Document:

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                                                                    EXHIBIT 10.5

                              EMPLOYMENT AGREEMENT

     This Agreement is made as of the 4th day of June, 2001 between Retail
Convergence, Inc. (d/b/a SmartBargains), a Delaware corporation, with offices at
40 Broad Street, Boston, Massachusetts 02109 (the "Company"), and Carl
Rosendorf, an individual residing at 43 Scotch Pine Road, Weston, Massachusetts
02493 (the "Employee").

                                    RECITALS

     The Company desires to employ the Employee as its Chief Executive Officer
and a director and the Employee desires to be so employed upon the terms and
conditions hereinafter set forth.

                                   WITNESSETH:

     NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, the parties hereto, each intending to be legally bound hereby,
agree as follows:

     1. Employment. The Company hereby employs the Employee as the Chief
Executive Officer of the Company, with responsibility to direct and oversee all
aspects of the Company's business. During such time as the Employee is employed
by the Company hereunder (the "Employment Term"), the Employee shall be subject
to the direction of the Board of Directors of the Company. During the Employment
Term, the Employee shall be a member of the Board of Directors of the Company.

     2. Performance. The Employee agrees to devote his best efforts and all of
his business time to the performance of his duties hereunder during The
Employment Term.

     3. Employment Term. The Employment Term shall commence on the date hereof
and shall continue until the Employee's employment with the Company is
terminated in accordance with this Agreement.

     4. Compensation.

        (a) Salary. During the first three years of the Employment Term, the
Company shall pay the Employee a base salary, payable in equal weekly
installments of not less than $6,730.77, subject to withholding and other
applicable taxes, representing the annual rate of not less than $350,000.

        (b) Bonus. Except as provided below with respect to certain termination
events, the Employee shall be paid a bonus of $150,000 per year during each of
the first three years of the Employment Term. During the first year of the
Employment Term such bonus will be paid $37,500 quarterly, payable on the three
month, six month, nine month and twelve month anniversaries of the date hereof.
Such bonus will be paid with respect to the second year of the Employment Term
on the second year anniversary of the date hereof, and shall be paid annually
thereafter during the Employment Term on the subsequent anniversaries of the
date hereof.

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        (c) Benefits. The Employee shall be covered by the Company's medical
plans generally made available to the Company's employees and shall participate
in all other benefit programs available to the Company's senior management.

        (d) Vacation. The Employee shall be granted leave for three weeks for
each twelve months during the Employment Term. Neither time for vacation nor
holidays may be carried forward beyond the end of each such twelve month period.

        (e) Loan. The Company agrees to enter into a loan arrangement with the
Employee on the terms set forth on Exhibit A attached hereto. Such loan shall be
subject to execution and delivery of documentation reasonably acceptable to the
Employee and the Company relating to such loan.

        (f) Miscellaneous.

         1) The Company shall reimburse the Employee for reasonable, documented
        business and travel expenses, in accordance with Company policy.

         2) The Company shall reimburse the Employee for documented relocation
        expenses, including any lease cancellation fees the Employee may incur
        with respect to his New York apartment, up to an aggregate maximum of
        $10,000.

     5. Agreement Not to Compete, Agreement Not to Solicit.

        (a) Non-Solicitation. The Employee agrees that during the
Non-Competition Period (as such term is defined below), he will not in any
capacity, either separately, jointly or in association with others, directly or
indirectly, solicit or otherwise seek to employ any employee or independent
contractor of the Company or the Company's subsidiaries. The "Non-Competition
Period" is (a) the period during which the Employee is employed hereunder plus
(b) one year following Employee's termination of employment with the Company for
any reason. Notwithstanding anything to the contrary herein, the Employee shall
not be deemed in violation of this Agreement solely as a result of (i) the
publication or posting (in any medium) of any advertisements or notices of
employment opportunities or the participation in any job fairs, or (ii) the
retention of any independent contractor of the Company provided such retention
does not result in such independent contractor electing to terminate or reduce
the type or level of services provided to the Company.

        (b) Agreement Not to Compete. The Employee agrees that during the
Non-Competition Period he will not in any capacity, either separately, jointly,
or in association with others, directly or indirectly engage in, or have any
association with or financial interest in a "Competitive Activity." "Competitive
Activity" shall mean providing services with respect to commerce on or through
the internet, in any capacity, (including, without limitation, as an officer,
director, employee, consultant, independent contractor or investor), to a person
or entity engaged in the business of offering for sale or selling overstock,
remainder, out of season, or distressed merchandise, that is the same or
substantially similar to the products offered for sale by the Company on the
effective date of termination of Employee's employment with the Company (or, if
being determined before such termination, on the date of such determination), or

                                      -2-
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which the Company has actual plans to offer for sale as of the effective date of
termination of Employee's employment with the Company (or, if being determined
before such termination, on the date of such determination). Notwithstanding the
foregoing, holding an equity interest of less than 5% in any publicly traded
entity shall not be deemed a Competitive Activity hereunder, provided that the
Employee does not otherwise engage in Competitive Activity on behalf of that
entity.

