<PAGE>

                                                                  Exhibit 10.17


                                      ADAMS
                                      & CO.
                                   REAL ESTATE
                                      INC.

This WORK ORDER shall apply ONLY in connection with lease dated MARCH 22, 1999
made between the undersigned:

Building   42-52 WEST 39TH STREET      Space      ENTIRE 11TH FLOOR
                                                  general & executive offices,
Tenant        BLUEFLY, INC.            Business   and storage of apparel,
                                                  accessories & home products
Lease begins   6/1/99                  Lease expires  5/31/09

The following work ONLY is to be done by Landlord:

PUT AIR CONDITIONING IN GOOD WORKING ORDER; DELIVER PREMISES BROOM
CLEAN.

All work will commence as scheduled and will be prosecuted diligently, subject
to anything beyond Landlord's control, including but not limited to strikes,
labor troubles, governmental intervention, wars or other emergencies. Progress
of work specified above shall not affect payment of rent. Where work as above
mentioned is held up pending Tenant's request, either verbal or written, the
Landlord shall not be obligated to perform such work within the period of the
last six months of the lease and no liability shall result because of failure on
the Landlord's part to perform such work.

42-52 WEST 39 STREET LLC
BY: ADAMS & CO. REAL ESTATE, INC., Agent

BY: _______________________________ Landlord
     Executive Director of Leasing

BLUEFLY, INC. _____________________ Tenant

BY: ________________________________________



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                                                                       L-12/75A

                           STANDARD FORM OF LOFT LEASE
                     THE REAL ESTATE BOARD OF NEW YORK, INC.

AGREEMENT OF LEASE, made as of this - - - 22ND - - - - - day of - - MARCH - - -
- 1999 ,between

42-52 WEST 39 STREET LLC (formerly JOHN R. PERLMAN, et al) - - - - - - - - - - -
- - - - - - -

party of the first part, hereinafter referred to as LANDLORD, and BLUEFLY, INC.,
a New York corporation - - - - -


- - - - - - - - - - - - - - - - - - - - - - - - - party of the second part,
hereinafter referred to as TENANT, WITNESSETH: Landlord hereby leases to Tenant
and Tenant hereby hires from Landlord the ENTIRE ELEVENTH (11Th) FLOOR - - - - -
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -


in the building known as 42-52 WEST 39TH STREET - - - - - - - - - - - - - - - -
- - - - - - - - - - in the Borough of - - MANHATTAN - - , City of New York, for
the term of TEN (10) YEARS - - - - - - - - - - - - - - - - - - - - (or until
such term shall sooner cease and expire as hereinafter provided) to commence on
the - - - 1ST - - - - - - day of - - - JUNE - - - - nineteen hundred and
NINETY-NINE - - - , and to end on the- - - 31ST - - - - - day - - - of MAY - - -
- two thousand and NINE - - - - -both dates inclusive, at an annual rental rate
of ONE HUNDRED THIRTY-THREE THOUSAND SIX HUNDRED ($133,600.) DOLLARS (herein
called base rent) - - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - -
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

which Tenant agrees to pay in lawful money of the United States which shall be
legal tender in payment of all debts and dues, public and private, at the time
of payment, in equal monthly installments in advance on the first day of each
month during said term, at the office of Landlord or such other place as
Landlord may designate, without any set off or deduction whatsoever, except that
Tenant shall pay the first monthly installment(s) on the execution hereof
(unless this lease be a renewal).

          In the event that, at the commencement of the term of this lease, or
thereafter, Tenant shall be in default in the payment of rent to Landlord
pursuant to the terms of another lease with Landlord or with Landlord's
predecessor in interest, Landlord may at Landlord's option and without notice to
Tenant add the amount of such arrearages to any monthly installment of rent
payable hereunder and the same shall be payable to Landlord as additional rent.

          The parties hereto, for themselves, their heirs, distributees,
executors, administrators, legal representatives, successors and assigns, hereby
covenant as follows:

RENT OCCUPANCY

          1. Tenant shall pay the rent as above and as hereinafter provided.
          2. Tenant shall use and occupy demised premises for general and
             executive offices, and

<PAGE>


 storage of apparel, accessories and home products ----------------------------
 and for no other purpose.

Alterations:

          3. Tenant shall make no structural changes in or to the demised
premises of any nature without Landlord's prior written consent. Subject to the
prior written consent of Landlord, and to the provisions of this article, Tenant
at Tenant's expense, may make alterations, installations, additions or
improvements which are non-structural and which do not affect utility services
or plumbing and electrical lines, in or to the interior of the demised premises
by using contractors or mechanics first approved by Landlord. All fixtures and
all paneling, partitions, railings and like installations permanantly fixed in
the premises at any time, either by Tenant or by Landlord in Tenant's behalf,
shall, upon installation, become the property of Landlord and shall remain upon
and be surrendered with the demised premises unless Landlord, by notice to
Tenant no later than twenty days prior to the date fixed as the termination of
this lease, elects to relinquish Landlord's right thereto and to have them
removed by Tenant, in which event, the same shall be removed from the premises
by Tenant prior to the expiration of the lease, at Tenant's expense. Nothing in
this article shall be construed to give Landlord title to or to prevent Tenant's
removal of trade fixtures, moveable office furniture and equipment, but upon
removal of any such from the premises or upon removal of other installations as
may be required by Landlord, Tenant shall immediately and at its expense, repair
and restore the premises to the condition existing prior to installation and
repair any damage to the demised premises or the building due to such removal.
All property permitted or required to be removed by Tenant at the end of the
term remaining in the premises after Tenant's removal shall be deemed abandoned
and may, at the election of Landlord, either be retained as Landlord's property
or may be removed from the premises by Landlord at Tenant's expense. Tenant
shall, before making any alterations, additions, installations or improvements,
at its expense, obtain all permits, approvals and certificates required by any
governmental or quasi-governmental bodies and (upon completion) certificates of
final approval thereof and shall deliver promptly duplicates of all such
permits, approvals and certificates to Landlord and Tenant agrees to carry and
will cause Tenant's contractors and sub-contractors to carry such workman's
compensation, general liability, personal and property damage insurance as
Landlord may require. If any mechanic's lien is filed against the demised
premises, or the building of which the same forms a part, for work claimed to
have been done for, or materials furnished to, Tenant, whether or not done
pursuant to this article, the same shall be discharged by Tenant within ten days
thereafter, at Tenant's expense, by filing the bond required by law.

Repairs:

4. Landlord shall maintain and repair the public portions of the building
including structure and infrastructure both exterior and interior. Tenant shall,
throughout the term of this lease, take good care of the demised premises and
the fixtures and appurtenances therein and at Tenant's sole cost and expense,
make all non-structural repairs thereto as and when needed to preserve them in
good working order and condition, reasonable wear and tear, obsolescence and
damage from the elements, fire or other casualty, excepted. Notwithstanding the
foregoing, all damage or injury to the demised premises or to any other part of
the building, or to its fixtures, equipment and appurtenances, whether
requiring structural or non-structural repairs, caused by or resulting from


<PAGE>


carelessness, omission, neglect or improper conduct of Tenant, Tenant's
servants, employees, invitees or licensees, shall be repaired promptly by Tenant
at its sole cost and expense, to the satisfaction of Landlord reasonably
exercised. Tenant shall also repair all damage to the building and the demised
premises caused by the moving of Tenant's fixtures, furniture or equipment. All
the aforesaid repairs shall be of quality or class equal to the original work or
construction. If Tenant fails after ten days notice to proceed with due
diligence to make repairs required to be made by Tenant, the same may be made by
the Landlord at the expense of Tenant and the expenses thereof incurred by
Landlord shall be collectible as additional rent after rendition of a bill or
statement therefor. If the demised premises be or become infested with vermin,
Tenant shall at Tenant's expense, cause the same to be exterminated from time to
time to the satisfaction of Landlord. Tenant shall give Landlord prompt notice
of any defective condition in any plumbing, heating system or electrical lines
located in, servicing or passing through the demised premises and following such
notice, Landlord shall remedy the condition with due diligence but at the
expense of Tenant if repairs are necessitated by damage or injury attributable
to Tenant, Tenant's servants, agents, employees, invitees or licensees as
aforesaid. Except as specifically provided in Article 9 or elsewhere in this
lease, there shall be no allowance to the Tenant for a diminution of rental
value and no liability on the part of Landlord by reason of inconvenience,
annoyance or injury to business arising from Landlord, Tenant or others making
or failing to make any repairs, alterations, additions or improvements in or to
any portion of the building or the demised premises or in and to the fixtures,
appurtenances or equipment thereof. The provisions of this Article 4 with
respect to the making of repairs shall not apply in the case of fire or other
casualty which are dealt with in Article 9 hereof.
                                                                    See Addendum

Window Cleaning:

5. Tenant will not clean nor require, permit, suffer or allow any window in the
demised premises to be cleaned from the outside in violation of Section 202 of
the New York State Labor Law or any other applicable law or of the Rules of the
Board of Standards and Appeals, or of any other Board or body having or
asserting jurisdiction.

Requirements of Law, Fire Insurance, Floor Loads:

6. Prior to the commencement of the lease term, if Tenant is then in possession,
and at all times thereafter, Tenant, at Tenant's sole cost and expense, shall
promptly comply with all present and future laws, orders and regulations of all
state, federal, municipal and local governments, departments, commissions and
boards and any direction of any public officer pursuant to law,



