Exhibit 10.38

  

  

  

  
    FIRST AMENDMENT TO SEVENTH AMENDED AND RESTATED INVENTORY FINANCING AGREEMENT AND JOINDER AGREEMENT

    

    

    THIS FIRST AMENDMENT TO SEVENTH AMENDED AND RESTATED INVENTORY FINANCING AGREEMENT AND JOINDER AGREEMENT (this “Amendment”) dated as of February 4, 2022, is made to that certain SEVENTH AMENDED AND RESTATED INVENTORY FINANCING AGREEMENT dated as of December 29, 2021, among WELLS
      FARGO COMMERCIAL DISTRIBUTION FINANCE, LLC (“CDF”) as Agent (in such capacity as agent, the “Agent”) for the several financial institutions that may from time to time become party thereto (collectively, “Lenders” and individually, each a “Lender”) and Dealers that may from time to time become
      party thereto (collectively, “Dealers” and individually, each a “Dealer”) (as amended, restated, supplemented or otherwise modified, the “IFA”). All capitalized terms not
      otherwise defined in this Amendment shall have the respective meanings assigned to them in the IFA.

     

    Recitals

     

    A.          South Florida Assets & Operations, LLC (“SFAO”), a Dealer, has acquired eighty percent (80%) of the outstanding Capital Securities of Quality Assets & Operations, LLC, a Delaware
        limited liability company (“QAO” or “New



          Dealer”), pursuant to that certain Membership Interest Purchase Agreement (the “SPA”), dated as of December 31, 2021, by and among
        SFAO, Quality Boats of Clearwater, Inc., a Florida corporation (“Seller”), David M. Bair and Daniel M. Bair (each an “Owner” and, collectively, the “Owners”) and certain other parties thereto (such acquisition, the “Stock Purchase”).

     

    B.          QAO is an Acquisition Subsidiary that Agent has
        required to be joined as a “Dealer” under the IFA pursuant to terms of Section 7(b)(xv) of the IFA, and, upon giving effect to the joinder of QAO, Section 25 of the IFA shall be deemed updated to include QAO as a “Dealer” thereunder. Such joinder
        does not require any Lender’s consent.

     

    C.          Agent and Dealers desire to amend the definition of
        “EBITDA” in the IFA. Such amendment requires Required Lenders’ consent.

     

    D.          Upon the execution and delivery of this Amendment, QAO
        shall be joined as a Dealer under the IFA, and  Agent and Required Lenders, whose consent Agent has received, are otherwise willing to amend the terms of the IFA as set forth in and subject to the terms and conditions of this Amendment.

     

    Agreement

     

    NOW, THEREFORE, in consideration of the premises and of the mutual promises contained herein and in the IFA the receipt and sufficiency of which is
      hereby acknowledged, the parties hereto agree as follows:

     

    1.           Amendments to IFA.

     

    a.     The definition of “EBITDA” set forth in
        Section 1 of the IFA is hereby deleted in its entirety and replaced with the following:

     

    ““EBITDA” means, for any period,
      Consolidated Net Income for such period plus:

     

    
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          	(a)	
            to the extent added or deducted in determining such Consolidated Net Income, Interest Expense, Income Tax Expense, depreciation and amortization, in each case for such period less
              any non-recurring income or expenses; and

          


     

      

    
      	 	
              (b)

            	
              (i)          for the Quarterly Computation Period ending on December 31, 2021, an amount equal to $40,492,000;

            


    

     

    (ii)         for the Quarterly Computation Period ending on March
        31, 2022, an amount equal to $29,817,000;

     

    (iii)        for the Quarterly Computation Period ending on June 30,
        2022, an amount equal to $18,679,000;

     

    (iv)         for the Quarterly Computation Period ending on
        September 30, 2022, an amount equal to $6,818,000; and

     

    (v)          for all Quarterly Computation Periods thereafter, an
        amount equal to $0.

     

    b.          In connection with the joinder set
        forth in Section 2 below, Section 25 of the IFA shall be deemed supplemented to include
        Quality Assets & Operations, LLC,  Delaware limited liability company, as a “Dealer” thereunder, and shall read in full as follows:

     

    “25.          List of Dealers. The following persons are
        parties to this Agreement as Dealers:

    

    	
            DEALER NAME

          	

            	
            TYPE OF ENTITY

          	

            	
            JURISDICTION

          
	 	 	 	 	 
	
            Legendary Assets & Operations, LLC

          	 	
            Limited liability company

          	 	
            FL

          
	 	 	 	 	 
	
            Singleton Assets & Operations, LLC

          	 	
            Limited liability company

          	 	
            GA

          
	 	 	 	 	 
	
            South Florida Assets & Operations, LLC

          	 	
            Limited liability company

          	 	
            FL

          
	 	 	 	 	 
	
            Midwest Assets & Operations, LLC

          	 	
            Limited liability company

          	 	
            DE

          
	 	 	 	 	 
	
            South Shore Lake Erie Assets & Operations, LLC

          	 	
            Limited liability company

          	 	
            DE

          
	 	 	 	 	 
