Exhibit 10.1
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AMENDMENT NO. 5 TO LOAN AND SECURITY AGREEMENT
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This AMENDMENT NO. 5 TO LOAN AND SECURITY AGREEMENT (this "Amendment")
is entered into as of August 31, 2006 (the "Effective Date"), by and among, on
the one hand, the lender identified on the signature page hereof (such lender,
together with its successors and assigns, is referred to hereinafter as the
"Lender"), XXXXX FARGO RETAIL FINANCE II, LLC, as collateral agent and
administrative agent (the "Agent") for the Lender and any other holder of
Obligations (as defined in the Loan Agreement referred to below) and, on the
other hand, HAROLD'S STORES, INC., an Oklahoma corporation ("Parent"), HAROLD'S
FINANCIAL CORPORATION, an Oklahoma corporation ("Harold's Finance"), HAROLD'S
DIRECT, INC., an Oklahoma corporation ("Harold's Direct"), HAROLD'S STORES OF
TEXAS, L.P., a Texas limited partnership ("Harold's Texas"), and HAROLD'S OF
JACKSON, INC., a Mississippi corporation ("Harold's Mississippi", and
collectively with Harold's Texas, Harold's Direct, Harold's Finance and Parent,
the "Borrowers" and each, a "Borrower").
BACKGROUND
FACT ONE: Lender, Agent, the Borrowers, and Harold's Stores of Georgia,
L.P., a Georgia limited partnership ("Harold's Georgia"), entered into that
certain Loan and Security Agreement, dated as of February 5, 2003, as amended by
each of the following amendments (as so amended, the "Loan Agreement"): (A) that
certain Amendment No. 1 to Loan and Security Agreement dated July 10, 2003, by
and among Lenders, Agent, Borrowers, and Harold's Georgia; (B) that certain
Amendment No. 2 to Loan and Security Agreement dated April 29, 2004, by and
among Lenders, Agent, the Borrowers and Harold's Georgia; (C) that certain
Amendment No. 3 to Loan and Security Agreement dated January 26, 2006, by and
among Lenders, Agent, the Borrowers and Harold's Georgia; and (D) that certain
Amendment No. 4 to Loan and Security Agreement, dated as of June 1, 2006, by and
among Lenders, Agent and the Borrowers.
FACT TWO: Pursuant to the Loan Agreement Lender has agreed to make
loans and other financial accommodations to, or for the benefit of, Borrowers on
the terms and otherwise subject to the conditions and limitations contained
therein.
FACT THREE: Borrowers have requested that Lender and Agent agree to
modify certain terms and conditions set forth in the Loan Agreement in the
manner set forth in this Amendment in order to permit the Borrowers to incur
certain subordinated indebtedness subject to the conditions and limitations
contained in the Loan Agreement, as amended by this Amendment.
FACT FOUR: Lender and Agent have agreed to modify certain terms and
conditions set forth in the Loan Agreement in the manner set forth in this
Amendment, subject in all cases to the fulfillment of the conditions set forth
in this Amendment.
NOW, THEREFORE, Lender, Agent and the Borrowers hereby modify,
supplement and amend the Loan Agreement as follows:
1. INCORPORATION OF DEFINITIONS. Capitalized terms used in this Amendment,
to the extent not otherwise defined herein, have the meanings assigned to such
terms in the Loan Agreement, as amended hereby.
2. AMENDMENTS AND ADDITIONS TO LOAN AGREEMENT.
2.1 ADDITIONAL DEFINITIONS. As of the Effective Date, Section 1.1 of
the Loan Agreement is hereby amended by the addition of the following
definition, in the appropriate alphabetical order:
"'Amendment No. 5' means Amendment No. 5 to Loan and Security
Agreement, dated as of August 31, 2006, by and among the Lenders, Agent
and Borrowers."
"'Intercreditor Agreement' means that certain Subordination and
Intercreditor Agreement, dated of even date with Amendment No. 5, by
and among Agent, Lender and Subordinated Lender, as the same may be
amended, modified and supplemented through writings signed by each
party thereto."
