Document:

Exhibit 10.27

                          e-business Hosting Agreement

                                     between

                                  Bluefly, Inc.

                                       and

                   International Business Machines Corporation

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                          e-business Hosting Agreement

Under this e-business Hosting Agreement ("Agreement") between International
Business Machines Corporation ("IBM") and Bluefly, Inc. ("Customer"), IBM will
provide Web hosting and related services ("Services") to Customer. The Agreement
includes these terms and conditions and the documents referenced herein ("Base
Terms"), e-business hosting services order forms accepted by IBM ("Order
Forms"), and the following attachments:

a.    Attachment A: Facilities Services;

b.    Service Option Attachment for Facilities Services; and

c.    all other applicable attachments referenced in the Order Forms for
      Services options selected by Customer ("Service Option Attachments").

In the event of a conflict between the Base Terms and an attachment, the Base
Terms will govern, except where an attachment or a provision contained therein
expressly states that it will govern over the Base Terms. The Base Terms and the
attachments always govern over any inconsistent provision in an Order Form.

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1.0   Definitions

a.    "Acceptable Use Policy" means the Acceptable Use Policy for IBM e-business
      Services, located on the Internet at http://www.ibm.com/services/
      e-business/aup.html, as of the Effective Date, and any subsequent
      modification in accordance with Section 13.2 below.

b.    "Affiliates" means entities that control, are controlled by, or are under
      common control with a party to this Agreement.

c.    "Base Components" means the hardware and software that IBM makes
      available, if any, as specified in Order Forms and associated Service
      Option Attachments.

d.    "Content" means information, software, and data that Customer provides,
      including, without limitation, any hypertext markup language files,
      scripts, programs, recordings, sound, music, graphics, images, applets or
      servlets that Customer or its Subcontractors or Services Recipients
      create, install, upload or transfer in or through the e-business Hosting
      Environment and/or Customer Components.

e.    "Content Administrator" means an employee or Subcontractor of Customer who
      is authorized by Customer to install, upload and/or maintain Content using
      a User Identification.

f.    "Customer Components" means the hardware, software and other products,
      data and Content that Customer provides, including those specified in
      Service Option Attachments.

g.    "e-business Hosting Environment" means the Base Components and the IBM
      provided Internet access bandwidth, collectively.

h.    "Enterprise" means any legal entity and the subsidiaries it owns by more
      than 50 percent. The term "Enterprise" applies only to the portion of the
      Enterprise physically located within the United States of America.

i.    "IBM e-business Hosting Center" means the facility used by IBM to provide
      the Services.

j.    "Internet" means the public worldwide network of TCP/IP-based networks.

k.    "Materials" means literary or other works of authorship (such as programs,
      program listings, programming tools, documentation, reports, drawings and
      similar works) that IBM may deliver to Customer. "Materials" does not
      include licensed program products available under their own license
      agreements or Base Components.

l.    "Required Consents" means any consents or approvals required to give IBM
      and its Subcontractors the right or license to access, use and/or modify
      in electronic form and in other forms, including derivative works, the
      Customer Components, without infringing the ownership or intellectual
      property rights of the providers, licensors, or owners of such Customer
      Components.

m.    "Service Option Ready Date" means the date that IBM has notified Customer
      that IBM has completed the implementation activities

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      specified in an applicable Service Option Attachment.

n.    "Services Recipients" means any entities or individuals receiving or using
      the Services, or the results or products of the Services.

o.    "Service Option Attachment Start Date" means the day after the date of the
      last signature on an Order Form authorizing the Services under an
      applicable Service Option Attachment.

p.    "Subcontractor" means a contractor, vendor, agent, or consultant selected
      and retained by IBM or Customer, respectively.

q.    "TCP/IP" means Transmission Control Protocol/Internet Protocol.

r.    "User Identification" or "ID" means a string of characters that uniquely
      identifies a Content Administrator.

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2.0   IBM Services Responsibilities

IBM will perform the Services described in Attachment A and applicable Service
Option Attachments.

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3.0   Term and Termination

3.1   Term

This Agreement will be effective beginning on 12:01 a.m., Eastern Time, on the
day after the date of last signature to these Base Terms ("Effective Date") and
ending on the expiration and/or termination of all Service Option Attachments,
unless the Agreement is terminated earlier in accordance with the terms herein.
The term of each Service Option Attachment is as specified on the applicable
Order Form.

3.2   Renewal

Each Service Option Attachment will renew automatically for an additional term
equal in duration to the previous term of the applicable Service Option
Attachment unless either party notifies the other party in writing at least
ninety (90) days prior to the end of the then-current term for the applicable
Service Option Attachment that it has elected to terminate such Service Option
Attachment.

3.3   Termination for Cause

Customer or IBM may terminate this Agreement for material breach of this
Agreement by the other upon written notice containing the specific nature and
dates of the material breach. The breaching party will have thirty (30) days
from receipt of notice to cure such breach, except for nonpayment by Customer,
which must be cured within seven (7) business days from receipt of notice. If
such breach has not been timely cured, then the non-breaching party may
immediately terminate this Agreement upon written notice; provided, however, it
is understood that in the event IBM has so breached this Agreement IBM shall not
be entitled to recover the early termination charges described in Section 3.4(b)
below.

3.4   Termination for Convenience

Customer may terminate this Agreement (including all Service Option Attachments)
or any Service Option Attachment (with the exception of any Service Option
Attachment that is a prerequisite for the provision of Services under a
non-terminated Service Option Attachment) for convenience at the end of any
calendar month by:

a.    providing at least one month's prior written notice to IBM; and

b.    paying the applicable early termination charges, if any, specified in
      Attachment A and applicable Service Option Attachments.

In the event that Customer exercises its rights under this Section 3.4, IBM
shall continue to fulfill all of its duties and obligations following the notice
date and until the final termination date.

3.5   Effect of Termination

Upon the date of termination, all Customer payment obligations accrued hereunder
through the date of termination will become due and payable. The termination of
selected Service Option Attachments will not affect Customer's obligation to pay
charges under other Service Option Attachments.

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4.0   Charges and Payment

4.1   Charges

Charges for applicable Services will be specified in Service Option Attachments
and Order Forms. Charges can be specified as one-time, installment, recurring,
or usage. IBM will invoice such Charges when they begin or are due as set forth
in Service Option Attachments.

4.2   Payment

IBM invoices will specify the amount due. Payment is due upon receipt and
payable as specified in such invoice. Customer agrees to pay accordingly,
including any late payment fees. Payment will be made in United States dollars.

4.3   Taxes

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Customer will pay or provide appropriate exemption documentation for all taxes,
duties, levies, and any other fees (except for taxes based upon IBM's net
income) related to the Services imposed by any governmental authorities. Charges
specified herein (including in an Order Form) are exclusive of any such taxes,
duties, levies or fees.

