Document:

EXHIBIT 4(b)(20)

UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN CERTIFICATED
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (55 WATER STREET, NEW YORK, NEW YORK), TO THE ISSUER OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS
MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL, SINCE THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.

REGISTERED                                      $ [     ]

No. FL-01                                       CUSIP #[ ]

                         THE BEAR STEARNS COMPANIES INC.

                           MEDIUM-TERM NOTE, SERIES B

                            PRINCIPAL PROTECTED NOTES
         LINKED TO THE DECLINE, IF ANY, IN THE VALUE OF THE JAPANESE YEN
                        AGAINST THE UNITED STATES DOLLAR
                                DUE JULY 25, 2007

Interest Rate: *

Original Issue Date: January 25, 2006            Redeemable On and After: N/A

Maturity Date:       July 25, 2007               Optional Repayment Date(s): N/A

Minimum
Denominations:       $1,000, increased in multiples of $1,000 **

* The Company will not make any periodic payments of interest or any other
payments on the Notes until Maturity. At Maturity, the Company will pay the Cash
Settlement Value (as defined below).

** The minimum purchase for any purchaser domiciled in a Member State of the
European Union shall be $100,000.

<PAGE>

            THE BEAR STEARNS COMPANIES INC., a Delaware corporation (the
"Company"), for value received, hereby promises to pay to CEDE & CO., or
registered assigns, the Cash Settlement Value on the maturity date shown above
(the "Maturity Date").

            Payment of the Cash Settlement Value shall be made at the office or
agency of the Trustee (as defined below) maintained for that purpose in the
Borough of Manhattan, The City of New York, in such coin or currency of the
United States of America as at the time of payment is legal tender for the
payment of public and private debt.

            The Cash Settlement Value due at Maturity will be paid at Maturity
in immediately available funds against presentation of this Note at the office
or agency of the Trustee maintained for that purpose in the Borough of
Manhattan, The City of New York.

            REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS NOTE SET
FORTH ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES
HAVE THE SAME EFFECT AS IF SET FORTH ON THE FACE HEREOF.

            This Note shall be governed by and construed in accordance with the
laws of the State of New York.

            This Note is one of the series of Medium-Term Notes, Series B, of
the Company.

            Unless the certificate of authentication hereon has been executed by
JPMorgan Chase Bank, N.A. (formerly, The Chase Manhattan Bank), the Trustee
under the Indenture, or its successor thereunder by the manual signature of one
of its authorized signatories, this Note shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purpose.

                                       -2-
<PAGE>

            IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed under its corporate seal.

Dated:

                                       THE BEAR STEARNS COMPANIES INC.

                                       By:
                                          --------------------------------------
                                            Executive Vice President and
                                            Chief Financial Officer

ATTEST:

-------------------------
Secretary

[Corporate Seal]

                          CERTIFICATE OF AUTHENTICATION

            This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.

                                       JPMORGAN CHASE BANK, N.A., as Trustee

                                       By:
                                          --------------------------------------
                                          Authorized Signature

                                       -3-
<PAGE>

                                [Reverse of Note]

                         THE BEAR STEARNS COMPANIES INC.

                           MEDIUM-TERM NOTE, SERIES B

                            PRINCIPAL PROTECTED NOTES

         LINKED TO THE DECLINE, IF ANY, IN THE VALUE OF THE JAPANESE YEN
                        AGAINST THE UNITED STATES DOLLAR

                                DUE JULY 25, 2007

            This Note is one of a duly authorized issue of debentures, notes or
other evidences of indebtedness (hereinafter called the "Securities") of the
Company of the series hereinafter specified, all such Securities issued and to
be issued under the Indenture dated as of May 31, 1991, as amended (herein
called the "Indenture") between the Company and JPMorgan Chase Bank, N.A.
(formerly, The Chase Manhattan Bank), as trustee (herein called the "Trustee,"
which term includes any successor trustee under the Indenture), to which
Indenture and all indentures supplemental thereto reference is hereby made for a
statement of the respective rights and limitations of rights thereunder of the
Company, the Trustee and the Holders of the Securities, and the terms upon which
the Securities are, and are to be, authenticated and delivered. As provided in
the Indenture, Securities may be issued in one or more series, which different
series may be issued in various aggregate principal amounts, may mature at
different times, may bear interest, if any, at different rates, may be subject
to different redemption provisions, if any, may be subject to different
repayment provisions, if any, may be subject to different sinking, purchase or
analogous funds, if any, may be subject to different covenants and Events of
Default and may otherwise vary as in the Indenture provided or permitted. This
Note is one of the series of the Securities designated as Medium-Term Notes,
Series B (the "Notes"). The Notes of this series may be issued at various times
with different maturity dates, redemption dates and different principal
repayment provisions, may bear interest at different rates and may otherwise
vary, all as provided in the Indenture.

Certain Definitions

Exchange Rate:...................   means the relationship between the Japanese
                                    yen and the U.S. dollar as expressed as the
                                    number of Japanese yen which can be
                                    exchanged for one U.S. dollar, as determined
                                    at the 10 a.m. (New York time) Federal
                                    Reserve Bank of New York midpoint fixing for
                                    JPY per USD exchange rate as published on
                                    Reuters Screen Page "1 FED" and on Bloomberg
                                    as TNFXJY (Index) (the "Exchange Rate").

Calculation Agent:...............   means Bear Stearns Forex Inc.

