<SUBMISSION>
<ACCESSION-NUMBER>0000921530-02-000528
<TYPE>SC 13D/A
<PUBLIC-DOCUMENT-COUNT>4
<FILING-DATE>20021004
<SUBJECT-COMPANY>
<COMPANY-DATA>
<CONFORMED-NAME>BLUEFLY INC
<CIK>0001030896
<ASSIGNED-SIC>5961
<IRS-NUMBER>133612110
<STATE-OF-INCORPORATION>DE
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>SC 13D/A
<ACT>34
<FILE-NUMBER>005-52401
<FILM-NUMBER>02782402
</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>
</SUBJECT-COMPANY>
<FILED-BY>
<COMPANY-DATA>
<CONFORMED-NAME>SOROS FUND MANAGEMENT LLC
<CIK>0001029160
<IRS-NUMBER>133914976
<STATE-OF-INCORPORATION>DE
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>SC 13D/A
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>888 SEVENTH AVENUE 33RD FLOOR
<CITY>NEW YORK
<STATE>NY
<ZIP>10106
<PHONE>2128721054
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>C/O AKIN, GUMP, STRAUSS,HAUER,FELD,
<STREET2>399 PARK AVENUE
<CITY>NEW YORK
<STATE>NY
<ZIP>10022
</MAIL-ADDRESS>
</FILED-BY>
<DOCUMENT>
<TYPE>SC 13D/A
<SEQUENCE>1
<FILENAME>bluefly_13d15.txt
<DESCRIPTION>SCHEDULE 13D, AMENDMENT NO. 15
<TEXT>





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

                                  SCHEDULE 13D


                    Under the Securities Exchange Act of 1934
                               (Amendment No. 15)*

                                 BLUEFLY, INC.
                          ----------------------------
                                (Name of Issuer)

                    Common Stock, Par Value $0.01 Per Share
                  -------------------------------------------
                         (Title of Class of Securities)

                                   096227103
                             ----------------------
                                 (CUSIP Number)

                              Stephen M. Vine, Esq.
                        Akin Gump Strauss Hauer & Feld LLP
                               590 Madison Avenue
                            New York, New York 10022
                                 (212) 872-1000
                  ----------------------------------------------
                  (Name, Address and Telephone Number of Person
                Authorized to Receive Notices and Communications)

                               September 27, 2002
                           --------------------------
                      (Date of Event which Requires Filing
                               of this Statement)

If the filing person has previously  filed a statement on Schedule 13G to report
the  acquisition  that is the subject of this  Schedule  13D, and is filing this
schedule because of ss.ss.240.13d-1(e),  240.13d-1(f) or 240.13d-1(g), check the
following box. [ ]

Note:  Schedules  filed in paper format shall include a signed original and five
copies of the  schedule,  including  all exhibits.  See  ss.240.13d-7  for other
parties to whom copies are to be sent.

* The remainder of this cover page shall be filled out for a reporting  person's
initial filing on this form with respect to the subject class of securities, and
for  any  subsequent   amendment   containing   information  which  would  alter
disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the  Securities  Exchange  Act of
1934 ("Act") or otherwise  subject to the liabilities of that section of the Act
but  shall be  subject  to all other  provisions  of the Act  (however,  see the
Notes).


                          Continued on following pages
                               Page 1 of 38 Pages
                             Exhibit Index: Page 16


<PAGE>
                             SCHEDULE 13D

CUSIP NO. 096227103                                           Page 2 of 38 Pages


1        Names of Reporting Persons
         I.R.S. Identification Nos. of above persons (entities only).

                  QUANTUM INDUSTRIAL PARTNERS LDC

2        Check the Appropriate Box if a Member of a Group (See Instructions)
                                                     a. [   ]
                                                     b. [ X ]

3        SEC Use Only

4        Source of Funds (See Instructions)

                  WC

5        Check if Disclosure of Legal Proceedings Is Required Pursuant to
         Items 2(d) or 2(e)

                                      [ ]

6        Citizenship or Place of Organization

                  Cayman Islands

                           7        Sole Voting Power
 Number of                                 34,778,119
  Shares
Beneficially               8        Shared Voting Power
 Owned By                                   0
   Each
 Reporting                 9        Sole Dispositive Power
  Person                                   34,778,119
   With
                           10       Shared Dispositive Power
                                            0

11       Aggregate Amount Beneficially Owned by Each Reporting Person

                                           34,778,119**

12       Check if the Aggregate Amount in Row (11) Excludes Certain Shares
         (See Instructions)

                                     [ X ]

13       Percent of Class Represented By Amount in Row (11)

                                           87.2%

14       Type of Reporting Person (See Instructions)

                  OO; IV




----------
**   See Item 6 of Amendment No. 14 to Schedule 13D.

<PAGE>
                             SCHEDULE 13D

CUSIP NO. 096227103                                           Page 3 of 38 Pages


1        Names of Reporting Persons
         I.R.S. Identification Nos. of above persons (entities only).

                  QIH MANAGEMENT INVESTOR, L.P.

2        Check the Appropriate Box if a Member of a Group (See Instructions)
                                                     a. [   ]
                                                     b. [ X ]

3        SEC Use Only

4        Source of Funds (See Instructions)

                  AF

5        Check if Disclosure of Legal Proceedings Is Required Pursuant to
         Items 2(d) or 2(e)
                 [   ]

6        Citizenship or Place of Organization

                  Delaware

                           7        Sole Voting Power
 Number of                                 34,778,119
  Shares
Beneficially               8        Shared Voting Power
 Owned By                                  0
   Each
 Reporting                 9        Sole Dispositive Power
  Person                                   34,778,119
   With
                           10       Shared Dispositive Power
                                           0

11       Aggregate Amount Beneficially Owned by Each Reporting Person

                                           34,778,119**

12       Check if the Aggregate Amount in Row (11) Excludes Certain Shares
         (See Instructions)

                                            [ X ]

13       Percent of Class Represented By Amount in Row (11)

                                           87.2%

14       Type of Reporting Person (See Instructions)

                  PN; IA




----------
**   See Item 6 of Amendment No. 14 to Schedule 13D.

<PAGE>
                             SCHEDULE 13D

CUSIP NO. 096227103                                           Page 4 of 38 Pages


1        Names of Reporting Persons
         I.R.S. Identification Nos. of above persons (entities only).

                  QIH MANAGEMENT, INC.

2        Check the Appropriate Box if a Member of a Group (See Instructions)
                                                     a. [   ]
                                                     b. [ X ]

3        SEC Use Only

4        Source of Funds (See Instructions)

                  AF

5        Check if Disclosure of Legal Proceedings Is Required Pursuant to
         Items 2(d) or 2(e)
                  [   ]


6        Citizenship or Place of Organization

                  Delaware

                           7        Sole Voting Power
 Number of                                 34,778,119
  Shares
Beneficially               8        Shared Voting Power
 Owned By                                  0
   Each
 Reporting                 9        Sole Dispositive Power
  Person                                   34,778,119
   With
                           10       Shared Dispositive Power
                                           0

11       Aggregate Amount Beneficially Owned by Each Reporting Person

                                           34,778,119**

12       Check if the Aggregate Amount in Row (11) Excludes Certain Shares
         (See Instructions)

                                             [ X ]

13       Percent of Class Represented By Amount in Row (11)

                                           87.2%

14       Type of Reporting Person (See Instructions)

                  CO




----------
**   See Item 6 of Amendment No. 14 to Schedule 13D.


<PAGE>
                             SCHEDULE 13D
CUSIP NO. 096227103                                           Page 5 of 38 Pages



1        Names of Reporting Persons
         I.R.S. Identification Nos. of above persons (entities only).

                  SOROS FUND MANAGEMENT LLC

2        Check the Appropriate Box if a Member of a Group (See Instructions)
                                                     a. [   ]
                                                     b. [ X ]

3        SEC Use Only

4        Source of Funds (See Instructions)

                  AF

5        Check if Disclosure of Legal Proceedings Is Required Pursuant to
         Items 2(d) or 2(e)
                  [ ]

6        Citizenship or Place of Organization

                  Delaware

                           7        Sole Voting Power
 Number of                                 34,778,119
  Shares
Beneficially               8        Shared Voting Power
 Owned By                                  0
   Each
 Reporting                 9        Sole Dispositive Power
  Person                                   34,778,119
   With
                           10       Shared Dispositive Power
                                           0

11       Aggregate Amount Beneficially Owned by Each Reporting Person

                                           34,778,119**

12       Check if the Aggregate Amount in Row (11) Excludes Certain Shares
         (See Instructions)
                                            [ ]


13       Percent of Class Represented By Amount in Row (11)

                                           87.2%

14       Type of Reporting Person (See Instructions)

                  OO; IA




----------
**   See Item 6 of Amendment No. 14 to Schedule 13D.


<PAGE>
                             SCHEDULE 13D

CUSIP NO. 096227103                                           Page 6 of 38 Pages

1        Names of Reporting Persons
         I.R.S. Identification Nos. of above persons (entities only).

                  SFM DOMESTIC INVESTMENTS LLC

2        Check the Appropriate Box if a Member of a Group (See Instructions)
                                                     a. [   ]
                                                     b. [ X ]

3        SEC Use Only

4        Source of Funds (See Instructions)

                  WC

5        Check if Disclosure of Legal Proceedings Is Required Pursuant to
         Items 2(d) or 2(e)
                 [   ]

6        Citizenship or Place of Organization

                  Delaware

                           7        Sole Voting Power
 Number of                                 1,137,946
  Shares
Beneficially               8        Shared Voting Power
 Owned By                                  0
   Each
 Reporting                 9        Sole Dispositive Power
  Person                                   1,137,946
   With
                           10       Shared Dispositive Power
                                           0

11       Aggregate Amount Beneficially Owned by Each Reporting Person

                                           1,137,946**

12       Check if the Aggregate Amount in Row (11) Excludes Certain Shares
         (See Instructions)
                                            [   ]

13       Percent of Class Represented By Amount in Row (11)

                                           10.0%

14       Type of Reporting Person (See Instructions)

                  OO




----------
**   See Item 6 of Amendment No. 14 to Schedule 13D.


<PAGE>
                             SCHEDULE 13D

CUSIP NO. 096227103                                           Page 7 of 38 Pages


1        Names of Reporting Persons
         I.R.S. Identification Nos. of above persons (entities only).

                  GEORGE SOROS (in the capacity described herein)

2        Check the Appropriate Box if a Member of a Group (See Instructions)
                                                     a. [   ]
                                                     b. [ X ]

3        SEC Use Only

4        Source of Funds (See Instructions)

                  AF

5        Check if Disclosure of Legal Proceedings Is Required Pursuant to
         Items 2(d) or 2(e)
                 [   ]

6        Citizenship or Place of Organization

                  United States

                           7        Sole Voting Power
 Number of                                 35,916,065
  Shares
Beneficially               8        Shared Voting Power
Owned By                                   0
  Each
 Reporting                 9        Sole Dispositive Power
  Person                                   35,916,065
   With
                           10       Shared Dispositive Power
                                           0

11       Aggregate Amount Beneficially Owned by Each Reporting Person

                                           35,916,065**

12       Check if the Aggregate Amount in Row (11) Excludes Certain Shares
         (See Instructions)
                                            [   ]

13       Percent of Class Represented By Amount in Row (11)

                                           87.9%

14       Type of Reporting Person (See Instructions)

                  IA




----------
**   See Item 6 of Amendment No. 14 to Schedule 13D.


