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<TEXT>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   ----------

                                    FORM 8-K

                                 CURRENT REPORT
                     PURSUANT TO SECTION 13 OR 15(d) OF THE
                       SECURITIES AND EXCHANGE ACT OF 1934

        Date of Report (Date of earliest event reported): March 21, 2005

                                  Bluefly, Inc.
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)

               Delaware                 001-14498               13-3612110
     ----------------------------      ------------       ----------------------
     (State or other jurisdiction      (Commission            (IRS Employer
          of incorporation)            File Number)       Identification Number)

     42 West 39th Street, New York, New York                      10018
     ----------------------------------------                   ---------
     (Address of principal executive offices)                   (Zip Code)

       Registrant's telephone number, including area code: (212) 944-8000


         --------------------------------------------------------------
         (Former name or former address, if changed since last report.)

        Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):

        [ ] Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425)

        [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange
Act (17 CFR 240.14a-12)

        [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))

<PAGE>

                SECTION 5 - REGISTRANT'S BUSINESS AND OPERATIONS

             ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.

On March 21, 2005, the Company entered into agreements with NewRoads, Inc.
("NewRoads"), the Company's third party warehousing and order fulfillment
services provider, pursuant to which NewRoads will continue to provide such
services to the Company for the period of July 27, 2005 to July 26, 2007 (the
"Contract Extension").

Attached as Exhibits 99.1 and 99.2, respectively, are copies of the Master
Services Agreement and Statement of Work entered into by the Company and
NewRoads in connection with the Contract Extension.

                  SECTION 9 - FINANCIAL STATEMENTS AND EXHIBITS

                  ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS

(C)  EXHIBITS

*99.1 Master Services Agreement, dated as of March 21, 2005, by and between the
Company and NewRoads.

*99.2 Statement of Work 1 by and between the Company and NewRoads.

* Confidential treatment has been requested as to certain portions of this
Exhibit. Such portions have been redacted.

<PAGE>

                                   SIGNATURES

        Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.

                                        BLUEFLY, INC.
                                        (Registrant)


Date: March 23, 2005                    By:    /s/ Patrick C. Barry
                                               ---------------------------------
                                        Name:  Patrick C. Barry
                                        Title: Chief Operating Officer and Chief
                                               Financial Officer

<PAGE>

                                INDEX TO EXHIBITS

Exhibit No.

*99.1 Master Services Agreement, dated as of March 21, 2005, by and between the
Company and NewRoads.

*99.2 Statement of Work 1 by and between the Company and NewRoads.

* Confidential treatment has been requested as to certain portions of this
Exhibit. Such portions have been redacted.
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>2
<FILENAME>bf50352ex991.txt
<TEXT>
                                                                    Exhibit 99.1

Portions of this exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions, marked "[***]," have been
separately filed with the Securities and Exchange Commission.

                            MASTER SERVICES AGREEMENT

        This Master Services Agreement (the "Agreement"), dated as of March 21,
2005, and effective as of July 27, 2005 (the "Effective Date"), by and between
NewRoads, Inc., a Delaware corporation with a principal place of business at 730
E Church St, Martinsville, Virginia 24112 ("NewRoads"), and Bluefly, Inc.
("Company"), a Delaware corporation with a principal place of business at 42
West 39th Street, New York, NY 10018.

                                    RECITALS

A.      Company has a variety of marketing programs for the sale and/or
        distribution of various merchandise and a variety of promotional
        campaigns to enhance such marketing programs; and

B.      NewRoads is a provider of various services to the direct response
        industry, including, but not limited to, order entry; data processing;
        rebate processing, sweepstakes processing, inbound telemarketing;
        customer service; pick, pack and ship; order fulfillment; warehousing
        and storage; and returns processing; and NewRoads desires to provide
        some or all of these Services to Company as more particularly described
        herein;

C.      NewRoads currently provides services to Company in connection with the
        sale of certain merchandise pursuant to a Services Agreement, dated as
        of July 27, 2000, by and between Company and NewRoads (as amended to
        date, the "Original Agreement"), which is set to expire on the Effective
        Date; and

D.      Company desires that NewRoads continue to provide such services and
        NewRoads desires to provide such services to Company on the terms set
        forth herein, effective as of the Effective Date.

        NOW, THEREFORE, in consideration of the mutual promises and conditions
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto hereby agree as
follows:

1.      DEFINITIONS. For the purposes of this Agreement, the following
        definitions shall apply:

        a.      "Actual Variable Costs" shall mean those costs, charges or
                expenses not included in Transaction Rates, which are incurred
                by NewRoads in connection with its performance of the Services,
                and are comprised of (i) all direct labor costs (including
                wages, Social Security taxes, benefits and fringe benefits) for
                employees engaged in the performance of Services whose salaries
                and benefits are not included in the calculation of the
                Transaction Rates (ii) supervisory personnel costs up to an
                amount that does not exceed [***]% of the costs referred to in
                item (i) above (the "Supervisory Allocation"), (iii) inbound and
                outbound telephone call charges, (iv) packaging, and packaging
                supplies, office and data processing supplies, (v) postage, (vi)
                common carrier, delivery, courier and other charges for
                receiving and shipping Merchandise, (vii) costs in connection
                with outsourced services referred to in an applicable Statement
                of Work, (viii) recurring costs incurred in connection with the
                provision of redundant assets or services provided to the
                Company (such as alternate redundant telephone service into the
                facility), installed or maintained for back-up or disaster
                recovery purposes and (ix) costs incurred to train employees and
                associates to handle the Company's business pursuant to the
                terms of this Agreement Actual Variable Costs do not include the
                Transaction Rates, Special Services Costs, Account Management
                Fees and Close Down

<PAGE>

                Expenses (all as more particularly described elsewhere in this
                Agreement), and the costs, charges and expenses associated with
                performing the Transaction Services, Special Services and Close
                Down Services shall not be included in calculating the Actual
                Variable Costs. In addition, Actual Variable Costs shall not
                include any costs involved in any changes in the Process
                instituted by NewRoads. The level or amount of expense to be
                incurred by NewRoads which comprise Actual Variable Costs
                includes costs, charges, and expenses incurred as a result of
                NewRoads' errors in its provision of Services, so long as such
                errors are not directly caused by NewRoads' gross negligence or
                intentional misconduct. Throughout the Term, NewRoads shall make
                its best efforts to minimize Actual Variable Costs. To the
                extent that the Actual Variable Costs incurred by NewRoads in
                the provision of Services for the Company pursuant to this
                Agreement are not identifiable as the sole and unique
                responsibility of the Company (for example, where the cost of
                labor has to be allocated between the Company and other
                companies in the facility for which NewRoads provides services)
                then, in calculating Actual Variable Costs, NewRoads shall
                utilize the allocation systems and procedures maintained from
                time to time by NewRoads (the "Allocation System") , it being
                the parties' intention that the Allocation System reflects, and
                allocates as fairly and accurately as possible, the Actual
                Variable Costs payable by the Company in respect of the Services
                performed by or on behalf of NewRoads. The calculation by
                NewRoads of Actual Variable Costs shall be available for review
                by the Company upon request therefore and with reasonable
                notice. The Allocation System shall not be construed or
                manipulated to work more in the favor of either of the parties
                hereto and against or in favor of the interests of any other
                company for whom NewRoads is providing services.

        b.      "Adjusted Actual Variable Costs" shall mean the Actual Variable
                Costs adjusted by a percentage specified in an applicable
                Statement of Work.

        c.      "Annual Forecast" shall mean a complete set of projections
                covering the operation of the Company's business for the
                applicable calendar year, including, by month and quarter, the
                forecasted number of orders; the forecasted number of units
                received and shipped; and the forecasted returns.

        d.      "Business Day" shall mean any day other than (1) a Saturday or
                Sunday or (2) a day when the Federal Reserve Bank of New York is
                not open.

        e.      "Close Down Expense" shall mean charges from NewRoads to Company
                relating to the Close Down Services.

        f.      "Close Down Services" shall mean all activities necessary to
                remove Company's Merchandise from NewRoads facilities, for
                purging the NewRoads computer system of Company Data and for
                such other activities as shall be agreed upon between NewRoads
                and Company. Other activities covered by Close Down Expenses may
                include, but are not limited to such activities, as removal of
                Merchandise from racks, packing for shipment (if necessary),
                preparing freight documents for shipment to Company's designated
                destination, loading on the trucks of Company's designated
                carrier and the transfer of any Data to systems designated by
                the Company, together with the cost of any necessary supplies.

        g.      "Competitive Business" shall mean a business that generates more
                than 20 percent of its revenues through the sale of multiple
                brands of fashion products at prices that are consistently
                discounted to retail prices, exclusive of any "sale" items.

        h.      "Count Date" shall mean the dates, established by the parties
                under the terms of this Agreement, for the executing a cycle
                count or physical inventory.

        i.      "Data" shall mean the data being stored by NewRoads in or on the
                Process with respect to the provision of Services under this
                Agreement.

