AGREEMENT AND PLAN OF REORGANIZATION

Exhibit 2.1

Agreement and Plan of Reorganization

By and Among

Lululemon Corp.,
a Delaware corporation,

Lululemon Athletica USA, Inc.,
a Nevada corporation,

Lululemon Athletica Inc.,
a company formed under the laws of British Columbia,

LIPO Investments (USA), Inc.,
a company formed under the laws of British Columbia,

LIPO Investments (Canada), Inc.,
a company formed under the laws of British Columbia,

Lulu Canadian Holding, Inc.,
a company formed under the laws of British Columbia,

and

Each of the Parties Whose Name Appears on Schedule I and Schedule II Hereto

Dated: April 26, 2007

AGREEMENT AND PLAN OF REORGANIZATION

      THIS AGREEMENT AND PLAN OF REORGANIZATION (the “ Agreement ”) is made as of this 26th day of April, 2007 by and among (i) Lululemon Corp., a Delaware corporation (the “ Company ”), (ii) Lululemon Athletica USA, Inc., a Nevada corporation (“ USA ”), (iii) Lululemon Athletica Inc., a company formed under the laws of British Columbia (“ LAI ”), (iv) LIPO Investments (USA), Inc., a company formed under the laws of British Columbia (“ LIPO USA ”), (v) LIPO Investments (Canada), Inc., a company formed under the laws of British Columbia (“ LIPO Canada ”), (vi) Lulu Canadian Holding, Inc., a company formed under the laws of British Columbia (“ Canadian Holding ”), (vii) each of the parties whose name appears on Schedule I hereto (each, an “ Investor ”), and (viii) each of the parties whose name appears on Schedule II hereto (each, a “ LIPO Holder ”). Capitalized terms used, but not otherwise defined herein, shall have the meanings set forth in Article 10.

BACKGROUND

     The Company’s Board of Directors (the “ Board ”) has reviewed the ownership and distribution of the authorized capital stock of the Company and its subsidiaries. In particular, the Board has considered the authorized and outstanding capital structure of the Company, USA and LAI, which as of the date of this Agreement, is comprised of the following:

     Each of the Company Series A Preferred Stock, Company Series TS Preferred Stock, LAI Class A Share and LAI Class B Share accrues dividends at a rate of 8% per annum, compounded quarterly.

     The Company directly owns 100% of the USA Participating Preferred Stock and the Institutional Investors and LIPO USA own 48% and 52%, respectively, of the USA Non-Participating Preferred Stock. The Company indirectly owns all of the issued and outstanding LAI Class A Shares and LIPO Canada owns all of the issued and outstanding LAI Class B Shares. The outstanding LAI Class A Shares and LIPO Class B Shares represent 48% and 52%, respectively, of the equity interests in LAI.

     LIPO Canada and LIPO USA (collectively, the “LIPO Entities”) are companies that are controlled by Dennis Wilson. Substantially all of the assets of LIPO Canada and LIPO USA consists of their holdings in LAI and USA, respectively. As of the date of this Agreement, (i) LIPO Canada’s outstanding capitalization is comprised of 117,000,362 common shares, no par value (“ LIPO Canada Common Shares ”), of which 2,344,917 shares are designated as “forfeitable,” and options to purchase an aggregate of 10,476,250 LIPO Canada Common Shares (“ LIPO Canada Options ”), at an exercise price of $0.99 per share, and (ii) LIPO USA’s outstanding capitalization is comprised of 117,000,362 common shares, no par value (“ LIPO USA Common Shares ”), of which 2,344,917 shares are designated as “forfeitable”, and options to purchase an aggregate of 10,476,250 LIPO USA Common Shares (“ LIPO USA Options ”), at an exercise price of $0.01 per share.

     The Board and, by execution of this Agreement, the Investors have determined to effect a firm commitment initial public offering (the “ Offering ”) of shares of the Company’s common stock, par value US$0.01 per share (the “ Company Common Stock ”) pursuant to a registration statement under the Securities Act of 1933, as amended, and the rules and regulations thereunder (the “ Securities Act ”) filed with the United States Securities and Exchange Commission (the “ SEC ”) on Form S-1. In furtherance thereof, the Board has approved the offering of Company Common Stock in the U.S. and Canada. Regardless of the amount of gross proceeds received by the Company in the Offering, the Board and the Investors desire to have the proposed Offering be deemed a “Qualified IPO” for purposes of the Company’s Stockholders Agreement, dated December 5, 2005 (the “ Company Stockholders Agreement ”).