     6. Secret Processes and Confidential Information. During the Employment
Term and thereafter, the Employee will not use or divulge, directly or
indirectly, other than in the regular and proper course of business of the
Company, any confidential information, know how, process, technique, plan
invention, trade secret or other non-public information used by or regarding the
Company or its business (collectively, "Information"), provided that, if the
Employee is required to divulge any such information in order to comply with
applicable laws, governmental regulations or legal subpoena, the Employee may do
so without violation hereof if the Employee provides prior timely written notice
thereof to the Company, provides the Company with ample opportunity to object to
such disclosure at its expense, and takes reasonable and lawful actions to avoid
and/or minimize the extent of such disclosure and provided further; however,
that the Employee has no obligation, express or implied, to refrain from using
or disclosing to others any such Information which is hereafter or shall become
available to the public other than through disclosure by the Employee. All new
processes, techniques, know-how, inventions, plans, products, patents and
devices developed, made or invented by the Employee, alone or with others, while
an employee of the Company, shall become and be the sole property of the Company
unless released in writing by the Company. During the Employment Term and
thereafter the Employee agrees to take all actions reasonably requested by the
Company, at its expense, to validly vest or transfer, if appropriate, legal
title to any such processes, techniques, know-how, inventions, plans, products,
patents and devices in and to the Company.

     7. Termination.

        (a) Termination by Employee. The Employee may terminate his employment
hereunder at any time for any reason or for no reason upon providing written
notice to the Company. Also, the Employee may terminate his employment hereunder
for Good Reason (as defined below) by providing written notice thereof to the
Company, which notice shall indicate such termination is for Good Reason. As
used herein, the term "Good Reason" shall mean (i) termination due to a material
breach of this Agreement, or any other agreement between the Employee and the
Company, which breach remains uncured by the Company, if curable, for a period
of thirty (30) days following receipt of a written notice of breach from the
Employee, specifying the act or omission upon which such claim of breach is
based; (ii) the Employee being assigned by the Company to perform duties or
responsibilities on a regular and continuing basis which are materially
different from the duties and responsibilities of a Chief Executive Officer of
an enterprise comparable to the Company; or (iii) a downgrading of the
Employee's title from Chief Executive Officer, and in each case, the Employee's
election to terminate as a result thereof. The Employee acknowledges that the
Company is a dynamic and changing enterprise, and that he may be asked, from
time to time, to perform tasks which are not ordinarily performed by the Chief
Executive Officer of a more established business. Such assignments shall not

                                      -3-
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constitute Good Reason. Termination for Good Reason shall be deemed to be
termination by the Company without cause, under Section 7(d) of this Agreement.

        (b) Termination by the Company With Cause. The Company shall have the
right at any time to terminate the Employee's employment hereunder without prior
notice for Cause. "Cause" shall mean (i) any act or omission which constitutes a
material breach by the Employee of the terms of this Agreement or any other
agreement between the Employee and the Company, which breach remains uncured by
the Employee for a period of thirty (30) days following the Employee's receipt
of a written notice of breach from the Company, specifying the act or omission
upon which the Company's claim of breach is based; (ii) the commission of a
felony or any dishonest or wrongful act involving fraud; (iii) the commission of
an act of moral turpitude which may adversely effect the reputation or business
of the Company as reasonably determined by the Board of Directors of the
Company; or (iv) the Employee's willful or continuing failure to perform his
duties reasonably assigned.

        (c) Termination by Company for Death or Disability.

          (i) The Employee's employment hereunder shall terminate upon the death
of the Employee.

          (ii) The Company shall have the right at any time to terminate the
Employee's employment hereunder without prior notice upon the Employee's
inability to perform his duties hereunder by reason of any mental, physical or
other disability (as hereinafter defined) for a period of at least six (6)
months in any twelve (12) month period. For purposes of this Agreement, the term
"disability" is defined to mean any physical or mental disability suffered by
the Employee which renders the Employee unable to perform his duties hereunder
and which is further determined to be permanent with regard to the Employee's
ability to return to work in his full capacity. Any determination of disability
shall be made by the Company in consultation with a qualified physician or
physicians selected by the Company and reasonably acceptable to the Employee.

