Document:

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                                                                    EXHIBIT 10.6

                 SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT

      THIS SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT (the "Amendment"),
dated as of November 30, 2000, is entered into between CONGRESS FINANCIAL
CORPORATION (SOUTHWEST), a Texas corporation ("Lender"), and ALLIED FASHION,
INC., a Delaware corporation ("Borrower").

                                     RECITAL

      A. Borrower and Lender have previously entered into that certain Loan and
Security Agreement dated April 2, 1999, as amended in the First Amendment to
Loan and Security Agreement dated June 22, 2000 (collectively the "Loan
Agreement"), pursuant to which Lender has made certain loans and financial
accommodations available to Borrower. Terms used herein without definition shall
have the meanings ascribed to them in the Loan Agreement.

      B. Lender and Borrower wish to further amend the Loan Agreement under the
terms and conditions set forth in this Amendment. Borrower is entering into this
Amendment with the understanding and agreement that, except as specifically
provided herein, none of Lender's rights or remedies as set forth in the Loan
Agreement is being waived or modified by the terms of this Amendment.

      NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
herein contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:

      1.    Amendments to Loan Agreement.

            (a) The following definitions are hereby added to Section 1 in
      respective alphabetical order:

            "Adjusted Eurodollar Rate shall mean, with respect to each Interest
            Period for any Eurodollar Rate Loan, the rate per annum (rounded
            upwards, if necessary, to the next one-sixteenth (1/16) of one (1%)
            percent) determined by dividing (a) the Eurodollar Rate for such
            Interest Period by (b) a percentage equal to: (i) one (1) minus (ii)
            the Reserve Percentage. For purposes hereof, "Reserve Percentage"
            shall mean the reserve percentage, expressed as a decimal,
            prescribed by any United States or foreign banking authority for
            determining the reserve requirement which is or would be applicable
            to deposits of United States dollars in a non-United States or an
            international banking office of Reference Bank used to fund a
            Eurodollar Rate Loan or any Eurodollar Rate Loan made with the
            proceeds of such deposit, whether or not the Reference Bank actually
            holds or has made any such deposits or loans. The Adjusted
            Eurodollar Rate shall be adjusted on and as of the effective day of
            any change in the Reserve Percentage."
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            "Eurodollar Rate Loans shall mean any Loans or portion thereof on
            which interest is payable based on the Adjusted Eurodollar Rate in
            accordance with the terms hereof."

            "Eurodollar Rate shall mean with respect to the Interest Period for
            a Eurodollar Rate Loan, the interest rate per annum equal to the
            arithmetic average of the rates of interest per annum (rounded
            upwards, if necessary, to the next one-sixteenth (1/16) of one (1%)
            percent) at which Reference Bank is offered deposits of United
            States dollars in the London interbank market (or other Eurodollar
            Rate market selected by Borrower and approved by Lender) on or about
            9:00 a.m. (New York time) two (2) Business Days prior to the
            commencement of such Interest Period in amounts substantially equal
            to the principal amount of the Eurodollar Rate Loans requested by
            and available to Borrower in accordance with this Agreement, with a
            maturity of comparable duration to the Interest Period selected by
            Borrower."

            "Interest Period shall mean for any Eurodollar Rate Loan, a period
            of approximately one (l), two (2), or three (3) months duration as
            Borrower may elect, the exact duration to be determined in
            accordance with the customary practice in the applicable Eurodollar
            Rate market; provided, that, Borrower may not elect an Interest
            Period which will end after the last day of the then-current term of
            this Agreement."

            "Interest Rate shall mean, as to Prime Rate Loans, a rate of one
            quarter of one percent (.25%) per annum in excess of the Prime Rate
            and, as to Eurodollar Rate Loans, a rate of two and three-quarters
            of one percent (2.75%) per annum in excess of the Adjusted
            Eurodollar Rate (based on the Eurodollar Rate applicable for the
            Interest Period selected by Borrower as in effect three (3) Business
            Days after the date of receipt by Lender of the request of Borrower
            for such Eurodollar Rate Loans in accordance with the terms hereof,
            whether such rate is higher or lower than any rate previously quoted
            to Borrower); provided, that, the Interest Rate shall mean the rate
            of two and one quarter of one percent (2.25%) per annum in excess of
            the Prime Rate as to Prime Rate Loans and the rate of four and
            three-quarters of one percent (4.75%) per annum in excess of the
            Adjusted Eurodollar Rate as to Eurodollar Rate Loans, at Lender's
            option, without notice, (a) for the period (i) from and after the
            date of termination or non-renewal hereof until Lender has received
            full and final payment of all obligations (notwithstanding entry of
            a judgment against Borrower) and (ii) from and after the date of the
            occurrence of an Event of Default for so long as such Event of
            Default is continuing as determined by Lender, and (b) on the
            Revolving Loans at any time outstanding in excess of the amounts
            available to Borrower under Section 2 (whether or not such

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            excess(es), arise or are made with or without Lender's knowledge or
            consent and whether made before or after an Event of Default)."

            "Prime Rate Loans shall mean any Loans or portion thereof on which
            interest is payable based on the Prime Rate in accordance with the
            terms thereof."

            "Reference Bank shall mean First Union National Bank, or such other
            bank as Lender may from time to time designate."

            (b) The definition of "Business Day" is hereby replaced in its
      entirety to read as follows:

            "Business Day shall mean any day other than a Saturday, Sunday, or
            other day on which commercial banks are authorized or required to
            close under the laws of the State of New York or the State of North
            Carolina, and a day on which the Reference Bank and Lender are open
            for the transaction of business, except that if a determination of a
            Business Day shall relate to any Eurodollar Rate Loans, the term
            Business Day shall also exclude any day on which banks are closed
            for dealings in dollar deposits in the London interbank market or
            other applicable Eurodollar Rate market."

