SUBSCRIPTION AGREEMENT
EXHIBIT 10.25
This SUBSCRIPTION AGREEMENT (this “Agreement”), dated as of April 12, 2006, is by and among
Xxxxx Xxxxxxx (the “Subscriber”) and Lulu Holding, Inc., a Delaware corporation (the
“Corporation”).
Background
In accordance with the terms and conditions set forth in this Agreement, the Corporation
desires to sell to the Subscriber and the Subscriber desires to purchase from the Corporation
certain shares of the capital stock of the Corporation.
NOW, THEREFORE, in consideration of the covenants, agreements, representations and warranties
contained herein and for other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as
follows:
Agreement
Section 1. The Subscriber hereby subscribes for and agrees to purchase the shares of
capital stock of the Corporation as listed on Annex I adjacent to the Subscriber’s name
(the “Securities”), for the purchase price listed on Annex I.
The Subscriber shall remit payment, denominated in Canadian Dollars, to the Corporation, in
exchange for the Securities, by wire transfer in accordance with the instructions of the
Corporation. Simultaneously with such payment, the Subscriber shall execute a counterpart
signature page to the Stockholders Agreement in substantially the form attached hereto as Exhibit A
and a counterpart signature page to the Registration Rights Agreement in substantially the form
attached hereto as Exhibit B.
Section 2. The Subscriber acknowledges that this subscription is irrevocable but
conditioned upon acceptance by the Corporation. As soon as practicable after the acceptance
hereof, the Corporation shall cause to be delivered to the undersigned certificates representing
the Securities registered in the name of the undersigned. The Corporation represents to the
undersigned that the Securities, when issued and delivered in accordance with this Agreement, will
be duly authorized, validly issued, fully-paid and non-assessable.
Section 3. The Subscriber represents and warrants as follows:
(a) The Securities to be acquired under this Agreement are being acquired by the
Subscriber for investment and not as a nominee or agent for the benefit of any other person, and
the Subscriber has no current intention of distributing, reselling or assigning the Securities in
violation of the Securities Act of 1933, as amended (the “1933 Act”).
(b) The Subscriber understands that the Securities have not been registered under
the 1933 Act, or under the laws of any other jurisdiction, and that the Corporation does not
contemplate and, except as set forth in that certain Registration Rights Agreement dated as of
December 5, 2005, to which the Corporation and the Subscriber are parties, is under no obligation
to so register the Securities. The Subscriber understands and agrees further that the Securities
must be held indefinitely unless they are subsequently registered under the 1933 Act and any
applicable state securities laws or an exemption from registration under the 1933 Act and state
securities laws covering the sale of the Securities is available.
(c) The Subscriber is aware that: (i) an investment in the Corporation involves a
high degree of risk, lack of liquidity and substantial restrictions on transferability of interest;
and (ii) no Federal or state agency has made any finding or determination as to the fairness for
investment by the public, nor has made any recommendation or endorsement, of the Securities.
(d) The Subscriber has had an opportunity to ask all questions concerning the
Securities and the Corporation, to receive all answers to such questions, and to obtain additional
information necessary to verify the accuracy of any information furnished to the Subscriber or to
which the Subscriber had access.
(e) The Subscriber is an “accredited investor” as such term is defined in Rule 501
of Regulation D under the Securities Act. The Subscriber has such knowledge and experience in
financial and business matters that she is capable of evaluating the merits and risks of the
prospective investment.
(f) The Subscriber is a director of the Corporation and the Subscriber is
voluntarily participating in the purchase of the Securities.
(g) The Subscriber has the full right, power and authority to enter into this
Agreement and any other documents contemplated thereby.
Section 4. The Securities subscribed for in this Agreement shall bear the following
legend:
“THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS
AND CONDITIONS OF A CERTAIN STOCKHOLDERS AGREEMENT DATED AS OF
DECEMBER 5, 2005, AS THE SAME MAY BE AMENDED FROM TIME TO TIME (THE
“STOCKHOLDERS AGREEMENT”), BY AND AMONG VARIOUS INDIVIDUAL
SIGNATORIES THERETO AND THE COMPANY, A COPY OF WHICH IS AVAILABLE AT
THE PRINCIPAL OFFICE OF THE COMPANY. THE SALE, TRANSFER OR OTHER
DISPOSITION OF SUCH SHARES BY THE HOLDER HEREOF IS SUBJECT TO THE
TERMS OF THE STOCKHOLDERS’ AGREEMENT, WHICH PROVIDES, AMONG OTHER
THINGS, THAT UNDER CERTAIN CIRCUMSTANCES THE COMPANY AND CERTAIN
OTHER PERSONS HAVE THE RIGHT TO PURCHASE SUCH SHARES FROM THE HOLDER
HEREOF.
UNLESS PERMITTED UNDER CANADIAN SECURITIES LEGISLATION, THE HOLDER
OF THIS SECURITY MUST NOT TRADE THIS SECURITY BEFORE THE DATE THAT
IS FOUR (4) MONTHS AND A DAY AFTER THE LATER OF (i) ,
2006 AND (ii) THE DATE THE ISSUER BECAME A REPORTING ISSUER IN ANY
CANADIAN PROVINCE OR TERRITORY.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), OR ANY STATE SECURITIES OR “BLUE SKY” LAWS AND
NEITHER SUCH
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SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, PLEDGED,
ASSIGNED OR OTHERWISE TRANSFERRED UNLESS (1) A REGISTRATION
STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE SECURITIES ACT
AND ANY APPLICABLE STATE SECURITIES OR “BLUE SKY” LAWS, OR (2) THE
COMPANY RECEIVES AN OPINION OF COUNSEL TO THE HOLDER OF SUCH
SECURITIES, WHICH COUNSEL AND OPINION ARE REASONABLY SATISFACTORY TO
COUNSEL TO THE COMPANY, THAT SUCH SECURITIES MAY BE OFFERED, SOLD,
PLEDGED, ASSIGNED OR TRANSFERRED IN THE MANNER CONTEMPLATED WITHOUT
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR
APPLICABLE STATE SECURITIES OR “BLUE SKY” LAWS.”
Section 5. The Securities subscribed for in this Agreement shall not be deemed issued
to, or owned by, any Subscriber, until and only to the extent the purchase price is paid by the
Subscriber.
Section 6. This Agreement shall be construed in accordance with, and governed in all
respects by, the laws of the State of Delaware (without regard to its laws relating to choice of
law or conflict of law).
Section 7. This Agreement may be executed in any number of counterparts and by
facsimile, each of which counterparts, when so executed and delivered, shall be deemed to be an
original and all of which counterparts, taken together, shall constitute but one and the same
Agreement.
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IN WITNESS WHEREOF, the duly authorized representatives of the undersigned have executed this
Agreement as of the date first set forth above.
| Lulu Holding, Inc. |
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| By: | /s/ Xxxxx Xxxxxxxx | |||
| Name: | Xxxxx Xxxxxxxx | |||
| Title: | President | |||
| Subscriber |
||||
| /s/ Xxxxx Xxxxxxx | ||||
| Name: | Xxxxx Xxxxxxx | |||
ANNEX I
| Purchase | Aggregate | |||||||||||||||
| Number | Price | Purchase | ||||||||||||||
| Name of Subscriber | Series of Shares | of Shares | Per Share | Price | ||||||||||||
Xxxxx Xxxxxxx |
Series A Preferred Stock, par value $0.01 per share | 250 | $ | 1,000 | * | $ | 250,000 | * | ||||||||
| * | Amount listed in Canadian Dollars. |
