Exhibit 10.1

 

AMENDMENT

TO

PURCHASE AGREEMENT

 

This Amendment to the Purchase Agreement (this “Amendment”) is made and entered
into as of October 16, 2012, by and between American Apparel, Inc., a Delaware
corporation (the “Company”), and Dov Charney (the “Purchaser”) and amends the
Purchase Agreement, dated as of April 27, 2011 (the “Purchase Agreement”),
between the Company and Purchaser (capitalized terms used but not defined herein
have the respective meanings set forth in the Purchase Agreement).

 

WHEREAS, pursuant to the Purchase Agreement, Purchaser has the right to receive
up to 20,415,800 shares of Common Stock pursuant to the Charney Anti-Dilution
Provision on the terms and subject to the conditions set forth in the Purchase
Agreement; and

 

WHEREAS, the Board of Directors of the Company has determined that it is in the
best interests of the Company and its stockholders, subject to the approval by
the requisite vote of the Company’s stockholders at the 2013 Annual Meeting of
the Company (the “Extension Approval”), to amend the Charney Anti-Dilution
Provision as set forth herein to further incentivize the Purchaser in his
continued service to the Company.

 

NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, mutual covenants and agreements set forth herein,
the parties hereto agree as follows:

 

SECTION 1.   AMENDMENTS AND OTHER PROVISIONS

 

1.1          Amendment to Section 4.3(d). The Purchase Agreement is hereby
amended as follows, effective as of the date hereof but with such amendments
being operative only if the Extension Approval is obtained, if such approval is
obtained, and then as if such amendments had been operative as of and from the
date of this Amendment:

 

(a)         Section 4.3(b) of the Purchase Agreement is hereby amended to
replace the reference in the first sentence thereof to “Within five business
days after the time a VWAP Target (as defined below) is satisfied” with “Within
five business days after the later of (i) the date of the Extension Approval and
(ii) the time a VWAP Target (as defined below) is satisfied” and to replace the
reference in the last sentence thereof to “as of the date the applicable VWAP
Target is satisfied” with “as of the date the applicable VWAP Target is
satisfied, subject, as applicable with respect to such VWAP Target, to the
Extension Approval having been obtained”.

 

(b)         Section 4.3(d)(i) of the Purchase Agreement is hereby amended by
replacing the reference therein to “April 15, 2013” with a reference to “April
15, 2014” and replacing the reference therein to “60 consecutive trading days”
with “30 consecutive trading days”.

 

(c)         Section 4.3(d)(ii) of the Purchase Agreement is hereby amended by
replacing the reference therein to the period of “April 16, 2013 to and
including April 15, 2014” with a reference to the period of “April 16, 2014 to
and including April 15, 2015” and replacing the reference therein to “60
consecutive trading days” with “30 consecutive trading days”.

 

 

 

  

Exhibit 10.1

 

(d)         Section 4.3(d)(iii) of the Purchase Agreement is hereby amended by
replacing the reference therein to the period of “April 16, 2014 to and
including April 15, 2015” with a reference to the period of “April 16, 2015 to
and including April 15, 2016” and replacing the reference therein to “60
consecutive trading days” with “30 consecutive trading days”.

 

1.2         Consequences of Failure to Obtain Extension Approval.
Notwithstanding anything to the contrary in this Amendment, in the event that
the Extension Approval is not obtained at the 2013 Annual Meeting of the
Company, the amendments to the Purchase Agreement contemplated by Section 1.1
hereof shall have no effect and Sections 4.3(b) and 4.3(d) of the Purchase
Agreement shall be unaffected by this Amendment.

 

SECTION 2.   REPRESENTATIONS AND WARRANTIES

 

2.1         Representations and Warranties of the Company. The Company hereby
represents and warrants to the Purchaser as follows:

 

(a)         The Company has the requisite corporate power and authority to
execute and deliver this Amendment, to perform its obligations under this
Amendment and to consummate the transactions contemplated hereby to which it is
a party.

 

(b)         This Amendment has been duly executed and delivered by the Company
and, assuming due authorization, execution and delivery of this Amendment by the
Purchaser, is a valid and binding obligation of the Company and is enforceable
by the Purchaser against the Company in accordance with its terms, subject, as
to enforcement, to (i) applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws now or hereinafter in effect affecting creditors’
rights generally and (ii) general principles of equity.

 

2.2         Representations and Warranties of the Purchaser. The Purchaser
hereby represents and warrants to the Company as follows:

 

(a)         The Purchaser has the requisite legal capacity and authority to
execute and deliver this Amendment, to perform his obligations under this
Amendment and to consummate the transactions contemplated hereby to which he is
a party.

 

(b)         This Amendment has been duly executed and delivered by the Purchaser
and, assuming due authorization, execution and delivery of this Amendment by the
Company, is a valid and binding obligation of the Purchaser and is enforceable
by the Company against the Purchaser in accordance with its terms, subject, as
to enforcement, to (i) applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws now or hereinafter in effect affecting creditors’
rights generally and (ii) general principles of equity.

 

 

 

 

Exhibit 10.1

 

SECTION 3.   MISCELLANEOUS

 

3.1         Effect of Amendment. Except as expressly provided in this Amendment,
all of the terms, covenants and other provisions of the Purchase Agreement shall
continue to be in full force and effect in accordance with their respective
terms. After the date hereof, all references to the Purchase Agreement (whether
in the Purchase Agreement or this Amendment) shall refer to the Purchase
Agreement as amended by this Amendment.

 

3.2         Counterparts. This Amendment may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to each of the other parties, it being understood that
all parties need not sign the same counterpart.

 

3.3         Entire Agreement. This Agreement, the Amendment and all other
documents required to be delivered pursuant to the Agreement or this Amendment
constitute the entire agreement among the parties with respect to the subject
matter hereof and thereof and supersede all prior documents, agreements and
understandings, both written and verbal, among the parties with respect to the
subject matter hereof and thereof and the transactions contemplated hereby and
thereby.

 

3.4         GOVERNING LAW.  This AMENDMENT shall be governed by and construed in
accordance with CONTRACTS MADE AND TO BE PERFORMED IN the STATE OF Delaware.

 

(Signature pages follow)

 

 

 

 

IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment as of
the date first above written.

 

  AMERICAN APPAREL, INC.       By:  /s/ Glenn A. Weinman   Name:  Glenn A.
Weinman   Title: Executive Vice President, General Counsel         /s/ Dov
Charney   Dov Charney