Exhibit 10.2
 
AMENDED AND RESTATED VOTING AGREEMENT
 
THIS AMENDED AND RESTATED VOTING AGREEMENT (this “Agreement”) dated as of
December 21, 2009, by and among Bluefly, Inc., a Delaware corporation (the
“Company”), Quantum Industrial Partners LDC (“QIP”), SFM Domestic Investments,
LLC, (“SFM” and, together with QIP, the “Soros Parties”), Maverick Fund USA,
Ltd., Maverick Fund, L.D.C., Maverick Fund II, Ltd. (collectively, the “Maverick
Parties”), Prentice Capital Partners, LP, Prentice Capital Partners QP, LP,
Prentice Capital Offshore, Ltd., S.A.C. Capital Associates, LLC (“SAC”), GPC
XLIII, LLC, PEC I, LLC  (collectively, the “Prentice Parties”; the Soros
Parties, the Maverick Parties and the Prentice Parties, collectively, the
“Existing Stockholders”) and Rho Ventures VI, LP (“Rho”; the Soros Parties, the
Maverick Parties, the Prentice Parties and Rho, collectively, the
“Stockholders”).

WHEREAS, the Company and the Existing Stockholders have entered into that
certain Voting Agreement dated as of June 15, 2006 (the “Existing Agreement”);

WHEREAS, the Company and Rho have entered into a Securities Purchase Agreement,
dated as of December 21, 2009 (the “Securities Purchase Agreement”), pursuant to
which the Company has agreed to sell, and Rho has agreed to purchase, an
aggregate of 8,823,529 shares of the Company’s common stock, par value $0.01 per
share (the “Common Stock”), which shall be consummated in two separate closings;
an initial closing at which Rho will purchase a number of shares of Common Stock
equal to 19.9% of the Company’s outstanding Common Stock (the “Initial
Closing”), and a second closing at which Rho will purchase the remaining shares
of Common Stock not purchased at the Initial Closing (the “Second Closing”),
which Second Closing shall take place following approval by the Company’s
stockholders of the issuance of such remaining shares, as required by the rules
and regulations of the NASDAQ Capital Market (the “Stockholder Approval
Condition”); and

WHEREAS, it is a condition to the parties’ obligations under the Securities
Purchase Agreement that the Company and the Existing Stockholders amend and
restate the Existing Agreement, for the purpose of setting forth the terms and
conditions pursuant to which (i) the Company’s Board of Directors (the “Board”)
shall be restructured into a classified board, (ii) the Stockholders shall vote
their shares of Common Stock in favor of certain designees to the Board and
(iii) the Existing Stockholders shall vote their shares of Common Stock in
support of the Stockholder Approval Condition and the Board Restructuring
Condition (as hereinafter defined).

NOW, THEREFORE, in consideration for the mutual covenants contained herein, and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto, intending to be legally bound,
agree to amend and restate the Existing Agreement as follows:

 
 

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ARTICLE I
BOARD OF DIRECTORS
 
SECTION 1.1  Board Restructuring.  Subject to receipt of stockholder approval to
amend the Company’s certificate of incorporation to effect the Board
Restructuring (the “Board Restructuring Condition”), at the Second Closing, the
Board shall be restructured into a ten member Board consisting of three classes
of directors with staggered terms, as follows (the “Board Restructuring”):
 
(i)           three directors shall be up for election in 2012, which shall
consist of one designee of the Soros Parties, one designee of Rho, and one
outside independent director;
 
(ii)          three directors shall be up for election in 2011, which shall
consist of one designee of the Soros Parties, one designee of Rho, and the
Company’s Chief Executive Officer; and
 
(iii)         four directors shall be up for election in 2010, which shall
consist of two outside directors, one designee of Maverick, and one designee of
Prentice.
 
Prior to receipt of approval by the Company’s stockholders of the Board
Restructuring Condition, the Board shall continue as a declassified Board
consisting of between 10 and 12 members, including the members nominated in
accordance with Section 1.2. Subsequent to the earlier of (i) the receipt of
approval by the Company’s stockholders of the Board Restructuring Condition or
(ii) the date of the Company’s receipt of the Rho Notice (pursuant to, and as
defined in, that certain Registration Rights Agreement dated as of the date
hereof among the Company and the Stockholders), the Board shall have no more
than 10 members unless otherwise agreed in writing by Rho and Soros.
 
SECTION 1.2  Designation of Directors.  As of the Initial Closing and, except as
otherwise provided herein, continuing subsequent to the receipt of approval by
the Company’s stockholders of the Board Restructuring Condition or the date of
the Company’s receipt of the Rho Notice, as applicable,
 
(a)          subject to Section 1.6(a), the Soros Parties shall be entitled to
designate to serve on the Board, two designees;
 
(b)          subject to Section 1.6(b), Rho shall be entitled to designate to
serve on the Board, two designees, one of which such designees shall be elected
to the Board immediately after the date hereof and the other such designee shall
be elected to the Board in January 2010;
 
(c)          subject to Section 1.6(c), the Maverick Parties shall be entitled
to designate to serve on the Board, one designee; and
 
(d)          subject to Section 1.6(d), the Prentice Parties (other than SAC)
shall be entitled to designate to serve on the Board, one designee.
 