<PAGE>



and all orders, rules and regulations of the New York Board of Fire Underwriters
or any similar body which shall impose any violation, order or duty upon
Landlord or Tenant with respect to the demised premises arising out of Tenant's
use or manner of use thereof, or with respect to the building if arising out of
Tenant's use or manner of use of the premises or the building (including the use
permitted under the lease). Except as provided in Article 29 hereof, nothing
herein shall require Tenant to make structural repairs or alterations unless
Tenant has by its manner of use of the demised premises or method of operation
therein, violated any such laws, ordinances, orders, rules, regulations or
requirements with respect thereto. Tenant may, after securing Landlord to
Landlord's satisfaction against all damages, interest, penalties and expenses,
including, but not limited to, reasonable attorneys' fees, by cash deposit or by
surety bond in an amount and in a company satisfactory to Landlord, contest and
appeal any such laws, ordinances, orders, rules, regulations or requirements
provided same is done with all reasonable promptness and provided such appeal
shall not subject Landlord to prosecution for a criminal offense or constitute a
default under any lease or mortgage under which Landlord may be obligated, or
cause the demised premises or any part thereof to be condemned or vacated.
Tenant shall not do or permit any act or thing to be done in or to the demised
premises which is contrary to law, or which will invalidate or be in conflict
with public liability, fire or other policies of insurance at any time carried
by or for the benefit of Landlord with respect to the demised premises or the
building of which the demised premises form a part, or which shall or might
subject Landlord to any liability or responsibility to any person or for
property damage, nor shall Tenant keep anything in the demised premises except
as now or hereafter permitted by the Fire Department, Board of Fire
Underwriters, Fire Insurance Rating Organization or other authority having
jurisdiction, and then only in such manner and such quantity so as not to
increase the rate for fire insurance applicable to the building, nor use the
premises in a manner which will increase the insurance rate for the building or
any property located therein over that in effect prior to the commencement of
Tenant's occupancy. Tenant shall pay all costs, expenses, fines, penalties or
damages, which may be imposed upon Landlord by reason of Tenant's failure to
comply with the provisions of this article and if by reason of such failure the
fire insurance rate shall, at the beginning of this lease or at any time
thereafter, be higher than it otherwise would be, then Tenant shall reimburse
Landlord, as additional rent hereunder, for that portion of all fire insurance
premiums thereafter paid by Landlord which shall have been charged because of
such failure by Tenant, and shall make such reimbursement upon the first day of
the month following such outlay by Landlord. In any action or proceeding wherein
Landlord and Tenant are parties a schedule or "make-up" of rate for the building
or demised premises issued by the New York Fire Insurance Exchange, or other
body making fire insurance rates applicable to said premises shall be conclusive
evidence of the facts therein stated and of the several items and charges in the
fire insurance rate then applicable to said premises. Tenant shall not place a
load upon any floor of the demised premises exceeding the floor load per square
foot area which it was designed to carry and which is allowed by law. Landlord
reserves the right to prescribe the weight and position of all safes, business
machines and mechanical equipment. Such installations shall be placed and
maintained by Tenant, at Tenant's expense, in settings sufficient, in Landlord's
judgment, to absorb and prevent vibration, noise and annoyance.

Subordinations:

          7. This lease is subject and subordinate to all ground or underlying
leases and to all mortgages which may now or hereafter affect such leases or the
real property of which demised premises are a part and to all renewals,
modifications, consolidations, replacements and extensions


<PAGE>


of any such underlying leases and mortgages. This clause shall be self-operative
and no further instrument of subordination shall be required by any ground or
underlying lessee or by any mortgagee, affecting any lease or the real property
of which the demised premises are a part. In confirmation of such subordination,
Tenant shall execute promptly any certificate of good standing that Landlord may
request.
                                                                    See Addendum

Property--Loss, Damage, Reimbursement Indemnity:

          8. Landlord or its agents shall not be liable for any damage to
property of Tenant or of others entrusted to employees of the building, nor for
loss of or damage to any property of Tenant by theft or otherwise, nor for any
injury or damage to persons or property resulting from any cause of whatsoever
nature, unless caused by or due to the negligence of Landlord, its agents,
servants or employees; nor shall Landlord or its agents be liable for any such
damage caused by other tenants or persons in, upon or about said building or
caused by operations in construction of any private, public or quasi public
work. If at any time any windows of the demised premises are temporarily closed,
darkened or bricked up (or permanently closed, darkened or bricked up, if
required by law) for any reason whatsoever including, but not limited to
Landlord's own acts, Landlord shall not be liable for any damage Tenant may
sustain thereby and Tenant shall not be entitled to any compensation therefor
nor abatement or diminution of rent nor shall the same release Tenant from its
obligations hereunder nor constitute an eviction. Tenant shall not move any
safe, heavy machinery, heavy equipment, bulky matter, or fixtures into or out of
the building without Landlord's prior written consent. If such safe, machinery,
equipment, bulky matter or fixtures requires special handling, all work in
connection therewith shall comply with the Administrative Code of the City of
New York and all other laws and regulations applicable thereto and shall be done
during such hours as Landlord may designate. Tenant shall indemnify and save
harmless Landlord against and from all liabilities, obligations, damages,
penalties, claims, costs and expenses for which Landlord shall not be reimbursed
by insurance, including reasonable attorneys fees, paid, suffered or incurred as
a result of any breach by Tenant, Tenant's agents, contractors, employees,
invitees, or licensees, of any covenant or condition of this lease, or the
carelessness, negligence or improper conduct of the Tenant, Tenant's agents,
contractors, employees, invitees or licensees. Tenant's liability under this
lease extends to the acts and omissions of any subtenant, and any agent,
contractor, employee, invitee or licensee of any sub-tenant. In case any action
or proceeding is brought against Landlord by reason of any such claim, Tenant,
upon written notice from Landlord, will, at Tenant's expense, resist or defend
such action or proceeding by counsel approved by Landlord in writing, such
approval not to be unreasonably withheld.

Destruction, Fire and Other Casualty:

          9. (a) If the demised premises or any part thereof shall be damaged by
fire or other casualty, Tenant shall give immediate notice thereof to Landlord
and this lease shall continue in full force and effect except as hereinafter set
forth. (b) If the demised premises are partially damaged or rendered partially
unusable by fire or other casualty, the damages thereto shall be repaired by and
at the expense of Landlord and the rent, until such repair shall be
substantially completed, shall be apportioned from the day following the
casualty according to the part of the premises which is usable. (c) If the
demised premises are totally damaged or rendered wholly unusable by fire or
other


<PAGE>


casualty, then the rent shall be proportionately paid up to the time of the
casualty and thenceforth shall cease until the date when the premises shall have
been repaired and restored by Landlord, subject to Landlord's right to elect not
to restore the same as hereinafter provided. (d) If the demised premises are
rendered wholly unusable or (whether or not the demised premises are damaged in
whole or in part) if the building shall be so damaged that Landlord shall decide
to demolish it or to rebuild it, then, in any of such events, Landlord may elect
to terminate this lease by written notice to Tenant given within 90 days after
such fire or casualty specifying a date for the expiration of the lease, which
date shall not be more than 60 days after the giving of such notice, and upon
the date specified in such notice the term of this lease shall expire as fully
and completely as if such date were the date set forth above for the termination
of this lease and Tenant shall forthwith quit, surrender and vacate the premises
without prejudice however, to Landlord's rights and remedies against Tenant
under the lease provisions in effect prior to such termination, and any rent
owing shall be paid up to such date and any payments of rent made by Tenant
which were on account of any period subsequent to such date shall be returned to
Tenant. Unless Landlord shall serve a termination notice as provided for herein.
Landlord shall make the repairs and restorations under the conditions of (b) and
(c) hereof, with all reasonable expedition subject to delays due to adjustment
of insurance claims, labor troubles and causes beyond Landlord's control. After
any such casualty, Tenant shall cooperate with Landlord's restoration by
removing from the premises as promptly as reasonably possible, all of Tenant's
salvageable inventory and movable equipment, furniture, and other property.
Tenant's liability for rent shall resume five (5) days after written notice from
Landlord that the premises are substantially ready for Tenant's occupancy. (e)
Nothing contained hereinabove shall relieve Tenant from liability that may exist
as a result of damage from fire or other casualty. Notwithstanding the
foregoing, each party shall look first to any insurance in its favor before
making any claim against the other party for recovery for loss or damage
resulting from fire or other casualty, and to the extent that such insurance is
in force and collectible and to the extent permitted by law, Landlord and Tenant
each hereby releases and waives all right of recovery against the other or any
one claiming through or under each of them by way of subrogation or otherwise.
The foregoing release and waiver shall be in force only if both releasors'
insurance policies contain a clause providing that such a release or waiver
shall not invalidate the insurance and also, provided that such a policy can be
obtained without additional premiums. Tenant acknowledges that Landlord will not
carry insurance on Tenant's furniture and/or furnishings or any fixtures or
equipment, improvements, or appurtenances removable by Tenant and agrees that
Landlord will not be obligated to repair any damage thereto or replace the same.
(f) Tenant hereby waives the provisions of Section 227 of the Real Property Law
and agrees that the provisions of this article shall govern and control in lieu
thereof.

Eminent Domain:

          10. If the whole or any part of the demised premises shall be acquired
or condemned by Eminent Domain for any public or quasi public use or purpose,
then and in that event, the term of this lease shall cease and terminate from
the date of title vesting in such proceeding and Tenant shall have no claim for
the value of any unexpired term of said lease.

Assignment, Mortgage, Etc.:

          11. Tenant, for itself, its heirs, distributees, executors,
administrators, legal representatives,


<PAGE>


successors and assigns, expressly covenants that it shall not assign, mortgage
or encumber this agreement, nor underlet, or suffer or permit the demised
premises or any part thereof to be used by others, without the prior written
consent of Landlord in each instance. If this lease be assigned, or if the
demised premises or any part thereof be underlet or occupied by anybody other
than Tenant, Landlord may, after default by Tenant, collect rent from the
assignee, under-tenant or occupant, and apply the net amount collected to the
rent herein reserved, but no such assignment, underletting, occupancy or
collection shall be deemed a waiver of this covenant, or the acceptance of the
assignee, under-tenant or occupant as tenant, or a release of Tenant from the
further performance by Tenant of covenants on the part of Tenant herein
contained. The consent by Landlord to an assignment or underletting shall not in
any wise be construed to relieve Tenant from obtaining the express consent in
writing of Landlord to any further assignment or underletting. This Article is
modified by Articles #56 & #57.

Electric Current:

          12. Rates and conditions in respect to submetering or rent inclusion,
as the case may be, to be added in RIDER attached hereto. Tenant covenants and
agrees that at all times its use of electric current shall not exceed the
capacity of existing feeders to the building or the risers or wiring
installation and Tenant may not use any electrical equipment which, in
Landlord's opinion, reasonably exercised, will overload such installations or
interfere with the use thereof by other tenants of the building. The change at
any time of the character of electric service shall in no wise make Landlord
liable or responsible to Tenant, for any loss, damages or expenses which Tenant
may sustain.

----------
Rider to be added if necessary.

