LEASE AGREEMENT

Lease Agreement

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HAROLDS STORES INC

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Title: LEASE AGREEMENT
Governing Law: Oklahoma Date: 12/13/2005
Industry: Retail (Apparel) Law Firm: Harold's Stores, Inc. Sector: Services

LEASE AGREEMENT

THIS LEASE AGREEMENT (the "Lease") is made and entered into

this ______ day of September, 2005, by and between HD

Investments, LLC hereinafter called "Landlord", Harold's Stores,

Inc. and hereinafter called "Tenant".

ARTICLE I

PREMISES

1.1 Agreement to Lease. In consideration of the rents,

covenants and agreements hereinafter reserved and contained on

the part of Tenant to be observed and performed, the Landlord

demises and leases to the Tenant, and Tenant rents from Landlord,

those certain premises, which premises contain approximately

9,218 square feet and are comprised of the ground floor of the

building located at 765 Asp, Norman, Oklahoma and all rights and

appurtenances thereto, including, but not limited to, rights of

ingress and egress and parking, (hereinafter called the

"Premises"). In addition to the Premises located at 765 Asp,

Norman, Oklahoma being leased to Tenant hereunder, Tenant shall

have the right, and Landlord agrees to provide for the term of

this Lease, at no cost or expense to Tenant, thirty eight (38)

parking spaces, along with ingress and egress thereto, located at

770 DeBarr, Norman, Oklahoma shown on Exhibit B, for parking by

Tenant's employees, affiliates and if Tenant desires, Tenant's

customers. The right to the parking spaces shall be exclusive to

Tenant and the parking spaces shall be so marked and identified

for Tenant's exclusive use Monday through Friday 8:00 am to 6:00

pm. Landlord shall have the right to use such spaces after 6:00

pm on weekdays and all day Saturday and Sunday. Landlord agrees

to use reasonable efforts to enforce Tenant's exclusive rights to

said parking spaces.

At no time may more than four (4) of the thirty-eight (38)

parking spaces be located in space numbers forty (40) through

forty eight (48) in the alley, and at no time may more than four

(4) of Tenant's spaces be relocated to the alley adjacent to 770

DeBarr, as shown on Exhibit B. In the event Landlord relocates

four (4) or less of Tenant's spaces to such alley, and in

Tenant's reasonable opinion, new signage is required, Landlord

shall install and maintain such signage as is reasonably

acceptable to Tenant at Landlord's sole cost.

In addition to the Premises being leased to Tenant

hereunder, Tenant shall have the exclusive right to use for

storage, and Landlord agrees to provide to Tenant for the first

twelve (12) months of the lease term, the west one-third (1/3) of

the building located at 770 DeBarr, Norman, Oklahoma, along with

ingress and egress thereto. Tenant shall pay no rent or charges

for this additional space but Tenant shall pay to Landlord, for

such twelve (12) month period, Tenant's reasonable prorata share

of utilities for such space. Landlord has no maintenance,

repair, or any other obligations with respect to such additional

space other than to make it available to Tenant for Tenant's use

and Tenant has no obligation to maintain, repair or insure such

additional space.

ARTICLE II

TERM

2.1 Term of Lease. The term of this Lease shall be for

Sixty (60) months, beginning on the first day after the Closing

referred to in the Purchase Agreement described in Section 19.18

hereof ("Commencement Date"), and ending on the last day of the

sixtieth (60th) month after the Commencement Date thereafter,

(the "Expiration Date"), unless sooner terminated or extended, as

herein provided ("Initial Term"). Tenant shall have one (1)

option to extend this Lease for an additional five (5) year term

("Option Term"). In order for Tenant to exercise the option,

Tenant must give Landlord notice in writing, not later than three

(3) months prior to the Expiration Date.

ARTICLE III

RENT

3.1 Base Rent. Tenant shall pay Landlord as base rent

("Base Rent") for the Premises each month, without setoff or

deduction, and without any prior demand therefor the following:

For each year of the Initial Term, Tenant shall pay

Eight and 50/100 Dollars ($8.50) per square foot of Premises

per year ($78,353.00 per year) ($6,529.42 per month);

For each year of the Option Term, Tenant shall pay Nine

and 50/100 Dollars per square foot of Premises per year

($87,571.00 per year) ($7,297.58 per month). , The Base Rent

shall be paid in monthly installments and the first of such

monthly installments shall be due and payable on the

Commencement Date (prorated for such first month if the

Commencement Date is not the first day of a calendar month).

