Document:

Exhibit 10.5

GUARANTY

(Exceptions to
Nonrecourse Liability)

THIS
GUARANTY (“Guaranty”) is
made as of the 17th day of August, 2006 in favor of BARCLAYS CAPITAL REAL
ESTATE INC., a Delaware corporation (together with its successors and assigns, “Lender”) by BEHRINGER HARVARD
OPPORTUNITY REIT I, INC., a Maryland corporation (“Guarantor”).

BACKGROUND

A.            BEHRINGER HARVARD FERNCROFT, LLC, a
Delaware limited liability company (“Borrower”)
and Lender are entering into a certain Loan Agreement of even date herewith (“Loan Agreement”) pursuant to which
Lender will make a loan (“Loan”)
to Borrower in the maximum principal amount of $18,000,000.00.  The Loan also will be evidenced by Borrower’s
promissory note to Lender of even date herewith (“Note”) and secured by, among other things, a mortgage,
deed of trust, deed to secure debt or similar security instrument made by
Borrower to Lender also of even date herewith (“Security Instrument”) which grants to Lender, among other
things, a first lien on the property described therein.

B.            Guarantor owns a direct or indirect
interest in Borrower and will derive substantial benefit from Lender’s making
of the Loan to Borrower.

C.            Lender requires as a condition to
making the Loan that Guarantor agrees to guaranty for the benefit of Lender,
and its successors and assigns, all obligations and liabilities of Borrower
with respect to the Loan for which Borrower is personally liable.

NOW,
THEREFORE, to induce Lender to make the Loan to Borrower, and in consideration
of the substantial benefit Guarantor will derive from the Loan, and other good
and valuable consideration, the receipt and sufficiency of which is
acknowledged, and intending to be legally bound hereby, Guarantor hereby agrees
as follows:

ARTICLE
1

DEFINED TERMS

Section
1.01           Defined Terms.  Capitalized terms used in this Guaranty and
not specifically defined in this Guaranty have the meaning provided in the Loan
Agreement.

ARTICLE 2

OBLIGATION GUARANTEED

Section 2.01           Guaranty
of Loan Obligations.  Guarantor,
irrevocably and unconditionally, guarantees to Lender:  (a) the prompt payment when due, whether at
stated maturity, by acceleration or otherwise, of all obligations and
liabilities of Borrower pursuant to the terms and provisions of Article 12
of the Loan Agreement;  (b) the prompt
payment when due of the Prohibited Prepayment Fee in connection with the
application of the Earnout Reserve Deposit in accordance with Section 4.08(c)
of the Loan Agreement ; and (c) the prompt payment

 

when due of the additional deposits to the Vacant Space
Reserve Account (as defined in Section 4.09 of the Loan Agreement) (collectively,
the “Guaranteed Obligations”).

Section
2.02           Continuing Obligation.  This Guaranty is a continuing guaranty and in
full force and effect and will be discharged only if and when the Loan has been
paid in full, and all obligations under the Loan Agreement and other Loan
Documents have been fully performed; provided, however, that
notwithstanding any of the foregoing to the contrary, this Guaranty shall
remain in full force and effect for so long as any payment hereunder may be
voided in bankruptcy proceedings as a preference or for any other reason.

Section
2.03           Direct Action Against
Guarantor.  Guarantor’s liability
under this Guaranty is a guaranty of payment and performance and not of
collection.  Lender has the right to
require Guarantor to pay, comply with and satisfy its obligations and
liabilities under this Guaranty, and, subject to the provisions of Article 12
of the Loan Agreement, shall have the right to proceed immediately against
Guarantor with respect thereto, without being required to attempt recovery
first from Borrower or any other party, without first suing on the Note or any
other Loan Document and without demonstrating that the collateral for the Loan
is inadequate security or that Lender has exercised (to any degree) or
exhausted any of Lender’s other rights and remedies with respect to Borrower or
any collateral for the Loan.

ARTICLE
3

GENERAL TERMS AND CONDITIONS

Section
3.01           Payments; Interest on
Amounts Payable Hereunder.  Amounts
payable to Lender under this Guaranty shall be immediately due and payable on
Lender’s written demand and shall be paid without reduction by set-off,
defense, counterclaim or cross-claim. 
Interest at the lower of the Default Rate (or the maximum interest rate
permitted by applicable law) also shall accrue on any judgment obtained by
Lender in connection with the enforcement or collection of amounts due under
this Guaranty until such judgment is paid in full.  Lender may apply all money received by Lender
to payment or reduction of the Loan or reimbursement of Lender’s expenses, in
such priority and proportions, and at such time or times as Lender may elect.

