EXHIBIT 10.1
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RonHow, LLC
3290 Northside Parkway
Suite 250
Atlanta, GA 30302
March 30, 2007
Harold's Stores, Inc.
765 Asp Avenue
Norman, OK 73069
Attn: Jodi Taylor,
Chief Financial Officer
Dear Jodi:
In
conjunction with discussions among Harold's Stores, Inc. and
its
majority investors regarding continued financial support for
Harold's, the
parties have developed a short-term financing plan as outlined in
the attached
summary term sheet.
Given Harold's immediate need for cash, RonHow is willing to make
an
additional $2 million advance under the existing Subordinated Loan
Agreement and
related note, each dated as of August 31, 2006. As a condition to
making this
advance, RonHow is requiring that Harold's agree to the
following:
1.
Subject to the
approval of Harold's senior lender, Wells Fargo Retail
Finance II, LLC, interest will accrue on this $2 million advance at
a
rate of 18.0% per annum. Upon such approval, the 18.0% per annum
rate
will be applied retroactively to the date of the advance, in place
of
the 13.5% per annum rate otherwise applicable pursuant to the
current
terms of the subordinated note.
2.
Harold's will
use commercially reasonable efforts to obtain, as
promptly as practicable, the approval of Wells Fargo for the 18.0%
per
annum interest rate on such advance.
3.
Harold's will
execute and deliver, and cause the guarantors of the
subordinated loan to execute and deliver, any and all documents
reasonably requested by RonHow to evidence the 18.0% per annum
interest rate accruing on the advance and the continuing
effectiveness
of the guaranty and security provided by the guarantors with
respect
to all of the indebtedness outstanding under the subordinated
debt
facility, including this additional advance.
4.
Harold's will
use commercially reasonable efforts to obtain, as
promptly as practicable, the consent and approval of Wells Fargo
to
all aspects of the proposed
<PAGE>
Harold's Stores, Inc.
RonHow, LLC
Page 2
short-term financing plan as described in the attached summary
term
sheet that require Wells Fargo's approval.
If
Harold's is in agreement with the above conditions to the $2
million
advance, please execute the enclosed copy of this letter in the
place indicated
below and return it to me.
Sincerely,
/s/ Robert L. Anderson
-----------------------------
Robert L. Anderson
President, Ronus, Inc.,
Managing Member of RonHow, LLC
Accepted and agreed to on behalf of Harold's Stores, Inc.
By: /s/ Jodi
L. Taylor
Title: Chief
Financial Officer
Date:
March 30, 2007
<PAGE>
SUMMARY TERM SHEET
HAROLD'S STORES, INC.
$3,000,000 DRAW-DOWN OF SUBORDINATED DEBT
INCREASE OF SUBORDINATED DEBT FACILITY
ISSUANCE OF 2007-A SENIOR PREFERRED STOCK
AND
AUTHORIZATION OF 2007-B SENIOR PREFERRED STOCK
March 30, 2007
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This Term Sheet summarizes the principal terms of additional
advances
under the previously-established $10,000,000 subordinated loan
agreement between
Harold's Stores, Inc. (the "Company") and RonHow, LLC ("RonHow"),
the increase
of the maximum principal amount under the subordinated loan
agreement to
$12,000,000, the creation of new Series 2007-A and Series 2007-B
Senior
Preferred Stock and the exchange of $2 million of existing
subordinated debt for
shares of Series 2007-A Se
