Exhibit 10.1

EMPLOYMENT AGREEMENT

EMPLOYMENT AGREEMENT, made as of January 27, 2009, by and between American
Apparel, Inc., a Delaware corporation (herein referred to as the “Company”), and
Glenn A. Weinman (herein referred to as the “Executive”) (the “Agreement”).

W I T N E S S E T H:

WHEREAS, the Company and the Executive deem it to be in their respective best
interests to enter into an agreement providing for the Company’s employment of
the Executive pursuant to the terms herein stated;

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein
contained, the parties hereto hereby agree as follows:

1.           Employment; Position and Duties; Exclusive Services.

(a)          Employment.  The Company agrees to employ the Executive, and the
Executive agrees to be employed by the Company, for the Term provided in
Section 2 below and upon the other terms and conditions hereinafter provided.

(b)         Position and Duties.  During the Term, the Executive (i) agrees to
serve as the General Counsel and Secretary of the Company and to perform such
reasonable duties as may be delineated in the By-Laws of the Company and as may
be assigned to him from time to time by the Board of Directors of the Company
(the “Board”), including, without limitation, the management of the legal
affairs of the Company, (ii) shall report, as General Counsel of the Company,
only to the Board, the Chairman of the Board and the Chief Executive Officer of
the Company, (iii) shall be given such authority as is appropriate to carry out
the duties described above, it being understood that, in his capacities as
General Counsel and Secretary of the Company, his duties will be consistent in
scope, prestige and authority with the duties of General Counsel of the Company
as demonstrated by the Company’s existing practices as of the effective date of
this Agreement, and (v) agrees to serve, if elected, at no additional
compensation in the position of officer or director of any subsidiary or
affiliate of the Company; provided, however, that such position shall be of no
less status relative to such subsidiary or affiliate as the position that the
Executive holds pursuant to clause (i) of this Section 1(b) is relative to the
Company.

(c)          Exclusive Services.  During the Term, and except for illness or
incapacity, the Executive shall devote all of his business time, attention,
skill and efforts exclusively to the business and affairs of the Company and its
subsidiaries and affiliates, shall not be engaged in any other business
activity, and shall perform and discharge the
 
 

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duties which may be assigned to him from time to time by the Board or the Chief
Executive Officer; provided, however, that nothing in this Agreement shall
preclude the Executive from devoting time during reasonable periods required
for:

(1)        serving, in accordance with the Company’s policies, as a director or
member of a committee of any company or organization involving no actual or
potential conflict of interest with the Company or any of its subsidiaries or
affiliates,

    (ii)     delivering lectures and fulfilling speaking engagements,

    (iii)    engaging in charitable and community activities, and

    (iv)    investing his personal assets in a Passive Investment.  For purposes
of this Agreement, a “Passive Investment” shall mean an investment in a business
or entity which does not require the Executive to render any services in the
operations or affairs of such business or entity and which does not materially
adversely affect or interfere with the performance of the Executive’s duties and
obligations to the Company or any of its subsidiaries or affiliates.

(d)          Place of Employment.  The Executive shall perform his duties out of
the Company’s Los Angeles, California office (as same may be relocated in the
same metropolitan area from time to time) or at such other location as shall be
agreed to by the Company and the Executive.

2.           Term of Agreement.

The term of employment under this Agreement shall initially be the two-year
period commencing on February 17, 2009 (the “Effective Date”) and ending on
February 17, 2011, and shall be automatically extended without further action by
either party for successive one-year periods, unless written notice of the
Company’s intention to terminate this Agreement has been given to the Executive
at least 90 days prior to the expiration of the Term (including any one-year
extension thereof).  As used in this Agreement, the “Term” shall mean the
initial two-year term plus any extensions thereof as provided in this Section 2.

3.             Salary and Bonuses.

The Executive’s cash compensation for all services to be rendered by him in any
capacity hereunder shall consist of base salary and other compensation as
provided in this Section.

(a)          Salary.  The Executive shall be paid a minimum base salary (the
“Salary”) at the rate of $300,000.00 per annum.  The Salary shall be payable in
accordance with the customary payroll practices for executives of the
Company.  The amount of the Executive’s Salary will be reviewed not less often
than annually by the
 
 
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Compensation Committee of the Board (the “Compensation Committee”) and may be
increased, but not decreased below such amount, on the basis of such review.

