Exhibit 10.1

Dated May 2, 2018

Subscription Agreement

between

KONA GRILL, INC.

as Company

and

 Wisdom Sail Limited

as the Purchaser

Table of Contents

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SUBSCRIPTION AGREEMENT

THIS SUBSCRIPTION AGREEMENT (this “ Agreement ”), dated as of May 2, 2018, by and between Kona Grill, Inc . , a corporation incorporated under the laws of the State of Delaware (the “ Company ”) and Wisdom Sail Limited (the “ Purchaser ”) an exempted company with limited liability incorporated under the laws of Cayman Islands.

RECITALS

A.     WHEREAS, the Company desires to issue, sell and deliver to the Purchaser, and the Purchaser desires to purchase and acquire from the Company, upon the terms and conditions set forth in this Agreement, the Purchased Shares (as defined below);

B.     WHEREAS, as a condition and inducement to the Purchaser’s willingness to enter into this Agreement, the Purchaser and the Company will enter into the Registration Rights Agreement (as defined below) at Closing;

NOW, THEREFORE, in consideration of the premises set forth above, the mutual promises and covenants set forth herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Purchaser hereby agree as follows:

Article I

DEFINITIONS AND INTERPRETATION

“ Affiliate ” means, with respect to any specified Person, any other Person that directly, or indirectly through one or more intermediaries, Controls, is Controlled by, or is under common Control with, such specified Person;

“ Agreement ” has the meaning set forth in the Preamble;

“ Bankruptcy and Equity Exception ” has the meaning set forth in Section 3.02;

“ Board ” means the board of directors of the Company;

“ Business Day ” means any day that is not a Saturday, a Sunday or other day on which banks are required or authorized by Law to be closed in Hong Kong or New York;

“ Closing ” has the meaning set forth in Section 2.01;

“ Company ” has the meaning set forth in the preamble;

“ Company Employee Plan ” means any written plan, program, policy, Contract or other arrangement providing for severance, termination pay, deferred compensation, performance awards, share or share-related awards, housing funds, insurance arrangements, fringe benefits, perquisites, superannuation funds retirement benefits, pension schemes or other employee benefits, that is maintained, contributed to or required to be contributed to by the Company or any of its Subsidiaries for the benefit of any current or former employee, director, officer or independent contractor of the Company or any of its Subsidiaries, or with respect to which the Company or any of its Subsidiaries has or would reasonably expect to have any liability or obligation, other than, in each case, one that is sponsored and maintained by a Governmental Authority. For the voidance of doubt, the Company Employee Plans include, without limitation, the Company’s 2002 Stock Plan, the Company’s 2005 Employee Stock Purchase Plan, the Company’s 2005 Stock Award Plan and the Company’s 2012 Stock Award Plan.

“ Company Indemnified Liabilities ” has the meaning set forth in Section 6.02.

“ Company Indemnitees ” has the meaning set forth in Section 6.02.

“ Contract ” means any agreement, contract, lease, indenture, instrument, note, debenture, bond, mortgage or deed of trust or other agreement, commitment, arrangement or understanding;

“ Control ” (including the terms “ Controlled by ” and “ under common Control with ”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, as trustee or executor, by contract or otherwise, including the ownership, directly or indirectly, of securities having the power to elect a majority of the board of directors or similar body governing the affairs of such Person or securities that represent a majority of the outstanding voting securities of such Person;

“ Disclosure Letter ” has the meaning set forth in Article IV;

“ Encumbrance ” means any security interest, pledge, mortgage, lien, charge, claim, hypothecation, title defect, right of first option or refusal, right of pre-emption, third-party right or interests, put or call right, lien, adverse claim of ownership or use, or other encumbrance of any kind;

“ Exchange Act ” means the U.S. Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder;

“ Financial Statements ” has the meaning set forth in Section 4.10;

“ GAAP ” means the United States generally accepted accounting principles or other accounting standards adopted by a Person and applied consistently throughout the Financial Statements;

“ Governmental Authority ” means any federal, national, foreign, supranational, state, provincial, local, municipal or other political subdivision or other government, governmental, regulatory or administrative authority, agency, board, bureau, department, instrumentality or commission or any court, tribunal, judicial or arbitral body of competent jurisdiction or stock exchange;

“ HKIAC ” has the meaning set forth in Section 6.05(a);

“ Indemnified Liabilities ” has the meaning set forth in Section 6.02;

“ Indemnitees ” has the meaning set forth in Section 6.02;

“ Indemnitor ” has the meaning set forth in Section 6.02;

“ Intellectual Property ” has the meaning set forth in Section 4.20;

“ Judgment ” has the meaning set forth in Section 4.17;

“ knowledge ” means, with respect to any party, the actual knowledge of such party’s executive officers (as defined in Rule 405 under the Securities Act) after due inquiry, including inquiry of other officers or employees of such party;

“ Law ” means any federal, national, foreign, supranational, state, provincial or local statute, law, ordinance, regulation, rule, code, order, requirement or rule of law (including common law), official policy, rule or interpretation of any Governmental Authority with jurisdiction over any of the Company or the Purchasers;

“ Material Adverse Effect ” means any event, circumstance, development, change or effect that, individually or in the aggregate, has or would reasonably be expected to have a material adverse effect on (a) the business, properties, assets, liabilities, operations, results of operations or financial condition of the Company and its Subsidiaries, taken as a whole, or (b) the authority or ability of the Company to perform its obligations under the Transaction Documents; provided , however , that for purposes of clause (a) above, in no event shall any of the following exceptions, alone or in combination with the other enumerated exceptions below, be deemed to constitute, nor shall be taken into account in determining whether there has been or will be, a Material Adverse Effect: (i) any effect resulting from compliance with the terms and conditions of, or from the announcement of the transactions contemplated by this Agreement and/or any other Transaction Document, (ii) any effect that results from changes affecting any of the industries in which the Company or its Subsidiaries operate generally or the economy generally, (iii) any effect that results from changes affecting general worldwide economic or capital market conditions, provided that any such changes in (ii) and (iii) do not disproportionately affect the Company in any material respect relative to other similarly situated participants in the industry in which they operate, (iv) any pandemic, earthquake, typhoon, hurricane, tornado or other natural disaster or similar force majeure event, (v) any failure to meet any internal or public projections, forecasts, or guidance, provided that the underlying causes that lead to any failure to meet any internal or public projections, forecasts, or guidance as set forth in (v) are not exceptions to a Material Adverse Effect, or (vi) any change in the Company’s stock price or trading volume, in and of itself, provided that the underlying causes that lead to any change in the Company’s stock price or trading volume as set forth in (vi) are not exceptions to a Material Adverse Effect;

“ Material Contract ” has the meaning set forth in Section 4.14;

“ Memorandum and Articles ” means the articles of incorporation and bylaws of the Company in effect from time to time;

“ NASDAQ ” means the Nasdaq Global Market;

“ Common Stock ” mean the common stock, par value $0.01 per share, of the Company;

“ Per Share Purchase Price ” has the meaning set forth in Section 2.01.

“ Permits ” has the meaning set forth in Section 4.18(b);

“ Person ” means any individual, partnership, corporation, association, joint stock company, trust, joint venture, limited liability company, organization, entity or Governmental Authority;

“ Proceedings ” has the meaning set forth in Section 4.17;

“ Public Documents ” has the meaning set forth in Section 4.09;

“ Purchaser ” has the meaning set forth in the preamble;

“ Purchaser Director ” means the director of the Board appointed by the Purchaser pursuant to Section 5.05;

“ Purchased Shares ” means 2,651,261 shares of Common Stock to be issued to the Purchaser pursuant to Section 2.01;

“ Purchased Shares Purchase Price ” has the meaning set forth in Section 2.02;

“ Registration Rights Agreement ” means the registration rights agreement substantially in the form attached hereto as Exhibit A ;

“ Returns ” has the meaning set forth in Section 4.19;

“ SEC ” means the U.S. Securities and Exchange Commission;

“ Securities ” means any Common Stock or any equity interest of, or shares of any class in the share capital (ordinary, preferred or otherwise) of, the Company and any convertible securities, options, warrants and any other type of equity or equity-linked securities convertible, exercisable or exchangeable for any such equity interest or shares of any class in the share capital of the Company;

“ Securities Act ” means the U.S. Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder;

“ Subsidiary ” of any Person means any corporation, partnership, limited liability company, joint stock company, joint venture or other organization or entity, whether incorporated or unincorporated, which is Controlled by such Person;

“ Tax ” has the meaning set forth in Section 4.19;

“ Transaction Documents ” mean this Agreement, the Registration Rights Agreement, and each of the other agreements and documents entered into or delivered by the parties hereto or their respective Affiliates in connection with the transactions contemplated by this Agreement; and

“ U.S. ” or “ United States ” means the United States of America.

(a)     when a reference is made in this Agreement to an Article or Section, such reference is to an Article or Section of this Agreement;

(b)     the headings for this Agreement are for reference purposes only and do not affect in any way the meaning or interpretation of this Agreement;

(c)     the words “hereof,” “herein” and “hereunder” and words of similar import, when used in this Agreement, refer to this Agreement as a whole and not to any particular provision of this Agreement;

(d)     all terms defined in this Agreement have the defined meanings when used in any certificate or other document made or delivered pursuant hereto, unless otherwise defined therein;

(e)     the definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms;

(f)     references to a Person are also to its successors and permitted assigns;

(g)     all time references in this Agreement shall refer to the local time in Hong Kong unless otherwise specified; and

(h)     the use of the term “or” is not intended to be exclusive.

Article II

PURCHASE AND SALE OF SECURITIES

(a)        Date and Time. The Closing shall take place remotely via the exchange of documents and signatures or at such places as the parties hereto shall mutually agree in writing. The Parties acknowledge and agree that all transactions occurring at the Closing shall be deemed to have been taken and all documents to be executed and delivered by all Parties at the Closing shall be deemed to have been executed and delivered simultaneously, and no proceedings or actions shall be deemed taken nor any document deemed executed or delivered until all have been taken, executed and delivered. Unless the Parties otherwise agree in writing, if the Closing is not consummated at or prior to three business days following the date of this Agreement, this Agreement shall automatically terminate and become null and void ab initio.

(b)          Payment and Delivery . On the date of the Closing:

(i)      (A) the Purchaser shall pay the Purchased Shares Purchase Price to the Company by electronic bank transfer of immediately available funds to a bank account designated in writing by the Company at least five (5) Business Days prior to the date of this Agreement;

(ii)     the Company shall deliver to the Purchaser:

(A)     a stock certificate representing the Purchased Shares, duly executed on behalf of the Company;

(B)     a certified copy of the register of directors of the Company reflecting the appointment or election of the Purchaser Director to the Board.

(C)     a certificate, executed on behalf of the Company by an authorized officer of the Company and dated as of the date of this Agreement, having attached thereto: (1) a certified copy of the Company’s Memorandum and Articles in effect at the Closing, (2) the board resolutions of the Company approving the entering into and execution of this Agreement, the issuance of the Purchased Shares, the entering into and execution of the other Transaction Documents to which the Company is a party and the consummation of all transactions contemplated herein and therein and the appointment or election of the Purchaser Director as the director and the vice-chairman of the Board, and (4) a certificate of good standing in respect of the Company issued by the Secretary of State of the State of Delaware dated a recent date before the Closing;

(D)     an indemnification agreement in respect of the Purchaser Director, dated the date of this Agreement, duly executed on behalf of the Company, in the form of the indemnification agreements to which the other directors of the Company are parties as of the Closing;

(E)     the Registration Rights Agreement, duly executed by the Company;

(c)        Restrictive Legend . Each certificate representing any of the Purchased Securities shall be endorsed with the following legend:

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE " SECURITIES ACT "), OR APPLICABLE STATE SECURITIES LAWS.  THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OR (B) AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE  SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS OR BLUE SKY LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY AND ITS TRANSFER AGENT OR (II) UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT ( PROVIDED THAT THE TRANSFEROR PROVIDES THE COMPANY WITH REASONABLE ASSURANCES (IN THE FORM OF A SELLER REPRESENTATION LETTER AND, IF APPLICABLE, A BROKER REPRESENTATION LETTER) THAT THE SECURITIES MAY BE SOLD PURSUANT TO SUCH RULE).  NO REPRESENTATION IS MADE BY THE ISSUER AS TO THE AVAILABILITY OF THE EXEMPTION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT FOR RESALES OF THESE SECURITIES.

Article III

REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS

The Purchaser represents and warrants to the Company as of the date hereof and as of the date of the Closing that:

(a)      Status of the Purchaser . The Purchaser is not a “U.S. person” within the meaning of Regulation S under the Securities Act.

(b)      Experienced Investor . The Purchaser has sufficient knowledge and experience in financial and business matters so as to be capable of evaluating the merits and risks of its investment in the Purchased Shares. The Purchaser is capable of bearing the economic risks of such investment, including a complete loss of its investment.

(c)      No Public Sale or Distribution . The Purchaser is acquiring its corresponding portion of the Purchased Shares for its own account and not with a view towards, or for resale in connection with, the public sale or distribution thereof, except pursuant to sales registered or exempted under the Securities Act. The Purchaser does not presently have any agreement or understanding, directly or indirectly, with any Person to distribute any of its portion of the Purchased Shares. The Purchaser is not a broker-dealer registered with the SEC under the Exchange Act or an entity engaged in a business that would require it to be so registered as a broker-dealer.

(d)      Solicitation . The Purchaser was not identified or contacted through the marketing of the transactions contemplated by this Agreement and the other Transaction Documents. The Purchaser did not contact the Company as a result of any general solicitation or directed selling efforts. The purchase of the Purchased Shares by the Purchaser was not solicited by or through anyone other than the Company.

(e)      Offshore Transaction . The Purchaser has been advised and acknowledges that in issuing the Purchased Shares to the Purchaser pursuant to this Agreement and the other Transaction Documents, the Company is relying upon the exemption from registration provided by U.S. federal and state securities Laws. The Purchaser is acquiring the Purchased Shares in an offshore transaction executed in reliance upon the exemption from registration provided by Regulation S under the Securities Act.]