<PAGE>

                                                              Page 8 of 38 Pages


          This  Amendment  No. 15 to  Schedule  13D  relates to shares of Common
Stock,  $0.01  par value  per  share  (the  "Shares"),  of  Bluefly,  Inc.  (the
"Issuer").  This Amendment No. 15 supplementally amends the initial statement on
Schedule 13D, dated August 6, 1999, and all  amendments  thereto  (collectively,
the "Initial  Statement"),  filed by the Reporting  Persons (as defined herein).
This Amendment No. 15 is being filed by the Reporting Persons to report that QIP
(as defined  herein) and SFM  Domestic  Investments  (as  defined  herein)  have
entered into agreements with the Issuer as described herein, whereby QIP and SFM
Domestic  Investments  each:  A) purchased  from the Issuer  shares of preferred
stock  convertible into Shares;  and B) received  convertible  demand promissory
notes  (collectively,  the "Notes") of the Issuer  pursuant to which each of QIP
and SFM Domestic Investments acquired the right, at their option, to convert all
or any portion of the principal amount of such Notes,  including any accrued and
unpaid interest thereon, into shares of preferred stock convertible into Shares,
as described  herein.  Capitalized  terms used but not defined herein shall have
the meanings ascribed to them in the Initial Statement. The Initial Statement is
supplementally amended as follows.

Item 2.  Identity and Background

          This  Statement  is being  filed on  behalf  of each of the  following
persons (collectively, the "Reporting Persons"):

                  (i)      Quantum Industrial Partners LDC ("QIP");

                  (ii)     QIH Management Investor, L.P. ("QIHMI");

                  (iii)    QIH Management, Inc. ("QIH Management");

                  (iv)     Soros Fund Management LLC ("SFM LLC");

                  (v)      SFM Domestic Investments LLC ("SFM Domestic
                           Investments"); and

                  (vi)     Mr. George Soros ("Mr. Soros").

          This Statement  relates to the Shares held for the accounts of QIP and
SFM Domestic Investments.

Item 3.  Source and Amount of Funds or Other Consideration

          The information  set forth in Item 6 hereof is hereby  incorporated by
reference into this Item 3.

          QIP  expended  $2,904,900  of its  working  capital  to  purchase  the
securities  reported herein as being acquired since August 20, 2002 (the date of
the last  filing on  Schedule  13D).  This  number  consists  of A)  $968,300 to
purchase shares of the Issuer's Series C Convertible  Preferred Stock,  $.01 par
value per share ("Series C Preferred  Stock") pursuant to the Series C Preferred
Stock and Note  Purchase  Agreement  dated as of September  27, 2002 between the
Issuer,  QIP and SFM Domestic  Investments  (the "Purchase  Agreement"),  and B)
$1,936,600 as the principal  amount of the  convertible  demand  promissory note
dated  September 27, 2002,  provided by the Issuer to QIP (the "QIP Note").  SFM
Domestic  Investments  expended  $95,100 of its working  capital to purchase the
securities  reported herein as being acquired since August 20, 2002 (the date of
the last filing on Schedule 13D). This number consists of A) $31,700 to purchase
shares of the Series C Preferred Stock pursuant to the Purchase  Agreement,  and
B) $63,400 as the principal  amount of the  convertible  demand  promissory note
dated September 27, 2002 provided by the Issuer to SFM Domestic Investments (the
"SFM Domestic Note").


<PAGE>

                                                              Page 9 of 38 Pages


Item 4.   Purpose of Transaction

          The information  set forth in Item 6 hereof is hereby  incorporated by
reference into this Item 4.

          The  Reporting  Persons  reserve the right to acquire,  or cause to be
acquired,  additional  securities  of the Issuer,  to dispose of, or cause to be
disposed,  such securities at any time or to formulate other purposes,  plans or
proposals  regarding the Issuer or any of its  securities,  to the extent deemed
advisable in light of general  investment and trading  policies of the Reporting
Persons, market conditions or other factors.

Item 5.  Interest in Securities of the Issuer

          The information  set forth in Item 6 hereof is hereby  incorporated by
reference into this Item 5.

     (a) (i) Each of QIP,  QIHMI,  QIH  Management and SFM LLC may be deemed the
beneficial owner of 34,778,119 Shares  (approximately  87.2% of the total number
of  Shares  outstanding  assuming  the  exercise  and  conversion  of all of the
securities  (excluding the Series 2002 Preferred  Stock) held for the account of
QIP). This number consists of A) 5,287,082  Shares, B) 3,806,923 Shares issuable
upon the conversion of 445,410 shares of Series A Preferred Stock, C) 21,658,444
Shares  issuable upon the  conversion of 8,607,843  shares of Series B Preferred
Stock,  D) 363,113  Shares  issuable  upon the exercise of warrants held for the
account of QIP, E) 96,830  Shares  issuable  upon the exercise of Warrant No. 11
held for the  account of QIP, F) 58,098  Shares  issuable  upon the  exercise of
Warrant No. 13 held for the account of QIP, G) 96,830  Shares  issuable upon the
exercise  of  Warrant  No. 15 held for the  account of QIP,  H)  287,250  Shares
issuable  upon the  exercise  of Warrant  No. 17 held for the account of QIP, I)
1,041,183  Shares  currently  issuable  upon the  conversion  of 968.3 shares of
Series C Preferred  Stock,  and J) 2,082,366 Shares issuable upon the conversion
of the  shares  of  Series  C  Preferred  Stock  currently  obtainable  upon the
conversion of the QIP Note.

          (ii) SFM Domestic  Investments  may be deemed the beneficial  owner of
1,137,946 Shares  (approximately 10.0% of the total number of Shares outstanding
assuming the exercise and conversion of all the securities (excluding the Series
2002 Preferred Stock) held for its account).  This number consists of A) 172,995
Shares,  B) 124,701  Shares  issuable  upon the  conversion  of 14,590 shares of
Series A Preferred  Stock held for its account,  C) 708,469 Shares issuable upon
the  conversion  of  281,571  shares of Series B  Preferred  Stock  held for its
account,  D) 11,887  Shares  issuable upon the exercise of warrants held for its
account,  E) 3,170 Shares  issuable upon the exercise of Warrant No. 12 held for
its account,  F) 1,902 Shares  issuable upon the exercise of Warrant No. 14 held
for its account,  G) 3,170 Shares  issuable  upon the exercise of Warrant No. 16
held for its account,  H) 9,394 Shares issuable upon the exercise of Warrant No.
18 held for its account, I) 34,086 Shares currently issuable upon the conversion
of 31.7 shares of Series C Preferred  Stock held for its account,  and J) 68,172
Shares  issuable upon the  conversion of the shares of Series C Preferred  Stock
currently obtainable upon the conversion of the SFM Domestic Note.

          (iii) Mr.  Soros  may be deemed  the  beneficial  owner of  35,916,065
Shares  (approximately  87.9% of the total number of Shares outstanding assuming
the exercise and conversion of all of the securities  (excluding the Series 2002
Preferred  Stock) held for the  accounts of QIP and SFM  Domestic  Investments).
This  number  consists  of A)  34,778,119  Shares  which  may  be  deemed  to be
beneficially  owned by QIP as described above and B) 1,137,946  Shares which may
be deemed to be  beneficially  owned by SFM  Dometic  Investments  as  described
above.


<PAGE>

                                                             Page 10 of 38 Pages


     (b) (i) Each of QIP,  QIHMI,  QIH  Management and SFM LLC (by virtue of the
QIP  contract)  may be deemed to have the sole  power to direct  the  voting and
disposition  of the  34,778,119  Shares  which may be deemed to be  beneficially
owned by QIP as described above.

          (ii) SFM Domestic  Investments may be deemed to have the sole power to
direct the voting and disposition of the 1,137,946 Shares which may be deemed to
be beneficially owned by SFM Domestic Investments as described above.

          (iii) Mr. Soros (as a result of his  position  with SFM LLC and in his
capacity as the sole managing member of SFM Domestic  Investments) may be deemed
to have the sole power to direct the voting and  disposition  of the  35,916,065
Shares  which  may be deemed to be  beneficially  owned by QIP and SFM  Domestic
Investments as described above.

     (c)  Except  for the  transactions  described  in Item 6 below,  which were
effected in a privately negotiated transaction,  there have been no transactions
effected  with respect to the Shares since August 20, 2002 (the date of the last
filing on Schedule 13D) by any of the Reporting Persons.

     (d) (i) The shareholders of QIP,  including  Quantum  Industrial  Holdings,
Ltd., a British Virgin Islands international business company, have the right to
participate in the receipt of dividends from, or proceeds from the sales of, the
securities  held for the  account  of QIP in  accordance  with  their  ownership
interests in QIP.

          (ii)  Certain  members of SFM Domestic  Investments  have the right to
participate in the receipt of dividends  from, or proceeds from the sale of, the
securities held for the account of SFM Domestic Investments.

         (e)      Not applicable.

Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to
        Securities of the Issuer.

Series C Preferred Stock and Note Purchase Agreement
----------------------------------------------------

     On September 27, 2002,  the Issuer  entered into the Purchase  Agreement (a
copy of  which  is  incorporated  by  reference  hereto  as  Exhibit  III and is
incorporated  herein by  reference  in response to this Item 6) with QIP and SFM
Domestic  Investments.  Pursuant  to the terms of the  Purchase  Agreement,  QIP
purchased  968.3 shares of Series C Preferred  Stock for an  aggregate  purchase
price of $968,300 and SFM Domestic Investments purchased 31.7 shares of Series C
Preferred Stock for an aggregate  purchase price of $31,700.  The Issuer and QIP
also  entered  into the QIP Note (a copy of which is  incorporated  by reference
hereto as Exhibit JJJ and is  incorporated  herein by  reference  in response to
this Item 6) in the aggregate  principal amount of $1,936,600 and the Issuer and
SFM Domestic  Investments entered into the SFM Domestic Note (a copy of which is
incorporated by reference  hereto as Exhibit KKK and is  incorporated  herein by
reference  in  response  to this Item 6) in the  aggregate  principal  amount of
$63,400.



<PAGE>

                                                             Page 11 of 38 Pages


     So long as any  shares of Series C  Preferred  Stock are owned by QIP,  SFM
Domestic Investments or their respective  affiliates,  the Issuer has agreed not
to take any action to approve or otherwise  facilitate certain change of control
transactions,  including,  but not limited to, a merger or  consolidation of the
Issuer  resulting  in a change of  control  or a sale of  substantially  all the
assets of the  Issuer,  unless  provision  has been made for the  holders of the
Shares to receive in connection with such transaction an amount in cash equal to
the greater of (i) $1,000 per share of Series C Preferred Stock plus any accrued
and  unpaid  dividends  and (ii) the  amount  that the  holder of such  Series C
Preferred  Stock  would  receive if it were to convert  their share or shares of
Series C Preferred  Stock  (without  regard to any  limitation on conversion and
without  actually  requiring  to be so  converted)  into Shares  (the  "Series C
Liquidation Preference").

     The Issuer,  QIP and SFM Domestic  Investments  amended the  definition  of
"Registrable   Securities"  under  the  Investment  Agreement  (the  "Investment
Agreement"),  dated November 13, 2000 (a copy of which was  previously  filed as
Exhibit  LL to  Schedule  13D  Amendment  No. 7 and is  incorporated  herein  by
reference in response to this Item 6) in order that certain  securities  related
to the Series C Preferred  Stock and Series 2002 Preferred Stock were covered by
the  registration  rights set forth in the  Investment  Agreement.  The  amended
definition of "Registrable Securities" includes, along with any other securities
already included in such definition,  the Shares issuable upon conversion of the
Series C  Preferred  Stock  and the  Series  2002  Preferred  Stock (or upon the
exercise or conversion of any security issued upon conversion of the Series 2002
Preferred Stock). The foregoing description of the Investment Agreement does not
purport to be  complete  and is  qualified  in its  entirety by the terms of the
Investment Agreement.