                                                                               2
<PAGE>

        j.      "Estimated Variable Cost Per Order" shall mean, for each week
                during the Term, an amount equal to the Adjusted Actual Variable
                Costs, as herein defined, for the preceding calendar month,
                divided by the Gross Orders for the same calendar month.

        k.      "Fixed Fee per Order" shall mean a fixed fee, as specified in an
                applicable Statement of Work, to be paid by Company for each
                order received from Company by NewRoads. Except as otherwise set
                forth herein, the Fixed Fee per Order is intended to cover all
                fixed costs that NewRoads may incur (or for which NewRoads may
                become responsible) in performing the Services, including,
                without limitation, (1) real estate costs and real property
                taxes, (2) repairs and maintenance (including the cost of
                computer maintenance contracts and equipment and systems
                additions and upgrades, (3) security, (4) executive and
                management staff and supervisory staff in excess of the
                Supervisory Allocation and (5) building and liability insurance.

        l.      "Gross Orders" shall mean the number of orders on System Report
                SLS929, or other such report as the parties shall mutually
                agree.

        m.      "Imprest Fund" shall mean a segregated fund maintained by
                NewRoads to pay certain expenses on behalf of Company, including
                all common carrier and other delivery service shipping costs,
                packing materials, stationery and other similar expenses, as
                specified in an applicable Statement of Work.

        n.      "Merchandise" shall mean products offered for sale or
                distribution by Company.

        o.      "Merchandise Inventory Shrinkage" shall mean the quotient which
                results from dividing (1) the cumulative Merchandise Inventory
                Variance (as defined below) by (2) the total Merchandise
                inventory receipts processed by NewRoads during the prior twelve
                (12) months.

        p.      "Merchandise Inventory Variance" shall mean, as of a Count Date,
                the difference between the value of the Merchandise as
                determined from the perpetual inventory report on such Count
                Date and the value of the Merchandise established by a cycle
                count or physical inventory on such Count Date; provided,
                however, that for purposes of determining the Merchandise
                Inventory Variance, prices shall be deemed to be constant
                regardless of any intermittent price changes. The value of any
                adjustment made at any time to the perpetual inventory report
                shall be added to or subtracted from, as the case may be, the
                Merchandise Inventory Variance for the purpose of Merchandise
                calculating Merchandise Inventory Shrinkage. The value of any
                Merchandise that is damaged at the Facility by NewRoads shall be
                added to the Merchandise Inventory Variance for the purpose of
                calculating Merchandise Inventory Shrinkage.

        q.      "Non-Merchandise Inventory" shall mean packing supplies,
                stationery, inserts and other materials held by NewRoads on
                behalf of the Company that are not Merchandise.

        r.      "Non-Merchandise Inventory Shrinkage" shall mean the quotient
                which results from dividing (1) the cumulative Non-Merchandise
                Inventory Variance (as defined below) by (2) the total
                Non-Merchandise Inventory receipts processed by NewRoads during
                the prior twelve (12) months.

        s.      "Non-Merchandise Inventory Variance" shall mean, as of a Count
                Date, the difference between the value of the Non-Merchandise
                Inventory as determined from the perpetual inventory report on
                such Count Date and the value of the Non-Merchandise Inventory
                established by a cycle count or physical inventory on such Count
                Date; provided, however, that for purposes of determining the
                Non-Merchandise Inventory Variance, prices shall be deemed to be
                constant regardless of any intermittent price changes. The value
                of any adjustment made at any time to the perpetual inventory
                report shall be added to or subtracted from, as the case may be,
                the Inventory Variance for the purpose of calculating Inventory

                                                                               3
<PAGE>

                Portions of this exhibit have been omitted pursuant to a request
                for confidential treatment. The omitted portions, marked
                "[***]," have been separately filed with the Securities and
                Exchange Commission.

                Shrinkage. The value of any Non-Merchandise Inventory that is
                damaged at the Facility shall be added to the Non-Merchandise
                Inventory Variance for the purpose of calculating
                Non-Merchandise Inventory Shrinkage.

        t.      "Problem Merchandise" shall mean Merchandise shipped to
                NewRoads, which in NewRoads sole reasonable discretion, cannot
                be processed by NewRoads without imposing an unreasonable
                hardship on NewRoads. For illustrative purposes and without
                limiting the definition thereof, Problem Merchandise shall
                include all Merchandise that (i) arrives with insufficient
                paperwork, (ii) is delivered to NewRoads in the absence of a
                delivery appointment or (iii) is faulty or damaged.

        u.      "Problem Merchandise Rate" shall mean a storage rate of [***]
                times the applicable storage rate in an applicable Statement of
                Work.

        v.      "Process" shall mean all computer software, databases,
                inventions, ideas, trade secrets, methods of operation, other
                computer-related material and all procedures and processes used
                by NewRoads in connection with the performance of its
                obligations under this Agreement (including but not limited to
                those developed by NewRoads and modifications or new programs
                developed by NewRoads for Company), collectively.

        w.      "Quarterly Forecast" shall mean a complete set of projections
                covering the operation of the Company's business and demand for
                merchandise for the next succeeding two calendar quarters,
                including, by week, the forecasted number of orders and the
                forecasted number of units received and shipped each week; and
                the forecasted returns.

        x.      "Revised Quarterly Forecast" shall mean any revision to a
                Quarterly Forecast or a previous Revised Quarterly Forecast.

        y.      "Service Levels" shall mean certain standards of performance
                more fully described in a Statement of Work, which NewRoads
                shall maintain in the rendering of the Services so long as no
                default by the Company prevents NewRoads from meeting such
                standards.

        z.      "Services" shall mean the NewRoads services provided hereunder
                further specified in an applicable Statement of Work.

        aa.     "Special Services" shall mean Services not specified in any
                Statement of Work, requested by Company.

        bb.     "Term" shall mean the Initial Term and all renewal terms,
                collectively.

        cc.     "Termination Fee" shall mean a fee due to NewRoads as a result
                of the early termination of the Agreement by Company.

        dd.     "Transaction Fees" shall mean a fee due to NewRoads for the
                provision of Transaction Services.

        ee.     "Transaction Rate" shall mean the amount of a specific fee due
                to NewRoads for the provision of a specific Transaction Service.

        ff.     "Transaction Services" shall mean Services billed to Company on
                a "per unit" basis, as specified in an applicable Statement of
                Work.

                                                                               4
<PAGE>

2.      APPOINTMENT. Company hereby appoints NewRoads as a third party provider
        of Services upon the terms and conditions set forth in this Agreement.

3.      SERVICES. Company hereby engages NewRoads to provide such Services as
        are described in the attached Statements of Work or future Statements of
        Work to be entered into between the parties, and Company shall pay for
        such Services as set forth in such Statements of Work. All services will
        performed at the Martinsville, VA facility in which NewRoads currently
        performs pick, pack and ship services for the Company (the "Facility"),
        except that receiving services may be performed in the second
        Martinsville, VA facility in which NewRoads currently performs such
        services so long as NewRoads is fully responsible for any costs involved
        with transporting merchandise to and from such second facility. The
        Facility shall at all times include safe, secure, clean and adequate
        storage for all Merchandise, both bin and hanging. NewRoads will take
        commercially reasonable efforts to include adequate space in the
        Facility to support Company's projected growth during the Term, based
        upon the written forecasts provided by Company pursuant to the Statement
        of Work. Company recognizes its responsibility to support NewRoads'
        efforts to minimize space requirements.

        a.      If there is any difference between the terms and conditions of
                any Statement of Work and any other portion of this Agreement,
                the terms of the Statement of Work including any exhibits
                thereto shall control.

        b.      Any modifications to a Statement of Work shall require execution
                of a written change order agreed to and executed by both parties
                to this Agreement.

        c.      NewRoads shall not be precluded from outsourcing certain
                Services, if necessary and with the prior written consent of
                Company, which shall not be unreasonably withheld or delayed, on
                a temporary basis to providers which the parties determines to
                be reasonably acceptable, so long as (1) NewRoads remains
                primarily responsible for the providing of such out-sourced
                Services at the Service Levels and (2) the use of any such
                provider does not increase the cost of the Services to the
                Company.

4.      SERVICE LEVELS.

        a.      Certain of the Services set forth in the Statement of Work are
                subject to the Service Levels set forth in the Statement of
                Work. In circumstances where this Agreement does not stipulate a
                certain Service Level, NewRoads, and Company shall jointly agree
                upon the scope of NewRoads' obligations regarding such Service,
                and, in any event, NewRoads shall use commercially reasonable
                efforts to optimize its performance of the Services and to
                provide service levels not less than the industry norm for such
                Services.

5.      FEES AND CHARGES. In consideration for performance of the Services
        during the Term (as defined hereinafter), Company shall pay to NewRoads
        the fees and charges delineated in the applicable Statement of Work.
        These fees and charges shall include:

        a.      Transaction Fees and Rates.

                        i.      Company shall pay to NewRoads Transaction Fees
                                at the Transaction Rates set forth in the
                                Statement of Work.

                        ii.     Company shall pay NewRoads the Adjusted Actual
                                Variable Cost, as defined herein and in an
                                applicable Statement of Work.

        b.      Account Management Fees. Company shall pay to NewRoads Account
                Management Fees for account management services as specified in
                an applicable Statement of Work.

                                                                               5
<PAGE>

Portions of this exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions, marked "[***]," have been
separately filed with the Securities and Exchange Commission.

        c.      Special Services. If Company requests that NewRoads provide
                services not already defined in the Statement of Work, Company
                shall pay NewRoads at the hourly rates specified in the
                applicable Statement of Work, or a fixed amount mutually agreed
                to in writing by the parties. All such requests Services shall
                be in writing and signed by both parties.

        d.      Close Down Expenses. Upon expiration or any termination of this
                Agreement for any reason, Company shall pay Close Down Expenses
                based on the hourly rates set forth in the applicable Statement
                of Work ("Hourly Rates"). NewRoads shall provide Company a good
                faith estimate of such Close Down Expenses, prior to
                commencement of any close down activities, and the parties will
                agree in good faith upon a schedule for completion of the Close
                Down Services. NewRoads acknowledges that the success of the
                Company's business will depend upon NewRoad's ability to perform
                the Close Down Services in a professional manner and in
                accordance with the schedule for completion agreed upon by the
                parties upon a close down and that the failure to do so would
                have a material adverse effect on the Company's business and
                that, therefore, time will be of the essence.

        e.      Termination Fee. If Company terminates this Agreement prior to
                the expiration of the term for convenience pursuant to Section
                16(b)(vi), a Termination Fee shall be due. The Termination Fee,
                as specified in an applicable Statement of Work, shall be
                prorated from the date of termination to the end of the Term.

6.      PAYMENT PROCEDURE.

        a.      Invoices. The frequency of invoices shall be specified in a
                Statement of Work.

        b.      Payment Terms.

                        i.      Payment terms for Transaction Fees and Hourly
                                Rates, Adjusted Actual Variable Cost, Account
                                Management Fees and Special Services shall be
                                specified in a Statement of Work.

                        ii.     Payment terms for Close Down Expenses. [***]
                                percent ([***]%) of the estimated close down
                                expense, which NewRoads shall provide to
                                Company, must be paid 30 days before the
                                expected date on which close down will be
                                completed or before any Merchandise is removed
                                from NewRoads facility as part of close down
                                activity, whichever is earlier. The remaining
                                balance of the estimated close down expense due
                                NewRoads shall be placed by Company into an
                                Escrow Account at a bank designated by NewRoads
                                at least 30 days before the expected date on
                                which close down will be completed. NewRoads
                                shall be able to draw against such Escrow
                                Account by presenting a final invoice which
                                Company has approved. Company shall not
                                unreasonably withhold approval of such invoice.

