Document:

Exhibit 10.6

ASSIGNMENT OF RENTS

RECORDATION REQUESTED BY:

COULEE BANK

St. Paul Office

1516 Losey Boulevard S

P.O. Box 845

La Crosse, WI 54601

 

WHEN RECORDED MAIL TO:

COULEE BANK

1516 Losey Boulevard S, P.O. Box 845 La Crosse, WI 54601

 

 

 

 

 

 

THIS ASSIGNMENT OF RENTS dated December 10, 2021, is made and executed between Image Sensing Systems, Inc.; a Minnesota Corporation (referred to below as "Grantor") and COULEE BANK, whose address is 1516 Losey Boulevard S, P.O. Box 845, La Crosse, WI 54601 (referred to below as "Lender").

 

ASSIGNMENT. For valuable consideration, Grantor hereby assigns, grants a continuing security interest in, and conveys to Lender all of Grantor's right, title, and interest in and to the Rents from the following described Property located in Hennepin County, State of Minnesota:

 

The Northeasterly 46 feet measured front and rear of Lot 40, Auditor's Subdivision No. 30, Hennepin County, Minn.

Torrens Property

Certificate of Title No(s): 1103542

The Property or its address is commonly known as 1115 Hennepin Ave, Minneapolis, MN 55403. The Property tax identification number is 27-029-24-21-0013.

CROSS-COLLATERALIZATION. In addition to the Note, this Assignment secures all obligations, debts and liabilities, plus interest thereon, of Grantor to Lender, or any one or more of them, as well as all claims by Lender against Grantor or any one or more of them, whether now existing or hereafter arising, whether related or unrelated to the purpose of the Note, whether voluntary or otherwise, whether due or not due, direct or indirect, determined or undetermined, absolute or contingent, liquidated or unliquidated, whether Grantor may be liable individually or jointly with others, whether obligated as guarantor, surety, accommodation party or otherwise, and whether recovery upon such amounts may be or hereafter  may become barred by any statute of limitations, and whether the obligation  to repay such amounts may be or hereafter may become otherwise unenforceable.

 

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THIS ASSIGNMENT IS GIVEN TO SECURE (1) PAYMENT OF THE INDEBTEDNESS AND (2) PERFORMANCE OF ANY AND ALL OBLIGATIONS OF GRANTOR UNDER THE NOTE, THIS ASSIGNMENT, AND THE RELATED DOCUMENTS. THIS ASSIGNMENT IS GIVEN AND ACCEPTED ON THE FOLLOWING TERMS:

PAYMENT AND PERFORMANCE. Except as otherwise provided in this Assignment or any Related Documents, Grantor shall pay to Lender all amounts secured by this Assignment as they become due, and shall strictly perform all of Grantor's obligations under this Assignment. Unless and until Lender exercises its right to collect the Rents as provided below and so long as there is no default under this Assignment, Grantor may remain in possession and control of and operate and manage the Property and collect the Rents, provided that the granting of the right to collect the Rents shall not constitute Lender's consent to the use of cash collateral in a bankruptcy proceeding.

GRANTOR'S REPRESENTATIONS AND WARRANTIES. Grantor warrants that:

Ownership. Grantor is entitled to receive the Rents free and clear of all rights, loans, liens, encumbrances, and claims except as disclosed to and accepted by Lender in writing.

Right to Assign. Grantor has the full right, power and authority to enter into this Assignment and to assign and convey the Rents to Lender.

No Prior Assignment. Grantor has not previously assigned or conveyed the Rents to any other person by any instrument now in force.

No Further Transfer. Grantor will not sell, assign, encumber, or otherwise dispose of any of Grantor's rights in the Rents except as provided in this Assignment.

LENDER'S RIGHT TO RECEIVE AND COLLECT RENTS. This Assignment shall constitute an actual and present assignment, provided that the Grantor shall have a license to collect, but not prior to accrual, all of the Rents and to retain, use and enjoy the same unless and until an Event of Default as defined herein has occurred. For this purpose, Lender is hereby given and granted the following rights, powers and authority upon an Event of Default:

Notice to Tenants. Lender may send notices to any and all tenants of the Property advising them of this Assignment and directing all Rents to be paid directly to Lender or Lender's agent.

Enter the Property. Lender may enter upon and take possession of the Property; demand, collect and receive from the tenants or from any other persons liable therefor, all of the Rents; institute and carry on all legal proceedings necessary for the protection of the Property, including such proceedings as may be necessary to recover possession of the Property; collect the Rents and remove any tenant or tenants or other persons from the Property.

