Document:

exv10w1

 

Exhibit 10.1

Execution Copy

SUPPORT AGREEMENT

          This SUPPORT AGREEMENT, dated as of June 1, 2007 (this “Agreement”), by and among Wilsons The
Leather Experts Inc., a Minnesota corporation (the “Company”), and the shareholders of the Company
set forth on the signature pages hereof (individually, a “Shareholder” and collectively, the
“Shareholders”).

          WHEREAS, the Company and the Shareholders have entered into a Securities Purchase Agreement,
dated as of the date hereof (the “Securities Purchase Agreement”), pursuant to which, among other
things, the Company has agreed to issue and sell to the Shareholders and the Shareholders have
agreed severally to purchase an aggregate of (i) 45,000 shares of the Company’s Series A Preferred
Stock, par value $.01 per share (the “Preferred Stock”), and (ii) warrants (the “Warrants”) which
will be exercisable to purchase 15,000,000 shares of common stock of the Company, par value $.01
per share (the “Common Stock”) (as exercised, collectively, the “Warrant Shares”). The Preferred
Stock and the Warrants are sometimes collectively referred to herein as, the “Securities”);

          WHEREAS, as of the date hereof, the Shareholders identified on Annex A hereto (the “Current
Shareholders”) collectively own the aggregate number of shares of Common Stock set forth on Annex
A, which represent (i) approximately 56.58% of the total issued and outstanding Common Stock of the
Company, and (ii) approximately 56.58% of the total voting power of the Company;

          WHEREAS, as a condition to the willingness of the Shareholder who, prior to the closing of the
transactions contemplated by the Securities Purchase Agreement and identified as “Purchaser 1”
therein, owned no securities of the Company (such Shareholder, the “Investor”) to consummate the
transactions contemplated thereby (collectively, the “Transaction”), the parties hereto have each
agreed to enter into this Agreement.

          NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements
contained herein, and intending to be legally bound hereby, the parties hereto hereby agree as
follows:

ARTICLE I

VOTING AGREEMENTS OF THE CURRENT SHAREHOLDERS

          SECTION 1.01. Supporting the Transaction. Each of the Current Shareholders hereby
agrees that, at any meeting of the shareholders of the Company, however called, and in any action
by written consent of the Company’s shareholders, such Current Shareholder shall vote the “Shares”
and the “Other Securities” (in each case, as defined below) held by it: (a) in
favor of the Transaction; provided that, the Preferred Stock, Shares acquired upon the
conversion of the Preferred Stock and the Warrant Shares may not be voted on the Transaction, and
(b)

 

 

against any proposal or any other corporate action or agreement that would result in a breach
of any covenant, representation or warranty or any other obligation or agreement of the Company
under the Securities Purchase Agreement or which could result in any of the conditions to the
Company’s obligations under the Securities Purchase Agreement not being fulfilled. Each of the
Current Shareholders acknowledges receipt and review of a copy of the Securities Purchase Agreement
and exhibits thereto. Each of the Current Shareholders hereby revokes all proxies and powers of
attorney with respect to the Shares and the Other Securities that such Current Shareholder may have
heretofore appointed or granted, and no subsequent proxy or power of attorney shall be given or
written consent executed (and if given or executed, shall not be effective) by such Current
Shareholder, with respect to the matters specified in this Section 1.01, except as set forth in the
next paragraph of this Section 1.01. Any obligation of the Current Shareholders under this Section
1.01 shall be binding upon the successors and assigns of the Current Shareholders. The obligations
of the Current Shareholders under this Section 1.01 shall terminate immediately following the
earlier to occur of (i) the “Shareholder Approval” (as defined below), or (ii) the termination of
the Securities Purchase Agreement prior to the Closing (as defined therein).

          In order to secure the performance of each Current Shareholder’s obligations under this
Section 1.01, by entering into this Agreement, each Current Shareholder hereby irrevocably grants a
proxy appointing each managing partner of the general partner of the Investor as such Current
Shareholder’s attorney-in-fact and proxy, with full power of substitution, for and in its name, to
vote, express consent or dissent, or otherwise to utilize such voting power in the manner
contemplated by this Section 1.01 with respect to such each Current Shareholder’s Shares and Other
Securities. The proxy granted by such each Current Shareholder pursuant to this Section 1.01 is
coupled with an interest and shall be revoked automatically, without any notice or other action by
any person, upon the earlier to occur of (i) the Shareholder Approval, or (ii) the termination of
the Securities Purchase Agreement prior to the Closing (as defined therein).

          As used herein, the following terms have the following meanings: (i) “Shares” refers to all
shares of Common Stock now owned and which may hereafter be acquired by a Shareholder at any time
that this Agreement is in effect, (ii) “Other Securities” refers to any other securities, if any,
which a Shareholder is currently entitled to vote, or after the date hereof becomes entitled to
vote, at any meeting of the shareholders of the Company held at any time that this Agreement is in
effect, and (iii) “Shareholder Approval” means the requisite vote of the holders of voting stock of
the Company necessary to approve the Transaction.

          SECTION 1.02. Board Representation. So long as the Investor or one or more of its
affiliates holds at least 20% of the number of shares of Common Stock issued or issuable upon
conversion of the Preferred Stock subject to appropriate adjustment for all stock splits,
dividends, combinations, recapitalizations and the like) (the “Minimum Holding”), each of the
Current Shareholders hereby agrees that, at any meeting of the shareholders of the Company, however
called, and in any action by written consent of the Company’s shareholders, such Current
Shareholder shall vote the Shares and the Other Securities held by it: (a) in favor of at least
two nominees for election as directors identified as having been proposed by the Investor;
and (b) against any proposal or any other corporate action or agreement that would result in
such nominees not being elected as directors. Each of the Current Shareholders agrees that no

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subsequent proxy or power of attorney with respect to the Shares and the Other Securities shall be
given or written consent executed (and if given or executed, shall not be effective) by such
Current Shareholder with respect to the matters specified in this Section 1.02. Any obligation of
the Current Shareholders under this Section 1.02 shall be binding upon the successors and assigns
of the Current Shareholders.

          SECTION 1.03. Certain Transactions. So long as the Investor or one or more of its
affiliates holds at least the Minimum Holding, each of the Current Shareholders hereby agrees that,
at any meeting of the shareholders of the Company, however called, and in any action by written
consent of the Company’s shareholders, such Current Shareholder shall vote the Shares and the Other
Securities held by it: (a) in favor of any proposed “Company Sale” (as defined below) presented to
or brought before the shareholders of the Company and identified as having been proposed by or
supported by the Investor; and (b) against any proposed Company Sale that is identified as being
opposed by the Investor or would result in any other Company Sale proposed by or supported by the
Investor not being presented to or approved by the shareholders of the Company. Each of the
Current Shareholders agrees that no subsequent proxy or power of attorney with respect to the
Shares and the Other Securities shall be given or written consent executed (and if given or
executed, shall not be effective) by such Current Shareholder with respect to the matters specified
in this Section 1.03. Any obligation of the Current Shareholders under this Section 1.03 shall be
binding upon the successors and assigns of the Current Shareholders.

          As used herein, “Company Sale” means one or a series of related transactions pursuant to which
a third party or group of third parties (a) acquires (whether by merger, amalgamation,
consolidation, recapitalization, reorganization, redemption, transfer or issuance of securities or
otherwise) a majority of the capital stock of the Company (or any surviving or resulting
corporation) possessing the voting power to elect a majority of the Board of Directors of the
Company (or such surviving or resulting corporation), or (b) acquires assets constituting all or
substantially all of the assets of the Company (on a consolidated basis). For the avoidance of
doubt, the parties agree that the term “third party” as used in the immediately preceding sentence
shall not include the Investor or any of its affiliates.

