Document:

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                                 Protarga, Inc.

                             1998 Stock Option Plan

     1. DEFINITIONS. As used in this 1998 Stock Option Plan of Protarga, Inc.,
the following terms shall have the following meanings:

          1.1. BOARD means the Company's Board of Directors.

          1.2. CODE means the federal Internal Revenue Code of 1986, as amended.

          1.3. COMMITTEE means a committee appointed by the Board or, if no such
     committee is appointed, the Board itself. Such committee or the Board, as
     the case may be, shall be responsible for the administration of the Plan,
     as provided in Section 5 of the Plan.

          1.4. COMPANY means Protarga, Inc., a Delaware corporation.

          1.5. EMPLOYMENT AGREEMENT means an agreement, if any, between the
     Company and an Optionee, setting forth, INTER ALIA, conditions and
     restrictions upon the transfer of shares of Stock.

          1.6. FAIR MARKET VALUE means (i) on any date prior to the Initial
     Public Offering Date, the value of a share of Stock on any such date as
     determined by the Committee, and (ii) on the Initial Public Offering Date
     or on any date thereafter, (A) the average of the closing bid and asked
     prices of a share of Common Stock on the over-the-counter market, as
     reported by the National Association of Securities Dealers, Inc. ("NASD")
     on such date, or (B) the closing price of a share of Common Stock on an
     exchange or the NASD's National Market System, as the case may be, on such
     date.

          1.7. GRANT DATE means the date as of which an Option is granted, as
     determined under Section 7.

          1.8. INCENTIVE OPTION means an Option which by its terms is to be
     treated as an "incentive stock option" within the meaning of Section 422 of
     the Code.

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          1.9. INITIAL PUBLIC OFFERING DATE means the date of the closing of the
     Company's initial public offering of Common Stock.

          1.10. NON-STATUTORY OPTION means any Option that is not an Incentive
     Option.

          1.11. OPTION means an option to purchase shares of Stock granted under
     the Plan.

          1.12. OPTION AGREEMENT means an agreement between the Company and an
     Optionee, setting forth the terms and conditions of an Option.

          1.13. OPTION PRICE means the price to be paid by an Optionee for a
     share of Stock upon exercise of an Option.

          1.14. OPTIONEE means a person eligible to receive an Option, as
     provided in Section 6, to whom an Option shall have been granted under the
     Plan.

          1.15. PLAN means this 1998 Stock Option Plan of the Company, as
     amended from time to time.

          1.16. STOCK means Common Stock, par value $.001 per share, of the
     Company.

          1.17. STOCK RESTRICTION AGREEMENT means a stock restriction agreement,
     if any, between the Company and an Optionee.

          1.18. TEN PERCENT OWNER means a person who owns, or is deemed within
     the meaning of Section 422(b)(6) of the Code to own, stock possessing more
     than 10% of the total combined voting power of all classes of stock of the
     Company (or its parent or subsidiary corporations). Whether a person is a
     Ten Percent Owner shall be determined with respect to each Option based on
     the facts existing immediately prior to the Grant Date of such Option.

          1.19. VESTING YEAR for any portion of any Incentive Option means the
     calendar year in which that portion of the Option first becomes
     exercisable.

          1.20. CHANGE IN CORPORATE CONTROL means (i) the time of approval by
     the stockholders of the Company of (A) any consolidation or merger of the
     Company in which the Company is not the continuing or surviving corporation
     or pursuant to which Stock would be converted into cash, securities or
     other property, other than a merger in

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     which the holders of Stock immediately prior to the merger will have the
     same proportionate ownership of common stock of the surviving corporation
     immediately after the merger as before the merger, (B) any sale, lease,
     exchange or other transfer (in one transaction or a series of related
     transactions) of all or substantially all the assets of the Company, or (C)
     adoption of any plan or proposal for the liquidation or dissolution of the
     Company, or (ii) the date on which any "person" (as defined in Section
     13(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
     Act"), other than the Company or a subsidiary or employee benefit plan or
     trust maintained by the Company or any of its subsidiaries shall become
     (together with its "affiliates" and "associates," as defined in Rule 12b-2
     under the Exchange Act) the "beneficial owner" (as defined in Rule l3d-3
     under the Exchange Act), directly or indirectly, of more than 25% of the
     Stock outstanding at the time, without the prior approval of the Board.

     2. PURPOSE. This Plan is intended to encourage ownership of Stock by
employees and directors of, and consultants to, the Company and its subsidiaries
and to provide additional incentives for them to promote the success of the
Company's business. The Plan is intended to be an incentive stock option plan
within the meaning of Section 422 of the Code, but not all Options granted
hereunder are required to be Incentive Options.

     3. TERM OF THE PLAN. Options may be granted hereunder at any time in the
period commencing on the approval of the Plan by the Board and ending April 20,
2008.

     4. STOCK SUBJECT TO THE PLAN. Subject to the provisions of Section 17 of
the Plan, at no time shall the number of shares of Stock available hereunder
exceed 50,000 shares, which number of shares, automatically and without further
action, shall increase, effective as of January 1, 1999 and each January 1
thereafter during the term of the Plan, by an additional number of shares of
Stock sufficient to increase the number of shares then available for the future
grant of Options under the Plan to 50,000. However, in any event, throughout the
term of the Plan ending April 20, 2008, no more than an aggregate of 300,000
shares of Stock may be issued pursuant to the exercise of Incentive Stock
Options granted under the Plan. Shares to be issued upon the exercise of Options
granted under the Plan may be either authorized but unissued shares, or shares
held by the Company in its treasury. If any Option expires or terminates for any
reason without having been exercised in full, the shares not purchased
thereunder shall again be available for Options thereafter to be granted.

