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Exhibit 10.7
 
GUARANTY
 
This Guaranty (“Guaranty”) dated March 31, 2015, intending to be effective as of
the Effective Date (as defined below), is made by the undersigned ("Guarantor"),
in favor of FIRST FRANCHISE CAPITAL CORPORATION, an Indiana corporation
("FFCC").

W I T N E S S E T H :

WHEREAS, FFCC has entered into, is entering into and may from time to time in
the future enter into loan and/or lease transactions (such transactions are
hereinafter referred to collectively as the "Financial Accommodations") with
HEARTHSTONE PARTNERS, LLC, a Massachusetts limited liability company ("Debtor"),
pursuant to which, FFCC will make or has made a loan or loans to Debtor or will
lease or has leased certain equipment to Debtor or otherwise will make or has
made certain Financial Accommodations to Debtor, pursuant to a promissory note
or notes, master security agreements, loan and security agreements, equipment
leases, progress payment agreements, construction loan agreement and other
agreements, instruments and documents (as presently existing and as the same may
from time to time be entered into, and amended, modified, substituted or
supplemented, referred to collectively as the "Documents");

WHEREAS, upon the consummation of that certain merger transaction by HEARTHSTONE
ASSOCIATES (the sole owner of 100% of the ownership and voting interests of the
Debtor) (“Associates”) with and into COSI-HEARTHSTONE MERGER SUB, LLC, a
Massachusetts limited liability company (the “Merger Sub”) that is a wholly
owned subsidiary of Guarantor, whereby Associates will remain in existence, will
be the surviving entity and will become a wholly owned subsidiary of Guarantor
after giving effect to the merger; resulting in the ownership and controlling
voting interest in the Debtor being held indirectly by Guarantor through
Guarantor’s 100% ownership and controlling interest in Associates (the
“Merger”), Guarantor will derive direct and indirect benefits from the Financial
Accommodations made by FFCC to Debtor and therefore Guarantor desires to
guaranty the Financial Accommodations;

WHEREAS, in order to induce FFCC to make the Financial Accommodations to Debtor
and to further induce FFCC to make future Financial Accommodations to Debtor, in
FFCC’s sole and absolute discretion, Guarantor has agreed to execute and deliver
this Guaranty;

NOW, THEREFORE, Guarantor agrees as follows:

1. Guaranty.

(a)    Guarantor absolutely, unconditionally, and jointly and severally
guarantees the prompt payment and satisfaction, when due, of: (i) all
indebtedness, liabilities and obligations of Debtor to FFCC, of every kind and
nature, however arising, and whether now existing or hereafter arising,
including, without limitation, the indebtedness, liabilities, indemnities and
obligations of Debtor to FFCC under, in connection with or arising out of the
Financial Accommodations, the Documents or otherwise and (ii) the full and
faithful performance and discharge by Debtor of each and every term, condition,
agreement, representation, warranty, covenant and provision on the part of
Debtor contained in the Documents(all of the foregoing are hereinafter
collectively referred to as the "Guaranteed Obligations"). Guarantor
acknowledges that other individuals or entities may also guarantee the payment
and performance of the Guaranteed Obligations and that Guarantor is
unconditionally delivering this Guaranty to FFCC. The Guarantor further
acknowledges that the failure of any of the other guarantors to execute and
deliver their respective guarantees or the discharge of any of the other
guarantors shall not discharge the liability of the Guarantor.
 
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(b)    Guarantor shall absolutely, unconditionally and jointly and severally
guarantee to pay all of the Guaranteed Obligations and perform all of the
foregoing terms, covenants and conditions, regardless of any other agreements or
circumstances of any nature whatsoever which might otherwise constitute a
defense to this Guaranty and notwithstanding that any part or all of the
Documents or any Financial Accommodation shall be void or voidable as against
Debtor or any of Debtor's creditors, including a trustee in bankruptcy of
Debtor, by reason of any fact or circumstances including, without limitation,
failure by any person to file any document or to take any other action to make
any of the Documents or any other Financial Accommodation enforceable in
accordance with their respective terms. Guarantor also agrees that Guarantor's
obligations hereunder shall not be relieved in the event FFCC fails to properly
secure or perfect an interest in any collateral securing the Guaranteed
Obligations or fails to protect or otherwise impairs any collateral, whether as
a result of FFCC’s negligence or otherwise.

