EXHIBIT 99.5
UP TO 19,140,892 SHARES OF COMMON STOCK OFFERED PURSUANT TO RIGHTS
DISTRIBUTED TO SHAREHOLDERS OF COSI, INC.
To Our Clients:
Enclosed for your consideration are a Prospectus dated [_____], 2003
(the "Prospectus") and Instructions as to the Use of Cosi, Inc. Subscription
Warrants relating to the offering by Cosi, Inc. (the "Company") of up to
19,140,892 shares of its common stock, par value $0.01 per share (the "Common
Stock"), pursuant to 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. Also enclosed is a form of Instructions by
Beneficial Owner for you to complete and return to us regarding the exercise of
your Rights.
As described in the Prospectus, you are entitled to one Right for
each share of Common Stock held by us in your account as of the record date of
[_____], 2003. You may not sell, trade, or otherwise transfer the Rights, even
by gift. No fractional Rights or cash in lieu thereof will be issued or paid.
Each Right entitles you to purchase a number of shares of Common
Stock with a value equal to an aggregate of $0.6776, which is referred to in the
Prospectus as the basic subscription privilege. As described in the Prospectus,
if you fully exercise your basic subscription privilege, you are eligible to
subscribe for additional shares of Common Stock that are offered pursuant to the
Prospectus 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,
and the subscription price of shares covered by the oversubscription privilege
is the same as the subscription price for shares pursuant to the basic
subscription price. 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 the Company's common stock and warrants to purchase shares of the
Company's common stock you own compared to the total number of shares of the
Company's common stock and warrants to purchase shares of the Company's 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 the
Company's common stock remaining unsold after holders have exercised their basic
subscription rights to satisfy in full all subscriptions that the Company
receives for additional shares, the Company 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. Your election to exercise the oversubscription privilege must be made
at the time you exercise the basic subscription privilege, and you may exercise
the oversubscription privilege only if you exercise your basic subscription
privilege in full.
If you fully subscribe for your basic subscription amount and our
stockholders subscribe for an aggregate of more than $7.5 million pursuant to
their basic subscription amount, your percentage ownership of our equity will be
reduced. If you fully subscribe for your basic subscription amount and our
stockholders subscribe for an aggregate of less than $7.5 million but more than
$2 million, your percentage ownership of our equity will not be reduced,
however, your ownership percentage relative to certain of the Funding Parties
will be reduced.
Our current stockholders who do not participate in the rights
offering will suffer a substantial dilution in their relative percentage
ownership in us upon issuance of our common stock to holders exercising rights
in the rights offering and to the funding parties.
THE ENCLOSED MATERIALS ARE BEING FORWARDED TO YOU AS THE BENEFICIAL
OWNER OF THE SHARES OF COMMON STOCK CARRIED BY US IN YOUR ACCOUNT BUT NOT
REGISTERED IN YOUR NAME. THE EXERCISE OF THE RIGHTS RELATING TO SUCH SHARES MAY
BE MADE ONLY BY US AS THE RECORD OWNER OF THE SHARES, AND THE EXERCISE MAY BE
MADE ONLY PURSUANT TO YOUR INSTRUCTIONS. ACCORDINGLY, WE REQUEST INSTRUCTIONS AS
TO WHETHER YOU WISH US TO ELECT TO SUBSCRIBE FOR ANY SHARES OF COMMON STOCK TO
WHICH YOU ARE ENTITLED PURSUANT TO THE TERMS AND CONDITIONS SET FORTH IN THE
PROSPECTUS AND THE INSTRUCTIONS AS TO THE USE OF COSI, INC. SUBSCRIPTION
WARRANTS. HOWEVER, WE URGE YOU TO READ THESE DOCUMENTS CAREFULLY BEFORE
INSTRUCTING US TO EXERCISE THE RIGHTS. ONCE YOU HAVE EXERCISED YOUR RIGHTS, YOU
MAY NOT REVOKE OR AMEND THAT EXERCISE.
Your instructions to us should be delivered as promptly as possible
in order to permit us to exercise Rights on your behalf in accordance with the
provisions of the offering described in the Prospectus. The offering will expire
at 5:00 P.M., Eastern Daylight Time, on [_____], 2003, unless the offering is
extended by the Company in its sole discretion.
Please instruct us at to the exercise of your Rights by completing,
executing, and returning to us the enclosed Instructions by Beneficial Owner. In
addition, if you desire us to exercise Rights on your behalf, please
deliver to us the payment for the number of shares of Common Stock to which you
are subscribing or instruct us to deduct the payment from an account maintained
by us for you.
Any questions or requests for assistance concerning the rights
offering should be directed by you to the Company's subscription agent, American
Stock Transfer & Trust Corporation. The telephone number of American Stock
Transfer & Trust Corporation is [___________], and its address is
[______________________].
-2-