KONA GRILL, INC. (NASDAQ:KONA) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01Entry into a Material Definitive Agreement.

On July 7, 2017, Kona Grill, Inc., a Delaware corporation (the “Company”), KeyBank National Association (“KeyBank”) and Zions First National Bank (“Zions”, and collectively with KeyBank, the “Lenders”) entered into Amendment No. 2 to the Second Amended and Restated Credit Agreement (the “Amendment”) effective as of June 30, 2017. The Amendment amends the Company’s Second Amended and Restated Credit Agreement with the Lenders dated as of October 12, 2016, (the “Credit Agreement”) to, among other things:

(i) decrease the total available credit from the revolving credit facility from $45,000,000 to $30,000,000, which including the $15,000,000 term loan, results in an overall reduction of the combined revolving and term credit facilities from $60,000,000 to $45,000,000;

(ii) amend the maturity date from October 12, 2021 to October 12, 2019, provided that if the Company’s pro forma leverage ratio is less than 4.25 to 1.00, the Company may request a one year extension of the maturity date until October 12, 2020;

(iii) increase the applicable margins for base rate loans and the applicable margins for LIBOR rate loans by 25 bps to 75 bps depending on the Company’s leverage ratio;

(iv) to provide more flexibility for the Company, increase the maximum leverage ratio to be (A) 5.50 to 1.00 for the fiscal quarters ended June 30, 2017, September 30, 2017, and December 31, 2017; (B) 5.25 to 1.00 for the fiscal quarters ended March 31, 2018, June 30, 3018, September 30, 2018 and December 31, 2018; and (C) 5.00 to 1.00 for the fiscal quarter ended March 31, 2019 and each fiscal quarter thereafter;

(v) to provide more flexibility for the Company, decrease the minimum fixed charge coverage ratio to be (A) 1.25 to 1.00 for the fiscal quarter ended June 30, 2017; (B) 1.20 to 1.00 for the fiscal quarters ended September 30, 2017, December 31, 2017, March 31, 2018, June 30, 2018, September 30, 2018, and December 31, 2018; and (C) 1.30 to 1.00 for the fiscal quarter ended March 31, 2019 and each fiscal quarter thereafter. The terms of the Amendment are effective as of June 30, 2017; and

(vi) amend the definition of Consolidated EBITDAR to include an add-back to Consolidated EBITDAR for lease terminations, asset write-offs and exit costs associated with restaurant closures and/or terminations of previously signed leases.

The above description is a summary and is qualified in its entirety by the terms and conditions of the Amendment, which is attached hereto as Exhibit 10.1 and incorporated herein by this reference, the Second Amended and Restated Credit Agreement, previously filed with the Securities and Exchange Commission, and Amendment No. 1 to the Second Amended and Restated Credit Agreement, previously filed with the Securities and Exchange Commission.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of Registrant.

The disclosures in Item 1.01 regarding Amendment No. 2 to the Second Amended and Restated Credit Agreement are incorporated into this item by this reference.

KONA GRILL INC Exhibit
EX-10.1 2 ex10-1.htm EXHIBIT 10.1 ex10-1.htm Exhibit 10.1     AMENDMENT NO. 2 TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT   This AMENDMENT NO. 2 TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT (this “Amendment”) is entered into as of July 7,…
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About KONA GRILL, INC. (NASDAQ:KONA)

Kona Grill, Inc. owns and operates upscale casual dining restaurants under the name Kona Grill. The Company owns and operates approximately 40 restaurants in 20 states throughout the United States and Puerto Rico. Its high-volume upscale casual restaurants feature a global menu of contemporary American favorites and sushi. Its menu items are prepared from scratch at each restaurant location and incorporate over 40 signature sauces and dressings. It also offers a full service bar offering a range assortment of wines, specialty cocktails and beers. Its restaurants seat an average of approximately 290 customers and comprise multiple dining areas. Its dining area, full-service bar, indoor/outdoor patio and sushi bar provide a choice of atmospheres and a range of environments. It locates its restaurants in various areas, such as retail centers, shopping malls, urban entertainment districts and lifestyle centers that are situated near commercial office space and residential housing.