Document:

Exhibit 10.2

 

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

 

SECURED PROMISSORY NOTE

 

	
  Principal Amount: $1,500,000.00

  	
   

  	
  San
  Francisco, California

  
	
  Interest Rate: 5.00% per annum

  	
   

  	
  November 18,
  2005

  

 

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

 

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

 

 

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

 

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

 

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

 

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

 

2

 

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

 

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

 

8.  Holder
Representations.

 

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

 

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

 

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

 

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

 

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

 

3

 

Regulation D promulgated under the 1933 Act.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

[signature pages follow]

 

4

 

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

 

	
   

  	
  CRDENTIA CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James D.
  Durham

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title: Chief
  Executive Officer

  
						

 

	
   

  	
  BAKER ANDERSON CHRISTIE, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James D.
  Durham

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title: Chief
  Executive Officer

  
						

 

 

	
   

  	
  NURSES NETWORK, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James D.
  Durham

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title: Chief
  Executive Officer

  
						

 

 

	
   

  	
  NEW AGE STAFFING, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James D.
  Durham

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title: Chief
  Executive Officer

  
						

 

5

 

	
   

  	
  PSR NURSES, LTD.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  PSR Nurse
  Recruiting, Inc.

  	
   

  
	
   

  	
   

  
	
   

  	
  Its:  General Partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James D.
  Durham

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title: Chief
  Executive Officer

  
							

 

 

	
   

  	
  PSR NURSE RECRUITING, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James D.
  Durham

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title: Chief
  Executive Officer

  
						

 

 

	
   

  	
  PSR NURSES HOLDINGS CORP.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James D.
  Durham

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title: Chief
  Executive Officer

  
						

 

 

	
   

  	
  CRDE CORP.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James D.
  Durham

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title: Chief
  Executive Officer

  
						

 

 

	
   

  	
  ARIZONA HOME HEALTH

  CARE/PRIVATE DUTY, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James D.
  Durham

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title: Chief
  Executive Officer

  
						

 

6

 

	
   

  	
  CARE PROS STAFFING, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James D.
  Durham

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title: Chief
  Executive Officer

  
						

 

 

	
   

  	
  HIP HOLDING, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James D.
  Durham

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title: Chief
  Executive Officer

  
						

 

 

	
   

  	
  HEALTH INDUSTRY 

  PROFESSIONALS, L.L.C.

  
	
   

  	
   

  
	
   

  	
  By: HIP
  Holding, Inc.

  
	
   

  	
   

  
	
   

  	
  Its:  Managing Member

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James D.
  Durham

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title: Chief
  Executive Officer

  
						

 

	
   

  	
  TRAVMED USA, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James D.
  Durham

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title: Chief
  Executive Officer

  
						

 

	
   

  	
  PRIME STAFF, LP

  
	
   

  	
   

  
	
   

  	
  By: CRDE
  Corp.

  

  Its:  General Partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James D.
  Durham

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title: Chief
  Executive Officer

  
						

 

7

 

	
   

  	
  MINT MEDICAL STAFFING 

  ODESSA, LP

  
	
   

  	
   

  
	
   

  	
  By: CRDE
  Corp.

  

  Its:  General Partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James D.
  Durham

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title: Chief
  Executive Officer

  
						

 

	
   

  	
  GHS ACQUISITION CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James D.
  Durham

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title: Chief
  Executive Officer

  
						

 

8

 

Acknowledged
and Agreed to:

 

MEDCAP
PARTNERS L.P.

