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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended June 30, 2021
Or
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____ to ____
Commission File Number 001-38252
Spark Networks SE
(Exact name of Registrant as specified in its Charter)
 
Germany
N/A
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)

Kohlfurter Straße 41/43
Berlin
Germany
10999
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (+49) 30 868000
Securities registered pursuant to Section 12(b) of the Act:
 
Title of each class  
Trading
Symbol(s)
  Name of each exchange on which registered
American Depository Shares each representing one-tenth of an ordinary share   LOV   New York Stock Exchange
Ordinary shares, €1.00 nominal value per share*
LOV New York Stock Exchange

* Not for trading purposes, but only in connection with the registration of American Depository Shares pursuant to the requirements of the Securities and Exchange Commission.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer   ☐   Accelerated filer   ☐
Non-accelerated filer   ☒   Smaller reporting company   ☒
Emerging growth company   ☒        

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
The number of ordinary shares outstanding as of August 6, 2021 was 2,613,258.


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2

PART I
Financial Information

Item 1. Financial Statements

Spark Networks SE
Condensed Consolidated Balance Sheets (Unaudited)
(in thousands, except share data)

June 30, 2021 December 31, 2020
Assets
Current assets:
Cash and cash equivalents $ 11,054  $ 19,267 
Accounts receivable, net of allowance of $447 and $93, respectively
9,340  5,507 
Prepaid expenses 4,757  4,366 
Other current assets 973  2,140 
Total current assets 26,124  31,280 
Property and equipment, net of accumulated depreciation of $5,751 and $6,252, respectively
10,576  11,418 
Goodwill 134,775  156,582 
Intangible assets, net of accumulated amortization of $18,563 and $18,631, respectively
45,296  58,999 
Deferred tax assets 7,326  23,522 
Other assets 7,486  8,642 
Total assets $ 231,583  $ 290,443 
Liabilities and Shareholders' Equity
Current liabilities:
Current portion of long-term debt $ 12,600  $ 19,037 
Accounts payable 12,450  11,127 
Deferred revenue 39,597  38,304 
Accrued expenses and other current liabilities 26,600  28,429 
Total current liabilities 91,247  96,897 
Long-term debt, net of current portion 74,600  80,109 
Deferred tax liabilities 6,263  993 
Other liabilities 17,309  17,541 
Total liabilities 189,419  195,540 
Contingencies (Note 7)
Shareholders' Equity:
Common stock, €1.00 nominal value; 2,661,386 shares issued as of June 30, 2021 and December 31, 2020; 2,613,258 and 2,605,689 shares outstanding as of June 30, 2021 and December 31, 2020, respectively
3,064  3,064 
Treasury stock, at nominal value; 48,128 and 55,697 shares as of June 30, 2021 and December 31, 2020, respectively
(53) (61)
Additional paid-in capital 222,082  220,852 
Accumulated deficit (187,779) (132,248)
Accumulated other comprehensive income 4,850  3,296 
Total shareholders' equity 42,164  94,903 
Total liabilities and shareholders' equity $ 231,583  $ 290,443 


The accompanying notes are an integral part of these consolidated financial statements.
3


Spark Networks SE
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited)
(in thousands, except share and per share data)

Three Months Ended June 30, Six Months Ended June 30,
2021 2020 2021 2020
Revenue $ 55,253  $ 56,527  $ 111,632  $ 114,184 
Operating costs and expenses:
Cost of revenue, exclusive of depreciation and amortization 32,881  33,223  69,799  69,764 
Sales and marketing expenses 1,152  1,185  2,203  2,240 
Customer service expenses 1,902  1,938  3,763  4,013 
Technical operations and development expenses 4,774  4,189  9,694  9,659 
General and administrative expenses 7,096  8,340  15,415  15,223 
Depreciation and amortization 2,298  2,332  4,588  4,653 
Impairment of intangible assets and goodwill 32,086  —  32,086  — 
Total operating costs and expenses 82,189  51,207  137,548  105,552 
Operating (loss) income (26,936) 5,320  (25,916) 8,632 
Other income (expense):
Interest income —  9  —  40 
Interest expense (3,802) (3,395) (7,242) (6,852)
Gain (loss) on foreign currency transactions 584  746  (1,144) (207)
Other income (expense) (2) 200  (18) 200 
Total other expense, net (3,220) (2,440) (8,404) (6,819)
(Loss) income before income taxes (30,156) 2,880  (34,320) 1,813 
Income tax expense(1)
(18,871) (2,046) (21,211) (3,141)
Net (loss) income (49,027) 834  (55,531) (1,328)
Other comprehensive income (loss):
Foreign currency translation adjustment (800) (1,104) 1,554  115 
Comprehensive loss $ (49,827) $ (270) $ (53,977) $ (1,213)
(Loss) earnings per share:
Basic (loss) earnings per share $ (18.80) $ 0.32  $ (21.30) $ (0.51)
Diluted (loss) earnings per share $ (18.80) $ 0.32  $ (21.30) $ (0.51)
Weighted average shares outstanding:
Basic 2,608,370  2,605,689  2,607,038  2,605,689 
Diluted 2,608,370  2,607,442  2,607,038  2,605,689 

(1) The Company identified an error related to the calculation of tax provision that impacted the comparative consolidated financial statements for the quarter ended March 31, 2020. Management evaluated these adjustments and concluded they were not material to any previously issued financial statements. For comparability, the prior period comparative figures that are presented herein have been revised to present the correct figures. Refer to Note 1 for additional information.







The accompanying notes are an integral part of these consolidated financial statements.
5


Spark Networks SE
Condensed Consolidated Statements of Shareholders' Equity (Unaudited)
(in thousands, except share data)

Three Months Ended June 30, 2021
Common Stock Treasury Stock
Shares Amount Shares Amount Additional Paid-in Capital Accumulated
Deficit 		Accumulated Other Comprehensive Income Total
shareholders'
equity
Balance at April 1, 2021 2,661,386  $ 3,064  (55,697) $ (61) $ 221,888  $ (138,752) $ 5,650  $ 91,789 
Stock-based compensation —  —  —  —  580  —  —  580 
Treasury stock issued pursuant to equity-based plans —  —  7,569  8  (386) —  —  (378)
Net loss —  —  —  —  —  (49,027) —  (49,027)
Foreign currency translation adjustments —  —  —  —  —  —  (800) (800)
Balance at June 30, 2021 2,661,386  $ 3,064  (48,128) $ (53) $ 222,082  $ (187,779) $ 4,850  $ 42,164 
Three Months Ended June 30, 2020
Common Stock Treasury Stock
Shares Amount Shares Amount Additional Paid-in Capital Accumulated
Deficit 		Accumulated Other Comprehensive Income Total
shareholders'
equity
Balance at April 1, 2020 2,661,386  $ 3,064  (55,697) $ (61) $ 216,982  $ (87,802) $ 8,970  $ 141,153 
Stock-based compensation —  —  —  —  1,434  —  —  1,434 
Net income —  —  —  —  —  834  —  834 
Foreign currency translation adjustments —  —  —  —  —  —  (1,104) (1,104)
Balance at June 30, 2020 2,661,386  $ 3,064  (55,697) $ (61) $ 218,416  $ (86,968) $ 7,866  $ 142,317 

Six Months Ended June 30, 2021
Common Stock Treasury Stock
Shares Amount Shares Amount Additional Paid-in Capital Accumulated
Deficit 		Accumulated Other Comprehensive Income Total
shareholders'
equity
Balance at January 1, 2021 2,661,386  $ 3,064  (55,697) $ (61) $ 220,852  $ (132,248) $ 3,296  $ 94,903 
Stock-based compensation —  —  —  —  1,616  —  —  1,616 
Treasury stock issued pursuant to equity-based plans —  —  7,569  8  (386) —  —  (378)
Net loss —  —  —  —  —  (55,531) —  (55,531)
Foreign currency translation adjustments —  —  —  —  —  —  1,554  1,554 
Balance at June 30, 2021 2,661,386  $ 3,064  (48,128) $ (53) $ 222,082  $ (187,779) $ 4,850  $ 42,164 
Six Months Ended June 30, 2020
Common Stock Treasury Stock
Shares Amount Shares Amount Additional Paid-in Capital Accumulated
Deficit 		Accumulated Other Comprehensive Income Total
shareholders'
equity
Balance at January 1, 2020 2,661,386  $ 3,064  (55,697) $ (61) $ 216,072  $ (85,640) $ 7,751  $ 141,186 
Stock-based compensation —  —  —  —  2,344  —  —  2,344 
Net loss —  —  —  —  —  (1,328) —  (1,328)
Foreign currency translation adjustments —  —  —  —  —  —  115  115 
Balance at June 30, 2020 2,661,386  $ 3,064  (55,697) $ (61) $ 218,416  $ (86,968) $ 7,866  $ 142,317 


The accompanying notes are an integral part of these consolidated financial statements.
6


Spark Networks SE
Condensed Consolidated Statements of Cash Flows (Unaudited)
(in thousands)

Six Months Ended June 30,
2021 2020
Net loss $ (55,531) $ (1,328)
Adjustments to reconcile net loss to cash provided by operating activities:
Depreciation and amortization 4,588  4,653 
Impairment of goodwill and intangible assets 32,086  — 
Loss on tangible and intangible assets —  341 
Unrealized loss (gain) on foreign currency transactions 1,630  (597)
Stock-based compensation expense 1,616  2,344 
Amortization of debt issuance costs and accretion of debt discounts 2,275  1,773 
Deferred tax expense 21,211  3,141 
Provision for credit losses 214  108 
Non-cash lease expense 563  953 
Change in operating assets and liabilities:
Accounts receivable (4,099) (2,707)
Prepaid expenses and other current assets (793) (131)
Other assets 525  69 
Accounts payable, accrued expenses, and other current liabilities (774) (1,794)
Other liabilities (814) (930)
Deferred revenue 1,932  1,312 
Net cash provided by operating activities $ 4,629  $ 7,207 
Capital expenditures (661) (1,438)
Acquisitions of businesses, net of cash acquired —  (513)
Net cash used in investing activities $ (661) $ (1,951)
Repayment of bank loans (13,087) (9,319)
Payments directly related to loan facility (523) — 
Net cash used in financing activities $ (13,610) $ (9,319)
Net change in cash and cash equivalents and restricted cash (9,642) (4,063)
Effects of exchange rate fluctuations on cash and cash equivalents and restricted cash (275) (2)
Net decrease in cash and cash equivalents and restricted cash $ (9,917) $ (4,065)
Cash and cash equivalents and restricted cash at beginning of period 21,117  17,457 
Cash and cash equivalents and restricted cash at end of period $ 11,200  $ 13,392 
Supplemental disclosure of cash flow information:
Cash paid for interest $ 4,849  $ 5,498 
Cash paid for income taxes $ —  $ 262 
Reconciliation of cash, cash equivalents, and restricted cash to the condensed consolidated balance sheets Jun-21 Dec-20
Cash and cash equivalents $ 11,054  $ 19,267 
Restricted cash included in other current assets 146  1,850 
Total cash and cash equivalents and restricted cash as shown on the condensed statements of cash flows $ 11,200  $ 21,117 


The accompanying notes are an integral part of these consolidated financial statements.
7


Spark Networks SE
Notes to Condensed Consolidated Financial Statements (unaudited)

Note 1. Basis of Presentation and Summary of Significant Accounting Policies

Description of Business

Spark Networks SE (the "Company") is domiciled in Germany and is a leading global operator of premium online dating sites and mobile applications. The Company targets the 40+ age demographic and religious-minded singles looking for serious relationships in North America and other international markets. The Company operates a portfolio of premium and freemium brands, including Zoosk, Inc. ("Zoosk"), EliteSingles, SilverSingles, Christian Mingle, Jdate, and JSwipe, among others. The Company’s brands are tailored to quality dating with real users looking for love and companionship in a safe and comfortable environment.

Basis of Presentation and Consolidation

The Company prepares its consolidated financial statements in accordance with generally accepted accounting principles in the United States ("U.S. GAAP") and applicable rules and regulations of the U.S. Securities and Exchange Commission (“SEC”), regarding interim financial reporting. The condensed consolidated financial statements include the accounts of the Company and all of its wholly-owned subsidiaries. Intercompany transactions and balances have been eliminated in consolidation.

In management’s opinion, the unaudited condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and reflect, in management’s opinion, all adjustments, consisting of normal and recurring adjustments, necessary for the fair presentation of the Company's balance sheets, statement of operations and comprehensive loss, statement of shareholders' equity and statement of cash flows for the periods presented. Interim results are not necessarily indicative of the results that may be expected for the Company's entire fiscal year. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K filed with the SEC for the year ended December 31, 2020.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities. Significant estimates and assumptions are required in the determination of: revenue reserves, deferred tax asset valuation allowances, unrecognized tax benefits, accounting for business combinations, classification and measurement of virtual stock option plans, and annual impairment testing of goodwill and indefinite-lived intangible assets. The Company evaluates its estimates and judgements on an ongoing basis based on historical experience, expectations of future events and various other factors that it believes to be reasonable under the circumstances and revises them when necessary. Actual results may differ from the original or revised estimates.

Liquidity and Capital Resources

The Company’s financial statements are prepared under U.S. GAAP applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. As of the date of the financial statements, the Company has generated losses from operations, incurred impairment charges to its Zoosk goodwill and intangible assets and has a working capital deficiency. These factors are potential indications of the Company’s inability to continue as a going concern.

The Company’s plans to alleviate these indicators include growing its subscriber base by improving its marketing techniques and implementing new features to increase customer engagement on its various platforms. If the Company is unable to achieve its plan, the Company has the ability to control its direct marketing spend to achieve compliance with its debt covenants. The Company’s plan including adjusting its direct marketing spend, along with its current cash and cash equivalents, and cash flow from operations, are expected to be sufficient to meet its anticipated cash requirements for financial liabilities, capital expenditures and contractual obligations, for at least the next 12 months from the issuance of these financial statements.

COVID-19 Update

8


During 2020, the novel coronavirus ("COVID-19") outbreak spread worldwide and was declared a global pandemic in March 2020. Despite challenging economic conditions on consumers, the Company maintained stable churn levels during the period and experienced positive user engagement. The global outbreak of COVID-19 continues to rapidly evolve as of the date these interim condensed consolidated financial statements are issued. Management is actively monitoring the global situation on its business. The effects of COVID-19 did not have a material impact on the Company’s result of operations or financial condition for the period ended June 30, 2021. However, given the daily evolution of the COVID-19 situation, and the global responses to curb its spread, the Company is not able to estimate the effects COVID-19 may have on its future results of operations or financial condition.

Revision of Prior Period Consolidated Financial Statements

During the second quarter of 2021, management identified an overstatement of tax provision for the quarter ended March 31, 2020. Management concluded that this error was not material to previously issued consolidated financial statements and would be corrected through a revision to the comparative consolidated income statement presented for the six months ended June 30, 2020. The impact of the error for the quarter ended March 31, 2020 was $1.7 million overstatement of tax provision. The prior period comparative figures for the three and six months ended June 30, 2020 that are presented herein reflect the correct figures.

Recently Adopted Accounting Pronouncements

In December 2019, the Financial Accounting Standard Board ("FASB") issued Accounting Standard Update ("ASU") 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which simplifies the accounting for incomes taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improved consistent application of and simplify the accounting for other areas of Topic 740 by clarifying and amending existing guidance. The Company adopted the standard in the first quarter of 2021 and it did not have a material impact to the financial statements.

Note 2. Revenue

For the three and six months ended June 30, 2021 and 2020, revenue was as follows:

Three Months Ended June 30, Six Months Ended June 30,
(in thousands) 2021 2020 2021 2020
Subscription revenue $ 53,697  $ 55,023  $ 108,243  $ 111,061 
Virtual currency revenue 811  942  1,907  1,844 
Advertising revenue 745  562  1,482  1,279 
Total Revenue $ 55,253  $ 56,527  $ 111,632  $ 114,184 

Revenue disaggregated by geography, based on the billing address of the Company's customers, consists of the following:

Three Months Ended June 30, Six Months Ended June 30,
(in thousands) 2021 2020 2021 2020
United States $ 36,039  $ 38,131  $ 72,588  $ 76,355 
France 5,347  2,897  10,721  5,860 
Germany 305  431  638  883 
Rest of world 13,562  15,068  27,685  31,086 
Total Revenue $ 55,253  $ 56,527  $ 111,632  $ 114,184 

The Company's deferred revenue balances as of June 30, 2021 and December 31, 2020 are $39.6 million and $38.3 million, respectively. During the six months ended June 30, 2021 and 2020, the Company recognized $34.1 million and $35.2 million of revenue, respectively, that was included in the deferred revenue balances as of December 31, 2020 and 2019, respectively.

Note 3. Income Taxes

For the three months ended June 30, 2021 and 2020, the Company recorded income tax expense of $18.9 million and $2.0 million, respectively, which reflects an effective tax rate of (62.7)% and 69.2%, respectively. For the six months ended June 30, 2021 and 2020, the Company recorded income tax expense of $21.2 million and $3.1 million, respectively, which reflect an
9

effective tax rate of (61.9)% and 159.3%, respectively. The increase in the income tax expense for the three and six months ended June 30, 2021 was primarily driven by a change in valuation allowance for U.S. deferred tax assets and impairment of goodwill and intangible assets.

The Company regularly assesses the need for a valuation allowance related to our deferred income tax assets, which includes consideration of both positive and negative evidence related to the likelihood of realization of such deferred income tax assets to determine, based on the weight of the available evidence, whether it is more-likely-than-not that some or all of our deferred tax assets will not be realized. In its assessment, the Company consider recent financial operating results, projected future taxable income, the reversal of existing taxable differences and tax planning strategies. During the quarter ended June 30, 2021, as a result of lower financial expectations for the remainder of 2021, the Company concluded that it was not more likely than not that a portion of the U.S. deferred income tax assets would be realized. The Company provided a valuation allowance on U.S. federal and state net operating loss carryforwards, and other U.S. net deferred income tax assets that have a limited life and are not supportable by indefinite-lived intangibles deferred tax liability sourced income as of June 30, 2021. The Company accordingly recognized a charge of $21.5 million to establish a valuation allowance related to the U.S. deferred income tax assets which was recorded discretely in the quarter ended June 30, 2021. In addition, we intend to continue maintaining a valuation allowance on Israel and German deferred tax assets until there is sufficient evidence to support reversal of all or some portion of these allowances.

As of June 30, 2021 and December 31, 2020, the Company has $4.7 million and $4.6 million of unrecognized tax benefits, respectively, all of which would impact the effective tax rate if recognized. As of June 30, 2021 and December 31, 2020, the Company has recorded $0.5 million and $0.4 million of interest and penalties related to unrecognized tax benefits, respectively, all of which would impact the effective tax rate if recognized. The Company recognized an increase to interest and penalties primarily due to U.S. tax credits and state nexus. The Company’s policy is to classify interest and penalties as a component of income tax expense. There were no significant changes to unrecognized tax benefits during the six months ended June 30, 2021. The Company does not anticipate any significant changes with respect to unrecognized tax benefits within the next twelve months. Based on the current status of Germany, U.S. federal, state, local and other foreign audits, the Company does not expect the amount of unrecognized tax benefits to significantly decrease in the next 12 months as a result of settlements of tax audits and/or the expiration of statutes of limitations.

As a matter of course, the Company may be audited by Germany, U.S. Federal and State, Israel, France, the U.K. and other foreign tax authorities within which it operates. From time to time, these audits may result in proposed assessments. The Company was notified during 2020 that the Israeli tax authorities were auditing the Company's subsidiary, Spark Networks Ltd. for the tax years 2015-2019. There is minimal activity in the entity and while the Company does not expect adverse findings, any adverse finding could result in a reduction of the net operating loss carryforward which has a full valuation allowance against it. The Company's subsidiaries are currently being audited by German tax authorities for the tax years 2017-2018 for Spark SE and for the tax years 2016-2018 for Spark GmbH. The Company is responding to questions and requests for information. At this point, there is no indication of any uncertainty with respect to Israel and German tax returns.

Note 4. Goodwill and Intangible Assets

The Company completes its annual goodwill impairment test during the fourth quarter of each year, or more frequently if triggering events indicate a possible impairment in one or more of its reporting units. During the second quarter of 2021, the Company lowered its financial expectations for the remainder of 2021 due to increased cyberattacks, delays in product initiatives and a more uncertain Covid-19 outlook. These factors constituted an interim triggering event as of the end of the Company's second quarter of 2021, and the Company performed an impairment analysis with regard to its indefinite-lived intangible assets and goodwill.

Goodwill

The following table summarizes the changes in the carrying amount of goodwill for the six months ended June 30, 2021 and the year ended December 31, 2020:

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(in thousands)
Balance as of January 1, 2020 $ 199,238 
Impairment charges (42,713)
Impact of currency translation 57 
Balance as of December 31, 2020 $ 156,582 
Impairment charges (21,786)
Impact of currency translation (21)
Balance as of June 30, 2021 $ 134,775 

For the quarter ended June 30, 2021, as a result of the interim goodwill impairment test, the fair value of the Spark reporting
unit exceeded the carrying amount, and as a result, no goodwill impairment was recorded. Goodwill assigned to the Spark reporting unit was $24.5 million. For the Zoosk reporting unit, the fair value did not exceed the carrying value, and the Company recorded a goodwill impairment charge of $21.8 million. The Company estimated the fair value of its reporting units utilizing a present value cash flow model. The Company believes this non-cash impairment charge does not impact its ability to generate cash flow in the future and it is not tax deductible.

The total accumulated impairment loss of the Company's goodwill was $84.5 million and $62.7 million as of June 30, 2021 and December 31, 2020, respectively.

Intangible Assets

Intangible assets consists of the following as of June 30, 2021 and December 31, 2020:

June 30, 2021
(in thousands) Weighted-Average Remaining Amortization Period (Years) Gross Carrying Amount Accumulated Impairment Charges Accumulated Amortization Currency Translation Impact on Carrying Amount Net Carrying Amount
Indefinite-lived intangible assets:
Brands and trademarks $ 63,800  $ (21,260) $ —  $ —  $ 42,540 
Long-lived intangible assets:
Brands and trademarks 0.1 3,025  (2,573) (417) 2  37 
Acquired technology 1.9 5,910  —  (3,346) —  2,564 
Customer relationships 0.0 10,780  —  (10,703) —  77 
Licenses and domains 0.0 184  —  (148) 2  38 
Other 0.0 3,989  —  (3,949) —  40 
Total intangible assets 2.0 $ 87,688  $ (23,833) $ (18,563) $ 4  $ 45,296 

December 31, 2020
(in thousands) Weighted-Average Remaining Amortization Period (Years) Gross Carrying Amount Accumulated Impairment Charges Accumulated Amortization Currency Translation Impact on Carrying Amount Net Carrying Amount
Indefinite-lived intangible assets:
Brands and trademarks $ 63,800  $ (10,960) $ —  $ —  $ 52,840 
Long-lived intangible assets:
Brands and trademarks 0.1 3,025  (2,573) (409) 4  47 
Acquired technology 1.3 7,300  —  (3,997) —  3,303 
Customer relationships 0.4 11,420  —  (8,762) —  2,658 
Licenses and domains 0.0 410  —  (361) 3  52 
Other 0.0 5,203  —  (5,102) (2) 99 
Total intangible assets 1.8 $ 91,158  $ (13,533) $ (18,631) $ 5  $ 58,999 

For the interim assessment for the quarter ended June 30, 2021, the Company recognized a Zoosk trademark impairment charge of $10.3 million. The Company estimated the fair value using an income approach, specifically the relief-from-royalty method,
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based on the present value of future cash flows.The Company used a royalty rate of 4.0% and discount rate of 14.5%. No impairment charge was recorded for the long-lived intangible assets for the six months ended June 30, 2021 and the year ended December 31, 2020.

Amortization expense for the six months ended June 30, 2021 and the year ended December 31, 2020 were $3.4 million and $7.3 million, respectively.

At June 30, 2021, amortization of long-lived intangible assets for each of the next five years and thereafter is estimated to be as follows:

(in thousands) Amortization Expense
2021 $ 827 
2022 1,280 
2023 632 
2024 8 
2025 8 
Thereafter 1 
Total estimated amortization expense $ 2,756 

Note 5. Accrued Expenses and Other Liabilities

Accrued expenses and other current liabilities consist of the following as of June 30, 2021 and December 31, 2020:

(in thousands) June 30, 2021 December 31, 2020
Accrued advertising 8,050  8,691 
Accrued employee compensation and benefits 2,583  2,085 
Accrued professional fees 1,038  1,819 
Accrued service providers 2,016  2,433 
Accrued value-added, sales, and other non-income-based taxes 8,459  8,897 
Current portion of income tax payable 1,380  1,536 
Current portion of lease liabilities 1,772  1,932 
Other 1,302  1,036 
Accrued expenses and other current liabilities $ 26,600  $ 28,429 

Other liabilities consist of the following as of June 30, 2021 and December 31, 2020:

(in thousands) June 30, 2021 December 31, 2020
Deferred payment to Zoosk's shareholders $ 10,954  $ 10,373 
Lease liabilities, less current portion 3,847  4,650 
Sublease security deposit 1,038  1,038 
Other 1,470  1,480 
Other liabilities $ 17,309  $ 17,541 

Note 6. Long-term Debt

On July 1, 2019, in connection with the acquisition of Zoosk, the Company entered into a Loan Agreement with Zoosk, Spark Networks, Inc., the subsidiary guarantors party thereto, the lenders party thereto, and Blue Torch Finance LLC ("Administrative Agent"), as administrative agent and collateral agent (the "Senior Secured Facilities Agreement") that provides for a four-year $125.0 million Senior Secured Facility. The Senior Secured Facilities Agreement provides for a term loan facility in an aggregate amount equal to $120.0 million (the "Term Loan Facility") and a revolving credit facility in an aggregate amount equal to $5.0 million (the “Revolving Credit Facility” and, together with the Term Loan Facility, the "Facilities"). Borrowings
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under the Facilities bear interest at a rate equal to either LIBOR plus an applicable margin of 8.0% per annum or the Base Rate with an applicable margin of 7.0% per annum.

