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The ratio shall be determined annually by reference to the most recent audited \ufb01nancial statement of Golden Ridge and if the audited \ufb01nancial statement should reveal that Golden Ridge is not in compliance with the requirements of this Section 8.2, then the penalty set forth in Section 8.1 shall apply.", "size": 3, "hash": "c10c35f3be53ac24b1b9f326bef2ec73", "id": 6}, {"samples": [{"hash": "k8xiT3QZntc", "uri": "/contracts/k8xiT3QZntc#adequate-capital", "label": "Master Transaction Agreement (Calpine Corp)", "score": 21.0, "published": true}, {"hash": "ldJKTAjpBTS", "uri": "/contracts/ldJKTAjpBTS#adequate-capital", "label": "Master Transaction Agreement (Calpine Corp)", "score": 18.0, "published": true}], "snippet_links": [{"key": "not-insolvent", "type": "clause", "offset": [11, 24]}, {"key": "after-giving", "type": "clause", "offset": [51, 63]}, {"key": "the-transactions-contemplated-by-this-agreement", "type": "clause", "offset": [74, 121]}, {"key": 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"2025-07-07T12:37:39+00:00", "also_ask": ["What objective standards define 'adequate capital' in this context?", "How can parties negotiate measurable capital thresholds to avoid ambiguity?", "What are the legal consequences if a party is found undercapitalized?", "How do courts typically assess and enforce 'adequate capital' provisions?", "How does this clause compare to capitalization requirements in similar agreements or jurisdictions?"], "drafting_tip": "Specify minimum capital requirements to ensure financial stability, define assessment methods to avoid disputes, and set review periods to adapt to changing business needs.", "explanation": "The Adequate Capital clause requires a party, typically a company, to maintain a certain level of financial resources or capital throughout the duration of an agreement. This clause often specifies minimum capital thresholds or financial ratios that must be met, and may require regular reporting or certification to demonstrate compliance. Its core practical function is to ensure the party remains financially stable and capable of fulfilling its obligations, thereby reducing the risk of default or insolvency during the contractual relationship."}, "json": true, "cursor": ""}}