Exhibit 10.1


 


FOCUS
UNIVERSAL INC.


 


COMMON
STOCK


 


SALES
AGREEMENT


 


December 9, 2022


 


Sutter Securities, Inc.


6 Venture, Suite 395


Irvine, CA 92618


 


Ladies and Gentlemen:


 


Focus Universal Inc., a Nevada
corporation (the “Company”), confirms its agreement (this “Agreement”) with Sutter
Securities, Inc. (the “Sales Agent”) as follows:


 


1. Issuance and Sale of
Shares. The Company agrees that, from time to time during the term of this Agreement, on the terms and subject to the conditions set
forth herein, it may issue and sell to or through the Sales Agent, acting as agent or principal, shares of the Company’s common
stock, par value $0.001 per share (the “Common Stock”), subject to the limitations set forth in Section 3(b)
hereof. The issuance and sale of shares of Common Stock to or through the Sales Agent will be effected pursuant to the Registration Statement
(as defined below) filed by the Company after the Registration Statement is declared effective under the Securities Act (as defined below)
by the U.S. Securities and Exchange Commission (the “Commission”).


 


On the date of this Agreement,
the Company has filed, or will file, in accordance with the provisions of the Securities Act of 1933, as amended, and the rules and regulations
thereunder (collectively, the “Securities Act”), with the Commission, the Registration Statement relating to
shares of Common Stock to be issued from time to time by the Company, and which incorporates by reference documents that the Company has
filed or will file in accordance with the provisions of the Securities Exchange Act of 1934, as amended, and the rules and regulations
thereunder (collectively, the “Exchange Act”). The Registration Statement includes a prospectus specifically
relating to the offering of Common Stock pursuant to this Agreement (the “ATM Prospectus”). As soon as practicable
following the date that the Registration Statement is declared effective, the Company will furnish to the Sales Agent, for use by the
Sales Agent, copies of the ATM Prospectus included as part of such registration statement, relating to the Placement Shares (as defined
below). “Registration Statement” means the shelf registration statement on Form S-3 filed by the Company, as
amended when it becomes effective, including all documents filed as part thereof or incorporated by reference therein, and including any
information contained in a Prospectus (as defined below) included therein or subsequently filed with the Commission pursuant to Rule 424(b)
under the Securities Act or deemed to be a part of such registration statement pursuant to Rule 430B or 462(b) of the Securities Act.
The base prospectus included in the Registration Statement (the “Base Prospectus”), including all documents
incorporated therein by reference (to the extent such information has not been superseded or modified in accordance with Rule 412 under
the Securities Act (as qualified by Rule 430B(g) of the Securities Act), and the ATM Prospectus, including all documents incorporated
therein by reference (to the extent such information has not been superseded or modified in accordance with Rule 412 under the Securities
Act (as qualified by Rule 430B(g) of the Securities Act), each of which is included in the Registration Statement, as it or they may be
as amended or supplemented from time to time (including by means of one or more stickers or prospectus supplements), in the form in which
such Base Prospectus and/or ATM Prospectus have most recently been filed by the Company with the Commission pursuant to Rule 424(b) under
the Securities Act, together with any “issuer free writing prospectus” (“Issuer Free Writing Prospectus”),
as defined in Rule 433 of the Securities Act (“Rule 433”), relating to the Placement Shares that (i) is required
to be filed with the Commission by the Company or (ii) is exempt from filing pursuant to Rule 433(d)(5)(i), in each case in the form filed
or required to be filed with the Commission or, if not required to be filed, in the form retained in the Company’s records pursuant
to Rule 433(g), is herein called the “Prospectus.” Any reference herein to the Registration Statement, the Prospectus
or any amendment or supplement thereto shall be deemed to refer to and include the documents incorporated by reference therein, and any
reference herein to the terms “amend,” “amendment” or “supplement” with respect to the Registration
Statement or the Prospectus shall be deemed to refer to and include the filing after the execution hereof of any document with the Commission
deemed to be incorporated by reference therein. For purposes of this Agreement, all references to the Registration Statement, the Prospectus
or to any amendment or supplement thereto shall be deemed to include any copy filed with the Commission pursuant to either the Electronic
Data Gathering Analysis and Retrieval System, or if applicable, the Interactive Data Electronic Applications (collectively “EDGAR”).


 


 


 






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2. Placements. Each
time that the Company wishes to issue and sell the Common Stock through the Sales Agent, as agent, hereunder (each, a “Placement”),
it will notify the Sales Agent by email notice (or other method mutually agreed to in writing by the parties) (a “Placement
Notice”) containing the parameters in accordance with which it desires the Common Stock to be sold, which shall at a minimum
include the number of shares of Common Stock to be issued (the “Placement Shares”), the time period during which
sales are requested to be made, any limitation on the number of shares of Common Stock that may be sold in any one Trading Day (as defined
in Section 3) and any minimum price below which sales may not be made, a form of which containing such minimum sales parameters
necessary is attached hereto as Schedule 1. The Placement Notice shall originate from any of the individuals from the Company
set forth on Schedule 2 (with a copy to each of the other individuals from the Company listed on such schedule), and shall
be addressed to each of the individuals from the Sales Agent set forth on Schedule 2, as such Schedule 2 may
be amended from time to time. The Placement Notice shall be effective upon receipt by the Sales Agent unless and until (i) in accordance
with the notice requirements set forth in Section 4, the Sales Agent declines to accept the terms contained therein for any reason,
in its sole discretion, (ii) the entire amount of the Placement Shares have been sold, (iii) in accordance with the notice requirements
set forth in Section 4, the Company suspends or terminates the Placement Notice, (iv) the Company issues a subsequent Placement
Notice with parameters superseding those on the earlier dated Placement Notice, or (v) this Agreement has been terminated under the provisions
of Section 11. The amount of any discount, commission or other compensation to be paid by the Company to the Sales Agent in connection
with the sale of the Placement Shares through the Sales Agent, as agent, shall be as set forth in Schedule 3. It is expressly
acknowledged and agreed that neither the Company nor the Sales Agent will have any obligation whatsoever with respect to a Placement or
any Placement Shares unless and until the Company delivers a Placement Notice to the Sales Agent and the Sales Agent does not decline
such Placement Notice pursuant to the terms set forth above, and then only upon the terms specified therein and herein. In the event of
a conflict between the terms of this Agreement and the terms of a Placement Notice, the terms of the Placement Notice will control.


 


3. Sale of Placement Shares
by the Sales Agent.


 


(a) Subject to the terms and
conditions herein set forth, upon the Company’s issuance of a Placement Notice, and unless the sale of the Placement Shares described
therein has been declined, suspended, or otherwise terminated in accordance with the terms of this Agreement, the Sales Agent, as agent
for the Company, will use its reasonable best efforts consistent with its normal trading and sales practices and applicable state and
federal laws, rules and regulations and the rules of The NASDAQ Stock Market (the “Exchange”), for the period
specified in the Placement Notice, to sell such Placement Shares up to the amount specified by the Company therein, and otherwise in accordance
with the terms of such Placement Notice. If acting as agent hereunder, the Sales Agent will provide written confirmation to the Company
(including by email correspondence to each of the individuals of the Company set forth on Schedule 2, if receipt of such
correspondence is actually acknowledged by any of the individuals to whom the notice is sent, other than via auto-reply) no later than
the opening of the Trading Day (as defined below) immediately following the Trading Day on which it has made sales of Placement Shares
hereunder setting forth the number of Placement Shares sold on such day, the volume-weighted average price of the Placement Shares, the
compensation payable by the Company to the Sales Agent pursuant to Section 2 with respect to such sales, and the Net Proceeds (as
defined below) payable to the Company, with an itemization of the deductions made by the Sales Agent (as set forth in Section 5(a))
from the gross proceeds that it receives from such sales. Subject to the terms of the Placement Notice, the Sales Agent may sell Placement
Shares by any method permitted by law deemed to be an “at the market” offering as defined in Rule 415 under the Securities
Act, including sales made directly on the Exchange, on any other existing trading market for the Common Stock or to or through a market
maker. Subject to the terms of a Placement Notice, the Sales Agent may also sell Placement Shares by any other method permitted by law,
including but not limited to in negotiated transactions with the Company’s prior written consent. The Company acknowledges and agrees
that (i) there can be no assurance that the Sales Agent will be successful in selling Placement Shares, (ii) the Sales Agent will incur
no liability or obligation to the Company or any other person or entity if it does not sell Placement Shares for any reason other than
a failure by the Sales Agent to use its reasonable best efforts consistent with its normal trading and sales practices and applicable
law and regulations to sell such Placement Shares as required under this Agreement and (iii) the Sales Agent shall be under no obligation
to purchase Placement Shares on a principal basis pursuant to this Agreement, except as otherwise agreed by the Sales Agent and the Company
in writing and expressly set forth in a Placement Notice. For the purposes hereof, “Trading Day” means any day
on which the Company’s Common Stock is purchased and sold on the principal market on which the Common Stock is listed or quoted.


 


 


 






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(b) Under no circumstances
shall the Company cause or request the offer or sale of any Placement Shares if, after giving effect to the sale of such Placement Shares,
the aggregate number or gross sales proceeds of Placement Shares sold pursuant to this Agreement would exceed the lesser of: (i) the number
or dollar amount of shares of Common Stock registered pursuant to the Registration Statement pursuant to which the offering hereunder
is being made, (ii) the number of authorized but unissued and unreserved shares of Common Stock, (iii) the number or dollar amount of
shares of Common Stock permitted to be offered and sold by the Company under Form S-3 (including General Instruction I.B.6. of Form S-3,
if and for so long as applicable), (iv) the number or dollar amount of shares of Common Stock authorized from time to time to be issued
and sold under this Agreement by the Company’s board of directors (or a duly authorized committee thereof) and notified to the Sales
Agent in writing (including by email correspondence), or (v) the number or dollar amount of shares of Common Stock for which the Company
has filed the ATM Prospectus or other prospectus supplement specifically relating to the offering of the Placement Shares pursuant to
this Agreement. Under no circumstances shall the Company cause or request the offer or sale of any Placement Shares pursuant to this Agreement
at a price lower than the minimum price authorized from time to time by the Company’s board of directors (or a duly authorized committee
thereof) and notified to the Sales Agent in writing (including by email correspondence). Notwithstanding anything to the contrary contained
herein, the parties hereto acknowledge and agree that compliance with the limitations set forth in this Section 3(b) on the number
or dollar amount of Placement Shares that may be issued and sold under this Agreement from time to time shall be the sole responsibility
of the Company, and that the Sales Agent shall have no obligation in connection with such compliance.


 


(c) During the term of this
Agreement, neither the Sales Agent nor any of its affiliates or subsidiaries shall engage in (i) any short sale of any security of the
Company or (ii) any sale of any security of the Company that the Sales Agent does not own or any sale which is consummated by the delivery
of a security of the Company borrowed by, or for the account of, the Sales Agent. During the term of this Agreement and notwithstanding
anything to the contrary herein, the Sales Agent agrees that in no event will the Sales Agent or its affiliates engage in any market making,
bidding, stabilization or other trading activity with regard to the Common Stock or related derivative securities if such activity would
be prohibited under Regulation M or other anti-manipulation rules under the Exchange Act.


 


4. Suspension of Sales.


 


(a) The Company or the Sales
Agent may, upon notice to the other party in writing (including by email correspondence to each of the individuals of the other party
set forth on Schedule 2, if receipt of such correspondence is actually acknowledged by any of the individuals to whom the
notice is sent, other than via auto-reply) or by telephone (confirmed immediately by email correspondence to each of the individuals of
the other party set forth on Schedule 2), suspend any sale of Placement Shares for a period of time (a “Suspension
Period”); provided, however, that such suspension shall not affect or impair either party’s obligations
with respect to any Placement Shares sold hereunder prior to the receipt of such notice. Each of the parties agrees that no such notice
under this Section 4 shall be effective against the other unless it is made to one of the individuals named on Schedule 2
hereto, as such schedule may be amended from time to time. During a Suspension Period, the Company shall not issue any Placement Notices
and the Sales Agent shall not sell any Placement Shares hereunder. The party that issued a suspension notice shall notify the other party
in writing of the Trading Day on which the Suspension Period shall expire not later than twenty-four (24) hours prior to such Trading
Day.


 


(b) Notwithstanding any other
provision of this Agreement, during any period in which the Company is in possession of material non-public information, the Company and
the Sales Agent agree that (i) no sale of Placement Shares will take place, (ii) the Company shall not request the sale of any Placement
Shares, and (iii) the Sales Agent shall not be obligated to sell or offer to sell any Placement Shares.


 


5. Settlement.


 


(a) Settlement of Placement
Shares. Unless otherwise specified in the applicable Placement Notice, settlement for sales of Placement Shares will occur on the
second (2nd) Trading Day (or such earlier day as is industry practice for regular-way trading) following the respective Point
of Sale (as defined below) (each, a “Settlement Date”). The amount of proceeds to be delivered to the Company
on a Settlement Date against receipt of the Placement Shares sold (the “Net Proceeds”) will be equal to the
aggregate sales price received by the Sales Agent at which such Placement Shares were sold, after deduction for (i) the Sales Agent’s
discount, commission or other compensation for such sales payable by the Company pursuant to Section 2 hereof, (ii) any other amounts
due and payable by the Company to the Sales Agent hereunder pursuant to Section 7(g) (Expenses) hereof, and (iii) any transaction fees,
trading expenses or execution fees imposed by any clearing organization or any governmental or self-regulatory organization and any other
fees incurred by the Sales Agent in respect of such sales.