Maintain the Property. Lender may enter upon the Property to maintain the Property and keep the same in repair; to pay the costs thereof and of all services of all employees, including their equipment, and of all continuing costs and expenses of maintaining the Property in proper repair and condition, and also to pay all taxes, assessments and water utilities, and the premiums on fire and other insurance effected by Lender on the Property.

Compliance with Laws. Lender may do any and all things to execute and comply with the laws of the State of Minnesota and also all other laws, rules, orders, ordinances and requirements of all other governmental agencies affecting the Property.

Lease the Property. Lender may rent or lease the whole or any part of the Property for such term or terms and on such conditions as Lender may deem appropriate.

Employ Agents. Lender may engage such agent or agents as Lender may deem appropriate, either in Lender's name or in Grantor's name, to rent and manage the Property, including the collection and application of Rents.

Other Acts. Lender may do all such other things and acts with respect to the Property as Lender may deem appropriate and may act exclusively and solely in the place and stead of Grantor and to have all of the powers of Grantor for the purposes stated above.

No Requirement to Act. Lender shall not be required to do any of the foregoing acts or things, and the fact that Lender shall have performed one or more of the foregoing acts or things shall not require Lender to do any other specific act or thing.

APPLICATION OF RENTS.  Lender will first apply any Rents Lender receives in the order prescribed by Minn. Stat. Section 576.25, Subd. 2, as amended, including expenses for the Property's normal maintenance, and then, at Lender's sole discretion, to the Indebtedness and any other costs of managing, protecting and preserving the Property. All costs and expenses incurred by Lender in connection with the Property shall be for Grantor's account and Lender may pay such costs and expenses from the Rents. Lender, in its sole discretion, shall determine the application of any and all Rents received by it after payment of the foregoing expenses. All expenditures made by Lender under this Assignment and not reimbursed from the Rents shall become a part of the Indebtedness secured by this Assignment, and shall be payable on demand, with interest at the interest rate set forth in the Note from date of expenditure until paid.

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FULL PERFORMANCE.  If Grantor pays all of the Indebtedness when due and otherwise performs all the obligations imposed upon Grantor under this Assignment, the Note, and the Related Documents, Lender shall execute and deliver to Grantor a suitable satisfaction of this Assignment and suitable statements of termination of any financing statement on file evidencing Lender's security interest in the Rents and the Property. Any termination fee required by law shall be paid by Grantor, if permitted by applicable law.

LENDER'S EXPENDITURES. If any action or proceeding is commenced that would materially affect Lender's interest in the Property or if Grantor fails to comply with any provision of this Assignment or any Related Documents, including but not limited to Grantor's failure to discharge or pay when due any amounts Grantor is required to discharge or pay under this Assignment or any Related Documents, Lender on Grantor's behalf may (but shall not be obligated to) take any action that Lender deems appropriate, including but not limited to discharging or paying all taxes, liens, security interests, encumbrances and other claims, at any time levied or placed on the Rents or the Property and paying all costs for insuring, maintaining and preserving the Property.  All such expenditures incurred or paid by Lender for such purposes will then bear interest at the rate charged under the Note from the date incurred or paid by Lender to the date of repayment by Grantor. All such expenses will become a part of the Indebtedness and, at Lender's option, will (A)  be payable on demand;  (B)  be added to the balance of the Note and be apportioned among and be payable with any installment payments to become due during either

(1)  the term of any applicable insurance policy; or  (2)  the remaining term of the Note; or   (C)  be treated as a balloon payment which will be due and payable at the Note's maturity.   The Assignment also will secure payment of these amounts.  Such right shall be in addition to all other rights and remedies to which Lender may be entitled upon the occurrence of any Event of Default.

DEFAULT. Each of the following, at Lender's option, shall constitute an Event of Default under this Assignment:

Payment Default. Grantor fails to make any payment when due under the Indebtedness.

Other Defaults. Grantor fails to comply with or to perform any other term, obligation, covenant or condition contained in this Assignment or in any of the Related Documents or to comply with or to perform any term, obligation, covenant or condition contained in any other agreement between Lender and Grantor.

Default on Other Payments. Failure of Grantor within the time required by this Assignment to make any payment for taxes or insurance, or any other payment necessary to prevent filing of or to effect discharge of any lien.

Default in Favor of Third Parties. Grantor defaults under any loan, extension of credit, security agreement, purchase or sales agreement, or any other agreement, in favor of any other creditor or person that may materially affect any  of Grantor's property or ability to perform Grantor's obligations under this Assignment or any of the Related Documents.

False Statements.  Any warranty, representation or statement made or furnished to Lender by Grantor or on Grantor's behalf under this Assignment or the Related Documents is false or misleading in any material respect, either now or at the time made or furnished or becomes false or misleading at any time thereafter.

