FIRST AMENDMENT TO CREDIT AGREEMENT

 

This FIRST AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) is entered into as
of April 20, 2012 (the “First Amendment Effective Date”) among INNERWORKINGS,
INC., a Delaware corporation (the “Borrower”), the Lenders party hereto and BANK
OF AMERICA, N.A., as Administrative Agent for the Lenders (the “Administrative
Agent”), Swing Line Lender and L/C Issuer. Capitalized terms used herein and not
otherwise defined shall have the meanings set forth in the Credit Agreement (as
defined below).

 

RECITALS

 

WHEREAS, the Borrower, the Lenders and the Administrative Agent are parties to
that certain Credit Agreement dated as of August 2, 2010 (as previously amended
and modified from time to time, the “Credit Agreement”);

 

WHEREAS, the Borrower is requesting that the Lenders modify certain provisions
of the Credit Agreement; and

 

WHEREAS, the Administrative Agent, Swing Line Lender, L/C Issuer and the Lenders
have agreed to amend certain terms of the Credit Agreement on the terms, and
subject to the conditions, set forth below.

 

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:

 

AGREEMENT

 

1.                  Amendments to Credit Agreement.

 

(a)                Recitals. The second sentence of the introductory recitals to
the Credit Agreement is hereby amended to read as follows:

 

The Borrower has requested that the Lenders provide $150,000,000 in credit
facilities for the purposes set forth herein, and the Lenders are willing to do
so on the terms and conditions set forth herein.

(b)               Section 1.01.

 

                       (1)            The following definitions in Section 1.01
of the Credit Agreement are hereby amended to read as follows:

 

“Aggregate Revolving Commitments” means the Revolving Commitments of all the
Lenders. The initial amount of the Aggregate Revolving Commitments in effect on
the First Amendment Effective Date is $150,000,000.

 

“Attributable Debt” of any Person means (i) as of the date of determination
thereof, with respect to any synthetic lease, tax retention operating lease,
off-balance sheet loan or similar off-balance sheet financing product to which
such Person is a party (including, without limitation, all Off-Balance Sheet
Liabilities), the net present value (discounted according to GAAP at the cost of
debt implied in such financing product) of the obligations of such Person for
rental payments, interest and principal payments, or other similar periodic
payments during the then remaining term of such synthetic lease, tax retention
operating lease, off-balance sheet loan or similar off-balance sheet financing
product (including, without limitation, all Off-Balance Sheet Liabilities) and
(ii) in respect of any Permitted Securitization Transaction of such Person, the
outstanding principal amount of such financing, after taking into account
reserve accounts and making appropriate adjustments, determined by the
Administrative Agent in its reasonable judgment.

 

 

 

“Change in Law” means the occurrence, after the date of this Agreement, of any
of the following: (a) the adoption or taking effect of any law, rule, regulation
or treaty, (b) any change in any law, rule, regulation or treaty or in the
administration, interpretation or application thereof by any Governmental
Authority or (c) the making or issuance of any request, guideline or directive
(whether or not having the force of law) by any Governmental Authority; provided
that notwithstanding anything herein to the contrary, (i) the Dodd-Frank Wall
Street Reform and Consumer Protection Act and all requests, rules, guidelines or
directives thereunder or issued in connection therewith and (ii) all requests,
rules, guidelines or directives promulgated by the Bank for International
Settlements, the Basel Committee on Banking Supervision (or any successor or
similar authority) or the United States or foreign regulatory authorities, in
each case pursuant to Basel III, shall in each case be deemed to be a “Change in
Law”, regardless of the date enacted, adopted or issued.

 

“Guarantors” means each Material Domestic Subsidiary of the Borrower identified
as a “Guarantor” on the signature pages hereto and each other Material Domestic
Subsidiary that joins as a Guarantor pursuant to Section 7.09 or otherwise,
together with their successors and permitted assigns. Notwithstanding anything
to the contrary in this Agreement, an SPV for a Permitted Securitization
Transaction shall not be required to become a Guarantor.