(f)      Restricted Securities . The Purchaser acknowledges that the Purchased Shares are “restricted securities” that have not been registered under the Securities Act or any applicable state securities Law. The Purchaser further acknowledges that, absent an effective registration under the Securities Act, the Purchased Shares may only be offered, sold or otherwise transferred (i) to the Company, (ii) outside the United States in accordance with Rule 904 of Regulation S under the Securities Act or (iii) pursuant to an exemption from registration under the Securities Act.

Section 3.07   No Additional Representations . The Purchaser acknowledges that the Company make no representations or warranties as to any matter whatsoever except as expressly set forth in this Agreement or in any certificate delivered by the Company to the Purchaser in accordance with the terms hereof and thereof.

Article IV

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company represents and warrants to the Purchasers as of the date hereof and as of the date of the Closing that, except (a) as set forth in the correspondingly numbered section of the disclosure letter delivered by the Company to the Purchaser dated as of the date hereof (the “ Disclosure Letter ” ) or as set forth in any other section of the Disclosure Letter where it is readily apparent on the face of such disclosure that such disclosure is intended to be an exception to such Section of this Article IV or (b) as set forth in its Public Documents filed prior to the date of this Agreement (without giving effect to any amendment thereto filed on or after the date of this Agreement and excluding disclosures of non-specific risks faced by the Company included in any forward-looking statement, disclaimer, risk factor disclosure or other similarly non-specific statements that are predictive, general or forward-looking in nature):

(b)     Except for any obligations in connection with the Company Employee Plans or as otherwise set forth above in Section 4.02(a), as of the date of this Agreement, no Securities were issued, reserved for issuance or outstanding and no securities of any of its Subsidiaries convertible into or exchangeable or exercisable for any Securities were issued or outstanding. Except in connection with the Company Employee Plans, there are no bonds, debentures, notes or other indebtedness of the Company having the right to vote (or convertible into, or exchangeable for, Securities having the right to vote) on any matters on which holders of Common Stock may vote (“ Voting Company Debt ”). Except in connection with the Company Employee Plans, as of the date of this Agreement, there are no Securities (including without limitation any shareholder rights plan or “poison pill”), stock-based performance units, share appreciation rights or other rights, Contracts or undertakings of any kind to which the Company or any of its Subsidiaries is a party or by which the Company is bound (A) obligating the Company or any of its Subsidiaries to issue, deliver or sell, or cause to be issued, delivered or sold, additional Securities or any Voting Company Debt, (B) obligating the Company or any of its Subsidiaries to issue, grant or enter into any such Securities, stock-based performance units, share appreciation rights or other rights, Contracts or undertakings or (C) that give any Person the right to receive any economic interest of a nature accruing to the holders of Common Stock, including any stock-based performance unit, share appreciation right or similar right or interest based on shares of the Company. Except in connection with Company Employee Plans, there are no outstanding obligations of the Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire any Securities, stock-based performance units, share appreciation rights or other rights.

(c)     All of the issued equity securities of each Subsidiary of the Company are validly issued, fully paid and non-assessable, and were issued in compliance with the applicable registration and qualification requirements of applicable Laws.

(a)     any Material Adverse Effect;

(b)     (i) any declaration, setting aside or payment of any dividend or other distribution with respect to any share capital of the Company or any of its Subsidiaries (except for dividends or other distributions by any Subsidiary to the Company or to any of the Company’s wholly owned Subsidiaries or (ii) any redemption, repurchase or other acquisition of any share capital of the Company or any of its Subsidiaries;

(c)     any material change in any method of accounting or accounting practice by the Company or any of its Subsidiaries;

(d)     any making or revocation of any material Tax election, any settlement or compromise of any material Tax liability, or any change (or request to any taxing authority to change) in any material respect of the method of accounting of the Company or any of its Subsidiaries for Tax purposes;

(e)     any amendment to the Memorandum and Articles of the Company;

(f)     any incurrence of material indebtedness for borrowed money or any guarantee of such indebtedness for another Person or any issue or sale of debt securities, warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries;

(g)     any adoption of resolution to approve or petition or similar proceeding or order in relation to a plan of complete or partial liquidation, dissolution, scheme of arrangement, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries;

(h)     any receiver, trustee, administrator or other similar Person appointed in relation to the affairs of the Company or its property or any part thereof; or

(i)     any agreement to carry out any of the foregoing.

(a)     any Contract relating to Intellectual Property that is material to the Company and its Subsidiaries, taken as a whole;

(b)     any Contract that would be required to be filed or furnished by the Company pursuant to the Instructions to Exhibits of Form 10-K under the Exchange Act;

(c)     any Contract that the Company reasonably believes calls for prospective fixed and/or contingent payments to the Company or any of its Subsidiaries in excess of US$300,000 in the aggregate under each such Contract;

(d)     any Contract involving payments in excess of US$300,000 in the aggregate under each such Contract;

(e)     any Contract, including any distribution agreements, containing covenants directly or explicitly limiting in any material respect the freedom of the Company and its Subsidiaries as a whole to compete in any geographic area, industry or line of business or with any Person or to offer any of its products or services, or any material exclusivity agreement relating to Intellectual Property, business opportunity or any resources or assets of the Company or any of its Subsidiaries;

(f)     any indenture, mortgage, promissory note, loan agreement, guaranty or other agreement or commitment for the borrowing of money or pledging or granting a security interest in respect of an amount in excess of US$300,000 in the aggregate;

(g)     any employment contracts, severance or other agreements with officers or directors, or any employment contracts, severance or other agreements that contain special compensation or golden parachute payment with employees, stockholders or consultants, of the Company or any of its Subsidiaries or Persons related to or affiliated with such Persons;

(h)     share redemption or purchase agreements or other agreements affecting or relating to the share capital of the Company or any of its Subsidiaries, including, without limitation, any agreement with any shareholder of the Company or any of its Subsidiaries which includes, without limitation, anti-dilution rights, voting arrangements or operating covenants;

(i)     any pension, profit sharing, retirement, share option or share ownership plans;

(j)     any royalty or dividend arrangement that involves the payment by the Company of more than US$100,000 annually based on the revenues or profits of the Company or any of its Subsidiaries or based on the revenues or profits derived from any Material Contract;

(k)     any material acquisition, merger, asset purchase or other similar agreement;

(l)     any sales agreement with any key customer of the Company;

(m)     any Contract under which the Company or any of its Subsidiaries has granted any Person any registration rights, or any right of first refusal, first offer or first negotiation with respect to any Securities or securities of any Subsidiaries of the Company;

(n)     any Contract relating to the formation, creation, operation, management or Control of any partnership, joint venture, limited liability company or similar arrangement;

(o)     any Contract that contains a put, call or similar right pursuant to which the Company or any of its Subsidiaries could be required to purchase or sell, as applicable, any equity interests of any Person; or

(p)     any Contract or series of Contracts pursuant to which the Company Controls any Affiliate.

Section 4.15  Environmental Matters.  To the Company's knowledge, neither the Company nor any of its Subsidiaries (i) is in violation of any statute, rule, regulation, decision or order of any governmental agency or body or any court, domestic or foreign, relating to the use, disposal or release of hazardous or toxic substances or relating to the protection or restoration of the environment or human exposure to hazardous or toxic substances (collectively, " Environmental Laws "), (ii) owns or operates any real property contaminated with any substance that is in violation of any Environmental Laws, (iii) is liable for any off-site disposal or contamination pursuant to any Environmental Laws, or (iv) is subject to any claim relating to any Environmental Laws; in each case, which violation, contamination, liability or claim has had or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect; and, to the Company's knowledge, there is no pending or threatened investigation that might lead to such a claim.

Section 4.16  Insurance .  The Company and each of the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as the Company believes to be prudent and customary in the businesses and locations in which and where the Company and the Subsidiaries are engaged.  All premiums due and payable under all such policies and bonds have been, or will be, timely paid, and the Company and its Subsidiaries are in material compliance with the terms of such policies and bonds.  Neither the Company nor any of its Subsidiaries has received any notice of cancellation of any such insurance, nor, to the Company's knowledge, will it or any Subsidiary be unable to renew their respective existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not have a Material Adverse Effect. The Company (i) maintains directors' and officers' liability insurance with financially sound and reputable insurance companies with benefits and levels of coverage as the Company believes to be prudent and customary for similarly situated companies, (ii) has timely paid all premiums on such policies, and (iii) there has been no lapse in coverage during the term of such policies.

(b)     The Company and each of its Subsidiaries have all permits, licenses, authorizations, consents, orders and approvals (collectively, “ Permits ” ) of, and have made all filings, applications and registrations with, any Governmental Authority that are required in order to carry on their business as presently conducted, except where the failure to have such Permits or the failure to make such filings, applications and registrations, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect; and all such Permits are in full force and effect and, to the knowledge of the Company, no suspension or cancellation of any of them is threatened, and all such filings, applications and registrations are current, except where such absence, suspension or cancellation, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect.

(c)     The Company is not in violation of any listing requirements of the NASDAQ and has no knowledge of any facts that would reasonably be expected to lead to delisting or suspension of its Common Stocks from the NASDAQ in the foreseeable future.

Section 4.20 Patents and Trademarks.  The Company and its Subsidiaries own, possess, license, or can acquire on reasonable terms, or have other rights to use all foreign and domestic patents, patent applications, trade and service marks, trade and service mark registrations, trade names, copyrights, inventions, trade secrets, technology, Internet domain names, know-how and other intellectual property (collectively, the " Intellectual Property ") necessary for the conduct of their respective businesses as currently conducted or as proposed to be conducted as disclosed in the SEC Reports except where the failure to own, possess, license or have such rights would not have or reasonably be expected to have a Material Adverse Effect.  Except as set forth in the SEC Reports and except where such violations or infringements would not have or reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect, (i) other than with respect to licensed Intellectual Property, there are no rights of third parties to any such Intellectual Property; (ii) to the Company's Knowledge, there is no infringement by third parties of any such Intellectual Property; (iii) there is no pending or, to the Company's Knowledge, threatened Proceeding by others challenging the Company's and/or its Subsidiaries' rights in or to any such Intellectual Property (other than licensed Intellectual Property in which case to the Company's knowledge there is no such Proceeding by others pending or threatened); (iv) there is no pending or, to the Company's knowledge, threatened Proceeding by others challenging the validity or scope of any such Intellectual Property (other than licensed Intellectual Property in which case to the Company's knowledge there is no such Proceeding by others pending or threatened); and (v) there is no pending or, to the Company's knowledge, threatened Proceeding by others that the Company and/or any Subsidiary infringes or otherwise violates any patent, trademark, service mark, trade name, copyright, invention, trade secret, technology, Internet domain name, know-how or other proprietary rights of others.

(b)     Each Company Employee Plan is in compliance in all material respects with its terms and the requirements of all applicable Laws. No Proceeding is now pending or, to the knowledge of the Company, threatened with respect to any Company Employee Plan (other than claims for benefits in the ordinary course). All employer and employee contributions to each Company Employee Plan required by applicable Laws or by the terms of such Company Employee Plan have been made, or, if applicable, accrued in accordance with normal accounting practices and in compliance in all material respects with its terms and the requirements of all applicable Laws. Each Company Employee Plan required to be registered has been registered and has been maintained in good standing with applicable Governmental Authorities.

(b)     Except as would not, individually or in the aggregate, have, or reasonably be expected to have, a Material Adverse Effect, (i) all current leases and subleases of property and assets entered into by the Company or any of its Subsidiaries are in full force and effect, valid and effective in accordance with their terms, subject to the Bankruptcy and Equity Exception, (ii) each of the Company and its Subsidiaries is in compliance with such leases and subleases, and (iii) the Company or such Subsidiary, as applicable, holds valid leasehold interests in the leased or subleased property and assets subject thereto, free of any and all Encumbrances. Neither the Company nor any of its Subsidiaries owns, holds, is obligated under or is a party to, any option, right of first refusal or other contractual right to purchase, acquire, sell, assign or dispose of any real estate or any portion thereof or interest therein.

Article V     

AGREEMENTS OF THE PARTIES

(b)     Notwithstanding any other provisions in this Section 5.03, if any party believes in good faith that any announcement or notice must be prepared or published pursuant to applicable Laws (including any rules or regulations of any securities exchange or valid legal process) or information is otherwise required to be disclosed to any Governmental Authority, such party may, in accordance with its understanding of the applicable Laws, make the required disclosure in the manner it deems in compliance with the requirements of applicable Laws; provided that the parties, to the extent permitted by applicable Law, will consult with each other before issuance, and provide each other the opportunity to review, comment upon and concur with, and use all reasonable efforts to agree on any press release or public statement with respect to this Agreement or the other Transaction Documents and the transactions contemplated hereby and thereby, and will not (to the extent practicable) issue any such press release or make any such public statement prior to such consultation and agreement, except as may be required by Law or any listing agreement with or requirement of the NASDAQ or any other applicable securities exchange, provided that the disclosing party shall, to the extent permitted by applicable Law or any listing agreement with or requirement of the NASDAQ or any other applicable securities exchange and if reasonably practicable, inform the other party about the disclosure to be made pursuant to such requirements prior to the disclosure.

(c)     Each party may disclose the Confidential Information only to its Affiliates and its and its Affiliates’ officers, directors, employees, agents and representatives on a need-to-know basis in the performance of the Transaction Agreements; provided that, such party shall ensure such Persons strictly abide by the confidentiality obligations hereunder.

(d)     The confidentiality obligations of each party hereunder shall survive the termination of this Agreement. Each party shall continue to abide by the confidentiality clause hereof and perform the obligation of confidentiality it undertakes until the other party approves release of that obligation or until a breach of the confidentiality clause hereof will no longer result in any prejudice to the other party.