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5.0   Warranties and Disclaimers

5.1   IBM Representations and Warranties

IBM represents and warrants that:

a.    it will perform the Services using reasonable care and skill and in
      accordance with the applicable Service Option Attachments (which means the
      degree of knowledge, skill and judgment customarily exercised by members
      of the applicable profession with respect to work of a similar nature);
      and that it will provide Customer with competent, fully trained, fully
      qualified and responsible personnel to perform the Services; and

b.    it has the requisite corporate power and authority to execute, deliver and
      perform its obligations under this Agreement.

IBM covenants that it will comply with the laws applicable to IBM's business.

5.2   Exclusivity of Warranties

THE WARRANTIES IN SECTION 5.1 ARE THE EXCLUSIVE WARRANTIES FROM IBM. THEY
REPLACE ALL OTHER WARRANTIES, INCLUDING, WITHOUT LIMITATION, THE IMPLIED
WARRANTIES OF MERCHANTABILITY, SATISFACTORY QUALITY, AND FITNESS FOR A
PARTICULAR PURPOSE.

5.3   Security

a.    Customer acknowledges that IBM does not control the transfer of data over
      telecommunications facilities, including the Internet.

b.    Subject to the other disclaimers contained herein, IBM will implement the
      security features specified herein, including the IBM perform security
      obligations identified in Section 8.0 of the Facilities Services Service
      Option Attachment. However, IBM does not warrant secure operation of the
      Services or that it will be able to prevent third party disruptions of the
      e-business Hosting Environment or Customer Components.

c.    Customer acknowledges that IBM offers numerous security options, specified
      in Service Option Attachments. Customer is responsible for selecting on
      Order Forms the set of security options that it determines meet Customer's
      needs.

d.    Customer agrees that IBM shall have no liability for any provision of
      security-related services or advice that IBM may voluntarily provide
      outside the scope of selected Service Option Attachments.

5.4   Other Disclaimers

a.    IBM does not warrant uninterrupted or error-free operation of any Service
      or that IBM will correct all defects. open

b.    IBM does not make any representation or warranty as to the capacity,
      performance or scalability of the Services, e-business Hosting
      Environment, or Customer Components.

c.    IBM PROVIDES ALL MATERIALS AND ALL NON-IBM SERVICES, PRODUCTS, DATA,
      APPARATUS AND SOFTWARE "AS IS", WITHOUT WARRANTY OF ANY KIND, INCLUDING,
      WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY,
      SATISFACTORY QUALITY, AND FITNESS FOR A PARTICULAR PURPOSE. Non-IBM
      suppliers may provide their own warranties to you.

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6.0 Confidentiality

All information exchanged between the parties is non-confidential; provided,
however if either or both parties require the exchange of confidential
information, such information will be exchanged under the terms and conditions
of the Agreement for Exchange of Confidential Information executed by IBM on
August 3, 2001 (the "AECI") (it being further agreed as follows: (a) the AECI is
hereby modified so that any information that is disclosed by a party hereto that
a reasonable person would construe, based upon the nature of the information and
the circumstances surrounding the disclosure, as intended to be confidential
shalll be deemed to be confidential Information under the AECI and shall be
accorded all protections of the AECI and (b) after the date hereof the parties
hereto shall enter into a modification of the AECI whereby the provisions of (a)
immediately above are documented and (c) the parties shall also amend the AECI
so as to reflect the following agreement: in the event that a breach or
threatened breach of a party's obligations hereunder shall cause irreparable
harm wherein a remedy at law would

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prove inadequate, the aggrieved party shall have the right to seek and obtain an
injunction so as to prevent any further disclosure of the confidential
Information. With respect to any confidential information contained in or
traveling through the e-business Hosting Environment or Customer Components, the
provisions of Sections 5, 9, and 10 herein will prevail to the extent of any
inconsistent provisions in the confidentiality agreement.

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7.0   Materials

a.    IBM will specify Materials to be delivered to Customer. IBM will identify
      them as being "Type I Materials," "Type II Materials," or otherwise as
      Customer and IBM agree in writing. If not specified, Materials will be
      considered Type II Materials.

b.    Type I Materials are those, created during the Service performance period,
      in which Customer will have all right, title, and interest (including
      ownership of copyright). IBM will retain one copy of the Materials.
      Customer grants to IBM:

      1.    an irrevocable, nonexclusive, worldwide, paid-up license to use,
            execute, reproduce, display, perform, distribute (internally and
            externally) copies of, and prepare derivative works based on Type I
            Materials; and
      2.    the right to authorize others to do any of the same.

c.    Type II Materials are those, created during the Service performance period
      or otherwise (such as those that preexist the Service), in which IBM or
      third parties have all right, title, and interest (including ownership of
      copyright). IBM will deliver one copy of the specified Materials to
      Customer. IBM grants Customer an irrevocable, nonexclusive, worldwide,
      paid-up license to use, execute, reproduce, display, perform, and
      distribute, within Customer's Enterprise only, copies of Type II
      Materials.

d.    The parties agree to reproduce the copyright notice and any other legend
      of ownership on any copies made under the licenses granted in this Section
      7.

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8.0   Indemnification

8.1   Indemnification by IBM

If a third party claims or threatens a claim that Materials or Base Components
IBM provides to Customer or uses in connection with the performance of the
Services infringe that party's patent, trademark, copyright, or trade secret,
then IBM will indemnify, defend and hold harmless the Customer, its Enterprise
and their respective employees, officers, agents and directors against that
claim or threatened claim at IBM's expense and pay all costs, damages, penalties
and reasonable attorneys' fees that a court finally awards in connection with
that claim (or which IBM agrees in any final settlement) provided that Customer:

a.    promptly notifies IBM in writing of the claim; and

b.    allows IBM to control, and cooperates with IBM in, the defense and any
      related settlement negotiations (it being understood and agreed that if
      Customer incurs any costs in connection with such cooperation, over and
      above nominal costs, IBM shall reimburse Customer therefor, such costs to
      potentially include, without limitation, the costs incurred by Customer in
      connection with depositions, responses to interrogatories, or testimony at
      trial or any similar proceeding, and travel costs in connection therewith;
      provided, however, such obligation of IBM as set forth in this
      parenthetical is conditioned upon Customer first obtaining IBM's consent
      to the incurring of such costs, such consent to be reasonably granted). If
      such a claim is made or appears likely to be made, Customer agrees to
      permit IBM to enable Customer to continue to use the Materials or Base
      Components, or to modify them, or replace them with non-infringing
      Materials or Base Components that are at least functionally equivalent. If
      IBM determines that none of these alternatives is reasonably available,
      Customer agrees to return the Materials or Base Components (if in
      Customer's possession) to IBM on IBM's written request. IBM will give
      Customer a credit equal to the amount Customer paid IBM for the applicable
      Materials or for use of the applicable Base Components up to a maximum of
      twelve (12) months of applicable charges. This is IBM's entire obligation
      to Customer with regard to any claim of infringement. Notwithstanding the
      foregoing, IBM is not responsible for third party claims based on:

      1.    anything Customer provides which is incorporated into the Materials;

      2.    Customer's modification of the Materials;

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      3.    the combination, operation, or use of the Materials with any
            product, data, or apparatus that IBM did not provide; or

      4.    non-IBM hardware, software, or data, including those that may be in
            the Base Components.

