Top 10 Practice Tips: Lock-Up Agreements

Summary

This Top 10 Practice Tips provides key practice points to consider in drafting and negotiating lock-up agreements. In securities offerings, the underwriters or placement agents generally negotiate a lock-up agreement with the issuer, as well as with the issuer's directors, officers, and, in the case of initial public offerings (IPOs), control persons and other stockholders. Lock-up agreements provide the underwriters or placement agents with some assurance that new issuer securities will not be sold immediately following the proposed offering, which might disrupt the trading market for the offered securities.