EXHIBIT
        10.1

       

      Interactive
        Television Networks, Inc.

      Shares
        of Series A Convertible Preferred

      Stock
        and Common Stock Warrants

       

      SUBSCRIPTION
        AGREEMENT

       

      December
        21, 2005

      


       

      M.A.G.
        Capital, LLC

      Mercator
        Momentum Fund, L.P.

      Mercator
        Momentum Fund III, L.P.

      Monarch
        Pointe Fund, Ltd.

      c/o
        M.A.G. Capital, LLC

      555
        South Flower Street, Suite 4200

      Los
        Angeles, California 90071

      


      Ladies
        and Gentlemen:

       

      Interactive
        Television Networks, Inc., a Nevada corporation (the "Company"),
        hereby confirms its agreement with M.A.G. Capital, LLC ("MAG"),
        Mercator
        Momentum Fund, L.P. ("MMF"),
        Mercator Momentum Fund III, L.P. ("MMF
        III"),
        and Monarch Pointe Fund, Ltd. ("Monarch")
        as set forth below. Each of MAG, MMF, MMF III and Monarch are sometimes referred
        to herein as a "Purchaser"
        and together as the "Purchasers".

       

      1.  The
        Securities.
        Subject to the terms and conditions herein contained, the Company agrees
        to
        issue and sell to the Purchasers (a) an aggregate of 3,333,333 shares of
        its
        Series A Convertible Preferred Stock (the "Series
        A Stock"),
        which shall be convertible into shares (the "Conversion
        Shares")
        of the Company's Common Stock, par value $0.001 per share (the "Common
        Stock"),
        in accordance with the formula set forth in the Series A Certificate of
        Designation further described below and (b) warrants, substantially in the
        form
        attached hereto at Exhibit
        A
        (the "Warrants"),
        to acquire up to a total of 265,000
        shares of Common Stock (the "Warrant
        Shares"),
        in accordance with the terms and conditions set forth in Section 3 hereof.
        The
        rights, preferences and privileges of the Series A Stock are as set forth
        in the
        Certificate of Designation of Preferences and Rights of Series A Convertible
        Preferred Stock as filed with the Secretary of State of the State of Nevada
        (the
        "Series
        A Certificate of Designation")
        in the form attached hereto as Exhibit
        B.
        The number of Conversion Shares and Warrant Shares that any Purchaser may
        acquire at any time are subject to limitation in the Series A Certificate
        of
        Designation and in the Warrants, respectively, so that the aggregate number
        of
        shares of Common Stock of which such Purchaser and all persons affiliated
        with
        such Purchaser and/or MAG have beneficial ownership (calculated pursuant
        to Rule
        13d-3 of the Securities Exchange Act of 1934, as amended) does not at any
        time
        exceed 9.99% of the Company's then outstanding Common Stock.

       

      
        
          
          

        

        
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      The
        Series A Stock, the Conversion Shares, the Warrants and the Warrant Shares
        are
        sometimes herein collectively referred to as the "Securities."
        This
        Agreement, the Warrants, the filed Series A Certificate of Designation, and
        the
        Registration Rights Agreement by and among the Company and the Purchasers,
        entered into concurrently herewith and attached hereto as Exhibit
        C,
        are
        sometimes herein collectively referred to as the "Transaction
        Documents."

       

      The
        Securities will be offered and sold to the Purchasers without such offers
        and
        sales being registered under the Securities Act of 1933, as amended (together
        with the rules and regulations of the Securities and Exchange Commission
        (the
        "SEC")
        promulgated thereunder, the "Securities
        Act"),
        in reliance on exemptions therefrom.

       

      In
        connection with the sale of the Securities, the Company has made available
        (including electronically via the SEC's EDGAR system) to Purchasers the
        Company's periodic and current reports, forms, schedules, proxy statements
        and
        other documents (including exhibits and all other information incorporated
        by
        reference) filed with the SEC under the Securities Exchange Act of 1934,
        as
        amended (the "Exchange
        Act").
        The Registration Statement on Form SB-2 filed with the SEC on December 19,
        2005
        and the Company's Annual Report on Form 10-KSB for the fiscal year ended
        April
        30, 2005, and all subsequent reports, forms, schedules, statements, documents,
        filings and amendments filed by the Company with the SEC under the Exchange
        Act,
        are collectively referred to as the "Disclosure
        Documents."
        All references in this Agreement to financial statements and schedules and
        other
        information which is "contained," "included" or "stated" in the Disclosure
        Documents (or other references of like import) shall be deemed to mean and
        include all such financial statements and schedules, documents, exhibits
        and
        other information which is incorporated by reference in the Disclosure
        Documents.

       

      2.  Representations
        and Warranties of the Company.
        Except as set forth in the schedule attached hereto, the Company represents
        and
        warrants to and agrees with Purchasers as follows:

       

      (a)    The
        Disclosure Documents as of their respective dates did not, and will not (after
        giving effect to any updated disclosures therein) as of the Closing Date,
        contain any untrue statement of a material fact or omit to state a material
        fact
        necessary to make the statements therein, in the light of the circumstances
        under which they were made, not misleading. The Disclosure Documents and
        the
        documents incorporated or deemed to be incorporated by reference therein,
        at the
        time they were filed or hereafter are filed with the SEC, complied and will
        comply, at the time of filing, in all material respects with the requirements
        of
        the Securities Act and/or the Exchange Act, as the case may be, as
        applicable.

       

      (b)    Schedule
        A attached hereto sets forth a complete list of the subsidiaries of the
        Company (the "Subsidiaries"). Each of the Company and
        its Subsidiaries has been duly incorporated and each of the Company and the
        Subsidiaries is validly existing and in good standing as a corporation under
        the
        laws of its jurisdiction of incorporation, with the requisite corporate power
        and authority to own its properties and conduct its business as now conducted
        as
        described in the Disclosure Documents and is duly qualified to do business
        as a
        foreign corporation in good standing in all other jurisdictions where the
        ownership or leasing of its properties or the conduct of its business requires
        such qualification, except where the failure to be so qualified would not,
        individually or in the aggregate, have a material adverse effect on the
        business, condition (financial or other), properties or results of operations
        of
        the Company and the Subsidiaries, taken as a whole (any such event, a
        "Material Adverse Effect"); as of the Closing Date,
        the Company will have the authorized, issued and outstanding capitalization
        set
        forth in on Schedule B attached hereto (the "Company
        Capitalization"); except as set forth in the Disclosure Documents
        or on Schedule A, the Company does not have any Subsidiaries or own
        directly or indirectly any of the capital stock or other equity or long-term
        debt securities of or have any equity interest in any other person; all of
        the
        outstanding shares of capital stock of the Company and the Subsidiaries have
        been duly authorized and validly issued, are fully paid and nonassessable
        and
        were not issued in violation of any preemptive or similar rights and are
        owned
        free and clear of all liens, encumbrances, equities, and restrictions on
        transferability (other than those imposed by the Securities Act and the state
        securities or "blue sky" laws) or voting; except as set forth in the Disclosure
        Documents, all of the outstanding shares of capital stock of the Subsidiaries
        are owned, directly or indirectly, by the Company; except as set forth in
        the
        Disclosure Documents, no options, warrants or other rights to purchase from
        the
        Company or any Subsidiary, agreements or other obligations of the Company
        or any
        Subsidiary to issue or other rights to convert any obligation into, or exchange
        any securities for, shares of capital stock of or ownership interests in
        the
        Company or any Subsidiary are outstanding; and except as set forth in the
        Disclosure Documents or on Schedule C, there is no agreement,
        understanding or arrangement among the Company or any Subsidiary and each
        of
        their respective stockholders or any other person relating to the ownership
        or
        disposition of any capital stock of the Company or any Subsidiary or the
        election of directors of the Company or any Subsidiary or the governance
        of the
        Company's or any Subsidiary's affairs, and, if any, such agreements,
        understandings and arrangements will not be breached or violated as a result
        of
        the execution and delivery of, or the consummation of the transactions
        contemplated by, the Transaction Documents. 

