Ronhow LLC Option Agreement

OPTION AGREEMENT

This Option Agreement (" Agreement ") is made effective this 30th day of April, 2004, by and between RONHOW, LLC, a Georgia limited liability company (the " Participant ") having an office at 3290 Northside Parkway, Suite 250, Atlanta, Georgia, 30302, Attention: Bob Anderson and Harold's Stores, Inc., an Oklahoma corporation (" Company ") with reference to the following circumstances:

Wells Fargo Retail Finance II, LLC (" WFRF ") has entered into certain secured financing agreements with Company and certain of its subsidiaries (collectively, the " Borrowers ") pursuant to which WFRF has made and may hereafter make loans to, and has provided and may hereafter provide financial accommodations for the benefit of the Borrowers pursuant to the terms of a Loan and Security Agreement dated February 5, 2003, as amended by Amendment No. 1 dated July 10, 2003 and Amendment No. 2 dated as of the date hereof (" Loan Agreement ").

Participant has previously acquired a $2,000,000 ongoing participation interest in the WFRF line of credit with the Borrowers (" Existing Participation ") and Participant is acquiring from WFRF an additional $2,000,000 ongoing participation interest (" New Participation ") in accordance with the terms of an Amended and Restated Participation Agreement dated the date hereof (" Participation Agreement ").

Participant desires to have an option to acquire shares of the Company's Series 2003-A Preferred Stock in the event that the New Participation is not repaid by the Borrowers on or before October 31, 2005 (" Option Start Date ").

The Company has authorized but unissued shares of Series 2003-A Preferred Stock under the terms of the Certificate of Designation of the Series 2003-A Preferred Stock filed with the Secretary of State of the State of Oklahoma on February 4, 2003 (the " Certificate ").

The existing holders of the Company's outstanding Amended Series 2001-A Preferred Stock, Series 2002-A Preferred Stock and Series 2003-A Preferred Stock have all consented to the transactions contemplated by this Agreement, the Loan Agreement and the Participation Agreement.

WFRF has consented to the terms of this Agreement.

NOW THEREFORE, in consideration of the foregoing recitals and the mutual promises, representations, warranties and covenants hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:Option to Purchase Shares of Series 2003-A Preferred Stock

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Option

. Subject to the terms and conditions of this Agreement, the Company grants to Participant an option (the " Option ") to purchase at a price per share (" Purchase Price Per Share ") of One Hundred Dollars ($100.00) up to 20,000 shares, plus such additional shares as may be purchased in exchange for forgiveness of accrued but unpaid interest on the New Participation (the " 2003-A Shares ") of authorized but unissued shares of its Series 2003-A Preferred Stock which may be exercised if the Company has not on or before the Option Start Date caused the New Participation to have been repaid in full. Unless otherwise designated by the Company at the time of any repayment, any repayments of Participant Advances (as defined in the Loan Agreement) shall be applied first to repayment of the New Participation and then to the repayment of the Existing Participation. Participant may purchase from the Company such number of 2003-A Shares as is equal to the principal amount of the N ew Participation remaining outstanding, plus any accrued but unpaid interest, at the date of Closing of the exercise of the Option divided by the Purchase Price Per Share. Participant may exercise the Option in whole or in part at any time after the Option Start Date and prior to the repayment in full by the Company of the New Participation by giving written notice of exercise to the Company after the Option Start Date. After the Option Start Date, if the Company intends to repay all or any part of the New Participation, it shall give at least ten (10) days written notice to the Participant and during such ten (10) day period, the Participant may exercise the Option in whole or in part. Payment of the Purchase Price for the 2003-A Shares which the Participant purchases by any exercise of the Option will be paid by the Participant by forgiving such portion of the principal amount of the New Participation equal to the purchase price of the 2003-A Shares purchased. Participant will execute and deliver such documents and instruments to evidence such forgiveness as either the Company or WFRF may request.

Conversion Price

. The Conversion Price (as defined in the Certificate) of the 2003-A Shares acquired upon any exercise of the Option shall be equal to the 20 day average of the closing prices of the Company's Common Stock as quoted on the American Stock Exchange for the twenty (20) trading days ending on April 29, 2004, or $2.524 per share. The Conversion Price shall be subject to adjustment as provided in the Certificate. All other terms of the 2003-A Shares shall be governed by the Certificate.

Closing

. The closing of the purchase and sale of the 2003-A Shares (the " Closing ") upon any exercise of the Option shall occur within ten (10) business days after the date of the Option exercise date. At the Closing, the Company shall deliver to Participant certificates representing the 2003-A Shares that the Participant is purchasing against payment of the Purchase Price therefore as provided above. At the Closing, the Company and Participant shall enter into an amendment (the " IRA Amendment ") to the Investor Rights Agreement dated as February 28, 2001 by and between the Company and Inter-Him, N.V. (" Inter-Him ") as amended by that certain First Amendment to Investor Rights Agreement dat ...