                        iii.    Payment terms for Termination Fee. [***] percent
                                of any Termination Fee due hereunder shall be
                                due and payable seven days after the date notice
                                of such termination is provided. The balance of
                                the Termination Fee shall be placed in an Escrow
                                Account at a bank designated by NewRoads no
                                later than seven days after the date notice of
                                such termination is provided. NewRoads shall be
                                entitled to draw the balance of the Termination
                                Fee at the same time that it presents an
                                approved final invoice in order to draw the
                                remainder of the Close Down Expenses from the
                                Escrow Account as described in Section 6(b)(ii)
                                above.

                        iv.     Irrevocable Letter of Credit. If Company
                                defaults monetarily, as described under the
                                Section of this Agreement entitled, Monetary
                                Defaults, at NewRoads sole

                                                                               6
<PAGE>

                                Portions of this exhibit have been omitted
                                pursuant to a request for confidential
                                treatment. The omitted portions, marked "[***],"
                                have been separately filed with the Securities
                                and Exchange Commission.

                                discretion, Company shall provide NewRoads with
                                an irrevocable letter of credit (the "Letter of
                                Credit" or "ILOC") in an amount equal to the
                                expected total of Transaction Fees and
                                Administrative Fees for one month. As an
                                alternative, at the option of Company, Company
                                may establish a cash deposit account in the same
                                amount, funded by Company and maintained in
                                NewRoads' name (the "Deposit Account"). The
                                amount maintained in this account will initially
                                be specified in the initial Statement of Work.
                                The amount maintained in the Deposit Account or
                                the amount of the Letter of Credit will be
                                adjusted once every three (3) months so as to be
                                consistent with the average monthly billings of
                                the previous three (3) months. Upon the payment
                                in full of all fees and other amounts owed to
                                NewRoads following expiration or termination of
                                this Agreement, the money remaining in the
                                Deposit Account will be returned to Company
                                and/or the Letter of Credit shall be terminated.
                                Notwithstanding anything contained herein to the
                                contrary, NewRoads shall have a right of offset
                                against the Deposit Account or the Letter of
                                Credit for any charge owed and payable to
                                NewRoads by Company pursuant to the terms of
                                this Agreement. In the event of a distribution
                                from the Deposit Fund to or a drawing down of
                                the Letter of Credit by NewRoads during the Term
                                as provided in this Section, Company shall
                                restore the Deposit Fund or the Letter of Credit
                                to the required level within fifteen (15) days
                                after receipt of notice by NewRoads of any such
                                distribution. Failure to comply with this clause
                                shall constitute a material breach by Company.

7.      IMPREST FUND. At any time during the term of this Agreement, Company may
        establish and maintain with NewRoads an Imprest Fund. NewRoads shall pay
        such expenses therefrom so long as and to the extent that a balance
        remains therein. Company and NewRoads shall agree in advance upon which
        costs and charges are to be paid from the Imprest Fund, it being
        understood that such list of charges may change from time to time
        according to Company's business needs and NewRoads' operations. If the
        Imprest Fund is insufficient to cover such expenses, NewRoads may, in
        its sole discretion: (a) upon request of Company, pay the expenses and
        immediately invoice Company for the amount of expenses incurred plus a
        [***] percent mark-up, and such invoice amount shall be payable within
        five Business Days after receipt; or (b) following five (5) Business
        Days after providing Company with written notice of insufficient funds
        in the Imprest Fund (and the Imprest Fund has not during such time been
        restored in full), elect not to pay the expenses, and if NewRoads so
        elects not to pay the expenses, it shall have no liability whatsoever
        for any losses or liabilities incurred by Company for such nonpayment.
        In addition, if the Imprest Fund is being used to cover the costs of
        common carrier and other delivery service shipping, NewRoads may suspend
        shipping if the available funds are insufficient to pay additional
        shipping charges. NewRoads shall provide Company with a weekly statement
        setting forth the balance of, and accounting for disbursements from, the
        Imprest Fund.

8.      INVENTORY. All Merchandise in the possession of NewRoads shall be and
        remain the exclusive property of Company and NewRoads acknowledges and
        agrees that it shall require no right, title or interest in or to the
        Merchandise by reason of this Agreement. Merchandise inventory shall be
        handled and processed as follows:

        a.      Company shall, at its own expense, supply NewRoads at the
                Facility, and maintain with NewRoads, an inventory of
                Merchandise which Company reasonably believes is adequate in the
                ordinary course of business to fill orders received for its
                Merchandise consistent with its Quarterly Forecasts or Revised
                Quarterly Forecasts. NewRoads shall use commercially reasonable
                efforts to preserve and maintain Merchandise received for
                Company in good and marketable condition.

                                                                               7
<PAGE>

9.      SECURITY INTEREST AND LIENS.

        a.      Company acknowledges that NewRoads may haves a warehousemen's
                statutory lien on the Merchandise, as provided for by the laws
                of the States in which the Merchandise is being warehoused.

10.     RISK OF LOSS.

        a.      As between Company and NewRoads, all risk of loss and damage to
                Merchandise from any cause prior to receipt by NewRoads into,
                and from and after the removal by common carrier from, the
                inventory at the NewRoads Facility shall be borne by Company.
                Any loss or damage by fire or casualty to Merchandise on the
                premises of NewRoads shall be borne by Company. NewRoads shall
                reimburse Company at Company's net Merchandise cost as specified
                in an applicable Statement of Work for Merchandise Inventory
                Shrinkage, which calculation shall be made once annually on such
                date as may be mutually agreed between the parties.

        b.      As between Company and NewRoads, all risk of loss and damage to
                Non-Merchandise Inventory from any cause prior to receipt by
                NewRoads into, and from and after the removal by common carrier
                from, the inventory at the NewRoads Facility shall be borne by
                Company. Any loss or damage by fire or casualty to
                Non-Merchandise materials on the premises of NewRoads shall be
                borne by Company. NewRoads shall reimburse Company at Company's
                net cost as specified in an applicable Statement of Work for
                Non-Merchandise Inventory Shrinkage, which calculation shall be
                made once annually on such date as may be mutually agreed
                between the parties.

11.     COLLECTIONS. Notwithstanding anything contained herein to the contrary,
        the parties acknowledge that NewRoads shall not be required to make any
        collection efforts on Company's behalf and shall share no risk with
        respect to any failure of Company to collect payment for any customer
        order.

12.     TAXES. All fees, costs, charges and other amounts payable to NewRoads
        hereunder for Services rendered by NewRoads to Company are exclusive of
        applicable taxes, if any, which (other than income taxes of NewRoads)
        are the responsibility of Company. In addition, NewRoads shall calculate
        for each customer sale all applicable sales taxes based on information
        supplied by Company. A list of all the jurisdictions in which Company is
        required to collect sales taxes shall be included in the Statement of
        Work, which Company shall promptly update as required to keep such
        information current during the Term, and Company shall be solely
        responsible for the accuracy of such information. Company shall be
        responsible for the collection and payment of all sales taxes, the
        preparation and filing of all sales tax documentation and the compliance
        with all sales tax laws. NewRoads shall have no such responsibilities
        for payment or collection of any such taxes unless otherwise required by
        law. Company shall indemnify NewRoads for all claims, suits, actions,
        debts, damages, costs, charges and expenses, including court costs and
        attorneys' fees, incurred by NewRoads as a result of Company's failure
        properly and timely to file and pay applicable taxes.

13.     MONETARY DEFAULT. If Company is in breach of the terms governing the
        payment of any fees, charges, invoices or other amounts due hereunder to
        NewRoads (hereinafter, a "Monetary Obligation"), and such Monetary
        Obligation is not the subject of a Dispute Notice (as defined below),
        NewRoads shall at its discretion (i) charge a finance charge of one and
        one half percent per month of such past due fees, charges, invoices or
        other amounts and (ii) upon twenty (20) Business Days prior written
        notice terminate this Agreement unless Company cures such default within
        such 20 Business Days of receiving such notice, provided that the
        finance charge set forth in (i) hereof shall continue on all outstanding
        balances. If Company in good faith disputes any amount billed (a
        "Monetary Dispute") and reports its reasons therefor to NewRoads in
        writing (a "Dispute Notice"), NewRoads and Company agree to work
        diligently to resolve the dispute

                                                                               8
<PAGE>

        within 15 Business Days after the receipt of such written notice by
        NewRoads, provided, however, that (i) during such period NewRoads shall
        continue to perform the Services in accordance with the terms of this
        Agreement, and (ii) Company shall be current in and shall continue to
        make payments to NewRoads relating to all amounts hereunder, other than
        such amount that is subject to the Dispute Notice and (iii) in the event
        that NewRoads and Company are unable to resolve the Monetary Dispute,
        then the amount in dispute shall be deposited into escrow with an escrow
        agent mutually acceptable to both NewRoads and Company until such
        dispute is resolved in accordance with Section 29. Failure to resolve
        such dispute during such time period (or to place the disputed amount in
        escrow as set forth above) shall allow NewRoads to terminate the
        Agreement, subject to all other terms and provisions hereof, and to seek
        all available legal remedies.

14.     OTHER DEFAULTS. If either Company or NewRoads believes the other party
        is in material breach of any of its non-monetary obligations under this
        Agreement as a result of any reason other than force majeure, the party
        believing that such a breach by the other party has occurred shall give
        written notice to the other party declaring a breach of this Agreement
        and specifying the nature of the breach. The breaching party shall have
        20 days in which to cure such breach; provided, however, that with
        respect to a material breach relating to the taking of telephone calls,
        emails, the processing of orders, the receiving of Merchandise into
        inventory or timely delivery of Merchandise to common carriers for
        shipment, NewRoads shall have seven Business Days to cure such breach.

