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                                                                    EXHIBIT 10.1

                THIRD LEASE MODIFICATION AND EXTENSION AGREEMENT
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     Third Lease Modification and Extension Agreement ("Third Modification")
dated as of August 31, 2002 between ABNER PROPERTIES COMPANY, c/o Williams USA
Realty Services, Inc., 380 Madison Avenue, New York, New York 10017,
(hereinafter referred to as "Landlord") and ALLOY, INC. (f/k/a Alloy On1ine,
Inc.), a Delaware corporation, having an office at 151 West 26th Street, New
York, New York (hereinafter referred to as "Tenant").

                                   WITNESSETH:
                                   -----------

     WHEREAS, by a lease agreement dated as of November 2, 1999, as modified by
that certain First Lease Modification Agreement dated December 18, 2000, which
lease was further modified by that certain Second Lease Modification Agreement
dated January 28, 2002, which lease was further modified by that certain Letter
Agreement dated April 16, 2002, collectively hereinafter referred to as the
"Lease", Tenant leased from Landlord the entire rentable area of the eleventh
(11th) floor (the "Original Demised Premises") and a portion of the tenth (10th)
floor known as 10th Floor Rear (the "First Additional Space") and another
portion of the tenth (10th) floor known as 10th Floor South (the "Second
Additional Space"), hereinafter, collectively referred to as the "premises" or
'Demised Premises," as now divided and occupied, in the building known as 151
West 26th Street, New York, New York (the "Building") for a term which is to
expire on February28, 2010;

     WHEREAS, Landlord and Tenant now desire to amend the Lease to (i) provide
for Tenant to rent additional space consisting of the entire rentable area of
the ninth (9th) floor in the Building ("Third Additional Space") and shown on
the attached floor plan; (ii) extend the term of the Lease through and including
the Third Additional Space Expiration Date, as such term is defined herein; and
(iii) otherwise modify the terms of the Lease as provided below;

     NOW, THEREFORE, in consideration of their mutual covenants herein
contained, the parties hereto mutually covenant and agree as follows:

I.     Effective as of the Third Additional Space Commencement Date, as such
term is defined below, the Landlord shall deliver and Tenant shall accept the
Third Additional Space in its "as is" condition with no workletter/work
allowance and/or rental concession and/or abatement to be performed or granted
by Landlord except as set forth in Exhibit A hereof.  Thereupon, the premises
demised to Tenant under the Lease shall be deemed to consist of the Third
Additional Space, Second Additional Space, First Additional Space and the
Original Demised Premises, and the leasing thereof shall be upon all of the
terms and conditions contained in the Lease as modified by the Third
Modification.

     For purposes of this Third Modification, the terms (i) Third Additional
Space Commencement Date shall mean the date upon which Landlord gives notice to
Tenant that the work required to be performed by Landlord as set forth in
Exhibit "A" ("Landlord's Work") will be substantially completed ("Substantial
Completion"), or the date on which Tenant (or its agent) enters, uses or
occupies any portion of the Third Additional Space whether for the conduct of
its business or for the performance of Tenant's Initial Alterations, as such
term is defined in Article 2 hereof, the earlier of which to occur and (ii)


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Substantial Completion shall be deemed to mean the date when Landlord's Work
shall have been completed with the exception of punch list items and
insubstantial details which do not prevent Tenant from conducting its business
at Third Additional Space.

     Tenant's obligations to pay the "Fixed Rent" as it relates solely to the
Third Additional Space shall commence as of the date (the "Third Additional
Space Rent Date") which is one hundred twenty (120) days after the Third
Additional Space Commencement Date except that Tenant shall pay all additional
rent otherwise payable hereunder including, without limitation, charges
attributable to electric service as of the Third Additional Space Commencement
Date.

     As soon as the Third Additional Space Commencement Date, Third Additional
Space Rent Date and the "Third Additional Space Expiration Date" (defined below)
are known, Landlord and Tenant shall execute a memorandum confirming the same on
demand, but any failure to execute such a memorandum shall not affect any of
those dates.