ARTICLE II

REPRESENTATIONS AND WARRANTIES OF THE CURRENT SHAREHOLDERS

          Each of the Current Shareholders hereby represents and warrants, severally and not jointly, to
the Company and the Investor as follows:

          SECTION 2.01. Authority Relative to This Agreement. The Current Shareholder has all
necessary power and authority, including partnership power and authority, to execute and deliver
this Agreement, to perform its obligations hereunder and to consummate the transactions
contemplated hereby. This Agreement has been duly executed and delivered by the Current
Shareholder and constitutes a legal, valid and binding obligation of the Shareholder, enforceable
against the Current Shareholder in accordance with its terms, except (a) as such
enforceability may be limited by applicable bankruptcy, insolvency, reorganization, fraudulent
conveyance,

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moratorium or similar laws now or hereafter in effect relating to, or affecting
generally, the enforcement of creditors’ and other obligees’ rights, (b) where the remedy of
specific performance or other forms of equitable relief may be subject to certain equitable
defenses and principles and to the discretion of the court before which the proceeding may be
brought, and (c) where rights to indemnity and contribution thereunder may be limited by applicable
law and public policy.

          SECTION 2.02. No Conflict. (a) The execution and delivery of this Agreement by the
Current Shareholder does not, and the performance of this Agreement by the Current Shareholder
shall not, (i) conflict with or violate the partnership agreement of the Current Shareholder or any
federal, state or local law, statute, ordinance, rule, regulation, order, judgment or decree
applicable to the Current Shareholder or by which the Shares or the Other Securities owned by the
Current Shareholder are bound or affected or (ii) result in any breach of or constitute a default
(or an event that with notice or lapse of time or both would become a default) under, or give to
others any rights of termination, amendment, acceleration or cancellation of, or result in the
creation of a lien or encumbrance on any of the Shares or the Other Securities owned by the Current
Shareholder pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease, license,
permit, franchise or other instrument or obligation to which the Current Shareholder is a party or
by which the Shareholder or the Shares or Other Securities owned by the Current Shareholder is
bound.

          (b) The execution and delivery of this Agreement by the Current Shareholder does not, and the
performance of this Agreement by the Current Shareholder shall not, require any consent, approval,
authorization or permit of, or filing with or notification to, any governmental entity by the
Shareholder, except for applicable requirements, if any, of the Securities Exchange Act of 1934, as
amended (the “1934 Act”).

          SECTION 2.03. Title to the Stock. As of the date hereof, the Current Shareholder is
the beneficial owner of the number of shares of Common Stock set forth opposite its name on
Appendix A attached hereto, entitled to vote, without restriction (except to the extent a
Current Shareholder shares voting power under managed accounts), on all matters brought before
holders of capital stock of the Company, which Common Stock represents on the date hereof the
percentage of the outstanding stock and voting power of the Company set forth on such Appendix.
Such Common Stock are all the securities of the Company owned, either of record or beneficially, by
the Current Shareholder. Such Common Stock is owned free and clear of all security interests,
liens, claims, pledges, options, rights of first refusal, agreements, limitations on the Current
Shareholder’s voting rights, charges and other encumbrances of any nature whatsoever, other than
any restrictions that attach to shares deposited by a Current Shareholder with brokers in margin
accounts pursuant to standard terms of such margin account agreements. The Current Shareholder has
not appointed or granted any proxy, which appointment or grant is still effective, with respect to
the Shares or Other Securities owned by the Shareholder regarding the matters specified in Article
I hereof. The Current Shareholder has sole voting power and sole power to issue instructions with
respect to the matters set forth in Article 1 hereof, sole power of disposition and sole power to
agree to all matters set forth in this Agreement.

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ARTICLE III

COVENANTS

          SECTION 3.01. No Disposition or Encumbrance of Stock. Each of the Current
Shareholders hereby covenants and agrees that, for a period of at least 24 months after the date of
Shareholder Approval, such Current Shareholder shall not offer or agree to sell, transfer, tender,
assign, hypothecate or otherwise dispose of, grant a proxy (except (i) with respect to not more
than 25% of the Common Stock held by each Current Shareholder as of the date hereof, for any such
sales, transfers, tenders, assigns, hypothecations or other dispositions conducted in the ordinary
course of the business of such Current Shareholder consistent with past practice, and (ii) a
customary revocable proxy in connection with an annual meeting of shareholders, which proxy does
not involve the matters set forth in Article I hereof unless such proxy directs the proxy to vote
in accordance with the agreements of such Current Shareholder set forth in this Agreement) or power
of attorney with respect to, or create or permit to exist any security interest, lien, claim,
pledge, option, right of first refusal, agreement, limitation on such Current Shareholder’s voting
rights, charge or other encumbrance of any nature whatsoever with respect to the Shares or Other
Securities, directly or indirectly, or initiate, solicit or encourage any person to take actions
which could reasonably be expected to lead to the occurrence of any of the foregoing.

          SECTION 3.02. No Solicitation or Similar Activity. Each Current Shareholder hereby
covenants and agrees that it shall not, at any time during the term of this Agreement, directly or
indirectly, through one or more intermediaries acting on its behalf, singly or as part of a
partnership, syndicate or other group (as those terms are used within the meaning of Section
13(d)(3) of the 1934 Act), and shall cause each of its Affiliates not to, directly or indirectly,
whether through the taking of shareholder action by written consent or otherwise:

     (a) instigate, support or in any way participate in any proxy contest or otherwise engage in
the “solicitation” of “proxies” (as such terms are defined in Rule 14a-1 under the 1934 Act,
whether or not such solicitation is exempt under Rule 14a-2 under the 1934 Act) with respect to any
matter from holders of Voting Stock (including by the execution of actions by written consent) in
opposition to proposals or matters proposed, recommended or otherwise supported by the Board of
Directors of the Company (the “Board”) or the Investor;

     (b) become a participant in any contest for the election of directors with respect to the
Company or solicit any consent or communicate with or seek to advise, encourage or influence any
third party with respect to the voting of any Voting Stock; provided, however, that
such Current Shareholder shall not be prevented hereunder from being a “participant” in support of
the management of the Company by reason of the membership of such Current Shareholder’s designee on
the Board or the inclusion of such Current Shareholder’s designee on the slate of nominees for
election to the Board proposed by the Company;

     (c) initiate or participate in the solicitation of, or otherwise solicit, shareholders for the
approval of one or more shareholder proposals with respect to the Company, as described in Rule
14a-8 under the Exchange Act, or induce or attempt to induce any other third party to initiate any
shareholder proposal relating to the Company;

5

 

     (d) form, join, encourage the formation of or in any way participate in a 13D Group (other
than with any other Affiliate of such Current Shareholder) for the purposes of acquiring, holding,
voting or disposing of any Voting Stock;

