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                            CERTIFICATE OF AMENDMENT
                                       OF
                        THE CERTIFICATE OF INCORPORATION
                                       OF
                                  BLUEFLY, INC.

   Under Section 805 of the Business Corporation Law of the State of New York

                                 --------------

         FIRST: The name of the corporation is Bluefly, Inc. (the
"Corporation"). The name under which the corporation was formed is Pivot
Corporation.

         SECOND: The Certificate of Incorporation of the Corporation was filed
by the Secretary of State of New York on the 12th day of April, 1991. A Restated
Certificate of Incorporation of the Corporation was filed by the Secretary of
State of the State of New York on the 15th day of May, 1997.

         THIRD: The amendment of the Certificate of Incorporation effected by
this certificate of amendment is as follows:

         To add a provision stating the designation, number and relative rights,
preferences, privileges and restrictions of shares of Series A of preferred
stock of the Corporation as fixed by the Board of Directors of the Corporation
pursuant to the authorization contained in the Certificate of Incorporation.

         FOURTH:To accomplish the foregoing amendment, the following new
Article, relating to the designation, number and relative rights, privileges and
restrictions of the Series A Convertible Preferred Stock is inserted in the
Certificate of Incorporation:

A.       Pursuant to authority conferred upon the Board of Directors by the
Certificate of Incorporation of the Corporation, as amended (the "Certificate of
Incorporation"), said Board of Directors, at a meeting held on July 21, 1999,
adopted resolutions providing for the designation, preferences and relative,
participating, optional and other special rights, and the qualifications,
limitations and restrictions of the Corporation's Series A Convertible Preferred
Stock, which resolutions are as follows:

         WHEREAS, the Certificate of Incorporation of this Corporation provides
for two classes of shares known as Common Stock, par value $.01 per share, and
Preferred Stock, par value $.01 per share; and

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         WHEREAS, the Board of Directors of this Corporation is authorized by
the Certificate of Incorporation to provide for the issuance of the shares of
Preferred Stock in series, and by filing a certificate pursuant to the
applicable law of the State of New York, to establish from time to time the
number of shares to be included in each such series, and to fix the designation,
preferences and rights of the shares of each such series and the qualifications,
limitations and restrictions thereof.

         NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors deems it
advisable to, and hereby does, designate a Series A Convertible Preferred Stock
and fixes and determines the preferences, rights, qualifications, limitations
and restrictions relating to the Series A Convertible Preferred Stock as
follows:

1.       Designation/Ranking. The shares of such series of Preferred Stock shall
be designated as "Series A Convertible Preferred Stock" (referred to herein as
the "Series A Convertible Preferred Stock"). The Series A Convertible Preferred
Stock shall rank senior to the Corporation's Common Stock and all other
Preferred Stock of the Corporation, with respect to the payment of distributions
on liquidation, dissolution or winding up of the Corporation and with respect to
the payment of dividends.

1.       Authorized Number.  The number of shares constituting the Series A
Convertible Preferred Stock shall be 500,000 shares.

a)       Dividends. The holders of Series A Convertible Preferred Stock shall be
entitled to receive, out of funds legally available for such purpose, dividends
which shall accrue at the rate of 8% per annum and shall compound annually,
payable only upon: (i) the conversion of the Series A Convertible Preferred
Stock pursuant to Section 6; (ii) a redemption of the Series A Convertible
Preferred Stock under Section 7; or (iii) a merger, consolidation or sale of
substantially all of the Corporation's assets in which the per share
consideration received by the Corporation or its shareholders is less than three
times the applicable Conversion Price (as defined herein) (each of such items
listed in this clause (iii), a "Liquidation"). The Corporation, in its sole
discretion, may elect to pay such dividends in shares of Common Stock, in which
case such Common Stock dividends shall be equal to the number of shares of
Common Stock obtained by dividing the cash value of such dividend by the Current
Market Price (as defined in Section 6(e)(vi)) prior to such Liquidation.

a)       Dividends on each share of Series A Convertible Preferred Stock shall
be cumulative and shall
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accrue from the date of issuance of such share of Series A Convertible Preferred
Stock. The date on which the Corporation initially issues any share of Series A
Convertible Preferred Stock shall be deemed to be its "Issue Date," regardless
of the number of times transfer of such shares is made on the stock records
maintained by or for the Corporation and regardless of the number of
certificates that may be issued to evidence such share.

a)       In addition to the right to receive dividends pursuant to Section 3(a)
above, each holder of a share of Series A Convertible Preferred Stock shall have
the right, at any time after the Issue Date, if the Board of Directors of the
Corporation shall declare a dividend or make any other distribution (including,
without limitation, in cash or other property or assets, but excluding any stock
split effected as a stock dividend), to holders of shares of Common Stock, to
receive, out of funds legally available therefor, a dividend or distribution in
an amount equal to the amount of such dividend or distribution receivable by a
holder of the number of shares of Common Stock into which such share of Series A
Convertible Preferred Stock is convertible on the record date for such dividend
or distribution. Any such amount shall be paid to the holders of shares of
Series A Convertible Preferred Stock at the same time such dividend or
distribution is made to the holders of Common Stock.