        (d) Termination by Company Without Cause. The Company shall have the
right to terminate the Employee's employment for any other reason or for no
reason without Cause upon written notice to the Employee.

     8. Effect of Termination of Employment.

        (a) With Cause. If the Employee's employment is terminated by the
Company with Cause (pursuant to Section 7(b)), or voluntarily by the Employee
without Good Reason, the Employee's salary and other benefits specified in
Section 4 shall cease at the time of such termination, and the Employee shall
not be entitled to any further payments from the Company (including, without
limitation, any bonus specified in Section 4(b) which has not been paid prior to
such termination), except to the extent of unpaid base salary and vacation pay
accrued (but not used) through the date of such termination; provided, however,
that the Employee shall be entitled to continue to participate in the Company's
medical benefit plans to the extent required by law.

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        (b) Death or Disability. If the Employee's employment is terminated by
the death or disability of the Employee (pursuant to Section 7(c)), the Company
shall have no further payment obligations to the Employee under this Agreement,
except that the Company shall pay the Employee's beneficiary or estate in the
case of the Employee's death, or the Employee in the case of the Employee's
disability an amount equal to six (6) months of Employee's base salary.

        (c) Without Cause. If the Employee's employment is terminated by the
Company without Cause (pursuant to Section 7(d)) or if the Employee terminates
his employment for Good Reason, the Company's sole obligation to the Employee
under this Agreement shall be: (i) if such termination occurs within six months
of the date hereof, to pay the Employee an amount equal to $500,000 less any
base salary and bonus previously paid to the Employee for the period preceding
the date of such termination, and (ii) if such termination occurs after such six
month period, to pay the Employee a severance amount equal to $250,000.

     9. Notice. Any notices required or permitted hereunder shall be in writing
and shall be deemed to have been given when personally delivered or when mailed,
certified or registered mail, postage prepaid, to the following addresses:

                  If to the Employee:

                  Carl Rosendorf
                  43 Scotch Pine Road
                  Weston, Massachusetts 02493

                  and:

                  Hale and Dorr LLP
                  60 State Street
                  Boston, MA 02109
                  Attn:  Jay Bothwick, Esq.

                  If to the Company:

                  Retail Convergence, Inc. (d/b/a SmartBargains)
                  40 Broad Street
                  Boston, Massachusetts 02109
                  Attn:  Chief Financial Officer

                  and:

                  Hutchins, Wheeler & Dittmar
                  A Professional Corporation
                  101 Federal Street
                  Boston, Massachusetts 02110
                  Attn:  Steven M. Peck, Esq.

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     10. General.

        (a) Prior Agreements. This Agreement supersedes and replaces all prior
agreements between the Company and the Employee, and the Company shall have no
further obligations to the Employee under such prior agreements.

        (b) Governing Law. The terms of this Agreement shall be governed by the
laws of the Commonwealth of Massachusetts.

        (c) Assignability. The Employee may not assign his interest in or
delegate his duties under this Agreement.

        (d) Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the Company, its successors and assigns.

        (e) Entire Agreement; Modification. This Agreement constitutes the
entire agreement of the parties hereto with respect to the subject matter hereof
and may not be modified or amended in any way except in writing by the parties
hereto. Without limiting the generality of the foregoing, this Agreement,
together with that certain Incentive Stock Option Agreement, Stock Restriction
Agreement and letter regarding additional options, each dated as of the date
hereof, between the Employee and the Company supercedes the Company's offer
letter to you dated May 11, 2001.

        (f) Duration. Notwithstanding the term of employment hereunder, this
Agreement shall continue for so long as any obligations remain under this
Agreement.

        (g) Arbitration. Any dispute or controversy arising under or in
connection with this Agreement that cannot be mutually resolved by the parties
to this Agreement and their respective advisors and representatives shall be
settled exclusively by arbitration before one arbitrator of exemplary
qualifications and stature, who shall be selected jointly by the Employee and
the Company, or, if the Employee and the Company cannot agree on the selection
of the arbitrator, then before three arbitrators, one of which shall be
appointed by the Employee, one of which shall be appointed by the Company, and
the third of which shall be chosen by the American Arbitration Association (such
arbitrator or arbitrators hereinafter referred to as the "Arbitrator"). Judgment
may be entered on the Arbitrator's award in any court having jurisdiction,
absent manifest error. The parties hereby agree that the Arbitrator shall be
empowered to enter into an equitable decree mandating specific enforcement of
the terms of this Agreement. The Company and the Employee shall share equally
all expenses of arbitration, including the expenses of the Arbitrator, incurred
in any arbitration hereunder. In the event the Company or the Employee shall
prevail in any such arbitration, then the non-prevailing party shall bear all
expenses of the Arbitrator and all of the legal fees and out-of-pocket expenses
of the other party in such arbitration. The arbitration shall be conducted in
Massachusetts or at any other location which is mutually agreed to by the
parties.