            (c) Section 1.28 of the Loan Agreement is hereby amended in its
      entirety to read as follows:

            "Maximum Credit shall mean, with reference to the Revolving Loans
            and the Letter of Credit Accommodations, the amount of Fifteen
            Million Dollars ($15,000,000)."

            (d) Section 3.1 of the Loan Agreement is hereby replaced in its
      entirety to read as follows:

            "Interest.

                  a. Borrower shall pay to Lender interest on the outstanding
            principal amount of the non-contingent Obligations at the Interest
            Rate. All interest accruing hereunder on and after the date of any
            Event of Default or termination or non-renewal hereof shall be
            payable on demand.

                  b. Borrower may from time to time request that Prime Rate
            Loans be converted to Eurodollar Rate Loans or that any existing
            Eurodollar Rate Loans continue for an additional Interest Period.
            Such request from Borrower shall specify the amount of the Prime
            Rate Loans which will constitute Eurodollar Rate Loans (subject to
            the limits set forth below) and the Interest Period to be applicable
            to such Eurodollar Rate Loans. Subject to the terms and conditions
            contained herein, three (3) Business Days after receipt by Lender of
            such a request from Borrower, such Prime Rate Loans shall be
            converted to Eurodollar

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            Rate Loans or such Eurodollar Rate Loans shall continue, as the case
            may be, provided, that, (i) no Event of Default, or event which with
            notice or passage of time or both would constitute an Event of
            Default exists or has occurred and is continuing, (ii) no party
            hereto shall have sent any notice of termination or non-renewal of
            this Agreement, (iii) Borrower shall have complied with such
            customary procedures as are established by Lender and specified by
            Lender to Borrower from time to time for requests by Borrower for
            Eurodollar Rate Loans, (iv) no more than four (4) Interest Periods
            may be in effect at any one time, (v) the aggregate amount of the
            Eurodollar Rate Loans must be in an amount not less than $5,000,000
            or an integral multiple of $1,000,000 in excess thereof, (vi) the
            maximum amount of the Eurodollar Rate Loans at any time requested by
            Borrower shall not exceed the amount equal to eighty (80%) percent
            of the lowest principal amount of the Loans which it is anticipated
            will be outstanding during the applicable Interest Period, in each
            case as determined by Lender (but with no obligation of Lender to
            make such Loans) and (vii) Lender shall have determined that the
            Interest Period or Adjusted Eurodollar Rate is available to Lender
            through the Reference Bank and can be readily determined as of the
            date of the request for such Eurodollar Rate Loan by Borrower. Any
            request by Borrower to convert Prime Rate Loans to Eurodollar Rate
            Loans or to continue any existing Eurodollar Rate Loans shall be
            irrevocable. Notwithstanding anything to the contrary contained
            herein, Lender and Reference Bank shall not be required to purchase
            United States Dollar deposits in the London interbank market or
            other applicable Eurodollar Rate market to fund any Eurodollar Rate
            Loans, but the provisions hereof shall be deemed to apply as if
            Lender and Reference Bank had purchased such deposits to fund the
            Eurodollar Rate Loans.

                  c. Any Eurodollar Rate Loans shall automatically convert to
            Prime Rate Loans upon the last day of the applicable Interest
            Period, unless Lender has received and approved a request to
            continue such Eurodollar Rate Loan at least three (3) Business Days
            prior to such last day in accordance with the terms hereof. Any
            Eurodollar Rate Loans shall, at Lender's option, upon notice by
            Lender to Borrower, convert to Prime Rate Loans in the event that
            (i) an Event of Default or event which, with the notice or passage
            of time, or both, would constitute an Event of Default, shall exist,
            (ii) this Agreement shall terminate or not be renewed, or (iii) the
            aggregate principal amount of the Prime Rate Loans which have
            previously been converted to Eurodollar Rate Loans or existing
            Eurodollar Rate Loans continued, as the case may be, at the
            beginning of an Interest Period shall at any time during such
            Interest Period exceed either (A) the aggregate principal amount of
            the Loans then outstanding, or (B) the Revolving Loans then
            available to Borrower under Section 2 hereof. Borrower shall pay to
            Lender, upon demand by Lender (or Lender may, at its option, charge
            any loan account of Borrower) any amounts required to compensate
            Lender, the Reference Bank or any participant with Lender for any
            loss (including loss of anticipated profits), cost or expense
            incurred by such person, as a result of the conversion of Eurodollar
            Rate Loans to Prime Rate Loans pursuant to any of the foregoing.

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                  d. Interest shall be payable by Borrower to Lender monthly in
            arrears not later than the first day of each calendar month and
            shall be calculated on the basis of a three hundred sixty (360) day
            year and actual days elapsed. The interest rate on non-contingent
            Obligations (other than Eurodollar Rate Loans) shall increase or
            decrease by an amount equal to each increase or decrease in the
            Prime Rate effective on the first day of the month after any change
            in such Prime Rate is announced based on the Prime Rate in effect on
            the last day of the month in which any such change occurs. In no
            event shall charges constituting interest payable by Borrower to
            Lender exceed the maximum amount or the rate permitted under any
            applicable law or regulation, and if any such part or provision of
            this Agreement is in contravention of any such law or regulation,
            such part or provision shall be deemed amended to conform thereto.

                  e. In the event Borrower's Tangible Net Worth as defined in
            Section 1.2 falls below seventy-five percent (75%) of the requisite
            level as set forth in Section 9.15, the Interest Rate shall increase
            by one-quarter of one percent (.25%)."

            (e) Section 3.3 of the Loan Agreement is hereby amended to read in
      its entirety as follows:

            "Loan Servicing Fee. In addition to any fees or expenses payable by
            Borrower under Section 9.16 hereof, Borrower shall pay to Lender an
            annual loan servicing fee in an amount equal to Five Thousand
            Dollars ($5,000),in respect of Lender's services for each year (or
            part thereof) while this Agreement remains in effect and for so long
            thereafter as any of the Obligations are outstanding, which fee
            shall be fully earned as of the date hereof and on each annual
            anniversary hereafter, such annual loan servicing fee to be payable
            on a quarterly basis, in advance, with the first such quarterly
            payment payable on the next scheduled quarterly payment and on the
            first day of each quarter thereafter."

