e Laboratories (CLB) - 2025 Q2 - Quarterly Results

NINTH AMENDED AND RESTATED CREDIT AGREEMENT Agreement Overview This agreement, dated July 22, 2025, amends and restates the prior credit agreement, outlining terms for a credit facility provided to Core Laboratories Inc. and Core Laboratories (U.S.) Interests Holdings, Inc. by a syndicate of lenders led by Bank of America, N.A - The agreement is entered into by CORE LABORATORIES INC. and CORE LABORATORIES (U.S.) INTERESTS HOLDINGS, INC. as Borrowers, with BANK OF AMERICA, N.A. as the Administrative Agent[1][19] - This agreement amends and restates the Eighth Amended and Restated Credit Agreement dated July 25, 2022, to restructure and refinance existing indebtedness and modify commitments[20] ARTICLE I. DEFINITIONS AND ACCOUNTING TERMS Defined Terms This section defines key terms, facility sizes, sublimits, pricing structure based on leverage, and the maturity date, including financial terms like EBITDA and Indebtedness | Facility/Sublimit | Amount | | :--- | :--- | | Aggregate Commitments | $150,000,000 | | Revolving Commitment | $100,000,000 | | Term Commitment | $50,000,000 | | Alternative Currency Sublimit | Lesser of Aggregate Commitments and $25,000,000 | | Letter of Credit Sublimit | Lesser of $50,000,000 and the Revolving Facility | | Swing Line Sublimit | Lesser of $25,000,000 and the Revolving Facility | | Pricing Level | Consolidated Net Indebtedness/Consolidated EBITDA | Commitment Fee / Ticking Fee | Term SOFR + Letters of Credit | Base Rate + | | :--- | :--- | :--- | :--- | :--- | | 1 | ≥ 2.50x | 50.0 bps | 300.0 bps | 200.0 bps | | 2 | < 2.50x but ≥ 2.00x | 50.0 bps | 275.0 bps | 175.0 bps | | 3 | < 2.00x but ≥ 1.50x | 37.5 bps | 250.0 bps | 150.0 bps | | 4 | < 1.50x but ≥ 1.00x | 37.5 bps | 225.0 bps | 125.0 bps | | 5 | < 1.00x | 35.0 bps | 200.0 bps | 100.0 bps | - The Maturity Date is July 22, 2029, with potential acceleration to October 14, 2027, or March 30, 2028, if certain notes are outstanding, unless specific liquidity conditions are met[158] - A "Change of Control" is triggered if any person or group acquires 30% or more of the Parent's voting equity, among other conditions[62] Other Interpretive Provisions This section outlines the rules for interpreting the agreement, including how terms are defined in singular and plural forms, the meaning of words like "include," and how references to other documents and laws are construed - Provides rules of construction for the agreement, stating that definitions apply to singular and plural forms, and references to agreements include amendments, also specifying that section headings are for convenience only[239][241] - Includes specific definitions for Dutch legal concepts such as "financial assistance," "security interest," and "winding-up" to align with Dutch Civil Code terminology[242][243] Accounting Terms This section specifies that all accounting terms and financial data must conform to "Agreement Accounting Principles" (US GAAP or IFRS), applied consistently with Audited Financial Statements, and disregards certain accounting standards for covenant calculations - All accounting terms and financial data are to be construed and prepared in conformity with Agreement Accounting Principles (US GAAP or IFRS), applied consistently[244] - If a change in accounting principles affects financial ratios, the parties will negotiate in good faith to amend the ratio to preserve its original intent, with calculations using prior principles until amended[245] - For covenant compliance purposes, the effects of lease accounting standard ASC 842 are to be disregarded, treating leases as they would have been under prior GAAP[245] Exchange Rates; Currency Equivalents This section details procedures for handling foreign currencies, including the L/C Issuer's responsibility for determining the Dollar Equivalent of Letters of Credit and converting amounts for transactions - The L/C Issuer determines the Dollar Equivalent for Letters of Credit denominated in Alternative Currencies on each Revaluation Date[247][248] - When an amount is expressed in Dollars but a Letter of Credit is in an Alternative Currency, the amount will be converted to the relevant Alternative Currency Equivalent as determined by the L/C Issuer[249] ARTICLE II. THE COMMITMENTS AND CREDIT EXTENSIONS Loans This section outlines the two primary loan facilities: a single, non-revolving Term Facility in Dollars and a Revolving Facility allowing Borrowers to borrow, prepay, and reborrow Revolving Loans up to their commitment amount - Each Term Lender agrees to make a single, non-revolving term loan to the Borrowers in Dollars during the Term Facility's availability period, with repaid or prepaid Term Loans unable to be reborrowed[261] - Each Revolving Lender agrees to make revolving loans in Dollars, which