"'Qualified De-registration Transaction' means a restructuring or
reorganization of Parent on terms acceptable to Agent for the primary
purpose of eliminating Parent's obligation to maintain any registration
with the SEC pursuant to Section 12(g) of the Securities Exchange Act
of 1934; provided, that each of the following conditions shall be
fulfilled to the satisfaction of Agent and Lenders: (a) such
transaction shall have been approved by the Board of Directors of
Parent; (b) Agent shall have received, and be entitled to rely upon, a
written opinion acceptable to Agent that any such transaction,
including the payments to be made thereunder to shareholders of Parent,
is made in compliance with the Oklahoma General Corporation Act and
applicable laws regarding fraudulent conveyances; (c) no Default or
Event of Default (for purposes hereof the existence or creation of any
Overadvance shall be deemed to be a Default hereunder) shall have
occurred and be continuing at the time of such transaction (or any
portion thereof to the extent effected through multiple transactions)
or shall result therefrom; (d) the aggregate costs and expenses
incurred in connection with such transaction (whether in respect of
payments to shareholders or fees, costs and expenses paid to
professionals or other Persons in connection with the evaluation and
analysis of such transaction) shall not exceed $300,000; and (e) Agent
shall have received evidence that no portion of the payments (whether
in respect of payments to shareholders or fees, costs and expenses paid
to professionals or other Persons in connection with the evaluation and
analysis of such transaction) to be made in connection with such
transaction are to be funded through an advance under this Agreement.
"'Subordinated Indebtedness' means Indebtedness incurred by
Borrowers and certain Guarantors pursuant to the Subordinated Loan
Documents."
"'Subordinated Lender' means RonHow, LLC, a Georgia limited
liability company, together with its successors and assigns, in each
instance to the extent permitted pursuant to the Intercreditor
Agreement."
AMENDMENT NO. 5 TO LOAN AND SECURITY AGREEMENT - Page 2
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"'Subordinated Loan Documents' means each of the following, in
each case dated of even date with Amendment No. 5 unless otherwise
noted: (a) that certain Subordinated Loan Agreement by and between
Parent and Subordinated Lender; (b) that certain Subordinated Secured
Promissory Note executed by Parent and payable to the order of
Subordinated Lender in the stated principal amount of up to
$10,000,000; (c) that certain Subordinated Guaranty executed by certain
Subsidiaries of Parent for the benefit of Subordinated Lender; (d) that
certain Subordinated Security Agreement, contemplated to be entered
into by Parent and certain of its Subsidiaries as of the date of
Amendment No. 5 or promptly thereafter, for the purpose of securing the
obligations of Parent and certain of its Subsidiaries pursuant to the
aforementioned Subordinated Loan Agreement, Subordinated Secured
Promissory Note and Subordinated Guaranty, as applicable; and (e) all
other instruments, documents, agreements, certificates from time to
time delivered pursuant to, in connection with, or otherwise securing
obligations under any of the foregoing."
2.2 REVISION TO EXISTING DEFINITIONS. As of the Effective Date, the
definition of the term "Solvent" set forth in Section 1.1 of the Loan Agreement
is hereby deleted in its entirety and the definitions of the terms "Permitted
Lien" and "Preferred Permitted Payments" are hereby amended and restated to read
in their entirety as follows:
"Permitted Liens" means (a) Liens held by Agent for the benefit of
Agent and the Lenders, (b) Liens for unpaid taxes that either (i) are
not yet delinquent, or (ii) do not constitute an Event of Default
hereunder and are the subject of Permitted Protests, (c) Liens set
forth on Schedule P-1, (d) the interests of lessors under operating
leases, (e) purchase money Liens or the interests of lessors under
Capital Leases to the extent that such Liens or interests secure
Permitted Purchase Money Indebtedness and so long as such Lien attaches
only to the asset purchased or acquired and the proceeds thereof, (f)
Liens arising by operation of law in favor of warehousemen, landlords,
carriers, mechanics, materialmen, laborers, or suppliers, incurred in
the ordinary course of business and not in connection with the
borrowing of money, and which Liens either (i) are for sums not yet
delinquent, or (ii) are the subject of Permitted Protests, (g) Liens
arising from deposits made in connection with obtaining worker's
compensation or other unemployment insurance, (h) Liens or deposits to
secure performance of bids, tenders, or leases incurred in the ordinary
course of business and not in connection with the borrowing of money,
(i) Liens granted as security for surety or appeal bonds in connection
with obtaining such bonds in the ordinary course of business, (j) Liens
resulting from any judgment or award that is not an Event of Default
hereunder, (k) Liens with respect to the Real Property Collateral that
are exceptions to the commitments for title insurance issued in
connection with the Mortgages, as accepted by Agent, (l) with respect
to any Real Property that is not part of the Real Property Collateral,
easements, rights of way, and zoning restrictions that do not
materially interfere with or impair the use or operation thereof and
(m) Liens securing the Subordinated Indebtedness permitted to be
incurred and maintained in accordance with the limitations set forth at
Section 7.1(g) and that are subordinated to all Liens for the benefit
of Agent or the Lenders pursuant to the Intercreditor Agreement."
