Document:

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                                                                   Exhibit 10.35

                      SECOND LEASE MODIFICATION AGREEMENT

         Second Lease Modification Agreement ("Second Modification") dated as of
January 28, 2002 between ABNER PROPERTIES COMPANY, c/o Williams Real Estate Co.
Inc., 380 Madison Avenue, New York, New York 10017, as Landlord and ALLOY, INC.
(f/k/a Alloy On-Line, 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
(hereinafter, collectively, 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 (formerly referred to as the "Additional Space", hereinafter, referred to
as "First Additional Space") (Original Demised Premises and First Additional
Space collectively referred to as the "premises" or "demised premises"), as now
occupied, in the building known as 151 West 26th Street, New York, New York (the
"Building") for a term which is to expire on February 28, 2010.

         WHEREAS, Landlord and Tenant now desire to amend the Lease to (i)
provide for Tenant to rent additional space consisting of a portion of the tenth
(10th) floor known as 10th Floor South (see attached floor plan) in the Building
(the "Second Additional Space"); and (ii) 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:

1.       Effective as of the Second Additional Space Commencement Date, as such
term is defined below, the Landlord shall deliver, and Tenant shall accept the
Second Additional Space in "as is" condition and the following amendments to the
Lease with respect to the Second Additional Space only shall become effective,
the intent herein being that Tenant shall pay both (a) the charges set forth in
the Lease in the manner set forth in the Lease for the Original Demised Premises
and First Additional Space plus (b) the charges set forth herein for the Second
Additional Space. Thereupon, the premises demised to Tenant under the Lease
shall be deemed to consist of the Second Additional Space, First Additional
Space and the Original Demised Premises, and the leasing of such Second
Additional Space shall be upon all of the terms and conditions contained in the
Lease except that no work, work allowance or rent concession is to be performed
or granted by Landlord with respect to the Second Additional Space except as set
forth in Exhibit A, and the following amendments to the Lease shall become
effective. For purposes of this Second Modification the term Second Additional
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 agents) enters, uses or occupies any portion
of the Second Additional Space, whichever occurs first

         (i) the annual rental rate for the Second Additional Space only shall
be:
<PAGE>
(a)      Ninety Thousand ($90,000.00) Dollars per year ($7,500.00 per month)
from the Second Additional Space Commencement Date to the last day of the first
(1st) Lease Year, as such term is defined herein;

(b)      Ninety Two Thousand Seven Hundred ($92,700.00) Dollars per year
($7,725.00 per month) from the first day of the second (2nd) Lease Year to the
last day of the second (2nd) Lease Year;

(c)      Ninety Five Thousand Four Hundred Eighty One ($95,481.00) Dollars per
year ($7,956.75 per month) from the first day of the third (3rd) Lease Year to
the last day of the third (3rd) Lease Year;

(d)      Ninety Eight Thousand Three Hundred Forty Five ($98,345.00) Dollars per
year ($8,195.42 per month) from the first day of the fourth (4th) Lease Year to
the last day of the fourth (4th) Lease Year;

(e)      One Hundred One Thousand Two Hundred Ninety Six ($101,296.00) Dollars
per year ($8,441.34 per month) from the first day of the fifth (5th) Lease Year
to the last day of the fifth (5th) Lease Year;

(f)      One Hundred Four Thousand Three Hundred Thirty Five ($l04,335.00)
Dollars per year ($8,694.58 per month) from the first day of the sixth (6th)
Lease Year to the last day of the sixth (6th) Lease Year;

(g)      One Hundred Seven Thousand Four Hundred Sixty Five ($107,465.00)
Dollars per year ($8,955.42 per month) from the first day of the seventh (7th)
Lease Year to the last day of the seventh (7th) Lease Year;

(h)      One Hundred Ten Thousand Six Hundred Eighty Nine ($110,689.00) Dollars
per year ($9,224.08 per month) from the first day of the eighth (8th) Lease Year
to the last day of the eighth (8th) Lease Year; and

(i)      One Hundred Fourteen Thousand Nine ($114,009.00) Dollars per year
($9,500.75 per month) from the first day of the ninth (9th) Lease Year to and
including February 28, 2010;

         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 rent" or the "annual rental rate."

