Alloy Designs, Inc. 115 West 30th Street, #302 - #304 New York, NY 10001 Phone: (212) 244-4307 Fax: (212) 244-4311 August 14, 1998 Robert E. Kerson 29 Haviland Road Harrison, NY 10528 Dear Mr. Kerson: Alloy Designs, Inc. ("Alloy" or the "Company") is...

   1
                                                                   Exhibit 10.31

                               Alloy Designs, Inc.
                        000 Xxxx 00xx Xxxxxx, #000 - #000
                               Xxx Xxxx, XX 00000
                              Phone: (000) 000-0000
                               Fax: (000) 000-0000

August 14, 0000

Xxxxxx X. Xxxxxx
00 Xxxxxxxx Xxxx
Xxxxxxxx, XX  00000

Dear Xx. Xxxxxx:

Alloy Designs, Inc. ("Alloy" or the "Company") is pleased to present you with
the following Letter Agreement (the "Letter Agreement"). This Letter Agreement
supplements the Non-Qualified Stock Option Agreement between you and Alloy dated
August 14th, 1998 (the "Option Agreement"), pursuant to which the Company
granted you an option (the "Option") to purchase 250,000 shares of Common Stock,
$0.01 par value per share ("Common Stock"), of the Company. In consideration of
the mutual covenants set forth herein and in the Option Agreement, and for other
good and valuable consideration, Alloy hereby agrees as follows:

For as long as the Option remains outstanding, the Company will pay you a bonus
at the time of any complete or partial exercise of the Option (each a "Bonus")
in an amount sufficient to accomplish the following:

o     To provide you with funds to pay fully the applicable Option exercise
      price(s).

If the foregoing accurately reflects our agreement related to these matters,
please execute this Letter Agreement in the space provided below.

Sincerely,


Xxxxxx X. Xxxxxxx
Alloy Designs, Inc.
Director and Corporate Secretary

Agreed and Accepted:


__________________________________
Xxxxxx X. Xxxxxx