Exhibit 10.1


 


TRUE RELIGION APPAREL, INC.

INDEMNIFICATION AGREEMENT


 


THIS INDEMNIFICATION AGREEMENT (the “Agreement”) is entered into as of                  
   ,     , by and between True Religion
Apparel, Inc., a Delaware corporation (the “Company”),
and                ,
a [director/officer] of the Company (the “Indemnitee”).  This Agreement shall be effective as of the
date set forth above, and shall apply to any indemnifiable event that occurred
prior to or after such date if Indemnitee was an officer or director of the
Company, or was serving at the request of Company as an officer or director of
another corporation, partnership, joint venture, trust or other enterprise, at
the time such indemnifiable event occurred.


 


B A C K G R O U N D


 


A.            In light of the litigation costs and risks to directors
and officers resulting from their service to companies, and the desire of the
Company to attract and retain qualified individuals to serve as directors and
officers, it is prudent and necessary for the Company to indemnify and advance
expenses on behalf of its directors and officers to the extent permitted by
applicable law so that they will continue to serve the Company free from undue
concern regarding such risks.


 


B.            The Indemnitee is a member of the Board of Directors or
an officer of the Company and, in that capacity, performs a valuable service
for the Company.


 


C.            In order to induce the Indemnitee to continue to serve as
a member of the Board of Directors or as an officer of the Company, as
applicable, and to establish a specific procedure for addressing
indemnification matters if and as they arise, the Company has agreed to a
contractual indemnification arrangement on the terms set forth in this
Agreement.


 


THE PARTIES AGREE AS FOLLOWS:


 


1.             Definitions.  For purposes of this Agreement,
the following terms have the following meanings:


 


(a)           “Beneficial Owner” or “Beneficial Ownership”
shall have the meanings set forth in Rule 13d-3 promulgated under the Exchange
Act as in effect on the date hereof.


 


(b)           “Certificate of Incorporation”
means, with respect to any entity, its certificate of incorporation, articles
of incorporation or similar governing document.


 


(c)           “Change in Control” means any of the following
events:


 


(i)            The
acquisition in one or more transactions by any “person” (as the term person is
used for purposes of Section 13(d) or 14(d) of the Exchange Act) of Beneficial
Ownership of shares representing at least a majority of the total voting power
of the Voting Stock (as hereinafter defined); or


 


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(ii)           Consummation
by the Company, in a single transaction or series of related transactions, of
(A) a merger or consolidation involving the Company if the stockholders of the
Company immediately prior to such merger or consolidation do not own, directly
or indirectly, immediately following such merger or consolidation, at least a
majority of the total voting power of the outstanding voting securities of the
entity resulting from such merger or consolidation or (B) a sale, conveyance,
lease, license, exchange or transfer (for cash, shares of stock, securities or
other consideration) of a majority or more of the assets or earning power of
the Company.


 


Notwithstanding the foregoing, a “Change in
Control” shall not be deemed to occur solely because a majority or more of
the total voting power of the Voting Stock is acquired by (A) a trustee or
other fiduciary holding securities under one or more employee benefit plans
maintained by the Company or any of its subsidiaries or (B) any corporation
that, immediately prior to such acquisition, is owned directly or indirectly by
the stockholders of the Company in the same proportion as their ownership of
stock in the Company immediately prior to such acquisition.


 


(d)           “Company Entity” means the Company, any of its
subsidiaries and any other corporation, partnership, limited liability company,
joint venture, trust, employee benefit plan or other enterprise with respect to
which Indemnitee serves as a director, officer, employee, partner,
representative, fiduciary or agent, or in any similar capacity, at the request
of the Company.


 


(e)           “Corporate Status” describes the status of a
person in his or her capacity as a director or officer of the Company
(including, without limitation, one who serves at the request of the Company as
a director, officer, employee, fiduciary or agent of any Company Entity).


 


(f)            “Disinterested Director” means a director
of the Company who is not (at the time of the vote) and was not a party to the
Proceeding in respect of which indemnification is sought under this Agreement
or otherwise.


 


(g)           “Exchange Act” means the Securities Exchange
Act of 1934, as amended, and the rules and regulations promulgated thereunder.


 


(h)           “Expenses” shall mean all reasonable direct
and indirect costs, fees and expenses and shall specifically include all
reasonable attorneys’ fees and disbursements, retainers, court costs,
transcript costs, fees and costs of experts, witnesses, professional advisers
and private investigators, arbitration expenses, travel expenses, duplicating
costs, printing and binding costs, telephone charges, postage, delivery service
fees, and all other disbursements or expenses of the types customarily incurred
in connection with prosecuting, defending, preparing to prosecute or defend,
investigating, being or preparing to be a witness, in, or otherwise
participating in, a Proceeding, including, but not limited to, the premium for
appeal bonds, attachment bonds or similar bonds and all interest, assessments
and other charges paid or payable in connection with or in respect of any such
Expenses; provided, however, that “Expenses” shall not include any judgments,
fines or amounts paid in settlement. 
Should any payment by the Company under this Agreement be determined to
be subject to any federal, state or local income 


 


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or excise tax, “Expenses”
shall also include such amounts as are necessary to place Indemnitee in the
same after-tax position (after giving effect to all applicable taxes) as
Indemnitee would have been in had no such tax been determined to apply to such
payments.


