<SUBMISSION>
<ACCESSION-NUMBER>0001133796-13-000101
<TYPE>8-K
<PUBLIC-DOCUMENT-COUNT>2
<PERIOD>20130523
<ITEMS>1.01
<ITEMS>1.02
<ITEMS>2.01
<ITEMS>3.01
<ITEMS>3.02
<ITEMS>3.03
<ITEMS>5.01
<ITEMS>5.02
<ITEMS>9.01
<FILING-DATE>20130524
<DATE-OF-FILING-DATE-CHANGE>20130524
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>BLUEFLY INC
<CIK>0001030896
<ASSIGNED-SIC>5961
<IRS-NUMBER>133612110
<STATE-OF-INCORPORATION>DE
<FISCAL-YEAR-END>0403
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>8-K
<ACT>34
<FILE-NUMBER>001-14498
<FILM-NUMBER>13870272
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>42 WEST 39TH ST
<CITY>NEW YORK
<STATE>NY
<ZIP>10018
<PHONE>2129448000
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>42 WEST 39TH ST
<CITY>NEW YORK
<STATE>NY
<ZIP>10018
</MAIL-ADDRESS>
<FORMER-COMPANY>
<FORMER-CONFORMED-NAME>PIVOT RULES INC
<DATE-CHANGED>19970305
</FORMER-COMPANY>
</FILER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>k345936_8k.htm
<DESCRIPTION>FORM 8-K
<TEXT>
<HTML>
<HEAD>
     <TITLE></TITLE>
</HEAD>
<BODY STYLE="font: 10pt Times New Roman, Times, Serif">

<P STYLE="margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>UNITED STATES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SECURITIES AND EXCHANGE COMMISSION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>WASHINGTON, D.C. 20549</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 18pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>_______________</B></P>

<P STYLE="font: 18pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 18pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>FORM 8-K</B></P>

<P STYLE="font: 18pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>_______________</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>CURRENT REPORT</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>PURSUANT TO SECTION
13 OR 15(d) OF</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>THE SECURITIES EXCHANGE ACT OF 1934</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>Date of report (Date of earliest event
reported): May 23, 2013</B></P>

<P STYLE="font: 24pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 24pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: 24pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B><U>BLUEFLY, INC.</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">(Exact name of registrant as specified in
its charter)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 30%; padding-bottom: 0; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 5%; padding-bottom: 0; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 30%; padding-bottom: 0; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 5%; padding-bottom: 0; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 30%; padding-bottom: 0; text-align: center">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; border-bottom: windowtext 1pt solid; padding-bottom: 0; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>Delaware</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-bottom: 0; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: top; border-bottom: windowtext 1pt solid; padding-bottom: 0; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>001-14498</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-bottom: 0; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: top; border-bottom: windowtext 1pt solid; padding-bottom: 0; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>13-3612110</B></FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-bottom: 0">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(State or other jurisdiction</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">of incorporation)</P></TD>
    <TD STYLE="vertical-align: bottom; padding-bottom: 0; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-bottom: 0">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Commission file</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">number)</P></TD>
    <TD STYLE="vertical-align: bottom; padding-bottom: 0; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-bottom: 0">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(I.R.S. Employer</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Identification No.)</P></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0.5in"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 59%; padding-bottom: 0">&nbsp;</TD>
    <TD STYLE="width: 5%; padding-bottom: 0">&nbsp;</TD>
    <TD STYLE="width: 36%; padding-bottom: 0">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; border-bottom: windowtext 1pt solid; text-align: center; padding-bottom: 0"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>42 West 39<SUP>th</SUP> Street, New York, New York</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-bottom: 0">&nbsp;</TD>
    <TD STYLE="vertical-align: top; border-bottom: windowtext 1pt solid; text-align: center; padding-bottom: 0"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>10018</B></FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-bottom: 0">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Address of principal executive
offices)</P></TD>
    <TD STYLE="vertical-align: bottom; padding-bottom: 0"></TD>
    <TD STYLE="vertical-align: top; padding-bottom: 0; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">(Zip Code)</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Registrant&rsquo;s telephone number, including
area code:<B> <U>(212)&nbsp;944-8000</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>N/A</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<HR STYLE="color: Black; width: 30%">

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Former name or former address, if changed
since last report.)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Check the appropriate box below if the Form&nbsp;8-K filing
is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 3%; padding-bottom: 0"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B><FONT STYLE="font-family: Wingdings">&#168;</FONT></B></FONT></TD>
    <TD STYLE="width: 97%; padding-bottom: 0"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Written communications pursuant to Rule&nbsp;425 under the Securities Act (17 CFR 230.425)</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 0">&nbsp;</TD>
    <TD STYLE="padding-bottom: 0">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 0"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B><FONT STYLE="font-family: Wingdings">&#168;</FONT></B></FONT></TD>
    <TD STYLE="padding-bottom: 0"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Soliciting material pursuant to Rule&nbsp;14a-12 under the Exchange Act (17 CFR 240.14a-12)</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 0">&nbsp;</TD>
    <TD STYLE="padding-bottom: 0">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 0"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B><FONT STYLE="font-family: Wingdings">&#168;</FONT></B></FONT></TD>
    <TD STYLE="padding-bottom: 0"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Pre-commencement communications pursuant to Rule&nbsp;14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 0">&nbsp;</TD>
    <TD STYLE="padding-bottom: 0">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 0"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B><FONT STYLE="font-family: Wingdings">&#168;</FONT></B></FONT></TD>
    <TD STYLE="padding-bottom: 0"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Pre-commencement communications pursuant to Rule&nbsp;13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B></B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 10%"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Item 1.01</B></FONT></TD>
    <TD STYLE="width: 90%"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Entry into a Material Definitive Agreement</B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">On May 23, 2013 (the &ldquo;<U>Closing Date</U>&rdquo;),
Runway Acquisition Sub, Inc. (the &ldquo;<U>Purchaser</U>&rdquo;), an affiliate of Clearlake Capital Group, purchased from entities
affiliated with the four principal stockholders (the &ldquo;<U>Principal Stockholders</U>&rdquo;) of Bluefly, Inc. (&ldquo;<U>Bluefly</U>&rdquo;):
Rho Ventures VI, LP (&ldquo;<U>Rho</U>&rdquo;); Quantum Industrial Partners LDC; Maverick Fund USA, Ltd., Maverick Fund, L.D.C.,
and Maverick Fund II, Ltd.; and Prentice Consumer Partners, LP (&ldquo;<U>Prentice</U>&rdquo;) all of the shares of Bluefly&rsquo;s
common stock, $0.01 par value, owned by the Principal Stockholders, which represented approximately 89% of the outstanding shares
of Bluefly&rsquo;s common stock, for a purchase price of $0.0076 per share.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">On the same day, Bluefly entered into a
Stock Purchase Agreement (the &ldquo;<U>Purchase Agreement</U>&rdquo;) with the Purchaser. The Purchase Agreement provided, among
other things, for the sale by Bluefly of 2,850,000 newly issued shares of Bluefly&rsquo;s common stock (the &ldquo;<U>Purchased
Shares</U>&rdquo;) to the Purchaser. The acquisition of the Purchased Shares, together with the acquisition of the shares from
the Principal Stockholders, resulted in the ownership by the Purchaser of an amount of shares in excess of 90% of the then outstanding
shares of Bluefly&rsquo;s common stock. In accordance with the terms of the Purchase Agreement, the Purchaser consummated a &ldquo;short
form&rdquo; merger (the &ldquo;<U>Merger</U>&rdquo;) on May 23, 2012 (the &ldquo;<U>Effective Time</U>&rdquo;), pursuant to Section
