|EXHIBIT 10.78


INDEMNIFICATION
AGREEMENT


THIS
AGREEMENT, made and entered into this 27th day of February, 2004 by and between CPI
Corp., a Delaware corporation (the Company) and Lee Liberman (the
Indemnitee).


WHEREAS,
it is essential to the Company to retain and attract as directors and officers the most
capable persons available;


WHEREAS,
Indemnitee is a director of the Company;


WHEREAS,
both the Company and Indemnitee recognize the increased risk of litigation and other
claims being asserted against directors and officers of public companies in todays
environment;


WHEREAS,
in recognition of Indemnitees need for substantial protection against personal
liability and to enhance Indemnitees continued service to the Company in an
effective manner and in part to provide Indemnitee with specific contractual assurance
that the indemnification protection will be available to Indemnitee (regardless of, among
other things, any changes in the composition of the Companys Board of Directors),
and to induce Indemnitee to continue to provide services to the Company as a director,
the Company wishes to provide in this Agreement for the indemnification of and the
advancing of expenses to Indemnitee to the full extent (whether partial or complete)
permitted by law and as set forth in this Agreement, and, to the extent insurance is
maintained, for the continued coverage of Indemnitee under the Companys directors and
officers liability insurance policies;


NOW,
THEREFORE, in consideration of the premises and of Indemnitees continuing to serve
the Company directly or, at its request, another enterprise, and intending to be legally
bound hereby, the parties hereto agree as follows:


1. Certain
Definitions. As used herein the following terms shall have the           following
meanings:


(a) Board
of Directors: the Board of Directors of the Company.


(b) Change
of Control: a change of control of a nature that would be required           to be
reported in response to Item 1(a) of the Current Report of Form 8-K, as in
          effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities
          Exchange Act of 1934, as amended (Exchange Act) or would
have           been required to be so reported but for the fact that such event had been
          previously reported as that term is defined in Rule 12b-2
          of Regulation 12B of the Exchange Act unless the transactions that give rise to
          the change of control are approved or ratified by a majority of the individuals
          who constitute the Board of Directors on the date hereof (the Incumbent
          Board) who are not employees of the Corporation; provided that,
          without limitation, notwithstanding anything herein to the contrary, such a
          change of control shall be deemed to have occurred if, (i) any Person is or
          becomes the beneficial owner (as defined in Rule 13d-3 under the Exchange Act),
          directly or indirectly, of securities of the Company representing 40% or more
of           the combined Voting Securities, (ii) individuals who constitute the
Incumbent           Board cease for any reason to constitute at least a majority thereof,
provided           that any person becoming a director subsequent to the date hereof
whose           election, or nomination for election by the Companys shareholders,
was           approved by a vote of at least three-quarters of the directors comprising
the           Incumbent Board (either by a specific vote or by approval of the proxy
statement           of the Company in which such person is named as a nominee for
director, without           objection to such nomination) shall be, for purposes of this
clause (ii),           considered as though such person were a member of the Incumbent
Board, or           (iii) approval by the stockholders of the Company of a
reorganization,           merger or consolidation, in each case, with respect to which
persons who were           the stockholders of the Company immediately prior to such
reorganization, merger           or consolidation do not, immediately thereafter, own,
directly or indirectly,           more than 50%of the combined voting power
entitled to vote generally in           the election of directors of the reorganized,
merged or consolidated           companys then outstanding voting securities, or a
liquidation or           dissolution of the Company or the sale of all or substantially
all of the assets           of the Company.
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|(c) Claim:
any threatened, pending or completed action, suit, proceeding,           arbitration or
alternate dispute resolution proceeding, whether civil, criminal,
          administrative, investigative, or other, or any inquiry hearing or
investigation           (whether conducted by the Company or any other party or
authority) that           Indemnitee in good faith believes might lead to the institution
of any such           action, suit, proceeding, arbitration or alternate dispute
resolution           proceeding.