(c)    Guarantor shall, on demand, reimburse FFCC for all expenses, collection
charges, court costs and attorneys' fees incurred by FFCC in endeavoring to
collect or enforce any of FFCC’s rights and remedies against Debtor and/or
Guarantor or any other person or concern liable thereto.

2. Waivers by Guarantor.

(a)    Guarantor waives notice of acceptance hereof and of all notices and
demands of any kind to which Guarantor may be entitled including, without
limitation, all demands of payment and notice of nonpayment, protest and
dishonor to Guarantor, or Debtor, or the makers or endorsers of any notes or
other instruments for which Guarantor is or may be liable hereunder. Guarantor
further waives notice of and hereby consents to any agreement or arrangement for
subordination, composition, arrangement, discharge or release of the whole or
any part of Debtor's obligations under the Documents or any Financial
Accommodation, or release of other guarantors of the Financial Accommodations
(“Other Guarantors”), or for compromise of any sums due in any way whatsoever;
and the same shall in no way impair Guarantor's liability hereunder.

(b)    Guarantor waives any right to require FFCC to: (i) proceed against Debtor
or Other Guarantors; (ii) proceed against or exhaust any security held by FFCC
of Debtor, Other Guarantors or otherwise; or (iii) pursue any other remedy which
FFCC may have against Debtor or Other Guarantors.

(c)    Guarantor expressly waives any and all rights of subrogation,
reimbursement, indemnity, exoneration, contribution or any other claim which
Guarantor may now or hereafter have against Debtor or any person directly or
contingently liable for the Guaranteed Obligations hereunder, or against or with
respect to Debtor's property (including, without limitation, property
collateralizing the obligations guaranteed hereunder), arising from the
existence or performance of this Guaranty. If any amount is paid to Guarantor on
account of any subrogation or other rights waived hereunder at any time when all
of the Guaranteed Obligations or any other indebtedness, liabilities or
obligations of Debtor to FFCC have not been paid in full, such amount shall be
held in trust for the benefit of FFCC, shall be segregated from the other funds
of Guarantor and shall forthwith be paid over to FFCC to be applied in whole or
in part by FFCC against the outstanding Guaranteed Obligations, whether matured
or unmatured, and all such other sums guaranteed hereunder.

(d) Guarantor unconditionally waives any defenses to this Guaranty, whether
under any theory of suretyship or otherwise, including but not limited to the
following: (i) any release, surrender, exchange, substitution, subordination or
loss of any security or guaranty at any time existing in connection with any or
all of the Guaranteed Obligations for any reason; or any impairment of
collateral securing any of the Guaranteed Obligations or other guaranty of the
Financial Accommodations (“Other Guaranty”); (ii) the bankruptcy, insolvency,
liquidation, disability, dissolution or lack of authority of Debtor or any Other
Guarantors; (iii) any failure of FFCC to notify Guarantor of the making of loans
or other Financial Accommodations in reliance on this Guaranty; (v) the
unenforceability or illegality of all or any part of the Documents, this
Guaranty, any Other Guaranty or the Guaranteed Obligations for any reason; (iv)
any merger, reorganization, consolidation or dissolution of Debtor or Other
Guarantors, any sale, lease or transfer of any or all of the assets of Debtor or
Other Guarantors or any change in the shareholders, partners or members (whether
by accession, secession, death, dissolution, transfer of assets or otherwise) of
Debtor or any Other Guarantor in each instance, other than a Permitted Cosi
Assignment (as defined in the Master Amendment to Loan Documents (as defined in
Section 18, below)); and (vi) any neglect, delay, omission, failure or refusal
of FFCC to exercise or properly or diligently exercise any right or remedy with
respect to any or all of the Guaranteed Obligations or the collection thereof or
any collateral, security or guaranty therefore, including, without limitation,
to ensure compliance with any term or provision of the Documents or any Other
Guaranty or to foreclose or prosecute any action in connection with any
agreement, document or instrument or arrangement evidencing, securing or
otherwise affecting all or any part of the Guaranteed Obligations, including,
without limitation, any failure to conduct a commercially reasonable foreclosure
sale.
 
