Document:

Exhibit 10.1

 

 

NOTE AND OTHER LOAN DOCUMENTS MODIFICATION AGREEMENT

THIS NOTE AND OTHER LOAN DOCUMENTS MODIFICATION AGREEMENT (the "Agreement") made effective as of the 31st day of December, 2015 (the "Effective Date"), between REVERE HIGH YIELD FUND, LP, a Delaware limited partnership having an address of 2000 McKinney Avenue, Suite 2125, Dallas, Texas 75201, (the "Lender"), RANOR, INC., a Delaware corporation having an address of 1 Bella Drive, Westminster, Massachusetts 01473 (the "Borrower") and TECHPRECISION CORPORATION, a Delaware corporation having an address of Suite 909, 992 Old Eagle School Road, Wayne, PA 19087 (the "Guarantor").  By execution of this Agreement, Guarantor agrees and consents to be bound by all of the terms set forth herein.

W I T N E S S E T H:

WHEREAS, Lender made a loan to Borrower (the "Note A Loan") in the original principal amount of ONE MILLION FIVE HUNDRED THOUSAND AND 00/100 DOLLARS ($1,500,000.00), which Note A Loan is evidenced by a Term Note in the amount of ONE MILLION FIVE HUNDRED THOUSAND AND 00/100 DOLLARS ($1,500,000.00) from Borrower to Lender dated as of December 22, 2014 (the "Note A");

WHEREAS, Lender made a loan to Borrower (the "Note B Loan"; the Note B Loan and the Note A Loan are collectively referred to herein as the "Loan") in the original principal amount of SEVEN HUNDRED FIFTY THOUSAND AND 00/100 DOLLARS ($750,000.00), which Note B Loan is evidenced by a Term Note in the amount of SEVEN HUNDRED FIFTY THOUSAND AND 00/100 DOLLARS ($750,000.00) from Borrower to Lender dated as of December 22, 2014 (the "Note B"; Note B and Note A are collectively referred to herein as the "Note");

WHEREAS, the Note was executed in connection with and secured by, among other things, (i) that certain Term Loan and Security Agreement dated as of December 22, 2014 by and between Borrower and Lender (the "Loan Agreement"); (ii) the Guaranty; (iii) the Mortgage; (iv) the Assignment of Leases and Rents; (v) the Environmental Indemnity; and (vi) all other loan documents executed by Borrower in favor of Lender in connection with the Loan (all of the foregoing subparagraphs (i) through (vi), collectively, the "Loan Documents");

WHEREAS, all terms defined in the Loan Agreement are used herein with their defined meanings unless otherwise provided;

WHEREAS, Borrower and Lender are mutually desirous of extending the maturity date of the Note; and

NOW, THEREFORE, in consideration of One ($1.00) Dollar and other valuable consideration, each to the other in hand paid, receipt thereof being hereby acknowledged, and in consideration of the mutual covenants herein contained, the parties hereto hereby agree as follows:

 

 

 

 

 

	1.	The Maturity Date (as defined in the Loan Agreement, the Note A and the Note B) is hereby extended from December 31, 2015 to January 22, 2016. Borrower acknowledges and agrees that it hereby waives its right to extend the Maturity Date for six (6) months as is set forth in Section 2.03 of the Loan Agreement.

	2.	The Loan Agreement is hereby modified as follows:

	
a.

	
All references to the term "Note", "Note A," and "Note B" shall be deemed to mean the "Note", "Note A," and "Note B", as the case may be, as modified        by this Agreement.

	
b.

	
The term "Loan Documents" shall be deemed to mean and include the Note and all other Loan Documents as modified by this Agreement.

	3.	The other Loan Documents are hereby modified as follows:

	
a.

	
All references to the term "Note", "Note A," and "Note B" shall be deemed to mean the "Note", "Note A," and "Note B", as the case may be, as modified        by this Agreement.

	
b.

	
The term "Loan Documents" shall be deemed to mean and include the Note and all other Loan Documents as modified by this Agreement.

