Document:

Exhibit 10.21

 

AMENDED AND RESTATED SECURITIES EXCHANGE AND SETTLEMENT

AGREEMENT

 

This Amended
and Restated Securities Exchange and Settlement Agreement, dated as of August 15, 2014 (this “Agreement”), between
M Line Holdings, Inc., a Nevada corporation (inclusive of any Subsidiaries, “Issuer”), and Beaufort Capital
Partners LLC (“Investor”) (Issuer and Investor may hereinafter be referred to individually as a “Party”
or jointly as the “Parties”).

 

WHEREAS,
Issuer issued a certain amended debt security in the form of an Credit Loan Note in the principal face amount of one hundred thousand
dollars (USD$100,000) to Utica Leaseco, LLC (“Original Holder”) as of July 1, 2014, which Credit Loan
Note was issued to the Original Holder on October 8, 2012 and tacks back to such date, a copy of which Credit Loan Note is annexed
hereto as Exhibit A and made a part hereof (the “Debt Securities Instrument”);

 

WHEREAS, pursuant
to a certain Debt Securities Assignment and Purchase Agreement between Original Holder and Investor, and confirmed by the Issuer,
dated as of July 1, 2014, a copy of which is annexed hereto as Exhibit B (the “Debt Assignment and Purchase Agreement”),
Investor has heretofore acquired from Original Holder all rights and interest in and to the debt securities reflected in the Debt
Securities Instrument, in the principal and interest amount of one hundred thousand dollars (USD$100,000.00) (the “Debt
Securities”) in consideration of a cash sum following such securities having become eligible for resale based on certain
conditions pursuant to exemption from registration under Rule 144 (such securities acquisition, the “144 Debt Conveyance”),
and Investor is now the sole Beneficial Owner of the Debt Securities;

 

WHEREAS,
notwithstanding that, in accordance with its stated terms, the Debt Securities Instrument is silent as to its rights of exchange
or convertibility into shares of the common stock of Issuer, $0.001 par value per share (the “Issuer Common Stock”),
and without regard to the non-existence of terms of an existing “conversion” provision in the Debt Securities Instrument,
Investor desires to exchange the Debt Securities from time to time hereinafter for equity securities in the form of unrestricted
shares of Issuer Common Stock, and Issuer desires to facilitate such exchange, in each case pursuant to their respective economic
interests and in each case as more specifically and filly set forth herein; and

 

WHEREAS,
subject to certain conditions, and pursuant to Section 3(a)(9) of the Securities Act, one or more exchanges of the Debt Securities
for shares of Issuer Common Stock (each, a “3(a)(9) Exchange”) while beneficially held by Investor is/are eligible
to be effected without registration as more specifically and frilly provided herein;

 

NOW, THEREFORE, the
Parties hereby acknowledge, represent, warrant, covenant and agree, in each case as applicable, as follows for the benefit of each
other as well as the benefit of the securities legal counsel and securities transfer agent professionals involved in the 144 Debt
Conveyance and any one or more 3(a)(9) Exchanges hereunder (such transactions collectively, the “Transactions”):

 

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1.       Recitals.
The foregoing recitals are hereby incorporated by reference into this Agreement and made a part hereof.

 

2.        Definitions.
For purposes of this Agreement, the following terms, when appearing in their capitalized forms as follows, shall have the corresponding
assigned meanings:

 

“144
Debt Conveyance” – shall have the meaning specified in the second paragraph of the recitals to this Agreement.

 

“3(a)(9) Exchange”
– shall have the meaning specified in the fifth paragraph of the recitals to this Agreement.

 

“Affiliate”
– with respect to any specified Person, any other Person who, directly or indirectly, through one or more intermediaries,
Controls, is Controlled By, or is Under Common Control With, such specified Person.

 

“Agreement” – shall have the
meaning specified in the preamble above.

 

“Authorization”
– any authorization, approval, consent, certificate, license, permit or franchise of or from any Governmental Authority or
pursuant to any Law.

 

“Beneficial
Owner” – with respect to any shares means a Person who shall be deemed to be the beneficial owner of such shares
(i) which such Person or any of its Affiliates or associates (as such term is defined in Rule 12b-2 promulgated under the Exchange
Act) beneficially owns, directly or indirectly, (ii) which such Person or any of its Affiliates or associates has, directly or
indirectly, (A) the right to acquire (whether such right is exercisable immediately or subject only to the passage of time), pursuant
to any agreement, arrangement or understanding or upon the exercise of consideration rights, exchange rights, warrants or options,
or otherwise, or (B) the right to vote pursuant to any agreement, arrangement or understanding, (iii) which are beneficially owned,
directly or indirectly, by any other Persons with whom such Person or any of its Affiliates or associates or any Person with whom
such Person or any of its Affiliates or associates has any agreement, arrangement or understanding for the purpose of acquiring,
holding, voting or disposing of any such shares, or (iv) pursuant to Section 13(d) of the Exchange Act and any rules or regulations
promulgated thereunder.

  

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“Clearing
Date” – the first date upon which both (i) the Exchange Shares under any Exchange Notice have been deposited into
the Investor’s designated brokerage account, and (ii) the Investor has thereafter received confirmation from its brokerage
firm that it may execute trades involving such Exchange Shares.

 

“Control”
(including “Controlled By” and “Under Common Control With”) – the possession, directly
or indirectly or as trustee or executor, of the power to direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, as trustee or executor, by contract or credit arrangement or otherwise.

 

“Current
Form 10 Information” – for a given registrant/company, such information as is or may be required by the SEC to
satisfy the financial and other disclosure requirements of SEC Form 10 within the meaning of Rule 144.

 

“Current
Public Information” – in an appropriate format the information concerning a given issuer specified in paragraphs
(a)(5)(i) to (xiv) inclusive, and paragraph (a)(5)(xvi), of Rule 15c2-11 of the Rules and Regulations promulgated under the Exchange
Act.

 

“Debt
Securities” – shall have the meaning specified in the second paragraph of the recitals to this Agreement.

 

“Debt
Securities Instrument” – shall have the meaning specified in the first paragraph of the recitals to this Agreement.

 

“DTC”
– The Depository Trust Company, a subsidiary of DTCC.

 

“DTCC” – The Depository Trust
& Clearing Corporation.

 

“DTC Eligibility”
/ “DTC Eligible” – in respect of a given security, its eligibility to be traded electronically in book-entry
form through DTC.

 

“DWAC” – DTC’s Deposit
Withdrawal Agent Commission system.

 

“Exchange
Act” – the Securities and Exchange Act of 1934, as amended.

 

“Exchange Amount” – shall
have the meaning specified in Section 2.1 of this Agreement.

