EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (the “Agreement”) is entered into as of the 1st day of
April, 2009 (the “Effective Date”) by and between Verle B. Hammond (“you”) and
Innovative Logistics Techniques, Inc., a Virginia corporation (“Company”).

WHEREAS, the Company desires to employ you on the terms and conditions
hereinafter set forth and you desire to accept such employment.

NOW, THEREFORE, in consideration of the promises and the mutual agreements
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which hereby are acknowledged, the parties agree as follows:

1.           Employment.

(a)           Position.  The Company agrees to employ you and you agree to be
employed as the Chairman, President and Chief Executive Officer (CEO) for the
Company subject to the terms and conditions of this Agreement.  You shall report
to William P. Danielczyk, Chairman of Galen Capital Corporation (GCC).  In
performing your duties, you shall comply with the policies of the Company, as
such policies may be implemented from time to time, and the instructions of the
Board of Directors.

(b)           Full Time Commitment.  You shall devote your entire business time,
attention, skill and energy exclusively to the business of the Company.  With
prior written approval from the Company, you may engage in appropriate civic,
charitable, or educational activities and devote a reasonable amount of time to
other activities provided that such activities do not interfere or conflict with
your responsibilities and are not, or are not likely to be, contrary to the
Company’s interests.  You and the Company agree that your position is essential
to the Company’s success and that the highest level of performance is required
from you.

2.           Term of Employment.

The Company agrees to employ you, and you agree to remain in employment with the
Company, from the Effective Date until March 31, 2014 unless your employment
terminates earlier pursuant to Section 5 of this Agreement (the “Term”).  The
parties may agree to renew or extend the Term of this Agreement, provided that
any such agreement is in writing and signed by the parties.   Mr. Hammond and
the Company have the option after two years to retire as President and CEO and
serve as Chairman of the Company.

3.           Compensation.

Your minimum salary shall be US $198,000 per year during the Term of this
Agreement, less applicable taxes and withholdings, payable bi-weekly in
accordance with the Company’s regular payroll practices from time to time in
effect. You will also be able to participate in a annual bonus plan as agreed to
between you and Innolog Holdings Board of Directors.

4.           Employee Benefits.

During the Term of this Agreement, you shall be eligible for all employee
benefits that the Company may provide to other employees of the Company,
including retirement, health, dental benefits, subject in each case to the
generally applicable terms and conditions of the plan or policy applying to such
benefits and to the determinations of any person or committee administering such
plan or policy.  The Company reserves the right to amend, modify or terminate
these plans or policies at any time.

 
 

--------------------------------------------------------------------------------

 

5.           Termination of Employment.

Upon the effective date of termination of your employment with the Company (the
“Termination Date”), you will not be eligible for further compensation, benefits
or perquisites under Sections 3 and 4 of this Agreement, other than those that
have already accrued.  Termination of your employment may occur under any of the
following circumstances:

(a)          Expiration of Term.  Your employment will terminate if the Term
provided for under Section 2 expires without written agreement of both parties
to renew or extend the term.

(b)          Termination of Employment by the Company.  The Company has the
right to terminate your employment at any time with Cause.  For all purposes
under this Agreement, (“Cause”) shall mean:

 
(i)
a failure by you to perform your assigned work and duties under this Agreement
after having been given notice and ten (10) days to cure, other than a failure
resulting from your complete or partial incapacity due to physical or mental
illness or impairment;

 
(ii)
a willful act or omission by you that the Board of Director determines in good
faith to be gross misconduct or fraud;

 
(iii)
conviction of, or a plea of “guilty” or “no contest” to, a felony or a crime
involving moral turpitude; or

 
(iv)
a material breach of any duty owed  to the Company.

Termination for Cause shall become effective immediately upon written
notification.

(c)          Death or Disability.  Your employment shall be deemed to have been
terminated by you upon your (i) death or (ii) inability to perform your duties
under this Agreement, even with reasonable accommodation, for more than
twenty-six (26) weeks, whether or not consecutive, in any twelve-month period
(“Disability”).  Termination will be effective upon the occurrence of such
event.

Notwithstanding termination of this Agreement as provided in this Section 5 or
any other termination of your employment with the Company, your obligations set
forth in, or referred to or incorporated into, Sections 6, 7 and 8 hereof shall
survive any termination of your employment with the Company at any time and for
any reason.