3.2 Common Area Maintenance. In addition to Base Rent, and

commencing at the same time as Base Rent commences under this

Lease, and payable monthly, Tenant shall pay to the Landlord a

common area maintenance charge, equal to Two Thousand Nine

Hundred Fifty and No/100 ($2,950.00) per year ($245.83 per month)

(the "CAM Charge"). This CAM Charge shall be subject to the

annual adjustment set forth in Section 3.2.1. Landlord shall use

the funds to pay the operating expenses of the property of which

the Premises is a part and the following:

(A) Salaries and wages of all the employees of Landlord

engaged in the operation, maintenance and security

of the parking lot located at 770 Debarr and

common areas, including taxes, insurance and

benefits relating thereto.

(B) All supplies and materials used in the operation,

maintenance and security of the parking lot

located at 770 Debarr and common areas.

utilities for the parking lot located at 770

Debarr and common areas, including the cost of

water, power and lighting.

(D) Costs of all maintenance and service agreements for

the parking lot located at 770 Debarr and common

areas and the equipment therein.

(E) Cost of all insurance relating to the parking lots

and other common areas located in the parking lot

located at 770 Debarr and common areas.

(F) Cost of landscaping and sidewalk maintenance in the

parking lot located at 770 Debarr and common

areas.

3.2.1 Adjustment of CAM Charge. At the end of each calendar

year, beginning December 31, 2006, the CAM Charge shall be

adjusted by adding it to the sum determined by multiplying the

initial CAM Charge by the percentage that the Consumer Price

Index for the 12th month of the lease year then ending has

increased over the Consumer Price Index for the first month of

the lease term. For the purposes of this Lease, Consumer Price

Index shall mean the Consumer Price Index, Dallas-Ft. Worth,

Texas, All Urban Consumers, all items (base index year 1982-

84=100), as published by the United State Department of Labor

Bureau of Labor Statistics. If the Consumer Price Index shall

become unavailable, Landlord shall substitute therefor a

comparable index based upon changes in the cost of living or

purchasing power of the consumer dollar published by another

government agency; if no index shall be available, then a

comparable index published by a major financial institution,

University or a recognized financial publication. In no event

shall Tenant's CAM Charge increase by more than five percent (5%)

from one calendar year to the next.

3.3 Net Rentable Area. The term "Net Rentable Area", as

used herein, shall refer to the area calculated within the

boundaries defined by any exterior building walls bounding the

Premises (measured to the outside surface of the outer glass

walls and the midpoint of outer finished column walls), the

centerline of any common wall separating the Premises from areas

leased or to be leased to other tenants, and the exterior of any

walls separating the Premises from any public corridors or other

common areas. Notwithstanding anything in this Lease to the

contrary, the Premises it is hereby stipulated for all purposes

that the number of square feet in the Premises and the "Net

Rentable Area" of the Premises shall be deemed to be 9,218 square

feet, whether same would be more or less as a result of minor

variations. Neither the rent payable hereunder nor any other

obligation of Tenant shall be reduced, increased or otherwise

affected by any determination that the number of square feet, or

the amount of Net Rentable Area contained, in the Premises is

other than that stipulated above.

3.4 Rent. For the purposes of this Lease, Rent shall mean

Base Rent and all other payments required to be paid by Tenant

pursuant to this Lease ("Additional Rent").

3.5 Late Charges. If Tenant fails to make any installment

of Rent, or any other sum due Landlord hereunder, within Ten (10)

days after Tenant receives written notice from Landlord of

Tenant's failure to timely pay, the Landlord may make or assess a

late charge of ten percent (10%) of the amount of each delinquent

payment. Any assessment of late charges by Landlord shall be

considered for all purposes as Additional Rent under the terms of

this Lease, and shall be added to and payable with the next

maturing monthly rental installment following such assessment.

Assessment by Landlord of a late charge as herein provided shall

be without prejudice to any remedies provided by law or under the

provisions hereof. No assessment, payment or acceptance of a

late charge shall operate as a waiver or estoppel of the right of

Landlord to declare a default hereunder, or to pursue any default

remedies provided by this Lease or by law. Such late charge

shall be earned from the day after the due date to the date paid.

ARTICLE IV

SECURITY DEPOSIT

4.1 Security Deposit. Intentionally Deleted.

ARTICLE V

CONDITION OF PREMISES

5.1 Intentionally Deleted

5.2 Landlord's Title. Landlord has the right to enter into

this Lease, and the Premises are accepted by Tenant subject to,

and Tenant agrees to abide by, all and singular, the easements,

restrictions, covenants, reservations, mineral reservations and

other matters affecting title to the Premises, provided same do

not interfere with Tenant's use and occupancy of the Premises and

Tenant's rights under this Lease.

