You'll either have to upgrade the .NET 2 project to .NET 4, or downgrade the .NET 4 project to .NET 3.5 (or earlier).
How do you upgrade the .net version? I am not sure where to and what to specify. Please help.
Edit: I found the answer myself. Select the project, right click and choose Property Pages. There you can select framework version. or select the project and click Shift+F4