	4.	All of the other terms and conditions of the Loan Documents shall remain the same and in full force and effect, except as specifically amended herein. Borrower hereby reaffirms the Note, the Mortgage, the Loan Agreement and the other Loan Documents, and acknowledges that Borrower has no setoffs, counterclaims or defenses to any of the Loan Documents.

	5.	Any default by Borrower in any of the covenants herein made shall, at the option of Lender, or its successors and assigns, constitute an Event of Default under the Loan Documents entitling Lender, or its successors or assigns, to any or all of the other remedies it or they may have thereunder.

	6.	All of the Borrower Collateral (as defined in the Loan Agreement) and the Collateral (as defined in the Mortgage) shall remain in all respects subject to the lien, charge and encumbrance of the Loan Agreement and Mortgage, as the case may be, and nothing herein contained and nothing done pursuant hereto, shall affect or be construed to affect the lien, charge or encumbrance of the Loan Agreement and Mortgage, as the case may be or the priority thereof over all liens, charges or encumbrances, except as expressly provided herein.

	7.	This Agreement shall be binding upon Borrower and any subsequent owner of the Collateral or any part thereof (provided, however, that any provisions against sale or transfer contained in the Mortgage shall remain in full force and effect) and shall be binding and inure to the benefit of Lender, its successors and assigns, including any subsequent holder of the Mortgage.

 

 

 

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	8.	BORROWER, AND ANY SUBSEQUENT ENDORSER, GUARANTOR OR OTHER ACCOMMODATION MAKER, EACH HEREBY WAIVE PRESENTMENT, DEMAND FOR PAYMENT AND NOTICE OF DISHONOR, TOGETHER WITH ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION WITH RESPECT TO THE NOTE, THE MORTGAGE, THE OTHER LOAN DOCUMENTS OR THIS AGREEMENT AND AS TO ANY ISSUES ARISING RELATING TO THE NOTE, THE MORTGAGE, THE OTHER LOAN DOCUMENTS OR THIS AGREEMENT.

	9.	Guarantors hereby consent to the terms of this Agreement and reaffirm their obligations under Guaranty and the Indemnity, agree that such Guaranty and Indemnity continue to be binding and enforceable obligations of the Guarantors, and acknowledge that Borrower has no setoffs, counterclaims or defenses to any of the Guaranty or Indemnity.

	10.	This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all of which together shall constitute but one and the same Agreement.

	11.	This Agreement shall be governed and construed by and interpreted in accordance with the laws of the  Commonwealth of Massachusetts, without regard to conflict of law provisions thereof.

	12.	As a material inducement to Lender to enter into this Agreement, Borrower and Guarantor hereby acknowledge, admit, and agree that, as of the date hereof, there exist no rights of offset, defense, counterclaim, claim, or objection in favor of Borrower or Guarantor against Lender with respect to the Note, the Loan Agreement or any of the other Loan Documents, or alternatively, that any and all such rights of offset, defense, counterclaim, claim, or objection which they may have or claim, of any nature whatsoever, whether known or unknown, are hereby expressly and irrevocably waived and released.  Borrower and Guarantor hereby release and forever discharge Lender, its directors, officers, employees, administrators, subsidiaries, affiliates, attorneys, agents, successors, and assigns from any and all rights, claims, demands, actions, causes of action, suits, proceedings, agreements, contracts, judgments, damages, debts, costs, expenses, promises, agreements, duties, liabilities, or obligations, whether in law or in equity, known or unknown, choate or inchoate, which they had, now have, or hereafter may have, arising under or in any manner relating to, whether directly or indirectly, the Note, the Loan Agreement, any other Loan Document or any transaction contemplated by any Loan Document or this Agreement, from the beginning of time until the date of full execution and delivery hereof.

[Remainder of Page Intentionally Left Blank]

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IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed, sealed and delivered the day and year first above written.

