Document:

Exhibit 10.24(10)

  

DEBT PURCHASE
AGREEMENT

 

THIS DEBT
PURCHASE AGREEMENT (this “Agreement”) is made and entered into as of the 15th day of January,
2015, by and among TCA GLOBAL CREDIT MASTER FUND, LP, a Cayman Islands limited partnership, with an address of 3960 Howard
Hughes Parkway, Suite 500, Las Vegas, NV 89169 (“Assignor” or “Lender”), ICONIC
HOLDINGS, LLC, a Delaware limited liability company, with an address of 7200 Wisconsin Ave., Suite 206, Bethesda, MD 20816
(“Assignee”), and M LINE HOLDINGS, INC., a Nevada corporation (the “Issuing Borrower”),
E.M. TOOL COMPANY, INC., a California corporation, and PRECISION AEROSPACE AND TECHNOLOGIES, INC. (f/k/a Eran Engineering,
Inc.), a Nevada corporation (together with the Issuing Borrower, the “Borrowers”).

 

WITNESSETH

 

WHEREAS,
the Borrowers and Lender entered into a Credit Agreement dated as of March 31, 2013, but made effective as of April 30, 2013,
together with First Amendment to Credit Agreement dated effective as of September 27, 2013 (collectively, together with any other
amendments, renewals, substitutions, replacements or modifications from time to time, the “Credit Agreement”);
and

 

WHEREAS,
pursuant to the Credit Agreement, the Borrowers executed and delivered to Lender that certain Revolving Note dated as of March
31, 2013, but made effective as of April 30, 2013, evidencing Revolving Loans under the Credit Agreement (the “Revolving
Note”); and

 

WHEREAS,
the Borrowers, other guarantors, and Lender entered into that certain Settlement Agreement dated as of September 8, 2014 (the
“Settlement Agreement”) in connection with the obligations of the Borrowers under the Credit Agreement
and Revolving Note; and

 

WHEREAS,
Assignee desires to purchase from Lender, and Lender is amenable to selling and assigning to Assignee, Assignor’s right,
title and interest in and to a portion of the monetary obligations evidenced by the Revolving Note, such portion being equal to
One Million Two Hundred Thousand Dollars ($1,200,000.00) of the monetary obligations evidenced by the Revolving Note (the “Assigned
Debt”), which Assigned Debt shall be purchased by Assignee in tranches as more specifically hereinafter set forth;
and

 

WHEREAS,
on or prior to each “Purchase Tranche Closing” (as hereinafter defined), as directed by Lender, the Borrowers agree
to sever, split, divide and apportion the Revolving Note (or any replacement notes issued in replacement thereof as hereby contemplated,
as applicable) into two separate and distinct replacement notes, each in substantially the same form as the Revolving Note, one
for the amount of the portion of the Assigned Debt being sold and assigned at such Purchase Tranche Closing (the portion of the
Assigned Debt being sold and assigned at each separate Purchase Tranche Closing, as applicable, being referred to as the “Applicable
Assigned Debt”), and one for the remaining amount of the overall debt evidenced by the Revolving Note (or any replacement
notes issued in replacement thereof as hereby contemplated, as applicable);

 

NOW, THEREFORE,
in consideration of the mutual covenants hereinafter set forth, and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged and agreed, Assignor, Assignee, and Borrowers hereby covenant and agree as follows:

  

1.          Recitals.
The recitations set forth in the preamble of this Agreement are true and correct and incorporated herein by this reference.

 

    	1

    	 

    

 

2.          Agreement
to Assign Assigned Debt. 

 

(a)          Purchase
Tranche Closings. Provided there is no default or breach under this Agreement, and that no event has occurred that, with
the passage of time, the giving of notice, or both, would constitute a default or breach under this Agreement, then Assignor
hereby agrees to sell and assign to Assignee, and Assignee hereby agrees to purchase from Assignor, the Assigned Debt, which
Assigned Debt shall be sold in fifteen (15) separate tranches (each of such tranches hereinafter referred to as a “Purchase
Tranche”), each of such separate Purchase Tranches to be sold and assigned on the respective dates and
for the respective amounts set forth in the schedule attached hereto as Exhibit “A” (each closing
of a Purchase Tranche referred to as a “Purchase Tranche Closing” and the purchase price to be paid
for each Applicable Assigned Debt at each Purchase Tranche Closing, as shown on such attached schedule, referred to as the “Applicable
Purchase Price”); provided, however, nothing herein shall prevent Assignee from electing to purchase a greater
portion of the Assigned Debt than that set forth in the attached schedule for any given Purchase Tranche Closing, up to the
aggregate amount of the Assigned Debt, by written notice to Assignor delivered prior to the applicable Purchase Tranche
Closing.

 

(b)          Deliveries
at Each Purchase Tranche Closing. At each Purchase Tranche Closing: (i) Lender shall execute and deliver to Assignee, an assignment
of the Applicable Assigned Debt being sold and assigned at such Purchase Tranche Closing, substantially in the form attached hereto
as Exhibit “B” (each, an “Assignment”); (ii) Lender shall deliver to Assignee
the original replacement note for the Applicable Assigned Debt being sold and assigned at such Purchase Tranche Closing (subject
to receipt of same by Lender from Borrowers as provided in Section 2(c) below); and (iii) Assignee shall pay to Lender the Applicable
Purchase Price for the Applicable Assigned Debt being sold and assigned at such Purchase Tranche Closing, by wire transfer of
good and cleared U.S. currency to an account designated by Lender.

 

(c)          Borrowers’
Obligation to Sever Notes. On or prior to each Purchase Tranche Closing, and within no later than three (3) business days
after request therefor is made by Lender to Borrowers, the Borrowers agree to sever, split, divide and apportion the Revolving
Note (or any replacement notes issued in replacement thereof as hereby contemplated, as applicable) into two separate and distinct
replacement notes, each in substantially the same form as the Revolving Note. One of such replacement notes shall be for a principal
amount equal to the Applicable Purchase Price corresponding to the Applicable Assigned Debt for the applicable Purchase Tranche
Closing, and the second replacement note shall be for a principal amount equal to the remaining amount of the overall debt then
existing and evidenced by the Revolving Note (or any replacement notes issued in replacement thereof as hereby contemplated, as
applicable). In order to clarify the foregoing, as an example, on or prior to the first Purchase Tranche Closing contemplated
hereby, upon request by Lender, the Borrowers shall provide to Lender two replacement notes in replacement of the Revolving Note,
one for $100,000, which is the Applicable Purchase Price for the Applicable Assigned Debt being sold and assigned at the first
Purchase Tranche Closing, and the second for $2,368,395.90 (as of January 15, 2015), which is the amount of the overall debt evidenced
by the Revolving Note, less the Applicable Purchase Price for the first replacement note being sold and assigned at the first
Purchase Tranche Closing. This second replacement note shall then be severed in the same manner for the second Purchase Tranche
Closing, and this foregoing process of severing and issuing replacement notes shall be repeated for each Purchase Tranche Closing,
until the Assigned Debt is sold and assigned in full, or this Agreement is otherwise earlier terminated in accordance with its
terms. Assignee acknowledges and understands that Lender’s obligation to sell, assign and deliver each original replacement
note representing the Applicable Assigned Debt at each Purchase Tranche Closing is subject to and conditioned upon Borrowers executing
and delivering such replacement notes to Lender in accordance with this Agreement. Immediately after the sale, assignment and
transfer of each replacement note representing the Applicable Assigned Debt, and payment of the Applicable Purchase Price therefor
to Assignor, Assignee will exchange any replacement note evidencing the Applicable Assigned Debt received from Assignor with the
Borrowers for a new replacement or exchange note in Assignee’s name (an “Exchange Note”) upon
terms and conditions acceptable to Assignee and as otherwise agreed upon between Borrowers and Assignee. In connection therewith,
the Borrowers also agree to execute supporting documents for each Exchange Note including, but not limited to, a board resolution
for the issuance of each Exchange Note, an exchange agreement, and a letter of instruction with its transfer agent reserving shares
for the conversion of each Exchange Note, all as may be required by Assignee.

 

    	2

    	 

    

 

(d)          Remaining
Debt. Assignee acknowledges that at each Purchase Tranche Closing, and subject to Lender’s receipt of the Applicable
Purchase Price, only the Applicable Assigned Debt represented by the specific replacement note representing the applicable Purchase
Tranche shall be deemed sold and assigned hereunder, it being acknowledged by Assignee that the remaining portion of the debt
evidenced by the Revolving Note (or any replacement notes issued in replacement thereof as hereby contemplated, as applicable)
shall not be sold or assigned thereby unless and until additional replacement notes for additional Purchase Tranches are thereafter
sold in accordance with this Agreement and the Applicable Purchase Price therefor is received by Lender. Moreover, any portion
of the debt evidenced by the Revolving Note other than the Assigned Debt (the “Remaining Debt”) shall
not be part of this Agreement and shall not be subject to sale or assignment hereunder.

 

(e)          No
Security Rights. Assignee hereby agrees and acknowledges that the sale, transfer and assignment of the Assigned Debt, or any
portion thereof, shall be a sale, transfer and assignment of the monetary obligations evidenced by such Assigned Debt (or portion
thereof) only, and shall not include, and such sale, transfer and assignment expressly excludes, the Remaining Debt, as well as
excluding any and all security rights, rights to any collateral, or any other security interests or rights of Assignor of any
nature or kind related to, arising under, or pursuant to, the Credit Agreement, any other “Loan Documents” (as defined
in the Credit Agreement) related thereto, or any other security agreements, UCC financing statements, or any other documents or
instruments relating to the obligations of the Borrowers to Assignor (collectively, the “Security Rights”),
it being agreed and acknowledged that all Security Rights shall remain with Assignor, as security for any portion of the Assigned
Debt not assigned at any Purchase Tranche Closing, the Remaining Debt, or any other obligations of Borrowers to Assignor.

 

(f)          Additional
Lender Agreements.

 

(i)          Subsequent
Acquisitions. The parties acknowledge and recognize that pursuant to the terms of the Credit Agreement, Borrowers are prohibited
from engaging, closing or otherwise undertaking any number of transactions, including acquisitions, without the prior written consent
of the Lender. In this regard, the Lender agrees that, provided there is no default or breach under this Agreement by Assignee
or Borrowers, and that no event has occurred that, with the passage of time, the giving of notice, or both, would constitute a
default or breach under this Agreement by Assignee or Borrowers, then Assignor hereby agrees that it will not unreasonably withhold
its consent to any proposed acquisitions sought to be undertaken by Borrowers after the Effective Date. Borrowers agree to provide
to Lender any and all information requested by Lender with respect to any such contemplated acquisitions, so that Lender can promptly
evaluate same in connection with its decision to grant or withhold such required consent.

 

(ii)         Prior
Release of Equipment. Lender hereby confirms that the definition of “Collateral” under the Security Agreement
executed and delivered in connection with the Credit Agreement has been and remains effectively amended to exclude the five (5)
pieces of equipment listed on Exhibit “A” to the Settlement Agreement from the lien and encumbrance
of Lender’s security interest under the Security Agreement.

 

    	3

    	 

    

 

3.           Conditions
to Purchases. 

 

(a)          Initial
Purchase. The initial Purchase Tranche contemplated hereunder shall not be closed and funded unless and until the
following initial conditions precedent (the “Initial Conditions”) are first satisfied, or
waived by Assignee in writing:

 

(i)          Increase
in Borrower’s Authorized Shares. The Issuing Borrower shall have increased its authorized shares of “Common Stock”
(as defined in the Credit Agreement) to not less than 10 billion shares; and

 

(ii)         Current
Filings. The Issuing Borrower shall be current in all of its required filings with the Securities and Exchange Commission
(the “SEC”).

 

Borrowers agree to diligently
pursue satisfaction of the foregoing Initial Conditions, and Borrowers and Assignee hereby agree to keep Lender fully apprised
of the progress in satisfying such Initial Conditions. In the event the foregoing Initial Conditions are not satisfied on or prior
to a date that is forty-five (45) days from the Effective Date, then this Agreement shall automatically terminate upon the end
of such forty-five (45) day period (unless Assignee waives such Initial Conditions in writing on or prior to the end of such forty-five
(45) day period), whereupon this Agreement shall be deemed terminated. In the event the Initial Conditions are not fulfilled due
to certain matters which are not within the control of Borrowers, the forty-five (45) day period will be extended, in the reasonable
discretion of Assignor, provided Borrowers are not then in default and are diligently prosecuting the fulfillment of the Initial
Conditions. In no event, however, shall such time period be extended beyond seventy-five (75) days from the Effective Date. Matters
which would provide a reasonable basis for approval of an extension include delay by the external auditors or a regulatory or governmental
agency delay.

 

(b)          Additional
Purchases. If the first Purchase Tranche Closing is consummated hereunder, and the Applicable Purchase Price therefor is paid
and received by Lender as contemplated under this Agreement, then Assignee’s obligation to purchase any additional Purchase
Tranches as hereby contemplated is a binding and continuing obligation of Assignee; provided, however, Assignee shall have the
right to terminate such obligation at any time during the term of this Agreement upon the occurrence of any of the following events
(each a “Trigger Event”): (i) the Issuing Borrower fails to stay current in its filing obligations with
the SEC; (ii) trading of the Issuing Borrower’s Common Stock on the OTCPINK is stopped or halted for any reason; (iii) any
suspension of electronic trading or settlement services by the Depository Trust Company (“DTC”) with
respect to the Common Stock occurs and is continuing, or any receipt by the Issuing Borrower of any notice from DTC to the effect
that a suspension of electronic trading or settlement services by DTC with respect to the Common Stock is being imposed or is
contemplated (unless, prior to such suspension, DTC shall have notified the Issuing Borrower in writing that DTC has determined
not to impose any such suspension); (iv) the Issuing Borrower is in default with its transfer agent (the “Transfer
Agent”), or the Transfer Agent fails to issue to Assignee any shares of the Issuing Borrower’s Common
Stock which may be due to Assignee in connection with any conversion rights exercised by Assignee under any promissory notes purchased
by Assignee hereunder, or notes issued in replacement thereof; (v) the Issuing Borrower fails to maintain its active status with
the State of Nevada; (vi) Borrowers shall default (beyond any applicable notice and cure periods) in any of their obligations
to Assignee under the promissory notes purchased by Assignee hereunder, or notes issued in replacement thereof, or any other obligations
of Borrowers to Assignee; (vii) the Issuing Borrower’s average daily dollar trading volume over any five-day period is less
than $10,000 per day; (viii) the Issuing Borrower fails to maintain any share reserve required by Assignee; or (ix) any shares
of Common Stock issued upon conversion of the Assigned Debt cannot be sold under Rule 144 as a result of any failure to meet the
requirements of Rule 144 not caused by Purchaser. Upon the occurrence of a Trigger Event, in the event Assignee desires to terminate
its obligation to purchase Purchase Tranches as hereby contemplated, Assignee shall deliver to Lender written notice of such termination
delivered within five (5) days of the occurrence of the Trigger Event (which notice shall include a statement of the Trigger Event
that has occurred and reasonable evidence of the occurrence thereof), whereupon Assignee’s obligation to purchase any additional
Purchase Tranches thereafter shall immediately terminate and be of no further force or effect.

