<PAGE>

                                                                    EXHIBIT 10.4



                               PLEDGE AGREEMENT
                       WILSONS LEATHER OF DELAWARE INC.
                       --------------------------------

          PLEDGE AGREEMENT, dated as of May 24, 1999, (this "Agreement") between
WILSONS LEATHER OF DELAWARE INC. ("Pledgor"), and GENERAL ELECTRIC CAPITAL
CORPORATION, a New York corporation individually and as agent (in such capacity,
"Agent") for the lenders ("Lenders") signatory to the Credit Agreement as
hereinafter defined.

                             W I T N E S S E T H:
                             --------------------

          WHEREAS, Pledgor is the record and beneficial owner of all the shares
of stock described in Schedule I hereto (the "Pledged Shares") issued by the
                      ----------
corporation named therein;

          WHEREAS, Pledgor is a Credit Party under the Amended and Restated
Credit Agreement dated as of the date hereof with, among others, Borrower,
other Credit Parties, Agent and Lenders (as amended, supplemented, restated or
otherwise modified from time to time, the "Credit Agreement");

          WHEREAS, Pledgor has guaranteed the payment of the Obligations of the
Borrower under the Credit Agreement pursuant to a separate Store Guarantor's
Guaranty dated May 25, 1996, as amended, which Pledgor joined pursuant to a
Joinder Agreement dated of even date herewith;

          WHEREAS, in connection with the making of the Loans under the Credit
Agreement and as security for all of the Obligations (as defined in the Credit
Agreement) of Pledgor, Lenders and Agent are requiring that Pledgor shall have
executed and delivered this Agreement and granted the security interest
contemplated hereby;

          NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained and to induce the Lenders to make loans under the Credit
Agreement, it is agreed as follows:

          1.   Definitions.  Unless otherwise defined herein, terms defined in
               -----------
the Schedule A to the  Credit Agreement are used herein as therein defined, and
    ----------
the following shall have (unless otherwise provided elsewhere in this Agreement)
the following respective meanings (such meanings being equally applicable to
both the singular and plural form of the terms defined):

          "Bankruptcy Code" shall mean Title 11, United States Code, as amended
from time to time, and any successor statute thereto.

          "Pledged Collateral" shall have the meaning assigned to such term in
Section 2 hereof.
<PAGE>

          "Secured Obligations" shall have the meaning assigned to such term in
Section 3 hereof.

          2.    Pledge.  Pledgor hereby pledges to Agent, for its benefit and
                ------
for the ratable benefit of Lenders, and grants to Agent, for its benefit and the
ratable benefit of Lenders, a first priority security interest in, all of the
following (collectively, the "Pledged Collateral"):

          (i)   the Pledged Shares and the certificates representing the Pledged
Shares, and all dividends, distributions, cask instruments and other property or
proceeds from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of the Pledged Shares of Pledgor;

          (ii)  all additional shares of stock of any issuer of the Pledged
Shares from time to time acquired by Pledgor in any manner (which shares shall
be deemed to be part of the Pledged Shares), and the certificates representing
such additional shares, and all dividends, distributions, cash, instruments and
other property or proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such shares; and

          (iii) to the extent required by the Credit Agreement, all Stock owned
by Pledgor of any Person who, after the date of this Agreement, becomes, as a
result of any occurrence, a directly owned Subsidiary of Pledgor (which Stock
shall be deemed to be part of the Pledged Shares) and the certificates, if any,
representing such Stock, and all dividends, distributions, cash, instruments and
other property or proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such Stock.

          3.    Security for Obligations. This Agreement secures, and the
                ------------------------
Pledged Collateral is security for, the prompt payment in full when due, whether
at stated maturity, by acceleration or otherwise, and performance of the
Obligations of Pledgor, whether for principal, premium, interest, fees, costs
and expenses, and all obligations of Pledgor now or hereafter existing under
this Agreement and under the Credit Agreement (collectively, the "Secured
Obligations").

          4.    Delivery of Pledged Collateral. All certificates representing or
                ------------------------------
evidencing the Pledged Shares shall be delivered to and held by or on behalf of
Agent, for its benefit and the ratable benefit of Lenders, pursuant hereto and
shall be accompanied by duly executed instruments of transfer or assignment in
blank, all in form and substance satisfactory to Agent. Agent shall have the
right, after acceleration of the Secured Obligations or the failure to pay the
Secured Obligations at maturity in its discretion and without notice to Pledgor,
to transfer to or to register in the name of Agent for its benefit and the
ratable benefit of Lenders, or any of its nominees any or all of the Pledged
Shares. In addition, Agent shall have the right at anytime to exchange
certificates or instruments representing or evidencing Pledged Shares for
certificates or instruments of smaller or larger denominations.