 


(i)            “Independent Counsel” means a law firm or
attorney that neither is presently nor in the past two years has been retained
to represent: (i) the Company or Indemnitee in any matter material to the
Company or Indemnitee (other than as Independent Counsel under this Agreement
or similar agreements), (ii) any other party to the Proceeding in respect
of which indemnification is sought under this Agreement or otherwise; or (iii)
the Beneficial Owner directly or indirectly, of securities of the Company
representing five percent (5%) or more of the combined voting power of the
Company’s then outstanding shares.  In
addition, the term “Independent Counsel” does not include any law firm or
attorney who, under the applicable standards of professional conduct then
prevailing, would have a conflict of interest in representing either the
Company or Indemnitee in an action to determine Indemnitee’s right to
indemnification under this Agreement or otherwise.


 


(j)            “Liabilities” means liabilities and
losses of any type whatsoever, including, without limitation, judgments, fines,
excise taxes and penalties (including ERISA excise taxes and penalties) and
amounts paid in settlement (including all interest, assessments and other
charges paid or payable in connection with or in respect of such liabilities
and losses), actually incurred by Indemnitee in connection with or as a result
of a Proceeding.


 


(k)            “Non-Affiliate Director” means a director
of the Company who is not also (i) an officer or employee of the Company; or
(ii) a director, officer or employee of any Company Entity.


 


(l)            “Proceeding” includes any actual,
threatened, pending or completed action, suit, arbitration, alternate dispute
resolution mechanism, investigation, inquiry, administrative hearing or any
other actual, threatened, pending or completed proceeding, whether formal or
informal, whether brought by or in the right of the Company or otherwise and
whether civil, criminal, administrative or investigative in nature, in which
Indemnitee was, is, may be or will be involved as a party, witness or
otherwise, by reason of Indemnitee’s Corporate Status or by reason of any
action taken by Indemnitee or of any inaction on the Indemnitee’s part while
acting as director or officer of any Company Entity (in each case whether or
not Indemnitee is acting or serving in any such capacity or has such status at
the time any liability or expense is incurred for which indemnification or
advancement of Expenses can be provided under this Agreement).


 


2.             Indemnification
- General.  On the terms and subject to the conditions
of, and in accordance with the procedures set forth in, this Agreement, the
Company shall indemnify Indemnitee with respect to, and hold Indemnitee
harmless from and against, all Liabilities, Expenses and other matters that may
result from or arise in connection with Indemnitee’s Corporate Status and shall
advance Expenses to Indemnitee, in each case to the fullest extent permitted by
the Delaware General Corporation Law (the “DGCL”) or any other applicable law in effect on the date
hereof, and to such greater extent as the DGCL or any other applicable law may
hereafter from time to time permit, notwithstanding that such indemnification
or advances are not specifically authorized by other provisions of this
Agreement.  The indemnification 


 


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obligations of the Company under this Agreement (a) shall
continue after such time as Indemnitee ceases to serve as a director of the
Company or in any other Corporate Status and (b) include, without limitation,
claims for monetary damages against Indemnitee in respect of any alleged breach
of fiduciary duty, to the fullest extent permitted under applicable law
(including, if applicable, Section 145 of the Delaware General Corporation Law)
as in existence on the date hereof and as amended from time to time.


 


3.             Proceedings
Other Than Proceedings by or in the Right of the Company.  If by reason of Indemnitee’s
Corporate Status Indemnitee is, or is threatened to be made, a party to or a
participant in any Proceeding (as hereinafter defined) other than a Proceeding
by or in the right of the Company to procure a judgment in its favor, the
Company shall indemnify Indemnitee with respect to, and hold Indemnitee
harmless from and against, all Expenses and Liabilities reasonably incurred by
Indemnitee or on behalf of Indemnitee in connection with such Proceeding or any
claim, issue or matter therein, if Indemnitee acted in good faith and in a
manner Indemnitee reasonably believed to be in, or not opposed to, the best
interests of the Company and, with respect to any criminal Proceeding, had no
reasonable cause to believe Indemnitee’s conduct was unlawful.