Section
3.02           Cumulative Remedies.  Guarantor acknowledges, that following the
occurrence and during the continuation of an Event of Default, with respect to
the Loan, Lender shall be entitled to accelerate the Loan and exercise all
other rights and remedies as have been provided to Lender hereunder, under the
other Loan Documents, by law or in equity including without limitation
enforcement of this Guaranty.  All rights
and remedies are cumulative and may be exercised independently, concurrently or
successively in Lender’s sole discretion and as often as occasion therefor
shall arise.  Lender’s delay or failure
to accelerate the Loan or exercise any other remedy upon the occurrence of an
Event of Default with respect to the Loan shall not be deemed a waiver of such
right as remedy.  No partial exercise by
Lender of any right or remedy will preclude further exercise thereof.  Notice or demand given to Borrower in any
instance will not entitle Borrower to notice or demand in similar or other
circumstances nor constitute Lender’s waiver of its right to take any future
action in any circumstance without notice or demand (except where expressly
required by this Guaranty to be given). 
Lender may

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release other security for the Loan, may release any
party liable for the Loan, may grant extensions, renewals or forbearances with respect
thereto, may accept a partial or past due payment or grant other indulgences,
or may apply any other security held by it to payment of the Loan, in each case
without prejudice to its rights under this Guaranty and without such action
being deemed an accord and satisfaction or a reinstatement of the Loan.  Lender will not be deemed as a consequence of
its delay or failure to act, or any forbearances granted, to have waived or be
estopped from exercising any of its rights or remedies.

Section
3.03           Enforcement Costs.  Guarantor hereby agrees to pay, on written
demand by Lender, all costs incurred by Lender in collecting any amount payable
under this Guaranty or enforcing or protecting its rights under the Guaranty in
each case whether or not legal proceedings are commenced.  Such fees and expenses include, without
limitation, reasonable fees for attorneys, paralegals and other hired
professionals, a reasonable assessment of the cost of services performed by
Lender’s default management staff, court fees, costs incurred in connection
with pre-trial, trial and appellate level proceedings (including discovery and
expert witnesses), costs incurred in post-judgment collection efforts or in any
bankruptcy proceeding.  Amounts incurred
by Lender shall be immediately due and payable, and shall bear interest at the
Default Rate from the date of disbursement until paid in full, if not paid in
full within ten (10) business days after Lender’s written demand for payment.

Section
3.04           Unimpaired Liability.  Guarantor acknowledges and agrees that all
obligations hereunder are and shall be absolute and unconditional under any and
all circumstances without regard to the validity, regularity or enforceability
of any or all of the Loan Documents or the existence of any other circumstance
which might otherwise constitute a legal or equitable discharge or defense of a
guarantor or surety.  Without limiting
the foregoing, each Guarantor acknowledges and agrees that its respective
liability hereunder shall in no way be released, terminated, discharged,
limited or impaired by reason of any of the following (whether or not Guarantor
has any knowledge or notice thereof): 
(a) Borrower’s lack of authority or lawful right to enter into any
of the Loan Documents; (b) any modification, supplement, extension,
consolidation, restatement, waiver or consent provided by Lender with respect
to any of the Loan Documents including, without limitation, approval of a
Transfer (subject to the provisions of the Loan Agreement) or the grant of
extensions of time for payment or performance; (c) failure to record any
Loan Document or to perfect any security interest intended to be provided
thereby or otherwise to protect, secure or insure any collateral for the Loan;
(d) Lender’s failure to exercise, or delay in exercising, any rights or
remedies Lender may have under the Loan Documents or under this Guaranty;
(e) the release or substitution, in whole or in part, of any collateral
for the Loan or acceptance of additional collateral for the Loan; (f) the
release of any Guarantor from performance, in whole or in part, under this
Guaranty or the release of Borrower from performance, in whole or in part,
under any of the Loan Documents, in each case whether by operation of law,
Lender’s voluntary act, or otherwise; (g) any bankruptcy, insolvency,
reorganization, adjustment, dissolution, liquidation or other like proceeding
involving or affecting Borrower, SPE Equity Owner, any other Guarantor or
Lender; (h) the termination or discharge of the Security Instrument or the
exercise of any power of sale or any foreclosure (judicial or otherwise) or
delivery or acceptance of a deed-in-lieu of foreclosure; (i) the existence
of any claim, setoff, counterclaim, defense or other rights which Guarantor may
have against Borrower, SPE Equity Owner, any other Guarantor or Lender, whether
in

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connection with the Loan or any other transaction; or
(j) the accuracy or inaccuracy of the representations and warranties made
by Borrower in any of the Loan Documents.

