Document:

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                                                                    Exhibit 10.1

                              EMPLOYMENT AGREEMENT

         EMPLOYMENT AGREEMENT dated as of December 29, 1999, by and between
Bluefly, Inc., a New York corporation (the "Company") and E. Kenneth Seiff
("Seiff").

                                    RECITALS

     1. The Company has heretofore employed Seiff as its Chief Executive Officer
and Chairman of the Board of Directors of the Company under an employment
agreement dated as of May 27, 1997 which expires on December 31, 1999.

     2. The Company desires to continue the services of Seiff as the Chief
Executive Officer and Chairman of the Board of Directors of the Company in
accordance with the terms and conditions of this Agreement.

     3. Seiff desires to continue to serve the Company as its Chief Executive
Officer and Chairman of the Board of Directors in accordance with the terms and
conditions of this Agreement.

     NOW, THEREFORE, in consideration of the mutual covenants contained in this
Agreement, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and Seiff agree as
follows:

     1. TERM

     The Company hereby agrees to employ Seiff as the Chief Executive Officer
and Chairman of the Board of Directors of the Company, and Seiff hereby agrees
to serve in such capacity, for a term beginning on January 1, 2000 and ending
December 31, 2002 (the "Term"), upon the terms and subject to the conditions
contained in this Agreement. The Term may, at the option of the Company and with
the approval of Seiff, be extended from time to time in a written memorandum
signed by the Company and Seiff, after approval by the Board of Directors.

     2. DUTIES

     As Chief Executive Officer and Chairman of the Board of Directors of the
Company, Seiff shall have such responsibilities, duties and authority as are
generally associated with the positions of Chief Executive Officer and Chairman
of the Board of Directors and as may from time to time be assigned to him by the
Board of Directors that are consistent with such responsibilities, duties and
authority. Seiff shall report directly to the Board of Directors of the Company.

     The principal location of Seiff's employment shall be in New York City,
although Seiff

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understands and agrees that he may be required to travel from time to time for
business reasons. Seiff shall devote his full business time to his duties as the
Chief Executive Officer and Chairman of the Board of Directors of the Company
during the Term. Seiff shall not, directly or indirectly, render services to any
other person or entity, without the consent of the Board of Directors, which
would interfere significantly with the faithful performance of his duties under
this Agreement.

     3. COMPENSATION

     For services rendered by Seiff to the Company during the Term, the Company
shall pay him a base salary of $250,000 per year (the "Base Salary"), payable in
accordance with the standard payroll practices of the Company. The Base Salary
may be increased annually at the discretion of the Company's Board of Directors,
taking into account merit, corporate and individual performance and general
business conditions, including changes in the cost of living index.

     4. BONUS

     For each fiscal year during the Term, Seiff shall be eligible to receive a
bonus set by the Board of Directors at its discretion, based on the operating
performance of the Company as compared to the projections presented to the Board
at the beginning of such fiscal year and such other factors as the Board deems
appropriate; provided, however that the amount of such bonus in any fiscal year
shall not exceed one hundred percent (100%) of the Base Salary for such fiscal
year, provided further, however, that the value of any stock options issued to
Seiff in any fiscal year shall not be included in calculating such one hundred
percent (100%) maximum. At the discretion of the Board of Directors, all or part
of such bonus may be paid through the issuance to Seiff of capital stock of the
Company, the fair market value of which is equal to the cash payment that Seiff
would otherwise be entitled to receive as all or part of such bonus; provided,
however, that Seiff shall be entitled to demand that an amount of such bonus
sufficient to pay any income taxes arising from such bonus be paid in cash
rather than in capital stock of the Company. All bonuses to be paid to Seiff
pursuant to this paragraph 4 shall be paid within thirty (30) days following
completion of the audit of the annual financial statements of the Company for
the fiscal year in question.

     5. EXPENSE, REIMBURSEMENT AND PERQUISITES

         1. During the term of this Agreement, Seiff shall be entitled to
reimbursement of all reasonable and actual out-of-pocket expenses incurred by
him in the performance of his services to the Company, provided that the
expenses are properly accounted for.

         2. During each calendar year of the term of this Agreement, Seiff shall
be entitled to reasonable vacation with full pay; provided, however, that Seiff
shall schedule such vacations in the interest of the Company.

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         3. The Company shall provide a life insurance policy on the life of
Seiff, for the benefit of Seiff 's beneficiaries, in the amount of at least
$1,000,000. All premiums on such policy shall be paid by the Company.

         4. Seiff shall be entitled to participate in all medical and dental
insurance and disability and hospitalization plans and other employee benefit
plans instituted by the Company from time to time on the same terms and
conditions as other employees of the Company, to the extent permitted by law.