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     IN WITNESS WHEREOF, the parties hereto, intending to be legally bound, have
hereunto executed this Agreement the day and year first written above.

                                         RETAIL CONVERGENCE, INC. (d/b/a
                                         SmartBargains)

                                         By: /s/ Donato A. DeNovellis
                                             ------------------------
                                             EVP/CFO

                                             /s/ Carl Rosendorf
                                             ------------------------
                                             Carl Rosendorf

                                    EXHIBIT A

                                   LOAN TERMS

     The Company shall loan the Employee one hundred (100%) percent of the
purchase price of any restricted shares sold to him in connection with the
Company's hiring of the Employee (the "Loan"). Twenty-five (25%) percent of the
Loan will be secured by the restricted shares and the Employee's other assets,
and seventy-five (75%) percent of the Loan will be secured solely by the
restricted stock without recourse to the Employee's other assets. The Company
agrees to seek recovery from the stock before it seeks recovery from the
Employee's other assets. The Loan will be memorialized in one or more promissory
notes (the "Notes") bearing interest at 6% payable by the Employee on demand
following the termination of his employment with the Company for any reason.
Interest only on the Notes shall be payable on a quarterly basis, beginning
three months following the effective date of the Loan. The Employee shall also
execute a security agreement(s) to secure his obligations under the Loan and the
Notes.

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                                                                    EXHIBIT 10.6

                 RETAIL CONVERGENCE, INC. DBA SMARTBARGAINS.COM

                    Stock Purchase and Restriction Agreement

     AGREEMENT made this 4th day of June, 2001, between Retail Convergence, Inc.
dba SmartBargains.com, a Delaware corporation (the "Company"), and Carl
Rosendorf (the "Employee").

     WHEREAS, the Employee is purchasing hereby Four Hundred Forty Thousand
(440,000)shares (the "Shares") of class A voting common stock, $0.01 par value
per share of the Company; and

     WHEREAS, the Employee has agreed that his ownership of the Shares shall be
subject to repurchase by the Company in the event the Employee's employment with
the Company is terminated for any reason.

     NOW THEREFORE, for valuable consideration, receipt of which is hereby
acknowledged, the parties hereto agree as follows:

1. Purchase of Shares. The Company shall issue and sell to the Employee, and the
Employee shall purchase from the Company, subject to the terms and conditions
set forth in this Agreement, Four Hundred Forty Thousand (440,000) shares (the
"Shares") of class A voting common stock, $.01 par value, of the Company
("Common Stock"), at a purchase price of $0.34089 per share. The aggregate
purchase price for the Shares shall be paid by the Employee by check payable to
the order of the Company in the amount of $4,400.00 and pursuant to a loan by
the Company of the balance of the purchase price. Upon receipt by the Company
for $149,991.60 representing payment for the Shares, the Company shall issue to
the Employee one or more certificates in the name of the Employee for that
number of Shares purchased by the Employee. The Employee agrees that the Shares
shall be subject to the purchase options set forth in Section 2 of this
Agreement and the restrictions on transfer set forth in Section 4 of this
Agreement.

2. Purchase Option.

     (a) Subject to Sections 2(b) and 2(c) below,

       (i) in the event that the Employee ceases to be employed by the Company
for any reason or no reason, with or without Cause (as defined below), prior to
June 4, 2005, the Company shall have the right and option (the "Purchase
Option") to purchase from the Employee, at a price per share equal to $0.34089
(the "Option Price"), up to the total number of Shares that have not vested
according to the following vesting schedule (the "Unvested Shares").

       (ii) 25% of the Shares shall vest on the first anniversary of the date of
this Agreement.

<PAGE>
       (iii) thereafter, 6.25% of the Shares shall vest on the first day of
September, December, March and June, starting with the first such date occurring
after the first anniversary of the date of this Agreement until such time as all
Shares are fully vested.

     (b) In the event of a "Change of Control" as defined below, then all of the
Shares which are not then vested shall become vested immediately prior to such
Change of Control. For purposes of this Stock Restriction Agreement, the term
"Change of Control" shall mean (i) any person, alone or together with its
affiliates or associates (as defined in Rule 12b-2 under the Securities Exchange
Act of 1934) shall become the beneficial owner (as defined in Rule 13d-3 under
the Securities Exchange Act of 1934), including by merger or otherwise, of more
than 50% of the total voting power of the Company; or (ii) any merger or
consolidation in which the holders of the voting securities of the Company
immediately prior thereto own less than a majority of the voting power of the
surviving corporation immediately after such merger or consolidation; in each
case excluding a Change of Control to an existing investor of the Company as of
the date hereof.

