Lockup Agreement

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Lockup Agreement

Where the purchaser of securities agrees not to sell the securities for a certain period of time (the lockup time).

Lockup Agreement

1. See: Crown jewel lockup agreement.

2. During an IPO, a contract prohibiting executives, underwriters, and/or venture capitalists from selling their shares in the company for a certain period of time. The period of time is usually about six months, but may be longer or shorter. A lockup agreement exists to reduce the pressure for volatility as the company goes through its first few months of public trade.

lockup agreement

A contractual offer of valuable assets or stock made by a takeover target to the suitor deemed most acceptable to management. A lockup agreement tends to discourage unwanted suitors, but it may penalize the target firm's stockholders because it eliminates counteroffers. Also called crown jewel lockup agreement.
References in periodicals archive ?
LONDON: British investors have called upon investment banks to stick closer to lock-up agreements on sales of company shares after a major transaction, saying it would ensure more stable markets.
LLC is releasing a lock-up restriction with respect to certain shares of ServiceNow's common stock held by a director of ServiceNow to be sold in the proposed offering and, in addition, is granting a waiver to a specific provision found in all of the IPO lock-up agreements that were entered into by ServiceNow and ServiceNow's security holders.
Securities law permits takeover bidders to enter into prebid lock-up agreements with major target shareholders.
one of the world leaders in satellite-based digital radio services, today announced that it has entered into new lock-up agreements extending through December 31, 2006 covering all shares held by Noah Samara and the other members of the Company's senior management and certain shares held by its directors and certain of its significant stockholders.
LLC, on behalf of itself and the other underwriters for ServiceNow's previously completed initial public offering of shares of common stock, is releasing a lock-up restriction with respect to certain shares of ServiceNow's common stock held by a director of ServiceNow to be sold in the proposed offering and, in addition, is granting a waiver to a specific provision found in all of the IPO lock-up agreements that were entered into by ServiceNow and ServiceNow's securityholders.
Holding and Agora or in the lock-up agreements concluded by Agora Holding and
TORONTO -- O&Y REIT Institutional Unitholders Enter into Lock-Up Agreements in Support of Transaction
Nabors has entered into permitted lock-up agreements (as contemplated by the Command rights plan) with shareholders and optionholders of Command who own or control an aggregate of 7,016,550 common shares of Command and options to acquire an aggregate of 526,250 common shares of Command, pursuant to which such shareholders and optionholders have agreed (subject to the terms and conditions of the lock-up agreements) to deposit their common shares of Command (including common shares of Command acquired upon exercise of such options) pursuant to the offer intended to be made by, or on behalf of, Nabors.
Certain of Fastclick's management and significant stockholders entered into lock-up agreements with the lead underwriters in Fastclick's initial public offering that may place restrictions on their ability to tender their shares in the exchange offer.
I believe lock-up agreements should be used widely throughout the industry by people in my position.
OTCBB:PSDS) announced today that 19 shareholders have executed one-year lock-up agreements with the Company insuring the Company, as well as the investing public that existing shareholders have continued faith in the future of the Company.
5% of its issued and outstanding common stock, have entered into lock-up agreements under which they agree to vote their shares in favor of the Plan of Arrangement.