(b)          Performance Bonuses. The Board will consider the payment to the
Executive of an annual performance bonus as to each fiscal year during the
Term.  The Board will also consider the Executive’s participation in a long-term
performance bonus program being considered by the Board for senior executives of
the Company.  The amount and timing of the bonuses, if any, and criteria
therefore shall be at the sole discretion of the Board.

4.           Stock Options.

Commencing as of the Effective Date, the Executive shall be eligible for stock
and stock option grants under the Company’s 2007 Performance Equity Plan and any
successor plan thereto (collectively, the “Equity Plan”) for the Company’s
executive officers, in accordance with the terms and conditions thereof.  Stock
and stock option grants, if any, will be at the sole discretion of the
Compensation Committee.  Any options granted to the Executive under the Equity
Plan shall be subject to the terms and conditions specified by the Compensation
Committee in accordance with the provisions of the Equity Plan.

5.           Pension and Welfare Benefits.

During the Term, the Executive will participate in all pension and welfare
plans, programs and benefits that are applicable to executives of the Company.
 
6.           Other Benefits.

(a)          Travel and Business-related Expenses.  During the Term, the
Executive shall be reimbursed in accordance with the policies of the Company for
traveling and other expenses incurred in the performance of the business of the
Company.

(b)          Vacation; Leaves of Absence.  The Executive shall accrue three
weeks of paid vacation for each full year of employment during the Term;
provided that the Executive shall be allowed vacations and leaves of absence
with pay on the same basis as the Company generally provides to other senior
executive employees of the Company.

(c)          State, County and Legal Association Bar Dues and Fees.  During the
Term, the Executive shall be reimbursed for his State and County Bar Dues and
for dues and/or fees required to join legal or trade associations in the
furtherance of the Executive's duties and/or education.

7.           Termination of Employment.

(a)          Termination for Cause; Resignation Without Good Reason.
 
 
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(i)          If the Executive’s employment is terminated by the Company for
Cause (as defined below in this Section) or if the Executive resigns from his
employment without Good Reason (as defined below in this Section), prior to the
expiration of the Term, the Executive shall be entitled to receive:  (A) the
Salary provided for in Section 3(a) as accrued through the date of such
resignation or termination; (B) any annual performance bonus or long term
performance bonus earned but not yet paid in respect of any calendar year
preceding the year in which such termination or resignation occurs; and (C) any
unreimbursed expenses.  The Executive shall not accrue or otherwise be eligible
to receive Salary payments or to participate in any plans, programs or benefits
described in Section 5 hereof with respect to periods after the date of such
termination or resignation and shall not be eligible to receive any annual
performance bonus or long term performance bonus in respect of the year of such
termination or resignation or any calendar year following the year in which such
termination or resignation occurs.  Any bonus earned in respect of a year prior
to the year in which such termination or resignation occurs shall be payable at
the same time and in the same manner as bonuses are paid to participants in the
applicable bonus plan.

The Executive shall have no right under this Agreement or otherwise to receive
any other compensation, or to participate in any other plan, arrangement or
benefit, with respect to future periods after such termination or resignation of
employment (except to the extent provided for under the terms of any such plan,
arrangement or benefit).

(ii)         Termination for “Cause” shall mean termination by action of the
Board because of:  (A) the Executive’s willful and continued failure (other than
by reason of the incapacity of the Executive due to physical or mental illness)
substantially to perform his duties hereunder; (B) the conviction of the
Executive or the Executive entering a plea of guilty or nolo contendere to a
crime that constitutes a felony or the perpetration by the Executive of a
serious dishonest act against the Company or any of its affiliates or
subsidiaries; (C) any willful misconduct by the Executive that is materially
injurious to the financial condition or business reputation of the Company or
any of its affiliates or subsidiaries; or (D) chronic alcoholism or drug abuse
which materially affects the Executive’s performance hereunder, provided,
however, that no event or circumstance shall be considered to constitute Cause
within the meaning of this clause (ii) unless the Executive has been given
written notice of the events or circumstances constituting Cause and has failed
to effect a cure thereof within 30 calendar days following the receipt of such
notice.

