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Item 1.01
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Entry into a Material Definitive Agreement.
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On December 29, 2021, OneWater Marine Inc., a Delaware corporation (the “Company”) and its subsidiaries entered into the Seventh
Amended and Restated Inventory Financing Agreement (the “A&R Inventory Financing Facility”), with the dealers party thereto, Wells Fargo Commercial Distribution Finance, LLC, as agent (the “Agent”), and the Lenders party thereto.
The A&R Inventory Financing Facility provides the Company a line of credit with asset based borrowing availability of up to
$500.0 million for inventory financing, with the amount permissible pursuant to available inventory. Loans under the A&R Inventory Financing Facility may be extended from time to time to enable the Company to purchase inventory from certain
manufacturers. The applicable financial terms, curtailment schedule and maturity for each loan will be set forth in separate program terms letters entered into from time to time. The collateral for the A&R Inventory Financing Facility consists
primarily of the Company’s inventory that is financed through the A&R Inventory Financing Facility and related assets, including accounts receivable, bank accounts, and proceeds of the foregoing, and excludes the collateral that underlies the
Company’s existing Credit Agreement, dated as of July 22, 2020, by and among the Company, certain of its subsidiaries, Truist Bank, and the lenders from time to time party thereto.
The A&R Inventory Financing Facility expires on December 1, 2023, unless earlier terminated pursuant to the terms of the
A&R Inventory Financing Facility. The interest rate applied to the loans provided pursuant to the A&R Inventory Financing Facility are calculated using the Adjusted 30-Day
Average SOFR (as further described in the A&R Inventory Financing Facility), plus 2.75% to 5.00% depending on the age of the inventory. The interest rate for pre-owned boats will be calculated using the new boat rate set forth above plus
0.25%.
The A&R Inventory Financing Facility includes certain financial and non-financial covenants, including provisions that the
Funded Debt to EBITDA Ratio must not exceed 2.00 to 1.00, and that the Company’s Fixed Charge Coverage Ratio on a consolidated basis must be at least 1.50 to 1.00. It also includes additional restrictive covenants, including restrictions on the
Company’s ability to (i) use, sell, rent or otherwise dispose of any collateral underlying the A&R Inventory Financing Facility except for the sale of inventory in the ordinary course of business, (ii) incur certain liens, (iii) engage in any
material transaction not in the ordinary course of business, (iv) change its business in any material manner or its organizational structure, other than as otherwise provided for in the A&R Inventory Financing Facility, (v) engage in certain
mergers or consolidations, (vi) acquire certain assets or ownership interest of any other person or entities, except for certain permitted acquisitions, (vii) guarantee or indemnify or otherwise become in any way liable with respect to certain
obligations of any other person or entity, except as provided by the A&R Inventory Financing Facility, (viii) redeem, retire, purchase or otherwise acquire, directly or indirectly, any of the equity of its acquired dealer groups, (ix) make any
change in any of its dealer groups’ capital structure or in any of its business objectives or operations which might in any way adversely affect the ability of such dealer group to repay its obligations under the A&R Inventory Financing
Facility, (x) incur, create, assume, guarantee or otherwise become or remain liable with respect to certain indebtedness, and (xi) make certain payments of subordinated debt. One Water Marine Holdings LLC (“OneWater LLC”) and its subsidiaries are
restricted from, among other things, making cash dividends or distributions without the prior written consent of the Agent. Under the A&R Inventory Financing Facility, among other exceptions, OneWater LLC may make distributions to its members
for certain permitted tax payments subject to certain financial ratios, may make scheduled payments on certain subordinated debt and is permitted to make pro rata distributions to the unitholders of OneWater LLC, including the Company, in an amount
sufficient to allow the Company to pay its taxes and to make payments under the Company’s Tax Receivable Agreement. The A&R Inventory Financing Facility also contains customary representations, warranties, and events of default.
In connection with the A&R Inventory Financing Facility, in their individual capacities, (i) P. Austin Singleton, Jr., our
Chief Executive Officer and Director, entered into that Fourth Amended and Restated Guaranty dated December 29, 2021, and (ii) Anthony Aisquith, our President, Chief Operating Officer and Director entered into that Fourth Amended and Restated
Guaranty dated December 29, 2021, for the benefit of Wells Fargo Commercial Distribution Finance, LLC, as Agent to the A&R Inventory Financing Facility (the “Guaranties”). Mr. Aisquith’s guarantee is limited to circumstances involving fraud or
disposal of collateral without payment to the lenders.
All capitalized words used but not defined herein have the meanings assigned in the A&R Inventory Financing Facility.
The foregoing description is qualified in its entirety by reference to the full text of the A&R Inventory Financing Facility
and the Guaranties, which are filed as Exhibits 10.1 through 10.3 to this Current Report on Form 8-K and incorporated in this Item 1.01 by reference.