------------- hereby sells, assigns and transfers unto Name: --------------------------------------------------------------------- (Please typewrite or print in block letters.) Address: --------------------------------------------------------------------- The right to purchase Common Stock represented by this Warrant to the extent of _____________________________ shares as to which such right is exercisable and does hereby irrevocably constitute and appoint _____________________________, Attorney, to transfer the on the books of the Company with full power of substitution in the premises. Date: ___________, _______ Signature: _______________________________________________________________ -----END PRIVACY-ENHANCED MESSAGE-----