Exhibit 10.3.2

CONTINUING GUARANTY

(Business Organization)
Pennsylvania

     
GUARANTOR:
  ALLOY, INC., ax corporationo general partnershipo limited partnershipo
 limited liability companyo                organized under the laws of the State
of Delaware. Chief executive office/principal residence: 435 Hudson Street, New
York, New York 10014.
BORROWER:
  dELiA*s DISTRIBUTION COMPANY, ax corporationo general partnershipo  limited
partnershipo limited liability company               , organized under the laws
of the State of Delaware. Chief executive office/principal residence: 435 Hudson
Street, New York, New York 10014.
BANK:
  Manufacturers and Traders Trust Company, a New York banking corporation, with
banking offices located at One M&T Plaza, Buffalo, New York 14240 Attention:
Office of the General Counsel.

      1. Guaranty.

      (a) Guarantor, intending to be legally bound, hereby unconditionally
guarantees the full and prompt payment and performance of any and all of
Borrower’s Obligations (as defined below) to the Bank when due, whether at
stated maturity, by acceleration or otherwise. As used in this Guaranty, the
term “Obligations” shall mean any and all obligations, indebtedness and other
liabilities of Borrower to the Bank now or hereafter existing, of every kind and
nature and all accrued and unpaid interest thereon and all Expenses (as defined
below) including without limitation, whether such obligations, indebtedness and
other liabilities (i) are direct, contingent, liquidated, unliquidated, secured,
unsecured, matured or unmatured; (ii) are pursuant to a guaranty or surety in
favor of the Bank; (iii) were originally contracted with the Bank or with
another party (including obligations under a guaranty or surety originally in
favor of such other party); (iv) are contracted by Borrower alone or jointly
with one or more other parties; (v) are or are not evidenced by a writing;
(vi) are renewed, replaced, modified or extended; and (vii) are periodically
extinguished and subsequently reincurred or reduced and thereafter increased.
Guarantor will pay or perform its obligations under this Guaranty upon demand.
This Guaranty is and is intended to be a continuing guaranty of payment (not
collection) of the Obligations (irrespective of the aggregate amount thereof and
whether or not the Obligations from time to time exceeds the amount of this
Guaranty, if limited), independent of, in addition and without modification to,
and does not impair or in any way affect, any other guaranty, indorsement, or
other agreement in connection with the Obligations, or in connection with any
other indebtedness or liability to the Bank or collateral held by the Bank
therefor or with respect thereto, whether or not furnished by Guarantor.
Guarantor understands that the Bank can bring an action under this Guaranty
without being required to exhaust other remedies or demand payment first from
other parties.

      (b) Guarantor acknowledges the receipt of valuable consideration for this
Guaranty and acknowledges that the Bank is relying on this Guaranty in making a
financial accommodation to Borrower, whether a commitment to lend, extension,
modification or replacement of, or forbearance with respect to, any Obligation,
cancellation of another guaranty, purchase of Borrower’s assets, or other
valuable consideration.

      2. Continuing, Absolute, Unconditional. This Guaranty is irrevocable,
absolute, continuing, unconditional and general without any limitation.

      3. Guarantor’s Waivers & Authorizations.

      (a) Guarantor’s obligations shall not be released, impaired or affected in
any way including by any of the following, all of which Guarantor hereby waives
(i) any bankruptcy, reorganization or insolvency under any law of Borrower or
that of any other party, or by any action of a trustee in any such proceeding;
(ii) any new agreements or obligations of Borrower or any other party with the
Bank; (iii) any adjustment, compromise or release of any Obligations of
Borrower, by the Bank or any other party; the existence or nonexistence or order