 


 


 






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(b) Delivery of Placement
Shares. On or before each Settlement Date, the Company will, or will cause its transfer agent to, electronically transfer the Placement
Shares being sold by crediting the Sales Agent’s or its designee’s account (provided the Sales Agent shall have given the
Company written notice of such designee prior to the Settlement Date) at The Depository Trust Company through its Deposit and Withdrawal
at Custodian System or by such other means of delivery as may be mutually agreed upon by the parties hereto which in all cases shall be
freely tradable, transferable, registered shares in good deliverable form. The Sales Agent shall have no obligation to attempt to sell
the Placement Shares prior to such transfer of the Placement Shares. On each Settlement Date, the Sales Agent will deliver the related
Net Proceeds in same day funds to an account designated by the Company on, or prior to, the Settlement Date. The Company agrees that if
the Company, or its transfer agent (if applicable), defaults in its obligation to deliver duly authorized Placement Shares on a Settlement
Date, the Company agrees that in addition to and in no way limiting the rights and obligations set forth in Section 9(a) (Indemnification
and Contribution) hereto, the Company will (i) hold the Sales Agent, its directors, officers, members, partners, employees and agents
of the Sales Agent, each broker dealer affiliate of the Sales Agent, and each person, if any, who (A) controls the Sales Agent within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act or (B) is controlled by or is under common control with
the Sales Agent (each, a “Sales Agent Affiliate”), and the Sales Agent’s clearing organization, harmless
against any loss, claim, damage, or reasonable and documented expense (including reasonable legal fees and expenses), as incurred, arising
out of or in connection with such default by the Company or its transfer agent (if applicable) and (ii) pay to the Sales Agent (without
duplication) any commission, discount, or other compensation to which it would otherwise have been entitled absent such default (other
than a failure by the Sales Agent or a Sales Agent Affiliate to provide instructions to the Company or its transfer agent); provided,
however, that the Company shall not be obligated to so indemnify and reimburse the Sales Agent if the Placement Shares are not delivered
due to (1) a suspension or material limitation in trading in securities generally on the New York Stock Exchange or the Exchange; (2)
a general moratorium on commercial banking activities declared by either federal or New York State authorities or a material disruption
in commercial banking or securities settlement or clearance services in the United States; (3) an outbreak or escalation of hostilities
or acts of terrorism involving the United States or a declaration by the United States of a national emergency or war; or (4) any other
calamity or crisis or any change in financial, political or economic conditions in the United States or elsewhere.


 


6. Representations and
Warranties of the Company. The Company, on behalf of itself and its subsidiaries, represents and warrants to, and agrees with, the
Sales Agent that as of each Applicable Time (as defined in Section 22(a)), unless such representation, warranty or agreement specifies
a different time or times:


 


(a) Compliance with Registration
Requirements. As of each Applicable Time other than the date of this Agreement, the Registration Statement (including any abbreviated
registration statement filed by the Company pursuant to Rule 462(b) under the Securities Act (“Rule 462(b) Registration Statement”))
has been declared effective by the Commission under the Securities Act. As of each Applicable Time other than the date of this Agreement,
the Company has not received from the Commission any notice pursuant to Rule 401(g)(1) under the Securities Act objecting to the use of
the Registration Statement. As of each Applicable Time other than the date of this Agreement, the Company has complied to the Commission’s
satisfaction with all requests of the Commission for additional or supplemental information related to the Registration Statement and
the Prospectus. As of each Applicable Time other than the date of this Agreement, no stop order suspending the effectiveness of the Registration
Statement (including any Rule 462(b) Registration Statement) is in effect and no proceedings for such purpose have been instituted or
are pending or, to the knowledge of the Company, are contemplated or threatened by the Commission. At the time of (i) the initial filing
of the Registration Statement with the Commission and (ii) the most recent amendment thereto for the purposes of complying with Section
10(a)(3) of the Securities Act (whether such amendment was by post-effective amendment, incorporated report filed pursuant to Section
13 or 15(d) of the Exchange Act or form of prospectus), the Company met the then applicable requirements for use of Form S-3 under the
Securities Act, including compliance with General Instructions I.A and I.B.6. of Form S-3, if and for so long as applicable. The Registration
Statement and the offer and sale of the Placement Shares as contemplated hereby meet the requirements of Rule 415 under the Securities
Act and comply in all material respects with said rule. In the section entitled “Plan of Distribution” in the ATM Prospectus,
the Company has named Sutter Securities, Inc. as an agent that the Company has engaged in connection with the transactions contemplated
by this Agreement. The Company was not and is not an “ineligible issuer” as defined in Rule 405 under the Securities Act.


 


 


 






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(b) No Material Misstatements
or Omissions. The Registration Statement and any post-effective amendment thereto, at the time it became or becomes effective, complied
or will comply in all material respects with the Securities Act. The Prospectus, and any amendment or supplement thereto, on the date
of such Prospectus or amendment or supplement, complied or will comply in all material respects with the Securities Act. The Registration
Statement and any post-effective amendment thereto, at the time it became or becomes effective, did not and will not contain any untrue
statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein
not misleading. The Prospectus, as amended or supplemented, as of its date, did not and, as of each Point of Sale and each Settlement
Date, will not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not misleading. The representations and warranties set forth in
the two immediately preceding sentences do not apply to statements in or omissions from the Registration Statement or any post-effective
amendment thereto, or the Prospectus, or any amendments or supplements thereto, made in reliance upon and in conformity with information
relating to the Sales Agent furnished to the Company in writing by the Sales Agent expressly for use therein. “Point of Sale”
means, for a Placement, the time at which an acquiror of Placement Shares entered into a contract, binding upon such acquiror, to acquire
such Placement Shares.


 


(c) Offering Materials
Furnished to the Sales Agent. Copies of the Registration Statement, the Prospectus, and all amendments or supplements thereto and
all documents incorporated by reference therein that were filed with the Commission on or prior to the date of this Agreement, have been
delivered, or are publicly available through EDGAR, to the Sales Agent. Each Prospectus delivered to the Sales Agent for use in connection
with the sale of the Placement Shares pursuant to this Agreement will be identical to the version of such Prospectus filed with the Commission
via EDGAR, except to the extent permitted by Regulation S-T.


 


(d) Distribution of Offering
Material by the Company. The Company has not distributed and will not distribute, prior to the completion of the Sales Agent’s
distribution of the Placement Shares, any offering material in connection with the offering and sale of the Placement Shares other than
the Prospectus or the Registration Statement.


 


(e) The Sales Agreement.
This Agreement has been duly authorized, executed and delivered by the Company, and constitutes a valid, legal, and binding obligation
of the Company, enforceable against the Company in accordance with its terms, except as rights to indemnity hereunder may be limited by
federal or state securities laws and except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting the rights of creditors generally, and subject to general principles of equity. The Company has full corporate
power and authority to enter into this Agreement and to authorize, issue and sell the Placement Shares as contemplated by this Agreement.
This Agreement conforms in all material respects to the descriptions thereof in the Registration Statement and the Prospectus.


 


(f) Authorization of the
Placement Shares. The Placement Shares, when issued and paid for as contemplated herein, will be validly issued, fully paid and nonassessable,
will be issued in compliance with all applicable securities laws, and will be free of preemptive, registration or similar rights, and
will conform to the description of the Common Stock contained in the Registration Statement and the Prospectus.


 


(g) No Applicable Registration
or Other Similar Rights. There are no persons with registration or other similar rights to have any equity or debt securities registered
for sale under the Registration Statement or included in the offering contemplated by this Agreement, except for such rights as have been
duly waived. No person has the right to act as an underwriter or as a financial advisor to the Company in connection with the offer and
sale of the Placement Shares hereunder, whether as a result of the filing or effectiveness of the Registration Statement or the sale of
the Placement Shares as contemplated hereby or otherwise.


 


(h) No Material Adverse
Change. Except as otherwise disclosed in the Prospectus, subsequent to the respective dates as of which information is given in the
Prospectus: (i) there has been no material adverse change in the business, properties, prospects, operations, condition (financial or
otherwise) or results of operations of the Company and its subsidiaries, taken as a whole (any such change is called a “Material
Adverse Change”), or any development involving a prospective material adverse change, which, individually or in the aggregate,
has had or would reasonably be expected to result in a Material Adverse Change; (ii) the Company and its subsidiaries, considered as one
entity have not incurred any material liability or obligation, indirect, direct or contingent, not in the ordinary course of business
nor entered into any material transaction or agreement not in the ordinary course of business; (iii) there has been no dividend or distribution
of any kind declared, paid or made by the Company or, except for regular quarterly dividends publicly announced by the Company or dividends
paid to the Company or other subsidiaries, by any of its subsidiaries on any class of capital stock or repurchase or redemption by the
Company or any of its subsidiaries of any class of capital stock; (iv) no officer or director of the Company has resigned from any position
with the Company; and (v) there has not been any Material Adverse Change in the Company’s long-term debt.


 


 


 






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(i) Independent Accountants.
To the knowledge of the Company, BF Borgers CPA PC, whose report is filed with the Commission and included or incorporated by reference
in the Registration Statement and the Prospectus, is an independent registered public accounting firm as required by the Securities Act
and the Public Company Accounting Oversight Board.


 


(j) Financial Statements.
The financial statements incorporated by reference into the Registration Statement and included in the Prospectus, together with the related
notes and schedules, comply, in all material respects with the applicable requirements of the Securities Act and the Exchange Act, and
fairly present the consolidated financial position of the Company and its subsidiaries as of and at the dates indicated and the results
of their operations and cash flows for the periods specified therein. Such financial statements and supporting schedules have been prepared
in conformity with U.S. generally accepted accounting principles (“GAAP”) applied on a consistent basis throughout
the periods involved. No other financial statements, pro forma financial information or schedules are required under the Securities Act
or the Exchange Act to be included in or incorporated by reference in the Registration Statement or the Prospectus.


 


(k) Forward-Looking Statements.
The Company had a reasonable basis for, and made in good faith, each forward-looking statement (within the meaning of Section 27A of the
Securities Act or Section 21E of the Exchange Act) contained or incorporated by reference in the Registration Statement or the Prospectus.


 


(l) Statistical and Marketing-Related
Data. The statistical or market-related data included or incorporated by reference in each of the Registration Statement or the Prospectus
are based on or derived from sources that the Company reasonably believes to be reliable and accurate.


 


(m) XBRL. The interactive
data in eXtensible Business Reporting Language included or incorporated by reference in the Registration Statement fairly presents the
information called for in all material respects and has been prepared in accordance with the Commission’s rules and guidelines applicable
thereto.


 


(n) Incorporation and Good
Standing of the Company and its Subsidiaries. The Company is a corporation duly incorporated and validly existing under the laws of
the State of Nevada and in good standing under such laws. The Company has requisite corporate power to carry on its business as described
in the Prospectus. The Company is duly qualified to transact business and is in good standing in all jurisdictions in which the conduct
of its business requires such qualification; except where the failure to be so qualified or to be in good standing would not result in
a Material Adverse Change. The Company does not own or control, directly or indirectly, any corporation, association or other entity other
than the subsidiaries listed in Exhibit 21 to the Company’s Annual Report on Form 10-K for the most recently ended fiscal year and
other than (i) those subsidiaries not required to be listed on Exhibit 21 by Item 601 of Regulation S-K under the Exchange Act, (ii) those
subsidiaries formed since the last day of the most recently ended fiscal year, and (iii) as disclosed in the Registration Statement or
the Prospectus. Each subsidiary is a corporation or limited liability company duly incorporated or formed and validly existing under the
laws of the jurisdiction of its incorporation or formation and is in good standing under such laws. Each of the subsidiaries has requisite
corporate power to carry on its business as described in the Prospectus. Each of the subsidiaries is duly qualified to transact business
and is in good standing in all jurisdictions in which the conduct of its business requires such qualification; except where the failure
to be so qualified or to be in good standing would not result in a Material Adverse Change.


 


(o) Capital Stock Matters.
The Company has an authorized capitalization as set forth in the Registration Statement and the Prospectus. The form of certificates for
the Common Stock conforms to the corporate law of the jurisdiction of the Company’s incorporation. All of the issued and outstanding
shares of capital stock of the Company are duly authorized and validly issued, fully paid and nonassessable, and have been issued in compliance
with all applicable securities laws, and conform to the description thereof in the Registration Statement and the Prospectus. None of
the outstanding shares of capital stock of the Company were issued in violation of any preemptive rights, rights of first refusal or other
similar rights to subscribe for or purchase securities of the Company. All of the issued shares of capital stock of each subsidiary of
the Company have been duly and validly authorized and issued, are fully paid and nonassessable and, except as set forth in the Registration
Statement or the Prospectus, are owned directly or indirectly by the Company, free and clear of all liens, encumbrances, equities or claims.
Except for the issuances of options or restricted stock pursuant to the Company’s incentive plans or as otherwise set forth in the
Registration Statement or the Prospectus, since the respective dates as of which information is provided in the Registration Statement
or the Prospectus, the Company has not entered into or granted any convertible or exchangeable securities, options, warrants, agreements,
contracts or other rights in existence to purchase or acquire from the Company any shares of the capital stock of the Company.