253 of the Delaware General Corporation Law (the &ldquo;<U>DGCL</U>&rdquo;), under which the Merger was consummated without a vote
or meeting of Bluefly&rsquo;s stockholders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">At the Effective Time, the Purchaser merged
with and into Bluefly, with Bluefly surviving. As a result of the Merger, each issued and outstanding share of Bluefly&rsquo;s
common stock (other than shares of common stock owned by the Purchaser or by Clear Mode, LLC, an affiliate of Clearlake and the
sole stockholder of the Purchaser (&ldquo;<U>Clear Mode</U>&rdquo;), shares of common stock held by Bluefly as non-voting treasury
shares, and shares of Bluefly&rsquo;s common stock for which the holder thereof demands and perfects such holder&rsquo;s right
to an appraisal (the &ldquo;<U>Dissenting Shares</U>&rdquo;) in accordance with the applicable provisions of the DGCL) were converted
into the right to receive $0.10 in cash per share, without interest.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Bluefly utilized amounts contributed to
it under the Purchase Agreement to, among other things, (a) pay off amounts owed under the revolving credit facility with Salus
Capital, LLC (&ldquo;<U>Salus</U>&rdquo;), (b) pay off promissory notes held by Rho and Prentice, each in the principal amount
of $1.5 million, plus accrued interest, and (c) for other general corporate purposes. Habib Kairouz, who was designated by Rho
to serve on Bluefly&rsquo;s Board of Directors (the &ldquo;<U>Board</U>&rdquo;), is a Managing Partner of Rho. Mario Ciampi, who
was designated by Prentice to serve on the Board, is an employee of Prentice.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The Purchase Agreement provides for the
indemnification of members of the Board and officers of Bluefly to the fullest extent permitted by law in accordance with Bluefly&rsquo;s
certificate of incorporation and by-laws as in effect on the date of the Purchase Agreement and in accordance with indemnity agreements
in effect between Bluefly and each of its current directors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The Purchase Agreement was unanimously
approved by the Board based, in part, upon the unanimous recommendation of a special committee of the Board (the &ldquo;<U>Special
Committee</U>&rdquo;), consisting solely of independent directors of the Board.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The foregoing description of the Purchase
Agreement and related transactions does not purport to be complete and is qualified in its entirety by reference to the full text
of the Purchase Agreement, a copy of which is filed as Exhibit 2.1 to this report and is incorporated herein by reference.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 10%"><FONT STYLE="font-size: 10pt"><B>Item 1.02</B></FONT></TD>
    <TD STYLE="width: 90%"><FONT STYLE="font-size: 10pt"><B>Termination of a Material Definitive Agreement.</B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">In connection with the execution of
the Purchase Agreement, on the Closing Date, Bluefly repaid all amounts owed under each of (a) its Credit Agreement, dated
November 13, 2012, by and among Bluefly, EVT Acquisition Co., LLC and Salus, (b) its Secured Subordinated Convertible Promissory
Note, dated August 13, 2012 and amended as of November 13, 2012, between Bluefly and Rho, and (c) its Secured Subordinated
Promissory Note, dated August 13, 2012 and amended as of November 13, 2012, between Bluefly and Prentice, and terminated each
of those agreements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 10%"><FONT STYLE="font-size: 10pt"><B>Item 2.01</B></FONT></TD>
    <TD STYLE="width: 90%"><FONT STYLE="font-size: 10pt"><B>Completion of Acquisition or Disposition of Assets.</B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The information set forth under Item 1.01
is incorporated by reference herein.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 10%"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Item 3.01</B></FONT></TD>
    <TD STYLE="width: 90%"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.</B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">In connection with the closing of the Merger,
Bluefly notified the NASDAQ Stock Market (&ldquo;<U>NASDAQ</U>&rdquo;) on May 23, 2013 that each outstanding share of Bluefly&rsquo;s
common stock (other than shares of Bluefly&rsquo;s common stock held by the Purchaser or Clear Mode, shares of Bluefly&rsquo;s
common stock held by the Company as non-voting treasury shares, and Dissenting Shares) was automatically converted, pursuant to
the Merger, into the right to receive $0.10 per share in cash, without interest. As a result of the Merger
and related transactions, NASDAQ filed with the Securities and Exchange Commission a Notification of Removal from Listing and/or
Registration Under Section 12(b) on Form 25 to delist and deregister Bluefly&rsquo;s common stock under Section 12(b) of the Securities
Exchange Act of 1934, as amended.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 10%"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Item 3.02</B></FONT></TD>
    <TD STYLE="width: 90%"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Unregistered Sale of Equity Securities.</B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;<B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The information set forth under Item 1.01
is incorporated by reference herein.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Bluefly offered and sold the Purchased Shares
in a private placement pursuant to an exemption from registration provided by Section&nbsp;4(2) of the Securities Act of 1933,
as amended, as a transaction by an issuer not involving a public offering.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 10%"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Item 3.03</B></FONT></TD>
    <TD STYLE="width: 90%"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Material Modification to Rights of Security Holders.</B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B>&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The information set forth in Items 1.01,
2.01, 3.01, 3.02 and 5.01 of this Current Report on Form 8-K is incorporated by reference into Item&nbsp;3.03.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">At the Effective Time, each outstanding
share of Bluefly&rsquo;s common stock (other than shares of Bluefly&rsquo;s common stock held by the Purchaser or Clear Mode, shares
of Bluefly&rsquo;s common stock held by the Company as non-voting treasury shares, and Dissenting Shares) was converted into the
right to receive $0.10 per share in cash, without interest.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 10%"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Item 5.01</B></FONT></TD>
    <TD STYLE="width: 90%"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Changes in Control of Registrant.</B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The information set forth in Items 1.02,
2.01, 3.02, 3.03 and 5.02 of this Current Report on Form 8-K is incorporated by reference into Item&nbsp;5.01.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">As a result of the purchase by the Purchaser
of the shares of Bluefly&rsquo;s common stock from the Principal Stockholders on May 23, 2013, a change of control of Bluefly occurred.
As a result of the Merger, Bluefly became a wholly-owned subsidiary of Clear Mode. The total amount of the consideration payable
in connection with the change of control transaction was approximately $505,000.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 10%"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Item 5.02.</B></FONT></TD>
    <TD STYLE="width: 90%"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.</B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 68.25pt; text-indent: -68.25pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">In connection with the Merger, and as contemplated
by the Purchase Agreement, all the directors of Bluefly prior to the Merger voluntarily resigned from the Board effective as of
the Effective Time. These resignations were not a result of any disagreements between Bluefly and the former directors on any matter
relating to Bluefly&rsquo;s operations, policies or practices. Pursuant to the terms of the Purchase Agreement, on May 23, 2013,
the directors of Purchaser immediately prior to the Effective Time became the directors of Bluefly following the Merger.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Pursuant to an incentive arrangement previously
approved by the Special Committee in April 2013, upon recommendation of the Compensation Committee of the Board, Bluefly&rsquo;s
chief executive officer, Joseph Park, received a cash bonus of $26,500 in connection with the transactions contemplated by the
Purchase Agreement, representing 5% of the aggregate proceeds otherwise payable to Bluefly&rsquo;s stockholders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 10%"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Item 9.01.</B></FONT></TD>
    <TD STYLE="width: 90%"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Financial Statements and Exhibits.</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">(d)</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif"><I>Exhibits</I></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 14%; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">Exhibit No.</FONT></TD>