SECTION 1.3  Nomination.  Subject to limitations, if any, imposed by stock
exchange rules in effect from time to time or stock exchange interpretations
requiring Board representation to

 
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be proportional to stock ownership ( “Proportionality Requirements”), the
Company agrees to cause the persons designated pursuant to Section 1.2 to be
nominated for election in accordance with such person’s term (or staggered term,
as the case may be) at meetings of the stockholders of the Company called with
respect to the election of members of the Board, and at every adjournment or
postponement thereof, and on each action or approval by written consent with
respect to the election of members of the Board consistent with such person’s
term or staggered term (as the case may be).
 
SECTION 1.4  Agreement to Vote.
 
(a)          The Stockholders hereby agree that at any meeting of the
stockholders of the Company, however called, or at any adjournment or
postponement thereof or in any other circumstances upon which a vote, consent or
other approval (including by written consent) is sought for the election of
members to the Board (a “Board Vote”), the Stockholders shall (a) when a Board
Vote is held, appear at such Board Vote or otherwise cause all shares of capital
stock of the Company owned by them to be counted as present thereat for the
purpose of establishing a quorum and (b) vote (or cause to be voted) all shares
of capital stock of the Company owned by them in favor of the persons designated
pursuant to Section 1.2.  The failure of any Stockholder entitled to designate
nominees pursuant to Section 1.2 to fully exercise its respective designation
rights shall not constitute a waiver or dimunition of such rights nor shall it
prevent such Stockholder from exercising such rights prospectively.
 
(b)          Should a person designated pursuant to Section 1.2 be unwilling or
unable to serve, or otherwise cease to serve (including by means of removal in
accordance with the following clause (c)), the Stockholders who originally
nominated such director shall be entitled to designate any replacement director.
 
(c)          If (i) the Soros Parties propose to remove any director designated
by the Soros Parties, (ii) Rho proposes to remove any director designated by
Rho, (iii) the Maverick Parties propose to remove any director designated by the
Maverick Parties or (iv) the Prentice Parties propose to remove any director
designated by the Prentice Parties, the Stockholders agree to cooperate in, and
shall vote all shares of capital stock of the Company owned by them (or, if any
action is being taken by written consent, execute a written consent) in support
of, such removal and any resulting vacancy shall be filled in accordance with
the preceding clause (b).  The Stockholders agree not to take any action to
remove, with or without cause, any director other than in accordance with the
foregoing.
 
SECTION 1.5  Committees of the Board of Directors.
 
(a)          The Company and the Soros Parties agree that, subject to applicable
law, rules or regulations (including stock exchange regulations), the Soros
Parties have the right to have one person designated by the Soros Parties
pursuant to Section 1.2(a) serve on any committee of the Board; provided that if
the Nasdaq rules require that such committee must consist of members who are
“independent” (as defined in applicable Nasdaq rules), then such designee must
be “independent”.
 

 
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(b)          The Company and Rho agree that, subject to applicable law, rules or
regulations (including stock exchange regulations), Rho has the right to have
one person designated by Rho pursuant to Section 1.2(b) serve on any committee
of the Board; provided that if the Nasdaq rules require that such committee must
consist of members who are “independent” (as defined in applicable Nasdaq
rules), then such designee must be “independent”.
 
(c)          The Company and the Maverick Parties agree that, subject to
applicable law, rules or regulations (including stock exchange regulations), the
Maverick Parties have the right to have one person designated by the Maverick
Parties pursuant to Section 1.2(c) serve on any committee of the Board; provided
that if the Nasdaq rules require that such committee must consist of members who
are “independent” (as defined in applicable Nasdaq rules), then such designee
must be “independent”.
 
(d)          The Company and the Prentice Parties (other than SAC) agree that,
subject to applicable law, rules or regulations (including stock exchange
regulations), the Prentice Parties (other than SAC) have the right to have one
person designated to the Board by the Prentice Parties pursuant to Section
1.2(d) serve on any committee of the Board; provided that if the Nasdaq rules
require that such committee must consist of members who are “independent” (as
defined in applicable Nasdaq rules), then such designee must be “independent”.
 
(e)          The parties hereto agree that if the Company establishes an
Executive Committee (or a committee with executive or similar functions) of the
Board (the “Executive Committee”), then (i) the persons designated by the Soros
Parties pursuant to Section 1.2(a) shall serve on such Executive Committee, (ii)
the persons designated by Rho pursuant to Section 1.2(b) shall serve on such
Executive Committee, (iii) the person designated by the Maverick Parties
pursuant to Section 1.2(c) shall serve on such Executive Committee and (iv) the
person designated by the Prentice Parties pursuant to Section 1.2(d) shall serve
on such Executive Committee.
 
SECTION 1.6  Resignation.
 
(a)           (1)           If the Soros Parties dispose of their capital stock
of the Company so that they own less than the greater of 50% of their Current
Shares or the minimum number of shares that are required to be owned under
applicable Nasdaq rules and regulations with respect to the Proportionality
Requirements which would allow the Soros Parties to designate two directors to
serve on the Board, they shall cause one of the directors designated by them
pursuant to Section 1.2(a) to resign from the Board.
 