15.     FORCE MAJEURE. Neither NewRoads nor Company shall be liable for any
        delay or failure in performance under this Agreement or interruption of
        service resulting, directly or indirectly, from acts of God, civil or
        military authority, acts of public enemies, acts of terrorism, war,
        accidents, fire, explosions, earthquakes, floods, the elements or any
        similar cause beyond the reasonable control of such party (a "Force
        Majeure"), so long as, following the cessation of such cause, such party
        uses its reasonable efforts to resume its performance hereunder. If
        NewRoads is unable to perform the Services due to a Force Majeure, then
        NewRoads may out-source Services on a temporary basis pursuant to the
        Section of this Agreement entitled, Services. Other than in connection
        with the closing of banks and/or financial markets, Force Majeure shall
        not be an excuse for Company not meeting any financial obligation
        hereunder with respect to the timely payment for services.

16.     TERM AND TERMINATION.

        a.      Term. The term of this Agreement shall run concurrently with the
                Term of any Statement of Work referenced to this Agreement (the
                "Term").

        b.      Early Termination. This agreement may be terminated prior to the
                end of the Term upon the occurrence of any of the following,
                provided that any amounts owing to NewRoads through the date of
                termination (including any Close-Down Expenses and Termination
                Fees) shall be payable to NewRoads notwithstanding any such
                early termination:

                        i.      Monetary Default. NewRoads shall have the
                                termination rights described in the Section of
                                this Agreement entitled Monetary Default.

                        ii.     Bankruptcy. Either party may terminate this
                                Agreement, effective immediately upon giving
                                written notice if the other party files a
                                petition in bankruptcy or files for a
                                reorganization or for the appointment of a
                                receiver or trustee of all or substantially all
                                of such party's property, or makes an assignment
                                or petitions for or enters into an arrangement
                                for the benefit of creditors, or if a petition
                                in bankruptcy is filed against the other party
                                which is not discharged within 90 days
                                thereafter.

                                                                               9
<PAGE>

Portions of this exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions, marked "[***]," have been
separately filed with the Securities and Exchange Commission.

                        iii.    Force Majeure. In the event that following a
                                Force Majeure, NewRoads (with out-sourcing) is
                                unable to perform at the Service Levels for a
                                period in excess of 20 Business days, Company
                                shall have the right to terminate this
                                Agreement.

                        iv.     Non-Monetary Default. A material default by
                                either party pursuant to the Section 16 of this
                                Agreement entitled Other Defaults, which is not
                                cured within the time periods stated therein,
                                shall entitle the non-breaching party to
                                terminate the Agreement.

                        v.      Service Deficiency. In the event that NewRoads
                                receives [***] Service Deficiency Notices during
                                any consecutive [***] month period during the
                                term hereof, Company may, within sixty (60) days
                                of the third such deficiency, terminate this
                                Agreement upon thirty (30) days prior written
                                notice to NewRoads. For purposes hereof, a
                                "Service Deficiency Notice" shall mean a written
                                notice from Company that NewRoads has failed to
                                perform a Service in accordance with the Service
                                Levels. In respect of Service Levels measured on
                                a daily basis, NewRoads shall not be deemed to
                                have failed to meet any such Service Level
                                unless and until such failure continues for more
                                than [***] out of any [***] consecutive Business
                                Days.

                        vi.     Termination for Convenience. Company shall be
                                entitled to terminate this Agreement for
                                convenience, but shall be required to pay the
                                Termination Fee as set forth above in connection
                                with any such termination.

                        vii.    If this Agreement is terminated as provided for
                                under this paragraph entitled, Monetary Default,
                                NewRoads shall continue to provide Services to
                                Company on a Pre-Paid basis for a period not to
                                exceed 150 days following the effective date of
                                such termination. Pre-Paid means Company shall
                                pre-pay to NewRoads the expected billings for
                                such week, which shall be subsequently
                                reconciled once each month. If Company is not
                                willing to make pre-payments, then NewRoads will
                                not be obligated to provide any Services and
                                will be entitled to exercise any and all
                                remedies for termination provided for under this
                                Agreement or otherwise available under
                                applicable law.

17.     REPRESENTATIONS AND WARRANTIES.

        a.      NewRoads and Company. NewRoads and Company each hereby
                individually represent and warrant that: (i) it has the full
                authority and legal right to carry out the terms of this
                Agreement; (ii) the terms of this Agreement will not violate the
                terms of any agreement, contract or other instrument to which it
                is a party, and no consent or authorization of any other person,
                firm or corporation is a condition precedent to this Agreement;
                (iii) it has taken all action necessary to authorize the
                execution and delivery of this Agreement; and (iv) this
                Agreement is a legal, valid, and binding obligation of NewRoads
                and Company, as the case may be, enforceable in accordance with
                its terms, except as limited by bankruptcy and other laws of
                general application relating to or affecting the enforcement of
                creditors' rights.

        b.      Company. Company hereby represents and warrants that:

                        i.      It has, to the best of its knowledge, and will
                                use its commercially reasonable efforts to
                                continue to have for the Term, all necessary
                                authority from all of the corporations,
                                partnerships and individuals whose products are
                                offered for sale by Company, to use their
                                trademarks, service marks and other intellectual
                                property for the purposes of conducting
                                Company's business. Company's business as
                                conducted or as currently proposed to be
                                conducted does not and will not cause Company to
                                infringe or

                                                                              10
<PAGE>

                                violate any patents, trademarks, service marks,
                                trade names, copyrights, licenses, trade secrets
                                or other intellectual property rights of any
                                other person or entity.

                        ii.     It owns the Merchandise inventory free and clear
                                of all liens, restrictions, claims, charges,
                                security interests or other encumbrances of any
                                nature whatsoever, including any chattel
                                mortgages, conditional sales contracts,
                                collateral security arrangements and other title
                                or interest retention arrangements
                                (collectively, "Liens"), other than Liens
                                granted to Rosenthal & Rosenthal, Inc. in
                                connection with Company's credit facility.

                        iii.    Its assets exceed its liabilities, it is able to
                                pay its debts as they mature, and it is
                                adequately capitalized.

        c.      NewRoads. NewRoads hereby represents and warrants that:

                        i.      NewRoads performance of the Services does not
                                and will not cause NewRoads to infringe or
                                violate any patents, trademarks, service marks,
                                trade names, copyrights, licenses, trade secrets
                                or other intellectual property rights of any
                                other person or entity.

                        ii.     Its assets exceed its liabilities, it is able to
                                pay its debts as they mature, and it is
                                adequately capitalized.

18.     INDEMNIFICATION

        a.      NewRoads shall indemnify, defend and hold Company and its
                officers, directors, employees, shareholders and affiliates
                harmless from and against any and all claims, suits, actions,
                debts, damages, injuries, costs, charges, and expenses,
                (including without limitation court costs and reasonable
                attorneys' fees), which Company may at any time incur by reason
                of or related to (i) injury or damage sustained during, or as a
                result of, the performance of the Services, (ii) any claim made
                by an employee or former employee of NewRoads or any of its
                subcontractors or affiliates relating to employment or workers'
                compensation laws or (iii) a breach of this Agreement by
                NewRoads.

        b.      Company shall indemnify, defend and hold NewRoads and its
                officers, directors, employees, shareholders and affiliates
                harmless from and against any and all claims (including claims
                by third party providers engaged by Company), suits, actions,
                debts, damages, injuries, costs, charges, and expenses,
                including without limitation court costs and reasonable
                attorneys fees, which NewRoads may at any time incur arising
                from or related to (i) use or consumption of the Merchandise,
                including without limitation use or consumption of Merchandise
                that contains or is claimed to contain a defect or (ii) a breach
                of this Agreement by Company.

        c.      The indemnification provisions of this Section 18 apply only to
                claims made against either party hereto by any third party
                (including any claims made by an employee of either party in a
                personal capacity) and not to any claims made by either party
                hereto against the other. A party hereto seeking indemnity
                hereunder is referred to as the "Indemnified Party" and the
                other party to which indemnity is sought hereunder is referred
                to herein as the "Indemnifying Party." An Indemnified Party
                under this Agreement shall with respect to claims asserted
                against such party by any third party, give prompt written
                notice to the Indemnifying Party of any liability which might
                give rise to a claim for indemnity under this Agreement;
                provided, however, that any failure to give such notice will not
                waive any rights of the Indemnified Party except to the extent
                the rights of the Indemnifying Party are materially prejudiced.
                The Indemnifying Party shall have the right, at its election, to
                take over the defense or settlement of such claim by giving
                written notice to the Indemnified Party at least 15 days prior
                to the time that an answer or other responsive pleading or
                notice with respect thereto is required or ten days after
                notice, whichever is later. If the Indemnifying Party makes such
                election, it may

                                                                              11
<PAGE>

                conduct the defense of such claim through counsel of its
                choosing (subject to the Indemnified Party's approval of such
                counsel, which approval shall not be unreasonably withheld or
                delayed) and shall be solely responsible for the expenses of
                such defense and shall be bound by the results of its defense or
                settlement of the claim. The Indemnifying Party shall not settle
                any such claim without prior notice to and consultation with the
                Indemnified Party, no such settlement involving any equitable
                relief or which might have an adverse effect on the Indemnified
                Party may be agreed to without the written consent of the
                Indemnified Party (which consent shall not be unreasonably
                withheld or delayed). So long as the Indemnifying Party is
                diligently contesting any such claim in good faith, the
                Indemnified Party may pay or settle such claim only at its own
                expense and the Indemnifying Party will not be responsible for
                the fees of separate legal counsel to the Indemnified Party,
                unless the named parties to any proceeding include both parties
                and representation of both parties by the same counsel would be
                inappropriate. If the Indemnifying Party does not make such
                election, or having made such election does not, in the
                reasonable opinion of the Indemnified Party proceed diligently
                to defend such claim, then the Indemnified Party may (after
                written notice to the Indemnifying Party), at the expense of the
                Indemnifying Party, take over the defense of and proceed to
                handle such claim in its discretion and the Indemnifying Party
                shall be bound by any defense or settlement that the Indemnified
                Party may make in good faith with respect to such claim. The
                parties agree to cooperate in defending such third party claims
                and the Indemnified Party shall provide such cooperation and
                such access to its books, records and properties as the
                Indemnifying Party shall reasonably request with respect to any
                matter for which indemnification is sought hereunder; and the
                parties hereto agree to cooperate with each other in order to
                ensure the proper and adequate defense thereof with regard to
                claims of third parties for which indemnification is payable
                hereunder, such indemnification shall be paid by the
                Indemnifying Party upon the earlier to occur of:

                        i.      the entry of a non-appealable judgment against
                                the Indemnified Party and the expiration of any
                                applicable appeal period, or if earlier, five
                                days prior to the date that the judgment
                                creditor has the right to execute the judgment;

                        ii.     a settlement of the claim, provided that if a
                                judgment or settlement provides that payments
                                may be made in installments, that the
                                indemnification payments required -to be made
                                hereunder in connection therewith shall be
                                payab1e in a like manner.

        d.      Notwithstanding the foregoing, providing that there is no
                dispute as to the applicability of indemnification, the
                reasonable expenses of counsel to the Indemnified Party shall be
                reimbursed on a current basis by the Indemnifying Party if such
                expenses are a liability of the Indemnifying Party. With regard
                to other claims for which indemnification is payable hereunder,
                such indemnification shall be paid promptly by the Indemnifying
                Party upon demand by the Indemnified Party.

