EXHIBIT 4.2
COSI, INC.
SUBSCRIPTION WARRANT
FOR HOLDERS OF RECORD ON [________], 2003
___________________________ _______________________________
Subscription Warrant Number Total Aggregate Value of Shares
__________________________ __________________________
Name and Address of Shares Owned on Record
Date Shareholder
Cosi, Inc. (the "Company") is conducting an offering (the "Rights
Offering") of up to 19,140,892 shares of its common stock, par value $0.01 per
share (the "Common Stock"), pursuant to the non-transferable subscription rights
(the "Rights") distributed to all holders of record of shares of Common Stock as
of the close of business on [______], 2003 (the "Record Date"). As the
registered owner of this Subscription Warrant, you are entitled to the number of
Rights shown on the top of this Subscription Warrant. You were issued one Right
for each share of Common Stock that you held on the Record Date. If the number
of shares of Common Stock held by you on the Record Date would have resulted in
the issuance of fractional Rights, the number of Rights issued to you was
rounded down to the nearest whole number. No cash will be paid for fractional
Rights.
Each Right that you have been issued entitles you to subscribe for
and purchase a number of shares of Common Stock with a value equal to an
aggregate value of $0.6776, at a purchase price per share equal to the lesser of
(i) $1.50 and (ii) 85% of the weighted average price per share of our common
stock as reported on the Nasdaq National Market for the 15-trading-day period
ending three business days prior to [_____], 2003. This is referred to as the
"Basic Subscription Privilege." You are not required to purchase any shares, or
you may elect to purchase some or all of the shares that are covered by the
Basic Subscription Privilege. If you fully exercise your Basic Subscription
Privilege, you are eligible to subscribe for and purchase additional shares of
Common Stock that are offered in the Rights Offering but that are not purchased
by other Rights holders up to an aggregate offering of $7.5 million. This is
referred to as the "Oversubscription Privilege." The maximum number of shares
for which you will be able to subscribe pursuant to your over-subscription
privilege will equal your pro rata share of the total amount of shares available
for over-subscription. The total value of shares available for over-subscription
will equal $7.5 million reduced by the total value of shares subscribed for
pursuant to all stockholders' basic subscription privilege. Your pro rata share
will be based upon the total number of shares of our common stock and warrants
to purchase shares of our common stock you own compared to the total number of
shares of our common stock and warrants to purchase shares of our common stock
owned by all stockholders who exercised their over-subscription privilege and
the Funding Parties. If there is an insufficient number of shares of our common
stock remaining unsold after holders have exercised their basic subscription
rights to satisfy in full all subscriptions that we receive for additional
shares, we will allocate the available shares among the holders who execute
their over-subscription privilege on a pro rata basis according to their
respective holdings, up to the amount such holder has subscribed for through the
exercise of such holder's over-subscription privilege.
This Subscription Warrant (or the enclosed Notice of Guaranteed
Delivery), together with payment in full of the subscription price, must be
received by the Company's subscription agent, American Stock Transfer & Trust
Company prior to 5:00 p.m., Eastern Daylight Time, on [_____], 2003, unless such
expiration date is extended in the sole discretion of the Company (as it may be
extended, the "Expiration Date"). Any Rights not exercised prior to 5:00 p.m.,
Eastern Daylight Time, on the Expiration Date will be null and void. The address
of American Stock Transfer & Trust Company is [_____________________________],
and its telephone number is [__________]. Delivery of this Subscription Warrant
by facsimile will not constitute valid delivery.
Your rights are not transferable, except by operation of law in the
event of the death of the record holder of this Subscription Warrant or the
dissolution of a record holder that is a corporation, partnership, or other
entity. For questions about the exercise of Rights in such event, please contact
American Stock Transfer & Trust Company.
FOR A MORE COMPLETE DESCRIPTION OF THE TERMS AND CONDITIONS OF THE
RIGHTS OFFERING, PLEASE REVIEW THE ENCLOSED PROSPECTUS DATED [_______], 2003
(THE "PROSPECTUS"), WHICH IS INCORPORATED HEREIN BY REFERENCE. AN ADDITIONAL
COPY OF THE PROSPECTUS MAY BE OBTAINED FROM AMERICAN STOCK TRANSFER & TRUST
COMPANY.
