Document:

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Exhibit 4.1

REGISTRATION RIGHTS AGREEMENT

          This Registration Rights Agreement (this “Agreement”) is made and entered into as of June 15,
2007, among Wilsons The Leather Experts Inc., a Minnesota corporation (the “Company”), and the
purchasers set forth on Schedule 1 attached hereto (each a “Purchaser” and collectively, the
“Purchasers”).

          This Agreement is made pursuant to the Securities Purchase Agreement, dated as of the date
hereof, by and among the Company and the Purchasers (the “Purchase Agreement”).

          The Company and the Purchasers hereby agree as follows:

     1. Definitions. Capitalized terms used and not otherwise defined herein that are
defined in the Purchase Agreement shall have the meanings given such terms in the Purchase
Agreement. As used in this Agreement, the following terms shall have the following meanings:

     “Advice” shall have the meaning set forth in Section 10(d).

     “Board of Directors” means, at any time, the board of directors of the Company.

     “Excluded Registration” means (i) a registration relating to the sale of securities to
employees of the Company or a subsidiary pursuant to a stock option, stock purchase, or
similar plan; (ii) a registration relating to an SEC Rule 145 transaction; (iii) a
registration on any form that does not include substantially the same information as would
be required to be included in a Registration Statement covering the sale of the Registrable
Securities; or (iv) a registration in which the only Common Stock being registered is Common
Stock issuable upon conversion of debt securities that are also being registered.

     “Holder” or “Holders” means the holder or holders, as the case may be, from time to
time of Registrable Securities or securities convertible into Registrable Securities.

     “Holder 1” means Marathon Fund Limited Partnership V.

     “Immediate Family Member” means a child, stepchild, grandchild, parent, stepparent,
grandparent, spouse, life partner (provided such individual lives in the same household),
sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or
sister-in-law, including adoptive relationships, of a natural person referred to herein.

     “Indemnified Party” shall have the meaning set forth in Section 7(c).

     “Indemnifying Party” shall have the meaning set forth in Section 7(c).

     “Losses” shall have the meaning set forth in Section 7(a).

 

 

     “PQ Registrable Securities” means all Registrable Securities held by Peninsula
Investment Partners, L.P., Quaker Capital Partners I, L.P. and Quaker Capital Partners II,
L.P.

     “Proceeding” means an action, claim, suit, investigation or proceeding (including,
without limitation, an investigation or partial proceeding, such as a deposition), whether
commenced or threatened.

     “Prospectus” means the prospectus included in a Registration Statement (including,
without limitation, a prospectus that includes any information previously omitted from a
prospectus filed as part of an effective Registration Statement in reliance upon Rule 430A
promulgated under the Securities Act), as amended or supplemented by any prospectus
supplement, with respect to the terms of the offering of any portion of the Registrable
Securities covered by a Registration Statement, and all other amendments and supplements to
the Prospectus, including post-effective amendments, and all material incorporated by
reference or deemed to be incorporated by reference in such Prospectus.

     “Registrable Securities” means as of the date in question all of (a) the Conversion
Shares and Warrant Shares issued or issuable, (b) any Common Stock issued or issuable (i)
upon conversion of any capital stock of the Company acquired by the Purchasers after the
date hereof, or (ii) upon exercise of any option, warrant, or other right to acquire Common
Stock acquired by the Purchasers after the date hereof, (c) any shares of Common Stock
issued or issuable upon any stock split, dividend or other distribution, recapitalization or
similar event with respect to the shares referenced in clauses (a) and (b) above, (d) any
Common Stock issued as (or issuable upon the conversion or exercise of any warrant, right,
or other security that is issued as) a dividend or other distribution with respect to, or in
exchange for or in replacement of, the shares referenced in clauses (a), (b), and (c) above;
excluding in all cases, however, any Registrable Securities sold by a Person in a
transaction in which the applicable rights under this Agreement are not assigned pursuant to
Section 10(g); provided, however, that none of the above described securities shall be
treated as Registrable Securities if (a) they have been sold to or through a broker or
dealer or underwriter in a public distribution or a public securities transaction, or (b)
they have been sold in a transaction exempt from the registration and prospectus delivery
requirements of the Securities Act so that all transfer restrictions and restrictive legends
with respect thereto are removed upon the consummation of such sale.

     “Registration Statement” means the registration statements required to be filed
hereunder, including (in each case) the Prospectus, amendments and supplements to such
registration statement or Prospectus, including pre- and post-effective amendments, all
exhibits thereto, and all material incorporated by reference or deemed to be incorporated by
reference in such registration statement.

     “Rule 144” means Rule 144 promulgated by the SEC pursuant to the Securities Act, as
such Rule may be amended from time to time, or any similar rule or regulation hereafter
adopted by the SEC having substantially the same purpose and effect as such Rule.

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     “SEC” shall mean the United States Securities and Exchange Commission.

     “Selling Shareholder Questionnaire” shall have the meaning set forth in Section 5.

     2. Registration Rights.

          (a) Demand Registration.

     (i) Upon a written request from Holder 1, the Company shall (A) within ten (10)
days after the date such request is given, give notice thereof (the “Demand Notice”)
to all Holders other than the Holder 1, and (B) as soon as practicable, and in any
event within sixty (60) days after the date such request is given by the Holder 1,
file a Registration Statement under the Securities Act covering all Registrable
Securities that the Holder 1 requested to be registered and any additional
Registrable Securities requested to be included in such registration by any other
Holders, as specified by notice given by each such Holder to the Company within
thirty (30) days of the date the Demand Notice is given, and in each case, subject
to the limitations of Sections 2(a)(ii), 2(a)(iii), and 3(a) below.

     (ii) Notwithstanding the Company’s obligations pursuant to Section 2(a)(i)
above, after receipt of any written request from Holder 1 to file a Registration
Statement pursuant to Section 2(a)(i), if the Company furnishes to Holder 1 a
certificate signed by the Company’s chief executive officer stating that in the good
faith judgment of the Board of Directors it would be materially detrimental to the
Company and its shareholders for such Registration Statement to either become
effective or remain effective for as long as such Registration Statement otherwise
would be required to remain effective, because such action would (A) materially
interfere with a significant acquisition, corporate reorganization, or other similar
transaction involving the Company; (B) require premature disclosure of material
information that the Company has a bona fide business purpose for preserving as
confidential; or (C) render the Company unable to comply with requirements under the
Securities Act or Exchange Act, then the Company shall have the right to defer
taking action with respect to such filing, and any time periods with respect to
filing or effectiveness thereof shall be tolled correspondingly, for a period of not
more than sixty (60) days after the request of Holder 1 is given; provided,
however, that the Company may not invoke this right more than once in any
twelve (12) month period; and provided further that the Company shall not register
any securities for its own account or that of any other shareholder during such
sixty (60) day period other than an Excluded Registration.

     (iii) The Company shall not be obligated to effect, or to take any action to
effect, any registration pursuant to Section 2(a)(i) after the Company has effected
two registrations pursuant to Section 2(a)(i). A registration shall not be counted
as “effected” for purposes of this Section 2(a)(iii) until such time as the

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applicable Registration Statement has been declared effective by the SEC,
unless Holder 1 withdraws its request for such registration.

     (iv) The Company shall not be obligated to effect, or take any action to
effect, any registration pursuant to Section 2(a)(i) during the period starting with
the date forty-five (45) days prior to the Company’s good faith estimate of the date
of filing of, and ending on a date ninety (90) days after the effective date of, a
registration initiated by the Company for its own issuance of securities;
provided however, that the Company is actively employing in good
faith all reasonable efforts to cause such registration statement to become
effective and the Company complied with its obligations under Section 2(b) with
respect to such registration. The Company may not invoke this right more than once
in any twelve (12) month period.

     (b) Piggy-Back Registrations. If the Company proposes to register (including,
for this purpose, a registration effected by the Company for shareholders other than the
Holders) any of its Common Stock under the Securities Act in connection with the public
offering of such securities solely for cash (other than in an Excluded Registration), the
Company shall, at such time, promptly give each Holder notice of such registration. Upon
the request of each Holder given within twenty (20) days after such notice is given by the
Company, the Company shall, subject to the provisions of Section 3(b), cause to be
registered all of the Registrable Securities that each such Holder has requested to be
included in such registration. The Company shall have the right to terminate or withdraw
any registration initiated by it under this Section 2(b) before the effective date of such
registration, whether or not any Holder has elected to include Registrable Securities in
such registration.

     (c) Termination of Registration Rights. In addition to the other limitations
contained in this Agreement, no Holder shall be entitled to exercise any rights provided in
this Agreement after such time as such Holder may freely sell all of such Holder’s
Registrable Securities within a three-month period pursuant to Rule 144, or without regard
to the volume limitations of Rule 144 pursuant to Rule 144(k).

     3. Underwriting.

     (a) If, pursuant to Section 2(a)(i), Holder 1 intends to distribute the Registrable
Securities covered by its request by means of an underwriting, it shall so advise the
Company as a part of its request made pursuant to Section 2(a)(i), and the Company shall
include such information in the Demand Notice. The underwriter(s) will be selected by
Holder 1. In such event, the right of any Holder to include such Holder’s Registrable
Securities in such registration shall be conditioned upon such Holder’s participation in
such underwriting and the inclusion of such Holder’s Registrable Securities in the
underwriting to the extent provided herein. All Holders proposing to distribute their
securities through such underwriting shall (together with the Company as provided in Section
4(l)) enter into an underwriting agreement in customary form with the underwriter(s)
selected for such underwriting. Notwithstanding any other provision of this Section 3(a),
if the managing underwriter(s) advise(s) Holder 1 in writing that

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marketing factors require a limitation on the number of shares to be underwritten, then
Holder 1 shall so advise all Holders of Registrable Securities that otherwise would be
underwritten pursuant hereto, and the number of Registrable Securities that may be included
in the underwriting shall be allocated among such Holders of Registrable Securities,
including Holder 1, in proportion (as nearly as practicable) to the number of Registrable
Securities owned by each Holder or in such other proportion as shall mutually be agreed to
by all such selling Holders; provided, however, that (i) the number of
Registrable Securities held by the Holders to be included in such underwriting shall not be
reduced unless all other securities are first entirely excluded from the underwriting, and
(ii) any Registrable Securities which are not PQ Registrable Securities shall not be
excluded from such underwriting unless all PQ Registrable Securities are first excluded from
such offering. To facilitate the allocation of shares in accordance with the above
provisions, the Company or the underwriters may round the number of shares allocated to any
Holder to the nearest 100 shares. For purposes of the provision in this Section 3(a)
concerning apportionment, for any selling Holder that is a partnership, limited liability
company, or corporation, the partners, members, retired partners, retired members,
stockholders, and Affiliates of such Holder, or the estates and Immediate Family Members of
any such partners, retired partners, members, and retired members and any trusts for the
benefit of any of the foregoing Persons, shall be deemed to be a single “selling Holder,”
and any pro rata reduction with respect to such “selling Holder” shall be based upon the
aggregate number of Registrable Securities owned by all Persons included in such “selling
Holder,” as defined in this sentence.