ARTICLE VI

ALTERATIONS, ADDITIONS AND IMPROVEMENTS

6.1 Improvements by Tenant. Tenant shall not make or allow

to be made any exterior or structural alterations to the Premises

without first having the written consent of Landlord, such

consent not to be unreasonably withheld. At such time as Tenant

requests such consent of Landlord, Tenant shall submit plans and

specifications for such alterations or additions, and comply with

any and all reasonable requirements of Landlord. Tenant may make

interior non-structural alterations to the Premises and Tenant

may remove "removable trade fixtures", provided (1) any such

removal is made prior to the termination of this Lease; (2)

Tenant is not in default of any of the obligations or covenants

hereunder; (3) such removable trade fixtures were not constructed

with allowances provided by Landlord; and (4) such removal may be

effected without damages to the Premises, and Tenant promptly

repairs all damage caused by such removal at its sole expense.

All trade fixtures, merchandise, equipment and signs of every

description which are not removable or not removed in accordance

with the preceding, and any alterations or additions to the

Premises shall become the property of Landlord, and shall remain

upon and be surrendered with the Premises as part thereof at the

termination of this Lease. Tenant hereby waives all rights to

any payment or compensation therefor. Removable trade fixtures

shall include signs, tables, chairs, desks, wall brackets,

shelves, mirrors and business machines (provided same are not

permanently attached), but shall not include ducts, conduits,

wiring, pipes, paneling, wall covering or floor covering or other

permanently attached fixtures which cannot be removed without

damage to the Premises.

6.2 Signs. Tenant will not place or suffer to be placed or

maintained on any exterior door, wall or window of the Premises

any sign, awning or canopy, or advertising matter, or other thing

of any kind, and will not place or maintain any decoration,

lettering or advertising matter on the glass of any window or

door of the Premises without first obtaining Landlord's written

approval and consent. Tenant further agrees to maintain such

sign, awning, canopy, decoration, lettering, advertising matter

or other thing as may be approved in good condition and repair at

all times. Tenant, upon vacation of the Premises or the removal

or alteration of its sign, for any reason, shall be responsible

for the repair, painting and/or replacement of the building

surface where the sign is attached.

ARTICLE VII

REPAIR AND MAINTENANCE

7.1 Tenant's Maintenance. Tenant shall at its expense at

all times keep the Premises (including maintenance of exterior

entrances and all windows) and all plate glass, partitions,

doors, and trade fixtures, in good order, condition and repair

(including repair of damage from burglary or attempted burglary

of the Premises and reasonable periodic painting. Tenant

acknowledges that Landlord has no obligation to repair or

maintain the Premises, except as otherwise provided for in this

Lease.

7.2 Landlord's Option to Make Tenant Repairs. If Tenant

refuses or neglects to repair the Premises within thirty (30)

days after receipt of Landlord's written demand, Landlord may

make such repairs without liability to Tenant for any loss or

damage that may accrue to Tenant's merchandise, fixtures or other

property, or to Tenant's business by reason thereof, and upon

completion thereof, Tenant shall pay Landlord's cost for making

such repairs, plus twelve percent (12%) for overhead, upon

presentation of bills therefor, as Additional Rent.

7.3 Landlord's Maintenance. Landlord shall at its expense

at all times keep the roof, gutters and downspouts, exterior

walls, foundations, and structural portions, and the plumbing,

electrical and heating and air conditioning systems, of the

Premises and of the building of which the Premises is a part, as

well as the common areas pertaining thereto, in a good order,

condition and repair. Landlord shall also, at its expense, at all

times provide cooled air or heat, to the Premises so as to

maintain comfortable air temperature in the Premises at all

times.

7.4 Waste and Surrender. Tenant shall not commit or allow

any waste or damage to be committed on any portion of the

Premises, and upon expiration or sooner termination of the term

hereof, Tenant agrees to deliver up the Premises to Landlord in

the condition set out above, ordinary wear and tear and damage by

casualty excepted, and Landlord shall have the right to re-enter

and resume possession of the Premises.

7.5 Surrender of Keys. At the expiration of the tenancy

hereby created, Tenant shall surrender all keys for the Premises

to Landlord at the place then fixed for the payment of rent, and

shall inform Landlord of all combinations on locks, safes and

vaults, if any, in the Premises. Tenant shall not change locks

on the Premises without the prior written consent of the

Landlord.