     Based on the foregoing, the Company and the Board have determined that it is advisable and in the best interests of the Company and its stockholders to effect a reorganization of the Company and its subsidiaries (the “ Reorganization ”). In furtherance thereof, each of the parties hereto has agreed to the completion of the Reorganization and to take such actions as may be requested by the Board to complete the Reorganization immediately after an underwriting agreement for the Offering has been executed by the Company and the underwriters participating in the Offering (the “ Reorganization Effective Time ”). The current outstanding equity of the Company, USA and LAI in the aggregate is owned 48% by the Investors and 52% by the LIPO Entities. Immediately after completion of the Reorganization, the Investors and the LIPO Entities will hold the same relative ownership percentages in the Company on a consolidated basis.

     In connection with the Reorganization, Canadian Holding will amend its articles of incorporation substantially in the form attached hereto as Exhibit A (the “ Amended Canadian Holding Charter ”) to designate a new class of shares (the “ Exchangeable Shares ”) having the rights, preferences and privileges set forth in the exchangeable shares provision attached to the Plan of Arrangement (as defined below) and contemporaneously with the execution of this Agreement, the Company, Canadian Holding, LIPO USA and LIPO Canada entered into an arrangement agreement in the form attached hereto as Exhibit B (the “ Arrangement Agreement ”), attached to which is a plan of arrangement (the “ Plan of Arrangement ”) setting out certain steps of the reorganization then affecting Canadian Holding and the LIPO Entities. Each Exchangeable Share may, in accordance with its terms and the terms of the Exchange Trust Agreement (as defined below) and the Plan of Arrangement, be exchanged by the holder thereof for one share of Company Common Stock. At the Reorganization Effective Time, the Company, Canadian Holding and Computershare Trust Company of Canada (the “ Exchangeable Shares Trustee ”)

will enter into an exchange trust agreement substantially in the form of Exhibit C hereto (the “ Exchange Trust Agreement ”) under which the Exchangeable Shares Trustee will be granted certain rights and will agree to certain obligations for the benefit of the holders of Exchangeable Shares. In addition, the Company, Canadian Holding and Lululemon Callco ULC, an Alberta unlimited liability company which is a wholly-owned subsidiary of the Company (“ Callco ”), will enter into a support agreement substantially in the form of Exhibit D hereto (the “ Exchangeable Share Support Agreement ”) pursuant to which the Company will agree to support the obligations of Canadian Holding and Callco.

     The following events will occur in the sequence set forth in Article 1:

     In connection with the Reorganization, the Participating Holders have executed and delivered the Amended and Restated Registration Rights Agreement in the form of Exhibit E hereto (the “ Restated Registration Rights Agreement ”) to the Company to be held in escrow and released upon completion of the Reorganization. The Restated Registration Rights Agreement shall become effective upon and shall supersede the Registration Rights Agreement, dated as of December 5, 2005, by and among the Company, the Institutional Investors, LIPO USA and LIPO Canada (the “ Original Registration Rights Agreement ”) as of the Reorganization Effective Time.

     The Company will amend and restate the Company’s Amended and Restated Certificate of Incorporation (the “ Original Certificate of Incorporation ”) in the form of the Amended and Restated Certificate of Incorporation attached hereto as Exhibit F (the “ Step One Charter ”) to effect certain provisions of the Reorganization, to designate the special class of voting stock.

     Prior to the closing of the Offering (the “ Closing ”), the Company will amend and restate the Step One Charter in the form of the Amended and Restated Certificate of Incorporation attached hereto as Exhibit G (the “ Step Two Charter ”).

     Each of the foregoing actions was approved by the Board at a duly convened meeting on April 26, 2007 and the Board has unanimously recommended that the Company’s stockholders approve and adopt this Agreement and the transactions contemplated hereby. On or prior to the date of this Agreement, the holders of at least 66 2/3% of the votes represented by the outstanding Company Series A Preferred Stock, Company Series B Preferred Stock and Company Series TS Preferred Stock, voting as a single class (the “ Preferred Supermajority ”), will have approved this Agreement and the transactions contemplated hereby.

     NOW THEREFORE, in consideration of the foregoing and the covenants, promises and representations set forth herein, and for other good and valuable consideration, and intending to be legally bound hereby, the parties hereto agree as follows:

Article 1
Reorganization

     The Reorganization shall be completed in the following sequence; subject to the Supreme Court of British Columbia issuing a final order approving the Plan of Arrangement pursuant to Section 291(4) of the Business Corporations Act (British Columbia) in accordance with the terms of the Arrangement Agreement.

