Exhibit 10.1

SECOND AMENDMENT AND AGREEMENT
 
This SECOND AMENDMENT AND AGREEMENT, dated as of June 17, 2009 (this “Second
Amendment and Agreement”), is hereby entered into by and between American
Apparel, Inc., a Delaware corporation (the “Company”), and Lion/Hollywood
L.L.C., a Delaware limited liability company (“Lion”).
 
WHEREAS, the Company and Lion are parties to the Investment Agreement, dated as
of March 13, 2009, as amended as of April 10, 2009 (the “Investment Agreement”);
 
WHEREAS, Section 5.2 of the Investment Agreement permits the Company and Lion to
amend the Investment Agreement by an instrument in writing signed by duly
authorized officers of each of the Company and Lion; and
 
WHEREAS, the Company and Lion each desire to further amend the Investment
Agreement and enter into certain other agreements as provided herein.
 
NOW, THEREFORE, in consideration of the premises, and of the representations,
warranties, covenants and agreements set forth herein, the Company and Lion
hereby agree as follows:
 
1.           Defined Terms.  Capitalized terms used but not defined herein shall
have the meanings assigned to them in the Investment Agreement.
 
2.           Amendment of Sections 4.1(c) and 4.1(f) of the Investment
Agreement.  Sections 4.1(c) and 4.1(f) of the Investment Agreement are hereby
amended by replacing all references therein to “June 30, 2009” with “September
30, 2009.”
 
3.           Company Stockholder Meeting.  The Company agrees to use its
commercially reasonable best efforts to hold an annual meeting of stockholders
of the Company (the “Stockholder Meeting”) as soon as reasonably practicable and
in any event prior to September 30, 2009 for the purpose of electing each of the
Investor Directors to the Board, among other matters.  The Company further
agrees to nominate each of the Investor Directors to be elected as a director at
the Stockholder Meeting, include each such nomination and other required
information regarding such individuals in the preliminary and definitive proxy
statements for the Stockholder Meeting and solicit or cause the solicitation of
proxies in connection with the election of each such individual as a director.
 
4.           Representations and Warranties.  Each of the Company and Lion
hereby represents and warrants that (a) it has the requisite power and authority
to execute and deliver this Second Amendment and Agreement, (b) this Second
Amendment and Agreement has been duly and validly authorized by all necessary
action by such party, and (c) this Second Amendment and Agreement has been duly
and validly executed and delivered and, assuming due authorization and execution
by the other party hereto,
 
 
 

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constitutes its legal, valid and binding obligation enforceable against it in
accordance with its terms.
 
5.           Governing Law; Jurisdiction.  This Second Amendment and Agreement
will be governed by and construed in accordance with the laws of the State of
New York.  Any action against either party hereto, including any action for
provisional or conservatory measures or action to enforce any judgment entered
by any court in respect of any thereof, may be brought in any federal or state
court of competent jurisdiction located in the Borough of Manhattan in the State
of New York, and each party hereto irrevocably consents to the jurisdiction and
venue in the United States District Court for the Southern District of New York
and in the courts hearing appeals therefrom unless no federal subject matter
jurisdiction exists, in which event, each party hereto irrevocably consents to
jurisdiction and venue in the Supreme Court of the State of New York, New York
County, and in the courts hearing appeals therefrom.  Each party hereto hereby
irrevocably waives, and agrees not to assert, by way of motion, as a defense,
counterclaim or otherwise, in any action or proceeding with respect to this
Second Amendment and Agreement, any claim that it is not personally subject to
the jurisdiction of the above-named courts for any reason other than the failure
to serve process in accordance with this Second Amendment and Agreement, that it
or its property is exempt or immune from jurisdiction of any such court or from
any legal process commenced in such courts (whether through service of notice,
attachment prior to judgment, attachment in aid of execution of judgment,
execution of judgment or otherwise), and to the fullest extent permitted by
applicable law, that the suit, action or proceeding in any such court is brought
in an inconvenient forum, that the venue of such suit, action or proceeding is
improper, or that this Second Amendment and Agreement, or the subject matter
hereof or thereof, may not be enforced in or by such courts and further
irrevocably waives, to the fullest extent permitted by applicable law, the
benefit of any defense that would hinder, fetter or delay the levy, execution or
collection of any amount to which the party is entitled pursuant to the final
judgment of any court having jurisdiction.  Each party expressly acknowledges
that the foregoing waiver is intended to be irrevocable under the laws of the
State of New York and of the United States of America.
 
6.           WAIVER OF JURY TRIAL.  EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATED TO THIS SECOND AMENDMENT AND AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
 
7.           Specific Performance.  The parties hereby acknowledge and agree
that each party would not have an adequate remedy at law for money damages, and
irreparable damage would occur, in the event that any of the provisions of this
Second Amendment and Agreement were not performed in accordance with their
specific terms or were otherwise breached.  It is accordingly agreed that any
party shall be entitled to an injunction or injunctions to prevent breaches of
this Second Amendment and Agreement by the other party and to enforce
specifically the terms and provisions of this Second Amendment and Agreement
against the other party, this being in addition to any other remedy to which
either such party is entitled at law or in equity, and each party waives
 
 
 

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(a) the defense in any action for an injunction or other equitable relief that a
remedy at law would be adequate and (b) agrees that any such action for
injunctive relief or specific performance may be brought in (and hereby
irrevocably submits to the jurisdiction of) any federal or state court in the
State of New York.
 
8.           Severability.  If any provision of this Second Amendment and
Agreement or the application thereof to any person (including the officers and
directors of the parties hereto) or circumstance is determined by a court of
competent jurisdiction to be invalid, void or unenforceable, the remaining
provisions hereof, or the application of such provision to persons or
circumstances other than those as to which it has been held invalid or
unenforceable, will remain in full force and effect and shall in no way be
affected, impaired or invalidated thereby, so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party.  Upon such determination, the parties shall
negotiate in good faith in an effort to agree upon a suitable and equitable
substitute provision to effect the original intent of the parties.
 
9.           Counterparts and Facsimile.  For the convenience of the parties
hereto, this Second Amendment and Agreement may be executed in any number of
separate counterparts, each such counterpart being deemed to be an original
instrument, and all such counterparts will together constitute the same
agreement.  Executed signature pages to this Second Amendment and Agreement may
be delivered by facsimile or other electronic means and such electronic
signature pages will be deemed as sufficient as if physical signature pages had
been delivered.
 
10.           No Other Amendment and Agreements.  Except to the extent expressly
amended by this Second Amendment and Agreement, all terms of the Investment
Agreement shall remain in full force and effect without amendment, change or
modification.
 
11.           References to Investment Agreement.  All references in the
Investment Agreement to the “Agreement” shall be deemed to be the Investment
Agreement as amended by this Second Amendment and Agreement.
 
[signature page follows]
 
 
 

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IN WITNESS WHEREOF, the Company and Lion have caused this Second Amendment and
Agreement to be executed as of the date first written above by their respective
officers thereunto duly authorized.
 

       
AMERICAN APPAREL, INC.
             
By:
/s/ Adrian Kowalewski
   
Name: Adrian Kowalewski
   
Title:   Chief Financial Officer

       
LION/HOLLYWOOD L.L.C.
             
By:
/s/ Jacob Capps
   
Name: Jacob Capps
   
Title:   President