Contract

Exhibit 1.1 ______________ Shares CITI TRENDS, INC. Common Stock UNDERWRITING AGREEMENT ———————- ________, 2005CIBC World Markets Corp.Wachovia Capital Markets, LLCSG Cowen & Co., LLCPiper Jaffray & Co. as Representatives of the several Underwriters named in Schedule I heretoc/o CIBC World Markets Corp.300 Madison AvenueNew York, New York 10017Ladies and Gentlemen: Citi Trends, Inc., a Delaware corporation (the “Company”) and thepersons listed on Schedule II hereto (each, a “Selling Stockholder,” andtogether, the “Selling Stockholders”), propose, subject to the terms andconditions contained herein, to sell to you and the other underwriters named onSchedule I to this Agreement (the “Underwriters”), for whom you are acting asRepresentatives (the “Representatives”), an aggregate of ________ shares (the”Firm Shares”) of the Company’s common stock, $0.01 par value per share (the”Common Stock”). Of the _____ Firm Shares, _____ are to be issued and sold bythe Company and _____ are to be sold by the Selling Stockholders. The respectiveamounts of the Firm Shares to be purchased by each of the several Underwritersare set forth opposite their names on Schedule I hereto. In addition, [theCompany proposes to grant to the Underwriters an option to purchase up to anadditional ___________ shares (the “Company Option Shares”) of Common Stock fromthe Company] [the Selling Stockholders propose to grant to the Underwriters anoption to purchase up to an additional _________ shares (the “SellingStockholder Option Shares,” and together with the Company Option Shares, the”Option Shares”) of Common Stock from the Selling Stockholders] for the purposeof covering over-allotments, if any, in connection with the sale of the FirmShares. The Firm Shares and the Option Shares are collectively called the”Shares.” [As part of the offering contemplated by this Agreement, theCompany, the Selling Stockholders and the Underwriters agree that up to ________shares (the “Directed Shares”) of the Shares to be purchased by the Underwritersshall be reserved for sale by theUnderwriters to certain of the Company’s directors, officers, employees andother parties associated with the Company (each, individually a “Participant”and collectively, the “Participants”), as part of the distribution of the Sharesby the Underwriters, under the terms of the friends and family directed salesprogram (the “Friends and Family Program”), and subject to the terms of thisAgreement, the applicable rules, regulations and interpretations of the NationalAssociation of Securities Dealers, Inc. and all other applicable laws, rules andregulations. Shares to be sold pursuant to the Friends and Family Program shallbe sold pursuant to this Agreement at the public offering price. To the extentthat any such Directed Shares are not orally confirmed for purchase by aParticipant by the end of the first business day after the date of thisAgreement, such Directed Shares may be offered to the public as part of thepublic offering contemplated hereby.] The Company has prepared and filed in conformity with therequirements of the Securities Act of 1933, as amended (the “Securities Act”),and the published rules and regulations thereunder (the “Rules”) adopted by theSecurities and Exchange Commission (the “Commission”) a Registration Statement(as hereinafter defined) on Form S-1 (No. 333-_____), including a preliminaryprospectus relating to the Shares, and such amendments thereof as may have beenrequired to the date of this Agreement. Copies of such Registration Statement(including all amendments thereof) and of the related Preliminary Prospectus (ashereinafter defined) have heretofore been delivered by the Company to you. Theterm “Preliminary Prospectus” means any preliminary prospectus included at anytime as a part of the Registration Statement or filed with the Commission by theCompany pursuant to Rule 424(a) of the Rules. The term “Registration Statement”as used in this Agreement means the initial registration statement (includingall exhibits, financial schedules), as amended at the time and on the date itbecomes effective (the “Effective Date”), including the information (if any)contained in the form of final prospectus filed with the Commission pursuant toRule 424(b) of the Rules and deemed to be part thereof at the time ofeffectiveness pursuant to Rule 430A of the Rules. If the Company has filed anabbreviated registration statement to register additional Shares pursuant toRule 462(b) under the Rules (the “462(b) Registration Statement”), then anyreference herein to the Registration Statement shall also be deemed to includesuch 462(b) Registration Statement. The term “Prospectus” as used in thisAgreement means the prospectus in the form included in the RegistrationStatement at the time of effectiveness or, if Rule 430A of the Rules is reliedon, the term Prospectus shall also include the final prospectus filed with theCommission pursuant to Rule 424(b) of the Rules. The term “Prospectus” shallalso include any related preliminary prospectus as first filed with theCommission (whether filed as part of the Registration Statement or any amendmentthereto or pursuant to Rule 424(a) of the Rules) and any amendment thereof orsupplement thereto. The Company and the Selling Stockholders understand that theUnderwriters propose to make a public offering of the Shares, as set forth inand pursuant to the Prospectus, as soon after the Effective Date and the date ofthis Agreement as the Representatives deem advisable. The Company and theSelling Stockholders hereby confirm that the Underwriters and dealers have beenauthorized to distribute or cause to be distributed each Preliminary Prospectusand are authorized to distribute the Prospectus (as from time to time amended orsupplemented if the Company furnishes amendments or supplements thereto to theUnderwriters). 2 1. Sale, Purchase, Delivery and Payment for the Shares. On thebasis of the representations, warranties and agreements contained in, andsubject to the terms and conditions of, this Agreement: (a) The Company agrees to issue and sell to each of the Underwriters, and each of the Underwriters agrees, severally and not jointly, to purchase from the Company, at a purchase price of $_____ per share (the “Initial Price”), the number of Firm Shares set forth opposite the name of such Underwriter under the column “Number of Firm Shares to be Purchased from the Company” on Schedule I to this Agreement, subject to adjustment in accordance with Section 9 hereof. The Selling Stockholders agree to sell to each of the Underwriters, and each of the Underwriters agrees, severally and not jointly, to purchase from the Selling Stockholders, at the Initial Price, the number of Firm Shares set forth opposite the name of such Underwriter under the column “Number of Firm Shares to be Purchased from the Selling Stockholders” on Schedule I to this Agreement, subject to adjustment in accordance with Section 9 hereof. (b) [The Company] [The Selling Stockholders] [The Company and the Selling Stockholders] hereby grants to the several Underwriters an option to purchase, severally and not jointly, all or any part of the Option Shares at the Initial Price. The number of Option Shares to be purchased by each Underwriter shall be the same percentage (adjusted by the Representatives to eliminate fractions) of the total number of Option Shares to be purchased by the Underwriters as such Underwriter is purchasing of the Firm Shares. Such option may be exercised only to cover over-allotments in the sales of the Firm Shares by the Underwriters and may be exercised in whole or in part at any time on or before 12:00 noon, New York City time, on the business day before the Firm Shares Closing Date (as defined below), and from time to time thereafter within 30 days after the date of this Agreement, in each case upon written, facsimile or telegraphic notice, or verbal or telephonic notice confirmed by written, facsimile or telegraphic notice, by the Representatives to the Company no later than 12:00 noon, New York City time, on the business day before the Firm Shares Closing Date or at least two business days before the Option Shares Closing Date (as defined below), as the case may be, setting forth the number of Option Shares to be purchased and the time and date (if other than the Firm Shares Closing Date) of such purchase. (c) Payment of the purchase price for, and delivery of certificates for, the Firm Shares shall be made at the offices of DLA Piper Rudnick Gray Cary US LLP, 6225 Smith Avenue, Baltimore, MD 21209, at 10:00 a.m., local time, on the third business day following the date of this Agreement or at such time on such other date, not later than ten (10) business days after the date of this Agreement, as shall be agreed upon by the Company and the Representatives (such time and date of delivery and payment are called the “Firm Shares Closing Date”). In addition, in the event that any or all of the Option Shares are purchased by the Underwriters, payment of the purchase price, and delivery of the certificates, for such Option Shares shall be made at the above-mentioned offices, or at such other place as shall be agreed upon by the Representatives and the Company, on each date of delivery as specified in the notice from the Representatives to the Company (such time and date of delivery and payment are called the “Option Shares Closing 3 Date”). The Firm Shares Closing Date and any Option Shares Closing Date are called, individually, a “Closing Date” and, together, the “Closing Dates.” (d) Payment shall be made to the Company and the Selling Stockholders by wire transfer of immediately available funds or by certified or official bank check or checks payable in New York Clearing House (same day) funds drawn to the order of the Company and to the Selling Stockholders for the shares purchased from the Selling Stockholders, against delivery of the respective certificates to the Representatives for the respective accounts of the Underwriters of certificates for the Shares to be purchased by them. (e) Certificates evidencing the Shares shall be registered in such names and shall be in such denominations as the Representatives shall request at least two full business days before the Firm Shares Closing Date or, in the case of Option Shares, on the day of notice of exercise of the option as described in Section 1(b) and shall be delivered by or on behalf of the Company to the Representatives through the facilities of the Depository Trust Company (“DTC”) for the account of such Underwriter. The Company will cause the certificates representing the Shares to be made available for checking and packaging, at such place as is designated by the Representatives, on the full business day before the Firm Shares Closing Date (or the Option Shares Closing Date in the case of the Option Shares). 2. Representations and Warranties of the Company. The Companyrepresents and warrants to each Underwriter as of the date hereof, as of theFirm Shares Closing Date and as of each Option Shares Closing Date (if any), asfollows: (a) On the Effective Date, the Registration Statement complied, and on the date of the Prospectus, the date any post-effective amendment to the Registration Statement becomes effective, the date any supplement or amendment to the Prospectus is filed with the Commission and each Closing Date, the Registration Statement and the Prospectus (and any amendment thereof or supplement thereto) will comply, in all material respects, with the requirements of the Securities Act and the Rules and the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the published rules and regulations of the Commission thereunder. The Registration Statement did not, as of the Effective Date, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein not misleading; and on the Effective Date and the other dates referred to above neither the Registration Statement nor the Prospectus, nor any amendment thereof or supplement thereto, will contain any untrue statement of a material fact or will omit to state any material fact required to be stated therein or necessary in order to make the statements therein not misleading. When any related preliminary prospectus was first filed with the Commission (whether filed as part of the Registration Statement or any amendment thereto or pursuant to Rule 424(a) of the Rules) and when any amendment thereof or supplement thereto was first filed with the Commission, such preliminary prospectus as amended or supplemented complied in all material respects with the applicable provisions of the Securities Act and the Rules and did not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein 4 or necessary in order to make the statements therein not misleading. If applicable, each Preliminary Prospectus and the Prospectus delivered to the Underwriters for use in connection with this offering was identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T. If Rule 434 is used, the Company will comply with the requirements of Rule 434 and the Prospectus shall not be “materially different,” as such term is used in Rule 434, from the Prospectus included in the Registration Statement at the time it became effective. Notwithstanding the foregoing, none of the representations and warranties in this Section 2(a) shall apply to statements in, or omissions from, the Registration Statement or the Prospectus made in reliance upon, and in conformity with, information furnished in writing by the Representatives on behalf of the several Underwriters for use in the Registration Statement or the Prospectus. With respect to the preceding sentence, the Company acknowledges that the only information furnished in writing by the Representatives on behalf of the several Underwriters for use in the Registration Statement or the Prospectus is the statements contained in the [third, fourth, fifth and sixth sentences of the fifth paragraph, the tenth paragraph and thirteenth and fourteenth paragraphs under the caption “Underwriting” in the Prospectus.][Verify once the prospectus is finalized]. (b) The Registration Statement is effective under the Securities Act and no stop order preventing or suspending the effectiveness of the Registration Statement or suspending or preventing the use of the Prospectus has been issued by the Commission and no proceedings for that purpose have been instituted or are threatened under the Securities Act. Any required filing of the Prospectus and any supplement thereto pursuant to Rule 424(b) of the Rules has been or will be made in the manner and within the time period required by such Rule 424(b). (c) The financial statements of the Company (including all notes and schedules thereto) included in the Registration Statement and Prospectus present fairly the financial position of the Company at the dates indicated and the statement of operations, stockholders’ equity and cash flows of the Company for the periods specified; and such financial statements and related schedules and notes thereto, and the unaudited financial information included as part of the Registration Statement, have been prepared in conformity with generally accepted accounting principles, consistently applied throughout the periods involved. The summary and selected financial data included in the Registration Statement and the Prospectus present fairly the information shown therein as at the respective dates and for the respective periods specified and have been presented on a basis consistent with the consolidated financial statements set forth in the Registration Statement and the Prospectus and other financial information. (d) (i) KPMG LLP, whose reports are filed with the Commission as a part of the Registration Statement, are and, during the periods covered by their reports, are an independent registered public accounting firm as required by the Securities Act and the Rules. (ii) The Company has not had any disagreements with its current or former independent auditors on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure and none of the events listed in Item 304(a)(1)(v)(A) through (D) of Regulation S-K promulgated under the Securities Act have occurred during the immediately preceding five fiscal years. 5 (e) The Company is duly organized, validly existing and in good standing under the laws of the State of Delaware. The Company has no subsidiary or subsidiaries and does not control, directly or indirectly, any corporation, partnership, joint venture, association or other business organization. The Company is duly qualified to do business and is in good standing as a foreign corporation in each jurisdiction in which the nature of the business conducted by it or location of the assets or properties owned, leased or licensed by it requires such qualification, except for such jurisdictions where the failure to so qualify individually or in the aggregate would not have a material adverse effect on the assets, properties, condition, financial or otherwise, or in the results of operations, business affairs or business prospects of the Company (a “Material Adverse Effect”); and to the Company’s knowledge, no proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing, or seeking to revoke, limit or curtail, such power and authority or qualification. The Company does not own, lease or license any asset or property or conduct any business outside the United States of America. (f) The Company has all requisite corporate power and authority, and all necessary authorizations, approvals, consents, orders, licenses, certificates and permits of and from all governmental or regulatory bodies or any other person or entity (collectively, the “Permits”), to own, lease and license its assets and properties and conduct its business, all of which are valid and in full force and effect, except where the lack of such Permits, individually or in the aggregate, could not have a Material Adverse Effect. The Company has fulfilled and performed in all material respects all of its obligations with respect to such Permits and no event has occurred that allows, or after notice or lapse of time would allow, revocation or termination thereof or results in any other material impairment of the rights of the Company thereunder. Except as may be required under the Securities Act and state and foreign blue sky laws, no other Permits are required to enter into, deliver and perform this Agreement and to issue and sell the Shares. (g) (i) To the best of the Company’s knowledge, the Company owns or possesses legally enforceable rights to use all patents, patent rights, inventions, trademarks, trademark applications, trade names, service marks, copyrights, copyright applications, licenses, know-how and other similar rights and proprietary knowledge (collectively, “Intangibles”) currently used in or necessary for the conduct of its business, and (ii) to the best of the Company’s knowledge, the Company has not knowingly infringed upon or misappropriated the intellectual property rights of any third-parties, and (iii) no claims in connection with any of the items in clause (ii) are pending or, to the Company’s knowledge, threatened, and to the Company’s knowledge there are no bases for such claims. To the best of Company’s knowledge, none of the Intangibles currently used in connection with its business is currently being infringed by a third-party and the Company has not made any claims that a third-party has violated or infringed any of the Company’s rights in such Intangibles. 