 


 


 






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(p) Non-Contravention of
Existing Instruments; No Further Authorizations or Approvals Required. The Company’s execution, delivery and performance of
this Agreement and consummation of the transactions contemplated hereby or by the Registration Statement and the Prospectus (including
the issuance and sale of the Placement Shares and the use of the proceeds from the sale of the Placement Shares as described in the Prospectus
under the caption “Use of Proceeds”) will not (A) result in a breach or violation of any of the terms and provisions of, or
constitute a default under, any law, order, rule or regulation to which the Company or any subsidiary is subject, or by which any property
or asset of the Company or any subsidiary is bound or affected, (B) conflict with, result in any violation or breach of, or constitute
a default (or an event that with notice or lapse of time or both would become a default) under, or give to others any right of termination,
amendment, acceleration or cancellation (with or without notice, lapse of time or both) (a “Default Acceleration Event”)
of, any agreement, lease, credit facility, debt, note, bond, mortgage, indenture or other instrument (“Contract”)
or obligation or other understanding to which the Company or any subsidiary is a party or by which any property or asset of the Company
or any subsidiary is bound or affected, except to the extent that such conflict, default, or Default Acceleration Event is not reasonably
likely to result in a Material Adverse Change, or (C) result in a breach or violation of any of the terms and provisions of, or constitute
a default under, the Company’s Articles of Incorporation (as the same may be amended or restated from time to time) or bylaws (as
the same may be amended or restated from time to time). Except as disclosed in the Registration Statement and Prospectus, neither the
Company nor any of its subsidiaries is in violation, breach or default under its Articles of Incorporation, by-laws or other equivalent
organizational or governing documents. Neither the Company nor any of its subsidiaries nor, to its knowledge, any other party is in violation,
breach or default of any Contract that has resulted in or could reasonably be expected to result in a Material Adverse Change. Each approval,
consent, order, authorization, designation, declaration or filing by or with any regulatory, administrative or other governmental body
necessary in connection with the execution and delivery by the Company of this Agreement and the performance of the Company of the transactions
herein contemplated has been obtained or made and is in full force and effect, except (i) with respect to any Applicable Time at which
the Sales Agent would not be able to rely on Rule 5110(b)(7)(C)(i) of the Financial Industry Regulatory Authority, Inc. (“FINRA”),
such additional steps as may be required by FINRA, (ii) filings with the Commission required under the Securities Act or the Exchange
Act, or filings with the Exchange pursuant to the rules and regulations of the Exchange, in each case that are contemplated by this Agreement
to be made after the date of this Agreement, and (iii) such additional steps as may be necessary to qualify the Common Stock for sale
by the Sales Agent under state securities or Blue Sky laws.


 


(q) No Material Actions
or Proceedings. Except as set forth in the Registration Statement or the Prospectus, there is not pending or, to the knowledge of
the Company, threatened, any action, suit or proceeding to which the Company or any of its subsidiaries is a party or of which any property
or assets of the Company or any of its subsidiaries is the subject before or by any court or governmental agency, authority or body, or
any arbitrator or mediator.


 


(r) Labor Disputes.
Except as disclosed in filings by the Company available on EDGAR, there is (A) no unfair labor practice complaint pending against the
Company, or any of its subsidiaries, nor to the Company’s knowledge, threatened against it or any of its subsidiaries, before the
National Labor Relations Board, any state or local labor relation board or any foreign labor relations board, and no grievance or arbitration
proceeding arising out of or under any collective bargaining agreement is so pending against the Company or any of its subsidiaries, or,
to the Company’s knowledge, threatened against it and (B) no labor disturbance by the employees of the Company or any of its subsidiaries
exists or, to the Company’s knowledge, is imminent, and the Company is not aware of any existing or imminent labor disturbance by
the employees of any of its or its subsidiaries, principal suppliers, manufacturers, customers or contractors, that could reasonably be
expected, singularly or in the aggregate, to have a Material Adverse Change. The Company is not aware that any key employee or significant
group of employees of the Company or any subsidiary plans to terminate employment with the Company or any such subsidiary.


 


(s) All Necessary Permits,
etc. Except as set forth in the Registration Statement or the Prospectus, the Company and each of its subsidiaries holds, and is in
compliance with, all franchises, grants, authorizations, licenses, permits, easements, consents, certificates and orders (“Permits”)
of any governmental or self-regulatory agency, authority or body required for the conduct of its business, and all such Permits are in
full force and effect to the knowledge of the Company.


 


 


 






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(t) Tax Law Compliance.
Except as set forth in the Registration Statement or the Prospectus, each of the Company and its subsidiaries has (a) filed all foreign,
federal, state and local tax returns (as hereinafter defined) required to be filed with taxing authorities prior to the date hereof or
has duly obtained extensions of time for the filing thereof and (b) paid all taxes (as hereinafter defined) shown as due on such returns
that were filed and has paid all taxes imposed on or assessed against the Company or such respective subsidiary. The provisions for taxes
payable, if any, shown on the financial statements included or incorporated by reference in the Registration Statement or the Prospectus
are sufficient for all accrued and unpaid taxes, whether or not disputed, and for all periods to and including the dates of such consolidated
financial statements. Other than as disclosed in the Registration Statement or the Prospectus, (i) no issues have been raised (and are
currently pending) by any taxing authority in connection with any of the returns or taxes asserted as due from the Company or its subsidiaries,
and (ii) no waivers of statutes of limitation with respect to the returns or collection of taxes have been given by or requested from
the Company or its subsidiaries. There are no tax liens against the assets, properties or business of the Company or any of its subsidiaries.
The term “taxes” means all federal, state, local, foreign and other net income, gross income, gross receipts,
sales, use, ad valorem, transfer, franchise, profits, license, lease, service, service use, withholding, payroll, employment, excise,
severance, stamp, occupation, premium, property, windfall profits, customs, duties or other taxes, fees, assessments or charges of any
kind whatever, together with any interest and any penalties, additions to tax or additional amounts with respect thereto. The term “returns”
means all returns, declarations, reports, statements and other documents required to be filed in respect to taxes.


 


(u) Company Not an “Investment
Company”. The Company is not, and will not be, either after receipt of payment for the Placement Shares or after the application
of the proceeds therefrom as described under “Use of Proceeds” in the Registration Statement or the Prospectus, required to
register as an “investment company” under the Investment Company Act of 1940, as amended (the “Investment Company
Act”).


 


(v) Insurance. Each
of the Company and its subsidiaries carries, or is covered by, insurance in such amounts and covering such risks as is adequate for the
conduct of its business and the value of its properties and as is customary for companies engaged in similar businesses in similar industries,
and all such insurance is in full force and effect. Neither the Company nor any of its subsidiaries has reason to believe that it will
not be able (i) to renew its existing insurance coverage as and when such policies expire or (ii) to obtain comparable coverage from similar
institutions as may be necessary or appropriate to conduct its business as now conducted and at a cost that would not result in a Material
Adverse Change.


 


(w) No Price Stabilization
or Manipulation. Neither the Company nor any of its subsidiaries has knowingly taken, either directly or indirectly (without giving
any effect to the activities of the Sales Agent), any action designed to or that might cause or result in stabilization or manipulation
of the price of the Common Stock or of any “reference security” (as defined in Rule 100 of Regulation M under the Exchange
Act (“Regulation M”)) with respect to the Common Stock, whether to facilitate the sale or resale of the Placement
Shares or otherwise, and has taken no action which would directly or indirectly violate Regulation M.


 


(x) Related Party Transactions.
There are no business relationships or related party transactions involving the Company, any of its subsidiaries or any other person required
to be described in the Registration Statement or the Prospectus that have not been described as required pursuant to the Securities Act.


 


(y) Exchange Act Compliance.
The documents incorporated or deemed to be incorporated by reference in the Registration Statement, the Prospectus or any amendment or
supplement thereto, at the time they were or hereafter are filed with the Commission under the Exchange Act, complied and will comply
in all material respects with the requirements of the Exchange Act, and, when read together with the other information in the Prospectus,
at each Point of Sale and each Settlement Date, will not contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading.


 


 


 






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(z) Conformity of Issuer
Free Writing Prospectus. Each Issuer Free Writing Prospectus conformed or will conform in all material respects to the requirements
of the Securities Act on the date of first use, and the Company has complied or will comply with any filing requirements applicable to
such Issuer Free Writing Prospectus pursuant to the Securities Act. Each Issuer Free Writing Prospectus, as of its issue date and at all
subsequent times through the completion of the public offer and sale of the Placement Shares, did not, does not and will not include any
information that conflicted, conflicts or will conflict with the information contained in the Registration Statement or the Prospectus,
including any document incorporated by reference therein that has not been superseded or modified. The Company has not made any offer
relating to the Placement Shares that would constitute an Issuer Free Writing Prospectus without the prior written consent of the Sales
Agent. The Company has retained in accordance with the Securities Act all Issuer Free Writing Prospectuses that were not required to be
filed pursuant to the Securities Act.


 


(aa) Compliance with Environmental
Laws. The Company and its subsidiaries are in compliance with all foreign, federal, state and local rules, laws and regulations relating
to the use, treatment, storage and disposal of hazardous or toxic substances or waste and protection of health and safety or the environment
which are applicable to their businesses (“Environmental Laws”), except where the failure to comply has not
had and would not reasonably be expected to, singularly or in the aggregate, result in a Material Adverse Change. There has been no storage,
generation, transportation, handling, treatment, disposal, discharge, emission, or other release of any kind of toxic or other wastes
or other hazardous substances by, due to, or caused by the Company or any of its subsidiaries (or, to the Company’s knowledge, any
other entity for whose acts or omissions the Company or any of its subsidiaries is or may otherwise be liable) upon any of the property
now or previously owned or leased by the Company or any of its subsidiaries, or upon any other property, in violation of any law, statute,
ordinance, rule, regulation, order, judgment, decree or permit or which would, under any law, statute, ordinance, rule (including rule
of common law), regulation, order, judgment, decree or permit, give rise to any liability, except for any violation or liability which
has not had and would not reasonably be expected to have, singularly or in the aggregate, a Material Adverse Change; and there has been
no disposal, discharge, emission or other release of any kind onto such property or into the environment surrounding such property of
any toxic or other wastes or other hazardous substances, in each case that would reasonably be expected to result in any material liability
for the Company or any of its subsidiaries, with respect to which the Company or any of its subsidiaries has knowledge. The Company and
its subsidiaries have reviewed the effect of Environmental Laws on their business and assets, in the course of which they identified and
evaluated associated costs and liabilities (including, without limitation, any capital or operating expenditures required for clean-up,
closure of properties or compliance with Environmental Laws or governmental permits issued thereunder, any related constraints on operating
activities and any potential liabilities to third parties). On the basis of such reviews, the Company has reasonably concluded that such
associated costs and liabilities would not have, singularly or in the aggregate, a Material Adverse Change.


 


 


 






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(bb) Intellectual Property.
The Company and each of its subsidiaries own or possess or have valid rights to use all patents, patent applications, trademarks, service
marks, trade names, trademark registrations, service mark registrations, copyrights, licenses, inventions, trade secrets and similar rights
(“Intellectual Property Rights”) necessary for the conduct of the business of the Company and its subsidiaries
as currently carried on and as described in the Registration Statement and the Prospectus, except as would not be reasonably likely to
result in a Material Adverse Change. To the knowledge of the Company, no action or use by the Company or any of its subsidiaries necessary
for the conduct of their business as currently carried on and as described in the Registration Statement and the Prospectus will involve
or give rise to any infringement of, or license or similar fees for, any Intellectual Property Rights of others, except where such action,
use, license or fee is not reasonably likely to result in a Material Adverse Change. Neither the Company nor any of its subsidiaries have
received any notice alleging any such infringement, fee or conflict with asserted Intellectual Property Rights of others. Except as would
not reasonably be expected to result, individually or in the aggregate, in a Material Adverse Change (A) to the knowledge of the Company,
there is no infringement, misappropriation or violation by third parties of any of the Intellectual Property Rights owned by the Company
or any of its subsidiaries; (B) there is no pending or, to the knowledge of the Company, threatened action, suit, proceeding or claim
by others challenging the rights of the Company or any of its subsidiaries in or to any such Intellectual Property Rights, and the Company
is unaware of any facts which would form a reasonable basis for any such claim, that would, individually or in the aggregate, together
with any other claims in this Section 6(bb), reasonably be expected to result in a Material Adverse Change; (C) the Intellectual
Property Rights owned by the Company or any of its subsidiaries and, to the knowledge of the Company, the Intellectual Property Rights
licensed to the Company have not been adjudged by a court of competent jurisdiction invalid or unenforceable, in whole or in part, and
there is no pending or, to the Company’s knowledge, threatened action, suit, proceeding or claim by others challenging the validity
or scope of any such Intellectual Property Rights, and the Company is unaware of any facts which would form a reasonable basis for any
such claim that would, individually or in the aggregate, together with any other claims in this Section 6(bb), reasonably be expected
to result in a Material Adverse Change; (D) there is no pending or, to the Company’s knowledge, threatened action, suit, proceeding
or claim by others that the Company or any of its subsidiaries infringes, misappropriates or otherwise violates any Intellectual Property
Rights or other proprietary rights of others, neither the Company nor any of its subsidiaries has received any written notice of such
claim and the Company is unaware of any other facts which would form a reasonable basis for any such claim that would, individually or
in the aggregate, together with any other claims in this Section 6(bb), reasonably be expected to result in a Material Adverse
Change; and (E) except as disclosed in the Registration Statement or the Prospectus, to the Company’s knowledge, no employee of
the Company or any of its subsidiaries is in or has ever been in violation in any material respect of any term of any employment contract,
patent disclosure agreement, invention assignment agreement, non-competition agreement, non-solicitation agreement, nondisclosure agreement
or any restrictive covenant to or with a former employer where the basis of such violation relates to such employee’s employment
with the Company or any of its subsidiaries, or actions undertaken by the employee while employed with the Company or any of its subsidiaries
and could reasonably be expected to result, individually or in the aggregate, in a Material Adverse Change. To the Company’s knowledge,
all material technical information developed by and belonging to the Company or any of its subsidiaries which has not been patented has
been kept confidential. Neither the Company nor any of its subsidiaries is a party to or bound by any options, licenses or agreements
with respect to the Intellectual Property Rights of any other person or entity that are required to be set forth in the Registration Statement
and the Prospectus and are not described therein. The Registration Statement and the Prospectus contain in all material respects the same
description of the matters set forth in the preceding sentence. None of the technology employed by the Company or any of its subsidiaries
has been obtained or is being used by the Company or any of its subsidiaries in violation of any contractual obligation binding on the
Company or any such subsidiary or, to the Company’s knowledge, any of its or its subsidiaries’ officers, directors or employees,
or otherwise in violation of the rights of any persons.