ARTICLE VIII

UTILITIES

8.1 Service Provided. Landlord agrees to provide at its

expense, and at all times, adequate amounts of water, gas, sewer,

electricity and landline phone service to the Premises at the

places shown on Tenant's Plans (referred to in Exhibit C) or as

otherwise existing at the Premises if not shown on such plans,

for the operation of Tenant's business, but Landlord shall not be

liable to Tenant for any discontinuance or interruption of

service unless the negligence or willful acts or omissions of

Landlord, its agents, employees or contractors cause such

discontinuance or interruption. Tenant shall pay its prorata

share of charges incurred for the utility services used by Tenant

at the building of which the Premises is a part, which prorata

share shall be 54.76% of the water, gas, sewer and electrical

utility charges for such building. Landlord shall pay monthly the

total costs of all such utilities directly to the respective

utility companies and provide Tenant with a copy of each month's

bill. Tenant shall reimburse Landlord on a monthly basis for its

prorata share of such bill within fifteen (15) days after the

date Tenant receives such monthly bill from Landlord.

ARTICLE IX

INSURANCE AND INDEMNITY

9.1 Tenant's Insurance Requirements. At all times during

the term of the lease, the following insurance shall be

maintained with respect to the Premises and paid for by the

Tenant:

(A) Public Liability Insurance. Comprehensive public

liability insurance from reputable insurance

companies authorized to do business in the State

of Oklahoma in the amount of $1,000,000.00

combined single limit for personal injuries and

property damage. Such policies shall name the

Landlord and Tenant as insureds, as their

respective interests may appear.

(B) Personal Property Insurance. Personal property

insurance covering loss or damage to Tenant's

personal property located on the Premises.

insurance shall be obtained in amounts

satisfactory to Landlord covering any work which

Tenant may undertake, or have undertaken on

Tenant's behalf, with respect to the Premises.

Landlord shall be shown as loss payees under the

policy.

(D) Certificates of Insurance. The Tenant shall

furnish to the Landlord certificates of insurance,

and shall furnish proof of such insurance at any

time such proof is requested by Landlord. All

insurance required herein shall contain a

provision requiring at least thirty (30) days

prior written notice to the Landlord before any

cancellation, lapse or material change in policy

or any reduction in coverage.

9.2 Landlord's Liability Insurance and Fire and Extended

Coverage Insurance. Landlord shall maintain at its sole cost and

expense Public Liability Insurance for the common areas and for

that portion of the building and property of which the Premises

is a part which is not being leased to Tenant. Such insurance

shall comply with the requirements of Section 9.1(A) above.

Landlord also agrees to maintain at its sole cost and expense

fire and extended coverage insurance covering the Premises, the

building and property of which the Premises is a part including

the common areas and all improvements therein and additions

thereto (excluding Tenant's personal property), with the usual

industry standard extended coverage endorsements, together with

endorsements protecting against loss or damage from malicious

mischief, sprinkler leakage and vandalism, all in amounts of not

less than the replacement value and with insurance companies

authorized to do business in Oklahoma. This insurance shall inure

to the benefit of Tenant as well as Landlord. Tenant shall pay,

as Additional Rent, its prorata share of the premiums for the

fire and extended coverage insurance on the Premises, and the

building of which the Premises is a part, obtained by Landlord.

Tenant's prorata share of such premiums shall be 54.76% of the

costs of such fire and extended coverage insurance, and monthly,

Tenant shall pay Landlord the sum of Two Hundred Forty Five and

83/100 Dollars ($245.83) as an estimate of the premium for such

insurance. Within sixty (60) days after the end of each calendar

year, Landlord shall reconcile the monthly insurance and tax

payments (as hereinafter provided) against the actual insurance

premium and tax assessment due by Tenant for such year, and

notify Tenant if there is a deficiency or a surplus. If there is

a deficiency, Tenant shall pay same within thirty (30) days of

written notice from Landlord specifying the amount due; if there

is a surplus, Landlord shall credit the surplus against the

following year's monthly installments of rent and charges due to

Landlord by Tenant, unless it is the last year of the lease term

in which case Tenant shall be entitled to a refund. Tenant shall

not be entitled to interest on the insurance and tax deposits. In

no event shall the amounts Tenant owes Landlord for insurance

premiums referred to herein and the taxes referred to in Section

15.1 hereof, either individually or jointly, increase by more

than five percent (5%) from one calendar year to the next.

