A registered direct offering (RDO) is a public offering of securities that is sold on a best efforts basis by a placement agent that is engaged by the issuer to introduce the issuer to potential purchasers. An RDO is generally targeted to a select number of accredited and institutional investors, although it may be sold to non-accredited investors. Issuers find RDOs an attractive option when they are seeking to test the market or conduct an offering without attracting much market attention.

In this Lexis Practice Advisor® Top 10 Practice Tips, we provide 10 practice points relating to RDOs.

In connection with 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, control persons. The 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 the sale of which might disrupt the trading market for the offered securities.

In this Lexis Practice Advisor® Top 10 Practice Tips, we provide 10 practice points to consider in drafting and negotiating lock-up agreements.