 

“Indebtedness” of any Person means, without duplication, (a) all obligations of
such Person for borrowed money or with respect to deposits or advances of any
kind, (b) all obligations of such Person evidenced by bonds, debentures, notes
or similar instruments, (c) all obligations of such Person upon which interest
charges are customarily paid, (d) all obligations of such Person under
conditional sale or other title retention agreements relating to property
acquired by such Person, (e) all obligations of such Person in respect of the
deferred purchase price of property or services (excluding current accounts
payable incurred in the ordinary course of business), (f) all Indebtedness of
others secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien on property owned or
acquired by such Person, whether or not the Indebtedness secured thereby has
been assumed; provided that if such Person has not assumed or otherwise become
liable for such Indebtedness, such Indebtedness shall be measured at the lower
of the outstanding amount of such Indebtedness and the fair market value of such
property securing such Indebtedness, in each case, at the time of determination,
(g) all Guarantees by such Person of Indebtedness of others, (h) all
Attributable Debt in respect of Off-Balance Sheet Liabilities of such Person,
(i) all Capital Lease Obligations of such Person, (j) all obligations,
contingent or otherwise, of such Person as an account party in respect of
letters of credit and letters of guaranty, (k) all obligations, contingent or
otherwise, of such Person in respect of bankers’ acceptances, (l) net
obligations of such Person under Swap Contracts, (m) all earn-out obligations of
such Person to the extent treated as Indebtedness under GAAP, (n) all
Attributable Debt of such Person under Sale and Leaseback Transactions and (o)
all Attributable Debt of such Person under Securitization Transactions. The
Indebtedness of any Person shall include the Indebtedness of any other entity
(including any partnership in which such Person is a general partner) to the
extent such Person is liable therefor as a result of such Person’s ownership
interest in or other relationship with such entity, except to the extent the
terms of such Indebtedness provide that such Person is not liable therefor. The
amount of any net obligation under any Swap Contract on any date shall be deemed
to be the Swap Termination Value thereof as of such date.

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“Maturity Date” means August 2, 2015; provided, however, that if such date is
not a Business Day, the Maturity Date shall be the next preceding Business Day.

 

                   (ii)          The following definitions are added in
appropriate alphabetical order to Section 1.01 of the Credit Agreement:

 

“Eligible Receivables” means, as of any date of determination and without
duplication, the aggregate book value of all accounts receivable, receivables,
and obligations for payment created or arising from the sale of inventory or the
rendering of services in the ordinary course of business (collectively, the
“Receivables”), owned by or owing to an Loan Party (or that have been sold by a
Loan Party to an SPV under a Permitted Securitization Transaction and are owned
by or owing to such SPV; provided that the Administrative Agent for the benefit
of the holders of the Obligations has a first-priority perfected security
interest in all Equity Interests of such SPV), net of allowances and reserves
for doubtful or uncollectible accounts and sales adjustments consistent with
such Person’s internal policies and in any event in accordance with GAAP, but
excluding in any event (i) any Receivable (other than, in the case of the
following subclause (a), any such Receivable that has been sold by a Loan Party
to an SPV under a Permitted Securitization Transaction and is owned by or owing
to such SPV; provided that the Administrative Agent for the benefit of the
holders of the Obligations has a first-priority perfected security interest in
all Equity Interests of such SPV) which is (a) not subject to a perfected, first
priority Lien in favor for the Administrative Agent to secure the Obligations or
(b) subject to any other Lien that is not a Permitted Lien, (ii) Receivables
which are more than 60 days past due (net of reserves for bad debts in
connection with any such Receivables), (iii) 50% of the book value of any
Receivable not otherwise excluded by clause (ii) above but owing from an account
debtor which is the account debtor on any existing Receivable then excluded by
such clause (ii), unless the exclusion by such clause (ii) is a result of a
legitimate dispute by the account debtor and the applicable Receivable is no
more than 90 days past due, (iv) Receivables owing by an account debtor which is
not solvent or is subject to any bankruptcy or insolvency proceeding of any
kind, (v) Receivables which are contingent or subject to offset, deduction,
counterclaim, dispute or other defense to payment, in each case to the extent of
such offset, deduction, counterclaim, dispute or other defense, (vi) Receivables
for which any direct or indirect Subsidiary or any Affiliate is the account
debtor, (vii) Receivables representing a sale to the government of the United
States or any subdivision thereof unless the Federal Assignment of Claims Act
has been complied with to the satisfaction of the Administrative Agent with
respect to the granting of a security interest in such Receivable, with or other
similar applicable Law, and (viii) Receivables which fail to meet such other
specifications and requirements as may from time to time be established by the
Agent in its reasonable discretion. Notwithstanding the forgoing, for purposes
of this Agreement, Receivables owing from account debtors located outside of the
United States shall not constitute more than 20% of Eligible Receivables.

