Document:

Exhibit
10.91

MASTER REVOLVING NOTE 

Variable Rate-Maturity Date-Obligatory Advances (Business and Commercial Loans
Only)

	
  AMOUNT

  	
  NOTE
  DATE

  	
  MATURITY
  DATE

  	
  TAX
  IDENTIFICATION #

  
	
  $2,400,000.00

  	
  January 19, 2007

  	
  January 31, 2008

  	
  76-0585701

  

 

On the Maturity Date, as
stated above, for value received, the undersigned promise(s) to pay to the
order of Comerica Bank (“Bank”), at any office of the Bank in the State of
California, $2,400,000.00 Dollars (U.S.) (or that portion of it advanced by the
Bank and not repaid as later provided) with interest until maturity, whether by
acceleration or otherwise, or an Event of Default, as later defined, at a per
annum rate equal to the Bank’s base rate from time to time in effect minus
one-half of one (1/2%) percent per annum and after that at a rate equal to the
rate of interest otherwise prevailing under this Note plus 3% per annum (but in
no event in excess of the maximum rate permitted by law). The Bank’s “base rate”
is that annual rate of interest so designated by the Bank and which is changed
by the Bank from time to time. Interest rate changes will be effective for
interest computation purposes as and when the Bank’s base rate changes.
Interest shall be calculated on the basis of a 360-day year for the actual
number of days the principal is outstanding. Accrued interest on this Note
shall be payable on the first day of each month commencing February 1, 2007,
until the Maturity Date when all amounts outstanding under this Note shall be
due and payable in full, If any payment of principal or interest under this
Note shall be payable on a day other than a day on which the Bank is open for
business, this payment shall be extended to the next succeeding business day
and interest shall be payable at the rate specified in this Note during this
extension. A late payment charge equal to 5% of each late payment may be
charged on any payment not received by the Bank within 10 calendar days after
the payment due date, but acceptance of payment of this charge shall not waive
any Default under this Note.

The amount available to be
borrowed hereunder shall be reduced to:

(a)                     $2,275,000.00
as of March 31, 2007;

(b)                    $2,175,000.00
as of June 30, 2007;

(c)                     $2,075,000.00
as of September 30, 2007; and

(d)                    $1,975,000.00
as of December 31, 2007.

To the extent that, as of the
date for any of the aforementioned reductions, the principal amount outstanding
hereunder exceeds the amount available as so reduced, the undersigned shall, on
or before the date for such reduction, repay the principal balance outstanding
hereunder by an amount not less than such excess.

The principal amount payable
under this Note shall be the sum of all advances made by the Bank to or at the
request of the undersigned, less principal payments actually received in cash
by the Bank. The books and records of the Bank shall be the best evidence of
the principal amount and the unpaid interest amount owing at any time under
this Note and shall be conclusive absent manifest error. No interest shall
accrue under this Note until the date of the first advance made by the Bank;
after that interest on all advances shall accrue and be computed on the
principal balance outstanding from time to time under this Note until the same
is paid in full.

This Note and any other
indebtedness and liabilities of any kind of the undersigned (or any of them) to
the Bank, and any and all modifications, renewals or extensions of it, whether
joint or several, contingent or absolute, now existing or later arising, and
however evidenced (collectively “Indebtedness”) are secured by and the Bank is
granted a security interest in all items deposited in any account of any of the
undersigned with the Bank and by all proceeds of these items (cash or
otherwise), all account balances of any of the undersigned from time to time
with the Bank, by all property of any of the undersigned from time to time in
the possession of the Bank and by any other collateral, rights and properties
described in each and every deed of trust, mortgage, security agreement,
pledge, assignment and other security or collateral agreement which has been,
or will at any time(s) later be, executed by any (or all) of the undersigned to
or for the benefit of the Bank (collectively “Collateral”). Notwithstanding the
above, (i) to the extent that any portion of the Indebtedness is a consumer
loan, that portion shall not be secured by any deed of trust or mortgage on or
other security interest in any of the undersigned’s principal dwelling or any
of the undersigned’s real property which is not a purchase money security
interest as to that portion, unless expressly provided to the contrary in
another place, or (ii) if the undersigned (or any of them) has(have) given or
give(s) Bank a deed of trust or mortgage covering real property, that deed of
trust or mortgage shall not secure this Note or any other indebtedness of the
undersigned (or any of them), unless expressly provided to the contrary in
another place.

If the undersigned (or any of
them) or any guarantor under a guaranty of all or part of the Indebtedness (“guarantor”)
(i) fail(s) to pay any of the Indebtedness when due, by maturity, acceleration
or otherwise, or fail(s) to pay any Indebtedness owing on a demand basis upon
demand; or (ii) fail(s) to comply with any of the terms or provisions of any
agreement between the undersigned (or any of them) or any such guarantor and
the Bank; or (iii) become(s) insolvent or the subject of a voluntary or
involuntary proceeding in bankruptcy, or a reorganization, arrangement or
creditor composition proceeding, (if a business entity) cease(s) doing business
as a going concern, (if a natural person) die(s) or become(s) incompetent, (if
a partnership) dissolve(s) or any general partner of it dies, becomes
incompetent or becomes the subject of a bankruptcy proceeding or (if a
corporation of a limited liability company) is the subject of a dissolution,
merger or consolidation; or (a) if any warranty or representation made by any
of the undersigned or any guarantor in connection with this Note or any of the
Indebtedness shall be discovered to be untrue or incomplete; or (b) if there is
any termination, notice of termination, or breach of any guaranty, pledge,
collateral assignment or subordination agreement relating to all or any part of
the Indebtedness; or (c) if there is any failure by any of the undersigned or
any guarantor to pay when due any of its indebtedness (other than to the Bank)
or in the observance or performance of any term, covenant or condition in any
document evidencing, securing or relating to such indebtedness; or (d) if the
Bank deems itself insecure believing that the prospect of payment of this Note
or any of the Indebtedness is impaired or shall fear deterioration, removal or
waste of any of the Collateral; or (e) if there is filed or issued a levy or writ
of attachment

or garnishment or other like judicial process upon the
undersigned (or any of them) or any guarantor or any of the Collateral,
including without limit, any accounts of the undersigned (or any of them) or
any guarantor with the Bank, then the Bank, upon the occurrence of any of these
events (each a “Default”), may at its option and without prior notice to the
undersigned (or any of them), declare any or all of the Indebtedness to be
immediately due and payable (notwithstanding any provisions contained in the
evidence of it to the contrary), cease advancing money or extending credit to
or for the benefit of the undersigned under this Note or any other agreement
between the undersigned and Bank, terminate this Note as to any future
liability or obligation of Bank, but without affecting Bank’s rights and
security interests in any Collateral and the indebtedness of the undersigned to
Bank, sell or liquidate all or any portion of the Collateral, set off against
the Indebtedness any amounts owing by the Bank to the undersigned (or any of
them), charge interest at the default rate provided in the document evidencing
the relevant Indebtedness and exercise any one or more of the rights and
remedies granted to the Bank by any agreement with the undersigned (or any of
them) or given to it under applicable law. In addition, if this Note is secured
by a deed of trust or mortgage covering real property, then the trustor or
mortgagor shall not mortgage or pledge the mortgaged premises as security for
any other indebtedness or obligations. This Note, together with all other
indebtedness secured by said deed of trust or mortgage, shall become due and
payable immediately, without notice, at the option of the Bank, (a) if said
trustor or mortgagor shall mortgage or pledge the mortgaged premises for any
other indebtedness or obligations or shall convey, assign or transfer the
mortgaged premises by deed, installment sale contract instrument, or (b) if the
title to the mortgaged premises shall become vested in any other person or
party in any manner whatsoever, or (c) if there is any disposition (through one
or more transactions) of legal or beneficial title to a controlling interest of
said trustor or mortgagor. All payments under this Note shall be in immediately
available United States funds, without setoff or counterclaim.

If this Note is signed by two or more parties (whether
by all as makers or by one or more as an accommodation party or otherwise), the
obligations and undertakings under this Note shall be that of all and any two
or more jointly and also of each severally. This Note shall bind the
undersigned, and the undersigned’s respective heirs, personal representatives,
successors and assigns.

The undersigned waive(s) presentment, demand, protest,
notice of dishonor, notice of demand or intent to demand, notice of
acceleration or intent to accelerate, and all other notices and agree(s) that
no extension or indulgence to the undersigned (or any of them) or release,
substitution or nonenforcement of any security, or release or substitution of
any of the undersigned, any guarantor or any other party, whether with or
without notice, shall affect the obligations of any of the undersigned. The
undersigned waive(s) all defenses or right to discharge available under Section
3-605 of the California Uniform Commercial Code and waive(s) all other
suretyship defenses or right to discharge. The undersigned agree(s) that the
Bank has the right to sell, assign, or grant participations, or any interest,
in any or all of the Indebtedness, and that, in connection with this right, but
without limiting its ability to make other disclosures to the full extent
allowable, the Bank may disclose all documents and information which the Bank
now or later has relating to the undersigned or the Indebtedness. The
undersigned agree(s) that the Bank may provide information relating to the Note
or to the undersigned to the Bank’s parent, affiliates, subsidiaries and
service providers.

The undersigned agree(s) to reimburse the holder or
owner of this Note for any and all costs and expenses (including without limit,
court costs, legal expenses and reasonable attorney fees, whether inside or
outside counsel is used, whether or not suit is instituted and, if suit is
instituted, whether at the trial court level, appellate level, in a bankruptcy,
probate or administrative proceeding or otherwise) incurred in collecting or
attempting to collect this Note or incurred in any other matter or proceeding
relating to this Note.

The undersigned acknowledge(s) and agree(s) that there
are no contrary agreements, oral or written, establishing a term of this Note
and agree(s) that the terms and conditions of this Note may not be amended,
waived or modified except in a writing signed by an officer of the Bank expressly
stating that the writing constitutes an amendment, waiver or modification of
the terms of this Note. As used in this Note, the word “undersigned” means,
individually and collectively, each maker, accommodation party, indorser and
other party signing this Note in a similar capacity. If any provision of this
Note is unenforceable in whole or part for any reason, the remaining provisions
shall continue to be effective. THIS NOTE IS
MADE IN THE STATE OF CALIFORNIA AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE INTERNAL LAWS OF THE STATE OF CALIFORNIA, WITHOUT REGARD TO CONFLICT
OF LAWS PRINCIPLES.

THE UNDERSIGNED AND THE BANK
ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY IS A CONSTITUTIONAL ONE, BUT THAT
IT MAY BE WAIVED UNDER CERTAIN CIRCUMSTANCES. TO THE EXTENT PERMITTED BY LAW,
EACH PARTY, AFTER CONSULTING (OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH
COUNSEL OF THEIR CHOICE, KNOWINGLY AND VOLUNTARILY, AND FOR THEIR MUTUAL
BENEFIT, WAIVES ANY RIGHT TO TRIAL BY JURY IN THE EVENT OF LITIGATION REGARDING
THE PERFORMANCE OR ENFORCEMENT OF, OR IN ANY WAY RELATED TO, THIS NOTE OR THE
INDEBTEDNESS.

CRDENTIA CORP.

	
  By:

  	
  /s/ James D.
  Durham

  	
   

  
	
   

  	
  SIGNATURE OF

  
	
   

  	
   

  
	
  Its:

  	
  CEO

  	
   

  
	
   

  	
  TITLE

  

 

	
  5001 LBJ Fwy, Suite 850

  	
  Dallas

  	
  Texas

  	
  United States

  	
  75244-6157

  
	
  Street Address

  	
  City

  	
  State

  	
  Country

  	
  Zip Code

  

 

	
  For Bank Use Only

  	
   

  	
   

  	
   

  	
  CCAR #

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Loan Officer
  Initials

  NLC

  	
   

  	
  Loan Group Name

  Peninsula Banking

  	
   

  	
  Obligor(s) Name

  Crdentia Corp.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Loan Officer
  I.D. No.

  	
   

  	
  Loan Group No.

  95745

  	
   

  	
  Obligor #

  1868284110

  	
   

  	
  Note #

  	
   

  	
  Amount

  $2,400,000.00

  

 

 2

 

	
  

  	
   

  	
  Corporate Resolutions and Incumbency
  Certification

  Authority to Procure Loans

  

 

I certify that I am the duly
elected and qualified Secretary of Crdentia Corp. (“Corporation”) and the
keeper of the records of the Corporation; that the following is a true and
correct copy of resolutions duly adopted by the Board of Directors of the
Corporation in accordance with its bylaws and applicable statutes on or as of
January 19, 2007.

Copy of
Resolutions:

Be it
Resolved, That:

1.                          Any
one of the Chairman, CEO or CFO of the Corporation are/is authorized, for, on
behalf of, and in the name of the Corporation to:

(a)                    Negotiate
and procure loans, letters of credit and other credit or financial
accommodations from Comerica Bank (the “Bank”) up to an amount not exceeding $ N/A
(if left blank, then unlimited);

(b)                   Discount
with the Bank commercial or other business paper belonging to the Corporation
made or drawn by or upon third parties, without limit as to amount;

(c)                    Purchase,
sell, exchange, assign, endorse for transfer and/or deliver certificates and/or
instruments representing stocks, bonds, evidences of indebtedness or other
securities owned by the Corporation, whether or not registered in the name of
the Corporation;

(d)                   Give
security for any liabilities of the Corporation to the Bank by grant, security
interest, assignment, lien, deed of trust or mortgage upon any real or personal
property, tangible or intangible of the Corporation; and

(e)                    Execute
and deliver in form and content as may be required by the Bank any and all
notes, evidences of indebtedness, applications for letters of credit,
guaranties, subordination agreements, loan and security agreements, financing
statements, assignments, liens, deeds of trust, mortgages, trust receipts and
other agreements, instruments or documents to carry out the purposes of these
Resolutions, any or all of which may relate to all or to substantially all of
the Corporation’s property and assets.

2.                          Said
Bank be and it is authorized and directed to pay the proceeds of any such loans
or discounts as directed by the persons so authorized to sign, whether so
payable to the order of any of said persons in their individual capacities or
not, and whether such proceeds are deposited to the individual credit of any of
said persons or not;

3.                          Any
and all agreements, instruments and documents previously executed and acts and
things previously done to carry out the purposes of these Resolutions are
ratified, confirmed and approved as the act or acts of the Corporation.

4.                          These
Resolutions shall continue in force, and the Bank may consider the holders of
said offices and their signatures to be and continue to be as set forth in a
certified copy of these Resolutions delivered to the Bank, until notice to the
contrary in writing is duly served on the Bank (such notice to have no effect
on any action previously taken by the Bank in reliance on these Resolutions).

5.                          Any
person, corporation or other legal entity dealing with the Bank may rely upon a
certificate signed by an officer of the Bank to the effect that these
Resolutions and any agreement, instrument or document executed pursuant to them
are still in full force and effect and binding upon the Corporation.

6.                          The
Bank may consider the holders of the offices of the Corporation and their
signatures, respectively, to be and continue to be as set forth in the
Certificate of the Secretary of the Corporation until notice to the contrary in
writing is duly served on the Bank.

I further certify that the above Resolutions are in
full force and effect as of the date of this Certificate; that these
Resolutions and any borrowings or financial accommodations under these
Resolutions have been properly noted in the corporate books and records, and
have not been rescinded, annulled, revoked or modified; that neither the
foregoing Resolutions nor any actions to be taken pursuant to them are or will
be in contravention of any provision of the articles of incorporation or bylaws
of the Corporation or of any agreement, indenture or other instrument to which
the Corporation is a party or by which it is bound; and that neither the
articles of incorporation nor bylaws of the Corporation nor any agreement,
indenture or other instrument to which the Corporation is a party or by which
it is bound require the vote or consent of shareholders of the Corporation to
authorize any act, matter or thing described in the foregoing Resolutions.

I further certify that the
following named persons have been duly elected to the offices set opposite
their respective names, that they continue to hold these offices at the present
time, and that the signatures which appear below are the genuine, original
signatures of each respectively:

(PLEASE SUPPLY GENUINE
SIGNATURES OF AUTHORIZED SIGNERS BELOW)

	
   NAME (Type or Print)

  	
   

  	
  TITLE

  	
   

  	
  SIGNATURE

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  James D. Durham

  	
   

  	
  Chairman and CEO

  	
   

  	
  /s/ James D. Durham

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   James J. TerBeest

  	
   

  	
  CFO and Secretary

  	
   

  	
  /s/ James J. TerBeest

  

 

In Witness
Whereof, I have
affixed my name as Secretary on 1/19/07.

	
  

  	
   

  	
  /s/ James J. TerBeest

  
	
   

  	
   

  	
   

  	
   

  	
  SECRETARY

  

 

 2

CERTIFICATION OF BYLAWS

The
undersigned Secretary of CRDENTIA CORP., a
Delaware corporation (“Company”), hereby certifies to COMERICA BANK, a Michigan banking
corporation (“Bank”), that the Bylaws of the Company attached as Exhibit A: (i)
are a true, complete and accurate copy of such documents; (ii) remain in full
force and effect; (iii) have not been amended, repealed or rescinded in any
respect; and (iv) may continue to be relied upon by Bank until and unless
written notice to the contrary is delivered to Bank.

Executed
as of the 19th day of
January, 2007.

	
  

  	
  CRDENTIA CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James J. TerBeest

  	
   

  
	
   

  	
  Name:

  	
  JAMES J. TERBEEST

  	
   

  
	
   

  	
  Its:

  	
  Secretary

  
					

 

EXHIBIT A

See Attached Bylaws

 2

	
  

  	
   

  	
  Automatic Loan Payment
  Authorization

  

Date: January 19, 2007

	
  Obligor Name (Typed or
  Printed): 

  	
  CRDENTIA CORP.

  	 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	 

	
  Obligor Number:

  	
   

  	
  Lender’s Cost Center #:

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Address:

  	
  5001 LBJ FWY Suite 850

  	
  Dallas

  	
   

  	
  Texas

  	
   

  	
  75244-6156

  	 

	
   

  	
  STREET ADDRESS

  	
   

  	
  CITY

  	
   

  	
  STATE

  	
   

  	
  ZIP CODE

  	 

																									

 

The undersigned hereby
authorizes COMERICA BANK (“Bank”)
to charge the account designated below for the payments due on the loan(s) as
designated below and all renewals, extensions, modifications and/or
substitutions thereof. This authorization will remain in effect unless the
undersigned requests a modification that is agreed to by the Bank in writing.
The undersigned remains fully responsible for all amounts outstanding to Bank
if the designated account is insufficient for repayment.

x                    Automatic
Payment Authorization for all
payments on all current and future
borrowings, as and when such payments come due (which payments
include, without limitation, principal, interest, fees, costs, and expenses).

o                      Automatic
Payment Authorization for all  payments
on only the specific borrowing identified
below, as and when such payments come due (which payments
include, without limitation, principal, interest, fees, costs, and expenses).

Specific Obligation Number:

o                      Automatic
Payment Authorization for less than all
payments on only the specific borrowing
identified below, as and when such payments come due.

Specific Obligation Number:

o                      Principal
and Interest payments only

o                      Principal
payments only

o                      Interest
payments only

o                      SPECIAL
INSTRUCTIONS/IRREGULAR PAYMENT INSTRUCTIONS

 

 

 

Payment Due  Date:  Your
loan payments will be charged to your account as indicated above on the dates
such payments become due (or on date thereafter when there are available funds)
unless that day is a Saturday, Sunday, or Bank holiday in which case such
payments will be charged on the following business day, with interest to accrue
during this extension as provided under the loan documents.

Account to be Charged:

o        Checking                  Comerica
Account No.

o        Savings                     Comerica
Account No.

(Charges to account are withdrawals pursuant to
account resolution)

	
  CRDENTIA CORP.

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ James D. Durham

  	
   

  	
   

  	
  Its:

  	
  CEO

  	
   

  
	
  SIGNATURE OF

  	
   

  	
  TITLE (if applicable)

  
									

 

US
PATRIOT ACT NOTIFICATION

IMPORTANT INFORMATION ABOUT
PROCEDURES

FOR OPENING A NEW ACCOUNT.

To help the government
fight the funding of terrorism and money laundering activities, Federal law
requires all financial institutions to obtain, verify, and record information
that identifies each person or entity that opens an account, including any
deposit account, treasury management account, loan, other extension of credit,
or other financial services product. What this means for Borrower: When
Borrower opens an account, if Borrower is an individual, Bank will ask for
Borrower’s name, taxpayer identification number, residential address, date of
birth, and other information that will allow Bank to identify Borrower, and, if
Borrower is not an individual, Bank will ask for Borrower’s name, taxpayer
identification number, business address, and other information that will allow
Bank to identify Borrower. Bank may also ask, if Borrower is an individual, to
see Borrower’s driver’s license or other identifying documents, and, if
Borrower is not an individual, to see Borrower’s legal organizational documents
or other identifying documents.