1.       Liquidation.

a)       Upon any Liquidation, dissolution or winding up of the Corporation,
whether voluntary or involuntary, the holders of the shares of Series A
Convertible Preferred Stock shall be paid, before any distribution or payment is
made upon any stock ranking junior to the Series A Convertible Preferred Stock,
an amount equal to the greater of (i) $20 per share plus, in the case of each
share, an amount equal to any dividends declared but unpaid thereon, through the
date payment thereof is made available ("Redemption Payment"), and (ii) the
amount that the holders of the Series A Convertible Preferred Stock would
receive if they were to convert each share of Series A Convertible Preferred
Stock into shares of Common Stock immediately prior to such Liquidation,
dissolution or winding up. The holders of Series A Convertible Preferred Stock
shall not be entitled to any further payment (such amount payable with respect
to one share of Series A Convertible Preferred Stock being sometimes referred to
as the "Liquidation Payment" and with respect to all shares of Series A
Convertible Preferred Stock being sometimes referred to as the "Liquidation
Payments").
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a)       If upon such Liquidation, dissolution or winding up of the Corporation,
whether voluntary or involuntary, the assets to be distributed among the holders
of Series A Convertible Preferred Stock shall be insufficient to permit payment
to the holders of Series A Convertible Preferred Stock of the Liquidation
Payments, then the entire assets of the Corporation to be so distributed shall
be distributed ratably among the holders of Series A Convertible Preferred
Stock. Upon any such Liquidation, dissolution or winding up of the Corporation,
after the holders of Series A Convertible Preferred Stock shall have been paid
in full the Liquidation Payments to which they shall be entitled, the Series A
Convertible Preferred Stock shall be automatically canceled and the remaining
net assets of the Corporation may be distributed to the holders of securities
ranking junior to the Series A Convertible Preferred Stock on Liquidation.

a)       Written notice of such Liquidation, dissolution or winding up, stating
a payment date, the amount of the Liquidation Payments and the place where said
Liquidation Payments shall be payable, shall be delivered in person, mailed by
certified or registered mail, return receipt requested, or sent by telecopier or
telex, not less than 10 days prior to the payment date stated therein, to the
holders of record of Series A Convertible Preferred Stock, such notice to be
addressed to each such holder at its address as shown by the records of the
Corporation.

a)       The Series A Convertible Preferred Stock shall, with respect to
distribution of assets and rights upon the Liquidation, dissolution or winding
up of the Corporation, rank senior to each class or series of capital stock of
the Corporation hereafter created which does not expressly provide that it ranks
on a parity with or is senior to the Series A Convertible Preferred Stock with
respect to distribution of assets and rights upon the Liquidation, dissolution
or winding up of the Corporation.

1.       Voting Rights.

a)       In addition to any other vote required by law or the Corporation's
Certificate of Incorporation, the Corporation may take the following actions
only with the approval of a majority of the directors, which must include the
Class A Director (as defined herein) to the extent that the holders of the
Series A Convertible Preferred Stock are entitled to appoint a Class A Director
under the terms hereof, (i) at any time when the Purchasers (as defined in the
Investment Agreement (the "Agreement"), dated as of July 27, 1999, by and among
the Corporation, and the Purchasers set forth therein) retain through beneficial
ownership at least 50% of the shares of the Series A Convertible Preferred Stock
purchased
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under the Agreement, on an as-converted basis: a liquidation; a repurchase or
redemption of equity securities or debt in excess of $10,000 (except to the
extent such debt is due in accordance with its terms); the authorization or
issuance of any equity securities senior to or pari passu with the Series A
Convertible Preferred Stock; the authorization or issuance of any additional
shares of Series A Convertible Preferred Stock; and any amendment to any
Transaction Document (as defined in the Agreement) or (ii) at any time when the
Purchasers retain through beneficial ownership shares of capital stock
representing, on an as-converted basis, at least 7.5% of the outstanding shares
of Common Stock on a fully diluted basis (after giving effect to all outstanding
options and warrants and other convertible securities), an acquisition by the
Corporation of another business entity for consideration in excess of an amount
equal to 30% of the market capitalization of the Corporation; the incurrence of
indebtedness in any year, in the aggregate, in excess of an amount equal to 30%
of the market capitalization of the Corporation; liens on, or encumbrances of,
assets with a fair market value in excess of an amount equal to 10% of the
market capitalization of the Corporation; and any transaction with an Affiliate
(as defined in the Agreement) other than a transaction approved by the
Compensation Committee of the Corporation. For purposes of the preceding
sentence, market capitalization shall be determined by multiplying the total
shares of publicly traded capital stock by the Current Market Price.

