spark-amendmentno






EXECUTION VERSION  132654221v6 AMENDMENT NO. 1  TO FINANCING AGREEMENT  AMENDMENT NO. 1 TO FINANCING AGREEMENT, dated as of August 5, 2022  (this "Amendment"), to the Financing Agreement, dated as of March 11, 2022 (as amended, restated,  amended and restated, supplemented, replaced or otherwise modified from time to time, the “Financing  Agreement”), 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, Federal Republic of Germany under HRB  232591 (the “Parent”), Spark Networks, Inc., a Delaware corporation (“Spark Networks”), Zoosk, Inc., a  Delaware corporation (“Zoosk”, and together with the Parent, Spark Networks, and each other Person that  executes a joinder agreement and becomes a “Borrower” thereunder, each, a “Borrower” and, collectively,  the “Borrowers”), each subsidiary of the Parent listed as a “Guarantor” on the signature pages thereto  (together with each other Person that executes a joinder agreement and becomes a “Guarantor” thereunder,  each, a “Guarantor” and, collectively, the “Guarantors”), the lenders from time to time party thereto (each,  a “Lender” and, collectively, the “Lenders”), MGG Investment Group LP, a Delaware limited partnership  (“MGG”), as collateral agent for the Lenders (in such capacity, together with its successors and permitted  assigns in such capacity, the “Collateral Agent”), and MGG, as administrative agent for the Lenders (in  such capacity, together with its successors and permitted assigns in such capacity, the “Administrative  Agent” and, together with the Collateral Agent, each, an “Agent” and, collectively, the “Agents”).  WHEREAS, the Loan Parties have requested that the Agents and the Required Lenders  amend certain terms and conditions of the Financing Agreement; and  WHEREAS, the Agents and the Required Lenders are willing to amend such terms and  conditions of the Financing Agreement on the terms and conditions set forth herein.  NOW THEREFORE, in consideration of the premises and other good and valuable  consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby  agree as follows:  1. Definitions.  All terms used herein that are defined in the Financing Agreement and not otherwise defined herein shall have the meanings assigned to them in the Financing Agreement.  2. Amendments. (a) New Definitions.  Section 1.01 of the Financing Agreement is hereby amended by adding the following definitions in appropriate alphabetical order:  ““Amendment No. 1” means Amendment No. 1 to Financing Agreement, dated as of  August 5, 2022, by and among the Loan Parties, the Agents and the Required Lenders party thereto.”  ““Amendment No. 1 Effective Date” means the 'Amendment Effective Date' as set forth in  Amendment No. 1.”  ““Marketing Spend” means, for any period, the direct marketing expenses (as included in  the “Cost of Goods Sold” line item in the Loan Parties’ income statement) incurred by such Loan Parties  during such period, calculated in a manner consistent with the calculations provided to the Agents prior to  the Effective Date.”  Exhibit 10.1 





 