(d) Expenses:
include attorneys fees, expenses and charges and all           other costs, travel
expenses, fees of experts, transcript costs, filing fees,           witness fees,
telephone charges, postage, delivery service fees, expenses and           obligations of
any nature whatsoever paid or incurred in connection with           investigating,
defending, being a witness in or participating in (including on           appeal), or
preparing to defend, be a witness in or participate in any Claim           relating to
any Indemnifiable Event.


(e) Indemnifiable
Event: any event or occurrence related to the fact that           Indemnitee is or
was a director, officer, employee, agent or fiduciary of the           Company, or is or
was serving at the request of the Company as a director,           officer, employee,
trustee, agent or fiduciary of another corporation,           partnership, joint venture,
employee benefit plan, trust or other enterprise, or           by reason of anything done
or not done by Indemnitee in any such capacity.


(f) Independent
Legal Counsel: Independent Legal Counsel shall refer to an           attorney,
selected by the Indemnitee and approved by the Board of Directors           (which
approval shall not be unreasonably withheld), who shall not have           otherwise
performed services for the Company or Indemnitee within the last five           years.
Independent Legal Counsel shall be a member of or of counsel to a firm           having
no fewer than fifty attorneys as of the date such Independent Legal           Counsel is
designated by the Indemnitee. Independent Legal Counsel shall not be           counsel to
the Indemnitee in any Claims arising in whole or in part from any           Indemnifible
Event and shall not be Indemnitees counsel in any proceeding           to determine
Indemnitees rights hereunder. Independent Legal Counsel shall           also not be
any person who, under the applicable standards of professional           conduct then
prevailing, would have a conflict of interest in representing           either the
Company or Indemnitee in an action to determine Indemnitees           rights under
this Agreement, nor shall Independent Legal Counsel be any person           who has been
sanctioned or censured for ethical violations of applicable           standards of
professional conduct. In the event an Independent Legal Counsel           resigns,
becomes disabled, dies, or is otherwise unable in such counsels           opinion
to serve as Independent Legal Counsel, Indemnitee shall select, subject           to the
approval of the Board of Directors (which approval shall not be           unreasonably
withheld) a successor Independent Legal Counsel.


(g) Person:
any individual, corporation, partnership, group, association or           other person, as
such term is used in Section 14(d) of the Exchange           Act, other than the Company
or any corporation (or other business entity)           controlling, controlled by or
under common control with the Company or any           employee benefit plan(s) sponsored
or maintained by the Company or any           corporation (or other business entity)
controlling, controlled by or under           common control with the Company.


(h) Voting
Securities: all outstanding shares of capital stock of all classes           and
series of the Company entitled to vote generally in the election of           directors
of the Company, in each case hereunder voting together as a single           class.


(a)           In
the event Indemnitee was, is or becomes a party to or witness or other
          participant in, or is threatened to be made a party to or witness or other
          participant in, a Claim by reason of (or arising in whole or in part out of) an
          Indemnifiable Event, subject to Sections 2(b), 2(c), and 2(d) hereof the
Company           shall indemnify Indemnitee to the fullest extent permitted by law as
soon as           practicable but in any event no later than thirty days after the
Indemnitee           presents written demand to the Company, against any and all
reasonable Expenses           and all judgments, fines, penalties and amounts paid in
settlement (including           all interest, assessments and other charges paid or
payable in connection with           or in respect of such Expenses, judgments, fines,
penalties or amounts paid in           settlement) of such Claim and any federal, state,
local or foreign taxes imposed           on the Indemnitee as a result of the actual or
deemed receipt of any payments           under this Agreement. The Indemnitees
written demand shall also specify           the Independent Legal Counsel selected by
Indemnitee pursuant to the terms of           this Agreement.
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|If
so requested by Indemnitee in writing, the Company shall advance (within ten business
days of such request) any and all reasonable Expenses to Indemnitee or to the Indemnitees
counsel (an Expense Advance). Such written request shall also specify
the Independent Legal Counsel selected by Indemnitee if the Indemnitee has not previously
specified such Independent Legal Counsel.


