STOCK REPURCHASE AGREEMENT

Exhibit 10.1

STOCK REPURCHASE AGREEMENT

THIS STOCK REPURCHASE AGREEMENT (the “ Agreement ”) is made as of the 19th day of December, 2006, by and among Alloy, Inc. , a Delaware corporation (the “ Company ”), and Matthew L. Feshbach (“ Feshbach ”) and certain entities controlled by Feshbach as listed on Schedule I hereto (each, a “ Stockholder ” and collectively, the “ Stockholders ”).

WHEREAS , the Stockholders currently own shares of common stock, $0.01 par value per share, of the Company (“ Common Stock ”);

WHEREAS , the Stockholders desire for the Company to repurchase such number of shares of Common Stock owned by the Stockholders as set forth on Schedule I hereto (hereinafter, the “ Shares ”) upon the terms set forth herein;

WHEREAS , subject to the terms set forth herein, the Company wishes to repurchase the Shares; and

WHEREAS , effective as of the date hereof, Feshbach has resigned as a director of the Company.

NOW, THEREFORE , in consideration of the mutual covenants herein contained and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto covenant and agree as follows:

1. Repurchase of the Shares and Restricted Shares. The Company hereby repurchases from each Stockholder, and each Stockholder hereby sells, transfers and conveys to the Company, the number of Shares set forth opposite such Stockholder’s name on Schedule I hereto (with respect to each Stockholder, such “ Stockholder’s Shares ”) at a price per share equal to $10.50 for an aggregate purchase price of ten million dollars and fifty cents ($10,000,000.50) (the “Purchase Price”). Further, pursuant to those certain restricted stock agreements executed by the Company and Feshbach, the Company hereby elects to repurchase from Feshbach, and Feshbach hereby sells, transfers and conveys to the Company, 6,248 shares of restricted stock granted by the Company to Feshbach in connection with his services as a board member of the Company which rights of repurchase by the Company with respect to such shares has not yet lapsed as of the date hereof (the “ Restricted Shares ”) at an aggregate price per share equal to $0.01 (the “ Restricted Share Purchase Price ”).

2. Settlement.

(a) The repurchase and sale of the Stockholder’s Shares will take place on the date hereof and shall be settled by use of the Deposit/Withdrawal at Custodian (“ DWAC ”) system on Tuesday, December 26, 2006 on which date (i) Stockholder will by 10 AM EST place for

withdrawal the Stockholder’s Shares by the Company’s transfer agent American Stock Transfer & Trust Company (“AST”), DWAC Account # 2941, and (ii) Company will deliver instructions to AST to withdraw the Stockholder’s Shares. Upon confirmation that the Stockholder’s Shares have been received by AST, Company pay shall pay the Purchase Price and the Restricted Purchase Price by issuing a wire to the Stockholder in accordance with the instructions set forth on Exhibit A for the Purchase Price For purposes of this Agreement, the term “ Business Day ” means any day other than a Saturday, Sunday or other day that is a statutory holiday under the federal laws of the United States or the laws of the State of New York.

(b) On the date hereof, the Company shall take action to repurchase the Restricted Shares, including without limitation, delivering instructions to Merrill Lynch, the Company’s stock plan administrator to cancel the Restricted Shares, and the Company will pay to Feshbach the Restricted Share Purchase Price therefor by check to be mailed to Feshbach at the address set forth on Exhibit A.

3. Representations and Warranties of the Stockholders. The Stockholders, jointly and severally, represent and warrant to the Company as follows:

(a) Organization and Standing of the Stockholders. Each Stockholder (if not an individual) is duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation or organization and has full corporate power and authority to conduct its business as presently conducted and to own such Stockholder’s Shares and, with respect to Feshbach, the Restricted Shares.

(b) Ownership of Shares. Each Stockholder is the record and beneficial owner of such Stockholder’s Shares and, with respect to Feshbach, the Restricted Shares, free and clear of any liens, encumbrances, security interests or restrictions on transfer and has good, marketable and unencumbered title to such Stockholder’s Shares and, with respect to Feshbach, the Restricted Shares, and full legal right, power and authority to enter into this Agreement and to sell, transfer, convey, assign, and deliver such Stockholder’s Shares and, with respect to Feshbach, the Restricted Shares, pursuant to this Agreement.