     1.1. Exchange or Repurchase of Outstanding Stock.

          (a) Company Preferred Stock . Upon the Reorganization Effective Time and as part of the Reorganization, the following transactions shall occur:

               (i) Company Series A Preferred Stock . Each issued and outstanding share of Series A Preferred Stock will be exchanged for a number of shares of Common Stock equal to the sum of (A) the product of ( x ) the Investment Value of such share of Company Series A Preferred Stock, as of the Reorganization Effective Time, divided by the Total Investment Value, ( y ) multiplied by the Common Share Amount, and (B) the quotient of the Investment Value of such Company Series A Preferred Stock, as of the Reorganization Effective Time, divided by the IPO Price.

               (ii) Company Series TS Preferred Stock . Each issued and outstanding share of Company Series TS Preferred Stock will be exchanged for a number of shares of Common Stock equal to the product of ( x ) the quotient of the Investment Value of such share of Company Series TS Preferred Stock, as of the Effective Time, divided by the aggregate Investment Value of all outstanding Company Series TS Preferred Stock as of the Reorganization Effective Time, multiplied by ( y ) the product of the USA Percentage multiplied by the LIPO Share Amount.

          (b) USA Non-Participating Preferred Stock . Upon the Reorganization Effective Time and as part of the Reorganization, but after giving effect to the transactions contemplated by Section 1.1(a), USA will repurchase each issued and outstanding share of USA Non-Participating Preferred Stock from the holders thereof for a per share purchase price equal to the Investment Value of such share.

     1.2. Reorganization of LIPO Canada.

          (a) Five minutes following completion of the transactions contemplated by Section 1.1, LIPO Canada, LIPO USA and Canadian Holding shall cause the terms of the Plan of Arrangement to be consummated in the order provided therein. In accordance with the Arrangement Agreement and the Plan of Arrangement, LIPO Canada Holders will exchange their LIPO Canada common shares in exchange for either, or a combination of, shares of Company Common Stock and Exchangeable Shares. The aggregate number of shares of Company Common Stock and Exchangeable Shares that may be issued under the terms of the Arrangement Agreement and the Plan of Arrangement will be equal to the product of the LAI Percentage multiplied by the LIPO Share Amount. Of the foregoing total number of shares, (i) Slinky Financial ULC (“ Slinky ”), an Alberta unlimited company controlled by Mr. Wilson, will receive a number of shares of Company Common Stock that is equal to the number of shares of Company Common Stock that is set forth for Mr. Wilson or Slinky in the final prospectus for the Offering, and (ii) the remainder will be issued as Exchangeable Shares to the LIPO Canada Holders with respect to all other LIPO Canada shares then outstanding, in proportion to their relative ownership of LIPO Canada Common Shares.

          (b) Contemporaneously with the transactions contemplated by Section 1.2(a), as provided in the Arrangement Agreement and the Plan of Arrangement, each holder of Exchangeable Shares shall purchase a number of Special Voting Shares that is equal to the number of Exchangeable Shares issued to such holder at the Reorganization Effective Time. The aggregate purchase price for all Special Voting Shares issued pursuant to this Section 1.2(b) shall be Cdn$1,000.00. The purchase price payable by each purchaser of Special Voting Shares shall be such purchaser’s pro rata share of such aggregate purchase price. The Special Voting Shares shall be uncertificated.

          (c) Upon issuance at the Reorganization Effective Time, all of the Exchangeable Shares issued by Canadian Holding pursuant to this Agreement, the Arrangement Agreement and the Plan of Arrangement and all of the Special Voting Shares issued by the Company pursuant to this Agreement, the Arrangement Agreement and the Plan of Arrangement shall be duly authorized and validly issued, fully paid and nonassessable.

     1.3. Lululemon Callco ULC. Any time prior to the amalgamation contemplated by Section 1.5, the Company will contribute the shares of Canadian Holding it holds to Callco. The authorized capital of Callco will consist of redeemable preferred shares and common shares having such rights, designations and preferences and issued in such amount and purchase prices as shall be determined by the Board and the board of directors of Callco.

     1.4. Option Exchanges. Five minutes following the completion of the transactions contemplated by Section 1.2,

          (a) each option to purchase shares of USA Common Stock then outstanding shall be exchanged for an option to purchase a number shares of Company Common Stock equal to the number of shares of USA Common Stock set forth in the option agreement governing such option multiplied by the USA Percentage, at an adjusted exercise price equal to the exercise price set forth in such option agreement, divided by the USA Percentage, and the parties hereby determine that (i) the fair market value of the shares of Company Common Stock underlying such new option minus the aggregate exercise price under such new option does not exceed (ii) the fair market value of the shares of USA Common Stock underlying the options to purchase shares of USA Common Stock immediately before the exchange, minus the aggregate exercise price under such exchanged option to purchase USA Common Stock; and

          (b) each option to purchase LAI Class C Shares then outstanding shall be exchanged for an option to purchase a number shares of Company Common Stock equal to the number of LAI Class C Shares set forth in the option agreement governing such option multiplied by the LAI Percentage, at an adjusted exercise price equal to the exercise price set forth in such option agreement, divided by the LAI Percentage, and the parties hereby determine that (i) the fair market value of the shares of Company Common Stock underlying such new option minus the aggregate exercise price under such new option does not exceed (ii) the fair market value of the LAI Class C Shares underlying the options to purchase LAI Class C Shares immediately before the exchange, minus the aggregate exercise price under such exchanged option to purchase LAI Class C Shares.

The following is an example of the foregoing option share amount and exercise price adjustments. This example is provided for illustration purposes only. Assume that a hypothetical holder holds an option to acquire 5,000 shares of USA Common Stock at an exercise price of $0.21 per share and an option to acquire 5,000 LAI Class C Shares at an exercise price of $1.18 per share and that the USA Percentage and LAI Percentage is 15% and 85%, respectively. Based on the foregoing, upon completion of the Reorganization, (a) the option to acquire 5,000 shares of USA Common Stock at an exercise price of $0.21 per share would become an option to acquire 750 shares of Company Common Stock (i.e., 5,000 x 0.15) at an adjusted exercise price of $1.40 (i.e., $0.21 / 0.15), and (b) the option to acquire 5,000 LAI Class C Shares at an exercise price of $1.18 per share would become an option to acquire 4,250 shares of Company Common Stock (i.e., 5,000 x 0.85) at an adjusted exercise price of $1.39 (i.e., $1.18 / 0.85, or $1.39).

          (c) The Company, LAI and USA will use all commercially reasonable efforts to obtain the written acknowledgement of all holders of options to purchase shares of USA Common Stock and all holders of options to purchase LAI Class C Shares, pursuant to which such holders acknowledge that at the Reorganization Effective Time, pursuant to this Agreement and the 2007 Equity Incentive Plan of the Company, such holders’ options to purchase shares of USA Common Stock and options to purchase LAI Class C Shares will be exchanged for options to purchase shares of Company Common Stock in the manner described in this Section 1.4, without any further act or formality on the part of such holders.

     1.5. Amalgamation. Five minutes following the completion of the transactions contemplated by Section 1.4, Canadian Holding and LIPO Canada will be amalgamated pursuant to Sections 273 of the Business Corporations Act (British Columbia). The amalgamation contemplated by this Section 1.5 shall be completed prior to the IPO Closing.

     1.6. Allocation of Assets. The portion of the Company’s total fair market value that is attributable to the fair market value of USA (the “ USA Percentage ”), and the portion of the Company’s total fair market value that is attributable to the fair market value of LAI (the “ LAI Percentage ”), will each be expressed as a percentage, with the sum of the two adding to 100%. As soon as reasonably practicable after the execution of this Agreement, the Company will allocate the relative contribution to the Company’s total fair market value by USA and LAI. Any determination of such allocation will be made by the Board, in its discretion, in consultation with and on information provided by, the Company’s employees and advisors. The parties hereto agree that this Section 1.5 does not impose any obligation on the Company, USA or LAI to obtain a valuation report with respect to the Company or any of its subsidiaries or either of the LIPO Entities.

     1.7. Fractional Shares. In the event that a fractional number of shares of capital stock is issuable as a result of the consummation of the transactions contemplated by Sections 1.1 or 1.2, such fractional number shall be rounded to the nearest whole share. Any rounding required in respect of the transactions undertaken in Section 1.3 shall be effected to preserve the deferred exchange contemplated by subsection 7(1.4) of the Income Tax Act (Canada).

     1.8. Adjustments. The class and number of any shares referred to in this Agreement will be adjusted equitably (without duplication) for any change in the class of or any increase or decrease in the number of outstanding shares resulting from stock splits, reverse stock splits, stock dividends, stock combinations, consolidations, mergers, reclassifications, recapitalizations or other similar transactions that take place after the date hereof and prior to the Closing. Any adjustments required in respect of the transactions undertaken in Section 1.3 shall be effected to preserve the deferred exchange contemplated by subsection 7(1.4) of the Income Tax Act (Canada).