 

“Exchange
Cap” – the maximum number of shares of Issuer Common Stock that Issuer may issue pursuant to this Agreement and
the transactions contemplated hereby without (i) breaching Issuer’s obligations under the applicable rules of The Nasdaq
Stock Market or any other Principal Market on which the Issuer Common Stock may be listed or• quoted, or (ii) obtaining stockholder
approval under the applicable rules of The Nasdaq Stock Market or any other Principal Market on which the Issuer Common Stock may
be listed or quoted.

 

“Exchange
Notice” – a written notice to the Investor executed by a duly authorized officer of the Issuer and including an
Exchange Request, in each case as the same may be deemed amended in accordance with Section 2.4,3.4.

 

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“Exchange Notice Date” – shall
have the meaning specified in Section 2.4.1 of this

 

“Exchange
Notice Date/Time Stamp” – shall have the meaning specified in Section 2.4.1 of this Agreement.

 

“Exchange Request” – shall
have the meaning specified in Section 2.1 of this Agreement.

 

“Exchange Shares” – shall
have the meaning specified in Section 2.1 of this Agreement.

 

“Exchange
Shares Delivery Period” – in relation to any given Exchange Notice, the period commencing upon the date and time
indicated in the Exchange Notice Date/Time Stamp and continuing thereafter for twenty-eight (28) Trading Hours.

 

“FAST
Program” – DTC’s Fast Automated Securities Transfer program, participation in which is a required for DTC
Eligibility.

 

“FINRA” – shall mean the Financial
Industry Regulatory Authority.

 

“Governmental
Authority” means any entity or body exercising executive, legislative, judicial, regulatory or administrative functions
of or pertaining to United States federal, state, local, or municipal government, foreign, international, multinational or other
government, including any department, commission, board, agency, bureau, subdivision, instrumentality, official or other regulatory,
administrative or judicial authority thereof, and any non-governmental regulatory body to the extent that the rules and regulations
or orders of such body have the force of Law.

 

“Gypsy
Swap” – any series of transactions in which, by arrangement or otherwise, the resale of an outstanding unrestricted
security by the then holder thereof results, directly or indirectly, and no matter the sequence of such transactions, in a capital
infusion into the issuing company.

 

“Investor” – shall have the
meaning specified in the preamble to this Agreement.

 

“Investor Holding Period” –
shall have the meaning specified in Section 2.1 of this Agreement.

 

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“Issuer” – shall have the
meaning specified in the preamble to this Agreement.

 

“Issuer
Common Stock” – shall have the meaning specified in the fourth paragraph of the recitals to this Agreement.

 

“Issuer’s Share
Delivery Obligation” – shall have the meaning specified in Section 2.4.3.3 of this Agreement.

 

“Knowledge”
– of a given Person, and with respect to any fact or matter, the actual knowledge of the directors and executive officers
of such Person and each of its Subsidiaries, together with such knowledge that such directors, executive officers and other employees
could be expected to discover after due investigation concerning the existence of the fact or matter in question.

 

“Law”
means any statute, law (including common law), constitution, treaty, ordinance, code, order, decree, judgment, rule, regulation
and any other binding requirement or determination of any Governmental Authority.

 

“Liens”
means any liens, claims, charges, security interests, mortgages, pledges, easements, conditional sale or other title retention
agreements, defects in title, covenants or other restrictions of any kind, including, any restrictions on the use, voting, transfer
or other attributes of ownership.

 

“Material
Adverse Effect” – with respect to any Person, any state of facts, development, event, circumstance, condition,
occurrence or effect that, individually or taken collectively with all other preceding facts, developments, events, circumstances,
conditions, occurrences or effects (a) is materially adverse to the condition (financial or otherwise), business, operations or
results of operations of such Person, or (b) impairs the ability of such Person to perform its obligations under this Agreement.

 

“Officer’s
Certificate” – shall have the meaning specified in Section 2.4.3.2 of this Agreement.

 

“Officer’s
Certificate Deadline” – shall have the meaning specified in Section 2.4.3,2 of this Agreement.

 

“Officer’s
Certificate Delivery Obligation” – shall have the meaning specified in Section 2.4.3.2 of this Agreement.

 

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“Order” –
any award, injunction, judgment, decree, stay, order, ruling, subpoena or verdict, or other decision entered, issued or rendered
by any Governmental Authority.

 

“Original
Holder” – shall have the meaning specified in the first paragraph of the recitals to this Agreement.

 

“OTC” – over-the-counter.

 

“OTCPink”
– the OTCMarkets tier for companies that are not SEC Reporting Companies but that regularly file and make available Current
Public Information reports and that are current in such filings as of the date hereof

 

“OTCOB”
– the base level OTCMarkets tier for SEC Reporting Companies.

 

“Ownership
Limitation” – at any given point in time, 4.99%.

 

“Parties” – shall have the
meaning specified in the preamble to this Agreement.

 

“Person”
– an individual, a corporation, a partnership, a limited liability company, a trust, an unincorporated association, Governmental
Authority, a person (including, without limitation, a “person” as defined in Section I3(d)(3) of the Exchange Act),
or any political subdivision, agency or instrumentality of a Governmental Authority, or any other entity or body.

 

“Pricing Period”
– in relation to any Exchange Shares, the twenty (20) Trading Days immediately preceding the date upon which Investor shall
have delivered to Issuer the corresponding Exchange Notice.

 

“Principal
Market” – as of any given date, whichever of the New York Stock Exchange, the Nasdaq Global Select Market, the
Nasdaq Global Market, the Nasdaq Capital Market, the American Stock Exchange, the OTCQB, or the OTCPink is at the time the principal
trading exchange or market for the Issuer Common Stock,

 

“Proceeding”
or “Proceedings” – any actions, suits, claims, hearings, arbitrations, mediations, Proceedings (public
or private) or governmental investigations that have been brought by any Governmental Authority or any other Person.

 

“Rule 144”
– Rule 144 promulgated under the Securities Act.

 

“Rule 405”
– Rule 405 of Regulation S-T.

 

“SEC” – shall mean the U.S.
Securities and Exchange Commission.

 

“SEC Reporting
Company” – any company with a class of common stock registered under Section 12 of the Exchange Act and that,
as of the date hereof is, and for at least the ninety (90) day period immediately preceding the date hereof has been, subject
to the periodic and other reporting requirements of either Section 13 or 15(d) of the Exchange Act.

 

“Securities
Act” – the Securities Act of 1933, as amended.

 

“Shell Company”
– a company having no or nominal operations and either (a) no or nominal assets, (b) assets consisting solely of cash and
cash equivalents, or (c) assets consisting of any amount of cash and cash equivalents and nominal other assets.

 

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“Stock Price”
– on any given Trading Day, the lowest traded stock price (as reported by a direct feed service) of the Issuer Common Stock
on the Principal Market’ or, if the Issuer Common Stock is not traded on a Principal Market, the highest reported bid price
for the Issuer Common Stock, as provided by FINRA.

 

“Trading Day”
– any day during which the Principal Market shall be open for business.

 

“Trading Hours”
– for any given Trading Day, those hours between 9:30 am (U.S.) Eastern Time and 4:30 pin (U.S.) Eastern Time.

 

“Transactions”
– shall have the meaning specified in the sixth paragraph of the recitals to this Agreement.

 

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“Transfer
Agent” – as of any given date, the transfer agent firm engaged by Issuer to perform securities transfer agent
and related services for the Issuer and which, as of the date of this Agreement, is VStock Transfer, 77 Spruce Street, Suite 201,
Cedarhurst, NY, 11516.

 

“Transfer
Agent Instruction Letter” – shall have the meaning specified in Section 2.4.3.1 of this Agreement.

 

“Transfer
Agent Instruction Delivery Deadline” – shall have the meaning specified in Section 2.4.3.1 of this Agreement.

 

“Transfer
Agent Instruction Delivery Requirement” – shall have the meaning specified in Section 2.4.3.1 of this Agreement.

 

“Transfer
Agent Legal Opinion Letter” – shall have the meaning specified in Section 2.4.3.2of this Agreement.

 

2.        The
3(a)(9) Exchange(s).

 

2.1          (a)
Generally. Subject to the terms, conditions and limitations of this Agreement, for so long as any amounts payable under
the Debt Securities remain (i) unexchanged for shares of Issuer Common Stock hereunder, or (ii) unpaid and outstanding (such period
being deemed the “Investor Holding Period”), the Investor shall have a continuing right in its sole and exclusive
discretion, through the delivery by Investor to Issuer of an Exchange Notice, to elect to exchange as part of a 3(a)(9) Exchange
(in each instance, an “Exchange Request”) all or any part of the amount of any principal and/or accrued but
unpaid interest thereon (as set forth within any such Exchange Notice, the “Exchange Amount”) for a number
of fully-paid and non-assessable shares of Issuer Common Stock equal to the lower of (A) the Exchange Amount divided by
$.0001 and (B) the Exchange Amount divided by fifty percent (50%) of the Stock Price during the Pricing Period (such result
in each instance constituting the “Exchange Shares”); provided, however, that any and all obligations
under the Debt Securities shall remain unaffected during such Investor Holding Period for all or any part thereof remaining unexchanged,
including without limitation any events or other terms of default. In connection with this provision, the Debt Securities Instrument
shall be deemed to have been incorporated by reference herein with all rights and obligations attendant thereto and arising thereunder
to be continuing unaffected hereby but only insofar as not in conflict at any given time with any superseding provisions of this
Agreement.

 

(b) Exception.
Notwithstanding the paragraph above, if the Issuer’s share price, as reported on its Principal Market, at any time on or
before October 7, 2014 (i) loses the bid (ie..0001 on the ask with zero market makers on the bid level 2), (ii) loses DTC eligibility,
or (iii) becomes “chilled for deposit”, then the fixed Exchange Amount shall be divided by .00001 in order to calculate
the Exchange Shares.

 

2.2          Certain
Acknowledgments and Covenants. Each of Issuer and Investor hereby (a) acknowledge that they are aware and understand that,
in order to be eligible for exemption from registration under the Securities Act, any 3(a)(9) Exchange(s) hereunder may not involve
(i) any additional consideration beyond the Debt Securities being surrendered/exchanged by the Investor, or (H) any payment by
the Issuer of any commission or other remuneration either directly or indirectly for the solicitation of such exchange(s), and
(b) covenant that any 3(a)(9) Exchange(s) hereunder shall not involve (i) any additional consideration beyond the Debt Securities
being surrendered/exchanged by the Investor, or (ii) any payment by the Issuer of any commission or other remuneration either
directly or indirectly for the solicitation of such exchange(s).

 

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2.3         Resale
Eligibility of Exchange Shares. Given the issuance date and nature of the Debt Securities, the eligibility for resale exemption
from registration of the 144 Debt Conveyance, and the fact that a duly qualified 3(a)(9) Exchange does nothing to affect the tradeability
status of the securities exchanged, any Exchange Shares, upon issuance, shall be eligible for unrestricted resale under Section
4(l) of the Securities Act.

 

2.4         Mechanics
and Related Matters.

 

2.4.1        Delivery
of Exchange Notice. Any given Exchange Notice shall be deemed to have been delivered to the Issuer as of the date (the “Exchange
Notice Date”) and time of dispatch by email to the Issuer as set forth on the email so dispatched, provided, however,
that no reasonably compelling basis upon which to challenge such date and time exists and has been provided to Investor (in
each case, the “Exchange Notice Date/Time Stamp”).

 

2.4.2       Certain
Exchange Notice Limitations. Anything in this Agreement to the contrary notwithstanding, in no event shall any Exchange Notice
be deemed valid (i) if and to the extent that fulfillment of the Exchange Request contained therein would cause the aggregate
number of shares of Issuer Common Stock beneficially owned by the Investor and its affiliates, including those in relation to
which it/they have a right to acquire within sixty (60) days, to exceed the Ownership Limitation, or (ii) if at such time the
Issuer Common Stock is listed or quoted on The Nasdaq Stock Market or any other U.S. national securities exchange, and to the
extent that that fulfillment of the Exchange Request contained therein would cause the aggregate number of shares of Issuer Common
Stock issued pursuant to this Agreement, when combined with all shares of Issuer Common Stock issued pursuant to any transactions
with which they may be aggregated with other transactions for purposes of and under applicable rules of The Nasdaq Stock Market
or any other Principal Market on which the Common Stock may at such time be listed or quoted, would cause the aggregate number
of shares of Issuer Common Stock that would be deemed issued pursuant to this Agreement, to exceed the Exchange Cap. In the event
that any Exchange Notice shall have been delivered by Investor to Issuer but is invalid to any extent in accordance with the foregoing,
such Exchange Notice shall be void ab initio but only to the extent of such invalidity.

 

2.4.3      Delivery
and Settlement of Exchange Shares.

 

2.4.3.1          Transfer
Agent Instruction Requirement. Upon receipt of an Exchange Notice, Issuer shall immediately, but in no event more than two
(2) Trading Days (the “Transfer Agent Instruction Delivery Deadline”), deliver a letter to Transfer Agent,
by email as a .pdf attachment and with a cc (courtesy copy) email to Investor, such letter to be in the form annexed hereto as
Exhibit D and incorporated by reference herein, inclusive of the unanimous written board consent annexed thereto (the “Transfer
Agent Instruction Letter”), in each case filled in as appropriate based on the information set forth in the corresponding
Exchange Notice, or deemed set forth in the corresponding Exchange Notice in accordance with Section 2.4.3.4 below (the “Transfer
Agent Instruction Delivery Requirement”).