    <TD STYLE="width: 86%; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">Description</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif">2.1</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif">Purchase Agreement, dated as of May 23, 2013, between Bluefly, Inc. and Runway Acquisition Sub, Inc.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SIGNATURES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">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.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD COLSPAN="2"><FONT STYLE="font-family: Times New Roman, Times, Serif">BLUEFLY, INC.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD COLSPAN="2"><FONT STYLE="font-family: Times New Roman, Times, Serif">(Registrant)</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 55%">&nbsp;</TD>
    <TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 40%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Date: May 24, 2013</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">By:</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">/s/ James Gallagher</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Name:</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;James Gallagher</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif">Title:</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif">Chief Financial Officer</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>EXHIBIT INDEX</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 14%; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">Exhibit No.</FONT></TD>
    <TD STYLE="width: 86%; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">Description</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif">2.1</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif">Purchase Agreement, dated as of May 23, 2013, between Bluefly, Inc. and Runway Acquisition Sub, Inc.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<DOCUMENT>
<TYPE>EX-2.1
<SEQUENCE>2
<FILENAME>k345936_ex2-1.htm
<DESCRIPTION>EXHIBIT 2.1
<TEXT>
<HTML>
<HEAD>
     <TITLE></TITLE>
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<BODY STYLE="font: 10pt Times New Roman, Times, Serif">

<P STYLE="margin: 0; text-align: right"><B>Exhibit 2.1</B></P>
<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right; text-indent: 0in"><U>Execution Copy</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><B>STOCK PURCHASE AGREEMENT</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><B>by and between</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><B>BLUEFLY, INC.,</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><B>and</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><B>RUNWAY ACQUISITION
SUB, INC.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><B>May 23, 2013</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><B>STOCK PURCHASE AGREEMENT</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-variant: small-caps"><B>This
Stock Purchase Agreement</B></FONT> (this &ldquo;<B><I>Agreement</I></B>&rdquo;) is made as of May 23, 2013, by and between <FONT STYLE="font-variant: small-caps"><B>Bluefly,
Inc.</B></FONT>, a Delaware corporation (the &ldquo;<B><I>Company</I></B>&rdquo;), and <FONT STYLE="font-variant: small-caps"><B>Runway
Acquisition Sub, Inc.,</B></FONT> a Delaware corporation (&ldquo;<B><I>Purchaser</I></B>&rdquo;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><B>RECITALS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-variant: small-caps"><B>Whereas</B></FONT>,
Purchaser and certain stockholders of the Company have entered into that certain Stock Purchase Agreement, dated as of the date
hereof (the &ldquo;<B><I>Stock Purchase Agreement</I></B>&rdquo;), pursuant to which Purchaser has acquired all of the shares of
common stock, par value $0.01 per share, of the Company (the &ldquo;<B><I>Common Stock</I></B>&rdquo;) owned by the stockholders
party to the Stock Purchase Agreement;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-variant: small-caps"><B>Whereas</B>,
</FONT>the Company has agreed to issue and sell to Purchaser, and Purchaser has agreed to purchase from the Company, such number
of additional shares of Common Stock that, when added to the number of shares of Common Stock owned by Purchaser following the
consummation of the transactions contemplated by the Stock Purchase Agreement, will result in Purchaser owning at least ninety
percent (90%) of the outstanding shares of Common Stock;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-variant: small-caps"><B>Whereas</B></FONT>,
the Company and Purchaser are executing and delivering this Agreement in reliance upon the exemption from securities registration
afforded by Section 4(2) under the Securities Act of 1933, as amended (the &ldquo;<B><I>Securities Act</I></B>&rdquo;); and</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-variant: small-caps"><B>Whereas</B></FONT>,
contemporaneous with the acquisition of the shares of Common Stock under the Stock Purchase Agreement and the Shares (as hereinafter
defined) under this Agreement, Purchaser intends to consummate a merger of itself with and into the Company (the &ldquo;<B><I>Merger</I></B>&rdquo;)
in accordance with Section&nbsp;253 of the Delaware General Corporation Law (the &ldquo;<B><I>DGCL</I></B>&rdquo;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-variant: small-caps"><B>Now,
Therefore</B></FONT>, in consideration of the foregoing recitals and the mutual promises, representations, warranties and covenants
hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: small-caps bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><FONT STYLE="text-transform: uppercase; color: black">article
1</FONT><BR>
<U>AUTHORIZATION; CLOSING DATE; DELIVERY</U></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">1.1&#9;</FONT><U>Authorization</U>.
The Company has authorized the sale and issuance of 2,850,000 shares of Common Stock (the &ldquo;<B><I>Shares</I></B>&rdquo;),
at a price per share of $0.10<B> </B>(the &ldquo;<B><I>Per Share Purchase Price</I></B>&rdquo;).</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">1.2&#9;</FONT><U>Closing
Date. Delivery</U>.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="color: black">(a)&#9;</FONT><I>Closing
Date</I>. The Closing of the purchase and sale of the Shares hereunder (the &ldquo;<B><I>Closing</I></B>&rdquo;) shall be held
at the offices of Stradling Yocca Carlson &amp; Rauth, P.C., 100 Wilshire Boulevard, Suite 440, Santa Monica, California 90401,
at 10:00 a.m. local time on the date hereof. The date of the Closing is hereinafter referred to as the &ldquo;<B><I>Closing Date</I></B>.&rdquo;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="color: black">(b)&#9;</FONT><I>Funding
at Closing</I>.&#9;At the Closing, Purchaser shall be capitalized with at least $13,000,000 which shall be applied as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in"><FONT STYLE="color: black">(i)&#9;</FONT>$4,988,957.39
shall be paid to Salus Capital Partners, LLC (&ldquo;<B><I>Salus</I></B>&rdquo;) in full satisfaction of all indebtedness of the
Company under the Credit Agreement (the &ldquo;<B><I>Salus Credit Agreement</I></B>&rdquo;), dated November 13, 2012, by and among
the Company, EVT Acquisition, LLC and Salus.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in"><FONT STYLE="color: black">(ii)&#9;</FONT>$1,639,068.49
shall be paid to Rho Ventures VI, LP (&ldquo;<B><I>Rho</I></B>&rdquo;) in full satisfaction of amounts outstanding under its Secured
Subordinated Convertible Promissory Note (the &ldquo;<B><I>Rho Note</I></B>&rdquo;), dated August 13, 2012 and amended as of November
13, 2012 between the Company and Rho.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in"><FONT STYLE="color: black">(iii)&#9;</FONT>$1,535,339.13
shall be paid to Prentice Consumer Partners, LP (&ldquo;<B><I>Prentice</I></B>&rdquo;) in full satisfaction of amounts outstanding
under its Secured Subordinated Promissory Note (&ldquo;<B><I>Prentice Note</I></B>&rdquo;), dated August 13, 2012 and amended as
of November 13, 2012 between the Company and Prentice.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in"><FONT STYLE="color: black">(iv)&#9;</FONT>$1,017,988.00
shall be wired in the specific amounts and to the individuals or entities set forth on <U>Schedule A</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in"><FONT STYLE="color: black">(v)&#9;</FONT>$194,300.00
shall be paid to certain stockholders party to the Stock Purchase Agreement in accordance with the terms thereof.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in"><FONT STYLE="color: black">(vi)&#9;</FONT>$285,000.00
shall be paid to the Company in exchange for the Shares.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in"><FONT STYLE="color: black">(vii)&#9;</FONT>$310,584.89
shall be deposited with American Stock Transfer &amp; Trust Company, LLC, as the Paying Agent for the Merger, to fund the consideration
payable in the Merger.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in"><FONT STYLE="color: black">(viii)&#9;</FONT>$204,000.00
shall be paid to purchase the D&amp;O Tail Policy (as hereinafter defined).</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in"><FONT STYLE="color: black">(ix)&#9;</FONT>$26,572.89
shall be paid to Joseph Park in respect of his incentive bonus.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in"><FONT STYLE="color: black">(x)&#9;</FONT>$2,798,189.21
shall be paid to the Company to satisfy certain other liabilities of the Company and to be used for other general corporate purposes.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="color: black">(c)&#9;</FONT><I>Delivery</I>.
