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 ?
Most lockup agreements expire after six months, and there is a spike in Nasdaq volumes at about this time.
We measure this variable as the percentage change in the stock price during the six months following the IPO, because most restricted stock is subject to lockup agreements that expire after six months.
The overall results in this study suggest that, at least in Singapore, IPO firms generally do not provide exaggerated earnings forecasts to exploit uninformed investors, because the lockup agreement removes personal incentives to issue aggressive forecasts.
Lockup agreements in Singapore, like those in the United States, prohibit pre-IPO shareholders from selling their shares for a period after the IPO.
The lockup agreements prevent each officer and director from selling any amount of their shares of NAEG stock for a period of 18 months.
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.
Further details regarding these and other contemplated aspects of the transaction are set forth in the restructuring term sheet attached to the executed lockup agreements.
As a result, the shares subject to lockup agreements will become freely tradable in the public market beginning May 20, 2008, subject to certain extension as described in the prospectus for the initial public offering.
Certain Senior Noteholders have entered into lockup agreements (the "Lockup Agreements") with Star.
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.