(ii)           If the Soros Parties dispose of their capital stock of the
Company so that they own less than the greater of 25% of their Current Shares or
the minimum number of shares that are required to be owned under applicable
Nasdaq rules and regulations with respect to the Proportionality Requirements
which would allow the Soros Parties to designate one director to serve on the
Board (a “Soros Termination Event”), they shall cause each of the directors
designated by them pursuant to Section 1.2(a) to resign from the Board.
 
(b)           (i)           If Rho disposes of its capital stock of the Company
so that it owns less than the greater of 28% of its Current Shares or the
minimum number of shares that are required to be owned under applicable Nasdaq
rules and regulations with respect to the
 

 
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Proportionality Requirements which would allow Rho to designate two directors to
serve on the Board, it shall cause one of the directors designated by it
pursuant to Section 1.2(b) to resign from the Board.
 
(ii)           If Rho disposes of its capital stock of the Company so that it
owns less than the greater of 14% of its Current Shares or the minimum number of
shares that are required to be owned under applicable Nasdaq rules and
regulations with respect to the Proportionality Requirements which would allow
Rho to designate one director to serve on the Board (a “Rho Termination Event”),
it shall cause each of the directors designated by it pursuant to Section 1.2(b)
to resign from the Board.
 
(c)          If the Maverick Parties dispose of their capital stock of the
Company so that they own less than the greater of 50% of their Current Shares or
the minimum number of shares that are required to be owned under applicable
Nasdaq rules and regulations with respect to the Proportionality Requirements
which would allow the Maverick Parties to designate one director to serve on the
Board (a “Maverick Termination Event”), they shall cause the director designated
by them pursuant to Section 1.2(c) to resign from the Board.
 
(d)          If the Prentice Parties dispose of their capital stock of the
Company so that they own less than the greater of 50% of their Current Shares or
the minimum number of shares that are required to be owned under applicable
Nasdaq rules and regulations with respect to the Proportionality Requirements
which would allow the Prentice Parties to designate one director to serve on the
Board (a “Prentice Termination Event”), they shall cause the director designated
by them pursuant to Section 1.2(d) to resign from the Board.
 
(e)          “Current Shares” shall mean (i) with respect to the Maverick
Parties and the Prentice Parties, the shares of capital stock of the Company
beneficially owned by the Maverick Parties or the Prentice Parties, as
applicable, immediately following the closing of the transactions contemplated
by the Stock Purchase Agreement, dated as of June 5, 2006, by and among the
Company, the Soros Parties, the Maverick Parties and the Prentice Parties (the
“Original Closing”), including shares of capital stock of the Company issuable
upon exercise of warrants or options outstanding immediately following the
Original Closing and (ii) with respect to the Soros Parties and Rho, the shares
of capital stock of the Company owned by or for the benefit of the Soros Parties
or Rho, as applicable, immediately following the Initial Closing, including
shares of capital stock of the Company issuable upon exercise of warrants or
options outstanding immediately following the Initial Closing; provided, that,
with respect to Rho, if the Second Closing occurs, “Current Shares” shall mean
the shares of Common Stock of the Company owned by or for the benefit of Rho
immediately following the Second Closing, including shares of capital stock of
the Company issuable upon exercise of warrants or options outstanding
immediately following the Second Closing.
 
(f)           If either a Maverick Termination Event or a Prentice Termination
Event occurs, then the size of the Board shall be reduced by the number of
directors resigning from the Board and, for so long as Rho and/or Soros
respectively owns 10% or more of the outstanding Common Stock, the size of the
Board may not be increased to larger than an eight member Board without the
prior written consent of Rho and/or Soros (as applicable).
 
 
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SECTION 1.7  Liability.  No Party who shall vote or consent or withhold consent
or make a request in their capacity as a stockholder of the Company with respect
to any securities subject to this Agreement on, to or from any matter in
compliance with the terms hereof shall, as a result of any such vote or consent
or withholding of consent or making of a request, have any obligation or
liability to any other party hereto (whether such other party shall also vote or
consent or withhold consent or make a request with respect to any securities,
then subject to this Agreement).
 
SECTION 1.8  Reimbursement of Expenses; Director Fees.  The Company shall
reimburse the directors for all reasonable out-of-pocket expenses incurred in
connection with their attendance at meetings of the Board and any committees
thereof, including without limitation travel, lodging and meal expenses.  For
the avoidance of doubt, directors designated by Rho shall receive (a) equity
based compensation for serving on the Board and on any committees thereof
equivalent to the equity based compensation paid to other non-management
directors for such service and (b) cash compensation for serving on the Board
and any committees thereof equivalent to the cash compensation paid to the
directors designated to the Board by any of the Existing Stockholders.
 
SECTION 1.9  D&O Insurance.  To the extent available on commercially reasonable
terms, the Company shall obtain and maintain customary director and officer
indemnity insurance on commercially reasonable terms and the terms of such
insurance shall be reasonably acceptable to (i) for so long as Rho is entitled
to designate at least one director for election to the Board pursuant to Section
1.2(b), Rho, and (ii) for so long as Soros is entitled to designate at least one
director for election to the Board pursuant Section 1.2(a), Soros.
 
SECTION 1.10  Information.  Each Stockholder and the Company agrees and
acknowledges that the directors designated by Rho may share confidential,
non-public information about the Company with Rho; provided that Rho agrees to
keep such information confidential and agrees to comply with all applicable
securities laws in connection therewith, and provided, further, that information
protected by attorney client privilege or attorney work product will not be
disclosed to the extent such disclosure will cause the loss of such privilege.
 