(ii)     The additional rent due for the use of water, as set forth in Article
29 of the Lease, and, the contract price for sprinkler advisory service, as set
forth in Article 30 of the Lease, shall be $20.00 each per month to reflect the
addition of the Second Additional Space;

(iii)    Tenant's Proportionate Tax Share, as set forth in Article 41 of the
Lease shall be 2.083% to reflect the addition of the Second Additional Space and
the base year utilized for computing rent due to Real Estate Tax Increases as
set forth in Article 41 shall be calendar year 2002; and
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(iv)     Supplementing the provisions of Article 45 of the Lease, Landlord, in
its absolute and sole' discretion, may furnish additional electric service to
the Second Additional Space upon receipt of Tenant's written request for such
additional electric, which request shall contain a "load" letter furnished by a
certified electrician which "load" letter reflects, among other things, that the
then existing electric servicing the Second Additional Space is insufficient to
service Tenant's normal office use as measured by that of the average building
tenant which uses its demised premises for general offices.

(v)      The base year utilized for computing additional rent due to Utility
Escalations as set forth in Article 71 (A)(iii) of the Lease shall mean the
calendar year 2002 and the Tenant's Share, as set forth in subparagraph (A)(v)
thereof shall be 2.083% so as to reflect the addition of the Second Additional
Space.

         For purposes of this Second 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 Second Additional Space Commencement
Date unless the Second Additional Space Commencement Date is the first day of
the month, in which event the first Lease Year shall begin on the Second
Additional Space Commencement Date and each Lease Year thereafter shall begin on
an anniversary of the Second Additional Space Commencement Date.

2A. (i) Anything contained herein to the contrary notwithstanding, and provided
Tenant is not then in default in any of the terms, covenants and conditions of
the Lease and this Second Modification, fixed rent payable hereunder for the
first 120 days following the Second Additional Space Commencement Date shall be
abated (i.e. an aggregate sum of $25,000.00).

         (ii) Tenant shall pay the first month's rent due (the first month
following abatement period) and first month's water/sprinkler charge upon
execution of this Second Modification.

2B.        Delay in Substantial Completion

           If Substantial Completion of Landlord's Work is delayed by reason of
any Tenant Delay (as hereinafter defined) and/or Tenant's 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 therefor 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.

           The term "Tenant Delay" shall mean any delay that Landlord may
encounter in the completion of Landlord's Work by reason of any act, neglect,
failure or omission of Tenant, its agents, servants, contractors, architect or
employees, in the performance of Tenant's obligations under this lease,
including, but not limited to:
<PAGE>
         1.       Any delay in submission of or inadequacy of the information
                  which must be provided by Tenant to Landlord which is
                  necessary for Landlord to complete Landlord Work.

         2.       Any delay due to changes made by or on behalf of Tenant, at
                  Tenant's request, regarding Landlord's Work.

         3.       Any delay due to Tenant's request for items to be installed
                  within the demised premises that have a delivery date which
                  does not provide sufficient time for installation prior to the
                  otherwise anticipated date of Substantial Completion or that
                  will delay the installation of any other item of Landlord's
                  work; and

         4.       Any delay due to Tenant performing work or otherwise
                  interfering with Substantial Completion of Landlord's work.

3.       In Article 3 1(b) the words "between 1 p.m. and 5 p.m." shall be
deleted therefrom and substituted in its place and location shall be the words
"between 1 p.m. and 7 p.m."

4.       Article 80 is hereby deemed added to the Lease:

         "80. SECURITY - LETTER OF CREDIT

In lieu of the cash security deposit as set forth under Article 32 hereof,
Tenant may furnish Landlord with an irrevocable standby letter of credit in full
amount of the security deposit required under Article 32 issued by a bank which
is a member of the New York Clearinghouse Association payable at sight to
Landlord which conforms in all material respects to the form set forth below
which must provide for a final expiration date no sooner than thirty (30) days
after the last date for which the letter of credit is otherwise required
hereunder. In addition, Tenant acknowledges that it shall pay upon Landlord's
demand, as additional rent under this lease, any and all costs or fees charged
in connection with the Letter of Credit that arise due to (i) Landlord's sale of
transfer of the building; or (ii) the addition, deletion or modification of any
beneficiaries under the Letter of Credit. Furthermore, Tenant hereby agrees to
cooperate, at its expense, with Landlord to promptly execute and deliver to
Landlord any and all modifications, amendments, and replacements of the Letter
of Credit, as Landlord may reasonably request to carry out the terms and
conditions of the Article 80.

           (NAME OF BANK)

No.                   Irrevocable Standby Letter of Credit

                                  (Date)

[Name of Landlord]

c/o Williams Real Estate Co. Inc.
380 Madison Avenue
New York, NY 10017
<PAGE>
Dear Sirs:

           We hereby authorize you to value on (name of bank), NEW YORK, NEW
YORK FOR ACCOUNT OF

UP TO THE AGGREGATE OF

                              DOLLARS US Currency.

AVAILABLE BY YOUR DRAFTS AT SIGHT, accompanied by:

Your written statement that you are entitled to draw against the Letter of
Credit pursuant to a Lease dated as of ______________________, ______ between
[Name of Landlord] and ________________ Tenant.

