EXHIBIT 10.28
FIRST AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT
 
This FIRST AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT (this
"Agreement") is entered into and effective, unless otherwise expressly stated
herein, on .June 8, 2007, by and among CPI Corp.., a Delaware corporation
("Company") and LaSalle Bank National Association ("LaSalle"), as
"Administrative Agent," and LaSalle and each of the other lenders, as "Lenders "
 
Recitals:
 
A.
Company, Administrative Agent and LaSalle are party to that certain Second
Amended and Restated Credit Agreement dated as of June 8, 2007 (as amended, the
"Credit Agreement").

 
B.
Administrative Agent, Lenders and Company have agreed to the provisions set
forth herein on the terms and conditions contained herein.

 
Agreement
 
Therefore, in consideration of the mutual agreements herein and other sufficient
consideration, the receipt of which is hereby acknowledged, Company,
Administrative Agent and the Lenders hereby agree as follows:
 
1. Definitions. All references to the "Agreement" or the "Credit Agreement" or
the "Loan Agreement" in the Credit Agreement and in this Agreement shall be
deemed to be references to the Credit Agreement as it is amended hereby and as
it may be amended, restated, extended, renewed, replaced, or otherwise modified
from time to time Capitalized terms used and not otherwise defined herein have
the meanings given them in the Credit Agreement.
 
2. Effectiveness of Agreement. This Amendment shall become effective as of the
date first written above, but only if this Amendment has been executed by the
Company, Administrative Agent and the Required Lenders, and only if all of the
documents listed on Exhibit A to this Amendment have been delivered and, as
applicable, executed, sealed, attested, acknowledged, certified, or
authenticated, each in form and substance reasonably satisfactory to
Administrative Agent on or before the date first written above (unless otherwise
specifically noted on Exhibit A) and the Required Lenders, and payment of such
fees that may be owing to Administrative Agent and any Lender pursuant to any
fee letter or other arrangement.
 
3. Amendments to Credit Agreement.
 
    3.1.           Interest Rate Protection. Section 10 12 of the Credit
Agreement is deleted and replaced with the following:
 
"10.12 Interest Rate Protection the Company agrees to enter into with
Administrative Agent, a Lender, or an Affiliate thereof, not later than 90 days
after the date hereof; a Hedging Agreement with a term of at least three years
on an ISDA standard form with a qualified counter party to hedge the interest
rate with respect to not less than 35% of the principal amount of the Term B
Loan then outstanding, in form and substance reasonably satisfactory to the
Administrative Agent ".
 
3.2.           Syndication Agent. Effective on the date Charter One Bank, N.A.
becomes a Lender, a new Section 14.14 shall be added to the Credit Agreement
        as follows,  provided, however, if Charter One Bank N.A does not become
a Lender on or before July 31, 2007, then this Section 3.2 shall be void
                and of no force and effect.

 
 
 
 

 
 
"14.14 Charter One Bank, N.A. Appointment as Syndication Agent. Charter One
Bank, N.A. is given the title "Syndication Agent" under the Credit Agreement and
Loan Documents Nothing contained in the foregoing sentence, shall give Charter
One Bank, NA any additional rights or obligations under the Credit Agreement or
the Loan Documents ".
 
3.3. Documentation Agent. Effective on the date Fifth Third Bank becomes a
Lender, a new Section 14.15 shall be added to the Credit Agreement as follows,
provided, however, if Fifth Third Bank does not become a Lender on or before
July 31, 2007, then this Section 3.3 shall be void and of no force and effect.
 
"14.15 Fifth Third Bank Appointment as Documentation Agent.  Fifth Third Bank is
given the title "Documentation Agent" under the Loan Agreement and   Loan
Documents Nothing contained in the foregoing sentence, shall give Fifth Third
Bank any additional rights or obligations under the Credit Agreement or the Loan
Documents."
 