a)       Holders of Series A Convertible Preferred Stock shall be entitled to
notice of any shareholders' meeting. Except as otherwise required by law, at any
annual or special meeting of the Corporation's stockholders, or in connection
with any written consent in lieu of any such meeting, each outstanding share of
Series A Convertible Preferred Stock shall be entitled to the number of votes
equal to the number of full shares of Common Stock into which such share of
Series A Convertible Preferred Stock is then convertible (calculated by rounding
any fractional share up to the nearest whole number) on the date for
determination of stockholders entitled to vote at the meeting. Except as set
forth herein or otherwise required by law, the Series A Convertible Preferred
Stock and the Common Stock shall vote together as a single class on each matter
submitted to the stockholders, and not by separate class or series.

a)       For so long as the Purchasers maintain through beneficial ownership at
least 50% of the shares of the Series A Convertible Preferred Stock, the holders
of the Series A Convertible Preferred Stock, voting separately as a class, shall
be entitled to elect one (1) director to the Board of Directors (the "Class A
Director") upon a vote of a majority of the outstanding Series A
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Convertible Preferred Stock. A vacancy in any directorship elected by the
holders of the Series A Convertible Preferred Stock shall be filled only by vote
or written consent in lieu of a meeting of the holders of the Series A
Convertible Preferred Stock. Except as otherwise required by applicable law, any
member of the Board of Directors elected by the holders of the Series A
Convertible Preferred Stock may only be removed by the vote of the holders of
not less than a majority of the Series A Convertible Preferred Stock voting
thereon.

a)       Notwithstanding anything set forth herein, with the exception of any
action duly approved by the Class A Director pursuant to Section 5(a) above, at
any time when any shares of Series A Convertible Preferred Stock are
outstanding, except where the vote or written consent of the holders of a
greater number of shares of the Corporation is required by law or by the
Corporation's Certificate of Incorporation, and in addition to any other vote
required by law or the Corporation's Certificate of Incorporation, without the
approval of the holders of at least two-thirds (66 2/3%) of the then outstanding
shares of Series A Convertible Preferred Stock, given in writing or by vote at a
meeting, consenting or voting (as the case may be) separately as a series, the
Corporation will not effect any transaction or other action that would adversely
affect the rights, preferences, powers (including, without limitation, voting
powers) and privileges of the Series A Convertible Preferred Stock.

1.       Conversions.  The holders of shares of Series A Convertible Preferred
Stock shall have the following conversion rights:

a)       Right to Convert. Subject to the terms and conditions of this paragraph
6, the holder of any share or shares of Series A Convertible Preferred Stock
shall have the right, at its option at any time, to convert any such shares (or
fractions thereof) of Series A Convertible Preferred Stock (except that upon any
Liquidation, dissolution or winding up of the Corporation the right of
conversion shall terminate at the close of business on the business day
immediately preceding the date fixed for payment of the amount distributable on
the Series A Convertible Preferred Stock) into such number of fully paid and
nonassessable shares of Common Stock as is obtained by (i) multiplying the
number of shares of Series A Convertible Preferred Stock to be so converted by
$20 and (ii) dividing the result by the conversion price of $10.50 per share or,
in case an adjustment of such price has taken place pursuant to the further
provisions of this paragraph 6, then by the conversion price as last adjusted
and in effect at the date any share or shares of Series A Convertible Preferred
Stock are surrendered for conversion
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(such price, or such price as last adjusted, being referred to as the
"Conversion Price"). Such rights of conversion shall be exercised by the holder
thereof by giving written notice that the holder elects to convert a stated
number of shares of Series A Convertible Preferred Stock into Common Stock and
by surrender of a certificate or certificates for the shares to be so converted
to the Corporation at its principal office (or such other office or agency of
the Corporation as the Corporation may designate by notice in writing to the
holders of the Series A Convertible Preferred Stock) at any time during its
usual business hours on the date set forth in such notice, together with a
statement of the name or names (with address) in which the certificate or
certificates for shares of Common Stock shall be issued.