Term Loan Facility

On December 2, 2020, the Company entered into the Second Amendment to Loan Agreement (the "Second Amendment"), which established an additional $6.0 million of term loan commitment to its existing Term Loan Facility. The additional borrowing was applied to pay the quarterly Term Loan Facility principal and interest payments on December 31, 2020 and March 31, 2021. The Second Amendment was accounted for as a modification of debt, and as such, the third-party costs incurred in connection with the Second Amendment of approximately $1.3 million were expensed as incurred. The debt issuance costs of $1.3 million that were paid directly to the lender at the closing date were capitalized and will be amortized using the effective interest method over the term of the loan. The effective interest rate on the modified loan is 11.3%. The Second Amendment requires repayment of the principal amount of $150 thousand quarterly, beginning on March 31, 2021, in addition to the $3.0 million quarterly principal repayment of the original Term Loan Facility and the interest.

On March 5, 2021, the Company entered into a Limited Waiver under Loan Agreement (the "Limited Waiver") with the Administrative Agent and the lenders pursuant to which certain defaults under the Loan Agreement were waived. In consideration of the Limited Waiver, the Company agreed to pay the Administrative Agent, for the ratable benefit of the lenders, a fee of $0.5 million upon the execution of the Limited Waiver, plus $0.3 million paid in kind by capitalizing such amount into the principal balance under the Loan Agreement. The aggregated fees were capitalized and will be amortized using the effective interest rate of 11.8%. The aggregated outstanding principal balance of the existing Term Loan Facility and the Second Amendment is $91.9 million and $104.7 million as of June 30, 2021 and December 31, 2020, respectively. The amortized cost basis of the Term Loan Facility is $87.2 million and $99.1 million as of June 30, 2021 and December 31, 2020, respectively.

In addition, pursuant to the terms of the Term Loan Facility, within 5 days after the annual financial statements are required to be delivered to the lender, the Company is required to make a prepayment of the loan principal in an amount equal to a percentage of the excess cash flow, as defined in the Loan Agreement, of the most recently completed fiscal year. For the quarter ended June 30, 2021 and 2020, the Company made a prepayment of $6.8 million and $3.3 million, respectively.

Revolving Credit Facility

The $5.0 million Revolving Credit Facility has a commitment fee of 0.75% per annum on the unutilized commitments thereunder payable on the Maturity Date. As the Revolving Credit Facility is not expected to be drawn down, transaction costs and upfront fees totaling $0.3 million related to the Revolving Credit Facility were deferred and are being amortized over the term of the agreement. There were no outstanding borrowings under the Revolving Credit Facility as of June 30, 2021 and December 31, 2020.

Covenants

The Facilities contain a number of covenants that, among other things, restrict, subject to certain exceptions, the Company's ability and the ability of its subsidiaries to: incur additional indebtedness, create liens, engage in mergers or consolidations, sell or transfer assets, pay dividends and distributions and make share repurchases, make certain acquisitions, engage in certain transactions with affiliates, and change lines of business.

In addition, the Facilities, as revised by the Second Amendment, require the following financial covenants to be maintained: (i) a fixed charge coverage ratio of no less than 1.05 and 1.25 for the quarter ended June 30, 2021 and December 31, 2020, respectively, (ii) a net leverage ratio of no greater than 2.60 for both the quarter ended June 30, 2021 and December 31, 2020, and (iii) a minimum liquidity threshold of $10.0 million at the end of each month following the closing date of the loan, consisting of available cash funds and availability under the Revolving Credit Facility. The Facilities also contain certain customary affirmative covenants and events of default, including a change of control. The Company is in compliance with all of its financial covenants as of June 30, 2021 and December 31, 2020.

Note 7. Contingencies

The Company is involved in lawsuits, claims and proceedings incident to the ordinary course of business and establishes reserves for specific legal matters when it determines that the likelihood of an unfavorable outcome is probable and the loss is reasonably estimable. Management has also identified certain other legal matters where the Company believes an unfavorable
13

outcome is not probable and, therefore, no reserve is established. Any claims against the Company, whether meritorious or not, could result in costly litigation, require significant amounts of management time and result in the diversion of significant operational resources. The results of these lawsuits, claims and proceedings cannot be predicted with certainty. However, the Company believes that the ultimate resolution of these current matters will not have a material adverse effect on its liquidity, results of operations or financial condition.

Cybersecurity Matters

On July 22, 2020, a putative class action was filed against the Company and Zoosk in the U.S. District Court for the Northern District of California by individuals claiming to be Zoosk users whose information was affected by the 2020 security incident disclosed by Zoosk. The complaint, as subsequently amended, asserts that by reason of the Zoosk security incident Spark and Zoosk violated the California Consumer Privacy Act ("CCPA"), the California Unfair Competition Law (UCL), and common-law obligations. Based on these assertions, the complaint seeks statutory damages, compensatory damages, punitive damages, attorneys’ fees, and injunctive relief. On December 14, 2020, plaintiffs voluntarily withdrew their claim under the CCPA. On January 30, 2021, the district court granted in part, and denied in part, Zoosk’s motion to dismiss the remainder of the complaint for failure to state a claim by dismissing the UCL claim but allowing the common-law claim to go forward. The Court held in abeyance the Company's motion to dismiss itself on jurisdictional grounds and for failure to state a claim. The court granted plaintiffs limited jurisdictional discovery as to the Company. Zoosk answered the portion of the complaint that asserts the one remaining common-law claim by denying its material allegations and asserting a number of affirmative defenses. The Court stayed the case pending resolution of the jurisdictional discovery. On May 6, 2021, plaintiffs voluntarily dismissed the Company from the case and the stay was lifted. Zoosk and plaintiffs are currently engaged in discovery and the case is scheduled for trial commencing September 12, 2022.

Separately, a group of lawyers that is different from those who filed the putative class action described above filed 77 separate arbitration demands against Zoosk in the Judicial Arbitration and Mediation Services, Inc. ("JAMS") arbitration forum. Zoosk has objected that neither JAMS nor any arbitrator appointed by JAMS has authority to arbitrate any of these claims or to rule on the issue of arbitrability. JAMS has nonetheless determined to commence arbitration proceedings in regard to one of the arbitration claims filed to date and has appointed an arbitrator for that one claim. Zoosk is participating in that arbitration under protest and reserving its arbitrability objections. That arbitration is scheduled for hearing on January 18, 2022.

On May 5, 2021, the same group of attorneys that filed the arbitration demands, described above, filed a petition to compel arbitration in the U.S. District Court for the Northern District of California on behalf of three individuals claiming to be Zoosk users affected by the 2020 security incident. Counsel for the petitioners voluntarily dismissed the petition in its entirety on July 15, 2021.

Elite Connexion v. Spark Networks Services GmbH

On September 20, 2018, Elite Connexion filed a cease and desist order and damage claim in France against Spark Networks Services GmbH ("Spark GmbH"), alleging that Spark GmbH bid on search engine terms which violated an agreement between the parties. In Elite Connexion's claim, which was amended in September 2019, Elite Connection claimed damages for loss of profit, legal fees, and court fees. The parties agreed in principle to a settlement in September 2020 subject to negotiation of the settlement agreement. The parties continued to negotiate the terms of the settlement agreement as of June 30, 2021, and the Company recorded an accrual for the loss contingency in relation to a potential settlement of these matters. On August 10, 2021, the Company entered into a settlement agreement with Elite Connexion to settle the dispute.

Intellectual Property

Trademarks are an important element in running online dating websites and mobile applications. Given the large number of markets and brands, the Company deals with claims against its trademarks from time to time in the ordinary course of business. As of June 30, 2021, there are several ongoing national cases which affect trademarks within Germany, Finland, Ireland, France, Sweden, the United Kingdom, Poland and Benelux. The Company vigorously defends against each of the above legal proceedings. Following a favorable 2020 decision of the Court of Justice of the European Union, the Company is exploring options to settle certain national trademark disputes in Europe.

The Company has additional legal claims and may encounter future legal claims in the normal course of business.

The Company intends to defend vigorously against each of the above legal proceedings. At this time, management does not believe the above matters, either individually or in the aggregate, will have a material adverse effect on the Company’s results
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of operations or financial condition and believes the recorded legal provisions as of June 30, 2021 are adequate with respect to the probable and estimable liabilities. However, no assurance can be given that these matters will be resolved in the Company's favor.


Note 8. Financial Instruments and Fair Value Measurements

The Company records long-term debt at carrying value less unamortized discount and unamortized fees as it is not required to be carried at fair value on a recurring basis. The fair value of long-term debt was determined using observable inputs (Level 2). The valuation considers the present value of expected future repayments, discounted using a market interest rate equal to the interest margin on the borrowings and variable interest rate.

The following table presents the carrying values and the estimated fair values of long-term debt as of June 30, 2021 and December 31, 2020:

June 30, 2021 December 31, 2020
(in thousands) Carrying Value Fair Value Carrying Value Fair Value
Long-term debt, including current portion(1)
$ 87,200  $ 106,256  $ 99,146  $ 107,504 

(1) At June 30, 2021 and December 31, 2020, the carrying value of long-term debt is net of unamortized original issue discount and debt issuance costs of $4.7 million and $5.5 million, respectively.

The Company’s financial instruments, including cash and cash equivalents, deposits, accounts receivable, and accounts payable are carried at cost, which approximates their fair value due to the short-term nature of these instruments. The Company does not have financial instruments that are measured at fair value on a recurring basis as of June 30, 2021 and December 31, 2020.

Note 9. Stock-based Compensation

Stock-based compensation expense reflects share awards issued under the Company's 2018 virtual stock option plan and the Long Term Incentive Plan adopted in 2020 (the "LTIP").

2020 Long Term Incentive Plan

In January 2020, the Administrative Board of the Company (the "Administrative Board") adopted the LTIP for applicable executives and employees of the Company and its subsidiaries as part of their remuneration for future services. The LTIP provides for the grant of virtual stock options. Each option represents the right to receive, upon exercise, a certain amount in cash determined based on the relevant American Depository Shares ("ADS") Stock Price of the option minus the strike price of such option; provided, however, that the Company may elect to settle options in ADSs or ordinary shares of the Company instead of cash at its sole discretion. The LTIP provides that the strike price can be set at any amount determined by the Administrative Board, including zero. Under the LTIP, the "ADS Stock Price" is, as of the grant date, the average closing price of one of the Company's ADSs trading on the NYSE American for the period of five trading days prior to such date. The Company classifies awards under the LTIP as equity-settled.

Options granted under the LTIP have a contractual term of 85 months and vest, subject to the employee's continued service to the Company, as follows: (i) 25% of the total number of options granted to a participant vest 12 months after the grant date of such option, and (ii) an additional 6.25% of such options shall vest at the end of each additional three-month period thereafter until the end of the 48th month after the relevant grant date.

In connection with the adoption of the LTIP, the Administrative Board authorized for 2020 the issuance of virtual options for up to three million ADSs, including up to one million zero-priced options. As of June 30, 2021, 260,025 virtual options, and 404,868 zero-priced options were available for future grant.

The fair value of the virtual stock options and zero-priced options are measured using a Black-Scholes option-pricing model for the six months ended June 30, 2021. The inputs used in the measurement of the fair values at the date of grant are summarized below:

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Virtual Stock Options Zero-Priced Options
Long Call Short Call Long Call Short Call
Option Option (Cap) Option Option (Cap)
Stock price $5.42 $5.42 $5.42 $5.42
Strike price $5.34 $53.40 $— $50.00
Term 4.67 4.67 4.67 4.67
Volatility 62.7  % 62.7  % 62.7  % 62.7  %
Dividend —  % —  % —  % —  %
Risk-free rate 0.7  % 0.7  % 0.7  % 0.7  %

The following table summarizes the activity for the Company's options under the LTIP during the six months ended June 30, 2021:

Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value
(in years)
Outstanding as of December 31, 2020 1,550,000 $4.74 6.22 $0.90
Granted 257,100 5.34
Exercised (10,750) 3.71
Forfeited (56,375) 3.69
Outstanding as of June 30, 2021 1,739,975 $4.87 5.92 $0.60
Vested and Exercisable at June 30, 2021 427,442

Number of Options Weighted Average Grant Date Fair Value
Unvested as of December 31, 2020 1,550,000 $2.99
Granted 257,100 2.40
Vested (438,192) 3.08
Forfeited (56,375) 3.69
Unvested as of June 30, 2021 1,312,533 $2.87


The following table summarizes the activity for the Company's zero priced options under the LTIP during the six months ended June 30, 2021:

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Number of Shares
Outstanding as of December 31, 2020 674,000
Granted 77,600
Exercised (137,125)
Forfeited (19,343)
Outstanding as of June 30, 2021 595,132
Vested and Exercisable at June 30, 2021 60,537

Number of Options Weighted Average Grant Date Fair Value
Unvested as of December 31, 2020 674,000 $6.13
Granted 77,600 5.01
Vested (197,662) 6.25
Forfeited (19,343) 4.60
Unvested as of June 30, 2021 534,595 $7.51

The total unrecognized compensation expense related to awards granted under the LTIP at June 30, 2021 was $4.36 million, which will be recognized over a weighted-average period of 2.90 years.

Total stock-based compensation expense for all the plans are included in the Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) is as follows:

Six Months Ended June 30,
(in thousands) 2021 2020
Cost of revenue, exclusive of depreciation and amortization $ —  $ — 
Sales and marketing 23  97 
Customer service 12  18 
Technical operations and development 145  201 
General and administrative 1,436  2,028 
Total stock-based compensation expense $ 1,616  $ 2,344 

17


Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

This section and other parts of this Quarterly Report on Form 10-Q (“Form 10-Q”) contain forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, that involve risks and uncertainties. Forward-looking statements provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to any historical or current fact. Forward-looking statements can be identified by words such as “future,” “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “predicts,” “will,” “would,” “could,” “can,” “may,” and similar terms. Forward-looking statements are not guarantees of future performance and the Company’s actual results may differ significantly from the results discussed in the forward-looking statements. Factors that might cause such differences include, but are not limited to, those discussed in Part I, Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 under the heading “Risk Factors.” The Company assumes no obligation to revise or update any forward-looking statements for any reason, except as required by law.

Overview

We are a leading global operator of premium online dating sites and mobile applications. Our focus is on catering to the 40+ age demographic and religious minded singles looking for serious relationships in North America and other international markets. Since our inception, we have had 93 million users register with our dating platforms (which includes inactive accounts). We currently operate one or more of our brands worldwide.

Our strategy is to become the social dating for meaningful relationships leader. We will continue to expand our presence in North America through significant marketing investment in this region as we look to drive both organic growth of our existing brand portfolio and expansion through the launch of new or acquired brands. We intend to incorporate more social features in our products with content, community and social discovery functionality to allow our users to meet in more informal ways and to provide new ways to date online. Our portfolio of strong brands along with our improved financial strength positions us to deliver a superior user experience to our customers and drive long-term value to shareholders.

Our ability to compete effectively will depend upon our ability to address the needs of our members and paying subscribers, on the timely introduction and performance of innovative features and services associated with our brands, and our ability to respond to services and features introduced by competitors. We must also achieve these objectives within the parameters of our consolidated and operating segment profitability targets. We are focused on enhancing and augmenting our portfolio of services while also continuing to improve the efficiency and effectiveness of our operations. We believe we have sufficient available cash resources on hand to accomplish the enhancements currently contemplated.

Operations Overview

We offer services both via websites and mobile applications and utilize a "subscription" business model, where certain basic functionalities are provided free of charge, while providing premium features (such as interacting with other community members via messages) only to paying subscribers. We generate revenues primarily through paid membership subscriptions. We manage our operations through one reportable segment.

In addition to operating in the United States ("U.S."), we also operate in various markets outside the U.S., primarily in various jurisdictions within the European Union ("EU"), and as a result, are exposed to foreign exchange risk for the euro, U.S. dollar, British pound, Australian dollar and Canadian dollar. Financial statements of subsidiaries outside the U.S. are generally measured using the local currency as the functional currency. The revenue generated outside the U.S. is translated into U.S. dollar at the date of transactions and subject to unpredictable fluctuations if the value of other currencies change relative to the U.S. dollar. Fluctuating foreign exchange rates result in foreign currency exchange gains and losses. We have not and do not intend to hedge any foreign currency exposures.

We believe that any effect of inflation at current levels will be minimal. Historically, we have been able to increase prices at a rate equal to or greater than that of inflation and we believe that we will continue to be able to do so for the foreseeable future. In addition, we have been able to maintain a relatively stable variable cost structure for our products due, in part, to a continued optimization of marketing spend.

COVID-19 Update

During 2020, the novel coronavirus ("COVID-19") outbreak spread worldwide and was declared a global pandemic in March 2020. Despite challenging economic conditions on consumers, we maintained stable churn levels during the period and
18


experienced positive user engagement. The global outbreak of COVID-19 continues to rapidly evolve as of the date these interim condensed consolidated financial statements are issued. Management is actively monitoring the global situation on its business. The effects of COVID-19 did not have a material impact on our result of operations or financial condition for the period ended June 30, 2021. However, given the daily evolution of the COVID-19 situation, and the global responses to curb its spread, we are not able to estimate the effects COVID-19 may have on our future results of operations or financial condition.

Key Business Metrics

We regularly review certain operating metrics in order to evaluate the effectiveness of our operating strategies and monitor the financial performance of the business. The key business metrics that we utilize include the following:

Total Registrations

Total registrations are defined as the total number of new members registering to our platforms with their email address. Those include members who enter into premium subscriptions and free memberships.

Average Paying Subscribers

Paying subscribers are defined as individuals who have paid a monthly fee for access to premium services, which include, among others, unlimited communication with other registered users, access to user profile pictures and enhanced search functionality. Average paying subscribers for each month are calculated as the sum of the paying subscribers at the beginning and the end of the month, divided by two. Average paying subscribers for periods longer than one month are calculated as the sum of the average paying subscribers for each month, divided by the number of months in such period.

Monthly Average Revenue Per User ("ARPU")

Monthly ARPU represents the total net subscriber revenue for the period divided by the number of average paying subscribers for the period, divided by the number of months in the period.

Contribution

Contribution is defined as revenue, net of refunds and credit card chargebacks, less direct marketing.

Direct Marketing

Direct Marketing is defined as online and offline advertising spend and is included within Cost of revenue, exclusive of depreciation and amortization within our Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited).

Unaudited selected statistical information regarding the key business metrics described above is shown in the table below:

Three Months Ended June 30, Six Months Ended June 30,
2021 2020 2021 2020
Registrations 3,186,853  3,759,674  6,794,555  7,668,580 
Average Paying Subscribers 878,618  905,416  887,481  914,799 
Total Monthly ARPU $ 20.96  $ 20.81  $ 20.96  $ 20.80 
Net Revenue $ 55,253  $ 56,527  $ 111,632  $ 114,184 
Direct Marketing 26,426  26,798  56,829  56,630 
Contribution $ 28,827  $ 29,729  $ 54,803  $ 57,554 

During the three and six months ended June 30, 2021, new members registered to our platforms decreased by 0.6 million, or 15.2%, and 0.9 million, or 11.4%, respectively, compared to the same periods in 2020. Average paying subscribers during the three and six months ended June 30, 2021 decreased by 3.0% for both periods compared to the same periods in 2020. The decreases were primarily driven by declines in registration of the Zoosk brand.
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Monthly ARPU for both the three and six months ended June 30, 2021 remained relatively flat compared to the same periods in 2020.

Results of Operations

The following table shows our results of operations for the periods presented. The period-over-period comparison of our historical results are not necessarily indicative of the results that may be expected in the future.

Three Months Ended June 30,
2021 2020 $ Change % Change
Revenue $ 55,253  $ 56,527  $ (1,274) (2.3) %
Operating costs and expenses:
Cost of revenue, exclusive of depreciation and amortization 32,881  33,223  (342) (1.0) %
Sales and marketing expenses 1,152  1,185  (33) (2.8) %
Customer service expenses 1,902  1,938  (36) (1.9) %
Technical operations and development expenses 4,774  4,189  585  14.0  %
General and administrative expenses 7,096  8,340  (1,244) (14.9) %
Depreciation and amortization 2,298  2,332  (34) (1.5) %
Impairment of intangible assets and goodwill 32,086  —  32,086  100.0  %
Total operating costs and expenses 82,189  51,207  30,982  60.5  %
Operating (loss) income (26,936) 5,320  (32,256) (606.3) %
Other income (expense):
Interest income —  9  (9) (100.0) %
Interest expense (3,802) (3,395) (407) 12.0  %
Gain on foreign currency transactions 584  746  (162) (21.7) %
Other income (expense) (2) 200  (202) (101.0) %
Total other expense, net (3,220) (2,440) (780) 32.0  %
(Loss) income before income taxes (30,156) 2,880  (33,036) (1147.1) %
Income tax expense(1)
(18,871) (2,046) (16,825) 822.3  %
Net (loss) income $ (49,027) $ 834  $ (49,861) (5978.5) %

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Six Months Ended June 30,
2021 2020 $ Change % Change
Revenue $ 111,632  $ 114,184  $ (2,552) (2.2) %
Operating costs and expenses:
Cost of revenue, exclusive of depreciation and amortization 69,799  69,764  35  0.1  %
Sales and marketing expenses 2,203  2,240  (37) (1.7) %
Customer service expenses 3,763  4,013  (250) (6.2) %
Technical operations and development expenses 9,694  9,659  35  0.4  %
General and administrative expenses 15,415  15,223  192  1.3  %
Depreciation and amortization 4,588  4,653  (65) (1.4) %
Impairment of intangible assets and goodwill 32,086  —  32,086  100.0  %
Total operating costs and expenses 137,548  105,552  31,996  30.3  %
Operating (loss) income (25,916) 8,632  (34,548) (400.2) %
Other income (expense):
Interest income —  40  (40) (100.0) %
Interest expense (7,242) (6,852) (390) 5.7  %
Loss on foreign currency transactions (1,144) (207) (937) 452.7  %
Other income (expense) (18) 200  (218) (109.0) %
Total other expense, net (8,404) (6,819) (1,585) 23.2  %
(Loss) income before income taxes (34,320) 1,813  (36,133) (1993.0) %
Income tax expense(1)
(21,211) (3,141) (18,070) 575.3  %
Net (loss) income $ (55,531) $ (1,328) $ (54,203) 4081.6  %

(1) We identified an error related to the calculation of tax provision that impacted the comparative consolidated financial statements for the quarter ended March 31, 2020. Management evaluated these adjustments and concluded they were not material to any previously issued financial statements. For comparability, the prior period comparative figures that are presented herein have been revised to present the correct figures. Refer to Note 1 for additional information.

Comparison of Three and Six Months Ended June 30, 2021 and June 30, 2020

Revenue

Revenue during the three and six months ended June 30, 2021 decreased by $1.3 million, or 2.3%, and $2.6 million, or 2.2%, respectively, compared to the same periods in 2020. The decrease was attributable to the 3.0% decrease in the number of average paying subscribers related to Zoosk brand, partially offset by the increase in the core Spark brands.

Cost of revenue, exclusive of depreciation and amortization

Cost of revenue, exclusive of depreciation and amortization consists primarily of direct marketing expenses, data center expenses, credit card fees and mobile application processing fees. Cost of revenue during the three and six months ended June 30, 2021 remained relatively flat compared to the same periods in 2020.

Sales and marketing expenses

Sales and marketing expenses consist primarily of salaries for our sales and marketing personnel and expenses for market research. During the three and six months ended June 30, 2021, sales and marketing expenses remained relatively flat compared to the same periods in 2020.

Customer service expenses

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Customer service expenses consist primarily of third-party service fees and personnel costs associated with our customer service centers. The members of our customer service team primarily respond to billing questions, detect and eliminate suspected fraudulent activity, and address site usage and dating questions from our members. Customer service expenses remained relatively flat during the three months ended June 30, 2021 compared to the same period in 2020. During the six months ended June 30, 2021, customer service expenses decreased by $0.3 million, or 6.2%, compared to the same period in 2020. The decrease was mainly attributable to a reduction in personnel costs due to consolidation of customer service employee headcount.

Technical operations and development expenses

Technical operations and development expenses consist primarily of the personnel and systems necessary to support our corporate technology requirements as well as costs incurred in the development, enhancement and maintenance of our new and existing technology platforms. Technical operations and development expenses during the three months ended June 30, 2021 increased by $0.6 million, or 14.0%, compared to the same period in 2020. The increase was primarily driven by an increase in personnel costs due to higher headcount in the second quarter of 2021 compared to the second quarter of 2020. Technical operations and development expenses during the six months ended June 30, 2021 remained relatively flat compared to the same period in 2020.

General and administrative expenses

General and administrative expenses consist primarily of corporate personnel-related costs, professional fees, occupancy and other overhead costs. General and administrative expenses decreased by $1.2 million, or 14.9%, for the three months ended June 30, 2021, while it increased by $0.2 million, or 1.3%, during the six months ended June 30, 2021 compared to the same period in 2020. The decrease during the three months ended June 30, 2021 was primarily driven by a decrease in the business tax expense in San Francisco as the Company no longer has operations in the city and stock-based compensation expense. The increase during the six months ended June 30, 2021 was primarily driven by an increase in insurance and professional fees, partially offset by a decrease in the business tax expense in San Francisco and stock-based compensation expense.

