Exhibit 10.26


 





		2672 Dow Avenue, Tustin, CA
    92780
      Tel: 714.630.6253 ·
    fax: 714.619.2339
                   email:
    tony@mlineholdings.com
                                Web
    site: www.mlineholdings.com




 


February 12, 2013


 


VStock Transfer, LLC


77 Spruce Street, Suite 201


Cedarhurst, NY 11516


 


Ladies and Gentlemen:


 


M Line Holdings, Inc., a Nevada corporation
(the “Company”) and JMJ Financial (the “Investor”) entered into a $335,000 Promissory Note (the “Note”)
dated February 12, 2014. A copy of the Note is attached hereto. You should familiarize
yourself with your issuance and delivery obligations, as Transfer Agent, contained therein. The shares to be issued are to be
registered in the names of the registered holder of the securities submitted for conversion.


 


You are hereby irrevocably authorized and
instructed to reserve a sufficient number of shares of common stock (“Common Stock”) of the Company (at least 60,000,000
(sixty million) shares of Common stock for the Note which should be held in reserve for the Investor as of this date) for issuance
upon full conversion of the Note in accordance with the terms thereof. The amount of Common Stock so reserved may be increased,
from time to time, by written instructions of the Company and the Investor. In the event of a reverse stock split the reserve should
remain unchanged unless instructed by the Investor and the Company.


 


The ability to process a notice
of conversion under the Note (a “Conversion Notice”) in a timely manner is a material obligation of the Company pursuant
to the Note. Your firm is hereby irrevocably authorized and instructed to issue shares of Common Stock of the Company (without
any restrictive legend) to the Investor without any further action or confirmation by the Company (from the reserve,
but in the event there are insufficient reserve shares of Common Stock to accommodate a Conversion Notice (defined below)
your firm and the Company agree that the Conversion Notice should be completed using authorized but unissued shares of Common
Stock that the Company has in its treasury): (A) upon your receipt from the Investor of: (i) a Conversion Notice executed by the
Investor; and (ii) an opinion of counsel of the Investor, in form, substance and scope customary for opinions of counsel in comparable
transactions (and satisfactory to the transfer agent), to the effect that the shares of Common Stock of the Company issued to
the Investor pursuant to the Conversion Notice are not “restricted securities” as defined in Rule 144 and should be
issued to the Investor without any restrictive legend, provided that the Company is current on its SEC filings; and (B) the number
of shares to be issued is less than 4.99% of the total issued common stock of the Company.


 


The Company hereby requests that your firm act immediately,
without delay and without the need for any action or confirmation by the Company with respect to the issuance of Common Stock pursuant
to any Conversion Notices received from the Investor.


 


The
Company shall indemnify you and your officers, directors, principals, partners, agents and representatives, and hold each of them
harmless from and against any and all loss, liability, damage, claim or expense (including the reasonable fees and disbursements
of its attorneys) incurred by or asserted against you or any of them arising out of or in connection the instructions set forth
herein, the performance of your duties hereunder and otherwise in respect hereof, including the costs and expenses of defending
yourself or themselves against any claim or liability hereunder, except that the Company shall not be liable hereunder as to matters
in respect of which it is determined that you have acted with gross negligence or in bad faith (which gross negligence or bad faith
must be determined by a final, non-appealable order, judgment, decree or ruling of a court of competent jurisdiction). You shall
have no liability to the Company in respect to any action taken or any failure to act in respect of this if such action
was taken or omitted to be taken in good faith, and you shall be entitled to rely in this regard on the advice of counsel.


 




    	 



    	 



    

 


The Board
of Directors of the Company has approved the foregoing (irrevocable instructions) and does hereby extend the Company’s irrevocable
agreement to indemnify your firm for all loss, liability or expense in carrying out the authority and direction herein contained
on the terms herein set forth.


 


If the Company’s account
is in arrears with the Transfer Agent, the Transfer Agent shall not have any obligation to act upon these instructions; however
the Investor shall have the option to cure the outstanding balance with the Transfer Agent.


 


The Company agrees that in the event
that the Transfer Agent resigns as the Company’s transfer agent, or if the Company decides to switch or terminate the current
Transfer Agent, the Company shall engage a suitable replacement transfer agent that will agree to serve as transfer agent for the
Company and be bound by the terms and conditions of these Irrevocable Instructions within five (5) business days.


 


The Investor is intended to be and
is third party beneficiary hereof, and no amendment or modification to the instructions set forth herein may be made without the
consent of the Investor.


 


	 	Very truly yours,
	 	 
	 	M Line Holdings, Inc.
	 	 	 