6.           Non-solicitation.

While employed by the Company and for three (3) years after termination of that
employment, you agree not to directly or indirectly (i) solicit or attempt to
solicit any employee or contractor of the Company to end his/her relationship
with the Company; (ii) hire or attempt to hire any person who is at that time
employed by the Company or has been employed by the Company during the twelve
(12) month period preceding such hiring or attempt to hire; and (iii) solicit
any consultant, contractor or client of the Company with whom you had contact as
a result of your employment by the Company to diminish or materially alter its
relationship with the Company.  For purposes of this Agreement, a client is any
person or entity to which the Company has provided goods or services at any time
during the period commencing twelve (12) months prior to your employment with
the Company and ending on the Termination Date.

 
- 2 -

--------------------------------------------------------------------------------

 

7.           Non-competition.

You agree not to own, manage, operate, control, be employed by, participate in,
work in, advise, consult or contract with, or support in any manner any business
that is similar to the type of business conducted by the Company during your
employment within the geographic area in which the Company or its customers are
located during, and for three (3) years following the termination of, your
employment with the Company.    Any outside involvement by Mr. Hammond in family
ventures is agreed to by prior notice given to the Company’s Board of Directors
and as long as there is not a competing venture with the
Company.  Notwithstanding anything in the foregoing to the contrary, in the
event Mr. Hammond is no longer employed by the Company for any reason,  Mr.
Hammond may own, manage, operate, control, be employed by, participate in, work
in, advise, consult or contract with, or support a government contracting or
similar business that does not directly compete with the Company or seek to
contract with the Company’s current customers/contractors.  The foregoing
paragraph 6 and 7 shall apply only if Mr. Hammond is terminated for cause or
leaves the Company for no good reason.  For purposes of this agreement “good
reason” shall mean a material change in his duties or a material breach of this
Agreement by the Company.

8.           Return of Property.

Upon termination of your employment with the Company for any reason, you agree
to immediately return to the Company all property belonging to the
Company.  This includes all documents and other information prepared by you or
on your behalf or provided to you in connection with performing your duties for
the Company, regardless of the form in which such documents or information are
maintained or stored, including computer, typed, written, imaged, audio, video,
micro-fiche, electronic or any other means of recording or storing documents or
other information.  You hereby warrant that you will not retain in any form any
such document or other information or copies thereof, except as provided in the
following sentence.  You may retain a copy of any documents describing any
rights or obligations you may have after the Termination Date under any employee
benefit plan or policy.

9.           Miscellaneous Provisions.

(a)          Notices.  Unless otherwise provided herein, any notice or other
information to be provided to the Company will be sent by overnight delivery
with acknowledgement of receipt requested to:

William Danielczyk
Chairman
Galen Capital Corporation
8300 Greensboro Dr.
McLean, VA  22102
Facsimile No. 703-893-0422
 
With a copy to:

Jackson & Campbell, P.C.
1120 20th Street, NW
Suite 300 – South
Washington, DC  20036
Telephone:  (202) 457-1600
Fax:  (202) 457-1678
Attention:  David H. Cox/John J. Matteo

 
- 3 -

--------------------------------------------------------------------------------

 
 

Any notice or other information to be provided to you will be sent by overnight
delivery with acknowledgement of receipt requested, to:

Colonel Verle B. Hammond (Ret.)
 Innovative Logistics Techniques, Inc.
1751 Pinnacle Drive, Suite 600
McLean, VA, 22102
Telephone:
Fax:

with a copy to:

John Klusaritz
Bingham McCutchen LLP
2020 K Street, N.W.
Washington, D.C.  20006
(202) 373-6655 (office)
(202) 373-6001 (fax)
(202) 669-1908 (cell)
john.klusaritz@bingham.

(b)          Dispute Resolution.  You and the Company agree that any
controversy, dispute or claim between you and the Company arising out of this
Agreement or the breach thereof will be finally resolved by binding arbitration
administered by Judicial Arbitration and Mediation Services, Inc. (“JAMS”).  You
and the Company agree to follow the Dispute Resolution Procedures set forth in
Attachment A to this Agreement.

