Exhibit 10.1

 

THIS SUBSCRIPTION AGREEMENT DOES NOT CONSTITUTE AN OFFER OR SOLICITATION BY
ANYONE IN ANY JURISDICTION IN WHICH SUCH AN OFFER OR SOLICITATION IS NOT
AUTHORIZED

 

CRDENTIA CORP.

SUBSCRIPTION AGREEMENT

 

I.              Subscription.

 

A.            The Undersigned (the “Purchaser”), pursuant to the terms and
conditions of this Subscription Agreement (the “Agreement”), hereby irrevocably
subscribes for the purchase of $200,000 of Common Stock (the “Stock”) issued by
Crdentia Corp. (the “Company”), at a price per share of $0.80. The shares of
Stock are sometimes referred to herein as the “Securities.”  The total aggregate
purchase price to be paid by the Purchaser for the Securities purchased
hereunder will be the amount of $200,000 (the “Purchase Price”). The Purchaser
hereby agrees to deliver to the Company an executed copy of this Agreement and
the Purchase Price.

 

B.            The Purchaser agrees that this subscription shall be irrevocable
and shall survive the death or disability of the Purchaser.

 

C.            The executed Agreement will be held for the benefit of the
Purchaser until the subscription is accepted by the Company pursuant to
Section II below. If the subscription is not accepted, the executed Agreement
will be promptly returned to the Purchaser.

 

D.            On the date set forth on the signature page hereto the Purchaser
shall wire to the Company the payment representing the Purchase Price of the
Securities acquired by the Purchaser.

 

II.            Acceptance of Subscription.

 

The Purchaser acknowledges that the Company has the right to accept or reject
this subscription, in whole or in part, for any reason, and that this
subscription shall be deemed to be accepted by the Company only when an
authorized representative of the Company has executed and acknowledged this
Agreement on the Company’s behalf. The subscription either will be accepted or
rejected, or accepted in part and rejected in part, as promptly as practical
after receipt. The Purchaser agrees that subscriptions need not be accepted in
the order they are received by the Company. Upon rejection of this subscription
for any reason, all items received with this subscription shall be returned to
the Purchaser, and this Subscription Agreement shall be deemed to be null and
void and of no further force or effect. The Purchaser understands and agrees
that the acceptance of this subscription by the Company, or a part of this
subscription, will in no way constitute a determination by the Company that an
investment in the Securities is a suitable investment for the Purchaser.

 

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III.           Representations, Warranties and Covenants of the Company.

 

A.            In connection with the execution of this Agreement by the
Purchaser, the Company hereby agrees to the following representations,
warranties and covenants and the Purchaser is entitled to rely on such
representations, warranties and covenants in making any purchase that it
may make of the Stock pursuant to this Agreement.

 

1.1           Organization. The Company is duly organized and validly existing
in good standing under the laws of the State of Delaware. Each of the Company
and its Subsidiaries (as defined in Rule 405 under the Securities Act) has full
power and authority to own, operate and occupy its properties and to conduct its
business as presently conducted and as described in the Exchange Act Documents
and is registered or qualified to do business and in good standing in each
jurisdiction in which the nature of the business conducted by it or the location
of the properties owned or leased by it requires such qualification and where
the failure to be so qualified would have a material adverse effect upon the
condition (financial or otherwise), earnings, business or business prospects,
properties or operations of the Company and its Subsidiaries, considered as one
enterprise (a “Material Adverse Effect”).

 

1.2           Due Authorization and Valid Issuance. The Company has all
requisite power and authority to execute, deliver and perform its obligations
under this Agreement, and this Agreement has been duly authorized. This
Agreement has been validly executed and delivered by the Company and constitutes
a legal, valid and binding agreement of the Company enforceable against the
Company in accordance with its terms, except as (A) rights to indemnity and
contribution may be limited by court decision or applicable law,
(B) enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors’ and contracting
parties’ rights generally and (C) enforceability may be subject to general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law) or the discretion of the court before which
any proceeding is brought. The Stock being purchased hereunder will, upon
issuance and payment therefor pursuant to the terms hereof, be duly authorized
and validly issued, and the Stock will, upon issuance pursuant to the terms
hereof, be fully paid and nonassessable.