     (b) In connection with any offering involving an underwriting of shares of the
Company’s capital stock pursuant to Section 2(b), the Company shall not be required to
include any of the Holders’ Registrable Securities in such underwriting unless the Holders
accept the terms of the underwriting as agreed upon between the Company and its
underwriters, and then only in such quantity as the underwriters in their sole discretion
determine will not jeopardize the success of the offering by the Company. If the total
number of securities, including Registrable Securities, requested by shareholders to be
included in such offering exceeds the number of securities to be sold (other than by the
Company) that the underwriters in their reasonable discretion determine is compatible with
the success of the offering, then the Company shall be required to include in the offering
only that number of such securities, including Registrable Securities, which the
underwriters and the Company in their sole discretion determine will not jeopardize the
success of the offering. If the underwriters determine that less than all of the
Registrable Securities requested to be registered can be included in such offering, then the
Registrable Securities that are included in such offering shall be allocated among the
selling Holders in proportion (as nearly as practicable) to the number of Registrable
Securities owned by each selling Holder or in such other proportions as shall mutually be
agreed to by all such selling Holders. To facilitate the allocation of shares in accordance
with the above provisions, the Company or the underwriters may round the number of shares
allocated to any Holder to the nearest 100 shares. Notwithstanding the foregoing, in no
event shall (i) the number of Registrable Securities included in such offering be reduced
unless all other securities (other than securities to be sold by the Company) are first
entirely excluded from the offering, or (ii) the number of Registrable Securities included
in the offering be reduced below thirty percent (30%) of the total number of

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securities included in such offering or (iii) notwithstanding (ii) above, any
Registrable Securities which are not PQ Registrable Securities be excluded from such
underwriting unless all PQ Registrable Securities are first excluded from such offering.
For purposes of the provision in this Section 3(b) concerning apportionment, for any selling
Holder that is a partnership, limited liability company, or corporation, the partners,
members, retired partners, retired members, stockholders, and Affiliates of such Holder, or
the estates and Immediate Family Members of any such partners, retired partners, members,
and retired members and any trusts for the benefit of any of the foregoing Persons, shall be
deemed to be a single “selling Holder,” and any pro rata reduction with respect to such
“selling Holder” shall be based upon the aggregate number of Registrable Securities owned by
all Persons included in such “selling Holder,” as defined in this sentence.

     (c) For purposes of Section 2(a)(i), a registration shall not be counted as “effected”
if, as a result of an exercise of the underwriter’s cutback provisions in Section 3(a),
fewer than fifty percent (50%) of the total number of Registrable Securities that Holders
have requested to be included in such Registration Statement are actually included.

     4. Registration Procedures. Whenever required under Section 2 to effect the
registration of any Registrable Securities, the Company shall:

     (a) not less than five Trading Days prior to the filing of each Registration Statement
or any related Prospectus or any amendment or supplement thereto (including any document
that would be incorporated or deemed to be incorporated therein by reference), (i) furnish
to each Holder copies of all such documents proposed to be filed (except for any document
incorporated or document to be incorporated by reference and such post effective amendments
or supplements that are solely for the purpose of incorporating the information contained in
the periodic and/or current reports filed by the Company under the Exchange Act into the
Registration Statement or related Prospectus), which documents will be subject to the review
of such Holders, and (ii) cause its officers and directors, and use commercially reasonable
efforts to cause its counsel and independent registered public accounting firm, to respond
to such inquiries as shall be necessary, in the reasonable opinion of respective counsel to
each Holder to conduct a reasonable investigation within the meaning of the Securities Act;

     (b) not file a Registration Statement or any such Prospectus or any amendments or
supplements thereto if Holder 1 shall reasonably object in good faith, provided that, the
Company is notified of such objection in writing no later than five (5) Trading Days after
the Holders have been so furnished copies of any Registration Statement or one (1) day after
the Holders have been so furnished copies of any related Prospectus or any amendment or
supplement;

     (c) promptly (i) make available for inspection by the selling Holders, any managing
underwriter(s) participating in any disposition pursuant to such Registration Statement, and
any attorney or accountant or other agent retained by any such underwriter or selected by
the selling Holders, all financial and other records, pertinent corporate documents, and
properties of the Company, and (ii) cause the Company’s

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officers and directors, and use commercially reasonable efforts to cause the Company’s
counsel and independent registered public accounting firm, to supply all information
reasonably requested by any such selling Holder, managing underwriter, attorney, accountant,
or agent, in each case, as necessary or advisable to verify the accuracy of the information
in such Registration Statement and to conduct appropriate due diligence in connection
therewith;

     (d) subject to Sections 4(a) and (b), prepare and file, as expeditiously as reasonably
possible, with the SEC a Registration Statement with respect to such Registrable Securities
and use commercially reasonable efforts to (i) cause such Registration Statement to become
effective as promptly as possible after the filing thereof and (ii) upon the request of
Holder 1, keep such Registration Statement effective for a period of up to one hundred
eighty (180) days or, if earlier, until the distribution contemplated in the Registration
Statement has been completed; provided, however, that (A) such one hundred
eighty (180) day period shall be extended for a period of time equal to the period the
Holder refrains, at the request of an underwriter of Common Stock (or other securities) of
the Company, from selling any securities included in such registration, and (B) in the case
of any registration of Registrable Securities on Form S-3 that are intended to be offered on
a continuous or delayed basis, subject to compliance with applicable SEC rules, such one
hundred eighty (180) day period shall be extended for up to 360 days, if necessary, to keep
the Registration Statement effective until all such Registrable Securities are sold;

     (e) subject to Sections 4(a) and (b), prepare and file with the SEC such amendments and
supplements to such Registration Statement, and the Prospectus used in connection with such
Registration Statement, as may be necessary to comply with the Securities Act in order to
enable the disposition of all Registrable Securities covered by such Registration Statement;

     (f) respond as promptly as reasonably possible to any comments received from the SEC
with respect to a Registration Statement or any amendment thereto and as promptly as
reasonably possible provide the Holders true and complete copies of all correspondence from
and to the SEC relating to a Registration Statement;

     (g) comply with the provisions of the Securities Act and the Exchange Act with respect
to the disposition of all Registrable Securities covered by a Registration Statement during
the applicable period in accordance (subject to the terms of this Agreement) with the
intended methods of disposition by the Holders thereof set forth in such Registration
Statement as so amended or in such Prospectus as so supplemented;

     (h) promptly notify the Holders of Registrable Securities to be sold (which notice
shall, pursuant to clauses (ii) through (vi) hereof, be accompanied by an instruction to
suspend the use of the Prospectus until the requisite changes have been made) as promptly as
reasonably possible (and, in the case of (i)(A) below, not less than five Trading Days prior
to such filing) and (if requested by any such Holder) confirm such notice in writing no
later than one Trading Day following the day (i) (A) when a Prospectus or any Prospectus
supplement or post-effective amendment to a Registration

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Statement is proposed to be filed; (B) when the SEC notifies the Company whether there
will be a “review” of such Registration Statement and whenever the SEC comments in writing
on such Registration Statement (the Company shall provide true and complete copies thereof
and all written responses thereto to each of the Holders); and (C) with respect to a
Registration Statement or any post-effective amendment, when the same has become effective;
(ii) of any request by the SEC or any other federal or state governmental authority for
amendments or supplements to a Registration Statement or Prospectus or for additional
information; (iii) of the issuance by the SEC or any other federal or state governmental
authority of any stop order suspending the effectiveness of a Registration Statement
covering any or all of the Registrable Securities or the initiation of any Proceedings for
that purpose; (iv) of the receipt by the Company of any notification with respect to the
suspension of the qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction, or the initiation or threatening of any Proceeding
for such purpose; (v) of the occurrence of any event or passage of time that makes the
financial statements included in a Registration Statement ineligible for inclusion therein
or any statement made in a Registration Statement or Prospectus or any document incorporated
or deemed to be incorporated therein by reference untrue in any material respect or that
requires any revisions to a Registration Statement, Prospectus or other documents so that,
in the case of a Registration Statement or the Prospectus, as the case may be, it will not
contain any untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; and (vi) the occurrence or
existence of any pending corporate development with respect to the Company that the Company
believes may be material and that, in the determination of the Company, makes it not in the
best interest of the Company to allow continued availability of a Registration Statement or
Prospectus; provided that any and all of such information shall remain confidential
to each Holder until such information otherwise becomes public, unless disclosure by a
Holder is required by law, in which case the Holder shall provide the Company with the
opportunity to make such disclosure. If the Company notifies the Holders in accordance with
clauses (ii) through (vi) of this Section 4(h) to suspend the use of any Prospectus until
the requisite changes to such Prospectus have been made, then the Holders shall suspend use
of such Prospectus. The Company will use commercially reasonable efforts to ensure that the
use of the Prospectus may be resumed as promptly as is practicable;

     (i) furnish to each Holder, without charge, at least one conformed copy of each such
Registration Statement and each amendment thereto, including financial statements and
schedules, all documents incorporated or deemed to be incorporated therein by reference to
the extent requested by such Holder, and all exhibits to the extent requested by such Holder
(including those previously furnished or incorporated by reference) promptly after the
filing of such documents with the SEC;

     (j) promptly deliver to each Holder, without charge, as many copies of the Prospectus
or Prospectuses (including each form of prospectus) and each amendment or supplement thereto
as such Holder may reasonably request in connection with resales by the Holder of
Registrable Securities. Subject to the terms of this Agreement, the Company hereby consents
to the use of such Prospectus and each amendment or

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supplement thereto by each of the selling Holders in connection with the offering and
sale of the Registrable Securities covered by such Prospectus and any amendment or
supplement thereto, except after the giving of any notice pursuant to Section 4(h);

     (k) prior to any resale of Registrable Securities by a Holder, use commercially
reasonable efforts to register or qualify in connection with the registration or
qualification (or exemption from the Registration or qualification) of such Registrable
Securities for the resale by the Holder under the securities or Blue Sky laws of such
jurisdictions within the United States as any Holder reasonably requests in writing, and to
do any and all other acts or things reasonably necessary to enable the disposition in such
jurisdictions of the Registrable Securities covered by each Registration Statement;
provided, that the Company shall not be required to (i) qualify generally to do
business in any jurisdiction where it is not then so qualified, or (ii) subject the Company
to any material tax in any such jurisdiction where it is not then so subject or file a
general consent to service of process in any such jurisdiction;

     (l) in the event of any underwritten public offering, enter into and perform its
obligations under an underwriting agreement, in usual and customary form, with the
underwriter(s) of such offering;

     (m) use commercially reasonable efforts to cause all such Registrable Securities
covered by such Registration Statement to be listed on the Trading Market;

     (n) provide a transfer agent and registrar for all Registrable Securities registered
pursuant to this Agreement and provide a CUSIP number for all such Registrable Securities,
in each case not later than the effective date of such registration;

     (o) use commercially reasonable efforts to avoid the issuance of, or, if issued, obtain
the withdrawal of (i) any order suspending the effectiveness of a Registration Statement, or
(ii) any suspension of the qualification (or exemption from qualification) of any of the
Registrable Securities for sale in any jurisdiction, at the earliest practicable moment;

     (p) if requested by Holder 1, cooperate with the Holders to facilitate the timely
preparation and delivery of certificates representing Registrable Securities to be delivered
to a transferee pursuant to a Registration Statement, which certificates shall be free, to
the extent permitted by the Purchase Agreement, of all restrictive legends, and to enable
such Registrable Securities to be in such denominations and registered in such names as any
such Holders may request;

     (q) upon the occurrence of any event contemplated by Section 4(h)(v), as promptly as
reasonably possible under the circumstances taking into account the Company’s good faith
assessment of any adverse consequences to the Company and its shareholders of the premature
disclosure of such event, prepare a supplement or amendment, including a post-effective
amendment, to a Registration Statement or a supplement to the related Prospectus or any
document incorporated or deemed to be incorporated therein by reference, and file any other
required document so that, as

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thereafter delivered, neither a Registration Statement nor such Prospectus will contain
an untrue statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading; and

     (r) comply with all applicable rules and regulations of the SEC.

