Document:

EXHIBIT 4.3
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                           CERTIFICATE OF DESIGNATION
                                     OF THE
                      SERIES 2007-B SENIOR PREFERRED STOCK
                                ($0.01 PAR VALUE)
                                       OF
                              HAROLD'S STORES, INC.

        Pursuant to Section 1032 of the Oklahoma General Corporation Act

         The undersigned, the Chief Executive Officer of Harold's Stores, Inc.,
an Oklahoma corporation (the "Corporation"), does hereby certify that the
following resolution was duly adopted by the Board of Directors of the
Corporation on April 26, 2007, pursuant to the provisions of Section 1032.A of
the Oklahoma General Corporation Act:

         RESOLVED, that pursuant to authority expressly granted to and vested in
the Board of Directors by the provisions of the Certificate of Incorporation of
the Corporation (the "Certificate of Incorporation"), the issuance of a series
of the preferred stock, par value $0.01 per share, of the Corporation to be
designated "Series 2007-B Senior Preferred Stock," which shall consist of 5,000
shares of preferred stock that the Corporation now has authority to issue, be,
and the same hereby is, authorized, and the powers, designations, preferences
and rights, and the qualifications, limitations or restrictions of the shares of
such series (in addition to the rights and limitations set forth in the
Certificate of Incorporation that may be applicable to the Series 2007-B Senior
Preferred Stock) are fixed as follows:

         1. Dividends.

                  (a) The holders of the Series 2007-B Senior Preferred Stock
         (the "Series 2007-B Preferred") shall be entitled to receive, out of
         any assets legally available therefor, prior and in preference to any
         declaration or payment of any dividend (payable other than in common
         stock, par value $.01 per share ("Common Stock"), of the Corporation or
         other securities and rights convertible into or entitling the holder
         thereof to receive, directly or indirectly, additional shares of Common
         Stock of the Corporation) on the Common Stock or any other securities
         issued by the Corporation that are junior to the Series 2007-B
         Preferred ("Junior Securities"), an amount equal to eighteen percent
         (18%) of the Stated Value (as defined below) per annum, subject to
         adjustment as set forth below (the "Dividend Rate"). Dividends shall
         accrue daily after issuance and shall be payable quarterly on the first
         day of January, April, July and October (each a "Dividend Date")
         commencing on the first of such dates after the date of issuance of the
         shares (the "Original Issue Date"). Dividends not paid on a Dividend
         Date shall cumulate. Cumulated dividends shall compound annually on
         January 1 of each year. From the Original Issue Date as to any shares
         of Series 2007-B Preferred, dividends shall either cumulate or be
         payable in either cash or in additional shares of Series 2007-B
         Preferred, or a combination thereof, at the option of the holder as
         provided to the Corporation by written notice not less than ten (10)
         days prior to the applicable Dividend Date. In the

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         absence of a specific election by a holder, dividends shall be paid in
         cash. For purposes of determining the number of shares of Series 2007-B
         Preferred to be issued in connection with the payment of any dividend
         in such shares, the shares of Series 2007-B Preferred to be issued
         shall be valued at the Stated Value. No scrip or fractional shares of
         Series 2007-B Preferred shall be issued. In lieu of any fractional
         shares to which the holder would otherwise be entitled, the Corporation
         shall pay cash equal to such fraction multiplied by the Stated Value.

                  (b) No dividend will be declared or paid or set apart for
         payment on preferred stock of any series ranking as to dividends on a
         parity with the Series 2007-B Preferred unless full cumulative
         dividends have been or contemporaneously are declared and paid or
         declared and a sum sufficient for the payment thereof set apart for
         such payment on the Series 2007-B Preferred for all dividend payment
         periods terminating on or prior to the date of payment of such
         dividend. When dividends are not paid in full upon the Series 2007-B
         Preferred and any other preferred stock ranking as to dividends on a
         parity with the Series 2007-B Preferred, all dividends declared upon
         shares of the Series 2007-B Preferred and any other preferred stock
         ranking on a parity as to dividends will be declared pro rata.

                  (c) If the Corporation's operating income for any fiscal year
         ending after the Original Issue Date exceeds $4,750,000, as reflected
         in its audited financial statements for such year, the Dividend Rate
         will be reduced to sixteen percent (16%) per annum effective as of the
         first day of the following fiscal year. The Corporation will give
         written notice of any such adjustment to the Dividend Rate to the
         holders of the Series 2007-B Preferred within ten (10) days following
         the issuance of an audit opinion by the Corporation's independent
         public accountant.

                  (d) The "Stated Value" of the Series 2007-B Preferred shall be
         One Thousand Dollars ($1,000.00).

         2.       Liquidation Preference.

                  (a) Preferential Amounts. In the event of any liquidation,
         dissolution or winding up of the affairs of the Corporation, whether
         voluntary or involuntary (a "Liquidation Event"), the holders of the
         Series 2007-B Preferred shall be entitled to receive, prior and in
         preference to any distribution of any of the assets or surplus funds of
         the Corporation to the holders of Common Stock or any other Junior
         Securities, an amount per share equal to the Stated Value for each such
         share of Series 2007-B Preferred then so held (as adjusted for any
         stock dividends, combinations, recapitalizations, splits or otherwise
         on such shares), plus a further amount equal to all accrued but unpaid
         dividends (which shall include all cumulated dividends) on such shares.
         All of the preferential amounts to be paid to the holders of the Series
         2007-B Preferred under this Section 2 shall be paid or declared and set
         apart for payment before the payment or setting apart for payment of
         any amount for, or the distribution of any assets or funds of the
         Corporation to, the holders of the Common Stock or any other

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         Junior Securities in connection with such Liquidation Event. Neither
         the merger nor consolidation of the Corporation with or into any other
         corporation, nor the merger or consolidation of any other corporation
         into or with the Corporation, nor a sale or transfer of all or any part
         of the assets of the Corporation, shall without a contemporaneous
         liquidation, dissolution or winding up, be deemed to be a Liquidation
         Event.