           It is a condition of this Letter of Credit that it shall be extended
for additional periods of one year from the present and each successive future
expiration date hereof unless at least thirty (30) days prior to the then
current expiration date we shall notify you in writing that we elect not to
renew this Letter of Credit for such additional one (1) year period. Upon
receipt by you of such notice you may draw hereunder by means of your draft on
us a sight accompanied by your written statement that you have not received an
appropriate renewal of this Letter of Credit. Any notice of non-renewal shall be
sent to you by registered or certified mail (return receipt requested) at the
above address with an additional copy to be sent simultaneously to the "General
Counsel, Williams Real Estate Co. Inc., 380 Madison Avenue, New York, New York
10017" by registered or certified mail (return receipt requested) also.

           Drafts hereunder may be drawn not later than ________________________
and any subsequent expiration date pursuant hereto.

           All drafts drawn under this Credit must bear on their face the clause
"DRAWN UNDER (name of bank) CREDIT NO. ___________________".

This credit is transferable in whole but not in part. However, no transfer shall
be effective unless advice of such transfer is received by us in the form
attached signed by you.

           Except so far as otherwise expressly stated, this Credit is subject
to the Uniform Customs and Practice for Documentary Credits (1993 Revision)
International Chamber of Commerce, Publication No. 400.

           We hereby agree with the Drawers of drafts drawn in compliance with
the terms of this Credit, that the same shall be duly honored on presentation to
the drawee."

                                         Very truly yours,
                                         [NAME OF BANK]

                                         BY:______________
                                         AUTHORIZED SIGNATURE
                                         New York, NY
<PAGE>
                                         Date:__________________________

5.         Effectiveness

           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 Second Modification shall not bind the
Landlord and the Tenant until executed and delivered.

6.         Ratification

           This Second Modification 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 Second
Modification, 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: /s/ [signature unreadable]                    BY: /s/ Jonathan P. Rosen
------------------------------                        --------------------------
As to Landlord

Witness                                           ALLOY, INC.

BY: /s/ Gina R. DiGioia                           BY: /s/ Jim Johnson
--------------------------                            --------------------------
As to Tenant                                             Jim Johnson, President
                                                         66 Second Avenue
                                                         New York, NY 10003

<PAGE>
Exhibit "A" (Workletter) annexed to and forming part of Lease dated January 28,
2002 between ABNER PROPERTIES COMPANY, as Landlord and ALLOY, INC., as Tenant
for 10th Floor South (Second 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.       Within six (6) months of the Second Additional Space Commencement Date,
         Landlord shall:

                  Replace the existing windows in the demised premises with new
                  building standard "thermopane" windows.

2.       Within four (4) months of the Second Additional Space Commencement
         Date, Landlord shall: Supply and install one (1) 15 ton new building
         standard air conditioning unit. Tenant to maintain in accordance with
         the provisions of Article 68 of the Lease.

3.       Demolish and remove all interior partitions.

4.       Supply and maintain 200 amps 3 Phase Electric Service to the Second
         Additional Space for Tenant's sole and exclusive use.

5.       Patch, where necessary, and scrape and sand the existing hardwood
         flooring and apply one (1) coat of polyurethane floor finish and one
         (1) coat of sealer.

6.       Supply and install combination locks on all the bathroom doors.

7.       Patch, where necessary, and paint the existing painted surfaces of the
         entire premises in one (1) coat of Tenant's choice of one of Landlord's
         building standard latex color paints.

8.       Deliver premises in broom clean condition.

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
<PAGE>
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.

Tenant shall, if required hereunder, make elections and deliver any plans and
specifications to Landlord for Landlord's approval on or before
___________________, 2001. 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.

TENANT: By: /s/ Jim Johnson               LANDLORD By: /s/ Jonathan P. Rosen
       --------------------                           ----------------------<PAGE>
                                                                   Exhibit 10.36

                              ASSIGNMENT AND ASSUMPTION OF LEASE

1.       ALLOY, INC., a Delaware corporation, having an address at 151 West 26th
         Street, New York, NY 10001 ("Assignor"), in consideration of TEN and
         NO/100 ($10.00) DOLLARS and other good and valuable consideration paid
         by GOLDFARB & ABRANDT, a New York general partnership, having an
         address at 200 Park Avenue South, New York, NY 10003 ("Assignee"),
         hereby assigns unto Assignee, all of Assignor's right, title and
         interest in and to a certain lease (the "Lease") dated November 23,
         1999 by and between EMPIRE STATE BUILDING COMPANY ("Landlord"), as
         landlord, and Assignor's predecessor-in-interest, CASS COMMUNICATIONS,
         INC., as tenant, having a term expiring on April 30, 2010 for premises
         (the "Premises") consisting of portions of the eleventh (11th) floor
         called "Room 1101 and Rooms 1133-1136" in the building known as "The
         Empire State Building" located at 350 Fifth Avenue, in the County, City
         and State of New York, as more particularly described in the Lease,
         together with all of Assignor's right, title and interest in and to any
         and all pre-paid rents and the security deposit thereunder, subject to
         the provisions hereof.