Currency Business Day:...........   means a day, as determined by the
                                    Calculation Agent in its sole discretion,
                                    other than a Saturday or Sunday, on which

                                       -4-
<PAGE>

                                    commercial banks are open for business
                                    (including dealings in foreign exchange and
                                    foreign currency deposits) in the principal
                                    financial centers in the U.S. and Japan

Initial Exchange Rate:...........   equals 115.21.

Final Exchange Rate:.............   will be determined by the Calculation Agent
                                    and will equal the Exchange Rate on July 20,
                                    2007, the "Calculation Date," or, if that
                                    day is not a Currency Business Day, on the
                                    next Currency Business Day.

Maturity Date:...................   means July 25, 2007.

Cash Settlement Value

            At Maturity, the Company shall pay the "Cash Settlement Value," as
follows:

            (i)   If, at maturity, the Final Exchange Rate is greater than or
                  equal to the Initial Exchange Rate, the Cash Settlement Value
                  will equal the principal amount of Notes, plus:

                                   |Final Exchange Rate - Initial Exchange Rate|
                  o $1000 x 200% x |-------------------------------------------|
                                   |             Final Exchange Rate           |

            (ii)  If, at maturity, the Final Exchange Rate is less than the
                  Initial Exchange Rate, the Cash Settlement Value will be
                  $1,000. Because the Notes are principal protected if held to
                  maturity, in no event will the Cash Settlement Value be less
                  than $1000.

Discontinuance of the Exchange Rate

            If the Calculation Agent, in its sole discretion, determines, that
the Japanese yen has been removed from circulation or otherwise discontinued and
banks dealing in foreign exchange and foreign currency deposits in Japanese yen
have commenced trading a successor or substitute currency substantially similar
to the Japanese yen that the Calculation Agent determines, in its sole
discretion, to be comparable to the Japanese yen (the "Successor Currency") (the
number of such Successor Currency which can be exchanged for one U.S. dollar on
the relevant Calculation Date being referred to herein as the "Successor
Exchange Rate"), then the Final Exchange Rate will be determined by reference to
the Successor Exchange Rate at the time determined by the Calculation Agent on
the markets for the Successor Currency on the Calculation Date.

            If the Calculation Agent determines that any Successor Exchange Rate
shall be utilized for purposes of calculating the Final Exchange Rate, the
Calculation Agent will make such calculations and adjustments as, in the good
faith judgment of the Calculation Agent, may be necessary in order to arrive at
the Final Exchange Rate.

                                       -5-
<PAGE>

            Upon any selection by the Calculation Agent of a Successor Exchange
Rate, the Calculation Agent will cause notice to be furnished to the Company and
the Trustee, who will provide notice of the selection of the Successor Index to
the Holders of the Notes. If a Successor Exchange Rate is selected by the
Calculation Agent, the Successor Exchange Rate will be used as a substitute for
the Exchange Rate for all purposes, including for purposes of calculating the
Cash Settlement Value and determining whether a Currency Disruption Event
exists.

            If the Calculation Agent, in its sole discretion, determines that
(i) it is unable to determine the Final Exchange Rate or Successor Exchange Rate
for two consecutive Currency Business Days, or (ii) that the Japanese yen has
been removed from circulation or otherwise discontinued and that no Successor
Exchange Rate is available at such time, the Calculation Agent will determine,
in its sole discretion, the value of the Exchange Rate to be used for the Final
Exchange Rate. Notwithstanding the foregoing, if the Japanese yen has been
removed from circulation or otherwise discontinued, and the Calculation Agent
determines that no Successor Exchange Rate is available at such time and no
Successor Exchange Rate is likely to become available, the Calculation Agent
may, in its sole discretion, accelerate the Maturity Date for the Notes,
calculate the Final Exchange Rate as specified above and calculate the Cash
Settlement Value based upon such Final Exchange Rate.

Currency Disruption Events

            If there is a currency disruption event (a "Currency Disruption
Event") on the date with respect to which the Final Exchange Rate is to be
determined, the Final Exchange Rate will be determined on the basis of the first
succeeding Currency Business Day on which there is no Currency Disruption Event.
In no event, however, will the date with respect to which the Final Exchange
Rate is determined be a date that is more than two Currency Business Days
following the original date that, but for the Currency Disruption Event, would
have been utilized to determine the Final Exchange Rate. In that case, the
second Currency Business Day will be deemed to be the Calculation Date,
notwithstanding the Currency Disruption Event, and the Calculation Agent will
determine the Final Exchange Rate on that second Currency Business Day in
accordance with the method of calculating the Final Exchange Rate in effect
prior to the Currency Disruption Event (that would have prevailed but for such
suspension or limitation) as of that second Currency Business Day.

            A Currency Disruption Event means any of the following events, as
determined by the Calculation Agent, in its sole discretion:

o     (a) the occurrence or existence of any condition or event (other than an
      event described in (b) below) which the Calculation Agent determines is
      material that, at any time, disrupts or impairs (as determined by the
      Calculation Agent in its sole discretion) the ability of market
      participants in general through legal channels to (A) convert Japanese yen
      or any Successor Currency into U.S. dollars, (B) deliver U.S. dollars from
      accounts within the local jurisdiction for Japanese yen or any Successor
      Currency, to accounts outside such jurisdiction, or (C) to deliver
      Japanese yen or any Successor Currency between accounts within the local
      jurisdiction to a person that is a non-resident of such jurisdiction; or

o     (b) any other event, the Calculation Agent determines in its sole
      discretion, that materially interferes with our ability or our affiliates'
      ability to unwind all or a material

                                       -6-
<PAGE>

      portion of a hedge with respect to the Notes that we or our affiliates
      have effected or may effect

Redemption; Defeasance

            The Notes are not subject to redemption before Maturity, and are not
subject to defeasance.