Defective Collateralization. This Assignment or any of the Related Documents ceases to be in full force and effect (including failure of any collateral document to create a valid and perfected security interest or lien) at any time and for any reason.

Insolvency. The dissolution or termination of Grantor's existence as a going business, the insolvency of Grantor, the appointment of a receiver for any part of Grantor's property, any assignment for the benefit of creditors, any type of creditor workout, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Grantor.

Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other method, by any creditor of Grantor or by any governmental agency against the Rents or any property securing the Indebtedness. This includes a garnishment of any of Grantor's accounts, including deposit accounts, with Lender. However, this Event of Default shall not apply if there is a good faith dispute by Grantor as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if Grantor gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion, as being an adequate reserve or bond for the dispute.

Property Damage or Loss. The Property is lost, stolen, substantially damaged, sold, or borrowed against.

Events Affecting Guarantor. Any of the preceding events occurs with respect to any guarantor, endorser, surety, or accommodation party of any of the Indebtedness  or any guarantor, endorser, surety,  or accommodation party dies  or becomes incompetent, or revokes or disputes the validity of, or liability under, any Guaranty of the Indebtedness.

Adverse Change. A material adverse change occurs in Grantor's financial condition, or Lender believes the prospect of payment or performance of the Indebtedness is impaired.

Insecurity. Lender in good faith believes itself insecure.

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RIGHTS AND REMEDIES ON DEFAULT. Upon the occurrence of any Event of Default and at any time thereafter, Lender may exercise any one or more of the following rights and remedies, in addition to any other rights or remedies provided by law:

Accelerate Indebtedness. Lender shall have the right at its option without notice to Grantor to declare the entire Indebtedness immediately due and payable, including any prepayment penalty that Grantor would be required to pay.

Collect Rents. Lender shall have the right to take possession of the Property and to collect and apply Rents, including amounts past due and unpaid, in accordance with applicable law and this Assignment, including during the entire redemption period after foreclosure of any related mortgage. If the Rents are collected by Lender, then Grantor irrevocably designates Lender as Grantor's attorney-in-fact to endorse instruments received in payment thereof in the name of Grantor and to negotiate the same and collect the proceeds. Payments by tenants or other users to Lender in response to Lender's demand shall satisfy the obligations for which the payments are made, whether or not any proper grounds for the demand existed. Lender may exercise its rights under this subparagraph either in person, by agent, or through a receiver.

Appoint Receiver. Lender, to the maximum extent permitted by law, shall be entitled, as a matter of right, to the appointment of a receiver of the Property, without notice or demand, and without regard to the adequacy of the security for the Indebtedness or the solvency of the Grantor, by an action separate from any foreclosure of any related mortgage pursuant to Minnesota Statutes Chapter 580 or pursuant to Minnesota Statutes Chapter 581, or as a part of the foreclosure action under said Chapter 581 (it being agreed that the existence of a foreclosure pursuant to said Chapter 580 or a foreclosure action pursuant to said Chapter 581 is not a prerequisite to any action for a receiver hereunder).   The receiver, who shall be an experienced property manager, shall collect (until the Indebtedness is fully paid and satisfied and, in the case of a foreclosure sale, during the entire redemption period) the Rents, and shall manage the Property, execute leases within or beyond the period of the receivership if approved by the court and apply all rents, profits and other income collected by him in the order specified below.  Notwithstanding the appointment of any receiver, Lender shall be entitled as pledgee to the possession and control of any cash, deposits or instruments at the time held by or payable or deliverable under the terms of any Related Documents to Lender. Lender shall have the right, at any time and without limitation, as provided in Minnesota Statutes, Section 582.03, to advance money to the receiver to pay any part or all of the items which the receiver should otherwise pay if cash were available from the Property and sums so advanced, with interest at the highest default rate set forth in the Note, shall be secured hereby, or if advanced during the period of redemption shall be part of the sum required to be paid to redeem from the sale. Any Rents received by the receiver hereunder shall be applied in the order prescribed by Minn. Stat. Section 576.25, Subd. 2, as amended, including but not limited to expenses for the Property's normal maintenance and reasonable receivership fees, and then against the Indebtedness if received prior to the commencement of a foreclosure, to be in such order as Lender may elect, and if received after the commencement of a foreclosure, to be applied to the amount required to be paid to effect a reinstatement prior to foreclosure sale, or, after a foreclosure sale to any deficiency and thereafter to the amount required to be paid to effect a redemption, all pursuant to Minnesota Statutes, Sections 580.30, 580.23 and 581.10, with any excess to  be  paid  to  Grantor. Provided, that if any related mortgage is not reinstated nor the Property redeemed as provided by said Sections 580.30, 580.23 or 581.10, the entire amount paid to Lender pursuant hereto shall be the property of Lender together with all or any part of the Property acquired through foreclosure.