 

    	4

    	 

    

 

4.           Representations
and Warranties of Assignor. Assignor makes the following representations and warranties to Assignee, each of which shall be
deemed made as of the Effective Date, and re-made as of each Purchase Tranche Closing:

 

(a)          Assignor
is the legal and equitable owner of Assignor’s right, title and interest in and to the Assigned Debt, except for any portion
of the Assigned Debt previously sold and assigned to Assignee pursuant to this Agreement; and

 

(b)          Assignor
has not sold, transferred, assigned, pledged, hypothecated, or otherwise encumbered the Assigned Debt, or any portion thereof,
except for any portion of the Assigned Debt previously sold and assigned to Assignee pursuant to this Agreement; and

 

(c)          The
Assignor is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization
with full right, corporate, partnership or other applicable power and authority to enter into and to consummate the transactions
contemplated by this Agreement and otherwise to carry out its obligations hereunder, and the execution, delivery and performance
by the Assignor of the transactions contemplated by this Agreement have been duly authorized by all necessary corporate, partnership,
or similar action on the part of the Assignor.

 

(d)          Except
for the foregoing representations and warranties, this Agreement and each Assignment is made by Assignor without recourse, representation
or warranty of any nature or kind, express or implied, and Assignor specifically disclaims any warranty, guaranty or representation,
oral or written, past, present or future with respect to the Assigned Debt, any portion thereof, or any instruments evidencing
same, including, without limitation: (i) the validity, effectiveness or enforceability of the Assigned Debt, any portion thereof,
or any instruments evidencing same; (ii) the validity, existence, or priority of any lien or security interest securing the obligations
of Borrowers or any other Credit Parties evidenced by the Assigned Debt, any portion thereof, or any instruments evidencing same;
(iii) the existence of, or basis for, any claim, counterclaim, defense or offset relating to the Assigned Debt, any portion thereof,
or any instruments evidencing same; (iv) the financial condition of the Borrowers, or any other Credit Parties or guarantor or
obligor liable under the Assigned Debt, any portion thereof, or any instruments evidencing same, or the ability of any such parties
to pay or perform their respective obligations under the Assigned Debt, any portion thereof, or any instruments evidencing same;
(v) the compliance of the Assigned Debt, any portion thereof, or any instruments evidencing same with any laws, ordinances or
regulations of any governmental agency or other body; (vi) the value or condition of any collateral securing the obligations under
the Assigned Debt, any portion thereof, or any instruments evidencing same; and (vii) the future performance of the Borrowers
or any other Credit Parties or guarantor or obligor liable under the Assigned Debt, any portion thereof, or any instruments evidencing
same. Assignee acknowledges and represents to Assignor that Assignee has been given the opportunity to undertake its own investigations
of the Borrowers, the Assigned Debt, any portion thereof, or any instruments evidencing same, and having undertaken and performed
all such investigations as Assignee deemed necessary or desirable, Assignee represents, warrants and agrees that it is relying
solely on its own investigation of the Borrowers, the Assigned Debt, any portion thereof, or any instruments evidencing same,
and not any information whatsoever provided or to be provided by Assignor, or any representation or warranty of Assignor. This
Agreement, and each Assignment of the Assigned Debt, or portion thereof, as provided for herein is made on an “AS
IS,” “WHERE IS” basis, with all faults, and Assignee, by acceptance of this Agreement and
each Assignment, shall be deemed to have agreed and acknowledged that Assignor has fully performed, discharged and complied with
all of Assignor’s obligations, representations, warranties, covenants and agreements hereunder, that Assignor is discharged
therefrom, and that Assignor shall have no further liability with respect thereto, except only for those express warranties contained
in this Agreement, and Assignee, by such acceptance, expressly acknowledges that ASSIGNOR MAKES NO WARRANTY OR REPRESENTATIONS,
EXPRESS OR IMPLIED, OR ARISING BY OPERATION OF LAW, RELATING TO THE ASSIGNED DEBT, ANY PORTION THEREOF, OR ANY INSTRUMENTS EVIDENCING
SAME, EXCEPT AS SPECIFICALLY SET FORTH HEREIN.

 

    	5

    	 

    

 

5.           Representations
and Warranties of Assignee.    Assignee makes the following representations and warranties to Assignor,
each of which shall be deemed made as of the Effective Date, and re-made as of each Purchase Tranche Closing:

 

(a)          The
Assignee is a legally recognized entity duly organized, validly existing and in good standing under the laws of the jurisdiction
of its organization with full right, corporate, partnership of other applicable power and authority to enter into and to consummate
the transactions contemplated by this Agreement and otherwise to carry out its obligations hereunder, and the execution, delivery
and performance by the Assignee of the transactions contemplated by this Agreement have been duly authorized by all necessary corporate
or similar action on the part of the Assignee.

 

(b)          This
Agreement, when executed and delivered by the Assignee, will constitute a valid and legally binding obligation of the Assignee,
enforceable against the Assignee in accordance with its terms, except: (i) as limited by applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance, and any other laws of general application affecting enforcement of creditors’ rights generally;
or (ii) as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies.

 

(c)          The
Assignee: (i) either alone or together with its representatives, has such knowledge and experience in financial and business matters
as to be capable of evaluating the merits and risks of this investment and make an informed decision to so invest, and has so evaluated
the risks and merits of such investment; (ii) has the ability to bear the economic risks of this investment and can afford a complete
loss of such investment; (iii) understands the terms of and risks associated with the acquisition of the Assigned Debt, or any
portion thereof, or any instruments evidencing same, including, without limitation, a lack of liquidity, price transparency or
pricing availability and risks associated with the industry in which the Borrower operates; (iv) has had the opportunity to review
the Borrowers, its business, its financial condition, its prospects, the Credit Agreement, the Assigned Debt, any portion thereof,
or any instruments evidencing same, all as the Assignee has determined to be necessary in connection with this Agreement and the
assignments contemplated hereby.

 

(d)          The
Assignee understands that: (i) the Assigned Debt, any portion thereof, or any instruments evidencing same, have not been registered
under the Securities Act of 1933 (the “Securities Act”) or the securities laws of any state; (ii) the
Assigned Debt, any portion thereof, or any instruments evidencing same, is and will be “restricted securities” as
said term is defined in Rule 144 of the Rules and Regulations promulgated under the Securities Act (“Rule 144”);
(iii) the Assigned Debt, any portion thereof, or any instruments evidencing same, may not be sold, pledged or otherwise transferred
unless a registration statement for such transaction is effective under the Securities Act and any applicable state securities
laws, or unless an exemption from such registration is available with respect to such transaction; and (iv) the Assigned Debt,
any portion thereof, or any instruments evidencing same, will restrictive legends as to the foregoing in customary form.

    	6

    	 

    

 

(e)          The
Assignee is not accepting this Agreement or any Assignment as a result of any advertisement, article, notice or other communication
regarding the Assigned Debt, any portion thereof, or any instruments evidencing same published in any newspaper, magazine, internet
or social media, broadcast over television or radio, presented at any seminary, or under any other media generally circulated or
available to the public or any other general solicitation or general advertisement.

 

(f)          Neither
the execution and delivery of this Agreement, or any Assignment, nor the consummation of the transactions contemplated hereby,
does or will violate any constitution, statute, regulation, rule, injunction, judgment, order, decree, ruling, charge or other
restriction of any government, governmental agency, or court to which the Assignee is subject or any provision of its organizational
documents or other similar governing instruments, or conflict with, violate or constitute a default under any agreement, credit
facility, debt or other instrument or understanding to which the Assignee is a party, The Assignee has consulted such legal, tax
and investment advisors as it, in its sole discretion, has deemed necessary or appropriate in connection with this Agreement and
the assignment of the Assigned Debt, any portion thereof, or any instruments evidencing same as contemplated hereby.

 

(g)          There
is no action, suit, proceeding, judgment, claim or investigation pending, or to the knowledge of the Assignee, threatened against
the Assignee which could reasonably be expected in any manner to challenge or seek to prevent, enjoin, alter or materially delay
any of the transactions contemplated hereby.

 

(h)          No
authorization, consent, approval or other order of, or declaration to or filing with, any governmental agency or body or other
Person is required for the valid authorization, execution, delivery and performance by the Assignee of this Agreement and the consummation
of the transactions contemplated hereby.

 

(i)          The
Assignee hereby acknowledges that the Assigned Debt, any portion thereof, or any instruments evidencing same may only be disposed
of in compliance with state and federal securities laws. The Assignee further acknowledges that in connection with any transfer
of the Assigned Debt, any portion thereof, or any instruments evidencing same subsequent to the date hereof and other than pursuant
to an effective registration statement, or an applicable exemption to such registration requirements, the Borrower and/or the Borrower’s
transfer agent may require an opinion of counsel, the form and substance of which opinion shall be reasonably satisfactory to the
Borrower and/or the Borrower’s transfer agent, as applicable.

 

6.          Borrower
Acknowledgments. Borrowers hereby represent and warrant that the obligations evidenced by the Revolving Note, including, without
limitation, all obligations for the Assigned Debt and the Remaining Debt, are valid and enforceable obligations of the Borrowers
subject to no defenses, setoffs, counterclaims, cross-actions or equities in favor of the Borrowers, and to the extent the Borrowers
have any defenses, setoffs, counterclaims, cross-actions or equities against Assignor and/or against the enforceability of any
such obligations, the Borrowers acknowledge and agree that same are hereby fully and unconditionally waived by the Borrowers. The
Borrowers further acknowledge their obligations under Section 2(c) above, and agree to timely and promptly deliver replacement
notes to Lender as required by this Agreement. The Borrowers further acknowledge that the Assigned Debt only represents a portion
of the obligations due or owing under the Revolving Note, and that the Assigned Debt is only being assigned hereunder in Purchase
Tranches as contemplated above. In that regard, the Borrowers further acknowledge that the Remaining Debt, and any portion of the
Assigned Debt for which the Applicable Purchase Price therefor has not been received by Lender, are and remain valid and enforceable
obligations of the Borrowers. Borrowers agree and acknowledge that each of them is and shall remain liable to pay the Remaining
Debt, and any portion of the Assigned Debt for which the Applicable Purchase Price therefor has not been received by Lender, as
same becomes due in accordance with the terms of the Credit Agreement and the Revolving Note, or any replacement notes issued in
replacement thereof as hereby contemplated, and nothing contained herein shall be deemed or construed any waiver or to otherwise
excuse performance by Borrowers under their obligations to Lender.

 

    	7

    	 

    

 

7.          
RELEASE. AS A MATERIAL INDUCEMENT FOR LENDER TO AGREE TO ENTER INTO THIS AGREEMENT, BORROWERS AND ASSIGNEE HEREBY RELEASE
LENDER, TOGETHER WITH ALL OF ITS PARTNERS AND AFFILIATES, AND THE OFFICERS, MEMBERS, DIRECTORS, PARTNERS, EMPLOYEES, AGENTS AND
ATTORNEYS OF EACH OF THE FOREGOING, FROM ALL CLAIMS, CAUSES OF ACTION AND LIABILITIES OF ANY NATURE OR KIND IN ANY WAY RELATING,
DIRECTLY OR INDIRECTLY, TO THE ASSIGNED DEBT, ANY COLLATERAL SECURING ANY OBLIGATIONS THEREUNDER, THIS AGREEMENT, OR ANY OTHER
DEBTS OR OBLIGATIONS IN ANY WAY RELATING TO THE CREDIT AGREEMENT, TO THE EXTENT ARISING ON OR PRIOR TO THE DATE HEREOF, INCLUDING,
WITHOUT LIMITATION, ANY AND ALL CLAIMS ARISING FROM OR RELATING TO NEGOTIATIONS, DEMANDS, REQUESTS OR EXERCISE OF REMEDIES IN CONNECTION
WITH THE ASSIGNED DEBT, THIS AGREEMENT, ANY OTHER DEBTS OR OBLIGATIONS IN ANY WAY RELATING TO THE CREDIT AGREEMENT, AND ANY AND
ALL FEES OR CHARGES COLLECTED IN CONNECTION WITH TIIE ASSIGNED DEBT, THIS AGREEMENT, OR ANY OTHER DEBTS OR OBLIGATIONS IN ANY WAY
RELATING TO THE, CREDIT AGREEMENT. MOREOVER UPON DELIVERY OF EACH ASSIGNMENT HEREUNDER, THE FOREGOING RELEASE SHALL BE DEEMED AUTOMATICALLY
RE-MADE AND EFFECTIVE FOR ALL CLAIMS, CAUSES OF ACTION AND LIABILITIES OF ANY NATURE OR KIND COVERED HEREBY TO THE EXTENT ARISING
ON OR PRIOR TO THE DATE OF SUCH ASSIGNMENT.

 

8.            Default
and Termination.

 

(a)          Breach
By Assignor. In the event Assignor shall breach any of its covenants or agreements hereunder, and such breach is not cured
within thirty (30) days after Assignor’s receipt of written notice of such breach from Assignee, which notice shall specify
the breach with specificity, then Assignee’s sole and exclusive remedy hereunder shall be to terminate this Agreement upon
written notice to Assignor, whereupon this Agreement shall terminate and Assignor and Assignee shall have no further obligation,
each to the other, under this Agreement. Assignor and Assignee agree that the foregoing exclusive remedy will be adequate and
each of them agrees that Assignee shall not have any other remedies, at law or in equity, for any breach by Assignor not cured
within any applicable notice and cure period, other than termination of this Agreement as hereby provided.