6 (h) The Company has good and marketable title in fee simple to all real property, and good and marketable title to all other property owned by it, in each case free and clear of all liens, encumbrances, claims, security interests and defects, except such as do not materially affect the value of such property and do not materially interfere with the use made or proposed to be made of such property by the Company. All property held under lease by the Company is held by it under valid, existing and enforceable leases, free and clear of all liens, encumbrances, claims, security interests and defects, except such as are not material and do not materially interfere with the use made or proposed to be made of such property by the Company. Subsequent to the respective dates as of which information is given in the Registration Statement and the Prospectus, (i) there has not been any Material Adverse Effect; (ii) the Company has not sustained any loss or interference with its assets, businesses or properties (whether owned or leased) from fire, explosion, earthquake, flood or other calamity, whether or not covered by insurance, or from any labor dispute or any court or legislative or other governmental action, order or decree which could have a Material Adverse Effect; and (iii) since the date of the latest balance sheet included in the Registration Statement and the Prospectus, the Company has not (A) issued any securities or incurred any liability or obligation, direct or contingent, for borrowed money, except such liabilities or obligations incurred in the ordinary course of business, (B) entered into any transaction not in the ordinary course of business or (C) declared or paid any dividend or made any distribution on any shares of its stock or redeemed, purchased or otherwise acquired or agreed to redeem, purchase or otherwise acquire any shares of its capital stock. (i) There is no document, contract or other agreement required to be described in the Registration Statement or Prospectus or to be filed as an exhibit to the Registration Statement which is not described or filed, as applicable, as required by the Securities Act or Rules. Each description of a contract, document, agreement or instrument in the Registration Statement and the Prospectus accurately reflects in all respects the terms of the underlying contract, document, agreement or instrument. Each contract, document or other agreement described in the Registration Statement and Prospectus or listed in the Exhibits to the Registration Statement is in full force and effect and is valid and enforceable by and against the Company, as the case may be, in accordance with its terms. Neither the Company nor, to the Company’s knowledge, any other party is in default in the observance or performance of any term or obligation to be performed by it under any such contract, document, agreement or instrument, and no event has occurred which with notice or lapse of time or both would constitute such a default. No default exists, and no event has occurred which with notice or lapse of time or both would constitute a default, in the due performance and observance of any term, covenant or condition, by the Company of any other contract, document, agreement or instrument to which the Company is a party or by which Company or its properties or business may be bound or affected which default or event, individually or in the aggregate, could have a Material Adverse Effect. (j) The statistical and market related data included in the Registration Statement are based on or derived from sources that the Company believes to be reliable and accurate. 7 (k) The Company is not in violation of any term or provision of its certificate of incorporation or by-laws, each as amended through the date hereof and each Closing Date (respectively, the “Charter” and “Bylaws”), or of any franchise, license, permit, judgment, decree, order, statute, rule or regulation, where the consequences of such violation, individually or in the aggregate, could have a Material Adverse Effect. (l) Neither the execution, delivery and performance of this Agreement by the Company nor the consummation of any of the transactions contemplated hereby (including, without limitation, the issuance and sale by the Company of the Shares) will give rise to a right to terminate or accelerate the due date of any payment due under, or conflict with or result in the breach of any term or provision of, or constitute a default (or an event which with notice or lapse of time or both would constitute a default) under, or require any consent or waiver under, or result in the execution or imposition of any lien, charge or encumbrance upon any properties or assets of the Company pursuant to the terms of, any indenture, mortgage, deed of trust or other contract, document, agreement or instrument to which the Company is a party or by which the Company or any of its properties or businesses is bound, or any franchise, license, permit, judgment, decree, order, statute, rule or regulation applicable to the Company or violate any provision of the Charter or Bylaws, except for such consents or waivers which have already been obtained and are in full force and effect. (m) The Company has authorized and outstanding capital stock as set forth under the caption “Capitalization” in the Prospectus. The certificates evidencing the Shares are in due and proper legal form and have been duly authorized for issuance by the Company. All of the issued and outstanding shares of Common Stock have been duly and validly issued and are fully paid and nonassessable. There are no preemptive or other similar rights to subscribe for or to purchase or acquire any shares of Common Stock or any such rights pursuant to the Charter or Bylaws or any contract, document, agreement or instrument to or by which the Company is a party or bound. The Shares, when issued and sold pursuant to this Agreement, will be duly and validly issued, fully paid and nonassessable and none of them will be issued in violation of any preemptive or other similar right. Except as disclosed in the Registration Statement and the Prospectus, there is no outstanding option, warrant or other right calling for the issuance of, and there is no commitment, plan or arrangement to issue, any share of capital stock of the Company or any security convertible into, or exercisable or exchangeable for, such capital stock. The Common Stock and the Shares conform in all material respects to all statements in relation thereto contained in the Registration Statement and the Prospectus. (n) No holder of any security of the Company has any right, which has not been waived in writing, to have any security owned by such holder included in the Registration Statement or to demand registration of any security owned by such holder for a period of 180 days after the date of this Agreement. Each director and executive officer of the Company and each stockholder of the Company listed on Schedule III has delivered to the Representatives his enforceable written lock-up agreement in the form attached to this Agreement as Exhibit A hereto (“Lock-Up Agreement”). 8 (o) All necessary corporate action has been duly and validly taken by the Company and to authorize the execution, delivery and performance of this Agreement and the issuance and sale of the Shares by the Company. This Agreement has been duly and validly authorized, executed and delivered by the Company and constitute and will constitute legal, valid and binding obligations of the Company enforceable against the Company in accordance with their respective terms, except as the enforceability thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles. (p) There is not pending or, to the knowledge of the Company, threatened any action, suit, proceeding, inquiry or investigation, governmental or otherwise, to which the Company is a party, or to its which properties or assets are subject, before or brought by any court, arbitrator or governmental agency or body. (q) The Company is not involved in any labor dispute nor, to the knowledge of the Company, is any such dispute threatened, which dispute could have a Material Adverse Effect. The Company is not aware of any existing or imminent labor disturbance by the employees of any of its principal suppliers or contractors which could have a Material Adverse Effect. The Company is not aware of any threatened or pending litigation between the Company and any of its officers, directors, employees or stockholders which, if adversely determined, could have a Material Adverse Effect and has no reason to believe that such officers will not remain in the employment of the Company. (r) No transaction has occurred between or among the Company and any of its officers, directors, employees or shareholders or any affiliate or affiliates of any such officer or director or shareholder that is required to be described in and is not described in the Registration Statement and the Prospectus. (s) The Company has not taken, nor will it take, directly or indirectly, any action designed to or which might reasonably be expected to cause or result in, or which has constituted or which might reasonably be expected to constitute, the stabilization or manipulation of the price of the Common Stock or any security of the Company to facilitate the sale or resale of any of the Shares. (t) The Company has filed all federal, state, local and foreign tax returns which are required to be filed through the date hereof, which returns are true and correct in all material respects or has received timely extensions thereof, and has paid all taxes shown on such returns and all assessments received by it to the extent that the same are material and have become due. There are no tax audits or investigations pending, which if adversely determined could have a Material Adverse Effect; nor are there any material proposed additional tax assessments against the Company. (u) The Shares have been duly authorized for quotation on the National Association of Securities Dealers Automated Quotation National Market System (“Nasdaq”). The Company has taken all necessary actions to ensure that it will be in 9 compliance with all applicable corporate governance requirements set forth in the NASDAQ Marketplace Rules that are in effect with respect to it and is actively taking steps to ensure that it will be in compliance with other applicable corporate governance requirements set forth in the NASDAQ Marketplace Rules which will in the future become applicable to it. A registration statement has been filed on Form 8-A pursuant to Section 12 of the Exchange Act, which registration statement complies in all material respects with the Exchange Act. (v) The Company has taken no action designed to, or likely to have the effect of, terminating the registration of the Common Stock under the Exchange Act or the quotation of the Common Stock on the Nasdaq National Market, nor has the Company received any notification that the Commission or the Nasdaq National Market is contemplating terminating such registration or quotation. (w) The books, records and accounts of the Company accurately and fairly reflect, in reasonable detail, the transactions in, and dispositions of, the assets of, and the results of operations of, the Company. The Company maintains a system of internal accounting controls sufficient to provide reasonable assurances that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or specific authorization and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences; the chief executive officer and the chief financial officer of the Company have made all certifications required by the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) and any related rules and regulations promulgated by the Commission, and the statements contained in any such certification are complete and correct; the Company maintains “disclosure controls and procedures” (as defined in Rule 13a-14(c) under the Exchange Act); the Company is otherwise in compliance in all material respects with all applicable effective provisions of the Sarbanes-Oxley Act and is actively taking steps to ensure that it will be in compliance with other applicable provisions of the Sarbanes-Oxley Act upon the effectiveness of such provisions. (x) Based on the evaluation of its internal control over financial reporting, the Company is not aware of (i) any significant deficiency or material weakness in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information or (ii) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting. (y) There are no material off-balance sheet arrangements (as defined in Regulation S-K Item 303(a)(4)(ii) promulgated under the Securities Act) that may have a material current or future effect on the assets, properties, condition, financial or otherwise, or in the results of operations, business affairs or business prospects of the Company. (z) The Company is insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are customary in the businesses in which they are engaged or propose to engage after giving effect to the 10 transactions described in the Prospectus; all policies of insurance and fidelity or surety bonds insuring the Company or the Company’s businesses, assets, employees, officers and directors are in full force and effect; the Company is in compliance with the terms of such policies and instruments in all material respects; and the Company has no reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that is not materially greater than the current cost. The Company has not been denied any insurance coverage which it has sought or for which it has applied. (aa) Each approval, consent, order, authorization, designation, declaration or filing of, by or with any regulatory, administrative or other governmental body necessary in connection with the execution and delivery by the Company of this Agreement and the consummation of the transactions herein contemplated required to be obtained or performed by the Company (except such additional steps as may be required by the National Association of Securities Dealers, Inc. (the “NASD”) or may be necessary to qualify the Shares for public offering by the Underwriters under the state securities or blue sky laws) has been obtained or made and is in full force and effect. (bb) There are no affiliations with the NASD among the Company’s officers, directors or, to the knowledge of the Company, any stockholder of the Company, except as set forth in the Registration Statement. (cc) (i) The Company is in compliance in all material respects with all rules, laws and regulation relating to the use, treatment, storage and disposal of toxic substances and protection of health or the environment (“Environmental Laws”) which are applicable to its business; (ii) the Company has not received any notice from any governmental authority or third party of an asserted claim under Environmental Laws; (iii) the Company has received all permits, licenses or other approvals required of it under applicable Environmental Laws to conduct its business and is in compliance with all terms and conditions of any such permit, license or approval; (iv) to the Company’s knowledge, no facts currently exist that will require the Company to make future material capital expenditures to comply with Environmental Laws; and (v) no property which is or has been owned, leased or occupied by the Company has been designated as a Superfund site pursuant to the Comprehensive Environmental Response, Compensation of Liability Act of 1980, as amended (42 U.S.C. Section 9601, et. seq.) or otherwise designated as a contaminated site under applicable state or local law. The Company has not been named as a “potentially responsible party” under the CER, CLA 1980. (dd) In the ordinary course of its business, the Company periodically reviews the effect of Environmental Laws on the business, operations and properties of the Company, in the course of which the Company identifies and evaluates associated costs and liabilities (including, without limitation, any capital or operating expenditures required for clean-up, closure of properties or compliance with Environmental Laws, or 11 any permit, license or approval, any related constraints on operating activities and any potential liabilities to third parties). On the basis of such review, the Company has reasonably concluded that such associated costs and liabilities would not, singly or in the aggregate, have a Material Adverse Effect. (ee) The Company is not and, after giving effect to the offering and sale of the Shares and before or after the application of proceeds thereof as described in the Prospectus, will not be an “investment company” within the meaning of the Investment Company Act of 1940, as amended (the “Investment Company Act”). (ff) Neither the Company nor any other person associated with or acting on behalf of the Company including, without limitation, any director, officer, agent or employee of the Company, has, directly or indirectly, while acting on behalf of the Company (i) used any corporate funds for unlawful contributions, gifts, entertainment or other unlawful expenses relating to political activity; (ii) made any unlawful payment to foreign or domestic government officials or employees or to foreign or domestic political parties or campaigns from corporate funds; (iii) violated any provision of the Foreign Corrupt Practices Act of 1977, as amended; or (iv) made any other unlawful