Other income (expense)

Other expense, net, consist primarily of interest income and expenses, foreign exchange gains and losses, and other related finance costs. Other expenses, net, during the three and six months ended June 30, 2021 increased by $0.8 million, or 32.0%, and $1.6 million, or 23.2%, compared to the same periods in 2020. The increase in both periods was primarily related to an increase in interest expense on the deferred payment to Zoosk's shareholders due to an increase in the stated interest rate from 2% to 12% per annum, an increase in effective interest on borrowings under the Senior Secured Facilities Agreement, and losses on foreign currency transactions. During the three and six months ended June 30, 2021, interest expense on the deferred payment to Zoosk's shareholders increased $0.2 million and $0.4 million, respectively, compared to the same periods in 2020. Effective interest on borrowings under the Senior Secured Facilities Agreement during the three and six months ended June 30, 2021 increased $0.2 million and $0.1 million, respectively, as compared to the same periods in 2020. During the three months ended June 30, 2021, net foreign exchange gains decreased by $0.2 million compared to the same period in 2020. During the six months ended June 30, 2021, net foreign exchange losses increased by $0.9 million compared to the same period in 2020.

Impairment

During the second quarter of 2021, the Company lowered its financial expectations for the remainder of 2021 due to increased cyberattacks, delays in product initiatives and a more uncertain Covid-19 outlook. These factors constituted an interim triggering event as of the end of the Company's second quarter of 2021, and the Company performed an impairment analysis with regard to its indefinite-lived intangible assets and goodwill. For the quarter ended June 30, 2021, the fair value of the Spark reporting unit exceeded the carrying amount, and as a result, no goodwill impairment was recorded. For the Zoosk reporting unit, the Company recorded a goodwill impairment charge of $21.8 million. In addition, the Company recognized a Zoosk trademark impairment charge of $10.3 million.

See Note 4. Goodwill and Intangible Assets in the Notes to the Consolidated Financial Statements included in Item 1 of this quarterly report for further discussion of impairment.

Income tax expense

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Income tax expense was $18.9 million for the three months ended June 30, 2021 compared to $2.0 million for the three months ended June 30, 2020, which reflects an effective tax rate of (62.7)% and 69.2%, respectively. For the six months ended June 30, 2021 and 2020, the Company recorded income tax expense of $21.2 million and $3.1 million, respectively, which reflect an effective tax rate of (61.9)% and 159.3%, respectively. The increase in income tax expense was primarily driven by change in valuation allowance for U.S. deferred tax assets and impairment of goodwill and intangible assets.

See Note 3. Income Taxes in the Notes to the Consolidated Financial Statements included in Item 1 of this quarterly report for further discussion of income taxes.

Non-GAAP Financial Measures

We report our financial results in accordance with generally accepted accounting principles in the U.S. ("U.S. GAAP"). However, management believes that certain non-GAAP financial measures provide users of our financial information with additional useful information in evaluating our performance.

Adjusted EBITDA

Adjusted EBITDA is one of the primary metrics by which we evaluate the performance of our business, budget, forecast and compensate management. We believe this measure provides management and investors with a consistent view, period to period, of the core earnings generated from the ongoing operations and excludes the impact of items that we do not consider representative of our ongoing performance. This includes: depreciation and amortization, share-based compensation, asset impairments, gains or losses on foreign currency transactions and net interest expense, acquisition related costs and other costs. Adjusted EBITDA has inherent limitations in evaluating our performance, including, but not limited to the following:

•Adjusted EBITDA does not reflect the cash capital expenditures during the measurement period;
•Adjusted EBITDA does not reflect any changes in working capital requirements during the measurement period;
•Adjusted EBITDA does not reflect the cash tax payments during the measurement period; and
•Adjusted EBITDA may be calculated differently by other companies in our industry, thus limiting its value as a comparative measure.

Because of these limitations, you should consider Adjusted EBITDA alongside other financial performance measures, including net income and our other U.S. GAAP results. The following table reconciles Net (loss) income to Adjusted EBITDA for the periods presented:

Three Months Ended June 30, Six Months Ended June 30,
(in thousands) 2021 2020 2021 2020
Net (loss) income $ (49,027) $ 834  $ (55,531) $ (1,328)
Net interest expense 3,802  3,386  7,242  6,812 
(Gain) loss on foreign currency transactions (584) (746) 1,144  207 
Income tax expense 18,871  2,046  21,211  3,141 
Depreciation and amortization 2,298  2,332  4,588  4,653 
Impairment of intangible assets and goodwill 32,086  —  32,086  — 
Stock-based compensation expense 580  1,434  1,616  2,344 
Acquisition related costs(1)
—  673  —  1,464 
Other costs(2)
292  149  764  277 
Adjusted EBITDA $ 8,318  $ 10,108  $ 13,120  $ 17,570 

(1) Acquisition-related costs primarily consist of transaction costs, including legal, consulting, advisory fees, and severance and retention costs.
(2) Includes primarily consulting and advisory fees related to special projects, as well as post-merger integration activities and long-term debt transaction and advisory fees.

Liquidity and Capital Resources

Our ongoing liquidity requirements arise primarily from working capital needs, research and development requirements and the debt service. In addition, we may use liquidity to fund acquisitions or make other investments. Sources of liquidity are cash
23


balances and cash flows from operations and borrowings. From time to time, we may obtain additional liquidity through the issuance of equity or debt. As of June 30, 2021, we had cash and cash equivalents of $11.1 million.

As of June 30, 2021 and December 31, 2020, we had outstanding principal debt balance of $91.9 million and $104.7 million, respectively. We believe that we will continue to have adequate liquidity on hand to meet our payment requirement under the Loan Agreement in the amount of $6.3 million during the second half of fiscal year 2021. We are in compliance with all of our financial covenants with a net leverage ratio of 2.30 as of June 30, 2021. See Note 6. Long-term Debt in the Notes to the Consolidated Financial Statements included in Item 1 of this quarterly report for further discussion of our debt.

We believe that our current cash and cash flow from operations will be sufficient to meet our anticipated cash needs for financial liabilities, capital expenditures and contractual obligations, for at least the next 12 months. Our future capital requirements and the adequacy of available funds will depend on many factors and those set forth in Part II, Item 1A "Risk Factors" of our Form 10-K for the year ended December 31, 2020. We do not anticipate requiring additional capital; however, if required or desirable, we may utilize our Revolving Credit Facility or issue additional equity in the private or public markets. Under the Senior Secured Facilities Agreement, we are subject to various financial covenants including a monthly liquidity requirement and quarterly tests including guarantor coverage test, maximum leverage ratio and minimum asset coverage ratio. Additionally, it includes covenants that, among other things, restricts our ability and the ability of its subsidiaries to: incur additional indebtedness, create liens, engage in mergers or consolidations, sell or transfer assets, pay dividends and distributions and make share repurchases, make certain acquisitions, engage in certain transactions with affiliates, and change lines of business. We do not have any off-balance sheet arrangements as of June 30, 2021.

Cash Flows Information

The following table summarizes our cash flows for the periods presented:
Six Months Ended June 30,
(in thousands) 2021 2020
Net cash provided by (used in):
Operating activities $ 4,629  $ 7,207 
Investing activities (661) (1,951)
Financing activities (13,610) (9,319)
Net change in cash and cash equivalents $ (9,642) $ (4,063)

Operating Activities

Our cash flows from operating activities primarily include net loss adjusted for (i) non-cash items included in net loss, such as depreciation and amortization, impairment of goodwill and intangible assets, stock-based compensation and (ii) changes in the balances of operating assets and liabilities.

Net cash provided by operating activities was $4.6 million for the six months ended June 30, 2021, a decrease of $2.6 million compared to $7.2 million during the three months ended June 30, 2020. The decrease was primarily driven by an increase in net loss from $1.3 million to $55.5 million and the decrease in accounts receivable due to timing.

Investing Activities

Our cash flows from investing activities primarily include development of internal-use software, purchase of property and equipment and business acquisition.

Net cash used in investing activities was $0.7 million for the six months ended June 30, 2021, a decrease of $1.3 million compared to $2.0 million during the six months ended June 30, 2020. The decrease was primarily due to the cash paid for the Zoosk acquisition final adjustment surplus of $0.5 million during the six months ended June 30, 2020, and the additional capital expenditures of $0.8 million during the first six months of 2020.

Financing Activities

Our cash flows from financing activities primarily include changes in long-term debt.

Net cash used in financing activities was $13.6 million for the six months ended June 30, 2021, an increase of $4.3 million compared to $9.3 million during the three months ended June 30, 2020. The increase was primarily attributable to the fee paid
24


in connection with the execution of the Limited Waiver under Loan Agreement in March 2021 of $0.5 million and a higher mandatory prepayment made during the second quarter of 2021 compared to same period in 2020.

Recent Accounting Pronouncements

See Note 1 Basis of Presentation and Summary of Significant Accounting Policies in the Notes to the Consolidated Financial Statements included in Part I. Item 1. of this quarterly report for a discussion of recently issued and adopted accounting standards.

Critical Accounting Policies and Estimates

Please refer to Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operation, the “Critical Accounting Policies and Estimates” section of our Form 10-K for the fiscal year ended December 31,2020 ("2020 Form 10-K") for a full description of all of our critical accounting estimates. We believe there have been no new critical accounting policies and estimates, or material changes to our existing critical accounting policies and estimates during the three months ended June 30, 2021.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not applicable.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our Chief Financial Officer (our principal accounting officer) and Chief Executive Officer (our principal executive officer), we evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (Exchange Act)) as of the end of the period covered by this report. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on that evaluation, our management concluded that, as of June 30, 2021, due to the material weakness in our internal control over financial reporting previously identified in our 2020 Form 10-K which continues to exist, our disclosure controls and procedures were not effective.

Remediation Plan for Material Weakness in Internal Control over Financial Reporting

In connection with the audit of our consolidated financial statements as of and for the years ended December 31, 2020 and 2019, we identified material weaknesses in our internal control over financial reporting. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. Please refer to Part II. Item 9A. "Controls and Procedures" of our 2020 Form 10-K for a full description of the material weakness in our internal control over financial reporting and remediation plan.

Our remediation of the identified material weaknesses and the strengthening of our internal control environment is ongoing. We continue to focus on the design and implementation of processes and procedures to improve our new and existing controls and remediate our material weaknesses. We are committed to maintaining a strong control environment and believe that these remediation efforts represent continued improvements in our control environment. As we continue to evaluate and take actions to improve our internal control over financial reporting, we may determine it is necessary to take additional action to address control deficiencies or modify certain of the remediation measures. The material weaknesses will not be considered remediated, however, until the applicable controls operate for a sufficient period of time and management has concluded, through testing, that these enhanced internal controls are operating effectively. We will continue to monitor and evaluate the effectiveness of our internal control over financial reporting in the areas affected by the material weaknesses. Our management is committed to remediating the material weakness in a timely manner.

Changes in Internal Control over Financial Reporting

25


There has been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

26


PART II
Other Information

Item 1. Legal Proceedings

For information that updates the disclosure set forth under Part I. Item 3. Legal Proceedings in our 2020 Form 10-K, refer to Note 7 to the Consolidated Financial Statements in this Form 10-Q.

Item 1A. Risk Factors

Please refer to Part I. Item 1A. Risk Factors of our 2020 Form 10-K for a discussion of our risk factors. The risks and uncertainties are not limited to those set forth in the 2020 Form 10-K. Additional risks and uncertainties that we are unaware of, or that we currently believe are not material, may also become important factors that affect us. We believe there have been no new risk factors, or material changes to our existing risk factors, during the three months ended June 30, 2021.


Item 2. Recent Sales of Unregistered Securities

None.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

27


Item 6. Exhibits

Incorporated by Reference
Filed/Furnished
Herewith
Exhibit
Number
  Description   Form File No.
Exhibit
Filing Date
  Exhibit No.
3.1 Filed
10.1 8-K 001-38252 6/17/21 10.1
10.2 8-K 001-38252 6/17/21 10.2
10.3 Filed
31.1 Filed
31.2 Filed
32.1
32.2
101.1
The following financial statements from the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2021, formatted in Extensible Business Reporting Language (“XBRL”):
•unaudited condensed consolidated balance sheets;
•unaudited condensed consolidated statements of operations and comprehensive loss;
•unaudited condensed consolidated statements of shareholders’ equity;
•unaudited condensed consolidated statement of cash flows; and
•notes to unaudited condensed consolidated financial statements.
X
** The certifications furnished in Exhibits 32.1 and 32.2 hereto are deemed to accompany this Form 10-Q and are not deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, nor shall they be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act.


28



SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
    Spark Networks SE
       
Date: August 23, 2021
  By: /s/ Eric Eichmann
      Eric Eichmann
      Chief Executive Officer
(Principal Executive Officer)
Date: August 23, 2021
By: /s/ David Clark
David Clark
Chief Financial Officer
(Principal Financial Officer and Principal Accounting Officer)
 

 
 
29
Satzung Artlclea ofAssocladon der of Spark Networt® SE Sparte NetworksSE 1. Abschnitt. Allaemalna Bßstfmmui Söcäon 1. Qendml Provlriofls 51 §1 Rechtsfonn; Ptnna, SHz und Geschäftsjahr Legal Fonn: Corporata Nam®, Reglstered Office and Flnanctol Year (1) Die Gaellschaft hat die Rechtsform einer (1) The Company has the legal form of a Europäischen Gesellschaft (Sotfefes European Company (Sodetas Euivpaea. SE) und führt dte Rrma Eumpaea. SE) and has the corporate name Spark Networks SE.' Spark Networkc SE. (2) Sitz der Gesellschaft Ist Mönchen, (2) Thereglsferedofflceofthe Company fe Deutschland, (n Munlch. Gennany. (3) Das Geschöftejahr der Gesellschaft tet das (3) Theflnandalyearofthe Company Is Kalenderjahr, thecalendaryear. §2 Bekanntmachungen; Informaäonsöbermlttlung $2 Noäcett; Conveyance of-bifönnatlon (1) Die Bekanntmachungen der Geseltechaft (1) The notioes of the Company shall only werden ausschließlich Im Bundessnzelgsr be publtshed In the Fetferal Gazette veröffentUcht, sofern das Gesetz nicht etwas (Bundosamelgei). unless spedfied anderes bestimmt othenrtse by (aw. Mt)2.3032.S33()vl uuiiinidii»«ni>iiMiiii*.niiBteiwu«Bt«aui bh»»i.№.k»»ti lUMrtlCTUU

 
§3 Gegenstand des Unternehmens (1) Gegenstand des Unternehmens Ist die Beteiligung an und die Gründung sowie die Leitung von Unternehmen oder die Verwaltung von Be- telligungen an Unternehmen sowie die Bereitstellung von Verwaltungs- und Holdingsfunktfonen für diese Beteiligungsunternehmen, die in folgenden Geschäftsfeldern oder Teilbereichen davon tätig sind: der Betrieb und die Erbringung von Onllnediensten in den Bereichen Partnervermittlung, Datlng und Kontaktanbahnung; §3 Object and purpose ofthe Company (1) The object and purpose of the Company is the Investment in äs weil äs the establishment and managing of companies or the administration of equity interests in companies äs weil äs the Provision of administrative and holding functions for |ts affiliated companfes (hat operate [n the following business areas or parts thereof: the Operation and the Provision of sen/ices in particular in the areas of matchmaking, dating and contad initiation; W12-S33Qvl riiUrtut. A. roeu. l»4un<Miht«wurtwu. N t. uinit—ruiiitmruiuaai

 
die Enhvicklung, der Betrieb und das Vermarkten von Software, die Wartung von Kontakt- netzwerken, das Design und die Herstellung von Computer- Programmen zur Datenver- arbeitung und -Verfolgung; the development. operaüon and markettng of Software, main. tenance of networks of contacts, deslgn and creiation of Computer programs Tor data processing and tracking; das Oesign und die Errichtung von Homepages und Internet- serten, Kommunikatfonsdiensten und Unterhaltungsdiensten; the design and creaüon of homepages and interne» web sites, communicatfon Services and entertalnment servtces; das Veranstalten und Durchführen von gesellschafr lichen Events, Werbungs- und Vermarktungsdiensten und E- Commerce Tätigkeit. the arranging and conductlng of social events, advertlsing and marketing Services and e-commeroe actlvfty. Ausgenommen sind Tätigkeiten, die einer Erlaubnlspflicht nac^i dem Kapltalanlagegesetzbuch (KAGB) oder dem Kredltwesengesetz (KWG) unterliegen. (2) Die Gesellschaft kann in den genannten Geschäftsfeldem auch selbst tätig werden. Die Geseüschaft Ist berechtigt, alle Geschäfte und Ma&nahmen vorzunehmen, die mit den vorstehenden Tätigkeitsgebieten in Zusammenhang stehen oder sonst geeignet sind, dem Gesellschafts- zweck unmittelbar oder mittelbar zu dienen Activiäes wh(ch requlre approval under the Capital Investment Code (KAGB) or the Banklng Act (KWG) are excluded. (2) The Company is entitted to carry out itself activitles and operations In the aforementtoned IInes of buslness. The Company is entitted to carry out all transactions and actions which are related to the aforementioned lines of business or otherwise appropriate to serve directly or fndlrectty the objects of the Company. Za

 
(3) W (3) unä^BetriebsstStten (m in- und Ausfand errichten, andere Unteroehmen im ln."uni A"sland. 8rün<ten- «weAen oder sich "an Ihnen beteiligen eowfe wtohe Unternehmen' Idten. Der Untemehmw8gegen8tend"von Tochter- und BeteiKgungsüntemehmen darf auch Gegewtfindti außeriialb der Grenzen desAt»safeE (l)umfeB sen. Die Geselfechaft kann ihre Tätigkeit auf einen oder_ ein2e"» der <n Absatz (1) genannten Geigenstände beschränken. Dte Geseflschaft (st ferner berechtigt. Ihre Ta keit anz oder telhwise mittelbar durch. ^Company may ̂ establteh branch s In ' and abroad, may. estabtfeh or P^cha^other Cortpanies in Gennan'y S^ad^or hoM -Partidä"8 Inand manage such'othw corn.panfes- the bu8(nws Purposo"rf subsld»aries and compwtw in whteMhe Company holds a parttdpaBng interest mey also Indude (bies o/buslnesa other .than those nefierenced to In para. (1). Th9 Company may limft Ks busln&s acttvfty to one or sewrel ofthe llnesof business refepenoed to in para. (l). The Company further is enätteä to cany out te busfness act Inwholfeorfn' »«12-3032.030VI .A.ns^n^n<uw^artAff»,>hi»««, tiw^uui

 
Tochter-, BeteUjgungs- und Gemeinschateunteinetmen . aualuüben. sfe tenn Insbesondere (hren Betrieb ganz oder tettwelse an von Ihr abhängige Untertiehmen Obertassen unä/oöw ganz oder telhweise auf von Ihr abhä^ige Unternehmen ausgliedern. Sie kann sieh audi auf dte TSägkeit einer gwchfifteteitenden Hotellng und/oder dte sonstige Verwaltung eigenen Vermögens beschränken. Indlrecüy. flwough subsldlaries, through ooftipaniäs in whfch the Company holds a patidpding (ntwBst ahd throughjoW ventures. In partcular, tt may transfer and/orspfn offlts operaBons In whote or in part to companles controlled by ttie Company, The Company may also Ibnlt tts buslness to acäng es a manaölng holding Company and/or restrict Itseif to adminjstering te own assets. ?i A«??tf»nWT Grundka^^. 1, ^^fc^ SWWWf, ?h?ra Canlta», ̂ p^ §4. 84 Höheund EInteUvng de. Grundkapltats Amountsnd SubdMaton oTthe Share Capttal (l) Das Grundkapital der Gesellschaft beträgt EUR 2.661.385,00 (in Worten; zwei Millionen sechshundertelnundsechzig- tausend dreihundertfünfundachtzig Euro). (l) The share capital ofthe Company amounts to EUR 2,661,385.00 (in words; Euro two million slx hundred sixty one thousand three hundred eightyflve). {2} Das Grundkapital ist eingeteilt in 2. 661. 385 auf den Namen lautende Stückaktien. (2) The share capital of the Company is subdivided into 2,661,385 reglstered no-par value shares

 
(3) Der Verwaltungsrat ist ermächtigt, das Grundkapital der Gesellschaft bis zum 31. Oktober 2022 (einschließlich) gegen Bar- und/oder Sacheinlagen eirtmaltg oder mehrmals um insgesamt bis 2U EUR 593.481,00 durch Ausgabe neuer auf den Namen lautender Stückaktien zu erhöhen (Genehmigtes Kapital 2017). Der Verwaltungsrat ist ermächtigt, den weiteren In- halt der Aktienreehte und die Bedingungen der Aktienaus- gaöe festzulegen. Dabei karm die Gewhmberecktigung der neuen AWen auch abwei- chend von § 60 Abs. 2 AktG ctusgestoStet werden; die neuen Aktien können insbe- simdere auch mit Gewtnnbe- rechtigung ab Beginn des ih- rer Ausgabe vorangehenden Gesch^ftsfahres ausgestattet werden, wefm im Zeitpunkt der Ausgabe der neuen Aktien ein Oewiiwverwendungsbe- schluss der Hmytwrsamm- limg über den Gewinn dieses Geschäftsjahres noch nicht gffasst worden ist. (3) The Administrative Board is au- thorized, to tncrease the Compan/s share capital on one' or more ocüisions on or before October 31, 2022, by not more than in total EUR 593,481.00 in return for contributfons in cash and/or in kind, by issuing new registered no-par value shares (Authorized Capltal 2017). The Administrative Board is authorized to define the further content ofthe shareholder rigfüs and the terms and condttians for the new steck issuartce. Thereby, the profil participation rfghts ofrhe new shares mqy be determined in dewiation from section 60 (2) of the Germeaz Stock Corporation Act: inpartiwlar, the new shares may carry proßt participation rightsß-om the beglmiitig ofthe ßsccd yecar preceäing thetr issu- wwe pravided thctt the share- holders' meeting hos not cäready resohedon the proflt partictpa- tionfor suehßsccüyear when the new shares ccre issued Den Aktionären ist grundsätz- lich das gesetzliche Bezugs- recht emfdie neuen Aktien zu gewähren. Das Bezugsrecht ftann detbei auch gam oder teilweise als nüttelbares Be- zugsrecht im Sinne von § 186 Abs. 5 Satz l AktG ousgestal- tet werden. As a rule, the shareholders shall be granteäthe statutory preemp- ttve rights to the new shares. The preempttve rights can also be granted by -wey of indirect preempttve rights -within the mecsrüng qfsection 186 (5) sen- tence l ofthe Germern Stock Cor- porcitionAct. #№12. 3032<33ad A.wnna i»<BU(»n<u<ianh*iimi l

 
Das Sezugsrecht der. Aktlo- näre bei Äuwtüzwig des Oe- nehmtgten KtyUaJs 2017 wr Erliegt Jedoch folgenden Se- achrSnhmgen: a) DasSezugsrechtderAk- tionäre isf bei Kcyitaler- höhmgen gegen Barein- lagen ausgeschlossen, wen» äe Aktien vnter Bezvgnahme auf diese Bestimmung zu eüiem Preis ausgegeben wer' der bestehenden Aktien der Gesellsehtft nicht wesentV.ch wsterschrei- tet und die in Ausmü- sung dieser &Tnäc}ai- S"ng zum Bezugsrechts- cwschJuss awgegsbe- nen Aktien insgesamt 10 % des Gnmdktpitals nicht Sberschreften. und -war werfer ö» &(ipunfe des WWsamwerdens noch im Zeitpunkt der AusübuMg dieser £r- mächtigung. AhBörsen- preis gilt auch der Preis eines an <kr NTSEAme- rtcan LLC notierten Americccn Deposltory Shares (»ADS"), muW. pliziert mit der Änzaü der ADSs, die eine Ahie repräsentieren. ffwever, the shareholders' preenyfive rights are subject to the foüawlng restrictions -when utiliziiig the Avfhorized. W17; a) The shareholders 'preemp- tfve rfghts are excluäed wlth respecf to capltal in- creases against cash con- tributionspyoviekd, tfuü the shtves ca'e issued. with ref. erence to ffüs Provision, at an issueprice which is not substantiaüy below the stock exchmge price ofthe existfngshares ofthe Com- pwy andthat the skares is- sued wider this aiü/wHm- ft'on for the exclvsion of preenyttve rtghts in total do not exceed 10% qfthe registered share ciyital, ncsmety neither at the time Ms cwthorizatton becomes ^ective nor ai the time of the vtllization of this au- thorization. 7%e term "stock exchange price" 'my oüo refer to the price o fern Americtin Deposttory Shares ("A1SS") iisted on the NVSE ̂ nerfcan LLC. m^rtpUedby the mmber of ^DSSs representing one share. <W2-3CSM330vl t*<»«BCMIU^8ahh

 
b) DasßessugsrechtderAh- tionäre isst ferner bei Ka- pita!erhöhungen gegen Bar- wid/oder-Sfwhefn-, kigen ausgeschlossen, wenn &e neuen Aktien wtfer Bezugnafaw ai<f ^sse Besttmmiftg im Rahnen wn Beteili- gwngs- oder Vergüfmy- progrcanmen bsw, Setei- Ugungs- oder Yergü- tungsifstrumenten an Personen. <ße in einem Arbeits- oder Anstel' Itingsverhältfüs zur Ge- sellschqft oder zu einem von ifv abhängigen oder in ihrem (mittelbaren) Mehrheitsbesitx stehen- den Unternehmen ste- hen, oder an gesch^fts- ftlhrende Direktoren der (Sesellsehqft vnd/oder Mitglieder von Ge- schäft^fithnmgen von abhängigen oder im (mittelbaren) Mefvheits- besitz stehenden Unter- nehmen ochr. an Dritte, die diesen Persomn das wirtschaftliche Eigen- turn und/oder die •wfrt- schcfftlichenFrQchte aus den Aktien Sberlassen (insbesondere oucA durch Lieferung von ADSs), wsgegeben wer- den sollen. Die neuen AKtfen können an die ge- normten Personen dabei insbesondere auch zu ei- nern vergünstigten Aus- ga&ebetrag ftnsbesem- b) TTie sharekolders'preewp- tiw rights are fio^her ex- chide<lwith respeot to cap- ital tncreevses against can' tributions in cash muVor in än4 ifthe. new shves, with rvference to üiü provislon. shall be isswd in.the con- text ofemployeepartlcipa- lion cmä/or remwwation programs or instrwnents to employees ofthe Company or conyxmies controlled by the Conywy ar coifywnies in whlch the Cojnpcmy holds an ffndirect) nu^orüy interest, or to Memaging Directors ofthe Cowywny and/or to members ofthe maw^ement ofconycmies corürolled by the Cimywny ar companies in which the Company Iwlds an ftndi- rect) mcfforlty interest or to fhlrdparties -which trfmsfer the economic property /wirtschaftliches Eigen- tua^ andfor the eeonomic benefltsjrovi ffw shcwes to . the mentioned persow fln- cluäing, tn partieulw, ty delivertng ADSs). 7%c new shares mcy, in pctrtleidar, also be issued to the men- tlonedpersons cffi a redwxd fssue price ffndzuüng, tn parücular, at the lawest is- suepricepermiss&le under section 9 parcL l of the Öerman Stock Corporation Act) cmd/or agcünst contri- toft'on o/" remuneratiofi elaims w stmllar Claims. ftUlM032>S3iQ«1 A.roua»4»iati