AMENDMENT NO. 5 TO LOAN AND SECURITY AGREEMENT - Page 3
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"Preferred Permitted Payments' means the payment of dividends in
respect of the Series 2002-A Preferred Stock of Parent, the Amended
Series 2001-A Preferred Stock, the Series 2003-A Preferred Stock, the
Series 2006-A Preferred Stock and the Series 2006-B Preferred Stock of
Parent (in each case when issued in whole or part as contemplated by
Schedule 5.8) to the extent each of the following conditions precedent
is met at the time such dividends are declared and at the time such
dividends are paid: (a) such dividends are made at the times, in the
amounts and otherwise in accordance with the applicable Certificate of
Designation as in effect on the Closing Date (or in the case of the
Series 2006-A Preferred Stock on January 24, 2006 or the case of the
Series 2006-B the applicable certificate of designation applicable to
such shares as filed in connection with the transactions contemplated
by Amendment No. 5), or in such lesser amount as may be required
thereunder pursuant to any amendment or modification of such
certificates of designation; (b) no Default or Event of Default shall
have occurred and be continuing as of either of such dates; and (c) no
Default or Event of Default shall result from the payment or
declaration of such dividend."
2.3 AMENDMENTS TO SECTIONS 5.12, 7.1, 7.3(a), 7.8, 7.11 AND 8.11. As
of the Effective Date, the following referenced Sections of the Loan Agreement
are hereby amended as set forth below:
(a) SECTION 5.12 of the Loan Agreement is hereby amended and
restated to read in its entirety as follows:
"5.12. Fraudulent Transfer. No transfer of property is being made
by any Borrower and no obligation is being incurred by any Borrower in
connection with the transactions contemplated by this Agreement or the
other Loan Documents with the intent to hinder, delay, or defraud
either present or future creditors of Borrowers."
(b) SECTION 7.1(E) and SECTION 7.1(F) are hereby amended and
restated in their entirety to read as follows and a new SECTION 7.1(G) is hereby
added to read in its entirety as follows:
"(e) Indebtedness composing Permitted Investments;
(f) Indebtedness composing trade payables incurred in
the ordinary course of Borrowers' business that are repayable in
accordance with customary trade practices and which remain unpaid more
than 30 days past their originally specified due dates, to the extent
the aggregate amount of such trade payables do not exceed an amount
equal to 30% of all trade payable incurred by Borrowers' in the
ordinary course of their business; and
(g) Subordinated Indebtedness in an aggregate
principal amount not to exceed $10,000,000 at any time outstanding and
to the extent (i) such Indebtedness shall be evidenced by Subordinated
Loan Documents in form and substance satisfactory to Agent; and (ii)
such Indebtedness, and any Liens securing the same, shall be
subordinated to the Obligations, and any Liens securing the same,
pursuant to the Intercreditor Agreement."
AMENDMENT NO. 5 TO LOAN AND SECURITY AGREEMENT - Page 4
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(c) SECTION 7.3(A) is hereby amended and restated to read in
it entirety as follows:
"(a) Other than in connection with a Qualified
De-registration Transaction, enter into any merger, consolidation,
reorganization, or recapitalization, or reclassify its Stock or
otherwise change any Borrower's type of organization, jurisdiction of
organization or other legal or corporate structure (other than mergers
of one or more Borrowers with and into another Borrower)."
(d) A new SECTION 7.8(C) is hereby added to the Loan Agreement to
read in its entirety as follows:
"(c) Make any payment on account of Indebtedness
(including any portion of the Subordinated Indebtedness) that has been
contractually subordinated in right of payment to the Obligations if
such payment is not permitted at such time under the subordination
terms and conditions (including the terms of the Intercreditor
Agreement with respect to the Subordinated Indebtedness)."
