Unassociated Document


    EXHIBIT
      10.1

    


    


    Name
      of
      Investor: 

    SUBSCRIPTION
      AGREEMENT

    


    


    July
      __,
      2006

    


    


    Element
      21 Golf Company

    200
      Queens Quay East, Unit 1

    Toronto,
      Ontario, Canada, M5J2L4

    


    1. Investment.
      The
      undersigned (“Investor”) hereby agrees to invest an aggregate of $2,000,000 (the
“Investment Amount”) in Element 21 Golf Company, a Delaware corporation (the
“Company”) in exchange for (i) 117,647 shares of Series B Convertible Preferred
      Stock, $.10 par value per share (the “Preferred Stock”), and (ii) warrants to
purchase
      17,647,059 
      shares
      of the
      Company’s Common Stock, $.01 par value per share (the “Common Stock”), a form of
      which is attached hereto as Exhibit
      A
      (the
“Warrants”), on the terms and conditions described herein. The Preferred Stock
      shall have the rights preferences and privileges set forth in the Series B
      Certificate of Designations attached hereto as Exhibit
      B
      (the
“Certificate of Designations”). The Preferred Stock, the Warrants, the shares of
      Common Stock issuable upon conversion of the Preferred Stock and the shares
      of
      Common Stock issuable upon exercise of the Warrants (the “Warrant Shares”) are
      collectively referred to herein as the “Securities”.

    


    2. Payment
      and Issuance of Securities.
      

    


    (a) Prior
      to
      July 31, 2006, the Investor will deliver to the Company (i) one manually
      executed copy of the Investor’s Accredited Investor Questionnaire which is
      attached hereto as Annex A, (ii) one manually executed copy of the Investor’s
      stock certificate questionnaire which is attached hereto as Annex B, and (iii)
      one manually executed copy of the Investor’s Registration Statement
      Questionnaire which is attached hereto as Annex C. On July 31, 2006, the
      Investor will tender to the Company $1,000,000, an amount equal to 50% percent
      of the Investment Amount, and in exchange therefor, the Company will deliver
      to
      the Investor a certificate for 58,824 shares of Preferred Stock and two Warrants
      to purchase an aggregate of 8,823,529 shares of Common Stock.

    


    (b) The
      Investor irrevocably agrees to tender $1,000,000, the remaining portion of
      the
      Investment Amount (the “Remaining Investment Amount”), on or prior to November
      30, 2006, subject only to the fulfillment or waiver by the Investor of the
      condition referred to in Section 4(i) hereof relating to the conversion of
      outstanding promissory notes. In exchange for the Remaining Investment Amount,
      the Company shall deliver to the Investor a certificate for 58,824 shares of
      Preferred Stock and three Warrants to purchase an aggregate of 8,823,530 shares
      of Common Stock.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    The
      Investor fully understands that the Company has a limited operating history
      and
      that his, her or its investment in the Company involves a high degree of risk
      of
      loss of his, her or its entire investment. The Investor fully understands the
      nature of the risks of an investment in the Company and is qualified by his,
      her
      or its knowledge and experience to evaluate investments of this type. The
      Investor has carefully considered the potential risks relating to the Company
      and an investment in the Company and has, in particular, reviewed each of the
      risks set forth in Annex
      D
      attached
      hereto and the Securities and Exchange Commission (“SEC”) filings described in
Annex
      E
      attached
      hereto (collectively, the “SEC Filings”) which may be obtained at www.sec.gov.
      Both
      the Investor and his, her or its advisors have had the opportunity to ask
      questions of and receive answers from representatives of the Company or persons
      acting on its behalf concerning the Company and the terms and conditions of
      a
      proposed investment in the Company and have also have had the opportunity to
      obtain additional information necessary to verify the accuracy of information
      furnished about the Company. Accordingly, the Investor has independently
      evaluated the risks of making an investment in the Company.

    


    3. Investor
      Representations and Warranties.
      The
      Investor acknowledges, represents and warrants to, and agrees with, the Company
      as follows:

    


    (a) The
      Investor is aware that his, her or its investment involves a high degree of
      risk, certain of which risks are disclosed in the Risk Factors attached hereto
      as Annex
      D.
      The
      Investor is aware that the Company commenced its present business in October
      2002, has incurred significant losses during each fiscal year thereafter and
      needs additional financing.

    


    (b) The
      Investor acknowledges and is aware that there is no assurance as to the future
      performance of the Company.

    


    (c) The
      Investor acknowledges that there may be certain adverse tax consequences
      resulting from an investment in the Securities and the Company has advised
      the
      Investor to seek the advice of experts in such areas prior to making this
      investment.

    


    (d) The
      Investor is making the investment in the Securities for his, her or its own
      account for investment purposes only and not with a view to or in connection
      with the distribution of the Securities nor with any present intention of
      selling or otherwise disposing of all or any part of the Securities. The
      Investor agrees that he, she or it must bear the economic risk of the investment
      for an indefinite period of time because, among other reasons, none of the
      Securities have been registered under the Securities Act or under the securities
      laws of any state and, therefore, cannot be resold, pledged, assigned or
      otherwise disposed of unless they are subsequently registered under the
      Securities Act and under applicable securities laws of certain states or an
      exemption from such registration is available. The Investor hereby authorizes
      the Company to place a legend denoting the foregoing restrictions on any of
      the
      Securities.

    


    (e) The
      Investor is not a member of the National Association of Securities Dealers,
      Inc.
      (“NASD”); The Investor is not and has not, for a period of 12 months prior to
      the date of this Subscription Agreement, been affiliated or associated with
      any
      company, firm, or other entity which is a member of the NASD; and the Investor
      does not own any stock or other interest in any member of the NASD (other than
      interests acquired in open market purchases).

    


    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    (f) The
      Investor recognizes that the Securities, as an investment, involve a high degree
      of risk including, but not limited to, the risk of economic losses from
      operations of the Company and the total loss of the Investor’s investment. The
      Investor believes that an investment in the Securities is suitable based upon
      his, her or its investment objectives and financial needs, and the Investor
      has
      adequate means for providing for his, her or its current financial needs and
      contingencies and has no need for liquidity with respect to his, her or its
      investment in the Securities.

    


    (g) The
      Investor has been given access to full and complete information regarding the
      Company and the Securities and has utilized such access to his, her or its
      satisfaction for the purpose of obtaining information, and the Investor has
      either met with or been given reasonable opportunity to meet with officers
      of
      the Company for the purpose of asking questions and receiving answers from,
      such
      officers concerning the terms and conditions of the issuance of the Securities
      and the business and operations of the Company and to obtain any additional
      information, to the extent reasonably available.

    


    (h) The
      Investor has such knowledge and experience in financial and business matters
      as
      to be capable of evaluating the merits and risks of making the loan, and thereby
      investing in the Securities and has obtained, in his, her or its judgment,
      sufficient information from the Company to evaluate the merits and risks of
      an
      investment in the Securities. The Investor has not utilized any person as a
      purchaser representative as defined in Regulation D promulgated by the SEC
      pursuant to the Securities Act in connection with evaluating such merits and
      risks.

    


    (i) The
      Investor has relied solely upon his, her or its own investigation in making
      a
      decision to invest in the Securities.

    


    (j) The
      Investor has received no representation or warranty from the Company or any
      of
      its respective officers, directors, employees, consultants or agents in respect
      of his, her or its investment in the Securities and the Investor has received
      no
      information (written or otherwise) from them relating to the Company or its
      business other than as contained in the Series B Preferred Stock Investment
      Booklet and the SEC Filings. The Investor is not participating in the offer
      as a
      result of or subsequent to: (i) any advertisement, article, notice or other
      communication published in any newspaper, magazine or similar media or broadcast
      over television or radio or (ii) any seminar or meeting whose attendees have
      been invited by any general solicitation or general advertising.

    


    (k) The
      Investor has had full opportunity to ask questions and to receive satisfactory
      answers concerning the offering and other matters pertaining to his, her or
      its
      investment in the Securities and all such questions have been answered to the
      Investor’s full satisfaction.

    


    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    (l) The
      Investor has been provided an opportunity to obtain any additional information
      concerning the Securities and the Company and all other information to the
      extent the Company possesses such information or can acquire it without
      unreasonable effort or expense.

    


    (m) The
      Investor is an “accredited investor” as defined in Section 2(15) of the
      Securities Act and in Rule 501 promulgated thereunder.

