Exhibit 10.1
INDEPENDENT CONTRACTOR AGREEMENT
          This Independent Contractor Agreement (the “Agreement”) is entered
into this 1st day of February, 2007 (“Effective Date”), by and between
L’Atelier, a California Limited Partnership (“Contractor”), and Guru Denim,
Inc., a California corporation (the “Company”), with respect to the following
facts:
RECITALS
     A. The Company is a corporation duly organized and qualified to do business
under the laws of the State of California and is engaged in the business of
designing, manufacturing and distributing clothing both domestically and
internationally.
     B. Contractor is engaged in the business of coordinating United States
wholesale full price sales, and wishes to provide her services to Company.
     C. Company wishes to retain Contractor on an exclusive basis to provide her
services to Company pursuant to the terms and conditions set forth in this
Agreement.
     NOW THEREFORE, in consideration of the mutual covenants in this Agreement
and for other good and valuable consideration, it is agreed as follows:
     1. Term and Termination. The term of the Agreement shall be five (5) years,
commencing as of the Effective Date, provided that neither party terminates this
Agreement earlier as allowed by this Section 1. Either party may terminate this
Agreement for any reason at any time by giving the other party twelve
(12) months prior written notice. Moreover, this Agreement shall terminate
automatically on the day Contractor dies or becomes permanently incapable of
performing her duties under this Agreement due to physical or mental illness or
injury. Upon termination of this Agreement, Contractor shall immediately return
to the Company any and all property owned by the Company.
     2. Duties. Contractor is engaged as a Coordinator of United States
wholesale full price sales, on an exclusive basis, to provide her services to
the Company.
          a. The Company shall not be required to make available to Contractor
any facilities or equipment.
          b. Contractor may hire or contract with other people to fulfill the
obligations under this Agreement, as Contractor deems necessary, or may be
required by the Company. Contractor understands, however, that this Agreement is
with Contractor alone, and that Contractor is solely responsible to see that its
terms are met. Contractor is solely responsible, also, for payments to anyone
else whom Contractor hires or with whom Contractor may contract.
     3. Compensation. As compensation for the services rendered by Contractor
under this Agreement, Contractor shall be entitled to a commission based on Net
Sales in the Territory as set forth on Exhibit A attached hereto. For purposes
of this Agreement, “Net Sales” shall refer to the gross purchase price received
by the Company from the sale of any product less

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interest or finance charges, discounts, warehousing allowances, insurance and
transportation charges, taxes, rebates, cancellations and returns. For purposes
of this Agreement, the “Territory” shall refer to full price sales made to
retailers in the United States, with the exception of True Religion branded,
company owned stores. All claims of Contractor for payment of her invoices by
the Company are waived by Contractor if not made within sixty (60) days from the
date of the expiration or termination of this Agreement for any reason. The
Company shall pay commissions to Contractor within fifteen (15) calendar days
after the end of each calendar month of invoicing. Subject to the foregoing,
commissions on orders taken during the term of this Agreement shall be paid when
shipped regardless of the expiration or termination date of this Agreement.
     4. Expenses. It is understood and acknowledged by the parties that
Contractor, in connection with the services to be performed by Contractor for
the Company, is obligated to expend monies for business expenses. It is
expressly acknowledged and agreed that Contractor shall bear all such expenses,
including without limitation all salespeople’s salaries and compensation related
expenses, showroom expenses, travel and entertainment expenses, fifty percent
(50%) of U.S. cooperative advertising expenses, and Contractor’s share of trade
show participation expenses. Contractor shall not be entitled to any
reimbursement or allowance for expenses from the Company. Moreover, as part of
this Agreement, Contractor shall be required to establish two (2) dedicated
Company showrooms, one in Los Angeles of at least 6,000 sq. ft., and one in
Manhattan, New York of at least 6,000 sq. ft.. Any and all samples of Company
product needed by the Contractor to perform her services hereunder shall be paid
for solely and exclusively by the Contractor at regular wholesale United States
line list prices.
     5. Staffing Requirements. Contractor will employ for the exclusive sale of
True Religion products a minimum of eleven (11) salespeople to handle men’s,
women’s, and kid’s sales, at least four (4) of which will exclusively handle
men’s specialty store sales, at least four (4) of which will exclusively handle
women’s specialty store sales, one (1) of which will exclusively handle key
men’s accounts, one (1) of which will exclusively handle key women’s accounts
and one (1) of which will handle kid’s sales. In addition, contractor will
employ at least two (2) merchandise coordinators.
     6. Reporting Requirements. Contractor will provide at least bi-weekly
salespeople’s activity reports and pulse reports in similar form and substance
at to what is detailed in Exhibit B, Exhibit C, and Exhibit D.
     7. Confidential Information. Contractor acknowledges that many aspects of
the business and affairs of the Company and its parent company, True Religion
Apparel, Inc., a California corporation (“True Religion”), are confidential and
that Contractor heretofore had or will have access to certain commercial and
other confidential, private, or personal information relating to or concerning
the Company and/or True Religion (“Confidential Information”). Contractor
acknowledges that all Confidential Information is exclusively owned and
controlled by the Company and/or True Religion.
          a. Contractor expressly agrees that she shall not, directly or
indirectly, verbally or otherwise, either during or after the performance of
services for the Company,