 

	
  By:

  	
  MedCap Management & Research LLC

  	
   

  
	
  Its:

  	
  General Partner

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ C. Fred
  Toney

  	
   

  	
   

  
	
   

  	
  Name:   C.
  Fred Toney

  	
   

  
	
   

  	
  Title:
  Managing Member

  	
   

  
				

 

9Exhibit 10.3

 

AMENDED
AND RESTATED SECURITY AGREEMENT

 

This SECURITY AGREEMENT, dated as of
November 18, 2005 (“Security Agreement”), is made
by Crdentia Corp., a Delaware corporation (“Crdentia”), Baker Anderson
Christie, Inc., a California corporation, Nurses Network, Inc., a California
corporation, New Age Staffing, Inc., a Delaware corporation, PSR Nurses, Ltd.,
a Texas limited partnership, PSR Nurse Recruiting, Inc., a Texas corporation,
PSR Nurses Holdings Corp., a Texas corporation, CRDE Corp., a Delaware
corporation, Arizona Home Health Care/Private Duty, Inc., an Arizona
corporation, and Care Pros Staffing, Inc, a Texas corporation, HIP Holding,
Inc., a Delaware corporation, Health Industry Professionals, L.L.C., a Michigan
limited liability company, Travmed USA, Inc., a North Carolina corporation,
Prime Staff, LP, a Texas limited partnership, Mint Medical Staffing Odessa, LP,
a Texas limited partnership and GHS Acquisition Corporation, a Delaware
corporation (each individually, and referred to collectively as, “Grantor”), in favor of MedCap
Partners L.P. (referred to as “Grantee”).

 

RECITALS

 

WHEREAS, Grantee lent $500,000 (the “First Loan”) to Grantor on November
15, 2005 in connection with which Grantor has delivered to Grantee a secured
promissory note dated as of November 15, 2005 (the “First
Note”) executed by Grantor in favor of Grantee in an aggregate
principal amount of Five Hundred Thousand Dollars ($500,000).

 

WHEREAS, Grantee lent $1,500,000 (the “Second Loan”, together with the
First Loan, the “Loans”) to Grantor on
November 18, 2005 in connection with which Grantor has delivered to Grantee a
secured promissory note dated as of the date hereof (the “Second
Note”, together with the First Note, the “Notes”)
executed by Grantor in favor of Grantee in an aggregate principal amount of One
Million Five Hundred Thousand Dollars ($1,500,000); and

 

WHEREAS, in order
to induce Grantee to make the Loan to Grantor, each Grantor has agreed to grant
a security interest in the Collateral (as defined below) to Grantee to secure
the payment and performance by each Grantor of its respective obligations under
the Note, subject to certain liens and encumbrances existing as of the date
hereof;

 

ACCORDINGLY, for
good and valuable consideration, the adequacy of which is hereby acknowledged,
the parties agree as follows:

 

AGREEMENT

 

1.             DEFINED TERMS.  When used in this Security Agreement, the
following terms shall have the following meanings (such meanings being equally
applicable to both the singular and plural forms of the terms defined):

 

“Collateral”  means all of the right, title and interest of
each Grantor in and to and under all of the following personal property and
fixtures (and all rights therein) of each Grantor, or in which such Grantor has
any right, wherever situated, in each case whether now existing or hereafter
from time to time acquired:

 

a.             each and every Account;

 

b.             all cash;

 

c.             all Chattel Paper (including
without limitation all Tangible Chattel Paper and all Electronic Chattel
Paper);

 

1

 

d.             all Commercial Tort Claims;

 

e.             all computer programs of Grantor
and all intellectual property rights therein and all other proprietary
information of Grantor, including but not limited to all United States trade
secrets and proprietary information necessary to operate the business of
Grantor;

 

f.              all contracts between Grantor and
one or more additional parties, together with all rights which Grantor may have
under any such contract, including any and all rights to receive and demand
payments under any or all contracts, any and all rights to receive and compel
performance under any or all contracts and any or all other rights, interests
and claims now existing or in the future arising in connection with any or all
contracts;

 

g.             all copyrights owned by Grantor,
whether United States or foreign;

 

h.             all Equipment;

 

i.              all Deposit Accounts and all other
demand, deposit, time, savings, cash management, passbook and similar accounts
maintained by Grantor with any person and all monies, securities, Instruments
and other investments deposited or required to be deposited in any of the
foregoing;

 

j.              all Documents;

 

k.             all General Intangibles;

 

l.              all Goods;

 

m.            all Instruments;

 

n.             all Inventory;

 

o.             all Investment Property;

