$5,000,000

June 16, 2014          

1.1.

“Bankruptcy Event” means the commencement of any bankruptcy case or proceedings by or against the Borrower, or alleging that the Borrower is insolvent or unable to pay its debts as they mature or for the readjustment or arrangement of the Borrower’s debts, whether under the United States Bankruptcy Code or under any other law, whether state or federal, now or hereafter existing, for the relief of debtors, or the commencement of any analogous statutory or non-statutory proceedings involving the Borrower; provided, however, that if such commencement of proceedings against the Borrower is involuntary, such action shall not be considered a Bankruptcy Event if such proceeding shall have been dismissed within sixty (60) days after the commencement of such proceedings.

1.2.

“Events of Default. The occurrence of any of the following shall constitute an “Event of Default” hereunder:

(a)

failure of Borrower to make any payment when due under this Note for a period of ten (10) days or more;

(b)

one or more judgments or decrees is entered against Borrower (not paid or fully covered by insurance) in excess of $250,000 and such judgments or decrees shall not have been vacated or discharged, stayed or bonded pending appeal within sixty (60) days from the entry thereof; and

(c)

if there is a Bankruptcy Event with respect to Borrower.

1.3.

“Maturity Date” shall mean the fifth anniversary of the date hereof.

1.4.

“Note” means this 2014 Convertible Promissory Note.

2.

Interest. The Loan Amount or any portion thereof shall bear cumulative annual interest at the applicable federal rate as published by the Internal Revenue Service in effect on the date hereof. Interest accrued and payable under this Note shall be calculated quarterly and payable annually or upon repayment of all or any portion of the principal under this Note. Interest on this Note shall be calculated on the basis of a 30-day month and a 360-day year.

3.

Repayment.     On the Maturity Date, all amounts then remaining unpaid on this Note shall be immediately due and payable without notice of default, presentment or demand for payment, protest or notice of nonpayment or dishonor, or notices or demands of any kind, all of which are expressly waived by the Borrower.

4.

Event of Default. If an Event of Default shall occur and be continuing, the outstanding principal amount of this Note may be declared immediately due and payable.

5.

Conversion.

5.1.

Right to Convert. Prior to the Maturity Date, at the option of the holder hereof, the unpaid principal amount of this Note shall be convertible, on the terms set forth herein, into fully paid and non-assessable shares of common stock of the Borrower (“Common Stock”), at a price of $ 1.11 per share of Common Stock. Notwithstanding anything in this Note to the contrary, no holder of this Note may convert any portion of the unpaid principal balance hereof until such time as the Borrower has amended its charter to increase the number of authorized shares of Common Stock by at least the amount necessary for issuance upon conversion of this Note, which amendment is expected to occur at or promptly after the Company’s annual meeting of shareholders on July 31, 2014.

5.2.

Mechanics of Conversion

(f)

If Lender converts less than the all of the outstanding principal amount of this Note, the Borrower will deliver to Lender an amended and restated Note, containing the other terms and provisions of the Note reflecting (i) an original principal amount equal to that portion of the then-outstanding principal amount not converted and (ii) the availability of additional borrowings up to the $5,000,000 maximum contemplated by this Note, less any amounts so converted. Upon the conversion of this Note, all rights of the Lender under the Note, except the right to receive the Common Stock will cease as to that portion of the Note so converted and the Note will no longer be deemed to be outstanding as to that portion of the Note so converted.

6.

No Rights of Stockholder. The Lender shall not be entitled to vote or receive dividends or be deemed the holder of the Common Stock issuable upon conversion hereof prior to conversion.

7.

Prepayment. The Borrower may, from time to time at its option, upon fifteen (15) days prior written notice to Lender, prepay all or part of this Note (with all accrued and unpaid interest thereon), without premium or penalty.

9.

Miscellaneous.

9.1.

THIS NOTE AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CHOICE OF LAW CONSIDERATIONS, APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE AND ANY APPLICABLE LAW OF THE UNITED STATES OF AMERICA, IT BEING UNDERSTOOD THAT, TO THE FULLEST EXTENT PERMITTED BY THE LAW OF SUCH JURISDICTION, THE LAW OF THE STATE OF NEW YORK SHALL GOVERN THE VALIDITY AND ENFORCEABILITY OF ALL LOAN DOCUMENTS, AND THE DEBT OR OBLIGATIONS ARISING HEREUNDER.

9.2.

ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST BORROWER OR LENDER ARISING OUT OF OR RELATING TO THIS NOTE SHALL BE INSTITUTED IN ANY FEDERAL OR STATE COURT IN NEW YORK, AND BORROWER WAIVES ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT IN ANY SUIT, ACTION OR PROCEEDING.

9.3.

The parties hereto agree that, notwithstanding anything contained herein to the contrary, there shall be required the consent of the Borrower and Lender to amend or modify the terms of this Note.

9.4.

A determination that any portion of this Note is unenforceable or invalid shall not affect the enforceability or validity of any other provision, which shall be enforced to the maximum extent permitted by law.

9.5.

That certain letter from Lender to the Company dated May 29, 2014 with respect to the maintenance of liquidity is hereby terminated.

9.6.

The Borrower agrees to pay all costs and expenses, including without limitation attorneys’ fees, incurred in connection with the interpretation or enforcement of this Note.

LENDER:

BORROWER: