EXHIBIT 10.1
                                                                    ------------

                                                               EXECUTION VERSION


                                SECOND AMENDMENT
                                       TO
                    SUBORDINATION AND INTERCREDITOR AGREEMENT

         This SECOND AMENDMENT TO SUBORDINATION AND INTERCREDITOR AGREEMENT
(this "Second Amendment") is made as of September 26, 2007, by and among RONHOW,
LLC, a Georgia limited liability company, (the "Subordinated Creditor" or
"Subordinated Lender"), HAROLD'S STORES, INC., an Oklahoma corporation (the
"Parent"), HAROLD'S FINANCIAL CORPORATION, an Oklahoma corporation, HAROLD'S
DIRECT, INC., an Oklahoma corporation, HAROLD'S STORES OF TEXAS, L.P., a Texas
limited partnership, HAROLD'S OF JACKSON, INC., a Mississippi corporation, THE
CORNER PROPERTIES, INC., an Oklahoma corporation, HAROLD'S DBO, INC., a Texas
corporation, HAROLD'S LIMITED PARTNERS, INC., an Oklahoma corporation, and HSTX,
INC., a Texas corporation (each, individually, a "Guarantor" and collectively
the "Guarantors"), and WELLS FARGO RETAIL FINANCE II, LLC, as agent (the
"Agent") and lender (together with any other lenders under the Senior Loan
Agreement as defined below, collectively the "Lender"; the Agent, the Lender,
and their respective successors, transferees, and assigns, being herein
sometimes collectively referred to as the "Senior Creditor").

                                    RECITALS:

         WHEREAS, Parent, certain of the Guarantors, and Wells Fargo Retail
Finance II, LLC, as Agent and Lender, have entered into that certain Loan and
Security Agreement, dated as of February 5, 2003, as amended by Amendment No. 1
to Loan and Security Agreement, dated as of July 10, 2003, Amendment No. 2 to
Loan and Security Agreement, dated as of April 29, 2004, Amendment No. 3 to Loan
and Security Agreement, dated as of January 24, 2006, Amendment No. 4 to Loan
and Security Agreement, dated as of June 1, 2006, Amendment No. 5 to Loan and
Security Agreement, dated as of August 31, 2006, Amendment No. 6 to Loan and
Security Agreement, dated as of April 26, 2007, and Amendment No. 7 to Loan and
Security Agreement, dated as of the date hereof (as further amended, modified,
supplemented, extended or restated from time to time, the "Senior Loan
Agreement"), pursuant to which, among other things, the Lender has agreed,
subject to the terms and conditions set forth in the Senior Loan Agreement, to
make certain loans and financial accommodations to the Parent and certain of the
Guarantors, which loans and financial accommodations are secured by the Senior
Security Documents (as defined in the Subordination Agreement); and

         WHEREAS, the Subordinated Creditor and the Parent have entered into
that certain Subordinated Loan Agreement, dated as of August 31, 2006 (as
amended, restated, supplemented or otherwise modified from time to time,
"Subordinated Loan Agreement"), and the Guarantors have guaranteed the
obligations of the Parent thereunder in favor of the Subordinated Creditor
pursuant to the Subordinated Guaranty (as amended, restated, supplemented or
otherwise modified from time to time, "Subordinated Guaranty"). The Subordinated
Loan Agreement and the Subordinated Guaranty are secured by the Subordinated
Security Documents (as defined in the Subordination Agreement); and

<PAGE>

         WHEREAS, as an inducement to Lender to consent to the execution and
delivery of the Subordinated Loan Agreement, Subordinated Creditor agreed to
subordinate all obligations, liabilities and indebtedness of Parent to
Subordinated Creditor pursuant to that certain Subordination and Intercreditor
Agreement, dated as of August 31, 2006, as amended by that certain First
Amendment to Subordination and Intercreditor Agreement, dated as of April 26,
2007 (the "Subordination Agreement"); and