     5. Furnish Information. Each Holder agrees to furnish to the Company a completed
Questionnaire in substantially the form attached to this Agreement as Annex A, with any changes or
additions thereto as may be required to comply with applicable laws and regulations (a “Selling
Shareholder Questionnaire”), not less than two Trading Days prior to the date of filing a
Registration Statement or by the end of the fourth Trading Day following the date on which such
Holder receives a draft of such Registration Statement in accordance with Section 4(a).

     6. Registration Expenses. All fees and expenses incident to the performance of or
compliance with this Agreement by the Company (whether or not any Registrable Securities are sold
pursuant to a Registration Statement), and the reasonable fees and disbursements of one counsel for
the selling Holders, shall be borne by the Company. The fees and expenses referred to in the
foregoing sentence shall include, without limitation, (i) all registration and filing fees
(including, without limitation, fees and expenses (A) with respect to filings required to be made
with the Trading Market on which the Common Stock is then listed for trading and (B) in compliance
with applicable state securities or Blue Sky laws reasonably agreed to by the Company in writing
(including, without limitation, fees and disbursements of counsel for the Company in connection
with Blue Sky qualifications or exemptions of the Registrable Securities and determination of the
eligibility of the Registrable Securities for investment under the laws of such jurisdictions as
requested by the Holders), (ii) printing expenses (including, without limitation, expenses of
printing certificates for Registrable Securities and of printing prospectuses if the printing of
prospectuses is reasonably requested by the holders of a majority of the Registrable Securities, on
an as converted basis, included in a Registration Statement), (iii) messenger, telephone and
delivery expenses, (iv) fees and disbursements of counsel for the Company, (v) Securities Act
liability insurance, if the Company so desires such insurance, and (vi) fees and expenses of all
other Persons retained by the Company in connection with the consummation of the transactions
contemplated by this Agreement. In addition, the Company shall be responsible for all of its
internal expenses incurred in connection with the consummation of the transactions contemplated by
this Agreement (including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), the expense of any annual audit and the fees and
expenses incurred in connection with the listing of the Registrable Securities on any securities
exchange as required hereunder. In no event shall the Company be responsible for any underwriter
discounts or broker or similar commissions or, except to the extent provided for in the Transaction
Documents.

     7. Indemnification

     (a) Indemnification by the Company. The Company shall, notwithstanding any
termination of this Agreement, indemnify and hold harmless each Holder, the officers,
directors, agents, brokers (including brokers who offer and sell Registrable

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Securities as principal as a result of a pledge or any failure to perform under a
margin call of Common Stock), investment advisors and employees of each of them, each Person
(if any) who controls any such Holder (within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act) and the officers, directors, agents and employees of
each such controlling Person, to the fullest extent permitted by applicable law, from and
against any and all losses, claims, damages, liabilities, costs (including, without
limitation, reasonable attorneys’ fees) and expenses (collectively, “Losses”), as incurred,
arising out of or relating to any untrue or alleged untrue statement of a material fact
contained in a Registration Statement, any Prospectus or any form of prospectus or in any
amendment or supplement thereto or in any preliminary prospectus, or arising out of or
relating to any omission or alleged omission of a material fact required to be stated
therein or necessary to make the statements therein (in the case of any Prospectus or form
of prospectus or supplement thereto, in light of the circumstances under which they were
made) not misleading, except to the extent, but only to the extent, that (i) such untrue
statements or omissions are based solely upon information regarding such Holder furnished in
writing to the Company by such Holder expressly for use therein, or to the extent that such
information relates to such Holder or such Holder’s proposed method of distribution of
Registrable Securities and was reviewed and expressly approved in writing by such Holder
expressly for use in a Registration Statement, such Prospectus or such form of Prospectus or
in any amendment or supplement thereto (it being understood that the Holder has approved
Annex A hereto for this purpose) or (ii) in the case of an occurrence of an event of the
type specified in Section 4(h)(ii)-(vi), the use by such Holder of an outdated or defective
Prospectus after the Company has notified such Holder in writing that the Prospectus is
outdated or defective and prior to the receipt by such Holder of the Advice contemplated in
Section 10(d). The Company shall notify the Holders promptly of the institution, threat or
assertion of any Proceeding arising from or in connection with the transactions contemplated
by this Agreement of which the Company is aware.

     (b) Indemnification by Holders. Each Holder shall, severally and not jointly,
indemnify and hold harmless the Company, its directors, officers, agents and employees, each
Person (if any) who controls the Company (within the meaning of Section 15 of the Securities
Act and Section 20 of the Exchange Act), any other Holder selling securities pursuant to the
applicable Registration Statement, each Person (if any) who controls (within the meaning of
Section 15 of the Securities Act and Section 20 of the Exchange Act) such Holder, and the
directors, officers, agents or employees of such controlling Persons, to the fullest extent
permitted by applicable law, from and against all Losses, as incurred, to the extent arising
out of or based solely upon: (i) such Holder’s failure to comply with the prospectus
delivery requirements of the Securities Act or (ii) any untrue or alleged untrue statement
of a material fact contained in any Registration Statement, any Prospectus, or any form of
prospectus, or in any amendment or supplement thereto or in any preliminary prospectus, or
arising out of or relating to any omission or alleged omission of a material fact required
to be stated therein or necessary to make the statements therein not misleading (A) to the
extent, but only to the extent, that such untrue statement or omission is contained in any
information so furnished in writing by such Holder to the Company specifically for inclusion
in such Registration Statement or such Prospectus or (B) to the extent that (1) such untrue
statements or omissions are

11

 

based solely upon information regarding such Holder furnished in writing to the Company
by such Holder expressly for use therein, or to the extent that such information relates to
such Holder or such Holder’s proposed method of distribution of Registrable Securities and
was reviewed and expressly approved in writing by such Holder expressly for use in a
Registration Statement, such Prospectus or such form of Prospectus or in any amendment or
supplement thereto or (2) in the case of an occurrence of an event of the type specified in
Section 4(h)(ii)-(vi), the use by such Holder of an outdated or defective Prospectus after
the Company has notified such Holder in writing that the Prospectus is outdated or defective
and prior to the receipt by such Holder of the Advice contemplated in Section 10(d). In no
event shall the liability of any selling Holder hereunder be greater in amount than the
dollar amount of the net proceeds received by such Holder upon the sale of the Registrable
Securities giving rise to such indemnification obligation.

     (c) Conduct of Indemnification Proceedings.

     (i) If any Proceeding shall be brought or asserted against any Person entitled
to indemnity hereunder (an “Indemnified Party”), such Indemnified Party shall
promptly notify the Person from whom indemnity is sought (the “Indemnifying Party”)
in writing, and the Indemnifying Party shall have the right to assume the defense
thereof, including the employment of counsel reasonably satisfactory to the
Indemnified Party and the payment of all fees and expenses incurred in connection
with defense thereof; provided, that the failure of any Indemnified Party to
give such notice shall not relieve the Indemnifying Party of its obligations or
liabilities pursuant to this Agreement, except (and only) to the extent that it
shall be finally determined by a court of competent jurisdiction (which
determination is not subject to appeal or further review) that such failure shall
have prejudiced the Indemnifying Party.

     (ii) An Indemnified Party shall have the right to employ separate counsel in
any such Proceeding and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such Indemnified Party or
Parties unless: (1) the Indemnifying Party has agreed in writing to pay such fees
and expenses; (2) the Indemnifying Party shall have failed promptly to assume the
defense of such Proceeding and to employ counsel reasonably satisfactory to such
Indemnified Party in any such Proceeding; or (3) the named parties to any such
Proceeding (including any impleaded parties) include both such Indemnified Party and
the Indemnifying Party, and such Indemnified Party shall reasonably believe that a
material conflict of interest is likely to exist if the same counsel were to
represent such Indemnified Party and the Indemnifying Party (in which case, if such
Indemnified Party notifies the Indemnifying Party in writing that it elects to
employ separate counsel at the expense of the Indemnifying Party, the Indemnifying
Party shall not have the right to assume the defense thereof and the reasonable fees
and expenses of one separate counsel shall be at the expense of the Indemnifying
Party). The Indemnifying Party shall not be liable for any settlement of any such
Proceeding effected without its written consent, which consent shall not be
unreasonably withheld. No Indemnifying Party shall, without the prior written
consent of the Indemnified Party, effect any

12

 

settlement of any pending Proceeding in respect of which any Indemnified Party
is a party, unless such settlement includes an unconditional release of such
Indemnified Party from all liability on claims that are the subject matter of such
Proceeding.

     (iii) Subject to the terms of this Agreement, all reasonable fees and expenses
of the Indemnified Party (including reasonable fees and expenses to the extent
incurred in connection with investigating or preparing to defend such Proceeding in
a manner not inconsistent with this Section 7) shall be paid to the Indemnified
Party, as incurred, within ten Trading Days of written notice thereof to the
Indemnifying Party; provided, that the Indemnified Party shall promptly
reimburse the Indemnifying Party for that portion of such fees and expenses
applicable to such actions for which such Indemnified Party is not entitled to
indemnification hereunder, determined based upon the relative faults of the parties.

          (d) Contribution.