Notwithstanding
anything in this Agreement to the contrary and except as provided in Section 3, prior to
a Change of control, Indemnitee shall not be entitled to indemnification pursuant to this
Agreement in connection with any Claim initiated by Indemnitee against the Company or any
director or officer of the Company unless the Company has joined in or consented to the
initiation of such Claim.


(b)           Notwithstanding
the foregoing, (i) the obligations of the Company under Section           2(a) hereof
shall be subject to the condition that within sixty (60) days of the           Indemnitees
written demand for an indemnification payment Independent           Legal Counsel shall
not have determined in a written opinion that Indemnitee           would not be permitted
to be indemnified under applicable law, and the           Indemnitee hereby agrees to
repay to the Company all indemnification amounts           paid to Indemnitee by the
Company under Section 2(a) hereof when and to the           extent that Independent Legal
Counsel so determines that such payments were not           to be permitted under
applicable law, and (ii) the obligation of the Company to           make an Expense
Advance pursuant to Section 2(a) shall be subject to the           condition that, within
sixty days of the Indemnitees written request for           an Expense Advance
Independent Legal Counsel shall not have determined in a           written opinion that
Indemnitee would not be permitted to receive such Expense           Advance under
applicable law, and the Indemnitee hereby agrees to repay to the           Company all
Expense Advances paid to the Indemnitee by the Company under Section           2(a)
hereof when and to the extent Independent Legal Counsel so determines that           such
Expense Advance was not permitted under applicable law; provided, however,           that
if in the case of any indemnification payment or Expense Advance under           Section
2(a) hereof Indemnitee commences legal proceedings in a court of           competent
jurisdiction to secure a determination that Indemnitee should be           indemnified
under applicable law (whether or not commenced prior to or following           the
determination of such Independent Legal Counsel) then (i) any
          determination made by Independent Legal Counsel that Indemnitee would not be
          permitted to be indemnified under applicable law shall not be binding upon
          Indemnitee, (ii) the Company shall be obligated to make such
          indemnification payments and Expense Advances as would otherwise be required by
          Section 2(a) unless and until a final judicial determination is made
          establishing that Indemnitee is not entitled to indemnification or Expense
          Advances under applicable law, and (iii) Indemnitee shall not be required
          to reimburse the Company for any such payment or Expense Advance until a final
          judicial determination is made requiring the Indemnitee to make such repayment.
          (A final judicial determination, as used in this and other Sections of this
          Agreement, is a determination with respect to which all rights of appeal
          therefrom have been exhausted or lapsed.) The Indemnitee hereby further agrees
          to repay to the Company all indemnification payments and Expense Advances made
          to Indemnitee under Section 2(a) hereof when and to the extent any such final
          judicial determination determines that such payments or Expenses were not
          permitted under applicable law. The lndemnitees obligation to reimburse
          the Company for indemnification payments and Expense Advances shall be
unsecured           and no interest shall be charged or payable thereon. If Independent
Legal           Counsel determines that Indemnitee substantively would not be permitted
to be           indemnified in whole or in part or to receive an Expense Advance under
          applicable law, Indemnitee shall have the right to commence litigation in any
          court sitting in the City or County of St. Louis, Missouri, or the State of
          Delaware having subject matter jurisdiction thereof and in which venue is
          properly seeking an initial determination by the court or challenging any such
          determination by the Independent Legal Counsel or any aspect thereof, or the
          legal or factual bases therefore, and the Company hereby consents to service of
          process and to appear in any such proceeding. Any determination by Independent
          Legal Counsel otherwise and made within the sixty day period provided under
this           Section 2(b) shall be conclusive and binding on the Company and
Indemnitee.


(c)           The
Company shall not make any payments to the Indemnitee pursuant to Section 2
          hereof on account of any Claim for recovery of profits from the purchase or
sale           by the Indemnitee of securities of the Company that is based upon the
provisions           of Section 16(b) of the Securities Exchange Act of 1934 and
amendments thereto           or similar provisions of any federal, state, or local
statutory law.
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|(d)           The
Indemnitee hereby agrees to repay to the Company on demand all           indemnification
payments and Expense Advances made to Indemnitee under Section 2           hereof that
are determined in a final judicial determination (as hereinbefore           defined) to
have been made with respect to the Indemnitees act or conduct           that was
knowingly fraudulent or deliberately dishonest or to have constituted           willful
misconduct.