8.2   Indemnification by Customer

a.    Customer will defend IBM and its Enterprise and their employees, officers,
      and directors against any third party claim (and pay all damages that a
      court of competent jurisdiction awards, or which Customer agrees in any
      final settlement to such third party and any reasonable attorneys' fees
      and expenses of defense incurred by IBM):

      1.    that Content or Customer's use of the Services violates Customer's
            obligation in Section 11.2(b);

      2.    that Customer Components infringe that party's patent or copyright;

      3.    that is brought by a Services Recipient and is related, directly or
            indirectly, to the Services; or

      4.    arising out of or related to a mechanics' lien Customer is required
            to cancel and discharge pursuant to this Agreement.

b.    For indemnification under this Section 8.2, IBM will:

      1.    promptly notify Customer in writing of the claim; and

      2.    allow Customer to control, and will cooperate with Customer in, the
            defense and any related settlement negotiations.

c.    Notwithstanding anything else to the contrary contained herein, Customer
      shall be relieved of its indemnification duty or obligation to the extent
      that IBM's bad faith, willful misconduct or gross negligence. breach of
      its contractual obligations hereunder is a cause of the damages suffered
      by the Services Recipient.

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9.0   Limitation of Liability

9.1   IBM's Limitation of Liability

Circumstances may arise where, because of a default on IBM's part or other
liability, Customer is entitled to recover damages from IBM. Regardless of the
basis on which Customer is entitled to claim damages from IBM (including
fundamental breach, negligence, misrepresentation, or other contract or tort
claim), IBM is liable for no more than:

a.    indemnification payments as provided in Section 8.1;

b.    damages for bodily injury (including death) and damage to real property
      and tangible personal property; and

c.    the amount of any other actual direct damages, up to the greater of
      $100,000 or the charges paid by Customer to IBM for the Services in the
      twelve (12) months immediately preceding the accrual of the first claim
      related to the Services. The foregoing limit also applies to any of IBM's
      Affiliates and Subcontractors. It is the cumulative maximum for which IBM
      and its Affiliates and Subcontractors are collectively responsible. Under
      no circumstances is IBM, its Affiliates or its Subcontractors liable for
      any of the following:

      1.    third party claims against Customer for damages (other than those
            expressly provided in Subsections 9.1(a) and 9.1(b)); or

      2.    loss of, or damage to, Customer's or any other entity's records or
            data.

9.2   Customer's Limitation of Liability

Circumstances may arise where, because of a default on Customer's part or other
liability, IBM is entitled to recover damages from Customer. Regardless of the
basis on which IBM is entitled to claim damages from Customer (including
fundamental breach, negligence, misrepresentation, or other contract or tort
claim), Customer is liable for no more than:

a.    Indemnification payments as provided in Section 8.2;

b.    damages for bodily injury (including death) and damage to real property
      and tangible personal property; and

(c) the amount of any other actual direct damages, up to the greater of $100,000
or the charges paid by Customer to IBM for the Services in the twelve (12)
months immediately preceding the accrual of the first claim related to the
Services. The foregoing limit also applies to any of Customer's Affiliates. It
is the cumulative maximum for which Customer and its Affiliates are collectively
responsible. Under no circumstances is Customer or its Affiliates liable for any
third party claims against IBM for damages (other than those

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expressly provided in Subsections 9.2(a) and 9.2(b)).

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10.0  Disclaimer of Consequential Damages

a.    In no event will either party be liable to the other for special,
      incidental, or indirect damages or for any consequential damages
      (including lost profits or savings), even if they are informed of the
      possibility; provided that this Section 10 does not apply to Customer's
      failure to pay any amounts owing to IBM under this Agreement (including
      amounts owing for Services that would have been rendered but for
      Customer's breach of this Agreement).

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11.0  Other Customer Obligations

11.1  Services Support

Customer will comply with its responsibilities to support the Services as
specified in Attachment A and in applicable Service Option Attachments. Such
obligations are to be performed at no charge to IBM. IBM's obligations are
contingent on Customer meeting such support obligations.

11.2 Representations and Warranties

Customer represents and warrants that:

a.    it has the requisite corporate power and authority to execute, deliver and
      perform its obligations under this Agreement; Customer has no contractual
      or other obligation that (i) restricts or prohibits Customer's execution
      or performance of this Agreement, or (ii) Customer will breach in
      connection with the execution or performance of this Agreement; and

b.    its use of the Services and all Content will comply with the Acceptable
      Use Policy.

11.3  Suspected Violations

IBM reserves the right to investigate potential violations of the
representations and warranties in Subsection 11.2(b). If IBM reasonably
determines that a breach of any such warranty has occurred, then IBM may, in its
sole and reasonable discretion:

a.    restrict Customer's access to the Services;

b.    remove or require removal of any offending Content;

c.    terminate this Agreement for cause; and/or

d.    exercise other rights and remedies, at law or in equity.

Except in an emergency or as may otherwise be required by law, before
undertaking the activities in Subsection 11.3(a) or 11.3(b), IBM will attempt to
notify Customer by any reasonably practical means under the circumstances, such
as, without limitation, by telephone or e-mail.

Customer will promptly notify IBM of any event or circumstance related to this
Agreement, Customer's use of the Services, or Content of which Customer becomes
aware that could lead to a claim or demand against IBM, and Customer will
provide all relevant information relating to such event or circumstance to IBM
at IBM's request.

11.4  Required Consents

Customer will promptly obtain and upon request provide to IBM evidence of such
Required Consents necessary for IBM to provide the Services. IBM will be
relieved of its obligations to the extent that they are affected by Customer's
failure to obtain and provide promptly to IBM any Required Consents.

11.5  Capacity Planning

Customer is responsible for determining whether the Base Components, IBM
provided Internet access bandwidth, Customer Components and their combination
will meet Customer's capacity or performance needs. Customer is responsible for
planning for and requesting changes to the Base Components or IBM provided
Internet access bandwidth, as determined by Customer, including any additional
capacity required to support anticipated peaks in demand that may significantly
increase Web site hits, transaction volumes, or otherwise increase system
resource utilization.

11.6  Content and Digital Certificates

Customer is solely responsible for:

a.    all Content including, without limitation, its selection, licensing,
      accuracy, performance, maintenance, and support; and

b.    the selection, management and use of any public and private keys and
      digital certificates it may use with the Services.

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12.0  Base Components

12.1  License

IBM grants Customer a nonexclusive, revocable license to use the Base Components
solely in connection with the Services as provided under this Agreement.
Customer agrees not to download or otherwise copy, reverse assemble, reverse
compile, or otherwise translate the software

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portions of the Base Components, other than to make one copy for backup
purposes.

