Document:

Exhibit 10.2

 Exhibit 10.2 
 PURCHASE AGREEMENT 
 This Purchase Agreement (this
“Agreement”) is made as of April 27, 2011, between American Apparel, Inc, a Delaware corporation (the “Company”), and Dov Charney, an individual (the “Purchaser”). 

WHEREAS, the Company desires to issue and sell to the Purchaser, and the Purchaser desires to purchase from the Company, an aggregate of
777,778 shares of the Company’s common stock, par value $.0001 per share (the “Common Stock” and, such shares, the “Initial Shares”), at a price of $0.90 per share (the “Per Share Price”), for
aggregate cash consideration of $700,000.00, on the terms and conditions set forth in this Agreement; 
 WHEREAS, as a condition
to the Purchaser purchasing the Initial Shares, the Purchaser is requiring that the Company grant to the Purchaser the Purchase Right (as defined below) to purchase an aggregate of 1,555,556 additional shares of Common Stock at the Per Share Price,
subject to adjustment as described herein (such shares, the “Purchase Right Shares”) on the terms and conditions set forth in this Agreement; 
 WHEREAS, the Company has entered into a Purchase and Investment Agreement, dated as of April 21, 2011 (the “Other Purchase Agreement”), with several purchasers (collectively, the
“Other Purchasers”) pursuant to which (i) the Other Purchasers have agreed to purchase an aggregate of 15,776,506 shares of Common Stock (the “Other Purchaser Initial Shares”), at the Per Share Price, for
aggregate cash consideration of $14,198,856 and (ii) as a condition to the Other Purchasers purchasing such Other Purchaser Initial Shares, the Company granted the Other Purchasers the right (the “Other Purchaser Purchase
Right”) to purchase an aggregate of 27,443,173 additional shares of Common Stock (the “Other Purchaser Purchase Right Shares” and, together with the Other Purchaser Initial Shares, the “Other Purchaser
Shares”), subject to adjustment as described in the Other Purchase Agreement; 
 WHEREAS, as a condition to the Other
Purchasers purchasing the Other Purchaser Initial Shares, the Other Purchasers also required that the Purchaser be provided a right to receive additional shares as anti-dilution protection from dilution resulting from issuance of a portion of the
Other Purchaser Initial Shares and the Other Purchaser Purchase Right Shares if the market price of the Common Stock meets certain thresholds, on the terms and conditions described herein (such shares, the “Anti-Dilution Shares”
and, together with the Initial Shares and the Purchase Right Shares, the “Shares”); and 
 WHEREAS, the Shares
are being offered, and, as applicable, sold and issued to the Purchaser, on the terms and subject to the conditions set forth herein, without registration under the Securities Act of 1933, as amended (the “Securities Act”), in
reliance on an exemption from the registration requirements under the Securities Act. 
 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. PURCHASE AND SALE OF THE INITIAL SHARES. 
 1.1
Agreement to Purchase and Sell the Initial Shares. Subject to the terms and conditions set forth in this Agreement, at the Closing (as defined below), the Company shall sell to the 

  
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Purchaser, and the Purchaser shall purchase from the Company, the Initial Shares for an aggregate amount in cash equal to Seven Hundred Thousand United States Dollars ($700,000.00) (the
“Purchase Price” and, the transactions described in this Section 1.1, the “Sale”). 
 1.2
Closing. Subject to the satisfaction or waiver of the applicable conditions set forth in Section 5 hereof, the closing of the Sale (the “Closing”) shall occur as promptly as practicable following the receipt of the
Initial Share Stockholder Approval (as defined below), at the offices of Skadden, Arps, Slate, Meagher & Flom LLP, 300 South Grand Avenue, Suite 3400, Los Angeles, California 90071, or such other date or place that the Company and the
Purchaser shall agree in writing (the date of the Closing under this Agreement is hereinafter referred to as the “Closing Date”). 
 1.3 Delivery and Payment. 
 (a) Within five business days after the
Closing, the Company shall deliver or cause to be delivered to the Purchaser a stock certificate or certificates evidencing, in the aggregate, the number of Initial Shares with the legend required by Section 6.2 hereof, such stock
certificate(s) to be in the denomination(s) and issued in the name(s) specified to the Company by the Purchaser. Notwithstanding the actual delivery date of the certificate(s), the name(s) specified to the Company by the Purchaser shall for all
purposes be the registered beneficial owner(s) of such shares as of the Closing. 
 (b) At or prior to the Closing, the
Purchaser shall deliver or cause to be delivered to the Company the Purchase Price, either by check or by wire transfer of immediately available funds to the account designated by the Company. 

SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY 
 The Company hereby represents and warrants to the Purchaser as follows: 
 2.1
Issuance and Delivery of Shares. The Initial Shares have been duly authorized, subject to receipt of the Stockholder Approval (as defined below), and, when issued by the Company in the Sale, in compliance with the provisions of this
Agreement, (a) shall be free and clear of any and all liens, security interests, options, claims, encumbrances or restrictions (collectively, “Liens”), except for such restrictions on transfer or ownership as set forth in this
Agreement or otherwise imposed by applicable federal or state securities laws or by the Purchaser, (b) shall have been duly authorized and validly issued, (c) shall be fully paid and nonassessable and (d) shall have been issued in
compliance with all applicable federal and state securities laws. The Purchase Right Shares have been duly authorized, subject to receipt of the Stockholder Approval, and, when issued by the Company pursuant to the Purchase Right in compliance with
the provisions of this Agreement, (a) shall be free and clear of any and all Liens, except for such restrictions on transfer or ownership as set forth in this Agreement or otherwise imposed by applicable federal or state securities laws or by
the Purchaser, (b) shall have been duly authorized and validly issued, (c) shall be fully paid and nonassessable and (d) shall have been issued in compliance with all applicable federal and state securities laws. The Anti-Dilution
Shares have been duly authorized, subject to receipt of the Stockholder Approval, and, when issued by the Company pursuant to the Charney Anti-Dilution Provision (as defined below) in compliance with the provisions of this Agreement, (a) shall
be free and clear of any and all Liens, except for such restrictions on transfer or ownership as set forth in this Agreement or otherwise imposed by applicable federal or state securities laws or by the Purchaser, (b) shall have been duly
authorized and validly issued, (c) shall be fully paid and nonassessable and (d) shall have been issued in compliance with all applicable federal and state securities laws. The issuance and delivery of the Shares are not subject to any
preemptive or similar rights, except as described in this Agreement and provided that Lion/Hollywood L.L.C. (“Lion”) has 