     5. ADMINISTRATION. The Plan shall be administered by the Committee. Subject
to the provisions of the Plan, the Committee shall have complete authority, in
its discretion, to make or

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to select the manner of making the following determinations with respect to each
Option to be granted by the Company: (a) the employee, director or consultant to
receive the Option; (b) whether the Option (if granted to an employee) will be
an Incentive Option or Non-statutory Option; (c) the time of granting the
Option; (d) the number of shares subject to the Option; (e) the Option Price;
(f) the Option period; (g) the Option exercise date or dates; (h) the effect of
termination of employment or other association with the Company on the
subsequent exercisability of the Option; and (i) whether an Optionee shall be
required to execute a Stock Restriction Agreement and the terms thereof. In
making such determinations, the Committee may take into account the nature of
the services rendered by the respective employees, directors and consultants,
their present and potential contributions to the success of the Company and its
subsidiaries, and such other factors as the Committee in its discretion shall
deem relevant. Subject to the provisions of the Plan, the Committee shall also
have complete authority to interpret the Plan, to prescribe, amend and rescind
rules and regulations relating to it, to determine the terms and provisions of
the respective Option Agreements (which need not be identical), and to make all
other determinations necessary or advisable for the administration of the Plan.
The Committee's determinations on the matters referred to in this Section 5
shall be conclusive.

     6. ELIGIBILITY. An option shall be granted only to an employee or director
of, or consultant to, one or more of the Company or any subsidiary thereof.

     7. TIME OF GRANTING OPTIONS. The granting of an Option shall take place at
the time specified in the Option Agreement. Only if expressly so provided in the
Option Agreement, shall the Grant Date be the date on which an Option Agreement
shall have been duly executed and delivered by the Company and the Optionee.

     8. OPTION PRICE. The Option Price under each Incentive Option shall be not
less than 100% of the Fair Market Value of Stock on the Grant Date, or not less
than 110% of the Fair Market Value of Stock on the Grant Date if the Optionee is
a Ten Percent Owner. The Option Price under each Non-statutory Option shall not
be so limited solely by reason of this Section 8.

     9. OPTION PERIOD. No Incentive Option may be exercised later than the tenth
anniversary of the Grant Date, but in any case not later than the fifth
anniversary of the Grant Date, if the Optionee is a Ten Percent Owner. The
Option period under each Non-statutory Option shall not be so limited solely by
reason of this Section 9. An Option may become exercisable in such installments,
cumulative or non-cumulative, as the Committee may determine. In the case of an
Option not otherwise immediately exercisable in full, the Committee may
accelerate the exercisability of such Option in whole or in part at any time,
provided the acceleration of the

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exercisability of any Incentive Option would not cause the Option to fail to
comply with the provisions of Section 422 of the Code.

     10. LIMIT ON INCENTIVE OPTION CHARACTERIZATION. No Incentive Option shall
be considered an Incentive Option to the extent that pursuant to its terms it
would permit the Optionee to purchase for the first time in any Vesting Year
under that Incentive Option more than the number of shares of Stock calculated
by dividing the current limit by the Option Price. The current limit for any
Optionee for any Vesting Year shall be $100,000 minus the aggregate Fair Market
Value at the date of grant of the number of shares of Stock available for
purchase for the first time in the Vesting Year under each other Incentive
Option granted to the Optionee under the Plan and each other incentive stock
option granted to the Optionee under any other incentive stock option plan of
the Company (and any parent and subsidiary corporations).

     11. EXERCISE OF OPTION. An Option may be exercised by the Optionee giving
written notice, in the manner provided in Section 22, specifying the number of
shares with respect to which the Option is then being exercised. Such notice
shall be accompanied by payment in the form of cash, or certified or bank check
payable to the order of the Company, in an amount equal to the Option Price of
the shares to be purchased.

     In the event that notice of exercise is given prior to the Initial Public
Offering Date, such notice shall be accompanied by an executed counterpart of a
Stock Restriction Agreement if the exercising Optionee is not already a party to
a Stock Restriction Agreement. Payment may at the election of the Optionee be
made in whole or in part by the surrender of a whole number of shares of
previously issued Stock of the Company. Previously issued shares of Stock shall
be accepted in an amount equal to the then Fair Market Value of the surrendered
shares.

     In addition, the Optionee may surrender a portion of his Option with
respect to vested Shares as payment for other Shares which have also vested, and
in such case the portion of the Option surrendered shall be considered a payment
equal to the Fair Market Value of the vested Option Shares which could be
purchased with the surrendered portion of the Option less the aggregate exercise
price for such Option Shares.