 


4.             Proceedings
by or in the Right of the Company.  If by reason of Indemnitee’s Corporate Status
Indemnitee is, or is threatened to be made, a party to or a participant in any
Proceeding by or in the right of the Company to procure a judgment in its
favor, the Company shall indemnify Indemnitee with respect to, and hold
Indemnitee harmless from and against, all Expenses reasonably incurred by
Indemnitee or on behalf of Indemnitee in connection with such Proceeding if Indemnitee
acted in good faith and in a manner Indemnitee reasonably believed to be in, or
not opposed to, the best interests of the Company; provided, however,
that indemnification against such Expenses shall be made in respect of any
claim, issue or matter in such Proceeding as to which Indemnitee shall have
been adjudged by a court of competent jurisdiction to be liable to the Company
only if (and only to the extent that) the Court of Chancery of the State of
Delaware or the court in which such Proceeding shall have been brought or is
pending shall determine that despite such adjudication of liability and in
light of all circumstances such indemnification may be made.


 


5.             Mandatory
Indemnification in Case of Successful Defense.  Notwithstanding any other provision
of this Agreement, to the extent that Indemnitee is, by reason of Indemnitee’s
Corporate Status, a party to (or a participant in) and is successful, on the
merits or otherwise, in defense of any Proceeding (including, without
limitation, any Proceeding brought by or in the right of the Company), the
Company shall indemnify Indemnitee with respect to, and hold Indemnitee
harmless from and against, all Expenses reasonably incurred by Indemnitee or on
behalf of Indemnitee in connection therewith. 
If Indemnitee is not wholly successful in defense of such Proceeding but
is successful, on the merits or otherwise, as to one or more but less than all
claims, issues or matters in such Proceeding, the Company will indemnify
Indemnitee against all Expenses reasonably incurred by Indemnitee or on behalf
of Indemnitee in connection with each successfully resolved claim, issue or
matter.  For purposes of this Section 5
and without limitation, the termination of any claim, issue or matter in such a
Proceeding by dismissal, with or without prejudice, on substantive or
procedural grounds, including, but not limited to, a successful prosecution of
a motion to dismiss, a motion for summary judgment, or 


 


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by settlement (with or without court approval) shall
be deemed to be a successful result as to such claim, issue or matter.


 


The
Company acknowledges that a settlement or other disposition short of final
judgment may be successful if it permits a party to avoid expense, delay,
distraction, disruption and uncertainty.  In the event that any action, claim or
proceeding to which Indemnitee is a party is resolved in any manner other than
by adverse judgment against Indemnitee (including, without limitation
settlement of such action, claim or proceeding with or without payment of money
or other consideration) it shall be presumed that Indemnitee has been
successful on the merits or otherwise in such action, suit or proceeding.  Anyone seeking to overcome this presumption
shall have the burden of proof and the burden of persuasion, by clear and
convincing evidence.


 


6.             Partial
Indemnification.  If Indemnitee is entitled to indemnification
by the Company for some or a portion of Expenses or Liabilities but not for the
total amount, the Company shall nevertheless indemnify Indemnitee for the
portion of such Expenses and Liabilities to which Indemnitee is entitled to be
indemnified.


 


7.             Indemnification
for Additional Expenses Incurred to Secure Recovery or as Witness.


 


(a)           The
Company will indemnify Indemnitee with respect to, and hold Indemnitee harmless
from and against, any and all Expenses and, if requested by Indemnitee, will
(within twenty (20) calendar days of such request) advance such Expenses to
Indemnitee, which are reasonably incurred by Indemnitee in connection with any
action concerning (i) indemnification or advance payment of Expenses by the
Company under this Agreement, any other agreement, the Certificate of
Incorporation or By-laws of the Company as now or hereafter in effect; or (ii)
recovery under any director and officer liability insurance policies maintained
by any the Company or any other Company Entity to the fullest extent permitted
by law.


 


(b)           To
the extent that Indemnitee is, by reason of Indemnitee’s Corporate Status, a
witness in any Proceeding to which Indemnitee is not a party, the Company will
indemnify Indemnitee with respect to, and hold Indemnitee harmless from and
against, and the Company will advance, all Expenses reasonably incurred by
Indemnitee or on behalf of Indemnitee in connection therewith.


 


8.             Advancement
of Expenses.


 


(a)           The
Company shall advance, to the fullest extent permitted by law, all Expenses
reasonably incurred by or on behalf of Indemnitee in connection with the
investigation, defense, settlement or appeal of any Proceeding within ten (10)
calendar days after the receipt by the Company of a statement or statements
from Indemnitee requesting such advance or advances from time to time, whether
prior to or after final disposition of such Proceeding.  Such advances shall, in all events, be (i)
unsecured and interest free; and (ii) made without regard to Indemnitee’s
ultimate entitlement to be indemnified, held harmless or exonerated under the
other provisions of this Agreement, or Indemnitee’s ability to repay the
advances.