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of any filings, exchanges, releases, impairment or sale of, or failure to
perfect or continue the perfection of a security interest in any collateral for
the Obligations; (iv) any failure of Guarantor to receive notice of any intended
disposition of such collateral; (v) any fictitiousness, incorrectness,
invalidity or unenforceability, for any reason, of any instrument or other
agreement which may evidence any Obligation; (vi) any composition, extension,
stay or other statutory relief granted to Borrower including, without
limitation, the expiration of the period of any statute of limitations with
respect to any lawsuit or other legal proceeding against Borrower or any person
in any way related to the Obligations or a part thereof or any collateral
therefor; (vii) any change in form of organization, name, membership or
ownership of Borrower or Guarantor; (viii) any refusal or failure of the Bank or
any other person prior to the date hereof or hereafter to grant any additional
loan or other credit accommodation to Borrower or the Bank’s or any other
party’s receipt of notice of such refusal or failure; (ix) any setoff, defense
or counterclaim of Borrower with respect to the obligations or otherwise
arising, either directly or indirectly, in regard to the Obligations; or (x) any
other circumstance that might otherwise constitute a legal or equitable defense
to Guarantor’s obligations under this Guaranty.

      (b) The Guarantor waives acceptance, assent and all rights of notice or
demand including without limitation (i) notice of acceptance of this Guaranty,
of Borrower’s default or nonpayment of any Obligation, and of changes in
Borrower’s financial condition; (ii) presentment, protest, notice of protest and
demand for payment; (iii) notice that any Obligations has been incurred or of
the reliance by the Bank upon this Guaranty; and (iv) any other notice, demand
or condition to which Guarantor might otherwise be entitled prior to the Bank’s
reliance on or enforcement of this Guaranty. Guarantor further authorizes the
Bank, without notice, demand or additional reservation of rights against
Guarantor and without affecting Guarantor’s obligations hereunder, from time to
time: (i) to renew, refinance, modify, subordinate, extend, increase,
accelerate, or otherwise change the time for payment of, the terms of or the
interest on the Obligations or any part thereof; (ii) to accept and hold
collateral from any party for the payment of any or all of the Obligations, and
to exchange, enforce or refrain from enforcing, or release any or all of such
collateral; (iii) to accept any indorsement or guaranty of any or all of the
Obligations or any negotiable instrument or other writing intended to create an
accord and satisfaction with respect to any or all of the Obligations; (iv) to
release, replace or modify the obligation of any indorser or guarantor, or any
party who has given any collateral for any of all of the Obligations, or any
other party in any way obligated to pay any or all of the Obligations, and to
enforce or refrain from enforcing, or compromise or modify, the terms of any
obligation of any such indorser, guarantor or party; (v) to dispose of any and
all collateral securing the Obligations in any manner as the Bank, in its sole
discretion, may deem appropriate, and to direct the order and the enforcement of
any and all indorsements and guaranties relating to the Obligations in the
Bank’s sole discretion; and (vi) to determine the manner, amount and time of
application of payments and credits, if any, to be made on all or any part of
the Obligations including, without limitation, if this Guaranty is limited in
amount, to make any such application to Obligations, if any, in excess of the
amount of this Guaranty.

      (c) Notwithstanding any other provision in this Guaranty, Guarantor
irrevocably waives, without notice, any right he or she may have at law or in
equity (including without limitation any law subrogating Guarantor to the rights
of the Bank) to seek contribution, indemnification or any other form of
reimbursement from Borrower or any other obligor or guarantor of the Obligations
for any disbursement made under this Guaranty or otherwise.

      4. Termination. This Guaranty shall remain in full force and effect as to
each Guarantor until actual receipt by the Bank officer responsible for
Borrower’s relationship with the Bank of written notice of Guarantor’s intent to
terminate (or Guarantor’s death or incapacity) plus the lapse of a reasonable
time for the Bank to act on such notice (the “Receipt of Notice”); provided,
however, this Guaranty shall remain in full force and effect thereafter until
all Obligations outstanding, or contracted or committed for (whether or not
outstanding), before such Receipt of Notice by the Bank, and any extensions,
renewals or replacements thereof (whether made before or after such Receipt of
Notice), together with interest accruing thereon after such Receipt of Notice,
shall be finally and irrevocably paid in full. Discontinuance of this Guaranty
as to one Guarantor shall not operate as a discontinuance hereof as to any other
guarantor. Payment of all of the Obligations from time to time shall not operate
as a discontinuance of this Guaranty, unless a Receipt of Notice as provided
above has been received by the Bank. Guarantor agrees that, to the extent that
Borrower

