Exhibit
10.1


 


THIS
PROMISSORY NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR QUALIFIED UNDER ANY STATE SECURITIES LAWS.  THIS PROMISSORY NOTE HAS BEEN ACQUIRED FOR
INVESTMENT PURPOSES ONLY, AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE
SALE OR DISTRIBUTION THEREOF.  NO SUCH
SALE OR DISTRIBUTION MAY BE EFFECTED UNLESS PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT RELATED THERETO, OR AN EXEMPTION FROM SUCH REGISTRATION
STATEMENT REQUIREMENTS.


 


SECURED
PROMISSORY NOTE


 


	
  Principal Amount:
  $500,000.00

  	
   

  	
  San Francisco, California

  
	
  Interest Rate: 5.00%
  per annum

  	
   

  	
  November 15, 2005

  



 


FOR VALUE
RECEIVED, the undersigned, Crdentia Corp., a Delaware corporation (“Crdentia”),
Baker Anderson Christie, Inc., a California corporation, Nurses Network, Inc.,
a California corporation, New Age Staffing, Inc., a Delaware corporation, PSR
Nurses, Ltd., a Texas limited partnership, PSR Nurse Recruiting, Inc., a Texas
corporation, PSR Nurses Holdings Corp., a Texas corporation, CRDE Corp., a Delaware
corporation, Arizona Home Health Care/Private Duty, Inc., an Arizona
corporation, Care Pros Staffing, Inc, a Texas corporation, HIP Holding, Inc., a
Delaware corporation, Health Industry Professionals, L.L.C., a Michigan limited
liability company, Travmed USA, Inc., a North Carolina corporation, Prime
Staff, LP, a Texas limited partnership, Mint Medical Staffing Odessa, LP, a
Texas limited partnership and GHS Acquisition Corporation, a Delaware
corporation (each individually and referred to collectively as “Issuer”),
jointly and severally promise to pay to MedCap Partners L.P., or any assignees
of the Note (“Holder”), by wire transfer to such account as Holder may from
time to time designate in writing, the principal amount of Five Hundred
Thousand Dollars ($500,000.00) (the “Principal Amount”) payable at such times
as specified in paragraph 1 below. 
Issuer also promises to pay interest on the unpaid principal amount from
the date of this Note until this Note is paid in full, at the rate of five
percent (5.00%) per annum, at such times as specified in this Agreement.  This Note is executed and delivered pursuant
to, and in recognition of, a loan of $500,000 made by Holder to Issuer on the
date hereof.


 


1.
Principal Payment.  The
Principal Amount shall be payable to Holder on the earlier of (i) two business
days (as defined below) following the date of Crdentia’s receipt of written
demand by Holder requesting such payment or (ii) the date on which Crdentia
completes a private offering or offerings of its equity securities (whether
such offering or offerings consist of one or more transactions) in an amount of
not less than $5.0 million (the “Maturity Date”).  All payments shall be made in immediately
available funds in lawful currency of the United States of America, without
offset, deduction or counterclaim of any kind. 
A “business day” shall mean any day except Saturday, Sunday or any day
that is a legal holiday in the State of California.  Holder may make written demand by facsimile,
email or other usual means of communication between Holder and Crdentia.


 





















 


2.  Interest. 
Prior to the Maturity Date or the occurrence of an
Event of Default (as defined in paragraph 3 below), the unpaid Principal Amount
periodically outstanding under this Note shall bear simple interest at the rate
of five percent (5.00%) per annum, calculated on the basis of a 365-day year,
based on the actual number of days elapsed (including the first day, but
excluding the last day).  All accrued and
unpaid interest on this Note shall be due and payable on the Maturity
Date.  After the Maturity Date or upon
the occurrence and during the continuation of any Event of Default, any unpaid
Principal Amount or accrued interest shall bear interest at the rate of ten
percent (10%) per annum until paid in full.


 


3.  Events of Default.  The occurrence of any of
the following events shall constitute an event of default under this Note: (a)
Issuer’s failure to pay the Principal Amount when due and payable; (b) any
Issuer making an assignment for the benefit of its creditors; (c) any Issuer
filing (or consenting to the filing of) any petition or complaint pursuant to
federal or state bankruptcy or insolvency laws, seeking the appointment of a
receiver or trustee for any of its assets, seeking the adjudication of such
Issuer as bankrupt or insolvent, seeking an “order for relief” under such
statutes, or seeking a reorganization of or a plan of arrangement for Issuer;
or (d) any default or breach by any Issuer of or under any agreement for
borrowed money, including loan agreements, or breach under any capital
equipment lease agreement, by which such Issuer is bound or obligated following
the expiration of any applicable grace period. 
Upon the occurrence of an Event of Default, the entire Principal Amount then
outstanding, together with accrued and unpaid interest, shall become
immediately due and payable.