Events of Default and Acceleration

            If an Event of Default with respect to any Notes has occurred and is
continuing, then the amount payable to the beneficial owner of a Note, upon any
acceleration permitted by the Notes will be equal to the Cash Settlement Value
as though the date of early repayment were the Maturity Date of the Notes,
adjusted by an amount equal to any losses, expenses and costs to the Company of
unwinding any underlying or related hedging or funding arrangements, all as
determined by the Calculation Agent in its sole and absolute discretion.

Same-Day Settlement and Payment

            Payment of the Cash Settlement Value will be made in immediately
available funds, so long as the Notes are maintained in book-entry form.

Calculation Agent

            All determinations made by the Calculation Agent will be at the sole
discretion of the Calculation Agent and will, in the absence of manifest error,
be conclusive for all purposes and binding on the Company and Holders of the
Notes.

General

            If so specified on the face of this Note, this Note may be redeemed
by the Company on and after the date so indicated on the face hereof. If no such
date is set forth on the face hereof, this Note may not be redeemed prior to
Maturity. On and after such date, if any, from which this Note may be redeemed,
this Note may be redeemed in whole or in part in increments of $1,000, at the
option of the Company, at a redemption price equal to 100% of the principal
amount to be redeemed, together with interest thereon payable to the Redemption
Date, on notice given, unless otherwise specified on the face hereof, not more
than 60 nor less than 30 days prior to the Redemption Date. If less than all the
Outstanding Notes having such terms as specified by the Company are to be
redeemed, the particular Notes to be redeemed shall be selected by the Trustee
not more than 60 days prior to the Redemption Date from the Outstanding Notes
having such terms as specified by the Company not previously called for
redemption, by such method as the Trustee shall deem fair and appropriate. The
notice of such redemption shall specify which Notes are to be redeemed. In the
event of redemption of this Note, in part only, a new Note or Notes in
authorized denominations for the unredeemed portion hereof shall be issued in
the name of the Holder hereof upon the surrender hereof.

                                       -7-
<PAGE>

            If so specified on the face of this Note, this Note will be subject
to repayment at the option of the Holder hereof on the Optional Repayment
Date(s). If no Optional Repayment Date is set forth on the face hereof, this
Note may not be repaid at the option of the Holder prior to Maturity. On and
after the Optional Repayment Date, if any, from which this Note may be repaid at
the option of the Holder, this Note shall be repayable in whole or in part in
increments of $1,000 at a repayment price equal to 100% of the principal amount
to be repaid, together with interest thereon payable to the Optional Repayment
Date. For this Note to be repaid in whole or in part at the option of the Holder
hereof, the Trustee must receive not less than 30 nor more than 60 days prior to
the Optional Repayment Date (i) this Note with the form entitled "Option to
Elect Repayment," which appears below, duly completed or (ii) a telegram, telex,
facsimile transmission or a letter from a member of a national securities
exchange or the National Association of Securities Dealers, Inc. or a commercial
bank or trust company in the United States of America setting forth the name of
the Holder of this Note, the principal amount of this Note, the certificate
number of this Note or a description of this Note's tenor or terms, the
principal amount of this Note to be repaid, a statement that the option to elect
repayment is being exercised thereby and a guarantee that this Note with the
form entitled "Option to Elect Repayment," which appears below, duly completed,
will be received by the Trustee no later than five Business Days after the date
of such telegram, telex, facsimile transmission or letter and this Note and such
form duly completed are received by the Trustee by such fifth Business Day.
Exercise of the repayment option shall be irrevocable.

            If any Event of Default with respect to the Notes shall occur and be
continuing, the Trustee or the Holders of not less than 25% in principal amount
of the Outstanding Notes may declare the principal of all the Notes due and
payable in the manner and with the effect provided in the Indenture.

            The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of 66-2/3% in aggregate principal amount of the
Securities at the time Outstanding of each series affected thereby. The
Indenture also contains provisions permitting the Holders of specified
percentages in aggregate principal amount of the Securities of each series at
the time Outstanding, on behalf of the Holders of all Securities of each series,
to waive compliance by the Company with certain provisions of the Indenture and
certain past defaults under the Indenture and their consequences. Any such
consent or waiver by the Holder of this Note shall be conclusive and binding
upon such Holder and upon future Holders of this Note and of any Note issued
upon the registration of transfer hereof or in exchange hereof or in lieu hereof
whether or not notation of such consent or waiver is made upon this Note.

            Holders of Securities may not enforce their rights pursuant to the
Indenture or the Securities except as provided in the Indenture. No reference
herein to the Indenture and no provision of this Note or the Indenture shall
alter or impair the obligation of the Company, which is absolute and
unconditional, to pay the Cash Settlement Value with respect to this Note at the
time, place, and rate, and in the coin or currency, herein prescribed.

