FORM OF CONVERSION AGREEMENT, NOTE.

EXHIBIT 10.1

CONVERSION AGREEMENT

 

THIS CONVERSION AGREEMENT (this “Agreement”) is made and entered into as of
October 24, 2019, between Kid Castle Educational Corp. ., a Delaware corporation
(“KDCE”), and Poverty Solutions Inc., the assignee, undersigned holder (“Note
Holder”) of a convertible note in the amount of $240,000 (the “Note”).

 

RECITALS

 

WHEREAS, the Note held by Holder is convertible into shares of KDCE common stock
(at $0.0001 conversion rate, but not to exceed 9.99% of outstanding shares at
the time of conversion), no par value per share (the “Common Stock”), at the
option of Holder, pursuant to, and subject to the limitations set forth in, the
Convertible Loan Agreement of KDCE (“CLA”);

 

WHEREAS, the shares of Note is entitled to certain registration rights as set
forth in the Convertible Loan Agreement; and

 

WHEREAS, Holder and KDCE desire to enter into this Agreement to provide for the
conversion of the Note held by Holder in exchange for 10 million shares of
common stock of KDCE to Holder;

 

NOW, THEREFORE, for good and valuable consideration the receipt and sufficiency
of which is hereby acknowledged, the parties hereto hereby agree as follows:

 

1. Election to Convert.

 

                        a. Holder hereby elects to convert the entire Note held
by Holder into 10 million shares of Common Stock in accordance with Convertible
Loan Agreement.  

 

                        b. The conversion of Note contemplated hereby shall be
effective immediately or upon the date on which KDCE amends its articles of
incorporation to increase the number of authorized shares of Common Stock to a
number of shares sufficient to permit the conversion of the Note (the “Effective
Date”).

 

c. In connection with the election made by Holder hereby, Holder is delivering
with this executed Agreement (i) an executed conversion notice (“Conversion
Notice”) which constitutes the written instructions which Holder is required to
deliver to KDCE in connection with the conversion of the shares of Note held by
Holder and (ii) the certificates evidencing Note issued to Holder by KDCE.

 

2. Consideration. As consideration for Holder’s election to convert entire Note
held by Holder as contemplated hereby, KDCE hereby agrees to issue to the
account of Holder, 10 million shares of the Common Stock issuable to Holder in
connection with such conversion, with such shares having the same limitations,
qualifications and restrictions as, and otherwise being identical in scope and
all other respects to, all the issued and outstanding shares of common stocks of
KDCE. 

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            3. Issuance of shares of Common Stock. KDCE shall cause to be issued
and delivered to Holder a certificate representing 10 million shares of Common
Stock issuable upon conversion of the shares of the Note held by Holder being
converted hereby as soon as practicable after the Effective Date.

 

            4. Restricted Securities. Holder hereby understands, acknowledges
and agrees that the shares of Common Stock issuable upon conversion of the
shares of the Note held by Holder being converted hereby shall constitute
“restricted securities” within the meaning of the Securities Act of 1933, as
amended, and may only be disposed of in compliance with state and federal
securities laws. The certificates representing such shares of Common Stock shall
bear a legend to such effect.

 

            5. Further Assurances. Each of Holder and KDCE agrees that it will
make, execute and deliver any and all such other instruments, instructions and
documents and will do and perform any and all such further acts as shall become
necessary, proper or convenient to carry out or effectuate the respective
covenants, promises and undertakings set forth herein.

 

6. Enforceability. If and to the extent any provision herein is held invalid or
unenforceable at law, then such provision will be deemed stricken from this
Agreement and the remainder of the Agreement will continue in effect and be
valid and enforceable to the fullest extent permitted by law.

 

7. Governing Law. This Agreement shall be deemed executed in the State of
California and is to be governed by and construed under Delaware law, without
regard to its choice of law provisions.

 

            8. Entire Agreement. This Agreement (along with the Conversion
Notice) is the entire agreement between Holder and KDCE and may not be modified
or amended except by a written instrument signed by each of Holder and KDCE.
Each of Holder and KDCE has read this Agreement, understands it and agrees to be
bound by its terms and conditions. There are no understandings with respect to
the subject matter hereof, express or implied, that are not stated herein. This
Agreement may be executed in counterparts, and signatures exchanged by facsimile
or other electronic means are effective for all purposes hereunder to the same
extent as original signatures.

 

 

 

 

 

 

 

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            IN WITNESS WHEREOF, each of the parties hereto has executed and
delivered this Agreement or caused this Agreement to be executed and delivered
by its duly authorized representative, all as of the day and year first written
above.

 

 

             

HOLDER:

 

 Poverty Solutions, Inc.

  

Kid Castle Educational Corp.

       

Signature:

 

  // Ambrose O Egbuonu

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By:

 

 // Frank I Igwealor

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Frank I Igwealor, JD, CPA, CMA, CFM

Print

 

 

  

Its:

 

Chief Executive Officer

Name:

 

 Ambrose O Egbuonu

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Title:

 

Chairman of the Governing Board

  

 

 

 

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             (if Holder is not a Natural Person)

  

 

 

 

               

                                     

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CONVERSION NOTICE

 

Reference is made to that certain Conversion Agreement dated as of October 24,
2019 (the “Conversion Agreement”), between the undersigned (“Holder”) and Kid
Castle Educational Corp., a Delaware corporation (“KDCE”). Capitalized terms
used herein but not otherwise defined herein shall have the meanings ascribed to
such terms as set forth in the Conversion Agreement.

Holder hereby elects to convert, as of the Effective Date, the Note held by
Holder into 10 million shares of Common Stock in accordance with the terms of
the Conversion Agreement and the Convertible Loan Agreement. Such shares of
Common Stock issuable in connection with this Conversion Notice and the
Conversion Agreement (the “Shares”) shall be issued in the name of Poverty
Solutions, Inc., the Holder, and certificates representing the Shares shall
delivered to the address of Holder as such information appears on the Note
register maintained by KDCE. Holder is also delivering herewith a copy of the
documents evidencing the Note which have been issued to Holder by KDCE and which
is being converted hereby.

Holder hereby represents and warrants to KDCE that Holder is an “accredited
investor” under Rule 501(a) promulgated under the Securities Act of 1933, as
amended (the “Securities Act”).

Holder hereby covenants and agrees that Holder (i) will not sell or otherwise
dispose of the Shares except pursuant to an effective registration statement
(the “Registration Statement”) under the Securities Act, (ii) will sell the
Shares only in accordance with the Plan of Distribution set forth in the
prospectus forming a part of the Registration Statement (the (“Prospectus”),
(iii) will comply with the requirements of the Securities Act when selling or
otherwise disposing of the Shares, including, but not limited to, the prospectus
delivery requirements of the Securities Act, (iv) will not sell or otherwise
dispose of any certificates representing the Shares, upon notice from KDCE that
the Prospectus may not be used for the sale of the Shares.

     

HOLDER:     Poverty Solutions, Inc.

Signature:

 

 // Ambrose O Egbuonu

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Print Name:

 

 Ambrose O Egbuonu

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Title:

 

Chairman of the Governing Board

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                                 (if Holder is not a Natural Person)