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3. Consents. Guarantor authorizes FFCC, with Debtor’s consent where required,
without notice or demand, and without affecting its liability hereunder, from
time to time to: (a) change the amount, time or manner of payment of the
Guaranteed Obligations; (b) change any of the terms, covenants, conditions or
provisions of the Documents; (c) amend, modify, change or supplement the
Documents; (d) any obligation of Debtor may be increased, changed, altered,
renewed, extended, continued, surrendered, compromised, waived or released in
whole or in part, or any default with respect thereto waived; (d) consent to
Debtor's assignment of the Documents; (e) receive and hold security for the
payment of this Guaranty or the performance of the Documents, and exchange,
enforce, waive and release any such security; (f) release or substitute any
guarantor or other person or entity liable on the Guaranteed Obligations and (g)
apply such security and direct the order or manner of sale thereof as FFCC in
its discretion may determine. Any subsequent guaranty given by the Guarantor
shall not be considered to substitute for or to terminate this Guaranty, but
will be construed only as to provide additional protection for FFCC.

4. Guarantor's Property as Security for Guaranty. All sums at any time to
Guarantor's credit and any of Guarantor's property at any time in FFCC’s
possession shall be deemed held by FFCC as security for any and all of
Guarantor's obligations to FFCC hereunder.

5. Subordination. Any and all present and future indebtedness and obligations of
Debtor to Guarantor are hereby postponed in favor of and subordinated to the
full payment and performance of all present and future indebtedness and
obligations of Debtor to FFCC.
 
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6. Primary Nature of Guaranty. The liability of Guarantor is present, absolute,
unconditional, joint and several, continuing, primary, direct and independent of
the obligations of Debtor. Nothing shall discharge or satisfy Guarantor's
liability hereunder except the full performance and payment of all Guaranteed
Obligations, with interest. Guarantor shall have no right of subrogation,
reimbursement or indemnity whatsoever and no right of recourse to or with
respect to any assets or property of Debtor. This Guaranty shall apply to all
existing and to any future Financial Accommodations of FFCC to Debtor, however
arising, and shall continue to be effective until the earlier of (i) a Permitted
Cosi Assignment, or (ii) Debtor no longer has any indebtedness, liabilities or
obligations to FFCC, and will be reinstated, if at any time after a payment is
made to FFCC, or any successor or assignee of FFCC, such payment is rescinded or
must be returned upon the insolvency, bankruptcy or reorganization of Debtor,
Guarantor, Other Guarantors or otherwise, as if such payment had never been
made.

7. Events of Default. A default shall be deemed to have occurred under this
Guaranty upon the occurrence of any of the following (each, an "Event of
Default"): (a) Guarantor shall fail to pay the Guaranteed Obligations upon
demand; (b) Guarantor fails to perform or observe any covenant, condition or
agreement to be performed or observed by it hereunder and such failure shall
continue unremedied for a period of ten (10) days after notice to Guarantor; or
(c) Guarantor shall (1) be generally not paying its debts as they become due,
(2) take action for the purpose of invoking the protection of any bankruptcy or
insolvency law, or any such law is invoked against or with respect to Guarantor
or its property, and such petition filed against Guarantor is not dismissed,
relinquished, stayed or terminated within ninety (90) days; or (d) there is an
anticipatory repudiation of Guarantor's obligations pursuant to this Guaranty as
determined by FFCC, in its reasonable discretion; or (e) any representation or
warranty contained herein is false in any respect at the time as of which the
facts therein set forth were stated or certified, or having omitted any
substantial contingent or unliquidated liability or claim against Guarantor; or
(f) Guarantor shall be in default (after giving effect to any applicable grace
or cure periods) under any loan, guaranty, financing agreement, or financing
contract (whether with FFCC or any other third party); provided, however, that
FFCC may refrain from exercising its rights and remedies as a result of any such
third party default provided that Guarantor promptly and in good faith disputes
and defends against any such third party default and for so long as FFCC
determines, in its sole discretion, that such third party default does not have
a material adverse effect on Guarantor, Debtor, the business operations of
Debtor or Guarantor or any collateral for the Financial Accommodations; or (g)
Guarantor shall have terminated its existence as a corporation or other legal
entity other than in connection with a Permitted Cosi Assignment, or if it shall
have consolidated with, merged into, or conveyed or leased substantially all of
its assets as an entirety to any person or entity, other than in connection with
a Permitted Cosi Assignment.