ARTICLE II
SUPPORT AGREEMENT; LOCK-UP
 
SECTION 2.1  Support Agreement.  The Existing Stockholders hereby agree that at
any meeting of the stockholders of the Company, however called, or at any
adjournment or postponement thereof or in any other circumstances upon which a
vote, consent or other approval (including by written consent) is sought (a
“Company Stockholders’ Vote”), the Existing Stockholders shall (a) when a
Company Stockholders’ Vote is held, appear at such Company Stockholders’ Vote or
otherwise cause all Eligible Vote Shares to be counted as present thereat for
the purpose of establishing a quorum and (b) vote (or cause to be voted) all
Eligible Vote Shares in favor of the Stockholder Approval Condition and the
Board Restructuring Condition.  “Eligible Vote Shares ” means, with respect to a
particular Existing Stockholder, the aggregate number of shares of Common Stock
held by such Existing Stockholder, multiplied by the Specified
Portion.  “Specified Portion” means the percentage of the shares of Common Stock
owned by the Existing Stockholders, which (when aggregated with the shares of
Common Stock purchased by Rho at the
 

 
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Initial Closing or otherwise beneficially owned by it and eligible to be voted
in such Company Stockholders’ Vote) equals 40% of the outstanding shares of
Common Stock of the Company.  The Specified Portion shall be allocated among the
Existing Stockholders on a pro rata basis in proportion to their respective
share ownership as of the date of the Company Stockholders’ Vote.
 
SECTION 2.2  Lock-Up.
 
(a)          Maverick/Prentice Lock-Up.
 
(i)           Subject to section 2.2(a)(ii), until the date that is 90 days from
the date hereof (the "Prentice/Maverick Initial Lock-Up Termination Date”),
neither the Maverick Parties nor the Prentice Parties will, without the prior
written consent of the Soros Parties, Rho and the Company, (1) sell, offer to
sell, contract or agree to sell, hypothecate, pledge, grant any option to
purchase or otherwise dispose of or agree to dispose of, directly or indirectly,
any shares of capital stock of the Company, (2) enter into any swap or other
arrangement that transfers to another, in whole or in part, any of the economic
consequences of ownership of any shares of capital stock of the Company, or any
securities exchangeable for or any other rights to purchase any shares of
capital stock of the Company or (3) publicly announce an intention to effect any
transaction specified in clause (1) or (2) (such restrictions being referred to
herein as the "Prentice/Maverick Lock-Up Restrictions").  Notwithstanding
anything to the contrary contained herein, the Prentice/Maverick Lock-Up
Restrictions shall not apply to any sale of Common Stock by the Maverick Parties
or the Prentice Parties to Rho or an individual, corporation, partnership,
limited liability company, trust, business trust, association, joint stock
company, joint venture, sole proprietorship, unincorporated organization, or any
other form of entity unaffiliated with Rho (a "Rho Co-Investor"), if (A) such
sale is approved in writing by Rho and, to the extent required under Nasdaq
rules and regulations, the Company’s shareholders and (B) in the case of a sale
to a Rho Co-Investor, the Rho Co-Investor was introduced to Prentice or Maverick
(as applicable) by Rho.  Notwithstanding anything to the contrary contained
herein, the Maverick Parties and Prentice Parties hereby each covenant and agree
that they will comply with the requirements of Section 2.1 with respect to any
shares held by them as of the record date of any Company Stockholders' Vote with
respect to the Stockholder Approval Condition or Board Restructuring Condition,
regardless of any transaction effected pursuant to Section 2.2(a)(i)(1) or (2)
hereof.
 
(ii)          The Prentice/Maverick Lock-Up Restrictions shall continue to apply
with respect to the Prentice Parties or the Maverick Parties (as the case may
be) until the one year anniversary of the Initial Closing (or such earlier date
as Rho and/or Soros is permitted to sell securities that are subject to the
lock-up set forth in Section 2.2(b) hereof) if Rho and/or a Rho Co-Investor
shall have offered, in writing, (and in the case of such a written offer, the
Prentice Parties  or the Maverick Parties, as the case may be, shall not have
accepted such an offer), on or prior to the Prentice/Maverick Initial Lock-Up
Termination Date, to purchase for cash at least 50% (or, in the case of
Prentice, 100%) of the shares of Common Stock owned by the Prentice Parties or
the Maverick Parties (as the case may be) as of the date hereof on pricing terms
no less favorable than those included in the Securities Purchase Agreement, with
such purchase to be consummated within 20 days of delivery of such written
notice.  In connection with any such sale to Rho and/or a Rho Co-Investor,
 

 
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neither the Prentice Parties nor the Maverick Parties (as the case may be) shall
be required to make any representations or warranties concerning the
Company.  Notwithstanding anything contained in this Section 2.2(a)(ii) to the
contrary, the lock-up restrictions applicable to (1) the Prentice Parties
hereunder shall not apply to any transfer by any of the Prentice Parties to any
person so long as Prentice Capital Management, L.P. remains the beneficial owner
of the transferred securities; and (2) the Maverick Parties hereunder shall not
apply to any transfer by any of the Maverick Parties to any person so long as
Maverick Capital, Ltd. remains the beneficial owner of the transferred
securities.  For purposes of this Section 2.2(a)(ii) only, the term “Prentice
Parties” shall not include SAC.
 