a)       Automatic Conversion. Upon the earlier of: (i) the date on which the
last sale price of the Common Stock on NASDAQ or, if not quoted on NASDAQ, on
any other national securities exchange has been at least 3 times the Conversion
Price for 30 consecutive trading days, and (ii) immediately prior to the closing
of a merger, sale of all or substantially all of the Corporation's assets, or
any combination thereof in which the Corporation or its shareholders are to
receive cash or marketable securities with an aggregate value of at least 3
times the Conversion Price, each outstanding share of Series A Convertible
Preferred Stock shall automatically, with no further action required to be taken
by the Corporation or the holder thereof, be converted into such number of fully
paid and nonassessable shares of Common Stock as is obtained by dividing $20 by
the Conversion Price then in effect. If on any such date the shares of Common
Stock are not listed or admitted for trading on any national securities exchange
or quoted by NASDAQ or a similar service, the Current Market Price for the
Common Stock shall be the fair market value of the Common Stock on such date as
determined in good faith by the Board of Directors of the Corporation.
Immediately thereafter, each holder of Series A Convertible Preferred Stock
shall be deemed to be the holder of record of the Common Stock issuable upon
conversion of such holder's Series A Convertible Preferred Stock notwithstanding
that the share register of the Corporation shall then be closed or that
certificates representing such Common Stock shall not then be actually delivered
to such person. Upon notice from the Corporation, each holder of Series A
Convertible Preferred Stock so converted shall promptly surrender to the
Corporation, at any place where the Corporation shall maintain a transfer agent
for its Series A Convertible Preferred Stock and Common Stock, certificates
representing the shares so converted, duly endorsed in blank or accompanied by
proper instruments of transfer. On the date of such automatic conversion, all
rights with respect to the shares of Series A Convertible Preferred Stock so
converted, including the rights, if any, to receive notices and to
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vote, will terminate, except only the rights of holders thereof to (i) receive
certificates for the number of shares of Common Stock into which such shares of
Series A Convertible Preferred Stock have been converted, (ii) the payment of
any accrued but unpaid dividends thereon as provided herein and (iii) exercise
the rights to which they are entitled as holders of Common Stock.

a)       Issuance of Certificates; Time Conversion Effected. Promptly after the
surrender of the certificate or certificates for the shares of Series A
Convertible Preferred Stock to be converted as set forth above, the Corporation
shall issue and deliver, or cause to be issued and delivered, to the holders,
registered in such name or names as such holders may direct, a certificate or
certificates for the number of whole shares of Common Stock issuable upon the
conversion of such shares of Series A Convertible Preferred Stock.

a)       Fractional Shares; Partial Conversion. No fractional shares of Common
Stock shall be issued upon conversion of Series A Convertible Preferred Stock
into Common Stock and no payment or adjustment shall be made upon any conversion
on account of any cash dividends on the Common Stock issued upon such
conversion. If any fractional share of Common Stock would, except for the
provisions of the first sentence of this Subparagraph 6(d), be delivered upon
such conversion, the Corporation, in lieu of delivering such fractional share,
shall pay to the holder surrendering the Series A Convertible Preferred Stock
for conversion an amount in cash equal to the current market price of such
fractional share as determined in good faith by the Board of Directors of the
Corporation.


a)       Antidilution Adjustments. The applicable Conversion Price in respect of
the Series A Convertible Preferred Stock shall be subject to adjustment as
follows if any of the events listed below occur prior to the conversion of the
Series A Convertible Preferred Stock into Common Stock.

(1)      In case the Corporation shall (x) pay a dividend or make a distribution
on its Common Stock in shares of its Common Stock, (y) subdivide or reclassify
its outstanding Common Stock into a greater number of shares, or (z) combine or
reclassify its outstanding Common Stock into a smaller number of shares, the
applicable Conversion Price in effect immediately prior to such event shall be
adjusted so that the holder of any share of the Series A Convertible Preferred
Stock thereafter surrendered for conversion shall be entitled to receive the
number of shares of Common Stock which it would have owned or have been entitled
to receive after the happening of such event had the share of such

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Series A Convertible Preferred Stock been converted immediately prior to the
happening of such event. An adjustment made pursuant to this paragraph shall
become effective immediately after the record date in the case of a dividend or
distribution and shall become effective on the effective date in the case of
subdivision, combination or reclassification. If any dividend or distribution is
not paid or made, the applicable Conversion Price then in effect shall be
appropriately readjusted.