          5.    Representations and Warranties.  Pledgor represents and warrants
                ------------------------------
to Agent and Lenders that:

                                       2
<PAGE>

          (a)  Pledgor is, and at the time of delivery of the Pledged Shares to
Agent pursuant to Section 4 hereof will be, the sole holder of record and the
sole beneficial owner of the Pledged Collateral pledged by Pledgor free and
clear of any Lien thereon or affecting the title thereto, except for the Lien
created by this Agreement and any restrictive legend appearing on any
certificate representing Pledged Shares.

          (b)  All of the Pledged Shares have been duly authorized, validly
issued and are fully paid and non-assessable.

          (c)  Pledgor has the right and requisite authority to pledge, assign,
transfer, deliver, deposit and set over the Pledged Collateral pledged by
Pledgor to Agent, for its benefit and the ratable benefit of Lenders, as
provided herein.

          (d)  None of the Pledged Shares has been issued or transferred in
violation of the securities registration, securities disclosure or similar laws
of any jurisdiction to which such issuance or transfer may be subject.

          (e)  Except as set forth on Schedule I hereto, all of the Stock of
                                      ----------
each Subsidiary of Pledgor is presently owned by the Pledgor as set forth on
Schedule I hereto, and is presently represented by the stock certificates listed
----------
on Schedule I hereto. As of the date hereof, there are no existing options,
   ----------
warrants, calls or commitments of any character whatsoever relating to the Stock
of the Subsidiaries of Pledgor.

          (f)  No consent, approval, authorization or other order of any Person
and no consent, authorization, approval, or other action by, and no notice to or
filing with, any governmental authority is required either (i) for the pledge by
Pledgor of the Pledged Collateral pursuant to this Agreement or for the
execution, delivery or performance of this Agreement by Pledgor or (ii) for the
exercise by the Agent, for its benefit and the ratable benefit of Lenders, of
the voting or other rights provided for in this Agreement or the remedies in
respect of the Pledged Collateral pursuant to this Agreement, except as may be
required in connection with such disposition by laws affecting the offering and
sale of securities generally.

          (g)  The pledge, assignment and delivery of the Pledged Collateral
pursuant to this Agreement will create a valid first priority Lien on and a
first priority perfected security interest in the Pledged Collateral pledged by
Pledgor, and the proceeds thereof, securing the payment of the Secured
Obligations, subject to no other Lien or security interest, other than any
restrictive legend appearing on any certificate representing Pledged Shares.

          (h)  This Agreement has been duly authorized, executed and delivered
by Pledgor and constitutes a legal, valid and binding obligation of Pledgor
enforceable in accordance with its terms.

          (i)  The Subsidiary listed on Schedule I hereto is the only direct
                                        ----------
Subsidiary of Pledgor. Except as set forth on Schedule hereto, the Pledged
Shares constitute 100% of the issued and outstanding shares of stock of the
issuer thereof.

                                       3
<PAGE>

          The representations and warranties set forth in this Section 5 shall
survive the execution and delivery of this Agreement.

          6.   Covenant. Pledgor covenants and agrees that until the Termination
               --------
Date:

          (a)  Without the prior written consent of Agent, Pledgor will not
sell, assign, transfer, pledge, or otherwise encumber any of its rights in or to
the Pledged Collateral pledged by Pledgor or any unpaid dividends or other
distributions or payments with respect thereto or grant a Lien in any therein.

          (b)  Pledgor will, at its expense, promptly execute, acknowledge and
deliver all such instruments and take all such action as Agent from time to time
may request in order to ensure to Agent the benefits of the Liens in and to the
Pledged Collateral intended to be created by this Agreement, including the
filing of any necessary Code financing statements, which may be filed by Agent
with or without the signature of Pledgor, and will cooperate with Agent, at
Pledgor's expense, in obtaining all necessary approvals and making all necessary
filings under federal or state law in connection with such Liens or any sale or
transfer of the Pledged Collateral.