Article VI

MISCELLANEOUS

(a)      Indemnification of Purchaser . The Company (the “ Indemnitor ”) shall defend, protect, indemnify and hold harmless the Purchaser and its Affiliates, shareholders, partners, members, officers, directors, employees, agents or other representatives (collectively, the “ Indemnitees ”) from and against any and all actions, causes of action, suits, claims, losses, diminution in value, costs, penalties, fees, liabilities and damages, and expenses in connection therewith (irrespective of whether any such Indemnitee is a party to the action for which indemnification hereunder is sought), and including reasonable attorneys’ fees and disbursements (the “ Indemnified Liabilities ”), incurred by any Indemnitee as a result of, or arising out of, or relating to any misrepresentation or breach of any representation or warranty made by the Indemnitor in this Agreement and other Transaction Documents, any breach of any covenant, agreement or obligation of the Indemnitor contained in this Agreement or the other Transaction Documents, and any cause of action, suit or claim brought or made against such Indemnitee by a third party arising out of or as a result of any breach of any representation or warranty made by the Indemnitor or any breach of any covenant, agreement or obligation of the Indemnitor under the Transaction Documents. To the extent that the foregoing undertaking by the Indemnitor may be unenforceable for any reason, the Indemnitor shall make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities that is permissible under applicable Law.

(b)      Indemnification of Company . Purchaser shall defend, protect, indemnify and hold harmless the Company and its Affiliates, shareholders, partners, members, officers, directors, employees, agents or other representatives (collectively, “ Company Indemnitees ”) from and against any and all actions, causes of action, suits claims, losses, diminution in value, costs, penalties, fees, liabilities, damages, and expenses in connection therewith (irrespective of whether any such Company Indemnitee is a party to the action for which indemnification hereunder is sought), and including reasonable attorneys’ fees and disbursements (the “ Company Indemnified Liabilities ”), incurred by any Company Indemnitee as a result of, or arising out of, or relating to (a) any misrepresentation or breach of any representation or warranty made by Purchaser in this Agreement and other Transaction Documents, (b) any breach of any covenant, agreement or obligation of Purchaser contained in this Agreement or the other Transaction Documents, and (c) any cause of action, suit or claim brought or made against such Company Indemnitee by a third party arising out of or as a result of any breach of any representation or warranty made by Purchaser or any breach of any covenant, agreement or obligation of Purchaser under the Transaction Documents. To the extent that the foregoing undertaking by Purchaser may be unenforceable for any reason, Purchaser shall make the maximum contribution to the payment and satisfaction of each of the Company Indemnified Liabilities that is permissible under applicable Law.

(a)     the Indemnitor shall have no liability to the Indemnitees under Section 6.02(a) with respect to any misrepresentation or breach of any representation or warranty made by the Indemnitor in this Agreement unless the aggregate amount of Indemnified Liabilities suffered or incurred by the Indemnitees thereunder exceeds US$100,000, in which case the Indemnitor shall be liable for all Indemnified Liabilities pursuant to Section 6.02(a); provided that, the limitation under this Section 6.03(a) shall not apply to any misrepresentation or breach of any representation or warranty under Section 4.01, 4.02, 4.06 or 4.19 hereof or any Indemnifiable Liabilities resulting from or arising out of, directly or indirectly, fraud, intentional concealment of material facts or other willful misconduct on the part of the Indemnitor.

(b)     the maximum aggregate liabilities of the Indemnitor in respect of Indemnified Liabilities pursuant to Section 6.02(a) with respect to any misrepresentation or breach of any representation or warranty made by the Indemnitor in this Agreement shall be subject to a cap equal to the Purchased Shares Purchase Price; provided that, the cap under this Section 6.03(b) shall not apply to any misrepresentation or breach of any representation or warranty under Section 4.01, 4.02, 4.06 or 4.19 hereof or  any Indemnifiable Liabilities resulting from or arising out of, directly or indirectly, fraud, intentional concealment of material facts or other willful misconduct on the part of the Indemnitor; and

(c)     notwithstanding any other provision contained herein and except in the case of fraud, intentional misrepresentation and/or willful misconduct, from and after the Closing, this Section 6.03 shall be the sole and exclusive remedy of any of the Indemnitees for any claims against the Indemnitor arising out of or resulting from this Agreement and the transactions contemplated hereby; provided that the Indemnitee shall also be entitled to specific performance or other equitable remedies in any court of competent jurisdiction pursuant to Section 6.14 hereof.

(d)     Notwithstanding anything in this Agreement to the contrary, for the sole purpose of determining the amount of Indemnified Liabilities (and not for determining whether any misrepresentation or breach of representations or warranties have occurred), the representations and warranties contained in Article IV shall be deemed to have been made without being qualified by “materiality” or “Material Adverse Effect” or similar qualifications, except to the extent such “materiality” qualifier or word of similar import is used for the express purpose of listing any information on the Disclosure Letter rather than qualifying a statement.

(b)     The seat of arbitration shall be Hong Kong.

(c)     The number of arbitrators shall be three. The arbitrators shall be appointed in accordance with the HKIAC rules. The arbitration proceedings shall be conducted in English.

(d)     It shall not be incompatible with this arbitration agreement for any party to seek interim or conservatory relief from courts of competent jurisdiction before the constitution of the arbitral tribunal.

If to the Company:

with a copy (for informational purposes only) to:

If to the Purchaser: 

with a copy (for informational purposes only) to:

A party may change or supplement the addresses given above, or designate additional addresses, for purposes of this Section 6.09 by giving the other parties written notice of the new address in the manner set forth above.

[Signature Page Follows]

IN WITNESS WHEREOF , the parties hereto have caused their respective signature page to this Agreement to be duly executed as of the date first written above.

KONA GRILL , INC .

/s/ Berke Bakay

Name: Berke Bakay     

Title:   Chief Executive Officer

IN WITNESS WHEREOF , the parties hereto have caused their respective signature page to this Agreement to be duly executed as of the date first written above.

Wisdom Sail Limited

/s/ Zheng Nan Yan

Name: Zheng Nan Yan

Title: Director

Exhibit A

Registration Rights Agreement

Exhibit 10.2

Dated May 2, 2018

Subscription Agreement

between

KONA GRILL, INC.

as Company

and

Berke Bakay

as the Purchaser

Table of Contents

Page

LIST OF EXHIBITS

Exhibit A         --         Registration Rights Agreement

SUBSCRIPTION AGREEMENT

THIS SUBSCRIPTION AGREEMENT (this “ Agreement ”), dated as of May 2, 2018, by and between Kona Grill, Inc . , a corporation incorporated under the laws of the State of Delaware (the “ Company ”) and Berke Bakay, a resident of the State of Arizona (the “ Purchaser ”).

RECITALS

A.     WHEREAS, the Company desires to issue, sell and deliver to the Purchaser, and the Purchaser desires to purchase and acquire from the Company, upon the terms and conditions set forth in this Agreement, the Purchased Shares (as defined below);

B.     WHEREAS, as a condition and inducement to the Purchaser’s willingness to enter into this Agreement, the Purchaser and the Company will enter into the Registration Rights Agreement (as defined below) at Closing;

NOW, THEREFORE, in consideration of the premises set forth above, the mutual promises and covenants set forth herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Purchaser hereby agree as follows:

Article I     

DEFINITIONS AND INTERPRETATION

“ Affiliate ” means, with respect to any specified Person, any other Person that directly, or indirectly through one or more intermediaries, Controls, is Controlled by, or is under common Control with, such specified Person;

“ Agreement ” has the meaning set forth in the Preamble;

“ Bankruptcy and Equity Exception ” has the meaning set forth in Section 3.02;

“ Board ” means the board of directors of the Company;

“ Business Day ” means any day that is not a Saturday, a Sunday or other day on which banks are required or authorized by Law to be closed in New York;

“ Closing ” has the meaning set forth in Section 2.01;

“ Company ” has the meaning set forth in the preamble;

“ Company Employee Plan ” means any written plan, program, policy, Contract or other arrangement providing for severance, termination pay, deferred compensation, performance awards, share or share-related awards, housing funds, insurance arrangements, fringe benefits, perquisites, superannuation funds retirement benefits, pension schemes or other employee benefits, that is maintained, contributed to or required to be contributed to by the Company or any of its Subsidiaries for the benefit of any current or former employee, director, officer or independent contractor of the Company or any of its Subsidiaries, or with respect to which the Company or any of its Subsidiaries has or would reasonably expect to have any liability or obligation, other than, in each case, one that is sponsored and maintained by a Governmental Authority. For the voidance of doubt, the Company Employee Plans include, without limitation, the Company’s 2002 Stock Plan, the Company’s 2005 Employee Stock Purchase Plan, the Company’s 2005 Stock Award Plan and the Company’s 2012 Stock Award Plan.

“ Company Indemnified Liabilities ” has the meaning set forth in Section 6.02.

“ Company Indemnitees ” has the meaning set forth in Section 6.02.

“ Contract ” means any agreement, contract, lease, indenture, instrument, note, debenture, bond, mortgage or deed of trust or other agreement, commitment, arrangement or understanding;

“ Control ” (including the terms “ Controlled by ” and “ under common Control with ”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, as trustee or executor, by contract or otherwise, including the ownership, directly or indirectly, of securities having the power to elect a majority of the board of directors or similar body governing the affairs of such Person or securities that represent a majority of the outstanding voting securities of such Person;

“ Disclosure Letter ” has the meaning set forth in Article IV;

“ Encumbrance ” means any security interest, pledge, mortgage, lien, charge, claim, hypothecation, title defect, right of first option or refusal, right of pre-emption, third-party right or interests, put or call right, lien, adverse claim of ownership or use, or other encumbrance of any kind;

“ Exchange Act ” means the U.S. Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder;

“ Financial Statements ” has the meaning set forth in Section 4.10;

“ GAAP ” means the United States generally accepted accounting principles or other accounting standards adopted by a Person and applied consistently throughout the Financial Statements;

“ Governmental Authority ” means any federal, national, foreign, supranational, state, provincial, local, municipal or other political subdivision or other government, governmental, regulatory or administrative authority, agency, board, bureau, department, instrumentality or commission or any court, tribunal, judicial or arbitral body of competent jurisdiction or stock exchange;

“ Indemnified Liabilities ” has the meaning set forth in Section 6.02;

“ Indemnitees ” has the meaning set forth in Section 6.02;

“ Indemnitor ” has the meaning set forth in Section 6.02;

“ Intellectual Property ” has the meaning set forth in Section 4.20;

“ Judgment ” has the meaning set forth in Section 4.17;

“ knowledge ” means, with respect to any party, the actual knowledge of such party’s executive officers (as defined in Rule 405 under the Securities Act) after due inquiry, including inquiry of other officers or employees of such party;

“ Law ” means any federal, national, foreign, supranational, state, provincial or local statute, law, ordinance, regulation, rule, code, order, requirement or rule of law (including common law), official policy, rule or interpretation of any Governmental Authority with jurisdiction over any of the Company or the Purchaser;

“ Material Adverse Effect ” means any event, circumstance, development, change or effect that, individually or in the aggregate, has or would reasonably be expected to have a material adverse effect on (a) the business, properties, assets, liabilities, operations, results of operations or financial condition of the Company and its Subsidiaries, taken as a whole, or (b) the authority or ability of the Company to perform its obligations under the Transaction Documents; provided , however , that for purposes of clause (a) above, in no event shall any of the following exceptions, alone or in combination with the other enumerated exceptions below, be deemed to constitute, nor shall be taken into account in determining whether there has been or will be, a Material Adverse Effect: (i) any effect resulting from compliance with the terms and conditions of, or from the announcement of the transactions contemplated by this Agreement and/or any other Transaction Document, (ii) any effect that results from changes affecting any of the industries in which the Company or its Subsidiaries operate generally or the economy generally, (iii) any effect that results from changes affecting general worldwide economic or capital market conditions, provided that any such changes in (ii) and (iii) do not disproportionately affect the Company in any material respect relative to other similarly situated participants in the industry in which they operate, (iv) any pandemic, earthquake, typhoon, hurricane, tornado or other natural disaster or similar force majeure event, (v) any failure to meet any internal or public projections, forecasts, or guidance, provided that the underlying causes that lead to any failure to meet any internal or public projections, forecasts, or guidance as set forth in (v) are not exceptions to a Material Adverse Effect, or (vi) any change in the Company’s stock price or trading volume, in and of itself, provided that the underlying causes that lead to any change in the Company’s stock price or trading volume as set forth in (vi) are not exceptions to a Material Adverse Effect;

“ Material Contract ” has the meaning set forth in Section 4.14;

“ Memorandum and Articles ” means the articles of incorporation and bylaws of the Company in effect from time to time;

“ NASDAQ ” means the Nasdaq Global Market;

“ Common Stock ” mean the common stock, par value $0.01 per share, of the Company;

“ Per Share Purchase Price ” has the meaning set forth in Section 2.01.

“ Permits ” has the meaning set forth in Section 4.18(b);

“ Person ” means any individual, partnership, corporation, association, joint stock company, trust, joint venture, limited liability company, organization, entity or Governmental Authority;

“ Proceedings ” has the meaning set forth in Section 4.17;

“ Public Documents ” has the meaning set forth in Section 4.09;

“ Purchaser ” has the meaning set forth in the preamble;

“ Purchased Shares ” means [492,997] shares of Common Stock to be issued to the Purchaser pursuant to Section 2.01;

“ Purchased Shares Purchase Price ” has the meaning set forth in Section 2.02;

“ Registration Rights Agreement ” means the registration rights agreement substantially in the form attached hereto as Exhibit A ;

“ Returns ” has the meaning set forth in Section 4.19;

“ SEC ” means the U.S. Securities and Exchange Commission;

“ Securities ” means any Common Stock or any equity interest of, or shares of any class in the share capital (ordinary, preferred or otherwise) of, the Company and any convertible securities, options, warrants and any other type of equity or equity-linked securities convertible, exercisable or exchangeable for any such equity interest or shares of any class in the share capital of the Company;

“ Securities Act ” means the U.S. Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder;

“ Subsidiary ” of any Person means any corporation, partnership, limited liability company, joint stock company, joint venture or other organization or entity, whether incorporated or unincorporated, which is Controlled by such Person;

“ Tax ” has the meaning set forth in Section 4.19;

“ Transaction Documents ” mean this Agreement, the Registration Rights Agreement, and each of the other agreements and documents entered into or delivered by the parties hereto or their respective Affiliates in connection with the transactions contemplated by this Agreement; and

“ U.S. ” or “ United States ” means the United States of America.