 

(b)          Breach
By Assignee. In the event Assignee shall breach any of its covenants or agreements hereunder, and such breach is not cured
within thirty (30) days after Assignee’s receipt of written notice of such breach from Assignor, which notice shall specify
the breach with specificity, then Assignor’s sole and exclusive remedy hereunder shall be to terminate this Agreement upon
written notice to Assignee, whereupon this Agreement shall terminate and Assignor and Assignee shall have no further obligation,
each to the other, under this Agreement. Assignor and Assignee agree that the foregoing exclusive remedy will be adequate and each
of them agrees that Assignor shall not have any other remedies, at law or in equity, for any breach by Assignee not cured within
any applicable notice and cure period, other than termination of this Agreement as hereby provided. Notwithstanding the foregoing
to the contrary, the foregoing notice and cure period shall not be applicable with respect to Assignee’s failure to pay the
Applicable Purchase Price at a Purchase Tranche Closing, and any such failure shall be deemed an immediate breach hereunder, entitling
Assignor to avail itself of the exclusive termination remedy hereby provided immediately upon such failure to pay the Applicable
Purchase Price at a Purchase Tranche Closing.

 

    	8

    	 

    

 

(c)          Breach
by Borrower. Any breach by Borrower under this Agreement, if such breach is not cured within thirty (30) days after Borrower’s
receipt of written notice of such breach from the party alleging such breach, shall be deemed an event of default by Borrower under
the Credit Agreement, and any such breach may be enforced by Assignor through any remedies available to Assignor, at law or in
equity, or under the Credit Agreement. Borrower shall have no rights to enforce this Agreement as against Assignor or Assignee,
nor shall any breach or default by Assignor or Assignee hereunder in any way abrogate, limit, or otherwise affect Borrower’s
obligations under the Credit Agreement and related Loan Documents.

 

9.          Waiver;
Forbearance. The parties recognize and acknowledge that by entering into this Agreement, the Lender is not waiving any
rights of remedies it may have under any of the Loan Documents, any defaults of Events of Default arising thereunder, of any
judgments previously obtained by Lender in connection therewith (collectively, the “Existing
Rights”); provided, however, that Lender hereby agrees that, commencing on the “Debt Condition
Date” (as hereinafter defined), Lender agrees that it shall not thereafter enforce, and Lender shall thereafter forbear
from pursuing enforcement of, any of its Existing Rights, unless and until an additional default or Event of Default occurs
(either by Borrower or any other Person other than Lender) under the Credit Agreement, any other Loan Documents, this
Agreement, or any of the “Payment Agreements” (as hereinafter defined), whereupon the foregoing forbearance shall
automatically become null and void and of no further force or effect, without any further notice or demand from Lender. For
purposes of this Agreement, the term “Debt Condition Date” shall mean the date when the following
two conditions are satisfied to Lender’s reasonable satisfaction: (i) Borrower enters into a comprehensive set of
agreements with other third parties (the “Payment Agreements”), pursuant to which Borrowers intend
to pay off in full the entire amount of the Assigned Debt and Remaining Debt, or any other transaction which would satisfy
the judgments and the entire amount of the Assigned Debt and the Remaining Debt, which Payment Agreements are intended to
include, without limitation, this Agreement and another asset based lending credit facility for Borrowers; and (ii) the
Payment Agreements are reviewed and approved by Lender, such approval not to be unreasonably withheld.
Notwithstanding anything contained in this Agreement, the forbearance described in this Section 9 shall commence upon the
filing of the Motion to Vacate in accordance with the Second Amendment to the Credit Agreement, being executed simultaneously
herewith. In addition, notwithstanding anything contained in this Agreement to the contrary, the Lender shall have the right,
at any time, to accept payment in full of the then outstanding Assigned Debt and Remaining Debt, whether in connection with
the Payment Agreements, or otherwise, and in such event, Lender shall have the absolute right to terminate this Agreement
with respect to any portion of the Assigned Debt not yet sold and assigned to Assignee as of such date. Assignee and or
Borrowers may prepay the Assigned Debt and the Remaining Debt, whether in connection with the Payment Agreements, or
otherwise, without penalty.

 

10.         
Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Nevada, which
also govern the Revolving Note.

 

11.          Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors
and assigns.

 

12.          Headings.
The headings of the paragraphs of this Agreement have been included only for convenience, and shall not be deemed in any manner
to modify or limit any of the provisions of this Agreement or used in any manner in the interpretation of this Agreement.

 

    	9

    	 

    

 

13.         Interpretation.
Whenever the context so requires in this Agreement, all words used in the singular shall be construed to have been used in the
plural (and vice versa), each gender shall be construed to include any other genders, and the word “Person”
shall be construed to include a natural person, a corporation, a firm, a partnership, a joint venture, a trust, an estate
or any other entity.

 

14.         Partial
Invalidity. Each provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law. If any
provision of this Agreement or the application of such provision to any person or circumstances shall, to any extent, be invalid
or unenforceable, then the remainder of this Agreement, or the application of such provision to persons or circumstances other
than those as to which it is held invalid or unenforceable, shall not be affected by such invalidity or unenforceability.

 

15.         Execution.
This Agreement may be executed in one or more counterparts, all of which taken together shall be deemed and considered one and
the same Agreement, and same shall become effective when counterparts have been signed by each party and each party has delivered
its signed counterpart to the other party. In the event that any signature is delivered by facsimile transmission or by e-mail
delivery of a “.pdf” format file or other similar format file, such signature shall be deemed an original for all purposes
and shall create a valid and binding obligation of the party executing same with the same force and effect as if such facsimile
or “.pdf” signature page was an original thereof.

 

16.         Effective
Date. For purposes of this Agreement, the “Effective Date” shall mean the date when this Agreement
becomes fully executed by all parties hereto.

 

[Signatures on the following page]

 

    	10

    	 

    

 

IN WITNESS WHEREOF, Assignor, Assignee,
and Borrower have executed this Agreement as of the date above first written.

 

	 	Assignor:
	 	 
	 	TCA GLOBAL CREDIT MASTER FUND, LP

 

	 	By:	TCA Global Credit Fund GP, Ltd.
	 	Its:	General Partner
	 	 	 
	 	By:	/s/ Robert
    Press
	 	 	Robert Press, Director
	 	 	 
	 	Date:	2/25/15

 

	 	Assignee:
	 	 
	 	ICONIC HOLDINGS, LLC, a Delaware limited liability
    company
	 	 	 
	 	By:	/s/ Robert
    Papiri
	 	Name: 	Robert Papiri
	 	Title:	Manager
	 	 	 
	 	Date:	February 24, 2015

 

    	11

    	 

    

 

IN WITNESS WHEREOF, Assignor, Assignee,
and Borrower have executed this Agreement as of the date above first written.

 

Borrowers:

 

M LINE HOLDINGS, INC.,

a Nevada corporation

  

	By:	/s/ Anthony L. Anish	 	 
	Name:	ANTHONY L. ANISH	 	 
	Title:	COO	 	 
	Date:	2/23/15	 	 
	 	 	 
	E.M. TOOL COMPANY, INC.,	 	PRECISION AEROSPACE AND
	a California corporation	 	TECHNOLOGIES, INC.,
	 	 	a Nevada corporation
	 	 	 
	By:	/s/ Anthony
    L. Anish	 	By:	/s/ Anthony
    L. Anish
	Name:	ANTHONY L. ANISH	 	Name:	ANTHONY L. ANISH
	Title:	PRES	 	Title:	PRES
	Date:	2/23/15	 	Date:	2/23/15

 

 

    	12

    	 

    

 

EXHIBIT “A”

 

PURCHASE TRANCHES

 

	Purchase Tranche Number	 	Applicable Purchase Price	 	 	Date for Purchase Tranche 
 Closing
	 	 	 	 	 	 	 
	1	 	$	100,000	 	 	Within three (3) business days after satisfaction or waiver of Initial Conditions
	 	 	 	 	 	 	 
	2	 	$	80,000	 	 	20 Trading Days after prior Purchase Tranche Closing
	 	 	 	 	 	 	 
	3	 	$	80,000	 	 	20 Trading Days after prior Purchase Tranche Closing
	 	 	 	 	 	 	 
	4	 	$	80,000	 	 	20 Trading Days after prior Purchase Tranche Closing
	 	 	 	 	 	 	 
	5	 	$	80,000	 	 	20 Trading Days after prior Purchase Tranche Closing
	 	 	 	 	 	 	 
	6	 	$	80,000	 	 	20 Trading Days after prior Purchase Tranche Closing
	 	 	 	 	 	 	 
	7	 	$	80,000	 	 	20 Trading Days after prior Purchase Tranche Closing
	 	 	 	 	 	 	 
	8	 	$	80,000	 	 	20 Trading Days after prior Purchase Tranche Closing
	 	 	 	 	 	 	 
	9	 	$	80,000	 	 	20 Trading Days after prior Purchase Tranche Closing
	 	 	 	 	 	 	 
	10	 	$	80,000	 	 	20 Trading Days after prior Purchase Tranche Closing
	 	 	 	 	 	 	 
	11	 	$	80,000	 	 	20 Trading Days after prior Purchase Tranche Closing
	 	 	 	 	 	 	 
	12	 	$	80,000	 	 	20 Trading Days after prior Purchase Tranche Closing
	 	 	 	 	 	 	 
	13	 	$	80,000	 	 	20 Trading Days after prior Purchase Tranche Closing
	 	 	 	 	 	 	 
	14	 	$	80,000	 	 	20 Trading Days after prior Purchase Tranche Closing
	 	 	 	 	 	 	 
	15	 	$	60,000	 	 	20 Trading Days after prior Purchase Tranche Closing

 

    	13

    	 

    

 

EXHIBIT “B”

 

FORM OF ASSIGNMENT

 

    	14Exhibit 10.25

 

SECURITIES PURCHASE AGREEMENT

 

This SECURITIES
PURCHASE AGREEMENT (the “Agreement”), dated as of June 10, 2014, by and between M Line Holdings, Inc.,
a Nevada corporation, with headquarters located at 2672 Dow Avenue, Tustin, CA 92780 (the “Company”), and ADAR
BAYS, LLC, a Delaware limited liability company, with its address at 3411 Indian Creek Drive, Suite 403, Miami Beach, FL 33140
(the “Buyer”).

 

WHEREAS:

 

A.           The
Company and the Buyer are executing and delivering this Agreement in reliance upon the exemption from securities registration afforded
by the rules and regulations as promulgated by the United States Securities and Exchange Commission (the “SEC”) under
the Securities Act of 1933, as amended (the “1933 Act”);

 

B.           Buyer
desires to purchase and the Company desires to issue and sell, upon the terms and conditions set forth in this Agreement two 8%
convertible notes of the Company, in the forms attached hereto as Exhibit A and B in the aggregate principal amount of $100,000.00
(with the first note being in the amount of $50,000.00 and the second note being in the amount of $50,000.00 (together with any
note(s) issued in replacement thereof or as a dividend thereon or otherwise with respect thereto in accordance with the terms thereof,
the “Note”), convertible into shares of common stock, $0.001 par value per share, of the Company (the “Common
Stock”), upon the terms and subject to the limitations and conditions set forth in such Note. The first of the two notes
(the “First Note”) shall be paid for by the Buyer as set forth herein. The second note (the “Second Note”)
shall initially be paid for by the issuance of an offsetting $50,000.00 secured note issued to the Company by the Buyer (“Buyer
Note”), provided that prior to conversion of the Second Note, the Buyer must have paid off the Buyer Note in cash such that
the Second Note may not be converted until it has been paid for in cash.

 

C.           The
Buyer wishes to purchase, upon the terms and conditions stated in this Agreement, such principal amount of Note as is set forth
immediately below its name on the signature pages hereto; and

 

NOW THEREFORE,
the Company and the Buyer severally (and not jointly) hereby agree as follows:

 

1.          Purchase
and Sale of Note.

 

a.           Purchase
of Note. On each Closing Date (as defined below), the Company shall issue and sell to the Buyer and the Buyer agrees to purchase
from the Company such principal amount of Note as is set forth immediately below the Buyer’s name on the signature pages
hereto.

 

	/s/ Anthony L. Anish	 
	Company Initials	 

 

    	 

    	 

    

 

b.           Form
of Payment. On the Closing Date (as defined below), (i) the Buyer shall pay the purchase price for the Note to be issued and
sold to it at the Closing (as defined below) (the “Purchase Price”) by wire transfer of immediately available funds
to the Company, in accordance with the Company’s written wiring instructions, against delivery of the Note in the principal
amount equal to the Purchase Price as is set forth immediately below the Buyer’s name on the signature pages hereto, and
(ii) the Company shall deliver such duly executed Note on behalf of the Company, to the Buyer, against delivery of such Purchase
Price.

 

c.           Closing
Date. The date and time of the first issuance and sale of the Note pursuant to this Agreement (the “Closing Date”)
shall be on or about June 10, 2014, or such other mutually agreed upon time. The closing of the transactions contemplated by this
Agreement (the “Closing”) shall occur on the Closing Date at such location as may be agreed to by the parties. Subsequent
Closings shall occur when the Buyer Note is repaid. The Closing of the Second Note shall be on or before the dates specified in
the Buyer Note.

 

2.          Buyer’s
Representations and Warranties. The Buyer represents and warrants to the Company that:

 

a.           Investment
Purpose. As of the date hereof, the Buyer is purchasing the Note and the shares of Common Stock issuable upon conversion of
or otherwise pursuant to the Note, such shares of Common Stock being collectively referred to herein as the “Conversion Shares”
and, collectively with the Note, the “Securities”) for its own account and not with a present view towards the public
sale or distribution thereof, except pursuant to sales registered or exempted from registration under the 1933 Act; provided,
however, that by making the representations herein, the Buyer does not agree to hold any of the Securities for any minimum
or other specific term and reserves the right to dispose of the Securities at any time in accordance with or pursuant to a registration
statement or an exemption under the 1933 Act.

 

b.           Accredited
Investor Status. The Buyer is an “accredited investor” as that term is defined in Rule 501(a) of Regulation D (an
“Accredited Investor”).

 

c.           Reliance
on Exemptions. The Buyer understands that the Securities are being offered and sold to it in reliance upon specific exemptions
from the registration requirements of United States federal and state securities laws and that the Company is relying upon the
truth and accuracy of, and the Buyer’s compliance with, the representations, warranties, agreements, acknowledgments and
understandings of the Buyer set forth herein in order to determine the availability of such exemptions and the eligibility of the
Buyer to acquire the Securities.

