Cure Periods . . .
refer to provisions in agreements that allow a
defaulting party to avoid the consequences of being in default
by "fixing" the cause of the default. In a
financing agreement, a cure (or sometimes "grace") period
provision might state that if the company fails to perform a required
task, such as meeting goals that are a condition to obtaining more
funding from the investor, the company will, nonetheless, be given an
extra 30 days in which to perform that task before it is held to
be in default of the agreement. If the company meets the goal within
the cure period, the default will be "cured" and the investor
will remain contractually bound to provide
the next round of funding. See:
Benchmarks,
Default,
Stage
Financing.