     1.9. Deliveries. At least three (3) business days prior to the Reorganization Effective Time, each Investor, Slinky and Mr. Wilson, in his individual capacity and in his capacity as trustee of the other LIPO Canada Holders, shall deliver to the Company and Canadian Holding stock certificates representing the capital stock tendered by such Investor, Slinky or Mr. Wilson, as the case may be, pursuant to Sections 1.1 and 1.2, along with duly endorsed stock powers, if required. At the Reorganization Effective Time, the Company and Canadian Holding shall issue to each Person whose certificates have been tendered certificates evidencing the number of shares of Company Common Stock and Exchangeable Shares held of record by such Person after giving effect to the Reorganization and the Stock Split.

     1.10. Failure to Deliver Shares. If a holder of shares of capital stock of the Company, LAI, USA or LIPO Canada (the “ Transferring Holder ”) fails to deliver its shares of capital stock in accordance with the terms of this Agreement, each of the Company and its direct and indirect subsidiaries may, at its option, in addition to all other remedies it may have, send to the Transferring Holder the stock certificates for the shares of capital stock for which such Transferring Holder is entitled to pursuant to the terms of this Agreement and cancel on its books the stock certificate(s) representing such shares of capital stock. The Transferring Holder failing to deliver share certificates in accordance with this Agreement shall reimburse the Company and its direct and indirect subsidiaries for any legal or other expenses reasonably incurred by them in connection with the enforcement of obligations under this Agreement or utilizing the remedies set forth in this Section 1.10.

     1.11. Closing. In the event the Closing does not occur, the parties hereto agree to cooperate and work in good faith to execute and deliver such agreements and consents and amend such documents as may be necessary to re-establish the rights, preferences and privileges that the holders of capital stock and options in the Company, LAI, USA, LIPO Canada and LIPO USA had prior to the consummation of the Reorganization, taking into consideration applicable tax rules and regulations and all other relevant factors that the parties hereto may determine in light of current facts and circumstances.

Article 2
Consents to Transactions and Effect of Offering

     2.1. Consent of Investors and LIPO Holders. Each of the Investors and LIPO Holders hereby voluntarily:

          (a) approves and instructs the Company to effect, the Offering pursuant to a Registration Statement under the Securities Act filed with the SEC on Form S-1;

          (b) agrees that notwithstanding the terms of the Company Stockholders Agreement, the Offering shall be deemed and treated as, a “Qualified IPO” for purposes of the Company Stockholders Agreement, regardless of whether the Company receives gross cash proceeds (before underwriting discounts, commissions and fees) of less than US$75 million; and

          (c) approves and adopts (to the extent applicable to such person) the Reorganization and the form, terms and conditions of this Agreement, the Arrangement Agreement and the Plan of Arrangement and all of the transactions contemplated herein and therein.

     2.2. Consent of Lulu Canadian Holding and LIPO Canada. Lulu Canadian Holding and LIPO Canada, being the only shareholders of LAI, hereby approve and adopt the Reorganization and the form, terms and conditions of this Agreement, the Arrangement Agreement and the Plan of Arrangement and all of the transactions contemplated herein and therein.

     2.3. Amendment to and Termination of Company Stockholder Agreement.

          (a) Upon execution of this Agreement, the matters set forth in Section 2.1(b) shall have been approved by (i) the holders of 66 2/3% of the outstanding Company Series A Preferred Stock, and (ii) the holders of 66 2/3% of the outstanding Company Series TS Preferred Stock. Such holders and the Company agree that the Company Stockholders Agreement is hereby amended to the extent provided in Section 2.1(b), effective as of the date of this Agreement.

          (b) Pursuant to Section 11.1 of the Company Stockholders Agreement, effective as of the Closing, the Stockholders Agreement shall automatically terminate and shall not be of any force or effect thereafter.

     2.4. Termination of Other Stockholder Agreements. Pursuant to Section 7.1 of USA’s Stockholders Agreement dated as of December 5, 2005 (“ USA Stockholders Agreement ”) and Section 8.1 of LAI’s Shareholders Agreement dated as of December 5, 2005 (“ LAI Shareholders Agreement ”), the USA Stockholders Agreement and LAI Shareholders Agreement, respectively, shall automatically terminate and shall not be of any force or effect thereafter, effective as of the Reorganization Effective Time.