       

      
        
          
          

        

        
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      (c)    The
        Company
        has the requisite corporate power and authority to execute, deliver and perform
        its obligations under the Transaction Documents. Each of the Transaction
        Documents has been duly and validly authorized by the Company and, when executed
        and delivered by the Company, will constitute a valid and legally binding
        agreement of the Company, enforceable against the Company in accordance with
        its
        terms except as the enforcement thereof may be limited by (A) bankruptcy,
        insolvency, reorganization, fraudulent conveyance, moratorium or other similar
        laws now or hereafter in effect relating to or affecting creditors' rights
        generally or (B) general principles of equity and the discretion of
        the
        court before which any proceeding therefore may be brought (regardless of
        whether such enforcement is considered in a proceeding at law or in equity)
        (collectively, the "Enforceability
        Exceptions").

       

      (d)    The
        shares of
        Series A Stock and the Warrants have been duly authorized and, when issued
        upon
        payment thereof in accordance with this Agreement, will have been validly
        issued, fully paid and non-assessable. The Conversion Shares issuable have
        been
        duly authorized and validly reserved for issuance, and when issued upon
        conversion of the Series A Stock in accordance with the terms of the Series
        A
        Certificate of Designation, will have been validly issued, fully paid and
        non-assessable. The Warrant Shares have been duly authorized and validly
        reserved for issuance, and when issued upon exercise of the Warrants in
        accordance with the terms thereof, will have been validly issued, fully paid
        and
        non-assessable. The Common Stock of the Company conforms to the description
        thereof contained in the Disclosure Documents. The stockholders of the Company
        have no preemptive or similar rights with respect to the Common
        Stock.

       

      (e)      No
        consent, approval,
        authorization, license, qualification, exemption or order of any court or
        governmental agency or body or third party is required for the performance
        of
        the Transaction Documents by the Company or for the consummation by the Company
        of any of the transactions contemplated thereby, or the application of the
        proceeds of the issuance of the Securities as described in this Agreement,
        except for such consents, approvals, authorizations, licenses, qualifications,
        exemptions or orders (i) as have been obtained on or prior to the
        Closing
        Date, (ii) as are not required to be obtained on or prior to the Closing
        Date that will be obtained when required, or (iii) the failure to
        obtain
        which would not, individually or in the aggregate, have a Material Adverse
        Effect.

       

      
        
          
          

        

        
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      (f)    Except
        as set
        forth on Schedule D, none of the Company or the Subsidiaries is (i) in
        material violation of its articles of incorporation or bylaws (or similar
        organizational document), (ii) in breach or violation of any statute, judgment,
        decree, order, rule or regulation applicable to it or any of its properties
        or
        assets, which breach or violation would, individually or in the aggregate,
        have
        a Material Adverse Effect, or (iii) except as described in the Disclosure
        Documents, in default (nor has any event occurred which with notice or passage
        of time, or both, would constitute a default) in the performance or observance
        of any obligation, agreement, covenant or condition contained in any contract,
        indenture, mortgage, deed of trust, loan agreement, note, lease, license,
        franchise agreement, permit, certificate or agreement or instrument to which
        it
        is a party or to which it is subject, which default would, individually or
        in
        the aggregate, have a Material Adverse Effect.

       

      (g)    The
        execution, delivery and performance by the Company of the Transaction Documents
        and the consummation by the Company of the transactions contemplated thereby
        and
        the fulfillment of the terms thereof will not (a) violate, conflict
        with or
        constitute or result in a breach of or a default under (or an event that,
        with
        notice or lapse of time, or both, would constitute a breach of or a default
        under) any of (i) the terms or provisions of any contract, indenture,
        mortgage, deed of trust, loan agreement, note, lease, license, franchise
        agreement, permit, certificate or agreement or instrument to which any of
        the
        Company or the Subsidiaries is a party or to which any of their respective
        properties or assets are subject, (ii) the Certificate of Incorporation
        or
        bylaws of any of the Company or the Subsidiaries (or similar organizational
        document) or (iii) any statute, judgment, decree, order, rule or regulation
        of any court or governmental agency or other body applicable to the Company
        or
        the Subsidiaries or any of their respective properties or assets or
        (b) result in the imposition of any lien upon or with respect to any
        of the
        properties or assets now owned or hereafter acquired by the Company or any
        of
        the Subsidiaries; which violation, conflict, breach, default or lien would,
        individually or in the aggregate, have a Material Adverse Effect.

       

      (h)    The
        audited
        consolidated financial statements included in the Disclosure Documents present
        fairly the consolidated financial position, results of operations, cash flows
        and changes in shareholders' equity of the entities, at the dates and for
        the
        periods to which they relate and have been prepared in all material respects
        in
        accordance with generally accepted accounting principles applied on a consistent
        basis; the interim un-audited consolidated financial statements included
        in the
        Disclosure Documents present fairly the consolidated financial position,
        results
        of operations and cash flows of the entities, at the dates and for the periods
        to which they relate subject to year-end audit adjustments and have been
        prepared in all material respects in accordance with generally accepted
        accounting principles applied on a consistent basis with the audited
        consolidated financial statements included therein; the selected financial
        and
        statistical data included in the Disclosure Documents present fairly the
        information shown therein and have been prepared and compiled in all material
        respects on a basis consistent with the audited financial statements included
        therein, except as otherwise stated therein; and each of the auditors previously
        engaged by the Company or to be engaged in the future by the Company is an
        independent certified public accountant as required by the Securities Act
        for an
        offering registered thereunder.

       

      
        
          
          

        

        
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      (i)    Except
        as
        described in the Disclosure Documents, there is not pending or, to the knowledge
        of the Company, threatened any action, suit, proceeding, inquiry or
        investigation, governmental or otherwise, to which any of the Company or
        the
        Subsidiaries is a party, or to which their respective properties or assets
        are
        subject, before or brought by any court, arbitrator or governmental agency
        or
        body, that, if determined adversely to the Company or any such Subsidiary,
        would, individually or in the aggregate, have a Material Adverse Effect or
        that
        seeks to restrain, enjoin, prevent the consummation of or otherwise challenge
        the issuance or sale of the Securities to be sold hereunder or the application
        of the proceeds therefrom or the other transactions described in the Disclosure
        Documents.

       

      (j)    The
        Company
        and the Subsidiaries own or possess adequate licenses or other rights to
        use all
        patents, trademarks, service marks, trade names, copyrights and know-how
        that
        are necessary to conduct their businesses as described in the Disclosure
        Documents. None of the Company or the Subsidiaries has received any written
        notice of infringement of (or knows of any such infringement of) asserted
        rights
        of others with respect to any patents, trademarks, service marks, trade names,
        copyrights or know-how that, if such assertion of infringement or conflict
        were
        sustained, would, individually or in the aggregate, have a Material Adverse
        Effect.

       

      (k)    Each
        of the
        Company and the Subsidiaries possesses all licenses, permits, certificates,
        consents, orders, approvals and other authorizations from, and has made all
        declarations and filings with, all federal, state, local and other governmental
        authorities, all self-regulatory organizations and all courts and other
        tribunals presently required or necessary to own or lease, as the case may
        be,
        and to operate its respective properties and to carry on its respective
        businesses as now or proposed to be conducted as set forth in the Disclosure
        Documents ("Permits"), except where the failure to
        obtain such Permits would not, individually or in the aggregate, have a Material
        Adverse Effect and none of the Company or the Subsidiaries has received any
        notice of any proceeding relating to revocation or modification of any such
        Permit, except as described in the Disclosure Documents and except where
        such
        revocation or modification would not, individually or in the aggregate, have
        a
        Material Adverse Effect.

       

      (l)    Subsequent
        to
        September 30, 2005 and except as described in the Company’s Quarterly Report on
        Form 10-QSB for the quarter ended September 30, 2005, the Company's Annual
        Report on Form 10-KSB for the year ended April 30, 2005, as amended, or in
        the
        Registration Statement on Form SB-2 filed with the SEC on December 19, 2005
        (i) the Company and the Subsidiaries have not incurred any material
        liabilities or obligations, direct or contingent, or entered into any material
        transactions not in the ordinary course of business or (ii) the Company
        and
        the Subsidiaries have not purchased any of their respective outstanding capital
        stock, or declared, paid or otherwise made any dividend or distribution of
        any
        kind on any of their respective capital stock or otherwise (other than, with
        respect to any of such Subsidiaries, the purchase of capital stock by the
        Company), (iii) there has not been any material increase in the long-term
        indebtedness of the Company or any of the Subsidiaries, (iv) there
        has not
        occurred any event or condition, individually or in the aggregate, that has
        a
        Material Adverse Effect, and (v) the Company and the Subsidiaries
        have not
        sustained any material loss or interference with respect to their respective
        businesses or properties from fire, flood, hurricane, earthquake, accident
        or
        other calamity, whether or not covered by insurance, or from any labor dispute
        or any legal or governmental proceeding.

