CPI and lender agent ink third credit agreement default forbearance

By Caroline Salls

Pittsburgh, Feb. 8 - CPI Corp. has entered into a third forbearance agreement with credit agreement administrative agent Bank of America, NA, according to an 8-K filed Friday with the Securities and Exchange Commission.

The company said second forbearance agreement identified events of default, which have not been cured. The forbearance period under the second agreement has expired.

As a result of the defaults, the agent has the right to exercise its rights and remedies under the credit agreement, including the right to enforce its security interest in the company's collateral and to pursue collection from CPI and other guarantors.

Under the third forbearance, the agent agreed not to exercise its default-related rights through Feb. 15. In addition, the lenders will have no further commitment to make revolving loans.

The third forbearance agreement also amended the credit agreement termination date to the earlier of Feb. 15 or the termination of the third agreement.

CPI said it owed $97.4 million under the loan agreement as of Feb. 2, not including attorneys' fees and other fees, expenses, advances and costs of collection, which are all due and not waived.

The $97.4 million includes $76.2 million in unpaid principal, $21,000 in unpaid interest, $7.3 million in unpaid PIK obligations, $67,000 in letter-of-credit fees and $13.8 million in letters of credit.

CPI is a St. Louis-based portrait studio operator.

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