Reaffirmation of Continuing Guaranty by The Corner Properties, Inc., Harold's DBO, Inc., Harold's Limited Partners, Inc., Harold's of White Flint, Inc., HSGA, Inc., and HSTX, Inc. in Favor of Wells Fargo Retail Finance II, LLC

Summary

This agreement, dated June 1, 2006, is a reaffirmation by The Corner Properties, Inc. and several related companies of their ongoing guaranty and security obligations to Wells Fargo Retail Finance II, LLC, as part of a loan arrangement. The parties confirm that their guaranty remains valid and enforceable, is not subject to any defenses or offsets, and is unaffected by recent amendments to the underlying loan agreement. The companies also reaffirm all liens and security interests previously granted to the lender.

EX-10.5 6 exh10-5_14431.txt REAFFIRMATION OF CONTINUING GUARANTY EXHIBIT 10.5 ------------ REAFFIRMATION OF CONTINUING GUARANTY ------------------------------------ The undersigned, (a) THE CORNER PROPERTIES, INC., an Oklahoma corporation, (b) HAROLD'S DBO, INC., a Texas corporation, (c) HAROLD'S LIMITED PARTNERS, INC., an Oklahoma corporation, (d) HAROLD'S OF WHITE FLINT, INC., a Maryland corporation, (e) HSGA, INC., a Georgia corporation, and (f) HSTX, INC., a Texas corporation, have executed that certain Continuing Guaranty and Security Agreement, dated as of February 5, 2003 (the "Guaranty"), in favor of Wells Fargo Retail Finance II, LLC, a Delaware limited liability company formerly known as Wells Fargo Retail Finance, LLC, as collateral agent and administrative agent ("Agent"), under and in accordance with that certain Loan and Security Agreement (as amended from time to time, the "Loan Agreement"), dated as of February 5, 2003, by and among Agent, the lenders that are signatories thereto ("Lenders"), and each of the following Persons: (a) HAROLD'S STORES, INC., (b) HAROLD'S FINANCIAL CORPORATION, (c) HAROLD'S DIRECT, INC., (d) HAROLD'S OF TEXAS, L.P., (e) HAROLD'S OF GEORGIA, L.P., and (f) HAROLD'S OF JACKSON, INC. (Capitalized terms used herein, not otherwise defined herein, shall have the meaning assigned to such terms in the Loan Agreement). The undersigned hereby (i) consent and agree to the terms and provisions of Amendment No. 4 to Loan and Security Agreement (the "Amendment"), dated June 1, 2006, and (ii) agree that the Guaranty remains in full force and effect and continues to be the legal, valid and binding obligation of each of the undersigned enforceable against each of the undersigned in accordance with its terms. Furthermore, the undersigned hereby agree and acknowledge that (a) the Guaranty is not subject to any claims, defenses or offsets, (b) nothing contained in the Amendment shall adversely affect any right or remedy of Agent or Lenders under the Guaranty or any agreement executed by the undersigned in connection therewith, (c) the execution and delivery of the Amendment or any agreement entered into by Agent in connection therewith shall in no way reduce, impair or discharge any obligations of the undersigned pursuant to the Guaranty and shall not constitute a waiver by Agent or Lenders of any of Agent's or Lenders' rights against the undersigned under the Guaranty, (d) the consent of the undersigned is not required to the effectiveness of the Amendment and (e) no consent by the undersigned is required for the effectiveness of any future amendment, modification, forbearance or other action with respect to the Loan Agreement or any present or future Loan Document (other than the Guaranty). In addition to the foregoing, each of the undersigned hereby reaffirms and continues all liens, assignments, pledges and security interests granted or made by the undersigned pursuant to the Guaranty. Executed on June 1, 2006. THE CORNER PROPERTIES, INC., an Oklahoma corporation By: /s/ Jodi L. Taylor ------------------------------- Name: Jodi L. Taylor Title: Secretary/Treasurer HAROLD'S DBO, INC., a Texas corporation By: /s/ Jodi L. Taylor ------------------------------- Name: Jodi L. Taylor Title: Secretary-Treasurer HAROLD'S LIMITED PARTNERS, INC., an Oklahoma corporation By: /s/ Jodi L. Taylor ------------------------------- Name: Jodi L. Taylor Title: Secretary-Treasurer HAROLD'S OF WHITE FLINT, INC., a Maryland corporation By: /s/ Jodi L. Taylor ------------------------------- Name: Jodi L. Taylor Title: Secretary-Treasurer HSGA, INC., a Georgia corporation By: /s/ Jodi L. Taylor ------------------------------- Name: Jodi L. Taylor Title: Secretary-Treasurer HSTX, INC., a Texas corporation By: /s/ Jodi L. Taylor ------------------------------- Name: Jodi L. Taylor Title: Secretary-Treasurer