       

      
        
          
          

        

        
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      (m)    There
        are no
        material legal or governmental proceedings nor are there any material contracts
        or other documents required by the Securities Act to be described in a
        prospectus that are not described in the Disclosure Documents. Except as
        described in the Disclosure Documents, none of the Company or the Subsidiaries
        is in default under any of the contracts described in the Disclosure Documents,
        has received a notice or claim of any such default or has knowledge of any
        breach of such contracts by the other party or parties thereto, except for
        such
        defaults or breaches as would not, individually or in the aggregate, have
        a
        Material Adverse Effect.

       

      (n)    Each
        of the
        Company and the Subsidiaries has good and marketable title to all real property
        described in the Disclosure Documents as being owned by it and good and
        marketable title to the leasehold estate in the real property described therein
        as being leased by it, free and clear of all liens, charges, encumbrances
        or
        restrictions, except, in each case, as described in the Disclosure Documents
        or
        such as would not, individually or in the aggregate, have a Material Adverse
        Effect. All material leases, contracts and agreements to which the Company
        or
        any of the Subsidiaries is a party or by which any of them is bound are valid
        and enforceable against the Company or any such Subsidiary, are, to the
        knowledge of the Company, valid and enforceable against the other party or
        parties thereto and are in full force and effect, in each case subject to
        the
        Enforceability Exceptions.

       

      (o)    Each
        of the
        Company and the Subsidiaries has filed all necessary federal, state and foreign
        income and franchise tax returns, except where the failure to so file such
        returns would not, individually or in the aggregate, have a Material Adverse
        Effect, and has paid all taxes shown as due thereon; and other than tax
        deficiencies which the Company or any Subsidiary is contesting in good faith
        and
        for which adequate reserves have been provided in accordance with generally
        accepted accounting principles, there is no tax deficiency that has been
        asserted against the Company or any Subsidiary that would, individually or
        in
        the aggregate, have a Material Adverse Effect.

       

      (p)    None
        of the
        Company or the Subsidiaries is, or immediately after the Closing Date will
        be,
        required to register as an "investment company" or a company "controlled
        by" an
        "investment company" within the meaning of the Investment Company Act of
        1940,
        as amended (the "Investment Company
        Act").

       

      
        
          
          

        

        
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      (q)    Since
        January
        2002 none of the Company or the Subsidiaries or, to the knowledge of any
        of such
        entities' directors, officers, employees, agents or controlling persons,
        has
        taken, directly or indirectly, any action for the purpose of causing the
        stabilization or manipulation of the price of the Common Stock.

       

      (r)    None
        of the
        Company, the Subsidiaries or any of their respective Affiliates (as defined
        in
        Rule 501(b) of Regulation D under the Securities Act) directly,
        or
        through any agent, engaged in any form of general solicitation or general
        advertising (as those terms are used in Regulation D under the Securities
        Act) in connection with the offering of the Securities or engaged in any
        other
        conduct that would cause such offering to constitute a public offering within
        the meaning of Section 4(2) of the Securities Act. Assuming the accuracy
        of
        the representations and warranties of the Purchaser in Section 6 hereof,
        it
        is not necessary in connection with the offer, sale and delivery of the
        Securities to the Purchaser in the manner contemplated by this Agreement
        to
        register any of the Securities under the Securities Act.

       

      (s)    There
        is no
        strike, labor dispute, slowdown or work stoppage with the employees of the
        Company or any of the Subsidiaries which is pending or, to the knowledge
        of the
        Company or any of the Subsidiaries, threatened.

       

       (t)    Each
        of the
        Company and the Subsidiaries carries general liability insurance coverage
        comparable to other companies of its size and similar business.

       

       (u)    Each
        of the
        Company and the Subsidiaries maintains internal accounting controls which
        provide reasonable assurance that (A) transactions are executed in
        accordance with management's authorization, (B) transactions are recorded
        as necessary to permit preparation of its financial statements and to maintain
        accountability for its assets, and (C) access to its material assets
        is
        permitted only in accordance with management's authorization and (D) the
        values and amounts reported for its material assets are compared with its
        existing assets at reasonable intervals.

       

      (v)    The
        Company
        does not know of any claims for services, either in the nature of a finder's
        fee
        or financial advisory fee, with respect to the offering of the Securities
        and
        the transactions contemplated by the Transaction Documents.

       

      (w)    The
        Common
        Stock is traded on the Over-the-Counter Bulletin Board (the "OTC
        BB"). Except as described in the Disclosure Documents, the Company
        currently is not in violation of, and the consummation of the transactions
        contemplated by the Transaction Documents will not violate, any rule of the
        National Association of Securities Dealers. 

       

      (x)    The
        Company
        is eligible to use Form SB-2 for the resale of the Conversion Shares by
        Purchaser or their transferees and the Warrant Shares by Purchasers or their
        transferees. The Company has no reason to believe that it is not capable
        of
        satisfying the registration or qualification requirements (or an exemption
        therefrom) necessary to permit the resale of the Conversion Shares and the
        Warrant Shares under the securities or "blue sky" laws of any jurisdiction
        within the United States.

       

      
        
          
          

        

        
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        (y)        Except
          as set
          forth on Schedule E, to the Company's knowledge, none of the officers or
          directors of the Company (i) has been convicted of any crime (other
          than traffic violations  or misdemeanors not
          involving
          fraud) or is currently under investigation or indictment
          for any
          such crime, (ii) has been found by a court or governmental agency
          to have
          violated any securities or commodities law or to have committed
          fraud or is
          currently a party to any legal proceeding in which either is alleged, (iii)
          has been the subject of a proceeding under the bankruptcy
          laws or any
          similar state laws, or (iv) has been an officer, director, general
          partner,
          or managing member of an entity which has been the subject of such
          a
          proceeding.

      

       

      (z)        
        Representations of the Company regarding IBD Securities. The Company
        represents and warrants to the Purchasers that the IBD Securities to be acquired
        by it hereunder are being acquired for its own account for investment and
        with
        no intention of distributing or reselling such IBD Securities or any part
        thereof or interest therein in any transaction which would be in violation
        of
        the securities laws of the United States of America or any State. Nothing
        in
        this Agreement, however, shall prejudice or otherwise limit the Company's
        right
        to sell or otherwise dispose of all or any part of such shares of common
        stock
        of Interactive Brand Development, Inc. under an effective registration statement
        under the Securities Act and in compliance with applicable state securities
        laws
        or under an exemption from such registration. By executing this Agreement,
        the
        Company further represents that it does not have any contract, undertaking,
        agreement or arrangement with any person to sell, transfer or grant
        participation to any person with respect to any of the IBD Securities. The
        Company understands that the IBD Securities have not been registered under
        the
        Securities Act and may not be offered, resold, pledged or otherwise transferred
        except (i) pursuant to an exemption from registration under the Securities
        Act or pursuant to an effective registration statement under the Securities
        Act
        and (ii) in accordance with all applicable securities laws of the
        states of
        the United States and other jurisdictions. The Company represents and warrants
        to the Purchasers that it is an "accredited investor" within the meaning
        of Rule
        501(a) of Regulation D under the Securities Act. The Company represents and
        warrants to the Purchasers that the Company did not learn of the opportunity
        to
        acquire IBD Securities through any form of general advertising or public
        solicitation. The Company acknowledges that, other than as expressly set
        forth
        herein, with respect to the acquisition by the Company of the IBD Securities
        (defined below), the Purchasers make no representation to, and the Company
        is
        not relying on, any representations of the Purchasers (or any agent or
        representative of the Purchasers). The Company further acknowledges that,
        notwithstanding any requirement to the contrary contained in the IBD Agreements,
        the Purchasers have not obtained the consent or approval of Interactive Brand
        Development, Inc. to transfer the IBD Securities or assign the IBD Agreements
        to
        the Company and the Purchasers shall have no liability arising out the failure
        to obtain such consent or approval.