 


(b)           To
obtain advancement of Expenses under this Agreement, Indemnitee shall submit to
the Company a written request for advancement of Expenses accompanied by 


 


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appropriate
supporting documentation and, to the extent required by applicable law, an
unsecured written undertaking by or on behalf of Indemnitee to repay any
Expenses advanced if it shall ultimately be determined that Indemnitee is not
entitled to be indemnified against such Expenses.  Upon submission of such request for
advancement of Expenses and unsecured written undertaking, Indemnitee shall be
entitled to advancement of Expenses as provided in this Section 8,
and such advancement of Expenses shall continue until such time (if any) as
there is a final adjudication, not subject to further appeal, that Indemnitee
is not entitled to indemnification.


 


(c)           At
the request of the Indemnitee, any dispute concerning the advancement of
Expenses shall be resolved by arbitration before an arbitrator selected by
Indemnitee and approved by the Company. 
If the parties cannot agree on a single arbitrator, then the claim shall
be heard by a panel of three arbitrators, with one selected by Indemnitee, one
selected by the Company and one selected jointly by the foregoing two
arbitrators.  Each of the arbitrators
shall be a litigation or corporate attorney with experience in the field of
officer and director indemnification. 
The arbitrators shall be selected within fifteen (15) days after demand
for arbitration and shall render a decision within thirty (30) days after
selection, unless good cause is shown for requiring a longer decision
period.  The Company shall act in utmost
good faith to provide timely information to the arbitrators and to insure
Indemnitee a full opportunity to defend against the Company’s claim that
Indemnitee is not entitled to an advance of Expenses. The Company shall
indemnify Indemnitee against all Expenses incurred by Indemnitee under the
dispute resolutions proceedings set forth in this Section 8(c), unless a
court of competent jurisdiction finds that each of the claims and/or defenses
by Indemnitee in the action or proceeding for which an advance is sought was
frivolous or made in bad faith.


 


9.             Establishment
of a Trust.  The Company shall, upon written request of a
majority of Non-Affiliate Directors (as hereinafter defined), create a trust
for the benefit of Indemnitee (the “Trust”) following initiation of a
Proceeding for which Indemnitee reasonably believes that he or she may be
entitled to indemnification by the Company under this Agreement.  From time to time upon written request of
Indemnitee, the Company shall fund such Trust in an amount sufficient to
satisfy any and all Expenses reasonably anticipated at the time of each such
request to be incurred by or on behalf of Indemnitee in connection with such
Proceeding within ten (10) days of such request.  The trustee of the Trust (the “Trustee”)
shall be a bank or trust company or other individual or entity chosen by
Indemnitee and reasonably acceptable to the Company.  The amount or amounts to be deposited in the
Trust pursuant to the foregoing funding obligation shall be determined by
mutual agreement of Indemnitee and the Company or, if the Company and
Indemnitee are unable to reach an agreement, by Independent Counsel selected in
accordance with this Agreement.  The
terms of the Trust shall provide that (a) the Trust shall not be revoked or the
principal thereof invaded, without the written consent of Indemnitee; (b) the
Trustee shall advance, within ten (10) calendar days of a request by
Indemnitee, any and all Expenses reasonably incurred by or on behalf of
Indemnitee in connection with the investigation, defense, settlement or appeal
of any Proceeding, any required determination concerning the reasonableness of
the Expenses to be made by the Independent Counsel (and Indemnitee hereby
agrees to reimburse the Trust under the circumstances in which Indemnitee would
be required to reimburse the Company for Expenses advanced under this
Agreement); (c) the Trust shall continue to be funded by the Company in
accordance with the funding obligation set forth above; (d) the Trustee shall
promptly pay to Indemnitee all amounts 


 


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for which Indemnitee shall be entitled to
indemnification pursuant to this Agreement; and (e) all unexpended funds in the
Trust shall revert to the Company upon a final determination by Independent
Counsel or the mutual agreement by the Company and Indemnitee that Indemnitee
has been fully indemnified and held harmless under the terms of this
Agreement.  The Trust shall be governed
by Delaware law (without regard to its conflicts of laws rules) and the Trustee
shall consent to the exclusive jurisdiction of the Delaware Court in accordance
with this Agreement.  Nothing in this Section
9 shall relieve the Company of any of its obligations under this Agreement.


 


10.          Specific
Limitations on Indemnification.  Notwithstanding anything in this Agreement to
the contrary, the Company shall not be obligated under this Agreement to make
any payment to Indemnitee with respect to any Proceeding:


 


(a)           if and to the extent that Indemnitee
has otherwise actually received such payment under any insurance policy,
contract, agreement or otherwise; provided, however, that the
Company hereby agrees it is the indemnitor of first resort to provide
advancement or indemnification;


 


(b)           for Liabilities in connection with a
Proceeding settled without the Corporation’s consent, which consent, however,
shall not be unreasonably withheld;


 


