Exhibit 10.4

 

WAIVER, CONSENT, AND EIGHTH   AMENDMENT TO CREDIT AGREEMENT   BANK OF AMERICA,
N.A.    

 

Date: April 26, 2011

THIS WAIVER, CONSENT, AND EIGHTH AMENDMENT TO CREDIT AGREEMENT (this “Eighth
Amendment”) is made to the Credit Agreement (as amended, the “Credit Agreement”)
dated as of July 2, 2007 by and among:

(a) AMERICAN APPAREL (USA), LLC (f/k/a AAI Acquisition LLC (successor-by-merger
to American Apparel, Inc.)), a limited liability company organized under the
laws of the State of California, with its principal executive offices at 747
Warehouse Street, Los Angeles, California 90021, for itself and as agent (in
such capacity, the “Lead Borrower”) for the other Borrowers now or hereafter
party to the Credit Agreement; and

(b) the BORROWERS now or hereafter party to the Credit Agreement; and

(c) the FACILITY GUARANTORS now or hereafter party to the Credit Agreement; and

(d) BANK OF AMERICA, N.A. (successor by merger to LaSalle Business Credit, LLC,
as agent for LaSalle Bank Midwest National Association, acting through its
division, LaSalle Retail Finance), with offices at 100 Federal Street, 9th
Floor, Boston, Massachusetts 02110, as administrative agent (in such capacity,
the “Administrative Agent”) for its own benefit and the benefit of the other
Credit Parties; and

(e) BANK OF AMERICA, N.A. (successor by merger to LaSalle Business Credit, LLC,
as agent for LaSalle Bank Midwest National Association, acting through its
division, LaSalle Retail Finance), with offices at 100 Federal Street, 9th
Floor, Boston, Massachusetts 02110, as collateral agent (in such capacity, the
“Collateral Agent”, and together with the Administrative Agent, individually an
“Agent” and collectively, the “Agents”) for its own benefit and the benefit of
the other Credit Parties; and

(f) WELLS FARGO BANK, NATIONAL ASSOCIATION (successor by merger to Wells Fargo
Retail Finance, LLC), with offices at One Boston Place, 19th Floor, Boston,
Massachusetts 02108, as collateral monitoring agent (in such capacity, the
“Collateral Monitoring Agent”) for its own benefit and the benefit of the other
Credit Parties; and

 

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(g) the LENDERS party to the Credit Agreement; and

(h) BANK OF AMERICA, N.A. (successor by merger to LaSalle Bank National
Association), a national banking association with offices at 100 Federal Street,
9th Floor, Boston, Massachusetts 02110, as Issuing Bank;

in consideration of the mutual covenants herein contained and benefits to be
derived herefrom, the parties hereto agree as follows:

Background:

A. Waiver. On April 1, 2011, the Administrative Agent and the Collateral Agent
notified the Loan Parties that they were in Default under the Credit Agreement
as a result of the Loan Parties’ failure to comply with Section 5.01(a) of the
Credit Agreement in that the year-end Consolidated balance sheet and related
statements of operations, and Consolidated statements of stockholders’ equity
and cash flows as of the end of and for 2010 for the Lead Borrower and its
Subsidiaries contained a “going concern” or like qualification or exception (the
“Specified Default”). On April 16, 2011, the Specified Default became an Event
of Default (the “Specified Event of Default”). The Administrative Agent and the
Collateral Agent expressly reserved all of the Agents’ and the Lenders’ rights
and remedies under the Credit Agreement and the other Loan Documents as a
consequence of the Specified Default and the Specified Event of Default. The
Loan Parties have requested that the Agents and the Lenders waive the Specified
Default and the Specified Event of Default, and the Agents and the Lenders are
willing to do so, but only upon the terms and conditions set forth in this
Eighth Amendment.

B. Consent. The Loan Parties have requested that the Agents and the Lenders
consent to the execution by the Lead Borrower and the Loan Parties of, and their
entry into, that certain Waiver and Sixth Amendment to Credit Agreement with
Wilmington Trust FSB, as Administrative Agent, to be effective simultaneously
with the execution and effectiveness of this Eighth Amendment, and the Agents
and the Lenders are willing to do so, but only upon the terms and conditions set
forth in this Eighth Amendment.