Section
3.05           Waivers.  Guarantor hereby waives and relinquishes, to
the fullest extent permitted by law: 
(a) all rights or claims of right to cause a marshalling of assets
or to cause Lender to proceed against any of the collateral for the Loan before
proceeding under this Guaranty against it or, subject to the provisions of
Article 12 of the Loan Agreement, any other Guarantor; (b) all rights and
remedies accorded by applicable law to sureties or guarantors, except any
rights of subrogation and contribution (the exercise of which are subject to
the terms of this Guaranty); (c) the right to assert a counterclaim, other
than a mandatory or compulsory counterclaim, in any action or proceeding
brought by or against it; (d) notice of acceptance of this Guaranty and of
any action taken or omitted in reliance hereon; (e) presentment for
payment, demand, protest, notice of nonpayment or failure to perform or
observe, or any other proof, notice or demand to which it might otherwise be
entitled with respect to its obligations hereunder; and (f) all homestead
or exemption rights against the obligations hereunder and the benefits of any
statutes of limitation or repose.

Section
3.06           Guarantor Bound by
Judgment Against Borrower.  Guarantor
agrees that it shall be bound conclusively, in any jurisdiction, by the
judgment in any action by Lender against Borrower in connection with the Loan
Documents (wherever instituted) as if such Guarantor were a party to such
action even if not so joined as a party.

Section
3.07           Certain Consequences of
Borrower’s Bankruptcy.  (a) If
Borrower shall be subject to the protection of the Bankruptcy Code or any
insolvency law the effect of which is to prevent or delay Lender from taking
any remedial action against Borrower, including the exercise of any option Lender
has to accelerate and declare the Loan immediately due and payable, Lender may,
as against Guarantor, nevertheless declare the Loan due and payable and enforce
any or all of its rights and remedies against Guarantor as provided herein.

(b)           Any payment made on the Loan, whether
made by Borrower or Guarantor or any other Person, that is required to be
refunded or recovered from Lender as a preference or a fraudulent transfer or
is otherwise set-aside pursuant to the Bankruptcy Code or any insolvency or other
debtor relief law shall not be considered as a payment made on the Loan or
under this Guaranty.  Guarantor’s
liability under this Guaranty shall continue with respect to any such payment,
or be deemed reinstated, with the same effect as if such payment had not been
received by Lender, notwithstanding any notice of revocation of this Guaranty
prior to such avoidance or recovery or payment in full of the Loan, until such
time as all periods have expired within which Lender could be required to
return any amount paid at any time on account of the Guaranteed Obligations.

(c)           Until payment in full of the Loan
(including interest accruing on the Note after the commencement of a proceeding
by or against Borrower under the Bankruptcy Code, which interest the parties
agree remains a claim that is prior and superior to any claim of Guarantor
notwithstanding any contrary practice, custom or ruling in cases under the
Bankruptcy Code generally), Guarantor agrees not to accept any payment or
satisfaction of any kind of indebtedness of Borrower to Guarantor at any time
during the continuance of an Event of Default and hereby assigns such
indebtedness to Lender, including the right (but not the obligation) to

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file proof of claim and to vote in any other
bankruptcy or insolvency action, including the right to vote on any plan of
reorganization, liquidation or other proposal for debt adjustment under Federal
or state law.

Section
3.08           Subrogation,
Reimbursement and Contribution. 
Guarantor agrees that no payment by it under this Guaranty shall give
rise to (a) any rights of subrogation or reimbursement against Borrower or
the collateral for the Loan, or (b) any rights of contribution against any
other Guarantor, in each case unless and until Lender has received full payment
of the Loan.  If the deferral of such
rights shall be unenforceable for any reason, Guarantor agrees that
(a) its rights of subrogation and reimbursement shall be junior and
subordinate to Lender’s rights against Borrower and the collateral for the
Loan, and (b) its rights of contribution against any other Guarantor shall
be junior and subordinate to Lender’s rights against each other Guarantor.