	 	By:	/s/ Bruce Barren
	 	 	Bruce Barren
	 	 	Chief Executive Officer


 


	Acknowledged and Agreed:	 
		 
	 	 
	JMJ Financial / Its Principal	 


 




    	 



    	 



    

 


	MLHC	 	 	Interest free if paid in full
	 	$335,000 PROMISSORY NOTE	within 3 months


 


FOR VALUE
RECEIVED, M Line Holdings, Inc., a Nevada corporation (the “Borrower”) with at least 75,016,275 common shares issued
and outstanding, promises to pay to JMJ Financial, a Nevada sole proprietorship, or its Assignees (the “Lender”) the
Principal Sum along with the Interest Rate and any other fees according to the terms herein. This Note will become effective only
upon execution by both parties and delivery of the first payment of Consideration by the Lender (the “Effective Date”).


 


The Principal Sum
is $335,000 (three hundred thirty five thousand) plus accrued and unpaid interest and any other fees. The Consideration is $300,000
(three hundred thousand) payable by wire (there exists a $35,000 original issue discount (the “OID”)). The Lender shall
pay $27,500 of Consideration upon closing of this Note. The Lender may pay additional Consideration to the Borrower in such amounts
and at such dates as Lender may choose in its sole discretion. THE PRINCIPAL SUM DUE TO LENDER SHALL BE PRORATED BASED ON THE
CONSIDERATION ACTUALLY PAID BY LENDER (PLUS AN APPROXIMATE 10% ORIGINAL ISSUE DISCOUNT THAT IS PRORATED BASED ON THE CONSIDERATION
ACTUALLY PAID BY THE LENDER AS WELL AS ANY OTHER INTEREST OR FEES) SUCH THAT THE BORROWER IS ONLY REQUIRED TO REPAY THE AMOUNT
FUNDED AND THE BORROWER IS NOT REQUIRED TO REPAY ANY UNFUNDED PORTION OF THIS NOTE. The Maturity Date is two years from the
Effective Date of each payment (the “Maturity Date”) and is the date upon which the Principal Sum of this Note, as
well as any unpaid interest and other fees, shall be due and payable. The Conversion Price is the lesser of $0.0235 or 60% of the
lowest trade price in the 25 trading days previous to the conversion (In the case that conversion shares are not deliverable by
DWAC an additional 10% discount will apply; and if the shares are ineligible for deposit into the DTC system and only eligible
for Xclearing deposit an additional 5% discount shall apply; in the case of both an additional cumulative 15% discount shall apply).
Unless otherwise agreed in writing by both parties, at no time will the Lender convert any amount of the Note into common stock
that would result in the Lender owning more than 4.99% of the common stock outstanding.


 


1.    ZERO
Percent Interest for the First Three Months. The Borrower may repay this Note at any time on or before 90 days from
the Effective Date, after which the Borrower may not make further payments on this Note prior to the Maturity Date without written
approval from Lender. If the Borrower repays a payment of Consideration on or before 90 days from the Effective Date of that
payment, the Interest Rate on that payment of Consideration shall be ZERO PERCENT (0%). If Borrower does not repay a payment
of Consideration on or before 90 days from its Effective Date, a one-time Interest charge of 12% shall be applied to the Principal
Sum. Any interest payable is in addition to the OID, and that OID (or prorated OID, if applicable) remains payable regardless of
time and manner of payment by Borrower.


 


2.    Conversion.
The Lender has the right, at any time after the Effective Date, at its election, to convert all or part of the outstanding and
unpaid Principal Sum and accrued interest (and any other fees) into shares of fully paid and non-assessable shares of common stock
of the Borrower as per this conversion formula: Number of shares receivable upon conversion equals the dollar conversion amount
divided by the Conversion Price. Conversions may be delivered to Borrower by method of Lender’s choice (including but not
limited to email, facsimile, mail, overnight courier, or personal delivery), and all conversions shall be cashless and not require
further payment from the Lender. If no objection is delivered from Borrower to Lender regarding any variable or calculation of
the conversion notice within 24 hours of delivery of the conversion notice, the Borrower shall have been thereafter deemed to have
irrevocably confirmed and irrevocably ratified such notice of conversion and waived any objection thereto. The Borrower shall deliver
the shares from any conversion to Lender (in any name directed by Lender) within 3 (three) business days of conversion notice delivery.