     The Issuer has agreed to put forth proposals seeking  stockholder  approval
of (i) the  conversion  rights of the Series C Preferred  Stock at the Company's
next  annual or special  meeting of  stockholders  and (ii) the  increase in the
number of  authorized  Shares to  92,000,000.  The Issuer has agreed to take all
reasonable action to convene a meeting of the Issuer's stockholders on or before
December 30, 2002.

     The foregoing descriptions of the Purchase Agreement,  the QIP Note and the
SFM  Domestic  Note do not purport to be  complete  and are  qualified  in their
entirety by the terms of each such  document  which are  incorporated  herein by
reference in response to this Item 6.

Certificate of Powers, Designations, Preferences and Rights of
--------------------------------------------------------------
Series C Preferred Stock
------------------------

     Pursuant  to  the  terms  of  the  Certificate  of  Powers,   Designations,
Preferences  and Rights of Series C Convertible  Preferred  Stock (the "Series C
Preferred  Certificate of  Designations")  (a copy of which is  incorporated  by
reference  hereto as Exhibit  LLL and is  incorporated  herein by  reference  in
response to this Item 6) filed by the Issuer with the Delaware  Secretary of the
State on September 27, 2002, the shares of Series C Preferred Stock are entitled
to cumulative  dividends at a rate of 8% per annum,  compounding  annually.  The
dividends  are payable  only upon a conversion  of the Series C Preferred  Stock
into  Shares,  a  liquidation,  dissolution  or  winding  up of the  Issuer or a
redemption of the Series C Preferred Stock. Series C Preferred  Stockholders are
entitled to a  preference  on a  liquidation,  dissolution  or winding up of the
Issuer in an amount per share equal to the Series C Liquidation Preference.


<PAGE>

                                                             Page 12 of 38 Pages


     Holders of Series C  Preferred  Stock are  entitled  to vote on all matters
submitted to a vote of the Issuer's stockholders,  voting as a single class with
the holders of Shares, on an as-converted basis.  Notwithstanding the foregoing,
(i) holders of Series C Preferred Stock are not entitled to vote with respect to
the  approval of the  conversion  rights of the Series C Preferred  Stock or the
Series 2002 Preferred Stock and (ii) until the Issuer's stockholders approve the
conversion  rights of the Series C Preferred  Stock (to the extent such approval
is required  by the rules of the Nasdaq  SmallCap  Market or any other  national
securities exchange or quotation system upon which the Shares may be listed from
time to  time),  the  total  number  of  votes  cast  with  respect  to the then
outstanding shares of Series C Preferred Stock may not exceed 2,077,341 (subject
to adjustment to reflect any stock split,  stock dividend,  reclassification  or
similar  transaction).  So  long as at  least  40% of the  shares  of  Series  C
Preferred Stock remain  outstanding,  the Issuer may take the actions enumerated
in Section 5.1 of the Series C Preferred  Certificate of Designations  only with
the  approval of a majority of the shares of Series C  Preferred  Stock,  voting
separately as a class. In addition,  so long as any shares of Series C Preferred
Stock are  outstanding,  the approval of the holders of at least 66-2/3% of such
shares,  voting  separately  as a class,  must be  obtained  (i) to  effect  any
transaction  that would  adversely  affect the rights,  preferences,  powers and
privileges  of the  shares  of  Series  C  Preferred  Stock  or (ii) to merge or
consolidate with another entity,  sell all or substantially  all of the Issuer's
assets or enter into a transaction  resulting in, or  facilitating,  a change of
control.

     Each share of Series C Preferred Stock is convertible, at the option of the
holder thereof, into a number of fully paid and nonassessable Shares obtained by
dividing  (i)  $1,000  by (ii)  $0.93 (as  adjusted,  the  "Series C  Conversion
Price").  The Series C Conversion  Price may be adjusted upon the  occurrence of
certain events described in the Series C Preferred  Certificate of Designations,
including,  but not limited to, the  issuance by the Issuer of  securities  at a
price per share (the "New Issue Price") less than the Series C Conversion  Price
in which case the Series C  Conversion  Price will be  adjusted to equal the New
Issue Price. Upon conversion,  the accrued and unpaid dividends on each share of
Series C Preferred  Stock are paid,  at the option of the Issuer,  in cash or in
Shares.  Notwithstanding  the  foregoing,  (i) until the  Issuer's  stockholders
approve the  conversion  rights of the Series C  Preferred  Stock (to the extent
such  approval  is required  by the rules of the Nasdaq  SmallCap  Market or any
other national securities exchange or quotation system upon which the Shares may
be  listed  from  time to time),  no share of  Series C  Preferred  Stock may be
converted  into  Shares  to  the  extent  that,  after  giving  effect  to  such
conversion,  the total number of Shares issued from and after September 27, 2002
as a result of the conversion of shares of Series C Preferred Stock would exceed
2,077,341  (subject to  adjustment to reflect any stock split,  stock  dividend,
reclassification  or  similar  transaction)  and  (ii) no  shares  of  Series  C
Preferred  Stock are  convertible  into Shares until the  Issuer's  stockholders
approve the increase in the number of authorized Shares to 92,000,000.

     Holders of Series C  Preferred  Stock are  entitled  to certain  preemptive
rights in instances where the Issuer issues any Shares or securities convertible
or exchangeable into Shares, subject to certain excluded issuances.

     Subject to the fulfillment of certain  requirements,  the Issuer may redeem
for cash all the shares of Series C Preferred  Stock at redemption  prices equal
to multiples of the Series C Conversion  Price, as set forth in Section 7 of the
Series C Preferred Certificate of Designations.

     The  foregoing  description  of  the  Series  C  Preferred  Certificate  of
Designations does not purport to be complete and is qualified in its entirety by
the  terms of the  Series C  Preferred  Certificate  of  Designations,  which is
incorporated herein by reference in response to this Item 6.


<PAGE>


                                                             Page 13 of 38 Pages


Convertible Demand Promissory Notes
-----------------------------------

     Each  Note  bears  interest  at a rate of 3% per  annum,  on a  cumulative,
compounding  basis.  The  outstanding  principal  balance and accrued and unpaid
interest on each Note is payable upon the demand of the holder,  but in no event
later than March 26, 2003. All or any portion of the Notes are  convertible,  at
the option of the holders thereof, into a number of fully paid and nonassessable
shares of Series C  Preferred  Stock  obtained  by  dividing  (i) the  aggregate
principal  amount to be converted  plus any accrued and unpaid  interest on such
principal amount by (ii) $1,000. The foregoing description of the Notes does not
purport to be  complete  and is  qualified  in its  entirety by the terms of the
Notes, which are incorporated herein by reference in response to this Item 6.

Waiver and  Consent  of the  Holders of Series A  Preferred  Stock,
--------------------------------------------------------------------
Series B Preferred Stock and Series 2002 Preferred Stock
---------------------------------------------------------

     On September  27, 2002,  QIP and SFM Domestic  Investments,  along with the
other holders,  if applicable,  of Series A Preferred Stock,  Series B Preferred
Stock and Series 2002  Preferred  Stock  executed  the Waiver and Consent of the
Holders of Series A Convertible  Preferred Stock, Series B Convertible Preferred
Stock and Series 2002 Convertible  Preferred Stock (the "Waiver and Consent") (a
copy  of  which  is  incorporated  by  reference   hereto  as  Exhibit  MMM  and
incorporated  herein by reference  in response to this Item 6).  Pursuant to the
Waiver and  Consent,  (i) the holders of Series A  Preferred  Stock and Series B
Preferred Stock waived their  preemptive  rights with respect to the issuance of
the  Series C  Preferred  Stock  and the  Notes,  (ii) the  holders  of Series B
Preferred  Stock  waived  the  breach  by the  Issuer  of  Section  5.8.9 of the
Certificate of Incorporation (a copy of which was previously filed as Exhibit RR
to Schedule  13D  Amendment  No. 8 and is  incorporated  herein by  reference in
response  to this Item 6),  and  agreed  not to  convert  any shares of Series B
Preferred Stock to the extent that, after giving effect to such conversion,  the
total number of Shares  issued from and after  September 27, 2002 as a result of
the  conversion  of shares of Series B Preferred  Stock would exceed  13,281,038
(subject  to   adjustment   to  reflect  any  stock   split,   stock   dividend,
reclassification  or similar  transaction)  and (iii) the holders of Series 2002
Preferred  Stock  agreed  to waive  their  rights to  convert  the  Series  2002
Preferred  Stock into shares of Series C Preferred  Stock in connection with the
issuance of the shares of Series C Preferred Stock. The foregoing description of
the Waiver and Consent  does not purport to be complete  and is qualified in its
entirety by the terms of the Waiver and Consent, which is incorporated herein by
reference in response to this Item 6.

Conversion Price of Series B Preferred Stock
--------------------------------------------

     In  connection  with the  issuance  of the Series C  Preferred  Stock,  the
conversion  price of the Series B Preferred Stock was reduced to $0.93 per share
pursuant to Section  5.8.6 of the Issuer's  Certificate  of  Incorporation.  The
foregoing description of the Certificate of Incorporation does not purport to be
complete  and is  qualified  in it entirety by the terms of the  Certificate  of
Incorporation.

     Except as set forth herein, the Reporting Persons do no have any contracts,
arrangements,  understandings or relationships with respect to any securities of
the Issuer.


<PAGE>


                                                             Page 14 of 38 Pages


Item 7.  Material to be Filed as Exhibits

     The Exhibit Index is incorporated herein by reference.


<PAGE>


                                                             Page 15 of 38 Pages



                                   SIGNATURES

     After  reasonable  inquiry and to the best of my knowledge and belief,  the
undersigned  certifies that the information set forth in this Statement is true,
complete and correct.


Date: October 4,  2002           QUANTUM INDUSTRIAL PARTNERS LDC

                                  By:      /s/  Richard D. Holahan, Jr.
                                           -----------------------------------
                                           Richard D. Holahan, Jr.
                                           Attorney-in-Fact

                                  QIH MANAGEMENT INVESTOR, L.P.

                                  By:      QIH Management, Inc.,
                                           its General Partner

                                  By:      /s/  Richard D. Holahan, Jr.
                                           -----------------------------------
                                           Richard D. Holahan, Jr.
                                           Vice President

                                  QIH MANAGEMENT, INC.