                  (b) Insufficient Assets. If, upon a Liquidation Event, the
         assets and funds of the Corporation are insufficient to provide for the
         payment of the full aforesaid preferential amount to the holders of the
         Series 2007-B Preferred and the full preferential amount due to the
         holders of any preferred stock ranking as to liquidation on a parity
         with the Series 2007-B Preferred, such assets and funds as are
         available shall be distributed ratably among the holders of the Series
         2007-B Preferred and the holders of any such preferred stock ranking as
         to liquidation on a parity with the Series 2007-B Preferred in
         proportion to the full preferential amount each such holder is
         otherwise entitled to receive.

                  (c) No Further Participation. After the payment or the setting
         apart of payment of the full preferential amount to the holders of the
         Series 2007-B Preferred, the holders of the Series 2007-B Preferred
         shall not be entitled to any further participation in any distribution
         of assets by the Corporation in connection with a Liquidation Event.

                  (d) Non-cash Distribution. If any of the assets of the
         Corporation are to be distributed other than in cash under this Section
         2 or for any purpose, then the Board of Directors of the Corporation
         shall promptly engage an independent appraiser to determine the value
         of the assets to be distributed to the holders of the Series 2007-B
         Preferred, the Series 2007-A Senior Preferred Stock (the "Series 2007-A
         Preferred"), the Series 2006-B Preferred Stock (the "Series 2006-B
         Preferred), the Series 2006-A Preferred Stock (the "Series 2006-A
         Preferred"), the Series 2003-A Preferred Stock (the "Series 2003-A
         Preferred"), the Series 2002-A Preferred Stock (the "Series 2002-A
         Preferred"), the Amended Series 2001-A Preferred Stock (the "Amended
         Series 2001-A Preferred") and the Common Stock. The Corporation shall,
         upon receipt of such appraiser's valuation, give prompt written notice
         to each holder of Series 2007-B Preferred, Series 2007-A Preferred,
         Series 2006-B Preferred, Series 2006-A Preferred, Series 2003-A
         Preferred, 2002-A Preferred, Amended Series 2001-A Preferred and Common
         Stock of the appraiser's valuation. Notwithstanding the above, any
         securities to be distributed to the shareholders shall be valued as
         follows (the "Average Market Price"):

                           (i) if traded on a securities exchange, the value
                  shall be deemed to be the average of the closing prices of the
                  securities on such exchange over the twenty (20) trading day
                  period ending on the trading day prior to the closing of the
                  transaction, adjusted appropriately for any stock splits,
                  stock dividends or similar changes in capitalization occurring
                  during such period;

                           (ii) if actively traded over-the-counter, the value
                  shall be deemed to be the average of the closing bid prices
                  over the twenty (20) trading day period

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                  ending on the trading day prior to the closing of the
                  transaction, adjusted appropriately for any stock splits,
                  stock dividends or similar changes in capitalization
                  occurring during such period; and

                           (iii) if there is no active public market, the value
                  shall be the fair market value thereof, as mutually determined
                  by the Corporation and the holders of a majority of the total
                  combined outstanding shares of the Series 2007-B Preferred,
                  the Series 2007-A Preferred, the Series 2006-B Preferred, the
                  Series 2006-A Preferred, the Series 2003-A Preferred, the
                  Series 2002-A Preferred and the Amended Series 2001-A
                  Preferred, provided that if the Corporation and the holders of
                  a majority of the total combined outstanding shares of the
                  Series 2007-B Preferred, the Series 2007-A Preferred, the
                  Series 2006-B Preferred, the Series 2006-A Preferred, the
                  Series 2003-A Preferred, the Series 2002-A Preferred and the
                  Amended Series 2001-A Preferred are unable to reach agreement,
                  then by independent appraisal by an investment banker hired
                  and paid by the Corporation but acceptable to the holders of a
                  majority of the total combined outstanding shares of the
                  Series 2007-B Preferred, the Series 2007-A Preferred, the
                  Series 2006-B Preferred, the Series 2006-A Preferred, the
                  Series 2003-A Preferred, the Series 2002-A Preferred and the
                  Amended Series 2001-A Preferred.