(1)      In case the Corporation shall (x) sell or issue shares of its Common
Stock, (y) issue rights, options or warrants to subscribe for or purchase shares
of Common Stock or (z) issue or sell other rights for the purchase of shares of
Common Stock or securities convertible into or exchangeable into shares of
Common Stock, in the case of one or more of the events described in the
immediately preceding clauses (x), (y) and (z) (excluding those issuances
referred to in Subparagraph 6(e)(iii) below) (collectively, the "Securities"),
at a price per share less than the Conversion Price on the date the Corporation
fixes the offering price of such Securities, then in each such case the
applicable Conversion Price in effect immediately prior to the issuance of such
Securities shall be adjusted so that it shall equal the price determined by
multiplying the applicable Conversion Price in effect immediately prior to the
date of issuance of the Securities by a fraction the numerator of which shall be
the number of shares of Common Stock outstanding immediately prior to the
issuance of the Securities plus the number of shares of Common Stock which the
aggregate consideration received for the issuance of the Securities would
purchase at the Conversion Price (as defined below), and the denominator of
which shall be the number of shares of Common Stock outstanding immediately
after the issuance of the Securities (after giving effect to the full exercise,
conversion or exchange, as applicable, of such Securities). The adjustment
provided for in this Subparagraph 6(e)(ii) shall be made successively whenever
any Securities are issued (provided, however, that no further adjustments in the
applicable Conversion Price shall be made upon the subsequent exercise,
conversion or exchange, as applicable of such Securities pursuant to the
original terms of such Securities) and shall become effective immediately after
such issuance. In determining whether any Securities entitle the holders of the
Common Stock to subscribe for or purchase shares of Common Stock at less than
the Current Market Price or the applicable Conversion Price, and in determining
the aggregate offering price of the shares of Common Stock so offered, there
shall be taken into account any consideration received by the Corporation for
such Securities, any consideration required to be paid upon the exercise,
conversion or exchange, as applicable, of such Securities and the value of all
such consideration (if other than cash) shall be determined by
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the Board of Directors (whose determination, if made in good faith, shall be
conclusive). If any or all of such Securities are not so issued or expire or
terminate without having been exercised, converted or exchanged, the applicable
Conversion Price then in effect shall be appropriately readjusted to the
Conversion Price which would then be in effect had the adjustments made upon the
issuance of such Securities been made upon the basis of only the number of
shares of Common Stock delivered pursuant to Securities actually exercised,
converted or exchanged. For purposes of this Subparagraph 6(e)(ii), the number
of shares of Common Stock at any time outstanding shall not include shares held
in the treasury of the Corporation or by any subsidiary of the Corporation.

(1)      In case the Corporation shall pay, issue or distribute to its holders
of capital stock any shares of capital stock of the Corporation or evidences of
indebtedness or cash or other assets (excluding (w) regular cash dividends
payable out of earnings in the ordinary course and distributed ratably to the
holders of Series A Convertible Preferred Stock, (x) distributions paid from
retained earnings of the Corporation and distributed ratably to the holders of
Series A Convertible Preferred Stock, (y) dividends or distributions referred to
in Subparagraph 6(e)(i) above and (z) dividends or distributions paid or made to
holders of shares of Series A Convertible Preferred Stock in the manner provided
in Section 3 above) or rights, options or warrants to subscribe for or purchase
any of its securities then, in each such case, the applicable Conversion Price
shall be adjusted so that it shall equal the price determined by multiplying the
applicable Conversion Price in effect immediately prior to the date of the
distribution by a fraction the numerator of which shall be the applicable
Conversion Price less the then fair market value (as determined by the Board of
Directors, whose determination, if made in good faith, shall be conclusive) of
the portion of the capital stock, cash or assets or evidences of indebtedness so
distributed, or of the subscription rights, options or warrants so distributed
or of such convertible or exchangeable securities, with respect to one share of
Common Stock, and the denominator of which shall be the applicable Conversion
Price in effect immediately prior to the date of the distribution. Such
adjustment shall be made whenever any such distribution is made, and shall
become effective retroactive to the record date for the determination of
stockholders entitled to receive such distribution. If any such distribution is
not made or if any or all of such rights, options or warrants expire or
terminate without having been exercised, the applicable Conversion Price then in
effect shall be appropriately readjusted.

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(1)      Notwithstanding the foregoing, the provisions of this paragraph shall
not apply to the issuance of: (x) any equity securities issued pursuant to the
Corporation's employee option or stock incentive plan, or (y) any equity
securities issued as consideration for services provided to the Corporation (in
an aggregate amount not to exceed 75,000 shares of Common Stock in any fiscal
year).

