Exhibit 10.3

EXECUTED VERSION
                                        

September 28, 2014
David Glazek, Board Member
American Apparel, Inc.
747 Warehouse St.
Los Angeles, CA 90021

Dear Mr. Glazek:
Dated as of September 28, 2014 (the “Effective Date”), this letter agreement
(this “Agreement”) hereby amends and restates that certain engagement letter
agreement, dated September 2, 2014, among Alvarez & Marsal North America, LLC
(“A&M”) and American Apparel, Inc., and its assigns and successors (the
“Company”), including the scope of the services to be performed and the basis of
compensation for those services. Upon execution of this letter by each of the
parties below, this letter will constitute an agreement between the Company and
A&M.
1.
Description of Services

(a)
Officers. In connection with this engagement, A&M shall make available to the
Company:

(i)
Scott Brubaker to serve as the Interim Chief Executive Officer (the “CEO”)1; and

(ii)
Upon the mutual agreement of A&M and the Company, A&M will provide additional
employees of A&M and/or its affiliates and wholly-owned subsidiaries
(“Additional Personnel”) as required (collectively, with the CEO, the
“Engagement Personnel”), to assist the CEO in the execution of the duties set
forth more fully herein.

(b)
Duties of CEO. The CEO shall act as the Interim Chief Executive Officer for the
Company and oversee the Company’s management team. Without limiting the
generality of the foregoing, such duties shall include the following:

(i)
The CEO shall perform those duties that are customary for an individual working
in the capacity of a chief executive officer;

(ii)
The CEO and certain Additional Personnel shall assist in the identification of
cost reduction and operations improvement opportunities;

(iii)
The CEO and certain Additional Personnel shall assist in developing for the
Boards' review possible strategic alternatives for maximizing the enterprise
value of the Company's various business lines; and

1 A&M will provide advisory services until such time as the Board appoints the
CEO.

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(iv)
The CEO and certain Additional Personnel shall perform such other services as
requested or directed by the Board or other Company personnel as authorized by

(v)
the Board, and agreed to by A&M that is not duplicative of work others are
performing for the Company.

(c)
The Engagement Personnel shall report to the Board and, at the request of the
Board, will make recommendations to and consult with the Board.

(d)
The Engagement Personnel will continue to be employed by A&M and, while
rendering services to the Company, will continue to work with other personnel at
A&M in connection with unrelated matters that will not unduly interfere with the
services rendered by the Engagement Personnel pursuant to this Agreement. With
respect to the Company, however, the Engagement Personnel shall operate under
the direction of the Board and A&M shall have no liability to the Company for
any acts or omissions of the Engagement Personnel related to the performance or
non-performance of services at the direction of the Board and consistent with
the requirements of the Engagement and this Agreement.

(e)
In connection with the services to be provided hereunder, from time to time A&M
may utilize the services of employees of its affiliates, subsidiaries and
independent contractors as Engagement Personnel. Such affiliates and
subsidiaries are wholly owned by A&M’s parent company and employees.

2.
Information Provided by Company and Forward Looking Statements. The Company
shall use all reasonable efforts to: (i) provide the Engagement Personnel with
access to management and other representatives of the Company; and (ii) to
furnish all data, material, and other information concerning the business,
assets, liabilities, operations, cash flows, properties, financial condition and
prospects of the Company that Engagement Personnel reasonably request in
connection with the services to be provided to the Company. The Engagement
Personnel shall rely, without further independent verification, on the accuracy
and completeness of all publicly available information and information that is
furnished by or on behalf of the Company and otherwise reviewed by Engagement
Personnel in connection with the services performed for the Company. The Company
acknowledges and agrees that the Engagement Personnel are not responsible for
the accuracy or completeness of such information and shall not be responsible
for any inaccuracies or omissions therein. A&M and Engagement Personnel are
under no obligation to update data submitted to them or to review any other
areas unless specifically requested by the Board to do so.