 


(cc) Brokers. Neither
the Company nor any of its subsidiaries is a party to any contract, agreement or understanding with any person (other than as contemplated
by this Agreement) that would give rise to a valid claim against the Company or any of its subsidiaries or the Sales Agent for a brokerage
commission, finder’s fee or like payment in connection with the offering and sale of the Placement Shares by the Sales Agent under
this Agreement.


 


 


 






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(dd) No Outstanding Loans
or Other Indebtedness. There are no outstanding loans, advances (except normal advances for business expenses in the ordinary course
of business) or guarantees or indebtedness by the Company or any of its subsidiaries to or for the benefit of any of the officers or directors
of the Company or executive officers of any of its subsidiaries to the extent such executive officers may be deemed executive officers
of the Company, or any of their respective family members, except as disclosed in the Registration Statement or the Prospectus. Since
December 26, 2013, the Company has not directly or indirectly extended or maintained credit, arranged for the extension of credit, or
renewed an extension of credit, in the form of a personal loan to or for any director or executive officer of the Company.


 


(ee) No Reliance. The
Company has not relied upon the Sales Agent or legal counsel for the Sales Agent for any legal, tax or accounting advice in connection
with the offering and sale of the Placement Shares.


 


(ff) Broker-Dealer Status.
Neither the Company nor any of its related entities (i) is required to register as a “broker” or “dealer” in accordance
with the provisions of the Exchange Act or (ii) directly or indirectly through one or more intermediaries, controls or is a “person
associated with a member” or “associated person of a member” (within the meaning of Article I of the NASD Manual administered
by FINRA). To the Company’s knowledge, there are no affiliations or associations between any member of FINRA and any of the Company’s
officers, directors or 5% or greater security holders, except as set forth in the Registration Statement.


 


(gg) [Reserved].


 


(hh) FINRA Matters.
All of the information provided to the Sales Agent or to counsel for the Sales Agent by the Company, its counsel, its officers and directors
and, to the Company’s knowledge, the holders of any securities (debt or equity) or options to acquire any securities of the Company
in connection with the offering of the Placement Shares is true, complete, correct and compliant with FINRA’s rules in all material
respects and any letters, filings or other supplemental information provided to FINRA pursuant to FINRA Rules or NASD Conduct Rules is
true, complete and correct in all material respects. Except as disclosed in the Registration Statement or the Prospectus, there is no
(i) officer or director of the Company, (ii) beneficial owner of 10% or more of any class of the Company’s securities or (iii) beneficial
owner of the Company’s unregistered equity securities that were acquired during the 180-day period immediately preceding the date
of this Agreement that is an affiliate or associated person of a FINRA member participating in the offer, issuance and sale of the Placement
Shares as contemplated by this Agreement and the Registration Statement and the Prospectus (as determined in accordance with the rules
and regulations of FINRA).


 


(ii) Compliance with Orders.
Neither the Company nor any of its subsidiaries is in violation of any material judgment, decree, or order of any court, arbitrator or
other governmental authority.


 


(jj) Compliance with Certain
Applicable Laws. Except as would not reasonably be expected to result, individually or in the aggregate, in a Material Adverse Change,
the Company and each of its subsidiaries: (A) are and at all times has been in compliance in all material respects with all statutes,
rules, or regulations applicable to the ownership, testing, development, manufacture, packaging, processing, use, distribution, marketing,
labeling, promotion, sale, offer for sale, storage, import, export or disposal of any product manufactured or distributed by the Company
(“Applicable Laws”); (B) has not received any warning letter, untitled letter or other correspondence or notice
from any governmental authority alleging or asserting noncompliance with any Applicable Laws or any licenses, certificates, approvals,
clearances, authorizations, permits and supplements or amendments thereto required by any such Applicable Laws (“Authorizations”);
(C) possesses all material Authorizations and such Authorizations are valid and in full force and effect and are not in material violation
of any term of any such Authorizations; (D) has not received notice of any claim, action, suit, proceeding, hearing, enforcement, investigation,
arbitration or other action from any governmental authority or third party alleging that any product operation or activity is in violation
of any Applicable Laws or Authorizations and has no knowledge that any such governmental authority or third party is considering any such
claim, litigation, arbitration, action, suit, investigation or proceeding; (E) has not received notice that any governmental authority
has taken, is taking or intends to take action to limit, suspend, modify or revoke any Authorizations and has no knowledge that any such
governmental authority is considering such action; and (F) has filed, obtained, maintained or submitted all material reports, documents,
forms, notices, applications, records, claims, submissions and supplements or amendments as required by any Applicable Laws or Authorizations
and that all such reports, documents, forms, notices, applications, records, claims, submissions and supplements or amendments were complete
and correct on the date filed (or were corrected or supplemented by a subsequent submission).


 


 


 






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(kk) Sarbanes–Oxley
Act. There is and has been no failure on the part of the Company or any of the Company’s directors or officers, in their capacities
as such, to comply in all material respects with any applicable provision of the Sarbanes-Oxley Act of 2002 and the rules and regulations
promulgated in connection therewith (the “Sarbanes-Oxley Act”), including Section 402 related to loans and Sections
302 and 906 related to certifications.


 


(ll) Disclosure Controls
And Procedures. Except as set forth in the Registration Statement or the Prospectus, the Company and its subsidiaries maintain systems
of “internal control over financial reporting” (as defined under Rules 13a-15 and 15d-15 under the Exchange Act) that comply
with the requirements of the Exchange Act and have been designed by, or under the supervision of, their respective principal executive
and principal financial officers, or persons performing similar functions, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with GAAP, including, but not limited
to, internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s
general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity
with GAAP and to maintain asset accountability; (iii) access to assets is permitted only in accordance with management’s general
or specific authorization; (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences; and (v) the interactive data in eXtensible Business Reporting Language included
or incorporated by references in the Registration Statement or the Prospectus fairly present the information called for in all material
respects and are prepared in accordance with the Commission’s rules and guidelines applicable thereto. Since the date of the latest
audited financial statements included in the Registration Statement or the Prospectus, there has been no change in the Company’s
internal control over financial reporting that has materially and adversely affected, or is reasonably likely to materially and adversely
affect, the Company’s internal control over financial reporting.


 


(mm) ERISA. To the
best knowledge of the Company, (i) the Company, its subsidiaries and any “employee benefit plan” (as defined under the Employee
Retirement Income Security Act of 1974, as amended, and the regulations and published interpretations thereunder (collectively, “ERISA”))
established or maintained by the Company, its subsidiaries or any of their “ERISA Affiliates” (as defined below) are in compliance
in all material respects with ERISA, (ii) no “reportable event” (as defined under ERISA) has occurred or is reasonably expected
to occur with respect to any “employee benefit plan” established or maintained by the Company, or any of its subsidiaries
or any of their ERISA Affiliates, (iii) no “employee benefit plan” established or maintained by the Company, any of its subsidiaries
or any of their ERISA Affiliates, if such “employee benefit plan” were terminated, would have any “amount of unfunded
benefit liabilities” (as defined under ERISA), and (iv) neither the Company nor any of its subsidiaries nor any of their ERISA Affiliates
has incurred or reasonably expects to incur any material liability under (x) Title IV of ERISA with respect to termination of, or withdrawal
from, any “employee benefit plan” or (y) Sections 412, 4971, 4975 or 4980B of the Code. Each “employee benefit plan”
established or maintained by the Company, any of its subsidiaries or any of their ERISA Affiliates that is intended to be qualified under
Section 401(a) of the Code is so qualified and, to the knowledge of the Company, nothing has occurred, whether by action or failure to
act, which would cause the loss of such qualification. “ERISA Affiliate” means, with respect to the Company
and each of its subsidiaries, any member of any group of organizations described in Sections 414(b),(c),(m) or (o) of the Internal Revenue
Code of 1986, as amended, and the regulations and published interpretations thereunder (the “Code”) of which
the Company or any of its subsidiaries is a member.


 


(nn) Contracts and Agreements.
The agreements and documents described in the Registration Statement and the Prospectus conform in all material respects to the descriptions
thereof contained therein and there are no agreements or other documents required by the Securities Act to be described in the Registration
Statement and the Prospectus or to be filed with the Commission as exhibits to the Registration Statement, that have not been so described
or filed. Each agreement or other instrument (however characterized or described) to which the Company or any of its subsidiaries is a
party or by which it is or may be bound or affected and (i) that is referred to in the Registration Statement and the Prospectus, or (ii)
is material to the Company’s or its subsidiaries’ business, has been duly authorized and validly executed by the Company,
is in full force and effect in all material respects and is enforceable against the Company or any of its subsidiaries and, to the Company’s
knowledge, the other parties thereto, in accordance with its terms, except (x) as such enforceability may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting creditors’ rights generally, (y) as enforceability of any indemnification or contribution
provision may be limited under the federal and state securities laws, and (z) that the remedy of specific performance and injunctive and
other forms of equitable relief may be subject to the equitable defenses and to the discretion of the court before which any proceeding
therefor may be brought. Except as disclosed in the Registration Statement or the Prospectus, none of such agreements or instruments has
been assigned by the Company or its subsidiaries, and neither the Company, its subsidiaries nor, to the Company’s knowledge, any
other party is in default thereunder and, to the Company’s knowledge, no event has occurred that, with the lapse of time or the
giving of notice, or both, would constitute a default thereunder. To the best of the Company’s knowledge, performance by the Company
or any of its subsidiaries of the material provisions of such agreements or instruments will not result in a violation of any existing
applicable law, rule, regulation, judgment, order or decree of any governmental agency or court, domestic or foreign, having jurisdiction
over the Company, its subsidiaries or any of their assets or businesses (each, a “Governmental Entity”), including,
without limitation, those relating to environmental laws and regulations.


 


 


 






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(oo) Title to Properties.
Except as set forth in the Registration Statement or the Prospectus, the Company and each of its subsidiaries have good and marketable
title in fee simple to, or have valid rights to lease or otherwise use, all items of real or personal property which are material to the
business of the Company, in each case free and clear of all liens, encumbrances, security interests, claims and defects that do not, singly
or in the aggregate, materially affect the value of such property and do not interfere with the use made and proposed to be made of such
property by the Company or any of its subsidiaries; and all of the leases and subleases material to the business of the Company, and under
which the Company or any of its subsidiaries hold properties described in the Registration Statement and the Prospectus, are in full force
and effect, and neither the Company nor any of its subsidiaries has received any notice of any material claim of any sort that has been
asserted by anyone adverse to the rights of the Company or any of its subsidiaries under any of the leases or subleases mentioned above,
or affecting or questioning the rights of the Company or any of its subsidiaries to the continued possession of the leased or subleased
premises under any such lease or sublease, which would result in a Material Adverse Change.


 


(pp) No Unlawful Contributions
or Other Payments. No payments or inducements have been made or given, directly or indirectly, to any federal or local official or
candidate for, any federal or state office in the United States or foreign offices by the Company, any of its subsidiaries or any of their
officers or directors, or, to the knowledge of the Company, by any of its employees or agents or any other person in connection with any
opportunity, contract, permit, certificate, consent, order, approval, waiver or other authorization relating to the business of the Company
or any of its subsidiaries, except for such payments or inducements as were lawful under applicable laws, rules and regulations. Neither
the Company, any of its subsidiaries, nor, to the knowledge of the Company, any director, officer, agent, employee or other person associated
with or acting on behalf of the Company or any of its subsidiaries, (i) has used any corporate funds for any unlawful contribution, gift,
entertainment or other unlawful expense relating to political activity; (ii) made any direct or indirect unlawful payment to any government
official or employee from corporate funds; or (iii) made any bribe, unlawful rebate, payoff, influence payment, kickback or other unlawful
payment in connection with the business of the Company.


 


(qq) Foreign Corrupt Practices
Act. None of the Company, any of its subsidiaries or, to the knowledge of the Company, any director, officer, agent, employee, affiliate
or other person acting on behalf of the Company or any of its subsidiaries, is aware of or has taken any action, directly or indirectly,
that would result in a violation by such persons of the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations
thereunder (collectively, the “FCPA”), including, without limitation, making use of the mails or any means or
instrumentality of interstate commerce corruptly in furtherance of an offer, payment, promise to pay or authorization of the payment of
any money, or other property, gift, promise to give, or authorization of the giving of anything of value to any “foreign official”
(as such term is defined in the FCPA) or any foreign political party or official thereof or any candidate for foreign political office,
in contravention of the FCPA. The Company and its subsidiaries have conducted their respective businesses in compliance with the FCPA
and have instituted and maintains policies and procedures designed to ensure, and which are reasonably expected to continue to ensure,
continued compliance therewith.


 


(rr) Money Laundering Laws.
The operations of the Company and its subsidiaries are and have been conducted at all times in compliance with applicable financial recordkeeping
and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the money laundering statutes of
all jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered
or enforced by any governmental agency (collectively, the “Money Laundering Laws”), except where the failure
to be in such compliance, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Change, and
no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company
or any of its subsidiaries with respect to the Money Laundering Laws is pending or, to the knowledge of the Company, threatened.


 


(ss) OFAC. None of
the Company, any of its subsidiaries or, to the knowledge of the Company, any director, officer, agent, employee, affiliate or person
acting on behalf of the Company or any of its subsidiaries is currently subject to any U.S. sanctions administered by the Office of Foreign
Assets Control of the U.S. Treasury Department (“OFAC”); and the Company will not directly or indirectly use
the proceeds of the offering, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or
other person or entity, for the purpose of financing the activities of any person currently subject to any U.S. sanctions administered
by OFAC.