2.       TO HAVE AND TO HOLD the same unto Assignee, its successors and assigns
         from the "Effective Date" (defined below) and for all the rest of the
         term of the Lease, subject to the rents and all of the other terms
         provisions, covenants and conditions therein contained.

3.       Assignee hereby assumes from and after the Effective Date the
         performance of all of the terms, provisions, covenants and conditions
         of the Lease accruing on and after the Effective Date and agrees to pay
         the rent, additional rent and all other charges provided for and
         reserved in the Lease accruing on and after the Effective Date and will
         well and truly perform all of the terms, provisions, covenants and
         conditions of the Lease required to be paid, kept, performed or
         observed by the lessee pursuant to the Lease on and after the Effective
         Date, all with full force and effect.

4.       Assignee hereby agrees that the obligations herein assumed by Assignee
         shall inure jointly and severally to Landlord and its successors and
         assigns.

5.       Assignor and Assignee acknowledge and agree that notwithstanding this
         Assignment, Assignor remains jointly and severally liable with Assignee
         to Landlord for the performance of all terms, provisions, covenants and
         conditions set forth in the Lease.

6.       Assignor represents to Assignee that: the Lease has not been assigned
         previously other than to Assignor as successor-in-interest to Cass
         Communications, Inc.; the Premises has not been sublet, in whole or in
         part; the Lease has not been modified and is in full force and effect;
         to the best of its knowledge, no circumstance exists and no event has
         occurred which, with the giving of notice, the passage of time, or
         both, would constitute a default of either party to the Lease; to the
         best of its knowledge, neither party to the Lease has any claims
         against the other party to the Lease; Assignor is up to date in all of
         the payments required to be made under the Lease as of today and will
         be up to date on the Effective Date.
<PAGE>
7.       Assignor shall indemnify, defend and hold Assignee harmless on demand,
         from and against any damages, costs, fees, and expenses (including, but
         not limited to, reasonable attorneys' fees) of Assignee suffered or
         incurred by reason of Assignee's liability to Landlord for any breach
         or default of Assignor under the Lease prior to the Effective Date or
         otherwise and for any other breach of this Agreement at any time.

8.       Assignee shall indemnify, defend and hold Assignor harmless on demand,
         from and against any damages, costs, fees, and expenses of Assignor
         suffered or incurred by reason of Assignor's liability to Landlord for
         any breach or default of Assignee under the Lease on and after the
         Effective Date or otherwise and for any other breach of this Agreement
         at any time.

9.       The parties shall cooperate reasonably with each other and Assignor
         shall be the party, if any, to this Agreement that has to pay any
         professional fees, costs and expenses required to be paid for, or
         reimbursed to Landlord in connection with the application for
         Landlord's consent to this Agreement.

10.      Upon Assignee's execution of this Agreement, Assignee is paying
         Assignor $45,000.00 (the "G&A Security") to secure Assignee's
         performance of its obligations under the Lease on and after the
         Effective Date, without limiting Assignee's liability to the amount of
         the G&A Security. (Such $45,000.00 payment shall be refunded promptly
         to Assignee if this Agreement is cancelled for lack of Landlord's
         consent). If, when, as, and to the extent that Assignee collects any or
         all of the Security Deposit held by the Landlord under the Lease, and
         if and to the extent that Landlord shall retain, not return or apply
         all or part of the Security Deposit it holds to or for a default of
         Assignee under the Lease, Assignor shall be entitled to retain, not
         return or apply all or part of the G&A Security to or for a default of
         Assignee under this Agreement, without limiting Assignor's remedies to
         the amount of the G&A Security. If, when, as and to the extent that
         Landlord shall refund or return to Assignor all or part of the
         "Security Deposit" held by Landlord under the Lease, Assignor shall
         return or refund the G&A Security to Assignee promptly.

11.      After the Effective Date, promptly upon its receipt and collection of
         the G & A Security, Assignor shall place it in a separate interest
         bearing bank account. Interest shall accumulate and be disbursed to the
         party entitled to the principal when the final payment of the principal
         is made. Otherwise, the G & A Security shall be held by Assignor
         subject to the applicable provisions of the Lease relating to the
         Security Deposit held by Landlord.