(c)           for an accounting of profits made
from the purchase or sale by Indemnitee of securities of the Corporation within
the meaning of section 16(b) of the Exchange Act, or similar provisions of any
state statutory or common law. 
Notwithstanding anything to the contrary stated or implied in Section
10(c) above, indemnification pursuant to this Agreement relating to any
Proceeding against Indemnitee for an accounting of profits made from the
purchase or sale by Indemnitee of securities of the Company pursuant to the
provisions of Section 16(b) of the Exchange Act or similar provisions of any
federal, state or local laws shall not be prohibited if Indemnitee ultimately
establishes in any Proceeding that no recovery of such profits from Indemnitee
is permitted under Section 16(b) of the Exchange Act or similar provisions of
any federal, state or local laws;


 


(d)           to the extent it would be otherwise
prohibited by law, if so established by a judgment or other final adjudication
adverse to Indemnitee; or


 


(e)           commenced by Indemnitee (other than a
Proceeding commenced by Indemnitee to enforce Indemnitee’s rights under this
Agreement) unless the commencement of such Proceeding was authorized by the
Board of Directors.


 


11.          Procedural
Matters.


 


(a)           To obtain indemnification under this
Agreement, Indemnitee shall submit to CEO a written request for indemnification
at such time as determined by Indemnitee in Indemnitee’s sole discretion.


 


(b)           Upon written request by Indemnitee
for indemnification pursuant to this Agreement, a determination, if required by
applicable law, with respect to Indemnitee’s entitlement to indemnification
shall be made as follows: (i) upon Indemnitee’s request, by 


 


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Independent Counsel
selected by the Company in a written opinion to the board of directors of the
Company, a copy of which shall be delivered to Indemnitee; or (ii) if no such
request is made by Indemnitee for a determination by Independent Counsel, (A)
by a majority vote of a quorum of the Disinterested Directors; or (B) if a
quorum of Disinterested Directors is not obtainable or, even if obtainable, if
a majority of such quorum of Disinterested Directors so directs, by Independent
Counsel selected (x) if a quorum of Disinterested Directors is obtainable, by a
majority vote of a quorum of Disinterested Directors or (y) if a quorum of
Disinterested Directors is not obtainable, by the board of directors of the Company,
in each case in a written opinion to the board of directors of the Company, a
copy of which shall be delivered to Indemnitee; or (C) if a majority of a
quorum of Disinterested Directors so directs, by the stockholders of the
Company.  If it is so determined that
Indemnitee is entitled to indemnification, payment to Indemnitee shall be made
within ten (10) calendar days after such determination.


 


(c)           If the person, persons or entity
empowered or selected to determine Indemnitee’s entitlement to indemnification
has not made a determination within sixty (60) calendar days after receipt by
the Company of the request by Indemnitee for indemnification, the requisite
determination of entitlement to indemnification will be deemed to have been
made, and Indemnitee, to the fullest extent not prohibited by law, shall be
entitled to such indemnification, absent (i) a misstatement by Indemnitee of a
material fact, or an omission of a material fact by Indemnitee necessary to
make Indemnitee’s statement not materially misleading, in connection with the
request for indemnification; or (ii) a final judicial determination that any or
all such indemnification is expressly prohibited under applicable law; provided,
however, that such sixty (60) calendar day period may be extended for a
reasonable time, not to exceed an additional thirty (30) calendar days, if the
person, persons or entity making the determination with respect to entitlement
to indemnification in good faith requires such additional time to obtain or
evaluate documentation and/or information relating to such determination.


 


(d)           The Company will promptly advise
Indemnitee in writing with respect to any determination that Indemnitee is or
is not entitled to indemnification, including a description of any reason or a
basis for which indemnification has been denied.  Indemnitee shall reasonably cooperate with
the person, persons or entity making such determination with respect to
Indemnitee’s entitlement to indemnification, including providing to such
person, persons or entity upon reasonable advance request any documentation or
information that is not privileged or otherwise protected from disclosure and
that is reasonably available to Indemnitee and reasonably necessary to such
determination.  Any costs or Expenses (including
attorneys’ fees and disbursements) incurred by Indemnitee in so cooperating
with the person, persons or entity making such determination shall be borne by
the Company (irrespective of the determination as to Indemnitee’s entitlement
to indemnification), and the Company hereby indemnifies and agrees to hold
Indemnitee harmless therefrom.


 


(e)           If (i) a determination is made
pursuant to this Agreement that Indemnitee is not entitled to indemnification
under this Agreement or (ii) there has been any failure by the Company to make
timely payment or advancement of any amounts due hereunder, Indemnitee may
petition the Court of Chancery of the State of Delaware to adjudicate
Indemnitee’s entitlement to such indemnification or advancements due
hereunder.  The Company will pay any and
all Expenses reasonably incurred by or on behalf of Indemnitee in connection
with the 


 


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investigation and
resolution of such issues.  If
determination is made pursuant to this Agreement that Indemnitee is entitled to
indemnification under this Agreement, then the Company shall be bound by such
determination, including in any Proceeding.