Section
3.09           Subordination of
Borrower’s Obligations to Guarantor. 
Any indebtedness of Borrower to any Guarantor, now or hereafter
existing, together with any interest thereon, shall be and hereby is (to the
extent provided herein) deferred, postponed and subordinated to the prior
payment in full of the Loan.  Further,
Guarantor agrees that should such Guarantor receive any payment, satisfaction
or security for any indebtedness owed by Borrower to it during the continuance
of an Event of Default (it being the intent hereof that Guarantor shall not
take security for any such indebtedness), the same shall be delivered to Lender
in the form received (endorsed or assigned as may be appropriate) for
application on account of, or as security for, the Loan and until so delivered
to Lender, shall be held in trust for Lender as security for the Loan.

Section
3.10           Lender Transferees;
Secondary Market Activities. 
Guarantor acknowledges and agrees that Lender, without notice to
Guarantor or Guarantor’s prior consent, may assign all or any portion of its
rights hereunder in connection with any sale or assignment of the Loan or servicing
rights related to the Loan, each grant of participations in the Loan, a
transfer of the Loan as part of a Securitization in which Lender assigns its
rights to a securitization trustee, or a contract for the servicing of the
Loan, and that each such assignee, participant or servicer shall be entitled to
exercise all of Lender’s rights and remedies hereunder.  Each Guarantor further acknowledges that
Lender may provide to third parties with an existing or prospective interest in
the servicing, enforcement, ownership, purchase, participation or
Securitization of the Loan, including, without limitation, any Rating Agency
rating the securities issued in respect of a Securitization or participation of
the Loan, and any entity maintaining databases on the underwriting and
performance of commercial mortgage loans, any and all information which Lender
now has or may hereafter acquire relating to the Loan, the Property or with
respect to Borrower or any Guarantor, as Lender determines necessary or
desirable.  Each Guarantor irrevocably
waives all rights it may have under applicable law, if any, to prohibit such
disclosure, including, without limitation, any right of privacy.

Section
3.11           Financial Reports,
Inspection of Records.  Guarantor
agrees to furnish to Lender from time to time, by such dates as Lender may
reasonably require (but no more frequently than annually unless an Event of
Default under the Loan Agreement or any other Loan Document exists, in which
event Lender may require same from time to time), Guarantor’s Federal and State
income tax returns, a personal financial statement if Guarantor is an
individual and a balance sheet and statement of changes in Guarantor’s
financial position if Guarantor is not

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an individual, in each case certified by such Guarantor
as complete and accurate.  Such financial
statements shall be in reasonable detail and prepared in accordance with
consistently applied accounting methods reasonably acceptable to Lender.

ARTICLE 4

REPRESENTATIONS AND WARRANTIES

Section
4.01           Guarantor Due Diligence
and Benefit.  Guarantor represents
and warrants to Lender that (a) the Loan and this Guaranty are for
commercial purposes, (b) it has had adequate opportunity to review the
Loan Documents, (c) it is fully aware of obligations of Borrower
thereunder and of the financial condition, assets and prospects of Borrower,
and (d) it is executing and delivering this Guaranty based solely upon
Guarantor’s own independent investigation of the matters contemplated by the
foregoing clauses (a)-(c) and in no part upon any representation, warranty
or statement of Lender with respect thereto.

Section
4.02           General.  Guarantor individually, as to such Guarantor,
represents and warrants that:

(a)           Authority.  Guarantor has the full power and authority to
execute and deliver this Guaranty and to perform its obligations
hereunder.  If Guarantor is not an
individual:  (i) Guarantor is duly
organized, validly existing and in good standing under the laws of the state of
its formation, and (ii) the execution, delivery and performance of this
Guaranty by Guarantor has been duly and validly authorized and the person(s)
signing this Guaranty on Guarantor’s behalf has been validly authorized and
directed to sign this Guaranty.

(b)           Valid and Binding Obligation.  This Guaranty constitutes Guarantor’s legal,
valid and binding obligation, enforceable against it in accordance with its
terms, except to the extent enforceability may be limited under applicable
bankruptcy and insolvency laws and similar laws affecting creditors’ rights
generally and to general principles of equity.

(c)           No Conflict with Other Agreement.  Guarantor’s execution, delivery and
performance of this Guaranty will not (i) violate Guarantor’s
organizational documents if Guarantor is not an individual, (ii) result in
the breach of, or conflict with, or result in the acceleration of, any
obligation under any guaranty, indenture, credit facility or other instrument
to which Guarantor or any of its assets may be subject, or (iii) violate
any order, judgment or decree to which Guarantor or any of its assets is
subject.

(d)           No Pending Litigation.  No action, suit, proceeding or investigation
currently is pending or, to the best of Guarantor’s knowledge, threatened
against Guarantor which, either in any one instance or in the aggregate, may
have a material, adverse effect on Guarantor’s ability to perform its
obligations under this Guaranty.