can be borrowed, prepaid, and reborrowed, provided the total outstanding revolving exposure does not exceed the Revolving Facility[262] Letters of Credit This section governs the issuance of Letters of Credit (L/Cs) in Dollars or Alternative Currencies, detailing procedures, limitations, participation obligations, reimbursement requirements, and fees - The Letter of Credit Sublimit is capped at the lesser of $50 million or the total Revolving Facility[148] - By issuing an L/C, the L/C Issuer grants each Revolving Lender a participation equal to its Applicable Percentage of the L/C amount, and each Revolving Lender agrees to fund its participation if a drawing is not reimbursed by the Borrower[280][281] - The Borrowers are obligated to pay a Letter of Credit Fee based on the Applicable Rate and a fronting fee to the L/C Issuer, along with other standard processing charges[294][295] - Upon an Event of Default, the Borrowers may be required to cash collateralize 103% of the total L/C Obligations[299] Swing Line Loans This section details the terms for Swing Line Loans, which are short-term loans in Dollars provided by the Swing Line Lender, outlining borrowing procedures and refinancing mechanisms - The Swing Line Sublimit is the lesser of $25 million or the Revolving Facility[216] - Swing Line Loans are made available by the Swing Line Lender (Bank of America) and are typically Base Rate Loans, with each Revolving Lender deemed to purchase a risk participation in each Swing Line Loan[303][304] - The Swing Line Lender can, at its discretion, demand that Revolving Lenders refinance outstanding Swing Line Loans by making Base Rate Loans[308] Prepayments This section covers both optional and mandatory prepayments of loans, specifying conditions and requirements for each type Optional Prepayments Borrowers are permitted to voluntarily prepay Term, Revolving, and Swing Line Loans in whole or in part at any time without penalty, subject to specified notice periods and minimum prepayment amounts - Borrowers may voluntarily prepay Term and Revolving Loans in whole or in part without premium or penalty, subject to notice requirements and minimum amounts[318] - Prepayments of Term SOFR Loans require two Business Days' notice, while Base Rate Loans require notice on the date of prepayment[318] Mandatory Prepayments This subsection mandates prepayments under specific circumstances, such as when total revolving outstandings or L/C Obligations in Alternative Currencies exceed 105% of their respective limits - If Total Revolving Outstandings exceed 105% of the Revolving Facility, Borrowers must prepay Revolving Loans and/or Cash Collateralize L/C Obligations to reduce the outstanding amount to no more than 100% of the facility[321] - If L/C Obligations in Alternative Currencies exceed 105% of the Alternative Currency Sublimit, Borrowers must Cash Collateralize the excess amount[322] Repayment of Loans This section specifies the repayment schedules for different loan types, including quarterly principal installments for Term Loans and full repayment at maturity for Revolving and Swing Line Loans | Loan Type | Repayment Schedule | | :--- | :--- | | Term Loans | Quarterly principal installments of 1.25% of the initial principal amount, with the final balance due on the Maturity Date | | Revolving Loans | The aggregate principal amount is due on the Maturity Date | | Swing Line Loans | Due on the earlier of 10 Business Days after a repayment demand or the Revolving Facility Maturity Date | Increase in Commitments This section allows the Parent to request an increase in the Revolving Facility or Term Facility, capped at $50 million, subject to conditions including no existing Default and delivery of updated corporate resolutions - The Parent may request an increase in the Revolving Facility and/or Term Facility in a cumulative amount not to exceed $50 million[359][366] - No Lender is obligated to commit to any portion of a facility increase, and the Parent may invite new Eligible Assignees to become Lenders to achieve the full requested amount[360][361] - Effectiveness of any increase is conditional upon no Default existing, delivery of corporate resolutions, and certification that representations and warranties are true and correct[364][370] Defaulting Lenders This section outlines the consequences for a Lender that fails to meet its funding obligations, including restricted voting rights, reallocation of payments, and limited entitlement to fees - A Defaulting Lender's right to approve amendments and waivers is restricted as defined in "Required Lenders" and Section 10.01[382] - Payments intended for a Defaulting Lender will be redirected to first pay amounts owed by that lender to the Administrative Agent, L/C Issuer, or Swing Line Lender[383] - A Defaulting Lender is not entitled to receive