     6. NON-COMPETITION; NON-SOLICITATION

         1. During the Non-Competition Period (as defined in paragraph 6(c)
below), Seiff, without the prior written permission of the Company, shall not,
anywhere in the world, directly or indirectly, (i) enter into the employ of or
render any services to any person, firm or corporation engaged in any business
which is directly or indirectly in competition with the Company ("Competitive
Business"); (ii) engage in any Competitive Business for his own account; (iii)
become associated with or interested in any Competitive Business as an
individual, partner, shareholder, creditor, director, officer, principal, agent,
employee, trustee, consultant, advisor or in any other relationship or capacity;
(iv) employ or retain, or have or cause any other person or entity to employ or
retain, any person who was employed or retained by the Company while Seiff was
employed by the Company (other than Nicole Kule, Dean Seiff, James Hilford and
Andrew Hilford); or (v) solicit, interfere with, or endeavor to entice away from
the Company, for the benefit of a Competitive Business, any of its customers or
other persons with whom the Company has a contractual relationship. However,
nothing in this Agreement shall preclude Seiff from investing his personal
assets in the securities of any corporation or other business entity which is
engaged in a Competitive Business if such securities are traded on a national
stock exchange or in the over-the-counter market and if such investment does not
result in his beneficially owning, at any time, more than three percent (3%) of
the publicly-traded equity securities of such Competitive Business.

         2. Seiff and the Company agree that the covenants of non-competition
and non-solicitation contained in this paragraph 6 are reasonable covenants
under the circumstances, and further agree that if, in the opinion of any court
of competent jurisdiction, such covenants are not reasonable in any respect,
such court shall have the right, power and authority to excise or modify such
provision or provisions of these covenants as to the court shall appear not
reasonable and to enforce the remainder of these covenants as so amended. Seiff
agrees that any breach of the covenants contained in this paragraph 6 would
irreparably injure the Company. Accordingly, Seiff agrees that the Company, in
addition to pursuing any other remedies it may have in law or in equity, may
obtain an injunction against Seiff from any court having jurisdiction over the
matter, restraining any further violation of this paragraph 6.

         3. The "Non-Competition Period" shall extend throughout the Term and
for a period of two (2) years following the end of the Term; provided, however
that, in the event that the Agreement is terminated during the Term by the
Company without cause, or by Seiff pursuant to a Constructive Termination, the
Non-Competition Period shall expire at the end of

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the Term; provided further, however that in the event that Seiff takes any
action during the two (2) year period following a termination without cause by
the Company or a Constructive Termination that would have constituted a
violation of the covenants contained in this paragraph 6 had it still been in
effect, the Company shall be entitled to discontinue Severance Payments payable
under paragraph 7(b)(i).

     7. TERMINATION

         1. This Agreement, the employment of Seiff, and Seiff 's position as an

officer and director of the Company shall terminate upon the first to occur of:

         (1)      his death;

         (2)      his "permanent disability", as defined in Section 7.1 of the
                  Shareholders' Agreement;

         (3)      a "Constructive Termination" by the Company, which, for
                  purposes of this Agreement, shall be deemed to have occurred
                  upon (A) the removal of Seiff from his position as Chief
                  Executive Officer of the Company and Chairman of its Board of
                  Directors, (B) any material diminution in the nature or scope
                  of the authorities, powers, functions, duties or
                  responsibilities attached to such positions, or (C) the
                  material breach by the Company of this Agreement; provided,
                  however that no such removal, diminution or breach shall be
                  considered a Constructive Termination unless Seiff has
                  provided the Company with at least sixty (60) days' prior
                  written notice of such removal, diminution or breach and the
                  Company has failed to cure such removal, diminution or breach
                  within such sixty (60) day period;

         (4)      the termination of this Agreement without cause by the
                  Company, which shall occur not less than sixty (60) days after
                  the Company has provided Seiff prior written notice of such
                  termination;

         (5)      non-renewal of this Agreement by the Company and/or the Board
                  of Directors; or

         (6)      the termination of this Agreement for cause, which, for
                  purposes of this Agreement, shall mean that Seiff has (1) been
                  convicted of a felony or any serious crime involving moral
                  turpitude, (2) engaged in materially fraudulent or materially
                  dishonest actions in connection with the performance of his
                  duties hereunder or (3) willfully and materially failed to
                  perform his duties hereunder; provided, however that, prior to
                  a termination for cause pursuant to subparagraph (3) hereof,
                  the Company shall provide Seiff with at least thirty (30)
                  days' prior written notice of