Upon an Event of Default hereunder, FFCC may, at its option, declare this
Guaranty to be in default by written notice to Guarantor (without election of
remedies), and at any time thereafter, may do any one or more of the following,
all of which are hereby authorized by Guarantor:

A.        declare the Documents to be in default and thereafter sue for and
recover all Guaranteed Obligations, liquidated damages, and/or other sums
otherwise recoverable from Debtor thereunder; and/or

B.          sue for and recover all damages then or thereafter incurred by FFCC
as a result of such Event of Default; and/or

C.          seek specific performance of Guarantor's obligations hereunder.

In addition, Guarantor shall be liable for all reasonable attorneys' fees,
expenses and other costs and expenses incurred by reason of any Event of Default
or the exercise of FFCC's remedies hereunder and/or under the Documents. No
right or remedy referred to herein is intended to be exclusive, but each shall
be cumulative, and shall be in addition to any other remedy referred to herein
or otherwise available at law or in equity, and may be exercised concurrently or
separately from time to time.
 
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The failure of FFCC to exercise the rights granted hereunder upon any Event of
Default shall not constitute a waiver of any such right upon the continuation or
reoccurrence of any such Event of Default. The obligations of Guarantor
hereunder are independent of the obligations of Debtor or Other Guarantors. A
separate action or actions may be brought and prosecuted against Guarantor
whether an action is brought against Debtor or Other Guarantors or whether
Debtor or Other Guarantors are joined in any such action or actions. All of
FFCC’s rights, remedies and recourse under the Documents, this Guaranty, Other
Guaranty or any Financial Accommodations, are separate and cumulative and may be
pursued separately, successively or concurrently, are non‑exclusive and the
exercise of any one or more of them, shall in no way limit or prejudice any
other legal or equitable right, remedy or recourse to which FFCC may be
entitled.

8. Covenants of Guarantor. Guarantor represents that all financial and other
information furnished to FFCC was, at the date prepared as stated therein, true
and correct. If Guarantor is no longer making its financial statements publicly
available, at no cost or expense, on Guarantor’s website or the website of the
Securities and Exchange Commission, then Guarantor agrees to provide FFCC with
(a) annual audited financial statements within 120 days after the end of each
fiscal year prepared in accordance with Generally Accepted Accounting
Principles, consistently applied, and certified by independent public
accountants, and (b) quarterly financial statements within 45 days after the end
of each calendar quarter prepared by an accountant (which may be an accountant
employed by Guarantor) and certified by Guarantor’s chief financial officer, and
(c) such other financial, credit or other information as FFCC reasonably
requests until the Guaranteed Obligations are paid in full.

For so long as Guarantor is a public corporation and is making its financial
statements publicly available, at no cost or expense, on Guarantor’s website or
the website of the Securities and Exchange Commission, then Guarantor shall not
be required to provide FFCC with copies of its tax returns; however, in the
event that Guarantor is no longer making its financial statements publicly
available, at no cost or expense, on Guarantor’s website or the website of the
Securities and Exchange Commission, then Guarantor shall provide FFCC with
copies of all tax returns within thirty (30) days after the same are delivered
to the Internal Revenue Service.