     (i) If the indemnification under Section 7(a) or 7(b) is unavailable to an
Indemnified Party or insufficient to hold an Indemnified Party harmless for any
Losses, then each Indemnifying Party in lieu of indemnifying such Indemnified Party
shall contribute to the amount paid or payable by such Indemnified Party as a result
of such Losses, in such proportion as is appropriate to reflect the relative fault
of the Indemnifying Party and Indemnified Party in connection with the actions,
statements or omissions that resulted in such Losses as well as any other relevant
equitable considerations. The relative fault of such Indemnifying Party and
Indemnified Party shall be determined by reference to, among other things, whether
any action in question, including any untrue or alleged untrue statement of a
material fact or omission or alleged omission of a material fact, has been taken or
made by, or relates to information supplied by, such Indemnifying Party or
Indemnified Party, and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such action, statement or
omission. The amount paid or payable by a party as a result of any Losses shall be
deemed to include, subject to the limitations set forth in this Agreement, any
reasonable attorneys’ or other reasonable fees or expenses incurred by such party in
connection with any Proceeding to the extent such party would have been indemnified
for such fees or expenses if the indemnification provided for in this Section 7 was
available to such party in accordance with its terms.

     (ii) The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 7(d) were determined by pro rata allocation or
by any other method of allocation that does not take into account the equitable
considerations referred to in the immediately preceding paragraph. Notwithstanding
the provisions of this Section 7(d), no Holder shall be required to contribute, in
the aggregate, any amount in excess of the amount by which the proceeds actually
received by such Holder from the sale of the Registrable Securities subject to the
Proceeding exceeds the amount of any damages that such

13

 

Holder has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission, except in the case of fraud by
such Holder.

     (iii) The indemnity and contribution agreements contained in this Section 7 are
in addition to any liability that the Indemnifying Parties may have to the
Indemnified Parties.

          (e) Notwithstanding the foregoing, to the extent that the provisions on indemnification and
contribution contained in the underwriting agreement entered into in connection with the
underwritten public offering are in conflict with the foregoing provisions, the provisions in the
underwriting agreement shall control.

          (f) Unless otherwise superseded by an underwriting agreement entered into in connection with
an underwritten public offering, the obligations of the Company and Holders under this Section 7
shall survive the completion of any offering of Registrable Securities in a registration under
Section 2, and otherwise shall survive the termination of this Agreement.

     8. Reports Under Exchange Act. With a view to making available to the Holders the
benefits of Rule 144 and any other rule or regulation of the SEC that may at any time permit a
Holder to sell securities of the Company to the public without registration or pursuant to a
registration on Form S-3, the Company shall:

          (a) make and keep available adequate current public information, as those terms are understood
and defined in Rule 144;

          (b) use commercially reasonable efforts to file with the SEC in a timely manner all reports
and other documents required of the Company under the Securities Act and the Exchange Act (at any
time the Company is subject to such reporting requirements); and

          (c) furnish to any Holder, so long as the Holder owns any Registrable Securities, forthwith
upon request (i) to the extent accurate, a written statement by the Company that it has complied
with the reporting requirements of Rule 144, the Securities Act, and the Exchange Act (at any time
the Company is subject to such reporting requirements), or that it qualifies as a registrant whose
securities may be resold pursuant to Form S-3 (at any time the Company is so qualified to use such
form); (ii) a copy of the most recent annual or quarterly report of the Company and such other
reports and documents so filed by the Company; and (iii) such other information as may be
reasonably requested in availing any Holder of any rule or regulation of the SEC that permits the
selling of any such securities without registration (at any time the Company is subject to the
reporting requirements under the Exchange Act) or pursuant to Form S-3 (at any time the Company is
so qualified to use such form).

     9. Limitations on Subsequent Registration Rights. From and after the date of this
Agreement, the Company shall not, without the prior written consent of Holder 1, enter into any
agreement with any holder or prospective holder of any securities of the Company that (i) would
allow such holder or prospective holder (i) to include such securities in any registration unless,
under the terms of such agreement, such holder or prospective holder may include such securities in
any such registration only to the extent that the inclusion of such securities will not reduce the

14

 

number of the Registrable Securities of the Holders that are included or (ii) allow such
holder or prospective holder to initiate a demand for registration of any securities held by such
holder or prospective holder.

     10. Miscellaneous

     (a) Remedies. In the event of a breach by the Company or by a Holder, of any
of their obligations under this Agreement, each Holder or the Company, as the case may be,
in addition to being entitled to exercise all rights granted by law and under this
Agreement, including recovery of damages, will be entitled to specific performance of its
rights under this Agreement. The Company and each Holder agree that monetary damages would
not provide adequate compensation for any losses incurred by reason of a breach by it of any
of the provisions of this Agreement and hereby further agrees that, in the event of any
action for specific performance in respect of such breach, it shall waive the defense that a
remedy at law would be adequate.

     (b) No Piggyback on Registrations. Except as set forth on Schedule
10(b) attached hereto, neither the Company nor any of its security holders (other than
the Holders in such capacity pursuant hereto) may include securities of the Company in a
Registration Statement other than the Registrable Securities.

     (c) Compliance. Each Holder covenants and agrees that it will comply with the
prospectus delivery requirements of the Securities Act as applicable to it in connection
with sales of Registrable Securities pursuant to a Registration Statement.

     (d) Discontinued Disposition. Each Holder agrees by its acquisition of such
Registrable Securities that, upon receipt of a notice from the Company of the occurrence of
any event of the kind described in Section 4(h), such Holder will forthwith discontinue
disposition of such Registrable Securities under a Registration Statement until such
Holder’s receipt of the copies of the supplemented Prospectus and/or amended Registration
Statement or until it is advised in writing (the “Advice”) by the Company that the use of
the applicable Prospectus may be resumed, and, in either case, has received copies of any
additional or supplemental filings that are incorporated or deemed to be incorporated by
reference in such Prospectus or Registration Statement. The Company will use commercially
reasonable efforts to ensure that the use of the Prospectus may be resumed as promptly as is
practicable under the circumstances.

     (e) Amendments and Waivers. The provisions of this Agreement, including the
provisions of this sentence, may not be amended, modified or supplemented, and waivers or
consents to departures from the provisions hereof may not be given, unless the same shall be
in writing and signed by the Company and Holder 1. Notwithstanding the foregoing, a waiver
or consent to depart from the provisions hereof with respect to a matter that relates to the
rights of one or more Holders exclusively and that does not directly or indirectly affect
the rights of the other Holders may be given by Holders of all of the Registrable Securities
to which such waiver or consent relates; provided, however, that the
provisions of this sentence may not be amended, modified, or supplemented except in
accordance with the provisions of the immediately preceding sentence.

15

 

     (f) Notices. Any and all notices or other communications or deliveries required
or permitted to be provided hereunder shall be delivered as set forth in the Purchase
Agreement.

     (g) Successors and Assigns. This Agreement shall inure to the benefit of and be
binding upon the successors and permitted assigns of each of the parties and shall inure to
the benefit of each Holder. The Company may not assign its rights or obligations hereunder
without the prior written consent of Holder 1. Each Holder may assign their respective
rights hereunder in the manner and to the Persons as permitted under the Purchase Agreement.

     (h) No Inconsistent Agreements. Neither the Company nor any of its Subsidiaries
has entered, as of the date hereof, nor shall the Company or any of its Subsidiaries, on or
after the date of this Agreement, enter into any agreement with respect to its securities,
that would have the effect of impairing the rights granted to the Holders in this Agreement
or otherwise conflicts with the provisions hereof. Except as set forth on Schedule
10(b), neither the Company nor any of its Subsidiaries has previously entered into any
agreement granting any registration rights with respect to any of its securities to any
Person that have not been satisfied in full.

     (i) Execution and Counterparts. This Agreement may be executed in any number
of counterparts, each of which when so executed shall be deemed to be an original and, all
of which taken together shall constitute one and the same Agreement. In the event that any
signature is delivered by facsimile transmission, such signature shall create a valid
binding obligation of the party executing (or on whose behalf such signature is executed)
the same with the same force and effect as if such facsimile signature were the original
thereof.

     (j) Governing Law. All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be determined with the provisions of
the Purchase Agreement.

     (k) Cumulative Remedies. The remedies provided herein are cumulative and not
exclusive of any remedies provided by law.

     (l) Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or
unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth
herein shall remain in full force and effect and shall in no way be affected, impaired or
invalidated, and the parties hereto shall use commercially reasonable efforts to find and
employ an alternative means to achieve the same or substantially the same result as that
contemplated by such term, provision, covenant or restriction. It is hereby stipulated and
declared to be the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.

16

 

     (m) Headings. The headings in this Agreement are for convenience of reference
only and shall not limit or otherwise affect the meaning hereof.

     (n) Independent Nature of Holders’ Obligations and Rights. The obligations of
each Holder hereunder are several and not joint with the obligations of any other Holder
hereunder, and no Holder shall be responsible in any way for the performance of the
obligations of any other Holder hereunder. Nothing contained herein or in any other
agreement or document delivered at any closing, and no action taken by any Holder pursuant
hereto or thereto, shall be deemed to constitute the Holders as a partnership, an
association, a joint venture or any other kind of entity, or create a presumption that the
Holders are in any way acting in concert with respect to such obligations or the
transactions contemplated by this Agreement. Each Holder shall be entitled to protect and
enforce its rights, including without limitation the rights arising out of this Agreement,
and it shall not be necessary for any other Holder to be joined as an additional party in
any proceeding for such purpose.

*************************

(Signature Pages Follow)

17

 

          IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of
the date first written above.

	 	 	 	 	 
	THE COMPANY:

WILSONS THE LEATHER EXPERTS INC.

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

 

 

[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]

	 	 	 	 	 
	PURCHASER:

MARATHON FUND LIMITED PARTNERSHIP V

 	 	 
	By:  	Miltiades, LLP
 	 	 
	Its: General Partner 	 	 
	 	 	 
	By:  	Marathon Ultimate GP, LLC
 	 	 
	Its: General Partner 	 	 
	 
	By:  	/s/ Van Zandt Hawn
 	 	 
	 	Name:  	Van Zandt Hawn 	 	 
	 	Title:  	Manager 	 	 

19

 

[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]

	 	 	 	 	 
	PURCHASER:

PENINSULA INVESTMENT PARTNERS, L.P.

 	 	 
	By:  	Peninsula Capital Appreciation, LLC
 	 	 
	Its: General Partner 	 	 
	 
	By:  	/s/ R. Ted Weschler
 	 	 
	 	Name:  	R. Ted Weschler 	 	 
	 	Title:  	Managing Partner 	 	 

20

 

[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]

	 	 	 	 	 
	PURCHASER:

QUAKER CAPITAL PARTNERS I, L.P.

 	 	 
	By:  	Quaker Premier, L.P.
 	 	 
	Its: General Partner 	 	 
	 
	By:  	Quaker Capital Management Corporation
 	 	 
	Its: General Partner 	 	 
	 
	By:  	/s/ Mark G. Schoeppner
 	 	 
	 	Name:  	Mark G. Schoeppner 	 	 
	 	Title:  	President 	 	 

21

 

[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]

	 	 	 	 	 
	PURCHASER:

QUAKER CAPITAL PARTNERS II, L.P.