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disclose, publish, reveal, disseminate, use or cause to be disclosed, published,
revealed, or disseminated, without the prior express written consent of the
Chief Financial Officer of the Company any Confidential Information whatsoever.
          b. Contractor acknowledges and agrees that any disclosure of
Confidential Information will cause irreparable harm to the Company and that
these damages are not susceptible to measure. In the event of a breach or
threatened breach of this Agreement, Contractor and the Company hereby agree
that any remedy at law for any breach or threatened breach of this Agreement
will be inadequate and, accordingly, each party hereby stipulates that the
Company is entitled to obtain injunctive relief for any such breaches or
threatened breaches, without the need to prove actual damages or for the posting
of a bond. The injunctive relief provided for in this paragraph is in addition
to, and is not in limitation of, any and all other remedies at law or in equity
otherwise available to the Company.
          c. Contractor understands that she will also be required to sign the
Company’s standard Non-Disclosure Agreement. Contractor also understands that
this Confidential Information provision is a material term of this Agreement and
any breach of this provision shall be considered a material breach.
     8. Independent Contractor Status. Contractor is retained by the Company
only for the purposes and to the extent set forth in this Agreement, and
Contractor’s relationship to the Company shall be that of an independent
contractor. Except as set forth herein, Contractor may use her entire time,
energy and skill as she sees fit. Contractor shall not be considered under this
Agreement as having employee status or as being entitled to participate in any
plans, arrangements or distributions by the Company pertaining to or in
connection with any pension, stock, bond or profit sharing plan or any other
similar fringe benefit for the Company’s regular employees.
     9. Taxes. Contractor acknowledges that no federal or state withholding
taxes, FICA, SDI, or other employee payroll taxes or deductions are made with
respect to compensation paid to Contractor pursuant to this Agreement.
Contractor is responsible for all such taxes, and agrees to report for federal
and state income all such compensation, and to pay all taxes due thereon and to
indemnify, defend and hold the Company harmless in the event that any claims
made by any taxing authority, by reason of Contractor’s failure to properly pay
any and all taxes which are due in relation to the services provided pursuant to
this Agreement.

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     10. Notice. All notices permitted or required by this Agreement shall be
mailed, certified or registered U.S. Mail, return receipt requested, postage
prepaid and addressed as follows:
To Contractor:
Ms. Jana Rangel
L’Atelier
110 East 9th Street
Suite A541
Los Angeles, CA 90079
Fax: (213) 683-0080

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To the Company:
Guru Denim, Inc.
1525 Rio Vista Avenue
Los Angeles, CA 90023
Fax: (323) 266-3075
Attention: President
     11. General Terms and Conditions.
          a. Entire Agreement. This Agreement constitutes the entire agreement
between Contractor and the Company, and supersedes all prior agreements,
representations and understandings of the parties whether written or oral.
          b. Successors and Assigns. The provisions of this Agreement shall
inure to the benefit of and be binding upon the Company and Contractor and their
respective successors and permitted assigns. This Agreement shall not be
assigned, nor shall any duties under this Agreement be delegated by Contractor
without the prior written consent of the Company.
          c. Governing Law. This Agreement shall be governed by and interpreted
under the internal laws of the State of California.
          d. Severability. The invalidity or unenforceability of any particular
provision of this Agreement shall not affect the other provisions, and this
Agreement shall be construed in all respects as if any invalid or unenforceable
provision were omitted.
          e. Opportunity to Consult With Legal Counsel. Contractor has entered
into this Agreement freely and voluntarily and has either consulted with
independent legal counsel or has had the opportunity to do so prior to
execution.
          f. Amendments; Waivers. This Agreement may be amended, modified or
supplemented only by a writing executed by each of the parties. Either party may
in writing waive any provision of this Agreement to the extent such provision is
for the benefit of the waiving party. No waiver by either party of a breach of
any provision of this Agreement shall be construed as a waiver of any subsequent
or different breach, and no forbearance by a party to seek a remedy for
noncompliance or breach by the other party shall be construed as a waiver of any
right or remedy with respect to such noncompliance or breach.
          g. Attorneys’ Fees. The prevailing party in any suit or other
proceeding brought to enforce, interpret or apply any provisions of this
Agreement, shall be entitled to recover all costs and expenses of the proceeding
and investigation, including all attorneys’ fees.
          h. Arbitration. Any dispute relating to the terms, interpretation or
performance of this Agreement (other than claims for preliminary injunctive
relief or other pre-