9. Representations and Warranties . The Guarantor represents and warrants:

(a)       if it is a corporation, limited liability company or limited
partnership, it is and will continue to be, duly organized, validly existing and
in good standing under the law of its jurisdiction of organization and qualified
as a foreign corporation/entity and in good standing in each jurisdiction where
such qualification is required or appropriate in connection with the conduct of
Guarantor’s business or the performance of its obligations under this Guarantee,
except where such failure to qualify as a foreign corporation/entity would not
have a material adverse effect on Guarantor, Guarantor’s business operations,
Debtor, Debtor’s business operations and any collateral for the Financial
Accommodations; and

(b)       has the power and/or legal right to own its assets, to conduct its
business as now conducted, and to enter into and perform the provisions of this
Guarantee; and

(c)       there are no pending actions or proceedings to which Guarantor is a
party, and there are no other pending or threatened actions or proceedings of
which Guarantor has knowledge, before any court, arbitrator or administrative
agency, which, either individually or in the aggregate, would be anticipated to
have a materially adverse effect on the business, financial condition or
operations of Guarantor, or materially impair the ability of Guarantor to
perform its obligations under or to remain in compliance with this Guaranty, if
the decision was adverse to Guarantor; and
 
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(d)       Guarantor acknowledges and agrees that it will enjoy a substantial
economic benefit by virtue of the Financial Accommodations by FFCC to Debtor
pursuant to the Documents upon the consummation of the Merger; and

(e)       the entering into and performance by the Guarantor has been duly
authorized by all necessary corporate, stockholder, member, manager, partner and
other action; and

(f)        the entering into and performance by Guarantor of this Guaranty does
not contravene any existing law or any legal order applicable to, or license or
permit granted to the Guarantor, or any agreement or instrument to which the
Guarantor is a party or to which it or any of its assets is subject, or, if it
is an entity, any provision of the Guarantor’s certificate of incorporation,
by-laws or organizational papers; and

(g) As of the date of this Guaranty, and after giving effect to this Guaranty
and the contingent obligation evidenced by this Guaranty, Guarantor is not
insolvent, as such term is used or defined in any applicable bankruptcy,
fraudulent conveyance, fraudulent transfer or similar law, has adequate capital
to engage in its business (as may now be conducted or conducted hereafter), and,
after the execution and delivery of this Guaranty, will (i) be able to pay its
debts as they become absolute and matured and (ii) not have unreasonably small
capital for any business in which the Guarantor engages and proposes to conduct;
and

(h) Guarantor represents and warrants that Guarantor and, to the best of
Guarantor’s knowledge (taking into account that, for so long as Guarantor is a
public company, Guarantor does not have information about its shareholders that
acquire shares in the public market), each person and legal entity directly or
indirectly owning an interest in Guarantor’s outstanding shares, if any, is not
currently listed on the specifically Designated Nationals and Blocked Persons
List maintained by the Office of the Foreign Asset Control, Department of
Treasury pursuant to executive order No. 13224, 66 Fed Reg. 49079 (Sept. 25,
2001), the Terrorism Sanctions Regulations (Title 31 Part 595 of the U.S. Code
of Federal Regulations), the Terrorism List Governments Sanctions Regulations
(Title 31 Part 596 of the U.S. Code of Federal Regulations), the Foreign
Terrorist Organizations Sanctions Regulations (Title 31 Part 597 of the U.S.
Code of Federal Regulations), and/or any other list of terrorist organizations
maintained pursuant to any of the rules and regulations of the Office of Foreign
Asset Control, Department of the Treasury or pursuant to other applicable
Executive Orders (the aforementioned laws, regulations and orders are
collectively referred to herein as the “OFAC Regulations” and such lists are
collectively referred to herein as the “OFAC List”), (ii) is not a person with
whom a citizen of the United States is prohibited to engage in transactions by
any trade embargo, economic sanction, or other prohibition by any statute,
regulation or order and (iii) is not in violation of any OFAC Regulation.
Guarantor has taken all precautions required by law to ensure that the Guarantor
is and shall be in compliance with all (i) anti-money laundering laws and
regulations (including 18 U.S. Code Sections 1956 and 1957, and 31 U.S. Code
Sections 5311 et. seq. together with its implementing regulations, Title 31 Part
103 of the U.S. Code of Federal Regulations) and (ii) OFAC Regulations.
Guarantor represents and warrants that it shall not transfer, assign or convey
any interest in the Guarantor to a person or legal entity that is in violation
of any of the OFAC Regulations.