	
  RECEIPT ACKNOWLEDGED:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  CRDENTIA CORP.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ James D. Durham

  	
   

  
	
   

  	
   

  	
   

  
	
  Its:

  	
  CEO

  	
   

  
	
   

  	
   

  	
   

  
	
  Date: 

  	
  January 19, 2007

  	
   

  
							

 

	
  

  	
   

  	
  Borrower’s Telephone and Facsimile Authorization

  

 

	
  Obligor Number:

  	
   

  	
  Date: January 19, 2007

  
	
   

  	
   

  	
   

  
	
  Assignment Unit: 

  	
   

  	
  Obligation Number: 

  

The
undersigned confirms certain borrowing arrangements pursuant to and subject to
the terms of the $2,400,000 Master Revolving Note, and all renewals,
extensions, modifications, and/or substitutions thereof (the “Note”) dated
January 19, 2007, executed and delivered by the undersigned to Comerica Bank (“Bank”).

Until
notice to the contrary to the undersigned, Bank has agreed that advances under
the Note may be requested from time to time at the discretion of the
undersigned by telephone or facsimile transmission. Immediately upon receipt
from time to time of such telephone request or facsimile transmission from the
undersigned, Bank is authorized to lend and credit such sums of money as
requested to any of the following accounts or any other account with Bank
designated by the undersigned (together with the Security Code) (such
account(s) referred to as “Designated Account(s)”)

 

 

Bank
may rely on receipt of the Security Code as proof that the caller or sender is
authorized to make the request for advance, repayment, change of Security Code
on Comerica’s Flexline System, or change of Designated Account(s) on behalf of
the undersigned.

The
undersigned acknowledges that borrowings under the Note may be repaid from time
to time at the election of the undersigned, but subject to the terms of the
Note and any related agreement with Bank, upon receipt of instructions to do so
sent from the undersigned to Bank by telephone or facsimile transmission
(together with the Security Code and the Designated Account(s)). Repayment may
be effected (in whole or in part) by debiting any account designated above (or
designated in compliance with the above paragraph) in accordance with the
undersigned’s instructions (together with the Security Code). The undersigned
shall remain fully responsible for any amounts outstanding under the Note if
the undersigned’s accounts with Bank are insufficient for the repayment of the
Note. All requests for payments are to be against collected funds.

The
undersigned acknowledges that if Bank makes an advance or effects a repayment
based on a request made by telephone or facsimile transmission, it shall be for
the convenience of the undersigned and all risks involved in the use of this
procedure shall be borne by the undersigned, and the undersigned expressly
agrees to indemnify and hold Bank harmless therefor. Without limitation of the
foregoing, the undersigned acknowledges that Bank shall have no duty to confirm
the authority of anyone requesting an advance or repayment by telephone or
facsimile transmission, and further that Bank has advised the undersigned to protect
and safeguard the Security Code to prevent its unauthorized use. The
undersigned assumes any losses or damages whatsoever which may occur or arise
out of its failure to protect and safeguard the Security Code or out of its
unauthorized use.

 

	
  Borrower(s):

  	
   

  	
  CRDENTIA CORP.

  
	
   

  	
   

  	
   

  
	
  Address:

  	
   

  	
  5001 LBJ FWY Suite 850 

  Dallas, Texas 75244-6156

  

 

	
  CRDENTIA CORP.

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ James D. Durham

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Signature Of

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Its:

  	
  CEO

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
																	

Comerica
Flexline customers will enter their Security Code directly into Comerica’s
Flexline system. For customers desiring to utilize a Security Code outside of
the Flexline system, please enter your Security Code below.

Security Code: 

 2

Comerica Bank

January 19, 2007

Crdentia Corp.

5001 LBJ FWY Suite 850

Dallas, Texas 75244-6156

This Letter
Agreement is entered into by and between Comerica Bank (“Bank”) and the
undersigned party as of this 19 day of January, 2007.

The undersigned
and Bank agree that the following Reference Provision shall be made a part of
any agreement, instrument, or document made or entered into by the undersigned
with or in favor of Bank (collectively, the “Agreement”) and is hereby
incorporated into any such Agreement by this reference.

Reference Provision.

a.    In the event that the Jury
Trial Waiver provision contained in the Agreement is not enforceable, the
parties elect to proceed under this Reference Provision.

b.    With the exception of the
items specified in clause (c), below, any controversy, dispute or claim (each,
a “Claim”) between the parties arising out of or relating to the Agreement will
be resolved by a reference proceeding in California in accordance with the
provisions of Section 638 et seq. of
the California Code of Civil Procedure (“CCP”), or their successor sections,
which shall constitute the exclusive remedy for the resolution of any Claim,
including whether the Claim is subject to the reference proceeding. Except as
otherwise provided in the Agreement, venue for the reference proceeding will be
in the state or federal court in the county or district where venue is
otherwise appropriate under applicable law (the “Court”).

c.    The matters that shall not be
subject to a reference are the following: (i) non-judicial foreclosure of any
security interests in real or personal property, (ii) exercise of self-help
remedies (including, without limitation, set-off), (iii) appointment of a
receiver and (iv) temporary, provisional or ancillary remedies (including,
without limitation, writs of attachment, writs of possession, temporary
restraining orders or preliminary injunctions). This Agreement does not limit
the right of any party to exercise or oppose any of the rights and remedies
described in clauses (i) and (ii) or to seek or oppose from a court of
competent jurisdiction any of the items described in clauses (iii) and (iv).
The exercise of, or opposition to, any of those items does not waive the right
of any party to a reference pursuant to this Agreement.

d.    The referee shall be a retired
judge or justice selected by mutual written agreement of the parties. If the
parties do not agree within ten (10) days of a written request to do so by any
party, then, upon request of any party, the referee shall be selected by the
Presiding Judge of the Court (or his or her representative). A request for
appointment of a referee may be heard on an ex
parte or expedited basis, and the
parties agree that irreparable harm would result if ex parte relief is not granted. Pursuant to CCP § 170.6,
each party shall have one peremptory challenge to the referee selected by the
Presiding Judge of the Court (or his or her representative).

e.    The parties agree that time is
of the essence in conducting the reference proceedings. Accordingly, the
referee shall be requested, subject to change in the time periods specified
herein for good cause shown, to (a) set the matter for a status and
trial-setting conference within fifteen (15) days after the date of selection
of the referee, (b) if practicable, try all issues of law or fact within one
hundred twenty (120) days after the date of the conference and (c) report a
statement of decision within twenty (20) days after the matter has been
submitted for decision.

f.     The referee will have power
to expand or limit the amount and duration of discovery. The referee may set or
extend discovery deadlines or cutoffs for good cause, including a party’s
failure to provide requested discovery for any reason whatsoever. Unless
otherwise ordered, no party shall be entitled to “priority” in conducting
discovery, depositions may be taken by either party upon seven (7) days written
notice, and all other discovery shall be responded to within fifteen (15) days
after service. All disputes relating to

discovery which cannot be resolved by the parties
shall be submitted to the referee whose decision shall be final and binding.

g.    Except as expressly set forth
in this Agreement, the referee shall determine the manner in which the
reference proceeding is conducted including the time and place of hearings, the
order of presentation of evidence, and all other questions that arise with
respect to the course of the reference proceeding. All proceedings and hearings
conducted before the referee, except for trial, shall be conducted without a
court reporter, except that when any party so requests, a court reporter will
be used at any hearing conducted before the referee, and the referee will be
provided a courtesy copy of the transcript. The party making such a request
shall have the obligation to arrange for and pay the court reporter. Subject to
the referee’s power to award costs to the prevailing party, the parties will
equally share the cost of the referee and the court reporter at trial.

h.    The referee shall be required
to determine all issues in accordance with existing case law and the statutory
laws of the State of California. The rules of evidence applicable to
proceedings at law in the State of California will be applicable to the
reference proceeding. The referee shall be empowered to enter equitable as well
as legal relief, enter equitable orders that will be binding on the parties and
rule on any motion which would be authorized in a trial, including without
limitation motions for summary judgment or summary adjudication. The referee
shall issue a decision at the close of the reference proceeding which disposes
of all claims of the parties that are the subject of the reference. Pursuant to
CCP § 644, such decision shall be entered by the Court as a judgment or an order
in the same manner as if the action had been tried by the Court and any such
decision will be final, binding and conclusive. The parties reserve the right
to appeal from the final judgment or order or from any appealable decision or
order entered by the referee. The parties reserve the right to findings of
fact, conclusions of laws, a written statement of decision, and the right to
move for a new trial or a different judgment, which new trial, if granted, is
also to be a reference proceeding under this provision.

i.     If the enabling legislation
which provides for appointment of a referee is repealed (and no successor
statute is enacted), any dispute between the parties that would otherwise be
determined by reference procedure will be resolved and determined by
arbitration. The arbitration will be conducted by a retired judge or Justice,
in accordance with the California Arbitration Act §1280 through §1294.2 of the
CCP as amended from time to time. The limitations with respect to discovery set
forth above shall apply to any such arbitration proceeding.

j.     THE
PARTIES RECOGNIZE AND AGREE THAT ALL DISPUTES RESOLVED UNDER THIS REFERENCE
PROVISION WILL BE DECIDED BY A REFEREE AND NOT BY A JURY. AFTER CONSULTING (OR
HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF THEIR OWN CHOICE, EACH
PARTY KNOWINGLY AND VOLUNTARILY, AND FOR THE MUTUAL BENEFIT OF ALL PARTIES,
AGREES THAT THIS REFERENCE PROVISION WILL APPLY TO ANY CONTROVERSY, DISPUTE OR
CLAIM BETWEEN OR AMONG THEM WHICH ARISES OUT OF OR IS RELATED TO THE AGREEMENT.

	
  COMERICA BANK

  	
   

  	
   

  	
   

  	
  CRDENTIA CORP.

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Nina L. Cortez

  	
   

  	
   

  	
   

  	
  By:

  	
  /s/ James D. Durham

  	 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
  VICE PRESIDENT

  	
   

  	
   

  	
   

  	
  Title:

  	
  CEO

  
																		

 

 2

SECURITY
AGREEMENT - PLEDGE

THIS SECURITY
AGREEMENT PLEDGE (this “Agreement”), dated as of January 19, 2007, is
entered into by and between JAMES DURHAM, an individual (the “Pledgor”), and
COMERICA BANK, a Michigan banking corporation (the “Secured Party”).

RECITALS:

WHEREAS, CRDENTIA
CORP., a Delaware corporation (“Borrower”) has executed and delivered to
Secured Party a certain $2,400,000 Revolving Credit Note dated as of the date
hereof (as the same may be from time to time hereafter amended or supplemented
and together with all other agreements, instruments and documents executed by
and between Secured Party and Pledgor in connection therewith, the “Loan
Documents”), pursuant to which Secured Party has extended and may hereafter
extend certain financial accommodations to Borrower;

WHEREAS, Pledgor
has agreed to secure Borrower’s obligations under the Loan Documents pursuant
to the terms and provisions of this Agreement;

NOW, THEREFORE, in
consideration of the recitals and for other good and valuable consideration,
receipt of which is hereby acknowledged, Pledgor hereby agrees with Secured
Party as follows:

SECTION 1.  Pledge.

(a)        Unless otherwise defined
herein, each term used in this Agreement which is defined in the California
Uniform Commercial Code, as amended from time to time, (the “Code”)
shall have the meaning set forth herein.

(b)       Pledgor hereby pledges and
grants to Secured Party a first priority lien on and security interest in each
and all of the following items of collateral (hereinafter collectively referred
to as the “Collateral”):

(i)        All of Pledgor’s right,
title and interest, including the right to receive all payments of principal
and interest, in and to that certain $600,000.00 certificate of deposit,
#385107235454 with Bank, together with any and all additions, renewals,
replacements, rollovers, reinvestments or substitutions thereof or therefor
(the “Certificates”); and

(ii)       All proceeds of the
Certificates, including all rights, benefits, principal payments, interest
payments, dividends, distributions, premiums, profits, documents, accounts,
instruments, general intangibles, deposit accounts, money and whatever other
tangible and intangible property is received by the Pledgor upon the
liquidation, sale or other disposition of the Certificates, or the proceeds
thereof.

(c)       This Agreements secures,
and the Collateral is security for, the prompt and complete payment of any and
all debts, liabilities, obligations (including the obligations of Borrower
under the Loan Documents), covenants and duties owing by Borrower to Secured

Security Agreement (James Durham)

 1
 

Party of any kind and
description, whether direct or indirect, absolute or contingent, due or to
become due, now existing or hereafter arising under this Agreement or the Loan
Documents, and further including all costs, fees, and expenses which Pledgor
and/or Borrower is required to pay or reimburse by this Agreement or the Loan
Documents by law or otherwise (collectively, the “Obligations”).

(d)       Pledgor further agrees to
execute and deliver to Secured Party, or to such other party as Secured Party
shall direct, in form and substance as Secured Party shall reasonably request,
all security agreements, control agreements, assignments, financing statements,
instructions, instruments, notices, and other documents or agreements and to
take all further action, at the expense of Pledgor, from time to time
reasonably requested by Secured Party in order to maintain a first priority
perfected security interest in the Collateral in favor of Secured Party or to
enable Secured Party to exercise and enforce its rights and remedies hereunder
with respect to the Collateral, or to effect a transfer of the Collateral or
any part thereof. Pledgor shall take all steps necessary to ensure that all
certificates (including certificated securities) or instruments representing or
evidencing the Collateral, if any, shall be delivered to and held by Secured
Party pursuant hereto and shall be in suitable form for transfer or assignment
in blank, all in form and substance satisfactory to Secured Party.

SECTION 2.  Payments on the Certificates.

(a)       Prior to the occurrence of
an Event of Default hereunder, Pledgor shall be entitled to receive payments of
interest, dividends, or other income made on the Certificates.

(b)       If, after the occurrence
and continuance of an Event of Default hereunder, Pledgor shall become entitled
to receive any principal, interest or premium payment in respect of the
Certificates, then Pledgor shall be deemed to have accepted the same as Secured
Party’s agent, shall hold such payments in trust on behalf of Secured Party,
and shall immediately deliver all such payments to Secured Party. All sums of
money which are received by Secured Party in respect of the Certificates
pursuant to this provision shall be deemed collections under Section 9608 of
the Code and shall be credited against the Obligations.

SECTION 3.  Release of Collateral.

(a)       At such time as all of the
Obligations under the Loan Documents have been fully and finally satisfied, and
Secured Party’s obligation to provide extensions of credit thereunder have
terminated, and Borrower is no longer obligated to Secured Party under the Loan
Documents, this Agreement (and the liens granted hereunder) shall automatically
terminate.

SECTION 4.  Representations,  Warranties, and Covenants of Pledgor.

Pledgor
represents, warrants, and covenants to Secured Party that:

(a)       The Collateral is owned by
Pledgor and is not subject to any restrictions on transfer or pledge;

 2
 

(b)       Pledgor has full power,
authority, and legal right to pledge all of its right, title, and interest in
and to the Collateral pursuant to this Agreement;

(c)       This Agreement has been
duly authorized, executed, and delivered by Pledgor and constitutes a legal,
valid, and binding obligation of Pledgor enforceable in accordance with its
terms except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors’ rights
generally and by general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law);

(d)       No consent of any other
party (including, without limitation, other creditors of Pledgor) and no
consent, license, permit, approval, or authorization of, exemption by, notice or
report to, or registration, filing, or declaration with, any governmental
authority, domestic or foreign, is required to be obtained by Pledgor in
connection with the execution, delivery, or performance of this Agreement;

(e)       The execution, delivery,
and performance by Pledgor of this Agreement requires no action by or in
respect of, or filing with, any governmental body, agency, or official, and
does not violate or contravene, or constitute a default under, any law or
regulation applicable to Pledgor or of any material agreement, judgment,
injunction, order, decree, or other instrument binding upon Pledgor, or result
in the creation or imposition of any lien on any assets of Pledgor except as
contemplated by this Agreement;

(f)        The pledge and assignment
of the Collateral pursuant to this Agreement creates a valid first priority
Lien on and a first priority perfected security interest in the Collateral, not
subject to any prior lien or encumbrance in favor of any third party. Pledgor
covenants that the Collateral is now and at all times shall remain free of all
liens and encumbrances, other than to Secured Party. Pledgor covenants and
agrees that it will defend Secured Party’s right, title and security interest
in and to the Collateral against the claims and demands of all persons;

(g)       Secured Party shall have
control over the Collateral within the meaning of Section 9104 of the Code, and
Pledgor shall have no right to withdraw any of the Collateral, and Pledgor
shall not liquidate, cause or permit to be liquidated, or effect, or cause or
permit to be effected, any other disposition of the Collateral, in whole or in
part;

(h)       Pledgor hereby grants to
Secured Party an irrevocable power of attorney, with full power of substitution
coupled with an interest, to, so long as any of the Obligations (other than
inchoate obligations to indemnify Secured Party) hereunder and under the Loan
Documents shall remain outstanding, execute and endorse, as applicable, on
behalf of Pledgor, such financing statements, continuation financing
statements, security agreements, reports, notices, and all other documents,
instruments and agreements and perform any other acts (including pressing any
claim) in order to: (i) perfect and maintain perfected security interest in the
Collateral; (ii) fully consummate all of the transactions contemplated under
this Agreement and the Loan Documents; and (iii) effect and exercise the rights
and remedies of Secured Party with respect to the Collateral as set forth in
this Agreement.

 3
 

SECTION 5.  No Disposition.

Except in
accordance with the terms of the Loan Documents, without the prior written
consent of Secured Party, Pledgor agrees that it will not sell, assign,
transfer, exchange, or otherwise dispose of, or grant any option with respect
to, the Collateral, nor will it create, incur, or permit to exist any
assessment, pledge, lien, mortgage, hypothecation, security interest, charge,
option, or any other encumbrance with respect to any of the Collateral, any
interest therein, or any proceeds thereof.

SECTION 6.  Obligations of Pledgor
Unconditional.

Pledgor’s duty to
perform and observe the agreements and covenants on its part contained herein
shall be absolute and unconditional.

SECTION 7.  Events of Default. The
occurrence and continuance of any Event of Default under the Loan Documents
shall be an “Event of Default” hereunder.

SECTION 8.  Remedies Upon Default.

(a)       If an Event of Default
should occur and continue, Secured Party shall have all of the rights and
remedies of a secured party under the Code, under this Agreement, and under
applicable law, and available in equity. In addition, Secured Party shall have
the right, to the full extent permitted by law, and Pledgor shall take such
action necessary or appropriate to give effect to such right and to give
consents, ratifications, and waivers thereto, to take any other action with
respect to the Collateral as if Secured Party were the absolute and sole owner
thereof including, without limitation, the right to liquidate and/or convert to
cash all or any part of the Collateral (including Certificates of Deposit) and
to, at Bank’s option, apply cash proceeds thereof to Obligations then owing
and/or to hold the proceeds thereof as continuing security for Obligations
whether such Obligations are then due.

(b)       If an Event of Default
should occur and continue, Secured Party shall have the right to exercise any
and all rights and remedies provided by this Agreement (including application
of any cash Collateral, to the repayment of Borrower’s obligations owing to
Secured Party hereunder and under the Loan Documents), to sell the Collateral,
or any part thereof, at public or private sale or on any securities exchange,
for cash, upon credit, or for future delivery, and at such price or prices as
Secured Party may deem commercially reasonable. Secured Party may purchase any
or all of the Collateral so sold at any public sale (or, with respect to any
portion of the Collateral which is of a type customarily sold in a recognized
market or is of a type which is the subject of widely distributed standard
price quotations, at any private sale) and thereafter hold the same free from
any right or claim of whatsoever kind. Secured Party is authorized, at any such
sale, if it deems it advisable to do so, to restrict the prospective bidders or
purchasers of any of the Collateral to persons who will represent and agree
that they are purchasing for their own account for investment, and not with a
view to the distribution or sale of any of the Collateral. To the extent that
any portion of the Collateral is not of a type customarily sold on a recognized
market, Secured Party shall give Pledgor at least ten (10) days written notice
of its intention to make any such public or private sale of that portion of the
Collateral.

 4
 

(c)       Pledgor hereby agrees that
any disposition of Collateral by way of a private placement or other method
which in the reasonable opinion of counsel for Secured Party is required or
advisable under federal and state securities laws shall be deemed to be
commercially reasonable. Pledgor also agrees that, except for duties set forth
in the Code, Secured Party has no duty to sell or otherwise dispose of the
Collateral, either before or after an Event of Default, whether upon the
request of Pledgor or otherwise.