     (e) solicit, seek or offer to effect, negotiate with or provide any confidential information
to any party with respect to, make any statement or proposal, whether written or oral, either alone
or in concert with others, to the Board, to any director or officer of the Company or to any other
shareholder of the Company with respect to, or otherwise formulate any plan or proposal or make any
public announcement, proposal, offer or filing under the Exchange Act, any similar or successor
statute or otherwise, or take action to cause the Company to make any such filing, with respect to:
(i) any form of business combination transaction or acquisition involving the Company (other than
transactions contemplated by this Agreement), including, without limitation, a merger, exchange
offer or liquidation of the Company’s assets, (ii) any form of restructuring, recapitalization or
similar transaction with respect to the Company, including, without limitation, a merger, exchange
offer or liquidation of the Company’s assets, (iii) any acquisition or disposition of assets
material to the Company, (iv) any request to amend, waive or terminate the provisions of this
Agreement or (v) any proposal or other statement inconsistent with the terms of this Agreement,
provided, however, that such Current Shareholder and its Affiliates (x) may discuss
the affairs and prospects of the Company, the status of Such Current Shareholder’s investment in
the Company and any of the matters described in clause (i) through (v) of this paragraph at any
time, and from time to time, with the Board or any director or executive officer of the Company,
(y) may discuss any matter, including any of the foregoing, with its outside legal and financial
advisors, if as a result of any such discussions such Current Shareholder is not required to make,
and does not make, any public announcement or filing under the 1934 Act otherwise prohibited by
this Agreement and (z) may discuss non-confidential information regarding the Company with any
third parties so long as such Current Shareholder promptly informs the Board of such discussions;

     (f) seek the removal of any of the Board’s directors (other than any designee of such Current
Shareholder);

     (g) seek to increase the number of directors serving on the Board above 11 or to increase the
number of such Current Shareholder’s representatives or designees on the Board above one;

(h) call or seek to have called any meeting of the shareholders of the Company; or

     (i) assist, instigate or encourage any third party to take any of the actions enumerated in
this Section 3.02.

          SECTION 3.03. Non-Disparagement. Each Current Shareholder hereby covenants and
agrees that, during the term of this Agreement, such Current Shareholder shall not make, and will
use its reasonable efforts to prevent anyone acting on its behalf from making, any public statement
or representation, or otherwise communicate, directly or indirectly, in writing, orally, or
otherwise, with parties outside of the Company, or otherwise take any action which may, directly or
indirectly, publicly disparage or be damaging to (a) the Investor or (b) the

6

 

business strategies adopted by the Board of Directors of the Company and the implementation
thereof by Company management.

          SECTION 3.04. Company Cooperation. The Company hereby covenants and agrees that it
will not, and each Current Shareholder irrevocably and unconditionally acknowledges and agrees that
the Company will not (and waives any rights against the Company in relation thereto) to the extent
permitted by law, recognize any encumbrance or agreement on any of the Shares or Other Securities
subject to this Agreement, other than as noted in the last clause of the third sentence of Section
2.03.

ARTICLE IV

MISCELLANEOUS

          SECTION 4.01. Termination. This Agreement shall terminate upon the earlier of (i)
the fourth anniversary of the date hereof or (ii) the date of termination of the Securities
Purchase Agreement.

          SECTION 4.02. Further Assurances. Each of the parties hereto will execute and
deliver such further documents and instruments and take all further action as may be reasonably
necessary in order to consummate the transactions contemplated hereby.

          SECTION 4.03. Specific Performance. The parties hereto agree that irreparable damage
would occur in the event any provision of this Agreement was not performed in accordance with the
terms hereof. The Investor shall be entitled to specific performance of the terms hereof, in
addition to any other remedy at law or in equity, and prior to the Closing, the Company shall be
entitled to specific performance of the terms of the first paragraph of Section 1.01, in addition
to any other remedy at law or in equity.

          SECTION 4.04. No Effect on Fiduciary Duties. Nothing herein stated shall limit or
otherwise affect the fiduciary duties of any affiliate of any of the Shareholders as a director of
the Company. This Agreement only applies to the voting of shares and other securities of the
Company by each of the Current Shareholders in its respective capacity as a shareholder of the
Company.

          SECTION 4.05. Limited Proxy. Notwithstanding anything stated in this Agreement, each
of the Current Shareholders will retain at all times the right to vote, or authorize a proxy to
vote, in such Current Shareholder’s or such proxy’s sole discretion, on all matters other than
those set forth in Article I, which are at any time and from time to time presented to the
Company’s shareholders generally.

          SECTION 4.06. Entire Agreement. This Agreement constitutes the entire agreement
among the Company and the Shareholders (other than the Securities Purchase Agreement and the other
“Transaction Documents” (as defined therein)) with respect to the subject matter hereof and
supersedes all prior agreements and understandings, both written and oral, among the Company and
the Shareholders with respect to the subject matter hereof.

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          SECTION 4.07. Amendment. This Agreement may not be amended except by an instrument
in writing signed by the parties hereto.

          SECTION 4.08. Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law, or public policy, all other
conditions and provisions of this Agreement shall nevertheless remain in full force and effect so
long as the economic or legal substance of this Agreement is not affected in any manner materially
adverse to either party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as closely as possible in a
mutually acceptable manner in order that the terms of this Agreement remain as originally
contemplated to the fullest extent possible.

          SECTION 4.09. Governing Law. All questions concerning the construction, validity,
enforcement and interpretation of the Transaction Documents shall be governed by and construed and
enforced in accordance with the internal laws of the State of Minnesota, without regard to the
principles of conflicts of law thereof. Each party agrees that all legal proceedings concerning
the interpretations, enforcement and defense of the transactions contemplated by this Agreement and
any other Transaction Documents (whether brought against a party hereto or its respective
affiliates, directors, officers, shareholders, employees or agents) shall be commenced exclusively
in the state and federal courts located in Hennepin County, Minnesota, U.S.A. Each party hereto
hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts located in
Hennepin County, Minnesota, U.S.A. for the adjudication of any dispute hereunder or in connection
herewith or with any transaction contemplated hereby or discussed herein (including with respect to
the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not
to assert in any suit, action or proceeding, any claim that it is not personally subject to the
jurisdiction of any such court or that such suit, action or proceeding has been commenced in an
improper or inconvenient venue for such proceeding. Each party hereto hereby irrevocably waives
personal service of process and consents to process being served in any such suit, action or
proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with
evidence of delivery) to such party at the address in effect for notices to it under this Agreement
and agrees that such service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process
in any manner permitted by law. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT
OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. If either party shall
commence an action or proceeding to enforce any provisions of the Transaction Documents, then the
prevailing party in such action or proceeding shall be reimbursed by the other party for its
reasonable attorneys’ fees and other costs and expenses incurred with the investigation,
preparation and prosecution of such action or proceeding.

          SECTION 4.10. Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally, via facsimile (which is confirmed) or
sent by a nationally recognized overnight courier service to the parties at the following addresses
(or such other address for a party as shall be specified by like notice):

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If to the Company:

Wilsons The Leather Experts Inc.

7401 Boone Avenue North

Brooklyn Park, MN 55428

Telephone: (763) 391-4000

Facsimile: (763)

Attention: Chief Financial Officer

With a copy to:

Faegre & Benson LLP

2200 Wells Fargo Center

90 South Seventh Street

Minneapolis, MN 55402-3901

Telephone: (612) 766-7000

Facsimile: (612) 766-1600

Attention: Philip S. Garon, Esq.

If to any of the Shareholders:

to its address and facsimile number set forth on the signature page hereto,
with copies to such Shareholder’s representatives as set forth thereon;

or to such other address and/or facsimile number and/or to the attention of such other person as
the recipient party has specified by written notice given to each other party five (5) days prior
to the effectiveness of such change.

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          IN WITNESS WHEREOF, the Shareholders and the Company have duly executed this Support
Agreement.

	 	 	 	 	 
	 	THE COMPANY:

WILSONS THE LEATHER EXPERTS INC.