Commitment Fees and has limited rights to Letter of Credit Fees while in default status[385] - A Defaulting Lender's participation in L/C Obligations and Swing Line Loans is reallocated among non-Defaulting Lenders to the extent possible without exceeding their own commitments[386] ARTICLE III. TAXES, YIELD PROTECTION AND ILLEGALITY Taxes This section establishes that all payments by the Borrowers must be made free of any tax deductions or withholdings, requiring additional amounts ("gross-up") if Indemnified Taxes are withheld, and outlines Lender documentation requirements - All payments by Borrowers must be made free and clear of taxes; if withholding for Indemnified Taxes is required, the payable sum must be increased so the Recipient receives the full amount as if no withholding occurred[390] - Borrowers must indemnify each Recipient for the full amount of any Indemnified Taxes paid or required to be withheld[392] - Lenders must provide appropriate tax forms (e.g., W-9, W-8BEN, W-8ECI) to the Borrowers and Administrative Agent to certify their exemption from or reduction of U.S. federal withholding tax[396][397][398] Inability to Determine Rates This section provides a framework for addressing situations where the Term SOFR reference rate cannot be determined or no longer adequately reflects funding costs, allowing for suspension of Term SOFR loans and conversion to Base Rate loans - If Term SOFR cannot be determined or does not fairly reflect funding costs, the obligation to make or maintain Term SOFR Loans will be suspended, and such loans will be converted to Base Rate Loans[409][410][411] - The agreement establishes a process to replace Term SOFR with a "Successor Rate" if Term SOFR is no longer available or published, with the primary replacement being Daily Simple SOFR[412][413] - The Administrative Agent has the right to make Conforming Changes to implement a Successor Rate without requiring further consent from other parties[418] Increased Costs This section protects Lenders from increased costs resulting from a "Change in Law," requiring Borrowers to pay additional amounts to compensate Lenders for new reserve requirements, taxes, or capital/liquidity requirements - If a Change in Law increases the cost to a Lender of making or maintaining a Loan or Letter of Credit, or reduces the amount received, the Borrowers must pay additional amounts to compensate the Lender[419] - If a Change in Law regarding capital or liquidity requirements reduces a Lender's rate of return, the Borrowers must pay additional amounts to compensate for the reduction[420] - A Lender must demand compensation within six months of the Change in Law giving rise to the increased costs, unless the change is retroactive[424] ARTICLE IV. CONDITIONS PRECEDENT TO CREDIT EXTENSIONS Conditions of Initial Credit Extension This section lists the conditions that must be satisfied before the Lenders and L/C Issuer are obligated to make their first credit extension, including delivery of executed documents, legal opinions, and payment of fees - Requires delivery of executed counterparts of the Agreement, Guaranties, Security Agreement, and other Collateral Documents[431] - Favorable legal opinions from counsel in the U.S., Netherlands, Canada, and the UK are required[431] - Requires delivery of a certificate from the Parent certifying that no Material Adverse Effect has occurred since the last Audited Financial Statements and that other conditions are met[432] - All fees due on or before the Closing Date must be paid, and all loans and fees under the prior Eighth Amended and Restated Credit Agreement must be paid in full[436][438] Conditions to all Credit Extensions This section outlines the ongoing conditions required for any new credit extension, excluding simple conversions or continuations, mandating that Borrowers' representations and warranties remain true and no Default exists - The representations and warranties of the Borrowers and Loan Parties must be true and correct at the time of each Credit Extension[443] - No Default or Event of Default shall exist or would result from the proposed Credit Extension[444] - Each request for a credit extension is deemed a representation by the Borrowers that these conditions have been satisfied[446] ARTICLE V. REPRESENTATIONS AND WARRANTIES General Representations and Warranties This article contains a comprehensive set of representations and warranties made by the Borrowers to the Lenders, covering corporate existence, validity of loan documents, financial accuracy, compliance with laws, and collateral liens - Borrowers represent that their financial statements are prepared in accordance with Agreement Accounting Principles and fairly present their financial condition, and that no Material Adverse Effect has occurred since the last audited