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“Eligible Receivables Report” means a report substantially in the form of
Exhibit 1.01.

 

“First Amendment Effective Date” means April 20, 2012.

 

“Permitted Securitization Transaction” means a Securitization Transaction
pursuant to terms and documentation satisfactory to the Required Lenders that is
entered into at a time where (i) the Consolidated Leverage Ratio, as of the last
day of each of the two most recently ended four fiscal quarter periods for which
financial information has been delivered pursuant to Section 7.01 did not exceed
2.0 to 1.0, and (ii) Consolidated EBITDA for each of the two most recently ended
four fiscal quarter periods for which financial information has been delivered
pursuant to Section 7.01 is at least $60,000,000.

 

“Securitization Transaction” means any financing transaction or series of
financing transactions (including factoring arrangements) pursuant to which the
Borrower or any Subsidiary may sell, convey or otherwise transfer, or grant a
security interest in, accounts receivables or similar rights to payment to a
special purpose Subsidiary or Affiliate of the Borrower (each, an “SPV”).

 

“SPV” has the meaning specified in the definition of “Securitization
Transaction” set forth in Section 1.01.

 

 (iii)            The pricing grid in the definition of “Applicable Rate” in
Section 1.01 of the Credit Agreement is hereby amended to read as follows:

 

Pricing Tier

Consolidated

Leverage Ratio

Commitment Fee Eurodollar Rate Loans and Letter of Credit Fees Base Rate Loans 1
> 2.25 to 1.0 0.400% 2.15% 1.15% 2 > 2.00 to 1.0 but < 2.25 to 1.0 0.375% 1.90%
0.90% 3 > 1.75 to 1.0 but < 2.00 to 1.0 0.350% 1.65% 0.65% 4 > 1.50 to 1.0 but <
1.75 to 1.0 0.350% 1.40% 0.40% 5 < 1.50 to 1.0 0.350% 1.15% 0.15%

 

 (iv)            The last sentence in the definition of “Applicable Rate” in
Section 1.01 of the Credit Agreement is hereby amended to read as follows:

 

The Applicable Rate in effect from the First Amendment Effective Date through
the first Business Day immediately following the date a Compliance Certificate
is required to be delivered pursuant to Section 7.01(c) for the fiscal quarter
ending March 31, 2012 shall be determined based upon Pricing Tier 4.

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(c)                Section 2.01. Clause (i) of Section 2.01(b) of the Credit
Agreement is hereby amended to read as follows:

 

(i) the Aggregate Revolving Commitments shall not exceed $175,000,000 without
the consent of the Required Lenders;

 

(d)               Section 2.05. Section 2.05(b) of the Credit Agreement is
hereby amended to read as follows:

 

(b) Mandatory Prepayments. If for any reason either (i) the Total Revolving
Outstandings at any time exceed the Aggregate Revolving Commitments then in
effect or (ii) if any Permitted Securitization Transaction exists, the sum of
(A) the Total Revolving Outstandings plus (B) the outstanding obligations under
such Permitted Securitization Transaction at any time exceeds an amount equal to
1.5 times Eligible Receivables (as determined by reference to the most-recent
Eligible Receivables Report), then, in each case, the Borrower shall immediately
prepay Revolving Loans and/or Swing Line Loans and/or Cash Collateralize the L/C
Obligations in an aggregate amount equal to such excess; provided, however, that
the Borrower shall not be required to Cash Collateralize the L/C Obligations
pursuant to this Section 2.05(b) unless after the prepayment in full of the
Revolving Loans and Swing Line Loans the Total Revolving Outstandings exceed the
Aggregate Revolving Commitments then in effect. All amounts required to be paid
pursuant to this Section 2.05(b) shall be applied as follows: first, ratably to
the L/C Borrowings and the Swing Line Loans, second, to the outstanding
Revolving Loans, and, third, to Cash Collateralize the remaining L/C
Obligations. Within the parameters of the applications set forth above,
prepayments shall be applied first to Base Rate Loans and then to Eurodollar
Rate Loans in direct order of Interest Period maturities. All prepayments under
this Section 2.05(b) shall be subject to Section 3.05, but otherwise without
premium or penalty, and shall be accompanied by interest on the principal amount
prepaid through the date of prepayment.