(b)          Soros/Rho Lock-Up.  Until the one year anniversary of the date of
the Initial Closing, neither the Soros Parties nor Rho will, without the prior
written consent of non-selling party (i.e., Rho or Soros Parties), (i) sell,
offer to sell, contract or agree to sell, hypothecate, pledge, grant any option
to purchase or otherwise dispose of or agree to dispose of, directly or
indirectly, any shares of capital stock of the Company, (ii) enter into any swap
or other arrangement that transfers to another, in whole or in part, any of the
economic consequences of ownership of any shares of capital stock of the
Company, or any securities exchangeable for or any other rights to purchase any
shares of capital stock of the Company or (iii) publicly announce an intention
to effect any transaction specified in clause (i) or (ii).  Notwithstanding
anything contained in this Section 2.2(b) to the contrary, the lock-up
restrictions applicable to the Soros Parties hereunder shall not apply to any
transfer by the Soros Parties to (1) any of Soros Fund Management LLC or George
Soros or any of their respective affiliates, (2) any person or entity that is
managed (x) by Soros Fund Management LLC or (y) by any person or entity that is
an Affiliate of Soros Fund Management LLC or (3) any person or entity that is a
charitable organization established by George Soros or any of the members of
George Soros’ family.
 
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF EXISTING STOCKHOLDERS
 
Each Existing Stockholder hereby, for itself and for no other Existing
Stockholder, represents and warrants to the Stockholders as follows:
 
SECTION 3.1  Authorization; Binding Agreement.  Such Existing Stockholder has
all requisite legal right, power, authority and capacity to execute and deliver
this Agreement, to perform its obligations hereunder, and to consummate the
transactions contemplated hereby and thereby.  This Agreement has been duly and
validly executed and delivered by or on behalf of such Existing Stockholder and,
assuming its due authorization, execution and delivery by or on behalf of such
Existing Stockholder, constitute the legal, valid and binding obligations of
such Existing Stockholder, enforceable against such Existing Stockholder in
accordance with its respective terms, subject to the effect of any applicable
bankruptcy, insolvency, moratorium or similar law affecting creditors’ rights
generally.
 
SECTION 3.2  No Conflict; Required Filings and Consents.
 
(a)          The execution and delivery of this Agreement by such Existing
Stockholder do not, and the performance of this Agreement by such Existing
Stockholder will not, (i) conflict
 

 
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with or violate any statute, law, rule, regulation, order, judgment or decree
applicable to such Existing Stockholder or by which such Existing Stockholder or
any of such Existing Stockholder’s material properties or assets is bound or
affected, (ii) violate or conflict with the Certificate of Incorporation, Bylaws
or other equivalent organizational documents of such Existing Stockholder, or
(iii) result in or constitute (with or without notice or lapse of time or both)
any breach of or default under, or give to another party any right of
termination, amendment, acceleration or cancellation of, or result in the
creation of any lien or encumbrance or restriction on any of the material
property or assets of such Existing Stockholder pursuant to, any note, bond,
mortgage, indenture, contract, agreement, lease, license, permit, franchise or
other instrument or obligation to which such Existing Stockholder is a party or
by which such Existing Stockholder or any of such Existing Stockholder’s
material properties or assets is bound or affected; except in the case of the
foregoing clauses (i), (ii) and (iii), where such violation, conflict, breach,
default, right of termination, amendment, acceleration or cancellation, lien,
encumbrance or restriction would not, or would reasonably be expected not to,
prevent or materially delay the performance by such Existing Stockholder of such
Existing Stockholder’s obligations under this Agreement.  There is no
beneficiary or holder of a voting trust certificate or other interest of any
trust of which such Existing Stockholder is a trustee whose consent is required
for the execution and delivery of this Agreement or the consummation by such
Existing Stockholder of the transactions contemplated by this Agreement.
 
(b)          The execution and delivery of this Agreement by such Existing
Stockholder do not, and the performance of this Agreement by such Existing
Stockholder will not, require any consent, approval, order, permit or
governmental, authorization or permit of, or filing with or notification to, any
third party or any governmental, regulatory or administrative authority, agency
or commission, domestic or foreign, except as may be required under the Exchange
Act, and except where the failure to obtain such consents, approvals,
authorizations or permits, or to make such filings or notifications, would not,
or would reasonably be expected not to, prevent or materially delay the
performance by such Existing Stockholder of such Existing Stockholder’s
obligations under this Agreement.  Other than as contained in this Agreement,
such Existing Stockholder does not have any understanding in effect with respect
to the voting or transfer of any shares of capital stock of the Company owned by
such Existing Stockholder.
 
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF
THE COMPANY AND RHO
 
Each of the Company and Rho hereby, jointly and not severally, represents and
warrants to the Existing Stockholders as follows:
 
SECTION 4.1  Authorization; Binding Agreement.  Each of the Company and Rho has
all requisite legal right, power, authority and capacity to execute and deliver
this Agreement and to perform its obligations hereunder, and to consummate the
transactions contemplated hereby.  This Agreement has been duly and validly
executed and delivered by or on behalf of each of the Company and Rho and,
assuming its due authorization, execution and delivery by or on behalf of the
Existing Stockholders, constitutes the legal, valid and binding obligation of
the Company and Rho, enforceable against the Company and Rho in accordance with
its terms, subject to the effect
 

 
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of any applicable bankruptcy, insolvency, moratorium or similar law affecting
creditors’ rights generally.
 