12.      If Assignee has timely performed all of its obligations under the Lease
         and this Agreement, and the Lease remains in full force and effect, on
         the third (3rd) anniversary of the Effective Date, the G&A Security
         shall be reduced to $30,000.00 and the $15,000.00 reduction shall be
         effected by a prompt refund to Assignee of $15,000.00 out of the cash
         held as the G&A Security.

13.      The "Effective Date" means the date that is three (3) days after the
         date on which Assignor and Assignee have signed and delivered this
         Agreement and Landlord has issued its signed written consent to this
         Agreement in form reasonably satisfactory to

                                       2
<PAGE>
         Assignor and Assignee. Anything contained herein to the contrary
         notwithstanding, if Landlord does not issue its signed written consent
         to this Agreement within thirty (30) days after it has been signed and
         delivered by Assignor and Assignee, either Assignor or Assignee may
         elect to cancel this Agreement by giving five (5) days prior notice of
         such cancellation to the other party, which notice of cancellation
         shall be effective (5) days after it is given provided that Landlord
         has not issued its signed written consent to this Agreement within five
         (5) days after the date on which such cancellation notice is given. If
         this Agreement is cancelled for lack of Landlord's consent pursuant to
         this paragraph, the G&A Security shall be returned by to Assignee
         promptly without interest.

14.      Nothing contained herein or in any consent agreement that may be issued
         by the Landlord shall allow any other or further assignments, of the
         Lease or subletting of the Premises, in whole or in part, nor shall the
         use of the Premises be changed except insofar as Landlord shall
         acknowledge: that Assignee is a law firm engaged in the practice of law
         with the Premises to be used only as law offices for such purposes
         only; that attorneys at law may operate in an "Of Counsel" or other
         independent contractor capacity with exclusive use of a private office
         within the Premises and common use of all other facilities at the
         Premises; that a law firm has to have discretion to admit new partners,
         allow existing partners to, and for it to merge with, acquire, or be
         acquired by other law firms from time to time, with no change in
         membership to require Landlord's consent as long as Messrs. Goldfarb
         and Abandt remain managing members of the firm.

15.      On the "Effective Date", Assignor shall deliver and Assignee shall
         accept, keys to, and possession of the Premises in as is" condition
         with the items of personal property (the "Furniture and Phones") listed
         in Exhibit #1, attached hereto and made a part hereof, left in the
         Premises for Assignee's use at Assignee's expense in "as is" condition.

16.      Assignee is paying Assignor $20,000.00 upon execution hereof in
         consideration of the Furniture and Phones as described above. If this
         Agreement is cancelled for lack of the Landlord's consent, such
         $20,000.00 shall be refunded to Assignee promptly without interest. A
         copy of the bill of sale for the Furniture and Phones is attached
         hereto and made a part hereof as Exhibit #2. (The bill of sale will be
         signed and delivered by Assignor to Assignee on the Effective Date.)

17.      The "Rent Date" means April 1, 2002. Anything contained herein to the
         contrary notwithstanding, Assignor shall be responsible for paying the
         "fixed annual rent" set forth in paragraph 46 of the Lease (exclusive
         of the Electricity Rent Inclusion Factor for the Premises under
         paragraph 41 of the Lease) plus the "Porter's Wage Escalation" plus the
         "Tax Escalation" under paragraph 33 of the Lease prior to the Rent
         Date. Such payments shall be made by Assignor directly to the Landlord
         if the Landlord will accept them from Assignor or paid by Assignee to
         the Landlord and reimbursed to Assignee by Assignor if Landlord will
         not accept such payments directly from Assignor.

18.      Assignor covenants and agrees to pay Assignee, commencing on the Rent
         Date, and on a monthly basis on the first day of each month thereafter,
         in consideration of this Agreement, a sum equal to the difference
         between (i) the monthly "fixed annual rent" set forth in paragraph 46
         of the Lease (exclusive of the Electricity Rent Inclusion Factor for