 

1.3           Non-Contravention. Assuming the correctness of the representations
and warranties of the Purchaser, no consent, approval, authorization or other
order of, or registration, qualification or filing with, any regulatory body,
administrative agency, or other governmental body in the United States or any
other person is required for the execution and delivery of this Agreement and
the valid issuance and sale of the Securities to be sold and issued pursuant to
this Agreement, other than such as have been made or obtained, and except for
any post-closing securities filings or notifications required to be made under
federal or state securities laws and applicable rules of the National
Association of Securities Dealers, Inc.

 

1.4           Transfer Taxes. All stock transfer or other taxes (other than
income taxes) which are required to be paid in connection with the sale and
transfer of the Securities to be sold to the Purchaser hereunder will be, or
will have been, fully paid or provided for by the Company and all laws imposing
such taxes will be or will have been fully complied with.

 

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1.5           Private Offering. Assuming the correctness of the representations
and warranties of the Purchasers set forth in this Agreement, the offer and sale
of Securities hereunder is exempt from registration under the Securities Act.
The Company has not in the past nor will it hereafter take any action to sell,
offer for sale or solicit offers to buy any securities of the Company which
would bring the offer, issuance or sale of the Securities as contemplated by
this Agreement, within the provisions of Section 5 of the Securities Act, unless
such offer, issuance or sale was or shall be within the exemptions of Section 4
of the Securities Act.

 

The foregoing representations and warranties are true, complete and accurate as
of the date hereof, shall be true, complete and accurate as of the date of
delivery, if any, of the Securities to the Purchaser and shall survive for a
period of one year after the delivery, if any, of the Securities. The Company
undertakes no duty to update the foregoing representations and warranties.

 

IV.           Representations, Warranties and Covenants of Purchaser.

 

The Purchaser hereby represents and warrants to and covenants with the Company
for the Company’s benefit with knowledge that the Company is relying thereon in
entering into this Agreement and issuing the Securities to such Purchaser, as
follows:

 

A.            The Purchaser has reviewed the documents filed by the Company
under the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
since the end of its most recently completed fiscal year through the date
hereof, including, without limitation, its most recent reports on Form 10-KSB,
Form 10-QSB and Form 8-K (together with all exhibits thereto). The Purchaser has
been given the opportunity to ask questions of and to receive answers from the
Company concerning the terms and conditions of the offer and sale of the
Securities, and to obtain such additional written information necessary to
verify the accuracy of same as the Purchaser desires in order to evaluate an
investment in the securities described herein.

 

B.            The Purchaser is an accredited investor as that term is defined in
Rule 501(a) of Regulation D under the U.S. Securities Act of 1933, as amended
(the “Securities Act”), which definition is annexed hereto as “Exhibit A.”

 

C.            Immediately prior to the Purchaser’s execution of this Agreement,
the Purchaser had such knowledge and experience in financial and business
matters (including experience with investments of a similar nature), that the
Purchaser was capable of evaluating the merits and risks of an investment in the
Securities.

 

D.            The Securities are being acquired solely for the Purchaser’s own
account for investment purposes only and not with a view to or for any resale or
distribution thereof or with any present intention of distributing or selling
all or any part of such Securities. The Purchaser agrees that the Securities
may not be transferred except upon registration under the Securities Act, and
under any applicable state securities or “blue sky” laws, or upon receipt by the
Company of evidence in form and substance reasonably satisfactory to the
Company, to the effect that such transfer may be made without registration under
the Act and applicable state securities or “blue sky” laws.

 

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E.             The Purchaser recognizes that the purchase of the Securities is a
speculative investment that involves a high degree of risk and is suitable only
for persons with the financial capability of making and holding long-term
investments not readily reducible to cash. The Purchaser is aware that there is
no guarantee that the Purchaser will realize any gain from an investment in the
Securities. The Purchaser further understands that the Purchaser could lose the
entire amount of the Purchaser’s investment.