  
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certain anti-dilution rights under Section 5.14(b) of the Credit Agreement, dated as of March 13, 2009, as it may be amended, amended and restated, supplemented or otherwise modified
from time to time (the “Credit Agreement”), among the Company, certain subsidiaries of the Company as facility guarantors, Wilmington Trust FSB, in its capacity as administrative agent and in its capacity as collateral agent
thereunder, Lion Capital (Americas) Inc., as a lender, and Lion, as a lender, and the other lenders from time to time party thereto. 
 2.2 Authorization; Validity of Agreement; Company Action. The Company has the requisite corporate power and authority to execute and deliver this Agreement and to perform its obligations under this
Agreement and to consummate the Transactions (as defined below), subject to receipt of the Stockholder Approval. The execution and delivery by the Company of this Agreement and the consummation by the Company of the Transactions have been duly
authorized by, and this Agreement and the Transactions have been validly approved by, the requisite vote of the Company’s Board of Directors and Audit Committee, subject to receipt of the Stockholder Approval. The Company has reserved for
issuance, or shall have reserved for issuance prior to the Initial Expiration Date (as defined below), subject to receipt of the Stockholder Approval, the Purchase Right Shares and the Anti-Dilution Shares. This Agreement has been duly executed and
delivered by the Company and, assuming due authorization, execution and delivery of this Agreement by the Purchaser and receipt of the Stockholder Approval, is a valid and binding obligation of the Company enforceable 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. As used herein, (a) “Stockholder Approval” means the requisite approval by the holders of the Common Stock under the NYSE Amex Company Guide, the Delaware General Corporation Law and the Company’s organizational
documents, as applicable, of (i) (x) the issuance of the Initial Shares (the “Initial Share Stockholder Approval”) and (y) the grant of the Charney Anti-Dilution Provision and the issuance of the Anti-Dilution Shares,
(ii) an amendment to the Company’s Certificate of Incorporation to increase the number of authorized shares of Common Stock in a number sufficient to include the Purchase Right Shares initially issuable pursuant to the Purchase Right, the
Anti-Dilution Shares and the Other Purchaser Purchase Right Shares initially issuable under the Other Purchase Agreement, and (iii) the issuance of the Purchase Right Shares and the issuance of the Other Purchaser Purchase Right Shares; and
(b) “Transactions” means the Sale, the issuance of the Initial Shares, the entering into and granting of the Purchase Right, the issuance of the Purchase Right Shares, including any Additional Shares (as defined below), and the
granting of the Charney Anti-Dilution Provision and the issuance of the Anti-Dilution Shares. 
 2.3 Consents and
Approvals. Assuming the accuracy of the representations and warranties of the Purchaser set forth in Section 3 hereof, no filing with, or authorization, approval, consent, license, order, registration, qualification or decree of, any court
or any federal, state, local or other governmental or regulatory authority, agency or body, court or arbitrator (each, a “Governmental Authority”) or third party is necessary or required by or with respect to the Company for the
execution by the Company of this Agreement, the performance by the Company of its obligations under this Agreement or the consummation by the Company of the Transactions, other than the Stockholder Approval. 

2.4 No Conflict. None of the execution, delivery or performance by the Company of this Agreement nor the consummation by the
Company of the Transactions, subject to receipt of the Stockholder Approval, will conflict with, violate, constitute a breach of or a default under or pursuant to (i) the Company’s or its subsidiaries’ organizational documents,
(ii) any bond, debenture, note, loan or other evidence of indebtedness, indenture, mortgage, deed of trust, lease or any other agreement or instrument (collectively, “Applicable Contracts”) to which the Company or any of its
subsidiaries is a 

  
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party or by which it is bound, or (iii) any federal, state or local law, or any judgment, decree, rule, regulation, order, writ, determination, award or injunction (collectively,
“Applicable Law”) binding upon the Company or its subsidiaries, except in the case of clauses (ii) and (iii) as would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the
business, condition (financial or otherwise), operations, assets or liabilities of the Company and its subsidiaries, taken as a whole, or enjoin, prevent or materially delay the consummation of the Transactions by the Company (collectively, a
“Material Adverse Effect”). 
 2.5 No Proceedings. There is no action, claim, suit, demand, hearing,
notice of violation or deficiency, or proceeding pending or, to the Company’s knowledge, threatened against the Company or any of its subsidiaries by Governmental Authorities or any third party that would be reasonably likely, individually or
in the aggregate, to enjoin, prevent or materially delay the consummation by the Company of the Transactions. 
 2.6 No
Solicitation; No Integration. Neither the Company nor any of its subsidiaries, nor any person acting on its or their behalf, (i) has engaged in any form of general solicitation or general advertising (within the meaning of Regulation D
under the Securities Act) in connection with the offer or sale of the Shares, (ii) has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under any circumstances that would require
registration of the Shares under the Securities Act or (iii) other than the transactions contemplated by the Purchase Agreement, dated as of March 24, 2011, between the Company and the Purchaser, and the Other Purchase Agreement (together,
the “Prior Purchase Agreements”), has issued any securities which would be integrated with the sale of the Shares to the Purchaser for purposes of the Securities Act or of any applicable stockholder approval provisions, including,
without limitation, under the rules and regulations of any exchange or automated quotation system on which any of the securities of the Company are listed or designated, nor will the Company or any of its subsidiaries or affiliates take any action
or steps that would require registration of any of the Shares under the Securities Act or cause the offering of the Shares to be integrated with other offerings (other than the transactions contemplated by the Prior Purchase Agreements). Assuming
the accuracy of the representations and warranties of the Purchaser in Section 3 of this Agreement, the offer and sale of the Shares by the Company to the Purchaser pursuant to this Agreement will be exempt from the registration requirements of
the Securities Act. 
 2.7 No Other Representations. Except for the representations and warranties made by the Company
that are contained in this Section 2, none of the Company, or any of its officers, directors, employees, stockholders, affiliates, agents, advisors or other representatives, or any other person or entity acting on behalf of the Company, makes
any representations or warranties, express or implied, and the Company hereby expressly disclaims any other representations or warranties made with respect to the Company or its subsidiaries or affiliates, the Shares or the Transactions. 

SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER 
 The Purchaser represents and warrants to the Company as follows: 
 3.1
Authority. The Purchaser has the requisite legal capacity and authority to execute and deliver this Agreement, to perform his obligations under this Agreement and to consummate the Transactions. This Agreement has been duly executed and
delivered by the Purchaser and, assuming due authorization, execution and delivery of this Agreement 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.

  
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 3.2 Consents and Approvals. No filing with, or authorization, approval, consent,
license, order, registration, qualification or decree of, any Governmental Authority or third party is necessary or required by or with respect to the Purchaser for the execution by the Purchaser of this Agreement, the performance by the Purchaser
of his obligations under this Agreement or the consummation by the Purchaser of the Transactions. 
 3.3 No Conflict.
None of the execution, delivery or performance by the Purchaser of this Agreement nor the consummation by the Purchaser of the Transactions will conflict with, violate, constitute a breach of or a default under or pursuant to (i) any Applicable
Contracts to which the Purchaser is a party or by which he is bound, or (ii) any Applicable Law binding upon the Purchaser. 
 3.4 No Proceedings. There is no action, claim, suit, demand, hearing, notice of violation or deficiency, or proceeding pending or, to the Purchaser’s knowledge, threatened against the
Purchaser by Governmental Authorities or any third party that would be reasonably likely, individually or in the aggregate, to enjoin, prevent or materially delay the consummation by the Purchaser of the Transactions. 