 	 
	 	By:  	/s/ Stacy A. Kruse
 	 
	 	 	Name:  	Stacy A. Kruse  	 
	 	 	Title:  	Chief Financial Officer 	 

 

 

[SIGNATURE PAGE TO SUPPORT AGREEMENT]

	 	 	 	 	 
	 	SHAREHOLDER:

PENINSULA INVESTMENT PARTNERS, L.P.

 	 
	 	By:  	Peninsula Capital Appreciation, LLC, its
          General Partner

 	 
	 	By:  	/s/ R. Ted Weschler
 	 
	 	 	Name:  	R. Ted Weschler 	 
	 	 	Title:  	Managing Member
 	 
	 	 	404B East Main Street, 2nd Floor

Charlottesville, Virginia  22902

Attention:  Mr. R. Ted Weschler

Telephone:  (434) 297-0811 

Facsimile:  (434) 220-9321 	 

 

 

[SIGNATURE PAGE TO SUPPORT AGREEMENT]

	 	 	 	 	 
	SHAREHOLDER:

QUAKER CAPITAL PARTNERS I, L.P.

 	 	 
	By:  	Quaker Premier, LP, its general partner

 	 	 
	By:  	Quaker Capital Management Corp., its general partner

 	 	 
	By:  	/s/ Mark G. Schoeppner
 	 	 
	 	Name:  	Mark G. Schoeppner 	 	 
	 	Title:  	President

	 	 
	 	
401 Wood Street, Suite 1300

Pittsburgh, Pennsylvania  15222

Attention:  Mark G. Schoeppner

Telephone:  (412) 281-1948 

Facsimile:  (412) 281-0323 	 	 

 

 

[SIGNATURE PAGE TO SUPPORT AGREEMENT]

	 	 	 	 	 
	SHAREHOLDER:

QUAKER CAPITAL PARTNERS II, L.P.

 	 	 
	By:  	Quaker Premier II, LP, its general partner

 	 	 
	By:  	Quaker Capital Management Corp., its general partner

 	 	 
	By:  	/s/ Mark G. Schoeppner
 	 	 
	 	Name:  	Mark G. Schoeppner 	 	 
	 	Title:  	President

	 	 
	 	
401 Wood Street, Suite 1300

Pittsburgh, Pennsylvania  15222

Attention:  Mark G. Schoeppner

Telephone:  (412) 281-1948 

Facsimile:  (412) 281-0323 	 	 

 

 

[SIGNATURE PAGE TO SUPPORT AGREEMENT]

	 	 	 	 	 
	SHAREHOLDER/INVESTOR:

Marathon Fund Limited Partnership V

 	 	 
	By:  	Miltiades, LLP, its general partner

 	 	 
	By:  	Marathon Ultimate GP, LLC, its general partner

 	 	 
	By:  	/s/ Michael S. Israel
 	 	 
	 	Name:  	Michael S. Israel 	 	 
	 	Title:  	Manager
 
	 	 
	 	
3700 Wells Fargo Center

90 South Seventh Street

Minneapolis, Minnesota 55402

Attention:  Michael T. Sweeney

Telephone:  (612) 338-5912 

Facsimile:  (612) 338-2860

With a copy to:

Dorsey & Whitney LLP

60 South Sixth Street, Suite 1500

Minneapolis, Minnesota  55402

Attention:  Robert A. Rosenbaum, Esq. 

Telephone:  (612) 340-5681

Facsimile:  (612) 340-7800 	 	 

 

 

	 	 	 	 	 

ANNEX A

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Voting Percentage
	 	 	 	 	 	 	Percentage of Stock	 	of Stock
	Shareholder	 	Common Stock Owned*	 	Outstanding	 	Outstanding
	Peninsula
Investment
Partners, L.P.
(“Peninsula”)*
	 	 	15,487,513	 	 	 	39.48	%	 	 	39.48	%
	Quaker Premier I,
LP and Quaker
Premier II, LP
(“Quaker”)**
	 	 	6,708,110	 	 	 	17.10	%	 	 	17.10	%
	Marathon Fund
Limited Partnership
V
	 	None	 	 	0	%	 	 	0	%

 

			
	*	 	In addition, Peninsula holds warrants for 2,857,142 shares of Common Stock
which would be deemed to constitute beneficial ownership by Peninsula of the
underlying shares of Common Stock but which cannot be voted until the warrants
have been exercised and Peninsula shall have acquired record ownership of the
underlying shares of Common Stock.
	 
	**	 	In addition, Quaker holds warrants for 1,142,858 shares of Common Stock
which would be deemed to constitute beneficial ownership by Quaker of the
underlying shares of Common Stock but which cannot be voted until the warrants
have been exercised and Quaker shall have acquired record ownership of the
underlying shares of Common Stock.exv10w2

 

EXHIBIT 10.2

SECOND AMENDMENT TO

FIFTH AMENDED AND RESTATED CREDIT AGREEMENT

     This SECOND AMENDMENT TO FIFTH AMENDED AND RESTATED CREDIT AGREEMENT (this
“Amendment”) is entered into as of this 15th day of June, 2007 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
Fifth Amended and Restated Credit Agreement dated as of December 29, 2006 (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) Section 1.3 of the Credit Agreement is hereby amended by adding the following at
the end thereof:

     “Notwithstanding anything to the contrary contained herein, the parties hereto agree
that (i) on the Second Amendment Effective Date Borrower may (and the Borrower agrees that
it shall) prepay in full all of the outstanding principal of the Term Loan B together with
accrued and unpaid interest thereon and other Obligations relating thereto with a portion of
the proceeds received by Borrower pursuant to the transactions contemplated by the PIPE
Documents and (ii) if the Borrower makes the prepayment as described in, and in accordance
with, clause (i) of this paragraph, the Term Loan B Prepayment Fee (as defined under
and) payable by Borrower pursuant to paragraph (1) of that certain GE Capital Fee
Letter dated as of December 29, 2006 is hereby waived.”

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

 

 

“If Borrower pays after acceleration or reduces or terminates the Revolving Loan Commitment,
whether voluntarily or involuntarily and whether before or after acceleration of the
Obligations, or if any of the Commitments are otherwise terminated, Borrower shall pay as
liquidated damages and compensation for the costs of being prepared to make funds available
hereunder to the Agent, for the ratable benefit of the Lenders based upon their Revolving
Loan Commitments, an amount equal to (A) (i) 0.37% if such payment occurs during the period
from the Closing Date through and including June 30, 2008 or (ii) 0.185% if such payment
occurs during the period from July 1, 2008 through December 31, 2008, multiplied by (B) the
amount of the reduction of the Revolving Loan Commitment. Notwithstanding the foregoing, no
prepayment fee shall be payable by Borrower upon a mandatory prepayment made pursuant to
Sections 1.3(a), 1.3(b), 1.3(d) or 1.16(c) or if such prepayment is made on or after
January 1, 2009 or thereafter; provided that in the case of prepayments made
pursuant to Sections 1.3(b) and 1.3(d), the transaction giving rise to the
applicable prepayment is expressly permitted under Section 6.”