(c) Authority for Agreement. The execution and delivery of this Agreement by each Stockholder, and the consummation by each Stockholder of the transactions contemplated hereby, have been duly authorized by all necessary corporate or similar action on the part of such Stockholder (if not an individual). This Agreement has been duly executed and delivered by each Stockholder, and constitutes a valid and binding obligation of each Stockholder, enforceable against each Stockholder in accordance with its terms.

(d) Conflicts. Neither the execution and delivery of this Agreement, the consummation of the transactions contemplated hereby, or the compliance with the provisions hereof by each Stockholder, will conflict with or result in any breach of any terms, conditions or provisions of, or constitute a default under, or require a consent or waiver under, the organizational documents of any Stockholder (if not an individual) or any agreement to which any Stockholder is a party or by which any Stockholder or any of its properties or assets are subject or bound, or violate any judgment, order, statute, rule, regulation or other provision of law applicable to any Stockholder.

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(e) Litigation. There is no action, proceeding or investigation pending or, to the knowledge of the Stockholders, threatened against any Stockholder, or any basis therefor known to any Stockholder, which questions the validity or legality, or otherwise relates to, this Agreement or any of the transactions contemplated hereby.

(f) Consents. No consent, approval, order or authorization of, or registration, qualification, designation, declaration or filing with, any person, entity or governmental authority is required on the part of any Stockholder in connection with the execution and delivery of this Agreement, or the repurchase of any Stockholder’s Shares and, with respect to Feshbach, the Restricted Shares, or the other transactions as contemplated by this Agreement.

(g) Experience and Knowledge. Each Stockholder acknowledges and agrees that it (i) has extensive knowledge and experience in financial and business matters, (ii) has had access to all information as to the Company as any Stockholder has desired, (iii) has made its own inquiry and investigation into, and, based thereon, has formed an independent judgment concerning, the operations of the Company and its business and (iv) has received sufficient and satisfactory answers to all questions posed to the Company to evaluate the merits and risks of the transactions contemplated by this Agreement.

(h) Disclosure. The Stockholder represents that it has no knowledge of a material fact about the operations, affairs, condition or prospects of the business or the financial condition of the Company that has not been disclosed to the Company.

4. Representations and Warranties of the Company. The Company represents and warrants to each Stockholder as follows:

(a) Organization and Standing of the Company. The Company is duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation and has full corporate power and authority to conduct its business as presently conducted.

(b) Authority for Agreement. The execution and delivery of this Agreement by the Company, and the consummation by the Company of the transactions contemplated hereby, have been duly authorized by all necessary corporate action on the part of the Company. This Agreement has been duly executed and delivered by the Company, and constitutes a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms.

(c) Conflicts. Neither the execution and delivery of this Agreement, the consummation of the transactions contemplated hereby, or the compliance with the provisions hereof by the Company, will conflict with or result in any breach of any terms, conditions or provisions of, or constitute a default under, or require a consent or waiver under, the organizational documents of the Company or any agreement to which the Company is a party or by which Company or any of its properties or assets are subject or bound, or violate any judgment, order, statute, rule, regulation or other provision of law applicable to the Company.

(d) Litigation. There is no action, proceeding or investigation pending or, to the knowledge of the Company, threatened against the Company, or any basis therefor known to the

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Company, which questions the validity or legality, or otherwise relates to, this Agreement or any of the transactions contemplated hereby.

(e) Consents. No consent, approval, order or authorization of, or registration, qualification, designation, declaration or filing with, any person, entity or governmental authority is required on the part of the Company in connection with the execution and delivery of this Agreement or the consummation of the transactions as contemplated by this Agreement, other than applicable securities law filings.

(f) Disclosure. The Company represents that it has no knowledge of a material fact about the operations, affairs, condition or prospects of the business or the financial condition of the Company that would be required to be disclosed to the public, but has not been so disclosed .

5. Survival of Representations, Warranties and Covenants. All representations, warranties and covenants contained herein shall survive the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby.

6. Release. Each of the Stockholders does hereby remise, release and forever discharge the Company, its subsidiaries and affiliates, each of their respective successors and assigns and each of the present and former stockholders, directors, officers, employees, agents, affiliates and representatives of each of the foregoing (each a “ Company Released Party ”) of and from any and all actions, causes of action, s