                                       3
<PAGE>
         the Premises under paragraph 41 of the Lease) plus the monthly
         "Porter's Wage Escalation" in an amount due prior to January 1, 2003
         under paragraph 23 of the Lease plus the monthly "Tax Escalation" in an
         amount due prior to January 1, 2003 under paragraph 33 of the Lease and
         (ii) the "Monthly Imputed Rent" set forth in Table "A" below. (If the
         Porter's Wage Escalation and/or the Tax Escalation are not billed on a
         monthly basis, an appropriate adjustment shall be made to reflect the
         monthly amount thereof for the purposes of making the computations
         described in this paragraph. Once the annual amount of the Porter's
         Wage Escalation and the annual amount of the Tax Escalation in and for
         calendar year 2002 are known, those amounts shall be divided by twelve
         (12) and used to make monthly computations as provided above for
         monthly payments to be made by Assignor to Assignee for the balance of
         the term of the Lease. For the purposes of this Agreement only, and
         without changing the Lease or relieving any party of liability to
         Landlord at any time, the Porter's Wage Escalation and the Tax
         Escalation for the Assignee under the Lease will both have a base
         period of January 1, 2002 to December 31, 2002, as Assignor shall be
         paying for, or reimbursing to Assignee the annual amount of those
         escalation charges at the rates in effect during the year ending
         December 31, 2002. The balance of the amounts being paid by Assignor to
         Assignee periodically on the first day of each month in advance from
         and after the Rent Date for the balance of the term of the Lease are
         set forth in Table "A" below.)

                                    Table "A"

<TABLE>
<CAPTION>
Period                               Annual Imputed Rent               Monthly Imputed Rent
<S>                                  <C>                               <C>
April 1, 2002 to March 31, 2005               $137,332.00              $11,444.33
April 1, 2005 to March 31, 2008               $142,614.00              $11,884.50
April 1, 2008 to April 30, 2010               $153,178.00              $12,764.83
</TABLE>

19.      All notices permitted or required hereunder shall be in writing
         addressed to the parties at their respective addresses herein above set
         forth and sent by nationally recognized overnight courier (e.g.,
         Express Mail, Airborne Express, Federal Express, DHL Overnight Delivery
         Service and UPS) for next business day delivery with an additional
         non-mandatory so called "courtesy copy" to the attorneys of the parties
         as follows: Joel B. Singer, Esq., 100 West 57 Street, New York, NY
         10019, as Assignor's attorney; and Jeffrey E. Weissmann, Esq., Cassin
         Cassin & Joseph LLP, 300 East 42nd Street, New York, New York 10017, as
         Assignee's attorney. Each party may change its attorneys or the address
         for notices to it on seven (7) days prior written notice. Notices sent
         as provided herein shall be deemed to have been given on the date of
         receipt, refusal or first attempted delivery, as the case may be. The
         parties shall provide tracking numbers to each other as necessary to
         confirm delivery. After the Effective Date, Assignee shall notify
         Landlord and Assignor of its new address for notices at the Premises,
         and Assignee shall provide Assignor with copies of any notices that it
         receives from Landlord promptly upon receipt thereof, subject to the
         understanding that Landlord will be sending all notices to Assignee in
         the first instance at the address designated in writing to Landlord
         therefor.

                                       4
<PAGE>
20.      Assignee shall pay Assignor, prior to the Effective Date, the amount of
         any prepaid rents attributable to rents for any period occurring after
         the Effective Date to reflect the rents paid by Assignor to Landlord
         for any portion of the Lease term that will elapse after the Effective
         Date, subject, however, to adjustments between Assignor and Assignee
         under the provisions of paragraphs 17 and 18 of this Agreement.
         Assignor states, to the best of its knowledge, that, other than the
         rents for the month of February, 2002 and the Security Deposit, as of
         the Effective Date, it wilt not have paid any advance rents and the
         ERIF should be the only item that has to be adjusted between the
         parties to this agreement as of the Effective Date.

21.      Assignor represents that the holdover situation described in paragraph
         16(B) of the Lease no longer exists.

22.      Each party covenants and represents to the other that it dealt with no
         real estate broker, agent or finder in connection with this Agreement
         other than Loeb Partners Realty and GVA/Williams Real Estate Co. Inc.
         Assignor shall pay the commissions to Loeb Partners Realty and
         GVA/Williams Real Estate Co. Inc. pursuant to its separate agreements
         with those brokers. Each party shall indemnify, defend and hold the
         other party harmless on demand from and against any liability for real
         estate brokerage commission claims arising from the indemnitor's breach
         of the representations contained in of this paragraph.

23.      From and after the Effective Date, any and all disputes between
         Assignor and Assignee relating to amounts to be paid by either of them
         to the other under paragraphs 17 and 18 of this Agreement shall be
         resolved exclusively as provided in this paragraph. Such dispute shall
         be submitted in writing to the attorneys for the parties. If the
         attorneys for the parties are unable to reach an agreement in writing
         to resolve the dispute that is acceptable to both parties within ten
         (10) days, the dispute shall be resolved exclusively by resort to
         arbitration before the American Arbitration Association in New York
         City under its Rules for the Arbitration of Commercial Disputes and
         judgment upon the award rendered in such arbitration proceeding may be
         enforced in any court having jurisdiction. The prevailing party in any
         action or proceeding between Assignor and Assignee shall be entitled to
         recover its reasonable attorneys' fees, interest, costs and
         disbursements.