12.2  Maintenance of Base Components

For Base Components provided hereunder, IBM will provide, at no additional cost
to Customer, maintenance as reasonably determined by IBM and upon notice to
Customer. Unless otherwise specified in an SOA, such maintenance excludes
upgrades to Base Components. Call back response times for Base Component
failures through issue resolution is designated in the relevant Service Option
Attachment.

12.3  No Sale or Lease of Goods

As between Customer and IBM, IBM retains all right, title and interest in the
Base Components. No goods are sold or leased by IBM under this Agreement. If
Customer desires to purchase or to lease goods from IBM, such purchase or lease
will be governed by a separate mutually acceptable written agreement between
Customer and IBM or an IBM Affiliate.

12.4  No Lease of Real Property

This Agreement is a services agreement and not a lease of any real property.

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13.0  Changes

13.1  Services

IBM, in its reasonable discretion, may change the terms and conditions of
Attachment A and/or Service Option Attachments, upon at least ninety (90) days
prior notice to Customer. IBM may change the prices of Service Option
Attachments after twelve (12) months following the applicable Service Option
Attachment Start Date upon at least ninety (90) days prior written notice to
Customer. Any such changes will not apply retroactively. If Customer disagrees
with any such changes, Customer may in its sole discretion terminate this
Agreement (or some or all of the affected Service Option Attachments) without
the payment of termination charges upon notice to IBM at least thirty (30) days
prior to the effective date of the applicable change.

13.2 Acceptable Use Policy

IBM, in its reasonable discretion, may modify the Acceptable Use Policy upon
thirty (30) days' notice to Customer.

13.3 Amendments

Except for changes pursuant to Sections 13.1 and 13.2, this Agreement may be
amended only by a writing signed by authorized representatives of both parties.

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14.0  General

14.1  Headings

The headings of the various sections of this Agreement have been inserted for
convenience only and shall not affect the interpretation of this Agreement.

14.2  Survival

Any of these terms and conditions which by their nature extend beyond the
Agreement termination or expiration remain in effect until fulfilled, including,
without limitation, Sections 3.5, 4, 5, 6, 7, 8, 9, 10, 11.2, 11.3, 11.6, 12.2,
12.3, and 14, and apply to both Customer's and IBM's respective successors and
assignees.

14.3  Choice of Law

This Agreement will be governed by the substantive laws of the State of New
York, without regard for its conflict of laws provisions.

14.4  Waiver of Jury Trial

The parties waive any right to a jury trial in any proceeding arising out of or
related to this Agreement.

14.5  Severability

If any provision of this Agreement shall be held by a court of competent
jurisdiction to be invalid, illegal, or unenforceable, the validity, legality,
and enforceability of the remaining provisions of this Agreement shall in no way
be affected or impaired thereby, so long as the remaining provisions of this
Agreement still express the original intent of the parties. If the original
intent of the parties can not be preserved, this Agreement shall either be
renegotiated or terminated.

14.6  Publicity and Trademarks

Neither party grants the other the right to use its or any of its Affiliates'
trademarks, trade names, or other designations in any promotion, publication, or
Web site without prior written consent. Except as may be required by law or as
may be required by IBM to perform the Services, neither party may disclose to
any third party the terms and conditions of this Agreement, without prior
written consent.

14.7  No Third-Party Beneficiaries

Except as expressly provided in Section 8, this Agreement does not create any
intended third party beneficiary rights.

14.8 Personnel

Each party is responsible for the supervision, direction, and control of its
respective personnel. IBM reserves the right to determine the assignment of its
personnel. IBM may subcontract portions of

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the Services to Subcontractors and Affiliates selected by IBM.

14.9  No Agency

This Agreement does not create an agency, joint venture, or partnership between
the parties.

14.10 Assignment

Customer will not assign this Agreement or any of its rights hereunder without
the prior written consent of IBM, such consent not to be unreasonably withheld.
Notwithstanding the foregoing, Customer may assign this Agreement to a successor
organization by merger, consolidation or acquisition. Any attempted assignment
in violation of the foregoing will be void. In any permitted assignment,
Customer will remain liable for its obligations hereunder.

14.11 No Resale

Customer shall not resell the Services, in whole or in part.

14.12 Risk of Loss

Risk of loss for all Base Components shall at all times remain with IBM. Risk of
loss for all Customer Components shall at all times remain with Customer.

14.13 Force Majeure

Except for payment obligations hereunder, neither party is responsible to
fulfill its obligations to the extent due to causes beyond its control.

14.14 Actions Period

Neither party will bring a legal action related to this Agreement more than two
years after the cause of action accrued.

14.15 Waiver

The failure of one party to insist upon strict adherence to any term of this
Agreement on any occasion shall not be considered a waiver, nor shall it deprive
that party of the right to insist later on adherence thereto. Any waiver must be
in writing and signed by an authorized representative of the waiving party.

14.16 Freedom of Action

Each party is free to enter into similar agreements with others.

14.17 Limitation of Licenses

Each of us grants only the licenses expressly specified herein. No other
licenses or rights (including licenses or rights under patents) are granted.

14.18 Data Protection

You agree to allow International Business Machines Corporation and entities
within its Enterprise to store and use your contact information, including
names, phone numbers, and e-mail addresses, anywhere they do business. Such
information will be processed and used in connection with our business
relationship, and may be provided to contractors, Business Partners, and
assignees of IBM Corp. and entities within its Enterprise for uses consistent
with their collective business activities, including communicating with you (for
example, for processing orders, for promotions, and for marketing research). For
personal information processed by IBM on your behalf as part of the Services,
IBM will act in accordance with your instructions by following such processing
and security obligations as are contained in this Agreement. You also confirm
that you are solely responsible for ensuring that any processing and security
obligations comply with applicable data protection laws. Your contact
information shall not be considered personal information processed on your
behalf.

14.19 Geographic Scope

Although it is possible that Services Recipients outside of the United States of
America may access Customer's Web site, IBM's delivery of the Services will only
occur within the United States of America, and IBM's obligations hereunder are
valid only in the United States of America.

14.20 Notices

Any notices required or permitted hereunder will be effective upon receipt and
will be personally delivered; mailed via the postal service; sent by reliable
overnight courier; or transmitted by confirmed facsimile. Except for notices
under Section 11.3, all notices will be in writing and addressed to the
applicable party's designated representative at the address specified in this
Agreement. Except as to notices permitted or required under Sections 3 or 8, the
parties agree that electronic mail messages sent between them using security
procedures sufficient to reasonably authenticate them will be deemed writings.
In addition, IBM may provide notice under Section 13.2 by a posting to the Web
site identified in Section 1.0(a).

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Customer and IBM agree that this Agreement, including the Base Terms and
applicable attachments and Order Forms, is the complete agreement between the
parties relating to the subject matter hereof. This Agreement replaces and
supersedes any other prior or contemporaneous agreements or communications
between the parties related to the subject matter hereof.