(d)       Pledgor agrees to pay to
Secured Party, promptly on demand following any Event of Default, such
reasonable amount of costs, fees and expenses (all of which shall constitute
obligations) incurred by Secured Party in connection with the exercise of its
rights under this Section 8, including reasonable attorneys’ fees,
disbursements, and legal expenses, whether or not suit is brought.

(e)       Secured Party’s remedies
under this Agreement are cumulative and in addition to all other remedies which
it may possess, at law, in equity, under any other agreement, or otherwise.

SECTION 9.  No Waiver.

No failure on the
part of Secured Party to exercise, and no delay in exercising, any right,
power, or remedy hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right, power, or remedy by Secured Party
preclude any other or further exercise thereof or the exercise of any other
right, power, or remedy.

SECTION 10.  Miscellaneous.

(a)       Unless the context of this
Agreement clearly requires otherwise, references to the plural include the
singular and to the singular include the plural, references to any gender
include any other gender, the part includes the whole, the term “including” is
not limiting, and the term “or” has, except where otherwise indicated, the
inclusive meaning represented by the phrase “and/or.” The words “hereof,” “herein,”
“hereby,” “hereunder,” and similar terms in this Agreement refer to this
Agreement as a whole and not to any particular provision of this Agreement.
Article, section, subsection, clause, exhibit and schedule references are to
this Agreement, unless otherwise specified. Initially capitalized terms
contained in this Agreement and not separately defined herein shall have the
meanings ascribed thereto in the LCRA.

(b)       Any provision of this
Agreement which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or affecting
the validity or enforceability of such provision in any other jurisdiction.

(c)       This Agreement sets forth
the entire understanding between Pledgor and Secured Party regarding the
subject matter of this Agreement, and all prior agreements or understandings,
if any, regarding the subject matter hereof are merged herein. This Agreement
may not be amended, changed, modified, altered, or terminated except by means
of a writing signed by the parties hereto.

 5
 

(d)       The subject headings and
the sections and subsections of this Agreement are included for purposes of
convenience only and shall not affect the construction or interpretation of any
of its provisions.

(e)       This Agreement may be
signed in counterparts, each of which shall be an original, with the same effect
as if the signatures thereto and hereto were upon the same instrument.

SECTION 11.  CHOICE OF LAW AND VENUE;
JURY TRIAL WAIVER.

(a)       THE VALIDITY OF THIS AGREEMENT, THE CONSTRUCTION, INTERPRETATION, AND
ENFORCEMENT HEREOF, AND THE RIGHTS OF THE PARTIES HERETO WITH RESPECT TO ALL
MATTERS ARISING HEREUNDER OR RELATED HERETO SHALL BE DETERMINED UNDER, GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF
CALIFORNIA, WITHOUT REGARD FOR PRINCIPLES OF CONFLICTS OF LAWS.

(b)       THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION
WITH THIS AGREEMENT SHALL BE TRIED AND LITIGATED ONLY IN THE STATE AND FEDERAL
COURTS LOCATED IN THE STATE OF CALIFORNIA, PROVIDED, HOWEVER,
THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY
BE BROUGHT, AT SECURED PARTY’S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE
SECURED PARTY ELECTS TO BRING SUCH ACTION OR WHERE SUCH COLLATERAL OR OTHER
PROPERTY MAY BE FOUND. THE PLEDGOR AND THE SECURED PARTY WAIVE, TO THE EXTENT
PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE
OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY
PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION.

(c)       THE UNDERSIGNED ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY IS A
CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED UNDER CERTAIN CIRCUMSTANCES. TO
THE EXTENT PERMITTED BY LAW, EACH PARTY, AFTER CONSULTING (OR HAVING HAD THE
OPPORTUNITY TO CONSULT) WITH COUNSEL OF ITS, HIS OR HER CHOICE, KNOWINGLY AND
VOLUNTARILY, AND FOR THE MUTUAL BENEFIT OF ALL PARTIES, WAIVES ANY RIGHT TO
TRIAL BY JURY IN THE EVENT OF LITIGATION ARISING OUT OF OR RELATED TO THIS
AGREEMENT OR ANY OTHER DOCUMENT, INSTRUMENT OR AGREEMENT BETWEEN THE
UNDERSIGNED PARTIES.

SECTION 12.  JUDICIAL REFERENCE PROVISION.

(a)       In the event the Jury Trial
Waiver set forth above in Section 11(c) above is not enforceable, the parties
elect to proceed under this Judicial Reference Provision.

(b)       With the exception of the
items specified in clause (c), below, any controversy, dispute or claim (each,
a “Claim”) between the parties arising out of or relating to

 6
 

this Agreement or any
other document, instrument or agreement between the undersigned parties
(collectively in this Section, the “Comerica Documents”), will be resolved by a
reference proceeding in California in accordance with the provisions of
Sections 638 et seq. of the California Code of Civil Procedure (“CCP”), or
their successor sections, which shall constitute the exclusive remedy for the
resolution of any Claim, including whether the Claim is subject to the
reference proceeding. Except as otherwise provided in the Comerica Documents,
venue for the reference proceeding will be in the state or federal court in the
county or district where the real property involved in the action, if any, is
located or in the state or federal court in the county or district where venue
is otherwise appropriate under applicable law (the “Court”).

(c)       The matters that shall not
be subject to a reference are the following: (i) nonjudicial foreclosure of any
security interests in real or personal property, (ii) exercise of self-help
remedies (including, without limitation, set-off), (iii) appointment of a
receiver and (iv) temporary, provisional or ancillary remedies (including,
without limitation, writs of attachment, writs of possession, temporary
restraining orders or preliminary injunctions). This reference provision does
not limit the right of any party to exercise or oppose any of the rights and
remedies described in clauses (i) and (ii) or to seek or oppose from a court of
competent jurisdiction any of the items described in clauses (iii) and (iv).
The exercise of, or opposition to, any of those items does not waive the right
of any party to a reference pursuant to this reference provision as provided
herein.

(d)       The referee shall be a
retired judge or justice selected by mutual written agreement of the parties.
If the parties do not agree within ten (10) days of a written request to do so
by any party, then, upon request of any party, the referee shall be selected by
the Presiding Judge of the Court (or his or her representative). A request for
appointment of a referee may be heard on an ex parte or expedited basis, and
the parties agree that irreparable harm would result if ex parte relief is not
granted. Pursuant to CCP § 170.6, each party shall have one peremptory
challenge to the referee selected by the Presiding Judge of the Court (or his
or her representative).

(e)       The parties agree that time
is of the essence in conducting the reference proceedings. Accordingly, the
referee shall be requested, subject to change in the time periods specified
herein for good cause shown, to (i) set the matter for a status and
trial-setting conference within fifteen (15) days after the date of selection
of the referee, (ii) if practicable, try all issues of law or fact within one
hundred twenty (120) days after the date of the conference and (iii) report a
statement of decision within twenty (20) days after the matter has been submitted
for decision.

(f)        The referee will have
power to expand or limit the amount and duration of discovery. The referee may
set or extend discovery deadlines or cutoffs for good cause, including a party’s
failure to provide requested discovery for any reason whatsoever. Unless
otherwise ordered based upon good cause shown, no party shall be entitled to “priority”
in conducting discovery, depositions may be taken by either party upon seven
(7) days written notice, and all other discovery shall be responded to within
fifteen (15) days after service. All disputes relating to discovery which
cannot be resolved by the parties shall be submitted to the referee whose
decision shall be final and binding.

 7
 

(g)       Except as expressly set
forth herein, the referee shall determine the manner in which the reference
proceeding is conducted including the time and place of hearings, the order of
presentation of evidence, and all other questions that arise with respect to
the course of the reference proceeding. All proceedings and hearings conducted
before the referee, except for trial, shall be conducted without a court
reporter, except that when any party so requests, a court reporter will be used
at any hearing conducted before the referee, and the referee will be provided a
courtesy copy of the transcript. The party making such a request shall have the
obligation to arrange for and pay the court reporter. Subject to the referee’s
power to award costs to the prevailing party, the parties will equally share
the cost of the referee and the court reporter at trial.

(h)       The referee shall be
required to determine all issues in accordance with existing case law and the
statutory laws of the State of California. The rules of evidence applicable to
proceedings at law in the State of California will be applicable to the
reference proceeding. The referee shall be empowered to enter equitable as well
as legal relief, enter equitable orders that will be binding on the parties and
rule on any motion which would be authorized in a court proceeding, including
without limitation motions for summary judgment or summary adjudication. The
referee shall issue a decision at the close of the reference proceeding which
disposes of all claims of the parties that are the subject of the reference.
Pursuant to CCP § 644, such decision shall be entered by the Court as a
judgment or an order in the same manner as if the action had been tried by the
Court and any such decision will be final, binding and conclusive. The parties
reserve the right to appeal from the final judgment or order or from any
appealable decision or order entered by the referee. The parties reserve the
right to findings of fact, conclusions of laws, a written statement of
decision, and the right to move for a new trial or a different judgment, which
new trial, if granted, is also to be a reference proceeding under this
provision.

(i)        If the enabling
legislation which provides for appointment of a referee is repealed (and no
successor statute is enacted), any dispute between the parties that would
otherwise be determined by reference procedure will be resolved and determined
by arbitration. The arbitration will be conducted by a retired judge or
justice, in accordance with the California Arbitration Act §1280 through
§1294.2 of the CCP as amended from time to time. The limitations with respect
to discovery set forth above shall apply to any such arbitration proceeding.

(j)        THE PARTIES RECOGNIZE AND
AGREE THAT ALL CONTROVERSIES, DISPUTES AND CLAIMS RESOLVED UNDER THIS REFERENCE
PROVISION WILL BE DECIDED BY A REFEREE AND NOT BY A JURY. AFTER CONSULTING (OR
HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF ITS, HIS OR HER OWN
CHOICE, EACH PARTY KNOWINGLY AND VOLUNTARILY, AND FOR THE MUTUAL BENEFIT OF ALL
PARTIES, AGREES THAT THIS REFERENCE PROVISION WILL APPLY TO ANY CONTROVERSY,
DISPUTE OR CLAIM BETWEEN OR AMONG THEM ARISING OUT OF OR IN ANY WAY RELATED TO,
THIS AGREEMENT OR THE OTHER COMERICA DOCUMENTS.

 8
 

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

	
  

  	
   

  	
   

  	
   

  	
  “PLEDGOR”

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  /s/ James Durham

  
	
   

  	
   

  	
   

  	
   

  	
  James Durham, an
  individual

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  “SECURED PARTY”

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  COMERICA BANK

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  By

  	
  /s/ Nina L. Cortez

  
	
   

  	
   

  	
   

  	
   

  	
  Name:

  	
  NINA L. CORTEZ

  
	
   

  	
   

  	
   

  	
   

  	
  Title:

  	
  VICE PRESIDENT

  
										

 

 9

SECURITY
AGREEMENT - PLEDGE

THIS SECURITY
AGREEMENT PLEDGE (this “Agreement”), dated as of January       ,
2007, is entered into by and between C. FRED TONEY, an individual (the “Pledgor”),
and COMERICA BANK, a Michigan banking corporation (the “Secured Party”).

RECITALS:

WHEREAS, CRDENTIA CORP., a Delaware corporation (“Borrower”) has
executed and delivered to Secured Party a certain $2,400,000 Revolving Credit
Note dated as of the date hereof (as the same may be from time to time
hereafter amended or supplemented and together with all other agreements,
instruments and documents executed by and between Secured Party and Pledgor in
connection therewith, the “Loan Documents”), pursuant to which Secured
Party has extended and may hereafter extend certain financial accommodations to
Borrower;

WHEREAS, Pledgor has agreed to secure Borrower’s obligations under the
Loan Documents pursuant to the terms and provisions of this Agreement;

NOW, THEREFORE, in consideration of the recitals and for other good and
valuable consideration, receipt of which is hereby acknowledged, Pledgor hereby
agrees with Secured Party as follows:

SECTION 1.  Pledge.

(a)       Unless otherwise defined
herein, each term used in this Agreement which is defined in the California
Uniform Commercial Code, as amended from time to time, (the “Code”)
shall have the meaning set forth herein.

(b)       Pledgor hereby pledges
and grants to Secured Party a first priority lien on and security interest in
each and all of the following items of collateral (hereinafter collectively
referred to as the “Collateral”):

(i)        All of Pledgor’s right,
title and interest, including the right to receive all payments of principal
and interest, in and to that certain $1,125,000.00 certificate of deposit,
#385107235462 with Bank, together with any and all additions, renewals,
replacements, rollovers, reinvestments or substitutions thereof or therefor
(the “Certificates”); and

(ii)       All proceeds of the
Certificates, including all rights, benefits, principal payments, interest
payments, dividends, distributions, premiums, profits, documents, accounts,
instruments, general intangibles, deposit accounts, money and whatever other
tangible and intangible property is received by the Pledgor upon the
liquidation, sale or other disposition of the Certificates, or the proceeds
thereof.

(c)       This Agreements secures,
and the Collateral is security for, the prompt and complete payment of any and
all debts, liabilities, obligations (including the obligations of Borrower
under the Loan Documents), covenants and duties owing by Borrower to Secured

Security Agreement (C. Fred Toney)

 1
 

Party of any kind and
description, whether direct or indirect, absolute or contingent, due or to
become due, now existing or hereafter arising under this Agreement or the Loan
Documents, and further including all costs, fees, and expenses which Pledgor
and/or Borrower is required to pay or reimburse by this Agreement or the Loan
Documents by law or otherwise (collectively, the “Obligations”).

(d)       Pledgor further agrees to
execute and deliver to Secured Party, or to such other party as Secured Party
shall direct, in form and substance as Secured Party shall reasonably request,
all security agreements, control agreements, assignments, financing statements,
instructions, instruments, notices, and other documents or agreements and to
take all further action, at the expense of Pledgor, from time to time
reasonably requested by Secured Party in order to maintain a first priority
perfected security interest in the Collateral in favor of Secured Party or to
enable Secured Party to exercise and enforce its rights and remedies hereunder
with respect to the Collateral, or to effect a transfer of the Collateral or
any part thereof. Pledgor shall take all steps necessary to ensure that all
certificates (including certificated securities) or instruments representing or
evidencing the Collateral, if any, shall be delivered to and held by Secured
Party pursuant hereto and shall be in suitable form for transfer or assignment
in blank, all in form and substance satisfactory to Secured Party.

SECTION 2.  Payments on the
Certificates.

(a)       Prior to the occurrence
of an Event of Default hereunder, Pledgor shall be entitled to receive payments
of interest, dividends, or other income made on the Certificates.

(b)       If, after the occurrence
and continuance of an Event of Default hereunder, Pledgor shall become entitled
to receive any principal, interest or premium payment in respect of the
Certificates, then Pledgor shall be deemed to have accepted the same as Secured
Party’s agent, shall hold such payments in trust on behalf of Secured Party,
and shall immediately deliver all such payments to Secured Party. All sums of
money which are received by Secured Party in respect of the Certificates
pursuant to this provision shall be deemed collections under Section 9608 of
the Code and shall be credited against the Obligations.

SECTION 3.  Release of
Collateral.

(a)       At such time as all of
the Obligations under the Loan Documents have been fully and finally satisfied,
and Secured Party’s obligation to provide extensions of credit thereunder have
terminated, and Borrower is no longer obligated to Secured Party under the Loan
Documents, this Agreement (and the liens granted hereunder) shall automatically
terminate.

SECTION 4.  Representations, Warranties, and Covenants
of Pledgor.

Pledgor
represents, warrants, and covenants to Secured Party that:

(a)       The Collateral is owned
by Pledgor and is not subject to any restrictions on transfer or pledge;

 2
 

(b)       Pledgor has full power,
authority, and legal right to pledge all of its right, title, and interest in
and to the Collateral pursuant to this Agreement;

(c)       This Agreement has been
duly authorized, executed, and delivered by Pledgor and constitutes a legal,
valid, and binding obligation of Pledgor enforceable in accordance with its
terms except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors’ rights
generally and by general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law);

(d)       No consent of any other
party (including, without limitation, other creditors of Pledgor) and no
consent, license, permit, approval, or authorization of, exemption by, notice
or report to, or registration, filing, or declaration with, any governmental
authority, domestic or foreign, is required to be obtained by Pledgor in
connection with the execution, delivery, or performance of this Agreement;

(e)       The execution, delivery,
and performance by Pledgor of this Agreement requires no action by or in
respect of, or filing with, any governmental body, agency, or official, and
does not violate or contravene, or constitute a default under, any law or
regulation applicable to Pledgor or of any material agreement, judgment,
injunction, order, decree, or other instrument binding upon Pledgor, or result
in the creation or imposition of any lien on any assets of Pledgor except as
contemplated by this Agreement;

(f)        The pledge and assignment
of the Collateral pursuant to this Agreement creates a valid first priority
Lien on and a first priority perfected security interest in the Collateral, not
subject to any prior lien or encumbrance in favor of any third party. Pledgor
covenants that the Collateral is now and at all times shall remain free of all
liens and encumbrances, other than to Secured Party. Pledgor covenants and
agrees that it will defend Secured Party’s right, title and security interest
in and to the Collateral against the claims and demands of all persons;

(g)       Secured Party shall have
control over the Collateral within the meaning of Section 9104 of the Code, and
Pledgor shall have no right to withdraw any of the Collateral, and Pledgor
shall not liquidate, cause or permit to be liquidated, or effect, or cause or
permit to be effected, any other disposition of the Collateral, in whole or in
part;

(h)       Pledgor hereby grants to
Secured Party an irrevocable power of attorney, with full power of substitution
coupled with an interest, to, so long as any of the Obligations (other than
inchoate obligations to indemnify Secured Party) hereunder and under the Loan
Documents shall remain outstanding, execute and endorse, as applicable, on
behalf of Pledgor, such financing statements, continuation financing
statements, security agreements, reports, notices, and all other documents,
instruments and agreements and perform any other acts (including pressing any
claim) in order to: (i) perfect and maintain perfected security interest in the
Collateral; (ii) fully consummate all of the transactions contemplated under
this Agreement and the Loan Documents; and (iii) effect and exercise the rights
and remedies of Secured Party with respect to the Collateral as set forth in
this Agreement.

 3
 

SECTION
5.  No Disposition.

Except in
accordance with the terms of the Loan Documents, without the prior written
consent of Secured Party, Pledgor agrees that it will not sell, assign,
transfer, exchange, or otherwise dispose of, or grant any option with respect
to, the Collateral, nor will it create, incur, or permit to exist any
assessment, pledge, lien, mortgage, hypothecation, security interest, charge,
option, or any other encumbrance with respect to any of the Collateral, any
interest therein, or any proceeds thereof.

SECTION 6.  Obligations of Pledgor Unconditional.

Pledgor’s duty to perform
and observe the agreements and covenants on its part contained herein shall be
absolute and unconditional.

SECTION 7.  Events of Default. The occurrence and
continuance of any Event of Default under the Loan Documents shall be an “Event
of Default” hereunder.

SECTION 8.  Remedies
Upon Default.

(a)       If an Event of Default should occur and
continue, Secured Party shall have all of the rights and remedies of a secured
party under the Code, under this Agreement, and under applicable law, and
available in equity. In addition, Secured Party shall have the right, to the
full extent permitted by law, and Pledgor shall take such action necessary or
appropriate to give effect to such right and to give consents, ratifications,
and waivers thereto, to take any other action with respect to the Collateral as
if Secured Party were the absolute and sole owner thereof including, without
limitation, the right to liquidate and/or convert to cash all or any part of
the Collateral (including Certificates of Deposit) and to, at Bank’s option,
apply cash proceeds thereof to Obligations then owing and/or to hold the
proceeds thereof as continuing security for Obligations whether such
Obligations are then due.

(b)       If an Event of Default should occur and
continue, Secured Party shall have the right to exercise any and all rights and
remedies provided by this Agreement (including application of any cash
Collateral, to the repayment of Borrower’s obligations owing to Secured Party
hereunder and under the Loan Documents), to sell the Collateral, or any part
thereof, at public or private sale or on any securities exchange, for cash,
upon credit, or for future delivery, and at such price or prices as Secured Party
may deem commercially reasonable. Secured Party may purchase any or all of the
Collateral so sold at any public sale (or, with respect to any portion of the
Collateral which is of a type customarily sold in a recognized market or is of
a type which is the subject of widely distributed standard price quotations, at
any private sale) and thereafter hold the same free from any right or claim of
whatsoever kind. Secured Party is authorized, at any such sale, if it deems it
advisable to do so, to restrict the prospective bidders or purchasers of any of
the Collateral to persons who will represent and agree that they are purchasing
for their own account for investment, and not with a view to the distribution
or sale of any of the Collateral. To the extent that any portion of the
Collateral is not of a type customarily sold on a recognized market, Secured
Party shall give Pledgor at least ten (10) days written notice of its intention
to make any such public or private sale of that portion of the Collateral.