3.5 Investment Representations. 
 (a) The Purchaser (i) is an “accredited investor” as defined in Rule 501(a) under the Securities Act, (ii) except for the Prior Purchase Agreements, has not entered into and is not
aware of (A) any agreements, arrangements or understandings with any third parties (written or oral) relating to the purchase, holding or disposition of any Shares, any Other Purchaser Shares or any other third party investment (debt or equity)
in the Company, and (B) any agreements, arrangements or understandings, or any information relating to the Company that is not known by the Company’s Board of Directors and Audit Committee, in each case other than as publicly disclosed as
of the date of this Agreement, (iii) acknowledges that the issuance of the Shares has not been, and will not be, registered under the Securities Act or under any state securities laws, (iv) is acquiring the Shares pursuant to an exemption
from registration under the Securities Act solely for investment with no present intention to distribute any of the Shares to any person, (v) will not sell or otherwise dispose of any of the Shares, except in compliance with the registration
requirements of the Securities Act and any other applicable securities laws or pursuant to an applicable exemption therefrom, (vi) has such knowledge and experience in financial and business matters and in investments of this type that he is
capable of evaluating the merits and risks of his investment in the Shares and of making an informed investment decision and has so evaluated the merits and risks of such investment and without reliance upon the Company made his own analysis and
decision to consummate the Transactions, (vii) is able to bear the economic risk of an investment in the Shares and is able to afford a complete loss of such investment, and (viii) is knowledgeable with respect to the Company and its
condition (financial and otherwise), results of operations, businesses, properties, plans and prospects and has had a reasonable opportunity to ask questions of the Company and its representatives, and the Company or its representatives have
answered to the satisfaction of the Purchaser all inquiries that the Purchaser has put to it. 
 (b) The Purchaser understands
that nothing in this Agreement or any other materials presented to the Purchaser in connection with the purchase and sale of the Shares constitutes legal, tax or investment advice. The Purchaser has consulted such legal, tax and investment advisors
as he, in his sole discretion, has deemed to be necessary or appropriate in connection with his purchase of the Shares, and he relies solely on such advisors and not on any statements or representations of the

  
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Company or any of the Company’s agents or representatives with respect to such legal, tax and investment consequences. The Purchaser understands that he, and not the Company, shall be
responsible for his own tax liability that may arise as a result of the Transactions to which he is a party. 
 SECTION 4.
COVENANTS 
 4.1 Purchase Right. The Purchaser shall have the right to purchase from the Company at the
lower of (i) the Per Share Price and (ii) the lowest New Issuance Purchase Price (as defined below) prior to any exercise of the Purchase Right an aggregate of 1,555,556 Purchase Right Shares (the “Initial Purchase Right
Shares”), subject to adjustment as set forth in Section 4.1(c), (d), (e) and (f) below, on the following terms and conditions (the “Purchase Right”): 

(a) The Purchaser may exercise the Purchase Right, in whole or in part (but in a minimum increment of $1.0 million unless less than $1.0
million then remains to be exercised under the Purchaser’s share of the Purchase Right), at any time prior to the applicable Expiration Date (as defined below), by written notice to the Company accompanied by payment by the Purchaser of an
amount equal to the product of the Per Share Price (or the lowest New Issuance Purchase Price, as applicable) and the number of Purchase Right Shares to be purchased by the Purchaser. In the event of an exercise of the Purchase Right in accordance
with and subject to the terms and conditions of this Section 4.1, the Company shall issue to the Purchaser the Purchase Right Shares so purchased by delivering or causing to be delivered to the Purchaser a stock certificate or certificates
evidencing such Purchase Right Shares, with the legends required by Section 6.2 hereof, such stock certificate(s) to be in the denomination(s) and issued in the name(s) specified to the Company by the Purchaser and dated the date of such
exercise and, in each case, delivered to the Purchaser within a reasonable time, not exceeding five business days after such exercise. Notwithstanding the actual delivery date of the stock certificate(s), the name(s) specified to the Company by the
Purchaser shall be deemed for all purposes to be the holder of the Purchase Right Shares so purchased as of the date of such exercise. 
 (b) The Purchase Right shall expire automatically and in accordance with its terms, without any action on the part of the Purchaser or the Company, on the 180th day following the Closing Date (the “Initial Expiration
Date”); provided, that if Stockholder Approval is required for the issuance of the Purchase Right Shares and such Stockholder Approval is not obtained at least 30 days prior to the Initial Expiration Date, then the Initial Expiration
Date shall be extended to the date that is 30 days after the date such Stockholder Approval is obtained (the “Extended Expiration Date”); provided further, that if a New Issuance (as defined below) occurs after the Initial
Expiration Date (as it may be extended to the Extended Expiration Date) and prior to the first anniversary of the Closing Date (a “Post-Expiration New Issuance”), the Purchase Right shall again be exercisable, but only for that
number of Additional Shares referred to in Section 4.1(c) below for which the Purchase Right was adjusted as a result of such Post-Expiration New Issuance and not for any other Purchase Right Shares, until and including the first anniversary of
the Closing Date (the “Post-Expiration New Issuance Expiration Date” and, together with the Initial Expiration Date and the Extended Expiration Date, the applicable “Expiration Date”), on which Post-Expiration New
Issuance Expiration Date the right to exercise the Purchase Right for the Additional Shares shall expire automatically and in accordance with its terms, without any action on the part of the Purchaser or the Company. 

(c) Until the first anniversary of the Closing Date, in the event the Company issues additional shares of Common Stock (or securities
exercisable, exchangeable or convertible into Common Stock) in exchange for cash (each, a “New Issuance”), the number of Purchase Right Shares that may be purchased upon exercise of the Purchase Right shall be increased by an
aggregate number (the “Additional Shares”) sufficient to offset any reduction in the Purchaser’s percentage beneficial 

  
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ownership of the Common Stock as a result of such New Issuance (calculated immediately prior to and after such New Issuance assuming, to the extent that the Purchase Right is still then
exercisable, the full purchase under the Purchase Right), but in each case not including any dilution the Purchaser may experience from: 
 (i) the Transactions (including the issuance of the Initial Shares, the issuance of the Purchase Right Shares (including any Additional Shares), the issuance of the Anti-Dilution Shares and any adjustment
to the number of shares issuable pursuant to the Purchase Right or the Charney Anti-Dilution Provision); 
 (ii)
any other investments made by the Purchaser or any of the Other Purchasers, including without limitation pursuant to the Prior Purchase Agreements; 
 (iii) any new warrants issued to Lion or its affiliates or assignees pursuant to the Credit Agreement or to any other bank or non-convertible debt lender pursuant to its credit agreement or any
adjustments of any warrants held by SOF Investments, L.P.—Private IV or Lion or their respective affiliates or assignees (including without limitation as a result of any New Issuance or any of the transactions referred to in the immediately
preceding clauses (i) and (ii) above); or 
 (iv) shares issued or the issuance or grants of, or units
to purchase, Common Stock pursuant to the Company’s stock option plans, employee stock purchase plans or other benefit plans outstanding as they exist from time to time or employment agreements with employees of the Company or its subsidiaries.

 (d) If the Company consummates a New Issuance that results in an adjustment of the Purchase Right by a number of Additional
Shares pursuant to Section 4.1(c), the Company shall, as soon as practicable following the issuance of shares in such New Issuance, issue to the Purchaser that number of shares of Common Stock equal to (i) the number of shares that the
Purchaser would have acquired at the Closing Date for the Purchase Price had the Purchaser paid the New Issuance Purchase Price instead of the Per Share Price, minus (b) the number of shares of Common Stock the Purchaser purchased at the
Closing Date or otherwise received in respect of previous New Issuances; provided, that all calculations made hereunder shall be appropriately adjusted for stock splits, stock dividends and similar events and that if there is more than one
such New Issuance the New Issuance Purchase Price used to make the calculations under this Section 4.1(d) shall be the lowest such New Issuance Purchase Price. 
 (e) If at any time the Company shall (i) subdivide or reclassify its outstanding shares of Common Stock into a larger number of shares of Common Stock, or (ii) combine or reclassify its
outstanding shares of Common Stock into a smaller number of shares of Common Stock, then (i) the number of shares of Common Stock for which the Purchase Right is exercisable immediately after the occurrence of the effective date of such
subdivision, combination or reclassification shall be adjusted to equal the number of shares of Common Stock which a record holder of the same number of shares of Common Stock for which the Purchase Right is exercisable immediately prior to such
effective date would own or be entitled to receive after such date, and (ii) the Per Share Price with respect to the Purchase Right shall be adjusted to equal (A) the Per Share Price with respect to the Purchase Right in effect immediately
prior to such effective date multiplied by the number of shares of Common Stock for which the Purchase Right is exercisable immediately prior to the adjustment divided by (B) the new number of shares of Common Stock for which the Purchase Right
is exercisable immediately after such adjustment as determined in accordance with this Section 4.1(d). 