(a)     when a reference is made in this Agreement to an Article or Section, such reference is to an Article or Section of this Agreement;

(b)     the headings for this Agreement are for reference purposes only and do not affect in any way the meaning or interpretation of this Agreement;

(c)     the words “hereof,” “herein” and “hereunder” and words of similar import, when used in this Agreement, refer to this Agreement as a whole and not to any particular provision of this Agreement;

(d)     all terms defined in this Agreement have the defined meanings when used in any certificate or other document made or delivered pursuant hereto, unless otherwise defined therein;

(e)     the definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms;

(f)     references to a Person are also to its successors and permitted assigns;

(g)     all time references in this Agreement shall refer to the local time in Hong Kong unless otherwise specified; and

(h)     the use of the term “or” is not intended to be exclusive.

Article II

PURCHASE AND SALE OF SECURITIES

(a)       Date and Time. The Closing shall take place remotely via the exchange of documents and signatures or at such places as the parties hereto shall mutually agree in writing. The Parties acknowledge and agree that all transactions occurring at the Closing shall be deemed to have been taken and all documents to be executed and delivered by all Parties at the Closing shall be deemed to have been executed and delivered simultaneously, and no proceedings or actions shall be deemed taken nor any document deemed executed or delivered until all have been taken, executed and delivered. Unless the Parties otherwise agree in writing, if the Closing is not consummated at or prior to three business days following the date of this Agreement, this Agreement shall automatically terminate and become null and void ab initio.

(b)          Payment and Delivery . On the date of the Closing:

(i)     (A) the Purchaser shall pay the Purchased Shares Purchase Price to the Company by electronic bank transfer of immediately available funds to a bank account designated in writing by the Company at least five (5) Business Days prior to the date of this Agreement;

(ii)     the Company shall deliver to the Purchaser:

(A)     a stock certificate representing the Purchased Shares, duly executed on behalf of the Company;

(B)     an indemnification agreement in respect of the Purchaser Director, dated the date of this Agreement, duly executed on behalf of the Company, in the form of the indemnification agreements to which the other directors of the Company are parties as of the Closing;

(C)     the Registration Rights Agreement, duly executed by the Company;

(c)          Restrictive Legend . Each certificate representing any of the Purchased Securities shall be endorsed with the following legend:

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE " SECURITIES ACT "), OR APPLICABLE STATE SECURITIES LAWS.  THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OR (B) AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE  SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS OR BLUE SKY LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY AND ITS TRANSFER AGENT OR (II) UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT ( PROVIDED THAT THE TRANSFEROR PROVIDES THE COMPANY WITH REASONABLE ASSURANCES (IN THE FORM OF A SELLER REPRESENTATION LETTER AND, IF APPLICABLE, A BROKER REPRESENTATION LETTER) THAT THE SECURITIES MAY BE SOLD PURSUANT TO SUCH RULE).  NO REPRESENTATION IS MADE BY THE ISSUER AS TO THE AVAILABILITY OF THE EXEMPTION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT FOR RESALES OF THESE SECURITIES.

Article III     

REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

The Purchaser represents and warrants to the Company as of the date hereof and as of the date of the Closing that:

(a)      Experienced Investor . The Purchaser has sufficient knowledge and experience in financial and business matters so as to be capable of evaluating the merits and risks of its investment in the Purchased Shares. The Purchaser is capable of bearing the economic risks of such investment, including a complete loss of its investment. The Purchaser is an “accredited investor” as defined by Regulation D of the Securities Act of 1933, as amended.

(b)      No Public Sale or Distribution . The Purchaser is acquiring its corresponding portion of the Purchased Shares for its own account and not with a view towards, or for resale in connection with, the public sale or distribution thereof, except pursuant to sales registered or exempted under the Securities Act. The Purchaser does not presently have any agreement or understanding, directly or indirectly, with any Person to distribute any of its portion of the Purchased Shares. The Purchaser is not a broker-dealer registered with the SEC under the Exchange Act or an entity engaged in a business that would require it to be so registered as a broker-dealer.

(c)      Restricted Securities . The Purchaser acknowledges that the Purchased Shares are “restricted securities” that have not been registered under the Securities Act or any applicable state securities Law. The Purchaser further acknowledges that, absent an effective registration under the Securities Act, the Purchased Shares may only be offered, sold or otherwise transferred pursuant to an exemption from registration under the Securities Act.

Section 3.07  No Additional Representations . The Purchaser acknowledges that the Company make no representations or warranties as to any matter whatsoever except as expressly set forth in this Agreement or in any certificate delivered by the Company to the Purchaser in accordance with the terms hereof and thereof.

Article IV

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company represents and warrants to the Purchaser as of the date hereof and as of the date of the Closing that, except (a) as set forth in the correspondingly numbered section of the disclosure letter delivered by the Company to the Purchaser dated as of the date hereof (the “ Disclosure Letter ” ) or as set forth in any other section of the Disclosure Letter where it is readily apparent on the face of such disclosure that such disclosure is intended to be an exception to such Section of this Article IV or (b) as set forth in its Public Documents filed prior to the date of this Agreement (without giving effect to any amendment thereto filed on or after the date of this Agreement and excluding disclosures of non-specific risks faced by the Company included in any forward-looking statement, disclaimer, risk factor disclosure or other similarly non-specific statements that are predictive, general or forward-looking in nature):

(b)     Except for any obligations in connection with the Company Employee Plans or as otherwise set forth above in Section 4.02(a), as of the date of this Agreement, no Securities were issued, reserved for issuance or outstanding and no securities of any of its Subsidiaries convertible into or exchangeable or exercisable for any Securities were issued or outstanding. Except in connection with the Company Employee Plans, there are no bonds, debentures, notes or other indebtedness of the Company having the right to vote (or convertible into, or exchangeable for, Securities having the right to vote) on any matters on which holders of Common Stock may vote (“ Voting Company Debt ”). Except in connection with the Company Employee Plans, as of the date of this Agreement, there are no Securities (including without limitation any shareholder rights plan or “poison pill”), stock-based performance units, share appreciation rights or other rights, Contracts or undertakings of any kind to which the Company or any of its Subsidiaries is a party or by which the Company is bound (A) obligating the Company or any of its Subsidiaries to issue, deliver or sell, or cause to be issued, delivered or sold, additional Securities or any Voting Company Debt, (B) obligating the Company or any of its Subsidiaries to issue, grant or enter into any such Securities, stock-based performance units, share appreciation rights or other rights, Contracts or undertakings or (C) that give any Person the right to receive any economic interest of a nature accruing to the holders of Common Stock, including any stock-based performance unit, share appreciation right or similar right or interest based on shares of the Company. Except in connection with Company Employee Plans, there are no outstanding obligations of the Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire any Securities, stock-based performance units, share appreciation rights or other rights.

(c)     All of the issued equity securities of each Subsidiary of the Company are validly issued, fully paid and non-assessable, and were issued in compliance with the applicable registration and qualification requirements of applicable Laws.

(a)     any Material Adverse Effect;

(b)     (i) any declaration, setting aside or payment of any dividend or other distribution with respect to any share capital of the Company or any of its Subsidiaries (except for dividends or other distributions by any Subsidiary to the Company or to any of the Company’s wholly owned Subsidiaries or (ii) any redemption, repurchase or other acquisition of any share capital of the Company or any of its Subsidiaries;

(c)     any material change in any method of accounting or accounting practice by the Company or any of its Subsidiaries;

(d)     any making or revocation of any material Tax election, any settlement or compromise of any material Tax liability, or any change (or request to any taxing authority to change) in any material respect of the method of accounting of the Company or any of its Subsidiaries for Tax purposes;

(e)     any amendment to the Memorandum and Articles of the Company;

(f)     any incurrence of material indebtedness for borrowed money or any guarantee of such indebtedness for another Person or any issue or sale of debt securities, warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries;

(g)     any adoption of resolution to approve or petition or similar proceeding or order in relation to a plan of complete or partial liquidation, dissolution, scheme of arrangement, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries;

(h)     any receiver, trustee, administrator or other similar Person appointed in relation to the affairs of the Company or its property or any part thereof; or

(i)     any agreement to carry out any of the foregoing.

(a)     any Contract relating to Intellectual Property that is material to the Company and its Subsidiaries, taken as a whole;

(b)     any Contract that would be required to be filed or furnished by the Company pursuant to the Instructions to Exhibits of Form 10-K under the Exchange Act;

(c)     any Contract that the Company reasonably believes calls for prospective fixed and/or contingent payments to the Company or any of its Subsidiaries in excess of US$300,000 in the aggregate under each such Contract;

(d)     any Contract involving payments in excess of US$300,000 in the aggregate under each such Contract;

(e)     any Contract, including any distribution agreements, containing covenants directly or explicitly limiting in any material respect the freedom of the Company and its Subsidiaries as a whole to compete in any geographic area, industry or line of business or with any Person or to offer any of its products or services, or any material exclusivity agreement relating to Intellectual Property, business opportunity or any resources or assets of the Company or any of its Subsidiaries;

(f)     any indenture, mortgage, promissory note, loan agreement, guaranty or other agreement or commitment for the borrowing of money or pledging or granting a security interest in respect of an amount in excess of US$300,000 in the aggregate;

(g)     any employment contracts, severance or other agreements with officers or directors, or any employment contracts, severance or other agreements that contain special compensation or golden parachute payment with employees, stockholders or consultants, of the Company or any of its Subsidiaries or Persons related to or affiliated with such Persons;

(h)     share redemption or purchase agreements or other agreements affecting or relating to the share capital of the Company or any of its Subsidiaries, including, without limitation, any agreement with any shareholder of the Company or any of its Subsidiaries which includes, without limitation, anti-dilution rights, voting arrangements or operating covenants;

(i)     any pension, profit sharing, retirement, share option or share ownership plans;

(j)     any royalty or dividend arrangement that involves the payment by the Company of more than US$100,000 annually based on the revenues or profits of the Company or any of its Subsidiaries or based on the revenues or profits derived from any Material Contract;

(k)     any material acquisition, merger, asset purchase or other similar agreement;

(l)     any sales agreement with any key customer of the Company;

(m)     any Contract under which the Company or any of its Subsidiaries has granted any Person any registration rights, or any right of first refusal, first offer or first negotiation with respect to any Securities or securities of any Subsidiaries of the Company;

(n)     any Contract relating to the formation, creation, operation, management or Control of any partnership, joint venture, limited liability company or similar arrangement;

(o)     any Contract that contains a put, call or similar right pursuant to which the Company or any of its Subsidiaries could be required to purchase or sell, as applicable, any equity interests of any Person; or

(p)     any Contract or series of Contracts pursuant to which the Company Controls any Affiliate.

Section 4.15  Environmental Matters.  To the Company's knowledge, neither the Company nor any of its Subsidiaries (i) is in violation of any statute, rule, regulation, decision or order of any governmental agency or body or any court, domestic or foreign, relating to the use, disposal or release of hazardous or toxic substances or relating to the protection or restoration of the environment or human exposure to hazardous or toxic substances (collectively, " Environmental Laws "), (ii) owns or operates any real property contaminated with any substance that is in violation of any Environmental Laws, (iii) is liable for any off-site disposal or contamination pursuant to any Environmental Laws, or (iv) is subject to any claim relating to any Environmental Laws; in each case, which violation, contamination, liability or claim has had or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect; and, to the Company's knowledge, there is no pending or threatened investigation that might lead to such a claim.

Section 4.16  Insurance .  The Company and each of the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as the Company believes to be prudent and customary in the businesses and locations in which and where the Company and the Subsidiaries are engaged.  All premiums due and payable under all such policies and bonds have been, or will be, timely paid, and the Company and its Subsidiaries are in material compliance with the terms of such policies and bonds.  Neither the Company nor any of its Subsidiaries has received any notice of cancellation of any such insurance, nor, to the Company's knowledge, will it or any Subsidiary be unable to renew their respective existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not have a Material Adverse Effect. The Company (i) maintains directors' and officers' liability insurance with financially sound and reputable insurance companies with benefits and levels of coverage as the Company believes to be prudent and customary for similarly situated companies, (ii) has timely paid all premiums on such policies, and (iii) there has been no lapse in coverage during the term of such policies.

(b)     The Company and each of its Subsidiaries have all permits, licenses, authorizations, consents, orders and approvals (collectively, “ Permits ” ) of, and have made all filings, applications and registrations with, any Governmental Authority that are required in order to carry on their business as presently conducted, except where the failure to have such Permits or the failure to make such filings, applications and registrations, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect; and all such Permits are in full force and effect and, to the knowledge of the Company, no suspension or cancellation of any of them is threatened, and all such filings, applications and registrations are current, except where such absence, suspension or cancellation, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect.

(c)     The Company is not in violation of any listing requirements of the NASDAQ and has no knowledge of any facts that would reasonably be expected to lead to delisting or suspension of its Common Stocks from the NASDAQ in the foreseeable future.