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                  such cause and shall not terminate the Agreement under this
                  paragraph 7(a)(vi) if Seiff cures such cause within such
                  thirty (30) day period;

         2. In the event that this Agreement is terminated without cause by the
Company pursuant to paragraph 7(a)(iv) or though a Constructive Termination
pursuant to paragraph 7(a)(iii):

         (1)      the Company shall pay Seiff severance and non-competition
                  payments (the "Severance Payments") equal to the Base Salary
                  in effect as of the date of such termination multiplied by the
                  number of full or partial fiscal years remaining in the term
                  of this Agreement as of the date of such termination;
                  provided, however, that the total amount of the Severance
                  Payments shall in no event be less than the Base Salary as of
                  the date of such termination. The Severance Payments shall be
                  payable in periodic installments in accordance with the
                  Company's standard payroll practices;

         (2)      the Company shall maintain in effect, or reimburse Seiff for
                  the cost of maintaining, the medical and dental insurance and
                  disability and hospitalization plans of the Company in which
                  Seiff participates as of the date of such termination for a
                  period equal to the period remaining in the term of this
                  Agreement as of the date of such termination; and

         (3)      any option to purchase shares of the capital stock of the
                  Company which has been issued to Seiff and is outstanding as
                  of the date of such termination shall be deemed fully vested
                  as of that date.

     8. CHANGE OF CONTROL

     In the event that a Change of Control (as defined below) occurs during the
Term, any option to purchase shares of the capital stock of the Company which
has been issued to Seiff and is outstanding as of the date of that Change in
Control shall be deemed to be fully vested as of the that date. For purposes of
this Agreement, "Change of Control" shall mean a change of the majority of the
members of the Board of Directors of the Company which is the result of either:

         a. The merger or consolidation of the Company with or into any other
corporation or entity; or

         b. The acquisition by any "person" or "group" of "beneficial ownership"
(as these terms are defined for the purposes of Section 13(d) of the Securities
and Exchange Act of 1934, as amended as of the date hereof ) of thirty percent
(30%) or more of the common stock of the Company outstanding as of the date of
such acquisition.

     9. CONFIDENTIALITY

         a. Seiff recognizes that the services to be performed by him are
special,

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unique and extraordinary in that, by reason of his employment under this
Agreement, he may acquire or has acquired Confidential Information (as defined
below) and trade secrets concerning the operation of the Company, its
predecessors, and/or its affiliates, the use or disclosure of which could cause
the Company, or its affiliates substantial loss and damages which could not be
readily calculated and for which no remedy at law would be adequate.
Accordingly, Seiff covenants and agrees with the Company that he will not at any
time during the Term or thereafter, except in the performance of his obligations
to the Company or with the prior written consent of the Board of Directors or as
otherwise required by court order, subpoena or other government process,
directly or indirectly disclose any secret or Confidential Information that he
may learn or has learned by reason of his association with the Company, or any
predecessor. If Seiff shall be required to make such disclosure pursuant to
court order, subpoena or other government process, he shall notify the Company
of the same, by personal delivery or electronic means, confirmed by mail, within
twenty-four (24) hours of learning of such court order, subpoena or other
government process and, at the Company's expense, shall (i) take all reasonably
necessary and lawful steps required by the Company to defend against the
enforcement of such subpoena, court order or government process, and (ii) permit
the Company to intervene and participate with counsel of its choice in any
proceeding relating to the enforcement thereof. For purposes of this Agreement,
the term "Confidential Information" shall mean information not in the public
domain and not previously disclosed to the public or to the trade by the
Company's management with respect to the Company's or its affiliates'
businesses, facilities and methods, trade secrets and other intellectual
property, designs, manuals, confidential reports, customer names, financial
information or business plans. Seiff understands and agrees that the rights and
obligations set forth in this paragraph 9(a) shall survive the termination or
expiration of this Agreement.

         b. Seiff confirms that all Confidential Information is and shall remain
the exclusive property of the Company. All business records, papers and
documents kept or made by Seiff relating to the business of the Company shall be
and will remain the property of the Company. Upon the termination of his
employment with the Company, Seiff shall promptly deliver to the Company, and
shall not, without the consent of the Company, which shall not be unreasonably
withheld, retain copies of any written materials prepared by or for the Company
not previously made available to the public or records and documents made by
Seiff or coming into his possession and not in the public domain concerning the
business or affairs of the Company or any predecessors to its business, or any
of its affiliates or subsidiaries. Seiff understands and agrees that the rights
and obligations set forth in this paragraph 9(b) shall survive the termination
or expiration of this Agreement.