Access to Premises:

          13. Landlord or Landlord's agents shall have the right (but shall not
be obligated) to enter the demised premises in any emergency at any time, and,
at other reasonable times, to examine the same and to make such repairs,
replacements and improvements as Landlord may deem necessary and reasonably
desirable to the demised premises or to any other portion of the building or
which Landlord may elect to perform following Tenant's failure to make repairs
or perform any work which Tenant is obligated to perform under this lease, or
for the purpose of complying with laws, regulations and other directions of
governmental authorities. Tenant shall permit Landlord to use and maintain and
replace pipes and conduits in and through the demised premises and to erect new
pipes and conduits therein. Landlord may, during the progress of any work in the
demised premises, take all necessary materials and equipment into said premises
without the same constituting an eviction nor shall the Tenant be entitled to
any abate-


<PAGE>


ment of rent while such work is in progress nor to any damages by reason of loss
or interruption of business or otherwise. Throughout the term hereof Landlord
shall have the right to enter the demised premises at reasonable hours for the
purpose of showing the same to prospective purchasers or mortgagees of the
building, and during the last six months of the term for the purpose of showing
the same to prospective tenants and may, during said six months period, place
upon the premises the usual notices "To Let" and "For Sale" which notices Tenant
shall permit to remain thereon without molestation. If Tenant is not present to
open and permit an entry into the premises, Landlord or Landlord's agents may
enter the same whenever such entry may be necessary or permissible by master key
or forcibly and provided reasonable care is exercised to safeguard Tenant's
property and such entry shall not render Landlord or its agents liable therefor,
nor in any event shall the obligations of Tenant hereunder be affected. If
during the last month of the term Tenant shall have removed all or substantially
all of Tenant's property therefrom, Landlord may immediately enter, alter,
renovate or re-decorate the demised premises without limitation or abatement of
rent, or incurring liability to Tenant for any compensation and such act shall
have no effect on this lease or Tenant's obligations hereunder. Landlord shall
have the right at any time, without the same constituting an eviction and
without incurring liability to Tenant therefor to change the arrangement and/or
location of public entrances, passageways, doors, doorways, corridors,
elevators, stairs, toilets, or other public parts of the building and to change
the name, number or designation by which the building may be known.
                                                                    See Addendum

Vault, Vault Space, Area:

          14. No Vaults, vault space or area, whether or not enclosed or
covered, not within the property line of the building is leased hereunder,
anything contained in or indicated on any sketch, blue print or plan, or
anything contained elsewhere in this lease to the contrary notwithstanding.
Landlord makes no representation as to the location of the property line of the
building. All vaults and vault space and all such areas not within the property
line of the building, which Tenant may be permitted to use and/or occupy, is to
be used and/or occupied under a revocable license, and if any such license be
revoked, or if the amount of such space or area be diminished or required by any
federal, state or municipal authority or public utility, Landlord shall not be
subject to any liability nor shall Tenant be entitled to any compensation or
diminution or abatement of rent, nor shall such revocation, diminution or
requisition be deemed constructive or actual eviction. Any tax, fee or charge of
municipal authorities for such vault or area shall be paid by Tenant.

Occupancy:

          15. Tenant will not at any time use or occupy the demised premises in
violation of the certificate of occupancy issued for the building of which the
demised premises are a part. Tenant has inspected the premises and accepts them
as is, subject to the riders annexed hereto with respect to Landlord's work, if
any. In any event, Landlord makes no representation as to the condition of the
premises and Tenant agrees to accept the same subject to violations whether or
not of record.
                                                                 See Article #64


<PAGE>


Bankruptcy:

          16. (a) If at the date fixed as the commencement of the term of this
lease or if at any time during the term hereby demised there shall be filed by
or against Tenant in any court pursuant to any statute either of the United
States or of any state, a petition in bankruptcy or insolvency or for
reorganization or for the appointment of a receiver or trustee of all or a
portion of Tenant's property, and within 60 days thereof, Tenant fails to secure
a dismissal thereof, or if Tenant make an assignment for the benefit of
creditors or petition for or enter into an arrangement, this lease, at the
option of Landlord, exercised within a reasonable time after notice of the
happening of any one or more of such events, may be cancelled and terminated by
written notice to the Tenant (but if any of such events occur prior to the
commencement date, this lease shall be ipso facto cancelled and terminated) and
whether such cancellation and termination occur prior to or during the term,
neither Tenant nor any person claiming through or under Tenant by virtue of any
statute or of any order of any court, shall be entitled to possession or to
remain in possession of the premises demised but shall forthwith quit and
surrender the premises, and Landlord, in addition to the other rights and
remedies Landlord has by virtue of any other provision herein or elsewhere in
this lease contained or by virtue of any statute or rule of law, may retain as
liquidated damages, any rent, security deposit or moneys received by him from
Tenant or others in behalf of Tenant. If this lease shall be assigned in
accordance with its terms, the provisions of this Article 16 shall be applicable
only to the party then owning Tenant's interest in this lease.

          (b) It is stipulated and agreed that in the event of the termination
of this lease pursuant to (a) hereof, Landlord shall forthwith, notwithstanding
any other provisions of this lease to the contrary, be entitled to recover from
Tenant as and for liquidated damages an amount equal to the difference between
the rent reserved hereunder for the unexpired portion of the term demised and
the fair and reasonable rental value of the demised premises for the same
period. In the computation of such damages the difference between any instalment
of rent becoming due hereunder after the date of termination and the fair and
reasonable rental value of the demised premises for the period for which such
instalment was payable shall be discounted to the date of termination at the
rate of four per cent (4%) per annum. If such premises or any part thereof be
re-let by the Landlord for the unexpired term of said lease, or any part
thereof, before presentation of proof of such liquidated damages to any court,
commission or tribunal, the amount of rent reserved upon such re-letting shall
be deemed to be the fair and reasonable rental value for the part or the whole
of the premises so re-let during the term of the re-letting. Nothing herein
contained shall limit or prejudice the right of the Landlord to prove for and
obtain as liquidated damages by reason of such termination, an amount equal to
the maximum allowed by any statute or rule of law in effect at the time when,
and governing the proceedings in which, such damages are to be proved, whether
or not such amount be greater, equal to, or less than the amount of the
difference referred to above.

Default

          17. (1) If Tenant defaults in fulfilling any of the covenants of this
lease other than the covenants for the payment of rent or additional rent; or if
the demised premises become vacant or deserted; or if the demised premises are
damaged by reason of negligence or carelessness of Tenant, its agents, employees
or invitees; or if any execution or attachment shall be issued against Tenant or
any of Tenant's property whereupon the demised premises shall be taken or
occupied by someone


<PAGE>


other than Tenant; or if Tenant shall make default with respect to any other
lease between Landlord and Tenant; or if Tenant shall fail to move into or take
possession of the premises within fifteen (15) days after the commencement of
the term of this lease, of which fact Landlord shall be the sole judge; then, in
any one or more of such events, upon Landlord serving a written five (5) days
notice upon Tenant specifying the nature of said default and upon the expiration
of said five (5) days, if Tenant shall have failed to comply with or remedy such
default, or if the said default or omission complained of shall be of a nature
that the same cannot be completely cured or remedied within said five (5) day
period, and if Tenant shall not have diligently commenced curing such default
within such five (5) day period, and shall not thereafter with reasonable
diligence and in good faith proceed to remedy or cure such default, then
Landlord may serve a written three (3) days' notice of cancellation of this
lease upon Tenant, and upon the expiration of said three (3) days, this lease
and the term thereunder shall end and expire as fully and completely as if the
expiration of such three (3) day period were the day herein definitely fixed for
the end and expiration of this lease and the term thereof and Tenant shall then
quit and surrender the demised premises to Landlord but Tenant shall remain
liable as hereinafter provided.

          (2) If the notice provided for in (1) hereof shall have been given,
and the term shall expire as aforesaid: or if Tenant shall make default in the
payment of the rent reserved herein or any item of additional rent herein
mentioned or any part of either or in making any other payment herein required;
then and in any of such events Landlord may without notice, re-enter the demised
premises either by force or otherwise, and dispossess Tenant by summary
proceedings or otherwise, and the legal representative of Tenant or other
occupant of demised premises and remove their effects and hold the premises as
if this lease had not been made, and Tenant hereby waives the service of notice
of intention to re-enter or to institute legal proceedings to that end. If
Tenant shall make default hereunder prior to the date fixed as the commencement
of any renewal or extension of this lease, Landlord may cancel and terminate
such renewal or extension agreement by written notice.

Remedies of Landlord and Waiver of Redemption:

          18. In case of any such default, re-entry, expiration and/or
dispossess by summary proceedings or otherwise, (a) the rent shall become due
thereupon and be paid up to the time of such re-entry, dispossess and/or
expiration, together with such expenses as Landlord may incur for legal
expenses, attorneys' fees, brokerage, and/or putting the demised premises in
good order, or for preparing the same for re-rental; (b) Landlord may re-let the
premises or any part or parts thereof, either in the name of Landlord or
otherwise, for a term or terms, which may at Landlord's option be less than or
exceed the period which would otherwise have constituted the balance of the term
of this lease and may grant concessions or free rent or charge a higher rental
than that in this lease, and/or (c) Tenant or the legal representatives of
Tenant shall also pay Landlord as liquidated damages for the failure of Tenant
to observe and perform said Tenant's covenants herein contained, any deficiency
between the rent hereby reserved and/or covenanted to be paid and the net
amount, if any, of the rents collected on account of the lease or leases of the
demised premises for each month of the period which would otherwise have
constituted the balance of the term of this lease. The failure of Landlord to
re-let the premises or any part or parts thereof shall not release or affect
Tenant's liability for damages. In computing such liquidated damages there shall
be added to the said deficiency such expenses as Landlord may incur in
connection with re-letting, such as legal expenses, attorneys' fees, brokerage,
advertising and for keeping the demised premises in good order or for preparing
the same


<PAGE>


for re-letting. Any such liquidated damages shall be paid in monthly
installments by Tenant on the rent day specified in this lease and any suit
brought to collect the amount of the deficiency for any month shall not
prejudice in any way the rights of Landlord to collect the deficiency for any
subsequent month by a similar proceeding. Landlord, in putting the demised
premises in good order or preparing the same for re-rental may, at Landlord's
option, make such alterations, repairs, replacements, and/or decorations in the
demised premises as Landlord, in Landlord's sole judgment, considers advisable
and necessary for the purpose of re-letting the demised premises, and the making
of such alterations, repairs, replacements, and/or decorations shall not operate
or be construed to release Tenant from liability hereunder as aforesaid.
Landlord shall in no event be liable in any way whatsoever for failure to re-let
the demised premises, or in the event that the demised premises are re-let, for
failure to collect the rent thereof under such re-letting, and in no event shall
Tenant be entitled to receive any excess, if any, of such net rents collected
over the sums payable by Tenant to Landlord hereunder. In the event of a breach
or threatened breach by Tenant of any of the covenants or provisions hereof,
Landlord shall have the right of injunction and the right to invoke any remedy
allowed at law or in equity as if re-entry, summary proceedings and other
remedies were not herein provided for. Mention in this lease of any particular
remedy, shall not preclude Landlord from any other remedy, in law or in equity.
Tenant hereby expressly waives any and all rights of redemption granted by or
under any present or future laws in the event of Tenant being evicted or
dispossessed for any cause, or in the event of Landlord obtaining possession of
demised premises, by reason of the violation by Tenant of any of the covenants
and conditions of this lease, or otherwise.

Fees and Expenses

          19. If tenant shall default in the observance or performance of any
term or covenant on tenant's part to be observed or performed under or by virtue
of any of the terms or provisions in any article of this lease, then, unless
otherwise provided elsewhere in this lease, landlord may immediately or at any
time thereafter and without notice perform the obligation of tenant thereunder,
and if landlord, in connection therewith or in connection with any default by
tenant in the covenant to pay rent hereunder, makes any expenditures or incurs
any obligations for the payment of money, including but not limited to
attorney's fees, in instituting, prosecuting or defending any action or
proceeding, such sums so paid or obligations incurred with interest and costs
shall be deemed to be additional rent hereunder and shall be paid by tenant to
landlord within five (5) days of rendition of any bill or statement to tenant
therefor, and if tenant's lease term shall have expired at the time of making of
such expenditures or incurring of such obligations, such sums shall be
recoverable by landlord as damages.