(e) SECTION 7.11 is hereby amended and restated to read in its
entirety as follows:
"7.11. Distributions. Except for Permitted Preferred Payments or
payments made in connection with a Qualified De-registration
Transaction in an aggregate amount not to exceed $300,000, make or
permit any other Borrower to, directly or indirectly (i) declare,
order, pay or make any Restricted Payment or (ii) set aside any sum or
property therefor or exercise any set-off or similar rights of any
Borrower, if any, with respect to any indebtedness that is the subject
of an intercreditor and subordination agreement."
(f) SECTION 8.11 is hereby amended and restated to read in its
entirety as follows:
"8.11 If any Borrower or any of their respective Subsidiaries (a)
makes any payment on account of Indebtedness (including any portion of
the Subordinated Indebtedness) that has been contractually subordinated
in right of payment to the payment of the Obligations, except to the
extent such payment is permitted by the terms of the subordination
provisions applicable to such Indebtedness or (b) there shall occur any
default or event of default (including the occurrence of any event or
circumstance that with the giving of notice or the passage of time or
both would result in the occurrence of a default or event of default)
however denominated in respect of any Indebtedness (including the
Subordinated Indebtedness) that has been contractually subordinated in
right of payment to the Obligations;"
2.4 ADDITION OF SECTION 6.19. As of the Effective Date, a new Section
6.19 is hereby added to the Loan Agreement to read in its entirety as follows:
AMENDMENT NO. 5 TO LOAN AND SECURITY AGREEMENT - Page 5
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"6.19. Incurrence of Additional Subordinated Indebtedness. Parent
shall deliver to Agent written notice of its intention to incur
additional Subordinated Indebtedness (which additional Indebtedness
shall remain within the limitations set forth at Section 7.1(g)) at
least ten (10 ) days prior to the incurrence of such additional
Subordinated Indebtedness; provided, however, such 10-day notice shall
not be required in the event an advance under the Subordinated
Indebtedness is permitted without such notice pursuant to the
Intercreditor Agreement."
2.5 WAIVER OF EVENTS OF DEFAULT. Agent and Lender have been informed
that one or more Events of Default may have occurred and be continuing as a
result of the violation of the Borrowers' representation set forth at Section
5.12(a) (representing that the Borrowers are Solvent) of the Loan Agreement as
in effect immediately prior to this Amendment. Any such Event of Default
resulting from the violation of Borrowers' representation pursuant to Section
5.12(a) of the Loan Agreement prior to and for the period through the Effective
Date, is hereby waived. The waiver agreed to in this Section 2.5 (a) is strictly
limited to the referenced Events of Default, and except as expressly set forth
herein, all the other terms, provisions and conditions of the Loan Agreement
shall remain in full force and effect, (b) shall not extend nor be deemed to
extend to any other Default or Event of Default that may now exist or hereafter
arise under the Loan Agreement or any of the other Loan Documents, whether
similar or dissimilar to the provision waived herein, (c) shall not impair,
restrict or limit any right or remedy of Agent or any Lender with respect to any
other Default or Event of Default that may now exist or hereafter arise under
the Loan Agreement or any of the other Loan Documents, and (d) shall not
constitute any course of dealing or other basis for altering any obligation of
any Borrower or any right, privilege or remedy of Agent or any Lender under the
Loan Agreement or any of the other Loan Documents.
2.6 UPDATE OF SCHEDULE 5.8 TO LOAN AGREEMENT. As of the Effective
Date, Schedules 5.8(b) and 5.8(c) to the Loan Agreement are hereby combined,
amended and restated in their entirety to read as set forth hereto as Schedule
5.8 attached hereto and incorporated herein, and from and after the Effective
Date all references to either Schedule 5.8(b) or Schedule 5.8(c) shall be to
such combined, amended and restated schedule.
3. RATIFICATIONS, REPRESENTATIONS AND WARRANTIES.
3.1 RATIFICATIONS. Except as expressly amended and supplemented by
this Amendment, the terms and provisions of the Loan Agreement are ratified and
confirmed and continue in full force and effect. The Borrowers hereby agree that
the Loan Agreement, as amended hereby, continues to be legal, valid, binding and
enforceable against Borrowers in accordance with its terms and hereby reaffirm
each covenant and agreement set forth therein.