     (c) Section 1.19(l) of the Credit Agreement is hereby amended by deleting the
following phrase contained therein:

“or the payment of any monies to any third party upon such sale or other disposition (to the
extent of such monies)”

     (d) Section 1 is hereby amended by adding the following new Section 1.24 at
the end thereof:

     “Section 1.24. Eligible Equipment

     “Eligible Equipment” shall mean all of the Equipment owned by any Credit
Party and reflected in the most recent Borrowing Base Certificate delivered by Borrower to
Agent, except any Equipment to which any of the exclusionary criteria set forth below
applies. Agent shall have the right to establish, modify, or eliminate Reserves against
Eligible Equipment from time to time in its reasonable credit judgment. In addition, Agent
reserves the right, at any time and from time to time after the Second Amendment Effective
Date, to adjust any of the criteria set forth below, to establish new criteria and to
adjust advance rates with respect to Eligible Equipment in its reasonable credit judgment,
subject to the approval of Requisite Lenders in the case of adjustments or new criteria or
changes in advance rates or the elimination of Reserves which have the effect of making
more credit available. Eligible Equipment shall not include any Equipment of Credit
Parties that:

     (a) is not owned by a Credit Party free and clear of all Liens and rights of any other
Person, except the Liens in favor of Agent, on behalf of itself and Lenders;

     (b) is not located on domestic premises owned, leased or rented by a Credit Party set
forth in Disclosure Schedule (3.2) or (ii) is stored at a leased location other than
a Store located in the United States, unless Agent has given its prior consent thereto and
unless (x) a reasonably satisfactory landlord waiver has been delivered to Agent, or (y)

2

 

Reserves satisfactory to Agent have been established with respect thereto, (iii) is
stored with a bailee or warehouseman unless a reasonably satisfactory, acknowledged bailee
letter has been received by Agent or Reserves reasonably satisfactory to Agent have been
established with respect thereto, (iv) is located at an owned location subject to a mortgage
in favor of a lender other than Agent, unless a reasonably satisfactory mortgagee waiver has
been delivered to Agent, or (v) is located at any site if the aggregate book value of
Equipment at any such location is less than $25,000;

     (c) is not subject to a first priority lien in favor of Agent on behalf of itself and
Lenders subject to Permitted Encumbrances;

     (d) breaches any of the representations or warranties pertaining to Equipment set forth
in the Loan Documents;

     (e) is not covered by property or casualty insurance reasonably acceptable to Agent and
Agent has not received evidence of such property or casualty insurance required by this
Agreement with respect to such Equipment;

     (f) has not been appraised by an appraiser retained by a Credit Party and reasonably
acceptable to Agent;

     (g) a Credit Party does not have good, valid, and marketable title thereto;

     (h) is damaged, defective or obsolete, or constitutes parts or is affixed to real
property;

     (i) is subject to a lease by a Credit Party, as lessor, with any Person (other than
another Credit Party), unless the Lien on and security interest in the related lease shall
be granted to the Agent and Agent shall have received all control agreements and instruments
and all actions shall be taken as reasonably requested by the Agent to perfect the Agent’s
security interest in and other rights with respect to such lease;

     (k) is owned by a Credit Party which (i) is subject to any case or proceeding commenced
by or against such Credit Party seeking the entry of an order for relief under Title 11 of
the United States Code or any other applicable insolvency, debtor relief or debt adjustment
law or (ii) has suspended or ceased doing business, is liquidating, dissolving or winding up
its affairs; or

     (l) is otherwise unacceptable to Agent in its reasonable credit judgment.”

     (e) Section 5.1 of the Credit Agreement is hereby amended by adding the following at
the end thereof:

“Notwithstanding the terms of this Section or any other provisions of the Loan Documents to
the contrary, the termination or breach of store leases by one or more Restructured Credit
Parties and the resulting liabilities arising from such terminations or breaches (as long as
such liabilities are solely liabilities of the Restructured Credit

3

 

Parties), will not constitute a basis for a Default or an Event of Default under this
Agreement or any other Loan Documents”

     (f) Section 6.2 of the Credit Agreement is hereby amended by (i) deleting clause
(c)(vii) therefrom and (ii) adding the following new clauses (d) and (e) at the end thereof:

“; (d) any Credit Party may, so long as no Default or Event of Default has occurred and is
continuing, consummate Acquisitions (and form one or more Subsidiaries which are formed for
the purpose of consummating one or more Acquisitions which are permitted hereunder as long
as within thirty (30) days of such Acquisition (i) such new Subsidiary becomes a Credit
Party hereunder or (ii) such new Subsidiary merges into a Credit Party) as long as prior to
and after giving effect to each such Acquisition the Borrowing Availability is equal to or
in excess of 30% of the aggregate Revolving Loan Commitments; and (e) the Credit Parties may
make other investments in an aggregate amount for all Credit Parties not to exceed
$2,000,000 at any time outstanding.”

     (g) Section 6.3 of the Credit Agreement is hereby amended by (i) amending the amount
“$25,000,000” set forth in the last sentence thereof to “$50,000,000” and (ii) adding the following
new clauses (l), (m) and (n) to the first sentence thereof:

“; (l) Indebtedness secured by second Liens permitted under clause (m) of the definition of
Permitted Encumbrances in an aggregate principal amount not to exceed $30,000,000 at any
time outstanding as long as such Liens are subordinated to the Liens in favor of the Agent
on terms, and pursuant to documentation, reasonably satisfactory to Agent; (m) Indebtedness
secured by Liens permitted under clause (n) of the definition of Permitted Encumbrances; and
(n) other unsecured Indebtedness in an aggregate principal amount not to exceed $2,000,000
at any time outstanding.”

     (h) The first sentence of Section 6.4(a) of the Credit Agreement is hereby amended and
restated to read in its entirety as follows:

“No Credit Party shall enter into or be a party to any transaction with any Affiliate
thereof (other than another Credit Party) except in the ordinary course of and pursuant to
the reasonable requirements of such Credit Party’s business and upon fair and reasonable
terms that are no less favorable to such Credit Party than would be obtained in a comparable
arm’s length transaction with a Person not an Affiliate of such Credit Party, except (i)
intercompany loans permitted in clauses (g) and (h) of Section 6.3;
(ii) the Consignment Agreement and (iii) the transactions consummated pursuant to the PIPE
Documents.”

     (i) Section 6.5 of the Credit Agreement is hereby amended by adding the following
sentence at the end thereof:

“Notwithstanding the terms of this Section or any other provision of the Loan Documents to
the contrary, the change in the capital structure of the Ultimate Parent and the
modification to the applicable charter documents contemplated by the PIPE Documents will not
constitute a breach, a violation of or a Default or an Event of Default under this Agreement
or any other Loan Document.”

4

 

     (j) Section 6.8(a) of the Credit Agreement is hereby amended and restated in its
entirety to read as follows:

“(a) the sale of Inventory in the ordinary course of business and liquidation sales of
Inventory conducted by Persons reasonably acceptable to the Agent and conducted in a manner
consistent with other similar liquidation sales, as long as such liquidation sales are
consistent with the financial model delivered to the Agent on or prior to June 15, 2007 and
(it being covenanted and agreed that (i) prior to conducting any such liquidation sales, the
Borrower shall provide the Agent with a list of the applicable Stores, (ii) once any such
liquidation sales have commenced (and for a reasonable period of time thereafter), on or
prior to the fifth day of each calendar month, the Borrower shall deliver to the Agent an
updated appraisal (which may be a “desk-top” appraisal), prepared on a NOLV basis and by a
Person and in a form reasonably acceptable to Agent, of the Inventory owned by the Borrower
as of the last day of the then immediately preceding calendar month and (iii) no such
liquidation sale or any number of such liquidation sales shall constitute a basis for a
Default or Event of Default under this Agreement or any other Loan Document).”

     (k) Section 6.14 of the Credit Agreement is hereby amended by adding the following as
a new clause (e) thereto:

“and (e) payment-in-kind of stock of the Ultimate Parent as contemplated in the PIPE
Documents.”