Other Remedies. Lender shall have all other rights and remedies provided in this Assignment or the Note or by law.

Election of Remedies. Election by Lender to pursue any remedy shall not exclude pursuit of any other remedy, and an election to make expenditures or to take action to perform an obligation of Grantor under this Assignment, after Grantor's failure to perform, shall not affect Lender's right to declare a default and exercise its remedies.

Attorneys' Fees; Expenses. If Lender institutes any suit or action to enforce any of the terms of this Assignment, Lender shall be entitled to recover such sum as the court may adjudge reasonable as attorneys' fees at trial and upon any appeal. Whether or not any court action is involved, and to the extent not prohibited by law, all reasonable expenses Lender incurs that in Lender's opinion are necessary at any time for the protection of its interest or the enforcement of its rights shall become a part of the Indebtedness payable on demand and shall bear interest at the Note rate from the date of the expenditure until repaid. Expenses covered by this paragraph include, without limitation, however subject to any limits under applicable law, Lender's reasonable attorneys' fees and Lender's legal expenses, whether or not there is a lawsuit, including reasonable attorneys' fees and expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay  or injunction), appeals, and any anticipated  post-judgment collection services, the cost of searching records, obtaining title reports (including foreclosure reports), surveyors' reports, and appraisal fees, title insurance, and fees for the Trustee, to the extent permitted by applicable law. Grantor also will pay any court costs, in addition to all other sums provided by law.

MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Assignment:

Amendments. This Assignment, together with any Related Documents, constitutes the entire understanding and agreement of the parties as to the matters set forth in this Assignment. No alteration of or  amendment to  this Assignment  shall be  effective unless given in writing and signed by the party or parties sought to be charged or bound by the alteration or amendment.

Caption Headings. Caption headings in this Assignment are for convenience purposes only and are not to be used to interpret or define the provisions of this Assignment.

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Governing Law. With respect to procedural matters related to the perfection and enforcement of Lender's rights against the Property, this Assignment will be governed by federal law applicable to Lender and to the extent not preempted by federal law, the laws of the State of Minnesota. In all other respects, this Assignment will be governed by federal law applicable to Lender and, to the extent not preempted by federal law, the laws of the State of Wisconsin without regard to its conflicts of law provisions.  However, if there ever is a question about whether any provision of this Assignment is valid or enforceable, the provision that is questioned will be governed by whichever state or federal law would find the provision to be valid and enforceable.  The loan transaction that is evidenced by the Note and this Assignment has been applied for, considered, approved and made, and all necessary loan documents have been accepted by Lender in the State of Wisconsin.

Merger.  There shall be no merger of the interest or estate created by this Assignment with any other interest or estate in the Property at any time held by or for the benefit of Lender in any capacity, without the written consent of Lender.

Interpretation. (1)  In all cases where there is more than one Borrower or Grantor, then all words used in this Assignment in the singular shall be deemed to have been used in the plural where the context and construction so require. (2) If more than one person signs this Assignment as "Grantor," the obligations of each Grantor are joint and several. This means that if Lender brings a lawsuit, Lender may sue any one or more of the Grantors.  If Borrower and Grantor are not the same person, Lender need not sue Borrower first, and that Borrower need not be joined in any lawsuit. (3) The names given to paragraphs or sections in this Assignment are for convenience purposes only. They are not to be used to interpret or define the provisions of this Assignment.

No Waiver by Lender. Lender shall not be deemed to have waived any rights under this Assignment unless such waiver is given in writing and signed by Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender of a provision of this Assignment shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that provision or any other provision of this Assignment.  No prior waiver by Lender, nor any course of dealing between Lender and Grantor, shall constitute a waiver of any of Lender's rights or of any of Grantor's obligations as to any future transactions. Whenever the consent of Lender is required under this Assignment, the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent instances where such consent is required and in all cases such consent may be granted or withheld in the sole discretion of Lender.

Notices.   Any notice required to be given under this Assignment shall be given in writing, and shall be effective when actually delivered, when actually received by telefacsimile (unless otherwise required by law), when deposited with a nationally recognized overnight courier, or, if mailed, when deposited in the United States mail, as first class, certified or registered mail postage prepaid, directed to the addresses shown near the beginning of this Assignment. Any party may change its address for notices under this Assignment by giving formal written notice to the other parties, specifying that the purpose of the notice is to change the party's address. For notice purposes, Grantor agrees to keep Lender informed at all times of Grantor's current address. Unless otherwise provided or required by law, if there is more than one Grantor, any notice given by Lender to any Grantor is deemed to be notice given to all Grantors.