Agreed and Accepted:

Bluefly Inc.                                     International Business Machines
                                                 Corporation

By: /s/ Patrick C. Barry                         By: /s/ Maura Lynch Gray
  -----------------------------                     ----------------------------
  Customer Authorized Signature                        Authorized Signature

Patrick C. Barry         1/9/02                  Maura Lynch Gray        1/14/02
-------------------------------                  -------------------------------
Name (type or print)      Date                   Name (type or print)       Date

Chief Financial Officer and Chief
Operating Officer                                Business Unit Executive
---------------------------------                -------------------------------
Title                                            Title

Customer number:                                 Agreement number:
Customer address:
42 West 39th Street
9th Floor
NY,NY 10018

                                                 Engagement number:
                                                 IBM contract representative:
                                                 IBM Services identifier:  FL

After signing, please return a copy of this Agreement to the following address:

IBM Global Services
3109 W. Dr. M. L. King, Jr. Blvd.
Tampa, FL 33607
Attention:  Order Fulfillment Services

                                       10Exhibit 10.28

                                                   March 27, 2002

Bluefly, Inc.
42 West 39th Street
9th Floor
New York, New York 10018
Attention:  Mr. Ken Seiff

                  Re:  Standby Commitment Agreement

Dear Mr. Seiff:

         Quantum Industrial Partners LDC, a Cayman Islands limited duration
company ("QIP"), and SFM Domestic Investments LLC, a Delaware limited liability
company ("SFMDI" and together with QIP, the "Purchasers") intending to be
legally bound, hereby irrevocably agree, jointly but not severally, that they
shall provide Bluefly, Inc., a Delaware corporation (the "Company"), up to an
aggregate of Four Million Dollars ($4,000,000) (the "Commitment Amount"). The
Commitment Amount may be drawn by the Company, at its option (as determined by
the disinterested members of the Board of Directors of the Company) at any time
prior to January 1, 2003 in one or more tranches; provided, however, that the
Company may draw down from the Standby Commitment Amount only at such time that
its total cash balances are less than $1,000,000; and provided, further, that
the Commitment Amount shall be reduced by the gross cash proceeds received by
the Company or any of its subsidiaries from the issuance after the date hereof
of any equity or convertible securities, excluding the issuance of equity or
convertible securities in connection with: (1) financing provided by the
Purchasers pursuant to this agreement, (2) any trade payables and other
financing arrangements entered into in the ordinary course of business, and (3)
any financing or credit accommodations received by the Company pursuant to the
Financing Agreement, dated March 30, 2001, between the Company and Rosenthal &
Rosenthal, Inc. (as amended, the "R&R Financing").

         Any and all draws against the Commitment Amount shall be made on terms
(including, without limitation, the nature of the securities to be issued by the
Company) that are consistent with those in the market at the time the draw is
made for similar investments by investors similar to the Purchasers in companies
similar to the Company. The Company shall notify the Purchasers in writing
within two business days of the receipt of any funds that would reduce the
Commitment Amount; provided that the Commitment Amount shall automatically be
reduced whether or not the Company provides such notice.

         The obligation of each Purchaser in respect of the Commitment Amount
shall be limited to the percentage set forth below opposite such Purchaser's
name.

                           Purchaser                          Percentage
                           ---------                          ----------
                           QIP                                96.83%
                           SFMDI                               3.17%

<PAGE>

         In consideration of each Purchaser's execution, delivery and
performance under this agreement, the Company shall deliver to each Purchaser a
duly executed warrant (a "Warrant") to purchase the number of shares of Common
Stock, par value $0.01, of the Company set forth opposite such Purchaser's name
below for a period of five (5) years. The Warrants shall be issued on the date
hereof at an exercise price equal to the twenty (20) day trailing average
closing sales price of the Common Stock on the date hereof, as reported by
NASDAQ, which is $1.68 per share.

                           Purchaser                          Warrant Amount
                           ---------                          --------------
                           QIP                                96,830
                           SFMDI                               3,170

Each Warrant shall be in the form of Exhibit I attached hereto and shall be
delivered free and clear of any lien, claim, encumbrance, or security interest
of any kind or nature whatsoever. The parties agree that the anti-dilution
provision of Section 5.8.6 of the Certificate of Incorporation of the Company
shall not apply as a result of the issuance of each Warrant. The parties agree
that the shares of Common Stock for which the Warrants are exercisable are
deemed "Registrable Securities," as such term is defined in the Investment
Agreement (the "Investment Agreement") among the Company, Company's
predecessor-in-interest, QIP, and SFMDI dated as of November 13, 2000, and that
the holders of the Warrants shall be entitled to the registration rights set
forth therein with respect to such shares of Common Stock underlying the
Warrants.

         All notices, demands and other communications relating to this
agreement shall be made in the manner set forth in the Investment Agreement.
This agreement shall inure to the benefit of and be binding upon the successors
and permitted assigns of the parties hereto. Subject to applicable securities
laws, each of the Purchasers may assign any of its rights under this agreement
to any of its affiliates but no such assignment shall relieve any Purchaser from
its obligations hereunder. The Company may not assign any of its rights under
this agreement, except to a successor-in-interest to the Company, without the
written consent of all of the Purchasers.

         No failure or delay on the part of Company or the Purchasers in
exercising any right, power or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such rights, power or
remedy preclude any other or further exercise thereof or the exercise of any
other right, power or remedy. Any amendment, supplement or modification of or to
any provision of this agreement, any waiver of any provision of this agreement,
or any consent to any departure by the Company or the Purchasers from the terms
of this agreement shall be effective only if it is made or given in writing and
signed by all of the parties hereto.

         This agreement shall be governed by and construed in accordance with
the internal laws of the State of New York, without regard to the principles of
conflicts of law thereof. This agreement together with the Warrants are intended
by the parties as a final expression of their agreement and intended to be a
complete and exclusive statement

                                       2
<PAGE>

of the agreement and understanding of the parties hereto in respect of the
subject matter contained herein and therein.

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

         Each of the parties shall execute such documents and perform such
further acts as may be reasonably required or desirable to carry out or to
perform the provisions of this agreement. This agreement may be executed in any
number of counterparts and by the parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.

         IN WITNESS WHEREOF, the parties hereto have caused this agreement to be
executed and delivered by their respective officers hereunto duly authorized on
the date first written above.

                                            QUANTUM INDUSTRIAL PARTNERS LDC

                                            By: /s/  Richard D. Holahan, Jr.
                                                --------------------------------
                                                 Name:  Richard D. Holahan, Jr.
                                                 Title:  Attorney-in-fact

                                            SFM DOMESTIC INVESTMENTS LLC

                                            By: /s/  Richard D. Holahan, Jr.
                                                -------------------------------
                                                 Name:  Richard D. Holahan, Jr.
                                                 Title:  Attorney-in-fact

ACCEPTED AND AGREED:

BLUEFLY, INC.