     (l) Section 6.17 of the Credit Agreement is hereby amended and restated to read in its
entirety as follows:

     “Section 6.17 PIPE Documents. The Ultimate Parent shall not change or amend
the terms of any or all of the PIPE Documents in any material respect.”

     (m) Clause (e) of Section 8.1 of the Credit Agreement is hereby amended and
restated to read in its entirety as follows:

     “(e) (i) A default or breach shall occur under any other agreement, document or
instrument to which any Credit Party is a party which is not cured within any applicable
grace period, and such default or breach (x) involves the failure to make any payment when
due in respect of any Indebtedness (other than the Obligations) of any Credit Party in
excess of $2,000,000 in the aggregate, or (y) causes, or such permits any holder of such
Indebtedness or a trustee to cause, Indebtedness or a portion thereof in excess of
$2,000,000 in the aggregate to become due prior to its stated maturity or prior to its
regularly scheduled dates of payment, regardless of whether such right is exercised, by such
holder or trustee; or (ii) a Triggering Event (as defined in the PIPE Certificate) has
occurred (unless prior to the occurrence thereof each Purchaser (as such term is defined in
the SPA) (and their respective successors and assigns) have subordinated their rights to
payment as a result of such Triggering Event to the payment of the Obligations in a manner
reasonably acceptable to Agent.”

5

 

     (n) Section 8.1(h) of the Credit Agreement is hereby amended and restated to read in
its entirety as follows:

“A case or proceeding shall have been commenced against any Material Credit Party (other
than one or more Restructured Credit Parties) or a court shall have entered a decree or
order for relief with respect to any Material Credit Party (other than one or more
Restructured Credit Parties) (i) under Title 11 of the United States Code, as now
constituted or hereafter amended or any other applicable federal, state or foreign
bankruptcy or other similar law, (ii) appointing a custodian, receiver, liquidator,
assignee, trustee or sequestrator (or similar official) for any Material Credit Party (other
than one or more Restructured Credit Parties) or any substantial part of any such Person’s
assets, or (iii) ordering the winding-up or liquidation of the affairs of any Material
Credit Party (other than one or more Restructured Credit Parties), and such case or
proceeding shall remain undismissed or unstayed for sixty (60) days or more or such court
shall enter a decree or order granting the relief sought in such case or proceeding.”

     (o) Section 8.1(i) of the Credit Agreement is hereby amended and restated to read in
its entirety as follows:

“Any Material Credit Party (other than one or more Restructured Credit Parties) shall (i)
file a petition seeking relief under Title 11 of the United States Code, as now constituted
or hereafter amended, or any other applicable federal, state or foreign bankruptcy or other
similar law, (ii) consent to the institution of proceedings thereunder or to the filing of
any such petition or to the appointment of or taking possession by a custodian, receiver,
liquidator, assignee, trustee or sequestrator (or similar official) of any Material Credit
Party (other than one or more Restructured Credit Parties) or of any substantial part of any
such Person’s assets, (iii) make an assignment for the benefit of creditors, or (iv) take
any corporate action in furtherance of any of the foregoing.”

     (p) Schedule A to the Credit Agreement is hereby amended by adding the following new
definitions in alphabetical order therein:

     “Acquisition” means an acquisition by a Credit Party of (i) an entity or (ii)
all or substantially all of the assets of an entity; provided that, in each case of (i) or
(ii) such entity is engaged primarily in a line of business reasonably related to the line
of business engaged in by the Credit Parties as of June 15, 2007.

     “Eligible Equipment” shall have the meaning ascribed to it in Section
1.24 hereof.

     “PIPE Certificate” shall have the meaning ascribed to it in Section 2.1
of the SPA.

     “PIPE Documents” shall mean the SPA, the Registration Rights Agreement, the
Warrants, the Support Agreement (each as defined in the SPA), the PIPE Certificate, and each
of the other agreements or documents entered into in connection with the SPA, in each case
as in effect on the Second Amendment Effective Date and as amended, restated, supplemented
or otherwise modified from time to time in a manner permitted hereby.

6

 

     “Restructured Credit Parties” means Store Guarantors which, as of June 15,
2007, operate fewer than seventy-five (75) Stores in the aggregate for all such Store
Guarantors.

     “Second Amendment” shall mean that certain Second Amendment to the Fifth
Amended and Restated Credit Agreement entered into as of June 15, 2007 among the Borrower,
the Agent, the Credit Parties signatory thereto and the Lenders signatory thereto.

     “Second Amendment Effective Date” shall mean the date on which the conditions
precedent set forth in the Second Amendment have been satisfied.

     “SPA” shall mean the Securities Purchase Agreement, dated as of June 1, 2007,
by and among the Ultimate Parent and the Purchasers (as defined therein) (as amended,
restated, supplemented or otherwise modified in a manner permitted hereby).

     (q) Each of the following definitions set forth in Schedule A to the Credit Agreement
is hereby amended and restated to read in its entirety as follows:

     “Borrowing Base” shall mean, as of any date of determination, the sum of:

     (a) 100% of the book value of Eligible Accounts-Retail at all times; plus

     (b) the lesser of (i) $10,000,000 or (ii) 100% of the book value of Eligible
Accounts-Wholesale at all times; plus

     (c) 102.5% of the NOLV of Eligible Inventory-Apparel and 102.5% of the NOLV of the
Inventory-Apparel which shall exist upon a draw on the applicable Eligible Trade L/C-Retail;
plus

     (d) the lesser of (i) $10,000,000 or (ii) 60% of (A) the book value of Eligible
Inventory-Wholesale (including Eligible In-Transit Inventory-Wholesale) at all times
minus (B) the book value of Eligible In-Transit Inventory-Wholesale in excess of
$5,000,000 at all times; plus

     (e) 60% of the book value of the Eligible Inventory-Wholesale, which shall exist upon a
draw on the applicable Eligible Trade L/C-Wholesale; plus

     (f) 85% of the NOLV of Eligible Equipment;

     less the Minimum Excess Availability Reserve and less any additional Reserve
established by Agent at such time.”

     “Change of Control” shall mean any event, transaction or occurrence as a result
of which (a) Ultimate Parent shall cease to own and control all of the economic and voting
rights associated with all of the outstanding capital stock of First Intermediate Parent or
(b) First Intermediate Parent shall cease to own and control all of the economic and voting
rights associated with all of the outstanding capital stock of each of its direct and
indirect Subsidiaries, except as permitted under Section 6.1 and Section 6.8
of this

7

 

Agreement and except for the Joint Ventures and Foreign Subsidiaries or (c) any person
or group of persons (within the meaning of the Securities Exchange Act of 1934, as amended),
other than the Peninsula Investment Partners, L.P. (“Peninsula”), Goldner Hawn
Johnson & Morrison Incorporated (“GHJM”) and Quaker Capital Management Corporation
(“Quaker”) (and Persons which, as of the Second Amendment Effective Date, are Affiliates of
Peninsula, GHJM or Quaker), shall have acquired beneficial ownership (within the meaning of
Rule 13d-3 promulgated by the Securities and Exchange Commission under the Securities
Exchange Act of 1934, as amended) of 30% or more of the issued and outstanding shares of
capital Stock of Ultimate Parent having the right to vote for the election of directors of
Ultimate Parent under ordinary circumstances unless at the time of such acquired beneficial
ownership Peninsula, GHJM and Quaker (and Persons which, as of the Second Amendment
Effective Date, are Affiliates of Peninsula, GHJM or Quaker) collectively own in excess of
50% of the issued and outstanding shares of capital Stock of Ultimate Parent having the
right to vote for the election of directors of Ultimate Parent under ordinary circumstances,
or (d) during any period of twelve consecutive calendar months, individuals who at the
beginning of such period constituted the board of directors of Ultimate Parent (together
with any new directors whose election by the board of directors of Ultimate Parent or whose
nomination for election by stockholders of Ultimate Parent was approved by a vote of at
least a majority of the directors then still in office who either were directors at the
beginning of such period or whose election or nomination for election was previously so
approved, and together with any directors elected pursuant to the terms of the PIPE
Certificate so long as one or more of Peninsula, GHJM or Quaker own a majority of the
outstanding preferred stock authorized thereby) cease for any reason other than death or
disability to constitute a majority of the directors then in office.