(1)      Whenever the applicable Conversion Price is adjusted as herein
provided, the Corporation shall promptly file with the conversion agent (or, if
there is no conversion agent, the secretary of the Corporation) an officer's
certificate setting forth such Conversion Price after the adjustment and setting
forth a brief statement of the facts requiring the adjustment, which certificate
shall be conclusive evidence of the correctness of the adjustment. Promptly
after delivery of the certificate, the Corporation shall prepare a notice of the
adjustment of such Conversion Price setting forth such Conversion Price and the
date on which the adjustment becomes effective and shall mail the notice of such
adjustment of the applicable Conversion Price (together with a copy of the
officer's certificate setting forth the facts requiring such adjustment) to the
holder of each share of the Series A Convertible Preferred Stock at such
holder's last address as shown on the stock books of the Corporation.

(1)      For the purpose of any computation under any provision relating to the
Series A Convertible Preferred Stock, the "Current Market Price" per share of
Common Stock on any date shall be deemed to be the average of the daily closing
prices per share of Common Stock for the 30 consecutive trading days immediately
preceding such date. If on any such date the shares of Common Stock are not
listed or admitted for trading on any national securities exchange or quoted by
NASDAQ or a similar service, the Current Market Price for the Common Stock shall
be the fair market value of the Common Stock on such date as determined in good
faith by the Board of Directors of the Corporation.

a)       Reorganization, Recapitalization or Reclassification. If any capital
reorganization, recapitalization or reclassification of the capital stock of the
Corporation (other than a merger or consolidation of the Corporation in which
the Corporation is the surviving corporation and which does not result in a
reclassification or change of outstanding shares of Common Stock or a merger or
consolidation which is deemed to be a Liquidation, dissolution or winding up of
the Corporation as provided herein) shall be effected in such a way that holders
of Common Stock shall be entitled to receive stock, securities or assets (other
than cash dividends payable out of earnings or surplus in the ordinary course of
business) with respect
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to or in exchange for Common Stock, then, as a condition of such reorganization,
recapitalization or reclassification, lawful and adequate provisions shall be
made whereby each holder of a share or shares of Series A Convertible Preferred
Stock shall thereupon have the right to receive, upon the basis and upon the
terms and conditions specified herein and in lieu of the shares of Common Stock
immediately theretofore receivable upon the conversion of such share or shares
of Series A Convertible Preferred Stock, such shares of stock, securities or
assets as may be issued or payable with respect to or in exchange for a number
of outstanding shares of such Common Stock equal to the number of shares of such
Common Stock immediately theretofore receivable upon such conversion had such
reorganization or reclassification not taken place, and in any such case
appropriate provisions shall be made with respect to the rights and interests of
such holder to the end that the provisions hereof (including without limitation
provisions for adjustments of the Conversion Price) shall thereafter be
applicable, as nearly as may be, in relation to any shares of stock, securities
or assets thereafter deliverable upon the exercise of such conversion rights.

a)       Other Notice.  In case at any time:

            (i) the Corporation shall declare any dividend upon its Common Stock
payable in cash or stock or make any other distribution to the holders of its
Common Stock;

            (ii) the Corporation shall offer for subscription pro rata to the
holders of its Common Stock any additional shares of stock of any class or other
rights;

            (iii) there shall be any capital reorganization or reclassification
of the capital stock of the Corporation, or a consolidation or merger of the
Corporation with or into another entity or entities, or a sale, lease,
abandonment, transfer or other disposition of all or substantially all its
assets; or

            (iv) there shall be a voluntary or involuntary dissolution,
Liquidation or winding up of the Corporation;

         then, in any one or more of said cases, the Corporation shall give, by
delivery in person, certified or registered mail, return receipt requested,
telecopier or telex, addressed to each holder of any shares of Series A
Convertible Preferred Stock at the address of such holder as shown on the books
of the Corporation, (i) at least 10 days' prior written notice of the date on
which the books of the Corporation shall close or a record shall be taken for
such dividend, distribution or subscription rights or for
<PAGE>

determining rights to vote in respect of any such reorganization,
reclassification, consolidation, merger, disposition, dissolution, Liquidation
or winding up and (ii) in the case of any such reorganization, reclassification,
consolidation, merger, disposition, dissolution, Liquidation or winding up, at
least 10 days' prior written notice of the date when the same shall take place.
Such notice in accordance with the foregoing clause (i) shall also specify, in
the case of any such dividend, distribution or subscription rights, the date on
which the holders of Common Stock shall be entitled thereto and such notice in
accordance with the foregoing clause (ii) shall also specify the date on which
the holders of Common Stock shall be entitled to exchange their Common Stock for
securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, disposition, dissolution, Liquidation
or winding up, as the case may be.