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makes a payment or payments to the Bank on the Obligations, or the Bank receives
any proceeds of collateral to be applied to the Obligations, which payment or
payments or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside or otherwise are required to be repaid to
Borrower, its estate, trustee, receiver or any other party, including, without
limitation, under any bankruptcy law, state or federal law, common law or
equitable cause, then to the extent of such repayment, the obligation or part
thereof which has been paid, reduced or satisfied by such amount shall be
reinstated and continued in full force and effect as of the date such initial
payment, reduction or satisfaction occurred, notwithstanding any contrary action
which may have been taken by the Bank in reliance upon such payment or payments.
As of the date any payment or proceeds of collateral are returned, the statute
of limitations shall start anew with respect to any action or proceeding by the
Bank against Guarantor under this Guaranty. Likewise, any acknowledgment,
reaffirmation or payment, by Borrower or any third party, of any portion of the
Obligations, shall be deemed to be made as agent for the Guarantor, strictly for
the purposes of tolling the running of (and/or preventing the operation of) the
applicable statute of limitations with respect to any action or proceeding by
the Bank against Guarantor under this Guaranty.

      5. Expenses. Guarantor agrees to reimburse the Bank on demand for all the
Bank’s expenses, damages and losses of any kind or nature, including without
limitation costs of collection and actual attorneys’ fees and disbursements
whether for internal or external counsel incurred by the Bank in attempting to
enforce this Guaranty, collect any of the Obligations including any workout or
bankruptcy proceedings or other legal proceedings or appeal, realize on any
collateral, defense of any action under the prior paragraph or for any other
purpose related to the Obligations (collectively, “Expenses”). Expenses will
accrue interest at the highest default rate in any instrument evidencing the
Obligations until payment is actually received by the Bank.

      6. Financial and Other Information. Guarantor shall promptly deliver to
the Bank copies of all annual reports, proxy statements and similar information
distributed to shareholders, partners or members and of all filings with the
Securities and Exchange Commission and the Pension Benefit Guaranty Corporation
and shall provide in form satisfactory to the Bank: (i) within sixty days after
the end of each of its first three fiscal quarters, consolidating and
consolidated statements of income and cash flows for the quarter, for the
corresponding quarter in the previous fiscal year and for the period from the
end of the previous fiscal year, with a consolidating and consolidated balance
sheet as of the quarter end; and (ii) within ninety days after the end of each
fiscal year, consolidating and consolidated statements of Guarantor’s income and
cash flows and its consolidating and consolidated balance sheet as of the end of
such fiscal year, setting forth comparative figures for the preceding fiscal
year and to be:

         
xaudited
  oreviewed   ocompiled

by KMPG or another nationally recognized firm of certified public accountants or
by an independent certified public accountant acceptable to the Bank; all such
statements shall be certified by Guarantor’s chief financial officer or partner
to be correct, not misleading and in accordance with Guarantor’s records and to
present fairly the results of Guarantor’s operations and cash flows and if
annual its financial position at year end in conformity with generally accepted
accounting principles. If no box is checked, Guarantor shall deliver financial
statements and information in the form and at the times satisfactory to the
Bank. Guarantor represents that its assets are not subject to any liens,
encumbrances or contingent liabilities except as fully disclosed to the Bank in
such statements. Guarantor authorizes the Bank from time to time to obtain,
verify and review all financial data deemed appropriate by the Bank in
connection with this Guaranty and the Obligations, including without limitation
credit reports from agencies. Guarantor understands this Guaranty and has
satisfied itself as to its meaning and consequences and acknowledges that it has
made its own arrangements for keeping informed of changes or potential changes
affecting the Borrower including the Borrower’s financial condition.