         c. Seiff will promptly disclose to the Company all Intellectual
Property (as defined below) and hereby acknowledges that all Intellectual
Property shall at all times and for all purposes be the sole property of the
Company. Seiff hereby assigns and agrees to assign to the Company any rights he
may have or acquire in any Intellectual Property. For purposes of this
Agreement, the term "Intellectual Property" shall mean any Confidential
Information, whether or not registrable under copyright, trademark, patent or
other intellectual property or similar laws, made or conceived or reduced to
practice or learned by Seiff, either alone or jointly with others,

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during the period of his employment that (i) at the time of conception or
reduction to practice is related to the actual or demonstrably anticipated
business of the Company, (ii) results from tasks performed by Seiff for the
Company or (iii) is developed on any amount of the Company's time or result from
the use of premises or property (including computer systems) owned, leased, or
contracted for by the Company. Seiff understands and agrees that his obligations
set forth in this paragraph 9(c) shall survive the termination or expiration of
this Agreement.

     10. GOVERNING LAW

     This Agreement shall be deemed a contract made under, and for all purposes
shall be construed in accordance with the laws of the State of New York, without
giving effect to the principles of conflict of laws thereof.

     11. ENTIRE AGREEMENT

     This Agreement contains all of the understandings between Seiff and the
Company pertaining to Seiff 's employment with the Company, and it supersedes
all undertakings and agreements, whether oral or in writing, previously entered
into between them.

     12. AMENDMENT OR MODIFICATION, WAIVER

     No provision of this Agreement may be amended or modified unless such
amendment or modification is agreed to in writing, signed by Seiff and by an
officer of the Company duly authorized to do so. Except as otherwise
specifically provided in this Agreement, no waiver by either party of any breach
by the other party of any condition or provision of this Agreement to be
performed by such other party shall be deemed a waiver of a similar or
dissimilar provision or condition at the same or any prior or subsequent time.

     13. DUTY TO MITIGATE

     Seiff shall not be obligated to seek other employment by way of mitigation
of the amounts payable to him under any provision of this Agreement.

     14. NOTICES

     Any notice to be given hereunder shall be in writing and delivered
personally or sent by certified mail, postage prepaid, return receipt requested,
addressed to the party concerned at the address indicated below or to such other
address as such party may subsequently designate by like notice:

         If to the Company, to:

                  Bluefly, Inc.
                  42 West 39th Street
                  New York, NY 10018
                  Attn: General Counsel

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         With a copy to:

                  Swidler Berlin Shereff Friedman, LLP
                  405 Lexington Avenue
                  New York, New York 10174
                  Attn: Richard A. Goldberg, Esq.

         If to Seiff, to:

                  E. Kenneth Seiff
                  52 East 72nd Street
                  New York, NY 10021

     15. SEVERABILITY

     In the event that any provision or portion of this Agreement shall be
determined to be invalid or unenforceable for any reason, the remaining
provisions or portions of this Agreement shall be unaffected thereby and shall
remain in full force and effect to the fullest extent permitted by law.

     16. TITLES

     Titles of the Sections of this Agreement are intended solely for
convenience of reference and no provision of this Agreement is to be construed
by reference to the title of any Section.

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                  IN WITNESS WHEREOF, the parties have executed this Agreement
on the date first above written.

                                                  BLUEFLY, INC.

                                                  By:/s/ Neal Moszkowski
                                                  -----------------------------
                                                  Name:
                                                  Title:

                                                  /s/ E. Kenneth Seiff
                                                  -----------------------------
                                                  E. Kenneth Seiff

                                       9<PAGE>

                                                                   Exhibit 10.11

                              EMPLOYMENT AGREEMENT

     This EMPLOYMENT AGREEMENT is entered into as of November 3, 1999, by and
between Bluefly, Inc., a New York corporation (the "Company"), and Robert
Stevens ("Stevens").

                                    RECITALS

     1. The Company desires to retain the services of Stevens as an Executive
Vice President of the Company in accordance with the terms and conditions of
this Agreement.

     2. Stevens will serve the Company as an Executive Vice President in
accordance with the terms and conditions of this Agreement.

     NOW, THEREFORE, in consideration of the mutual covenants contained in this
Agreement, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and Stevens agree as
follows:

     1. TERM

     The Company hereby agrees to employ Stevens as an Executive Vice President
of the Company, and Stevens hereby agrees to serve in such capacity, for a term
commencing no later than January 1, 2000 and ending on January 1, 2004 (the
"Employment Term"), upon the terms and subject to the conditions contained in
this Agreement. The Company and Stevens further agree that, for a term
commencing as of the date hereof and ending upon the commencement of the
Employment Term (the "Consulting Term," and, together with the Employment Term,
the "Term"), Stevens shall serve as a consultant to the Company performing such
duties as may be agreed by the Company and Stevens.