            (f) Section 3.5 is hereby included in the Loan Agreement to read as
      follows:

            "Changes in Laws and Increased Costs of Loans.

                  a. Notwithstanding anything to the contrary contained herein,
            all Eurodollar Rate Loans shall, upon notice by Lender to Borrower,
            convert to Prime Rate Loans in the event that (i) any change in
            applicable law or regulation (or the interpretation or
            administration thereof) shall either (A) make it unlawful for
            Lender, Reference Bank or any participant to make or maintain
            Eurodollar Rate Loans or to comply with the terms hereof in
            connection with the Eurodollar Rate Loans, or (B) shall result in
            the increase in the costs to Lender, Reference Bank or any
            participant of making or maintaining any Eurodollar Rate Loans by an
            amount deemed by Lender to be material, or (C) reduce the amounts
            received or receivable by Lender in respect thereof, by an amount
            deemed by Lender to be

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            material or (ii) the cost to Lender, Reference Bank or any
            participant of making or maintaining any Eurodollar Rate Loans shall
            otherwise increase by an amount deemed by Lender to be material.
            Borrower shall pay to Lender, upon demand by Lender (or Lender may,
            at its option, charge any loan account of Borrower) any amounts
            required to compensate Lender, the Reference Bank or any participant
            with Lender for any loss (including loss of anticipated profits),
            cost or expense incurred by such person as a result of the
            foregoing, including, without limitation, any such loss, cost or
            expense incurred by reason of the liquidation or reemployment of
            deposits or other funds acquired by such person to make or maintain
            the Eurodollar Rate Loans or any portion thereof. A certificate of
            Lender setting forth the basis for the determination of such amount
            necessary to compensate Lender as aforesaid shall be delivered to
            Borrower and shall be conclusive, absent manifest error.

                  b. If any payments or prepayments in respect of the Eurodollar
            Rate Loans are received by Lender other than on the last day of the
            applicable Interest Period (whether pursuant to acceleration, upon
            maturity or otherwise), including any payments pursuant to the
            application of collections under Section 6.3 or any other payments
            made with the proceeds of Collateral, Borrower shall pay to Lender
            upon demand by Lender (or Lender may, at its option, charge any loan
            account of Borrower) any amounts required to compensate Lender, the
            Reference Bank or any participant with Lender for any additional
            loss (including loss of anticipated profits), cost or expense
            incurred by such person as a result of such prepayment or payment,
            including, without limitation, any loss, cost or expense incurred by
            reason of the liquidation or reemployment of deposits or other funds
            acquired by such person to make or maintain such Eurodollar Rate
            Loans or any portion thereof."

            (g) Section 12 of the Loan Agreement is replaced in its entirety to
      read as follows:

            "Term.

            (a) This Agreement and the other Financing Agreements shall become
            effective as of the date set forth on the first page hereof and
            shall continue in full force and effect for a term ending on April
            2, 2003. Regardless of the timing of termination, this Agreement and
            all other Financing Agreements must be terminated simultaneously.
            Upon the effective date of termination of the Financing Agreements,
            Borrower shall pay to Lender, in full, all outstanding and unpaid
            Obligations and shall furnish cash collateral to Lender in such
            amounts as Lender determines are reasonably necessary to secure
            Lender from loss, cost, damage or expense, including reasonable
            attorneys' fees and legal expenses, in connection with any
            contingent Obligations, including issued and outstanding Letter of
            Credit Accommodations and checks or other payments provisionally

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            credited to the Obligations and/or as to which Lender has not yet
            received final and indefeasible payment. Such cash collateral shall
            be remitted by wire transfer in Federal funds to such bank account
            of Lender, as Lender may, in its discretion, designate in writing to
            Borrower for such purpose. Interest shall be due until and including
            the next Business Day, if the amounts so paid by Borrower to the
            bank account designated by Lender are received in such bank account
            later than 3:00 p.m., New York time.

            (b) No termination of this Agreement or the other Financing
            Agreements shall relieve or discharge Borrower of its respective
            duties, obligations and covenants under this Agreement or the other
            Financing Agreements until all Obligations have been fully and
            finally discharged and paid, and Lender's continuing security
            interest in the Collateral and the rights and remedies of Lender
            hereunder, under the other Financing Agreements and applicable law,
            shall remain in effect until all such Obligations have been fully
            and finally discharged and paid.

            (c) If for any reason this Agreement is terminated prior to the end
            of the then current term or any agreed upon renewal term of this
            Agreement, in view of the impracticality and extreme difficulty of
            ascertaining actual damages and by mutual agreement of the parties
            as to a reasonable calculation of Lender's lost profits as a result
            thereof, Borrower agrees to pay to Lender, upon the effective date
            of such termination, an early termination fee in the amount set
            forth below if such termination is effective in the period
            indicated:

<TABLE>
<CAPTION>
                       Amount                     Period
<S>                                             <C>
            (i)      1% of the Maximum Credit   from the date of this Agreement
                                                to April 2, 2002

            (ii)     .5% of the Maximum Credit  from April 3, 2002 to April 2,
                                                2003
</TABLE>

Such early termination fee shall be presumed to be the amount of damages
sustained by Lender as a result of such early termination and Borrower agrees
that it is reasonable under the circumstances currently existing. Lender shall
be entitled to such early termination fee upon the occurrence of any Event of
Default described in Sections 10.2(i) and 10.1(j) hereof, even if Lender does
not exercise its right to terminate this Agreement, but elects, at its option,
to provide financing to Borrower or permit the use of cash collateral under the
United States Bankruptcy Code; provided, however, if Lender waives such Event of
Default, does not exercise its rights to terminate this Agreement and continues
financing Borrower, such early termination fee shall not be due and payable by
Borrower at such time. The early termination fee provided for in this Section
12.1 shall be deemed included in the Obligations.

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                  Notwithstanding the foregoing, the early termination fee shall
            be waived (a) if the termination is due to the refinancing of the
            Obligations by First Union National Bank and if there is no Event of
            Default or event or circumstance which, with notice or passage of
            time or both, would become an Event of Default under this Agreement
            or (b) if Borrower chooses to exercise the right to terminate this
            Agreement and the other Financing Agreements upon any assignment by
            Lender of its rights or obligations under or related to this
            Agreement or the other Financing Agreements to a non-U.S. Lender,
            defined as any Lender that is not a "United States person," within
            the meaning of Section 7701(a)(30) of the Code.

      2. Amendment Fee. Borrower shall pay Lender an amendment fee in the amount
of Twenty Five Thousand Dollars ($25,000) for the processing and approval of
this Amendment, which fee will be fully earned on the date of this Amendment.

       3. Effectiveness of this Amendment. Lender must have received the
following items, in form and content acceptable to Lender, before this Amendment
is effective and before Lender is required to extend any credit to Borrower as
provided for by this Amendment.

            (a) Amendment. This Amendment fully executed in a sufficient number
      of counterparts for distribution to Lender and Borrower.

            (b) Representations and Warranties. The representations and
      warranties set forth herein and in the Loan Agreement must be true and
      correct.

            (c) Payment of Fee. Borrower shall pay the Amendment Fee required by
      Section 2.

            (d) Other Required Documentation. All other documents and legal
      matters in connection with the transaction contemplated by this Amendment
      shall have been delivered or executed or recorded and shall be in form and
      substance satisfactory to Lender.

      4. Representations and Warranties. The Borrower represents and warrants as
follows:

            (a) Authority. The Borrower has the requisite corporate power and
      authority to execute and deliver this Amendment, and to perform its
      obligations hereunder and under the Financing Agreements (as amended or
      modified hereby) to which it is a party. The execution, delivery and
      performance by the Borrower of this Amendment have been duly approved by
      all necessary corporate action, have received all necessary governmental
      approval, if any, and do not contravene any law or any contractual
      restrictions binding on Borrower. No other corporate proceedings are
      necessary to consummate such transactions.

            (b) Enforceability. This Amendment has been duly executed and
      delivered by the Borrower. This Amendment and each Financing Agreement (as
      amended or modified hereby) is the legal, valid and binding obligation of
      Borrower, enforceable against

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      Borrower in accordance with its terms, and is in full force and effect.

            (c) Representations and Warranties. The representations and
      warranties contained in each Financing Agreement (other than any such
      representations or warranties that, by their terms, are specifically made
      as of a date other than the date hereof) are correct on and as of the date
      hereof as though made on and as of the date hereof.

      5. Choice of Law. The validity of this Amendment, its construction,
interpretation and enforcement, the rights of the parties hereunder, shall be
determined under, governed by, and construed in accordance with the internal
laws of the State of New York governing contracts only to be performed in that
State.

       6 . Counterparts. This Amendment may be executed in any number of
counterparts and by different parties and separate counterparts, each of which
when so executed and delivered, shall be deemed an original, and all of which,
when taken together, shall constitute one and the same instrument. Delivery of
an executed counterpart of a signature page to this Amendment by telefacsimile
shall be effective as delivery of a manually executed counterpart of this
Amendment.

      7. Reference to and Effect on the Financing Agreements.

            (a) Upon and after the effectiveness of this Amendment, each
      reference in the Loan Agreement to "this Agreement", "hereunder", "hereof"
      or words of like import referring to the Loan Agreement, and each
      reference in the other Financing Agreements to "the Loan Agreement",
      "thereof" or words of like import referring to the Loan Agreement, shall
      mean and be a reference to the Loan Agreement as modified and amended
      hereby.

            (b) Except as specifically amended above, the Loan Agreement and all
      other Financing Agreements, are and shall continue to be in full force and
      effect and are hereby in all respects ratified and confirmed and shall
      constitute the legal, valid, binding and enforceable obligations of
      Borrower to Lender.

            (c) The execution, delivery and effectiveness of this Amendment
      shall not, except as expressly provided herein, operate as a waiver of any
      right, power or remedy of Lender under any of the Financing Agreements,
      nor constitute a waiver of any provision of any of the Financing
      Agreements.

            (d) To the extent that any terms and conditions in any of the
      Financing Agreements shall contradict or be in conflict with any terms or
      conditions of the Loan Agreement, after giving effect to this Amendment,
      such terms and conditions are hereby deemed modified or amended
      accordingly to reflect the terms and conditions of the Loan Agreement as
      modified or amended hereby.

      8. Ratification. Borrower hereby restates, ratifies and reaffirms each and
every term and condition set forth in the Loan Agreement, as amended hereby, and
the Financing Agreements effective as of the date hereof.

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<PAGE>
      9. Estoppel. To induce Lender to enter into this Amendment and to continue
to make advances to Borrower under the Loan Agreement, Borrower hereby
acknowledges and agrees that, after giving effect to this Amendment, as of the
date hereof, there exists no Event of Default and no right of offset, defense,
counterclaim or objection in favor of Borrower as against Lender with respect to
the Obligations.

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      IN WITNESS WHEREOF, the parties have entered into this Amendment as of the
date first above written.