19.     LIMITATION OF LIABILITY.

        a.      Notwithstanding any other provision of this agreement, neither
                party shall be liable to the other for any special, incidental,
                punitive or consequential damages of any nature whatsoever, even
                if that party has been previously notified of the possibility of
                such damages.

        b.      Other than for indemnification claims pursuant to Section 17,
                any successful claim for actual damages against either party
                shall be limited to the amounts paid under this agreement.

20.     INSURANCE. NewRoads shall not be responsible for the provision or
        maintenance of any insurance coverage for the Merchandise or other
        inventory or for Company or its subsidiaries or respective businesses,
        products, goods and property. NewRoads agrees to maintain at all times
        during the Term insurance with the coverages and at the levels currently
        in place, with insurers qualified to do business in the state of where
        the Services are performed.

                                                                              12
<PAGE>

21.     PROCESS; INTELLECTUAL PROPERTY.

        a.      Company acknowledges that NewRoads owns all right, title and
                interest in and to, or is licensed to use, the Process and that
                Company has no right or interest whatsoever in such Process
                unless jointly developed and agreed upon in writing by both
                parties in advance of said joint development.

        b.      NewRoads acknowledges that Company owns all right, title and
                interest in the Data, and NewRoads has no right or interest
                whatsoever in such Data. NewRoads further agrees to enact
                commercially reasonable measures to protect the confidentiality
                of such Data in accordance with industry standards.

        c.      NEWROADS(R) is a registered service mark owned by NewRoads. No
                rights to the use of NewRoads' service marks are granted herein,
                and any right to use NewRoads' marks, subsequently granted, will
                terminate immediately upon the termination of this Agreement. If
                Company is subsequently granted the right to use any of
                NewRoads' service marks, Company shall use NewRoads' marks
                strictly in accordance with the quality control and trademark
                usage policies of NewRoads. Failure to comply with such policies
                will result in termination of the right to use such marks.

        d.      Company's service marks are owned by Company. No rights to use
                of Company's marks are granted herein, and any right to use
                Company marks, subsequently granted, will terminate immediately
                upon the termination of this Agreement. NewRoads shall use
                Company's marks only and strictly in accordance with the quality
                control and trademark usage policies of Company. Failure to
                comply with such policies will result in termination of the
                right to use such marks.

22.     ACTS OF TERRORISM OR HAZARDOUS SUBSTANCES. The Company shall give to
        NewRoads policies and procedures to follow in the event that of any acts
        of terrorism or consumer complaints with respect to hazardous
        substances. Provided NewRoads follows such policies and procedures,
        NewRoads shall have no liability to the Company arising from such any
        acts of terrorism, hazardous substance or consumer complaint, and the
        Company shall expressly defend, indemnify and hold harmless NewRoads
        from any all claims, damages, demands, causes of action, losses,
        liabilities, injuries, costs and expenses (including reasonable
        attorney's fees) arising from such an event.

23.     COMPLIANCE WITH LAWS. Company and NewRoads shall comply with all laws,
        rules and regulations, whether local, state, or federal, applicable to
        the sale of Merchandise and to the providing of Services, respectively.

24.     INSPECTIONS AND AUDITS. Company or its agents shall, during normal
        business hours and upon reasonable, advance notice, have the right to
        inspect the Merchandise located at NewRoads' place of business and audit
        the books and records of NewRoads pertaining to Merchandise and the
        Services rendered by NewRoads to Company pursuant to this Agreement;
        provided, however, that such audit of books and records shall occur no
        more frequently than twice per calendar year and then shall cover only
        the period not included in a prior audit and shall not unreasonably
        interfere with NewRoad's business.

25.     CONFIDENTIALITY; NON-SOLICITATION.

        a.      In the course of its performance of this Agreement, it is
                anticipated that NewRoads and Company will come into possession
                of certain proprietary information belonging to the other,
                including but not limited to

                                                                              13
<PAGE>

                        i.      in the case of Company, its Data, financial
                                condition, forecasts, marketing records,
                                merchandising records, vendor information, sales
                                records, customer records, customer files,
                                general business plans and other confidential or
                                proprietary information and

                        ii.     in the case of NewRoads, its financial
                                condition, cost structures, staffing levels,
                                systems information, monitoring records,
                                customer records, customer files, trade secrets,
                                sales forecasts, general business plans and
                                other confidential or proprietary information
                                (all such information relating to Company or
                                NewRoads being "Confidential Information" and
                                the party to whom such Confidential Information
                                relates being the "Proprietary Party").

        b.      NewRoads and Company agree that each will not, during the Term
                hereof and five years thereafter, furnish, disclose, or make
                accessible to any third party (other than their respective
                officers, directors, shareholders, agents, advisors and
                affiliates) any of the other's Confidential Information unless
                otherwise instructed by the Proprietary Party in writing;
                provided, however, that Confidential Information shall not
                include any information which

                        i.      at the time of disclosure by the other party is
                                generally available to and known by the public
                                other than as a result of its disclosure by such
                                party,

                        ii.     was available to the other party on a
                                non-confidential basis from a source other than
                                the Proprietary Party, provided that such source
                                is not bound by a confidentiality agreement, or
                                contractual or fiduciary obligation with the
                                Proprietary Party, or

                        iii.    has been independently acquired or developed by
                                the other party without violating any
                                obligations under this Agreement, or of any
                                other agreement between Company and NewRoads.

        c.      NewRoads agrees that Company's customer files will not be made
                available for use by anyone other than Company, without
                Company's specific prior written permission for each occurrence
                of such use.

        d.      The parties agrees that they will not at any time during the
                Term or within three years after the termination or expiration
                of this Agreement, solicit, interfere with, employ or endeavor
                to entice away from the other party (or any subsidiary or
                affiliate of the other party) any person who was employed by the
                other party during the Term and remains employed by the other
                party at the time of such solicitation.

        e.      NewRoads shall not enter into any agreement with any actual or
                potential client that would prohibit or limit its ability to
                provide services to Company under this Agreement or any
                extension hereof.

        f.      The parties mutually agree that any breach of the provisions of
                this Section 25 shall cause irreparable harm to the
                non-breaching party and that, in the event of such breach, the
                non-breaching party shall have, in addition to any and all
                remedies pursuant to this Agreement, the right to an injunction,
                specific performance or other equitable relief.

26.     NOTICES. Any and all notices and all communication provided for in this
        Agreement shall be given in writing. Such notices and other
        communications shall be deemed given when received, when delivered by
        hand, by confirmed facsimile transmission or when deposited in the
        United States Mail, Registered or certified, with proper postage
        prepaid, and addressed as specified in the Statement of Work, or to such
        other address as NewRoads or Company may designate to the other in
        writing.

                                                                              14
<PAGE>

27.     ASSIGNMENT. This Agreement shall inure to the benefit of and be binding
        upon the parties and their successors and permitted assigns. This
        Agreement may not be assigned by either party without the prior written
        consent of the other party; provided, however, that either party may
        assign this Agreement to any person, firm or corporation that purchases
        all or substantially all of the stock or assets of either party or to
        any person, firm or corporation into which or with which either party
        consolidates or merges and provided further that either party may assign
        this agreement to any of its affiliates, subsidiaries, or its parent
        company without the other party's prior written consent.

28.     AMENDMENTS. This Agreement shall not be modified or amended except by a
        written agreement signed by authorized representatives of NewRoads and
        Company.

29.     DISPUTES; ARBITRATION. Any controversy or claim arising out of or
        relating to this Agreement or the breach thereof, whether common law or
        statutory, shall be settled exclusively by arbitration in New York using
        the American Arbitration Association. The arbitration shall be heard
        before three arbitrators. The arbitrators shall apply the internal law
        of the State of New York in determining the rights, obligations, and
        liabilities of the parties. The arbitrators shall not have the power to
        alter, modify, amend, add to or subtract from any term or provision to
        this Agreement, nor to grant injunctive relief, including interim
        relief, of any nature. Such injunctive relief may be pursued by NewRoads
        or Company, as the case may be, from the federal and state courts
        located in New York. The availability of such relief shall depend upon
        proofs and showings required under the applicable law. In all other
        respects, the commercial rules of the American Arbitration Association
        shall govern the arbitration. Judgment on the award of the arbitrators
        may be entered by any court having jurisdiction to do so, and the
        parties to the Agreement hereby irrevocably consent and submit to the
        personal jurisdiction of the federal and state courts of the State of
        New York for this purpose as well as for any and all other purposes in
        connection with this Agreement. The failure or refusal of either party
        to submit to arbitration as provided in this Agreement shall constitute
        a breach of this Agreement. If judicial action is commenced in order to
        compel arbitration, and if arbitration is in fact compelled, the party
        that shall have resisted arbitration shall be required to pay to the
        other party all costs and expenses, including reasonable attorneys'
        fees, that it incurs in compelling arbitration. All other fees and
        charges of the American Arbitration Association shall be borne as the
        arbitrators shall determine in their award.

30.     RELATIONSHIP. Nothing contained in this Agreement shall be construed to
        imply a joint venture, partnership or principal/agent relationship
        between the parties. Except as specifically set forth herein, neither
        party by virtue of this Agreement shall have any right, power or
        authority to act or create any obligations, express or implied, on
        behalf of, or for the use of the other party, and NewRoads and Company
        shall not be obligated, separately or jointly, to any third party by
        virtue of this Agreement.