At the Closing, the Company will deliver or cause to be delivered to Purchaser:</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in"><FONT STYLE="color: black">(i)&#9;</FONT>a
certificate representing the Shares, registered in Purchaser&rsquo;s name, in exchange for payment of the purchase price therefor
by Purchaser by wire transfer of immediately available funds to the Company in accordance with the Company&rsquo;s written wiring
instructions delivered to Purchaser prior to the execution of this Agreement;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in"><FONT STYLE="color: black">(ii)&#9;</FONT>a
payoff letter from Salus, in form and substance satisfactory to Purchaser, (A)&nbsp;indicating the amount required to discharge
in full the indebtedness of the Company under the Salus Credit Agreement at the Closing, (B)&nbsp;including the authority for Purchaser
to discharge any and all Liens securing such indebtedness after payment of the amounts owed, and (C)&nbsp;including a full and
unconditional release of any and all claims and indebtedness under the Salus Credit Agreement;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in"><FONT STYLE="color: black">(iii)&#9;</FONT>a
full and unconditional release duly executed and delivered by Rho, in form and substance satisfactory to Purchaser, of any and
all claims and indebtedness under the Rho Note;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in"><FONT STYLE="color: black">(iv)&#9;</FONT>a
full and unconditional release duly executed and delivered by Prentice, in form and substance satisfactory to Purchaser, of any
and all claims and indebtedness under the Prentice Note;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in"><FONT STYLE="color: black">(v)&#9;</FONT>a
confirmation duly executed and delivered by each person or entity set forth on <U>Schedule A</U>, that all amounts due and owing
to such persons by the Company for services through the Closing Date have been satisfied in full; and</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in"><FONT STYLE="color: black">(vi)&#9;</FONT>a
letter agreement, in form and substance satisfactory to Purchaser, duly executed and delivered by Litle &amp; Co., LLC (&ldquo;<B><I>Litle</I></B>&rdquo;),
providing for the waiver of certain provisions under the Payment Processing Agreement, dated July 27, 2010, between the Company
and Litle, as amended by Amendment No. 1 dated October 14, 2010 and Amendment No. 2 dated as of April 6, 2011.</P>

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<P STYLE="font: small-caps bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="text-transform: uppercase; color: black">article
2</FONT><BR>
<U>REPRESENTATIONS AND WARRANTIES OF THE COMPANY</U></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Except with respect
to any Section of this <U>Article 2</U> as set forth in the disclosure schedule delivered by the Company to Purchaser simultaneously
with the execution of this Agreement (the &ldquo;<B><I>Disclosure Schedule</I></B>&rdquo;) that specifically relates to such Section
(or to another Section of this <U>Article 2</U> to the extent it is readily apparent that such disclosure is applicable to such
other Section), the Company represents and warrants to Purchaser:</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">2.1&#9;</FONT><U>Organization
and Standing</U>. The Company is a corporation duly incorporated and validly existing under, and by virtue of, the laws of the
State of Delaware and is in good standing as a domestic corporation under the laws of said state. The Company has all requisite
corporate power and authority and all governmental licenses, authorizations, consents and approvals required to own, lease and
operate its properties and assets and to carry on its business as now conducted. The Company is duly qualified to do business as
a foreign corporation and is in good standing in each jurisdiction where the character of the properties or assets owned, leased
or operated by it or the nature of its activities makes such qualification necessary, except where the failure to be so qualified
could not reasonably be expected to have, individually or in the aggregate, a material adverse effect on the Company.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">2.2&#9;</FONT><U>Subsidiaries</U>.
The only Subsidiary of the Company is EVT Acquistion Co, LLC, a limited liability company duly organized and validly existing under,
and by virtue of, the laws of</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: justify">New York (&ldquo;<B><I>EVT</I></B>&rdquo;), which has no material assets.<FONT STYLE="color: black">
Except for the capital stock of EVT, the Company does not own, directly or indirectly, any capital stock or other ownership interest
in any entity. For purposes of this Agreement, the term &ldquo;<B><I>Subsidiary</I></B>&rdquo; shall mean, as to the Company, any
individual or entity of which the Company directly or indirectly owns, beneficially or of record, (x)&nbsp;an amount of voting
securities of other interests that is sufficient to enable the Company to elect at least a majority of the members of such other
individual&rsquo;s or entity&rsquo;s board of directors or other governing body, or (y)&nbsp;at least fifty percent (50%) of the
outstanding equity or membership interests of such other individual or entity. </FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">2.3&#9;</FONT><U>Corporate
Power; Authorization</U>. The Company has all requisite legal and corporate power and has taken all requisite corporate action
to execute and deliver this Agreement, to sell and issue the Shares, and to carry out and perform all of its obligations under
this Agreement. This Agreement constitutes a legal, valid and binding obligation of the Company, enforceable in accordance with
its terms, except (a)&nbsp;as limited by applicable bankruptcy, insolvency, reorganization or similar laws relating to or affecting
the enforcement of creditors&rsquo; rights generally and (b)&nbsp;as limited by equitable principles generally. The execution and
delivery of this Agreement by the Company does not, and the performance of this Agreement and the compliance with the provisions
hereof, including the issuance, sale and delivery of the Shares by the Company, will not conflict with, or result in a breach or
violation of the terms, conditions or provisions of, or constitute a default under, or result in the creation or imposition of
any lien pursuant to the terms of, the Amended and Restated Certificate of Incorporation of the Company (the &ldquo;<B><I>Restated
Certificate</I></B>&rdquo;) or the Bylaws of the Company (as amended, the &ldquo;<B><I>Bylaws</I></B>&rdquo;), or any statute,
law, rule or regulation or any state or federal order, judgment or decree or any indenture, mortgage, lease or other material agreement
or instrument to which the Company is a party or to which the Company or any of its properties is subject.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">2.4&#9;</FONT><U>Issuance
and Delivery of the Shares</U>. Upon issuance and delivery in accordance with this Agreement and payment therefor in accordance
with the terms of this Agreement, the Shares will be duly authorized, validly issued, fully paid and nonassessable. The issuance
and delivery of the Shares is not subject to preemptive or any other similar rights of any individual or entity, and the Shares
will be issued and delivered free and clear of any liens or encumbrances.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">2.5&#9;</FONT><U>SEC
Documents; Financial Statements</U>. The Company has filed in a timely manner all documents that the Company was required to file
with the Securities and Exchange Commission (the <B><I>&ldquo;SEC&rdquo;</I></B>) since December 31, 2010. As of their respective
filing dates (or, if amended or superseded by a filing, as of the date of such amendment or applicable subsequent filing and as
so amended or superseded), all such documents filed by the Company with the SEC (the &ldquo;<B><I>SEC Documents</I></B>&rdquo;)
complied in all material respects with the requirements of the Exchange Act or the Securities Act, as applicable. None of the SEC
Documents contain any untrue statement of material fact or omit to state a material fact required to be stated therein or necessary
to make the statements made therein, in light of the circumstances under which they were made, not misleading. The financial statements
of the Company included in the SEC Documents (the &ldquo;<B><I>Financial Statements</I></B>&rdquo;) comply as to form in all material
respects with applicable accounting requirements and with the published rules and regulations of the SEC with respect thereto.
The Financial Statements have been prepared in accordance with generally accepted accounting principles for financial reporting
in the United States, consistently applied (&ldquo;<B><I>GAAP</I></B>&rdquo;) and fairly present the consolidated financial position
of the Company and any</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: justify">Subsidiaries at the dates thereof and the consolidated results of their operations and consolidated cash
flows for the periods then ended (subject, in the case of unaudited statements, to normal, recurring adjustments not material in
amount or to the extent that such unaudited statements do not include footnotes). Since December 31, 2010, there has been no change
in the Company&rsquo;s accounting methods or principles that would be required to be disclosed in the Financial Statements in accordance
with GAAP, except as described in the notes to such Financial Statements.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">2.6&#9;</FONT><U>Governmental
Consents</U>. No consent, approval, order or authorization of, or registration, qualification, designation, declaration or filing
with, any federal, state, municipal, local or foreign governmental authority on the part of the Company is required in connection
with the consummation of the transactions contemplated by this Agreement except for (a) compliance with the securities and blue
sky laws in the states in which the Shares are offered and/or sold, which compliance will be effected in accordance with such laws
(b) the filing of a Form 8-K with respect to this Agreement, and (c) filings necessary to deregister the Shares under the Securities
Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">2.7&#9;</FONT><U>No
Material Adverse Change</U>. Except as otherwise disclosed herein, in the SEC Documents (excluding any disclosure set forth in
any risk factor section thereof, in any section relating to forward-looking statements and any disclosures included therein to
the extent they are cautionary, protective or forward-looking in nature), since December 31, 2012, there have not been any changes
in the assets, liabilities, business prospects, condition (financial or otherwise), or operations of the Company except for changes
which have not been or could not reasonably be expected to have, either individually or in the aggregate, a material adverse effect
on the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">2.8&#9;</FONT><U>Authorized
Capital Stock</U>. The authorized capital stock of the Company consists of (a) fifty million (50,000,000) shares of Common Stock
and (b)&nbsp;one million (1,000,000) shares of preferred stock, par value $0.01 per share (&ldquo;<B><I>Preferred Stock</I></B>&rdquo;).