 4
 

(c)       Pledgor hereby
agrees that any disposition of Collateral by way of a private placement or
other method which in the reasonable opinion of counsel for Secured Party is
required or advisable under federal and state securities laws shall be deemed
to be commercially reasonable. Pledgor also agrees that, except for duties set
forth in the Code, Secured Party has no duty to sell or otherwise dispose of
the Collateral, either before or after an Event of Default, whether upon the request of Pledgor or otherwise.

(d)       Pledgor agrees to
pay to Secured Party, promptly on demand following any Event of Default, such
reasonable amount of costs, fees and expenses (all of which shall constitute
obligations) incurred by Secured Party in connection with the exercise of its
rights under this Section 8, including reasonable attorneys’ fees,
disbursements, and legal expenses, whether or not suit is brought.

(e)       Secured Party’s
remedies under this Agreement are cumulative and in addition to all other
remedies which it may possess, at law, in equity, under any other agreement, or
otherwise.

SECTION 9.  No Waiver.

No failure on the part of Secured Party to exercise, and no delay in
exercising, any right, power, or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, power, or
remedy by Secured Party preclude any other or further exercise thereof or the
exercise of any other right, power, or remedy.

SECTION 10.  Miscellaneous.

(a)       Unless the context of
this Agreement clearly requires otherwise, references to the plural include the
singular and to the singular include the plural, references to any gender
include any other gender, the part includes the whole, the term “including” is
not limiting, and the term “or” has, except where otherwise indicated, the
inclusive meaning represented by the phrase “and/or.” The words “hereof,” “herein,”
“hereby,” “hereunder,” and similar terms in this Agreement refer to this
Agreement as a whole and not to any particular provision of this Agreement.
Article, section, subsection, clause, exhibit and schedule references are to
this Agreement, unless otherwise specified. Initially capitalized terms
contained in this Agreement and not separately defined herein shall have the
meanings ascribed thereto in the LCRA.

(b)       Any provision of this
Agreement which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.

(c)       This Agreement sets forth
the entire understanding between Pledgor and Secured Party regarding the
subject matter of this Agreement, and all prior agreements or understandings,
if any, regarding the subject matter hereof are merged herein. This Agreement
may not be amended, changed, modified, altered, or terminated except by means
of a writing signed by the parties hereto.

 5
 

(d)       The subject
headings and the sections and subsections of this Agreement are included for
purposes of convenience only and shall not affect the construction or
interpretation of any of its
provisions.

(e)       This Agreement may
be signed in counterparts, each of which shall be an original, with the same
effect as if the signatures
thereto and hereto were upon the same instrument.

SECTION 11.  CHOICE OF LAW AND
VENUE; JURY TRIAL WAIVER.

(a)       THE VALIDITY OF THIS AGREEMENT, THE CONSTRUCTION, INTERPRETATION, AND
ENFORCEMENT HEREOF, AND THE RIGHTS OF THE PARTIES HERETO WITH RESPECT TO ALL
MATTERS ARISING HEREUNDER OR RELATED HERETO SHALL BE DETERMINED UNDER, GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF
CALIFORNIA, WITHOUT REGARD FOR PRINCIPLES OF CONFLICTS OF LAWS.

(b)       THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH
THIS AGREEMENT SHALL BE TRIED AND LITIGATED ONLY IN THE STATE AND FEDERAL
COURTS LOCATED IN THE STATE OF CALIFORNIA, PROVIDED, HOWEVER,
THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY
BE BROUGHT, AT SECURED PARTY’S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE
SECURED PARTY ELECTS TO BRING SUCH ACTION OR WHERE SUCH COLLATERAL OR OTHER
PROPERTY MAY BE FOUND. THE PLEDGOR AND THE SECURED PARTY WAIVE, TO THE EXTENT
PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE
OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY
PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION.

(c)       THE UNDERSIGNED ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY IS A
CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED UNDER CERTAIN CIRCUMSTANCES. TO
THE EXTENT PERMITTED BY LAW, EACH PARTY, AFTER CONSULTING (OR HAVING HAD THE
OPPORTUNITY TO CONSULT) WITH COUNSEL OF ITS, HIS OR HER CHOICE, KNOWINGLY AND
VOLUNTARILY, AND FOR THE MUTUAL BENEFIT OF ALL PARTIES, WAIVES ANY RIGHT TO
TRIAL BY JURY IN THE EVENT OF LITIGATION ARISING OUT OF OR RELATED TO THIS
AGREEMENT OR ANY OTHER DOCUMENT, INSTRUMENT OR AGREEMENT BETWEEN THE
UNDERSIGNED PARTIES.

SECTION 12.  JUDICIAL REFERENCE
PROVISION.

(a)       In the event the Jury
Trial Waiver set forth above in Section 11 (c) above is not enforceable, the
parties elect to proceed under this Judicial Reference Provision.

(b)       With the exception of the
items specified in clause (c), below, any controversy, dispute or claim (each,
a “Claim”) between the parties arising out of or relating to

 6
 

this Agreement or any
other document, instrument or agreement between the undersigned parties
(collectively in this Section, the “Comerica Documents”), will be resolved by a
reference proceeding in California in accordance with the provisions of
Sections 638 et seq. of the California Code of Civil Procedure (“CCP”), or
their successor sections, which shall constitute the exclusive remedy for the resolution
of any Claim, including whether the Claim is subject to the reference
proceeding. Except as otherwise provided in the Comerica Documents, venue for
the reference proceeding will be in the state or federal court in the county or
district where the real property involved in the action, if any, is located or
in the state or federal court in the county or district where venue is
otherwise appropriate under applicable law (the “Court”).

(c)       The matters that shall
not be subject to a reference are the following: (i) nonjudicial foreclosure of
any security interests in real or personal property, (ii) exercise of self-help
remedies (including, without limitation, set-off), (iii) appointment of a
receiver and (iv) temporary, provisional or ancillary remedies (including,
without limitation, writs of attachment, writs of possession, temporary
restraining orders or preliminary injunctions). This reference provision does
not limit the right of any party to exercise or oppose any of the rights and
remedies described in clauses (i) and (ii) or to seek or oppose from a court of
competent jurisdiction any of the items described in clauses (iii) and (iv).
The exercise of, or opposition to, any of those items does not waive the right
of any party to a reference pursuant to this reference provision as provided
herein.

(d)       The referee shall be a
retired judge or justice selected by mutual written agreement of the parties.
If the parties do not agree within ten (10) days of a written request to do so
by any party, then, upon request of any party, the referee shall be selected by
the Presiding Judge of the Court (or his or her representative). A request for
appointment of a referee may be heard on an ex parte or expedited basis, and
the parties agree that irreparable harm would result if ex parte relief is not
granted. Pursuant to CCP § 170.6, each party shall have one peremptory
challenge to the referee selected by the Presiding Judge of the Court (or his
or her representative).

(e)       The parties agree that
time is of the essence in conducting the reference proceedings. Accordingly,
the referee shall be requested, subject to change in the time periods specified
herein for good cause shown, to (i) set the matter for a status and
trial-setting conference within fifteen (15) days after the date of selection
of the referee, (ii) if practicable, try all issues of law or fact within one
hundred twenty (120) days after the date of the conference and (iii) report a
statement of decision within twenty (20) days after the matter has been
submitted for decision.

(f)        The referee will have
power to expand or limit the amount and duration of discovery. The referee may
set or extend discovery deadlines or cutoffs for good cause, including a party’s
failure to provide requested discovery for any reason whatsoever. Unless
otherwise ordered based upon good cause shown, no party shall be entitled to “priority”
in conducting discovery, depositions may be taken by either party upon seven
(7) days written notice, and all other discovery shall be responded to within
fifteen (15) days after service. All disputes relating to discovery which
cannot be resolved by the parties shall be submitted to the referee whose
decision shall be final and binding.

 7
 

(g)       Except as expressly set
forth herein, the referee shall determine the manner in which the reference
proceeding is conducted including the time and place of hearings, the order of
presentation of evidence, and all other questions that arise with respect to
the course of the reference proceeding. All proceedings and hearings conducted
before the referee, except for trial, shall be conducted without a court
reporter, except that when any party so requests, a court reporter will be used
at any hearing conducted before the referee, and the referee will be provided a
courtesy copy of the transcript. The party making such a request shall have the
obligation to arrange for and pay the court reporter. Subject to the referee’s
power to award costs to the prevailing party, the parties will equally share
the cost of the referee and the court reporter at trial.

(h)       The referee shall be
required to determine all issues in accordance with existing case law and the
statutory laws of the State of California. The rules of evidence applicable to
proceedings at law in the State of California will be applicable to the
reference proceeding. The referee shall be empowered to enter equitable as well
as legal relief, enter equitable orders that will be binding on the parties and
rule on any motion which would be authorized in a court proceeding, including
without limitation motions for summary judgment or summary adjudication. The
referee shall issue a decision at the close of the reference proceeding which
disposes of all claims of the parties that are the subject of the reference. Pursuant
to CCP § 644, such decision shall be entered by the Court as a judgment or an
order in the same manner as if the action had been tried by the Court and any
such decision will be final, binding and conclusive. The parties reserve the
right to appeal from the final judgment or order or from any appealable
decision or order entered by the referee. The parties reserve the right to
findings of fact, conclusions of laws, a written statement of decision, and the
right to move for a new trial or a different judgment, which new trial, if
granted, is also to be a reference proceeding under this provision.

(i)        If the enabling
legislation which provides for appointment of a referee is repealed (and no
successor statute is enacted), any dispute between the parties that would
otherwise be determined by reference procedure will be resolved and determined
by arbitration. The arbitration will be conducted by a retired judge or
justice, in accordance with the California Arbitration Act §1280 through
§1294.2 of the CCP as amended from time to time. The limitations with respect
to discovery set forth above shall apply to any such arbitration proceeding.

(j)        THE PARTIES RECOGNIZE
AND AGREE THAT ALL CONTROVERSIES, DISPUTES AND CLAIMS RESOLVED UNDER THIS
REFERENCE PROVISION WILL BE DECIDED BY A REFEREE AND NOT BY A JURY. AFTER
CONSULTING (OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF ITS, HIS
OR HER OWN CHOICE, EACH PARTY KNOWINGLY AND VOLUNTARILY, AND FOR THE MUTUAL
BENEFIT OF ALL PARTIES, AGREES THAT THIS REFERENCE PROVISION WILL APPLY TO ANY
CONTROVERSY, DISPUTE OR CLAIM BETWEEN OR AMONG THEM ARISING OUT OF OR IN ANY
WAY RELATED TO, THIS AGREEMENT OR THE OTHER COMERICA DOCUMENTS.

 8
 

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

	
  

  	
   

  	
   

  	
   

  	
  “PLEDGOR”

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  /s/ C. Fred
  Toney

  
	
   

  	
   

  	
   

  	
   

  	
  C. Fred Toney,
  an individual

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  “SECURED PARTY” 

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  COMERICA BANK

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  By

  	
  /s/ Nina L. Cortez

  
	
   

  	
   

  	
   

  	
   

  	
  Name:

  	
  NINA L. CORTEZ

  
	
   

  	
   

  	
   

  	
   

  	
  Title:

  	
  VICE PRESIDENT

  
										

 

 9

SECURITY
AGREEMENT - PLEDGE

THIS SECURITY
AGREEMENT PLEDGE (this “Agreement”), dated as of January
   , 2007, is entered into by and between MEDCAP PARTNERS L.P.,
a Delaware limited partnership (the “Pledgor”), and COMERICA BANK, a
Michigan banking corporation (the “Secured Party”).

RECITALS:

WHEREAS, CRDENTIA
CORP., a Delaware corporation (“Borrower”) has executed and delivered to
Secured Party a certain $2,400,000 Revolving Credit Note entered into as of the
date hereof (as the same may be from time to time hereafter amended or
supplemented and together with all other agreements, instruments and documents
executed by and between Secured Party and Borrower in connection therewith, the
“Borrower Documents”), pursuant to which Secured Party has extended and
may hereafter extend certain financial accommodations to Borrower;

WHEREAS, Pledgor
has executed and delivered to Secured Party a certain Guaranty entered into as
of the date hereof (as the same may be from time to time hereafter amended or
supplemented and together with all other agreements, instruments and documents
executed by and between Secured Party and Pledgor in connection therewith, the “Pledgor
Documents”, and together with the Borrower Documents, the “Loan
Documents”),

WHEREAS, Pledgor
has agreed to secure its and the Borrower’s obligations under the Loan
Documents pursuant to the terms and provisions of this Agreement;

NOW, THEREFORE, in
consideration of the recitals and for other good and valuable consideration,
receipt of which is hereby acknowledged, Pledgor hereby agrees with Secured
Party as follows:

SECTION 1.  Pledge.

(a)       Unless otherwise defined herein, each
term used in this Agreement which is defined in the California Uniform
Commercial Code, as amended from time to time, (the “Code”) shall have
the meaning set forth herein.

(b)       Pledgor hereby pledges and grants to
Secured Party a first priority lien on and security interest in each and all of
the following items of collateral (hereinafter collectively referred to as the “Collateral”):

(i)        All of Pledgor’s right, title and
interest, including the right to receive all payments of principal and
interest, in and to that certain $250,000.00 certificate of deposit,
#385107235470 with Bank, together with any and all additions, renewals,
replacements, rollovers, reinvestments or substitutions thereof or therefor
(the “Certificates”): and

Security Agreement (Medcap Partners L.P.)

 1
 

(ii)       All proceeds of the Certificates,
including all rights, benefits, principal payments, interest payments,
dividends, distributions, premiums, profits, documents, accounts, instruments,
general intangibles, deposit accounts, money and whatever other tangible and
intangible property is received by the Pledgor upon the liquidation, sale or
other disposition of the Certificates, or the proceeds thereof.

(c)       This Agreements secures, and the
Collateral is security for, the prompt and complete payment of any and all
debts, liabilities, obligations (including the obligations of Pledgor and/or
Borrower under the Loan Documents), covenants and duties owing by Pledgor
and/or Borrower to Secured Party of any kind and description, whether direct or
indirect, absolute or contingent, due or to become due, now existing or
hereafter arising under this Agreement or the Loan Documents, and further
including all costs, fees, and expenses which Pledgor and/or Borrower is
required to pay or reimburse by this Agreement or the Loan Documents by law or
otherwise (collectively, the “Obligations”).

(d)       Pledgor further agrees to execute and
deliver to Secured Party, or to such other party as Secured Party shall direct,
in form and substance as Secured Party shall reasonably request, all security
agreements, control agreements, assignments, financing statements,
instructions, instruments, notices, and other documents or agreements and to
take all further action, at the expense of Pledgor, from time to time
reasonably requested by Secured Party in order to maintain a first priority
perfected security interest in the Collateral in favor of Secured Party or to
enable Secured Party to exercise and enforce its rights and remedies hereunder
with respect to the Collateral, or to effect a transfer of the Collateral or
any part thereof. Pledgor shall take all steps necessary to ensure that all
certificates (including certificated securities) or instruments representing or
evidencing the Collateral, if any, shall be delivered to and held by Secured
Party pursuant hereto and shall be in suitable form for transfer or assignment
in blank, all in form and substance satisfactory to Secured Party.

SECTION 2.  Payments on the Certificates.

(a)       Prior to the occurrence of an Event of
Default hereunder, Pledgor shall be entitled to receive payments of interest,
dividends, or other income made on the Certificates.

(b)       If, after the occurrence and continuance
of an Event of Default hereunder, Pledgor shall become entitled to receive any
principal, interest or premium payment in respect of the Certificates, then
Pledgor shall be deemed to have accepted the same as Secured Party’s agent,
shall hold such payments in trust on behalf of Secured Party, and shall
immediately deliver all such payments to Secured Party. All sums of money which
are received by Secured Party in respect of the Certificates pursuant to this
provision shall be deemed collections under Section 9608 of the Code and shall
be credited against the Obligations.

SECTION 3.  Release of Collateral.

(a)       At such time as all of the Obligations
under the Loan Documents have been fully and finally satisfied, and Secured
Party’s obligation to provide extensions of credit thereunder have terminated,
and Pledgor and Borrower are no longer obligated to Secured Party

 2
 

under the Loan Documents, this Agreement (and the
liens granted hereunder) shall automatically terminate.

SECTION 4.  Representations, Warranties, and Covenants
of Pledgor.

Pledgor
represents, warrants, and covenants to Secured Party that:

(a)       The Collateral is owned by Pledgor and is
not subject to any restrictions on transfer or pledge;

(b)       Pledgor has full power, authority, and
legal right to pledge all of its right, title, and interest in and to the
Collateral pursuant to this Agreement;

(c)       This Agreement has been duly authorized,
executed, and delivered by Pledgor and constitutes a legal, valid, and binding
obligation of Pledgor enforceable in accordance with its terms except as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors’ rights generally and by general
principles of equity (regardless of whether such enforceability is considered
in a proceeding in equity or at law);

(d)       No consent of any other party (including,
without limitation, other creditors of Pledgor) and no consent, license,
permit, approval, or authorization of, exemption by, notice or report to, or
registration, filing, or declaration with, any governmental authority, domestic
or foreign, is required to be obtained by Pledgor in connection with the
execution, delivery, or performance of this Agreement;

(e)       The execution, delivery, and performance
by Pledgor of this Agreement requires no action by or in respect of, or filing
with, any governmental body, agency, or official, and does not violate or
contravene, or constitute a default under, any law or regulation applicable to
Pledgor or of any material agreement, judgment, injunction, order, decree, or
other instrument binding upon Pledgor, or result in the creation or imposition
of any lien on any assets of Pledgor except as contemplated by this Agreement;

(f)        The pledge and assignment of the
Collateral pursuant to this Agreement creates a valid first priority Lien on
and a first priority perfected security interest in the Collateral, not subject
to any prior lien or encumbrance in favor of any third party. Pledgor covenants
that the Collateral is now and at all times shall remain free of all liens and
encumbrances, other than to Secured Party. Pledgor covenants and agrees that it
will defend Secured Party’s right, title and security interest in and to the
Collateral against the claims and demands of all persons;

(g)       Secured Party shall have control over the
Collateral within the meaning of Section 9104 of the Code, and Pledgor shall
have no right to withdraw any of the Collateral, and Pledgor shall not
liquidate, cause or permit to be liquidated, or effect, or cause or permit to
be effected, any other disposition of the Collateral, in whole or in part;

 3
 

(h)       Pledgor hereby grants to Secured Party an
irrevocable power of attorney, with full power of substitution coupled with an
interest, to, so long as any of the Obligations (other than inchoate
obligations to indemnify Secured Party) hereunder and under the Loan Documents
shall remain outstanding, execute and endorse, as applicable, on behalf of
Pledgor, such financing statements, continuation financing statements, security
agreements, reports, notices, and all other documents, instruments and
agreements and perform any other acts (including pressing any claim) in order
to: (i) perfect and maintain perfected security interest in the Collateral;
(ii) fully consummate all of the transactions contemplated under this Agreement
and the Loan Documents; and (iii) effect and exercise the rights and remedies
of Secured Party with respect to the Collateral as set forth in this Agreement.

SECTION 5.  No Disposition.

Except in
accordance with the terms of the Loan Documents, without the prior written
consent of Secured Party, Pledgor agrees that it will not sell, assign,
transfer, exchange, or otherwise dispose of, or grant any option with respect
to, the Collateral, nor will it create, incur, or permit to exist any
assessment, pledge, lien, mortgage, hypothecation, security interest, charge,
option, or any other encumbrance with respect to any of the Collateral, any
interest therein, or any proceeds thereof.

SECTION 6.  Obligations of Pledgor Unconditional.

Pledgor’s duty to
perform and observe the agreements and covenants on its part contained herein
shall be absolute and unconditional.

SECTION 7.  Events of Default. The occurrence and
continuance of any Event of Default under the Loan Documents shall be an “Event
of Default” hereunder.

SECTION 8.  Remedies Upon Default.

(a)       If an Event of Default should occur and
continue, Secured Party shall have all of the rights and remedies of a secured
party under the Code, under this Agreement, and under applicable law, and
available in equity. In addition, Secured Party shall have the right, to the
full extent permitted by law, and Pledgor shall take such action necessary or
appropriate to give effect to such right and to give consents, ratifications,
and waivers thereto, to take any other action with respect to the Collateral as
if Secured Party were the absolute and sole owner thereof including, without
limitation, the right to liquidate and/or convert to cash all or any part of
the Collateral (including Certificates of Deposit) and to, at Bank’s option,
apply cash proceeds thereof to Obligations then owing and/or to hold the
proceeds thereof as continuing security for Obligations whether such
Obligations are then due.