     The Company may, in the sole discretion of the Committee, at the time of
grant of an Incentive Option or at the time of grant or thereafter of a
Non-statutory Option, determine to assist any Optionee in the exercise of one or
more Options granted to such Optionee under the Plan, including the satisfaction
of any tax obligations arising therefrom, by authorizing the extension of a loan
from the Company to such Optionee. The terms of any loan (including the interest
rate and terms of repayment) shall be upon such terms as the Committee specifies
in the applicable Option

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Agreement or otherwise deems appropriate at the time such Option Price becomes
due and payable. Loans may be authorized with or without security or collateral.
In all events, the maximum credit available to the Optionee may not exceed the
Option Price of the acquired shares of Stock (less the par value of such shares)
plus any tax liability incurred by the Optionee in connection with the
acquisition of such shares. The Committee may, in its discretion, determine that
one or more loans extended under the terms of this paragraph shall be subject to
forgiveness by the Company in whole or in part upon such terms and conditions as
the Committee may, in its discretion, deem appropriate.

     Receipt by the Company of notice, payment and, if applicable, executed
counterpart of a Stock Restriction Agreement shall constitute the exercise of
the Option. Within 30 days thereafter but subject to the remaining provisions of
the Plan, the Company shall deliver or cause to be delivered to the Optionee or
his agent a certificate or certificates for the number of shares then being
purchased. Such shares shall be fully paid and nonassessable.

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     12. RESTRICTIONS ON ISSUE OF SHARES.

     (a) Notwithstanding any other provision of the Plan, if, at any time, in
the reasonable opinion of the Company the issuance of shares of Stock covered by
the exercise of any Option may constitute a violation of law, then the Company
may delay such issuance and the delivery of a certificate for such shares until
(i) approval shall have been obtained from such governmental agencies, other
than the Securities and Exchange Commission, as may be required under any
applicable law, rule, or regulation, and (ii) in the case where such issuance
would constitute a violation of a law administered by or a regulation of the
Securities and Exchange Commission, one of the following conditions shall have
been satisfied:

          (1) the shares with respect to which such Option has been exercised
     are at the time of the issue of such shares effectively registered under
     the Securities Act of 1933, as amended (the "Securities Act"); or

          (2) a no-action letter in form and substance reasonably satisfactory
     to the Company and its counsel with respect to the issuance of such shares
     shall have been obtained by the Company from the Securities and Exchange
     Commission.

The Company shall make all reasonable efforts to bring about the occurrence of
said events.

     (b) Each certificate representing shares issued upon the exercise of an
Option will bear restrictive legends which may refer to this Plan and to
applicable restrictions under any Employment Agreement or Stock Restriction
Agreement.

     13. PURCHASE FOR INVESTMENT; SUBSEQUENT REGISTRATION.

     (a) Unless the shares to be issued upon exercise of an Option granted under
the Plan have been effectively registered under the Securities Act, the Company
shall be under no obligation to issue any shares covered by any Option unless
the person who exercises such Option, in whole or in part, shall give a written
representation to the Company which is satisfactory in form and substance to its
counsel and upon which the Company may reasonably rely, that he or she is
acquiring the shares issued pursuant to such exercise of the Option as an
investment and not with a view to, or for sale in connection with, the
distribution of any such shares.

     (b) Each share of Stock issued pursuant to the exercise of an Option
granted pursuant to this Plan may bear a reference to the investment
representation made in accordance

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with this Section 13 and to the fact that no registration statement has been
filed with the Securities and Exchange Commission in respect to said Stock.

     (c) If the Company shall deem it necessary or desirable to register under
the Securities Act or other applicable statutes any shares with respect to which
an Option shall have been granted, or to qualify any such shares for exemption
from the Securities Act or other applicable statutes, then the Company shall
take such action at its own expense. The Company may require from each Option
holder, or each holder of shares of Stock acquired pursuant to the Plan, such
information in writing for use in any registration statement, prospectus,
preliminary prospectus or offering circular as is reasonably necessary for such
purpose and may require reasonable indemnity to the Company and its officers and
directors from such holder against all losses, claims, damage and liabilities
arising from such use of the information so furnished and caused by any untrue
statement of any material fact therein or caused by the omission to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances under which they were
made.

     14. WITHHOLDING; NOTICE OF DISPOSITION OF STOCK PRIOR TO EXPIRATION OF
SPECIFIED HOLDING PERIOD.

     (a) Whenever shares are to be issued in satisfaction of an Option granted
hereunder, the Company shall have the right to require the Optionee to remit to
the Company an amount sufficient to satisfy federal, state, local or other
withholding tax requirements if and to the extent required by law (whether so
required to secure for the Company an otherwise available tax deduction or
otherwise) prior to the delivery of any certificate or certificates for such
shares.

     (b) The Company may require as a condition to the issuance of shares
covered by any Incentive Option that the party exercising such Option give a
written representation to the Company which is satisfactory in form and
substance to its counsel and upon which the Company may reasonably rely, that he
or she will report to the Company any disposition of such shares prior to the
expiration of the holding periods specified by Section 422(a)(1) of the Code. If
and to the extent that the realization of income in such a disposition imposes
upon the Company federal, state, local or other withholding tax requirements, or
any such withholding is required to secure for the Company an otherwise
available tax deduction, the Company shall have the right to require that the
recipient remit to the Company an amount sufficient to satisfy those
requirements; and the Company may require as a condition to the issuance of
shares covered by an Incentive Option that the party exercising such option give
a satisfactory written representation promising to make such a remittance.