   - 2 -   132654221v6  ““TTM Marketing Spend” means, as of any date of determination, the aggregate dollar  amount of the Marketing Spend for the twelve consecutive month period most recently ended.”  (b) Existing Definitions.  (i) The definition of “Applicable Margin” in Section 1.01 of the  Financing Agreement is hereby amended and restated in its entirety to read as follows:  ““Applicable Margin” means,   (1) on or prior to the Amendment No. 1 Effective Date, as of any date of determination,  with respect to the interest rate of (a) any Reference Rate Loan or any portion thereof, 6.50% per annum  and (b) any LIBOR Rate Loan or any portion thereof, 7.50% per annum.   (2) after the Amendment No. 1 Effective Date, the relevant Applicable Margin shall be set  at the respective level indicated below based upon the period for which the Leverage Ratio is calculated  and the Leverage Ratio set forth opposite thereto, which ratio shall be calculated as of the end of the most  recent fiscal quarter of the Parent and its Subsidiaries for which financial statements and a Compliance  Certificate of an Authorized Officer of the Parent are received by the Administrative Agent and the Lenders  in accordance with Section 7.01(a)(ii) and Section 7.01(a)(iv):  Level Leverage Ratio Reference Rate Loans LIBOR Rate Loans  For the period commencing after the Amendment No. 1 Effective Date until June  30, 2023:  I Greater than or  equal to 4.25 to  1.00  7.50% 8.50%  II Less than 4.25 to  1.00  7.00% 8.00%  For the period commencing after June 30, 2023:  I Greater than or  equal to 3.75 to  1.00  7.50% 8.50%  II Less than 3.75 to  1.00  7.00% 8.00%      (3) Subject to clause (4) below, the adjustment of the Applicable Margin (if any) will occur  two (2) Business Days after the date the Administrative Agent receives the financial statements and a  Compliance Certificate of an Authorized Officer of the Parent in accordance with Section 7.01(a)(ii) and  Section 7.01(a)(iv) for the most recent fiscal quarter of the Parent and its Subsidiaries.    (4) Notwithstanding the foregoing:  (i) the Applicable Margin shall be set at Level I in the table above (A) upon  the occurrence and during the continuation of an Event of Default, or (B) if for any period, the  Administrative Agent does not receive the financial statements and Compliance Certificate described in  clause (3) above, for the period commencing on the date such financial statements and Compliance  





 






   - 3 -   132654221v6  Certificate were required to be delivered through the date on which such financial statements and  Compliance Certificate are actually received by the Administrative Agent and the Lenders; and  (ii) in the event that any financial statement or certificate described in clause  (3) above is inaccurate (regardless of whether this Agreement or any Commitments are in effect when such  inaccuracy is discovered), and such inaccuracy, if corrected, would have led to the application of a higher  Applicable Margin for any fiscal period, then the Applicable Margin for such fiscal period shall be adjusted  retroactively (to the effective date of the determination of the Applicable Margin that was based upon the  delivery of such inaccurate financial statement or certificate) to reflect the correct Applicable Margin, and  the Borrowers shall promptly make payments to the Agents and the Lenders to reflect such adjustment.”  (c) Clause (b)(vii) of the definition of “Consolidated EBITDA” in Section  1.01 of the Financing Agreement is hereby amended and restated in its entirety to read as follows:    “(vii)  (1) fees, costs and expenses incurred in connection with (A) the consummation of  the Transactions, (B) any amendments, modifications or waivers of the Loan Documents after the Effective  Date, (C) the consummation of any Permitted Acquisitions and (D) the consummation of issuances of  Indebtedness or Capital Stock and Dispositions to the extent permitted by this Agreement and (2) fees, costs  and expenses accrued or incurred in connection with the transaction previously disclosed to the Agent as  “Project Courtship”, provided, that the amount added back pursuant to this clause (vii)(2) shall not exceed  $2,000,000 in the aggregate during any twelve month period;”  (d) Financial Covenants.  Section 7.03 of the Financing Agreement is hereby  amended and restated in its entirety to read as follows:  (1) Section 7.03(a) of the Financing Agreement is hereby amended and  restated in its entirety to read as follows:  “(a)  Leverage Ratio.  Permit the Leverage Ratio of the Parent and its Subsidiaries  for any period of four (4) consecutive fiscal quarters of the Parent and its  Subsidiaries ending on the date set forth below to be greater than the ratio set forth  opposite such date:  Fiscal Quarter End Leverage Ratio  June 30, 2022 5.25 to 1.00  September 30, 2022 5.50 to 1.00  December 31, 2022 5.75 to 1.00  March 31, 2023 5.50 to 1.00   June 30, 2023 4.25 to 1.00  September 30, 2023 3.75 to 1.00  December 31, 2023 3.75 to 1.00  March 31, 2024 3.75 to 1.00  





 