 
<fere ciuch zum gertngs- ten Äusgabebeirag un Sinne des $9 Abs. l ^tG) unä/oSer gegen Einbringung von Vergü-. ivngs-. oder eßwdichen ^wprüchen ausgegeben werfien. Die neuen Ak- tien können ferner auch unter Zwlschenwhal- tung eines Kredütnsti- tuts oder eines nach § 53 Abs. I Satz l oder § 53b ^bs. l Sats l oder Abs. 7 KtfV tätigen Untemeh- mens ausgegeben wer- den, das diese Aktien mit der Vefj^llchtung über- nimmt, sie bzw. ADSs, die Affien repräsentie- ren, an die vorstehend genannten Personen su li^ßrn bzw. ihnen anzu- bieten. Die in Avsfwt- zung dieser Bnnächti- gifftg zum Bemgsrechts- awscMiiss ausgegebe- mn Aktien dürfen insge- samilOKdesOrundka- pltals nicht üb'erscfrel- • ten, wvä swar -wedw im . Zei^unfo des Wlrksam- werdfew nych im Zeit- punkt derAvsübuns die- ser Ermächtigung. Fwthemwre, the new shares mey also be issued ffircwgh a aredü institutfon W a ewiywy öperattng in accordawe wühsection 53 (l) sentence l or section 53b (l) sentence l ar(7)of the Oerman Bcmtdng Act <K1VG} whlch asswnes these shgres subfect to an Obligation to Oliver or of- fer them or ADSs repre- senting the shwes to the persons mentiofwd above. Tke shca-es issueet' vnäer <%te authoriscttion far the exclvsion of preempttve rtghts mcy in total mt ex- wedJOy» ofthe registered share capital, namely nei- ther tu the time this avthör' ization becomes effective nor at the time ofihe utlli- zation ofthfs auüwrization. Der Verwaltimgsrat ist darüber hiiwus ermäch- tigt. ctosSesussrechtder Aktionäre (auch in Kom- bination mit einem Be- zugsrechtsausschluss nach vorstehend Ut. e) und/oder Ut. b)) nach näherer Maßgabe der folgenden Besftmmun- .gen auch in folgenden f'äilen •auszuse/Seßen,' c) Furthermore, the Ädmüiis- trattve Board is (wthorized, subject fo the foWcwtng provisions. to excbtde the shea-eholders' preemptive rights Calso by combinivg svch exdlisions with an ex- clusion of' preenyitfve rights accorälng to Zu. a) tmä/or lit, b) above) also in thefoHawiry cases: \

 
^- i. Der Yerwaltungsrat ist ermächligt, Spit- zenbeträge wm Be- zugarecht der 'Aktio- märe auszwiehmen vnd das ßesvgsrecht der Ahion^-e auch Insoweit ccuszuschlie- ßen, -wie dies erfor- derlfchist. vmdenln- habem bzw. Gläubi- ^em von Wondhmgs- oder Optionsreehten aus Wandel- oder Qptiofuschuldver- sehreibungen, die von der OeseHschaft oder einem in- oder aus- ländlichen Vntemeh- mw, an dem die Ge' Seilschaft wimiitelbar oder mittelbar mit der Meh-heü der Stirn- menwi3räes Kcpifals beteiligt ist, ausgege- ben vhwiw oder wer- den, bzw, den hieraus im Falle eines eige- nen Wcmdlungsrechts der Oesellschsft Ver- pflichteten ein Be- zugsrecht in dem Um- fcms m gewähren, •wie es ihnen nach Ausübung der Wand' lungs- oder Options- rechte bsw. nach &- fiülung einer Wand- Jwtgs- oder Optiow- pflieht zustünde. /. The Athünistratfve Board is auüwrized to exclude. the sherehold' ers' preenyttve rights regardfng jractional • ammoüs cmd also to ex- clude the shareholders' preempttve righfs to tke extent it is reqvired in or<fer ta gränt to holders or credttors, respec- tfvely, ofwnversim ar Option rtghts ccttcshed to convertible and/or ap- tion bands. ihat are ar were issued by the Com- pcsiy or a ncctiondl or foreign svbsidlary in which the Compccry ei- ther directfy m indi' rectty holds a majority in tenns ofvoting rights fmd capüal, or, in ease of an wwn conversion rtght ofthe Conyany, to holders or creditors, re- specttvely, belng obll- gated thereby, preemp- Ifve rights to tfie extenl they would be entiüed to t^ier exercisin^ the con- Version or optton rights or öfter ßäfilUng a con- Version or Option obli- gation, respecttvety. M8l2-3032-S330vI lA.nnmunäiu»

 
il. Ser Vffiwed!Ko^sr<ü. ist ferner ermäeh- tigt, bei Stpftoler- SacheMctgen-^tns- befonäere mfn ^vessk <ks £rww6s 'von Ui^ersehmen, URtef»ehme«steflen oder BetSWgungen m'Vntem^meh, im Kahmen von Ünter- nelsne'Rszvscanmen- schlössen' und/oder zum Z-wecke des Er- •werbs sonstiger Vermögensgegen- stände einscfüieß- lich Sechten unä Fordenmgen - das Sesugsreüht der Ak- tionäre ouszftschlie- ßen. . ft Ädäittow^fy, the M- mtnistrceSw Soca-d is aütlwHswI to exdude the shorefioldaf-f' yewyÜM rfg^tf yft^» inereeat^ Ihe share cepital *i exchmge for contrüwtiow in Ünä, in poytiwlto- № acgutre cospwües, parts of consievües or sfuyp- AoAäivgT, ̂ ffie contoct af jtitnt ventwes and mergers and/or for the ptapose of acgutring orker assets tmluding rights omd elaims, »WitWsa^amvi. >t. *. reti!iBi»<»adBW 10

 
(4) Der Verwaltungsrat ist ermächtigt, das Grundkapital der Gesellschaft bis zum 28. Juli 2025 gegen Bar- und/oder Sacheinlagen einmalig oder mehrmals um bis zu insgesamt EUR 266. 138,00 (in Worten: zweihundertsechsundsechzig- tausendeinhundert-achtunddreißig Eure) durch Ausgabe von bis zu 266. 138 neuen, auf den Namen lautenden Stückaktien zu erhöhen (Genehmigtes Kapital 2020/1). Der Verwaltungsrat ist ermächtigt, den weiteren Inhalt der Aktienrechte und die Be- dingungen der Aktienausgabe festzulegen. Dabei kann die Gewinnberechtigung der neuen Aktien auch abweichend von § 60 Abs. 2 AktG ausgestaltet werden; die neuen Aktien können insbesondere auch mit Ge- winnberechtigung ab Beginn des ihrer Ausgabe vorangehenden Geschäftsjahres ausgestattet werden, wenn im Zeitpunkt der Ausgabe der neuen Aktien ein Gewinnver- wendungsbeschluss der Hauptversam- mlung Ober den Gewinn dieses Geschäfts- Jahres noch nicht gefasst worden ist. Den Aktionären ist grundsätzlich das gesetzliche Bezugsrecht auf die neuen Aktien zu gewähren. Das Bezugsrecht kann dabei auch ganz oder teilweise als mittelbares Bezugsrecht im Sinne von § 186 Abs. 5 S. 1 AktG ausgestaltet werden. Das Bezugsrecht der Aktionäre bei Ausnutzung des Genehmigten Kapitals 2020/1 unterliegt jedoch folgenden Beschränkungen: a) Der Verwaltungsrat ist ermächtigt, das Bezugsrecht der Aktionäre bei Kapital- erhöhungen gegen Bareinlagen aus- zuschließen, wenn die Aktien unter Bezugnahme auf diese Bestimmung zu einem Preis ausgegeben werden, der den Börsenpreis der bestehenden Aktien der Gesellschaft nicht wesentlich unterschreitet und die in (4) The Administrative Board is authorized to increase the Company's share capital on or before 28 July 2025 by not more than in total EUR 266,138.00 (in words: two hundred sixty-six thousand one hundred thirty-eight Euro) by issuing up to 266, 138 new registered no-par value shares on one or several occasions against contributions in cash and/or in kind (Authorized Capital 2020/1). The Administrative Board is authorized to define the further content of the shareholder rights and the terms and conditions for the new stock issuance. Thereby, the profit participation rights of the new shares may be determined in deviation from See. 60 (2) German Stock Corporation Act; in particular, the new shares may carry profit participation rights from the beginning of the fiscal year preceding their issuance provided that the General Meeting of Shareholders has not yet resolved on the profit participation for such fiscal year when the new shares are issued. As a rule, the shareholders shall be granted the statutory subscription rights to the new shares. The subscription rights may also be fully or partially granted by way of indirect subscription rights within the meaning of See. 186 (5) sentence 1 German Stock Corporation Act. However, the shareholders' subscription rights are subject to the following restrictions when utilizing the Authorized Capital 2020/1; a) The Administrative Board is authorized to exclude shareholders' subscription rights with respect to capital increases against cash contributions provided that the shares are issued, with reference to this Provision, at an issue price which is not substantially below the stock exchange price of the existing shares of the Com an and that the shares

 
Ausnutzung dieser Ermächtigung zum Bezugsrechtsausschluss ausgege- benen Aktien insgesamt 10% des Grundkapitals nicht überschreiten, und zwar weder im Zeitpunkt des Wirksam- Werdens noch im Zeitpunkt der Ausübung dieser Ermächtigung. Als Börsenpreis gilt auch der Preis eines an der NYSE American LLC notierten American Depository Shares („ ADS "), multipliziert mit der Anzahl der ADSs, die eine Aktie repräsentieren. Auf die Begrenzung von 10% des Grund- kapitals ist der anteilige Betrag des Grundkapitals anzurechnen, (i) der auf Aktien entfällt, die während der Lauf- zeit des Genehmigten Kapitals 2020/1 aufgrund einer Ermächtigung zur Veräußerung eigener Aktien gemäß §§ 71 Abs. 1 Nr. 8 S. 5, 186 Abs. 3 S. 4 AktG unter Ausschluss eines Bezugsrechts veräußert werden; (ii) der auf Aktien entfällt, die zur Be- dienung von Bezugsrechten oder in Erfüllung von Wandlungs- bzw. Optionsrechten oder -pflichten aus Wandel- und/oder Optionsschuldver- Schreibungen, Genussrechten und/ oder Gewinnschuldverschreibungen (bzw. Kombinationen dieser Instru- mente) (zusammen „Schuldverschrei- bungen") ausgegeben werden, sofern die entsprechenden Schuldverschrei- bungen wahrend der Laufzeit des Genehmigten Kapitals 2020/1 in entsprechender Anwendung von § 186 Abs. 3 S. 4 AktG unter Ausschluss des Bezugsrechts der Aktionäre ausge- geben werden; sowie (iii) der auf Aktien entfällt, die während der Laufzeit des Genehmigten Ka- pitals 2020/1 auf der Grundlage anderer Kapitalmaßnahmen unter Ausschluss des Bezugsrechts der AKtlonare in ents rechender An- issued under this authorization for the exclusion of subscription rights in total do not exceed 10% of the registered share capital, neither at the time this authorization becomes effective nor at the time of the utilization of this authorization. The term "stock exchange price" may also refer to the price of an American Depository Share ("ADS") liste'd on the NYSE American LLC, multiplied by the number ofADSs representing one share. The 10 % share capital limit shall include the proportionate share capital amount attributable to (i) shares sold during the term ofthe Authorized Capital 2020/1 on the basis of an authorization to seil treasury shares pursuant to Sees. 71 (1) No. 8 sentence 5, 186 (3) sentence 4 German Stock Corporation Act under exclusion of subscription rights; (ii) shares that are issued to fulfill subscription rights or conversion or Option rights or obligations arising from convertible bonds and/or bonds with warrants, profit participation rights and/or participating bonds or bonds with warrants or a combination ofthese Instruments (collectively "bonds"), provided that the corresponding bonds are issued during the term of the Authorized Capital 2020/1 in analogous application of See. 186 (3) sentence 4 German Stock Corporation Act under exclusion of shareholders' subscription rights; äs weil äs (iii) shares issued during the term of the Authorized Capital 2020/1 on the basis of other capital measures excluding shareholders' subscription rights in analogous application of See. 186 (3) sentence 4 German Stock Corporation Act.

 
Wendung von § 186 Abs. 3 S. 4 AktG ausgegeben werden. b) Der Verwaltungsrat ist ferner ermächtigt, das Bezugsrecht der Aktionäre bei Kapitalerhöhungen gegen Bar- und/oder Sachein lagen auszuschließen, wenn die neuen Ak- tien unter Bezugnahme auf diese Bestimmung im Rahmen von Beteiligungs- oder Vergütungspro- grammen bzw. Beteiligungs- oder Vergütungsinstrumenten an Perso- nen, die in einem Arbeits- oder Anstellungsverhältnis zur Gesellschaft oder zu einem von ihr abhängigen oder in ihrem (mittelbaren) Mehrheitsbesitz stehenden Unternehmen stehen, oder an geschäftsführende Direktoren der Gesellschaft und/oder Mitglieder von Geschäftsführungen von abhängigen oder im (mittelbaren) Mehrheits-besitz stehenden Unternehmen oder an Dritte, die diesen Personen das wirtschaftliche Eigentum und/oder die wirtschaftlichen Früchte aus den Aktien überlassen (ins-besondere auch durch Lieferung von ADSs), ausgegeben werden sollen. Die neuen Aktien können an die genannten Personen dabei insbesondere auch zu einem vergünstigten Ausgabebetrag (insbesondere auch zum geringsten Ausgabebetrag im Sinne des § 9 Abs. 1 AktG) und/oder gegen Einbringung von Vergütungs- oder ähnlichen Ansprüchen ausgegeben werden. Die neuen Aktien können ferner auch unter Zwischenschaltung eines Kreditin- stituts oder eines nach § 53 Abs. 1 S. 1 oder § 53b Abs. 1 S. 1 oder Abs. 7 KWG tätigen Unternehmens ausge- geben werden, das diese Aktien mit der Verpflichtung übernimmt, sie bzw. ADSs, die Aktien repräsentieren, an die vorstehend enannten Personen b) The Administrative Board is further authorized to exclude shareholders' subscription rights with respect to capital increases against contributions in cash and/or in kind, ifthe new shares. with reference to this Provision, shall be issued in the context of employee participation and/or remuneration programs or Instruments to employees of the Company or companies controlled by the Company or companies in which the Company holds an (indirect) majority interest, or to Managing Directors of the Company and/or to members of the management of companies controlled by the Company or companies in which the Company holds an (indirect) majority interest or to third parties which transfer the economic property (wirtschaftliches Eigentum) and/or the economic benefits from the shares to the mentioned persons (including, in particular, by delivering ADSs). The new shares may, in particular, also be issued to the mentioned persons at a reduced issue price (including, in particular, at the lowest issue price permissible pursuant to See. 9 (1) German Stock Corporation Act) and/or against contribution of remuneration Claims or similar Claims. Furthermore, the new shares may also be issued through a credit institution or a Company operating in accordance with See. 53 (1) sentence l or See. 53b (1) sentence 1 or (7) German Banking Act (KWG) which assumes these shares subject to an Obligation to deliver or offer them or ADSs representing the shares to the persons mentioned above. The shares issued under this authorization for the exclusion of

 
zu liefern bzw. Ihnen anzubieten. Die in Ausnutzung dieser Ermächtigung zum Bezugsrechtsausschluss ausge- gebenen Aktien dürfen insgesamt 10 % des Grundkapitals nicht über- schreiten, und zwar weder im Zeit- punkt des Wirksamwerdens noch im Zeitpunkt der Ausübung dieser Er- mächtigung. c) Der Verwaltungsrat ist darüber hinaus ermächtigt, Spitzen betrage vom Be- zugsrecht der Aktionäre auszunehmen und das Bezugsrecht der Aktionäre auch insoweit aus-zuschließen, wie dies erforderlich ist, um den Inhabern bzw. Gläubigem von Wandlungs- oder Optionsrechten aus Wandel- oder Optionsschuldverschreibungen, die von der Gesellschaft oder einem in- oder ausländischen Unternehmen, an dem die Gesellschaft unmittelbar oder mittelbar mit der Mehrheit der Stimmen und des Kapitals beteiligt ist, aus- gegeben wurden oder werden, bzw. den hieraus im Falle eines eigenen Wandlungsrechts der Gesellschaft Verpflichteten ein Bezugsrecht in dem Umfang zu gewähren, wie es ihnen nach Ausübung der Wandlungs- oder Optionsrechte bzw. nach Erfüllung einer Wandlungs- oder Optionspflicht zustünde. d) Der Verwaltungsrat ist ferner er- mächtigt, bei Kapitalerhöhungen gegen Sacheinlagen - insbesondere zum Zweck des Erwerbs von Unter- nehmen, Untemehmensteilen oder Beteiligungen an Unternehmen, im Rahmen von Unternehmenszusam- menschlüssen und/oder zum Zwecke des Erwerbs sonstiger Vermögens- gegenstände einschließlich Rechten und Forderungen - das Bezugsrecht der Aktionäre auszuschließen. subscription rights may in total not exceed 10% of the registered share capital, namely neither at the time this authorization becomes effective nor at the time of the utilization of this authorization. c) Furthermore, the Administrative Board is authon'zed to exclude the shareholders' subscription rights regarding fractional amounts and also to exclude the shareholders' subscription rights to the extent required in order to grant to holders or creditors, respectively, of conversion or Option rights attached to convertible and/or Option bonds, that are or were issued by the Company or a national or foreign subsidiary in which the Company either directly or indlrectly holds a majority in terms ofvotlng rights and capital, or, in case of an own conversion right of the Company, to holders or creditors, respectively, being obligated thereby, subscription rights to the extent they would be entitled to after exercising the conversion or Option rights or after fulfilling a conversion or Option Obligation, respectively. d) Additionally, the Administrative Board is authorized to exciude the shareholders' subscription rights when increasing the share capital in exchange for contributions in kind, in particular to acquire companies, parts ofcompanies or shareholdings, in the context ofjoint ventures and mergers and/or for the purpose of acquiring other assets including rights and Claims.

 
(5) Das Grundkapital ist um bis zu EUR 1.330.692,00 (in Worten: eine Million dreihundertdreißigtausendsechshundert- zweiundneunzig Euro) durch Ausgabe von bis zu 1, 330.692 neuen, auf den Namen lautende Stückaktien bedingt ertiöht (Be- dingtes Kapital 2020/1). Die bedingte Kapitalerhöhung dient der Gewährung von auf den Namen lautenden Stück-aktien bei Ausübung von Wandlungs- oder Options- rechten (oder bei Erfüllung entsprechender Wandlungspflichten) oder bei Ausübung eines Wahlrechts der Gesellschaft, ganz oder teilweise anstelle der Zahlung des fälligen Geldbetrags Stückaktien der Ge- Seilschaft zu gewähren, an die Inhaber von Wandel- oder Optionsschuldver- Schreibungen, Genussrechten und/oderGe- winnschuldverschreibungen oder Kombina- tionen dieser Instrumente ("Schuldver- Schreibungen"), die aufgrund des Ermächtigungsbeschlusses der Hauptver- Sammlung vom 29. Juli 2020 bis zum 28. Juli 2025 von der Gesellschaft oder einem nachgeordneten Konzernunter- nehmen gegen Bareinlage ausgegeben werden. Die Ausgabe der neuen Aktien erfolgt zu dem nach Maßgabe des vorstehend bezeichneten Ermächtigungs- beschlusses jeweils zu bestimmenden Options- oder Wandlungspreis. Die bedingte Kapitalerhöhung ist nur im Fall der Begebung von Schuldverschreibungen, die mit Optionsrechten oder Wandlungsrechten oder -pflichten ausgestattet sind, gemäß dem Ermächtigungsbeschluss der Haupt- Versammlung vom 29. Juli 2020 und nur insoweit durchzuführen, wie von Options- oderWandlungsrechten Gebrauch gemacht wird oder zur Wandlung verpflichtete Inhaber oder Gläubiger von Schuld- verschreibungen ihre Verpflichtung zur Wandlung erfüllen oder soweit die Gesellschaft ein Wahlrecht ausübt, ganz oder teilweise anstelle der Zahlun des (5) The share capital of the Company is conditionally increased by up to to EUR 1,330,692.00 (in words: one million three hundred thirty thousand six hundred ninety-two Euro) by issuing up to 1, 330,692 new no-par value registered shares (Conditional Capital 2020/1). The conditional capital increase serves the issuance of registered no-par value shares upon the exercise ofconversion orwarrant rights (or upon fulfilment of corresponding conversion obligations) or, when exercising the Company's right to choose to partialty or in total deliver no-par value shares of the Company instead of paying the due amount of money to the holders of convertible bonds or warrant bonds, profit participation rights and/or income bonds or a combination of these Instruments (collectively the "Bonds") issued by the Company or by a subsidiary of the Company against cash contribution until 28 July 2025 on the basis of the authorization of the general meeting of 29 July 2020. The new shares are issued at the respective warrant or conversion price to be established in accordance with the aforementioned authorization resolution. The conditional capital increase shall only be implemented if bonds carrying warrant rights or conversion rights or obligations in accordance with the authorization resolution adopted by the Annual General Meeting on 29 July 2020 are issued and only to the extent that warrant or conversion rights are exercised or the holders or creditors of bonds obliged to exercise the warrant or conversion right fulfill their obligations or to the extent that the Company exercises its right to choose to partially or in total deliver no-par value shares ofthe Company instead of payment of the due amount of money and insofar äs in each case no cash compensation is ranted or treasu shares or shares of 15

 
fälligen Geldbetrags, Stückaktien der Gesellschaft zu gewahren und soweit jeweils nicht ein Barausgleich gewahrt oder eigene Aktien oder Aktien einer anderen börsennotierten Gesellschaft zur Bedienung eingesetzt werden. Die neuen Aktien nehmen von dem Beginn des Geschäftsjahrs an, in dem sie entstehen, und für alle nachfolgenden Geschäftsjahre am Gewinn teil; abweichend hiervon kann der Verwaltungsrat -- soweit rechtlich zulässig - festlegen, dass die neuen Aktien vom Beginn des Geschäftsjahrs an, für das im Zeitpunkt der Ausübung von Wandlungs- oder Optionsrechten, der Erfüllung von Wandlungs- oder Optionspflichten oder der Gewährung anstelle des fälligen Geldbetrags noch kein Beschluss der Hauptversammlung über die Verwendung des Bilanzgewinns gefasst worden ist, am Gewinn teilnehmen. Der Verwaltungsrat ist ermächtigt, die weiteren Einzelheiten der Durchführung der bedingten Kapital- erhöhung sowie die technischen Voraus- Setzungen und Ablaufe für eine eventuelle Umwandlung der Bezugsaktien in ADSs festzulegen. another listed Company are used for serving these rights. The new shares participate in profits from the beginning of the fiscal year in which they are created and for all subsequent fiscal years; in deviation hereof, the Administrative Board may, to the extent legally permissible, determine that the new shares participate in profits from the beginning of the fiscal year for which at the time of the exercise of the conversion or Option rights, the fulfilment of the conversion or Option obligations or the granting (of shares) instead of the amount due, a resolution by the General Meeting äs to the appropn-ation of the balance sheet profit has not yet been passed. The Administrative Board is authorized to stipulate the further details of the implementation of the conditional capital increase äs well äs the technical requirements and procedures for an eventual conversion of the subscription shares into ADSs. 16

 
§5 Aktien (1) Die Aktien lauten auf den Namen. Die Gesellschaft führt ein elektronisches Aktienregister. Die Aktionäre haben der Gesellschaft die gemäß § 67 Abs. 1 S. 1 AktG in der jeweils anwendbaren Fassung erforderlichen Angaben zur Ein- tragung in das Aktienregister mitzuteilen. Ferner ist mitzuteilen, inwieweit die Aktien demjenigen, der als Inhaber im Aktien- register eingetragen werden soll, auch gehören. Sofern Aktionäre eine elektronische Adresse zum Aktienregister übermitteln, wird die Gesellschaft die Mitteilungen gemäß § 125 AktG auf elektronischem Weg an diese Adresse übermitteln, sofern der Aktionär diesem Vorgehen nicht ausdrücklich widerspricht. Der Ver- waltungsrat ist - ohne dass hierauf ein Anspruch besteht - berechtigt, diese Mitteilungen auch auf anderem Weg zu versenden. §5 Shares (1) The shares of the Company are registered shares. The Company maintains an electronic share register. The shareholders must provide the Company with the Information required for entry in the share register pursuant to See. 67 (1) sentence 1 German Stock Corporation Act (AktG) äs amended. Furthermore, it must be communicated to which extent the shares belang to the person who is to be entered äs the holder in the share register. If shareholders submit an electronic address for entry in the share register, the Company will send notifications pursuant to See. 125 Gtrman Stock Corporation Act (AktG) by electronic communication to this address, unless such shareholder expressly objects to this procedure. The Administrative Board is entitled to send - but no shareholder entitled to request receiving - these notifications by other means. (2) Die Geseltechaft Ist berechtigt, Aktien in (2) Einzel, oder SamroNurkunden zu vwbriefen. Form und InhaH der Akäerturkyhden sowie von GewinnanteUs-, und Erneuerungsscheinen bestimmt der Verwaltungsrat, Der Ansprudi der Aktionäre airf Vertiriefuns Ihrer Anteile Ist ausgeschlossen. Ttie Company may ceräfy ähares by IhdMäual or global pertiflcafes. Form and content of Vhs share certficates äs well äs of proffl ehare and rehewal cerfiSc^tes at^B detennlned by the Admlnlstrafive Board. The shareholdere' right fo have thelr shares evfdenced by oertificates Is exduded. (S) Bei einer Brh&hung des Grundkapltate kann die Ge^innbetelfljgung neuer AkUen abweichend von § 60 Abs. 1 und 2 AktG bestimmt werden. Junge AKtlen aus eln6r KQnfBgen Kapltalerhflhung können mit Vorzogen bei der Gewtnnvenellung versehen werden. (3) In the event of an Increase In share capifa), the profit share öf new shares tnay be determined In derogatlDn from Secüon 60 p^ragraphs 1 and 2 of the Gennan Stedt OorporaUon Act. New shares from a Ware (ncfeaw In share j capltäl may b6 öranted prefeFenüal rights In the dfstribufloh <sf proflts.