C. Amendment. The parties hereto entered into that certain First Amendment to
Credit Agreement on October 11, 2007, that certain Second Amendment and Waiver
to Credit Agreement on November 26, 2007, that certain Third Amendment to Credit
Agreement on December 12, 2007, that certain Fourth Amendment to Credit
Agreement on June 20, 2008, that certain Fifth Amendment to Credit Agreement on
December 19, 2008, that certain Sixth Amendment to Credit Agreement on March 13,
2009, and that certain Seventh Amendment to Credit Agreement on December 30,
2009. The parties hereto desire to further amend the Credit Agreement on the
terms and conditions set forth herein.

 

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Accordingly, it is hereby agreed, as follows:

 

1. Waiver of Specified Default and Specified Event of Default. The Agents and
the Lenders, with the Consent of the Required Lenders, hereby waive the
Specified Default and the Specified Event of Default. The foregoing waiver shall
not take effect upon the execution of this Eighth Amendment by the Agents and
the Lenders, and only shall become effective upon satisfaction in full of each
of the Preconditions to Effectiveness set forth in Section 6 below. Further, the
foregoing waiver relates only to the Specified Default and the Specified Event
of Default, is a one-time waiver, shall not be deemed to constitute a waiver
with respect to any other non-compliance with the terms and conditions of the
Credit Agreement, any of the other Loan Documents, or this Eighth Amendment,
whether now existing or hereafter arising, and is granted in express reliance
upon the terms and conditions of this Eighth Amendment, including all
representations, warranties, and covenants of the Loan Parties set forth herein.

 

2. Provisions Relating to Financial Performance and Controls.

 

  a. Retention of FTI Consulting, Inc. On or before the effectiveness of this
Eighth Amendment, the Parent shall formally retain FTI Consulting, Inc. and Mark
Weinsten (or any successor or replacement reasonably acceptable to the
Administrative Agent) (“FTI/Weinsten”) as Chairman of the Parent’s Office of
Special Programs (“OSP”), as described below. Unless and until terminated in
accordance with Section 4 below, FTI/Weinsten shall continue to be retained by
the Parent and serve as Chairman of the OSP at all times, and FTI/Weinsten shall
maintain and exercise all of the power, authority, and responsibility as set
forth in the Amendment to Engagement Letter between the OSP and FTI/Weinsten
dated April 17, 2011.

 

  b. Creation of the Office of Special Programs. On or before the effectiveness
of this Eighth Amendment, the Parent shall establish the OSP, initially
comprised of FTI/Weinsten, as Chairman, Thomas Casey, and John Luttrell. The OSP
shall report directly to the Parent’s Audit Committee of its Board of Directors.
Unless and until terminated in accordance with Section 4 below, the OSP shall
continue to be maintained by the Parent at all times and the OSP shall maintain
and exercise all of the power, authority, and responsibility that is usual and
customary for such offices.

 

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  i. On or before May 31, 2011, the OSP shall develop a business and operating
plan for the remainder of the fiscal year ending December 31, 2011 (the
“Operating Plan”) for the Loan Parties (x) as approved by the Audit Committee,
and (y) acceptable to the Agents, with the Consent of the Required Lenders.
Thereafter, the OSP shall have power and authority to implement and execute the
Operating Plan, and the Loan Parties shall use their good faith efforts to
operate their businesses in accordance with the Operating Plan.

 

  ii. Any amendment of the Operating Plan shall be made solely by OSP, subject
to the approval of the Agents, with the Consent of the Required Lenders.

 

  iii. Not later than December 31, 2011, the OSP shall present to the Agents an
updated and extended Operating Plan for the Loan Parties reasonably acceptable
to the Agents, with the Consent of the Required Lenders (not to be unreasonably
withheld), covering the period commencing upon the expiry of the initial
Operating Plan and ending on the Maturity Date.