    


    (n) The
      Investor understands that (i) the Securities have not been registered under
      the
      Securities Act, or the securities laws of any state in reliance on specific
      exemptions from registration, (ii) no securities administrator of any state
      or
      the federal government has recommended or endorsed the offering of Securities
      or
      made any finding or determination relating to the fairness of an investment
      in
      the Company and (iii) the Company is relying on the Investor’s representations
      and agreements for the purpose of determining whether this transaction meets
      the
      requirements of the exemptions afforded by the Securities Act and certain state
      securities laws.

    


    (o) The
      Investor understands that since neither the offer nor sale of the Securities
      has
      been registered under the Securities Act or the securities laws of any state,
      the Securities may not be sold, assigned, pledged or otherwise disposed of
      unless they are so registered or an exemption from such registration is
      available.

    


    (p) The
      Investor has been urged to seek independent advice from professional advisors
      relating to the suitability of an investment in the Securities in view of the
      Investor’s overall financial needs and with respect to the legal and tax
      implications of such investment.

    


    (q) If
      the
      undersigned is a corporation, company, trust, employee benefit plan, individual
      retirement account, Keogh Plan, or other tax-exempt entity, it is authorized
      and
      qualified to become an investor in the Company and the person signing this
      Subscription Agreement on behalf of such entity has been duly authorized by
      such
      entity to do so.

    


    (r) The
      information contained in the Accredited Investor Questionnaire, as well as
      any
      information which the Investor has furnished to the Company with respect to
      the
      Investor’s financial position and business experience, is correct and complete
      as of the date of this Subscription Agreement and, if there should be any
      material change in such information prior to the consummation of the
      transactions contemplated hereby, the Investor will furnish such revised or
      corrected information to the Company.

    


    (s) The
      Investor hereby acknowledges and is aware that except for any rescission rights
      that may be provided under applicable laws, the Investor is not entitled to
      cancel, terminate or revoke this subscription. If the Investor is an individual,
      and any agreements made in connection herewith shall survive the Investor’s
      death or disability.

    


     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    


    4. Company
      Representations, Warranties and Covenants.
      The
      Company hereby represents and warrants to, and covenants with, the Investor
      as
      follows:

    


    (a) The
      Company is a corporation duly incorporated, validly existing and in good
      standing under the laws of the State of Delaware and the Company is qualified
      to
      do business as a foreign corporation in each jurisdiction in which qualification
      is required, except where failure to so qualify would not reasonably be expected
      to have a Material Adverse Effect

    (as
      defined herein). The Company has no subsidiaries. For purposes of this
      Agreement, the term “Material Adverse Effect” shall mean a material adverse
      effect upon the business, financial condition, properties or results of
      operations of the Company.

    


    (b) The
      authorized capital stock of the Company consists of 300,000,000 shares of Common
      Stock, $.01 par value per share, 99,630,554 of which are issued and outstanding
      as of the date hereof, and 5,000,000 shares of Preferred Stock, 2,200,000 shares
      of which have been designated as Series A Convertible Preferred Stock, $.10
      par
      value per share, 2,113,556 of
      which
      are issued and outstanding as of the date hereof, and 350,000 shares of which
      have been designated as Series B Convertible Preferred Stock, $.10 par value
      per
      share, none of
      which
      are issued and outstanding as of the date hereof.

    


    (c) The
      Securities have been duly authorized and, when issued, delivered and paid for
      in
      the manner set forth in this Agreement, the Warrants and the Certificate of
      Designations will be duly authorized, validly issued, fully paid and
      nonassessable and free and clear of all pledges, liens, restrictions and
      encumbrances (other than restrictions on transfer under state and/or federal
      securities laws). The Company has reserved from its duly authorized shares
      of
      capital stock the maximum number of shares of Common Stock issuable upon the
      exercise of the Warrants and conversion of the Preferred Stock. No further
      approval or authority of the stockholders or the Board of Directors of the
      Company will be required for the issuance and sale of the Securities as
      contemplated herein.

    


    (d) The
      Company has full legal right, corporate power and authority to enter into this
      Agreement and perform the transactions contemplated hereby. This Agreement
      has
      been duly authorized, executed and delivered by the Company. The execution,
      delivery and performance of this Agreement by the Company and the consummation
      of the transactions herein contemplated will not violate any provision of the
      certificate of incorporation or bylaws of the Company or conflict with, or
      constitute a default (or an event that with notice or lapse of time or both
      would become a default) under, result in the creation of any lien upon any
      of
      the properties or assets of the Company, or give to others any rights of
      termination, amendment, acceleration or cancellation (with or without notice,
      lapse of time or both) of, any agreement, credit facility, debt or other
      instrument (evidencing a Company debt or otherwise) or other understanding
      to
      which the Company is a party or by which any property or asset of the Company
      is
      bound or affected, or conflict with or result in a violation of any law, rule,
      regulation, order, judgment, injunction, decree or other restriction of any
      court or governmental authority to which the Company is subject. No consent,
      approval, authorization or other order of any court, regulatory body,
      administrative agency or other governmental body is required for the execution
      and delivery of this Agreement or the consummation of the transactions
      contemplated by this Agreement, except for compliance with the blue sky laws
      and
      federal securities laws applicable to the offering of the Securities. Upon
      the
      execution and delivery of this Agreement, and assuming the valid execution
      thereof by the Investor, this Agreement will constitute a valid and binding
      obligation of the Company, enforceable in accordance with its terms, except
      as
      enforceability may be limited by applicable bankruptcy, insolvency,
      reorganization, moratorium or similar laws affecting creditors' and contracting
      parties' rights generally and except as enforceability may be subject to general
      principles of equity (regardless of whether such enforceability is considered
      in
      a proceeding in equity or at law) and except as the indemnification agreements
      herein may be limited by federal or state securities laws or the public policy
      underlying such laws.

    


    
      
         

      

      
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    (e) The
      Company is subject to the reporting requirements of the Securities and Exchange
      Act of 1934, as amended (the “Exchange Act”).

    


    (f) The
      Company shall use the proceeds from the sale of the Securities for general
      corporate purposes but in no event for the repayment of the Promissory Notes
      referred to in Section 4(i) hereof.

    


    (g) Except
      as
      may be required by applicable law or regulation, the Company shall not use
      the
      Investor’s name or the name of any of its affiliates in any advertisement,
      announcement, press release or other similar public communication unless it
      has
      received the prior written consent of the Investor for the specific use
      contemplated or as otherwise required by applicable law or
      regulation.

    


    (h) The
      financial statements of the Company and the related notes contained in the
      SEC
      Filings present fairly, in accordance with generally accepted accounting
      principles, the financial position of the Company as of the dates indicated,
      and
      the results of their operations, cash flows and the changes in stockholders'
      equity for the periods therein specified, subject, in the case of unaudited
      financial statements for interim periods, to normal year-end audit adjustments.
      Such financial statements (including the related notes) have been prepared
      in
      accordance with generally accepted accounting principles applied on a consistent
      basis throughout the periods therein specified, except that unaudited financial
      statements may not contain all footnotes required by generally accepted
      accounting principles.

    


    (i) The
      Company will not use any of the proceeds of the Investor’s investment in the
      Securities to pay off any outstanding indebtedness of the Company evidenced
      by
      those certain convertible promissory notes of the Company issued between
      February 2006 and the date hereof (the “Promissory Notes”). The Company will use
      its commercially reasonable efforts to cause the holders off each of the
      Promissory Notes to elect to convert such Promissory Notes into shares of Common
      Stock. The Investor shall be under to no obligation to advance the Remaining
      Investment Amount if the Company shall fail to convert at least 80% of aggregate
      outstanding principal amount of the Promissory Notes into Common Stock prior
      to
      November 30, 2006.

    


    (j) Preemptive
      Rights.