 


3.    Conversion
Delays. If Borrower fails to deliver shares in accordance with the timeframe stated in Section 2, Lender, at any time prior
to selling all of those shares, may rescind any portion, in whole or in part, of that particular conversion attributable to the
unsold shares and have the rescinded conversion amount returned to the Principal Sum with the rescinded conversion shares returned
to the Borrower (under Lender’s and Borrower’s expectations that any returned conversion amounts will tack back to
the original date of the Note). In addition, for each conversion, in the event that shares are not delivered by the fourth business
day (inclusive of the day of conversion), a penalty of $2,000 per day will be assessed for each day after the third business day
(inclusive of the day of the conversion) until share delivery is made; and such penalty will be added to the Principal Sum of the
Note (under Lender’s and Borrower’s expectations that any penalty amounts will tack back to the original date of the
Note).


 


4.    Reservation
of Shares. At all times during which this Note is convertible, the Borrower will reserve from its authorized and unissued Common
Stock to provide for the issuance of Common Stock upon the full conversion of this Note. The Borrower will at all times reserve
at least 60,000,000 shares of Common Stock for conversion.


 


5.    Piggyback
Registration Rights. The Borrower shall include on the next registration statement the Borrower files with SEC (or on the subsequent
registration statement if such registration statement is withdrawn) all shares issuable upon conversion of this Note. Failure to
do so will result in liquidated damages of 25% of the outstanding principal balance of this Note, but not less than $25,000, being
immediately due and payable to the Lender at its election in the form of cash payment or addition to the balance of this Note.


 


6.    Terms
of Future Financings. So long as this Note is outstanding, upon any issuance by the Borrower or any of its subsidiaries of
any security with any term more favorable to the holder of such security or with a term in favor of the holder of such security
that was not similarly provided to the Lender in this Note, then the Borrower shall notify the Lender of such additional or more
favorable term and such term, at Lender’s option, shall become a part of the transaction documents with the Lender. The types
of terms contained in another security that may be more favorable to the holder of such security include, but are not limited to,
terms addressing conversion discounts, conversion lookback periods, interest rates, original issue discounts, stock sale price,
private placement price per share, and warrant coverage.


 




    	 



    	 



    

 


7.    Default.
The following are events of default under this Note: (i) the Borrower shall fail to pay any principal under the Note when due and
payable (or payable by conversion) thereunder; or (ii) the Borrower shall fail to pay any interest or any other amount under the
Note when due and payable (or payable by conversion) thereunder; or (iii) a receiver, trustee or other similar official shall be
appointed over the Borrower or a material part of its assets and such appointment shall remain uncontested for twenty (20) days
or shall not be dismissed or discharged within sixty (60) days; or (iv) the Borrower shall become insolvent or generally fails
to pay, or admits in writing its inability to pay, its debts as they become due, subject to applicable grace periods, if any; or
(v) the Borrower shall make a general assignment for the benefit of creditors; or (vi) the Borrower shall file a petition for relief
under any bankruptcy, insolvency or similar law (domestic or foreign); or (vii) an involuntary proceeding shall be commenced or
filed against the Borrower; or (viii) the Borrower shall lose its status as “DTC Eligible” or the borrower’s
shareholders shall lose the ability to deposit (either electronically or by physical certificates, or otherwise) shares into the
DTC System; or (ix) the Borrower shall become delinquent in its filing requirements as a fully-reporting issuer registered with
the SEC; or (x) the Borrower shall fail to meet all requirements to satisfy the availability of Rule 144 to the Lender or its assigns
including but not limited to timely fulfillment of its filing requirements as a fully-reporting issuer registered with the SEC,
requirements for XBRL filings, and requirements for disclosure of financial statements on its website.


 


8.    Remedies.
In the event of any default, the outstanding principal amount of this Note, plus accrued but unpaid interest, liquidated damages,
fees and other amounts owing in respect thereof through the date of acceleration, shall become, at the Lender’s election,
immediately due and payable in cash at the Mandatory Default Amount. The Mandatory Default Amount means the greater of (i) the
outstanding principal amount of this Note, plus all accrued and unpaid interest, liquidated damages, fees and other amounts hereon,
divided by the Conversion Price on the date the Mandatory Default Amount is either demanded or paid in full, whichever has a lower
Conversion Price, multiplied by the VWAP on the date the Mandatory Default Amount is either demanded or paid in full, whichever
has a higher VWAP, or (ii) 150% of the outstanding principal amount of this Note, plus 100% of accrued and unpaid interest, liquidated
damages, fees and other amounts hereon. Commencing five (5) days after the occurrence of any event of default that results in the
eventual acceleration of this Note, the interest rate on this Note shall accrue at an interest rate equal to the lesser of 18%
per annum or the maximum rate permitted under applicable law. In connection with such acceleration described herein, the Lender
need not provide, and the Borrower hereby waives, any presentment, demand, protest or other notice of any kind, and the Lender
may immediately and without expiration of any grace period enforce any and all of its rights and remedies hereunder and all other
remedies available to it under applicable law. Such acceleration may be rescinded and annulled by Lender at any time prior to payment
hereunder and the Lender shall have all rights as a holder of the note until such time, if any, as the Lender receives full payment
pursuant to this Section 8. No such rescission or annulment shall affect any subsequent event of default or impair any right consequent
thereon. Nothing herein shall limit Lender’s right to pursue any other remedies available to it at law or in equity including,
without limitation, a decree of specific performance and/or injunctive relief with respect to the Borrower’s failure to timely
deliver certificates representing shares of Common Stock upon conversion of the Note as required pursuant to the terms hereof.