                                  By:      /s/  Richard D. Holahan, Jr.
                                           -----------------------------------
                                           Richard D. Holahan, Jr.
                                           Vice President

                                  SOROS FUND MANAGEMENT LLC

                                  By:      /s/  Richard D. Holahan, Jr.
                                           -----------------------------------
                                           Richard D. Holahan, Jr.
                                           Assistant General Counsel

                                  SFM DOMESTIC INVESTMENTS LLC

                                  By:      George Soros
                                           Its Managing Member

                                  By:      /s/  Richard D. Holahan, Jr.
                                           -----------------------------------
                                           Richard D. Holahan, Jr.
                                           Attorney-in-Fact

                                  GEORGE SOROS

                                  By:      /s/  Richard D. Holahan, Jr.
                                           -----------------------------------
                                           Richard D. Holahan, Jr.
                                           Attorney-in-Fact


<PAGE>


                                                             Page 16 of 38 Pages
                                  EXHIBIT INDEX


III.      Series C Preferred Stock and Note Purchase Agreement,  dated
          as of September 27, 2002, by and between  Bluefly,  Inc. and
          the investors listed on Schedule I thereto(1)

JJJ.      Form of the Convertible  Demand Promissory Note, dated as of
          September 27, 2002, by and between Bluefly, Inc. and Quantum
          Industrial   Partners  LDC  in  the   principal   amount  of
          $1,936,600..................................................       17

KKK.      Form of the Convertible  Demand Promissory Note, dated as of
          September  27, 2002,  by and between  Bluefly,  Inc. and SFM
          Domestic   Investments  LLC  in  the  principal   amount  of
          $63,400.....................................................       26

LLL.      Certificate of Powers, Designations,  Preferences and Rights
          of  Series  C  Convertible   Preferred   Stock  of  Bluefly,
          Inc.(2)

MMM.      Form of the  Waiver and  Consent of the  Holders of Series A
          Convertible  Preferred Stock, Series B Convertible Preferred
          Stock  and  Series  2002  Convertible   Preferred  Stock  of
          Bluefly, Inc................................................       35


----------

(1)  Filed on September 30, 2002 as Exhibit 99.2 to the Issuer's  current report
     on Form 8-K (commission File Number 001-14498).

(2)  Filed on September 30, 2002 as Exhibit 99.3 to the Issuer's  current report
     on Form 8-K (Commission File Number 001-14498).


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>3
<FILENAME>bluefly_13d-15exhjjj.txt
<DESCRIPTION>CONVERTIBLE DEMAND PROMISSORY NOTE
<TEXT>

                                                             Page 17 of 38 Pages

                                                                     EXHIBIT JJJ



THE OFFER AND SALE OF THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES LAWS OF ANY STATE. THIS NOTE
AND ANY SECURITIES ISSUABLE UPON THE CONVERSION HEREOF MAY NOT BE TRANSFERRED
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND
APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH LAWS. CERTIFICATES REPRESENTING
ANY SECURITIES ISSUABLE UPON CONVERSION OF THIS NOTE SHALL INCLUDE A LEGEND TO
SIMILAR EFFECT AS THE FOREGOING.



                                  BLUEFLY, INC.

                       CONVERTIBLE DEMAND PROMISSORY NOTE


$1,936,600
New York, New York                                            September 27, 2002

     FOR VALUE RECEIVED, the undersigned, BLUEFLY, INC., a Delaware corporation
(the "Payor" or the "Company"), promises to pay to the order of Quantum
Industrial Partners LDC or its registered assign (the "Payee"), upon demand the
principal sum of One Million, Nine Hundred and Thirty-Six Thousand, Six Hundred
Dollars ($1,936,600) and interest on the outstanding principal balance as set
forth herein.

          1. Interest Rate; Payment.

               (a) The outstanding principal balance of this Convertible Demand
Promissory Note (this "Note") shall bear interest at an annual rate equal to 3%
per annum, with interest accruing, from and including the date hereof, on a
cumulative, compounding basis. Interest shall be computed on the basis of a 365-
or 366-day year, as the case may be, and the actual number of days elapsed, and,
subject to Section 5, shall be payable only upon repayment of the principal on
any Repayment Date (as defined below) in cash.

               (b) The outstanding balance of any amount owed under this Note
which is not paid when due shall bear interest at the rate of 2% per annum (the
"Default Interest") above the rate that would otherwise be in effect under this
Note with the Default Interest accruing, from and including such due date, on a
cumulative, compounding basis.

               (c) The outstanding principal and all accrued and unpaid interest
shall be paid in full no later than March 26, 2003 (the "Maturity Date"), unless
repaid earlier pursuant to the provisions of Section 2 (the date of any payment
pursuant to Section 2 and the Maturity Date, collectively



<PAGE>


                                                             Page 18 of 38 Pages

referred to as a "Repayment Date") or unless converted into shares of Series C
Preferred Stock (as defined below) pursuant to Section 5 prior to the Maturity
Date. On a Repayment Date, the Payor shall pay the applicable amount of
principal and interest in lawful money of the United States of America by wire
or bank transfer of immediately available funds to an account designated by the
Payee in writing from time to time.

          2. Prepayment.

               (a) Mandatory Prepayment.

                    (i) Upon the occurrence of an Event of Default (under
Section 3(d) or (e)), the outstanding principal of and all accrued interest on
this Note shall be accelerated and shall automatically become immediately due
and payable, without presentment, demand, protest or notice of any kind, all of
which are expressly waived by the Payor, notwithstanding anything contained
herein to the contrary.

                    (ii) The Payee shall, at its sole option, have the right to
require the Payor to pay the outstanding principal of and all accrued interest
on this Note upon the occurrence of any of the following events: (1) an Event of
Default under Section 3(a), (b), (c), (f), (g) or (h), (2) the Company entering
into an agreement to effectuate any sale or other disposition of all or
substantially all of its assets, in one transaction or in a series of
transactions, (3) the Company entering into an agreement to effectuate any
consolidation or merger into another entity, or (4) any sale of a majority of
the outstanding equity of the Company (or any other event that constitutes a
Change of Control (as defined below) of the Company), in one transaction or in a
series of transactions. Immediately upon the occurrence of either of the events
set forth in clauses (1), (2) or (3) above, or immediately upon obtaining
knowledge that any person has entered into an agreement to effectuate the event
set forth in clause (4) above, the Company shall give written notice of such
event to the Payee. "Change of Control" means any "Person" (as defined in
Section 3(a)(9) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) or "group" (as defined in Rule 13d-5, promulgated under the
Exchange Act) other than Payee and its affiliates or any group that includes
Payee and/or its affiliates, becoming the beneficial owner (as determined by
Rule 13d-3, promulgated under the Exchange Act), directly or indirectly, of
outstanding shares of stock of the Company entitling such Person or Persons to
exercise 50% or more of the total votes entitled to be cast at a regular or
special meeting, or by action by written consent, of the stockholders of the
Company in the election of directors.

                    (iii) Any mandatory prepayment under this Section 2(a) shall
include payment of reasonable costs and expenses, if any, of the Payee
associated with such prepayment.

               (b) Optional Prepayment. The Company may, at its option, without
premium or penalty, upon five (5) days' prior written notice to the Payee, repay
the unpaid principal amount of this Note, at any time in whole or from time to
time in part, together with interest accrued thereon to the date of prepayment.
Any such prepayment shall be applied first to the payment of accrued interest
and then to repayment of principal. Upon any partial prepayment of the unpaid
principal amount of this Note, the Holder shall make notation on this Note of
the portion of the principal so prepaid. No notice of prepayment shall in any
way prohibit the Payee from converting this Note pursuant to Section 5.


<PAGE>


                                                             Page 19 of 38 Pages


          3. Events of Default. An "Event of Default" shall occur if:

               (a) the Payor shall default in the payment of the principal of or
interest payable on this Note, when and as the same shall become due and
payable, whether at maturity or at a date fixed for prepayment or by
acceleration or otherwise and such default with respect to the payment of
interest shall continue unremedied for two days;

               (b) the Payor shall fail to observe or perform any covenant or
agreement contained in this Note, and such failure shall continue for five
business days after Payor receives notice of such failure;

               (c) any representation, warranty, certification or statement made
by or on behalf of the Payor in this Note or in any certificate, writing or
other document delivered pursuant hereto shall prove to have been incorrect in
any material respect when made;

               (d) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed in a court of competent jurisdiction seeking
(A) relief in respect of Payor or of a substantial part of Payor's respective
property or assets, under Title 11 of the United States Code, as now constituted
or hereafter amended, or any other Federal or state bankruptcy, insolvency,
receivership or similar law (any such law, a "Bankruptcy Law"), (B) the
appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for a substantial part of the property or assets of any Payor,
(C) the winding up or liquidation of any Payor; and such proceeding or petition
shall continue undismissed for 60 days, or an order or decree approving or
ordering any of the foregoing shall be entered;

               (e) the Payor shall (A) voluntarily commence any proceeding or
file any petition seeking relief under a Bankruptcy Law, (B) consent to the
institution of or the entry of an order for relief against it, or fail to
contest in a timely and appropriate manner, any proceeding or the filing of any
petition described in clause (d), (C) apply for or consent to the appointment of
a receiver, trustee, custodian, sequestrator, conservator or similar official
for a substantial part of the property or assets of the Payor, (D) file an
answer admitting the material allegations of a petition filed against it in any
such proceeding, (E) make a general assignment for the benefit of creditors, (F)
become unable, admit in writing its inability or fail generally to pay its debts
as they become due or (G) take any action for the purpose of effecting any of
the foregoing;

               (f) one or more judgments or orders for the payment of money in
excess of $250,000 in the aggregate shall be rendered against the Payor and such
judgment(s) or order(s) shall continue unsatisfied and unstayed for a period of
30 days;

               (g) the Payor shall default in the payment of any principal,
interest or premium, or any observance or performance of any covenants or
agreements, with respect to indebtedness (excluding trade payables and other
indebtedness entered into in the ordinary course of business) in excess of
$50,000 in the aggregate for borrowed money or any obligation which is the
substantive equivalent thereof and such default shall continue for more than the
period of grace, if any, or of any such indebtedness or obligation shall be
declared due and payable prior to the stated maturity thereof;

               (h) any material provisions of this Note shall terminate or
become void or unenforceable or the Payor shall so assert in writing.


<PAGE>


                                                             Page 20 of 38 Pages


          4. Subordination.

               A. Agreement of Subordination. The Payor covenants and agrees,
and the Payee likewise covenants and agrees, that (i) to the extent and in the
manner hereinafter set forth in this Section 4, the obligations of the Company
to pay the principal of and accrued interest on this Note (the "Obligations")
are hereby expressly made subordinate and junior in right of payment to the
prior payment in full of all amounts owing to, under the Financing Agreement,
dated March 30, 2001, as amended (the "Financing Agreement"), by and between the
Payor and Rosenthal & Rosenthal, Inc., a New York Corporation, whether
outstanding at the date hereof or hereinafter incurred (such indebtedness being
hereinafter referred to as the "Senior Indebtedness"); (ii) the subordination is
solely for the benefit of any holders of Senior Indebtedness; and (iii) each
holder of Senior Indebtedness whether now outstanding or hereinafter created,
incurred, assumed or guaranteed shall be deemed to have extended or acquired
such Senior Indebtedness in reliance upon the covenants and provisions contained
herein.

               (b) Subordination Upon Certain Events. Upon the occurrence of any
Event of Default under Sections 3(d) or (e) of this Note:

                    (i) Upon any payment or distribution of assets of the Payor
to creditors of the Company, holders of Senior Indebtedness shall be entitled to
receive indefeasible payment in full of all obligations with respect to the
Senior Indebtedness before the holder of this Note shall be entitled to receive
any payment in respect of the Obligations.

                    (ii) Until all Senior Indebtedness is paid in full, any
distribution to which the Payee would be entitled but for this Section 4 shall
be made to holders of Senior Indebtedness, as their interests may appear, except
that the Payee may receive securities that are subordinate to the Senior
Indebtedness to at least the same extent as this Note.

                    (iii) For purposes of this Section 4, a distribution may
consist of cash, securities or other property, by set-off or otherwise.

                    (iv) Notwithstanding the foregoing provisions of this
Section 4(b), if payment or delivery by the Company of cash, securities or other
property to the Payee is authorized by an order or decree giving effect, and
stating in such order or decree that effect is given, to the subordination of
this Note to the Senior Indebtedness, and made by a court of competent
jurisdiction in a proceeding under any applicable bankruptcy or reorganization
law, payment or delivery by the Company of such cash, securities or other
property shall be made to the Payee in accordance with such order or decree.