As of the date hereof, (i)&nbsp;28,598,933<B> </B>shares of Common Stock are issued and outstanding, (ii) 338,398<B> </B>shares
of Common Stock were held by the Company as non-voting treasury shares, (iii) no shares of Preferred Stock are issued and outstanding,
(iv) 3,238,745 shares of Common Stock <FONT STYLE="color: black">are </FONT>reserved for issuance pursuant to outstanding unexercised
options to purchase shares of Common Stock, <FONT STYLE="color: black">(v) 626,190<B> </B></FONT>shares of Common Stock <FONT STYLE="color: black">are
reserved for issuance upon the exercise of Warrants (excluding shares issuable under the convertible note held by Rho which is
being discharged at closing)</FONT>. All of the issued and outstanding shares of capital stock of the Company have been duly authorized
and validly issued and are fully paid and nonassessable and free of preemptive and similar rights. For purposes of this Agreement,
the term &ldquo;<B><I>Warrant</I></B>&rdquo; shall mean any stock appreciation rights, warrants, convertible or exchangeable securities
or other rights, contracts, commitments, agreements, understandings or arrangements of any kind relating to the issuance of any
equity interests or similar rights of the Company or granting to any individual or entity any right to participate in the equity
or income of the Company or to participate in or direct the election of any director or officer of the Company or the manner in
which any shares of capital stock or other securities of the Company are voted, or other rights of any kind (absolute, contingent
or otherwise) entitling any individual or entity to acquire or otherwise receive from the Company any shares of capital stock or
other securities or receive or exercise any benefits or</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: justify">rights similar to any rights enjoyed by or inuring to the holder of capital
stock of the Company, including without limitation &ldquo;phantom stock&rdquo; or stock appreciation rights.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">2.9&#9;</FONT><U>Litigation</U>.
There is no action, claim, dispute, arbitration, audit, hearing, inquiry, investigation, legal proceeding, administrative enforcement
proceeding, litigation, case, or suit (whether civil, criminal, administrative or investigative) pending or, to the knowledge of
the Company, threatened against the Company or any of its Subsidiaries or any of their respective assets or properties which (a)&nbsp;could
reasonably be expected to have a material adverse effect on the Company or (b)&nbsp;would impair the ability of the Company to
perform in any material respect its obligations under this Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">2.10&#9;</FONT><U>Use
of Proceeds</U>. The proceeds of the sale of the Shares will be used by the Company for working capital and general corporate purposes.
None of the proceeds of the sale of the Shares will be distributed to any stockholder of the Company or used to redeem any capital
stock of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">2.11&#9;</FONT><U>Brokers
and Finders</U>. Except for the amount payable to Needham &amp; Company as set forth on <U>Schedule A</U>, no individual or entity
will have, as a result of the transactions contemplated by this Agreement, any valid right, interest or claim against or upon the
Company or Purchaser for any commission, fee or other compensation pursuant to any agreement, arrangement or understanding entered
into by or on behalf of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">2.12&#9;</FONT><U>No
Directed Selling Efforts or General Solicitation</U>. Neither the Company nor any individual or entity acting on its behalf has
conducted any general solicitation or general advertising (as those terms are used in Regulation D) in connection with the offer
or sale of any of the Shares.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">2.13&#9;</FONT><U>No
Integrated Offering</U>. Neither the Company nor any individual or entity acting on its or their behalf has, directly or indirectly,
made any offers or sales of any Company security or solicited any offers to buy any security, under circumstances that would adversely
affect reliance by the Company on Section 4(2) of the Securities Act for the exemption from registration for the transactions contemplated
hereby or would require registration of the Shares under the Securities Act.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">2.14&#9;</FONT><U>Private
Placement</U>. Assuming the accuracy of the representations of Purchaser hereunder, the offer and sale of the Shares to Purchaser
as contemplated hereby is exempt from the registration requirements of the Securities Act.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">2.15&#9;</FONT><U>Internal
Accounting Controls</U>. Except as described in the SEC Documents, the Company maintains a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management&rsquo;s general or
specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity
with GAAP, (iii) access to assets is permitted only in accordance with management&rsquo;s general or specific authorization, and
(iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">2.16&#9;</FONT><U>Sarbanes-Oxley;
Disclosure Controls and Procedures</U><FONT STYLE="font-family: Times New Roman, Times, Serif">. </FONT><FONT STYLE="color: black">To
its knowledge, the Company is in compliance in all material respects with all of the provisions of the Sarbanes-Oxley Act of 2002,
as amended, that are applicable to it or any of its Subsidiaries.&nbsp; Except as disclosed in the SEC Documents, the Company
has established and maintains disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) that
are effective in all material respects to ensure that material information relating to the Company, including any of its Subsidiaries,
is made known to its chief executive officer and chief financial officer by others within those entities.&nbsp; The Company&rsquo;s
certifying officers have evaluated the effectiveness of the Company&rsquo;s controls and procedures as of the end of the period
covered by the most recently filed quarterly or annual periodic report under the Exchange Act (such date, the <B>&ldquo;<I>Evaluation
Date</I>&rdquo;</B>).&nbsp; The Company presented in its most recently filed quarterly or annual periodic report under the Exchange
Act the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based on their
evaluations as of the Evaluation Date.&nbsp; Since the Evaluation Date, there have been no significant changes in the Company&rsquo;s
internal controls over financial reporting (as defined in Item 307(b) of Regulation S-K under the Exchange Act) or, to the Company&rsquo;s
knowledge, in other factors that could significantly affect the Company&rsquo;s internal controls over financial reporting.</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">2.17&#9;</FONT><U>Transactions
with Affiliates</U>. Except as disclosed in the SEC Documents, none of the officers or directors of the Company or any of its Subsidiaries
and none of the employees of the Company or any of its Subsidiaries is presently a party to any loan, lease, agreement, contract,
royalty agreement, management contract or other transaction with the Company or any of its Subsidiaries or to a presently contemplated
transaction (other than for services as employees, officers and directors in the ordinary course of business) that would be required
to be disclosed pursuant to Item 404 of Regulation S-K promulgated under the Securities Act.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">2.18&#9;</FONT><U>No
Undisclosed Liabilities</U>. Except as disclosed in the SEC Documents, in the Company balance sheets dated April 30, 2013 and May
15, 2013, correct and complete copies of which are set forth on <U>Section 2.18</U> of the Disclosure Schedules, and except for
liabilities incurred in the ordinary course of business, neither the Company nor any of its Subsidiaries has any liabilities, absolute,
contingent, unliquidated or otherwise, whether due or to become due of the type required to be disclosed on a balance sheet or
in the related notes to consolidated financial statements prepared in accordance with GAAP, that individually, or in the aggregate,
are material to the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">2.19&#9;</FONT><U>State
Takeover Statutes</U>. The Company has taken all actions required to be taken by it in order to exempt this Agreement and the transactions
contemplated hereby from the provisions of Section 203 of the DGCL and, accordingly, that section does not apply to the purchase
and sale of the Shares pursuant to this Agreement or any other transaction contemplated hereby. No other &ldquo;control share acquisition&rdquo;,
&ldquo;fair price&rdquo; or other anti-takeover regulations enacted under state or federal laws in the United States apply to this
Agreement or any of the transactions contemplated hereby.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">2.20&#9;</FONT><U>Disclosure</U>.
The Company understands and confirms that Purchaser will rely on the foregoing representations and warranties in purchasing the
Shares.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: small-caps bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><FONT STYLE="text-transform: uppercase; color: black">article
3</FONT><BR>
<U>REPRESENTATIONS AND WARRANTIES OF PURCHASER</U></P>

<P STYLE="font: small-caps bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Purchaser hereby represents
and warrants to the Company:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">3.1&#9;</FONT><U>Authorization</U>.
Purchaser has all requisite legal and corporate power and has taken all requisite corporate action to execute and deliver this
Agreement, to purchase the Shares to be purchased by it, and to carry out and perform all of its obligations under this Agreement.
This Agreement constitutes a legal, valid and binding obligation of Purchaser, enforceable in accordance with its terms, except
(i)&nbsp;as limited by applicable bankruptcy, insolvency, reorganization or similar laws relating to or affecting the enforcement
of creditors&rsquo; rights generally and (ii)&nbsp;as limited by equitable principles generally. The execution and delivery of
this Agreement by Purchaser does not, and the performance of this Agreement and the compliance with the provisions hereof, including
the purchase of the Shares and the Merger, will not conflict with, or result in a breach or violation of the terms, conditions
or provisions of, or constitute a default under, or result in the creation or imposition of any lien pursuant to the terms of,
the Certificate of Incorporation or the Bylaws of Purchaser, or any statute, law, rule or regulation or any state or federal order,
judgment or decree or any indenture, mortgage, lease or other material agreement or instrument to which Purchaser is a party or
to which its properties are subject.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">3.2&#9;</FONT><U>Investment
Experience</U>. Purchaser is an &ldquo;accredited investor&rdquo; as defined in Rule&nbsp;501(a) under the Securities Act. Purchaser
is familiar with the Company&rsquo;s business affairs and financial condition and has had access to and has acquired sufficient
information about the Company to reach an informed and knowledgeable decision to acquire the Shares. Purchaser has such business
and financial experience as is required so as to be able to evaluate the risks and merits of its investment in the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">3.3&#9;</FONT><U>Investment
Intent</U>. Purchaser is purchasing the Shares for its own account as principal, for investment purposes only, and not with a present
view to, or for, resale, distribution or fractionalization thereof, in whole or in part, within the meaning of the Securities Act.