	
            Bosun’s Assets & Operations, LLC

          	 	
            Limited Liability company

          	 	
            DE

          
	 	 	 	 	 
	
            Norfolk Marine Company

          	 	
            Corporation

          	 	
            VA

          
	 	 	 	 	 
	
            Central Assets & Operations, LLC

          	 	
            Limited liability company

          	 	
            DE

          
	 	 	 	 	 
	
            T-H Marine Supplies, LLC

          	 	
            Limited liability company

          	 	
            DE

          
	 	 	 	 	 
	
            CMC Marine, LLC

          	 	
            Limited liability company

          	 	
            DE

          
	 	 	 	 	 
	
            Innovative Plastics, LLC

          	 	
            Limited liability company

          	 	
            DE

          
	 	 	 	 	 
	
            Quality Assets & Operations, LLC

          	 	
            Limited liability company

          	 	
            DE”

          


     

    
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    2.          Joinder of New Dealer. The New Dealer hereby acknowledges, agrees and confirms that, by its execution of this Amendment, the New Dealer will be deemed to be a party to the IFA and a “Dealer” for all purposes of the IFA and
        shall have all of the obligations of a Dealer thereunder as if it had executed the IFA. The New Dealer hereby ratifies, as of the date hereof, and agrees to be bound by, all of the terms, provisions and conditions applicable to the Dealers
        contained in the IFA. The New Dealer hereby restates all representations and warranties of Dealers under the IFA as if each representation and warranty contained therein is, contemporaneously herewith, issued by, and relates to New Dealer,
        individually and jointly. The New Dealer hereby confirms the grant to the Agent set forth in the IFA of, and does hereby grant to the Agent a security interest in, all of New Dealer’s right, title and interest in and to all Collateral to secure the
        Obligations, in each case, whether now or hereafter existing or in which the New Dealer now has or hereafter acquires an interest and wherever the same may be located. Without limiting the generality of the foregoing terms of this Section 2, the New Dealer hereby, jointly and severally together with the other Dealers, agrees to be bound by and perform the Obligations strictly in accordance with the
        terms thereof.  Unless the New Dealer and CDF otherwise mutually agree in writing, any financing transactions previously entered into between the New Dealer and CDF and currently in effect on the date hereof shall henceforth be governed by the
        terms and conditions of the IFA.

     

    3.          Ratification.

     

    a.   Each Dealer hereby ratifies and confirms the IFA as amended
        hereby and each other Loan Document executed by such Dealer in all respects.  All terms and provisions of the Loan Documents not specifically amended by this Amendment shall remain unchanged and in full force and effect.

     

    b.   Each Guarantor hereby (i) ratifies and confirms each of such
        Guarantor’s Guaranty, including, without limitation, that certain (A) the Eighth Amended and Restated Collateralized Guaranty dated December 29, 2021 executed by Holdings in favor of Agent, (B) Sixth Amended and Restated Collateralized Guaranty
        dated December 29, 2021 executed by Parent in favor of Agent, (C) Second Amended and Restated Collateralized Guaranty dated December 29, 2021 by PubCo in favor of Agent, (D) Fourth Amended and Restated Guaranty dated December 29, 2021 executed by
        Philip Austin Singleton, Jr. in favor of Agent, and (E) Fourth Amended and Restated Guaranty dated December 29, 2021 executed by Anthony Aisquith in favor of Agent (each such guaranty referred to in clauses (A) through (E) above, a “Guaranty,” and collectively, the “Guaranties”), and each other Loan Document executed by such party in all respects, (ii)
        agrees such Guaranty and each other Loan Document executed by such party shall remain in full force and effect, (iii) agrees that all of Dealers’ obligations under the IFA and other Loan Documents are guaranteed by such Guarantor, and (iv)
        represents and covenants to and with Agent that such Guarantor has no defense, claim, right of recoupment, or right of offset against Agent under such Guaranty.

     

    4.          References. Each reference in the Loan Documents to the IFA shall be deemed to refer to the IFA as amended by this Amendment.

     

    5.          Conditions Precedent to Effectiveness of Amendment.  This Amendment shall not be effective unless and until each of the following conditions precedent has been satisfied or waived in the Permitted Discretion of Agent:

     

    a.     Agent shall have received a copy of
        this Amendment, duly executed by Lenders, Dealers and Guarantors.

     

    
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    b.    Agent shall have received any and all
        fees payable to Agent by Dealers and Guarantors in connection with this Amendment and the transactions contemplated hereby.

     

    c.   Agent shall have received a manager’s or
        secretary’s certificate related to QAO certifying as to QAO’s organizational documents, resolutions authorizing its entry into the Agreement and other Loan Documents as a Dealer, good standing, and officer in incumbency.

     

    d.    Agent shall have received a copy of a
        legal opinion from counsel to QAO in form and substance acceptable to the Agent in its Permitted Discretion.