 

p.             all Letter-of-Credit Rights
(whether or not the respective letter of credit is evidenced by a writing);

 

q.             all right, title and interest in
and to any trademarks, service marks and trade names now held or hereafter
acquired by Grantor whether in the United States or foreign, together with the
registrations and right to all renewals thereof, and the goodwill of the
business of Grantor symbolized by such marks and trade names;

 

r.              all patents to which Grantor now
or hereafter has any right, title or interest therein, and any divisions,
continuations (including, but not limited to, continuations-in-part) and
improvements thereof, as well as any application for a patent now or hereafter
made by Grantor;

 

s.             to the extent permitted to be
assigned by the terms thereof or by any law, all licenses, permits, rights,
orders, variances, franchises or authorizations of or from any governmental
authority or agency;

 

2

 

t.              all Software and all Software
licensing rights, all writings, plans, specifications and schematics, all
engineering drawings, customer lists, goodwill and licenses, and all recorded
data of any kind or nature, regardless of the medium of recording;

 

u.             all Supporting Obligations; and

 

v.             all Proceeds and products of any
and all of the foregoing.

 

All
terms in this definition of “Collateral” that are not otherwise defined in this
Security Agreement shall have the meaning provided for such terms in the UCC as
in effect on the date hereof.

 

“Event of Default”
means (a) any failure by any Grantor to pay or perform any of its Secured
Obligations after the expiration of any applicable grace period; (b) the
receipt by Grantee at any time after the date hereof of any report, information
or notice indicating that Grantee’s security interest is not prior to all other
security interests or other interests (other than the Permitted Liens)
reflected in such report, information or notice; (c) any material breach by any
Grantor of any warranty, representation, or covenant set forth herein; (d) the
commencement by any Grantor of any case, proceeding or other action relating to
such Grantor in bankruptcy or seeking any relief under any bankruptcy,
insolvency, reorganization, liquidation, dissolution or other similar act or
law of any jurisdiction, or the making of a general assignment for the benefit
of creditors by such Grantor or the admission by any Grantor in writing of its
inability to pay its debts generally as they become due; (e) the commencement
against any Grantor of any case, proceeding or other action in bankruptcy or
other similar act or law of any jurisdiction, which involuntary case or
proceeding shall remain unstayed for a period of sixty (60) days; or (f) the
occurrence of any “Event of Default” as defined in the Note.

 

“Lien” means any mortgage, lien, deed
of trust, charge, pledge, security interest or other encumbrance.

 

“Loan
Documents” means any documents, agreements, and
instruments executed and delivered in connection with the Senior Indebtedness,
including, without limitation, (i) that certain Second Amended and Restated Loan
and Security Agreement — Revolving Loans, dated as of May 16, 2005, by and
among Grantor and Senior Lender, and (ii) that certain Amended and Restated Loan
and Security Agreement – Term Loans, dated as of May 16, 2005, by and among
Grantor and Senior Lender.

 

“Permitted Liens” means: (a) any
Liens existing on the date of this Security Agreement and set forth on Schedule
A attached hereto; (b) Liens for taxes, fees, assessments or other governmental
charges or levies, either not delinquent or being contested in good faith by
appropriate proceedings, provided the same have no priority over any of Grantee’s
security interests; and (c) purchase money security interests, as defined under
Article 9 of the UCC.

 

“Proceeds”
means and includes any “proceeds,” as
such term is defined in Article 9 of the UCC, now or hereafter owned or
acquired or received by any Grantor or in which any Grantor now holds or
hereafter acquires or receives any right or interest in respect of the
Collateral, and shall include, in any event, any and all (a) cash or other
forms of money, currency or funds or other property of any nature, type or land
whatsoever payable to such Grantor from

 