                  3. Voting Rights. Except as set forth herein or as otherwise
         required by law, the holder of each share of Series 2007-B Preferred
         shall be entitled to that number of votes allotted by law and hereunder
         equal to the number of shares of Common Stock into which such share of
         Series 2007-B Preferred could be converted at the record date for
         determination of the shareholders entitled to vote on such matters, or,
         if no such record date is established, at the date such vote is taken
         or any written consent of shareholders is solicited, such votes to be
         counted together with all other shares of capital stock of the
         Corporation having general voting power and not counted separately as a
         class, except as set forth in this Certificate or as otherwise required
         by law. The holders of the Series 2007-B Preferred shall be entitled to
         vote as a single class for the election of a number of members of the
         board of directors of the Corporation such that the number of directors
         so elected by the holders of the Series 2007-B Preferred represents a
         percentage of the total membership of the Corporation's board of
         directors that equals, as nearly as practicable, the percentage of the
         Corporation's outstanding Common Stock (treating the outstanding Common
         Stock and shares of Common Stock issuable upon the conversion of the
         Series 2007-B Preferred, the Series 2007-A Preferred, the Series 2006-B
         Preferred, the Series 2006-A Preferred, the Series 2003-A Preferred,
         the Series 2002-A Preferred and the Amended Series 2001-A Preferred as
         outstanding in the aggregate) represented by the outstanding Series
         2007-B Preferred on an as-converted basis, rounded up or down to the
         nearest whole number. For so long as such percentage rounds to zero,
         the holders of the Series 2007-B Preferred shall not be entitled,
         voting together as a class, to elect any directors. In the event the
         holders of the Amended Series 2001-A Preferred and the Series 2002-A
         Preferred (voting together) and the Series 2003-A Preferred (voting
         separately) and the Series 2006-A Preferred (voting separately) and the
         Series 2006-B

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         Preferred (voting separately) and the Series 2007-A Preferred (voting
         separately) no longer have the right to designate the Chairman of the
         Board and/or the Vice-Chairman of the Board as described in the
         Certificates of Designation establishing such series of preferred
         stock, then one such director elected by the holders of the Series
         2007-B Preferred shall serve as Chairman of the Board and one such
         director shall serve as Vice-Chairman of the Board, provided that if
         the holders of the Series 2007-B Preferred, voting together as a class,
         are entitled to elect only one director, that director shall serve as
         Chairman of the Board. This voting right of the Series 2007-B Preferred
         shall not limit the right of the holders of the Series 2007-B Preferred
         to vote their shares of Series 2007-B Preferred or any other voting
         shares of the Corporation held by any of such holders, as to any other
         matter as to which the shareholders of the Corporation are entitled to
         vote, including in connection with a shareholder vote for the election
         of directors generally. The holders of Series 2007-B Preferred shall be
         entitled to notice of any shareholders' meeting in accordance with the
         Bylaws of the Corporation.

                  4. Conversion. The holders of the Series 2007-B Preferred have
         conversion rights as follows (the "Conversion Rights"):

                  (a) Right to Convert. Each share of Series 2007-B Preferred
         shall be convertible, at the option of the holder thereof, at any time
         after the date of issuance of such share, into such number of fully
         paid and nonassessable shares of Common Stock as is determined by
         dividing the Stated Value for such share by the applicable conversion
         price (each a "Conversion Price"), as follows:

                           (i) for the shares of Series 2007-B Preferred
                  issuable pursuant to any option or other right to acquire
                  shares of Series 2007-B Preferred, the Conversion Price shall
                  equal sixty-six and two-thirds percent (66.667%) of the
                  Average Market Price of the Common Stock as of the twenty (20)
                  trading days ending on the trading day next preceding the date
                  of exercise of any such option or other right (the "Stated
                  Value Conversion Price"); and

                           (ii) for the shares of Series 2007-B Preferred issued
                  in satisfaction of any dividend, and for all such shares
                  accrued from the last Dividend Date through the date of
                  conversion of any Series 2007-B Preferred into Common Stock,
                  the Conversion Price shall be equal to sixty-six and
                  two-thirds percent (66.667%) of the Average Market Price of
                  the Common Stock as of the twenty (20) trading days ending on
                  the trading day next preceding such Dividend Date, adjusted
                  appropriately for any stock splits, stock dividends or similar
                  changes in capitalization occurring during such period (the
                  "Dividend Conversion Price"); and

                           (iii) for any other shares of Series 2007-B Preferred
                  that may be issued by the Corporation, the Conversion Price
                  shall be equal to sixty-six and two-thirds percent (66.667%)
                  of the Average Market Price of the Common Stock as of the
                  twenty (20) trading days ending on the trading day next
                  preceding the date of

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                  issuance of such shares of Series 2007-B Preferred, unless
                  otherwise determined by the Board of Directors of the
                  Corporation.

         No fractional shares of Common Stock shall be issued upon conversion of
         Series 2007-B Preferred. In lieu of any fractional shares to which the
         holder would otherwise be entitled, the Corporation shall pay cash
         equal to such fraction multiplied by the applicable Average Market
         Price of a whole share used for purposes of computing the Conversion
         Price.

                  (b) Mechanics of Conversion. Any holder of Series 2007-B
         Preferred electing to convert shares of Series 2007-B Preferred into
         full shares of Common Stock and to receive certificates therefor shall
         surrender the certificate or certificates representing the shares of
         Series 2007-B Preferred to be converted, if such share certificates
         have been issued by the Corporation, duly endorsed, at the office of
         the Corporation or of any transfer agent for the Series 2007-B
         Preferred, and shall give written notice to the Corporation at such
         office that it elects to convert the certificated shares surrendered
         with the notice of conversion and any other shares as to which share
         certificates have not been issued by the Corporation. The Corporation
         shall, as soon as practicable thereafter, issue and deliver at such
         office to such holder of Series 2007-B Preferred, a certificate or
         certificates for the number of shares of Common Stock to which it shall
         be entitled as aforesaid and a check payable to the holder in the
         amount of any cash amounts payable as the result of a conversion into
         fractional shares of Common Stock. Such conversion shall be deemed to
         have been made immediately prior to the close of business on the date
         of delivery to the Corporation of the holder's written notice of
         conversion, and the person or persons entitled to receive the shares of
         Common Stock issuable upon such conversion shall be treated for all
         purposes as the record holder or holders of such shares of Common Stock
         on such date.