10. Solvency, Binding Effect and Enforceability. The Guarantor is (and, after
giving effect to this Guarantee, will be) solvent. This Guarantee is the legal,
valid and binding obligation of the Guarantor enforceable in accordance with its
terms.
 
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11. No Waiver by FFCC. No failure, omission or delay on the part of FFCC in
exercising any rights hereunder or in taking any action to collect or enforce
payment or performance of the Documents or any Financial Accommodations, either
against Debtor or any other person liable therefor, shall operate as a waiver of
any such right or shall, in any manner, prejudice the rights of FFCC against
Guarantor.

12. Modifications. No provision hereof shall be modified or limited, except by a
written agreement expressly referring hereto and to the provision so modified or
limited, and signed by Guarantor and FFCC. No course of dealing between
Guarantor and FFCC shall be effective to change or modify or to discharge in
whole or in part this Guaranty. This Guaranty cannot be terminated orally.

13. Merger. This writing is intended by the parties as a final expression of
this agreement of guaranty and is intended also as a complete and exclusive
statement of the terms thereof. No course of prior dealings between the parties,
no usage of trade, and no parol or extrinsic evidence of any nature shall be
used or be relevant to supplement or explain or modify any term used in this
agreement of guaranty.

14. Severability. In case any one or more of the provisions contained in this
Guaranty shall for any reason be held to be invalid, illegal or unenforceable in
any respect, such invalidity, illegality or unenforceability shall not affect
any other provision hereof, and this Guaranty shall be construed as if such
invalid, illegal or unenforceable provision had never been contained herein.

15. Notices. All notices and other communications provided for hereunder shall
be in writing delivered to the parties at the addresses set forth below (or such
other address as may be provided by one party in a notice to the other):

If to Guarantor: COSI, INC.

249 Washington Street
Suite 510
Boston, MA 02108
Attn: Chief Financial Officer

With a copy to:
COSI, INC.
249 Washington Street, Suite 510
Boston, MA 02108
Attn: General Counsel

If to Lender: FIRST FRANCHISE CAPITAL CORPORATION

One Maynard Drive, Suite 2104
Park Ridge, NJ 07656
Attn: Chief Operating Officer

Notice delivered in accordance with the foregoing shall be effective (i) when
delivered, if delivered personally, (ii) the next day after being delivered in
the United States when deposited (properly addressed and all fees paid) for
overnight delivery service with a courier (such as Federal Express) which
regularly provides such service and regularly obtains executed receipts
evidencing delivery, or (iii) three days after being deposited with the United
States Postal Service (if properly addressed with postage prepaid for delivery
and sent by certified mail return receipt requested).
 
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16.            Governing Law. THIS GUARANTY SHALL BE DEEMED TO HAVE BEEN
DELIVERED AT AND SHALL BE INTERPRETED, AND THE RIGHTS AND LIABILITIES OF THE
PARTIES HERETO DETERMINED, IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
WITHOUT GIVING EFFECT TO ITS CONFLICT OF LAW PROVISIONS.