    


    
      
         

      

      
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    (i) The
      Company shall not issue, sell or exchange, agree or obligate itself to issue,
      sell or exchange, or reserve or set aside for issuance, sale or exchange,
      (i) any shares of Common Stock, (ii) any other equity security of the
      Company, (iii) any debt security of the Company (other than debt with no
      equity feature) including without limitation, any debt security which by its
      terms is convertible into or exchangeable, directly or indirectly, for any
      equity security of the Company, (iv) any security of the Company that is a
      combination of debt and equity, or (v) any option, warrant or other right
      to subscribe for, purchase or otherwise acquire any such equity security or
      any
      such debt security of the Company (the securities described in (i)-(v) being
      referred to herein as the “Offered Securities”), unless in each case the Company
      shall have first offered to sell a portion of such Offered Securities to the
      Investor and each other purchaser of shares of Series B Preferred Stock (each
      an
“Offeree” and collectively the “Offerees”) as follows: The Company shall deliver
      to each Offeree a written notice (the “Offer”) specifying the Company’s
      intention to issue, sell or exchange, or reserve or set aside for issuance,
      sale
      or exchange, Offered Securities, setting forth the number of Offered Securities
      it intends to issue, sell or exchange, or reserve or set aside for issuance,
      sale or exchange, and each material term and condition pursuant to which it
      intends to dispose of such Offered Securities. Each of the Offerees shall have
      the right to purchase that portion of the Offered Securities as shall be equal
      to the total number of Offered Securities proposed to be sold by the Company
      multiplied by a fraction, the numerator of which shall equal the number of
      shares of Common Stock (after giving effect to the conversion of all shares
      of
      Series B Preferred Stock held by such Offeree) then held by the Offeree and
      the
      denominator of which shall equal the total number of shares of capital stock
      of
      the Company on a fully-diluted basis (assuming full conversion and exercise
      of
      all convertible or exercisable securities of the Company then issued and
      outstanding), at a price and on such other terms as shall have been specified
      by
      the Company in the Offer (all Offered Securities which an Offeree is eligible
      to
      purchase according to this Section 4(j(i) being referred to herein collectively
      as the “Eligible Securities”). The Offer, will by its terms, remain open and
      irrevocable for a period of 10 days (the “Offer Period”) from receipt of the
      Offer. 

    


    (ii) Notice
      of
      the Offeree’s intention to accept, in whole or in part, any Offer made pursuant
      to Section 4(j)(i) shall be evidenced by a writing signed by the Offeree
      and delivered to the Company prior to the end of the Offer Period, setting
      forth
      the number of Eligible Securities such Offeree elects to purchase (each a
“Notice of Acceptance”). 

    


    (iii) Assuming
      the Company complies with the provisions of Section 4(j) with respect to each
      Offeree, the Company shall have 90 days
      from
      the date of its delivery of the Offer to close the sale of all or any part
      of
      such Offered Securities (including the Eligible Securities, which shall be
      sold
      at a closing held simultaneously with the closing of the sale of any other
      Offered Securities) upon terms and conditions which are not materially more
      favorable, in the aggregate, to the person purchasing such Offered Securities
      or
      materially less favorable to the Company than those set forth in the Offer.
      

    


    (iv) If
      the
      Company ultimately proposes to sell less than all the securities originally
      to
      be offered for sale as set forth in the Offer, then the Offeree may, at its
      sole
      option and in its sole discretion, reduce the number of Offered Securities
      specified in its Notice of Acceptance to an amount which shall be not less
      than
      the amount of the Offered Securities which the Offeree elected to purchase
      pursuant to its Notice of Acceptance multiplied by a fraction, (i) the
      numerator of which shall be the amount of Offered Securities which the Company
      actually proposes to sell, and (ii) the denominator of which shall be the
      amount of all Offered Securities originally proposed to be sold by the Company
      as set forth in the Offer. 

    


    
      
         

      

      
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    (v) Upon
      the
      closing of the sale of the Offered Securities, the Company shall sell to each
      Offeree the number of Offered Securities specified in its Notice of Acceptance,
      as reduced pursuant to Section 4(j)(iv) if applicable, upon the terms and
      conditions specified in the Offer. The purchase by an Offeree of any Eligible
      Securities is subject in all cases to the preparation, execution and delivery
      by
      the Company and the Offeree of a purchase agreement relating to such Offered
      Securities reasonably satisfactory in form and substance to the Offeree and
      its
      counsel. 

    


    (vi) The
      rights of the Investor as an Offeree under this Section 4(j) shall terminate
      on
      the date that is 30 months following the date hereof.

    


     

    (vii) The
      rights of the Investor under this Section 4(j) shall not apply to:

     

    
      
         

      

      
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              a.

            	
              the
                issuance of any shares of Common Stock as a stock dividend to holders
                of
                shares of the Company’s capital stock or upon any subdivision or
                combination of shares of the Company’s capital
                stock;

            


    

     

     

    
      	 	
              b.

            	
              the
                issuance of any shares of Common Stock upon conversion of shares
                of Series
                B Convertible Preferred Stock or any other shares of convertible
                preferred
                stock outstanding as of the date
                hereof;

            


    

     

     

    
      	 	
              c.

            	
              the
                issuance of up to 20,000,000 shares of Common Stock or options with
                respect thereto (subject in either case to appropriate adjustment
                for
                stock splits, stock dividends, recapitalizations and similar events
                occurring after the date of this Agreement), issued or issuable to
                employees, directors or officers of, or consultants to, the Company
                or any
                subsidiary of the Company pursuant to any plan, agreement or arrangement
                approved by the Board of Directors of the Company (it being understood
                that any shares subject to options that expire or terminate unexercised
                or
                any restricted stock repurchased by the Company shall not be counted
                towards the maximum number set forth in this clause c. unless and
                until
                regranted or reissued pursuant to any such plan, agreement or
                arrangement);

            


    

     

     

    
      	 	
              d.

            	
              the
                issuance of shares of Common Stock upon the exercise of any warrant
                to
                purchase shares of Common Stock outstanding as of the date hereof
                or any
                warrant issued to the Investor or any other purchaser of Series B
                Preferred Stock in connection with the Company’s Series B Preferred Stock
                equity financing;

            


    

     

     

    
      	 	
              e.

            	
              the
                issuance of securities solely in consideration for the acquisition
                (whether by merger or otherwise) by the Company or any subsidiary
                of the
                Company of all or substantially all of the stock or assets of any
                other
                entity; 

            


    

     

     

    
      	 	
              f.

            	
              the
                issuance of shares of Common Stock by the Company in a firm-commitment
                underwritten public offering pursuant to an effective registration
                statement under the Securities Act;
                or

            


    

     

     

    
      	 	
              g.

            	
              the
                issuance of shares of Common Stock, or the grant of options or warrants
                therefor, in connection with (i) any present or future borrowing,
                line of
                credit, leasing or similar financing arrangement approved by the
                Board of
                Directors of the Company, or (ii) sponsored research, collaboration,
                technology license, development, OEM, marketing or other similar
                agreements or strategic partnerships approved by the Board of Directors
                of
                the Company.

            


    

     

    
      
         

      

      
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    5. Registration;
      Compliance with the Securities Act.
      

     

    (a) If,
      at
      any time prior to the one year anniversary of the date hereof, the Company
      proposes to register any shares of its Common Stock under the Securities Act
      of
      1933 in connection with the public offering of such securities for its own
      account or for the accounts of other shareholders of the Company, solely for
      cash on a form that would also permit the registration of the shares of Common
      Stock issuable upon conversion of the Preferred Stock and upon exercise of
      the
      Warrants (collectively, the “Registrable Securities”), the Company shall, each
      such time, promptly give the Investor written notice of such determination.
      Upon
      the written request of the Investor given within twenty (20) days after mailing
      of any such notice by the Company, the Company shall use its best efforts to
      cause to be registered under the Securities Act of 1933 all of the Registrable
      Securities that the Investor has requested be registered. The foregoing
      notwithstanding, the Company may, in its discretion, withdraw any registration
      statement referred to in this Section 5(a) prior to the effectiveness
      thereof.
      In
      connection with any offering to which this Section 5(a) applies and involving
      an
      underwriting of shares being issued by the Company, the Company shall not be
      required under this Section 5(a) to include any of the Investor’s
      Registrable Securities in such underwriting unless they accept the terms of
      the
      underwriting as agreed upon between the Company and the underwriters selected
      by
      it. If the total amount of securities that all holders of Registrable Securities
      request to be included in an underwritten offering exceeds the amount of
      securities that the underwriters reasonably believe compatible with the success
      of the offering, the Company shall only be required to include in the offering
      so many of the securities of the Investor as the underwriters reasonably believe
      will not jeopardize the success of the offering (the securities so included
      to
      be apportioned pro rata among each of the holders of Registrable Securities,
      or
      in such other proportions as shall mutually be agreed to by such selling
      holders); provided,
      however,
      that no
      such reduction shall be made with respect to any securities offered by the
      Company for its own account.

     

    (b) The
      Company shall (i) no later than 305 days following the date hereof (the “Filing
      Date”), prepare and file with the SEC a Registration Statement on Form SB-2 (the
      “Registration Statement”) relating to all of the Warrant Shares then held by, or
      issuable to, the Investor and the other purchasers purchasing shares of Series
      B
      Preferred Stock from the Company; and (ii) use its commercially reasonable
      efforts, subject to receipt of necessary information from the Investor, to
      cause
      the SEC to declare the Registration Statement effective within 60 days after
      the
      date the Registration Statement is filed with the SEC (such date, the “Required
      Effective Date”). However, so long as the Company filed the Registration
      Statement by the Filing Date, if the Registration Statement receives SEC review,
      then the Required Effective Date will be the one hundred and twentieth (120)
      calendar day after the date the Registration Statement is filed with the
      SEC.