                  (c) Reservation of Preferred and Common Stock. The Corporation
         shall at all times reserve and keep available out of its authorized but
         unissued shares: (i) such number of shares of Series 2007-B Preferred
         as shall from time to time to be sufficient to permit the issuance of
         such shares pursuant to any option or other right to acquire shares of
         Series 2007-B Preferred or for payment of dividends on the Series
         2007-B Preferred in additional shares of Series 2007-B Preferred; and
         (ii) such number of its shares of Common Stock as shall from time to
         time be sufficient to effect the conversion of all outstanding shares
         of the Series 2007-B Preferred; and if at any time the number of
         authorized but unissued shares of Series 2007-B Preferred or Common
         Stock shall not be sufficient to effect the payment of dividends or
         conversion of all then outstanding shares of the Series 2007-B
         Preferred as contemplated by this Section 4(c), in addition to such
         other remedies as shall be available to the holder of such Series
         2007-B Preferred, the Corporation will take such corporate action as
         may, in the opinion of its counsel, be necessary to increase its
         authorized but unissued shares to such number of shares as shall be
         sufficient for such purposes.

                  (d) Adjustments to Conversion Price.

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                           (i) Adjustments for Stock Dividends, Subdivisions,
                  Combinations or Consolidations of Common Stock. In the event
                  the outstanding shares of Common Stock shall be subdivided (by
                  stock dividends, splits, or otherwise) into a greater number
                  of shares of Common Stock, each Conversion Price then in
                  effect shall, concurrently with the effectiveness of such
                  subdivision, be proportionately decreased. In the event the
                  outstanding shares of Common Stock shall be combined or
                  consolidated, by reclassification or otherwise, into a lesser
                  number of shares of Common Stock, each Conversion Price then
                  in effect shall, concurrently with the effectiveness of such
                  combination or consolidation, be proportionately increased.

                           (ii) Adjustments for Other Distributions. In the
                  event the Corporation at any time or from time to time makes
                  or fixes a record date for the determination of holders of
                  Common Stock entitled to receive any distribution payable in
                  securities or assets of the Corporation other than shares of
                  Common Stock, in each such event provision shall be made so
                  that the holders of Series 2007-B Preferred shall receive upon
                  conversion thereof, in addition to the number of shares of
                  Common Stock receivable thereupon, the amount of securities or
                  assets of the Corporation which they would have received had
                  their Series 2007-B Preferred been converted into Common Stock
                  on the date of such event and had they thereafter, during the
                  period from the date of such event to and including the date
                  of conversion, retained such securities or assets receivable
                  by them as aforesaid during such period, subject to all other
                  adjustments called for during such period under this Section 4
                  with respect to the rights of the holders of the Series 2007-B
                  Preferred.

                           (iii) Adjustments for Reclassification, Exchange and
                  Substitution. If the Common Stock issuable upon conversion of
                  the Series 2007-B Preferred shall be changed into the same or
                  a different number of shares of any other class or classes of
                  stock, whether by capital reorganization, reclassification or
                  otherwise (other than a subdivision or combination of shares
                  provided for above), then in each such event the holder of
                  each share of Series 2007-B Preferred shall have the right
                  thereafter to convert such share into the kind and amount of
                  shares of stock and other securities and property receivable
                  upon such reorganization or reclassification or other change
                  by holders of the number of shares of Common Stock that would
                  have been subject to receipt by the holders upon conversion of
                  the Series 2007-B Preferred immediately before such change,
                  all subject to further adjustment as provided herein.

                           (iv) No Impairment. Without the prior written consent
                  of the holders of at least a majority of the outstanding
                  Series 2007-B Preferred, the Corporation will not, by
                  amendment of its Certificate of Incorporation or through any
                  reorganization, transfer of assets, consolidation, merger,
                  dissolution, issuance or sale of securities or any other
                  voluntary action, avoid or seek to avoid the

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                  observance or performance of any of the terms to be observed
                  or performed hereunder by the Corporation but will at all
                  times in good faith assist in the carrying out of all the
                  provisions of Section 4 and in the taking of all such action
                  as may be necessary or appropriate in order to protect the
                  Conversion Rights of the holders of the Series 2007-B
                  Preferred against impairment.

                         (v) Certificate as to Adjustments. Upon the
                  occurrence of each adjustment or readjustment of the
                  Conversion Price pursuant to Section 4, the Corporation at its
                  expense shall promptly compute such adjustment or readjustment
                  in accordance with the terms hereof and furnish to each holder
                  of Series 2007-B Preferred a certificate setting forth such
                  adjustment or readjustment and showing in detail the facts
                  upon which such adjustment or readjustment is based. The
                  Corporation shall, upon the written request at any time of any
                  holder of Series 2007-B Preferred, furnish or cause to be
                  furnished to such holder a like certificate setting forth (i)
                  such adjustments and readjustments, (ii) each Conversion Price
                  at the time in effect, and (iii) the number of shares of
                  Common Stock and the amount, if any, of other property which
                  at the time would be received upon the conversion of Series
                  2007-B Preferred.