Section 4.20  Patents and Trademarks.  The Company and its Subsidiaries own, possess, license, or can acquire on reasonable terms, or have other rights to use all foreign and domestic patents, patent applications, trade and service marks, trade and service mark registrations, trade names, copyrights, inventions, trade secrets, technology, Internet domain names, know-how and other intellectual property (collectively, the " Intellectual Property ") necessary for the conduct of their respective businesses as currently conducted or as proposed to be conducted as disclosed in the SEC Reports except where the failure to own, possess, license or have such rights would not have or reasonably be expected to have a Material Adverse Effect.  Except as set forth in the SEC Reports and except where such violations or infringements would not have or reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect, (i) other than with respect to licensed Intellectual Property, there are no rights of third parties to any such Intellectual Property; (ii) to the Company's Knowledge, there is no infringement by third parties of any such Intellectual Property; (iii) there is no pending or, to the Company's Knowledge, threatened Proceeding by others challenging the Company's and/or its Subsidiaries' rights in or to any such Intellectual Property (other than licensed Intellectual Property in which case to the Company's knowledge there is no such Proceeding by others pending or threatened); (iv) there is no pending or, to the Company's knowledge, threatened Proceeding by others challenging the validity or scope of any such Intellectual Property (other than licensed Intellectual Property in which case to the Company's knowledge there is no such Proceeding by others pending or threatened); and (v) there is no pending or, to the Company's knowledge, threatened Proceeding by others that the Company and/or any Subsidiary infringes or otherwise violates any patent, trademark, service mark, trade name, copyright, invention, trade secret, technology, Internet domain name, know-how or other proprietary rights of others.

(b)     Each Company Employee Plan is in compliance in all material respects with its terms and the requirements of all applicable Laws. No Proceeding is now pending or, to the knowledge of the Company, threatened with respect to any Company Employee Plan (other than claims for benefits in the ordinary course). All employer and employee contributions to each Company Employee Plan required by applicable Laws or by the terms of such Company Employee Plan have been made, or, if applicable, accrued in accordance with normal accounting practices and in compliance in all material respects with its terms and the requirements of all applicable Laws. Each Company Employee Plan required to be registered has been registered and has been maintained in good standing with applicable Governmental Authorities.

(b)     Except as would not, individually or in the aggregate, have, or reasonably be expected to have, a Material Adverse Effect, (i) all current leases and subleases of property and assets entered into by the Company or any of its Subsidiaries are in full force and effect, valid and effective in accordance with their terms, subject to the Bankruptcy and Equity Exception, (ii) each of the Company and its Subsidiaries is in compliance with such leases and subleases, and (iii) the Company or such Subsidiary, as applicable, holds valid leasehold interests in the leased or subleased property and assets subject thereto, free of any and all Encumbrances. Neither the Company nor any of its Subsidiaries owns, holds, is obligated under or is a party to, any option, right of first refusal or other contractual right to purchase, acquire, sell, assign or dispose of any real estate or any portion thereof or interest therein.

Article V

AGREEMENTS OF THE PARTIES

(b)     Notwithstanding any other provisions in this Section 5.03, if any party believes in good faith that any announcement or notice must be prepared or published pursuant to applicable Laws (including any rules or regulations of any securities exchange or valid legal process) or information is otherwise required to be disclosed to any Governmental Authority, such party may, in accordance with its understanding of the applicable Laws, make the required disclosure in the manner it deems in compliance with the requirements of applicable Laws; provided that the parties, to the extent permitted by applicable Law, will consult with each other before issuance, and provide each other the opportunity to review, comment upon and concur with, and use all reasonable efforts to agree on any press release or public statement with respect to this Agreement or the other Transaction Documents and the transactions contemplated hereby and thereby, and will not (to the extent practicable) issue any such press release or make any such public statement prior to such consultation and agreement, except as may be required by Law or any listing agreement with or requirement of the NASDAQ or any other applicable securities exchange, provided that the disclosing party shall, to the extent permitted by applicable Law or any listing agreement with or requirement of the NASDAQ or any other applicable securities exchange and if reasonably practicable, inform the other party about the disclosure to be made pursuant to such requirements prior to the disclosure.

(c)     Each party may disclose the Confidential Information only to its Affiliates and its and its Affiliates’ officers, directors, employees, agents and representatives on a need-to-know basis in the performance of the Transaction Agreements; provided that, such party shall ensure such Persons strictly abide by the confidentiality obligations hereunder.

(d)     The confidentiality obligations of each party hereunder shall survive the termination of this Agreement. Each party shall continue to abide by the confidentiality clause hereof and perform the obligation of confidentiality it undertakes until the other party approves release of that obligation or until a breach of the confidentiality clause hereof will no longer result in any prejudice to the other party.

Article VI

MISCELLANEOUS

(a)      Indemnification of Purchaser . The Company (the “ Indemnitor ”) shall defend, protect, indemnify and hold harmless the Purchaser and its Affiliates, shareholders, partners, members, officers, directors, employees, agents or other representatives (collectively, the “ Indemnitees ”) from and against any and all actions, causes of action, suits, claims, losses, diminution in value, costs, penalties, fees, liabilities and damages, and expenses in connection therewith (irrespective of whether any such Indemnitee is a party to the action for which indemnification hereunder is sought), and including reasonable attorneys’ fees and disbursements (the “ Indemnified Liabilities ”), incurred by any Indemnitee as a result of, or arising out of, or relating to (a) any misrepresentation or breach of any representation or warranty made by the Indemnitor in this Agreement and other Transaction Documents, (b) any breach of any covenant, agreement or obligation of the Indemnitor contained in this Agreement or the other Transaction Documents, and (c) any cause of action, suit or claim brought or made against such Indemnitee by a third party arising out of or as a result of any breach of any representation or warranty made by the Indemnitor or any breach of any covenant, agreement or obligation of the Indemnitor under the Transaction Documents. To the extent that the foregoing undertaking by the Indemnitor may be unenforceable for any reason, the Indemnitor shall make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities that is permissible under applicable Law.

(b)      Indemnification of Company . Purchaser shall defend, protect, indemnify and hold harmless the Company and its Affiliates, shareholders, partners, members, officers, directors, employees, agents or other representatives (collectively, “ Company Indemnitees ”) from and against any and all actions, causes of action, suits claims, losses, diminution in value, costs, penalties, fees, liabilities, damages, and expenses in connection therewith (irrespective of whether any such Company Indemnitee is a party to the action for which indemnification hereunder is sought), and including reasonable attorneys’ fees and disbursements (the “ Company Indemnified Liabilities ”), incurred by any Company Indemnitee as a result of, or arising out of, or relating to (a) any misrepresentation or breach of any representation or warranty made by Purchaser in this Agreement and other Transaction Documents, (b) any breach of any covenant, agreement or obligation of Purchaser contained in this Agreement or the other Transaction Documents, and (c) any cause of action, suit or claim brought or made against such Company Indemnitee by a third party arising out of or as a result of any breach of any representation or warranty made by Purchaser or any breach of any covenant, agreement or obligation of Purchaser under the Transaction Documents. To the extent that the foregoing undertaking by Purchaser may be unenforceable for any reason, Purchaser shall make the maximum contribution to the payment and satisfaction of each of the Company Indemnified Liabilities that is permissible under applicable Law.

(a)     the Indemnitor shall have no liability to the Indemnitees under Section 6.02(a) with respect to any misrepresentation or breach of any representation or warranty made by the Indemnitor in this Agreement unless the aggregate amount of Indemnified Liabilities suffered or incurred by the Indemnitees thereunder exceeds US$100,000, in which case the Indemnitor shall be liable for all Indemnified Liabilities pursuant to Section 6.02(a); provided that, the limitation under this Section 6.03(a) shall not apply to (i) any misrepresentation or breach of any representation or warranty under Section 4.01, 4.02, 4.06 or 4.19 hereof or (ii) any Indemnifiable Liabilities resulting from or arising out of, directly or indirectly, fraud, intentional concealment of material facts or other willful misconduct on the part of the Indemnitor.

(b)     the maximum aggregate liabilities of the Indemnitor in respect of Indemnified Liabilities pursuant to Section 6.02(a) with respect to any misrepresentation or breach of any representation or warranty made by the Indemnitor in this Agreement shall be subject to a cap equal to the Purchased Shares Purchase Price; provided that, the cap under this Section 6.03(b) shall not apply to (i) any misrepresentation or breach of any representation or warranty under Section 4.01, 4.02, 4.06 or 4.19 hereof or (ii) any Indemnifiable Liabilities resulting from or arising out of, directly or indirectly, fraud, intentional concealment of material facts or other willful misconduct on the part of the Indemnitor; and

(c)     notwithstanding any other provision contained herein and except in the case of fraud, intentional misrepresentation and/or willful misconduct, from and after the Closing, this Section 6.03 shall be the sole and exclusive remedy of any of the Indemnitees for any claims against the Indemnitor arising out of or resulting from this Agreement and the transactions contemplated hereby; provided that the Indemnitee shall also be entitled to specific performance or other equitable remedies in any court of competent jurisdiction pursuant to Section 6.14 hereof.

(d)     Notwithstanding anything in this Agreement to the contrary, for the sole purpose of determining the amount of Indemnified Liabilities (and not for determining whether any misrepresentation or breach of representations or warranties have occurred), the representations and warranties contained in Article IV shall be deemed to have been made without being qualified by “materiality” or “Material Adverse Effect” or similar qualifications, except to the extent such “materiality” qualifier or word of similar import is used for the express purpose of listing any information on the Disclosure Letter rather than qualifying a statement.

(b)     The seat of arbitration shall be Phoenix, Arizona.

(c)     The number of arbitrators shall be three. The arbitrators shall be appointed in accordance with the American Arbitration Association rules.

(d)     It shall not be incompatible with this arbitration agreement for any party to seek interim or conservatory relief from courts of competent jurisdiction before the constitution of the arbitral tribunal.

If to the Company:

with a copy (for informational purposes only) to:

If to the Purchaser: 

A party may change or supplement the addresses given above, or designate additional addresses, for purposes of this Section 6.09 by giving the other parties written notice of the new address in the manner set forth above.

[Signature Page Follows]

IN WITNESS WHEREOF , the parties hereto have caused their respective signature page to this Agreement to be duly executed as of the date first written above.

KONA GRILL , INC .

  /s/ Christi Hing

Name: Christi Hing

Title:   Chief Financial Officer

IN WITNESS WHEREOF , the parties hereto have caused their respective signature page to this Agreement to be duly executed as of the date first written above.

/s/ Berke Bakay

Name: Berke Bakay

Exhibit A

Registration Rights Agreement

Exhibit 10.3

REGISTRATION RIGHTS AGREEMENT

This REGISTRATION RIGHTS AGREEMENT (this “ Agreement” ) is made and entered into as of May 4, 2018, between Kona Grill, Inc . , a Delaware corporation (the “ Company ”), Ahwanova Limited, a company limited by shares incorporated under the laws of British Virgin Islands (“ Ahwanova ”), and Berke Bakay (“ Bakay ” and together with Ahwanova, each a “ Purchaser ” and collectively, the “ Purchaser s ”) and each other Holder from time to time a party hereto.

WHEREAS, this Agreement is made in connection with the closing of the issuance and sale of the Company’s common stock, par value $0.01 per share (the “ Shares ”), pursuant to (1) the Subscription Agreements, dated as of May 2, 2018, by and between the Company and each of Wisdom Sail Limited, a limited liability company incorporated under the laws of Cayman Islands (“ Wisdom ”), and Bakay (as amended from time to time, the “ Subscription Agreement s ”) and (2) the Assignment Agreement, dated as of May 3, 2018, by and between Wisdom and Ahwanova;

WHEREAS, in connection with the Subscription Agreements, the Company has agreed to register for resale by the Holder(s) (as defined below) the Shares purchased by the Purchasers; and

WHEREAS, it is the Company’s obligation under each Subscription Agreements to execute and deliver this Agreement to the Purchaser that is a party thereto.

NOW THEREFORE, in consideration of the mutual covenants and agreements set forth herein and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by each party hereto, the parties hereby agree as follows:

Article I
DEFINITIONS

Section 1.01      Definitions . In addition to the definitions set forth above, the following terms, as used herein, have the following meanings:

“ Affiliate ” of any particular Person means any other Person directly or indirectly controlling, controlled by or under common control with such Person. For purposes of this definition, “control” (including, the correlative meanings, “controlling”, “controlled by” and “under common control with”) means, with respect to a Person, the power to direct or cause the direction of the management and policies of such Person, directly or indirectly, whether through the ownership of equity interests, including but not limited to voting securities, by contract or agency or otherwise.

“ Agreement ” means this Registration Rights Agreement, as it may be amended, supplemented or restated from time to time.

“ Block Trade ” means any bought deal or block sale by the applicable Selling Holder to a financial institution.

“ Business Day ” means any day except a Saturday, Sunday or other day on which commercial banks in The City of New York are authorized by law to close.

“ Commission ” means the Securities and Exchange Commission.

“ Common Stock ” means the common stock, par value $0.01 per share, of the Company.

“ Demand Registration ” is defined in Section 2.02(a) .

“ Demand Registration Statement ” is defined in Section 2.02(a) .

“ End of Suspension Notice ” is defined in Section 2.05(b) .

“ Exchange Act ” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

“ FINRA ” means Financial Industry Regulatory Authority, Inc.

“ Holder ” means each of the Purchasers and any Permitted Transferee.

“ Indemnified Party ” is defined in Section 2.10 .

“ Indemnifying Party ” is in Section 2.10 .

“ Inspector ” means an Inspector as defined in Section 2.06 .

“Issuer Free Writing Prospectus” means an issuer free writing prospectus as defined in Rule 433 under the Securities Act.

“ NASDAQ ” is defined in Section 3.01 .

“ Overnight Underwritten Offering ” means an underwritten offering that is launched after the close of trading on one trading day and priced before the open of trading on the next succeeding trading day.

“ Permitted Transferee ” means any Person to whom a Holder sells, assigns or transfers all or a portion of its Registrable Securities; provided that (a) such Person is a Private Purchaser; and (b) such Private Purchaser executes a joinder to this Agreement under which it becomes a Holder under this Agreement and agrees to be bound by the provisions of this Agreement applicable to Holders.

“ Person ” means an individual or a corporation, partnership, limited liability company, association, trust, or any other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.

“ Piggy-Back Notice ” is defined in Section 2.03 .

“ Piggy-Back Registration ” is defined in Section 2.03 .

“ Piggy-Back Registration Statement ” is defined in Section 2.03 .

“ Private Purchaser ” means a Person to which a Purchaser sells, assigns or transfers its Registrable Securities in a transaction not registered under the Securities Act.

