A cure period clause provides a specific timeframe within which a party in breach of a contract can rectify or "cure" the breach to avoid further legal consequences, such as termination of the agreement. This clause offers a structured opportunity to remedy non-compliance, thereby maintaining the contractual relationship and reducing potential disputes.
In determining whether an Additional Cure Period after the expiration of the Initial Cure Period is appropriate, the Exchange will consider the likelihood that the Delinquent Report and all Subsequent Reports can be filed or refiled, as applicable, during the Additional Cure Period, as well as the company's general financial status, based on information provided by a variety of sources, including the company, its audit committee, its outside auditors, the staff of the SEC and any other regulatory body. The Exchange strongly encourages companies to provide ongoing disclosure on the status of the Delinquent Report and any Subsequent Reports to the market through press releases, and will also take the frequency and detail of such information into account in determining whether an Additional Cure Period is appropriate. If the Exchange determines that an Additional Cure Period is appropriate and the company fails to file the Delinquent Report and all Subsequent Reports by the end of such Additional Cure Period, suspension and delisting procedures will commence immediately in accordance with the procedures set out in Section 804.00.
During the six-month period from the date of the Filing Delinquency (the "Initial Cure Period"), the Exchange will monitor the Company and the status of the Delinquent Report and any subsequent delayed filings, including through contact with the Company, until the Filing Delinquency is cured. If the Company fails to cure the Filing Delinquency within the Initial Cure Period, the Exchange may, in the Exchange's sole discretion, allow the Company's securities to be traded for up to an additional six-month period (the "Additional Cure Period") depending on the Company's specific circumstances. If the Exchange determines that an Additional Cure Period is not appropriate, suspension and delisting procedures will commence in accordance with the procedures set out in Section 1010 of the Company Guide. If the Exchange determines that an Additional Cure Period of up to six months is appropriate and the Company fails to file its delinquent report and any subsequent delayed filings by the end of that period, suspension and delisting procedures will generally commence.
The NYSE American may in its sole discretion decide (i) not to afford an issuer any Initial Cure Period or Additional Cure Period, as the case may be, at all or (ii) at any time during the Initial Cure Period or Additional Cure Period, to truncate the Initial Cure Period or Additional Cure Period, as the case may be, and immediately commence suspension and delisting procedures if the issuer is subject to delisting pursuant to any other provision of the Company Guide, including if the Exchange believes, in the Exchange's sole discretion, that continued listing and trading of an issuer's securities on the Exchange is inadvisable or unwarranted in accordance with Sections 1001-1006 of the Company Guide. At this time, the anticipated date the Filing Delinquency will be cured is not known.
As a result of the foregoing, the Company has become subject to the procedures and requirements of Section 1007 of the Company Guide. During the six-month period from the date of the Filing Delinquency (the “Initial Cure Period”), the Exchange will monitor the Company and the status of the Form 20-F and any subsequent reports until the Filing Delinquency is cured. If the Company fails to cure the Filing Delinquency within the Initial Cure Period, the Exchange may, in its sole discretion, allow the Company’s securities to be traded for up to an additional six-month period (the “Additional Cure Period”), depending on the Company’s specific circumstances. If the Exchange determines that an Additional Cure Period is not appropriate, suspension and delisting procedures will commence in accordance with the procedures set forth in Section 1010 of the Company Guide.
Notwithstanding the foregoing, however, the Exchange may in its sole discretion decide (i) not to afford the Company any Initial Cure Period or Additional Cure Period, as the case may be, at all or (ii) at any time during the Initial Cure Period or Additional Cure Period, to truncate the Initial Cure Period or Additional Cure Period, as the case may be. Furthermore, the Exchange may immediately commence suspension and delisting procedures if the Company is subject to delisting pursuant to any other provision of the Company Guide, including if the Exchange believes, in its sole discretion, that continued listing and trading of the Company’s securities on the Exchange is inadvisable or unwarranted in accordance with Sections 1001-1006 of the Company Guide.
In accordance with Section 1007 of the Company Guide, the Company will have six months from February 23, 2022, or until August 23, 2022 (the “Initial Cure Period”), to file the Delayed Form 10-Q with the SEC. If the Company fails to file the Delayed Form 10-Q during the Initial Cure Period, the Exchange may, in its sole discretion, provide an additional six-month period (the “Additional Cure Period”). The Company can regain compliance with the Exchange’s continued listing standards at any time during the Initial Cure Period or Additional Cure Period, as applicable, by filing the Form 10-Q with the SEC. The Company intends to file the Delayed Form 10-Q as soon as practicable.
During the Initial Cure Period and the Additional Cure Period, if applicable, the Company’s common stock will continue to be listed on the Exchange, subject to the Company’s compliance with other continued listing requirements, with a late filer (“.LF”) indicator.
Pursuant to Section 802.01C of the NYSE’s Listed Company Manual, the Company has six months (“the Cure Period”) following receipt of the notice to regain compliance with the minimum share price requirement. The Company can regain compliance at any time during the Cure Period if on the last trading day of any calendar month during the Cure Period the Company has a closing share price of at least US$1.00 per ADS, and an average closing share price of at least US$1.00 per ADS over the 30 trading-day period ending on the last trading day of that month. In the event that at the expiration of the Cure Period, both a US$1.00 per ADS closing share price on the last trading day of the Cure Period and a US$1.00 per ADS average closing share price over the 30 trading-day period ending on the last trading day of the Cure Period are not attained, the NYSE will commence suspension and delisting procedures. The Company has notified the NYSE on August 4, 2022 of its intent to cure the deficiency. During the Cure Period, the Company’s ADSs will continue to be listed and traded on the NYSE, subject to compliance with other NYSE continued listing standards and other rights of the NYSE to delist the ADSs. The Company is currently in compliance with all other NYSE continued listing standards. The NYSE notice does not affect the Company’s business operations, its U.S. Securities and Exchange Commission reporting requirements or contractual obligations.
A cure period is a specified timeframe within a contract that allows a party to rectify, or “cure,” a breach or default of the contract terms before more severe penalties or consequences are enforced. This provision can help prevent contract termination or other financial penalties by giving the breaching party an opportunity to mend their failure to comply with contractual obligations.
You should use a cure period when drafting contracts where you want to provide a fair opportunity for either party to correct a breach before escalating the issue. Cure periods are particularly beneficial in long-term agreements or those where relationships and potential future dealings between parties are to be preserved. They are also helpful in contracts dealing with complex projects where minor breaches might occur due to various unforeseen circumstances.
When drafting a cure period, you should clearly specify:
Example:
In the event that either party fails to perform any obligation under this Agreement, the non-breaching party must provide written notice of such failure to the breaching party. The breaching party shall have thirty (30) days from receipt of such notice to cure the breach. If the breach is not remedied within this cure period, the non-breaching party may pursue further remedies available under this Agreement or by law.
Cure periods are commonly included in various types of contracts, including:
These contracts benefit from including cure periods to maintain business relationships and avoid unnecessary disputes.
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