  
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 (f) In the case of a merger, the covenants described in this Section 4.1 will remain in
effect and apply on an equitable basis to the merged entity. 
 (g) The price at which Common Stock is issued or deemed issued
in a New Issuance shall be the “New Issuance Purchase Price” for such transaction. For purposes of this Section 4.1, the determination as to the New Issuance Purchase Price for securities exercisable, exchangeable or
convertible into Common Stock shall be calculated as follows: (i) in the case of a convertible security, the New Issuance Purchase Price shall be deemed to be the conversion price per share of Common Stock minus the portion of the annual
interest paid on the convertible security that corresponds to a share of Common Stock or annual dividend, if any, paid on a share of Common Stock, as applicable; (ii) in the case of options or warrants, the New Issuance Purchase Price shall be
the exercise price per share of Common Stock plus any amounts separately paid for the options or warrants; and (iii) in case securities are sold as units, for example, a convertible security or Common Stock with an exercisable security, the
price paid for the unit shall be allocated on a pro rata basis to the shares of Common Stock or shares of Common Stock underlying the convertible securities included in the unit and the New Issuance Purchase Price shall be reduced by the
Black-Scholes value of all exercisable securities included in the unit, using reasonable assumptions consistent with those used in the Company’s audited financial statements. In the event that the unit includes more than one share of Common
Stock or shares of Common Stock underlying convertible securities, the aforementioned deduction for the Black-Scholes value of exercisable securities included in the unit shall be allocated pro rata among such shares in the same way that the
price paid for the unit is allocated. 
 (h) The Purchaser shall not have the right to exercise the Purchase Right to the extent
that either (i) the Company does not have sufficient authorized shares to issue the Purchase Right Shares upon such exercise and the Stockholder Approval referred to in clause (ii) of the definition thereof has not been obtained or
(ii) to the extent that Stockholder Approval is required under clause (iii) of the definition thereof and such Stockholder Approval has not been obtained, and the issuance of the Purchase Right Shares upon such exercise (when taken
together with the Initial Shares and the Other Purchaser Shares) would exceed 19.9% of the Company’s outstanding shares of Common Stock on the Closing Date. 
 4.2 Stockholder Approval. To the extent that the Company determines that the Stockholder Approval is required, the Company agrees to, as soon as practicable after the Closing Date, amend its
preliminary proxy statement filed with the SEC on April 5, 2011 to (i) revise Proposal 3 therein to increase the number of authorized shares to be set forth in the amendment to the Company’s certificate of Incorporation by a number
sufficient to include the Shares initially issuable pursuant to the Purchase Right, the Anti-Dilution Shares and the Other Purchaser Purchase Right Shares initially issuable under the Other Purchase Agreement, (ii) include the Charney
Anti-Dilution Provision as a separate proposal to be voted upon by the Company’s stockholders at the 2011 Annual Meeting of Stockholders, and (iii) to the extent that Stockholder Approval is required under clause (iii) of the
definition thereof, add as an additional proposal to be voted upon by the Company’s stockholders at the 2011 Annual Meeting of Stockholders to approve the issuance of the Purchase Right Shares and the issuance of the Other Purchaser Purchase
Right Shares. 
 4.3 Charney Anti-Dilution Provision. Subject to receipt of the Stockholder Approval, the Company shall
issue to the Purchaser the Anti-Dilution Shares pursuant to the terms and conditions set forth in this Section 4.3 (the “Charney Anti-Dilution Provision”). 

(a) The Anti-Dilution Shares shall be issuable (i) in three equal installments with respect to the Other Purchaser Initial Shares
issued to the Other Purchasers (the “Initial Shares 

  
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Installments”) and (ii) to the extent the Other Purchaser Purchase Right is exercised, in three equal installments with respect to a proportionate number of Other Purchaser
Purchase Right Shares issued to the Other Purchasers (the “Purchase Right Shares Installments”) (in each case, subject to forfeiture as described below), one such Initial Shares Installment and one such Purchase Right Shares
Installment, if applicable, per measurement period set forth below (each, a “Measurement Period”). 
 (b)
Within five business days after the time a VWAP Target (as defined below) is satisfied, the Company shall issue to the Purchaser the Anti-Dilution Shares in the amount of the applicable Initial Shares Installment and the applicable Purchase Right
Shares Installment, if any (together, the “Installment Pair”), set forth on Schedule I attached hereto by delivering or causing to be delivered to the Purchaser a stock certificate or certificates evidencing such
Anti-Dilution Shares, with the legends required by Section 6.2 hereof, such stock certificates(s) to be in the denomination(s) and issued in the name(s) specified to the Company by the Purchaser. Notwithstanding the actual delivery date of the
certificate(s), the name(s) specified to the Company by the Purchaser shall for all purposes be the registered beneficial owner(s) of such Anti-Dilution Shares as of the date the applicable VWAP Target is satisfied. 

(c) In the case of the merger or consolidation of the Company with another person, or the sale, lease, transfer, conveyance or other
disposition of, or the acquisition by another person of, all or substantially all of the properties or assets of the Company and its subsidiaries taken as a whole, in each case the covenants described in this Section 4.3 will remain in effect
and shall apply on an equitable basis to the merged entity or applicable successor or acquiring entity. 
 (d) As used in this
Agreement, “VWAP Target” means the VWAP (as defined below) targets set forth as follows: 
 (i)
First Measurement Period: During the Measurement Period from April 16, 2012 to and including April 15, 2013, at such time as the VWAP of the Common Stock for a period of 60 consecutive trading days during such Measurement Period
exceeds $3.25 per share; 
 (ii) Second Measurement Period: During the Measurement Period from but not
including April 16, 2013 to and including April 15, 2014, at such time as the VWAP of the Common Stock for a period of 60 consecutive trading days during such Measurement Period exceeds $4.25 per share; and 

(iii) Third Measurement Period: During the Measurement Period from but not including April 16, 2014 to and
including April 15, 2015, at such time as the VWAP of the Common Stock for a period of 60 consecutive trading days during such Measurement Period exceeds $5.25 per share (the “Third VWAP Target”); 

provided, that (i) if the VWAP Target for a particular Measurement Period is not met during such Measurement Period, then the Installment
Pair issuable if the VWAP Target for such Measurement Period had been satisfied shall be automatically forfeited, (ii) there shall be no acceleration into an earlier Measurement Period of any Installment Pair applicable to a subsequent
Measurement Period even if the VWAP Target for a subsequent Measurement Period is met in an earlier Measurement Period, and (iii) to the extent that the Other Purchaser Purchase Right terminates without being fully exercised for the Initial
Purchase Right Shares (as defined in the Other Purchase Agreement) prior to the Initial Expiration Date (as defined in the Other Purchase Agreement) (the percentage of such Initial Purchase Right Shares not purchased, the “Expired
Percentage”), the number of shares issuable in each Purchase Right Shares Installment shall be proportionately reduced by a percentage equal to the Expired Percentage. 