     (i)     The annual rental rate for the Third Additional Space only shall
             be:

     a)     Two Hundred Fifty Five Thousand ($255,000.00) Dollars per year
($21,250.00 per month) from the Third Additional Space Rent Date to the last day
of the first (1st) "Lease Year," as such terms defined below;

     b)     Two Hundred Sixty Two Thousand Six Hundred Fifty ($262,650.00)
Dollars per year ($21,887.50 per month) from the first day of the second (2nd)
Lease Year to the last day of the second (2nd) Lease Year;

     c)     Two Hundred Seventy Thousand Five Hundred Thirty ($270,530.00)
Dollars per year ($22,544.17 per month) from the first day of the third (3rd)
Lease Year to the last day of the third (3rd) Lease Year;

     d)     Two Hundred Seventy Eight Thousand Six Hundred Forty Five
($278,645.00) Dollars per year ($23,220.42 per month) from the first day of the
fourth (4th) Lease Year to the last day of the fourth (4th) Lease Year;

     e)     Two Hundred Eighty Seven Thousand Five ($287,005.00) Dollars per
year ($23,917.08 per month) from the first day of the fifth (5th) Lease Year to
the last day of the fifth (5th) Lease Year;

     f)     Three Hundred Twenty Five Thousand Six Hundred Fifteen ($325,615.00)
Dollars per year ($27,134.58 per month) from the first day of the sixth (6th)
Lease Year to the last day of the sixth (6th) Lease Year;

     g)     Three Hundred Thirty Five Thousand Three Hundred Eighty Three
($335,383.00) Dollars per year ($27,948.58 per month) from the first day of the
seventh (7th) Lease Year to the last day of the seventh (7th) Lease Year;


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     h)     Three Hundred Forty Five Thousand Four Hundred Forty Five
($345,445.00) Dollars per year ($28,787.08 per month) from the first day of the
eight (8th) Lease Year to the last day of the eighth (8th) Lease Year;

     i)     Three Hundred Fifty Five Thousand Eight Hundred Eight ($355,808.00)
Dollars per year ($29,650.67 per month) from the first day of the ninth (9th)
Lease Year to the last day of the ninth (9th) Lease Year; and

     j)     Three Hundred Sixty Six Thousand Four Hundred Eighty Two
($366,482.00) Dollars per year ($30,540.17 per month) from the first day of the
tenth (10th) Lease Year to the Third Additional Space Expiration Date.

     As used in this lease, "rent" or "rents" shall mean and include "fixed
rent" and any and all additional rent. References to "fixed rent" shall mean and
include the "annual rental" or the "annual rental rate".

     For purposes of this Third Modification, the term "Lease Year" shall mean
successive twelve (12) calendar month periods commencing on the first day of the
calendar month which follows the Third Additional Space Commencement Date unless
the Third Additional Space Commencement Date is the first day of the month, in
which event, the first Lease Year shall begin on the Third Additional Space
Commencement Date.

     The "Third Additional Space Expiration Date" shall be deemed to be the last
day of the calendar month in which the tenth (10th) anniversary of the Third
Additional Space Rent Date occurs, unless the Third Additional Space Rent Date
is the first day of the calendar month, in which event the Term shall expire on
the day before such tenth (10th) anniversary.

     Tenant expressly acknowledges and agrees that if Substantial Completion of
Landlord's Work is delayed by reason of any Tenant Delay, as such term is
defined in the Lease, and/or Tenants performance of any work that Tenant
performs with Landlord's permission in the demised premises during the course of
Landlord's Work, the date of Substantial Completion shall be accelerated by one
(1) day for each day of delay and in additional Tenant shall pay to Landlord as
additional rent within ten (10) days after demand therefor all costs and
disbursements which Landlord actually sustains by reason of such delay. In no
event shall Landlord be required to commit additional personnel to the
performance of Landlord's Work to negate a Tenant Delay. If Tenant pays any sum
due hereunder later than ten (10) days after the date of request therefore by
Landlord, then Tenant shall pay, as additional rent, interest on the unpaid sum
at the maximum legal rate from the date of Landlord's request.