3

 

time to time in respect of any of the Collateral, including upon the
sale, lease, license, exchange or other disposition of any of the Collateral;
(b) proceeds of any insurance, indemnity, warranty or guaranty payable to
any Grantor from time to time with respect to any of the Collateral, including
by reason of the loss, nonconformity or interference with the use of, defects
or infringement of rights in, or damage to, any of the Collateral;
(c) payments (in any form whatsoever) made or due and payable to any
Grantor from time to time in connection with any requisition, confiscation,
condemnation, seizure or forfeiture of all or any part of the Collateral by any
governmental authority (or any person acting under color of governmental
authority); (d) claims of any Grantor against third parties arising out of
the loss, nonconformity, interference with the use of, defects or infringements
of rights in, or damage to, any of the Collateral; (e) rights arising out
of any of the Collateral; and (f) other property of any nature, type or
kind whatsoever from time to time paid or payable under or in connection with,
collected on, or distributed on account of, any of the Collateral.

 

“Secured Obligations” means (a) the
obligations of any Grantor under the Note, (b) the obligation of any Grantor to
pay any fees, costs and expenses of Grantee under the Note, and (c) the
obligation of any Grantor to pay all reasonable fees, costs and expenses of
Grantee under Section 7(c) hereof.

 

“Security Agreement” means this
Security Agreement and all Schedules hereto, as the same may from time to time
be amended, modified, supplemented or restated.

 

“Senior
Indebtedness” means all principal, interest and other
obligations at any time due and owing by Grantor to Senior Lender arising out
of or incurred in connection with the Loan Documents (and any indebtedness
which refinances such principal, interest or other obligations), as modified,
extended, renewed or restated, whether direct or contingent, and whether now existing
or hereafter created.  Senior
Indebtedness shall include, without limitation: (i) interest which accrues
on the principal amount of the Senior Indebtedness, and (ii) other
obligations arising out of or in connection with the Loan Documents or other
documents executed in favor of Senior Lender in connection with the Loan
Documents, in each instance subsequent to the commencement of a case under
Chapter 11 of the Bankruptcy Code, whether or not such interest is allowed
as a claim in such case.

 

“Senior
Lender” means Bridge Healthcare Finance, LLC and Bridge
Opportunity Finance, LLC.

 

“UCC” means the Uniform Commercial
Code as the same may from time to time be in effect in the State of California
(and each reference in this Security Agreement to an Article thereof
(denoted as a Division of the UCC as adopted and in effect in the State of
California) shall refer to that Article (or Division, as applicable) as
from time to time in effect, which in the case of Article 9 shall include
and refer to Revised Article 9 from and after the date Revised
Article 9 shall become effective in the State of California); provided, however, in the event that, by reason of mandatory
provisions of law, any or all of the attachment, perfection or priority of
Grantee’s security interest in any Collateral is governed by the Uniform
Commercial Code as in effect in a jurisdiction other than the State of
California, the term “UCC” shall mean
the Uniform Commercial Code (including the Articles thereof) as in effect at
such time in such

 

4

 

other jurisdiction for purposes of the provisions hereof relating to
such attachment, perfection or priority and for purposes of definitions related
to such provisions.

 

2.             GRANT OF SECURITY INTEREST.  As security for the full, prompt,  complete and final payment and performance
when due (whether at stated maturity, by acceleration or otherwise) of all the
Secured Obligations and in order to induce Grantee to make the Loan to Grantor,
each Grantor hereby grants, assigns, conveys, mortgages, pledges, hypothecates
and transfers to Grantee a continuing security interest in all of its
respective right, title and interest in and to all Collateral of such Grantor,
whether now owned or hereafter acquired, together with all Proceeds of the
foregoing and all accessions to, substitutions and replacements therefor.

 

3.             SUBORDINATION.  Grantee hereby subordinates in right of
payment all of the Secured Obligations to the final payment of all of the
Senior Indebtedness.  Grantee hereby
agrees that any Liens, security interests, claims and rights of any kind in
favor of, or for the benefit of, Grantee in, to or against Grantor or Grantor’s
property shall be junior, subordinate and subject in all respects to the Liens,
security interests, claims and rights against Grantor and/or Grantor’s property
of Senior Lender arising from or out of the Senior Indebtedness, which shall
under all circumstances be and remain superior and prior in right of payment
and enforcement to any Liens arising in favor of Grantee regardless of the
order or time as of which any Liens attach to any of Grantor’s property, and
notwithstanding the usual application of the priority provisions of the UCC as
in effect in any jurisdiction or any other applicable law or judicial decision
of any jurisdiction, or whether Grantee is perfected without filing or
possession in any part of the Collateral, the order or time of UCC filings or
any other filings or recordings, the order or time of granting of any such Liens,
or the physical possession of any of Grantor’s property until the Loan
Documents are terminated in accordance with the terms thereof.