(iii)        Resignation for “Good Reason” shall mean the resignation of the
Executive because of (A) a material reduction in the Executive’s
responsibilities, duties, authority, status or titles as described in Section 1
above; (B) failure by the Company to pay or provide the Executive when due any
compensation, benefits
 
 
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or perquisites to which the Executive is entitled pursuant to this Agreement or
any other plan, contract or arrangement in which the Executive participates or
is entitled to participate; or (c) a material breach of the Company’s
obligations under this Agreement; provided, however, that no event or
circumstance shall be considered to constitute Good Reason within the meaning of
this clause (iii) unless the Company has been given written notice of the events
or circumstances constituting Good Reason by the Executive within 30 days of the
initial occurrence of such event or circumstance and the Company has failed to
effect a cure thereof within 30 calendar days following the receipt of such
notice.

(iv)        The date of termination of employment by the Company pursuant to
this Section 7(a) shall be the date specified in a written notice of termination
from the Company to the Executive, which, in the case of a proposed termination
to which the 30-day cure period provided for in subsection (ii) above applies
shall be no less than 31 days after the delivery of such notice to the
Executive.  The date of a resignation by the Executive pursuant to this
Section 7(a) shall be the date specified in the written notice of resignation
from the Executive to the Company, which, in the case of a proposed resignation
to which the 30-day cure period provided for in subsection (iii) above applies
shall be no less than 31 days after the delivery of such notice to the Company,
or, if no date is specified therein, 61 days after receipt by the Company of the
written notice of resignation from the Executive.

(b)        Termination Without Cause, Resignation for Good Reason.

(i)         If the Executive’s employment is terminated by the Company without
Cause or if the Executive should resign for Good Reason, prior to the expiration
of the Term, he shall be entitled to receive:  (A) the Salary provided for in
Section 3(a) as accrued through the date of such resignation or termination and
continuing for a period of one year from the date of such resignation or
termination (the “Continuation Period”); (B) any bonus earned but not yet paid
in respect of any calendar year preceding the year in which such termination or
resignation occurs; (C) any unreimbursed expenses and (1) a bonus for the
calendar year in which such termination or resignation occurs equal to the
Executive’s target annual performance bonus, if any, for such year and each
subsequent calendar year included in whole or in part within the Continuation
Period, provided, however, that the amount of such bonus payable in respect of
any partial calendar year at the conclusion of the Continuation Period shall be
prorated and shall equal such target annual performance bonus multiplied by a
fraction, the numerator of which shall equal the number of days in such calendar
year up to and including the last day of the Continuation Period and the
denominator of which shall equal the lesser of 365 or the number of days in such
final calendar year up to and including the last day of the Term; and (D) all
stock and stock option grants awarded to the Executive by the Company, or a
successor by merger or acquisition, including, but not limited to all awards
under the Company’s 2007 Performance Equity Plan and any successor plan thereto,
shall
 
 
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become 100% vested and shall be exercisable as provided in the applicable stock
option agreement.

Except to the extent required pursuant to Section 21 hereof, during the
Continuation Period, (X) Salary payments to the Executive shall be payable in
accordance with the payroll practices of the Company, and (Y) bonus payments, if
any, shall be made in respect of each calendar year at the same time and in the
same manner as bonuses are paid to participants in the applicable bonus plan.

The Executive shall also be entitled to continued participation in the medical,
dental and insurance plans and arrangements described in Section 5, on the same
terms and conditions as are in effect immediately prior to such termination or
resignation, until the earlier to occur of (i) the last day of the Continuation
Period and (ii) such time as the Executive is entitled to comparable benefits
provided by a subsequent employer.  Anything herein to the contrary
notwithstanding, the Company shall have no obligation to Continue to maintain
during the Continuation Period any plan or program solely as a result of the
provisions of this Agreement.  If, during the Continuation Period, the Executive
is precluded from participating in a plan or program by its terms or applicable
law or if the Company for any reason ceases to maintain such plan or program,
the Company shall provide the Executive with compensation or benefits the
aggregate value of which, in the reasonable judgment of the Company, is no less
than the aggregate value of the compensation or benefits that the Executive
would have received under such plan or program had he been eligible to
participate therein or had such plan or program continued to be maintained by
the Company.

(ii)         Except as may be provided under the terms of any applicable grants
to the Executive, under any plan or arrangement in which the Executive
participates or except as may be otherwise required by applicable law,
including, without limitation, the provisions of Section 4980B(f) of the
Internal Revenue Code of 1986, as amended (the “Code”), the Executive shall have
no right under this Agreement or any other agreement to receive any other
compensation, or to participate in any other plan, arrangement or benefit, with
respect to future periods after such termination or resignation of
employment.  In the event of a termination or resignation pursuant to this
Section 7(b), the Executive shall have no duty of mitigation with respect to
amounts payable to him pursuant to this Section 7(b) or other benefits to which
he is entitled pursuant hereto.  Notwithstanding anything to the contrary in
this Agreement, the right of the Executive to receive payments provided for in
this Section 7(b) shall be subject to Section 8 of this Agreement.