          (c)  Pledgor has and will defend the title to the Pledged Collateral
and the Liens of Agent and Lenders thereon against the claim of any Person and
will maintain and preserve such Liens until the Termination Date.

          (d)  Pledgor will upon obtaining any additional shares of any
Subsidiaries or, any new directly owned Subsidiary, which shares are not already
Pledged Collateral, promptly (and in any event within three (3) Business Days)
deliver to Agent a Pledge Amendment, duly executed by such Pledgor, in
substantially the form of Schedule II hereto (a "Pledge Amendment"), in respect
                          -----------            ----------------
of the additional Pledged Shares which are to be pledged pursuant to this
Agreement.  Pledgor hereby authorizes Agent to attach each Pledge Amendment to
this Agreement and agrees that all Pledged Shares listed on any Pledge Amendment
delivered to Agent shall for all purposes hereunder be considered Pledged
Collateral.

          7.   Pledgor's Rights.  As long as no Event of Default shall have
               ----------------
occurred and be continuing and until written notice shall be given to Pledgor in
accordance with Section 8(a) hereof,

          (a)  Pledgor shall have the right from time to time, to vote and give
consents with respect to the Pledged Collateral or any part thereof for all
purposes not inconsistent with the provisions of this Agreement, the Credit
Agreement, and any other Loan Document; provided, however, that no vote shall be
                                        --------  -------
cast, and no consent shall be given or action taken, which would have the effect
of impairing the position or interest of Agent or Lenders in respect of the
Pledged Collateral or which would authorize or effect (except as and to the
extent expressly permitted by the Credit Agreement) (i) the dissolution or
liquidation, in whole or in part, of any of Pledgor's Subsidiaries, (ii) the
consolidation or merger of any of Pledgor's Subsidiaries with any other Person,
(iii) the sale, disposition or encumbrance of all or substantially all of the
assets of any of Pledgor's Subsidiaries, (iv) any change in the authorized

                                       4
<PAGE>

number of shares, the stated capital or the authorized share capital of any of
such Pledgor's Subsidiaries or the issuance of any additional shares of such
Subsidiary's Stock, or (v) the alteration of the voting rights with respect to
the Stock of any of such Pledgor's Subsidiaries;

          (b)  (i)  Pledgor shall be entitled, from time to time, to collect and
     receive for its own respective use all cash dividends paid in respect of
     the Pledged Shares to the extent not in violation of the Credit Agreement
     other than any and all (A) dividends paid or payable other than in cash in
     respect of, and instruments and other property received, receivable or
     otherwise distributed in respect of, or in exchange for, any Pledged
     Collateral, (B) dividends and other distributions paid or payable in cash
     in respect of any Pledged Collateral in connection with a partial or total
     liquidation or dissolution, and (C) cash paid, payable or otherwise
     distributed in redemption of, or in exchange for, any Pledged Collateral;
     provided however, that until actually paid all rights to such distributions
     -------- -------
     shall remain subject to the Lien created by this Agreement; and

               (ii) all dividends (other than such cash dividends as are
     permitted to be paid to Pledgor in accordance with clause (i) above) and
     all other distributions in respect of any of the Pledged Shares of Pledgor,
     whenever paid or made, shall be delivered to Agent to hold as Pledged
     Collateral and shall if received by Pledgor, be received in trust for the
     benefit of Agent and the ratable benefit of Lenders, be segregated from the
     other property or funds of Pledgor, and be forthwith delivered to Agent as
     Pledged Collateral in the same form as so received (with any necessary
     indorsement).

