Exhibit 10.1

EXECUTION VERSION

AGREEMENT

This Agreement, dated as of April 15, 2010, is by and among Alloy, Inc., a
Delaware corporation (the “Company”), and Matthew A. Drapkin, an individual
resident of New York (“Drapkin”), and the other individuals and entities
signatories hereto (collectively with Drapkin, the “Drapkin Group”).

WHEREAS, the Company and the Drapkin Group have determined that the interests of
the Company and its stockholders would be best served by adding Drapkin to the
Company’s Board of Directors on the terms and conditions set forth in this
Agreement;

NOW, THEREFORE, in consideration of the foregoing premises and the respective
representations, warranties, covenants, agreements and conditions hereinafter
set forth, and intending to be legally bound hereby, the parties hereby agree as
follows:

1. Representations and Warranties of the Company. The Company represents and
warrants as follows as of the date hereof:

(a) The Company has the corporate power and authority to execute, deliver and
carry out the terms and provisions of this Agreement and to consummate the
transactions contemplated hereby.

(b) This Agreement has been duly and validly authorized, executed and delivered
by the Company, constitutes a valid and binding obligation and agreement of the
Company, and is enforceable against the Company in accordance with its terms,
except as enforcement thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or similar laws
affecting the rights of creditors and subject to general equity principles.

(c) The execution, delivery and performance of this Agreement by the Company
does not and will not (i) violate or conflict with any law, rule, regulation,
order, judgment or decree applicable to it, or (ii) result in any breach or
violation of or constitute a default (or an event which with notice or lapse of
time or both could become a default) under or pursuant to, or result in the loss
of a material benefit under, or give any right of termination, amendment,
acceleration or cancellation of, any organizational document, agreement,
contract, commitment, understanding or arrangement to which the Company is a
party or by which it is bound.

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2. Representations and Warranties of the Drapkin Group. Each of the members of
the Drapkin Group severally, and not jointly, represent and warrant with respect
to himself or itself as follows as of the date hereof:

(a) Such party has the power and authority to execute, deliver and carry out the
terms and provisions of this Agreement and to consummate the transactions
contemplated hereby. Such party, if an entity, has the limited partnership or
limited liability company power and authority, as applicable, to execute,
deliver and carry out the terms and provisions of this Agreement and to
consummate the transactions contemplated hereby.

(b) This Agreement has been duly and validly authorized, executed, and delivered
by such member of the Drapkin Group, constitutes a valid and binding obligation
and agreement of such party, and is enforceable against such party in accordance
with its terms, except as enforcement thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or
similar laws affecting the rights of creditors and subject to general equity
principles.

(c) Such party is the “beneficial owner” of a number of shares of Common Stock
as set forth on the cover page relating to such member in the Schedule 13D filed
by the members of the Drapkin Group with the Securities and Exchange Commission
(the “SEC”) on December 18, 2009, as amended through and including Amendment
No. 1 thereto dated March 17, 2010 (the “Schedule 13D”). Except for those
Affiliates and Associates of such member with respect to whom a cover page is
included in the Schedule 13D, no other Affiliate or Associate of such member
beneficially owns any shares of Common Stock.

(d) The execution, delivery and performance of this Agreement by each member of
the Drapkin Group does not and will not (i) violate or conflict with any law,
rule, regulation, order, judgment or decree applicable to him or it, or
(ii) result in any breach or violation of or constitute a default (or an event
which with notice or lapse of time or both could become a default) under or
pursuant to, or result in the loss of a material benefit under, or give any
right of termination, amendment, acceleration or cancellation of, any
organizational document, agreement, contract, commitment, understanding or
arrangement to which he or it is a party or by which he or it is bound.

3. Definitions. For purposes of this Agreement:

(a) The terms “Affiliate” and “Associate” have the respective meanings set forth
in Rule 12b-2 promulgated by the SEC under the Securities Exchange Act of 1934,
as amended (the “Exchange Act”), provided that neither “Affiliate” nor
“Associate” shall include (i) any person that is a publicly held concern and is
otherwise an Affiliate or Associate by reason of the fact that a principal of
any member of the Drapkin Group serves as a member of the board of directors or
similar governing body of such concern, (ii) such member of the board of
directors or other similar governing body of such concern or (iii) any entity
which is an Associate solely by reason of clause (1) of the definition of
Associate in Rule 12b-2; the terms “beneficial owner” and “beneficial ownership”
shall have the

 

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respective meanings as set forth in Rule 13d-3 promulgated by the SEC under the
Exchange Act; and the terms “person” or “persons” shall mean any individual,
corporation (including not-for-profit), general or limited partnership, limited
liability company, joint venture, estate, trust, association, organization or
other entity of any kind or nature.