       

      3.  Purchase,
        Sale, Exchange and Delivery of the Securities.
        (a) On the basis of the representations, warranties, agreements and
        covenants herein contained and subject to the terms and conditions herein
        set
        forth, the Company agrees to issue and sell to the Purchasers, and Purchasers
        agree to purchase from the Company, a total of 3,333,333 shares of Series
        A
        Stock. The purchase price for the foregoing shares of Series A Stock shall
        consist of (i) the following securities issued by Interactive Brand Development,
        Inc. ("IBD"):
        (1) 34,988 shares of Series D Convertible Preferred Stock (the “Series
        D Preferred Stock”)
        held by Monarch, (2) 11,657 shares of Series D Preferred Stock held by MMF
        III,
        (3) 11,269 shares of Series D Preferred Stock held by MMF, (4) 34,000 shares
        of
        Series E Convertible Preferred Stock held by Monarch, (v) 200,000
        shares of
        restricted common stock held by Monarch (collectively, the "IBD
        Securities"),
        (ii) the assignment to the Company of all of Purchasers' rights under
        the
        IBD Agreements, and (iii) an aggregate of $2,000,000 in cash. In
        connection with the purchase and sale of Series A Stock, for no additional
        consideration, the Purchasers will receive Warrants to purchase a total of
        265,000 shares of Common Stock, as set forth below. The respective number
        of
        shares of Series A Stock to be purchased by each Purchaser and the respective
        number of Warrant Shares which may be acquired by each Purchaser are set
        forth
        on the signature page hereto. The
        term “IBD
        Agreements”
        shall mean and include all of the agreements, certificates and instruments
        entered into by the Purchasers, or any of them, and IBD in connection with
        the
        issuance to the Purchasers of the IBD Securities and which are set forth
        on
Exhibit
        D
        hereto.

       

      
        
          
          

        

        
          -8-

          
            

          

        

        
          
          

        

         

        (b)     Subject
          to the fulfillment of each of the conditions to closing set forth herein,
          the
          closing of the transactions described herein (the
          "Closing") shall take place on December 27, 2005 or
          such later date as may be specified by the parties (the "Closing
          Date"). On the Closing Date, Purchasers shall acquire 3,333,333
          shares of Series A Stock and the Warrants. On the Closing Date, the Company
          shall deliver to Purchasers (i) a certificate in definitive form
          for
          3,333,333 shares of Series A Stock issued to the respective Purchasers,
          (ii) warrants for the purchase of the total amount of 265,000 shares
          to the respective Purchasers, (iii) the Transaction Documents, each
          duly
          executed on behalf of the Company, and (iv) that certain Registration Rights
          Agreement dated as of December 21, 2005 among MAG, MMF, MMF III, Monarch
          and the
          Company with respect to 500,000 shares of Common Stock and Warrants for
          the
          purchase of an additional 2,000,000 shares of Common Stock, duly executed
          on
          behalf of the Company. On the Closing Date, Purchasers shall deliver (i)
          the IBD
          Securities, (or a stock power duly endorsed in blank for such shares),
          (ii)
          certificates representing the IBD Securities, (iii) $2,000,000 by wire
          transfer
          of immediately available funds to an account as directed by the Company,
          and
          (iv) the Subscription Agreement and Registration Rights Agreement, each
          duly
          executed on behalf of Purchasers. The Closing will occur when all documents
          and
          instruments necessary or appropriate to effect the transactions contemplated
          herein are exchanged by the parties and all actions taken at the Closing
          will be
          deemed to be taken simultaneously.

      

       

      4.  Certain
        Covenants of the Company.
        The Company covenants and agrees with Purchasers as follows:

       

      (a)    None
        of the
        Company or any of its Affiliates will sell, offer for sale or solicit offers
        to
        buy or otherwise negotiate in respect of any "security" (as defined in the
        Securities Act) which would be integrated with the sale of the Securities
        in a
        manner which would require the registration under the Securities Act of the
        Securities.

       

      (b)    The
        Company
        will not become, at any time prior to the expiration of three years after
        the
        Closing Date, an open-end investment company, unit investment trust, closed-end
        investment company or face-amount certificate company that is or is required
        to
        be registered under the Investment Company Act.

       

      (c)    None
        of the
        proceeds of the Series A Stock will be used to reduce or retire any insider
        note
        or convertible debt held by an officer or director of the Company.

       

      
        
          
          

        

        
          -9-

          
            

          

        

        
          
          

        

      

      (d)    The
        Conversion Shares and the Warrant Shares will be eligible for trading on
        the OTC
        BB or such market on which the Company's shares are subsequently listed or
        traded, immediately following the effectiveness of the Registration Statement.
        

       

      (e)    The
        Company
        will do and perform all things required to be done and performed by it under
        this Agreement and the other Transaction Documents and to satisfy all conditions
        precedent on its part to the obligations of the Purchasers to purchase and
        accept delivery of the Securities. 

       

      5.    Conditions
        to
        Closing.

       

      (a)     
        The
        obligation of Purchasers to consummate the Closing is subject to the following
        conditions unless waived in writing by the Purchasers:

       

      (i)   The
        representations and warranties of the Company contained in this Agreement
        shall
        be true and correct in all material respects (other than representations
        and
        warranties with a Material Adverse Effect qualifier, which shall be true
        and
        correct as written) on and as of the Closing Date and the Company shall have
        complied in all material respects with all agreements and satisfied all
        conditions on its part to be performed or satisfied hereunder at or prior
        to the
        Closing Date.

       

      (ii)   No
        Event
        of Default or breach of any covenant under this Agreement or the Transaction
        Documents shall have occurred.

       

      (iii)     The
        Company shall be current in all of its public filings.

       

      (iv)     None
        of the
        issuance and sale of the Securities pursuant to this Agreement or any of
        the
        transactions contemplated by any of the other Transaction Documents shall
        be
        enjoined (temporarily or permanently) and no restraining order or other
        injunctive order shall have been issued in respect thereof; and there shall
        not
        have been any legal action, order, decree or other administrative proceeding
        instituted or, to the Company's knowledge, threatened against the Company
        or
        against Purchaser relating to the issuance of the Securities or Purchasers'
        activities in connection therewith or any other transactions contemplated
        by
        this Agreement, the other Transaction Documents or the Disclosure
        Documents.

       

      (b)    The
        obligation of the Company to consummate the Closing is subject to the condition
        (unless waived in writing by the Company) that the representations and
        warranties of the Purchasers contained in this Agreement shall be true and
        correct in all material respects (other than representations and warranties
        with
        a Material Adverse Effect qualifier, which shall be true and correct as written)
        on and as of the Closing Date and the Purchasers shall have complied in all
        material respects with all agreements and satisfied all conditions on their
        part
        to be performed or satisfied hereunder at or prior to the Closing
        Date.

       

      
        
          
          

        

        
          -10-

          
            

          

        

        
          
          

        

      

      6.  Representations
        and Warranties of the Purchaser.

       

      (a)    Each
        Purchaser represents and warrants to the Company that the Securities to be
        acquired by it hereunder (including the Conversion Shares and the Warrant
        Shares
        that it may acquire upon conversion or exercise of the Series A Stock or
        the
        Warrants, respectively) are being acquired for their own account for investment
        and with no intention of distributing or reselling such Securities (including
        the Conversion Shares and the Warrant Shares that it may acquire upon conversion
        or exercise thereof, as the case may be) or any part thereof or interest
        therein
        in any transaction which would be in violation of the securities laws of
        the
        United States of America or any State. Nothing in this Agreement, however,
        shall
        prejudice or otherwise limit the Purchasers' right to sell or otherwise dispose
        of all or any part of such Conversion Shares or Warrant Shares under an
        effective registration statement under the Securities Act and in compliance
        with
        applicable state securities laws or under an exemption from such registration.
        By executing this Agreement, each Purchaser further represents that such
        Purchaser does not have any contract, undertaking, agreement or arrangement
        with
        any person to sell, transfer or grant participation to any person with respect
        to any of the Securities.

