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Lockup Agreement

An underwriter's right to require holders of restricted securities to refrain from selling restricted securities during a specified period following the effective date of a registration statement filed by the company with the SEC, usually on an IPO but sometimes in connection with subsequent public offerings. This right is designed to minimize the availability of new stock for sale to the public to permit the company to facilitate the company's successful public offering. Also referred to as a market standoff.

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Finance & Investment

Category: Business

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