 


 


 






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(tt) Exchange Listing.
The Common Stock is registered pursuant to Section 12(b) of the Exchange Act and is currently listed on the Exchange under the trading
symbol “FCUV”. Except as disclosed in the Registration Statement or the Prospectus, there is no action pending by the Company
or, to the Company’s knowledge, the Exchange to delist the Common Stock from the Exchange, nor has the Company received any notification
that the Exchange is contemplating terminating such listing. The Company has no intention to delist the Common Stock from the Exchange
or to deregister the Common Stock under the Exchange Act, in either case, at any time during the period commencing on the date of this
Agreement through and including the 90th calendar day after the termination of this Agreement. The Placement Shares have been approved
for listing on the Exchange. The issuance and sale of the Placement Shares under this Agreement does not contravene the rules and regulations
of the Exchange.


 


(uu) Margin Rules.
The Company owns no “margin securities” as that term is defined in Regulation U of the Board of Governors of the Federal Reserve
System (the “Federal Reserve Board”), and none of the proceeds from the issuance, sale and delivery of the Placement
Shares as contemplated by this Agreement and as described in the Registration Statement and the Prospectus will be used, directly or indirectly,
for the purpose of purchasing or carrying any margin security, for the purpose of reducing or retiring any indebtedness which was originally
incurred to purchase or carry any margin security or for any other purpose which might cause any of the shares of Common Stock to be considered
a “purpose credit” within the meanings of Regulation T, U or X of the Federal Reserve Board.


 


(vv) Underwriter Agreements.
The Company is not a party to any agreement with an agent or underwriter for any other “at-the-market” or continuous equity
transaction.


 


(ww) Board of Directors.
The qualifications of the persons serving as board members of the Company and the overall composition of the Company’s Board of
Directors comply with the applicable requirements of the Exchange Act and the Sarbanes-Oxley Act and the listing rules of the Exchange
applicable to the Company. At least one member of the Audit Committee of the Board of Directors of the Company qualifies as an “audit
committee financial expert,” as such term is defined under Regulation S-K and the listing rules of the Exchange. In addition, at
least a majority of the persons serving on the Board of Directors of the Company qualify as “independent,” as defined under
the listing rules of the Exchange.


 


(xx) No Integration.
Neither the Company, nor any of its affiliates, nor any person acting on its or their behalf has, directly or indirectly, made any offers
or sales of any security or solicited any offers to buy any security, under circumstances that would cause the offer and sale of the Placement
Shares hereunder to be integrated with prior offerings by the Company for purposes of the Securities Act that would require the registration
of any such securities under the Securities Act.


 


(yy) No Material Defaults.
Neither the Company nor any of its subsidiaries has defaulted on any installment on indebtedness for borrowed money or on any rental on
one or more long-term leases, which defaults, individually or in the aggregate, could reasonably be expected to result in a Material Adverse
Change. The Company has not filed a report pursuant to Section 13(a) or 15(d) of the Exchange Act since the filing of its last Annual
Report on Form 10-K, indicating that it (i) has failed to pay any dividend or sinking fund installment on preferred stock or (ii) has
defaulted on any installment on indebtedness for borrowed money or on any rental on one or more long-term leases, which defaults, individually
or in the aggregate, could reasonably be expected to result in a Material Adverse Change.


 


(zz) Books and Records.
The minute book of the Company has been made available to the Sales Agent and counsel for the Sales Agent, and such book (i) contains
a substantially complete summary of all meetings and material actions of the board of directors (including each board committee) and stockholders
of the Company (or analogous governing bodies and interest holders, as applicable) since 2017 through the date of the latest meeting and
action, and (ii) accurately in all material respects reflect all transactions referred to in such minutes.


 


(aaa) Continued Business.
No supplier, customer, distributor or sales agent of the Company or any subsidiary has notified the Company or any subsidiary that it
intends to discontinue or decrease the rate of business done with the Company or any subsidiary, except where such discontinuation or
decrease has not resulted in and could not reasonably be expected to result in a Material Adverse Change.


 


 


 






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(bbb) Regulations.
The disclosures in the Registration Statement and the Prospectus concerning the effects of federal, state, local and all foreign regulation
on the Company’s business in the past and as currently contemplated are correct in all material respects and no other such regulations
are required to be disclosed in the Registration Statement and the Prospectus which are not so disclosed.


 


(ccc) Confidentiality and
Non-Competitions. To the Company’s knowledge, no director, officer, key employee or consultant of the Company or any of its
subsidiaries is subject to any confidentiality, non-disclosure, non-competition agreement or non-solicitation agreement with any employer
or prior employer that could reasonably be expected to materially affect his or her ability to be and act in his or her respective capacity
for the Company or to result in a Material Adverse Change.


 


(ddd) Dividend Restrictions.
Except as described in the Registration Statement or the Prospectus, no subsidiary of the Company
is prohibited or restricted, directly or indirectly, from paying dividends to the Company, or from making any other distribution with
respect to such subsidiary’s equity securities or from repaying to the Company or any other subsidiary of the Company any amounts
that may from time to time become due under any loans or advances to such subsidiary from the Company or from transferring any property
or assets to the Company or to any other subsidiary.


 


Any certificate signed by an officer of the Company
and delivered to the Sales Agent or to counsel for the Sales Agent pursuant to or in connection with this Agreement shall be deemed to
be a representation and warranty by the Company to the Sales Agent as to the matters set forth therein.


 


The Company acknowledges that the Sales Agent
and, for purposes of the opinions to be delivered pursuant to Section 7 hereof, counsel to the Company and counsel to the Sales
Agent, will rely upon the accuracy and truthfulness of the foregoing representations and hereby consents to such reliance.


 


7. Covenants of the Company.
The Company covenants and agrees with the Sales Agent that:


 


(a) Registration Statement
Amendments. After the date of this Agreement until its termination pursuant to Section 11 and during any period in which a
Prospectus relating to any Placement Shares is required to be delivered by the Sales Agent under the Securities Act (including in circumstances
where such requirement may be satisfied pursuant to Rule 153 or Rule 172 under the Securities Act), (i) the Company will notify the Sales
Agent promptly of the time when any subsequent amendment to the Registration Statement, other than documents incorporated by reference,
has been filed with the Commission and/or has become effective or any subsequent supplement to the Prospectus has been filed (other than
any supplement not related to any Placement) and of any request by the Commission for any amendment or supplement to the Registration
Statement or Prospectus or for additional information; (ii) the Company will prepare and file with the Commission, promptly upon the Sales
Agent’s reasonable request, any amendments or supplements to the Registration Statement or Prospectus that, in the Sales Agent’s
reasonable opinion, may be necessary or advisable in connection with the distribution of the Placement Shares by the Sales Agent (provided,
however, that the failure of the Sales Agent to make such request shall not relieve the Company of any obligation or liability
hereunder, or affect the Sales Agent’s right to rely on the representations and warranties made by the Company in this Agreement,
and provided, further, that the only remedy the Sales Agent shall have with respect to the failure to make such filing shall
be to cease making sales under this Agreement until such amendment or supplement is filed); (iii) the Company will not file any amendment
or supplement to the Registration Statement or Prospectus, other than documents incorporated by reference, relating to the Placement Shares
or a security convertible into the Placement Shares unless a copy thereof has been submitted to the Sales Agent within a reasonable period
of time before the filing and the Sales Agent has not reasonably objected thereto (provided, however, that the failure of
the Sales Agent to make such objection shall not relieve the Company of any obligation or liability hereunder, or affect the Sales Agent’s
right to rely on the representations and warranties made by the Company in this Agreement, and provided, further, that the
only remedy the Sales Agent shall have with respect to the failure by the Company to obtain such consent shall be to cease making sales
under this Agreement); (iv) the Company will furnish to the Sales Agent at the time of filing thereof a copy of any document that upon
filing is deemed to be incorporated by reference into the Registration Statement or Prospectus, except for those documents available via
EDGAR; and (v) the Company will cause each amendment or supplement to the Prospectus, other than documents incorporated by reference,
to be filed with the Commission as required pursuant to the applicable paragraph of Rule 424(b) of the Securities Act (without reliance
on Rule 424(b)(8) of the Securities Act) or, in the case of any documents incorporated by reference, to be filed with the Commission as
required pursuant to the Exchange Act, within the time period prescribed.


 


 


 






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(b) Notice of Commission
Stop Orders. The Company will advise the Sales Agent, promptly after it receives notice or obtains knowledge thereof, of the issuance
by the Commission of any stop order suspending the effectiveness of the Registration Statement or any notice objecting to, or other order
preventing or suspending the use of, the Prospectus, of the suspension of the qualification of the Placement Shares for offering or sale
in any jurisdiction, or of the initiation of any proceeding for any such purpose or any examination pursuant to Section 8(e) of the Securities
Act, or if the Company becomes the subject of a proceeding under Section 8A of the Securities Act in connection with the offering of the
Placement Shares; and it will promptly use its reasonable best efforts to prevent the issuance of any stop order or to obtain its withdrawal
if such a stop order should be issued. Until such time as any stop order is lifted, the Sales Agent shall cease making offers and sales
under this Agreement.


 


(c) Delivery of Prospectus;
Subsequent Changes. During any period in which a Prospectus relating to the Placement Shares is required to be delivered by the Sales
Agent under the Securities Act with respect to a pending sale of the Placement Shares (including in circumstances where such requirement
may be satisfied pursuant to Rule 153 or Rule 172 under the Securities Act), the Company will comply with all requirements imposed upon
it by the Securities Act, as from time to time in force, and to file on or before their respective due dates all reports and any definitive
proxy or information statements required to be filed by the Company with the Commission pursuant to Sections 13(a), 13(c), 14, 15(d) or
any other provision of or under the Exchange Act. If during such period any event occurs as a result of which the Prospectus as then amended
or supplemented would include an untrue statement of a material fact or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances then existing, not misleading, or if during such period it is necessary to amend or supplement
the Registration Statement or Prospectus to comply with the Securities Act, the Company will promptly notify the Sales Agent to suspend
the offering of Placement Shares during such period and the Company will promptly amend or supplement the Registration Statement or Prospectus
(at the expense of the Company) so as to correct such statement or omission or effect such compliance; provided, however,
that the Company may delay any such amendment or supplement if, in the reasonable judgment of the Company, it is in the best interests
of the Company to do so.


 


(d) Listing of Placement
Shares. During any period in which the Prospectus relating to the Placement Shares is required to be delivered by the Sales Agent
under the Securities Act with respect to a pending sale of the Placement Shares (including in circumstances where such requirement may
be satisfied pursuant to Rule 153 or Rule 172 under the Securities Act), the Company will use its reasonable best efforts to (i) cause
the Placement Shares to be listed on the Exchange, (ii) in collaboration with the Sales Agent, qualify the Placement Shares for sale under
the securities laws of such jurisdictions as the Sales Agent reasonably designates, and (iii) continue such qualifications in effect so
long as required for the distribution of the Placement Shares; provided, however, that the Company shall not be required
in connection therewith to qualify as a foreign corporation or dealer in securities or file a general consent to service of process in
any jurisdiction.


 


(e) Delivery of Registration
Statement and Prospectus. The Company will furnish to the Sales Agent and its counsel (at the expense of the Company) copies of the
Registration Statement, the Prospectus (including all documents incorporated by reference therein) and all amendments and supplements
to the Registration Statement or Prospectus that are filed with the Commission during any period in which a Prospectus relating to the
Placement Shares is required to be delivered under the Securities Act (including all documents filed with the Commission during such period
that are deemed to be incorporated by reference therein), in each case as soon as reasonably practicable and in such quantities as the
Sales Agent may from time to time reasonably request and, at the Sales Agent’s request, will also furnish copies of the Prospectus
to each exchange or market on which sales of the Placement Shares may be made; provided, however, that the Company shall
not be required to furnish any document (other than the Prospectus) to the Sales Agent to the extent such document is available on EDGAR.


 


(f) Earnings Statement.
To the extent not available on EDGAR, the Company will make generally available to its security holders as soon as practicable, but in
any event not later than 15 months after the end of the Company’s current fiscal quarter, an earnings statement of the Company and
its subsidiaries (which need not be audited) covering a 12-month period that complies with Section 11(a) and Rule 158 of the Securities
Act. The terms “earnings statement” and “make generally available to its security holders” shall have the meanings
set forth in Rule 158 under the Securities Act. The Company and the Sales Agent acknowledge and agree that the Company’s ordinary,
timely-filed periodic filings with the Commission pursuant to the Exchange Act may be used to satisfy this obligation to the extent consistent
with the requirements set forth herein.


 


 


 






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(g) Expenses. The Company,
whether or not the transactions contemplated hereunder are consummated or this Agreement is terminated in accordance with the provisions
of Section 11 hereunder, will pay the following expenses all incident to the performance of its obligations hereunder, including,
but not limited to, expenses relating to (i) the preparation, printing and filing of the Registration Statement and each amendment and
supplement thereto, of each Prospectus and of each amendment and supplement thereto, (ii) the preparation, issuance and delivery of the
Placement Shares, including any stock or other transfer taxes and any stamp or other duties payable upon the sale, issuance or delivery
of the Placement Shares to the Sales Agent, (iii) the fees and disbursements of the counsel, accountants and other advisors to the Company
in connection with the transactions contemplated by this Agreement; (iv) the qualification of the Placement Shares under securities laws
in accordance with the provisions of Section 7(d) of this Agreement, including filing fees (provided, however, that
any fees or disbursements of counsel for the Sales Agent in connection therewith shall be paid by the Sales Agent except as set forth
in (ix) below), (v) the printing and delivery to the Sales Agent of copies of the Prospectus and any amendments or supplements thereto,
and of this Agreement, (vi) the fees and expenses incurred in connection with the listing or qualification of the Placement Shares for
trading on the Exchange, (vii) the fees and expenses of the transfer agent or registrar for the Common Stock; (viii) filing fees and expenses,
if any, of the Commission and the FINRA Corporate Financing Department (provided, however, that any fees or disbursements
of counsel for the Sales Agent in connection therewith shall be paid by the Sales Agent except as set forth in (ix) below), and (ix) the
Company shall reimburse the Sales Agent for its reasonable and documented out-of-pocket expenses (including but not limited to the reasonable
and documented fees and disbursements of counsel to the Sales Agent up to $25,000).