You understand that the services to be rendered by the Engagement Personnel may
include the preparation of projections and other forward-looking statements, and
numerous factors can affect the actual results of the Company’s operations,
which may materially and adversely differ from those projections. In addition,
Engagement Personnel will be relying on information provided by the Company in
the preparation of those projections and other forward-looking statements.
3.
Limitation of Duties. Neither A&M, nor the Engagement Personnel make any
representations or guarantees that, inter alia, (i) an appropriate restructuring
proposal or strategic alternative can be formulated for the Company, (ii) any
restructuring proposal or strategic alternative presented to the Company’s
management or the Board will be more successful than all other possible
restructuring proposals or strategic alternatives, (iii) restructuring is the
best course of action for the Company, or (iv) if formulated, that any proposed
restructuring plan or strategic alternative will be accepted by any of the
Company’s creditors, shareholders and other constituents. Further, neither A&M,

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nor the Engagement Personnel, assume any responsibility for the Company’s
decision to pursue, or not pursue any business strategy, or to effect, or not to
effect any transaction. The Engagement Personnel shall be responsible for
implementation only of the restructuring proposal or alternative approved by the
Board and only to the extent and in the manner authorized and directed by the
Board.

4.
Compensation.

(a)
A&M will receive a fixed monthly fee for the services of Scott Brubaker as CEO
and certain Additional Personnel to support the Duties of CEO described in
paragraph 1.(b) herein.

Months 1-3         $250,000 per month
Months 3-6        $150,000 per month
(b)
Upon mutual agreement of A&M and the Company, A&M will receive fees for the
services of any additional Engagement Personnel based on the following hourly
rates:

Managing Directors                $725-925
Directors                      $525-725
Analysts/Associates         $325-525
    
Such rates shall be subject to adjustment annually at such time as A&M adjusts
its rates generally.

(c)
In addition, A&M will be reimbursed for its reasonable out-of-pocket expenses
incurred in connection with this assignment, such as travel, lodging,
duplicating, messenger and telephone charges. All fees will be billed and
payable on a monthly basis in advance. All expenses will be billed and payable
on a monthly basis or, at A&M’s discretion, more frequently. Invoices are due
and payable upon receipt.

(d)
A&M is in receipt of a retainer in the amount of $25,000, which shall be
credited against any amounts due at the termination of this engagement and
returned upon the satisfaction of all obligations hereunder.

(e)
Further, the Company recognizes that A&M intends to seek an incentive
compensation component for its services hereunder, in addition to the
compensation set forth above, based on the contribution made by A&M during this
assignment. To establish such incentive compensation, A&M and the Company agree
they will work in good faith to reach agreement on the amount of such incentive
compensation at the conclusion of the engagement, or such other time as the
parties mutually agree. Such compensation shall be payable to A&M upon approval
by the Board in its sole discretion.

5.
Termination.

(a)
This Agreement will apply from the commencement of the services referred to in
Section 1 and may be terminated with immediate effect by either party without
cause by written notice to the other party.

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(b)
A&M normally does not withdraw from an engagement unless the Company
misrepresents or fails to disclose material facts, fails to pay fees or
expenses, or makes it unethical or unreasonably difficult for A&M to continue
performance of the engagement, or other just cause exists.    

(c)
On termination of the Agreement, any fees and expenses due to A&M shall be
remitted promptly (including fees and expenses that accrued prior to but are
invoiced subsequent to such termination).   

(d)
The provisions of this Agreement that give the parties rights or obligations
beyond its termination shall survive and continue to bind the parties.

6.
No Audit. Company acknowledges and agrees that A&M and Engagement Personnel are
not being requested to perform an audit, review or compilation, or any other
type of financial statement reporting engagement that is subject to the rules of
the AICPA, SEC or other state or national professional or regulatory body.

7.
No Third Party Beneficiary. The Company acknowledges that all advice (written or
oral) provided by A&M and the Engagement Personnel to the Company in connection
with this engagement is intended solely for the benefit and use of the Company
(limited to its Board and management) in considering the matters to which this
engagement relates. The Company agrees that no such advice shall be used for any
other purpose or reproduced, disseminated, quoted or referred to at any time in
any manner or for any purpose other than accomplishing the tasks referred to
herein without A&M’s prior approval (which shall not be unreasonably withheld),
except as required by law.

8.
Conflicts. A&M is not currently aware of any relationship that would create a
conflict of interest with the Company or those parties-in-interest of which you
have made us aware. Because A&M and its affiliates and subsidiaries comprise a
consulting firm (the “Firm”) that serves clients on an international basis in
numerous cases, both in and out of court, it is possible that the Firm may have
rendered or will render services to, or have business associations with, other
entities or people which had or have or may have relationships with the Company,
including creditors of the Company. The Firm will not be prevented or restricted
by virtue of providing the services under this Agreement from providing services
to other entities or individuals, including entities or individuals whose
interests may be in competition or conflict with the Company’s, provided the
Firm makes appropriate arrangements to ensure that the confidentiality of
information is maintained.

