Agreement Regarding Termination and Closure of Licensed Departments between Toys “R” Us - Delaware, Inc. and CPI Corp.

This will acknowledge receipt of your letter dated as of March 16, 2012, relating to the termination of the license under the Amended and Restated License Agreement, dated as of December 23, 2005, as amended, by and between Toys “R” Us - Delaware, Inc. (“TRU”) and CPI Corp. (“CPI”) as of February 22, 2010 (collectively, the “Agreement”) and confirm our subsequent conversations regarding Terminated Departments.

Pursuant to Section 22(g), CPI hereby exercises its right to exclude from the Terminated Departments the 10 Departments identified on Exhibit A, attached hereto and incorporated herein. In addition, CPI will close the 22 Departments we opened in 2011 (identified on Exhibit B, attached hereto and incorporated herein), because we do not believe any of those 22 Departments will achieve the minimum $175,000 in sales by the end of the year. Unfortunately, we cannot justify continued operating costs and losses in those locations knowing that they will be subject to termination pursuant to Section 22(g) shortly after the end of the current year.

In consideration of TRU's waiver of the requirements of the first sentence of Section 23 of the Agreement with regard to fixtures, flooring and walls, CPI will pay TRU a fixed sum of $310,000 ($2,500 for each of the 124 Terminated Departments we will vacate as set forth above) on June 1, 2012. TRU will be responsible for removal of all fixtures, flooring and walls from the Terminated Departments.

As always, please call me if you have any questions or wish to discuss the matters addressed in this letter. Otherwise, please acknowledge your receipt and agreement to the terms set forth above by signing one copy of this letter and returning it to me with a copy to CPI's General Counsel.