24.      This Agreement shall be binding on and inure to the benefit of, the
         parties hereto and their respective heirs, .successors and assigns.
         This is the final and complete agreement of the parties to this
         Agreement for the transaction to which it relates; it shall supersede
         any other prior understandings; it cannot be modified, except in
         writing signed by the party to be charged; its meaning and effect shall
         be determined without any presumption against any party as the drafter;
         it may be executed in counterparts, each of which shall be deemed to be
         a complete original when it has been signed and delivered by each party
         to the other.

                                       5
<PAGE>
         IN WITNESS WHEREOF, the parties hereto have executed this instrument as
of the 1st day of February, 2002.

                                                   ALLOY, INC.

Witnessed by:                                      By: /s/ Samuel A. Gradess
/s/ Gina R. DiGioia                                   -------------------------
----------------------                                Name:  Samuel A. Gradess
                                                             Title: CFO

                                                   GOLDFARB & ABRANDT

Witnessed by:                                      By: /s/ David Goldfarb
/s/ [Signature unreadable]                            --------------------------
--------------------------                            Name:  David Goldfarb
                                                      Title:  Partner

                                       6
<PAGE>
                                  BILL OF SALE

         This BILL OF SALE is made as of___________ ___, 2002 by _____________,
a ________________, having its principal place of business located at
___________________, ___ Floor, _______________ ("Seller") and
__________________, a _____________________, having an address at
______________________, Suite __________, ___________, ________________________
("Buyer"). The terms "Seller" and "Buyer" in this Bill of Sale shall include the
respective successors and assigns of said parties.

         FOR TEN DOLLARS ($10.00) and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Seller hereby grants,
bargains, sells, aliens, releases, conveys and confirms unto Buyer, all of
Seller's right, title and interest in and to the assets more fully described on
Exhibit A hereto (collectively, the "Assets").

         Seller is delivering and Buyer is accepting the Assets "as is", "where
is" and without any warranties of any kind whatsoever except Seller represents
and warrants that Seller owns the Assets, free and clear of all liens, claims
and encumbrances and that Seller has the power and authority to sell the Assets.

         TO HAVE AND TO HOLD the same unto Buyer, forever.

         IN WITNESS WHEREOF, this Bill of Sale has been executed by Seller as of
the ___ day of _____________ 2002.

                                                   _____________________________

                                                   By:    ______________________
                                                   Name: _______________________
                                                   Title: ______________________
STATE OF______________)

                         : ss.:
COUNTY OF_____________)

         On the ____ day of ____________, in the year 2002, before me, the
undersigned personally appeared ___________________, personally known to me or
proved to me on the basis of satisfactory evidence to be the individual whose
name is subscribed to the within instrument and acknowledged to me that s/he
executed the same in her/his capacity, and that by her/his signature on the
instrument, the individual, or the person upon behalf of which the individual
acted, executed the instrument.

                       ___________________________________
                       Signature and Office of individual
                              taking acknowledgment

                                       7
<PAGE>
                                    EXHIBIT A

                                     ASSETS

FURNITURE INVENTORY
EMPIRE STATE BUILDING Room 1101
1/28/02

Reception

Small Settee (new) w/cherry wood arms
Club Chair (new) w/cherry wood arms
Oval cherry wood coffee table
Square cherry wood end table

Conference Room

Conference table 12' X 4'
Conf. chairs beige leather (12)
Side chairs beige leather (7)
Credenza 5'-9'" X 1' -6"
Marker board with doors

Private Offices
Conference end table desk with return and credenza, 30" 2 drawer
file cabinet (10)
Task chair in navy fabric (2)
Cork boards (10)
Metal bookcase 3' X 1-6" 3 shelves (10)
Guest chair in navy fabric w/black plastic / metal (20)
Executive desk with return and credenza (1)
Executive credenza with hutch 6' X I '-7"(l)
Guest chairs wood and fabric (6)
36" Small round conference table (1)

Workstations
Low metal and fabric partition workstations (8)

Pantry
42" Round plastic laminate tables (2)
Side chairs plastic and black metal (10)

Store Room
Metal shelves 4' X 2' 6 shelves high (3)
FURNITURE INVENTORY cont'

                                       8
<PAGE>
File Cabinets

42" lateral metal file cabinet 5 drawer high (4)
36" lateral metal file cabinet 5 drawer high (9)
30" lateral metal file cabinet 5 drawer high (5)
36" lateral metal file cabinet 3 drawer high (3)
30" lateral metal file cabinet 3 drawer high (2)
42" lateral metal file cabinet 2 drawer high (4)
30" lateral metal file cabinet 1 drawer high (1)