(b) “Board” means the Board of Directors of the Company.

(c) “Common Stock” means the Common Stock of the Company, $0.01 par value.

(d) “Compensation Committee” means the Compensation Committee of the Board.

(e) “Corporate Governance and Nominating Committee” means the Corporate
Governance and Nominating Committee of the Board.

(f) “Standstill Period” means the period from the date of this Agreement until
the earlier of:

(i) the date on which the Corporate Governance and Nominating Committee notifies
Drapkin pursuant to Section 4(g) below that it has not resolved to nominate
Drapkin or the Additional Director for election to the Board at the 2012 Annual
Meeting;

(ii) the date of the 2012 Annual Meeting; or

(iii) such date, if any, as the Company has materially breached any of its
commitments or obligations set forth in Sections 1, 4(a), 4(b), 4(e), 4(f) and
4(g) of this Agreement (the “Principal Obligations”).

4. Election of Drapkin; Related Matters.

(a) As soon as reasonably practicable but in any event within five business days
from the date first listed above (the “Appointment Date”):

(i) In accordance with the Company’s amended certificate of incorporation and
amended and restated bylaws, the Board shall, if required to meet its
obligations pursuant to this Agreement, adopt a resolution increasing the size
of the Board by one director, to a total of nine directors, effective as of the
Appointment Date;

(ii) In accordance with the Company’s amended certificate of incorporation and
amended and restated bylaws, the Board shall elect Drapkin as a director of the
Company, effective as of the Appointment Date, to serve as a member of the class
of directors scheduled to be next elected at the 2012 Annual Meeting of
Stockholders;

 

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(iii) The Board shall adopt a resolution appointing Drapkin to serve as a member
of both the Compensation Committee and the Corporate Governance and Nominating
Committee, effective as of the Appointment Date, and Drapkin shall continue to
serve on such Committees so long as he continues to be a member of the Board;
and

(iv) The Board shall revise the powers of the Administration Committee to limit
the Administration Committee’s power to authorize acquisitions to acquisitions
which either individually or combined do not exceed $1 million in purchase price
during any fiscal quarter of the Company.

(b) After giving effect to Section 4(a) and a readjustment of the class years of
certain directors, as of the Appointment Date, the Board shall consist of the
following members (or their respective successors duly nominated in accordance
with the Company’s amended certificate, amended and restated bylaws and
Corporate and Governance Committee charter and procedures, and duly elected by
the Company’s stockholders):

 

Class of 2010

  

Class of 2011

  

Class of 2012

Anthony Fiore

   Matthew C. Diamond    Matthew A. Drapkin

Samuel A. Gradess

   Peter M. Graham    Jeffrey Jacobowitz*

James K. Johnson, Jr.

   Richard Perlman    Edward Monnier

 

* Subject to separate agreement

(c) The members of the Drapkin Group who filed the Schedule 13D shall promptly
file an amendment to the Schedule 13D reporting the entry into this agreement,
amending applicable items to conform to their respective obligations hereunder
and appending or incorporating by reference this Agreement as an exhibit
thereto. Such amendment shall also reflect the termination of the “group” within
the meaning of Section 13(d)(3) of the Exchange Act consisting to the Drapkin
Group and John B. Kleinheinz and certain affiliated entities. Such members of
the Drapkin Group shall provide to the Company a reasonable opportunity to
review and comment on such amendment in advance of filing, and shall consider in
good faith the reasonable comments of the Company. The Company and Drapkin shall
discuss in good faith whether or not the Company shall issue a press release
with respect to the execution and delivery of this Agreement by the parties
hereto and the material provisions hereof, which press release, if issued, will
be subject to the mutual agreement of the parties; if the Company files a Form
8-K in lieu of a press release, the Company shall provide to Drapkin a
reasonable opportunity to review and comment on such Form 8-K in advance of its
filing, and shall consider in good faith the reasonable comments of Drapkin.