LENDER:

REVERE HIGH YIELD FUND, LP,

a Delaware limited partnership

By:  Revere GP, LLC, its General Partner

By:            Revere Capital, LLC

Its:            Manager

By:            _/s/ Clark Briner________

Name:  Clark Briner

BORROWER:

RANOR, INC.,

a Delaware corporation

By:            /s/ Alexander Shen__________

            Name:            Alexander Shen

            Its:            President

GUARANTOR:

TECHPRECISION CORPORATION

a Delaware corporation

By:            /s/ Leonard M. Anthony______

            Name:            Leonard M. Anthony

            Its:            Executive Chairman

SIGANTURE PAGE TO NOTE AND OTHER LOAN DOCUMENTS MODIFICATION AGREEMENT

 

 

 

 

 

 

 

4Exhibit 10.1

 

THESE SECURITIES HAVE NOT BEEN REGISTERED
WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE OR PROVINCE IN RELIANCE UPON AN EXEMPTION
FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR ANY CANADIAN NATIONAL OR PROVINCIAL
SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OR ANY CANADIAN NATIONAL OR PROVINCIAL SECURITIES LAW OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION
NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OR ANY CANADIAN NATIONAL OR PROVINCIAL SECURITIES LAW AND IN
ACCORDANCE WITH APPLICABLE STATE OR PROVINCIAL SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. 

 

UNLESS PERMITTED UNDER SECURITIES LEGISLATION,
THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE THE DATE THAT IS 4 MONTHS AND A DAY AFTER THE LATER OF (I) [INSERT
THE DISTRIBUTION DATE], AND (II) THE DATE THE ISSUER BECAME A REPORTING ISSUER IN ANY PROVINCE OR TERRITORY.

 

Date of Issuance: _____________,
2015

 

$_________

 

YAPPN CORP.

12% SECURED CONVERTIBLE DEBENTURE

DUE __________________2020

 

THIS DEBENTURE is a duly
authorized and issued 12% Secured Debenture of Yappn Corp., a Delaware corporation, having a principal place of business at 1001
Avenue of the Americas, 11th Floor, New York, NY 10018 (the "Company"), designated as its 12% Secured Debenture,
due_______, 2020 (the "Debenture").

 

FOR VALUE RECEIVED, the
Company promises to pay to ________________________ or his registered assigns (the "Holder"), the principal sum of ____________________Dollars
($____,000) on _________, 2020 or such earlier date as the Debenture is required or permitted to be repaid as provided hereunder
(the "Maturity Date", five years form the date of issuance), and to pay interest to the Holder on the aggregate outstanding
principal amount of this Debenture at the rate of 12% per annum, payable on the Maturity Date (except that, if any such date is
not a Business Day, then such payment shall be due on the next succeeding Business Day).

 

This
Debenture is derived from a Subscription Agreement between the Holder and the Company (the “Subscription Agreement”)
dated ____ , 2015 and incorporates the terms and conditions contained in the Subscription Agreement by reference. The lead
Debenture Holder shall be Winterberry Investments Inc. (“Winterberry” or the “Lead Debenture Holder”),
including with respect to enforcement of the terms and conditions of the Debenture. The Debentures shall, however, rank equally
with one another and with the 12% Secured Debentures, dated July 15, 2015, as disclosed on the Company’s Current Report on
Form 8-K filed with the Securities and Exchange Commission on July 16, 2015.

 

     

     

    

 

This Debenture is subject
to the following additional provisions:

 

Section 1. This Debenture
is exchangeable for an equal aggregate principal amount of Debentures of different authorized denominations, as requested by the
Holder surrendering the same, subject to regulatory requirements. No service charge will be made for such registration of transfer
or exchange.

 

Section 2. This Debenture
has been issued subject to certain investment representations of the original Holder set forth in the Subscription Agreement. Interest
shall be calculated on the basis of a 360-day year, consisting of twelve 30 calendar day periods, and shall accrue daily commencing
on the Original Issue Date until payment in full of the outstanding principal, together with all accrued and unpaid interest, liquidated
damages and other amounts which may become due hereunder, has been made. Any payment hereunder will be paid to the Holder in whose
name this Debenture is registered on the records of the Company regarding registration and transfers of this Debenture (the “Debenture
Register”). Prior to due presentment to the Company for transfer of this Debenture, the Company and any agent of the
Company may treat the Holder in whose name this Debenture is duly registered on the Debenture Register as the owner hereof for
the purpose of receiving payment as herein provided and for all other purposes, whether or not this Debenture is overdue, and neither
the Company nor any such agent shall be affected by notice to the contrary.

