California Clothing Manufacturing Business

Sale of assets of American Apparel, LLC which is an American clothing manufacturer, designer, distributor, marketer and retailer based in Los Angeles, California. Includes:

1. (a) On the terms and subject to the conditions set forth in this Agreement, at the Closing, Purchaser or one or more of its designees will purchase, acquire and accept from the applicable Seller, and each applicable Seller will sell, transfer, convey and deliver to Purchaser or one or more of its designees, all of such Seller’s right, title and interest in, to and under the Purchased Assets, free and clear of all Encumbrances (as defined in the Sale Order) (other than Liens created by Purchaser andTransferred Exceptions) and Excluded Liabilities.
2. (b) The term “Purchased Assets” means the Foreign IP and all of the following properties, assets and rights of the Domestic Sellers, in each case, existing as of the Closing and not including any Excluded Asset:

• the Domestic IP;
• the Customer Information;
• the La Mirada Assets (unless otherwise designated by Purchaser as an “Excluded Asset” pursuant to Section 2.5);
• the Garden Grove Assets (unless otherwise designated by Purchaser as an “Excluded Asset” pursuant to Section 2.5);
• the Sequoia Assets (unless otherwise designated by Purchaser as an “Excluded Asset” pursuant to Section 2.5);
• the 747 Assets (unless otherwise designated by Purchaser as an “Excluded Asset” pursuant to Section 2.5);
• the Wholesale Inventory;
• all Contracts that have been designated by Purchaser for assumption and assignment to Purchaser by a Seller pursuant to Section 2.7 with respect to which an order has been entered by the Bankruptcy Court (which may be the Sale Order) authorizing the assumption and assignment of the Contract (such Contracts, the “Purchased Contracts”);
• the Wholesale Purchase Order Inventory;
• the WIP;
• all goodwill associated with items in clauses (i) to (x) above;
• all Documents to the extent permitted by applicable Laws; and
• all rights, claims, causes of action and credits owned by a Seller to the extent relating to any Purchased Asset or Assumed Liability, including (A) any such item arising under any guarantee, warranty, indemnity, right of recovery, right of set-off or similar right in favor of such Seller in respect of any Purchased Asset or Assumed Liability and (B) any causes of action arising under Chapter 5 of the Bankruptcy Code, relating to the Purchased Assets that are against or otherwise involving any counterparty to any Purchased Contract, other than rights of setoff and recoupment and other defenses to any claim (as defined in the Bankruptcy Code) asserted against any Seller in the Bankruptcy Cases.