EXHIBIT 10.2

THIS NOTE HAS BEEN ISSUED WITH “ORIGINAL ISSUE DISCOUNT” FOR U.S. FEDERAL INCOME
TAX PURPOSES. THE ISSUER WILL MAKE AVAILABLE TO ANY HOLDER OF THIS NOTE: (1) THE
ISSUE PRICE AND ISSUE DATE OF THE NOTE, (2) THE AMOUNT OF ORIGINAL ISSUE
DISCOUNT ON THE NOTE, (3) THE YIELD TO MATURITY OF THE NOTE, AND (4) ANY OTHER
INFORMATION REQUIRED TO BE MADE AVAILABLE BY U.S. TREASURY REGULATIONS UPON
RECEIVING A WRITTEN REQUEST FOR SUCH INFORMATION AT THE FOLLOWING ADDRESS: 1910
PACIFIC AVENUE, SUITE 20000, DALLAS, TEXAS 75201.

NEITHER THE ISSUANCE NOR SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE
NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE 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.

Principal Amount: $1,120,000.00
Issue Date: August 21, 2017
Purchase Price: $1,000,000.00
 
Original Issue Discount: $120,000.00
 

SENIOR SECURED CONVERTIBLE PROMISSORY NOTE

 
FOR VALUE RECEIVED, NEXEON MEDSYSTEMS INC, a Nevada corporation (hereinafter
called the “Borrower”), hereby promises to pay to the order of LEONITE CAPITAL,
LLC, a Delaware limited liability company, or registered assigns (the “Holder”)
the principal sum of $1,120,000.00 (the “Principal Amount”), together with
interest at the rate of twelve percent (12%) per annum (the “Stated Rate”), on
the dates set forth below or upon acceleration or otherwise, as set forth herein
(the “Note”). The consideration to the Borrower for this Note is $1,000,000.00
(the “Consideration”).  At the closing, the outstanding principal amount under
this Note shall be $1,120,000.00, consisting of the Consideration plus the OID
(as defined herein). The maturity date shall be twenty-four (24) months (the
“Term”) from the Issue Date (the “Maturity Date”). The principal sum, as well as
any accrued and unpaid interest and other fees shall be due and payable in
accordance with the payment terms set forth in Article I herein. This Note may
not be prepaid in whole or in part except as otherwise explicitly set forth
herein. Any amount of principal or interest on this Note, which is not paid by
the Maturity Date, shall bear interest at the rate of twenty-four percent (24%)
per annum from the due date thereof until the same is paid (“Default Interest”).
Interest shall commence accruing on the date that the Note is fully paid and
shall be computed on the basis of a 365-day year and the actual number of days
elapsed. All payments due hereunder (to the extent not converted into the
Borrower’s common stock (the “Common Stock”) in accordance with the terms
hereof) shall be made in lawful money of the United States of America. All
payments shall be made at such address as the Holder shall hereafter give to the
Borrower by written notice made in accordance with the provisions of this Note.
Whenever any amount expressed to be due by the terms of this Note is due on any
day which is not a business day, the same shall instead be due on the next
succeeding day which is a business day and, in the case of any interest payment
date which is not the date on which this Note is paid in full, the extension of
the due date thereof shall not be taken into account for purposes of determining
the amount of interest due on such date. As used in this Note, the term
“business day” shall mean any day other than a Saturday, Sunday or a day on
which commercial banks in the city of New York, New York are authorized or
required by law or executive order to remain closed.
 
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This Note carries an original issue discount of $120,000.00 (the “OID”), to
cover the Holder’s legal fees, accounting fees, due diligence fees, monitoring,
and/or other transactional costs incurred in connection with the purchase and
sale of the Note, which is included in the principal balance of this Note. Thus,
the purchase price of this Note shall be $1,000,000.00, computed as follows: the
Principal Amount minus the OID.

This Note shall be a senior secured obligation of the Borrower, with priority
over all future Indebtedness (as defined below) of the Borrower as provided for
herein.  The obligations of the Borrower under this Note are secured pursuant to
the terms of the following agreements of even date herewith: (i) the security
agreement (the “Security Agreement”) by and among the Borrower, and certain
subsidiaries and affiliates of the Borrower, and the Holder, and such security
interest includes but is not limited to all of the assets of the Borrower and
such subsidiaries and affiliates, (ii) the deed of trust (the “Deed of Trust”)
granted by Roselancland Limited Partnership, an affiliate of the Borrower
(“RLP”), in favor of the Holder conveying in trust certain property of RLP to
the Holder, (iii) the personal guarantee (the “Personal Guarantee”) of Randy M.
Rosellini, and (iv)  the share pledge agreement (the “Share Pledge Agreement”)
between Rosellini Scientific LLC, wholly owned by William Rosellini, and the
Holder in respect of the shares of Nexeon Medsystems Belgium SPRL.

This Note is 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 Borrower and will not impose personal liability
upon the holder thereof.

The following additional terms shall also apply to this Note:
 
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ARTICLE I. PAYMENTS

1.1
Payments.

(a)
Monthly Payments.

(1)    Beginning on September 22, 2017 (the “Initial Monthly Payment Date”) and
on the same day of each and every calendar month thereafter throughout the term
of this Note (the “Monthly Payment Dates”), Borrower shall make monthly payments
under this Note to the Holder in the amounts provided in this Article I (each, a
“Monthly Payment Amount”).

(2)    The Monthly Payment Amount for the payment due on each Monthly Payment
Date through and including the 12th Monthly Payment Date (the “Final
Interest-Only Payment Date”) shall be $11,200, consisting of accrued but unpaid
interest on the unpaid principal balance of this Note.

(3)    The Monthly Payment Amount shall be adjusted on the 13th Monthly Payment
Date to an amount sufficient to fully repay the unpaid principal balance of this
Note, together with interest at the Stated Rate, by the end of the Amortization
Period (as defined below) in substantially equal monthly installments. The
“Amortization Period” shall be a period of 12 months beginning on the Final
Interest-Only Payment Date.  An amortization schedule is attached hereto as
Schedule A.  The Borrower shall make payments under this Article I in accordance
with Schedule A.

(b)  Payments from Future Funding Sources.  The Borrower shall pay to the Holder
on an accelerated basis any outstanding principal amount of the Note, along with
accrued, but unpaid interest, from:
 
(1)   Future Financing Proceeds - twenty percent (20%) of the gross proceeds of
any future financing of the Borrower that is completed following the closing of
the Borrower’s proposed acquisition of Medi-Line SSPRL (”Medi-Line”), and

(2)   Other Future Receipts - all net proceeds from any sale of assets of the
Borrower or any of its subsidiaries or receipt by Borrower or any of its
subsidiaries of any tax credits.
    

(c)  Remaining payments.  Any and all remaining unpaid principal of and interest
on this Note shall be due and payable in full on the Maturity Date.
 
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ARTICLE II. CONVERSION RIGHTS

2.1        Conversion Right.  The Holder shall have the right at any time at the
Holder’s option to convert all or any part of the outstanding and unpaid
principal amount and accrued and unpaid interest of this Note into fully paid
and non-assessable shares of Common Stock or any shares of capital stock or
other securities of the Borrower into which such Common Stock shall hereafter be
changed or reclassified (each, a “Conversion Share”) at the conversion price
(the “Conversion Price”) determined as provided herein (a “Conversion”);
provided, however, that in no event shall the Holder be entitled to convert any
portion of this Note in excess of that portion of this Note upon conversion of
which the sum of (1) the number  of shares of Common Stock beneficially owned by
the Holder and its affiliates (other than shares of Common Stock which may be
deemed beneficially owned through the ownership of the unconverted portion of
the Note or the unexercised or unconverted portion of any other security of the
Borrower subject to a limitation on conversion or exercise analogous to the
limitations contained herein, and, if applicable, net of any shares that may be
deemed to be owned by any person not affiliated with the Holder who has
purchased a portion of the Note from the Holder) and (2) the number of shares of
Common Stock issuable upon the conversion of the portion of this Note with
respect to which the determination of this proviso is being made, would result
in beneficial ownership by the Holder and its affiliates of more than 4.99% of
the outstanding shares of Common Stock. For purposes of the proviso to the
immediately preceding sentence, beneficial ownership shall be determined in
accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”), and Regulations 13D-G thereunder,  except  as  otherwise 
provided  in  clause  (1)  of  such  proviso,  provided, further, however, that
the limitations on conversion may be waived (up to a maximum of 9.99%) by the
Holder upon, at the election of the Holder, not less than 61 days’ prior notice
to the Borrower, and the provisions of the conversion limitation shall continue
to apply until such 61st day (or such later date, as  determined by the Holder,
as may be specified in such notice of waiver). The number of shares  of Common
Stock to be issued upon each conversion of this Note shall be determined by
dividing the Conversion Amount (as defined below) by the applicable Conversion
Price then in effect on the date specified in the notice of conversion, in the
form attached hereto as Exhibit A (the “Notice of Conversion”), delivered to the
Borrower by the Holder in accordance with Section 2.4 below; provided that the
Notice of Conversion is submitted by facsimile or e-mail (or by other means
resulting in, or reasonably expected to result in, notice) to the Borrower
before 6:00 p.m., New York, New York time on such conversion date (the
“Conversion Date”). The term “Conversion Amount” means, with respect to any
conversion of this Note, the sum of (1) the principal amount of this Note to be
converted in such conversion plus (2) at the Holder’s option, accrued and unpaid
interest, if any, on such principal amount at the interest rates provided in
this Note to the Conversion Date plus (3) at the Holder’s option, Default
Interest, if any, on the amounts referred to in the immediately preceding
clauses (1) and/or (2) plus (4) the Holder’s expenses relating to a Conversion
including, but not limited to, legal fees, brokerage deposit costs, DWAC fees
and other expenses and disbursements plus (5) at the Holder’s option, any
amounts owed to the Holder pursuant to Sections 2.3 and 2.4(g) hereof.