               (c) Limitation on Payment.

                    (i) Upon receipt by the Company and the Payee of a Blockage
Notice (as defined below), then unless and until (A) all defaults in the payment
of any Senior Indebtedness (the "Senior Defaults") that gave rise to the
Blockage Notice shall have been remedied or effectively waived or shall have
ceased to exist or (B) the Senior Indebtedness in respect of which such Senior
Defaults shall have occurred shall have been paid in full or (C) a notice of
acceleration of the maturity of such Senior Indebtedness shall have been
transmitted to the Company in respect of such Senior Defaults, no direct or
indirect payment (in cash, property, securities or by set-off or otherwise) of
or on account of the principal of or interest on this Note or in respect of any
redemption, retirement, purchase or other acquisition of this Note shall be made
during any period prior to the expiration or


<PAGE>


                                                             Page 21 of 38 Pages


the Blockage Period (as defined below); provided, however, that in no event
shall the foregoing prevent the Payee from converting this Note into shares of
Series C Preferred Stock.

                    (ii) For purposes of this Section 4, a "Blockage Notice" is
a notice of a Senior Default that in fact has occurred and is continuing, given
to the Company and the Payee by any holders of Senior Indebtedness then
outstanding (or their authorized agent); provided, however, that no such notice
shall be effective as a Blockage Notice if an effective Blockage Notice shall
have been given within 360 days prior thereto.

                    (iii) For purposes of this Section 4, a "Blockage Period"
with respect to a Blockage Notice is the period commencing upon the Company's
receipt of such Blockage Notice and having the duration set forth in the
particular agreement establishing the Senior Indebtedness to which the Company
is a party; provided, that, such Blockage Period is no more than 90 days.

          Notwithstanding the foregoing, the Blockage Period shall be
inapplicable or cease to be effective if an Event of Default pursuant to Section
3(d) or (e) shall have occurred. In addition, any Blockage Period shall cease to
be effective if at any time during such period (i) substantial assets of the
Company are sold or otherwise disposed of outside of the ordinary course of
business for less than fair value or (ii) payment or any distribution of any
character, whether in cash, securities or other property of the Company shall be
made to or received by any creditor on any indebtedness which is on the same
level of priority with or junior and subordinate in right of payment to this
Note.

          Upon the expiration or termination of any Blockage Period, the Payee
shall be entitled to exercise any of its rights with respect to this Note other
than any right to accelerate the maturity date of this Note based upon the
occurrence of any Event of Default in respect thereto which has been cured or
otherwise remedied during the Blockage Period.

               (d) Payments and Distributions Received. If the Payee shall have
received any payment from or distribution of assets of the Company in respect of
Obligations in contravention of the terms of this Section 4 before all Senior
Indebtedness is paid in full, then and in such event such payment or
distribution shall be received and held in trust for and shall be paid over or
delivered to the holders of Senior Indebtedness to the extent necessary to pay
all such Senior Indebtedness in full.

               (e) Proofs of Claim. If, while any Senior Indebtedness is
outstanding, any Event of Default under Section 3(d) or (e) of this Note occurs,
the Payee shall duly and promptly take such action as any holder of Senior
Indebtedness may reasonably request to collect any payment with respect to this
Note for the account of the holders of the Senior Indebtedness and to file
appropriate claims or proofs of claim in respect of this Note. Upon the failure
of the Payee to take any such action, each holder of Senior Indebtedness is
hereby irrevocably authorized and empowered (in its own name or otherwise), but
shall have no obligation, to demand, sue for, collect and receive every payment
or distribution referred to in respect of this Note and to file claims and
proofs of claim and take such other action as it may deem necessary or advisable
for the exercise or enforcement of any of the rights or interests of the Holder
with respect to this Note.

               (f) Subrogation. After all amounts payable under or in respect of
Senior Indebtedness are paid in full in cash, the Payee shall be subrogated to
the rights of holders of Senior


<PAGE>


                                                             Page 22 of 38 Pages


Indebtedness to receive payments or distributions applicable to Senior
Indebtedness to the extent that distributions otherwise payable to the Payee
have been applied to the payment of Senior Indebtedness. A distribution made
under this Section 4 to a holder of Senior Indebtedness which otherwise would
have been made to the Payee is not, as between the Company and the Payee, a
payment by the Company on Senior Indebtedness.

               (g) Relative Rights. This Section 4 defines the relative rights
of the Payee and the holders of Senior Indebtedness. Nothing in this Section 4
shall (i) impair, as between the Company and the Payee, the obligation of the
Company, which is absolute and unconditional, to pay principal of and interest
(including Default Interest) on this Note in accordance with its terms; (ii)
effect the relative rights of the Payee and creditors of the Company other than
holders of Senior Indebtedness; (iii) prevent the Payee from exercising its
available remedies upon an Event of Default, subject to the rights, if any,
under this Section 4 of holders of Senior Indebtedness or (iv) prevent the Payee
from exercising its conversion rights under Section 5.

               (h) Subordination May Not Be Impaired by the Company. No right of
any holder of any Senior Indebtedness to enforce the subordination of the
Obligations evidenced by this Note shall be impaired by any failure by the
Company or such holder of Senior Indebtedness to act or by the failure of the
Company or such holder to comply with this Note. The provisions of this Section
4 shall continue to be effective or be reinstated, as the case may be, if at any
time any payment of any of the Senior Indebtedness is rescinded or must
otherwise be returned by any holder of Senior Indebtedness as a result of the
insolvency, bankruptcy or reorganization of the Company or otherwise, all as
though such payment had not been made.

               (i) Payments. A payment with respect to principal of or interest
on the Obligations shall include, without limitation, payment of principal of
and interest on this Note, and any payment on account of mandatory prepayment
provisions.

               (j) Section Not to Prevent Events of Default. The failure to make
a payment on account of principal of or interest on or other amounts
constituting the Obligations by reason of any provision of this Section 4 shall
not be construed as preventing the occurrence of an Event of Default under
Section 3.

          5. Conversion.

               (a) Right to Convert. Subject to the terms and conditions of this
Section 5, the Payee shall have the right, at its option, at any time and from
time to time, to convert all or any portion of the principal amount of this Note
and any accrued and unpaid interest thereon (collectively, "Note Obligations")
into a number of fully paid and nonassessable shares of the Payor's Series C
Convertible Preferred Stock, $.01 par value per share (the "Series C Preferred
Stock"), equal to the quotient obtained by dividing the aggregate amount of the
Note Obligations to be so converted by the Series C Face Value (as defined in
the Certificate of Designations relating to the Series C Preferred Stock).

               (b) Procedure for Conversion. In order to convert all or any
portion of the Note Obligations, the Payee shall (i) surrender this Note, duly
endorsed, at the office of the Payor and (ii) simultaneously with such
surrender, notify the Payor in writing of its election to convert all or a
portion of the Note Obligations, which notice shall specify the amount of
principal and interest included in the Note


<PAGE>


                                                             Page 23 of 38 Pages


Obligations to be so converted. The date on which the Note is surrendered for
conversion is referred to herein as the "Conversion Date." As soon as
practicable after the Conversion Date, the Payee shall be entitled to receive a
certificate or certificates, registered in such name or names as the Payee may
direct, representing the shares of Series C Preferred Stock issuable upon
conversion of the applicable Note Obligations, along with a new promissory note,
in the same form as this Note, reflecting any Note Obligations that have not
been so converted; provided that the Payee shall be treated for all purposes as
the record holder of such shares of Series C Preferred Stock as of the
Conversion Date. The issuance of shares of Series C Preferred Stock upon
conversion of any Note Obligations shall be made without charge to the Payee for
any issuance tax in respect thereof, provided that the Payor shall not be
required to pay any tax that may be payable in respect of any transfer involved
in the issuance and delivery of any certificate in a name other than that of the
Payee.

               (c) Reservation of Shares. Payor shall reserve and keep available
solely for issuance upon the conversion of Note Obligations such number of
shares of Series C Preferred Stock as will from time to time be sufficient to
permit the conversion of all outstanding Note Obligations and such number of
shares of Common Stock as will from time to time be sufficient to permit the
conversion of all such shares of Series C Preferred Stock (collectively, the
"Conversion Securities"), and, if applicable, shall take all action to increase
the authorized number of shares of Series C Preferred Stock and/or Common Stock
if at any time there shall be insufficient authorized but unissued Series C
Preferred Stock and/or Common Stock to permit such reservation or permit the
conversion of all outstanding Note Obligations and/or Series C Preferred Stock
issuable upon conversion of such Note Obligations. The Payor covenants that all
Conversion Securities that shall be so issued shall be duly authorized, validly
issued, fully paid and non-assessable by the Payor, not subject to any
preemptive rights, and free from any taxes, liens and charges with respect to
the issue thereof. The Payor will take all such action as may be necessary to
ensure that all such Conversion Securities may be so issued without violation of
any applicable law or regulation, or any requirement of any national securities
exchange or quotation system upon which the Payor's Common Stock may be listed.

          6. Suits for Enforcement.

               (a) Upon the occurrence of any one or more Events of Default, the
holder of this Note may proceed to protect and enforce its rights by suit in
equity, action at law or by other appropriate proceeding in aid of the exercise
of any power granted in this Note, or may proceed to enforce the payment of this
Note, or to enforce any other legal or equitable right it may have as a holder
of this Note.

               (b) The holder of this Note may direct the time, method and place
of conducting any proceeding for any remedy available to itself.

               (c) In case of any Event of Default, the Payor will pay to the
holder of this Note such amounts as shall be sufficient to cover the reasonable
costs and expenses of such holder due to such Event of Default, including
without limitation, costs of collection and reasonable fees, disbursements and
other charges of counsel incurred in connection with any action in which the
holder prevails.

          7. Notices. All notices, demands and other communications provided for
or permitted hereunder shall be made in accordance with the provisions of the
Series C Preferred Stock and


<PAGE>


                                                             Page 24 of 38 Pages


Note Purchase Agreement, dated as of the date hereof, by and among the Payor and
the investors listed on Schedule 1 thereto.

          8. Successors and Assigns. This Note shall inure to the benefit of and
be binding upon the successors and permitted assigns of the parties hereto. The
Payor may not assign any of its rights or obligations under this Note without
the prior written consent of Payee. The Payee may assign all or a portion of
their rights or obligations under this Note to an affiliate without the prior
written consent of the Payor.

          9. Amendment and Waiver.

               (a) No failure or delay on the part of the Payor or Payee in
exercising any right, power or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, power or
remedy preclude any other or further exercise thereof or the exercise of any
other right, power or remedy. The remedies provided for herein are cumulative
and are not exclusive of any remedies that may be available to the Payor or
Payee at law, in equity or otherwise.

               (b) Any amendment, supplement or modification of or to any
provision of this Note, any waiver of any provision of this Note and any consent
to any departure by the Payor from the terms of any provision of this Note,
shall be effective (i) only if it is made or given in writing and signed by the
Payor and the Payee and (ii) only in the specific instance and for the specific
purpose for which made or given.

          10. Headings. The headings in this Note are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.

          11. GOVERNING LAW. THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
CONFLICTS OF LAW PRINCIPLES THEREOF.

          12. Costs and Expenses. The Payor hereby agrees to pay on demand all
reasonable out-of-pocket costs, fees, expenses, disbursements and other charges
(including but not limited to the fees, expenses, disbursements and other
charges of Paul, Weiss, Rifkind, Wharton & Garrison, special counsel to the
Payee) of the Payee arising in connection with any consent or waiver granted or
requested hereunder or in connection herewith, and any renegotiation, amendment,
work-out or settlement of this Note or the indebtedness arising hereunder.