 

(e)                Section 6.18. All references to “Closing Date” appearing in
Section 6.18 of the Credit Agreement are deleted and replaced with references to
“First Amendment Effective Date.”

 

(f)                Section 7.01. Section 7.01 of the Credit Agreement is amended
by deleting the “and” at the end of clause (e), renumbering clause (f) to be
clause (g), and adding a new clause (f) as follows:

 

(f) during such times as any Permitted Securitization Transaction exists, as
soon as available, but in any event not later than fifteen days after the end of
each month, an Eligible Receivables Report as of the last day of the most
recently ended month;

 

(g)                Section 8.01. Section 8.01 of the Credit Agreement is amended
by deleting the “and” at the end of clause (l), replacing the period at the end
of clause (m) with “; and” and adding a new clause (n) to read as follows:

 

(n) non-recourse Indebtedness arising under Permitted Securitization
Transactions in an aggregate amount not to exceed $50,000,000 at any one time
outstanding;

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(h)               Section 8.02. Section 8.02 of the Credit Agreement is amended
by deleting the “and” at the end of clause (g), renumbering clause (h) to be
clause (i), and adding a new clause (h) as follows:

 

(h) Liens created or deemed to exist in connection with any Permitted
Securitization Transaction permitted under Section 8.01(n), but only to the
extent that any such Lien encumbers the applicable assets actually sold,
contributed or otherwise conveyed pursuant to such Permitted Securitization
Transaction;

 

(i)                 Section 8.03. Section 8.03(a) of the Credit Agreement is
amended by deleting the “and” at the end of clause (iv), renumbering clause (v)
as clause (vi), and adding a new clause (v) to read as follows:

 

(v) the sale of accounts receivable and related assets under any Permitted
Securitization Transaction in an aggregate amount not exceed $50,000,000 during
the term of this Agreement;

 

(j)                 Section 8.11(b). Section 8.11(b) of the Credit Agreement is
hereby amended to read as follows:

 

(b) Consolidated Leverage Ratio. Permit the Consolidated Leverage Ratio as of
the end of any fiscal quarter of the Borrower to be greater than 3.00 to 1.0
(or, if a Permitted Securitization exists at such time, 2.75 to 1.0).

 

  (k) Schedule 2.01. Schedule 2.01 to the Credit Agreement is hereby deleted and
replaced with Schedule 2.01 attached hereto.         (l) Schedule 6.01. Schedule
6.01 to the Credit Agreement is hereby deleted and replaced with Schedule 6.01
attached hereto.         (m) Schedule 6.18(a). Schedule 6.18(a) to the Credit
Agreement is hereby deleted and replaced with Schedule 6.18(a) attached hereto.
        (n) Schedule 6.18(b). Schedule 6.18(b) to the Credit Agreement is hereby
deleted and replaced with Schedule 6.18(b) attached hereto.         (o) Schedule
6.18(c). Schedule 6.18(c) to the Credit Agreement is hereby deleted and replaced
with Schedule 6.18(c) attached hereto.         (p) Schedule 6.18(d). Schedule
6.18(d) to the Credit Agreement is hereby deleted and replaced with Schedule
6.18(d) attached hereto.         (q) Schedule 6.18(e). Schedule 6.18(e) to the
Credit Agreement is hereby deleted and replaced with Schedule 6.18(e) attached
hereto.         (r) Exhibit 1.01. A new Exhibit 1.01 to the Credit Agreement in
the form of Exhibit 1.01 attached hereto is hereby added to the Credit
Agreement.         (s) JPMorgan Chase Bank, N.A. and PNC Bank, National
Association shall each have the title of “Co-Syndication Agent.”