 

4.             REPRESENTATIONS AND WARRANTIES OF GRANTOR.  Subject to Grantor’s obligations to the
Senior Lender under the Loan Documents, each Grantor hereby represents and
warrants, on a joint and several basis, to Grantee that:

 

(a)           Grantor is a corporation or limited
partnership, validly existing under the laws of the state of its jurisdiction
or incorporation or organization, as applicable.  Grantor has the requisite power and all
necessary governmental authority to conduct its business as currently being
conducted.  Grantor shall not change its
taxpayer identification number, jurisdiction of incorporation or chief
executive office, principal place of business or remove or cause to be removed,
the records concerning the Collateral from the premises where such records are
currently maintained without thirty (30) days’ prior written notice to Grantee.

 

(b)           Except for the security interest granted
to Grantee under this Security Agreement and the Permitted Liens, Grantor is
the sole legal and equitable owner or, has the power to transfer each item of
the Collateral in which it purports to grant a security interest hereunder,
having good and marketable title thereto.

 

(c)           No effective security agreement,
financing statement, equivalent security or lien instrument or continuation
statement covering all or any part of the Collateral exists, except such as may
have been filed by Grantor in favor of Grantee pursuant to this Security
Agreement, and except such as may have been or shall be filed in connection
with the Permitted Liens.

 

5

 

(d)           This Security Agreement creates a legal
and valid security interest on and in all of the Collateral in which Grantor
now has rights and all filings and other actions necessary or desirable to
perfect and protect such security interest have been duly taken.  Accordingly, Grantor has undertaken all
necessary action required by it to create a fully perfected security interest
for the benefit of Grantee in all of the Collateral in which such Grantor now
has rights, subject only to the Permitted Liens.  This Security Agreement will create a legal
and valid and fully perfected security interest in the Collateral in which
Grantor later acquires rights, when Grantor acquires those rights, subject only
to the Permitted Liens and any additional filings to be made by Grantee as may
be necessary to perfect Grantee’s security interest in subsequent ownership
rights.

 

(e)           The Collateral is presently located at
such address(es) set forth on Schedule B attached hereto.

 

5.             [This section intentionally left
blank.]

 

6.             COVENANTS.  Subject to each Grantor’s obligations to the
Senior Lender under the Loan Documents, each Grantor covenants and agrees with
Grantee that from and after the date of this Security Agreement and until the
Secured Obligations have been performed and paid in full as follows:

 

6.1          Disposition of Collateral.  Other than in the ordinary course of
business, Grantor shall not sell, lease, transfer or otherwise dispose of any
of the Collateral, or attempt or contract to do so.  Notwithstanding the preceding, Grantor may
sell, and Grantee agrees to release, upon request of Grantor,  the security interest granted hereunder on
and in connection with, any Collateral; provided that, the net proceeds derived
from the sale of the Collateral shall be paid to the Grantee after payment of
any debts or obligations secured by the Permitted Liens on the Collateral being
sold and the reasonable costs of such a sale such as, without limitation,
freight costs and commissions; and; provided further, that any such sale of
Collateral shall be conducted in an arms’ length transaction and for not less
than an amount that reasonably would be considered to be the then fair market
value of the Collateral.  A failure by
Grantor to apply the proceeds of a sale of any Collateral in accordance with
the provisions of the previous sentence shall be a breach of this Security
Agreement by Grantor.

 

6.2          Change of Jurisdiction of Organization, Relocation of
Business or Collateral.  Grantor
shall not change its jurisdiction of organization, relocate its chief executive
office, principal place of business or its records, or allow the relocation of
any Collateral from such address(es) provided to the Grantee pursuant to
Section 4(e) above without thirty (30) days’ prior written notice to Grantee.