 


(h) Use of Proceeds.
The Company will use the Net Proceeds as described in the Prospectus in the section entitled “Use of Proceeds.”


 


(i) Notice of Other Sales.
The Company (i) shall provide the Sales Agent notice as promptly as reasonably possible before it offers to sell, contracts to sell, sells,
grants any option to sell or otherwise disposes of any shares of Common Stock (other than Placement Shares offered pursuant to the provisions
of this Agreement) or securities convertible into or exchangeable for Common Stock, or warrants or any rights to purchase or acquire Common
Stock, during the period beginning on the fifth (5th) Trading Day immediately prior to the date on which any Placement Notice
is delivered to the Sales Agent hereunder and ending on the fifth (5th) Trading Day immediately following the final Settlement
Date with respect to Placement Shares sold pursuant to such Placement Notice (or, if the Placement Notice has been terminated or suspended
prior to the sale of all Placement Shares covered by a Placement Notice, the fifth (5th) Trading Day immediately following
the date of such suspension or termination), and (ii) shall not (without the prior written consent of the Sales Agent) directly or indirectly
engage in any other “at-the-market” or continuous equity transaction offer to sell, contract to sell, grant any option to
sell or otherwise dispose of any shares of Common Stock (other than the Placement Shares offered pursuant to this Agreement) or securities
convertible into or exchangeable for shares of Common Stock, warrants or any rights to purchase or acquire, shares of Common Stock prior
to the termination of this Agreement; provided, however, that such notice requirements or restrictions, as the case may
be, will not be required in connection with the Company’s issuance or sale of (i) shares of Common Stock, options to purchase shares
of Common Stock, other equity awards or shares of Common Stock issuable upon the exercise of options or other equity awards, pursuant
to any employee or director stock option or benefits plan, stock ownership plan or dividend reinvestment plan of the Company whether now
in effect or hereafter implemented, (ii) shares of Common Stock issuable upon exchange, conversion or redemption of securities or the
exercise of warrants, options or other rights in effect or outstanding, and disclosed in filings by the Company available on EDGAR or
otherwise in writing (including by email correspondence) to the Sales Agent and (iii) shares of Common Stock or securities convertible
into or exchangeable for shares of Common Stock as consideration for mergers, acquisitions, sale or purchase of assets or other business
combinations or strategic alliances occurring after the date of this Agreement which are not issued for capital raising purposes. Notwithstanding
the foregoing, the Company shall provide the Sales Agent notice at least two (2) days prior to pursuing any private or public offerings
of equity and/or other securities (including debt securities) in one or more transactions. Notwithstanding the foregoing provisions, nothing
herein shall be construed to restrict the Company’s ability, or require the consent of the Sales Agent, to file a registration statement
under the Securities Act.


 


(j) Change of Circumstances.
The Company will, at any time during a fiscal quarter in which the Company intends to tender a Placement Notice or sell Placement Shares,
advise the Sales Agent promptly after it shall have received notice or obtained knowledge thereof, of any information or fact that would
alter or affect in any material respect any opinion, certificate, letter or other document provided to the Sales Agent pursuant to this
Agreement.


 


 


 






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(k) Due Diligence Cooperation.
During the term of this Agreement, the Company will cooperate with any reasonable due diligence review conducted by the Sales Agent or
its agents in connection with the transactions contemplated hereby, including, without limitation, providing information and making available
documents and senior corporate officers, during regular business hours upon reasonable prior notice and at the Company’s principal
offices (or such other location – including by remote or virtual meeting or teleconference – as mutually agreed upon by the
parties hereto), as the Sales Agent may reasonably request.


 


(l) Required Filings Relating
to Placement of Placement Shares. The Company shall set forth in each Annual Report on Form 10-K and Quarterly Report on Form 10-Q
filed by the Company with the Commission in respect of any quarter in which sales of Placement Shares were made by or through the Sales
Agent under this Agreement, with regard to the relevant period, the amount of Placement Shares sold to or through the Sales Agent, the
Net Proceeds to the Company and the compensation payable by the Company to the Sales Agent with respect to such sales of Placement Shares.
To the extent that the filing of a prospectus supplement with the Commission with respect to any sales of Placement Shares becomes required
under Rule 424(b) under the Securities Act, the Company agrees that, on or before such dates as the Securities Act shall require, the
Company will (i) file a prospectus supplement with the Commission under the applicable paragraph of Rule 424(b) under the Securities Act,
which prospectus supplement will set forth, with regard to the relevant period, the amount of Placement Shares sold to or through the
Sales Agent, the Net Proceeds to the Company and the compensation payable by the Company to the Sales Agent with respect to such Placement
Shares, and (ii) deliver such number of copies of each such prospectus supplement to each exchange or market on which such sales were
effected as may be required by the rules or regulations of such exchange or market. The Company shall afford the Sales Agent and its counsel
with a reasonable opportunity to review and comment upon, shall consult with the Sales Agent and its counsel on the form and substance
of, and shall give due consideration to all such comments from the Sales Agent or its counsel on, any such filing prior to the issuance,
filing or public disclosure thereof; provided, however, that the Company shall not be required to submit for review (A) any portion
of any periodic reports filed with the Commission under the Exchange Act other than the specific disclosure relating to any sales of Placement
Shares and (B) any disclosure contained in periodic reports filed with the Commission under the Exchange Act if it shall have previously
provided the same disclosure for review in connection with a previous filing.


 


(m) Representation Dates;
Certificate. On or prior to the date the first Placement Notice is given hereunder and each time the Company (i) files the Prospectus
relating to the Placement Shares or amends or supplements the Registration Statement or the Prospectus relating to the Placement Shares
(other than (A) a prospectus supplement filed in accordance with Section 7(l) of this Agreement or (B) a supplement or amendment
that relates to an offering of securities other than the Placement Shares) by means of a post-effective amendment, sticker, or supplement
but not by means of incorporation of document(s) by reference to the Registration Statement or the Prospectus relating to the Placement
Shares; (ii) files an annual report on Form 10-K under the Exchange Act (including any Form 10-K/A containing amended financial information
or a material amendment to the previously filed Form 10-K); (iii) files a quarterly report on Form 10-Q under the Exchange Act; or (iv)
files a current report on Form 8-K containing amended financial information (other than an earnings release, to “furnish”
information pursuant to Items 2.02 or 7.01 of Form 8-K or to provide disclosure pursuant to Item 8.01 of Form 8-K relating to the reclassification
of certain properties as discontinued operations in accordance with Statement of Financial Accounting Standards No. 144) under the Exchange
Act (each date of filing of one or more of the documents referred to in clauses (i) through (iv) shall be a “Representation
Date”), the Company shall furnish the Sales Agent (but in the case of clause (iv) above only if the Sales Agent reasonably
determines that the information contained in such Form 8-K is material) within three (3) Trading Days after each Representation Date with
a certificate, in the form attached hereto as Exhibit 7(m). The requirement to provide a certificate under this Section 7(m)
shall be automatically waived for any Representation Date occurring at a time at which no Placement Notice is pending, which waiver shall
continue until the earlier to occur of the date the Company delivers a Placement Notice hereunder (which for such calendar quarter shall
be considered a Representation Date) and the next occurring Representation Date; provided, however, that such waiver shall
not apply for any Representation Date on which the Company files its annual report on Form 10-K. Notwithstanding the foregoing, if the
Company subsequently decides to sell Placement Shares following a Representation Date when the Company relied on such waiver and did not
provide the Sales Agent with a certificate under this Section 7(m), then before the Company delivers the Placement Notice or the
Sales Agent sells any Placement Shares, the Company shall provide the Sales Agent with a certificate, in the form attached hereto as Exhibit
7(m), dated the date of the Placement Notice.


 


 


 






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(n) Legal Opinion.
On or prior to the date the first Placement Notice is given hereunder, the Company shall cause to be furnished to the Sales Agent the
written opinion and negative assurance of Wilson Bradshaw LLP, as counsel to the Company, or other counsel reasonably satisfactory to
the Sales Agent (“Company Counsel”), substantially in the forms previously agreed between the Company and the
Sales Agent. Thereafter, within three (3) Trading Days after each Representation Date with respect to which the Company is obligated to
deliver a certificate pursuant to Section 7(m) for which no waiver is applicable pursuant to Section 7(m), and not more
than once per quarter, the Company shall cause to be furnished to the Sales Agent the written opinion and negative assurance of Company
Counsel substantially in the forms previously agreed between the Company and the Sales Agent, modified, as necessary, to relate to the
Registration Statement and the Prospectus as then amended or supplemented; provided, however, that if Company Counsel has
previously furnished to the Sales Agent such written opinion and negative assurance of such counsel, in each case substantially in the
forms previously agreed between the Company and the Sales Agent, then each Company Counsel may, in respect of any future Representation
Date, furnish the Sales Agent with a letter signed by such counsel (each, a “Reliance Letter”) in lieu of such
opinion and negative assurance of such counsel to the effect that the Sales Agent may rely on the prior opinion and negative assurance
of such counsel delivered pursuant to this Section 7(n) to the same extent as if it were dated the date of such Reliance Letter
(except that statements in such prior opinion and negative assurance shall be deemed to relate to the Registration Statement and the Prospectus
as amended or supplemented to the date of such Reliance Letter).


 


(o) Comfort Letter.
On or prior to the date the first Placement Notice is given hereunder and within three (3) Trading Days after each subsequent Representation
Date with respect to which the Company is obligated to deliver a certificate pursuant to Section 7(m) for which no waiver is applicable
pursuant to Section 7(m), other than a Representation Date under Section 7(m)(iii) or Section 7(m)(iv) unless with
respect to a Representation Date under Section 7(m)(iv) the Sales Agent reasonably requests delivery thereof, the Company shall
cause its independent accountants to furnish the Sales Agent letters (the “Comfort Letters”), dated the date
that the Comfort Letter is delivered, in form and substance satisfactory to the Sales Agent, (i) confirming that they are an independent
registered public accounting firm within the meaning of the Securities Act, the Exchange Act and the rules and regulations of the PCAOB
and are in compliance with the applicable requirements relating to the qualification of accountants under Rule 2-01 of Regulation S-X
of the Commission, (ii) stating, as of such date, the conclusions and findings of such firm with respect to the financial information
and other matters ordinarily covered by accountants’ “comfort letters” to the Sales Agent in connection with registered
public offerings (the first such letter, the “Initial Comfort Letter”) and (iii) updating the Initial Comfort
Letter with any information that would have been included in the Initial Comfort Letter had it been given on such date and modified as
necessary to relate to the Registration Statement and the Prospectus, as amended and supplemented to the date of such letter.


 


(p) CFO Certification.
On or prior to the date the first Placement Notice is given hereunder and within three (3) Trading Days after each subsequent Representation
Date with respect to which the Company is obligated to deliver a certificate pursuant to Section 7(m) for which no waiver is applicable
pursuant to Section 7(m), the Company shall furnish the Sales Agent with certificates, signed on behalf of the Company by its Chief
Financial Officer (each, a “CFO Certificate”), dated the date that the CFO Certificate is delivered, in form
and substance satisfactory to the Sales Agent and its counsel, certifying as to such financial and statistical information, forward-looking
statements and other matters as the Sales Agent may reasonably request.


 


(q) Market Activities.
The Company will not knowingly, either directly or indirectly, (i) take any action designed to cause or result in, or that constitutes
or might reasonably be expected to constitute, the stabilization or manipulation of the price of any security of the Company to facilitate
the sale or resale of the Common Stock or (ii) sell, bid for, or purchase shares of Common Stock in violation of Regulation M, or pay
anyone any compensation for soliciting purchases of the Placement Shares other than the Sales Agent; provided, however, that nothing
herein shall prevent the Company from filing or submitting reports under the Exchange Act or issuing press releases in the ordinary course
of business.


 


(r) Insurance. The
Company and its subsidiaries shall maintain, or cause to be maintained, insurance in such amounts and covering such risks as is reasonable
and customary for the business in which it is engaged.


 


 


 






    	 	19	 



     


    

 


(s) Investment Company
Act. The Company will conduct its affairs in such a manner so as to reasonably ensure that neither it nor its subsidiaries, after
giving effect to the offering and sale of the Placement Shares and the application of proceeds therefrom as described in the Prospectus,
will be, an “investment company” within the meaning of such term under the Investment Company Act.


 


(t) Securities Act and
Exchange Act. The Company will use its best efforts to comply with all requirements imposed upon it by the Securities Act and the
Exchange Act as from time to time in force, so far as necessary to permit the continuance of sales of, or dealings in, the Placement Shares
as contemplated by the provisions hereof and the Prospectus.


 


(u) No Offer to Sell.
Other than the Prospectus and an Issuer Free Writing Prospectus approved in advance by the Company and the Sales Agent in its capacity
as principal or agent hereunder, neither the Sales Agent nor the Company (including its agents and representatives, other than the Sales
Agent in its capacity as such) will make, use, prepare, authorize, approve or refer to any written communication (as defined in Rule 405
under the Securities Act), required to be filed with the Commission, that constitutes an offer to sell or solicitation of an offer to
buy Placement Shares hereunder.