Powers of Attorney. The various agencies and powers of attorney conveyed on Lender under this Assignment are granted for purposes of security and may not be revoked by Grantor until such time as the same are renounced by Lender.

Severability. If a court of competent jurisdiction finds any provision of this Assignment to be illegal, invalid, or unenforceable as to any circumstance, that finding shall not make the offending provision illegal, invalid, or unenforceable as to any other circumstance. If feasible, the offending provision shall be considered modified so that it becomes legal, valid and  enforceable.  If the  offending provision cannot be so modified, it shall be considered deleted from this Assignment. Unless otherwise required by law, the illegality, invalidity, or unenforceability of any provision of this Assignment shall not affect the legality, validity or enforceability of any other provision of this Assignment.

Successors and Assigns. Subject to any limitations stated in this Assignment on transfer of Grantor's interest, this Assignment shall be binding upon and inure to the benefit of the parties, their successors and assigns. If ownership of the Property becomes vested in a person other than Grantor, Lender, without notice to Grantor, may deal with Grantor's successors with reference to this Assignment and the Indebtedness by way of forbearance or extension without releasing Grantor from the obligations of this Assignment or liability under the Indebtedness.

Time is of the Essence. Time is of the essence in the performance of this Assignment.

Waiver of Right of Redemption. NOTWITHSTANDING ANY OF THE PROVISIONS TO THE CONTRARY CONTAINED IN THIS ASSIGNMENT, GRANTOR HEREBY WAIVES ANY AND ALL RIGHTS OF REDEMPTION FROM SALE UNDER ANY ORDER OR JUDGMENT OF FORECLOSURE ON GRANTOR'S BEHALF AND ON BEHALF OF EACH AND EVERY PERSON, EXCEPT JUDGMENT CREDITORS OF GRANTOR, ACQUIRING ANY INTEREST IN OR TITLE TO THE PROPERTY SUBSEQUENT TO THE DATE OF THIS ASSIGNMENT.

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DEFINITIONS. The following capitalized words and terms shall have the following meanings when used in this Assignment. Unless specifically stated to the contrary, all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used in the singular shall include the plural, and the plural shall include the singular, as the context may require. Words and terms not otherwise defined in this Assignment shall have the meanings attributed to such terms in the Uniform Commercial Code: 

Assignment. The word "Assignment" means this ASSIGNMENT OF RENTS, as this ASSIGNMENT OF RENTS may be amended or modified from time to time, together with all exhibits and schedules attached to this ASSIGNMENT OF RENTS from time to time.

Borrower. The word "Borrower" means Image Sensing Systems, Inc..

Event of Default. The words "Event of Default" mean any of the events of default set forth in this Assignment in the default section of this Assignment.

Grantor. The word "Grantor" means Image Sensing Systems, Inc..

Guaranty. The word "Guaranty" means the guaranty from guarantor, endorser, surety, or accommodation party to Lender, including without limitation a guaranty of all or part of the Note.

Indebtedness. The word "Indebtedness" means all principal, interest, and other amounts, costs and expenses payable under the Note or Related Documents, together with all renewals of, extensions of, modifications of, consolidations of and substitutions for the Note or Related Documents and any amounts expended or advanced by Lender to discharge Grantor's obligations or expenses incurred by Lender to enforce Grantor's obligations under this Assignment, together with interest on such amounts as  provided  in  this Assignment. Specifically, without limitation, Indebtedness includes all amounts that may be indirectly secured by the Cross-Collateralization provision of this Assignment. 

Lender. The word "Lender" means COULEE BANK, its successors and assigns.

Note.  The word "Note" means the promissory note dated December 10, 2021, in the original principal amount of $1,742,500.00 from Grantor to Lender, together with all renewals of, extensions of, modifications of, refinancings  of, consolidations of, and substitutions for the promissory note or agreement.

Property. The word "Property" means all of Grantor's right, title and interest in and to all the Property as described  in  the "Assignment" section of this Assignment.

 

Related Documents. The words "Related Documents" mean all promissory notes, credit agreements, loan agreements, environmental agreements, guaranties, security agreements, mortgages, deeds of trust, security deeds, collateral mortgages, and all other instruments, agreements and documents, whether now or hereafter existing, executed in connection with the Indebtedness.