 

d.           Information.
The Buyer and its advisors, if any, have been, and for so long as the Note remain outstanding will continue to be, furnished
with all materials relating to the business, finances and operations of the Company and materials relating to the offer and
sale of the Securities which have been requested by the Buyer or its advisors. The Buyer and its advisors, if any, have been,
and for so long as the Note remain outstanding will continue to be, afforded the opportunity to ask questions of the Company.
Notwithstanding the foregoing, the Company has not disclosed to the Buyer any material nonpublic information and will not
disclose such information unless such information is disclosed to the public prior to or promptly following such disclosure
to the Buyer. Neither such inquiries nor any other due diligence investigation conducted by Buyer or any of its advisors or
representatives shall modify, amend or affect Buyer’s right to rely on the Company’s representations and
warranties contained in Section 3 below. The Buyer understands that its investment in the Securities involves a significant
degree of risk. The Buyer is not aware of any facts that may constitute a breach of any of the Company’s
representations and warranties made herein.

 

	/s/ Anthony L. Anish	 

 

    	2

    	 

    

 

e.           Governmental
Review. The Buyer understands that no United States federal or state agency or any other government or governmental agency
has passed upon or made any recommendation or endorsement of the Securities.

 

f.            Transfer
or Re-sale. The Buyer understands that (i) the sale or re-sale of the Securities has not been and is not being registered under
the 1933 Act or any applicable state securities laws, and the Securities may not be transferred unless (a) the Securities are sold
pursuant to an effective registration statement under the 1933 Act, (b) the Buyer shall have delivered to the Company, at the cost
of the Buyer, an opinion of counsel that shall be in form, substance and scope customary for opinions of counsel in comparable
transactions to the effect that the Securities to be sold or transferred may be sold or transferred pursuant to an exemption from
such registration, which opinion shall be accepted by the Company, (c) the Securities are sold or transferred to an “affiliate”
(as defined in Rule 144 promulgated under the 1933 Act (or a successor rule) (“Rule 144”)) of the Buyer who agrees
to sell or otherwise transfer the Securities only in accordance with this Section 2(f) and who is an Accredited Investor, (d) the
Securities are sold pursuant to Rule 144, or (e) the Securities are sold pursuant to Regulation S under the 1933 Act (or a successor
rule) (“Regulation S”), and the Buyer shall have delivered to the Company, at the cost of the Buyer, an opinion of
counsel that shall be in form, substance and scope customary for opinions of counsel in corporate transactions, which opinion shall
be accepted by the Company; (ii) any sale of such Securities made in reliance on Rule 144 may be made only in accordance with the
terms of said Rule and further, if said Rule is not applicable, any re-sale of such Securities under circumstances in which the
seller (or the person through whom the sale is made) may be deemed to be an underwriter (as that term is defined in the 1933 Act)
may require compliance with some other exemption under the 1933 Act or the rules and regulations of the SEC thereunder; and (iii)
neither the Company nor any other person is under any obligation to register such Securities under the 1933 Act or any state securities
laws or to comply with the terms and conditions of any exemption thereunder (in each case). Notwithstanding the foregoing or anything
else contained herein to the contrary, the Securities may be pledged as collateral in connection with a bona fide
margin account or other lending arrangement.

 

g.           Legends.
The Buyer understands that the Note and, until such time as the Conversion Shares have been registered under the 1933 Act may be
sold pursuant to Rule 144 or Regulation S without any restriction as to the number of securities as of a particular date that can
then be immediately sold, the Conversion Shares may bear a restrictive legend in substantially the following form (and a stop-transfer
order may be placed against transfer of the certificates for such Securities):

 

	/s/ Anthony L. Anish	 

 

    	3

    	 

    

 

“NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT
BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN
A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE
144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT
OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.”

 

The legend set forth
above shall be removed and the Company shall issue a certificate without such legend to the holder of any Security upon which it
is stamped, if, unless otherwise required by applicable state securities laws, (a) such Security is registered for sale under an
effective registration statement filed under the 1933 Act or otherwise may be sold pursuant to Rule 144 or Regulation S without
any restriction as to the number of securities as of a particular date that can then be immediately sold, or (b) such holder provides
the Company with an opinion of counsel, in form, substance and scope customary for opinions of counsel in comparable transactions,
to the effect that a public sale or transfer of such Security may be made without registration under the 1933 Act, which opinion
shall be accepted by the Company so that the sale or transfer is effected. The Buyer agrees to sell all Securities, including those
represented by a certificate(s) from which the legend has been removed, in compliance with applicable prospectus delivery requirements,
if any. In the event that the Company does not accept the opinion of counsel provided by the Buyer with respect to the transfer
of Securities pursuant to an exemption from registration, such as Rule 144 or Regulation S, within 2 business days, it will be
considered an Event of Default under the Note.

 

h.           Authorization;
Enforcement. This Agreement has been duly and validly authorized. This Agreement has been duly executed and delivered on behalf
of the Buyer, and this Agreement constitutes a valid and binding agreement of the Buyer enforceable in accordance with its terms.

 

i.            
Residency. The Buyer is a resident of the jurisdiction set forth immediately below the Buyer’s name on the signature
pages hereto.

 

3.          Representations
and Warranties of the Company. The Company represents and warrants to the Buyer that:

 

	/s/ Anthony L. Anish	 

 

    	4

    	 

    

 

a.           Organization
and Qualification. The Company and each of its subsidiaries, if any, is a corporation duly organized, validly existing and
in good standing under the laws of the jurisdiction in which it is incorporated, with full power and authority (corporate and other)
to own, lease, use and operate its properties and to carry on its business as and where now owned, leased, used, operated and conducted.

 

b.           Authorization;
Enforcement. (i) The Company has all requisite corporate power and authority to enter into and perform this Agreement, the
Note and to consummate the transactions contemplated hereby and thereby and to issue the Securities, in accordance with the terms
hereof and thereof, (ii) the execution and delivery of this Agreement, the Note by the Company and the consummation by it of the
transactions contemplated hereby and thereby (including without limitation, the issuance of the Note and the issuance and reservation
for issuance of the Conversion Shares issuable upon conversion or exercise thereof) have been duly authorized by the Company’s
Board of Directors and no further consent or authorization of the Company, its Board of Directors, or its shareholders is required,
(iii) this Agreement has been duly executed and delivered by the Company by its authorized representative, and such authorized
representative is the true and official representative with authority to sign this Agreement and the other documents executed in
connection herewith and bind the Company accordingly, and (iv) this Agreement constitutes, and upon execution and delivery by the
Company of the Note, each of such instruments will constitute, a legal, valid and binding obligation of the Company enforceable
against the Company in accordance with its terms.

 

c.           Issuance
of Shares. The Conversion Shares are duly authorized and reserved for issuance and, upon conversion of the Note in accordance
with its respective terms, will be validly issued, fully paid and non-assessable, and free from all taxes, liens, claims and encumbrances
with respect to the issue thereof and shall not be subject to preemptive rights or other similar rights of shareholders of the
Company and will not impose personal liability upon the holder thereof.

 

d.           Acknowledgment
of Dilution. The Company understands and acknowledges the potentially dilutive effect to the Common Stock upon the issuance
of the Conversion Shares upon conversion of the Note. The Company further acknowledges that its obligation to issue Conversion
Shares upon conversion of the Note in accordance with this Agreement, the Note is absolute and unconditional regardless of the
dilutive effect that such issuance may have on the ownership interests of other shareholders of the Company.

 

e.           No
Conflicts. The execution, delivery and performance of this Agreement, the Note by the Company and the consummation by the Company
of the transactions contemplated hereby and thereby (including, without limitation, the issuance and reservation for issuance of
the Conversion Shares) will not (i) conflict with or result in a violation of any provision of the Certificate of Incorporation
or By-laws, or (ii) violate or conflict with, or result in a breach of any provision of, or constitute a default (or an event which
with notice or lapse of time or both could become a default) under, or give to others any rights of termination, amendment, acceleration
or cancellation of, any agreement, indenture, patent, patent license or instrument to which the Company or any of its subsidiaries
is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state
securities laws and regulations and regulations of any self-regulatory organizations to which the Company or its securities are
subject) applicable to the Company or any of its subsidiaries or by which any property or asset of the Company or any of its subsidiaries
is bound or affected (except for such conflicts, defaults, terminations, amendments, accelerations, cancellations and violations
as would not, individually or in the aggregate, have a material adverse effect). All consents, authorizations, orders, filings
and registrations which the Company is required to obtain pursuant to the preceding sentence have been obtained or effected on
or prior to the date hereof. The Company is not in violation of the listing requirements of the Over-the-Counter Quotations Bureau
(the “OTCQB”) and does not reasonably anticipate that the Common Stock will be delisted by the OTCQB in the foreseeable
fixture, nor are the Company’s securities “chilled” by FINRA. The Company and its subsidiaries are unaware of
any facts or circumstances which might give rise to any of the foregoing.

 

	/s/ Anthony L. Anish	 

 

    	5

    	 

    

 

f.            Absence
of Litigation. Except as disclosed in the Company’s public filings, there is no action, suit, claim, proceeding, inquiry
or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the
knowledge of the Company or any of its subsidiaries, threatened against or affecting the Company or any of its subsidiaries, or
their officers or directors in their capacity as such, that could have a material adverse effect. Schedule 3(f) contains a complete
list and summary description of any pending or, to the knowledge of the Company, threatened proceeding against or affecting the
Company or any of its subsidiaries, without regard to whether it would have a material adverse effect. The Company and its subsidiaries
are unaware of any facts or circumstances which might give rise to any of the foregoing.

 

g.           Acknowledgment
Regarding Buyer’ Purchase of Securities. The Company acknowledges and agrees that the Buyer is acting solely in the capacity
of arm’s length purchasers with respect to this Agreement and the transactions contemplated hereby. The Company further acknowledges
that the Buyer is not acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to this
Agreement and the transactions contemplated hereby and any statement made by the Buyer or any of its respective representatives
or agents in connection with this Agreement and the transactions contemplated hereby is not advice or a recommendation and is merely
incidental to the Buyer’ purchase of the Securities. The Company further represents to the Buyer that the Company’s
decision to enter into this Agreement has been based solely on the independent evaluation of the Company and its representatives.

 

h.           No
Integrated Offering. Neither the Company, nor any of its affiliates, nor ay person acting on its or their behalf, has directly
or indirectly made any offers or sales in any security or solicited any offers to buy any security under circumstances that would
require registration under the 1933 Act of the issuance of the Securities to the Buyer. The issuance of the Securities to the Buyer
will not be integrated with any other issuance of the Company’s securities (past, current or future) for purposes of any
shareholder approval provisions applicable to the Company or its securities.

 

i.            Title
to Property. The Company and its subsidiaries have good and marketable title in fee simple to all real property and good and
marketable title to all personal property owned by them which is material to the business of the Company and its subsidiaries,
in each case free and clear of all liens, encumbrances and defects except such as are described in Schedule 3(i) or such as would
not have a material adverse effect. Any real property and facilities held under lease by the Company and its subsidiaries are held
by them under valid, subsisting and enforceable leases with such exceptions as would not have a material adverse effect.

 

	/s/ Anthony L. Anish	 

 

    	6

    	 

    

 

j.            Breach
of Representations and Warranties by the Company. If the Company breaches any of the representations or warranties set forth
in this Section 3, and in addition to any other remedies available to the Buyer pursuant to this Agreement, it will be considered
an Event of default under the Note.

 

4.          COVENANTS.

 

a.           Expenses.
At the Closing, the Company shall reimburse Buyer for expenses incurred by them in connection with the negotiation, preparation,
execution, delivery and performance of this Agreement and the other agreements to be executed in connection herewith (“Documents”),
including, without limitation, reasonable attorneys’ and consultants’ fees and expenses, transfer agent fees, fees
for stock quotation services, fees relating to any amendments or modifications of the Documents or any consents or waivers of provisions
in the Documents, fees for the preparation of opinions of counsel, escrow fees, and costs of restructuring the transactions contemplated
by the Documents. When possible, the Company must pay these fees directly, otherwise the Company must make immediate payment for
reimbursement to the Buyer for all fees and expenses immediately upon written notice by the Buyer or the submission of an invoice
by the Buyer. The Company’s obligation with respect to this transaction is to reimburse Buyer’ expenses shall be $2500
in legal fees (and proportional amounts for the Second Note) which shall be deduced from each Note when funded.

 

b.           Listing.
The Company shall promptly secure the listing of the Conversion Shares upon each national securities exchange or automated quotation
system, if any, upon which shares of Common Stock are then listed (subject to official notice of issuance) and, so long as the
Buyer owns any of the Securities, shall maintain, so long as any other shares of Common Stock shall be so listed, such listing
of all Conversion Shares from time to time issuable upon conversion of the Note. The Company will obtain and, so long as the Buyer
owns any of the Securities, maintain the listing and trading of its Common Stock on the OTCQB or any equivalent replacement exchange,
the Nasdaq National Market (“Nasdaq”), the Nasdaq SmallCap Market (“Nasdaq SmallCap”), the New York Stock
Exchange (“NYSE”), or the American Stock Exchange (“AMEX”) and will comply in all respects with the Company’s
reporting, filing and other obligations under the bylaws or rules of the Financial Industry Regulatory Authority (“FINRA”)
and such exchanges, as applicable. The Company shall promptly provide to the Buyer copies of any notices it receives from the OTCQB
and any other exchanges or quotation systems on which the Common Stock is then listed regarding the continued eligibility of the
Common Stock for listing on such exchanges and quotation systems.

 

	/s/ Anthony L. Anish	 

 

    	7

    	 

    

 

c.           Corporate
Existence. So long as the Buyer beneficially owns any Note, the Company shall maintain its corporate existence and shall not
sell all or substantially all of the Company’s assets, except in the event of a merger or consolidation or sale of all or
substantially all of the Company’s assets, where the surviving or successor entity in such transaction (i) assumes the Company’s
obligations hereunder and under the agreements and instruments entered into in connection herewith and (ii) is a publicly traded
corporation whose Common Stock is listed for trading on the OTCQB, Nasdaq, Nasdaq SmallCap, NYSE or AMEX.

 

d.           No
Integration. The Company shall not make any offers or sales of any security (other than the Securities) under circumstances
that would require registration of the Securities being offered or sold hereunder under the 1933 Act or cause the offering of the
Securities to be integrated with any other offering of securities by the Company for the purpose of any stockholder approval provision
applicable to the Company or its securities.