                                     "BORROWER"

                                     ALLIED FASHION INC.,
                                     a Delaware corporation

                                     By:    /s/ G. BELLINO
                                            ------------------------------------
                                     Title: President
                                            ------------------------------------

                                     "LENDER"

                                     CONGRESS FINANCIAL CORPORATION
                                     (SOUTHWEST), a Texas corporation

                                     By:    /s/ JOE T. CURDY
                                            ------------------------------------
                                     Title: AVP
                                            ------------------------------------

                                       11<PAGE>

                                                                    EXHIBIT 10.7

                 THIRD AMENDMENT TO LOAN AND SECURITY AGREEMENT

      THIS THIRD AMENDMENT TO LOAN AND SECURITY AGREEMENT (this "Amendment"),
dated as of January______, 2003, is entered into between CONGRESS FINANCIAL
CORPORATION (SOUTHWEST), a Texas corporation ("Lender"), and CITI TRENDS, INC.,
a Delaware corporation ("Borrower").

                                    RECITALS

      A. Borrower and Lender have previously entered into that certain Loan and
Security Agreement dated April 2, 1999, as amended by that certain First
Amendment to Loan and Security Agreement dated June 22, 2000, that certain
Second Amendment to Loan and Security Agreement dated November 30, 2000 and that
certain letter agreement dated August 1, 2001 regarding Borrower's name change
(as amended, the "Loan Agreement"), pursuant to which Lender has made certain
loans and financial accommodations available to Borrower. Terms used herein
without definition shall have the meanings ascribed to them in the Loan
Agreement.

      B. Lender and Borrower now wish to further amend the Loan Agreement on the
terms and conditions set forth herein.

      C. Borrower is entering into this Amendment with the understanding and
agreement that, except as specifically provided herein, none of Lender's rights
or remedies as set forth in the Loan Agreement is being waived or modified by
the terms of this Amendment.

                                    AMENDMENT

      NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
herein contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:

      1.    Amendments to Loan Agreement.

            (a)   Section 1.28 of the Loan Agreement is hereby amended and
restated to read in its entirety as follows:

                  "1.28 "Maximum Credit" shall mean, with reference to the
                  Revolving Loans and the Letter of Credit Accommodations, the
                  amount of Fifteen Million Dollars ($15,000,000); provided,
                  however, from April 3, 2003 to and including April 2, 2004, it
                  shall mean the amount of Twenty Million Dollars ($20,000,000);
                  provided, further, on April 3, 2004 and thereafter, it shall
                  mean the amount of Twenty-Five Million Dollars ($25,000,000)."

            (b)   The definition of "Interest Rate" set forth in Section 1 of
the Loan Agreement is hereby amended and restated to read in its entirety as
follows:

                  " "Interest Rate shall mean:

<PAGE>

                  (a)as to Prime Rate Loans, a rate of:

                        (i) the Prime Rate to the extent either (A) Borrower has
                  maintained Excess Availability of $5,000,000 or greater at all
                  times during the immediately preceding month or (B) both (1)
                  Borrower has maintained Excess Availability of $3,000,000 or
                  greater at all times during the immediately preceding month
                  and (2) Borrower's then year to date EBITDA, as determined by
                  Lender based upon its review of the financial statements
                  provided to Lender by Borrower for the relevant period, when
                  measured as of the last day of such period, was $5,000,000 or
                  greater;

                        (ii) one-quarter of one percent (0.25%) per annum in
                  excess of the Prime Rate to the extent either (A) Borrower has
                  maintained Excess Availability of between $2,500,000 and
                  $4,999,999 at all times during the immediately preceding month
                  or (B) Borrower's then year to date EBITDA, as determined by
                  Lender based upon its review of the financial statements
                  provided to Lender by Borrower for the relevant period, when
                  measured as of the last day of such period, was between
                  $3,000,000 and $4,999,999; or

                        (iii) one-half of one percent (0.50%) per annum in
                  excess of the Prime Rate to the extent either (A) Borrower has
                  maintained Excess Availability of $2,499,999 or less at all
                  times during the immediately preceding month or (B) Borrower's
                  then year to date EBITDA, as determined by Lender based upon
                  its review of the financial statements provided to Lender by
                  Borrower for the relevant period, when measured as of the last
                  day of such period, was $2,999,999 or less; and

                  (b) as to Eurodollar Rate Loans, a rate of:

                        (i) two and one-quarter percent (2.25%) per annum in
                  excess of the Adjusted Eurodollar Rate (based on the
                  Eurodollar Rate applicable for the Interest Period selected by
                  Borrower as in effect three (3) Business Days after the date
                  of receipt by Lender of the request of Borrower for such
                  Eurodollar Rate Loans in accordance with the terms hereof,
                  whether such rate is higher or lower than any rate previously
                  quoted to Borrower) to the extent either (A) Borrower has
                  maintained Excess Availability of $5,000,000 or greater at all
                  times during the immediately preceding month or (B) both (1)
                  Borrower has maintained Excess Availability of $3,000,000 or
                  greater at all times during the immediately preceding month
                  and (2) Borrower's then year to date EBITDA, as determined by
                  Lender based upon its review of the financial statements
                  provided to Lender by Borrower for the relevant period, when
                  measured as of the last day of such period, was $5,000,000 or
                  greater;

                                        2
<PAGE>

                        (ii) two and one-half percent (2.50%) per annum in
                  excess of the Adjusted Eurodollar Rate (based on the
                  Eurodollar Rate applicable for the Interest Period selected by
                  Borrower as in effect three (3) Business Days after the date
                  of receipt by Lender of the request of Borrower for such
                  Eurodollar Rate Loans in accordance with the terms hereof,
                  whether such rate is higher or lower than any rate previously
                  quoted to Borrower) to the extent either (A) Borrower has
                  maintained Excess Availability of between $2,500,000 and
                  $4,999,999 at all times during the immediately preceding month
                  or (B) Borrower's then year to date EBITDA, as determined by
                  Lender based upon its review of the financial statements
                  provided to Lender by Borrower for the relevant period, when
                  measured as of the last day of such period, was between
                  $3,000,000 and $4,999,999; or