2.2
Conversion Price.

(a)    Calculation of Conversion Price. The Conversion Price shall be, at the
option of the Holder, (i) $1.75 (the “Fixed Conversion Price”) (subject to
adjustment as further described herein) or (ii) 80% (the “Conversion Price
Discount”) multiplied by the price per share paid by the investors in a
subsequent Equity Financing (as defined herein) of the Borrower.  If the Holder
determines not to convert the Note, or any portion thereof, by the first
subsequent Equity Financing resulting in gross proceeds to the Borrower of at
least $2,000,000, the Conversion Price Discount will terminate.  For the
avoidance of doubt, an “Equity Financing” shall mean the Borrower’s sale of its
Common Stock or any securities conferring the right to purchase the Borrower’s
Common Stock or securities convertible into, or exchangeable for (with or
without additional consideration), the Borrower’s Common Stock.
 
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(b)    Fixed Conversion Price Adjustments.

(1)  Repricing Adjustment.  The Fixed Conversion Price shall be subject to a
one-time repricing 275 days after the closing (the “Repricing Date”). The
repricing will be based on the lowest volume weighted average price, or VWAP, of
the seven (7) trading days immediately preceding the Repricing Date. In the
event the Borrower’s Common Stock is not trading on a national exchange or
quoted on the OTC markets, or if the Note is not eligible to be converted and
the underlying Conversion Shares sold under Rule 144 of the Securities Act at
the Repricing Date, then the Repricing Date shall be on the next date that the
Borrower’s Common Stock is so listed or quoted and the Note is eligible to be
converted and the underlying Conversion Shares sold under Rule 144.

(2)  Stock Dividends and Stock Splits.  If the Borrower, at any time while this
Note is outstanding: (i) pays a stock dividend or otherwise makes a distribution
or distributions payable in shares of Common Stock on shares of Common Stock;
(ii) subdivides outstanding shares of Common Stock into a larger number of
shares; or (iii) issues, in the event of a reclassification of shares of the
Common Stock, any shares of capital stock of the Borrower, then the Fixed
Conversion Price shall be multiplied by a fraction of which the numerator shall
be the number of shares of Common Stock (excluding any treasury shares of the
Borrower) outstanding immediately before such event and of which the denominator
shall be the number of shares of Common Stock outstanding immediately after such
event.

(3)  Fundamental Transaction.  If, at any time while this Note is outstanding,
(i) the Borrower effects any merger or consolidation of the Borrower with or
into another person, (ii) the Borrower effects any sale of all or substantially
all of its assets in one transaction or a series of related transactions, (iii)
any tender offer or exchange offer (whether by the Borrower or another person)
is completed pursuant to which holders of Common Stock are permitted to tender
or exchange their shares for other securities, cash or property, or (iv) the
Borrower effects any reclassification of the Common Stock or any compulsory
share exchange pursuant to which the Common Stock is effectively converted into
or exchanged for other securities, cash or property (in any such case, a
“Fundamental Transaction”), then, upon any subsequent conversion of this Note,
the Holder shall have the right to receive, for each Conversion Share that would
have been issuable upon such conversion immediately prior to the occurrence of
such Fundamental Transaction, the same kind and amount of securities, cash or
property as it would have been entitled to receive upon the occurrence of such
Fundamental Transaction if it had been, immediately prior to such Fundamental
Transaction, the holder of 1 share of Common Stock (the “Alternate
Consideration”). For purposes of any such conversion, the determination of the
Fixed Conversion Price shall be appropriately adjusted to apply to such
Alternate Consideration based on the amount of Alternate Consideration issuable
in respect of 1 share of Common Stock in such Fundamental Transaction, and the
Borrower shall apportion the Fixed Conversion Price among the Alternate
Consideration in a reasonable manner reflecting the relative value of any
different components of the Alternate Consideration.
 
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(4)  Anti-dilution Adjustment.  If at any time while this Note is outstanding,
the Borrower sells or grants (or has sold or granted, as the case may be) any
option to purchase or sells or grants any right to reprice, or otherwise
disposes of or issues (or has sold or issued, as the case may be, or announces
any sale, grant or any option to purchase or other disposition), any Common
Stock or other securities convertible into, exercisable for or otherwise
entitled the any person or entity the right to acquire shares of Common Stock at
an effective price per share that is lower than the then Fixed Conversion Price
(such lower price, the “Base Conversion Price” and such issuances, collectively,
a “Dilutive Issuance”) (it being agreed that if the holder of the Common Stock
or other securities so issued shall at any time, whether by operation of
purchase price adjustments, reset provisions, floating conversion, exercise or
exchange prices or otherwise, or due to warrants, options or rights per share
which are issued in connection with such issuance, be entitled to receive shares
of Common Stock at an effective price per share that is lower than the Fixed
Conversion Price, such issuance shall be deemed to have occurred for less than
the Conversion Price on such date of the Dilutive Issuance), then the Fixed
Conversion Price shall be reduced to a price equal the Base Conversion Price. 
Such adjustment shall be made whenever such Common Stock or other securities are
issued.  Notwithstanding the foregoing, no adjustment will be made under this
Section 2.2(b)(4) in respect of an Exempt Issuance.  For purposes of this
Section 2.2(b)(4) an “Exempt Issuance” means an issuance of shares (i) reserved
as employee shares described under the Borrower’s option pool now or created in
the future, (ii) shares issued for consideration other than cash pursuant to a
merger, consolidation, acquisition, or similar business combination approved by
the Borrower’s Board of Directors (the “Board”), provided, however, that any
such issuance shall only be to a person (or to the equity holders of a person)
which is, itself or through its subsidiaries, an operating company or an owner
of an asset in a business synergistic with the business of the Borrower and
shall provide to the Borrower additional benefits in addition to the investment
of funds, but shall not include a transaction in which the Borrower is issuing
securities primarily for the purpose of raising capital or to an entity whose
primary business is investing in securities; (iii) shares issued pursuant to any
equipment loan or leasing arrangement, real property leasing arrangement or debt
financing from a bank or similar financial institution approved by the Board; or
(iv) shares with respect to which the Holder waives its anti-dilution rights
granted hereby.  In the event of an issuance of securities involving multiple
tranches or closings, any adjustment pursuant to this Section 2.2(b)(4) shall be
calculated as if all such securities were issued at the initial closing.
 
(5)  Notice to the Holder.  Whenever the Conversion Price is adjusted pursuant
to any provision of this Section 2.2(b), the Borrower shall within two (2)
business days deliver to the Holder a notice setting forth the Fixed Conversion
Price after such adjustment and setting forth a brief statement of the facts
requiring such adjustment.