 

e.           Breach
of Covenants. If the Company breaches any of the covenants set forth in this Section 4, and in addition to any other remedies
available to the Buyer pursuant to this Agreement, it will be considered an event of default under the Note.

 

5.          Governing
Law; Miscellaneous.

 

a.           Governing
Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York without regard
to principles of conflicts of laws. 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 New York or in the federal courts located in the state and county
of New York. The parties to this Agreement hereby irrevocably waive any objection to jurisdiction and venue of any action instituted
hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens.
The Company and Buyer waive trial by jury. The prevailing party shall be entitled to recover from the other party its reasonable
attorney’s fees and costs. In the event that any provision of this Agreement or any other agreement delivered in connection
herewith is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative
to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such
provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other
provision of any agreement. Each party hereby irrevocably waives personal service of process and consents to process being served
in any suit, action or proceeding in connection with this Agreement or any other Transaction Document by mailing a copy thereof
via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for
notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted
by law.

 

b.           Counterparts;
Signatures by Facsimile. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original
but all of which shall constitute one and the same agreement and shall become effective when counterparts have been signed by each
party and delivered to the other party. This Agreement, once executed by a party, may be delivered to the other party hereto by
facsimile transmission of a copy of this Agreement bearing the signature of the party so delivering this Agreement.

 

	/s/ Anthony L. Anish	 

 

    	8

    	 

    

 

c.           Headings.
The headings of this Agreement are for convenience of reference only and shall not form part of, or affect the interpretation of,
this Agreement.

 

d.           Severability.
In the event that any provision of this Agreement is invalid or unenforceable under any applicable statute or rule of law, then
such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform
with such statute or rule of law. Any provision hereof which may prove invalid or unenforceable under any law shall not affect
the validity or enforceability of any other provision hereof.

 

e.           Entire
Agreement; Amendments. This Agreement and the instruments referenced herein contain the entire understanding of the parties
with respect to the matters covered herein and therein and, except as specifically set forth herein or therein, neither the Company
nor the Buyer makes any representation, warranty, covenant or undertaking with respect to such matters. No provision of this Agreement
may be waived or amended other than by an instrument in writing signed by the majority in interest of the Buyer.

 

f.            Notices.
All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing
and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return
receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted
by hand delivery, telegram, or facsimile, addressed as set forth below or to such other address as such party shall have specified
most recently by written notice. Any notice or other communication required or permitted to be given hereunder shall be deemed
effective (a) upon hand delivery or delivery by facsimile, with accurate confirmation generated by the transmitting facsimile machine,
at the address or number designated below (if delivered on a business day during normal business hours where such notice is to
be received), or the first business day following such delivery (if delivered other than on a business day during normal business
hours where such notice is to be received) or (b) on the second business day following the date of mailing by express courier service,
fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses for
such communications shall be:

 

If to the Company, to:

M Line Holdings, Inc.

2672 Dow Avenue

Tustin, CA 92780

Attn: Bruce Barren, CEO

 

If to the Buyer:

ADAR BAYS, LLC

3411 Indian Creek Drive, Suite
403

Miami Beach, FL 33140

Attn: Samuel Eisenberg

 

	/s/ Anthony L. Anish	 

 

    	9

    	 

    

 

Each party shall provide notice to the other party
of any change in address.

 

g.           Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and assigns.
Neither the Company nor the Buyer shall assign this Agreement or any rights or obligations hereunder without the prior written
consent of the other. Notwithstanding the foregoing, the Buyer may assign its rights hereunder to any person that purchases Securities
in a private transaction from the Buyer or to any of its “affiliates,” as that term is defined under the 1934 Act,
without the consent of the Company.

 

h.           Third
Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective permitted successors
and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other person.

 

i.            Survival. The representations and warranties of the Company and the agreements and covenants set forth in this Agreement shall
survive the closing hereunder notwithstanding any due diligence investigation conducted by or on behalf of the Buyer. The Company
agrees to indemnify and hold harmless the Buyer and all their officers, directors, employees and agents for loss or damage arising
as a result of or related to any breach or alleged breach by the Company of any of its representations, warranties and covenants
set forth in this Agreement or any of its covenants and obligations under this Agreement, including advancement of expenses as
they are incurred.

 

j.            Further
Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall
execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request
in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated
hereby.

 

k.          No
Strict Construction. The language used in this Agreement will be deemed to be the language chosen by the parties to express
their mutual intent, and no rules of strict construction will be applied against any party.

 

l.            Remedies.
The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Buyer by vitiating
the intent and purpose of the transaction contemplated hereby. Accordingly, the Company acknowledges that the remedy at law for
a breach of its obligations under this Agreement will be inadequate and agrees, in the event of a breach or threatened breach by
the Company of the provisions of this Agreement, that the Buyer shall be entitled, in addition to all other available remedies
at law or in equity, and in addition to the penalties assessable herein, to an injunction or injunctions restraining, preventing
or curing any breach of this Agreement and to enforce specifically the terms and provisions hereof, without the necessity of showing
economic loss and without any bond or other security being required.

 

	/s/ Anthony L. Anish	 

 

    	10

    	 

    

 

IN WITNESS WHEREOF, the undersigned Buyer
and the Company have caused this Agreement to be duly executed as of the date first above written.

 

M Line Holdings, Inc.

 

	By:	/s/ Anthony L.
    Anish	 
	 	Anthony L. Anish	 
	 	Chief Operating Officer	 

 

ADAR BAYS, LLC.

 

	By:		 
	Name:	Samuel Eisenberg	 
	Title:	Manager	 

 

AGGREGATE SUBSCRIPTION AMOUNT:

 

	Aggregate Principal Amount of Note:	$100,000.00

 

Aggregate Purchase Price:

 

Note 1: $50,000.00 less $2,500.00 in legal
fees and $4,750.00 in third party due diligence fees to Anubis Capital Partners, LLC.

 

Note 2: $50,000.00 less $2,500.00 in legal
fees and $4,750.00 in third party due diligence fees to Anubis Capital Partners, LLC.

 

	/s/ Anthony L. Anish	 

 

    	11

    	 

    

 

EXHIBIT A

144 NOTE - $50K

 

	/s/ Anthony L. Anish	 

 

    	12

    	 

    

 

EXHIBIT B

BACK END NOTE 1

$50K

 

	/s/ Anthony L. Anish	 

 

    	13

    	 

    

 

THIS NOTE AND THE COMMON STOCK
ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT BEEN AND WILL NOT BE REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION
OR THE SECURITIES COMMISSION OF ANY STATE PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER (THE “1933 ACT”)

 

US $50,000.00

 

M LINE HOLDINGS, INC.

8% CONVERTIBLE REDEEMABLE NOTE

DUE JUNE 10, 2015

BACK END NOTE

 

FOR VALUE RECEIVED,
M Line Holdings, Inc. (the “Company”) promises to pay to the order of ADAR BAYS, LLC and its authorized successors
and permitted assigns (“Holder”), the aggregate principal face amount of Fifty Thousand Dollars exactly (U.S.
$50,000.00) on June 10, 2015 (“Maturity Date”) and to pay interest on the principal amount outstanding hereunder
at the rate of 8% per annum commencing on June 10, 2014. The interest will be paid to the Holder in whose name this Note is registered
on the records of the Company regarding registration and transfers of this Note. The principal of, and interest on, this Note
are payable at 3411 Indian Creek Drive, Suite 403, Miami Beach, FL 33140, initially, and if changed, last appearing on the records
of the Company as designated in writing by the Holder hereof from time to time. The Company will pay each interest payment and
the outstanding principal due upon this Note before or on the Maturity Date, less any amounts required by law to be deducted or
withheld, to the Holder of this Note by check or wire transfer addressed to such Holder at the last address appearing on the records
of the Company. The forwarding of such check or wire transfer shall constitute a payment of outstanding principal hereunder and
shall satisfy and discharge the liability for principal on this Note to the extent of the sum represented by such check or wire
transfer. Interest shall be payable in Common Stock (as defined below) pursuant to paragraph 4(b) herein.

 

This Note is subject to the following additional provisions:

 

1.          This
Note is exchangeable for an equal aggregate principal amount of Notes of different authorized denominations, as requested by
the Holder surrendering the same. No service charge will be made for such registration or transfer or exchange, except that
Holder shall pay any tax or other governmental charges payable in connection therewith.

 

	/s/ Anthony L. Anish	 
	Initials	 

 

    	 

    	 

    

 

2.          The
Company shall be entitled to withhold from all payments any amounts required to be withheld under applicable laws.

 

3.          This
Note may be transferred or exchanged only in compliance with the Securities Act of 1933, as amended (“Act”), and applicable
state securities laws. Any attempted transfer to a non-qualifying party shall be treated by the Company as void. Prior to due presentment
for transfer of this Note, the Company and any agent of the Company may treat the person in whose name this Note is duly registered
on the Company’s records as the owner hereof for all other purposes, whether or not this Note be overdue, and neither the
Company nor any such agent shall be affected or bound by notice to the contrary. Any Holder of this Note electing to exercise the
right of conversion set forth in Section 4(a) hereof, in addition to the requirements set forth in Section 4(a), and any prospective
transferee of this Note, also is required to give the Company written confirmation that this Note is being converted (“Notice
of Conversion”) in the form annexed hereto as Exhibit A. The date of receipt (including receipt by telecopy) of
such Notice of Conversion shall be the Conversion Date.

 

4.          (a)          The
Holder of this Note is entitled, at its option, at any time after 180 days, to convert all or any amount of the principal face
amount of this Note then outstanding into shares of the Company’s common stock (the “Common Stock”) without
restrictive legend of any nature, at a price (“Conversion Price”) for each share of Common Stock equal to 55%
of the lowest closing bid twice of the Common Stock as reported on the OTCQB marketplace which the Company’s
shares are traded or any market upon which the Common Stock may be traded in the future (“Exchange”), for the
ten prior trading days including the day upon which a Notice of Conversion is received by the Company (provided such
Notice of Conversion is delivered by fax or other electronic method of communication to the Company after 4 P.M. Eastern Standard
or Daylight Savings Time if the Holder wishes to include the same day closing price). If the shares have not been delivered within
3 business days, the Notice of Conversion may be rescinded. Such conversion shall be effectuated by the Company delivering the
shares of Common Stock to the Holder within 3 business days of receipt by the Company of the Notice of Conversion. Once the Holder
has received such shares of Common Stock, the Holder shall surrender this Note to the Company, executed by the Holder evidencing
such Holder’s intention to convert this Note or a specified portion hereof, and accompanied by proper assignment hereof in
blank. Accrued, but unpaid interest shall be subject to conversion. No fractional shares or scrip representing fractions of shares
will be issued on conversion, but the number of shares issuable shall be rounded to the nearest whole share. In the event the
Company experiences a DTC “Chill” on its shares, the conversion price shall be decreased to 45% instead of 55%
while that “Chill” is in effect

 

(b)          Interest
on any unpaid principal balance of this Note shall be paid at the rate of 8% per annum. Interest shall be paid by the Company in
Common Stock (“Interest Shares”). The Holder may, at any time, send in a Notice of Conversion to the Company for Interest
Shares based on the formula provided in Section 4(a) above. The dollar amount converted into Interest Shares shall be all or a
portion of the accrued interest calculated on the unpaid principal balance of this Note to the date of such notice.

 

	/s/ Anthony L. Anish	 
	Initials	 

 

    	2

    	 

    

 

(c)          This
Note may not be prepaid, except that if the $50,000 Rule 144 convertible redeemable note issued by the Company of even date herewith
is redeemed by the Company within 6 months of the issuance date of such Note, all obligations of the Company under this Note and
all obligations of the Holder under the Holder issued Back End Note will be automatically be deemed satisfied and this Note and
the Holder issued Back End Note will be automatically be deemed cancelled and of no further force or effect.

 

(d)          Upon
(i) a transfer of all or substantially all of the assets of the Company to any person in a single transaction or series of related
transactions, (ii) a reclassification, capital reorganization or other change or exchange of outstanding shares of the Common Stock,
other than a forward or reverse stock split or stock dividend, or (iii) any consolidation or merger of the Company with or into
another person or entity in which the Company is not the surviving entity (other than a merger which is effected solely to change
the jurisdiction of incorporation of the Company and results in a reclassification, conversion or exchange of outstanding shares
of Common Stock solely into shares of Common Stock) (each of items (i), (ii) and (iii) being referred to as a “Sale Event”),
then, in each case, the Company shall, upon request of the Holder, redeem this Note in cash for 150% of the principal amount, plus
accrued but unpaid interest through the date of redemption, or at the election of the Holder, such Holder may convert the unpaid
principal amount of this Note (together with the amount of accrued but unpaid interest) into shares of Common Stock immediately
prior to such Sale Event at the Conversion Price.

 

(e)          In
case of any Sale Event (not to include a sale of all or substantially all of the Company’s assets) in connection with which
this Note is not redeemed or converted, the Company shall cause effective provision to be made so that the Holder of this Note
shall have the right thereafter, by converting this Note, to purchase or convert this Note into the kind and number of shares of
stock or other securities or property (including cash) receivable upon such reclassification, capital reorganization or other change,
consolidation or merger by a holder of the number of shares of Common Stock that could have been purchased upon exercise of the
Note and at the same Conversion Price, as defined in this Note, immediately prior to such Sale Event. The foregoing provisions
shall similarly apply to successive Sale Events. If the consideration received by the holders of Common Stock is other than cash,
the value shall be as determined by the Board of Directors of the Company or successor person or entity acting in good faith.

 

5.          No
provision of this Note shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal
of, and interest on, this Note at the time, place, and rate, and in the form, herein prescribed.

 

6.          The
Company hereby expressly waives demand and presentment for payment, notice of non-payment, protest, notice of protest, notice of
dishonor, notice of acceleration or intent to accelerate, and diligence in taking any action to collect amounts called for hereunder
and shall be directly and primarily liable for the payment of all sums owing and to be owing hereto.

 

7.          The
Company agrees to pay all costs and expenses, including reasonable attorneys’ fees and expenses, which may be incurred by
the Holder in collecting any amount due under this Note.