No Representations by Landlord:

          20. Neither Landlord nor Landlord's agents have made any
representations or promises with respect to the physical condition of the
building, the land upon which it is erected or the demised premises, the rents,
leases, ex-


<PAGE>


penses of operation or any other matter or thing affecting or related to the
premises except as herein expressly set forth and no rights, easements or
licenses are acquired by Tenant by implication or otherwise except as expressly
set forth in the provisions of this lease. Tenant has inspected the building and
the demised premises and is thoroughly acquainted with their condition, and
agrees to take the same "as is" and acknowledges that the taking of possession
of the demised premises by Tenant shall be conclusive evidence that the said
premises and the building of which the same form a part were in good and
satisfactory condition at the time such possession was so taken, except as to
latent defects. All understandings and agreements heretofore made between the
parties hereto are merged in this contract, which alone fully and completely
expresses the agreement between Landlord and Tenant and any executory agreement
hereafter made shall be ineffective to change, modify, discharge or effect an
abandonment of it in whole or in part, unless such executory agreement is in
writing and signed by the party against whom enforcement of the change,
modification, discharge or abandonment is sought.

End of Term:

          21. Upon the expiration or other termination of the term of this
lease, Tenant shall quit and surrender to Landlord the demised premises, broom
clean, in good order and condition, ordinary wear excepted, and Tenant shall
remove all its property. Tenant's obligation to observe or perform this covenant
shall survive the expiration or other termination of this lease. If the last day
of the term of this lease or any renewal thereof, falls on Sunday, this lease
shall expire at noon on the preceding Saturday unless it be a legal holiday in
which case it shall expire at noon on the preceding business day.

Quiet Enjoyment:

          22. Landlord covenants and agrees with Tenant that upon Tenant paying
the rent and additional rent and observing and performing all the terms,
covenants and conditions, on Tenant's part to be observed and performed, Tenant
may peaceably and quietly enjoy the premises hereby demised, subject,
nevertheless, to the terms and conditions of this lease including, but not
limited to, Article 33 hereof and to the ground leases, underlying leases and
mortgages hereinbefore mentioned.

Failure to Give Possession:

          23. If Landlord is unable to give possession of the demised premises
on the date of the commencement of the term hereof, because of the holding-over
or retention of possession of any tenant, undertenant or occupants, or if the
premises are located in a building being constructed, because such building has
not been sufficiently completed to make the premises ready for occupancy or
because of the fact that a certificate of occupancy has not been procured or for
any other reason, Landlord shall not be subject to any liability for failure to
give possession on said date and the validity of the lease shall not be impaired
under such circumstances, nor shall the same be construed in any wise to extend
the term of this lease, but the rent payable hereunder shall be abated (provided
Tenant is not responsible for the inability to obtain possession) until after
Landlord shall have given Tenant written notice that the premises are
substantially ready for Tenant's occupancy. If permission is given to Tenant to
enter into the possession of the demised premises or to occupy premises other


<PAGE>



than the demised premises prior to the date specified as the commencement of the
term of this lease, Tenant covenants and agrees that such occupancy shall be
deemed to be under all the terms, covenants, conditions and provisions of this
lease, except as to the covenant to pay rent. The provisions of this article are
intended to constitute "an express provision to the contrary" within the meaning
of Section 223-a of the New York Real Property Law.

No Waiver:

          24. The failure of Landlord to seek redress for violation of, or to
insist upon the strict performance of any covenant or condition of this lease or
of any of the Rules or Regulations set forth or hereafter adopted by Landlord,
shall not prevent a subsequent act which would have originally constituted a
violation from having all the force and effect of an original violation. The
receipt by Landlord of rent with knowledge of the breach of any covenant of this
lease shall not be deemed a waiver of such breach and no provision of this lease
shall be deemed to have been waived by Landlord unless such waiver be in writing
signed by Landlord. No payment by Tenant or receipt by Landlord of a lesser
amount than the monthly rent herein stipulated shall be deemed to be other than
on account of the earliest stipulated rent, nor shall any endorsement or
statement of any check or any letter accompanying any check or payment as rent
be deemed an accord and satisfaction, and Landlord may accept such check or
payment without prejudice to Landlord's right to recover the balance of such
rent or pursue any other remedy in this lease provided. No act or thing done by
Landlord or Landlord's agents during the term hereby demised shall be deemed an
acceptance of a surrender of said premises and no agreement to accept such
surrender shall be valid unless in writing signed by Landlord. No employee of
Landlord or Landlord's agent shall have any power to accept the keys of said
premises prior to the termination of the lease and the delivery of keys to any
such agent or employee shall not operate as a termination of the lease or a
surrender of the premises.

Waiver of Trial by Jury:

          25. It is mutually agreed by and between Landlord and Tenant that the
respective parties hereto shall and they hereby do waive trial by jury in any
action, proceeding or counterclaim brought by either of the parties hereto
against the other (except for personal injury or property damage) on any matters
whatsoever arising out of or in any way connected with this lease, the
relationship of Landlord and Tenant, Tenant's use of or occupancy of said
premises, and any emergency statutory or any other statutory remedy. It is
further mutually agreed that in the event Landlord commences any summary
proceeding for possession of the premises. Tenant will not interpose any
counterclaim of whatever nature or description in any such proceeding.

Inability to Perform:

          26. This lease and the obligation of Tenant to pay rent hereunder and
perform all of the other covenants and agreements hereunder on part of Tenant to
be performed shall in no wise be affected, impaired or excused because Landlord
is unable to fulfill any of its obligations under this lease or to supply or is
delayed in supplying any service expressly or impliedly to be supplied or is
unable to make, or is delayed in making any repair, additions, alterations or
decorations or is unable to supply or is delayed in supplying any equipment or
fixtures if Landlord is prevented or delayed from so doing by reason of strike
or labor troubles or any cause whatsoever including, but not limited to,


<PAGE>



government preemption in connection with a National Emergency or by reason of
any rule, order or regulation of any department or subdivision thereof of any
government agency or by reason of the conditions of supply and demand which have
been or are affected by war or other emergency.

Bills and Notices:

          27. Except as otherwise in this lease provided, a bill, statement,
notice or communication which Landlord may desire or be required to give to
Tenant, shall be deemed sufficiently given or rendered if, in writing, delivered
to Tenant personally or sent by registered or certified mail addressed to Tenant
at the building of which the demised premises form a part or at the last known
residence address or business address of Tenant or left at any of the aforesaid
premises addressed to Tenant, and the time of the rendition of such bill or
statement and of the giving of such notice or communication shall be deemed to
be the time when the same is delivered to Tenant, mailed, or left at the
premises as herein provided. Any notice by Tenant to Landlord must be served by
registered or certified mail addressed to Landlord at the address first
hereinabove given or at such other address as Landlord shall designate by
written notice.

Water Charges:

          28. If Tenant requires, uses or consumes water for any purpose in
addition to ordinary lavatory purposes (of which fact Tenant constitutes
Landlord to be the sole judge) Landlord may install a water meter and thereby
measure Tenant's water consumption for all purposes. Tenant shall pay Landlord
for the cost of the meter and the cost of the installation thereof and
throughout the duration of Tenant's occupancy Tenant shall keep said meter and
installation equipment in good working order and repair at Tenant's own cost and
expense in default of which Landlord may cause such meter and equipment to be
replaced or repaired and collect the cost thereof from Tenant. Tenant agrees to
pay for water consumed, as shown on said meter as and when bills are rendered,
and on default in making such payment Landlord may pay such charges and collect
the same from Tenant. Tenant covenants and agrees to pay the sewer rent, charge
or any other tax, rent, levy or charge which now or hereafter is assessed,
imposed or a lien upon the demised premises or the realty of which they are part
pursuant to law, order or regulation made or issued in connection with the use,
consumption, maintenance or supply of water, water system or sewage or sewage
connection or system. The bill rendered by Landlord shall be payable by Tenant
as additional rent. - Independently of and in addition to any of the remedies
reserved to Landlord hereinabove or elsewhere in this lease, Landlord may sue
for and collect any monies to be paid by Tenant or paid by Landlord for any of
the reasons or purposes hereinabove set forth.

Sprinklers:

          29. Anything elsewhere in this lease to the contrary notwithstanding,
if the New York Board of Fire Underwriters or the New York Fire Insurance
Exchange or any bureau, department or official of the federal, state or city
government require or recommend the installation of a sprinkler system or that
any changes, modifications, alterations, or additional sprinkler heads or other
equipment be


<PAGE>


made or supplied in an existing sprinkler system by reason of Tenant's business,
or the location of partitions, trade fixtures, or other contents of the demised
premises, or for any other reason, or if any such sprinkler system
installations, changes, modifications, alterations, additional sprinkler heads
or other such equipment, become necessary to prevent the imposition of a penalty
or charge against the full allowance for a sprinkler system in the fire
insurance rate set by any said Exchange or by any fire insurance company, Tenant
shall, at Tenant's expense, promptly make such sprinkler system installations,
changes, modifications, alterations, and supply additional sprinkler heads or
other equipment as required whether the work involved shall be structural or
non-structural in nature.

          Tenant shall pay to Landlord as additional rent the sum of $85.-, on
the first day of each month during the term of this lease, as Tenant's portion
of the contract price for sprinkler supervisory service.

Elevators, Heat, Cleaning

          30. As long as Tenant is not in default under any of the covenants of
this lease Landlord shall: (a) provide necessary elevator facilities on business
days from 7 a.m. to 10 p.m. and on Saturdays from 8 a.m. to 6 p.m. (b) furnish
heat to the demised premises, when and as required by law, on business days from
7 a.m. to 10 p.m. and on Saturdays from 8 a.m. to 6 p.m. .; (c) at Landlord's
expense cause to be kept clean the public halls and public portions of the
building, which are used in common by all tenants. Tenant shall at Tenant's
expense, keep the demised premises clean and in order, to the satisfaction of
Landlord, and for that purpose shall employ the person or persons, or
corporation approved by Landlord. Tenant shall pay to Landlord the cost of
removal of any of Tenant's refuse and rubbish from the building. Bills for the
same shall be rendered by Landlord to Tenant at such time as Landlord may elect
and shall be due and payable when rendered, and the amount of such bills shall
be deemed to be, and be paid as, additional rent. Tenant shall, however, have
the option of independently contracting for the removal of such rubbish and
refuse in the event that Tenant does not wish to have same done by employees of
Landlord. Under such circumstances, however, the removal of such refuse and
rubbish by others shall be subject to such rules and regulations as, in the
judgment of Landlord, are necessary for the proper operation of the building.
Landlord reserves the right to stop service of the heating, elevator, plumbing
and electric systems, when necessary, by reason of accident, or emergency, or
for repairs, alterations, replacements or improvements, in the judgment of
Landlord desirable or necessary to be made, until said repairs, alterations,
replacements or improvements shall

----------


<PAGE>

have been completed. And Landlord shall have no responsibility or liability for
failure to supply heat, elevator, plumbing and electric service, during said
period or when prevented from so doing by strikes, accidents or by any cause
beyond Landlord's control, or by laws, orders or regulations of any Federal,
State or Municipal Authority, or failure of coal, oil or other suitable fuel
supply, or inability by exercise of reasonable diligence to obtain coal, oil or
other suitable fuel. If the building of which the demised premises are a part
supplies manually operated elevator service, Landlord may proceed with
alterations necessary to substitute automatic control elevator service upon ten
(10) day written notice to Tenant without in any way affecting the obligations
of Tenant hereunder, provided that the same shall be done with the minimum
amount of inconvenience to Tenant, and Landlord pursues with due diligence the
completion of the alterations.