 


(f)            The parties intend and agree that,
to the extent permitted by law, in connection with any determination with
respect to entitlement to indemnification hereunder: (i) it will be presumed
that Indemnitee is entitled to indemnification under this Agreement, and that
the Company or any other person or entity challenging such right will have the
burden of proof to overcome that presumption in connection with the making by
any person, persons or entity of any determination contrary to that
presumption; (ii) the termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall
not, of itself, create a presumption that Indemnitee did not act in good faith
and in a manner which Indemnitee reasonably believed to be in or not opposed to
the best interests of the applicable Company Entity, and, with respect to any
criminal action or proceeding, had reasonable cause to believe that Indemnitee’s
conduct was unlawful; (iii) Indemnitee will be deemed to have acted in good
faith if Indemnitee’s action is based on the records or books of account of the
applicable Company Entity, including financial statements, or on information
supplied to Indemnitee by the officers, employees, or committees of the board
of directors of the applicable Company Entity, or on the advice of legal counsel
for the applicable Company Entity or for Indemnitee or on information or
records given in reports made to the applicable Company Entity by an
independent certified public accountant or by an appraiser or other expert or
advisor selected by the applicable Company Entity or Indemnitee; and (iv) the
knowledge and/or actions, or failure to act, of any director, officer, agent or
employee of any of the Company Entities or relevant enterprises will not be
imputed to Indemnitee in a manner that limits or otherwise adversely affects
Indemnitee’s rights hereunder.  The
provisions of this clause (f) shall not be deemed to be exclusive or to limit
in any way the other circumstances in which Indemnitee may be deemed to have
met the applicable standard of conduct set forth in this Agreement.


 


12.          Notice
by Indemnitee and Defense of Proceedings.  Indemnitee shall promptly notify the Company
in writing upon being served with any summons, citation, subpoena, complaint,
indictment, information or other document relating to any matter which may give
rise to a claim for indemnification under this Agreement or otherwise;
provided, however, that a failure of Indemnitee to provide that notice shall
relieve the Company from liability only if and to the extent that the failure
materially prejudices the Company’s ability to adequately defend Indemnitee in
the Proceeding. With respect to any Proceeding as to which Indemnitee so
notifies the Company:


 


(a)           The Company shall be entitled to
participate at its own expense.


 


(b)           Except as otherwise provided below,
the Company, jointly with any other indemnifying party similarly notified,
shall be entitled to assume the defense of such Proceeding, with counsel
reasonably satisfactory to Indemnitee. 
After notice from the Company to Indemnitee of the Company’s election to
assume the defense, the Company shall not be liable to Indemnitee under this
Agreement for any Expenses subsequently incurred by Indemnitee, other than as
provided below. Indemnitee shall have the right to employ his own counsel in
that Proceeding, but the fees and expenses of such counsel incurred after
notice from the Company of its election so to assume the defense shall be borne
by Indemnitee, except to the extent that 


 


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(A) the employment
of counsel by Indemnitee has been authorized by the Company,
(B) Indemnitee has reasonably concluded that there may be a conflict of
interest between the Company and Indemnitee in the conduct of the defense of
such Proceeding or that counsel selected by the Company may not be adequately
representing Indemnitee, or (C) the Company has not in fact employed
counsel to assume the defense of such Proceeding. In those cases, the fees and
expenses of Indemnitee’s own counsel shall be paid by the Company.


 


(c)           The Company shall not unreasonably
withhold its consent to any proposed settlement.  The Company has no obligation to indemnify
and hold Indemnitee harmless under this Agreement for any amounts paid in
settlement of any Proceeding affected without its written consent.  The Company shall not settle any Proceeding
in any manner which would impose any penalty or limitation or Liability (other
than Liabilities actually paid by the Company pursuant to this Agreement) on
Indemnitee without Indemnitee’s written consent.  The Company shall promptly notify Indemnitee
once the Company has received an offer or intends to make an offer to settle
any Proceeding and the Company shall provide Indemnitee a reasonably practicable
amount of time to consider such offer.


 


13.          Non-exclusivity;
Subrogation, etc.


 


(a)           The indemnification provided by this
Agreement is not exclusive of or inconsistent with any rights to which
Indemnitee may be entitled under the Company’s Certificate of Incorporation or
Bylaws, any other agreement, any vote of stockholders or directors, the DGCL,
or otherwise, both as to action in Indemnitee’s official capacity and
otherwise.  Indemnitee’s rights under
this Agreement are present contractual rights that fully vest upon Indemnitee’s
first service or continued service as a director or officer of the
Company.  No amendment, alteration or
repeal of this Agreement or of any provision hereof shall limit or restrict any
right of Indemnitee under this Agreement in respect of any action taken or omitted
by such Indemnitee in Indemnitee’s Corporate Status prior to such amendment,
alteration or repeal.  If and to the
extent that a change in the DGCL (whether by statute or judicial decision)
permits greater indemnification by agreement than would be afforded currently
under the Company’s Bylaws or under this Agreement, it is the intent of the
parties hereto that Indemnitee shall enjoy by this Agreement the greater
benefits so afforded by such change.  No
right or remedy herein conferred is intended to be exclusive of any other right
or remedy, and every other right and remedy shall be cumulative and in addition
to every other right and remedy given hereunder or now or hereafter existing at
law or in equity or otherwise.  The
assertion or employment of any right or remedy hereunder, or otherwise, shall
not prevent the concurrent assertion or employment of any other right or
remedy.


