INDEPENDENT CONTRACTOR AGREEMENT
Exhibit 10.1
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:
Xx. Xxxx Xxxxxx
L’Atelier
000 Xxxx 0xx Xxxxxx
Xxxxx X000
Xxx Xxxxxxx, XX 00000
Fax: (000) 000-0000
L’Atelier
000 Xxxx 0xx Xxxxxx
Xxxxx X000
Xxx Xxxxxxx, XX 00000
Fax: (000) 000-0000
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To the Company:
Guru Denim, Inc.
0000 Xxx Xxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000
Fax: (000) 000-0000
Attention: President
0000 Xxx Xxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000
Fax: (000) 000-0000
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/ Xxxx Xxxxxx
|
By: | /s/ Xxxxxxx Xxxxxxx | ||
Xxxx Xxxxxx |
||||
| Xxxxxxx Xxxxxxx, President | ||||
| [Print Name and Title] | ||||
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EXHIBIT A
COMMISSION BASED ON SALES
IN THE TERRITORY
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
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
Spring 2007 Projections
| SALES REP | FALL 06 | HOLIDAY 06 | SP 07 PROJ. | SP 07ACTUAL | CIMS | ||||||||||||
EXHIBIT D
“TRUE RELIGION PULSE REPORT”
An overview of your area of responsibility
To
|
: Xxxx Xxxxxxx | |||
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
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: |
