PROMISSORY NOTE


 


	US $200,000.00	December 9, 2011              


 


FOR VALUE RECEIVED, the undersigned, Innolog
Holdings Corporation and Innovative Logistics Techniques, Inc., (together the “Maker”), jointly and severally promise
to pay to the Farzin Ferdowsi (the “Holder”), at such place as the Holder may later designate in writing, in lawful
money of the United States, the principal sum of TWO HUNDRED THOUSAND US DOLLARS ($200,000.00) in accordance with this promissory
note (the “Note”) under the terms set forth herein. All of the obligations directly or indirectly due to Holder hereunder
and in connection with the transactions contemplated hereby, including without limitation principal, interest, fees, past due fees,
purchase prices, costs and expenses, are collectively referred to as the “Obligations.”


 


1.            Interest/Fee


 


This Note shall bear a total interest rate/fee
of twenty-five thousand dollars ($25,000) through the Maturity Date (as defined herein), such fee to be due and payable on or before
January 12, 2012 respectively.


 


In addition, (a) Maker shall issue or cause
to be issued to Holder or Holder’s designee 300,000 Preferred Shares of Stock of Innolog Holdings Corporation. Such shares
shall have the same terms, conditions and provisions as are contained in all other Preferred Shares issued by Innolog Holdings
Corporation.


 


2.            Repayment
& Purchase


 


Principal and interest due under this Note
and the Purchase Price shall be payable by 5:00 PM Eastern Time on the maturity date of January 12, 2012 (“Maturity Date”).
The Company can extend repayment of the note by ten calendar days only but must pay a late fee as indicated below in section 3.


 


Maker shall have the right to prepay at
any time and from time to time, in advance of maturity, all or part of the principal amount of this Note, along with the above
interest and fee. Each payment shall be applied first to the principal balance due.


 


TIME IS OF THE ESSENCE on the repayment of this Note.


 


3.            Late
Fee and Default Interest


 


As noted above, time is of the essence
on the repayment of this Note. If this Note is not paid in full on or before the Maturity Date, there shall be a late fee of
ten thousand dollars ($10,000.) paid within two business days from default or upon Company giving notification to Holder that a
ten day extension period will be needed to repay the note. There shall accrue additional Late Fees of 10% every thirty (30) calendar
days until repaid in full. In addition, after the Maturity Date, this Note shall accrue interest from the Maturity Date at the
rate of twenty-eight percent (28%) per annum, compounded monthly until paid in full (“Default Interest”). Such Default
Interest shall be on the outstanding principal amount, the interest due under the Note and the Late Fee(s).


 



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4.            Events
of Default


 


The following shall constitute Events of
Default hereunder:


 


(a)          If
Maker or Guarantor defaults in the payment of any amount due on this Note when due (there is no requirement for any notice and
there is no right to cure any failure of payment when due); and


 


(b)          If
any representation or warranty made by Maker is untrue in any material respect; and


 


(c) If Maker or Guarantor shall (i) make
a general assignment for the benefit of creditors, or (ii) apply for or consent to the appointment of a receiver, trustee or liquidator
for itself or all or a substantial part of its assets, or (iii) be adjudicated a bankrupt or insolvent, or (iv) file a voluntary
petition in bankruptcy or file a petition or an answer seeking reorganization or an arrangement with creditors or seeking to take
advantage of any other law (whether Federal or state) relating to relief of debtors, or admit (by answer, by default or otherwise)
the material allegations of a petition filed against it in any bankruptcy, reorganization, insolvency or other proceeding (whether
Federal or state) relating to relief of debtors, or (v) suffer or permit to continue unstayed and in effect for sixty (60) consecutive
days any judgment, decree or order entered by a court of competent jurisdiction, that approves an involuntary petition seeking
reorganization of Maker, or appoints, pursuant to such a petition, a receiver, trustee or liquidator for it or all or a substantial
part of its assets.


 


(d)          If
Maker or Guarantor shall default in any other obligation to Holder or any of its affiliates, partners, members or relatives under
any other agreement or obligation.


 


5. Remedies


 


(a)          Upon
the happening of an Event of Default, Holder may, in Holder's sole and absolute discretion and without notice or demand to Maker
or to Guarantor, accelerate the due date of any amounts owed hereunder and declare the entire amount of principal and interest
thereon remaining outstanding hereunder immediately due and payable, whereupon, the same shall forthwith become and be due
and payable without any presentment, demand or notice of any kind, all of which are expressly waived by Maker and Guarantor.


 


(b)          If
an Event of Default shall occur, the Maker and Guarantor shall jointly and severally pay the Holder, on demand by the Holder, all
costs and expenses incurred by the Holder in connection with the collection and enforcement of this Note, including attorneys'
fees, accountants and tax advisor’s fees and the amounts described above.