 	 	 
	By:  	Quaker Premier II, L.P.
 	 	 
	Its: General Partner 	 	 
	 
	By:  	Quaker Capital Management Corporation
 	 	 
	Its: General Partner 	 	 
	 
	By:  	/s/ Mark G. Schoeppner
 	 	 
	 	Name:  	Mark G. Schoeppner 	 	 
	 	Title:  	President 	 	 

22

 

Schedule 1

Purchasers

	 	 	 	 	 	 	 	 	 	 	 	 	 
	Purchaser	 	Shares	 	Warrant Shares	 	Subscription Amount
	 
	Marathon Fund Limited
Partnership V
	 	 	35,000	 	 	 	11,666,667	 	 	$	35,000,000	 
	Peninsula Investment
Partners, L.P.
	 	 	5,000	 	 	 	1,666,667	 	 	$	5,000,000	 
	Quaker Capital
Partners I, L.P.
	 	 	3,150	 	 	 	1,050,000	 	 	$	3,150,000	 
	Quaker Capital
Partners II, L.P.
	 	 	1,850	 	 	 	616,666	 	 	$	1,850,000	 

 

 

Annex A

Wilsons The Leather Experts Inc.

Selling Securityholder Notice and Questionnaire

     The undersigned beneficial owner of [___] , par value $[___] per share (the
“Common Stock”), of [___] , a [___] corporation (the “Company”),
(the “Registrable Securities”) understands that the Company has filed or intends to file with the
Securities and Exchange Commission (the “SEC”) a registration statement (the “Registration
Statement”) for the registration and resale under the Securities Act of 1933, as amended (the
“Securities Act”), of the Registrable Securities, in accordance with the terms of the Registration
Rights Agreement, dated as of ___, 2007 (the “Registration Rights Agreement”), among the
Company and the Purchasers named therein. A copy of the Registration Rights Agreement is available
from the Company upon request at the address set forth below. All capitalized terms not otherwise
defined herein shall have the meanings ascribed thereto in the Registration Rights Agreement.

     Certain legal consequences arise from being named as a selling securityholder in the
Registration Statement and the related prospectus. Accordingly, holders and beneficial owners of
Registrable Securities are advised to consult their own securities law counsel regarding the
consequences of being named or not being named as a selling securityholder in the Registration
Statement and the related prospectus.

NOTICE

     The undersigned beneficial owner (the “Selling Securityholder”) of Registrable Securities
hereby elects to include the Registrable Securities owned by it and listed below in Item 3 (unless
otherwise specified under such Item 3) in the Registration Statement.

 

 

The undersigned hereby provides the following information to the Company and represents and
warrants that such information is accurate:

QUESTIONNAIRE

	1.	 	Name.

	 	(a)	 	Full legal name of Selling Securityholder
	 
	 	 	 	 

	 
	 	(b)	 	Full legal name of registered holder (if not the same as (a) above) through
which Registrable Securities listed in Item 3 below are held:
	 
	 	 	 	 

	 
	 	(c)	 	Full legal name of Natural Control Person (which means a natural person who
directly or indirectly alone or with others has power to vote or dispose of the
securities covered by the questionnaire):
	 
	 	 	 	 

	2.	 	Address for Notices to Selling Securityholder:

 

 

 

Telephone:

 

Fax:

 

Contact Person:

 

	3.	 	Beneficial Ownership of Registrable Securities:

	 	(a)	 	Type and number of Registrable Securities beneficially owned (describe nature
of ownership and whether voting or investment power over such Registrable Securities is
shared):
	 
	 	 	 	 

	 
	 	 	 	 

	 
	 	 	 	 

2

 

	4.	 	Broker-Dealer Status:

	 	(a)	 	Are you a broker-dealer?

Yes          No

	 	(b)	 	If “yes” to Section 4(a), did you receive your Registrable Securities as
compensation for investment banking services to the Company.

Yes          No

	 	Note:	 	If no, the SEC’s staff has indicated that you should be identified
as an underwriter in the Registration Statement.

	 	(c)	 	Are you an affiliate of a broker-dealer?

Yes          No

	 	(d)	 	If you are an affiliate of a broker-dealer, do you certify that you bought the
Registrable Securities in the ordinary course of business, and at the time of the
purchase of the Registrable Securities to be resold, you had no agreements or
understandings, directly or indirectly, with any person to distribute the Registrable
Securities?

Yes          No

	 	 	Note: If no, the SEC’s staff has indicated that you should be identified
as an underwriter in the Registration Statement.

	5.	 	Beneficial Ownership of Other Securities of the Company Owned by the Selling Securityholder.

Except as set forth below in this Item 5, the undersigned is not the beneficial or
registered owner of any securities of the Company other than the Registrable Securities
listed above in Item 3.

	 	(a)	 	Type and amount of other securities beneficially owned by the Selling
Securityholder:
	 
	 	 	 	 

	 
	 	 	 	 

3

 

	6.	 	Relationships with the Company:

Except as set forth below, neither the undersigned nor any of its affiliates, officers,
directors or principal equity holders (owners of 5% of more of the equity securities of the
undersigned) has held any position or office or has had any other material relationship with
the Company (or its predecessors or affiliates) during the past three years.

State any exceptions here:

 

 

     The undersigned agrees to promptly notify the Company of any inaccuracies or changes in the
information provided herein that may occur subsequent to the date hereof at any time while the
Registration Statement remains effective.

     By signing below, the undersigned consents to the disclosure of the information contained
herein in its answers to Items 1 through 6 and the inclusion of such information in the
Registration Statement and the related prospectus and any amendments or supplements thereto. The
undersigned understands that such information will be relied upon by the Company in connection with
the preparation or amendment of the Registration Statement and the related prospectus.

     IN WITNESS WHEREOF the undersigned, by authority duly given, has caused this Notice and
Questionnaire to be executed and delivered either in person or by its duly authorized agent.

	 	 	 	 	 	 	 	 	 	 	 
	Dated:

	 	 	 	 	 	Beneficial Owner:	 	 	 	 
	 

	 	 

	 	 
	 	 	 	 

	 	 	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

PLEASE FAX A COPY OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE, AND RETURN THE ORIGINAL
BY OVERNIGHT MAIL, TO:

4

 

Schedule 10(b)

Registration Rights

	1.	 	Registration Rights Agreement, dated May 25, 1996, by and among Melville Corporation,
Wilsons The Leather Experts Inc., The Managers listed on the Signature pages thereto, Leather
Investors Limited Partnership I, and The Partners listed on the Signature Pages thereto, as
amended by that certain Amendment to Registration Rights Agreement dated as of August 12, 1999
by and among the Company and the shareholders listed on the attachments thereto (collectively,
the “1996 Agreement”). This 1996 Agreement currently provides only for piggyback registration
rights, and applies only to one eligible holder (who is currently a member of the Company’s
Board of Directors.

	2.	 	Registration Rights Agreement, dated April 25, 2004, by and among Wilsons The Leather Experts
Inc. and the Purchasers named therein (the “2004 Agreement”). This 2004 Agreement will be
amended prior to Closing to provide for the shareholder parties thereto to consent to the
piggyback registration rights provided for in this Agreement and to agree to be subject to the
underwriter cutback provisions set forth in this Agreement related to any exercise of
piggyback registration rights.exv4w2

 

Exhibit 4.2

FORM OF WARRANT

To Subscribe for and Purchase Common Stock of

Wilsons The Leather Experts Inc.

     This Warrant (this “Warrant”) certifies, for value received,                     , a
                     (herein called “Purchaser”), or its registered assigns is entitled to subscribe for
and purchase from Wilsons The Leather Experts Inc. (herein called the “Company”), a corporation
organized and existing under the laws of the State of Minnesota, at the price specified below
(subject to adjustment as noted below) at any time from and after June 15, 2007 to and including
June 15, 2012, the number of fully paid and nonassessable shares of the Company’s common stock,
$0.01 par value per share (“Common Stock”), as set forth in Section 1 below. This Warrant is
issued pursuant to the terms of that certain Securities Purchase Agreement, dated as of June 1,
2007, by and among the Company, the Purchaser, and the other purchasers set forth therein (the
"Securities Purchase Agreement”).

The Exercise Price shall be $2.00 per share of Common Stock (subject to adjustment as noted below).

This Warrant is subject to the following provisions, terms and conditions:

 

 

1. Right to Purchase.

     (a) The Purchaser is entitled to purchase                      shares of Common Stock, subject to
adjustment as provided in this paragraph 1(a). When any adjustment is required to be made to the
Exercise Price pursuant to Section 5 below, the number of shares of Common Stock purchasable upon
the exercise of this Warrant shall be changed to the number determined by dividing (i) an amount
equal to the number of shares of Common Stock issuable upon the exercise of this Warrant
immediately prior to such adjustment, multiplied by the Exercise Price in effect immediately prior
to such adjustment, by (ii) the Exercise Price in effect immediately after such adjustment.

     (b) Notwithstanding paragraph 1(a) above, the Company shall not be obligated to issue any
shares of Common Stock upon exercise of this Warrant if the issuance of such shares of Common Stock
would exceed the number of shares of Common Stock that the Company may issue to the Purchaser
without breaching the Company’s obligations under the rules and regulations of the Nasdaq Global
Select Market (as defined in the Securities Purchase Agreement) (the “Exchange Cap”), except the
limitation shall not apply in the event that the Company (a) obtains the approval of its
shareholders as required by the applicable rules of the Nasdaq Global Select Market for issuances
in excess of the Exchange Cap or (b) obtains a written opinion from outside counsel to the Company
that such approval is not required, which opinion shall be reasonably satisfactory to the
Purchaser.

2. The rights represented by this Warrant may be exercised by the holder hereof, in whole or in
part, by written notice of exercise, in the form attached hereto, delivered to the Company by the
surrender of this Warrant (properly endorsed if required) at the principal office of the Company
and upon payment to it by check of the Exercise Price in lawful money of the United States. The
Company agrees that the shares of Common Stock so purchased shall be and are deemed to be issued to
the holder hereof as the record owner of such shares of Common Stock as of the close of business on
the date on which this Warrant shall have been surrendered and payment made for such shares of
Common Stock as aforesaid. Subject to the provisions of the next succeeding paragraph,
certificates for the shares of Common Stock so purchased shall be delivered to the holder hereof
within a reasonable time, not exceeding l0 days, after the rights represented by this Warrant shall
have been so exercised, and, unless this Warrant has expired, a new Warrant representing the number
of shares of Common Stock, if any, with respect to which this Warrant shall not then have been
exercised shall also be delivered to the holder hereof within such time.

3. Notwithstanding the foregoing, however, the Company shall not be required to deliver any
certificate for shares of Common Stock upon exercise of this Warrant except in accordance with the
provisions, and subject to the limitations, of paragraphs 8 and 9 hereof.