3. Indemnification
for Additional Expenses. The Company shall indemnify           Indemnitee against any
and all expenses (including attorneys fees) and, if           requested by
Indetmnitee, shall (within ten business days of such request)           advance such
expenses to Indemnitee, which are incurred by Indemnitee in           connection with any
claim asserted against or in connection with any action           brought by Indemnitee
for (i) indemnification or advance payment of reasonable           Expenses by the
Company under this Agreement or any other agreement, the           Companys
Certificate of Incorporation, or the Bylaws of the Company now or           hereafter in
effect relating to Claims for Indemnifiable Events, and/or (ii)           recovery under
any directors and officers liability insurance           policies maintained
by the Company, regardless of whether Indemnitee ultimately           is determined to be
entitled to such indemnification, advance expense payment or           insurance
recovery, as the case may be.


4. Partial
Indemnity. If the Indemnitee is entitled under any provision of           this
Agreement to indemnification by the Company for some or a portion of the
          Expenses, judgments, fines, penalties and amounts paid in settlement of a Claim
          but not, however, for all of the total amount thereof, the Company shall
          nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee
is           entitled. Moreover, notwithstanding any other provision of this Agreement,
to           the extent that Indemnitee has been successful on the merits or otherwise in
          defense of any or all Claims relating in whole or in part to an Indemnifiable
          Event or in defense of any issue or matter therein, including dismissal without
          prejudice, Indemnitee shall be indemnified against all Expenses incurred in
          connection therewith. In connection with any determination by Independent Legal
          Counsel or otherwise as to whether Indemnitee is entitled to be indemnified
          hereunder the burden of proof shall be on the Company to establish that
          Indemnitee is not so entitled.


5. Independent
Legal Counsel Fees. The Company agrees to pay from time to           time the
reasonable fees of the Independent Legal Counsel and to indemnify fully           such
Independent Legal Counsel against any and all expenses (including           attorneys fees),
claims, causes of action, liabilities, damages,           judgments, penalties and fines
arising out of or relating to this Agreement or           the engagement of such
Independent Legal Counsel pursuant hereto.


6. No
Presumption. For purposes of this Agreement, the termination of any           claim,
action, suit or proceeding, by judgment, order, settlement (whether with           or
without court approval) or conviction, or upon a plea of nolo contendere, or
          its equivalent, shall not create a presumption that Indemnitee did not meet any
          particular standard of conduct or have any particular belief or that a court
has           determined that indemnification is not permitted by applicable law.


7. Non-exclusivity.
The rights of Indemnitee hereunder shall be in addition           to any other rights
Indemnitee may have under any other agreement, the           Companys Certificate
of Incorporation, the Bylaws of the Company, the           Delaware General Corporation
Law, or otherwise. To the extent that a change in           the Delaware General
Corporation Law (whether by statute or judicial decision)           permits greater
indemnification by agreement than would by afforded currently           under the Companys
Certificate of Incorporation, the Bylaws of the Company           and this Agreement, it
is the intent of the parties hereto that Indemnitee shall           enjoy by this
Agreement the greater benefits so afforded by such change.


8. No
Construction as Employment Agreement. Nothing contained herein shall           be
construed as providing the Indemnitee any right to be retained in the employ           of
the Company or any of its subsidiaries or to continue to serve as a director           of
the Company or any of its subsidiaries.