  
 9 

 (e) As used in this Agreement, the following terms shall have the following respective
meanings: 
 (i) “Closing Price” means on any particular date (a) the last sale price per
share of the Common Stock on such date on the NYSE Amex or another registered national stock exchange on which the Common Stock is then listed, or if there is no such price on such date, then the closing bid price or last sale price, as applicable,
on such exchange or quotation system on the date nearest preceding such date, or (b) if the Common Stock is not listed then on the NYSE Amex or any registered national stock exchange, the closing bid price or last sale price, as applicable, for
a share of Common Stock in the over-the-counter market, as reported by the OTC Bulletin Board or by the National Quotation Bureau Incorporated (or similar organization or agency succeeding to its functions of reporting prices) at the close of
business on such date, or (c) if the Common Stock is not then reported by the OTC Bulletin Board or the National Quotation Bureau Incorporated (or similar organization or agency succeeding to its functions of reporting prices), then the average
of the “Pink Sheet” quotes for the five trading days preceding such date of determination, or (d) if the Common Stock is not then publicly traded the fair market value of a share of Common Stock (as determined by the Board of
Directors of the Company or any authorized committee thereof acting in good faith, assuming a willing buyer and a willing seller, provided that no minority or illiquidity discount shall be taken into account and no consideration shall be given to
any restrictions on transfer, or to the existence or absence of, or any limitations on, voting rights); provided, that all determinations of the Closing Price shall be appropriately adjusted for any stock dividends, stock splits or other
similar transactions during such period. 
 (ii) “Third Installment of the Anti-Dilution Shares”
means the Anti-Dilution Shares issued to the Purchaser in the amount of the applicable Installment Pair set forth on Schedule I attached hereto if the Third VWAP Target is satisfied. 

(iii) “trading day” means (a) a day on which the Common Stock is traded on the NYSE Amex, or
(b) if the Common Stock is not traded on the NYSE Amex, a day on which the Common Stock is quoted in the over-the-counter market as reported by the OTC Bulletin Board or by the National Quotation Bureau Incorporated (or any similar organization
or agency succeeding its functions of reporting prices); provided, however, that in the event that the Common Stock is not listed or quoted as set forth in (a) or (b) hereof, then trading day shall mean any day except Saturday,
Sunday and any day which shall be a legal holiday or a day on which banking institutions in the State of New York are authorized or required by law or other government action to close. 

(iv) “VWAP” means the average volume weighted Closing Prices of the Common Stock for the applicable
period, after removal of the highest and lowest trading days. 
 4.4 Certain Tax Matters. The Purchaser shall
indemnify and hold the Company harmless from all taxes imposed upon the Purchaser, including any such taxes imposed upon the Company as a withholding agent in connection with the share issuances contemplated by the Charney Anti-Dilution Provision.
The Company confirms that the rights provided to the Purchaser in Section 4.3 of this Agreement are antidilution rights and that the Company will not take a tax position inconsistent with the tax position taken by the Purchaser in regards to
the issuance of such rights except to the extent the Company in its sole discretion determines in good faith that a contrary position is required by law, rule, regulation or regulatory body or is in reasonable response to a governmental or
regulatory inquiry (including, but not limited to, an audit, investigation or comment process). For avoidance of doubt, this provision does not cover any taxes imposed on the Company that are the obligations of the Company, including the
Company’s share of employment taxes, if any. This covenant contained in this Section 4.4 shall survive and continue in full force and effect following the termination of this Agreement.

  
 10 

 SECTION 5. CONDITIONS TO CLOSING 

5.1 Conditions to the Purchaser’s Obligations. The obligations of the Purchaser to consummate the Sale shall be subject to the
satisfaction, or waiver by the Purchaser, of each of the following conditions: 
 (a) Closing Deliveries. The Company
shall have made, or caused to be made, delivery to the Purchaser of the items required to be delivered to the Purchaser pursuant to Section 1.3(a). 
 (b) No Injunctions or Illegality. No temporary restraining order, preliminary or permanent injunction or other judgment or order issued by any Governmental Entity and no Applicable Law shall be in
effect enjoining, making illegal or otherwise prohibiting the consummation of the Sale. 
 (c) Representations and
Warranties. The representations and warranties of the Company set forth in this Agreement shall be true and correct in all material respects (disregarding all qualifications or limitations as to materiality or a Material Adverse Effect) as of
the date of this Agreement and as of the Closing Date as though made on and as of the Closing Date. 
 (d) Performance of
Obligations of Company. The Company shall have performed in all material respects all agreements and covenants required to be performed by it under this Agreement prior to the Closing Date. 

(e) Other Purchase Agreement Closing. The Closing (as defined in the Other Purchase Agreement) shall have occurred or shall occur
substantially concurrently with the Closing under this Agreement. 
 (f) Stockholder Approval. The requisite Stockholder
Approval applicable to such Transaction shall have been obtained. 
 5.2 Conditions to the Company’s Obligations.
The obligations of the Company to consummate each of the Transactions shall be subject to the satisfaction, or waiver by the Company, of each of the following conditions with respect to the applicable Transaction: 

(a) Closing Deliveries. With respect to the Sale and the Purchase Right, respectively, the Purchaser shall have made, or caused to
be made, delivery to the Company of the items required to be delivered to the Company pursuant to Section 1.3(b) or 4.1(a). 
 (b) No Injunctions or Illegality. No temporary restraining order, preliminary or permanent injunction or other judgment or order issued by any Governmental Authority and no Applicable Law shall be
in effect enjoining, making illegal or otherwise prohibiting the consummation of such Transactions. 

  
 11 

 (c) Representations and Warranties. The representations and warranties of the
Purchaser set forth in this Agreement shall be true and correct in all material respects as of the date of this Agreement and as of the Closing Date and the date of exercise of the Purchase Right as though made on and as of the Closing Date and the
date of exercise of the Purchase Right, respectively. 
 (d) Performance of Obligations of the Purchaser. With respect to
the Sale and the Purchase Right, respectively, the Purchaser shall have performed in all material respects all agreements and covenants required to be performed by it under this Agreement prior to the Closing Date and the date of exercise of the
Purchase Right, respectively. 
 (e) Other Purchase Agreement Closing. The Closing (as defined in the Other Purchase
Agreement) shall have occurred or shall occur substantially concurrently with the Closing under this Agreement. 
 (f)
Stockholder Approval. The requisite Stockholder Approval applicable to such Transaction shall have been obtained. 
 SECTION 6.
RESTRICTIONS ON TRANSFER OF SHARES 
 6.1 Restrictions on Transferability. The Shares may not be offered, sold
or otherwise transferred except in compliance with the registration requirements of the Securities Act and any other applicable securities laws, or pursuant to an exemption therefrom, and in each case in compliance with the terms of this Agreement
and the restrictions set forth in the text of the restrictive legend required to be included on the Shares pursuant to Section 6.2 hereof. The Company shall be entitled to give stop transfer orders to its transfer agent with respect to the
Shares in order to enforce the foregoing restrictions. 
 6.2 Restrictive Legend. Each certificate representing the
Shares shall contain a legend substantially to the following effect (in addition to any legends required under applicable securities laws). 
 THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS. NEITHER THIS
SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE DIRECTLY OR INDIRECTLY OFFERED, SOLD, TRANSFERRED, ENCUMBERED, ASSIGNED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE
SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS, OR (B) AN APPLICABLE EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS, INCLUDING RULE 144, SUBJECT TO THE COMPANY’S AND THE TRANSFER AGENT’S
RIGHT PRIOR TO ANY SUCH OFFER, SALE, TRANSFER, ENCUMBRANCE, ASSIGNMENT OR OTHER DISPOSITION TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATIONS AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM. 