     (ii)     The additional rent due for the use of water, as set forth in
Article 29 of the Lease with respect to the Third Additional Space, and the
contract price for sprinkler advisory service, as set forth in Article 30 of the
Lease with respect to the Third Additional Space, shall be $80.00 each per
month;

     (iii)     Tenant's Proportionate Tax Share, as set forth in Article 41 of
the Lease with respect to the Third Additional Space shall be 8.333% and the
base year utilized for computing additional rent due to Real Estate Tax
increases thereunder shall be the average of fiscal years 2002/2003 and
2003/2004;

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     (iv)     Article 48 of the Lease is hereby deemed deleted and replaced by
the following Article 48:

     "48. Whenever Landlord is required or permitted to send any notice or
demand to Tenant under or pursuant to this lease, including, but not limited to
any demand for rent or notice of default it may be given by Landlord's Agent,
attorney, executor, trustee or personal representative, with the same force and
effect as if given by the Landlord. Landlord hereby advises Tenant that
Landlord's current agent is Williams USA Realty Services Inc., 380 Madison
Avenue, New York, New York 10017."

     (v)     The base year utilized for computing additional rent due to Utility
Escalations as set forth in Article 71 (A)(iii) of the Lease with respect to the
Third Additional Space shall mean the calendar year 2002 and the Tenant's Share,
as set forth in subparagraph (A)(v) thereof shall be 8.333%; and

     (vi)     The obligation of landlord to provide an ACP-5 certificate or
comparable certificate as set forth in Article 76 of the Lease shall similarly
be applicable to the Third Additional Space.

2.     Upon execution and delivery of this Third Modification Landlord agrees to
promptly commence and diligently perform the Landlord's Work, and Tenant agrees
to provide access to the demised premises upon and after the Third Additional
Space Commencement Date hereof and will permit Landlord access thereto for the
purposes of Landlord performing the all items of the Landlord's. Landlord agrees
that all of the Landlord's Work shall be conducted, to the extent practicable
(but without the necessity of incurring overtime wages or other additional
costs) in such manner so as to minimize interference with Tenant's use of the
demised premises and to coordinate such performance of work with the work being
performed by Tenant in connection with preparing the Third Additional Space for
its initial occupancy thereof ("Tenant's Initial Alterations"). Tenant covenants
that all access will be coordinated with the Landlord's agent and the building
superintendent so as to not delay the Landlord's Work.

3.     The term of the Lease is hereby extended for an additional period of
approximately two (2) years and eight (8) months, so that it shall expire,
unless sooner terminated, as of the Third Additional Space Expiration Date, and
in connection therewith the annual rental rates for the Original Rented
Premises, First Additional Space and Second Additional Space from March 1, 2010
to and including the Third Additional Space Expiration Date shall be calculated
by multiplying the rentable square footage of the space in question by the Fixed
Rent per rentable square foot then in effect for the Third Additional Space
(which for purposes hereof shall be deemed to consist of 15,000 rentable
square feet), as of March 1, 2010 and each month thereafter through the Third
Additional Space Expiration Date.

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     For purposes of this Article the rentable square feet for the Original
Demised Premises, First Additional Space, and Second Additional Space shall be
deemed to be 15,000, 7,500 and 4,500 respectively.

4.     Landlord shall furnish 500 amps 3 phase electric current to service the
Third Additional Space of which 300 amps will be dedicated to service the two
(2) air-conditioning units referred to in item No. 4 of Exhibit A hereof. If the
Tenant requires additional power at anytime after the Third Additional Space
Commencement Date provided that Tenant is not then in default beyond applicable
notice and cure periods, Tenant shall provide Landlord with a load letter,
reasonably satisfactory to Landlord, evidencing Tenant's need for additional
electric power with respect to the Third Additional Space, and Landlord shall
make available such additional power to service the Third Additional Space,
provided that at such time Landlord has excess electric power service capability
available. In the event Landlord has such additional power and makes it
available to Tenant, such power shall be made available to Tenant at Landlord's
then current connection charge per amp (currently $125.00 per amp) provided
however that Tenant shall reimburse Landlord for any and all costs associated
with such electric power installation.  In the event Landlord does not have
excess power service capacity, Landlord shall, using reasonable commercial
diligence, make application for additional power to Con Edison (or the utility
company then providing service to the Building) and if granted, the charges and
conditions hereinabove set forth shall apply, provided however, that the failure
to so provide such additional power shall not otherwise impact upon Tenant's
obligation to make payment of its fixed rent as set forth in the Lease as
modified by this Third Modification.