                  5. Redemption.

                  (a) Commencing at any time on or after three (3) years from
         the Original Issue Date, the Corporation, at its option, may redeem the
         Series 2007-B Preferred. Unless otherwise agreed by any affected holder
         and only with respect to such holder's shares of Series 2007-B
         Preferred, the Corporation shall not redeem less than all of the Series
         2007-B Preferred held by any holder.

                  (b) The Corporation shall redeem to the extent it may legally
         do so the Series 2007-B Preferred by paying a price per share equal to
         the Stated Value for such shares plus all accrued but unpaid dividends
         (including cumulated dividends) on each such share. After the
         Corporation has given written request that the Series 2007-B Preferred
         be redeemed in accordance with this Section 5, no shares of the capital
         stock of the Corporation (other than shares of Series 2007-A Preferred
         and Series 2007-B Preferred) shall be redeemed prior to the redemption
         of the Series 2007-B Preferred.

                  (c) At least six (6) months and one (1) week prior to the
         redemption date, or such lesser period as the holders of at least a
         majority of the Series 2007-B Preferred may agree, written notice shall
         be mailed, first class postage prepaid, to each holder of record (at
         the close of business on the business day immediately preceding the day
         on which notice is given) of the Series 2007-B Preferred, at the
         address last shown on the records of the Corporation for such holder,
         specifying the number of shares to be redeemed from each holder, the
         redemption price, the place at which payment may be obtained and
         calling upon such holder to surrender to the Corporation, in the manner
         and at the price designated, its certificate or certificates
         representing such holder's shares to be redeemed (the "Redemption
         Notice"). On or after the redemption date, such holder of Series 2007-

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         B Preferred to be redeemed shall surrender to the Corporation the
         certificate or certificates representing such shares, in the manner and
         at the price designated in the Redemption Notice, and thereupon the
         redemption price of such shares shall be payable to the order of the
         person whose name appears on such certificate or certificates as the
         owner thereof and each surrendered certificate shall be canceled.

                  (d) From and after the redemption date, unless there shall
         have been a default in payment of the redemption price, all rights of
         the holders of shares of Series 2007-B Preferred designated for
         redemption in the Redemption Notice (except the right to receive the
         redemption price without interest upon surrender of their certificate
         or certificates) shall cease with respect to such shares at such time,
         and such shares shall not thereafter be transferred on the books of the
         Corporation or be deemed to be outstanding for any purpose whatsoever.
         If the funds of the Corporation legally available for redemption of
         shares of Series 2007-B Preferred on the redemption date are
         insufficient to redeem the total number of shares of Series 2007-B
         Preferred to be redeemed, those funds that are legally available will
         be used to redeem the maximum possible number of such shares ratably
         among the holders of such shares to be redeemed based upon their
         holdings of Series 2007-B Preferred. The shares of Series 2007-B
         Preferred not redeemed shall remain outstanding and entitled to all the
         rights and preferences provided herein. At any time thereafter when
         additional funds of the Corporation are legally available for the
         redemption of shares of Series 2007-B Preferred, such funds will
         immediately be used to redeem the balance of the shares that the
         Corporation has become obligated to redeem on the redemption date.

                  6. Protective Provisions. For so long as the shares of Common
         Stock issuable upon the conversion of the outstanding Series 2007-B
         Preferred represent in the aggregate at least ten percent (10%) of the
         Corporation's outstanding Common Stock (treating the outstanding Common
         Stock and shares of Common Stock issuable upon the conversion of the
         Series 2007-B Preferred, the Series 2007-A Preferred, the Series 2006-B
         Preferred, the Series 2006-A Preferred, the Series 2003-A Preferred,
         the Series 2002-A Preferred and the Amended Series 2001-A Preferred as
         outstanding in the aggregate), the Corporation shall not, without first
         obtaining the affirmative vote or written consent of the holders of at
         least a majority of the outstanding shares of Series 2007-B Preferred,
         voting together as a single class on an as-converted to Common Stock
         basis:

                  (a) amend, repeal or waive any provision of the Corporation's
         Certificate of Incorporation or Bylaws;

                  (b) alter or change the rights, preferences or privileges of
         the Series 2007-B Preferred;

                  (c) redeem any shares of the Corporation's capital stock
         (except for the Series 2007-B Preferred in accordance with Section 5
         hereof);

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                  (d) authorize or issue any class or series of capital stock,
         other than the issuance of Series 2007-B Preferred, Series 2007-A
         Preferred, Series 2006-B Preferred, Series 2006-A Preferred, Series
         2003-A Preferred, Series 2002-A Preferred and Amended Series 2001-A
         Preferred in satisfaction of dividends or pursuant to existing
         conversion rights or options or warrants granted to persons to acquire
         shares of Series 2007-B Preferred, Series 2007-A Preferred, Series
         2006-A Preferred or Series 2006-B Preferred, provided that the
         Corporation may issue options and other stock-based awards (and the
         shares upon exercise thereof) pursuant to the following Subsection (e);

                  (e) adopt, amend or modify (including modification by the
         repricing of existing awards, except and only to the extent resulting
         from a stock split or similar transaction) any stock option plan or
         employee stock ownership plan or issue any shares of capital stock of
         the Corporation to its or its subsidiaries' employees or directors,
         except pursuant to the Corporation's 1993 or 2002 Performance and
         Equity Incentive Plan and 1993 Employee Stock Purchase Plan, each as
         amended;