 


6.            Security


 


This Note and the Obligations are guaranteed
pursuant to a separate Guaranty and Indemnity Agreement with Guarantor. The full and prompt payment of all of the Obligations and
the performance of this Note are unconditionally and irrevocably guaranteed by Ian Reynolds, M.D. an individual (“Guarantor”).
In addition to the Guarantee and Confession of Judgment contained herein, all of the Obligations are secured by the accounts receivable
of Maker not otherwise specifically pledged at or prior to the Maturity Date (or date of Default if earlier); provided, however
that the holder may not file any instruments perfecting such security interest until after the Maturity Date, or the date of Default
as the case may be. The note will also be secured and pledge by Company contract with U.S. Department of Navy Research Lab, Contract
number N0017-08-C-20423. Upon default and failure to be paid, Holder will direct the Company to inform customer and send future
contract dollars to Holder directly until said obligation is fully paid.


 



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 7.           Priority
of Repayment.


 


This Note shall be repaid by Maker prior
to the repayment of any other debt of Maker other than (i) normal operating expenses, (ii) regular current accounts payables and
(iii) any secured obligations.


 


8.            Miscellaneous


 


(a)          This
Note shall be deemed to be made and entered into under the laws of the Commonwealth of Virginia and for all purposes shall be construed
and enforced in accordance with the laws of the Commonwealth of Virginia, without giving effect to any of the conflicts of law
principles which would result in the application of the substantive law of another jurisdiction. Maker and Guarantor (i) hereby
irrevocably submit to the exclusive jurisdiction of the United States District Court sitting in the Northern District of Virginia
and the courts of the Commonwealth of Virginia located in Fairfax County for the purposes of any suit, action or proceeding arising
out of or relating to this Note and (ii) hereby waive, and agree not to assert in any such suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of such court, that the suit, action or proceeding is brought in an inconvenient
forum or that the venue of the suit, action or proceeding is improper.


 


(b)          This
Note is a binding obligation of Maker, authorized by all necessary corporate actions and shall be binding upon Maker and Maker's
successors and assigns and shall inure to the benefit of Holder and Holder's successors and assigns; and each reference herein
to Maker or to Holder shall, except where the context shall otherwise require, be deemed to include its respective successors and
assigns. This Note shall be binding upon Guarantor and Guarantor's heirs, successors and assigns and shall inure to the benefit
of Holder and Holder's successors and assigns; and each reference herein to Guarantor, except where the context shall otherwise
require, be deemed to include its heirs, successors and assigns. Notwithstanding the foregoing, neither Maker nor Guarantor shall
have any right to assign his obligations hereunder without Holder's prior written consent.


 


(c)          Any
failure by Holder to exercise any right or remedy hereunder shall not constitute a waiver of the right to exercise the same or
any other right or remedy at any subsequent time, and no single or partial exercise of any right or remedy shall preclude other
or further exercise of the same or any other right or remedy.


 


(d)          Maker
and Guarantor, and all others that may become liable for all or any part of the obligations evidenced by this Note, hereby waive
presentment, demand, notice of nonpayment, protest and all other demands’ and notices in connection with the delivery, acceptance,
performance and enforcement of this Note, and do hereby consent to any number of renewals of extensions of the time or payment
hereof and agree that any such renewals or extensions may be made without notice to any such persons and without affecting their
liability herein and do further consent to the release of any person liable hereon, all without affecting the liability of the
other persons, firms or Maker or Guarantor liable for the payment of this Note, AND DO HEREBY WAIVE TRIAL BY JURY.


 



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(i)
No delay or omission on the part of the Holder in exercising its rights under this Note, or course of conduct relating hereto,
shall operate as a waiver of such rights or any other right of the Holder, nor shall any waiver by the Holder of any such right
or rights on any one occasion be deemed a waiver of the same right or rights on any future occasion.


 


(ii)
THE MAKER AND GUARANTOR ACKNOWLEDGE THAT THE TRANSACTION OF WHICH THIS NOTE IS A PART IS A COMMERCIAL TRANSACTION, AND TO THE EXTENT
ALLOWED BY APPLICABLE LAW, HEREBY WAIVE ITS RESPECIVE RIGHT TO NOTICE AND HEARING WITH RESPECT TO ANY PREJUDGMENT REMEDY WHICH
THE HOLDER OR ITS SUCCESSORS OR ASSIGNS MAY DESIRE TO USE.