By: /s/ E. Kenneth Seiff
    --------------------------------
     Name:  E. Kenneth Seiff
     Title:  Chief Executive Officer

<PAGE>

                                                                       EXHIBIT I

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED,
QUALIFIED, APPROVED OR DISAPPROVED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD
OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS OR AN APPLICABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER SUCH ACT OR LAWS AND NEITHER
THE SECURITIES AND EXCHANGE COMMISSION NOR ANY OTHER FEDERAL OR STATE REGULATORY
AUTHORITY HAS PASSED ON OR ENDORSED THE MERITS OF THESE SECURITIES.

                                                                WARRANT NO. [__]

                                     WARRANT

                       TO PURCHASE SHARES OF COMMON STOCK

                                       OF

                                  BLUEFLY, INC.

         THIS IS TO CERTIFY THAT [__________________] or its registered assigns
(the "Holder"), is the owner of the right to subscribe for and to purchase from
BLUEFLY, INC., a Delaware corporation (the "Company"), [___________________]
[(_____)] (the "Number Issuable"), fully paid, duly authorized and
non-assessable shares of Common Stock at a price per share equal to the Current
Market Price as of March 26, 2002 (the "Exercise Price"), at any time, in whole
or in part, on or after March 27, 2002 (the "Effective Date") through 5:00 PM
New York City time, on March 27, 2007 (the "Expiration Date") all on the terms
and subject to the conditions hereinafter set forth (the "Warrants").

         The Number Issuable and the Exercise Price are subject to further
adjustment from time to time pursuant to the provisions of Section 2 of this
Warrant Certificate.

         Capitalized terms used herein but not otherwise defined shall have the
meanings given to them in Section 12 hereof.

         Section 1. Exercise of Warrants.

                                       1
<PAGE>

         (a) Subject to the last paragraph of this Section 1, the Warrants
evidenced hereby may be exercised, in whole or in part, by the Holder hereof at
any time or from time to time, on or after the Effective Date and on or prior to
the Expiration Date upon delivery to the Company at the principal executive
office of the Company in the United States of America, of (A) this Warrant
Certificate, (B) a written notice stating that such Holder elects to exercise
the Warrants evidenced hereby in accordance with the provisions of this Section
1 and specifying the number of Warrants being exercised and the name or names in
which the Holder wishes the certificate or certificates for shares of Common
Stock to be issued and (C) payment of the Exercise Price for such Warrants,
which shall be payable by any one or any combination of the following: (i) cash;
(ii) certified or official bank check payable to the order of the Company; (iii)
by the surrender (which surrender shall be evidenced by cancellation of the
number of Warrants represented by any Warrant Certificate presented in
connection with a Cashless Exercise (as defined below)) of a Warrant or Warrants
(represented by one or more relevant Warrant Certificates), and without the
payment of the Exercise Price in cash, in return for the delivery to the
surrendering Holder of such number of shares of Common Stock equal to the number
of shares of the Common Stock for which such Warrant is exercisable as of the
date of exercise (if the Exercise Price were being paid in cash or certified or
official bank check) reduced by that number of shares of Common Stock equal to
the quotient obtained by dividing (x) the aggregate Exercise Price (assuming no
Cashless Exercise) to be paid by (y) the Market Price of one Share of Common
Stock on the Business Day which immediately precedes the day of exercise of the
Warrant; or (iv) by the delivery of shares of the Common Stock having a value
(as defined by the next sentence) equal to the aggregate Exercise Price to be
paid, that are either held by the Holder or are acquired in connection with such
exercise, and without payment of the Exercise Price in cash. Any share of Common
Stock delivered as payment for the Exercise Price in connection with an In-Kind
Exercise (as defined below) shall be deemed to have a value equal to the Market
Price of one Share of Common Stock on the Business Day that immediately precedes
the day of exercise of the Warrants. An exercise of a Warrant in accordance with
clause (iii) is herein referred to as a "Cashless Exercise" and an exercise of a
Warrant in accordance with clause (iv) is herein referred to as an "In-Kind
Exercise." The documentation and consideration, if any, delivered in accordance
with subsections (A), (B) and (C) are collectively referred to herein as the
"Warrant Exercise Documentation."

         (b) As promptly as practicable, and in any event within five (5)
Business Days after receipt of the Warrant Exercise Documentation, the Company
shall deliver or cause to be delivered (A) certificates representing the number
of validly issued, fully paid and nonassessable shares of Common Stock specified
in the Warrant Exercise Documentation, (B) if applicable, cash in lieu of any
fraction of a share, as hereinafter provided, and (C) if less than the full
number of Warrants evidenced hereby are being exercised or used in a Cashless
Exercise, a new Warrant Certificate or Certificates, of like tenor, for the
number of Warrants evidenced by this Warrant Certificate, less the number of
Warrants then being exercised and/or used in a Cashless Exercise. Such exercise
shall be deemed to have been made at the close of business on the date of
delivery of the Warrant Exercise Documentation so that the Person entitled to
receive shares of Common

                                       2
<PAGE>

Stock upon such exercise shall be treated for all purposes as having become the
record holder of such shares of Common Stock at such time.

         (c) The Company shall pay all expenses incurred by the Company in
connection with and taxes and other governmental charges (other than income
taxes of the Holder) that may be imposed in respect of, the issue or delivery of
any shares of Common Stock issuable upon the exercise of the Warrants evidenced
hereby. The Company shall not be required, however, to pay any tax or other
charge imposed in connection with any transfer involved in the issue of any
certificate for shares of Common Stock, as the case may be, in any name other
than that of the registered holder of the Warrant evidenced hereby.

         (d) In connection with the exercise of any Warrants evidenced hereby,
no fractions of shares of Common Stock shall be issued, but in lieu thereof the
Company shall pay a cash adjustment in respect of such fractional interest in an
amount equal to such fractional interest multiplied by the Market Price for one
Share of Common Stock on the Business Day which immediately precedes the day of
exercise. If more than one (1) such Warrant shall be exercised by the holder
thereof at the same time, the number of full shares of Common Stock issuable on
such exercise shall be computed on the basis of the total number of Warrants so
exercised.

         Section 2. Certain Adjustments.

            (a) The number of shares of Common Stock purchasable upon the
exercise of this Warrant and the Exercise Price shall be subject to adjustment
as follows:

               (i) Stock Dividends, Subdivision, Combination or Reclassification
of Common Stock. If at any time after the date of the issuance of this Warrant
the Company shall (i) pay a dividend on Common Stock in shares of its capital
stock, (ii) combine its outstanding shares of Common Stock into a smaller number
of shares, (iii) subdivide its outstanding shares of Common Stock as the case
may be, or (iv) issue by reclassification of its shares of Common Stock any
shares of capital stock of the Company, then, on the record date for such
dividend or the effective date of such subdivision or split-up, combination or
reclassification, as the case may be, the number and kind of shares to be
delivered upon exercise of this Warrant will be adjusted so that the Holder will
be entitled to receive the number and kind of shares of capital stock that such
Holder would have owned or been entitled to receive upon or by reason of such
event had this Warrant been exercised immediately prior thereto, and the
Exercise Price will be adjusted as provided below in paragraph 2(a)(v).