4. The Company covenants and agrees that all shares of Common Stock which may be issued upon the
exercise of the rights represented by this Warrant will, upon issuance as set forth above, be duly
authorized and issued, fully paid and nonassessable and free of preemptive rights. The Company
further covenants and agrees that during the period within which the rights

-2-

 

represented by this Warrant may be exercised, the Company will at all times have authorized, and
reserved for the purpose of issue or transfer upon exercise of the subscription rights evidenced by
this Warrant, a sufficient number of shares of Common Stock to provide for the exercise of the
rights represented by this Warrant.

5. The above provisions are, however, subject to this paragraph 5. Notwithstanding anything in
this paragraph 5 to the contrary, no change in the Exercise Price shall be made until the
cumulative effect of the adjustments called for by this paragraph 5 since the date of the last
change in the Exercise Price would change the Exercise Price by more than 1%. However, once the
cumulative effect would result in such a change, then the Exercise Price shall be changed to
reflect all adjustments called for by this paragraph 5 and not previously made. Subject to the
foregoing, the Exercise Price shall be adjusted from time to time as set forth in this paragraph 5.

     If the occurrence of an event would cause the Exercise Price to be adjusted by more than one
subsection of this Section 5, then the Exercise Price shall be adjusted once pursuant to the
subsection that would provide the greatest dollar amount decrease in the Exercise Price.

     (a) Adjustments to Exercise Price for Consolidation, Merger, etc. In case of any
consolidation or merger of the Company with any other entity (other than a wholly owned subsidiary
of the Company), or in case of any sale or transfer of all or substantially all of the assets of
the Company, or in case of any share exchange pursuant to which all of the outstanding shares of
Common Stock are converted into other securities or property, the Company shall, prior to or at the
time of such transaction, make appropriate provision or cause appropriate provision to be made so
that the Purchaser shall have the right thereafter to exercise this Warrant into the kind and
amount of shares of stock and other securities and property receivable upon such consolidation,
merger, sale, transfer or share exchange by a holder of the number of shares of Common Stock into
which such this Warrant could have been exercised immediately prior to the effective date of such
consolidation, merger, sale, transfer or share exchange. If in connection with any such
consolidation, merger, sale, transfer or share exchange, each holder of shares of Common Stock is
entitled to elect to receive either securities, cash or other assets upon completion of such
transaction, the Company shall provide or cause to be provided to the Purchaser the right to elect
the securities, cash or other assets for which this Warrant shall be exercisable after completion
of any such transaction on the same terms and subject to the same conditions applicable to holders
of the Common Stock (including, without limitation, notice of the right to elect, limitations on
the period in which such election shall be made and the effect of failing to exercise the
election).

     (b) Adjustments to Exercise Price for Stock Splits, Reclassifications, and Certain
Distributions. In case the Company shall:

-3-

 

          (i) pay a dividend or make a distribution on its Common Stock in shares of its capital stock;

          (ii) subdivide its outstanding Common Stock into a greater number of shares;

          (iii) combine the shares of its outstanding Common Stock into a smaller number of shares; or

          (iv) issue by reclassification of its Common Stock any shares of its capital stock,

          then in each such case the Exercise Price in effect immediately prior thereto shall be
proportionately adjusted so that the Purchaser, upon any exercise of this Warrant, shall be
entitled to receive, to the extent permitted by applicable law, the number and kind of shares of
capital stock of the Company which the Purchaser would have owned or have been entitled to receive
after the happening of such event had this Warrant, or any portion hereof, been exercised
immediately prior to the record date for such event (or if no record date is established in
connection with such event, the effective date for such action).

          An adjustment pursuant to this subparagraph (b) shall become effective immediately after the
record date in the case of a stock dividend or distribution and shall become effective immediately
after the effective date in the case of a subdivision, combination or reclassification.

     (c) Adjustments to Exercise Price for Diluting Issues.

          (i) Certain Definitions. For purposes of this paragraph 5, the following terms shall
have the following meanings:

               (A) “Additional Shares of Common Stock” shall mean all shares of Common Stock issued by the
Company or deemed to be issued pursuant to paragraph 5(c)(ii) below (including shares of Common
Stock subsequently reacquired or retired by the Company) after the date hereof.

               (B) “Business Day” shall mean any day except Saturday, Sunday or federal legal holiday, and
any other day on which the Trading Market (as defined below) is closed.

               (C) “Convertible Security” shall mean any evidence of indebtedness, share or other security
directly or indirectly convertible or exchangeable into or for Common Stock, excluding Options.

               (D) “Option” shall mean any option, warrant, right or security to purchase or otherwise
acquire Common Stock or Convertible Securities.

-4-

 

               (E) “Trading Market” means whichever of the New York Stock Exchange, the American Stock
Exchange, the NASDAQ Global Select Market, the NASDAQ Global Market, the NASDAQ Capital Market or
the OTC Bulletin Board on which the Common Stock is listed or quoted for trading on the date in
question.

          (ii) Additional Shares of Common Stock Deemed to be Issued.

               (A) If after the date hereof, the Company shall issue or sell any Options or Convertible
Securities, or shall fix a record date for the determination of holders of any class of securities
entitled to receive any such Options or Convertible Securities, then the maximum number of shares
of Common Stock (as set forth in the instrument relating thereto, assuming the satisfaction of any
conditions to exercisability, convertibility or exchangeability but without regard to any provision
contained therein for a subsequent adjustment of such number) issuable upon the exercise of such
Options or, in the case of Convertible Securities and Options therefor, the conversion or exchange
of such Convertible Securities, shall be deemed to be Additional Shares of Common Stock issued as
of the time of such issue or, in case such a record date shall have been fixed, as of the close of
business on such record date.

               (B) If the terms of any Option or Convertible Security, the issuance of which resulted in an
adjustment to the Exercise Price pursuant to the terms of this subparagraph 5(c), are revised as a
result of an amendment to such terms or any other adjustment pursuant to the provisions of such
Option or Convertible Security (but excluding automatic adjustments to such terms pursuant to
anti-dilution or similar provisions of such Option or Convertible Security) to provide for either
(1) any increase or decrease in the number of shares of Common Stock issuable upon the exercise,
conversion and/or exchange of any such Option or Convertible Security or (2) any increase or
decrease in the consideration payable to the Company upon such exercise, conversion and/or
exchange, then, effective upon such increase or decrease becoming effective, the Exercise Price
computed upon the original issue of such Option or Convertible Security (or upon the occurrence of
a record date with respect thereto) shall be readjusted to such Exercise Price as would have
obtained had such revised terms been in effect upon the original date of issuance of such Option or
Convertible Security. Notwithstanding the foregoing, no readjustment pursuant to this subparagraph
(B) shall have the effect of increasing the Exercise Price to an amount which exceeds the lower of
(X) the Exercise Price in effect immediately prior to the original adjustment made as a result of
the issuance of such Option or Convertible Security, or (Y) the Exercise Price that would have
resulted from any issuances of Additional Shares of Common Stock (other than deemed issuances of
Additional Shares of Common Stock as a result of the issuance of such Option or Convertible
Security) between the original adjustment date and such readjustment date.

               (C) If the terms of any Option or Convertible Security, the issuance of which did not result
in an adjustment to the Exercise Price pursuant to the terms of this subparagraph 5(c) (either
because the consideration per share (determined pursuant to subparagraph 5(c)(iii)) of the
Additional Shares of Common Stock subject thereto was equal to or greater than the Exercise Price
then in effect and the then Current Market Price, or because such Option or Convertible Security
was issued before the date hereof), are revised after the date hereof as a result of an amendment to such terms or any other adjustment pursuant to the

-5-

 

provisions of such Option or Convertible Security (but excluding automatic adjustments to such
terms pursuant to anti-dilution or similar provisions of such Option or Convertible Security) to
provide for either (1) any increase or decrease in the number of shares of Common Stock issuable
upon the exercise, conversion or exchange of any such Option or Convertible Security or (2) any
increase or decrease in the consideration payable to the Company upon such exercise, conversion or
exchange, then such Option or Convertible Security, as so amended or adjusted, and the Additional
Shares of Common Stock subject thereto (determined in the manner provided in subparagraph 5(c)(ii))
shall be deemed to have been issued effective upon such increase or decrease becoming effective.

               (D) Upon the expiration or termination of any unexercised Option or unconverted or unexchanged
Convertible Security (or portion thereof) which resulted (either upon its original issuance or upon
a revision of its terms) in an adjustment to the Exercise Price pursuant to the terms of
subparagraphs 5(c)(iv) or (v), the Exercise Price shall be readjusted to such Exercise Price as
would have obtained had such Option or Convertible Security (or portion thereof) never been issued.

               (E) If the number of shares of Common Stock issuable upon the exercise, conversion and/or
exchange of any Option or Convertible Security, or the consideration payable to the Company upon
such exercise, conversion and/or exchange, is calculable at the time such Option or Convertible
Security is issued or amended but is subject to adjustment based upon subsequent events, any
adjustment to the Exercise Price provided for in this subparagraph 5(c)(ii) shall be effected at
the time of such issuance or amendment based on such number of shares or amount of consideration
without regard to any provisions for subsequent adjustments (and any subsequent adjustments shall
be treated as provided in clauses (B) and (C) of this subparagraph 5(c)(ii)). If the number of
shares of Common Stock issuable upon the exercise, conversion and/or exchange of any Option or
Convertible Security, or the consideration payable to the Company upon such exercise, conversion
and/or exchange, cannot be calculated at all at the time such Option or Convertible Security is
issued or amended, any adjustment to the Exercise Price that would result under the terms of this
subparagraph 5(c)(ii) at the time of such issuance or amendment shall instead be effected at the
time such number of shares and/or amount of consideration is first calculable (even if subject to
subsequent adjustments), assuming for purposes of calculating such adjustment to the Exercise Price
that such issuance or amendment took place at the time such calculation can first be made.

          (iii) Determination of Consideration. For purposes of this paragraph 5, the
consideration received by the Company for the issue of any Additional Shares of Common Stock shall
be computed as follows:

               (A) Cash and Property: Such consideration shall:

                    (1) insofar as it consists of cash, be computed at the aggregate amount of cash received by
the Company, excluding amounts paid or payable for accrued interest;

-6-

 

                    (2) insofar as it consists of property other than cash, be computed at the fair market value
thereof at the time of such issue, as determined in good faith by the Board of Directors of the
Company; and

                    (3) in the event Additional Shares of Common Stock are issued together with other shares or
securities or other assets of the Company for consideration which covers both, be the proportion of
such consideration so received for the Additional Shares of Common Stock, computed as provided in
clauses (1) and (2) above, as determined in good faith by the Board of Directors of the Company.

