5.         Transferability of Note.  This Note and any of the rights hereunder may be not assigned, by operation of law or otherwise, by Holder without the written consent of the Company.  The Holder or anyone who takes the Note by transfer and who is entitled to receive payments under the Note will be called the “Holder.”

6.         Default and Remedy.  The following events are hereinafter called “Events of Default”:

(a)         Any failure by the Company to pay in full when due any sums hereunder; or

(b)         Any material breach the Company of a provision of the Loan Agreement with Umpqua Bank or this Note; or

(c)         The Company shall: (i) apply for or consent to the appointment of a receiver, trustee, liquidator or custodian of itself or of all or substantially all of its properties and assets; (ii) become insolvent (as such term may be defined or interpreted under any applicable statute); or (iii) commence a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to itself or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect, or consent to any such relief or to the appointment of or taking possession of its property by any official in an involuntary case or other proceeding commenced against it;

(d)         the Company shall provide to Holder a second lien on all Company assets to secure payment of principal and interest on this Note if not repaid by March 31, 2017 or converted into convertible debentures or equity as terms acceptable to the Holder.

Upon the occurrence of any of such Events of Default, Holder shall send written notice to the Company of such default and allow the Company ten (10) days from the date of such written notice to cure said default in the case of a default under Section 5.1(a) or (b), and thirty (30) days from the date of said written notice to cure said default in the case of a default under Section 5.1(c).  Said written notice shall be personally delivered, sent by a nationally recognized overnight courier service, or sent by registered or certified mail, return receipt requested, to the Company at its address contained in the notice provision contained herein.  In the event the Company fails to cure within the 10-day or 30-day cure period, as applicable, then Holder shall be entitled to the entire amount of the indebtedness, which amount shall be immediately due and payable without further notice or demand pursuant to the terms of.

7.         Fees and Costs.  The Company promises to pay all costs, expenses, and attorneys’ fees incurred by the Holder hereof in the event this Note is referred to an attorney for the collection of the debt, or in any litigation or controversy arising from or connected with the this Note in which the Holder hereof prevails.  If a judgment is obtained thereon, such attorneys’ fees, costs, and expenses shall be in such amount as the court shall deem reasonable.

Amendment 11 to Promissory Note – Page 2