In European loan contracts, these payments are generally limited under separate specific commitments relating to dividends and stock withdrawals or payment of certain types of payments to non-borrowers, such as administrative and advisory fees, or repayment of certain types of subordinated debt. As usual, borrowers can negotiate specific carve-outs (usually hard amounts) for certain “authorized payments” or “authorized distributions” as needed (e.g. B to allow some advice payments and other payments to the sponsor) in addition to the usual exceptions. As a general rule, as noted above, the terms of the incremental and incremental debt and equivalent ratio have an important precision of submissions and guarantees, including the absence of default or default, and, in some sectors of the market, either pro forma compliance with the existing financial agreement (if any), or the execution of a specific leverage test that was verified at the time of the arrival of the debt. Limited terms and conditions allow a borrower to choose the signature date (also known as the “validity date”) of the acquisition contract (“audit date for acquisition contracts”) as the reference date for compliance with the required conditions. Therefore, if the borrower made such a choice, the combined conditions of access to incremental credit and the completion of an authorized acquisition (which perhaps included the accuracy of the insurance and guarantees, no payment events and levers) would be considered at the time of the execution of the takeover contract, only a non-payment or bankruptcy test at the close of the transaction , and the borrower with the opportunity to close the transaction, to include the financial ratios of the target entity (i.e. EBITDA) at the time of these tests. Although the average market has largely incorporated the limited conditions for protecting acquisitions, some lenders in transactions with lower SMEs continue to insist that the corresponding acquisition be completed within a specified period of time from the date of execution of the sales contract (normally no more than 180 days), or risk removing the restricted acquisition conditions. Therefore, if the acquisition is not completed within the agreed time frame, the restricted conditionality will be removed and the borrower would have to meet all the conditions at the time of the incremental loan. Although not capped, the ratio-based incremental debt capacity is not capped, it is a standard feature of many large-scale credit contracts in Europe, but the number of European agreements is decreasing with another “freebie” or “free-and-clear” amount.