(iii)        The date of termination of employment by the Company pursuant to
this Section 7(b) shall be the date specified in the written notice of
termination from the Company to the Executive or, if no date is specified
therein, ten business days after receipt by the Executive of the written notice
of termination from the Company.  The date of a resignation by the Executive
 
 
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pursuant to this Section 7(b) shall be the date specified in the written notice
of resignation from the Executive to the Company or, if no date is specified
therein, ten business days after receipt by the Company of the written notice of
resignation from the Executive.

(c)          Death.  If the Executive’s employment hereunder terminates by
reason of death prior to expiration of the Term, the Executive’s beneficiary (or
if no such beneficiary is designated, his estate) shall be entitled to
receive:  (i) the Salary provided for in Section 3(a) as accrued through the
date of the Executive’s death; (ii) any bonus earned but not yet paid in respect
of any calendar year preceding the year in which the Executive’s death occurs;
(iii) a bonus for the calendar year in which the Executive’s death occurs equal
to a pro rata portion of the Executive’s target annual performance bonus, if
any, for such year, determined on the basis of the number of days in such year
through the date of the Executive’s death; and (iv) any unreimbursed
expenses.  Bonus payments provided for in this Section 7(c) shall be made at the
same time and in the same manner as bonuses are paid to participants in the
applicable bonus plan.  As used in this Section, the term “beneficiary” includes
both the singular and the plural of such term, as may be appropriate.

In lieu of the payment schedule provided for in the preceding paragraph, the
Executive’s beneficiary (or if no such beneficiary is designated, his estate)
may elect, by written notice to the Company not more than 90 days following the
date of the Executive’s death, to receive all amounts provided for in the
preceding paragraph that have not theretofore been paid in a single lump sum
equal to the present value of all such payments.  For purposes of the previous
sentence, present value shall be calculated on the basis of the applicable
short-term federal interest rate (applicable to loans with monthly compounding)
as determined pursuant to Section 1274(d) of the Code for the month in which
death occurs.

(d)          Disability.  If, the Executive is terminated from employment by the
Company as a result of the Executive’s Disability (as defined below in this
Section), the Executive, his conservator or guardian, as the case may be, shall
be entitled to receive:  (i) the Salary provided for in Section 3(a) as accrued
through the date of the Executive’s termination of employment; (ii) any bonus
earned but not yet paid in respect of any calendar year preceding the year in
which the Executive’s termination of employment occurs; (iii) a bonus for the
calendar year in which the Executive’s termination of employment occurs equal to
a pro rata portion of the Executive’s target bonus, if any, for such year,
determined on the basis of the number of days in such year through the date of
the Executive’s termination of employment; and (iv) any unreimbursed expenses.
Bonus payments provided for in this Section 7(d) shall be made at the same time
and in the same manner as bonuses are paid to participants in the applicable
bonus plan.  For purposes of this Agreement, “Disability” shall mean that the
Executive is unable to engage in any substantial gainful activity by reason  of
any medically determinable physical or mental impairment which can be expected
to last for a continuous period of not less than 12 months.  Any dispute as to
whether or not the Executive is disabled within the meaning of the preceding
sentence shall be resolved by a
 
 
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physician reasonably satisfactory to the Executive and the Company, and the
determination of such physician shall be final and binding upon both the
Executive and the Company.

8.           Tax Withholding.

Payments to the Executive of all compensation contemplated under this Agreement
shall be subject to all applicable legal requirements with respect to the
withholding of taxes.

9.           Confidentiality and Proprietary Rights.

(a)          Confidentiality.  The Executive acknowledges that as a result of
his employment with the Company, the Executive will obtain secret and
confidential information concerning the business of the Company, and its
subsidiaries and affiliates (all of such entities referred to collectively in
this Section, as the “Company”). Other than in the performance of his duties
hereunder, the Executive agrees not to disclose, either during the Term of his
employment with the Company or at any time thereafter, to any person, firm or
corporation any confidential information concerning the Company which is not in
the public domain including trade secrets, budgets, strategies, operating plans,
marketing plans, supplier lists, non-public company agreements, employee lists,
or the customer lists or similar confidential information of the Company.