         WHEREAS, Parent, Guarantors, and Subordinated Creditor desire to amend
certain provisions of the Subordinated Loan Agreement, Subordinated Guaranty and
Subordinated Security Documents and to amend and restate in its entirety the
Subordinated Note (as defined in the Subordination Agreement) and Senior
Creditor gives its prior written consent to the same herein as required by
Section 3.2 of the Subordination Agreement; and

         WHEREAS, Parent, Guarantors, Senior Creditor and Subordinated Creditor
desire to amend certain provisions of the Subordination Agreement in connection
with the modifications to the Subordinated Loan Agreement, Subordinated Note,
Subordinated Guaranty and Subordinated Security Documents;

         NOW, THEREFORE, in consideration of the foregoing and the agreements
set forth in this Second Amendment, Parent, Guarantors, Senior Creditor and
Subordinated Creditor hereby agree as follows:

         SECTION 1. DEFINITIONS. Capitalized terms used herein and not otherwise
defined herein shall have the meanings ascribed to them in the Subordination
Agreement.

         SECTION 2. AMENDMENTS.

                  A. Section 1 of the Subordination Agreement is hereby amended
by adding the following definition, in the appropriate alphabetical order:

                           "LIMITED RECOURSE GUARANTY" means that certain
         Limited Recourse Guaranty and Security Agreement, dated as of September
         26, 2007, by and between Subordinated Creditor and Senior Creditor, as
         the same may be amended, modified, supplemented or restated from time
         to time.

                  B. Section 1 of the Subordination Agreement is hereby amended
by amending and restating the definitions of "Subordinated Debt", "Subordinated
Note", and "Permitted Subordinated Debt Payments" to read in their entirety as
follows:

                           "SUBORDINATED DEBT" shall mean all of the obligations
         of any Obligor to the Subordinated Creditor (a) evidenced by or
         incurred pursuant to the Subordinated Debt Documents (including,
         without limitation, each future advance made pursuant to such
         Subordinated Debt Documents), (b) any and all obligations to pay the
         Deposit Account Fee (as defined in the Subordinated Loan Agreement) and
         (c) all obligations, whether pursuant to the Subordinated Debt
         Documents or otherwise, to refund or reimburse Subordinated Creditor in
         respect of amounts that Senior Creditor may at any time, and

                                        2
<PAGE>

         from time to time, set off or otherwise apply against any obligations
         owed by Subordinated Creditor to Senior Creditor pursuant to the
         Limited Recourse Guaranty.

                           "SUBORDINATED NOTE" shall mean that certain Second
         Amended and Restated Subordinated Secured Promissory Note, dated as of
         September 26, 2007, made by Parent to the order of Subordinated
         Creditor, in the stated principal amount of $15,000,000, as the same
         may be amended, modified, restated and supplemented from time to time.

                           "PERMITTED SUBORDINATED DEBT PAYMENTS" means each of
         the following: (i) scheduled monthly payments of accrued but unpaid
         interest at the rates set forth in the Subordinated Note (including
         interest at the default rate to the extent then applicable) and
         payments on a scheduled monthly payment date of any accrued interest
         that remains unpaid due to application of this Agreement with respect
         to prior periods; provided, however, that on each Interest Payment Date
         (as defined in the Subordinated Loan Agreement) through and including
         the first Interest Payment Date on which the aggregate amount of
         interest accruing from March 1, 2007, through such Interest Payment
         Date under the Subordinated Note equals or exceeds $1,000,000, the
         accrued interest under the Subordinated Note shall be added to the
         principal balance thereof in lieu of cash payment of such accrued
         interest by Parent; (ii) with respect to that portion of the
         Guarantor's Deposit placed with Senior Creditor pursuant to the Limited
         Recourse Guaranty against which Senior Creditor has not exercise its
         right of set-off, or against which a set-off by the Senior Creditor is
         restored through payment or credit to the principal balance of the
         general ledger account in which such deposit is held, an amount payable
         monthly in arrears equal to the excess of (a) the amount of interest
         that would accrue on such amounts in the deposit account if such
         amounts were outstanding principal under the Tranche B Term Loan (as
         defined in the Subordinated Debt Documents) over (b) the amount of
         interest paid by Senior Creditor to the Subordinated Creditor in
         respect of the deposit account, in each case during the period such
         amounts are actually held on deposit in the deposit account; and (iii)
         with respect to that portion of the Guarantor's Deposit placed with
         Senior Creditor pursuant to the Limited Recourse Guaranty against which
         Senior Creditor has exercised its right of set-off, any amount paid by
         Parent or any Guarantor from amounts advanced under the Senior Loan
         Agreement to restore to the principal balance of the general ledger
         account in which the deposit is held any portion of the amount so set
         off. The amounts set forth in subsection (ii) above shall be payable,
         in arrears, on the first day of each month or, if any such date shall
         not be a business day, on the next succeeding business day to occur
         after such date; provided, however, that in lieu of any payment in cash
         of such amount, the amount shall be deemed to be accrued but unpaid
         interest under the Tranche B Revolving Loan, as defined in the
         Subordinated Debt Documents, and subject to the provisions of clause
         (i) above.

