PROMISSORY NOTE


 


	US$50,000.00  (Principal Amount)	January 8, 2013


  


FOR VALUE RECEIVED,
the undersigned, Innolog Holdings Corporation (“IHC”) and Innovative Logistics Techniques, Inc. (“Innolog”)
(together the “Maker”), each jointly and severally promise to pay to Timothy B. Fleischer (“Holder”), at
such place as Holder may later designate in writing, in lawful money of the United States, the principal sum of FIFTY THOUSAND
US DOLLARS ($50,000.00) (“Principal Amount”) 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, costs and expenses, are collectively referred to as
the “Obligations.”


 


		1.	Repayments & Special Terms



 


Principal and interest
under this Note is due and payable forty-five (45) days from the receipt of the Principal Amount (“Maturity Date”)
(March 25, 2013).


 


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 interest and Fee and other amounts described hereunder. Each payment shall be applied first to the principal balance due.


 


TIME IS OF THE ESSENCE on the repayment
of this Note. There is no grace period on the repayment and payment of the amounts due hereunder.


 


		2.	Interest/Fee/Additional Compensation



 


(a)   Maker shall pay
to Holder a flat fee of ten percent (10%) or Five Thousand Dollars ($5,000), which amount is deemed to be earned immediately but
shall be due and payable on the Maturity Date.


 


(b)   In addition, Maker
shall issue to Holder or Holder’s designee 50,000 Warrants, convertible into common stock of Innolog Holdings Corporation,
a Nevada corporation (“IHC”), at an exercise price of $0.05 per share for five years from the date hereof, with such
other terms that are substantially the same as other similar warrants. Maker agrees that such warrants are of uncertain value.


 


		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 within three (3) business days of the
Maturity Date, there shall be a late fee of ten percent (10%) of the outstanding Principal Amount in which case Maker
shall have an additional thirty (30) calendar days in which to pay the Obligations. In addition to the Late Fee(s), after the Maturity
Date, this Note shall accrue interest from the Maturity Date at the rate of eighteen percent (18%) per annum until paid in full
(“Default Interest”). Such Default Interest shall be on the outstanding principal amount.


 




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		4.	Events of Default



 


The following shall
constitute Events of Default hereunder:


 


(a)        If Maker 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);


 


(b)        If Maker 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;


 


		5.	Remedies



 


(a)        Upon the occurrence
of an Event of Default, Holder may, in Holder's sole and absolute discretion and without notice or demand, 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.


 


(b)        If an Event
of Default shall occur, the Maker shall immediately 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 reasonable attorney’s fees, and the
amounts described above.


 


(c)        Maker understands,
acknowledges and agrees, that upon an Event of Default, Holder may immediately file the Confession of Judgments against each of
IHC and Innolog.


 


		6.	Security



 


Maker hereby grants
to Holder a security interest in the following accounts receivable of Maker or Innolog — N0017-08-C-20423 3018 ODCSLOG Contract
Name: Navy — March Billing with an anticipated amount of approximately $225,000), referred to by Maker as the “Big
Navy” A/R, and the proceeds therefrom (the “Collateral”).


 


Upon request by Holder
after an Event of Default, Maker shall execute and deliver such documents and instruments as Holder may request from time to time
to secure, evidence and perfect Holder's security interest in the Collateral, until such time as this Note, all of the Obligations
hereunder are paid in full.


  




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		7.	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 (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. This Note may be executed in counterparts and facsimile and electronic signatures
are valid and shall constitute original signatures.


 


(b)        This Note 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. Notwithstanding the foregoing, Maker may not assign this Note or any 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 all
others that may become liable for all or any part of the obligations evidenced by this Note, hereby waives 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 does 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 liable for the payment of this Note, AND DOES HEREBY WAIVE TRIAL BY JURY.


 


(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) MAKER
ACKNOWLEDGES 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 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 the
performance thereof).


 




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


 


(g)        Maker agrees
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)        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.


 


(i)
        Holder understands AND IS AWARE OF the financial condition of the Maker (including other debt obligations of maker which may
have priority over holder), has had an opportunity to review all of the public filings of Maker and understands that this loan
is a high risk investment where Holder may lose its entire investment.


 


(j)        Maker
understandS, acknowledgeS and agreeS that the occurrence of an Event of Default hereunder shall cause acceleration of not only
this Note and the Obligations hereunder, but also acceleration of ANY OTHER OBLIGATIONS OWED TO PAYEE; AND THAT THERE ARE SIGNIFICANT
LATE FEES HEREUNDER.


 




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CONFESSED JUDGMENT


 


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


 


Maker, Innolog
Holdings Corporation and Innovative Logistics Techniques, Inc., jointly and severally (together hereinafter referred to as “Debtor”),
promise to pay to the order of Holder the sum of FIFTY THOUSAND DOLLARS AND ZERO CENTS ($50,000.00), plus any additional Late
Fee(s), plus interest on the entire outstanding Obligations at 18% per annum, from the Maturity Date until paid, including
and after the recording of this confession of judgment, plus all costs of collection, including all reasonable attorney’s
fees, and accounting fees less credit for any payments made.


 


Debtor hereby appoints
any attorney licensed to practice 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 the Holder, in the amount of $50,000.00, plus all costs and expenses of collection (including reasonable attorney’s
fees), plus additional late fees, plus interest from the date of judgment so confessed at the rate of 18% per annum, or such lesser
amount of principal plus interest as the creditor may be willing to accept.


 


Such confession of
judgment may be made in any circuit court in the Commonwealth of Virginia.


 


Furthermore, Maker
acknowledges the Holders right to pursue the guarantee, the Collateral, 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.


 


[Signature Page on Following Page]


 




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IN WITNESS WHEREOF, the undersigned, intending
to be legally bound, each represent and warrant that he is duly authorized and empowered to enter into this agreement and Maker
has caused this Note to be executed as of the day and year first above written by its duly authorized and empowered officer(s)
or representative(s).


 


	 	MAKER	 
	 	 	 
	 	Innolog Holdings Corporation	 
	 	 	 
	 	By:	 	 
	 	 	William P. Danielczyk	 
	 	 	Chairman 	 
	 	 	& Authorized Representative	 
	 	 	 	 
	 	Innovative Logistics Techniques, Inc.	 
	 	 	 	 
	 	By:	 	 
	 	 	Richard Stewart or Eric Wagner	 
	 	 	President, CFO or other	 
	 	 	Authorized Representative	 


 


WITNESSED


 


____________________________


 


Name:   _____________________


 


Acknowledged & Agreed


 


	 	 
	Holder	 


 




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