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Reference.org
Lock-up provision
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<p> Lock-up provision is a term used in corporate finance which refers to the option granted by a seller to a buyer to purchase a target company’s stock as a prelude to a <a href="/facts/Takeover/JGfEbTy0">takeover</a>. The major or controlling shareholder is then effectively "locked-up" and is not free to sell the stock to a party other than the designated party (potential buyer). </p><p>Typically, a lockup agreement is required by an acquirer before making a bid and facilitates negotiation progress. Lock-ups can be “soft” (shareholder permitted to terminate if superior offer comes along) or “hard” (unconditional). </p>