 

Section 3. Events of Default.

 

(a) "Event of Default",
wherever used herein, means any one of the following events (whatever the reason and whether it shall be voluntary or involuntary
or effected by operation of law or pursuant to any judgment, decree or order of any court, or any order, rule or regulation of
any administrative or governmental body):

 

i) any default in the payment
of the principal of, interest (including Late Fees) on, or liquidated damages in respect of, any Debentures, free of any claim
of subordination, as and when the same shall become due and payable which default is not cured, if possible to cure, within 10
days of notice of such default sent by the Holder;

 

ii) the Company or any
of its subsidiaries shall commence, or there shall be commenced against the Company or any such subsidiary a case under any applicable
bankruptcy or insolvency laws as now or hereafter in effect or any successor thereto, or the Company commences any other proceeding
under any reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar
law of any jurisdiction whether now or hereafter in effect relating to the Company or any subsidiary thereof or there is commenced
against the Company or any subsidiary thereof any such bankruptcy, insolvency or other proceeding which remains undismissed for
a period of 60 days; or the Company or any subsidiary thereof is adjudicated insolvent or bankrupt; or any order of relief or other
order approving any such case or proceeding is entered; or the Company or any subsidiary thereof suffers any appointment of any
custodian or the like for it or any substantial part of its property which continues undischarged or unstayed for a period of 60
days; or the Company or any subsidiary thereof makes a general assignment for the benefit of creditors; or the Company shall fail
to pay, or shall state that it is unable to pay, or shall be unable to pay, its debts generally as they become due; or the Company
or any subsidiary thereof shall call a meeting of its creditors with a view to arranging a composition, adjustment or restructuring
of its debts; or the Company or any subsidiary thereof shall by any act or failure to act expressly indicate its consent to, approval
of or acquiescence in any of the foregoing; or any corporate or other action is taken by the Company or any subsidiary thereof
for the purpose of effecting any of the foregoing;

 

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iii) the Company breaches
any covenant in the Subscription Agreement or hereunder, which breach is not cured, if possible to cure, within 10 days of notice
of such breach sent by the Holder.

 

(b) If any Event of Default
occurs and is continuing, the full principal amount of this Debenture, together with interest and other amounts owing in respect
thereof, to the date of acceleration shall become at the Holder's election, immediately due and payable in cash.

 

Section 4. Conversion.

 

a)
   i) Holder's Conversion Right. At any time after the Original Issue Date until this Debenture is no longer outstanding, this Debenture,
including interest and principal, may be convertible into shares of Common Stock at a price of Twenty Fine cents ($0.25) per share
(the “Set Price”) at the option of the Holder, in whole at any time and from time to time. The Holder shall effect
conversions by delivering to the Company the form of Notice of Conversion attached hereto as Annex A (a "Notice of Conversion"),
specifying the date on which such conversion is to be effected (a "Conversion Date"). If no Conversion Date is specified
in a Notice of Conversion, the Conversion Date shall be the date that such Notice of Conversion is provided hereunder. To effect
conversions hereunder, the Holder shall not be required to physically surrender their Debenture to the Company. The Company shall
deliver any objection to any Notice of Conversion within 2 Business Days of receipt of such notice. In the event of any dispute
or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error. The
Holder and any assignee, by acceptance of this Debenture, acknowledge and agree that, by reason of the provisions of this paragraph,
following conversion of a portion of this Debenture, the unpaid and unconverted principal amount of this Debenture may be less
than the amount stated on the face hereof. 