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     15. TERMINATION OF ASSOCIATION WITH THE COMPANY. If the Optionee's
employment or other association with the Company is terminated, whether
voluntarily or otherwise, the Option, to the extent the Option is exercisable on
the date of termination, may be exercised by the Optionee, but only within 90
days after he or she ceases to be an employee of or consultant to the Company,
unless terminated earlier by its terms. Notwithstanding the foregoing, in the
event that the applicable Option Agreement with respect to an Option shall
contain specific provisions governing the effect that any such termination shall
have on the exercisability of such Option, such provisions in the Option
Agreement shall, to the extent that they are inconsistent with the provisions of
this Section 15, control and deem to supersede the provisions of this Section
15. For purposes of this Section 15, military or sick leave shall not be deemed
a termination of employment, PROVIDED that it does not exceed the longer of 90
days or the period during which the absent Optionee's reemployment rights, if
any, are guaranteed by statute or by contract.

     16. TRANSFERABILITY OF OPTIONS. Options shall not be transferable,
otherwise than by will or the laws of descent and distribution, and may be
exercised during the life of the Optionee only by the Optionee.

     17. ADJUSTMENT OF NUMBER AND KIND OF OPTION SHARES.

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     (a) In the event of any stock dividend payable in Stock or any split-up or
contraction in the number of shares of Stock after the date of an Option
Agreement and prior to the exercise in full of the Option, the number of shares
subject to such Option Agreement and the price to be paid for each share subject
to the Option shall be proportionately adjusted. In the event of any
reclassification, exchange, conversion or change of outstanding shares of Stock,
or in case of any consolidation or merger of the Company with or into another
company, or in case of any sale or conveyance to another company or entity of
the property of the Company as a whole or substantially as a whole, shares of
stock or other securities equivalent in kind and value to those shares an
Optionee would have received if he or she had held the full number of shares of
Stock subject to the Option immediately prior to such reclassification,
exchange, conversion, change, consolidation, merger, sale or conveyance and had
continued to hold those shares (together with all other shares, stock and
securities thereafter issued in respect thereof) to the time of the exercise of
the Option shall thereupon be subject to the Option. Upon dissolution or
liquidation of the Company, the Option shall terminate, but the Optionee (if at
the time in the employ of, serving as a director of, or retained as a consultant
to the Company or any of its subsidiaries) shall have the right, immediately
prior to such dissolution or liquidation, to exercise the Option to the extent
exercisable on the date of such dissolution or liquidation. No fraction of a
share shall be purchasable or deliverable upon exercise, but in the event any
adjustment hereunder of the number of shares covered by the Option shall cause
such number to include a fraction of a share, such number of shares shall be
adjusted to the nearest smaller whole number of shares. In the event of changes
in the outstanding Stock by reason of any stock dividend, split-up, contraction,
reclassification, or change of outstanding shares of Stock of the nature
contemplated by this Section 17, the number of shares of Stock available for the
purpose of the Plan as stated in Section 4 shall be correspondingly adjusted.

     (b) Upon the close of business on the Initial Public Offering Date, each
Option then outstanding shall cease to be exercisable for shares of Stock and
shall become exercisable for shares of Common Stock of the Company. The number
of shares of Common Stock that shall become subject to each such Option upon the
close of business on the Initial Public Offering Date shall be equal to the
number of shares of Stock subject to each such Option on the date immediately
preceding such Initial Public Offering Date. From and after the Initial Public
Offering Date, each such Option shall be exercisable only in accordance with the
terms set forth in, and to the extent provided in, this Plan or any applicable
Option Agreement (including, without limitation, any vesting schedule set forth
therein), all to the same extent as if each such Option were still exercisable
for shares of Stock. Without limiting the generality of the preceding sentence,
nothing in this Section 17(b) shall be construed as accelerating the
exercisability of any Option.

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     18. CHANGE IN CORPORATE CONTROL. Upon a Change in Corporate Control, each
outstanding Option shall immediately become fully exercisable.

     19. RESERVATION OF STOCK. The Company shall at all times during the term of
the Options reserve or otherwise keep available such number of shares of Stock
as will be sufficient to satisfy the requirements of the Plan and shall pay all
fees and expenses necessarily incurred by the Company in connection therewith.

     20. LIMITATION OF RIGHTS IN STOCK; NO SPECIAL EMPLOYMENT OR OTHER RIGHTS.
The Optionee shall not be deemed for any purpose to be a stockholder of the
Company with respect to any of the shares of Stock covered by an Option, except
to the extent that the Option shall have been exercised with respect thereto
and, in addition, a certificate shall have been issued therefor and delivered to
the Optionee or his agent. Any Stock issued pursuant to the Option shall be
subject to all restrictions upon the transfer thereof which may be now or
hereafter imposed by the Certificate of Incorporation, the By-laws of the
Company, and the Employment Agreement. Nothing contained in the Plan or in any
Option shall confer upon any Optionee any right with respect to the continuation
of his or her employment with, or retention as a consultant by, the Company (or
any subsidiary), or interfere in any way with the right of the Company (or any
subsidiary), subject to the terms of any separate employment, consulting or
other agreement or provision of law or corporate articles or by-laws to the
contrary, at any time to terminate such employment, consulting or other
agreement or to increase or decrease the compensation of the Optionee from the
rate in existence at the time of the grant of an Option.

     21. TERMINATION AND AMENDMENT OF THE PLAN. The Board may at any time
terminate the Plan or make such modifications of the Plan as it shall deem
advisable. No termination or amendment of the Plan may, without the consent of
the Optionee to whom any Option shall theretofore have been granted, adversely
affect the rights of such Optionee under such Option.