 

  c. Cash Flow Budget. On or before April 26, 2011, the OSP shall prepare and
deliver a 13 week cash flow budget (the “CF Budget”) with respect to the Loan
Parties’ operations, and the CF Budget shall be updated and extended no later
than every 10 week period thereafter for the 13 week period commencing
immediately after the expiry of the then extant CF Budget, such that a 13 week
CF Budget is in place and effective at all times. Each CF Budget shall include,
among other things, receipts from Affiliates and require collections on accounts
due from Affiliates on a current basis (to the extent that funds are available
to make the required payments on a current basis, provided that to the extent
that the Loan Parties represent that funds are not so available to the
Affiliates, FTI/Weinsten shall have confirmed and then certified to the Agents
and the Lenders that (i) sufficient funds are not available for such payments,
and (ii) the absence of sufficient funds has not been caused by the Affiliates’
direct expenditure of funds in connection with items described in the then
current CF Budget in lieu of the Loan Parties’ expenditure of funds therefor).
The initial CF Budget, each extension thereof, and any amendments to any CF
Budget shall be in form and substance reasonably acceptable to the Agents, with
the Consent of the Required Lenders (not to be unreasonably withheld). The Loan
Parties shall use their commercially reasonable, good faith efforts to conduct
their operations in accordance with the then effective CF Budget.

 

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  i. The Loan Parties acknowledge and agree that no disbursements by the Loan
Parties shall be made without the prior written approval of FTI/Weinsten. The
Loan Parties shall perform in accordance with the then effective CF Budget
(i) within ninety percent (90%) of aggregate projected cumulative receipts as
shown in the then effective CF Budget, tested on a rolling three-week basis as
of the close of business on Saturday of each week with respect to the most
recently ended three-week period, with the first such test to be performed as of
May 14, 2011, and (ii) within one hundred ten percent (110%) of aggregate
projected cumulative disbursements as shown in the then effective CF Budget,
tested weekly as of the close of business on Saturday of each week, with the
first such test to be performed as of April 30, 2011.

  ii. Weekly, on or before 5:00 pm prevailing Eastern time on Tuesday of each
week, the OSP shall submit to the Agents a report (the “Variance Report”), which
reflects on a line-item basis the Loan Parties’ actual cash flow performance
compared to the CF Budget for the immediately preceding week and on a cumulative
basis for the period from the date of the then effective CF Budget through the
close of business for the immediately preceding week, and the percentage
variance of the Loan Parties’ actual cash flow results from those reflected in
the then extant CF Budget, along with an explanation of such variance(s). Each
Variance Report shall be certified by FTI/Weinsten that it is true, accurate,
and complete in all material respects, and that the Loan Parties have operated
in compliance with the then extant CF Budget and the terms and conditions of
this Eighth Amendment.

 

  d. Borrowing Base Certificates. Each Borrowing Base Certificate submitted
pursuant to Section 5.01(e) of the Credit Agreement shall be certified by
FTI/Weinsten to be true, accurate, and complete in all material respects, and
contain their representation and warranty to the Agents and the Lenders that all
requests for Borrowings are in compliance with the then effective CF Budget,
subject to variances permitted by this Eighth Amendment.

 

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3. Amendments to Credit Agreement. Subject to satisfaction of each and all of
the Preconditions to Effectiveness set forth in Section 6 below, the Credit
Agreement is amended as of the Eighth Amendment Effective Date (as defined
below) as follows:

 

  a. By deleting Exhibit “M” to the Credit Agreement, “Financial Performance
Covenants”, and substituting a new Exhibit “M”, in the form of Exhibit “M”
annexed hereto, in its place.

 

  b. Notwithstanding the provisions of Section 5.08 of the Credit Agreement
relating to the frequency with which appraisals, examinations, and audits may be
conducted, the Agents may employ (A) an independent appraiser to conduct (i) a
so-called “desktop appraisal” of the Loan Parties inventory each month, and
(ii) comprehensive appraisals of the Loan Parties’ inventory each calendar
quarter, and (B) an independent consultant to conduct a field examination and
audit each calendar quarter. Each of the foregoing appraisals, examinations, and
audits shall be conducted in accordance with the terms and conditions of the
Credit Agreement, and each shall be conducted at the Loan Parties’ cost and
expense. The Administrative Agent is hereby authorized to make a Revolving
Credit Loan under the Credit Agreement to pay all fees, costs, and expenses
incurred in connection with each appraisal, examination, and audit.