       

       (b)    Each
        Purchaser understands that the Securities (including the Conversion Shares
        and
        the Warrant Shares that it may acquire upon conversion or exercise thereof,
        as
        the case may be) have not been registered under the Securities Act and may
        not
        be offered, resold, pledged or otherwise transferred except (a) pursuant
        to
        an exemption from registration under the Securities Act (and, if requested
        by
        the Company, based upon an opinion of counsel acceptable to the Company)
        or
        pursuant to an effective registration statement under the Securities Act
        and
        (b) in accordance with all applicable securities laws of the states
        of the
        United States and other jurisdictions.

       

      Each
        Purchaser agrees to the imprinting, so long as appropriate, of the following
        legend on the Securities (including the Conversion Shares and the Warrant
        Shares
        that it may acquire upon conversion or exercise thereof, as the case may
        be):

       

      The
        shares of stock evidenced by this certificate have not been registered under
        the
        U.S. Securities Act of 1933, as amended, and may not be offered, sold, pledged
        or otherwise transferred ("transferred") in the absence of such registration
        or
        an applicable exemption therefrom. In the absence of such registration, such
        shares may not be transferred unless, if the Company requests, the Company
        has
        received a written opinion from counsel in form and substance satisfactory
        to
        the Company stating that such transfer is being made in compliance with all
        applicable federal and state securities laws.

       

      The
        legend set forth above may be removed if and when the Conversion Shares or
        the
        Warrant Shares, as the case may be, are disposed of pursuant to an effective
        registration statement under the Securities Act or in the opinion of counsel
        to
        the Company experienced in the area of United States Federal securities laws
        such legends are no longer required under applicable requirements of the
        Securities Act. The Series A Stock, the Warrants, the Conversion Shares and
        the
        Warrant Shares shall also bear any other legends required by applicable Federal
        or state securities laws, which legends may be removed when in the opinion
        of
        counsel to the Company experienced in the applicable securities laws, the
        same
        are no longer required under the applicable requirements of such securities
        laws. The Company agrees that it will provide Purchasers, upon request, with
        a
        substitute certificate, not bearing such legend at such time as such legend
        is
        no longer applicable. Each Purchaser agrees that, in connection with any
        transfer of the Conversion Shares or the Warrant Shares by it pursuant to
        an
        effective registration statement under the Securities Act, such Purchaser
        will
        comply with all prospectus delivery requirements of the Securities Act. The
        Company makes no representation, warranty or agreement as to the availability
        of
        any exemption from registration under the Securities Act with respect to
        any
        resale of the Series A Stock, the Warrants, the Conversion Shares or the
        Warrant
        Shares.

       

      
        
          
          

        

        
          -11-

          
            

          

        

        
          
          

        

      

      (c)   Each
        Purchaser
        represents and warrants to the Company that it is an "accredited investor"
        within the meaning of Rule 501(a) of Regulation D under the Securities Act.
        Each
        Purchaser represents and warrants to the Company that such Purchaser did
        not
        learn of the opportunity to acquire Securities or any other security issuable
        by
        the Company through any form of general advertising or public
        solicitation.

       

      (d)   Each
        Purchaser
        represents and warrants to the Company that it has such knowledge,
        sophistication and experience in business and financial matters so as to
        be
        capable of evaluating the merits and risks of the prospective investment
        in the
        Securities, having been represented by counsel, and has so evaluated the
        merits
        and risks of such investment and is able to bear the economic risk of such
        investment and, at the present time, is able to afford a complete loss of
        such
        investment.

       

      (e)    Each
        Purchaser represents and warrants to the Company that its overall commitment
        to
        investments which are not readily marketable is not disproportionate to its
        net
        worth, and its purchase of the Securities will not cause such overall commitment
        to become excessive.

       

      (f)    
        Each
        Purchaser recognizes that the purchase of the Securities involves a high
        degree
        of risk.

       

      (g)    Each
        Purchaser represents and warrants to the Company that all information it
        has
        provided to the Company including, but not limited to, its financial position
        and its knowledge of financial and business matters is true, correct and
        complete as of the date of execution of this Agreement. Each Purchaser
        undertakes to provide promptly to the Company written notice of any material
        changes in its financial position or otherwise, and such information shall
        be
        true, correct and complete as of the date given. Each Purchaser understands
        that
        the Company will rely to a material degree upon the representations contained
        therein.

       

      (h)    Each
        Purchaser represents and warrants to the Company that (i) the purchase of
        the
        Securities to be purchased by it has been duly and properly authorized and
        this
        Agreement has been duly executed and delivered by it or on its behalf and
        constitutes the valid and legally binding obligation of Purchaser, enforceable
        against Purchaser in accordance with its terms, subject to the Enforceability
        Exceptions, (ii) the purchase of the Securities to be purchased by
        it does
        not conflict with or violate its charter, by-laws or any law, regulation
        or
        court order applicable to it; and (iii) the purchase of the Securities
        to
        be purchased by it does not impose any penalty or other onerous condition
        on
        Purchaser under or pursuant to any applicable law or governmental regulation.
        

       

      
        
          
          

        

        
          -12-

          
            

          

        

        
          
          

        

      

      (i)    Each
        Purchaser represents and warrants to the Company that neither it nor any
        of its
        directors, officers, employees, agents, partners, members, controlling persons
        or shareholders holding 5% or more of the Common Stock outstanding on the
        Closing Date, has taken or will take, directly or indirectly, any actions
        designed, or might reasonably be expected to cause or result in the
        stabilization or manipulation of the price of the Common Stock.

       

      (j)       Each
        Purchaser
        acknowledges it or its representatives have reviewed and understand the
        Transaction Documents and Disclosure Documents and further acknowledges that
        it
        or its representatives have been afforded (i) the opportunity to ask such
        questions as it has deemed necessary of, and to receive answers from,
        representatives of the Company concerning the terms and conditions of the
        offering of the Securities and the merits and risks of investing in the
        Securities; (ii) access to information about the Company and the Company's
        financial condition, results of operations, business, properties, management
        and
        prospects sufficient to enable it to evaluate its investment in the Securities;
        and (iii) the opportunity to obtain such additional information which the
        Company possesses or can acquire without unreasonable effort or expense that
        is
        necessary to verify the accuracy and completeness of the information contained
        in the Disclosure Documents.

       

      (k)       Each
        Purchaser
        represents and warrants to the Company that it has based its investment decision
        solely upon the information contained in the Disclosure Documents and such
        other
        information as may have been provided to it or its representatives by the
        Company in response to their inquiries, and has not based its investment
        decision on any research or other report regarding the Company prepared by
        any
        third party ("Third Party Reports"). Each Purchaser
        understands and acknowledges that (i) the Company does not endorse any Third
        Party Reports and (ii) its actual results may differ materially from those
        projected in any Third Party Report.

       

      (l)    Each
        Purchaser represents and warrants to the Company that no oral or written
        representations have been made and no oral or written information has been
        furnished to them or their advisors in connection with this offering that
        were
        in any way inconsistent with the information set forth in the Disclosure
        Documents. 

       

      (m)    Each
        Purchaser understands and acknowledges that (i) any forward-looking information
        included in the Disclosure Documents supplied to Purchaser by the Company
        or its
        management is subject to risks and uncertainties, including those risks and
        uncertainties set forth in the Disclosure Documents; and (ii) the Company's
        actual results may differ materially from those projected by the Company
        or its
        management in such forward-looking information.

       

      (n)    Each
        Purchaser understands and acknowledges that (i) the Securities are
        offered
        and sold without registration under the Securities Act in a private placement
        that is exempt from the registration provisions of the Securities Act and
        (ii) the availability of such exemption depends in part on, and that
        the
        Company and its counsel will rely upon, the accuracy and truthfulness of
        the
        foregoing representations and each of the Purchasers hereby consents to such
        reliance.

       

      
        
          
          

        

        
          -13-

          
            

          

        

        
          
          

        

      

      (o)      
Each
        Purchaser
        understands that no U.S. federal or state agency, or any agency or governmental
        or regulatory authority in any other country, including without limitation,
        the
        U.S. Securities and Exchange Commission, has passed upon the Securities or
        made
        any finding or determination as to the fairness of this investment.

       

      (p)    Each
        Purchaser represents and warrants to the Company that it is not a prohibited
        investor under the anti-money laundering or anti-terrorism laws of any
        jurisdiction, including without limitation, any country, territory, nation
        or
        national association. 

