LEVERAGE BASED PRICING Clause Samples
The Leverage Based Pricing clause establishes that the pricing of a product or service is determined by the level of financial leverage or borrowing used by the customer. In practice, this means that customers with higher leverage ratios may be charged different rates or fees compared to those with lower leverage, reflecting the increased risk or resource allocation required by the provider. This clause helps ensure that pricing is aligned with the risk profile of each customer, allowing the provider to manage risk exposure and maintain fair compensation for varying levels of financial risk.
LEVERAGE BASED PRICING. If, at the end of any calendar quarter, the Leverage Ratio is less than or equal to 1.5 to 1.0, the interest rate for the succeeding calendar quarter shall be adjusted to, as appropriate, either the Prime Rate minus One-eighth of one percent (0.125%) or one hundred seventy-five (175) basis points in excess of the Benchmark Rate. If, at the end of any calendar quarter, the Leverage Ratio is less than or equal to 1.0 to 1.0, the interest rate for the succeeding calendar quarter shall be adjusted to, as appropriate, either the Prime Rate minus One-fourth of one percent (0.250%) or one hundred fifty (150) basis points in excess of the Benchmark Rate.