                        (iii) two and three-quarters percent (2.75%) per annum
                  in excess of the Adjusted Eurodollar Rate (based on the
                  Eurodollar Rate applicable for the Interest Period selected by
                  Borrower as in effect three (3) Business Days after the date
                  of receipt by Lender of the request of Borrower for such
                  Eurodollar Rate Loans in accordance with the terms hereof,
                  whether such rate is higher or lower than any rate previously
                  quoted to Borrower) to the extent either (A) Borrower has
                  maintained Excess Availability of $2,499,999 or less at all
                  times during the immediately preceding month (B) Borrower's
                  then year to date EBITDA, as determined by Lender based upon
                  its review of the financial statements provided to Lender by
                  Borrower for the relevant period, when measured as of the last
                  day of such period, was $2,999,999 or less;

                  provided, that, the Interest Rate shall mean a rate of two
                  percent in excess of the rate that would otherwise be applied
                  in accordance with the foregoing, at Lender's option, without
                  notice, (x) for the period (i) from and after the date of
                  termination or non-renewal hereof until Lender has received
                  full and final payment of all obligations (notwithstanding
                  entry of a judgment against Borrower) and (ii) from and after
                  the date of the occurrence of an Event of Default for so long
                  as such Event of Default is continuing as determined by
                  Lender, and (y) on the Revolving Loans at any time outstanding
                  in excess of the amounts available to Borrower under Section 2
                  (whether or not such excess(es), arise or are made with or
                  without Lender's knowledge or consent and whether made before
                  or after an Event of Default)."

      (c)   The following definitions are hereby added, in their proper
alphabetical order, to Section 1 of the Loan Agreement:

            " "Capital Lease" shall mean, as applied to any Person, any lease of
            (or any agreement conveying the right to use) any property (whether
            real,

                                        3
<PAGE>

                  personal or mixed) by such Person as lessee that, in
                  accordance with GAAP, is required to be reflected as a
                  liability on the balance sheet of such Person.

                  "Capital Stock" shall mean, with respect to any Person, any
                  and all shares, interests, participations or other equivalents
                  (however designated) of such Person's capital stock,
                  partnership interests or limited liability company interests
                  at any time outstanding, and any and all rights, warrants or
                  options exchangeable for or convertible into such capital
                  stock or other interests (but excluding any debt security that
                  is exchangeable for or convertible into such capital stock).

                  "EBITDA" shall mean, as to any Person, with respect to any
                  period, an amount equal to: (a) the Net Income of such Person
                  and its Subsidiaries for such period on a consolidated basis
                  determined in accordance with GAAP, plus (b) depreciation,
                  amortization and other non-cash charges (including, but not
                  limited to, imputed interest and deferred compensation) of
                  such Person for such period (to the extent deducted in the
                  computation of Net Income), all in accordance with GAAP, plus
                  (c) Interest Expense of such Person for such period (to the
                  extent deducted in the computation of Net Income), plus (d)
                  charges for Federal, State, local and foreign income taxes for
                  such period (to the extent deducted in the computation of Net
                  Income), plus (e) all extraordinary losses and unusual losses
                  related to the restructuring of the business of such Person
                  and costs associated with the refinancing transaction
                  contemplated by this Agreement, minus (f) all income (and plus
                  all charges, up to the amount of such income) attributable to
                  any Subsidiary of such Person.

                  "Interest Expense" shall mean, for any period, as to any
                  Person and its Subsidiaries, all of the following as
                  determined in accordance with GAAP, total interest expense,
                  whether paid or accrued (including the interest component of
                  Capital Leases for such period), including, without
                  limitation, all bank fees, commissions, discounts and other
                  fees and charges owed with respect to letters of credit,
                  banker's acceptances or similar instruments, but excluding (a)
                  amortization of discount and amortization of deferred
                  financing fees and closing costs paid in cash in connection
                  with the transactions contemplated hereby, (b) interest paid
                  in property other than cash and (c) any other interest expense
                  not payable in cash.

                  "Net Income" shall mean, with respect to any Person, for any
                  period, the aggregate of the net income (loss) of such Person
                  and its Subsidiaries, on a consolidated basis, for such period
                  (excluding to the extent included therein any extraordinary or
                  one-time gains or losses) after deducting all charges which
                  should be deducted before arriving at the net income (loss)
                  for such period and after deducting the Provision for Taxes
                  for such period, all as determined in accordance with GAAP,
                  provided, that, (a) the net income of any Person that is not a
                  wholly-owned Subsidiary or that is accounted for by the equity
                  method of accounting shall be included only to

                                        4
<PAGE>

                  the extent of the amount of dividends or distributions paid or
                  payable to such Person or a wholly-owned Subsidiary of such
                  Person; (b) the effect of any change in accounting principles
                  adopted by such Person or its Subsidiaries after the date
                  hereof shall be excluded; and (c) the net income (if positive)
                  of any wholly-owned Subsidiary to the extent that the
                  declaration or payment of dividends or similar distributions
                  by such wholly-owned Subsidiary to such Person or to any other
                  wholly-owned Subsidiary of such Person is not at the time
                  permitted by operation of the terms of its charter or any
                  agreement, instrument, judgment, decree, order, statute, rule
                  of government regulation applicable to such wholly-owned
                  Subsidiary shall be excluded. For the purpose of this
                  definition, net income excludes any gain or loss, together
                  with any related Provision for Taxes for such gain or loss
                  realized upon the sale or other disposition of any assets that
                  are not sold in the ordinary course of business (including,
                  without limitation, dispositions pursuant to sale and
                  leaseback transactions), or of any Capital Stock of such
                  Person or a Subsidiary of such Person and any net income
                  realized as a result of changes in accounting principles or
                  the application thereof to such Person.

                  "Provision for Taxes" shall mean, with respect to any Person,
                  for any period, an amount equal to all taxes imposed on or
                  measured by net income, whether Federal, State or local, and
                  whether foreign or domestic, that are paid or payable by such
                  Person and its Subsidiaries in respect of such period on a
                  consolidated basis in accordance with GAAP.