(e)           Consideration.  Guarantor owns a direct or indirect interest
in Borrower and will derive substantial benefit from the Loan to Borrower.

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ARTICLE
5

MISCELLANEOUS

Section
5.01           Notices.  All notices and other communications under
this Guaranty are to be in writing and addressed in the case of Lender to the
address as set forth below and in the case of each Guarantor, as set forth
below such Guarantor’s signature hereto. Default or demand notices shall be
deemed to have been duly given upon the earlier of:  (a) actual receipt; (b) one (1)
business day after having been timely deposited for overnight delivery, fee
prepaid, with a reputable overnight courier service, having a reliable tracking
system; (c) one (1) business day after having been sent by telecopier
(with answer back acknowledged) provided an additional notice is given pursuant
to (b); or (d) three (3) business days after having been deposited in any
post office or mail depository regularly maintained by the U.S. Postal Service
and sent by certified mail, postage prepaid, return receipt requested, and in
the case of clause (b) and (d) irrespective of whether delivery is accepted.  A new address for notice may be established
by written notice to the other parties; provided, however, that no address
change will be effective until written notice thereof actually is received by
the party to whom such address change is sent. 
Lender’s notice address is as follows:

Barclays Capital Real
Estate Inc.

200 Park Avenue

New York, NY 10166

Attn: CMBS Servicing

Fax: (212) 412-1664

Section
5.02           Entire Agreement;
Modification.  This Guaranty is the
entire agreement between the parties hereto with respect to the subject matter
hereof, and supersedes and replaces all prior discussions, representations,
communications and agreements (oral or written).  This Guaranty shall not be modified,
supplemented, or terminated, nor any provision hereof waived, except by a
written instrument signed by the party against whom enforcement thereof is
sought, and then only to the extent expressly set forth in such writing.

Section
5.03           Binding Effect; Joint
and Several Obligations.  This
Guaranty is binding upon and inures to the benefit of Guarantors, Lender and
their respective heirs, executors, legal representatives, successors, and
assigns, whether by voluntary action of the parties or by operation of
law.  No Guarantor may delegate or
transfer its obligations under this Guaranty. 
If there is more than one Guarantor, each Guarantor shall be jointly and
severally liable hereunder.

Section
5.04           Unenforceable Provisions.  Any provision of this Guaranty which is
determined by a court of competent jurisdiction or government body to be
invalid, unenforceable or illegal shall be ineffective only to the extent of
such determination and shall not affect the validity, enforceability or
legality of any other provision, nor shall such determination apply in any
circumstance or to any party not controlled by such determination.

Section
5.05           Duplicate Originals;
Counterparts.  This Guaranty may be
executed in any number of duplicate originals, and each duplicate original
shall be deemed to be an original.  This
Guaranty (and each duplicate original) also may be executed in any number of
counterparts,

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each of which shall be deemed an original and all of
which together constitute a fully executed Guaranty even though all signatures
do not appear on the same document.

Section
5.06           Construction of Certain
Terms.  Defined terms used in this
Guaranty may be used interchangeably in singular or plural form, and pronouns
shall be construed to cover all genders. 
Article and section headings are for convenience only and shall not be used
in interpretation of this Guaranty.  The
words “herein,” “hereof” and “hereunder” and other words of similar import
refer to this Guaranty as a whole and not to any particular section, paragraph
or other subdivision; and the word “section” refers to the entire section and
not to any particular subsection, paragraph of other subdivision; and “Guaranty”
and each of the Loan Documents referred to herein mean the agreement as
originally executed and as hereafter modified, supplemented, extended,
consolidated, or restated from time to time.

Section
5.07           Governing Law.  This Guaranty shall be interpreted and
enforced according to the laws of the State where the Land is located (without
giving effect to its rules governing conflict of laws).

Section
5.08           Consent to Jurisdiction.  Each Guarantor irrevocably consents and
submits to the exclusive jurisdiction and venue of any state or federal court
sitting in the county and State where the Land is located with respect to any
legal action arising with respect to this Guaranty and waives all objections
which it may have to such jurisdiction and venue.

Section
5.09           WAIVER OF JURY TRIAL.  TO THE FULLEST EXTENT PERMITTED BY LAW,
GUARANTOR (AND LENDER, BY ITS FUNDING OF THE LOAN) WAIVES AND AGREES NOT TO
ELECT A TRIAL BY JURY WITH RESPECT TO ANY ISSUE ARISING OUT OF THIS
GUARANTY.  BORROWER HEREBY WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY
TRIAL ACTION OR PROCEEDING REFERRED TO IN THE PRECEDING SENTENCE, ANY SPECIAL,
EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR DAMAGES PURSUANT TO M.G.L.
C.93A ET SEQ. OTHER THAN ACTUAL DAMAGES.