 

ii) If the Company, at
any time while this Debenture is outstanding: (A) shall pay a stock dividend or otherwise make a distribution or distributions
on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which, for
avoidance of doubt, shall not include any shares of Common Stock issued by the Company pursuant to this Debenture, including as
interest thereon), (B) subdivide outstanding shares of Common Stock into a larger number of shares, (C) combine (including by way
of reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (D) issue by reclassification of
shares of the Common Stock any shares of capital stock of the Company, then the Set Price shall be multiplied by a fraction of
which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding before such event
and of which the denominator shall be the number of shares of Common Stock outstanding after such event. Any adjustment made pursuant
to this Section shall become effective immediately after the record date for the determination of stockholders entitled to receive
such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination
or re-classification.

 

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iii) Whenever the Set Price
is adjusted pursuant to any of Section 4, the Company shall promptly mail to each Holder a notice setting forth the Set Price after
such adjustment and setting forth a brief statement of the facts requiring such adjustment.

 

iv) If (A) the Company
shall declare a dividend (or any other distribution) on the Common Stock; (B) the Company shall declare a special nonrecurring
cash dividend on or a redemption of the Common Stock; (C) the Company shall authorize the granting to all holders of the Common
Stock rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights; (D) the approval
of any stockholders of the Company shall be required in connection with any reclassification of the Common Stock, any consolidation
or merger to which the Company is a party, any sale or transfer of all or substantially all of the assets of the Company, of any
compulsory share exchange whereby the Common Stock is converted into other securities, cash or property; (E) the Company shall
authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company; then, in each case,
the Company shall cause to be filed at each office or agency maintained for the purpose of conversion of the Debentures, and shall
cause to be mailed to the Holders at their last addresses as they shall appear upon the stock books of the Company, at least 20
calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a
record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to
be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption,
rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or
share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock
of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon
such reclassification, consolidation, merger, sale, transfer or share exchange; provided, that the failure to mail such notice
or any defect therein or in the mailing thereof shall not affect the validity of the corporate action required to be specified
in such notice. Holders are entitled to convert Debentures during the 20-day period commencing the date of such notice to the effective
date of the event triggering such notice.

 

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(d) The Company covenants
that it will at all times reserve and keep available out of its authorized and unissued shares of Common Stock solely for the purpose
of issuance upon conversion of the Debenture

 

(e) Any and all notices
or other communications or deliveries to be provided by the Holders hereunder, including, without limitation, any Notice of Conversion,
shall be in writing and delivered personally, by facsimile, sent by a nationally recognized overnight courier service, addressed
to the Company, at the address set forth or such other address or facsimile number as the Company may specify for such purposes
by notice to the Holders delivered in accordance with this Section. Any and all notices or other communications or deliveries to
be provided by the Company hereunder shall be in writing and delivered personally, by facsimile, sent by a nationally recognized
overnight courier service addressed to each Holder at the facsimile telephone number or address of such Holder appearing on the
books of the Company, or if no such facsimile telephone number or address appears, at the principal place of business of the Holder.
Any notice or other communication or deliveries hereunder shall be deemed given and effective on the earliest of (i) the date of
transmission, if such notice or communication is delivered via facsimile at the facsimile telephone number specified in this Section
prior to 5:30 p.m. (New York City time), (ii) the date after the date of transmission, if such notice or communication is delivered
via facsimile at the facsimile telephone number specified in this Section later than 5:30 p.m. (New York City time) on any date
and earlier than 11:59 p.m. (New York City time) on such date, (iii) the second Business Day following the date of mailing, if
sent by nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required
to be given.

 

Section 5. Negative Covenants.