                  (f) pay or declare any dividend or other distribution on
         Junior Securities, except as provided herein;

                  (g) authorize, or take any action to effect, or otherwise
         permit a sale or other disposition of all or substantially all of the
         assets of the Corporation or any subsidiary, or a merger, acquisition,
         recapitalization, other corporate reorganization or sale of control of
         the Corporation or any subsidiary, or a license of a substantial
         portion of the assets of the Corporation or any subsidiary;

                  (h) undertake or effect any liquidation, dissolution or
         winding up of the Corporation or any material subsidiary, any
         assignment for the benefit of creditors, or any bankruptcy or similar
         filing;

                  (i) create any new subsidiary of the Corporation or permit any
         subsidiary of the Corporation to sell or otherwise issue any capital
         stock or any right to acquire any of its capital stock to any party
         other than the Corporation;

                  (j) change the size of the Corporation's board of directors;

                  (k) take any action which results in the Corporation making,
         or permitting any subsidiary to make, any loan to, or investment in,
         another entity, other than a subsidiary of the Corporation;

                  (L) take any action to incur or assume more than $1,000,000 of
         indebtedness, either individually or on a cumulative basis, in excess
         of the amount of the Corporation's existing indebtedness and
         availability at such time under credit facilities that exist as of the
         Original Issue Date, excluding the extension of trade credit in the
         ordinary course of business consistent with past practices;

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                  (m) take any action which results in the Corporation and its
         subsidiaries making, or becoming obligated to make, any capital
         expenditures in excess of $4,000,000 in the aggregate in any fiscal
         year;

                  (n) enter into, or permit any subsidiary to enter into, any
         agreement, contract, arrangement or transaction, whether oral or
         written, with or for the benefit of any of its or any subsidiary's
         officers, directors or shareholders, any individual or entity that is
         an "affiliate" of the Corporation within the meaning of the rules
         promulgated under the Securities Exchange Act of 1934, as amended, or
         any individual related by blood, marriage, or adoption to any such
         individual or entity, unless such agreement, contract, arrangement or
         transaction is entered into in the ordinary course of business and on
         terms no less favorable to the Corporation than those the Corporation
         would have been reasonably likely to obtain as the result of
         arms-length negotiations with an unrelated third party;

                  (o) approve any material change in any line of business of the
         Corporation or any subsidiary; or

                  (p) enter into any acquisition or series of related
         acquisitions, directly or through a subsidiary, involving an aggregate
         transaction value in excess of $500,000.

                  7. Limitations on Reissuance. No share or shares of Series
         2007-B Preferred acquired by the Corporation by reason of redemption,
         purchase, conversion or otherwise shall be reissued, and all such
         shares shall be canceled, retired and eliminated from the shares which
         the Corporation shall be authorized to issue.

                  8. Preemptive Rights. Except for the issuance of stock (a) as
         payment of dividends on the Series 2007-B Preferred, the Series 2007-A
         Preferred, the Series 2006-B Preferred, the Series 2006-A Preferred,
         the Series 2003-A Preferred, the Series 2002-A Preferred and the
         Amended Series 2001-A Preferred and the issuance of Common Stock on
         conversion of the Series 2007-B Preferred, the Series 2007-A Preferred,
         the Series 2006-B Preferred, the Series 2003-A Preferred, the Series
         2002-A Preferred and the Amended Series 2001-A Preferred, or (b)
         pursuant to existing conversion rights or options or warrants granted
         to persons to acquire shares of Series 2007-B Preferred, Series 2007-A
         Preferred, Series 2006-A Preferred or Series 2006-B Preferred, the
         Corporation shall not issue, sell or exchange, agree or obligate itself
         to issue, sell or exchange, or reserve or set aside for issuance, sale
         or exchange, any (i) shares of Common Stock, (ii) any other equity
         security of the Corporation, including without limitation, shares of
         Series 2007-B Preferred, Series 2007-A Preferred, Series 2006-B
         Preferred, Series 2006-A Preferred, Series 2003-A Preferred, Series
         2002-A Preferred or Amended Series 2001-A Preferred, (iii) any debt
         security of the Corporation (other than debt with no equity feature)
         including without limitation, any debt security which by its terms is
         convertible into or exchangeable for any equity security of the
         Corporation, (iv) any security of the Corporation that is a combination
         of debt and equity, or (v) any option, warrant or other right to
         subscribe for, purchase or otherwise acquire any such equity security
         or any such debt security of the Corporation, except for the issuance
         of options and other awards, and shares issuable thereon,

                                       11
<PAGE>

         pursuant to the Corporation's 1993 or 2002 Performance and Equity
         Incentive Plan and 1993 Employee Stock Purchase Plan, each as amended,
         or any other employee incentive plan approved in accordance with
         Section 6 hereof, unless in each case the Corporation shall have first
         offered to sell such securities (the "Offered Securities") to the
         holders of the Series 2007-B Preferred as follows: the Corporation
         shall offer to sell to such holders that portion of the Offered
         Securities as the number of shares of Common Stock (treating the
         outstanding Common Stock and shares of Common Stock issuable upon the
         conversion of the Series 2007-B Preferred, the Series 2007-A Preferred,
         the Series 2006-B Preferred, the Series 2006-A Preferred, the Series
         2003-A Preferred, the Series 2002-A Preferred and the Amended Series
         2001-A Preferred as outstanding in the aggregate) then held by each
         such holder bears to the total number of shares of Common Stock so
         determined as are then outstanding on such date, at a price and on such
         other terms as shall have been specified by the Corporation in a
         writing delivered to such holder (the "Offer"), which Offer by its
         terms shall remain open and irrevocable for a period of thirty (30)
         days from the date of the Offer. The price and other terms included in
         any Offer shall be no less favorable to the holders of the Series
         2007-B Preferred than those offered to any prospective third party
         purchaser.