payment. (gg) The operations of the Company are and have been conducted at all times in compliance with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the money laundering statutes of all jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, the “Money Laundering Laws”) and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company with respect to the Money Laundering Laws is pending, or to the best knowledge of the Company, threatened. (hh) Neither the Company nor, to the knowledge of the Company, any director, officer, agent, employee or affiliate of the Company is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”); and the Company will not directly or indirectly use the proceeds of the offering, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity, for the purpose of financing the activities of any person currently subject to any U.S. sanctions administered by OFAC. (ii) [Neither the Company, the Selling Stockholders nor any other person associated with or acting on behalf of the Company or the Selling Stockholders, including, without limitation, any director, officer, agent or employee of the Company or the Selling Stockholders has offered or caused the Underwriters to offer any of the Shares to any person pursuant to the Friends and Family Program with the specific intent to unlawfully influence (i) a customer or supplier of the Company to alter the customer’s or supplier’s level or type of business with the Company or (ii) a trade journalist or publication to write or publish favorable information about the Company or its products.] (jj) Except as described in the Prospectus, the Company has not offered, sold or issued any shares of Common Stock during the six-month period preceding the date of the Prospectus, including any sales pursuant to Rule 144A under, or Regulations D or S 12 of, the Securities Act, other than shares issued pursuant to employee benefit plans, qualified stock options plans or other employee compensation plans or pursuant to outstanding options, rights or warrants. (kk) The Company has fulfilled its obligations, if any, under the minimum funding standards of Section 302 of the U.S. Employee Retirement Income Security Act of 1974 (“ERISA”) and the regulations and published interpretations thereunder with respect to each “plan” as defined in Section 3(3) of ERISA and such regulations and published interpretations in which its employees are eligible to participate and each such plan is in compliance in all material respects with the presently applicable provisions of ERISA and such regulations and published interpretations. No “Reportable Event” (as defined in 12 ERISA) has occurred with respect to any “Pension Plan” (as defined in ERISA) for which the Company could have any liability. (ll) Each of the Company, its directors and officers has not distributed and will not distribute prior to the later of (i) the Firm Shares Closing Date, or the Option Shares Closing Date, and (ii) completion of the distribution of the Shares, any offering material in connection with the offering and sale of the Shares other than any Prospectus, the Registration Statement and other materials, if any, permitted by the Securities Act. (mm) No forward looking statement (within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act) contained in the Prospectus has been made or reaffirmed without a reasonable basis or has been disclosed other than in good faith. 3. Representations and Warranties of the Selling Stockholders.Each of the Selling Stockholders hereby represents and warrants to eachUnderwriter as of the date hereof, as of the Firm Shares Closing Date [and, ifthe Selling Stockholders is selling Option Shares, as of each such Option SharesClosing Date (if any),] as follows: (a) Each Selling Stockholder has caused certificates for the number of Shares to be sold by such Selling Stockholder hereunder to be delivered to Citi Trends, Inc. (the “Custodian”), endorsed in blank or with blank stock powers duly executed, with a signature appropriately guaranteed, such certificates to be held in custody by the Custodian for delivery, pursuant to the provisions of this Agreement and an agreement dated ____________ among the Custodian and the Selling Stockholders substantially in the form attached hereto as Exhibit B (the “Custody Agreement”). (b) Each Selling Stockholder has granted an irrevocable power of attorney substantially in the form attached hereto as Exhibit C (the “Power of Attorney”) to the person named therein, on behalf of each such Selling Stockholder, to execute and deliver this Agreement and any other document necessary or desirable in connection with the transactions contemplated hereby and to deliver the shares to be sold by each the Selling Stockholder pursuant hereto. 13 (c) This Agreement, the Custody Agreement, the Power of Attorney and the Lock-Up Agreement have each been duly authorized, executed and delivered by or on behalf of each Selling Stockholder and, assuming due authorization, execution and delivery by the other parties thereto, constitutes the valid and legally binding agreement of each Selling Stockholder, enforceable against each such Selling Stockholder in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles. (d) The execution and delivery by each Selling Stockholder of this Agreement and the performance by each Selling Stockholder of its obligations under this Agreement, including the sale and delivery of the Shares to be sold by each such Selling Stockholder and the consummation of the transactions contemplated herein and compliance by each Selling Stockholder with its obligations hereunder, do not and will not, whether with our without the giving of notice or the passage of time or both, (i) violate or contravene any provision of the charter or bylaws or other organizational instrument of any Selling Stockholder, if applicable, or any applicable law, statute, regulation, or filing or any agreement or other instrument binding upon any Selling Stockholder or any judgment, order or decree of any governmental body, agency or court having jurisdiction over any Selling Stockholder, (ii) conflict with or constitute a breach of, or default under, or result in the creation or imposition of any tax, lien, charge or encumbrance upon the shares to be sold by any Selling Stockholder or any property or assets of any Selling Stockholder pursuant to the terms of any agreement or instrument to which any Selling Stockholder is a party or by which any Selling Stockholder may be bound or to which any of the property or assets of any Selling Stockholder is subject or (iii) require any consent, approval, authorization or order of or registration or filing with any court or governmental agency or body having jurisdiction over it, except such as may be required by the blue sky laws of the various states in connection with the offer and sale of the Shares which have been or will be effected in accordance with this Agreement. (e) Each Selling Stockholder has, and on the Firm Shares Closing Date and the Option Share Closing Date, if applicable, will have, valid and marketable title to the Shares to be sold by such Selling Stockholder free and clear of any lien, claim, security interest or other encumbrance, including, without limitation, any restriction on transfer, except as otherwise described in the Registration Statement and Prospectus. (f) Each Selling Stockholder has, and on the Firm Shares Closing Date and the Option Share Closing Date, if applicable, will have, full legal right, power and authority, and any approval required by law, to sell, assign, transfer and deliver the Shares to be sold by such Selling Stockholder in the manner provided by this Agreement. (g) Upon delivery of and payment for the Shares to be sold by each Selling Stockholder pursuant to this Agreement, assuming each Underwriter has no notice of any adverse claim, the several Underwriters will receive valid and marketable title to such Shares free and clear of any lien, claim, mortgage, pledge, security interest or other encumbrance. 14 (h) All information relating to each Selling Stockholder furnished in writing by such Selling Stockholder expressly for use in the Registration Statement and Prospectus is, and on each Closing Date will be, true, correct, and complete, and does not, and on each Closing Date will not, contain any untrue statement of a material fact or omit to state any material fact necessary to make such information not misleading. (i) Each Selling Stockholder has reviewed the Registration Statement and Prospectus and, although such Selling Stockholder has not independently verified the accuracy or completeness of all the information contained therein, nothing has come to the attention of such Selling Stockholder that would lead such Selling Stockholder to believe that (i) on the Effective Date, the Registration Statement contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary in order to make the statements made therein not misleading and (ii) on the Effective Date the Prospectus, any amendment thereof or supplement thereto contained and, on each Closing Date contains, any untrue statement of a material fact or omitted or omits to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. (j) The sale of Shares by each Selling Stockholder pursuant to this Agreement is not prompted by such Selling Stockholder’s knowledge of any material information concerning the Company which is not set forth in the Prospectus. (k) No Selling Stockholder has taken, directly or indirectly, any action designed to or that might reasonably be expected to cause or result in stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Shares. (l) No Selling Stockholder has knowledge that any representation or warranty of the Company set forth in Section 2 above is untrue or inaccurate in any material respect. (m) The representations and warranties of each Selling Stockholder in the Custody Agreement are, and on each Closing Date will be, true and correct. 4. Conditions of the Underwriters’ Obligations. The obligationsof the Underwriters under this Agreement are several and not joint. Therespective obligations of the Underwriters to purchase the Shares are subject toeach of the following terms and conditions: (a) Notification that the Registration Statement has become effective shall have been received by the Representatives and the Prospectus shall have been timely filed with the Commission in accordance with Section 5(a) of this Agreement. (b) No order preventing or suspending the use of any preliminary prospectus or the Prospectus shall have been or shall be in effect and no order suspending the effectiveness of the Registration Statement shall be in effect and no proceedings for such purpose shall be pending before or threatened by the Commission, and any requests for additional information on the part of the Commission (to be included in the Registration Statement or the Prospectus or otherwise) shall have been complied with to the 15 satisfaction of the Commission and the Representatives. If the Company has elected to rely upon Rule 430A, Rule 430A information previously omitted from the effective Registration Statement pursuant to Rule 430A shall have been transmitted to the Commission for filing pursuant to Rule 424(b) within the prescribed time period and the Company shall have provided evidence satisfactory to the Underwriters of such timely filing, or a post-effective amendment providing such information shall have been promptly filed and declared effective in accordance with the requirements of Rule 430A. If the Company has elected to rely upon Rule 434, a term sheet shall have been transmitted to the Commission for filing pursuant to Rule 424(b) within the prescribed time period. (c) The representations and warranties of the Company and the Selling Stockholders contained in this Agreement and in the certificates delivered pursuant to Section 4(d) shall be true and correct when made and on and as of each Closing Date as if made on such date. The Company and the Selling Stockholders shall have performed all covenants and agreements and satisfied all the conditions contained in this Agreement required to be performed or satisfied by them at or before such Closing Date. (d) The Representatives shall have received on each Closing Date a certificate, addressed to the Representatives and dated such Closing Date, of the chief executive or chief operating officer and the chief financial officer or chief accounting officer of the Company to the effect that: (i) the representations, warranties and agreements of the Company in this Agreement were true and correct when made and are true and correct as of such Closing Date; (ii) the Company has performed all covenants and agreements and satisfied all conditions contained herein; (iii) they have carefully examined the Registration Statement and the Prospectus and, in their opinion (A) as of the Effective Date, the Registration Statement and Prospectus did not include any untrue statement of a material fact and did not omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, and (B) since the Effective Date no event has occurred which should have been set forth in a supplement or otherwise required an amendment to the Registration Statement or the Prospectus; and (iv) no stop order suspending the effectiveness of the Registration Statement has been issued and, to their knowledge, no proceedings for that purpose have been instituted or are pending under the Securities Act. (e) The Representatives shall have received on each Closing Date a certificate addressed to the Representatives and dated such Closing Date, of each Selling Stockholder, to the effect that:(i) the representations, warranties and agreements of each Selling Stockholder in this Agreement were true and correct when made and are true and correct as of such Closing Date; (ii) each Selling Stockholder has performed all covenants and agreements and satisfied all conditions contained herein; and (iii) each Selling Stockholder has carefully examined the Registration Statement and the Prospectus and, in the opinion of such Selling Stockholder, (A) with respect to the information relating to such Selling Stockholder, as of the Effective Date, the Registration Statement and Prospectus did not include any untrue statement of a material fact and did not omit to state a material fact required to be stated therein or necessary to 16 make the statements therein, in light of the circumstances under which they were made, not misleading, and (B) since the Effective Date no event has occurred with respect to such Selling Stockholder which should have been set forth in a supplement or otherwise required an amendment to the Registration Statement or the Prospectus. (f) The Representatives shall have received, at the time this Agreement is executed and on each Closing Date a signed letter from KPMG LLP addressed to the Representatives and dated, respectively, the date of this Agreement and each such Closing Date, in form and substance reasonably satisfactory to the Representatives containing statements and information of the type ordinarily included in accountants’ “comfort letters” to underwriters with respect to the financial statements and certain financial information contained in the Registration Statement and the Prospectus. (g) The Representatives shall have received on each Closing Date from Paul, Hastings, Janofsky & Walker LLP, counsel for the Company, an opinion, addressed to the Representatives and dated such Closing Date, and stating in effect that: (i) The Company has been duly organized and is validly existing as a corporation in good standing under the laws of the State of Delaware. The Company is duly qualified to transact business and is in good standing as a foreign corporation in each jurisdiction in which the character or location of its assets or properties or the nature of its business makes such qualification necessary, except where the failure to so qualify or to be in good standing, individually or in the aggregate, would not have a Material Adverse Effect. (ii) The Company has all requisite corporate power and authority to own, lease and operate its properties and to conduct its business as now being conducted and as described in the Registration Statement and the Prospectus and to enter into and perform its obligations under this Agreement and to issue and sell the Shares. (iii) The authorized, issued and outstanding capital stock of the Company is as set forth in the Registration Statement and the Prospectus under the caption “Capitalization” as of the dates stated therein and, since such dates, there has been no change in the capital stock of the Company except for subsequent issuances, if any, pursuant to this Agreement or pursuant to reservations, agreements or employee benefit plans referred to in the Prospectus or pursuant to the exercise of convertible securities or options referred to in the Prospectus; all of the outstanding shares of capital stock of the Company have been duly and validly authorized and issued and are fully paid and nonassessable and none of them was issued in violation of any preemptive or other similar right. The Shares to be issued and sold by the Company pursuant to this Agreement have been duly authorized for issuance and sale to the Underwriters pursuant to this Agreement and, when issued and delivered by the Company pursuant to this Agreement against payment of the consideration set forth herein, will be validly issued, fully paid and nonassessable, and no holder of the Shares is or will be subject to personal liability by reason of being such a holder. The issuance and 17 sale of the Shares by the Company is not subject to any preemptive or other similar rights of any securityholder of the Company. To such counsel’s knowledge, except as disclosed in the Registration Statement and the Prospectus, there are no preemptive or other rights to subscribe for or to purchase or any restriction upon the voting or transfer of any securities of the Company pursuant to the Charter or Bylaws or any agreements or other instruments to which the Company is a party or by which it is bound. The sale of the shares by the Selling Stockholders is not subject to any preemptive or other similar rights of any security holders of the company. To such counsel’s knowledge, except as disclosed in the Registration Statement and the Prospectus, there is no outstanding option, warrant or other right calling for the issuance of, and no