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EXHIBIT 10.38


INCENTIVE STOCK OPTION AGREEMENT


ALLOY, INC.












GRANT OF OPTION.


PURCHASE PRICE.


EXERCISABILITY OF OPTION.


|                                                                     |  |  |  |                                                        
|-------------------------------------------------------------------- |  |  |  | -------------------------------------------------------
|On or after the first anniversary of
    the date of this Agreement  |  |  |  | up to «VEST1WRIT»
    («VEST1NUM») Shares              
|On or after the second anniversary of
    the date of this Agreement |  |  |  | up to an additional «VEST2WRIT» («VEST2NUM»)
    Shares
|On or after the third anniversary of
    the date of this Agreement  |  |  |  | up to an additional «VEST3WRIT» («VEST3NUM»)
    Shares
|On or after the fourth anniversary of
    the date of this Agreement |  |  |  | up to an additional «VEST4WRIT» («VEST4NUM»)
    Shares



TERM OF OPTION.








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| |                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (a) To the extent exercisable but not exercised as of the
    date of Disability; and                                                                                                                                                                                                                                                                                                                                                      
|
| | (b) If rights to exercise this Option accrue periodically,
    to the extent of a pro rata portion of any additional rights to
    exercise this Option as would have accrued had the Employee not
    become Disabled prior to the end of the accrual period which
    next ends following the date of Disability. The proration shall
    be based upon the number of days during the accrual period prior
    to the date of Disability.





| |                                                                                                                                                                                                                                                                                                                                                                                                                          
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (x) To the extent exercisable but not exercised as of the
    date of death; and                                                                                                                                                                                                                                                                                                                                         
|
| | (y) If rights to exercise this Option accrue periodically,
    to the extent of a pro rata portion of any additional rights to
    exercise this Option as would have accrued had the Employee not
    died prior to the end of the accrual period which next ends
    following the date of death. The proration shall be based upon
    the number of days during the accrual period prior to the
    Employees death.

METHOD OF EXERCISING OPTION. Exhibit A


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PARTIAL EXERCISE.


NON-ASSIGNABILITY.


NO RIGHTS AS STOCKHOLDER UNTIL EXERCISE.


CAPITAL CHANGES AND BUSINESS SUCCESSIONS.


TAXES.


PURCHASE FOR INVESTMENT.




| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (a) The person(s) who exercise this Option shall warrant to
    the Company, at the time of such exercise, that such person(s)
    are acquiring such Shares for their own respective accounts, for
    investment, and not with a view to, or for sale in connection
    with, the distribution of any such Shares, in which event the
    person(s) acquiring such Shares shall be bound by the provisions
    of the following legend which shall be endorsed upon the
    certificate(s) evidencing the Shares issued pursuant to such
    exercise:



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The shares represented by this certificate have been taken
    for investment and they may not be sold or otherwise transferred
    by any person, including a pledgee, unless (1) either
    (a) a Registration Statement with respect to such shares
    shall be effective under the Securities Act of 1933, as amended,
    or (b) the Company shall have received an opinion of
    counsel satisfactory to it that an exemption from registration
    under such Act is then available, and (2) there shall have
    been compliance with all applicable state securities
    laws; and



| |                                                                                                                                                                                                                                                                                                                                   
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (b) If the Company so requires, the Company shall have
    received an opinion of its counsel that the Shares may be issued
    upon such particular exercise in compliance with the
    1933 Act without registration thereunder. Without limiting
    the generality of the foregoing, the Company may delay issuance
    of the

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| |                                                                                                                                                                                                              
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Shares until completion of any action or obtaining of any
    consent, which the Company deems necessary under any applicable
    law (including without limitation state securities or blue
    sky laws).

RESTRICTIONS ON TRANSFER OF SHARES.


NO OBLIGATION TO EMPLOY.


OPTION IS INTENDED TO BE AN ISO.


NOTICE TO COMPANY OF DISQUALIFYING
DISPOSITION.


NOTICES.








GOVERNING LAW.


BENEFIT OF AGREEMENT.


ENTIRE AGREEMENT.


MODIFICATIONS AND AMENDMENTS.


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WAIVERS AND CONSENTS.


REMAINDER OF PAGE INTENTIONALLY LEFT BLANK


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| |            
| | -----------
| | ALLOY, INC.



| |     | 
| | --- | 
| | By: | 

| |      
| | -----
| |      
| | Name:

| |        | 
| | ------ | 
| | Title: | 



| |                               
| | ------------------------------
| | EMPLOYEE                      
|
| |                               
| | Signature                     
|
| | Name:   «FIRSTNAME» «LASTNAME»



| |          |                                                                                           
| | -------- | ------------------------------------------------------------------------------------------
| | Address: | c/o Alloy, Inc. 
     151 West 26th Street 
     11th Floor 
     New York, New York 10001

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Exhibit A


NOTICE OF EXERCISE OF INCENTIVE STOCK OPTION


[Form For Registered Shares]


















| |                                   
| | ----------------------------------
| | Very truly yours,                 
|
| |                                   
| | «FIRSTNAME» «LASTNAME» (signature)
|
| |                                   
| | Date                              
|
| | «SSNO»                            
| | Social Security Number            

A-1