     “Commitments” means (a) as to any Lender, the aggregate of such Lender’s
Revolving Loan Commitment (including without duplication the Swing Line Lender’s Swing Line
Commitment as a subset of its Revolving Loan Commitment) and Term Loan B Commitment as set
forth on the signature pages hereto or in the most recent Assignment Agreement executed by
such Lender and (b) as to all Lenders, the aggregate of all Lenders’ Revolving Loan
Commitments (including without duplication the Swing Line Lender’s Swing Line Commitment as
a subset of its Revolving Loan Commitment) and the Term Loan B Commitment of the Term
Lender, which aggregate commitment shall be One Hundred Fifteen Million Dollars
($115,000,000) on the Second Amendment Effective Date, as to each of clauses (a) and
(b), as such Commitments may be reduced, amortized or adjusted from time to time in
accordance with this Agreement.

     “Material Adverse Effect” shall mean a material adverse effect on (a) the
business, assets, operations or financial or other condition of the Loan Parties considered
as a whole, (b) Borrower’s ability to pay any of the Loans or any of the other Obligations
in accordance with the terms thereof, (c) any material part of the Collateral or Agent’s
Liens, on behalf of itself and Lenders, on such Collateral or the priority of such Liens, or
(d) Agent’s or any Lender’s rights and remedies under this Agreement and the other Loan
Documents.

8

 

     “Net Orderly Liquidation Value” or “NOLV” shall mean the appraised
orderly liquidation value (expressed as a percentage) of Inventory-Apparel and Equipment, as
applicable (without duplication as to any Reserves) less reasonable liquidation expenses (to
the extent not reflected in the applicable appraisals) as determined in accordance with the
then most recent applicable appraisal delivered to the Agent pursuant to subsection
(g) of Schedule H hereto or, until the first such applicable appraisal is
delivered, in accordance with the most recent appraisal delivered to Agent prior to the
Closing Date.

     “Non-Core Business” means any retail or wholesale business other than the
retail leather apparel business and retail leather and non-leather accessories business, the
retail luggage business, the New Wholesale Business and the wholesale business consisting of
selling goods against firm purchase orders.

     “Term Loan B Commitment” means, as to the Term Lender, the commitment of the
Term Lender to continue the Term Loan B on the Second Amendment Effective Date as set forth
in Section 1.1(b)(i) of this Agreement, the amount of which commitment is Zero Dollars ($0).
After advancing the Term Loan B, each reference to a Term Lender’s Term Loan B Commitment
shall refer to that Term Lender’s Pro Rata Share of the outstanding Term Loan B.

     “Termination Date” shall mean the date on which the Loans have been
indefeasibly repaid in full and all other Obligations under this Agreement and the other
Loan Documents have been completely discharged, other than unasserted claims for
indemnification which may survive this Agreement, and Borrower shall not have any further
right to borrow any monies thereunder.

     (r) Clause (a) in the definition of “Indebtedness” set forth in Schedule A to
the Credit Agreement is hereby amended and restated in its entirety to read as follows:

“(a) all indebtedness of such Person for borrowed money or for the deferred purchase price
of property payment for which is deferred six (6) months or more, but excluding (i)
obligations to trade creditors incurred in the ordinary course of business that are not
overdue by more than six (6) months unless being contested in good faith and (ii)
obligations outstanding pursuant to the PIPE Documents,”

     (s) The definition of “Permitted Encumbrances” set forth in Schedule A to the
Credit Agreement is hereby amended by adding the following as new clauses (m) and (n) thereto:

“; (m) second Liens on assets of the Credit Parties securing the Obligations, which secure
Indebtedness not to exceed the amount permitted under clause (l) of the first sentence of
Section 6.3 as long as such Liens are subordinated to the Liens in favor of the
Agent on terms, and pursuant to documentation, reasonably satisfactory to Agent; and (n)
other Liens securing Indebtedness in a principal amount not to exceed $1,000,000 at any time
outstanding.”

     (t) Exhibit 4.1(b) to the Credit Agreement is hereby amended and restated to read in
its entirety as set forth on Exhibit 4.1(b) attached hereto.

9

 

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 (as amended
hereby) 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 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
satisfaction of the following:

     (a) Execution and delivery of (i) this Amendment by Borrower, the Credit Parties that are
listed on the signature pages hereto, the Agent and each Lender and (ii) each of the documents
listed on Exhibit A to this Amendment by each of the applicable Persons;

     (b) Delivery to the Agent of a certified copy of each of the PIPE Documents;

     (c) Payment of a closing fee to Agent, for the benefit of Lenders signatory hereto, in an
amount equal to $57,500, which closing fee shall be fully earned and payable on the date hereof;
and

     (d) Payment in full of all of the outstanding principal and interest on Term Loan B.

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.

10

 

     (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.

     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 page follows]

11

 

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

	 	 	 	 	 
	 	BORROWER:

WILSONS LEATHER HOLDINGS INC.

 	 
	 	By:  	/s/ Stacy A. Kruse
 	 
	 	 	Title: Chief Financial Officer and Treasurer 	 
	 	 	 	 
	 

	 	 	 	 	 
	 	LENDERS:

GENERAL ELECTRIC CAPITAL 

CORPORATION, as Agent, Lender, Term Lender and Swing

Line Lender

 	 
	 	By:  	/s/ Mark J. Forti
 	 
	 	 	Title: Managing Director 	 
	 	 	 	 
	 

[Signature Page to Second Amendment]

 

 

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

	 	 	 	 	 
	 	Wilsons The Leather Experts Inc.

 	 
	 	By:  	/s/ Stacy A. Kruse
 	 
	 	 	Title: Chief Financial Officer 	 
	 	 	 	 
	 

	 	 	 	 	 
	 	Wilsons Center, Inc.

 	 
	 	By:  	/s/ Stacy A. Kruse
 	 
	 	 	Title: Chief Financial Officer 	 
	 	 	 	 
	 

	 	 	 	 	 
	 	Rosedale Wilsons, Inc.

 	 
	 	By:  	/s/ Stacy A. Kruse
 	 
	 	 	Title: Chief Financial Officer 	 
	 	 	 	 
	 

	 	 	 	 	 
	 	River Hills Wilsons, Inc.

 	 
	 	By:  	/s/ Stacy A. Kruse
 	 
	 	 	Title: Chief Financial Officer 	 
	 	 	 	 
	 

	 	 	 	 	 
	 	Bermans The Leather Experts Inc.