31.     HEADINGS. The headings and section numbers appearing in this Agreement
        are inserted only as a matter of convenience and in no way define,
        limit, construe or otherwise describe the scope or intent of the
        sections of this Agreement.

32.     SEVERABILITY. If any one or more provisions of this Agreement shall be
        invalid, illegal or unenforceable in any respect, the validity, legality
        and enforceability of the remaining provisions contained herein shall
        not in any way be affected or impaired; provided, however, that in such
        case the parties agree to use their commercially reasonable efforts to
        achieve the purpose of the invalid provision by a new legally valid
        provision.

33.     NO WAIVER. No failure or delay on the part of any party in the exercise
        of any right hereunder shall operate as a waiver thereof, nor shall any
        single or partial exercise of any such right preclude any other or
        further exercise thereof or of any other right. All rights and remedies
        under this Agreement are cumulative to, and not exclusive of, any rights
        or remedies otherwise available.

                                                                              15
<PAGE>

34.     FULL AGREEMENT. This Agreement, any exhibits and addenda attached
        hereto, properly executed Statements of Work, orders for Special
        Services and properly delivered notices, contain and embody the entire
        agreement of the parties hereto, and no representations, inducements, or
        agreements, oral or otherwise made at any time between the parties or
        with any third party relating to the subject matter hereof which are not
        contained in this Agreement or in the exhibits or addenda, if any, shall
        be of any force or effect. The parties acknowledge and agree that the
        Original Agreement will expire in accordance with its terms as of the
        Effective Date (other than any terms thereof that, in accordance with
        the Original Agreement, survive expiration or termination) and that, as
        of such time, this Agreement shall govern the terms and conditions of
        the performance of the Services by NewRoads. Until the Effective Date,
        the Original Agreement shall govern the terms and conditions of the
        performance of the Services by NewRoads.

35.     COUNTERPARTS. This Agreement may be executed in one or more
        counterparts, all of which taken together shall be deemed one original.

36.     JOINT MARKETING. Company will provide a statement to be used in a
        NewRoads press release, which announces the choice of NewRoads to
        provide Services. Company authorizes NewRoads to use Company's logo on
        the NewRoads website, at tradeshows and events and on marketing
        collateral. NewRoads and Company may participate in other joint press
        releases, as deemed appropriate, when mutually agreed to by both
        companies.

                                                                              16
<PAGE>

IN WITNESS WHEREOF, Company has executed this Agreement effective the date first
above written and NewRoads has executed and accepted this Agreement effective
the same date.

NEWROADS, INC.                               BLUEFLY, INC. ("COMPANY")

By:     /s/ David P. Himes                   By:    /s/ Patrick C. Barry
        -------------------------                   ----------------------------
Name:   David P Himes                        Name:  Pat Barry


Title:  Senior Vice President                Title: Chief Operating Officer and
                                                    Chief Financial Officer

Date: March 21, 2005                         Date: March 21, 2005

                                                                              17
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.2
<SEQUENCE>3
<FILENAME>bf50352ex992.txt
<TEXT>
                                                                    Exhibit 99.2

        Portions of this exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions, marked "[***]," have been
separately filed with the Securities and Exchange Commission.

                               STATEMENT OF WORK 1

The following Statement of Work ("Statement of Work") includes terms of and
incorporates by reference the Master Service Agreement between NewRoads Inc.
("NewRoads") and Bluefly, Inc. ("Company") dated July 27, 2005 ("Master Services
Agreement").

This Statement of Work is effective as of July 27, 2005 ("Effective Date").

1.      TERM. The initial term of this Agreement shall commence on July 27, 2005
        (the "Commencement Date"), continue for two years and shall expire on
        July 26, 2007 (the "Expiration Date") unless earlier terminated in
        accordance with this Section or elsewhere in this Agreement (the
        "Initial Term"). This Agreement shall automatically be renewed for
        successive one-year terms (each, a "Renewal Term," and, together with
        the Initial Term, the "Term") commencing after the expiration of the
        Initial Term or Renewal Term unless NewRoads or Company provides the
        other with at least 120 days prior written notice of its election to
        terminate this Agreement at the end of the Initial Term or Renewal Term
        (as applicable). Thereafter, the Term may be extended only by agreement
        of the parties signed by both parties.

2.      SERVICES. The Services shall include the following services plus any
        Special Services and other services for which the parties shall have
        agreed and for which either Transaction Fees or other Fees have been
        established:

    a.  Transaction Services: The following services are provided to Company by
        NewRoads. The parties acknowledge and agree that the services described
        below are all of the services currently provided by NewRoads to Company
        under the Original Agreement. Services not specifically listed may, or
        may not, be available from NewRoads, but regardless, are specifically
        not provided. Any change to this list of Services requires establishment
        of an appropriate Fee.

        i.      Client Services

            1)      Provide skilled and knowledgeable management personnel to
                    coordinate and direct internal operations and insure
                    execution of Company's business is accordance with Company's
                    rules and standards, as agreed. Assign a mutually acceptable
                    Account Manager, who shall act as the principal day-to-day
                    liaison between the parties.

            2)      Maintain Promotional & Product data for sales, marketing and
                    reporting purposes.

            3)      Make available to the Company an agreed set of reports and
                    information (the "Reports") via a telecommunications link at
                    such times and at such schedule as the parties shall agree.

            4)      Develop customized reports to Company's specifications.

            5)      Manage an Imprest Fund for certain pass-through &
                    reimbursable expenses as specified in this or a subsequent
                    Statement of Work

            6)      Provide new program start-up services as agreed between the
                    parties.

                                                                    Page 1 of 12
<PAGE>

            7)      Upon termination of Agreements, provide close down services
                    as necessary to remove Company Merchandise and Data from
                    NewRoads systems and facilities.

            8)      Coordinate business reviews involving Company and NewRoads,
                    as may be appropriate.

            9)      Make staff available for merchandise and web site training
                    at the Company's reasonable request.

            10)     Maintain and operate a drop ship and affiliate partner
                    program as agreed between the parties.

            11)     On behalf of the Company, make payments from the Imprest
                    Fund for invoices approved by the Company for fulfillment
                    related expenses.

            12)     Create and dispatch customer notices according to legal
                    requirements or the Company's lawful written instructions.

            13)     Provide problem resolution and support services, as required
                    to insure necessary levels of customer service.

        ii.     Value Added Processes

            1)      Provide certain value added services, specifically:

                a)      Gift wrapping

        iii.    Fulfillment Services

            1)      Pick/Pack/Ship backordered merchandise according to
                    specifications set forth by the Company.

            2)      Pick/Pack/Ship active or reserve merchandise according to
                    specifications set forth by the Company.

            3)      Insert additional materials (package inserts) into outbound
                    shipments per Company's instructions, and use any specific
                    packaging materials or packing processes, per Company's
                    instructions.

            4)      Process customer returns:

            5)      Support the fulfillment of catalog requests, as necessary

            6)      Issue gift certificates and other purchase incentives in
                    accordance with the Company's lawful written instructions.

            7)      Support the customization of products, according to the
                    Company's written instructions, when requested by the buyer.

            8)      Provide same-day shipping of overnight packages upon
                    customer request.

            9)      Assemble Company's merchandise into Company defined kits for
                    resale.

            10)     Prepare Merchandise for distribution to stores, upon
                    Company's written instructions. Such requests must be
                    received not less than two weeks prior to the date
                    Merchandise must be shipped.

                                                                    Page 2 of 12
<PAGE>

        iv.     Inventory Management Services

            1)      Receive merchandise against purchase orders provided by the
                    Company either electronically or by hard copy as agreed
                    between the parties.

                a)      Sign for the number of cartons received
                b)      Perform quantity checks, quality assurance checks and
                        inspection
                c)      Non-problem merchandise: process into active, reserve or
                        backorder status
                d)      Problem merchandise: segregate, notify Company, in such
                        form and at such times as agreed between the parties,
                        resolve problem as directed by Company.

            2)      Prepare Merchandise for sale, as instructed by Company.

            3)      Receive, inspect and process returned merchandise in
                    accordance with mutually agreed specifications with respect
                    to (i) refurbishment, (ii) holding it pending receipt of RA
                    number, (iii) returning it to active or reserve inventory,
                    and (iv) setting it aside for liquidated or special
                    handling; issue credits to Customers or provide replacement
                    Merchandise as appropriate.

            4)      Notify Company of returned merchandise in such form and such
                    times as agreed between the parties.

            5)      Provide warehouse security.

            6)      Provide specialized warehouse storage [such as highly secure
                    or freezer storage] as required by the Company.

            7)      Cycle count all reserve locations once each calendar
                    quarter. Cycle counting in excess of this standard may
                    result in additional charges.

            8)      Provide Company with bulk storage space for merchandise
                    inventory in excess of immediate sale demand.

            9)      Provide Company with active storage space for merchandise
                    inventory to meet immediate sale demand.

            10)     Refurbish products as instructed by Company.

        v.      Technology Services

            1)      Use of and technical integrations, as required, with the
                    NewRoads proprietary order entry fulfillment system (the
                    "System").

            2)      Maintain a backup and "disaster recovery" system and
                    procedures in accordance with NewRoads specifications.

            3)      Provide for customization of computer processing systems as
                    requested in writing by the Company, within limitation
                    specified by NewRoads.

            4)      Provide various computer-processing services, as listed on
                    the NewRoads Fee schedule.

            5)      Arrange for any required telecommunications connectivity
                    necessary to support the Company's business.

            6)      Provide training to Company personnel on NewRoads systems,
                    at either NewRoads or Company locations

                                                                    Page 3 of 12
<PAGE>

Portions of this exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions, marked "[***]," have been
separately filed with the Securities and Exchange Commission.

            7)      Provide Company personnel with real-time access to NewRoads
                    operating applications.

            8)      Help desk support from 8:00 a.m., EST to 5:00 p.m., EST, and
                    reasonable escalation paths for emergencies outside of
                    normal hours of support, consistent with NewRoads normal
                    operating policies.