 

This Debenture contains
the following covenants of the Company:

 

(a) that the Company will
not, and will not permit any of its subsidiaries to, directly or indirectly, issue, incur, guarantee, assume, become liable, contingently
or otherwise, with respect to or otherwise become responsible for the payment of any indebtedness except in the ordinary course
of business;

 

(b) the Company will not,
and will not permit any of its subsidiaries to, make payment of any dividend or other distribution in respect of such corporation’s
capital stock, purchase, redeem, or otherwise acquire or retire for value any capital stock, option, warrant, or any other right
to acquire shares of capital stock of such corporation, make any principal payment on, or purchase, repurchase, redeem or otherwise
acquire retire for value prior to any scheduled maturity or scheduled repayment of any indebtedness which is subordinated in right
of payment to the Debentures;

 

(c) that the Company will
not, and will not permit any of its subsidiaries to, sell any material asset of such corporation except on conditions acceptable
to the Holder or except in the ordinary course of business;

 

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(d) that the Company will
not, and will not permit any of its subsidiaries to, create, incur, assume or suffer to exist any liens upon any of their respective
properties securing any indebtedness of the Company or the subsidiaries unless such indebtedness is expressly subordinated to the
Debentures;

 

(e) that the Company will
not amalgamate, consolidate or merge with any individual, corporation, partnership, joint venture, trust, estate, unincorporated
organization or government or any agency or political subdivision thereof ("Person") or convey, transfer or lease
all or substantially all of its assets to any Person, except on conditions acceptable to the Holder or in the ordinary course of
business;

 

(f) that the Company will
not, and will not permit any of subsidiaries to, enter into any sale/leaseback transaction except on conditions acceptable to the
Holder;

  

Section 6. Definitions.
For the purposes hereof, in addition to the terms defined elsewhere in this Debenture: (a) capitalized terms not otherwise defined
herein have the meanings given to such terms in the Subscription Agreement, and (b) the following terms shall have the following
meanings:

 

"Business Day"
means any day except Saturday, Sunday and any day which shall be a federal legal holiday in the United States or a day on which
banking institutions in the State of New York are authorized or required by law or other government action to close.

 

"Common Stock"
means the common stock, $.0001 par value per share, of the Company and stock of any other class into which such shares may hereafter
have been reclassified or changed.

 

"Exchange Act"
means the Securities Exchange Act of 1934, as amended.

 

"Original Issue
Date" shall mean the date of the first issuance of the Debentures regardless of the number of transfers of any Debenture
and regardless of the number of instruments which may be issued to evidence such Debenture.

 

“VWAP”
means, for any security as of any date, the dollar volume-weighted average price for such security on the Principal Market (or,
if the Principal Market is not the principal trading market for such security, then on the principal securities exchange or securities
market on which such security is then traded) during the period beginning at 9:30:01 a.m., New York time, and ending at 4:00:00
p.m., New York time, as reported by Bloomberg through its “Volume at Price” function or, if the foregoing does not
apply, the dollar volume-weighted average price of such security in the over-the-counter market on the electronic bulletin board
for such security during the period beginning at 9:30:01 a.m., New York time, and ending at 4:00:00 p.m., New York time, as reported
by Bloomberg, or, if no dollar volume-weighted average price is reported for such security by Bloomberg for such hours, the average
of the highest closing bid price and the lowest closing ask price of any of the market makers for such security as reported in
the “pink sheets” by OTC Markets Group Inc.

 

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Section 7. The Debentures
shall be secured and supported by a first security interest in all of the assets and undertakings of the Company and its subsidiaries.

 

Section 8. Except as expressly
provided herein, no provision of this Debenture shall alter or impair the obligation of the Company, which is absolute and unconditional,
to pay the principal of, interest and liquidated damages (if any) on, this Debenture at the time, place, and rate, and in the coin
or currency, herein prescribed. This Debenture is a direct debt obligation of the Company. This Debenture ranks pari passu with
all other 12% Secured Debentures, dated July 15, 2015 as disclosed on the Company’s Current Report on Form 8-K filed with
the Securities and Exchange Commission on July 16, 2015 now or hereafter issued under the terms set forth herein. As long as this
Debenture is outstanding, the Company shall not and shall cause it subsidiaries not to, without the consent of the Holder, amend
its certificate of incorporation, bylaws or other charter documents so as to adversely affect any rights of the Holder. This Debenture
may be amended with the written consent of the holders of at least two thirds (66.67%) of the principal amount of the Debentures.
Any amendment will be submitted to the Lead Debenture Holder who will coordinate any consent, including but not limited to, notifying
all Holders within three (3) business days of a put request, providing for a meeting of Holders within ten (10) business days following
notice or preparing and distributing written consents in lieu of a meeting within ten (10) business days following notice. If the
consent requirement is satisfied, the Lead Debenture Holder will provide notice to the Company as provided in Section 11 herein.