 

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(d) So long as the Company has complied and is complying with the Principal
Obligations, each member of the Drapkin Group shall cause all shares of Common
Stock owned of record and shall instruct the record owner, in case of all shares
of Common Stock beneficially owned but not of record, by it and their respective
Affiliates, as of the record date for the 2010 Annual Meeting of Stockholders or
the 2011 Annual Meeting of Stockholders, as the case may be, to be present for
quorum purposes and to be voted, and shall cause all shares of Common Stock held
by their respective Associates to be present for quorum purposes and to be
voted, in favor of all directors nominated by the Board for election at the
Company’s 2010 and 2011 Annual Meetings of Stockholders.

(e) Within the one year period following the 2010 Annual Meeting of
Stockholders, the Company and the Drapkin Group shall agree on a qualified,
independent and experienced executive with a strong media background (a
“Qualified Executive”) to be elected by the Board as a tenth member of the Board
in the Class of 2012 (the “Additional Director”), and in connection therewith
and in accordance with the Company’s amended certificate of incorporation and
amended and restated bylaws, the Board shall adopt a resolution increasing the
size of the Board by one director, to a total of ten directors, effective as of
the appointment date of such Additional Director. If the Additional Director
leaves the Board (whether by resignation or otherwise) before the conclusion of
the 2012 Annual Meeting of Stockholders, the Company and the Drapkin Group shall
agree on a replacement Qualified Executive to be elected within 60 days of such
resignation.

(f) The Company agrees that the Board shall only be increased at any time prior
to the conclusion of the 2012 Annual Meeting of Stockholders in connection with
the appointment of Drapkin and the Additional Director.

(g) At least 15 days prior to the first date upon which a notice to the
Secretary of the Company of nominations of persons for election to the Board or
the proposal of business at the 2012 Annual Meeting would be considered timely
under the bylaws of the Company, the Corporate Governance and Nominating
Committee will notify Drapkin whether it has resolved to recommend Drapkin and
the Additional Director for re-election to the Board at the 2012 Annual Meeting.

(h) BD Media Investors LP hereby withdraws its letter dated March 17, 2010, to
the Secretary of the Company providing notice of its intention to nominate
persons for election as directors at the 2010 Annual Meeting of Stockholders and
its demand pursuant to Section 220 of the Delaware General Corporation Law.

 

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5. Standstill.

Each of the members of the Drapkin Group agrees that, during the Standstill
Period and provided that Company has complied and is complying with the
Principal Obligations, he or it will not, and he or it will cause each of such
person’s Affiliates or agents or other persons acting on his or its behalf not
to, and will cause his or its respective Associates not to:

(a) submit any stockholder proposal (pursuant to Rule 14a-8 promulgated by the
SEC under the Exchange Act or otherwise) or any notice of nomination or other
business for consideration, or nominate any candidate for election to the Board,
other than as expressly permitted by this Agreement ;

(b) form, join in or in any other way participate in a “partnership, limited
partnership, syndicate or other group” within the meaning of Section 13(d)(3) of
the Exchange Act with respect to the Common Stock or deposit any shares of
Common Stock in a voting trust or similar arrangement or subject any shares of
Common Stock to any voting agreement or pooling arrangement, other than solely
with other members of the Drapkin Group or one or more Affiliates of a member of
the Drapkin Group with respect to the Common Stock currently owned as set forth
in Section 2(c) of this Agreement or to the extent such a group may be deemed to
result with the Company or any of its Affiliates as a result of this Agreement;

(c) solicit proxies or written consents of stockholders, or otherwise conduct
any nonbinding referendum with respect to Common Stock, or make, or in any way
participate in, any “solicitation” of any “proxy” within the meaning of
Rule 14a-1 promulgated by the SEC under the Exchange Act to vote, or advise,
encourage or influence any person with respect to voting, any shares of Common
Stock with respect to any matter, or become a “participant” in any contested
“solicitation” for the election of directors with respect to the Company (as
such terms are defined or used under the Exchange Act and the rules promulgated
by the SEC thereunder), other than a “solicitation” or acting as a “participant”
in support of all of the nominees of the Board at the 2010 and 2011 Annual
Meetings of Stockholders;

(d) seek, in any capacity other than as a member of the Board, to call, or to
request the call of, a special meeting of the stockholders of the Company, or
seek to make, or make, a stockholder proposal at any meeting of the stockholders
of the Company or make a request for a list of the Company’s stockholders (or
otherwise induce, encourage or assist any other person to initiate or pursue
such a proposal or request) or otherwise acting alone, or in concert with
others, seek to control or influence the governance or policies of the Company,
except as expressly permitted by this Agreement;