     2.5. Termination of Stock Purchase Agreement Provisions. Section 7.5 of the Stock Purchase Agreement dated as of December 5, 2005 by and among LAI, Canadian Holding, Mr. Wilson, certain of the Investors and certain other parties (the “ Canadian Stock Purchase Agreement ”) and Section

7.5 of the Stock Purchase Agreement dated as of December 5, 2005 by and among the Company, USA, Mr. Wilson, certain of the Investors and certain other parties (the “ USA Stock Purchase Agreement ”), relating to access to financial reports and other information, shall automatically terminate and shall not be of any force or effect thereafter, effective as of the Reorganization Effective Time. Section 7.6 of the Canadian Stock Purchase Agreement and Section 7.9 of the USA Stock Purchase Agreement, relating to insurance, shall automatically terminate and shall not be of any force or effect thereafter, effective as of the Reorganization Effective Time. Section 7.4 of the USA Stock Purchase Agreement, relating to the composition of the board of directors of USA, shall automatically terminate and shall not be of any force or effect thereafter, effective as of the Reorganization Effective Time.

Article 3
Representations and Warranties of the Company and its Subsidiaries

     Each of the Company, LAI, USA and Canadian Holding (each, a “ Lululemon Entity ”) hereby, severally and not jointly, represents, warrants, covenants, agrees and acknowledges to the Investors the following to be true and correct in all respects as to itself:

     3.1. Organization and Standing. Such Lululemon Entity is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation, with full corporate power and authority to own, lease and operate its respective properties and assets and to carry on its respective business and operations.

     3.2. Authority.

          (a) Such Lululemon Entity has full corporate power and authority to execute, deliver and perform this Agreement and to consummate the transactions contemplated hereby. This Agreement has been duly executed and delivered by such Lululemon Entity and constitutes the legal, valid and binding obligation of the Lululemon Entity, enforceable in accordance with its terms except as enforcement may be limited by insolvency, bankruptcy, moratorium or other laws affecting creditors’ rights generally and except as enforcement may be limited by principles of equity (collectively, the “ Enforceability Exceptions ”). Except as set forth in Section 3.3, no other action is required to authorize the execution, delivery and performance of this Agreement, and the consummation by such Lululemon Entity of the transactions contemplated hereby.

          (b) With respect to the Company, subject to the approval of the Preferred Super Majority, the approval of the holders of the Company Series A Preferred Stock, voting as a separate class, and the approval of the holders of the Company Series TS Preferred Stock, voting as a separate class, all corporate acts and other proceedings required to be taken by or on the part of the Company to authorize the Company to execute, deliver and perform this Agreement have been duly and properly taken.

     3.3. Non-Contravention, etc. Neither the execution, delivery or performance of this Agreement nor the consummation of the transactions contemplated hereby does or will constitute, result in or give rise to any material breach or violation of, or any material default or right or material cause of action under, any material contractual obligation, the certificate of incorporation, bylaws or similar governing documents of such Lululemon Entity or any of its subsidiaries as in effect on the date hereof, any laws, orders, decrees, awards or orders of any court or governmental entity to which the Company or any of its subsidiaries is subject. Except for (a) such filings as may be required by Delaware General Corporate Law and applicable laws of British Columbia in connection with the Reorganization and the Offering and the filings required by the SEC and market regulatory bodies in connection with the Offering, (b) the approvals set forth in the Arrangement Agreement, and (c) the approval of the Company’s stockholders under the Original Certificate of Incorporation and the Company Stockholders

Agreement, no approval, consent, waiver, authorization or other order of, and no declaration, filing, registration, qualification or recording with, any governmental authority or any other Person is required to be obtained or made by or on behalf of such Lululemon Entity in connection with the execution, delivery or performance of this Agreement and the transactions contemplated hereby by such Lululemon Entity.

     3.4. Capitalization.

          (a) Company . The Company hereby makes the following representations:

               (i) As of the date of this Agreement, the Company is authorized to issue 40,750,000 shares of capital stock, of which (A) 35,000,000 shares have been designated as Company Common Stock, and (B) 5,750,000 shares of preferred stock, $0.01 par value per share. Of such shares of preferred stock, 250,000 shares have been designated as Company Series A Preferred Stock, 250,000 shares have been dated as Company Series B Preferred Stock, 250,000 shares have been designated as Company Series TS Preferred Stock and 5,000,000 shares have not been designated any class or series of preferred stock. As of the date of this Agreement, the Company’s issued and outstanding capital stock consists of 108,495 shares of Company Series A Preferred Stock and 116,994 shares of Company Series TS Preferred Stock. As of the date of this Agreement, no shares of Company Series B Preferred Stock or Company Common Stock are issued and outstanding. All of the issued and outstanding shares of capital stock of the Company are duly and validly issued and outstanding and are fully paid and nonassessable.