“ Records ” is defined in Section 2.06 .

“ Registrable Securities ” means the Common Stock acquired by the Purchasers pursuant to the Subscription Agreements (equal to 2,651,261 shares of Common Stock being subscribed for by Ahwanova and 492,997 shares of Common Stock being subscribed for by Bakay) and any additional securities that may be issued or distributed or be issuable in respect of such Common Stock by way of conversion, dividend, stock-split, distribution or exchange, merger, consolidation, exchange, recapitalization or reclassification or similar transactions until (a) a registration statement covering such shares has been declared effective by the Commission and such shares have been disposed of pursuant to such effective registration statement; (b) such shares have been sold under circumstances in which all of the applicable conditions of Rule 144 are met; (c) such time as the Holders are permitted to sell such shares under Rule 144 without limitation on the amount of securities sold or the manner of sale; or (d) such shares are otherwise transferred to any Person other than a Permitted Transferee.

“ Registration Expenses ” is defined in Section 2.07 .

“ Representatives ” means, with respect to any Person, any of such Person’s officers, directors, employees, agents, attorneys, accountants, actuaries, consultants or financial advisors or other Persons associated with, or acting on behalf of, such Person.

“ Rule 144 ” means Rule 144 promulgated under the Securities Act, as amended from time to time, or any similar successor rule thereto that may be promulgated by the Commission.

“ Rule 144 A ” means Rule 144A promulgated under the Securities Act, as amended from time to time, or any similar successor rule thereto that may be promulgated by the Commission.

“ Securities Act ” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

“ Selling Holder ” means a Holder who is selling or may sell Registrable Securities pursuant to a registration statement under the Securities Act pursuant to the terms hereof.

“ Shelf Registration Statement ” is defined in Section 2.01(a).

“ Subscription Agreement s ” is defined in the Recitals.

“ Suspension Event ” is defined in Section 2.05(a) .

“ Suspension Notice ” is defined in Section 2.05(b) .

“ Underwriter ” means, with respect to any underwritten offering under this Agreement, an underwriter for such offering.

“ Underwritten Demand Offering ” is defined in Section 2.02(c) .

“ Underwritten Piggy-Back Offering ” is defined in Section 2.02(c) .

“ Underwritten Shelf Offering ” is defined in Section 2.01(c) .

Article II
REGISTRATION RIGHTS

Section 2.01      Shelf Registration.

(a)      Preparation and Filing of Shelf Registration Statement. So long as the Company is eligible to use Form S-3 or similar short-form registration statement, at any time when a shelf registration statement on Form S-3 of the Company that provides for the resale of all of the Registrable Securities on a delayed or continuous basis pursuant to Rule 415 under the Securities Act (a “ Shelf Registration Statement ”) is not effective, as promptly as practicable following the written request of a Purchaser (but no later than thirty (30) days after the receipt of such written request), the Company shall (i) prepare and file a Shelf Registration Statement, and (ii) if such Shelf Registration Statement is not an “automatic shelf registration statement” as defined in Rule 405 of the Securities Act, use reasonable best efforts to cause the Shelf Registration Statement to be declared effective by the Commission as promptly as reasonably practicable after the receipt of such written request (but no later than sixty (60) days thereafter, or ninety (90) days thereafter if the Commission reviews and has written comments to the Shelf Registration Statement. The Company shall use reasonable best efforts to keep such Shelf Registration Statement continuously effective for a period ending when all Registrable Securities covered by such Shelf Registration Statement are no longer Registrable Securities.

(b)      Selling Holders . In the event that a Shelf Registration Statement is filed after the date of this Agreement as provided under Section 2.01 (a) , as promptly as practicable (but no later than thirty (30) days) after the time the Shelf Registration Statement becomes or is declared effective, the Purchasers (and, if applicable, any other Holder) shall be named as Selling Holders in the Shelf Registration Statement, or in a prospectus supplement thereto, in such a manner as to permit such Holders to deliver a prospectus to purchasers of Registrable Securities in accordance with applicable law. If required by applicable law, subject to the terms and conditions hereof, after the effectiveness of a new Shelf Registration Statement, upon the written request of any Holder, the Company shall file a supplement to such prospectus or amendment to the Shelf Registration Statement to name such Holder as a Selling Holder therein and shall use reasonable best efforts to cause any post-effective amendment to such Shelf Registration Statement filed for such purpose to be declared effective by the Commission as promptly as reasonably practicable after the filing thereof. Unless the Company and each Holder shall consent in writing, no party, other than a Holder, shall be a Selling Holder under the Shelf Registration Statement.

(c)      Underwritten Shelf Offering . The Holders may, by written notice to the Company, elect to sell some or all of the Registrable Securities registered pursuant to a Shelf Registration Statement, in the form of an underwritten offering under the Shelf Registration Statement (an “Underwritten Shelf Offering”); provided, that (i) the Company shall not be obligated to effect more than three (3) underwritten offerings under this Section 2.01 (c) and Section 2.02 ; (ii) the Company shall not be obligated to effect an underwritten offering more than once in any six (6) month period; and (iii) the Company shall not be required to effect an Underwritten Shelf Offering unless the amount of such offering is expected to be at least $500,000. For the avoidance of doubt, the Holders may make an unlimited number of sales under any Shelf Registration Statement that are not underwritten offerings. Any request for an Underwritten Shelf Offering will specify the number of shares of Registrable Securities proposed to be sold and will also specify the intended method of disposition thereof (which may include a Block Trade or an Overnight Underwritten Offering). The Company shall select the Underwriter or Underwriters in connection with any such Underwritten Shelf Offering; provided that such Underwriter or Underwriters must be reasonably satisfactory to the Holders. Unless the Company and each Holder shall consent in writing, no party, other than a Holder, shall be permitted to offer securities in connection with any such Underwritten Shelf Offering.

(d)     Filing of Additional Registration Statements. The Company shall prepare and file such additional registration statements or prospectus supplements thereto as may be necessary under the rules and regulations promulgated pursuant to the Securities Act and use reasonable best efforts to cause such registration statements to be declared effective by the Commission so that the registration statement remains continuously effective with respect to resales of Registrable Securities as of and for the period required under the last sentence of Section 2.01 (a) and the Holders may sell Registrable Securities as Selling Holders thereunder, such subsequent registration statements to constitute a Shelf Registration Statement hereunder. To the extent that the Company is a well-known seasoned issuer (as defined in Rule 405 of the Securities Act, each Shelf Registration Statement shall be an automatic shelf registration statement on Form S-3. To the extent that the Company is not eligible to use an automatic shelf registration statement on Form S-3, the Shelf Registration Statement shall be a non-automatic shelf registration statement on Form S-3, or if the Company ceases to be eligible to use Form S-3, the Shelf Registration Statement shall be a registration statement on Form S-1.

Section 2.02      Demand Registration.

(a)      Request for Registration. In the event that the Company fails to file, has not filed or, if filed, fails to maintain the effectiveness of, a Shelf Registration Statement then, in addition to any other remedies the Holders may have, at law or in equity, one or more Holders may make a written request to the Company for registration under the Securities Act of all or part of their Registrable Securities (a “Demand Registration”). As promptly as practicable (but no later than thirty (30) days) after receipt of the written request for the Demand Registration, the Company shall prepare and file a registration statement on an appropriate form with respect to any Demand Registration (a “Demand Registration Statement”) and shall use reasonable best efforts to cause the Demand Registration Statement to be declared effective by the Commission as promptly as reasonably practicable (but no later than sixty (60) days, or ninety (90) days if the Commission reviews and has written comments to the Demand Registration Statement) after the filing thereof and the Company shall use reasonable best efforts to keep such Demand Registration Statement effective for a period ending when all Registrable Securities covered by the Demand Registration Statement are no longer Registrable Securities. The Company shall not be obligated to effect more than three (3) underwritten offerings under Section 2.01(c) and this Section 2.02. Any request for a Demand Registration will specify the number of shares of Registrable Securities proposed to be sold and will also specify the intended method of disposition thereof (which may include a Block Trade or an Overnight Underwritten Offering). Unless the Company and each Holder shall consent in writing, no party, other than a Holder, shall be permitted to offer securities in connection with any such Demand Registration. Any Holder that has requested its Registrable Securities be included in a Demand Registration pursuant to this Section 2.02 (a) may withdraw all or any portion of its Registrable Securities from a Demand Registration at any time prior to the effectiveness of the applicable Demand Registration Statement. Upon receipt of a notice to such effect from Holders with respect to all of the Registrable Securities to be included in the Demand Registration, the Company shall cease all efforts to secure effectiveness of the applicable Demand Registration Statement.

(b)      Effective Registration. A registration will not count as a Demand Registration until the applicable Demand Registration Statement has become effective.

(c)      Underwritten Demand Offering. If a Holder so elects, by written notice to the Company, the offering of Registrable Securities pursuant to a Demand Registration shall be in the form of an underwritten offering (an “ Underwritten Demand Offering ”); provided, however , that (i) the Company shall not be obligated to effect more than three (3) underwritten offerings under Section 2.01(c) and this Section 2.02 ,(ii) the Company shall not be obligated to effect an underwritten offering more than once in any six (6) month period; and (iii) the Company shall not be required to effect an Underwritten Demand Offering unless the amount of such offering is expected to be at least $500,000. A majority in interest of the Holders participating in an Underwritten Demand Offering shall select the Underwriter or Underwriters in connection with any such Underwritten Demand Offering; provided that such Underwriter or Underwriters must be reasonably satisfactory to the Company. Unless the Company and each Holder shall consent in writing, no party, other than a Holder, shall be permitted to offer securities in connection with any such Underwritten Demand Offering.

Section 2.03      Piggy-Back Registration. If the Company proposes to file a registration statement under the Securities Act with respect to any offering of its securities for its own account or for the account of any of its securityholders (other than (a) any registration statement filed by the Company under the Securities Act pursuant to Section 2.01 or Section 2.02 , (b) a registration statement on Form S-4 or Form S-8 (or any related form or substitute form that may be adopted by the Commission), (c) a registration incidental to an issuance of debt securities, (d) in connection with any dividend or distribution reinvestment or similar plan, or (e) a registration of securities solely relating to an offering and sale to employees or directors of the Company pursuant to any employee stock plan or other employee benefit plan arrangement, a dividend reinvestment plan, or a merger or consolidation) (a “ Piggy-Back Registration Statement ”), then the Company shall give written notice of such proposed filing to the Holders (a “ Piggy-Back Notice ”) as soon as practicable (but in no event less than fifteen (15) days before the anticipated filing date) (such a registration, a “ Piggy-Back Registration ”). The Piggy-Back Notice shall state the intended method of disposition of the securities in the Piggy-Back Registration, and such notice shall offer the Holders the opportunity to register such number of shares of Registrable Securities as each such Holder may request. Any Holder may elect to include its Registrable Securities in such Piggy-Back Registration by delivering written notice of such election (including the number of shares of Registrable Securities it desires to include) within fifteen (15) days of receipt of the Piggy-Back Notice. If the Piggy-Back Registration is in the form of an underwritten offering (an “ Underwritten Piggy-Back Offering ”), the Company shall use reasonable best efforts to cause the managing Underwriter or Underwriters of such Underwritten Piggy-Back Offering to permit the Registrable Securities requested to be included therein to be included on the same terms and conditions as apply to the Company and any other securityholders. Each Holder shall be permitted to withdraw all or part of its Registrable Securities from a Piggy-Back Registration at any time prior to the effectiveness of such Piggy-Back Registration Statement. The Company (whether on its own good faith determination or as the result of a request for withdrawal by persons pursuant to separate written contractual obligations) may withdraw a Piggy-Back Registration Statement at any time prior to the effectiveness thereof. The Company shall not be obligated to effect more than three (3) registrations under this Section 2.03 . A registration will not count for purposes of the immediately preceding sentence until the applicable Piggy-Back Registration Statement has become effective.

Section 2.04      Reduction of Offering. Notwithstanding anything contained herein, if the managing Underwriter or Underwriters of an offering described in Section 2.01(c) , Section 2.02 or Section 2.03 advise the Company and the Holders of the Registrable Securities included in such offering in writing that the inclusion of the number of securities requested to be included in such underwritten offering creates a substantial risk that the price per share will be reduced or will otherwise materially adversely affect the timing, the distribution method, or the probability of success of such offering, then the amount of securities to be offered shall be reduced to a number that, in the opinion of such managing Underwriter or Underwriters can be sold without creating such a risk or having such other material adverse effect, and such number of securities shall be allocated as follows:

(a)     in the event of an Underwritten Shelf Offering or an Underwritten Demand Offering, the securities to be included in such Underwritten Shelf Offering or Underwritten Demand Offering shall be allocated solely to the Holders that have requested to participate in such Underwritten Shelf Offering or Underwritten Demand Offering on a pro rata basis based on the relative number of Registrable Securities then held by them; and

(b)     in the event of an Underwritten Piggy-Back Offering, the securities to be included in such Underwritten Piggy-Back Offering shall be allocated, (i) first, to the Company and/or any Person (other than a Holder) exercising a contractual right to demand the registration and sale of its securities in such Underwritten Piggy-Back Offering (it being understood there are no such contractual rights in effect as of the date of this Agreement), as the case may be, (ii) second, and only if all the securities referred to in clause (i) have been included, to the Holders that have requested to participate in such Underwritten Piggy-Back Offering on a pro rata basis based on the relative number of Registrable Securities then held by each of them and (iii) third, and only if all of the Registrable Securities referred to in clause (ii) have been included, any other securities eligible for inclusion in such Underwritten Piggy-Back Offering (it being understood there are no such eligible securities as of the date of this Agreement).

Section 2.05      Black-Out Periods.