(b)       If an Event of Default should occur and
continue, Secured Party shall have the right to exercise any and all rights and
remedies provided by this Agreement (including application of any cash
Collateral, to the repayment of Pledgor’s or Borrower’s obligations owing to
Secured Party hereunder and under the Loan Documents), to sell the Collateral,
or any part thereof, at public or private sale or on any securities exchange,
for cash, upon credit, or for future delivery, and at such price or prices as Secured
Party may deem commercially reasonable.

 4
 

Secured Party may
purchase any or all of the Collateral so sold at any public sale (or, with
respect to any portion of the Collateral which is of a type customarily sold in
a recognized market or is of a type which is the subject of widely distributed
standard price quotations, at any private sale) and thereafter hold the same
free from any right or claim of whatsoever kind. Secured Party is authorized,
at any such sale, if it deems it advisable to do so, to restrict the
prospective bidders or purchasers of any of the Collateral to persons who will
represent and agree that they are purchasing for their own account for
investment, and not with a view to the distribution or sale of any of the
Collateral. To the extent that any portion of the Collateral is not of a type
customarily sold on a recognized market, Secured Party shall give Pledgor at
least ten (10) days written notice of its intention to make any such public or
private sale of that portion of the Collateral.

(c)       Pledgor hereby agrees that any
disposition of Collateral by way of a private placement or other method which
in the reasonable opinion of counsel for Secured Party is required or advisable
under federal and state securities laws shall be deemed to be commercially
reasonable. Pledgor also agrees that, except for duties set forth in the Code,
Secured Party has no duty to sell or otherwise dispose of the Collateral,
either before or after an Event of Default, whether upon the request of Pledgor
or otherwise.

(d)       Pledgor agrees to pay to Secured Party,
promptly on demand following any Event of Default, such reasonable amount of
costs, fees and expenses (all of which shall constitute obligations) incurred
by Secured Party in connection with the exercise of its rights under this
Section 8, including reasonable attorneys’ fees, disbursements, and legal
expenses, whether or not suit is brought.

(e)       Secured Party’s remedies under this
Agreement are cumulative and in addition to all other remedies which it may
possess, at law, in equity, under any other agreement, or otherwise.

SECTION 9.  No Waiver.

No failure on the
part of Secured Party to exercise, and no delay in exercising, any right,
power, or remedy hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right, power, or remedy by Secured Party
preclude any other or further exercise thereof or the exercise of any other
right, power, or remedy.

SECTION 10.  Miscellaneous.

(a) Unless the
context of this Agreement clearly requires otherwise, references to the plural
include the singular and to the singular include the plural, references to any
gender include any other gender, the part includes the whole, the term “including”
is not limiting, and the term “or” has, except where otherwise indicated, the
inclusive meaning represented by the phrase “and/or.” The words “hereof,” “herein,”
“hereby,” “hereunder,” and similar terms in this Agreement refer to this
Agreement as a whole and not to any particular provision of this Agreement.
Article, section, subsection, clause, exhibit and schedule references are to
this Agreement, unless otherwise specified. Initially capitalized terms
contained in this

 5
 

Agreement and not separately defined herein shall have
the meanings ascribed thereto in the LCRA.

(b)       Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.

(c)       This Agreement sets forth the entire
understanding between Pledgor and Secured Party regarding the subject matter of
this Agreement, and all prior agreements or understandings, if any, regarding
the subject matter hereof are merged herein. This Agreement may not be amended,
changed, modified, altered, or terminated except by means of a writing signed
by the parties hereto.

(d)       The subject headings and the sections and
subsections of this Agreement are included for purposes of convenience only and
shall not affect the construction or interpretation of any of its provisions.

(e)       This Agreement may be signed in
counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.

SECTION 11.  CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.

(a)       THE
VALIDITY OF THIS AGREEMENT, THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT
HEREOF, AND THE RIGHTS OF THE PARTIES HERETO WITH RESPECT TO ALL MATTERS
ARISING HEREUNDER OR RELATED HERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF CALIFORNIA,
WITHOUT REGARD FOR PRINCIPLES OF CONFLICTS OF LAWS.

(b)       THE
PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS
AGREEMENT SHALL BE TRIED AND LITIGATED ONLY IN THE STATE AND FEDERAL COURTS
LOCATED IN THE STATE OF CALIFORNIA, PROVIDED, HOWEVER, THAT ANY
SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE
BROUGHT, AT SECURED PARTY’S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE
SECURED PARTY ELECTS TO BRING SUCH ACTION OR WHERE SUCH COLLATERAL OR OTHER
PROPERTY MAY BE FOUND. THE PLEDGOR AND THE SECURED PARTY WAIVE, TO THE EXTENT
PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE
OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY
PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION.

(c)       THE
UNDERSIGNED ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY IS A CONSTITUTIONAL
ONE, BUT THAT IT MAY BE WAIVED

 6
 

UNDER
CERTAIN CIRCUMSTANCES. TO THE EXTENT PERMITTED BY LAW, EACH PARTY, AFTER
CONSULTING (OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF ITS, HIS
OR HER CHOICE, KNOWINGLY AND VOLUNTARILY, AND FOR THE MUTUAL BENEFIT OF ALL
PARTIES, WAIVES ANY RIGHT TO TRIAL BY JURY IN THE EVENT OF LITIGATION ARISING
OUT OF OR RELATED TO THIS AGREEMENT OR ANY OTHER DOCUMENT, INSTRUMENT OR
AGREEMENT BETWEEN THE UNDERSIGNED PARTIES.

SECTION 12.  JUDICIAL REFERENCE PROVISION.

(a)       In the event the Jury Trial Waiver set
forth above in Section 11(c) above is not enforceable, the parties elect to
proceed under this Judicial Reference Provision.

(b)       With the exception of the items specified
in clause (c), below, any controversy, dispute or claim (each, a “Claim”)
between the parties arising out of or relating to this Agreement or any other
document, instrument or agreement between the undersigned parties (collectively
in this Section, the “Comerica Documents”), will be resolved by a reference
proceeding in California in accordance with the provisions of Sections 638 et
seq. of the California Code of Civil Procedure (“CCP”), or their successor
sections, which shall constitute the exclusive remedy for the resolution of any
Claim, including whether the Claim is subject to the reference proceeding.
Except as otherwise provided in the Comerica Documents, venue for the reference
proceeding will be in the state or federal court in the county or district
where the real property involved in the action, if any, is located or in the
state or federal court in the county or district where venue is otherwise
appropriate under applicable law (the “Court”).

(c)       The matters that shall not be subject to
a reference are the following: (i) nonjudicial foreclosure of any security
interests in real or personal property, (ii) exercise of self-help remedies
(including, without limitation, set-off), (iii) appointment of a receiver and
(iv) temporary, provisional or ancillary remedies (including, without
limitation, writs of attachment, writs of possession, temporary restraining
orders or preliminary injunctions). This reference provision does not limit the
right of any party to exercise or oppose any of the rights and remedies
described in clauses (i) and (ii) or to seek or oppose from a court of
competent jurisdiction any of the items described in clauses (iii) and (iv).
The exercise of, or opposition to, any of those items does not waive the right
of any party to a reference pursuant to this reference provision as provided
herein.

(d)       The referee shall be a retired judge or
justice selected by mutual written agreement of the parties. If the parties do
not agree within ten (10) days of a written request to do so by any party,
then, upon request of any party, the referee shall be selected by the Presiding
Judge of the Court (or his or her representative). A request for appointment of
a referee may be heard on an ex parte or expedited basis, and the parties agree
that irreparable harm would result if ex parte relief is not granted. Pursuant
to CCP § 170.6, each party shall have one peremptory challenge to the referee
selected by the Presiding Judge of the Court (or his or her representative).

 7
 

(e)       The parties agree that time is of the
essence in conducting the reference proceedings. Accordingly, the referee shall
be requested, subject to change in the time periods specified herein for good
cause shown, to (i) set the matter for a status and trial-setting conference
within fifteen (15) days after the date of selection of the referee, (ii) if
practicable, try all issues of law or fact within one hundred twenty (120) days
after the date of the conference and (iii) report a statement of decision
within twenty (20) days after the matter has been submitted for decision.

(f)        The referee will have power to expand or
limit the amount and duration of discovery. The referee may set or extend
discovery deadlines or cutoffs for good cause, including a party’s failure to
provide requested discovery for any reason whatsoever. Unless otherwise ordered
based upon good cause shown, no party shall be entitled to “priority” in
conducting discovery, depositions may be taken by either party upon seven (7)
days written notice, and all other discovery shall be responded to within
fifteen (15) days after service. All disputes relating to discovery which
cannot be resolved by the parties shall be submitted to the referee whose
decision shall be final and binding.

(g)       Except as expressly set forth herein, the
referee shall determine the manner in which the reference proceeding is
conducted including the time and place of hearings, the order of presentation
of evidence, and all other questions that arise with respect to the course of
the reference proceeding. All proceedings and hearings conducted before the
referee, except for trial, shall be conducted without a court reporter, except
that when any party so requests, a court reporter will be used at any hearing
conducted before the referee, and the referee will be provided a courtesy copy
of the transcript. The party making such a request shall have the obligation to
arrange for and pay the court reporter. Subject to the referee’s power to award
costs to the prevailing party, the parties will equally share the cost of the
referee and the court reporter at trial.

(h)       The referee shall be required to
determine all issues in accordance with existing case law and the statutory
laws of the State of California. The rules of evidence applicable to
proceedings at law in the State of California will be applicable to the
reference proceeding. The referee shall be empowered to enter equitable as well
as legal relief, enter equitable orders that will be binding on the parties and
rule on any motion which would be authorized in a court proceeding, including
without limitation motions for summary judgment or summary adjudication. The
referee shall issue a decision at the close of the reference proceeding which
disposes of all claims of the parties that are the subject of the reference.
Pursuant to CCP § 644, such decision shall be entered by the Court as a
judgment or an order in the same manner as if the action had been tried by the
Court and any such decision will be final, binding and conclusive. The parties
reserve the right to appeal from the final judgment or order or from any
appealable decision or order entered by the referee. The parties reserve the
right to findings of fact, conclusions of laws, a written statement of
decision, and the right to move for a new trial or a different judgment, which
new trial, if granted, is also to be a reference proceeding under this
provision.

(i)        If the enabling legislation which
provides for appointment of a referee is repealed (and no successor statute is
enacted), any dispute between the parties that would

 8
 

otherwise be determined
by reference procedure will be resolved and determined by arbitration. The
arbitration will be conducted by a retired judge or justice, in accordance with
the California Arbitration Act §1280 through §1294.2 of the CCP as amended from
time to time. The limitations with respect to discovery set forth above shall
apply to any such arbitration proceeding.

(j)        THE PARTIES RECOGNIZE AND AGREE THAT ALL
CONTROVERSIES, DISPUTES AND CLAIMS RESOLVED UNDER THIS REFERENCE PROVISION WILL
BE DECIDED BY A REFEREE AND NOT BY A JURY. AFTER CONSULTING (OR HAVING HAD THE
OPPORTUNITY TO CONSULT) WITH COUNSEL OF ITS, HIS OR HER OWN CHOICE, EACH PARTY
KNOWINGLY AND VOLUNTARILY, AND FOR THE MUTUAL BENEFIT OF ALL PARTIES, AGREES
THAT THIS REFERENCE PROVISION WILL APPLY TO ANY CONTROVERSY, DISPUTE OR CLAIM
BETWEEN OR AMONG THEM ARISING OUT OF OR IN ANY WAY RELATED TO, THIS AGREEMENT
OR THE OTHER COMERJCA DOCUMENTS.

 9
 

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

	
  

  	
   

  	
  “PLEDGOR” 

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  MEDCAP PARTNERS L.P.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
  /s/ C. Fred Toney

  
	
   

  	
   

  	
  Name:

  	
  C. Fred Toney

  
	
   

  	
   

  	
  Title:

  	
  Managing Member of G.P.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  “SECURED PARTY”

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  COMERICA BANK

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
  /s/ Nina L. Cortez

  
	
   

  	
   

  	
  Name:

  	
  NINA L. CORTEZ

  
	
   

  	
   

  	
  Title:

  	
  VICE PRESIDENT

  
									

 

 10

	
  

  	
   

  	
  Guaranty

  

 

The undersigned, for
value received, unconditionally and absolutely guarantee(s) to Comerica Bank (“Bank”),
and to the Bank’s successors and assigns, payment when due, whether by stated
maturity, demand, acceleration or otherwise, of all existing and future
indebtedness to the Bank of CRDENTIA CORP.,
a Delaware corporation (“Borrower”) or any successor in interest, including
without limit any debtor-in-possession or trustee in bankruptcy which succeeds
to the interest of this party or person (jointly and severally the “Borrower”),
however this indebtedness has been or may be incurred or evidenced, whether
absolute or contingent direct or indirect, voluntary or involuntary, liquidated
or unliquidated, joint or several, and whether or not known to the undersigned
at the time of this Guaranty or at the time any future indebtedness is incurred
(the “Indebtedness”).

The Indebtedness
guaranteed includes without limit: (a) any and all direct indebtedness of the
Borrower to the Bank, including indebtedness evidenced by any and all
promissory notes; (b) any and all obligations or liabilities of the Borrower to
the Bank arising under any guaranty where the Borrower has guaranteed the
payment of indebtedness owing to the Bank from a third party; (c) any and all
obligations or liabilities of the Borrower to the Bank arising from
applications or agreements for the issuance of letters of credit; (d) any and
all obligations or liabilities of the Borrower to the Bank arising out of any
other agreement by the Borrower including without limit any agreement to
indemnify the Bank for environmental liability or to clean up hazardous waste;
(e) any and all indebtedness, obligations or liabilities for which the Borrower
would otherwise be liable to the Bank were it not for the invalidity,
irregularity or unenforceability of them by reason of any bankruptcy,
insolvency or other law or order of any kind, or for any other reason,
including without limit liability for interest and attorneys’ fees on, or in
connection with, any of the Indebtedness from and after the filing by or
against the Borrower of a bankruptcy petition whether an involuntary or
voluntary bankruptcy case, including, without limitation, all attorneys’ fees
and costs incurred in connection with motions for relief from stay, cash
collateral motions, nondischargeability motions, preference liability motions,
fraudulent conveyance liability motions, fraudulent transfer liability motions
and all other motions brought by Borrower, Guarantor, Bank or third parties in
any way relating to Bank’s rights with respect to such Borrower, Guarantor, or
third party and/or affecting any collateral securing any obligation owed to
Bank by Borrower, Guarantor, or any third party, probate proceedings, on appeal
or otherwise; (f) any and all amendments, modifications, renewals and/or
extensions of any of the above, including without limit amendments,
modifications, renewals and/or extensions which are evidenced by new or
additional instruments, documents or agreements; and (g) all costs of
collecting Indebtedness, including without limit reasonable attorneys’ fees and
costs.

The undersigned waive(s)
notice of acceptance of this Guaranty and presentment, demand, protest, notice
of protest, dishonor, notice of dishonor, notice of default, notice of intent
to accelerate or demand payment of any Indebtedness, and diligence in
collecting any Indebtedness, and agree(s) that the Bank may modify the terms of
any Indebtedness, compromise, extend, increase, accelerate, renew or forbear to
enforce payment of any or all Indebtedness, or permit the Borrower to incur
additional Indebtedness, all without notice to the undersigned and without
affecting in any manner the unconditional obligation of the undersigned under
this Guaranty. The undersigned further waive(s) any and all other notices to
which the undersigned might otherwise be entitled. The undersigned
acknowledge(s) and agree(s) that the liabilities created by this Guaranty are
direct and are not conditioned upon pursuit by the Bank of any remedy the Bank
may have against the Borrower or any other person or any security. No
invalidity, irregularity or unenforceability of any part or all of the
Indebtedness or any documents evidencing the same, by reason of any bankruptcy,
insolvency or other law or order of any kind or for any other reason, and no
defense or setoff available at any time to the Borrower, shall impair, affect
or be a defense or setoff to the obligations of the undersigned under this
Guaranty.

The undersigned
deliver(s) this Guaranty based solely on the undersigned’s independent
investigation of the financial condition of the Borrower and is (are) not
relying on any information furnished by the Bank. The undersigned assume(s)
full responsibility for obtaining any further information concerning the
Borrower’s financial condition, the status of the Indebtedness or any other
matter which the undersigned may deem necessary or appropriate from time to
time. The undersigned waive(s) any duty on the part of the Bank, and agree(s)
that it is not relying upon nor expecting the Bank to disclose to the
undersigned any fact now or later known by the Bank, whether relating to the
operations or condition of the Borrower, the existence, liabilities or
financial condition of any co-guarantor of the Indebtedness, the occurrence of
any default with respect to the Indebtedness, or otherwise, notwithstanding any
effect these facts may have upon the undersigned’s risk under this Guaranty or
the undersigned’s rights against the Borrower. The undersigned knowingly
accept(s) the full range of risk encompassed in this Guaranty, which risk
includes without limit the possibility that the

Borrower may incur
Indebtedness to the Bank after the financial condition of the Borrower, or its
ability to pay its debts as they mature, has deteriorated.

The undersigned
represent(s) and warrant(s) that: (a) the Bank has made no representation to
the undersigned as to the creditworthiness of the Borrower; and (b) the
undersigned has (have) established adequate means of obtaining from the
Borrower on a continuing basis financial and other information pertaining to
the Borrower’s financial condition. The undersigned agree(s) to keep adequately
informed of any facts, events or circumstances which might in any way affect
the risks of the undersigned under this Guaranty.

The undersigned grant(s)
to the Bank a security interest in and the right of setoff as to any and all
property of the undersigned now or later in the possession of the Bank. The
undersigned subordinate(s) any claim of any nature that the undersigned now or
later has (have) against the Borrower to and in favor of all Indebtedness and
agree(s) not to accept payment or satisfaction of any claim that the
undersigned now or later may have against the Borrower without the prior
written consent of the Bank. Should any payment, distribution, security, or
proceeds, be received by the undersigned upon or with respect to any claim that
the undersigned now or may later have against the Borrower, the undersigned
shall immediately deliver the same to the Bank in the form received (except for
endorsement or assignment by the undersigned where required by the Bank) for
application on the Indebtedness, whether matured or unmatured, and until
delivered the same shall be held in trust by the undersigned as the property of
the Bank. The undersigned further assign(s) to the Bank as collateral for the
obligations of the undersigned under this Guaranty all claims of any nature
that the undersigned now or later has (have) against the Borrower (other than
any claim under a deed of trust or mortgage covering real property) with full
right on the part of the Bank, in its own name or in the name of the
undersigned, to collect and enforce these claims.

The undersigned agree(s)
that no security now or later held by the Bank for the payment of any
Indebtedness, whether from the Borrower, any guarantor, or otherwise, and
whether in the nature of a security interest, pledge, lien, assignment, setoff,
suretyship, guaranty, indemnity, insurance or otherwise, shall affect in any
manner the unconditional obligation of the undersigned under this Guaranty, and
the Bank, in its sole discretion, without notice to the undersigned, may
release, exchange, enforce and otherwise deal with any security without
affecting in any manner the unconditional obligation of the undersigned under
this Guaranty. The undersigned acknowledges(s) and agree(s) that the Bank has
no obligation to acquire or perfect any lien on or security interest in any
asset(s), whether realty or personalty, to secure payment of the Indebtedness,
and the undersigned is (are) not relying upon any asset(s) in which the Bank
has or may have a lien or security interest for payment of the Indebtedness.

The undersigned
acknowledge(s) that the effectiveness of this Guaranty is not conditioned on
any or all of the Indebtedness being guaranteed by anyone else.

Until the Indebtedness is
irrevocably paid in full, the undersigned waive(s) any and all rights to be
subrogated to the position of the Bank or to have the benefit of any lien,
security interest or other guaranty now or later held by the Bank for the
Indebtedness or to enforce any remedy which the Bank now or later has against
the Borrower or any other person. Until the Indebtednes is irrevocably paid in
full, the undersigned shall have no right of reimbursement, indemnity,
contribution or other right of recourse to or with respect to the Borrower or
any other person. The undersigned agree(s) to indemnify and hold harmless the
Bank from and against any and all claims, actions, damages, costs and expenses,
including without limit reasonable attorneys’ fees, incurred by the Bank in
connection with the undersigned’s exercise of any right of subrogation,
contribution, indemnification or recourse with respect to this Guaranty. The
Bank has no duty to enforce or protect any rights which the undersigned may
have against the Borrower or any other person and the undersigned assume(s)
full responsibility for enforcing and protecting these rights.