9. Liability
Insurance. To the extent the Company maintains an insurance           policy or
policies providing directors and officers liability           insurance,
Indemnitee shall be covered by such policy or policies (which shall,           if
available at reasonable cost to the Company, provide coverage to the           Indemnitee
for at least six (6) years after the Indemnitee has ceased to be a           director of
the Company), in accordance with its or their terms, to the maximum           extent of
the coverage reasonably available for any Company director or officer.
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|10. Period
of Limitations. No legal action shall be brought and no cause of           action
shall be asserted by or in the right of the Company or any affiliate of           the
Company against Indemnitee, Indemnitees spouse, heirs, executors,
          administrators or personal or legal representatives after the expiration of
          three years from the date of accrual of such cause of action, and any claim or
          cause of action of the Company or its affiliate shall be extinguished and
deemed           released unless asserted by the timely filing of a legal action within
such           three-year period; provided, however, that if any shorter period of
limitations           is otherwise applicable to any such cause of action such shorter
period shall           govern.


11. Amendments
and Waiver. No supplement, modification or amendment of this           Agreement
shall be binding unless executed in writing by both of the parties           hereto. No
waiver of any of the provisions of this Agreement shall be deemed or           shall
constitute a waiver of any other provisions hereof (whether or not           similar) nor
shall such waiver constitute a continuing waiver.


12. Subrogation.
In the event of payment to the Indemnitee under this           Agreement, the Company
shall be subrogated to the extent of such payment to all           of the rights of
recovery of Indemnitee, who shall execute all documents,           agreements, and
instruments required and shall do everything that may be           necessary to secure
such rights including the execution of such documents           necessary to enable the
Company effectively to bring suit to enforce such           rights.


13. No
Duplication of Payment. The Company shall not be liable under this
          Agreement to make any payment in connection with any claim made against
          Indemnitee to the extent Indemnitee has otherwise actually received payment
          (under any other agreement, any insurance policy, the Companys
Certificate           of Incorporation, the Bylaws of the Company or otherwise) of the
amounts           otherwise indemnifiable hereunder.


14. Miscellaneous.
This Agreement shall be binding upon and inure to the           benefit of and be
enforceable by the parties hereto and their respective           successors, assigns,
including any direct or indirect successor by purchase,           merger, consolidation
or otherwise to all or substantially all of the business           and/or assets of the
Company, spouses, heirs, beneficiaries, and personal and           legal representatives.
The Company shall require and cause any successor or           assign (whether direct or
indirect by purchase, merger, consolidation or           otherwise) to all, substantially
all, or a substantial part, of the business           and/or assets of the Company, by
written agreement in form and substance           satisfactory to Indemnitee, expressly
to assume and agree to perform this           Agreement in the same manner and to the
same extent that the Company would be           required to perform if no such succession
had taken place. This Agreement shall           continue in effect regardless of whether
Indemnitee continues to serve as a           director of the Company or of any other
enterprise at the Companys           request. Section headings are included herein
solely for convenience of           reference and shall not be used in the construction
and application of this           Agreement.


15. Severability.
The provisions of this Agreement shall be severable in the           event that any of
the provisions hereof (including any provision within a single           Section or a
paragraph or sentence thereof) are held by a court of competent           jurisdiction to
be invalid, void or otherwise unenforceable, and the remaining           provisions shall
remain enforceable to the fullest extent permitted by           applicable law.
Furthermore, to the fullest extent possible, the provisions of           this Agreement
(including, without limitation, each portion of this Agreement           containing any
provision held to be invalid, void or otherwise unenforceable,           that is not
itself invalid, void or unenforceable) shall be construed so as to           give effect
to the intent manifested by the provision held invalid, illegal or
          unenforceable.


16. Governing
Law. This Agreement and all amendments, modifications and           supplements
hereof shall be governed by and construed and enforced in accordance           with the
laws of the State of Delaware applicable to contracts made and to be           performed
in such state without giving effect to the principles of conflicts of           laws.
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|IN
WITNESS WHEREOF, the parties hereto have duly executed and delivered this Agreement as of
the date first above written.
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| |  | CPI CORP.

By:  /s/ J. David Pierson
      
      J. David Pierson
Title:   Chairman of the Board and
            Chief Executive Officer
           /s/ Lee Liberman
           
           Lee Liberman 
              Indemnitee
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