               (ii) Extraordinary Distributions. If at any time after the date
of issuance of this Warrant, the Company shall distribute to all holders of
Common Stock (including any such distribution made in connection with a
consolidation or merger in which the Company is the continuing or surviving
corporation and Common Stock is not changed or exchanged) cash, evidences of
indebtedness, securities or other assets (excluding (A) ordinary course cash
dividends to the extent such dividends do not exceed the Company's retained
earnings and (B) dividends payable in shares of capital stock for

                                       3
<PAGE>

which adjustment is made under Section 2(a)(i), or rights, options or warrants
to subscribe for or purchase securities of the Company), then in each such case
the number of shares of Common Stock to be delivered to such Holder upon
exercise of this Warrant shall be increased so that the Holder thereafter shall
be entitled to receive the number of shares of Common Stock determined by
multiplying the number of shares such Holder would have been entitled to receive
immediately before such record date by a fraction, the denominator of which
shall be the Exercise Price on such record date minus the then fair market value
(as reasonably determined by the Board of Directors of the Company in good
faith) of the portion of the cash, evidences of indebtedness, securities or
other assets so distributed or of such rights or warrants applicable to one
share of the Common Stock (provided that such denominator shall in no event be
less than $.01) and the numerator of which shall be the Exercise Price.

               (iii) Reorganization, etc. If at any time after the date of
issuance of this Warrant any consolidation of the Company with or merger of the
Company with or into any other Person (other than a merger or consolidation in
which the Company is the surviving or continuing corporation and which does not
result in any reclassification of, or change (other than a change in par value
or from par value to no par value or from no par value to par value, or as a
result of a subdivision or combination) in, outstanding shares of either Common
Stock) or any sale, lease or other transfer of all or substantially all of the
assets of the Company to any other person (each, a "Reorganization Event"),
shall be effected in such a way that the holders of the Common Stock shall be
entitled to receive cash, stock, other securities or assets (whether such cash,
stock, other securities or assets are issued or distributed by the Company or
another Person) with respect to or in exchange for the Common Stock, then, upon
exercise of this Warrant, the Holder shall have the right to receive the kind
and amount of cash, stock, other securities or assets receivable upon such
Reorganization Event by a holder of the number of shares of the Common Stock
that such holder would have been entitled to receive upon exercise of this
Warrant had this Warrant been exercised immediately before such Reorganization
Event, subject to adjustments that shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Section 2(a). The Company
shall not enter into any of the transactions referred to in this Section
2(a)(iii) unless effective provision shall be made so as to give effect to the
provisions set forth in this Section 2(a)(iii).

               (iv) Carryover. Notwithstanding any other provision of this
Section 2(a), no adjustment shall be made to the number of shares of either
Common Stock to be delivered to the Holder (or to the Exercise Price) if such
adjustment represents less than .05% of the number of shares to be so delivered,
but any lesser adjustment shall be carried forward and shall be made at the time
and together with the next subsequent adjustment that together with any
adjustments so carried forward shall amount to .05% or more of the number of
shares to be so delivered.

               (v) Exercise Price Adjustment. Whenever the Number Issuable upon
the exercise of the Warrant is adjusted as provided pursuant to this Section
2(a), the Exercise Price per share payable upon the exercise of this Warrant
shall be adjusted by multiplying such Exercise Price immediately prior to such
adjustment by a

                                       4
<PAGE>

fraction, of which the numerator shall be the Number Issuable upon the exercise
of the Warrant immediately prior to such adjustment, and of which the
denominator shall be the Number Issuable immediately thereafter; provided,
however, that the Exercise Price for each Share of the Common Stock shall in no
event be less than the par value of a share of such Common Stock.

            (b) Notice of Adjustment. Whenever the Number Issuable or the
Exercise Price is adjusted as herein provided, the Company shall promptly mail
by first class mail, postage prepaid, to the Holder, notice of such adjustment
or adjustments setting forth the Number Issuable and the Exercise Price after
such adjustment, setting forth a brief statement of the facts requiring such
adjustment and setting forth the computation by which such adjustment was made.

         Section 3. No Redemption. The Company shall not have any right to
redeem any of the Warrants evidenced hereby.

         Section 4. Notice of Certain Events. In case at any time or from time
to time (i) the Company shall declare any dividend or any other distribution to
all holders of Common Stock, (ii) the Company shall authorize the granting to
the holders of Common Stock of rights or warrants to subscribe for or purchase
any additional shares of stock of any class or any other right, (iii) the
Company shall authorize the issuance or sale of any other shares or rights which
would result in an adjustment to the Number Issuable pursuant to Section
2(a)(i), (ii) or (iii), (iv) there shall be any capital reorganization or
reclassification of Common Stock of the Company or consolidation or merger of
the Company with or into another Person, or any sale or other disposition of all
or substantially all the assets of the Company, or (v) there shall be a
voluntary or involuntary dissolution, liquidation or winding up of the Company,
then, in any one or more of such cases the Company shall mail to the Holder at
such Holder's address as it appears on the transfer books of the Company, as
promptly as practicable but in any event at least 10 days prior to the date on
which the transactions contemplated in Section 2(a)(i), (ii) or (iii) a notice
stating (a) the date on which a record is to be taken for the purpose of such
dividend, distribution, rights or warrants or, if a record is not to be taken,
the date as of which the holders of record of either Common Stock to be entitled
to such dividend, distribution, rights or warrants are to be determined, or (b)
the date on which such reclassification, consolidation, merger, sale,
conveyance, dissolution, liquidation or winding up is expected to become
effective. Such notice also shall specify the date as of which it is expected
that the holders of record of the Common Stock shall be entitled to exchange the
Common Stock for shares of stock or other securities or property or cash
deliverable upon such reorganization, reclassification, consolidation, merger,
sale, conveyance, dissolution, liquidation or winding up.

         Section 5. Certain Covenants. The Company covenants and agrees that all
shares of Capital Stock of the Company which may be issued upon the exercise of
the Warrants evidenced hereby will be duly authorized, validly issued and fully
paid and nonassessable. The Company shall at all times reserve and keep
available for issuance upon the exercise of the Warrants, such number of its
authorized but unissued shares of Common Stock as will from time to time be
sufficient to permit the exercise of all

                                       5
<PAGE>

outstanding Warrants, and shall take all action required to increase the
authorized number of shares of Common Stock if at any time there shall be
insufficient authorized but unissued shares of Common Stock to permit such
reservation or to permit the exercise of all outstanding Warrants.

         Section 6. Registered Holder. The persons in whose names this Warrant
Certificate is registered shall be deemed the owner hereof and of the Warrants
evidenced hereby for all purposes. The registered Holder of this Warrant
Certificate, in their capacity as such, shall not be entitled to any rights
whatsoever as a stockholder of the Company, except as herein provided.