a)       Stock to be Reserved. The Corporation will at all times reserve and
keep available out of its authorized shares of Common Stock, solely for the
purpose of issuance upon the conversion of Series A Convertible Preferred Stock
as herein provided, such number of shares of Common Stock as shall then be
issuable upon the conversion of all outstanding shares of Series A Convertible
Preferred Stock. The Corporation covenants that all shares of Common Stock which
shall be so issued shall be duly authorized, validly issued, fully paid and
nonassessable by the Corporation and free from all taxes, liens and charges with
respect to the issue thereof, and, without limiting the generality of the
foregoing, the Corporation covenants that it will from time to time take all
such action as may be requisite to assure that the par value per share of the
Common Stock is at all times equal to or less than the Conversion Price in
effect at the time. The Corporation will take all such action as may be
necessary to assure that all such shares of Common Stock may be so issued
without violation of any applicable law or regulation, or of any requirement of
any national securities exchange or quotation system upon which the Common Stock
may be listed. The Corporation will not take any action which results in any
adjustment of the Conversion Price if the total number of shares of Common Stock
issued and issuable after such action upon conversion of the Series A
Convertible Preferred Stock would exceed the total number of shares of Common
Stock then authorized by the Corporation's Certificate of Incorporation.

a)       Reissuance of Preferred Stock. Shares of Series A Convertible Preferred
Stock that have been issued and reacquired in any manner, including shares
purchased or redeemed or exchanged or converted, shall (upon compliance with any
applicable provisions of the Business Corporation Law of the State of New York)
have the status of authorized
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but unissued shares of preferred stock of the Company undesignated as to series
and may be designated or redesignated and issued or reissued, as the case may
be, as part of any series of preferred stock of the Company other than Series A
Convertible Preferred Stock.

a)       Issue Tax. The issuance of certificates for shares of Common Stock upon
conversion of Series A Convertible Preferred Stock shall be made without charge
to the holders thereof for any issuance tax in respect thereof, provided that
the Corporation shall not be required to pay any tax which 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 holder of the Series A Convertible Preferred
Stock which is being converted.

a)       Closing of Books. The Corporation will at no time close its transfer
books against the transfer of any Series A Convertible Preferred Stock or of any
shares of Common Stock issued or issuable upon the conversion of any shares of
Series A Convertible Preferred Stock in any manner which interferes with the
timely conversion of such Series A Convertible Preferred Stock, except as may
otherwise be required to comply with applicable securities laws.

a)       Minimum Adjustment. No reduction of the Conversion Price shall be made
if the amount of any such reduction would be an amount less than $.10, but any
such amount shall be carried forward and reduction with respect thereof shall be
made at the time of and together with any subsequent reduction which, together
with such amount and any other amount or amounts so carried forward, shall
aggregate $.10 or more.

1.       Optional Redemption. Upon a change in control of the Corporation that
will result in the holders of Series A Convertible Preferred Stock receiving
cash or marketable securities with an aggregate value of less than 3 times the
Conversion Price, upon written notice to the Corporation (the "Redemption
Notice"), the holders of the Series A Convertible Preferred Stock shall have the
right to require the Corporation to redeem or repurchase the shares of Series A
Convertible Preferred Stock for an amount equal to the Redemption Payment. The
Redemption Notice shall state the number of shares of Series A Convertible
Preferred Stock that the holder intends to have redeemed.

1.       Future Issuance of Shares; Preemptive Rights.

         (a) Offering Notice. Except for (i) capital stock or options to
purchase capital stock of the Corporation which may be issued to employees,
consultants or directors of the Corporation pursuant to a stock incentive
<PAGE>

plan or other employee benefit arrangement approved by the Board of Directors,
(ii) a subdivision of the outstanding shares of Common Stock into a larger
number of shares of Common Stock, (iii) capital stock issued as full or partial
consideration for a merger, acquisition, joint venture, strategic alliance,
license agreement or other similar non-financing transaction, (iv) capital stock
issued as full or partial consideration for services (v) capital stock issued in
connection with a publicly registered offering, (vi) capital stock issued upon
exercise, conversion or exchange of any Preferred Stock, options or warrants, or
(vii) capital stock purchased by any Purchaser in the public market or from the
Corporation, if the Corporation wishes to issue any shares of capital stock or
any other securities convertible into or exchangeable for capital stock of the
Corporation (collectively, "New Securities") to any Person (the "Subject
Purchaser"), then the Corporation shall send written notice (the "New Issuance
Notice") to the holders of the Series A Convertible Preferred Stock, which New
Issuance Notice shall state (x) the number of New Securities proposed to be
issued and (y) the proposed purchase price per share of the New Securities that
the Corporation is willing to accept (the "Proposed Price").