 


(b)           In the event of any payment by the
Company under this Agreement, the Company shall be subrogated to the extent of
such payment to all of the rights of recovery of Indemnitee against any other
Company Entity, and Indemnitee hereby agrees, as a condition to obtaining any
advancement or indemnification from the Company, to assign all of Indemnitee’s
rights to obtain from such other Company Entity such amounts to the extent that
they have been paid to or for the benefit of Indemnitee as advancement or
indemnification under this Agreement and are adequate to indemnify Indemnitee
with respect to the costs, Expenses or other items to the full extent that
Indemnitee is entitled to indemnification or other payment hereunder; and
Indemnitee will (upon request by the Company) execute all papers required and
take all action 


 


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necessary to secure such
rights, including execution of such documents as are necessary to enable the
Company to bring suit or enforce such rights.


 


(c)           The Company’s obligation to indemnify
or advance Expenses hereunder to Indemnitee in respect of or relating to Indemnitee’s
service at the request of the Company as a director, officer, employee,
fiduciary, representative, partner or agent of any other Company Entity shall
be reduced by any amount Indemnitee has actually received as payment of
indemnification or advancement of Expenses from such other Company Entity,
except to the extent that such indemnification payments and advance payment of
Expenses when taken together with any such amount actually received from other
Company Entities or under director and officer insurance policies maintained by
one or more Company Entities are inadequate to fully pay all costs, Expenses or
other items to the full extent that Indemnitee is entitled to indemnification
or other payment hereunder.


 


14.          Liability
Insurance.  To the extent the Company maintains an
insurance policy or policies providing directors’ and/or officers’ liability
insurance, Indemnitee shall be covered by such policy or policies, in
accordance with its or their terms, to the maximum extent of the coverage
available.   If Indemnitee serves as a
fiduciary of any employee benefit plan of the Company or any of its subsidiary
or affiliated corporations, then to the extent that the Company maintains an
insurance policy or policies providing fiduciaries’ liability insurance,
Indemnitee shall be covered by such policy or policies in accordance with its
or their terms, to the maximum extent of the coverage available for any
fiduciary.


 


Upon notice to the Company, either from Indemnitee
or from any other source, of the commencement or threat of commencement of any
Proceeding or matter which may give rise to a claim for indemnification of
Indemnitee and which may be covered by any insurance policy maintained by the
Company, the Company shall promptly give notice to the insurer in accordance
with the procedures prescribed by such policy and shall thereafter take all
necessary or appropriate action to cause such insurer to pay, to or on behalf
of Indemnitee all Liabilities and Expenses payable under such policy with
respect to such Proceeding or matter. The Company shall indemnify Indemnitee
for Expenses incurred by Indemnitee in connection with any successful action
brought by Indemnitee for recovery under any insurance policy referred to in
this Section 14 and shall advance to Indemnitee the Expenses of
such action in the manner provided in Section 8 above.


 


15.          Other
Sources.  Indemnitee shall not be required to exercise
any rights Indemnitee may have against any other parties (for example, under an
insurance policy purchased by Indemnitee, the Company or any other person or
entity) before Indemnitee exercises or enforces Indemnitee’s rights under this
Agreement. However, to the extent the Company actually indemnifies Indemnitee
or advances Indemnitee funds in respect of Expenses, the Company shall be
entitled to enforce any such rights which Indemnitee may have against third
parties. Indemnitee shall assist the Company in enforcing those rights if it
pays Indemnitee’s costs and expenses of doing so. If Indemnitee is actually
indemnified or advanced Expenses by any such third party, then, for so long as
Indemnitee is not required to disgorge the amounts so received, to that extent
the Company shall be relieved of its obligation to indemnify Indemnitee or to
advance Expenses.


 


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16.          Certain
Relationships.  The obligations and rights created under this
Agreement shall not be affected by any amendment to the Company’s Certificate
of Incorporation or Bylaws or any other agreement or instrument to which
Indemnitee is not a party, and shall not diminish any other rights which
Indemnitee now or in the future has against the Company or any other person or
entity.


 


17.          Severability.  If any provision of this
Agreement is determined to be unenforceable for any reason, it shall be
adjusted rather than voided, if possible, in order to achieve the intent of the
Company and Indemnitee.  In any event,
the remaining provisions of this Agreement shall remain enforceable to the
maximum extent possible.


