exv10w1



 






Exhibit 10.1


EXECUTION COPY




SEVENTH AMENDMENT TO

FOURTH AMENDED AND RESTATED CREDIT AGREEMENT




     This SEVENTH AMENDMENT TO FOURTH AMENDED AND RESTATED CREDIT AGREEMENT
(this “Amendment”) is entered into as of this 2nd day of March, 2005 among
WILSONS LEATHER HOLDINGS INC., a Minnesota corporation (“Borrower”),
GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware corporation, as Lender, Term
Lender, Swing Line Lender and as Agent (“Agent”), the Credit Parties
signatory hereto and the Lenders signatory hereto. Unless otherwise specified
herein, capitalized terms used in this Amendment shall have the meanings
ascribed to them by the Credit Agreement (as hereinafter defined).



RECITALS




     WHEREAS, Borrower, certain Credit Parties, Agent and Lenders have entered
into that certain Fourth Amended and Restated Credit Agreement dated as of
April 23, 2002 (as amended, supplemented, restated or otherwise modified from
time to time, the “Credit Agreement”); and



     WHEREAS, Borrower, the Credit Parties signatories to the Credit Agreement,
the Lenders and Agent wish to amend certain provisions of the Credit Agreement,
as more fully set forth herein.



     NOW THEREFORE, in consideration of the mutual covenants herein and other
good and valuable consideration the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:


Section 1 Amendments to the Credit Agreement. Subject to the
satisfaction of the conditions precedent set forth in Section 3 hereof,
the parties hereto hereby agree to amend the Credit Agreement as
follows:




     (a) The second sentence of clause (iv) of Section 1.1(a) of
the Credit Agreement is hereby amended and restated to read in its entirety as
follows:




     “Furthermore, notwithstanding any provision to contrary set forth
herein, in no event and at no time shall the sum of the aggregate
outstanding Revolving Loan plus the Swing Line Loan plus
the outstanding principal balance of the Term Loan B exceed the sum of
(i) ninety two and one-half percent (92.5%) of the Inventory GOB Value,
(ii) ninety two and one-half percent (92.5%) of the Trade L/C Inventory
GOB Value and (iii) eighty five percent (85%) of the book value of
Eligible Accounts (the “GOB Loans Cap”).”



     (b) Section 1.3(c) of the Credit Agreement is hereby amended by
adding the following new sentence at the end thereof:



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     “In addition, on or prior to February 28, 2006 Borrower may, with
two prepayments (the first of which prepayments shall be in an amount of
at least $5,000,000 and the second of which prepayments shall be in an
amount not to exceed $5,000,000), partially prepay Term Loan B in a
principal amount not to exceed $10,000,000 in the aggregate for all such
prepayments, as long as Borrower shall have delivered to Agent (i) at
least ten (10) days prior to each such prepayment projections, in form
and substance reasonably satisfactory to Agent and taking into account
such prepayment, which demonstrate that the sum of (1) the amount of
unrestricted cash owned and held by Borrower plus (2) the
Borrowing Availability shall be at least $15,000,000 at all times during
the 12-month period commencing on the date of such proposed prepayment
and (ii) at the time of each such prepayment, an officer’s certificate
certifying that no Default or Event of Default exists at the time of such
prepayment (or would occur as a result thereof).”



     (c) Section 1.6 of the Credit Agreement is hereby amended and
restated to read in its entirety as follows:




     “1.6 Applicable Margins. The Applicable Swing Line Margin,
Applicable Index Margin, Applicable LIBOR Margin and Applicable L/C
Margin will be 1.50%, 0.25%, 1.50% and 1.50% per annum, respectively.




     The Applicable Margins shall be adjusted (up or down) prospectively
on a quarterly basis as determined by Ultimate Parent’s and its
Subsidiaries’ consolidated financial performance, commencing with the
first day of the first calendar month that occurs more than one (1) day
after delivery of Ultimate Parent’s quarterly Financial Statements to
Agent and Lenders for the Fiscal Quarter ending on or about the last day
of October, 2005 pursuant to Schedule G hereof. All adjustments
in the Applicable Margins thereafter shall be implemented quarterly on a
prospective basis, for each calendar month commencing at least one (1)
day after the date of delivery to Agent and Lenders of the Ultimate
Parent’s quarterly Financial Statements pursuant to Schedule G
hereof evidencing the need for an adjustment. Adjustments in Applicable
Margins will be determined by reference to the following grids:



	 	 	 	 	 
	If EBITDA of Ultimate Parent, for the then most	 	Level of	 
	recently completed four Fiscal Quarter period, is:	 	Applicable Margins:	 
	3 25,000,000
	 	Level I
	3 19,000,000, but < 25,000,000
	 	Level II
	< 19,000,000
	 	Level III






	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Level I	 	Level II	 	Level III
	Applicable Swing
Line Margin
	 	 	1.25	%	 	 	1.50	%	 	 	1.75	%
	Applicable Index
Margin
	 	 	0.00	%	 	 	0.25	%	 	 	0.50	%