(b)          Proprietary Rights.  All records, files, memoranda, reports, price
lists, customer lists, drawings, plans, sketches, documents and the like
(together with all copies thereof) relating to the business of the Company
and/or its subsidiaries, which the Executive shall use or prepare or come in
contact with in the course of, or as a result of his employment, or as a result
of work performed by the Executive for the Company, shall, as between the
parties, remain the sole property of the Company. Upon termination of his
employment with the Company, the Executive agrees to immediately return all such
materials and shall not thereafter cause removal thereof from the premises of
the Company. Further, the Executive agrees to disclose and assign, and does
hereby assign, to the Company as its exclusive property, all ideas, writings,
inventions, discoveries, improvements and technical or business innovations made
or conceived by the Executive, whether or not patentable or copyrightable,
either solely or jointly with others during the course of his employment with
the Company, relating directly to the business, work or investigations of the
Company or its subsidiaries (“Company Inventions”).

Notwithstanding the foregoing, the Executive understands that the provisions of
this Agreement requiring assignment of Company Inventions to the Company do not
apply to any invention that qualifies under the provisions of California Labor
Code Section 2870 (as set forth in Exhibit A hereto). The Executive understands
that Company will keep in confidence and will not disclose to third parties
without the Executive’s consent any confidential information disclosed in
writing to Company relating to inventions that qualify under the provisions of
Section 2870 of the California Labor Code.
 
 
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10.         Nonassignability; Binding Agreement.

Neither this Agreement nor any right, duty, obligation or interest hereunder
shall be assignable or delegable by the Executive without the Company’s prior
written consent; provided, however, that nothing in this Section shall preclude
the Executive from designating any of his beneficiaries to receive any benefits
payable hereunder upon his death or disability, or his executors,
administrators, or other legal representatives, from assigning any rights
hereunder to the person or persons entitled thereto.  This Agreement shall be
binding upon, and inure to the benefit of, the parties hereto, any successors to
or assigns of the Company and the Executive’s heirs and the personal
representatives of the Executive’s estate.

11.       Amendment; Waiver.  This Agreement may not be modified, amended or
waived in any manner except by an instrument in writing signed by the parties
hereto.  The waiver by either party of compliance with any provision of this
Agreement by the other party shall not operate or be construed as a waiver of
any provision of this Agreement, or of any subsequent breach by such party of a
provision of this Agreement.

12.       Notices.

Any notice hereunder by either party to the other shall be given in writing by
personal delivery, email or certified mail, return receipt requested, to the
applicable address set forth below:
 

 
(a)
To the Company:
American Apparel, Inc.
   
747 Warehouse Street
   
Los Angeles, California 90021
   
Attention:  Adrian Kowalewski
   
Email: adrian@americanapparel.net
           
(b)
To the Executive:
Glenn A. Weinman
   
17045 Rancho Street
   
Encino, California  91316
   
Email: gaweinman@aol.com

 
 
(or such other address as may from time to time be designated by notice by any
party hereto for such purpose). Notice shall be deemed given, if by personal
delivery, on the date of such delivery or, if by email, on the business day
following receipt of confirmation or, if by certified mail, on the date shown on
the applicable return receipt.

13.         California Law.

This Agreement is to be governed by and interpreted in accordance with the laws
of the State of California, without giving effect to the choice-of-law
provisions
 
 
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thereof. If, under such law, any portion of this Agreement is at any time deemed
to be in conflict with any applicable statute, rule, regulation or ordinance,
such portion shall be deemed to be modified or altered to conform thereto or, if
that is not possible, to be omitted from this Agreement, and the invalidity of
any such portion shall not affect the force, effect and validity of the
remaining portion hereof.