commitment, plan or arrangement to issue, any share of stock of the Company or any security convertible into, exercisable for, or exchangeable for stock of the Company. The Common Stock and the Shares conform in all material respects to the descriptions thereof contained in the Registration Statement and the Prospectus. The form of certificate used to evidence the Common Stock complies in all material respects with all applicable statutory requirements, with any applicable requirements of the Charter or Bylaws and the requirements of the Nasdaq National Market. To such counsel’s knowledge, there are no persons with registration rights or other similar rights to have any securities registered pursuant to the Registration Statement or otherwise registered by the Company under the Securities Act. (iv) All necessary corporate action has been duly and validly taken by the Company and to authorize the execution, delivery and performance of this Agreement and the issuance and sale of the Shares. This Agreement has been duly and validly authorized, executed and delivered by the Company and this Agreement constitutes the legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles. (v) Neither the execution, delivery and performance of this Agreement by the Company nor the consummation of any of the transactions contemplated hereby (including, without limitation, the issuance and sale by the Company of the Shares) nor the execution, delivery or performance of any other agreement or instrument entered into or to be entered into by the Company in connection with the transactions contemplated by the Registration Statement and the Prospectus will give rise to a right to terminate or accelerate the due date of any payment due under, or conflict with or result in the breach of any term or provision of, or constitute a default (or any event which with notice or lapse of time, or both, would constitute a default) under, or require consent or waiver under, or result in the execution or imposition of any lien, charge, claim, security interest or encumbrance upon any properties or assets of the Company pursuant to the terms of, any indenture, mortgage, deed trust, note or other agreement or instrument of which such counsel is aware and to which the Company is a party or by which it or any of its assets or properties or businesses is bound, or any 18 franchise, license, permit, judgment, decree, order, statute, rule or regulation, domestic or foreign, of which such counsel is aware or violate any provision of the Charter or Bylaws. (vi) No consent, approval, authorization, license, registration, qualification or order of any court or governmental agency or regulatory body is required for the due authorization, execution, delivery or performance of this Agreement by the Company or the consummation of the transactions contemplated hereby or thereby, except such as have been obtained under the Securities Act and such as may be required under state securities or blue sky laws in connection with the purchase and distribution of the Shares by the several Underwriters. (vii) To the best of such counsel’s knowledge, there is no any action, suit, proceeding or other investigation, before any court or before or by any public body or board pending or threatened against, or involving the assets, properties or businesses of, the Company which is required to be disclosed in the Registration Statement and the Prospectus and is not so disclosed or which could reasonably be expected to have a Material Adverse Effect. (viii) The statements in the Prospectus under the captions “Description of Capital Stock,” “Business — Litigation,” and “Certain Transactions,” and in the Registration Statement under Item 15 of Part II, insofar as such statements constitute a summary of documents referred to therein or matters of law, are accurate in all material respects and accurately present the information with respect to such documents and matters. Accurate copies of all contracts and other documents required to be filed as exhibits to, or described in, the Registration Statement have been so filed with the Commission or are fairly described in the Registration Statement, as the case may be. (ix) (A) The Company is in compliance in all material respects with all applicable Environmental Laws; (B) the Company has not received any notice from any governmental authority or third party of an asserted claim under any Environmental Law; (C) the Company has received all permits, licenses or other approvals required of it under applicable Environmental Laws to conduct its business and is in compliance with all terms and conditions of any such permit, license or approval, except where such failure to receive required permits, licenses or other approvals or failure to comply with the terms and conditions of such permits, licenses or other approvals would not, singly or in the aggregate, have a Material Adverse Effect; and (D) no property which is or has been owned, leased or occupied by the Company has been designated as a Superfund site pursuant to the Comprehensive Environmental Response, Compensation of Liability Act of 1980, as amended (42 U.S.C. Section 9601, et seq.), or otherwise designated as a contaminated site under applicable state or local law. (x) The Registration Statement, all Preliminary Prospectuses and the Prospectus and each amendment or supplement thereto (except for the 19 financial statements and schedules and other financial data included therein, as to which such counsel expresses no opinion) comply as to form in all material respects with the requirements of the Securities Act and the Rules, all Preliminary Prospectuses and the Prospectuses and any further amendment or supplement to any such incorporated document made by the Company (except for the financial statements and schedules and other financial data included therein, as to which such counsel expresses no opinion) when they became effective or were filed with the Commission, as the case may be, complied as to form in all material respects with the requirements of the Securities Act or the Exchange Act, as applicable, and the published rules and regulations of the Commission thereunder. (xi) The Registration Statement is effective under the Securities Act, and to such counsel’s knowledge no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been instituted or are threatened, pending or contemplated. Any required filing of the Prospectus and any supplement thereto pursuant to Rule 424(b) under the Securities Act has been made in the manner and within the time period required by such Rule 424(b). (xii) The Shares have been approved for listing on the Nasdaq National Market. (xiii) The capital stock of the Company conforms in all material respects to the description thereof contained in the Prospectus under the caption “Description of Capital Stock.” (xiv) The Company is not and, before and after giving effect to the offering and sale of the Shares and the application of proceeds thereof as described in the Prospectus, will not be an “investment company” within the meaning of the Investment Company Act. To the extent deemed advisable by such counsel, such counsel may rely as to matters of fact on certificates of responsible officers of the Company and public officials and on the opinions of other counsel satisfactory to the Representatives as to matters which are governed by laws other than the laws of the State of New York, the General Corporation Law of the State of Delaware and the federal laws of the United States; provided that such counsel shall state that in their opinion the Underwriters and they are justified in relying on such other opinions. Copies of such certificates and other opinions shall be furnished to the Representatives and counsel for the Underwriters. In addition, such counsel shall state that such counsel has participated in conferences with officers and other representatives of the Company, representatives of the Representatives and representatives of the independent certified public accountants of the Company, at which conferences the contents of the Registration Statement and the Prospectus and related matters were discussed and, although such counsel is not passing upon and does not assume any responsibility for the accuracy, completeness or fairness of the statements contained in the Registration Statement and the Prospectus (except as 20 specified in the foregoing opinion), on the basis of the foregoing, no facts have come to the attention of such counsel which lead such counsel to believe that the Registration Statement at the time it became effective (except with respect to the financial statements and notes and schedules thereto and other financial data, as to which such counsel need express no belief) contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading, or that the Prospectus as amended or supplemented (except with respect to the financial statements, notes and schedules thereto and other financial data, as to which such counsel need make no statement) on the date thereof contained any untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. (h) The Representatives shall have received on the Firm Shares Closing Date from ________________________, counsel for the Selling Stockholders, an opinion, addressed to the Representatives and dated such Closing Date, and stating in effect that: (i) This Agreement has been duly authorized, executed and delivered by or on behalf of each Selling Stockholder. (ii) Each of the Custody Agreement, the Power of Attorney and the Lock-up Agreement has been duly authorized, executed and delivered by each Selling Stockholder. (iii) This Agreement, the Custody Agreement, the Power of Attorney and the Lock-Up Agreement each constitute the legal, valid and binding obligation of each Selling Stockholder enforceable against each Selling Stockholder in accordance with its terms except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles. (iv) Each Selling Stockholder has the legal right, power and authority to enter into this Agreement and to sell, transfer and deliver in the manner provided in this Agreement, the Shares to be sold by such Selling Stockholder hereunder. (v) The execution, delivery and performance of this Agreement, the Power of Attorney, the Custody Agreement and the Lock-Up Agreement and the sale and delivery by each Selling Stockholder of the Shares to be sold by such Selling Stockholder as contemplated by this Agreement and the consummation of the transactions contemplated in this Agreement and in the Registration Statement and the Prospectus and compliance by such Selling Stockholder with its obligations hereunder do not and will not, whether with or without the giving of notice or passage of time or both, conflict with or constitute a breach of, or default under or result in the creation or imposition of any tax, lien, charge or encumbrance upon the Shares or any property or assets of such Selling 21 Stockholder pursuant to, any contract, indenture, mortgage, deed of trust, loan or credit agreement, note, license, lease or other instrument or agreement to which such Selling Stockholder is a party or by which such Selling Stockholder may be bound, or to which any of the property or assets of such Selling Stockholder may be subject nor will such action result in any violation of the provisions of the charter or by-laws of such Selling Stockholder, if applicable, or any law, administrative regulation, judgment or order of any governmental agency or body or any administrative or court decree having jurisdiction over such Selling Stockholder or any of its properties. (vi) To such counsel’s knowledge, each Selling Stockholder has valid and marketable title to the Shares to be sold by such Selling Stockholder pursuant to this Agreement, free and clear of any pledge, lien, security interest, charge, claim, equity or encumbrance of any kind, and has full right, power and authority to sell, transfer and deliver such Shares pursuant to this Agreement. By delivery of a certificate or certificates therefor each Selling Stockholder will transfer to the Underwriters who have purchased such Shares pursuant to this Agreement (without notice of any defect in the title of each Selling Stockholder and who is otherwise a bona fide purchaser for purposes of the Uniform Commercial Code) valid and marketable title to such Shares, free and clear of any pledge, lien, security interest, charge, claim, equity or encumbrance of any kind. (vii) No filing with, consent, approval, authorization, license, certificate, permit or order of any court, governmental or regulatory agency, authority or body or financial institution is required in connection with the performance of this Agreement, the Custody Agreement, the Power of Attorney or the Lock-up Agreement by each Selling Stockholder or the consummation of the transactions contemplated hereby or thereby, including the delivery and sale of the Shares to be delivered and sold by each Selling Stockholder, except such as may be required under state securities or blue sky laws in connection with the purchase and distribution of the Shares by the several Underwriters. To the extent deemed advisable by such counsel, such counsel may rely asto matters of fact on certificates of the Selling Stockholders and on theopinions of other counsel satisfactory to the Representatives as to matterswhich are governed by laws other than the laws of the States of New York and theGeneral Corporate Law of the State of Delaware or the federal laws of the UnitedStates; provided that such counsel shall state that in their opinion theUnderwriters and they are justified in relying on such other opinions. Copies ofsuch certificates and other opinions shall be furnished to the Representativesand counsel for the Underwriters. In addition, such counsel shall state that such counsel has participatedin conferences with officers and other representatives of the Company,representatives of the Representatives and representatives of the independentpublic accountants of the Company, at which conferences the contents of theRegistration Statement and the Prospectus and related matters were discussed.While such counsel has not undertaken to independently verify and does notassume any responsibility for the accuracy, 22completeness or fairness of the statements contained in the RegistrationStatement and the Prospectus (except as specified in the foregoing opinion), onthe basis of the foregoing, no facts have come to the attention of such counselwhich lead such counsel to believe that the Registration Statement at the timeit became effective (except with respect to the financial statements, notes andschedules thereto and other financial data, as to which such counsel needexpress no belief) contained any untrue statement of a material fact or omittedto state a material fact required to be stated therein or necessary to make thestatements therein not misleading, or that the Prospectus as amended orsupplemented (except with respect to the financial statements, notes andschedules thereto and other financial data, as to which such counsel need makeno statement) on the date thereof and the date of such opinion contained anyuntrue statement of a material fact or omitted to state a material factnecessary in order to make the statements therein, in the light of thecircumstances under which they were made, not misleading. (i) The Representatives shall have received on each Closing Date from DLAPiper Rudnick Gray Cary US LLP, counsel for the Representatives, an opinion,addressed to the Representatives and dated such Closing Date, and stating ineffect that: (i) The issuance and sale of the Shares have been duly authorized by requisite corporate action on the part of the Company and when delivered to and paid for by the Underwriters in accordance with the terms of the Underwriting Agreement, will be validly issued, fully paid and non-assessable, and to our knowledge the issuance of such Shares will not be subject to any preemptive or similar rights: (A) contained in the Company’s Charter and Bylaws or (B) under the Delaware General Corporate Law, except such as have been validly waived. (ii) The Underwriting Agreement has been duly authorized, executed and delivered by the Company. (iii) As of the date of the Prospectus, the statements in the Prospectus under the captions “Description of Capital Stock” and “Underwriters” insofar as such statements constituted summaries of the legal matters, documents or proceedings referred to therein, fairly presented the information called for with respect to such legal matters, documents and proceedings and fairly summarized the matters referred to therein. (iv) The Registration Statement, all Preliminary Prospectuses and the Prospectus and each amendment or supplement thereto (except for the financial statements and schedules and other financial data included therein, as to which such counsel expresses no opinion) comply as to form in all material respects with the requirements of the Securities Act and the Rules, all Preliminary Prospectuses and the Prospectuses and any further amendment or supplement to any such incorporated document made by the Company (except for the financial statements and schedules and other financial data included therein, as to which such counsel expresses no opinion) when they became effective or were filed with the Commission, as the case may be, complied as to form in all material respects 23 with the requirements of the Securities Act or the Exchange Act, as applicable, and the rules and regulations of the Commission thereunder. (v) The Registration Statement is effective under the Securities Act, and to such counsel’s knowledge no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been instituted or are threatened, pending or contemplated. Any required filing of the Prospectus and any supplement thereto pursuant to Rule 424(b) under the Securities Act has been made in the manner and within the time period required by such Rule 424(b). To the extent deemed advisable by such counsel, such counsel may rely asto matters of fact on certificates of responsible officers of the Company andpublic officials and on the opinions of other counsel satisfactory to theRepresentatives as to matters which are governed by laws other than the laws ofthe State of New York, the General Corporation Law of the State of Delaware andthe federal laws of the United States; provided that such counsel shall statethat in their opinion the Underwriters and they are justified in relying on suchother opinions. Copies of such certificates and other opinions shall befurnished to the Representatives. In addition, such counsel shall state that such counsel has participatedin conferences with officers and other representatives of the Company,representatives of the Representatives and representatives of the independentcertified public accountants of the Company, at which conferences the contentsof the Registration Statement and the Prospectus and related matters werediscussed and, although such counsel is not passing upon and does not assume anyresponsibility for the accuracy, completeness or fairness of the statementscontained in the Registration Statement and the Prospectus (except as specifiedin the foregoing opinion), on the basis of the foregoing, no facts have come tothe attention of such counsel which lead such counsel to believe that theRegistration Statement at the time it became effective (except with respect tothe financial statements, supporting schedules and other financial data, as towhich such counsel need express no belief) contained any untrue statement of amaterial fact or omitted to state a material fact required to be stated thereinor necessary to make the statements therein not misleading, or that theProspectus as amended or supplemented (except with respect to the financialstatements, supporting schedules and other financial data, as to which suchcounsel need express no belief) on the date thereof contained any untruestatement of a material fact or omitted to state a material fact necessary inorder to make the statements therein, in the light of the circumstances underwhich they were made, not misleading. (j) The Representatives shall have received copies of the Lock-UpAgreements executed by each entity or person listed on Schedule III hereto. (k) The Shares shall have been approved for quotation on the NasdaqNational Market, subject only to official notice of issuance. 