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	 	 	Level I	 	Level II	 	Level III
	Applicable LIBOR
Margin
	 	 	1.25	%	 	 	1.50	%	 	 	1.75	%
	Applicable L/C
Margin
	 	 	1.25	%	 	 	1.50	%	 	 	1.75	%







     Concurrently with the delivery of those Financial Statements,
Borrower shall deliver to Agent and Lenders a certificate, signed by its
chief financial officer, setting forth in reasonable detail the basis for
the continuance of, or any change in, the Applicable Margins. Failure to
timely deliver such Financial Statements shall, in addition to any other
remedy provided for in this Agreement, result in an increase in the
Applicable Margins to the highest level set forth in the foregoing grid,
until the first day of the first calendar month following the delivery of
those Financial Statements demonstrating that such an increase is not
required. If any Default or an Event of Default has occurred and is
continuing at the time any reduction in the Applicable Margins is to be
implemented, that reduction shall be deferred until the first day of the
first calendar month following the date on which all Defaults or Events
of Default are waived or cured.”



     (d) Section 1.9(b) of the Credit Agreement is hereby amended and
restated to read in its entirety as follows:




     ”(b) As additional compensation for the Lenders having Revolving
Loan Commitments, Borrower agrees to pay to Agent, for the ratable
benefit of such Lenders, in arrears, on the first Business Day of each
month prior to the Commitment Termination Date and on the Commitment
Termination Date, a fee for Borrower’s non-use of funds (the “Non-Use
Fee”) in an amount equal to 0.25% per annum (calculated on the basis
of a 360 day year for actual days elapsed) of the difference between (x)
the Maximum Amount (as it may be reduced from time to time) and (y) the
average for the period of the daily closing balances of the Revolving
Loan and the Swing Line Loan outstanding during the period for which the
Non-Use Fee is due.”



     (e) Clause (c) of Schedule I to the Credit Agreement is
hereby amended and restated to read in its entirety as follows:




     ”(c) Minimum EBITDA. If at any time during any Fiscal Month
the sum of (i) the amount of unrestricted cash owned and held by Borrower
at such time plus (ii) the Borrowing Availability at such time, is
less than $15,000,000, Ultimate Parent shall have EBITDA for the twelve
month period ending on the last day of such Fiscal Month, of not less
than the amount set forth opposite such Fiscal Month below:



	 	 	 	 	 
	Month	 	 	EBITDA	 
	February 2005
	 	 	$21,724,000	 
	March 2005
	 	 	$21,737,000	 
	April 2005
	 	 	$20,705,000	 
	May 2005
	 	 	$19,694,000	 






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	Month	 	 	EBITDA	 
	June 2005
	 		$19,574,000	 
	July 2005
	 		$18,859,000	 
	August 2005
	 		$18,852,000	 
	September 2005
	 		$18,464,000	 
	October 2005
	 		$17,893,000	 
	November 2005
	 		$18,173,000	 
	December 2005
	 		$17,652,000	 
	January 2006
	 		$19,054,000	 
	Each Fiscal
Month from and including February 2006 and through and including January 2007	 	 	an amount equal to the EBITDA of
Ultimate Parent for the Fiscal Year ending in January, 2006
	Each Fiscal
Month from and including February 2007 and through and including January 2008	 	 	an amount equal to the EBITDA of
Ultimate Parent for the Fiscal Year ending in January, 2007
	February 2008
and each Fiscal Month thereafter	 	 	an amount equal to the EBITDA of
Ultimate Parent for the Fiscal Year ending in January, 2008"





Section 2 Representations and Warranties. Borrower and the Credit
Parties who are party hereto represent and warrant that:




     (a) the execution, delivery and performance by Borrower and such Credit
Parties of this Amendment have been duly authorized by all necessary corporate
action and this Amendment is a legal, valid and binding obligation of Borrower
and such Credit Parties enforceable against Borrower and such Credit Parties in
accordance with its terms, except as the enforcement thereof may be subject to
(i) the effect of any applicable bankruptcy, insolvency, reorganization,
moratorium or similar law affecting creditors’ rights generally and (ii)
general principles of equity (regardless of whether such enforcement is sought
in a proceeding in equity or at law);



     (b) each of the representations and warranties contained in the Credit
Agreement is true and correct in all material respects on and as of the date
hereof as if made on the date hereof, except to the extent that such
representations and warranties expressly relate to an earlier date;



     (c) neither the execution, delivery and performance of this Amendment nor
the consummation of the transactions contemplated hereby does or shall
contravene, result in a breach of, or violate (i) any provision of Borrower’s
or Credit Parties’ certificate or articles of incorporation or bylaws, (ii) any
law or regulation, or any order or decree of any court or government
instrumentality or (iii) indenture, mortgage, deed of trust, lease, agreement
or other instrument to which Borrower, the Credit Parties or any of their
Subsidiaries is a party or by



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which Borrower, the Credit Parties or any of their Subsidiaries or any of
their property is bound, except in any such case to the extent such conflict or
breach has been waived by a written waiver document a copy of which has been
delivered to Agent on or before the date hereof; and



     (d) no Default or Event of Default will exist or result after giving
effect hereto.


