PROMISSORY NOTE

1.              Agreement to Pay .  FOR VALUE RECEIVED, FORTUNE INDUSTRIES II, INC. (“ Borrower ”), hereby promises to pay to the order of FORTUNE INDUSTRIES, INC. , and its assigns (“ Lender ”), the principal sum of Three Million Five Hundred Thousand Dollars and Zero Cents ($3,500,000.00) (“ Loan ”), at the place and in the manner hereinafter provided, together with interest thereon at the rate or rates described below, and any and all other amounts which may be due and payable hereunder from time to time without relief from valuation or appraisement laws.

2.              Interest Rate .

2.1            Interest Prior to Default .  Interest shall accrue on the outstanding principal balance of this Note from the date hereof through November 30, 2011 (the “Maturity Date”) at an annual interest rate equal to the Prime Rate (as hereinafter defined) plus one percent (1%) (the “Loan Rate”).

2.2            Prime Rate.   The term “Prime Rate”   means, with respect to a loan, the rate per annum determined by the Lender and equal to the prime rate per annum as such interest rate is referenced and reported by the Wall Street Journal or, if the same is unavailable, any other generally accepted authoritative source of such interest rate as the Lender may reference from time to time.  The Prime Rate shall be adjusted by the Lender, as necessary, at the end of each month during the term hereof.  The Prime Rate as of November 30, 2008 is four percent (4%).

2.3            Interest After Default .  From and after the Maturity date or upon the occurrence and during the continuance of an Event of Default, interest shall accrue on the balance of principal remaining unpaid during any such period at an annual rate (“ Default Rate ”) equal to three percent (3%) plus the Loan Rate; provided, however, in no event shall the Default Rate exceed the maximum rate permitted by law.  The interest accruing under this paragraph shall be immediately due and payable by Borrower to the holder of this Note upon demand and shall be additional indebtedness evidenced by this Note.

2.4            Interest Calculation .  Interest on this Note shall be calculated on the basis of a 360-day year and the actual number of days elapsed in any portion of a month in which interest is due.

3.              Payment Terms.

3.1            Principal and Interest .  Payments of principal and interest due under this Note, if not sooner declared to be due in accordance with the provisions hereof, shall be made as follows:

(a)           Commencing on December 30, 2008 and on the thirtieth (30 ^th ) day of each calendar month thereafter, accrued interest shall be due and payable.

(b)           Commencing on December 30, 2009 and on the thirtieth (30 ^th ) day of each calendar month thereafter for a period of twelve (12) months, principal payments in the amount of Fifty Thousand and 00/100 Dollars ($50,000.00) shall be due and payable.

(c)           Commencing on December 30, 2010 and on the thirtieth (30 ^th ) day of each calendar month thereafter, principal payments in the amount of One Hundred Thousand and 00/100 Dollars ($100,000.00) shall be due and payable.

(d)           The unpaid principal balance of this Note, if not sooner paid or declared to be due in accordance with the terms hereof, together with all accrued and unpaid interest thereon and any other amounts due and payable hereunder shall be due and payable in full at the Maturity Date.

3.2            Application of Payments .  Prior to the occurrence of an Event of Default, all payments and prepayments on account of the indebtedness evidenced by this Note shall be applied as follows: (a) first, to fees, expenses, costs and other similar amounts then due and payable to Lender, (b) second, to accrued and unpaid interest on the principal balance of this Note, (c) third, to the payment of principal due in the month in which the payment or prepayment is made, (d) fourth, to any escrows, impounds or other amounts which may then be due and payable, (e) fifth, to any other amounts then due Lender hereunder, and (f) last, to the unpaid principal balance of this Note.  Any prepayment on account of the indebtedness evidenced by this Note shall not extend or postpone the due date or reduce the amount of any subsequent payment of interest due hereunder.  After an Event of Default has occurred and is continuing, payments may be applied by Lender to amounts owed hereunder and under the Loan Documents in such order as Lender shall determine, in its sole discretion.

3.3            Method of Payments .  All payments of principal and interest hereunder shall be paid by automatic debit, wire transfer, check or in coin or currency which, at the time or times of payment, is the legal tender for public and private debts in the United States of America and shall be made at such place as Lender or the legal holder or holders of this Note may from time to time appoint in the payment invoice or otherwise in writing.  Payment made by check shall be deemed paid on the date Lender receives such check; provided, however, that if such check is subsequently returned to Lender unpaid due to insufficient funds or otherwise, the payment shall not be deemed to have been made and shall continue to bear interest until collected.  Notwithstanding the foregoing, the final payment due under this Note must be made by wire transfer or other final funds.

3.4            Prepayment .  If, for any reason, the Loan is paid prior to the last business day of any Interest Period, whether voluntary, involuntary, by reason of acceleration or otherwise, each such prepayment of the Loan will be accompanied by the amount of accrued interest