 

F.             The Purchaser understands that no U.S. federal or state
securities commission or regulatory authority, or other authority (within or
outside of the United States) has made any finding or determination regarding
the fairness of the offer, sale and/or issuance of the Securities, has made any
recommendation or endorsement of the offer and sale of the Securities or has
passed in any way upon this Agreement.

 

G.            The Purchaser is financially able to bear the economic risk of an
investment in the Securities, including the ability to hold such Securities
indefinitely and to afford a complete loss of his investment in the Securities.

 

H.            The certificates and/or other documentation evidencing the
Securities will contain a legend substantially as follows:

 

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”) OR THE SECURITIES, BLUE SKY OR OTHER APPLICABLE
LAWS OF ANY STATE, OR ANY OTHER RELEVANT JURISDICTION, AND MAY NOT BE OFFERED
AND SOLD UNLESS (A) REGISTERED AND/OR QUALIFIED PURSUANT TO THE RELEVANT
PROVISIONS OF U.S. FEDERAL SECURITIES LAWS, THE SECURITIES, BLUE SKY, OR OTHER
APPLICABLE LAWS OF ANY STATE, OR OTHER RELEVANT JURISDICTION OR (B) EXEMPT FROM
SUCH REGISTRATION OR QUALIFICATION. THEREFORE, NO SALE, PLEDGE OR OTHER TRANSFER
OF THIS SECURITY SHALL BE MADE, NO ATTEMPTED SALE, PLEDGE OR OTHER TRANSFER
SHALL BE VALID, AND THE ISSUER SHALL NOT BE REQUIRED TO GIVE ANY EFFECT TO ANY
SUCH TRANSACTION UNLESS (A) SUCH TRANSACTION SHALL HAVE BEEN DULY REGISTERED
UNDER THE SECURITIES ACT AND QUALIFIED OR APPROVED UNDER THE SECURITIES, BLUE
SKY, OR OTHER APPLICABLE LAWS OF ANY STATE, OR OTHER RELEVANT JURISDICTION, OR
(B) THE COMPANY SHALL HAVE BEEN SATISFIED THAT SUCH REGISTRATION, QUALIFICATION
OR APPROVAL IS NOT REQUIRED.

 

The Purchaser further acknowledges that: (i) any necessary stop transfer orders
will be placed upon the certificates for the Securities in accordance with the
Securities Act, and (ii) the Company is under no obligation to aid the Purchaser
in obtaining an exemption from the registration requirements of the Securities
Act or any jurisdiction.

 

I.              Purchaser understands that the Securities are being offered and
sold to it in reliance on specific exemptions from the registration and approval
requirements of the U.S. federal and state securities laws or the laws of other
applicable jurisdictions and that the Company is relying upon the truth,
completeness and accuracy of the representations,

 

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warranties, agreements, acknowledgments and understandings of Purchaser set
forth herein in order to determine the applicability of such exemptions and the
suitability of Purchaser to acquire the Securities.

 

J.             The execution, delivery and performance by the Purchaser of this
Subscription Agreement are within the powers of the Purchaser, have been duly
authorized and will not constitute or result in a breach or default under, or
conflict with, any order, ruling or regulation of any court or other tribunal or
of any governmental commission or agency, or any agreement or other undertaking,
to which the Purchaser is a party or by which the Purchaser is bound; and, if
the Purchaser is not an individual, will not violate any provision of the
charter documents, bylaws, indenture of trust, partnership agreement or similar
documents, as applicable, of the Purchaser. The signatures on this Subscription
Agreement are genuine; and the signatory, if the Purchaser is an individual, has
legal competence and capacity to execute the same, or, if the Purchaser is not
an individual, the signatory has been duly authorized to execute the same; and
this Subscription Agreement constitutes the legal, valid and binding obligation
of the Purchaser, enforceable in accordance with its terms.