      7. Security; Right of Setoff. As further security for payment of the
Obligations, Expenses and any other obligations of Guarantor to the Bank,
Guarantor hereby grants to the Bank a security interest in all money, securities
and other property of Guarantor in the actual or constructive possession or
control of the Bank or its affiliates including without limitation all deposits
and other accounts owing at any time by the Bank or any of

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its affiliates in any capacity to Guarantor in any capacity (collectively,
“Property”). The Bank shall have the right to set off Guarantor’s Property
against any of Guarantor’s obligations to the Bank. Such set-off shall be deemed
to have been exercised immediately at the time the Bank or such affiliate elect
to do so. The Bank shall also have all of the rights and remedies of a secured
party under the Uniform Commercial Code, as the same may be in effect in the
Commonwealth of Pennsylvania, as amended from time to time, in addition to those
under this Guaranty and other applicable law and agreements.

      8. No Transfer of Assets. Guarantor shall not transfer, reinvest or
otherwise dispose of its assets in a manner or to an extent that would or might
impair Guarantor’s ability to perform its obligations under this Guaranty.

      9. Nonwaiver by the Bank; Miscellaneous. This Guaranty is intended by
Guarantor to be the final, complete and exclusive expression of the agreement
between Guarantor and the Bank. This Guaranty may be assigned by the Bank, shall
inure to the benefit of the Bank and its successors and assigns, and shall be
binding upon Guarantor and his or her legal representative, successors and
assigns and any participation may be granted by the Bank herein in connection
with the assignment or granting of a participation by the Bank in the
Obligations or any part thereof. All rights and remedies of the Bank are
cumulative, and no such right or remedy shall be exclusive of any other right or
remedy. This Guaranty does not supersede any other guaranty or security granted
to the Bank by Guarantor or others (except as to Guarantor’s Waiver of
Subrogation rights above). No single, partial or delayed exercise by the Bank of
any right or remedy shall preclude exercise by the Bank at any time at its sole
option of the same or any other right or remedy of the Bank without notice.
Guarantor expressly disclaims any reliance on any course of dealing or usage of
trade or oral representation of the Bank including, without limitation,
representations to make loans to Borrower or enter into any other agreement with
Borrower or Guarantor. No course of dealing or other conduct, no oral agreement
or representation made by the Bank or usage of trade shall operate as a waiver
of any right or remedy of the Bank. No waiver or amendment of any right or
remedy of the Bank or release by the Bank shall be effective unless made
specifically in writing by the Bank. Each provision of this Guaranty shall be
interpreted as consistent with existing law and shall be deemed amended to the
extent necessary to comply with any conflicting law. If any provision
nevertheless is held invalid, the other provisions shall remain in effect.
Guarantor agrees that in any legal proceeding, a copy of this Guaranty kept in
the Bank’s course of business may be admitted into evidence as an original.
Captions are solely for convenience and not part of the substance of this
Guaranty. If this Guaranty is limited pursuant to Paragraph 2 hereof, until the
Obligations are indefeasibly paid in full, the Guaranteed Amount shall not be
reduced in any manner whatsoever by any amounts which the Bank may realize
before or after maturity of the Obligations (by acceleration, demand or
otherwise), as a result of payments made by or on behalf of Borrower or by or on
behalf of any other person or entity other than Guarantor primarily or
secondarily liable for the Obligations or any part thereof, or otherwise
credited to Borrower or such person or entity, or as a result of the exercise of
the Bank’s rights with respect to any collateral for the Obligations or any part
thereof. Payments made to the Bank by Guarantor (other than, directly or
indirectly, from collateral or other persons or entities liable for any portion
of the Obligations) after maturity of the Obligations, by acceleration or
otherwise, shall reduce the Guaranteed Amount.