     22. NOTICES AND OTHER COMMUNICATIONS. All notices and other communications
required or permitted under the Plan shall be effective if in writing and if
delivered or sent by certified or registered mail, return receipt requested (a)
if to the Optionee, at his or her residence address last filed with the Company,
and (b) if to the Company, at 1100 E. Hector Street, Suite 450, Conshohocken, PA
19428, with a copy to its Chief Financial Officer at such address, or to such
other persons or addresses as the Optionee or the Company may specify by a
written notice to the other from time to time.<PAGE>

                                                                     Exhibit 4.1

THIS WARRANT AND THE SHARES OF CAPITAL STOCK ISSUED UPON ANY EXERCISE HEREOF
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR ANY APPLICABLE STATE SECURITIES OR "BLUE-SKY" LAWS AND MAY
NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF
IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM. ADDITIONALLY, THE
TRANSFER OF THIS WARRANT AND THE SHARES OF CAPITAL STOCK ISSUED UPON ANY
EXERCISE HEREOF IS SUBJECT TO THE CONDITIONS SPECIFIED IN SECTION 6.2 OF THE
ASSET PURCHASE AGREEMENT DATED AS OF NOVEMBER 26, 2001 BETWEEN ALLOY, INC.,
ALLOY ACQUISITION SUB, INC. AND MARKETSOURCE CORPORATION (THE "PURCHASE
AGREEMENT") AND NO TRANSFER OF ANY SUCH SECURITIES SHALL BE VALID OR EFFECTIVE
UNTIL SUCH CONDITIONS HAVE BEEN FULFILLED. UPON THE FULFILLMENT OF CERTAIN OF
SUCH CONDITIONS, ALLOY, INC. HAS AGREED TO DELIVER TO THE HOLDER HEREOF A
CERTIFICATE, NOT BEARING THIS LEGEND, FOR THE SECURITIES REPRESENTED HEREBY
REGISTERED IN THE NAME OF THE HOLDER HEREOF. COPIES OF SUCH AGREEMENT MAY BE
OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY THE HOLDER OF RECORD OF THIS
CERTIFICATE TO THE SECRETARY OF ALLOY, INC.

No. MS-001                                                      For the Purchase
                                                               of 100,000 shares
                                                                 of Common Stock

                        WARRANT TO PURCHASE COMMON STOCK

                                       OF

                                  ALLOY, INC.

                            (A DELAWARE CORPORATION)

     ALLOY, INC., a Delaware corporation (the "Company"), for value received,
hereby certifies that MarketSource Corporation (the "Holder"), is entitled,
subject to the terms set forth below, to purchase from the Company, at any time
or from time to time following the Applicable Exercise Eligibility Date (as
defined below) and before the earlier of 5:00 p.m. Eastern Standard Time on the
Applicable Expiration Date and the termination of this Warrant as provided in
Section 8 hereof, up to an aggregate of 100,000 shares of Common Stock, par
value $0.01 per share, of the Company (the "Common Stock"), at a purchase price
equal to $13.78 per share, as may be adjusted upon the occurrence of certain
events as set forth in Section 3 of this Warrant. The shares of stock issuable
upon exercise of this Warrant, and the purchase price per share, are hereinafter
referred to as the "Warrant Stock" and the "Purchase Price," respectively. For
purposes hereof, the term "Applicable Exercise Eligibility Date" means, with
respect to fifty percent (50%) of the shares of Common Stock for which this
Warrant may be exercised, November 26, 2002, and, with respect to
<PAGE>

the remaining shares for which this Warrant may be exercised, November 26, 2003;
provided, however, that in the event that a merger or consolidation of the
--------  -------
Company into another corporation (other than a merger or reorganization
involving only a change in the state of incorporation of the Company or the
acquisition by the Company of other businesses where the Company survives as a
going concern), or the sale of all or substantially all of the Company's capital
stock or assets to any other person, is consummated, the "Applicable Exercise
Eligibility Date" shall mean, with respect to all of the shares of Common Stock
for which this Warrant may be exercised which have not yet become exercisable
hereunder, the effective date of such merger, consolidation or sale. For
purposes hereof, the term "Applicable Expiration Date" means, with respect to
the shares of Common Stock that become eligible for purchase on November 26,
2002, November 25, 2007, and, with respect to the shares of Common Stock that
become eligible for purchase on November 26, 2003, November 25, 2008.

     1.   Exercise.
          --------

          1.1  Manner of Exercise; Payment in Cash.  This Warrant may be
               -----------------------------------
     exercised by the Holder, in whole or in part, by surrendering this Warrant,
     with the purchase form appended hereto as Exhibit A duly executed by the
                                               ---------
     Holder, at the principal office of the Company, or at such other place as
     the Company may designate, accompanied by payment in full of the Purchase
     Price payable in respect of the number of shares of Warrant Stock purchased
     upon such exercise. Payment of the Purchase Price shall be in cash or by
     certified or official bank check payable to the order of the Company.

          1.2  Effectiveness.  Each exercise of this Warrant shall be deemed to
               -------------
     have been effected immediately prior to the close of business on the day on
     which this Warrant shall have been surrendered to the Company as provided
     in Section 1.1 above. At such time, the person or persons in whose name or
     names any certificates for Warrant Stock shall be issuable upon such
     exercise as provided in Section 1.3 below shall be deemed to have become
     the holder or holders of record of the Warrant Stock represented by such
     certificates.