     2. DUTIES

     During the Employment Term, Stevens shall serve as an Executive Vice
President of the Company, and shall be responsible for the duties attendant to
such office and such other managerial duties and responsibilities with the
Company as may be assigned from time to time by the Chief Executive Officer
and/or the Board of Directors of the Company.

     The principal location of Stevens' employment shall be in the New York City
vicinity, although Stevens understands and agrees that he will be required to
travel frequently for business reasons. Stevens shall diligently and faithfully
perform his obligations under the Agreement and shall devote his full
professional and business time and best efforts to the performance of his

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duties as an Executive Vice President of the Company during the Employment Term.
Stevens shall not, directly or indirectly, render business services to any other
person or entity, without the consent of the Company's Board of Directors.

     3. BASE SALARY

     For services rendered by Stevens to the Company during the Employment Term,
the Company shall pay him a base salary of $175,000 per year, payable in
accordance with the standard payroll practices of the Company, subject to annual
increases in the sole discretion of the Chief Executive Officer and the
Company's Board of Directors, taking into account the financial and operating
performance of the Company's business and divisions and a qualitative assessment
of Stevens' performance during such year. Stevens shall not receive any salary
or fees for services rendered during the Consulting Term, other than the
granting of the Options.

     4. BONUS/OPTIONS

         a. During the Employment Term, Stevens shall be eligible to receive a
bonus set by the Board of Directors in its sole discretion and based on such
factors as the Board of Directors deems appropriate.

         b. The Company hereby agrees to cause the issuance to Stevens of
options ("Options") to purchase 100,000 shares of the Company's common stock,
$.01 par value ("Common Stock"). The Options shall be issued pursuant to, and in
accordance with, the Company's 1997 Stock Option Plan (the "Plan"). The Options
shall be Non-Qualified Stock Options (as defined in the Plan), and shall be
exercisable at a price equal to the Fair Market Value (as defined in the Plan)
of the Common Stock on the date hereof. The Options shall vest over a
forty-eight (48) month period as follows: (i) 12.50% of the Options shall vest
on the six month anniversary of the date of grant and (ii) 2.083% of the Options
shall vest each month thereafter until all such Options shall have vested, but
subject to shareholder approval to the extent there are then insufficient shares
available for grant provided that if shareholder approval is not obtained, the
Company shall use its best efforts to adopt a stock appreciation rights plan
(the "SAR Plan") and provide Stevens with rights under the SAR Plan that mirror
in all material respects the terms and conditions of the Options had the Options
not been declared null and void by virtue of the failure to obtain such
shareholder approval, except that the aggregate amount payable by the Company to
Stevens pursuant to any such rights granted under the SAR Plan shall not exceed
$100,000. The Term of each Option shall be 10 years from the date of grant. In
the event of the termination of Stevens's employment for any reason, he shall
have 30 days within which to exercise any vested Options and any unvested
Options shall be forfeited. During the Term of this Agreement, Stevens shall be
eligible to participate in the Company's future stock option grants as
determined appropriate by the Committee in its sole discretion.

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     5. EXPENSE REIMBURSEMENT AND PERQUISITES

         a. During the Term of this Agreement, Stevens shall be entitled to
reimbursement of all reasonable and actual out-of-pocket expenses incurred by
him in the performance of his services to the Company consistent with corporate
policies, if any, provided that the expenses are properly accounted for.

         b. During each calendar year of the Employment Term, Stevens shall be
entitled to reasonable vacation with full pay in accordance with they Company's
then-current vacation policies; provided, however, that Stevens shall schedule
such vacations at times convenient to the Company.

         c. During the Employment Term, the Company shall provide Stevens with
$500,000 worth of term life insurance and disability insurance purchased for
annual premiums of up to $5,000 per year, both subject to availability on
commercially reasonable terms, major medical insurance coverage as determined by
the Company in its sole discretion, and Stevens shall be entitled to participate
in all dental insurance and other employee benefit plans instituted by the
Company from time to time on the same terms and conditions as other similarly
situated employees of the Company, to the extent permitted by law. In addition,
Stevens shall be a covered officer under the Company's now existing and any
future Directors and Officers liability policy.

