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 ?
Our overall evidence suggests that by providing credibility for the information disclosure, lockup agreements complement earning forecast disclosures in mitigating asymmetric information problems.
Our sample consists of IPOs with lockup agreements between 1988, the first year that Thomson Financial Securities Data (SDC) reported lockup information, and 2003, the last year that we were able to measure buy-and-hold returns (BHRs) for 756 trading days subsequent to the end of 126 trading days following lockup expiration.
Such lockup agreements prevent pre-IPO owners from selling shares for a specified period--typically six months--following the IPO, and they generally apply to most of the shares not sold in the IPO.
Our 3 year share lockup agreements reflect a high level of total commitment to the Company's long term success with our public shareholders.
have agreed not to exercise any remedies on account of existing defaults, including a previously missed interest payment, as have the holders of a majority of Atrium's bank debt, mezzanine debt and accounts receivable facility, for a forbearance period extending through the expiration or termination of the transaction lockup agreements.
Georgiopoulos and Wobensmith will be subject to lockup agreements for 360 days and 45 days, respectively.
While the Soros Group indicated that they were confident that they would be able to secure or provide sufficient financing to alleviate the risks associated with a potential alleged default being asserted by the Partnership's senior noteholders after April 30, 2006 (the date upon which the Partnership's lockup agreements with Star's senior noteholders terminate), the Soros Group did not provide any details of such financing.
The revised Soros Group proposal, like the original Soros Group proposal, has failed to provide any assurances of entering into acceptable lockup agreements with Star's senior noteholders.
However, the lockup agreements with the senior noteholders terminate upon the termination of the Kestrel agreement, and the Soros Group proposal provided no assurances that similar lockup agreements would be entered into with the Partnership's senior noteholders and that Star would be able to similarly resolve the pending dispute with its noteholders.
Approximately 78 percent of the BAXL shares in the merger will be subject to lockup agreements.
All stock issued in connection with the transaction is being issued as restricted stock, and will be subject to lockup agreements once it becomes free.
Lockup agreements pursuant to this offering, which limit the ability of certain corporate officers to trade Ibis shares, are due to expire on January 13, 2004.