 

  c. By adding the following new definitions to Section 1.01 thereof in their
respective appropriate alphabetical order:

“ “Eighth Amendment” means that certain Waiver, Consent, and Eighth Amendment to
Credit Agreement dated as of April 26, 2011, by and between, among others, the
Loan Parties, the Agents, the Collateral Monitoring Agent, and the Lenders party
thereto.”

“ “Eighth Amendment Effective Date” means April 26, 2011.”

 

  d. By amending the definition of “Disclosed Matters” by adding the following
language at the end thereof:

“and all matters disclosed in filings with the SEC made by the Parent prior to
the Eighth Amendment Effective Date.”

 

  e. By amending Section 3.04 by adding the following language at the end of the
last sentence thereof:

“(other than Disclosed Matters).”

 

  f. By amending Section 3.17 by adding the following language at the end of the
first sentence thereof:

“(other than as a result of any Disclosed Matters).”

 

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  g. By deleting subsection 6.07(a) in its entirety and substituting the
following in its place:

“(a) No Loan Party will, or will permit any Subsidiary to, declare or make, or
agree to pay or make, directly or indirectly, any Restricted Payment other than
Permitted Dividends.”

 

  h. By adding a new subsection 7.01(x) in its appropriate alphabetical place,
as follows:

“(x) The failure of the Loan Parties to promptly, punctually, and faithfully
perform all and singular the terms and conditions of the Eighth Amendment in
accordance with its terms.”

 

4. Termination of FTI/Weinsten and Dissolution of the OSP. The Lead Borrower may
request the termination of the effectiveness of the provisions of Section 2
above, including the termination of FTI/Weinsten and the dissolution of the OSP,
at any time after August 31, 2011, if:

 

  a. The Loan Parties have complied with each and all of the terms and
conditions of this Eighth Amendment;

 

  b. No Default or Event of Default then exists; and

 

  c. The Loan Parties (i) have demonstrated Excess Availability of at least
$25,000,000.00, and (ii) satisfy a trailing twelve month minimum Consolidated
Fixed Charge Coverage Ratio of not less than 1.10:1.0.

Any such request for termination may be granted or withheld by the Agents, in
their sole and exclusive discretion, and may be conditioned upon such other and
further terms and conditions as the Agents, in their sole and exclusive
discretion, may require. No such termination shall take effect unless and until
confirmed in writing by the Agents, with the Consent of the Required Lenders.

 

5.

Waiver and Amendment Fee. In consideration of the Agents and the Lenders
entering into this Eighth Amendment, the Loan Parties shall pay to the
Administrative Agent, for the ratable benefit of each Lender executing this
Eighth Amendment, a waiver and amendment fee (the “Waiver and Amendment Fee”) in
the amount of $375,000.00. The Waiver and Amendment Fee shall be fully earned as
of the Eighth Amendment Effective Date, shall not be subject to refund or rebate
under any circumstance, and shall not be subject to reduction by way of

 

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setoff or counterclaim. The Waiver and Amendment Fee shall be payable in five
(5) consecutive monthly installments, each in the amount of $75,000.00, with the
first such monthly installment due on April 30, 2011, and each subsequent
installment due on the last day of each succeeding calendar month. The
Administrative Agent is hereby authorized to make a Revolving Credit Loan under
the Credit Agreement to pay each installment of the Waiver and Amendment Fee.
Any unpaid installment of the Waiver and Amendment Fee shall be accelerated and
be immediately due and payable in full upon the occurrence of any Default or
Event of Default after the Eighth Amendment Effective Date.

 

6. Preconditions to Effectiveness. This Eighth Amendment shall not become
effective unless and until, on or before April 26, 2011, each and all of the
following conditions have been satisfied, in each case to the satisfaction of
the Agents, in their sole and exclusive discretion exercised in good faith:

 

  a. The Lead Borrower, the other Borrowers, and the Facility Guarantors shall
have delivered to the Administrative Agent duly executed copies of this Eighth
Amendment.