statements[454][455][456] - The Collateral Documents are represented to be effective in creating a valid and enforceable first-priority Lien on the Collateral, subject to Permitted Liens[458] - As of the Closing Date, the Loan Parties must represent that their aggregate total assets and revenues constitute at least 60% of the consolidated total assets and revenues of the Parent and its Subsidiaries[479] - Borrowers represent compliance with Sanctions, the Foreign Corrupt Practices Act, and other anti-corruption laws, and confirm they are not located in or owned by entities in a Designated Jurisdiction[485][486] ARTICLE VI. AFFIRMATIVE COVENANTS Financial Reporting This covenant requires the Parent to provide regular financial information to the Administrative Agent, including annual audited and quarterly unaudited consolidated financial statements, each accompanied by a compliance certificate - The Parent must furnish audited annual consolidated financial statements within 90 days after each fiscal year-end[491] - The Parent must furnish unaudited quarterly consolidated financial statements within 45 days after the end of each of the first three fiscal quarters[493] - A compliance certificate, demonstrating calculation of financial covenants and certifying no Default exists, must accompany all annual and quarterly financial statements[494] Notices; Other Information This section obligates the Borrowers to provide prompt notice to the Administrative Agent of significant events, including Defaults, Material Adverse Effects, ERISA Events, and major litigation, and establishes electronic document distribution - Borrowers must promptly provide written notice of any Default, Event of Default, or any other development that could reasonably be expected to have a Material Adverse Effect[497] - Notice is required for any material ERISA Events, significant environmental issues, and major litigation or governmental proceedings[498][499][501] - The agreement allows for electronic delivery of documents via a platform and requires Borrowers to mark information as "PUBLIC" if it does not contain material non-public information[505][506] General Affirmative Covenants This group of covenants requires the Borrowers and their subsidiaries to perform various actions to maintain their business and financial health, including timely payment of obligations, corporate preservation, property maintenance, and legal compliance - Must pay all obligations, including taxes and indebtedness, as they become due[506][507] - Must preserve corporate existence, maintain properties in good repair, and maintain adequate insurance with the Collateral Agent named as loss payee/additional insured[508][510][511] - Must comply with all applicable laws, including Environmental Laws, and allow the Administrative Agent and Lenders inspection rights to properties and books[513][515] - If at any quarter-end the Guarantors represent less than 60% of consolidated total revenues and assets, the Borrowers must cause additional subsidiaries to become Guarantors to meet the 60% threshold[518] Collateral Requirements This section details the ongoing requirement to maintain collateral, specifying that new Domestic, Canadian, or Dutch Subsidiary Guarantors must grant perfected first-priority security interests and pledge equity interests to continuously secure the Obligations - Loan Parties are required to secure the Obligations with first-priority Liens on substantially all tangible and intangible personal property, specified Equity Interests, and intercompany debt[524] - When a new Domestic or Canadian Subsidiary becomes a Guarantor, it must concurrently become a party to the Collateral Documents and take all actions to perfect the security interest in its assets[525] - When a new Dutch Subsidiary becomes a Guarantor, it must provide a pledge of its Equity Interests within 30 days, subject to the Dutch Law Security Principles[526] ARTICLE VII. NEGATIVE COVENANTS Liens This covenant prohibits the Borrowers and their subsidiaries from creating or permitting any Liens on their property, assets, or revenues, except for a specific list of "Permitted Liens" - Prohibits the creation of any Liens on property or assets, other than a defined list of "Permitted Liens"[530] - Permitted Liens include those securing the Obligations under this agreement, Liens securing Pari Passu Secured Indebtedness (like the Private Placement Notes) subject to an Intercreditor Agreement, and various statutory and ordinary course of business liens[530][531] Indebtedness This section restricts the Borrowers and their subsidiaries from creating, incurring, or assuming any Indebtedness, with specific exceptions for permitted debt, including a significant allowance for Private Placement Notes - Prohibits incurring any Indebtedness except as specifically permitted[532] - Permitted