2.3      Authorized Shares. The Borrower covenants that during the period the
conversion right exists, the Borrower will reserve from its authorized and
unissued Common Stock a sufficient number of shares, free from preemptive
rights, to provide for the issuance of Common Stock upon the full conversion of
this Note and exercise of the Warrants.  The Borrower is required at all times
to have authorized and reserved three (3) times the number of shares that is
actually issuable upon full conversion of the Note (based on the Conversion
Price of the Note in effect from time to time, which, if cannot be determined
shall be estimated in good faith by the Borrower) (the “Reserved Amount”). The
Reserved Amount shall be increased from time to time in accordance with the
Borrower’s obligations hereunder. The Borrower represents that upon issuance,
such shares will be duly and validly issued, fully paid and non-assessable. In
addition, if the Borrower shall issue any securities or make any change to its
capital structure which would change the number of shares of Common Stock into
which the Note shall be convertible at the then current Conversion Price, the
Borrower shall at the same time make proper provision so that thereafter there
shall be a sufficient number of shares of Common Stock authorized and reserved,
free from preemptive rights, for conversion of the outstanding Note. The
Borrower (i) acknowledges that it has irrevocably instructed its transfer agent
by letter, a copy of which is attached hereto as Exhibit B to issue certificates
for the Common Stock issuable upon conversion of this Note and exercise of the
Warrants, and (ii) agrees that its issuance of this Note shall constitute full
authority to its officers and agents who are charged with the duty of executing
stock certificates to execute and issue the necessary certificates for shares of
Common Stock in accordance with the terms and conditions of this Note.
 
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If, at any time the Borrower does not maintain the Reserved Amount it will be
considered an Event of Default under Section 3.2 of the Note.

2.4
Method of Conversion.

 
(a)   Mechanics of Conversion. Subject to Section 2.1, this Note may be
converted by the Holder in whole or in part, at any time on or after the
Maturity Date, by (A) submitting to the Borrower a Notice of Conversion (by
facsimile, e-mail or other reasonable means of communication dispatched on the
Conversion Date prior to 6:00 p.m., New York, New York time) and (B) subject to
Section 2.4(b), surrendering this Note at the principal office of the Borrower.

(b)   Surrender of Note Upon Conversion. Notwithstanding anything to the
contrary set forth herein, upon conversion of this Note in accordance with the
terms hereof, the Holder shall not be required to physically surrender this Note
to the Borrower unless the entire unpaid principal amount of this Note is so
converted. The Holder and the Borrower shall maintain records showing the
principal amount so converted and the dates of such conversions or shall use
such other method, reasonably satisfactory to the Holder and the Borrower, so as
not to require physical surrender of this Note upon each such conversion. In the
event of any dispute or discrepancy, such records of the Borrower shall, prima
facie, be controlling and determinative in the absence of manifest error. The
Holder and any assignee, by acceptance of this Note, acknowledge and agree that,
by reason of the provisions of this paragraph, following conversion of a portion
of this Note, the unpaid and unconverted principal amount of this Note
represented by this Note may be less than the amount stated on the face hereof.

(c)   Payment of Taxes. The Borrower shall not be required to pay any tax which
may be payable in respect of any transfer involved in the issue and delivery of
shares of Common Stock or other securities or property on conversion of this
Note in a name other than that of the Holder (or in street name), and the
Borrower shall not be required to issue or deliver any such shares or other
securities or property unless and until the person or persons (other than the
Holder or the custodian in whose street name such shares are to be held for the
Holder’s account) requesting the issuance thereof shall have paid to the
Borrower the amount of any such tax or shall have established to the
satisfaction of the Borrower that such tax has been paid.

(d)   Delivery of Common Stock Upon Conversion. Upon receipt by the Borrower
from the Holder of a facsimile transmission or e-mail (or other reasonable means
of communication) of a Notice of Conversion meeting the requirements for
conversion as provided in this Section 2.4, the Borrower shall issue and deliver
or cause to be issued and delivered to or upon the order of the Holder
certificates for the Common Stock issuable upon such conversion within three (3)
business days after such receipt (the “Deadline”) (and, solely in the case of
conversion of the entire unpaid principal amount hereof, surrender of this Note)
in accordance with the terms hereof.
 
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(e)   Obligation of Borrower to Deliver Common Stock. Upon receipt by  the
Borrower of a Notice of Conversion, the Holder shall be deemed to be the holder
of record of the Common Stock issuable upon such conversion, the outstanding
principal amount and the amount of accrued and unpaid interest on this Note
shall be reduced to reflect such conversion, and, unless the Borrower defaults
on its obligations under this Article II, all rights with respect to the portion
of this Note being so converted shall forthwith terminate except the right to
receive the Common Stock or other securities, cash or other assets, as herein
provided, on such conversion. If the Holder shall have given a Notice of
Conversion as provided herein, the Borrower’s obligation to issue and deliver
the certificates for Common Stock shall be absolute and unconditional,
irrespective of the absence of any action by the Holder to enforce the same, any
waiver or consent with respect to any provision thereof, the recovery of any
judgment  against any person or any action to enforce the same, any failure or
delay in the enforcement of any other obligation of the Borrower to the holder
of record, or any setoff, counterclaim, recoupment, limitation or termination,
or any breach or alleged breach by the Holder of any obligation to the Borrower,
and irrespective of any other circumstance which might otherwise limit such
obligation of the Borrower to the Holder in connection with such conversion. The
Conversion Date specified in the Notice of Conversion shall be the Conversion
Date so long as the Notice of Conversion is received by the Borrower before 6:00
p.m., New York, New York time, on such date.

(f)   Delivery of Common Stock by Electronic Transfer. In lieu of delivering
physical certificates representing the Common Stock issuable upon conversion,
provided the Borrower is participating in the Depository Trust Company (“DTC”)
Fast Automated Securities Transfer (“FAST”) program, upon request of the Holder
and its compliance with the provisions contained in Section 2.1 and in this
Section 2.4, the Borrower shall use its best efforts to cause its transfer agent
to electronically transmit the Common Stock issuable upon conversion to the
Holder by crediting the account of Holder’s Prime Broker with DTC through its
Deposit Withdrawal Agent Commission (“DWAC”) system.
 
(g)   Failure to Deliver Common Stock Prior to Deadline. Without in any way
limiting the Holder’s right to pursue other remedies, including actual damages
and/or equitable relief, the parties agree that if delivery of the Common Stock
issuable upon conversion of this Note is not delivered by the Deadline (other
than a failure due to the circumstances described in Section 2.3 above, which
failure shall be governed by such Section) the Borrower shall pay to the Holder
$1,000 per day in cash, for each day beyond the Deadline that the Borrower fails
to deliver such Common Stock. Such cash amount shall be paid to Holder by the
fifth day of the month following the month in which it has accrued or, at the
option of the Holder (by written notice to the Borrower by the first day of the
month following the month in which it has accrued), shall be added to the
principal amount of this Note, in which event interest shall accrue thereon in
accordance with the terms of this Note and such additional principal amount
shall be convertible into Common Stock in accordance with the terms of this
Note.  The Borrower agrees that the right to convert is a valuable right to the
Holder, and as such, the Borrower will not take any actions to hamper, delay or
prevent any Holder conversion of the Note. The damages resulting from a failure,
attempt to frustrate, interference with such conversion right are difficult if
not impossible to qualify. Accordingly the parties acknowledge that the
liquidated damages provision contained in this Section 2.4(g) are justified.
 
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2.5      Concerning the Shares. The shares of Common Stock issuable upon
conversion of this Note may not be sold or transferred unless (i) such shares
are sold pursuant to an effective registration statement under the Act or (ii)
the Borrower or its transfer agent shall have been furnished with an opinion of
counsel (which opinion shall be in form, substance and scope customary for
opinions of counsel in comparable transactions) to the effect that the shares to
be sold or transferred may be sold or transferred pursuant to an exemption from
such registration or (iii) such shares are sold or transferred pursuant to Rule
144 under the Act (or a successor rule) (“Rule 144”) or (iv) such shares are
transferred to an “affiliate” (as defined in Rule 144) of the Borrower who
agrees to sell or otherwise transfer the shares only in accordance with this
Section 2.5 and who is an Accredited Investor. Except as otherwise provided (and
subject to the removal provisions set forth below), until such time as the
shares of Common Stock issuable upon conversion of this Note have been
registered under the Act or otherwise may be sold pursuant to Rule 144 without
any restriction as to the number of securities as of a particular date that can
then be immediately sold, each certificate for shares of Common Stock issuable
upon conversion of this Note that has not been so included in an effective
registration statement or that has not been sold pursuant to an effective
registration statement or an exemption that permits removal of the legend, shall
bear a legend substantially in the following form, as appropriate:
 
“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 Borrower shall issue to the
Holder a new certificate therefore free of any transfer legend if (i) the
Borrower or its transfer agent shall have received 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 Common Stock
may be made without registration under the Act, which opinion shall be accepted
by the Borrower so that the sale or transfer is effected or (ii) in the case of
the Common Stock issuable upon conversion of this Note, such security is
registered for sale by the Holder under an effective registration statement
filed under the Act or otherwise may be sold pursuant to Rule  144 without any
restriction as to the number of securities as of a particular date that can then
be immediately sold. In the event that the Borrower does not accept the opinion
of counsel provided by the Holder with respect to the transfer of Securities
pursuant to an exemption from registration, such as Rule 144 or Regulation S, at
the Deadline, it will be considered an Event of Default pursuant to Section 4.2
of the Note.
 