24 (l) The Company and each Selling Stockholder shall have furnished orcaused to be furnished to the Representatives such further certificates ordocuments as the Representatives shall have reasonably requested. 5. Covenants of the Company and the Selling Stockholders. (a) Each of the Company and the Selling Stockholders (to the extent setforth in clause (ix) below) covenants and agrees as follows: (i) The Company will use its best efforts to cause the Registration Statement, if not effective at the time of execution of this Agreement, and any amendments thereto, to become effective as promptly as possible. The Company shall prepare the Prospectus in a form approved by the Representatives and file such Prospectus pursuant to Rule 424(b) under the Securities Act not later than the Commission’s close of business on the second business day following the execution and delivery of this Agreement, or, if applicable, such earlier time as may be required by the Rules. (ii) The Company shall promptly advise the Representatives in writing (A) when any post-effective amendment to the Registration Statement shall have become effective or any supplement to the Prospectus shall have been filed, (B) of any request by the Commission for any amendment of the Registration Statement or the Prospectus or for any additional information, (C) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or of any order preventing or suspending the use of any preliminary prospectus or the institution or threatening of any proceeding for that purpose and (D) of the receipt by the Company of any notification with respect to the suspension of the qualification of the Shares for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose. The Company shall not file any amendment of the Registration Statement or supplement to the Prospectus unless the Company has furnished the Representatives a copy for its review prior to filing and shall not file any such proposed amendment or supplement to which the Representatives reasonably object. The Company shall use its best efforts to prevent the issuance of any such stop order and, if issued, to obtain as soon as possible the withdrawal thereof. (iii) If, at any time when a prospectus relating to the Shares is required to be delivered under the Securities Act and the Rules, any event occurs as a result of which the Prospectus as then amended or supplemented would include any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein in the light of the circumstances under which they were made not misleading, or if it shall be necessary to amend or supplement the Prospectus to comply with the Securities Act or the Rules, the Company promptly shall prepare and file with the Commission, subject to the second sentence of paragraph (ii) of this Section 5(a), an amendment or supplement which shall correct such statement or omission or an amendment which shall effect such compliance. 25 (iv) The Company shall make generally available to its security holders and to the Representatives as soon as practicable, but not later than 45 days after the end of the 12-month period beginning at the end of the fiscal quarter of the Company during which the Effective Date occurs (or 90 days if such 12-month period coincides with the Company’s fiscal year), an earning statement (which need not be audited) of the Company, covering such 12-month period, which shall satisfy the provisions of Section 11(a) of the Securities Act or Rule 158 of the Rules. (v) The Company shall furnish to the Representatives and counsel for the Underwriters, without charge, signed copies of the Registration Statement (including all exhibits thereto and amendments thereof) and to each other Underwriter a copy of the Registration Statement (without exhibits thereto) and all amendments thereof and, so long as delivery of a prospectus by an Underwriter or dealer may be required by the Securities Act or the Rules, as many copies of any preliminary prospectus and the Prospectus and any amendments thereof and supplements thereto as the Representatives may reasonably request. If applicable, the copies of the Registration Statement and Prospectus and each amendment and supplement thereto furnished to the Underwriters will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T. (vi) The Company shall cooperate with the Representatives and their counsel in endeavoring to qualify the Shares for offer and sale in connection with the offering under the laws of such jurisdictions as the Representatives may designate and shall maintain such qualifications in effect so long as required for the distribution of the Shares; provided, however, that the Company shall not be required in connection therewith, as a condition thereof, to qualify as a foreign corporation or to execute a general consent to service of process in any jurisdiction or subject itself to taxation as doing business in any jurisdiction. (vii) The Company, during the period when the Prospectus is required to be delivered under the Securities Act and the Rules or the Exchange Act, will file all reports and other documents required to be filed with the Commission pursuant to Section 13, 14 or 15 of the Exchange Act within the time periods required by the Exchange Act and the regulations promulgated thereunder. (viii) Without the prior written consent of CIBC World Markets Corp., for a period of 180 days after the date of this Agreement, the Company and each of its individual directors and executive officers shall not issue, sell or register with the Commission (other than on Form S-8 or on any successor form), or otherwise dispose of, directly or indirectly, any equity securities of the Company (or any securities convertible into, exercisable for or exchangeable for equity securities of the Company), except for the issuance of the Shares pursuant to the Registration Statement and the issuance of shares pursuant to the Company’s existing stock option plan or bonus plan as described in the 26 Registration Statement and the Prospectus. In the event that during this period, (A) any shares are issued pursuant to the Company’s existing stock option plan or bonus plan that are exercisable during such 180 day period or (B) any registration is effected on Form S-8 or on any successor form relating to shares that are exercisable during such 180 period, the Company shall obtain the written agreement of such grantee or purchaser or holder of such registered securities that, for a period of 180 days after the date of this Agreement, such person will not, without the prior written consent of CIBC World Markets Corp., offer for sale, sell, distribute, grant any option for the sale of, or otherwise dispose of, directly or indirectly, or exercise any registration rights with respect to, any shares of Common Stock (or any securities convertible into, exercisable for, or exchangeable for any shares of Common Stock) owned by such person. (ix) Neither the Company nor any Selling Stockholder shall take, directly or indirectly, any action designed to or which might reasonably be expected to cause or result in the stabilization or manipulation of the price of the Common Stock or any security of the Company to facilitate the sale or resale of any of the Shares. (x) On or before completion of this offering, the Company shall make all filings required under applicable securities laws and by the Nasdaq National Market (including any required registration under the Exchange Act). (xi) Prior to the Closing Date, the Company will issue no press release or other communications directly or indirectly and hold no press conference with respect to the Company, the condition, financial or otherwise, or the earnings, business affairs or business prospects of any of them, or the offering of the Shares without the prior written consent of the Representatives unless in the judgment of the Company and its counsel, and after notification to the Representatives, such press release or communication is required by law. (xii) [The Company will comply with all applicable securities laws and other applicable laws, rules and regulations in each foreign jurisdiction in which the Directed Shares are offered in connection with the Friends and Family Program.] (xiii) The Company will apply the net proceeds from the offering of the Shares in the manner set forth under “Use of Proceeds” in the Prospectus, and the Company will at all times prior to the application of the net proceeds from the offering operate its business so as not to become an “investment company” within the meaning of the Investment Company Act. (xiv) [The Company will ensure that the Directed Shares will be restricted, to the extent required by the NASD or the NASD rules, from sale, transfer, assignment, pledge or hypothecation for a period of three months following the date of the effectiveness of the Registration Statement. The Representatives will notify the Company as to which Participants will need to be 27 so restricted. The Company shall direct the transfer agent to place stop transfer restrictions upon such securities for such period of time.] (b) The Company agrees to pay, or reimburse if paid by theRepresentatives, whether or not the transactions contemplated hereby areconsummated or this Agreement is terminated, all costs and expenses incident tothe public offering of the Shares and the performance of the obligations of theCompany under this Agreement including those relating to: (i) the preparation,printing, filing and distribution of the Registration Statement including allexhibits thereto, each preliminary prospectus, the Prospectus, all amendmentsand supplements to the Registration Statement and the Prospectus, and theprinting, filing and distribution of this Agreement; (ii) the preparation anddelivery of certificates for the Shares to the Underwriters; (iii) theregistration or qualification of the Shares for offer and sale under thesecurities or blue sky laws of the various jurisdictions referred to in Section5(a)(vi), including the reasonable fees and disbursements of counsel for theUnderwriters in connection with such registration and qualification and thepreparation, printing, distribution and shipment of preliminary andsupplementary blue sky memoranda, if any; (iv) the furnishing (including costsof shipping and mailing) to the Representatives and to the Underwriters ofcopies of each preliminary prospectus, the Prospectus and all amendments orsupplements to the Prospectus, and of the several documents required by thisSection to be so furnished, as may be reasonably requested for use in connectionwith the offering and sale of the Shares by the Underwriters or by dealers towhom Shares may be sold; (v) the filing fees of the NASD in connection with itsreview of the terms of the public offering and reasonable fees and disbursementsof counsel for the Underwriters in connection with such review; (vi) inclusionof the Shares for quotation on the Nasdaq National Market; and (vii) alltransfer taxes, if any, with respect to the sale and delivery of the Shares bythe Company to the Underwriters [(viii) payments to counsel for costs incurredby the Underwriters in connection with the Friends and Family Program andpayment of any stamp duties, similar taxes or duties or other taxes, if any,incurred by the Underwriters in connection with the Friends and Family Program.]Subject to the provisions of Section 8, the Underwriters agree to pay, whetheror not the transactions contemplated hereby are consummated or this Agreement isterminated, all costs and expenses incident to the performance of theobligations of the Underwriters under this Agreement not payable by the Companypursuant to the preceding sentence, including, without limitation, the fees anddisbursements of counsel for the Underwriters. (c) The Selling Stockholders, jointly and severally, will pay all expensesincident to the performance of their respective obligations under, and theconsummation of the transactions contemplated by, this Agreement, including (i)any stamp duties, capital duties and stock transfer taxes, if any, payable uponthe sale of the Shares to the Underwriters, and their transfer between theUnderwriters pursuant to an agreement between such Underwriters, and (ii) thefees and disbursements of their respective counsel and accountants. 28 6. Indemnification. (a) The Company and the Selling Stockholders, jointly and severally,agrees to indemnify and hold harmless each Underwriter and each person, if any,who controls any Underwriter within the meaning of Section 15 of the SecuritiesAct or Section 20 of the Exchange Act against any and all losses, claims,damages and liabilities, joint or several (including any reasonableinvestigation, legal and other expenses incurred in connection with, and anyamount paid in settlement of, any action, suit or proceeding or any claimasserted), to which they, or any of them, may become subject under theSecurities Act, the Exchange Act or other Federal or state law or regulation, atcommon law or otherwise, insofar as such losses, claims, damages or liabilitiesarise out of or are based upon (i) any untrue statement or alleged untruestatement of a material fact contained in any preliminary prospectus, theRegistration Statement or the Prospectus or any amendment thereof or supplementthereto, or in any blue sky application or other information or other documentsexecuted by the Company filed in any state or other jurisdiction to qualify anyor all of the Shares under the securities laws thereof (any such application,document or information being hereinafter referred to as a “Blue SkyApplication”) or arise out of or are based upon any omission or alleged omissionto state therein a material fact required to be stated therein or necessary tomake the statements therein not misleading; provided, however, that suchindemnity shall not inure to the benefit of any Underwriter (or any personcontrolling such Underwriter) on account of any losses, claims, damages orliabilities arising from the sale of the Shares to any person by suchUnderwriter if such untrue statement or omission or alleged untrue statement oromission was made in such preliminary prospectus, the Registration Statement orthe Prospectus, or such amendment or supplement thereto, or in any Blue SkyApplication in reliance upon and in conformity with information furnished inwriting to the Company by the Representatives on behalf of any Underwriterspecifically for use therein. Notwithstanding the foregoing, the liability ofthe Selling Stockholders pursuant to the provisions of this Section 6(a) shallbe limited to an amount equal to the aggregate net proceeds received by suchSelling Stockholders from the sale of the Shares sold by the SellingStockholders hereunder. This indemnity agreement will be in addition to anyliability which the Company and Selling Stockholders may otherwise have. [The Company agrees to indemnify and hold harmless the Representatives andeach person, if any, who controls any Representative within the meaning ofSection 15 of the Securities Act or Section 20 of the Exchange Act against anyand all losses, claims, damages, expenses and liabilities (including anyreasonable investigation, legal and other expenses incurred in connection with,and any amount paid in settlement of, any action, suit or proceeding or anyclaim asserted) (i) arising out of or based upon any untrue statement or allegeduntrue statement of a material fact contained in any material prepared by orwith the consent of the Company for distribution to Participants in connectionwith the Friends and Family Program or arising out of or based upon any omissionor alleged omission to state therein a material fact required to be statedtherein or necessary to make the statements therein not misleading, (ii) arisingout of or based upon the failure of any Participant to pay for and acceptdelivery of Directed Shares otherwise reserved for such Participant pursuant tothe Friends and Family Program, and (iii) related to, arising out of, or inconnection with the Friends and Family Program, 29other than losses, claims, damages or liabilities (or expenses relating thereto)that are finally judicially determined to have resulted from the bad faith orgross negligence of the Representatives.] (b) Each Underwriter agrees to indemnify and hold harmless the Company,the Selling Stockholders and each person, if any, who controls the Company orthe Selling Stockholders within the meaning of Section 15 of the Securities Actor Section 20 of the Exchange Act, each director of the Company, and eachofficer