      10. Joint and Several. If there is more than one Guarantor, each Guarantor
jointly and severally guarantees the payment and performance in full of all
obligations under this Guaranty and the term “Guarantor” means each as well as
all of them. Guarantor also agrees that the Bank need not seek payment from any
source other than the undersigned Guarantor. This Guaranty is a primary
obligation. Guarantor’s obligations hereunder are separate and independent of
Borrower’s, and a separate action may be brought against Guarantor whether or
not action is brought or joined against or with Borrower or any other party.

      11. Authorization. Guarantor certifies that it is an entity in the form
described above duly organized and in good standing under the laws of the State
of its organization and duly authorized to do business in each State material to
the conduct of its business. Guarantor has determined that the execution of this
Guaranty will be in its best interests, to its direct benefit, incidental to its
powers, and in furtherance of its duly acknowledged purposes and objectives.
Execution of this Guaranty by the persons signing below has been authorized by
all necessary corporate action, including directors’ consent or (as appropriate)
is authorized by

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its partnership agreement or governing instrument. Guarantor’s chief executive
office is located at the above address.

      12. Notices. Any demand or notice hereunder or under any applicable law
pertaining hereto shall be in writing and duly given if delivered to Guarantor
(at its address on the Bank’s records) or to the Bank (at the address on page
one and separately to the Bank officer responsible for Borrower’s relationship
with the Bank). Such notice or demand shall be deemed sufficiently given for all
purposes when delivered (i) by personal delivery and shall be deemed effective
when delivered, or (ii) by mail or courier and shall be deemed effective three
(3) business days after deposit in an official depository maintained by the
United States Post Office for the collection of mail or one (1) business day
after delivery to a nationally recognized overnight courier service (e.g.,
Federal Express). Notice by e-mail is not valid notice under this or any other
agreement between Guarantor and the Bank.

      13. Governing Law and Jurisdiction. This Guaranty has been delivered to
and accepted by the Bank and will be deemed to be made in the Commonwealth of
Pennsylvania. Except as otherwise provided under federal law, this Guaranty will
be interpreted in accordance with the laws of the Commonwealth of Pennsylvania
excluding its conflict of laws rules. GUARANTOR HEREBY IRREVOCABLY CONSENTS TO
THE EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT IN THE COMMONWEALTH OF
PENNSYLVANIA IN A COUNTY OR JUDICIAL DISTRICT WHERE THE BANK MAINTAINS A BRANCH
AND CONSENTS THAT THE BANK MAY EFFECT ANY SERVICE OF PROCESS IN THE MANNER AND
AT GUARANTOR’S ADDRESS SET FORTH ABOVE FOR PROVIDING NOTICE OR DEMAND; PROVIDED
THAT NOTHING CONTAINED IN THIS GUARANTY WILL PREVENT THE BANK FROM BRINGING ANY
ACTION, ENFORCING ANY AWARD OR JUDGMENT OR EXERCISING ANY RIGHTS AGAINST
GUARANTOR INDIVIDUALLY, AGAINST ANY SECURITY OR AGAINST ANY PROPERTY OF
GUARANTOR WITHIN ANY OTHER COUNTY, STATE OR OTHER FOREIGN OR DOMESTIC
JURISDICTION. Guarantor acknowledges and agrees that the venue provided above is
the most convenient forum for both the Bank and Guarantor. Guarantor waives any
objection to venue and any objection based on a more convenient forum in any
action instituted under this Guaranty.