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judgment remedies) will be resolved at the request of either party through
binding arbitration. Arbitration will be conducted in Los Angeles County,
California, under the rules and procedures of the American Arbitration
Association (“AAA”). The parties will request that AAA appoint a single
arbitrator. In the event any provision of this Agreement is held by a tribunal
of competent jurisdiction to be contrary to the law, the remaining provision of
this Agreement will remain in full force and effect. The waiver of any breach or
default of this Agreement will not constitute a waiver of any subsequent breach
or default, and will not act to amend or negate the rights of the waiving party.
          i. Right of Set-Off. All payments hereunder are subject to the
Company’s rights to set-of against such payments as a result of any monetary
obligations or amounts due to the Company by Contractor or as a result of
Contractor’s breach of any obligation to the Company contained herein.
          j. Indemnification. Contractor shall indemnify and hold the Company
harmless from any and all claims of third parties resulting (i) solely from acts
or omissions of Contractor which were not authorized by the Company and beyond
the scope of Contractor’s authority under this Agreement, and (ii) from
Contractor’s performance of the terms of this Agreement. Company shall indemnify
and hold Contractor harmless from any and all products liability claims of third
parties.
          k. License and Permits. Contractor represents and warrants she has all
business licenses and permits necessary to perform the services for the Company
described herein.
          l. Construction. The language of this Agreement shall be construed as
a whole, according to its fair meaning, not strictly for or against Contractor
or the Company, and with no regard whatsoever to the identity or status or any
person or persons who drafted all or any portion of this Agreement.
          m. Counterparts. This Agreement may be executed by the Company and by
Contractor in two or more counterparts, each of which shall be deemed an
original, but all of which shall constitute one instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of
the Effective Date.

          “Contractor”   “Company”
 
            GURU DENIM, INC.
 
       
/s/ Jana Rangel 
  By:   /s/ Michael Buckley 
 
       
     Jana Rangel
       
 
       
 
      Michael Buckley, President 
 
       
 
      [Print Name and Title]

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EXHIBIT A
COMMISSION BASED ON SALES
IN THE TERRITORY
     As set forth in the Independent Contractor Agreement (the “Agreement”), to
which this Exhibit is attached, the “Territory” referenced in this Exhibit A
shall refer to full price wholesale sales made in the United States, with the
exclusion of True Religion branded company owned stores. The commission to be
paid by Guru Denim, Inc. (the “Company”) pursuant to the Agreement and this
Exhibit A shall apply only to sales made by True Religion Apparel, Inc. and the
Company. Notwithstanding any other provisions of the Agreement, Contractor shall
not be eligible for any commission whatsoever regarding sales made by any of
True Religion Apparel, Inc.’s or the Company’s licensees. The commission
referred to in the Agreement and this Exhibit A is based off of the Net Sales
value of the product sold to each United States full price retailer.
     The commission rate to be applied to the above-referenced sales shall be as
follows:

  •   Contractor shall be paid 4% of Net Sales, as defined below, sold directly
to department stores and any other accounts that receive a discount, including
any accounts for which the Company pay freight costs.     •   Contractor shall
be paid 8% of the Net Sales, as defined below, to all specialty stores that pay
full price and do not receive any type of discount or free freight.

     For purposes of this Exhibit A, “Net Sales” shall refer to the gross
purchase price received by the Company from the sale of any product, discounts,
warehousing allowances, insurance and transportation charges, taxes, rebates,
cancellations and returns.
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EXHIBIT B
TRUE RELIGION
Spring 2007
ACCOUNT
EXECUTIVE:                                        

                                                  ACCOUNT     FALL 06    
HOLIDAY 06     SP 07 PROJ.     SP 07ACTUAL     CIMS     APPT     COMMENTS    

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EXHIBIT C
TRUE RELIGION
Spring 2007 Projections

                                      SALES REP     FALL 06     HOLIDAY 06    
SP 07 PROJ.     SP 07ACTUAL     CIMS    

 

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EXHIBIT D
“TRUE RELIGION PULSE REPORT”
An overview of your area of responsibility

         
To
  : Mike Buckley    
From
  :    
Date
  :    

General comments on trade in your area
What is selling?
What are our competitors selling? / Noticeable trends?
“THE PULSE”
     True Religion Customers weekly sales.
Customer 1:

          Week ending date   Units   Value          

General comments from the retailer

 

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Assessment of True Religion performance
Good {     }          Fair {     }          Poor {     }
Factors affecting assessment
“THE PULSE”
QUESTIONS YOU REQUIRE ANSWERING
Sales Management:
Credit Control:
Customer Services:
Design/Production:
General:

         
Signed:
  Date: