EXHIBIT 10.2

SUBSCRIPTION
AGREEMENT

 

LYRIS,
INC.

THE SECURITIES REFERRED TO HEREIN
MUST BE ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 OR THE STATE SECURITIES LAWS OF ANY STATE. WITHOUT SUCH
REGISTRATION, SUCH SECURITIES MAY NOT BE SOLD, PLEDGED, HYPOTHECATED, OR
OTHERWISE TRANSFERRED AT ANY TIME WHATSOEVER, EXCEPT UPON DELIVERY TO LYRIS,
INC. (THE “CORPORATION”) OF AN OPINION OF COUNSEL SATISFACTORY TO THE
CORPORATION THAT REGISTRATION IS NOT REQUIRED FOR SUCH TRANSFER AND/OR THE
SUBMISSION TO THE CORPORATION OF SUCH OTHER EVIDENCE AS MAY BE SATISFACTORY TO
THE CORPORATION TO THE EFFECT THAT ANY SUCH TRANSFER WILL NOT BE IN VIOLATION OF
THE SECURITIES ACT OF 1933 AND/OR APPLICABLE STATE SECURITIES LAWS, AND/OR ANY
RULE OR REGULATION PROMULGATED THEREUNDER.


	 






SUBSCRIPTION
AGREEMENT

     This Subscription
Agreement (this “Agreement”) is entered into as of March 5, 2008, by and between Lyris, Inc., a
Delaware corporation (the “Corporation”), and the subscriber
(“Subscriber”) specified on the signature page
hereof.

PRELIMINARY
STATEMENT

     The Subscriber
desires to acquire the number of shares of common stock of the Corporation, par
value $.01 per share, set forth opposite the Subscriber’s name on the signature
page hereof (the “Shares”), and the Corporation desires to issue the Shares to the Subscriber
in accordance with the terms of this Agreement.

AGREEMENTS

     NOW, THEREFORE, in
consideration of the foregoing and of the mutual covenants and agreements set
forth herein, the parties hereto, intending to be legally bound, hereby agree as
follows:

ARTICLE I 
Subscription for Stock

     1.1 Subscription. Subject to and in accordance with the respective terms and
conditions of this Agreement, the Subscriber hereby subscribes for and purchases
the Shares at a purchase price of $1.05 per share. The Subscriber’s total
subscription amount for the Shares (the “Total
Subscription Price”) shall consist of an amount
equal to (i) One Million Dollars in cash (the “Cash
Subscription Amount”), plus (ii) the aggregate
principal and interest outstanding under the Note (defined below) as of the date
hereof of $5,846,392.37. The term “Note” shall mean that certain Amended and
Restated Promissory Note of the Corporation, dated as of March 31, 2007,
originally issued to The John Buckman and Jan Hanford Trust.

     1.2 Payment of Total Subscription
Price. The Total Subscription Price is being
satisfied by the Subscriber, concurrently with the execution hereof, by (i) the
payment to the Corporation of an amount equal to the Cash Subscription Amount,
by wire transfer of immediately available funds to such account as the
Corporation has designated, and (ii) the surrender of the Note to the
Corporation, duly noted as “Paid in Full” by an authorized representative of the
Subscriber, and the cancellation of all principal and interest outstanding
thereunder.

     1.3 Acceptance of
Subscription. The Corporation (i) hereby accepts,
pursuant to the terms and conditions set forth in this Agreement, the
Subscriber’s Total Subscription Price, and (ii) concurrently herewith is
delivering to the Subscriber a certificate representing the
Shares.


1




ARTICLE
II
Representations of the
Subscriber

     2.1 Representations of the
Subscriber. The Subscriber hereby represents and
warrants to, and agrees with, the Corporation as
follows:

          (a) Power and Authority. The Subscriber is authorized to
execute and enter into this Agreement and such other agreements, certificates,
or other instruments as are executed by or on behalf of the Subscriber in
connection with its obligations hereunder (collectively, the “Subscriber Agreements”), to perform its obligations
under each Subscriber Agreement, and to consummate the transactions that are the
respective subjects of any Subscriber Agreement. The signature of the individual
signing any Subscriber Agreement as, or on behalf of, the Subscriber is binding
upon the Subscriber. Unless otherwise indicated on the signature page of this
Agreement, the Subscriber has not been organized for the purpose of acquiring
the Shares.

          (b) Organization and Principal Place of Business. The
Subscriber is a partnership duly formed, organized and existing under the laws
of the state or other jurisdiction of its formation. The address set forth on
the Subscriber’s signature page to this Agreement is the Subscriber’s correct
principal place of business, and the Subscriber has no present intention of
moving its principal place of business to any other domestic or foreign
jurisdiction.

          (c) Compliance with Laws and Other Instruments. The
execution and delivery of the Subscriber Agreements by or on behalf of the
Subscriber and the consummation of the transactions contemplated in the
Subscriber Agreements do not not conflict with or result in any violation of or
default under any provision of any charter, bylaws, trust agreement, partnership
agreement or other organizational document, as the case may be, of the
Subscriber or any agreement, certificate or other instrument to which the
Subscriber is a party or by which the Subscriber or any of its properties is
bound, or any permit, franchise, judgment, decree, statute, rule, regulation or
other law applicable to the Subscriber or the business or properties of the
Subscriber.

          (d) Accredited Investor. The Subscriber is an “Accredited
Investor” as defined in Rule 501(a) of Regulation D promulgated under the
Securities Act of 1933, as amended (“Securities
Act”).

          (e) Investment Intent. The Subscriber is acquiring the
Shares for its own account for investment, and not with a view to any
distribution, resale, subdivision or fractionalization thereof in violation of
the Securities Act or any other applicable domestic or foreign securities law,
and the Subscriber has no present plans to enter into any contract, undertaking,
agreement or arrangement for any such distribution, resale, subdivision or
fractionalization.

          (f) Information and Access. The Subscriber hereby
acknowledges receipt of copies of the Corporation’s Annual Report on Form 10-K
for the fiscal year ended June 30, 2007, and the Corporation’s Quarterly Reports
on Form 10-Q for the fiscal quarter ended September 30, 2007 and December 31,
2007. The Corporation has made available to the Subscriber or its attorneys,
accountants and other representatives all agreements, documents, records and
books that the Subscriber or its attorneys, accountants and other
representatives have requested relating to an investment in the Corporation. The
Subscriber and its attorneys, accountants and other representatives have had a
full opportunity to ask questions of and receive answers from the Corporation or
a person acting on behalf of the Corporation, concerning the terms and
conditions of this investment, and all questions asked by the Subscriber and its
attorneys, accountants and other representatives have been adequately answered
to the full satisfaction of the Subscriber and its attorneys, accountants and
other representatives.

2




           (g) Illiquidity; Risk. The Subscriber
understands that substantial restrictions will exist on transferability of the
Shares, and that the Subscriber may not be able to liquidate his or its
investment in the Corporation. The Subscriber understands that investment in the
Corporation entails a very high degree of risk and understands fully the risks
associated with the operation of the Corporation and its subsidiaries.
Additionally, the Subscriber has read and understands the risk factors and other
risks associated with an investment in the Corporation as such are set forth in
the Corporation’s annual and quarterly reports filed with the Securities and
Exchange Commission.

          (h) Economic
Loss and Sophistication. The Subscriber is able to
bear the economic risk of losing its entire investment in the Corporation. The
Subscriber’s overall commitment to investments which are not readily marketable
is not disproportionate to its net worth. The Subscriber’s investment in the
Corporation will not cause such overall commitment to become excessive. The
Subscriber has such knowledge and experience in financial and business matters
that it is capable of evaluating the risks and merits of this
investment.

          (i) No
Registration of Shares. The Subscriber acknowledges
and agrees that, based in part upon the Subscriber’s representations contained
herein and in reliance upon applicable exemptions, the Shares have not been and
will not be registered under the Securities Act or the securities laws of any
other domestic or foreign jurisdiction. Accordingly, no such Shares may be
offered for sale, sold, pledged, hypothecated or otherwise transferred in whole
or in part except in accordance with the terms of the Corporation’s certificate
of incorporation and bylaws and in compliance with all applicable laws,
including securities laws. The Subscriber acknowledges that it has been advised
that the Corporation has no obligation and does not intend to cause any of the
Shares to be registered under the Securities Act or any other securities laws or
to comply with an exemption under the Securities Act which would permit the
Subscriber to sell the Shares or any part thereof.

          (j) No
Investment Advice. The Subscriber acknowledges that
neither the Corporation nor any Affiliate (as defined below) thereof has
rendered or will render any investment advice or securities valuation advice to
the Subscriber, and that the Subscriber is not acquiring the Shares in reliance
upon, or with the expectation of, any such advice. For purposes of this
Agreement, “Affiliate”
shall mean, with respect to any Person (as defined below), any Person directly
or indirectly through one or more intermediaries, controlling, controlled by or
under common control with such Person. For purposes of this Agreement,
“Person” shall mean any
individual, partnership, corporation, limited liability company, trust,
unorganized entity or other entity.

          (k) Tax
Year. Unless otherwise specified on the Subscriber’s
signature page to this Agreement, the Subscriber’s tax year ends on December 31
of each year.

          (l) Withholding. The information provided by
the Subscriber on Form W-9, and delivered to the Corporation in connection with
this Agreement is true and complete, against penalties of
perjury.

3




          (m) Benefit
Plan Investor Status. Except as otherwise specified
on the Subscriber’s signature page to this Agreement, the Subscriber is not a
“benefit plan investor” (as such term is defined in 29 C.F.R. 2510.3-101(f)(2)).
If the Subscriber is a benefit plan investor, the plan participants are not
permitted to decide whether or how much to invest in particular investment
alternatives, and if the Subscriber is a collective investment vehicle, the
plans participating therein do not direct the specific investments made by the
Subscriber.

          (n) Source of
Funds. No part of the funds to be used to purchase
the Shares or to pay any amounts under any Subscriber Agreement constitutes an
asset of any employee benefit plan with respect to which the Corporation, or any
Person considered an affiliate of the Corporation within the meaning of Section
407(d)(7) of the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”), is a party in
interest or a disqualified person. As used herein, the terms “employee benefit
plan” and “party in interest” shall have the meanings assigned to such terms in
Section 3 of ERISA, and the term “disqualified person” shall have the meaning
assigned to such term in Section 4975 of the Code.

          (o) Investment Corporation Act. The
Subscriber was not specifically formed to acquire the Shares. The Subscriber is
not registered or required to register as an investment company under the
Investment Corporation Act of 1940 (the “Investment
Corporation Act”), and the Subscriber does not
maintain a separate investment account with respect to his or its investment in
the Corporation whereby each of its partners, shareholders, trustees, or other
owners has the right to elect not to participate in such investment, except
where such election requires the consent of all Persons or the consent of the
Subscriber’s general partner (or other controlling Person).

          (p) Legends. Subscriber understands and
acknowledges that each certificate evidencing the Shares shall bear a legend
substantially as follows:

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 NOR PURSUANT TO THE SECURITIES
OR “BLUE SKY” LAWS OF ANY JURISDICTION. SUCH SECURITIES MAY NOT BE OFFERED FOR
SALE, SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED, OR OTHERWISE DISPOSED OF, EXCEPT
PURSUANT TO (i) A REGISTRATION STATEMENT WITH RESPECT TO SUCH SECURITIES WHICH
IS EFFECTIVE UNDER SUCH ACT, (ii) RULE 144 UNDER SUCH ACT, OR (iii) ANY OTHER
VALID EXEMPTION FROM REGISTRATION UNDER SUCH ACT.

     The
Subscriber understands and acknowledges that each certificate evidencing the
Shares shall also bear legends substantially as follows:

RESTRICTIONS ON TRANSFER OF STOCK
AND REQUIREMENTS TO TRANSFER STOCK

Article Fifth of the Certificate of
Incorporation of the Corporation (“Article Fifth”) restricts the direct or
indirect sale, transfer, disposition, purchase or acquisition (“Transfer”) of
shares of common stock of the Corporation (“Stock”), and requires the Transfer
of Stock, under certain circumstances. 