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2.6      Status as Shareholder. Upon submission of a Notice of Conversion by a
Holder, (i) the shares covered thereby (other than the shares, if any, which
cannot be issued because their issuance would exceed such Holder’s allocated
portion of the Reserved Amount or Maximum Share Amount) shall be deemed
converted into shares of Common Stock and (ii) the Holder’s rights as a Holder
of such converted portion of this Note shall cease and terminate, excepting only
the right to receive certificates for such shares of Common Stock and to any
remedies provided herein or otherwise available at law or in equity to such
Holder because of a failure by the Borrower to comply with the terms of this
Note. Notwithstanding the foregoing, if a Holder has not received certificates
for all shares of Common Stock prior to the tenth (10th) business day after the
expiration of the Deadline with respect to a conversion of any portion of this
Note for any reason, then (unless the Holder otherwise elects to retain its
status as a holder of Common Stock by so notifying the Borrower) the Holder
shall regain the rights of a Holder of this Note with respect to such
unconverted portions of this Note and the Borrower shall, as soon as
practicable, return such unconverted Note to the Holder or, if the Note has not
been surrendered, adjust its records to reflect that such portion of this Note
has not been converted. In all cases, the Holder shall retain all of its rights
and remedies (including, without limitation, (i) the right to receive Conversion
Default Payments pursuant to Section 2.3 to the extent required thereby for such
Conversion Default and any subsequent Conversion Default and (ii) the right to
have the Conversion Price with respect to subsequent conversions determined in
accordance with Section 2.3) for the Borrower’s failure to convert this Note.

ARTICLE III.  RANKING AND CERTAIN COVENANTS
 
3.1      Distributions on Capital Stock. So long as the Borrower shall have any
obligation under this Note, the Borrower shall not without the Holder’s written
consent (a) pay, declare or set apart for such payment, any dividend or other
distribution (whether in cash, property or other securities) on shares of
capital stock other than dividends on shares of Common Stock solely in the form
of additional shares of Common Stock or (b) directly or indirectly or through
any subsidiary make any other payment or distribution in respect of its capital
stock except for distributions that comply with Section 3.4 below.

3.2      Medi-Line Earnings Set Aside.  Following the closing of the Borrower’s
acquisition of Medi-Line, ten percent (10%) of the Medi-Line Earnings (as that
term is defined in Exhibit C hereto, shall be set aside by the Borrower on a
quarterly basis and used specifically to repay the outstanding balance of the
Note, along with accrued but unpaid interest, in accordance with the payment
terms set forth herein above.

3.3      Restrictions on Further Debt.  Following the closing of the Borrower’s
acquisition of Medi-Line, neither the Borrower, nor Medi-Line shall issue any
additional debt or otherwise incur any Indebtedness (as defined below) or pledge
any of its assets as collateral for any obligation without the prior written
consent of the Holder.  With respect to the EUR 275,000 accounts receivable line
of credit from CBC Banque SA to Nexeon Medsystems Belgium SPRL, the Borrower
agrees that the first EUR 275,000 in drawdowns may be used for working capital
purposes and any additional drawdowns over and above the initial EUR 275,000
shall be used to repay the Note.
 
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3.4      Restriction on Stock Repurchases. So long as the Borrower shall have
any obligation under this Note, the Borrower shall not without the Holder’s
written consent redeem, repurchase or otherwise acquire (whether for cash or in
exchange for property or other securities or otherwise) in any one transaction
or series of related transactions any shares of capital stock of the Borrower or
any warrants, rights or options to purchase or acquire any  such shares; except
for the repurchase of shares at a nominal price in connection with rights under
an agreement with an employee or consultant of the Borrower whose shares have
been forefeited as a result of such employee or consultant’s ceasing to provide
services to the Borrower.

3.5      Ranking and Security.  The obligations of the Borrower under this Note
shall rank senior with respect to any and all Indebtedness incurred as of or
following the Issue Date.  The obligations of the Borrower under this Note are
secured pursuant to the Security Agreement, the Deed of Trust, the Personal
Guarantee and the Share Pledge Agreement.  So long as the Borrower shall have
any obligation under this Note, the Borrower shall not (directly or indirectly
through any subsidiary or affiliate) incur or suffer to exist or guarantee any
Indebtedness that is senior to or pari passu with (in priority of payment and
performance) the Borrower’s obligations hereunder.  As used herein, the term
“Indebtedness” means (a) all indebtedness of the Borrower for borrowed money or
for the deferred purchase price of property or services, including any type of
letters of credit, but not including deferred purchase price obligations in
place as of the Issue Date or obligations to trade creditors incurred in the
ordinary course of business, (b) all obligations of the Borrower evidenced by
notes, bonds, debentures or other similar instruments, (c) purchase money
indebtedness hereafter incurred by the Borrower to finance the purchase of fixed
or capital assets, including all capital lease obligations of the Borrower which
do not exceed the purchase price of the assets funded, (d) all guarantee
obligations of the Borrower in respect of obligations of the kind referred to in
clauses (a) through (c) above that the Borrower would not be permitted to incur
or enter into, and (e) all obligations of the kind referred to in clauses (a)
through (d) above that the Borrower is not permitted to incur or enter into that
are secured and/or unsecured by (or for which the holder of such obligation has
an existing right, contingent or otherwise, to be secured and/or unsecured by)
any lien or encumbrance on property (including accounts and contract rights)
owned by the Borrower, whether or not the Borrower has assumed or become liable
for the payment of such obligation.
 
ARTICLE IV. EVENTS OF DEFAULT

It shall be considered an event of default if any of the following events listed
in this Article IV (each, an “Event of Default”) shall occur; provided, however,
that, except in the case of the Events of Default listed in Sections 4.1, 4.2,
4.7, 4.9, 4.10, 4.16, 4.18, 4.19 or 4.20 below, the Borrower shall be have five
(5) business days to cure such Event of Default unless a lesser number of days
is required pursuant to the provisions of this Article IV:
 
4.1      Failure to Pay Principal or Interest. The Borrower fails to pay the
principal hereof or interest thereon when due on this Note, whether at maturity,
upon acceleration or otherwise.
 
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4.2      Conversion and the Shares. The Borrower fails to reserve a sufficient
amount of shares of common stock as required under the terms of this Note
(including Section 1.3 of this Note)(and such breach continues for a period of
five (5) days), fails to issue shares of Common Stock to the Holder (or
announces or threatens in writing that it  will  not honor its obligation to do
so) upon exercise by the Holder of the conversion rights of the Holder in
accordance with the terms of this Note, fails to transfer or cause its transfer
agent to transfer (issue) (electronically or in certificated form) shares of
Common Stock issued to the Holder upon conversion of or otherwise pursuant to
this Note as and when required by this Note, the Borrower directs its transfer
agent not to transfer or delays, impairs, and/or hinders its transfer agent in
transferring (or issuing) (electronically or in certificated form) shares of
Common Stock to be issued to the Holder upon conversion of or otherwise pursuant
to this Note as and when required by this Note, or fails to remove (or directs
its transfer agent not to remove or impairs, delays, and/or hinders its transfer
agent from removing) any restrictive legend (or to withdraw any stop transfer
instructions in respect thereof) on any shares of Common Stock issued to the
Holder upon conversion of or otherwise pursuant to this Note as and when
required by this Note (or makes any written announcement, statement or threat
that it does not intend to honor the obligations described in this paragraph)
and any such failure shall continue uncured (or any written announcement,
statement or threat not to honor its obligations shall not be rescinded in
writing) for three (3) business days after the Holder shall have delivered a
Notice of Conversion.  It is an obligation of the Borrower to remain current in
its obligations to its transfer agent. It shall be an event of default of this
Note, if a conversion of this Note is delayed, hindered or frustrated due to a
balance owed by the Borrower to its transfer agent. If at the option of the
Holder, the Holder advances any funds to the Borrower’s transfer agent in order
to process a conversion, such advanced funds shall be paid by the Borrower to
the Holder within five (5) business days of a demand from the Holder, either in
cash or as an addition to the balance of the Note, and such choice of payment
method is at the discretion of the Borrower.