          8.   Defaults and Remedies (a) Upon acceleration of the Secured
               ---------------------
Obligations or failure to pay the Secured Obligations at maturity and upon
written notice to Pledgor, Agent (personally or through an agent) is hereby
authorized and empowered to transfer and register in its name or in the name of
its nominee the whole or any part of the Pledged Collateral, to exchange
certificates or instruments representing or evidencing Pledged Shares for
certificates or instruments of smaller or larger denominations, to exercise the
voting and all other rights as a stockholder with respect thereto, to collect
and receive all cash dividends and other distributions made thereon, to sell in
one or more sales after at least ten (10) days' notice of the time and place of
any public sale or of the time after which a private sale is to take place
(which notice Pledgor agrees is commercially reasonable), but without any
previous notice or advertisement, the whole or any part of the Pledged
Collateral and to otherwise act with respect to the Pledged Collateral as though
Agent was the outright owner thereof, Pledgor hereby irrevocably constituting
and appointing Agent as the proxy and attorney-in-fact of Pledgor, with full
power of substitution to do so, and which shall remain in effect until the
Obligations are indefeasibly paid in full; provided, however, Agent shall not
                                           --------  -------
have any duty to exercise any such right or to preserve the same and shall not
be liable for any failure to do so or for any delay in doing so. Any sale shall
be made at a public or private sale at Agent's place of business or elsewhere to
be named in the notice of sale, either for cash or upon credit or for future
delivery at such price as Agent may deem fair, and Agent or any Lender may be
the purchaser of the whole or any part of the Pledged Collateral so sold and
hold the same thereafter in its own right free from any claim of Pledgor or any
right of redemption. Each sale shall be made to the highest bidder, but Agent
reserves the right to reject any and all bids at such sale which, in its
discretion, it shall deem inadequate.

                                       5
<PAGE>

Demands of performance, except as otherwise herein specifically provided for,
notices of sale, advertisements and the presence of property at sale are hereby
waived and any sale hereunder may be conducted by an auctioneer or any officer
or agent of Agent.

          (b)  If, at the original time or times appointed for the sale of the
whole or any part of the Pledged Collateral, the highest bid, if there be but
one sale, shall be inadequate to discharge in full all the Obligations, or if
the Pledged Collateral be offered for sale in lots, if at any of such sales, the
highest bid for the lot offered for sale would indicate to Agent, in its
discretion, the unlikelihood of the proceeds of the sales of the whole of the
Pledged Collateral being sufficient to discharge all the Obligations, Agent may,
on one or more occasions and in its discretion, postpone any of said sales by
public announcement at the time of sale or the time of previous postponement of
sale, and no other notice of such postponement or postponements of sale need be
given, any other notice being hereby waived; provided, however, that any sale or
                                             --------  -------
sales made after such postponement shall be after ten (10) days' notice to
Pledgor.

          (c)  In the event of any sales hereunder Agent shall, after deducting
all costs or expenses of every kind (including reasonable attorneys' fees, and
disbursements) for care, safekeeping, collection, sale, delivery or otherwise,
apply the residue of the proceeds of the sales to the payment or reduction,
either in whole or in part, of the Secured Obligations in accordance with the
agreements and instruments governing and evidencing such Obligations, returning
the surplus, if any, to Pledgor.

          (d)  If at any time when Agent shall determine to exercise its right
to sell the whole or any part of the Pledged Collateral hereunder, such Pledged
Collateral or the part thereof to be sold shall not, for any reason whatsoever,
be effectively registered under the Securities Act of 1933, as amended (the
"Act"), Agent may, in its discretion (subject only to applicable requirements of
law), sell such Pledged Collateral or part thereof by private sale in such
manner and under such circumstances as Agent may deem necessary or advisable,
but subject to the other requirements of this Section 8, and shall not be
                                              ---------
required to effect such registration or to cause the same to be effected.
Without limiting the generality of the foregoing, in any such event Agent in its
discretion (x) may, in accordance with applicable securities laws, proceed to
make such private sale notwithstanding that a registration statement for the
purpose of registering such Pledged Collateral or part thereof could be or shall
have been filed under said Act (or similar statute), (y) may approach and
negotiate with a single possible purchaser to effect such sale, and (z) may
restrict such sale to a purchaser who will represent and agree that such
purchaser is purchasing for its own account, for investment and not with a view
to the distribution or sale of such Pledged Collateral or part thereof.  In
addition to a private sale as provided above in this Section 8, if any of the
                                                     ---------
Pledged Collateral shall not be freely distributable to the public without
registration under the Act (or similar statute) at the time of any proposed sale
pursuant to this Section 8 then Agent shall not be required to effect such
                 ---------
registration or cause the same to be effected but, in its discretion (subject
only to applicable requirements of law), may require that any sale hereunder
(including a sale at auction) be conducted subject to restrictions (i) as to the
financial sophistication and ability of any Person permitted to bid or purchase
at any such sale, (ii) as to the content of legends to be placed upon any
certificates representing the Pledged Collateral sold in such sale, including
restrictions on future transfer thereof, (iii) as to the

                                       6
<PAGE>

representations required to be made by each Person bidding or purchasing at such
sale relating to that Person's access to financial information about Pledgor and
such Person's intentions as to the holding of the Pledged Collateral so sold for
investment, for its own account, and not with a view to the distribution
thereof, and (iv) as to such other matters as Agent may, in its discretion, deem
necessary or appropriate in order that such sale (notwithstanding any failure so
to register) may be effected in compliance with the Act and other laws affecting
the enforcement of creditors' rights and the Act and all applicable state
securities laws.