3.2 REPRESENTATIONS AND WARRANTIES. In order to induce Agent and
Lender to enter into this Amendment, each Borrower makes the following
representations and warranties to Lender as to itself:
(a) the execution, delivery and performance of this Amendment and
any and all other Loan Documents executed and/or delivered in
connection herewith have been authorized by all requisite corporate or
limited partnership power, as appropriate, on the
AMENDMENT NO. 5 TO LOAN AND SECURITY AGREEMENT - Page 6
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part of the Borrower and will not violate any of its constituent
documents (including, as applicable, its articles of incorporation,
certificate of incorporation, by-laws, partnership agreement and
certificate of limited partnership) or any other agreement to which
Borrower is a party or by which its properties may be bound;
(b) the representations and warranties contained in the Loan
Agreement, as amended hereby, and any other Loan Document are true and
correct in all material respects on and as of the date hereof as though
made on and as of the date hereof (except to the extent that such
representations and warranties relate solely to an earlier date or
violations have been disclosed to Agent in writing and approved in
writing by Agent); and
(c) no Default or Event of Default (other than those waived
pursuant to Section 2.5 of this Amendment) has occurred or is
continuing under the Loan Agreement, and no Default or Event of Default
will result from the execution, delivery or performance of this
Amendment or the consummation of the transactions herein authorized by
Lender.
4. FURTHER ASSURANCES.
The Borrowers hereby agree, upon Agent's request (i) to deliver to
Agent such fully authorized and executed agreements and instruments, including,
but not limited to, any amendments to Loan Documents, within 10 days of such
request, and (ii) to take such actions as Agent, in its Permitted Discretion,
deems necessary and appropriate in connection with the transactions contemplated
by this Amendment.
5. CHOICE OF LAW.
THE VALIDITY OF THIS AMENDMENT AND ALL OTHER LOAN DOCUMENTS (UNLESS
EXPRESSLY PROVIDED TO THE CONTRARY THEREIN), THE CONSTRUCTION, INTERPRETATION,
AND ENFORCEMENT HEREOF AND THEREOF, AND THE RIGHTS OF THE PARTIES HERETO AND
THERETO WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR THEREUNDER OR RELATED
HERETO OR THERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS.
6. GENERAL PROVISIONS.
6.1 EFFECTIVENESS. The effectiveness of this Amendment and the
enforceability of the terms hereof against Borrowers, Agent and Lender are
subject to fulfillment of each of the following conditions precedent:
(a) Lender's execution of this Amendment and receipt of one or
more counterparts of this Amendment duly executed by each Borrower; and
AMENDMENT NO. 5 TO LOAN AND SECURITY AGREEMENT - Page 7
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(b) Lender's receipt of a consent and reaffirmation of the
obligations of each Guarantor under the Continuing Guaranty and
Security Agreement, in form acceptable to Lender; and
(c) Lender's receipt of copies of any and all documents and
instruments executed in connection with the incurrence of the
Subordinated Indebtedness, which documents shall be in each instance
acceptable to Agent and Lender in their sole discretion.
6.2 SECTION HEADINGS. Headings and numbers have been set forth herein
for convenience only. Unless the contrary is compelled by the context,
everything contained in each Section applies equally to this entire Amendment.
6.3 SEVERABILITY OF PROVISIONS. Each provision of this Amendment will
be severable from every other provision of this Amendment for the purpose of
determining the legal enforceability of any specific provision.
6.4 COUNTERPARTS; TELEFACSIMILE EXECUTION. This Amendment may be
executed in any number of counterparts and by different parties on separate
counterparts, each of which, when executed and delivered, will be deemed to be
an original, and all of which, when taken together, will constitute but one and
the same Amendment. Delivery of an executed counterpart of this Amendment by
telefacsimile will be equally as effective as delivery of an original executed
counterpart of this Amendment. Any party delivering an executed counterpart of
this Amendment by telefacsimile also will deliver an original executed
counterpart of this Amendment but the failure to deliver an original executed
counterpart will not affect the validity, enforceability, and binding effect of
this Amendment. The foregoing shall apply to each other Loan Document MUTATIS
MUTANDIS.