 

2.4.3.2          Officer’s
Certificates. In connection with the delivery of any Exchange Shares, the cost of obtaining any formal written legal opinion
reasonably requested by Transfer Agent, including any one or more concluding that such Exchange Shares be delivered free of any
restrictive legend (each, a “Transfer Agent Legal Opinion Letter”), shall be borne by Investor, and it shall
be within the exclusive discretion of Investor as to what legal firm shall be engaged for this purpose. Promptly upon delivery
via email by Investor’s designated counsel to the president and chief executive officer of Issuer at the email address provided
in Section 5 of this Agreement (but in no event more than two [2] Trading Days) (the “Officer’s Certificate
Deadline”) of any officer’s certificates identified in such email as being required by Investor’s designated
counsel for purposes of Investor’s designated counsel being able to deliver the Transfer Agent Legal Opinion Letter (each,
an “Officer’s Certificate”), the president and chief executive officer of Issuer shall duly execute and
return to Investor’s designated counsel, in .pdf format at the email address from which the corresponding unexecuted Officer’s
Certificate(s) had been received, such duly executed Officer’s Certificate (the “Officer’s Certificate Delivery
Obligation”).

 

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2.4.3.3       Share
Delivery Obligation. Subject only to the limitations set forth in Section 2.4.2 above and any delays in delivery to Transfer
Agent of the Transfer Agent Legal Opinion Letter, and within the applicable Exchange Share Delivery Period, Issuer shall be obligated
to and shall take any and all steps required to either (a) if Transfer Agent is not participating in the DTC FAST Program during
the applicable Exchange Share Delivery Period, and/or the Exchange Shares are not DTC Eligible, deliver for settlement to the
window of Investor’s brokerage account (as designated in the Transfer Agent Instruction Letter) physical certificates representing
the Exchange Shares deliverable pursuant to the corresponding Exchange Request, or (b) if Transfer Agent is participating in the
DTC FAST Program during the applicable Exchange Share Delivery Period, and/or the Exchange Shares are DTC Eligible, cause such
transfer agent to effectuate delivery and settlement of such Exchange Shares electronically, in book-entry form, by appropriately
crediting the account of the Investor’s prime broker (as designated in the Transfer Agent Instruction Letter) with DTC through
its DWAC System and providing proof satisfactory to the Investor thereof (in relation to any given Exchange Request, the “Issuer’s
Share Delivery Obligation”).

 

3.         Representations
and Warranties of Issuer. Issuer hereby represents and warrants to Investor, which representations and warranties, excepting
(c) below, shall be deemed to be repeated by Issuer on each day on which any amounts payable under the Debt Securities, including
interest, remain (i) unexchanged for shares of Issuer Common Stock hereunder, or (ii) unpaid and outstanding, that:

 

 

(a)     it
is a corporation duly organized, validly existing, and in good standing
under the Laws of the State of Nevada;

 

(b)     
it has taken all requisite corporate and other action to authorize, and it has full corporate power and authority without
any required further action, to (i) carry on its present business as currently conducted, (ii) own its properties and
assets, (iii) execute, deliver, and perform all of its obligations under this Agreement, (iv) have borrowed and to repay with
interest the indebtedness evidenced by the Debt Securities, and (v) issue and deliver to Investor or its designee any and
all Exchange Shares potentially deliverable pursuant to this Agreement;

 

(c)     its
capitalization as of the date of this Agreement includes (i) five hundred million (500,000,000) shares of Issuer Common Stock authorized,
of which two hundred thirty seven million two hundred sixty one thousand eight hundred and eighteen (237,261,818) shares are issued
and outstanding, and (ii) ten million (10,000,000) of Issuer preferred stock, par value $0.001 per share authorized, of 200,000
are issued and outstanding, and seven (7) notes/debentures in the combined amount of two hundred eighty five thousand dollars ($285,000)
that, in accordance with their terms, are “convertible” into capital stock of Issuer, issued and outstanding;

 

(d)    the
Debt Securities constitute a legal, valid and binding, and past due obligation of Issuer, enforceable against Issuer in accordance
with the terms thereof, subject to applicable bankruptcy, reorganization, insolvency, or similar Laws affecting creditors’
rights generally and subject, as to enforceability, to equitable principles of general application (regardless of whether enforcement
is sought in a proceeding in equity or at law), there is no dispute relating to the validity of such obligation, and any defenses
to its validity have been waived in their entirety;

 

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(e)
    the execution, delivery and performance of this Agreement, the payment of all amounts due under the
Debt Securities by Issuer, and the consummation of the Transactions, do not and will not (i) violate any provision of its
articles of incorporation or bylaws, (ii) conflict with or result in the breach of any material provision of, or give rise to
a default under, any agreement with respect to indebtedness or of any other material agreement to which Issuer is a party or
by which it or any of its properties or assets are bound, (iii) conflict with any Law, statute, rule or regulation
or any Order, judgment or ruling of any court or other agency of government to which it is subject or any of its
properties or assets may be bound or affected, in each case except where such conflict would not have a Material Adverse
Effect on Issuer, or (iv) result in the creation or imposition of any Lien, charge, mortgage, encumbrance or other security
interest or any segregation of assets or revenues or other preferential arrangement (whether or not constituting a security
interest) with respect to any present or future assets, revenues or rights to the receipt of income of Issuer;

 

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(f)      it
is currently an SEC Reporting Company.