 

6.3          Limitation on Liens on Collateral.  Grantor shall not, directly or indirectly,
create, permit or suffer to exist, and shall defend the Collateral against and
take such other action as is necessary to remove, any Lien on the Collateral,
except (a) the Permitted Liens and (b) the Lien granted to Grantee under this
Security Agreement.

 

6

 

6.4          Insurance.  Grantor shall maintain insurance policies
insuring the Collateral against loss or damage from such risks and in such
amounts and forms and with such companies as are customarily maintained by
businesses similar to Grantor’s.

 

6.5          Maintenance of Records.  Grantor shall keep and maintain at its own
cost and expense satisfactory and complete records of the Collateral.

 

6.6          Further Assurances; Pledge of Instruments.  At any time and from time to time, upon the
written request of Grantee, and at the sole expense of Grantor, Grantor shall
promptly and duly execute and deliver any and all such further instruments and
documents and take such further action as Grantee may reasonably deem necessary
or desirable to obtain the full benefits of this Security Agreement.  If any amount payable under or in connection
with any of the Collateral is or shall become evidenced by any Instrument, such
Instrument, other than checks and notes received in the ordinary course of
business, shall be duly endorsed in a manner reasonably satisfactory to Grantee
and delivered to Grantee promptly and in any event within five (5) business
days of  Grantor’s receipt thereof.

 

7.             RIGHTS AND REMEDIES UPON DEFAULT.

 

(a)             Subject to the rights of Senior Lender
under the Loan Documents and Section 3 hereof, after any Event of Default shall
have occurred and while such Event of Default is continuing, Grantee may
exercise in addition to all other rights and remedies granted to it under this
Security Agreement and the Note and under any other instrument or agreement
securing, evidencing or relating to the Secured Obligations, all rights and
remedies of a secured party under the UCC. 
Without limiting the generality of the foregoing, each Grantor expressly
agrees that in any such event Grantee, without demand of performance or other
demand, advertisement or notice of any kind (except the notice specified below
of time and place of public or private sale) to or upon Grantor or any other
person (all and each of which demands, advertisements and notices are hereby
expressly waived to the maximum extent permitted by the UCC and other
applicable law), may (i) reclaim, take possession, recover, store, maintain,
finish, repair, prepare for sale or lease, shop, advertise for sale or lease
and sell or lease (in the manner provided herein) the Collateral, and in
connection with the liquidation of the Collateral, and (ii) forthwith collect,
receive, appropriate and realize upon the Collateral, or any part thereof, and
may forthwith sell, lease, assign, give an option or options to purchase or
sell or otherwise dispose of and deliver said Collateral (or contract to do
so), or any part thereof, in one or more parcels at public or private sale or
sales, at any exchange or broker’s board or at any of Grantee’s offices or
elsewhere at such prices as it may deem best, for cash or on credit or for
future delivery without assumption of any credit risk.  To the extent Grantor has the right to do so,
each Grantor authorizes Grantee, on the terms set forth in this Section 7,
to enter the premises where the Collateral is located, to take possession of
the Collateral, or any part of it, and to pay, purchase, contract, or
compromise any encumbrance, charge, or lien which, in the opinion of Grantee,
appears to be prior or superior to its security interest.  Grantee shall have the right upon any such
public sale or sales and, to the extent permitted by law, upon any such private
sale or sales, to purchase the whole or any part of said Collateral so sold,
free of any right or equity of redemption, which equity of redemption Grantor
hereby releases.  Each Grantor further
agrees, at Grantee’s request, to assemble its Collateral and make it available
to Grantee at places which Grantee shall reasonably select, whether at Grantor’s
premises or elsewhere.  Grantee shall
apply

 