Security

          31. Tenant has deposited with Landlord the sum of $ 22,436.67 as
security for the faithful performance and observance by Tenant of the terms,
provisions and conditions of this lease; it is agreed that in the event Tenant
defaults in respect of any of the terms, provisions and conditions of this
lease, including, but not limited to, the payment of rent and additional rent,
Landlord may use, apply or retain the whole or any part of the security so
deposited to the extent required for the payment of any rent and additional rent
or any other sum as to which Tenant is in default or for any sum which Landlord
may expend or may be required to expend by reason of Tenant's default in respect
of any of the terms, covenants and conditions of this lease, including but not
limited to, any damages or deficiency in the re-letting of the premises, whether
such damages or deficiency accrued before or after summary proceedings or other
re-entry by Landlord. In the event that Tenant shall fully and faithfully comply
with all of the terms, provisions, covenants and conditions of this lease, the
security shall be returned to Tenant after the date fixed as the end of the
Lease and after delivery of entire possession of the demised premises to
Landlord. In the event of a sale of the land and building or leasing of the
building, of which the demised premises form a part, Landlord shall have the
right to transfer the security to the vendee or lessee and Landlord shall
thereupon be released by Tenant from all liability for the return of such
security; and Tenant agrees to look to the new Landlord solely for the return of
said security; and it is agreed that the provisions hereof shall apply to every
transfer or assignment made of the security to a new Landlord. Tenant further
covenants that it will not assign or encumber or attempt to assign or encumber
the monies deposited herein as security and that neither Landlord nor its
successors or assigns shall be bound by any such assignment, encumbrance,
attempted assignment or attempted encumbrance.
See Article #55.

Captions:

          32. The Captions are inserted only as a matter of convenience and for
reference and in no way define, limit or describe the scope of this lease nor
the intent of any provision thereof.

Definitions:

          33. The term "Landlord" as used in this lease means only the owner, or
the mortgagee in possession, for the time being of the land and building (or the
owner of a lease of the building or of the land and building) of which the
demised premises form a part, so that in the event of any sale or


<PAGE>


sales of said land and building or of said lease, or in the event of a lease of
said building, or of the land and building, the said Landlord shall be and
hereby is entirely freed and relieved of all covenants and obligations of
Landlord hereunder, and it shall be deemed an construed without further agree-
parties and the purchaser, at any such sale, or the said lessee of the building,
or of the land and building, that the purchaser or the lessee of the building,
or of the land and building, that the purchaser or the lessee of the building
has assumed and agreed to carry out any and all covenants and obligations of
Landlord hereunder. The words "re-enter" and "re-entry" as used in this lease
are not restricted to their technical legal meaning. The term "business days" as
used in this lease shall exclude Saturdays (except such portion thereof as is
covered by specific hours in Article 30 hereof), Sundays and all days observed
by the State or Federal Government as legal holidays and those designated as
holidays by the applicable building service union employees service contract or
by the applicable Operating Engineers contract with respect to HVAC service.

Adjacent Excavation--Shoring:

          34. If an excavation shall be made upon land adjacent to the demised
premises, or shall be authorized to be made, Tenant shall afford to the person
causing or authorized to cause such excavation, license to enter upon the
demised premises for the purpose of doing such work as said person shall deem
necessary to preserve the wall or the building of which demised premises form a
part from injury or damage and to support the same by proper foundations without
any claim for damages or indemnity against Landlord, or diminution or abatement
of rent.

Rules and Regulations:

          35. Tenant and Tenant's servants, employees, agents, visitors, and
licensees shall observe faithfully, and comply strictly with, the Rules and
Regulations and such other and further reasonable Rules and Regulations as
Landlord or Landlord's agents may from time to time adopt. Notice of any
additional rules or regulations shall be given in such manner as Landlord may
elect. In case Tenant disputes the reasonableness of any additional Rule or
Regulation hereafter made or adopted by Landlord or Landlord's agents, the
parties hereto agree to submit the question of the reasonableness of such Rule
or Regulation for decision to the New York office of the American Arbitration
Association, whose determination shall be final and conclusive upon the parties
hereto. The right to dispute the reasonableness of any additional Rule or
Regulation upon Tenant's part shall be deemed waived unless the same shall be
asserted by service of a notice, in writing upon Landlord within ten (10) days
after the giving of notice thereof. Nothing in this lease contained shall be
construed to impose upon Landlord any duty or obligation to enforce the Rules
and Regulations or terms, covenants or conditions in any other lease, as against
any other tenant and Landlord shall not be liable to Tenant for violation of the
same by any other tenant, its servants, employees, agents, visitors or
licensees.

Glass:

          36. Landlord shall replace, at the expense of Tenant, any and all
plate and other glass damaged or broken from any cause whatsoever in and about
the demised premises.

<PAGE>


                                                                    See Addendum

Successors and Assigns:

          37: The covenants, conditions and agreements contained in this lease
shall bind and inure to the benefit of Landlord and Tenant and their respective
heirs, distributees, executors, administrators, successors, and except as
otherwise provided in this lease, their assigns.

                   Riders containing Articles #38 through #65 inclusive, annexed
                   hereto and forming part of this lease.

IN WITNESS WHEREOF, Landlord and Tenant have respectively signed and sealed this
lease as of the day and year first above written.


                                        42-52 WEST 39 STREET LLC
Witness for Landlord:                   BY: ADAMS & CO. REAL ESTATE, INC. Agent

          Mary M. Sally                 BY:                              [L. S.]
          -------------------------        -----------------------------
                                           Executive Director of Leasing

Witness for Tenant:                     BLUEFLY, INC.                    [L. S.]
                                        --------------------------------

                                        BY: E. Kenneth Seiff, CEO
          -------------------------     ---------------------------------------

                                        I.D. # 13-3612110
                                              ---------------------------------



<PAGE>

                             42-52 WEST 39TH STREET

                                ENTIRE 11TH FLOOR

42-52 WEST 39 STREET LLC

                                       TO

BLUEFLY, INC.

                                STANDARD FORM OF
                                      Loft
                                      Lease
                     The Real Estate Board of New York, Inc.
                     (C)Copyright 1973. All Rights Reserved.
                  Reproduction in whole or in part prohibited.

Dated                               March 22,                            1999

Rent per Year                       $133,600.

Rent per Month                      $11,133.33

Term                                10 years
From                                6/1/99
To                                  5/31/09

Drawn by            mc              Checked by
        ----------------------------          ----------------------------------
Entered by                                Approved by
          --------------------------------           ---------------------------

                                      ADAMS
                                      & CO.
                                   REAL ESTATE
                                      INC.

                                411 FIFTH AVENUE
                              NEW YORK, N.Y. 10016
                                 (212) 679-5500

                                 ACKNOWLEDGMENTS

CORPORATE LANDLORD
STATE OF NEW YORK,}
COUNTY OF         } SS.S


          On this      day of             , 19    , before me
personally came                                                               ,

to me known, who being by me duly sworn, did depose and say that he resides

in                                                                            ;

that he is the                                           of

the corporation described in and which executed the foregoing instrument, as
LANDLORD; that he knows the seal of said corporation; that the seal affixed to
said instrument is such corporate seal; that it was so affixed by order of the
Board of Directors of said corporation, and that he signed his name thereto by
like order.



                                            -----------------------------------

<PAGE>


CORPORATE TENANT
STATE OF NEW YORK,}
COUNTY OF                           } SS.S

          On this      day of             , 19    , before me
personally came                                                               ,

to me known, who being by me duly sworn, did depose and say that he resides

in                                                                            ;

that he is the                                           of

the corporation described in and which executed the foregoing instrument, as
TENANT; that he knows the seal of said corporation; that the seal affixed to
said instrument is such corporate seal; that it was so affixed by order of the
Board of Directors of said corporation, and that he signed his name thereto by
like order.


                                   -------------------------------------------

INDIVIDUAL LANDLORD
STATE OF NEW YORK,}
COUNTY OF         } SS.S

          On this      day of             , 19    , before me
personally came                                                               ,

to me known and known to me to be the individual described in and who, as
LANDLORD, executed the foregoing instrument and acknowledged to me that he
executed the same.


                                   -------------------------------------------

INDIVIDUAL TENANT
STATE OF NEW YORK,}
COUNTY OF         } SS.S

          On this      day of             , 19    , before me
personally came                                                               ,

to me known and known to me to be the individual described in and who, as
TENANT, executed the foregoing instrument and acknowledged to me that he
executed the same.


                                   -------------------------------------------

                         -> IMPORTANT -- PLEASE READ <-

       RULES AND REGULATIONS ATTACHED TO AND MADE A PART OF THIS LEASE IN
                           ACCORDANCE WITH ARTICLE 35.

          1. The sidewalks, entrances, driveways, passages, courts, elevators,
vestibules, stairways, corridors or halls shall not be obstructed or encumbered
by any Tenant or used for any purpose other than for ingress to and egress from
the demised premises and for delivery of merchandise and equipment in a prompt
and efficient manner using elevators and passageways designated for such
delivery by Landlord. There shall not be used in any space, or in the public
hall of the building, either by any Tenant or by jobbers or others in the
delivery or receipt of merchandise, any hand trucks, except those equipped with
rubber tires and sideguards. If said premises are situate on the ground floor of
the building Tenant thereof shall further, at Tenant's expense, keep the
sidewalks and curb in front of said premises clean and free from ice, snow, dirt
and rubbish.

          2. The water and wash closets and plumbing fixtures shall not be used
for any purposes other than those for which they were designed or constructed
and no sweepings, rubbish, rags, acids or other substances shall be deposited
therein, and the expense of any breakage, stoppage, or damage resulting from the
violation of this rule shall be borne by the tenant who, or whose clerks,
agents, employees or visitors, shall have caused it.