       

      (q)    Each
        Purchaser understands that the Company and its assets may be subject to the
        laws
        and regulations of many jurisdictions, including but not limited to
        anti-terrorism laws and anti-money laundering laws. Each Purchaser, nor
any
        person or entity who controls Purchaser, nor, to the best of Purchasers'
        knowledge, any person or entity who owns any direct equity interest in it,
        is
        identified on the list of "Specially Designated Nationals and Blocked Persons"
        ("SDNs")
        maintained by the U.S. Department of Treasury's Office of Foreign Assets
        Control
        ("OFAC"),
        and
        Purchaser is not owned or controlled by any SDN. Each Purchaser is not involved
        in business arrangements or otherwise engaged in transactions with or involving
        countries subject to economic or trade sanctions imposed by the United States
        Government, or with or involving SDNs in violation of the regulations maintained
        by the OFAC. Each Purchaser is in full compliance with the Bank Secrecy Act
        (31
        U.S.C. § 5311 et. seq.) and 18 U.S.C. §§ 1956 and 1957 and the regulations under
        such statutes; and any other applicable anti-terrorist or anti-money laundering
        Laws and regulations. 

       

      (r)    Each
        Purchaser represents and warrants to the Company that none of the Purchasers,
        nor any of their affiliates has, directly or indirectly, offered to "short
        sell", contracted to "short sell," otherwise engaged in any "short selling"
        or
        encouraged others to "short sell" the securities of the Company, including,
        without limitation, shares of Common Stock that will be received as a result
        of
        the conversion of the Series A Stock or the exercise of the Warrants; provided,
        however, that nothing contained herein shall prohibit the Purchasers from
        selling any shares of the Company's Common Stock "against the
        box.."

       

      (s)    Each
        Purchaser has the requisite power and authority to execute, deliver and perform
        its obligations under this Agreement and the Registration Rights Agreement,
        and
        all other documents executed and delivered by such Purchaser in connection
        with
        the purchase of the Securities and the sale to the Company of the IBD Securities
        (collectively, the “Purchaser
        Documents”).
        Each of the Purchaser Documents has been duly and validly authorized by the
        Purchaser and, when executed and delivered by such Purchaser, will constitute
        a
        valid and legally binding agreement of the Purchaser, enforceable against
        the
        Purchaser in accordance with its terms except as the enforcement thereof
        may be
        limited by Enforceability
        Exceptions.

       

      (t)    The
        Purchasers have taken no actions which would create any pledges, security
        interests, deposit arrangements, encumbrances, or liens (statutory or other)
        with respect to the IBD Securities, other than restrictions imposed by federal
        or state securities laws. To the knowledge of Purchasers, the IBD Securities
        are
        owned by the Purchasers free and clear of any and all pledges, security
        interests, deposit arrangements, encumbrances, or liens (statutory or other),
        other than restrictions imposed by federal or state securities laws. Upon
        the
        consummation of the transactions contemplated by this Agreement, the Company
        will acquire all right, title and interest of the Purchasers in and to the
        IBD
        Securities. 

       

      
        
          
          

        

        
          -14-

          
            

          

        

        
          
          

        

      

      (u)    The
        IBD
        Agreements represent all of the agreements, documents and instruments executed
        by either the Purchasers or Interactive Brand Development, Inc. in connection
        with the purchase, by the Purchasers, of any of the IBD Securities, and there
        have been no oral or written amendments thereto or any waivers of any of
        the
        provisions thereof. Neither the Purchasers nor, to the knowledge of Purchasers,
        Interactive Brand Development, Inc. are in breach of any term or provision
        of
        any IBD Agreement, other than as set forth in Schedule F.

       

      (v)   Neither
        the execution and delivery of the Purchaser Documents nor the consummation
        or
        performance of any of the transactions contemplated thereby will, directly
        or
        indirectly (with or without notice or lapse of time) (i) contravene, conflict
        with, or result in a violation of any provision of the charter documents
        of the
        Purchasers, or (ii) contravene, conflict with, or result in a violation of,
        or
        give any governmental body or other person the right to challenge any of
        the
        contemplated transactions.

       

      (w)    To
        the
        knowledge of the Purchasers, the IBD Securities were issued by Interactive
        Brand
        Development, Inc. to the Purchasers in compliance with all federal and state
        securities laws.

       

      (x)    There
        are
        no disputes between any of the Purchasers and Interactive Brand Development,
        Inc., and there are no claims, actions or proceedings pending or, to the
        knowledge of Purchasers, threatened against any of the Purchasers by Interactive
        Brand Development, Inc., regarding the IBD Securities or the IBD Agreements
        that
        would be reasonably likely to result in a Material Adverse Affect on the
        Company’s rights under the IBD Securities or the Company’s rights, as an
        assignee, under any of the IBD Agreements. 

       

      (y)    Exhibit
        D
        is a complete list of all the agreements related to the IBD Securities. Except
        as set forth on Exhibit D, all of the agreements related to the IBD Securities
        have been duly signed by all parties to the agreements. 

       

      7.  Covenants
        of Purchaser.

       

      (a)    Not
        to
        Short Sell Stock.
        Purchaser, on behalf of itself, its affiliates, its successors and assigns
        and
        any other direct or indirect transferee holding any of the Warrants, the
        Series
        A Stock or the Registrable Securities, hereby covenants and agrees not to,
        directly or indirectly, offer to "short sell", contract to "short sell" or
        otherwise "short sell" or encourage others to "short sell" the securities
        of the
        Company, including, without limitation, shares of Common Stock that will
        be
        received as a result of the conversion of the Series A Stock or the exercise
        of
        the Warrants; provided, however, that nothing contained herein shall prohibit
        the Purchasers from selling any shares of the Company's Common Stock "against
        the box."

       

      
        
          
          

        

        
          -15-

          
            

          

        

        
          
          

        

      

      (b)    Within
        60
        days after the Closing Date, Purchasers shall use commercially reasonable
        efforts to obtain Interactive Brand Development, Inc.’s consent to the
        assignment and transfer of the Series D Preferred Stock to the Company
        hereunder; provided, however, that Purchasers shall not be required to incur
        out-of-pocket expenses or costs to obtain or to attempt to obtain such consent;
        and, provided, further, that Purchasers shall have no liability to the Company
        arising out of the failure to obtain such consent.

       

      8.  Termination.

       

      (a)    This
        Agreement may be terminated in the sole discretion of the Company by notice
        to
        Purchasers if at the Closing Date:

       

      (i)  the
        representations and warranties made by Purchasers in Section 6 are not true
        and
        correct in all material respects; or

       

      (ii)  as
        to the
        Company, the sale of the Securities hereunder (i) is prohibited or enjoined
        by
        any applicable law or governmental regulation or (ii) subjects the Company
        to
        any penalty, or in its reasonable judgment, other onerous condition under
        or
        pursuant to any applicable law or government regulation that would materially
        reduce the benefits to the Company of the sale of the Securities to Purchasers,
        so long as such regulation, law or onerous condition was not in effect in
        such
        form at the date of this Agreement.

       

      (b)    This
        Agreement may be terminated by the Purchasers by notice to the Company given
        in
        the event that the Company shall have failed, refused or been unable to satisfy
        all material conditions on its part to be performed or satisfied hereunder
        on or
        prior to the Closing Date, or if after the execution and delivery of this
        Agreement and immediately prior to the Closing Date, trading in securities
        of
        the Company on the OTC BB shall have been suspended.

       

      (c)    This
        Agreement may be terminated by mutual written consent of all
        parties.

       

      9.  Registration.
        The Company shall prepare and file with the SEC a Registration Statement
        on Form
        SB-2 covering the resale of the maximum number of Conversion Shares issuable
        upon conversion of the Series A Stock which may be acquired by the Purchasers
        and the Warrant Shares issuable upon exercise of the Warrants (collectively,
        the
        "Registrable
        Securities"),
        on or before the date that is 130 days after the Closing Date, as set forth
        in
        the Registration Rights Agreement. 

       

      10.  Indemnification.
        In
        consideration of the Company acquiring the IBD Securities, the Purchasers
        jointly and severally shall defend, protect, indemnify and hold harmless
        the
        Company from and against any and all causes of action, suits, claims, losses,
        costs, liabilities and damages incurred by any the Company as a result of,
        or
        arising out of, the gross negligence or willful misconduct of any Purchaser
        with
        respect to the Purchaser's ownership of the IBD Securities free and clear
        of
        encumbrances.