 

K.            The type of ownership in which the Purchaser is applying to
purchase Securities is as follows:  (Check One)

 

o                                    INDIVIDUAL OWNERSHIP (One signature
required)

 

o                                    JOINT TENANTS WITH RIGHT OF SURVIVORSHIP
(Both parties must sign)

 

o                                    TRUST (Please include name of trustee, date
trust was formed and a copy of the Trust Agreement or other authorization)

 

o                                    CORPORATION (Please include Certified
Corporate Resolution authorizing signature)

 

ý                                    PARTNERSHIP (Signature of the authorized
general partner is required)

 

o                                    COMMUNITY PROPERTY (Two signatures
required)

 

o                                    TENANTS-IN-COMMON (Both parties must sign)

 

o                                    OTHER (Describe)

 

The foregoing representations and warranties are true, complete and accurate as
of the date hereof, shall be true, complete and accurate as of the date of
delivery of this Subscription Agreement and accompanying documents to the
Company and shall survive the delivery of the Securities. If, in any respect,
those representations and warranties shall not be true, complete and accurate
prior to acceptance or rejection of this subscription by the Company pursuant to
Section II, the undersigned shall immediately give written notice to the Company
specifying which representations and warranties are not true, complete and
accurate and the reason therefor. The Purchaser agrees that the foregoing
representations and warranties may be used as a defense in any actions relating
to the Company or the offering of

 

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the Securities, and that it is only on the basis of such representations and
warranties that the Company may be willing to accept the Purchaser’s
subscription for the Securities.

 

V.            Waiver.

 

Except as otherwise specifically provided for hereunder, no party shall be
deemed to have waived any of his, her or its rights hereunder unless such waiver
is in writing and signed by the party waiving said right. Except as otherwise
specifically provided for hereunder, no delay or omission by any party in
exercising any right with respect to the subject matter hereof shall operate as
a waiver of such right or of any such other right. A waiver on any one occasion
with respect to the subject matter hereof shall not be construed as a bar to or
waiver of any right or remedy on any future occasion. All rights and remedies
with respect to the subject matter hereof shall be cumulative and may be
exercised separately or concurrently.

 

VI.           Severability.

 

If any term, covenant or condition of this Agreement is held to be invalid, void
or otherwise unenforceable by any court of competent jurisdiction, the remainder
of this Agreement shall not be affected thereby and each term, covenant and
condition of this Agreement shall be valid and enforceable to the fullest extent
permitted by law.

 

VII.          Entire Agreement.

 

Neither the Company nor the Purchaser has made any representations or warranties
with respect to the subject matter hereof not set forth herein. This
Subscription Agreement and the documents and exhibits referred to herein
constitute the entire agreement between the parties hereto with respect to the
subject matter hereof. All understandings and agreements which heretofore
may have existed or did exist between the parties hereto with respect to the
subject matter hereof are superseded by this Subscription Agreement.

 

VIII.        Assignability.

 

This Subscription Agreement is not transferable or assignable by the undersigned
or any successor thereto. Any attempted assignment will be void.

 

IX.           Attorney’s Fees.

 

If any action of law or in equity is necessary to enforce or interpret the terms
of this Agreement, the prevailing party shall be entitled to an award of its
reasonable attorneys’ fees, costs and disbursements in addition to any other
relief to which such party may be entitled.

 

X.            Amendment; Termination.

 

This Subscription Agreement may not be changed, modified, extended or terminated
other than by an agreement in writing, signed by the Company and the Purchaser.

 

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XI.           Survival.

 

The representations and warranties made herein shall survive the consummation of
the transaction contemplated hereby.

 

XII.         Counterparts.

 

This Agreement may be executed in one or more counterparts, each of which shall
be deemed an original, but all of which together shall constitute one and the
same instrument.

 

XIII.        Governing Law.

 

This Subscription Agreement shall be governed by, and construed and enforced in
accordance with, the laws of the State of Delaware, without regard to principles
of conflicts of laws.