3.      SERVICE LEVELS.

    a.  Peak Weeks shall be deemed to be the Company's 10 highest order volume
        weeks during a calendar year as determined from the Annual Forecast for
        such year as updated by Quarterly Forecasts and Revised Quarterly
        Forecasts, provided that any such Revised Quarterly Forecast shall have
        been received by NewRoads at least four weeks prior to such Peak Week.

    b.  No Service Level Agreement by NewRoads shall be cause for a non-monetary
        default or breach of this Agreement when measured over a period of time
        shorter than the period of time covered by a Forecast provided by
        Company to NewRoads.

    c.  Service Level Agreements

            i.  In stock order shipment if received by cut-off time (other than
                orders for next day delivery), measured weekly.

                    1)  Non-Peak Days: [***].

                    2)  Peak Days: [***].

            ii. Orders for next day delivery, received by cut-off time.

                    1)  [***].

            iii. Cut off Times

                    1)  Non-Peak Days: [***]

                    2)  Peak Days: [***]

            iv. Merchandise received, from dock to stock, if received by noon,
                measured weekly. Measurement begins when the Merchandise and
                "sufficient paperwork" is received, whichever is later.

                    1)  Non-Peak Days: [***].

                    2)  Peak Days: [***]

                    3)  [***]% count check in Merchandise receiving with
                        notation of all discrepancies (overages, short-ships,
                        etc.)

                    4)  Quality control check of [***]% of each shipment (in
                        accordance with instructions of the Company) inspecting
                        selected items for damages and comparing against
                        original sample for matching characteristics and
                        quality, provided that the Company may increase the
                        quality

                                                                    Page 4 of 12
<PAGE>

                    Portions of this exhibit have been omitted pursuant to a
                    request for confidential treatment. The omitted portions,
                    marked "[***]," have been separately filed with the
                    Securities and Exchange Commission.

                    control percentage up to [***]% on particular styles or
                    classes of Merchandise at its sole discretion.

            v.  Returns processed, from receipt to completion of all required
                financial and inventory transactions and restocking of saleable
                merchandise (including any necessary refurbishment), if received
                by noon, measured weekly. Measurement excludes anytime that
                Company's Blue Martini application is unavailable to NewRoads
                for returns processing.

                    1)  Non-Peak Days: [***].

                    2)  Peak Days: [***].

            vi. Returned shipments with: wrong item shipped, duplicate items
                shipped, missing items from package, or insufficient quantity
                not to exceed [***] of total orders shipped on a yearly basis.

            vii. Senior operating executives at NewRoads will be reasonably
                available to meet (in person or via telephone as the parties
                shall determine is necessary) and comprehensively review the
                Services in order to identify and jointly seek to implement any
                productivity and methods improvements that can reasonably be
                expected to reduce costs to the Company and otherwise improved
                the level of the Services performed by NewRoads.

4.      FORECASTS. The parties acknowledge that orders for Merchandise may not
        be uniform from month to month as a result of various factors, including
        the seasonal nature of the demand for Merchandise and advertising and
        marketing schedules which are subject to constant changes, and that the
        inability of Company accurately to predict the volume of orders to be
        processed or the inventory to be received and warehoused on a weekly
        basis may have a detrimental effect on NewRoads' ability to provide the
        Services in accordance with the Service Levels. Company recognizes and
        understands the importance of keeping NewRoads informed at all times of
        forecasted order volumes, schedule changes, fast and slow selling items,
        Merchandise or vendor problems and all other material business issues
        which might have an effect upon the performance by NewRoads of its
        obligations hereunder and shall provide NewRoads with reasonable notice
        after Company is aware of any changes in any such forecasted items.
        Specifically, but without limiting the generality of the foregoing,
        Company agrees as follows:

    a.  Company shall deliver to NewRoads an Annual Forecast at least three
        months prior to the beginning of each successive calendar year during
        the Term, in respect of such calendar year.

    b.  Four weeks prior to the first day of each calendar quarter, Company
        shall deliver to NewRoads a Quarterly Forecast.

    c.  Company shall deliver to NewRoads a Revised Quarterly Forecast whenever
        it believes that any business condition may have the effect of changing
        materially any item of the previous Quarterly Forecast furnished to
        NewRoads. In the event that Company experiences an actual increase in
        any forecast part of its business in respect of any week of more than
        Allowable Forecast Variance, as specified in a Statement of Work, over
        that projected for such activity for such week as set forth in any
        applicable Quarterly Forecast (or a Revised Quarterly Forecast which has
        been delivered to NewRoads at least four weeks prior to such week) and
        has not advised NewRoads in writing at least four weeks prior to such
        week that such increase is forecasted, then NewRoads shall use
        commercially reasonable efforts to meet those Service Levels directly or
        indirectly affected by the increased level of activity (but shall not be
        responsible for any failure to meet such Service Levels that is directly
        caused by such increased level of activity) for so long as Company's
        volume exceeds by more than Allowable Forecast Variance the volume
        projected in the most recent Quarterly Forecast or Revised Quarterly
        Forecast for such activity.

                                                                    Page 5 of 12
<PAGE>

    d.  The information contained in Quarterly Forecasts, Revised Quarterly
        Forecasts and Annual Forecasts provided by Company to NewRoads shall be
        reasonably related to and consistent with the actual operating history
        of Company, subject to deviations therefrom as reasonably required by
        changes in circumstances.

5.      INVENTORY. Merchandise inventory shall be handled and processed as
        follows:

    a.  Company shall transmit to NewRoads, prior to the starting point of the
        receiving SLA, sufficient information to allow NewRoads to (1) properly
        publish a purchase that NewRoads can receive against (2). permit
        NewRoads to identify the Merchandise as that of Company and (3) to
        permit NewRoads to match the physical product with the Company supplied
        information. NewRoads will provide Company with notice of the receipts
        and requests for purchase order information within 4 hours of receipt of
        the merchandise from the carrier, NewRoads shall use commercially
        reasonable efforts but is under no obligation to receive Merchandise on
        behalf of Company if it does not receive the information required to
        complete a publish a purchase order..

    b.  For inbound shipments, except for shipments delivered by "parcel"
        carriers, such as UPS, FedEx, DHL or the U.S. Postal Service, Company
        shall advise its vendors that motor carriers must contact NewRoads at
        least one Business Day prior to delivery and make a delivery appointment
        prior to arrival. Inbound shipments arriving at a NewRoads warehouse
        without one Business Day's prior notice may be refused or delayed by
        NewRoads depending on the space and manpower available at the time of
        arrival. Each inbound shipment must have a packing slip and each carton
        must be marked with the purchase order number.

    c.  NewRoads shall use its commercially reasonable efforts to comply with
        Company's written instructions regarding handling and disposing of
        Problem Merchandise and shall submit to Company a report of Problem
        Merchandise as soon as practicable after having received it. NewRoads
        shall not include Problem Merchandise in the inventory of items
        available for shipment to customers but shall include such Problem
        Merchandise in a separate inventory stored at storage rates as specified
        in the applicable Statement of Work for the first 30 days and
        thereafter, upon five (5) Business Days prior written notice to Company,
        at the Problem Merchandise Rate. Company acknowledges that Problem
        Merchandise cannot be stored indefinitely and that all Problem
        Merchandise shall be removed at Company's expense within 30 days after
        NewRoads notifies Company of specific details relevant to the reasons
        for the classification of the Merchandise as Problem Merchandise.
        Following the end of such 30 day period, NewRoads has the right to
        dispose of the Problem Merchandise, upon five (5) Business Days prior
        written notice, by returning the Merchandise to Company on a freight
        collect basis or taking any other actions which are reasonable under the
        circumstances; provided, however, that NewRoads shall follow Company's
        reasonable directions with respect to any other disposition (at
        Company's expense) of the Problem Merchandise. Once Merchandise has been
        adequately repaired or reconstituted so that its processing no longer
        imposes an unreasonable hardship on NewRoads, NewRoads agrees promptly
        to remove such Merchandise from its Problem Merchandise status and to so
        notify Company in writing within 10 Business Days.

    d.  Company acknowledges that Company shall be solely responsible for
        selecting, purchasing, paying for and arranging for the shipment to
        NewRoads of Merchandise, and NewRoads agrees that it shall not have and
        shall not represent that it has any authority to undertake any of such
        activities on Company's behalf.

    e.  In the event that any Merchandise shipped by NewRoads to end user
        customers is returned as damaged, returned as undeliverable or lost,
        NewRoads shall notify Company, store damaged Merchandise as Problem
        Merchandise pending inspection by the carrier, file tracers for the lost
        shipments and claims for damaged and lost shipments which originated
        from NewRoads, and reimburse Company for any money paid or credited to
        NewRoads by the common carrier as a result of such claims within 30 days
        after receipt.

    f.  NewRoads reserves the right to refuse, without liability of any kind,
        acceptance of Merchandise which, because of its condition, might cause,
        in NewRoads' reasonable sole judgment, infestation, contamination, or
        damage to the warehouse facility or to other goods in the custody of
        NewRoads. NewRoads shall notify Company of its refusal to accept any
        such Merchandise and the reason for its refusal within one Business Day
        after such refusal. If NewRoads believes that any Merchandise has caused
        or may cause damage to the

                                                                    Page 6 of 12
<PAGE>

        Portions of this exhibit have been omitted pursuant to a request for
        confidential treatment. The omitted portions, marked "[***]," have been
        separately filed with the Securities and Exchange Commission.

        warehouse facility or to any other goods in the custody of NewRoads or
        has characteristics which make its storage illegal, NewRoads, after
        giving reasonable notice to Company, may dispose of the Merchandise in
        any lawful manner and will incur no liability by reason of such
        disposal, and Company shall pay NewRoads any costs incurred by NewRoads
        in connection with such disposal as well as storage at the Problem
        Merchandise Rate from the date NewRoads notifies Company of such belief.

    g.  At least one annual Physical Inventory will be performed at Company's
        request, timed to coincide with the end of Company's fiscal year.
        Additional Physical Inventories may be requested by Company with
        reasonable notice, given the circumstances and business environment at
        the time such request is made, and NewRoads will use commercially
        reasonable efforts to accommodate requests for additional physical
        inventories. Such requests for physical inventory or cycle counts shall
        be billed as part of Actual Variable Costs.

    h.  At least once per quarter, appropriate NewRoads personnel will review
        the layout of the Merchandise and pick locations in order to determine
        whether any changes can be made to such layout in order to minimize
        Company's costs, and any suggested changes resulting from such review
        shall be implemented promptly.