       

      11.  Event
        of Default.
        If an
        Event of Default (as defined below) occurs and remains uncured for a period
        of
        15 days, each Purchaser shall have the right to exercise any or all of the
        rights given to each Purchaser relating to the Securities, as further described
        in the Series A Certificate of Designation. In addition, the Company shall
        pay
        the Purchasers an aggregate of $1,000 per day during which an Event of Default
        is occurring and remains uncured.

       

      
        
          
          

        

        
          -16-

          
            

          

        

        
          
          

        

      

      Each
        Purchaser need not provide and the Company hereby waives any presentment,
        demand, protest or other notice of any kind, and each Purchaser may immediately
        and without expiration of any grace period enforce any and all of its rights
        and
        remedies hereunder and all other remedies available to it under applicable
        law.
        Such declaration may be rescinded and annulled by Purchaser at any time prior
        to
        payment hereunder. No such rescission or annulment shall affect any subsequent
        Event of Default or impair any right consequent thereon. 

       

      An
        "Event
        of Default"
        shall include the commencement by the Company of a voluntary case or proceeding
        under the bankruptcy laws or the Company's failure to: (i) discharge
        or
        stay a bankruptcy proceeding within 60 days of such action being taken against
        the Company, (ii) file the Registration Statement with the SEC on or before
        the
        date that is 130 days after the Closing Date, (iii) maintain trading
        of the
        Company’s Common Stock on the OTC BB except for any periods when the stock is
        listed on the NASDAQ Small Stock Market, the NASDAQ National Stock Market,
        the
        AMEX or the NYSE, (iv) pay the Purchasers' legal expenses referred to in
        Section
        14 below within five (5) days after the Closing Date; or (vi) deliver to
        Purchasers, or Purchasers' broker, as directed, Common Stock that any Purchaser
        has converted within three (3) business days of such conversion. 

       

      12.   Notices.
        All
        communications hereunder shall be in writing and shall be hand delivered,
        mailed
        by first-class mail, couriered by next-day air courier or by facsimile and
        confirmed in writing (i) if to the Company, at the addresses set forth below,
        or
        (ii) if to a Purchaser, to the address set forth on the signature page
        hereto.

       

      If
        to the Company:

       

      Interactive
        Television Networks, Inc.

      28202
        Cabot Road, Suite 300

      Laguna
        Niguel, CA 92677

      Telephone
        No.: (949) 365-5655

      Facsimile
        No.: (888)
        886-1305

      Attention:
        Murray Williams, CFO

       

      All
        such notices and communications shall be deemed to have been duly given:
        (i)
        when delivered by hand, if personally delivered; (ii) five business days
        after
        being deposited in the mail, postage prepaid, if mailed certified mail, return
        receipt requested; (iii) one business day after being timely delivered to
        a
        next-day air courier guaranteeing overnight delivery; (iv) the date of
        transmission if sent via facsimile to the facsimile number as set forth in
        this
        Section or the signature page hereof prior to 6:00 p.m. on a business day,
        or
        (v) the business day following the date of transmission if sent via facsimile
        at
        a facsimile number set forth in this Section or on the signature page hereof
        after 6:00 p.m. or on a date that is not a business day. Change of a party's
        address or facsimile number may be designated hereunder by giving notice
        to all
        of the other parties hereto in accordance with this Section.

       

      
        
          
          

        

        
          -17-

          
            

          

        

        
          
          

        

      

      13.  Survival
        Clause.
        The respective representations, warranties, agreements and covenants of the
        Company and the Purchasers set forth in this Agreement shall survive until
        December 31, 2006, except that the rights and remedies of Purchasers upon
        the
        existence of an Event of Default shall continue to survive.

       

      14.  Fees
        and Expenses.
        Within five (5) days of the Closing Date, the Company agrees to pay Purchasers'
        legal expenses incurred in connection with the preparation and negotiation
        of
        the Transaction Documents up to an amount of $12,500.

       

      15.  Attorneys'
        Fees.
        If any action at law or in equity is necessary to enforce or interpret the
        terms
        of this Agreement, the Warrants or the Series A Certificate of Designation,
        the
        prevailing party or parties shall be entitled to receive from the other party
        or
        parties reasonable attorneys’ fees, costs and necessary disbursements in
        addition to any other relief to which the prevailing party or parties may
        be
        entitled. 

       

      16.  Successors.
        This Agreement shall inure to the benefit of and be binding upon the Purchasers
        and the Company and their respective successors and legal representatives,
        and
        nothing expressed or mentioned in this Agreement is intended or shall be
        construed to give any other person any legal or equitable right, remedy or
        claim
        under or in respect of this Agreement, or any provisions herein contained;
        this
        Agreement and all conditions and provisions hereof being intended to be and
        being for the sole and exclusive benefit of such persons and for the benefit
        of
        no other person. Neither the Company nor any Purchaser may assign this Agreement
        or any rights or obligation hereunder without the prior written consent of
        the
        other party.

       

      17.  No
        Waiver; Modifications in Writing.
        No
        failure or delay on the part of the Company or the Purchasers in exercising
        any
        right, power or remedy hereunder shall operate as a waiver thereof, nor shall
        any single or partial exercise of any such right, power or remedy preclude
        any
        other or further exercise thereof or the exercise of any other right, power
        or
        remedy. The remedies provided for herein are cumulative and are not exclusive
        of
        any remedies that may be available to the Company or the Purchasers at law
        or in
        equity or otherwise. No waiver of or consent to any departure by the Company
        or
        the Purchasers from any provision of this Agreement shall be effective unless
        signed in writing by the party entitled to the benefit thereof, provided
        that
        notice of any such waiver shall be given to each party hereto as set forth
        below. Except as otherwise provided herein, no amendment, modification or
        termination of any provision of this Agreement shall be effective unless
        signed
        in writing by or on behalf of each of the Company and the Purchaser. Any
        amendment, supplement or modification of or to any provision of this Agreement,
        any waiver of any provision of this Agreement, and any consent to any departure
        by the Company or the Purchasers from the terms of any provision of this
        Agreement shall be effective only in the specific instance and for the specific
        purpose for which made or given. Except where notice is specifically required
        by
        this Agreement, no notice to or demand on the Company in any case shall entitle
        the Company to any other or further notice or demand in similar or other
        circumstances.

       

      18.  Entire
        Agreement.
        This Agreement, together with Transaction Documents, constitutes the entire
        agreement among the parties hereto and supersedes all prior agreements,
        understandings and arrangements, oral or written, among the parties hereto
        with
        respect to the subject matter hereof and thereof.

       

      
        
          
          

        

        
          -18-

          
            

          

        

        
          
          

        

      

      19.  Severability.
        If any provision of this Agreement is held to be invalid or unenforceable
        in any
        respect, the validity and enforceability of the remaining terms and provisions
        of this Agreement shall not in any way be affected or impaired
        thereby.

       

      20.  APPLICABLE
        LAW.
        THE VALIDITY AND INTERPRETATION OF THIS AGREEMENT, AND THE TERMS AND CONDITIONS
        SET FORTH HEREIN SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
        LAWS
        OF THE STATE OF CALIFORNIA, WITHOUT GIVING EFFECT TO PROVISIONS RELATING
        TO
        CONFLICTS OF LAW TO THE EXTENT THE APPLICATION OF THE LAWS OF ANOTHER
        JURISDICTION WOULD BE REQUIRED THEREBY. THE PARTIES HEREBY IRREVOCABLY AND
        UNCONDITIONALLY AGREE THAT ACTIONS, SUITS OR PROCEEDINGS ARISING OUT OF OR
        RELATING TO THIS AGREEMENT MAY BE BROUGHT ONLY IN STATE OR FEDERAL COURTS
        LOCATED IN THE CITY OF LOS ANGELES, CALIFORNIA AND HEREBY SUBMIT TO
        THE
        EXCLUSIVE JURISDICTION OF SUCH COURTS FOR SUCH PURPOSE.

       

      21.  Counterparts.
        This Agreement may be executed in two or more counterparts and may be delivered
        by facsimile transmission, each of which shall be deemed an original, but
        all of
        which together shall constitute one and the same instrument. 