 


4.  Security Agreement.  This Note is executed and
delivered together with a Security Agreement (the “Security Agreement”),
entered into as of the date hereof, between Holder and Issuer (Issuer therein
referred to as “Grantor”) by which Grantor has granted Holder a security
interest in the right, title, and interest in and to all of Grantor’s
Collateral (as defined in the Security Agreement), subject to the liens and
encumbrances on the Collateral existing as of the date hereof.


 


5.   Subordination.  The indebtedness evidenced by this Note is
expressly junior and subordinate in right of payment to the prior payment in
full of all of Issuer’s indebtedness under (i) that certain Second Amended and
Restated Loan and Security Agreement — Revolving Loans, dated as of May 16, 2005,
by and among Crdentia and its subsidiaries, on the one hand, and Bridge
Healthcare Finance, LLC, on the other hand (as the same may be amended or
modified from time to time, the “Revolving Loan Agreement”), and (ii) that
certain Amended and Restated Loan and Security Agreement — Term Loan, dated as
of May 16, 2005, by and among Crdentia and its subsidiaries, on the one hand,
and Bridge Opportunity Finance, LLC, on the other hand (as the same may be
amended or modified from time to time, the “Term Loan Agreement” and, together
with the Revolving Loan Agreement, the “Loan Agreement”).  Notwithstanding anything herein to the
contrary, no payment of principal or interest shall be made on this Note if
there exists any default, or the existence of any event which, with the giving
of notice, would constitute a default, in the payment of any indebtedness under
the Loan Agreement, as determined by the terms of the Loan Agreement.  Holder agrees to execute all subordination
documents reasonably required by Bridge Healthcare Finance, LLC and/or Bridge
Opportunity Finance, LLC.


 


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6.  Prepayment. 
This Note may be prepaid, at the option of Issuer, in
whole or in part, at any time or from time to time, without penalty or premium;
provided, however, that any prepayment
shall be applied first to the Principal Amount then outstanding until paid in
full and then to accrued and unpaid interest as of the date of such
prepayment.  In the event that Issuer
sells any of the Collateral (as defined in the Security Agreement), the net
proceeds from such sale shall be applied as set forth in the Security Agreement
and, to the extent any proceeds are required to be applied to the payment of
the Principal Amount and interest hereunder, in accordance with the preceding
sentence.


 


7.  Maximum Rate of Interest.  In no event shall any interest rate provided
for hereunder exceed the maximum rate legally chargeable by Holder under
applicable law.  If at any time such laws
would render usurious any amount due under this Note, then it is the express
intention of Holder and Issuer that Issuer not be required to pay interest on this
Note at a rate in excess of the maximum lawful rate, that the provisions of
this paragraph 7 shall control over all other provisions of this Note which may
be in apparent conflict, that such excess amount shall be immediately credited
to the principal balance owing under this Note (or, if this Note has been fully
repaid, refunded by Holder to Issuer), and the provisions hereof shall be
immediately reformed and the amounts thereafter decreased, so as to comply with
the then applicable usury law, but so as to permit the recovery of the fullest
amount otherwise due under this Note. 
Any credit or refund shall not cure or waive any default by Issuer under
this Note.  For the purposes of this
paragraph 7, the term “applicable law” means the laws of the State of
California, as such laws now exist or may be changed or amended or come into
effect in the future.


 


8.   Holder Representations.


 


(a)           This Note is being acquired for
Holder’s own account, not as a nominee or agent, and not with a view to the
resale or distribution of any part hereof in violation of the Securities Act of
1933, as amended (the “1933 Act”), and Holder has no present intention of
selling, granting any participation in, or otherwise distributing this Note in
violation of the 1933 Act.


 


(b)           Holder acknowledges that it can bear
the economic risk of complete loss of its investment in this Note and has such
knowledge and experience in financial or business matters that it is capable of
evaluating the merits and risks of the investment in this Note.  Holder acknowledges that there are
substantial risks incident to the ownership of this Note, and such investment
is speculative and involves a high degree of risk of loss by Holder of Holder’s
entire investment in the Issuer


 


(c)           Holder has had an opportunity to
receive all information related to Issuer requested and to ask questions of and
receive answers from Issuer regarding Issuer and its business.  Holder has reviewed the reports and other
documents filed by Issuer with the Securities and Exchange Commission.


 


(d)           Holder acknowledges and understands
that this Note is a “restricted security” under the 1933 Act.


 


(e)           Holder is an “accredited investor” as
defined by Rule 501 or


 


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Regulation D
promulgated under the 1933 Act.


