xXXxX*s Inc.
000 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
___________ __, 1999
iTurf Inc.
000 Xxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: President
Gentlemen:
In connection with the proposed initial public offering by iTurf
Inc. ("iTurf"), we have agreed as follows:
1. If xXXxX*s Inc. ("xXXxX*s") proposes in a single transaction or
series of related transactions to transfer all or a portion of the common stock
of iTurf ("Common Stock") held by it to one or more third parties as a result of
which a person (or persons acting as a group) to which the Common Stock is
transferred would own a Controlling Interest (as defined below) in iTurf (a
"Transaction"), then xXXxX*s will refrain from effecting a Transaction unless,
prior to the consummation thereof, the public stockholders of iTurf (the "Public
Stockholders") shall have been offered the opportunity to join in such
Transaction on a pro rata basis, as provided in this letter. Any purported
transfer by xXXxX*s subject to this letter agreement not made in compliance with
these provisions shall be void and shall not be consummated upon the books and
records of iTurf. For purposes of this letter agreement, a person or group has a
"Controlling Interest" if it has direct or beneficial ownership of 35% or more
of the voting power represented by the voting securities of iTurf and no other
person directly or beneficially owns a greater percentage of such voting power.
2. Prior to the consummation of any Transaction, xXXxX*s shall
cause each person or persons that propose to acquire Common Stock in the
Transaction (the "Proposed Purchasers") to offer (the "Purchase Offer") to
purchase on a pro rata basis from the Public Stockholders the same percentage of
the aggregate number of shares of Common Stock held by the Public Stockholders
as the percentage determined by dividing the number of shares of Common Stock to
be purchased from xXXxX*s by the aggregate number of shares of Common Stock held
by xXXxX*s, at the same price per share, and on substantially the same other
terms and conditions, as the Proposed Purchaser has offered to purchase the
Common Stock to be sold by xXXxX*s.
3. The provisions of this letter agreement shall not apply to (a)
Rule 144 sales by xXXxX*s, (b) a sale by xXXxX*s of shares in a public offering,
(c) a distribution by xXXxX*s of shares to its holders of common stock, or (d)
transfers by xXXxX*s to its affiliates, provided that any such affiliate agrees
in writingto be bound by the provisions of this letter agreement.
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4. The provisions of this letter agreement shall terminate on the
first anniversary of iTurf's initial public offering or on May 31, 1999 if such
offering is not consummated by such date.
5. This letter agreement shall be governed by the laws of Delaware.
This letter agreement contains the entire agreement of the parties. This letter
agreement may not be amended except by written instrument executed with the same
formality as this letter agreement; provided, however, that as long as xXXxX*s
has direct or beneficial ownership of 30% or more of the voting power
represented by the voting securities of iTurf and no other person directly or
beneficially owns a greater percentage of such voting power, no such amendment
of a material term or waiver of a material obligation of this Agreement shall be
valid unless it has been approved by a majority of the members of the board of
directors of iTurf who are not directors or officers of xXXxX*s or the
beneficial owners of five percent or more of the outstanding voting securities
of xXXxX*s. This letter agreement may be executed in counterparts.
xXXxX*s Inc.
By: ___________________
AGREED:
iTurf Inc.
By: ___________________
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