AMENDMENT AND AGREEMENT
Exhibit
10.1
AMENDMENT
AND AGREEMENT
This
AMENDMENT AND AGREEMENT, dated as of April 10, 2009 (this “Amendment and
Agreement”), is hereby entered into by and between American Apparel,
Inc., a Delaware corporation (the “Company”), and
Lion/Hollywood L.L.C., a Delaware limited liability company (“Lion”).
WHEREAS,
the Company and Lion Capital (Guernsey) II Limited entered into the Investment
Agreement, dated as of March 13, 2009 (the “Investment
Agreement”) and, subsequently, Lion Capital (Guernsey) II Limited
assigned all of its rights and obligations under the Investment Agreement to
Lion and Lion was substituted as a party to the Investment
Agreement;
WHEREAS,
the Company and Lion each desire to enter into this Amendment and Agreement for
the purpose of amending the Investment Agreement and setting forth certain other
agreements of the parties hereto;
WHEREAS,
Section 5.2 of the Investment Agreement permits the Company and Lion to amend
the Investment Agreement by an instrument in writing signed by duly authorized
officers of each of the Company and Lion; and
WHEREAS,
the Company and Lion each desire to amend the Investment Agreement and enter
into certain other agreements as provided herein.
NOW,
THEREFORE, in consideration of the premises, and of the representations,
warranties, covenants and agreements set forth herein, the Company and Lion
hereby agree as follows:
1. Defined
Terms. Capitalized terms used but not defined herein shall
have the meanings assigned to them in the Investment Agreement.
2. Amendment and Agreement to
Section 4.1(c) of the Investment Agreement. Section 4.1(c) of
the Investment Agreement is hereby amended and restated in its entirety as
follows:
“The
Company shall, subject to applicable law and regulatory requirements, use its
reasonable best efforts to take all necessary or desirable actions as may be
required under applicable law or regulatory requirements to cause the two
individuals designated by Investor as the initial Investor Directors to be
appointed or elected to the Board not later than the earlier of (1) the
first annual meeting of stockholders of the Company to occur following the
Closing and (2) June 30, 2009.”
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3. Amendment and Agreement to
Section 4.1(f) of the Investment Agreement. Section 4.1(f) of
the Investment Agreement is hereby amended and restated in its entirety as
follows:
“For
so long as Investor has the right to designate any person for nomination for
election to the Board pursuant to Section 4.1(a), the Company shall not (1)
increase the size of the Board to more than 10 directors (or 13 directors in the
event the Company increases the size of the Board to 12 directors in accordance
with this Section 4.1(f)), or (2) amend its certificate of incorporation or
bylaws in any manner (or take any similar action) that would materially and
adversely affect Investor’s rights under this Section 4.1 or the Company’s
ability to comply with its obligations under this Section 4.1; provided, however, in the event that,
as of June 30, 2009, the two Investor Directors have not been elected or
appointed as directors of the Company in accordance with Section 4.1(c), the
Company shall take all action necessary (including adopting an amendment to its
bylaws) to (i) increase the size of the Board to 12 directors, in which case (A)
Investor shall be entitled to a third Investor Director under Section 4.1(a) for
so long as Investor beneficially owns at least 3,000,000 shares of Warrant Stock
and (B) Investor shall not be entitled to the Investor Observer, and (ii)
appoint the three Investor Directors to fill the three newly created
directorships, in each case effective on or prior to June 30,
2009.”
4. Observer
Rights. The Company agrees that, from and after the date
hereof until the election or appointment of such Investor Directors as directors
of the Company in accordance with Section 4.1(c) or (f) (as the case may be),
each of the Investor Directors (or any alternate designated by any such Investor
Director) shall have the right to attend all meetings of the Board, observe all
deliberations of the Board and receive copies of all materials provided to the
Board; provided
that such Investor Directors (and any such alternate) shall have no voting
rights with respect to actions taken or elected not to be taken by the Board
until such Investor Directors are elected as directors of the Company; and provided, further, that each
such Investor Director (and any such alternate) shall be entitled to expense
reimbursement in connection with attending such meetings of the Board in
accordance with Section 4.1(h) of the Investment Agreement (it being understood
that such expense reimbursement shall not apply to more than two such Investor
Directors and/or alternates in respect of any meeting of the
Board). For the avoidance of doubt, the rights provided in this
Section 4 shall be in addition to Lion’s right to designate an Investor Observer
and the Investor Observer’s right to attend meetings of the Board, observe
deliberations of the Board, receive copies of materials provided to the Board
and receive expense reimbursement, in each case, pursuant to and in accordance
with Section 4.1 of the Investment Agreement.
5. Company Proxy
Statement. The Company agrees to use its reasonable best
efforts to file a preliminary proxy statement (the “Proxy Statement”) for
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the
first annual meeting of stockholders of the Company to occur following the
Closing (the “Stockholder Meeting”)
on or prior to April 30, 2009. The Company further agrees to nominate
each of the Investor Directors to be elected as a director at the Stockholder
Meeting, include each such nomination and other required information regarding
such individuals in the Proxy Statement and solicit or cause the
solicitation of proxies in connection with the election of each such individual
as a director.