4.3      Breach of Covenants. The Borrower, or the relevant related party, as
the case may be, breaches any material covenant or other material term or
condition contained in this Note, or in the related Securities Purchase
Agreement, Security and Pledge Agreement, Affidavit of Confession of Judgment,
Share Pledge Agreement, Deed of Trust, Personal Guarantee or any other
collateral documents (together, the “Transaction Documents”) and such breach
continues for a period of ten (10) days.

4.4      Breach of Representations and  Warranties.  Any representation or
warranty of the Borrower made herein or in any agreement, statement or
certificate given pursuant hereto or in connection herewith, shall be false or
misleading in any material respect when made and the breach of which has (or
with the passage of time will have) a material adverse effect on the rights of
the Holder with respect to this Note and the other Transaction Documents.
 
4.5      Receiver or Trustee. The Borrower or any subsidiary of the Borrower
shall make an assignment for the benefit of creditors, or apply for or consent
to the appointment of a receiver or trustee for it or for a substantial part of
its property or business, or such a receiver or trustee shall otherwise be
appointed.

4.6      Judgments. Any money judgment, writ or similar process shall be entered
or filed against the Borrower or any subsidiary of the Borrower or any of its
property or other assets for more than $50,000, and shall remain unvacated,
unbonded or unstayed for a period of twenty (20) days unless otherwise consented
to by the Holder, which consent will not be unreasonably withheld.
 
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4.7      Bankruptcy. Bankruptcy, insolvency, reorganization or liquidation
proceedings or other proceedings, voluntary or involuntary, for relief under any
bankruptcy law or any law for the relief of debtors shall be instituted by or
against the Borrower or any subsidiary of the Borrower.

4.8      Delisting of Common Stock. If at any time on or after the date in which
the Borrower’s Common Stock is listed or quoted on the OTCQB or an equivalent
U.S. replacement exchange, the Nasdaq Global Market, the Nasdaq Capital Market,
the New York Stock Exchange, or the NYSE MKT, the Borrower shall fail to
maintain the listing or quotation of the Common Stock on the OTCQB or an U.S.
equivalent replacement exchange, the Nasdaq Global Market, the Nasdaq Capital
Market, the New York Stock Exchange, or the NYSE MKT.

4.9      Failure to Comply with the Exchange Act. The Borrower shall fail to
comply with the reporting requirements of the Exchange Act (including but not
limited to becoming delinquent in its filings), and/or the Borrower shall cease
to be subject to the reporting requirements of the Exchange Act.

4.10    Liquidation.  Any dissolution, liquidation, or winding up   of Borrower
or any substantial portion of its business.

4.11     Cessation of Operations. Any cessation of operations by Borrower or
Borrower admits it is otherwise generally unable to pay its debts as such debts
become due, provided, however, that any disclosure of the Borrower’s ability to
continue as a “going concern” shall not be an admission that the Borrower cannot
pay its debts as they become due.

4.12     Maintenance of Assets.  The failure by Borrower to maintain any
material intellectual property rights, personal, real property or other assets
which are necessary to conduct its business (whether now or in the future).

4.13     Financial Statement Restatement. The Borrower restates any financial
statements filed by the Borrower with the SEC for any date or period from two
years prior to the Issue Date of this Note and until this Note is no longer
outstanding, if the result of such restatement would, by comparison to the
unrestated financial statement, have constituted a material adverse effect on
the rights of the Holder with respect to this Note.
 
4.14     Reverse Splits.  The Borrower effectuates a reverse split of its Common
Stock.
 
4.15     Replacement of Transfer Agent. In the event that the Borrower appoints
a transfer agent and thereafter replaces its transfer agent, and the Borrower
fails to provide prior to the effective date of such replacement, a fully
executed Irrevocable Transfer Agent Instructions (including but not limited to
the provision to irrevocably reserve shares of Common Stock in the Reserved
Amount) signed by the successor transfer agent to Borrower and the Borrower.

4.16     DTC “Chill.”  The DTC places a “chill” (i.e. a restriction placed by
DTC on one or more of DTC’s services, such as limiting a DTC participant’s
ability to make a deposit or withdrawal of the security at DTC) on any of the
Borrower’s securities.
 
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4.17     Illegality. Any court of competent jurisdiction issues an order
declaring this Note, any of the other Transaction Documents or any provision
hereunder or thereunder to be illegal.

4.18     DWAC Eligibility.  In addition to the Event of Default in Section 3.16,
the Common Stock is otherwise not eligible for trading through the DTC’s Fast
Automated Securities Transfer or Deposit/Withdrawal at Custodian programs.

4.19     Cross-Default. Notwithstanding anything to the contrary contained in
this Note or the other related or companion documents, a breach or default by
the Borrower of any covenant or other term or condition contained in any of the
other financial instrument, including but not limited to all promissory notes,
currently issued, or  hereafter issued, by the Borrower, to the Holder or any
other 3rd party (the “Other Agreements”), after the passage of all applicable
notice and cure or grace periods, shall, at the option of the Holder, be
considered a default under this Note, in which event the Holder shall be
entitled to apply all rights and remedies of the Holder under the terms of this
Note by reason of a default under said Other Agreement or hereunder.

4.20     Variable Rate Transactions. The Borrower (i) issues shares of Common
Stock (or convertible securities or purchase rights) pursuant to an equity line
of credit of the Borrower or otherwise in connection with a variable rate
transaction (whether now existing or entered into in the future) or (ii) adjusts
downward the “floor price” at which shares of Common Stock (or convertible
securities or purchase rights) may be issued under an equity line of credit or
otherwise in connection with a variable rate transaction (whether now existing
or entered into in the future).

4.21     Post-Closing Covenant.  The Borrower or the relevant party, as the case
may be, fails to comply with the post-closing covenant set forth in Section 5.2
of the securities purchase agreement of even date relating to the Note, between
the Holder and the Borrower (the “SPA”).

Subject to applicable cure periods specifically provided for herein, upon the
occurrence and during the continuation of any Event of Default specified in this
Article IV, exercisable through the delivery of written notice to the Borrower
by the Holder (the “Default Notice”) (provided, however, that no Default Notice
need be provided by the Holder and no notice and no cure period shall apply in
the case of the Events of Default specified in Sections 4.1, 4.2, 4.7, 4.9,
4.10, 4.16, 4.18, 4.19, 4.20 or 4.21 above), this Note shall become immediately
due and payable and the Borrower shall pay to the Holder, in full satisfaction
of its obligations hereunder, an amount (the “Default Amount”) equal to the
Principal Amount then outstanding plus accrued interest (including any Default
Interest) through the date of full repayment.  Holder may, in its sole
discretion, determine to accept payment part in Common Stock and part in cash.
For purposes of payments in Common Stock, the conversion formula set forth in
Section 2.2 shall apply.  Upon an uncured Event of Default, all amounts payable
hereunder shall immediately become due and payable, all without demand,
presentment or notice, all of which hereby are expressly waived by the Borrower,
together with all costs, including, without limitation, legal fees and expenses,
of collection, and the Holder shall be entitled to exercise all other rights and
remedies available at law or in equity, including, without limitation, those set
forth in Section 4.22 below.
 
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Upon the occurrence and during the continuation of any Event of Default, and in
addition to any other right or remedy of the Holder hereunder, under the SPA or
otherwise at law or in equity, the Borrower hereby irrevocably authorizes and
empowers Holder or its legal counsel, each as the Borrower’s attorney-in-fact,
to appear ex parte and without notice to the Borrower to confess judgment
against the Borrower for the unpaid amount of this Note as evidenced by the
Affidavit of Confession of Judgment signed by the Borrower as of the Issue Date
and to be completed by the Holder or its counsel pursuant to the foregoing power
of attorney (which power is coupled with an interest), a copy of which is
attached as Exhibit D hereto (the “Affidavit”).  The Affidavit shall set forth
the amount then due hereunder, plus attorney’s fees and cost of suit, and to
release all errors, and waive all rights of appeal.  The Borrower waives the
right to contest Holder’s rights under this Article IV, including without
limitation the right to any stay of execution and the benefit of all exemption
laws now or hereafter in effect.  No single exercise of the foregoing right and
power to confess judgment will be deemed to exhaust such power, whether or not
any such exercise shall be held by any court to be invalid, voidable, or void,
and such power shall continue undiminished and may be exercised from time to
time as the Holder may elect until all amounts owing on this Note have been paid
in full.

ARTICLE V. MISCELLANEOUS

5.1      Failure or Indulgence Not Waiver. No failure or delay on the part of
the Holder in the exercise of any power, right or privilege hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such power, right or privilege preclude other or further exercise thereof or of
any other right, power or privileges. All rights and remedies existing hereunder
are cumulative to, and not exclusive of, any rights or remedies otherwise
available.