          1.3  Delivery of Certificates.  As soon as practicable after the
               ------------------------
     exercise of this Warrant in whole or in part, and in any event within
     twenty (20) days thereafter, the Company at its sole expense will cause to
     be issued in the name of, and delivered to, the Holder, or, subject to the
     terms and conditions hereof, as such Holder (upon payment by such Holder of
     any applicable transfer taxes) may direct:

               (a) a certificate or certificates for the number of full shares
          of Warrant Stock to which such Holder shall be entitled upon such
          exercise plus, in lieu of any fractional share to which such Holder
          would otherwise be entitled, cash in an amount determined pursuant to
          Section 2 hereof, and

               (b) if such exercise is in part only, a new warrant or warrants
          (dated the date hereof) of like tenor, calling in the aggregate on the
          face or faces thereof for the number of shares of Warrant Stock
          (without giving effect to any adjustment therein) equal to the number
          of such shares called for on the face of this Warrant minus the

                                      -2-
<PAGE>

          number of such shares purchased by the Holder upon such exercise as
          provided in Section 1.1 above.

     2.   Fractional Shares.  The Company shall not be required upon the
          -----------------
exercise of this Warrant to issue any fractional shares, but shall make an
adjustment therefor in cash on the basis of the fair market value of the Warrant
Stock reasonably determined by the Board of Directors of the Company.

     3.   Certain Adjustments.
          -------------------

          3.1  Changes in Common Stock.  If the Company shall (i) combine the
               -----------------------
     outstanding shares of Common Stock into a lesser number of shares, (ii)
     subdivide the outstanding shares of Common Stock into a greater number of
     shares or (iii) issue additional shares of Common Stock as a dividend or
     other distribution with respect to the Common Stock, the number of shares
     of Warrant Stock shall be equal to the number of shares which the Holder
     would have been entitled to receive after the happening of any of the
     events described above if such shares had been issued immediately prior to
     the happening of such event, such adjustment to become effective
     concurrently with the effectiveness of such event. The Purchase Price in
     effect immediately prior to any such combination of Common Stock shall,
     upon the effectiveness of such combination, be proportionately increased.
     The Purchase Price in effect immediately prior to any such subdivision of
     Common Stock or at the record date of such dividend shall upon the
     effectiveness of such subdivision or immediately after the record date of
     such dividend be proportionately reduced.

          3.2  Reorganizations and Reclassifications.  If there shall occur any
               -------------------------------------
     capital reorganization or reclassification of the Common Stock (other than
     a change in par value or a subdivision or combination as provided for in
     Section 3.1), then, as part of any such reorganization or reclassification,
     lawful provision shall be made so that the Holder shall have the right
     thereafter to receive upon the exercise hereof the kind and amount of
     shares of stock or other securities or property which such Holder would
     have been entitled to receive if, immediately prior to any such
     reorganization or reclassification, such Holder had held the number of
     shares of Common Stock which were then purchasable upon the exercise of
     this Warrant. In any such case, appropriate adjustment (as reasonably
     determined by the Board of Directors of the Company) shall be made in the
     application of the provisions set forth herein with respect to the rights
     and interests thereafter of the Holder such that the provisions set forth
     in this Section 3 (including provisions with respect to adjustment of the
     Purchase Price) shall thereafter be applicable, as nearly as is reasonably
     practicable, in relation to any shares of stock or other securities or
     property thereafter deliverable upon the exercise of this Warrant.

          3.3  Merger, Consolidation or Sale of Assets. Subject to the
               ---------------------------------------
     provisions of Section 8, if there shall be a merger or consolidation of the
     Company with or into another corporation (other than a merger or
     reorganization involving only a change in the state of incorporation of the
     Company or the acquisition by the Company of other businesses where the
     Company survives as a going concern), or the sale of all or substantially
     all of the Company's capital stock or assets to any other person, then as a
     part of such transaction, provision shall be made so that the Holder shall
     thereafter be entitled to receive the number

                                      -3-
<PAGE>

     of shares of stock or other securities or property of the Company, or of
     the successor corporation resulting from the merger, consolidation or sale,
     to which the Holder would have been entitled if the Holder had exercised
     its rights pursuant to the Warrant immediately prior thereto. In any such
     case, appropriate adjustment shall be made in the application of the
     provisions of this Section 3 to the end that the provisions of this Section
     3 shall be applicable after that event in as nearly equivalent a manner as
     may be practicable.

          3.4  Certificate of Adjustment.  When any adjustment is required to be
               -------------------------
     made in the Purchase Price, the Company shall mail to the Holder a
     certificate setting forth the Purchase Price after such adjustment and
     setting forth a brief statement of the facts requiring such adjustment.
     Delivery of such certificate shall be deemed to be a final and binding
     determination with respect to such adjustment unless challenged by the
     Holder within twenty (20) days of receipt thereof. Such certificate shall
     also set forth the kind and amount of stock or other securities or property
     into which this Warrant shall be exercisable following the occurrence of
     any of the events specified in this Section 3.

     4.   Compliance with Securities Act.
          ------------------------------

          4.1  Unregistered Securities.  The Holder acknowledges that this
               -----------------------
     Warrant and the Warrant Stock have not been registered under the Securities
     Act of 1933, as amended, and the rules and regulations thereunder, or any
     successor legislation (the "Securities Act"), and agrees not to sell,
     pledge, distribute, offer for sale, transfer or otherwise dispose of this
     Warrant or any Warrant Stock except in accordance with the provisions of
     Section 6.2 of the Purchase Agreement, which provisions are hereby
     incorporated by reference herein.