Purchaser understands that its acquisition of the Shares has not been registered under the Securities Act or registered or qualified
under any state securities law in reliance on specific exemptions therefrom, which exemptions may depend upon, among other things,
the bona fide nature of Purchaser&rsquo;s investment intent as expressed herein. Purchaser will not, directly or indirectly, offer,
sell, pledge, transfer or otherwise dispose of (or solicit any offers to buy, purchase or otherwise acquire or take a pledge of)
any of the Shares except in compliance with the Securities Act, and the rules and regulations promulgated thereunder.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">3.4&#9;</FONT><U>No
General Solicitation</U>. Neither the Purchaser nor any individual or entity acting on its behalf has conducted any general solicitation
or general advertising (as those terms are used in Regulation D) in connection with the offer or sale of any of the Shares.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">3.5&#9;<U>Brokers and
Finders</U>. No individual or entity will have, as a result of the transactions contemplated by this Agreement, any valid right,
interest or claim against or upon the Company or Purchaser for any commission, fee or other compensation pursuant to any agreement,
arrangement or understanding entered into by or on behalf of Purchaser.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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4</FONT><BR>
<U>COVENANTS</U></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">4.1&#9;</FONT><U>Merger</U>.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="color: black">(a)&#9;</FONT>Purchaser
agrees to effect the Merger within one business day following the Closing in accordance with Section&nbsp;253 of the DGCL by filing
all necessary documentation, including by filing a Certificate of Ownership and Merger with the Secretary of State of the State
of Delaware (the &ldquo;<B><I>Secretary of State</I></B>&rdquo;) in accordance with Section 253 of the DGCL. The Merger shall become
effective at the time that the Certificate of Ownership and Merger is duly filed with the Secretary of State, or at such later
time as is agreed upon by the parties hereto and specified in the Certificate of Ownership and Merger. The time when the Merger
becomes effective is hereinafter referred to as the &ldquo;<B><I>Effective Time</I></B>&rdquo;.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="color: black">(b)&#9;</FONT>At
the Effective Time, (i)&nbsp;Purchaser shall be merged with and into the Company, whereupon the separate existence of Purchaser
shall cease and (ii) the Company shall be the surviving corporation in the Merger (the &ldquo;<B><I>Surviving Corporation</I></B>&rdquo;)
and shall continue to be governed by the laws of the State of Delaware. The Merger shall have the effects set forth in this Agreement
and the applicable provisions of the DGCL. Without limiting the generality of the foregoing, and subject thereto, at the Effective
Time, all property, rights, powers, privileges and franchises of the Company and Purchaser shall vest in the Surviving Corporation,
and all debts, liabilities and duties of the Company and Purchaser shall become the debts, liabilities and duties of the Surviving
Corporation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="color: black">(c)&#9;</FONT>At
the Effective Time, by virtue of the Merger and without any action on the part of any holder of any share of Common Stock:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in"><FONT STYLE="color: black">(i)&#9;</FONT>each
share of common stock, par value $0.01 per share, of Purchaser issued and outstanding immediately prior to the Effective Time shall
be converted into and become one (1) validly issued, fully paid and non-assessable share of common stock, par value $0.01 per share,
of the Surviving Corporation;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in"><FONT STYLE="color: black">(ii)&#9;</FONT>all
shares of Common Stock that are held by the Company as non-voting treasury shares and any shares of Common Stock owned by Purchaser
or Clear Mode, LLC, a Delaware limited liability company and the sole stockholder of Purchaser (&ldquo;<B><I>Parent</I></B>&rdquo;)
shall be canceled and retired and shall cease to exist, and no stock of the Surviving Corporation or other consideration shall
be delivered in exchange therefor;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in"><FONT STYLE="color: black">(iii)&#9;</FONT>each
issued and outstanding share of Common Stock (other than shares to be canceled in accordance with <U>Section 4.1(c)(ii)</U> above
and other than shares for which the holder has demanded and perfected such holder&rsquo;s right to an appraisal in accordance with
the DGCL and has not effectively withdrawn or lost such right to appraisal (&ldquo;<B><I>Dissenting Shares</I></B>&rdquo;) shall
be converted into the right to receive $0.10 in cash (the &ldquo;<B><I>Per Share</I></B> <B><I>Merger Price</I></B>&rdquo;), without
interest; and</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in"><FONT STYLE="color: black">(iv)&#9;</FONT>each
share of Common Stock converted in accordance with <U>Section&nbsp;4.1(c)(iii)</U> above shall no longer be outstanding and shall
automatically be canceled and</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: justify">retired and shall cease to exist, and each holder of a certificate representing any such shares shall
cease to have any rights with respect thereto, except the right to receive the Per Share Merger Price, upon the surrender of such
certificate, without interest.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="color: black">(d)&#9;</FONT>At
the Effective Time, by virtue of the Merger and without any action on the part of the holder thereof, each outstanding Dissenting
Share shall not be converted into or represent a right to receive the Per Share Merger Price pursuant to <U>Section&nbsp;4.1(c)(iii)</U>
above, but the holder thereof shall be entitled only to such rights as are granted by the applicable provisions of the DGCL; <U>provided</U>,
<U>however</U>, that any Dissenting Share held by an individual or entity at the Effective Time who shall, after the Effective
Time, withdraw the demand for appraisal or lose the right of appraisal, in either case pursuant to the DGCL, shall be deemed to
be converted into, as of the Effective Time, the right to receive the Per Share Merger Price pursuant to <U>Section&nbsp;4.1(c)(iii)</U>
above.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="color: black">(e)&#9;</FONT>At
the Effective Time, (i)&nbsp;the Restated Certificate, as in effect immediately prior to the Effective Time, shall be amended as
set forth in the form attached to the Certificate of Ownership and Merger and, as so amended, shall be the certificate of incorporation
of the Surviving Corporation, until thereafter duly amended as provided therein and by applicable Law, and (b) the bylaws of Purchaser,
as in effect immediately prior to the Effective Time, shall be the bylaws of the Surviving Corporation, until thereafter duly amended
as provided therein and by applicable law.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="color: black">(f)&#9;</FONT>The
directors and officers of Purchaser immediately prior to the Effective Time shall, from and after the Effective Time, be the directors
and officers, respectively, of the Surviving Corporation until their respective successors have been duly elected or appointed
and qualified or until their earlier death, resignation or removal in accordance with the DGCL and the certificate of incorporation
and the bylaws of the Surviving Corporation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="color: black">(g)&#9;</FONT>Within
ten days (10) after the Effective Time, the Surviving Corporation shall notify each stockholder of the Company that the Merger
has become effective and that appraisal rights are available pursuant to Section 262 of the DGCL.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">4.2&#9;</FONT><U>Indemnification;
Directors&rsquo; and Officers&rsquo; Insurance</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="color: black">(a)&#9;</FONT>From
and after the Effective Time, the Surviving Corporation shall indemnify, defend and hold harmless (and advance funds in respect
of each of the foregoing), each present and former director and officer of the Company (in all of their capacities), including
any individual who becomes a director or officer prior to the Effective Time (collectively, the &ldquo;<B><I>D&amp;O Indemnified
Parties</I></B>&rdquo;), against any costs (including amounts paid in settlement or compromise) or expenses (including reasonable
attorneys&rsquo; fees and expenses and disbursements), judgments, fines, penalties, losses, claims, damages or liabilities in connection
with any action, claim, dispute, arbitration, audit, hearing, inquiry, investigation, legal proceeding, administrative enforcement
proceeding, litigation, case, or suit (whether civil, criminal, administrative or investigative), whenever asserted or claimed,
based on, arising out of or pertaining to, in whole or in part, any acts or omissions by a D&amp;O Indemnified Party in the D&amp;O
Indemnified Party&rsquo;s capacity as a director or officer of the Company prior to the Effective Time, to the fullest extent that
the Company would be permitted under applicable law to do so</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: justify">and in accordance with the Company&rsquo;s Certificate of Incorporation
and By-laws as in effect on the date hereof and the director indemnity agreements set forth on the schedules to this Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="color: black">(b)&#9;</FONT>The
Surviving Corporation shall, effective as of the Effective Time, obtain for the benefit of the D&amp;O Indemnified Parties a &ldquo;runoff&rdquo;
or &ldquo;tail&rdquo; directors&rsquo; and officers&rsquo; insurance policy (the &ldquo;<B><I>D&amp;O Tail Policy</I></B>&rdquo;).