          13. Waiver of Jury Trial and Setoff. The Payor hereby waives trial by
jury in any litigation in any court with respect to, in connection with, or
arising out of this Note or any instrument or document delivered pursuant to
this Note, or the validity, protection, interpretation, collection or
enforcement thereof, or any other claim or dispute howsoever arising, between
any Payor and the Payee; and the Payor hereby waives the right to interpose any
setoff or counterclaim or cross-claim in connection with any such litigation,
irrespective of the nature of such setoff, counterclaim or cross-claim except to
the extent that the failure so to assert any such setoff, counterclaim or
cross-claim would permanently preclude the prosecution of the same.

          14. Consent to Jurisdiction. The Payor hereby irrevocably consents to
the nonexclusive jurisdiction of the courts of the State of New York and of any
federal court located in such


<PAGE>


                                                             Page 25 of 38 Pages


State in connection with any action or proceeding arising out of or relating to
this Note or any document or instrument delivered pursuant to this Agreement.

          15. Severability. If any one or more of the provisions contained
herein, or the application thereof in any circumstance, is held invalid, illegal
or unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provisions hereof shall not be in any way impaired,
unless the provisions held invalid, illegal or unenforceable shall substantially
impair the benefits of the remaining provisions hereof.

          16. Entire Agreement. This Note is intended by the parties as a final
expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter hereof. There are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein. This Note
supersedes all prior agreements and understandings between the parties with
respect to such subject matter.

          17. Further Assurances. The Payor shall execute such documents and
perform such further acts (including, without limitation, obtaining any
consents, exemptions, authorizations or other actions by, or giving any notices
to, or making any filings with, any governmental authority or any other Person)
as may be reasonably required or desirable to carry out or to perform the
provisions of this Note.

                                          BLUEFLY, INC.

                                          By:  ________________________________
                                          Name:
                                          Title:


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>4
<FILENAME>bluefly_13d-15exhkkk.txt
<DESCRIPTION>CONVERTIBLE DEMAND PROMISSORY NOTE
<TEXT>
                                                             Page 26 of 38 Pages

                                                                     EXHIBIT KKK


THE OFFER AND SALE OF THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES LAWS OF ANY STATE. THIS NOTE
AND ANY SECURITIES ISSUABLE UPON THE CONVERSION HEREOF MAY NOT BE TRANSFERRED
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND
APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH LAWS. CERTIFICATES REPRESENTING
ANY SECURITIES ISSUABLE UPON CONVERSION OF THIS NOTE SHALL INCLUDE A LEGEND TO
SIMILAR EFFECT AS THE FOREGOING.



                                  BLUEFLY, INC.

                       CONVERTIBLE DEMAND PROMISSORY NOTE


$63,400
New York, New York                                            September 27, 2002

     FOR VALUE RECEIVED, the undersigned, BLUEFLY, INC., a Delaware corporation
(the "Payor" or the "Company"), promises to pay to the order of SFM Domestic
Investments LLC or its registered assign (the "Payee"), upon demand the
principal sum of Sixty-Three Thousand, Four Hundred Dollars ($63,400) and
interest on the outstanding principal balance as set forth herein.

          1. Interest Rate; Payment.

               (a) The outstanding principal balance of this Convertible Demand
Promissory Note (this "Note") shall bear interest at an annual rate equal to 3%
per annum, with interest accruing, from and including the date hereof, on a
cumulative, compounding basis. Interest shall be computed on the basis of a 365-
or 366-day year, as the case may be, and the actual number of days elapsed, and,
subject to Section 5, shall be payable only upon repayment of the principal on
any Repayment Date (as defined below) in cash.

               (b) The outstanding balance of any amount owed under this Note
which is not paid when due shall bear interest at the rate of 2% per annum (the
"Default Interest") above the rate that would otherwise be in effect under this
Note with the Default Interest accruing, from and including such due date, on a
cumulative, compounding basis.

               (c) The outstanding principal and all accrued and unpaid interest
shall be paid in full no later than March 26, 2003 (the "Maturity Date"), unless
repaid earlier pursuant to the provisions of Section 2 (the date of any payment
pursuant to Section 2 and the Maturity Date, collectively referred to as a
"Repayment Date") or unless converted into shares of Series C Preferred Stock
(as defined below) pursuant to Section 5 prior to the Maturity Date. On a
Repayment Date, the Payor shall


<PAGE>


                                                             Page 27 of 38 Pages


pay the  applicable  amount of  principal  and  interest in lawful  money of the
United States of America by wire or bank transfer of immediately available funds
to an account designated by the Payee in writing from time to time.

          2. Prepayment.

               (a) Mandatory Prepayment.

                    (i) Upon the occurrence of an Event of Default (under
Section 3(d) or (e)), the outstanding principal of and all accrued interest on
this Note shall be accelerated and shall automatically become immediately due
and payable, without presentment, demand, protest or notice of any kind, all of
which are expressly waived by the Payor, notwithstanding anything contained
herein to the contrary.

                    (ii) The Payee shall, at its sole option, have the right to
require the Payor to pay the outstanding principal of and all accrued interest
on this Note upon the occurrence of any of the following events: (1) an Event of
Default under Section 3(a), (b), (c), (f), (g) or (h), (2) the Company entering
into an agreement to effectuate any sale or other disposition of all or
substantially all of its assets, in one transaction or in a series of
transactions, (3) the Company entering into an agreement to effectuate any
consolidation or merger into another entity, or (4) any sale of a majority of
the outstanding equity of the Company (or any other event that constitutes a
Change of Control (as defined below) of the Company), in one transaction or in a
series of transactions. Immediately upon the occurrence of either of the events
set forth in clauses (1), (2) or (3) above, or immediately upon obtaining
knowledge that any person has entered into an agreement to effectuate the event
set forth in clause (4) above, the Company shall give written notice of such
event to the Payee. "Change of Control" means any "Person" (as defined in
Section 3(a)(9) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) or "group" (as defined in Rule 13d-5, promulgated under the
Exchange Act) other than Payee and its affiliates or any group that includes
Payee and/or its affiliates, becoming the beneficial owner (as determined by
Rule 13d-3, promulgated under the Exchange Act), directly or indirectly, of
outstanding shares of stock of the Company entitling such Person or Persons to
exercise 50% or more of the total votes entitled to be cast at a regular or
special meeting, or by action by written consent, of the stockholders of the
Company in the election of directors.

                    (iii) Any mandatory prepayment under this Section 2(a) shall
include payment of reasonable costs and expenses, if any, of the Payee
associated with such prepayment.

               (b) Optional Prepayment. The Company may, at its option, without
premium or penalty, upon five (5) days' prior written notice to the Payee, repay
the unpaid principal amount of this Note, at any time in whole or from time to
time in part, together with interest accrued thereon to the date of prepayment.
Any such prepayment shall be applied first to the payment of accrued interest
and then to repayment of principal. Upon any partial prepayment of the unpaid
principal amount of this Note, the Holder shall make notation on this Note of
the portion of the principal so prepaid. No notice of prepayment shall in any
way prohibit the Payee from converting this Note pursuant to Section 5.

          3. Events of Default. An "Event of Default" shall occur if:

               (a) the Payor shall default in the payment of the principal of or
interest payable on this Note, when and as the same shall become due and
payable, whether at maturity or at a


<PAGE>


                                                             Page 28 of 38 Pages


date fixed for prepayment or by acceleration or otherwise and such default with
respect to the payment of interest shall continue unremedied for two days;

               (b) the Payor shall fail to observe or perform any covenant or
agreement contained in this Note, and such failure shall continue for five
business days after Payor receives notice of such failure;

               (c) any representation, warranty, certification or statement made
by or on behalf of the Payor in this Note or in any certificate, writing or
other document delivered pursuant hereto shall prove to have been incorrect in
any material respect when made;

               (d) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed in a court of competent jurisdiction seeking
(A) relief in respect of Payor or of a substantial part of Payor's respective
property or assets, under Title 11 of the United States Code, as now constituted
or hereafter amended, or any other Federal or state bankruptcy, insolvency,
receivership or similar law (any such law, a "Bankruptcy Law"), (B) the
appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for a substantial part of the property or assets of any Payor,
(C) the winding up or liquidation of any Payor; and such proceeding or petition
shall continue undismissed for 60 days, or an order or decree approving or
ordering any of the foregoing shall be entered;

               (e) the Payor shall (A) voluntarily commence any proceeding or
file any petition seeking relief under a Bankruptcy Law, (B) consent to the
institution of or the entry of an order for relief against it, or fail to
contest in a timely and appropriate manner, any proceeding or the filing of any
petition described in clause (d), (C) apply for or consent to the appointment of
a receiver, trustee, custodian, sequestrator, conservator or similar official
for a substantial part of the property or assets of the Payor, (D) file an
answer admitting the material allegations of a petition filed against it in any
such proceeding, (E) make a general assignment for the benefit of creditors, (F)
become unable, admit in writing its inability or fail generally to pay its debts
as they become due or (G) take any action for the purpose of effecting any of
the foregoing;

               (f) one or more judgments or orders for the payment of money in
excess of $250,000 in the aggregate shall be rendered against the Payor and such
judgment(s) or order(s) shall continue unsatisfied and unstayed for a period of
30 days;

               (g) the Payor shall default in the payment of any principal,
interest or premium, or any observance or performance of any covenants or
agreements, with respect to indebtedness (excluding trade payables and other
indebtedness entered into in the ordinary course of business) in excess of
$50,000 in the aggregate for borrowed money or any obligation which is the
substantive equivalent thereof and such default shall continue for more than the
period of grace, if any, or of any such indebtedness or obligation shall be
declared due and payable prior to the stated maturity thereof;

               (h) any material provisions of this Note shall terminate or
become void or unenforceable or the Payor shall so assert in writing.

          4. Subordination.

               A. Agreement of Subordination. The Payor covenants and agrees,
and the Payee likewise covenants and agrees, that (i) to the extent and in the
manner hereinafter set forth in this


<PAGE>


                                                             Page 29 of 38 Pages


Section 4, the obligations of the Company to pay the principal of and accrued
interest on this Note (the "Obligations") are hereby expressly made subordinate
and junior in right of payment to the prior payment in full of all amounts owing
to, under the Financing Agreement, dated March 30, 2001, as amended (the
"Financing Agreement"), by and between the Payor and Rosenthal & Rosenthal,
Inc., a New York Corporation, whether outstanding at the date hereof or
hereinafter incurred (such indebtedness being hereinafter referred to as the
"Senior Indebtedness"); (ii) the subordination is solely for the benefit of any
holders of Senior Indebtedness; and (iii) each holder of Senior Indebtedness
whether now outstanding or hereinafter created, incurred, assumed or guaranteed
shall be deemed to have extended or acquired such Senior Indebtedness in
reliance upon the covenants and provisions contained herein.

               (b) Subordination Upon Certain Events. Upon the occurrence of any
Event of Default under Sections 3(d) or (e) of this Note:

                    (i) Upon any payment or distribution of assets of the Payor
to creditors of the Company, holders of Senior Indebtedness shall be entitled to
receive indefeasible payment in full of all obligations with respect to the
Senior Indebtedness before the holder of this Note shall be entitled to receive
any payment in respect of the Obligations.

                    (ii) Until all Senior Indebtedness is paid in full, any
distribution to which the Payee would be entitled but for this Section 4 shall
be made to holders of Senior Indebtedness, as their interests may appear, except
that the Payee may receive securities that are subordinate to the Senior
Indebtedness to at least the same extent as this Note.