Rents. The word "Rents" means all of Grantor's present and future rights, title and interest in, to and under any and all present and future leases, including, without limitation, all rents, revenue, income, issues, royalties, bonuses, accounts receivable, cash or security deposits, advance rentals, profits and proceeds from the Property, and other payments and benefits derived or to be derived from such leases of every kind and nature, whether due now or later, including without limitation Grantor's right to enforce such leases and to receive and collect payment and proceeds thereunder.

THE UNDERSIGNED ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS ASSIGNMENT, AND NOT PERSONALLY BUT AS AN AUTHORIZED SIGNER, HAS CAUSED THIS ASSIGNMENT TO BE SIGNED AND EXECUTED ON BEHALF OF GRANTOR ON DECEMBER 10, 2021.

 

GRANTOR:

 

	IMAGE SENSING SYSTEMS, INC.	

	By:  /s/ Frank Hallowell	

	Frank Hallowell, CFO of Image Sensing Systems, Inc.	

 

 

 

 

This ASSIGNMENT OF RENTS was drafted by:

Angel Belke, Loan Processing Specialist COULEE BANK

1516 Losey Boulevard S La Crosse, WI 54601Exhibit 4.2

 

DESCRIPTION
OF SECURITIES

REGISTERED
PURSUANT TO SECTION 12 OF THE SECURITIES

EXCHANGE
ACT OF 1934, AS AMENDED

 

The
following is a brief description of shares of common stock (“common stock”) of Fortune Valley Treasures, Inc. (“we,”
“our,” “us” or the “Company”). The brief description is based upon our Articles of Incorporation,
including the Certificate of Change to our Articles of Incorporation, (as amended, our “Articles of Incorporation”), our
Bylaws (our “Bylaws”), and provisions of applicable Nevada law. This summary does not purport to be complete and is subject
to, and qualified in its entirety by, the full text of our Articles of Incorporation and Bylaws, each of which is herein incorporated
by reference.

 

GENERAL

 

Our
Articles of Incorporation authorizes us to issue up to 150,000,000 shares of capital stock, par value $0.001 per share, of which 15,655,038
shares of common were issued and outstanding as of the date hereof. Our Articles of Incorporation authorizes our board of directors to
determine, at any time and from time to time, the number of authorized shares, as described below.

 

COMMON
STOCK

 

Holders
of common stock are entitled to one vote per share on all matters submitted to a vote of the stockholders. Our holders of common stock
do not have cumulative voting rights. Holders of common stock will be entitled to receive ratably such dividends as may be declared by
the board out of funds legally available therefor, which may be paid in cash, property, or in shares of the Company’s capital stock.
Upon liquidation, dissolution or winding up of the Company, either voluntarily or involuntarily, the holders of common stock will be
entitled to receive their ratable share of the net assets of the Company legally available for distribution after payment of all debts
and other liabilities. There are no conversion, preemptive or other subscription rights and there are no sinking fund or redemption provisions
applicable to the common stock.

 

DIVIDENDS

 

We
have not declared or paid any dividends on our common stock since our inception and do not anticipate paying dividends for the foreseeable
future. The payment of dividends is subject to the discretion of our board and will depend, among other things, upon our earnings,
our capital requirements, our financial condition, and other relevant factors. We intend to reinvest any earnings in the development
and expansion of our business. Any cash dividends in the future to common stockholders will be payable when, as and if declared by our
board, based upon the board’s assessment of our financial condition and performance, earnings, need for funds, capital requirements,
prior claims of preferred stock to the extent issued and outstanding, and other factors, including income tax consequences, restrictions
and applicable laws. There can be no assurance, therefore, that any dividends on our common stock will ever be paid.

 

ANTI-TAKEOVER
EFFECTS OF PROVISIONS OF OUR ARTICLES OF INCORPORATION, BYLAWS AND NEVADA LAW

 

The
following is a brief description of the provisions in our Articles of Incorporation, Bylaws and Nevada Law that could have an effect
of delaying, deferring, or preventing a change in control of the Company.

 

Anti-Takeover
Effects of Nevada Law

 

Business
Combinations

 

We
are a Nevada corporation and are generally governed by the Nevada Private Corporations Code, Title 78 of the Nevada Revised Statutes,
or NRS.