Section 3 Conditions to Effectiveness. This Amendment will be effective
only upon execution and delivery of this Amendment by Borrower, the Credit
Parties that are listed on the signature pages hereto, the Agent and each
Lender.



Section 4 Reference to and Effect Upon the Credit Agreement.




     (a) Except as specifically set forth herein, the Credit Agreement and the
other Loan Documents shall remain in full force and effect and are hereby
ratified and confirmed.



     (b) The execution, delivery and effectiveness of this Amendment shall not
operate as a waiver of any right, power or remedy of Agent or any Lender under
the Credit Agreement or any Loan Document, nor constitute a waiver of any
provision of the Credit Agreement or any Loan Document, except as specifically
set forth herein. Upon the effectiveness of this Amendment, each reference in
the Credit Agreement to “this Agreement”, “hereunder”, “hereof”, “herein” or
words of similar import shall mean and refer to the Credit Agreement as amended
hereby.


Section 5 Waiver and Release.




     In consideration of the foregoing, each of Borrower and each Credit Party
hereby waives, releases and covenants not to sue Agent or any Lender with
respect to, any and all claims it may have against Agent or any Lender, whether
known or unknown, arising in tort, by contract or otherwise prior to the date
hereof relating to one or more Loan Documents.


Section 6 Costs and Expenses.




     As provided in Section 11.3 of the Credit Agreement, Borrower
agrees to reimburse Agent for all fees, costs and expenses, including the fees,
costs and expenses of counsel or other advisors for advice, assistance, or
other representation in connection with this Amendment.


Section 7 Governing Law.




     THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
INTERNAL LAWS OF THE STATE OF ILLINOIS.


Section 8 Headings.




     Section headings in this Amendment are included herein for convenience of
reference only and shall not constitute a part of this Amendment for any other
purposes.


Section 9 Counterparts.




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     This Amendment may be executed in any number of counterparts, each of
which when so executed shall be deemed an original but all such counterparts
shall constitute one and the same instrument.


Section 10 Confidentiality.




     The matters set forth herein are subject to Section 11.18 of the Credit
Agreement, which is incorporated herein by reference.



[signature pages follow]



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     IN WITNESS WHEREOF, this Amendment has been duly executed as of the date
first written above.


	 	 	 	 	 
	 	BORROWER:





WILSONS LEATHER HOLDINGS INC.

 	 
	 	By:  	 /s/
Stacy Kruse	 
	 	Title:  	 Vice
President Finance, Treasurer	 
	 




	 	 	 	 	 
	Revolving Loan
Commitment:
$41,666,667 (including $10,000,000
Swing Line
Commitment)
	 	GENERAL ELECTRIC
CAPITAL CORPORATION,
as Agent, Lender and Swing Line Lender
	 
	Term Loan B Commitment:
	 	By:  	 /s/ Kristina
M. Miller	 
	$25,000,000
	 
	Title:  
	 Duly
Authorized Signatory	 
	
	 	 
	 
	Revolving Loan Commitment:

$20,833,333
	 	LASALLE RETAIL FINANCE,
a
division of LaSalle Business
Credit, as agent for Standard
Federal Bank National
Association, as Lender
	 
	
	 	By:  	 /s/ Matthew
Potter	 
	
	 	Title:  	 Assistant
Vice President	 
	 
	Revolving Loan Commitment:

$31,250,000
	 	THE CIT GROUP/BUSINESS
CREDIT, INC.,
as Lender and Documentation Agent
	 
	
	 	By:  	 /s/ Deborah
Rogut	 
	
	 	Title:  	 Vice
President	 
	 
	Revolving Loan Commitment:

$31,250,000
	 	WELLS FARGO RETAIL
FINANCE II, LLC,

as Lender and Syndication Agent
	 
	
	 	By:  	 /s/ Eileen
Quinn	 
	
	 	Title:  	 Senior
Vice President	 






[Signature Page to Seventh Amendment]



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     The undersigned are executing this Amendment in their capacity as Credit
Parties:



Wilsons The Leather Experts Inc.





	 	 	 	 	 	 
	By:  	 /s/
Stacy Kruse	 
	 
	Title:  	 Vice
President Finance, Treasurer	 
	 
	Wilsons Center, Inc.

	 
	By:  	 /s/
Stacy Kruse	 
	 
	Title:  	 Vice
President Finance, Treasurer	 
	 
	Rosedale Wilsons, Inc.

	 
	By:  	 /s/
Stacy Kruse	 
	 
	Title:  	 Vice
President Finance, Treasurer	 
	 
	River Hills Wilsons, Inc.

	 
	By:  	 /s/
Stacy Kruse	 
	 
	Title:  	 Vice
President Finance, Treasurer	 
	 
	Bermans The Leather Experts Inc.

	 
	By:  	 /s/
Stacy Kruse	 
	 
	Title:  	 Vice
President Finance, Treasurer	 






[Signature Page to Seventh Amendment]


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