5.2     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, facsimile, or electronic mail 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, upon electronic mail 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:
 
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If to the Borrower, to:
NEXEON MEDSYSTEMS INC
1910 Pacific Avenue, Suite 20000
Dallas, Texas 75201
Attn: William Rosellini, CEO
e-mail: will@nexeonmed.com
 
If to the Holder:

LEONITE CAPITAL, LLC
1 Hillcrest Center Dr., Suite 232
Spring Valley, NY 10977
ATTN: Avi Geller
e-mail: avi@leonitecap.com
 
5.3      Amendments. This Note and any provision hereof may only be amended by
an instrument in writing signed by the Borrower and the Holder. The term “Note”
and all reference thereto, as used throughout this instrument, shall mean this
instrument as originally executed, or if later amended or supplemented, then as
so amended or supplemented.

5.4      Assignability. This Note shall be binding upon the Borrower and its
successors and assigns, and shall inure to be the benefit of the Holder and its
successors and assigns. Each transferee of this Note must be an “accredited
investor” (as defined in Rule 501(a) of the 1933 Act). Notwithstanding anything
in this Note to the contrary, this Note may be pledged as collateral in
connection with a bona fide margin account or other lending  arrangement.

5.5      Cost of Collection. If default is made in the payment of this Note, the
Borrower shall pay the Holder hereof costs of collection, including reasonable
attorneys’ fees.
 
5.6      Governing Law. This Note 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 Note shall be brought only in
the state and/or federal courts located in New York. The parties to this Note
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 BORROWER HEREBY
IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY
TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR
ARISING OUT OF THIS NOTE OR ANY TRANSACTIONS CONTEMPLATED HEREBY. 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 Note 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 Documents 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.
 
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5.6      Certain Amounts. Whenever pursuant to this Note the Borrower is
required to pay an amount in excess of the outstanding principal amount (or the
portion thereof required to be paid at that time) plus accrued and unpaid
interest plus Default Interest on such interest, the Borrower and the Holder
agree that the actual damages to the  Holder from the receipt of cash payment on
this Note may be difficult to determine and the amount to be so paid by the
Borrower represents stipulated damages and not a penalty and is intended to
compensate the Holder in part for loss of the opportunity to convert this Note
and to earn a return from the sale of shares of Common Stock acquired upon
conversion of this Note at a price in excess of the price paid for such shares
pursuant to this Note. The Borrower and the Holder hereby agree that such amount
of stipulated damages is not plainly disproportionate to the possible loss to
the Holder from the receipt of a cash payment without the opportunity to convert
this Note into shares of Common Stock.

5.7      Remedies. The Borrower acknowledges that a breach by it of its
obligations hereunder will cause irreparable harm to the Holder, by vitiating
the intent and purpose of the transaction contemplated hereby. Accordingly, the
Borrower acknowledges that the remedy at law for a breach of its obligations
under this Note will be inadequate and agrees, in the event of a breach or
threatened breach by the Borrower of the provisions of this Note, that the
Holder 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 Note and to
enforce specifically the terms and provisions thereof, without the necessity of
showing economic loss and without any bond or other security being required.
 
5.8      Prepayment. Notwithstanding anything to the contrary contained in this
Note, the Borrower may prepay any amount outstanding under this Note, prior to
the Maturity Date, by making a payment to the Holder of an amount in cash equal
to the outstanding principal amount owed under the Note plus all unpaid interest
through the remainder of the Term (at the rate of $11,200 per month), subject to
the Holder’s written acceptance in Holder’s sole discretion.
 
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5.9      Usury. To the extent it may lawfully do so, the Borrower hereby agrees
not to insist upon or plead or in any manner whatsoever claim, and will resist
any and all efforts to be compelled to take the benefit or advantage of, usury
laws wherever enacted, now or at any time hereafter in force, in connection with
any action or proceeding that may be brought by the Holder in order to enforce
any right or remedy under this Note.  Notwithstanding any provision to the
contrary contained in this Note, it is expressly agreed and provided that the
total liability of the Borrower under this Note for payments which under New
York law are in the nature of interest shall not exceed the maximum lawful rate
authorized under applicable law (the “Maximum Rate”), and, without limiting the
foregoing, in no event shall any rate of interest or default interest, or both
of them, when aggregated with any other sums which under New York law in the
nature of interest that the Borrower may be obligated to pay under this Note
exceed such Maximum Rate.  It is agreed that if the maximum contract rate of
interest allowed by New York law and applicable to this Note is increased or
decreased by statute or any official governmental action subsequent to the date
hereof, the new maximum contract rate of interest allowed by law will be the
Maximum Rate applicable to this Note from the effective date thereof forward,
unless such application is precluded by applicable law.  If under any
circumstances whatsoever, interest in excess of the Maximum Rate is paid by the
Borrower to the Holder with respect to indebtedness evidenced by this Note, such
excess shall be applied by the Holder to the unpaid principal balance of any
such indebtedness or be refunded to the Borrower, the manner of handling such
excess to be at the Holder’s election.
 
5.10    Section 3(a)(10) Transactions. If at any time while  this Note is
outstanding, the Borrower enters into a transaction structured in accordance
with, based upon, or related or pursuant to, in whole or in part, Section
3(a)(10) of the Securities Act, then a liquidated damages charge of 25% of the
outstanding principal balance of this Note at that time, will be assessed and
will become immediately due and payable to the Holder, either in the form of
cash payment or as an addition to the balance of the Note, as determined by
mutual agreement of the Borrower and Holder.
 
5.11    Terms of Future Financings.  So long as this Note is outstanding, upon
any issuance by the Borrower or any of its subsidiaries of any security with any
term more favorable to the holder of such security or with a term in favor of
the holder of such security that was not similarly provided to the Holder in
this Note, then the Borrower shall notify the Holder of such additional or more
favorable term and such term, at Holder’s option, shall become a part of the
Transaction Documents with the Holder.  The types of terms contained in another
security that may be more favorable to the holder of such security include, but
are not limited to, terms addressing conversion discounts, prepayment rate,
conversion lookback periods, interest rates, original issue discounts, stock
sale price, private placement price per share, and warrant coverage.
 
5.12    Piggyback Registration Rights.  The Borrower shall include on the next
registration statement the Borrower files with SEC (or on the subsequent
registration statement if such registration statement is withdrawn) all shares
issuable upon conversion of this Note.  Failure to do so will result in
liquidated damages of 25% of the outstanding principal balance of this Note, but
not less than Fifteen Thousand and No/100 United States Dollars ($15,000), being
immediately due and payable to the Holder at its election in the form of cash
payment or addition to the balance of this Note.
 
5.13   Participation Rights.  In the event the Borrower proposes to offer and
sell its securities in an Equity Financing, the Lender shall have the right, but
not the obligation, to participate in the purchase of the securities being
offered in such Equity Financing up to an amount equal to fifty percent (50%) of
the aggregate offering amount of such Equity Financing, until the earliest of
(i) the Maturity Date, (ii) the date that the Note and all accrued but unpaid
interest shall have been repaid in full, and (iii) the closing date of an Equity
Financing in which all, or any remaining portion, of the outstanding principal
amount of the Note along with accrued but unpaid interest shall have been
converted, in full, into, and on the same terms as, the securities being offered
in such Equity Financing.
 
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5.14    Reverse Split Penalty. If at any time while this Note is outstanding,
the Borrower effectuates a reverse split with respect to the Common Stock, then
a liquidated damages charge of 25% of the outstanding principal balance of this
Note at that time, will be assessed and will become immediately due and payable
to the Holder, either in the form of cash payment or as an addition to the
balance of the Note, as determined by mutual agreement of the Borrower and
Holder.
 
5.15    Right of First Refusal. If at any time while this Note is outstanding,
the Borrower has a bona fide offer of capital or financing from any 3rd party
that the Borrower intends to act upon, then the Borrower must first offer such
opportunity to the Holder to provide such capital or financing to the Borrower
on the same terms as each respective 3rd party’s terms. Should the Holder be
unwilling or unable to provide such capital or financing to the Borrower within
10 trading days from Holder’s receipt of written notice of the offer (the “Offer
Notice”) from the Borrower, then the Borrower may obtain such capital or
financing from that respective 3rd party upon the exact same terms and
conditions offered by the Borrower to the Holder, which transaction must be
completed within 30 days after the date of the Offer Notice.  If the Borrower
does not receive the capital or financing from the respective 3rd party within
30 days after the date of the respective Offer Notice, then the Borrower must
again offer the capital or financing opportunity to the Holder as described
above, and the process detailed above shall be repeated.  The Offer Notice must
be sent via electronic mail to avi@leonitecap.com.
 