    


    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    (c) The
      Company shall use its commercially reasonable efforts to (i) promptly prepare
      and file with the SEC such amendments and supplements to the Registration
      Statement and the prospectus used in connection therewith as may be necessary
      to
      keep the Registration Statement effective until the earliest of (i) two years
      after the effective date of the Registration Statement, or (ii) such time as
      all
      of the Warrant Shares become eligible for resale by non-affiliates pursuant
      to
      Rule 144(k) under the Securities Act of 1933; and (ii) furnish to the Investor
      with respect to the Registrable Securities registered under the Registration
      Statement (and to each underwriter, if any, of such Registrable Securities)
      such
      number of copies of prospectuses and such other documents as the Investor may
      reasonably request, in order to facilitate the public sale or other disposition
      of all or any of the Registrable Securities by the Investor.

    


    (d)
       In
      connection with the filing of any registration statement pursuant to this
      Section 5, the Company shall use its commercially reasonable efforts to file
      documents required of the Company for normal “Blue Sky” clearance in states
      specified in writing by the Investor; provided, however, that the Company shall
      not be required to qualify to do business or consent to service of process
      in
      any jurisdiction in which it is not now so qualified or has not so
      consented.

    


    (e) The
      Company shall bear all expenses in connection with the procedures in paragraphs
      (a) through (d) of this Section 5 and the registration of the Registrable
      Securities pursuant to the Registration Statement or any other registration
      statement filed by the Company pursuant to Section 5(a) (the Registration
      Statement and any other such registration statements filed pursuant to Section
      5(a) are each referred to herein as a “Registration” and collectively as the
“Registrations”), other than fees and expenses, if any, of counsel or other
      advisers to the Investor (or any other investors in the shares of Preferred
      Stock, if any), or underwriting discounts, brokerage fees and commissions
      incurred by the Investor (or any other investors in the shares of Preferred
      Stock, if any). A questionnaire related to the Registration Statement to be
      completed by the Investor is attached hereto as Annex
      C.
      The
      Investor agrees that it will promptly notify the Company of any changes in
      the
      information set forth in the Registration Statement regarding the Investor
      or
      its plan of distribution.

    


    (f) For
      the
      purpose of this Section 5(f), the term “Investor/Affiliate” shall mean any
      affiliates of the Investor and any person who controls the Investor or any
      affiliate of the Investor within the meaning of Section 15 of the Securities
      Act
      or Section 20 of the Exchange Act; and the term “Registrations” shall include
      any preliminary prospectus, final prospectus, exhibit, supplement or amendment
      included in or relating to, and any document incorporated by reference in any
      such Registration.

    


    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    (i) The
      Company agrees to indemnify and hold harmless the Investor and each
      Investor/Affiliate against any losses, claims, damages, liabilities or expenses,
      joint or several, to which the Investor or such Investor/Affiliates may become
      subject, under the Securities Act, the Exchange Act, or any other federal or
      state statutory law or regulation, or at common law or otherwise (including
      in
      settlement of any litigation, if such settlement is effected with the prior
      written consent of the Company), insofar as such losses, claims, damages,
      liabilities or expenses (or actions in respect thereof as contemplated below)
      arise out of or are based upon any untrue statement or alleged untrue statement
      of any material fact contained in any Registration, including any prospectus,
      financial statements and schedules, and all other documents filed as a part
      thereof, as amended at the time of effectiveness of any Registration, including
      any information deemed to be a part thereof as of the time of effectiveness
      pursuant to paragraph (b) of Rule 430A, or pursuant to Rule 434, of the rules
      and regulations of the SEC (the “Rules and Regulations”), or the prospectus, in
      the form first filed with the SEC pursuant to Rule 424(b) of the Rules and
      Regulations, or filed as part of any Registration at the time of effectiveness
      if no Rule 424(b) filing is required (the “Prospectus”), or any subsequent
      amendment or supplement thereto, or arise out of or are based upon the omission
      or alleged omission to state in any of them a material fact required to be
      stated therein or necessary to make the statements in the Registration or any
      amendment or supplement thereto not misleading or in the Prospectus or any
      amendment or supplement thereto not misleading, in light of the circumstances
      under which they were made, or arise out of or are based in whole or in part
      on
      any inaccuracy in the representations and warranties of the Company contained
      in
      this Subscription Agreement, or any failure of the Company to perform its
      obligations hereunder or under law, and will reimburse the Investor and each
      such Investor/Affiliate for any legal and other expenses as such expenses are
      reasonably incurred by the Investor or such Investor/Affiliate in connection
      with investigating, defending, settling, compromising or paying any such loss,
      claim, damage, liability, expense or action; provided, however, that the Company
      will not be liable for amounts paid in settlement of any such loss, claim,
      damage, liability or action if such settlement is effected without the consent
      of the Company, which consent shall not be unreasonably withheld, and the
      Company will not be liable in any such case to the extent, but only to the
      extent, that any such loss, claim, damage, liability or expense arises out
      of or
      is based upon (i) an untrue statement or alleged untrue statement or omission
      or
      alleged omission made in the Registration, the Prospectus or any amendment
      or
      supplement thereto in reliance upon and in conformity with written information
      furnished to the Company by or on behalf of the Investor expressly for use
      therein, or (ii) the failure of the Investor to comply with the covenants and
      agreements contained herein with respect to the sale of the Securities or (iii)
      the inaccuracy of any representation or warranty made by the Investor herein
      or
      (iv) any statement or omission in any Prospectus that is corrected in any
      subsequent Prospectus that was delivered to the Investor prior to the pertinent
      sale or sales by the Investor.

    


    (ii) The
      Investor will severally indemnify and hold harmless the Company, each of its
      directors, each of its executive officers, including such officers who signed
      the Registration, and each person, if any, who controls the Company within
      the
      meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act,
      against any losses, claims, damages, liabilities or expenses to which the
      Company, each of its directors, each of its officers who signed the Registration
      or controlling person may become subject, under the Securities Act, the Exchange
      Act, or any other federal or state statutory law or regulation, or at common
      law
      or otherwise (including in settlement of any litigation, if such settlement
      is
      effected with the written consent of the Investor) insofar as such losses,
      claims, damages, liabilities or expenses (or actions in respect thereof as
      contemplated below) arise out of or are based upon (i) any failure to comply
      with the covenants and agreements contained herein with respect to the sale
      of
      the Securities, or (ii) the inaccuracy of any representation or warranty made
      by
      the Investor herein, or (iii) any untrue or alleged untrue statement of any
      material fact contained in the Registration, the Prospectus, or any amendment
      or
      supplement thereto, or arise out of or are based upon the omission or alleged
      omission to state therein a material fact required to be stated therein or
      necessary to make the statements in the Registration or any amendment or
      supplement thereto not misleading or in the Prospectus or any amendment or
      supplement thereto not misleading in the light of the circumstances under which
      they were made, in each case to the extent, but only to the extent, that such
      untrue statement or alleged untrue statement or omission or alleged omission
      was
      made in the Registration, the Prospectus, or any amendment or supplement
      thereto, in reliance upon and in conformity with written information furnished
      to the Company by or on behalf of the Investor expressly for use therein, and
      will reimburse the Company, each of its directors, each of its officers who
      signed the Registration or controlling person for any legal and other expense
      reasonably incurred by the Company, each of its directors, each of its officers
      who signed the Registration or controlling person in connection with
      investigating, defending, settling, compromising or paying any such loss, claim,
      damage, liability, expense or action; provided, however, that the Investor’s
      aggregate liability under this Section 5(f) with respect to a particular
      Registration shall not exceed the amount of proceeds received by the Investor
      on
      the sale of the Registrable Securities pursuant to such Registration.