               (B) Options and Convertible Securities. The consideration per share received by the
Company for Additional Shares of Common Stock deemed to have been issued pursuant to subparagraph
5(c)(ii), relating to Options and Convertible Securities, shall be determined by dividing:

                    (1) the minimum aggregate amount of additional consideration (as set forth in the instruments
relating thereto, without regard to any provision contained therein for a subsequent adjustment of
such consideration) payable to the Company upon the exercise of such Options or the conversion or
exchange of such Convertible Securities, or in the case of Options for Convertible Securities, the
exercise of such Options for Convertible Securities and the conversion or exchange of such
Convertible Securities, by

                    (2) the maximum number of shares of Common Stock (as set forth in the instruments relating
thereto, without regard to any provision contained therein for a subsequent adjustment of such
number) issuable upon the exercise of such Options or the conversion or exchange of such
Convertible Securities, or in the case of Options for Convertible Securities, the exercise of such
Options for Convertible Securities and the conversion or exchange of such Convertible Securities.

          (iv) Issues Below Current Market Price.

               (A) In case the Company shall issue or sell or, or is deemed to have issued or sold pursuant
to subparagraph 5(c)(ii) above, Additional Shares of Common Stock for consideration per share less
than the average of the daily last sales price of the Common Stock on the Trading Market as
reported by Bloomberg Financial Markets, or a comparable reporting service (the “Closing Price”)
for the 10 consecutive Business Days ending on the Business Day immediately preceding the date of
such issuance (the “Current Market Price”), then in each such case the Exercise Price in effect on
such record date shall be adjusted in accordance with the formula:

	 	 	 	 	 	 	 
	 

	 	E1
   =   E   x   
	O +  	N x P
	 	 
	 

	 	 	 	 	 
	 

	 	 	M	 	 
	 

	 	 	 	 	 
	 

	 	 	O + N	 	 

          where

-7-

 

	 	 	 	 	 	 	 
	 

	 	E1
	 	=
	 	the adjusted Exercise Price.
	 

	 	E
	 	=
	 	the current Exercise Price.
	 

	 	O
	 	=
	 	the number of shares of Common Stock outstanding on
the Business Day immediately preceding the date of
such issuance (for which purpose the shares of
Common Stock outstanding shall be the sum of (1)
the number of shares of Common Stock then
outstanding, and (2) the number of shares of Common
Stock into which any other outstanding securities
of the Company are then issuable upon conversion,
exercise or exchange of such securities other than
the “Warrants” (as defined in the Securities
Purchase Agreement)).
	 

	 	N
	 	=
	 	the number of Additional Shares of Common Stock
issued, or deemed to have been issued.
	 

	 	P
	 	=
	 	the consideration per share of the Additional
Shares of Common Stock issued or deemed to have
been issued.
	 

	 	M
	 	=
	 	the Current Market Price per share of Common Stock
on the date of such issuance.

               (B) Such adjustment shall become effective immediately after the date of issuance, or deemed
issuance, of such Common Stock.

          (v) Issues Below Exercise Price.

               (A) In case the Company shall issue or sell or, or is deemed to have issued or sold pursuant
to subparagraph 5(c)(ii) above, Additional Shares of Common Stock for consideration per share less
than the Exercise Price in effect immediately prior to the date of such issue, then in each such
case the Exercise Price in effect on such issuance date shall be adjusted in accordance with the
formula:

	 	 	 	 	 	 	 
	 

	 	E1
   =   E   x   
	O +  	N x P
	 	 
	 

	 	 	 	 	 
	 

	 	 	E	 	 
	 

	 	 	 	 	 
	 

	 	 	O + N	 	 

          where

	 	 	 	 	 	 	 
	 

	 	E1
	 	=
	 	the adjusted Exercise Price.
	 

	 	E
	 	=
	 	the current Exercise Price.
	 

	 	O
	 	=
	 	the number of shares of Common Stock outstanding on
the Business Day immediately preceding the date of
such issuance (for which purpose the shares of
Common Stock outstanding shall be the sum of (1)
the number of shares of Common Stock then
outstanding, and (2) the number of shares of Common
Stock into which any other outstanding securities
of the Company are then issuable upon conversion,
exercise or exchange of such securities other than
the “Warrants” (as defined in the Securities
Purchase Agreement)).
	 

	 	N
	 	=
	 	the number of Additional Shares of Common issued,
or deemed to have

-8-

 

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	been issued.
	 

	 	P
	 	=
	 	the consideration per share of the Additional
Shares of Common Stock issued, or deemed to have
been issued.

               (B) Such adjustment shall become effective immediately after the date of issuance, or deemed
issuance, of such Common Stock.

     (d) Adjustments to Exercise Price for Certain Distributions.

     (i) In case the Company shall, by dividend or otherwise, distribute to all holders of
its Common Stock evidences of its Indebtedness (as defined in the Securities Purchase
Agreement) or assets (including securities, but excluding (A) any Options or Convertible
Securities, and (B) any dividend or distribution paid in cash out of the retained earnings
of the Company and any dividend or distribution referred to in subparagraph 5(b) above),
then in each such case the Exercise Price then in effect shall be adjusted as of the
ex-dividend date for such dividend or distribution in accordance with the formula:

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	E1 
	 	=
	 	E
	 	x
	 	M - F
 

M
	 	 

          where

	 	 	 	 	 	 	 
	 

	 	E1
	 	=
	 	the adjusted Exercise Price.
	 

	 	E
	 	=
	 	the current Exercise Price.
	 

	 	M
	 	=
	 	the Current Market Price per share of Common Stock
on the ex-dividend date for such distribution.
	 

	 	F
	 	=
	 	the amount of such cash dividend and/or the fair
market value on such ex-dividend date of the
assets, securities, rights or warrants to be
distributed divided by the number of shares of
Common Stock outstanding on such ex-dividend date.
The Board of Directors of the Company shall
determine in good faith such fair market value.

	 	 	 	 	 
	Notwithstanding the foregoing, in no event 

shall

	 	M -
 F
	 	be deemed to be less than zero.
	 

	 	 	 	 
	 

	 	M	 	 

     (ii) Such adjustment shall become effective immediately after the ex-dividend date with
respect to such dividend or distribution.

     (e) All calculations of adjustments hereunder shall be made to the nearest cent or to the
nearest 1/100 of a share, as the case may be.

-9-

 

     (f) In the event that at any time, as a result of an adjustment made pursuant to subparagraph
(a) or (b) above, the Purchaser shall, upon any exercise of this Warrant, become entitled to
receive securities, cash or assets other than Common Stock, the number or amount of such securities
or property so receivable upon such exercise shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the provisions with respect to the
Common Stock contained in subparagraphs (a) through (d) above.

     (g) Whenever the Exercise Price is adjusted as herein provided, the Company shall send to each
transfer agent for the Common Stock, and to the Trading Market, a statement signed by the Chairman
of the Board, the Chief Executive Officer, the Chief Financial Officer or any Vice President of the
Company and if required by the Trading Market by its Treasurer, its Secretary or its Assistant
Secretary stating the adjusted Exercise Price determined as provided in this paragraph 5; and any
adjustment so evidenced, given in good faith, shall be binding upon all shareholders and upon the
Company. Whenever the Exercise Price is adjusted, the Company shall give prompt notice to the
holder hereof by mail, setting forth the adjustment and the new Exercise Price. Notwithstanding
the foregoing notice provisions, failure by the Company to give such notice or a defect in such
notice shall not affect the binding nature of such corporate action of the Company.

     (h) Whenever the Company shall propose to take any of the actions specified in subparagraphs
(a) through (d) of this paragraph 5 which would result in any adjustment in the Exercise Price, the
Company shall cause a notice to be mailed at least 10 days prior to the date on which the books of
the Company will close or on which a record will be taken for such action to the holder of record
of this Warrant on the date of such notice. Such notice shall specify the action proposed to be
taken by the Company and the date as of which holders of record of the Common Stock shall
participate in any such actions or be entitled to exchange their Common Stock for securities or
other property, as the case may be. Failure by the Company to give such notice or any defect in
such notice shall not affect the validity of the transaction.

     (i) Notwithstanding any other provision of this paragraph 5, no adjustment in the Exercise
Price need be made (A) for issuances of (1) Conversion Shares or Warrant Shares (as such terms are
defined in the Securities Purchase Agreement) or (2) Common Stock or Convertible Securities
actually issued upon the exercise of Options or shares of Common Stock actually issued upon the
conversion or exchange of Convertible Securities, in each case provided such issuance is pursuant
to the terms of such Option or Convertible Security; (B) for issuances of shares of Common Stock,
Options or Convertible Securities issued as a dividend or distribution on Series A Preferred Stock
(as defined in the Securities Purchase Agreement); (C) for sales of Common Stock pursuant to a plan
for reinvestment of dividends on Common Stock, provided that the purchase price in any such sale is
at least equal to 95% of the market price of the Common Stock at the time of such sales; or (D) for
sales of Common Stock pursuant to any plan adopted by the Company for the benefit of its employees
or consultants, provided that such plan has been approved by the Company’s independent directors,
or pursuant to any plan for the benefit of the Company’s directors, provided that such plan has
been approved by the Company’s shareholders.

-10-

 

     (j) If any event occurs as to which in the opinion of the Board of Directors of the Company
the other provisions of this paragraph 5 are not strictly applicable or if strictly applicable
would not fairly protect the purchase rights of the holder of this Warrant or of Common Stock in
accordance with the essential intent and principles of such provisions, then the Board of Directors
of the Company shall make an adjustment in the application of such provisions, in accordance with
such essential intent and principles, so as to protect such purchase rights as aforesaid; provided,
however, that the members of the Board of Directors of the Company shall not be liable to the
holders hereof for any such determination made in good faith.

     (k) No fractional shares of Common Stock shall be issued upon the exercise of this Warrant,
but, instead the Company shall round such fraction of a share of Common Stock to the nearest whole
share, except that if the fraction is one-half or greater, the Company shall round the fraction up
to the nearest whole share.

6. As used herein, the term “Common Stock” shall mean and include the Company’s presently
authorized Common Stock and shall also include any capital stock of any class of the Company
hereafter authorized which shall not be limited to a fixed sum or percentage in respect of the
rights of the holders thereof to participate in dividends or in the distribution of assets upon the
voluntary or involuntary liquidation, dissolution or winding up of the Company; provided that the
shares purchasable pursuant to this Warrant shall include shares designated as Common Stock of the
Company on the date of original issue of this Warrant or, in the case of any reclassification of
the outstanding shares thereof, the stock, securities, cash or assets provided for in paragraph
5(a) above.

7. This Warrant shall not entitle the holder hereof to any voting rights or other rights as a
shareholder of the Company.

8.

     (a) The holder of this Warrant acknowledges that neither this Warrant nor, as of the date of
the original issuance of this Warrant, any of the shares of Common Stock issuable upon exercise
hereof have been registered under the Securities Act of 1933, as amended (the “Act”), or any state
securities laws and that this Warrant or such shares of Common Stock may only be transferred in
accordance with this paragraph 8. The holder of this Warrant, by acceptance hereof, represents
that it has acquired this Warrant for investment and not with a view to distribution of this
Warrant or the shares of Common Stock issuable upon exercise hereof within the meaning of the Act
and the rules and regulations thereunder.