4




In general, Article Fifth prohibits any Transfer of
Stock on or prior to January 1, 2022 or such earlier date or later date as may
be determined by the board of directors of the Corporation (the “Board of
Directors”) without prior approval of the Board of Directors by or to any holder
(a) who beneficially owns directly or through attribution 5% or more of the
Stock (as determined under Section 382 of the Internal Revenue Code of 1986 and
the applicable Treasury Regulations thereunder, each as amended from time to
time (collectively, “Section 382”) with certain modifications), or (b) who, upon
such Transfer of Stock, would beneficially own directly or through attribution
5% or more of the Stock (as determined under Section 382, with certain
modifications). If any person or entity attempts to Transfer Stock in violation
of Article Fifth, such purported Transfer shall be null and void and the
purported acquiror shall have no rights with respect thereto. Among other
things, Article Fifth permits the Corporation to require sale of any Stock
Transferred in violation of Article Fifth, and the purported acquiror shall not
be entitled to receive any proceeds of such sale in excess of the amount paid by
such purported acquiror for such Stock and shall be required to return any
dividends or distributions on such Stock. In addition, certain holders of Stock
will be required to Transfer Stock as a result of certain transfers of interests
in entities that own Stock and the proceeds of such sale to be received by the
holder shall be limited to the fair market value of such Stock at the time of
the transfer of such interests. Under Article Fifth, the Corporation may require
as a condition to the registration of the Transfer of any Stock that the
proposed transferee furnish to the Corporation information regarding the
ownership of Stock by the proposed transferee as well as the ownership of Stock
by any persons or entities controlling, controlled by or under common control
with such proposed transferee. Under certain circumstances, Article Fifth
authorizes the Board of Directors to extend or accelerate the expiration date of
the Article Fifth transfer restrictions and to modify certain provisions of
Article Fifth. The foregoing is a summary description only of certain of the
provisions of Article Fifth, to which reference is made for a complete
description of the restrictions on the Transfer of Stock and the provisions
requiring the Transfer of Stock and the consequences of the violation thereof.
The Corporation will furnish a copy of Article Fifth to the holder of record of
this certificate without charge upon written request to the Corporation at its
principal place of business. By acceptance of this certificate, the holder
hereof and any beneficial owner of the shares represented hereby shall be bound
in all respects by such Article Fifth, as modified from time to time by the
Board of Directors or the stockholders of the Corporation.

THE CORPORATION WILL FURNISH WITHOUT CHARGE, TO EACH
STOCKHOLDER WHO SO REQUESTS, A COPY OF THE POWERS, DESIGNATIONS, PREFERENCES AND
RELATIVE, PARTICIPATING, OPTIONAL OR OTHER SPECIAL RIGHTS OF EACH CLASS OF STOCK
OR SERIES THEREOF AND THE QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS OF SUCH
PREFERENCES AND/OR RIGHTS. SUCH REQUEST MAY BE MADE TO THE SECRETARY OF THE
CORPORATION OR TO THE TRANSFER AGENT NAMED ON THIS
CERTIFICATE.

5





     2.2 Effect of
Representations. The Subscriber’s representations,
warranties and agreements set forth in this Agreement are true and correct. The
Subscriber acknowledges that the Corporation has relied upon the
representations, warranties and agreements of, and information furnished by, the
Subscriber set forth in this Agreement and that all such representations,
warranties, agreements and furnished information shall survive the date
hereof.

ARTICLE
III
Representations of the
Corporation

     3.1 Representations. The Corporation hereby represents and warrants to, and agrees with,
the Subscriber as follows:

          (a) Incorporation; Jurisdiction. The
Corporation (i) is duly organized and validly existing; (ii) is in good standing
under the laws of the State of Delaware; and (iii) has all requisite corporate
power and authority to carry on its business as now conducted and as proposed to
be conducted.

          (b) Power and
Authority. The Corporation is authorized to execute
and deliver each Subscriber Agreement to which it is a party, to perform its
obligations under each such Subscriber Agreement, and to consummate the
transactions that are the respective subjects of each such Subscriber Agreement.
The signature of the respective individual signing any Subscriber Agreement on
behalf of the Corporation is binding upon the Corporation.