   - 4 -   132654221v6  June 30, 2024 3.75 to 1.00  September 30, 2024 3.25 to 1.00  December 31, 2024 3.25 to 1.00  March 31, 2025 3.25 to 1.00  June 30, 2025 3.25 to 1.00  September 30, 2025 2.75 to 1.00  December 31, 2025 2.75 to 1.00  March 31, 2026 2.75 to 1.00  June 30, 2026 2.75 to 1.00  September 30, 2026 2.25 to 1.00  December 31, 2026 2.25 to 1.00    (2) Section 7.03 of the Financing Agreement is hereby amended by inserting  a new clause (d), to read as follows:  “(d)  Minimum Marketing Spend.  Permit the TTM Marketing Spend of the Parent  and its Subsidiaries for the twelve (12) consecutive month period ending at the end  of each fiscal quarter, commencing with the fiscal quarter ending December 31,  2022, to be less than $80,000,000.”  (e) Notices.  Section 12.01(a) of the Financing Agreement is hereby amended  by replacing the notice information for Spark Networks, Inc. set forth therein with the following:  “Spark Networks, Inc.   RiverPark Fourteen,  10808 South River Front Parkway, Suite 398  South Jordan, UT 84095  Attention: David Clark  Email: david.clark@spark.net”    3. Representations and Warranties.  Each Loan Party hereby represents and warrants  to the Agents and the Lenders as follows:  (a) Representations and Warranties; No Event of Default.  (i) The  representations and warranties herein, in Article VI of the Financing Agreement and in each other Loan  Document, certificate or other writing delivered to any Secured Party pursuant to the Financing Agreement  or any other Loan Document on or immediately prior to the Amendment Effective Date are true and correct  in all material respects (except that such materiality qualifier shall not be applicable to any representations  





 






   - 5 -   132654221v6  or warranties that already are qualified or modified as to "materiality" or "Material Adverse Effect" in the  text thereof, which representations and warranties shall be true and correct in all respects subject to such  qualification) on and as of such date as though made on and as of such date, except to the extent that any  such representation or warranty expressly relates solely to an earlier date (in which case such representation  or warranty shall be true and correct in all material respects (except that such materiality qualifier shall not  be applicable to any representations or warranties that already are qualified or modified as to "materiality"  or "Material Adverse Effect" in the text thereof, which representations and warranties shall be true and  correct in all respects subject to such qualification) on and as of such earlier date), and (ii) no Default or  Event of Default has occurred and is continuing as of the Amendment Effective Date or would result from  this Amendment becoming effective in accordance with its terms.  (b) Organization, Good Standing, Etc.   Each Loan Party (i) is a corporation,  limited liability company or limited partnership duly organized, validly existing and in good standing under  the laws of the jurisdiction of its organization, (ii) has all requisite power and authority to conduct its  business as now conducted and as presently contemplated, and to execute and deliver this Amendment, and  to consummate the transactions contemplated hereby and by the Financing Agreement, as amended hereby,  and (iii) is duly qualified to do business and is in good standing in each jurisdiction in which the character  of the properties owned or leased by it or in which the transaction of its business makes such qualification  necessary except (solely for the purposes of this subclause (iii)) where the failure to be so qualified and be  in good standing could not reasonably be expected to have a Material Adverse Effect.  (c) Authorization, Etc.  The execution and delivery by each Loan Party of this  Amendment, and the performance by it of the Financing Agreement, as amended hereby, (i) have been duly  authorized by all necessary action, (ii) do not and will not contravene (A) any of its Governing Documents,  (B) any applicable material Requirements of Law or (C) any Material Contract binding on or otherwise  affecting it or any of its properties, (iii) do not and will not result in or require the creation of any Lien  (other than pursuant to any Loan Document) upon or with respect to any of its properties, and (iv) do not  and will not result in any default, noncompliance, suspension, revocation, impairment, forfeiture or  nonrenewal of any permit, license, authorization or approval applicable to its operations or any of its  properties, except (solely for the purposes of this subclause (iv)) to the extent that such default,  noncompliance, suspension, revocation, impairment, forfeiture or nonrenewal could not reasonably be  expected to have a Material Adverse Effect.  (d) Enforceability of Loan Documents.  This Amendment is a legal, valid and  binding obligation of such Loan Party, enforceable against such Loan Party in accordance with its terms,  except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium  or other similar laws affecting the enforcement of creditors' rights generally and by general principles of  equity, and for the avoidance of doubt in the case of the English Loan Parties and the English Security  Documents, subject to the Legal Reservations.  (e) Governmental Approvals.  No authorization or approval or other action  by, and no notice to or filing with, any Governmental Authority is required in connection with the due  execution, delivery and performance by any Loan Party of this Amendment other than authorizations or  approvals that have been obtained or made and are in full force and effect as of the Amendment Effective  Date.  4. Conditions to Effectiveness.  This Amendment shall become effective only upon  satisfaction in full, in a manner satisfactory to the Agents, or waiver of the following conditions precedent  