 

6

 

 

2.                  Effectiveness; Conditions Precedent. This Amendment shall
become effective upon satisfaction of the following conditions precedent:

 

(a)                Execution of Counterparts of Amendment. The Administrative
Agent shall have received counterparts of this Amendment, which collectively
shall have been duly executed on behalf of each of the Loan Parties, the
Administrative Agent, the L/C Issuer and the Lenders.

 

(b)               Opinions of Counsel. The Administrative Agent shall have
received favorable opinions of legal counsel to the Loan Parties, addressed to
the Administrative Agent and each Lender, dated as of the date hereof, and in
form and substance reasonably satisfactory to the Administrative Agent.

 

(c)                No Material Adverse Effect. There shall not have occurred,
since March 31, 2011, any event or condition that could reasonably be expected
to have Material Adverse Effect.

 

(d)               Organization Documents, Resolutions, Etc. Receipt by the
Administrative Agent of the following, in form and substance reasonably
satisfactory to the Administrative Agent:

 

 (i)            copies of the Organization Documents of each Loan Party
certified to be true and complete as of a recent date by the appropriate
Governmental Authority of the state or other jurisdiction of its incorporation
or organization, where applicable, and certified by a secretary or assistant
secretary of such Loan Party to be true and correct as of the Closing Date;

 

 (ii)            such certificates of resolutions or other action, incumbency
certificates and/or other certificates of Responsible Officers of each Loan
Party as the Administrative Agent may require evidencing the identity, authority
and capacity of each Responsible Officer thereof authorized to act as a
Responsible Officer in connection with this Agreement and the other Loan
Documents to which such Loan Party is a party; and

 

 (iii)            such documents and certifications as the Administrative Agent
may reasonably require to evidence that each Loan Party is duly organized or
formed, and is validly existing, in good standing and qualified to engage in
business in its state of organization or formation.

 

(e)                Security. The Administrative Agent shall have received the
following:

 

 (i)            UCC financing statements for each appropriate jurisdiction as is
necessary, in the Administrative Agent’s sole discretion, to perfect the
Administrative Agent’s security interest in the Collateral;

 

 (ii)            duly executed notices of grant of security interest in the form
required by the Security Agreement as are necessary, in the Administrative
Agent’s sole discretion, to perfect the Administrative Agent’s security interest
in the United States registered intellectual property of the Loan Parties; and

 

 (iii)            all certificates evidencing any certificated Equity Interests
pledged to the Administrative Agent pursuant to the Security Agreement, together
with duly executed in blank, undated stock powers attached thereto (unless, with
respect to the pledged Equity Interests of any Foreign Subsidiary, such stock
powers are deemed unnecessary by the Administrative Agent in its reasonable
discretion under the law of the jurisdiction of organization of such Person)
unless the Subsidiary whose Equity Interests are pledged has been dissolved.

 

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(f)                Lender/Administrative Agent Fees. The Borrower shall have
paid (i) to the Administrative Agent, for the account of each Lender, all agreed
upfront fees due and payable to such Persons on the date hereof and (ii) to the
Administrative Agent, all fees due and payable to the Administrative Agent on
the date hereof.

 

(g)                Attorney Costs. The Borrower shall have paid all fees,
charges and disbursements of counsel to the Administrative Agent (“Attorney
Costs”) to the extent invoiced prior to or on the First Amendment Effective
Date, plus such additional amounts of Attorney Costs as shall constitute its
reasonable estimate of Attorney Costs incurred or to be incurred by it through
the closing proceedings (provided that such estimate shall not thereafter
preclude a final settling of accounts between the Borrower and the
Administrative Agent).

 

(h)               Other. The Administrative Agent and the Lenders shall have
received such other documents, instruments, agreements and information as
reasonably requested by the Administrative Agent or any Lender.