      14. Waiver of Jury Trial. GUARANTOR AND THE BANK HEREBY KNOWINGLY,
VOLUNTARILY, AND INTENTIONALLY WAIVE ANY RIGHT TO TRIAL BY JURY GUARANTOR AND
THE BANK MAY HAVE IN ANY ACTION OR PROCEEDING, IN LAW OR IN EQUITY, IN
CONNECTION WITH THIS GUARANTY OR THE TRANSACTIONS RELATED HERETO. GUARANTOR
REPRESENTS AND WARRANTS THAT NO REPRESENTATIVE OR AGENT OF THE BANK HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE BANK WILL NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THIS JURY TRIAL WAIVER. GUARANTOR ACKNOWLEDGES THAT
THE BANK HAS BEEN INDUCED TO ENTER INTO THIS GUARANTY BY, AMONG OTHER THINGS,
THE PROVISIONS OF THIS SECTION.

      15. Power to Confess Judgment. FOLLOWING THE OCCURRENCE AND DURING THE
CONTINUANCE OF AN EVENT OF DEFAULT, GUARANTOR HEREBY EMPOWERS ANY ATTORNEY OF
ANY COURT OF RECORD TO APPEAR FOR GUARANTOR AND, WITH OR WITHOUT COMPLAINT
FILED, CONFESS JUDGMENT, OR A SERIES OF JUDGMENTS, AGAINST GUARANTOR IN FAVOR OF
THE BANK OR ANY HOLDER HEREOF FOR ALL AMOUNTS DUE HEREUNDER, TOGETHER WITH COSTS
OF SUIT AND A REASONABLE ATTORNEY’S FEE, AND FOR DOING SO THIS GUARANTY OR A
COPY VERIFIED BY AFFIDAVIT SHALL BE A SUFFICIENT WARRANT. GUARANTOR HEREBY
FOREVER WAIVES AND RELEASES ALL PROCEDURAL ERRORS IN SAID PROCEEDINGS AND ALL
RELIEF FROM ANY AND ALL APPRAISEMENT, STAY OR EXEMPTION LAWS OF ANY STATE NOW IN
FORCE OR HEREAFTER ENACTED. INTEREST ON ANY SUCH JUDGMENT SHALL ACCRUE AT THE
DEFAULT RATE SET FORTH IN ANY OF THE DOCUMENTS EVIDENCING THE OBLIGATIONS OF
BORROWER. NO SINGLE EXERCISE OF THE FOREGOING POWER TO CONFESS JUDGMENT, OR A
SERIES OF JUDGMENTS, SHALL BE DEEMED TO EXHAUST THE POWER, WHETHER OR NOT ANY
SUCH EXERCISE SHALL BE HELD BY ANY COURT TO BE INVALID, VOIDABLE,

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OR VOID, BUT THE POWER SHALL CONTINUE UNDIMINISHED AND IT MAY BE EXERCISED FROM
TIME TO TIME AS OFTEN AS THE BANK SHALL ELECT UNTIL SUCH TIME AS THE BANK SHALL
HAVE RECEIVED PAYMENT IN FULL OF ALL AMOUNTS DUE HEREUNDER.

      16. Guarantor acknowledges that it has read and understands all the
provisions of this Guaranty, including the Confession of Judgment, Governing
Law, Jurisdiction and Waiver of Jury Trial, and has been advised by counsel as
necessary or appropriate.

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      ATTEST:

By:           /s/ Samuel A. Gradess

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Title:        Secretary

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TIN# 04-3310676

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Date: April 20, 2004   GUARANTOR:

ALLOY, INC.

By:           /s/ James K. Johnson, Jr.

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Title:        President

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ACKNOWLEDGEMENT

      STATE OF NEW YORK
COUNTY OF NEW YORK     :SS.    

      On the 20th day of April in the year 2004, before me, the undersigned, a
Notary Public in and for said Commonwealth, personally appeared James K.
Johnson, Jr., personally know to me or proved to me on the basis of satisfactory
evidence to be the individual(s) whose name(s) is (are) subscribed to the within
instrument and acknowledged to me that he/she/they executed the same in
his/her/their capacity(ies), and that by his/her/their signature(s) on the
instrument, the individual(s), or the person upon behalf of which the
individual(s) acted, executed the instrument.

  /s/ Gina R. DiGioia  

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  Notary Public

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