     6. NON-COMPETITION; NON-SOLICITATION

         a. In consideration of the offer of employment, severance benefits and
Options to be granted to Stevens hereunder, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
during the Term of this Agreement and for a period equal to two years
thereafter, Stevens shall not, without the prior written consent of the Company,
anywhere in the world, directly or indirectly, (i) enter into the employ of or
render any services to any Competitive Business; (ii) engage in any Competitive
Business for his own account; (iii) become associated with or interested in any
Competitive Business as an individual, partner, shareholder, creditor, director,
officer, principal, agent, employee, trustee, consultant, advisor or in any
other relationship or capacity; (iv) employ or retain, or have or cause any
other person or entity to employ or retain, any person who was employed or
retained by the Company while Stevens was employed by the Company; or (v)
solicit, interfere with, or endeavor to entice away from the Company, for the
benefit of a Competitive Business, any of its customers or other persons with
whom the Company has a contractual relationship. For purposes of this Agreement,
a "Competitive Business" shall mean any person, corporation, partnership, firm
or other entity which sells or has plans to sell apparel, fashion accessories,
or home furnishings via the Internet or otherwise engages in any business which
now or at the time has material operations which are competitive (directly or
indirectly) with the business of the

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Company (including any line of business for which the Company has undertaken any
substantial amount of planning) as of the time Stevens employment with the
Company terminates, provided that activities in the energy or gaming industries
shall in no event be considered to be competitive (directly or indirectly) with
the business of the Company. However, nothing in this Agreement shall preclude
Stevens from (i) investing his personal assets in the securities of any
corporation or other business entity which is engaged in a Competitive Business
if such securities are traded on a national stock exchange or in the
over-the-counter market and if such investment does not result in his
beneficially owning, at any time, more than three percent (3%) of the
publicly-traded equity securities of such Competitive Business; or (ii) working
for or becoming a principal of any consulting firm that provides consulting
services to a Competitive Business, so long as Stevens does not directly
participate in the provision of such services.

         b. Stevens and the Company agree that the covenants of non-competition
and non-solicitation contained in this paragraph 6 are reasonable covenants
under the circumstances, and further agree that if, in the opinion of any court
of competent jurisdiction, such covenants are not reasonable in any respect,
such court shall have the right, power and authority to excise or modify such
provision or provisions of these covenants as to the court shall appear not
reasonable and to enforce the remainder of these covenants as so amended.
Stevens agrees that any breach of the covenants contained in this paragraph 6
would irreparably injure the Company. Accordingly, Stevens agrees that the
Company, in addition to pursuing any other remedies it may have in law or in
equity, may obtain an injunction against Stevens from any court having
jurisdiction over the matter, restraining any further violation of this
paragraph 6.

     7. TERMINATION

         a. This Agreement, the employment of Stevens, and Stevens' position as
an Executive Vice President of the Company shall terminate upon the first to
occur of:

         (i)      his death;

         (ii)     his "permanent disability," due to injury or sickness for a
                  continuous period of four (4) months, or a total of eight
                  months in a twenty-four month period (vacation time excluded),
                  during which time Stevens is unable in substantial part to
                  attend to his ordinary and regular duties, provided that the
                  Company shall give Stevens thirty (30) days' written notice
                  prior to any such termination;

         (iii)    a "Constructive Termination" by the Company during the
                  Employment Term, which, for purposes of this Agreement, shall
                  be deemed to have occurred upon (A) the removal of Stevens
                  without his consent from his position as an Executive Vice
                  President of the Company, or (B) the material breach by the
                  Company of this Agreement; provided that no such

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                  breach shall be considered a Constructive Termination unless
                  Stevens has provided the Company with at least thirty (30)
                  days' prior written notice of such breach and the Company has
                  failed to cure such breach within such thirty (30) day period;

         (iv)     the termination of this Agreement at any time without cause by
                  the Company;

         (v)      the termination of this Agreement for cause, which, for
                  purposes of this Agreement, shall mean that (1) Stevens has
                  been convicted of a felony or any serious crime involving
                  moral turpitude, or engaged in materially fraudulent or
                  materially dishonest actions in connection with the
                  performance of his duties hereunder, or (2) Stevens has
                  willfully and materially failed to perform his duties
                  hereunder, or (3) Stevens has willfully or negligently
                  breached the terms and provisions of this Agreement in any
                  material respect, or (4) Stevens has failed to comply in any
                  material respect with the Company's policies of conduct
                  including with respect to trading in securities, provided that
                  the Company shall provide Stevens with at least five (5)
                  business days' prior written notice of any such failure to
                  comply and an opportunity to cure such failure, to the extent
                  curable; or

         (vi)     the termination of this Agreement by Stevens, which shall
                  occur on not less than 60 days prior written notice from
                  Stevens.