9.
Confidentiality/Non-Solicitation.

A&M and Engagement Personnel shall keep as confidential all non-public
information received from the Company in conjunction with this engagement,
except: (i) as requested by the Company or its legal counsel; (ii) as required
by legal proceedings; or (iii) as reasonably required in the performance of this
engagement. All obligations as to non-disclosure shall cease as to any part of
such information to the extent that such information is, or becomes, public
other than as a result of a breach of this provision. The Company, on behalf of
itself and its subsidiaries and affiliates and any person which may acquire all
or substantially all of its assets agrees that, until two (2) years subsequent
to the termination of this engagement, it will not solicit, recruit, hire or
otherwise engage any employee of A&M or any of its affiliates who worked on this
engagement while employed by A&M or its affiliates (“Solicited Person”). Should
the Company or any of its

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subsidiaries or affiliates or any person who acquires all or substantially all
of its assets extend an offer of employment to or otherwise engage any Solicited
Person and should such offer be accepted, A&M shall be entitled to a fee from
the party extending such offer equal to the Solicited Person’s hourly client
billing rate at the time of the offer multiplied by 4,000 hours for a Managing
Director, 3,000 hours for a Senior Director and 2,000 hours for any other A&M
employee. The Company acknowledges and agrees that this fee fairly represents
the loss that A&M will suffer if the Company breaches this provision. The fee
shall be payable at the time of the Solicited Person’s acceptance of employment
or engagement.
10.
Indemnification/Limitations on Liability. The Company shall indemnify the
Engagement Personnel acting as officers (the “Indemnified Professionals”) to the
same extent as the most favorable indemnification it extends to its officers or
directors, whether under the Company’s bylaws, its certificate of incorporation,
by contract or otherwise, and no reduction or termination in any of the benefits
provided under any such indemnities shall affect the benefits provided to the
Indemnified Professionals. The Indemnified Professionals shall be covered as
officers under the Company’s existing director and officer liability insurance
policy. As a condition of A&M accepting this engagement, a Certificate of
Insurance evidencing such coverage shall be furnished to A&M prior to the
effective date of this Agreement. The Company shall give thirty (30) days’ prior
written notice to A&M of cancellation, non-renewal, or material change in
coverage, scope, or amount of such director and officer liability policy. The
Company shall also maintain such insurance coverage for the Indemnified
Professionals for a period of not less than six years following the date of the
termination of the Indemnified Professionals’ services hereunder. The provisions
of this section are in the nature of contractual obligations and no change in
applicable law or the Company’s charter, bylaws or other organizational
documents or policies shall affect the Indemnified Professionals’ rights
hereunder. The attached indemnity and limitation on liability provisions are
incorporated herein and the termination of this agreement or the engagement
shall not affect those provisions, which shall remain in full force and effect.

11.
Miscellaneous. This Agreement (together with the attached indemnity provisions),
including, without limitation, the construction and interpretation of thereof
and all claims, controversies and disputes arising under or relating thereto,
shall be governed and construed in accordance with the laws of the State of New
York, without regard to principles of conflict of law that would defer to the
laws of another jurisdiction. The Company and A&M agree to waive trial by jury
in any action, proceeding or counterclaim brought by or on behalf of the parties
hereto with respect to any matter relating to or arising out of the engagement
or the performance or non-performance of A&M hereunder. The Company and A&M
agree, to the extent permitted by applicable law, that any Federal Court sitting
within the Southern District of New York shall have exclusive jurisdiction over
any litigation arising out of this Agreement; to submit to the personal
jurisdiction of the Courts of the United States District Court for the Southern
District of New York; and to waive any and all personal rights under the law of
any jurisdiction to object on any basis (including, without limitation,
inconvenience of forum) to jurisdiction or venue within the State of New York
for any litigation arising in connection with this Agreement.