                                       -8-
<PAGE>

            As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Note may be registered on the Security
Register of the Company, upon surrender of this Note for registration of
transfer at the office or agency of the Company in the Borough of Manhattan, The
City of New York, duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Company, and this Note duly executed by,
the Holder hereof or by his attorney duly authorized in writing and thereupon
one or more new Notes, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees.

            The Notes are issuable only in registered form without coupons in
denominations of $1,000 or any amount in excess thereof which is an integral
multiple of $1,000. As provided in the Indenture and subject to certain
limitations therein set forth, this Note is exchangeable for a like aggregate
principal amount of Notes of different authorized denomination as requested by
the Holder surrendering the same.

            No service charge will be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.

            Prior to the due presentment of this Note for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Note is registered as the owner hereof
for all purposes, whether or not this Note be overdue, and neither the Company,
the Trustee nor any such agent shall be affected by notice of the contrary.

            The Cash Settlement Value payable with respect to this Note shall in
no event be higher than the maximum rate, if any, permitted by applicable law.

            All capitalized terms used in this Note and not otherwise defined
herein shall have the meanings assigned to them in the Indenture.

                                       -9-
<PAGE>

                      ------------------------------------

                                  ABBREVIATIONS

The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:

TEN COM          -      as tenants in common

TEN ENT          -      as tenants by the entireties

JT TEN           -      as joint tenants with right of survivorship and not as
                        tenants in common

UNIF GIFT MIN ACT -     ___________________ Custodian ___________________
                              (Cust)                        (Minor)
                                Under Uniform Gifts to Minors Act

                        _________________________________________________
                                             (State)

Additional abbreviations may also be used though not in the above list.

                      ------------------------------------

                            OPTION TO ELECT REPAYMENT

            The undersigned hereby irrevocably request(s) and instruct(s) the
Company to repay this Note (or portion thereof specified below) pursuant to its
terms on ____________, 20___ (the "Optional Repayment Date") at a price equal to
the principal amount thereof, together with interest to the Optional Repayment
Date, to the undersigned at

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
        (Please print or typewrite name and address of the undersigned.)

            For this Note to be repaid the Trustee must receive at 4 New York
Plaza, New York, New York 10004, Attention: Debt Operations - 13th Floor, or at
such other place or places of which the Company shall from time to time notify
the Holder of this Note, not more than 60 days nor less than 30 days prior to
the Optional Repayment Date, this Note with this "Option to Elect Repayment"
form duly completed.

                                      -10-
<PAGE>

            If less than the entire principal amount of this Note is to be
repaid, specify the portion thereof (which shall be increments of $1,000) which
the Holder elects to have repaid: $_________________; and specify the
denomination or denominations (which, unless a different minimum denomination is
set forth on the face hereof, shall be $25,000 or an integral multiple of $1,000
in excess of $25,000) of the Notes to be issued to the Holder for the portion of
this Note not being repaid (in the absence of any such specification, one such
Note will be issued for the portion not being repaid): $________________.

Date:_________________                       ________________________________
                                             Note:  The signature to this
                                             Option to Elect Repayment must
                                             correspond with the same as
                                             written upon the face of this
                                             Note in every particular without
                                             alteration or enlargement.

                      ------------------------------------

                                   ASSIGNMENT
                                   ----------

                       FOR VALUE RECEIVED, the undersigned
                 hereby sell(s), assign(s) and transfer(s) unto

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PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE

------------------------------------------------------------------------------

------------------------------------------------------------------------------

------------------------------------------------------------------------------
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE

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the within Note and all rights thereunder, hereby irrevocably constituting and
appointing

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_____________________________________________________________________ Attorney
to transfer said Note on the books of the Company, with full power of
substitution in the premises.

Dated:
      ------------------------------              ------------------------------

------------------------------------
        (Signature Guarantee)

                                      -11-FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT

 

This FIRST AMENDMENT TO FIRST AMENDED AND RESTATED CREDIT AGREEMENT (this “Agreement”) is entered into and effective as of January 25, 2006 (or such other date as expressly set forth herein), 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 Amended and Restated Credit Agreement dated as of November 30, 2005 (as amended, the “Loan Agreement”).
 

 

	
            B.
 	
            As a condition to the execution and delivery of this Agreement, the Company, the Administrative Agent, and the Lenders have executed a Master Assignment and Acceptance Agreement, of even date herewith (the “Master Assignment and Acceptance Agreement”), which Master Assignment and Acceptance Agreement is effective simultaneously with the effectiveness of this Agreement, and pursuant to which the New Lender (as defined in the Master Assignment and Acceptance Agreement”) has become a Lender under the Loan Agreement.
 

 

	
            C.
 	
            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 “Loan Agreement” in the Loan Agreement and in this Agreement shall be deemed to be references to the Loan 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 Loan 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 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 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.
 	
            Amendment.
 

3.1.         Agent Fee Letter.  The defined term “Agent Fee Letter” set forth in Section 1.1 of the Loan Agreement is deleted and replaced with the following:

 

“Agent Fee Letter means, collectively, the Fee letter dated as of November 30, 2005 between the Company and the Administrative Agent, the Fee Letter dated as of January 11, 2006 between the 

 

 

 

Company and the Administrative Agent, and any other fee letter or similar agreement executed from time to time between the Company and the Administrative Agent.”