(a)     Notwithstanding the provisions of Section 2.01 or Section 2.02 , the Company shall be permitted (x) to postpone the filing of any Shelf Registration Statement filed pursuant to Section 2.01 or any Demand Registration Statement filed pursuant to Section 2.02 , (y) to suspend the effectiveness of any Shelf Registration Statement or Demand Registration Statement or (z) to require the Holders not to sell Registrable Securities under any Shelf Registration Statement or Demand Registration Statement, in each case, for such times as the Company reasonably may determine is necessary and advisable, if any of the following events shall occur (each such circumstance a “Suspension Event”): (i) the board of directors of the Company determines in good faith that (A) disclosure of a material transaction that would otherwise be required to be disclosed due to such registration would have an adverse effect on the Company or the Company’s ability to consummate such a material transaction, (B) such registration or continued registration would require premature disclosure of material information that the Company has a bona fide business purpose for preserving as confidential or (C) such registration or continued registration would render the Company unable to comply with the requirements of the Securities Act or Exchange Act; or (ii) solely in the case of foregoing clause (y) or clause (z), the board of directors of the Company determines in good faith that the Company is required by law, rule or regulation to supplement or amend a Shelf Registration Statement or Demand Registration Statement in order to ensure that it (or the prospectus contained therein) does not contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. Upon the occurrence of any Suspension Event, the Company shall use reasonable best efforts to resolve the Suspension Event and to file the applicable Shelf Registration Statement or Demand Registration Statement, to cause the applicable Shelf Registration Statement or Demand Registration Statement to become effective and/or to permit resumed use of the Shelf Registration Statement or Demand Registration Statement, as applicable, as soon as reasonably possible. If the Company exercises a suspension under this Section 2.05 (a) , then during the period of such suspension, the Company shall not engage in any transaction involving the offer, issuance, sale or purchase of Company equity securities (whether for the benefit of the Company or a third Person), except (A) transactions involving the issuance or purchase of Company equity securities as contemplated by employee benefit plans or employee or director arrangements and (B) the issuance of Company equity securities as acquisition consideration pursuant to any transaction described in clause (i) of this Section 2.05 (a) .

(b)     The Company will provide written notice (a “Suspension Notice”) to the Holders of the occurrence of any Suspension Event within three (3) Business Days after its occurrence; provided, however, that the Company shall not be permitted to exercise a suspension pursuant to Section 2.05 (a) more than twice during any twelve (12)-month period, more than once per quarter or for a period exceeding sixty (60) days on any one occasion. Upon receipt of a Suspension Notice, each Holder agrees that it will (i) immediately discontinue offers and sales of Registrable Securities under the applicable Shelf Registration Statement or Demand Registration Statement and (ii) maintain the confidentiality of any information included in the Suspension Notice unless otherwise required by law or subpoena. The Holders may recommence effecting offers and sales of the Registrable Securities pursuant to the applicable Shelf Registration Statement or Demand Registration Statement following further written notice to such effect (an “End of Suspension Notice”) from the Company, which End of Suspension Notice shall be given by the Company to the Holders promptly (and no later than three (3) Business Days) following the conclusion of any Suspension Event and its effect.

(c)     Notwithstanding any provision herein to the contrary, if the Company shall give a Suspension Notice with respect to any Shelf Registration Statement or Demand Registration Statement pursuant to Section 2.05 (a) , the Company agrees that it shall extend the period of time during which such Shelf Registration Statement or Demand Registration Statement shall be maintained effective (including the period referred to in Section 2.06(a) ) by the number of days during the period from the date of receipt by the Holders of the Suspension Notice to and including the date of receipt by the Holders of the End of Suspension Notice and promptly provide copies of the supplemented or amended prospectus necessary to resume offers and sales, with respect to each Suspension Event; provided , that such period of time shall not be extended beyond the date that the Registrable Securities covered by such Shelf Registration Statement or Demand Registration Statement are no longer Registrable Securities.

Section 2.06      Registration Procedures; Filings; Information. Subject to Section 2.05 , in connection with any Shelf Registration Statement under Section 2.01 , any Demand Registration Statement under Section 2.02 or Piggy-Back Registration Statement under Section 2.03 , the Company will use reasonable best efforts to effect the registration and the sale of the applicable Registrable Securities in accordance with the intended method of disposition thereof as quickly as possible, and in connection with any such request:

(a)     The Company will as expeditiously as practicable, pursuant to the timing requirements set forth herein, prepare and file with the Commission the applicable registration statement on the applicable form required under this Agreement (or, if this Agreement does not require a form, any appropriate form permitting for the sale of the Registrable Securities according to the intended method of disposition) and use reasonable best efforts to cause such registration statement to become and remain effective (i) in the case of a Shelf Registration Statement, for the period described in the last sentence of Section 2.01(a) and (ii) in the case of a Demand Registration Statement or Piggy-Back Registration Statement, for a period of not less than 180 days from the effective date of such registration statement or until all Registrable Securities covered by such Demand Registration Statement or Piggy-Back Registration Statement (as applicable) have been sold.

(b)     The Company will prior to filing a registration statement or prospectus or any amendment or supplement thereto or any Issuer Free Writing Prospectus, furnish to each Selling Holder and each Underwriter, if any, of the Registrable Securities covered by such registration statement copies of such registration statement, prospectus, amendment or supplement or Issuer Free Writing Prospectus as proposed to be filed with copies of all documents proposed to be filed, which documents shall be subject to the reasonable review of such Selling Holder and Underwriter, if any, and their respective counsel and not file any such registration statement, prospectus, amendment or supplement or Issuer Free Writing Prospectus to which any Selling Holder or the Underwriter, if any, shall reasonably object; provided , that the Company shall not be responsible for any delay in filing due to such objections. The Company shall thereafter furnish or make available to such Selling Holder and Underwriter, if any, such number of conformed copies of such registration statement, each amendment and supplement thereto (and upon request, all exhibits thereto and documents incorporated by reference therein), the prospectus included in such registration statement (including each preliminary prospectus), any Issuer Free Writing Prospectus and such other documents as such Selling Holder or Underwriter may reasonably request in order to facilitate the disposition of the Registrable Securities owned by such Selling Holder.

(c)     After the filing of the registration statement, the Company will promptly notify each Selling Holder of Registrable Securities covered by such registration statement of (i) any stop order issued or threatened by the Commission or any order by the Commission or any other regulatory authority preventing or suspending the use of any preliminary or final prospectus or the initiation or threatening of any proceedings for such purposes, (ii) any written comments by the Commission or any request by the Commission or any other federal or state governmental authority for amendments or supplements to such registration statement or for additional information or (iii) the receipt by the Company of any notification with respect to the suspension of the qualification of the Registrable Securities for offering or sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose.

(d)     The Company will promptly take all reasonable actions required to prevent, or obtain the withdrawal of, any stop order or other order suspending the use of any preliminary or final registration statement.

(e)     The Company will use reasonable best efforts to (i) register or qualify the Registrable Securities under such other securities or blue sky laws of such jurisdictions in the United States (where an exemption does not apply) as any Selling Holder or managing Underwriter or Underwriters, if any, reasonably (in light of such Selling Holder’s intended method of disposition) requests and (ii) cause such Registrable Securities to be registered with or approved by such other governmental agencies or authorities as may be necessary by virtue of the business and operations of the Company and do any and all other acts and things that may be reasonably necessary or advisable to enable such Selling Holder to consummate the disposition of the Registrable Securities owned by such Selling Holder; provided that the Company will not be required to qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this clause (e) .

(f)     The Company will promptly notify each Selling Holder of Registrable Securities, at any time when a prospectus covering the resale of such Registrable Securities is required to be delivered under the Securities Act, of (i) the Company’s receipt of any notification of the suspension of the qualification of such Registrable Securities for sale in any jurisdiction, (ii) the occurrence of an event requiring the preparation of a supplement or amendment to such prospectus so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus will not contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading and promptly make available to each Selling Holder any such supplement or amendment and (iii) make available or deliver to each Selling Holder and each Underwriter, if any, without charge, as many copies of the applicable prospectus (including each preliminary prospectus), any amendment or supplement thereto and such other documents necessary to facilitate the disposition of the Registrable Securities as such Selling Holder or Underwriter may reasonably request.

(g)     The Company will promptly (i) incorporate in a prospectus supplement or post-effective amendment such information as the Underwriter or the applicable Selling Holders reasonably request be included therein relating to the plan of distribution with respect to such Registrable Securities, and make all required filings of such prospectus supplement or post-effective amendment, (ii) in the case of such a post-effective amendment, use reasonably best efforts to cause such post-effective amendment to be declared effective by the Commission as soon as reasonably possible (if such post-effective amendment is not automatically effective upon filing with the Commission), and (iii) make available or furnish to each Selling Holder and each Underwriter, if any, without charge, as many conformed copies as such Selling Holder or Underwriter may reasonably request of the applicable registration statement and any amendment or post-effective amendment thereto, including financial statements and schedules, all documents incorporated therein by reference and all exhibits (including those incorporated by reference); provided , that the Company shall have no obligation to incorporate any information if the Company reasonably expects that so doing would cause such registration statement, prospectus supplement or post-effective amendment to contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.

(h)     The Company will enter into customary agreements (including an underwriting agreement, if any, in customary form) and use reasonable best efforts to take such other actions as the applicable Selling Holders or Underwriters, if any, reasonably request and that are required for the disposition of such Registrable Securities, including, without limitation, (A) obtaining for delivery to such Selling Holders or the purchaser(s) of the relevant Registrable Securities or Underwriters, as the case may be, with copies to such Selling Holders, an opinion or opinions from counsel for the Company dated as of the closing date of the applicable offering, in the form customarily given in opinions of the Company’s counsel to underwriters in underwritten registered offerings, which opinions shall be reasonably satisfactory to such Underwriters and their counsel, (B) in the case of an underwritten offering, obtaining for delivery to such Underwriters, with copies to such Selling Holders, a comfort letter from the Company’s independent certified public accountants in customary form and covering such matters of the type customarily covered by comfort letters as such Underwriters reasonably request, dated the date of the relevant underwriting agreement and brought down to the closing of the relevant underwritten offering, and (C) cooperating with such Selling Holders and Underwriters and their respective counsel in connection with any other filings required to be made with FINRA (if any).

(i)     The Company will make available upon reasonable notice and during normal business hours for inspection by any applicable Underwriter and any attorney, accountant or other professional retained by any such Underwriter (collectively, the “ Inspectors ”), all financial and other book and records, pertinent corporate documents and books and records relating to the properties of the Company or its subsidiaries (collectively, the “ Records ”) as shall be reasonably necessary to enable them to exercise their due diligence responsibility, and cause the officers, directors and employees of the Company and its subsidiaries to supply all information reasonably requested by any Inspector in connection with such registration statement and related due diligence defense, provided that such Records that are furnished by the Company and that are non-public shall be used only in connection with such registration .

(j)     The Company will otherwise use reasonable best efforts to comply with all applicable rules and regulations of the Commission, and make available to its securityholders, as soon as reasonably practicable, an earnings statement covering a period of 12 months, beginning within three months after the effective date of the registration statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 of the Commission promulgated thereunder (or any successor rule or regulation hereafter adopted by the Commission).

(k)     The Company may require each applicable Selling Holder to promptly furnish in writing to the Company such information regarding such Selling Holder, the Registrable Securities held by it and the intended method of disposition of the Registrable Securities as the Company may from time to time reasonably request and such other information as may be legally required in connection with such registration.

(l)     Each Selling Holder agrees that it will promptly notify the Company at any time when a prospectus relating to the registration of such Registrable Securities is required to be delivered under the Securities Act of the happening of an event as a result of which information previously furnished by such Selling Holder to the Company in writing for inclusion in such prospectus contains an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances in which they were made.

(m)     In the case of an underwritten offering, the Company will cooperate with the customary marketing efforts of the Underwriters, including, without limitation, providing information and materials and making appropriate senior executive officers of the Company available to participate in meetings, customary “road show” presentations and/or investor conference calls to market the Registrable Securities that may be reasonably requested by the Underwriters in any such underwritten offering and otherwise to reasonably facilitate, cooperate with, and participate in each proposed offering contemplated herein and customary selling efforts related thereto.

(n)     In the case of an Overnight Underwritten Offering (if the Company is permitted to conduct a takedown off of a Shelf Registration Statement in the form of an Overnight Underwritten Offering), the Company will use its reasonable best efforts to effect the registration and the sale of the applicable Registrable Securities in accordance with the intended method of disposition thereof as quickly as practicable; provided that the applicable Selling Holders provide the Company with at least three (3) Business Days’ notice of such offering.

(o)     The Company will provide a transfer agent, registrar and CUSIP number for all the applicable Registrable Securities no later than the effective date of the applicable registration statement.

(p)     The Company will use commercially reasonable efforts to cooperate with the applicable Selling Holders and/or Underwriters, as the case may be, to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be sold and not bearing any restrictive legends, and enable such Registrable Securities to be in such denomination (consistent with the provisions of the governing documents thereof) and registered in such names as each Selling Holder or Underwriter, as the case may be, may reasonably request at least three (3) Business Days prior to any sale of Registrable Securities.

Section 2.07      Registration Expenses . In connection with any registration statement required to be filed hereunder, the Company shall pay the following registration expenses incurred in connection with the registration hereunder (the “Registration Expenses”), regardless of whether such registration statement is declared effective by the Commission: (i) all registration and filing fees, and any other fees and expenses associated with filings required to be made with the SEC or FINRA, (ii) fees and expenses of compliance with securities or blue sky laws (including reasonable fees and disbursements of counsel in connection with blue sky qualifications of the Registrable Securities), (iii) all printing, duplicating, word processing, messenger, telephone, facsimile and delivery expenses (including expenses of printing certificates for the Registrable Securities in a form eligible for deposit with The Depository Trust Company and of printing prospectuses), (iv) the fees and expenses incurred in connection with the listing of the Registrable Securities on NASDAQ or other applicable national securities exchange, and (v) reasonable fees and disbursements of counsel for the Company and customary fees and expenses for independent certified public accountants retained by the Company (including the expenses of any comfort letters requested pursuant to Section 2.06(h) ). The Company shall have no obligation to pay any underwriting fees, discounts or commissions attributable to the sale of Registrable Securities or any transfer taxes relating to the registration or sale of the Registrable Securities, nor will the Company have any obligation to pay any attorneys’ or other advisors’ fees of the Selling Holders.