         (b) Preemptive Rights; Exercise.

(1)       For a period of ten (10) days after the giving of the New Issuance
Notice as provided in Section 8(a), each initial holder of the Series A
Convertible Preferred Stock and any permitted assignees thereof PURSUANT TO
SECTION 11.3 OF THAT CERTAIN INVESTMENT AGREEMENT BY AND AMONG THE CORPORATION
AND CERTAIN PURCHASERS LISTED THEREIN, DATED AS OF JULY 27, 1999 (each, a
"Preemptive Rightholder") shall have the right to purchase up to its
Proportionate Percentage (as hereinafter defined) of the New Securities at a
purchase price equal to the Proposed Price and upon the terms and conditions set
forth in the New Issuance Notice. Each Preemptive Rightholder shall have the
right to purchase up to that percentage of the New Securities determined by
dividing (a) a number equal to the number of shares of Common Stock into which
the shares of Series A Convertible Preferred Stock then owned by such Preemptive
Rightholder are convertible by (b) the total of (x) the number of shares of
Common Stock then outstanding and (y) the number of shares of Common Stock into
which all outstanding shares of Preferred Stock are convertible (the
"Proportionate Percentage").

(1)       The right of each Preemptive Rightholder to purchase the New
Securities under subsection (i) above shall be exercisable by delivering written
notice of its exercise, prior to the expiration of the 10-day period referred to
in subsection (i) above, to the Corporation, which notice shall state the amount
of New
<PAGE>

Securities that the Preemptive Rightholder elects to purchase as provided in
Section 8(b)(i). The failure of a Preemptive Rightholder to respond within the
10-day period shall be deemed to be a waiver of the Preemptive Rightholder's
rights under Section 8(b)(i); provided that each Preemptive Rightholder may
waive its, his or her rights under Section 8(b)(i) prior to the expiration of
the 10-day period by giving written notice to the Corporation.

             (iii) If, following the expiration of the 10-day period referred to
above, not all of the New Securities have been subscribed for by the Subject
Purchasers, each Preemptive Rightholder shall have the option to reduce that
number of New Securities it has elected to purchase pursuant to Section 8(b)(i)
by a proportionate amount.

         (c) Closing. The closing of the purchase of New Securities subscribed
for by the Preemptive Rightholders under Section 8(b) shall be held at the same
time and place as the closing of the New Securities subscribed for by the
Subject Purchasers (the "Closing"). At the Closing, the Corporation shall
deliver certificates representing the New Securities, and the New Securities
shall be issued free and clear of all liens and the Corporation shall so
represent and warrant, and further represent and warrant that the New Securities
shall be, upon issuance of the New Securities to the Preemptive Rightholders and
after payment for the New Securities, duly authorized, validly issued, fully
paid and nonassessable by the Corporation. At the Closing, the Preemptive
Rightholders purchasing the New Securities shall deliver payment in full in
immediately available funds for the New Securities purchased by it, him or her.
At the Closing, all of the parties to the transaction shall execute any
additional documents that are otherwise necessary or appropriate.

         (d) Sale to Subject Purchaser. The Corporation may sell to the Subject
Purchaser all of the New Securities not purchased by the Preemptive Rightholders
as provided in Section 8(b) on terms and conditions that are no more favorable
to the Subject Purchaser than those set forth in the New Issuance Notice;
provided, however, that the sale is bona fide and made pursuant to a contract
entered into within four (4) months of the earlier to occur of (i) the waiver by
the Preemptive Rightholders of their option to purchase the New Securities as
provided in Section 8(b) and (ii) the expiration of the 10-day period referred
to in Section 8(b). If such sale is not consummated within such four (4) month
period for any reason, then the restrictions provided for in this Section 8
shall again become effective, and no issuance and sale of New Securities may be
made thereafter by the Corporation without again offering the New Securities in
accordance with this Section 8. The closing
<PAGE>

of any issue and purchase contemplated by this Section 8(d) shall be held at the
time and place as the parties to the transaction may agree.

A.       The recitals and resolutions contained herein have not been modified,
altered or amended and are presently in full force and effect.
         IN WITNESS WHEREOF, the undersigned has executed this Certificate this
27th day of July 1999.

                                            BLUEFLY, INC.


                                            By:
                                               Name:   /s/ E. Kenneth Seiff
                                                       -------------------------
                                               Title:  Chairman of the Board,
                                                       Chief Executive Officer,
                                                       President and Treasurer