       

      22.  If
        the
        foregoing correctly sets forth our understanding, please indicate your
        acceptance thereof in the space provided below for that purpose, whereupon
        this
        Agreement shall constitute a binding agreement among the Company and the
        Purchasers.

       

      Very
        truly yours,

       

      Interactive
        Television Networks, Inc.

       

      


       

      By: ___________________________

      Name:
        Michael Martinez

      Title:
        President


      
        
          
          

        

        
          -19-

          
            

          

        

        
          
          

        

      


      ACCEPTED
        AND AGREED:

       

      
        	
                Shares
                  of Series A Stock: 589,116

                 

                Warrant
                  Shares: 37,468

              	
                Mecator
                  Momentum Fund, L.P.

                 

                 

                By: __________________________

                    David
                  Firestone

                    Managing
                  Partner

                 

              
	
                Shares
                  of Series A Stock: 700,680

                 

                Warrant
                  Shares: 44,563

              	
                Mecator
                  Momentum Fund III, L.P.

                 

                 

                By: __________________________

                    David
                  Firestone

                    Managing
                  Partner

                 

              
	
                Shares
                  of Series A Stock: 2,043,537

                 

                Warrant
                  Shares: 129,969

              	
                Monarch
                  Pointe Fund Ltd.

                 

                 

                By: __________________________

                    David
                  Firestone

                    Managing
                  Partner

                 

              
	
                Shares
                  of Series A Stock: -0-

                 

                Warrant
                  Shares: 53,000

              	
                M.A.G.
                  Capital, LLC

                 

                 

                By: __________________________

                    David
                  Firestone

                    Managing
                  Partner

                 

              
	 	
                Addresses
                  for Notice to any Purchaser:

                 

                c/o
                  M.A.G. Capital, LLC

                555
                  South Flower Street, Suite 4500

                Los
                  Angeles, California 90071

                Attention:
                  David Firestone

                Facsimile:
                  (213) 533-8285

                 

                with
                  copy to:

                 

                David
                  C. Ulich, Esq.

                Sheppard,
                  Mullin, Richter & Hampton LLP

                333
                  South Hope Street, 48th
                  Floor

                Los
                  Angeles, California 90071

                Facsimile:
                  (213) 620-1398

                 

              


      

      


       

      
        
          
          

        

        
          -20-

          
            

          

        

        
          
          

        

      

       

      Schedules


      


      Schedule
        A - Subsidiaries

      


      


      ITVN,
        Inc., a Nevada corporation

      



      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      Schedule
        F - IBD Breaches

      


      IBD
        is currently in default on the Series E Preferred Stock, in connection with
        the
        following: (i) IBD’s failure to pay monthly dividends since the issuance of the
        Series E Preferred Stock at an annual rate of 6%; (ii) IBD’s failure to file the
        Information Statement relating to Stockholder Approval with the SEC within
        five
        trading days after the Closing Date; and (iii) IBD’s failure to obtain SEC
        approval of the Information Statement relating to the Stockholder Approval
        on or
        before November 30, 2004. IBD has failed to pay dividends on the Series E
        Preferred Stock since November 1, 2004.

      


      IBD
        was required, in connection with the issuance of the Series E Preferred Stock,
        to ensure that the shares issuable upon conversion of the Series E Preferred
        Stock would be listed on the AMEX.

      Pursuant
        to the Registration Rights Agreement relating to the Series E Preferred Stock,
        IBD was required to use its best efforts to cause the Registration Statement
        relating to the Series E Preferred Stock to become effective within 100 days
        following September 29, 2004.

      


      Pursuant
        to the Registration Rights Agreement relating to the Series D Preferred Stock,
        IBD is required to use its best efforts to maintain the effectiveness of
        the
        Registration Statement relating to the Series D Preferred Stock


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      



      Exhibit
        A

       

      Warrant

       

      


       


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      Exhibit
        B

       

      Certificate
        of Designation of

      Series
        A Convertible Preferred Stock

       

      


       


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      Exhibit
        C

       

      Registration
        Rights Agreement

       


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      



      Exhibit
        D

       

      IBD
        Agreements

       

      


       

      Subscription
        Agreement dated September 20, 2004 among Care Concepts I, Inc., Monarch Pointe
        Fund, Ltd. and Mercator Advisory Group, LLC and the Supplement dated October
        15,
        2004. The Supplement dated October 15, 2004 is not signed by the parties
        thereto.

      


      Certificate
        of Designation of Preferences and Rights of Series D Convertible Preferred
        Stock

      


      Certificate
        of Designation of Preferences and Rights of Series E Convertible Preferred
        Stock

      


      Settlement
        and Assignment Agreement dated February 28, 2005 by and among Mercator Momentum
        Fund, LP, Mercator Momentum Fund III, LP and Monarch Pointe Fund, Ltd. and
        PHSL
        Worldwide, Inc. This agreement is signed by all parties except Interactive
        Brand
        Development, Inc.

      


      Series
        G
        Preferred Stock Escrow Agreement dated September 27, 2004 by and among Care
        Concepts I, Inc., GMI Investment Partners, The Molina Vector Investment
        Trust,

      Faries
        Capital LLC, Granite Management, LLC, Granite Financial Partners LLC, Summit
        Trading Limited, Jason Galanis, Charles Samel, Charles Arnold, Gersten Savage
        Kaplowitz Wolf & Marcus LLP, McLaughlin & Stern LLP, Dayani Partners
        LLP, and Elizabeth Greenwood. This agreement is not signed by the parties
        thereto.

      


      Letter
        Agreement dated September 20, 2004 by Gersten Savage Kaplowitz Wolf & Marcus
        LLP

      


      Registration
        Rights Agreement dated February 28, 2005 between Mercator Momentum Fund LP,
        Mercator Momentum Fund III, LP, Monarch Pointe Fund, Ltd. and Interactive
        Brand
        Development, Inc.

      


      Registration
        Rights Agreement dated September 29, 2004 between Monarch Pointe Fund, Ltd.,
        Mercator Advisory Group, LLC and Care Concepts I, Inc.

      


      Interactive
        Brand Development, Inc. Series D Preferred Stock Certificate Number PD-35
        dated
        September 11, 2005 for 9,520 shares issued in the name of Mercator Momentum
        Fund
        III, LP (together with stock power)

      


      Interactive
        Brand Development, Inc. Series D Preferred Stock Certificate Number PD-33
        dated
        September 11, 2005 for 9,908 shares issued in the name of Mercator Momentum
        Fund, LP (together with stock power)

      


      Interactive
        Brand Development, Inc. Series D Preferred Stock Certificate Number PD-20
        dated
        March 25, 2005 for 34,988 shares issued in the name of Monarch Pointe Fund,
        Ltd.
        (together with stock power)

      


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Interactive
        Brand Development, Inc. Series D Preferred Stock Certificate Number PD-19
        dated
        March 25, 2005 for 1,749 shares issued in the name of Mercator Momentum Fund
        III, LP (together with stock power)

      


      Interactive
        Brand Development, Inc. Series D Preferred Stock Certificate Number PD-18
        dated
        March 25, 2005 for 1,749 shares issued in the name of Mercator Momentum Fund,
        LP
        (together with stock power)

      


      Care
        Concepts I, Inc. Series G Preferred Stock Certificate Number P-G5 dated October
        21, 2004 for 4,373,784 shares issued in the name of GMI Investment Partners,
        together with stock power assigning and transferring such shares to Monarch
        Pointe Fund, Ltd. (together with stock power)

      


      Interactive
        Brand Development, Inc. Series E Preferred Stock Certificate Number PE-3
        dated
        April 20, 2005 for 1,000 shares issued in the name of Monarch Pointe Fund,
        Ltd.
        (together with stock power)

      


      Interactive
        Brand Development, Inc. Series E Preferred Stock Certificate Number PE-2
        dated
        April 20, 2005 for 33,000 shares issued in the name of Monarch Pointe Fund,
        Ltd.
        (together with stock power)

      


      Common
        Stock Certificate Number 2718 dated April 26, 2005 for 200,000 shares of
        Interactive Brand Development, Inc. Common Stock issued to Monarch Pointe
        Fund,
        Ltd. (together with stock power)