          3. No carpet, rug or other article shall be hung or shaken out of any
window of the building; and no Tenant shall sweep or throw or permit to be swept
or thrown from the demised premises any dirt or other substances into any of the
corridors or halls, elevators, or out of the doors or windows or stairways of
the building, and Tenant shall not use, keep or permit to be used or kept any
foul or noxious gas or substance in the demised premises, or permit or suffer
the demised premises to be occupied or used in a manner offensive or
objectionable to Landlord or other occupants of the building by reason of noise,
odors and/or vibrations, or interfere in any way, with other Tenants or those
having business therein, nor shall any animals or birds be kept in or about the
building.


<PAGE>


Smoking or carrying lighted cigars or cigarettes in the elevators of the
building is prohibited.

          4. No awnings or other projections shall be attached to the outside
walls of the building without the prior written consent of Landlord.

          5. No sign, advertisement, notice or other lettering shall be
exhibited, inscribed, painted or affixed by any Tenant on any part of the
outside of the demised premises or the building or on the inside of the demised
premises if the same is visible from the outside of the premises without the
prior written consent of Landlord, except that the name of Tenant may appear on
the entrance door of the premises. In the event of the violation of the
foregoing by any Tenant, Landlord may remove same without any liability, and may
charge the expense incurred by such removal to Tenant or Tenants violating this
rule. Interior signs on doors and directory tablet shall be inscribed, painted
or affixed for each Tenant by Landlord at the expense of such Tenant, an shall
be of a size, color and style acceptable to Landlord.

          6. No Tenant shall mark, paint, drill into, or in any way deface any
part of the demised premises or the building of which they form a part. No
boring, cutting or stringing of wires shall be permitted, except with the prior
written consent of Landlord, and as Landlord may direct. No Tenant shall lay
linoleum, or other similar floor covering, so that the same shall come in direct
contact with the floor of the demised premises, and, if linoleum or other
similar floor covering is desired to be used an interlining of builder's
deadening felt shall be first affixed to the floor, by a paste or other
material, soluble in water, the use of cement or other similar adhesive material
being expressly prohibited.

          7. No additional locks or bolts of any kind shall be placed upon any
of the doors or windows by any Tenant, nor shall any changes be made in existing
locks or mechanism thereof. Each Tenant must, upon the termination of his
Tenancy, restore to Landlord all keys of stores, offices and toilet rooms,
either furnished to, or otherwise procured by, such Tenant, and in the event of
the loss of any keys, so furnished, such Tenant shall pay to Landlord the cost
thereof.

          8. Freight, furniture, business equipment, merchandise and bulky
matter of any description shall be delivered to and removed from the premises
only on the freight elevators and through the service entrances and corridors,
and only during hours and in a manner approved by Landlord. Landlord reserves
the right to inspect all freight to be brought into the building and to exclude
from the building all freight which violates any of these Rules and Regulations
or the lease of which these Rules and Regulations are a part.

          9. No Tenant shall obtain for use upon the demised premises ice,
drinking water, towel and other similar services, or accept barbering or
bootblacking services in the demised premises, except from persons authorized by
Landlord, and at hours and under regulations fixed by Landlord. Canvassing,
soliciting and peddling in the building is prohibited and each Tenant shall
co-operate to prevent the same.

          10. Landlord reserves the right to exclude from the building between
the hours of 6 P.M. and 8 A.M. and at all hours on Sundays, and legal holidays
all persons who do not present a pass to the building signed by Landlord.
Landlord will furnish passes to persons for whom any Tenant requests


<PAGE>


same in writing. Each Tenant shall be responsible for all persons for whom he
requests such pass and shall be liable to Landlord for all acts of such persons.

          11. Landlord shall have the right to prohibit any advertising by any
Tenant which, in Landlord's opinion, tends to impair the reputation of the
building or its desirability as a building for offices, and upon written notice
from Landlord, Tenant shall refrain from or discontinue such advertising.

          12. Tenant shall not bring or permit to be brought or kept in or on
the demised premises, any inflammable, combustible or explosive fluid, material,
chemical or substance, or cause or permit any odors of cooking or other
processes, or any unusual or other objectionable odors to permeate in or emanate
from the demised premises.


<PAGE>


RIDER AGREEMENT:

To be attached to and form a part of:

LEASE dated MARCH 22, 1999, Premises ENTIRE 11TH FLOOR - 42-52 WEST 39TH STREET

Between       42-52 WEST 39 STREET LLC                              as Landlord

and              BLUEFLY, INC.                                        as Tenant


                                   ELECTRICITY

          (a) Tenant may make its own arrangements with the public utility
company servicing the demised premises for the payment of all charges for
electricity consumed at the demised premises by Tenant. In no event shall
Landlord be responsible for charges for electricity consumed at the demised
premises by Tenant. Notwithstanding the foregoing, if electric current be
supplied by Landlord, which Landlord reserves the right to do at its sole
option, Tenant covenants and agrees to purchase the same from Landlord or
Landlord's designated agent at terms and rates set by Landlord in subparagraph
(b) below. Where more than one meter measures the service of Tenant in the
building, the service rendered through each meter may be computed and billed
separately in accordance with the rates herein. Bills therefor shall be rendered
at such times as Landlord may elect in the amount computed from a meter. In the
event that such bills are not paid within fifteen (15) days after the same are
rendered, Landlord may, without further notice, discontinue the service of
electric current to the demised premises without releasing Tenant from any
liability under this lease and without Landlord or Landlord's agent incurring
any liability for any damage or loss sustained by Tenant by such discontinuance
of service. Landlord shall not in any wise be liable or responsible for any loss
or damage or expense which Tenant may sustain or incur if either the quantity or
character of electric service is changed or is no longer available or suitable
for Tenant's electrical requirements. Any riser or risers to supply Tenant's
electrical requirements, upon written request of Tenant, will be installed by
Landlord, at the sole cost and expense of Tenant, if, in Landlord's sole
judgment, the same are necessary and will not cause permanent damage or injury
to the building or demised premises or cause or create a dangerous or hazardous
condition or entail excessive or unreasonable alterations, repairs or expense or
interfere with or disturb other tenants or occupants of the building. In
addition to the installation of such riser or risers, Landlord will also at the
sole cost and expense of Tenant, install all other equipment proper and
necessary in connection therewith subject to the aforesaid terms and conditions.
Tenant covenants and agrees that at all times its use of electric current shall
never exceed the capacity of existing feeders to the building or the risers or
wiring installations. Landlord may discontinue any of the aforesaid services
upon thirty (30) days notice to Tenant without being liable to Tenant therefor
or without in any way affecting this lease or the liability of Tenant hereunder
or causing a diminution of rent and the same shall not be deemed to be lessening
or diminution of services within the meaning of any law, rule or regulation now
or hereafter enacted, promulgated or issued. In the event Landlord gives such
notice of discontinuance Landlord shall permit Tenant to receive such service
direct from a public utility company. Tenant shall make no alteration or
addition to the electric equipment and/or appliances without prior written
consent of Landlord in each instance. If any tax is imposed upon Landlord's
receipt from the sale or resale of electrical energy or gas or telephone service
to Tenant by any Federal, State or Municipal


<PAGE>


Authority, Tenant covenants and agrees that, where permitted by law, Tenant's
prorata share of such taxes shall be passed on to, and included in the bill and
paid by Tenant to Landlord.

          (b) The Tenant shall purchase electricity from the Landlord or
Landlord's Agent at a charge which shall be computed by adding 10% to the total
of (1) the meter readings for energy use, the demand, and fuel adjustments under
Consolidated Edison Service Classification 4 or like or similar rate by any
other utility company servicing the building, and (2) all taxes imposed on each
of such components plus sales tax. All charges incurred by the Tenant under this
Article shall be additional rent and collectible by the Landlord as such.

                                                                        INITIALS


<PAGE>


RIDER AGREEMENT:

To be attached to and form a part of:

LEASE dated MARCH 22, 1999, Premises ENTIRE 11TH FLOOR - 42-52 WEST 39TH STREET

Between       42-52 WEST 39 STREET LLC                              as Landlord

and              BLUEFLY, INC.                                        as Tenant

38. It is specifically understood and agreed that this lease is offered to the
Tenant for signature by the Managing Agent of the building solely in its
capacity as such Agent and subject to the Landlord's acceptance and approval,
and that the Tenant has hereunto affixed its signature with the understanding
that the said lease shall not in any way bind the Landlord or its Agent until
such time as the Landlord has approved said lease and same is executed and
delivered to the Tenant.

39. The Tenant will indemnify and save harmless the Landlord from and against
any and all liability, penalties, losses, damages, expenses, suits and judgments
arising from injury during the term of this lease to person or property of any
nature, in the building of which the demised premises form a part from any
matter or thing growing out of the use or occupation of the demised premises and
the Tenant agrees throughout the term of this lease to keep the Landlord insured
against General Public Liability in limits of $1,000,000. per person,
$3,000,000. per incident and against Property Damage in the amount of $500,000.
Such policies of insurance or certificates thereof shall be obtained by the
Tenant and delivered to the Landlord showing the payment of the premium thereon.
On the failure of the Tenant to obtain and pay for such insurance, the Landlord
may, but shall not be obligated to, procure the same and pay the premiums
thereon, and the cost thereof shall be added to the monthly rent next due and
shall be collectible as additional rent.

40. Prior to installing new or additional air conditioning unit or units in the
premises, the Tenant shall first obtain the written consent of the Landlord or
its Managing Agent. Tenant shall pay for all electrical current consumed in the
operation thereof. In the event such unit or units utilize circulating water, it
shall be equipped with an approved water conserving device and in connection
therewith, Tenant shall install and maintain in good working order, at its own
cost and expense, a water meter which shall meter all make-up water used in such
air conditioning equipment and shall pay for such water as per meter reading and
in addition thereto, sewerage or any other charge, tax or levy which now or
hereafter is imposed by the City of New York in connection with said use of
water. Any charge for electricity or water consumed as herein provided, shall be
deemed to be additional rent and payable as such.

41. If the Landlord or any successor in interest be an individual, joint
venture, tenancy in common, co-partnership, unincorporated association, or other
unincorporated aggregate of individuals (all of which are referred to below,
individually and collectively, as an "unincorporated Landlord"), then, anything
elsewhere to the contrary notwithstanding, Tenant shall look solely to the
estate and property of such unincorporated Landlord in the land and building of
which the leased premises are a part, for the satisfaction of Tenant's remedies
for the collection of a judgment (or other judicial process) requiring the
payment of money by Landlord in the event of any default or


<PAGE>


breach by Landlord with respect to any of the terms, covenants and conditions of
the lease to be observed and/or performed by Landlord, and no other property or
assets of such unincorporated Landlord shall be subject to levy, execution or
other enforcement procedure for the satisfaction of Tenant's remedies.

42. The provisions of Article #19 of this lease shall apply to any action or
special proceeding the Landlord may institute should the Tenant fail to vacate
the premises at the expiration of the term of this lease.