Indebtedness includes debt under the Loan Documents, existing debt scheduled at closing, and various baskets for unsecured debt, letters of credit, and subordinated debt[532][533][535] - Allows for up to $250 million in Indebtedness consisting of the Private Placement Notes and other similar debt, provided any new or refinanced debt meets certain maturity and covenant restrictions and is subject to the Intercreditor Agreement if secured[536] Fundamental Changes; Dispositions This covenant restricts major corporate changes and asset sales, generally prohibiting mergers and consolidations except for subsidiary mergers into the Parent, and capping other asset sales at 7.5% of Consolidated Total Assets - Mergers and consolidations are restricted, but a Subsidiary may merge with another Subsidiary or into the Parent, provided the Parent or a Borrower is the surviving entity and no Default exists[537] - The sale, transfer, or disposition of the capital stock of any Loan Party is prohibited[538] - Aggregate asset sales (other than inventory in the ordinary course) are limited to 7.5% of Consolidated Total Assets[538] Restricted Disbursements and Acquisitions This section limits the ability of the Borrowers and their subsidiaries to make "Restricted Disbursements," including dividends, stock repurchases, investments, and acquisitions, generally permitting them only if specific financial tests are met - Cash dividends are limited to $8 million per fiscal year, unless the pro forma Leverage Ratio is less than 1.50 to 1.00 and Consolidated Liquidity exceeds $40 million[539] - Stock repurchases are limited to $8 million per fiscal year, unless the pro forma Leverage Ratio is less than 1.50 to 1.00 and specific liquidity conditions are met[540] - Acquisitions are permitted up to certain thresholds based on the Leverage Ratio (e.g., up to Consolidated EBITDA if Leverage Ratio is <= 2.00x), provided Consolidated Liquidity exceeds $40 million and no Event of Default exists[541][542] Financial Covenants This section establishes the key financial covenants that the Parent must maintain, tested at the end of each fiscal quarter, including a minimum Coverage Ratio and a maximum Leverage Ratio | Covenant | Requirement | Frequency | | :--- | :--- | :--- | | Coverage Ratio | (Consolidated EBITDA / Consolidated Interest Expense) must be ≥ 3.00 to 1.00 | Quarterly | | Leverage Ratio | (Consolidated Net Indebtedness / Consolidated EBITDA) must be ≤ 2.50 to 1.00 | Quarterly | ARTICLE VIII. EVENTS OF DEFAULT AND REMEDIES Events of Default This section defines the events that constitute an "Event of Default," including failure to make payments, covenant violations, incorrect representations, cross-defaults on other material indebtedness, insolvency, and a Change of Control - Events of Default include non-payment of principal, interest, or fees; breach of covenants (particularly those in Article VII); and materially incorrect representations or warranties[556] - A cross-default is triggered by a failure to pay or a default on other Material Indebtedness (over $5 million) that permits acceleration of that debt[556][155] - Insolvency proceedings, the entry of a final judgment exceeding $10 million (if not covered by insurance), or a Change of Control also constitute Events of Default[556][557] Remedies Upon Event of Default This section outlines the actions the Administrative Agent and Lenders can take if an Event of Default occurs, including terminating commitments, accelerating outstanding obligations, and requiring cash collateralization of L/C Obligations - Upon an Event of Default, the Administrative Agent, at the request of the Required Lenders, may terminate commitments and declare all outstanding Obligations immediately due and payable[559] - The Agent can also require the Parent to Cash Collateralize the L/C Obligations in an amount equal to the outstanding amount[559] - In the event of bankruptcy, the termination of commitments and acceleration of debt are automatic, without any further action required[559] Application of Funds This section specifies the order of priority for applying any funds received after remedies have been exercised following an Event of Default, detailing the "waterfall" for payments - Establishes a payment waterfall for funds received after an Event of Default and acceleration[560] - The order of application is: 1) Agent fees/expenses, 2) Lender fees/expenses, 3) Accrued interest and fees, 4) Principal of Loans and other Secured Obligations, 5) L/C Cash Collateral, and 6) Balance to the Parent[561] ARTICLE IX. ADMINISTRATIVE AGENT AND COLLATERAL AGENT Agent Roles, Rights, and Protections This series of sections defines the role, authority, and protections for the Administrative Agent and Collateral Agent, outlining their administrative duties, exculpatory