 
S. Absdinltt. Verfassung Secäon ä.GonsiHuffcm ofthe Cömuuffi i6 MontetlschBs System; Oräan® $6 Olifrfler System; ©ovamlnö Bodlte (l) Dfo GeseHschaft hat eine mänlsäsche (1) The Company has a one-tler Untemebdnensldtungs-und Kontrollstruktur, mangganent and adminlatrative altern. QZ) Die Organe der Gesellsdiafl sind; a) der Verwaltungsrat, und b) die Haupti/erwmimluns. (2) The öoverrdng bodtes öfthe Company are: a) the Administrative Board; and b) (he General Meeäng of Shareholders. (3) Die gesäififtsrQhrendwplrektoren fQhren die Oesdiäfie der SeBell&Chaft. Indem äe die Grundlinien und Vorgaben umsetzen, die der Verwaltungsrat aufetellt (3) The Company's Maftaging Dfrectors ere managlng the Company öy Implemenfing the prtnclples and güldelines estabUshed by fte Admlnlstrsth/e Board. A Ahachnltt Ole n»«r*illfhtführend»n Dtroktoren; SectlQB 4. "nia Mnnacftna DIrütStors §7 _ §7 Bestellung, ZußtfindlQkelt, Aüberufurtg Appolntment, Responslbnittes. Removal (1) Der Verwaltunösrat be^Btlt ernen oder mehrere fl^sohäfteführende Direktoren. Mttglieder des VerwaKungsrats können zu esehäftemhrtnden Dlrddoren besteRt (1) The AdmtnlKtratfve Board shall äppplHt pne pr more Msnaglng Directors. Membere of the AdmlniStraflve Board ma be s olnted äs ana )»4»12.3032^330vl t.OfdlNht«*»!*"*' iA. nnuiitOUli BlNthp-t. luUBIII. II.—lTONJUA.t 18

 
Werden, sofern dte Mehrheit des Venwaltongsrate weiterhin aus nicht geschäftsföhrehdöft Ml^fledem besteht. Nrectore provtded that the oiembere not »rvins ss MensSti^ Diresctors shad ät all finnes consßtute the majority of the Admlrilstraäve toanj membere. (2) Der Verwaftungsrat . tenn einen ^) TheAdmMstratfveBoafdinaynomin^rte g6S№8ft^Bh)iBnden Direktor zum Verelenden der Gesdiäftsmhmng (Chtef Executive Offloer, CEO) ernennen und einen odw zwd weltera geschffftefllhrende Direktoren zu seinen Stellvertretern ernennen. one of these Managing Directors äs chtef ececuäve offteer (CEO) and one or two further Managlrtg Dlrectore äs hi? depuHes. (3) Sind mehrere geschSftsfOhrende Direktoren b^teflt, können sta sich eine Gesdiäftsordilüng geben, sofern nicht der VerwaKungsrat eine <?e$chäftsordnung für die geschäftsführenden Direktoren eilässt. W If at leest two Menaging Dlrectors are appolnfed, thsy may adppt thelr ipwn rul^ of procedüre, unless äie AdmirristraUve Board adppts rules of prooedure forthe Managlng Dlreettns. (4) Die geschäfteführenden • Direktoren (Uhren die Geschäfte der Gesellschaft nach Maßgabe der Gesetze, dt«B8r Sateung, der Geschäftsordnung für die sesch&fteRlhrenden Direktoren und den Weisungen des VewaKungsrats. (4) The Managlng DIrectors shall conduct the buslness of tfip Company in accordance wlth ptatutöry prövtsions, ftese artldes of assoyatton, fiie rules of procedure for-the Managlng Dlrectore and tiw Instrucäons ofthe Administrative Board. (5) <3e6ch<lftef(lhr»nd9 Direktoren können Jederzeit durch Beschluss des Verwaltungsrates abberufön werden. fß) Managlng Otractor» niay be removed from Office ?t any Urne by resolutlon of theAdmlnte&atIve Board.. 58 Vertretung der Gesellschaft §8 Representlng the Conipany (1) Ist nur ein gescäiäftsfflhrender Direktor bestellt, so verrttt er die GeseUsdiaft allein. Sind ehrere eschaftsftlhrende DireMören (1) If only one Manäglng Direc*or Is appolnted, be shall have sole and indMdual authori to re resent the 1^^^..r^^^ 19

 
beeteltt, so wird die Oesdlschaft durch zwei geschäftsfühnBnde Direktoren oder durch iatnen getehäfeftthrenderi Direktor fr» Qemejnschaft mft einem Protturiäen gesetzlich vertreten. Company. If at least two Managlng Dlrectore are appdnted, the Gonipany shafl etthw be legaHy represented t»y two Managing Dlrectore or by one Managlng Dlrector and one execuUvs offlcer vested wtth power of commerctel representatlon under German law (P/otorfsQ. (2) Der Verwattur^israt kann bestimmen. dass (2) eIitoBtoe oder alte gesohfitetohrenden Dlrtktoren ehizeh/ertretungAefugt sind. The AdmlrfstraUve Board may determlne (hat (ndivldual or all Managlng Dlrectots have sote and Indfvldual authortty to represent the Company, (^) Der Verwaltungsrat kann ferner einzelne oder alte flesdiäftsfOhrenden Direktoren alfgemeln oder für den Eln3Eelfall von dem Verbot der Mehrfachvertretung des § 181 Altemaäve2 BG8 betreten; §41 Abs. 5 SEAG bleibt unberührt. (3) The Ädmlnisfretive Boaitt may furthw release IndMdual or al( Managlng DIrectors from the proWbtUon on multiple representeiüon pursuant to SecUon 181 alternative 2 of the German Clvll Code (BQB) In general or In spedflc caseis; 8ecäon41 para. 5 offrie SEAG remalns unaffected. §9 Zusttnimungsbedörftlge Geschäfte Transactlons Requlring Approval (2) Öle aeschäftsführenden Direktoren dürfen die folgenden Maßnahmän und Gesdiäfte nur rrttt vorheriger Zysdmmung des Verwattungsrats äusföhrBn; a) VerabscWedüng c|0r Jähriichen Budgetjstanüng ®r die GeseUäch8ft und Ihren TochteruntwnehmcitfOrdas folgende Geschäftsjahr (Prouktlon, Umsatz, Personal, Investments, FInaririeru und Gesrfnn- und <1) Ttie Managfng DIret^ore shatl wacute the foflowlng meiasures and (rensadions only wtfh the prior approval of the Adrahilstrattve Board; a) Adof^Ihs the ennuat budget planntng fprthe Company and te subsldlaries for the cpmlng business year (producüon, turriover, pereonnd, Investment, toantto aswell äs rodt. arKl toss Si5J2ä^2!l».~^i^"<"»-» rtoN. »»* 20

 
Vertustplanun^ "Büdgetplanung"); (die plannlng) (the • "Budget Plannlng*); b) Erwert? und Veräußeiung von Unternehmen, UntemehmensbetdUgungen und Untemehmenstelleiri, wenn der Gegenwert vom Verwaltungsrat festgelegte Wertgnsozen Oberetelgt Ausgenortimen sind, sowen vom Verwaltunfisrat nicht andere bestimmt, Erweit» und Veräußerung von und an vertoundene Unternehmen i.S.d. §§ 15 ff. Afrtlengeseiz. b) Acqulitläon and dfeposgl of enterprijBös, tnterests In comparttes . and parts of compfinles, In case the value exceeds üie ihresholds sttpulated by the Adminletraäve Board. Thls does not appty. to the extern not sflpulated to ttie contrary by the Admlntstraäve Board, 1o the acqulslUon äftd dteposal from or to efflllated companies (wlthln ttie meaning of §§ 15 et sfeq. German Stod< Gorpörations Ad). c) Investitionen In das Anlagevermögen Ober einen vom Verwattungsrat für den Einzelfall oder das betreffend Gasdiäftsjahr festgelegten Betrag hinaus; und c) Spendfng för addläons to flxed assets {Inve^Wonen in des Anlagevefmögen) In excess of thresholds äs determlned by the Administrative, Board per IndMdual ca$e ör for äie respedlve budness year; and d) Aufnahme von Flnanzvertalndllchkelten, wann deren Umfeng vom . Verwaltunflsret festgelegt® Wertgrtnzen O&eretelgt. d) Incurrence of finandal obllgatlons [ In case the vatue eitoeeds . thelr i threshQlds säpuiated by the' Admlnistretlw Board. (2) Maßnahmen oder Transakflonen, die ausdrücklich In der wm Verwaltungsrat genehmigten Budgetplanung ̂ nthattw sfnd, b&dOfen keiner zusätelldTBn Zustimmunfl durch den Verwajtungsrat gemäß vorstehendem Absattl, es sei den die üetreffentje Maßnahme oüw Transaktion Obereclireftet Wert- taw. betra. Bmfißl den (2) Measures or tränsacäons specfficaTly addressed In the Budget Planning äs approved by the Administrative Board dö not requlre a separate approval oflhe Administrative Board under para. 1) above, urfesa the relevant measure or trensactton exceeds tn terme of wfue/attöunt üie amount ör llinlt ».jl»12.3P^S3tol »WB8ttl»<BUfli da*tiw<^*«» 21

 
Betrag odw die Qvtwtts, die für die JewelUge Maßnahme oder Traosaktlen In der genehmtgten Büdßetpteniung voigetehen ist. provkled for such measure br bansa^on In fte approved Budget Pfanribig. (S) Das Recht des Veiwaftungsrats. wettere Maßnahmen und Gesdiäfte zu bestimmen, die nur mit seiner ZUBHWmung vorgenommen wefdön dürfen, blettit unberührt. (3) The Administrative Board's right io determlne further. measures and transacäons requfrtng its approvsl shall remaln unaffocted. 5. Abschnitt. Der Vc'iwsltunflsrat Sectton 5. The AdmlnlstnaäveBoanl. §10 Zusammenseücunfl und Amtsdauer $10 GpmposlBon and Term of Office (1) Der Verwattungsrät ' der Gesellschaft besteht aus mlndtetene drei Mltgttedern. Im Übrigen beetlmmt die Hauptversammlung die Zahl der Mitglieder des Verwattungsrafe unter Beachtung der Regelung In § S3 Abs. 1 SEAG. SäiTrfllohe Mitglieder des Verwaltungsrats werden von der Hauptveraatnmlung bestellt (1) The Compan/s Administrative Board ' oomprises at laast thrae membere. j Apa»f fröm that, the General Meeting of Shareholdere shall detennlne the number of the Adminlstreäve Board members In aocordance wjth the pro\rtslons of seeäon ?3 para. 1 of the 8EAG. All • membere of the Administrative Board are elected by the Genera] Meeäng ofShareholdere. (2) Die Wahl der MHgBeder des Verwaltungsrats erfölflt, sofern die Hauptversammlung bei der Wart keine kärzere Amtszeit besümiflt, fOr den Zei&9um bte wir Boendlgung der Hauptveresimmtung, die Über ihre Entlastung filr das vierte Geschäftsjahr aü Beginn Ihrer Amtszeit beschließt, wobei das Geschäfte ahr In dem die ÄmlszeKbe (nnt (2) Unless the General Meeting of Sharehotdere detennines a shortertBmi, the tnembers of fhe Administrative Board are elected tora teim endlng wlth the dose öf the General Meetlr® of Shareholdere which rssölves on the formal approval of thefr aets for the fourth flscal ear followta the »l№IS. iO»-»3Pyl ^.ressisn'wsvav MavtvHJWw 22

 
nicht mitzurechnen ist, höchstens Jedoch fOr sechs Jahre. Wietteifeestetlungen sind zulässig, cömmencemeht of thelr term. not countlng Uw year in whteh äielr temi of Office comhiencw, however, för a tenn of slx yeare at the Ipngest. Röappointmente are penplsslble. (3) Ergänzurgswahlen erfolgen för die restliche Amtszeit des Busg^scWedenen Mitglieds, sofern die Hauptvereammlung bei der Wahl keine abweldiende Arotszdt bsstJmint, die jedoch dte nach Absatz (2) zulässige Höchstdauer riicht Qberschretert darf. (3) substtute eIecUons shatl be held (or the remalnlng pelod of offlce of any member wlthdrawlng from the Adminlstraüve Board urdess the General Meeting of SharenoRlera detemilnes a dlfferent term on the occaslon of the election whlch, however, must not exceed the pennltted maximum tonn äccorcilng to para. (2). (4) FOr Ml^lleder des Värwattungsrats können gleichzeitig mft deren Wahl EreatBnttglleder gewählt werden. Ist bei der Wahl Xdne anderweitige Bestimmung getroffen worden, treten sie in dör Reihenfolge Ihrer Wahl an die Stelle voizeltlg ausscheidender, gleichzelUg von der Hauptvereammlung gewählter Verwaltungsratsmttglleder. Tritt ein ErsatzmitgBed an dte Stdie dnes vorzeitig ausgeschfedenen Verwaltungsratsmltglfeds, so erilscht sein Amt, falls nach Eintritt des Ersatzfaltes fm Wege der Ereianzungswahl elnNachfolgBr für das ausgescKiedene VowaltungsratsmKglled gewähft wTrd, mit der Beendigung der Hguptvereammlung, In der dfe Ergflnzungswahl erfolgt, anderenfalls mit Ablauf der restlfdiön Amtszeit des Ausgeschiedenen. ßrilscht das Amt des Erastemttglieds durch Ergänzungswaht für den Ausgeschtedenen, erlangt das Er^itemitglied seine VöThörige Stellung als (4) Subsätute merinberft may be elect^d for members of the Adminlstraäve Board slmultaneously wlth the relevant member's etecäon. If not sUpulated oth^narise In Ihe eiecäön. the subsütyts members replace, In the order of thelr elactlon, prematurely wtthdrawlng members of the AdmlntstraBve Board whidi wen elected by the same General Meeting of Shareholders. In esse a subsUtute member replaces a preinafairely wlthdrawing member ofthe Administrative Board, hls offlro-ends, ir after Ihe eubstKutlon Situation has occurred a sucoessor for th® wlthdrswing Admlnistraäve Board merttber Is elected by way öf a by- ötecüon, wfüi the dose of the öeneral Meeting of Shareholders In which the by- eledlon Is resotved on, othervrise wiüi tbe end ofthe remalnlng temi of offlGe af the wlthdrawlng Admlnlsüslitfe Board member. If Ihe term of Office of the t4812. 3<B2.5330vI .TOU<an<Un<MW»l»aUiiun№d»a>^i,««U<^uBiBn|<<^^ 23

 
ETsatemBgtled für VerwaUunssratsmi&UetierzurOck, anders subsBtute »nember ends by by^etectton forttovrithdravrir^ AdmMstnaCv^ Board tnember, the subsätute member r^filns Its prevfous Office äs substtota mwrtl?^ for othw membws ofthe Admfnlstraüve Boaret. (5) J^des VerwaltungaFBftsmitglted kann sein Amt unter Etnhaftung einer Frist von dnem Wotwft. dyreh ̂ ne ah den Vorelteencten des V^wsltungsrete - ocTer im FaUe einer Aintsnlederiegung durch den Vwsffctentlen des Verwaltungsrats an seinen Stdhfertreter zu richtende schriftliche ErWSrung niederlegen. Der Vorsttzende des VerwBfturigsrats - oder Im Falte »iner Amtsniederf^ung durch den Vorsitzenden des Vawattungsrats sah S?e)h/6rtreter - kann einer Verküizunfl der Frist oder einem Verzicht auf dte Wahrung der Frist zustinunen. Das Recht zur Amtsntedertegung aus wlchügem Grund bleibt hiervon unbälthrt. (5) Each member of the Admlntetrathm Board may reslgn from üffiee t>y gtving one morräi's noäce In writlng to be dlrected to the Chalrman of ä» Admlnlstraäve Boanl or In case of reslgnaUon of the Chatmian cf the Adminlstraüve Board to his Vfce- Chalrmsn. The Chalrmsn of the AdmlnlstreUvA goard - or In case of reslgnatlon of the Ghalrman of the Adinlnlsfraäve Board hte Vlce-Chalrmön - may approve a shoiter noäce period or a wah/er of the noUce period. Thte shall not affect the right to reslgn from offlee for good cause. $11 Vorsitzender und Stellvertretsr §11 Chalrman and Vlce-Chalrmen (1) Der VewaKunssrät wählt aus seiner Mitte einen Vorehzendgra und mtndestens ernen etellvertnstenden Voreltzenden. Dto Amtszeiten des Vordtzenden und eines stefh/ertretend^n Voraltzenden entsprechen, soweit be] der Wahl rtcht korzere Amtszeiten bestimmt werden, Ihren jeweiligen AnfteeBen als Verwaltungsratsmttglled. (1) The Admlnlsfraäve Board shall elect from among Its mwnbers a Chalnman and at least one Vloe-Chatrman. The terms of offi№ äs Chainnan and Vice- Chalrman shall correspond tö their terms of offtae äs AtfmWstrafive Board! membefs, untess the terms are! shortened on the occaslon of the eleeäon. W»1?-3032-ä330Yl i».fBBiBlwan<M «lTC»»^ajkn 24

 
(2) Wenn der Vordtzende oder ein stellvertre'tereler VoFpftzender vo»ze1flg aus fiesem Amt auss&helden, hat der Verwaltyngsrat unverzüglich e(ne NeiriwaW durchzufohren. (2) tf the Chalrman or a Vice-Cheilnnan wlthdräws from äijs Office prematureJy; the Administraöve Board shall Immedtatdy eonducrt a oewelecäon. (3) Die dem VorstüsBnden durch Gesetz oder Sat2ung elngei'äurrrten besonderen Beftigntepe sliehsn -soweit sich aus Gesetz oder Satzung nicht ein anderes ergibt - Im Falle sdner Vertiinderung seinem Stellverti^er. Sind Vorsttzender und Stellvertreter an der Wahrnehmung ihrer Aufgaben verhindert, so hat diese Aufgaben für die Dauer der Verhinderung das an Lebensiiahren älteste der verbleibenden Verwaltungsratsmitfllleder zu übernehmen; dies gilt entspreöhend, solange weder ein Vorsitzender noch ein Stellvertreter bestellt Ist (3) In caw the Ghalrman te pre(äuded from hls Office, äieV(c9-Chalr»nan shaB have the same spedal poweis conferwd to the Chaihnan by statutory tew or the artldes of assodaäon to the extwt statutory law or the arücfes of assoctatlon do not provlde othe»wise. In esse the Chätrman and ttie Vioe- Chafmien are not able to futfill thelr tasks, the oldest In age offhe remalntng ftOTibere of th® Administrative Board shall ftjlfiU these tasks forthe duratton of Uie htndrance; thls also appltes äs lang äs nefther a Chainrtan nor a Vlce- Chsfrmah is appolnted. S 12 Aufgaben des Vewattungsrats §12 Responslbllläes ofthe Administrative Board (l) Der Verwattungsrat feitet die Gesellschaft, bestimmt die Grundlinien Ihrer Tättflkett und Überwacht deren Umsettung. Der VerwaItungsTOt hat <»e ihm nacl) Gesetz und dlesör Satzung zugewiesenen Aufgaben. (1) The AdnitnlBtrBUve Board shal) dlnct the Conipany, e$tabllsh the general prindptes of fts üuslness and supen/Ise thelr Implemerrtatlon. The Admirtsfratlve Board has the responsIbllHies äs stipulated by stafutory law and these artides of association. <f481^i03!i^30vl^ .. rvuiti'wsa« 25

 
(2) Der Vemaltungsrat Ist befugt. Änderung«! (2) TheAdmlnlBUaKTOBoönljsempi owewt der Sateut^, dte nur dsren Fassung betreflen, zu b»chtleßOT. to adopt rBsoluäons ön amendlr^ Ihe Brtldes of assodatton- whioh affwt (Me wording orriy but not the. sense or meanlngthereof. (3) Der Verwältungsrat gibt GeschiEjftsordnung. sich eine (3) The Administrative Board shalladoptlts own ndes of procedure. §13 Staungen §13 Meetings (1) Die Sitzungen des Verwaltyngsrate werden durch den Vorsftzenden des Verwaltungsrats in Textform (§ 126b BGB) einbentfen. Die Elnberufiung muss s^Stestens am 10. Tag vor der Sitzung erfolgen. FOr die Wahrung der Frist genogt die Absendung. In dringenden Fänep kann der Vorstteende diese Frist angemessen verkOtzen und die Sitzung auch mQndllch, femmündlteh oder durch Nuteung sQn^flger TetetoinmunlkaflonBmlttßl einberufen. Dte Gesctiäftsordnung des Vetwaltungsrate kann aflgetndn oder für bestimmte Ffltle die in Säte 2 bestimmte Rrist verkürasn. (1) Admlnlstrattve Board meeflngs shall be convoked fc!iy the Chalnnan of the Admfnlstraäve Board In text form {SecUon 126b of fhe German CtvU. Code). Such convocaäon shaD oecur no teter than on the 10öi day before the Admlnlstraäve Board meetlng. Dtspatch of the convocatlon sufflces to meet Üi® | notfce perfod. In the event of urgency, ; the Chalrman may shorten thls noäce j period In a reasonable msnner end mey also convoke a meeäng orally. by telephone or by other means of telecommunlcatlon. The ryles of procedure af the Admlnistraäve. Board may shorten the notice perfod In sentenoe2 generally or for specffic. eltuatlons. (2) MU der E(nberufang sind Ort und Zeft der Sftzung sovrie dte Tagesordnung inteut&llen. Ergänzungen der Tagesordnung sind, soweit nicht ein dringender Fslt etne spätere Mtttellyng rwhtfertlgt. spätestens fünf Tage vor der Slteung mitzuteilen; die Regelungen Von Absatz 1 Satz 3 bis'5 dten (2) The Ipcaäon and tlme of the meeUng äs weil äs the agenda of the ineetfng are to be notltted togather wlth the oonvocatlön. Amendments to the agenda may be sybmttted up to five days prior to Ihe AdmlnfsttBäve Board meetl unless a later submlsdon le (14tia-302. 03pvl .W-HSUfft ftWW 26

 
enti^rechend. In StoaiiRgen, (Be nfcäit ordnungsgemäß elnt^nrfen sowie über Gegenstände der Tagesol-dnung. die nicht ordnupgsgemöß angökündigt worden sind, darf nur bescNossen weKten, wenn kein VerwaltungsratemItoUed widerspricht. Abwesenden VOrwaltungsratsmMglledem Ist In einem solchen Fall GelegenheH m geben, binnen einer vom VorsltEenden zu bestimmenden angemessenen Frist der Beschlusstessung zu widersprechen oder ihre Stimme nachträglich ateufieben. Der Bgschluss whxl erei vrirk?am, wenn die abwesenden Verwaltunflerstsmf^glleder d@r Bescfttussfassung ]werhalb der Frist nicht vridersprochen (oder Jhr züflestimrtit) oder Ihre Summe nachträölich abgegeben haben, Justffled by an wgent matter? the provlsfons öf para. (1) aentenoe 3 to S appty accordtngly. In meeflngs which v№re not duly convpked and on agenda item? whlch wäre not düiy noäffed votlng niay only be he(d tf rw membw of th® Admlnls&aUve Board ralses an objeeUon. In such a case abservt membörs of the Admlnlsfraüve Board must be glven äle opportuntty to object to the resoluflon withln an appropriate period to be stlpulateel by th6 Cftairman or to cast h(s or her vpte sübsequently. The resolutton shatt become effecöve onty if thls period of tlme has etepsed wiftout any sbsent Adminteträttve Board member raislnfl an objection regardfng (he resolutton ortf, wtthin thls peiiod of time, tha absönt Administrative Board member consented to the resoluüon w öast his or her vote subsequentiy. (3) Im Anschluss an die Neuwahl des (3) Verwaftungsrats In einer Hauptversammlung findet eine Verwattungsratssftzung statt, zu der es einer besonderen Einladung nicht bedarf. In dieser Slteung v^hlt der Verwaltungsrat aus seiner. MHte einen Vörßttzenden und einen oder mehrwe Stellvertreter. Subseqüent to the election of the Administrative Board at a shareholders' meeäng, the Administrative Board shglt meet wlthout the requlrement of a separate convocation. At thls meetlng, the Administrative Board shall elect one Chatnnan and one or more VIce- Chalrmen ffom pfflong rte mämbers. §14 Beschlussfassung §14 Adopäng Resolutlons (1) Beschlösse des Veroattungsrats virerdön in der ftegel in Sitzungen gefasst Auf Anorelnung des Vorsitzenden kann eine Besch1ussfas$un des Verwanurt srats (1) Administrative 0oard resolufions shgtl generally be adopted In meetlngs. By orter of the Chalmtan. fhe Administrative Boartfs resoluflons »na <4812-3032.»30rl UO-nAtodM»«W*>* t. i.dtiiw^tiunm'w-'-u" 27

