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To: SteveF who wrote (15305)	12/14/2011 2:37:00 PM
From: scion	Respond to of 53574

When a company sells its stock to an investor, a stock subscription agreement must be prepared. If the offering is considered "public" rather than "private" under U.S. securities law, burdensome reporting requirements apply. A good private subscription agreement defines the relationship between the company and the investor and establishes that the offering qualifies as a private placement rather than a public offering. [...] Investor Obligations In addition to representations that establish accredited investor status, the investor must undertake a number of other obligations. The investor must indemnify the company for all damages suffered by the company if any of its representations turn out to be false. A good subscription agreement will also require the investor to maintain company confidentiality with respect to any non-public information contained in the Private Placement Memorandum and to refrain from competing against the company, soliciting its customers or impairing its good name in any way. ehow.com