 

Section 9. Put Provision.
A Holder shall have the right, at any time after the later of (i) six (6) months from the Original Issue Date or (ii) June 30,
2016, to require the Company to satisfy the outstanding obligations underlying this Debenture; provided, however, that the holders
of at least two thirds (66.67%) of the principal amount of the Debentures consent to a put of their Debentures. Any put request
will be submitted to the Lead Debenture Holder who will coordinate any consent, including but not limited to, notifying all Holders
within three (3) business days of a put request, providing for a meeting of Holders within ten (10) business days following notice
or preparing and distributing written consents in lieu of a meeting within ten (10) business days following notice. If the consent
requirement is satisfied, the Lead Debenture Holder will provide notice to the Company as provided in Section 11 herein. In the
event a put is made on this Debenture and the consent requirement is satisfied, the Company shall have sixty (60) days to satisfy
the put request.

 

Section 10. Prepayment.
The Company may prepay any portion of the principal amount of this Debenture together with the interest without the prior written
consent of the Holder pursuant to the following conditions: (a) for the first year following the Original Issue Date, the Company
may exercise its prepayment right at 125% of the outstanding principal amount of this Debenture together with the interest, for
the second year following the Original Issue Date, the Company may exercise its prepayment right at 120% of the outstanding principal
amount of this Debenture together with the interest, for the third year following the Original Issue Date, the Company may exercise
its prepayment right at 115% of the outstanding principal amount of this debenture together with the interest, and for the fourth
and fifth year following the Original Issue Date, the Company may exercise its prepayment right at 110% of the outstanding principal
amount of this Debenture together with the interest. In the event the Company determines to exercise its prepayment right herein,
the Company shall provide the Holder with twenty (20) days written notice (in which time the Holder may elect to convert the Debenture
pursuant to the terms and conditions herein).

 

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Section 11. If this Debenture
shall be mutilated, lost, stolen or destroyed, the Company shall execute and deliver, in exchange and substitution for and upon
cancellation of a mutilated Debenture, or in lieu of or in substitution for a lost, stolen or destroyed Debenture, a new Debenture
for the principal amount of this Debenture so mutilated, lost, stolen or destroyed but only upon receipt of evidence of such loss,
theft or destruction of such Debenture, and of the ownership hereof, and indemnity, if requested, all reasonably satisfactory to
the Company.

 

Section 12. Any and all
notices or other communications or deliveries to be provided by the Holder hereunder, shall be in writing and delivered personally,
by facsimile, by email attachment, or sent by a nationally recognized overnight courier service, addressed to the Company, at the
address set forth above, or such other facsimile number, email address, or address as the Company may specify for such purposes
by notice to the Holder delivered in accordance with this Section 9.  Any and all notices or other communications or deliveries
to be provided by the Company hereunder shall be in writing and delivered personally, by facsimile, by email attachment, or sent
by a nationally recognized overnight courier service addressed to each Holder at the facsimile number or email address or address
of the Holder appearing on the books of the Company, or if no such facsimile number or email attachment or address appears on the
books of the Company, at the principal place of business of such Holder, as set forth in the Subscription Agreement.  Any
notice or other communication or deliveries hereunder shall be deemed given and effective on the earliest of (i) the date of transmission,
if such notice or communication is delivered via facsimile at the facsimile number or email attachment to the email address set
forth on the signature pages attached hereto prior to 5:30 p.m. (New York City time) on any date, (ii) the next Business Day after
the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number or email attachment
to the email address set forth on the signature pages attached hereto on a day that is not a Business Day or later than 5:30 p.m.
(New York City time) on any Business Day, (iii) the second Business Day following the date of mailing, if sent by U.S. nationally
recognized overnight courier service or (iv) upon actual receipt by the party to whom such notice is required to be given.