[Remainder of page
is blank; signatures appear on next page.]

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IN WITNESS WHEREOF, this Guaranty has been executed by
the undersigned as an instrument under seal the day and year first above
written.

	
  BEHRINGER
  HARVARD OPPORTUNITY

  	
   

  
	
  REIT I, INC., a
  Maryland corporation

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Gerald J.
  Reihsen, III,

  	
   

  
	
   

  	
  Executive Vice
  President – Corporate

  	
   

  
	
   

  	
  Development and
  Legal

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Address for
  Notice:

  	
   

  
	
   

  	
   

  
	
  1501 Dallas
  Parkway, Suite 600

  	
   

  
	
  Addison, TX
  75001

  	
   

  
	
  Attn: Andy BruceExhibit
10.1

FIFTH AMENDMENT TO
LOAN AND SECURITY AGREEMENT

THIS FIFTH AMENDMENT TO LOAN AND SECURITY AGREEMENT
(this “Amendment”), dated as of May 18, 2006, is entered into between
WACHOVIA BANK, NATIONAL ASSOCIATION (formerly known as Congress Financial Corporation
(Southwest), “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, that certain letter
agreement dated August __, 2001 regarding Borrower’s name change, that certain
Third Amendment to Loan and Security Agreement dated January ___, 2003, and
that certain Fourth Amendment to Loan and Security Agreement and Consent dated
February 9, 2005 (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.            Borrower
has requested that Lender amend the Loan Agreement as more particularly set
forth herein, and Lender is willing to amend the Loan Agreement upon the terms
and conditions set forth below.

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)           The following definition is hereby
added to Section 1 in respective alphabetical order:

“‘Permitted Divestitures’ shall mean, with
respect to Hampshire Equity Partners, L.P., a divestiture of any or all of its
issued and outstanding voting stock of Borrower through (i) distribution(s) to
the limited partners of Hampshire Equity Partners, L.P., (ii) sale(s) into the
public market, (iii) private transaction(s), provided, that, such
private transaction(s) do not result in an acquirer obtaining a controlling
position in the Borrower, or (iv) any combination of (i), (ii) and (iii).”

 

(b)           Section 8.9(a) is hereby amended and
restated in its entirety to read as follows:

“(a)         All
issued and outstanding shares of capital stock of Borrower have been duly
authorized and are fully paid and non-assessable.”

(c)           Section 9.12 of the Loan Agreement is
hereby amended and restated in its entirety to read as follows:

“9.12       Transactions
with Affiliates.  Borrower shall not
enter into any transaction for the purchase, sale or exchange of property or
the rendering of any service to or by any affiliate, except in the ordinary
course of and pursuant to the reasonable requirements of Borrower’s business
and upon fair and reasonable terms no less favorable to the Borrower than
Borrower would obtain in a comparable arm’s length transaction with an
unaffiliated person.”

(d)           Section 10.1(l) of the Loan Agreement
is hereby amended and restated in its entirety to read as follows:

“(l)          Hampshire
Equity Partners, L.P. shall own or otherwise control less than 40% of all
issued and outstanding voting stock of Borrower; provided, however,
that an Event of Default will not occur if Hampshire Equity Partners, L.P. owns
or otherwise controls less than 40% of all issued and outstanding voting stock
of Borrower as a result of their participation in one or more Permitted
Divestitures.”

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.

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

(c)           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 

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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, as amended hereby, (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.  After giving effect to this Amendment, 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 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.

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(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 results from giving effect
hereto or otherwise 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, after giving effect to this Amendment,
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.

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.

[Remainder of Page
Left Intentionally Blank]

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

	
  

  	
   

  	
  CITI TRENDS, INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
  /s/ Thomas W. Stoltz

  
	
   

  	
   

  	
  Name:

  	
   

  	
  Thomas W. Stoltz

  
	
   

  	
   

  	
  Title:

  	
   

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  WACHOVIA BANK, NATIONAL ASSOCIATION

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
  /s/ Mark Galovic

  
	
   

  	
   

  	
  Name:

  	
   

  	
  Mark Galovic

  
	
   

  	
   

  	
  Title:

  	
   

  	
  Vice President

  

 

 5

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