of the Company who signs the Registration Statement, against any losses,claims, damages or liabilities to which such party may become subject, under theSecurities Act or otherwise, insofar as such losses, claims, damages orliabilities (or actions in respect thereof) arise out of or are based upon anuntrue statement or alleged untrue statement of a material fact contained in anypreliminary prospectus, the Registration Statement or the Prospectus, or anyamendment or supplement thereto, or arise out of or are based upon the omissionor alleged omission to state therein a material fact required to be statedtherein or necessary to make the statements therein not misleading, in each caseto the extent, but only to the extent, that such untrue statement or allegeduntrue statement or omission or alleged omission was made in any preliminaryprospectus, the Registration Statement or the Prospectus or any such amendmentor supplement in reliance upon and in conformity with written informationfurnished to the Company by such Underwriter through the Representativeexpressly for use therein (it being understood that such information is limitedto the statements identified in Section 2(a) above); provided, however, that theobligation of each Underwriter to indemnify the Company or the SellingStockholders (including any controlling person, director or officer thereof)shall be limited to the net proceeds received by the Company from suchUnderwriter. (c) Any party that proposes to assert the right to be indemnified underthis Section will, promptly after receipt of notice of commencement of anyaction, suit or proceeding against such party in respect of which a claim is tobe made against an indemnifying party or parties under this Section, notify eachsuch indemnifying party of the commencement of such action, suit or proceeding,enclosing a copy of all papers served. No indemnification provided for inSection 6(a) or 6(b) shall be available to any party who shall fail to givenotice as provided in this Section 6(c) if the party to whom notice was notgiven was unaware of the proceeding to which such notice would have related andwas prejudiced by the failure to give such notice but the omission so to notifysuch indemnifying party of any such action, suit or proceeding shall not relieveit from any liability that it may have to any indemnified party for contributionor otherwise than under this Section. In case any such action, suit orproceeding shall be brought against any indemnified party and it shall notifythe indemnifying party of the commencement thereof, the indemnifying party shallbe entitled to participate in, and, to the extent that it shall wish, jointlywith any other indemnifying party similarly notified, to assume the defensethereof, with counsel reasonably satisfactory to such indemnified party, andafter notice from the indemnifying party to such indemnified party of itselection so to assume the defense thereof and the approval by the indemnifiedparty of such counsel, the indemnifying party shall not be liable to suchindemnified party for any legal or other expenses, except as provided below andexcept for the reasonable costs of investigation subsequently incurred by suchindemnified party in connection with the defense thereof. 30 The indemnified party shall have the right to employ its counsel in any such action, but the fees and expenses of such counsel shall be at the expense of such indemnified party unless (i) the employment of counsel by such indemnified party has been authorized in writing by the indemnifying parties, (ii) the indemnified party shall have been advised by counsel that there may be one or more legal defenses available to it which are different from or in addition to those available to the indemnifying party (in which case the indemnifying parties shall not have the right to direct the defense of such action on behalf of the indemnified party) or (iii) the indemnifying parties shall not have employed counsel to assume the defense of such action within a reasonable time after notice of the commencement thereof, in each of which cases the fees and expenses of counsel shall be at the expense of the indemnifying parties. An indemnifying party shall not be liable for any settlement of any action, suit, and proceeding or claim effected without its written consent, which consent shall not be unreasonably withheld or delayed. 7. Contribution. In order to provide for just and equitablecontribution in circumstances in which the indemnification provided for inSection 6(a) or 6(b) is due in accordance with its terms but for any reason isunavailable to or insufficient to hold harmless an indemnified party in respectto any losses, liabilities, claims, damages or expenses referred to therein,then each indemnifying party shall contribute to the aggregate losses,liabilities, claims, damages and expenses (including any investigation, legaland other expenses reasonably incurred in connection with, and any amount paidin settlement of, any action, suit or proceeding or any claims asserted, butafter deducting any contribution received by any person entitled hereunder tocontribution from any person who may be liable for contribution) incurred bysuch indemnified party, as incurred, in such proportion as is appropriate toreflect the relative benefits received by the Company and the SellingStockholders on the one hand and the Underwriters on the other hand from theoffering of the Shares pursuant to this Agreement or, if such allocation is notpermitted by applicable law, in such proportion as is appropriate to reflect notonly the relative benefits referred to above but also the relative fault of theCompany and the Selling Stockholders on the one hand and the Underwriters on theother hand in connection with the statements or omissions [,or in connectionwith any violation of the nature referred to in Section 6(a) hereof with respectto Directed Shares,] which resulted in such losses, liabilities, claims, damagesor expenses, as well as any other relevant equitable considerations. TheCompany, the Selling Stockholders and the Underwriters agree that it would notbe just and equitable if contribution pursuant to this Section 7 were determinedby pro rata allocation (even if the Underwriters were treated as one entity forsuch purpose) or by any other method of allocation which does not take accountof the equitable considerations referred to above. The aggregate amount oflosses, liabilities, claims, damages and expenses incurred by an indemnifiedparty and referred to above shall be deemed to include any legal or otherexpenses reasonably incurred by such indemnified party in investigating,preparing or defending against any litigation, or any investigation orproceeding by any governmental agency or body, commenced or threatened, or anyclaim whatsoever based upon any such untrue or alleged untrue statement oromission or alleged omission. Notwithstanding the provisions of this Section 7,(i) no Underwriter (except as may be provided in the Agreement AmongUnderwriters) shall be required to contribute any amount in excess of the amountby which the total price at which the shares underwritten by it and distributedto the public were offered to the public exceeds the amount of damages whichsuch underwriter has otherwise been required to pay by reason of any such untrueor alleged untrue statement or omission or alleged omission; and (ii) no SellingStockholders shall be required to 31contribute any amount in excess of the aggregate net proceeds of the sale ofShares received by the Selling Stockholders. No person guilty of fraudulentmisrepresentation (within the meaning of Section 11(f) of the Securities Act)shall be entitled to contribution from any person who was not guilty of suchfraudulent misrepresentation. For purposes of this Section 7, each person, ifany, who controls an Underwriter within the meaning of Section 15 of theSecurities Act or Section 20 of the Exchange Act shall have the same rights tocontribution as such Underwriter, and each director of the Company including anyperson who, with his or her consent, is named in the Registration Statement asabout to become a director of the Company, each officer of the Company whosigned the Registration Statement, and each person, if any, who controls theCompany or any Selling Stockholders within the meaning of the Section 15 of theSecurities Act or Section 20 of the Exchange Act, shall have the same rights tocontribution as the Company or any/the Selling Stockholders, as the case may be.Any party entitled to contribution will, promptly after receipt of notice ofcommencement of any action, suit or proceeding against such party in respect ofwhich a claim for contribution may be made against another party or partiesunder this Section 7, notify such party or parties from whom contribution may besought, but the omission so to notify such party or parties from whomcontribution may be sought shall not relieve the party or parties from whomcontribution may be sought from any other obligation it or they may havehereunder or otherwise than under this Section 7. No party shall be liable forcontribution with respect to any action, suit, proceeding or claim settledwithout its written consent. The Underwriter’s obligations to contributepursuant to this Section 7 are several in proportion to their respectiveunderwriting commitments and not joint. 8. Termination. (a) This Agreement may be terminated with respect to the Shares to be purchased on a Closing Date by the Representatives by notifying the Company and the Selling Stockholders at any time at or before a Closing Date in the absolute discretion of the Representatives if: (i) there has occurred any material adverse change in the securities markets or any event, act or occurrence that has materially disrupted, or in the opinion of the Representatives, will in the future materially disrupt, the securities markets or there shall be such a material adverse change in general financial, political or economic conditions or the effect of international conditions on the financial markets in the United States is such as to make it, in the judgment of the Representatives, inadvisable or impracticable to market the Shares or enforce contracts for the sale of the Shares; (ii) there has occurred any outbreak or material escalation of hostilities or other calamity or crisis the effect of which on the financial markets of the United States is such as to make it, in the judgment of the Representatives, inadvisable or impracticable to market the Shares or enforce contracts for the sale of the Shares; (iii) trading in the Shares or any securities of the Company has been suspended or materially limited by the Commission or trading generally on the New York Stock Exchange, Inc., the American Stock Exchange, Inc. or the Nasdaq National Market has been suspended or materially limited, or minimum or maximum ranges for prices for securities shall have been fixed, or maximum ranges for prices for securities have been required, by any of said exchanges or by such system or by order of the Commission, the National Association of Securities Dealers, Inc., or any other governmental or regulatory authority; or (iv) a banking moratorium has been declared by any state or Federal authority; or (v) in the judgment of the Representatives, there has been, since the time of execution of this Agreement or 32 since the respective dates as of which information is given in the Prospectus, any material adverse change in the assets, properties, condition, financial or otherwise, or in the results of operations, business affairs or business prospects of the Company, whether or not arising in the ordinary course of business. (b) If this Agreement is terminated pursuant to any of its provisions, neither the Company nor the Selling Stockholders shall be under any liability to any Underwriter, and no Underwriter shall be under any liability to the Company or a Selling Stockholders, except that (y) if this Agreement is terminated by the Representatives or the Underwriters because of any failure, refusal or inability on the part of the Company or the Selling Stockholders to comply with the terms or to fulfill any of the conditions of this Agreement, the Company will reimburse the Underwriters for all out-of-pocket expenses (including the reasonable fees and disbursements of their counsel) incurred by them in connection with the proposed purchase and sale of the Shares or in contemplation of performing their obligations hereunder and (z) no Underwriter who shall have failed or refused to purchase the Shares agreed to be purchased by it under this Agreement, without some reason sufficient hereunder to justify cancellation or termination of its obligations under this Agreement, shall be relieved of liability to the Company, the Selling Stockholders or to the other Underwriters for damages occasioned by its failure or refusal. 9. Substitution of Underwriters. If any Underwriter shall default inits obligation to purchase on any Closing Date the Shares agreed to be purchasedhereunder on such Closing Date, the Representatives shall have the right, within36 hours thereafter, to make arrangements for one or more of the non-defaultingUnderwriters, or any other underwriters, to purchase such Shares on the termscontained herein. If, however, the Representatives shall not have completed sucharrangements within such 36-hour period, then the Company shall be entitled to afurther period of thirty-six hours within which to procure another party orother parties satisfactory to the Underwriters to purchase such Shares on suchterms. If, after giving effect to any arrangements for the purchase of theShares of a defaulting Underwriter or Underwriters by the Representatives andthe Company as provided above, the aggregate number of Shares which remainsunpurchased on such Closing Date does not exceed one-eleventh of the aggregatenumber of all the Shares that all the Underwriters are obligated to purchase onsuch date, then the Company shall have the right to require each non-defaultingUnderwriter to purchase the number of Shares which such Underwriter agreed topurchase hereunder at such date and, in addition, to require each non-defaultingUnderwriter to purchase its pro rata share (based on the number of Shares whichsuch Underwriter agreed to purchase hereunder) of the Shares of such defaultingUnderwriter or Underwriters for which such arrangements have not been made; butnothing herein shall relieve a defaulting Underwriter from liability for itsdefault. In any such case, either the Representatives or the Company and theSelling Stockholders shall have the right to postpone the applicable ClosingDate for a period of not more than seven days in order to effect any necessarychanges and arrangements (including any necessary amendments or supplements tothe Registration Statement or Prospectus or any other documents), and theCompany agrees to file promptly any amendments to the Registration Statement orthe Prospectus which in the opinion of the Company and the Underwriters andtheir counsel may thereby be made necessary. 33 If, after giving effect to any arrangements for the purchase of theShares of a defaulting Underwriter or Underwriters by the Representatives andthe Company as provided above, the aggregate number of such Shares which remainsunpurchased exceeds 10% of the aggregate number of all the Shares to bepurchased at such date, then this Agreement, or, with respect to a Closing Datewhich occurs after the First Closing Date, the obligations of the Underwritersto purchase and of the Company or the Selling Stockholders, as the case may be,to sell the Option Shares to be purchased and sold on such date, shallterminate, without liability on the part of any non-defaulting Underwriter tothe Company or the Selling Stockholders, and without liability on the part ofthe Company or the Selling Stockholders, except as provided in Sections 5(b), 6,7 and 8. The provisions of this Section 9 shall not in any way affect theliability of any defaulting Underwriter to the Company or the non-defaultingUnderwriters arising out of such default. The term “Underwriter” as used in thisAgreement shall include any person substituted under this Section 9 with likeeffect as if such person had originally been a party to this Agreement withrespect to such Shares. 10. Miscellaneous. The respective agreements, representations,warranties, indemnities and other statements of the Company, SellingStockholders and the several Underwriters, as set forth in this Agreement ormade by or on behalf of them pursuant to this Agreement, shall remain in fullforce and effect, regardless of any investigation (or any statement as to theresults thereof) made by or on behalf of any Underwriter or the Company or theSelling Stockholders or any of their respective officers, directors orcontrolling persons referred to in Sections 6 and 7 hereof, and shall survivedelivery of and payment for the Shares. In addition, the provisions of Sections5(b), 6, 7, 8 and this Section 10 shall survive the termination or cancellationof this Agreement. This Agreement has been and is made for the benefit of theUnderwriters, the Company and the Selling Stockholders and their respectivesuccessors and assigns, and, to the extent expressed herein, for the benefit ofpersons controlling any of the Underwriters, or the Company, and directors andofficers of the Company, and their respective successors and assigns, and noother person shall acquire or have any right under or by virtue of thisAgreement. The term “successors and assigns” shall not include any purchaser ofShares from any Underwriter merely because of such purchase. All notices and communications hereunder shall be in writing and mailed ordelivered or by telephone or telegraph if subsequently confirmed in writing, (a)if to the Representatives, c/o CIBC World Markets Corp., 300 Madison Avenue NewYork, New York 10017 Attention: ________, with a copy to Richard C. Tilghman,Esq., DLA Piper Rudnick Gray Cary US LLP, 6225 Smith Avenue, Baltimore, MD 21209and (b) if to the Company, to its agent for service as such agent’s addressappears on the cover page of the Registration Statement with a copy to WilliamF. Schwitter, Esq., Paul, Hastings, Janofsky & Walker LLP, 75 East 55th Street,New York, NY 10022 and (c) if to the Selling Stockholders to __________ with acopy to __________. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITHTHE LAWS OF THE STATE OF NEW YORK. 34 This Agreement may be signed in any number of counterparts, each ofwhich shall be an original, with the same effect as if the signatures theretoand hereto were upon the same instrument. Please confirm that the foregoing correctly sets forth the agreementamong us. Very truly yours, CITI TRENDS, INC. By: ____________________________________ Name: Title: SELLING STOCKHOLDERS By: ____________________________________ Name: Title: Custodian 35Confirmed:CIBC WORLD MARKETS CORP.WACHOVIA CAPITAL MARKETS, LLCSG COWEN & CO., LLCPIPER JAFFRAY & CO.________________________________________Acting severally on behalf of itselfand as representative of the severalUnderwriters named in Schedule I annexedhereto.CIBC WORLD MARKETS CORP.By _____________________________________ Name: Title:WACHOVIA CAPITAL MARKETS, LLCBy _____________________________________ Name: Title:SG COWEN & CO., LLCBy _____________________________________ Name: Title:PIPER JAFFRAY & CO.By _____________________________________ Name: Title: 36 SCHEDULE I