 

3.2.         Applicable Margin.  The table in the defined term “Applicable Margin” set forth in Section 1.1 of the Loan Agreement is deleted and replaced with the following: 

 

	
            Level
 	
            Total Funded Debt to EBITDA Ratio
 	
            LIBOR Margin Revolving Loans
 	
            Base Rate Margin Revolving Loans
 	
            LIBOR Margin Term Loans
 	
            Base Rate Margin Term Loans
 	
            Non-Use Fee Rate
 	
            L/C Fee Rate
 
	
            I
 	
            Greater than or equal to 1.50 to 1.00
 	
            2.750%
 	
            0.500%
 	
            3.250%
 	
            1.000%
 	
            0.500%
 	
            2.750%
 
	
            II
 	
            Less than 1.50 to 1.00 but greater than or equal to 1.00 to 1.00 
 	
            2.500%
 	
            0.250%
 	
            3.000%
 	
            0.750%
 	
            0.500%
 	
            2.500%”
 

 

3.3.         First Amendment Date.  A new defined term "First Amendment Date" is added in alphabetical order to Section 1.1. of the Loan Agreement as follows:

"First Amendment Date means January 25, 2006."

 

3.4.         Fixed Charges.  A new defined term of “Fixed Charges” is added in alphabetical order to Section 1.1 of the Loan Agreement as follows: 

 

“Fixed Charges means, for any period of calculation, the sum of (i) cash Interest Charges, (ii) the sum of all scheduled principal payments on long term Debt of all Loan Parties (including the Term Loan and other interest-bearing Debt and all payments on Capital Leases), (iii) all dividends and distributions (but excluding any redemption, purchase or repurchase of the Company’s Capital Securities to the extent permitted by this Agreement), and (iv) all Capital Expenditures not proceeds of the Loans, but excluding for the fiscal quarter ending the following amounts (A) fiscal quarter ending February 5, 2005, $1,150,000, (B) fiscal quarter ending April 30, 2005, $5,887,000, (C) fiscal quarter ending July 23, 2005, $6,388,000, and (D) fiscal quarter ending November 12, 2005, $4,346,000. 

 

3.5.         Required Lenders.  The defined term “Required Lenders” set forth in Section 1.1 of the Loan Agreement is deleted and replaced with the following: 

 

“Required Lenders means, at any time, Lenders whose Pro Rata Shares exceed 66.66666667% as determined pursuant to clause (b) of the definition of “Pro Rata Share” provided, however, if there are two Lenders, then Required Lenders shall mean both Lenders.”

 

3.6.         Definition of Term Loan Commitment.  The defined term “Term Loan Commitment” set forth in Section 1.1 of the Loan Agreement is deleted and replaced with the following: 

 

“Term Loan Commitment means $25,000,000 subject to increase as provided in Section 2.1.2.1. hereof.”

 

 

2

 

 

 

3.7.         Term Loan Commitment.  Section 2.1.2 of the Loan Agreement is deleted and replaced with the following:

 

“2.1.2.  Term Loan Commitment.  Each Lender with a Term Loan Commitment agrees to make one or more loans to the Company (each such loan, a “Term  Loan”) from and after the Closing Date through and including December 30, 2006, in such Lender’s Pro Rata Share of the Term  Loan Commitment.  The Commitments of the Lenders to make Term Loans shall expire on the First Amendment Date, subject to Section 2.1.2.1 herein.  The Company and each Lender acknowledge and agree that $18,000,000 of the Term Loan Commitment was fully funded on the Closing Date and such amount is no longer available to the Company to be readvanced to the Company.  Subject to the terms and conditions contained herein, $7,000,000 of the Term Loan Commitment shall be funded on the First Amendment Date and thereafter, subject to Section 2.1.2.1., the Term Loan
Commitment shall be fully funded.” 

 

3.8.         Increase in Term Loan Commitment.  A new Section 2.1.2.1. is hereby added to the Loan Agreement as follows:

 

“2.1.2.1.  Increases in Term Loan Commitment.  The Company may one time, at its option at any time on or before December 30, 2006, seek to increase the Term Loan Commitment by an aggregate amount of no less than Ten Million Dollars ($10,000,000) and no greater than Fifteen Million Dollars ($15,000,000) (resulting in maximum Term Loan Commitment of up to Forty Million Dollars ($40,000,000)) upon written notice to the Administrative Agent, which notice shall be delivered at a time when no Unmatured Event of Default or Event of Default has occurred and is continuing.  The ability to request an increase in the Term Loan Commitment may be exercised only one time by the Company prior to December 30, 2006, must be closed and funded prior to December 30, 2006, and must be in an amount of no less than Ten Million Dollars ($10,000,000) and no
greater than Fifteen Million Dollars ($15,000,000) and only in whole One Million Dollar ($1,000,000) increments.  The Administrative Agent, subject to the consent of the Company, which shall not be unreasonably withheld or delayed, may allocate, as it determines in Administrative Agent’s sole discretion, the incremental increase in the Term Loan Commitment on either a ratable basis to the Lenders (which may be declined by any Lender in its sole discretion) or on a non pro-rata basis to one or more Lenders (which may be declined by any Lender in its sole discretion) and/or to other banks or entities reasonably acceptable to the Administrative Agent and the Company which have expressed a desire to accept the increase in the Term Loan Commitment.  The Administrative Agent will then notify each existing and potentially new Lender of such revised allocations of the Term Loan Commitment, including the desired increase.  No increase in the Term Loan Commitment shall become effective
until each of the existing or new Lenders extending such incremental increase in its Term Loan Commitment and the Company shall have delivered to the Administrative Agent one or more documents, notes, opinions, and other agreements reasonably requested by Administrative Agent, each in form reasonably satisfactory to the Administrative Agent pursuant to which any such existing Lender states, inter alia, the amount of its Term Loan Commitment increase, any such new Lender states its Term Loan Commitment amount and agrees to assume and accept the obligations and rights of a Lender hereunder, the Company accepts such new Term Loan Commitments, and Company certifies that no Unmatured Event of Default or Event of Default has occurred and is continuing.  After giving effect to such increase in the Term Loan Commitment, all Loans and all such other credit exposure shall be held ratably by the Lenders in proportion to their respective Term Loan
Commitments, as revised to accommodate the increase in the Term Loan Commitment.  Upon any increase in the Term Loan Commitment pursuant to this Section, the Company shall pay Administrative Agent for the ratable benefit of only the Lenders (including any new Lender) whose Term Loan Commitments are increased an upfront commitment fee in an amount equal to 