This Agreement shall be binding upon A&M and the Company, their respective
heirs, successors, and assignees, and any heir, successor, or assignee of a
substantial portion of A&M’s or the Company’s respective businesses and/or
assets, including any Chapter 11 Trustee. This Agreement incorporates the entire
understanding of the parties with respect to the subject matter hereof and may
not be amended or modified except in writing executed by the Company and A&M.
Notwithstanding anything herein to the contrary, A&M may reference or list the
Company’s name

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and/or logo and/or a general description of the services in A&M’s marketing
materials, including, without limitation, on A&M’s website.

If the foregoing is acceptable to you, kindly sign the enclosed copy to
acknowledge your agreement with its terms.
Very truly yours,
Alvarez & Marsal North America, LLC
By:    /s/ Scott Brubaker                    
Scott Brubaker
Managing Director

Accepted and agreed:
American Apparel, Inc.
By:     /s/ Allan Mayer                
Allan Mayer
Co-Chairman of the Board

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INDEMNIFICATION AND LIMITATION ON LIABILITY AGREEMENT

This indemnification and limitation on liability agreement is made part of an
agreement, dated September 28, 2014 (which together with any renewals,
modifications or extensions thereof, is herein referred to as the "Agreement")
by and between Alvarez & Marsal North America, LLC ("A&M”) and American Apparel,
Inc. (the “Company”), for services to be rendered to the Company by A&M.

A.    The Company agrees to indemnify and hold harmless each of A&M, its
affiliates and their respective shareholders, members, managers, employees,
agents, representatives and subcontractors (each, an "Indemnified Party" and
collectively, the "Indemnified Parties") against any and all losses, claims,
damages, liabilities, penalties, obligations and expenses, including the costs
for counsel or others (including employees of A&M, based on their then current
hourly billing rates) in investigating, preparing or defending any action or
claim, whether or not in connection with litigation in which any Indemnified
Party is a party, or enforcing the Agreement (including these indemnity
provisions), as and when incurred, caused by, relating to, based upon or arising
out of (directly or indirectly) the Indemnified Parties' acceptance of or the
performance or nonperformance of their obligations under the Agreement;
provided, however, such indemnity shall not apply to any such loss, claim,
damage, liability or expense to the extent it is found in a final judgment by a
court of competent jurisdiction (not subject to further appeal) to have resulted
primarily and directly from such Indemnified Party's gross negligence or willful
misconduct. The Company also agrees that (a) no Indemnified Party shall have any
liability (whether direct or indirect, in contract or tort or otherwise) to the
Company for or in connection with the engagement of A&M, except to the extent
that any such liability for losses, claims, damages, liabilities or expenses are
found in a final judgment by a court of competent jurisdiction (not subject to
further appeal) to have resulted primarily and directly from such Indemnified
Party's gross negligence or willful misconduct and (b) in no event will any
Indemnified Party have any liability to the Company for special, consequential,
incidental or exemplary damages or loss (nor any lost profits, savings or
business opportunity). The Company further agrees that it will not, without the
prior consent of an Indemnified Party, settle or compromise or consent to the
entry of any judgment in any pending or threatened claim, action, suit or
proceeding in respect of which such Indemnified Party seeks indemnification
hereunder (whether or not such Indemnified Party is an actual party to such
claim, action, suit or proceedings) unless such settlement, compromise or
consent includes an unconditional release of such Indemnified Party from all
liabilities arising out of such claim, action, suit or proceeding.

B.    These indemnification provisions shall be in addition to any liability
which the Company may otherwise have to the Indemnified Parties. In the event
that, at any time whether before or after termination of the engagement or the
Agreement, as a result of or in connection with the Agreement or A&M’s and its
personnel’s role under the Agreement, A&M or any Indemnified Party is required
to produce any of its personnel (including former employees) for examination,
deposition or other written, recorded or oral presentation, or A&M or any of its
personnel (including former employees) or any other Indemnified Party is
required to produce or otherwise review, compile, submit, duplicate, search for,
organize or report on any material within such Indemnified Party’s possession or
control pursuant to a subpoena or other legal (including administrative)
process, the Company will reimburse the Indemnified Party for its out of pocket
expenses, including the reasonable fees and expenses of its counsel, and will
compensate the Indemnified Party for the time expended by its personnel based on
such personnel’s then current hourly rate.