 	 
	 	By:  	/s/ Stacy A. Kruse
 	 
	 	 	Title: Chief Financial Officer 	 
	 	 	 	 
	 

[Signature Page to Second Amendment]

 

 

EXHIBIT 4.1(b)

TO

CREDIT AGREEMENT

FORM OF BORROWING BASE CERTIFICATE

[To be attached]

Exh. 4.1(b) — 1

 

 

Wilsons Leather

Borrowing Base Certificate

As of x/x/xx

	 	 	 	 	 	 	 	 	 
	Credit Card Receivables per x/x/xx Sales Audit System
	 	 	 	 	 	$	—	 
	Advance Rate
	 	 	 	 	 	 	100.0	%
	 
	 	 	 	 	 	 	 
	Total Credit Card Receivables Availability
	 	 	 	 	 	$	—	 
	 
	 	 	 	 	 	 	 	 
	Wholesale Accounts Receivable per x/x/xx Report
	 	 	 	 	 	$	—	 
	Less Ineligibles
	 	 	 	 	 	 	 	 
	> 60 days past due (or > 90 days from
invoice date)
	 	 	—	 	 	 	 	 
	Other Ineligibles
	 	 	—	 	 	 	 	 
	Total Ineligibles
	 	 	 	 	 	 	—	 
	 
	 	 	 	 	 	 	 
	Eligible Wholesale Accounts Receivable
	 	 	 	 	 	$	—	 
	Advance Rate
	 	 	 	 	 	 	100.0	%
	 
	 	 	 	 	 	 	 
	Total Wholesale Accounts Receivables Availability
	 	 	 	 	 	$	—	 
	 
	 	 	 	 	 	 	 	 
	Maximum
	 	 	 	 	 	$	10,000,000	 
	Lesser of Total and Maximum
	 	 	 	 	 	$	—	 
	 
	 	 	 	 	 	 	 	 
	Inventory per the x/x/xx External Stock Ledger

	 	 	 	 	 	$	—	 
	E-commerce Inventory per the x/x/xx Stock Ledger
	 	 	 	 	 	 	—	 
	Merchandise In-transit — Wires
	 	 	 	 	 	 	—	 
	Merchandise In-transit — LC’s
	 	 	 	 	 	 	—	 
	Merchandise In-transit — Domestic Freight
	 	 	 	 	 	 	—	 
	Merchandise In-transit — Prepaid
	 	 	 	 	 	 	—	 
	Total Inventory
	 	 	 	 	 	$	—	 
	Less Ineligibles
	 	 	 	 	 	 	 	 
	Merchandise In-transit — Unfunded LC’s
	 	$	—	 	 	 	 	 
	Layaway Inventory
	 	 	—	 	 	 	 	 
	Liquidation Store Inventory
	 	 	—	 	 	 	 	 
	Book to Physical Adjustment Reserve
	 	 	—	 	 	 	 	 
	Discontinued Product Lines
	 	 	—	 	 	 	 	 
	Locations < $50,000
	 	 	—	 	 	 	 	 
	License Inventory With No Disposition Agreement
	 	 	—	 	 	 	 	 
	Inventory Not Located in 48 Contiguous States
	 	 	—	 	 	 	 	 
	Inventory at E-commerce Location (No Landlord Waiver)
	 	 	—	 	 	 	 	 
	Total Ineligibles
	 	 	 	 	 	 	—	 
	 
	 	 	 	 	 	 	 
	Eligible Inventory
	 	 	 	 	 	$	—	 
	NOLV Percentage through June 2006
	 	 	 	 	 	 	72.8	%
	 
	 	 	 	 	 	 	 
	NOLV Value Inventory
	 	 	 	 	 	$	—	 
	Advance Rate
	 	 	 	 	 	 	102.5	%
	 
	 	 	 	 	 	 	 
	Inventory Availability
	 	 	 	 	 	$	—	 
	Less Reserves:
	 	 	 	 	 	 	 	 
	Landed Costs of In-transit
	 	$	—	 	 	 	 	 

 

 

	 	 	 	 	 	 	 	 	 
	Gift Certificates (50% of G/L Amount)
	 	 	—	 	 	 	 	 
	Credit Memos (50% of G/L Amount)
	 	 	—	 	 	 	 	 
	Gift Cards (50% of G/L Amount)
	 	 	—	 	 	 	 	 
	 
	 	 	 	 	 	 	 
	Total Reserves
	 	 	 	 	 	 	—	 
	 
	 	 	 	 	 	 	 
	Total Inventory Availability
	 	 	 	 	 	$	—	 
	 
	 	 	 	 	 	 	 	 
	Import LC Inventory
	 	 	 	 	 	$	—	 
	Less: Import Payments
	 	 	 	 	 	 	—	 
	Plus: New Import LC Issuances
	 	 	 	 	 	 	—	 
	 
	 	 	 	 	 	 	 
	Net Import LC Inventory
	 	 	 	 	 	$	—	 
	NOLV Percentage through June 2006
	 	 	 	 	 	 	58.3	%
	 
	 	 	 	 	 	 	 
	NOLV Value LC Inventory
	 	 	 	 	 	$	—	 
	Advance Rate
	 	 	 	 	 	 	102.5	%
	 
	 	 	 	 	 	 	 
	Available Import LC Inventory
	 	 	 	 	 	$	—	 
	Less: Landed Costs
	 	 	 	 	 	 	—	 
	 
	 	 	 	 	 	 	 
	Total Import LC Inventory Availability
	 	 	 	 	 	$	—	 
	 
	 	 	 	 	 	 	 	 
	Wholesale Inventory
	 	 	 	 	 	$	—	 
	Less Ineligibles:
	 	 	 	 	 	 	 	 
	In-transit Greater Than $5,000,000
	 	 	—	 	 	 	 	 
	License Inventory With No Disposition Agreement
	 	 	—	 	 	 	 	 
	Eligible Wholesale Inventory
	 	 	 	 	 	$	—	 
	Advance Rate
	 	 	 	 	 	 	60.0	%
	 
	 	 	 	 	 	 	 
	Total Wholesale Inventory Availability
	 	 	 	 	 	$	—	 
	 
	 	 	 	 	 	 	 	 
	Maximum
	 	 	 	 	 	$	10,000,000	 
	Lesser of Total and Maximum
	 	 	 	 	 	$	—	 
	 
	 	 	 	 	 	 	 	 
	FMV Of FF&E
	 	 	 	 	 	$	—	 
	Advance Rate
	 	 	 	 	 	 	85.0	%
	 
	 	 	 	 	 	 	 
	Total FF&E Availability
	 	 	 	 	 	$	—	 
	 
	 	 	 	 	 	 	 	 
	Revolver Availability
	 	 	 	 	 	$	—	 
	 
	 	 	 	 	 	 	 	 
	Maximum Revolver
	 	 	 	 	 	$	115,000,000	 
	Lesser of Revolver Availability and Maximum Revolver
	 	 	 	 	 	$	—	 
	 
	 	 	 	 	 	 	 	 
	Less:
	 	 	 	 	 	 	 	 
	Revolver Outstanding
	 	 	—	 	 	 	 	 
	Import LC’s
	 	 	—	 	 	 	 	 
	Stand-by LC’s
	 	 	—	 	 	 	 	 
	10% Excess Availability Covenant
	 	 	—	 	 	 	 	 
	Other
	 	 	—	 	 	 	 	 
	 
	 	 	 	 	 	 	 
	Total Outstanding
	 	 	 	 	 	 	—	 
	 
	 	 	 	 	 	 	 
	Excess Availability
	 	 	 	 	 	$	—	 

 

 

Wilsons Leather Holdings Inc. hereby certifies that the foregoing accurately reflects its
Borrowing Availability as of the date hereof in accordance with the Fifth Amended and Restated
Credit Agreement dated as of December 29, 2006, among it, General Electric Capital Corporation and
the other parties thereto.

Date: ____________________

WILSONS LEATHER HOLDINGS INC.

By: _______________________

Its: _______________________

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00125-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00125-of-00352.parquet"}]]