 


9.    No
Shorting. Lender agrees that so long as this Note from Borrower to Lender remains outstanding, Lender will not enter into or
effect “short sales” of the Common Stock or hedging transaction which establishes a net short position with respect
to the Common Stock of Borrower. Borrower acknowledges and agrees that upon delivery of a conversion notice by Lender, Lender immediately
owns the shares of Common Stock described in the conversion notice and any sale of those shares issuable under such conversion
notice would not be considered short sales.


 


10.    Assignability.
The Borrower may not assign this Note. This Note will be binding upon the Borrower and its successors and will inure to the benefit
of Lender and its successors and assigns and may be assigned by Lender to anyone without Borrower’s approval.


 


11.    Governing
Law. This Note will be governed by, and construed and enforced in accordance with, the laws of the State of Nevada, without
regard to the conflict of laws principles thereof. Any action brought by either party against the other concerning the transactions
contemplated by this Agreement shall be brought only in the state courts of Florida or in the federal courts located in Miami-Dade
County, in the State of Florida. Both parties and the individuals signing this Agreement agree to submit to the jurisdiction of
such courts.


 


12.
    Delivery of Process by Lender to Borrower. In the event of any
action or proceeding by Lender against Borrower, and only by Lender against Borrower, service of copies of summons and/or
complaint and/or any other process which may be served in any such action or proceeding may be made by Lender via U.S. Mail,
overnight delivery service such as FedEx or UPS, email, fax, or process server, or by mailing or otherwise delivering a copy
of such process to the Borrower at its last known attorney as set forth in its most recent SEC filing.


 


13.    Attorney
Fees. In the event any attorney is employed by either party to this Note with regard to any legal or equitable action, arbitration
or other proceeding brought by such party for the enforcement of this Note or because of an alleged dispute, breach, default or
misrepresentation in connection with any of the provisions of this Note, the prevailing party in such proceeding will be entitled
to recover from the other party reasonable attorneys’ fees and other costs and expenses incurred, in addition to any other
relief to which the prevailing party may be entitled.


 


14.    Opinion
of Counsel. In the event that an opinion of counsel is needed for any matter related to this Note, Lender has the right to
have any such opinion provided by its counsel. Lender also has the right to have any such opinion provided by Borrower’s
counsel.


 


15.    Notices.
Any notice required or permitted hereunder (including Conversion Notices) must be in writing and either personally served, sent
by facsimile or email transmission, or sent by overnight courier. Notices will be deemed effectively delivered at the time of transmission
if by facsimile or email, and if by overnight courier the business day after such notice is deposited with the courier service
for delivery.


 




    	 



    	 



    

 





	Borrower:	 	Lender:
	 	 	 
	/s/ Bruce Barren	 	 
	Bruce Barren	 	JMJ Financial
	M Line Holdings, Inc.	 	Its Principal
	Chief Executive Officer	 	







 





	Date:	 	 	Date:	 	 




 


[Signature Page to $335,000 Promissory
Note]


 




    	 



    	 



    

 


Broker-Dealer Wire Instruction Letter


 


To: JMJ Financial


 


M Line Holdings, Inc. requests that
JMJ Financial initially deduct a $2,500 fee and a 10% fee from all future Consideration the Lender advances to the Borrower under
the $335,000 Promissory Note dated February 12, 2014, between M Line Holdings, Inc. and JMJ Financial and that JMJ Financial concurrently
wires the fee directly to Equinox Securities (which operates as a licensed broker/dealer).


 


The 10% fee is funds belonging to M Line
Holdings, Inc. and deemed full and valid Consideration for payment of the Note. M Line Holdings, Inc. is simply requesting that
it’s funds be transferred to Equinox Securities on its behalf.





	 	 	 	 	 
	/s/ Bruce Barren	 	Date:	 	 
	Bruce Barren	 	 	 	 
	M Line Holdings, Inc.	 	 	 	 
	Chief Executive Officer	 	 	 	 
	 	 	 	 	 
	 	 	Date:	 	 
	Robert Gray	 	 	 	 
	Equinox Securities