     (c) For purposes of this Agreement, employment with the Company shall
include employment with a parent or subsidiary of the Company.

     (d) For purposes of this Agreement, "cause" or "Cause" shall mean (i) any
act or omission which constitutes a material breach by the Employee of the terms
of (i) this Stock Restriction Agreement, (ii) the Employee's Incentive Stock
Option Agreement of even date, (iii) the Employee's Non-Qualified Stock Option
Agreement of even date, (iv) the Employee's Employment Agreement of even date
and/or (v) the letter of even date concerning "Additional Options"
(collectively, the "June 4, 2001 Employment Documents"), or any other agreement
between the Employee and the Company, which breach remains uncured by the
Employee for a period of thirty (30) days following the Employee's receipt of a
written notice of breach from the Company, specifying the act or omission upon
which the Company's claim of breach is based; (ii) the commission of a felony or
any dishonest or wrongful act involving fraud; (iii) the commission of an act of
moral turpitude which may adversely effect the reputation or business of the
Company as reasonably determined by the Board of Directors of the Company; or
(iv) the Employee's willful or continuing failure to perform the Employee's
duties reasonably assigned.

     (e) For purposes of this Agreement, the term "Good Reason" shall mean (i)
termination due to a material breach by the Company of the June 4, 2001
Employment Documents which breach remains uncured by the Company, if curable,
for a period of thirty (30) days following receipt of a written notice of breach
from the Employee, specifying the act or omission upon which the Employee's
claim of breach is based; (ii) the Employee's being assigned by the Company to
perform duties or responsibilities on a regular and continuing basis which are
materially different from the duties and responsibilities of a Chief Executive
Officer of an enterprise comparable to the Company; or (iii) a downgrading of
the Employee's title from Chief Executive Officer, and the Employee's election
to terminate as a result thereof. The Employee acknowledges that the Company is
a dynamic and changing enterprise, and that the Employee may be asked, from time
to time, to perform tasks which are not ordinarily performed by the Chief
Executive Officer of a more established business. Such assignments shall not
constitute Good Reason. Termination for Good Reason shall be deemed to be
termination by the Company without cause under this Agreement, including
Section 2(f).

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     (f) Upon termination of the Employee's employment by the Company without
"cause" within one year of the date hereof then, subject to the other terms and
conditions set forth in this Agreement and in the Company's 2000 Employee,
Director and Consultant Stock Option Plan (the "Plan") pursuant to which the
Shares were issued, immediately upon such termination an aggregate of 25% of the
Shares shall be Vested Shares. Except as otherwise expressly provided for in
this Stock Restriction Agreement, upon any other termination of the Employee's
employment within one year from the date hereof, or upon any termination of the
Employee's employment after the Employee's first year of employment, the
Employee shall not be entitled to any vesting following any such termination.

3. Exercise of Purchase Option.

     (a) The Company may exercise the Purchase Option with respect to Unvested
Shares by delivering or mailing to the Employee (or his estate), within 60 days
after the termination of the employment of the Employee with the Company, a
written notice of exercise of the Purchase Option. Such notice shall specify the
number of Shares to be purchased. If and to the extent the Purchase Option is
not so exercised by the giving of such a notice within such 60-day period, the
Purchase Option shall automatically expire and terminate effective upon the
expiration of such 60-day period.

     (b) The Company shall pay to the Employee the aggregate Option Price for
such repurchased Shares against delivery of the certificate or certificates
representing the Shares to be purchased by the Company. The written notice to
the Employee shall specify the address at, and the time and date on, which
payment of the Option Price for such repurchased Shares is to be made (the
"Closing"). The date specified shall not be less than ten (10) days nor more
than sixty (60) days from the date of the mailing of the notice, and the
Employee or his or her successor in interest with respect to the Shares to be so
repurchased shall have no further rights as the owner thereof from and after the
date specified in the notice. At the Closing, the Option Price for such
repurchased Shares shall be delivered to the Employee or his or her successor in
interest and the Shares being purchased, duly endorsed for transfer, shall, to
the extent that they are not then in the possession of the Company, be delivered
to the Company by the Employee or his or her successor in interest.

     (c) After the time at which the Purchase Option is exercised with respect
to any Shares, the Company shall not pay any dividend to the Employee on account
of such Shares or permit the Employee to exercise any of the privileges or
rights of a stockholder with respect to such Shares, but shall, in so far as
permitted by law, treat the Company as the owner of such Shares.