                  9. Ranking. The Series 2007-B Preferred shall rank for
         purposes of dividends and distribution of assets on liquidation of the
         Corporation on a parity with the Series 2007-A Preferred and prior to
         all other existing series of preferred stock of the Corporation,
         including the Series 2006-B Preferred, the Series 2006-A Preferred, the
         Series 2003-A Preferred, the Series 2002-A Preferred, the Amended
         Series 2001-A Preferred, any other series of preferred stock which does
         not specifically state that it ranks prior to or on a parity with the
         Series 2007-A Preferred for such purposes, and the Common Stock, all of
         which shall be Junior Securities for purposes of this Certificate of
         Designation.

                        SIGNATURE PAGE FOLLOWS THIS PAGE.

                                       12
<PAGE>

         IN WITNESS WHEREOF, Harold's Stores, Inc. has caused this certificate
to be duly executed on its behalf by the undersigned, Ron Staffieri, Chief
Executive Officer, and attested by Jodi L. Taylor, its Secretary, this 26th day
of April, 2007.

                                     HAROLD'S STORES, INC.

                                     By: /s/ Ron Staffieri
                                         ---------------------------
                                         Ron Staffieri, Chief Executive Officer

Attest:

/s/ Jodi L. Taylor
-----------------------------
Jodi L. Taylor, Secretary

                                       13EXHIBIT 10.1
                                                                    ------------

          FIRST AMENDMENT TO SUBORDINATION AND INTERCREDITOR AGREEMENT

         This FIRST AMENDMENT TO SUBORDINATION AND INTERCREDITOR AGREEMENT (this
"First Amendment") is made as of April 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, and Amendment No. 6 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

         WHEREAS, as an inducement to Lender to consent to the Subordinated Loan
Agreement, Subordinated Creditor agreed to subordinate all obligations,
liabilities and

<PAGE>

indebtedness of Parent to Subordinated Creditor pursuant to that certain
Subordination and Intercreditor Agreement, dated as of August 31, 2006 (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 First 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
deleting the definitions of "Permitted Subordinated Debt Payments" and
"Subordinated Note" appearing therein in their entirety and replacing the same
with the following:

                           "PERMITTED SUBORDINATED DEBT PAYMENTS" means
         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; provided, however, until such time as
         the aggregate amount of interest accruing from and after March 1, 2007,
         under the Subordinated Note equals $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.

                           "SUBORDINATED NOTE" shall mean that certain Amended
         and Restated Subordinated Secured Promissory Note, dated as of April
         26, 2007, made by Parent to the order of Subordinated Creditor, in the
         face principal amount of $12,000,000, as the same may be amended,
         modified, restated and supplemented from time to time.

         B. Section 2.3(d) of the Subordination Agreement is hereby amended by
amending and restating such subpart in its entirety as follows:

                           (d) Notwithstanding the provisions of Section 2.3(a)
         preceding and irregardless of an occurrence and continuation of any
         Senior Default, Subordinated Creditor may receive and retain the
         following deemed payments in respect of the

                                        2
<PAGE>

         Subordinated Debt so long as such payments do not involve any cash
         payment by any Obligor to, or for the benefit of, Subordinated
         Creditor: (i) the payment of Subordinated Debt deemed to be 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 if the terms of such preferred
         stock have been approved by Senior Creditor; and (ii) the payment of
         Subordinated Debt deemed to be made as a result of an additional
         advance of Subordinated Debt for the account of Parent as a result of
         Parent's failure to make a scheduled interest payment in respect of the
         Subordinated Debt when due and payable.

         C. Section 2.6(b) of the Subordination Agreement is hereby amended by
amending and restating such subpart in its entirety as follows:

                           (b) Senior Creditor and Subordinated Creditor agree
         that, until the indefeasible payment in full in cash of all Senior Debt
         and all lending commitments under the Senior Debt Documents have been
         terminated, Senior Creditor shall (i) hold or control all of the
         collateral for the Senior Debt or the Subordinated Debt as to which the
         security interest therein is perfected by obtaining possession,
         dominion and control, recordation of collateral assignment with an
         insurer, or recordation of a mortgage with the Library of Congress, as
         applicable, of such collateral (the "Controlled Collateral") and (ii)
         for so long as the Controlled Collateral forms a part of the collateral
         for the Subordinated Debt, Senior Creditor shall be deemed to hold or
         control all of the Controlled Collateral pledged to the Subordinated
         Creditor pursuant to the Subordinated Loan Documents as agent, bailee
         or otherwise for the benefit of Senior Creditor and Subordinated
         Creditor for the limited purpose of perfecting the rights of
         Subordinated Creditor in and to the Controlled Collateral pursuant to
         the Subordinated Loan Documents. In the event that the Senior Debt is
         indefeasibly paid in full in cash and all lending commitments under the
         Senior Debt Documents have been terminated in accordance with the
         Senior Debt Documents, the Senior Creditor (a) will deliver such
         Controlled Collateral possessed by it to the Subordinated Creditor to
         the extent permitted by governing law and (b) upon Subordinated
         Creditor's request and at Subordinated Creditor's sole cost and
         expense, will assign (without representation, warranty or recourse) to
         Subordinated Creditor all of Senior Creditor's rights and interests
         under (i) any bailee agreement, collateral assignment, mortgage or
         similar agreements related to the Controlled Collateral in each
         instance to the extent permitted under applicable law and Senior
         Creditor's agreements with applicable third-parties, including, without
         limitation, any deposit account control agreements to the extent for
         the benefit of Senior Creditor and relating solely to the deposit
         accounts of Parent or Guarantors and (ii) any landlord waiver or
         agreement, third-party processor agreement, mortgagee waiver or
         agreement, warehouseman agreement or freight forwarder agreement in
         each instance to the extent permitted under applicable law and Senior
         Creditor's agreements with applicable third-parties. None of the
         foregoing provisions shall limit the ability of Senior Creditor to
         transfer (including pursuant to a Permitted Refinancing), release,
         adjust, foreclose,