Number of Firm Shares to BeName Purchased- —- ———– CIBC World Markets Corp………………………………………………………Wachovia Capital Markets, LLC…………………………………………………SG Cowen & Co., LLC………………………………………………………….Piper Jaffray & Co………………………………………………………….. ———– Total

Sch I – 1 SCHEDULE II

Number of Firm Shares toName of Selling Stockholders Be Sold- —————————- ——— Total ———

Sch II – 1 SCHEDULE III Lock-up Signatories Sch III – 1 Exhibit A FORM OF LOCK-UP AGREEMENT _______________, 2005CIBC World Markets Corp.Wachovia Capital Markets, LLCSG Cowen & Co., LLCPiper Jaffray & Co. as Representatives of the several Underwriters named in Schedule I to the Underwriting Agreementc/o CIBC World Markets Corp.417 5th Avenue, 2nd FloorNew York, New York 10016 Re: Public Offering of Citi Trends, Inc.Ladies and Gentlemen: The undersigned, a holder of common stock, par value $0.01 (“CommonStock”), or rights to acquire Common Stock, of Citi Trends, Inc. (the “Company”)understands that you, as Representative of the several Underwriters, propose toenter into an Underwriting Agreement (the “Underwriting Agreement”) with theCompany, providing for the public offering (the “Public Offering”) by theseveral Underwriters named in Schedule I to the Underwriting Agreement (the”Underwriters”), of shares of Common Stock of the Company (the “Securities”).Capitalized terms used herein and not otherwise defined shall have the meaningsset forth in the Underwriting Agreement. In consideration of the Underwriters’ agreement to enter into theUnderwriting Agreement and to proceed with the Public Offering of theSecurities, and for other good and valuable consideration receipt of which ishereby acknowledged, the undersigned hereby agrees for the benefit of theCompany, you and the other Underwriters that, without the prior written consentof CIBC World Markets Corp. on behalf of the Underwriters, the undersigned willnot, during the period ending 180 days (the “Lock-Up Period”) after the date ofthe prospectus relating to the Public Offering (the “Prospectus”), directly orindirectly (1) offer, pledge, assign, encumber, announce the intention to sell,sell, contract to sell, sell any option or contract to purchase, purchase anyoption or contract to sell, grant any option, right or warrant to purchase, orotherwise transfer or dispose of, any shares of Common Stock or any securitiesconvertible into or exercisable or exchangeable for Common Stock owned either ofrecord or beneficially (as defined in the Securities Exchange Act of 1934, asamended) by the undersigned on the date hereof or hereafter acquired or (2)enter into any swap or other agreement that transfers, in whole or in part, anyof the economic consequences of ownership of the Common Stock, whether any A-1such transaction described in clause (1) or (2) above is to be settled bydelivery of Common Stock or such other securities, in cash or otherwise, orpublicly announce an intention to do any of the foregoing. In addition, theundersigned agrees that, without the prior written consent of CIBC World MarketsCorp. on behalf of the Underwriters, it will not, during the period ending 180days after the date of the Prospectus, make any demand for or exercise any rightwith respect to, the registration of any shares of Common Stock or any securityconvertible into or exercisable or exchangeable for Common Stock. The foregoingshall not apply to (x) Common Stock to be transferred as a gift or gifts(provided that any donee thereof agrees in writing to be bound by the termshereof), (y) the sale of the Securities to be sold pursuant to the Prospectusand (y) sales under any 10b-5 plan. Notwithstanding the foregoing, if (x) during the last 17 days of theLock-Up Period the Company issues an earnings release or material news or amaterial event relating to the Company occurs; or (y) prior to the expiration ofthe Lock-Up Period, the Company announces that it will release earnings resultsduring the 16-day period beginning on the last day of the 90-day period; therestrictions imposed in this Letter Agreement shall continue to apply until theexpiration of the 18-day period beginning on the issuance of the earningsrelease or the occurrence of the material news or material event; provided,however, that this sentence shall not apply if the research published ordistributed on the Company is compliant under Rule 139 of the Securities Act andthe Company’s securities are actively traded as defined in Rule 101(c)(1) ofRegulation M of the Exchange Act. In furtherance of the foregoing, the Company, and any duly appointedtransfer agent for the registration or transfer of the securities describedherein, are hereby authorized to decline to make any transfer of securities ifsuch transfer would constitute a violation or breach of this Letter Agreement. The undersigned hereby represents and warrants that the undersigned hasfull power and authority to enter into this Letter Agreement. All authorityherein conferred or agreed to be conferred and any obligations of theundersigned shall be binding upon the successors, assigns, heirs or personalrepresentatives of the undersigned. The undersigned understands that, if the Underwriting Agreement does notbecome effective, or if the Underwriting Agreement (other than the provisionsthereof which survive termination) shall terminate or be terminated prior topayment for and delivery of the Common Stock to be sold thereunder, theundersigned shall be released form all obligations under this Letter Agreement. The undersigned, whether or not participating in the Offering, understandsthat the Underwriters are entering into the Underwriting Agreement andproceeding with the Public Offering in reliance upon this Letter Agreement. A – 2 This lock-up agreement shall be governed by and construed in accordancewith the laws of the State of New York, without regard to the conflict of lawsprinciples thereof. Very truly yours, [STOCKHOLDER] By: ____________________________________ Name: Title: A – 3 Exhibit B FORM OF CUSTODY AGREEMENT for sale of shares of common stock, par value $0.01 per share, of Citi Trends, Inc.Citi Trends, Inc. (the “Custodian”)102 Fahm StreetSavannah, GA 31401Attention: Mr. Thomas W. StoltzLadies and Gentlemen: There are delivered to you herewith certificate(s) representing shares ofCommon Stock, par value $0.01 per share (“Common Stock”), of Citi Trends, Inc.,a Delaware corporation (the “Company”) as set forth at the end of this letter onthe page entitled “CERTIFICATE(S) DEPOSITED.” Each of the certificates sodelivered is accompanied by an executed assignment form duly endorsed fortransfer and is in negotiable form bearing the signature of the undersignedguaranteed by a commercial bank or trust company having an office or acorrespondent in New York City, New York or by a member firm of the New York,American or Pacific Stock Exchange. The certificate(s) are to be held by you asCustodian for the account of the undersigned and are to be disposed of by you inaccordance with this Custody Agreement (this “Custody Agreement”). If the undersigned is (i) acting as trustee or in any fiduciary orrepresentative capacity, the undersigned has also delivered duly certifiedcopies of each trust agreement, will, letters testamentary or other instrumentpursuant to which the undersigned is authorized to act as a Selling Stockholder(as defined herein); (ii) a corporation, the undersigned has also delivered dulycertified resolutions of its board of directors authorizing it to enter intothis Custody Agreement, the Underwriting Agreement (as defined herein) and thePower of Attorney (as defined herein) and duly certified copies of suchcorporation’s by-laws, certificate of incorporation or other organizationaldocuments; or (iii) a partnership, the undersigned has also delivered extractsof any applicable provisions of its partnership agreement (and applicableprovisions of the organizational documents or partnership agreement(s) of thegeneral partner(s) of such partnership) authorizing such partnership to enterinto this Custody Agreement, the Underwriting Agreement and the Power ofAttorney. The undersigned agrees to deliver such additional documentation as you,the Attorneys (as defined herein), the Company or the Representatives (asdefined herein) or any of their respective counsel may reasonably request toeffectuate or confirm compliance with any of the provisions hereof or of thePower of Attorney or the Underwriting Agreement, all of the foregoing to be inform and substance satisfactory in all respects to the party requesting suchdocumentation. B – 1 Concurrently with the execution and delivery of this Custody Agreement,the undersigned has executed a power of attorney (the “Power of Attorney”)irrevocably appointing R. Edward Anderson and Thomas W. Stoltz, each with fullpower and authority to act alone in any matter thereunder and with full power ofsubstitution, the true and lawful attorneys-in-fact of the undersigned(individually, an “Attorney,” and collectively, the “Attorneys”), with fullpower and authority in the name of, for and on behalf of, the undersigned withrespect to all matters arising in connection with the sale of the Common Stockby the undersigned including, but not limited to entering into and performing anunderwriting agreement (the “Underwriting Agreement”) among the Company, certainstockholders of the Company including the undersigned (the “SellingStockholders”), CIBC World Markets Corp., Wachovia Capital Markets, LLC, SGCowen & Co., LLC and Piper Jaffray & Co., as representatives (the”Representatives”) of the several underwriters to be named in Schedule I to theUnderwriting Agreement (the “Underwriters”). The total number of shares ofCommon Stock to be sold by the undersigned to the Underwriters and set forthopposite the name of the undersigned in Schedule II to the UnderwritingAgreement is hereinafter referred to as the “Shares.” You are authorized and directed to hold the certificate(s) deposited withyou hereunder in your custody and, subject to the instructions of the Attorneys,(i) to take all necessary action to cause the Shares to be transferred on thebooks of the Company into such names as the Representatives, on behalf of theseveral Underwriters, shall have instructed, including surrendering thecertificate(s) representing the Shares to the transfer agent for the CommonStock for cancellation, in exchange for new certificate(s) for shares of CommonStock registered in such names and in such denominations as the Representativesshall have instructed; (ii) to deliver such new certificate(s) to theRepresentatives, for the accounts of the several Underwriters, against paymentfor such Shares at the purchase price per Share specified in the UnderwritingAgreement and to give receipt for such payment; (iii) to deposit the same toyour account as Custodian and draw upon such account to pay such transfer taxes,if any, payable in connection with the transfer of the Shares to theUnderwriters (“Transfer Taxes”) as you may be instructed to pay by theAttorneys; (iv) to transmit to the undersigned in the manner set forth under”Manner of Payment” below, within 24 hours of receiving instructions from theAttorneys to do so, the excess, if any (the “Net Proceeds”), of the amountreceived by you as payment for the Shares over the Transfer Taxes, if any. Theamount of such Net Proceeds is to be paid in the manner requested by theundersigned at the end of this Custody Agreement or in such manner as you, inaccordance with the terms hereof, shall deem appropriate. Upon receipt ofinstructions from the Attorneys, you shall also return to the undersigned, newcertificate(s) representing the excess, if any, of the number of shares ofCommon Stock represented by the certificate(s) deposited with you hereunder overthe number of Shares sold by the undersigned to the Underwriters. Under the terms of the Power of Attorney, the authority conferred therebyis granted and conferred subject to and in consideration of the interests of theAttorneys, the several Underwriters, the Company and the other SellingStockholders (as defined in the Underwriting Agreement) and is irrevocable andnot subject to withdrawal or termination by any act of the undersigned or byoperation of law, whether by the death or incapacity of the undersigned (oreither or any of the undersigned) or by the occurrence of any other event orevents (including, without limitation, the termination of any trust or estatefor which the undersigned is acting as B – 2fiduciary or fiduciaries, the death or incapacity of one or more trustees,guardians, executors or administrators under such trust or estate or the merger,consolidation, dissolution or liquidation of any corporation or partnership)(any of the foregoing being hereinafter referred to as an “Event”). Accordingly,the certificate(s) deposited with you hereunder and this Custody Agreement andyour authority hereunder are subject to and in consideration of the interests ofthe several Underwriters, the Company, the Attorneys and the other SellingStockholders, and this Custody Agreement and your authority hereunder, prior to[outside date, 2005] are irrevocable and are not subject to withdrawal ortermination by the occurrence of any Event. If an Event shall occur after theexecution hereof but before the delivery of the Shares to the Underwriters, thencertificate(s) representing such Shares will be delivered by you to theUnderwriters on behalf of the undersigned in accordance with the terms andconditions of the Underwriting Agreement and this Custody Agreement and anyactions taken by you pursuant to this Custody Agreement shall be as valid as ifsuch Event had not occurred, regardless of whether or not you, the Attorneys,the Underwriters or any one of them, shall have received notice of such Event. Notwithstanding any of the foregoing provisions, if the UnderwritingAgreement shall not have been executed and delivered prior to [outside date,2005], then, upon the written request of the undersigned to you (accompanied bywritten notice of termination of the Power of Attorney addressed to each of theAttorneys) on or after that date, you are to return to the undersigned, allcertificate(s), together with any stock powers, delivered herewith. Until payment of the purchase price for the Shares has been made to you byor for the account of the several Underwriters, the undersigned shall remain theowner of all shares of Common Stock represented by the certificate(s) depositedwith you hereunder and shall have the right to vote such shares and all othersecurities, if any, represented by such certificate(s) and to receive alldividends and distributions thereon, except the right to retain custody anddispose of such shares, which is subject to the rights of the Custodian underthis Custody Agreement, the Attorneys under the Power of Attorney and theUnderwriters under the Underwriting Agreement. The Underwriters shall notacquire the power or the right to direct the investment of the Shares by virtueof this Custody Agreement until the consideration therefor is paid pursuant tothe Underwriting Agreement. You shall be entitled to act and rely upon any statement, request, noticeor instruction respecting this Custody Agreement given to you by the Attorneys,or any one of them. Any Attorney has the authority to instruct you onirregularities or discrepancies in the certificates representing shares ofCommon Stock and any accompanying documents. In taking any action requested or directed by the Representatives underthe terms of this Custody Agreement, you will be entitled to rely upon a writingsigned by a Vice President, Senior Vice President, Managing Director, Counsel,Assistant General Counsel or General Counsel of CIBC World Markets Corp. It is understood that you assume no responsibility or liability to anyperson other than to deal with the certificate(s) deposited with you hereunderand the proceeds from the sale of all or a portion of the securities representedthereby in accordance with the provisions of this Custody Agreement. Theundersigned agrees to indemnify you for and to hold you free from and B – 3harmless against any and all loss, claim, damage, liability or expense incurredby you arising out of or in connection with acting as Custodian hereunder, aswell as the cost and expense of defending against any claim of liabilityhereunder, which is not due to your own gross negligence or willful misconduct. The representations and warranties of the undersigned set forth in theUnderwriting Agreement are hereby incorporated by reference herein and theundersigned represents and warrants that such representations and warranties aretrue and correct on the date hereof as if made on the date hereof. Therepresentations, warranties and agreements contained herein, as well as thosecontained in the Underwriting Agreement, are made for the benefit of, and may berelied upon by, you, the other Selling Stockholders, the Attorneys, the Company,[Company counsel], the Underwriters and DLA Piper Rudnick Gray Cary US LLP andtheir representatives, agents and counsel. These representations, warranties andagreements shall remain operative and in full force and effect, and shallsurvive delivery of and payment for the Shares, regardless of (i) anyinvestigation, or statement as to the results thereof, made by or on behalf ofany of the persons listed in the preceding sentence, (ii) acceptance of theShares and payment for them under the Underwriting Agreement and (iii)termination of this Custody Agreement. This Custody Agreement shall be binding upon the undersigned and theheirs, legal representatives, distributees, successors and assigns of theundersigned. This Custody Agreement may be signed in counterparts which together shallconstitute one and the same agreement. This Custody Agreement shall be governed by the laws of the State of NewYork. Please acknowledge your acceptance hereof as Custodian, and receipt of thecertificate(s) deposited with you hereunder, by executing and returning theenclosed copy hereof to the undersigned in care of R. Edward Anderson and ThomasW. Stoltz.Dated:______________, 2005 Very truly yours, By:_________________________________________ Name: Title: B – 4Print Name(s) and Address of SellingStockholder(s) and Name and Title ofany Person Signing as Agent orFiduciary:____________________________________________________________________________________________________________________________________________Taxpayer I.D.: ____________________Telephone: ____________________ B – 5Instruction: If you are an individual and are married, your spouse is requiredto complete this form: SPOUSAL CONSENT I am the spouse of ____________. On behalf of myself, my heirs andlegatees, I hereby join in and consent to the terms of the foregoing CustodyAgreement and agree to the sale of the shares of Common Stock of_______________, registered in the name of my spouse or otherwise registered,which my spouse proposes to sell pursuant to the Underwriting Agreement (asdefined therein). Dated_____________, 2005 ___________________________________________ (Signature of Spouse) B – 6Instruction: Complete each column as to certificate(s) to be deposited with theCustodian. CERTIFICATE(S) DEPOSITED