                  C. Section 3.2 of the Subordination Agreement is hereby
amended by amending and restating such section in its entirety as follows:

                           "Until the Senior Debt has been indefeasibly paid in
         full in cash and all lending commitments under the Senior Debt
         Documents have terminated, and notwithstanding anything to the contrary
         contained in the Subordinated Debt Documents,

                                        3
<PAGE>

         the Subordinated Creditor shall not, without the prior written consent
         of Agent, agree to any amendment, modification or supplement to the
         Subordinated Debt Documents the effect of which is to (a) increase the
         maximum principal amount of the Subordinated Debt or rate of interest
         on any of the Subordinated Debt, (b) change the dates upon which
         payments of principal or interest on the Subordinated Debt are due, (c)
         change or add any event of default or any covenant with respect to the
         Subordinated Debt, (d) change any redemption or prepayment provisions
         of the Subordinated Debt, (e) alter the subordination provisions with
         respect to the Subordinated Debt, including, without limitation,
         subordinating the Subordinated Debt to any other indebtedness, (f) take
         any liens or security interests in any assets of an Obligor, other than
         pursuant to the Subordinated Security Documents, or (g) change or amend
         any other term of the Subordinated Debt Documents if such change or
         amendment would result in a Senior Default, increase the obligations of
         any Obligor or confer additional material rights on the Subordinated
         Creditor in a manner adverse to any Obligor or the Senior Creditor;
         provided, however, the Subordinated Creditor may make additional
         advances in an amount equal to the payment of Subordinated Debt deemed
         to have been made upon conversion of all, or a portion of, the
         Subordinated Debt into common stock (as defined in the Senior Loan
         Agreement) of Parent, the Series 2006-B Preferred Stock of Parent, the
         Series 2007-A Senior Preferred Stock of Parent, the Series 2007-B
         Senior Preferred Stock of Parent or any other preferred stock of
         Parent. Subordinated Creditor will, or will cause Parent to, notify
         Senior Creditor of additional advances pursuant to the Subordinated
         Debt Documents as required pursuant to the Senior Loan Agreement
         (provided however prior notice shall not be required in the event an
         advance of Subordinated Debt is made to pay interest then due and
         payable in respect of the Subordinated Debt as permitted pursuant to
         Section 2.3(d) above), and Subordinated Creditor covenants and agrees
         to limit the principal amount of the Subordinated Debt to not more than
         $15,000,000 plus the amount of any accrued but unpaid interest that is
         added to the principal balance outstanding under the Subordinated Note
         in accordance with the terms thereof (but any increase above such
         amount shall continue to be subordinated under the terms hereof.)"