 

(g)    
it is not a Shell Company, and, if it ever was a Shell Company, it (i) has ceased to be a Shell Company; (ii) has filed all reports
and other materials required to be filed by Section 13 or 15(d) of the Exchange Act, as applicable, during the twelve (12) month
period immediately preceding the date of this Agreement (or for such shorter period as it has been required to file such reports
and materials), other than current reports on Form 8-K, and (iii) has filed Current Form 10 Information with the SEC reflecting
its status as an entity that is no longer a Shell Company, and at least one (1) year has elapsed since such Current Form 10 Information
was filed;

 

(h)    
the Issuer Common Stock currently trades publicly on the OTCQB market on under the symbol “MLHC” and is not
currently subject to any trading halts, suspensions, delistings or similar actions imposed by the SEC, FINRA, or any other
regulatory or similar authorities and no members of its management or board of directors is aware or has any reason to be
aware of any such threatened halts, suspensions, delistings or similar actions;

 

(i)      the Issuer
Common Stock is currently DTC Eligible, Transfer Agent is participating in the DTC FAST Program, and no DTC “chill”
has been imposed upon the Issuer Common Stock;

 

(j)       its
management understands what a Gypsy Swap is and that such arrangements are deemed to constitute unlawful schemes to evade the
registration requirements of the Securities Act, and has no knowledge of any such arrangements in connection with the
Transactions;

 

(k)     there
are no legal actions, suits, arbitration proceedings, investigations or other Proceedings pending or, to the reasonable knowledge
of Issuer’s officers or directors, threatened against Issuer which, if resolved unfavorably would have a Material Adverse
Effect on the financial condition of Issuer or the validity or enforceability of, or Issuer’s ability to perform its obligations
under, the Debt Securities and/or this Agreement; and

 

(l)       all
governmental and other consents, authorizations, approvals, licenses and orders that were required to have been obtained by Issuer
with respect to the Debt Securities and/or its issuance were duly obtained and remain in full force and effect and all conditions
of any such consents, Authorizations, approvals, licenses and orders have been complied with.

 

4.        Covenants
of Issuer. In addition to the other obligations hereunder and under the Debt Securities, and for so long as any amounts payable
under the Debt Securities, including interest, remain (i) unexchanged for shares of Issuer Common Stock hereunder, or (ii) unpaid
and outstanding, Issuer hereby covenants to the Investor as follows:

 

(a)     upon
issuance, any Exchange Shares shall be duly authorized, fully paid and nonassessable;

 

(b)     it
shall refrain from disclosing, and shall cause its officers, directors, employees and agents to refrain from disclosing, any material
non-public information to Investor without also disseminating such information to the public in accordance with applicable Law,
unless prior to disclosure of such information Issuer identifies such information as being material non-public information and
provides Investor with the opportunity to accept or refuse to accept such material non-public information for review;

 

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(c)     it
shall timely file all reports required by it to be filed, in each case in full compliance with the content requirements thereof,
and shall meet all other of its obligations under the Exchange Act;

 

(d)     it
shall take any and all steps as may be necessary to insure that the Issuer Common Stock continues to trade publicly and does not
become the subject of any trading halts, suspensions, delistings or similar actions imposed by the SEC, FINRA, or any other regulatory
or similar authorities;

 

(e)     it
shall take any and all steps as may be necessary to insure that the Issuer Common Stock continues to be DTC Eligible, that Transfer
Agent continue to participate in the DTC FAST Program, and that no DTC “chill” is imposed upon the Issuer Common Stock;

 

(f)      it
shall take any and all steps as may be necessary to insure that it avoid becoming or otherwise being deemed by the SEC a Shell
Company;

 

(g)     it
shall not issue any shares of Issuer Conunon Stock under this Agreement which, when aggregated with all other shares of Issuer
Common Stock then beneficially owned by Investor and its affiliates, including those in relation to which it/they have a right
to acquire within sixty (60) days, would result in the beneficial ownership by Investor and its affiliates to exceed the Ownership
Limitation, and, upon the written or telephonic request of Investor from time to time, Issuer shall confirm to Investor within
one (1) Trading Day of such request the number of shares of Issuer Common Stock then outstanding;

 

(h)     it
shall not initiate or otherwise execute any share buybacks of the Issuer Common Stock that would have the effect of increasing
Investor’s percentage beneficial ownership together with its affiliates, including those in relation to which it/they have
a right to acquire within sixty (60) days, to exceed the Ownership Limitation;

 

(i)      if
the Common Stock is listed or quoted on The Nasdaq Stock Market or any other U.S. national securities exchange during the Investor
Holding Period, it shall not issue any shares of Issuer Common Stock pursuant to this Agreement to the extent that after giving
effect thereto, the aggregate number of all shares of Issuer Common Stock that would be issued pursuant to this Agreement, together
with all shares of Issuer Common Stock issued pursuant to any transactions that may be aggregated with the transactions contemplated
by this Agreement under applicable rules of The Nasdaq Stock Market or any other Principal Market on which the Issuer Common Stock
may be listed or quoted, would exceed the Exchange Cap, unless and until Issuer elects to solicit stockholder approval of the transactions
contemplated by this Agreement and the stockholders of Issuer have in fact so approved the transactions contemplated by this Agreement
in accordance with the applicable rules and regulations of The Nasdaq Stock Market, any other Principal Market on which the Issuer
Conunon Stock may be listed or quoted, and the Issuer’s articles of incorporation and bylaws; and

 

(j)      it
shall not knowingly be a participant in any Gypsy Swap in connection with the Transactions or otherwise.

 

    	13

    	 

    

  

5.      Notices.
   Except as otherwise expressly set forth herein, any notice, demand or request relating to any matter set forth herein shall be
made in writing and shall be deemed effective when hand delivered or when mailed, postage pre-paid by registered or certified mail
return receipt requested, when picked-up by or delivered to a recognized overnight courier service, or when sent by email to either
Issuer at its address below, or to Investor at its address below, or such other address as either Party shall have notified the
other in writing as provided herein from and after the date hereof.

 

If to Issuer:

 

M Line Holdings, Inc.

2672 Dow Avenue

Tustin, CA 92780

Att: Tony Anish

 

If to Investor:

 

Beaufort Capital Partners LLC

660 White Plains Road, Suite

455 Tarrytown, NY 10591

Att: Leib Schaeffer

 

6.    Governing
Law. This Agreement and the Exhibits hereto shall be governed by and interpreted and enforced in accordance with the Laws
of the State of New York, without giving effect to any choice of Law or conflict of Laws rules or provisions (whether of the State
of New York or any other jurisdiction) that would cause the application of the Laws of any jurisdiction other than the State of
New York.

 

7.     Headings.
The descriptive headings contained in this Agreement are included for convenience of reference only and shall not affect in any
way the meaning or interpretation of this Agreement.

 

8.     Counterparts.
This Agreement may be executed and delivered (including by facsimile or email .pdf file format attachment transmission) in one
or more counterparts, and by the different Parties hereto in separate counterparts, each of which when executed and delivered shall
be deemed to be an original but all of which taken together shall constitute one and the same agreement.

 

9.     Integration:
Modification. This Agreement, including the Exhibits hereto, constitutes the entirety of the rights and obligations of each
of the Investor and Issuer with respect to the subject matter hereof. No provision of this Agreement may be modified except by
an instrument in writing signed by the Party against whom the enforcement of any such modification is or may be sought.

 

[SIGNATURES APPEAR ON THE FOLLOWING PAGE]

  

    	14

    	 

    

  

IN WITNESS WHEREOF,
the Parties have caused this Agreement to be executed by the respective officers thereunto duly authorized, in each case as of
the date first written above.