 
auch außertialb VOR Sitzungen (öder Im Wage der kombinierten Besehlussfassung) (iün^i telefonlstAe Stbnmabflabe, Sdnimabgabe In Twtfonn <§ 126b BGB) ünd/oder unter Nytzyng soiwüger M%el der Tetekommurikaäon oder elektronischer Medten erfolgen. Por Form und Frist der Anordnung gelten die BesSmmungen des § 13 Absate (1) und Absata (2) entsprechend. ateo be adopted out^de of mefiittngs (or by vtey of cembined voflng procedui'e) by voäng vfe tdephorw. text form (S^ctlon 12öb oftheQennan ClvU Code) and/or by uslng olhör m^hods of teleoommunlcaäon or electronlc media. Regardlng fontial requtrements and ttne period of the order, the provislons of § 13 para. (1) and para. (2) shall äppty accorälngly. (2) Auch ohne (redifcE eiUge) Anordnung Im (2) Sinne von Absatz (1) ist eine Beschlusstessung in der In Absatz (1) Satt 2 genannten Weise zulässtg. wenn kein VeimattungwBtet-atemftönK l vriderepricht. Nähere Regelungen hletzu kann die Geschäftsordnung des Verwaltungsrats enthaKen. Even wlthout a ^mely (ssuad) Order vrithln tfte meaning of para. (1), edopttpg resotu^ons ts permisslbte by usfng ih<B methods set out In para. (1) sentence 2' provided teat no Adminlstrafive Board member objöets. Furttier dötails in thls regard may be sät out In the Administrative Board's rotes of procedure. (3) Der Verwaltunßsrat Ist beschlusstöhtg, (3) sofern mindestens die Hälfte seiner MHglledör, aus denen er jn^esamt §eitiä& SatEung und Besehlüss der Hauptvertammlung xü bestehen hat, ah der Bäschlussfawung tellnehmeo. Beschlösse des Verwaltungsrsts werden, soweit nicht zwtnflende oesetdldie Rt^elunoefi oder dtese Satzung etwas antferes bestlmmeri. mit einfacher Mehrheit der abgegebenen Sämnrten getasst. Dabei gilt Stimmenüialtung als MltwlrHurtfl an der Besohlussfassung. aber nicht als Sämmabgabe. Bei Sümmensle?chhett gibt die SUmme des VoreHzendert des Verwattüngsrats den Ausschlag (Stlcshentöcheld); das gltt auch bei Wahteh. Nimmt der Votöttzerwle des Veawaitun srBts Tbe Admlnisfrative Board hae a quoirum If at teast half of Its members of whom tt has to conslst aftogetfter accordlng to the aräcles of assoclation and the resöluäons of tiw GeneFal Meettng of Shareholdört pärtfdpato ln-№e deciston- taklng. Unless ötherwise sHpulated by mahdatory statutory provislone or thls articles öfassodaäon. resölulfons ofthe Administrative Board shall be adopted by simple ittqloFtty of ttie vötes cast. in thls connecüon abstenfions shall be deemed to consätuteparääpatlng.ln the declslon-taklng but not casting a vote. in the event of a tie. the Chalnman of the Administrative Board shall have e casäng vote; Ws shalt also apply at; etecUons. If the Ghaiiman öf ihe! S22ä2ää£2*..reBa>l»-ten«»*<»i iTOPüKm 28

 
an der Abstimmung nicht teil, so steht seinem Stellvertreter • das StichentsGheldungsrBcht nicht zu, Admtnistrafive Board does not partldpate In the ttecfeJw^klr^. the Vlce^halrman shall. not have . the castlng vote, (4) Der Vorsitzende fet befugt, Eiklärungen des Verwattungsrate. die 2ur Duröhführung der Beschjüsse erforderiläi sind, tn dessen Namen abzugeben. <4) TheChabmui Is Buthorteedon behalt ot the AdmlntetraHve Board to dellver ctedarations oftheAdmlntstraüve Board whtch are recjüfired to ftnplemBnt the resolutlons. §15 AusschOsse <(es Verwaltungsrats §16 Gommlttees of the Administrative Board (1) Der Verodtungsrat kann aus seiner Mitte Ausschüsse blklen und ihnen, soweit gesetzlich zulässig, auch Angefegenhelten zur BeschTussfassung anstellä des Qesaitrt- Verwaftungsrats zuweisen, Näheres regelt die Geschäftsordnung des Verwaltungsräts. (1) The Administrative Board may establish commfttees from among Its members and, to the extent permfttod by law, assign • to fhe" commlttees the responstblltty. to take dedslons In place öf thö Admlnlstraflve Board es a whole. Further deteils are set out In the Administraüye Board's rutes of protiedure. (2) Für die Beschrussfählgkelt und Beschlyssfassurg eines Ausschusses gelten dla Regelungen des § 14 mit der Maßgabe entspf®Ghend, dass fQr dte Beschiussrähiökett fite» auf dte Anzahl der Ml^lleder des Venwattungsrats gemäß Satajng und Beschluss der Hsuptvereammtung auf dte Anzahl der Mitglieder des JewelUgen Ausschusses ataustellen Ist, an der BeschluBsfässung In einem Ausschüss Jedoch mindestens drei MlilgUecter teilnehmen müssen. Das Sficheatectietdun w&dit des Vorsttzenden (2) The provl^ons of § 14 shall appty accordingly to a commlttee's quorum ahd Its dedslon-taldng provlded that wfth respwt to the quorum - Instead of the number <rf . Admlntetraflve Board membere aocordtag to the artldes öf asSödatlon and the resotüüons of the General Meeting of Sharehoklws - thc number of memfaere of the respecüve committee shall be dedsh/e, whfereby at teäst three membere must partldpate In a committee's deeIsion-taMng. The <48IM03W33(h?l iA.mntalKi>»a»N rt..Auin»rt»«»»nK^"— 29

 
besteht bei der BescMussfassung in einem Aysschiws nicht casfing vote of thfr Chatrman doee not apply to resoluttonjB öf a cömmtttee. § l® Vcigdtung S16 Remunwaüon (1) Die Mitglieder des Verwaltungsrats erhalten für "(1) The members of the Administrative Board shall jedes volle Geschäftsjahr ihrer Zugehörigkeit zum Verwaltungsrat eine feste Vergütung. Sie beträgt für jedes Verwaltungsratsmitglied EUR 80.000. receive a fixed remuneration for each füll fiscal year of Administrative Board membership. This remuneration amounts to EUR 80,000 for each Administrative Board member. Die feste Vergütung erhöht sich für die Wahrnehmung der nachfolgend genannten Positionen jeweils um den folgenden Betrag: (i) EUR 40.000 für den Vorsitzenden des Verwaltungsrats, (ii) EUR 20.000 für den stellvertretenden Vorsitzenden, (iii) EUR 18.000 für den Vorsitzenden des Präsidial-'und Nominierungsausschusses, (iv) EUR 10.000 für sonstige Mitglieder des Präsidial- und Nominierungsausschusses, (v) EUR 20.000 für den Vorsitzenden des Prüfungsausschusses und (vi) EUR 12. 500 für sonstige Mitglieder des Prüfungsausschusses. Bei Wahrnehmung mehrerer der vorstehenden Positionen durch ein Verwaltungsratsmitglied finden die betreffenden Erhöhungen kumulativ Anwendung. Verwaltungsratsmitglieder, die zugleich geschäfts- führende Direktoren der Gesellschaft sind, erhalten ausschließlich eine Vergütung für ihre Tätigkeit als geschäftsführender Direktor entsprechend ihrem jeweiligen Dienstvertrag. The fixed remuneration shall be increased by the amounts set out below for sen/ing on the following positions: (i) EUR 40,000 for the Chairman of the Administrative Board, (ii) EUR 20,000 for the Vice Chairman, (iii) EUR 18,000 forthe Chairman ofthe Presiding and Nominating Committee, (iv) EUR 10,000 for other members of the Presiding and Nominating Committee, (v) EUR 20,000 for the Chairman of the Audit Committee and (vi) EUR 12. 500 for other members of the Audit Committee. If a member of the Administrative Board serves on severat of the above positions, the respective increase amounts shall apply cumulatively. Members ofthe Administrative Board who are also Managing Directors of the Company shall be compensated exclusively under their respective Service agreements for their duties carried out in their capacity äs Managing Director.

 
(2) Die Vergütungen gemäß vorstehendem Absatz 1 sind zahlbar in vier gleichen Raten, jeweils fällig nach Ablauf eines Quartals. Verwaltungsrats- mitglieder, die nicht während eines vollen Geschäftsjahres dem Verwaltungsrat angehört haben oder die in Absatz 1 genannten Positionen innehatten, erhalten die jeweilige Vergütung zeitanteilig. (2) The remunerations pursuant to the foregoing para. (1) are payable in fourequal installments, each due after the expiration of a quarter. Administrative Board members who served on the Administrative Board or in the positions mentioned in para. 1 for only part of the financial year shall receive pro rata remuneration in accordance with the duration of their sen/ice. (3) Die Mitglieder des Verwaltungsrats erhalten ferner Ersatz aller Auslagen sowie Ersatz der auf ihre Vergütung und Auslagen zu entrichtenden Umsatzsteuer. (3) Furthermore, members ofthe Administrative Board shall be reimbursed for all out-of-pocket expenses and for the sales tax payable on their out-of-pocket expenses and remuneration. (4) Die Gesellschaft kann zugunsten der Verwaltungs- ratsmitglieder eine Vermögensschaden- Haftpflichtversicherung (D&O-Versicherung) zu marktüblichen und angemessenen Konditionen abschließen, welche die gesetzliche Haftpflicht aus der Verwaltungsratstätigkeit abdeckt. (4) The Company may take out financial loss liability insurance (D&O insurance) for the benefit of the members of the Administrative Board, under market-standard and appropriate terms and conditions, to cover legal liability arising from their activities on the Administrative Board.

 
6. Absehnftt. Dia HauDtVsrBammIuna Sectlon ft Qfineral Meeäna of Shareholdera §17 Ort und Einberufung S 17 Venue anä Convoeatlon (1) Die Hauptvereammlung -flndat arti Sltt der Gesellschaft, am Ste einer deu^hen Wer^aplwfaöFse oder 'an einem Ort In Deutechland Im Umkreis von 50 km vonrt Sttc der Gesellschaft oder vom Ste einer deutschen Wertpapierbörse statt (1) The General Meeüng of Shareholddrs stall be held at ths Cotnpan/s d^istered Office, at the locaäon of a Gennan stod( exchange or at a place In Germany tocated wtthin a.50 tan radlus of (he Company's reglstered ofRce or of the locaäon of a Gennan stock exchange. (2) Die Hauptversammlung wird durch den Vewaltungsrat oder die sonst htetzu gesebdlch befugten Perisonen einberufen, (2) The General Meeting of Shareholdere shall be convened by the Administrative Board or by any ftjrther persons authorized by law. <3) Für die Form und Frhst der Elnberufting gelten die gesetzlichen Vorschriften. (3) Form and nottee period requirements for catllng the shareholdere' me$ting shall be govemed by the stetütory provlslons. §18 §18 Teilnahme und Ausübung das Stlmmrechte Attendance and Exerctee of Votlng Rlght (1) zur Teilnahme an der Hauptvereammlung ynd zur Ausübung des Sämmrechts sind nur diejenigen AMIonäre berecMtet, ^ steh nach näherer Maßgabe der nachfelgaiden Besämmungen rechteeitfg vor der Hauptversammlung angemeldet ̂aben. (1) Shareholdprs shall onty be enätted to attend the Oeneral Meeting of ; Sharehplders and exerdse the voüng < right at such meeBng ff they have №gfsterBd In dü& flme bBfore the General MeeBng of Sharehotdere In accordance wrfth the fottowlnig more detalled provislons. K4812.W2.W30VI lA. nanin ii4ai8cinii»i»«(**i>»i »l ii.M'ar»iimmni|TflK^a*u 32

 
(2) Die Anmeldung muss' In deutsäher öder engHscher Sprach® In Textform oder, sofern dies In der Bnberu&ing v<?rgweheri Ist, hi einer dort naher bestiironten eleldrontsohen Form erfolgen. (2) The reglstraäon shall be In text fonn tn Gennan or (n Eng(lsli,. or }f provlded fQr b? tee ccwocaäon, In aneüier de<*orirc fönn äs fürthef detennfned fcereln. (3) Die Afimetdüng muss der Gesellschaft Innerhalb der geBetcllch voigösehenen Frist unter der In der Einberufung htertOr mttgetelfteh Adresse zugehen. In der EirdaenAing zur ^aupfi/ersanfimtung kann stettdessen audi eine künsere, In Tagen zu bemessende Frist vorgesehen werden. (3) The r^lsfratlon must be recöived by the Company wlthln the statutory ame period at the address äs communlcated tn th? convocaUon. In the convocaüon förifte Gsneral Msötfng af Shareholdere also a shorter period of time to be calculated (n days csm Instead be säpulated. (4) Der Vawattungsrat ist ermächtigt vorzusehen« dass Aktionäre Ihre Sänfimen auch ohne an der VeTsammlung teUainehn»en, schrtfUldl oder Im Wege elekfrontecher Kominurilkaäon abgeben können (Briefwaht). Der Verwsltyngsrat kann Umfang und Verfahren der Briefwah» Im Einzelnen r^eln. (4) The AdmMstrath/e Board Is authorized to allow thö shareholders to cast thelr vote tn wrffing or by means of eleotronlc communlcattons ^postal vote) without havlng to attehd the Gerterat Meeting of Shareholdere (hemselves. The AdmlnlstraCve Board can determlne the extent and the procedure of the postal votlng In further details. (5) Der Verwartungsrat tet ferner emnflditigt vorzusehen, dass AKUonäre auch ohne selbst vor Ort ahwesewt oder vertreten zu sein, en der Hauptvenammtung teilnehmen und sämtfidw oder einzelne Ihrer Rechte ganz oder teilweise 'Im Wege elektronischer Kommunikation ausüben können (Online- Täl^^htne). Der Värwaltungsret kann Umfang und Verfahren der Ontine- Teilnahme Im Einzelnen regeln. (5) The Admlnfstratfve Board ts fürther euthorized to allow^ that shareholders attend the Oeneral Meeting of Shareholdere wlthout bdng phystcally present at the focatlon of the General Meeting of Shareholdws themsehres or by a representaßve and exerctse all or parts of their righte In whote or In part by way of electronte communlcatlons (online attendance). Tbe Administrative Board csn detennlne the extent and the £Sää2äS2^..̂ ^»<. ^w, •lA»»**. •Wili1nl«>n>«in»<^U«a 33

 
prooedure of (he orflne attwdanee In (ürtherdetalte. (6) Das Sämmrecht kann auch durdi Bevollmächtigte ausgeüüt werden. Für die Form der Erteilung der Vollmacht, Ihr^n Wefruf und/oder <ten Nadiwefs d^- Vollmacht können In der Snberufimg Eriychterungen gegenöBer der gesetcllch vorgeschriebenen Form besUmnrt werdan; im Obrigen gelten hierfür die gesetztldien Biestfmmungen. Die Regelungen von § 135 ÄktG bleiben unberührt. . (6) The voUng right can be exwcfsed through representatlves. WMh i'agaid to the form for the flrantlng of an authorlzation, tts revoGafion änd/or the proof of authorteätion, allevfaäws flrom the statutory fonn can be detenmlned; apart from (hat, the provlsions äfSeäion 135 of the Gemnan Stock Corporafion Act remaln unaffected. §18 Voreitz S 19 Chalr (1) Den Vorsitz der Hauptversammlung TOhrt der Vorsitzende des VerwaRungsrats oder ein anderes, vom Vorsttzenden des Verwaltungsrats dazu bestimmtes Mltgfled des Vewaltüngsrate oder eine sonsüge, vom Voreftzenden des Verwaltungsrats dazu bestimmte Person (Vereammlunigsleltei). Sofern der Vorsitzende des Verwattungsrats nicht an der Hauptwreammlung teilnimmt und eine BesUmmyng nach. Satt 1 nicht getroffen hat oder der Bestimmte verhindert (st, erfolgt die Besßfnmung des VersammtungslelteRB durch mit elnfiacher Mehrheit der abgegäbe(i6n Summen der anwesenden VenwaBungsratsmltglieder zu fassenden Beschluss. Ist In der tiauptvereammlung kein Verwaltungsratsmltglled anwesend und Ist auch keine ßesltmmung durüti den Vorsitzenden getroffen worden bzw. Ist der Bestimmte wrtilndert, so wird der (1) The General Meeting of Shareholders shall be preslded aver by the Chatrman of the Adminlstraäve Board or by another member of the Administrative Board ae detwmined by the Chairman of Sie Admlnlstrefive Board or any other person äs determtned by the Chalrman of the Adrtitnfstrsäve Board (Ohatnnan öf the Meeting). If the Chairman of the j Administrative Board döee not attend 1he General Meräng of Sharähotders end häs not made ahy such rullng acoordlng to eentence 1 or the person determlned (s prevented from attendlng, the Chalrman of the Meeting ehall be determlned by a resoluöon adopted vrfth simple majority of the votes cast by the Administrative Board • membere aäendfng the General Meeting of Shareholders. IfnoAdmlnlstraüve Board meraäefattendsüw General Meetin ofi <WiS.?<>32-533ÖvI A.»iattitel70»IE(UI <ai(»«aTU>Ul*« 34

 
Veraanimlungsfelter unter tfem Vorete des AKöonära mft dem höchsten In der HWptvereammking erschienenen Antellsbesttz oder seines Vertretere dureh die Haupferersammlung giswshlt. Sharehofdere and also ho determlnafion by the Chalrman of the Admlnlstrethw Board has been made or the peison dötwnlned te'preventedfrom äftendlng, the Chalonan o/ the Meeäng shall be deftermined by etwUon of the General Me^Irig of Shareholdws chäred by the sharehotder wtth the hlghest degreö of shäre ownerehtp represent«! in the mseting or by tts proxy. (2) Der Vereammlungslefer bsstimmt Irt» Rahmen der gesetzHchen BesUminungen die Relhenfds® der Oftgenstände der Tagesordnung sowie An und Form der Abstimmuftgen. (2j Wtthln the franfiework of statytory provlslons, the Chalnpan ofthe Meeting shall determtne the örder In whlch the Items on the agenda are to be deatt w№i and the type and fonn of voüng. (3) Der VeFsammIungsletter . kann das Frag®. (3) und Rederecht der Aktlonä»^ zeiüich angemessen besehränken. Er ist (n6be$oridwe berechtigt, zu Beginn der Hayptversammlung öder während Ihreä Voriaufe den aseftflöhen Rahmen des gesamten Vereammtungsveriaufe, der Aussprache zu ' den einzelnen Tagesordnungspunkten oder der einzelnen Frage- und Redebetträge angemessen festzusetzen. The Chalnnan of the Meeting may establish reäsonable temporal llmtts for the sharehpfders' right to put quesflons and sddress the General Meethg of Shafeholders, In paräcylar, the chalrperson shall be enäüed to flx, 8t the beglnnlng of the General Meeting of Shareholder or during Its couree, reasonable time frfimes for the entlre General Me^ing of'Shareholdere, for dellberatlons on №e Individual Kerns of the agenda or for the Indivldual contributlons made by askers &nd Speakers. Der Versammlungsleiter kann rine (4) Obertragung der Hauptveraammlung tn Tcn und Bfld In einer von jhm näher zu besämmenden W^se zulassen. (5) Mitglieder des Verwaltungsrates können in Abstimmung mit dem Versammlungsleiter an der Hauptversammlung der Gesellschaft auch im Wege der Ton- und Bitd- Übertragung teilnehmen, wenn sie dienstlich bedingt verhindert sind oder die Anreise zum Ort der Hauptversammlung mit erheblichem Zeit- oder Kostenaufwand verbunden wäre. (5) The Chafrrnan of the Meeting may pannlt audto and video transmleslon of the General Meetfng ofShareholdere In a manner whlch h6 shall deflne In further In consultation with the Chairman of the Meeting, Members of the Administrative Board may also artend the Company's General Meeting of Shareholders by means of audlo and video transmission, if such Members of the Administrative Board are tied up with business or their attendance would require time-consuming or expensive travel to the venue of the General Meeting of Shareholders. 35

 
§20 Hauptversammlungstoeschiasse §20 l-t^solutjon» öfäw Seneral Mwttng of SHapßholder» (1) Dte I-lauptWBBsirifldung biMßhnBBl nur tn 'W The Öeneral Meaäi^ tf Shanihotdere den Im öesete oder fn der Sateung $hfill oftly pass rtttcrfua<m6 on such üesflmmten Falten, ma^^as^tipulatedbystatutorylawor (n the ertietes of wsodatton. (2) SoweK ach aus den BA»Rg<»iden VorsGhrlSw nlc(rt8 Abweleliendes ergibt, fet dte Hauptversammlung nur bwchlusstöhlg, wenn mindestens ein Üritfel des Grundkapitals der Gesellschaft In der Hauptversammlung vertreten Ist <Qüorum). Wird das Quorutn ntöit erreicht. so Ist unväzügHd'i eine wöltere Hauptvereamintung mit derselben Tagesordnung elnzubenrfen, wet<rfie ohne ROckstcht auf das vwvetßne Grunäkapltal der Öesellsdiaft btechlusstöhtg ist, wann hierauf In der Bnberufung hingewiesen worden Ist. (2) To the extent maMtätoiy istatutory law does not proviäe «herwise, ttie General Meeüng of Shafgholdere sheU ortly be valfdty consütuted ff at least one tWrd of the share capltal of Uie. GCTnpany is represented at the Gwieral Meeünfl of Shsfehclders (quorum). In case the General Meefing of Shareholdens does not have the quorum, a ftirth®!" General Meeting of Shjareholdete with ttie same agend$ №all be oonvcned wfthout undue delay. whlch shalt be valldly conäituted regardless of the share captel of the Company representfed tf the convocaäon expllctüy pointe out to suchfact, (3) Die Beschlüsse der Hauptversammlung werden, soweit nicht zwingende gesetzliche Vorschriften oder die Satzung etwas anderes vorschreiben, mit der einfachen Mehrheit der abgegebenen Stimmen und, sofern das Gesetz außer der Stimmenmehrheit eine Kapital- mehrheit vorschreibt, mit der einfachen Mehrheit des bei der Beschlussfassung vertretenen Grundkapitals gefasst. (3) Resolutions of the General Meeting of Shareholders shall be passed with a simple majority of the valid votes cast, unless a higher majority is required by mandatory law or by these Articles of Association and, if the law prescribes a capital majority in addition to the voting majority, by a simple majority of the share capital represented when the resolution is adopted. »48>2^0»-S30Yl *. PBiaift|1<U«8(UB 36

 
Soweit nicht zwingende gesetzliche Vorschriften entgegenstehen, bedarf es für Satzungsänderungen einer Mehrheit von zwei Dritteln der abgegebenen gültigen Stimmen bzw., sofern mindestens die Hälfte des Grundkapitals vertreten ist, der einfachen Mehrheit der gültigen abgegebenen Stimmen. Sofern das Gesetz für Beschlüsse der Hauptversammlung außer der Stimmenmehr- heit eine Kapitalmehrheit vorschreibt, genügt, soweit gesetzlich zulässig, die einfache Mehrheit des bei der Beschlussfassung vertretenen Grundkapitals. Das in § 103 Abs. 1 Satz 2 AktG vorgesehene Mehrheitser- fordernis bleibt unberührt. Unless this conflicts with mandatory legal provisions, amendments to the Articles of Association require a majority of two-thirds of the valid votes cast or, if at least one-half of the share capital is represented, the simple majority ofthe valid votes cast. As far äs the law requires a capital majority in addition to a majority of votes for resolutions of the General Meeting, a simple majority ofthe share capital represented at the time the resolution is passed shall be sufficient to the extent that this is legally permissible. The majority requirement set out in §103 para. (1) sentence 2 German Stock Corporation Act (AktG) remains unaffected. Beschlüsse, die gemäß § 20 Abs. 3 mit einfacher Stimmen- oder Kapitalmehrheit gefasst werden können sind insbesondere, aber nicht ausschließlich, alle Beschlüsse der Hauptversammlung über Resolutions that can be passed with a simple majority vote or capital majority vote pursuant to Section 20 para. (3) are, in particular but not exclusively, all relevant resotutions of the General Meeting regarding Kapitalerhöhungen mit Bezugsrecht der Aktionäre gegen Einlagen (§ 182 Abs. 1 AktG), jedoch nicht für die Ausgabe von Vorzugsaktien ohne Stimmrecht (§ 182 Abs. 2 Satz 1 AktG), capital increases with shareholders' pre- emptive rights against contributions (Section 182 para. (1) AktG), but not for the issuance of non-voting preferred shares (Section 182 para(1)sent. 2AktG), Kapitalerhöhungen aus Gesellschaftsmitteln (§ 207 Abs. 2 AktG i. V. m. § 182 Abs. 1 AktG), und capital increases from Company funds (Section 207 para. (2) in conjunction with Section 182 para. (1) AktG), and Ausgabe von Wandelschuldverschreibungen, Gewinnschuldverschreibungen und sonstigen Instrumenten, auf die die Aktionäre ein Bezugsrecht haben (§ 221 AktG). the issuance of convertible bonds, profit participation bonds and other instruments for which the shareholders have a pre-emptive right (Section 221 AktG).