14.         Arbitration.

The Company and the Executive agree that any and all disputes based upon,
relating to or arising out of this Agreement, the Executive’s employment
relationship with the Company or any of its subsidiaries or affiliates and/or
the termination of that relationship, and/or any other dispute by and between
the Executive and the Company or any of its subsidiaries or affiliates,
including any and all claims that the Executive may at any time attempt to
assert against the Company or any of its subsidiaries or affiliates, shall be
submitted to binding arbitration in Los Angeles County, California, pursuant to
the American Arbitration Association’s (“AAA”) Employment Arbitration Rules and
Mediation Procedures, including the Optional Rules for Emergency Measures of
Protection (the “Rules”), provided that the arbitrator shall allow for discovery
sufficient to adequately arbitrate any asserted claims, including access to
essential documents and witnesses, and otherwise in accordance with California
Code of Civil Procedure § 1283.05, and provided further that the Rules shall be
modified by the arbitrator to the extent necessary to be consistent with
applicable law. The arbitrator shall be a retired judge of the California
Superior Court, California Court of Appeal, or United States District Court, to
be mutually agreed upon by the parties. If, however, the parties are unable to
agree upon an arbitrator, then an arbitrator, who is a retired judge of the
California Superior Court, California Court of Appeal, or United States District
Court, shall be selected by AAA in accordance with the Rules. The Company and
the Executive further agree that each party shall pay its own costs and
attorneys’ fees, if any; provided, however, that if either party prevails on a
claim which affords the prevailing party an award of attorneys’ fees, then the
arbitrator may award reasonable attorneys’ fees to the prevailing party,
consistent with applicable law. In any event, the Company shall pay any expenses
that the Executive would not otherwise have incurred if the dispute had been
adjudicated in a court of law, rather than through arbitration, including the
arbitrator’s fee, any administrative fee and any filing fee in excess of the
maximum court filing fee in the jurisdiction in which the arbitration is
commenced. The Company and the Executive further agree that any hearing must be
transcribed by a certified shorthand reporter, and that the arbitrator shall
issue a written decision and award supported by essential findings of fact and
conclusions of law in order to facilitate judicial review.  Said award and
decision shall be issued within thirty (30) days of the completion of the
arbitration. Judgment in a court of competent jurisdiction may be had on said
decision and award of the arbitrator. For these purposes, the parties agree to
submit to the jurisdiction of the state and federal courts located in Los
Angeles County, California.

15.         Injunctive Relief.

The Executive acknowledges and agrees that the services being rendered
 
 
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by the Executive to the Company under this Agreement are of a special, unique
and extraordinary character that gives them peculiar value to the Company and/or
its subsidiaries and affiliates, the loss of which (in violation of this
Agreement) would cause irreparable harm to the Company and/or its subsidiaries
and affiliates, for which the Company and/or its subsidiaries and affiliates
would have no adequate remedy at law.  The Executive further acknowledges and
agrees that the trade secrets and confidential and related information referred
to in this Agreement each are of substantial value to the Company and/or its
subsidiaries and affiliates and that a breach of any of the terms and conditions
of this Agreement relating to those subjects would cause irreparable harm to the
Company and/or its subsidiaries and affiliates, for which the Company and/or its
subsidiaries and affiliates would have no adequate remedy at law. Therefore, in
addition to any other remedies (in law or in equity) that may be available to
the Company and/or any of its subsidiaries and affiliates under this Agreement
or otherwise, the Company and/or its subsidiaries and affiliates shall be
entitled to obtain (pursuant to the Rules) temporary restraining orders,
preliminary and permanent injunctions and/or other equitable relief (pursuant to
the Rules) to specifically enforce the Executive’s duties and obligations under
this Agreement, or to enjoin any breach of this Agreement, without the need to
post a bond or other security and without the need to demonstrate special
damages.

16.         Counterparts.

This Agreement may be executed by either of the parties hereto in counterparts,
each of which shall be deemed to be an original, but all such counterparts shall
together constitute one and the same instrument.

17.         Indemnity, Attorneys’ Fees and Costs. The Company will indemnify the
Executive (and his legal representatives or other successors) to the fullest
extent permitted (including payment of expenses in advance of final disposition
of a proceeding) by the laws of the State of California, as in effect at the
time of the subject act or omission, or by the Certificate of Incorporation and
By-Laws of the Company, as in effect at such time, or by the terms of any
indemnification agreement between the Company and the Executive, whichever
affords greatest protection to the Executive, and the Executive shall be
entitled to the protection of any insurance policies the Company may elect to
maintain generally for the benefit of its directors and officers (and to the
extent the Company maintains such an insurance policy or policies, the Executive
shall be covered by such policy or policies, in accordance with its or their
terms, to the maximum extent of the coverage available for any Company officer
or director), against all costs, charges and expenses whatsoever incurred or
sustained by him or his legal representatives at the time such costs, charges
and expenses are incurred or sustained, in connection with any action, suit or
proceeding to which he (or his legal representatives or other successors) may be
made a party by reason of his being or having been a director, officer or
employee of the Company or any subsidiary thereof, or his serving or having
served any other enterprises as a director, officer or employee at the request
of the Company.  In the event of any dispute arising out of the subject matter
of this Agreement, the prevailing party shall recover, in addition to any other
damages assessed, its
 
 
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attorneys’ fees, legal expenses and costs incurred in arbitrating or otherwise
attempting to enforce this Agreement or resolve such dispute. In construing this
Agreement, no party hereto shall have any term or provision construed against
such party solely by reason of such party having drafted or written such term or
provision.