Notwithstanding any
provision of the preceding paragraph or anything else in this Guaranty to the
contrary, if any of the undersigned is or becomes “an “insider” or “affiliate”
(as defined in Section 101 of the Federal Bankruptcy Code, as it may be
amended) with respect to the Borrower, then that undersigned irrevocably and
absolutely waives any and all rights of subrogation, contribution,
indemnification, recourse, reimbursement and any similar rights against the
Borrower (or any other guarantor) with respect to this Guaranty, whether such
rights arise under an express or implied contract or by operation of law. It is
the intention of the parties that the undersigned shall not be (or be deemed to
be) a “creditor” (as defined in Section 101 of the Federal Bankruptcy Code, as
it may be amended) of the Borrower (or any other guarantor) by reason of the
existence of this Guaranty in the event that the Borrower becomes a debtor in
any proceeding under the

 2
 

Federal Bankruptcy Code.
This waiver is given to induce the Bank to enter into certain written contracts
with the Borrower included in the Indebtedness. The undersigned warrant(s) and
agree(s) that none of Bank’s rights, remedies or interests shall be directly or
indirectly impaired because of any of the undersigned’s status as an “insider”
or “affiliate” of the Borrower, and undersigned shall take any action, and
shall execute any document, which the Bank may request in order to effectuate
this warranty to the Bank.

If any Indebtedness is
guaranteed by two or more guarantors, the obligation of the undersigned shall
be several and also joint, each with all and also each with any one or more of
the others, and may be enforced at the option of the Bank against each
severally, any two or more jointly, or some severally and some jointly. The
Bank, in its sole discretion, may release any one or more of the guarantors for
any consideration which it deems adequate, and may fail or elect not to prove a
claim against the estate of any bankrupt, insolvent, incompetent or deceased
guarantor; and after that, without notice to any other guarantor, the Bank may
extend or renew any or all Indebtedness and may permit the Borrower to incur
additional Indebtedness, without affecting in any manner the unconditional
obligation of the remaining guarantor(s). This action by the Bank shall not,
however, be deemed to affect any right to contribution which may exist among
the guarantors.

Any of the undersigned
may terminate their obligation under this Guaranty as to future Indebtedness
(except as provided below) by (and only by) delivering written notice of
termination to an officer of the Bank and receiving from an officer of the Bank
written acknowledgement of delivery; provided, the termination shall not be
effective until the opening of business on the fifth (5th) day following
written acknowledgement of delivery. Any termination shall not affect in any
way the unconditional obligations of the remaining guarantor(s), whether or not
the termination is known to the remaining guarantor(s). Any termination shall
not affect in any way the unconditional obligations of the terminating
guarantor(s) as to any Indebtedness existing at the effective date of
termination or any Indebtedness created after that pursuant to any commitment
or agreement of the Bank or any Borrower loan with the Bank existing at the
effective date of termination (whether advances or readvances by the Bank are
optional or obligatory), or any modifications, extensions or renewals of any of
this Indebtedness, whether in whole or in part, and as to all of this
Indebtedness and modifications, extensions or renewals of it, this Guaranty
shall continue effective until the same shall have been fully paid. The Bank
has no duty to give notice of termination by any guarantor(s) to any remaining
guarantor(s). The undersigned shall indemnify the Bank against all claims,
damages, costs and expenses, including without limit reasonable attorneys’ fees
and costs, incurred by the Bank in connection with any suit, claim or action
against the Bank arising out of any modification or termination of a Borrower
loan or any refusal by the Bank to extend additional credit in connection with
the termination of this Guaranty.

Notwithstanding any prior
revocation, termination, surrender or discharge of this Guaranty (or of any
lien, pledge or security interest securing this Guaranty) in whole or part, the
effectiveness of this Guaranty, and of all liens, pledges and security
interests securing this Guaranty, shall automatically continue or be
reinstated, as the case may be, in the event that (a) any payment received or
credit given by the Bank in respect of the Indebtedness is returned, disgorged
or rescinded as a preference, impermissible setoff, fraudulent conveyance,
diversion of trust funds, or otherwise under any applicable state or federal
law, including, without limitation, laws pertaining to bankruptcy or
insolvency, in which case this Guaranty, and all liens, pledges and security
interests securing this Guaranty, shall be enforceable against the undersigned
as if the returned, disgorged or rescinded payment or credit had not been
received or given by the Bank, and whether or not the Bank relied upon this
payment or credit or changed its position as a consequence of it; or (b) any
liability is imposed, or sought to be imposed, against the Bank relating to the
environmental condition of, or the presence of hazardous or toxic substances
on, in or about, any property given as collateral to the Bank by the Borrower,
whether this condition is known or unknown, now exists or subsequently arises
(excluding only conditions which arise after any acquisition by the Bank of any
such property, by foreclosure, in lieu of foreclosure or otherwise, to the
extent due to the wrongful act or omission of the Bank), in which case this
Guaranty, and all liens, pledges and security interests securing this Guaranty,
shall be enforceable against the undersigned to the extent of all liability,
costs and expenses (including without limit reasonable attorneys’ fees and
costs) incurred by the Bank as the direct or indirect result of any
environmental condition or hazardous or toxic substances. In the event of
continuation or reinstatement of this Guaranty and the liens, pledges and
security interests securing it, the undersigned agree(s) upon demand by the
Bank to execute and deliver to the Bank those documents which the Bank
determines are appropriate to further evidence (in the public records or
otherwise) this continuation or reinstatement, although the failure of the
undersigned to do so shall not affect in any way the reinstatement or
continuation. If the undersigned do(es) not execute and deliver to the Bank
upon demand such documents, the Bank and each Bank officer is irrevocably
appointed (which appointment is coupled with an interest) the true and lawful
attorney of the undersigned (with full power of substitution) to execute and
deliver such documents in the

 3
 

name and on behalf of the
undersigned. For purposes of this Guaranty, “environmental condition” includes,
without limitation, conditions existing with respect to the surface or ground
water, drinking water supply, land surface or subsurface and the air; and “hazardous
or toxic substances” shall include any and all substances now or subsequently
determined by any federal, state or local authority to be hazardous or toxic,
or otherwise regulated by any of these authorities.

Although the intent of
the undersigned and the Bank is that California law shall apply to this
Guaranty, regardless of whether California law applies, the undersigned further
agree(s) as follows: With respect to the limitation, if any, stated in the
Additional Provisions below on the amount of principal guaranteed under this
Guaranty, the undersigned agree(s) that (a) this limitation shall not be a
limitation on the amount of Borrower’s Indebtedness to the Bank; (b) any
payments by the undersigned shall not reduce the maximum liability of the
undersigned under this Guaranty unless written notice to that effect is
actually received by the Bank at or prior to the time of the payment; and (c)
the liability of the undersigned to the Bank shall at all times be deemed to be
the aggregate liability of the undersigned under this Guaranty and any other
guaranties previously or subsequently given to the Bank by the undersigned and
not expressly revoked, modified or invalidated in writing.

The undersigned waive(s)
any right to require the Bank to: (a) proceed against any person, including
without limit the Borrower; (b) proceed against or exhaust any security held
from the Borrower or any other person; (c) pursue any other remedy in the Bank’s
power; or (d) make any presentments or demands for performance, or give any
notices of nonperformance, protests, notices of protest, or notices of dishonor
in connection with any obligations or evidences of Indebtedness held by the
Bank as security, in connection with any other obligations or evidences of
indebtedness which constitute in whole or in part Indebtedness, or in
connection with the creation of new or additional Indebtedness.

The undersigned
authorize(s) the Bank, either before or after termination of this Guaranty,
without notice to or demand on the undersigned and without affecting the
undersigned’s liability under this Guaranty, from time to time to: (a) apply
any security and direct the order or manner of sale of it, including without
limit, a nonjudicial sale permitted by the terms of the controlling security
agreement, mortgage or deed of trust, as the Bank in its discretion may
determine; (b) release or substitute any one or more of the endorsers or any
other guarantors of the Indebtedness; and (c) apply payments received by the
Bank from the Borrower to any indebtedness of the Borrower to the Bank, in such
order as the Bank shall determine in its sole discretion, whether or not this
indebtedness is covered by this Guaranty, and the undersigned waive(s) any
provision of law regarding application of payments which specifies otherwise.
The Bank may without notice assign this Guaranty in whole or in part. Upon the
Bank’s request, the undersigned agree(s) to provide to the Bank copies of the
undersigned’s financial statements.

The undersigned waive(s)
any defense based upon or arising by reason of (a) any disability or other
defense of the Borrower or any other person; (b) the cessation or limitation
from any cause whatsoever, other than final and irrevocable payment in full, of
the Indebtedness; (c) any lack of authority of any officer, director, partner,
agent or any other person acting or purporting to act on behalf of the Borrower
which is a corporation, partnership or other type of entity, or any defect in
the formation of the Borrower; (d) the application by the Borrower of the
proceeds of any Indebtedness for purposes other than the purposes represented
by the Borrower to the Bank or intended or understood by the Bank or the
undersigned; (e) any act or omission by the Bank which directly or indirectly
results in or aids the discharge of the Borrower or any Indebtedness by
operation of law or otherwise; or (f) any modification of the Indebtedness, in
any form whatsoever including without limit any modification made after
effective termination, and including without limit, the renewal, extension,
acceleration or other change in time for payment of the Indebtedness, or other
change in the terms of any Indebtedness, including without limit increase or
decrease of the interest rate. The undersigned understands that, absent this
waiver, Bank’s election of remedies, including but not limited to its decision
to proceed to nonjudicial foreclosure on any real property securing the
Indebtedness, could preclude Bank from obtaining a deficiency judgment against
Borrower and the undersigned pursuant to California Code of Civil Procedure
sections 580a, 580b, 580d or 726 and could also destroy any subrogation rights
which the undersigned has against Borrower. The undersigned further understands
that, absent this waiver, California law, including without limitation,
California Code of Civil Procedure sections 580a, 580b, 580d or 726, could
afford the undersigned one or more affirmative defenses to any action
maintained by Bank against the undersigned on this Guaranty.

The undersigned waives
any and all rights and provisions of California Code of Civil Procedure
sections 580a, 580b, 580d and 726, including, but not limited to any provision
thereof that: (i) may limit the time period for Bank to commence a

 4
 

lawsuit against Borrower
or the undersigned to collect any Indebtedness owing by Borrower or the
undersigned to Bank; (ii) may entitle Borrower or the undersigned to a judicial
or nonjudicial determination of any deficiency owed by Borrower or the
undersigned to Bank, or to otherwise limit Bank’s right to collect a deficiency
based on the fair market value of such real property security; (iii) may limit
Bank’s right to collect a deficiency judgment after a sale of any real property
securing the Indebtedness; (iv) may require Bank to take only one action to
collect the Indebtedness or that may otherwise limit the remedies available to
Bank to collect the Indebtedness.

The undersigned
waives all rights and defenses arising out of an election of remedies by Bank
even though that election of remedies, such as a nonjudicial foreclosure with
respect to security for a guaranteed obligation, has destroyed the undersigned’s
rights of subrogation and reimbursement against Borrower by the operation of
Section 580d of the Code of Civil Procedure or otherwise.

Without limiting the
generality of any other waiver or other provision set forth in this Guaranty,
each undersigned Guarantor waives all rights and defenses that any such
undersigned Guarantor may have because the Indebtedness is secured by real
property. This means, among other things:

(1)       Bank may collect from any undersigned Guarantor
without first foreclosing on any real or personal property collateral pledged
by any Borrower to secure the Indebtedness.

(2)       If Bank forecloses on any real property
collateral pledged by any Borrower to secure the Indebtedness:

(a)       the amount of the Indebtedness may be
reduced only by the price for which that collateral is sold at the foreclosure
sale, even if the collateral is worth more than the sale price.

(b)       Bank may collect from any undersigned
Guarantor even if Bank, by foreclosing on the real property pledged as
collateral, has destroyed any right that the undersigned Guarantor may have to
collect from Borrower.

This is an unconditional
and irrevocable waiver of any rights and defenses each undersigned Guarantor
may have because the Indebtedness is secured by Real Property. These rights and
defenses include, but are not limited to, any rights or defenses based upon
Section 580a, 580b, 580d, or 726 of the California Code of Civil Procedure.

WITHOUT LIMITING THE
GENERALITY OF ANY OTHER WAIVER OR OTHER PROVISION SET FORTH IN THIS GUARANTY,
EACH UNDERSIGNED GUARANTOR HEREBY WAIVES, TO THE MAXIMUM EXTENT SUCH WAIVER IS
PERMITTED BY LAW, ANY AND ALL BENEFITS, DEFENSES TO PAYMENT OR PERFORMANCE, OR
ANY RIGHT TO PARTIAL OR COMPLETE EXONERATION ARISING DIRECTLY OR INDIRECTLY
UNDER ANY ONE OR MORE OF CALIFORNIA CIVIL CODE SECTIONS 2799, 2808, 2809, 2810,
2815, 2819, 2820, 2821, 2822, 2838, 2839, 2845, 2847, 2848, 2849, AND 2850.

The undersigned
acknowledges and agrees that this is a knowing and informed waiver of the
undersigned’s rights as discussed above and that Bank is relying on this waiver
in extending credit to Borrower.

The undersigned
acknowledge(s) that the Bank has the right to sell, assign, transfer,
negotiate, or grant participations in all or any part of the Indebtedness and
any related obligations, including without limit this Guaranty. In connection
with that right, the Bank may disclose any documents and information which the
Bank now or later acquires relating to the undersigned and this Guaranty,
whether furnished by the Borrower, the undersigned or otherwise. The
undersigned further agree(s) that the Bank may disclose these documents and
information to the Borrower. The undersigned agree(s) that the Bank may provide
information relating to this Guaranty or to the undersigned to the Bank’s
parent, affiliates, subsidiaries and service providers.

The total obligation
under this Guaranty shall be UNLIMITED unless specifically limited in the
Additional Provisions of this Guaranty, and this obligation (whether unlimited
or limited to the extent indicated in the Additional Provisions) shall include,
IN ADDITION TO any limited amount of principal guaranteed, any and all interest
on all Indebtedness and any and all costs and expenses of any kind, including
without limit reasonable attorneys’ fees and costs, incurred by the Bank at any
time(s) for any reason in enforcing any of the duties and obligations of the
undersigned under this Guaranty or

 5
 

otherwise incurred by the
Bank in any way connected with this Guaranty, the Indebtedness or any other
guaranty of the Indebtedness (including without limit reasonable attorneys’
fees and other expenses incurred in any suit involving the conduct of the Bank,
the Borrower or the undersigned). All of these costs and expenses shall be
payable immediately by the undersigned when incurred by the Bank, without
demand, and until paid shall bear interest at the highest per annum rate
applicable to any of the Indebtedness, but not in excess of the maximum rate
permitted by law. Any reference in this Guaranty to attorneys’ fees shall be
deemed a reference to fees, charges, costs and expenses of both in-house and
outside counsel and paralegals, whether or not a suit or action is instituted,
and to court costs if a suit or action is instituted, and whether attorneys’
fees or court costs are incurred at the trial court level, on appeal, in a
bankruptcy, administrative or probate proceeding or otherwise. Any reference in
the Additional Provisions or elsewhere (a) to this Guaranty being secured by
certain collateral shall NOT be deemed to limit the total obligation of the
undersigned under this Guaranty or (b) to this Guaranty being limited in any
respect shall NOT be deemed to limit the total obligation of the undersigned
under any prior or subsequent guaranty given by the undersigned to the Bank.

The undersigned
unconditionally and irrevocably waive(s) each and every defense and setoff of
any nature which, under principles of guaranty or otherwise, would operate to
impair or diminish in any way the obligation of the undersigned under this
Guaranty, and acknowledge(s) that each such waiver is by this reference
incorporated into each security agreement, collateral assignment, pledge and/or
other document from the undersigned now or later securing this Guaranty and/or
the Indebtedness, and acknowledge(s) that as of the date of this Guaranty no
such defense or setoff exists. The undersigned acknowledge(s) that the
effectiveness of this Guaranty is subject to no conditions of any kind.

This Guaranty shall
remain effective with respect to successive transactions which shall either
continue the Indebtedness, increase or decrease it, or from time to time create
new Indebtedness after all or any prior Indebtedness has been satisfied, until this
Guaranty is terminated in the manner and to the extent provided above.

The undersigned
warrant(s) and agree(s) that each of the waivers set forth above are made with
the undersigned’s full knowledge of their significance and consequences, and
that under the circumstances, the waivers are reasonable and not contrary to
public policy or law If any of these waivers are determined to be contrary to
any applicable law or public policy, these waivers shall be effective only to
the extent permitted by law.

This Guaranty constitutes
the entire agreement of the undersigned and the Bank with respect to the
subject matter of this Guaranty. No waiver, consent, modification or change of
the terms of this Guaranty shall bind any of the undersigned or the Bank unless
in writing and signed by the waiving party or an authorized officer of the
waiving party, and then this waiver, consent, modification or change shall be
effective only in the specific instance and for the specific purpose given.
This Guaranty shall inure to the benefit of the Bank and its successors and
assigns. This Guaranty shall be binding on the undersigned and the undersigned’s
heirs, legal representatives, successors and assigns including, without limit,
any debtor in possession or trustee in bankruptcy for any of the undersigned.
The undersigned has (have) knowingly and voluntarily entered into this Guaranty
in good faith for the purpose of inducing the Bank to extend credit or make
other financial accommodations to the Borrower, and the undersigned acknowledge(s)
that the terms of this Guaranty are reasonable. If any provision of this
Guaranty is unenforceable in whole or in part for any reason, the remaining
provisions shall continue to be effective. THIS
GUARANTY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF CALIFORNIA.

Additional Provisions (if
any): (a) The undersigned hereby covenants and agrees to deliver to Bank not
later than 30 days after end of each fiscal quarter, internally prepared
financial statements of the undersigned, prepared in accordance with GAAP and
certified as true and correct by an authorized officer of the undersigned; and

(b) THE TOTAL OBLIGATION UNDER THIS GUARANTY SHALL NOT
EXCEED THE PRINCIPAL AMOUNT OF FOUR HUNDRED THOUSAND DOLLARS ($400,000), PLUS
ALL INTEREST ON THAT AMOUNT AND ALL COSTS INCURRED BY THE BANK IN COLLECTION
EFFORTS AGAINST THE BORROWER AND/OR THE UNDERSIGNED INCLUDING, WITHOUT LIMIT,
REASONABLE ATTORNEY FEES.

 6
 

THE UNDERSIGNED
AND BANK ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY IS A CONSTITUTIONAL ONE,
BUT THAT IT MAY BE WAIVED UNDER CERTAIN CIRCUMSTANCES. TO THE EXTENT PERMITTED
BY LAW, EACH PARTY, AFTER CONSULTING (OR HAVING HAD THE OPPORTUNITY TO CONSULT)
WITH COUNSEL OF THEIR CHOICE, KNOWINGLY AND VOLUNTARILY, AND FOR THEIR MUTUAL
BENEFIT WAIVES ANY RIGHT TO TRIAL BY JURY IN THE EVENT OF LITIGATION REGARDING
THE PERFORMANCE OR ENFORCEMENT OF, OR IN ANY WAY RELATED TO, THIS GUARANTY OR
THE INDEBTEDNESS.

IN WITNESS WHEREOF, the undersigned has (have) signed
this Guaranty on January 24, 2007.

	
  WITNESSES:

  	
   

  	
  GUARANTOR:

  

  MEDCAP PARTNERS L.P.

  
	
  

  Janna Gunter

  	
   

  	
  By:

  	
  MEDCAP MANAGEMENT & RESEARCH LLC,

  as General Partner

  
	
  Print
  Name:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ C. Fred Toney

  
	
   

  	
   

  	
   

  	
  SIGNATURE OF

  
	
   

  	
   

  	
  Its:

  	
  Managing Member of the G.P.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  

  

  BORROWER(S): CRDENTIA CORP.

  	
   

  	
  GUARANTOR’S ADDRESS

  

  500 Third Street

  Suite 535

  San Francisco, CA 94107

  
					

 

 7
 

CERTIFICATE
OF ACKNOWLEDGMENT

STATE OF CALIFORNIA

COUNTY OF SAN FRANCISCO

On 1/24/07 before
me, Janna L. Gunter personally appeared C. Fred Toney personally known to me
(or proved to me on the basis of satisfactory evidence) to be the person(s)
whose name(s) is/are subscribed to within instrument and acknowledged to me
that he/she/they executed the same in his/her/their authorized capacity(ies),
and that by his/her/their signature(s) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted, executed the instrument.

WITNESS my hand and
official seal.