3.4.        Exhibit G. The parties hereto agree that the Exhibit G attached
hereto is Exhibit G to the Credit Agreement.
 
4. Representations and Warranties of Company. Company hereby represents and
warrants to Administrative Agent and the Lenders as of the date hereof that (i)
Company's execution of this Agreement and each other document or agreement to be
executed in connection herewith (collectively, the "Amendment Documents") has
been duly authorized by all requisite action of Company; (ii) no consents are
necessary from any third parties for Company's execution, delivery or
performance of this Agreement and each of the Amendment Documents, (iii) this
Agreement, the Credit Agreement, each of the Amendment Documents and each of the
other Loan Documents, constitute the legal, valid and binding obligations of
Company enforceable against Company in accordance with their terms, except to
the extent that the enforceability thereof against Company may be limited by
bankruptcy, insolvency or other laws affecting the enforceability of creditors
rights generally or by equity principles of general application, (iv) all of the
representations and warranties contained in Section 9 of the Credit Agreement
are true and correct with the same force and effect as if made on and as of the
date of this Agreement except to the extent such representations and warranties
expressly by their terms relate only to an earlier date, (v) after giving effect
to this Agreement, there is no Unmatured Event of Default or Event of Default,
(vi) since January 29, 2007, there has been no event or occurrence that would
reasonably be likely to give rise to a Material Adverse Effect. Company hereby
further represents and warrants that it has disclosed to Administrative Agent
and the Lenders all material facts and circumstances relating to the Loan
Parties' business, assets, liabilities, properties, condition (financial or
otherwise), results of operations or prospects of the Loan Parties and their
customers.
 
5.  Effect of Amendment. The execution, delivery and effectiveness of this
Agreement shall not operate as a waiver of any right, power or remedy of
Administrative Agent or any Lender under the Credit Agreement or any of the
other Loan Documents, nor constitute a waiver of any provision of the Credit
Agreement, any of the other Loan Documents or any existing Unmatured Event of
Default or Event of Default. Each reference in the Credit Agreement to "the
Agreement", "hereunder", "hereof", "herein", or words of like import, shall be
read as referring to the Credit Agreement as amended by this Amendment.

 
 
 
 

 
6. Reaffirmation; Waiver of Claims. Company hereby acknowledges and confirms
that as of the date hereof; (i) the Credit Agreement, the Amendment Documents
and the other Loan Documents remain in full force and effect, and (ii) Company
has no defenses to its obligations under the Credit Agreement, the Amendment
Documents and the other Loan Documents. As of the date hereof; the Company has
no claim against Administrative Agent or any Lender arising from or in
connection with the Credit Agreement, this Agreement, the Amendment Documents or
the other Loan Documents and any and all such claims are waived, released and
discharged (the foregoing is not intended to waive any manifest errors in the
Administrative Agent's or any Lender's records with respect to the Obligations).
 
7. Governing Law. This Agreement has been executed and delivered in Chicago,
Illinois, and shall be governed by and construed under the laws of the State of
Illinois without giving effect to choice or conflicts of law principles
thereunder.
 
8. Section Titles. The section titles in this Agreement are for convenience of
reference only and shall not be construed so as to modify any provisions of this
Agreement.
 
9, Counterparts; Facsimile Transmissions. This Agreement may be executed in one
or more counterparts and on separate counterparts, each of which shall be deemed
an original, but all of which together shall constitute one and the same
instrument Signatures to this Agreement may be given by facsimile or other
electronic transmission, and such signatures shall be fully binding on the party
sending the same.
 
10. Patriot Act Notice. Administrative Agent, each Lender and LaSalle (for
itself and not on behalf of any other party) hereby notifies each Company, each
Guarantor, each other Loan Party and each of their Subsidiaries that, pursuant
to the requirements of the USA Patriot Act, Title M of Pub. L. 107-56, signed
into law October 26, 2001 (the "Act"), it is required to obtain, verify and
record information that identifies each Company, each Guarantor, each other Loan
Party and each of their Subsidiaries, which information includes the name and
address of the Company, each Guarantor, each other Loan Party and each of their
Subsidiaries and other information that will allow Administrative Agent, such
Lender or LaSalle, as applicable, to identify the Company, each Guarantor, each
other Loan Party and each of their Subsidiaries in accordance with the Act.
 
11. Fees and Expenses. Company shall promptly pay to Administrative Agent and
each Lender executing this Amendment all fees, expenses and other amounts owing
to Administrative Agent under the Credit Agreement and the other Loan Documents
upon demand, including, without Limitation, all reasonable fees, costs and
expenses incurred by Administrative Agent and such Lender in connection with the
preparation, negotiation, execution, and delivery of this Amendment.
 
12. Incorporation By Reference. Administrative Agent, Lenders and Company hereby
agree that all of the terms of the Loan Documents are incorporated in and made a
part of this Agreement by this reference Administrative Agent, Lenders and
Company hereby agree that this Agreement and each of the Amendment Documents are
"Loan Documents".
 