 

  b. The Agents shall have received whatever documents and certificates as the
Agents or their counsel may reasonably request relating to the authorization of
the transactions contemplated by this Eighth Amendment, all in form and
substance reasonably satisfactory to the Agents and their counsel.

 

  c. The Lead Borrower, the Borrowers, and the Facility Guarantors shall have
delivered to the Administrative Agent such other and further documents as the
Administrative Agent reasonably may require and shall have identified prior to
the execution of this Eighth Amendment, in order to confirm and implement the
terms and conditions of this Eighth Amendment, including without limitation,
such corporate governance documentation for the Loan Parties confirming the
retention of FTI/Weinsten as the Chairman of the OSP and the creation of the
OSP.

 

  d. The Agents shall have confirmed receipt by the Lead Borrower of not less
than $10,500,000 in new equity from Michael Serruya, among others, on terms and
conditions acceptable to the Agents, with the consent of the Required Lenders,
as provided in that certain Purchase and Investment Agreement dated as of
April 21, 2011, a fully executed copy of which shall have been delivered to the
Administrative Agent.

 

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  e. The Agents shall have received a fully executed copy of the Waiver and
Sixth Amendment to Credit Agreement entered into by the Lead Borrower, the Loan
Parties, and Wilmington Trust FSB, as Administrative Agent, dated April 26,
2011, and that Waiver and Sixth Amendment shall be fully effective with all
conditions precedent contained therein having been satisfied or waived
simultaneously with the effectiveness of this Eighth Amendment.

 

  f. The Borrowers shall have reimbursed the Agents for all Credit Party
Expenses incurred by the Agents incidental to the Specified Default and the
negotiation and preparation of this Eighth Amendment and all documents,
instruments, and agreements incidental hereto or thereto. The Administrative
Agent is hereby authorized to make a Revolving Credit Loan under the Credit
Agreement to pay such Credit Party Expenses, and the Administrative Agent agrees
to do so upon satisfaction of the condition precedent set forth in Section 6(a)
above, the foregoing being deemed satisfaction of the condition precedent set
forth in this Section 6(e).

 

  g. No Default (other than the Specified Default) or Event of Default shall
exist.

 

  h. Except as set forth on Schedule 3.06 to the Credit Agreement and other than
as disclosed in filings with the SEC made by the Parent prior to the Eighth
Amendment Effective Date, there shall not be pending any litigation or other
proceeding, the result of which could reasonably be expected to have a Material
Adverse Effect.

 

7. Ratification of Loan Documents. No Claims against any Credit Party.

 

  a. Except as provided herein, all terms and conditions of the Credit Agreement
and of each of the other Loan Documents remain in full force and effect. Each
Loan Party hereby ratifies, confirms, and re-affirms all terms and provisions of
the Loan Documents.

 

  b. Each Loan Party hereby makes all representations, warranties, and covenants
set forth in the Loan Documents as of the date hereof (other than
representations, warranties and covenants that relate solely to an earlier
date). To the extent that any changes in any representations, warranties, and
covenants require any amendments to the schedules or exhibits to the Loan
Documents, such schedules and exhibits are hereby updated, as evidenced by any
supplemental schedules and exhibits (if any) annexed to this Eighth Amendment.

 

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  c. Each Loan Party represents and warrants to the Administrative Agent and
each Lender that as of the date of this Eighth Amendment after giving effect to
this Eighth Amendment, no Default (other than the Specified Default) or Event of
Default exists.

 

  d. Each Loan Party acknowledges and agrees that to its actual knowledge
(i) there is no basis nor set of facts on which any amount (or any portion
thereof) owed by any of the Loan Parties under any Loan Document could be
reduced, offset, waived, or forgiven, by rescission or otherwise; (ii) nor is
there any claim, counterclaim, off set, or defense (or other right, remedy, or
basis having a similar effect) available to any of the Loan Parties with regard
thereto; (iii) nor is there any basis on which the terms and conditions of any
of the Obligations could be claimed to be other than as stated on the written
instruments which evidence such Obligations.