 

3

 

 

the accordion feature committed to by such Lender(s), based on then-prevailing market conditions and as mutually agreed to among the Company, the Lenders whose Term Commitments are increased and the Administrative Agent.  Upon any such increase, Annex A shall be deemed to be amended to reflect such increase and the Administrative Agent shall promptly deliver a copy of the revised Annex A to each Lender and the Company.”

 

3.9.         Term Loan Principal Payments.  Section 6.4.2 is deleted in its entirety and replaced with the following:

 

“6.4.2  Term Loans.  The Term Loan of each Lender shall be paid in installments equal to such Lender’s Pro Rata Share of the aggregate principal amount of the installments of the Term  Loan as follows: (A) $4,167,000 payable on each of June 30, 2006 and December 31, 2006, and (B) an amount equal to twenty five percent (25%) of the outstanding principal balance of the Term Loan on January 1, 2007, payable on each of June 30, 2007, December 31, 2007, June 30, 2008 and the Term Loan Maturity Date.”

3.10.       Use of Proceeds.  Section 10.6 of the Loan Agreement is deleted in its entirety and replaced with the following:

 

“10.6  Use of Proceeds.  Use the proceeds of the Revolving Loans, solely to pay Debt to be Repaid, for working capital purposes and general business purposes, for Capital Expenditures (including retail store expansions), other general business purposes, and to fund the purchase, the repurchase or the redemption of the Company’s Capital Stock to the extent permitted by this Agreement; use of the proceeds of the Term Loan to fund the purchase, the repurchase or the redemption of the Company’s Capital Stock to the extent permitted by this Agreement and to pay the Debt to be Repaid and if such proceeds of the Term Loan are not needed to fund the purchase, the repurchase or the redemption of the Company’s Capital Stock to the extent permitted by this Agreement then such proceeds may be used for working capital purposes and
general business purposes; use of the Letters of Credit for general business purposes; and not use or permit any proceeds of any Loan to be used, either directly or indirectly, for the purpose, whether immediate, incidental or ultimate, of “purchasing or carrying” any Margin Stock.”

3.11.       Restricted Payments.  Section 11.4 of the Loan Agreement is deleted in its entirety and replaced with the following: 

 

“11.4.  Restricted Payments.  Not, and not permit any other Loan Party to, (a) make any distribution or pay any dividend to any holders of its Capital Securities, (b) purchase or redeem any of its Capital Securities, (c) pay any management fees or similar fees to any of its equityholders or any Affiliate thereof, (d) make any redemption, prepayment, defeasance, repurchase or any other payment in respect of any Debt (but not including the Obligations), prior to its stated maturity or amortization schedule (in each case as such amortization schedule exists on the date hereof) or (e) set aside funds for any of the foregoing.  Notwithstanding the foregoing, (i) any Subsidiary may pay dividends or make other distributions to the Company or to a domestic Wholly-Owned Subsidiary; and (ii) so long as no Event of Default or Unmatured Event of
Default exists or would result therefrom, the Company, (A) may pay dividends or make other distributions to the holders of its Capital Stock up to an aggregate of $5,500,000 in each Fiscal Year, and (B) subject to the proviso to this clause (B), may expend to purchase, repurchase or redeem the Company’s Capital Stock (i) at any time prior to December 30, 2006, up to $35,000,000 in the aggregate, (ii) from and including January 1, 2007 through and including December 31, 2007, $15,000,000 in the aggregate, and (iii) from and including January 1, 2008 through and including December 31, 2008, $5,000,000 in the aggregate, minus with respect to  

 

4

 

 

each of the foregoing clauses (B)(i), (B)(ii) and (B)(iii) the amount actually expended by the Company to purchase, repurchase or redeem the Company’s Capital Stock from November 30, 2005 through and including the First Amendment Date; provided, however, the aggregate amount that the Loan Parties may expend to purchase, repurchase or redeem the Company’s Capital Stock from November 30, 2005 through and including the Term Loan Maturity Date shall not exceed $35,000,000 in the aggregate.  The reference in clause (B)(i) of the foregoing sentence to “$35,000,000” and in the proviso to the foregoing sentence to “$35,000,000” shall each be increased to “$40,000,000” if and only if the Company requests an increase in the Term Loan Commitment as set forth in Section 2.1.2.1 of this Agreement and such request is committed to as
set forth in Section 2.1.2.1.”  