          (e)  Pledgor acknowledges that any private sale may result in prices
and other terms less favorable to the seller than if such sale were a public
sale and, notwithstanding such circumstances, agrees that any such private sale
shall be deemed to have been made in a commercially reasonable manner.  Agent
shall be under no obligation to delay a sale of any of the Pledged Collateral
for the period of time necessary to permit the registrant to register such
securities for public sale under the Act, or under applicable state securities
laws, even if Pledgor would agree to do so.

          (f)  Pledgor agrees that following the occurrence and during the
continuance of an Event of Default it will not at any time plead, claim or take
the benefit of any appraisal, valuation, stay, extension, moratorium or
redemption law now or hereafter in force in order to prevent or delay the
enforcement of this Agreement, or the absolute sale of the whole or any part of
the Pledged Collateral or the possession thereof by any purchaser at any sale
hereunder, and Pledgor waives the benefit of all such laws to the extent it
lawfully may do so. Pledgor agrees that it will not interfere with any right,
power and remedy of Agent provided for in this Agreement or now or hereafter
existing at law or in equity or by statute or otherwise, or the exercise or
beginning of the exercise by Agent of any one or more of such rights, powers or
remedies.

          (g)  Pledgor further agrees that a breach of any of the covenants
contained in this Section 8 will cause irreparable injury to Agent and Lenders,
                  ---------
that Agent has no adequate remedy at law in respect of such breach and, as a
consequence, agrees that each and every covenant contained in this Section 8
                                                                   ---------
shall be specifically enforceable against Pledgor, and Pledgor hereby waives and
agrees not to assert any defenses against an action for specific performance of
such covenants except for a defense that the Secured Obligations are not then
due and payable in accordance with the agreements and instruments governing and
evidencing such obligations. Pledgor further acknowledges the impossibility of
ascertaining the amount of damages which would be suffered by Agent by reason of
a breach of any of such covenants and, consequently, agrees that, if Agent shall
sue for damages for breach, it shall pay, as liquidated damages and not as a
penalty, an amount equal to the lesser of (i) the value of the Pledged
Collateral pledged by Pledgor on the date Agent shall demand compliance with
this Section 8, and (ii) the amount required to pay in full the Secured
     ---------
Obligations.

          9.   Application of Proceeds.  Any cash held by Agent as Pledged
               -----------------------
Collateral and all cash proceeds received by Agent in respect of any sale of,
liquidation of, or other realization upon all or any part of the Pledged
Collateral shall be applied by Agent in accordance with the Credit Agreement.

                                       7
<PAGE>

          10.  Waiver.  No delay on Agent's part in exercising any power of
               ------
sale, Lien, option or other right hereunder, and no notice or demand which may
be given to or made upon Pledgor by Agent with respect to any power of sale,
Lien, option or other right hereunder, shall constitute a waiver thereof or
limit or impair Agent's right to take any action or to exercise any power of
sale, Lien, option, or any other right hereunder, without notice or demand, or
prejudice Agent's rights as against Pledgor in any respect.

          11.  Assignment.  Agent or any Lender may assign, indorse or transfer
               ----------
any instrument evidencing all or any part of the Secured Obligations as provided
in, and in accordance with, the Credit Agreement, and the holder of such
instrument shall be entitled to the benefits of this Agreement.

          12.  Termination.  On the Termination Date, and immediately following
               -----------
the indefeasible payment in full of all Obligations and termination of the
commitments under the Credit Agreement, Agent shall deliver to Pledgor the
Pledged Collateral pledged by Pledgor at the time subject to this Agreement and
all instruments of assignment executed in connection therewith, free and clear
of the Liens hereof and, except as otherwise provided herein, all of Pledgor's
obligations hereunder shall at such time terminate.