         b. In the event that this Agreement is terminated during the Employment
Term pursuant to paragraphs 7(a)(i), 7(a)(ii), 7(a)(v) or 7(a)(vi), the Company
shall pay Stevens his base salary only through the date of termination. In the
event that this Agreement is terminated during the Employment Term pursuant to
paragraphs 7(a)(iii) or 7(a)(iv), the Company shall pay Stevens, in lieu of all
salary, compensation payments and perquisites set forth in paragraphs 3, 4 and 5
(including bonus payments and unvested option grants, but excluding vested
option grants), severance payments (the "Severance Payments") as follows:

         (i)      the then-current base salary for a period of ninety (90) days,
                  if Stevens is terminated during the first year of the Term of
                  this Agreement;

         (ii)     the then-current base salary for a period of one-hundred
                  twenty (120) days, if Stevens is terminated during the second
                  year of the Term of this Agreement; or

                                       5
<PAGE>

         (iii)    the then-current base salary for a period of one-hundred fifty
                  (150) days, if Stevens is terminated during the third year of
                  the Term of this Agreement or any time during the Term of this
                  Agreement thereafter.

The Severance Payments shall be payable in periodic installments in accordance
with the Company's standard payroll practices.

     8. CONFIDENTIALITY

         a. Stevens recognizes that the services to be performed by him are
special, unique and extraordinary in that, by reason of his employment and
provision of consulting services under this Agreement, he may acquire or has
acquired confidential information and trade secrets concerning the operation of
the Company, its predecessors, and/or its affiliates, the use or disclosure of
which could cause the Company, or its affiliates substantial loss and damages
which could not be readily calculated and for which no remedy at law would be
adequate. Accordingly, Stevens covenants and agrees with the Company that he
will not at any time during the Term of this Agreement or thereafter, except in
the performance of his obligations to the Company or with the prior written
consent of the Board of Directors or as otherwise required by court order,
subpoena or other government process, directly or indirectly, disclose any
secret or confidential information that he may learn or has learned by reason of
his association with the Company. If Stevens shall be required to make such
disclosure pursuant to court order, subpoena or other government process, he
shall notify the Company of the same, by personal delivery or electronic means,
confirmed by mail, within twenty-four (24) hours of learning of such court
order, subpoena or other government process and, at the Company's expense (such
expenses to be advanced by the Company as reasonably required by Stevens), shall
(i) take all necessary and lawful steps reasonably required by the Company to
defend against the enforcement of such subpoena, court order or government
process, and (ii) permit the Company to intervene and participate with counsel
of its choice in any proceeding relating to the enforcement thereof. The term
"confidential information" includes, without limitation, information not in the
public domain and not previously disclosed to the public or to the trade by the
Company's management with respect to the Company's or its affiliates' facilities
and methods, trade secrets and other intellectual property, designs, manuals,
confidential reports, supplier names and pricing, customer names and prices
paid, financial information or business plans.

         b. Stevens confirms that all confidential information is and shall
remain the exclusive property of the Company. All memoranda, notes, reports,
software, sketches, photographs, drawings, plans, business records, papers or
other documents or computer-stored or disk-stored information kept or made by
Stevens relating to the business of the Company shall be and will remain the
sole and exclusive property of the Company and all such materials containing
confidential information shall be promptly delivered and returned to the Company
immediately upon the termination of his employment with the Company.

                                       6

<PAGE>

         c. Stevens shall make full and prompt disclosure to the Company of all
inventions, improvements, ideas, concepts, discoveries, methods, developments,
software and works of authorship, whether or not copyrightable, trademarkable or
licensable, which are created, made, conceived or reduced to practice by Stevens
during his services with the Company, whether or not during normal working hours
or on the premises of the Company and which relate in any manner to the business
of the Company (all of which are collectively referred to in this Agreement as
"Developments"). All Developments shall be the sole property of the Company, and
Stevens hereby assigns to the Company, without further compensation, all of his
rights, title and interests in and to the Developments and any and all related
patents, patent applications, copyrights, copyright applications, trademarks and
trade names in the United States and elsewhere.

         d. Stevens shall assist the Company in obtaining, maintaining and
enforcing patent, copyright and other forms of legal protection for intellectual
property in any country. Upon the request of the Company, Stevens shall sign all
applications, assignments, instruments and papers and perform all acts necessary
or desired by the Company in order to protect its rights and interests in any
Developments.

         e. Stevens agrees that any breach of this paragraph 8 will cause
irreparable damage to the Company and that, in the event of such breach, the
Company will have, in addition to any and all remedies of law, including rights
which the Company may have to damages, the right to equitable relief including,
as appropriate, all injunctive relief or specific performance or other equitable
relief. Stevens understands and agrees that the rights and obligations set forth
in paragraph 8 shall survive the termination or expiration of this Agreement.