(c)          Nature of Agreement.  This Agreement constitutes the entire
agreement between you and the Company and supercedes all prior agreements and
understandings and any rights or obligations thereto between you and the Company
and any other party with respect to the subject matter hereof.  In making this
Agreement, the parties warrant that they did not rely on any representations or
statements other than those contained in this Agreement.

(d)          Amendment.  No modification of or amendment to this Agreement will
be effective unless in writing and signed by the parties to this Agreement.

(e)          Waiver.  A delay or failure by the Company to exercise any right
that is the subject of this Agreement will not be construed as a waiver of that
right.  A waiver of a breach on any one occasion will not be construed as a
waiver of any other breach.

(f)          Governing Law.  Regardless of the choice of law provisions of the
Commonwealth of Virginia or any other jurisdiction, the parties agree that this
Agreement shall be otherwise interpreted, enforced and governed by the laws of
the Commonwealth of Virginia.
 
 
- 4 -

--------------------------------------------------------------------------------

 

(g)           Severability.  This Agreement will continue in effect until all
obligations under it are fulfilled.  If any provision of this Agreement is
judicially determined to be invalid or unenforceable as written, then such
provision shall, if possible, be modified to the degree necessary to render such
provision valid and enforceable.  Further, if any part of this Agreement is held
by a court of competent jurisdiction to be invalid or unenforceable, the
remaining provisions of this Agreement shall continue with full force and
effect.

(h)           Successors and Assigns.  This Agreement is not assignable by
you.  This Agreement is binding on you with respect to the Company, its
successors or assigns.

(i)           Headings.  The headings in this Agreement are for convenience only
and shall not effect the interpretation of this Agreement.

You certify that you fully understand the terms of this Agreement and have
entered into it knowingly and voluntarily.

This Agreement may be executed in any number of counterparts each of which shall
be an original, but all of which together shall constitute one instrument.

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and year first written above.

   
Innovative Logistics Techniques, Inc.
     
 
   
[Name]
         
Date:
 
 
Date:
 

 
 
- 5 -

--------------------------------------------------------------------------------

 

Attachment A

DISPUTE RESOLUTION PROCEDURES

The parties agree to make a good faith effort to informally resolve any dispute
before submitting the dispute to arbitration in accordance with the following
procedures:

A.
The party claiming to be aggrieved shall furnish to the other a written
statement of the grievance, all persons whose testimony would support the
grievance, and the relief requested or proposed.  The written statements must be
delivered to the other party within the time limits for bringing an
administrative or court action based on that claim.

B.
If the other party does not agree to furnish the relief requested or proposed,
or otherwise does not satisfy the demand of the party claiming to be aggrieved
within 30 days and the aggrieved party wishes to pursue the issue, the aggrieved
party shall by written notice demand that the dispute be submitted to
non-binding mediation before a mediator jointly selected by the parties.

C.
If mediation does not produce a resolution of the dispute and either party
wishes to pursue the issue, that party shall request arbitration of the dispute
by giving written notice to the other party within 30 days after mediation.  The
parties will attempt to agree on a mutually acceptable arbitrator and, if no
agreement is reached, the parties will request a list of nine arbitrators from
JAMS, and select by alternately striking names.  The arbitration will be
conducted consistent with the JAMS Employment Arbitration Rules and Procedures
(“Rules”) that are in effect at the time of the arbitration.  If there is any
conflict between those Rules and the terms of the Employment Agreement
(“Agreement”), including all attachments thereto, the Agreement will
govern.  The arbitrator shall have authority to decide whether the conduct
complained of under Subsection (a) above violates the legal rights of the
parties.  In any such arbitration proceeding, any hearing must be transcribed by
a certified court reporter and any decision must be supported by written
findings of fact and conclusions of law.  The arbitrator’s findings of fact must
be supported by substantial evidence on the record as a whole and the
conclusions of law and any remedy must be provided for by and consistent with
the laws of the State of Delaware and federal law.  The arbitrator shall have no
authority to add to, modify, change or disregard any lawful term of the
Agreement.  The Company shall pay the arbitrator’s fee.

D.
Arbitration shall be the exclusive means for final resolution of any dispute
between the parties, except 1) for workers’ compensation and unemployment claims
and 2) when injunctive relief is necessary to preserve the status quo or to
prevent irreparable injury.  Injunctive relief may be sought from any court of
competent jurisdiction located in the State of Delaware.

 
 
- 6 -

--------------------------------------------------------------------------------