  
 12 

 SECTION 7. TERMINATION 
 7.1 Termination by the Purchaser or the Company. This Agreement may be terminated prior to the Closing: 
 (a) by the mutual written consent of the Purchaser and the Company; 
 (b) by the
Company (i) upon the failure of the Purchaser to perform or comply in all material respects with any of his covenants or agreements contained in this Agreement which are to be performed or complied with by the Purchaser on or prior to the
Closing Date, (ii) if any representation or warranty of the Purchaser contained in this Agreement shall not have been true and correct in all material respects as of the time at which such was made, or (iii) if the Closing has not occurred
within five business days after the date of this Agreement; or 
 (c) by the Purchaser (i) upon the failure of the Company
to perform or comply in all material respects with any of its covenants or agreements contained in this Agreement which are to be performed or complied with by the Company on or prior to the Closing Date, (ii) if any representation or warranty
of the Company contained in this Agreement shall not have been true and correct in all material respects (disregarding all qualifications or limitations as to materiality or a Material Adverse Effect) as of the time at which such was made, or
(iii) if the Closing has not occurred within five business days after the date of this Agreement. 
 SECTION 8. MISCELLANEOUS

 8.1 Survival of Representations and Warranties. All representations, warranties, covenants and agreements contained
in this Agreement (except covenants and agreements contained in Section 4) shall terminate as of the earlier of (i) the termination of this Agreement pursuant to Section 7 and (ii) the Closing. Unless such covenants terminate
earlier by their terms, the covenants contained in Section 4 shall terminate as of the earlier of (i) the termination of this Agreement pursuant to Section 7 and (ii) the issuance of the Third Installment of the Anti-Dilution
Shares or, if such Third Installment of the Anti-Dilution Shares is not issuable, on April 15, 2015. 
 8.2 Notices.
All notices and other communications hereunder shall be in writing and shall be deemed sufficiently given and served for all purposes (a) when personally delivered or given by machine-confirmed facsimile, (b) one business day after a
writing is delivered to a national overnight courier service or (c) three business days after a writing is deposited in the United States mail, first class postage or other charges prepaid and registered, return receipt requested, in each case,
addressed as set forth on the signature page hereto (or at such other address for a party as shall be specified by like notice). 
 8.3 Amendments and Waivers. No modifications or amendments to, or waivers of, any provision of this Agreement may be made, except pursuant to a document signed by the Company and the Purchaser.

 8.4 Interpretation. When a reference is made in this Agreement to Sections, paragraphs, clauses or Schedules, such
reference shall be to a Section, paragraph, clause or Schedule to this Agreement unless otherwise indicated. The words “include,” “includes,” and “including” when used herein shall be deemed in each case to be followed
by the words “without limitation.” The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. This Agreement has been negotiated by the
respective parties hereto 

  
 13 

 
and their attorneys and the language hereof will not be construed for or against any party. The phrases “the date of this Agreement,” “the date hereof,” and terms of similar
import, unless the context otherwise requires, shall be deemed to refer to April 27, 2011. The words “hereof,” “herein,” “herewith,” “hereby” and “hereunder” and words of similar import shall,
unless otherwise stated, be construed to refer to this Agreement as a whole and not to any particular provision of this Agreement. 
 8.5 Fee and Expenses. Each party to this Agreement shall pay all costs and expenses incurred by it in connection with the execution and delivery of this Agreement and the transactions contemplated
hereby, including fees of legal counsel. 
 8.6 Further Assurances. Each party to this Agreement shall do and perform or
cause to be done and performed all such further acts and things and shall execute and deliver all such agreements, certificates, instruments and documents as the other party hereto may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby. 
 8.7 No Third-Party
Beneficiaries. No person or entity not a party to this Agreement shall be deemed to be a third-party beneficiary hereunder or entitled to any rights hereunder. 
 8.8 Successors and Assigns. The provisions of this Agreement shall inure to the benefit of and be binding upon the successors of each of the parties hereto. Notwithstanding the foregoing, neither
the Purchaser nor the Company shall assign or delegate any of its rights or obligations under this Agreement without the prior written consent of the other. 
 8.9 Entire Agreement. This Agreement and all other documents required to be delivered pursuant hereto constitute the entire agreement among the parties with respect to the subject matter hereof and
supersede all prior documents, agreements and understandings, both written and verbal, among the parties with respect to the subject matter hereof and the transactions contemplated hereby. 

8.10 Severability. If any provision of this Agreement is held to be illegal, invalid or unenforceable under present or future
laws, then, if possible, such illegal, invalid or unenforceable provision will be modified to such extent as is necessary to comply with such present or future laws and such modification shall not affect any other provision hereof; provided that if
such provision may not be so modified, such illegality, invalidity or unenforceability will not affect any other provision, but this Agreement will be reformed, construed and enforced as if such invalid, illegal or unenforceable provision had never
been contained herein. 
 8.11 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH CONTRACTS MADE AND TO BE PERFORMED IN THE STATE OF DELAWARE. 
 8.12 Counterparts. This Agreement 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. 
 (signature page follows) 

  
 14 

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

			
	AMERICAN APPAREL, INC.
		
	By:	 	/s/ John Luttrell
		 	Name: John Luttrell
		 	 Title: Executive Vice President and Chief
           Financial Officer

		
		 	 Address:
 747 Warehouse
Street
 Los Angeles, CA 90021

Facsimile: (213) 488-0334
  

with a copy to:

		
		 	 Skadden, Arps, Slate, Meagher & Flom LLP
 300 South Grand Avenue, Suite 3400
 Los Angeles, CA 90071

Attention: Jeffrey H. Cohen and David C. Eisman Facsimile: (213) 621-5288 and (213) 621-5381

		
		 	/s/ Dov Charney
	Dov Charney
		
		 	 Address:
 c/o American
Apparel, Inc.
 747 Warehouse Street

Los Angeles, CA 90021

		
		 	with a copy to:
		
		 	O’Melveny & Myers LLP
		 	 400 South Hope Street
 Los
Angeles, CA 90071
 Attention: John Laco

Facsimile: (213) 430-6407

 [Signature Page to Purchase Agreement] 

  
 15 

 Schedule I 

Number of Anti-Dilution Shares 
 Certain capitalized terms used herein have the respective meanings set forth in the Purchase Agreement to which this Schedule I is attached or, if so stated, in the Other Purchase Agreement.

  

													
	 Installment
	  	Number of Anti-Dilution Shares	 
	  	Initial Shares
Installment	 	  	Purchase Right Shares
Installment (1)	 	  	Total	 
	 First Installment
	  	 	4,219,998	  	  	 	8,439,996	  	  	 	12,659,994	  
	 Second Installment
	  	 	4,219,998	  	  	 	8,439,996	  	  	 	12,659,994	  
	 Third Installment
	  	 	4,219,998	  	  	 	8,439,996	  	  	 	12,659,994	  
	 Total
	  	 	12,659,994	  	  	 	25,319,988	  	  	 	37,979,982	  

  

	(1)	Number of shares assumes that the Other Purchaser Purchase Right is exercised in full for the Initial Purchase Right Shares (as defined in the Other Purchase Agreement)
To the extent that the Other Purchaser Purchase Right is not exercised in full for such Initial Purchase Right Shares prior to the Initial Expiration Date (as defined in the Other Purchase Agreement), the number of shares issuable in each Purchase
Right Shares Installment shall be proportionately reduced by a percentage equal to the Expired Percentage. 