                  "Subsidiary" shall mean, with respect to any Person, any
                  corporation, limited or general partnership, limited liability
                  company, trust, association or other business entity of which
                  more than fifty percent (50%) of the voting stock or other
                  voting equity interests (in the case of a business entity
                  other than a corporation) is owned or controlled directly or
                  indirectly by such Person, or one or more Subsidiaries of such
                  Person, or a combination thereof."

            (d)   Section 2.1(a)(i) of the Loan Agreement is hereby amended and
restated to read in its entirety as follows:

                  "(i)  the lesser of:

                        (A)   sixty-five percent (65%) of the Value of the
                      Eligible Inventory; or

                        (B)   eighty-five percent (85%) of the Appraised
                      Inventory Value of Eligible Inventory; minus"

            (e)   The first sentence of Section 2.2(d) of the Loan Agreement is
hereby amended to read as follows:

                  "Except in Lender's discretion, the amount of all outstanding
                  Letter of Credit Accommodations and all other commitments and
                  obligations made

                                        5
<PAGE>

                  or incurred by Lender in connection therewith shall not at any
                  time exceed Two Million Dollars ($2,000,000)."

            (f)   Section 3.1(b)(v) of the Loan Agreement is hereby amended to
read as follows:

                  "(v) the aggregate amount of the Eurodollar Rate Loans must be
                  in an amount not less than $1,000,000 or an integral multiple
                  of $500,000 in excess thereof,"

            (g)   A new Section 3.6 is hereby added to Section 3 of the Loan
Agreement which reads as follows:

                  "3.6 Unused Line Fee. Beginning April 3, 2003, Borrower shall
                  pay to Lender monthly an unused line fee at a rate equal to
                  one-quarter of one percent (0.25%) per annum calculated upon
                  the amount by which Ten Million Dollars ($10,000,000) exceeds
                  the average daily principal balance of the outstanding
                  Revolving Loans and Letter of Credit Accommodations during the
                  immediately preceding month (or part thereof) while this
                  Agreement is in effect and for so long thereafter as any of
                  the Obligations are outstanding, which fee shall be payable on
                  the first day of each month (beginning May 1, 2003) in
                  arrears."

            (h)   Section 6.3(a)(ii) of the Loan Agreement is hereby amended and
restated to read in its entirety as follows:

                  "(ii) Borrower shall establish and maintain, at its expense,
                  pursuant to an agreement described in the following sentence,
                  a blocked account with such bank or banks as are acceptable to
                  Lender (each a "Blocked Account" and collectively the "Blocked
                  Accounts"). Each bank at which a Blocked Account is
                  established shall enter into an agreement, in form and
                  substance satisfactory to Lender, providing (unless otherwise
                  agreed to by Lender) that all items received or deposited in
                  such Blocked Account are the Collateral of Lender, that the
                  depository bank has no lien upon, or right to setoff against,
                  the Blocked Accounts, the items received for deposit therein,
                  or the funds from time to time on deposit therein, and that,
                  upon notice from Lender (a "Control Notice"), the depository
                  bank will wire, or otherwise transfer, in immediately
                  available funds, on a daily basis, all funds received or
                  deposited into such Blocked Account to such bank account of
                  Lender as Lender may from time to time designate for such
                  purpose (the "Payment Account"); provided, that, Lender may
                  only issue a Control Notice upon the occurrence of an Event of
                  Default or in the event that Excess Availability is $4,999,999
                  or less at any time; and provided, further, that Lender shall
                  rescind such Control Notice if Borrower maintains Excess
                  Availability of $5,000,000 or more at all times during the
                  ninety (90) day period immediately following the issuance of
                  such Control Notice. Borrower agrees that all amounts
                  deposited in the Blocked Account(s) or other funds received
                  and collected by Lender,

                                        6
<PAGE>

                  whether as proceeds of Inventory, the collection of Accounts
                  or other Collateral or otherwise shall be the Collateral of
                  Lender. Prior to the issuance of a Control Notice, Borrower
                  shall make all payments with respect to the Obligations to the
                  Payment Account, which payments shall automatically be made,
                  pursuant to the terms of this Section, after the issuance of a
                  Control Notice."

            (i)   A new Section 7.8 is hereby added to the Loan Agreement which
reads as follows:

                  "7.8 Interim Collateral Audits. Lender shall be entitled to
                  conduct interim audits of the Collateral a minimum of twice
                  over every twelve (12) month period, except, that, upon the
                  occurrence of an Event of Default or if Excess Availability is
                  $4,999,999 or less at any time, such audits shall be conducted
                  at any time as Lender may request."

            (j)   Section 9.16(g) of the Loan Agreement is hereby amended to
read as follows:

                  "(g) all out-of-pocket expenses and costs incurred by Lender's
                  examiners in the conduct of their periodic field examinations
                  of the Collateral and Borrower's operations, plus a per diem
                  charge at the rate of $750 per person per day for Lender's
                  examiners in the field and office; and"

            (k)   The first sentence of Section 12.1(a) of the Loan Agreement is
hereby amended to read as follows:

                  "This Agreement and the other Financing Agreements shall
                  become effective as of the date set forth on the first page
                  hereof and shall continue in full force and effect for a term
                  ending on April 2, 2005."

            (l)   Sections 12.1(c)(i) and (ii) of the Loan Agreement are hereby
amended to read as follows:

<TABLE>
<CAPTION>
           Amount                              Period
           ------                              ------
<S>                                 <C>
(i)  1% of the Maximum Credit       from the date of this Agreement
                                    to and including April 2, 2004

(ii) .5% of the Maximum Credit      from April 3, 2004 to and
                                    including April 1, 2005
</TABLE>

      2.    Effectiveness of this Amendment. Lender must have received the
following items, in form and content acceptable to Lender, before this Amendment
is effective, and before Lender is required to extend any credit to Borrower as
provided for by this Amendment.