 

	 	“ISSUER”	 
	 	 	 
	 	 	M LINE HOLDINGS, INC.
	 	 	 
	 	 	By:	/s/  Tony Anish
	 	 	Name: Tony Anish
	 	 	Title: President
	 	 	 
	 	“INVESTOR”
	 	 	 
	 	 	BEAUFORT CAPITAL PARTNERS LLC
	 	 	 
	 	 	By:	
	 	 	Name: Leib Schaeffer
	 	 	Title: Managing Member

  

    	15Exhibit 10.22

 

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 MAY 30, 2015

BACK END NOTE

 

FOR VALUE RECEIVED,
M Line Holdings, Inc. (the “Company”) promises to pay to the order of UNION CAPITAL, 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 338 Crown Street, Brooklyn, NY 11225, 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”). 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 (15) 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

 

(l)          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:	 	 

 

	 	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/ Antony L. Anish	 
	Initials	 

 

    	8

    

  

SECURITIES PURCHASE AGREEMENT

 

This SECURITIES
PURCHASE AGREEMENT (the “Agreement”), dated as of May 30, 2014, by and between M Line Holdings, Inc., a
Nevada corporation, with headquarters located at 2672 Dow Avenue, Tustin, CA 92780 (the “Company”), and UNION CAPITAL,
LLC, a Delaware limited liability company, with its address at 16192 Coastal Highway, Lewes, DE 19958 (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 May 30, 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 5”), 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 tetins 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.

 

/s/ Anthony L. Anish 

 

    	5

    	 

    

 

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
future, 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.

 

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.

 

/s/ Anthony L. Anish 

 

    	6

    	 

    

 

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.

 

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:

UNION CAPITAL, LLC

338 Crown Street

Brooklyn, NY 11225

Attn: Yakov Borenstein

 

/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.

 

1.          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 Housing Inc.

 

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

 

	UNION CAPITAL, LLC.	 
	 	 
	By:	 	 
	Name: 	Yakov Borenstein	 
	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 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 UNION CAPITAL PROPERTIES, 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 out-standing
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 re-garding registration and transfers of this Note. The principal of, and interest
on, this Note are payable at 16192 Coastal Highway, Lewes, DE 19958, 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 ap-pearing on the records of
the Company. The forwarding of such check or wire transfer shall con-stitute 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.
In-terest 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. ice 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 frac-tions 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 un-paid
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 deter-mined 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 (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 with-in 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

 

(1)         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, un-less 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, with-out presentment, demand,
protest or (further) notice of any kind (other than notice of accelera-tion), all of which are hereby expressly waived, anything
herein or in any note or other instru-ments 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 provid-ed 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 permit-ted 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 in-crease of the outstanding principal amounts by 20%. In case of a breach of Section
8(i), the out-standing 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, in-cluding, 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 69,444,000 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 simultane-ously 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 ex-ample, 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 bal-ance 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”
conver-sion notice to the Company for 25,000 shares and, using the foimula set forth in Section 4(a) the true conversion price
would have been $6,000, then the Holder shall make an additional reduc-tion 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 remain-ing 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:	 
	 	 	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
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 MAY 30, 2015

BACK END NOTE

 

FOR VALUE RECEIVED,
M Line Holdings, Inc. (the “Company”) promises to pay to the order of UNION CAPITAL, 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 out-standing 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 re-garding registration and transfers of this Note. The principal of, and interest on, this Note
are payable at 16192 Coastal Highway, Lewes, DE 19958, 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 ap-pearing on the records of the Company.
The forwarding of such check or wire transfer shall con-stitute 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. In-terest
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 present-ment
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”). 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 un-paid
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 deter-mined 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 with-in sixty (60) days after such appointment; or

 

(e)          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 de-faults, 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 subse-quent 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 (fur-ther) 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 notwith-standing, and the Holder may immediately,
and without expiration of any period of grace, en-force any and all of the Holder’s rights and remedies provided herein or
any other rights or reme-dies 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 out-standing 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, in-cluding, 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, dis charged 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 issu-er. 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 al-low 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 issu-ing 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 execut-ed by an officer thereunto duly authorized.

 

Dated:___________

 

	 	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 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.

 

UNION CAPITAL, LLC

COLLATERALIZED SECURED PROMISSORY NOTE

BACK END NOTE

 

	$50,000.00	 	Brooklyn, NY
	 	 	May 30, 2014

 

		1.	Principal and Interest

 

FOR VALUE
RECEIVED, Union Capital, LLC, a Delaware 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 January 30, 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 January 30, 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 

 

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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 

 

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		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 

 

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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.

 

	 	UNION CAPITAL, LLC
	 	 	 
	 	By: 	 
	 	 	 
	 	Title:	 
	 	 	 
	 	APPROVED:
	 	 
	 	M LINFJI IOL IN
	 	 	 
	 	By:	/s/ Anthony L. Anish
	 	 	 
	 	Title:  	COO

 

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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 $60,673.97         

 

REPLACEMENT
NOTE- ORIGINALLY ISSUED 9/29/2011 IN THE AMOUNT OF $150,000.00

 

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 UNION CAPITAL, 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 out-standing 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 re-garding registration and transfers of this Note. The principal of, and interest on, this Note
are payable at 338 Crown Street, Brooklyn, NY 11225, 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 ap-pearing on the records of the Company. The
forwarding of such check or wire transfer shall con-stitute 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. In-terest
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 frac-tions 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	 

 

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(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 re-ferred 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 un-paid
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 deter-mined 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	 

 

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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 Se-curities 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 (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 with-in 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

 

	/s/ Anthony L. Anish	 
	Initials	 

 

    	4

    	 

    

 

(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)          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

 

(1)         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, un-less 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, with-out presentment,
demand, protest or (further) notice of any kind (other than notice of accelera-tion), all of which are hereby expressly waived,
anything herein or in any note or other instru-ments 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 provid-ed 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 permit-ted 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 in-crease of the outstanding principal amounts by 20%. In case of a breach
of Section 8(i), the out-standing 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, in-cluding, 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 ad-justed 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 5 be
affected or impaired thereby.