42" two door metal storage cabinet 2 shelves high (4)
36" two door metal storage cabinet 2 shelves high (9)
30" two door metal storage cabinet 2 shelves high (5)
Storage cabinet 2 door 3' X 1' -6" X 7' (1)
Open bins 30" X 10" (9)

Nortel Norstar Phones (22)
Norstar receptionist phone (1)
Canon NP 4050 Copier (1)
Large cork board (1)
Large fake potted plants (3)

                                       9
<PAGE>
                                  BILL OF SALE

         This BILL OF SALE is made as of February , 2002 by ALLOY, INC., a
Delaware corporation, having its principal place of business located at 151 West
26th Street, New York, NY 10001 1lth Floor, ("Seller") and _________________, a
_____________________, having an address at ______________________ Suite
__________, __________ _______________ ________ ("Buyer"). The terms "Seller"
and "Buyer" in this Bill of Sale shall include the respective successors and
assigns of said parties.

         FOR TEN DOLLARS ($10.00) and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Seller hereby grants,
bargains, sells, aliens, releases, conveys and confirms unto Buyer, all of
Seller's right, title and interest in and to the assets more fully described on
Exhibit A hereto (collectively, the "Assets").

         Seller is delivering and Buyer is accepting the Assets "as is", "where
is" and without any warranties of any kind whatsoever except Seller represents
and warrants that Seller owns the Assets, free and clear of all liens, claims
and encumbrances and that Seller has the power and authority to sell the Assets.

         TO HAVE AND TO HOLD the same unto Buyer, forever.

         IN WITNESS WHEREOF, this Bill of Sale has been executed by Seller as of
the 6th day of February, 2002.

                                                  ALLOY INC.
                                                  By:  /s/ Samuel A. Gradess
                                                     ---------------------------
                                                  Name: Samuel A. Gradess
                                                     ---------------------------
                                                  Title: CFO
                                                     ---------------------------

STATE OF   New York) :ss:
        -------------
COUNTY OF  New York)
         ------------

         On the 6th day of February, in the year 2002, before me, the
undersigned personally appeared, Samuel A. Gradess, personally known to me or
proved to me on the basis of satisfactory evidence to be the individual whose
name is subscribed to the within instrument and acknowledged to me that s/he
executed the same in her/his capacity, and that by her/his signature on the
instrument, the individual, or the person upon behalf of which the individual
acted, executed the instrument.

By: /s/ Gina R. DiGioia, VP/General Counsel
-------------------------------------------
Signature and Office of individual
taking acknowledgment

                                       10
<PAGE>
                                    EXHIBIT A

                                     ASSETS

FURNITURE INVENTORY
EMPIRE STATE BUILDING Room 1101
1/28/02

Reception

Small Settee (new) w/cherry wood arms
Club Chair (new) w/cherry wood arms
Oval cherry wood coffee table
Square cherry wood end table

Conference Room

Conference table 12' X 4'
Conf., chairs beige leather (12)
Side chairs beige leather (7)
Credenza 5'-9" X 1'-6"
Marker board with doors

Private Offices

Conference end table desk with return and credenza, 30" 2 drawer
file cabinet (10)
Task chair in navy fabric (2)
Cork boards (10)
Metal bookcase 3' X 1-6" 3 shelves (10)
Guest chair in navy fabric w/black plastic / metal (20)
Executive desk with return and credenza (1)
Executive credenza with hutch 6' X 1'-7"(1)
Guest chairs wood and fabric (6)
36" Small round conference table (1)

Workstations

Low metal and fabric partition workstations (8)

Pantry
42" Round plastic laminate tables (2)
Side chairs plastic and black metal (10)

Store Room

Metal shelves 4' X 2' 6 shelves high (3)

File Cabinets

                                       11
<PAGE>
42" lateral metal file cabinet 5 drawer high (4)
36" lateral metal file cabinet 5 drawer high (9)
30" lateral metal file cabinet 5 drawer high (5)
36" lateral metal file cabinet 3 drawer high (3)
30" lateral metal file cabinet 3 drawer high (2)
42" lateral metal file cabinet 2 drawer high (4)
30" lateral metal file cabinet 1 drawer high (1)

42" two door metal storage cabinet 2 shelves high (4)
36" two door metal storage cabinet 2 shelves high (9)
30" two door metal storage cabinet 2 shelves high (5)
Storage cabinet 2 door 3 X 1'-6" X 7' (1)
Open bins 30" X 10" (9)

Nortel Norstar Phones (22)
Norstar receptionist phone (1)
Canon NP 4050 Copier (I) Large
corkboard (1) Large fake potted plants (3)

                                       12

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