[signature page to follow]
 
19

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IN WITNESS WHEREOF, Borrower has caused this Note to be signed in its name by
its duly authorized officer this August 21, 2017.
 
NEXEON MEDSYSTEMS INC
 
By:
/s/ William Rosellini  
Name: William Rosellini
 
Title: Chief Executive Officer
 

 
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Schedule A

Amortization Schedule

[ex10_2table.jpg]
 
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EXHIBIT A -- NOTICE OF CONVERSION
 
The undersigned hereby elects to convert $          principal amount of the Note
(defined below) into that number of shares of Common Stock to be issued pursuant
to the  conversion of the Note (“Common Stock”) as set forth below, of NEXEON
MEDSYSTEMS INC, a Nevada corporation (the “Borrower”) according to the
conditions of the senior secured convertible note of the Borrower dated as of
______________, 2017 (the “Note”), as of the date written below. No fee will be
charged to the Holder for any conversion, except for transfer taxes, if any.
 
Box Checked as to applicable instructions:

[ ]  The Borrower shall electronically transmit the Common Stock issuable
pursuant to this  Notice of Conversion to the account of the undersigned or its
nominee with DTC through its Deposit Withdrawal Agent Commission system (“DWAC
Transfer”).

Name of DTC Prime
Broker: Account Number:

[  ]    The undersigned hereby requests that the Borrower issue a certificate or
certificates for     the number of shares of Common Stock set forth below (which
numbers are based on the Holder’s calculation attached hereto) in the name(s)
specified immediately below or, if additional space is necessary, on an
attachment hereto:
 
LEONITE CAPITAL, LLC
____________________
____________________
e-mail: ______________

Date of Conversion:
     
Applicable Conversion Price:                       
 
$
                                  
Number of Shares of Common Stock to be Issued  
Pursuant to Conversion of the Note:
     
Amount of Principal Balance Due remaining  
 
Under the Note after this conversion:
     

LEONITE CAPITAL, LLC
 
By:
 
Name:
 
Title:
 
Date:
 

 
 
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EXHIBIT B – TRANSFER AGENT IRREVOCABLE RESERVE LETTER

 
[ex10_2nexlogo.jpg]
 
 

 
August 23, 2017

Action Stock Transfer Corporation
2469 E. Fort Union Blvd, Suite 214
Salt Lake City, UT 84121

Re: Irrevocable Transfer Agent Instructions

Ladies and Gentlemen:

Nexeon Medsystems Inc, a Nevada corporation (the "Company") issued that certain
12% senior secured convertible promissory note in the principal amount of
$1,120,000 (the “Note”), to Leonite Capital LLC, a Delaware limited liability
company (the "Investor"), on August 21, 2017, pursuant to the terms of that
certain securities purchase agreement of even date (the “Agreement”).  Further,
on August 21, 2017, the Company issued to the Investor that certain two-year
warrant to purchase 250,000 shares of the Company’s common stock (the “Two-Year
Warrant”) and that certain five-year warrant to purchase 250,000 shares of the
Company’s common stock (the “Five-Year Warrant” and together with the Two-Year
Warrant, the “Warrants”), and agreed to issue to the Investor 100,000 shares of
the Company’s Common Stock (the “Commitment Shares”) as consideration for
entering into the Agreement.

A copy of the Agreement and the Note are attached hereto.  The shares to be
issued pursuant to the Note and/or Warrants are to be registered in the names of
the registered holder of the securities submitted for conversion or exercise, or
its assignees as requested by the Investor, and the Commitment Shares are to be
issued in the name of the Investor.

You are hereby irrevocably authorized and instructed to reserve a sufficient
number of shares of common stock, Par value $0.001 per share (the “Common
Stock”), of the Company (initially, 2,420,000 shares of Common Stock which
should be held in reserve for the Investor pursuant to the Note and Warrants)
for issuance upon conversion of the Note and/or exercise of the Warrants, 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 or the
Investor.

Any shares reserved in connection with the Note may be utilized by the Investor
to satisfy any conversion of any convertible note and/or exercise of any
warrant, currently issued or issued in the future, by the Company to the
Investor.  Any shares reserved hereunder may be utilized by the Investor to
satisfy the Company’s obligations under the Agreement, the Note, and/or the
Warrants.
 
The 100,000 Commitment Shares should be issued to the Investor immediately.
 
23

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The shares to be issued upon conversion of the Note or exercise of the Warrants
shall be issued within one (1) business day of receipt of a notice of conversion
with respect to the Note and/or notice of exercise with respect to the Warrants
(each a “Issuance Notice”).  The ability to convert the Note and exercise the
Warrants in a timely manner is a material obligation of the Company pursuant to
the Note.  The ability to exercise the Warrants in a timely manner is a material
obligation of the Company pursuant to the Warrants.  Your firm is hereby
irrevocably authorized and instructed to issue shares of Common Stock of the
Company upon conversion of the Note and/or exercise of the Warrants (without any
restrictive legend) to the Investor at the request of the Investor without any
further action or confirmation by the Company, in which the issuance shall be
deducted against the reserve or, if there are not enough shares held in reserve,
from available authorized shares of the Company, by either (i) electronically by
crediting the account of a Prime Broker with the Depository Trust Company
through its Deposit Withdrawal Agent Commission system, provided that the
Company has been made FAST/DRS eligible by DTCC (DWAC), or (ii) in certificated
form (if electronic delivery is not possible at that time) without any legend
which would restrict the transfer of the shares, and you should remove all
stop-transfer instructions relating to such shares: (A) upon your receipt from
the Investor dated within 90 days from the date of the issuance or transfer
request, of: (i) an Issuance Notice executed by the Investor; and (ii) an
opinion of counsel of the Investor, in form, substance and scope customary for
opinions of counsel in comparable transactions (and satisfactory to the transfer
agent), to the effect that the shares of Common Stock of the Company issued to
the Investor pursuant to the Issuance Notice are not "restricted securities" as
a result of an effective registration statement or pursuant to an applicable
exemption (including but not limited to Section 4(a)(1) or Rule 144) and should
be issued to the Investor without any restrictive legend; and (B) the number of
shares to be issued is less than 9.99% of the total issued Common Stock of the
Company.  If an opinion from counsel is not provided, you are instructed and
authorized to issue shares to the Investor as restricted and the associated
certificate(s) should include the customary 144 restrictive legend.

The Company affirms that it has appropriately resolved to issue all required
Common Stock to the Investor and hereby requests that your firm act immediately,
without delay and without the need for any action or confirmation by the Company
with respect to the issuance of (i) the 100,000 Commitment Shares, and (ii) the
Common Stock pursuant to any Issuance Notice received from the Investor.

The Investor and the Company understand that Action Stock Transfer Corporation
(the “Transfer Agent”) shall be required to perform any issuances or transfers
of shares pursuant to this letter unless the respective issuance or transfer of
shares is prohibited by a valid court order. If the Company informs you that
there is a court order prohibiting such issuances, then the Company must provide
you with a certified copy of such court order prior to the issuance deadline for
the respective conversion.

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

The Board of Directors of the Company has approved the foregoing (irrevocable
instructions) and does hereby extend the Company’s irrevocable agreement to
indemnify your firm for all loss, liability or expense in carrying out the
authority and direction herein contained on the terms herein set forth.   The
Transfer Agent is hereby authorized and directed to promptly disclose to the
Investor without any additional confirmation from the Company, after Investor’s
request from time to time, the total number of shares of common stock issued and
outstanding, the total number of shares of common stock in the float, and the
total number of shares of common stock that are authorized but unissued and
unreserved.  The Transfer Agent is also authorized to, without any additional
confirmation from the Company, release any information you deem necessary
towards the processing, clearing and settlement of the shares arising from this
reservation, as well as effectuate a transfer of all or a portion of the shares
of common stock reserved hereunder to any third party if directed to do so by
Investor.
 
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You are directed to not delay in processing any Conversion Notices owing to the
fact that the Company is in arrears of its fees and other monies owed to your
firm, and you acknowledge that you will not so delay any Conversion Notice
processing.  If at the time a Conversion Notice is delivered to your firm the
Company is then in arrears to your firm, or has been placed on credit hold,
Investor shall have the right as a condition to such processing to pre-pay the
full cost of processing the Conversion Notice

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 shall not terminate the Transfer Agent as the
Company’s transfer agent without a signed consent from the Investor.

