Traditionally, the borrower`s ability to incur incremented debt was limited to a fixed dollar amount and was linked to pro forma compliance with a maximum debt ratio (usually the maintenance leverage ratio). In recent years, the highly liquid credit market has allowed borrowers and sponsors to successfully negotiate maximum flexibility in credit agreements in order to incur debt and implement changes in the borrower`s capital structure. This flexibility is reflected in several recent trends in incremental facilities: “free and clear” incremental debt baskets, reclassification of free and net incremental debt as quota-based debt, incremental equivalent debt, and limited conditionality for incremental debt to be used to finance an acquisition. Limited conditionality for incremental financing of acquisitions in large deals now often includes what is known as Sungard conditionality (or “certain funds”), as a result of incremental debt that results primarily from the financing of an acquisition, a reduction of only (i) the guarantees and guarantees contained in the acquisition agreement from the objective that must be true at the end and (ii) certain agreed “specified guarantees”. “are limited to the company`s basic status and authority, compliance, and regulatory issues (e.g. B margin rules, Investment Company Act 1940, anti-terrorism and money laundering laws), third-party effectiveness of loan documents, no conflict with laws, solvency and the status of pledge rights (subject to restrictions). The absence of payment defaults is also limited to the absence of late payment or bankruptcy. As an alternative, some incremental provisions on facilities provide that the absence of all cancellation conditions and (sometimes) the withdrawal of all insurance are tested at the time of signing the sales contract and not at the time of conclusion. This limited condition may be expressly stipulated in the loan agreement or subject to the agreement of the lenders providing the incremental facility. . .