Subscription Agreement

THE SECURITIES TO BE PURCHASED AND SOLD PURSUANT TO THIS SUBSCRIPTION AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES OR TO U.S. PERSONS (OTHER THAN DISTRIBUTORS), AS SUCH TERMS ARE DEFINED IN REGULATIONS PROMULGATED BY THE SECURITIES AND EXCHANGE COMMISSION UNDER THE ACT, UNLESS THE SECURITIES ARE REGISTERED UNDER THE ACT OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENT OF THE ACT IS AVAILABLE.


SUBSCRIPTION AGREEMENT


This Subscription Agreement (the "Agreement") dated as of the 1st day of August, 1996, by and between Montmelian Investisements Limited (the "Purchaser") and Advanced Media, Inc. (the "Company").


WHEREAS, subject to the terms and conditions herein contained, Purchaser desires to purchase shares of common stock, par value $.0001 per share ("Common Stock") of the Company, and the Company desires to sell shares of Common Stock to the Purchaser.


NOW, THEREFORE, in consideration of the premises and the terms, conditions and covenants herein contained, the parties hereto do hereby agree as follows:


1. SUBSCRIPTION. Purchaser hereby subscribes for an aggregate 1,000,000 shares of Common Stock (the "Shares") at a purchase price equal to $0.10 per share. The consideration for the Shares shall be the full discharge of the Company's obligations to Montmelian Investisements Limited, pursuant to that certain letter agreement dated June 6, 1995, including the obligation to pay the amount of $100,000. Purchaser shall pay the purchase price for the Shares by delivering to the Company at the closing, the time and place to be mutually agreed, a written release by Montmelian Investisements Limited in respect of the Company's obligations thereto


2. REPRESENTATIONS OF PURCHASER. In order to induce the Company to accept this subscription and sell to the Purchaser the Shares, the Purchaser does hereby represent, warrant and covenant to and agree with the Company, which representations, warranties, covenants and agreements shall be deemed to be continuing and shall survive the execution of this Agreement by the Company and the consummation of the transactions herein contained, as follows:


(a) RECEIPT OF DISCLOSURE DOCUMENTS; AVAILABILITY OF DOCUMENTS; INDEPENDENT INVESTIGATION. The Purchase has been furnished with the Company's press releases, Annual Report on Form 10-K for the year ended December 31, 1995, Quarterly Report on Form 10-Q for the period ended March 31, 1996 and most recent proxy statement (the "Disclosure Documents"). The Purchaser acknowledges that the Company has offered to provide copies of any documents identified in the Disclosure Documents requested by the Purchaser. In addition, prior to the sale of the Shares, all documents, records and books pertaining to an investment in the Company have been made available to the Purchaser and the Purchaser's advisers for inspection during reasonable business hours at the office of the Company. In making the decision to purchase the Shares, the


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Purchaser has relied upon independent investigations made by Purchaser and Purchaser's representatives, if any.


(b) OPPORTUNITY TO TALK WITH MANAGEMENT. The Purchaser has been given the opportunity and has been encouraged to discuss with management of the Company the present and contemplated business, operations and financial condition of the Company and the estimated expenses of this transaction and the contemplated use of the net proceeds from this transaction.


(c) ACCREDITED INVESTOR; KNOWLEDGE AND EXPERIENCE. The Purchaser is an "accredited investor" as that term is defined in Regulation D under the Securities Act of 1933, as amended (the "Securities Act"), and has such knowledge or experience in financial and business matters that the Purchaser is capable, either alone or together with the Purchaser's purchaser representative (if any) of evaluating the merits and risks of investing in the Company.


(d) NO U.S. PERSON. The Purchaser is not a U.S. Person as that term is defined in Rule 902(o) of Regulation S.


(e) OFFSHORE TRANSACTION. The offer and sale of the Shares is not taking place in the United States but rather in an offshore transaction. The Purchaser was outside the United States at the time his buy order originated and is outside the United States as of the date of the execution and delivery of this Agreement.


(f) OFFERING RESTRICTIONS. All offers and sales of the Shares prior to the expiration of a period commencing on the date of any sale pursuant to this Agreement and ending (i) in the case of the first sale hereunder, 55 days thereafter and (ii) in the case of the other sales hereunder, 40 days thereafter, shall only be made in compliance with the safe harbor contained in Regulation S, pursuant to registration of the Shares under the Securities Act, or pursuant to an exemption from the registration requirements of the Securities Act. All offers and sales after the expiration of any such 55-day or 40-day periods, as applicable, in the United States or to U.S. Persons shall be made only pursuant to such a registration or to such exemption from registration.


(g) STATEMENTS CONCERNING OFFERING PROVISIONS. All offering materials and documents received by Purchaser include statements to the effect that the Shares have not been registered under the Securities Act and may not be offered or sold in the United States or to U.S. Persons prior to the expiration of a period commencing on the date of the purchase and sale of such Shares pursuant to this Agreement and ending (i) in the case of the first sale hereunder, 55 days thereafter and (ii) in the case of the other sales hereunder, 40 days thereafter, unless such Shares are registered under the Securities Act or an exemption from the registration requirements ...