                                                                        INITIALS


<PAGE>


RIDER AGREEMENT:

To be attached to and form a part of:

LEASE dated MARCH 22, 1999, Premises ENTIRE 11TH FLOOR - 42-52 WEST 39TH STREET

Between       42-52 WEST 39 STREET LLC                              as Landlord

and              BLUEFLY, INC.                                        as Tenant

43. (a) For the purpose of this Article, the term "lease year" shall mean the
period of twelve (12) months commencing with the term commencement date and
ending on the following MAY 31ST and each successive period of twelve (12)
months thereafter during the term. The term "base year" as applied to real
estate taxes, shall mean the City tax year July 1, 1999 to June 30, 2000.

          (b) In the event that the real estate taxes payable with respect to
the building and the land on which it is located, during any lease year shall be
greater than the amount of such taxes due and payable during the base year,
whether by reason of an increase in either the tax rate or the assessed
valuation or by reason of the levy, assessment or imposition of any tax on real
estate as such, not now levied, assessed or imposed, or for any other reason,
Tenant shall pay to Landlord, as additional rent for the lease year in which
such increase occurs, an amount equal to 6% of the difference between the amount
of such tax or installment and the corresponding tax or installment paid during
the base year. Such additional rent shall be paid in twelve (12) equal monthly
installments beginning on the first day of the month next succeeding receipt by
the Tenant of a bill therefor. The amount of such taxes actually paid by
Landlord during the base year shall determine the amount of additional rent
payable under this paragraph (b) until, as the result of a final determination
in legal proceedings or otherwise, the amount of such taxes shall be reduced. In
the event of such final determination, the reduced amount of such taxes shall
thereafter be the base tax upon which shall be determined the amount of
additional rent payable by Tenant pursuant to this paragraph (b), the additional
rent theretofore payable hereunder shall be recomputed on the basis of such
reduction, unless the taxes for any subsequent year exceeds the original tax
prior to reduction, in which event the base tax shall be the original tax and
Tenant shall pay to the Landlord such additional rent in twelve (12) equal
monthly installments after being billed therefor, any deficiency between the
amount of such additional rent as theretofore computed and the amount thereof
due as the result of such recomputation. The bill for additional rent under this
paragraph (b) shall be accompanied by copies of the tax bills referred to
herein. If Landlord shall be the lessee under an underlying lease, the term
"real estate taxes" as used in this paragraph (b) shall be deemed to mean and
include the amounts payable as additional rental under said underlying lease
based on the taxes payable with respect to said building and land.

          (c) If the amount of additional rent payable by Tenant pursuant to the
foregoing paragraph (b) shall be affected by any application filed by or on
behalf of Landlord for a reduction in the assessed valuation of the said
building and land or by any proceedings instituted by or on behalf of Landlord
in a court of competent jurisdiction for judicial review of said assessed
valuation, and if, after Tenant shall have made a payment of additional rent
under said paragraph (b) Landlord shall receive a refund of any portion of the
real estate taxes on which such payment shall have been based


<PAGE>



as the result of any such application or proceeding, Landlord shall pay to
Tenant 6% of the refund less any amount owing by Tenant for expenses in
connection therewith as provided in the preceding sentence. Nothing in this
paragraph (c) contained shall be deemed or construed to require Landlord to pay
to Tenant any portion of a refund of taxes paid by Landlord during the base
year.

                                                                       INITIALS


<PAGE>


RIDER AGREEMENT:

To be attached to and form a part of:

LEASE dated MARCH 22, 1999, Premises ENTIRE 11TH FLOOR - 42-52 WEST 39TH STREET

Between       42-52 WEST 39 STREET LLC                              as Landlord

and              BLUEFLY, INC.                                        as Tenant

44. For the purpose of this Article, the following definitions shall apply:

    The term "Base Year" shall mean the twelve full calendar months of 1999.

          The term "Price Index" shall mean the "Revised Consumer Price Index
for Urban Wage Earners and Clerical Workers" as published by the Bureau of Labor
Statistics of the U.S. Department of Labor of New York, N.Y. - Northeastern,
N.J.

          The term "Average Price Index" shall mean the average of the twelve
monthly Price Indices for any yearly period used in this Article's calculations.

          (a) Adjustment. On each anniversary date of the term of this lease,
there shall be an adjustment of the base rent. Each such adjustment shall be
based on the percentage difference between the Average Price Index for the
preceding twelve month period and the Base Year.

          (b) Calculation of Adjustment. In the event the Average Price Index
for the twelve month period preceding each anniversary reflects an increase over
the Base Year Average Price Index, the base annual rental for such twelve-month
period reserved in this lease shall be multiplied by the percentage difference
between the Average Price Index for such preceding twelve-month period and the
Average Price Index for the Base Year. The resulting amount shall be deemed
additional rent for such preceding twelve-month period and shall be paid by
Tenant to Landlord within fifteen days after submission by Landlord of a
statement showing the amount due for the period covered by such statement.

          (c) If the compilation of such Price Index shall be revised or
discontinued, there shall be substituted therefor a revised index modified by
such adjustments as shall be required to produce substantially equivalent
results.

          In no event shall the adjusted annual rental of this lease be at any
time less than the base rent as adjusted for the previous year.

          Nothing in this Article shall affect the Tenant's obligation for the
payment of additional rent for its share of increases in real estate taxes
payable by the Tenant in accordance with Article #43 of this lease.

          Notwithstanding anything herein contained, any increase in rent
pursuant to this Article shall not exceed 4% of the previous year's base rent as
adjusted.

                                                                        INITIALS


<PAGE>



RIDER AGREEMENT:

To be attached to and form a part of:

LEASE dated MARCH 22, 1999, Premises ENTIRE 11TH FLOOR - 42-52 WEST 39TH STREET

Between       42-52 WEST 39 STREET LLC                              as Landlord

and              BLUEFLY, INC.                                        as Tenant

45. If Tenant holds over in possession after the expiration or sooner
termination of the original term or of any extended term of this lease, such
holding over shall not be deemed to extend the term or renew the lease, but such
holding over thereafter shall continue upon the covenants and conditions herein
set forth except that the charge for use and occupancy of such holding over for
each calendar month or part thereof (even if such part shall be a small fraction
of a calendar month) shall be the sum of:

          (a)      1/12 of the highest base annual rental rate set forth on page
                   one of this lease times 1.5, plus

          (b)      1/12 of all other items of annual additional rental, which
                   annual additional rental would have been payable pursuant to
                   this lease had this lease not expired, plus

          (c)      those other items of additional rent (not annual additional
                   rent) which would have been payable monthly pursuant to this
                   lease, had this lease not expired,

which total sum Tenant agrees to pay to Landlord promptly upon demand, in full,
without set-off or deduction. Neither the billing nor the collection of use and
occupancy in the above amount shall be deemed a waiver of any right of Landlord
to collect damages for Tenant's failure to vacate the demised premises after the
expiration or sooner termination of this lease.

          The aforesaid provisions of this Article shall survive the expiration
or sooner termination of this lease.

46. Tenant's obligation to pay additional rent under this lease for the final
lease year shall survive the expiration of the term of this lease, and any
additional rent due for any partial lease year shall be prorated.

47. If Tenant is late in making any payment due to Landlord from Tenant under
this lease for ten (10) or more days, Tenant shall pay Landlord a late charge of
$.05 for each $1.00 which remains unpaid after such period to compensate
Landlord for additional expense in processing such late payment. In addition, if
Tenant is late in making any payment due to Landlord under this lease for ten
(10) or more days, then interest shall become due and owing on such payment and
shall be paid by Tenant to Landlord from the date when it was due until the date
payment is made, computed at


<PAGE>



a rate equal to the lesser of eighteen (18%) per cent per annum or the highest
rate permitted by law.

48. All charges which are the obligation of the Tenant shall be additional rent
and collectible as such.

49. The Landlord agrees to accept checks in payment of any obligations of the
Tenant under this lease provided, however, they are drawn on a bank, which has
an office or branch in the City of New York. In the event any check tendered in
payment of rent or additional rent is dishonored for any reason whatsoever, its
substitute shall be a certified or bank check and all future checks tendered to
the Landlord shall be certified or bank checks.

                                                                       INITIALS



<PAGE>


RIDER AGREEMENT:

To be attached to and form a part of:

LEASE dated MARCH 22, 1999, Premises ENTIRE 11TH FLOOR - 42-52 WEST 39TH STREET

Between       42-52 WEST 39 STREET LLC                              as Landlord

and              BLUEFLY, INC.                                        as Tenant

50. Every notice, invoice, or demand given by the Landlord to the Tenant for any
item of additional rent under this lease shall be conclusive and binding upon
the Tenant unless within 30 days after the giving of such notice, invoice or
demand the Tenant shall notify the Landlord in writing as required by the
pertinent provisions of this lease that the Tenant disputes the correctness of
the notice, invoice or demand, specifying the particular item claimed to be
incorrect. In the event the dispute shall not thereafter be settled by agreement
between the parties within 30 days thereafter the Landlord shall within the next
90 days institute a summary proceeding or an action to determine the issue.
During the pendency of such action or proceeding the Tenant shall pay all of the
items on such notice, invoice or demand including the disputed items without
prejudice to Tenant's position on such disputed items and in the event there is
a final determination in Tenant's favor the Landlord shall forthwith refund to
the Tenant the amount overpaid.

51. (Deleted)

52. It is understood and agreed that upon the execution and delivery of this
lease, the Tenant shall have immediate possession of the demised premises, free
of base rent through MAY 31, 1999, otherwise subject to the terms and conditions
hereof, and with the express understanding that the Tenant shall pay all items
of additional rent and other charges reserved under this lease commencing with
the date the Tenant receives an executed copy of this lease.

53. It shall be the Tenant's responsibility to apply in writing to the
Operations Department of the Landlord's office, Attention: Kenneth G. Walsh, any
requests for directory or elevator listings (where available) not less than
three (3) weeks prior to the effective date that the Tenant requires the posting
of such listing. The Landlord will provide the first such listing at the
Landlord's expense, and any subsequent changes, or additions will be charged to
the Tenant's account at the Landlord's cost. The Landlord shall provide, at no
additional cost to the Tenant no more than four (4) names in the main lobby
directory board of the building.



<PAGE>


54. Tenant represents that it dealt with no broker except JAMES BUSLIK &
ASSOCIATES, INC. Tenant agrees to hold Landlord and ADAMS & CO. REAL ESTATE,
INC. harmless from and against any and all claims or demands for brokerage
commissions arising out of or in connection with the execution of this lease or
any conversations or negotiations thereto with any broker other than the above
named broker. Landlord shall be obligated to pay the commission to the above
named broker.

55. The security as set forth in Article #31 hereof shall be deposited in
Citibank, N.A. located at 411 Fifth Avenue, New York, NY 10016, in an
interest-bearing account and the interest earned thereon shall accrue to Tenant
less 1% to be retained by the Landlord as an administrative charge.