     (d) The Option Price may be payable, at the option of the Company, in
cancellation of all or a portion of any outstanding indebtedness of the Employee
to the Company or in cash (by check) or both. Notwithstanding the foregoing, if
the Employee has outstanding one or more loans for the purchase of the Shares in
favor of the Company, then unless otherwise agreed by the Employee and the
Company, the Company shall exercise the Purchase Option in full and shall apply
the payment of all amounts owed upon such exercise to the payment of such loans,
in proportion to the face amount of such loans.

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<PAGE>

     (e) The Company shall not purchase any fraction of a Share upon exercise of
the Purchase Option, and any fraction of a Share resulting from a computation
made pursuant to Section 2 of this Agreement shall be rounded to the nearest
whole Share (with any one-half Share being rounded upward).

     (f) The Company may assign its Purchase Option to one or more persons or
entities.

4. Repurchase of Vested Shares, Right of First Refusal.

     (a) Repurchase of Vested Shares. In the event of the Employee's termination
of employment for Cause or in the event of termination of employment by the
Employee voluntarily (WHICH SHALL NOT INCLUDE DEATH OR DISABILITY) for any
reason other than Good Reason, the Company shall have the option, but not the
obligation, to repurchase all or any part of the Employee's Vested Shares. In
the event the Company does not, upon any such termination of employment of the
Employee, exercise its option pursuant to this Section 4(a), the restrictions
set forth in the balance of this Agreement shall not thereby lapse, and the
Employee for himself or herself, his or her heirs, legatees, executors,
administrators and other successors in interest, agrees that the Shares shall
remain subject to such restrictions. The following provisions shall apply to a
repurchase under this Section 4(a):

     (i) The per-share repurchase price of the Vested Shares to be sold to the
Company upon exercise of its option under this Section 4(a) shall be equal to
(A) the Option Price in the event of termination of the Employee's employment
for Cause and (B) the Fair Market Value per share in the event of the Employee's
voluntary termination of his employment.

     (ii) The Company's option to repurchase the Employee's Shares in the event
of termination of employment shall be valid for a period of sixty (60) days
commencing with the date of such termination of employment.

     (iii) In the event the Company shall be entitled to and shall elect to
exercise its option to repurchase the Employee's Vested Shares under this
Section 4(a), the Company shall notify the Employee, or in case of death, his or
her representative, in writing of its intent to repurchase the Vested Shares.
Such written notice may be mailed by the Company up to and including the last
day of the time period provided for in Section 4(a)(ii) for exercise of the
Company's option to repurchase.

     (iv) The written notice to the Employee shall specify the address at, and
the time and date on, which payment of the repurchase price is to be made (the
"Closing"). The date specified shall not be less than ten (10) days nor more
than sixty (60) days from the date of the mailing of the notice, and the
Employee or his or her successor in interest with respect to the Vested Shares
shall have no further rights as the owner thereof from and after the date
specified in the notice. At the Closing, the repurchase price shall be delivered
to the Employee or his or her successor in interest and the Vested Shares being
purchased, duly endorsed for transfer, shall, to the extent that they are not
then in the possession of the Company, be delivered to the Company by the
Employee or his or her successor in interest.

     (v) If the Company's Common Stock is listed on a national securities
exchange, quoted on the Nasdaq Stock Market or traded in the over the counter
market, then for

                                       4

<PAGE>

the purposes of this Section 4(a), Fair Market Value shall mean the arithmetic
mean between the final bid and ask price per share of the Company's Common Stock
on such exchange or market on the trading day immediately prior to the date of
the Employee's termination. If the Company's Common Stock is not listed on a
national securities exchange or the Nasdaq Stock Market nor traded in the over
the counter market, then for the purposes of this Section 4(a), Fair Market
Value shall mean such value as the Board of Directors, in good faith, shall
determine, and, provided, however, that if, the Employee objects to the good
faith determination of the Board of Directors, then the Employee and the Company
shall promptly and mutually select an investment banking firm, certified public
accountant or business appraisal firm (the "Independent Appraiser") to determine
the Fair Market Value. The Company shall promptly furnish to the Independent
Appraiser such information concerning the Company's operations, assets and
properties, financial condition, earnings, capitalization and sales of its
capital stock, and any offers or indication of interest received by the Company,
as the Independent Appraiser may request or the parties may deem relevant. The
Fair Market Value as determined by the Independent Appraiser (which
determination the Independent Appraiser shall be instructed to render in writing
within thirty (30) days following the selection of such Independent Appraiser)
shall be binding upon the Employee and the Company. The fees and expenses of the
Independent Appraiser shall be borne by the Company.