	
  (SEAL)

  	
   

  	
  /s/ Janna L. Gunter

  
	
   

  	
   

  	
  (Notary Public’s Signature)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Janna L. Gunter

  
	
   

  	
   

  	
  (Type or Print Name)

  

 

 8

	
  

  	
   

  	
  Resolutions and Incumbency
  Certification

  

 

I certify that I am the
duly elected and qualified Secretary of Medcap Management & Research LLC (“Corporation”)
and the keeper of the records of the Corporation; that the Corporation is the
general partner of Medcap Partners L.P., a Delaware limited partnership; that
the following is a true and correct copy of resolutions duly adopted by the
officers/members/managers of the Corporation in accordance with its operating
agreement and applicable statutes on or as of January 19, 2007.

Copy of Resolutions:

Whereas,
the Corporation is general partner and managing member of
Medcap Partners L.P., a limited partnership (the “Partnership”);

Whereas,
this Partnership is financially interested in the affairs of
Crdentia Corp. (“Borrower”); and

Whereas,
there has been presented to the Partnership and Corporation
certain documents and instruments including but not limited to a Guaranty (“Agreement”)
of indebtedness of Borrower to be executed and delivered by the Partnership to
Comerica Bank (“Bank”), as yet unexecuted, in favor of Bank, pertaining to the
existing and/or future indebtedness of the Borrower to the Bank; and

Whereas,
in order to induce the Bank to extend credit or other
financial accommodations to the Borrower, the Partnership and Corporation deems
it advisable, desirable, and in the best interests of this Partnership that the
Partnership enter into the Agreement;

Be It
Resolved, That:

1.         Any
one of the following officers of the Corporation, acting in the Corporation’s
capacity as managing member of the Partnership:

	
  Name:

  	
   

  	
  Title:

  	
   

  	
  Signature

  
	
  C. Fred Toney

  	
   

  	
  Managing Member of G.P.

  	
   

  	
  /s/ C. Fred Toney

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

is/are authorized to
enter into the Agreement; and to execute in such form as may be required by the
Bank all such other documents and/or instruments as shall be required by Bank
in connection with the Agreement and that none of the same shall be valid
unless so signed or endorsed.

2.         This authorization shall be effective (and Bank shall be
entitled to rely fully on it) notwithstanding any contrary terms contained in
any limited partnership agreement now or hereafter adopted by the Partnership,
and shall remain in full force and effect until the Partnership officially
notifies the Bank to the contrary in writing (such notice to have no effect on
any action previously taken by Bank in reliance on this authorization).

3.         Any and all agreements, instruments and documents previously
executed and acts and things previously done to carry out the purposes of this
Authorization are ratified, confirmed and approved as the act or acts of the
Partnership.

4.         If other persons become partners in the Partnership or if
the Partnership should become incorporated, the Partnership shall notify the
Bank promptly in writing of any such changes. This limited partnership
Authorization is not a consent by the Bank to the adding of partners or to the
incorporation of the limited partnership.

5.         Each of the partners of the Partnership have, to the extent
required pursuant to the terms of the partnership’s limited partnership
agreement, consented to the foregoing and to the execution and delivery of the
Agreement.

	
   

  	
   

  	
   

  	
  /s/ C. Fred Toney

  
	
   

  	
   

  	
   

  	
  Secretary, Medcap
  Management & Research LLC

  & Managing Member

  

 

CERTIFICATION
OF LIMITED PARTNERSHIP AGREEMENT

The undersigned Secretary
of MEDCAP PARTNERS L.P., a
Delaware limited partnership (“Company”), hereby certifies to COMERICA BANK, a Michigan banking
corporation (“Bank”), that the Limited Partnership Agreement of the Company
attached as Exhibit A: (i) is a true, complete and accurate copy of such
documents; (ii) remains in full force and effect; (iii) has not been amended,
repealed or rescinded in any respect; and (iv) may continue to be relied upon
by Bank until and unless written notice to the contrary is delivered to Bank.

Executed as of the 19 day
of January, 2007.

	
  

  	
   

  	
  MEDCAP PARTNERS L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
  /s/ C. Fred Toney

  
	
   

  	
   

  	
  Name:

  	
  C. Fred Toney

  
	
   

  	
   

  	
  Its:

  	
  Secretary

  Managing Member of G.P.

  
					

 

EXHIBIT
A

See Attached
Limited Partnership Agreement

 2

CLOSING
AGREEMENT

This Closing
Agreement dated January 19, 2007, is made among COMERICA BANK (“Bank”),
CRDENTIA CORP. (“Borrower”) and MEDCAP PARTNERS L.P. (“Guarantor”) with respect
to the $2,400,000 revolving loan (the “Loan”) to be made by Bank to Borrower
pursuant to the $2,400,000 Master Revolving Note dated as of even date herewith
(“Note”) payment of which is to be guaranteed by Guarantor pursuant to a
Guaranty dated as of even date herewith (“Guaranty”).

1.         Terms. Capitalized terms used herein without
definition have the meanings given them in the Note.

2.         Unsatisfied Closing Conditions. Each of the following
(“Unsatisfied Closing Conditions”) is a condition to the Bank’s obligation to
make the Loan:

(a) the Bank’s receipt of
a Certificate of Good Standing from the Texas Secretary of State.

3.         Closing. The Bank will make, the Borrower will
borrow, and the Guarantor will guarantee payment of the Loan as of January      ,
2007 (“Closing Date”).

4.         Achievement of Unsatisfied Closing Conditions. If the
Unsatisfied Closing Conditions are not achieved on or before thirty (30) days
after the Closing Date, such failure shall be and constitute a “Default” under the Note and the Bank
may deem the Loan to be in default effective as of such day, or any Business Day
thereafter. The Bank may declare the Loan due and payable immediately and may
commence the exercise of any and all rights and remedies under the Note or
related agreements.

	
  COMERICA BANK

  	
   

  	
  CRDENTIA CORP.

  
	
   

  	
   

  	
   

  
	
  By: 

  	
  /s/ Nina L. Cortez

  	
   

  	
  By: 

  	
  /s/ James D. Durham

  
	
  Its:

  	
  Vice President

  	
   

  	
  Its:

  	
  CEO

  

 

	
   

  	
   

  	
  MEDCAP PARTNERS L.P.

  By: MEDCAP MANAGEMENT & RESEARCH

  LLC, as General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By: 

  	
  /s/ Fred Toney

  
	
   

  	
   

  	
   

  	
  Its:

  	
  Managing Member of G.P.

  

 

 A-1Exhibit
10.95

REGISTRATION RIGHTS AGREEMENT

This Registration Rights
Agreement (this “Agreement”)
is made and entered into as of April 13, 2007, by and among Crdentia
Corp., a Delaware corporation (the “Company”), and DAWSON JAMES SECURITIES, Inc. (“Dawson”).

This
Agreement is made pursuant to the Settlement Agreement, dated as of the date
hereof among the Company and Dawson (the “Settlement
Agreement”).

The
Company and Dawson hereby agree as follows:

1.                                       Definitions.  Capitalized terms used and not otherwise
defined herein that are defined in the Settlement Agreement will have the
meanings given such terms in the Settlement Agreement.  As used in this Agreement, the following
terms have the respective meanings set forth in this Section 1:

“Advice” has the meaning set forth in
Section 6(d).

“Effective Date” means, as to a
Registration Statement, the date on which such Registration Statement is first
declared effective by the Commission.

“Effectiveness Period” has the meaning set
forth in Section 2(a).

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

“Indemnified Party”
has the meaning set forth in Section 5(c).

“Indemnifying Party”
has the meaning set forth in Section 5(c).

“Losses”
has the meaning set forth in Section 5(a).

“Proceeding” means an action, claim, suit,
investigation or proceeding (including, without limitation, an investigation or
partial proceeding, such as a deposition), whether commenced or threatened.

“Prospectus” means the prospectus included
in a Registration Statement (including, without limitation, a prospectus that
includes any information previously omitted from a prospectus filed as part of
an effective registration statement in reliance upon Rule 430A promulgated
under the Securities Act), as amended or supplemented by any prospectus
supplement, with respect to the terms of the offering of any portion of the
Registrable Securities covered by a Registration Statement, and all other
amendments and supplements to the Prospectus, including post-effective
amendments, and all material incorporated by reference or deemed to be
incorporated by reference in such Prospectus.

“Registrable Securities” means: (i) the
Shares and (ii) any securities issued or issuable upon any stock split,
dividend or other distribution, recapitalization or similar event, or any
conversion price adjustment with respect to any of the securities referenced in
(i) above.

 1
 

“Registration Statement” means the initial
registration statement required to be filed in accordance with Section 2(a) and
any additional registration statement(s) required to be filed under Section
2(b), including (in each case) the Prospectus, amendments and supplements to
such registration statements or Prospectus, including pre- and post-effective
amendments, all exhibits thereto, and all material incorporated by reference or
deemed to be incorporated by reference therein.

“Rule 144” means Rule 144 promulgated by
the Commission pursuant to the Securities Act, as such Rule may be amended from
time to time, or any similar rule or regulation hereafter adopted by the
Commission having substantially the same effect as such Rule.

“Rule 415” means Rule 415 promulgated by
the Commission pursuant to the Securities Act, as such Rule may be amended from
time to time, or any similar rule or regulation hereafter adopted by the
Commission having substantially the same effect as such Rule.

“Rule 424” means Rule 424 promulgated by
the Commission pursuant to the Securities Act, as such Rule may be amended from
time to time, or any similar rule or regulation hereafter adopted by the
Commission having substantially the same effect as such Rule.

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

“Shares” means the shares of Common Stock
issued or issuable to Dawson pursuant to the Settlement Agreement.

2.                                       Registration.

(a)                                  Within
30 days of the date of the final closing under the equity financing currently
being conducted by the Company (which is currently set to occur on April 6,
2007 but may be extended in the sole discretion of the Company’s Board of
Directors), the Company shall prepare and file with the Commission a
Registration Statement covering the resale of all Registrable Securities not
already covered by an existing and effective Registration Statement for an
offering to be made on a continuous basis pursuant to Rule 415, on Form S-1 (or
on such other form appropriate for such purpose).  Such Registration Statement shall contain
(except if otherwise required pursuant to written comments received from the
Commission upon a review of such Registration Statement) the “Plan of
Distribution” attached hereto as Annex A.  The Company shall use commercially reasonable
efforts to cause such Registration Statement to be declared effective under the
Securities Act as soon as possible and shall use its commercially reasonable
efforts to keep the Registration Statement continuously effective under the
Securities Act until the date which is the earlier of (i) five years after
its Effective Date, (ii) such time as all of the Registrable Securities covered
by such Registration Statement have been publicly sold by Dawson, or (iii) such
time as all of the Registrable Securities covered by such Registration
Statement may be sold by Dawson pursuant to Rule 144(k) as determined by the
counsel to the Company pursuant to a written opinion letter to such effect,
addressed and reasonably acceptable to the Company’s transfer agent and Dawson
(the “Effectiveness
Period”).

(b)                                 If
for any reason the Commission does not permit all of the Registrable Securities
to be included in the Registration Statement filed pursuant to Section 2(a), or
for any other reason any outstanding Registrable Securities are not then
covered by an effective 

 2
 

Registration Statement, then the Company
shall prepare and file an additional Registration Statement covering the resale
of all Registrable Securities not already covered by an existing and effective
Registration Statement for an offering to be made on a continuous basis
pursuant to Rule 415, on Form S-1 (or on such other form appropriate for such
purpose).  Each such Registration
Statement shall contain (except if otherwise required pursuant to written
comments received from the Commission upon a review of such Registration
Statement) the “Plan of Distribution” attached hereto as Annex A.  The Company shall use commercially reasonable
efforts to cause each such Registration Statement to be declared effective
under the Securities Act as soon as possible but, in any event, by its
Effectiveness Date, and shall use its commercially reasonable best efforts to
keep such Registration Statement continuously effective under the Securities
Act during the entire Effectiveness Period.

(c)                                  Dawson
agrees to furnish to the Company a completed Questionnaire in the form attached
to this Agreement as Annex B (a “Selling Holder Questionnaire”).  The Company shall not be required to include
the Registrable Securities of Dawson in a Registration Statement if Dawson
fails to furnish to the Company a fully completed Selling Holder Questionnaire
at least two Trading Days prior to the filing of the applicable Registration
Statement.  Dawson acknowledges that the
Company may, in its sole discretion, include shares of capital stock held by
other selling stockholders on any Registration Statement covering the resale of
the Registrable Securities.

(d)                                 If:
(i) a Registration Statement is not filed on or prior to June 1, 2007, or (ii)
a Registration Statement is not declared effective by the Commission on or
prior to August 15, 2007, or (iii) after its Effective Date, without regard for
the reason thereunder or efforts therefore, such Registration Statement ceases
for any reason to be effective and/or available to Dawson as to all Registrable
Securities to which it is required to cover at any time prior to the expiration
of its Effectiveness Period for more than an aggregate of 60 Trading Days
(which need not be consecutive) in any twelve (12) month period (any such
failure or breach being referred to as an “Event”, and for purposes of clauses (i) or (ii) the date
on which such Event occurs, or for purposes of clause (iii) the date on which
such 60 Trading Day period is exceeded, being referred to as “Event Date”), then (x) on
each such Event Date the Company shall pay to Dawson an amount in cash, as
partial liquidated damages and not as a penalty, equal to 1.5% of the value of
the Shares on the date of this Agreement; and (y) on each monthly anniversary
of each such Event Date (if the applicable Event shall not have been cured by
such date) until the applicable Event is cured, the Company shall pay to Dawson
an amount in cash, as partial liquidated damages and not as a penalty, equal to
1.5% of the value of the Shares on the date of this Agreement; provided,
however, in no event shall the Company pay any amounts hereunder in excess of
twelve percent (12%) of the value of the Shares on the date of this
Agreement.  If the Company fails to pay
any partial liquidated damages pursuant to this Section in full within seven
days after the date payable, the Company will pay interest thereon at a rate of
10% per annum (or such lesser maximum amount that is permitted to be paid by
applicable law) to Dawson, accruing daily from the date such partial liquidated
damages are due until such amounts, plus all such interest thereon, are paid in
full. The partial liquidated damages pursuant to the terms hereof shall apply
on a daily pro-rata basis for any portion of a month prior to the cure of an
Event, except in the case of the first Event Date.  Such payments shall be Dawson’s sole and
exclusive remedy for such events.

 3
 

3.                                       Registration
Procedures.

In
connection with the Company’s registration obligations hereunder, the Company
shall:

(a)                                  (i)  Prepare and file with the Commission such
amendments, including post-effective amendments, to each Registration
Statement and the Prospectus used in connection therewith as may be necessary
to keep such Registration Statement continuously effective as to the applicable
Registrable Securities for its Effectiveness Period and prepare and file with
the Commission such additional Registration Statements in order to register for
resale under the Securities Act all of the Registrable Securities; (ii) cause
the related Prospectus to be amended or supplemented by any required Prospectus
supplement, and as so supplemented or amended to be filed pursuant to Rule 424;
provided, however, that on the
Business Day following the Effectiveness Date, the Company shall file with the
Commission in accordance with Rule 424 the final prospectus to be used in
connection with sales pursuant to the Registration Statement (a “Final Prospectus Filing”);
provided, further, however, that
any advance notification provisions set forth in this Agreement, including
without limitation Section 3(b), shall not apply to the extent that such
provisions would render impracticable the Final Prospectus Filing within the
period specified in this Section 3(a)(ii); (iii) respond as promptly as
reasonably possible to any comments received from the Commission with respect
to each Registration Statement or any amendment thereto and, as promptly as
reasonably possible provide Dawson true and complete copies of all
correspondence from and to the Commission relating to such Registration
Statement that would not result in the disclosure to Dawson of material and non-public
information concerning the Company; and (iv) comply in all material respects
with the provisions of the Securities Act and the Exchange Act with respect to
the Registration Statements, the delivery of the Prospectus or Prospectuses and
the disposition of all Registrable Securities covered by each Registration
Statement.

(b)                                 Notify
Dawson as promptly as reasonably possible and (if requested by any such Person)
confirm such notice in writing as promptly as reasonably possible (i)(A) when a
Prospectus or any Prospectus supplement or post-effective amendment to a
Registration Statement is proposed to be filed; (B) when the Commission
notifies the Company whether there will be a “review” of such Registration
Statement and whenever the Commission comments in writing on such Registration
Statement (the Company shall provide true and complete copies thereof and all
written responses thereto to Dawson that pertain to Dawson as a Selling
Stockholder or to the Plan of Distribution, but not information which the Company
believes would constitute material and non-public information); and (C) with
respect to each Registration Statement or any post-effective amendment,
when the same has become effective; (ii) of any request by the Commission or
any other Federal or state governmental authority for amendments or supplements
to a Registration Statement or Prospectus or for additional information; (iii)
of the issuance by the Commission of any stop order suspending the
effectiveness of a Registration Statement covering any or all of the
Registrable Securities or the initiation of any Proceedings for that purpose;
(iv) of the receipt by the Company of any notification with respect to the
suspension of the qualification or exemption from qualification of any of the
Registrable Securities for sale in any jurisdiction, or the initiation or
threatening of any Proceeding for such purpose; and (v) of the occurrence of
any event or passage of time that makes the financial 

 4
 

statements included in a Registration
Statement ineligible for inclusion therein or any statement made in such
Registration Statement or Prospectus or any document incorporated or deemed to
be incorporated therein by reference untrue in any material respect or that
requires any revisions to such Registration Statement, Prospectus or other
documents so that, in the case of such Registration Statement or the
Prospectus, as the case may be, it will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.

(c)                                  Use
its commercially reasonable best efforts to avoid the issuance of, or, if
issued, obtain the withdrawal of (i) any order suspending the effectiveness of
a Registration Statement, or (ii) any suspension of the qualification (or
exemption from qualification) of any of the Registrable Securities for sale in
any jurisdiction, at the earliest practicable moment.

(d)                                 Cooperate
with Dawson to facilitate the timely preparation and delivery of certificates
representing Registrable Securities to be delivered to a transferee pursuant to
the Registration Statements, which certificates shall be free, to the extent
permitted by the Settlement Agreement, of all restrictive legends, and to
enable such Registrable Securities to be in such denominations and registered
in such names as Dawson may request.

(e)                                  Upon
the occurrence of any event contemplated by Section 3(b)(v), as promptly as
reasonably possible, prepare a supplement or amendment, including a post-effective
amendment, to the affected Registration Statements or a supplement to the
related Prospectus or any document incorporated or deemed to be incorporated
therein by reference, and file any other required document so that, as
thereafter delivered, no Registration Statement nor any Prospectus will contain
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.

4.                                       Registration
Expenses.  All fees and expenses
incident to the performance of or compliance with this Agreement by the Company
shall be borne by the Company whether or not any Registrable Securities are
sold pursuant to a Registration Statement.

5.                                       Indemnification.

(a)                                  Indemnification
by the Company.  The Company shall,
notwithstanding any termination of this Agreement, indemnify and hold harmless
Dawson, the officers, directors, agents, investment advisors, partners, members
and employees of each of them, each Person who controls Dawson (within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act)
and the officers, directors, agents and employees of each such controlling
Person, to the fullest extent permitted by applicable law, from and against any
and all losses, claims, damages, liabilities, costs (including, without
limitation, reasonable costs of preparation and reasonable attorneys’ fees) and
expenses (collectively, “Losses”)
(Losses shall not include any diminution in value of the Registrable
Securities), as incurred, arising out of or relating to any untrue or alleged
untrue statement of a material fact contained in any Registration Statement, any
Prospectus or any form of prospectus or in any amendment or supplement thereto
or in any preliminary prospectus, or arising out of or relating to any omission
or alleged omission of a 

 5
 

material fact required to be stated therein
or necessary to make the statements therein (in the case of any Prospectus or
form of prospectus or supplement thereto, in light of the circumstances under
which they were made) not misleading, except to the extent, but only to the
extent, that (1) such untrue statements or omissions are based solely upon
information regarding Dawson furnished in writing to the Company by Dawson
expressly for use therein, or to the extent that such information relates to
Dawson or Dawson’s proposed method of distribution of Registrable Securities
and was reviewed and expressly approved in writing by Dawson expressly for use
in the Registration Statement, such Prospectus or such form of Prospectus or in
any amendment or supplement thereto (it being understood that Dawson has
approved Annex A hereto for this purpose) or (2) in the case of an occurrence
of an event of the type specified in Section 3(c)(ii)-(v), the use by Dawson of
an outdated or defective Prospectus after the Company has notified Dawson in
writing that the Prospectus is outdated or defective and prior to the receipt
by Dawson of an Advice or an amended or supplemented Prospectus, but only if
and to the extent that following the receipt of the Advice or the amended or
supplemented Prospectus the misstatement or omission giving rise to such Loss
would have been corrected.  The Company
shall notify Dawson promptly of the institution, threat or assertion of any
Proceeding of which the Company is aware in connection with the transactions
contemplated by this Agreement.