 
(4) Jede $tOckaRUe gewährt eine $8>nme. (4) One vote shall be efforded to eadh ftö- psrvalueshare. 7. JUti»chti(U. R«ichhühciSl6äünaund Geartnnserwttnduna Sectlön 7, Renderlna of Accounts and Aüpro'DrIatlwh 6f Profits §21 Jahresabschtuss S 21 Ann<ttl Rnaindal Stetements Stritt der VenMaltungsrat den Jahresabschluss fest, so kann er den'JahtesQberechuss ganz oder teilweise In andwe Qewinnroddagen etnstenen. Dl» Elnstsllünsi eines größeren T«(ls als der Hfiffie des jahttesßberschüsses Ist Jedoch nicht zulässig, wenn die anderen Gewtnnrößkl^gen die Hälfte des Grundkapltels flberetdgen oder soweit sie nadi der Einstellung die Hälfte Obereteigen wOnien. Vom Jattfesßbersdiuss sind Jeweils die Befrage, die In die gesetdlchö Rttcklage einzustellen sind, und ßln Veriustvortreg vorab abzuziehen. If the Admlnistreäve Boarä approvas the annual finandat statemente. then tt may apptopriate the apnual profit för the year to öfter revende restfn/es In w^iofe or In pari The ̂ »proprlaflon öf more tf>an half of the annual pröflt for the year Is not ddmisslble, however, If fte other revenue reserves exceed half of the share capttal or Insofar äs ; they would exceed half of the share oapltal föltowlng such appropriatlon. Any amounts alloßated to the etatytory reserve and any accaurtUfated xleficjt brought iomarü from the prtor year have to bs deäücted from' Vhs annual pro» for the year in advanoe. §22 ©ewlnnvi&rwendung §22 Dlsposal of Corporato Protfta (1) Ob®- die Verwendung des Ktenzsiewtnns beschließt dte Hauptversanimlunfl. Dte Hau mtu" känn B"sfe<te o(;ler (1) The General Meeäng of Shareholdere shefl dedde upon fhä dlsposal of co rate rdtte. TTie General Meetin ^ffi^2iA.̂ P<". dlN»i|»OK^a*» 37

 
neben einer BarausschOttung auch SachausschQttur® beschUeßön. efne may resdva to make äistributtons (n Mnd, In place of or In addlüon tö ca^ dfsfrIbuUons, (ä) Soweit die Gesellschaft Genussschelne ausgegeben hat oder ausgrtien vrfrd und sich aus den jeweiligen Qenussrechtebe<<lngyngen ffir die tnhator der Genus»che|ne efp Aropruch auf AusschQttund aus dem Bilanzgewinn 'esrflibt, tet dor Aispruch der Aktionäre auf diesen Teil des BBanzgewInns aysgeschfossen. C2) Insofar äs the Company has Issued' partclpaäon certfflcates or does so In j future and If the rospecäve condltions of i üie partldpatlon certfflcates sUpylato (hat the Iwarers of fh6 parttdpaäon certfflcates are entWJed to <nsWt>u(ion of j dh/Idends from Sie net Irtcome, the ehareholders' entltlement to fhis part o/ the nef income shäll be exdude.d. (3) Nach Ablauf ehies Geschäftsjahres kann der (3) After explraäon tif a finandal year, the Verwattungscat unter BeacWiins der Vorgataen des §58 AktG auf den voraussichtlichen Bilanzgewinn eirten Abschlag an die Aktionäre zahlen. Admintstnaäve Board may, in accordanpe wläl the requlrements of Secäon69 6f the German Stoek CorporaäonAct. pay to the shareholders an histalment of üie expected balance sheet profits. S. Abtchnltt. SchlussbeBtrmmunoBö §23 Gründyngsaufwand Sectlon 8; Plnal Provlslons S 23 Exponaes for Formation t3ie Kosten der Gründung tragen die Grönder- Th$ founders shall bear the costs of fte fermatlon. l»48t2.3032-3!?30vl iA.»waanr)<tf»8« ig«^t>«K»l*n 38

 
§34 Sdvatorische Klausel §24 Swerabllity Clause SoUten eine oder mehrere Besflipmuagen cBesw If öne Ar several proylslons öf these aräcles of Satzuftg, ganz oder In Telten nlchüg oder assodatlohareorwlffbeconielnvalkllnwhole unwirksam sehi <x(w werden, so <Mrd dlei Gültigkeit Qf In part, the validtty of the remalolng pari» of; <ter8at2ung im Obffgen hiervon nicht berfflirt (hs artfdes of assodaäon remalns unaffeiäed.i §2S Sonstiges §26 Mtecellaneous BeJAbwelohung der englischen von derdeytechan Fassung dlesw Satzung ist elleln dfe deutsche Fassung ausschlaggebend. In the event of devlaäons of the Englfeh veftlon froni the Gennan verelon of fhese artldes of assoclatfon, the Gennan vereton shan prevall. WWSSS^Mrt^ ^ ,WBaiBn<B«»«in*a>aiw«»t. Ndw «ti<iiii»iiiimriTnn_-'T '— 39

 
Bescheinigung gemäß §181Abs. 1AktG Certificate pursuant to Section 181 para 1 Stock Corporation Act (AktG) Ich bescheinige hiermit, dass die geän- derten Bestimmungen der Satzung der Spark Networks SE mit Sitz in München mit dem Protokoll der Hauptversammlung über die Satzungsänderung vom 1 1. Au- gust 2021 und die unveränderten Best- immungen mit dem zuletzt dem Handels- register eingereichten vollständigen Wort- laut der Satzung übereinstimmen. l hereby certify that the wording of the Articles of Association of Spark Networks SE with its registered Office in Munich contains the provisions of the articles of association äs amended by the resolution of the general meeting dated 11 August 2021 and the unchanged pro- visions of the articles of association cor- respond to the complete wording of the articles of association which have been filed with the commercial registry most recently. Berlin, 17 August 2021 / 17 August 2021 L.S gez./sign. Dr. Friedemann Eberspächer Notar / Notary

 
EXHIBIT 10.1
EMPLOYMENT AGREEMENT
This Employment Agreement (this “Agreement”) is effective as of August 10, 2021 (the “Effective Date”) by and between Social Net, Inc., a Delaware corporation (the “Company”) and wholly-owned subsidiary of Spark Networks, Inc., 3400 North Ashton Blvd., Suite #175, Lehi, Utah 84043 (“Spark Networks, Inc.”), and David Clark, an individual resident 3501 Goshen Rd, Newtown Square, PA 19073; USA, (Executive”).
WITNESSETH:
WHEREAS, the Company desires to retain Executive to serve as Chief Financial Officer of the Company effective August 10, 2021.
NOW THEREFORE, in consideration of the mutual obligations herein contained, the parties hereto, intending to be legally bound hereby, covenant and agree as follows:
 
1. EMPLOYMENT
(a) The Company is employing Executive to render services to the Company it’s affiliates (including Spark Networks SE and Spark Networks Inc.) in the position of Chief Financial Officer (“CFO”). Executive shall report to the Company’s Chief Executive Officer (“CEO”) in his capacity as CFO of the Company.
(b) Throughout the Term (as defined below), Executive shall devote his full business time and undivided attention to the business and affairs of the Company and its affiliates (including Spark Networks SE) and subsidiaries, except for reasonable vacations and illness or incapacity. In the event Executive desires to engage in any other paid employment or other customarily paid activity, invest in any other company or business, or serve as a member of any supervisory or advisory board or board of directors or similar governing authority of any other company, business or other institution, Executive must obtain the prior written consent of the Spark SE Board. Executive acknowledges and agrees that Executive shall adhere to a strict duty of loyalty to the Company, Spark Networks SE, their affiliates and subsidiaries when engaging in any “side activities” pursuant to this Section 1(b) and that engagement in any such “side-activity” shall not negatively affect the Company, Spark Networks SE, their affiliates or subsidiaries in any respect. Any consent granted to Executive pursuant this this Section 1(b) may be revoked at any time. For the avoidance of doubt, the foregoing provisions shall not apply to any investments made in connection with any retirement or pension scheme, provided that Executive does not have the ability to direct funds to any particular entity.
2. TERM
The term of this Agreement (the “Term”) shall commence on the Effective Date and shall continue until terminated pursuant to Section 4 hereof.
3. COMPENSATION AND BENEFITS
For services rendered by Executive during the Term of this Agreement, and for his performance of all additional obligations of employment, the Company agrees to pay Executive and Executive agrees to accept the following salary, other compensation, and benefits:
(a) Base Salary. During the Term, the Company shall pay Executive a base salary at the annual rate of $400,000 USD (the “Annual Base Salary”) to be paid evenly over the course of the year in accordance with Company’s standard payroll policies. During the Term, the Annual Base Salary will not be increased or decreased.

1

EXHIBIT 10.1
(b) Annual Bonus. In addition to the Annual Base Salary, Executive is currently eligible to receive an annual bonus with a target amount of not less than fifty percent (50%) of his Annual Base Salary (the “Minimum Bonus Amount”) for the calendar year 2021 and subsequent calendar years based on the achievement of individual and Company performance goals for such years to be determined by the Spark SE Board (the “Annual Bonus”). Except as set forth in Section 4 below: (1) any Annual Bonus payable to Executive shall be paid at the same time that annual bonus payments are paid to other employees of the Company and Spark Networks SE and (2) Executive’s eligibility to receive such bonus shall be conditioned on the status of the Executive as an active employee of the Company on the date on which such bonus is paid, having not given or received notice of termination of employment prior to the time of the payment.
(c) Benefits.
(i) Executive shall be entitled to participate, as long as he is an employee of the Company, in any and all of the Company’s present or future employee benefit plans, including without limitation pension plans, thrift and savings plans, insurance plans, and other benefits that are generally applicable to the Company’s executives; provided, however, that the accrual and/or receipt by Executive of benefits under and pursuant to any such present or future employee benefit plan shall be determined by the provisions of such plan.
(d) Business Expenses. Executive shall be reimbursed, in accordance with Company policies and guidelines, for all reasonable expenses incurred in connection with the conduct of the Company’s business upon presentation of evidence of such expenditures, including but not limited to entertainment of business partners and travel expenses incurred by Executive in the performance of his duties; provided that such expenses were incurred in the interest of the Company. In the event Executive travels by train, the cost of a first-class fare will be reimbursed by the Company. If Executive travels by plane, the Company will reimburse the amount of an economy fare for any flight up to five and one-half (5.5) hours in duration. The Company will reimburse the amount of business class fare for any flight that exceeds five and one-half (5.5) hours in duration. For the avoidance of doubt, the Company will reimburse Executive for the reasonable expenses incurred in connection with Executive’s regular trips between Philadelphia and Berlin, upon presentation of evidence of such expenditures, including but not limited to airfare in accordance with this Section 3(d), ground transportation, accommodation and meals.
(e) Legal Advisor Expenses. Executive shall be reimbursed for all reasonable legal expenses incurred in connection with the review and/or negotiation of this Agreement.
4. TERMINATION OF EMPLOYMENT.
(a) Termination of Employment.
(i) Termination with or without Cause. Subject to the terms and conditions of this Section 4, either the Company or Executive may terminate Executive’s employment at any time, with or without “Cause” or “Good Reason” (such terms defined below), during the Term. Any termination of Executive’s employment during the Term shall be communicated by written notice of termination from the terminating party to the other party. However, in the event that Executive is terminated by the Company without Cause, or terminates his employment with the Company with Good Reason, he shall be entitled to receive payment of any Annual Bonus earned, but not yet paid by the Company (the “Earned Annual Bonus”). Furthermore, Executive shall be entitled to payment of a “Pro Rata Annual Bonus,” which shall mean the Annual Bonus equal to which Executive would have been entitled if he had been employed by the Company on the last day of the year, multiplied by a fraction, the numerator of which is the number of days in such year during which the Executive was actually employed by the Company and the denominator of which is three hundred sixty five (365). The Earned Annual Bonus (if any) and

2

EXHIBIT 10.1
the Pro Rata Annual Bonus shall be paid not later than the second day following the effective date of his termination.
(ii) Termination by Death. Executive’s employment shall terminate automatically upon Executive’s death (such termination, termination “By Death”). The Company shall pay to Executive’s beneficiaries or estate, as appropriate, any compensation then due and outstanding. Thereafter all obligations of the Company under this Agreement shall cease. Nothing in this Section shall affect any entitlement of Executive’s heirs or devisees to the benefits of any life insurance plan or other applicable benefits.
(iii) Termination By Disability. If Executive becomes eligible for the Company’s long term disability benefits or if, in the sole opinion of the Company, Executive is unable to carry out the responsibilities and functions of the position held by Executive by reason of any physical or mental impairment for more than ninety (90) consecutive days or more than one hundred and twenty (120) days in any twelve (12) month period, then, to the extent permitted by law, the Company may terminate Executive’s employment (such termination, termination “By Disability”). The Company shall pay to Executive all compensation to which Executive is entitled up through the date of termination, and thereafter all obligations of the Company under this Agreement shall cease. Nothing in this Section shall affect Executive’s rights under any disability plan in which Executive is a participant.
(b) Severance. Except in situations where the employment of Executive is terminated for Cause, By Death or By Disability (as defined below), in the event that the Company terminates Executive’s employment at any time, Executive will be eligible to receive (i) an amount equal to one (1) year of the Executive’s then-current Annual Base Salary, payable in the form of salary continuation (“Severance”) and (ii) the Executive’s unvested Options shall vest in the number of Options that would have vested on the next Vesting Date following the effective date of termination (as defined in the Spark Networks SE 2020 Long Term Incentive Plan) had the Executive remained employed by the Company at that Vesting Date. Such Severance shall be reduced by any remuneration paid to Executive because of Executive’s employment or self-employment during the severance period, and Executive shall promptly report all such remuneration to the Company in writing. Executive’s eligibility for Severance is conditioned on Executive having first signed a release agreement in the form reasonably acceptable to the Spark SE Board. Executive shall not be entitled to any Severance if Executive’s employment is terminated for Cause, By Death or By Disability (as defined below) or if Executive’s employment is terminated by Executive.
If any plan pursuant to which severance welfare benefits are provided is not, or ceases prior to the expiration of the period of continuation coverage to be, exempt from the application of Section 409A under Treasury Regulation Section 1.409A-1(a)(5) or the Company is otherwise unable to continue to cover Executive under its group health plans without substantial adverse tax consequences, then an amount equal to each remaining premium payment shall thereafter be paid to Executive as currently taxable compensation in substantially equal monthly installments over the continuation coverage period (or the remaining portion thereof). All legally required and authorized deductions and tax withholdings shall be made from the payments described in the previous sentence, including for wage garnishments, if applicable, to the extent required or permitted by law.
 
(c) Taxes and Withholdings. The Company may withhold from any amounts payable under this Agreement, including any benefits or Severance, such federal, state or local taxes as may be required to be withheld, and all other authorized deductions, including for wage garnishments, if applicable, to the extent required or permitted by applicable law or regulations, which amounts shall be deemed to have been paid to Executive. Effective immediately upon termination of employment, Executive shall no longer be eligible to contribute to or to receive additional Company contributions as an active participant in any retirement or benefit plan covering employees of the Company, but shall continue to have all rights under each such plan that are afforded to terminated employees and inactive participants.

3

EXHIBIT 10.1
(d) Nonduplication of Benefits. Notwithstanding any provision in this Agreement or in any other Company or Spark Networks SE benefit plan or compensatory arrangement to the contrary, (i) any payments due under Section 4(b) shall be made not more than once, if at all, and (ii) Executive shall not be entitled to severance benefits from the Company other than as contemplated under this Agreement, unless such other severance benefits provide for larger benefits than under this Agreement.
(i) Definitions.
(i) “Cause” means: (i) Executive commits a crime involving dishonesty, breach of trust, or physical harm to any person; (ii) Executive willfully engages in conduct that is in bad faith and materially injurious to the Company, including but not limited to, misappropriation of trade secrets, fraud or embezzlement; (iii) Executive commits a material breach of this Agreement, which breach is not cured within twenty days after written notice to Executive from the Company; (iv) Executive willfully refuses to implement or follow a lawful policy or directive of the Company, which breach is not cured within twenty (20) days after written notice to Executive from the Company; or (v) Executive engages in misfeasance or malfeasance demonstrated by a pattern of failure to perform job duties diligently and professionally. The Company may terminate Executive’s employment for Cause at any time, without any advance notice. The Company shall pay Executive all compensation to which Executive is entitled up through the date of termination, subject to any other rights or remedies of the Company under law; and thereafter all obligations of the Company under this Agreement shall cease.
(ii) “Good Reason” means: (i) Company effects a material diminution in the Executive’s Annual Base Salary or Annual Bonus, (ii) Company effects a material diminution in Executive’s title, authority, duties and responsibilities as compared to Executive’s title, authority, duties and responsibilities measured immediately after the Effective Date, (iii) any requirement by the Company that Executive relocate his personal residence, (iv) any requirement that the Executive report to anyone but the CEO of the Company, and (v) any material breach by the Company or its Affiliates of this Agreement, or any of the Executive’s other agreements with the Company or Affiliates.
(iii) “Section 409A” means Section 409A of the Internal Revenue Code of 1986, as amended, (“Code”) and all applicable guidance promulgated thereunder.
 
5. NON-SOLICIT; NON-COMPETE
(a) Non-Solicitation. During Executive’s employment with the Company, and for a period of twelve (12) months thereafter, Executive will not knowingly, separately or in association with others, materially and substantially interfere with, impair, disrupt or damage the Company’s or its Affiliates relationship with any of the Strategic Partners of the Company or Spark Networks SE with whom Executive has had contact by contacting them for the purpose of inducing or encouraging any of them to divert or take away business from the Company or Spark Networks SE and to an enterprise that is in direct competition with the Company Business. Strategic Partners are those third party vendors which are providing product features as a service to the Company and/or its Affiliates and/or with whom the Company and/or its Affiliates are engaged in a revenue share model.
(b) Non-Solicitation of Employees. During Executive’s employment with the Company, and for a period of twelve (12) months thereafter, Executive will not, knowingly, separately or in association with others, materially and substantially, interfere with, impair, disrupt or damage the Company’s or Spark Networks SE’s business by directly contacting any Company or Spark Networks SE officers or key employees for the purpose of inducing or encouraging them to discontinue their employment with the Company or Spark Networks SE; provided, however, that the foregoing provisions shall not (i) restrict Executive from directly or indirectly making any general solicitation for employees, making a public advertising or participating in any job fairs or recruiting workshops or (ii) preclude Executive from soliciting and/or hiring any officer, key employee or other person at any time (A) in

4

EXHIBIT 10.1
the case of voluntary terminations, later than six (6) months after such person’s termination of employment from the Company or Spark Networks SE and (B) in the case of all other terminations, after such person’s termination of employment from the Company or Spark Networks SE.
(c) Non-competition.
(i) Non-competition. For a period of twelve (12) months following the termination of Executive’s employment with the Company (the “Non-compete Period”), Executive will not directly or indirectly engage in any business (whether as an employee, consultant, director, member, partner or shareholder of more than five percent (5%) of the capital stock of any company, business or other institution) that is in direct or indirect competition with any active or planned business of the Company in any geographic area in which the Company, Spark Networks SE, any of their affiliates or subsidiaries is active as of the date of the termination of this Agreement.
6. CONFIDENTIAL INFORMATION; INTELLECTUAL PROPERTY
(a) Proprietary Information and Inventions Assignment Agreement. Executive shall adhere to the guidelines and requirements shown in Exhibit A to this agreement governing the treatment of the Intellectual Property Rights and Confidential Information (“PIA”). The provisions of the PIIAA are incorporated into this Agreement by reference as if such provisions were terms and conditions of this Agreement.
7. MISCELLANEOUS
(a) Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the Company and its successors and assigns. Executive shall not be entitled to assign any of Executive’s rights or obligations under this Agreement without the Company’s written consent, provided that upon Executive’s death, Executive’s named beneficiaries, estate or heirs, as the case may be, shall succeed to all of Executive’s rights under this Agreement.
(b) Nonexclusivity Rights. Executive is not prevented from continuing or future participation in any Company benefit, bonus, incentive or other plans, programs, policies or practices provided by the Company subject to the terms and conditions of such plans, programs, or practices.
(c) Entire Agreement. This Agreement supersedes any prior agreements or understandings, oral or written, with respect to employment of Executive and constitutes the entire Agreement with respect thereto. This Agreement cannot be altered or terminated orally and may be amended only by a subsequent written agreement executed by both of the parties hereto or their legal representatives, and any material amendment must be approved by a majority of the voting shareholders of the Company.
(d) Waiver. Either party’s failure to enforce any provision of this Agreement shall not in any way be construed as a waiver of any such provision, or prevent that party thereafter from enforcing each and every other provision of this Agreement
(e) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania.
(f) Litigation Costs and Expenses. In any action to enforce the terms of this Agreement, the prevailing party shall be reimbursed by the non-prevailing party for such prevailing party’s reasonable attorneys’ fees and costs, including the costs of enforcing a judgment.

5

EXHIBIT 10.1
(g) Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provisions, which shall remain in full force and effect.
(h) Interpretation; Construction. The headings set forth in this Agreement are for convenience only and shall not be used in interpreting this Agreement. This Agreement has been drafted by legal counsel representing the Company, but Executive has participated in the negotiation of its terms. Furthermore, Executive acknowledges that Executive has had an opportunity to review and revise the Agreement and have it reviewed by legal counsel, if desired, and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement.
 
(i) Arbitration. Any dispute, claim or controversy arising out of or relating to this Agreement or the breach, termination, enforcement, interpretation or validity thereof, including the determination of the scope or applicability of this agreement to arbitrate, shall be determined by arbitration in New York City, New York, before three arbitrator(s). The arbitration shall be administered by JAMS pursuant to its Comprehensive Arbitration Rules and Procedures. Judgment on the Award may be entered in any court having jurisdiction. This clause shall not preclude parties from seeking provisional remedies in aid of arbitration from a court of appropriate jurisdiction, in which case each party consents to the jurisdiction and venue of the state and federal courts located in New York, New York. All forum costs related to such arbitration shall be borne by the Company.
(j) Notices. Any notices, requests or other communications provided for by this Agreement shall be sufficient if in writing and if sent by registered or certified mail to Executive at the last address he has filed in writing with the Company or, in the case of the Company, at its principal offices.

8. COMPLIANCE WITH CODE SECTION 409A
With respect to any compensation payable or benefits to be provided under this Agreement that are subject to Section 409A, this Agreement is intended to comply with the provisions of Section 409A. In furtherance of this intent, to the extent that any compensation payable or benefits to be provided under this Agreement are subject to Section 409A, this Agreement shall be interpreted, operated, and administered in a manner consistent with these intentions, and the parties agree to amend this Agreement further (if necessary) in order to avoid the adverse tax consequences of Section 409A. Notwithstanding any other provision of this Agreement to the contrary, no severance pay or benefits to be paid or provided to Executive, if any, pursuant to this Agreement that, when considered together with any other severance payments or separation benefits, are considered deferred compensation under Section 409A (together, the “Deferred Payments”) will be paid or otherwise provided until Executive has had a “separation from service” within the meaning of Section 409A. Similarly, no severance payable to Executive, if any, that otherwise would be exempt from Section 409A pursuant to Treasury Regulation Section 1.409A-1(b)(9) will be payable until Executive has had a “separation from service” within the meaning of Section 409A. Each payment and benefit payable under this Agreement is intended to constitute a separate payment and the right to a series of installment payments under this Agreement will be treated as a right to a series of separate payments. If Executive is a “specified employee” within the meaning of Section 409A at the time of his “separation from service” (within the meaning of Section 409A), then the Deferred Payments that would otherwise be payable within the six (6) month period following his separation from service will be paid in a lump sum on the date six (6) months and one (1) day following the date of his separation from service (or the next business day if such date is not a business day). All subsequent Deferred Payments, if any, will be payable in accordance with the payment schedule applicable to each payment or benefit. If Executive dies following his separation from service, but prior to the six (6) month anniversary of his separation from service, then any

6

EXHIBIT 10.1
payments delayed in accordance with this paragraph will be payable in a lump sum as soon as administratively practicable after the date of his death and all other Deferred Payments will be payable in accordance with the payment schedule applicable to each payment or benefit.
9. COMPLIANCE WITH CODE SECTION 280G
In the event that it is determined by the Company in its sole discretion that any payment or benefit to the Executive under this Agreement, or otherwise, either cash or non-cash, that the Executive has the right to receive from the Company, including, but not limited to, accelerated vesting or payment of any deferred compensation, restricted stock or any benefits payable to Executive under any plan for the benefit of employees, would constitute an “excess parachute payment” (as defined in Section 280G of the Code), then such payments or other benefits will be either (a) delivered in full, or (b) delivered as to such lesser extent which would result in no portion of such payments or benefits being subject to excise tax under Section 4999 of the Code, whichever of the foregoing amounts, taking into account the applicable federal, state and local income taxes and the excise tax imposed by Section 4999 of the Code, results in the receipt by Executive on an after-tax basis of the greatest amount of payments and benefits, notwithstanding that all or some portion of such payments or benefits may be taxable under Section 4999 of the Code. The order in which the payment will be reduced are (i) cash payments; (ii) equity-based payments that are taxable; (iii) equity-based payments that are not taxable; (iv) equity-based acceleration; and (v) other non-cash forms of benefits. Within any such category of payments and benefits (that is, (i), (ii), (iii), (iv) or (v)), a reduction shall occur first with respect to amounts that are not “deferred compensation” within the meaning of Section 409A of the Code and then with respect to amounts that are. In no event will Executive have any discretion with respect to the ordering of payment reductions.
[Signature Page Follows]
 

7

EXHIBIT 10.1
IN WITNESS WHEREOF, the parties have executed this Agreement on the day and year first above written.
 

SOCIAL NET, INC.
 