          13.  Lien Absolute.  All rights of Agent and Lenders hereunder, and
               -------------
all obligations of Pledgor hereunder, shall be absolute and unconditional
irrespective of:

          (a)  any lack of validity or enforceability of the Credit Agreement,
the Notes, any other Loan Document or any other agreement or instrument
governing or evidencing any Secured Obligations;

          (b)  any change in the time, manner or place of payment of, or in any
other term of, all or any part of the Secured Obligations, or any other
amendment or waiver of or any consent to any departure from the Credit
Agreement, the Notes, any other Loan Document or any other agreement or
instrument governing or evidencing any Secured Obligations;

          (c)  any exchange, release or non-perfection of any other collateral,
or any release or amendment or waiver of or consent to departure from any
guaranty, for all or any of the Secured Obligations; or

          (d)  any other circumstance which might otherwise constitute a defense
available to, or a discharge of Pledgor.

          14.  Release.  Pledgor consents and agrees that Agent and Lenders may
               -------
at any time, or from time to time, in their discretion (a) renew, extend or
change the time of payment, and/or the manner, place or terms of payment of all
or any part of the Secured Obligations and (b) exchange, release and/or
surrender all or any of the Pledged Collateral, or any part thereof, by
whomsoever deposited, which is now or may hereafter be held by Agent in
connection with all or any of the Secured Obligations; all in such manner and
upon such terms as Agent and Lenders may deem proper, and without notice to or
further assent from Pledgor, it being hereby agreed that Pledgor shall be and
remain bound upon this Agreement, irrespective of the existence, value

                                       8
<PAGE>

or condition of any of the Pledged Collateral, and notwithstanding any such
change, exchange, settlement, compromise, surrender, release, renewal or
extension, and notwithstanding also that the Secured Obligations may, at any
time, exceed the aggregate principal amount thereof set forth in the Credit
Agreement, or any other agreement governing any Secured Obligations. Pledgor
hereby waives notice of acceptance of this Agreement, and also presentment,
demand, protest and notice of dishonor of any and all of the Secured
Obligations, and promptness in commencing suit against any party hereto or
liable hereon, and in giving any notice to or of making any claim or demand
hereunder upon Pledgor. No act or omission of any kind on Agent's part shall in
any event affect or impair this Agreement.

          15.  Indemnification. Pledgor agrees to indemnify and hold Agent and
               ---------------
Lenders harmless from and against any taxes, liabilities, claims and damages,
including reasonable attorneys fees and disbursements, and other expenses
incurred or arising by reason of the taking or the failure to take action by
Agent, in good faith, in respect of any transaction effected under this
Agreement or in connection with the Lien provided for herein, including, without
limitation, any taxes payable in connection with the delivery or registration of
any of the Pledged Collateral as provided herein. Whether or not the
transactions contemplated by this Agreement shall be consummated, Pledgor agrees
to pay to Agent all out-of-pocket costs and expenses incurred in connection with
this Agreement and all reasonable fees, expenses and disbursements, and the
reasonable fees of Agent's agents or representatives, incurred in connection
with the execution and delivery of this Agreement and the performance by Agent
of the provisions of this Agreement and of any transactions effected in
connection with this Agreement. The obligations of Pledgor under this Section 15
                                                                      ----------
shall survive the termination of this Agreement.

          16.  Reinstatement. This Agreement shall remain in full force and
               -------------
effect and continue to be effective should any petition be filed by or against
Pledgor for liquidation or reorganization, should Pledgor become insolvent or
make an assignment for the benefit of creditors or should a receiver or trustee
be appointed for all or any significant part of Pledgor's assets, and shall
continue to be effective or be reinstated, as the case may be, if at any time
payment and performance of the Secured Obligations, or any part thereof, is,
pursuant to applicable law, rescinded or reduced in amount, or must otherwise be
restored or returned by any obligee of the Secured Obligations, whether as a
"voidable preference", "fraudulent conveyance", or otherwise, all as though such
payment or performance had not been made.  In the event that any payment, or any
part thereof, is rescinded, reduced, restored or returned, the Secured
Obligations shall be reinstated and deemed reduced only by such amount paid and
not so rescinded, reduced, restored or returned.

          17.  Miscellaneous.  (a) Agent may execute any of its duties hereunder
               -------------
by or through agents or employees and shall be entitled to advice of counsel
concerning all matters pertaining to its duties hereunder.

          (b)  Pledgor agrees to promptly reimburse Agent for actual out-of-
pocket expenses, including, without limitation, reasonable counsel fees,
incurred by Agent in connection with the administration and enforcement of this
Agreement.

