ITEM 5 (C)
[Letterhead]
the Principal Financial Group
Principal Mutual Life Insurance Company
Mailing Address: Des Moines, Iowa 50392-0001 (000)000-0000
CONSENT LETTER
Air Express / Telecopy
October 1, 1996
Xx. Xxx Xxxxxx
CPI Corporation
0000 Xxxxxxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
Reference is made to the Note Agreement, dated as of August
31, 1993 as amended by letter agreements dated as of February 24,
1994, June 14, 1994, and September 18, 1995 (as amended the "Note
Agreement"), by and between CPI Corp. (the "Company") and each of
the purchasers listed on the Purchaser Schedule attached thereto
(collectively, the "Purchasers"). Pursuant to the Note Agreement,
the Company issued, and Purchasers purchased, Series A Senior
Notes of the Company (collectively the "Series A Notes") in the
aggregate principal amount of $33,000,000.00 and Series B Senior
Notes of the Company (collectively, the "Series B Notes") in the
aggregate principal amount of $27,000,000.00, in each case due
August 31, 2000. The Series A Notes and the Series B Notes are
collectively referred to herein as the "Notes." Capitalized
terms used but not defined herein shall have the meanings
ascribed to them in the Note Agreement.
The Purchasers understand that the Company has entered into
a Subscription Agreement dated August 8, 1996 by and among
Xxxxxxx Kodak Company ("Kodak"), the Company, Consumer Programs
Holding, Inc., and Fox Photo ("Fox Photo") pursuant to which Fox
Photo has agreed to issue to Kodak 1,041 shares of common stock
of Fox Photo, representing 51% of the issued and outstanding
shares of common stock of Fox Photo, for a total purchase price
of $56,100,000.00 (subject to adjustment as set forth in Section
2.3 of the Subscription Agreement). In addition, the Purchasers
understand that Company will enter into a Stockholders' Agreement
in the form of Exhibit "G" to the Subscription Agreement (the
"Stockholders' Agreement") pursuant to which the Company will
have the obligation to sell its remaining shares of common stock
of Fox Photo to Kodak at Kodak's option, and may, under certain
circumstances, require Kodak to purchase the Company's remaining
shares of Fox Photo. As used herein, "Subscription Agreement"
means the Subscription Agreement filed as an Exhibit to the
Company's Current Report on Form 8-K dated August 8, 1996.
Pursuant to the Company's request, and notwithstanding the
provisions of Paragraph 6C(5) and Paragraph 6D of the Note
Agreement to the contrary, the Purchasers hereby consent (i) to
Fox Photo issuing to Kodak 1,041 shares of common stock of Fox
Photo representing 51% of the issued and outstanding shares of
common stock of Fox Photo for a total purchase price of
$56,100,000.00 (subject to adjustment as set forth in Section 2.3
of the Subscription Agreement) and (ii) to Kodak purchasing the
remaining shares of common stock of Fox Photo held by the Company
pursuant to the terms of the Subscription Agreement and the
Stockholders' Agreement.
The Purchasers acknowledge and agree that Xxxxx has relied
and will rely on the provisions of this Consent letter in
connection with its purchase of the common stock of Fox
Photo and the consummation of the transactions
contemplated by the Subscription Agreement and the Stockholders'
Agreement. The Purchasers further agree that so long as the
Company does not own directly or indirectly, 100% of the equity
of any of Fox Photo, Proex Photo Systems, Inc., Fox Photo
Partners, Inc. or Texas Photo Finish, L.P., such entity shall not
be considered a "Subsidiary" for purposes of the Note Agreement.
Except to the extent otherwise expressly set forth in this
consent letter, all of the terms, provisions and conditions
contained in the Note Agreement shall be and remain in full force
and effect and the same are hereby ratified and confirmed. This
consent letter is not and shall not be construed as a waiver of,
or a consent to any noncompliance with, any of the other terms,
provisions, conditions or covenants contained in the Note
Agreement or as a waiver of any Default or Event of Default, if
any, existing under the Note Agreement as of the date hereof.
This consent letter shall not be effective unless and until
it has been signed by each of the Purchasers and countersigned by
the Company.
This consent letter may be executed in any number of
counterparts (including telecopy counterparts), each of which
shall be deemed an original, but all of which together shall
constitute one and the same instrument.
Principal Mutual Life Insurance Company
By /s/ Xxx X. Xxxxxxxx
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Xxx X. Xxxxxxxx
Assistant Director-
Title: Securities Investment
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By /s/ Xxx X. Xxxxx
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Xxx X. Xxxxx
Title: Counsel
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The Prudential Insurance Company of America
By /s/ Xxxx X. Xxxxxxx
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Title Vice President (TPD)
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Acknowledged and agreed to this 1st day of October, 1996.
CPI Corporation
By /s/ Xxxx X. Xxxxxx
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Title Chairman
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