Section 2.08      Indemnification by the Company . The Company agrees to indemnify and hold harmless, to the full extent permitted by law, each Selling Holder, each member, limited partner or general partner thereof, each member, limited partner or general partner of each such member, limited or general partner, each of their respective Affiliates, officers, directors, stockholders, employees, advisors, and agents and each Person, if any, who controls such Persons within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act and each of their respective Representatives from and against any and all losses, penalties, judgments, suits, costs, claims, damages, liabilities and expenses (including reasonable costs of investigation and legal expenses) (each, a “Loss”, and collectively, “Losses”) that (a) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in any registration statement or prospectus relating to such Registrable Securities or any amendment or supplement thereto, any preliminary prospectus or any Issuer Free Writing Prospectus (in each case, including any document incorporated by reference therein), or that arise out of or are based upon any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, except insofar as such Losses arise out of or are based upon any such untrue statement or omission or alleged untrue statement or omission with respect to information relating to such Selling Holder that was included in reliance upon and in conformity with information furnished in writing to the Company by such Selling Holder or on such Selling Holder’s behalf expressly for inclusion therein or that are due to such Selling Holder’s failure to deliver a copy of such registration statement or prospectus relating to such Registrable Securities or any amendment or supplement thereto, any preliminary prospectus or any Issuer Free Writing Prospectus (in each case, including any document incorporated by reference therein) after the Company has made available or furnished such Selling Holder with copies of the same prior to any written confirmation of the sale of Registrable Securities, or (b) any violation or alleged violation by the Company of any of its subsidiaries of any federal, state, foreign or common law rule or regulation applicable to the Company or any of its subsidiaries and relating to action or inaction in connection with such registration, disclosure document or related document or report. This indemnity shall be in addition to any liability the Company may otherwise have. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of such Selling Holder or any Indemnified Party.

Section 2.09      Indemnification by Holders of Registrable Securities . Each Selling Holder agrees, severally but not jointly, to indemnify and hold harmless the Company, its officers, directors and agents and each Person, if any, who controls the Company within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act and each of their respective Representatives to the same extent as the foregoing indemnity from the Company to such Selling Holder pursuant to Section 2.08 , but only with respect to (a) written information relating to such Selling Holder included in reliance upon and in conformity with information furnished in writing by such Selling Holder or on such Selling Holder’s behalf expressly for use in any registration statement or prospectus relating to the Registrable Securities of such Selling Holder or any amendment or supplement thereto, or any preliminary prospectus and (b) any untrue statement or alleged untrue statement of a material fact contained in any registration statement or prospectus relating to such Registrable Securities, or any amendment or supplement thereto, any preliminary prospectus or any Issuer Free Writing Prospectus (in each case, including any document incorporated by reference therein), or that arise out of or are based upon any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. Notwithstanding the foregoing, in no event will the liability of a Selling Holder under this Section 2.09 or Section 2.11 or otherwise hereunder exceed the net proceeds actually received by such Selling Holder from the sale of its Registrable Securities hereunder. This indemnity shall be in addition to any liability each Selling Holder may otherwise have.

Section 2.10      Conduct of Indemnification Proceedings . In case any proceeding (including any governmental investigation) shall be instituted involving any Person in respect of which indemnity may be sought pursuant to Section 2.08 or Section 2.09 , such Person (an “Indemnified Party”) shall promptly notify the Person against whom such indemnity may be sought (an “Indemnifying Party”) in writing and the Indemnifying Party shall assume the defense thereof, including the employment of counsel reasonably satisfactory to such Indemnified Party, and shall assume the payment of all fees and expenses; provided that the failure of any Indemnified Party to give such notice will not relieve such Indemnifying Party of its obligations under Section 2.08 or Section 2.09 , as applicable, except to the extent such Indemnifying Party is materially prejudiced by such failure. In any such proceeding, any Indemnified Party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party unless (a) the Indemnifying Party and the Indemnified Party shall have mutually agreed to the retention of such counsel or (b) the named parties to any such proceeding (including any impleaded parties) include both the Indemnified Party and the Indemnifying Party and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. It is understood that the Indemnifying Party shall not, in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the reasonable fees and expenses of more than one separate firm of attorneys (in addition to any local counsel) at any time for all such Indemnified Parties, and that all such fees and expenses shall be reimbursed as they are incurred. In the case of any such separate firm for the Indemnified Parties, such firm shall be designated in writing by (i) in the case of Persons indemnified pursuant to Section 2.08 , the applicable Purchaser and (ii) in the case of Persons indemnified pursuant to Section 2.09 , the Company. The Indemnifying Party shall not be liable for any settlement of any proceeding effected without its written consent, which consent shall not be unreasonably withheld. No Indemnifying Party shall, without the prior written consent of the Indemnified Party (which consent shall not be unreasonably withheld, conditioned or delayed), effect any settlement of any pending or threatened proceeding in respect of with any Indemnified Party is or could have been a party and indemnity could have been sought hereunder by such Indemnified Party, unless such settlement includes an unconditional release of such Indemnified Party from all liability arising out of such proceeding without any admission of liability by such Indemnified Party.

Section 2.11     Contribution.

(a)     If the indemnification provided for in Section 2.08 or Section 2.09 is held by a court of competent jurisdiction to be unavailable to an Indemnified Party or insufficient in respect of any Losses referred to herein, then each such Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such Losses as between the Company on the one hand and each Selling Holder on the other, in such proportion as is appropriate to reflect the relative fault of the Company and of each Selling Holder in connection with such statements or omissions which resulted in such Losses, as well as any other relevant equitable considerations. The relative fault of the Company on the one hand and of each Selling Holder on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by such party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.

(b)     The amount paid or payable by an Indemnified Party as a result of the Losses referred to in Section 2.11 (a) shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such Indemnified Party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 2.11 , no Selling Holder shall be required to contribute any amount in excess of the amount by which the total price at which the securities of such Selling Holder were offered to the public exceeds the amount of any damages which such Selling Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. The Selling Holder’s obligations to contribute pursuant to this Section 2.11 are several in such proportion that the proceeds of the offering received by such Selling Holder bears to the total proceeds of the offering received by all the Selling Holders, and not joint.

Section 2.12      Participation in Underwritten Offerings . No Person may participate in any underwritten offering hereunder unless such Person (a) agrees to sell such Person’s securities on the basis provided in any underwriting agreement (which shall be reasonably satisfactory to such Person in form and substance) and (b) completes and executes all customary questionnaires and other documents reasonably required under the terms of such customary underwriting agreement.

Section 2.13      Rule 144. The Company covenants that it will timely file ( or obtain extensions in respect thereof and file within the applicable grace period) any reports required to be filed by it under the Securities Act and the Exchange Act to the extent required from time to time to enable Holders to sell Registrable Securities without registration under the Securities Act within the limitation of the exemptions provided by Rule 144 or Rule 144A. Upon the reasonable request of any Holder, the Company will deliver to such Holder a written statement as to whether it has complied with such requirements and, if not, the specifics thereof.

Section 2.14      Limitation on Subsequent Registration Rights. From and after the date of this Agreement, the Company shall not, without the prior written consent of a majority in interest of the Holders, enter into any agreement with any current or future holder of any securities of the Company that (a) would allow such current or future holder to require the Company to include securities in any Underwritten Shelf Offering or Underwritten Demand Offering or (b) constitute contractual rights of the type described in Section 2.04(b)(i) (i.e., that would allow such current or future holder to require the Company to include securities in any Underwritten Piggy-Back Offering on a basis that has priority over the Registrable Securities of the Selling Holders). The Company hereby represents and warrants to the Holders that Schedule A hereto sets forth a correct and complete list of all other currently effective registration rights granted by the Company to other holders of its securities as of the date of this Agreement.

Section 2.15      Restriction on Sales of Common Stock. Without the Company’s prior written consent, the Holders, collectively, shall not be permitted to sell more than an aggregate of 2,000,000 shares of Common Stock (as such number shall be adjusted for any conversion, dividend, stock-split, distribution or exchange, merger, consolidation, exchange, recapitalization or reclassification or similar transactions affecting such shares) pursuant to any Shelf Registration Statement, Demand Registration Statement or Piggy-Back Registration Statement in any quarter ending after the date of this Agreement.

Section 2.16      Termination. This Agreement shall terminate and be of no further force or effect when there shall be no Registrable Securities outstanding; provided, that Section 2.08 , Section 2.09 , Section 2.10 and Section 2.11 shall survive any such termination.

Article III
MISCELLANEOUS

Section 3.01      NASDAQ Listing. For so long as any Common Stock is listed on the NASDAQ Global Market (“ NASDAQ ”) or any other stock exchange, the Company shall use reasonable best efforts to cause any Registrable Securities to be listed on the NASDAQ or such other exchange by the date that the Shelf Registration Statement, Demand Registration Statement or Piggy-Back Registration Statement, as applicable, has been declared effective by the Commission.

Section 3.02      Remedies. In addition to being entitled to exercise all rights provided herein and granted by law, including recovery of damages, the Holders shall be entitled to specific performance of the rights under this Agreement. The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Agreement and hereby agrees to waive the defense in any action for specific performance that a remedy at law would be adequate and any requirement of the Holders to post a bond or provide an indemnity in any such action.

Section 3.03      Amendments and Waivers. The provisions of this Agreement may not be amended, modified or supplemented without the written consent of the Company and the Purchasers (on behalf of the Holders). Any waiver of, or consent to the departure from, any provision of this Agreement must be in writing and signed by the party entitled to the benefit of such provision. Any such waiver or consent shall not operate or be construed as a waiver of any subsequent non-compliance with, or as a consent to the departure from, any provision. No failure or delay by any party to insist upon the strict performance of any covenant, duty, agreement or condition of this Agreement or to exercise any right or remedy consequent upon any breach thereof shall constitute waiver of any such breach or any other covenant, duty, agreement or condition.

Section 3.04      Notices.

(a)      All notices and other communications in connection with this Agreement shall be made in writing by hand delivery, facsimile or air courier guaranteeing overnight delivery:

if to Ahwanova: at Ahwanova’s most recent address on the books and records of the Company with a copy to (which shall not constitute notice):

Cathy Jiang

5/F Plateno Group Plaza,No.300,Xinjiaoxi Road 

Haizhu District, Guangzhou, China, 510260

Email: cathy.jiang@asunion.com

Telephone: +86 15814584032

if to the Bakay: at the Bakay’s most recent address on the books and records of the Company; and

if to the Company:

Kona Grill, Inc.

15059 North Scottsdale Road, Suite 300

Scottsdale, Arizona 85254

Attention: Chief Executive Officer

in each case, or to such other address as the Holders or the Company may hereafter specify in writing.

(b)     All such notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; when receipt is acknowledged, if sent by facsimile; on the next Business Day, if timely delivered to an air courier guaranteeing overnight delivery, and when receipt is acknowledged in writing by addressee or receipt is otherwise confirmed, if by electronic mail.

Section 3.05      Successors and Assigns. Except as expressly provided in this Agreement, the rights and obligations of the Holders under this Agreement shall not be assignable by any Holder to any Person that is not a Holder, provided, however, that the Holder may assign any of its rights, interests, or obligations hereunder to an Affiliate of the Holder without the prior written consent of the Company. The rights and obligations of the Company under this Agreement shall not be assignable by the Company to any other Person. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.

Section 3.06      Counterparts. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. Each party shall become bound by this Agreement immediately upon affixing its signature hereto.

Section 3.07      Governing Law. The laws of the State of Delaware shall govern this Agreement without regard to principles of conflict of Laws. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be determined in accordance with the provisions of the Subscription Agreements.

Section 3.08      No Presumption. If any claim is made by a party relating to any conflict, omission or ambiguity in this Agreement, no presumption or burden of proof or persuasion shall be implied by virtue of the fact that this Agreement was prepared by or at the request of a particular party or its counsel.

Section 3.10      Interpretation. Unless expressly provided for elsewhere in this Agreement, this Agreement will be interpreted in accordance with the following provisions: (a) the words “this Agreement,” “herein,” “hereby,” “hereunder,” “hereof,” and other equivalent words refer to this Agreement as an entirety and not solely to the particular portion, article, section, subsection or other subdivision of this Agreement in which any such word is used; (b) examples are not to be construed to limit, expressly or by implication, the matter they illustrate; (c) the word “including” and its derivatives means “including without limitation” and is a term of illustration and not of limitation; (d) all definitions set forth herein are deemed applicable whether the words defined are used herein in the singular or in the plural and correlative forms of defined terms have corresponding meanings; (e) the word “or” is not exclusive, and has the inclusive meaning represented by the phrase “and/or”; (f) a defined term has its defined meaning throughout this Agreement and each exhibit and schedule to this Agreement, regardless of whether it appears before or after the place where it is defined; (g) wherever used herein, any pronoun or pronouns will be deemed to include both the singular and plural and to cover all genders; (h) this Agreement has been jointly prepared by the parties, and this Agreement will not be construed against any Person as the principal draftsperson hereof or thereof and no consideration may be given to any fact or presumption that any party had a greater or lesser hand in drafting this Agreement; (i) the captions of the articles, sections or subsections appearing in this Agreement are inserted only as a matter of convenience and in no way define, limit, construe or describe the scope or extent of such section, or in any way affect this Agreement; (j) any references herein to a particular Section or Schedule means a Section or Schedule to this Agreement unless otherwise expressly stated herein; and (k) all references to days mean calendar days unless otherwise provided.

Section 3.11      Severability. In the event that any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall not be affected or impaired thereby.

Section 3.12      Entire Agreement. This Agreement is intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein. This Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter.

Section 3.13      Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

Section 3.14      No Third Party Beneficiaries. Nothing express or implied herein is intended or shall be construed to confer upon any person or entity, other than the parties hereto and their respective successors and assigns and all Indemnified Parties, any rights, remedies or other benefits under or by reason of this Agreement.

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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first above written above.

Schedule A

None.