 

  e. Each of the Loan Parties hereby acknowledges and agrees that it has no
offsets, defenses, claims, or counterclaims against the Agents, the Lenders, or
their respective parents, affiliates, predecessors, successors, or assigns, or
their officers, directors, employees, attorneys, or representatives, with
respect to the Obligations, and that if any of the Loan Parties now has, or ever
did have, any offsets, defenses, claims, or counterclaims against such Persons,
whether known or unknown, at law or in equity, from the beginning of the world
through this date and through the time of execution of this Eighth Amendment,
all of them are hereby expressly WAIVED, and each of the Loan Parties hereby
RELEASES such Persons from any liability therefor.

 

8. Acknowledgment of Obligations. The Loan Parties hereby acknowledge and agree
that the Loan Parties are unconditionally liable to the Credit Parties for the
following amounts which constitute a portion of the Obligations in accordance
with the terms of the Credit Agreement, as of the date hereof:

 

  a. For outstanding Credit Extensions:                                       
                      $58,701,907.99

 

  b. For all amounts now due, or hereafter coming due, to any Agent, any Lender
or any of their respective Affiliates with respect to cash management, ACH,
depository, investment, banker’s acceptance, letter of credit, Hedge Agreement,
or other banking or financial services provided by any Agent, any Lender or any
such Affiliate to any Loan Party.

 

  c.

For all interest heretofore or hereafter accruing under the Loan Documents, for
all fees heretofore or hereafter accruing under the Loan

 

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Documents, and for all Credit Party Expenses and other fees, costs, expenses,
and costs of collection heretofore or hereafter incurred by the Lenders, and any
other amounts due under, the Loan Documents, including, without limitation, all
interest, fees and expenses that accrue after the commencement of any case or
proceeding by or against any Loan Party under the Bankruptcy Code or any state,
federal or provincial bankruptcy, insolvency, receivership, or similar law,
whether or not allowed in such case or proceeding.

 

9. Miscellaneous.

 

  a. Capitalized terms used herein but not otherwise defined shall have the
meanings given to them in the Credit Agreement, as amended by this Eighth
Amendment.

 

  b. This Eighth Amendment may be executed in counterparts, each of which when
so executed and delivered shall be an original, and all of which together shall
constitute one agreement. This Eighth Amendment constitutes a Loan Document for
all purposes.

 

  c. This Eighth Amendment expresses the entire understanding of the parties
with respect to the transactions contemplated hereby. No prior negotiations or
discussions shall limit, modify, or otherwise affect the provisions hereof.

 

  d. Any determination that any provision of this Eighth Amendment or any
application hereof is invalid, illegal, or unenforceable in any respect and in
any instance shall not affect the validity, legality, or enforceability of such
provision in any other instance, or the validity, legality, or enforceability of
any other provisions of this Eighth Amendment.

 

  e. In connection with the interpretation of this Eighth Amendment and all
other documents, instruments, and agreements incidental hereto:

 

  i. All rights and obligations hereunder and thereunder, including matters of
construction, validity, and performance, shall be governed by and construed in
accordance with the law of The Commonwealth of Massachusetts and are intended to
take effect as sealed instruments.

 

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  ii. The captions of this Eighth Amendment are for convenience purposes only,
and shall not be used in construing the intent of the parties under this Eighth
Amendment.

 

  iii. In the event of any inconsistency between the provisions of this Eighth
Amendment and any of the other Loan Documents, the provisions of this Eighth
Amendment shall govern and control.

 

  f. Each Loan Party agrees that any suit for the enforcement of this Eighth
Amendment or any other Loan Document may be brought in the courts of the
Commonwealth of Massachusetts sitting in Boston, Massachusetts or any federal
court sitting therein as the Administrative Agent may elect in its sole
discretion and consents to the non-exclusive jurisdiction of such courts. Each
party to this Eighth Amendment hereby waives any objection which it may now or
hereafter have to the venue of any such suit or any such court or that such suit
is brought in an inconvenient forum and agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Eighth Amendment shall affect any right that any Credit Party
may otherwise have to bring any action or proceeding relating to this Eighth
Amendment against a Loan Party or its properties in the courts of any
jurisdiction.