         Section 7. Transfer of Warrants. Any transfer of the rights represented
by this Warrant Certificate shall be effected by the surrender of this Warrant
Certificate, along with the form of assignment attached hereto, properly
completed and executed by the registered Holder hereof, at the principal
executive office of the Company in the United States of America, together with
an appropriate investment letter and opinion of counsel, if deemed reasonably
necessary by counsel to the Company to assure compliance with applicable
securities laws. Thereupon, the Company shall issue in the name or names
specified by the registered Holder hereof and, in the event of a partial
transfer, in the name of the registered Holder hereof, a new Warrant Certificate
or Certificates evidencing the right to purchase such number of shares of Common
Stock as shall be equal to the number of shares of Common Stock then purchasable
hereunder.

         Section 8. Denominations. The Company covenants that it will, at its
expense, promptly upon surrender of this Warrant Certificate at the principal
executive office of the Company in the United States of America, execute and
deliver to the registered Holder hereof a new Warrant Certificate or
Certificates in denominations specified by such Holder for an aggregate number
of Warrants equal to the number of Warrants evidenced by this Warrant
Certificate.

         Section 9. Replacement of Warrants. Upon receipt of evidence
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant Certificate and, in the case of loss, theft or destruction, upon
delivery of an indemnity reasonably satisfactory to the Company (in the case of
an insurance company or other institutional investor, its own unsecured
indemnity agreement shall be deemed to be reasonably satisfactory), or, in the
case of mutilation, upon surrender and cancellation thereof, the Company will
issue a new Warrant Certificate of like tenor for a number of Warrants equal to
the number of Warrants evidenced by this Warrant Certificate.

         Section 10. Governing Law. THIS WARRANT CERTIFICATE SHALL BE CONSTRUED
AND ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED
BY, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE
PERFORMED ENTIRELY WITHIN SUCH STATE.

         Section 11. Rights Inure to Registered Holder. The Warrants evidenced
by this Warrant Certificate will inure to the benefit of and be binding upon the
registered

                                       6
<PAGE>

Holder thereof and the Company and their respective successors and permitted
assigns. Nothing in this Warrant Certificate shall be construed to give to any
Person other than the Company and the registered Holder thereof any legal or
equitable right, remedy or claim under this Warrant Certificate, and this
Warrant Certificate shall be for the sole and exclusive benefit of the Company
and such registered Holder. Nothing in this Warrant Certificate shall be
construed to give the registered Holder hereof any rights as a Holder of shares
of either Common Stock until such time, if any, as the Warrants evidenced by
this Warrant Certificate are exercised in accordance with the provisions hereof.

         Section 12. Definitions. For the purposes of this Warrant Certificate,
the following terms shall have the meanings indicated below:

         "Business Day" means any day other than a Saturday, Sunday or other day
on which commercial banks in the City of New York, New York are authorized or
required by law or executive order to close.

         "Capital Stock" of any Person means any and all shares, interests,
participations or other equivalents (however designated) of such Person's
capital stock (or equivalent ownership interests in a Person not a corporation)
whether now outstanding or hereafter issued, including, without limitation, any
rights, warrants or options to purchase such Person's capital stock.

         "Common Stock" shall mean the common stock of the Company.

         "Common Stock Equivalent" means any security or obligation which is by
its terms convertible into or exercisable for shares of Common Stock, including,
without limitation, any option, warrant or other subscription or purchase right
with respect to Common Stock.

         "Current Market Price" per share shall mean, as of the date of
determination, (a) the average of the daily Market Prices under clause (a), (b)
or (c) of the definition thereof, as applicable, of the Common Stock during the
immediately preceding twenty (20) trading days ending on such date, and (b) if
the Common Stock is not then listed or admitted to trading on any national
securities exchange or quoted in the over-the-counter market, then the Market
Price under clause (d) of the definition thereof on such date.

         "Market Price" shall mean, per share of Common Stock, on any date
specified herein: (a) if the Common Stock is listed on a national securities
exchange, the Closing Price per share of Common Stock on such date published in
The Wall Street Journal (National Edition) or, if no such closing price on such
date is published in The Wall Street Journal (National Edition), the average of
the closing bid and asked prices on such date, as officially reported on the
principal national securities exchange on which the Common Stock is then listed
or admitted to trading; or (b) if the Common Stock is not then listed or
admitted to trading on any national securities exchange, but is designated as a
national market system security, the last trading price of the Common Stock on
such date; or (c) if there shall have been no trading on such date or if the

                                       7
<PAGE>

Common Stock is not so designated, the average of the reported closing bid
and asked price of the Common Stock, on such date as shown by NASDAQ and
reported by any member firm of the NYSE selected by the Company; or (d) if none
of (a), (b) or (c) is applicable, a market price per share determined in good
faith by the Board of Directors of the Company, which shall be deemed to be
"Fair Market Value" unless holders of at least 15% of Common Stock issued or
issuable upon exercise of the Warrants request that the Company obtain an
opinion of a nationally recognized investment banking firm chosen by the Company
(who shall bear the expense) and reasonably acceptable to such requesting
holders of the Warrants, in which event the Fair Market Value shall be as
determined by such investment banking firm.

         "NASDAQ" means the National Market System of the National Association
of Securities Dealers, Inc. Automated Quotations System.

         "NYSE" shall mean the New York Stock Exchange, Inc.

         "Person" shall mean any individual, corporation, limited liability
company, partnership, trust, incorporated or unincorporated association, joint
venture, joint stock company, government (or an agency or political subdivision
thereof) or other entity of any kind.

         Section 13. Notices. All notices, demands and other communications
provided for or permitted hereunder shall be made in writing and shall be by
registered or certified first-class mail, return receipt requested, courier
services or personal delivery, (a) if to the Holder of a Warrant, at such
Holder's last known address appearing on the books of the Company; and (b) if to
the Company, at its principal executive office in the United States, or such
other address as shall have been furnished to the party given or making such
notice, demand or other communication. All such notices and communications shall
be deemed to have been duly given: (i) when delivered by hand, if personally
delivered; (ii) when delivered to a courier if delivered by commercial overnight
courier service; and (iii) five (5) Business Days after being deposited in the
mail, postage prepaid, if mailed.

                                       8
<PAGE>

         IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to
be duly executed as of this 27th day of March, 2002.

                                   BLUEFLY, INC.

                                   By:
                                        --------------------------------------
                                        Name:
                                        Title:

                                       9
<PAGE>

                            [Form of Assignment Form]

         [To be executed upon assignment of Warrants] The undersigned hereby
assigns and transfers this Warrant Certificate to ___________________ whose
Social Security Number or Tax ID Number is _________________ and whose record
address is _____________________________________, and irrevocably appoints
________________ as agent to transfer this security on the books of the Company.
Such agent may substitute another to act for such agent.

                                   Signature:

                                   -------------------------------
                                   Signature Guarantee:

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

Date: ___________________________

                                       10

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