By:   /s/ Trini Szoyka
Name:   Trini Szoyka
Title:   Secretary / Head of HR, U.S.
DAVID CLARK
 
/s/ David Clark


8

EXHIBIT 10.2






Contract Amendment


Between
Spark Networks SE
Kohlfurterstr. 41/43
D-10999 Berlin
hereinafter referred to as "Company”

and
Gitte Bendzulla
Danziger Strasse 75
10405 Berlin
hereinafter referred to as "Executive Director" (Geschäftsführende Direktorin)
In amendment to the Executive Director Service Agreement from 29.05.2020 (“Executive Director Service Agreement”) the following amendment will be concluded:



§ 1 Präambel

Mit Beschluss vom 26. Juni 2019 hat der Verwaltungsrat der Gesellschaft Frau Bendzulla mit sofortiger Wirkung zum Geschäftsführer der Gesellschaft ernannt. In Ergänzung zum bestehenden Executive Director Service Agreement nebst etwaiger Ergänzungsvereinbarung, und in Umsetzung des Beschlusses des Verwaltunsgrates der Gesellschaft vom 09. Juni 2021 vereinbaren die Vertragspartner mit Wirkung zum 15.06.2021 wie folgt:
Section § 1 Preamble

By resolution of June 26, 2019 the Company’s Administrative Board has appointed Gitte Bendzulla as executive director of the Company with immediate effect. Executing the respective resolution of the Board of Directors of the Company of June 9th 2021, the Parties agree to the following amendments to the Executive Director Service Contract as emended, effective June 15, 2021:
§ 2 Änderungen Section § 2 Amendments
(1) § 3 (2) Laufzeit der Vereinbarung
Kündigt die Gesellschaft den Vertrag gem. 3 Abs. 1 hat die Executive Direktorin Anspruch auf eine Abfindung in Höhe ihres Vergütungsanspruchs für sechs monatliche Vergütungen gemäß § 4 zuzüglich des anteiligen variablen Jahresbonus bei einer Zielerreichung von 100 %. Die Abfindung ist mit der letzten regulären Gehaltszahlung fällig und zahlbar. VSOP oder Aktienoptionen, die der Executive Direktorin gemäß § 4 Abs. 3 gewährt wurden, die innerhalb der nächsten drei Monate nach Wirksamwerden der Kündigung vesten, bleiben unberührt und vesten.
(1)Section § 3 (2) Duration of the Agreement In case the company terminates the Agreement in accordance with sec. 3 (1) the Managing Director shall be entitled to receive a severance payment equal to the amount of her remuneration entitlement for six equal installments under sect. 4 plus the pro rata variable annual bonus assuming a target achievement of 100%. The severance payment shall be due and payable together with the last regular salary payment. Any vesting of VSOP or stock option granted to the Managing Director under sect. 4 (3) due to occur within the next three months after the effective date of the termination shall continue to vest. 
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(2) § 4 (2) Vergütung
Zusätzlich zum festen Bruttojahresgehalt kann die Executive Direktorin derzeit einen jährlichen Bonus mit einem Zielbetrag von 30 % des dann aktuellen festen Bruttojahresgehalts erhalten. Die entsprechenden Ziele und die entsprechenden Bonuszahlungen werden jährlich vom Verwaltungsrat nach Anhörung der Executive Direktorin festgelegt. Die endgültige Höhe des Bonus wird dann jährlich vom Verwaltungsrat auf Basis der Zielerreichung zeitgleich mit der Feststellung des Jahresabschlusses der Gesellschaft durch die Wirtschaftsprüfer der Gesellschaft festgelegt. Der Jahresbonus, sofern vorhanden, ist am Ende des Monats fällig und zahlbar, der auf die Genehmigung des Jahresabschlusses folgt.




1.Section § 4 (2) Remuneration
 In addition to the fixed gross annual salary, Executive Director is currently eligible to receive an annual bonus with a target amount of 30% of the then current fixed gross annual salary. The relevant goals and corresponding bonus payments shall be established annually by the Administrative Board after consultation of the Executive Director. The final amount of the bonus shall then be determined annually by the Administrative Board based on target achievement at the same time as the annual financial statements of the Company are approved by the Company’s auditors. The annual bonus, if any, shall be due and payable at the end of the month following this approval of the annual financial statements. 
(3) § 11 (4) Nachvertragliches Wettbewerbsverbot
Die Gesellschaft ist berechtigt, jederzeit, auch nach Beendigung des Dienstverhältnisses, durch schriftliche Erklärung auf dieses Wettbewerbsverbot zu verzichten, sodass die Executive Direktorin mit sofortiger Wirkung von den Verpflichtungen befreit ist, und die Gesellschaft von der Verpflichtung zur Zahlung einer Entschädigung mit sofortiger Wirkung ab dem Zeitpunkt der Erklärung befreit ist.

(3) Section § 11 (4) Post-contractual Non-compete Covenant (with effect from 15.06.2021)
The Company shall be entitled to waive this non-compete covenant by written declaration at any time, including after the service relationship, with the effect that the Executive Director is released of the obligations immediately, the Company shall be free of the obligation to pay compensation with immediate effect starting from the date of declaration. 
- 3 -


§ 3 Schlussbestimmung

Sofern vorstehend nichts Abweichendes geregelt wird, bleiben die übrigen Bestimmungen des Arbeitsvertrages und eventuell zusätzlicher gültiger Vertragsänderungen unberührt.

Der englische Text dient nur zur Orientierung. Bei Unstimmigkeiten zwischen der deutschen Version und der englischen Version ist die deutsche Version maßgebend.
Section § 3 Concluding Provision

As far as this amendment does not state otherwise, the remaining provisions of the employment contract and any amendments shall remain unaffected.

The English text is provided for guidance only. In the event of any inconsistency between the German version and the English version, the German version shall prevail.
Berlin, 15.06.2021

/s/ David Khalil
Spark Networks SE
Represented by its Administrative Board, represented by the chairman of the Administrative
Board, Mr. David Khalil


/s/ Gitte Bendzulla
Gitte Bendzulla

- 4 -

EXECUTION VERSION LIMITED WAIVER UNDER LOAN AGREEMENT THIS LIMITED WAIVER UNDER LOAN AGREEMENT (this “Limited Waiver”) is entered into as of March 4, 2021, by and among SPARK NETWORKS SE, a Societas Europaea (Europäische Gesellschaft) with registered seat in Munich, Federal Republic of Germany, registered with the commercial register (Handelsregister) of the local court (Amtsgericht) of Munich under HRB 232591, Federal Republic of Germany (“Spark”), Spark Networks, Inc., a Delaware corporation (“Spark Inc.”) and Zoosk, Inc., a Delaware corporation (“Zoosk” and, together with Spark and Spark Inc., each a “Borrower”, and collectively, the “Borrowers”), the Guarantors signatory hereto, the Lenders signatory hereto and BLUE TORCH FINANCE LLC, a Delaware limited liability company, as administrative agent for the Lenders (in such capacity, together with its successors and permitted assigns in such capacity, the “Administrative Agent”). Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Amended Loan Agreement (as defined below). W I T N E S S E T H: WHEREAS, the Borrowers, the other Loan Parties from time to time party thereto, the Lenders from time to time party thereto and the Agents are parties to that certain Loan Agreement, dated as of July 1, 2019 (as amended by that certain Limited Waiver and First Amendment to Loan Agreement, dated as of May 20, 2020, that certain Second Amendment to Loan Agreement, dated as of December 2, 2020, and as the same may be further amended, restated, amended and restated, supplemented or otherwise modified from time to time prior to the date hereof, the “Loan Agreement”); WHEREAS, certain Events of Default have occurred under the Loan Agreement prior to the date hereof as more specifically set forth in that certain Letter re: Notice of Events of Default under Loan Agreement, Reservation of Rights delivered by the Administrative Agent to the Administrative Borrower on February 24, 2021 (the Events of Default specified therein are collectively referred to herein as the “Subject Defaults”); WHEREAS, the Borrowers have requested that the Administrative Agent and the Required Lenders waive the Subject Defaults and the Administrative Agent and the Required Lenders agree to do so, subject to the terms and conditions hereof. NOW, THEREFORE, in consideration of the mutual agreements, provisions and covenants contained herein, the parties hereto hereby agree as follows: 1. Limited Waiver. On the Waiver Effective Date, upon satisfaction (or waiver) of the conditions set forth in Section 3 hereof, the Administrative Agent and the Lenders waive the Subject Defaults. The Administrative Agent and the Lenders’ agreement to waive the Subject Defaults shall in no way be deemed an agreement by the Administrative Agent or Lenders to waive any other Default or Event of Default. This waiver is specific as to content and time and shall not constitute a waiver of any other future default or breach of any other terms in the Credit Agreement or any other documents signed by the Loan Parties in favor of the Lenders and/or the Agents. The foregoing waiver shall also not be deemed to operate as, or obligate the Agents or the Lenders to grant any future waiver, modification of or consent to any other term, condition or Default or Event of Default under the Credit Agreement, including, for the avoidance of doubt, as any such term, condition, Default or Event of Default pertains to any represenetaiton or warranty that applies to information delivered by any Loan Party to the Administative Agent or any Lender connection with entry into this Limited Waiver. Nothing contained herein shall constitute a course of conduct or dealing among the parties. 3061/34089-014 CURRENT/122137279v3

 
2. [Reserved]. 3. Conditions. The effectiveness of this Limited Waiver is subject to the satisfaction (or waiver) of the following conditions precedent (such date, the “Waiver Effective Date”): (a) the execution and delivery of this Limited Waiver by each Loan Party, the Administrative Agent and the Required Lenders. Notwithstanding anything herein to the contrary, and for the avoidance of doubt, for purposes of determining compliance with the conditions specified in this Section 3, each of the Lenders and the Administrative Agent that have signed this Limited Waiver 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 such Lender or Agent. 4. [Reserved]. 5. Representations and Warranties. The Loan Parties, jointly and severally, hereby represent and warrant to the Administrative Agent and each Lender that the following are true and correct: (a) the representations and warranties made by each Loan Party contained in the Loan Documents are true and correct in all material respects as of the date hereof, except to the extent such representation or warranty expressly relates to an earlier date (in which case, such representations and warranties were true and correct in all material respects as of such earlier date), provided that, any representation and warranty that is qualified as to “materiality”, “Material Adverse Effect” or similar language shall be true and correct (after giving effect to any qualification therein) in all respects on such respective dates; (b) each Loan Party has the corporate or other organizational power and authority to execute, deliver, and carry out the terms and provisions of this Limited Waiver and has taken all necessary corporate or other organizational action to authorize the execution, delivery and performance of this Limited Waiver; (c) this Limited Waiver constitutes the legal, valid and binding obligations of each Loan Party, enforceable against such Person in accordance with their respective terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, moratorium, reorganization and other similar laws relating to or affecting creditors’ rights generally or by equitable principles relating to enforceability or the availability of equitable remedies, and, in respect of the English Security Documents and/or any UK Loan Party, subject to the Reservations and the Perfection Requirements; and (d) no Default or Event of Default shall have occurred and be continuing as of the Waiver Effective Date or would immediately result after giving effect to this Limited Waiver. 6. Fees and Expenses. The Borrowers shall within five (5) Business Days of the date of this Limited Waiver, pay to the Administrative Agent, all reasonable and documented out-of-pocket fees and expenses owed to the Administrative Agent (including in respect of reasonable and documented out-of- pocket fees of the Administrative Agent’s counsel and notary fees) in accordance with Section 12.05 of the Loan Agreement, which shall include all fees and expenses of Proskauer Rose LLP and Noerr LLP. 7. Waiver Fee. In consideration for the agreements of the Administrative Agent and the

 
Lenders contained herein, the Borrower hereby agrees to pay, substantially concurrently with the effectiveness of this Limited Waiver, to the Administrative Agent, for the ratable benefit of the Lenders party hereto, (i) a fee equal to 0.50% of outstanding principal balance of the Term Loan immediately prior to giving effect to this Limited Waiver, which shall be paid in cash immediately following the Waiver Effective Date and (ii) a fee equal to 0.25% of outstanding principal balance of the Term Loan immediately prior to giving effect to this Limited Waiver, which shall be paid in kind on the Waiver Effective Date by capitalizing such amount into the principal balance of the Term Loan (collectively, the “Waiver Fee”), which shall be fully earned, due and payable on, and subject to the occurrence of, the Waiver Effective Date and, once paid, shall be non-refundable. The portion of the Waiver Fee that is paid in kind shall constitue principal of the Term Loan for all purposes, including calculation of interest on subsequent Interest Payment Dates. 8. [Reserved]. 9. No Modification. Except as amended or consented to hereby, the Loan Agreement and other Loan Documents remain unmodified and in full force and effect. All references in the Loan Documents to the Loan Agreement shall be deemed to be references to the Amended Loan Agreement. This Limited Waiver shall constitute a Loan Document. 10. Effectiveness of Facsimile Documents and Signatures. This Limited Waiver may be transmitted and signed and delivered by facsimile or other electronic means. The effectiveness of such document and signatures shall have the same force and effect as manually signed originals and shall be binding on all Loan Parties, the Agents and the Lenders. 11. Counterparts. Any number of counterparts of this Limited Waiver, including facsimiles and other electronic copies (e.g. DocuSign, “pdf” or “tif”), may be executed by the parties hereto. Each such counterpart shall be, and shall be deemed to be, an original instrument, but all such counterparts taken together shall constitute one and the same agreement. 12. Successors and Assigns. The provisions of this Limited Waiver shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns; provided that any assignment by any Lender shall be subject to the provisions of Section 12.06 of the Loan Agreement, and provided further that, except as set forth in Section 9.03 of the Loan Agreement, the Loan Parties may not assign or transfer any of their respective rights or obligations under this Limited Waiver without the prior written consent of each Lender. 13. Governing Law. THIS LIMITED WAIVER, AND THE VALIDITY, INTERPRETATION, CONSTRUCTION, AND PERFORMANCE HEREOF SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND ANY CLAIM BY ANY PARTY HERETO AGAINST ANY OTHER PARTY HERETO (INCLUDING ANY CLAIMS SOUNDING IN CONTRACT OR TORT LAW ARISING OUT OF THE SUBJECT MATTER HEREOF AND ANY DETERMINATIONS WITH RESPECT TO POST-JUDGMENT INTEREST) SHALL BE DETERMINED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK FOR CONTRACTS MADE AND TO BE PERFORMED WHOLLY WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS REQUIRING APPLICATION OF THE LAW OF ANY OTHER JURISDICTION. 14. Jurisdiction; Waivers of Jury Trial. The provisions of Sections 13.01, 13.02, 13.03 and 13.04 of the Loan Agreement are incorporated by reference herein, mutatis mutandis, and shall have the same force and effect with respect to this Limited Waiver as if originally set forth herein.

 
15. Severability. All provisions of this Limited Waiver are severable, and the unenforceability or invalidity of any of the provisions of this Limited Waiver shall not affect the validity or enforceability of the remaining provisions of this Limited Waiver. Should any part of this Limited Waiver be held invalid or unenforceable in any jurisdiction, the invalid or unenforceable portion or portions shall be removed (and no more) only in that jurisdiction, and the remainder shall be enforced as fully as possible (removing the minimum amount possible) in that jurisdiction. In lieu of such invalid or unenforceable provision, the parties hereto will negotiate in good faith to add as a part of this Limited Waiver a legal, valid and enforceable provision as similar in terms to such invalid or unenforceable provision as may be possible. 16. Reaffirmation. Each of the Loan Parties as debtor, grantor, pledgor, guarantor, assignor, or in other any other similar capacity in which such Loan Party grants liens or security interests in its property or otherwise acts as accommodation party or guarantor, as the case may be, hereby (i) ratifies and reaffirms all of its payment and performance obligations, contingent or otherwise, under each of the Loan Documents to which it is a party (after giving effect hereto), (ii) each of the Loan Parties hereby represents and warrants that, to such Loan Party’s tknowledge, as of the date hereof, it neither has nor claims any offsets or defenses to the Obligations, and has no other claims or causes of action against any of the Lenders or the Administrative Agent, and (iii) to the extent such Loan Party granted liens on or security interests in any of its property pursuant to any such Loan Document as security for or otherwise guaranteed the Borrowers’ Obligations under or with respect to the Loan Documents, ratifies and reaffirms such guarantee and grant of security interests and liens and confirms and agrees that such security interests and liens hereafter secure all of the Obligations as amended hereby. Each of the Loan Parties hereby consents to this Limited Waiver and acknowledges that each of the Loan Documents remains in full force and effect (after giving effect hereto) and is hereby ratified and reaffirmed. The execution of this Limited Waiver shall not operate as a waiver of any right, power or remedy of the Administrative Agent or the Lenders, constitute a waiver of any provision of any of the Loan Documents or serve to effect a novation of the Obligations. 17. Release. In consideration of the agreements of the Administrative Agent and the Lenders contained herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, each Loan Party, on behalf of itself and its successors, assigns, and other legal representatives, hereby absolutely, unconditionally and irrevocably releases, remises and forever discharges the Administrative Agent, the Collateral Agent and each Lender and their respective successors, and their respective present and former shareholders, subsidiaries, divisions, predecessors, directors, officers, attorneys, employees, agents, advisors and other representatives (the Administrative Agent, the Collateral Agent, each Lender and all such other Persons being hereinafter referred to collectively as the “Releasees” and individually as a “Releasee”), of and from all demands, actions, causes of action, suits, covenants, contracts, controversies, agreements, promises, sums of money, accounts, bills, reckonings, damages and any and all other claims, counterclaims, defenses, rights of set-off, demands and liabilities whatsoever (individually, a “Claim” and collectively, “Claims”) of every name and nature, known or unknown, suspected or unsuspected, both at law and in equity, which such Loan Party or any of its successors, assigns or other legal representatives may now or hereafter own, hold, have or claim to have against the Releasees or any of them for, upon, or by reason of any circumstance, action, cause or thing whatsoever on account of, or in relation to, or in any way in connection with any of the Loan Agreement or any of the other Loan Documents or transactions thereunder or related thereto, in each case of the foregoing Claims, solely to the extent of such Claims arising by reason of any act, omission, matter, cause or thing whatsoever arising at any time prior to the date of this Limited Waiver. Each Loan Party understands, acknowledges and agrees that the release set forth above may be pleaded as a full and complete defense and may be used as a basis for an injunction against any action, suit or other proceeding which may be instituted, prosecuted or attempted in breach of the provisions of such release. Each Loan Party agrees that no fact, event, circumstance, evidence or transaction which could now be asserted or which may hereafter be discovered (in each case of the foregoing, to the extent related to any act, omission, matter, cause or thing whatsoever arising at any time prior to the date of this Limited Waiver) shall affect in any manner the final, absolute

 
and unconditional nature of the release set forth herein. -- Remainder of Page Intentionally Left Blank; Signature Pages Follow –

 
[Signature Page to Limited Waiver] IN WITNESS WHEREOF, each of the undersigned has executed this Limited Waiver as of the date set forth above. BORROWERS: SPARK NETWORKS SE By: _______________________________ Name: Gitte Bendzulla Title: Managing Director By: _______________________________ Name: Eric Eichmann Title: Managing Director SPARK NETWORKS, INC. By: _______________________________ Name: Eric Eichmann Title: President ZOOSK, INC. By: _______________________________ Name: Eric Eichmann Title: President DocuSign Envelope ID: 40B9B206-BD4D-422C-95FF-4DFE91F67EC5

 
[Signature Page to Limited Waiver] IN WITNESS WHEREOF, each of the undersigned has executed this Limited Waiver as of the date set forth above. BORROWERS: SPARK NETWORKS SE By: _______________________________ Name: Gitte Bendzulla Title: Managing Director By: _______________________________ Name: Eric Eichmann Title: Managing Director SPARK NETWORKS, INC. By: _______________________________ Name: Eric Eichmann Title: President ZOOSK, INC. By: _______________________________ Name: Eric Eichmann Title: President DocuSign Envelope ID: 305FE55D-C583-461E-9512-054C124F5FCA

 
[Signature Page to Limited Waiver] GUARANTORS: LOV USA, LLC By: _______________________________ Name: Eric Eichmann Title: President MINGLEMATCH, INC. By: _______________________________ Name: Yoon Um Title: Treasurer SMOOCH LABS INC. By: _______________________________ Name: Eric Eichmann Title: President SPARK NETWORKS USA, LLC By: _______________________________ Name: Eric Eichmann Title: President SPARK NETWORKS SERVICES GMBH By: _______________________________ Name: Gitte Bendzulla Title: Managing Director By: _______________________________ Name: Bert Althaus Title: Managing Director DocuSign Envelope ID: 305FE55D-C583-461E-9512-054C124F5FCA

 
[Signature Page to Limited Waiver] GUARANTORS: LOV USA, LLC By: _______________________________ Name: Eric Eichmann Title: President MINGLEMATCH, INC. By: _______________________________ Name: Yoon Um Title: Treasurer SMOOCH LABS INC. By: _______________________________ Name: Eric Eichmann Title: President SPARK NETWORKS USA, LLC By: _______________________________ Name: Eric Eichmann Title: President SPARK NETWORKS SERVICES GMBH By: _______________________________ Name: Gitte Bendzulla Title: Managing Director By: _______________________________ Name: Bert Althaus Title: Managing Director DocuSign Envelope ID: 41E6C6B1-8DC4-4450-ACB3-CB5C94D0BD0C

 
[Signature Page to Limited Waiver] GUARANTORS: LOV USA, LLC By: _______________________________ Name: Eric Eichmann Title: President MINGLEMATCH, INC. By: _______________________________ Name: Yoon Um Title: Treasurer SMOOCH LABS INC. By: _______________________________ Name: Eric Eichmann Title: President SPARK NETWORKS USA, LLC By: _______________________________ Name: Eric Eichmann Title: President SPARK NETWORKS SERVICES GMBH By: _______________________________ Name: Gitte Bendzulla Title: Managing Director By: _______________________________ Name: Bert Althaus Title: Managing Director DocuSign Envelope ID: 40B9B206-BD4D-422C-95FF-4DFE91F67EC5

 
[Signature Page to Limited Waiver] GUARANTORS: LOV USA, LLC By: _______________________________ Name: Eric Eichmann Title: President MINGLEMATCH, INC. By: _______________________________ Name: Yoon Um Title: Treasurer SMOOCH LABS INC. By: _______________________________ Name: Eric Eichmann Title: President SPARK NETWORKS USA, LLC By: _______________________________ Name: Eric Eichmann Title: President SPARK NETWORKS SERVICES GMBH By: _______________________________ Name: Gitte Bendzulla Title: Managing Director By: _______________________________ Name: Bert Althaus Title: Managing Director DocuSign Envelope ID: ED60D45E-9467-473F-AF91-42C114A2BCC3

 

 

 

 
[Signature Page to Limited Waiver under Loan Agreement] SPECIAL VALUE CONTINUATION PARTNERS, LLC TCP WATERMAN CLO, LLC TENNENBAUM SENIOR LOAN FUND V, LLC TCP DLF VIII-S FUNDING, LLC TCP DLF VIII-T FUNDING, LLC On behalf of each of the above entities: By: Tennenbaum Capital Partners, LLC Its: Investment Manager By: Name: Rajneesh Vig Title: Managing Director TCP WHITNEY CLO, LTD TCP RAINIER, LLC TCP DLF VIII 2018 CLO, LLC By: SERIES 1 OF SVOF/MM, LLC Its: Collateral Manager By: Name: Rajneesh Vig Title: Managing Director TCP DLF VIII ICAV, an umbrella type Irish collective asset management vehicle acting solely for and on behalf of its sub-fund TCP Direct Lending Fund VIII-U (Ireland) By: Tennenbaum Capital Partners, LLC Its: Investment Manager acting as attorney-in-fact By: Name: Rajneesh Vig Title: Managing Director

 
[Signature Page to Limited Waiver under Loan Agreement] TCP DLF VIII-L FUNDING, LP By: TCP DLF VIII-L GP, LLC Its: General Partner By: TCP DLF VIII ICAV, an umbrella type Irish collective asset management vehicle acting solely for and on behalf of its sub-fund TCP Direct Lending Fund VIII-L (Ireland) Its: Sole Member By: Tennenbaum Capital Partners, LLC Its: Investment Manager acting as attorney-in-fact By: Name: Rajneesh Vig Title: Managing Director TCP DLF VIII ICAV, an umbrella type Irish collective asset management vehicle acting solely for and on behalf of its sub-fund TCP Direct Lending Fund VIII-L (Ireland) By: SVOF/MM, LLC Its: Sub-Advisor acting as attorney-in-fact By: Name: Rajneesh Vig Title: Managing Director

 

Exhibit 31.1
Form of Quarterly Certification
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Eric Eichmann, certify that:
1.I have reviewed this quarterly report on Form 10-Q of Spark Networks SE;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the consolidated financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with generally accepted accounting principles;
(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 23, 2021
By:
/s/ Eric Eichmann
Eric Eichmann
Chief Executive Officer


Exhibit 31.2
Form of Quarterly Certification
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, David Clark, certify that:
1.I have reviewed this quarterly report on Form 10-Q of Spark Networks SE;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the consolidated financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with generally accepted accounting principles;
(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 23, 2021
By:
/s/ David Clark
David Clark
Chief Financial Officer


Exhibit 32.1

Form of Certification
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code), each of the undersigned officers of Spark Networks SE (the “Company”), does hereby certify, to such officer’s knowledge, that:

The Quarterly Report on Form 10-Q for the quarter ended June 30, 2021 of the Company fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 and information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.


Date: August 23, 2021
By:
/s/ Eric Eichmann
Eric Eichmann
Chief Executive Officer


Exhibit 32.2

Form of Certification
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code), each of the undersigned officers of Spark Networks SE (the “Company”), does hereby certify, to such officer’s knowledge, that:

The Quarterly Report on Form 10-Q for the quarter ended June 30, 2021 of the Company fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 and information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.


Date: August 23, 2021
By:
/s/ David Clark
David Clark
Chief Financial Officer