NEW WORLD RESTAURANT GROUP INC
EXHIBIT 10.50
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<TYPE>EX-10.50
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<FILENAME>a2081452zex-10_50.txt
<DESCRIPTION>EXHIBIT 10.50
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                                                                   Exhibit 10.50


                            GREENLIGHT CAPITAL, L.L.C.
                              420 Lexington Avenue
                                   Suite 1740
                              New York, N.Y. 10170

New World Coffee-Manhattan Bagel, Inc.
246 Industrial Way West
Eatontown, NJ  07724

Greenlight New World, L.L.C.
c/o New World Coffee-Manhattan Bagel, Inc.
246 Industrial Way West
Eatontown, NJ  07724

Dear Sir or Madam:

      Reference is hereby made to that certain Limited Liability Company
Operating Agreement (the "LLC Agreement") of Greenlight New World, L.L.C. (the
"LLC") dated as of January 8, 2001 by and among Greenlight Capital, L.P.,
Greenlight Capital Qualified L.P. and Greenlight Capital Offshore, Ltd. (each
individually a "Member" and together, "Greenlight"). Under the terms of the LLC
Agreement, New World Coffee-Manhattan Bagel, Inc. (the "Manager") was appointed
the manager of the LLC and has been acting in such capacity for the LLC.
Reference is also made to that certain Bond Purchase Agreement (the "Bond
Purchase Agreement") entered into as of January 17, 2001, by and among the
Manager and Greenlight, pursuant to which Greenlight agreed to contribute $10
million (such amount plus the accretion thereon pursuant to the terms of the
Bond Purchase Agreement is herein referred to as the "Contribution Amount") to
the LLC for the purchase of certain bonds (the "Bonds") known as Einstein/Noah
Bagel Corporation 7.25% convertible subordinated bonds June 2004. Capitalized
terms used herein, but not otherwise defined, have the meanings ascribed to them
in the Bond Purchase Agreement.

      Greenlight understands that the Manager desires to pledge (the "Pledge")
the Bonds to Jeffries & Company, Inc. or an affiliate (the "Lender") to secure a
loan to an unrestricted subsidiary of the Manager in principal amount of $35.0
million (the "Loan"). Pursuant to the terms and conditions conetained in this
letter agreement, Greenlight hereby consents to the Pledge by the Manager and
agrees during the term of the Pledge not to exercise its rights for the
withdrawal of "Section 2.3 Proceeds" (as such term is defined in the Bond
Purchase Agreement) provided in Section 2.3 of the Bond Purchase Agreement.

      In consideration for Greenlight consenting to the Pledge, Manager will
distribute or cause LLC to distribute to Greenlight, pro rata according to the
contribution made by each Member to the LLC, the amount of proceeds on the Bonds
in excess of the amount used to repay the Loan (such excess which is distributed
to Greenlight being referred to herein as the "Distributed Proceeds"). The
anticipated amount of such Distributed Proceeds, and the calculation method
thereof, is reflected in Exhibit A attached hereto. For purposes of this
calculation, the Bonds held by the LLC


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will be deemed to be the last of the Bonds controlled by the Manager which are
pledged to the Bank. In addition, Manager will issue to Greenlight the number of
shares of Series F Preferred Stock of Manager equal to (i) the excess of the
Contribution Amount over the Distributed Proceeds (the "Excess Contribution")
divided by (ii) $1,000 per share of Series F Preferred Stock (such shares of
Series F Preferred Stock herein referred to as the "Shares"). The Shares shall
be allocated among the Members pro rata according to the contribution made by
each Member to the LLC (the "Allocation Ratio"). Manager may not utilize any
other source of funds (other than the amount of proceeds on the Bonds in excess
of the amount used to repay the Loan) to return the Contribution Amount to
Greenlight, and any distributions to Greenlight from any other source of funds
will be excluded from the calculation of Distributed Proceeds and Excess
Contribution.

      Manager further agrees to issue to Greenlight warrants ("Warrants") to
purchase that number of shares of Common Stock, $0.001 par value, of the Manager
("Common Stock") equal to the Applicable Percentage (as defined below) of the
outstanding Common Stock of the Manager as of the date of this letter agreement
(determined on a fully diluted basis) at an exercise price of $0.01 per share of
Common Stock, such Warrants being substantially in the form attached herto as
Exhibit B. The number of shares of Common Stock issuable on exercise of the
Warrants will be subject to adjustment as provided in that certain Third Series
F Preferred Stock and Warrant Purchase Agreement entered into as of June __,
2001, by and among Manager and the purchasers listed on Schedule I thereto (the
"Third Series F Purchase Agreement"). Manager will issue the Warrants to
Greenlight on the earlier to occur of (a) the date on which shares of Series F
Preferred Stock are issued herunder and (b) the date on which the proceeds from
the Bonds are received by the Manager and/or the LLC. The Warrants will be
allocated among the Members according to their Allocation Ratios. For purposes
of this paragraph, "Applicable Percentage" means the greater of (i) 5.625% and
(ii) 1.125% for each $1,000,000 of Excess Contribution (or fraction thereof).

      As an inducement for Greenlight to enter into this letter agreement and
the Third Series F Purchase Agreement, Manager rerpesents and warrants to
Greenlight that, except for the terms and provisions contained in this letter
agreement which apply solely to Greenlight, Greenlight has been offered the
shares of Series F Preferred Stock pursuant to the Third Series F Purchase
Agreement on the same terms and conditions (including any transaction fees and
commissions) as has been offered or granted to any other party to the Third
Series F Purchase Agreement.

                  [Remainder of Page Intentionally Left Blank]

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      If you are in agreement with the above terms, please acknowledge your
agreement by signing in the appropriate space below and returning an originally
executed letter to Greenlight at the above address.

                                        Sincerely,


                                        David Einhorn, Manager of Greenlight
                                        Capital, LLC (on behalf of Greenlight
                                        Capital, L.P. and Greenlight Capital
                                        Qualified L.P.) and Director of
                                        Greenlight Capital Offshore, Ltd.

Accepted and acknowledged as of this 19th day of June, 2001.

New World Coffee-Manhattan Bagel, Inc.

By:  /s/ R. Ramin Kamfar
     -----------------------------------
Name:   R. Ramin Kamfar
Title:  Chairman and Chief Executive Officer

Greenlight New World, L.L.C.

By:  New World Coffee-Manhattan Bagle, Inc., its manager

By:  /s/ R. Ramin Kamfar
     -----------------------------------
Name:   R. Ramin Kamfar
Title:  Chairman and Chief Executive Officer

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