C.    If any action, proceeding or investigation is commenced to which any
Indemnified Party proposes to demand indemnification hereunder, such Indemnified
Party will notify the Company with reasonable

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promptness; provided, however, that any failure by such Indemnified Party to
notify the Company will not relieve the Company from its obligations hereunder,
except to the extent that such failure shall have actually prejudiced the
defense of such action. The Company shall promptly pay expenses reasonably
incurred by any Indemnified Party in defending, participating in, or settling
any action, proceeding or investigation in which such Indemnified Party is a
party or is threatened to be made a party or otherwise is participating in by
reason of the engagement under the Agreement, upon submission of invoices
therefor, whether in advance of the final disposition of such action,
proceeding, or investigation or otherwise. Each Indemnified Party hereby
undertakes, and the Company hereby accepts its undertaking, to repay any and all
such amounts so advanced if it shall ultimately be determined that such
Indemnified Party is not entitled to be indemnified therefor. If any such
action, proceeding or investigation in which an Indemnified Party is a party is
also against the Company, the Company may, in lieu of advancing the expenses of
separate counsel for such Indemnified Party, provide such Indemnified Party with
legal representation by the same counsel who represents the Company, provided
such counsel is reasonably satisfactory to such Indemnified Party, at no cost to
such Indemnified Party; provided, however, that if such counsel or counsel to
the Indemnified Party shall determine that due to the existence of actual or
potential conflicts of interest between such Indemnified Party and the Company
such counsel is unable to represent both the Indemnified Party and the Company,
then the Indemnified Party shall be entitled to use separate counsel of its own
choice, and the Company shall promptly advance its reasonable expenses of such
separate counsel upon submission of invoices therefor. Nothing herein shall
prevent an Indemnified Party from using separate counsel of its own choice at
its own expense. The Company will be liable for any settlement of any claim
against an Indemnified Party made with the Company's written consent, which
consent shall not be unreasonably withheld.

D.    In order to provide for just and equitable contribution if a claim for
indemnification pursuant to these indemnification provisions is made but it is
found in a final judgment by a court of competent jurisdiction (not subject to
further appeal) that such indemnification may not be enforced in such case, even
though the express provisions hereof provide for indemnification, then the
relative fault of the Company, on the one hand, and the Indemnified Parties, on
the other hand, in connection with the statements, acts or omissions which
resulted in the losses, claims, damages, liabilities and costs giving rise to
the indemnification claim and other relevant equitable considerations shall be
considered; and further provided that in no event will the Indemnified Parties'
aggregate contribution for all losses, claims, damages, liabilities and expenses
with respect to which contribution is available hereunder exceed the amount of
fees actually received by the Indemnified Parties pursuant to the Agreement. No
person found liable for a fraudulent misrepresentation shall be entitled to
contribution hereunder from any person who is not also found liable for such
fraudulent misrepresentation.

E.    In the event the Company and A&M seek judicial approval for the assumption
of the Agreement or authorization to enter into a new engagement agreement
pursuant to either of which A&M would continue to be engaged by the Company, the
Company shall promptly pay expenses reasonably incurred by the Indemnified
Parties, including attorneys' fees and expenses, in connection with any motion,
action or claim made either in support of or in opposition to any such retention
or authorization, whether in advance of or following any judicial disposition of
such motion, action or claim, promptly upon submission of invoices therefor and
regardless of whether such retention or authorization is approved by any court.
The Company will also promptly pay the Indemnified Parties for any expenses
reasonably incurred by them, including attorneys' fees and expenses, in seeking
payment of all amounts owed it under the Agreement (or any new engagement
agreement) whether through submission of a fee application or in any other
manner, without offset, recoupment or counterclaim, whether as a secured claim,
an administrative expense claim, an unsecured claim, a prepetition claim or a
postpetition claim.

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F.    Neither termination of the Agreement nor termination of A&M's engagement
nor the filing of a petition under Chapter 7 or 11 of the United States
Bankruptcy Code (nor the conversion of an existing case to one under a different
chapter) shall affect these indemnification provisions, which shall hereafter
remain operative and in full force and effect.

G.    The rights provided herein shall not be deemed exclusive of any other
rights to which the Indemnified Parties may be entitled under the certificate of
incorporation or bylaws of the Company, any other agreements, any vote of
stockholders or disinterested directors of the Company, any applicable law or
otherwise.

AMERICAN APPAREL, INC.

By: /s/ Allan Mayer
       
ALVAREZ & MARSAL NORTH AMERICA, LLC

By: /s/ Scott Brubaker