 


9.  No Waiver. 
No extension of time for payment of any amount owing
hereunder shall affect the liability of Issuer or any person or entity, now or
at any time hereafter, liable for payment of the indebtedness evidenced
hereby.  No delay by Holder in exercising
any power or right hereunder shall operate as a waiver of any power or right
hereunder.


 


10.  Attorneys’ Fees.  If any action or proceeding
is brought by Holder to enforce payment of this Note, then the prevailing party
shall be entitled to recover its reasonable costs and expenses (including
without limitation attorneys’ fees, experts fees, etc.) associated
therewith.  In addition, upon the payment
in full of the Principal Amount, Issuer agrees to pay to Holder the reasonable
legal fees, not to exceed $15,000, incurred by MedCap Partners L.P. in
connection with the review and preparation of this Note and the Security
Agreement and any related filings to protect Holder’s security interests.


 


11.  Waiver of Presentment, etc.  Each Issuer, for itself and
its respective successors and assigns, hereby expressly waive presentment,
demand, protest, notice of protest, dishonor, notice of dishonor and any other
notice of any type or nature.  No waiver
or modification of the terms of this Note shall be valid unless in writing and
signed by the holder hereof.


 


12.  Severability. 
If any provision of this Note is held invalid or
unenforceable by any court of competent jurisdiction, the other provisions of
this Note shall remain in full force and effect.  Any provision of this Note held invalid or
unenforceable only in part or degree shall remain in full force and effect to
the extent not held invalid or unenforceable.


 


13.  Time of Essence.  Time is of the essence with regard to all
dates set forth in this Note.


 


14.  Assignment and Transfer.  No Issuer may assign or
otherwise transfer its rights or obligations under this Note without the prior
written consent of Holder.  Any purported
assignment or transfer in contravention of this paragraph 14 shall be null and
void.  Subject to the foregoing, this
Note shall be binding upon the successors and assigns of Issuer, and shall
inure to the benefit of and be enforceable by the successors and assigns of
Holder.  Holder agrees that it shall not
transfer this Note (a) in violation of the 1933 Act or any state securities
laws and (b) unless pursuant to an effective registration statement or an
exemption from such registration statement requirements.


 


15.  Governing Law.  This Note shall be
construed in accordance with and governed by the laws of the State of
California, without regard to conflict of laws principles.


 


[signature pages
follow]


 


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IN WITNESS WHEREOF, the
undersigned have executed this Note as of the date first written above.


 


	
   

  	
  CRDENTIA CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James J. TerBeest

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title: Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BAKER ANDERSON CHRISTIE, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James J. TerBeest

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title: Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  NURSES NETWORK, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James J. TerBeest

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title: Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  NEW AGE STAFFING, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James J. TerBeest

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title: Chief Financial Officer

  
							



 


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  PSR NURSES, LTD.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: PSR Nurse Recruiting, Inc.

  
	
   

  	
  Its: General Partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James J. TerBeest

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title: Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PSR NURSE RECRUITING, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James J. TerBeest

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title: Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PSR NURSES HOLDINGS CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James J. TerBeest

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title: Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CRDE CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James J. TerBeest

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title: Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ARIZONA HOME HEALTH

  CARE/PRIVATE DUTY, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James J. TerBeest

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title: Chief Financial Officer

  
						



 


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  CARE PROS STAFFING, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James J. TerBeest

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title: Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HIP HOLDING, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James J. TerBeest

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title: Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HEALTH INDUSTRY

  
	
   

  	
  PROFESSIONALS, L.L.C.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: HIP Holding, Inc.

  
	
   

  	
  Its: Managing Member

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James J. TerBeest

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title: Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  TRAVMED USA, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James J. TerBeest

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title: Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PRIME STAFF, LP

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: CRDE Corp.

  
	
   

  	
  Its: General Partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James J. TerBeest

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title: Chief Financial Officer

  
						



 


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  MINT MEDICAL STAFFING

  
	
   

  	
  ODESSA, LP

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: CRDE Corp.

  
	
   

  	
  Its: General Partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James J. TerBeest

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title: Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GHS ACQUISITION CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James J. TerBeest

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title: Chief Financial Officer

  
						



 


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Acknowledged and Agreed to:


 


	
  MEDCAP PARTNERS L.P.

  
	
   

  
	
  By:

  	
  MedCap Management &
  Research LLC

  
	
  Its:

  	
  General Partner

  
	
   

  
	
   

  
	
  By:

  	
  /s/ C. Fred Toney

  	
   

  
	
   

  	
  Name:    C. Fred Toney

  
	
   

  	
  Title: Managing Member

  



 


9