               (ii) There are no other shares of capital stock or other equity securities of the Company outstanding and no outstanding Equity Rights relating to the capital stock of the Company. Except as specifically contemplated by this Agreement, no Person has any Equity Right with respect to capital stock or other equity securities of the Company.

               (iii) Upon issuance at the Closing, all of the shares of Company Common Stock to be issued pursuant to Sections 1.1 and 1.2 will be duly authorized and validly issued, fully paid and nonassessable.

          (b) USA . USA hereby makes the following representations:

               (i) As of the date of this Agreement, USA is authorized to issue 10,232,296 shares of capital stock, of which (i) 10,000,000 shares have been designated as USA Common Stock, and (ii) 232,296 shares of preferred stock, $0.001 par value per share. Of such shares of preferred stock, 222,296 shares have been designated as USA Participating Preferred Stock and 10,000 shares have been designated as USA Non-Participating Preferred Stock. As of the date of this Agreement, USA’s issued and outstanding capital stock consists of 222,296 shares of USA Participating Preferred Stock, 10,000 shares of USA Non-Participating Preferred Stock and options to purchase 1,897,000 shares of USA Common Stock. All of the issued and outstanding shares of capital stock of the Company are duly and validly issued and outstanding and are fully paid and nonassessable.

               (ii) Except for the options described in Section 3.4(b)(i) or as specifically contemplated by this Agreement, (A) there are no other shares of capital stock or other equity securities of USA outstanding and no outstanding Equity Rights relating to the capital stock of USA, and (B) no Person has any Equity Right with respect to capital stock or other equity securities of USA.

          (c) LAI . LAI hereby makes the following representations:

               (i) As of the date of this Agreement, LAI is authorized to issue an unlimited number of LAI Class A Common Shares, LAI Class B Common Shares and LAI Class C

Common Shares. As of the date of this Agreement, LAI’s issued and outstanding capital stock consists of 106,702 LAI Class A Shares, 115,594 LAI Class B Shares and options to purchase 1,897,000 shares of LAI Class C Shares. All of the issued and outstanding shares of capital stock of the Company are duly and validly issued and outstanding and are fully paid and nonassessable.

               (ii) Except for the options described in Section 3.4(b)(i) as specifically contemplated by this Agreement, (A) there are no other shares of capital stock or other equity securities of LAI outstanding and no outstanding Equity Rights relating to the capital stock of LAI, and (B) no Person has any Equity Right with respect to capital stock or other equity securities of LAI.

Article 4
Representations and Warranties of Investors

     Each Investor, severally and not jointly with the other Investors, hereby represents, warrants, covenants, agrees and acknowledges to the Company the following to be true and correct in all respects as to itself:

     4.1. Authorization. If the Investor is a corporation, limited partnership, limited liability company, trust or other entity, (a) the Investor has all requisite power and authority to execute, deliver and perform this Agreement and to consummate the transactions contemplated hereby, (b) the execution and delivery by the Investor of this Agreement and the consummation by the Investor of the transactions contemplated hereby and the performance of the Investor of its obligations hereunder have been duly and validly authorized by the Investor by all necessary action, and (c) no other action is required to authorize the execution, delivery and performance of this Agreement, and the consummation by the Investor of the transactions contemplated hereby. If the Investor is an individual, the Investor has full legal capacity to execute and deliver this Agreement and to perform his or her obligations hereunder, and to consummate the transactions contemplated hereby.

     4.2. Enforceability. This Agreement has been duly and validly executed and delivered by the Investor and constitutes a legal, valid and binding obligation of the Investor enforceable against the Investor in accordance with its terms, except as enforcement may be limited by insolvency, bankruptcy, moratorium or other laws affecting creditors’ rights generally and except as enforcement may be limited by principles of equity.

     4.3. Non-Contravention, etc. Neither the execution, delivery or performance of this Agreement nor the consummation of the transactions contemplated hereby does or will constitute, result in or give rise to any material breach or violation of, or any material default or right or material cause of action under, any material contractual obligation or the certificate of incorporation, bylaws, partnership agreement, operating agreement or other organizational documents of the Investor or any legal requirement applicable to the Investor. Assuming the accuracy of the representations set forth in Sections 3.3 and 8.5 and compliance with the agreements contained herein, no approval, consent, waiver, authorization or other order of, and no declaration, filing, registration, qualification or recording with, any governmental authority or any other Investor, including, without limitation, any Investor to any contractual obligation of the Investor, is required to be obtained or made by or on behalf of the Investor in connection with the execution, delivery or performance of this Agreement and the transactions contemplated hereby by the Investor.