         SECTION 3. REFERENCES TO SUBORDINATION AGREEMENT. All references to the
Subordination Agreement therein or in any of the Senior Loan Documents or
Subordinated Loan Documents shall be deemed a reference to the Subordination
Agreement as amended by the First Amendment to Subordination and Intercreditor
Agreement, dated as of April 26, 2007, and as further amended by this Second
Amendment. Except as expressly provided in this Second Amendment, the execution
and delivery of this Second Amendment does not and will not amend, modify or
supplement any provision of, or constitute a consent to or a waiver of any
noncompliance with the provisions of, the Subordination Agreement or any of the
Senior Loan Documents or Subordinated Loan Documents executed in connection
therewith. To the extent not inconsistent herewith, the Subordination Agreement
and all of the Senior Loan Documents and Subordinated Loan Documents executed by
Senior Creditor, Subordinated Creditor, Parent, and Guarantors in connection
therewith shall remain in full force and effect and are hereby ratified and
confirmed by the parties thereto.

         SECTION 4. EFFECTIVE DATE. This Second Amendment shall become effective
as of its date and shall bind all parties only upon the execution and delivery
to the Senior Creditor and

                                        4
<PAGE>

Subordinated Creditor by the Senior Creditor, Subordinated Creditor, Parent and
Guarantors, as applicable.

         SECTION 5. REPRESENTATIONS AND WARRANTIES OF PARENT AND GUARANTORS.
Each of the Parent and Guarantors hereby represents and warrants to the Senior
Creditor and the Subordinated Creditor as follows:

                  A. Such party has the right and power, and has taken all
necessary action to authorize it, to execute, deliver and perform this Second
Amendment in accordance with its terms. This Second Amendment has been duly
executed and delivered by such party and is a legal, valid and binding
obligation of it, enforceable against it in accordance with its terms.

                  B. The execution, delivery and performance of this Second
Amendment in accordance with its terms do not and will not, by the passage of
time, the giving of notice or otherwise,

                  (i) require any governmental approval or violate any
         applicable law relating to such party;

                  (ii) conflict with, result in a breach of or constitute a
         default under the organizational documents of such party, any material
         provision of any indenture, agreement or other instrument to which it
         is a party or by which it or any of its properties may be bound or any
         governmental approval relating to it; or

                  (iii) result in or require the creation or imposition of any
         lien (except as permitted by the Senior Loan Documents and Subordinated
         Loan Documents) upon or with respect to any property now owned or
         hereafter acquired by such party.

                  C. That, after giving affect to the amendments set forth in
this Second Amendment, the representations and warranties of such party set
forth in the Subordination Agreement, the Senior Loan Documents, and the
Subordinated Loan Documents and in any other document, instrument or agreement
executed or delivered in connection therewith are true and correct as of the
date hereof as if made on the date hereof.

                  D. No Event of Default under the Senior Loan Documents or
Subordinated Loan Documents, other than as specifically waived herein, has
occurred and is continuing as of this date.

         SECTION 6. REPRESENTATIONS AND WARRANTIES OF SENIOR AND SUBORDINATED
CREDITORS. Each of the Senior Creditor and the Subordinated Creditor hereby
represents and warrants to the other as follows:

                  A. Such party has the right and power, and has taken all
necessary action to authorize it, to execute, deliver and perform this Second
Amendment in accordance with its terms. This Second Amendment has been duly
executed and delivered by such party and is a legal, valid and binding
obligation of it, enforceable against it in accordance with its terms.

                                        5
<PAGE>

                  B. The execution, delivery and performance of this Second
Amendment in accordance with its terms do not and will not, by the passage of
time, the giving of notice or otherwise,

                  (i) require any governmental approval or violate any
         applicable law relating to such party; or

                  (ii) conflict with, result in a breach of or constitute a
         default under the organizational documents of such party, any material
         provision of any indenture, agreement or other instrument to which it
         is a party or by which it or any of its properties may be bound or any
         governmental approval relating to it.

                  C. That, after giving affect to the amendments set forth in
this Second Amendment, the representations and warranties of such party set
forth in the Subordination Agreement are true and correct as of the date hereof
as if made on the date hereof.

         SECTION 7. NO NOVATION. It is the intention of the parties hereto that
this Second Amendment shall not constitute a novation of the Subordination
Agreement and shall in no way adversely affect or impair the validity of the
Senior Loan Documents or the Subordinated Loan Documents, it being the intention
of the parties hereto merely to amend the Subordination Agreement as expressly
set forth herein.