	
            3.12.
 	
            Interest Rate Protection.  A new Section 10.11 is hereby added to the Loan Agreement:
 

 

“10.11  Interest Rate Protection.  The Company agrees to enter into with Administrative Agent, 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 50% of the principal amount of the Term Loan then outstanding, in form and substance reasonably satisfactory to the Administrative Agent.

	
            3.13.
 	
            Debt.  Section 11.1(b) is deleted in its entirety and replaced with the following:
 

 

“(b)         Debt secured by Liens permitted by Section 11.2(d), and extensions, renewals and refinancings thereof; provided that the aggregate amount of all such Debt at any time outstanding shall not exceed $5,000,000, provided, however, the forgoing limit shall not include a Sale Leaseback if such Sale Leaseback is consummated in an arm’s-length manner on market terms and conditions;”

3.14.       Minimum Net Worth.  The first sentence (up to the table) of Section 11.15.3 of the Loan Agreement is deleted and replaced with the following: 

 

“11.15.3  Minimum Net Worth.  The Company’s Net Worth as of the last day of each Fiscal Quarter shall not be less than the following, plus with respect to each of the following, 90% of the net proceeds of any issuance of equity or equity securities in the Company issued after November 30, 2005, minus with respect to each of the following, the aggregate amount spent by the Company to purchase, repurchase or redeem the Company’s Capital Stock since November 30, 2005 as permitted by Section 11.4 of this Agreement:”

 

	
            3.15.
 	
            Fixed Charges.  A new Section 11.15.5 is hereby added to the Loan Agreement as follows:
 

 

“11.15.5 Fixed Charges.  Company shall cause the ratio, for Company and its Subsidiaries, of (A) the net result of (i) EBITDA minus (ii) federal, state and local income taxes paid, in each case, without duplication for the most recently ended four fiscal quarters to (B) Fixed Charges for the most recent ended four fiscal quarters, calculated as of the last day of each such fiscal quarter, to not be less 1.10 to 1.00.”  

 

3.16.       Exhibit A.  The Exhibit A attached to the Loan Agreement is deleted and replaced with the Exhibit A attached hereto.

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, 

 

5

 

 

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 Loan 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) except as disclosed on the supplemental disclosure schedule attached hereto as Exhibit B, the disclosure schedule attached to the Loan
Agreement, and as disclosed by the terms of any amendments, consents or waivers signed by Administrative Agent and the Lenders prior to the date hereof, all of the representations and warranties contained in Section 9 of the Loan 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 February 5, 2005, 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 Loan Agreement or any of the other Loan Documents, nor constitute a waiver of any provision of the Loan Agreement, any of the other Loan Documents or any existing Unmatured Event of Default or Event of Default.  Each reference in the Loan Agreement to "the Agreement", "hereunder", "hereof", "herein", or words of like import, shall be read as referring to the Loan Agreement as amended by this Amendment.  

 

6.            Reaffirmation; Waiver of Claims.  Company hereby acknowledges and confirms that as of the date hereof, (i) the Loan 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 Loan 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 Loan 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 

 

6

 

 

their Subsidiaries that, pursuant to the requirements of the USA Patriot Act, Title III 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 Loan 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 Commitments.  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 

 

7

 

 

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}

 

8

 

 

 

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

 

CPI CORP., a Delaware corporation

 

By:        /s/ Gary W. Douglass                                

Name:    Gary W. Douglass                                    

Title:      Treasurer                                          
        

 

 

LASALLE BANK NATIONAL ASSOCIATION,

as Administrative Agent and as a Lender

 

By:        /s/ Margaret C. Dierkes                            

Name:    Margaret C. Dierkes                                

Title:      Vice President                                          

 

 

FIFTH THIRD BANK

as a Lender

 

By:        /s/ Shawn D. Hagan                                  

Name:    Shawn D. Hagan                                      

Title:      Vice President                                          

 

{Unconditional Reaffirmation of Guaranty follows}

 

 

9

 

 

 

UNCONDITIONAL REAFFIRMATION OF GUARANTY

 

Each of the undersigned has reviewed the First Amendment to 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.

 

Dated: January 25, 2006

 

CONSUMER PROGRAMS INCORPORATED, a Missouri corporation, as a Guarantor

By     /s/ Gary W. Douglass                                          
      

Name:     Gary W. Douglass                                          
      

Title:     Vice President                                          
              

 

CPI CANADIAN HOLDINGS, INC., a Delaware corporation, as a Guarantor

By:     /s/ Margaret C. Dierkes                                          
  

Name:     Margaret C. Dierkes                                          
  

Title:     Vice President                                          
              

 

CPI IMAGES, L.L.C., a Missouri limited liability company, as a Guarantor

 

By:  Consumer Programs Incorporated, its Manager

 

By:     /s/ Shawn D. Hagan                                          
        

Name:     Shawn D. Hagan                                          
        

Title:     Vice President                                          
              

 

 

10

 

 

 

CPI INTERNATIONAL HOLDINGS, INC., a Delaware corporation, as a Guarantor

By:     /s/Gary W. Douglass                                          
      

Name:     Gary W. Douglass                                          
      

Title:     Treasurer                                          
                      

 

{end of signatures}

 

11

 

 

 

Exhibit A

 

Documents and Requirements

 

	
            1.
 	
            Master Assignment and Acceptance Agreement
 

	
            2.
 	