18.         Cumulative Remedies.

Each and all of the several rights and remedies provided in this Agreement, or
by law or in equity, shall be cumulative, and no one of them shall be exclusive
of any other right or remedy, and the exercise of any one of such rights or
remedies shall not be deemed a waiver of, or an election to exercise, any other
such right or remedy.
 
19.         Headings.

The section and other headings contained in this Agreement are for reference
purposes only and shall not in any way affect the meaning and interpretation of
this Agreement.

20.         Survival.

Any provision of this Agreement which imposes an obligation after termination or
expiration of this Agreement (including but not limited to the obligations set
forth in Section 11 hereof) shall, unless otherwise specified, survive the
termination or expiration of this Agreement and be binding on Executive and the
Company.

21.         General 409A Compliance.

To the extent applicable, it is intended that the Agreement comply with the
provisions of section 409A of the Code, as amended.  This Agreement will be
administered and interpreted in a manner consistent with this intent, and any
provision that would cause this Agreement to fail to satisfy Section 409A of the
Code will have no force and effect until amended to comply therewith (which
amendment may be retroactive to the extent permitted by Section 409A of the
Code).  Notwithstanding anything contained herein to the contrary, to the extent
required in order to avoid accelerated taxation and/or tax penalties under
Section 409A, the Executive shall not be considered to have terminated
employment with the Company for purposes of this Agreement and no payments shall
be due to the Executive under this Agreement which are payable upon the
Executive's termination of employment until the Executive would be considered to
have incurred a “separation from service” from the Company within the meaning of
Section 409A of the Code.  To the extent required in order to avoid accelerated
taxation and/or tax penalties under Section 409A of the Code, amounts that would
otherwise be payable and benefits that would otherwise be provided pursuant to
this Agreement during the six-month period immediately following the Executive's
termination of employment shall instead be paid on the first business day after
the date that is six months following the Executive's termination of employment
(or upon the Executive's death, if earlier).  In addition, for purposes of the
Agreement, each amount to
 
 
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be paid or benefit to be provided to the Executive pursuant to this Agreement
shall be construed as a separate identified payment for purposes of Section 409A
of the Code.  With respect to expenses eligible for reimbursement under the
terms of the Agreement, (i) the amount of such expenses eligible for
reimbursement in any taxable year shall not affect the expenses eligible for
reimbursement in another taxable year and (ii) any reimbursements of such
expenses shall be made no later than the end of the calendar year following the
calendar year in which the related expenses were incurred, except, in each case,
to the extent that the right to reimbursement does not provide for a “deferral
of compensation” within the meaning of Section 409A of the Code.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first written above, effective as of the Effective Date.

 
American Apparel, Inc.
             
By:
/s/ Dov Charney    
Title:
President and Chief Executive Officer                  
/s/ Glenn A. Weinman
 
           
Glenn A. Weinman
 

 
 
 
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Exhibit A
CALIFORNIA LABOR CODE SECTION 2870
EMPLOYMENT AGREEMENTS; ASSIGNMENT OF RIGHTS

“(a) Any provision in an employment agreement which provides that an employee
shall assign, or offer to assign, any of his or her rights in an invention to
his or her employer shall not apply to an invention that the employee developed
entirely on his or her own time without using the employer’s equipment,
supplies, facilities, or trade secret information except for those inventions
that either: (1) Relate at the time of conception or reduction to practice of
the invention to the employer’s business, or actual or demonstrably anticipated
research or development of the employer; or (2) Result from any work performed
by the employee for the employer. (b) To the extent a provision in an employment
agreement purports to require an employee to assign an invention otherwise
excluded from being required to be assigned under Subdivision (a), the provision
is against the public policy of this state and is unenforceable.”
 
 
 
 
 
 
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