(e) effect or seek to effect, in any capacity other than as a member of the
Board (including, without limitation, by entering into any discussions,
negotiations, agreements or understandings with any third person), offer or
propose (whether publicly or otherwise) to effect, or cause or participate in,
or in any way assist or facilitate any other person to effect or seek, offer or
propose (whether publicly or

 

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otherwise) to effect or cause or participate in (i) any acquisition of any
material assets or businesses of the Company or any of its subsidiaries,
(ii) any tender offer or exchange offer, merger, acquisition or other business
combination involving the Company or any of its subsidiaries, or (iii) any
recapitalization, restructuring, liquidation, dissolution or other extraordinary
transaction with respect to the Company or any of its subsidiaries;

(f) publicly disclose, or cause or facilitate the public disclosure (including
without limitation the filing of any document or report with the SEC or any
other governmental agency or any disclosure to any journalist, member of the
media or securities analyst) of, any intent, purpose, plan or proposal to obtain
any waiver, or consent under, or any amendment of, any of the provisions of
Section 4(d) or this Section 5, or otherwise seek (in any manner that would
require public disclosure by any of the members of the Drapkin Group or their
Affiliates or Associates) to obtain any waiver, consent under, or amendment of,
any provision of this Agreement;

(g) publicly disparage any member of the Board or management of the Company;

(h) enter into any arrangements, understandings or agreements (whether written
or oral) with, or advise, finance, assist or encourage, any other person that
engages, or offers or proposes to engage, in any of the foregoing; or

(i) take or cause or induce or assist others to take any action inconsistent
with any of the foregoing.

It is understood and agreed that this Agreement shall not be deemed to prohibit
Drapkin from engaging in any lawful act in his capacity as a director of the
Company.

6. Codes of Business Conduct and Ethics and Insider Trading Policy. Drapkin has
reviewed the Company’s Codes of Business Conduct and Ethics and Insider Trading
Policy and agrees to abide by the provisions thereof during his service as a
director of the Company. The members of the Drapkin Group acknowledge that they
are aware that the United States securities laws prohibit any person who has
material non-public information about a company from purchasing or selling such
securities of such company, or from communicating such information to any other
person under circumstances in which it is reasonably foreseeable that such
person is likely to purchase or sell such securities.

7. Questionnaires. Drapkin has accurately completed the form of questionnaire
provided by the Company for its use in connection with the preparation of the
Company’s proxy statement.

8. Compensation. Drapkin shall be compensated for his service as a director and
shall be reimbursed for his expenses on the same basis as all other non-employee
directors of the Company are compensated and shall be eligible to be granted
equity-based compensation on the same basis as all other non-employee directors
of the Company.

 

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9. Indemnification and Insurance. Drapkin shall be entitled to the same rights
of indemnification as the other directors of the Company as such rights may
exist from time to time. The Company shall, promptly after their election, take
such action, if any, as may be necessary to add Drapkin to the Company’s
directors and officers’ liability insurance policy as an Insured Person.

10. Non-Disparagement. During the Standstill Period and for a period of one year
thereafter the Company shall not publicly disparage any member of the Drapkin
Group or any member of the management of the Drapkin Group.

11. Specific Performance. Each party hereto acknowledges and agrees, on behalf
of itself and its Affiliates, that irreparable harm would occur in the event any
of the provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties will be entitled to specific relief hereunder, including, without
limitation, an injunction or injunctions to prevent and enjoin breaches of the
provisions of this Agreement and to enforce specifically the terms and
provisions hereof in any state or federal court in the State of Delaware, in
addition to any other remedy to which they may be entitled at law or in equity.
Any requirements for the securing or posting of any bond with such remedy are
hereby waived.

12. Jurisdiction. Each party hereto agrees, on behalf of itself and its
Affiliates, that any actions, suits or proceedings arising out of or relating to
this Agreement or the transactions contemplated hereby will be brought solely
and exclusively in any state or federal court in the State of Delaware (and the
parties agree on behalf of themselves and their respective Affiliates not to
commence any action, suit or proceeding relating thereto except in such courts),
and further agrees that service of any process, summons, notice or document by
U.S. registered mail to the respective addresses set forth in Section 16 of this
Agreement will be effective service of process for any such action, suit or
proceeding brought against any party in any such court. Each party, on behalf of
itself and its Affiliates, irrevocably and unconditionally waives any objection
to the laying of venue of any action, suit or proceeding arising out of this
Agreement or the transactions contemplated hereby, in the state or federal
courts in the State of Delaware, and hereby further irrevocably and
unconditionally waives and agrees not to plead or claim in any such court that
any such action, suit or proceeding brought in any such court has been brought
in an improper or inconvenient forum.