                    (iii) For purposes of this Section 4, a distribution may
consist of cash, securities or other property, by set-off or otherwise.

                    (iv) Notwithstanding the foregoing provisions of this
Section 4(b), if payment or delivery by the Company of cash, securities or other
property to the Payee is authorized by an order or decree giving effect, and
stating in such order or decree that effect is given, to the subordination of
this Note to the Senior Indebtedness, and made by a court of competent
jurisdiction in a proceeding under any applicable bankruptcy or reorganization
law, payment or delivery by the Company of such cash, securities or other
property shall be made to the Payee in accordance with such order or decree.

               (c) Limitation on Payment.

                    (i) Upon receipt by the Company and the Payee of a Blockage
Notice (as defined below), then unless and until (A) all defaults in the payment
of any Senior Indebtedness (the "Senior Defaults") that gave rise to the
Blockage Notice shall have been remedied or effectively waived or shall have
ceased to exist or (B) the Senior Indebtedness in respect of which such Senior
Defaults shall have occurred shall have been paid in full or (C) a notice of
acceleration of the maturity of such Senior Indebtedness shall have been
transmitted to the Company in respect of such Senior Defaults, no direct or
indirect payment (in cash, property, securities or by set-off or otherwise) of
or on account of the principal of or interest on this Note or in respect of any
redemption, retirement, purchase or other acquisition of this Note shall be made
during any period prior to the expiration of the Blockage Period (as defined
below); provided, however, that in no event shall the foregoing prevent the
Payee from converting this Note into shares of Series C Preferred Stock.


<PAGE>


                                                             Page 30 of 38 Pages


                    (ii) For purposes of this Section 4, a "Blockage Notice" is
a notice of a Senior Default that in fact has occurred and is continuing, given
to the Company and the Payee by any holders of Senior Indebtedness then
outstanding (or their authorized agent); provided, however, that no such notice
shall be effective as a Blockage Notice if an effective Blockage Notice shall
have been given within 360 days prior thereto.

                    (iii) For purposes of this Section 4, a "Blockage Period"
with respect to a Blockage Notice is the period commencing upon the Company's
receipt of such Blockage Notice and having the duration set forth in the
particular agreement establishing the Senior Indebtedness to which the Company
is a party; provided, that, such Blockage Period is no more than 90 days.

          Notwithstanding the foregoing, the Blockage Period shall be
inapplicable or cease to be effective if an Event of Default pursuant to Section
3(d) or (e) shall have occurred. In addition, any Blockage Period shall cease to
be effective if at any time during such period (i) substantial assets of the
Company are sold or otherwise disposed of outside of the ordinary course of
business for less than fair value or (ii) payment or any distribution of any
character, whether in cash, securities or other property of the Company shall be
made to or received by any creditor on any indebtedness which is on the same
level of priority with or junior and subordinate in right of payment to this
Note.

          Upon the expiration or termination of any Blockage Period, the Payee
shall be entitled to exercise any of its rights with respect to this Note other
than any right to accelerate the maturity date of this Note based upon the
occurrence of any Event of Default in respect thereto which has been cured or
otherwise remedied during the Blockage Period.

               (d) Payments and Distributions Received. If the Payee shall have
received any payment from or distribution of assets of the Company in respect of
Obligations in contravention of the terms of this Section 4 before all Senior
Indebtedness is paid in full, then and in such event such payment or
distribution shall be received and held in trust for and shall be paid over or
delivered to the holders of Senior Indebtedness to the extent necessary to pay
all such Senior Indebtedness in full.

               (e) Proofs of Claim. If, while any Senior Indebtedness is
outstanding, any Event of Default under Section 3(d) or (e) of this Note occurs,
the Payee shall duly and promptly take such action as any holder of Senior
Indebtedness may reasonably request to collect any payment with respect to this
Note for the account of the holders of the Senior Indebtedness and to file
appropriate claims or proofs of claim in respect of this Note. Upon the failure
of the Payee to take any such action, each holder of Senior Indebtedness is
hereby irrevocably authorized and empowered (in its own name or otherwise), but
shall have no obligation, to demand, sue for, collect and receive every payment
or distribution referred to in respect of this Note and to file claims and
proofs of claim and take such other action as it may deem necessary or advisable
for the exercise or enforcement of any of the rights or interests of the Holder
with respect to this Note.

               (f) Subrogation. After all amounts payable under or in respect of
Senior Indebtedness are paid in full in cash, the Payee shall be subrogated to
the rights of holders of Senior Indebtedness to receive payments or
distributions applicable to Senior Indebtedness to the extent that distributions
otherwise payable to the Payee have been applied to the payment of Senior
Indebtedness. A distribution made under this Section 4 to a holder of Senior
Indebtedness which otherwise would have



<PAGE>


                                                             Page 31 of 38 Pages


been made to the Payee is not, as between the Company and the Payee, a payment
by the Company on Senior Indebtedness.

               (g) Relative Rights. This Section 4 defines the relative rights
of the Payee and the holders of Senior Indebtedness. Nothing in this Section 4
shall (i) impair, as between the Company and the Payee, the obligation of the
Company, which is absolute and unconditional, to pay principal of and interest
(including Default Interest) on this Note in accordance with its terms; (ii)
effect the relative rights of the Payee and creditors of the Company other than
holders of Senior Indebtedness; (iii) prevent the Payee from exercising its
available remedies upon an Event of Default, subject to the rights, if any,
under this Section 4 of holders of Senior Indebtedness or (iv) prevent the Payee
from exercising its conversion rights under Section 5.

               (h) Subordination May Not Be Impaired by the Company. No right of
any holder of any Senior Indebtedness to enforce the subordination of the
Obligations evidenced by this Note shall be impaired by any failure by the
Company or such holder of Senior Indebtedness to act or by the failure of the
Company or such holder to comply with this Note. The provisions of this Section
4 shall continue to be effective or be reinstated, as the case may be, if at any
time any payment of any of the Senior Indebtedness is rescinded or must
otherwise be returned by any holder of Senior Indebtedness as a result of the
insolvency, bankruptcy or reorganization of the Company or otherwise, all as
though such payment had not been made.

               (i) Payments. A payment with respect to principal of or interest
on the Obligations shall include, without limitation, payment of principal of
and interest on this Note, and any payment on account of mandatory prepayment
provisions.

               (j) Section Not to Prevent Events of Default. The failure to make
a payment on account of principal of or interest on or other amounts
constituting the Obligations by reason of any provision of this Section 4 shall
not be construed as preventing the occurrence of an Event of Default under
Section 3.

          5. Conversion.

               (a) Right to Convert. Subject to the terms and conditions of this
Section 5, the Payee shall have the right, at its option, at any time and from
time to time, to convert all or any portion of the principal amount of this Note
and any accrued and unpaid interest thereon (collectively, "Note Obligations")
into a number of fully paid and nonassessable shares of the Payor's Series C
Convertible Preferred Stock, $.01 par value per share (the "Series C Preferred
Stock"), equal to the quotient obtained by dividing the aggregate amount of the
Note Obligations to be so converted by the Series C Face Value (as defined in
the Certificate of Designations relating to the Series C Preferred Stock).

               (b) Procedure for Conversion. In order to convert all or any
portion of the Note Obligations, the Payee shall (i) surrender this Note, duly
endorsed, at the office of the Payor and (ii) simultaneously with such
surrender, notify the Payor in writing of its election to convert all or a
portion of the Note Obligations, which notice shall specify the amount of
principal and interest included in the Note Obligations to be so converted. The
date on which the Note is surrendered for conversion is referred to herein as
the "Conversion Date." As soon as practicable after the Conversion Date, the
Payee shall be entitled to receive a certificate or certificates, registered in
such name or names as the Payee may direct,



<PAGE>


                                                             Page 32 of 38 Pages


representing the shares of Series C Preferred Stock issuable upon conversion of
the applicable Note Obligations, along with a new promissory note, in the same
form as this Note, reflecting any Note Obligations that have not been so
converted; provided that the Payee shall be treated for all purposes as the
record holder of such shares of Series C Preferred Stock as of the Conversion
Date. The issuance of shares of Series C Preferred Stock upon conversion of any
Note Obligations shall be made without charge to the Payee for any issuance tax
in respect thereof, provided that the Payor shall not be required to pay any tax
that may be payable in respect of any transfer involved in the issuance and
delivery of any certificate in a name other than that of the Payee.

               (c) Reservation of Shares. Payor shall reserve and keep available
solely for issuance upon the conversion of Note Obligations such number of
shares of Series C Preferred Stock as will from time to time be sufficient to
permit the conversion of all outstanding Note Obligations and such number of
shares of Common Stock as will from time to time be sufficient to permit the
conversion of all such shares of Series C Preferred Stock (collectively, the
"Conversion Securities"), and, if applicable, shall take all action to increase
the authorized number of shares of Series C Preferred Stock and/or Common Stock
if at any time there shall be insufficient authorized but unissued Series C
Preferred Stock and/or Common Stock to permit such reservation or permit the
conversion of all outstanding Note Obligations and/or Series C Preferred Stock
issuable upon conversion of such Note Obligations. The Payor covenants that all
Conversion Securities that shall be so issued shall be duly authorized, validly
issued, fully paid and non-assessable by the Payor, not subject to any
preemptive rights, and free from any taxes, liens and charges with respect to
the issue thereof. The Payor will take all such action as may be necessary to
ensure that all such Conversion Securities may be so issued without violation of
any applicable law or regulation, or any requirement of any national securities
exchange or quotation system upon which the Payor's Common Stock may be listed.

          6. Suits for Enforcement.

               (a) Upon the occurrence of any one or more Events of Default, the
holder of this Note may proceed to protect and enforce its rights by suit in
equity, action at law or by other appropriate proceeding in aid of the exercise
of any power granted in this Note, or may proceed to enforce the payment of this
Note, or to enforce any other legal or equitable right it may have as a holder
of this Note.

               (b) The holder of this Note may direct the time, method and place
of conducting any proceeding for any remedy available to itself.

               (c) In case of any Event of Default, the Payor will pay to the
holder of this Note such amounts as shall be sufficient to cover the reasonable
costs and expenses of such holder due to such Event of Default, including
without limitation, costs of collection and reasonable fees, disbursements and
other charges of counsel incurred in connection with any action in which the
holder prevails.

          7. Notices. All notices, demands and other communications provided for
or permitted hereunder shall be made in accordance with the provisions of the
Series C Preferred Stock and Note Purchase Agreement, dated as of the date
hereof, by and among the Payor and the investors listed on Schedule 1 thereto.


<PAGE>


                                                             Page 33 of 38 Pages


          8. Successors and Assigns. This Note shall inure to the benefit of and
be binding upon the successors and permitted assigns of the parties hereto. The
Payor may not assign any of its rights or obligations under this Note without
the prior written consent of Payee. The Payee may assign all or a portion of
their rights or obligations under this Note to an affiliate without the prior
written consent of the Payor.

          9. Amendment and Waiver.

               (a) No failure or delay on the part of the Payor or Payee in
exercising any right, power or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, power or
remedy preclude any other or further exercise thereof or the exercise of any
other right, power or remedy. The remedies provided for herein are cumulative
and are not exclusive of any remedies that may be available to the Payor or
Payee at law, in equity or otherwise.

               (b) Any amendment, supplement or modification of or to any
provision of this Note, any waiver of any provision of this Note and any consent
to any departure by the Payor from the terms of any provision of this Note,
shall be effective (i) only if it is made or given in writing and signed by the
Payor and the Payee and (ii) only in the specific instance and for the specific
purpose for which made or given.