                                        3
<PAGE>

         compromise or terminate its rights under or with respect to the Senior
         Debt, the Senior Debt Documents or any collateral related thereto or
         provided thereunder at the sole option of Senior Creditor. In the event
         that the Senior Debt is indefeasibly paid in full in cash and all
         lending commitments under the Senior Debt Documents have been
         terminated in accordance with the Senior Debt Documents and until such
         time as the Subordinated Debt has been indefeasibly paid in full in
         cash and all lending commitments under the Subordinated Debt Documents
         have been terminated, any Distribution or other asset of the Parent or
         any of the Guarantors received by Senior Creditor pursuant to the
         Senior Security Documents shall be held by the Senior Creditor in trust
         for the benefit of the Subordinated Creditor, and shall be promptly
         paid over to the Subordinated Creditor. Any provision to the contrary
         contained elsewhere in this Agreement notwithstanding, Senior Creditor
         shall not have any duties or responsibilities to act for or in the
         interest of Subordinated Creditor, nor shall Senior Creditor have or be
         deemed to have any fiduciary relationship with Subordinated Creditor,
         and no implied covenants, functions, responsibilities, duties,
         obligations or liabilities shall be read into this Agreement or
         otherwise exist against Senior Creditor; it being expressly understood
         and agreed that the use of the word "agent" is for convenience only,
         that Senior Creditor is merely providing an accommodation to
         Subordinated Creditor for purposes of assisting in the perfection of
         certain liens and security interests in the Controlled Collateral and
         certain other assets granted to Subordinated Creditor pursuant to the
         Subordinated Debt Documents. Senior Creditor shall have no obligation
         to obtain or maintain possession or dominion over all or any portion of
         the Controlled Collateral or to maintain any control agreement, access
         arrangement or other agreement, and Senior Creditor may elect at any
         time to forego such possession or dominion or release its claims or
         interests in such Controlled Collateral or terminate any related
         agreements providing access to or control over the assets of Parent or
         any Guarantor. The Subordinated Creditor will indemnify, defend and
         hold harmless (to the fullest extent permitted by law) the Senior
         Creditor for any claims, suites, actions, investigations, proceedings,
         damages and reasonable costs or expenses, in each including without
         limitation reasonable attorneys fees, incurred by Senior Creditor
         pursuant to this Section 2.6(b).

         D. The last sentence of Section 3.2 of the Subordination Agreement is
hereby amended by amending and restating such sentence in its entirety as
follows:

                           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 $12,000,000 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.)

                                        4
<PAGE>

         E. The first sentence of Section 15 of the Subordination Agreement is
hereby amended by amending and restating such sentence in its entirety as
follows:

                           This Agreement shall remain in full force and effect
         until the indefeasible payment in full in cash of the Senior Debt and
         the termination of all lending commitments under the Senior Debt
         Documents after which this Agreement shall terminate without further
         action on the part of the parties hereto; provided however, the
         obligations of the Senior Creditor and the liability of the
         Subordinated Creditor under Section 2.6(b) shall survive the
         termination of this Agreement.

         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 this First Amendment. Except as expressly provided in
this First Amendment, the execution and delivery of this First 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 First Amendment shall become effective
as of its date and shall bind all parties only upon the execution and delivery
to the Senior Creditor and 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 First
Amendment in accordance with its terms. This First 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 First
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

                                        5
<PAGE>

                  (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 First 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 First
Amendment in accordance with its terms. This First 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 First
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 First 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 First 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 Amended
and Restated Subordinated Secured

                                        6
<PAGE>

Promissory Note described in Section 2(A) above and the Global Amendment to
certain Subordinated Debt Documents, dated as of the date hereof.

         SECTION 9. COUNTERPARTS. This First 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 FIRST 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 FIRST AMENDMENT. This First 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]

                                        7
<PAGE>

         IN WITNESS WHEREOF, the undersigned Subordinated Lender has executed
this First 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 L. Anderson
                                           -------------------------------
                                       Name: Robert L. Anderson
                                             -----------------------------
                                       Title: President
                                              ----------------------------

<PAGE>

         IN WITNESS WHEREOF, the undersigned Senior Creditor has executed this
First 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
                                              ----------------------------

<PAGE>

IN WITNESS WHEREOF, the undersigned Parent and Guarantors have executed this
First 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
                                                   ---------------------------

<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
                                                   ---------------------------

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