 

Without limiting the generality of the provisions of Section 10.03 of the Credit
Agreement, for purposes of determining compliance with the conditions specified
in this Section 2, each Lender that has signed this Amendment shall be deemed to
have consented to, approved or accepted or to be satisfied with, each document
or other matter required thereunder to be consented to or approved by or
acceptable or satisfactory to a Lender unless the Administrative Agent shall
have received notice from such Lender prior to the date hereof specifying its
objection thereto.

 

3.                  Ratification of Credit Agreement. The term “Credit
Agreement” as used in each of the Loan Documents shall hereafter mean the Credit
Agreement as amended and modified by this Amendment. Except as herein
specifically agreed, the Credit Agreement, as amended by this Amendment, is
hereby ratified and confirmed and shall remain in full force and effect
according to its terms. The Loan Parties acknowledge and consent to the
modifications set forth herein and agree that this Amendment does not impair,
reduce or limit any of their obligations under the Loan Documents (including,
without limitation, the indemnity obligations set forth therein) and that, after
the date hereof, this Amendment shall constitute a Loan Document.
Notwithstanding anything herein to the contrary and without limiting the
foregoing, each of the Guarantors reaffirm their guaranty obligations set forth
in the Loan Agreement.

 

4.                  Authority/Enforceability. Each of the Loan Parties
represents and warrants as follows:

 

(a)                It has taken all necessary action to authorize the execution,
delivery and performance of this Amendment.

 

(b)               This Amendment has been duly executed and delivered by such
Person and constitutes such Person’s legal, valid and binding obligation,
enforceable in accordance with its terms, except as such enforceability may be
subject to (i) Debtor Relief Laws and (ii) general principles of equity
(regardless of whether such enforceability is considered in a proceeding at law
or in equity).

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(c)                No consent, approval, authorization or order of, or filing,
registration or qualification with, any court or Governmental Authority or third
party is required in connection with the execution, delivery or performance by
such Person of this Amendment.

 

(d)               The execution and delivery of this Amendment does not (i)
violate, contravene or conflict with any provision of its Organization Documents
or (ii) materially violate, contravene or conflict with any Laws applicable to
it.

 

5.                  Representations. The Loan Parties represent and warrant to
the Lenders that the representations and warranties of the Loan Parties set
forth in Article VI of the Credit Agreement are true and correct in all material
respects on and as of the date of such Credit Extension, except to the extent
that such representations and warranties specifically refer to an earlier date,
in which case they are true and correct in all material respects as of such
earlier date.

 

6.                  Counterparts/Telecopy. This Amendment may be executed in any
number of counterparts, each of which when so executed and delivered shall be an
original, but all of which shall constitute one and the same instrument.
Delivery of executed counterparts of this Amendment by telecopy or other
electronic imaging means (i.e., .pdf) shall be effective as an original.

 

7.                  GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

9

 

 

IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of this
Amendment to be duly executed and delivered and this Amendment shall be
effective as of the First Amendment Effective Date.

 

BORROWER: INNERWORKINGS, INC,   a Delaware corporation               By: /s/
Joseph M. Busky   Name: Joseph M. Busky   Title: CFO             ADMINISTRATIVE
AGENT: BANK OF AMERICA, N.A.,   as Administrative Agent               By: /s/
Linda Lov   Name: Linda Lov   Title: AVP             LENDERS: BANK OF AMERICA,
N.A.,   as a Lender, an L/C Issuer and the Swing Line Lender               By:
/s/ Carlos Morales   Name: Carlos Morales   Title: Senior Vice President        
      JPMORGAN CHASE BANK, N.A.,   as a Lender               By: /s/ Jonathan M.
Deck   Name: Jonathan M. Deck   Title: Assistant Vice President              
PNC BANK, NATIONAL ASSOCIATION,   as a Lender               By: /s/ Chris
Hermann   Name: Chris Hermann   Title: /s/ Vice President

  

[signatures continue on next page]

 

 

 

 

 

  ASSOCIATED BANK, N.A.,   as a Lender           By: /s/ Jennifer Teubl   Name:
Jennifer Teubl   Title: Vice President               THE NORTHERN TRUST COMPANY,
  as a Lender           By: /s/ Morgan A. Lyons   Name: Morgan A. Lyons   Title:
SVP

 

 

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