 


(e)          The
remedies provided in this Note shall be cumulative and in addition to all other remedies available under this Note, at law or in
equity (including, without limitation, a decree of specific performance and/or other injunctive relief), no remedy contained herein
shall be deemed a waiver of compliance with the provisions giving rise to such remedy and nothing herein shall limit a Holder’s
right to pursue actual damages for any failure by the Maker or Guarantor to comply with the terms of this Note. Amounts set forth
or provided for herein with respect to payments, the warrants and the like (and the computation thereof) shall be the amounts to
be received by the Holder thereof and shall not, except as expressly provided herein, be subject to any other obligation of the
Maker or Guarantor (or the performance thereof). The Maker and the Guarantor acknowl-edge that a breach by it of its obligations
hereunder will cause irreparable and material harm to the Holder and that the remedy at law for any such breach may be inadequate.
Therefore the Maker and Guarantor each agree that, in the event of any such breach or threatened breach, the Holder shall be entitled,
in addition to all other available rights and remedies, at law or in equity, to seek and obtain such equitable relief, including
but not limited to an injunction restraining any such breach or threatened breach, without the necessity of showing economic loss
and without any bond or other security being required.


 


(f)          Maker
and Guarantor shall pay all costs and expenses associated with this Note, the loan and the transactions contemplated hereby and
hereunder.


 


(g)          Maker
and Guarantor agree to pay immediately upon request and without any need of any approvals or determinations of any kind all costs
and expenses of enforcement of this Note, including, without limitation, attorneys’ fees and expenses.


 


(h)          Maker
and Guarantor shall immediately execute and deliver such other documents, agreements and instruments as requested by Holder to
carry out the intent of this Note and related documents and to protect Holder’s interests in any collateral or otherwise.


 


(i)          None
of the terms and provisions hereof may be waived, altered, modified, or amended except by an agreement in writing signed by Maker
and Holder.


 


CONFESSED JUDGMENT 


 


THIS INSTRUMENT CONTAINS A CONFESSION
OF JUDGMENT PROVISION WHICH CONSTITUTES A WAIVER OF IMPORTANT RIGHTS YOU MAY HAVE AS A DEBTOR OR GUARANTOR AND ALLOWS THE HOLDER
TO OBTAIN A JUDGMENT AGAINST YOU WITHOUT ANY FURTHER NOTICE.


 



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Maker, Innolog Holdings Corporation
and Innovative Logistics Techniques, Inc., and Guarantor, jointly and severally (all three collectively hereinafter referred to
as “Debtor”), promise to pay to the order of Holder the sum of  $235,000.00, plus any additional Late Fee(s),
plus interest at 28% per annum, compounded monthly, from the Maturity Date until paid, including and after the recording of this
confession of judgment, plus all costs of collection, including all attorneys’ fees, and accounting fees less credit for
any payments made.


 


Debtor hereby appoints any attorney at law
authorized or licensed to practice law in the Commonwealth of Virginia as the undersigned’s attorney-in-fact for the purpose
of confessing judgment in favor of Holder.


 


The undersigned’s said attorneys in
fact are explicitly authorized, whether a suit, motion or action be pending for the indebtedness or not, to confess judgment in
favor of Holder, in the amount of $235,000, plus all costs and expenses of collection (including attorneys’ fees),
plus additional late fees, plus interest from the date of judgment so confessed at the rate of 28% per annum, compounded monthly,
or such lesser amount of principal plus interest as the creditor may be willing to accept.


 


Such confession of judgment may be made
in the clerk’s office of the circuit court in the Commonwealth of Virginia, located at Fairfax, Virginia and or any Federal
court sitting in the Northern District of Virginia as Holder may choose.


 


Furthermore,
Maker and Guarantor, jointly and severally acknowledge the Holders right to pursue the guarantee, the security and the
accounts receivable securing this debt and the Confessed Judgment. Debtor hereby expressly waives the benefit of any
homestead exemption as to this debt and waives demand, protest, notice of presentment, notice of protest, and notice of
non-payment and dishonor of this note. Debtor agrees this confessed judgment note is provided not in payment of, but as
additional security for and evidence of obligations due to the Holder under the Note.


 



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IN WITNESS WHEREOF, the undersigned represents
that he is duly authorized and empowered to enter into this agreement and that Maker has caused this Note to be executed as of
the day and year first above written by its duly authorized and empowered officer or representative.


 















	 	MAKER
	 	 
	 	Innolog Holdings Corporation
	 	 
	 	By:	 
	 	 	William P. Danielczyk
	 	 	Chairman
	 	 	& Authorized Representative
	 	 
	 	Innovative Logistics Techniques, Inc.
	 	 
	 	By:	 
	 	 	William P. Danielczyk
	 	 	Executive Chairman
	 	 	& Authorized Representative







  


	WITNESSED	 
	 	 
	 	 
	 	 
	Name:	 	 


 


	ACKNOWLEDGMENT & AGREEMENT	 	 
	Guarantor	 	 
	 	 	 
	 	 	 
	Dr. Ian Reynolds	 	 
	As of December 9, 2011	 	 










 






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