            First Amendment to Amended and Restated Credit Agreement.
 

	
            3.
 	
            Unconditional Reaffirmation of Guaranty from each Guarantor (attached to First Amendment).
 

	
            4.
 	
            Certificate signed by either the President or Chief Financial Officer of the Company certifying that: (i) there no outstanding Revolving Loans or Swing Line Loans as of the date of this Agreement, (ii) the Company holds at least $30,000,000 in cash balances in commercial banks or investment accounts as of the date of this Agreement, (iii) the minimum trailing twelve-month EBITDA (for the period ending January 7, 2006) was no less than $31,000,000, (iv) the ratio of funded debt to EBITDA was no more than 2.00 to 1.00, based on twelve-month EBITDA (for the period ending January 7, 2006), and (v) the Company 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), and results of
operations or prospects of the Loan Parties and their customers..
 

	
            5.
 	
            Amended and Restated Note of $35,000,000 payable to LaSalle Bank National Association. 
 

	
            6.
 	
            Note of $15,000,000 payable to Fifth Third Bank.
 

	
            7.
 	
            Disbursement Letter regarding funding of the remaining $7,000,000 of the Term Loan.
 

	
            8.
 	
            First Amendment to Deed of Trust for the St Louis, Missouri real estate.
 

	
            9.
 	
            First Amendment to Mortgage for the Thomaston, Connecticut real estate.
 

	
            10.
 	
            Dated down endorsement to St Louis, Missouri real estate. 
 

	
            11.
 	
            Dated down endorsement to Thomaston, Connecticut real estate. 
 

	
            12.
 	
            Gap Indemnity to Chicago Title re: St Louis, Missouri real estate
 

	
            13.
 	
            Gap Indemnity to Chicago Title re: Thomaston, Connecticut real estate
 

	
            14.
 	
            Legal Opinion of Borrower’s outside counsel McDermott Will & Emery as to such matters as may be required by the Administrative Agent. 
 

	
            15.
 	
            Legal Opinion of Borrower’s outside counsel Husch & Eppenberger LLC as to such matters as may be required by the Administrative Agent.
 

	
            16.
 	
            Copies of Audited consolidated financial statements for the Company and its subsidiaries for the fiscal years ending February 1, 2003, February 7, 2004 and February 5, 2005.
 

	
            17.
 	
            (i) Copies of unaudited interim consolidated financial statements for the Company and its subsidiaries for each fiscal month and quarterly period ended after February 5, 2005, (ii) copies of internal management reports with financial statements for the eleven month sales periods ending January 8, 2005 and January 7, 2006, respectively, and (iii) copies of such other financial 
 

 

12

 

 

information as may be reasonably requested by Administrative Agent, including average invoice per sitting and number of sittings.

	
            18.
 	
            Copies of projections (projected income statements, balance sheets and cash flow statements prepared by the Company) for such periods as may be reasonably requested by the Administrative Agent after giving effect to the transactions contemplated by this Agreement and the use of proceeds therefrom.
 

	
            19.
 	
            The Administrative Agent shall be satisfied that, since February 5, 2005, there has been no material adverse change in the business, assets, liabilities, properties, condition (financial or otherwise), results of operations or prospects of the Loan Parties as well as their customers.  
 

	
            20.
 	
            The Administrative Agent shall have received such other documents, agreements, certificates and opinions to be executed or delivered, or relating to the transactions contemplated, on or prior to the closing date as the Administrative Agent or the Lenders may request.
 

	
            21.
 	
            Secretary’s Certificate certifying the Borrower’s Resolutions authorizing the execution, delivery and performance of First Amendment to Amended and Restated Credit Agreement and the Notes.  
 

	
            22.
 	
            Secretary’s Certificate certifying Consumer Programs Incorporated’s Resolutions authorizing the execution, delivery and performance of Unconditional Reaffirmation of Guaranty.  
 

	
            23.
 	
            Secretary’s Certificate certifying CPI Canadian Holdings, Inc.’s Resolutions authorizing the execution, delivery and performance of Unconditional Reaffirmation of Guaranty.  
 

	
            24.
 	
            Secretary’s Certificate certifying CPI Images, L.L.C.’s Resolutions authorizing the execution, delivery and performance of Unconditional Reaffirmation of Guaranty.  
 

	
            25.
 	
            Secretary’s Certificate certifying CPI International Holdings, Inc.’s Resolutions authorizing the execution, delivery and performance of Unconditional Reaffirmation of Guaranty.
 

 

 

13

 

 

 

Exhibit B

 

Disclosure Schedule  

 

The Disclosure Schedule is revised as follows:

 

 

 

14

 

 

 

 

ANNEX A

 

LENDERS AND PRO RATA SHARES

 

 

	
            1.1.1.1.1. 

Lender
 	
            Term  Commitment Amount
 	
            Revolving Commitment Amount
 	
            Pro Rate Share/
 
	
            LaSalle Bank National Association
 	
            $17,500,000
 	
            $17,500,000**/
 	
            70.000000000%
 
	
            Fifth Third Bank.
 	
            $7,500,000
 	
            $7,500,000
 	
            30.000000000%
 
	
            TOTALS
 	
            $25,000,000
 	
            $25,000,000
 	
            100.000000000%
 

 

 

**/          Revolving Commitment Amount reduces as set forth in the Credit Agreement.  Includes Swing Line Commitment Amount of $5,000,000

 

 

15

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