            (a)   Amendment. This Amendment, fully executed in a sufficient
number of counterparts for distribution to all parties.

                                        7
<PAGE>

            (b)   Extension Fee. An extension fee in the amount of Fifty
Thousand Dollars ($50,000), which fee is fully earned as of and due and payable
on the date hereof.

            (c)   Representations and Warranties. The representations and
warranties set forth herein and in the Loan Agreement must be true and correct.

            (d)   Other Required Documentation. All other documents and legal
matters in connection with the transactions contemplated by this Amendment shall
have been delivered or executed or recorded and shall be in form and substance
satisfactory to Lender.

      3.    Representations and Warranties. Borrower represents and warrants as
follows:

            (a)   Authority. Borrower has the requisite corporate power and
authority to execute and deliver this Amendment, and to perform its obligations
hereunder and under the Financing Agreements (as amended or modified hereby) to
which it is a party. The execution, delivery and performance by Borrower of this
Amendment have been duly approved by all necessary corporate action and no other
corporate proceedings are necessary to consummate such transactions.

            (b)   Enforceability. This Amendment has been duly executed and
delivered by Borrower. This Amendment and each Financing Agreement (as amended
or modified hereby) is the legal, valid and binding obligation of Borrower,
enforceable against Borrower in accordance with its terms, and is in full force
and effect.

            (c)   Representations and Warranties. The representations and
warranties contained in each Financing Agreement (other than any such
representations or warranties that, by their terms, are specifically made as of
a date other than the date hereof) are correct on and as of the date hereof as
though made on and as of the date hereof.

            (d)   Due Execution. The execution, delivery and performance of this
Amendment are within the power of Borrower, have been duly authorized by all
necessary corporate action, have received all necessary governmental approval,
if any, and do not contravene any law or any contractual restrictions binding on
Borrower.

            (e)   No Default. No event has occurred and is continuing that
constitutes an Event of Default.

            (f)   No Duress. This Amendment has been entered into without force
or duress, of the free will of Borrower. Borrower's decision to enter into this
Amendment is a fully informed decision and Borrower is aware of all legal and
other ramifications of such decision.

            (g)   Counsel. Borrower has read and understands this Amendment, has
consulted with and been represented by legal counsel in connection herewith, and
has been advised by its counsel of its rights and obligations hereunder and
thereunder.

      4.    Choice of Law. The validity of this Amendment, its construction,
interpretation and enforcement, the rights of the parties hereunder, shall be
determined under, governed by, and

                                        8
<PAGE>

construed in accordance with the internal laws of the State of New York (without
giving effect to principals of conflicts of law).

      5.    Counterparts. This Amendment may be executed in any number of
counterparts and by different parties and separate counterparts, each of which
when so executed and delivered, shall be deemed an original, and all of which,
when taken together, shall constitute one and the same instrument. Delivery of
an executed counterpart of a signature page to this Amendment by telefacsimile
shall be effective as delivery of a manually executed counterpart of this
Amendment.

      6.    Reference to and Effect on the Financing Agreements.

            (a)   Upon and after the effectiveness of this Amendment, each
reference in the Loan Agreement to "this Agreement", "hereunder", "hereof or
words of like import referring to the Loan Agreement, and each reference in the
other Financing Agreements to "the Loan Agreement", "thereof or words of like
import referring to the Loan Agreement, shall mean and be a reference to the
Loan Agreement as modified and amended hereby.

            (b)   Except as specifically amended above, the Loan Agreement and
all other Financing Agreements, are and shall continue to be in full force and
effect and are hereby in all respects ratified and confirmed and shall
constitute the legal, valid, binding and enforceable obligations of Borrower to
Lender.

            (c)   The execution, delivery and effectiveness of this Amendment
shall not, except as expressly provided herein, operate as a waiver of any
right, power or remedy of Lender under any of the Financing Agreements, nor
constitute a waiver of any provision of any of the Financing Agreements.

            (d)   To the extent that any terms and conditions in any of the
Financing Agreements shall contradict or be in conflict with any terms or
conditions of the Loan Agreement, after giving effect to this Amendment, such
terms and conditions are hereby deemed modified or amended accordingly to
reflect the terms and conditions of the Loan Agreement as modified or amended
hereby.

      7.    Ratification. Borrower hereby restates, ratifies and reaffirms each
and every term and condition set forth in the Loan Agreement, as amended hereby,
and the Financing Agreements effective as of the date hereof.

      8.    Estoppel. To induce Lender to enter into this Amendment and to
continue to make advances to Borrower under the Loan Agreement, Borrower hereby
acknowledges and agrees that, as of the date hereof, there exists no Event of
Default and no right of offset, defense, counterclaim or objection in favor of
Borrower as against Lender with respect to the Obligations.

      9.    Integration. This Amendment, together with the other Financing
Agreements, incorporates all negotiations of the parties hereto with respect to
the subject matter hereof and is the final expression and agreement of the
parties hereto with respect to the subject matter hereof.

                                        9
<PAGE>

      10.   Severability. In case any provision in this Amendment shall be
invalid, illegal or unenforceable, such provision shall be severable from the
remainder of this Amendment and the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.

      IN WITNESS WHEREOF, the parties have entered into this Amendment as of the
date first above written.

                                         CITI TRENDS, INC.,
                                         a Delaware corporation

                                         By: /s/ TOM STOLTZ
                                             --------------------------
                                         Name: Tom Stoltz
                                         Title: CFO

                                         CONGRESS FINANCIAL CORPORATION
                                         (SOUTHWEST),
                                         a Texas corporation

                                         By: /s/ JOE T. CURDY
                                             --------------------------
                                         Name: Joe T. Curdy
                                         Title: AVP

                                       10

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