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CPY > SEC Filings for CPY > Form 8-K on 21-Apr-2009All Recent SEC Filings

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Form 8-K for CPI CORP


21-Apr-2009

Entry into a Material Definitive Agreement, Financial Statements and Exhibits


Item 1.01 Entry into a Material Definitive Agreement

Effective April 16, 2009, the Company entered into the third amendment (the "Amendment"), dated April 14,2009, to its Second Amended and Restated Credit Agreement (the "Credit Agreement") dated as of June 8, 2007, as amended on December 10, 2008, to change the interest rate structure and the amortization schedule and to replace preexisting minimum EBITDA and interest coverage covenants with a fixed charge ratio test. The leverage ratio test was also amended. The Amendment is attached hereto as Exhibit 10.47. The following summary is not complete but is qualified in its entirety to this exhibit.

Pursuant to the Amendment, the term loan bears interest at the Company's option, at either a period-based London Interbank Offered Rate ("LIBOR") plus a spread ranging from 3.25% to 4.00%, or the Base Rate plus a spread ranging from 1.75% to 2.50%. The Base Rate is determined from the greater of the prime rate, the Federal Funds rate plus 0.50% or the LIBOR Rate plus 1.00% (the "Base Rate"). Revolving loans are priced at the Base Rate. The Company is also required to pay a non-use fee of 0.50% per annum on the unused portion of the revolving loans and letter of credit fees of 3.25% to 4.00% per annum. The interest rate spread in the case of LIBOR and Base Rate loans and the payment of the non-use fees and the letter of credit fees is dependent on the Company's Ratio of Total Debt to EBITDA (as defined in the Credit Agreement). If the Company fails to deliver required financial statements and compliance certifications, all of the above interest rates reset to the maximums indicated until five days following the date such statements and certifications are submitted. The interest rates will not be reduced if an event of default exists.

In addition, under the Amendment, the mandatory payment schedule requires that unless sooner repaid in whole or part pursuant to the terms of the Credit Agreement, the outstanding principal balance of the term loan is to be repaid in installments of $1.0 million on each of March 31, June 30 and September 30 and $7.0 million on December 31 for all periods after the date of the Amendment, with a final payment being made on the maturity date thereof.

The Company incurred $263,000 in issuance costs associated with this Amendment, which will be amortized over the remainder of the life of the loan in addition to fees that are currently being amortized.



Item 9.01 Financial Statements and Exhibits

(d) Exhibits

Exhibit No.

10.47 Third Amendment to that certain Second Amended and Restated Credit Agreement, among the Company, the financial institutions that are or may from time to time become parties thereto and Bank of America, N.A., successor to LaSalle Bank National Association, as administrative agent and arranger for the lenders.

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