6.5 INTEGRATION. This Amendment, the Loan Agreement and the other Loan
Documents contain the entire agreement between the parties relating to the
transactions contemplated hereby. All prior or contemporaneous understandings,
representations, statements and agreements, whether written or oral, are merged
herein and superseded by this Agreement. THIS WRITTEN AMENDMENT, THE LOAN
AGREEMENT, AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN
THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.
6.6 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations
and warranties made herein and in the Loan Agreement, as amended hereby, will
survive the execution and delivery of this Amendment, and no investigation by
Agent or Lender or any closing shall affect the representations and warranties
or the right of Agent or Lender to rely upon them.
6.7 REFERENCE TO LOAN AGREEMENT. The Loan Agreement, as amended
hereby, and all other agreements, documents or instruments now or hereafter
executed and delivered pursuant to the terms thereof are hereby amended so that
any reference in the Loan Agreement or such
AMENDMENT NO. 5 TO LOAN AND SECURITY AGREEMENT - Page 8
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other agreements, documents and instruments will mean a reference to the Loan
Agreement, as amended hereby.
6.8 EXPENSES OF LENDER. The Borrowers agree to pay on demand all
reasonable costs and expenses incurred by Lender in connection with the
preparation, negotiation and execution of this Amendment, including, without
limitation, the reasonable costs and fees of Agent's or Lender's legal counsel.
In addition, the Borrowers agree to pay on demand: (a) all costs and expenses
incurred by Agent or Lender in connection with the enforcement or preservation
of any rights under the Loan Agreement, as amended hereby, or any agreement,
document or instrument executed in connection therewith, including without
limitation this Amendment; and (b) all reasonable costs and expenses incurred by
Agent or Lender in connection with the preparation, negotiation and
administration of this Amendment, including the reasonable fees and costs of
Agent's and Lender's legal counsel.
6.9 SUCCESSORS AND ASSIGNS. This Amendment is binding upon and will
inure to the benefit of Agent, Lender and each Borrower and their respective
successors and assigns, except that no Borrower may assign or transfer any of
its rights or obligations hereunder without the prior written consent of Agent.
6.10 RELEASE. EACH BORROWER HEREBY ACKNOWLEDGES THAT IT HAS NO DEFENSE,
COUNTERCLAIM, OFFSET, CROSS-COMPLAINT, CLAIM OR DEMAND OF ANY KIND OR NATURE
WHATSOEVER THAT CAN BE ASSERTED TO REDUCE OR ELIMINATE ALL OR ANY PART OF ITS
LIABILITY TO REPAY THE OBLIGATIONS (AS DEFINED IN THE LOAN AGREEMENT) OR TO SEEK
AFFIRMATIVE RELIEF OR DAMAGES OF ANY KIND OR NATURE FROM AGENT, LENDER AND THEIR
RESPECTIVE PREDECESSORS, AGENTS, OFFICERS, DIRECTORS, MEMBERS, AFFILIATES,
EMPLOYEES AND REPRESENTATIVES, SUCCESSORS AND ASSIGNS. EACH BORROWER HEREBY
VOLUNTARILY AND KNOWINGLY RELEASES AND FOREVER DISCHARGES AGENT, LENDER AND
THEIR RESPECTIVE PREDECESSORS, AGENTS, OFFICERS, DIRECTORS, MEMBERS, AFFILIATES,
EMPLOYEES AND REPRESENTATIVES, SUCCESSORS AND ASSIGNS, FROM ALL POSSIBLE CLAIMS,
DEMANDS, ACTIONS, CAUSES OF ACTION, DAMAGES, COSTS, EXPENSES, AND LIABILITIES
WHATSOEVER, KNOWN OR UNKNOWN, ANTICIPATED OR UNANTICIPATED, SUSPECTED OR
UNSUSPECTED, FIXED, CONTINGENT, OR CONDITIONAL, AT LAW OR IN EQUITY, ORIGINATING
IN WHOLE OR IN PART ON OR BEFORE THE DATE THIS AMENDMENT IS EXECUTED, WHICH SUCH
BORROWER MAY NOW OR HEREAFTER HAVE AGAINST AGENT, LENDER AND THEIR RESPECTIVE
PREDECESSORS, OFFICERS, DIRECTORS, MEMBERS, AFFILIATES, EMPLOYEES AND
REPRESENTATIVES, SUCCESSORS AND ASSIGNS, IF ANY, AND IRRESPECTIVE OF WHETHER ANY
SUCH CLAIMS ARISE OUT OF CONTRACT, TORT, VIOLATION OF LAW OR REGULATIONS, OR
OTHERWISE, AND ARISING FROM ANY OBLIGATIONS (AS DEFINED IN THE LOAN AGREEMENT),
INCLUDING, WITHOUT LIMITATION, ANY CONTRACTING FOR, CHARGING, TAKING, RESERVING,
COLLECTING OR RECEIVING INTEREST IN EXCESS OF THE MAXIMUM RATE, THE EXERCISE OF
ANY RIGHTS AND REMEDIES UNDER
AMENDMENT NO. 5 TO LOAN AND SECURITY AGREEMENT - Page 9
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THE LOAN AGREEMENT OR ANY AGREEMENT, DOCUMENT OR INSTRUMENT ENTERED INTO IN
CONNECTION THEREWITH.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
AMENDMENT NO. 5 TO LOAN AND SECURITY AGREEMENT - Page 10
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed and delivered as of the date first above written.