Schedule I 

  
 16Form of Performance Share Award Agreement

 Exhibit 10.27 

GOLFSMITH INTERNATIONAL HOLDINGS, INC. 
 2006 INCENTIVE COMPENSATION PLAN 
 PERFORMANCE SHARE AWARD AGREEMENT

 This Performance Share Award Agreement (the “Agreement”) is made, effective as of February 25, 2011 (the
“Grant Date”), by and between Golfsmith International Holdings, Inc, (the “Company”) and ( XX ) (the “Participant”). 
 RECITALS: 
 WHEREAS, the Company has adopted the Golfsmith International Holdings,
Inc. 2006 Incentive Compensation Plan (the “Plan”) pursuant to which Performance Shares may be granted; and 

WHEREAS, the Committee has determined that it is in the best interests of the Company and its stockholders to grant the award of Performance Shares
provided for herein (the “Performance Share Award”) to the Participant in recognition of the Participant’s services to the Company, such grant to be subject to the terms set forth herein. 

NOW, THEREFORE, in consideration for the mutual covenants hereinafter set forth, the parties hereto agree as follows: 

 

	1.	Grant of Performance Share Award. Pursuant to Section 9.1 of the Plan, the Company hereby grants to the Participant on the Grant Date, in the
aggregate, ( ZZ ) Performance Shares on the terms and conditions set forth in this Agreement and as otherwise provided in the Plan. Such Performance Shares shall be credited to a separate account maintained for the Participant on the books of the
Company (the “Account”). On any given date, the value of each Performance Share comprising the Performance Share Award shall equal the Fair Market Value of one Share on such date. 

 

	2.	Incorporation by Reference. The provisions of the Plan are hereby incorporated herein by reference. This Agreement shall be construed in accordance with
the provisions of the Plan and, except as otherwise expressly set forth herein, any capitalized terms not otherwise defined in this Agreement shall have the definitions set forth in the Plan. The Committee shall have the authority to interpret and
construe the Plan and this Agreement and to make any and all determinations thereunder, and its decision shall be binding and conclusive upon the Participant and her legal representative in respect of any questions arising under the Plan or this
Agreement. 

  

	3.	Terms and Conditions. 

  

	 	(a)	Earned Performance Shares. Subject to the terms and conditions of this Agreement and those of the Plan, the number of Performance Shares earned (the
“Earned Performance Shares”), if any, shall be determined based on the extent to which the actual 2011 Company EBITDA (as hereinafter defined) attains the 2011 Company EBITDA targets set forth in the following schedule:

  

					
	 2011 Company EBITDA
	  	Earned Performance Shares	 
		
	 Less than $13,470,000
	  	 	Zero	  
		
	 $13,470,000
	  	 	25.0	% 
		
	 $14,424,000
	  	 	33.3	% 
		
	 $16,000,000
	  	 	50.0	% 
		
	 $18,000,000
	  	 	66.7	% 
		
	 $20,000,000 or greater
	  	 	100.0	% 

  
 1 

 If actual 2011 Company EBITDA is between any target levels set forth in the above schedule,
the Earned Performance Shares shall be determined by linear interpolation. 
 Following issuance of the Company’s 2011
audited financial statements, the Committee shall determine and certify in writing the extent to which the 2011 Company EBITDA targets set forth above were attained and the number (if any) of Earned Performance Shares in accordance with this
Agreement. 
  

	 	(b)	Restricted Stock. During 2012, following the determination of the number of Earned Performance Shares in accordance with Section 3(a) hereof, each
Earned Performance Share shall automatically be converted into one Share of Restricted Stock under the Plan (the “Restricted Stock”) awarded to the Participant on the date of such conversion (the “Conversion
Date”), provided that the Participant has not Terminated on or prior to the Conversion Date. Upon any such Termination of the Participant under any circumstances, the Performance Share Award and any right to receive Restricted
Stock shall be immediately and unconditionally forfeited. The Restricted Stock shall be subject to the terms and conditions of the Plan and this Agreement, including a restriction period (the “Period of Restriction”) as set
forth herein. The Period of Restriction shall commence on the Conversion Date and shall end as to one-third (1/3) of the total number of Shares of Restricted Stock on each of the first, second and third anniversaries of the Grant Date, subject
to the terms and conditions of this Agreement. Upon Termination of the Participant under any circumstances, any Restricted Stock as to which the Period of Restriction has not lapsed in accordance with this Agreement as of the date of such
Termination shall be immediately and unconditionally forfeited and revert to the Company, without any action required by the Participant or the Company. 

  

	 	(c)	Certain Restrictions. The Performance Share Award, including the Restricted Stock while subject to the Period of Restriction, may not be sold, exchanged,
transferred, pledged, assigned, encumbered, alienated, hypothecated or otherwise disposed of and may not be subject to lien, garnishment, attachment or other legal process. Neither the Participant nor any other person shall become the beneficial
owner of the Shares underlying the Performance Shares, nor have any rights to dividends or other rights as a stockholder with respect to any such Shares, until and after such Performance Shares, if any, are converted into Shares of Restricted Stock
pursuant to Section 3(b) hereof and such Shares of Restricted Stock have been actually issued to the Participant and transferred on the books and records of the Company or its agent in accordance with the terms of the Plan and this Agreement.
The Participant shall be the record holder of any Shares of Restricted Stock issued to the Participant hereunder, subject to the restrictions set forth in this paragraph. The Participant covenants and agrees that he or she shall not vote Shares of
Restricted Stock that are subject to the Period of Restriction. From and after the date on which Shares of Restricted Stock are issued to the Participant, any cash dividends and other distributions made or paid with respect to the Restricted Stock
while subject to the Period of Restriction will be held by the Company and paid to the Participant if and when the Period of Restriction applicable to such Restricted Stock ends. 

  
 2 

	4.	Change of Control. In the event of a Change of Control: 

  

	 	(a)	prior to the Conversion Date, (i) The Committee shall determine the number of Earned Performance Shares based on the principles of Section 3(a) using
(x) actual 2011 Company EBITDA for the period ending on the last day of the calendar month immediately preceding the date of such Change of Control (the ‘YTD Actual EBITDA”) and (y) budgeted 2011 Company EBITDA for the same
period (the “YTD Budget EBITDA”), it being understood that (a) $13,470,000 is the budgeted 2011 Company EBITDA, (b) the Committee shall calculate the ratio of YTD Actual EBITDA to YTD Budget EBITDA, and (c) such ratio shall
be multiplied by $13,470,000 to determine equivalent full year 2011 Company EBITDA performance in order to determine the number of Earned Performance Shares in accordance with Section 3(a). For avoidance of doubt, if such ratio is less than
1.00, there will be no Earned Performance Shares. Such number of Earned Performance Shares shall then be multiplied by a fraction, the numerator of which is the number of calendar days in 2011 that have elapsed prior to the date of the Change of
Control, and the denominator of which is 365, and such product shall be the number of Earned Performance Shares for purposes of determining the number of Shares of Restricted Stock under Section 3(b). (ii) The date of such Change of
Control shall be treated as the Conversion Date for purposes of Section 3(b). (iii) Any Shares of Restricted Stock into which any Earned Performance Shares convert shall not be subject to the Period of Restriction; or

  

	 	(b)	on or after the Conversion Date, the Period of Restriction applicable to any outstanding Restricted Stock shall immediately lapse as to the full number of Shares of
Restricted Stock. 

  

	5.	Evidence of Shares of Restricted Stock; Legend. 

  

	 	(a)	The Participant agrees that, in the Company’s discretion, the Participant’s ownership of the Restricted Stock may be evidenced solely by a “book
entry” (i.e., a computerized or manual entry) in the records of the Company or its designated stock transfer agent in the Participant’s name, which shall be subject to a stop transfer order consistent with this Agreement and the
legend set forth in this Section 5(b) below. 