 






   - 6 -   132654221v6  (the first date upon which all such conditions shall have been satisfied or waived being hereinafter referred  to as the "Amendment Effective Date"):  (a) Payment of Fees, Etc.  The Borrowers shall have paid on or before the  Amendment Effective Date an amendment fee to the Administrative Agent, for the ratable benefit of the  Lenders, in an amount equal to $250,000, which fee shall be deemed earned in full on the Amendment  Effective Date and shall be non-refundable.  (b) Representations and Warranties.  The representations and warranties  contained in this Amendment and in Article VI of the Financing Agreement and in each other Loan  Document shall be true and correct in all material respects (except that such materiality qualifier shall not  be applicable to any representations or warranties that already are qualified or modified as to "materiality"  or "Material Adverse Effect" in the text thereof, which representations and warranties shall be true and  correct in all respects subject to such qualification) on and as of the Amendment Effective Date as though  made on and as of such date, except to the extent that any such representation or warranty expressly relates  solely to an earlier date (in which case such representation or warranty shall be true and correct on and as  of such earlier date).  (c) No Default; Event of Default.  No Default or Event of Default shall have  occurred and be continuing on the Amendment Effective Date or result from this Amendment becoming  effective in accordance with its terms.  (d) Delivery of Documents.  The Administrative Agent shall have received on  or before the Amendment Effective Date, this Amendment, duly executed by the Loan Parties, each Agent  and the Required Lenders.  (e) Liens; Priority.  The Agents shall be satisfied that the Collateral Agent has  been granted, and holds, for the benefit of the Agents and the Lenders, a perfected, first priority Lien on  and security interest in all of the Collateral, subject only to Permitted Liens, to the extent such Liens and  security interests are required pursuant to the Loan Documents to be granted or perfected on or before the  Amendment Effective Date.  (f) Approvals.  All consents, authorizations and approvals of, and filings and  registrations with, and all other actions in respect of, any Governmental Authority or other Person required  in connection with any Loan Document or the transactions contemplated thereby or the conduct of the Loan  Parties' business shall have been obtained or made and shall be in full force and effect.  There shall exist no  claim, action, suit, investigation, litigation or proceeding (including, without limitation, shareholder or  derivative litigation) pending or, to the knowledge of any Loan Party, threatened in any court or before any  arbitrator or Governmental Authority which (i) relates to the Loan Documents or the transactions  contemplated thereby, or (ii) could reasonably be expected to have a Material Adverse Effect.  5. Continued Effectiveness of the Financing Agreement and Other Loan Documents.   Each Loan Party hereby (a) acknowledges and consents to this Amendment, (b) confirms and agrees that  the Financing Agreement and each other Loan Document to which it is a party is, and shall continue to be,  in full force and effect and is hereby ratified and confirmed in all respects, except that on and after the  Amendment Effective Date, all references in any such Loan Document to "the Financing Agreement", the  "Agreement", "thereto", "thereof", "thereunder" or words of like import referring to the Financing  Agreement shall mean the Financing Agreement as amended by this Amendment, and (c) confirms and  agrees that, to the extent that any such Loan Document purports to assign or pledge to the Collateral Agent,  for the benefit of the Agents and the Lenders, or to grant to the Collateral Agent, for the benefit of the  





 