                                       9
<PAGE>

          (c)  Neither Agent nor any Lender nor any of their respective
officers, directors, employees, agents or counsel shall be liable for any action
lawfully taken or omitted to be taken by it or them hereunder or in connection
herewith, except for its or their own gross negligence or willful misconduct.

          (d)  This Agreement and all obligations of Pledgor hereunder shall be
binding upon the successors and assigns of Pledgor and shall, together with the
rights and remedies of Agent, for the benefit of Agent and Lenders, hereunder,
inure to the benefit of Agent and Lenders, all future holders of any instrument
evidencing any of the Obligations and their respective successors and assigns.
No sales of participations, other sales, assignments, transfers or other
dispositions of any agreement governing or instrument evidencing the Obligations
or any portion thereof or interest herein shall in any manner affect the
security interest granted to Agent, for the benefit of Agent and Lenders,
hereunder.

          (e)  EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN ANY OF THE LOAN
DOCUMENTS, IN ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE, THIS AGREEMENT AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE
GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF ILLINOIS (WITHOUT REGARD TO CONFLICT OF LAW PROVISIONS), AND ANY
APPLICABLE LAWS OF THE UNITED STATES OF AMERICA. PLEDGOR HEREBY CONSENTS AND
AGREES THAT THE STATE OR FEDERAL COURTS LOCATED IN COOK COUNTY, CITY OF CHICAGO,
ILLINOIS, SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR
DISPUTES AMONG PLEDGOR, AGENT AND LENDERS PERTAINING TO THIS AGREEMENT OR ANY OF
THE OTHER LOAN DOCUMENTS OR TO ANY MATTER ARISING OUT OF OR RELATING TO THIS
SECURITY AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, PROVIDED AGENT, LENDERS
AND PLEDGOR ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD
BY A COURT LOCATED OUTSIDE OF COOK COUNTY, CITY OF CHICAGO, ILLINOIS; PROVIDED,
FURTHER THAT NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE
AGENT FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION
TO REALIZE ON THE PLEDGED COLLATERAL OR ANY OTHER SECURITY FOR THE OBLIGATIONS,
OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF AGENT. PLEDGOR
EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR
SUIT COMMENCED IN ANY SUCH COURT, AND PLEDGOR HEREBY WAIVES ANY OBJECTION WHICH
IT MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM
NON CONVENIENS AND HEREBY CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE
RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT. PLEDGOR HEREBY WAIVES PERSONAL
SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR
SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINTS AND OTHER PROCESS MAY
BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO PLEDGOR AT THE ADDRESS SET
FORTH ON

                                       10
<PAGE>

SCHEDULE J TO THE CREDIT AGREEMENT AND THAT SERVICE SO MADE SHALL BE DEEMED
COMPLETED UPON THE EARLIER OF ACTUAL RECEIPT THEREOF OR THREE (3) DAYS AFTER
DEPOSIT IN THE U.S. MAILS, PROPER POSTAGE PREPAID.

          (f)  BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX FINANCIAL
TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN EXPERIENCED AND
EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL LAWS TO APPLY
(RATHER THAN ARBITRATION RULES), PLEDGOR AND AGENT DESIRE THAT DISPUTES ARISING
HEREUNDER OR RELATING HERETO BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE
LAWS.  THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE
JUDICIAL SYSTEM AND OF ARBITRATION, PLEDGOR AND AGENT WAIVE ALL RIGHT TO TRIAL
BY JURY IN ANY ACTION, SUIT OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE,
WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE, AMONG AGENT, LENDERS, AND
PLEDGOR ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED IN CONNECTION WITH, THIS AGREEMENT, THE CREDIT
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS RELATED HERETO
OR THERETO.

          (g)  NO WAIVER CUMULATIVE REMEDIES.  Neither Agent nor any Lender
               -----------------------------
shall by any act, delay, omission or otherwise be deemed to have waived any of
its rights or remedies hereunder, and no waiver shall be valid unless in
writing, signed by Agent and then only to the extent therein set forth. A waiver
by Agent, for itself and the ratable benefit of Lenders, of any right or remedy
hereunder on any one occasion shall not be construed as a bar to any right or
remedy which Agent would otherwise have had on any future occasion. No failure
to exercise nor any delay in exercising on the part of Agent or any Lender, any
right, power or privilege hereunder, shall operate as a waiver thereof nor shall
any single or partial exercise of any right, power or privilege hereunder
preclude any other or future exercise thereof or the exercise of any other
right, power or privilege. The rights and remedies hereunder provided are
cumulative and may be exercised singly or concurrently, and are not exclusive of
any rights and remedies provided by law.  None of the terms or provisions of
this Agreement may be waived, altered, modified or amended except by an
instrument in writing, duly executed by Agent and Pledgor.