          (c) Compliance with Laws and Other Instruments. The execution and delivery of the Subscriber Agreements by or on
behalf of the Corporation and the consummation by the Corporation of the
transactions contemplated by the Subscriber Agreements (including without
limitation the offer and sale of the Shares) do not (i) conflict with or result
in any violation of or default under any provision of the certificate of
incorporation, bylaws, or other organizational document of the Corporation or
any agreement, certificate, or other instrument (including without limitation
any indenture, mortgage, deed of trust, credit agreement, note or other evidence
of indebtedness, lease, or license) to which the Corporation is a party or by
which the Corporation or any of its properties is bound, or any permit,
franchise, order, writ, judgment, decree, statute, rule, regulation, or other
law applicable to the Corporation or its respective business or properties or
(ii) require the filing or registration with, or the approval, authorization,
license, or consent of, any court or governmental department, agency, or
authority other than those which have already been duly and validly given or
obtained or which are referred to the next sentence. As soon as practicable
following the Closing Date, but in all events within the periods prescribed by
applicable law, the Corporation will file a Form D with the Securities and
Exchange Commission and any applicable state securities regulatory authorities
and will file such other notices and reports as are required to be filed under
applicable state securities laws in order to qualify for exemptions applicable
to the offer or sale of Securities in the Corporation.

          (d) Shares. Immediately following the
consummation of the transaction contemplated hereby, (i) the authorized capital
stock of the Corporation shall consist of 200,000,000 shares of Common Stock, of
which 103,049,382 shares shall be issued and outstanding, (ii) all of the
Corporation’s outstanding equity securities shall be validly issued, fully paid
and nonassessable, and (iii) neither the Corporation nor any Person acting on
its behalf has taken any action that would subject the issuance or sale of any
of the Shares to the registration and prospectus delivery provisions of the
Securities Act.

6




          (e) Proceedings. No action, proceeding or investigation is
pending or, to the knowledge of the Corporation, threatened against the
Corporation or any Affiliate thereof that (i) questions or challenges the
validity or purpose of the Corporation, (ii) could reasonably be expected to
have a material adverse effect on the operations, business, or affairs of the
Corporation, or (iii) claims or alleges any fraud or misrepresentation under, or
any violation of, any federal or state securities law, rule, or regulation.
There are no other actions, proceedings, or investigations pending or, to the
knowledge of the Corporation, threatened against or affecting the
Corporation.

          (f) Validity of Securities. The Shares purchased and sold
pursuant to this Agreement, when issued, sold and delivered in accordance with
its terms for the consideration expressed herein, shall be duly and validly
issued.

     3.2
Effect and Time of Representations. The representations, warranties and
agreements of the Corporation set forth in this Agreement are true and correct
in all material respects. The Corporation acknowledges that the Subscriber has
relied upon the representations and agreements of the Corporation set forth in
this Agreement, and that all such representations and agreements shall survive
the date hereof.

ARTICLE IV

Miscellaneous

     4.1
Amendments. This Agreement may be modified or amended only with the
written consent of the Corporation and the Subscriber, except that
modifications, amendments, waivers, consents or other matters relating to the
Certificate of Incorporation of the Corporation or the Bylaws of the Corporation
shall not be deemed modifications or amendments of this
Agreement.

     4.2
Notices. Any notice, request, demand or other communication required by
or permitted to be given in connection with this Agreement shall be in writing,
except as expressly otherwise permitted herein, and shall be delivered in
person, sent by first class mail (postage prepaid and certified or registered,
with return receipt requested), sent by telefacsimile or similar means of
communication, or delivered by a courier service (charges prepaid), to the
respective party at his or its address as set forth on the signature page
hereof. Each party may change his or its address by notifying each other party
of such change in accordance with the provisions of this Section 4.2. Any
such notice, request, demand or other communication shall be deemed to be given
or made (a) if personally delivered, when received; (b) if mailed, on the fifth
day after it is deposited in the United States mail, properly addressed, with
proper postage affixed; (c) if sent by telefacsimile or similar device, when
electronically confirmed; and (d) if sent by courier, as of the date so
delivered.