     9. REPRESENTATIONS AND WARRANTIES

         a. Stevens represents and warrants to the Company that he was advised
to consult with an attorney of Stevens' own choosing concerning this Agreement.

         b. Stevens represents and warrants to the Company that, to the best of
his knowledge, the execution, delivery and performance of this Agreement by
Stevens complies with all laws applicable to Stevens or to which his properties
are subject and does not violate, breach or conflict with any agreement by which
he or his assets are bound or affected.

     10. INDEMNIFICATION

     The Company shall indemnify and hold Stevens harmless to the fullest extent
permitted by law from and against any and all claims, losses, liabilities,
damages and expenses including, but not limited to, reasonable attorneys' fees
incurred by, imposed upon or asserted against Stevens as a result of or arising
out of any acts or omission by Stevens in his capacity as an officer, director,
employee or consultant of the Company.

                                       7
<PAGE>

     11. MEDIATION

         (a) The Company and Stevens hereby state their mutual desire for any
dispute concerning a legally cognizable claim arising out of this Agreement or
in connection with the employment of Stevens by the Company (other than a claim
for injunctive relief in connection with an alleged violation of Stevens'
obligations under Sections 6 and 8 hereunder), including, but not limited to,
claims of breach of contract, unlawful termination, discrimination, harassment,
workers' compensation retaliation, defamation, tortious infliction of emotional
distress, fraud and conversion ( "Legal Dispute"), be resolved amicably, if
possible, and without the need for litigation.

         (b) Based on this mutual desire, in the event a Legal Dispute arises,
the parties agree that before instituting an action in a court of law, the
parties shall first submit the Legal Dispute to mediation under the auspices of
the American Arbitration Association (the "AAA") or such other mediation
provider as shall be mutually agreed upon by the parties pursuant to the
mediation rules and procedures promulgated by the AAA or another agreed
mediation provider at such time the Legal Dispute is submitted for resolution.
The parties further agree to make a good faith effort to resolve the Legal
Dispute through such mediation.

     12. GOVERNING LAW

     This Agreement shall be deemed a contract made under, and for all purposes
shall be construed in accordance with, the laws of the State of New York,
without giving effect to its conflict of law provisions.

     13. ENTIRE AGREEMENT

     This Agreement contains all of the understandings between Stevens and the
Company pertaining to Stevens' employment with the Company, and it supersedes
all undertakings and agreements, whether oral or in writing, previously entered
into between them.

     14. AMENDMENT OR MODIFICATION; WAIVER

     No provision of this Agreement may be amended or modified unless such
amendment or modification is agreed to in writing, signed by Stevens and by an
officer of the Company duly authorized to do so. Except as otherwise
specifically provided in this Agreement, no waiver by either party of any breach
by the other party of any condition or provision of this Agreement to be
performed by such other party shall be deemed a waiver of a similar or
dissimilar provision or condition at the same or any prior or subsequent time.

                                       8
<PAGE>

     15. NOTICES

     Any notice to be given hereunder shall be in writing and delivered
personally or sent by certified mail, postage prepaid, return receipt requested,
addressed to the party concerned at the address indicated below or to such other
address as such party may subsequently designate by like notice:

         If to the Company, to:

                  Bluefly, Inc.
                  42 West 39th Street
                  New York, NY 10018
                  Attn: E. Kenneth Seiff

         If to Stevens, to:

                  Robert Stevens
                  c/o Michel Lee
                  Harvey Pennington Cabot Griffith & Renneison, LLC
                  144 East 44th Street
                  New York, New York 10017

Any such notice shall be deemed given upon receipt.

     16. SEVERABILITY

     In the event that any provision or portion of this Agreement shall be
determined to be invalid or unenforceable for any reason, the remaining
provisions or portions of this Agreement shall be unaffected thereby and shall
remain in full force and effect to the fullest extent permitted by law.

     17. TITLES

     Titles of the paragraphs of this Agreement are intended solely for
convenience of reference and no provision of this Agreement is to be construed
by reference to the title of any paragraphs.

                                       9
<PAGE>

     18. COUNTERPARTS

     This Agreement may be executed in counterparts, each of which shall be
deemed an original, and all of which together shall constitute one and the same
instrument.

                                       10

<PAGE>

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
date first above written.

                                          BLUEFLY, INC.

                                          By: /s/ E. Kenneth Seiff
                                              -----------------------------
                                              E. Kenneth Seiff
                                              Chief Executive Officer

                                          EMPLOYEE

                                          /s/ Robert Stevens
                                          -----------------------------
                                          Robert Stevens

                                       11

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