  

	 	(b)	If, however, during the Period of Restriction the Restricted Stock is evidenced by a stock certificate or certificates, registered in the Participant’s name, the
Participant acknowledges that upon receipt of such stock certificate or certificates, such certificates shall bear the following legend and such other legends as may be required by law or contract: 

“These shares have been issued pursuant to the Golfsmith International Holdings, Inc. 2006 Incentive Compensation Plan (the "Plan")
and are subject to forfeiture to Golfsmith International Holdings, Inc. in accordance with the terms of the Plan and an agreement between Golfsmith International Holdings, Inc. and the person in whose name the certificate is registered. These shares
may not be sold, exchanged, transferred, pledged, assigned, encumbered, alienated, hypothecated or otherwise disposed of except in accordance with the terms of the Plan and said agreement.” 

 

	 	(c)	The Participant agrees that upon receipt of any such stock certificates for the Restricted Stock the Participant shall deposit each such certificate with the Company,
or such other escrow holder as the Committee may appoint, together with a stock power endorsed in blank or other appropriate instrument of transfer, to be held by the Company or such escrow holder until the expiration of the applicable portion of
the Period of Restriction. 

  
 3 

	 	(d)	Upon expiration of the applicable portion of the Period of Restriction, a certificate or certificates representing the Shares as to which the Period of Restriction has
so lapsed shall be delivered to the Participant by the Company, subject to satisfaction of any tax obligations in accordance with Section 6 hereof; provided, however, that such Shares may nevertheless be evidenced on a
noncertificated basis, to the extent not prohibited by applicable law or the rules of any stock exchange. 

  

	6.	Tax Withholding. Notwithstanding any other provisions of this Agreement to the contrary, upon the date of expiration of the applicable portion of the
Period of Restriction, or the date as of which the value of any Performance Shares or Shares of Restricted Stock otherwise becomes includible in the Participant’s gross income for tax purposes, the Participant shall be required to pay to the
Company or any Affiliate in cash, and the Company or any Affiliate shall have the right and is hereby authorized to withhold, from any Shares deliverable pursuant to the Performance Share Award (including Shares of Restricted Stock as to which the
Period of Restriction has ended), or from any compensation or other amounts owing to the Participant, the amount of any required withholding taxes in respect of the Performance Share Award (including the Restricted Stock award hereunder).
Additionally, the Committee shall be authorized to take such other actions as may be necessary or appropriate in the opinion of the Committee for the Company to satisfy all obligations for the payment of such taxes or otherwise in accordance with
Article XVI of the Plan. The Committee may permit the Participant to satisfy the withholding liability: (a) in cash, (b) by the delivery of Shares (which are not subject to any pledge or other security interest) owned by the
Participant having a Fair Market Value equal to such withholding liability, (c) by having the Company withhold from the number of Shares (as to which the Period of Restriction has ended) otherwise issuable or deliverable hereunder a number of
Shares with a Fair Market Value equal to such withholding liability (but no more than the minimum required statutory withholding liability), or (d) by a combination of such methods. In the event that the Participant elects immediate federal
income taxation with respect to all or any portion of the award of Restricted Stock hereunder pursuant to Section 83(b) of the Code, the Participant agrees to notify the Company thereof in writing at or prior to the time of filing such
election. 

  

	7.	Compliance with Laws and Regulations. The issuance and transfer of Shares shall be subject to compliance by the Company and the Participant with all
applicable requirements of securities laws and with all applicable requirements of any stock exchange on which the Shares may be listed at the time of such issuance or transfer. 

 

	8.	No Right to Continued Employment. Nothing in this Agreement shall be deemed by implication or otherwise to impose any limitation on any right of the
Company or any Affiliate (which rights are hereby reserved) to Terminate the Participant at any time. 

  

	9.	General Assets. All amounts credited to the Account under this Agreement shall continue for all purposes to be part of the general assets of the Company.
The Participant’s interest in the Account shall make the Participant only a general, unsecured creditor of the Company. 

  

	10.	Notices. Every notice or other communication relating to this Agreement shall be in writing, and shall be mailed to or delivered to the party for whom it
is intended at such address as may from time to time be designated by it in a notice mailed or delivered to the other party as herein provided; provided, that, unless and until some other address be so designated, all notices or
communications by the Participant to the Company shall be mailed or delivered to the Company at its principal executive office, and all notices or communications by the Company to the Participant may be given to the Participant personally or may be
mailed to her at her address as recorded in the records of the Company 

  

	11.	Bound by Plan. By signing this Agreement, the Participant acknowledges that she has received a copy of the Plan and has had an opportunity to review the
Plan and agrees to be bound by all of the terms and provisions of the Plan. 

  

	12.	Beneficiary. The Participant may file with the Committee a written designation of a beneficiary on such form as may be prescribed by the Committee and
may, from time to time, amend or revoke such designation. If no designated beneficiary survives the Participant, the executor or administrator of the Participant’s estate shall be deemed to be the Participant’s beneficiary.

  
 4 

	13.	Successors. The terms of this Agreement shall be binding upon and inure to the benefit of the Company, its successors and assigns, and on the Participant
and the beneficiaries, executors and administrators, heirs and successors of the Participant. 

  

	14.	Amendment of Award. The Committee at any time and from time to time may amend the terms of this Agreement in accordance with Article XV of the Plan.

  

	15.	Interpretation. Any dispute regarding the interpretation of this Agreement shall be submitted by the Participant or the Company to the Committee for
review. The resolution of such a dispute by the Committee shall be binding on the Company and the Participant. 

  

	16.	Severability. Every provision of this Agreement is intended to be severable and any illegal or invalid term shall not affect the validity or legality of
the remaining terms. 

  

	17.	Headings. The headings of the Sections hereof are provided for convenience only and are not to serve as a basis for interpretation of construction, and
shall not constitute a part of this Agreement. 

  

	18.	Tax Consequences. The Participant acknowledges that there may be adverse tax consequences upon the settlement or vesting of the Performance Share Award
(including the Restricted Stock award hereunder), or disposition of any Shares received upon vesting, and that the Participant should consult a tax advisor before such time. In no event shall the Company or any Affiliate be liable for any tax,
interest or penalty that may be incurred by the Participant in respect of such awards hereunder. The Participant agrees to sign such additional documentation as the Company may reasonably require from time to time. 

 

	19.	Signature in Counterparts. This Agreement may be signed in counterparts, each of which shall be deemed an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument. 

  

	20.	Definition of 2011 Company EBITDA. 2011 Company EBITDA means: net income set forth in the Company’s 2011 audited financial statements, adjusted to
exclude deduction of interest expense (net of interest income), income taxes, depreciation and amortization, and to exclude (a) gain or loss from sale of capital assets, calculated otherwise in accordance with generally accepted accounting
principles and (b) any non-recurring earnings charge approved by the Committee. 

 [SIGNATURE PAGE FOLLOWS]

  
 5 

 EXECUTED, as of the date set forth below. 

 

					
	GOLFSMITH INTERNATIONAL HOLDINGS, INC.
		
	 By:
	 	 /s/ Robert Allen

		 	 Name:
	 	 Robert Allen

		 	 Title:
	 	 Chairman, Compensation Committee

		 		 	 Golfsmith International Holdings, Inc.

		 	 Date:
	 	
	
	PARTICIPANT
		
	 By:
	 	  

		 	 Name:
	 	
		 	 Date:

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