13, Statutory Notice - Insurance.
the following notice is given pursuant to Section 10 of the Collateral
Protection Act set forth in Chapter 815 Section 180/1 of the Illinois Compiled
Statutes (1996); nothing contained in such notice shall be deemed to limit or
modify the terms of the Loan Documents:
 
UNLESS YOU PROVIDE EVIDENCE OF THE INSURANCE COVERAGE REQUIRED BY YOUR AGREEMENT
WITH US, WE MAY PURCHASE INSURANCE AT YOUR EXPENSE TO PROTECT OUR INTERESTS IN
YOUR COLLATERAL, THIS

 
 
 
 

 
INSURANCE MAY, BUT NEED NOT, PROTECT YOUR INTERESTS. THE COVERAGE THAT WE
PURCHASE MAY NOT PAY ANY CLAIM THAT YOU MAKE OR ANY CLAIM THAT IS MADE AGAINST
YOU IN CONNECTION WITH THE COLLATERAL, YOU MAY LATER CANCEL ANY INSURANCE
PURCHASED BY US, BUT ONLY AFTER PROVIDING EVIDENCE THAT YOU HAVE OBTAINED
INSURANCE AS REQUIRED BY OUR AGREEMENT. IF WE PURCHASE INSURANCE FOR THE
COLLATERAL, YOU WILL BE RESPONSIBLE FOR THE COSTS OF THAT INSURANCE, INCLUDING
THE INSURANCE PREMIUM, INTEREST AND ANY OTHER CHARGES WE MAY IMPOSE IN
CONNECTION WITH THE PLACEMENT OF THE INSURANCE, UNTIL THE EFFECTIVE DATE OF THE
CANCELLATION OR EXPIRATION OF THE INSURANCE„ THE COSTS OF THE INSURANCE MAY BE
ADDED TO YOUR TOTAL OUTSTANDING BALANCE OR OBLIGATION. THE COSTS OF THE
INSURANCE MAY BE MORE THAN THE COST OF INSURANCE YOU MAY BE ABLE TO OBTAIN ON
YOUR OWN.
 
14. Statutory Notice - Oral Commitment.  Nothing contained in the following
notice shall be deemed to limit or modify the terms of the Loan Documents:
 
ORAL AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO FORBEAR FROM
ENFORCING REPAYMENT OF A DEBT INCLUDING PROMISES TO EXTEND OR RENEW SUCH DEBT
ARE NOT ENFORCEABLE. TO PROTECT YOU (BORROWER) AND US (CREDITOR) FROM
MISUNDERSTANDING OR DISAPPOINTMENT, ANY AGREEMENTS WE REACH COVERING SUCH
MATTERS ARE CONTAINED IN THIS WRITING, WHICH IS THE COMPLETE AND EXCLUSIVE
STATEMENT OF THE AGREEMENT BETWEEN US, EXCEPT AS WE MAY LATER AGREE IN WRITING
TO MODIFY It.
 
Company acknowledges that there are no other agreements between Administrative
Agent, Lenders, and Company, oral or written, concerning the subject matter of
the Loan Documents, and that all prior agreements concerning the same subject
matter, including any proposal or commitment letter, are merged into the Loan
Documents and thereby extinguished
 
{Remainder of page intentionally left blank, signature page follows}

 
 
 
 

IN WITNESS WHEREOF, this Agreement has been duly executed as of the date first
above written.
 
 

  CPI CORP., a Delaware Corporation          
 
By:
/s/Jane E. Nelson       Jane E. Nelson       Secretary                    
LaSalle Bank National Association,   as Administrative Agent and as a Lender    
        By:
/s/Margaret C. Dierkes
      Margaret C. Dierkes       First Vice President  

 
 
 
 
 
 
{Unconditional Reaffirmation of Guaranty follows}

 
 
 
 

 
UNCONDIIIONAL REAFFIRMATION OF GUARANTY AND AMENDMENI
 
Each of the undersigned has reviewed the First Amendment to Second Amended and
Restated Credit Agreement, of even date herewith (as defined herein), by and
among CPI Corp a Delaware corporation (Company) and LaSalle Bank National
Association (LaSalle), as Administrative Agent, and LaSalle and the other
lenders, as Lenders (the First Amendment), and all other documents and financial
statements the undersigned deems necessary relating to the Borrower Capitalized
terms used herein, but not defined herein, unless otherwise noted, shall have
the meanings set forth in the First Amendment or if' not defined therein, as
defined in that certain Guaranty and Collateral Agreement dated as of November
30, 2005, to which the undersigned, the Company and the Administrative Agent are
a party to (the Guaranty and Collateral Agreement).
 
