FORM DEBENTURE CONVERSION AGREEMENT

This DEBENTURE CONVERSION AGREEMENT (this "Agreement"), dated as of September 6th, 2006, is entered into by and between Alloy, Inc., a Delaware corporation ("Alloy" or the "Company"), and (the "Holder").

RECITALS

WHEREAS, pursuant to an indenture entered into between the Company and Deutsche Bank Trust Company Americas, as trustee, dated as of July 23, 2003 (as amended, modified or supplemented, the "Indenture"), the Company issued its 5.375% Convertible Senior Debentures due 2023 (the "Debentures") in the aggregate principal amount of$69,300,000;

WHEREAS, under certain circumstances set forth in the Indenture, the Debentures originally were convertible at the option of the holders into shares of the Company's common stock, par value$.01 per share (the "Alloy Common Stock"), at an initial conversion price of$8.375 per share;

WHEREAS, by virtue of the Company's spin off (the "Spin off") of its wholly owned subsidiary, dELiA*s, Inc. ("dELiA*s") in December 2005 and the Company's one-for-four reverse stock split effected on February 1, 2006, and the provisions of the Third Supplemental Indenture thereto, dated as of August 22, 2006, each$1,000 in principal amount of the Debentures is now convertible into 29.85075 shares of Alloy Common Stock and 59.702 shares of dELiA*s' common stock, par value$.001 per share, (the "dELiA*s Common Stock");

WHEREAS, Holder is the holder and beneficial owner of Debentures in the aggregate principal amount of (the "Conversion Debentures"); and

WHEREAS, subject to the terms and conditions contained herein, Holder is willing to convert all of the Conversion Debentures into the consideration set forth in Section 2 (b) (ii) hereof, all as provided herein.

NOW, THEREFORE, in consideration of the premises and the mutual promises, representations and warranties made herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

AGREEMENT

1. Agreement to Convert Debentures. At the Closing (as defined below), and pursuant to the terms and conditions of this Agreement, Holder shall surrender the Conversion Debentures to the Company for conversion in accordance with the provisions of Section 12.2 of the Indenture.

2. The Closing; Deliveries.

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