 

    	 

     

    

 

The
“business combination” provisions of Sections 78.411 to 78.444, inclusive, of the NRS, generally prohibit a Nevada corporation
with at least 200 stockholders from engaging in various “combination” transactions with any interested stockholder for a
period of two years after the date of the transaction in which the person became an interested stockholder, unless the transaction is
approved by the board of directors prior to the date the interested stockholder obtained such status or the combination is approved by
the board of directors and thereafter is approved at a meeting of the stockholders by the affirmative vote of stockholders representing
at least 60% of the outstanding voting power held by disinterested stockholders, and extends beyond the expiration of the two-year period,
unless:

 

●
the combination was approved by the board of directors prior to the person becoming an interested stockholder or the transaction by which
the person first became an interested stockholder was approved by the board of directors before the person became an interested stockholder
or the combination is later approved by a majority of the voting power held by disinterested stockholders; or

 

●
consideration to be paid by the interested stockholder is at least equal to the highest of: (a) the highest price per share paid by the
interested stockholder within the two years immediately preceding the date of the announcement of the combination or in the transaction
in which it became an interested stockholder, whichever is higher, (b) the market value per share of common stock on the date of announcement
of the combination and the date the interested stockholder acquired the shares, whichever is higher, or (c) for holders of preferred
stock, the highest liquidation value of the preferred stock, if it is higher.

 

A
“combination” is generally defined to include mergers or consolidations or any sale, lease exchange, mortgage, pledge, transfer,
or other disposition, in one transaction or a series of transactions, with an “interested stockholder” having: (a) an aggregate
market value equal to 5% or more of the aggregate market value of the assets of the corporation, (b) an aggregate market value equal
to 5% or more of the aggregate market value of all outstanding shares of the corporation, (c) 10% or more of the earning power or net
income of the corporation, and (d) certain other transactions with an interested stockholder or an affiliate or associate of an interested
stockholder.

 

In
general, an “interested stockholder” is a person who, together with affiliates and associates, owns (or within two years,
did own) 10% or more of a corporation’s voting stock. The statute could prohibit or delay mergers or other takeover or change in
control attempts and, accordingly, may discourage attempts to acquire our Company even though such a transaction may offer our stockholders
the opportunity to sell their stock at a price above the prevailing market price.

 

Control
Share Acquisitions

 

The
“control share” provisions of Sections 78.378 to 78.3793, inclusive, of the NRS apply to “issuing corporations”
that are Nevada corporations with at least 200 stockholders, including at least 100 stockholders of record who are Nevada residents,
and that conduct business directly or indirectly in Nevada. The control share statute prohibits an acquirer, under certain circumstances,
from voting its shares of a target corporation’s stock after crossing certain ownership threshold percentages, unless the acquirer
obtains approval of the target corporation’s disinterested stockholders. The statute specifies three thresholds: one-fifth or more
but less than one-third, one-third but less than a majority, and a majority or more, of the outstanding voting power.

 

Generally,
once an acquirer crosses one of the above thresholds, those shares in an offer or acquisition and acquired within 90 days thereof become
“control shares” and such control shares are deprived of the right to vote until disinterested stockholders restore the right.
These provisions also provide that if control shares are accorded full voting rights and the acquiring person has acquired a majority
or more of all voting power, all other stockholders who do not vote in favor of authorizing voting rights to the control shares are entitled
to demand payment for the fair value of their shares in accordance with statutory procedures established for dissenters’ rights.

 

A
corporation may elect to not be governed by, or “opt out” of, the control share provisions by making an election in its articles
of incorporation or bylaws, provided that the opt-out election must be in place on the 10th day following the date an acquiring person
has acquired a controlling interest, that is, crossing any of the three thresholds described above. We have not opted out of the control
share statutes, and will be subject to these statutes if we are an “issuing corporation” as defined in such statutes.

 

The
effect of the Nevada control share statutes is that the acquiring person, and those acting in association with the acquiring person,
will obtain only such voting rights in the control shares as are conferred by a resolution of the stockholders at an annual or special
meeting. The Nevada control share law, if applicable, could have the effect of discouraging takeovers of our Company.

 

    	 

     

    

 

Number
of Directors; Vacancies; Removal

 

Our
Bylaws provide that our board may increase or decrease the number of directors or by stockholders at any meeting. Any vacancy
on the board may be filled by the affirmative vote of a majority of the remaining directors though less than a quorum of the board.
A director elected to fill a vacancy shall be elected for the unexpired term of his predecessor in office, and shall hold such office
until his successor is duly elected and qualified. Any directorship to be filled by reason of an increase in the number of directors
shall be filled by the affirmative vote of a majority of the directors then in office or by an election at an annual meeting, or at a
special meeting of stockholders called for that purpose. A director chosen to fill a position resulting from an increase in the number
of directors shall hold office only until the next election of directors by the stockholder.

 

Our
Bylaws provide that any director or directors of the corporation may be removed from office at any time, with or without cause, by the
vote or written consent of stockholders representing not less than a majority of the issued and outstanding capital stock entitled to
voting power.