Each of the undersigned acknowledges and consents to all changes set forth in
the First Amendment, and agrees that all such changes are in the best interests
of Company and each of the undersigned. In consideration of financial
accommodations granted and which may hereafter be granted to Company by
Administrative Agent and the Lenders, in consideration of Administrative Agent's
and the Lenders' reliance on the Guaranty and Collateral Agreement and in
reliance on the Guaranty Agreement dated April 15, 2005 (the April Guaranty),
and for other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, each of the undersigned irrevocably and
unconditionally reaffirms pursuant to the terms of the Guaranty and Collateral
Agreement and pursuant to the terms of the April Guaranty, each of which it is a
party to, its unconditional continuing guarantee of the payment and performance
of all Company Obligations, and the undersigned further agrees that the validity
and enforceability of the Guaranty and Collateral Agreement and the April
Guaranty to which it is a party is not and shall not be affected in any way or
manner by the First Amendment.
 
Each Guarantor hereby unconditionally reaffirms, covenants, represents,
warrants, acknowledges and confirms to Administrative Agent, the Issuing Lender
and each Lender that (i) the Guaranty and Collateral Agreement, the April
Guaranty, the Amendment Documents, and each other Loan Document to which it is a
party is in full force and effect, (ii) this Reaffirmation has been duly
authorized by such Guarantor's governing body, members or shareholders, as the
case may be, (iii) no consents are necessary from any third Person for such
Guarantor's execution, delivery or performance of this Reaffirmation which have
not been obtained, (iv) this Reaffirmation, the Guaranty and Collateral
Agreement, the April Guaranty, each Amendment Document, and each other Loan
Documents to which it is a party constitutes the legal, valid and binding
obligation of such Guarantor enforceable against such Guarantor in accordance
with its terms except as the enforcement thereof may be limited by bankruptcy,
insolvency or other laws related to creditors rights generally or by the
application of equity principles, (v) the Guaranty and Collateral Agreement, the
April Guaranty, each Amendment Document, and each other Loan Documents to which
it is a party are each hereby reaffirmed and ratified without qualification and
are and remain in full force and effect, except that on and after the date
hereof all references in the Guaranty and Collateral Agreement, the April
Guaranty and each other Amendment Documents to which it is a party to "the Loan
Agreement" or "the Credit Agreement," or words of like import referring to the
Credit Agreement shall mean the Credit Agreement as amended by the First
Amendment, (vi) the Liens granted by such Guarantor and each other Guarantor in
favor of the Administrative Agent under the Guaranty and Collateral Agreement,
the Collateral Documents, each Amendment Document, and the other Loan Documents
secure all the Obligations and all the Guarantor Obligations, are perfected,
continue in full force and effect, and are hereby reaffirmed, and such Guarantor
reaffirms and grants a Lien in favor of Administrative Agent on all of its
Collateral, and each Guarantor and confirms and agrees that to the extent that
any such Loan Document purports to grant, assign or pledge to the Administrative
Agent a security interest in or Lien on, any Collateral as security for the
Obligations and the Guarantor Obligations and that such pledge, assignment
and/or grant of the security interest or Lien is hereby ratified and confirmed
in all respects, and (vii) each of the representations and warranties made by
the

 
 
 
 

 
Guarantors under the Guaranty and Collateral Agreement, the April Guaranty, each
Existing Loan Document, and the other Loan Documents to which it is a party are
true and correct as of the date hereof (except to the extent modified herein by
updates to the disclosure schedules or in the Credit Agreement).
 
Each Guarantor hereby unconditionally reaffirms, covenants, represents,
warrants, acknowledges and confirms to Administrative Agent, the Issuing Lender
and each Lender that (i) the Company has no defenses to its obligations under
the Credit Agreement, the Guaranty and Collateral Agreement, the April Guaranty,
each Amendment Document, and each other Loan Documents to which it is a party
arising out of or relating to any facts or circumstances existing on or before
the date hereof', known or unknown, to the Guarantor, the Company or any Loan
Party, and (ii) as of the date hereof,' the Guarantor has no claim against
Administrative Agent, any Existing Lender, the Issuing Lender or any Lender
arising from or in connection with the Credit Agreement, the Guaranty and
Collateral Agreement, the April Guaranty, each Amendment Document, and each
other Loan Documents to which it is a party and any and all such claims are
waived, released and discharged (the foregoing is not intended to waive any
manifest errors in the Administrative Agent's or any lender's records with
respect to the Obligations).
 