          10. Headings. The headings in this Note are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.

          11. GOVERNING LAW. THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
CONFLICTS OF LAW PRINCIPLES THEREOF.

          12. Costs and Expenses. The Payor hereby agrees to pay on demand all
reasonable out-of-pocket costs, fees, expenses, disbursements and other charges
(including but not limited to the fees, expenses, disbursements and other
charges of Paul, Weiss, Rifkind, Wharton & Garrison, special counsel to the
Payee) of the Payee arising in connection with any consent or waiver granted or
requested hereunder or in connection herewith, and any renegotiation, amendment,
work-out or settlement of this Note or the indebtedness arising hereunder.

          13. Waiver of Jury Trial and Setoff. The Payor hereby waives trial by
jury in any litigation in any court with respect to, in connection with, or
arising out of this Note or any instrument or document delivered pursuant to
this Note, or the validity, protection, interpretation, collection or
enforcement thereof, or any other claim or dispute howsoever arising, between
any Payor and the Payee; and the Payor hereby waives the right to interpose any
setoff or counterclaim or cross-claim in connection with any such litigation,
irrespective of the nature of such setoff, counterclaim or cross-claim except to
the extent that the failure so to assert any such setoff, counterclaim or
cross-claim would permanently preclude the prosecution of the same.

          14. Consent to Jurisdiction. The Payor hereby irrevocably consents to
the nonexclusive jurisdiction of the courts of the State of New York and of any
federal court located in such State in connection with any action or proceeding
arising out of or relating to this Note or any document or instrument delivered
pursuant to this Agreement.


<PAGE>


                                                             Page 34 of 38 Pages


          15. Severability. If any one or more of the provisions contained
herein, or the application thereof in any circumstance, is held invalid, illegal
or unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provisions hereof shall not be in any way impaired,
unless the provisions held invalid, illegal or unenforceable shall substantially
impair the benefits of the remaining provisions hereof.

          16. Entire Agreement. This Note is intended by the parties as a final
expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter hereof. There are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein. This Note
supersedes all prior agreements and understandings between the parties with
respect to such subject matter.

          17. Further Assurances. The Payor shall execute such documents and
perform such further acts (including, without limitation, obtaining any
consents, exemptions, authorizations or other actions by, or giving any notices
to, or making any filings with, any governmental authority or any other Person)
as may be reasonably required or desirable to carry out or to perform the
provisions of this Note.

                                      BLUEFLY, INC.

                                      By:  ________________________________
                                               Name:
                                               Title:


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>5
<FILENAME>bluefly_13d-15exhmmm.txt
<DESCRIPTION>WAIVER AND CONSENT OF THE HOLDERS
<TEXT>

                                                             Page 35 of 38 Pages

                                                                     EXHIBIT MMM

                               WAIVER AND CONSENT
                                OF THE HOLDERS OF
                      SERIES A CONVERTIBLE PREFERRED STOCK,
                      SERIES B CONVERTIBLE PREFERRED STOCK
                                       AND
                     SERIES 2002 CONVERTIBLE PREFERRED STOCK
                                OF BLUEFLY, INC.

          The  undersigned,  constituting  the  holders of all of the issued and
outstanding  shares of the Series A Convertible  Preferred  Stock (the "Series A
Preferred  Stock"),  the Series B  Convertible  Preferred  Stock (the  "Series B
Preferred  Stock") and the Series 2002 Convertible  Preferred Stock (the "Series
2002  Preferred   Stock")  of  Bluefly,   Inc.,  a  Delaware   corporation  (the
"Corporation"),  hereby  covenant  and agree as follows and adopt the  following
resolutions  pursuant to Section 228 of the General Corporation Law of the State
of  Delaware  in lieu of holding  meetings  of the holders of Series A Preferred
Stock (the "Series A Preferred Stockholders"), the holders of Series B Preferred
Stock (the "Series B Preferred Stockholders") and the holders of the Series 2002
Preferred Stock (the "Series 2002 Preferred Stockholders"), and direct that this
waiver and consent be filed with the minutes of the Corporation:

     WHEREAS,  the Corporation  desires to issue and sell to Quantum  Industrial
Partners LDC and SFM Domestic  Investments LLC (collectively,  the "Investors"),
pursuant to a Series C Preferred Stock and Note Purchase Agreement substantially
in the form attached hereto as Exhibit A (the "Series C Preferred Stock and Note
Purchase  Agreement"):  (a) for an aggregate  purchase price of  $1,000,000,  an
aggregate of 1,000 shares (the "Series C Shares") of  newly-designated  Series C
Convertible  Preferred Stock, par value $0.01 per share (the "Series C Preferred
Stock"),  having the  rights and  preferences  set forth in the  Certificate  of
Designations  of Series C Preferred  Stock attached hereto as Exhibit B; and (b)
for an aggregate  purchase price of $2,000,000,  convertible  demand  promissory
notes,  in the form  attached as Exhibit A to the Series C  Preferred  Stock and
Note Purchase  Agreement,  in the aggregate  principal amount of $2,000,000 (the
"Notes," and, together with the Series C Shares, the "Securities");

     WHEREAS,  Sections  5.5.1 and  5.6.1 of the  Corporation's  certificate  of
incorporation  (the "Certificate of  Incorporation")  provide that,  without the
approval of the  holders of a majority  of each of the Series A Preferred  Stock
and Series B Preferred  Stock,  voting  separately as a class,  the  Corporation
shall not, among other things,  issue or sell  securities of the  Corporation or
incur indebtedness in excess of $1,000,000;

     WHEREAS,  Section 5.11 of the Certificate of Incorporation provides certain
preemptive rights to the Series A Preferred  Stockholders and Series B Preferred
Stockholders  with respect to certain  proposed  issuances of  securities of the
Corporation;

     WHEREAS,  Section 7 of the  Certificate  of  Designations  relating  to the
Series 2002  Preferred  Stock (the "Series 2002  Certificate  of  Designations")
provides  that,  without the prior  approval of the holders of a majority of the
shares of the Series 2002 Preferred Stock,  the Corporation  shall not designate


<PAGE>


                                                             Page 36 of 38 Pages


or issue any shares of capital stock of the Corporation, or any rights, warrants
or  options   exchangeable   for  or  convertible  into  capital  stock  of  the
Corporation,  ranking  pari passu with or senior to the  Series  2002  Preferred
Stock  in  the  event  of a  liquidation,  dissolution  or  winding  up  of  the
Corporation,  and the Series C  Preferred  Stock  would rank pari passu with the
Series 2002 Preferred Stock with respect to such matters;

     WHEREAS,  the  issuance of the Series C  Preferred  Stock will result in an
adjustment to the Series B Conversion  Price (as defined in the  Certificate  of
Incorporation)  pursuant to Section 5.8.6 of the  Certificate  of  Incorporation
(the "Series B Adjustment");

     WHEREAS,  Section 5.8.9 of the Certificate of  Incorporation  prohibits the
Corporation  from taking any action that results in any adjustment to the Series
B Conversion  Price if the total number of shares of Common Stock (as defined in
the  Certificate  of  Incorporation)  issued and issuable after such action upon
conversion of the Convertible  Preferred Stock (as defined in the Certificate of
Incorporation)  would  exceed  the total  number of shares of Common  Stock then
authorized  by  the  Certificate  of  Incorporation   (the  "Stock   Reservation
Provision"),  and following the Series B Adjustment,  the total number of shares
of Common Stock issued and issuable upon conversion of the Convertible Preferred
Stock  would  exceed  the total  number of  shares  of  Common  Stock  currently
authorized by the Certificate of Incorporation;

     WHEREAS,  the  Board  of  Directors  of the  Corporation  has  approved  an
amendment to the  Certificate  of  Incorporation  that would  increase the total
number of shares of Common  Stock  authorized  for issuance to  92,000,000  (the
"Increase  in  Authorized  Capital"),  and has  directed  that the  Increase  in
Authorized  Capital be submitted  to the  Corporation's  stockholders  for their
approval;

     WHEREAS,  following the Increase in Authorized Capital, the total number of
shares of Common Stock  authorized by the  Certificate  of  Incorporation  would
exceed  the total  number of shares of Common  Stock  issued and  issuable  upon
conversion of the Convertible  Preferred Stock (taking into account the issuance
of the Securities and the Series B Adjustment); and

     WHEREAS,   pursuant  to  Section  5  of  the  Series  2002  Certificate  of
Designations,  the Series 2002 Preferred  Stockholders have the right to convert
their shares of Series 2002 Preferred Stock into Series C Preferred Stock.

NOW, THEREFORE, BE IT:

     RESOLVED, that (1) the designation of the Series C Preferred Stock, (2) the
issuance and sale to the Investors, pursuant to the Series C Preferred Stock and
Note Purchase Agreement, of the Securities, (3) the issuance of shares of Series
C  Preferred  Stock upon the  conversion  of the Notes and (4) the  issuance  of
shares of Common Stock upon the  conversion  of any shares of Series C Preferred
Stock are each hereby approved in all respects; and it is further


<PAGE>


                                                             Page 37 of 38 Pages


     RESOLVED,  that the  preemptive  rights  granted to the Series A  Preferred
Stockholders and Series B Preferred Stockholders pursuant to Section 5.11 of the
Certificate of Incorporation  are hereby waived with respect to (1) the issuance
and sale of the  Securities to the Investors  pursuant to the Series C Preferred
Stock  and Note  Purchase  Agreement,  (2) the  issuance  of  shares of Series C
Preferred Stock upon the conversion of the Notes, and (3) the issuance of shares
of Common Stock upon the  conversion of any shares of Series C Preferred  Stock;
and it is further

     RESOLVED,  that the Series B Preferred Stockholders hereby waive any breach
of the Stock Reservation  Provision  resulting from the issuance and sale of the
Securities  and the Series B Adjustment,  and agree not to convert any shares of
Series B  Preferred  Stock to the  extent  that,  after  giving  effect  to such
conversion, the total number of shares of Common Stock issued from and after the
date hereof as a result of the conversion of shares of Series B Preferred  Stock
would  exceed  13,281,038  (subject to  adjustment  for any stock  split,  stock
dividend,  reclassification  or  similar  transaction)  until  the  Increase  in
Authorized Capital has been approved by the Corporation's  stockholders;  and it
is further

     RESOLVED,  that the Series 2002 Preferred  Stockholders  hereby waive their
rights to convert the Series 2002 Preferred  Stock into Series C Preferred Stock
in  connection  with the  issuance  and sale of the  Series C Shares;  and it is
further

     RESOLVED,  that this  waiver and  consent  may be  executed  in one or more
counterparts,  each of which shall be deemed an original and all of which,  when
taken together, shall be deemed one and the same instrument.


                  [Remainder of Page Intentionally Left Blank]


<PAGE>


                                                             Page 38 of 38 Pages


         IN WITNESS WHEREOF, the undersigned have caused this waiver and consent
to be executed as of this 27th day of September 2002.

                                        QUANTUM INDUSTRIAL PARTNERS LDC


                                        By: ____________________________
                                        Name:
                                        Title:

                                        SFM DOMESTIC INVESTMENTS LLC


                                        By: ____________________________
                                        Name:
                                        Title:

                                        PILOT DOMESTIC TRUST


                                        By: ____________________________
                                        Name:
                                        Title:

                                        THE LYNCH FOUNDATION


                                        By: ____________________________
                                        Name:
                                        Title:


                                        ________________________________
                                        Peter Lynch



                                        ________________________________
                                        Carolyn Lynch

</TEXT>
</DOCUMENT>
</SUBMISSION>