5.     Tenant acknowledges that it presently owes to Landlord the sum of
$8,403.75 (need revised number (no part of which has been paid)) which sum
consists of all or any combination of: fixed annual rent, additional rent and
other charges to and including September 30, 2002 which became due and payable
pursuant to the Lease. The Tenant agrees that it shall pay the above mentioned
sum of $8,403.75 upon the execution of this agreement.

6.     In addition to the foregoing, the Landlord shall not be bound by any
representations, understandings, promises or agreements not contained in the
Lease or in this agreement, and this agreement shall not bind the Landlord and
the Tenant until executed and delivered.

7.     This agreement may not be changed, modified or canceled orally and shall
be binding upon and inure to the benefit of the respective parties hereto, their
successors, and except as otherwise provided in the Lease, their assigns, as
modified and extended by the terms of this agreement, the Lease is hereby
ratified and confirmed in all respects.

     IN WITNESS WHEREOF, the parties hereto have executed this agreement as of
the day and year first above written.

Witness                                     ABNER PROPERTIES COMPANY


_______________________                  By:_______________________________
As to Landlord                              Jonathan P. Rosen, President


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Witness:                                    ALLOY, INC.

/s/ Neil I. Vogel                            /s/ Gina R. GiGioia
_______________________                  By:_______________________________
As to Tenant                                 Gina R. DiGioia
                                             VP/General Counsel
                                             Alloy, Inc.
                                             151 W. 26th Street, 11th Floor
                                             New York, NY 10001

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Exhibit "A" (Workletter) annexed to and forming part of Third Lease Modification
and Extension Agreement dated  ______________________ , 2002 between ABNER
PROPERTIES COMPANY, as Landlord and ALLOY, INC., as Tenant for 9th Floor (Third
Additional Space), in the building known as 151 West 26th Street, New York, New
York.

Provided the Tenant is not in default hereunder, Landlord agrees, at its own
cost and expense, to do the following work within the demised premises in
building standard manner:

1.   Supply and install new building standard windows in the demised premises.

2.   Supply and install new building standard hardwood flooring and apply one
     (1) coat of polyurethane floor finish and one (1) coat of sealer.

3.   Furnish and install two (2) building standard ADA Compliant unisex
     bathrooms (i.e. one toilet, one sink) in locations as designated by
     Landlord.

4.   Supply and install, two (2) twenty-five (25) ton building standard air
     conditioning units without ductwork in locations as designated by Landlord.
     Tenant to maintain thereafter in accordance with Article 68 of the Lease.

5.   Furnish and install one (1) Women's' and one (1) Men's bathroom, similar to
     the current Women's and Men's bathrooms servicing the eleventh floor of the
     Building, in locations as designated by Landlord.

6.   Patch, where necessary, and paint the existing painted surfaces of the
     entire premises with one finish coat in Tenant's choice of one of
     Landlord's building standard latex color paints.

     Any request by Tenant for Landlord to make any changes in or to the work
     set forth above must be made in writing to Landlord who may consent to or
     reject such requests. To the extent such changes result in additional costs
     or delay the completion of Landlord's work, Tenant shall be responsible for
     such additional costs and delay.

     In addition, Tenant shall be liable for any delays resulting from Tenant's
     requests regarding the scheduling of Landlord's work or from any other
     action of Tenant which otherwise impacts Landlord's ability to perform such
     work.

Except as provided in this Workletter, Landlord shall be under no obligation to
make any other improvements or alterations in the demised premises and Tenant
agrees to accept the demised premises "as is" in its present condition. Any work
conditioned upon Tenant's request is deemed waived unless requested in writing
more than six (6) months prior to expiration of the within term.

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Tenant shall, if required hereunder, make elections and deliver any plans and
specifications to Landlord for Landlord's approval on or before
______________________, 2002. They shall incorporate all information which may
be needed by Landlord to let the contracts for the performance of the work, and
shall be fully dimensioned working drawings.  Progress of the work shall not
affect the payment of rent.


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