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

[signature page to follow]
 
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Very truly yours,

NEXEON MEDISYSTEMS INC
           
By:
/s/ Will Rosellini 
 
Name:
Will Rosellini  
 
Title:
Chief Executive Officer 
 
           
Acknowledged and Agreed:  
     
ACTION STOCK TRANSFER CORPORATION
           
By:
/s/ Justeene Blankenship                 
Name:
Justeene Blankenship    
 
Title:   
President                 
Leonite Capital LLC
           
By:
/s/ Avrohom Geller   
Name:
Avrohom Geller     
Title:  
CIO     

 
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EXHIBIT C -- DEFINITION OF MEDI-LINE EARNINGS

In reference to Medi-Line Earnings, of which 10% earnings shall be set aside on
a quarterly basis to repay the outstanding balance on the Note, the following
definitions are applicable:

Accounting
All applicable items in the calculation of Medi-Line Earnings are calculated on
a cash accounting basis, but for items where explicitly stated otherwise.

Revenue
Applicable revenue shall include (1) Revenue derived from existing
revenue-generating contracts of Medi-Line and extensions thereof (2) Revenue
derived from existing Medi-Line products and alterations thereof including
follow-up generations and follow up research contracts (Note for Avi: Our dd has
to include looking at the existing Medi-line contracts and products) (3) Revenue
derived from new products whose development and commercialization can be
reasonably attributed to Medi-Line (4) Revenue derived from new contracts whose
fulfillment can be reasonably attributed to Medi-Line

Costs
Applicable costs shall include (1) Salary expenses related to employees under
direct employment contract with Medi-Line, but no owner management fee or the
alike (2) Expenses relating to maintenance of the Medi-Line facilities,
including real estate and equipment (3) Administrative expenses directly
attributable to maintaining Medi-Line operations (4) Other cash operating
expenses directly attributable to Medi-Line operations (5) Raw material expenses
on a per-unit of output basis (6) A tax rate equal to the effective tax rate of
combined Nexeon and Medi-Line for the quarter. The tax rate is applicable to the
amount resulting from deducting all other expense items from all revenue items.

Process
The calculation of Medi-Line Earnings shall occur on a quarterly basis and serve
as the minimum threshold for cash deposits exclusively reserved to repay the
loan.

 
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EXHIBIT D -- AFFIDAVIT OF CONFESSION OF JUDGMENT

SUPREME COURT OF THE STATE OF NEW YORK
                             
COUNTY OF NEW YORK
   
----------------------------------------------------------------------- X
   
LEONITE CAPITAL, LLC,
       
Index No.
Plaintiff,     
       
AFFIDAVIT OF CONFESSION OF
- against -
JUDGMENT
     
NEXEON MEDSYSTEMS INC,
   
NEXEON MEDSYSTEMS EUROPE, SARL,
   
NEXEON MEDSYSTEMS BELGIUM, SPRL
   
NEXEON MEDSYSTEMS PUERTO RICO,
   
    OPERATING COMPANY CORPORATION,
   
PULSUS MEDICAL LLC,
   
 and WILLIAM ROSELLINI,
-  
Defendants.
   
----------------------------------------------------------------------- X
   

 
 
STATE OF NEW YORK
)            
   
)
 ss.:
COUNTY OF NEW YORK                         
)
 

 

William Rosellini and the Subsidiaries (defined below), being duly sworn, hereby
depose and say:
 
1.          I (“Rosellini”) am the Chief Executive Officer of defendant NEXEON
MEDSYSTEMS INC (“NMI”),  Nexeon Medsystems Europe, SARL (“NME”), Nexeon
Medsystems Belgium, SPRL (“NMB”), Nexeon Medsystems Puerto Rico, Operating
Company Corporation (“NMPR”), Pulsus Medical LLC (“PULSUS” and together with
NME, NMB and NMPR, the “Subsidiaries”) are wholly owned subsidiaries of NMI.  As
such, I, NMI and the Subsidiaries (together, the “Affiliates”) are fully
familiar with all the facts and circumstances recited herein on personal
knowledge. NMI has its principal place of business at 1910 Pacific Avenue, Suite
20000, Dallas, TX 75201. On behalf of myself and the other Affiliates, I hereby
confess judgment in favor of Leonite Capital, LLC (“Leonite”), having a
principal place of business at at 1 Hillcrest Center Drive suite 232 Spring
Valley, NY 10977, in the amount of One Million, One Hundred Twenty Thousand
Dollars ($1,120,000), less any payments made on or after the date of this
affidavit of confession of judgment (the “Confession of Judgment”), plus
interest pursuant to the terms of the Note (as defined herein) and all
applicable penalties under the Note, as further provided herein. In no event
shall interest payable hereunder exceed the maximum permissible under applicable
law.
 
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2.          This Confession of Judgment is for a debt justly due to Leonite from
Rosellini and the other Affiliates, and Rosellini and the other Affiliates
hereby authorize the Supreme Court of the State of New York to enter judgment
against Rosellini and the other Affiliates, jointly and severally, in the amount
of One Million, One Hundred Twenty Thousand Dollars ($1,120,000), less any
payments made on, prior to or after the date of this Confession of Judgment,
plus interest pursuant to the terms of the Note, including a default interest
rate of twenty-four percent (24%) per annum on said amount from the date of any
default, all applicable penalties under the Note, plus the costs and attorneys’
fees that are set forth below, upon the occurrence of an event of default under
Section 4.1 (Failure to Pay Principal or Interest) of that certain senior
secured convertible promissory note, in the original principal amount of One
Million, One Hundred Twenty Thousand Dollars ($1,120,000) issued by NMI on
August __ , 2017 (the “Note”).
 
3.          In order to secure these obligations, Rosellini and the other
Affiliates agreed to simultaneously deliver with the execution of the Note this
Confession of Judgment.  Rosellini and the other Affiliates hereby authorize
entry of a monetary judgment obtained pursuant to the Confession of Judgment in
the New York State Supreme Court, New York County under the circumstances
specified in paragraph 2 of this Confession of Judgment.
 
4.          The sums confessed pursuant to this Confession of Judgment are
justly due and owing to Leonite under the following circumstances: NMI entered
into the securities purchase agreement dated __________, 2017 (the “Agreement”)
and the Note and Rosellini and the other Affiliates entered into related
agreements.  The Agreement provides for the issuance of the Note, and contains
customary representations, warranties, and covenants.
 
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5.          Rosellini and the other Affiliates agree to pay any and all costs
and expenses incurred by Leonite in enforcing the terms of this Confession of
Judgment, including reasonable attorneys’ fees and expenses at the rate of
$750.00 per hour that Leonite incurs or is billed for in connection with
enforcing the terms of the Confession of Judgment, entering any Judgment,
collecting upon said Judgment, and defending or prosecuting any appeals.
 

 
By:
     
William Rosellini, individually
                                           
Nexeon Medsystems Inc 
                 
By:
     
Name:
William Rosellini
   
Title:
Chief Executive Officer
           
Nexeon Medsystems Europe, SARL 
         
By:
     
Name:
     
Title:
                     
Nexeon Medsystems Belgium, SPRL 
         
By:
     
Name:
     
Title:
                     
Nexeon Medsystems Puerto Rico Operating Company Corporation 
         
By:
     
Name:
     
Title:
                     
Pulsus Medical LLC  
         
By:
     
Name:
     
Title:
   

 
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STATE OF __________)         
     
ss.: 
 
COUNTY OF ________)
   

 
 
ACKNOWLEDGMENT
 
 
On _______ _____, 2017 before me personally came Willliam Rosellini, to me
known, who, by me duly sworn,  did depose and say that deponent is the Chief
Executive Officer of NEXEON MEDSYSTEMS INC and the authorized representative of
NEXEON MEDSYSTEMS EUROPE, SARL, NEXEON MEDSYSTEMS BELGIUM, SPRL, NEXEON
MEDSYSTEMS PUERTO RICO, OPERATING COMPANY CORPORATION, and PULSUS MEDICAL LLC
the Affiliates described in, and which executed the foregoing affidavit of
confession of judgment, that deponent knows the seal of the Affiliates, that the
seal affixed to the affidavit of confession of judgment is the Affiliates’
respective seals, that it was affixed by order of the board of directors of the
Affiliates and that deponent signed deponent’s name by like order.

Deponent acknowledged to me that he also executed the forgoing Affidavit of
Confession of Judgment in his individual capacity as is set forth above.

 
 
 
 
Notary Public
 

 
SEALS:

 
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