TO EXERCISE SOME OR ALL OF YOUR RIGHTS, YOU MUST COMPLETE THE
REVERSE SIDE OF THIS SUBSCRIPTION WARRANT AND RETURN THE COMPLETED SUBSCRIPTION
WARRANT AND PAYMENT OF THE FULL SUBSCRIPTION PRICE TO AMERICAN STOCK TRANSFER &
TRUST COMPANY.
Dated: ______________, 2003 COSI, INC.
By:
--------------------------
Name:
Title:
By:
--------------------------
Name:
Title:
-2-
EXERCISE AND SUBSCRIPTION
The undersigned hereby irrevocably subscribes for the shares of
Common Stock specified below on the terms and conditions set forth in the
Prospectus, receipt and review of which hereby are acknowledged. The undersigned
acknowledges that his or her election may not be amended or revoked.
(a) Total Aggregate Value of shares subscribed for:
---------------------------------------------------------
(i) Pursuant to Basic
Subscription Privilege
(not to exceed the Total $____________ (Line 1)
Aggregate Value on the
reverse side of this
Subscription Warrant):
---------------------------------------------------------
(ii) Pursuant to
Oversubscription Privilege
(subject to limitation, $_____________ (Line 2)
but exercisable only if
the Basic Subscription
Privilege is fully
exercised):
---------------------------------------------------------
(iii) Total (sum of Lines $_____________ (Line 3)
1 and 2):
---------------------------------------------------------
If the total aggregate value of shares subscribed for pursuant to
the Oversubscription Privilege is not specified and the amount enclosed or
transmitted exceeds the aggregate value for all shares payable upon exercise of
the Basic Subscription Privilege with respect to all Rights represented by this
Subscription Warrant (the "Subscription Excess"), the Rights holder exercising
this Subscription Warrant will be deemed to have exercised the Oversubscription
Privilege to purchase, to the extent available, that number of whole shares of
Common Stock, at the Subscription Price, with a value equal to the Subscription
Excess, subject to proration as described in the Prospectus. To the extent any
portion of the aggregate subscription price enclosed or transmitted remains
after the forgoing procedures, such funds will be mailed to the Rights holder,
without interest, as soon as practicable. No fractional shares will be issued.
(c) Method of Payment (check appropriate box):
-----------------------------------------------------
Personal check, certified check, or
[ ] cashier's check drawn on a U.S. bank, or a
U.S. postal or express money order, and made payable to
the order of American Stock Transfer & Trust Company; or
------------------------------------------------------------------
[ ] Wire transfer directed to [_____________________]
------------------------------------------------------------------
Check here if Rights are being exercised pursuant to a
Notice of Guaranteed Delivery delivered to American Stock
Transfer & Trust Company prior to the date of this
Subscription Warrant, and complete the following:
Date of Execution of Notice of Guaranteed
Delivery:
__________________
Name of Institution which Guaranteed
Delivery:
__________________
------------------------------------------------------------------
-3-
------------------------------------------------------------------
------------------------------------------------------------------
RIGHTS HOLDER'S SIGNATURE
The following signature(s) must correspond exactly with the name of
the registered holder that appears on the reverse side of this Subscription
Warrant.
Date: ____________________, 2003 ___________________________
Signature
___________________________
Signature
If this Subscription Warrant is signed by a trustee, executor,
administrator, guardian, attorney-in-fact, officer of a corporation, limited
liability company or other entity, or another person acting in a fiduciary or
representative capacity, please provide the following information. See the
instructions that accompany this Subscription Warrant.
Name: _______________________________
Capacity: ___________________________
Address: ____________________________
_______________________________
Telephone Number: ___________________
Tax Identification or Social Security Number:
______________________________________
Address for mailing of stock certificate or any refund of subscription funds
pursuant to the Prospectus if different from the address shown on the face of
this Subscription Warrant:
______________________________________
______________________________________
______________________________________
-4-