   - 7 -   132654221v6  Agents and the Lenders, a security interest in or Lien on any Collateral as security for the Obligations of  the Loan Parties from time to time existing in respect of the Financing Agreement (as amended hereby) and  the other Loan Documents, such pledge, assignment and/or grant of the security interest or Lien is hereby  ratified and confirmed in all respects.  This Amendment does not and shall not affect any of the obligations  of the Loan Parties, other than as expressly provided herein, including, without limitation, the Loan Parties'  obligations to repay the Loans in accordance with the terms of Financing Agreement or the obligations of  the Loan Parties under any Loan Document to which they are a party, all of which obligations shall remain  in full force and effect.  Except as expressly provided herein, the execution, delivery and effectiveness of  this Amendment shall not operate as a waiver of any right, power or remedy of any Agent or any Lender  under the Financing Agreement or any other Loan Document nor constitute a waiver of any provision of  the Financing Agreement or any other Loan Document.  6. No Novation.  Nothing herein contained shall be construed as a substitution or  novation of the Obligations outstanding under the Financing Agreement or instruments securing the same,  which shall remain in full force and effect, except as modified hereby.  7. No Representations by Agents or Lenders.  Each Loan Party hereby acknowledges  that it has not relied on any representation, written or oral, express or implied, by any Agent or any Lender,  other than those expressly contained herein, in entering into this Amendment.  8. Release.  Each Loan Party hereby acknowledges and agrees that:  (a) neither it nor  any of its Subsidiaries has any claim or cause of action against any Agent or any Lender (or any of the  directors, officers, employees, agents, attorneys or consultants of any of the foregoing), and (b) the Agents  and the Lenders have heretofore properly performed and satisfied in a timely manner all of their obligations  to the Loan Parties, and all of their Subsidiaries and Affiliates.  Notwithstanding the foregoing, the Agents  and the Lenders wish (and the Loan Parties agree) to eliminate any possibility that any past conditions, acts,  omissions, events or circumstances would impair or otherwise adversely affect any of their rights, interests,  security and/or remedies.  Accordingly, for and in consideration of the agreements contained in this  Amendment and other good and valuable consideration, each Loan Party (for itself and its Subsidiaries and  Affiliates and the successors, assigns, heirs and representatives of each of the foregoing) (collectively, the  "Releasors") does hereby fully, finally, unconditionally and irrevocably release, waive and forever  discharge the Agents and the Lenders, together with their respective Affiliates and Related Funds, and each  of the directors, officers, employees, agents, attorneys and consultants of each of the foregoing (collectively,  the "Released Parties"), from any and all debts, claims, allegations, obligations, damages, costs, attorneys'  fees, suits, demands, liabilities, actions, proceedings and causes of action, in each case, whether known or  unknown, contingent or fixed, direct or indirect, and of whatever nature or description, and whether in law  or in equity, under contract, tort, statute or otherwise, which any Releasor has heretofore had or now or  hereafter can, shall or may have against any Released Party by reason of any act, omission or thing  whatsoever done or omitted to be done, in each case, on or prior to the Amendment Effective Date directly  arising out of, connected with or related to this Amendment, the Financing Agreement or any other Loan  Document, or any act, event or transaction related or attendant thereto, or the agreements of any Agent or  any Lender contained therein, or the possession, use, operation or control of any of the assets of any Loan  Party, or the making of any Loans or other advances, or the management of such Loans or other advances  or the Collateral.  9. Further Assurances. The Loan Parties shall execute any and all further documents,  agreements and instruments, and take all further actions, as may be required under Applicable Law or as  any Agent may reasonably request, in order to effect the purposes of this Amendment.  