6. Representations and
Warranties. Each of the Company and Lion hereby represents and
warrants that (a) it has the requisite power and authority to execute and
deliver this Amendment and Agreement, (b) this Amendment and Agreement has been
duly and validly authorized by all necessary action by such party, and (c) this
Amendment and Agreement has been duly and validly executed and delivered and,
assuming due authorization and execution by the other party hereto, constitutes
its legal, valid and binding obligation enforceable against it in accordance
with its terms.
7. Governing Law;
Jurisdiction. This
Amendment and Agreement will be governed by and construed in accordance with the
laws of the State of New York. Any action against either party
hereto, including any action for provisional or conservatory measures or action
to enforce any judgment entered by any court in respect of any thereof, may be
brought in any federal or state court of competent jurisdiction located in the
Borough of Manhattan in the State of New York, and each party hereto irrevocably
consents to the jurisdiction and venue in the United States District Court for
the Southern District of New York and in the courts hearing appeals therefrom
unless no federal subject matter jurisdiction exists, in which event, each party
hereto irrevocably consents to jurisdiction and venue in the Supreme Court of
the State of New York, New York County, and in the courts hearing appeals
therefrom. Each party hereto hereby irrevocably waives, and agrees
not to assert, by way of motion, as a defense, counterclaim or otherwise, in any
action or proceeding with respect to this Amendment and Agreement, any claim
that it is not personally subject to the jurisdiction of the above-named courts
for any reason other than the failure to serve process in accordance with this
Amendment and Agreement, that it or its property is exempt or immune from
jurisdiction of any such court or from any legal process commenced in such
courts (whether through service of notice, attachment prior to judgment,
attachment in aid of execution of judgment, execution of judgment or otherwise),
and to the fullest extent permitted by applicable law, that the suit, action or
proceeding in any such court is brought in an inconvenient forum, that the venue
of such suit, action or proceeding is improper, or that this Amendment and
Agreement, or the subject matter hereof or thereof, may not be enforced in or by
such courts and further irrevocably waives, to the fullest extent permitted by
applicable law, the benefit of any defense that would hinder, xxxxxx or delay
the levy, execution or collection of any amount to which the party is entitled
pursuant to the final judgment of any court having jurisdiction. Each
party expressly acknowledges that the foregoing waiver is intended to be
irrevocable under the laws of the State of New York and of the United States of
America.
8. WAIVER OF JURY
TRIAL. EACH
OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY
JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO
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THIS
AMENDMENT AND AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
9. Specific
Performance. The parties hereby acknowledge and agree that
each party would not have an adequate remedy at law for money damages, and
irreparable damage would occur, in the event that any of the provisions of this
Amendment and Agreement were not performed in accordance with their specific
terms or were otherwise breached. It is accordingly agreed that any
party shall be entitled to an injunction or injunctions to prevent breaches of
this Amendment and Agreement by the other party and to enforce specifically the
terms and provisions of this Amendment and Agreement against the other party,
this being in addition to any other remedy to which either such party is
entitled at law or in equity, and each party waives (a) the defense in any
action for an injunction or other equitable relief that a remedy at law would be
adequate and (b) agrees that any such action for injunctive relief or specific
performance may be brought in (and hereby irrevocably submits to the
jurisdiction of) any federal or state court in the State of New
York.
10. Severability. If
any provision of this Amendment and Agreement or the application thereof to any
person (including the officers and directors of the parties hereto) or
circumstance is determined by a court of competent jurisdiction to be invalid,
void or unenforceable, the remaining provisions hereof, or the application of
such provision to persons or circumstances other than those as to which it has
been held invalid or unenforceable, will remain in full force and effect and
shall in no way be affected, impaired or invalidated thereby, so long as the
economic or legal substance of the transactions contemplated hereby is not
affected in any manner materially adverse to any party. Upon such
determination, the parties shall negotiate in good faith in an effort to agree
upon a suitable and equitable substitute provision to effect the original intent
of the parties.
11. Counterparts and
Facsimile. For the convenience of the parties hereto, this
Amendment and Agreement may be executed in any number of separate counterparts,
each such counterpart being deemed to be an original instrument, and all such
counterparts will together constitute the same agreement. Executed
signature pages to this Amendment and Agreement may be delivered by facsimile or
other electronic means and such electronic signature pages will be deemed as
sufficient as if physical signature pages had been delivered.
12. No Other Amendment and
Agreements. Except to the extent expressly amended by this
Amendment and Agreement, all terms of the Investment Agreement shall remain in
full force and effect without amendment, change or modification.
13. References to Investment
Agreement. All references in the Investment Agreement to the
“Agreement” shall be deemed to be the Investment Agreement as amended by this
Amendment and Agreement.
IN
WITNESS WHEREOF, the Company and Lion have caused this Amendment and Agreement
to be executed as of the date first written above by their respective officers
thereunto duly authorized.
| AMERICAN APPAREL, INC. | |||
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By:
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/s/ Xxxxxx Xxxxxxxxxx
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Name:
Xxxxxx Xxxxxxxxxx
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Title: Chief
Financial Officer
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| LION/HOLLYWOOD L.L.C. | |||
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By:
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/s/ Xxxxx Xxxxx
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Name: Xxxxx
Xxxxx
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Title: President
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(Signature Page to Amendment and
Agreement)