17. Personal Jurisdiction and Service of Process. GUARANTOR HEREBY IRREVOCABLY
CONSENTS TO PERSONAL JURISDICTION AND VENUE IN ANY COURT OF THE STATE OF NEW
YORK OR ANY FEDERAL COURT SITTING IN THE STATE AND COUNTY OF NEW YORK, AND
HEREBY WAIVES ANY CLAIM GUARANTOR MAY HAVE THAT SUCH COURT IS AN INCONVENIENT
FORUM FOR THE PURPOSES OF ANY SUIT, ACTION OR OTHER PROCEEDING ARISING OUT OF
THIS GUARANTY OR ANY OF THE AGREEMENTS OR TRANSACTIONS CONTEMPLATED HEREBY,
WHICH IS BROUGHT AGAINST GUARANTOR, AND HEREBY AGREES THAT ALL CLAIMS IN RESPECT
OF ANY SUCH SUIT, ACTION OR PROCEEDING MAY BE HEARD OR DETERMINED IN ANY SUCH
COURT. NOTHING CONTAINED HEREIN IS INTENDED TO PRECLUDE FFCC FROM COMMENCING ANY
CLAIM, SUIT, ACTION OR PROCEEDING HEREUNDER IN ANY COURT HAVING JURISDICTION
THEREOF. GUARANTOR FURTHER CONSENTS TO THE SERVICE OF PROCESS FOR ANY SUCH SUIT,
ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED
MAIL, POSTAGE PREPAID, TO GUARANTOR AT ITS ADDRESS SET FORTH BELOW, SUCH SERVICE
TO BECOME EFFECTIVE TEN (10) DAYS AFTER SUCH MAILING.

18. Successors and Assigns. This Guaranty shall inure to the benefit of FFCC,
its successors and assigns and shall be binding on Guarantor and Guarantor's
heirs, administrators, estate, executors, successors and assigns; provided,
however, that Guarantor may not assign or delegate any of its obligations
contained in this Guaranty, except as set forth in this Section 18, below.
Guarantor hereby consents to FFCC’s sale, assignment, transfer or other
disposition at any time or times hereafter, of this Guaranty, or any portion
hereof, including, without limitation, FFCC’s rights, title, interests, remedies
and/or duties hereunder. If there is more than one guarantor, the obligations
and liabilities of each shall be joint and several.

This Agreement and the Guarantor’s obligations hereunder may only be assigned by
Guarantor in accordance with the terms of Section 1 (titled “Permitted Cosi
Assignment”) of that certain Master Amendment to Loan Documents dated as of the
date hereof with an effective date as of the Effective Date hereof among FFCC,
Guarantor, Debtor, Associates, and Mr. Robert J. Dourney (the “Master Amendment
to Loan Documents”), and a copy of which Master Amendment to Loan Documents is
attached hereto as Exhibit “A”.

19. Waivers. GUARANTOR WAIVES ANY AND ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION
OR PROCEEDING BASED HEREON. GUARANTOR ALSO WAIVES THE BENEFIT OF ANY STATUTE OF
LIMITATIONS AFFECTING GUARANTOR'S LIABILITY HEREUNDER OR THE ENFORCEMENT
THEREOF. GUARANTOR WAIVES ANY RIGHT TO ASSERT, AND IN NO EVENT SHALL FFCC BE
LIABLE (INCLUDING, WITHOUT LIMITIATION, UNDER ANY THEORY OF TORT) FOR ANY
SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF OR IN
CONNECTION WITH THIS GUARANTY OR ANY DOCUMENTS.

20. Effective Date.    As used herein the term “Effective Date” shall mean the
point in time immediately prior to the consummation and effective date of the
Merger transaction (including any retroactive effective date of the Merger).
 
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21. Collateral. This Guaranty and the obligations of Guarantor hereunder are
secured by that certain Pledge Agreement dated the date hereof between Guarantor
and FFCC (the “Pledge Agreement”), that certain Account Control Agreement dated
the date hereof among Guarantor, FFCC and First Financial Bank, National
Association (the “Account Control Agreement”) and the Cash Collateral (as such
term is defined in the Pledge Agreement). This Guaranty, the Pledge Agreement,
the Account Control Agreement and the Cash Collateral are further subject to the
terms and provisions of the Master Amendment to Loan Documents and that certain
Conditional Consent Letter Agreement dated the date hereof among FFCC,
Guarantor, Debtor, Associates and Mr. Robert J. Dourney. All of the foregoing
shall be deemed part of the “Documents”.

[Signature Page Follows]
 
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IN WITNESS WHEREOF, the undersigned Guarantor has duly executed this Guaranty
effective as of the Effective Date.

