PROMISSORY NOTE


 


	US$25,000.00  (Principal Amount)	January 31, 2013


 


FOR VALUE RECEIVED, the undersigned, Innolog
Holdings Corporation (“IHC”) and Innovative Logistics Techniques, Inc. (“Innolog”) (together the “Maker”),
and William P. Danielczyk (“WPD”) and Fred R. Gumbinner (“FRG”) (WPD and FRG together are the “Guarantors”)
as guarantors, each jointly and severally promise to pay to Sunjay Berdia (“Holder”), at such place as Holder may later
designate in writing, in lawful money of the United States, the principal sum of TWENTY-FIVE THOUSAND US DOLLARS ($25,000.00) (“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 on the earlier of (a) three (3) business days following the receipt of the account receivables described in Section
6 hereof and (b) March 11, 2013 (“Maturity Date”).


 


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 eight percent (8%) or Two Thousand Dollars ($2,000), 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 25,000 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.


 


(c) In addition Maker shall pay to Holder
a one-time first loan bonus of two percent (2%) or Five Hundred Dollars ($500), which amount is deemed to be earned immediately
but shall be due and payable on the Maturity Date.


 


		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 five (5) days of the Maturity Date, there shall be a
late fee of eight percent (8%) of the outstanding Principal Amount. There shall accrue additional Late Fees of eight
percent (8%) of the then outstanding Principal Amounts hereunder every ten (10) calendar days until repaid in full. 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, compounded daily until paid in full (“Default Interest”). Such Default Interest shall be on the outstanding
principal amount, the interest due or accrued hereunder and the Late Fee(s).


 




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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 uses any accounts receivables or other moneys
that come into the company other than for payment of amounts due to other holders of accounts receivable notes, governmental agencies
(e.g., IRS, Department of Labor or other account related to 401k obligations due), normal operating expenses and regular current
accounts payables before all amounts due under this Note are repaid in full;


 


(c)          If Maker directly or indirectly
redirects any of the Collateral or proceeds of the Collateral without first paying all of the amounts due hereunder or under other
outstanding accounts receivable secured notes;


 


(d)          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;


 


(e)         If any confession of judgment is
filed or threatened to be filed against IHC, Innolog or Guarantor; and


 


(f)         If any representation or warranty
of Maker is untrue or any covenant of Maker is breached.


 


		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.


 




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(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 attorneys' fees, accountants and tax advisor’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.


 


(d)         If an Event of Default shall occur, Holder may immediately
file and send to the appropriate authorities the Letter from Maker and any other documents or instruments directing that all payments
under the Collateral listed below be sent directly to the account designated by Holder until such time as Holder states in writing
that all of the Obligations and all amounts owed hereunder are paid in full. Maker shall immediately (within 2 business days) execute
and deliver to Holder such letters and documents requested by Holder to effectuate the above.


 


		6.	Security



 


Maker hereby grants to Holder a security
interest in the following accounts receivable of Maker or Innolog as listed below:


 


1.           N0017311F0438 NRL-EWS Contract Name: Navy; (February Billing
Amount in excess of $50,000), and if this Note is not repaid in full with such proceeds any and all future billings thereunder,
referred to by Maker as the “Little Navy” A/R, and


 


2.           The Integrated Global Convergence – IGC contract
where Maker is performing help desk support services under Prime Contract No. SP4701-08-A-0008-0232 (Billing Amount approximately
$15,000).  The contract is FFP and is billed monthly through the Wide Area Workflow (WAWF) system under Maker’s Account
No. 5124-016 and is referred to as the “LM A/R”,


 


and the proceeds therefrom from time to time (the “Collateral”).
If for any reason such Collateral is compromised or becomes unavailable to Holder, then future accounts receivable under such above-referenced
contracts shall immediately and automatically be assigned to Holder and such additional accounts receivable shall be deemed part
of the Collateral.


 


Holder recognizes that the Collateral is
also pledged to other lenders of account receivable loans, including specifically, the Kay M. Gumbinner Trust (to which Fred Gumbinner,
is a trustee and a beneficiary) who may have a priority security interest in the Collateral. Maker agrees that if any creditor
collects, receives or hypothecates the Collateral in any way, then Maker automatically and without any further action grants to
Holder a security interest in future billings under the above-referenced contracts and such future billings shall be treated as
part of the Collateral.


 


Maker shall execute and immediately deliver
(a) such documents and instruments as Holder may request from time to time to secure, evidence and perfect Holder's security interest
and priority in the Collateral; and (b) such documents and instruments as Holder may request from time to time to mandate that
the US Navy and/or Lockheed Martin direct and make any and all future payments to the Holder at such account as designated by Holder,
until such time as this Note, all of the Obligations hereunder, and all other payment obligations herein are paid in full; and
(c) such powers of attorney as may be requested by Holder in order for Holder to act upon and receive direct payment of the Collateral
from the US Navy, Lockheed Martin or any governmental agency related thereto.


 




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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)         Maker shall immediately upon request
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 and perfect Holder’s interests in any collateral or otherwise.


 


(i)          Holder recognizes
that IHC is a public company (ticker symbol INHC.OB) and that copies of public filings and information about IHC and ILT are available.


 


(j)          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.


 


(k)         Maker
and HOLDER acknowledge that Fred Gumbinner represents Maker as outside general counsel and various other matters. Holder further
understands and acknowledges, that the Kay M. Gumbinner Trust has made various loans to Maker, that Fred Gumbinner is a trustee
and beneficiary of the Kay M. Gumbinner Trust, AND that the terms (FINANCIAL OR OTHERWISE) of such loans may be different than
the terms of this Note. Maker and Holder both now and forever with full and complete knowledge, authority and consent, each waives
any conflict of interest by or potential conflict of interest of Fred Gumbinner and each hereby indemnify and hold him harmless
against any losses, claims or other actions of any kind.


 


(l)         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., and William P. Danielczyk (“WPD”) and Fred R. Gumbinner (“FRG”)
(WPD and FRG together are the “Guarantors”) jointly and severally (collectively hereinafter referred to as “Debtor”),
promise to pay to the order of Holder the sum of THIRTY THOUSAND DOLLARS AND ZERO CENTS ($30,000.00), plus any additional Late
Fee(s), plus interest on the entire outstanding Obligations at 18% per annum, compounded daily, 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 the following persons,
or any one of them, as the undersigned’s attorney-in-fact for the purpose of confessing judgment in favor of Sunjay Berdia,
to wit:


 


__________________________________________________


(insert name and address of Virginia Attorney)


 


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 Sunjay Berdia, in the amount of $30,000.00, 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 18% per annum, compounded
daily, 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.


 


Furthermore, Maker and Guarantors acknowledges
the Holders right to pursue the guarantee, the Collateral, the Guaranty, 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 or
	 	 	Eric Wagner, CFO, & Authorized
Representative
	 	 	 
	 	Innovative Logistics Techniques, Inc.
	 	 
	 	By:	 
	 	 	Richard Stewart, President or Eric
	 	 	Wagner, Treasurer, & Authorized
Representative





 





WITNESSED


 


	 	 


 


	Name:	 	 


 


GUARANTORS


 





	 	 
	William P. Danielczyk	 


 


	 	 
	Fred Gumbinner	 


 




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