13. Applicable Law. This Agreement shall be governed in all respects, including
validity, interpretation and effect, by the laws of the State of Delaware
applicable to contracts executed and to be performed wholly within such state,
without giving effect to the choice of law principles of such state.

14. Counterparts. This Agreement may be executed in two or more counterparts
which together shall constitute a single agreement.

 

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15. Entire Agreement; Amendment and Waiver; Successors and Assigns. This
Agreement contains the entire understanding of the parties hereto with respect
to, and supersedes all prior agreements relating to, its subject matter. There
are no restrictions, agreements, promises, representations, warranties,
covenants or undertakings between the parties other than those expressly set
forth herein. This Agreement may be amended only by a written instrument duly
executed by the parties hereto or their respective successors or assigns. No
failure on the part of any party to exercise, and no delay in exercising, any
right, power or remedy hereunder shall operate as a waiver thereof, nor shall
any single or partial exercise of such right, power or remedy by such party
preclude any other or further exercise thereof or the exercise of any other
right, power or remedy. All remedies hereunder are cumulative and are not
exclusive of any other remedies provided by law. The terms and conditions of
this Agreement shall be binding upon, inure to the benefit of, and be
enforceable by the parties hereto and their respective successors, heirs,
executors, legal representatives, and assigns.

16. Notices. All notices, consents, requests, instructions, approvals and other
communications provided for herein and all legal process in regard hereto shall
be in writing and shall be deemed validly given, made or served, (a) if given by
telecopy, when such telecopy is transmitted to the telecopy number set forth
below, or to such other telecopy number as is provided by a party to this
Agreement to the other parties pursuant to notice given in accordance with the
provisions of this Section, and the appropriate confirmation is received, or
(b) if given by any other means, when actually received during normal business
hours at the address specified in this Section, or at such other address as is
provided by a party to this Agreement to the other parties pursuant to notice
given in accordance with the provisions of this Section:

if to the Company:

Alloy, Inc.

151 West 26th Street

11th Floor

New York, NY 10001

Facsimile: (212) 244-4311

Attention: Chief Executive Officer

with a copy to:

Kramer Levin Naftalis & Frankel LLP

1177 Avenue of the Americas

New York, NY 10036

Facsimile: (212) 715-8000

Attention: Richard H. Gilden

 

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if to the Drapkin Group or any member thereof:

Matthew A. Drapkin

652 Broadway

3rd Floor

New York, NY 10012

Facsimile: (214) 756-6079

Boies, Schiller & Flexner LLP

575 Lexington Avenue, 7th Floor

New York, NY 10022

Facsimile: (212) 446-2350

Attention: Richard J. Birns

17. No Third-Party Beneficiaries. Nothing in this Agreement is intended to
confer on any person other than the parties hereto or their respective
successors and assigns, and their respective Affiliates to the extent provided
herein, any rights, remedies, obligations or liabilities under or by reason of
this Agreement.

[Signature page follows.]

 

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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the
duly authorized signatories of the parties as of the date first written above.

 

ALLOY, INC. By:   /s/ Matthew Diamond   Matthew Diamond   Chief Executive
Officer

SRB MANAGEMENT, L.P. By:   BC Advisors, LLC, its general partner   By:   /s/
Steven R. Becker     Name: Steven R. Becker     Title: Co-managing Member BD
MEDIA INVESTORS LP By:   SRB Management, L.P., its general partner   By:   BC
Advisors, LLC, its general partner     By:   /s/ Steven R. Becker       Name:
Steven R. Becker       Title: Co-managing Member

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SRB GREENWAY OPPORTUNITY FUND, (QP), L.P. By:   SRB Management, L.P., its
general partner   By:   BC Advisors, LLC, its general partner     By:   /s/
Steven R. Becker       Name: Steven R. Becker       Title: Co-managing Member
SRB GREENWAY OPPORTUNITY FUND, L.P. By:   SRB Management, L.P., its general
partner   By:   BC Advisors, LLC, its general partner     By:   /s/ Steven R.
Becker       Name: Steven R. Becker       Title: Co-managing Member

BC ADVISORS, LLC By:   /s/ Steven R. Becker   Name: Steven R. Becker   Title:
Co-managing Member

STEVEN R. BECKER /s/ Steven R. Becker MATTHEW A. DRAPKIN /s/ Matthew A. Drapkin