          18.  Severability. If for any reason any provision or provisions
               ------------
hereof are determined to be invalid and contrary to any existing or future law,
such invalidity shall not impair the operation of or effect those portions of
this Agreement which are valid.

          19.  Notices.  Except as otherwise provided herein, whenever it is
               -------
provided herein that any notice, demand, request, consent, approval, declaration
or other communication shall or may be given to or serve upon any of the parties
by any other party, or whenever any of the parties desires to give and serve
upon any other party any communication with respect to this Agreement, each such
notice, demand, request, consent, approval, declaration or other

                                       11
<PAGE>

communication shall be in writing and shall be given in the manner, and deemed
received, as provided for in Section 11.10 of the Credit Agreement.
                             -------------

          20.  Section Titles.  The Section titles contained in this Agreement
               --------------
are and shall be without substantive meaning or content of any kind whatsoever
and are not a part of the agreement between the parties hereto.

          21.  Counterparts. This Agreement may be executed in any number of
               ------------
counterparts, which shall, collectively and separately, constitute one
agreement.

                            [SIGNATURE PAGE FOLLOWS]

                                       12
<PAGE>

          IN WITNESS WHEREOF, the parties hereto have caused this Pledge
Agreement to be duly executed as of the date first written above.

                              WILSONS LEATHER OF DELAWARE INC.
                              as Pledgor


                              By: /s/ Daniel R. Thorson
                                 ----------------------------------------

                              Name: Daniel R. Thorson
                                   --------------------------------------

                              Title: Treasurer
                                    -------------------------------------

Accepted and Acknowledged by:

GENERAL ELECTRIC CAPITAL CORPORATION,
as Agent


By: /s/ LeeAnn Harboe
   ------------------------------------

Name: LeeAnn Harboe
     ----------------------------------

Title: Duly Authorized Signatory
      ---------------------------------
<PAGE>

                                   SCHEDULE I
                                   ----------

                         DESCRIPTION OF PLEDGED SHARES
                         -----------------------------

          Attached to and forming a part of that certain Pledge Agreement by
Wilsons Leather of Delaware Inc., as Pledgor, to General Electric Capital
Corporation, individually and as Agent for Lenders.


<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------
 Name and                                                   Stock          Number            Minority
 Address of                               Class of       Certificate         of               Shares
  Pledgor              Stock Issuer        Stock          Number(s)        Shares          Outstanding
  -------              ------------        -----          ---------        ------          -----------
-------------------------------------------------------------------------------------------------------
<S>                  <C>                  <C>            <C>               <C>             <C>
Wilsons Leather      Wilsons  Leather      Common           No.1              100              None
of Delaware Inc.     of Airports Inc.

7401 Boone Avenue
North, Brooklyn
Park, MN 55428


-------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>

                                  SCHEDULE II
                                  -----------

                           FORM OF PLEDGE AMENDMENT
                           ------------------------

          This Pledge Amendment, dated___________, ____ is delivered pursuant to

Section 6(d) of the Pledge Agreement referred to below.  The undersigned hereby
------------
agrees that this Pledge Amendment may be attached to that certain Pledge
Agreement, dated May 24, 1999 by the undersigned, as Pledgor, to General
Electric Capital Corporation, individually and as Agent for the Lenders, and
that the Pledged Shares listed on this Pledge Amendment shall be and become a
part of the Pledged Collateral referred to in said Pledge Agreement and shall
secure all Secured Obligations referred to in said Pledge Agreement.


                              WILSONS LEATHER OF DELAWARE INC.


                              By:______________________________________

                              Name:____________________________________

                              Title:___________________________________



<TABLE>
<CAPTION>
      Name and                                   Class            Certificate            Number
 Address of Pledgor          Issuer             of Stock           Number(s)           of Shares
---------------------  ------------------  ------------------   -----------------  ------------------
<S>                    <C>                 <C>                  <C>                <C>
</TABLE>