Unassociated Document


    


    


    


    


    Name of
Investor:

    


    SUBSCRIPTION
AGREEMENT

     

    
      	 
      	
              January
      20, 2009    

            


    

    


    Element
21 Golf Company

    200
Queens Quay E #1

    Toronto,
Ontario, Canada M5A 4K9

    


    1. Investment.  The
undersigned (sometimes referred to herein as “I” or the “Investor”) hereby
agrees to loan a total of Three
Hundred ($ 300,000) (the “Loan Amount”) to Element 21 Golf Company, a
Delaware corporation (the “Company”), in exchange for (i) a convertible
promissory note (the “Note”), a form of which is attached hereto as Exhibit A, and (ii)
warrants for shares of the Company's common stock, a form of which is attached
hereto as Exhibit
B (the “Warrants”), on the terms and conditions described
herein.  The Note shall bear interest at a rate of 7% per annum, with
principal and interest due and payable on July 20, 2009.

    


    2. Payment.  I
hereby tender to the Company the Loan Amount, one manually executed copy of this
Subscription Agreement and an executed copy of my Accredited Investor
Questionnaire which is attached hereto as Annex A.

    


    I fully understand that the Company has
a limited operating history and that the Note is a speculative investment which
involves a high degree of risk of loss of my entire investment.  I
fully understand the nature of the risks involved in making the loan to the
Company and I am qualified by my knowledge and experience to evaluate
investments of this type.  I have carefully considered the potential
risks relating to the Company and making the loan to the Company and have, in
particular, reviewed each of the risks set forth in Annex B attached
hereto and the Company’s filings with the Securities and Exchange Commission set
forth on Annex
C attached hereto which may be obtained at www.sec.gov
(the “SEC Filings”).  Both my advisors and I 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 my advisors and I have also had the
opportunity to obtain additional information necessary to verify the accuracy of
information furnished about the Company.  Accordingly, I have
independently evaluated the risks of making the loan to the
Company.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    3. Investor
Representations and Warranties.  I acknowledge, represent and
warrant to, and agree with, the Company as follows:

    


    (a) I am
aware that my investment involves a high degree of risk, certain of which risks
are disclosed in the Risk Factors attached hereto as Annex B.  I
am 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) I
acknowledge and am aware that there is no assurance as to the future performance
of the Company.

    


    (c) I
acknowledge that there may be certain adverse tax consequences to me in
connection with my making the loan to the Company and my receipt of the
Warrants, and the Company has advised me to seek the advice of experts in such
areas prior to making this investment.

    


    (d) I am
making the loan for my own account for investment and not with a view to or in
connection with the distribution of the Note, the Warrants, or the shares of the
Company’s Common Stock, $.01 par value per share issuable upon conversion of the
Note or the exercise of the Warrants (collectively, the “Securities”), nor with
any present intention of selling or otherwise disposing of all or any part of
the Securities.  I agree that I must bear the economic risk of my
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.  I understand that the
Company is under no obligation to register any of the Securities on my behalf or
to assist me in complying with any exemption from such registration under the
Securities Act or any state securities laws.  I hereby authorize the
Company to place a legend denoting the foregoing restrictions on any of the
Securities.

    


    (e) I am
not a member of the National Association of Securities Dealers, Inc. (“NASD”); I
am not and have 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 I do not own any stock or other
interest in any member of the NASD (other than interests acquired in open market
purchases).

    


    (f) I
recognize 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 my investment.  I further understand
that none of the Company’s assets have been pledged as security for the
Note.  I believe that an investment in the Securities is suitable for
me based upon my investment objectives and financial needs, and I have adequate
means for providing for my current financial needs and contingencies and have no
need for liquidity with respect to my investment in the Securities.

     

    
      
         

      

      
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    (g) I
have been given access to full and complete information regarding the Company
and the Securities and have utilized such access to my satisfaction for the
purpose of obtaining information, and I have 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) I
have 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 have obtained, in my judgment, sufficient
information from the Company to evaluate the merits and risks of an investment
in the Securities.  I have not utilized any person as my purchaser
representative as defined in Regulation D promulgated by the Securities Exchange
Commission pursuant to the Securities Act in connection with evaluating such
merits and risks.

    


    (i) I
have relied solely upon my own investigation in making a decision to invest in
the Securities.

    


    (j) I
have received no representation or warranty from the Company or any of its
respective officers, directors, employees, consultants or agents in respect of
my investment in the Securities and I have received no information (written or
otherwise) from them relating to the Company or its business other than as
contained herein or in the SEC Filings.  I am 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) I
have had full opportunity to ask questions and to receive satisfactory answers
concerning the offering of the Securities and other matters pertaining to my
investment in the Securities and all such questions have been answered to my
full satisfaction.

    


    (l) I
have 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) I am
an “accredited investor” as defined in Section 2(15) of the Securities Act and
in Rule 501 promulgated thereunder.

    


    (n) I understand 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 my 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.

     

    
      
         

      

      
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    (o) I
understand 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) I
have been urged to seek independent advice from my professional advisors
relating to the suitability of an investment in the Securities in view of my
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 my Accredited Investor Questionnaire, as well as any
information which I have furnished to the Company with respect to my 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, I
will furnish such revised or corrected information to the Company.

    


    I hereby acknowledge and am aware that
except for any rescission rights that may be provided under applicable laws, I
am not entitled to cancel, terminate or revoke this subscription, and any
agreements made in connection herewith shall survive my death or
disability.

    


    5. Indemnification.  I
hereby agree to indemnify and hold harmless the Company and its officers,
directors, shareholders, employees, agents, and attorneys against any and all
losses, claims, demands, liabilities, and expenses (including reasonable legal
or other expenses, including reasonable attorneys' fees) incurred by each such
person in connection with defending or investigating any such claims or
liabilities, whether or not resulting in any liability to such person, to which
any such indemnified party may become subject under the Securities Act, under
any other statute, at common law or otherwise, insofar as such losses, claims,
demands, liabilities and expenses (a) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact made by me and
contained in this Subscription Agreement or my Accredited Investor
Questionnaire, or (b) arise out of or are based upon any breach by me of any
representation, warranty, or agreement made by me contained herein.

    


    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.

     

    
      
         

      

      
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    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 E #1

    Toronto,
Ontario, Canada M5A 4K9

    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.

    


    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.

     

    
      
         

      

      
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    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.

    


    
      
         

      

      
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    ANNEX B

    


    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
Securities and Exchange Commission (the “Commission”) 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 Commission 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 NOTES 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 C

    


    SEC
FILINGS

    


    Annual
Report on Form 10-KSB for the fiscal year ended June 30, 2008.

    Quarterly
Report on Form 10-QSB for the quarter ended September 30, 2008