provisions, and the process for resignation and successor appointment - Lenders irrevocably appoint Bank of America as Administrative Agent and Collateral Agent to act on their behalf[565][566] - The Agent's duties are expressly administrative and not fiduciary, and the Agent is protected from liability except for its own gross negligence or willful misconduct[567][570][571] - The Agent may resign by giving notice, and the Required Lenders have the right to appoint a successor; if they fail to do so within 30 days, the retiring Agent may appoint one[577] - Each Lender acknowledges it has made its own credit decision independently and without reliance on the Agent[581] Collateral and Guaranty Matters This section grants the Administrative and Collateral Agents the authority to release liens on collateral or release a Subsidiary Guarantor under specific, permitted circumstances, requiring each Lender's consent for substantial releases - The Agent is authorized to release a Subsidiary Guarantor if it ceases to be a Subsidiary through a permitted transaction[588] - The Agent is authorized to release any Lien on property that is sold or disposed of in a transaction permitted under the Loan Documents[589] - Any release of collateral or a guaranty is conditioned on a substantially simultaneous release of the same for the Private Placement Notes and other specified indebtedness[588][589] ARTICLE X. MISCELLANEOUS Amendments, Waivers, and Consents This section specifies the requirements for amending or waiving provisions of the loan documents, generally requiring the consent of the Required Lenders, but mandating unanimous consent for fundamental changes - Amendments and waivers generally require the written consent of the Required Lenders and the Borrowers[599] - Unanimous consent of each affected Lender is required to extend payment dates, reduce principal or interest rates, or increase a Lender's commitment[599] - Consent of each Lender is required to release all or substantially all of the collateral or guaranties[600] Successors and Assigns This section governs the transfer of rights and obligations by Lenders, allowing assignments to eligible entities subject to conditions, minimum amounts, and required consents, with the Administrative Agent maintaining a Register of all Lenders - A Lender may assign its rights and obligations to an eligible assignee, typically requiring a minimum assignment of $5 million[623] - Consent from the Borrowers and the Administrative Agent is generally required for an assignment, unless the assignment is to another Lender or an affiliate, or if an Event of Default is ongoing[624][625] - The Administrative Agent maintains a Register of all Lenders, and any assignment is effective upon its recordation in the Register[631] Confidentiality This section obligates the Administrative Agent, Lenders, and L/C Issuer to maintain the confidentiality of all non-public information received from the Borrowers, with specific exceptions for permitted disclosures - The Agents and Lenders agree to keep all non-public information received from the Borrowers confidential[638] - Disclosure is permitted to affiliates, auditors, regulators, in legal proceedings, and to potential assignees or participants under a confidentiality agreement[638][639] Governing Law and Jurisdiction This section establishes the legal framework for the agreement, specifying that it is governed by the laws of the State of Texas and that all parties submit to the nonexclusive jurisdiction of courts in Harris County, Texas - This Agreement is governed by the law of the State of Texas[651] - Parties submit to the nonexclusive jurisdiction of state courts in Harris County, Texas, and the U.S. District Court for the Southern District of Texas[652] Waiver of Jury Trial In this section, all parties to the agreement irrevocably waive their right to a trial by jury in any legal proceeding that arises directly or indirectly from the agreement or any other loan document - Each party to the agreement irrevocably waives any right to a trial by jury in any legal proceeding related to the Loan Documents[655][656] Schedules and Exhibits List of Schedules and Exhibits This section lists the various schedules and exhibits that are part of the credit agreement, providing specific details on existing conditions and forms for key operational and legal documents - The agreement includes numerous schedules detailing existing conditions as of the closing date, such as Existing Letters of Credit (1.01), Commitments (2.01), Existing Liens (7.01), and Existing Indebtedness (7.02)[17] - The agreement includes form exhibits for critical operational and legal documents, including the Loan Notice (A), Compliance Certificate (D), Assignment and Assumption (E), various Guaranties (F, G), and legal opinions (H-1 to H-4)[17]