 


(v) Sarbanes-Oxley Act.
The Company will use its reasonable best efforts to comply with all effective applicable provisions of the Sarbanes-Oxley Act.


 


(w) Transfer Agent.
The Company shall maintain, at its sole expense, a registrar and transfer agent for the Common Stock.


 


8. Conditions to the Sales
Agent’s Obligations. The obligations of the Sales Agent hereunder with respect to a Placement will be subject to the continuing
accuracy and completeness of the representations and warranties made by the Company herein, to the due performance by the Company of its
obligations hereunder, to the completion by the Sales Agent of a due diligence review satisfactory to the Sales Agent in its reasonable
judgment, and to the continuing satisfaction (or waiver by the Sales Agent in its sole discretion) of the following additional conditions:


 


(a) Registration Statement
Effective. The Registration Statement shall be effective and shall be available for the sale of all Placement Shares contemplated
to be issued by any Placement Notice which have not yet been issued or sold pursuant to such Registration Statement.


 


(b) Securities Act Filings
Made. The Company shall have filed with the Commission the ATM Prospectus pursuant to Rule 424(b) under the Securities Act prior to
the issuance of any Placement Notice hereunder. All other filings with the Commission with respect to the Placement Shares required by
Rule 424(b) or Rule 433 under the Securities Act to have been filed prior to the issuance of any Placement Notice hereunder shall have
been made within the applicable time period prescribed for such filing by Rule 424(b) (without reliance on Rule 424(b)(8) of the Securities
Act) or Rule 433, as applicable.


 


(c) No Material Notices.
None of the following events shall have occurred and be continuing: (i) receipt by the Company or any of its subsidiaries of any request
for additional information from the Commission or any other federal or state governmental authority during the period of effectiveness
of the Registration Statement, the response to which would require any post-effective amendments or supplements to the Registration Statement
or the Prospectus; (ii) the issuance by the Commission or any other federal or state governmental authority of any stop order suspending
the effectiveness of the Registration Statement or the initiation of any proceedings for that purpose; (iii) receipt by the Company of
any notification with respect to the suspension of the qualification or exemption from qualification of any of the Placement Shares for
sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose; (iv) the occurrence of any event that makes
any material statement made in the Registration Statement or the Prospectus or any material document incorporated or deemed to be incorporated
therein by reference untrue in any material respect or that requires the making of any changes in the Registration Statement, related
Prospectus or such documents so that, in the case of the Registration Statement, it will not contain any materially 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 not misleading
and, that in the case of the Prospectus, it will not contain any materially 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 the light of the circumstances under which they were
made, not misleading.


 


 


 






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(d) No Misstatement or
Material Omission. The Sales Agent shall not have advised the Company that the Registration Statement or Prospectus, or any amendment
or supplement thereto, contains an untrue statement of fact that in the Sales Agent’s reasonable opinion is material, or omits to
state a fact that in the Sales Agent’s reasonable opinion is material and is required to be stated therein or is necessary to make
the statements therein not misleading.


 


(e) Material Changes.
Except as contemplated in the Prospectus, or disclosed in the Company’s reports filed with the Commission, there shall not have
been any material adverse change in the authorized capital stock of the Company or any Material Adverse Change or any development that
could reasonably be expected to result in a Material Adverse Change, or any downgrading in or withdrawal of the rating assigned to any
of the Company’s securities (other than asset backed securities) by any rating organization or a public announcement by any rating
organization that it has under surveillance or review its rating of any of the Company’s securities (other than asset backed securities),
the effect of which, in the case of any such action by a rating organization described above, in the reasonable judgment of the Sales
Agent (without relieving the Company of any obligation or liability it may otherwise have), is so material as to make it impracticable
or inadvisable to proceed with the offering of the Placement Shares on the terms and in the manner contemplated by this Agreement and
the Prospectus.


 


(f) Representation Certificate.
The Sales Agent shall have received the certificate required to be delivered pursuant to Section 7(m) on or before the date on
which delivery of such certificate is required pursuant to Section 7(m).


 


(g) Legal Opinion.
The Sales Agent shall have received the opinion and negative assurance of Company Counsel required to be delivered pursuant Section
7(n) on or before the date on which such delivery of such opinion and negative assurance is required pursuant to Section 7(n).


 


(h) Comfort Letter.
The Sales Agent shall have received the Comfort Letter required to be delivered pursuant Section 7(o) on or before the date on
which such delivery of such Comfort Letter is required pursuant to Section 7(o).


 


(i) CFO Certificate.
The Sales Agent shall have received the CFO Certificate required to be delivered pursuant to Section 7(p) on or before the date
on which delivery of such CFO Certificate is required pursuant to Section 7(p).


 


(j) Secretary’s Certificate.
On or prior to the date the first Placement Notice is given hereunder, the Sales Agent shall have received a certificate, signed on behalf
of the Company by its corporate secretary, certifying as to (i) the Articles of Incorporation of the Company (as the same may be amended
or restated from time to time), (ii) the bylaws of the Company (as the same may be amended or restated from time to time), (iii) the resolutions
of the Board of Directors of the Company (or a committee thereof) authorizing the execution, delivery and performance of this Agreement
and the issuance of the Placement Shares and (iv) the incumbency of the officers duly authorized to execute this Agreement and the other
documents contemplated by this Agreement.


 


(k) No Suspension.
Trading in the Common Stock shall not have been suspended on the Exchange and the Common Stock shall not have been delisted from the Exchange.


 


(l) Other Materials.
On each date on which the Company is required to deliver a certificate pursuant to Section 7(m), the Company shall have furnished
to the Sales Agent such appropriate further opinions, certificates, letters and documents as the Sales Agent may have reasonably requested.
All such opinions, certificates, letters and other documents shall have been in compliance with the provisions hereof. The Company will
furnish the Sales Agent with such conformed copies of such opinions, certificates, letters and other documents as the Sales Agent shall
have reasonably requested.


 


 


 






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(m) Approval for Listing.
The Placement Shares shall either have been (i) approved for listing on the Exchange, subject only to notice of issuance, or (ii) the
Company shall have filed an application for listing of the Placement Shares on the Exchange at, or prior to, the issuance of any Placement
Notice.


 


(n) No Termination Event.
There shall not have occurred any event that would permit the Sales Agent to terminate this Agreement pursuant to Section 11(a).


 


(o) FINRA. The Sales
Agent shall have received a letter from the Corporate Financing Department of FINRA confirming that such department has determined to
raise no objection with respect to the fairness or reasonableness of the terms and arrangements related to the sale of the Placement Shares
pursuant to this Agreement.


 


9. Indemnification and
Contribution.


 


(a) Company Indemnification.
To the extent permitted by law, the Company agrees to indemnify and hold harmless the Sales Agent, the directors, officers, members, partners,
employees and agents of the Sales Agent, each broker dealer affiliate of the Sales Agent, and each Sales Agent Affiliate, if any, from
and against any and all losses, claims, liabilities, expenses and damages (including, but not limited to, any and all reasonable investigative,
legal and other expenses incurred in connection with, and any and all amounts paid in settlement (in accordance with Section 9(c))
of, any action, suit or proceeding between any of the indemnified parties and any indemnifying parties or between any indemnified party
and any third party, or otherwise, or any claim asserted), as and when incurred, to which the Sales Agent, or any such person, may become
subject under the Securities Act, the Exchange Act or other federal or state statutory law or regulation, at common law or otherwise,
insofar as such losses, claims, liabilities, expenses or damages arise out of or are based on (x) any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or the Prospectus or any amendment or supplement thereto or in any
Issuer Free Writing Prospectus or in any application or other document executed by or on behalf of the Company or based on written information
furnished by or on behalf of the Company filed in any jurisdiction in order to qualify the Common Stock under the securities laws thereof
or filed with the Commission, (y) the omission or alleged omission to state in any such document a material fact required to be stated
in it or necessary to make the statements in it not misleading or (z) any breach by the Company of any of its agreements contained in
this Agreement; provided, however, that this indemnity agreement shall not apply to the extent that such loss, claim, liability,
expense or damage (or actions in respect thereof) either (i) arises from the sale of the Placement Shares pursuant to this Agreement and
is caused directly by an untrue statement or omission made in reliance upon and in strict conformity with written information relating
to the Sales Agent and furnished to the Company by the Sales Agent expressly for inclusion in any document as described in clause (x)
of this Section 9(a) or (ii) are found in a final judgment (not subject to appeal) by a court of law to have resulted primarily
and directly from the Sales Agent’s willful misconduct or gross negligence in performing the services described in this Agreement.
This indemnity agreement will be in addition to any liability that the Company might otherwise have.


 


(b) The Sales Agent Indemnification.
The Sales Agent agrees to indemnify and hold harmless the Company and its directors and each officer of the Company that signed the Registration
Statement, and each person, if any, who (i) controls the Company within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act or (ii) is controlled by or is under common control with the Company from and against any and all losses, claims,
liabilities, expenses and damages (including, but not limited to, any and all reasonable investigative, legal and other expenses incurred
in connection with, and any and all amounts paid in settlement (in accordance with Section 9(c)) of, any action, suit or proceeding
between any of the indemnified parties and any indemnifying parties or between any indemnified party and any third party, or otherwise,
or any claim asserted), as and when incurred, to which the Company, or any such person, may become subject under the Securities Act, the
Exchange Act or other federal or state statutory law or regulation, at common law or otherwise, insofar as such losses, claims, liabilities,
expenses or damages arise out of or are based on (x) any untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement or the Prospectus or any amendment or supplement thereto, or (y) the omission or alleged omission to state
in any such document a material fact required to be stated in it or necessary to make the statements in it not misleading; provided,
however, that this indemnity agreement shall apply only to the extent that such loss, claim, liability, expense or damage is caused
directly by an untrue statement or omission made in reliance upon and in strict conformity with written information relating to the Sales
Agent and furnished to the Company by the Sales Agent expressly for inclusion in any document as described in clause (x) of this Section
9(b).


 


 


 






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(c) Procedure. Any
party that proposes to assert the right to be indemnified under this Section 9 will, as promptly as reasonable practical after
receipt of notice of commencement of any action against such party in respect of which a claim is to be made against an indemnifying party
or parties under this Section 9, notify each such indemnifying party of the commencement of such action, enclosing a copy of all
papers served, but the omission so to notify such indemnifying party will not relieve the indemnifying party from (i) any liability that
it might have to any indemnified party otherwise than under this Section 9 and (ii) any liability that it may have to any indemnified
party under the foregoing provision of this Section 9 unless, and only to the extent that, such omission results in the forfeiture
of substantive rights or defenses by the indemnifying party. If any such action is brought against any indemnified party and it notifies
the indemnifying party of its commencement, the indemnifying party will be entitled to participate in and, to the extent that it elects
by delivering written notice to the indemnified party as promptly as reasonable practical after receipt of notice of commencement of the
action from the indemnified party, jointly with any other indemnifying party similarly notified, to assume the defense of the action,
with counsel reasonably satisfactory to the indemnified party, and after notice from the indemnifying party to the indemnified party of
its election to assume the defense, the indemnifying party will not be liable to the indemnified party for any legal or other expenses
except as provided below and except for the reasonable costs of investigation subsequently incurred by the indemnified party in connection
with the defense. The indemnified party will have the right to employ its own counsel in any such action, but the fees, expenses and other
charges of such counsel will be at the expense of such indemnified party unless (1) the employment of counsel by the indemnified party
has been authorized in writing by the indemnifying party, (2) the indemnified party has reasonably concluded (based on advice of counsel)
that there may be legal defenses available to it or other indemnified parties that are different from or in addition to those available
to the indemnifying party, (3) a conflict or potential conflict exists (based on advice of counsel to the indemnified party) between the
indemnified party and the indemnifying party (in which case the indemnifying party will not have the right to direct the defense of such
action on behalf of the indemnified party) or (4) the indemnifying party has not in fact employed counsel to assume the defense of such
action within a reasonable time after receiving notice of the commencement of the action, in each of which cases the reasonable fees,
disbursements and other charges of counsel will be at the expense of the indemnifying party or parties. It is understood that the indemnifying
party or parties shall not, in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the reasonable
fees, disbursements and other charges of more than one separate firm admitted to practice in such jurisdiction at any one time for all
such indemnified party or parties. All such fees, disbursements and other charges will be reimbursed by the indemnifying party as promptly
as reasonably practical after they are incurred. An indemnifying party will not, in any event, be liable for any settlement of any action
or claim effected without its written consent. No indemnifying party shall, without the prior written consent of each indemnified party
(such consent not to be unreasonably withheld), settle or compromise or consent to the entry of any judgment in any pending or threatened
claim, action or proceeding relating to the matters contemplated by this Section 9 (whether or not any indemnified party is a party
thereto), unless such settlement, compromise or consent includes an unconditional release of each indemnified party from all liability
arising or that may arise out of such claim, action or proceeding.