 

	/s/ Anthony L. Anish	 
	Initials	 

 

    	3

    	 

    

 

8.          If
one or more of the following described “Events of Default” shall occur:

 

(a)          The
Company shall default in the payment of principal or interest on this Note or any other note issued to the Holder by the Company;
or

 

(b)          Any
of the representations or warranties made by the Company herein or in any certificate or financial or other written statements
heretofore or hereafter furnished by or on behalf of the Company in connection with the execution and delivery of this Note shall
be false or misleading in any respect; or

 

(c)          The
Company shall fail to perform or observe, in any respect, any covenant, term, provision, condition, agreement or obligation of
the Company under this Note or any other note issued to the Holder and not cure such breach within 10 days; or

 

(d)          The
Company shall (1) become insolvent; (2) admit in writing its inability to pay its debts generally as they mature; (3) make an assignment
for the benefit of creditors or commence proceedings for its dissolution; (4) apply for or consent to the appointment of a trustee,
liquidator or receiver for its or for a substantial part of its property or business; (5) file a petition for bankruptcy relief,
consent to the filing of such petition or have filed against it an involuntary petition for bankruptcy relief, all under federal
or state laws as applicable; or

 

(e)          A
trustee, liquidator or receiver shall be appointed for the Company or for a substantial part of its property or business without
its consent and shall not be discharged within sixty (60) days after such appointment; or

 

(f)          Any
governmental agency or any court of competent jurisdiction at the instance of any governmental agency shall assume custody or control
of the whole or any substantial portion of the properties or assets of the Company; or

 

(g)          One
or more money judgments, writs or warrants of attachment, or similar process, in excess of one hundred thousand dollars
($100,000) in the aggregate, shall be entered or filed against the Company or any of its properties or other assets and shall
remain unpaid, unvacated, unbonded or unstayed for a period of fifteen (15) days or in any event later than five
(5) days prior to the date of any proposed sale thereunder; or

 

(h)          The
Company shall have defaulted on or breached any term of any other note of similar debt instrument into which the Company has entered
and failed to cure such default within the appropriate grace period; or

 

(i)          The
Company shall have its Common Stock delisted from a market (including the OTCQB marketplace) or, if the Common Stock trades on
an exchange, then trading in the Common Stock shall be suspended for more than 10 consecutive days;

 

(j)          Intentionally
Deleted;

 

	/s/ Anthony L. Anish	 
	Initials	 

 

    	4

    	 

    

 

(k)          The
Company shall not deliver to the Holder the Common Stock pursuant to paragraph 4 herein without restrictive legend within 3 business
days of its receipt of a Notice of Conversion; or

 

(1)         The
Company shall not replenish the reserve set forth in Section 12, within 5 business days of the request of the Holder ; or

 

(m)          The
Company’s Common Stock has a closing bid price of less than $0.003 per share for at least 5 consecutive trading days; or

 

(n)          The
aggregate dollar trading volume of the Company’s Common Stock is less than forty thousand dollars ($40,000.00) in any 5 consecutive
trading days; or

 

(o)          The
Company shall cease to be “current” in its filings with the Securities and Exchange Commission; or.

 

(p)          The
Company shall lose the “bid” price for its stock and a market (including the OTCBB marketplace or other exchange)

 

Then, or at any time thereafter, unless
cured (except for 8(m) and 8(n) which are incurable defaults, the sole remedy of which is to allow the Holder to cancel
both this Note and the Holder Issued Note, and in each and every such case, unless such Event of Default shall have been waived
in writing by the Holder (which waiver shall not be deemed to be a waiver of any subsequent default) at the option of the Holder
and in the Holder’s sole discretion, the Holder may consider this Note immediately due and payable, without presentment,
demand, protest or (further) notice of any kind (other than notice of acceleration), all of which are hereby expressly waived,
anything herein or in any note or other instruments contained to the contrary notwithstanding, and the Holder may immediately,
and without expiration of any period of grace, enforce any and all of the Holder’s rights and remedies provided herein or
any other rights or remedies afforded by law. Upon an Event of Default, interest shall be accrue at a default interest rate of
16% per annum or, if such rate is usurious or not permitted by current law, then at the highest rate of interest permitted by law.
Further, if the Note becomes due and payable, the Holder may use the outstanding principal and interest due under the Note to offset
any payment obligations it may have to the Company. In the event of a breach of 8(k) the penalty shall be $250 per day the
shares are not issued beginning on the 4th day after the conversion notice was delivered to the Company. This penalty
shall increase to $500 per day beginning on the 10th day. Once cash funded, the penalty for a breach of Section 8(p)
shall be an increase of the outstanding principal amounts by 20%. Once cash funded, in the event of a breach of Section 8(i), the
outstanding principal due under this Note shall increase by 50%. If this Note is not paid at maturity, the outstanding principal
due under this Note shall increase by 10%.

 

If the Holder shall commence an action
or proceeding to enforce any provisions of this Note, including, without limitation, engaging an attorney, then, if the Holder
prevails in such action, the Holder shall be reimbursed by the Company for its attorneys’ fees and other costs and expenses
incurred in the investigation, preparation and prosecution of such action or proceeding.

 

	/s/ Anthony L. Anish	 
	Initials	 

 

    	5

    	 

    

 

9.         In
case any provision of this Note is held by a court of competent jurisdiction to be excessive in scope or otherwise invalid or unenforceable,
such provision shall be adjusted rather than voided, if possible, so that it is enforceable to the maximum extent possible, and
the validity and enforceability of the remaining provisions of this Note will not in any way be affected or impaired thereby.

 

10.         Neither
this Note nor any term hereof may be amended, waived, discharged or terminated other than by a written instrument signed by the
Company and the Holder.

 

11.         The
Company represents that it is not a “shell” issuer and has never been a “shell” issuer or that if it previously
has been a “shell” issuer that at least 12 months have passed since the Company has reported form 10 type information
indicating it is no longer a “shell issuer. Further. The Company will instruct its counsel to either (i) write a “144-
3(a)(9)” opinion to allow for salability of the conversion shares or (ii) accept such opinion from Holder’s counsel.

 

12.         Prior
to cash funding of this Note, The Company will issue irrevocable transfer agent instructions reserving 3x the number of shares
of Common Stock necessary to allow the holder to convert this note based on the discounted conversion price set forth in Section
4(a) herewith and in accordance with the conversion procedure set forth in Section 12 of the $50,000 144 note issued on even date
herewith. The reserve shall be replenished as needed to allow for conversions of this Note. Upon full conversion of this Note,
the reserve representing this Note shall be cancelled. The Company will pay all transfer agent costs associated with issuing and
delivering the shares.

 

13.         The
Company will give the Holder direct notice of any corporate actions including but not limited to name changes, stock splits, recapitalizations
etc. This notice shall be given to the Holder as soon as possible under law.

 

14.         This
Note shall be governed by and construed in accordance with the laws of New York applicable to contracts made and wholly to be performed
within the State of New York and shall be binding upon the successors and assigns of each party hereto. The Holder and the Company
hereby mutually waive trial by jury and consent to exclusive jurisdiction and venue in the courts of the State of New York. This
Agreement may be executed in counterparts, and the facsimile transmission of an executed counterpart to this Agreement shall be
effective as an original.

 

	/s/ Anthony L. Anish	 
	Initials	 

 

    	6

    	 

    

 

IN WITNESS WHEREOF, the Company has caused
this Note to be duly executed by an officer thereunto duly authorized.

 

	Dated:	6/10/14	 	 
	 	 	 	 
	 	 	 	M Line Holdings, Inc.
	 	 	 	 
	 	 	 	By:	/s/ Anthony L. Anish
	 	 	 	 	 
	 	 	 	Title:	COO

 

	/s/ Anthony L. Anish	 
	Initials	 

 

    	7

    	 

    

 

EXHIBIT A

 

NOTICE OF CONVERSION

 

(To be Executed by the Registered Holder
in order to Convert the Note)

 

The undersigned hereby
irrevocably elects to convert $_________ of the above Note into ________ Shares of Common Stock of M Line Holdings, Inc. (“Shares”)
according to the conditions set forth in such Note, as of the date written below.

 

If Shares are to be issued in the name of
a person other than the undersigned, the undersigned will pay all transfer and other taxes and charges payable with respect thereto.

  

	Date of Conversion: 	 

	Applicable Conversion Price:	 

	Signature: 	 
	 	[Print Name of Holder and Title of Signer]

	Address:	 
		 

 

	SSN or EIN: 	 

	Shares are to be registered in the following name: 	 

 

	Name:	 

	Address:	 

	Tel: 	 

	Fax:	 

	SSN or EIN: 	 

 

Shares are to be sent or delivered to the following account:

 

	Account Name: 	 

	Address:	 

  

	/s/ Anthony L. Anish	 
	Initials	 

 

    	8

    	 

    

 

THIS NOTE AND THE COMMON
STOCK ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT BEEN AND WILL NOT BE REGISTERED WITH THE UNITED STATES SECURITIES AND
EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER (THE “1933 ACT”)

 

US $50,000.00

 

M LINE HOLDINGS, INC.

8% CONVERTIBLE REDEEMABLE NOTE

DUE MAY 30 2015

 

FOR VALUE RECEIVED,
M Line Holdings, Inc. (the “Company”) promises to pay to the order of ADAR BAYS, LLC and its authorized successors
and permitted assigns (“Holder”), the aggregate principal face amount of Fifty Thousand Dollars exactly (U.S. $50,000.00)
on May 30, 2015 (“Maturity Date”) and to pay interest on the principal amount outstanding hereunder at the rate
of 8% per annum commencing on May 30, 2014. The interest will be paid to the Holder in whose name this Note is registered on the
records of the Company regarding registration and transfers of this Note. The principal of, and interest on, this Note are payable
at 3411 Indian Creek Drive, Suite 403, Miami Beach, FL 33140, initially, and if changed, last appearing on the records of the Company
as designated in writing by the Holder hereof from time to time. The Company will pay each interest payment and the outstanding
principal due upon this Note before or on the Maturity Date, less any amounts required by law to be deducted or withheld, to the
Holder of this Note by check or wire transfer addressed to such Holder at the last address appearing on the records of the Company.
The forwarding of such check or wire transfer shall constitute a payment of outstanding principal hereunder and shall satisfy and
discharge the liability for principal on this Note to the extent of the sum represented by such check or wire transfer. Interest
shall be payable in Common Stock (as defined below) pursuant to paragraph 4(b) herein.

 

This Note is subject to the following additional provisions:

 

1.          This
Note is exchangeable for an equal aggregate principal amount of Notes of different authorized denominations, as requested by the
Holder surrendering the same. No service charge will be made for such registration or transfer or exchange, except that Holder
shall pay any tax or other governmental charges payable in connection therewith.

 

	/s/ Anthony L. Anish	 
	Initials	 

 

    	 

    	 

    

 

2.          The
Company shall be entitled to withhold from all payments any amounts required to be withheld under applicable laws.

 

3.          This
Note may be transferred or exchanged only in compliance with the Securities Act of 1933, as amended (“Act”), and applicable
state securities laws. Any attempted transfer to a non-qualifying party shall be treated by the Company as void. Prior to due presentment
for transfer of this Note, the Company and any agent of the Company may treat the person in whose name this Note is duly registered
on the Company’s records as the owner hereof for all other purposes, whether or not this Note be overdue, and neither the
Company nor any such agent shall be affected or bound by notice to the contrary. Any Holder of this Note electing to exercise the
right of conversion set forth in Section 4(a) hereof, in addition to the requirements set forth in Section 4(a), and any prospective
transferee of this Note, also is required to give the Company written confirmation that this Note is being converted (“Notice
of Conversion”) in the form annexed hereto as Exhibit A. The date of receipt (including receipt by telecopy) of
such Notice of Conversion shall be the Conversion Date.

 

4.          (a)          The
Holder of this Note is entitled, at its option, at any time after 180 days, to convert all or any amount of the principal face
amount of this Note then outstanding into shares of the Company’s common stock (the “Common Stock”) without
restrictive legend of any nature, at a price (“Conversion Price”) for each share of Common Stock equal to 55%
of the lowest closing bid price of the Common Stock as reported on the OTCQB marketplace which the Company’s
shares are traded or any market upon which the Common Stock may be traded in the future (“Exchange”), for the
ten prior trading days including the day upon which a Notice of Conversion is received by the Company (provided such
Notice of Conversion is delivered by fax or other electronic method of communication to the Company after 4 P.M. Eastern Standard
or Daylight Savings Time if the Holder wishes to include the same day closing price). If the shares have not been delivered within
3 business days, the Notice of Conversion may be rescinded. Such conversion shall be effectuated by the Company delivering the
shares of Common Stock to the Holder within 3 business days of receipt by the Company of the Notice of Conversion. Once the Holder
has received such shares of Common Stock, the Holder shall surrender this Note to the Company, executed by the Holder evidencing
such Holder’s intention to convert this Note or a specified portion hereof, and accompanied by proper assignment hereof in
blank. Accrued, but unpaid interest shall be subject to conversion. No fractional shares or scrip representing fractions of shares
will be issued on conversion, but the number of shares issuable shall be rounded to the nearest whole share. In the event the
Company experiences a DTC “Chill” on its shares, the conversion price shall be decreased to 45% instead of 55%
while that “Chill” is in effect

 

(b)          Interest
on any unpaid principal balance of this Note shall be paid at the rate of 8% per annum. Interest shall be paid by the Company in
Common Stock (“Interest Shares”). Holder may, at any time, send in a Notice of Conversion to the Company for Interest
Shares based on the formula provided in Section 4(a) above. The dollar amount converted into Interest Shares shall be all or a
portion of the accrued interest calculated on the unpaid principal balance of this Note to the date of such notice.

 

	/s/ Anthony L. Anish	 
	Initials	 

 

    	2

    	 

    

 

(c)          The
Notes may be prepaid with the following penalties: (i) if the note is prepaid within 90 days of the issuance date, then at 125%
of the face amount plus any accrued interest; (ii) if the note is prepaid within 91 days after the issuance date but less than
151 days after the issuance date, then at 140% of the face amount plus any accrued interest and (iii) if the note is prepaid within
151 days after the issuance date but less than 180 days after the issuance date, then at 150% of the face amount plus any accrued
interest. This Note may not be prepaid after the 180th day. Such redemption must be closed and funded within 3 days
of giving notice of redemption of the right to redeem shall be null and void.