 

XIV.        Confidentiality; Certain Disclosures.

 

The Company may present this Subscription Agreement to such parties as its deems
advisable if compelled by law or called upon to establish the availability under
any U.S. federal or state securities laws of an exemption from registration of
the Securities or if the contents thereof are relevant to any issue in any
action, suit, or proceeding to which the Company is a party or by which it is or
may be bound.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

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Purchaser hereby agrees to pay an aggregate of $200,000 as consideration for the
Stock.

 

“Purchaser:”

MedCap Partners L.P.

 

 

 

By:

MedCap Management & Research LLC

 

Its:

General Partner

 

 

 

By:

/s/ C. Fred Toney

 

 

Name:

C. Fred Toney

 

Its:

Managing Member

 

 

 

Address:

500 Third Street, Suite 535

 

 

San Francisco, CA 94107

 

Telephone:

(415) 495-1010

 

Facsimile:

(415) 495-1012

 

Date:

March 3, 2006

 

 

 

 

Please register the Securities as follows:

 

 

 

 

 

 

Deliver to (if other than the address above):

 

 

 

 

 

 

SUBSCRIPTION ACCEPTED AS OF

THE THIRD DAY OF MARCH, 2006.

 

Crdentia Corp.,

a Delaware corporation

 

By:

  /s/ James J. TerBeest

 

Name:

James J. TerBeest

Title:

Chief Financial Officer

 

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EXHIBIT “A”

DEFINITION OF ACCREDITED INVESTOR

 

Accredited Investor. “Accredited investor” shall mean any person who comes
within any of the following categories, or who the issuer reasonably believes
comes within any of the following categories, at the time of the sale of the
securities to that person:

 

(1)           Any bank as defined in section 3(a)(2) of the Securities Act, or
any savings and loan association or other institution as defined in
section 3(a)(5)(A) of the Securities Act whether acting in its individual or
fiduciary capacity; any broker or dealer registered pursuant to section 15 of
the Securities Exchange Act of 1934; any insurance company as defined in
section 2(13) of the Securities Act; any investment company registered under the
Investment Company Act of 1940 or a business development company as defined in
section 2(a)(48) of that Act; Small Business Investment Company licensed by the
U.S. Small Business Administration under section 301(c) or (d) of the Small
Business Investment Act of 1958; any plan established and maintained by a state,
its political subdivisions, or any agency or instrumentality of a state or its
political subdivisions, for the benefit of its employees, if such plan has total
assets in excess of $5,000,000; employee benefit plan within the meaning of the
Employee Retirement Income Security Act of 1974 if the investment decision is
made by a plan fiduciary, as defined in section 3(21) of such Act, which is
either a bank, savings and loan association, insurance company, or registered
investment adviser, or if the employee benefit plan has total assets in excess
of $5,000,000 or, if a self-directed plan, with investment decisions made solely
by persons that are accredited investors;

 

(2)           Any private business development company as defined in
section 202(a)(22) of the Investment Advisers Act of 1940;

 

(3)           Any organization described in Section 501(c)(3) of the Internal
Revenue Code, corporation, Massachusetts or similar business trust, or
partnership, not formed for the specific purpose of acquiring the securities
offered, with total assets in excess of $5,000,000;

 

(4)           Any director, executive officer, or general partner of the issuer
of the securities being offered or sold, or any director, executive officer, or
general partner of a general partner of that issuer;

 

(5)           Any natural person whose individual net worth, or joint net worth
with that person’s spouse, at the time of his purchase exceeds $1,000,000;

 

(6)           Any natural person who had an individual income in excess of
$200,000 in each of the two most recent years or joint income with that person’s
spouse in excess of $300,000 in each of those years and has a reasonable
expectation of reaching the same income level in the current year;

 

(7)           Any trust, with total assets in excess of $5,000,000, not formed
for the specific purpose of acquiring the securities offered, whose purchase is
directed by a sophisticated person as described in §230.506(b)(2)(ii); and

 

(8)           Any entity in which all of the equity owners are accredited
investors.

 

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