         SECTION 8. WRITTEN CONSENT OF SENIOR CREDITOR. Senior Creditor hereby
gives its prior written consent to the amendments, modifications, and
supplements to the Subordinated Debt Documents set forth in that certain Second
Amended and Restated Subordinated Secured Promissory Note described in Section
2(B) above and the Second Global Amendment and Reaffirmation of Subordinated
Debt Documents, dated as of the date hereof.

         SECTION 9. COUNTERPARTS. This Second Amendment may be executed in one
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.

         SECTION 10. GOVERNING LAW. THIS SECOND AMENDMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND BE GOVERNED BY THE LAWS (WITHOUT GIVING EFFECT TO THE
CONFLICT OF LAW PRINCIPLES THEREOF) OF THE STATE OF NEW YORK.

         SECTION 11. THIS SECOND AMENDMENT. This Second Amendment is executed
pursuant to the Subordination Agreement and shall be construed, administered and
applied in accordance with all of the terms and provisions of the Subordination
Agreement.

                            [SIGNATURE PAGES FOLLOW]

                                        6
<PAGE>

         IN WITNESS WHEREOF, the undersigned Subordinated Lender has executed
this Second Amendment as of the date first above written.


                           SUBORDINATED LENDER:
                           --------------------

                           RONHOW, LLC, a Georgia limited liability company

                           By: Ronus, Inc., a Georgia corporation,
                               Managing Member



                               By: /s/ Robert Anderson
                                   -------------------------
                               Name: Robert Anderson
                               Title: President

















                                        7
<PAGE>

         IN WITNESS WHEREOF, the undersigned Senior Creditor has executed this
Second Amendment as of the date first above written.


                           SENIOR CREDITOR:
                           ----------------

                           WELLS FARGO RETAIL FINANCE II, LLC, a Delaware
                           limited liability company



                           By: /s/ Lynn S. Whitmore
                               ---------------------------
                           Name: Lynn S. Whitmore
                           Title: Senior Vice President





















                                        8
<PAGE>

         IN WITNESS WHEREOF, the undersigned Parent and Guarantors have executed
this Second Amendment as of the date first above written.

                           PARENT:
                           -------

                           HAROLD'S STORES, INC.

                           By: /s/ Ron Staffieri
                               ------------------------
                           Name: Ron Staffieri
                           Title: CEO


                           GUARANTORS:
                           -----------

                           HAROLD'S FINANCIAL CORPORATION

                           By: /s/ Ron Staffieri
                               ------------------------
                           Name: Ron Staffieri
                           Title: CEO


                           HAROLD'S DIRECT, INC.

                           By: /s/ Ron Staffieri
                               ------------------------
                           Name: Ron Staffieri
                           Title: CEO


                           HAROLD'S STORES OF TEXAS, L.P.

                           By: HSTX, Inc., General Partner

                           By: /s/ Ron Staffieri
                               ------------------------
                           Name: Ron Staffieri
                           Title: CEO


                           HAROLD'S OF JACKSON, INC.

                           By: /s/ Ron Staffieri
                               ------------------------
                           Name: Ron Staffieri
                           Title: CEO


                           THE CORNER PROPERTIES, INC.

                           By: /s/ Ron Staffieri
                               ------------------------
                           Name: Ron Staffieri
                           Title: CEO

                                        9
<PAGE>

                           HAROLD'S DBO, INC.

                           By: /s/ Ron Staffieri
                               ------------------------
                           Name: Ron Staffieri
                           Title: CEO


                           HAROLD'S LIMITED PARTNERS, INC.

                           By: /s/ Ron Staffieri
                               ------------------------
                           Name: Ron Staffieri
                           Title: CEO


                           HSTX, INC.

                           By: /s/ Ron Staffieri
                               ------------------------
                           Name: Ron Staffieri
                           Title: CEO











                                       10