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 COFFEE -- MANHATTAN BAGEL, 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 JUNE
19, 2001, BETWEEN THE COMPANY AND XXXXXXXXX & COMPANY, INC., A COPY OF WHICH IS
ON FILE WITH THE SECRETARY OF THE COMPANY.
CUSIP No.:
NEW WORLD COFFEE -- MANHATTAN BAGEL, INC.
SENIOR SECURED INCREASING RATE NOTE DUE 2003
No. $
New World Coffee -- Manhattan Bagel, Inc., a Delaware corporation (the
"Company," which term includes any successor entity), for value received
promises to pay to _________ or registered assigns, the principal sum of
_____________________________ Dollars, on June 15, 2003.
Interest Payment Dates: March 15, June 15, September 15 and December 15
Record Dates: March 1, June 1, September 1 and December 1
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 officer.
New World Coffee-- Manhattan Bagel, Inc.
By:
----------------------
Name: R. Xxxxx Xxxxxx
Title: Chairman and
Chief Executive Officer
Dated: June 19, 2001
Certificate of Authentication
This is one of the Senior Secured Increasing Rate Notes due 2003 referred
to in the within-mentioned Indenture.
United States Trust Company of New York,
as Trustee
Dated: June 19, 2001 By:_____________________________________
Name:
Title:
{REVERSE OF NOTE}
NEW WORLD COFFEE -- MANHATTAN BAGEL, INC.
Senior Secured Increasing Rate Note due 2003
1. Interest. New World Coffee -- Manhattan Bagel, Inc., a Delaware
corporation (the "Company"), promises to pay interest on the principal amount of
this Note at the rate of 13% per annum, increasing by 1.0% for each period of
three months (or portion thereof) after the Issue Date, up to a maximum interest
rate of 18%. The Company will pay interest quarterly in arrears on each March
15, June 15, September 15 and December 15 (each an "Interest Payment Date"),
commencing September 15, 2001. 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 June 19, 2001. 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 United States Trust
Company of New York, the trustee (the "Trustee") under the Indenture (as defined
below), having an address as 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Corporate Trust Administration. 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
June 19, 2001 (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 xx.xx. 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. The Notes are senior secured
obligations of the Company limited in aggregate principal amount to
$140,000,000. 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. Redemption.
(a) Optional Redemption. The Company may redeem the Notes at any time, in
whole or in part, at a redemption price equal to 100% of the principal amount
thereof, plus accrued and unpaid interest thereon to the redemption date.
(b) Asset Sale Redemption. The Company shall redeem the Notes with the
Excess Net Cash Proceeds received from Asset Sales made pursuant to clause (ii)
of the proviso to Section 4.15 at a price equal to 100% of the principal amount
thereof, plus accrued and unpaid interest to the redemption date; provided,
however, that the Company may defer any such redemption until there are
aggregate unutilized Excess Net Cash Proceeds equal to or in excess of $1.0
million (at which time, the entire unutilized Excess Net Cash Proceeds, and not
just the amount in excess of $1.0 million, shall be applied as required pursuant
to this Section 3.04). The Company shall redeem the Notes within 45 days after
it is otherwise required hereunder.
6. Notice of Redemption. Notice of redemption will be mailed by first class
mail at least 15 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. Sections 4.14 of the Indenture provide 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
updated 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 Increasing Rate Notes due 2003, 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 Coffee-- Manhattan Bagel, Inc., 000
Xxxxxxxxxx Xxx Xxxx, Xxxxxxxxx, Xxx Xxxxxx 00000, Attn: Chief Financial Officer.
FORM OF ASSIGNMENT
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.
Date: Signed:------------------------------------
(Sign exactly as your name appears
on the other side of this Note.)
Signature Guarantee:-----------------------------------------------------
Participant in a recognized Signature Guarantee
Medallion Program (or other signature guarantor
program reasonably acceptable to the Registrar)
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) June 19, 2003, 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) ___ to the Company or a subsidiary thereof; or
(2) ___ pursuant to and in compliance with Rule 144A under the Securities Act; or
(3) ___ 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) ___ outside the United states to a "foreign person" in compliance with Rule 904 of
Regulation S under the Securities Act; or
(5) ___ pursuant to the exemption from registration provided by Rule 144 under the
Securities Act; or
(6) ___ pursuant to an effective registration statement under the Securities Act; or
(7) ___ pursuant to another available exemption from the registration requirements of
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), (5) or (7) 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 name appears on the
other side of this Security)
Signature Guarantee:------------------------------------------------------
Participant in a recognized Signature Guarantee
Medallion Program (or other signature guarantor
program reasonably acceptable to the Registrar)
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 requirements
of the Securities Act provided by Rule 144A thereunder.
Dated:
Executive Officer
Name: _______________________
Title: _______________________
FORM OF OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the
Company pursuant to Section 4.14 of the Indenture, check the appropriate box:
Section 4.14 [ ]
If you want to elect to have only part of this Note purchased by the
Company pursuant to Section 4.14 of the Indenture, state the amount you elect to
have purchased:
$
Dated: Signature: _____________________
(Sign exactly as name appears on the
other side of this Security)
Tax Identification No. ___________
Signature Guarantee:------------------------------------------------------
Participant in a recognized Signature Guarantee
Medallion Program (or other signature guarantor
program reasonably acceptable to the Registrar)