BORROWERS:
HAROLD'S STORES, INC.
By /s/ Xxxxxxx X. Xxxxxx
--------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Interim CEO
HAROLD'S FINANCIAL CORPORATION
By:/s/ Xxxxxxx X. Xxxxxx
-------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Interim CEO
HAROLD'S DIRECT, INC.
By:/s/ Xxxxxxx X. Xxxxxx
-------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Interim CEO
HAROLD'S STORES OF TEXAS, L.P.
By: HSTX, Inc., General Partner
By: Xxxxxxx X. Xxxxxx
-------------------
Name: Xxxxxxx X. Xxxxxx
Title: Interim CEO
HAROLD'S OF XXXXXXX, INC.
By: /s/ Xxxxxxx X. Xxxxxx
------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Interim CEO
AMENDMENT NO. 5 TO LOAN AND SECURITY AGREEMENT - Signature Page
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AGENT AND LENDER:
XXXXX FARGO RETAIL
FINANCE II, LLC,
AS AGENT AND LENDER
By: /s/ Xxxx Xxxxxxxx
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Xxxx Xxxxxxxx, Vice President
AMENDMENT NO. 5 TO LOAN AND SECURITY AGREEMENT - Signature Page
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SCHEDULE 5.8
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Aug. 31,
2006
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Authorized Stock Outstanding Stock Reserved for Options/
---------------- ----------------- Conversions/Warrants/
Dividends(1)
Company Common Preferred Common Preferred Common(2) Preferred
------- ------ --------- ------ --------- --------- ---------
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Harold's Stores, Inc. 25,000,000 Series 2001-A 500,000 6,223,508 Series 2001-A 342,653 157,437
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Series 2002-A 300,000 Series 2002-A 231,550 68,450
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Series 2003-A 100,000 Series 2003-A 56,742 43,258
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Series 2006-A 75,000 Series 2006-A 25,000 50,000
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Series 2006-B 25,000 Series 2006-B -- 25,000
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Harold's Financial
Corporation 20,000 180,000 20,000 180,000
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Harold's Direct, Inc. 50,000 N/A 50,000 N/A
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Harold's Limited Partners,
Inc. 50,000 N/A 500 N/A
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Harold's DBO, Inc. 50,000 N/A 1,000 N/A
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HSTX, Inc. 50,000 N/A 1,000 N/A
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Harold's of Xxxxxxx, Inc. 50,000 50,000 50,000 50,000
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The Corner Properties, Inc. 50,000 N/A 50,000 N/A
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Harold's of White Flint,
Inc. 10,000 N/A 10,000 N/A
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Harold's Stores of Texas, L.P.- owned by HSTX, Inc. (1%) and Harold's Limited Partners, Inc. (99%)
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(1) Holders of Preferred stock have rights to receive dividends in kind and RonHow LLC has rights to various series of Preferred
Stock pursuant to conversion of indebtedness or exercise of warrants
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(2) All remaining shares of Common Stock are reserved for issuance pursuant to outstanding options under the Company's Stock Option
Plan or upon conversion of Preferred Stocks
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