 

(d)          Upon
(i) a transfer of all or substantially all of the assets of the Company to any person in a single transaction or series of related
transactions, (ii) a reclassification, capital reorganization or other change or exchange of outstanding shares of the Common Stock,
other than a forward or reverse stock split or stock dividend, or (iii) any consolidation or merger of the Company with or into
another person or entity in which the Company is not the surviving entity (other than a merger which is effected solely to change
the jurisdiction of incorporation of the Company and results in a reclassification, conversion or exchange of outstanding shares
of Common Stock solely into shares of Common Stock) (each of items (i), (ii) and (iii) being referred to as a “Sale Event”),
then, in each case, the Company shall, upon request of the Holder, redeem this Note in cash for 150% of the principal amount, plus
accrued but unpaid interest through the date of redemption, or at the election of the Holder, such Holder may convert the unpaid
principal amount of this Note (together with the amount of accrued but unpaid interest) into shares of Common Stock immediately
prior to such Sale Event at the Conversion Price.

 

(e)          In
case of any Sale Event (not to include a sale of all or substantially all of the Company’s assets) in connection with which
this Note is not redeemed or converted, the Company shall cause effective provision to be made so that the Holder of this Note
shall have the right thereafter, by converting this Note, to purchase or convert this Note into the kind and number of shares of
stock or other securities or property (including cash) receivable upon such reclassification, capital reorganization or other change,
consolidation or merger by a holder of the number of shares of Common Stock that could have been purchased upon exercise of the
Note and at the same Conversion Price, as defined in this Note, immediately prior to such Sale Event. The foregoing provisions
shall similarly apply to successive Sale Events. If the consideration received by the holders of Common Stock is other than cash,
the value shall be as determined by the Board of Directors of the Company or successor person or entity acting in good faith.

 

5.          No
provision of this Note shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal
of, and interest on, this Note at the time, place, and rate, and in the form, herein prescribed.

 

6.          The
Company hereby expressly waives demand and presentment for payment, notice of non-payment, protest, notice of protest, notice of
dishonor, notice of acceleration or intent to accelerate, and diligence in taking any action to collect amounts called for hereunder
and shall be directly and primarily liable for the payment of all sums owing and to be owing hereto.

 

	/s/ Anthony L. Anish	 
	Initials	 

 

    	3

    	 

    

 

7.          The
Company agrees to pay all costs and expenses, including reasonable attorneys’ fees and expenses, which may be incurred by
the Holder in collecting any amount due under this Note.

 

8.          If
one or more of the following described “Events of Default” shall occur:

 

(a)          The
Company shall default in the payment of principal or interest on this Note or any other note issued to the Holder by the Company;
or

 

(b)          Any
of the representations or warranties made by the Company herein or in any certificate or financial or other written statements
heretofore or hereafter furnished by or on behalf of the Company in connection with the execution and delivery of this Note, or
the Securities Purchase Agreement under which this note was issued shall be false or misleading in any respect; or

 

(c)          The
Company shall fail to perform or observe, in any respect, any covenant, term, provision, condition, agreement or obligation of
the Company under this Note or any other note issued to the Holder; or

 

(d)          The
Company shall (I) become insolvent; (2) admit in writing its inability to pay its debts generally as they mature; (3) make an assignment
for the benefit of creditors or commence proceedings for its dissolution; (4) apply for or consent to the appointment of a trustee,
liquidator or receiver for its or for a substantial part of its property or business; (5) file a petition for bankruptcy relief,
consent to the filing of such petition or have filed against it an involuntary petition for bankruptcy relief, all under federal
or state laws as applicable; or

 

(e)          A
trustee, liquidator or receiver shall be appointed for the Company or for a substantial part of its property or business without
its consent and shall not be discharged within sixty (60) days after such appointment; or

 

(f)          Any
governmental agency or any court of competent jurisdiction at the instance of any governmental agency shall assume custody or control
of the whole or any substantial portion of the properties or assets of the Company; or

 

(g)          One
or more money judgments, writs or warrants of attachment, or similar process, in excess of fifty thousand dollars ($50,000) in
the aggregate, shall be entered or filed against the Company or any of its properties or other assets and shall remain unpaid,
unvacated, unbonded or unstayed for a period of fifteen (15) days or in any event later than five (5) days prior to the date of
any proposed sale thereunder; or

 

(h)          The
Company shall have defaulted on or breached any term of any other note of similar debt instrument into which the Company has entered
and failed to cure such default within the appropriate grace period; or

 

(i)          The
Company shall have its Common Stock delisted from a market (including the OTCQB marketplace) or, if the Common Stock trades on
an exchange, then trading in the Common Stock shall be suspended for more than 10 consecutive days;

 

	/s/ Anthony L. Anish	 
	Initials	 

 

    	4

    	 

    

 

(j)           If
a majority of the members of the Board of Directors of the Company on the date hereof are no longer serving as members of the Board;

 

(k)          The
Company shall not deliver to the Holder the Common Stock pursuant to paragraph 4 herein without restrictive legend within 3
business days of its receipt of a Notice of Conversion; or

 

(l)           The
Company shall not replenish the reserve set forth in Section 12, within 3 business days of the request of the Holder; or

 

(m)         The
Company shall not be “current” in its filings with the Securities and Exchange Commission; or

 

(n)          The
Company shall lose the “bid” price for its stock and a market (including the OTCBB marketplace or other exchange)

 

Then, or at any time thereafter, unless
cured within 5 days, and in each and every such case, unless such Event of Default shall have been waived in writing by the Holder
(which waiver shall not be deemed to be a waiver of any subsequent default) at the option of the Holder and in the Holder’s
sole discretion, the Holder may consider this Note immediately due and payable, without presentment, demand, protest or (further)
notice of any kind (other than notice of acceleration), all of which are hereby expressly waived, anything herein or in any note
or other instruments contained to the contrary notwithstanding, and the Holder may immediately, and without expiration of any period
of grace, enforce any and all of the Holder’s rights and remedies provided herein or any other rights or remedies afforded
by law. Upon an Event of Default, interest shall accrue at a default interest rate of 16% per annum or, if such rate is usurious
or not permitted by current law, then at the highest rate of interest permitted by law. In the event of a breach of Section 8(k)
the penalty shall be $250 per day the shares are not issued beginning on the 4th day after the conversion notice was
delivered to the Company. This penalty shall increase to $500 per day beginning on the 10th day. The penalty for a breach
of Section 8(n) shall be an increase of the outstanding principal amounts by 20%. In case of a breach of Section 8(i), the outstanding
principal due under this Note shall increase by 50%. If this Note is not paid at maturity, the outstanding principal due under
this Note shall increase by 10%.

 

If the Holder shall commence an action
or proceeding to enforce any provisions of this Note, including, without limitation, engaging an attorney, then if the Holder prevails
in such action, the Holder shall be reimbursed by the Company for its attorneys’ fees and other costs and expenses incurred
in the investigation, preparation and prosecution of such action or proceeding.

 

9.          In
case any provision of this Note is held by a court of competent jurisdiction to be excessive in scope or otherwise invalid or unenforceable,
such provision shall be adjusted rather than voided, if possible, so that it is enforceable to the maximum extent possible, and
the validity and enforceability of the remaining provisions of this Note will not in any way be affected or impaired thereby.

 

	/s/ Anthony L. Anish	 
	Initials	 

 

    	5

    	 

    

 

10.         Neither
this Note nor any term hereof may be amended, waived, discharged or terminated other than by a written instrument signed by the
Company and the Holder.

 

11.         The
Company represents that it is not a “shell” issuer and has never been a “shell” issuer or that if it previously
has been a “shell” issuer that at least 12 months have passed since the Company has reported form 10 type information
indicating it is no longer a “shell issuer. Further. The Company will instruct its counsel to either (i) write a 144- 3(a(9)
opinion to allow for salability of the conversion shares or (ii) accept such opinion from Holder’s counsel.

 

12.         The
Company shall issue irrevocable transfer agent instructions reserving 77,922,000 shares of its Common Stock for conversions under
this Note (the “Share Reserve”). The reserve shall be replenished as needed to allow for conversions of this Note.
The Holder will initially submit a conversion notice/request for a tranche of shares to be issued with an agreed to conversion
price equal to $1000 (an “Initial Tranche Request”). The shares that are the subject to the Initial Trance Request
may be subsequently reconverted and repriced as follows: (i) the Holder shall immediately reduce the outstanding balance of the
Note by $1,000 and simultaneously send to the Company a live” or “repriced” conversion notice for the $1,000
priced using the conversion formula set forth in Section 4(a) of this Note, (ii) As the balance of the shares in the Initial Tranche
Request are converted via the delivery of the “live” or “repriced” conversion notice, the balance of the
Note shall be reduced using the formula set forth in Section 4(a) of this Note, as if such shares had originally been converted
as set forth in Section 4(a). By way of example, if the Tranche Conversion Request was for 1,000,000 shares and the face amount
of the Note was $25,000 the Holder would initially reduce $1,000 from the face amount leaving a balance of $24,000 and send the
Company a repriced conversion notice deducting that number of shares from the Initial Tranche Request necessary to equal $1,000
using the formula set forth in Section 4(a). Additionally, if, the following day, the Holder sent a “live” or “repriced”
conversion notice to the Company for 25,000 shares and, using the formula set forth in Section 4(a) the true conversion price would
have been $6,000, then the Holder shall make an additional reduction of $6,000 on the Note and shall indicate both the Note balance
and the share reserve balance on the “live” conversion notice. This process shall be repeated until there is no balance
remaining outstanding on the Note. Upon full conversion of this Note, the any shares remaining in the Share Reserve shall be cancelled.

 

13.         The
Company will give the Holder direct notice of any corporate actions, including but not limited to name changes, stock splits, recapitalizations
etc. This notice shall be given to the Holder as soon as possible under law.

 

14.         This
Note shall be governed by and construed in accordance with the laws of New York applicable to contracts made and wholly to be performed
within the State of New York and shall be binding upon the successors and assigns of each party hereto. The Holder and the Company
hereby mutually waive trial by jury and consent to exclusive jurisdiction and venue in the courts of the State of New York. This
Agreement may be executed in counterparts, and the facsimile transmission of an executed counterpart to this Agreement shall be
effective as an original.

 

	/s/ Anthony L. Anish	 
	Initials	 

 

    	6

    	 

    

 

IN WITNESS WHEREOF, the Company has caused
this Note to be duly executed by an officer thereunto duly authorized.

 

Dated: May 30, 2014

 

	 	M LINE HOLDINGS, INC
	 	 
	 	By:	/s/ Anthony L. Anish
	 	 	 
	 	Anthony L. Anish, Chief Operating Officer

 

	/s/ Anthony L. Anish	 
	Initials	 

 

    	7

    	 

    

 

EXHIBIT A

 

NOTICE OF CONVERSION

 

(To be Executed by the Registered Holder
in order to Convert the Note)

 

The undersigned hereby
irrevocably elects to convert $________ of the above Note into ________ Shares of Common Stock of M Line Holdings, Inc. (“Shares”)
according to the conditions set forth in such Note, as of the date written below.

 

If Shares are to be issued in the name of
a person other than the undersigned, the undersigned will pay all transfer and other taxes and charges payable with respect thereto.

 

	Date of Conversion: 	 

	Applicable Conversion Price:	 

	Signature: 	 
	 	[Print Name of Holder and Title of Signer]

	Address:	 
		 

 

	SSN or EIN: 	 

	Shares are to be registered in the following name: 	 

 

	Name:	 

	Address:	 

	Tel: 	 

	Fax:	 

	SSN or EIN: 	 

 

Shares are to be sent or delivered to the following account:

 

	Account Name: 	 

	Address:	 

 

	/s/ Anthony L. Anish	 
	Initials	 

 

    	8

    	 

    

 

THIS NOTE HAS NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER THE SECURITIES LAWS OF CERTAIN STATES. THESE SECURITIES
ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT
AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. LENDERS SHOULD BE AWARE THAT THEY MAY
BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THE ISSUER OF THESE SECURITIES MAY
REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE
IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS.

 

ADAR BAYS, LLC

COLLATERALIZED SECURED PROMISSORY NOTE

BACK END NOTE

 

	$50,000.00	Miami, FL
	 	June 10, 2014

 

		1.	Principal and Interest

 

FOR VALUE
RECEIVED, Adar Bays, LLC, a Florida Limited Liability Company (the “Company”) hereby absolutely and unconditionally
promises to pay to M Line Holdings, Inc (the “Lender”), or order, the principal amount of Fifty Thousand Dollars ($50,0000)
no later than February 10, 2015, unless the Lender does not meet the “current information requirements” required under
Rule 144 of the Securities Act of 1933, as amended, in which case the Company may declare the offsetting note issued by the Lender
on the same date herewith to be in Default (as defined in that note) and cross cancel its payment obligations under this Note as
well as the Lenders payment obligations under the offsetting note. This Full Recourse Note shall bear simple interest at the rate
of 8%.

 

		2.	Repayments and Prepayments; Security.

 

a.           All
principal under this Note shall be due and payable no later than February 10, 2015, unless the Lender does not meet the “current
information requirements” required under Rule 144 of the Securities Act of 1933, as amended, in which case the Company may
declare the offsetting note issued by the Lender on the same date herewith to be in Default (as defined in that note) and cross
cancel its payment obligations under this Note as well as the Lenders payment obligations under the offsetting note.

 

b.           The
Company may pay this Note at any time. This note may not be assigned by the Lender, except by operation of law.

 

	/s/ Anthony L. Anish	 

 

    	1

    	 

    

 

c.           This
Note shall initially be secured by the pledge of the $50,000.00 8% convertible promissory note issued to the Company by the Lender
on even date herewith (the “Lender Note”). The Company may exchange this collateral for other collateral with an
appraised value of at least $50,000.00, by providing 3 days prior written notice to the Lender. If the Lender does not object
to the substitution of collateral in that 3 day period, such substitution of collateral shall be deemed to have been accepted
by the Lender. All collateral shall be retained by New Venture Attorneys, P.C., which shall act as the escrow agent for the collateral
for the benefit of the Lender. The Company may not effect any conversions under the Lender Note until it has made full cash payment
for the portion of the Lender Note being converted.

 

_______

Lender Initials to Acceptance of bolded section above.

 

		3.	Events of Default; Acceleration.

 

a.           The
principal amount of this Note is subject to prepayment in whole or in part upon the occurrence and during the continuance of any
of the following events (each, an “Event of Default”): the initiation of any bankruptcy, insolvency, moratorium, receivership
or reorganization by or against the Company, or a general assignment of assets by the Company for the benefit of creditors. Upon
the occurrence of any Event of Default, the entire unpaid principal balance of this Note and all of the unpaid interest accrued
thereon shall be immediately due and payable. The Company may offset amounts due to the Lender under this Note by similar amounts
that may be due to the Company by the Lender resulting from breaches under the Lender Note.