 

	/s/ Anthony L. Anish	 
	Initials	 

 

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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 issu-er. Further. The Company will instruct its counsel to either (i) write a 144- 3(a(9)
opinion to al-low 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 69,444,000 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 simultane-ously 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 ex-ample, 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 bal-ance 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”
conver-sion 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 reduc-tion 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 remain-ing 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	 

 

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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:	 
	 	 	Anthony L. Anish, Chief Operating officer

 

	/s/ Anthony L. Anish	 
	Initials	 

 

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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

    	 

    

 

	 	
         

         

        2672 Dow Avenue, Tustin, CA 92780

        tel: 714.630.6253 • fax: 714.619.2339

        email: tony@mlineholdings.com

        web site: www.mlineholdings.com

 

May 30, 2014

 

VStock Transfer, LLC

71 Spruce Street

Suite 201

Cedarhurst, NY 11516

 

Re: Irrevocable Transfer Agent Instructions

 

Ladies and Gentlemen:

 

On May 27,
2014, M Line Holdings, Inc., a Nevada corporation (the “Company”) executed two 8% Convertible Promissory Notes in the
amount of $50,000.00 and $60,697.23 (collectively, the “Note”) with Union Capital,
LLC (the “Investor”).

 

You are hereby irrevocably
authorized and instructed to reserve One Hundred Thirty Eight Million Eight Hundred Eighty Eight Thousand (138,888,000) 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 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: 	 	 

 

 

    	 

    	 

    

DISBURSEMENT AUTHORIZATION

(MEMORANDUM)

 

TO: UNION CAPITAL, LLC.

 

FROM: M LINE HOLDINGS, INC

 

DATE: May 30, 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 nding o

 

	 	/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]

 

	/s/ Anthony L. Anish	 
	Company Initials	 

 

    	 

    	 

    

 

DEBT PURCHASE AGREEMENT

 

This Debt Purchase
Agreement (the “Agreement”) made as of this 30th day of February, 2014, by and between Union Capital, LLC
(the “Buyer”) and Spagus Capital Partners, LLC (the “Seller”).

 

		1.	PURCHASE AND SALE OF THE CONVERTIBLE NOTE

 

Upon the terms and conditions herein contained,
at the Closing (as hereinafter defined), the Seller hereby sells, assigns and transfers to the Buyer and the Buyer agrees to purchase
from the Seller the “Transferred Rights” of the Seller and all rights thereto. Transferred Rights shall mean all rights
with respect to $50,000 in principal and proportional accrued interest (the “Assigned Portion”) under that promissory
note in the amount of $150,000 issued by M Line Holdings, Inc. (“Borrower” or “Company”) on September 29,
2011, a true and correct copy which has been provided to New Venture Attorneys, P.C. (the “Note”). By its signatures
hereto the Borrower accepts the assignment of the Transferred Rights to Buyer and agrees that Buyer may convert the Transferred
Rights into shares of the Company’s common stock.

 

		2.	CONSIDERATION

 

The purchase price for the Assigned Portion
of the Note shall be the Buyer’s payment of Fifty Thousand Dollars ($50,000.00) to the Seller, for the Assigned Portion (the
“Purchase Price”).

 

		3.	CLOSING

 

The closing of the transactions contemplated
by this Agreement (the “Closing”) shall take place simultaneously with the delivery of the Purchase Price via wire
transfer of immediately available funds against the assignment of the Note. The funds will be wired as set forth in Exhibit A.

 

4.    REPRESENTATIONS AND WARRANTIES
OF SELLER The Seller hereby represents and warrants to the Buyer as follows:

 

4.1           Status
of the Seller and the Note. The Seller is the beneficial owner of the Note. The Note is currently outstanding and Seller is
informed by Company that the Note represents a bona fide debt obligation of the Company.

 

4.2           Authorization;
Enforcement. (i) Seller has all requisite corporate power and authority to enter into and perform the Agreement and to consummate
the transactions contemplated hereby and to sell each Note, in accordance with the terms hereof, (ii) the execution and delivery
of this Agreement by the Seller and the consummation by it of the transactions contemplated hereby (including, without limitation,
the sale of the Note to the Buyer) have been duly authorized by the Seller and no further consent or authorization of the Seller
or its members is required, (iii) this Agreement has been duly executed and delivered by the Seller, and (iv) this Agreement constitutes
a legal, valid and binding obligation of the Seller enforceable against the Seller in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating
to, or affecting generally, the enforcement of creditors’ rights and remedies or by other equitable principles of general
application.

 

    	1

    	 

    

 

4.3           No
Conflicts. The execution, delivery and performance of this Agreement by the Seller and the consummation by the Seller of the
transactions contemplated hereby (including, without limitation, the sale of the Note to the Buyer) will not (i) conflict with
or result in a violation of any provision of its certificate of formation or other organizational documents, 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, note, bond, indenture or other instrument to which Seller are 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 Seller are subject) applicable to Seller or the Note is bound or affected. The Seller is
not required to obtain any consent, authorization or order of, or make any filing or registration with, any court, governmental
agency, regulatory agency, self-regulatory organization or stock market or any third party in order for it to execute, deliver
or perform any of its obligations under this Agreement in accordance with the terms hereof.

 

4.4           Title;
Rule 144 Matters. Seller has good and marketable title to the Note. Seller is not an “Affiliate” of the Company,
as that term is defined in Rule 144 of the Securities Act of 1933, as amended (the “1933 Act”), as such Buyer will
be able to track the holding period of the Seller.

 

4.5           Consent
of the Company. 

 

(i) The Company,
as evidence by its signature at the foot of this Agreement, hereby represents and warrants that, upon delivery to the Company of
the Note, the Company shall promptly cause to be issued to and in the name of Buyer one of more new executed Notes in the aggregate
amount of $50,000.00 plus accrued interest but otherwise having the sale terms (including, but not necessarily limited to, referring
to the original issue date) as in the Note. The Note may contain the same restrictive legend as provided in the original Note,
but no stop transfer order. The Note is currently outstanding and represents a bona fide debt obligation of the Company.

 

(ii)         The
signature by the Company also represents the Company’s agreement to treat Buyer as a party to, and having all the rights
of the Seller with respect to the Transferred Rights.

 

5. REPRESENTATIONS, WARRANTIES AND
ACKNOWLEDGEMENTS OF THE BUYER. The Buyer hereby represents warrants and acknowledges to the Seller as follows:

 

5.1 Sophisticated
Investor. The Buyer has sufficient knowledge and experience of financial and business matters, is able to evaluate the merits
and risks of the partial purchase of the Note and has had substantial experience in previous private and public purchases of securities.

 

    	2

    	 

    

 

5.2           Authorization;
Enforcement. (i) Buyer has all requisite corporate power and authority to enter into and perform the Agreement and to consummate
the transactions contemplated hereby and to purchase each Note, in accordance with the terms hereof, (ii) the execution and delivery
of this Agreement by the Buyer and the consummation by it of the transactions contemplated hereby (including, without limitation,
the purchase of the Note by the Buyer) have been duly authorized by the Buyer and no further consent or authorization of the Buyer
or its members is required, (iii) this Agreement has been duly executed and delivered by the Buyer, and (iv) this Agreement constitutes
a legal, valid and binding obligation of the Buyer enforceable against the Buyer in accordance with its terms, except as such enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting
generally, the enforcement of creditors’ rights and remedies or by other equitable principles of general application.