     (b) Right of First Refusal. It shall be a condition precedent to the
validity of any sale or other transfer of any Shares by the Employee that the
following restrictions be complied with (except as hereinafter otherwise
provided):

     (i)  No Shares owned by the Employee may be sold, pledged or otherwise
          transferred (including by gift or devise) to any person or entity,
          voluntarily, or by operation of law, except in accordance with the
          terms and conditions hereinafter set forth.

     (ii) No Shares that are not Vested Shares may be sold or transferred.
          Before selling or otherwise transferring all or part of the Vested
          Shares, the Employee shall give written notice of such intention to
          the Company, which notice shall include the name of the proposed
          transferee, the proposed purchase price per share, the terms of
          payment of such purchase price and all other matters relating to such
          sale or transfer and shall be accompanied by a copy of the binding
          written agreement of the proposed transferee to purchase the Vested
          Shares of the Employee. Such notice shall constitute a binding offer
          by the Employee to sell to the Company such number of the Vested
          Shares then held by the Employee as are proposed to be sold in the
          notice at the monetary price per share designated in such notice,
          payable on the terms offered to the Employee by the proposed
          transferee (provided, however, that the Company shall not be required
          to meet any non-monetary terms of the proposed transfer, including,
          without limitation, delivery of other securities in exchange for the
          Vested Shares proposed to be sold). The Company shall give written
          notice to the Employee as to whether such offer has been accepted in
          whole by the Company within twenty (20) days after its receipt of
          written notice from the Employee. The Company may only accept such
          offer in 5

                                       5
<PAGE>

          whole and may not accept such offer in part. Such acceptance notice
          shall fix a time, location and date for the closing on such purchase
          ("Closing Date") which shall not be less than ten (10) nor more than
          sixty (60) days after the giving of the acceptance notice. The place
          for such closing shall be at the Company's principal office. At such
          closing, the Employee shall accept payment as set forth herein and
          shall deliver to the Company in exchange therefor certificates for the
          number of Vested Shares stated in the notice accompanied by duly
          executed instruments of transfer.

    (iii) If the Company shall fail to accept any such offer, the Employee shall
          be free to sell all, but not less than all, of the Vested Shares set
          forth in his or her notice to the designated transferee at the price
          and terms designated in the Employee's notice, provided that (i) such
          sale is consummated within six (6) months after the giving of notice
          by the Employee to the Company as aforesaid, and (ii) the transferee
          first agrees in writing to be bound by the provisions of this Section
          4(b) so that such transferee (and all subsequent transferees) shall
          thereafter only be permitted to sell or transfer the Shares in
          accordance with the terms hereof. After the expiration of such six (6)
          months, the provisions of this Section 4(b) shall again apply with
          respect to any proposed voluntary transfer of the Employee's Shares.

    (iv)  The restrictions on transfer contained in this Section 4(b) shall not
          apply to (a) transfers by the Employee to his or her family members or
          to a trust or similar estate planning vehicle for the benefit of his
          or her family members, (b) transfers by the Employee to his or her
          guardian or conservator, and (c) or transfers by the Employee, in the
          event of his or her death, to his or her executor(s) or
          administrator(s) or to trustee(s) under his or her will (collectively,
          "Permitted Transferees"); provided however, that in any such event the
          Shares so transferred in the hands of each such Permitted Transferee
          shall remain subject to this Agreement, and each such Permitted
          Transferee shall so acknowledge in writing as a condition precedent to
          the effectiveness of such transfer.

    (v)   The provisions of this Section 4(b) may be waived by the Company. Any
          such waiver may be unconditional or based upon such conditions as the
          Company may impose.

     (c) The provisions of this Section 4 shall terminate upon the effective
date of an initial public offering of the Company's securities pursuant to the
Securities Act of 1933, as amended (the "Securities Act").

5. Failure to Deliver Shares; Effect of Prohibited Transfer. In the event that
the Employee or his or her successor in interest fails to deliver the Shares to
be repurchased by the Company under this Agreement, the Company may elect (a) to
establish a segregated account in the amount of the repurchase price, such
account to be turned over to the Employee or his or her successor in interest
upon delivery of such Shares, and (b) immediately to take such action as is
appropriate to transfer record title of such Shares from the Employee to the
Company and to treat

                                       6
<PAGE>

the Employee and such Shares in all respects as if delivery of such Shares had
been made as required by this Agreement. The Employee hereby irrevocably grants
the Company a power of attorney which shall be coupled with an interest for the
purpose of effectuating the preceding sentence. The Company shall not be
required (a) to transfer on its books any of the Shares which shall have been
sold or transferred in violation of any of the provisions set forth in this
Agreement, or (b) to treat as owner of such Shares or to pay dividends to any
transferee to whom any such Shares shall have been so sold or transferred.