7




     4.3
Gender, Number, etc. All pronouns used herein shall be deemed to refer to
the masculine, feminine or neuter gender as the identity of the applicable
person may require, and words using the singular or plural number shall be
deemed to include respectively the plural or singular number as applicable.
Unless otherwise specified, all references in this Agreement to Articles,
Sections, or paragraphs shall refer to provisions of this Agreement. As used in
this Agreement, the words “herein,” “hereof,” “hereto,” or derivatives shall
refer to this entire Agreement, and the word “or” shall mean
“and/or.”

     4.4
Governing Law, Binding Effect, and Severability. This Agreement shall be
enforced, governed, and construed in all respects in accordance with the laws of
the State of Delaware applicable to contracts executed and performable solely in
such state. The Subscriber may not assign any of his or its rights or
obligations under this Agreement without the prior written consent of the
Corporation. This Agreement and the rights and obligations set forth herein
shall be binding upon, and shall inure to the benefit of, the Subscriber, the
Corporation and their respective successors and permitted assigns. If any
provision of this Agreement, or the application of such provision to any
circumstance, shall be invalid under the applicable law of any jurisdiction, the
remainder of this Agreement or the application of such provision to other
Persons or circumstances or in other jurisdictions shall not be affected
thereby.

     4.5
Entire Agreement. This Agreement, the appendices hereto constitute the
entire agreement, and supersedes all prior agreements or understandings, among
the parties hereto with respect to the subject matter hereof.

     4.6
Counterparts. This Agreement may be executed in multiple counterparts,
each of which shall be deemed an original Agreement, and all of which shall
constitute one Subscription Agreement between each of the parties hereto,
notwithstanding that, all of the parties are not signatories to the original or
the same counterpart. Each party hereto hereby acknowledges the effectiveness
of, and agrees to accept, facsimile signatures of any other party hereto for
purposes of executing this Agreement; provided, however, that any party
executing this Agreement by facsimile signature shall provide any other party
with the number of original signature pages as such other party may specify as
soon as is practicable following a request for same by the other
party.

8




Subscriber Signature
Page

     IN WITNESS WHEREOF,
the Subscriber has executed this Subscription Agreement as of March 5,
2008.

	 	LDN Stuyvie Partnership 
	Total
      Subscription Price 	 
	$6,846,392.37 	 
	(consisting of $1,000,000 in 	By: 	/S/ William T. Comfort 	
	immediately available funds and 	Name: William Ty Comfort, III 
	cancellation of all principal and 	Title: General Partner 
	interest
      under the Note) 	 
	 
	 
	Number
      of Shares of Common Stock 	State and country in which Subscriber is 
	Subscribed for: 	organized (if not a natural person): 
	6,520,374 	 
	 
	 	Texas, USA 
	 
	 	Address of Subscriber’s principal place
of 
	 	business (or residence if a natural
  person): 
	 
	 	6 Crampton’s Gap 
	 	Richardson, TX 75087 
	 
	 	FAX: 	 	 
	 	Attn: 	William T.
      Comfort, III 	 



Tax year end if not December
31: _______________________________________________________________________________


Check box if Subscriber was formed
to acquire securities of the Corporation: o1

Each parent of Subscriber must
complete and execute a signature page to this Agreement in the form
provided.

 

 

Subscriber Signature Page 
to
Subscription Agreement




Subscription of LDN Stuyvie
Partnership, accepted as of March 5, 2008. 

	 	The Corporation: 
			 
	 	LYRIS, INC. 
			 
	 		 
		By: /S/ Luis
      Rivera                      
       	 
		Name:  	Luis Rivera 
		Title:	Chief Executive Officer 



Address of the
Corporation:

103 Foulk Road 
Suite
205Q
Wilmington, Delaware
19803

With copy to:

Vinson & Elkins L.L.P. 
2001
Ross Avenue, Suite 3700 
Dallas, Texas 75201 
Fax: 214-999-7895 
Attn:
Michael D. Wortley