    


    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    (iii) Promptly
      after receipt by an indemnified party under this Section 5(f) of notice of
      the
      threat or commencement of any action, such indemnified party will, if a claim
      in
      respect thereof is to be made against an indemnifying party under this Section
      5(f), promptly notify the indemnifying party in writing thereof; but the
      omission so to notify the indemnifying party will not relieve it from any
      liability which it may have to any indemnified party for contribution or
      otherwise under the indemnity agreement contained in this Section 5(f) to the
      extent it is not prejudiced as a result of such failure. In case any such action
      is brought against any indemnified party and such indemnified party seeks or
      intends to seek indemnity from an indemnifying party, the indemnifying party
      will be entitled to participate in, and, to the extent that it may wish, jointly
      with all other indemnifying parties similarly notified, to assume the defense
      thereof with counsel reasonably satisfactory to such indemnified party;
      provided, however, if the defendants in any such action include both the
      indemnified party and the indemnifying party and the indemnified party based
      upon the advice of such indemnified party's counsel shall have reasonably
      concluded, based on an opinion of counsel reasonably satisfactory to the
      indemnifying party, that there may be a conflict of interest between the
      positions of the indemnifying party and the indemnified party in conducting
      the
      defense of any such action or that there may be legal defenses available to
      it
      and/or other indemnified parties which are different from or additional to
      those
      available to the indemnifying party, the indemnified party or parties shall
      have
      the right to select separate counsel to assume such legal defenses and to
      otherwise participate in the defense of such action on behalf of such
      indemnified party or parties. Upon receipt of notice from the indemnifying
      party
      to such indemnified party of its election to assume the defense of such action
      and approval by the indemnified party of counsel, the indemnifying party will
      not be liable to such indemnified party under this Section 5(f) for any legal
      or
      other expenses subsequently incurred by such indemnified party in connection
      with the defense thereof unless (i) the indemnified party shall have employed
      such counsel in connection with the assumption of legal defenses in accordance
      with the proviso to the preceding sentence (it being understood, however, that
      the indemnifying party shall not be liable for the expenses of more than one
      separate counsel, reasonably satisfactory to such indemnifying party,
      representing the indemnified parties who are parties to such action, plus local
      counsel, if appropriate) or (ii) the indemnifying party shall not have employed
      counsel reasonably satisfactory to the indemnified party to represent the
      indemnified party within a reasonable time after notice of commencement of
      action, in each of which cases the reasonable fees and expenses of counsel
      shall
      be at the expense of the indemnifying party. The indemnifying party shall not
      be
      liable for any settlement of any action without its written consent.


    


    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    (iv) If
      the
      indemnification provided for in this Section 5(f) is required by its terms
      but
      is for any reason held to be unavailable to or otherwise insufficient to hold
      harmless an indemnified party under this Section 5(f) in respect to any losses,
      claims, damages, liabilities or expenses referred to herein, then each
      applicable indemnifying party shall contribute to the amount paid or payable
      by
      such indemnified party as a result of any losses, claims, damages, liabilities
      or expenses referred to herein (i) in such proportion as is appropriate to
      reflect the relative benefits received by the Company and the Investor from
      the
      private placement of the Securities hereunder or (ii) if the allocation provided
      by clause (i) above is not permitted by applicable law, in such proportion
      as is
      appropriate to reflect not only the relative benefits referred to in clause
      (i)
      above but the relative fault of the Company and the Investor in connection
      with
      the statements or omissions or inaccuracies in the representations and
      warranties in this Subscription Agreement and/or the Registration Statement
      which resulted in such losses, claims, damages, liabilities or expenses, as
      well
      as any other relevant equitable considerations. The respective relative benefits
      received by the Company on the one hand and the Investor on the other shall
      be
      deemed to be in the same proportion as the amount paid by the Investor to the
      Company pursuant to this Subscription Agreement for the Securities purchased
      by
      the Investor that were sold pursuant to the Registration Statement bears to
      the
      difference (the “Difference”) between the amount the Investor paid for the
      Securities that were sold pursuant to the Registration Statement and the amount
      received by the Investor from such sale. The relative fault of the Company,
      on
      the one hand, and the Investor on the other shall be determined by reference
      to,
      among other things, whether the untrue or alleged statement of a material fact
      or the omission or alleged omission to state a material fact or the inaccurate
      or the alleged inaccurate representation and/or warranty relates to information
      supplied by the Company or by the Investor and the parties’ relative intent,
      knowledge, access to information and opportunity to correct or prevent such
      statement or omission. The amount paid or payable by a party as a result of
      the
      losses, claims, damages, liabilities and expenses referred to above shall be
      deemed to include, subject to the limitations set forth in this Section 5(f),
      any legal or other fees or expenses reasonably incurred by such party in
      connection with investigating or defending any action or claim. The provisions
      set forth in paragraph (iii) of this Section 5(f) with respect to the notice
      of
      the threat or commencement of any threat or action shall apply if a claim for
      contribution is to be made under this paragraph (iv); provided, however, that
      no
      additional notice shall be required with respect to any threat or action for
      which notice has been given under paragraph (iii) for purposes of
      indemnification. The Company and the Investor agree that it would not be just
      and equitable if contribution pursuant to this Section 5(f) were determined
      solely by pro rata allocation or by any other method of allocation which does
      not take account of the equitable considerations referred to in this paragraph.
      Notwithstanding the provisions of this Section 5(f), the Investor shall be
      required to contribute any amount in excess of the amount by which the
      Difference exceeds the amount of any damages that the Investor has otherwise
      been required to pay by reason of such untrue or alleged untrue statement or
      omission or alleged omission. No person guilty of fraudulent misrepresentation
      (within the meaning of Section 11(f) of the Securities Act) shall be entitled
      to
      contribution from any person who was not guilty of such fraudulent
      misrepresentation.

    


    
      
         

      

      
        14

        
          

        

      

      
         

      

    

    (g) So
      long
      as a Registration covering the resale of Registrable Securities owned by the
      Investor is effective, the Company will furnish to the Investor upon the
      reasonable request of the Investor, a reasonable number of copies of the
      Prospectuses, and any supplements thereto, to supply to any other party
      requiring such Prospectuses; and the Company, upon the reasonable request of
      the
      Investor and with prior notice, will be available to the Investor or a
      representative thereof at the Company's headquarters to discuss information
      relevant for disclosure in the Registration covering the Registrable Securities
      and will otherwise cooperate with the Investor conducting an investigation
      for
      the purpose of reducing or eliminating the Investor’s exposure to liability
      under the Securities Act, including the reasonable production of information
      at
      the Company's headquarters, subject to appropriate confidentiality
      limitations.

    


    


    6. Severability.
      In the
      event any parts of this Subscription Agreement are found to be void, the
      remaining provisions of this Subscription Agreement shall nevertheless be
      binding with the same effect as though the void parts were deleted.

    


    7. Choice
      of Law and Jurisdiction; Arbitration.
      This
      Subscription Agreement will be deemed to have been made and delivered in the
      state of the Investor’s residence as set forth on the signature page hereto and
      will be governed as to validity, interpretation, construction, effect and in
      all
      other respects by the internal laws of the State of Delaware.

     

    8. Counterparts.
      This
      Subscription Agreement may be executed in one or more counterparts, each of
      which shall be deemed an original but all of which together shall constitute
      one
      and the same instrument. The execution of this Subscription Agreement may be
      by
      actual or facsimile signature.

     

    9. Benefit.
      This
      Subscription Agreement shall be binding upon and inure to the benefit of the
      parties hereto.

     

    10. Notices
      and Addresses.
      All
      notices, offers, acceptance and any other acts under this Subscription Agreement
      (except payment) shall be in writing, and shall be sufficiently given if
      delivered to the addresses in person, by Federal Express or similar courier
      delivery, or, if mailed, postage prepaid, by certified mail, return receipt
      requested, as follows:

     

    
      	Investor:	At the address designated
              on the
              signature page of this Subscription Agreement. 
	 	 
	the Company:	Element 21 Golf
              Company 
	 	200 Queens Quay East, Unit
              1 
	 	Toronto, Ontario, Canada,
              M5J2L4
	 	Tel: (416)
              363-2121 
	 	 	 


    

    or
      to
      such other address as any of them, by notice to the others may designate from
      time to time. The transmission confirmation receipt from the sender's facsimile
      machine shall be conclusive evidence of successful facsimile delivery.


    


    
      
         

      

      
        15

        
          

        

      

      
         

      

    

    11. Oral
      Evidence.
      This
      Subscription Agreement constitutes the entire agreement between the parties
      with
      respect to the subject matter hereof and supersedes all prior oral and written
      agreements between the parties hereto with respect to the subject matter hereof.
      This Subscription Agreement may not be changed, waived, discharged, or
      terminated orally but, rather, only by a statement in writing signed by the
      party or parties against which enforcement or the change, waiver, discharge
      or
      termination is sought.

    


    12. Section
      Headings.
      Section
      headings herein have been inserted for reference only and shall not be deemed
      to
      limit or otherwise affect, in any matter, or be deemed to interpret in whole
      or
      in part, any of the terms or provisions of this Subscription
      Agreement.

    


    13. Survival
      of Representations, Warranties and
      Agreements.
      The
      representations, warranties and agreements contained herein shall survive the
      delivery of, and the payment for, the Securities.