 


18.          Contribution.  If the indemnification provided
in this Agreement is unavailable, then, in respect of any Proceeding in which
the Company is jointly liable with Indemnitee (or would be if joined in the
Proceeding), the Company shall contribute to the amount of Expenses and
Liabilities as appropriate to reflect: (i) the relative benefits received
by the Company, on the one hand, and Indemnitee, on the other hand, from the
transaction from which the Proceeding arose, and (ii) the relative fault
of the Company, on the one hand, and of Indemnitee, on the other, in connection
with the events which resulted in such Expenses and Liabilities, as well as any
other relevant equitable considerations. The relative fault of the Company, on
the one hand, and of Indemnitee, on the other, shall be determined by reference
to, among other things, the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent the circumstances resulting
in such Expenses and Liabilities. The Company agrees that it would not be just
and equitable if contribution pursuant to this Section 18 were
determined by pro rata allocation or any other method of allocation which does
not take account of the equitable considerations described in this Section 18.


 


19.          Governing
Law; Submission to Jurisdiction; Appointment of Agent for Service of Process.  This Agreement and the legal
relations among the parties shall, to the fullest extent permitted by law, be
governed by, and construed and enforced in accordance with, the laws of the
State of Delaware, without regard to its conflict of laws rules.  The Company and Indemnitee hereby irrevocably
and unconditionally (a) agree that any action or proceeding arising out of or
in connection with this Agreement shall be brought only in the Chancery Court
of the State of Delaware (the “Delaware Court”), and not in any other
state or federal court in the United States of America or any court in any
other country, (b) consent to submit to the exclusive jurisdiction of the
Delaware Court for purposes of any action or proceeding arising out of or in
connection with this Agreement, (c) waive any objection to the laying of venue
of any such action or proceeding in the Delaware Court, and (d) waive, and
agree not to plead or to make, any claim that any such action or proceeding
brought in the Delaware Court has been brought in an improper or otherwise
inconvenient forum.


 


20.          Notices.  All notices and other
communications under this Agreement shall be in writing and shall be given by
personal or courier delivery, confirmed facsimile or electronic mail
transmission or first class mail, and shall be deemed to have been duly given
upon receipt if personally delivered or delivered by courier, on the date of
transmission if transmitted by facsimile or electronic mail transmission, or
three days after mailing if mailed, to the addresses set forth below each party’s
name on the signature page hereto, or to such other address as such party may
designate by notice to the other from time to time.


 


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21.          Counterparts.  This Agreement may be executed
in one or more counterparts, each of which shall constitute an original.


 


22.          Employment
Rights; Successors; Third Party Beneficiaries.  This Agreement shall not be
deemed an employment contract between the Company and Indemnitee.  This Agreement shall continue in force as
provided above after Indemnitee has ceased to serve as a director of Company.  This Agreement shall be binding upon the
Company and its successors and assigns, and shall inure to the benefit of
Indemnitee and Indemnitee’s spouse, estate, heirs, executors, administrators,
personal or legal representatives and assigns.


 


23.          Amendment
and Waiver.  This Agreement may not be amended except by a
writing executed by both the Company and Indemnitee. No waiver of any provision
of this Agreement shall be effective unless in writing and signed by the party
to be charged therewith. A waiver of, or a failure to insist on, complete
compliance with any provision of this Agreement shall not be construed as a
waiver of a subsequent or different non-compliance, breach or default of that
or any other provision of this Agreement.


 


24.          Acknowledgment.  The Company expressly
acknowledges that it has entered into this Agreement and assumed the
obligations imposed on the Company under this Agreement in order to induce
Indemnitee to serve or to continue to serve as a director or executive officer
and acknowledges that Indemnitee is relying on this Agreement in serving or
continuing to serve in such capacity. The Company further agrees to stipulate
in any court proceeding that the Company is bound by all of the provisions of
this Agreement.


 


25.          Entire
Agreement.  This document contains the final, complete
and exclusive statement of the agreement between the Company and Indemnitee
with respect to the subject matter of this Agreement and supersedes any prior
or contemporaneous understandings, agreements, communications, correspondence
or representations by or between the parties, whether written or oral, relating
to the subject matter of this Agreement.


 


[Remainder
of Page Intentionally Left Blank]


 


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IN WITNESS WHEREOF, the
parties hereto have executed this Agreement as of the date set forth in its
first paragraph.


 


 


	
   

  	
  TRUE RELIGION APPAREL,
  INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
  JEFFREY L. LUBELL

  
	
   

  	
  Title:

  	
  CEO, Chairman of the Board
  and Chief Merchant

  
	
   

  	
   

  	
   

  
	
   

  	
  Address: 

  	
  2263 East Vernon Avenue

  
	
   

  	
   

  	
  Vernon, California 900

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [Name of indemnitee]

  
	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Facsimile:

  
	
   

  	
  Email:

  



 


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