     

    6.        Release. In consideration of the agreements of Agent and Lenders contained in this Amendment and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, each Guarantor and
        each Dealer (collectively, the “Releasors”), on behalf of itself and its successors, assigns, and other legal representatives, hereby
        absolutely, unconditionally and irrevocably releases, remises and forever discharges Agent and each Lender, each of their successors and assigns, each of their respective affiliates, and their respective affiliates’ present and former shareholders,
        members, subsidiaries, divisions, predecessors, directors, officers, attorneys, employees, agents and other representatives (Agent, Lenders 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, either known or unknown, both at law and in equity, which Releasors, or any of them, or any of their 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 which arises at any time on or prior to the date hereof, including, without limitation,
        for or on the account of, or in relation to, or in any way in connection with the IFA, or any of the other Loan Documents, including, without limitation, the Guaranties, or transactions thereunder or related thereto.

     

    7.          Governing Law. This Amendment shall be governed by the internal laws of the State of Illinois without reference to the conflicts of laws principles thereof.

     

    8.          Assignment. This Amendment shall be binding upon, inure to the benefit of and be enforceable by the parties hereto and their participants, successors and assigns.

     

    9.          Counterparts. This Amendment may be executed in any number of counterparts, each of which counterparts, once they are executed and delivered, shall be deemed to be an original and all of which counterparts, taken together,
        shall constitute but one and the same agreement.  This Amendment may be executed by any party to this Amendment by original signature or facsimile signature.

     

    [Signature pages follow]

     

    
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    IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment as of the date first above written.

     

    	
            ONEWATER MARINE INC.

          	

          
	
            ONE WATER MARINE HOLDINGS, LLC, and

          	

          
	
            ONE WATER ASSETS & OPERATIONS, LLC

          	

          
	 	 	

          
	
            By:

          	
            /s/ Philip Austin Singleton, Jr.

          	

          
	
            Name:

          	
            Philip Austin Singleton, Jr.

          	

          
	
            Title:

          	
            Chief Executive Officer

          	

          


    

    

    	
            LEGENDARY ASSETS & OPERATIONS, LLC,

          	

          
	
            SINGLETON ASSETS & OPERATIONS, LLC,

          	

          
	
            SOUTH FLORIDA ASSETS & OPERATIONS, LLC,

          	

          
	
            MIDWEST ASSETS & OPERATIONS, LLC,

          	

          
	
            SOUTH SHORE LAKE ERIE ASSETS & OPERATIONS, LLC, and

          	

          
	
            BOSUN’S ASSETS & OPERATIONS, LLC

          	

          
	 	 	

          
	
            By:

          	
            /s/ Philip Austin Singleton, Jr.

          	

          
	
            Name:

          	
            Philip Austin Singleton, Jr.

          	

          
	
            Title:

          	
            Manager

          	

          


    

    

    	
            NORFOLK MARINE COMPANY

          
	 	

          
	
            By:  

            

          	/s/ Jason Murphy	

          
	
            Name: Jason Murphy

          	

          
	
            Title: President

          	

          


    

    

    	
            CENTRAL ASSETS & OPERATIONS, LLC

          
	 	
            By: One Water Assets & Operations, LLC, the Manager

          
	 	 
	 	
            By: One Water Marine Holdings, LLC, the Managing Member

          
	 	 
	 	
            By: /s/ Philip Austin Singleton, Jr.

          	

          
	 	
            Name: Philip Austin Singleton, Jr.

          
	 	
            Title: Chief Executive Officer

          


    

    

    
      [Signature Page to the First Amendment to 7th A&R IFA and Joinder Agreement]

    

    

    

    
      
        


    

    	
            CMC MARINE, LLC,

          	

          
	
            INNOVATIVE PLASTICS, LLC

          	

          
	
            T-H MARINE SUPPLIES, LLC

          	

          
	 	

          
	
            By:

          	/s/ Jefferey Huntly	

          
	
            Name:  Jeffrey Huntley

          	

          
	
            Title:    President

          	

          


    

    

    	
            QUALITY ASSETS & OPERATIONS, LLC

          	

          
	

          	

          	

          
	
            By:

          	
            /s/ Philip Austin Singleton, Jr.

          	

          
	
            Name:

          	
            Philip Austin Singleton, Jr.

          	

          
	
            Title:

          	
            Manager

          	

          


    

    

    	
            /s/ Philip Austin Singleton, Jr.

          	

          	
            /s/ Anthony Aisquith

          
	

          	

          	

          
	
            Philip Austin Singleton, Jr., as Guarantor

          	

          	
            Anthony Aisquith, as Guarantor

          


    

    

    
      
        [Signature Page to the First Amendment to 7th A&R IFA and Joinder Agreement]

         

        

      

    

    
      
        


    

    	
            WELLS FARGO COMMERCIAL DISTRIBUTION

          
	
            FINANCE, LLC, as Agent and Lender

          
	 	 	 
	
            By:

          	
            /s/ Thomas M. Adamski

          	 
	
            Name:

          	
            Thomas M. Adamski

          	 
	
            Title:

          	
            VP Credit

          	 


    

    

    
      [Signature Page to the First Amendment to 7th A&R IFA and Joinder Agreement]