    


    14. Acceptance
      of Purchase.
      The
      Company may accept this Subscription Agreement by executing a copy hereof as
      provided and notifying me within a reasonable time thereafter.

    


    RESIDENTS
      OF ALL STATES:
      THE
      SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
      OF
      1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND ARE BEING OFFERED
      AND
      SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF SAID ACT
      AND SUCH LAWS. THE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY
      AND
      RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER SAID
      ACT
      AND SUCH LAWS PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD
      BE AWARE THAT THEY WILL BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS
      INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THE SECURITIES HAVE NOT BEEN
      APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION, ANY STATE
      SECURITIES COMMISSION OR OTHER REGULATORY AUTHORITY, NOR HAVE ANY OF THE
      FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE MERITS OF THIS OFFERING OR
      THE
      ACCURACY OR ADEQUACY OF THIS SUBSCRIPTION AGREEMENT. ANY REPRESENTATION TO
      THE
      CONTRARY IS UNLAWFUL.

    


    
      
         

      

      
        16

        
          

        

      

      
         

      

      

        RETURN
          THIS SIGNATURE PAGE VIA FAX TO:

        EDWIN
          C. PEASE, ESQ.

        BROWN
          RUDNICK BERLACK ISRAELS LLP

        FAX
          NUMBER 617-289-0499

      

       

    

    Dated:
      June __, 2006

    


    Manner
      in Which Title to the Securities is to be Held.
      (check
      one)

    ___
      Individual Ownership

    ___
      Community Property

    ___
      Joint
      Tenant with Right of Survivorship (both parties must sign)

    ___
      Partnership

    ___
      Tenants in common

    ___
      Corporation

    ___
      Trust

    ___
      Other
      (Please indicate)

     

    AGGREGATE
      INVESTMENT AMOUNT: $ 1,000,000 US

     

    
      	INDIVIDUAL
              INVESTORS:	 	ENTITY
              INVESTORS:
	 	 	 
	 	
            	 	By:	
            
	Signature (Individual) 	 	
              Name:


            
	 	 	
              Title:

            
	 	
            	 	 
	Signature (Joint) 	 	 
	(all record holders must
              sign)	 	 
	 	 	 
	 	
            	 	 
	Name(s) Typed or Printed	 	 
	 	 	 
	 	 	 
	Address to Which
              Correspondence	 	Address to Which
              Correspondence 
	Should be Directed  	 	Should be
              Directed 
	 	 	 
	 	
            	 	 	
            
	Tax Identification or	 	Tax Identification or
	Social Security Number	 	Social Security Number
	 	 	 


    

     

     

    The
      foregoing subscription is accepted and the Company hereby agrees to be bound
      by
      its terms.

     

    
      	 	 	 
	 	ELEMENT
              21 GOLF
              COMPANY
	 
 	 
 	 
 
	Dated:
              July __, 2006 	By:  	 
	 	
              
Name:
              Nataliya Hearn
	 	Title:President
              & CEO


    

     

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

    ANNEX
      A

    
 

    ACCREDITED
      INVESTOR QUESTIONNAIRE

    


    


    
      
         

      

      
         

        
          

        

      

      
         

      

    



    ACCREDITED
      INVESTOR QUESTIONNAIRE

    


    


    Purpose
      of this Questionnaire

    


    The
      Securities being offered by Element 21 Golf Company, a Delaware corporation
      (the
“Company”) pursuant to the Subscription Agreement to which this Accredited
      Investor Questionnaire is annexed, are being offered without registration under
      the Securities Act of 1933, as amended (the “1933 Act”), or the securities
      laws of any state, in reliance on the exemptions contained in Sections 4(2)
      and 4(6) of the 1933 Act and on similar exemptions under applicable state
      laws. Under Sections 4(2) and 4(6) and/or certain state laws, the Company may
      be
      required to determine that an individual or an individual together with a
“purchaser representative” or each individual equity owner of an investing
      entity meets certain suitability requirements before selling the Securities
      to
      such individual or entity. THE COMPANY MAY, AT ITS ELECTION, NOT SELL ANY
      SECURITIES TO A SUBSCRIBER WHO HAS NOT THOROUGHLY FILLED OUT A QUESTIONNAIRE.
      IN
      THE CASE OF AN INVESTOR THAT IS A PARTNERSHIP, TRUST, OR CORPORATION, EACH
      EQUITY OWNER MUST COMPLETE A QUESTIONNAIRE. This Questionnaire does not
      constitute an offer to sell or a solicitation of an offer to buy the Securities
      or any other security.

    


    Instructions

    


    One
      (1) copy of this Questionnaire should be completed, signed, dated, and delivered
      to:

     

    Edwin
      C.
      Pease

    Brown
      Rudnick Berlack Israels LLP

    One
      Financial Center

    Boston,
      MA 02111

    Fax:
      (617) 289-0499

    


    Please
      feel free to contact Mr. Pease directly at (617) 856-8453 if you have any
      questions with respect to the Questionnaire.

    


    Please
      Answer All Questions

    


    If
      the
      appropriate answer is “None” or “Not Applicable,” so state. Please print or type
      your answers to all questions. Attach additional sheets if necessary to complete
      your answers to any item.

    


    Your
      answers will be kept strictly confidential at all times; however, the Company
      may present this Questionnaire to such parties as it deems appropriate,
      including its counsel, in order to assure itself that the offer and sale of
      the
      Securities will not result in a violation of the registration provisions of
      the
      1933 Act or a violation of the securities laws of any state.

    


    


    
      
         

      

      
         

        
          

        

      

      
         

      

    

    


    


    


    1. Please
      provide the following personal information: 

    


    


    Name:                         Age:


    Residence
      Address

    (including
      zip code): ____________________________________________

    


    


     

    Telephone
      Numbers:

    


    Residence:________________________

    


    Business:
      ________________________

    


    


    2. I
      am an
      accredited investor (as defined in Rule 501(a) of Reg. D) because (check each
      appropriate description):

    


    
      	 	
              _________

            	
              I
                am a natural person whose individual net worth, or joint net worth
                with my
                spouse, exceeds $1,000,000.

            


    

    


    
      	 	
              _________

            	
              I
                am a natural person who had individual income exceeding $200,000
                in each
                of the two most recent years or joint income with my spouse exceeding
                $300,000 in each of those years and I have a reasonable expectation
                of
                reaching the same income level in the current
                year.

            


    

    


    
      	 	
              _________

            	
              I
                am a broker-dealer registered pursuant to Section 15 of the Securities
                Exchange Act of 1934.

            


    

    


    
      	 	
              _________

            	
              I
                am an organization described in Section 501(c)(3) of the Internal
                Revenue
                Code, not formed for the specific purpose of acquiring the Securities,
                with total assets exceeding
                $5,000,000.

            


    

    


    
      	 	
              _________

            	
              I
                am a corporation, Massachusetts or similar business trust or partnership,
                not formed for the specific purpose of acquiring the Securities,
                with
                total assets exceeding $5,000,000. 

            


    

    


    
      	 	
              _________

            	
              I
                am a trust, not formed for the specific purpose of acquiring the
                Securities, with total assets exceeding $5,000,000 and whose purchase
                is
                directed by a “sophisticated person,” as defined in Rule 506(b)(2)(ii) of
                Reg. D.

            


    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	 	 	
              (For
                the purposes of this questionnaire, a “sophisticated person” means any
                person who has such knowledge and experience in financial and business
                matters that he or she is capable of evaluating the merits and risks
                of
                the prospective investment.)

            


    

    


    
      	 	
              _________

            	
              I
                am an employee benefit plan within the meaning of the Employee Retirement
                Income Security Act of 1974 and (i) investment decisions for such
                plan are
                made by a plan fiduciary, as defined in Section 3(21) of such Act,
                which
                is a bank, savings and loan association, insurance company or registered
                investment advisor or (ii) such plan has total assets exceeding $5,000,000
                or (iii) if a self -directed plan, investment decisions are made
                solely by
                accredited investors. 

            


    

    


    
      	 	
              _________

            	
              I
                am an entity in which all of the equity owners are accredited investors.
                

            


    

    


    
      	 	
              _________

            	
              I
                am an accredited investor for the following
                reasons:

            


    

    


    3. Check,
      if
      appropriate:

    


    
      	 	
              ________

            	
              I
                hereby represent and warrant that I have such knowledge and experience
                in
                financial and business matters that I am capable of evaluating the
                merits
                and risks of any prospective investment in the Company. 

            


    

    


    4 If
      you
      did not check the box to Question 3, please answer the following additional
      questions: 

    


    4.1 Please
      describe any pre-existing personal or business relationship that you have with
      the Company or any of its officers and directors.