 

5.3           No
Conflicts. The execution, delivery and performance of this Agreement by the Buyer and the consummation by the Buyer of the
transactions contemplated hereby will not (i) conflict with or result in a violation of any provision of its certificate of formation
or other organizational documents, 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, note, bond, indenture or other instrument to which Buyer
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 Buyer is subject) applicable to Seller
or the Note is bound or affected. The Buyer is not required to obtain any consent, authorization or order of, or make any filing
or registration with, any court, governmental agency, regulatory agency, self-regulatory organization or stock market or any third
party in order for it to execute, deliver or perform any of its obligations under this Agreement in accordance with the terms hereof.

 

		6.	MISCELLANEOUS

 

6.1           Binding
Effect; Benefits. This Agreement shall inure to the benefit of, and shall be binding upon, the parties hereto and their respective
successors and permitted assigns. Except as otherwise set forth herein, this Agreement may not be assigned by any party hereto
without the prior written consent of the other party hereto. Except as otherwise set forth herein, nothing in this Agreement, expressed
or implied, is intended to confer on any person other than the parties hereto or their respective successors and permitted assigns
any rights, remedies, obligations or liabilities under or by any reason of this Agreement.

 

6.2           Notices.
All notices, requests, demands and other communications which are required to be or may be given under this Agreement shall be
in writing and shall be deemed to have been duly given when delivered in person, or transmitted by telecopy or telex, or upon receipt
after dispatch by certified or registered first class mail, postage prepaid, return receipt requested, to the party to whom the
same is so given or made, at the following addresses (or such others as shall be provided in writing hereafter):

 

    	3

    	 

    

 

	 	(a)	If to the Buyer to:
	 	 	Union Capital, LLc 
	 	 	16192 Coastal Highway
	 	 	Lewes, DE 19958 
	 	 	Attn: Samuel Eisenberg 

 

	 	(b)	If to the Seller to: 
	 	 	Spagus Capital Partners, LLC
	 	 	250 F. Centerville Road
	 	 	Warwick, RI 02886 

 

6.3           Entire
Agreement. This Agreement constitutes the entire agreement and supersedes all prior agreements and understandings, oral and
written, between the parties hereto with respect to the subject matter hereof.

 

6.4           Further
Assurances. After the Closing, at the request of either party, the other party shall execute, acknowledge and deliver, without
further consideration, all such further assignments, conveyances, endorsements, deeds, powers of attorney, consents and other documents
and take such other action as may be reasonably requested to consummate the transactions contemplated by this Agreement.

 

6.5           Headings.
The section and other headings contained in this Agreement are for reference purposes only and shall not be deemed to be part of
this Agreement or to affect the meaning or interpretation of this Agreement.

 

6.6           Counterparts.
This Agreement may be executed in any number of counterparts and by facsimile, each of which, when executed, shall be deemed to
be an original and all of which together shall be deemed to be one and the same instrument.

 

6.7           Governing
Law. This Agreement shall be construed as to both validity and performance and enforced in accordance with and governed by
the laws of the State of New York, without giving effect to the conflicts of law principles thereof.

 

6.8           Severability.
If any term or provision of this Agreement shall to any extent be invalid or unenforceable, the remainder of this Agreement shall
not be affected thereby, and each term and provision of the Agreement shall be valid and enforced to the fullest extent permitted
by law.

 

6.9           Amendments.
This Agreement may not be modified or changed except by an instrument or instruments in writing executed by the parties hereto.

 

    	4

    	 

    

 

IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be duly executed as of the date first above written.

 

	 	BUYER:
	 	 
	 	UNION CAPITAL, LLC
	 	 
	 	By:	 
	 	Samuel Eisenberg, Managing Member
	 	 
	 	SELLER:
	 	 
	 	SPAGUS CAPITAL PARTNERS, LLC
	 	 
	 	By:	 
	 	 
	 	Title:	 

 

	ACCEPTED AND AGREED:	 
	 	 
	M LINE HOLDINGS, INC	 
	 	 
	By:	/s/ Anthony L. Anish	 
	 	 	 
	Title:	COO	 

 

    	5

    	 

    

 

EXHIBIT A

WIRE INSTRUCTIONS FOR SELLER

 

PLEASE WIRE YOUR FUNDS TO THE FOLLOWING

 

PLEASE INSERT COMPLETE BANK WIRING INFO INCLUDING BANK ADDRESS
AS WELL AS ADDRESS

 

    	6

    	 

    

 

NON-AFFILIATION LETTER

 

May 30, 2014

 

Counsel to M LINE HOLDINGS, INC.

 

Counsel to Union Capital,
LLC

 

Gentlemen:

 

Please let
this letter serve as confirmation that Spagus Capital Partners, LLC is not now, and has not been during the preceding 90 days,
an officer, director, 10% or more shareholder of M LINE HOLDINGS, INC. or in any other way an “affiliate” (as that
term is defined in Rule 144(a)(1) adopted pursuant to the Securities Act of 1933, as amended) of such issuer.

 

	Very Truly yours,	 
	 	 
	SPAGUS CAPITAL PARTNERS, LLC	 
	 	 
	By:	 	 
	 	 	 
	Title:	 	 

 

    	7

    	 

    

 

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 officers of this
Corporation are authorized and directed to amend and restate a $50,000 portion (plus accrued interest) of a $150,000.00
note issued to Spagus Capital Partners, LLC on September 29, 2011 into a new promissory note to Union Capital, LLC, in the amount
of $60,673.97 to provide conversion features equal to 55% of the lowest closing bid price of the last day of 10 trading days prior
to conversion, as well as 8% interest and become due and payable on May 30, 2015; and

 

RESOLVED: That the officers of this
Corporation are authorized and directed to issue a $50,000 promissory note to Union Capital,
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 May 30, 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 138,888,000 shares of the Company’s Common Stock with the transfer agent for the benefit of
Union Capital, 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 Union Capital, 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 May 30, 2015; and

 

RESOLVED FURTHER: That the aforementioned
notes shall be paid for by Union Capital, LLC by the payment to the Corporation of $50,000
and by the issuance of a $50,000 promissory note of Union Capital, 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: May 30, 2014

 

	/s/ Bruce W. Barren	 
	Bruce Barren	 

 

	/s/ George Cohn	 
	George Cohn	 

 

	/s/ Jitu Banker	 
	Jitu Banker	 

 

	/s/ Anthony L. Anish	 
	Anthony Anish

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