9.3 Indemnity. Tenant agrees to indemnify Landlord and save

Landlord harmless from and against any and all claims, actions,

damages, liability and expense in connection with loss of life,

personal injury and/or damage to property arising from or out of

any occurrence in, upon or at the Premises, or the occupancy or

use by Tenant of the Premises, or any part thereof, if occasioned

wholly or in part by any act or omission of Tenant, Tenant's

agents, contractors, employees, servants, or Tenant's

concessionaires. In case Landlord shall, without fault on

Landlord's part, be made a party to any litigation commenced by

or against Tenant, then Tenant shall protect and hold Landlord

harmless, and shall pay all costs, expenses and reasonable

attorney's fees incurred or paid by Landlord in connection with

such litigation.

Landlord agrees to indemnify Tenant and save Tenant harmless

from and against any and all claims, actions, damages, liability

and expense in connection with loss of life, personal injury

and/or damage to property arising from or out of any occurrence

in, upon or at the common area and portions of the building and

the property of which the Premises is a part which is not leased

by Tenant, or if occasioned wholly or in part by any act or

omission of Landlord, Landlord's agents, contractors, employees

or servants. In case Tenant shall, without fault on Tenant's

part, be made a party to any litigation commenced by or against

Landlord, then Landlord shall protect and hold Tenant harmless,

and shall pay all costs, expenses and reasonable attorney's fees

incurred or paid by Tenant in connection with such litigation.

9.4 Waiver of Subrogation. As long as their respective

insurers so permit, Landlord and Tenant hereby mutually waive

their respective rights of recovery against each other for any

loss insured by fire, extended coverage and other property

insurance policies existing for the benefit of the respective

parties. Each party shall apply to their insurers to obtain such

waivers. Each party shall obtain any special endorsements, if

required by their insurer to evidence compliance with the

aforementioned waiver.

9.5 Increase in Insurance Rates. In the event Tenant uses

the Premises for purposes other than as a "general office" and

such other use of the Premises causes Landlord's insurance rates

for the Premises to increase, Tenant shall pay the increase

within thirty (30) days after receipt of an itemized statement.

In the event any other occupants of the building in which the

Premises is located causes Landlord's insurance rates to

increase, such occupant, and not Tenant, shall be solely

responsible for paying such increase.

ARTICLE X

CASUALTY LOSS

10.1 Damage to Premises. If the Premises shall be damaged

by fire, the elements, unavoidable accident or other casualty,

but are not thereby rendered untenantable in whole or in part,

Landlord shall cause such damage to be repaired, and the Rent

shall not be abated. If by reason of such occurrence, the

Premises shall be rendered untenantable only in part, Landlord

shall, cause the damage to be repaired, and the Base Rent and

Additional Rent meanwhile shall be abated proportionately as to

the portion of the Premises rendered untenantable. If the

Premises shall be rendered wholly untenantable by reason of such

occurrence, the Landlord shall, cause such damages to be

repaired, and the Base Rent and Additional Rent meanwhile shall

abate until the Premises have been restored and rendered

tenantable, or Landlord or Tenant may, at such party's election,

terminate this Lease and the tenancy hereby created by giving to

the other, within the sixty (60) days following the date of said

occurrence, written notice of it's election to do so, and in the

event of such termination, Rent shall be adjusted as of such

date.

ARTICLE XI

SUBORDINATION

11.1 Subordination to First Mortgage. Provided any such

mortgagee recognizes and agrees in writing not to disturb

Tenant's rights under this Lease as long as Tenant is not in

default beyond any cure period, the Lease created hereunder is

subject and subordinate to any first mortgage which may now or

hereafter encumber the Premises and to all renewals and

modifications, consolidations, additional advances, replacements

and extensions thereof. This clause shall be self-operative and

no further instrument of subordination need be required by any

mortgagee. In confirmation of such subordination, however,

Tenant shall, at Landlord's request, execute promptly any

certificate or instrument that Landlord may reasonably require

provided it is in a form reasonably satisfactory to Tenant. In

the event of enforcement by the mortgagee under any such mortgage

of the remedies provided for by law or by any such mortgage,

Tenant will, upon the request of any person or party succeeding

to the interest of Landlord, as a result of such enforcement,

automatically become the tenant of such successor in interest,

without change in the terms or other provisions of this Lease;

provided, however, that such successor in interest shall not be

bound by: (1) any payment of Rent for more than one (1) month in

advance, except prepayments in the nature of security for the

performance by Tenant of Tenant's obligations under this Lease,

or (2) any amendment or modification of this Lease made without

written consent of such mortgagee. Upon request by any successor

in interest, Tenant shall execute and deliver any reasonable

instrument or instruments confirming this attornment no later

than the Commencement Date and at any time thereafter within

thirty (30) days after written request from Tenant, from time to

time, and in no event later than the Commencement Date, Landlord

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