SECTION 4.2  No Conflict; Required Filings and Consents.
 
(a)          The execution and delivery of this Agreement by each of the Company
and Rho will not, (i) conflict with or violate any statute, law, rule,
regulation, order, judgment or decree applicable to the Company or Rho or by
which the Company or Rho or any of the Company’s or Rho’s respective material
properties or assets is bound or affected, (ii) violate or conflict with the
Certificate of Incorporation, Bylaws or other equivalent organizational
documents of the Company or Rho, or (iii) result in or constitute (with or
without notice or lapse of time or both) any breach of or default under, or give
to another party any right of termination, amendment, acceleration or
cancellation of, or result in the creation of any lien or encumbrance or
restriction on any of the respective material property or assets of the Company
or Rho pursuant to, any note, bond, mortgage, indenture, contract, agreement,
lease, license, permit, franchise or other instrument or obligation to which the
Company or Rho is a party or by which the Company or Rho or any of the Company’s
or Rho’s respective material properties or assets is bound or affected; except
in the case of the foregoing clauses (i), (ii) and (iii), where such violation,
conflict, breach, default, right of termination, amendment, acceleration or
cancellation, lien, encumbrance or restriction would not, or would reasonably be
expected not to, prevent or materially delay the performance by the Company or
Rho of any of their respective obligations under this Agreement.
 
(b)          The execution and delivery of this Agreement by each of the Company
or Rho do not, and the performance of this Agreement by each of the Company or
Rho will not, require any consent, approval, order, permit or governmental,
authorization or permit of, or filing with or notification to, any third party
or any governmental, regulatory or administrative authority, agency or
commission, domestic or foreign, except as may be required under the Exchange
Act, and except where the failure to obtain such consents, approvals,
authorizations or permits, or to make such filings or notifications, would not,
or would reasonably be expected not to, prevent or materially delay the
performance by the Company or Rho of the Company’s or Rho’s respective
obligations under this Agreement.
 
ARTICLE V
 
MISCELLANEOUS
 

 
SECTION 5.1  Further Assurances.  From time to time and without additional
consideration, the Company and each of the Stockholders shall execute and
deliver, or cause to be executed and delivered, such additional transfers,
assignments, endorsements, proxies, consents and other instruments, and shall
take such further actions, as the Company or any of the Stockholders may
reasonably request for the purpose of carrying out and furthering the intent of
this Agreement.
 
SECTION 5.2  Entire Agreement.  This Agreement, the Securities Purchase
Agreement and the other documents executed in connection therewith
(collectively, the “Transaction Documents”) constitute the entire agreement
between the parties hereto with respect to the subject
 

 
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matter hereof and supersede all previous negotiations, commitments and writings
with respect to such subject matter, including, without limitation, the Existing
Agreement.
 
SECTION 5.3  Assignments; Parties in Interest.  Neither this Agreement nor any
of the rights, interests or obligations hereunder may be assigned by any of the
parties hereto without the prior written consent of the other parties.  This
Agreement shall be binding upon and inure solely to the benefit of each party
hereto, and nothing herein, express or implied, is intended to or shall confer
upon any person not a party hereto any right, benefit or remedy of any nature
whatsoever under or by reason hereof, except as otherwise provided herein.  In
the event that any Stockholder desires to transfer any shares of capital stock
(or rights to purchase shares of capital stock) owned by such Stockholder to any
affiliate of such Stockholder, then it shall be a condition to such transfer
that any such affiliate transferee agree to become a party to, and bound by,
this Agreement in the same capacity as the Stockholder that transferred such
shares of capital stock (or rights to purchase shares of capital stock) to it.
 
SECTION 5.4  Term
 
(a)          The rights and obligations of the Soros Parties hereunder (except
with respect to their obligation to cause directors designated by them to resign
under Section 1.6(a)) shall automatically terminate upon occurrence of a Soros
Termination Event.
 
(b)          The rights and obligations of Rho hereunder (except with respect to
their obligation to cause directors designated by them to resign under Section
1.6(b)) shall automatically terminate upon occurrence of a Rho Termination
Event.
 
(c)          The rights and obligations of the Maverick Parties hereunder
(except with respect to their obligation to cause directors designated by them
to resign under Section 1.6(c)) shall automatically terminate upon occurrence of
a Maverick Termination Event.
 
(d)          The rights and obligations of the Prentice Parties hereunder
(except with respect to their obligation to cause directors designated by them
to resign under Section 1.6(d)) shall automatically terminate upon the
occurrence of a Prentice Termination Event.
 
SECTION 5.5  Amendments.  This Agreement may not be amended or modified except
by an instrument in writing signed by, or on behalf of, the parties against whom
such amendment or modification is sought to be enforced.
 
SECTION 5.6  Descriptive Headings.  The descriptive headings of this Agreement
are inserted for convenience of reference only and do not constitute a part of
and shall not be utilized in interpreting this Agreement.
 