6.      REPORTS. NewRoads shall continue to provide the reporting that it
        currently provides to Company, as well as any new reports that may be
        mutually agreed to. Customization fees may apply to any such new
        reports.

7.      OBLIGATIONS & ASSUMPTIONS.

    a.  The Fees, as shown in Attachment 1, are based upon NewRoads Standard
        Operating Procedures and the services that NewRoads has performed for
        Company under the Original Agreement. While the parties are both
        familiar with the current processing requirements, the parties further
        recognize that some process requirements may change over time.
        Therefore, the parties agree that if either party identifies a process
        to which major changes must be made, that party may bring the process to
        the attention of the other to seek (1) a revision to the process and/or
        (2) a revision of the fee related to such process. Considering the fee
        structure of this agreement, the parties concur that this paragraph
        should apply to processes which would affect fixed fees identified in
        Attachment 1 (for example, changes to the types of products sold, which
        require changes in storage requirements), and not to processes, the
        costs of which would be recovered under the Adjusted Actual Variable
        Cost (for example, changes to the packing process). Further, if in the
        commercially reasonable determination of either party, the scope of
        Services or volume of transactions hereunder materially changes during
        the Term from what is currently contemplated, the Rates shown in
        Attachment 1 may be subject to revision. Upon the parties failure to
        agree to such revision after good faith negotiations, either party may
        terminate the Agreement upon 120 days prior written notice.

    b.  Company may request a material adjustment to the scope or volume of
        Services provided with respect to this Statement of Work, or may add
        additional Statements of Work, by submitting a written proposal to
        NewRoads. Provided that NewRoads agrees to provide such Services, the
        parties shall agree to an amendment to this Statement of Work or the
        creation of a new Statement of Work. Such Statement of Work shall
        provide for reasonable fee adjustments to compensate NewRoads for any
        increases in Services involving increased labor or other costs, provided
        such price adjustments are agreed to by Company.

8.      ALLOWABLE FORECAST VARIANCE. The Allowable Forecast Variance shall be
        [***].

9.      INVENTORY SHRINKAGE REIMBURSEMENT

    a.  Merchandise

        i.  [***] percent of all Merchandise Inventory Shrinkage which is equal
            to or less than [***] percent,
        ii. [***] percent of all Merchandise Inventory Shrinkage which exceeds
            [***] percent.

                                                                    Page 7 of 12
<PAGE>

Portions of this exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions, marked "[***]," have been
separately filed with the Securities and Exchange Commission.

    b.  Non-Merchandise

        i.  [***] percent of all Non-Merchandise Inventory Shrinkage which is
            equal to or less than [***] percent,
        ii. [***] percent of all Non-Merchandise Inventory Shrinkage which
            exceeds [***] percent but is equal to or less than [***] percent,
            and
        iii. [***] percent of all Non-Merchandise Inventory Shrinkage which
            exceeds [***] percent.

10.     FEES. Company shall pay NewRoads the fees delineated in Attachment 1.

    a.  Billing the Estimated Variable Cost Per Order. The Estimated Variable
        Cost Per Order shall be billed weekly based upon the Actual Variable
        Cost Per Order. On the last invoice of each month, the Estimated
        Variable Cost Per Order shall be reconciled, in accordance with past
        practices, to the Adjusted Actual Variable Cost Per Order and any
        variance in such reconciliation shall be included as a debit or credit
        on the same invoice.

11.     INVOICING & PAYMENT TERMS.

    a.  Invoices shall be rendered to Company weekly for Services performed or
        any other financial obligation due NewRoads from Company.

    b.  Payments shall be due 15 days from the date received by Company.

12.     NOTICES

    a.  If to NewRoads: NewRoads, Inc., 730 E Church St, Martinsville, Virginia
        24112; Attn: General Manager; Fax: 276-670-2121; Phone: 276-670-2100.

        i.      With copies to:

            1)      NewRoads, Inc. 730 E Church St, Martinsville, Virginia
                    24112; Attn: Corporate Counsel; Fax: 276-670-2121; Phone:
                    276-670-2100.

            2)      Kane Kessler, PC; 1350 Avenue of the Americas; New York, NY
                    10019-4896; Attn: Robert L. Lawrence, Esq.; Fax:
                    212-245-3009; Phone: 212-541-6222.

    b.  If to Company: If to Company: Bluefly, Inc.; Attn: Patrick Barry; 42
        West 39th Street, New York, NY 10018; Fax: 212-869-6916; Phone
        212-944-8000.

            1)      With a copy to: Bluefly, Inc.; Attn: Jon Freedman; 42 West
                    39th Street, New York, NY 10018; Fax: 212-937-2015; Phone
                    212-944-8000.

                                                                    Page 8 of 12
<PAGE>

IN WITNESS WHEREOF, the parties have caused this Statement of Work to be
executed by their duly authorized representatives as of the date first written
above.

NewRoads, Inc.                               Bluefly, Inc. ("Company")


By:    /s/ David P. Himes                    By:    /s/ Patrick C. Barry
       ---------------------------------            ----------------------------
Name:  David P Himes                         Name:  Patrick Barry

Title: Senior Vice President                 Title: Chief Operating Officer and
                                                    Chief Financial Officer

Date:  March 21, 2005                        Date:     March 21, 2005

                                                                    Page 9 of 12
<PAGE>

Portions of this exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions, marked "[***]," have been
separately filed with the Securities and Exchange Commission.

Attachment 1
Fee Schedule

    Line Item           Unit of Measure    Period of Measure   Unit Fee
--------------------    ---------------    -----------------   ----------------
Fixed Fee per Order     Order Accepted                          see table below
Reserve Storage         Pallets            Week                [***]
Primary Pick Storage    Square Foot        Week                [***]
Programming             Hour                                   [***]
Account Management                         Week                [***]
Technology Services     Order Accepted     Week                 see table below

Adjustment to Actual Variable Cost                             [***]

                        Gross Orders from  Gross Orders to
Fixed Fee per Order                  up to [***]               [***]
                        [***]              [***]               [***]
                        [***]              [***]               [***]
                        [***]              [***]               [***]
                        [***]              [***]               [***]
                        [***]              [***]               [***]
                        [***]              [***]               [***]
                        [***]              [***]               [***]
                        [***]                          or more [***]

Technology Services                  up to [***]               [***]
                        [***]              [***]               [***]
                        [***]                          or more [***]

     Task                         Comment                  Unit           Rate
----------------------    ------------------------------   ----           -----
Hourly Rates              This rates apply to Special Services or other
                          Client-authorized activity not covered by transaction
                          or periodic fees
 Staff Training                                            hour           [***]
 Training Preparation                                      hour           [***]
 Client Service Support                                    hour           [***]
 Warehouse Labor                                           hour           [***]
 Supervisor Labor                                          hour           [***]
 Help Desk                billed in 15 minute increments   hour           [***]
 Programmer                                                hour           [***]

    1.      For purposes of calculating the Fixed Fee per Order and the
            Technology Services Fee, Gross Orders shall be measured the
            projected 12-month volume of Gross Orders (as hereinafter defined)
            at the beginning of each calendar year of the Term, provided that,
            to the extent that such 12-month volume

                                                                   Page 10 of 12
<PAGE>

            Portions of this exhibit have been omitted pursuant to a request for
            confidential treatment. The omitted portions, marked "[***]," have
            been separately filed with the Securities and Exchange Commission.

            exceeds projections, the Fixed Fee Per Order will be based upon the
            actual volume of Gross Orders during such year. At the end of each
            calendar year of the Term, the Fixed Fee Per Order and Technology
            Services Fee will be adjusted retroactively and the Company will
            receive a credit for any overcharge or be invoiced for any
            undercharge.. No Fixed Fee Per Order will be charged for back
            orders.

    2.      To the extent that the Company experiences product returns that are
            the result of NewRoads' picking errors (including, without
            limitation, wrong items shipped, duplicate items, items mistakenly
            shipped, missing items or components or damaged items) ("Error-Based
            Returns"), and such Error-Based Returns exceed [***] of all items
            shipped during any calendar year, then NewRoads shall issue to the
            Company a credit in the amount of the sum of the Fixed Fee Per Order
            and Technology Services Fee originally applied to the order of which
            such returned product was a part for each Error-Based Return in
            excess of [***] of units shipped. To the extent that such
            Error-Based Returns exceed [***] of all items shipped on during such
            calendar year, then NewRoads shall issue the Company a credit as
            prescribed in this section 5(b)(ii) plus an additional $[***] for
            each Error-Based Return. Orders processed during calendar year 2005
            but prior to the Effective Date shall be included in all
            calculations relating to the Fixed Fee per Order, the Technology
            Services fees and any adjustments or credits thereto.

    3.      There will be no space fees charged for receiving areas, packing
            areas or shipping areas.

    4.      Company will not be charged any programming or other expenses in
            connection with any changes to NewRoads' systems, which are
            instigated by NewRoads, and any QA necessary to ensure the proper
            integration of Company's systems with such changes to NewRoads'
            systems.

    5.      With the exception of the fees set forth above, Company will not be
            charged for any additional fees without its prior written approval,
            including, but not limited to, fees for inserts e-mails, bins,
            racking and other equipment.

    6.      The Termination Fee shall be $[***].

                                                                   Page 11 of 12
<PAGE>

Attachment 2
Escalation Schedule

In order to insure that each party has the appropriate contact information is
circumstances warrant escalating any open issue between the parties, contact
information, including name, title, phone, fax and e-mail address, is provided
below. Each party agrees to notify the other promptly of any change to this
information.

        1.  For NewRoads

                a.  Primary Contact - Rhonda Frith, Account Executive
                b.  Secondary Contact - Lisa Bogle, Director of Client
                    Solutions,
                c.  Executive Contact - David P Himes, Senior Vice President,
                    703-912-9594, 703-783-0323 (fax), david.himes@newroads.com

        2.  For Company

                a.  Primary Contact -- TBD
                b.  Secondary Contact -- TBD
                c.  Tertiary Contact -- TBD
                d.  Executive Contact -- TBD

                                                                   Page 12 of 12
</TEXT>
</DOCUMENT>
</SUBMISSION>