 


 


 






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(d) Contribution. In
order to provide for just and equitable contribution in circumstances in which the indemnification provided for in the foregoing paragraphs
of this Section 9 is applicable in accordance with its terms but for any reason is held to be unavailable from the Company or the
Sales Agent, the Company and the Sales Agent will contribute to the total losses, claims, liabilities, expenses and damages (including
any investigative, legal and other expenses reasonably incurred in connection with, and any amount paid in settlement of, any action,
suit or proceeding or any claim asserted, but after deducting any contribution received by the Company from persons other than the Sales
Agent, such as persons who control the Company within the meaning of the Securities Act, officers of the Company who signed the Registration
Statement and directors of the Company, who also may be liable for contribution) to which the Company and the Sales Agent may be subject
in such proportion as shall be appropriate to reflect not only the relative benefits received by the Company on the one hand and the Sales
Agent on the other but also the relative fault of the Company on the one hand and the Sales Agent on the other. The relative benefits
received by the Company on the one hand and the Sales Agent on the other hand shall be deemed to be in the same proportion as the total
Net Proceeds from the sale of the Placement Shares (before deducting expenses) received by the Company bear to the total compensation
received by the Sales Agent from the sale of Placement Shares on behalf of the Company. Such relative fault shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material
fact relates to information supplied by the Company or the Sales Agent, the intent of the parties and their relative knowledge, access
to information and opportunity to correct or prevent such statement or omission. The Company and the Sales Agent agree that it would not
be just and equitable if contributions pursuant to this Section 9(d) were to be determined by pro rata allocation or by any other
method of allocation that does not take into account the equitable considerations referred to herein. The amount paid or payable by an
indemnified party as a result of the loss, claim, liability, expense, or damage, or action in respect thereof, referred to above in this
Section 9(d) shall be deemed to include, for the purpose of this Section 9(d), any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any such action or claim to the extent consistent with Section
9(c) hereof. Notwithstanding the foregoing provisions of this Section 9(d), the Sales Agent shall not be required to contribute
any amount in excess of the commissions received by it under this Agreement and no person found guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) will be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 9(d), any person who controls a party to this Agreement within the meaning
of the Securities Act will have the same rights to contribution as that party (and any officers, directors, members, partners, employees
or agents of the Sales Agent and each broker dealer affiliate of the Sales Agent will have the same rights to contribution as the Sales
Agent), and each officer of the Company who signed the Registration Statement and each director of the Company will have the same rights
to contribution as the Company, subject in each case to the provisions hereof. Any party entitled to contribution, promptly after receipt
of notice of commencement of any action against such party in respect of which a claim for contribution may be made under this Section
9(d), will notify any such party or parties from whom contribution may be sought, but the omission to so notify will not relieve that
party or parties from whom contribution may be sought from any other obligation it or they may have under this Section 9(d) except
to the extent that the failure to so notify such other party materially prejudiced the substantive rights or defenses of the party from
whom contribution is sought. Except for a settlement entered into pursuant to the last sentence of Section 9(c) hereof, no party
will be liable for contribution with respect to any action or claim settled without its written consent if such consent is required pursuant
to Section 9(c) hereof.


 


10. Representations and
Agreements to Survive Delivery. The indemnity and contribution agreements contained in Section 9 of this Agreement and all
representations and warranties of the Company herein or in certificates delivered pursuant hereto shall survive, as of their respective
dates, regardless of (i) any investigation made by or on behalf of the Sales Agent, any controlling person of the Sales Agent, or the
Company (or any of their respective officers, directors, members or controlling persons), (ii) delivery and acceptance of the Placement
Shares and payment therefor or (iii) any termination of this Agreement.


 


11. Termination.


 


(a) The Company shall have
the right, by giving ten (10) days’ notice as hereinafter specified in Section 12, to terminate this Agreement in its sole
discretion at any time after the date of this Agreement. Any such termination shall be without liability of any party to any other party
except that the provisions of Section 7(g), Section 9, Section 10, Section 11(f), Section 16 and Section
17 hereof shall remain in full force and effect notwithstanding such termination.


 


 


 






    	 	24	 



     


    

 


(b) The Sales Agent shall
have the right, by giving ten (10) days’ notice as hereinafter specified in Section 12, to terminate this Agreement in its
sole discretion at any time after the date of this Agreement. Any such termination shall be without liability of any party to any other
party except that the provisions of Section 7(g), Section 9, Section 10, Section 11(f), Section 16
and Section 17 hereof shall remain in full force and effect notwithstanding such termination.


 


(c) Unless earlier terminated
pursuant to this Section 11, this Agreement shall automatically terminate upon the earlier to occur of (i) issuance and sale of
all of the Placement Shares to or through the Sales Agent on the terms and subject to the conditions set forth herein and (ii) the expiration
of the Registration Statement on the third (3rd) anniversary of the initial effective date of the Registration Statement pursuant
to Rule 415(a)(5) under the Securities Act; provided that the provisions of Section 7(g), Section 9, Section 10,
Section 11(f), Section 16 and Section 17 hereof shall remain in full force and effect notwithstanding such termination.


 


(d) This Agreement shall remain
in full force and effect unless terminated pursuant to Sections 11(a), (b), or (c) above or otherwise by mutual agreement
of the parties; provided, however, that any such termination by mutual agreement shall in all cases be deemed to provide
that Section 7(g), Section 9, Section 10, Section 11(f), Section 16 and Section 17 shall remain
in full force and effect.


 


(e) Any termination of this
Agreement shall be effective on the date specified in such notice of termination; provided, however, that such termination
shall not be effective until the close of business on the date of receipt of such notice by the Sales Agent or the Company, as the case
may be. If such termination shall occur prior to the Settlement Date for any sale of Placement Shares, such termination shall not become
effective until the close of business on such Settlement Date and such Placement Shares shall settle in accordance with the provisions
of this Agreement.


 


12. Notices. All notices
or other communications required or permitted to be given by any party to any other party pursuant to the terms of this Agreement shall
be in writing, unless otherwise specified, and if sent to the Sales Agent, shall be delivered to:


 


Sutter Securities, Inc.


6 Venture, Suite 395


Irvine, CA 92618


Attention: Keith Moore


Email: keith@suttersf.com


 


with a copy (which shall not constitute notice)
to:


 


Bevilacqua PLLC


1050 Connecticut Avenue, NW, Suite 500


Washington, DC 20036


Attention: Louis A. Bevilacqua


Telephone: (202) 869-0888


Email: lou@bevilacquapllc.com


 


 


 






    	 	25	 



     


    

 


and if to the Company, shall be delivered to:


 


Focus Universal
Inc.


2311 East Locust
Street


Ontario, CA 91761


Attention: Desheng Wang


Chief Executive Officer

Email: desheng@focusuniversal.com


 


with a copy (which shall not constitute notice)
to:


 


Wilson Bradshaw LLP


18818 Teller Avenue, Suite 115


Irvine, CA 92612


Attention: Gilbert J. Bradshaw


Telephone: (805) 807-2277


Email: gbradshaw@wbc-law.com


 


Each party may change such
address for notices by sending to the other party to this Agreement written notice of a new address for such purpose. Each such notice
or other communication shall be deemed given (i) when delivered personally or by verifiable electronic transmission (with an original
to follow) on or before 4:30 p.m., New York City time, on a Business Day or, if such day is not a Business Day, on the next succeeding
Business Day, (ii) on the next Business Day after timely delivery to a nationally-recognized overnight courier and (iii) on the Business
Day actually received if deposited in the U.S. mail (certified or registered mail, return receipt requested, postage prepaid). For purposes
of this Agreement, “Business Day” shall mean any day on which the Exchange and commercial banks in the City
of New York are open for business.


 


An electronic communication
(“Electronic Notice”) shall be deemed written notice for purposes of this Section 12 if sent to the electronic
mail address specified by the receiving party under separate cover. Electronic Notice shall be deemed received at the time the party sending
Electronic Notice receives confirmation of receipt by the receiving party (other than pursuant to auto-reply). Any party receiving Electronic
Notice may request and shall be entitled to receive the notice on paper, in a nonelectronic form (“Nonelectronic Notice”)
which shall be sent to the requesting party within ten (10) days of receipt of the written request for Nonelectronic Notice.


 


13. Successors and Assigns.
This Agreement shall inure to the benefit of and be binding upon the Company and the Sales Agent and their respective successors and permitted
assigns and, as to Sections 5(b) and 9, the other indemnified parties specified therein. References to any of the parties
contained in this Agreement shall be deemed to include the successors and permitted assigns of such party. Nothing in this Agreement,
express or implied, is intended to confer upon any other person any rights, remedies, obligations or liabilities under or by reason of
this Agreement, except as expressly provided in this Agreement. Neither party may assign its rights or obligations under this Agreement
without the prior written consent of the other party; provided, however, that the Sales Agent may assign its rights and
obligations hereunder to an affiliate of the Sales Agent without obtaining the Company’s consent.


 


14. Adjustments for Share
Splits. The parties acknowledge and agree that all share-related numbers contained in this Agreement shall be adjusted to take into
account any share split, share dividend or similar event effected with respect to the Common Stock.


 


 


 






    	 	26	 



     


    

 


15. Entire Agreement; Amendment;
Severability. This Agreement (including all schedules and exhibits attached hereto and Placement Notices issued pursuant hereto),
the letter agreement dated August 3, 2022 entered into by and between the Company and the Sales Agent (including all schedules thereto)
and any other writing entered into by the parties relating to this Agreement constitutes the entire agreement and supersedes all other
prior and contemporaneous agreements and undertakings, both written and oral, among the parties hereto with regard to the subject matter
hereof. Neither this Agreement nor any term hereof may be amended except pursuant to a written instrument executed by the Company and
the Sales Agent. 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 as written by a court of competent jurisdiction, then such provision shall be given full force
and effect to the fullest possible extent that it is valid, legal and enforceable, and the remainder of the terms and provisions herein
shall be construed as if such invalid, illegal or unenforceable term or provision was not contained herein, but only to the extent that
giving effect to such provision and the remainder of the terms and provisions hereof shall be in accordance with the intent of the parties
as reflected in this Agreement.


 


16. Applicable Law; Consent
to Jurisdiction. This Agreement shall be governed by, and construed in accordance with, the internal laws of the State of Delaware,
without regard to the principles of conflicts of laws. Each party hereby irrevocably submits to the non-exclusive jurisdiction of the
state and federal courts sitting in Los Angeles, California for the adjudication of any dispute hereunder or in connection with any transaction
contemplated hereby, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or
that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process and consents
to process being served in any such suit, action or proceeding by mailing a copy thereof (certified or registered mail, return receipt
requested) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute
good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve
process in any manner permitted by law.


 


17. Waiver of Jury Trial.
The Company and the Sales Agent each hereby irrevocably waives any right it may have to a trial by jury in respect of any claim based
upon or arising out of this Agreement or any transaction contemplated hereby.


 


18. Absence of Fiduciary
Relationship. The Company acknowledges and agrees that:


 


(a) the Sales Agent is acting
solely as agent in connection with the sale of the Placement Shares contemplated by this Agreement and the process leading to such transactions,
and no fiduciary or advisory relationship between the Company or any of its respective affiliates, stockholders (or other equity holders),
creditors or employees or any other party, on the one hand, and the Sales Agent, on the other hand, has been or will be created in respect
of any of the transactions contemplated by this Agreement, irrespective of whether the Sales Agent has advised or is advising the Company
on other matters, and the Sales Agent has no obligation to the Company with respect to the transactions contemplated by this Agreement,
except the obligations expressly set forth in this Agreement;


 


(b) the Company is capable
of evaluating and understanding and understands and accepts the terms, risks and conditions of the transactions contemplated by this Agreement;


 


(c) the Sales Agent has not
provided any legal, accounting, regulatory or tax advice with respect to the transactions contemplated by this Agreement, and the Company
has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate;


 


(d) the Company has been advised
and is aware that the Sales Agent and its affiliates are engaged in a broad range of transactions which may involve interests that differ
from those of the Company and that the Sales Agent has no obligation to disclose such interests and transactions to the Company by virtue
of any fiduciary, advisory or agency relationship; and


 


 


 






    	 	27	 



     


    

 


(e) the Company waives, to
the fullest extent permitted by law, any claims it may have against the Sales Agent, for breach of fiduciary duty or alleged breach of
fiduciary duty in connection with the sale of Placement Shares under this Agreement and agrees that the Sales Agent shall have no liability
(whether direct or indirect, in contract, tort or otherwise) to the Company in respect of such a fiduciary claim or to any person asserting
a fiduciary duty claim on behalf of or in right of the Company, including stockholders, partners, employees or creditors of the Company,
other than in respect of the Sales Agent’s obligations under this Agreement and to keep information provided by the Company to the
Sales Agent and its counsel confidential to the extent not otherwise publicly available.


 


19. Use of Information.
The Sales Agent may not provide any information gained in connection with this Agreement and the transactions contemplated by this Agreement,
including due diligence, to any third party other than its legal counsel advising it on this Agreement unless expressly approved by the
Company in writing.


 


20. Counterparts. This
Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute
one and the same instrument. Delivery of an executed Agreement by one party to the other may be made by electronic transmission.


 


21. Effect of Headings;
Knowledge of the Company. The section and Exhibit headings herein are for convenience only and shall not affect the construction hereof.
All references in this Agreement to the “knowledge of the Company” or the “Company’s knowledge” or similar
qualifiers shall mean the actual knowledge of the directors and officers of the Company, after due inquiry. The word “including”
shall mean including without limitation.


 


22. Definitions. As
used in this Agreement, the following term has the meaning set forth below:


 


(a) “Applicable Time”
means the date of this Agreement, each Representation Date, each date on which a Placement Notice is given, each Point of Sale, and each
Settlement Date.


 


[Remainder of Page Intentionally Blank]


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 






    	 	28	 



     


    

 


If the foregoing correctly
sets forth the understanding between the Company and the Sales Agent, please so indicate in the space provided below for that purpose,
whereupon this letter shall constitute a binding agreement between the Company and the Sales Agent.


 


	 	Very truly yours,
	 	 
	 	
     

    FOCUS UNIVERSAL INC.

	 	 	 
	 	
     

     

    By:
	/s/ Desheng Wang
	 	 	Name: Desheng Wang
	 	 	Title: Chief Executive Officer
	 	 	 
	 	
     

     

     

    ACCEPTED as of the date first-above written:

	 	 	 
	 	SUTTER SECURITIES, INC.
	 	 
	 	
     

     

    By:
	/s/ Keith Moore
	 	 	Name: Keith Moore
	 	 	Title: Chief Executive Officer


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 






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