Subject to the other conditions set forth in this <U>Section 4.2(b)</U>, the D&amp;O Tail Policy shall, for a period of six (6)
years after the Effective Time, provide coverage for acts or omissions occurring at or prior to the Effective Time covering each
such individual covered by the officers&rsquo; and directors&rsquo; liability insurance policy of the Company in effect on the
date of this Agreement (the &ldquo;<B><I>Company D&amp;O Policy</I></B>&rdquo;) on terms with respect to coverage, retentions and
limits of liability and in amounts no less favorable than those of the Company D&amp;O Policy or, if substantially equivalent insurance
coverage is unavailable, the broadest available coverage. The D&amp;O Tail Policy shall be placed with an insurer with the same
or better A.M. Best rating as the current carrier for the Company D&amp;O Policy. The forgoing notwithstanding, (i)&nbsp;the Surviving
Corporation shall not be required to pay a one-time premium for the D&amp;O Tail Policy in excess of two hundred percent (200%)
of the annual premium currently paid by the Company for the Company D&amp;O Policy; and (ii)&nbsp;if the proposed one-time premium
for such insurance coverage exceeds two hundred percent (200%) of the annual premium currently paid by the Company for such coverage,
the Surviving Corporation shall obtain a policy with the longest coverage period available for a cost not exceeding such amount.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: small-caps bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><FONT STYLE="text-transform: uppercase; color: black">article
5</FONT><BR>
<U>RESTRICTIONS ON TRANSFERABILITY; </U><BR>
<U>COMPLIANCE WITH SECURITIES ACT</U></P>

<P STYLE="font: small-caps bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">5.1&#9;</FONT><U>Securities
Act Restrictions</U>. The Shares shall not be transferable in the absence of a registration under the Securities Act or an exemption
therefrom. Each certificate representing Shares shall bear a restrictive legend in substantially the following form (and a stop
transfer order may be placed against transfer of the certificates for such shares):</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in 0pt 1in; text-align: justify; text-indent: 0in">&ldquo;THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES OR IN ANY OTHER JURISDICTION. THE SECURITIES REPRESENTED HEREBY MAY NOT BE OFFERED, SOLD
OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER APPLICABLE SECURITIES LAWS UNLESS
OFFERED, SOLD OR TRANSFERRED PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THOSE LAWS.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in 0pt 1in; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">5.2&#9;</FONT><U>Transfer
of Securities</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="color: black">(a)&#9;</FONT>Except
as otherwise provided in this Agreement, Purchaser hereby covenants with the Company not to make any sale of Shares except:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in"><FONT STYLE="color: black">(i)&#9;</FONT>in
accordance with an effective registration statement, in which case Purchaser shall have delivered a current prospectus in connection
with such sale; <U>provided</U><I>, </I><U>however</U>, that if Rule 172 is then in effect and applicable, Purchaser shall have
confirmed that a current prospectus was deemed to be delivered in connection with such sale; or</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in"><FONT STYLE="color: black">(ii)&#9;</FONT>in
accordance with Rule&nbsp;144, in which case Purchaser covenants to comply with Rule&nbsp;144.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="color: black">(b)&#9;</FONT>Except
as otherwise provided in this Agreement, Purchaser further acknowledges and agrees that, if Purchaser is selling any of the Shares
using the prospectus forming a part of an effective registration statement, such Shares are not transferable on the books of the
Company unless the certificate evidencing such Shares is submitted to the Company&rsquo;s transfer agent and a separate certificate
executed by an officer of, or other individual duly authorized by, Purchaser in the form attached hereto as <B>Exhibit&nbsp;A</B>
is submitted to the Company&rsquo;s transfer agent.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: small-caps bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><FONT STYLE="text-transform: uppercase; color: black">article
6</FONT><BR>
<U>MISCELLANEOUS</U></P>

<P STYLE="font: small-caps bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">6.1&#9;</FONT><U>Governing
Law</U>.<B> </B> Except to the extent that the corporate laws of the State of Delaware apply to a party, this Agreement shall be
governed by, and construed in accordance with, the laws of the State of Delaware, regardless of the laws that might otherwise govern
under applicable principles of conflicts of law thereof.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">6.2&#9;</FONT><U>Entire
Agreement, Amendment and Waiver</U><B>. </B> This Agreement constitutes the full and entire understanding and agreement between
the parties with regard to the subject hereof, and may be amended or waived only with the written consent of the parties hereto.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">6.3&#9;</FONT><U>Specific
Performance</U>. The parties hereto hereby declare that it is impossible to measure in money the damages which will accrue to a
party hereto or to its successors or assigns by reason of a failure to perform any of the obligations under this Agreement and
agree that the terms of this Agreement shall be specifically enforceable. If any party hereto or its successors or assigns institutes
any action or proceeding to specifically enforce the provisions of this Agreement, any party against whom such action or proceeding
is brought hereby waives the claim or defense therein that such party or such successor or assign has an adequate remedy at law,
and such party shall not offer in any such action or proceeding the claim or defense that such remedy at law exists.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">6.4&#9;</FONT><U>Notices,
etc</U>. All notices and other communications required or permitted under this Agreement shall be in writing and may be delivered
in person, by telecopy, overnight delivery service or registered or certified United States mail, in each case to the following
addresses, facsimile numbers or email addresses and marked to the attention of the individual (by name or title) designated below
(or to such other address, facsimile number, email address or individual as a party may designate by notice to the other party
in accordance with this section):</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in; background-color: white">if
to Purchaser, to:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 2in; text-align: left; background-color: white">Clearlake
Capital Group, L.P.<BR>
233 Wilshire Boulevard, Suite 800<BR>
Santa Monica, California 90401<BR>
Attention: &#9;Behdad Eghbali, Partner<BR>
Facsimile:&#9;(310) 400-8801<BR>
Email:<FONT STYLE="font-size: 10pt">&#9;</FONT>&#9;behdad@clearlakecapital.com</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 2in; text-align: left; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in; background-color: white">with
a copy (which shall not constitute notice) to:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 2in; text-align: left">Stradling Yocca Carlson &amp; Rauth,
P.C.<BR>
100 Wilshire Boulevard, Suite 440<BR>
Santa Monica, California 90401<BR>
Attention:&#9;David M. Smith, Esq.<BR>
Facsimile:&#9;(424) 214-7010<BR>
Email:&#9;dsmith@sycr.com</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 2in; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in; background-color: white">if
to the Company:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 2in; text-align: left; background-color: white">Bluefly,
Inc.<BR>
<FONT STYLE="color: black">42 West 39th Street</FONT><BR>
<FONT STYLE="color: black">New York, New York 10018</FONT><BR>
<FONT STYLE="color: black">Attention:&#9;James Gallagher, Esq.</FONT><BR>
<FONT STYLE="color: black">Facsimile:&#9;(917) 591-8382</FONT><BR>
<FONT STYLE="color: black">Email:&#9;james.gallagher@bluefly.com</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 2in; text-align: left; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in; background-color: white">with
a copy (which shall not constitute notice) to:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 2in; text-align: left; background-color: white">Dechert LLP<BR>
<FONT STYLE="color: black">1095 Avenue of the Americas</FONT><BR>
<FONT STYLE="color: black">New York, New York 10036</FONT><BR>
<FONT STYLE="color: black">Attention:&#9;Richard A. Goldberg, Esq. </FONT><BR>
<FONT STYLE="color: black">Facsimile:&#9;(212) 698-3599</FONT><BR>
<FONT STYLE="color: black">Email:&#9;richard.goldberg@dechert.com</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 2in; text-align: left; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">All notices and other
communications shall be effective upon the earlier of actual receipt thereof by the individual to whom notice is directed or (a)&nbsp;in
the case of notices and communications sent by personal delivery or telecopy, on the same day as personally delivered or telecopied
or on the next business day after such notice or communication arrives at the applicable address or was successfully sent to the
applicable telecopy number, if delivered or telecopied on a day that is not a business day, (b)&nbsp;in the case of notices and
communications sent by overnight delivery service, at noon (local time) on the next business day following the day such notice
or communication was sent, and (c)&nbsp;in the case of notices and communications sent by United States mail, seven days after
such notice or communication shall have been deposited in the United States mail.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">6.5&#9;</FONT><U>Severability</U>.
