A subscription agreement is an agreement that is used to define the terms and conditions of an investment into a private placement offering or limited partnership (LP). Subscription agreements are generally defined in SEC Rule 506(b) and 506(c) of Regulation D.

Regulation D allows companies to act as a private placement for certain types of securities without registering them with the SEC. According to the SEC, this type of offering “shall not involve any public solicitation or advertising” and is generally attractive for companies that don’t want to be exposed to transactions with the public.

The subscription agreement itself will generally include at least the following information:

- Names and contact information of both parties - Information about the offering, such as type of security, type of transaction, value of the offering - The amount of money the investor is contributing - Terms and conditions of the offering - Representations and warranties regarding the accuracy of the information - Documentation clearly outlining the investor’s rights - Fees to be paid by the investor - Details regarding when and how the investor can exit the investment - Language regarding the governing law of the investment

Subscription agreements are important documents as they protect both the issuer and the investor’s interests. They are legally binding contracts that ensure that both parties understand the terms and conditions of the investment. They also help to protect the issuer from any potential liabilities from investors if something goes wrong.

Overall, subscription agreements are important documents when it comes to investing in a private placement or LP. They establish the rules of the investment and help to protect both the issuer and the investor from potential liabilities or misunderstandings. It’s important to make sure that any subscription agreement is reviewed and approved by legal counsel prior to investing.