Each Grantor and the Administrative Agent by its acknowledgement hereto hereby
agrees that the Guaranty and Collateral Agreement is hereby amended by deleting
Section 6.5 of the Guaranty and Collateral Agreement in its entirety and
replacing it with the following:
 
6.5. Application of Proceeds. If an Event of Default shall have occurred and be
continuing, the Administrative Agent shall apply all or any part of the
Proceeds, all or any part of the Insurance Proceeds (to the extent required to
be paid to the Administrative Agent as set forth in the Credit Agreement), and
all or any part of the proceeds of any Real Estate Collateral from the sale of,
or other realization upon, all or any part of the Collateral and/or any part of
the Real Estate Collateral, as the case may be, in payment of the Secured
Obligations, in the following order, and any balance of such Proceeds, such
Insurance Proceeds, and such proceeds of any Real Estate Collateral remaining
after the Secured Obligations shall have been Paid in Full shall be paid over to
the applicable Grantor or to whomsoever may be lawfully entitled to receive the
same:
 
FIRST, to the payment of all fees, costs, expenses and indemnities of the
Administrative Agent (in its capacity as such), including Attorney Costs, and
any other Secured Obligations owing to the Administrative Agent in respect of
sums advanced by the Administrative Agent to preserve the Collateral or the Real
Estate Collateral or to preserve its security interest in the Collateral or the
Real Estate Collateral, until paid in full;
 
SECOND, to the payment of all fees, costs, expenses and indemnities of the
Lenders, pro-rata, until paid in full;
 
THIRD, to the payment of all of the Secured Obligations in respect of the Swing
Line Loans to the Swing Line Lender, until paid in full;
 
FOURTH, to the payment of all of the Secured Obligations (other than Bank
Product Obligations and Hedging Obligations) consisting of accrued and unpaid
interest owing to any Lender, pro-rata, until paid in full;
 
FIFTH, to the payment of all Seemed Obligations consisting of principal owing to
any Lender' and Bank Product Obligations and Hedging Obligations, pro-rata,
until paid in full;

 
 
 
 

 
SIXTH, to the payment of the Administrative Agent an amount equal to all Secured
Obligations in respect of outstanding Letters of Credit to be held as cash
collateral in respect of such obligations;
 
SEVENTH, to the payment of all other Secured Obligations owing to each lender,
pro-rata, until paid in full; and
 
EIGHTH, any remaining Proceeds, Insurance Proceeds, and proceeds of Real Estate
Collateral, if' any, to whomever may be lawfully entitled to receive such
amounts."
 
{remainder of page intentionally left blank, signature page follows}

 
 
 
 

 
Each Guarantor has caused this Unconditional Reaffirmation to duly executed and
delivered by their duly authorized officers as of the date first set forth
above.
 
Dated and effective as of June 8, 2007.
 

 
CPI CORP.,
a Delaware corporation
         
 
By:
/s/Gary W. Douglass       Gary W. Douglass       Treasurer          

 
 

 
CONSUMER PROGRAMS INCORPORATED,
a Missouri corporation, as a Guarantor
         
 
By:
/s/Gary W. Douglass       Gary W. Douglass       Treasurer          

 
 

 
CPI CANADIAN HOLDINGS, INC.,
a Delaware corporation, as a Guarantor
         
 
By:
/s/Gary W. Douglass       Gary W. Douglass       Treasurer          

 

 
CPI IMAGES, L.L.C.,
a Missouri limited liability company, as its Manager
         
 
By:
/s/Gary W. Douglass       Gary W. Douglass       Treasurer          

 

 
CPI INTERNATIONAL HOLDINGS, INC.,
a Delaware corporation, a Guarantor
         
 
By:
/s/Gary W. Douglass       Gary W. Douglass       Treasurer          

 
 
 
 
 
 
 
 
 
 
 
 
 
 

 

 
 
 
 
 
 

 
TEXAS PORTRAITS, L.P.,
a Delaware limited partnership
            By: Consumer Programs Incorporated, a Missouri corporation          
 
By:
/s/Gary W. Douglass       Gary W. Douglass       Treasurer          

 
 
 
 
 
 
 
Agreed and accepted as of June 8, 2007:
 
LASALLE BANK NATIONAL ASSOCIATION, as Administrative Agent
 
By:/s/Margaret C. Dierkes
_____________________________________
Margaret C. Dierkes
First Vice President
 
(end of signatures}
 

 
 
 
 

 

EXHIBIT A
 
DOCUMENTS AND REQUIREMENTS
 
 
1     First Amendment to Second Amended and Restated Credit Agreement (the
"First Amendment").
 
 2
Unconditional Reaffirmation of Guaranty and Amendment of Guarantors and the
Company, attached to the First Amendment.

 
 
 
 

EXHIBIT G
PROHIBITED ASSIGNEES
 
 
None

None