          4.2  Investment Letter.  Without limiting the generality of Section
               -----------------
     4.1, unless the offer and sale of any shares of Warrant Stock shall have
     been effectively registered under the Securities Act, the Company shall be
     under no obligation to issue the Warrant Stock unless and until the Holder
     shall have executed an investment letter in form and substance satisfactory
     to the Company, including a warranty at the time of such exercise that the
     Holder is acquiring such shares for its own account, for investment and not
     with a view to, or for sale in connection with, the distribution of any
     such shares.

          4.3  Legend.  Certificates delivered to the Holder pursuant to Section
               ------
     1.3 shall bear the following legend or a legend in substantially similar
     form:

          "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
          INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
          1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES OR "BLUE-SKY"
          LAWS. THESE SECURITIES MAY NOT BE SOLD, TRANSFERRED, ASSIGNED,
          PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
          REGISTRATION OR AN EXEMPTION THEREFROM. ADDITIONALLY, THE TRANSFER OF
          THESE SECURITIES IS SUBJECT TO THE CONDITIONS SPECIFIED IN SECTION 6.2
          OF THE ASSET PURCHASE AGREEMENT DATED AS OF NOVEMBER

                                      -4-
<PAGE>

          26, 2001 BETWEEN ALLOY, INC., ALLOY ACQUISITION SUB, INC. AND
          MARKETSOURCE CORPORATION AND NO TRANSFER OF THESE SECURITIES SHALL BE
          VALID OR EFFECTIVE UNTIL SUCH CONDITIONS HAVE BEEN FULFILLED. UPON THE
          FULFILLMENT OF CERTAIN OF SUCH CONDITIONS, ALLOY, INC. HAS AGREED TO
          DELIVER TO THE HOLDER HEREOF A CERTIFICATE, NOT BEARING THIS LEGEND,
          FOR THE SECURITIES REPRESENTED HEREBY REGISTERED IN THE NAME OF THE
          HOLDER HEREOF. COPIES OF SUCH AGREEMENT MAY BE OBTAINED AT NO COST BY
          WRITTEN REQUEST MADE BY THE HOLDER OF RECORD OF THIS CERTIFICATE TO
          THE SECRETARY OF ALLOY, INC."

     5.   Reservation of Stock.  The Company will at all times reserve and keep
          --------------------
available, solely for issuance and delivery upon the exercise of this Warrant,
such shares of Warrant Stock and other stock, securities and property, as from
time to time shall be issuable upon the exercise of this Warrant. The Company
covenants that all shares of Warrant Stock so issuable will, when issued, be
duly and validly issued and fully paid and nonassessable.

     6.   [Reserved.]
           --------

     7.   Replacement of Warrants.  Upon receipt of evidence reasonably
          -----------------------
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and (in the case of loss, theft or destruction) upon delivery of an
indemnity agreement (with surety if reasonably required) in an amount reasonably
satisfactory to the Company, or (in the case of mutilation) upon surrender and
cancellation of this Warrant, the Company will issue, in lieu thereof, a new
Warrant of like tenor.

     8.   Termination Upon Certain Events.   If there shall be a merger or
          -------------------------------
consolidation of the Company with or into another corporation (other than a
merger or reorganization involving only a change in the state of incorporation
of the Company or the acquisition by the Company of other businesses where the
Company survives as a going concern), or the sale of all or substantially all of
the Company's capital stock or assets to any other person, or the liquidation or
dissolution of the Company, then as a part of such transaction, at the Company's
option, either:

          (a) provision shall be made so that the Holder shall thereafter be
     entitled to receive the number of shares of stock or other securities or
     property of the Company, or of the successor corporation resulting from the
     merger, consolidation or sale, to which the Holder would have been entitled
     if the Holder had exercised its rights pursuant to the Warrant immediately
     prior thereto (and, in such case, appropriate adjustment shall be made in
     the application of the provisions of this Section 8(a) to the end that the
     provisions of this Section 3 shall be applicable after that event in as
     nearly equivalent a manner as may be practicable); or

          (b) this Warrant shall terminate on the effective date of such merger,
     consolidation or sale (the "Termination Date") and become null and void,
     provided that if this Warrant shall not have otherwise terminated or
     --------
     expired, (1) the Company shall provide the Holder written notice of such
     Termination Date at least twenty (20) days prior to the

                                      -5-
<PAGE>

     occurrence thereof and (2) the Holder shall have the right until 5:00 p.m.,
     Eastern Standard Time, on the day immediately prior to the Termination Date
     to exercise its rights hereunder to the extent not previously exercised.

     9.   Transferability.  Without the prior written consent of the Company,
          ---------------
this Warrant shall not be assigned, pledged or hypothecated in any way (whether
by operation of law or otherwise) and shall not be subject to execution,
attachment or similar process; provided that, this Warrant may be transferred by
                               -------- ----
the Holder as a dividend, distribution upon liquidation of the Holder or bona
fide gift without consideration. Any attempted transfer, assignment, pledge,
hypothecation or other disposition of the Warrant or of any rights granted
hereunder contrary to the provisions of this Section 9, or the levy of any
attachment or similar process upon the Warrant or such rights, shall be null and
void.