    


    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    4.2 Please
      describe any business or financial experience that you have had that would
      allow
      the Company to reasonably conclude that you are capable of protecting your
      interests in connection with your prospective investment in the Company. If
      none, so state.

     

    4.3 If
      your
      answer to Question 4.2 above was “None,” in order to evaluate the merits
      and risks of the investment, will you be relying upon the advice of any other
      person(s) who will be acting as your purchaser representative(s)?

    


    Yes
      _____

    No
      _____

     

    If
“yes,”
      please identify each such person and indicate his business address and telephone
      number in the space below (each such person must complete, and you must review
      and acknowledge, a separate purchaser representative questionnaire which will
      be
      supplied at your request and which must be returned to the Company prior to
      the
      sale of any Securities to you).

     

    5. By
      signing this Questionnaire, I hereby confirm the following statements:


    


    I
      am
      aware that the offering of the Securities pursuant to the accompanying
      Subscription Agreement which I hereby acknowledge as received and reviewed,
      will
      involve an investment in securities for which no market currently exists in
      the
      case of the Preferred Stock, and a limited market exists (subject to compliance
      with applicable state and federal securities laws) for the shares of Common
      Stock issuable upon the conversion of the shares of Preferred Stock and upon
      exercise of the Warrants, thereby requiring any investment to be maintained
      for
      an indefinite period of time, and I have no need to liquidate the
      investment.

    


    I
      acknowledge that any delivery to me of any documentation relating to the shares
      of Preferred Stock and Warrants prior to the determination by the Company of
      my
      suitability as an investor shall not constitute an offer of the shares of
      Preferred Stock and Warrants until such determination of suitability shall
      be
      made, and I agree that I shall promptly return all such documentation to the
      Company upon request.

    


    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Neither
      I
      nor any of my associates or affiliates: (i) are a member or a person associated
      with a member firm of the NASD, (ii) own any stock or other securities of any
      NASD member, or (iii) made subordinated loans to any NASD member.

    


    My
      answers to the foregoing questions are true and complete to the best of my
      information and belief, and I will promptly notify the Company of any changes
      in
      the information I have provided.

    


    I
      also
      understand and agree that, although the Company will use its best efforts to
      keep the information provided in answers to this Questionnaire strictly
      confidential, the Company may present this Questionnaire and the information
      provided in answers to it to such parties as it may deem advisable if called
      upon to establish the availability under any federal or state securities laws
      of
      an exemption from registration of the private placement or if the contents
      thereof are relevant to any issue in any action, suit, or proceeding to which
      the Company is a party or by which it or they are or may be bound.

     

    I
      realize
      that this Questionnaire does not constitute an offer by the Company to sell
      the
      Securities but is merely a request for information.

     

    _____________________________________

    Printed
      Name

    


    


    _____________________________________

    Signature

    


    


    _____________________________________

    Social
      Security Number or

    Employee
      Identification Number

    


    Date
      and
      Place Executed:

    


    Date:   

    


    Place:   

    


    
      
         

      

      
         

        
          

        

      

      
         

      

    


    ANNEX
      B

    


    ELEMENT
      21 GOLF COMPANY

    STOCK
      CERTIFICATE QUESTIONNAIRE

    


    Please
      provide the following information:

    


    
      	
              1.
                The exact name that your Securities are to be registered in (this
                is the
                name that will appear on your stock certificate(s) for the Preferred
                Stock
                and on the Warrants). You may use a nominee name if appropriate:
                

            	
               

               

              ___________________________________

            
	
              2.
                If
                the purchaser of the Securities and the Registered Holder listed
                above are
                not the same, please disclose the relationship between the purchaser
                of
                the Securities and the Registered Holder listed in response to item
                1
                above

            	 
	
              3.
                The mailing address of the Registered Holder listed in response to
                item 1
                above: 

            	
               

              ___________________________________

              ___________________________________

              ___________________________________

            
	
              4.
                The Social Security Number or Tax Identification Number of the Registered
                Holder listed in response to item 1 above

            	
               

              ___________________________________

            


    

    


    
      
         

      

      
         

        
          

        

      

      
         

      

    


    ANNEX
      C

    


    


    ELEMENT
      21 GOLF COMPANY

    REGISTRATION
      STATEMENT QUESTIONNAIRE

    


    In
      connection with the preparation of the Registration Statement, please provide
      the following information:

    


    


    Pursuant
      to the "Selling Stockholder" section of the Registration Statement, please
      state
      your or your organization's name exactly as it should appear in the Registration
      Statement: 

    


    ___________________________________________________________________

    


    Please
      provide the number of shares that you or your organization will own immediately
      after Closing, including those Securities purchased by you or your organization
      pursuant to this Subscription Agreement and those shares purchased by you or
      your organization through other transactions: 

    


    ___________________________________________________________________

    


    Have
      you
      or your organization had any position, office or other material relationship
      within the past three years with the Company or its affiliates?

    


    ________
      Yes  ________
      No

    


    If
      yes,
      please indicate the nature of any such relationships below:

    


    ___________________________________________________________________

    ___________________________________________________________________

    ___________________________________________________________________

    ___________________________________________________________________

     

    Are
      you
      (i) an NASD Member (see definition), (ii) a Controlling (see definition)
      shareholder of an NASD Member, (iii) a Person Associated with a Member of the
      NASD (see definition), or (iv) an Underwriter or a Related Person (see
      definition) with respect to the proposed offering; or (b) do you own any shares
      or other securities of any NASD Member not purchased in the open market; or
      (c)
      have you made any outstanding subordinated loans to any NASD
      Member?

    


    ________
      Yes  ________
      No

    


    


    
      
         

      

      
         

        
          

        

      

      
         

      

    

    If
      "yes,"
      please describe below:

    ___________________________________________________________________

    ___________________________________________________________________

    ___________________________________________________________________

    ___________________________________________________________________

    


    NASD
      Member.
      The term
      "NASD member" means either any broker or dealer admitted to membership in the
      National Association of Securities Dealers, Inc. ("NASD"). (NASD Manual, By-laws
      Article I, Definitions)

    


    Control.
      The term
      "control" (including the terms "controlling," "controlled by" and "under common
      control with") means the possession, direct or indirect, of the power, either
      individually or with others, to direct or cause the direction of the management
      and policies of a person, whether through the ownership of voting securities,
      by
      contract, or otherwise. (Rule 405 under the Securities Act of 1933, as
      amended)

    


    Person
      Associated with a member of the NASD.
      The term
      "person associated with a member of the NASD" means every sole proprietor,
      partner, officer, director, branch manager or executive representative of any
      NASD Member, or any natural person occupying a similar status or performing
      similar functions, or any natural person engaged in the investment banking
      or
      securities business who is directly or indirectly controlling or controlled
      by a
      NASD Member, whether or not such person is registered or exempt from
      registration with the NASD pursuant to its bylaws. (NASD Manual, By-laws Article
      I, Definitions)

    


    Underwriter
      or a Related Person.
      The
      term "underwriter or a related person" means, with respect to a proposed
      offering, underwriters, underwriters' counsel, financial consultants and
      advisors, finders, members of the selling or distribution group, and any and
      all
      other persons associated with or related to any of such persons. (NASD
      Interpretation).

    


    
      
         

      

      
         

        
          

        

      

      
         

      

    



    ANNEX
      D

    


    RISK
      FACTORS

    


    The
      Securities to be issued by the Company are speculative and involve a high degree
      of risk.
      Each
      investor is urged to carefully read the “Risk Factors” set forth below. As used
      herein, the terms “we”, “the Company” and “our” refer to Element 21 Golf
      Company.

    


    We
      Will Need To Raise Additional Funds. These Funds May Not Be Available When
      We
      Need Them or on Terms Favorable to Us.

    


    We
      will
      need to raise additional funds to operate the business, support more rapid
      expansion, develop new or enhanced products, respond to competitive pressures,
      acquire complementary businesses or technologies, or respond to unanticipated
      events. There can be no assurances that additional financing will be available
      when needed on favorable terms, or at all. If these funds are not available
      when
      we need them, we may need to change our business strategy or reduce our
      operations or investment activities. In addition, any issuance of additional
      equity securities will dilute the ownership interest of our existing
      stockholders and the issuance of additional debt securities may increase the
      perceived risk of investing in us.

    


    There
      Are Risks Associated With Our Stock Trading On The NASD OTC Bulletin Board
      Rather Than A National Exchange.