 

  g. Each Loan Party agrees that any action commenced by any Loan Party
asserting any claim or counterclaim arising under or in connection with this
Eighth Amendment or any other Loan Document shall be brought solely in a court
of the Commonwealth of Massachusetts sitting in Boston, Massachusetts or any
federal court sitting therein as the Administrative Agent may elect in its sole
discretion and consents to the exclusive jurisdiction of such courts with
respect to any such action.

 

  h. The Agents, the Lenders, the Borrowers, and the Facility Guarantors have
prepared this Eighth Amendment and all documents, instruments, and agreements
incidental hereto with the aid and assistance of their respective counsel.
Accordingly, all of them shall be deemed to have been drafted by the Agents, the
Lenders, the Borrowers, and the Facility Guarantors and shall not be construed
against any party.

[Signatures Follow]

 

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IN WITNESS WHEREOF, the undersigned have caused this Eighth Amendment to be duly
executed under seal as of the date first set forth above.

 

AMERICAN APPAREL (USA), LLC (f/k/a AAI Acquisition LLC (successor-by-merger to
American Apparel, Inc.), as Lead Borrower and as a Borrower By:  

/s/ Dov Charney

Name:  

Dov Charney

Title:  

Chief Executive Officer

AMERICAN APPAREL RETAIL, INC., as a Borrower By:  

/s/ Dov Charney

Name:  

Dov Charney

Title:  

Chief Executive Officer

AMERICAN APPAREL DYEING & FINISHING, INC., as a Borrower By:  

/s/ Dov Charney

Name:  

Dov Charney

Title:  

Chief Executive Officer

KCL KNITTING, LLC, as a Borrower By:   American Apparel (USA), LLC, its sole
member   By:  

/s/ Dov Charney

  Name:  

Dov Charney

  Title:  

Chief Executive Officer

 

Signature Page to Waiver, Consent, and Eighth Amendment to Credit Agreement

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FRESH AIR FREIGHT, INC., as a Facility Guarantor By:  

/s/ Dov Charney

Name:  

Dov Charney

Title:  

CEO

AMERICAN APPAREL, INC. (f/k/a Endeavor Acquisition Corp.), as a Facility
Guarantor By:  

/s/ Thomas M. Casey

Name:  

Thomas M. Casey

Title:  

Acting President

 

Signature Page to Waiver, Consent, and Eighth Amendment to Credit Agreement

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BANK OF AMERICA, N.A. (successor by merger to LaSalle Business Credit, LLC, as
Agent for LaSalle Bank Midwest National Association, acting through its
division, LaSalle Retail Finance), as Administrative Agent, as Collateral Agent,
as Swingline Lender and as Lender By:  

/s/ David Vega

Name:  

David Vega

Title:  

Managing Director

BANK OF AMERICA, N.A. (successor by merger to LaSalle Bank National
Association), as Issuing Bank By:  

/s/ David Vega

Name:  

David Vega

Title:  

Managing Director

 

Signature Page to Waiver, Consent, and Eighth Amendment to Credit Agreement

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WELLS FARGO BANK, NATIONAL ASSOCIATION (successor by merger to Wells Fargo
Retail Finance, LLC), as Collateral Monitoring Agent and as a Lender By:  

/s/ Emily Abrahamson

Name:  

Emily Abrahamson

Title:  

Vice President

 

Signature Page to Waiver, Consent, and Eighth Amendment to Credit Agreement

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PNC BANK, as successor to NATIONAL CITY BANK, as further successor to NATIONAL
CITY BUSINESS CREDIT, INC., as a Lender By:  

/s/ Tom Buda

Name:  

Tom Buda

Title:  

Vice President

 

Signature Page to Waiver, Consent, and Eighth Amendment to Credit Agreement

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Exhibit M

FINANCIAL PERFORMANCE COVENANTS

1. Minimum Excess Availability. From and after the Eighth Amendment Effective
Date, the Loan Parties shall at all times maintain Excess Availability in an
amount not less than the greater of (a) fifteen percent (15%) of the lesser of
(i) the Borrowing Base and (ii) the Revolving Credit Ceiling, or
(b) $12,500,000.00.