     (b) The holder realizes that the purchase of this Warrant is a speculative investment, and
that the economic benefits which may be derived therefrom are uncertain. In determining whether or
not to purchase the Warrant, the holder has relied solely upon the publicly-available materials
filed by the Company with the Securities and Exchange Commission, copies of which have been
reviewed by the Purchaser, and upon independent investigations made by the holder and its
representatives.

     (c) The holder of this Warrant, by acceptance hereof, agrees to give written notice to the
Company before exercising or transferring this Warrant, in whole or in part, or transferring any

-11-

 

shares of Common Stock issuable or issued upon the exercise hereof, if at the time of such transfer
the shares of Common Stock are not covered by an effective registration statement under the Act, of
such holder’s intention to do so. Such holder shall also provide the Company with an opinion of
counsel reasonably satisfactory to the Company to the effect that the proposed exercise or transfer
of this Warrant or transfer of shares, if at the time of such transfer the shares are not covered
by an effective registration statement under the Act, may be effected without registration or
qualification under the Act and any applicable state securities laws. Upon receipt of such written
notice and opinion by the Company, such holder shall be entitled to exercise this Warrant in
accordance with its terms, or to transfer this Warrant, or to transfer shares of Common Stock
issuable or issued upon the exercise of this Warrant, all in accordance with the terms of the
notice delivered by such holder to the Company, provided that an appropriate legend respecting the
aforesaid restrictions on transfer may be endorsed on this Warrant, if at the time of such transfer
the shares are not covered by an effective registration statement under the Act, or the
certificates for such shares. In the event of a proposed transfer of this Warrant, prior to the
transfer the proposed transferee shall execute and deliver to the Company a warrant transfer letter
in the form attached hereto.

9. Subject to the provisions of paragraph 8 hereof, this Warrant and all rights hereunder are
transferable, without the prior approval of the Company, in whole or in part, at the principal
office of the Company by the holder hereof in person or by duly authorized attorney, upon surrender
of this Warrant properly endorsed. Each taker and holder of this Warrant, by taking or holding the
same, consents and agrees that the bearer of this Warrant, when endorsed, may be treated by the
Company and all other persons dealing with this Warrant as the absolute owner hereof for any
purpose and as the person entitled to exercise the rights represented by this Warrant, or to the
transfer hereof on the books of the Company, any notice to the contrary notwithstanding; but until
such transfer on such books, the Company may treat the registered holder hereof as the owner for
all purposes.

10. This Warrant is exchangeable, upon the surrender hereof by the holder hereof at the principal
office of the Company, for new Warrants of like tenor representing in the aggregate the right to
subscribe for and purchase the number of shares which may be subscribed for and purchased
hereunder, each of such new Warrants to represent the right to subscribe for and purchase such
number of shares as shall be designated by said holder hereof at the time of such surrender.

11. The Company covenants and agrees that the holder of this Warrant shall have the rights of a
“Purchaser” under the Registration Rights Agreement, of even date herewith, by and among the
Company, the Purchaser, and the other purchasers set forth therein, set forth in such agreement.

12.

     (a) In addition to and without limiting the rights of the holder of this Warrant under the
terms of this Warrant, the holder of this Warrant shall have the right (the “Conversion Right”) to
convert this Warrant or any portion thereof into shares of Common Stock as provided in this paragraph 12 at any time or from time to time prior to its expiration. Upon exercise
of the Conversion Right with respect to a particular number of shares subject to this Warrant (the
“Converted Warrant Shares”), the Company shall deliver to the holder of this Warrant, without

-12-

 

payment by the holder of any exercise price or any cash or other consideration, that number of
shares of Common Stock equal to the quotient obtained by dividing the Net Value (as defined below)
of the Converted Warrant Shares by the Market Price (as defined below) of a single share of Common
Stock, determined in each case as of the Conversion Date (as hereinafter defined). The “Net Value”
of the Converted Warrant Shares shall be determined by subtracting the aggregate Exercise Price of
the Converted Warrant Shares from the aggregate Market Price of the Converted Warrant Shares.
Notwithstanding anything in this paragraph 12 to the contrary, the Conversion Right cannot be
exercised with respect to a number of Converted Warrant Shares having a Net Value below $100. No
fractional shares shall be issuable upon exercise of the Conversion Right, and if the number of
shares to be issued in accordance with the foregoing formula is other than a whole number, the
Company shall round such fraction of a share of Common Stock to the nearest whole share, except
that if the fraction is one-half or greater, the Company shall round the fraction up to the nearest
whole share.

     (b) The Conversion Right may be exercised by the holder of this Warrant by the surrender of
this Warrant at the principal office of the Company together with a written statement specifying
that the holder thereby intends to exercise the Conversion Right and indicating the number of
shares subject to this Warrant which are being surrendered (referred to in subparagraph (a) above
as the Converted Warrant Shares) in exercise of the Conversion Right. Such conversion shall be
effective upon receipt by the Company of this Warrant together with the aforesaid written
statement, or on such later date as is specified therein (the “Conversion Date”), but not later
than the expiration date of this Warrant. Certificates for the shares of Common Stock issuable
upon exercise of the Conversion Right and, in the case of a partial exercise, a new warrant
evidencing the shares remaining subject to this Warrant, shall be issued as of the Conversion Date
and shall be delivered to the holder of this Warrant within 15 days following the Conversion Date.

     (c) “Market Price” for purposes of this paragraph 12 shall mean, if the Common Stock is traded
on a securities exchange, the closing price of the Common Stock on such exchange, or, if the Common
Stock is otherwise traded in the over-the-counter market, the closing bid price, in each case
averaged over a period of 20 consecutive Business Days prior to the Conversion Date. If at any
time the Common Stock is not traded on an exchange, or otherwise traded in the over-the-counter
market, the “market price” shall be deemed to be the higher of (i) the book value thereof as
determined by any firm of independent public accountants of recognized standing selected by the
Board of Directors of the Company as of the last day of any month ending within 60 days preceding
the Conversion Date, or (ii) the fair value thereof determined in good faith by the Board of
Directors of the Company as of a date which is within l5 days of the Conversion Date.

13. The issuance of any shares or other securities upon the exercise of this Warrant, and the
delivery of certificates or other instruments representing such shares or other securities, shall
be made without charge to the holder hereof for any tax or other charge in respect of such
issuance. The Company shall not, however, be required to pay any tax which may be payable in
respect of any transfer involved in the issue and delivery of any certificate in a name other than that of the
holder hereof and the Company shall not be required to issue or deliver any such certificate unless
and until the person or persons requesting the issue thereof shall have paid to the

-13-

 

Company the amount of such tax or shall have established to the satisfaction of the Company that such tax has
been paid.

14. All questions concerning this Warrant will be governed and interpreted and enforced in
accordance with the internal law, not the law of conflicts, of the State of Minnesota.

(Signature Page Follows)

-14-

 

     IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by its duly authorized
officer and this Warrant to be dated as of June 15, 2007.

	 	 	 	 	 
	 	WILSONS THE LEATHER EXPERTS INC.

 	 
	 	By  	 	 
	 	 	Its 	 	 
	 	 	 	 
	 

RESTRICTION ON TRANSFER

     The securities evidenced hereby may not be transferred without (i) the opinion of counsel
satisfactory to the Company that such transfer may be lawfully made without registration under the
Securities Act of 1933, as amended, and all applicable state securities laws or (ii) such
registration.

-15-

 

ASSIGNMENT

(To Be Signed Only Upon Assignment)

     FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto __________________________________ this Warrant, and appoints ______________________________________ to transfer this
Warrant on the books of Wilsons The Leather Experts Inc. with the full power of substitution in the
premises.

Dated: _________________________

In the presence of: _________________________

_______________________________________

(Signature must conform in all respects to the name of the holder as
specified on the face of this Warrant without any alteration or
change whatsoever, and the signature must be guaranteed in the usual
manner)

 

 

FORM OF WARRANT TRANSFER LETTER

To: Wilsons The Leather Experts Inc.

Ladies and Gentlemen:

     The undersigned is a proposed transferee of the warrant (the “Warrant”) to purchase
_______________________ shares of Common Stock, par value $0.01 (“Common Stock”), of Wilsons The
Leather Experts Inc., a Minnesota corporation (the “Company”), currently registered in the name of
______________________. In order to induce the Company to consent to the transfer of the Warrant, the
undersigned hereby represents, warrants and agrees as follows:

	1.	 	The undersigned acknowledges that neither the Warrant nor **[any of the shares of Common
Stock issuable upon exercise thereof] have been registered under the Securities Act of 1933,
as amended (the “Act”), or any state securities laws and that, accordingly, the Warrant **[and
such shares of Common Stock] may only be transferred in accordance with the terms of
paragraphs 8 and 9 of the Warrant.

	1.	 	The undersigned is an “accredited investor” as defined in Rule 501(a) of Regulation D
promulgated under the Act.

	 	 	 	 	 
	 	Signature ______________________________

Address _______________________________

Date __________________________________
 	 
	 	 	 
	 	 	 
	 	 	 

 

	 	 	 	 	 

FORM OF EXERCISE NOTICE

To be Executed by the Holder of this Warrant if such Holder

Desires to Exercise this Warrant in Whole or in Part:

To: Wilsons The Leather Experts Inc. (the “Company”)

The undersigned _______________________________________________

Please insert Social Security or other

identifying number of Purchaser:
____________________________________________________

hereby irrevocably elects to exercise the right of purchase represented by this Warrant for, and to
purchase thereunder, ___________________ shares of the Common Stock provided for therein and
tenders payment herewith to the order of the Company in the amount of $___________________, such
payment being made as provided on the face of this Warrant.

In order to induce the Company to consent to the exercise of this Warrant, the undersigned hereby
represents, warrants and agrees that neither this Warrant **[nor any of the shares of Common Stock
issuable upon exercise hereof] have been registered under the Securities Act of 1933, as amended
(the “Act”), or any state securities laws and that, accordingly, this Warrant may be exercised [and
the shares of Common Stock issued pursuant to this exercise] may only be transferred in accordance
with the terms of paragraphs 8 and 9 of this Warrant.

 

          The undersigned requests that certificates for such shares of Common Stock be issued
as follows:

Name: _________________________________________________________________________________________

Address: ______________________________________________________________________________________

Deliver to: _____________________________________________________________________________________

Address: ______________________________________________________________________________________

and, if such number of shares of Common Stock shall not be all the shares of Common Stock
purchasable hereunder, that a new Warrant for the balance remaining of the shares of Common Stock
purchasable under this Warrant be registered in the name of, and delivered to, the undersigned at
the address stated below.

Address: _____________________________________________________________

Signature _______________________________________

(Signature must conform in all respects to the name of the

holder as written specified on the face of this Warrant

without any alteration or change whatsoever)

Dated: ____________________

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