6. Restrictive Legends. All certificates representing Shares shall have affixed
thereto legend in substantially the following form, in addition to any other
legends that may be required under federal or state securities laws:

     "The shares of stock represented by this certificate are subject to
     restrictions on transfer and an option to purchase set forth in a certain
     Stock Restriction Agreement between the corporation and the registered
     owner of these shares (or his predecessor in interest), and such Agreement
     is available for inspection without charge at the office of the Secretary
     of the corporation."

7. Adjustments for Stock Splits, Stock Dividends, etc.

     (a) If from time to time there is any stock split, stock dividend, stock
distribution or other reclassification of the Common Stock of the Company, any
and all new, substituted or additional securities to which the Employee is
entitled by reason of his ownership of the Shares shall be immediately subject
to the purchase and repurchase options, the restrictions on transfer and the
other provisions of this Agreement in the same manner and to the same extent as
the Shares, and the Option Price shall be appropriately adjusted.

     (b) If the Shares are converted into or exchanged for, or stockholders of
the Company receive by reason of any distribution in total or partial
liquidation, securities of another corporation, or other property (including
cash), pursuant to any merger of the Company or acquisition of its assets
(including as a consequence of a Change of Control), then the rights of the
Company under this Agreement shall inure to the benefit of the Company's
successor and this Agreement shall apply to the securities or other property
received upon such conversion, exchange or distribution in the same manner and
to the same extent as to the Shares.

8. Withholding Taxes; Section 83(b) Election.

     (a) The Employee acknowledges and agrees that the Company has the right to
deduct from payments of any kind otherwise due to the Employee any federal,
state or local taxes of any kind required by law to be withheld with respect to
the purchase of the Shares by the Employee or the lapse of the Purchase Option.

     (b) The Employee acknowledges that he has been informed of the availability
of making an election in accordance with Section 83(b) of the Internal Revenue
Code of 1986, as amended; that such election must be filed with the Internal
Revenue Service within 30 days of the transfer of shares to the Employee; and
that the Employee is solely responsible for making such election.

                                       7
<PAGE>

9. No Rights To Employment. Nothing contained in this Agreement shall be
construed as giving the Employee any right to be retained, in any position, as
an employee of the Company.

10. Severability. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement, and each other provision of this Agreement shall be severable
and enforceable to the extent permitted by law.

11. Waiver. Any provision for the benefit of the Company contained in this
Agreement may be waived, either generally or in any particular instance, by the
Board of Directors of the Company.

12. Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the Company and the Employee and their respective heirs, executors,
administrators, legal representatives, successors and assigns, subject to the
restrictions on transfer set forth in Section 4 of this Agreement.

13. Notice. All notices required or permitted hereunder shall be in writing and
deemed effectively given upon personal delivery or five days after deposit in
the United States Post Office, by registered or certified mail, postage prepaid,
addressed to the other party hereto at the address shown beneath his or its
respective signature to this Agreement, or at such other address or addresses as
either party shall designate to the other in accordance with this Section 13.

14. Entire Agreement. This Agreement constitutes the entire agreement between
the parties, and supersedes all prior agreements and understandings, relating to
the subject matter of this Agreement. Without limiting the generality of the
foregoing, this Stock Restriction Agreement, together with the June 4, 2001
Employment Documents, shall supercede the Company's offer letter to you dated
May 11, 2001.

15. Amendment. This Agreement may be amended or modified only by a written
instrument executed by both the Company and the Employee.

16. Governing Law. This Agreement shall be construed, interpreted and enforced
in accordance with the internal laws of the Commonwealth of Massachusetts
without regard to any applicable conflicts of laws.

17. Plan Documents. This Agreement shall constitute a compensatory benefit plan
established by the Company for purposes of Rule 701 promulgated under the
Securities Act.

                            [signature page follows]

                                       8

<PAGE>

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.

                                       RETAIL CONVERGENCE, INC.
                                       DBA SMARTBARGAINS.COM
                                       40 Broad Street
                                       Boston, MA 02109

                                       By: /s/  Donato A. DeNovellis
                                           -------------------------------------
                                           Donato A. DeNovellis
                                           President and Chief Financial Officer

                                           /s/ Carl Rosendorf
                                           -------------------------------------
                                           Carl Rosendorf
                                           43 Scotch Pine Road
                                           Weston, MA  02493

                                       9

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