GUARANTOR:

COSI, INC.,
a Delaware corporation

By:
/s/ Robert J. Dourney
   
Name:
Robert J. Dourney
   
Title:
CEO/President
 

 

Address: 249 Washington Street

Suite 510
Boston, MA 02108

DE Secretary of State File Number: 2877759
 
ACKNOWLEDGEMENT ON FOLLOWING PAGE
 
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ACKNOWLEDGEMENT
MASSACHUSETTS

STATE/COMMONWEALTH OF MASSACHUSETTS
)
 
) ss.
COUNTY OF SUFFOLK
)

On this 31st day of March, 2015, before me appeared ____Robert J. Dourney_____,
to me personally known, who, being by me duly sworn, did say that he/she is the
___CEO/President_______ of COSI, INC., a Delaware corporation, and that said
instrument was signed on behalf of said corporation by its board of directors
and said ___CEO/President_____________ acknowledged said instrument to be the
free act and deed of said corporation.

 
/s/ Melissa Curry
   
Notary Public
   
My commission expires: __6/19/20________         
 

(notarial seal)

If the signatory on behalf of Guarantor is not personally known to the
above-named Notary Public, then Type of Identification Presented: (to be
completed by Notary Public)
 Drivers License issued by State of _______________, License #__________________
Issue Date: ___________ Expiration Date:___________; Date of Birth:_________
 Passport issued by _________________ Expiration Date: _____________
Issue Date:
___________                                                                      Expiration
Date:___________; Date of Birth:_________
 Other—Please identify below type of government issued document (must have
photo)
__________________________________________________
Issue Date:
___________                                                                      Expiration
Date:___________; Date of Birth:_________

 
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CORPORATE RESOLUTION

I, the undersigned do hereby certify that I am the duly elected and qualified
Secretary of COSI, INC., a Delaware corporation (the “Corporation”) and that the
following is a true and correct copy of a resolution duly adopted by the Board
of Directors of the Corporation at a meeting duly called for such purpose
pursuant to the By‑Laws of said Corporation on the _31st day of March, 2015, and
that said resolution is now in full force and effect:

RESOLVED: That __Richard Bagge______, as the _____CEO_______ of this
Corporation, is hereby authorized and directed to execute and deliver to FIRST
FRANCHISE CAPITAL CORPORATION (“FFCC”), on behalf of this Corporation, the
foregoing Guaranty of COSI, INC. dated March 31, 2015 together with the
following documents: (i) Conditional Consent Letter Agreement dated March 31,
2015, among FFCC, COSI, Inc., Hearthstone Partners, LLC, a Massachusetts limited
liability company (“Hearthstone Partners”), Hearthstone Associates, LLC, a
Massachusetts limited liability company (“Hearthstone Associates”) and Robert J.
Dourney, inidividually (“Mr. Dourney”) with the Deal Points Memo attached
thereto as an Exhibit; (ii) Master Amendment to Loan Documents dated March 31,
2015, among FFCC, Cosi, Inc., Hearthstone Partners, Hearthstone Associates, and
Mr. Dourney; (iii) Account Control Agreement dated March31, 2015, among FFCC,
Cosi, Inc. and First Financial Bank, National Association; and (iv) Pledge
Agreement dated March 31, 2015, by Cosi, Inc. in favor of FFCC together with
such other documents, instruments and agreements that FFCC may request in
connection with the foregoing (including such additions, deletions and changes
in the final executed copy as the aforesaid individual shall in his/her
discretion, deem advisable) and to take all further actions, to execute, deliver
and file all such other instruments and documents, including but not limited to,
UCC-1 filings, and to do all such further things, in the name and on behalf of
COSI, Inc., as in his/her judgment may be necessary or advisable in order to
carry out the intent and purposes of the foregoing.

IN WITNESS WHEREOF, I have affixed my name as Secretary of said Corporation and
have caused the corporate seal of said Corporation to be hereunto affixed this
_31st__ day of March, 2015.

 
/s/ Richard Bagge
   
(Secretary)
 

 
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EXHIBIT “A”

[Master Amendment to Loan Documents]
[See Section 1 for “Permitted Cosi Assignment”]
 

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