7

 

the net proceeds of any such collection, recovery, receipt,
appropriation, realization or sale as provided in Section 7(d) below, with
each Grantor remaining jointly and severally liable for any deficiency
remaining unpaid after such application, and only after so paying over such net
proceeds and after the payment by Grantee of any other amount required by any
provision of law, need Grantee account for the surplus, if any, to
Grantor.  To the maximum extent permitted
by applicable law, each Grantor waives all claims, damages, and demands against
Grantee arising out of the repossession, retention or sale of the
Collateral.  Each Grantor agrees that
Grantee need not give more than ten (10) days’ notice of the time and place of
any public sale or of the time after which a private sale may take place and
that such notice is reasonable notification of such matters.  Grantor shall remain liable for any
deficiency if the proceeds of any sale or disposition of the Collateral are
insufficient to pay all amounts to which Grantee is entitled from Grantor, Grantor
also being liable for the attorney costs of any attorneys employed by Grantee
to collect such deficiency.

 

(b)           Each Grantor agrees that in any sale of
any Collateral, whether at a foreclosure sale or otherwise, Grantee is hereby
authorized to comply with any limitation or restriction in connection with such
sale as it may be reasonably advised by counsel is necessary in order to avoid
any violation of applicable law (including compliance with such procedures as
may restrict the number of prospective bidders and purchasers and require that such
prospective bidders and purchasers have certain qualifications), or in order to
obtain any required approval of the sale or of the purchaser by any
governmental authority, and such Grantor further agrees that such compliance
shall not result in such sale being considered or deemed not to have been made
in a commercially reasonable manner, nor shall Grantee be liable nor
accountable to Grantor for any discount allowed by the reason of the fact that
such Collateral is sold in compliance with any such limitation or restriction.

 

(c)           Grantor also agrees to pay all
reasonable fees, costs and expenses of Grantee, including, without limitation,
reasonable attorneys’ fees, incurred in connection with the enforcement of any
of its rights and remedies hereunder.

 

(d)           After payment of any debt secured by a
Permitted Lien, the Proceeds of any sale, disposition or other realization upon
all or any part of the Collateral shall be distributed by Grantee in the
following order of priorities:

 

FIRST, to
Grantee in an amount sufficient to pay in full the reasonable costs of Grantee
in connection with such sale, disposition or other realization, including all
fees, costs, expenses, liabilities and advances incurred or made by Grantee in
connection therewith, including, without limitation, reasonable attorneys’
fees;

 

SECOND, to Grantee in an amount equal to the then unpaid Secured
Obligations; and

 

FINALLY, upon
payment in full of the Secured Obligations, to Grantor or its representatives,
in accordance with the UCC or as a court of competent jurisdiction may direct.

 

8.             INDEMNITY.  Each Grantor agrees, jointly and severally,
to defend, indemnify and hold harmless Grantee and its officers, employees, and
agents against (a) all obligations,

 

8

 

demands, claims, and liabilities claimed or asserted by any other party
in connection with the transactions contemplated by this Security Agreement and
(b) all losses or expenses in any way suffered, incurred, or paid by Grantee as
a result of or in any way arising out of this Security Agreement and the
transactions contemplated thereby (including without limitation, reasonable
attorneys fees and expenses), except for losses arising from or out of Grantee’s
gross negligence or willful misconduct or violation of applicable law.

 

9.             MISCELLANEOUS.

 

9.1          No Waiver; Cumulative Remedies.

 

(a)           Grantee shall not by any act, delay,
omission or otherwise be deemed to have waived any of its respective rights or
remedies hereunder, nor shall any single or partial exercise of any right or
remedy hereunder on any one occasion preclude the further exercise thereof or
the exercise of any other right or remedy.

 

(b)           The rights and remedies hereunder
provided are cumulative and may be exercised singly or concurrently, and are
not exclusive of any rights and remedies provided by law.

 

(c)           None of the terms or provisions of this
Security Agreement may be waived, altered, modified or amended except by an
instrument in writing, duly executed by Grantor and Grantee.