Stock Maximum Number of Shares Certificate of Common Stock To Be Sold No. from Certificate TOTAL: ————————-

B – 7Instruction: Indicate how you wish to receive payment for the shares of CommonStock sold to the Underwriters. Please note that if you are selling shares ofCommon Stock registered in the name of a corporation or other association or atrust, payment will be made only to the corporation or other association ortrust. A wire transfer can be made only to an account standing in exactly thesame name as the person or entity, including the corporation or otherassociation or trust, that is the registered owner of the Common Stock beingsold. MANNER OF PAYMENT I request that payment of the net proceeds from the sale of the shares ofCommon Stock of the Company to be sold by me pursuant to the UnderwritingAgreement be made in the following manner (CHECK ONE):[ ] CHECK made payable to: to be sent to the following address:____________________________________________________________________________________ Phone: ( ) _________________________ Please send by (check one): [ ] First class mail [ ] Federal Express Federal Express account number ________________________________ [ ] or transfer to the following account: Account No. Bank _____________________________ See attached wire transfer instructions (name) ____________________________________ (address) ABA No._____________________________ Phone:( )___________________________[ ] Other (please specify)__________________________________________ B – 8 CUSTODIAN’S ACKNOWLEDGMENT AND RECEIPT Citi Trends, Inc., as Custodian, acknowledges acceptance of the duties ofthe Custodian under the foregoing Custody Agreement and receipt of thecertificate(s) referred therein.Dated: ______________, 2005 CITI TRENDS, INC. By: _________________________________________ Name: Title: DO NOT DETACH FROM CUSTODY AGREEMENT B – 9 Exhibit C SELLING STOCKHOLDERS’ IRREVOCABLE POWER OF ATTORNEY for sale of shares of common stock, par value $0.01 per share, of Citi Trends, Inc.R. Edward AndersonThomas W. Stoltzc/o Citi Trends, Inc.102 Fahm StreetSavannah, GA 31401Ladies and Gentlemen: The undersigned stockholder and certain other holders of commonstock of Citi Trends, Inc. (the “Company”) (such holders and the undersignedbeing hereinafter sometimes collectively referred to as the “SellingStockholders”), propose to enter into an Underwriting Agreement (the”Underwriting Agreement”) with the Company, CIBC World Markets Corp., WachoviaCapital Markets, LLC, SG Cowen & Co., LLC and Piper Jaffray & Co., asrepresentatives (the “Representatives”) of the several underwriters to be namedin Schedule I to the Underwriting Agreement (the “Underwriters”). The SellingStockholders propose to sell to the Underwriters pursuant to the UnderwritingAgreement certain authorized and issued shares of the common stock, par value$0.01 per share, of the Company (the “Common Stock”) owned by them. It isunderstood that at this time there is no commitment on the part of theUnderwriters to purchase any shares of Common Stock and no assurance that theUnderwriting Agreement will be entered into by the Company or the Underwriters. The undersigned hereby irrevocably constitutes and appoints R.Edward Anderson and Thomas W. Stoltz each with full power and authority to actalone in any matter hereunder and with full power of substitution, the true andlawful attorneys-in-fact of the undersigned (individually an “Attorney,” andcollectively the “Attorneys”), with full power and authority in the name of, forand on behalf of, the undersigned with respect to all matters arising inconnection with the sale of Common Stock by the undersigned including, but notlimited to, the power and authority on behalf of the undersigned to take any andall of the following actions: 1. To sell, assign, transfer and deliver to the severalUnderwritersup to the number of shares of Common Stock set forth on thesignature page hereof such shares of Common Stock to be represented bycertificate(s) deposited by the undersigned pursuant to the Custody Agreement(the “Custody Agreement”) between the undersigned and Citi Trends, Inc., asCustodian (the “Custodian”), at a purchase price per share, after deductingunderwriting discounts and commissions, to be paid by the Underwriters, as theAttorneys, in their sole discretion, shall determine, but at the same price pershare at which the Company and all otherSelling Stockholders (as defined in the Underwriting Agreement) sell CommonStock to the Underwriters; 2. To determine the number of shares of Common Stock to be sold bythe undersigned to the Underwriters, which numbers shall be no greater but maybe fewer than the corresponding numbers set forth on the signature page hereof(such total number of shares of Common Stock as is finally determined by theAttorneys and set forth opposite the name of the undersigned in Schedule II tothe Underwriting Agreement is hereinafter referred to as the “Shares”); 3. To execute, deliver and perform the Underwriting Agreement incustomary form with such customary representations, warranties and covenant asthe Attorneys, in their sole discretion, may deem appropriate, with full powerto make such amendments to the Underwriting Agreement as the Attorneys, in theirsole discretion, may deem advisable; 4. On behalf of the undersigned, to make the representations andwarranties and enter into the agreements contained in the Underwriting Agreement(including, without limitation, entering into the “lock-up” agreements); 5. (a) To instruct the Custodian on all matters pertaining to thesale of the Shares and the delivery of certificates therefor, including: (i) thetransfer of the Shares on the books of the Company in order to effect the saleof the Shares (including designating the name or names in which newcertificate(s) for Shares are to be issued and the denominations thereof), (ii)the delivery to or for the account of the Underwriters of the certificate(s) forthe Shares against receipt by the Custodian of the purchase price to be paidtherefor, (iii) the payment, out of the proceeds (net of underwriting discountsand commissions) from the sale of the Shares by the undersigned to theUnderwriters, of any expense incurred in accordance with paragraph 6 which isnot payable by the Company and any transfer taxes payable in connection with thetransfer of the Shares to the Underwriters (“Transfer Taxes”) and (iv) thetransmission to the undersigned of the proceeds, if any, from the sale of theShares (after deducting all amounts payable by the undersigned pursuant toclause (iii) above) and the return to the undersigned, of new certificate(s)representing the excess, if any, of the number of shares of Common Stockrepresented by certificate(s) deposited with the Custodian over the number ofShares sold to the Underwriters; and (b) to amend the Custody Agreement and anyrelated documents in such manner as the Attorneys may determine to be notmaterially adverse to the undersigned. 6. To incur or authorize the incurrence of any necessary orappropriate expense in connection with the sale of the Shares and to determinethe amount of any Transfer Taxes; 7. To take any and all steps deemed necessary or desirable by theAttorneys in connection with the registration of the Shares under the SecuritiesAct of 1933, as amended (the “Act”), the Securities Exchange Act of 1934, asamended, and the securities or blue sky laws of various states andjurisdictions, including, without limitation, the giving, making or filing ofsuch undertakings, consents to service of process and representations andagreements and the taking of such other steps as the Attorneys may deemnecessary or desirable; 8. To retain legal counsel to represent the undersigned inconnection with any and all matters referred to herein (which counsel may, butneed not be, counsel for the Company); 9. To make, execute, acknowledge and deliver all such othercontracts, stock powers, orders, receipts, notices, instructions, certificates,letters and other writings, including, without limitation, communications withthe Securities and Exchange Commission state securities commissions and theNational Association of Securities Dealers, Inc. (“NASD”), and in general to doall things and to take all actions which the Attorneys, in their solediscretion, may consider necessary or desirable in connection with the sale ofShares to the Underwriters and the public offering thereof, as fully as couldthe undersigned if personally present and acting; 10. If necessary, to endorse (in blank or otherwise) on behalf ofthe undersigned the certificate(s) representing the Shares, or a stock power orpowers attached to such certificate(s); and 11. To sign such other certificates, documents and agreements andtake any and all other actions as the Attorneys may deem necessary or desirablein connection with the consummation of the transactions contemplated by theUnderwriting Agreement, the Custody Agreement and this Power of Attorney. Each Attorney may act alone in exercising the rights and powersconferred on the Attorneys in this Power of Attorney, and the act of anyAttorney shall be the act of the Attorneys. Each Attorney is hereby empowered todetermine in his or her sole discretion the time or times when, the purpose forand the manner in which any power herein conferred upon him or her shall beexercised, and the conditions, provisions or covenants of any instrument ordocument which may be executed by him or her pursuant hereto. The undersigned acknowledges receipt of a copy of the RegistrationStatement on Form S-1 (the “Registration Statement”) relating to the offering ofthe Shares and the other shares of Common Stock (together, the “Offered Shares”)to be sold by the Selling Stockholders and a copy of the draft form of theUnderwriting Agreement dated_________, 2005. The undersigned has reviewed theRegistration Statement and the form of the Underwriting Agreement andunderstands the obligations and agreements of the undersigned set forth in theUnderwriting Agreement. All representations and warranties of the SellingStockholders in the Underwriting Agreement with respect to the undersigned willbe as of the date of the execution of the Underwriting Agreement, the ClosingDates (as determined in accordance with the Underwriting Agreement), true andcorrect. All such representations and warranties will, as provided in theUnderwriting Agreement, survive the termination of the Underwriting Agreementand the delivery of and payment for the Shares. Upon the execution and delivery of the Underwriting Agreement by theAttorneys on behalf of the Selling Stockholders, the undersigned agrees to bebound by and to perform each and every covenant and agreement contained thereinof the undersigned as a Selling Stockholders. The undersigned agrees, if so requested, to provide an opinion ofcounsel, addressed to Paul, Hastings, Janofsky & Walker LLP, which opinion shallexpressly permit reliance thereon by such counsel, setting forth such matters assuch counsel may reasonably request in rendering its opinion pursuant to theUnderwriting Agreement and such other documentation as the Attorneys, theCompany, the Representatives or any of their respective counsel may request toeffectuate any of the provisions hereof or of the Underwriting Agreement, all ofthe foregoing to be in form and substance satisfactory in all respects to theparty requesting such documentation. This Power of Attorney and all authority conferred hereby aregranted and conferred subject to and in consideration of the interests of theAttorneys, the several Underwriters, the Company and the other SellingStockholders who may become parties to the Underwriting Agreement, and for thepurposes of completing the transactions contemplated by the UnderwritingAgreement and this Power of Attorney. This Power of Attorney is an agency coupled with an interest and allauthority conferred hereby shall be irrevocable, and shall not be withdrawn orterminated by any act of the undersigned or by operation of law, whether by thedeath or incapacity of the undersigned (or either or any of the undersigned) orby the occurrence of any other event or events (including, without limitation,the termination of any trust or estate for which the undersigned is acting as afiduciary or fiduciaries, the death or incapacity of one or more trustees,guardians, executors or administrators under such trust or estate or the merger,consolidation, dissolution or liquidation of any corporation or partnership)(any of the foregoing being hereinafter referred to as an “Event”). If an Eventshall occur after the execution hereof but before completion of the transactionscontemplated by the Underwriting Agreement or this Power of Attorney, thencertificate(s) representing the Shares will be delivered to the Underwriters byor on behalf of the undersigned in accordance with the terms and conditions ofthe Underwriting Agreement and the Custody Agreement and any actions takenhereunder by the Attorneys shall be as valid as if such Event had not occurredregardless of whether or not the Custodian, the Attorneys, the Underwriters, orany one of them, shall have received notice of such Event. Notwithstanding any of the foregoing provisions, if the UnderwritingAgreement shall not have been executed and delivered prior to [outside date],2005 then, upon the written notice of the undersigned on or after that date tothe Attorneys, this Power of Attorney shall terminate subject, however, to alllawful action done or performed pursuant hereto prior to the receipt of actualnotice. It is understood that the Attorneys assume no responsibility orliability to any person other than to deal with the certificate(s) for shares ofCommon Stock deposited with the Custodian pursuant to the Custody Agreement andthe proceeds from the sale of the Shares in accordance with the provisionshereof. The Attorneys make no representations with respect to and shall have noresponsibility for the Registration Statement or the Prospectus nor, except asherein expressly provided, for any aspect of the offering of Common Stock, andthe Attorneys shall not be liable for any error of judgment or for any act doneor omitted or for any mistake of fact or law except for the Attorneys’ own grossnegligence or willful misconduct. Theundersigned agrees to indemnify the Attorneys for and to hold the Attorneys,jointly and severally, free from and harmless against any and all loss, claim,damage, liability or expense incurred by or on behalf of the Attorneys, or anyof them, arising out of or in connection with acting as Attorneys under thisPower of Attorney, as well as the cost and expense of defending against anyclaim of liability hereunder, which is not due to the Attorneys’ own grossnegligence or willful misconduct. The undersigned agrees that the Attorneys mayconsult with counsel of their choice (which may but need not be counsel for theCompany) and the Attorneys shall have full and complete authorization andprotection for any action taken or suffered by the Attorneys, or any of themhereunder, in good faith and in accordance with the opinion of such counsel. It is understood that the purchase price per share of Common Stockto be paid in connection with the offering contemplated by the Prospectus andthe Underwriting Agreement could be higher or lower than the price per share ofCommon Stock as of the date hereof. It is understood that the Attorneys shall serve entirely withoutcompensation. This Power of Attorney shall be binding upon the undersigned and theheirs, legal representatives, distributees, successors and assigns of theundersigned. This Power of Attorney shall be governed by the laws of the State ofNew York.Witness the due execution of the foregoing Power of Attorney as of the datewritten below.Maximum Number of Shares ofCommon Stock to be Sold by SellingStockholders(s):___________________________________ Very truly yours, By:_________________________________________ Name: Title:DATED:_____________, 2005Print Name and Address of SellingStockholder(s) and Name and Title of any PersonSigning as Agent or Fiduciary:__________________________________________________________________________________________________________________________________________________________________________________________________________________Telephone:( )______________________Facsimile:( )______________________ ACKNOWLEDGMENTState of ) ) ss.County of ) On this the _____ day of ________ 2005 before me personally appeared_____________________________ who acknowledged the signing of the foregoinginstrument and that the same is the free act and deed of such person (and ifsuch person is signing on behalf of a corporation, partnership or trust that thesame is the free act and deed of such corporation, partnership or trust and thatsuch person is duly authorized to sign the foregoing instrument). WITNESS my hand and official seal. Notary’s Signature