If any provision of this Agreement shall be judicially determined to be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">6.6&#9;</FONT><U>Counterparts</U>.
This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which together shall
constitute one instrument.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">6.7&#9;</FONT><U>Consent
to Jurisdiction; Venue</U>. In any action, proceeding or counterclaim (whether based on contract, tort, or otherwise) between the
parties arising out of or relating to this Agreement or the transactions contemplated hereby, each of the parties hereby: (a)&nbsp;irrevocably
and unconditionally consents and submits to the exclusive jurisdiction and venue of the Court of Chancery of the State of Delaware,
or if such court lacks subject matter jurisdiction over the action or proceeding, the Superior Court of the State of Delaware,
or if jurisdiction is vested exclusively in the federal courts, the United States District Court for the District of Delaware;
(b) agrees that it will not attempt to deny or defeat such jurisdiction or venue by motion or other request for leave from any
court and waives the defense of an inconvenient forum to the maintenance of any such action or proceeding; and (c) agrees that
all claims in respect of such action, proceeding or counterclaim may be heard and determined exclusively in Court of Chancery of
the State of Delaware .The consents to jurisdiction set forth in this paragraph shall not constitute general consents to service
of process in the State of Delaware and shall have no effect for any purpose, except as provided in this paragraph and shall not
be deemed to confer rights on any individual or entity other than the parties hereto. Each of the parties hereto agrees that a
final judgment in any such action, proceeding or counterclaim shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">6.8&#9;</FONT><U>Waiver
of Jury Trial</U>. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY AND ALL RIGHT
TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">6.9&#9;</FONT><U>Publicity</U>.
Except for such disclosure as may be required by SEC rules and regulations, no party hereto shall issue any press release or otherwise
make any public statement with respect to the transactions contemplated by this Agreement without the prior consent of the other
parties as to the form and substance of such press release or statement (which consent shall not be unreasonably withheld or delayed).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">6.10&#9;</FONT><U>Further
Assurances</U>. Each party to this Agreement shall do and perform or cause to be done and performed all such further acts and things
and shall execute and deliver all such other agreements, certificates, instruments and documents as the other party hereto may
reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions
contemplated hereby.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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Intentionally Left Blank</I>]</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">IN WITNESS WHEREOF,
the parties hereto have caused this Agreement to be duly executed by their respective authorized signatories as of the date first
above written.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: left"><FONT STYLE="font-variant: small-caps"><B>COMPANY</B>:</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: left"><FONT STYLE="font-variant: small-caps">BLUEFLY, INC.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left; width: 55%">&nbsp;</TD>
    <TD STYLE="text-align: left; width: 3%">By:</TD>
    <TD STYLE="text-align: left; width: 42%; border-bottom: Black 1pt solid">/s/ Joseph Park</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">Name: Joseph Park</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">Title: Chief Executive Officer</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: left"><FONT STYLE="font-variant: small-caps"><B>PURCHASER</B>:</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: left"><FONT STYLE="font-variant: small-caps">RUNWAY ACQUISITION SUB, INC.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">By:</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">/s/ Behdad Eghbali</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">Name: Behdad Eghbali</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">Title: Vice President</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 202.3pt; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 202.3pt; text-align: left"></P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 202.3pt; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right; text-indent: 0in"><FONT STYLE="font-variant: small-caps"><B>Exhibit
A</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><B>PURCHASER&rsquo;S CERTIFICATE
OF SUBSEQUENT SALE</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><B>To:</B>&#9;[<I>Insert
Name of Transfer Agent</I>]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 12%; text-align: left"><B>Attention: </B></TD>
    <TD STYLE="width: 4%; text-align: left"><B>[&#9679;]</B></TD>
    <TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left"><B>[&#9679;]</B></TD>
    <TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left"><B>[&#9679;]</B></TD>
    <TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">The undersigned, the
selling securityholder or an officer thereof, or other duly authorized person, hereby certifies that _____________________________________
represents that it has sold</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"><B>[fill in name of
selling securityholder]</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">___________ shares of
the Common Stock of Bluefly, Inc. (the &ldquo;<B><I>Company</I></B>&rdquo;) and that such shares were sold on _________________
either (i)&nbsp;in accordance with the registration statement</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: right"><B>[date]&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 109.4pt; text-align: justify; text-indent: 34.6pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">on Form S-3 with file
number <B>[____________]</B>, in which case the selling securityholder certifies that such selling securityholder has delivered
the latest prospectus provided to it by the Company in connection with such sale, <I>provided, however,</I> that if Rule 172 under
the Securities Act of 1933, as amended, is then in effect and applicable, such selling securityholder has confirmed that such latest
prospectus is deemed to be delivered in connection with such sale, or (ii)&nbsp;in accordance with Rule&nbsp;144 under the Securities
Act of 1933 (&ldquo;<B><I>Rule&nbsp;144</I></B>&rdquo;), in which case the selling securityholder certifies that it has complied
with the requirements of Rule&nbsp;144.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">Print or type:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD STYLE="vertical-align: top; width: 12%; padding: 0; text-align: left; text-indent: 0">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 34%; padding: 0; text-align: left; text-indent: 0"><B>Number of shares sold</B> (if sold on multiple dates, please provide a breakdown by date):</TD>
    <TD STYLE="vertical-align: top; width: 3%; padding: 0; text-align: left; text-indent: 0">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 51%; padding: 0; text-align: left; text-indent: 0; border-bottom: Black 1pt solid">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding: 0; text-align: left; text-indent: 0">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding: 0; text-align: left; text-indent: 0">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding: 0; text-align: left; text-indent: 0">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding: 0; text-align: left; text-indent: 0">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding: 0; text-align: left; text-indent: 0">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding: 0; text-align: left; text-indent: 0"><B>Name of selling securityholder</B>:</TD>
    <TD STYLE="vertical-align: top; padding: 0; text-align: left; text-indent: 0">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding: 0; text-align: left; text-indent: 0; border-bottom: Black 1pt solid">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding: 0; text-align: left; text-indent: 0">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding: 0; text-align: left; text-indent: 0">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding: 0; text-align: left; text-indent: 0">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding: 0; text-align: left; text-indent: 0">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding: 0; text-align: left; text-indent: 0">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding: 0; text-align: left; text-indent: 0"><B>Name of individual representing selling securityholder</B> (if an institution):</TD>
    <TD STYLE="vertical-align: top; padding: 0; text-align: left; text-indent: 0">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding: 0; text-align: left; text-indent: 0; border-bottom: Black 1pt solid">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding: 0; text-align: left; text-indent: 0">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding: 0; text-align: left; text-indent: 0">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding: 0; text-align: left; text-indent: 0">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding: 0; text-align: left; text-indent: 0">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding: 0; text-align: left; text-indent: 0">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding: 0; text-align: left; text-indent: 0"><B>Title of individual representing selling securityholder</B> (if an institution):</TD>
    <TD STYLE="vertical-align: top; padding: 0; text-align: left; text-indent: 0">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding: 0; text-align: left; text-indent: 0; border-bottom: Black 1pt solid">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0in">Signature by:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD STYLE="vertical-align: top; width: 12%; padding: 0; text-align: left; text-indent: 0">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 34%; padding: 0; text-align: left; text-indent: 0"><B>Selling securityholder or individual representative</B>:</TD>
    <TD STYLE="vertical-align: bottom; width: 3%; padding: 0; text-align: left; text-indent: 0">&nbsp;</TD>
    <TD STYLE="vertical-align: top; width: 51%; padding: 0; text-align: left; text-indent: 0; border-bottom: Black 1pt solid">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right; text-indent: 0in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right; text-indent: 0in"><FONT STYLE="font-variant: small-caps"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right; text-indent: 0in"></P>

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