▁a ▁target ▁company ’ s ▁stock ▁as ▁a ▁pre l ude ▁to ▁a ▁take over . ▁The ▁major ▁or ▁cont rolling ▁share holder ▁is ▁then ▁effectively ▁" locked - up " ▁and ▁is ▁not ▁free ▁to ▁sell ▁the ▁stock ▁to ▁a ▁party ▁other ▁than ▁the ▁designated ▁party ▁( pot ential ▁bu yer ). ▁▁ ▁Typ ically , ▁a ▁lock up ▁agreement ▁is ▁required ▁by ▁an ▁acqu ir er ▁before ▁making ▁a ▁bid ▁and ▁facil it ates ▁neg ot iation ▁progress . ▁Lock - ups ▁can ▁be ▁“ soft ” ▁( share holder ▁permitted ▁to ▁terminate ▁if ▁superior ▁offer ▁comes ▁along ) ▁or ▁“ hard ” ▁( un cond itional ). ▁ ▁Types ▁of ▁lock - up ▁arrang ements ▁ ▁These ▁prov isions ▁may ▁take ▁the ▁form ▁of ▁ ▁( i ) ▁break - up / termin ation ▁fe es , ▁ ▁( ii ) ▁options ▁given ▁to ▁target ▁share hold ers ▁to ▁buy ▁target ▁stock , ▁ ▁( iii ) ▁rights ▁given ▁to ▁bid der ▁share hold ers ▁to ▁purchase ▁target ▁assets , ▁ ▁( iv ) ▁force ▁the ▁vote ▁prov isions ▁in ▁mer ger ▁agre ements , ▁and ▁ ▁( v ) ▁agre ements ▁with ▁major ▁share hold ers ▁( v oting ▁agre ements , ▁agre ements ▁to ▁sell ▁shares ▁or ▁agre ements ▁to ▁tender ). ▁ ▁In ▁a ▁stock ▁lock - up , ▁the ▁bid der ▁is ▁able ▁to ▁either ▁purchase ▁ 1 ) ▁author ized ▁but ▁un iss ued ▁shares ▁of ▁the ▁major ▁or ▁cont rolling ▁stock holder , ▁or