SECTION 5.7  Notices and Addresses.  Any notice, demand, request, waiver, or
other communication under this Agreement shall be in writing and shall be deemed
to have been duly given on the date of service, if personally served or sent by
facsimile; on the business day after notice is delivered to a courier or mailed
by express mail, if sent by courier delivery service or express mail for next
day delivery; and on the fifth business day after mailing, if mailed to the
party
 

 
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to whom notice is to be given, by first class mail, registered, return receipt
requested, postage prepaid and addressed as follows:
 
To the Company:
Bluefly, Inc.
 
42 West 39th Street, 9th Floor
 
New York, New York 10018
 
Facsimile:  (212) 354-3400
 
Attention:  Chief Financial Officer
     
With a copy (which shall not constitute notice) to:
     
Dechert LLP
 
1095 Avenue of the Americas
 
New York, New York 10036
 
Facsimile:  (212) 698-3599
 
Attention:  Richard A. Goldberg, Esq.
   
To the Soros Parties:
Quantum Industrial Partners LDC
 
SFM Domestic Investments LLC
 
c/o Soros Fund Management LLC
 
888 Seventh Avenue
 
New York, New York 10106
 
Facsimile:  (646) 731-5584
 
Attention:   Jay Schoenfarber
   
To the Maverick Parties:
Maverick Fund USA, Ltd.
 
Maverick Fund, L.D.C.
 
Maverick Fund II, Ltd.
 
c/o Maverick Capital, Ltd.
 
300 Crescent Court, 18th Floor
 
Dallas, Texas 75201
 
Facsimile:  (214) 880-4042
 
Attention:  General Counsel
     
With a copy (which shall not constitute notice) to:
     
Shearman & Sterling, LLP
 
599 Lexington Avenue
 
New York, New York 10022
 
Facsimile.:  (646) 848-8902
 
Attention:  Stephen M. Besen
   
To the Prentice Parties
 
(other than SAC):
Prentice Capital Management, L.P.
 
623 Fifth Avenue, 32nd Floor

 
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New York, New York 10022
 
Attention: Michael Zimmerman
 
Facsimile: (212) 756-1480
     
With a copy (which shall not constitute notice) to:
     
Lowenstein Sandler PC
 
1251 Avenue of the Americas
 
New York, NY 10020
 
Attention: Matthew B. Hoffman
 
Facsimile: (973) 422-6807
   
To SAC:
S.A.C. Capital Associates, LLC
 
c/o S.A.C. Capital Advisors, LLC
 
72 Cummings Point Road
 
Stamford, CT 06902
 
Attention: Peter A. Nussbaum
     
With a copy (which shall not constitute notice) to:
     
Prentice Capital Management, L.P.
 
623 Fifth Avenue, 32nd Floor
 
New York, New York 10022
 
Attention: Michael Zimmerman
 
Facsimile: (212) 756-1480
   
To Rho:
Rho Ventures VI, L.P.
 
Carnegie Hall Tower
 
152 West 57th Street, 23rd Floor
 
New York, New York 10019
 
Telephone No.:  (212) 751-6677
 
Facsimile No.:  (212.751.3613
 
Attention:  Jeffrey I. Martin, Esq.
     
With a copy to (which shall not constitute notice) to:
     
Goodwin Procter LLP
 
The New York Times Building
 
620 Eighth Avenue
 
New York, New York
 
Telephone No.:  (212) 813-8800
 
Facsimile No.:  (212) 355-3333
 
Attention:  Stephen M. Davis, Esq.

 
SECTION 5.8  Severability.  In the event that any provision of this Agreement
becomes or is declared by a court of competent jurisdiction to be illegal, void
or unenforceable, the remainder of this Agreement will continue in full force
and effect and the application of such
 

 
13

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provision to other persons or circumstances will be interpreted so as reasonably
to effect the intent of the parties hereto.  The parties further agree to
replace such void or unenforceable provision of this Agreement with a valid and
enforceable provision that will achieve, to the extent possible, the economic,
business and other purposes of such void or unenforceable provision.
 
SECTION 5.9  Governing Law; Choice of Forum; Jury Waiver.  THIS AGREEMENT SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK WITHOUT GIVING EFFECT TO THE PRINCIPLES OF CONFLICTS LAW, PROVIDED THAT THE
PROVISIONS SET FORTH HEREIN AND ANY CLAIMS OR DISPUTES ARISING OUT OF OR RELATED
TO SUCH PROVISIONS OR THE SUBJECT MATTER THEREOF THAT ARE REQUIRED TO BE
GOVERNED BY THE DELAWARE GENERAL CORPORATION LAW SHALL BE GOVERNED BY THE
DELAWARE GENERAL CORPORATION LAW  The parties hereto agree that any suit, action
or proceeding seeking to enforce any provision of, or based on any matter
arising out of or in connection with, this Agreement or the transactions
contemplated hereby may only be brought in the United States District Court for
the Southern District of New York or any New York State court sitting in the
Borough of Manhattan in New York City, and each of the parties hereby consents
to the jurisdiction of such courts (and of the appropriate appellate courts
therefrom) in any such suit, action or proceeding and irrevocably waives, to the
fullest extent permitted by Law (as defined in the Investment Agreement), any
objection which it may now or hereafter have to the laying of the venue of any
such suit, action or proceeding in any such court or that any such suit, action
or proceeding which is brought in any such court has been brought in an
inconvenient forum.  Process in any such suit, action or proceeding may be
served on any party anywhere in the world, whether within or without the
jurisdiction of any such court.
 