 






   - 8 -   132654221v6  10. Miscellaneous.  (a) This Amendment may be executed in any number of counterparts and by  different parties hereto in separate counterparts, each of which shall be deemed to be an original but all of  which taken together shall constitute one and the same agreement.  Delivery of an executed counterpart of  this Amendment by facsimile or electronic mail shall be equally effective as delivery of an original executed  counterpart of this Amendment.  (b) Section and paragraph headings herein are included for convenience of  reference only and shall not constitute a part of this Amendment for any other purpose.  (c) This Amendment shall be governed by, and construed in accordance with,  the laws of the State of New York applicable to contracts made and to be performed in the State of New  York.  (d) Each Loan Party hereby acknowledges and agrees that this Amendment  constitutes a "Loan Document" under the Financing Agreement.  Accordingly, it shall be an immediate  Event of Default under the Financing Agreement if (i) any representation or warranty made by any Loan  Party under or in connection with this Amendment shall have been incorrect in any respect when made or  deemed made, or (ii) any Loan Party shall fail to perform or observe any term, covenant or agreement  contained in this Amendment.  (e) Any provision of this Amendment that is prohibited or unenforceable in  any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or  unenforceability without invalidating the remaining portions hereof or affecting the validity or  enforceability of such provision in any other jurisdiction.  (f) To the extent invoiced to the Borrowers on or prior to the date of this  Amendment, within ten (10) Business Days of the Amendment Effective Date, the Borrowers shall pay, or  cause to be paid, all other fees (other than the amendment fee in connection with this Amendment, which  shall be paid on or prior to the Amendment Effective Date), costs, expenses and taxes payable, if any,  pursuant to Section 2.06 or 12.04 of the Financing Agreement.     [Remainder of page intentionally left blank.]    





 






[Signature Page to First Amendment]  IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed  and delivered as of the date set forth on the first page hereof.  BORROWERS:  SPARK NETWORKS SE  By:  Name: Eric Eichmann  Title: Managing Director  SPARK NETWORKS, INC.  By:  Name: Eric Eichmann  Title: Chief Executive Officer and President  ZOOSK, INC.  By:  Name: Eric Eichmann  Title: President  GUARANTORS:  SPARK NETWORKS SERVICES GMBH  By:  Name: David Clark  Title: Managing Director  SPARK NETWORKS USA, LLC  By:  Name: Eric Eichmann  Title: Chief Executive Officer and President  SMOOCH LABS INC.  By:  Name: Eric Eichmann  Title: Chief Executive Officer and President  





 






[Signature Page to First Amendment]  MINGLEMATCH, INC.  By:  Name: Eric Eichmann  Title: Chief Executive Officer and President  SPARK NETWORKS LIMITED  By:  Name: Yoon Um  Title: Director  LOV USA, LLC  By:  Name: Eric Eichmann  Title: Chief Executive Officer and President  





 






[Signature Page to Amendment No. 1]   ADMINISTRATIVE AGENT AND  COLLATERAL AGENT:      MGG INVESTMENT GROUP LP    By: MGG GP, LLC, its general partner     By:     Name: Kevin Griffin    Title: Chief Executive Officer     





 






[Signature Page to Amendment No. 1]  REQUIRED LENDERS:    MGG SPECIALTY FINANCE FUND II LP  MGG SF EVERGREEN FUND LP  MGG SF EVERGREEN UNLEVERED FUND LP  MGG INSURANCE FUND SERIES INTERESTS  OF THE  SALI MULTI-SERIES FUND, LP  MGG SF EVERGREEN MASTER FUND  (CAYMAN) LP  MGG SF EVERGREEN UNLEVERED MASTER  FUND II (CAYMAN) LP  MGG CANADA FUND LP  MGG (BVI) LIMITED  MGG SF DRAWDOWN UNLEVERED FUND II  (LUXEMBOURG) SCSp  MGG SF DRAWDOWN UNLEVERED FUND III  (LUXEMBOURG) SCSp  MGG US DIRECT LENDING FUND 2019 LP  MGG SF EVERGREEN FUND 2020 LP  MGG SF DRAWDOWN UNLEVERED FUND III  LP  MGG SF DRAWDOWN UNLEVERED MASTER  FUND III (CAYMAN) LP        By: MGG Investment Group LP, on behalf of each  of the above, as Authorized Signatory     By:                                                                                 Name: Kevin Griffin  Title:   Chief Executive Officer