UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15 (d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) : August 11, 2000
NEW WORLD COFFEE - MANHATTAN BAGEL, INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 0-27148 13-3690261
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(State of other jurisdiction (Commission File Number) (IRS Employer
Identification Number) of incorporation)
246 INDUSTRIAL WAY WEST, EATONTOWN, NJ 07724
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (732) 544-0155
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ITEM 5. Other Events.
On August 11, 2000, New World Coffee - Manhattan Bagel, Inc. ("New World"),
Brookwood New World Investors, LLC ("Brookwood") and BET Associates, L.P.
("BET") entered into a Series D Preferred Stock and Warrant Purchase Agreement
(the "Purchase Agreement"). The first closing, under the Purchase Agreement,
pursuant to which BET purchased its Series D Preferred Stock and its Warrant (as
defined below), occurred on August 11, 2000. The second closing under the
Purchase Agreement, pursuant to which Brookwood purchased its Series D Preferred
Stock and Warrant (as defined below), occurred on August 18, 2000. Under the
terms of the Purchase Agreement, Brookwood and BET each purchased (i) 8,108.108
shares of New World's Series D Preferred Stock (the "Series D Preferred Stock")
and (ii) a warrant to purchase up to 1,196,910 shares of the Common Stock of New
World, each of which represents the right to purchase approximately 7.7% of the
Common Stock (each, a "Warrant"). The form of the Warrant is attached hereto as
Exhibit 99.2. Pursuant to Section 2.1(a) of the Purchase Agreement, the number
of shares that the Company may receive upon exercise of its Warrant is subject
to upward adjustment depending upon certain future events affecting the
capitalization of New World. The shares of Common Stock issuable upon exercise
of a Warrant are entitled to registration rights under the terms of a
Registration Rights Agreement among New World, the Brookwood and BET, attached
hereto as Exhibit 3. Under the terms of the Purchase Agreement, if New World
fails to take actions to redeem the Series D Preferred Stock within one year of
the closing, New World will be required to issue to each of Brookwood and BET,
each quarter for the next four quarters, additional warrants representing the
right to purchase an additional 1.34% of New World's Common Stock, subject to
reduction for any redemption(s) of Preferred Stock that occur during that year.
Further, under the terms of the Purchase Agreement, if New World fails to take
actions to redeem the Series D Preferred Stock within two years of the closing,
New World will be required to issue to each of Brookwood and BET, each quarter
for the next four quarters, additional warrants representing an additional
2.015% of New World's Common stock, subject to reduction for any redemption(s)
that occur during that year.
Pursuant to the Certificate of Designations for the Series D Preferred
Stock the "Certificate of Designations"), which is attached hereto as Exhibit
99.4, a designee of each of Brookwood and BET was appointed to the board of
directors of New World (the "Board"). In addition, the Certificate of
Designations provides that holders of a majority of the Series D Preferred Stock
(i.e., Brookwood and BET) are entitled to elect the minimum number of directors
that shall consist of at least two-sevenths of the Board. Upon the occurrence of
certain events described in the Certificate of Designations, the holders of the
Series D Preferred Stock have the right to elect additional directors so that
the holders of the Series D Preferred Stock will have then appointed one-half of
the Board.
Pursuant to the Certificate of Designations, so long as any shares of the
Series D Preferred Stock are outstanding, the consent of holders of at least 67%
of the Series D Preferred Stock is required for New World to: (i) amend or
repeal any provision of New World's Certificate of Incorporation or By-Laws in a
manner which materially adversely affects the rights and preferences of the
holders of Series D Preferred Stock; (ii) authorize or issue shares of any class
of stock having any preference or priority as to dividends or assets superior to
or on a parity with the Series D Preferred Stock; (iii) pay or declare any
dividend on any other type or class of securities, other than a dividend payable
in common stock or rights under New World's rights plan; (iv) authorize a sale
of any substantial portion of the assets of New World (other than sales of
stores owned by New World or its subsidiaries), or a recapitalization or
reorganization of New World (other than stock splits, combinations and/or
dividends); (v) take any action that results in New World incurring or assuming
more than $1,000,000 of funded indebtedness (other than borrowings under the New
World's existing line of credit, either on an individual or cumulative basis),
except as contemplated by New World and described in the Purchase Agreement;
(vi) merge or consolidate with or into any person, or enter into any agreement
to accomplish such merger or consolidation, except as contemplated by New World
and described in the Purchase Agreement; (vii) effect or allow fundamental
change the nature of New World's business; or (viii) otherwise materially affect
the rights, privileges and preferences of the holders of New World's Series D
Preferred Stock.
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ITEM 7. Exhibits.
The following exhibits are hereby filed with this Form 8-K:
Exhibit
Number Description
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99.1 Series D Preferred Stock and Warrant Purchase Agreement dated
August 11, 2000 among New World Coffee - Manhattan Bagel, Inc.,
Brookwood New World Investors, LLC and BET Associates, L.P.
99.2 Form of Warrant to purchase common stock New World Coffee -
Manhattan Bagel, Inc. issued to Brookwood New World Investors,
LLC.
99.3 Registration Rights Agreement dated August 11, 2000 among New
World Coffee - Manhattan Bagel, Inc., Brookwood New World
Investors, LLC and BET Associates, L.P.
99.4 Certificate of Designations of New World Coffee - Manhattan
Bagel, Inc.
99.5 Amendment to Certificate of Designations of New World Coffee -
Manhattan Bagel, Inc.
99.6 Form of Note
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
NEW WORLD COFFEE -
MANHATTAN BAGEL, INC.
By: /s/ Jerold E. Novack
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JEROLD E. NOVACK
Chief Financial Officer