 

Authorized
Shares

 

Without
any action by our shareholders, we may increase or decrease the aggregate number of shares or the number of shares of any class we have
authority to issue at any time. The board shall have authority to establish more than one class or series of shares of this corporation,
and the different classes and series shall have such relative rights and preferences, with such designations, as the board may by resolution
provide. Issuance of such a new class or series could, depending upon the terms of the class or series, delay, defer, or prevent a change
of control of the Company.

 

Advance
Notice Requirements for Stockholder Proposals and Director Nominations

 

Our
Bylaws contain advance notice provisions that a stockholder must follow if it intends to bring business proposals or director nominations,
as applicable, before a meeting of stockholders. These provisions may preclude our stockholders from bringing matters before the annual
meeting of stockholders or from making nominations at the annual meeting of stockholders.

 

No
Cumulative Voting

 

Holders
of our common shares do not have cumulative voting rights in the election of directors. The absence of cumulative voting may make it
more difficult for shareholders owning less than a majority of our common shares to elect any directors to our board.

 

LIMITATION
ON LIABILITY AND INDEMNIFICATION OF DIRECTORS AND OFFICERS

 

Section
78.138 of the NRS provides that, unless the corporation’s articles of incorporation provide otherwise, a director or officer will
not be individually liable unless it is proven that (i) the director’s or officer’s acts or omissions constituted a breach
of his or her fiduciary duties, and (ii) such breach involved intentional misconduct, fraud, or a knowing violation of the law.

 

Section
78.7502 of the NRS permits a company to indemnify its directors and officers against expenses, judgments, fines, and amounts paid in
settlement actually and reasonably incurred in connection with a threatened, pending, or completed action, suit, or proceeding, if the
officer or director (i) is not liable pursuant to NRS 78.138, or (ii) acted in good faith and in a manner the officer or director reasonably
believed to be in or not opposed to the best interests of the corporation and, if a criminal action or proceeding, had no reasonable
cause to believe the conduct of the officer or director was unlawful. Section 78.7502 of the NRS requires a corporation to indemnify
a director or officer that has been successful on the merits or otherwise in defense of any action or suit. Section 78.7502 of the NRS
precludes indemnification by the corporation if the officer or director has been adjudged by a court of competent jurisdiction, after
exhaustion of all appeals, to be liable to the corporation or for amounts paid in settlement to the corporation, unless and only to the
extent that the court determines that in view of all the circumstances, the person is fairly and reasonably entitled to indemnity for
such expenses and requires a corporation to indemnify its officers and directors if they have been successful on the merits or otherwise
in defense of any claim, issue, or matter resulting from their service as a director or officer.

 

    	 

     

    

 

Section
78.751 of the NRS permits a Nevada company to indemnify its officers and directors against expenses incurred by them in defending a civil
or criminal action, suit, or proceeding as they are incurred and in advance of final disposition thereof, upon determination by the stockholders,
the disinterested board members, or by independent legal counsel. If so provided in the corporation’s articles of incorporation,
bylaws, or other agreement, Section 78.751 of the NRS requires a corporation to advance expenses as incurred upon receipt of an undertaking
by or on behalf of the officer or director to repay the amount if it is ultimately determined by a court of competent jurisdiction that
such officer or director is not entitled to be indemnified by the company. Section 78.751 of the NRS further permits the company to grant
its directors and officers additional rights of indemnification under its articles of incorporation, bylaws, or other agreement.

 

Section
78.752 of the NRS provides that a Nevada company may purchase and maintain insurance or make other financial arrangements on behalf of
any person who is or was a director, officer, employee, or agent of the company, or is or was serving at the request of the company as
a director, officer, employee, or agent of another company, partnership, joint venture, trust, or other enterprise, for any liability
asserted against him and liability and expenses incurred by him in his capacity as a director, officer, employee, or agent, or arising
out of his status as such, whether or not the company has the authority to indemnify him against such liability and expenses.

 

Insofar
as indemnification for liabilities arising under the Securities Act may be permitted to the Company’s directors, officers or controlling
persons pursuant to the provisions described above, or otherwise, the Company has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.

 

Transfer
Agent and Registrar

 

The
transfer agent and registrar for our common stock is TranShare Corporation, with an address at Bayside Center 1, 17755 North US Highway
19 Suite 140, Clearwater, FL 33764, telephone number is (303) 662-1112.

 

MARKET
FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

 

Our
common stock is currently trading on the OTC Pink Open Market under the symbol “FVTI.” We intend to apply to list our common
stock on the NASDAQ Capital Market under the trading symbol “FVTI.”

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