     10.  No Rights as Stockholder.  Until the exercise of this Warrant, the
          ------------------------
Holder shall not have or exercise any rights by virtue hereof as a stockholder
of the Company.

     11.  Notices.  All notices, requests and other communications hereunder
          -------
shall be in writing, shall be either (i) delivered by hand, (ii) made by
facsimile transmission, (iii) sent by overnight courier, or (iv) sent by
registered mail, postage prepaid, return receipt requested. In the case of
notices from the Company to the Holder, they shall be sent to the address
furnished to the Company in writing by the last Holder who shall have furnished
an address to the Company in writing. All notices from the Holder to the Company
shall be delivered to the Company at its offices at 151 West 26th Street,
11th Floor, New York, New York 10001, Attn: Chief Executive Officer or such
other address as the Company shall so notify the Holder. All notices, requests
and other communications hereunder shall be deemed to have been given (i) by
hand, at the time of the delivery thereof to the receiving party at the address
of such party described above, (ii) if made by facsimile transmission, at the
time that receipt thereof has been acknowledged by electronic confirmation or
otherwise, (iii) if sent by overnight courier, on the next business day
following the day such notice is delivered to the courier service, or (iv) if
sent by registered mail, on the fifth business day following the day such
mailing is made.

     12.  Waivers and Modifications. Any term or provision of this Warrant may
          -------------------------
be waived only by written document executed by the party entitled to the
benefits of such terms or provisions. The terms and provisions of this Warrant
may be modified or amended only by written agreement executed by the parties
hereto.

     12.  Headings.  The headings in this Warrant are for convenience of
          --------
reference only and shall in no way modify or affect the meaning or construction
of any of the terms or provisions of this Warrant.

     14.  Governing Law.  This Warrant will be governed by and construed in
          -------------
accordance with and governed by the laws of Delaware, without giving effect to
the conflict of law principles thereof.

                  [Remainder of Page Intentionally Left Blank]

                                      -6-
<PAGE>

     IN WITNESS WHEREOF, this Warrant has be executed by the undersigned as of
this 26th day of November, 2001

                                     ALLOY, INC.

                                     By: /s/ Gina R. DiGioia
                                        -------------------------------
                                     Name:  Gina R. DiGioia
                                          -----------------------------
                                     Title: VP / General Counsel
                                           ----------------------------

                   [Signature Page to Warrant - MarketSource]

                                      -7-
<PAGE>

                                    EXHIBIT A
                                    ---------

                                  PURCHASE FORM
                                  -------------

To:  ALLOY, INC.

     The undersigned, pursuant to the provisions set forth in the attached
Warrant (No. ____), hereby irrevocably elects to purchase ________ shares of the
Common Stock, par value $0.01 per share (the "Common Stock") of ALLOY, INC.,
covered by such Warrant and herewith makes payment of $__________, representing
the full purchase price for such shares at the price per share provided for in
such Warrant. The Common Stock for which the Warrant may be exercised shall be
known herein as the "Warrant Stock".

     The undersigned is aware that the Warrant Stock has not been and will not
be registered under the Securities Act of 1933, as amended (the "Securities
Act") or any state securities laws. The undersigned understands that reliance by
the Company on exemptions under the Securities Act is predicated in part upon
the truth and accuracy of the statements of the undersigned in this Purchase
Form.

     The undersigned represents and warrants that (1) it has been furnished with
all information which it deems necessary to evaluate the merits and risks of the
purchase of the Warrant Stock, (2) it has had the opportunity to ask questions
concerning the Warrant Stock and the Company and all questions posed have been
answered to its satisfaction, (3) it has been given the opportunity to obtain
any additional information it deems necessary to verify the accuracy of any
information obtained concerning the Warrant Stock and the Company and (4) it has
such knowledge and experience in financial and business matters that it is able
to evaluate the merits and risks of purchasing the Warrant Stock and to make an
informed investment decision relating thereto.

     The undersigned hereby represents and warrant that it is purchasing the
Warrant Stock for its own account for investment and not with a view to the sale
or distribution of all or any part of the Warrant Stock.

     The undersigned understands that because the Warrant Stock has not been
registered under the Securities Act, it must continue to bear the economic risk
of the investment for an indefinite period of time and the Warrant Stock cannot
be sold unless it is subsequently registered under applicable federal and state
securities laws or an exemption from such registration is available.

     The undersigned agrees that it will in no event sell or distribute or
otherwise dispose of all or any part of the Warrant Stock unless (1) there is an
effective registration statement under the Securities Act and applicable state
securities laws covering any such transaction involving the Warrant Stock, or
(2) the Company receives an opinion satisfactory to the Company of the
undersigned's legal counsel stating that such transaction is exempt from
registration. The undersigned consents to the placing of a legend on its
certificate for the Warrant Stock stating that the Warrant Stock has not been
registered and setting forth the restriction on transfer
<PAGE>

contemplated hereby and to the placing of a stop transfer order on the books of
the Company and with any transfer agents against the Warrant Stock until the
Warrant Stock may be legally resold or distributed without restriction.

     The undersigned has considered the federal and state income tax
implications of the exercise of the Warrant and the purchase and subsequent sale
of the Warrant Stock.

                                     _______________________________

                                     Dated:_________________________

                                      -2-

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