                                                                       INITIALS


<PAGE>


RIDER AGREEMENT:

To be attached to and form a part of:

LEASE dated MARCH 22, 1999, Premises ENTIRE 11TH FLOOR - 42-52 WEST 39TH STREET

Between       42-52 WEST 39 STREET LLC                              as Landlord

and              BLUEFLY, INC.                                        as Tenant

56. (A) Subject to the provisions of paragraph (F) of this Article, the
provisions of Article #11 of this lease are amended to the extent that, Landlord
agrees that it will not withhold its consent unreasonably to a subletting of the
entire or a portion of the demised premises or an assignment of this lease
provided that (a) as to a sublease, Tenant delivers to Landlord a copy of the
proposed sublease in form to be executed, together with reasonably detailed
statements of the proposed subtenant's business and financial references; (b) as
to an assignment, Tenant delivers to Landlord reasonably detailed statements of
the proposed assignee's business and financial references; (c) the purpose for
which the proposed subtenant or assignee intends to use the demised premises are
uses expressly permitted by and not expressly prohibited by this lease; (d) the
date when the proposed sublease or assignment is to become effective is at least
30 days after the submission to Landlord of the aforesaid documentation; (e)
Tenant shall not be in default in the performance of any of its obligations
under this lease; (f) the proposed subtenant or assignee is not then a tenant of
any space in the building of which the demised premises form a part; (g) no
advertisement with respect to the demised premises shall quote a rental below
that of the demised premises or comparable space in the building; (h) any
request for consent to such subletting or assignment shall be made by notice
pursuant to the provisions of Article #27 of this lease.

          (B) Any such subletting or assignment shall not release the Tenant
herein from any liability or responsibility under the terms, covenants or
conditions of the within lease.

          (C) It is expressly agreed that in the event of an assignment, the
Assignee shall assume all the obligations of the lease jointly with the Tenant
herein, and the Tenant shall deliver to the Landlord a duplicate-original of
such assignment and the assumption by the Assignee, duly executed and
acknowledged by the Tenant and such Assignee as soon as same has been executed.

          (D) No further or additional subletting of the demised premises or
assignment of this lease shall be made, except with the prior written approval
of the Landlord pursuant to this Article.

          (E) It is further understood and agreed that the Tenant shall
designate Adams & Co. Real Estate, Inc. as Tenant's exclusive Agent to effect
any sublet, assignment or release, and Tenant shall pay to Adams & Co. Real
Estate, Inc. upon the execution of such subleasing, assignment or release, a
commission computed in accordance with the rates and rules established by Adams
& Co. Real Estate, Inc. Such exclusive shall be limited to ninety (90) days
only, after Tenant submits a request, however, if Tenant obtains its own
subtenant or assignee, no commission shall be due, owing or payable to Adams &
Co. Real Estate, Inc.


<PAGE>


          (F) Notwithstanding the provisions of this Article, in the event
Tenant requests Landlord's consent to a subletting of the entire demised
premises or an assignment of this lease, Landlord shall have the right to cancel
and terminate this lease as of the effective date set for such proposed
subletting or assignment by giving Tenant notice to that effect within 30 days
from the receipt of such request and thereupon, on such effective date, this
lease shall terminate and come to an end as though that were the date originally
set forth for the termination of this lease. Tenant agrees to vacate and
surrender possession of the premises to the Landlord on or before said date,
leaving same broom clean, in good order and condition. Thereupon, both parties
will be released and relieved from further liability under the within lease,
except that Tenant's obligations to perform all of the terms, obligations and
covenants, including the obligation to pay rent and additional rent, up to and
including the date of termination, shall survive such termination. Landlord
further agrees that if Landlord does cancel and terminate this lease as per this
Article, it shall not lease the premises to the Tenant's proposed subtenant.

                                   (continued)

                                                                       INITIALS


<PAGE>



RIDER AGREEMENT:

To be attached to and form a part of:

LEASE dated MARCH 22, 1999, Premises ENTIRE 11TH FLOOR - 42-52 WEST 39TH STREET

Between       42-52 WEST 39 STREET LLC                              as Landlord

and              BLUEFLY, INC.                                        as Tenant

56.       (continued)

          (G) If, in the event of a subletting allowed by the Landlord, the
rental for the sublet space is above $16.00 (plus all additional rent due to
Landlord) per square foot of rentable space, that portion of the sublet rent and
additional rent above $16.00 (plus all additional rent due Landlord) shall be
divided equally between the Landlord and Tenant herein and the Landlord's share
shall be deemed additional rent under this lease and payable within ten (10)
days after receipt thereof by the Tenant to the Landlord.

57. It is understood and agreed that portions of the demised premises may be
used and occupied by corporations, companies or firms affiliated with the
Tenant, to be used for the purposes for which the premises have been leased as
set forth in Article #2 hereof. This shall not, however, relieve the Tenant
herein from any liability or responsibility under the within lease.

58. It is understood and agreed that in the event at any time during the term of
this lease, the Twelfth (12th) Floor in the building of which the demised
premises are a part becomes available for rent, the Tenant herein shall have
first option or privilege of leasing said space for a term and at an annual
rental to be mutually agreed upon between the parties hereto. This provision,
however, does not preclude the Landlord from renewing the lease with the
existing Tenant of the premises.

          The Landlord agrees to notify the Tenant by registered or certified
mail, return receipt requested, whenever such space is available for rent and
the Tenant agrees to advise the Landlord by registered or certified mail, return
receipt requested, within a period of ten (10) days from the receipt of such
notice, that it will accept or reject the privilege of renting said space. In
the event the Tenant accepts same, it agrees to execute a lease within a period
of five (5) days after said lease has been submitted to the Tenant for
signature. The term of said lease shall commence on the first day of the month
succeeding receipt of such notice from the Landlord and shall expire on the same
date as this lease. In the event the Tenant fails to notify the Landlord of its
intention to lease said space or fails to execute a lease as herein provided,
the Landlord shall be released from any further obligation to the Tenant herein
with respect to such space offered and the Landlord shall be free to rent the
space to any other prospective tenant.

59. Subject to all of the terms and conditions of Article #3 of the within
lease, permission is hereby granted to the Tenant to make, at its own cost and
expense, all alterations, improvements and installations in the demised
premises.


<PAGE>


          Prior to the commencement of any and all work and installations,
Tenant shall submit to the Landlord or its Managing Agent, for its approval in
writing, plans and specifications for all work and installations, which approval
Landlord agrees shall not be unreasonably withheld or delayed. All work shall be
in strict conformity with all rules, regulations and ordinances of any
governmental authority or bureau having jurisdiction thereof, including the New
York Board of Fire Underwriters or any other similar body, and the Tenant agrees
to procure any permits needed in connection with such work prior to the
commencement thereof. In the event the Tenant is required to do any work in
connection with the building sprinkler system, water and/or electrical risers or
any other building riser or facility, the Tenant agrees that all work in
connection therewith shall be done by plumbing, electrical, sprinkler and/or
other contractors approved by the Landlord at the Tenant's sole cost competitive
in price with similar contractors. Tenant further agrees that it shall require
its contractors and/or sub-contractors to furnish the Landlord with Certificates
of Insurance for Workers' Compensation, Public Liability and Property Damage, as
provided for in Article #3 of this lease and otherwise comply with the terms and
conditions of this lease and particularly Article #3 thereof.

                                                                       INITIALS


<PAGE>


RIDER AGREEMENT:

To be attached to and form a part of:

LEASE dated MARCH 22, 1999, Premises ENTIRE 11TH FLOOR - 42-52 WEST 39TH STREET

Between       42-52 WEST 39 STREET LLC                              as Landlord

and              BLUEFLY, INC.                                        as Tenant

60. It is understood and agreed that the air conditioning equipment now in the
demised premises is the property of the Landlord and the Tenant shall have the
use thereof during the term of this lease. In consideration thereof, the Tenant
agrees to maintain and keep in good repair the said equipment and in addition,
pay the cost of a maintenance contract to be obtained by the Landlord. Tenant
may obtain its own maintenance contract in which event a copy thereof shall be
furnished to the Landlord within ten (10) days thereafter. Should the Tenant
fail to obtain such contract, the Landlord may, without further notice, obtain
same and the cost thereof shall be deemed additional rent under this lease.

          The Landlord shall warranty the air conditioning equipment during the
first year of lease.

          The said air conditioning equipment shall be surrendered by the Tenant
together with the premises as part thereof, at the expiration or prior
termination of this lease, or any renewal or extension thereof, in good order
and condition, ordinary wear excepted.

61. Notwithstanding the hours mentioned in Article #30 of this lease, the Tenant
shall have access to the demised premises seven (7) days per week, twenty-four
(24) hours per day, either by manned personnel or, at the option of the
Landlord, by the card access system.

          In the event of the card access system, Tenant shall be issued two (2)
access cards at no charge. Additional cards shall be available at the cost of
$15.00 per card, and the cost to replace a lost or stolen card shall be $15.00.
Procedure for the proper activation of the card access system shall be obtained
upon Tenant's request to Landlord's Managing Agent.

62. Landlord represents that there is no asbestos in the demised premises.

63. Wherever in this lease the consent or approval of the Landlord is required
or necessary, the same will not be unreasonably withheld or delayed.

64. The Landlord represents that the premises may be used for the purposes for
which they have been leased as set forth in Article #2 of this lease.

65. Upon the execution of this lease the Tenant shall furnish to the Landlord a
list of all of its officers and their respective residence addresses. If during
the term of this lease there is any change in the officers or addresses, the
Landlord shall be notified of the same within five (5) days thereafter.
This is a substantial obligation of this lease:


<PAGE>


KENNETH SEIFF
52 E 72ND NY NY 10021

ADDENDUM to ARTICLE #4:

          Landlord agrees to deliver premises vermin-free.

ADDENDUM to ARTICLE #7:

          Landlord shall use its reasonable efforts to obtain a non-disturbance
agreement from the current or future mortgagees.

                                                                       INITIALS



<PAGE>


RIDER AGREEMENT:

To be attached to and form a part of:

LEASE dated MARCH 22, 1999, Premises ENTIRE 11TH FLOOR - 42-52 WEST 39TH STREET

Between       42-52 WEST 39 STREET LLC                              as Landlord

and              BLUEFLY, INC.                                        as Tenant

ADDENDUM to ARTICLE #13:

          Except in the event of an emergency or where such entry is required by
law, Landlord's right of entry shall be exercised following reasonable advance
notice to Tenant. Landlord agrees that, while exercising such right of entry or
making such repairs, replacements and improvements, it shall use reasonable
efforts to avoid interfering with Tenant's business or disrupting the same.

ADDENDUM to ARTICLE #36:

          The maintenance of all window glass shall be the responsibility of the
Tenant and shall be kept in good repair at its sole cost and expense.

                                                                       INITIALS