(b)                                 Indemnification
by Dawson. Dawson shall, severally and not jointly, indemnify and hold
harmless the Company, its directors, officers, agents and employees, each
Person who controls the Company (within the meaning of Section 15 of the
Securities Act and Section 20 of the Exchange Act), and the directors,
officers, agents or employees of such controlling Persons, to the fullest
extent permitted by applicable law, from and against all Losses, as incurred,
arising solely out of or based solely upon: (x) Dawson’s failure to comply with
the prospectus delivery requirements of the Securities Act or (y) any untrue
statement of a material fact contained in any Registration Statement, any
Prospectus, or any form of prospectus, or in any amendment or supplement
thereto, or arising solely out of or based solely upon any omission of a
material fact required to be stated therein or necessary to make the statements
therein not misleading to the extent, but only to the extent that, (1) such
untrue statements or omissions are based solely upon information regarding
Dawson furnished in writing to the Company by Dawson expressly for use therein,
or to the extent that such information relates to Dawson or Dawson’s proposed
method of distribution of Registrable Securities and was reviewed and expressly
approved in writing by Dawson expressly for use in the Registration Statement
(it being understood that Dawson has approved Annex A hereto for this purpose),
such Prospectus or such form of Prospectus or in any amendment or supplement
thereto or (2) in the case of an occurrence of an event of the type specified
in Section 3(c)(ii)-(v), the use by Dawson of an outdated or defective
Prospectus after the Company has notified Dawson in writing that the Prospectus
is outdated or  defective and prior to the
receipt by Dawson of an Advice or an amended or supplemented Prospectus, but
only if and to the extent that following the receipt of the Advice or the
amended or supplemented Prospectus the misstatement or omission giving rise to
such Loss would have been corrected.  In
no event shall the liability of Dawson hereunder be greater in amount than the
dollar amount of the net proceeds received by Dawson upon the sale of the
Registrable Securities giving rise to such indemnification obligation.

(c)                                  Conduct
of Indemnification Proceedings. If any Proceeding shall be brought or
asserted against any Person entitled to indemnity hereunder (an “Indemnified Party”),
such Indemnified Party shall promptly notify the Person from whom indemnity is 

 6
 

sought (the “Indemnifying Party”) in writing, and the
Indemnifying Party shall assume the defense thereof, including the employment
of counsel reasonably satisfactory to the Indemnified Party and the payment of
all fees and expenses incurred in connection with defense thereof; provided,
that the failure of any Indemnified Party to give such notice shall not relieve
the Indemnifying Party of its obligations or liabilities pursuant to this
Agreement, except (and only) to the extent that it shall be finally determined
by a court of competent jurisdiction (which determination is not subject to
appeal or further review) that such failure shall have proximately and
materially adversely prejudiced the Indemnifying Party.

An
Indemnified Party shall have the right to employ separate counsel in any such
Proceeding and to participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Party or Parties
unless:  (1) the Indemnifying Party has
agreed in writing to pay such fees and expenses; (2) the Indemnifying Party
shall have failed promptly to assume the defense of such Proceeding and to
employ counsel reasonably satisfactory to such Indemnified Party in any such
Proceeding; or (3) the named parties to any such Proceeding (including any
impleaded parties) include both such Indemnified Party and the Indemnifying
Party, and such Indemnified Party shall have been advised by counsel that a
conflict of interest is likely to exist if the same counsel were to represent
such Indemnified Party and the Indemnifying Party (in which case, if such
Indemnified Party notifies the Indemnifying Party in writing that it elects to
employ separate counsel at the expense of the Indemnifying Party, the
Indemnifying Party shall not have the right to assume the defense thereof and
such counsel shall be at the expense of the Indemnifying Party).  The Indemnifying Party shall not be liable
for any settlement of any such Proceeding effected without its written consent,
which consent shall not be unreasonably withheld.  No Indemnifying Party shall, without the
prior written consent of the Indemnified Party, effect any settlement of any
pending Proceeding in respect of which any Indemnified Party is a party, unless
such settlement includes an unconditional release of such Indemnified Party
from all liability on claims that are the subject matter of such Proceeding.

All
fees and expenses of the Indemnified Party (including reasonable fees and
expenses to the extent incurred in connection with investigating or preparing
to defend such Proceeding in a manner not inconsistent with this Section) shall
be paid to the Indemnified Party, as incurred, within ten Trading Days of
written notice thereof to the Indemnifying Party (regardless of whether it is
ultimately determined that an Indemnified Party is not entitled to
indemnification hereunder; provided, that the Indemnifying Party may require
such Indemnified Party to undertake to reimburse all such fees and expenses to
the extent it is finally judicially determined that such Indemnified Party is
not entitled to indemnification hereunder).

(d)                                 Contribution.  If a claim for indemnification under Section
5(a) or 5(b) is unavailable to an Indemnified Party (by reason of public policy
or otherwise), then each Indemnifying Party, in lieu of indemnifying such
Indemnified Party, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such Losses, in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party and
Indemnified Party in connection with the actions, statements or omissions that
resulted in such Losses as well as any other relevant equitable
considerations.  The relative fault of
such Indemnifying Party and Indemnified Party shall be determined by reference
to, among other things, whether any action in question, including any untrue or
alleged untrue statement of a material fact or omission or 

 7
 

alleged omission of a material fact, has been
taken or made by, or relates to information supplied by, such Indemnifying Party
or Indemnified Party, and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such action, statement or
omission.  The amount paid or payable by
a party as a result of any Losses shall be deemed to include, subject to the
limitations set forth in Section 5(c), any reasonable attorneys’ or other
reasonable fees or expenses incurred by such party in connection with any
Proceeding to the extent such party would have been indemnified for such fees
or expenses if the indemnification provided for in this Section was available
to such party in accordance with its terms.

The
parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 5(d) were determined by pro rata allocation or by any
other method of allocation that does not take into account the equitable
considerations referred to in the immediately preceding paragraph.  Notwithstanding the provisions of this
Section 5(d), Dawson shall be required to contribute, in the aggregate, any
amount in excess of the amount by which the proceeds actually received by
Dawson from the sale of the Registrable Securities subject to the Proceeding
exceeds the amount of any damages that Dawson has otherwise been required to
pay by reason of such untrue or alleged untrue statement or omission or alleged
omission.

The
indemnity and contribution agreements contained in this Section are in addition
to any liability that the Indemnifying Parties may have to the Indemnified
Parties.

6.                                       Miscellaneous.

(a)                                  Compliance.  Dawson covenants and agrees that it will
comply with the prospectus delivery requirements of the Securities Act as
applicable to it in connection with sales of Registrable Securities pursuant to
the Registration Statement.

(b)                                 Discontinued
Disposition.  Dawson agrees that,
upon receipt of a notice from the Company of the occurrence of any event of the
kind described in Section 3(c), Dawson will forthwith discontinue disposition
of such Registrable Securities under the Registration Statement until Dawson’s
receipt of the copies of the supplemented Prospectus and/or amended
Registration Statement or until it is advised in writing (the “Advice”)
by the Company that the use of the applicable Prospectus may be resumed, and,
in either case, has received copies of any additional or supplemental filings
that are incorporated or deemed to be incorporated by reference in such
Prospectus or Registration Statement. 
The Company may provide appropriate stop orders to enforce the
provisions of this paragraph.

(c)                                  Amendments
and Waivers.  The provisions of this
Agreement, including the provisions of this Section 6(f), may not be amended,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may not be given, unless the same shall be in writing and
signed by the Company and Dawson.

(d)                                 Notices.  Any and all notices or other communications
or deliveries required or permitted to be provided hereunder shall be in
writing and shall be given in accordance with the terms of the Settlement
Agreement

 8
 

(e)                                  Successors
and Assigns.  This Agreement shall
inure to the benefit of and be binding upon the successors and permitted
assigns of each of the parties and shall inure to the benefit of Dawson.  Other than in connection with a merger,
consolidation, sale of all or substantially all of the Company’s assets or
other similar change in control transaction, the Company may not assign this
Agreement or any rights or obligations hereunder without the prior written
consent of Dawson.  Dawson may assign
their respective rights hereunder in the manner and to the Persons as permitted
under the Settlement Agreement.

(f)                                    Execution
and Counterparts.  This Agreement may
be executed in any number of counterparts, each of which when so executed shall
be deemed to be an original and, all of which taken together shall constitute
one and the same Agreement.  In the event
that any signature is delivered by facsimile transmission, such signature shall
create a valid binding obligation of the party executing (or on whose behalf
such signature is executed) the same with the same force and effect as if such
facsimile signature were the original thereof.

(g)                                 Governing
Law.  This Agreement is to be
construed in accordance with and governed by the internal laws of the State of
Delaware without giving effect to any choice of law rule that would cause the
application of the laws of any jurisdiction other than the internal laws of the
State of Delaware to the rights and duties of the parties. In addition, each of
the parties hereto (a) irrevocably and unconditionally consents to submit
itself to the jurisdiction of the Court of Chancery of the State of Delaware in
the event any dispute arises out of this Agreement or the transactions
contemplated by this Agreement, (b) agrees that it will not attempt to deny or
defeat such personal jurisdiction by motion or other request for leave from any
such court, (c) agrees that it will not bring any action relating to this
Agreement or the transactions contemplated by this Agreement in any court other
than the Court of Chancery of the State of Delaware, and each of the parties
irrevocably waives the right to trial by jury, (d) waives, to the fullest
extent permitted by law, the defense of an inconvenient forum to the maintenance
of such action on the Court of Chancery of the State of Delaware, and (e) each
of the parties irrevocably consents to service of process by first class
certified mail, return receipt requested, postage prepaid, to the address at
which such party is to receive notice.

(h)                                 Severability.
If any term, provision, covenant or restriction of this Agreement is held by a
court of competent jurisdiction to be invalid, illegal, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions set forth
herein shall remain in full force and effect and shall in no way be affected,
impaired or invalidated, and the parties hereto shall use their commercially
reasonable efforts to find and employ an alternative means to achieve the same
or substantially the same result as that contemplated by such term, provision,
covenant or restriction.  It is hereby
stipulated and declared to be the intention of the parties that they would have
executed the remaining terms, provisions, covenants and restrictions without
including any of such that may be hereafter declared invalid, illegal, void or
unenforceable.

(i)                                     Headings.  The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.

[Remainder of Page Intentionally Left Blank]

 9
 

In Witness Whereof,
the parties have executed this Registration Rights Agreement as of the date
first written above.

	
  

  	
   

  	
  CRDENTIA CORP.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ C. Fred Toney

  	
   

  
	
   

  	
   

  	
  Name: C. Fred Toney

  
	
   

  	
   

  	
  Title: Chairman of the Board of Directors

  

 

[Signature Pages of Investors to Follow]

 10
 

In Witness Whereof, the parties have executed this
Registration Rights Agreement as of the date first written above.

	
  

  	
  DAWSON JAMES SECURITIES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert D.
  Keyser Jr.

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Robert D. Keyser
  Jr

  	
   

  	
   

  
	
   

  	
  Title:

  	
  President

  	
   

  
	
   

  	
   

  
	
   

  	
  ADDRESS
  FOR NOTICE

  
	
   

  	
   

  
	
   

  	
  c/o:

  
	
   

  	
   

  
	
   

  	
  Street:

  
	
   

  	
   

  
	
   

  	
  City/State/Zip:

  
	
   

  	
   

  
	
   

  	
  Attention:

  
	
   

  	
   

  
	
   

  	
  Tel:

  
	
   

  	
   

  
	
   

  	
  Fax:

  
	
   

  	
   

  
	
   

  	
  Email:

  
									

 

 11

Annex A

PLAN OF
DISTRIBUTION

The Selling Stockholders and any of their pledgees,
donees, transferees, assignees and successors-in-interest may, from time to
time, sell any or all of their shares of Common Stock on any stock exchange,
market or trading facility on which the shares are traded or in private
transactions.  These sales may be at
fixed or negotiated prices.  The Selling
Stockholders may use any one or more of the following methods when selling
shares:

·                  ordinary
brokerage transactions and transactions in which the broker-dealer
solicits Investors;

·                  block
trades in which the broker-dealer will attempt to sell the shares as
agent but may position and resell a portion of the block as principal to
facilitate the transaction;

·                  purchases
by a broker-dealer as principal and resale by the broker-dealer for
its account;

·                  an
exchange distribution in accordance with the rules of the applicable exchange;

·                  privately
negotiated transactions;

·                  to
cover short sales made after the date that this Registration Statement is
declared effective by the Commission;

·                  broker-dealers
may agree with the Selling Stockholders to sell a specified number of such
shares at a stipulated price per share;

·                  a
combination of any such methods of sale; and

·                  any
other method permitted pursuant to applicable law.

The Selling Stockholders may also sell shares under
Rule 144 under the Securities Act, if available, rather than under this
prospectus.

Broker-dealers engaged by the Selling
Stockholders may arrange for other brokers-dealers to participate in
sales.  Broker-dealers may receive
commissions or discounts from the Selling Stockholders (or, if any broker-dealer
acts as agent for the purchaser of shares, from the purchaser) in amounts to be
negotiated.  The Selling Stockholders do not
expect these commissions and discounts to exceed what is customary in the types
of transactions involved.

The Selling Stockholders may from time to time
pledge or grant a security interest in some or all of the Shares owned by them
and, if they default in the performance of their secured obligations, the
pledgees or secured parties may offer and sell shares of Common Stock from time
to time under this prospectus, or under an amendment to this prospectus under
Rule 424(b)(3) or other applicable provision of the Securities Act of 1933
amending the list of selling stockholders to include the pledgee, transferee or
other successors in interest as selling stockholders under this prospectus.

Upon the Company being notified in writing by a
Selling Stockholder that any material arrangement has been entered into with a
broker-dealer for the sale of Common Stock through a block trade, special
offering, exchange distribution or secondary distribution or a purchase by a
broker or dealer, a supplement to this prospectus will be filed, if required,
pursuant to Rule 424(b) under the Securities Act, 

 A-1
 

disclosing (i) the name of
each such Selling Stockholder and of the participating broker-dealer(s), (ii)
the number of shares involved, (iii) the price at which such the shares of
Common Stock were sold, (iv)the commissions paid or discounts or concessions
allowed to such broker-dealer(s), where applicable, (v) that such
broker-dealer(s) did not conduct any investigation to verify the information
set out or incorporated by reference in this prospectus, and (vi) other facts
material to the transaction.  In
addition, upon the Company being notified in writing by a Selling Stockholder
that a donee or pledgee intends to sell more than 500 shares of Common Stock, a
supplement to this prospectus will be filed if then required in accordance with
applicable securities law.

The Selling Stockholders also may transfer the
shares of Common Stock in other circumstances, in which case the transferees,
pledgees or other successors in interest will be the selling beneficial owners
for purposes of this prospectus.

The Selling Stockholders and any broker-dealers
or agents that are involved in selling the shares may be deemed to be “underwriters”
within the meaning of the Securities Act in connection with such sales.  In such event, any commissions received by
such broker-dealers or agents and any profit on the resale of the shares
purchased by them may be deemed to be underwriting commissions or discounts
under the Securities Act.  Discounts,
concessions, commissions and similar selling expenses, if any, that can be
attributed to the sale of Securities will be paid by the Selling Stockholder
and/or the purchasers.  Each Selling
Stockholder has represented and warranted to the Company that it acquired the
securities subject to this registration statement in the ordinary course of
such Selling Stockholder’s business and, at the time of its purchase of such
securities such Selling Stockholder had no agreements or understandings,
directly or indirectly, with any person to distribute any such securities.

The Company has advised each Selling Stockholder
that it may not use shares registered on this Registration Statement to cover
short sales of Common Stock made prior to the date on which this Registration
Statement shall have been declared effective by the Commission.  In addition, the Company has advised each
Selling Stockholder that the Commission currently takes the position that
coverage of short sales “against the box” prior to the effective date of the
registration statement of which this prospectus is a part would be a violation
of Section 5 of the Securities Act, as described in Item 65, Section A, of the
Manual of Publicly Available Telephone Interpretations, dated July 1997,
compiled by the Office of Chief Counsel, Division of Corporate Finance.

If a Selling Stockholder uses this prospectus for
any sale of the Common Stock, it will be subject to the prospectus delivery
requirements of the Securities Act.  The
Selling Stockholders will be responsible to comply with the applicable
provisions of the Securities Act and Exchange Act, and the rules and
regulations thereunder promulgated, including, without limitation, Regulation
M, as applicable to such Selling Stockholders in connection with resales of their
respective shares under this Registration Statement.

The Company is required to pay all fees and expenses
incident to the registration of the shares, but the Company will not receive
any proceeds from the sale of the Common Stock. 
The Company has agreed to indemnify the Selling Stockholders against
certain losses, claims, damages and liabilities, including liabilities under
the Securities Act.

 A-2

ANNEX B

CRDENTIA CORP.

SELLING SECURITYHOLDER NOTICE AND QUESTIONNAIRE

The undersigned beneficial
owner of common stock (the “Common Stock”),
of Crdentia Corp. (the “Company”)
understands that the Company has filed or intends to file with the Securities
and Exchange Commission (the “Commission”)
a Registration Statement for the registration and resale of the Registrable
Securities, in accordance with the terms of the Registration Rights Agreement,
dated as of April 13, 2007 (the “Registration
Rights Agreement”), among the Company and Dawson named
therein.  A copy of the Registration
Rights Agreement is available from the Company upon request at the address set
forth below.  All capitalized terms used
and not otherwise defined herein shall have the meanings ascribed thereto in
the Registration Rights Agreement.

The undersigned hereby
provides the following information to the Company and represents and warrants
that such information is accurate:

QUESTIONNAIRE

1.                                      Name.

(a)                                  Full Legal Name
of Selling Securityholder

 

(b)                                 Full Legal Name
of Registered Holder (if not the same as (a) above) through which Registrable
Securities Listed in Item 3 below are held:

 

(c)                                  Full Legal Name
of Natural Control Person (which means a natural person who directly or
indirectly alone or with others has power to vote or dispose of the securities
covered by the questionnaire):

 

2.             Address
for Notices to Selling Securityholder:

 

Telephone:  

Facsimile:

Contact Person: 

 B-1
 

3.                                      Beneficial Ownership of Registrable Securities:

Type and Principal Amount of Registrable Securities beneficially owned:

 

4.                                      Broker-Dealer Status:

(a)                                  Are you a
broker-dealer?

Yes   o               No   o

Note:                   If yes, the
Commission’s staff has indicated that you should be identified as an
underwriter in the Registration Statement.

(b)                                 Are you an
affiliate of a broker-dealer?

Yes   o               No   o

(c)                                  If you are an
affiliate of a broker-dealer, do you certify that you bought the Registrable
Securities in the ordinary course of business, and at the time of the purchase
of the Registrable Securities to be resold, you had no agreements or
understandings, directly or indirectly, with any person to distribute the
Registrable Securities?

Yes   o               No   o

Note:                   If no, the
Commission’s staff has indicated that you should be identified as an
underwriter in the Registration Statement.

5. 
                              Beneficial Ownership of Other Securities of the Company Owned by the
Selling Securityholder.

Except as set forth below in this Item 5, the undersigned is
not the beneficial or registered owner of any securities of the Company other
than the Registrable Securities listed above in Item 3.

Type
and Amount of Other Securities beneficially owned by the Selling
Securityholder:

 

 B-2
 

6.                                  Relationships with the Company:

Except as set forth below, neither the undersigned nor any
of its affiliates, officers, directors or principal equity holders (owners of
5% of more of the equity securities of the undersigned) has held any position
or office or has had any other material relationship with the Company (or its
predecessors or affiliates) during the past three years.

State any exceptions here:

 

The undersigned agrees to
promptly notify the Company of any inaccuracies or changes in the information
provided herein that may occur subsequent to the date hereof and prior to the
Effective Date for the Registration Statement.

By signing below, the
undersigned consents to the disclosure of the information contained herein in
its answers to Items 1 through 6 and the inclusion of such information in the
Registration Statement and the related prospectus.  The undersigned understands that such
information will be relied upon by the Company in connection with the
preparation or amendment of the Registration Statement and the related
prospectus.

IN WITNESS WHEREOF the
undersigned, by authority duly given, has caused this Notice and Questionnaire
to be executed and delivered either in person or by its duly authorized agent.

	
  Dated:

  	
   

  	
  Beneficial Owner:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  
						

 

PLEASE FAX A COPY OF THE COMPLETED AND EXECUTED NOTICE AND
QUESTIONNAIRE, AND RETURN THE ORIGINAL BY OVERNIGHT MAIL, TO:

Morrison &
Foerster LLP

12531 High
Bluff Drive, Suite 100

San Diego, CA
92130

Facsimile
No.:  (858) 523-2843

Attention: 
Benjamin J. Sowards, Esq.

 B-3

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00123-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00123-of-00352.parquet"}]]