 

    8

     

    

 

Section 13. Except as expressly
set forth in any security agreement securing the obligations under this Debenture, all questions concerning the construction, validity,
enforcement and interpretation of this Debenture shall be governed by and construed and enforced in accordance with the internal
laws of the State of New York, without regard to the principles of conflicts of law thereof and each party agrees that all legal
proceedings concerning the interpretations, enforcement and defense of the transaction contemplated herein (whether brought against
a party hereto or its respective affiliates, directors, officers, shareholders, employees or agents) shall be commenced in the
state and federal courts sitting in the City of New York, Borough of Manhattan (the "New York Courts"). Each party hereto
hereby irrevocably submits to the exclusive jurisdiction of the New York Courts for the adjudication of any dispute hereunder or
in connection herewith or with any transaction contemplated hereby or discussed herein 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,
or such New York Courts are improper or inconvenient venue for such proceeding. 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 via registered
or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under
this Debenture 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. Each party hereto
hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding
arising out of or relating to this Debenture or the transactions contemplated hereby. If either party shall commence an action
or proceeding to enforce any provisions of this Debenture, then the prevailing party in such action or proceeding shall be reimbursed
by the other party for its attorneys fees and other costs and expenses incurred with the investigation, preparation and prosecution
of such action or proceeding.

 

Section 14. Any waiver
by the Company or the Holder of a breach of any provision of this Debenture shall not operate as or be construed to be a waiver
of any other breach of such provision or of any breach of any other provision of this Debenture. The failure of the Company or
the Holder to insist upon strict adherence to any term of this Debenture on one or more occasions shall not be considered a waiver
or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Debenture.
Any waiver must be in writing.

 

Section 15. If any provision
of this Debenture is invalid, illegal or unenforceable, the balance of this Debenture shall remain in effect, and if any provision
is inapplicable to any person or circumstance, it shall nevertheless remain applicable to all other persons and circumstances.
If it shall be found that any interest or other amount deemed interest due hereunder violates applicable laws governing usury,
the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum permitted rate of interest. The
Company covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay, extension or usury law or other law which would prohibit or forgive
the Company from paying all or any portion of the principal of or interest on the Debentures as contemplated herein, wherever enacted,
now or at any time hereafter in force, or which may affect the covenants or the performance of this indenture, and the Company
(to the extent it may lawfully do so) hereby expressly waives all benefits or advantage of any such law, and covenants that it
will not, by resort to any such law, hinder, delay or impeded the execution of any power herein granted to the Holder, but will
suffer and permit the execution of every such as though no such law has been enacted.

 

    9

     

    

 

IN WITNESS WHEREOF, the
Company has caused this 12% Secured Convertible Debenture to be duly executed by a duly authorized officer as of the date first
above indicated.

 

	 	yappn corp.  
	 	 
	 	By:	 
	 	 	
        Name:

        Title:

 

    10

     

    

 

ANNEX A

 

NOTICE OF CONVERSION

 

The undersigned hereby elects to convert principal
under the 12% Secured Convertible Debenture of Yappn Corp. (the "Company") shares of common stock (the "Common Stock"),
of the Company according to the conditions hereof, as of the date written below. If shares are to be issued in the name of a person
other than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto and is delivering herewith
such certificates and opinions as reasonably requested by the Company in accordance therewith. No fee will be charged to the holder
for any conversion, except for such transfer taxes, if any.

 

Conversion calculations:

 

	 	Date to Effect Conversion: 	 	 

 

	 	Principal Amount of Debentures to be Converted:	 	 
	 	 	 	 
	 	 	 	 

 

	 	Interest Amount of Debentures to be Converted	 	 
	 	 	 	 
	 	 	 	 

 

	 	Number of shares of Common Stock to be issued:  	 	 
	 		 	 
	 	 	 	 

 

	 	Signature: 	 	 

 

	 	Name: 	 	 

 

	 	Address:	 	 

 

 

 

11

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