 

9.2          Successor and Assigns.  This Security Agreement and all obligations
of each Grantor hereunder shall be binding upon the successors and assigns of
such Grantor, and shall, together with the rights and remedies of Grantee
hereunder, inure to the benefit of Grantee, any future holder of any of the
indebtedness and their respective successors and assigns.  No sales of participations, other sales,
assignments, transfers or other dispositions of any agreement governing or
instrument evidencing the Secured Obligations or any portion thereof or
interest therein shall in any manner affect the lien granted to Grantee
hereunder.

 

9.3          Governing Law.  In all respects, including all matters of
construction, validity and performance, this Security Agreement and the Secured
Obligations arising hereunder shall be governed by, and construed and enforced
in accordance with, the laws of the State of California applicable to contracts
made and performed in such state, without regard to the principles thereof
regarding conflict of laws.

 

[signature pages follow]

 

9

 

IN
WITNESS WHEREOF, the parties hereto have caused this Security
Agreement to be executed and delivered as of the date first set forth above.

 

 

	
   

  	
  CRDENTIA CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James D. Durham

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title: 

  	
  Chief Executive Officer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BAKER ANDERSON CHRISTIE, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James D. Durham

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title: 

  	
  Chief Executive Officer

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  NURSES NETWORK, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James D. Durham

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title: 

  	
  Chief Executive Officer

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  NEW AGE STAFFING, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James D. Durham

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title: 

  	
  Chief Executive Officer

  	
   

  
							

 

10

 

	
   

  	
  PSR NURSES, LTD.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: PSR Nurse Recruiting, Inc.

  
	
   

  	
  Its: General Partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James D. Durham

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title: 

  	
  Chief Executive Officer

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  PSR NURSE RECRUITING, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James D. Durham

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title: 

  	
  Chief Executive Officer

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  PSR NURSES HOLDINGS CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James D. Durham

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title: 

  	
  Chief Executive Officer

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  CRDE CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James D. Durham

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title: 

  	
  Chief Executive Officer

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  ARIZONA HOME HEALTH

  CARE/PRIVATE DUTY, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James D. Durham

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title: 

  	
  Chief Executive Officer

  	
   

  
							

 

11

 

	
   

  	
  CARE PROS STAFFING, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James D. Durham

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title: 

  	
  Chief Executive Officer

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  HIP HOLDING, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James D. Durham

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title: 

  	
  Chief Executive Officer

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  HEALTH INDUSTRY

  
	
   

  	
  PROFESSIONALS, L.L.C.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: HIP Holding, Inc.

  
	
   

  	
  Its: Managing Member

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James D. Durham

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title: 

  	
  Chief Executive Officer

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  TRAVMED USA, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James D. Durham

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title: 

  	
  Chief Executive Officer

  	
   

  
							

 

12

 

	
   

  	
  PRIME STAFF, LP

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: CRDE Corp.

  
	
   

  	
  Its: General Partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James D. Durham

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title: 

  	
  Chief Executive Officer

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  MINT MEDICAL STAFFING

  
	
   

  	
  ODESSA, LP

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: CRDE Corp.

  
	
   

  	
  Its: General Partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James D. Durham

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title: 

  	
  Chief Executive Officer

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  GHS ACQUISITION CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James D. Durham

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title: 

  	
  Chief Executive Officer

  	
   

  
							

 

13

 

	
  ACCEPTED AND ACKNOWLEDGED BY:

  
	
   

  
	
  MEDCAP PARTNERS L.P.

  
	
  By:

  	
  MedCap Management

  & Research LLC

  
	
  Its:

  	
  General Partner

  
	
   

  
	
   

  
	
  By:

  	
  /s/ C. Fred Toney

  	
   

  
	
  Name: C. Fred Toney

  
	
  Title: Managing Member

  
				

 

14

 

SCHEDULE A

 

PERMITTED
LIENS

 

All existing
liens of Grantor of record as of November 18, 2005.

 

A-1

 

SCHEDULE B

 

LOCATION
OF COLLATERAL

	
  ENTITY

  	
   

  	
  ADDRESS

  
	
   

  	
   

  	
   

  
	
  Crdentia Corp.

  	
   

  	
  14114 Dallas Parkway, Dallas Texas 75254

  

 

B-1

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