 

b.           No
remedy herein conferred upon the Lender is intended to be exclusive of any other remedy and each and every remedy shall be cumulative
and in addition to every other remedy hereunder, now or hereafter existing at law or in equity or otherwise. The Company accepts
and agrees that this Note is a full recourse note and that the Holder may exercise any and all remedies available to it under law.

 

		4.	Notices.

 

a.           All
notices, reports and other communications required or permitted hereunder shall be in writing and may be delivered in person, by
telecopy with written confirmation, overnight delivery service or U.S. mail, in which event it may be mailed by first-class, certified
or registered, postage prepaid, addressed (i) if to a Lender, at such Lender’s address as the Lender shall have furnished
the Company in writing and (ii) if to the Company at such address as the Company shall have furnished the Lender(s) in writing.

 

b.           Each
such notice, report or other communication shall for all purposes under this Note be treated as effective or having been given
when delivered if delivered personally or, if sent by mail, at the earlier of its receipt or 72 hours after the same has been deposited
in a regularly maintained receptacle for the deposit of the United States mail, addressed and mailed as aforesaid, or, if sent
by electronic communication with confirmation, upon the delivery of electronic communication.

 

	/s/ Anthony L. Anish	 

 

    	2

    	 

    

 

		5.	Miscellaneous.

 

a.           Neither
this Note nor any provisions hereof may be changed, waived, discharged or terminated orally, but only by a signed statement in
writing.

 

b.           No
failure or delay by the Lender to exercise any right hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, power or privilege preclude any other right, power or privilege. The provisions of this Note are severable
and if any one provision hereof shall be held invalid or unenforceable in whole or in part in any jurisdiction, such invalidity
or unenforceability shall affect only such provision in such jurisdiction. This Note expresses the entire understanding of the
parties with respect to the transactions contemplated hereby. The Company and every endorser and guarantor of this Note regardless
of the time, order or place of signing hereby waives presentment, demand, protest and notice of every kind, and assents to any
extension or postponement of the time for payment or any other indulgence, to any substitution, exchange or release of collateral,
and to the addition or release of any other party or person primarily or secondarily liable.

 

c.           If
Lender retains an attorney for collection of this Note, or if any suit or proceeding is brought for the recovery of all, or any
part of, or for protection of the indebtedness respected by this Note, then the Company agrees to pay all costs and expenses of
the suit or proceeding, or any appeal thereof, incurred by the Lender, including without limitation, reasonable attorneys’
fees.

 

d.           This
Note shall for all purposes be governed by, and construed in accordance with the laws of the State of New York (without reference
to conflict of laws).

 

e.           This
Note shall be binding upon the Company’s successors and assigns, and shall inure to the benefit of the Lender’s successors
and assigns.

 

	/s/ Anthony L. Anish	 

 

    	3

    	 

    

 

IN WITNESS WHEREOF, the Company has caused
this Note to be executed by its duly authorized officer to take effect as of the date first hereinabove written.

 

	 	ADAR BAYS, LLC
	 	 
	 	By:	 
	 	 	 
	 	Title:	 
	 	 
	 	APPROVED:
	 	 
	 	M LINE HOLDINGS, INC.
	 	 
	 	By:	/s/ Anthony L. Anish
	 	 
	 	Title:	COO

 

    	4

    	 

    

 

DISBURSEMENT AUTHORIZATION

 (MEMORANDUM)

 

TO: ADAR BAYS, LLC.

 

FROM: M LINE HOLDINGS, INC

 

DATE: June 10, 2014

 

RE: Disbursement of Funds

 

In connection with
the funding of an aggregate of $50,000 pursuant to that certain Convertible Redeemable Note dated as of May 30, 2014 (the “Agreement”),
you are hereby directed to disburse such funds as follows:

 

		1.	$2,500.00 to New Venture Attorneys, P.C. in accordance with the wire transfer instructions attached as Schedule A hereto;

 

		2.	$4,750 to Anubis Capital Partners, LLC, in accordance with the wire transfer instructions attached as Schedule B hereto; and

 

		3.	$42,750 to M Line Holdings, Inc. in accordance with the wire transfer instructions attached as Schedule C hereto;

 

*with identical payments to be made on cash
funding of $50,000 back end note

 

	 	/s/ Anthony L.
    Anish
	 	Anthony L. Anish, Chief Operating officer

 

	/s/ Anthony L. Anish	 
	Company Initials	 

 

    	 

    	 

    

 

EXHIBIT A

NEW VENTURE ATTORNEYS

WIRING INFORMATION

 

Please wire funds to:

 

Bank of America

 

Routing No: 026009593

Acct No.: 164109387780

 

		Beneficiary:	New Venture Attorneys, PC, IOLTA account

 

		Attorney info:	New
Venture Attorneys, P.C.

900 E. Hamilton Ave, Suite 100 

Campbell, CA 95008

 

	/s/ Anthony L. Anish	 
	Company Initials	 

 

    	 

    	 

    

 

EXHIBIT B 

ANUBIS CAPITAL PARTNERS WIRING INFO

 

Capital One, N.A.

8989 Preston Road

Frisco, TX 75034

 

Routing No: 111901014

Acct No.:      3622044799

 

Beneficiary:   Anubis Capital Partners

2550 Midway Road Suite 198

Carrolton, TX 75006

 

	/s/ Anthony L. Anish	 
	Company Initials	 

 

    	 

    	 

    

 

EXHIBIT C

[WIRING INFO FOR ISSUER]

 

	Beneficiary:	M Line Holdings, Inc.
	 	2672 Dow Avenue
	 	Tustin, CA 92780
	 	 
	Bank Account Number: 23414-69572
	 
	Bank Routing: 121000358
	 
	Bank:	Bank of America
	 	14222 Culver Drive
	 	Irvine, CA 92620

 

	/s/ Anthony L. Anish	 
	Company Initials	 

 

    	 

    	 

    

 

UNANIMOUS CONSENT IN LIEU OF A SPECIAL

MEETING OF DIRECTORS OF

M LINE HOLDINGS, INC.

 

The undersigned, being all of the directors
of M Line Holdings, Inc, a corporation of the State of Nevada (the “Corporation”), do hereby authorize and approve
the actions set forth in the following resolutions without the formality of convening a meeting, and do hereby consent to the following
actions of this Corporation, which actions are hereby deemed affective as of the date hereof:

 

RESOLVED: That the officers of this
Corporation are authorized and directed to issue a $50,000 promissory note to Adar Bays, LLC, which provides conversion
features equal to 55% of the lowest closing bid price of the Corporation’s Common Stock for the last 10 trading days prior
to conversion, as well as 8% per annum interest and become due and payable on June 10, 2015; and

 

RESOLVED FURTHER: That the officers
of this corporation are authorized and directed to execute transfer agent instructions with the Company’s transfer
agent to irrevocably reserve 77,922,000 shares of the Company’s Common Stock with the transfer agent for the benefit of Adar
Bays, LLC for conversion of the above aforementioned notes and

 

RESOLVED FURTHER: That officers
of this Corporation are authorized and directed to issue an additional promissory note in the amount of $50,000.00 to Adar
Bays, LLC which provides conversion features equal to 55% of the lowest closing bid price of the Corporation’s Common Stock
for the last 10 trading days prior to conversion, as well as 8% per annum interest and become due and payable on June 10, 2015;
and

 

RESOLVED FURTHER: That the aforementioned
notes shall be paid for by Adar Bays, LLC by the payment to the Corporation of $50,000 and by the issuance of a $50,000
promissory note of Adar Bays, LLC secured by assets with a fair market value of not less than $50,000.00; and

 

RESOLVED FURTHER, that each of the
officers of the Corporation be, and they hereby are, authorized and empowered to execute and deliver such documents, instruments
and papers and to take any and all other action as they or any of them may deem necessary or appropriate of the purpose of carrying
out the intent of the foregoing resolutions and the transactions contemplated thereby; and that the authority of such officers
to execute and deliver any such documents, instruments and papers and to take any such other action shall be conclusively evidenced
by their execution and delivery thereof or their taking thereof.

 

    	 

    	 

    

 

The undersigned, by affixing their signatures
hereto, do hereby consent to, authorize and approve the foregoing actions in their capacity as a majority of the direction of M
Line Holdings, Inc.

 

	Dated: June 10, 2014	 
	 	 
	/s/ Bruce Barren	 
	Bruce Barren	 
	 	 
	/s/ George Colin	 
	George Colin	 
	 	 
	/s/ Jitu Banker	 
	Jitu Banker	 
	 	 
	/s/ Anthony
    Anish	 
	Anthony Anish	 

 

    	 

    	 

    

 

	 	
         

         

        2672 Dow Avenue, Tustin, CA 92780

        tel: 714.630.6253 • fax: 714.619.2339

        email: tony@mlineholdings.com

        web site: www.mlineholdings.com

 

June 10, 2014

VStock Transfer, LLC

71 Spruce Street

Suite 201

Cedarhurst, NY 11516

Re: Irrevocable Transfer Agent Instructions

 

Ladies and Gentlemen:

 

On June 10,
2014, M Line Holdings, Inc., a Nevada corporation (the “Company”) executed an 8% Convertible Promissory Notes in the
amount of $50,000.00 (collectively, the “Note”) with Adar Bays, LLC (the “Investor”).

 

Effective upon in
increase in the authorized capital sufficient to allow such a conversion of which you are properly notified together with confirmation
of the reserve, you are hereby irrevocably authorized and instructed to reserve Seventy Seven Million Nine Hundred Twenty Two
(77,922,000) shares of common stock (“Common Stock”) of the Company for issuance upon for 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. Once the reserve shares have been issued Vstock Transfer, LLC shall have no further duty or obligation
to issue shares until the reserve has been increased by the Company and the Investor. You are hereby further irrevocably authorized
and directed to issue the shares of Common Stock so reserved upon your receipt from the Investor of a notice of conversion (“Notice
of Conversion”) executed by the Investor in accordance with the terms of the Notice of Conversion. You shall have no duty
or obligation to confirm the accuracy or the information set forth on the Notice of Conversion. Once the Company repays the principal,
plus interest, plus default interest (if any) of any of the Note at the maturity date, upon written (e-mail being acceptable) confirmation
by the Investor or Investor Counsel as well as the Company, Transfer Agent shall have no further obligation to maintain a reserve
on behalf of the Investor or to issue any share of Common Stock to the Investor under the terms of that Note.

 

The Company must be
participating in the Depository Trust Company (“DTC”) Fast Automated Securities Transfer (“FAST”) program
in order for the shares to be delivered electronically. The shares to be issued are to be registered in the names of the registered
holder of the securities submitted for conversion or exercise.

 

The shares will be
issued within three (3) business day upon receipt of the Notice of Conversion. If the Company’s account is at least 30 days
past due, the Investor is responsible for the prepaid Transfer Agent transfer and shipping fees. In no event shall the Transfer
Agent be required to issue and deliver share certificates without the prior payment of its fees for the certificates to be issued.

 

    	 

    	 

    

 

The Company and the
Investor intend that these instructions require the placement of a restrictive legend on all applicable share certificates unless
the requirements listed below are met and the Investor provides the Transfer agent with an acceptable legal opinion stating that
share certificates can be issued without a legend. So long as you have previously received a legal opinion from the Company (or
Investor counsel) that the shares have been registered under the 1933 Act or otherwise may be sold pursuant to Rule 144 without
any restriction and the number of shares to be issued are less than 4.99% of the total issued and outstanding common stock of the
Company, such shares should be transferred, at the option of the holder of the Notes as specified in the Notice of Conversion,
either (i) electronically by crediting the account of a Prime Broker with the Depository Trust Company through its Deposit Withdrawal
Agent Commission system if the Company is a participant or (ii) in certificated form without any legend which would restrict the
transfer of the shares, and you should remove all stop-transfer instructions relating to such shares. Until such time as you are
advised by Investor counsel that the shares have been registered under the 1933 Act or otherwise may be sold pursuant to Rule 144
without any restriction and the number of shares to be issued are less than 4.99% of the total issued and outstanding common stock
of the Company, you are hereby instructed to place the following legends on the certificates:

 

THE SECURITIES REPRESENTED BY
THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THE SECURITIES MAY NOT BE SOLD, TRANSFERRED
OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER SAID ACT, OR AN OPINION OF INVESTOR
COUNSEL IN FORM, SUBSTANCE AND SCOPE CUSTOMARY FOR OPINIONS OF COUNSEL IN COMPARABLE TRANSACTIONS, THAT REGISTRATION IS NOT REQUIRED
OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT.

 

The legend set forth
above shall be removed and you are instructed to issue a certificate without such legend to the holder of any shares upon which
it is stamped, if: (a) such shares are registered for sale under an effective registration statement filed under the 1933 Act or
otherwise may be sold pursuant to Rule 144 without any restriction and the number of shares to be issued is less than 4.99% of
the total issued common stock of the Company, (b) such holder provides the Company and the transfer agent with an opinion of counsel,
in form, substance and scope customary for opinions of counsel in comparable transactions (and satisfactory to the transfer agent),
to the effect that a public sale or transfer of such security may be made without registration under the 1933 Act and such sale
or transfer is effected and (c) such holder provides the Company and the transfer agent with reasonable assurances that such shares
can be sold pursuant to Rule 144. Nothing herein shall be construed to require the Transfer Agent to take any action which would
violate state or federal rules, regulations or law, If an instruction herein would require such a violation, such instructions,
but not any other term herein, shall be void and unenforceable.

 

The
Company shall indemnify and defend 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 and Transfer Agent’s attorney) incurred by or asserted against you or any of them arising
out of or in connection with 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, bad faith or willful misconduct 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 or the Investor 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 Company agrees
that in the event that the Transfer Agent resigns as the Company’s 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 Company and the Investor agree that any action which names the Transfer Agent as
a party shall be brought in a court of general jurisdiction in New York, New York and no other court.

 

The Investor is intended
to be a party to these instructions and are third party beneficiaries 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/ Anthony L. Anish	 
	 	 	 
	Title:	COO	 
	 	 
	Acknowledged and Agreed:	 
	 	 
	VSTOCK TRANSFER, LLC	 
	 	 
	By:	 	 
	 	 	 
	Title:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00246-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00246-of-00352.parquet"}]]