SECTION 5.10  Counterparts; Facsimile Signatures.  This Agreement may be
executed in one or more counterparts, all of which shall be considered one and
the same agreement and shall become effective when one or more counterparts have
been signed by each of the parties and delivered to the other party, it being
understood that all parties need not sign the same counterpart.  This Agreement
may be executed by facsimile, and a facsimile signature shall have the same
force and effect as an original signature on this Agreement. EACH OF THE PARTIES
HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
 
SECTION 5.11  Independent Nature of Stockholders’ Obligations and Rights.  The
obligations of each Stockholder this Agreement are several and not joint with
the obligations of any other Stockholder, and no Stockholder shall be
responsible in any way for the performance of the obligations of any other
Stockholder under this Agreement.  Nothing contained herein or in any
Transaction Document, and no action taken by any party hereto pursuant thereto,
shall be deemed to constitute any Stockholder as a partnership, an association,
a joint venture or any other kind of entity with any other Stockholder, or
create a presumption that the Stockholders are in any way acting in concert or
as a group with respect to such obligations or the transactions contemplated by
the Transaction Documents.  Each Stockholder shall be entitled to independently
protect and enforce its rights, including without limitation the rights arising
out of this Agreement or out of the other Transaction Documents, and it shall
not be necessary for any other Stockholder to be joined

 
14

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as an additional party in any proceeding for such purpose.  Each Stockholder has
been represented by its own separate legal counsel in their review and
negotiation of the Transaction Documents.
 
SECTION 5.12  Specific Performance.  Each of the parties hereto, in addition to
being entitled to exercise all of its rights hereunder, including recovery of
damages, shall be entitled to specific performance of its rights under this
Agreement.  Each party agrees that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach by it of the provisions
of this Agreement and hereby agrees to waive the defense in any action for
specific performance that a remedy at law would be adequate.
 
SECTION 5.13  No Violations. Each of the parties hereto agree that no party
hereto shall be obligated to comply with any provisions of this Agreement
relating to the voting of shares of capital stock of the Company if doing so
would constitute a violation of law or public policy.
 
[Signature pages follow]

 
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IN WITNESS WHEREOF, this Amended and Restated Voting Agreement has been duly
executed on the date first set forth above.

 
BLUEFLY, INC.
 
By:          /s/ Kara B. Jenny                           
Name:   Kara B. Jenny
Title:     Chief Financial Officer
 
QUANTUM INDUSTRIAL PARTNERS LDC
 
By:           /s/ Jay A. Schoenfarber                       
Name:   Jay A. Schoenfarber
Title:     Attorney-in-fact

 
SFM DOMESTIC INVESTMENTS LLC
 
By:           /s/ Jay A. Schoenfarber                     
Name:   Jay A. Schoenfarber
Title:     Attorney-in-fact

 
 

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MAVERICK FUND USA, LTD
 
 
By: MAVERICK CAPITAL, LTD.,
as its Investment Manager
 
By:           /s/ John T. McCafferty                   
 
Name:   John T. McCafferty
Title:     Limited Partner and General Counsel
 
MAVERICK FUND L.D.C.
 
 
By: MAVERICK CAPITAL, LTD.,
as its Investment Manager
 
By:          /s/ John T. McCafferty                       
 
Name:   John T. McCafferty
Title:     Limited Partner and General Counsel

 
 
MAVERICK FUND II, LTD
 
By: MAVERICK CAPITAL, LTD.,
as its Investment Manager
 
By:           /s/ John T. McCafferty                           
Name:   John T. McCafferty
Title:     Limited Partner and General Counsel
 
 
 

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PRENTICE CAPITAL PARTNERS, LP
 
By:  Prentice Capital GP, LLC
 
By:     /s/ Matthew Hoffman                   
Name:  Matthew Hoffman
Title:   
 
PRENTICE CAPITAL PARTNERS QP, LP
 
By:  Prentice Capital GP, LLC
 
By:      /s/ Matthew Hoffman                    
Name: Matthew Hoffman
Title:   
 
PRENTICE CAPITAL OFFSHORE, LTD.
 
By:  Prentice Capital Management, LP, its investment manager
 
By:      /s/ Matthew Hoffman                     
Name: Matthew Hoffman
Title:   
 
GPC XLIII, LLC
 
By:  Prentice Capital Management, LP, its advisor
 
By:      /s/ Matthew Hoffman                        
Name: Matthew Hoffman
Title:   
 

 
 

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PEC I, LLC
 
By:  Prentice Capital Management, LP, its manager
 
By:      /s/ Matthew Hoffman                               
Name: Matthew Hoffman
Title:   
 
S.A.C. CAPITAL ASSOCIATES, LLC
 
By:  S.A.C. Capital Advisors, LLC
 
By:      /s/ Peter A. Nussbaum                                
Name:       Peter A. Nussbaum
Title:         General Counsel
 
RHO VENTURES VI, L.P.
 
By:      /s/ Jeffrey Martin                                         
Name:        Jeffrey Martin
Title:         Attorney-in-fact

 
 

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