    


    There
      are
      significant consequences associated with our stock trading on the NASD OTC
      Bulletin Board rather than a national exchange. The effects of not being able
      to
      list our securities on a national exchange include:

    


    -
      Limited
      release of the market prices of our securities;

    


    -
      Limited
      news coverage of us;

    


    -
      Limited
      interest by investors in our securities;

    


    -
      Volatility of our stock price due to low trading volume;

    


    -
      Increased difficulty in selling our securities in certain states due to “blue
      sky” restrictions; and

    


    -
      Limited
      ability to issue additional securities or to secure additional
      financing.

    


    
      
         

      

      
         

        
          

        

      

      
         

      

    

    “Penny
      Stock” Regulations May Impose Certain Restrictions On The Marketability of Our
      Securities. 

    


    The
      SEC
      has adopted regulations which generally define “penny stock” to be any equity
      security that has a market price (as defined) less than $5.00 per share, subject
      to certain exceptions. The Company's Common Stock is presently subject to these
      regulations which impose additional sales practice requirements on
      broker-dealers who sell such securities to persons other than established
      customers and accredited investors (generally those with assets in excess of
      $1,000,000 or annual income exceeding $200,000, or $300,000 together with their
      spouse). For transactions covered by these rules, the broker-dealer must make
      a
      special suitability determination for the purchase of such securities and have
      received the purchaser's written consent to the transaction prior to the
      purchase. Additionally, for any transaction involving a penny stock, unless
      exempt, the rules require the delivery, prior to the transaction, of a risk
      disclosure document mandated by the SEC relating to the penny stock market.
      The
      broker-dealer must also disclose the commission payable to both the
      broker-dealer and the registered representative, current quotations for the
      securities and, if the broker-dealer is the sole market maker, the broker-dealer
      must disclose this fact and the broker-dealer's presumed control over the
      market. Finally, monthly statements must be sent disclosing recent price
      information for the penny stock held in the account and information on the
      limited market in penny stocks. Consequently, the “penny stock” rules may
      restrict the ability of broker-dealers to sell the Company's securities and
      may
      negatively affect the ability of purchasers of the Company's shares of Common
      Stock to sell such securities.

    


    Limited
      Trading Market; Restrictions on Transferability.
      The
      Company’s shares of Common Stock trade on the OTC Bulletin Board with limited
      daily trading volume. However, the Securities have not been registered under
      the
      Act, and accordingly, are subject to restrictions on transferability and resale
      and may not be transferred or sold except as permitted under the Act and
      applicable state securities laws, pursuant to registration or exemption
      therefrom. Investors should be aware that they will be required to bear the
      financial risk of this investment for an indefinite period of time.


    


    THE
      SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
      OF
      1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATES AND ARE BEING OFFERED
      AND
      SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF SAID ACT
      AND SUCH LAWS. THE SECURITIES ARE SUBJECT TO RESTRICTION ON TRANSFERABILITY
      AND
      RESALE AND MAY NOT BE PLEDGED, TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER
      SAID ACT AND SUCH LAWS PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. THE
      SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE
      COMMISSION, ANY STATE SECURITIES COMMISSION OR OTHER REGULATORY AUTHORITY,
      NOR
      HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE MERITS OF
      THIS
      OFFERING OR THE ACCURACY OR ADEQUACY OF THE OFFERING DOCUMENTS. ANY
      REPRESENTATION TO THE CONTRARY IS UNLAWFUL.

    


    
      
         

      

      
         

        
          

        

      

      
         

      

    

    IT
      IS
      INTENDED THAT THE SHARES OF PREFERRED STOCK OFFERED HEREBY AND THE WARRANTS
      WILL
      BE MADE AVAILABLE ONLY TO ACCREDITED INVESTORS, AS DEFINED IN SECTION
      2(15) OF
      THE
      SECURITIES ACT AND RULE 501 THEREUNDER. THE SECURITIES OFFERED HEREBY ARE BEING
      OFFERED PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
      SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS FOR NON-PUBLIC OFFERINGS.
      SUCH EXEMPTIONS LIMIT THE NUMBER AND TYPES OF INVESTORS TO WHICH THE OFFERING
      WILL BE MADE AND RESTRICT SUBSEQUENT TRANSFER OF THE SECURITIES.

    


    INVESTMENT
      IN THE SECURITIES OFFERED HEREBY SHOULD BE CONSIDERED ONLY BY PERSONS WHO CAN
      AFFORD TO SUSTAIN A LOSS OF THEIR ENTIRE INVESTMENT. INVESTORS WILL BE REQUIRED
      TO REPRESENT THAT THEY ARE FAMILIAR WITH AND UNDERSTAND THE TERMS OF THIS
      OFFERING, AND THAT HAVE SUCH KNOWLEDGE AND EXPERIENCE IN FINANCIAL AND BUSINESS
      MATTERS THAT THEY ARE CAPABLE OF EVALUATING THE MERITS AND RISKS OF THIS
      INVESTMENT.

    


    NO
      SECURITIES MAY BE RESOLD OR OTHERWISE DISPOSED OF BY AN INVESTOR UNLESS, IN
      THE
      OPINION OF COUNSEL SATISFACTORY TO THE COMPANY, REGISTRATION UNDER THE
      APPLICABLE FEDERAL AND STATE SECURITIES LAWS IS NOT REQUIRED OR COMPLIANCE
      IS
      MADE WITH SUCH REGISTRATION REQUIREMENTS. THE OFFEREE, BY ACCEPTING DELIVERY
      OF
      THESE MATERIALS, AGREES TO RETURN THE OFFERING MATERIALS AND ALL ACCOMPANYING
      OR
      RELATED DOCUMENTS TO THE COMPANY UPON REQUEST IF THE OFFEREE DOES NOT AGREE
      TO
      PURCHASE ANY OF THE SECURITIES OFFERED HEREBY.

    


    THESE
      MATERIALS ARE SUBMITTED IN CONNECTION WITH THE PRIVATE OFFERING OF THE
      SECURITIES AND DO NOT CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE IN ANY
      JURISDICTION IN WHICH SUCH AN OFFER OR SOLICITATION IS NOT AUTHORIZED. ANY
      REPRODUCTION OR DISTRIBUTION OF THE SUBSCRIPTION AGREEMENT IN WHOLE OR IN PART,
      OR THE DIVULGENCE OF ANY OF ITS CONTENTS, WITHOUT THE PRIOR WRITTEN CONSENT
      OF
      THE COMPANY, IS PROHIBITED. ANY PERSON ACTING CONTRARY TO THE FOREGOING
      RESTRICTIONS MAY PLACE HIMSELF AND THE COMPANY IN VIOLATION OF FEDERAL OR STATE
      SECURITIES LAWS.

    


    EACH
      OFFEREE MAY, IF HE SO DESIRES, MAKE INQUIRIES OF MANAGEMENT OF THE COMPANY
      WITH
      RESPECT TO THE COMPANY'S BUSINESS OR ANY OTHER MATTERS SET FORTH HEREIN, AND
      MAY
      OBTAIN ANY ADDITIONAL INFORMATION WHICH SUCH PERSON DEEMS TO BE NECESSARY IN
      ORDER TO VERIFY THE ACCURACY OF THE INFORMATION CONTAINED HEREIN AND TO MAKE
      AN
      INVESTMENT DECISION (TO THE EXTENT THAT THE COMPANY POSSESSES SUCH INFORMATION
      OR CAN ACQUIRE IT WITHOUT UNREASONABLE EFFORT OR EXPENSE). IN CONNECTION WITH
      SUCH INQUIRY, ANY DOCUMENTS WHICH ANY OFFEREE WISHES TO REVIEW WILL BE MADE
      AVAILABLE FOR INSPECTION AND COPYING OR PROVIDED, UPON REQUEST, SUBJECT TO
      THE
      OFFEREES AGREEMENT TO MAINTAIN SUCH INFORMATION IN CONFIDENCE AND TO RETURN
      THE
      SAME TO THE COMPANY IF THE RECIPIENT DOES NOT PURCHASE THE SECURITIES OFFERED
      HEREUNDER. ANY SUCH INQUIRIES OR REQUESTS FOR ADDITIONAL INFORMATION OR
      DOCUMENTS SHOULD BE MADE IN WRITING TO THE COMPANY AT THE COMPANY’S
      ADDRESS.

    


    
      
         

      

      
         

        
          

        

      

      
         

      

    



    ANNEX
      E

    


    SEC
      FILINGS

    


    Annual
      Report on Form 10-KSB for the fiscal year ended June 30, 2005.

    Quarterly
      Report on Form 10-QSB for the quarter ended September 30, 2005.

    Quarterly
      Report on Form 10-QSB for the quarter ended December 31, 2005.

    Quarterly
      Report on Form 10-QSB for the quarter ended March 31, 2006.