     4.4. Title to Shares. The Investor is the record and beneficial owner of the shares of Company Series A Preferred Stock, Company Series TS Preferred Stock and USA Non-Participating Preferred Stock set forth opposite its name on Schedule 4.4 hereto and has good, marketable and valid title to such shares, free and clear of all liens and encumbrances other than those transfer restrictions

created by applicable under the Securities Act and Applicable Laws, the Company Stockholder Agreement and the USA Stockholder Agreement.

     4.5. Review of S-1 and Business and Records. The Investor has received a draft of the Company’s Registration Statement, dated as of April 24, 2007. Prior to the execution of this Agreement, such Investor and its advisers have been provided with full and free access and opportunity to inspect, review, examine and inquire about the Company’s Registration Statement, dated as of April 24, 2007 and all books, records and information (financial or otherwise) of the Company, its business and affairs, and such Investor and its advisers have made such inspection, review, examination and inquiry as they have deemed appropriate; and the Investor and its advisers have been offered the opportunity to ask such questions and obtain such additional information concerning the Company and its business and affairs as each Investor and its advisers have requested so as to understand the nature of the investment in the Company Common Stock and to verify the accuracy of the information obtained as a result of their investigation.

          (a) The Investor is an “accredited investor” as such term is defined in Rule 501 of Regulation D under the Securities Act, and if the Investor is an entity, has not been organized for the purpose of acquiring the shares of Company Stock pursuant to this Agreement.

          (b) The Investor understands and acknowledges that its shares of Company Common Stock will not be registered under the Securities Act or any other Applicable Laws, except as provided in Section 6.2, and are being offered in transactions not requiring registration (or any equivalent thereof) under the Securities Act or any other Applicable Laws, and may not be offered, sold, transferred or otherwise disposed except (i) in compliance with the registration requirements of the Securities Act and any other Applicable Laws or pursuant to an exemption therefrom or in a transaction not subject thereto, (ii) the Company has received an opinion from its counsel that the proposed sale, transfer or disposition does not require registration under the Securities Act or any other Applicable Laws, or (iii) as set forth in Section 8.5.

          (c) The Investor acknowledges and agrees that each share certificate evidencing shares of Company Common Stock issued pursuant to this Agreement (unless issued pursuant to a registration statement under the Securities Act), and any share certificate issued in replacement thereof, shall be stamped or otherwise imprinted with appropriate legends reflecting restrictions on transferability in accordance with the Applicable Laws, and transfer restrictions of like effect will be provided by the Company and its transfer agent, and the Investor acknowledges and agrees to such legends, transfer agent instructions and transfer restrictions, on behalf of such Investor and each subsequent Permitted Transferee of such Investor.

          (d) The shares of Company Common Stock to be acquired in accordance with this Agreement are being acquired by such Investor for investment and not as a nominee or agent for the benefit of any other person, and such Investor has no current intention of distributing, reselling or assigning the Company Common Stock in violation of the Securities Act.

          (e) The Investor is aware that: (i) an investment in the Company 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 Company Common Stock.

          (f) The Investor or his, her or its representatives, as the case may be, together with its advisers, have such knowledge and experience in financial, tax, and business matters,

and, in particular, investments in securities, so as to enable them to utilize the information made available to them in connection with the Company Common Stock to evaluate the merits and risks of an investment in the Company Common Stock and to make an informed investment decision with respect thereto.

     4.7. No Reliance. Except with respect to the matters set forth in Section 8.5, the Investor is not relying on the Company or any of its employees or agents with respect to the legal, tax, economic and related considerations of an investment in the Company Common Stock, and the Investor has relied on the advice of, or have consulted with, only its own advisers with respect to such matters.

     4.8. Representations of Dennis Wilson. For purposes of this Article 4, Mr. Wilson shall be deemed to be an Investor and is making the representations set forth in this Article 4 with respect to himself in all respects as if he were an Investor.

Article 5
Representations and Warranties of LIPO Entities and LIPO Holders

     Each of the LIPO Entities and LIPO Canada Holders, jointly and severally, represent, warrant, covenant, agree and acknowledge to the Company the following to be true and correct in all respects. These representations, warranties and covenants made by Mr. Wilson under this Article 5 are in addition to