Pre-Filing Matters – What third party consents are needed? – (25)

significant issue until a company completes its IPO, when the company’s securities begin to trade in the public market, there likely will be risk that the company’s officers, directors and employees will have confidential information that, if used, could enable them to make profitable trades in those securities.
Even though this type of insider trading would violate the employee’s legal obligations, and not necessarily the company’s obligations, insider trading violations are the type of publicity that all companies seek to avoid. Accordingly, it is an important part of the offering process for a company to adopt an insider trading policy. A typical policy will bar trading in the company’s securities (and the securities of any other company with which the company does business) during any period in which the individuals covered by the policy possess material non-publicinformation about the issuer, and most policies impose mandatory restrictions (“blackout periods”) during the period between the time that the company begins to compile its financial results for a quarter and one or two business days after the release of the financial information to the public in the form of an earnings release.
What third party consents are needed?
Prior to an IPO, a company may have entered into agreements that impose restrictions on its ability to complete the IPO, including
Shareholder agreements that may require consents to share issuances or that require the company to register the shareholders’ shares as part of the IPO (“registration rights”);
Loan or credit agreements that restrict share issuances or the use of proceeds from the offering; or

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